Exhibit 10(m)

This Agreement for Lease is
Confidential and Proprietary

EXECUTION COPY

AGREEMENT FOR LEASE

between

LMB FUNDING, LIMITED PARTNERSHIP

and

LOWER MOUNT BETHEL ENERGY, LLC

 

Dated as of December 21, 2001

 

 

THIS AGREEMENT HAS BEEN ASSIGNED AS SECURITY
FOR INDEBTEDNESS OF OWNER. SEE SECTION 17.
This Agreement has been manually executed in 38 counterparts, numbered
consecutively from 1 through 38, of which this is No. ___. To the extent, if
any, that this Agreement constitutes chattel paper (as such term is defined in
the Uniform Commercial Code as in effect in any applicable jurisdiction), no
security interest in this Agreement may be created or perfected through the
transfer or possession of any counterpart other than the original executed
counterpart
which shall be the counterpart identified as counterpart No. ___.

AGREEMENT FOR LEASE

Agreement for Lease, dated as of December 21, 2001 (as the same may be amended,
restated, modified or supplemented from time to time, "this Agreement"), between
LMB FUNDING, LIMITED PARTNERSHIP, a Delaware limited partnership ("Owner"),
formed by LMB Capital, Inc., its general partner, and LOWER MOUNT BETHEL ENERGY,
LLC, a Delaware limited liability company ("Agent").

WHEREAS, Owner has acquired a leasehold interest in the Premises (hereinafter
defined) pursuant to the Ground Lease (hereinafter defined); and

WHEREAS, contemporaneously with the execution of this Agreement, Owner and Agent
propose to enter into the Lease (hereinafter defined), providing for the lease
by Agent, as lessee, of the Project (hereinafter defined) which will be
constructed and located on the Premises pursuant to the terms of this Agreement
and the sublease by Owner to Agent of the Premises; and

WHEREAS, Owner desires to appoint Agent to act as agent for Owner in connection
with the construction of the Project, and in connection with all matters related
to such construction, and Agent wishes to accept such appointment;

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

SECTION 1.   DEFINITIONS

1.1.   Defined Terms. For the purposes of this Agreement each of the following
terms shall have the meaning specified with respect thereto:

Accrued Default Obligations: Defined pursuant to paragraph (e) of
subsection 11.2 hereof.

Accrued Project Termination Obligations: Defined pursuant to paragraph (e) of
subsection 11.4 hereof.

Acquisition Certificate: The certificate delivered by Agent to Owner pursuant to
paragraph (b) of Section 4 hereof in connection with a request for the Initial
Advance, substantially in the form of Exhibit A hereto.

Acquisition Cost: The sum of (a) the aggregate amount of advances made pursuant
to this Agreement and (b) all other costs of Owner (including costs incurred by
Agent but reimbursed by Owner) with respect to the Project (except costs for
which Owner has been reimbursed by Agent pursuant to the provisions of
subsections 11.2 and 11.4 and Section 12 hereof) arising from the acquisition,
construction, equipping, and financing thereof (including, without limitation,
Financing Costs and Owner's out-of-pocket expenses and fee obligations,
including, without limitation, the Management Fee that Owner is obligated to pay
to Merrill Leasing pursuant to the terms of the Management Agreement, prior to
the Effective Date). This definition of "Acquisition Cost" shall not include any
Unrecovered Liabilities and Judgments.

Additional Rent: Defined pursuant to subsection 1.2 hereof.

Affiliate: Defined pursuant to subsection 1.2 hereof.

Agency Agreement: The Construction Agency Agreement dated as of August 11, 2000,
as amended and restated by an Amended and Restated Construction Agency Agreement
dated as of April 6, 2001, between Owner and Agent, as the same may be further
amended, restated, modified or supplemented from time to time prior to the date
hereof.

Agent: Lower Mount Bethel Energy, LLC, a Delaware limited liability company.

Agreement: This Agreement for Lease, as the same may be amended, restated,
modified or supplemented from time to time.

Applicable Contracting Party: The contracting party identified in the applicable
Land Improvement Contract, provided that such Person shall be an independent
third party unaffiliated with Agent or the Guarantor.

Appraiser: KPMG, LLP, a limited liability partnership.

Assignee: The Collateral Trustee and any successor to the Collateral Trustee.
For purposes of the definition of "Unrecovered Liabilities and Judgments",
paragraph (n) of Section 4, subsection 8.4, subsection 8.5, subsection 8.6,
subsection 8.7, subsection 8.9, subsection 8.12, subsection 8.13, subsection
8.26, paragraph (n) of subsection 8.27, subsection 9.7, subsection 9.8,
subsection 9.12, paragraph (c) of subsection 11.1, paragraphs (d), (o) and (p)
of subsection 11.3, paragraph (c) of Section 12, clause (iii) of paragraph (a)
of Section 16, the last sentence of paragraph (b) of Section 17, the last
sentence of subsection 18.3, subsection 18.4, subsection 18.9 and the Persons to
whom certification is made in Exhibits A, B, C and D hereof, the term "Assignee"
shall include each of the purchasers and holders from time to time of Owner's
Senior Secured Notes and any other notes issued under any Note Purchase
Agreement and each lender or other Person providing credit support to Owner
under a Financing Arrangement entered into after the date hereof, and for
purposes of subsection 9.4 hereof, the term "Assignee" shall include each
Qualifying Assignee.

Available Commitment: At the time of determination, an amount equal to the
difference between (a) the sum of (i) the aggregate commitment to lend under all
Financing Arrangements and (ii) Owner's existing equity capital and additional
equity capital contributions then available to Owner and (b) the sum of (i) the
aggregate amount of all advances theretofore made pursuant to Section 3 hereof
and (ii) Financing Costs theretofore incurred by Owner or accrued under all
Financing Arrangements (other than Financing Costs which have been funded or
reimbursed with advances under this Agreement).

Basic Rent: Defined pursuant to subsection 1.2 hereof.

Budget: The itemized budget for the Project prepared by Agent and delivered to
Owner and attached hereto as Exhibit G, as amended from time to time, which
shall include, without limitation, (a) all costs incurred by Agent in performing
its duties under subsections 2.1 and 2.2 hereof, including, without limitation,
the purchase price of component parts and construction materials, survey and
survey inspection charges, appraisal, architectural, engineering, environmental
analysis, soil analysis and market analysis fees, brokerage commissions,
transfer fees and taxes that are customarily the responsibility of the
purchaser, closing adjustments for taxes, utilities and the like, escrow and
closing fees, recording and filing fees, the legal fees of Agent, and all
related costs and expenses incurred in acquiring an interest in the Premises,
whether incurred prior to or after the date hereof; (b) the costs incurred by
Agent in its capacity as agent for Owner in connection with and pursuant to the
terms of the EPC Contract (or any other construction contracts entered into by
Agent in connection with the completion of the Project); (c) the costs of
architects', attorneys', engineers' and other professionals' fees and
disbursements in connection with the construction and construction financing of
the Project, including, without limitation, the fees and disbursements of
Agent's counsel in connection with this Agreement, the Lease and the
transactions contemplated hereby and thereby and the duties of Agent hereunder,
under the EPC Contract and in all other matters involving or reasonably related
to this transaction; (d) the costs of all insurance, real estate, property and
excise tax assessments, sales and use taxes on materials used in construction,
and other operating and carrying costs paid or accrued by Agent or levied upon
the Project, Agent or Owner in connection with the Project during the term of
this Agreement; (e) costs of Agent's project representatives (inspectors,
consultants, etc.) incurred by Agent in its capacity as agent for Owner; (f) the
fees and disbursements of Owner's counsel in connection with the preparation,
execution and delivery by Owner of this Agreement and the Lease, and the
consummation of the transactions contemplated hereby or thereby; (g) any
financing costs incurred by Agent in connection with its payment of any Project
Costs prior to the date hereof and all other Financing Costs to be accrued
during the term of this Agreement; (h) any internal out-of-pocket costs incurred
by Agent in connection with the negotiation, execution and delivery of this
Agreement, the Lease, the Construction Documents and the Project Contracts; (i)
any and all other costs arising from or in connection with the construction of
the Project during the term of this Agreement; (j) the fees and disbursements of
counsel of Assignee incurred in connection with any Financing Arrangement; and
(k) a reasonable contingency amount with respect to the foregoing items, which
amount shall include Financing Costs and otherwise shall be allocated to
unexpected increases in the costs associated with the Project, including,
without limitation, the payment of any liquidated damages or any performance
bonus pursuant to the terms of any Construction Document or Project Contract;
provided that any modification or supplement to the Budget shall be made in
compliance with the provisions of subsection 2.2 hereof.

Business Day: Defined pursuant to subsection 1.2 hereof.

Capital Lease: Any lease of property which, in accordance with GAAP, should be
capitalized on the lessee's balance sheet.

Capital Lease Obligations: With respect to any Person, all obligations of such
Person as lessee under Capital Leases, in each case taken at the amount thereof
accounted for as liabilities in accordance with GAAP.

CERCLA: Defined pursuant to subsection 1.2 hereof.

CERCLIS: Defined pursuant to subsection 1.2 hereof.

Certificate of Increased Cost: The certificate delivered by Agent to Owner
pursuant to paragraph (a) of Section 7 hereof in connection with a request for a
Completion Advance, substantially in the form of Exhibit D hereto.

Certificate of Substantial Completion: The certificate delivered by Agent to
Owner pursuant to paragraph (a) of Section  6 hereof in connection with a
request for a Final Advance, substantially in the form of Exhibit C hereto.

Code: The Internal Revenue Code of 1986, as amended.

Collateral Indenture: The Indenture of Trust, Security Agreement and Collateral
Assignment of Contracts, dated as of the date hereof, entered into by Owner and
the Collateral Trustee, pursuant to which Owner has granted a security interest
in certain collateral to the Collateral Trustee, as the same may be amended,
restated, modified or supplemented from time to time in accordance with the
terms thereof.

Collateral Trustee: State Street Bank and Trust Company of Connecticut, National
Association, in its capacity as collateral trustee under the Collateral
Indenture, and its successors.

Commercial Operation: The date upon which (i) Mechanical Completion (as defined
in the EPC Contract) has occurred under the EPC Contract and the Project is
mechanically complete and checkout and start-up have occurred as evidenced by
the execution and delivery of a Notice of Mechanical Completion (as defined in
the EPC Contract) and a certificate stating that the requirements to achieve
Mechanical Completion have been met, in each case according to the procedures
set forth in the EPC Contract, (ii) Substantial Completion (as defined in the
EPC Contract) has occurred under the EPC Contract as evidenced by the execution
and delivery of a Notice of Substantial Completion (as defined in the EPC
Contract) and a certificate stating that the requirements to achieve Substantial
Completion have been met, in each case according to the procedures set forth in
the EPC Contract, and (iii) the assets included in the Project are capable of
producing revenues from operation of the Project.

Completion Advance: Any advance made by Owner under Section 7 hereof.

Completion Amount: Defined pursuant to subsection 1.2 hereof.

Completion Date: September 30, 2004.

Consent: Defined pursuant to subsection 1.2 hereof.

Consolidated EBITDA: For any period, Consolidated Net Income for such period
plus (in each case to the extent deducted in computing such Consolidated Net
Income) (i) Consolidated Interest Expense, (ii) provisions for income taxes and
(iii) provisions for depreciation and amortization (including amortization of
goodwill).

Consolidated Interest Expense: For any period, the gross interest expense
(including, without limitation, that attributable to Capital Lease Obligations
or a Synthetic Lease) of the Guarantor and its Consolidated Subsidiaries
determined on a consolidated basis for such period. For purposes of the
foregoing, gross interest expense shall be determined after giving effect to any
net payments made or received by the Guarantor with respect to Interest Rate
Protection Agreements, but without giving effect to the write-off of expenses
associated with the termination of Interest Rate Protection Agreements.

Consolidated Net Income: For any period, the net income (or net loss) of the
Guarantor and its Consolidated Subsidiaries, determined on a consolidated basis
for such period and in accordance with GAAP, excluding the effects of gains or
losses on sales of assets (excluding sales of inventory in the ordinary course
of business) and other non-cash extraordinary gains or losses as determined in
accordance with GAAP.

Consolidated Subsidiary: With respect to any Person at any date, any Subsidiary
of such Person or other entity the accounts of which would be consolidated with
those of such Person in its consolidated financial statements if such statements
were prepared as of such date in accordance with GAAP.

Construction Documents: The collective reference to the EPC Contract, the Plans,
the Permits, the Insurance Requirements, the Land Improvement Contracts, the
Siemens Turbine Contract and all other agreements entered into by Agent with
respect to constructing and equipping the Project (from and after each such
agreement becomes effective).

Construction Drawdown Schedule: The schedule of projected construction drawdowns
delivered to Owner pursuant to paragraph (v) of Section 4 hereof, a copy of
which is attached as Exhibit H hereto.

Contaminant: Defined pursuant to subsection 1.2 hereof.

Corporation: A corporation, association, company, joint stock company, limited
liability company, partnership or business trust.

Easements: The "Easements" as defined in the Ground Lease.

Effective Date: Defined pursuant to subsection 1.2 hereof.

Engineering Services Agreement: The Engineering Services Agreement, dated as of
September 21, 2001, between Owner and the General Contractor, as amended by an
Amended and Restated Engineering Services Agreement, dated as of November 19,
2001, between Owner and the General Contractor.

Environmental Approvals: Defined pursuant to subsection 1.2 hereof.

Environmental Consultant: Foster Wheeler Environmental Corporation, or such
other nationally recognized environmental consultant selected by Agent and
reasonably satisfactory in all respects to Owner and Assignee.

Environmental Damages: Defined pursuant to subsection 1.2 hereof.

Environmental Event: Defined pursuant to subsection 1.2 hereof.

Environmental Lien: Defined pursuant to subsection 1.2 hereof.

Environmental Matters: Defined pursuant to subsection 1.2 hereof.

Environmental Report: The Phase I Environmental Site Assessment and Compliance
Report dated December 18, 2001 relating to the Premises, prepared by the
Environmental Consultant and delivered to Owner and Assignee pursuant to
paragraph (n) of Section 4 of this Agreement.

Environmental Requirements: Defined pursuant to subsection 1.2 hereof.

EPC Contract: The Engineering, Procurement and Construction Contract, dated as
of December 20, 2001, between Owner and the General Contractor, as the same may
be amended, restated, modified or supplemented from time to time in accordance
with the terms hereof.

EPC Guaranty: The Guaranty, dated as of December 20, 2001, by Foster Wheeler LLC
to Owner, guaranteeing the obligations of the General Contractor under the EPC
Contract, as the same may be amended, restated, modified or supplemented from
time to time in accordance with the terms hereof.

Equity Capital: Defined pursuant to subsection 1.2 hereof.

ERISA: The Employee Retirement Income Security Act of 1974, as amended from time
to time.

Event of Default: Any of the events specified in subsection 11.1 hereof;
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.

Event of Loss: Any of the following events: (a) loss of all or a substantial
portion of the Project or the use thereof due to destruction or damage by fire
or any other cause; (b) any event which results in an insurance settlement with
respect to the Project on the basis of a total loss or constructive total loss;
and (c) the condemnation or taking or requisition of title or requisition of use
for an indefinite period or a period in excess of 180 days by any Governmental
Authority which constitutes the taking of all or a substantial portion of the
Project or all or a substantial portion of the Premises. A loss, condemnation or
taking of a "substantial portion" of the Project or the Premises shall be deemed
to occur if after such event, the remainder is not sufficient to permit
operation of the Project on a commercially feasible basis in accordance with the
Construction Documents, the Project Contracts and the Lease.

Event of Project Termination: Any of the events specified in subsection 11.3
hereof; provided that, any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.

EWG: Defined pursuant to subsection 1.2 hereof.

FERC: The Federal Energy Regulatory Commission, or any successor agency thereto.

Final Advance: The advance made by Owner under Section 6 hereof.

Final Survey: Defined pursuant to paragraph (f) of Section 6 hereof.

Financing Arrangement: Defined pursuant to subsection 1.2 hereof.

Financing Costs: All interest costs (including, without limitation, interest at
a default rate and any interest costs accruing after the commencement of a
bankruptcy or similar proceeding), premiums, make-whole payments (including,
without limitation, the Make-Whole Premium and Modified Call Premium (each as
defined in the Note Purchase Agreement)), and other costs, fees and expenses
incurred by Owner under all Financing Arrangements, and all costs and fees
incurred in connection with obtaining and maintaining equity financing,
including Return on Equity Capital, all fees payable to Owner's general partner
under its partnership agreement and any premiums and make-whole payments
incurred by Owner under its partnership agreement.

GAAP: United States generally accepted accounting principles applied on a
consistent basis.

Gas Transportation Agreement: The Gas Transportation Agreement to be entered
into by and between PPL Interstate Energy Company and Owner.

General Contractor: Foster Wheeler USA Corporation, a Delaware corporation.

Governmental Action: Defined pursuant to subsection 8.5 hereof.

Governmental Authority: Defined pursuant to subsection 1.2 hereof.

Ground Lease: Defined pursuant to subsection 1.2 hereof.

Guarantor: PPL Energy Supply, LLC, a Delaware limited liability company, and its
successors and permitted assigns.

Guaranty: The Guaranty, dated as of the date hereof, by and between the
Guarantor and Owner, as the same may be amended, restated, modified, or
supplemented from time to time.

Indebtedness: Defined pursuant to subsection 1.2 hereof.

Indemnified Person: Defined pursuant to Section 12 hereof.

Initial Advance: The advance made by Owner under Section 4 hereof.

Insurance Broker: Marsh USA Inc., or such other nationally recognized insurance
broker selected by Agent and reasonably satisfactory in all respects to Owner
and Assignee.

Insurance Requirements: Defined pursuant to subsection 1.2 hereof.

Intellectual Property Rights: Collectively, all patents, patent applications,
trademarks (whether registered or not), trademark applications, trade names,
proprietary computer software or copyrights (or any licenses, permits or
agreements with respect to any of the foregoing) necessary to construct,
operate, lease or use the Project or any part thereof as contemplated by this
Agreement, the Lease, the Construction Documents and the Project Contracts.

Interconnection Agreement: Defined pursuant to subsection 1.2 hereof.

Interconnection Facilities: The interconnections at or available to the Project
for transmission of electricity and the supply of water, natural gas, and other
necessary utilities and services, including, without limitation, the 230 kV
switchyard facilities, which are necessary to connect and deliver the Project's
output to the transmission system owned by PPL Electric Utilities Corporation.

Interest Rate Protection Agreements: Any agreement providing for an interest
rate swap, cap or collar, or any other financial agreement designed to protect
against fluctuations in interest rates.

Interim Advance: Any advance made by Owner under Section 5 hereof.

Interim Advance Certificate: The certificate delivered by Agent to Owner
pursuant to paragraph (a) of Section 5(A) hereof in connection with a request
for an Interim Advance, substantially in the form of Exhibit B hereto.

Land Improvement Contracts: Individually or collectively as the context may
require (a) the Township Development Agreement; (b) the Interconnection
Agreement; (c) the Reimbursement and Ownership Agreement; (d) the Gas
Transportation Agreement; or (e) any other agreement with (i) an electric
utility or independent system operator or other third party for the
interconnection of the Project to the electric transmission system of such
electric utility of independent system operator or for transmission system
upgrades of improvements necessary to provide transmission service for the
electrical output of the Project; (ii) a natural gas supplier or transporter for
interconnection of the Project to the supply of transportation systems of such
natural gas supplier or transporter of or other third party for upgrades or
improvements to a natural gas supplier or transporter's systems necessary to
provide natural gas service to the Project; or (iii) water and sewer system
operators for the interconnection of the project to water and/or sewer system
upgrades or improvements necessary to provide water and sewer service to the
Project.

Lease: The Lease Agreement, dated as of the date hereof, by and between Owner,
as lessor or sublessor, and Agent, as lessee or sublessee, as the case may be,
as the same may be amended, restated, modified or supplemented from time to
time.

Legal Requirements: The term "Legal Requirements" shall have the meaning set
forth opposite such term in the Lease, except that the phrase "from the date
hereof through the term of this Agreement" shall substitute for the phrase "from
the date hereof through the Lease Term and any Renewal Term".

Lessee Note: The promissory note, dated December 21, 2001, from Agent, as
borrower, in favor of Owner, as lender, evidencing the advances made by Owner to
Agent thereunder, and any promissory note or notes of Agent issued in
substitution thereof.

Lien: Defined pursuant to subsection 1.2 hereof.

Loss Payment: On the date of determination, an amount equal to the difference
between (A) 89.9% of the sum of (i) all amounts included in the Acquisition Cost
of the Project that are capitalized into the basis of the Project in accordance
with GAAP, plus (ii) all Unreimbursed Project Costs, and (B) all Unreimbursed
Project Costs.

Loss Payment Requirements: (a) Delivery by Agent to Owner of conveyancing,
assignment, transfer, termination and other documents that are customary and
sufficient to (i) convey and assign to Owner (or a designated assignee of Owner
or Assignee) on the earlier of (x) the date that is sixty (60) days after Owner
either terminates this Agreement or Agent's right to the use and possession of
the Project pursuant to subsection 11.4 hereof or (y) the date Owner, or a
designated assignee of Owner or Assignee, takes possession of the Project and
assumes the obligations of Agent thereafter accruing under the Construction
Documents and the Project Contracts pursuant to subsection 11.4 hereof, (A) good
and marketable title to Agent's interest in the Project, free and clear of any
Liens resulting from any fraudulent act, illegal act, misapplication of funds or
willful misconduct on the part of Agent or any Person under the direct or
indirect control of Agent, and (B) Agent's right, title and interest in the
Construction Documents and the Project Contracts existing on such date and
transferable by Agent (conditioned upon the assumption by Owner, or a designated
assignee of Owner or Assignee, of Agent's obligations accruing under such
Construction Documents and Project Contracts from and after such date), free and
clear of any Liens resulting from any fraudulent act, illegal act,
misapplication of funds or willful misconduct on the part of Agent or any Person
under the direct or indirect control of Agent, and (ii) terminate on the earlier
of (x) the date that is sixty (60) days after Owner terminates this Agreement or
Agent's right to the use and possession of the Project pursuant to subsection
11.4 hereof or (y) the date Owner, or a designated assignee of Owner or
Assignee, takes possession of the Project and assumes such obligations, all
rights of Agent and all other Persons under the direct or indirect control of
Agent (other than Owner and Assignee, any other Person as may be designated by
Owner and Assignee's rights under the Construction Documents and the Project
Contracts) in and to the Project;

(b)   Within a commercially reasonable period of time after Owner either
terminates this Agreement or Agent's right to the use and possession of the
Project pursuant to subsection 11.4 hereof, delivery by Agent to Owner of
evidence that Agent's right, title and interest in all Permits and Intellectual
Property Rights existing on such date and transferable by Agent have been
transferred to Owner;

(c)   Within a commercially reasonable period of time after Owner either
terminates this Agreement or Agent's right to the use and possession of the
Project pursuant to subsection 11.4 hereof, delivery by Agent to Owner of all
manuals, "as built" plans, design specifications and equipment inspection
reports related to the Project, in each case, in Agent's possession or to which
Agent has access; and

(d)   Delivery by Agent to Owner, within a commercially reasonable period of
time after Owner either terminates this Agreement or Agent's right to the use
and possession of the Project pursuant to subsection 11.4 hereof, of a Phase I
environmental site assessment and compliance audit, and upon the reasonable
request of Owner or Assignee, delivery by Agent within a commercially reasonable
period of time, a Phase II environmental audit, each satisfactory in scope and
content to Owner and Assignee (in each case, in their reasonable discretion),
prepared by the Environmental Consultant, to the effect that (i) no
Environmental Matters exist with respect to the Project or the Premises, the
effect of which could adversely affect the construction, operation, ownership,
use or value of the Project and (ii) subject to an allowance for ordinary wear
and tear, the Project may be operated to its design capacity in accordance with
the Construction Documents and the Project Contracts and in compliance with
Environmental Requirements.

Majority Holders: Defined in the Note Purchase Agreement.

Management Agreement: The Management Agreement, dated as of the date hereof,
between Owner and Merrill Leasing, as the same may be amended, restated,
modified or supplemented from time to time.

Management Fee: (a) For each full semi-annual period commencing on or after the
date hereof and ending on or prior to the Effective Date, an amount computed by
multiplying the following:

   (i)   the Acquisition Cost at the end of such semi-annual period, multiplied
by

    (ii)   a fraction having a numerator equal to the number of days in such
semi-annual period and a denominator of 365, or in a leap year, 366, multiplied
by

    (iii)   0.13%.

(b)   for any partial semi-annual period commencing on or after the date hereof
and ending on or prior to the Effective Date, an amount computed by multiplying
the following:

    (i)   the Acquisition Cost at the end of such partial semi-annual period,
multiplied by

    (ii)   a fraction having a numerator equal to the number of days during such
partial semi-annual period and a denominator of 365, or in a leap year, 366,
multiplied by

    (iii)   0.13%.

Marketing Period: Defined pursuant to paragraph (g) of subsection 11.4 hereof.

Memorandum of Understanding: The Memorandum of Understanding, dated December 3,
1999, between PPL Corporation (successor-in-interest to PP&L Resources, Inc.)
and Agent, as assigned to PPL Martins Creek, LLC pursuant to an Assignment and
Assumption Agreement dated as of the date hereof.

Merrill: Merrill Lynch Money Markets Inc., a Delaware corporation.

Merrill Leasing: ML Leasing Equipment Corp., a Delaware corporation.

Merrill Lynch: Merrill Lynch & Co., Inc., a Delaware corporation.

1935 Act: Defined pursuant to subsection 1.2 hereof.

Note Purchase Agreement: Defined pursuant to subsection 1.2 hereof.

NPL: Defined pursuant to paragraph (h) of subsection 8.27 hereof.

Operation and Maintenance Agreement: The Operation and Maintenance Agreement for
the Lower Mount Bethel Energy Project Sewage Treatment Facility, dated July 13,
2001, between Lower Mount Bethel Township and PPL Generation, LLC.

Operative Documents: This Agreement, the Lease, the Lessee Note and the Pledge
Agreement.

Operator: Agent, or such other entity designated as successor operator of the
Project by Agent that is, or is a member of a consolidated group that is, an
experienced and reputable operator of electric generating assets in the United
States.

Owner: LMB Funding, Limited Partnership, a Delaware limited partnership, or any
successor or successors to all of its rights and obligations as Owner hereunder
or its successor or successors.

Owner Lien: Any Lien or disposition of title (a) arising as a result of any
willful act or knowing omission of Owner, or (b) which is otherwise claimed by
or through Owner and which is not related to the Project constructed hereunder
or the business of Agent, and which, in either case, is not permitted or
contemplated by this Agreement, the Lease, any Financing Arrangement, the
Construction Documents, the Project Contracts or the transactions contemplated
thereby.

PCBs: Defined pursuant to paragraph (l) of subsection 8.27 hereof.

Permits: All consents, licenses, building and operating permits or other
Governmental Actions required for ownership, leasing, construction, completion,
and operation of the Project in accordance with and as contemplated by the
Construction Documents, the Project Contracts, this Agreement and the Lease.

Permitted Contest: Defined pursuant to paragraph (a) of Section 16 hereof.

Permitted Liens: Defined pursuant to subsection 1.2 hereof.

Person: Defined pursuant to subsection 1.2 hereof.

Plans: The plans and specifications for the construction of the improvements
incorporated in the EPC Contract; provided that, any amendments, modifications
or supplements to the Plans, as well as any subsequent deviation from the Plans,
shall be made in compliance with the provisions of subsection 2.2 hereof.

Pledge Agreement: The Pledge Agreement, dated as of the date hereof, by and
between Agent, as pledgor, and Owner, as pledgee, as the same may be amended,
restated, modified, or supplemented from time to time.

Potential Default: Any event which, but for the lapse of time, or giving of
notice, or both, would constitute an Event of Default.

Potential Event of Project Termination: Any event which, but for the lapse of
time, or giving of notice, or both, would constitute an Event of Project
Termination.

Power Transformers Contract: The Power Transformers Contract, dated as of
December 21, 2001, between Siemens Power Transmission & Distribution, Inc. and
Owner, as the same may be amended, restated, modified or supplemented from time
to time in accordance with the terms hereof.

PPL Retirement Plan: The defined benefit pension plan sponsored by PPL Services
Corporation, most recently amended and restated effective July 1, 1999, bearing
IRS Plan Identification Number (PIN) "001".

Premises: Defined pursuant to subsection 1.2 hereof.

Private Placement Memorandum: The Confidential Private Placement Memorandum
dated November 2001, prepared with respect to the offering of the notes sold
pursuant to the Note Purchase Agreement, together with the appendices thereto.

Project: Defined pursuant to subsection 1.2 hereof.

Project Contracts: The Siemens Turbine Contract, the Ground Lease, the EPC
Contract, the EPC Guaranty, the Engineering Services Agreement, the Power
Transformers Contract, the Township Development Agreement, the Operation and
Maintenance Agreement, the Interconnection Agreement, the Memorandum of
Understanding, the Replacement MOU Agreement (from and after the date such
agreement becomes effective), the Reimbursement and Ownership Agreement, the Gas
Transportation Agreement and any other agreement or agreements entered into by
Agent necessary for the construction and operation of the Project (from and
after the date each such agreement becomes effective). A list of the Project
Contracts in existence on the date hereof is attached as Exhibit E hereto.

Project Costs: The aggregate amount of all costs and expenses described in
clauses (a) through (k) of the definition of "Budget".

Qualifying Assignee: Defined pursuant to subsection 1.2 hereof.

Reimbursement Agreement: The Reimbursement Agreement, dated as of the date
hereof, among Owner, Agent and Merrill Leasing, as the same may be amended,
restated, modified or supplemented from time to time.

Reimbursement and Ownership Agreement: The Reimbursement, Construction and
Ownership Agreement to be entered into by and between Owner and PPL Interstate
Energy Company.

Release: Defined pursuant to subsection 1.2 hereof.

Released Improvements: Defined pursuant to paragraph (a) of subsection 18.12
hereof.

Released Land: Defined pursuant to paragraph (a) of subsection 18.12 hereof.

Remedial Action: Defined pursuant to subsection 1.2 hereof.

Replacement MOU Agreement: The agreement to be entered into by Agent and PPL
Martins Creek, LLC, relating to the provision of certain services and facilities
for the Project and replacing the Memorandum of Understanding.

Required Easements: The "Required Easements" as defined in the Ground Lease.

Responsible Officer: The President, Vice President or Secretary of Agent and any
other officers or similar officials of Agent responsible for administering the
obligations of Agent hereunder as designated in writing by Agent to Owner.

Return on Equity Capital: (a) For each full semi-annual period commencing on or
after the date hereof and ending on or prior to the Effective Date, an amount
computed by multiplying the following:

    (i)   the Equity Capital at the end of such semi-annual period, multiplied
by

    (ii)   a fraction having a numerator equal to 180 and a denominator of 360,
multiplied by

    (iii)   the decimal equivalent of a percentage equal to the Semi-Annual Cost
of Project Equity.

(b)   for any partial semi-annual period commencing on or after the date hereof
and ending on or prior to the Effective Date, an amount computed by multiplying
the following:

    (i)   the Equity Capital at the end of such partial semi-annual period,
multiplied by

    (ii)   a fraction having a numerator equal to the number of days during such
partial semi-annual period (provided that, each full calendar month during such
partial semi-annual period shall be deemed to be a 30-day month) and a
denominator of 360, multiplied by

    (iii)   the decimal referred to in paragraph (a)(iii) above.

Semi-Annual Cost of Project Equity: Defined pursuant to subsection 1.2 hereof.

Siemens Turbine Contract: The Combined Cycle Power Island Equipment Supply
Contract, dated as of August 11, 2000, between Siemens Westinghouse Power
Corporation and Owner, as the same may be amended, restated, modified or
supplemented from time to time in accordance with the terms hereof.

Subsidiary: Any Corporation a majority of the outstanding Voting Stock of which
is owned, directly or indirectly, by the Guarantor or one or more other
Subsidiaries of the Guarantor.

Substantial Completion: The satisfaction of all requirements of Section 6
hereof.

Survey: The current ALTA/ACSM Class A survey of the Premises, dated as of
December 20, 2001, prepared by the Surveyor.

Surveyor: Hanover Engineering Associates, Inc.

Synthetic Lease: Any synthetic lease, tax retention operating lease, off-balance
sheet loan or similar off-balance sheet financing product where such transaction
is considered borrowed money indebtedness for tax purposes but is classified as
an operating lease in accordance with GAAP.

Termination Event: Either (i) the failure at any time of PPL Corporation or its
successors to own, directly or indirectly, 50.01% or more of the outstanding
Voting Stock in the Guarantor, or (ii) the Guarantor's ratio of Consolidated
EBITDA to Consolidated Interest Expense shall be less than 2.0 to 1.0 for the
four most recently ended consecutive fiscal quarters (except for the fiscal
quarter ended September 30, 2001, at the end of which such ratio shall be
measured for the most recently ended consecutive three fiscal quarters) of the
Guarantor (taken as a single accounting period).

Termination Event Trigger: Defined pursuant to paragraph (p) of subsection 11.3
hereof.

Third-Party Project Event: Any Event of Default pursuant to paragraph (c) of
subsection 11.1 hereof or any Event of Project Termination pursuant to paragraph
(a), (c), (d), (e), or (o) of subsection 11.3 hereof that is not caused directly
or indirectly by Agent, does not result directly or indirectly from Agent's
actions or failures to act and is outside of Agent's control; provided, however,
that no such Event of Default or Events of Project Termination described above
shall qualify as a "Third-Party Project Event" unless (i) Agent has used its
best efforts to remedy such Event of Default or Event of Project Termination
during any grace or cure period applicable thereto in subsection 11.1 or 11.3
hereof, as the case may be, and (ii) Owner and Assignee shall not have waived
such Event of Default or Event of Project Termination or extended the applicable
grace or cure periods.

Title Company: Fidelity National Title Insurance Company of New York, or such
other title insurance company as may be approved by Owner and Assignee in
writing.

Township Development Agreement: The Land Development Improvements Agreement to
be entered into by and between Lower Mount Bethel Township and Owner.

Unrecovered Liabilities and Judgments: All liabilities of Owner, each general
and limited partner of Owner, Merrill Lynch, Merrill Leasing, each Assignee, and
their respective successor or successors, and each Affiliate of each of them,
and their respective successor or successors, and each Affiliate of each of
them, and their respective officers, directors, trustees, incorporators,
shareholders, partners (general and limited, including, without limitation, the
general and the limited partners of Owner), employees, agents and servants,
including, without limitation, taxes, losses, obligations, claims, damages
(including, without limitation, Environmental Damages), penalties, premiums,
make-whole payments, causes of action, suits, costs and expenses (including,
without limitation, reasonable attorneys', experts', consultants' and
accountants' fees and expenses) or judgments of any nature against any of the
foregoing Persons arising during or relating to any period prior to the
Effective Date and relating to or in any way arising out of (i) this Agreement
and the Agency Agreement, (ii) all contracts and agreements entered into in
accordance with this Agreement and the Agency Agreement, (iii) Owner's
acquisition, ownership and financing of the Project, (iv) Owner's acquisition of
a leasehold interest in the Premises pursuant to the Ground Lease, (v) the
construction of the Project, (vi) a casualty, condemnation or force majeure
event, (vii) the operation or use of the Premises or the Project by Agent or any
agent, sublessee or subcontractor of Agent or (viii) the Construction Documents
or the Project Contracts, and in each case arising or resulting directly or
indirectly from events occurring prior to any termination of this Agreement, in
each case to the extent that such Person has not received full indemnification
for such liabilities or judgments by Agent (unless such liabilities or judgments
have arisen from the gross negligence or willful misconduct of such Person or
such Person's respective officers, directors, trustees, incorporators,
shareholders, partners, employees, agents or servants acting on its behalf).

Unrecovered Termination Costs: At any time, an amount equal to the sum of (A)
any amounts included in the Acquisition Cost of the Project that are not paid to
Owner by Agent in connection with Agent's payment of the Loss Payment, plus (B)
the remaining 10.1% of all of Owner's obligations, costs and expenses described
in clause (i) of paragraph (e) of subsection 11.4 hereof, plus (C) in the case
of an Event of Project Termination, 100% of the amounts described in clause
(iii) of paragraph (e) of subsection 11.2 hereof, except that, for purposes of
this definition, the term "Event of Project Termination" shall be substituted
for the term "Event of Default" therein.

Unreimbursable Costs: Defined pursuant to Section 5(B) hereof.

Unreimbursed Project Costs: All Project Costs incurred by Agent and not yet
reimbursed by Owner that are capitalizable into the basis of the Project in
accordance with GAAP and which were not yet capitalized by Owner and included as
an element of Acquisition Cost (including, without limitation, any payment or
reimbursement obligation payable under a letter of credit, surety bond or other
security instrument provided pursuant to the terms and conditions of a Project
Contract as approved by Owner), as evidenced by a certificate from Agent, (i)
stating the total amount of such expenditures, the date or dates on which such
expenditures were incurred, the name and address of each party to whom the
expenditures were tendered, and such additional information as shall be
reasonably requested by Owner or Assignee and (ii) attaching true copies of
unreimbursed invoices, receipted bills and other similar supporting
documentation. Owner's good faith determination of the amount of Unreimbursed
Project Costs shall be conclusive and binding, absent manifest error. This
definition of "Unreimbursed Project Costs" shall not include any Unreimbursable
Costs.

Voting Stock: Stock (or other interests) of a Corporation having ordinary voting
power for the election of directors, managers or trustees thereof, whether at
all times or only so long as no senior class of stock has such voting power by
reason of any contingency.

1.2.   Other Definitional Provisions; Intent of Parties.

(a)   The terms "Additional Rent", "Affiliate", "Basic Rent", "Business Day",
"CERCLA", "CERCLIS", "Completion Amount", "Consent", "Contaminant", "Effective
Date", "Environmental Approvals", "Environmental Damages", "Environmental
Event", "Environmental Lien", "Environmental Matters", "Environmental
Requirements", "Equity Capital", "EWG", "Financing Arrangement", "Governmental
Authority", "Ground Lease", "Indebtedness", "Insurance Requirements",
"Interconnection Agreement", "Lien", "1935 Act", "Note Purchase Agreement",
"Permitted Liens", "Person", "Premises", "Project", "Qualifying Assignee",
"Release", "Remedial Action" and "Semi-Annual Cost of Project Equity" have the
meanings set forth opposite those terms in the Lease, except that, for purposes
of this Agreement, the terms "the Lessor", "the Lessee" and "this Lease" if used
in those definitions in the Lease shall be deemed to be the terms "Owner",
"Agent" and "this Agreement", respectively.

(b)   All terms defined in this Agreement shall have their defined meanings when
used in any certificate or other document made or delivered pursuant hereto,
unless otherwise defined therein.

(c)   The words "hereof", "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and section, subsection, paragraph,
schedule and exhibit references are to this Agreement unless otherwise
specified.

(d)   It is the intent of Agent and Owner that: (i) the Lease constitutes an
operating lease from Owner to Agent for purposes of Agent's financial reporting,
(ii) this Agreement and the Lease constitute a financing and this Agreement, the
Lease and other transactions contemplated hereby preserve the ownership of the
Project in Agent for all other purposes, including, without limitation, for
federal and state income tax and bankruptcy purposes, and (iii) the Lease grants
to Owner a Lien on the Project. Agent and Owner agree that Owner shall be deemed
to have a valid and binding security interest in and Lien on the Project, free
and clear of all Liens, other than Permitted Liens, as security for the
obligations of Agent under the Lease and this Agreement (it being understood and
agreed that Agent does hereby grant a Lien, and convey, transfer, assign,
mortgage and warrant to Owner and its successors, transferees and assigns, for
the benefit of Owner and its successors, transferees and assigns, on the Project
and any proceeds or products thereof, to have and hold the same as collateral
security for the payment and performance of the obligations of Agent under this
Agreement and the Lease).

(e)   Specifically, without limiting the generality of paragraph (d) of this
subsection 1.2, Agent and Owner intend and agree that in the event of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any State thereof affecting Agent, Owner, Assignee or any
collection actions relating thereto, the transactions evidenced by this
Agreement and the Lease shall be regarded secured as loans made by Owner to
Agent.

(f)   It is the intent of Agent and Owner that, in the event Agent shall incur
or take on any obligation to pay or discharge any Unreimbursable Costs, such
action shall be regarded as a misapplication of funds for purposes of paragraphs
(d) and (e) of subsection 11.1 hereof.

SECTION 2.   APPOINTMENT OF AGENT

2.1.   Appointment and Duties of Agent. Owner hereby appoints Agent as its agent
for the acquisition, design, construction, repair, maintenance, equipping, and
installation of the Project, including the performance of the obligations under
the Siemens Turbine Contract, and the provision of security against harm and
damage to the Project, and Agent hereby accepts such appointment. Agent agrees,
all in accordance with its best business judgment and this Agreement, to
supervise the good and workmanlike completion of the Project pursuant to this
Agreement and the EPC Contract and in accordance with all applicable Legal
Requirements and Insurance Requirements. Agent (or its Affiliate) will also
enter into such other contracts, as agent for Owner (including all construction
contracts, insurance, replacement construction contracts and subcontracts and
contracts for the purchase of equipment and services), as are necessary for the
completion of the Project pursuant to the EPC Contract and in accordance with
all applicable Legal Requirements and Insurance Requirements; provided that
(i) Agent shall, pursuant to the Pledge Agreement, collaterally assign to Owner,
all of Agent's right, title and interest in all such contracts, and (ii) if any
of such contracts could reasonably be expected to cause the Project Costs to
exceed the Budget or adversely affect the performance of the General
Contractor's obligations under the EPC Contract (including, without limitation,
by providing a potential basis for a change order that would require the consent
of Owner and Assignee pursuant to subsection 10.1 hereof, or a force majeure
delay or similar relief thereunder) or of Siemens Westinghouse Power Corporation
under the Siemens Turbine Contract, Agent shall be required to obtain the
consent of Owner and Assignee to such contract prior to its execution of such
contract. Agent and Owner hereby agree that, at such time as the EPC Contract
provides for the transfer of title to any portion of the Project, title to such
portion or portions of the Project shall automatically be transferred to Owner,
at no cost to Owner, and Agent shall, upon the request of Owner, execute or
cause such General Contractor to execute, as the case may be, a bill of sale or
similar conveyance instrument to evidence such transfer of title. For purposes
of this Agreement, Owner and Agent acknowledge and agree that Agent is acting in
the capacity of a general construction agent. Owner hereby approves the Siemens
Turbine Contract, the EPC Contract and each of the other Project Contracts
listed on Exhibit E hereto and in existence on the date hereof.

2.2.   Cost and Completion of the Project. Agent agrees that the Acquisition
Cost of the Project shall not exceed $455,043,969.20, provided that the
Acquisition Cost of the Project may be increased by an amount up to $45,504,396
to provide for additional financing of cost overruns relating to construction of
the Project as described in the immediately succeeding sentence. After receiving
the Initial Advance, Agent may from time to time amend, modify or supplement the
Plans or Budget, which amendment or modification may include a contingency
amount of up to $45,504,396 to provide for additional financing of cost overruns
relating to construction of the Project; provided that no amendment,
modification or supplement shall (a) be made without Agent giving at least five
(5) Business Days' prior written notice of such amendment, modification or
supplement to Owner and Assignee and, if such amendment, modification or
supplement shall have the effect of increasing the Budget, Agent, on or before
entering into such amendment, modification or supplement, shall provide (x) an
endorsement from the Title Company increasing the amount of coverage under the
title policies delivered pursuant to Section 4 hereof in accordance with the
amended Budget and (y) to the extent not previously authorized, letters to the
benefit of Owner and Assignee from each reinsurer of the title policies
delivered to Owner and Assignee pursuant to Section 4 hereof, in form and
substance reasonably satisfactory to Owner and Assignee, pursuant to which each
such reinsurer agrees to continue to act as a reinsurer of such title policies
notwithstanding such endorsement and increase in the amount of coverage; (b)
result in a breach under subsection 10.1 of this Agreement; (c) render Agent
unable to perform all of its obligations under the Construction Documents, the
Project Contracts, this Agreement or the Lease, or otherwise reasonably be
expected to have a material adverse effect on (i) the construction, operation,
maintenance, leasing, ownership, use, value or regulatory status of the Project,
(ii) the ability of Agent to observe and perform its obligations under this
Agreement, the Lease, the Construction Documents or the Project Contracts in a
timely manner or the ability of the Guarantor to perform its obligations under
the Guaranty in a timely manner or (iii) the rights or interests of Owner or
Assignee under this Agreement, the Lease, the Guaranty, the Construction
Documents or the Project Contracts; or (d) result in a breach of the restriction
contained in the first sentence of this subsection 2.2. In the event that any
proposed amendment, modification or supplement to the Plans could reasonably be
expected to result in (i) a material diminution in the value or usefulness of
the Project, or (ii) result in a material adverse effect on the ability of Agent
to perform its obligations under this Agreement, the Lease, the Construction
Documents or the Project Contracts, Agent must obtain the prior consent of Owner
and Assignee to any such amendment, modification or supplement. Agent shall
promptly deliver to Owner and Assignee any such amended, modified or
supplemented Plans or Budget. Owner acknowledges that Agent is not obligated to
incur costs with respect to the construction of the Project in excess of the
aggregate amount of all debt and equity commitments maintained by Owner.

2.3.   Lease of the Project.

(a)   When the requirements for Substantial Completion have been satisfied by
Agent, Agent shall deliver to Owner and Assignee the Certificate of Substantial
Completion, and Agent shall request the Final Advance which, subject to the
provisions of paragraph (b) of this subsection 2.3, shall be sufficient to
provide for payment of all the costs of constructing the Project and completing
any open punch list items (other than those certain specifically identified and
quantified costs that are not yet due to the General Contractor and which will
be included as part of a Completion Advance, provided that the Available
Commitment remaining after the Final Advance is equal to or exceeds the
aggregate amount of all such identified and quantified costs). By delivery of
the Certificate of Substantial Completion, Agent evidences the acceptability of
the Project for lease by Agent under the Lease. If the conditions set forth in
Section 6 hereof have been satisfied, Owner, within ten (10) Business Days of
receipt of the Certificate of Substantial Completion, shall make the Final
Advance. Execution and delivery by Agent of the Certificate of Substantial
Completion shall constitute (i) acknowledgment by Agent that the Project has
been accepted for lease by Agent as of the Effective Date, (ii) acknowledgment
by Agent that the Project is subject to all of the covenants, terms and
conditions of the Lease, and (iii) certification by Agent that the
representations and warranties contained in Section 2 of the Lease are true and
correct in all material respects on and as of the Effective Date as though made
on and as of such date and that there exists on such date no (1) Event of
Default, Event of Default (as defined in the Lease), Event of Loss, Event of
Project Termination or Termination Event, or (2) Potential Default, Potential
Default (as defined in the Lease) or Potential Event of Project Termination.

(b)   Subject to the terms of subsection 3.1 hereof, up to six (6) months after
the Final Advance has been made, Agent may, by delivering a Certificate or
Certificates of Increased Cost, request Completion Advances. On or before the
fifth Business Day prior to the date upon which Agent receives the Final
Advance, Agent shall designate the Completion Amount. After such designation the
aggregate amount of all Completion Advances shall not exceed the Completion
Amount. Agent's designation of the Completion Amount shall be accompanied by a
calculation of the Completion Amount, which shall reflect all Unreimbursed
Project Costs for which Agent expects to seek reimbursement hereunder after the
Final Advance less the proceeds, if any, that Agent expects to receive from the
disposition of excess construction materials. The Completion Amount shall in no
event exceed the aggregate amount of Completion Advances that Agent is entitled
to receive under the terms hereof. If no Completion Amount is designated as
hereinabove provided, no Completion Advances will be made. Each Certificate of
Increased Cost shall reflect all Unreimbursed Project Costs designated by Agent
for payment by such Completion Advances, all costs incurred by Agent since the
last advance to complete the Project, all costs incurred by Agent to discharge
all retentions and to dispose of excess construction materials and all proceeds
received by Agent since the last advance hereunder from the disposition of
excess construction materials. In the event that the aggregate amount of
Completion Advances made is less than the Completion Amount, on the day that is
six (6) months after the date of the Final Advance, Exhibit D to the Lease shall
be amended to decrease the Adjusted Acquisition Cost (as defined in the Lease)
by the difference between the Completion Amount and the aggregate amount of
Completion Advances made. The amount of any proceeds from the disposition of
excess construction materials that exceeds the amount for such disposition
included in the calculation of the Completion Amount shall reduce the amount of
Completion Advances made by the amount of such excess, or, if the amount of such
excess exceeds the Completion Amount, shall be paid to Owner. If any amounts are
paid to Owner pursuant to the preceding sentence, the amount so paid shall be
added to the decrease of Adjusted Acquisition Cost reflected on Exhibit D to the
Lease pursuant to the second preceding sentence. Nothing in this subsection 2.3
shall relieve the General Contractor or any other contractor or subcontractor
which are party to any contracts for the purchase of goods or services relating
to the Project of any of its respective obligations thereunder.

2.4.   Powers of Agent. Agent shall have the right to act for and on behalf of
Owner with full and complete authority to perform all obligations, to exercise
all rights and give all consents under the Construction Documents, to appear
before each applicable Governmental Authority to resolve issues related to the
platting, zoning and use of the Project, to obtain all Permits and Intellectual
Property Rights, and to grant and obtain easements for the benefit of the
Project or which are deemed reasonably necessary by Agent for the intended use
of the Project, provided that no such action shall be made without the prior
written consent of Owner and Assignee to such action, unless Agent shall
reasonably determine that any proposed action could not reasonably be expected
to (i) result in a material diminution in the value or usefulness of the Project
or (ii) result in a material adverse effect on the ability of Agent to perform
its obligations under this Agreement, the Lease, the Construction Documents or
the Project Contracts. In connection therewith, Owner shall cooperate with Agent
with respect to all filings relating to the Project. In addition, Agent shall
have the right to act for and on behalf of Owner with full and complete
authority to appoint, employ and deal with the architects, engineers,
consultants, contractors, vendors and suppliers; purchase and arrange for
delivery of all materials, supplies, furniture, fixtures, and equipment; and to
approve all related vouchers, invoices and statements relating to the Project.

SECTION 3.   ADVANCES

3.1.   Agreement to Make Advances. Subject to the conditions and upon the terms
herein provided, including, without limitation, that the Available Commitment
not be exceeded, Owner agrees to make available to Agent advances from time to
time to pay or reimburse the Project Costs (including, without limitation, to
reimburse Agent for any costs incurred with respect to the insurance policies
(including deductibles paid by Agent thereon) required pursuant to subsection
9.3 of this Agreement), up to an aggregate principal amount not to exceed the
maximum amount for the Project set forth in subsection 2.2 hereof. Agent agrees
not to incur, in the aggregate, any Project Costs in excess of the sum of (i)
the amount of Owner's debt and equity capitalization at such time and (ii) any
other amount of debt financing and equity capital available to Owner at such
time. Subject to the terms of this Agreement, Owner agrees to make (a) an
Initial Advance in accordance with Section 4 of this Agreement, (b) Interim
Advances from time to time in accordance with Section 5 of this Agreement, (c) a
Final Advance in accordance with Section 6 of this Agreement and (d) Completion
Advances in accordance with paragraph (b) of subsection 2.3 and Section 7 of
this Agreement.

3.2.   Procedure for Advances. Agent shall give Owner notice in accordance with
Sections 4, 5, 6 and 7 hereof, as the case may be, of its request for an advance
pursuant to this Agreement, specifying a Business Day on which such advance is
to be made and the amount of the advance and to whom payment is to be made if
other than to Agent. Not later than 2:00 P.M. New York time on the date for the
advance specified in such notice, provided all conditions to that advance have
been satisfied (or waived by Owner and Assignee), Owner shall provide to Agent,
or to vendors or suppliers identified to Owner's reasonable satisfaction, in
immediately available funds, the amount of the advance then requested. Owner
shall have no obligation to make advances (including Completion Advances) more
often than once every calendar month.

3.3   Determination of Amounts of Advances.

(a)   Initial Advance. The amount of the Initial Advance shall be made in
accordance with the Budget and the Acquisition Certificate, and shall be
sufficient to pay or reimburse in full any Project Costs (other than
Unreimbursed Project Costs which Agent has designated as not to be paid at the
time of the Initial Advance) and rent incurred under the Ground Lease incurred
by Agent on or prior to the date of the Initial Advance. All such costs for
which the Initial Advance is requested shall be specifically set forth in the
Budget attached to the Acquisition Certificate, and in the request for the
Initial Advance, and Owner shall have no obligation to advance any funds in the
Initial Advance which are not so specifically set forth in such documents.

(b)   Interim Advances. Disbursements for Project Costs shall be made as the
same are incurred within the limits of the Budget, based upon the certifications
of Agent contained in an Interim Advance Certificate.

(c)   Final Advance. The amount of the Final Advance shall be made in accordance
with the Budget and the Certificate of Substantial Completion, and shall be
sufficient, subject to the provisions of paragraph (d) of this subsection 3.3,
for payment in full of all costs of designing, constructing, equipping and
installing the Project (other than Unreimbursed Project Costs which Agent has
not designated to be paid in the Final Advance and those estimated costs that
are not yet due in connection with the designing, constructing, equipping and
installing of the Project and which will be included as part of a Completion
Advance in an amount not to exceed the amount of such estimate, provided that
the sum of the Available Commitment remaining and any insurance or condemnation
proceeds available to Owner after the Final Advance is equal to or exceeds the
aggregate amount of all such estimated costs), free of all Liens other than
Permitted Liens. Owner shall have no obligation to make the Final Advance unless
all such costs as set forth in the Budget, the Certificate of Substantial
Completion, and the request for the Final Advance shall not cause the
Acquisition Cost (inclusive of all costs that are not yet due but will be
subsequently included as part of a Completion Advance) to exceed the maximum
amount for the Project set forth in subsection 2.2 hereof. Agent shall request
the Final Advance within thirty (30) days of achieving Substantial Completion.

(d)   Completion Advances. The amount of each Completion Advance shall be made
in accordance with and shall not exceed the amount set forth in the Certificate
of Increased Cost, shall not cause the Acquisition Cost to exceed the maximum
amount for the Project set forth in subsection 2.2 hereof, and shall be
sufficient for payment in full of all costs that were not the subject of any
previous advance, other than costs to be paid with the proceeds of a subsequent
Completion Advance. Owner shall have no obligation to make a Completion Advance
unless all such costs are adequately set forth in the Certificate of Increased
Cost and will be sufficient for payment in full of all costs with respect to the
Project, other than costs to be paid with the proceeds of a subsequent
Completion Advance.

3.4.   Partial Advances. If any or all conditions precedent to any advance have
not been satisfied on the applicable date for a requested advance, Owner in its
sole discretion may, but shall have no obligation to (other than as provided in
Section 5(B) hereof), disburse all or part of the requested advance.

3.5.   Available Commitment. If the cost to complete construction of the Project
shall exceed the amount described in the first sentence of subsection 2.2
hereof, upon the agreement of Agent, Owner and Assignee, the Available
Commitment may be increased by an amount sufficient to complete construction of
the Project, and upon such increase Agent shall continue diligently to complete
construction of the Project in accordance with this Agreement. Amounts advanced
to Agent by Owner to complete construction of the Project shall be included as
part of Acquisition Cost.

SECTION 4.   CONDITIONS PRECEDENT TO THE INITIAL
ADVANCE WITH RESPECT TO THE PROJECT

Owner's acquisition of the Project and Owner's obligation to make the Initial
Advance shall both be subject to the satisfaction of the conditions set forth in
this Section 4 and to the receipt by Owner and Assignee of the documents set
forth in this Section 4, in each case, except as otherwise provided herein, in
form and substance satisfactory to Owner and Assignee. Owner shall have at least
ten (10) Business Days to review the Acquisition Certificate and its attachments
prior to making any Initial Advance. For purposes of the Initial Advance,
Permitted Liens shall not include any taxes, assessments, governmental charges
or levies, except to the extent that such taxes, assessments, governmental
charges or levies are due and payable but not yet delinquent or are being
contested in a Permitted Contest and are included in the Budget.

The following are the documents to be received by Owner and Assignee and the
conditions to be satisfied:

(a)   Lease, Guaranty, Consent, Pledge Agreement, Lessee Note and Related
Documents. A fully executed copy of the Lease, the Guaranty, the Pledge
Agreement, the Lessee Note, the Consent and any consent of the Guarantor as
shall be reasonably requested by Owner or Assignee.

(b)   Acquisition Certificate. An Acquisition Certificate duly executed by
Agent.

(c)   Ground Lease. An original duly executed copy of the Ground Lease (with the
Premises not being subject to any Liens other than Permitted Liens), including a
true and complete copy of the metes and bounds legal description of the
Premises, and a copy of a fully executed short form or memorandum of the Ground
Lease in the appropriate form for recording in the jurisdiction in which the
Premises are located, which form shall be presented to the appropriate filing
office on or before the date of the Initial Advance.

(d)   Memorandum of Lease. Two original counterparts of a memorandum of the
Lease in the appropriate form for recording in the jurisdiction in which the
Premises are located, executed by Agent, as lessee.

(e)   Certificates of Insurance and Insurance Letter. (i) Certificates of
insurance or other evidence reasonably acceptable to Owner and Assignee
certifying that the insurance on the Project required by subsection 9.3 hereof
is in effect; and (ii) a letter from the Insurance Broker certifying as to,
among other things, Agent's compliance with the provisions of subsection 9.3
hereof, which letter shall be satisfactory to Owner and Assignee in all
respects.

(f)   Taxes. Certification by Agent that all due and payable taxes and
assessments applicable to the Premises have been paid in full or are being
contested by Agent as a Permitted Contest pursuant to paragraph (a) of Section
16 of this Agreement, and that all such taxes and assessments owed by Agent (or
estimated amounts thereof) are included in the Budget.

(g)   Availability of Utilities. Certification by Agent that all utility
services and facilities (including, without limitation, gas, electrical, water
and sewage services, and Interconnection Facilities) (i) which are necessary and
required during the construction period have been completed or will be available
in such a manner that construction will not be impeded by a lack thereof and
(ii) which are necessary for operation and occupancy of the Project are or will
be completed in such a manner and at such a time as will assure the operation of
the Project.

(h)   Flood Zone. A certification by the Surveyor on the Survey or an official
of an appropriate Governmental Authority that the Premises are not located in
any "special flood hazard area" as such term is used in the Flood Disaster
Protection Act of 1973.

(i)   Permits. Except as set forth on Schedule 8.26, all Permits and
Governmental Actions required for the construction and operation of the Project
and for the use of the Premises in accordance with and as contemplated by the
Construction Documents, the Project Contracts, this Agreement and the Lease have
been or will be issued or obtained in such a manner that such construction,
operation and use will not be impeded or delayed by a lack thereof and no
liabilities or penalties shall result from a lack thereof. A list of the Permits
and Governmental Actions which have not been or will not be issued or obtained
as of the date of the Initial Advance is set forth on Schedule 4(i) hereto.

(j)   Survey. The Survey certified by the Surveyor to the Title Company, Agent,
Owner and Assignee, with a metes and bounds description of the perimeter of the
Premises, showing the location of all exceptions to title of the Project as set
forth in the title insurance policies delivered to Owner and Assignee pursuant
to paragraph (s) of this Section 4.

(k)   Site Plan. A site plan prepared on behalf of Agent, showing the proposed
location of the Project to be constructed on the Premises.

(l)   Plans. A copy of the Plans and, if requested by Owner, such other
specifications for the construction of the Project as are available to Agent.

(m)   Use of Proceeds, No Liens and Representations of Agent. (i) All costs and
expenses which are the subject of the Initial Advance requested have been paid
in full or will be paid in full out of the proceeds of the Initial Advance; (ii)
all premiums and costs owing under any insurance policy pursuant to subsection
9.3 hereof have been paid in full or will be paid in full out of the proceeds of
the Initial Advance, by the General Contractor or otherwise, and all such
insurance policies are in full force and effect; (iii) there are no Liens on the
Premises that are not Permitted Liens; (iv) all representations and warranties
in this Agreement, in the Lease and in the various agreements, instruments and
documents delivered to Owner by or on behalf of Agent in connection with the
Initial Advance, are and remain true and correct on and as of the date of the
Initial Advance as if made on and as of the date of the Initial Advance (except
to the extent such representations and warranties are made expressly as to a
specific earlier date, in which case such representations and warranties were
true and correct as of such earlier date); and (v) no Event of Loss, Event of
Default, Potential Default, Event of Project Termination, Potential Event of
Project Termination or Termination Event under this Agreement has occurred and
is continuing on the date such Initial Advance is to be made or will exist by
reason of giving effect to such Initial Advance.

(n)   Environmental Report. The Environmental Report certified to Owner and each
Assignee and otherwise satisfactory to Owner and each Assignee in all respects,
prepared by the Environmental Consultant. The Environmental Report shall
include, without limitation, a conclusion concerning the ability to obtain and
operate the Project in compliance with all required Environmental Approvals,
including the ability of the Project to achieve air emission limits and
discharge or effluent limits contained in any Permit issued pursuant to any
Environmental Requirement and a conclusion concerning the potential for soil,
groundwater and other contamination at the Premises arising from prior
operations and as may arise during the term of this Agreement and the Lease.

(o)   Opinions of Counsel for Agent and Guarantor. (i) An opinion of Orrick,
Herrington & Sutcliffe LLP, counsel for Agent and Guarantor, (ii) an opinion of
Robert W. Burke, Esq., in-house counsel of Agent, and (iii) an opinion of
Michael A. McGrail, Esq., in-house counsel of Guarantor, in each case in form
and substance reasonably satisfactory to Owner and Assignee.

(p)   Budget. A copy of the Budget and certification by Agent that such Budget
is (i) true, complete and correct, (ii) accurately representative of all
expected costs of the Project, and (iii) within the dollar limit set forth in
the first sentence of subsection 2.2 hereof.

(q)   Request for Initial Advance. A duly executed request for advance, stating
the total amount of the Initial Advance requested, the date on which the advance
is to be made, the name and address of the party to whom the Initial Advance is
to be tendered, wiring instructions and an itemization of the various costs
constituting the amount of the Initial Advance in such detail as will be
necessary to provide disbursement instructions, including an accounting of
expenditures for costs shown on the Budget for which payment or reimbursement is
being requested.

(r)   Project Contracts; Construction Documents. A fully executed and complete
copy of each of the Construction Documents and the Project Contracts which have
been executed prior to the date of the Initial Advance.

(s)   Title Insurance Policy. An irrevocable commitment from the Title Company
to issue (i) an ALTA owner's policy covering Owner's leasehold interest in the
Premises and covering Owner's fee ownership of the improvements with a pending
improvements clause and (ii) a lender's policy with a pending disbursements
clause for the benefit of each Assignee, in each case complying with the rules
and regulations promulgated by the Pennsylvania Department of Insurance, issued
by the Title Company in an amount at least equal to $455,043,969.20, and
otherwise acceptable to Owner and Assignee in all respects (including such
additional endorsements, including, without limitation, those endorsements
listed on Schedule 4(s) hereto, as may be reasonably requested by Owner or
Assignee), together with legible photocopies of all underlying documents of
record affecting the Premises as disclosed in the exceptions to coverage
described in the title insurance policies. Owner also shall have received
evidence satisfactory to it that all premiums in respect of such policies have
been paid as of the closing or will be paid out of the proceeds of the Initial
Advance.

(t)   Representations and Warranties of Guarantor. All representations and
warranties of the Guarantor in the Guaranty are and remain true and correct on
and as of the date of the Initial Advance as if made on and as of the date of
the Initial Advance (except to the extent such representations and warranties
are made expressly as to a specific earlier date, in which case such
representations and warranties were true and correct as of such earlier date),
and no default under the Guaranty has occurred and is continuing on the date
such Initial Advance is to be made or will exist by reason of giving effect to
such Initial Advance.

(u)   Construction Drawdown Schedule. A copy of the Construction Drawdown
Schedule prepared by Agent, which reflects Agent's best estimates as to the
amount and timing of construction drawdowns at the time delivered.

(v)   Construction Progress. If requested by Owner, Owner and Assignee shall
have received true copies of unpaid invoices, receipted bills and Lien waivers
(to the extent such Lien waivers are required under any Project Contract), and
such other reasonably available supporting information as Owner or Assignee may
reasonably request.

(w)   No Other Security Interests. All materials and fixtures incorporated in
the construction of the Project have been purchased so that title thereto may
automatically be transferred to Owner, and there shall be no Liens on such
materials and fixtures other than Permitted Liens.

(x)   Material Adverse Change. Since the date of the Private Placement
Memorandum, there has been no change in the business, assets, properties,
revenues, financial condition, operations or prospects of Agent which could
reasonably be expected to have a material adverse effect on (i) the
construction, operation, maintenance, leasing, ownership, use, value or
regulatory status of the Project, (ii) the ability of Agent to observe and
perform its obligations under the Operative Documents, or any of the
Construction Documents or the Project Contracts in a timely manner or the
ability of the Guarantor to perform its obligations under the Guaranty in a
timely manner, or (iii) the rights or interests of Owner or Assignee under the
Operative Documents, the Guaranty, or any of the Construction Documents or the
Project Contracts.

(y)   Conditions Precedent Under Project Contracts and Construction Documents.
All conditions precedent to the effectiveness of each Construction Document and
Project Contract in effect as of the date of the Initial Advance, have been
satisfied in full (other than those (i) relating to completion of construction
of the Project, (ii) which the failure to satisfy could not reasonably be
expected to have a material adverse effect on Agent's ability to perform its
obligations under any of the Construction Documents and Project Contracts or
(iii) which will be fulfilled as a result of Agent's execution and delivery of
and performance under this Agreement).

(z)   Intellectual Property Rights. All Intellectual Property Rights necessary
for the use and operation of the Project in accordance with and as contemplated
by the Construction Documents, the Project Contracts, this Agreement and the
Lease have been or, prior to the Effective Date will have been, obtained and are
or, prior to the Effective Date will be, in full force and effect. There has
been no material breach under any such Intellectual Property Rights, and there
are no pending or threatened claims or proceedings relating thereto which, if
adversely determined, could reasonably be expected to have a material adverse
effect on (i) the construction, operation, maintenance, leasing, ownership, use,
value or regulatory status of the Project, (ii) the ability of Agent to observe
and perform its obligations under the Operative Documents, or any of the
Construction Documents or the Project Contracts in a timely manner or the
ability of the Guarantor to perform its obligations under the Guaranty in a
timely manner or (iii) the rights or interests of Owner or Assignee under the
Operative Documents, the Guaranty, or any of the Construction Documents or the
Project Contracts.

(aa)   Required Easements. The Required Easements have been or, prior to the
Effective Date will be, obtained and are or, prior to the Effective Date will
be, in full force and effect and constitute all easements, rights-of-way and
licenses contemplated to be in place under the Construction Documents, the
Project Contracts, this Agreement and the Lease as of the date of the Initial
Advance. There has been no material breach under any such Required Easements,
and there are no pending or, to the best of Agent's knowledge, threatened claims
or proceedings relating thereto which, if adversely determined, could reasonably
be expected to have a material adverse effect on (i) the construction,
operation, maintenance, leasing, ownership, use, value or regulatory status of
the Project, (ii) the ability of Agent to observe and perform its obligations
under the Operative Documents, or any of the Construction Documents or the
Project Contracts in a timely manner or the ability of the Guarantor to perform
its obligations under the Guaranty in a timely manner or (iii) the rights or
interests of Owner or Assignee under the Operative Documents, the Guaranty, or
any of the Construction Documents or the Project Contracts.

(bb)   Appraisal. An appraisal prepared by the Appraiser and reasonably
satisfactory to Owner and Assignee in all respects, which appraisal shall
include an initial fair market valuation of at least $455,043,969.20 of the
Project as constructed.

(cc)   Opinion of Local Pennsylvania Counsel. An opinion of Morgan, Lewis &
Bockius LLP, special Pennsylvania counsel, in form and substance reasonably
satisfactory to Owner and Assignee.

(dd)   Additional Matters. Such other documents and legal matters in connection
with a request for the Initial Advance as are reasonably requested by Owner or
Assignee.

SECTION 5.   CONDITIONS PRECEDENT TO OWNER'S OBLIGATION
TO MAKE INTERIM ADVANCES WITH RESPECT TO THE
PROJECT AFTER THE INITIAL ADVANCE

(A)   Owner's obligation to make any Interim Advance after the Initial Advance
shall be subject to the satisfaction of the conditions set forth in this Section
5 and to the receipt by Owner and Assignee of the documents set forth in this
Section 5. Owner shall have at least five (5) Business Days to review the
Interim Advance Certificate and its attachments prior to making any Interim
Advance.

The following are the documents to be received by Owner and Assignee and the
conditions to be satisfied:

(a)   Interim Advance Certificate. An Interim Advance Certificate duly executed
by Agent.

(b)   Use of Proceeds and Continuing Representations of Agent. (i) All costs and
expenses which are the subject of the Interim Advance requested have been paid
in full or will be paid in full out of the proceeds of the Interim Advance; (ii)
all premiums and costs owing under any insurance policy pursuant to subsection
9.3 hereof have been paid in full by the General Contractor or otherwise or will
be paid in full out of the proceeds of the Interim Advance, and all such
insurance policies are in full force and effect; (iii) all representations and
warranties in this Agreement (except for the representations and warranties made
in subsections 8.9 and 8.26 hereof which shall not be made by Agent), in the
Lease and in the various agreements, instruments and documents delivered to
Owner by or on behalf of Agent in connection with the Interim Advance, are and
remain true and correct in all material respects on and as of the date of the
Interim Advance as if made on and as of the date of the Interim Advance (except
to the extent such representations and warranties are made expressly as to a
specific earlier date, in which case such representations and warranties were
true and correct as of such earlier date); and (iv) no Event of Loss, Event of
Default, Potential Default, Event of Project Termination, Potential Event of
Project Termination or Termination Event under this Agreement, or default under
any Project Contract or Construction Document has occurred and is continuing on
the date such Interim Advance is to be made or will exist by reason of giving
effect to such Interim Advance.

(c)   Construction Progress. Owner and Assignee shall have received, if
requested by Owner, (i) all Monthly Progress Reports (as defined in the EPC
Contract) delivered under the EPC Contract, (ii) true copies of unpaid invoices,
receipted bills and Lien waivers (to the extent such Lien waivers are required
under the EPC Contract or any other Project Contract), and such other reasonably
available supporting information as Owner or Assignee may reasonably request and
(iii) a certificate from Agent certifying to Owner and Assignee the amount of
Unreimbursed Project Costs outstanding on the date of such Interim Advance.

(d)   No Other Security Interests. All materials and fixtures incorporated in
the construction of the Project have been purchased so that title thereto may
automatically be transferred to Owner pursuant to the EPC Contract, and there
shall be no Liens on such materials and fixtures other than Permitted Liens.

(e)   Request for Interim Advance. A duly executed request for advance, stating
the total amount of the Interim Advance requested, the date on which such
Interim Advance is to be made, wiring instructions and a specific breakdown of
items and costs for which the Interim Advance is being made.

(f)   Representations and Warranties of Guarantor. All representations and
warranties of the Guarantor in the Guaranty (except for the representations and
warranties made in Sections 4.5, 4.6, 4.8 and 4.9 thereof which shall not be
made by the Guarantor) are and remain true and correct in all material respects
on and as of the date of the Interim Advance as if made on and as of the date of
such Interim Advance (except to the extent such representations and warranties
are made expressly as to a specific earlier date, in which case such
representations and warranties were true and correct as of such earlier date),
and no default under the Guaranty has occurred and is continuing on the date
such Interim Advance is to be made or will exist by reason of giving effect to
such Interim Advance.

(g)   Satisfactory Title. A notice of title continuation or date-down
endorsement issued by the Title Company in respect of Owner's title policy and
Assignee's title policy indicating that, since the last advance, there have been
no changes in the state of title, except for Permitted Liens and increasing the
pending disbursements/improvements coverage to include the amount of such
Interim Advance costs.

(B)   If Agent is unable to satisfy the conditions set forth in clause (b) or
(f) of paragraph (A) of this Section 5, Agent shall promptly deliver to Owner
and Assignee a notice describing in reasonable detail the conditions it is
unable to satisfy, along with an Interim Advance Certificate that complies with
the remaining provisions of paragraph (A) of this Section 5. Upon receipt of the
notice described in the immediately preceding sentence, Owner shall remain
obligated to make an Interim Advance to Agent to reimburse Agent for all
Unreimbursed Project Costs incurred by Agent since the date of the last advance
under this Agreement; provided, however, that (i) Agent shall not thereafter be
entitled to incur any additional Project Costs for the period commencing on the
date that is five (5) days after Agent's delivery of such notice (the
"Unreimbursable Costs") until such time as Agent has satisfied all the
conditions set forth in paragraph (A) of this Section 5 (including, without
limitation, the conditions of clauses (b) and (f) of paragraph (A) of this
Section 5), (ii) Agent shall, unless otherwise directed by Owner, promptly
notify each of its contractors and subcontractors to immediately cease incurring
any cost or expense relating to the Project, and (iii) Owner shall have no
obligation to reimburse Agent for any Unreimbursable Costs.

SECTION 6.   CONDITIONS PRECEDENT TO THE FINAL
ADVANCE WITH RESPECT TO THE PROJECT

Owner's obligation to make the Final Advance shall be subject to the
satisfaction of the conditions set forth in this Section 6 and to the receipt by
Owner and Assignee of the documents set forth in this Section 6. When all of the
conditions set forth in this Section 6 shall have been satisfied, Substantial
Completion shall be deemed to occur. Owner shall have at least ten (10) Business
Days to review the Certificate of Substantial Completion and its attachments
prior to making the Final Advance.

The following are the documents to be received by Owner and Assignee and the
conditions to be satisfied:

(a)   Certificate of Substantial Completion. A Certificate of Substantial
Completion duly executed by Agent.

(b)   Final Advance. The Final Advance is sufficient to provide for the payment
of all costs of constructing the Project (other than (1) the cost of completing
any open Punch List (as defined in the EPC Contract) items), (2) Unreimbursed
Project Costs not designated by Agent for payment by the Final Advance and (3)
those estimated costs in connection with the designing, constructing, equipping
and installing of the Project that are not yet due and which will be included as
part of a Completion Advance in an amount not to exceed the amount of such
estimate, provided that (i) the Available Commitment remaining after the Final
Advance is equal to or exceeds the aggregate amount of all such estimated costs
and (ii) Agent certifies, based upon its reasonable expectations, that (x) all
costs in connection with the designing, constructing, equipping and installing
of the Project that are not yet due will not exceed such estimated costs or
(y) to the extent that such costs will exceed such estimated costs, such excess
costs are Unreimbursed Project Costs).

(c)   Construction and Equipping of the Project. The Project (exclusive of Punch
List (as defined in the EPC Contract) items), (i) shall have been completed
(including all Performance Tests (as defined in the EPC Contract) required for
Substantial Completion under the EPC Contract) in all material respects in
accordance with the Plans, the terms of the Construction Documents and the
Project Contracts, and (ii) shall have been constructed in accordance with
generally accepted engineering and construction practices.

(d)   Permits. All Permits and Governmental Actions required for the occupancy,
use and operation of the Project in the manner contemplated in paragraph (c)
above and in accordance with and as contemplated by the Construction Documents,
the Project Contracts and the Lease have been issued or obtained and are in full
force and effect.

(e)   Liens. The Project has been completed in the manner contemplated in
paragraph (c) above free of all Liens, except for Permitted Liens (all of which
Permitted Liens are to be itemized as to the nature, amount, claimant and status
thereof and provided that such Permitted Liens shall not include any mechanics'
liens, other than those mechanics' liens that are (i) to be satisfied or
discharged out of the proceeds of the Final Advance or a Completion Advance or
(ii) subject to a Permitted Contest and fully bonded or otherwise fully
secured), and there are no claims outstanding with respect to any Construction
Document or Project Contract (other than any such claims that are itemized as to
the nature, amount, claimant and status and are fully bonded or otherwise fully
secured) and no current Permitted Contests (or, if any Permitted Contest exists,
the nature, amount, claimant and status thereof).

(f)   Final Survey. A final as-built ALTA/ACSM Class A survey (the "Final
Survey"), prepared by the Surveyor or another independent, licensed registered
public land surveyor (reasonably satisfactory to Owner and Assignee) and
certified to Owner and any Assignee, with a metes and bounds description of the
perimeter of the Premises, and showing the completed Project (excluding the
Released Improvements if already released), all servient and beneficial
easements pertaining to the Premises, and indicating the location of access to
the Premises. No encroachments are to exist by the Project onto premises outside
the boundary lines of the Premises or by existing improvements located on
adjacent premises onto the Premises other than those that are Permitted Liens or
that may have been consented to by Owner and Assignee and all set-back
requirements have been complied with. If any discrepancies exist between the
legal description set forth on the Survey delivered pursuant to paragraph (j) of
Section 4 hereof and the legal description set forth on the Final Survey
delivered pursuant to this paragraph (f), Owner and Agent shall cooperate in
amending the legal descriptions in all recorded documents creating or affecting
the Premises, including, without limitation, any easements, to reflect the
correct as-built description.

(g)   Utilities. Connection has been made to all appropriate utility facilities
(including Interconnection Facilities) and the Project is capable of operation
in the manner contemplated in paragraph (c) of this Section 6 and in accordance
with and as contemplated by the Construction Documents, the Project Contracts
and the Lease.

(h)   Use of Proceeds and Continuing Representations of Agent. (i) All costs and
expenses which are the subject of the Final Advance requested have been paid in
full or will be paid in full out of the proceeds of the Final Advance; (ii) all
premiums and costs owing under any insurance policy pursuant to subsection 9.3
hereof have been paid in full by the General Contractor or otherwise or will be
paid in full out of the proceeds of the Final Advance, and all such insurance
policies are in full force and effect; (iii) all representations and warranties
in this Agreement (except for the representations and warranties made in
subsections 8.9 and 8.26 hereof which shall not be made by Agent), in the Lease
and in the various agreements, instruments and documents delivered to Owner by
or on behalf of Agent in connection with the Final Advance, are and remain true
and correct in all material respects on and as of the date of the Final Advance
as if made on and as of the date of the Final Advance (except to the extent such
representations and warranties are made expressly as to a specific earlier date,
in which case such representations and warranties were true and correct as of
such earlier date); and (iv) no Event of Loss, Event of Default, Potential
Default, Event of Project Termination, Potential Event of Project Termination or
Termination Event under this Agreement has occurred and is continuing on the
date such Final Advance is to be made or will exist by reason of giving effect
to such Final Advance.

(i)   Request for Final Advance. A duly executed request for advance, stating
the total amount of the Final Advance requested, the date on which such advance
is to be made, wiring instructions and a breakdown of items and costs for which
the Final Advance is to be made.

(j)   Satisfactory Title. A notice of title continuation or an endorsement
issued by the Title Company in respect of Owner's title policy and Assignee's
title policy, indicating that since the most recent notice of title continuation
or endorsement issued by the Title Company in respect of an Interim Advance for
the Premises, there have been no changes in the state of title, except for
Permitted Liens, and no additional survey exceptions not theretofore
specifically approved in writing by Owner and Assignee and increasing the
pending disbursements/improvements coverage to account for other advances. Title
to the Project shall have been or will be transferred to Owner pursuant to the
EPC Contract and shall have been or will be vested solely in Owner upon final
payment to the General Contractor under the EPC Contract. In addition, if Agent
elects not to request a Completion Advance, Agent shall satisfy the requirements
of paragraph (e) of Section 7 hereof.

(k)   Representations and Warranties of Guarantor. All representations and
warranties of the Guarantor in the Guaranty (except for the representations and
warranties made in Sections 4.5, 4.6, 4.8 and 4.9 thereof which shall not be
made by the Guarantor) are and remain true and correct in all material respects
on and as of the date of the Final Advance as if made on and as of the date of
the Final Advance (except to the extent such representations and warranties are
made expressly as to a specific earlier date, in which case such representations
and warranties were true and correct as of such earlier date), and no default
under the Guaranty has occurred and is continuing on the date such Final Advance
is to be made or will exist by reason of giving effect to such Final Advance.

(l)   Commercial Operation. (i) Commercial Operation of the Project shall have
been achieved, including, without limitation, satisfaction of (A) the Minimum
Performance Guarantees, (B) the Emission Guarantees and (C) the Noise Compliance
Guarantee (as each such term is defined in the EPC Contract), in each case
according to the procedures set forth in the EPC Contract; (ii) no defective or
uncompleted work shall exist that could reasonably be expected to materially and
adversely affect the generation of electricity from the Project; (iii) the
Project as constructed shall comply in all material respects with all
Governmental Actions; and (iv) the Project shall be capable of operating in a
manner consistent with prudent industry practices, all applicable Permits and
all Legal Requirements and in accordance with the terms of this Agreement, the
Lease and the Project Contracts. In addition, if Agent elects not to request a
Completion Advance, Agent shall satisfy the requirements of paragraph (g) of
Section 7 hereof.

(m)   Environmental Compliance. All compliance tests, emissions tests and
certifications and other actions required by any Environmental Requirements as a
precondition to Commercial Operation of the Project (including, without
limitation, the performance criteria, emissions standards and reliability
criteria required by the EPC Contract) shall have been successfully completed
and all filings, notices and other submissions required under such Environmental
Requirements shall have been fully and accurately completed and submitted to
applicable Governmental Authorities as required by applicable Legal
Requirements.

(n)   Intellectual Property Rights. All Intellectual Property Rights necessary
for the use and operation of the Project in accordance with and as contemplated
by the Projects Contracts, this Agreement and the Lease have been obtained and
are in full force and effect.

(o)   Easements. The Easements have been obtained and are in full force and
effect and are not subject to any Liens, other than Permitted Liens, and
constitute all easements and rights-of-way (i) contemplated to be in place under
the Construction Documents, the Project Contracts, this Agreement and the Lease
as of the date of the Final Advance and (ii) which are necessary for Agent's
performance of its obligations under this Agreement, the Lease, the Construction
Documents and the Project Contracts.

(p)   Construction Progress. Owner and Assignee shall have received, if
requested by Owner, (i) all Monthly Progress Reports (as defined in the EPC
Contract) delivered under the EPC Contract, (ii) true copies of unpaid invoices,
receipted bills and Lien waivers (to the extent such Lien waivers are required
under the EPC Contract or any other Project Contract), and such other reasonably
available supporting information as Owner or Assignee may reasonably request and
(iii) a certificate from Agent certifying to Owner and Assignee the amount of
Unreimbursed Project Costs outstanding on the date of the Final Advance.

(q)   No Other Security Interests. All materials and fixtures incorporated in
the construction of the Project have been purchased so that title thereto may
automatically be transferred to Owner pursuant to the EPC Contract, and there
shall be no Liens on such materials and fixtures other than Permitted Liens.

(r)   Evidence of EWG Status. Agent shall furnish Owner and Assignee with
evidence of the filing of an application for determination that Owner is an EWG
under Section 32 of the 1935 Act, together with a determination issued by FERC
of such EWG status, each in form and substance satisfactory to Owner and
Assignee in their reasonable judgment.

SECTION 7.   CONDITIONS PRECEDENT TO COMPLETION
ADVANCES WITH RESPECT TO THE PROJECT

Owner's obligation to make Completion Advances shall be subject to the
satisfaction of the conditions set forth in this Section 7 and to the receipt by
Owner and Assignee of the documents set forth in this Section 7. Owner shall
have at least five (5) Business Days to review the Certificate of Increased Cost
and its attachments prior to making a Completion Advance.

The following are the documents to be received by Owner and Assignee and the
conditions to be satisfied:

(a)   Certificate of Increased Cost. A Certificate of Increased Cost duly
executed by Agent.

(b)   Completion Advance. The Completion Advance is sufficient to provide for
the payment of (i) all costs of completing any open Punch List (as defined in
the EPC Contract) items, and (ii) all costs in connection with the designing,
constructing, equipping and installing of the Project that were not included as
part of the Final Advance; provided that all such costs fall within the limits
of the Budget.

(c)   Use of Proceeds and Continuing Representations of Agent. (i) All costs and
expenses which are the subject of the Completion Advance requested have been
paid in full or will be paid in full out of the proceeds of the Completion
Advance; (ii) all premiums and costs owing under any insurance policy pursuant
to subsection 9.3 hereof have been paid in full by the General Contractor or
otherwise or will be paid in full out of the proceeds of the Completion Advance,
and all such insurance policies are in full force and effect; (iii) all
representations and warranties in this Agreement (except for the representations
and warranties made in subsections 8.9 and 8.26 hereof which shall not be made
by Agent), in the Lease and in the various agreements, instruments and documents
delivered to Owner by or on behalf of Agent in connection with the Completion
Advance, are and remain true and correct in all material respects on and as of
the date of the Completion Advance as if made on and as of the date of the
Completion Advance (except to the extent such representations and warranties are
made expressly as to a specific earlier date, in which case such representations
and warranties were true and correct as of such earlier date); and (iv) no Event
of Loss, Event of Default, Potential Default, Event of Project Termination,
Potential Event of Project Termination or Termination Event under this Agreement
has occurred and is continuing on the date the Completion Advance is to be made
or will exist by reason of giving effect to the Completion Advance.

(d)   Request for Completion Advance. A duly executed request for advance,
stating the total amount of the Completion Advance requested, the date on which
such advance is to be made, wiring instructions and a breakdown of items and
costs for which the Completion Advance is to be made.

(e)   Satisfactory Title. A notice of title continuation or endorsement issued
by the Title Company in respect of Owner's title policy and Assignee's title
policy, indicating that since the notice of title continuation or endorsement
issued by the Title Company in respect of the Final Advance, there have been no
changes in the state of title, except for Permitted Liens and, with respect to
the last Completion Advance only, a "Completion of Improvements" endorsement
which removes the pending disbursements or pending improvements provision of the
policy, as the case may be, and redates the survey coverage provided in the
policy based on the Final Survey.

(f)   Representations and Warranties of Guarantor. All representations and
warranties of the Guarantor in the Guaranty (except for the representations and
warranties made in Sections 4.5, 4.6, 4.8 and 4.9 thereof which shall not be
made by the Guarantor) are and remain true and correct in all material respects
on and as of the date of the Completion Advance as if made on and as of the date
of the Completion Advance (except to the extent such representations and
warranties are made expressly as to a specific earlier date, in which case such
representations and warranties were true and correct as of such earlier date),
and no default under the Guaranty has occurred and is continuing on the date
such Completion Advance is to be made or will exist by reason of giving effect
to such Completion Advance.

(g)   Final Completion. At the time Agent requests its last Completion Advance,
(i) Final Completion (as defined in the EPC Contract) shall have occurred as
evidenced by the execution and delivery of a Notice of Final Completion (as
defined in the EPC Contract) and a certificate stating that the requirements to
achieve Final Completion have been met, in each case according to the procedures
set forth in the EPC Contract; (ii) the Project shall have satisfied the Output
Guarantee (as defined in the EPC Contract) according to the procedures set forth
in the EPC Contract; and (iii) the Project shall have satisfied the Heat Rate
Guarantee (as defined in the EPC Contract) according to the procedures set forth
in the EPC Contract.

(h)   Construction Progress. If requested by Owner, Owner and Assignee shall
have received (i) all Monthly Progress Reports (as defined in the EPC Contract)
delivered under the EPC Contract and (ii) true copies of unpaid invoices,
receipted bills and Lien waivers (to the extent such Lien waivers are required
under the EPC Contract or any other Project Contract), and such other reasonably
available supporting information as Owner or Assignee may reasonably request.

(i)   No Other Security Interests. All materials and fixtures incorporated in
the construction of the Project have been purchased so that title thereto shall
have vested solely in Owner, and there shall be no Liens on such materials and
fixtures other than Permitted Liens. Title to the Project shall have vested
solely in Owner in accordance with the terms of paragraph (j) of Section 6
hereof.

SECTION 8.   REPRESENTATIONS AND WARRANTIES OF AGENT

Agent represents and warrants to Owner as of the date hereof and on the date of
each advance (other than with respect to the representation and warranty made in
subsection 8.9 and subsection 8.26 hereof which shall apply only as of the date
hereof and on the date of the Initial Advance), that:

8.1.   Corporate Matters. Agent (a) has been duly formed and is validly existing
as a limited liability company in good standing under the laws of the State of
Delaware, (b) has full power, authority and legal right to own and operate its
properties and to conduct its business as presently conducted and to execute,
deliver and perform its obligations under the Lease, this Agreement, any
Consent, the Project Contracts, the Pledge Agreement, the Lessee Note and the
Construction Documents, and (c) is duly qualified to do business as a foreign
limited liability company in good standing in the Commonwealth of Pennsylvania
and in each other jurisdiction in which its ownership or leasing of properties
or the conduct of its business requires such qualification, except where the
failure to so qualify would not impair the ability of Agent to conduct its
business and to observe and perform its obligations under the Operative
Documents, any of the Construction Documents or the Project Contracts or any
Consent in a timely manner.

8.2.   Compliance with Other Instruments. The execution, delivery and
performance by Agent of this Agreement, any Consent, the Project Contracts, the
Pledge Agreement, the Lessee Note and the Construction Documents will not result
in any violation of any provision of the certificate of formation or the
operating agreement of Agent, do not require member approval or the approval or
consent of any trustee or holders of indebtedness of Agent except such as have
been obtained prior to the date hereof and will not conflict with or result in a
breach of any terms or provisions of, or constitute a default under, or result
in the creation or imposition of any Lien (other than a Permitted Lien) upon any
property or assets of Agent under, any indenture, mortgage or other agreement or
instrument to which Agent is a party or by which it or any of its property is
bound, or any existing applicable law, rule, regulation, license, judgment,
order or decree of any Governmental Authority or court having jurisdiction over
Agent or any of its activities or properties.

8.3.   Binding Agreement. This Agreement and the Lease have been duly
authorized, executed and delivered by Agent and, assuming the due authorization,
execution and delivery of this Agreement and the Lease by Owner, each of this
Agreement and the Lease is a legal, valid and binding obligation of Agent,
enforceable against Agent according to its terms.

8.4.   Litigation. Except as set forth on Schedule 8.4 hereto, there is no
action, suit, claim, or counterclaim, proceeding or investigation, at law or in
equity, by or before any court, governmental body, agency, commission or other
tribunal now pending or threatened against or affecting the Project, Agent, or
any property or rights of Agent or questioning the enforceability of this
Agreement, the Project Contracts or the Construction Documents, which could
reasonably be expected to have a material adverse effect on (a) the
construction, operation, maintenance, leasing, ownership, use, value or
regulatory status of the Project, (b) the ability of Agent to observe and
perform its obligations under the Operative Documents, or any of the
Construction Documents or the Project Contracts in a timely manner or the
ability of the Guarantor to perform its obligations under the Guaranty in a
timely manner, or (c) the rights or interests of Owner or Assignee under the
Operative Documents, the Guaranty, or any of the Construction Documents or the
Project Contracts.

8.5.   Governmental Consents. There are no consents, licenses, orders,
authorizations, approvals, Environmental Approvals, Permits, waivers, extensions
or variances of, or notices to or registrations or filings with any Governmental
Authority or public body (each a "Governmental Action"), (a) which are or will
be required in connection with the valid execution, delivery and performance of
this Agreement, the Project Contracts or the Construction Documents, (b) which
are or will be required in connection with any participation by Owner or
Assignee in the transactions contemplated by the Project Contracts, the
Construction Documents or the Operative Documents, (c) which are or will be
required in connection with the acquisition or ownership by Owner of the Project
and all equipment for use with respect thereto, (d) which are or will be
required for the lease of the Project or the construction and operation of the
Project in accordance with and as contemplated by the Project Contracts, the
Construction Documents, this Agreement, and the Lease, or (e) which are or will
be required to be obtained by Agent, Owner, Merrill, Merrill Leasing, Assignee
or an Affiliate of the foregoing, during the term of this Agreement, the Lease
or the Project Contracts, with respect to the Project or the Project Contracts,
except such Governmental Actions (i) each of which (1) has been duly obtained,
given or accomplished and is in full force and effect, with a true copy thereof
delivered to Owner, or (2) is to be obtained but is not now required (but which
will be obtained in the ordinary course of business on or before the time
required), including, without limitation, orders granting Agent and Owner the
status of an EWG, (ii) as may be required by applicable law not now in effect,
(iii) as may be required as a result of the business, properties or activities
of Owner, Merrill, Merrill Lynch, Merrill Leasing, any Assignee or any Affiliate
of the foregoing and which are not solely dependent on the nature of the Project
or the business of Agent, or (iv) as may be required by Owner, Assignee or any
Affiliate of either, if energy generated at the Project is sold by any such
Person upon the termination of this Agreement or after an Event of Default or an
Event of Project Termination hereunder or in connection with the exercise of any
remedy under which Owner or Assignee or any of their respective Affiliates would
operate, possess or control the Project.

8.6.   Compliance with Legal Requirements and Insurance Requirements. The
construction, operation, use, and physical condition of the Project (a) are in
full compliance with all Insurance Requirements and all premiums due with
respect to such Insurance Requirements have been paid, and (b) are in compliance
with all Legal Requirements, except any Legal Requirements, the noncompliance
with which, individually or in the aggregate, (A) will not place either Owner or
any Assignee in any danger of civil liability which Owner or such Assignee is
not adequately indemnified for by Agent or subject Owner or any Assignee to any
danger of criminal liability as a result of failure to comply therewith,
provided that, in the case of any such danger of criminal liability, any grace
period in which to cure such non-compliance shall not be applicable and (B)
could not reasonably be expected to have a material adverse effect on (i) the
construction, operation, maintenance, leasing, ownership, use, value or
regulatory status of the Project, (ii) the ability of Agent to observe and
perform its obligations under the Operative Documents, or any of the
Construction Documents or the Project Contracts in a timely manner or the
ability of the Guarantor to perform its obligations under the Guaranty in a
timely manner, or (iii) the rights or interests of Owner or Assignee under the
Operative Documents, the Guaranty, or any of the Construction Documents or the
Project Contracts.

8.7.   No Default. Neither Agent nor the Guarantor is in violation of or in
default under or with respect to any Legal Requirement in any respect which
could reasonably be expected to have a material adverse effect on (a) the
construction, operation, maintenance, leasing, ownership, use, value or
regulatory status of the Project, (b) the ability of Agent to observe and
perform its obligations under the Operative Documents, or any of the
Construction Documents or the Project Contracts in a timely manner or the
ability of the Guarantor to perform its obligations under the Guaranty in a
timely manner or (c) the rights or interests of Owner or Assignee under the
Operative Documents, the Guaranty, or any of the Construction Documents or the
Project Contracts.

8.8.   Liens. The Project is not subject to any Lien, except for Permitted
Liens, and none of such Permitted Liens could reasonably be expected to
materially interfere with the construction, use or possession of the Project or
the use or exercise by Owner of its rights under this Agreement or any other
document contemplated hereby or entered into in connection herewith.

8.9.   Changes. Since the date of the Private Placement Memorandum, there has
been no change in the business, assets, properties, revenues, financial
condition or operations of the Project or Agent which could reasonably be
expected to have a material adverse effect on (a) the construction, operation,
maintenance, leasing, ownership, use, value or regulatory status of the Project,
(b) the ability of Agent to observe and perform its obligations under the
Operative Documents, or any of the Construction Documents or the Project
Contracts in a timely manner or the ability of the Guarantor to perform its
obligations under the Guaranty in a timely manner or (c) the rights or interests
of Owner or Assignee under the Operative Documents, the Guaranty, or any of the
Construction Documents or the Project Contracts.

8.10.   Availability of Utilities. All utility services and facilities necessary
for the construction of the Project (including, without limitation, gas,
electrical, water and sewage services and facilities) are available at the
boundaries of the Premises or will be obtained in sufficient time to permit
Agent to achieve Commercial Operation of the Project prior to the Completion
Date, and all utility services and Interconnection Facilities necessary for the
operation of the Project for its intended purpose will be available on
commercially reasonable terms at or within the boundaries of the Premises prior
to Commercial Operation.

8.11.   ERISA. Agent has not established and does not maintain or contribute to
any employee benefit plan that is covered by Title IV of ERISA, except that
Agent's employees may participate in the PPL Retirement Plan.

8.12.   Public Utility Holding Company Act. Agent is not and shall not become a
"public-utility company" or a "holding company" within the meaning of the 1935
Act, is not and shall not become an Affiliate of a holding company registered
under the 1935 Act (except that Agent may become an Affiliate of a holding
company registered under the 1935 Act so long as the rights of Agent under the
Project Contracts and the rights of Owner or Assignee under this Agreement or
any other document contemplated hereby are not adversely affected), and is not
and shall not become regulated as a public utility company or a holding company
under any other Federal, state or local Legal Requirement (except that Agent may
become regulated as a public utility company so long as the rights of Agent
under the Project Contracts and the rights of Owner and Assignee under this
Agreement and under any other documents contemplated hereby are not adversely
affected).

8.13.   Regulation. Neither Owner nor any Assignee nor any of their respective
Affiliates shall, solely by reason of (a) its entering into this Agreement or
any other document contemplated hereby, (b) the acquisition, ownership, leasing
or financing of the Project (or any part thereof) or (c) the operation of the
Project (or any part thereof) during the term of this Agreement or Lease in
accordance with and as contemplated by the Project Contracts and the Lease, be
subject to financial, rate or other similar regulation as, a public utility, or
an electric utility or a public utility holding company under a Legal
Requirement (including any Legal Requirement (i) under the 1935 Act, (ii)
imposed by any state or local public utility commission or other similar
regulatory body, authority or group having jurisdiction over Owner or Agent or
any such transactions or activities or (iii) under the Federal Power Act, as
amended), except in connection with the exercise of any remedy under which Owner
or Assignee or any of their respective Affiliates would operate, possess or
control the Project (or any part thereof).

8.14.   Nature of Agent's Business. Agent (a) has not engaged in any business
other than as contemplated by paragraph (ii)(j) of Section 2 of the Lease, (b)
is not a party to any contract, operating lease, agreement or commitment other
than as contemplated by subsection 10.5 hereof, and the Agency Agreement, the
Construction Documents and the Project Contracts and (c) has not created,
assumed or incurred any Indebtedness other than pursuant to this Agreement, the
Lease, the Lessee Note, the Agency Agreement, the Construction Documents and the
Project Contracts.

8.15.   Lease. The Lease has been duly authorized, executed and delivered by
Agent and is a legal, valid and binding obligation of Agent, enforceable
according to its terms.

8.16.   Construction Documents and Project Contracts. Each of the Construction
Documents and the Project Contracts has been or will be duly authorized,
executed and delivered by Agent and, assuming the due authorization, execution
and delivery of the Construction Documents and the Project Contracts by the
parties thereto other than Agent, each of the Construction Documents and the
Project Contracts when executed and delivered is or will be, a legal, valid and
binding obligation of Agent, enforceable according to its terms. Agent has not
received notice from, nor is there any reasonable and good faith basis known to
Agent for the receipt of a notice from, any party to a Construction Document or
a Project Contract that (a) such party is terminating any Construction Document
or Project Contract, (b) a default has occurred under any Construction Document
or Project Contract or any Person has alleged that a default has occurred under
any Construction Document or Project Contract or (c) there are any claims for
damages existing as a result of Agent's performance of or its failure to perform
any of its obligations under any Construction Document or Project Contract. No
default on the part of Agent, or to Agent's knowledge, on the part of any other
party thereto, has occurred and is continuing under any Construction Document or
Project Contract on the date hereof.

8.17.   Status of Agent. Not less than fifty percent (50%) of the voting
membership interests of Agent is owned (directly or indirectly) beneficially and
of record by the Guarantor.

8.18.   Project Authorizations. Agent (or its contractors or subcontractors) has
obtained, or shall in the ordinary course of business obtain prior to the time
required, all certificates, Permits, licenses, authorizations and approvals
required (a) in the construction and operation of the Project in accordance with
and as contemplated by the Construction Documents, the Project Contracts, this
Agreement and the Lease, and (b) for acquisition of equipment related to the
Project for use with respect thereto. A list of all such certificates, Permits,
licenses, authorizations and approvals required by all applicable law in effect
on the date hereof is attached as Exhibit F hereto, which Exhibit F shall be
updated on the date of each advance.

8.19.   Compliance with Construction Documents and Project Contracts. The
physical condition of the Project as it is presently constructed and as it will
be constructed pursuant to the requirements of the EPC Contract complies with
all material requirements of each Construction Document and each Project
Contract then in effect and will, at the time required, enable Agent to perform
all obligations under the Construction Documents, the Project Contracts and the
Lease in accordance with their respective terms.

8.20.   Pledge Agreement. The Pledge Agreement has been duly authorized,
executed and delivered by Agent and, assuming the due authorization, execution
and delivery of the Pledge Agreement by Owner, is a legal, valid and binding
obligation of Agent, enforceable according to its terms. The Pledge Agreement
creates a valid first priority security interest in the Collateral (as defined
in the Pledge Agreement) now in existence, securing the payment of the Secured
Obligations (as defined in the Pledge Agreement). All action necessary to
perfect the security interest in the Collateral has been taken and such security
interest has priority over any other Lien on the Collateral, except for
Permitted Liens.

8.21.   Intellectual Property. All Intellectual Property Rights required for the
construction and operation of the Project in accordance with and as contemplated
by the Construction Documents, the Project Contracts, this Agreement and the
Lease, have been or will in the ordinary course of business be timely obtained
and, once obtained, will, to the extent required, remain in full force and
effect. Agent owns or has, or will in the ordinary course of business timely
obtain the right to use all technology, licenses, patents and other proprietary
rights that are material and are required to construct the Project and to
perform Agent's obligations under the Construction Documents and the Project
Contracts without any conflict with the rights of others.

8.22.   Taxes. Agent has filed or caused to be filed all tax returns which are
required to be filed by it and all such tax returns were true, correct and
complete as of the date filed. Agent has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
assets and properties and has paid all other taxes, fees or other charges
imposed on it by any Governmental Authority (except taxes, fees and charges
subject to a Permitted Contest).

8.23.   Budgets. The Budget furnished to Owner and Assignee by or on behalf of
Agent and the summaries of significant assumptions related thereto, if any (a)
have been prepared with due care in accordance with prudent business practices,
(b) fairly present Agent's expectations as to the matters covered thereby as of
their date, (c) are based on assumptions that are reasonable as to all factual
and legal matters material to the estimates therein (including Project Costs)
and (d) are in all material respects consistent with the provisions of this
Agreement, the Lease, the Construction Documents and the Project Contracts. To
the best of Agent's knowledge, the Budget includes all costs and expenses that
could reasonably be expected to be incurred in connection with the construction
of the Project.

8.24.   Operation of the Project. The Project will, on and after the achievement
of Substantial Completion, be able (a) to be operated in compliance with all
existing material Governmental Actions, the Project Contracts and the Lease for
a period of at least 20 years thereafter, and (b) to be mechanically operated in
compliance with all existing material Governmental Actions for a period of at
least 25 years thereafter.

8.25.   Lessee Note. The Lessee Note has been duly authorized, executed and
delivered by Agent and is a legal, valid and binding obligation of Agent,
enforceable according to its terms.

8.26.   Disclosure. Except as set forth on Schedule 8.26 hereto, there is no
fact of which Agent is aware which could reasonably be expected to have a
material adverse effect on (a) the construction, operation, maintenance,
leasing, ownership, use, value or regulatory status of the Project, (b) the
ability of Agent to observe and perform its obligations under the Operative
Documents, or any of the Construction Documents or the Project Contracts in a
timely manner or the ability of the Guarantor to perform its obligations under
the Guaranty in a timely manner, or (c) the rights or interests of Owner or
Assignee under the Operative Documents, the Guaranty, or any of the Construction
Documents or the Project Contracts, and which has not been set forth in this
Agreement, the Lease or in the other documents, certificates and written
statements furnished by Agent to Owner and Assignee prior to the date of
execution of this Agreement in connection with the transactions contemplated
hereby. The Private Placement Memorandum and all documents and information
incorporated by reference therein, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not misleading, in light of the
circumstances under which they were made; provided, however, that no
representation is given or made with regard to (i) any forecasts or projections
included therein or omitted therefrom, (ii) any information, assumptions or
conclusions contained in any expert reports or the summaries thereof, (iii) the
descriptions of the tax consequences to the holders of the Notes, (iv) any
information regarding Merrill Lynch and its Affiliates, (v) any changes to the
documents referred to therein and attached thereto or (vi) any information
concerning the Guarantor.

8.27.   Environmental.

Except as expressly identified in the Environmental Report or as set forth on
Schedule 8.27 hereto:

(a)   Agent and the Project comply and have at all times complied in all
material respects with all Environmental Requirements applicable to the Project.
Subject to Agent's right to pursue a Permitted Contest pursuant to Section 16
hereof, Agent and the Project shall at all times during the term of this
Agreement comply in all material respects with all Environmental Requirements
applicable to the Project, including, without limitation, the use, maintenance
and operation of the Project, and all activities and conduct of business related
thereto, including, without limitation, the treatment, remediation, removal,
transport, storage or disposal of any Contaminant, and no material capital
expenditures not included in the Budget are anticipated to maintain or achieve
compliance with Environmental Requirements;

(b)   Agent has obtained or has taken appropriate and timely steps, as required
by Environmental Requirements, to obtain, and shall obtain and maintain all
Environmental Approvals necessary for the construction and operation of the
Project in compliance with all Environmental Requirements, or, in the case of
Environmental Approvals necessary for operation, shall take such steps as are
necessary to secure such Environmental Approvals prior to the time required
under all Environmental Requirements, all such Environmental Approvals already
obtained are in good standing, and Agent and the Project are currently in
material compliance and shall remain in material compliance with all terms and
conditions of such Environmental Approvals. No material change in the facts or
circumstances reported or assumed in the applications for or the granting of
such Environmental Approvals exists. There are no proceedings pending, or
threatened, which would jeopardize the validity of or the ability of the Agent
to obtain and comply with any such Environmental Approvals in a timely manner;

(c)   Agent has not received any notice that any of the third parties with which
Agent has arranged, engaged or contracted to accept, treat, transport, store,
dispose or remove any Contaminant generated or present at the Project, or which
otherwise participate or have participated in activities or conduct related to
the Project, were not properly permitted at the relevant time to perform the
foregoing activities or conduct;

(d)   Agent has not received any notice that it or the Project is subject to any
investigation, and neither Agent nor the Project is subject to any judicial or
administrative proceeding, notice, order, judgment, decree or settlement,
alleging or addressing in connection with the Project (i) any violation of any
Environmental Requirements, (ii) any Remedial Action, or (iii) any Environmental
Damages, claims or liabilities and costs arising from the Release or threatened
Release of any Contaminant;

(e)   No Environmental Lien has attached to any portion of the Project, and
Agent shall not cause or suffer any action or occurrence that will allow an
Environmental Lien to attach to any portion of the Project;

(f)   Agent has not received, and does not have actual knowledge, after due
inquiry, of any notice, claim or written communication from a Governmental
Authority concerning (i) any alleged violation of any Environmental Requirements
at the Project, whether or not corrected to the satisfaction of the appropriate
authority, (ii) any alleged liability of Agent for Environmental Damages arising
out of or related to the Project, or (iii) any alleged liability of Agent
arising out of or related to the Project for the Release or threatened Release
of a Contaminant at any location, and there exists no writ, injunction, decree,
order or judgment outstanding, nor, to the actual knowledge of Agent, after due
inquiry, any lawsuit, claim, proceeding, citation, directive, summons or
investigation, pending or threatened, relating to the condition, ownership, use,
maintenance or operation of the Project, or the suspected presence of
Contaminants thereon or therefrom, nor to Agent's actual knowledge, after due
inquiry, does there exist any basis for such lawsuit, claim, proceeding,
citation, directive, summons or investigation being instituted or filed;

(g)   To the actual knowledge of Agent, after due inquiry, there has been no
Release of any Contaminants which would constitute a violation of any
Environmental Requirement with respect to the Project, result in Environmental
Damages, or require any Remedial Action under any applicable Environmental
Requirement, and Agent shall not cause or suffer any such Release during the
term of this Agreement;

(h)   The Project is not listed or to the actual knowledge of Agent, proposed
for listing on the National Priorities List ("NPL") pursuant to CERCLA or listed
on CERCLIS or any similar state list of sites, and Agent is not aware of any
conditions at the Project which, if known to a Governmental Authority, would
qualify the Project for inclusion on any such list;

(i)   Neither Agent, nor to the actual knowledge of Agent, after due inquiry,
any contractor engaged by Agent in connection with the Project has transported
or arranged for the transport of any Contaminant from the Project to any
facility or site for the purpose of treatment or disposal which (i) is included
on the NPL, or (ii) to the actual knowledge of Agent, is or was, at the time of
disposal, subject to a Remedial Action requirement (other than routine,
anticipated regulatory requirements, including, but not limited to, closure and
post-closure-related corrective action obligations applicable to closed solid
waste management units at such facility) issued under the Federal Resource
Conservation and Recovery Act or any state, local or foreign solid or hazardous
waste regulatory law, or (iii) at the time of the disposal had received a notice
of violation or was otherwise subject to a governmental enforcement action with
respect to alleged violations of any Environmental Requirements, and Agent shall
use reasonable efforts not to suffer or permit any such arrangement for
treatment or disposal during the term of this Agreement;

(j)   Neither Agent nor, to the actual knowledge of Agent, after due inquiry,
any contractor engaged by Agent in connection with the Project has engaged in or
permitted, nor shall Agent engage in or permit, any operations or activities
upon, or any use or occupancy of the Project or any portion thereof, for the
purpose of or in any way involving the illegal or improper release, discharge,
refining or dumping of any Contaminant or the illegal or improper handling,
storage, use or disposal of any Contaminant, nor has Agent or to the actual
knowledge of Agent, after due inquiry, any other Person caused any Contaminant
to be deposited, released, stored, disposed, leached or otherwise come to be
located on, under, in or about the Premises, nor to the actual knowledge of
Agent, after due inquiry, has any Contaminant migrated from the Premises onto or
underneath other properties which would require any Remedial Action under any
applicable Environmental Requirement or give rise to any Environmental Damages;

(k)   To the actual knowledge of Agent, after due inquiry, there is not
constructed, placed, deposited, stored, disposed nor located on the Project or
the Premises any asbestos in any form which has become or threatens to become
friable. Agent shall not cause or suffer the use of any asbestos-containing
material in connection with the construction of the Project during the term of
this Agreement;

(l)   To the actual knowledge of Agent, after due inquiry, there is not
constructed, placed, deposited, released, stored, disposed, leached nor located
on any of the Project any polychlorinated biphenyls ("PCBs") or transformers,
capacitors, ballasts, or other equipment which contain dielectric fluid
containing PCBs. Agent shall not cause or suffer the use of any article
containing PCBs at or on the Project during the term of this Agreement;

(m)   Agent has no liability, and has neither received nor is otherwise aware of
any notice, claim or other communication alleging liability on the part of
Agent, for the violation of any Environmental Requirements, for Environmental
Damages, or for the Release or threatened Release of any Contaminant in
connection with the Project; and

(n)   None of the matters identified in the Environmental Report, individually
or in the aggregate, could reasonably be expected to have a material adverse
effect on (i) the construction, operation, maintenance, leasing, ownership, use,
value or regulatory status of the Project, (ii) the ability of Agent to observe
and perform its obligations under the Operative Documents, or any of the
Construction Documents or the Project Contracts in a timely manner or the
ability of the Guarantor to perform its obligations under the Guaranty in a
timely manner or (iii) the rights or interests of Owner or Assignee under the
Operative Documents, the Guaranty, or any of the Construction Documents or the
Project Contracts.

SECTION 9.   AFFIRMATIVE COVENANTS

Agent hereby agrees that, so long as this Agreement remains in effect, Agent
shall keep and perform fully each and all of the following covenants:

9.1.   Performance under Other Agreements. Agent shall duly perform and observe,
in all material respects, all of the covenants, agreements and conditions on its
part to be performed and observed under the Project Contracts and the
Construction Documents.

9.2.   No Encroachments. The Project shall be constructed entirely on the
Premises or the various locations of the Easements and shall not encroach upon
or overhang any property lying outside of the boundaries of the Premises or the
Easements (unless such encroachment or overhang (i) is consented to by the
affected property owner, (ii) does not render the Project unmarketable, (iii)
does not cause a reduction in the fair market value of the Project, and (iv)
does not adversely affect the use of the Project or any easement or right-of-way
on the land of the affected property owner), and when erected shall be wholly
within any building restriction lines, however established and will not encroach
upon or overhang the property of any other Persons lying inside or outside the
boundaries of the Premises or the Easements unless all licenses, permits or
easements therefor have been obtained from the Persons whose property is
burdened thereby. Furthermore, the foundations of the Project will not encroach
upon, and the balance of the improvements comprising the Project shall be
constructed so as not to interfere with (or to encroach upon unless any
necessary consents are obtained from the benefited Persons), any utility lines,
wires, poles, cables, fixtures, water mains, gas mains, pipes, roadways,
concrete vaults, pedestrian walkways, pipe stations, guys, sewers or other
equipment lying inside the boundaries of the Premises or the Easements as shown
on the Survey, except to the extent expressly permitted by the burdened
easement, license or right-of-way. Upon the reasonable request of Owner, Agent
shall furnish from time to time satisfactory evidence of compliance with the
foregoing covenants. If any discrepancies exist between the legal description
set forth on the Survey and the Final Survey, Owner and Agent shall cooperate in
amending the legal descriptions in all recorded documents creating or affecting
the Premises, including, without limitation, the Ground Lease, to reflect the
correct as-built description.

9.3.   Insurance.

(a)   Insurance with respect to the Project. Agent shall procure for Owner or,
if such coverage is already in place, maintain (or cause to be procured and/or
maintained) in full force and effect at all times throughout the term of this
Agreement (and all costs relating thereto (including deductibles paid by Agent
thereon) shall be reimbursed by Owner by means of advances under this Agreement
and shall be capitalized by Owner as an element of the Acquisition Cost of the
Project, provided, that insurance deductibles paid by Agent may not be
capitalized by Owner as an element of the Acquisition Cost) insurance policies
with insurance companies authorized to do business in the Commonwealth of
Pennsylvania with a Best Insurance Reports rating of "A-" or better, or if not
rated by Best, shall be of substantially equivalent financial strength and
creditworthiness of insurance companies that maintain such ratings (or such
other company acceptable to Owner and Assignee), with such deductibles as set
forth below, or if not set forth below, as are approved by Owner and Assignee,
and with such limits and coverage provisions as Agent shall deem reasonable, but
in no event less than the limits and coverage provisions set forth below:

   (i)   Workers' Compensation and Employer's Liability Insurance. Workers'
compensation and employer's liability insurance in accordance with and as
required under the laws of the Commonwealth of Pennsylvania.

   (ii)   Commercial General Liability Insurance. Liability insurance on an
occurrence (or AEGIS or EIM claims-made form) basis against claims for personal
injury (including bodily injury and death) and property damage. Such insurance
shall provide coverage for products-completed operations, blanket contractual,
explosion, collapse and underground coverage, broad form property damage,
personal injury insurance, and sudden and accidental seepage and pollution with
a $1,000,000 minimum limit per occurrence for combined bodily injury and
property damage with a maximum deductible that is consistent with prudent
utility business practices, but in no event in excess of $500,000 per
occurrence.

   (iii)   Automobile Liability Insurance. Automobile liability insurance
against claims for personal injury (including bodily injury and death) and
property damage covering all owned, leased non-owned and hired motor vehicles,
including loading and unloading, with a $1,000,000 minimum limit per occurrence
for combined bodily injury and property damage and containing appropriate
no-fault insurance provisions wherever applicable.

   (iv)   Excess Liability Insurance. Excess liability insurance on an
occurrence (or AEGIS or EIM claims-made form) basis covering claims in excess of
the underlying insurance described in the foregoing clause (ii), with a
$75,000,000 minimum limit per occurrence with a deductible not in excess of
$500,000 per occurrence; provided, however, in the event the available limit of
liability is less than $35,000,000 due to claims against such excess liability
insurance, Agent shall purchase additional coverage so that the available limit
of liability under such excess liability insurance is not less than $75,000,000.

         The insurance required in the foregoing clause (i) with respect to
Employers Liability only, clauses (ii), (iii) and this clause (iv) may be
satisfied either by the amounts specified or by any combination of primary and
excess insurance, so long as the total amount of insurance meets the
requirements specified above.

   (v)   All Risk Builders' Insurance. All Risk Builders' Risk Completed Value
Non-Reporting Form Insurance including boiler and machinery, collapse coverage
(including, but not limited to, earthquake, landslide, subsidence and volcanic
eruption) and fire insurance with extended coverage, in an amount equal to not
less than one hundred percent (100%) of the completed insurable value of the
Project, and with a maximum deductible of $250,000 per occurrence, except that
(1) during the operational testing period of the Project, such insurance shall
be subject to a maximum deductible of $500,000 per occurrence and (2) during the
operational testing period of the gas turbine generators, heat recovery steam
generators and related equipment, such insurance shall be subject to a maximum
deductible of $1,000,000 per occurrence; provided, that if the existing
insurance policy is unilaterally cancelled by the insurance company providing
such coverage, the deductible limit shall be based on such lesser amount as is
commercially available in the insurance industry as supported by a letter from
the Insurance Broker.

   (vi)   Environmental Impairment Liability Insurance. Environmental impairment
liability insurance in an amount not less than $10,000,000 per occurrence. The
parties acknowledge and agree that so long as Agent maintains sudden and
accidental seepage and pollution coverage pursuant to clause (a)(ii), the
requirements of this clause (a)(vi) shall be deemed satisfied.

(b)   Agent shall also maintain or cause to be maintained in full force and
effect at all times insurance with respect to the Project as required by the
terms of the EPC Contract.

(c)   Agent shall comply with the insurance provisions described in Section 10
of the Lease following paragraph (b) thereof, except that the terms "Owner",
"Agent" and "this Agreement" shall substitute for the terms "the Lessor", "the
Lessee" and for "this Lease", respectively, and the provisions of paragraphs
(c)(v), (h), (i) and (n) of Section 10 of the Lease shall not be applicable
prior to the Effective Date.

(d)   Agent covenants that it will not use, carry on construction with respect
to, or occupy the Project or permit the use, construction, or occupancy of the
Project at a time when the insurance required by paragraphs (a) and (b) of this
subsection 9.3 is not in force with respect to the Project.

(e)   It is agreed that any insurance payments received as the result of the
occurrence of (i) any Event of Loss, (ii) any partial damage or destruction of
the Project, or (iii) any partial condemnation or taking of the Project by any
Person or Governmental Authority having the power of eminent domain, shall be
paid into and will be held in the Operating Account and applied in payment (or
to reimburse Agent) for repairs or replacement in accordance with the terms of
this Agreement. Agent shall be entitled, subject to the immediately preceding
sentence, (1) to receive the amounts so deposited against certificates, invoices
or bills reasonably satisfactory to Owner, delivered to Owner from time to time
as such work or repair progresses, and (2) to direct the investment of the
amounts so deposited as provided in paragraph (j) of Section 10 of the Lease.

9.4.   Inspection of Books and Records. Upon reasonable notice to Agent and the
General Contractor and during reasonable business hours, Owner and Assignee or
designated representatives of either of them shall have the right of entry and
free access to the Project and the right to inspect all work done, labor
performed and materials furnished in and about the Project, subject to Agent's
and the General Contractor's reasonable safety policies and insurance
requirements, and at reasonable times and on reasonable notice to Agent, the
right to inspect all books, contracts and records of Agent relating to the
Project. Notwithstanding the foregoing, neither Owner nor Assignee shall have
any duty to make any such inspection.

9.5.   Expenses. Unless capitalized or required to be capitalized by Owner
pursuant to clause (i) of the penultimate sentence of this subsection 9.5, Agent
shall pay upon demand all obligations, costs and expenses incurred by Owner with
respect to any and all transactions contemplated herein and the preparation of
any document reasonably required hereunder and the prosecution or defense of any
action or proceeding or other litigation affecting Agent or the Project,
including (without limiting the generality of the foregoing) all Financing Costs
not capitalized by Owner and amounts required to pay or reimburse Owner for its
obligations, costs and expenses arising in connection with the termination of
any Financing Arrangement (whether as a result of a default thereunder or
otherwise), all interest (including, without limitation, interest at a default
rate) and other costs, fees and expenses incurred by Owner under any Financing
Arrangement (including any such accruing after the commencement of a bankruptcy
or similar proceeding), costs incurred in connection with obtaining, maintaining
and terminating Owner's equity financing and refinancing (including, without
limitation, any amounts owing by Owner to its Partners as a result of a sale of
limited partner interests by any limited partner of Owner or a modification of
the terms of such equity financing), title and conveyancing charges, recording
and filing fees and taxes, title search fees, rent under the Ground Lease,
mortgage taxes, intangible personal property taxes, escrow fees, revenue and tax
stamp expenses, insurance premiums, brokerage commissions, finders' fees,
placement fees, court costs, surveyors', photographers', appraisers',
architects', engineers', industry consultants', insurance advisors', rating
agencies', accountants' and reasonable attorneys' fees and disbursements, and
will reimburse to Owner all expenses paid by Owner of the nature described in
this subsection 9.5 which have been incurred by Owner with respect to any and
all of the transactions contemplated herein. In the event Agent shall fail to
pay or reimburse Owner within fifteen (15) Business Days after presentation of a
bill and demand for payment therefor, Owner may pay such expenses and any
proceeds so applied shall be deemed advances under this Agreement, and deducted
from the total funds available to Agent under this Agreement. Notwithstanding
anything to the contrary contained in this subsection 9.5, (i) Agent shall not
be required to pay or reimburse Owner for any of the foregoing obligations,
costs and expenses which Owner has capitalized and included (or is required
hereunder to capitalize and include) as an element of the Acquisition Cost and
(ii) Agent shall not be required to pay or reimburse Owner, and Owner shall not
capitalize and include as an element of the Acquisition Cost, any obligations,
costs and expenses (including Unrecovered Liabilities and Judgments) incurred by
Owner as a result of a casualty, condemnation or force majeure event (or
interest accrued with respect thereto) with respect to the Project or any
payments for which Agent would not be obligated to indemnify Owner or any other
Indemnified Person under the provisions of Section 12 hereof or Section 11 of
the Lease. Expenses incurred by Owner (including, without limitation, Financing
Costs) in financing obligations, costs and expenses shall be payable by Agent
hereunder, if not capitalized (or required to be capitalized hereunder) by
Owner.

9.6.   Delivery of Information.

(a)   Agent shall deliver to Owner and Assignee from time to time, (i) promptly,
and in any event within ten (10) days after request, such information available
to Agent with respect to Agent's operations, business, properties, assets,
financial condition or litigation as Owner or Assignee shall reasonably request;
(ii) promptly, and in any event within ten (10) days after a Responsible Officer
obtains actual knowledge of any Event of Default, Potential Default, Event of
Loss, Event of Project Termination, Potential Event of Project Termination or
Termination Event hereunder, a certificate of a Responsible Officer specifying
the nature and period of existence of such Event of Default, Potential Default,
Event of Loss, Event of Project Termination, Potential Event of Project
Termination or Termination Event, and what action, if any, Agent or the
Guarantor has taken, is taking, or proposes to take with respect thereto; (iii)
promptly, and in any event within ten (10) days after a Responsible Officer
obtains actual knowledge of any material adverse change in the financial
condition or business of Agent, or of any liabilities or obligations arising as
a result of tortious action or Environmental Damages related to the Project or
as a result of governmental fines or obligations (other than taxes) or
liabilities or obligations arising as a result of Environmental Matters, or of
any litigation of the type described in subsection 8.4 hereof, a certificate of
a Responsible Officer describing such change, liabilities, obligations or
litigation, as the case may be, and what action, if any, Agent has taken, is
taking, or proposes to take with respect thereto; (iv) promptly, and in any
event not more than ten (10) days after the end of each fiscal year of Agent, a
certificate of a Responsible Officer stating, to the best knowledge of such
Responsible Officer after reasonable inquiry, whether there exists on the date
of such certificate any Event of Default, Potential Default, Event of Loss,
Event of Project Termination, Potential Event of Project Termination,
Termination Event, default under any Project Contract or Construction Document,
and if any Event of Default, Potential Default, Event of Loss, Event of Project
Termination, Potential Event of Project Termination, Termination Event, or
default under any Project Contract or Construction Document exists, specifying
the nature and period of existence thereof and what action, if any, Agent or the
Guarantor has taken, is taking or proposes to take with respect thereto; and (v)
promptly, and in any event within ten (10) days after a Responsible Officer
obtains actual knowledge of any legal, governmental or regulatory proceeding
which if adversely determined could reasonably be expected to have a material
adverse effect on (a) the construction, operation, maintenance, leasing,
ownership, use, value or regulatory status of the Project, (b) the ability of
Agent to observe and perform its obligations under the Operative Documents, or
any of the Construction Documents or the Project Contracts in a timely manner or
the ability of the Guarantor to perform its obligations under the Guaranty in a
timely manner or (c) the rights or interests of Owner or Assignee under the
Operative Documents, the Guaranty, or any of the Construction Documents or the
Project Contracts, a certificate of a Responsible Officer, describing each such
proceeding and what action, if any, Agent has taken, is taking, or proposes to
take with respect thereto.

(b)   Agent shall give notice to Owner and Assignee promptly upon the occurrence
of:

   (i)   receipt of any notice given pursuant to any of the Construction
Documents or other Project Contracts that a default by Agent has occurred
thereunder;

   (ii)   issuance of any notice by Agent alleging that a default has occurred
pursuant to any of the Construction Documents or any Project Contract;

   (iii)   obtaining knowledge of any condition which constitutes a delay for
force majeure under any Construction Document or any Project Contract with
respect to construction or completion of the Project;

   (iv)   the imposition of any Lien, other than Permitted Liens;

   (v)   receipt of notices from any party to any Construction Document or
Project Contract that (i) such party desires to amend, modify or waive any term
of any Construction Document or Project Contract (including any change orders
under the EPC Contract), (ii) such party is commencing or proposes to commence
any dispute resolution procedure under the terms of any Construction Document or
Project Contract, (iii) such party is terminating or has proposed to terminate
any Construction Document or Project Contract, (iv) a default or a force majeure
event has occurred under any Construction Document or Project Contract or any
Person has alleged that a default or a force majeure event has occurred under
any Construction Document or Project Contract, or (v) there are claims for
damages in excess of $100,000 existing as a result of Agent's performance of or
its failure to perform any of its obligations under any Construction Document or
Project Contract;

   (vi)   receipt of any material notices from the General Contractor under the
EPC Contract or from Siemens Westinghouse Power Corporation under the Siemens
Turbine Contract;

   (vii)   obtaining knowledge of any pending or threatened litigation or
proceeding affecting the Project in which the amount of damages requested
exceeds $1,000,000 or more or in which injunctive or similar relief is sought;
and

   (viii)   obtaining actual knowledge of any litigation or proceeding affecting
the General Contractor, Siemens Westinghouse Power Corporation or the Operator
that could reasonably be expected, based upon facts actually known to Agent, to
impair the ability of such party to perform its obligations under any of the
Construction Documents or the Project Contracts.

         Each notice pursuant to paragraph (b) of this subsection 9.6 shall be
accompanied by a statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action, if any, Agent proposes
to take with respect thereto.

(c)   Agent shall promptly furnish to Owner and Assignee:

   (i)   all material written communications relating to any pending or
threatened investigations, claims or proceedings with respect to any material
Governmental Action or proposing to amend, modify or affect any material
Governmental Action then required to be in effect;

   (ii)   written notice of the occurrence of any event giving rise (or that
could reasonably be expected to give rise) to a claim under any insurance policy
maintained pursuant to the terms of this Agreement in an amount greater than
$1,000,000 together with copies of any document relating thereto (including
copies of any such claim) in the possession or control of Agent;

   (iii)   promptly after preparation thereof, any and all revisions to the
Budget or the Construction Drawdown Schedule;

   (iv)    promptly after obtaining actual knowledge thereof, written notice of
the occurrence of any event giving rise or that could reasonably be expected to
give rise to the Project failing to achieve Substantial Completion (as defined
in the EPC Contract) under the EPC Contract prior to the Completion Date;

   (v)   promptly upon its execution a copy of any Construction Document or
Project Contract or replacement thereto;

   (vi)   promptly upon its execution a copy of the LNTP, if any, and the Full
Notice to Proceed (each as defined in the EPC Contract) delivered or to be
simultaneously delivered to the General Contractor pursuant to Section 2.1 of
the EPC Contract authorizing the commencement of work on the Project; and

   (vii)   promptly upon its execution, a copy of the Replacement MOU Agreement.

9.7.   Conduct of Business and Maintenance of Existence. Agent shall preserve,
renew and keep in full force and effect its legal existence (except as otherwise
permitted herein), and maintain all rights, privileges and franchises material
to the conduct of its business, and comply with all Legal Requirements, except
any Legal Requirements, the noncompliance with which, individually or in the
aggregate, (a) will not place either Owner or any Assignee in any danger of
civil liability which Owner or such Assignee is not adequately indemnified for
by Agent or subject Owner or any Assignee to any danger of criminal liability as
a result of failure to comply therewith, provided that, in the case of any such
danger of criminal liability, any grace period in which to cure such
non-compliance shall not be applicable and (b) could not reasonably be expected
to have a material adverse effect on (i) the construction, operation,
maintenance, leasing, ownership, use, value or regulatory status of the Project,
(ii) the ability of Agent to observe and perform its obligations under the
Operative Documents, or any of the Construction Documents or the Project
Contracts in a timely manner or the ability of the Guarantor to perform its
obligations under the Guaranty in a timely manner, or (iii) the rights or
interests of Owner or Assignee under the Operative Documents, the Guaranty, or
any of the Construction Documents or the Project Contracts; provided, however,
that nothing contained in this subsection 9.7 shall prevent Agent from
consummating any merger, consolidation or sale permitted by the provisions of
subsection 10.2 hereof.

9.8.   Legal Requirements and Insurance Requirements. (a) Agent shall comply or
shall cause compliance with every Insurance Requirement and Legal Requirement
(including, without limitation, Environmental Requirements) affecting the
execution, delivery and performance of this Agreement, the Project Contracts and
the Construction Documents and the Project; and (b) Agent will not do or permit
any act or thing which is contrary to any Insurance Requirement or which is
contrary to any Legal Requirement, or which might impair, other than in the
normal use thereof, the value or usefulness of the Project, except, in the case
of (a) and (b) of this subsection, any Legal Requirements, the noncompliance
with which, individually or in the aggregate, (i) will not place either Owner or
any Assignee in any danger of civil liability which Owner or such Assignee is
not adequately indemnified for by Agent or subject Owner or any Assignee to any
danger of criminal liability as a result of failure to comply therewith,
provided that, in the case of any such danger of criminal liability, any grace
period in which to cure such non-compliance shall not be applicable and (ii)
could not reasonably be expected to have a material adverse effect on (A) the
construction, operation, maintenance, leasing, ownership, use, value or
regulatory status of the Project, (B) the ability of Agent to observe and
perform its obligations under the Operative Documents, or any of the
Construction Documents or the Project Contracts in a timely manner or the
ability of the Guarantor to perform its obligations under the Guaranty in a
timely manner or (C) the rights or interests of Owner or Assignee under the
Operative Documents, the Guaranty, or any of the Construction Documents or the
Project Contracts. Agent shall perform and observe all of the covenants set
forth in subsections 8.27 and 9.16 of this Agreement and those sections rather
than this subsection 9.8 shall apply to Environmental Requirements.

9.9.   Payment of Taxes. With respect to the Project, Agent shall make all
required reports to the appropriate taxing authorities and shall pay and
discharge during the term of this Agreement, on behalf of Owner, the taxes that
Agent would be required to pay and discharge under paragraph (c) of Section 9 of
the Lease (and all costs relating thereto shall be reimbursed by Owner by means
of advances under this Agreement, and shall be capitalized by Owner as an
element of the Acquisition Cost of the Project). Payment and discharge of such
taxes shall be on the terms set forth in paragraph (c) of Section 9 of the
Lease.

9.10.   Filings, Etc. Agent shall promptly and duly execute, deliver, file, and
record, at Agent's expense, all such documents, statements, filings, and
registrations, and take such further action as Owner shall from time to time
reasonably request in writing in order to establish, perfect and maintain
Owner's title to and interest in the Project and Assignee's interest in this
Agreement or the Project as against Agent or any third party claiming by or
through Agent in any applicable jurisdiction.

9.11.   Use of Proceeds. The proceeds of each advance shall be used by Agent for
payment or reimbursement of costs specified in the applicable request for the
advance and in accordance with the Budget.

9.12.   Compliance with Other Requirements. Agent shall use reasonable
precautions to prevent loss or damage to the Project and to prevent injury to
third Persons or property of third Persons, including, without limitation, the
provision of security on and around the Project such that access to the Project
is limited to employees of Agent, the General Contractor and subcontractors
appointed to perform work in connection with the construction of the Project and
to others to whom Agent elects to provide access in furtherance of Agent's
business goals. If an Event of Loss shall occur, or the Project is partially
damaged or destroyed by fire or any other cause, or the Project is subject to
any partial condemnation or taking by any Person or Governmental Authority
having the power of eminent domain, Agent shall promptly commence the
restoration and reconstruction of the Project and Owner shall continue to be
obligated to make advances to Agent pursuant to the terms of Section 5, 6 and 7
of this Agreement. Agent shall cooperate fully with Owner and all insurance
companies providing insurance pursuant to subsection 9.3 hereof in the
investigation and defense of any claims or suits arising from the ownership or
operation of equipment or ownership, use, or occupancy of the Project; provided
that nothing contained in this subsection 9.12 shall be construed as imposing on
Owner any duty to investigate or defend any such claims or suits. Agent shall
comply and shall use its reasonable best efforts to cause all Persons operating
equipment on, using or occupying the Project, to comply with every Insurance
Requirement and Legal Requirement regarding acquiring, titling, registering,
leasing, subleasing, insuring, using, occupying, operating and disposing of the
Project, and, if applicable, the licensing of operators thereof, except any
Legal Requirements, the noncompliance with which, individually or in the
aggregate, (a) will not place either Owner or any Assignee in any danger of
civil liability which Owner or such Assignee is not adequately indemnified for
by Agent or subject Owner or any Assignee to any danger of criminal liability as
a result of failure to comply therewith, provided that, in the case of any such
danger of criminal liability, any grace period in which to cure such
non-compliance shall not be applicable and (b) could not reasonably be expected
to have a material adverse effect on (i) the construction, operation,
maintenance, leasing, ownership, use, value or regulatory status of the Project,
(ii) the ability of Agent to observe and perform its obligations under the
Operative Documents, or any of the Construction Documents or the Project
Contracts in a timely manner or the ability of the Guarantor to perform its
obligations under the Guaranty in a timely manner, or (iii) the rights or
interests of Owner or Assignee under the Operative Documents, the Guaranty, or
any of the Construction Documents or the Project Contracts.

9.13.   Operation of Project. Agent shall, with respect to any testing of the
Project at any time prior to the Effective Date, perform and observe, and cause
the Operator to perform and observe during the term of this Agreement, on behalf
of Owner, all of the agreements and conditions set forth in Sections 8 and 9 of
the Lease (except that the provisions of all but the first two sentences of
paragraph (d) of Section 8 and all of paragraphs (b) and (e) of Section 9 of the
Lease shall not be applicable prior to the Effective Date) with respect to the
Project (and all costs relating thereto shall be reimbursed by Owner by means of
advances under this Agreement, and shall be capitalized by Owner as an element
of the Acquisition Cost of the Project), except that this Agreement shall
substitute the terms "Owner" for "the Lessor" and "Agent" for "the Lessee".

9.14.   Construction of Project. Agent agrees to cause the construction,
maintenance, repair, equipping, use and operation of the Project in the manner
and for the purpose contemplated hereby and by the Construction Documents and
the Project Contracts. Agent shall comply in all material respects with all
applicable Federal, state and local laws and regulations relating to the keeping
of records for the Project.

9.15.   Technology. Agent shall maintain, or cause to be maintained, all
Intellectual Property Rights and technology necessary in connection with the
construction, operation and maintenance of the Project in accordance with the
requirements of the Construction Documents and the Project Contracts.

9.16.   Lease Covenants. Agent shall perform and observe all of the agreements
and conditions set forth in paragraphs (ii)(a), (ii)(b), (ii)(e), (ii)(f),
(ii)(h), (ii)(i) and (ii)(l) of Section 2 of the Lease as if set forth in full
herein.

9.17.   Governmental Approvals. Agent shall (a) duly obtain, or cause to be
obtained, on or prior to such date as the same become legally required, and (b)
thereafter maintain, or cause to be maintained, in effect as long as legally
required, all authorizations, consents, approvals, waivers, exemptions,
variances, registrations, leases, tariffs, certifications, franchises,
permissions, Permits and licenses of, and filings and declarations with, and
rulings by, any Governmental Authority (including, without limitation,
Environmental Approvals and those with respect to zoning and other land use
laws, ordinances and regulations) necessary for the construction, ownership and
operation of the Project in accordance with and as contemplated by the
Construction Documents, the Project Contracts, this Agreement and the Lease.

9.18.   Certain Obligations Upon Events of Project Termination. Commencing upon
the occurrence of any Event of Project Termination, Agent shall satisfy all Loss
Payment Requirements and shall, upon the request of Owner or Assignee, exercise
all commercially reasonable efforts (a) to provide Owner (or a designated
assignee of Owner or Assignee) with all manuals and other documents in Agent's
possession or to which Agent has access relating to the services to be provided
by the General Contractor or the Operator under the Construction Documents and
the Project Contracts necessary to enable the Project to operate on commercially
reasonable terms, (b) to provide Owner (or a designated assignee of Owner or
Assignee) with any Construction Documents and Project Contracts, in each case to
the extent assignable and not assigned to Owner (or a designated assignee of
Owner or Assignee) pursuant to paragraph (a)(i)(B) of the definition of "Loss
Payment Requirements" herein, (c) to provide Owner (or a designated assignee of
Owner or Assignee) with any Permits or Intellectual Property Rights, in each
case to the extent assignable and not assigned to Owner (or a designated
assignee of Owner or Assignee) pursuant to paragraph (b) of the definition of
"Loss Payment Requirements" herein that are necessary to enable the Project to
operate on commercially reasonable terms in connection with its operation as an
EWG and the sale of electricity at wholesale, (d) to provide Owner (or a
designated assignee of Owner or Assignee) with any other permits, licenses or
other Governmental Actions (in each case to the extent assignable) required to
enable such party to operate the Project on commercially reasonable terms as an
EWG in connection with the sale of electricity at wholesale and (e) to either
negotiate in good faith with Owner (or a designated assignee of Owner or
Assignee), or locate a third party reasonably acceptable to Owner and Assignee
who is capable of operating the Project for Owner (or a designated assignee of
Owner or Assignee), to operate the Project for Owner (or such designated
assignee of Owner or Assignee) for fair market value compensation for such
services. Agent's obligations contained in this subsection 9.18 shall survive
the expiration or other termination of this Agreement until Owner receives
payment of (i) all amounts owing pursuant to this Agreement, (ii) all losses,
damages, costs and expenses (including, without limitation, attorneys' fees and
expenses, commissions, filing fees and sales or transfer taxes) sustained by
Owner hereunder with respect to the Project, (iii) all amounts owing under the
Financing Arrangements and (iv) any unreimbursed costs incurred by Owner or
Assignee with respect to the Project, the Construction Documents or the Project
Contracts after the term of this Agreement.

9.19.   Further Assurances. Agent shall from time to time promptly execute and
deliver to Owner all such documents and instruments and do all such other acts
and things as Owner may reasonably request to obtain the full benefits of this
Agreement, to exercise and enforce its rights and remedies hereunder and to
protect Owner's rights and interest in and to the Project. Agent shall furnish
to Owner upon request the contracts, bills of sale, statements, receipted
vouchers and other agreements and documents under which Owner has title to any
materials, fixtures or articles of personal property incorporated or intended to
be incorporated in or required for the operation of the Project. Agent shall
furnish Owner and any Assignee with such documents, reports, certificates,
affidavits and other information, in form and substance satisfactory to Owner
and any Assignee in their reasonable judgment, as Owner or any Assignee may
require to evidence compliance by Agent with all of the provisions of this
Agreement.

9.20.   Payment of Insurance Premiums. Agent shall apply the proceeds of each
advance made by Owner under Sections 4, 5, 6 and 7 of this Agreement for payment
in full of all amounts due and owing (if any) with respect to obtaining and
maintaining all insurance policies required by the provisions of paragraph (a)
of subsection 9.3 hereof such that all of the insurance required by subsection
9.3 hereof is in full force and effect for the entire term of this Agreement.

9.21.   Delivery of Replacement MOU Agreement. Agent shall deliver to Owner and
Assignee on or prior to the date that is ninety (90) days from the date of this
Agreement, a fully executed and complete copy of the Replacement MOU Agreement,
in form and substance reasonably satisfactory to Owner and Assignee. For
purposes of this Section 9.21, the following procedures shall apply. Agent shall
deliver to counsel for Owner and counsel for the Note Purchasers (as defined in
the Collateral Indenture) a proposed form of Replacement MOU Agreement on or
prior to the date that is 45 days after the date of this Agreement, which
proposed form shall be reviewed and commented upon by such counsel. On or prior
to the date that is 90 days after the date of this Agreement, Agent shall
deliver to the Owner and the Assignee, a fully executed and complete copy of the
Replacement MOU Agreement, which Replacement MOU Agreement shall be reasonably
satisfactory to the Owner and the Assignee in form and substance. Upon receipt
of the Replacement MOU Agreement, the Owner shall request that the Assignee
obtain the approval of such Replacement MOU Agreement by the Majority Holders in
accordance with Section 4 of the Collateral Indenture.

SECTION 10.   NEGATIVE COVENANTS

Agent hereby agrees that, so long as this Agreement remains in effect, Agent
shall not directly or indirectly:

10.1.   Changes in Plans. (a) Modify or supplement the Plans without the prior
written consent of Owner and Assignee and (if required) of all Governmental
Authorities which previously have approved the matters to be changed or (b)
issue, direct, authorize, consent to or permit to be effective any change order
under the EPC Contract that, in the case of (a) or (b) above, could reasonably
be expected to have a material adverse effect on the construction, operation,
maintenance, leasing, ownership, use, value or regulatory status of the Project,
without the prior written consent of Owner and Assignee.

10.2.   Prohibition of Fundamental Changes. Consolidate with or merge into any
other Person except as set forth in Section 25 of the Lease, provided that the
term "Owner" shall substitute for the term "the Lessor" and the term "Agent"
shall substitute for the term "the Lessee".

10.3.   Assignment of Obligations. Assign any of its obligations hereunder to
any other party.

10.4.   Project Contracts; Construction Documents. (a) Create, incur, assume or
permit to exist any Lien (other than the Lien of the Pledge Agreement or any
Permitted Lien) upon Agent's rights with respect to any Project Contract or
Construction Document, or sell or assign Agent's interest in any Project
Contract or Construction Document, other than as permitted pursuant to a
Financing Arrangement and the Pledge Agreement, or (b) without the prior written
consent of Owner and Assignee, terminate any Project Contract or Construction
Document (except for the expiration of the EPC Contract in accordance with its
terms) or amend, modify, supplement, restate, replace, grant any consent under,
or grant or request any waiver pursuant to any Project Contract or Construction
Document (other than change orders under the EPC Contract, in the manner and to
the extent permitted under subsection 10.1 hereof, and any amendment,
modification, supplement, restatement, consent or waiver which could not
reasonably be expected to have a material adverse effect on (i) the
construction, operation, maintenance, leasing, ownership, use, value or
regulatory status of the Project, (ii) the ability of Agent to observe and
perform its obligations under the Operative Documents, or any of the
Construction Documents or the Project Contracts in a timely manner or the
ability of the Guarantor to perform its obligations under the Guaranty in a
timely manner, or (iii) the rights or interests of Owner or Assignee under the
Operative Documents, the Guaranty, or any of the Construction Documents or the
Project Contracts).

10.5.   Agent's Business. Construct or operate any generation facility that is
not subject to the terms of this Agreement or the Lease, or enter into any
business other than (a) as contemplated by the terms of the Construction
Documents and the Project Contracts, (b) the leasing and financing of the
Project pursuant to the Lease, the Lessee Note and the documents incidental
thereto, (c) the constructing, operating, maintaining, repairing and equipping
of the Project as agent of Owner pursuant to this Agreement, and (d) matters
incidental to the performance of its obligations under clauses (a), (b) and (c)
of this sentence. Agent will not enter into any contract other than those
contracts (A) contemplated by this Agreement or (B) in connection with matters
contemplated by the foregoing clauses (a), (b), (c) and (d); provided that (i)
to the extent that such assignment is permitted by the terms and conditions of
each applicable contract (and Agent hereby acknowledges that it shall use
commercially reasonable efforts to secure terms and conditions permitting such
assignment in all contracts applicable to the Project), Agent shall collaterally
assign to Owner all of Agent's right, title and interest in such contracts
pursuant to the Pledge Agreement, and (ii) if such contract could reasonably be
expected to cause the Project Costs to exceed the Budget or to materially and
adversely affect the performance of the General Contractor's obligations under
the EPC Contract (including, without limitation, by providing a potential basis
for a change order or a force majeure delay or similar relief thereunder), Agent
shall be required to obtain the consent of Owner and Assignee to such contract
prior to its execution of such contract, which consent shall not be unreasonably
withheld.

10.6.   No Liens. Agent shall not, without the prior written consent of Owner,
create, incur, assume or permit to exist any Lien upon the Project or create any
Lien upon the Premises other than Permitted Liens.

10.7.   Unreimbursable Costs. Agent shall not incur or take on any obligation to
pay or discharge any Unreimbursable Costs, or seek reimbursement from Owner
pursuant to Section 5, 6 or 7 hereof of any Unreimbursable Costs.

SECTION 11.   EVENTS OF DEFAULT AND EVENTS OF
PROJECT TERMINATION

11.1.   Events of Default. The occurrence of any of the following shall
constitute an Event of Default:

(a)   Involuntary Bankruptcy, Etc. The entry of a decree or order for relief in
respect of Agent by a court having jurisdiction in the premises or the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of Agent or of any substantial part of
Agent's property, or ordering the winding up or liquidation of Agent's affairs,
in an involuntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or state bankruptcy, insolvency or
other similar law, and such decree or order remains unstayed and in effect for
sixty (60) consecutive days; or the commencement against Agent of an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or state bankruptcy, insolvency or other similar law,
and the continuance of any such case unstayed and in effect for a period of
sixty (60) consecutive days.

(b)   Voluntary Bankruptcy, Etc. Agent's insolvency (however evidenced), or
Agent's admission of insolvency or bankruptcy, or the commencement by Agent of a
voluntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or state bankruptcy, insolvency or
other similar law, or the consent by Agent to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of Agent or of any substantial part of Agent's
property, or the making by Agent of an assignment for the benefit of creditors,
or the failure of Agent generally to pay its debts as such debts become due, or
the taking of corporate action by Agent or the Guarantor in furtherance of any
such action.

(c)   Environmental Matters. The occurrence of any event or circumstance
relating to Environmental Matters that (A) has arisen directly or indirectly
from Agent's actions or failures to act or from any actions or failures to act
on the part of any contractors or subcontractors of Agent and (B) has had or
will have a material adverse effect on (i) the construction, operation,
maintenance, leasing, ownership, use, value or regulatory status of the Project,
(ii) the ability of Agent to observe and perform its obligations under the
Operative Documents, or any of the Construction Documents or the Project
Contracts in a timely manner or the ability of the Guarantor to perform its
obligations under the Guaranty in a timely manner or (iii) the rights or
interests of Owner or Assignee under the Operative Documents, the Guaranty, or
any of the Construction Documents or the Project Contracts.

(d)   Other Events. Any of the events referred to in subsection 11.3 hereof
shall occur as a result of any direct or indirect fraudulent act, illegal act,
misapplication of funds or willful misconduct on the part of Agent or any Person
directly or indirectly controlling Agent or under the direct or indirect control
of Agent.

(e)   Other Defaults. Agent, or any Person under the direct or indirect control
of Agent, shall, directly or indirectly, misapply funds relating to any advance
hereunder in violation of the terms of this Agreement, including, without
limitation, Agent's failure to comply with the covenant contained in subsection
9.20 hereof.

11.2.   Owner's Rights upon an Event of Default.

(a)   Upon the occurrence and continuation of any Event of Default, Owner may in
its discretion declare this Agreement to be in default and do any one or more of
the following (subject to the provisions of paragraphs (a) and (d) of Section 14
of this Agreement):

   (i)   terminate this Agreement and/or Owner's obligations to make any further
advances hereunder;

   (ii)   take immediate possession of the Project and remove any equipment or
property of Owner in the possession of Agent, wherever situated, and for such
purpose, enter upon the Premises without liability to Agent for so doing;

   (iii)   whether or not any action has been taken under clause (i) or (ii)
above, sell Owner's interest in the Project (with or without the concurrence or
request of Agent);

   (iv)    hold, use, occupy, operate, repair, remove, lease, sublease or keep
idle the Project as Owner in its sole discretion may determine, without any duty
to mitigate damages with respect to any such action or inaction or with respect
to any proceeds thereof; and

   (v)   exercise any other right or remedy which may be available under
applicable law and in general proceed by appropriate judicial proceedings,
either at law or in equity, to enforce the terms hereof or to recover damages
provided for in this subsection 11.2.

(b)   Suit or suits for the recovery of any default in the payment of any sum
due hereunder or for damages may be brought by Owner from time to time at
Owner's election, and nothing herein contained shall be deemed to require Owner
to await the date whereon this Agreement or the term hereof would have expired
by limitation had there been no such default by Agent or no such termination or
cancellation.

(c)   The receipt of any payments under this Agreement by Owner with knowledge
of any breach of this Agreement by Agent or of any default by Agent in the
performance of any of the terms, covenants or conditions of this Agreement,
shall not be deemed to be a waiver of any provision of this Agreement.

(d)   No receipt of moneys by Owner from Agent after the termination or
cancellation hereof in any lawful manner shall reinstate, continue or extend
this Agreement, or operate as a waiver of the right of Owner to recover
possession of the Project by proper suit, action, proceedings or remedy or
operate as a waiver of the right to receive any and all amounts owing by Agent
to or on behalf of Owner hereunder; it being agreed that, after the service of
notice to terminate or cancel this Agreement, and the expiration of the time
therein specified, if the default has not been cured in the meantime, or after
the commencement of any suit, action or summary proceedings or of any other
remedy, or after a final order, warrant or judgment for the possession of the
Project, Owner may demand, receive and collect any moneys payable hereunder,
without in any manner affecting such notice, proceedings, suit, action, order,
warrant or judgment. Acceptance of the keys to the Project, or any similar act,
by Owner, or any agent or employee of Owner, during the term hereof, shall not
be deemed to be an acceptance of a surrender of the Project unless Owner and
Assignee shall consent thereto in writing.

(e)   After any Event of Default, Agent shall be liable for, and Owner may
recover from Agent, (i) all of Owner's obligations, costs and expenses incurred
in connection with its obligations under this Agreement and for which Owner may
demand payment or reimbursement pursuant to subsection 9.5 hereof (including any
such costs and expenses arising after taking into account the application under
the Financing Arrangements of any payments made under this subsection 11.2),
(ii) all amounts payable pursuant to Section 12 hereof, and (iii) all costs and
expenses (including, without limitation, attorneys' fees and expenses incurred
by Owner and Assignee in connection with the exercise of their remedies
hereunder, filing fees and sales or transfer taxes and all costs and expenses
related to (x) the conduct of investigations, studies, sampling and/or testing
of the Premises and (y) the taking of any action, including, without limitation,
any remedial measures or other corrective action with respect to the Premises)
sustained by Owner by reason of such Event of Default and the exercise of
Owner's remedies with respect thereto, including, without limitation, in the
event of a sale by Owner of its interest in the Project pursuant to this
subsection 11.2, all costs and expenses associated with such sale. The amounts
payable in clauses (i) through (iii) above are hereinafter sometimes referred to
as the "Accrued Default Obligations".

(f)   After an Event of Default, Owner may sell its interest in the Project upon
any terms that Owner deems satisfactory, free of any rights of Agent or any
Person claiming through or under Agent (including, without limitation, any
rights hereunder or under the Lease, the Construction Documents or the Project
Contracts). In the event of any such sale, in addition to the Accrued Default
Obligations, Owner shall be entitled to recover from Agent, as liquidated
damages and not as a penalty, an amount equal to the Acquisition Cost, minus the
proceeds of such sale received by Owner. Proceeds of sale received by Owner in
excess of the Acquisition Cost shall be applied first, to the Accrued Default
Obligations, second, to reimburse Agent for all Unreimbursed Project Costs,
third, to satisfy all Unrecovered Liabilities and Judgments, and fourth, in
payment to Agent; provided, however, that Agent shall remain liable from
proceeds received pursuant to clause fourth above for any Unrecovered
Liabilities and Judgments that arise after the payment of such proceeds to Agent
to the extent such Unrecovered Liabilities and Judgments arise from or relate to
acts or omissions occurring, or circumstances or conditions created or existing
at any time as of or prior to the expiration or termination of this Agreement.

(g)   In the event of a sale pursuant to this subsection 11.2, upon receipt by
Owner of the amounts payable hereunder and under the Lessee Note, Owner shall
transfer all of Owner's right, title and interest in and to the Project to a
purchaser other than Agent or to Agent, as the case may be.

(h)   As an alternative to any such sale, or if Agent converts the Project after
an Event of Default, or if the Project is lost or destroyed at the time of or
during the continuance of an Event of Default, in addition to the Accrued
Default Obligations, Owner may cause Agent to pay to Owner, and Agent shall pay
to Owner, as liquidated damages and not as a penalty, an amount equal to the
Acquisition Cost plus an additional amount equal to 1.75% of the Acquisition
Cost. In the event Owner receives payment of the Acquisition Cost plus an
additional amount equal to 1.75% of the Acquisition Cost and the Accrued Default
Obligations, Owner shall transfer all of Owner's right, title and interest in
and to the Project, including without limitation, the delivery of the documents
contemplated in Section 14 below, to Agent.

(i)   In the event Owner does not receive payment of an amount equal to the
Acquisition Cost plus an additional amount equal to 1.75% of the Acquisition
Cost, plus the Accrued Default Obligations, then, in addition to Owner's other
rights in this subsection 11.2, Agent shall upon Owner's request (i) assign to
Owner (or to an assignee designated by Owner or Assignee), at no cost, all
right, title and interest of Agent in, to and under all Governmental Actions and
Intellectual Property Rights needed for the equipping, maintenance, operation or
use of the Project and obtained and held by Agent at that time, (ii) assign to
Owner (or to a foreclosure purchaser designated by Owner or Assignee), at no
cost, all right, title and interest of Agent in, to and under the Construction
Documents and the Project Contracts, and in the event any additional consent of
any party to a Construction Document or Project Contract is required as a
precondition thereunder to an assignment to any other third party assignee
designated by Owner or Assignee, use its best efforts to obtain any such
required consent to such proposed non-foreclosure assignment and assumption of
the Construction Documents and the Project Contracts, and (iii) assign to Owner,
at no cost, all right, title and interest of Agent in, to and under all service
agreements in existence at the time of such sale and transferable by Agent and
easements available to Agent and transferable by Agent in connection with the
equipping, maintenance, operation or use of the Project. Agent acknowledges that
it would be difficult to ascertain the value to Owner of Agent's agreement to
assign, transfer or have reissued to Owner such Governmental Actions and
Intellectual Property Rights, to assign such Construction Documents and Project
Contracts (and, if necessary, to obtain such consents to such assignment) and to
assign to Owner such service agreements and easements or to adequately
compensate Owner by an award of damages for Agent's failure to assign to Owner
such Governmental Actions and Intellectual Property Rights, to assign such
Construction Documents and Project Contracts (and, if necessary, to obtain such
consents to such assignment) and to assign to Owner such service agreements and
easements, and that therefore Owner would not have an adequate remedy at law for
breach by Agent of its agreement hereunder to Owner. Accordingly, Agent
acknowledges that Owner shall be entitled to obtain specific performance of
Agent's obligation to assign to Owner such Governmental Actions and Intellectual
Property Rights, to obtain such consents to such assignment, and to assign to
Owner the service agreements and easements. In the event Agent fails to obtain
any consents required in clause (ii) of the third preceding sentence, at the
request of Owner or such purchaser, as the case may be, Agent shall agree to (1)
at the expense of such purchaser or Owner, as the case may be, continue to
perform under and maintain in full force and effect the Construction Documents
and the Project Contracts and pay all sums received under the Construction
Documents and the Project Contracts to such third party or Owner, as the case
may be, (2) at the expense of such third party or Owner, as the case may be, and
subject to receipt of indemnification reasonably acceptable to Agent, take all
actions requested by such third party or Owner, as the case may be, with respect
to such Construction Documents and Project Contracts (including all actions with
respect to the enforcement of Agent's rights and remedies under such
Construction Documents and Project Contracts), and (3) not amend, modify,
supplement, waive a provision of, grant any consent under or terminate any such
Construction Document or Project Contract without the prior written consent of
such third party or Owner, as the case may be.

(j)   No remedy referred to in this subsection 11.2 is intended to be exclusive,
but each shall be cumulative and in addition to any other remedy referred to
above or otherwise available to Owner at law or in equity, and the exercise in
whole or in part by Owner of any one or more of such remedies shall not preclude
the simultaneous or later exercise by Owner of any or all such other remedies.
No waiver by Owner of any Event of Default hereunder shall in any way be, or be
construed to be, a waiver of any future or subsequent Event of Default.

(k)   With respect to the termination of this Agreement as a result of an Event
of Default, Agent hereby waives service or any notice or intention to re-enter.
To the extent permitted by applicable law, Agent hereby waives any and all
rights to recover or regain possession of the Project or to reinstate this
Agreement as permitted or provided by or under any statute, law or decision now
or hereafter in force and effect.

11.3.   Events of Project Termination. The occurrence of any one or more of the
following (which does not constitute an Event of Default) shall constitute an
Event of Project Termination:

(a)   Failure to Complete. If as of the close of business on the Completion
Date, Substantial Completion has not occurred as herein provided.

(b)   Failure to Make Payments. Failure of Agent to pay amounts due to Owner at
the time of any scheduled sale of the Project hereunder or upon any date of
purchase or termination of the Project as contemplated herein under subsection
11.2, 11.4 (including, without limitation, failure to pay the Loss Payment when
due) or Section 14 hereof, or failure of Agent to pay any other amount due
hereunder within ten (10) days from demand for such payment.

(c)   Other Defaults. Agent shall default in the performance or observance of
any other term, covenant, condition or obligation contained in this Agreement
(other than a default arising under subsection 9.20 hereof which is an Event of
Default under paragraph (e) of subsection 11.1 of this Agreement) and, in the
case of such default (other than a default arising under subsection 9.3,
9.6(a)(ii), 9.6(a)(iii), 9.7, 9.16 or 9.18 hereof, each of which shall not be
subject to any grace period, or as otherwise provided in this subsection 11.3),
such default shall continue for thirty (30) days after the earlier of the date
(i) Agent becomes aware of such default or (ii) written notice shall have been
given to Agent by Owner or Assignee specifying such default and requiring such
default to be remedied; provided, that if such default is of a nature that it is
not capable of being cured by the payment of money or cannot with due diligence
be cured within such thirty (30) day period, and if Agent shall have diligently
commenced curing such default and proceeds diligently and in good faith
thereafter to complete curing such default, then the time within which such
default may be cured shall be extended for such period (not to exceed ninety
(90) days) as is necessary to cure such default.

(d)   Defaults under Construction Documents. Any default by Agent shall occur
under any of the Construction Documents (A) which could reasonably be expected
to have a material adverse effect on (i) the construction, operation,
maintenance, leasing, ownership, use, value or regulatory status of the Project,
(ii) the ability of Agent to observe and perform its obligations under the
Operative Documents, or any of the Construction Documents or the Project
Contracts in a timely manner or the ability of the Guarantor to perform its
obligations under the Guaranty in a timely manner or (iii) the rights or
interests of Owner or Assignee under the Operative Documents, the Guaranty, or
any of the Construction Documents or the Project Contracts and (B) any required
notice shall have been given and any applicable grace period shall have expired.

(e)   Negative Covenants. Agent shall default in the performance or observance
of any agreement, covenant or condition contained in Section 10 hereof.

(f)   Misrepresentations. Any representation or warranty made by Agent in this
Agreement or in any Consent or which is contained in any certificate furnished
under or in connection with this Agreement shall prove to have been false,
misleading or inaccurate in any material respect on or as of the date made or
deemed made.

(g)   Declaration of Obligations. A default or event of default by Agent shall
occur, the effect of which is that the holder or holders of any Indebtedness of
Agent having a then outstanding principal balance in excess of $25,000,000,
causes or declares any of such Indebtedness to become due prior to its stated
maturity under the provisions of any agreement or agreements pursuant to which
such Indebtedness was created.

(h)   Payment of Obligations. Agent shall default in any payment of principal of
or interest on any Indebtedness of Agent having a then outstanding principal
balance in excess of $25,000,000, beyond the period of grace, if any, under the
provisions of any instrument or instruments or agreement or agreements pursuant
to which such Indebtedness was created.

(i)   Undischarged Judgments. Final judgment or judgments for the payment of
money in excess of $15,000,000 in the aggregate shall be rendered against Agent
by any court of competent jurisdiction and the same shall remain undischarged
for a period of thirty (30) days, during which execution of such judgment or
judgments shall not be effectively stayed.

(j)   The Guaranty. (i) The Guaranty ceases to be in full force and effect prior
to the termination thereof in accordance with its terms or the Guarantor asserts
that the Guaranty is not in full force and effect, or (ii) an Event of Default
(as defined in the Guaranty) shall occur under the Guaranty.

(k)   Guarantor Representations. Any representation or warranty made by the
Guarantor in the Guaranty or in any certificate furnished under or in connection
with the Guaranty or this Agreement shall prove to have been false, misleading
or inaccurate in any material respect on or as of the date made or deemed made.

(l)   Event of Loss. An Event of Loss shall occur as a result of Agent's actions
or failure to act and Agent shall fail to demonstrate to the reasonable
satisfaction of Owner and Assignee that Substantial Completion of the Project
will occur on or before the Completion Date.

(m)   The Pledge Agreement. (i) The Pledge Agreement ceases to be in full force
and effect, (ii) Agent defaults in the performance of any obligation or covenant
contained in the Pledge Agreement, any required notice of such default shall
have been given, and any applicable grace period shall have expired, or (iii)
the representation contained in the second and third sentences of subsection
8.20 shall at any time become untrue in any material respect and, in the case of
clause (iii) above, such default shall continue for five (5) days after the
earlier of the date (x) Agent becomes aware that such representation is untrue
or (y) written notice shall have been given to Agent by Owner or Assignee
specifying that such representation is untrue.

(n)   The Lessee Note. (i) The Lessee Note ceases to be in full force and
effect, or (ii) Agent defaults in the due and punctual payment of any amount due
under the Lessee Note.

(o)   Environmental Matters. The occurrence of any event or circumstance
relating to Environmental Matters (other than any event or circumstance
described in paragraph (c) of subsection 11.1 hereof) that has had or will have
a material adverse effect on (i) the construction, operation, maintenance,
leasing, ownership, use, value or regulatory status of the Project, (ii) the
ability of Agent to observe and perform its obligations under the Operative
Documents, or any of the Construction Documents or the Project Contracts in a
timely manner or the ability of the Guarantor to perform its obligations under
the Guaranty in a timely manner or (iii) the rights or interests of Owner or
Assignee under the Operative Documents, the Guaranty, or any of the Construction
Documents or the Project Contracts.

(p)   Termination Event. (i) A Termination Event shall have occurred and (ii)
such Termination Event shall not be waived by Owner and the Majority Holders
within ten (10) Business Days after a written request for such waiver has been
made to Owner and Assignee by Agent or the Guarantor (the occurrence of (i) and
(ii) above being a "Termination Event Trigger").

11.4.   Owner's Rights upon Event of Project Termination. (a)   Upon the
occurrence and continuation of any Event of Project Termination, Owner may do
any one or more of the following (subject to the provisions of paragraph (c) of
Section 14 of this Agreement):

   (i)   terminate this Agreement and/or Owner's obligations to make any further
advances hereunder;

   (ii)   take immediate possession of the Project and remove any or all other
equipment or property of Owner in the possession of Agent, wherever situated,
and for such purpose, enter upon the Premises without liability to Agent for so
doing;

   (iii)   whether or not any action has been taken under clause (i) or (ii)
above, sell Owner's interest in the Project (with or without the concurrence or
request of Agent);

   (iv)   hold, use, occupy, operate, repair, remove, lease or keep idle the
Project as Owner in its sole discretion may determine, without any duty to
mitigate damages with respect to any such action or inaction or with respect to
any proceeds thereof; and

   (v)   exercise any other right or remedy which may be available under
applicable law and in general proceed by appropriate judicial proceedings,
either at law or in equity, to enforce the terms hereof or to recover damages
provided for in this subsection 11.4 hereof.

(b)   Suit or suits for the recovery of any failure to pay any sum due hereunder
or for damages may be brought by Owner from time to time at Owner's election,
and nothing herein contained shall be deemed to require Owner to await the date
whereon this Agreement or the term hereof would have expired by limitation had
there been no such Event of Project Termination or no such termination or
cancellation.

(c)   The receipt of any payments under this Agreement by Owner with knowledge
of any Event of Project Termination shall not be deemed to be a waiver of any
provision of this Agreement.

(d)   No receipt of moneys by Owner from Agent after the termination or
cancellation hereof in any lawful manner shall reinstate, continue or extend
this Agreement, or operate as a waiver of the right of Owner to recover
possession of the Project by proper suit, action, proceedings or remedy or
operate as a waiver of the right to receive any and all amounts owing by Agent
to or on behalf of Owner hereunder; it being agreed that, after the service of
notice to terminate or cancel this Agreement, and the expiration of the time
therein specified, if the Event of Project Termination has not been cured in the
meantime, or after the commencement of any suit, action or summary proceedings
or of any other remedy, or after a final order, warrant or judgment for the
possession of the Project, Owner may demand, receive and collect any moneys
payable hereunder, without in any manner affecting such notice, proceedings,
suit, action, order, warrant or judgment. Acceptance of the keys to the Project,
or any similar act, by Owner, or any agent or employee of Owner, during the term
hereof, shall not be deemed to be an acceptance of a surrender of the Project
unless Owner and Assignee shall consent thereto in writing.

(e)   After any Event of Project Termination, Agent shall be liable for, and
Owner may recover from Agent, (i) an amount equal to 89.9% of the sum of Owner's
obligations, costs and expenses that are capitalizable into the basis of the
Project in accordance with GAAP incurred in connection with its obligations
under this Agreement and for which such obligations, costs and expenses Owner
may demand payment or reimbursement pursuant to subsection 9.5 hereof (including
any such costs and expenses arising after taking into account the application
under the Financing Arrangements of any payments made under this subsection
11.4) and (ii) all amounts payable pursuant to Section 12 hereof. The amounts
payable in clauses (i) and (ii) above are hereinafter sometimes referred to as
the "Accrued Project Termination Obligations".

(f)   After an Event of Project Termination, in addition to the Accrued Project
Termination Obligations, Owner shall be entitled to recover from Agent and Agent
shall pay to Owner upon the occurrence of such Event of Project Termination, as
liquidated damages and not as a penalty, an amount equal to the Loss Payment,
which Owner shall use to pay all Financing Costs (other than any Return on
Equity Capital) and any other amounts (including, without limitation, any
make-whole payments) due with respect to any Financing Arrangement.

(g)   After an Event of Project Termination, Agent shall be required for a
period of nine (9) months (the "Marketing Period") to use its best efforts
commencing on the date of the Event of Project Termination to seek on behalf of
Owner bona fide arm's length bids for the Project at the maximum possible
purchase price from prospective purchasers who are financially capable of
purchasing the Project for cash, on an as-is, non-installment sale basis,
without warranty by, or recourse to, Owner, but free of Owner Liens. Agent shall
notify Owner of the amount of each such bid, and the name and address of the
party submitting such bid. In the event Owner receives a bid for the Project
from such a prospective purchaser during the Marketing Period, Owner may arrange
with Agent, at Owner's sole discretion, for a sale to be made to such purchaser
prior to the end of the Marketing Period; provided, that if Owner does not
receive any bona fide arm's length bids for the Project during the Marketing
Period, the value of the Project shall be deemed to be zero and Owner shall have
no further obligation to Agent under this Agreement, including, without
limitation, under this subsection 11.4; and provided, further, that if Owner
receives any such bona fide arm's length bids during the Marketing Period, and
Owner elects not to sell the Project during the Marketing Period, a sale of the
Project shall be deemed to have occurred for purposes of this subsection 11.4,
the sales proceeds shall be deemed to equal the highest amount of all such bids
and Owner shall have all the obligations with respect to such sales proceeds
that are described in this subsection 11.4 as if such a sale had occurred. Upon
the expiration of the Marketing Period, Owner may sell its interest in the
Project upon any terms that Owner deems satisfactory, free of any rights of
Agent or any Person claiming through or under Agent (including, without
limitation, any rights hereunder or under the Lease, the Construction Documents
or the Project Contracts).

(h)   In the event of a sale (or deemed sale) pursuant to paragraph (g) above,
upon receipt by Owner of the amounts payable hereunder and under the Lessee
Note, Owner shall transfer all of Owner's right, title and interest in and to
the Project to a purchaser other than Agent or to Agent, as the case may be, and
the sales proceeds (or cash equal to the deemed sales proceeds) from any such
sale (or deemed sale) in excess of the sum of the Accrued Project Termination
Obligations and the Unrecovered Termination Costs shall be disbursed by Owner on
the earlier to occur of (i) the date of an actual sale pursuant to paragraph (g)
above or (ii) at the end of the Marketing Period, as follows:

first, to pay all transfer taxes, transfer gains taxes, mortgage recording
taxes, recording and filing fees, and all other similar taxes, fees, expenses
and closing costs (including reasonable attorney fees) in connection with the
conveyance of the Project to the purchaser;

second, to the extent any amounts remain outstanding after application of the
Loss Payment pursuant to paragraph (f) above, to pay any Financing Costs (other
than any Return on Equity Capital) and any other amounts (including, without
limitation, any make-whole payments) due with respect to any Financing
Arrangement;

third, to pay all amounts due to Merrill Leasing under the Reimbursement
Agreement;

fourth, to reimburse any construction contractors and all other general
creditors for all amounts due and owing to such construction contractors or such
general creditors and not paid by Owner in connection with the acquisition and
construction of the Project, provided such construction contractors or such
general creditors deliver evidence reasonably satisfactory to Owner of such
amounts; and

fifth, to reimburse Owner and the equity investors in Owner for all Return on
Equity Capital, unpaid distributions and accrued dividends due and owing Owner
and such equity investors and all fees due and owing to Owner's general partner
under its partnership agreement.

The balance of such excess sales proceeds received by Owner from the sale of the
Project shall be disbursed by Owner in the following order: (1) to Agent in an
amount not to exceed the Loss Payment, (2) to reimburse all parties that have
incurred Unrecovered Liabilities and Judgments, and (3) to Agent in an amount
equal to all remaining proceeds; provided, that any amounts received by Agent
pursuant to this clause (3) shall be owed by Agent to any Indemnified Person for
any Unrecovered Liabilities and Judgments that arise after the payment of such
excess proceeds to the extent such Unrecovered Liabilities and Judgments arise
from or relate to acts or omissions occurring, or circumstances or conditions
created or existing, at any time as of or prior to the expiration or termination
of this Agreement.

(i)   If (i) the Project is converted, lost or destroyed by Agent after an Event
of Project Termination as a result of any direct or indirect fraudulent act,
illegal act, misapplication of funds or willful misconduct on the part of Agent
or any Person under the direct or indirect control of Agent, or (ii) Agent shall
fail to comply with the provisions of subsection 9.18 hereof or shall fail to
satisfy each of the Loss Payment Requirements after an Event of Project
Termination, in addition to the Accrued Project Termination Obligations, Owner
may cause Agent to pay to Owner, and Agent shall pay to Owner, as liquidated
damages and not as a penalty, an amount equal to the Acquisition Cost (net of
any Loss Payment previously paid hereunder), plus an additional amount equal to
1.75% of the Acquisition Cost.

(j)   In the event Owner receives payment of the Acquisition Cost plus an
additional amount equal to 1.75% of the Acquisition Cost, the Accrued Project
Termination Obligations and all amounts described in clause (B) and (C) of the
definition of Unrecovered Termination Costs, Owner shall transfer all of Owner's
right, title and interest in and to the Project, including, without limitation,
the delivery of the documents contemplated in Section 14 below, to Agent.

(k)   In the event Owner does not receive payment of an amount equal to the
Acquisition Cost plus an additional amount equal to 1.75% of the Acquisition
Cost, and the Accrued Project Termination Obligations and all amounts described
in clause (B) and (C) of the definition of Unrecovered Termination Costs, then,
in addition to Owner's other rights in this subsection 11.4, Agent shall upon
Owner's request (i) assign to Owner (or to an assignee designated by Owner or
Assignee), at no cost to Owner, Assignee or their respective designees, all
right, title and interest of Agent in, to and under all Governmental Actions and
Intellectual Property Rights (in each case to the extent assignable) needed for
the equipping, maintenance, operation or use of the Project and obtained and
held by Agent at that time, (ii) assign to Owner (or to a foreclosure purchaser
designated by Owner or Assignee), at no cost to Owner, Assignee or their
respective designees, all right, title and interest of Agent in, to and under
the Construction Documents and the Project Contracts (in each case to the extent
assignable), and in the event any additional consent of any party to a
Construction Document or a Project Contract is required as a precondition
thereunder to an assignment to any other third party assignee designated by
Owner or Assignee, and use its best efforts to obtain any such required consent
to such proposed non-foreclosure assignment and assumption of the Construction
Documents and the Project Contracts, and (iii) assign to Owner (to the extent
assignable), at no cost to Owner, Assignee or their respective designees, all
right, title and interest of Agent in, to and under all service agreements in
existence at the time of such sale and easements available to Agent in
connection with the equipping, maintenance, operation or use of the Project.
Agent acknowledges that it would be difficult to ascertain the value to Owner of
Agent's agreement to assign, transfer or have reissued to Owner such
Governmental Actions and Intellectual Property Rights, to assign such
Construction Documents and Project Contracts (and, if necessary, to obtain such
consents to such assignment) and to assign to Owner such service agreements and
easements or to adequately compensate Owner by an award of damages for Agent's
failure to assign to Owner such Governmental Actions and Intellectual Property
Rights, to assign such Construction Documents and Project Contracts (and, if
necessary, to obtain such consents to such assignment) and to assign to Owner
such service agreements and easements, and that therefore Owner would not have
an adequate remedy at law for breach by Agent of its agreement hereunder to
Owner. Accordingly, Agent acknowledges that Owner shall be entitled to obtain
specific performance of Agent's obligation to assign to Owner such Governmental
Actions and Intellectual Property Rights, to obtain such consents to such
assignment, and to assign to Owner the service agreements and easements. In the
event Agent fails to obtain any consents required in clause (ii) of the third
preceding sentence, at the request of Owner or such purchaser, as the case may
be, Agent shall agree to (A) at the expense of such purchaser or Owner, as the
case may be, continue to perform under and maintain in full force and effect the
Construction Documents and the Project Contracts and pay all sums received under
the Construction Documents and the Project Contracts to such third party or
Owner, as the case may be, (B) at the expense of such third party or Owner, as
the case may be, and subject to receipt of indemnification reasonably acceptable
to Agent, take all actions requested by such third party or Owner, as the case
may be, with respect to such Construction Documents and Project Contracts
(including all actions with respect to the enforcement of Agent's rights and
remedies under such Construction Documents and Project Contracts), and (C) not
amend, modify, supplement, waive a provision of, grant any consent under or
terminate any such Construction Documents and Project Contracts, without the
prior written consent of such third party or Owner, as the case may be.

(l)   No remedy referred to in this subsection 11.4 is intended to be exclusive,
but each shall be cumulative and in addition to any other right referred to
above or otherwise available to Owner at law or in equity, and the exercise in
whole or in part by Owner of any one or more of such rights shall not preclude
the simultaneous or later exercise by Owner of any or all such other rights. No
waiver by Owner of any Event of Project Termination hereunder shall in any way
be, or be construed to be, a waiver of any future or subsequent Event of Project
Termination.

(m)   With respect to the termination of this Agreement as a result of an Event
of Project Termination, to the extent permitted by applicable law, Agent hereby
waives any and all rights to recover or regain possession of the Project or to
reinstate this Agreement as permitted or provided by or under any statute, law
or decision now or hereafter in force and effect.

SECTION 12.   INDEMNITIES

(a)   Except as otherwise provided in paragraph (f) of this Section 12, Agent
shall indemnify, defend, protect and hold harmless Owner and each successor or
successors (each of the foregoing an "Indemnified Person") from and against any
and all liabilities (including, without limitation, Environmental Damages and
strict liability in tort), taxes, losses, obligations, claims (including,
without limitation, Environmental Damages and strict liability in tort),
damages, penalties, causes of action, suits, costs and expenses (including,
without limitation, reasonable attorneys', experts', consultants' and
accountants' fees and expenses) or judgments of any nature relating to or in any
way arising out of:

   (i)   the ordering, delivery, acquisition, purchase agreement for the
acquisition, construction, title on acquisition, rejection, installation,
possession, titling, retitling, registration, re-registration, custody by Agent
of title and registration documents, use, non-use, misuse, financing, lease,
sublease, lease under the Ground Lease, security interest in, operation,
transportation, securing, repair, control, leasehold interest in the Premises or
disposition of the Project or any portion thereof;

   (i)   the Construction Documents, the Project Contracts or the Easements;

   (ii)   any of the claims, liabilities, demands, fees, taxes, violations of
contract, or any other matter or situation described in or contemplated by the
indemnification provisions of subparagraphs (a) and (b) of Section 11 of the
Lease, except that this Agreement shall substitute the terms "Owner" for "the
Lessor", "Agent" for "the Lessee, and "this Agreement" for "this Lease", as the
context shall require and the term "Acquisition Cost" for purposes of this
Section 12 shall mean Acquisition Cost as defined in this Agreement;

   (iii)   any breach of a representation, warranty or covenant made herein by
Agent or which is contained in any certificate furnished by or on behalf of
Agent under or in connection with this Agreement; and

   (iv)   any default in the performance or observance of any term, covenant,
condition or obligation imposed upon Agent which is contained in this Agreement
or any failure to comply with any term, covenant, condition or obligation
imposed upon Agent which is contained in the Ground Lease, the Construction
Documents, or any other Project Contract;

   provided, that Agent shall only have to indemnify such Indemnified Person for
the matters described in this paragraph (a) to the extent caused directly or
indirectly by, or resulting directly or indirectly from, Agent's actions or
failure to act while in possession or control of the Premises or the Project.
Agent and Owner hereby acknowledge and agree that, (A) as used in this Section
12, "Agent's actions or failure to act while in possession or control of the
Premises or the Project" include any action or failure to act on the part of any
contractors or subcontractors of Agent or any other Person permitted by Agent to
enter upon the Premises, provided that, for purposes of this Section 12, Agent
shall be deemed to be in possession and control of the Premises and Project as
long as this Agreement is in effect, (B) Agent shall not be required to
indemnify Owner under this Section 12 for Agent's failure to complete
construction of the Project by the Completion Date (including any amount which
could be considered to be or result from a failure to complete construction of
the Project by the Completion Date, as determined by an independent arbiter or
court of law), and (C) Agent shall not be required to indemnify Owner under this
Section 12 to the extent that such amount would be excluded from Agent's
indemnity under paragraph (b) of Section 11 of the Lease.

(b)   Without in any way limiting the generality of the foregoing paragraph (a),
it is agreed that Agent shall also indemnify and hold harmless Owner and any
successor or successors from and against all Environmental Damages of any nature
relating to or in any way arising out of noncompliance with any applicable
Environmental Requirements by Agent or otherwise with respect to the Premises or
the Project, notwithstanding the fact that such noncompliance may be disclosed
in the Environmental Report or on Schedule 8.27 hereto.

(c)   In addition to Agent's obligations set forth in the foregoing paragraph
(b), Agent shall indemnify, defend, protect and hold harmless Owner, each
general and limited partner of Owner, Merrill, Merrill Lynch, Merrill Leasing,
each Assignee and their respective assigns and successors and each Affiliate
thereof, and their respective officers, directors, incorporators, shareholders,
partners, employees, agents and servants from and against any and all
Environmental Damages relating to or in any way arising out of the Project
arising from or relating to acts or omissions occurring, or circumstances or
conditions created or existing, at any time as of or prior to August 11, 2000.

(d)   The indemnification required under this Section 12 shall be upon the terms
provided in the paragraphs of Section 11 of the Lease following paragraph (b)
thereof, except that (w) this Agreement shall substitute the terms in the same
manner as described in subparagraph (a)(iii) above, (x) all references to
"Indemnified Person" in the Lease shall mean any Person entitled to indemnity
under this Section 12, (y) all references to "on or after the Effective Date" in
the Lease shall mean "on or after the date of this Agreement", and (z) there
shall be no duplication with respect to the indemnities provided hereunder and
thereunder.

(e)   The indemnities contained in this Section 12 shall survive and not be
affected by any expiration or termination of this Agreement.

(f)   Any indemnity claim under this Section 12 shall be construed as an
indemnity only and shall not be (1) construed as a guaranty of the residual
value of the Project beyond the Loss Payment or (2) the basis for the recovery
of the Acquisition Cost or any of Owner's unpaid principal, interest,
distributions or return of capital, as applicable, to any of Owner's lenders or
equity investors.

SECTION 13.   LEASEHOLD INTEREST

(a)   The provisions of paragraphs (a) and (b) of Section 28 of the Lease shall
govern the Ground Lease hereunder, except this Agreement shall substitute the
terms "Owner" for "the Lessor" and "Agent" for "the Lessee" and "Section 13" for
"Section 28".

SECTION 14.   PURCHASE OF THE PROJECT

(a)   Notwithstanding anything to the contrary contained in this Agreement, but
subject to the terms and conditions of this Section 14, (i) at any time during
the term of this Agreement, Agent (or the Guarantor as its designee) shall have
the right, upon thirty (30) days' written notice to Owner, to purchase the
Project at a price equal to the Acquisition Cost and (ii) during the continuance
of an Event of Default or Event of Project Termination and upon the written
request of Agent, which must be received by Owner not later than the later of
(A) thirty (30) days following the occurrence of such Event of Default or Event
of Project Termination, as the case may be, and (B) the date Owner or Assignee
has delivered a notice to Agent that it has identified a proposed purchaser for
the Project, Agent (or the Guarantor as its designee) shall have the right, not
later than thirty (30) Business Days after Owner's timely receipt of such
request, to purchase the Project at a price equal to its Acquisition Cost;
provided, however, that if negotiations between Owner and the purchaser
identified by Owner terminate and Owner has not identified another proposed
purchaser, Agent (or the Guarantor as its designee) may thereafter exercise its
purchase option under this paragraph (a) until such time as Owner or Assignee
delivers a notice to Agent that it has identified a new proposed purchaser for
the Project; provided further, however, that the purchase option contained in
this paragraph (a) shall only be available to Agent if (x) in the reasonable
judgment of counsel to Owner and Assignee, the purchase price and all other
amounts paid by Agent will not in the circumstances in which such payment is
made constitute a preferential payment or a voidable transfer or otherwise be
subject to recapture pursuant to the provisions of the Federal Bankruptcy Code
in a bankruptcy proceeding by or against Agent and will not otherwise result in
the payment being subject to recapture from Owner or (y) the Guarantor has
provided a guaranty of the payment of such purchase price and all other amounts
required to be paid by Agent hereunder, which guaranty shall be in form and
substance substantially similar to the Guaranty.

(b)   In connection with, and as a condition to, the purchase of the Project
pursuant to this Section 14, on the date upon which such purchase occurs, (1)
Agent shall pay to Owner an amount equal to the Acquisition Cost, plus all other
amounts payable by Agent under this Agreement, including, without limitation,
(i) all Accrued Default Obligations in the case of an Event of Default, or
Accrued Project Termination Obligations in the case of an Event of Project
Termination (in each case, after taking into account the application under the
Financing Arrangements of such purchase price and other payments made
hereunder), (ii) an amount equal to 1.75% of the Acquisition Cost in the case of
(x) an Event of Default or (y) the events described in paragraph (i) of
subsection 11.4 hereof, or an amount equal to all Unrecovered Liabilities and
Judgments in the case of an Event of Project Termination (other than the events
described in clause (y) above) and in all other cases, (iii) all amounts
described in clause (C) of the definition of Unrecovered Termination Costs, and
(iv) all transfer taxes, transfer gains taxes, mortgage recording taxes, if any,
recording and filing fees and all other similar taxes, fees, expenses and
closing costs (including reasonable attorney's fees) in connection with the
conveyance of the Project to Agent and all other amounts owing hereunder as of
the date of such purchase, and (2) when Owner transfers title, such transfer
shall be of all of Owner's right, title and interest in and to the Project, but
on an as-is, non-installment sale basis, without warranty by, or recourse to,
Owner (but free of Owner Liens) and in accordance with the applicable provisions
of this Section 14.

(c)   In addition to the Acquisition Cost plus all other amounts payable
pursuant to paragraph (b) above, Agent shall pay at the time of purchase all
other amounts payable by Agent under this Agreement, including, without
limitation, all of Owner's obligations, costs and expenses incurred in
connection with its obligations under this Agreement for which Owner may demand
payment or reimbursement pursuant to subsection 9.5 hereof (including any such
costs and expenses arising after taking into account the application under the
Financing Arrangements of the purchase price and other payments made hereunder),
all amounts payable pursuant to Section 12 hereof and all costs and expenses
(including, without limitation, attorneys' fees and expenses, commissions,
filing fees, sales or transfer taxes, transfer gains taxes, mortgage recording
tax, if any, recording and filing fees and all other similar taxes, fees,
expenses and closing costs) sustained by Owner by reason of such purchase or in
connection with the conveyance of the Project to Agent and all other amounts
owing hereunder after taking into account such purchase, and (ii) upon receipt
of such amounts, Owner shall deliver to Agent a bill of sale and deed conveying
to Agent all of Owner's interest in the Premises and the Project and, if
applicable, any Construction Document or Project Contract and, to the extent
transferable, any title insurance policies issued to Owner, along with an
assignment or termination of the Ground Lease and when Owner transfers title,
such transfer shall be on an as-is, non-installment sale basis, without warranty
by, or recourse to, Owner, but free of Owner Liens.

(d)   So long as (i) no Event of Default or Event of Project Termination has
occurred and is continuing (other than any Event of Default or Event of Project
Termination that constitutes either a Third-Party Project Event or a Termination
Event), and (ii) Agent has delivered to Owner and Assignee, within the time
period required by paragraph (a) of this Section 14, a certificate from a
Responsible Officer stating that either (A) Agent is exercising its purchase
option described in this Section 14 to effect the sale of the Project in an
arm's-length transaction to a third party purchaser that is not an Affiliate of
Agent, (B) a Third-Party Project Event has occurred and is continuing, or (C) a
Termination Event Trigger has occurred, then if the Guarantor (as Agent's
designee) elects to purchase the Project pursuant hereto, the Guarantor has the
option to assume the payment obligations of Owner with respect to any Financing
Arrangement pursuant to the terms and conditions of such Financing Arrangement,
in which case the cash portion of the purchase price to be paid by the Guarantor
pursuant to paragraphs (b) and (c) of this Section 14 shall be reduced by an
amount equal to the principal outstanding under such Financing Arrangement. In
that event, Owner and Assignee shall execute and deliver documentation
permitting the Guarantor to assume Owner's obligations under the Financing
Arrangement, and to release Owner from all obligations in respect of the
Financing Arrangement, this Agreement, the Lease, and all related documents, and
Owner and Assignee shall take all such other actions (at Agent's cost and
expense) as are reasonably necessary to permit such assumption by the Guarantor.

SECTION 15.   INTENTIONALLY DELETED

SECTION 16.   PERMITTED CONTESTS

(a)   Agent shall not be required, nor shall Owner have the right, to pay,
discharge or remove any tax, assessment, levy, fee, rent, charge or Lien, or to
comply or cause the Project to comply with any Legal Requirement applicable to
the Project or the occupancy, use or operation thereof, so long as no Potential
Default or Potential Event of Project Termination (unless such Potential Default
or Potential Event of Project Termination is reasonably capable of being cured
within the applicable grace period and could not reasonably be expected to have
a material adverse effect on (1) the construction, operation, maintenance,
leasing, ownership, use, value or regulatory status of the Project, (2) the
ability of Agent to observe and perform its obligations under the Operative
Documents, or any of the Construction Documents or the Project Contracts in a
timely manner or the ability of the Guarantor to perform its obligations under
the Guaranty in a timely manner or (3) the rights or interests of Owner or
Assignee under the Operative Documents, the Guaranty, or any of the Construction
Documents or the Project Contracts) and no Event of Default, Event of Project
Termination, Event of Loss or Termination Event exists under this Agreement,
and, in the reasonable judgment of Agent's counsel, Agent shall have reasonable
grounds to contest the existence, amount, applicability or validity thereof by
appropriate proceedings, which proceedings (i) shall not involve any danger that
the Project or any portion thereof would be subject to sale, forfeiture or loss,
as a result of failure to comply therewith, (ii) shall not affect the payment of
any sums due and payable hereunder, (iii) will not place either Owner or any
Assignee in any danger of civil liability for which it is not adequately
indemnified hereunder or subject Owner or any Assignee to any danger of criminal
liability, (iv) if involving taxes, shall suspend the collection of the taxes
(unless Agent has provided a bond for the full amount in dispute), and (v) shall
not be prohibited by the provisions of any other instrument to which Agent or
the Project is subject and shall not constitute a default thereunder (the
"Permitted Contest"). Agent shall conduct all Permitted Contests in good faith
and with due diligence and shall promptly after the final determination
(including appeals) of any Permitted Contest (or, if earlier, upon any of the
above criteria no longer being satisfied) pay and discharge all amounts which
shall be determined to be payable therein. Owner shall, at no expense to Owner,
cooperate in good faith with Agent with respect to all Permitted Contests
conducted by Agent pursuant to this Section 16.

(b)   At least ten (10) Business Days prior to the commencement of any Permitted
Contest, Agent shall notify Owner and Assignee in writing of any such proceeding
in which the amount in contest exceeds $1,000,000, and shall describe such
proceeding in reasonable detail.

SECTION 17.   SALE OR ASSIGNMENT BY OWNER

(a)   Owner shall have the right to obtain debt and equity financing for the
acquisition and ownership of the Project by selling or assigning its right,
title and interest in any or all amounts due from Agent or any third Person
under this Agreement and granting a security interest in this Agreement and the
Project to the Collateral Trustee or a lender or lenders under a Financing
Arrangement, notice of the identity of which has been given to Agent; provided
that any sale or assignment by Owner shall be made consistent with the terms of
this Agreement and shall be subject to the rights and interests of Agent under
this Agreement and the Lease.

(b)   Any Assignee shall, except as otherwise agreed by Owner and such Assignee,
have all the rights, powers, privileges and remedies of Owner hereunder, and
Agent's obligations as between itself and such Assignee hereunder shall not be
subject to any claims or defense that Agent may have against Owner. Upon written
notice to Agent of any such assignment, Agent shall thereafter make payments of
any and all sums due hereunder to Assignee, to the extent specified in such
notice, and such payments shall discharge the obligation of Agent to Owner
hereunder to the extent of such payments. Anything contained herein to the
contrary notwithstanding, no Assignee shall be obligated to perform any duty,
covenant or condition required to be performed by Owner hereunder, and any such
duty, covenant or condition shall be and remain the sole obligation of Owner,
unless and until any Assignee has taken possession of the Premises or the
Project or otherwise foreclosed upon Owner's interest therein or accepted a
conveyance in lieu of foreclosure of the Premises or the Project pursuant to a
Financing Arrangement.

SECTION 18.   GENERAL CONDITIONS

The following conditions shall be applicable throughout the term of this

Agreement:

18.1.   Survival. Except as otherwise provided in the Lease, all agreements,
representations, warranties and covenants hereunder shall expire on the
Effective Date, provided that (a) any obligations under this Agreement accrued
at the time of or related to periods prior to the Effective Date (including,
without limitation, all indemnities contained in Section 12 hereof and any
obligation to pay Unrecovered Liabilities and Judgments) shall continue in full
force and effect after the Effective Date, (b) any obligation under this
Agreement which is expressly provided to be performed after or to survive the
Effective Date shall continue in full force and effect after the Effective Date
and (c)  if any Event of Default or Event of Project Termination occurs after
the Effective Date, the provisions of subsections 11.2 and 11.4 of this
Agreement shall not be applicable and Owner and Agent shall be subject to the
rights and remedies under the Lease.

18.2.   No Waivers. No advance hereunder shall constitute a waiver of any of the
conditions of Owner's obligation to make further advances nor, in the event
Agent is unable to satisfy any such condition, shall any waiver of such
condition have the effect of precluding Owner from thereafter declaring such
inability to be an Event of Default or Event of Project Termination as herein
provided. Any advance made by Owner and any sums expended by Owner pursuant to
this Agreement shall be deemed to have been made pursuant to this Agreement,
notwithstanding the existence of an uncured Event of Default or Event of Project
Termination. No advance shall constitute a waiver of the right of Owner to
require compliance with the covenant contained in subsection 10.1 hereof with
respect to any such defects or material departures from any Plans not
theretofore approved by Owner and Assignee. No advance at a time when an Event
of Default or Event of Project Termination exists shall constitute a waiver of
any right or remedy of Owner existing by reason of such Event of Default or
Event of Project Termination, including, without limitation, the right to refuse
to make further advances.

18.3.   Advances; Approvals. All conditions of the obligation of Owner to make
advances hereunder are imposed solely and exclusively for the benefit of Owner
and Assignee and their assigns, and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Owner will refuse to make advances in the absence of
strict compliance with any or all thereof and no other Person shall, under any
circumstances, be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Owner, with the consent of
Assignee and subject to the terms and conditions of any Financing Arrangements,
at any time if in its sole discretion it deems it advisable to do so.
Inspections and approvals of any Plans and the Project and the workmanship and
materials used therein impose no responsibility or liability of any nature
whatsoever on Owner or Assignee, and no Person shall, under any circumstances,
be entitled to rely upon such inspections and approvals by Owner or Assignee for
any reason.

18.4.   No Offsets, Etc. The obligations of Agent to pay all amounts payable by
Agent pursuant to this Agreement (including specifically and without limitation
amounts payable under Section 12 hereof) and to purchase the Project when
required hereunder shall be absolute and unconditional under any and all
circumstances of any character, and such amounts shall be paid without notice,
demand, defense, set-off, deduction or counterclaim and without abatement,
suspension, deferment, diminution or reduction of any kind whatsoever, except as
herein expressly otherwise provided. The obligation of Agent to lease or
sublease and pay Basic Rent and Additional Rent and any other amounts due under
the Lease for the Project commencing upon the Effective Date is without any
warranty or representation, express or implied, as to any matter whatsoever on
the part of Owner or Assignee or any Affiliate of either, or anyone acting on
behalf of any of them.

AGENT HAS SELECTED THE PROJECT ON THE BASIS OF ITS OWN JUDGMENT. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN, UPON A TRANSFER OF OWNER'S INTEREST IN THE
PROJECT TO AGENT, NEITHER OWNER NOR ANY ASSIGNEE NOR ANY AFFILIATE OF EITHER,
NOR ANYONE ACTING ON BEHALF OF ANY OF THEM, MAKES ANY REPRESENTATION OR WARRANTY
OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, AS TO
THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS FOR USE,
MERCHANTABILITY, CONFORMITY TO SPECIFICATION, OR ANY OTHER CHARACTERISTIC, OF
THE PROJECT, OR AS TO WHETHER THE PROJECT, OR THE OWNERSHIP, USE, OCCUPANCY OR
POSSESSION THEREOF COMPLIES WITH ANY LAWS, RULES, REGULATIONS OR REQUIREMENTS OF
ANY KIND.

AS BETWEEN OWNER AND AGENT, ANY ASSIGNEE OR ANY INDEMNIFIED PERSON, AGENT
ASSUMES ALL RISKS AND WAIVES ANY AND ALL DEFENSES, SET-OFFS, RECOUPMENTS,
ABATEMENTS, DEDUCTIONS, COUNTERCLAIMS (OR OTHER RIGHTS), EXISTING OR FUTURE, AS
TO AGENT'S OBLIGATION TO PAY ALL AMOUNTS PAYABLE HEREUNDER, INCLUDING, WITHOUT
LIMITATION, ANY RELATING TO:

(A) THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS FOR USE,
MERCHANTABILITY, CONFORMITY TO SPECIFICATION, OR ANY OTHER QUALITY OR
CHARACTERISTIC OF THE PROJECT, LATENT OR NOT;

(B)   ANY SET-OFF, COUNTERCLAIM, RECOUPMENT, ABATEMENT, DEFENSE OR OTHER RIGHT
WHICH AGENT MAY HAVE AGAINST OWNER, ANY ASSIGNEE OR ANY INDEMNIFIED PERSON FOR
ANY REASON WHATSOEVER ARISING OUT OF THIS OR ANY OTHER TRANSACTION OR MATTER;

(C) ANY DEFECT IN TITLE OR OWNERSHIP OF THE PROJECT OR ANY TITLE ENCUMBRANCE NOW
OR HEREAFTER EXISTING WITH RESPECT TO THE PROJECT;

(D) ANY FAILURE OR DELAY IN DELIVERY OR ANY LOSS, THEFT OR DESTRUCTION OF, OR
DAMAGE TO THE PROJECT IN WHOLE OR IN PART, OR CESSATION OF THE USE OR POSSESSION
OF THE PROJECT BY AGENT FOR ANY REASON WHATSOEVER AND OF WHATEVER DURATION, OR
ANY CONDEMNATION, CONFISCATION, REQUISITION, SEIZURE, PURCHASE, TAKING OR
FORFEITURE OF THE PROJECT, IN WHOLE OR IN PART;

(E) ANY INABILITY OR ILLEGALITY WITH RESPECT TO THE USE, OWNERSHIP, OCCUPANCY OR
POSSESSION OF THE PROJECT BY AGENT;

(F) ANY INSOLVENCY, BANKRUPTCY, REORGANIZATION OR SIMILAR PROCEEDING BY OR
AGAINST AGENT OR OWNER OR ANY ASSIGNEE;

(G) ANY FAILURE TO OBTAIN, OR EXPIRATION, SUSPENSION OR OTHER TERMINATION OF, OR
INTERRUPTION TO, ANY REQUIRED LICENSES, PERMITS, CONSENTS, AUTHORIZATIONS,
APPROVALS OR OTHER LEGAL REQUIREMENTS;

(H) THE INVALIDITY OR UNENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER INFIRMITY
HEREIN OR ANY LACK OF POWER OR AUTHORITY OF OWNER OR AGENT TO ENTER INTO THIS
AGREEMENT; OR

(I) ANY OTHER CIRCUMSTANCES OR HAPPENING WHATSOEVER, WHETHER OR NOT SIMILAR TO
ANY OF THE FOREGOING.

AGENT HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME HEREAFTER MAY BE CONFERRED
UPON IT, BY STATUTE OR OTHERWISE, TO TERMINATE, CANCEL, QUIT, RESCIND OR
SURRENDER THIS AGREEMENT EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS HEREOF.
Each payment of any amount due hereunder made by Agent shall be final, and
Agent, without waiving any other remedies it may have, will not seek or have any
right to recover all or any part of such payment from Owner or any Assignee for
any reason whatsoever. Notwithstanding anything contained herein to the
contrary, the making of payments under this Agreement by Agent shall not be
deemed to be a waiver of any claim or claims (including claims that otherwise
would be a defense to payment or counterclaim) that Agent may assert against
Owner or any other Person. Owner agrees to repay Agent amounts paid to Owner to
the extent such payments were in error and are not required by any of the terms
and provisions of this Agreement.

18.5.   No Recourse.

   Owner's obligations hereunder are intended to be the obligations of the
limited partnership and of the corporation which is the general partner thereof
only and no recourse for the payment of any amount due from Owner under this
Agreement, the Ground Lease, any Project Contract, any Construction Document or
any other agreement contemplated hereby, or for any claim based thereon or
otherwise in respect thereof, shall be had against any limited partner of Owner
or any incorporator, shareholder, officer, director or Affiliate, as such, past,
present or future of such corporate general partner or any corporate limited
partner or of any successor corporation to such corporate general partner or to
any corporate limited partner of Owner, or against any direct or indirect parent
corporation of such corporate general partner or of any limited partner of Owner
or any other subsidiary or Affiliate or any such direct or indirect parent
corporation or any incorporator, shareholder, officer or director, as such,
past, present or future, of any such parent or other subsidiary or Affiliate.
Nothing contained in this subsection 18.5 shall be construed to limit the
exercise or enforcement, in accordance with the terms of this Agreement, the
Lease, the Ground Lease, the Project Contracts and the Construction Documents
and any other documents referred to herein, of rights and remedies against the
limited partnership or the corporate general partner of Owner or the assets of
the limited partnership or the corporate general partner of Owner.

18.6.   Notices.

(a)   All notices, offers, acceptances, approvals, waivers, requests, demands
and other communications hereunder or under any other instrument, certificate or
other document delivered in connection with the transactions described herein
shall be in writing, shall be addressed as provided below and shall be
considered as properly given (a) if delivered in person, (b) if sent by express
courier service (including, without limitation, Federal Express, Emery, DHL,
Airborne Express, and other similar express delivery services), (c) in the event
overnight delivery services are not readily available, if mailed through the
United States Postal Service, postage prepaid, registered or certified with
return receipt requested, or (d) if sent by telecopy and confirmed; provided
that, in the case of a notice by telecopy, the sender shall in addition confirm
such notice by writing sent in the manner specified in clauses (a), (b) or (c)
of this subsection 18.6. All notices shall be effective upon receipt by the
addressee; provided, however, that, if any notice is tendered to an addressee
and the delivery thereof is refused by such addressee, such notice shall be
effective upon such tender. For the purposes of notice, the addresses of the
parties shall be as set forth below; provided, however, that any party shall
have the right to change its address for notice hereunder to any other location
by giving written notice to the other party in the manner set forth herein. The
initial addresses of the parties hereto are as follows:

If to Owner:

LMB Funding, Limited Partnership
c/o ML Leasing Equipment Corp.
Controller's Office
95 Greene Street, 7th Floor
Jersey City, New Jersey 07302
Attention:   Kira Toone Meertens
Telephone:   (201) 671-0334
Facsimile:   (201) 671-4511

   With a copy to:
ML Leasing Equipment Corp.
95 Greene Street, 7th Floor
Jersey City, New Jersey 07302
Attention:   William Fuhs

Facsimile:   (201) 671-4511

If to Agent:

Lower Mount Bethel Energy, LLC
c/o PPL Global, LLC
11350 Random Hills Road, Suite 400
Fairfax, VA 22030

Attention:   Chief Counsel
Telephone:   (703) 293-2614
Facsimile:   (703) 293-9227

with a copy to Assignee at such address as such Assignee may specify by written
notice to Owner and Agent.

(b)   Owner shall within five (5) Business Days give to Agent a copy of all
notices received by Owner pursuant to any Financing Arrangement and any other
notices received with respect to the Project.

18.7.   Modifications. Neither this Agreement nor any provision hereof may be
changed, waived or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver or
termination is sought.

18.8.   Rights Cumulative. All rights, powers and remedies herein given to Owner
are cumulative and not alternative, and are in addition to all statutes or rules
of law; any forbearance or delay by Owner in exercising the same shall not be
deemed to be a waiver thereof, and the exercise of any right or partial exercise
thereof shall not preclude the further exercise thereof, and the same shall
continue in full force and effect until specifically waived by an instrument in
writing executed by Owner. All representations and covenants by Agent shall
survive the making of the advances, and the provisions hereof shall be binding
upon and inure to the benefit of the respective successors and permitted
assigns, if any, of the parties hereto. Agent may not, however, assign its
rights or obligations as agent hereunder, except as permitted by Section 25 of
the Lease.

18.9   Governing Law.   THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED IN THE
STATE OF NEW YORK. AGENT AND OWNER AGREE THAT, TO THE MAXIMUM EXTENT PERMITTED
BY THE LAWS OF THE STATE OF NEW YORK AND PENNSYLVANIA, THIS AGREEMENT, AND THE
RIGHTS AND DUTIES OF AGENT AND OWNER HEREUNDER, SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING,
WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW) IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, IN RESPECT OF
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. EACH OF AGENT AND OWNER
HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTIES, TO THE JURISDICTION
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
THE SUPREME COURT OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK IN ANY
ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND TO THE EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF AGENT AND OWNER HEREBY WAIVES AND AGREES
NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT,
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER, OR THAT THIS AGREEMENT OR ANY DOCUMENT OR ANY INSTRUMENT REFERRED TO
HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURT.
THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE OWNER OR
ANY ASSIGNEE OR AGENT FROM OBTAINING JURISDICTION OVER ONE ANOTHER IN ANY COURT
OTHERWISE HAVING JURISDICTION. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF AGENT AND OWNER AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW
OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR
JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT.
EACH OF AGENT AND OWNER AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY
CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN THIS
AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK. OWNER AND AGENT
EXPRESSLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
OWNER AND AGENT ACKNOWLEDGE THAT THE PROVISIONS OF THIS SUBSECTION 18.9 HAVE
BEEN BARGAINED FOR AND THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN CONNECTION
THEREWITH.

18.10.   Captions. The captions in this Agreement are for convenience of
reference only, and shall not be deemed to affect the meaning or construction of
any of the provisions hereof.

18.11.   Maintenance of Equity. Owner covenants that at all times during the
term of this Agreement, Owner's capitalization shall be such that at least three
percent (3%) of its capitalization (including interest required to be
capitalized in accordance with generally accepted accounting principles on the
principal outstanding on any Financing Arrangement and net of any fees paid to
the equity investors and any affiliates of the equity investors) will consist of
cash contributions from Owner's general partner and limited partners.

18.12.   Released Land.

(a)   Owner and Agent acknowledge that certain of the Land Improvement Contracts
may require that title to certain improvements relating to the Project (the
"Released Improvements") and the land on which such Released Improvements are or
will be located (the "Released Land") be transferred to the Applicable
Contracting Party pursuant to the provisions of the applicable Land Improvement
Contract.

(b)   Upon the request of Agent, and provided that no Event of Loss, Event of
Default, Potential Default, Event of Project Termination, Potential Event of
Project Termination or Termination Event under this Agreement and no Event of
Loss, Event of Default or Potential Default under the Lease has occurred and is
continuing, Owner shall cooperate with Agent to transfer the Released
Improvements and the Released Land, as applicable, to the Applicable Contracting
Party in an "as is" condition without warranty or representation of any kind,
and without recourse to Owner, if (1) such transfer is required pursuant to the
applicable Land Improvement Contract and (2) such transfer is customary in
projects similar to the Project, including the release of the Released
Improvements and/or the Released Land from the terms of the Lease, the Ground
Lease and the provisions of any Financing Arrangements; provided, however, that
after giving effect to such transfer and release (i) any such transfer or
release will not cause the Project to fail to comply with the provisions of this
Agreement, the Lease, the Construction Documents or the Project Contracts; (ii)
Owner will have sufficient rights and interests in the Released Improvements and
the Released Land as necessary to operate the Project in compliance with the
provisions of this Agreement, the Lease, the Construction Documents and the
Project Contracts, and (iii) such transfer and release will not (x) adversely
impair the fair market value, utility, residual value or remaining useful life
of the Project, or (y) materially adversely affect the ability of Agent to
observe and perform its obligations under the Operative Documents, or any of the
Construction Documents or the Project Contracts.

(c)   All Released Improvements are to be constructed in compliance with the
terms of the applicable Land Improvement Contract, and all applicable terms,
conditions and requirements of the Governmental Authorities.

(d)   Owner's release of the Released Improvements and/or the Released Land
pursuant to any applicable Land Improvement Contract shall be subject to the
satisfaction of the conditions set forth in this paragraph (d) and to the
receipt by Owner and Assignee, in each case in form and substance reasonably
satisfactory to Owner and Assignee, of the following documents:

   (i) an ALTA survey of the Premises showing a metes and bounds description of
the portion of the Premises to be released as the Released Land and a metes and
bounds description for the remainder of the Premises, which descriptions shall
correspond to the legal descriptions set forth in the title endorsements
referred to in clause (ii) below, the partial release and the deed to the
Applicable Contracting Party;

   (ii) an endorsement to mortgagee's title insurance policy and Owner's
alternative lender's policy from the Title Company insuring the validity of the
lien of the lender's mortgage, this Agreement, the Lease and the Ground Lease in
the event of recharacterization, with respect to the remainder of the Premises,
without any impairment due to the partial release, as well as a separate tax lot
endorsement;

   (iii) evidence that the Applicable Contracting Party has agreed to the legal
description of the Released Land in the partial release and deed to the
Applicable Contracting Party;

   (iv) an opinion of counsel to Agent stating that the execution of such
instrument of release is authorized or permitted by this Agreement and the
provisions of any Financing Arrangements and that all conditions precedent to
such release under this subsection 18.12 have been met; and

   (v) a copy of the fully executed deed, in recordable form, to the Applicable
Contracting Party.

[SIGNATURE PAGE FOLLOWS]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.

 

LMB FUNDING, LIMITED PARTNERSHIP

 

By: LMB Capital, Inc.,

 

Its General Partner

     

By:__________________________________

 

   Name:

 

   Title:

     

LOWER MOUNT BETHEL ENERGY, LLC

         

By:__________________________________

 

   Name:

 

   Title:

--------------------------------------------------------------------------------

TABLE OF CONTENTS

SECTION 1.

DEFINITIONS

1

       

SECTION 2.

 

APPOINTMENT OF AGENT

17

       

SECTION 3.

 

ADVANCES

20

       

SECTION 4.

 

CONDITIONS PRECEDENT TO THE INITIAL ADVANCE WITH RESPECT TO THE PROJECT

22

       

SECTION 5.

 

CONDITIONS PRECEDENT TO OWNER'S OBLIGATION TO MAKE INTERIM ADVANCES WITH RESPECT
TO THE PROJECT AFTER THE INITIAL ADVANCE

27

       

SECTION 6.

 

CONDITIONS PRECEDENT TO THE FINAL ADVANCE WITH RESPECT TO THE PROJECT

28

       

SECTION 7.

 

CONDITIONS PRECEDENT TO COMPLETION ADVANCES WITH RESPECT TO THE PROJECT

32

       

SECTION 8.

 

REPRESENTATIONS AND WARRANTIES OF AGENT

34

       

SECTION 9.

 

AFFIRMATIVE COVENANTS

42

       

SECTION 10.

 

NEGATIVE COVENANTS

52

       

SECTION 11.

 

EVENTS OF DEFAULT AND EVENTS OF PROJECT TERMINATION

54

       

SECTION 12.

 

INDEMNITIES

65

       

SECTION 13.

 

LEASEHOLD INTEREST

66

       

SECTION 14.

 

PURCHASE OF THE PROJECT

67

       

SECTION 15.

 

INTENTIONALLY DELETED

68

       

SECTION 16.

 

PERMITTED CONTESTS

68

       

SECTION 17.

 

SALE OR ASSIGNMENT BY OWNER

69

       

SECTION 18.

 

GENERAL CONDITIONS

70

Exhibit A

Form of Acquisition Certificate

Exhibit B

Form of Interim Advance Certificate

Exhibit C

Form of Certificate of Substantial Completion

Exhibit D

Form of Certificate of Increased Cost

Exhibit E

List of Project Contracts

Exhibit F

List of Permits and Project Authorizations

Exhibit G

Budget

Exhibit H

Construction Drawdown Schedule

Schedule 4(i)

Permits

Schedule 4(s)

Title Endorsements

Schedule 8.4

Litigation

Schedule 8.26

Disclosure

Schedule 8.27

Environmental Disclosure

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF ACQUISITION CERTIFICATE

LOWER MOUNT BETHEL ENERGY, LLC ("Agent"), Agent under a certain Agreement for
Lease (the "Agreement"), dated as of December 21, 2001, entered into with LMB
FUNDING, LIMITED PARTNERSHIP ("Owner"), delivers this Acquisition Certificate
pursuant to Section 4 of the Agreement. All terms used in this Certificate shall
have the meanings given to such terms in the Agreement. Agent hereby certifies
to Owner and Assignee as follows:
1.   Ground Lease. Attached hereto at Tab 1 is an original duly executed copy of
the Ground Lease (with the Premises not being subject to any Liens other than
Permitted Liens), including a true and complete copy of the metes and bounds
legal description of the Premises, and a copy of a fully executed short form or
memorandum of the Ground Lease in the appropriate form for recording in the
jurisdiction in which the Premises are located.

2.   Memorandum of Lease. Attached hereto at Tab 2 are two original counterparts
of a memorandum of the Lease in the appropriate form for recording in the
jurisdiction in which the Premises are located, executed by Agent, as lessee,
and otherwise reasonably acceptable to Owner and Assignee.

3.   Certificates of Insurance and Insurance Letter. (a) Attached hereto at Tab
3 are certificates of insurance or other evidence reasonably acceptable to Owner
and Assignee certifying that the insurance on the Project required by
subsection 9.3 of the Agreement is in effect, and (b) attached hereto at Tab 4
is a letter from the Insurance Broker certifying as to, among other things,
Agent's compliance with the provisions of subsection 9.3 of the Agreement.

4.   Taxes. All due and payable taxes and assessments applicable to the Premises
have been paid in full or are being contested by Agent as a Permitted Contest
pursuant to paragraph (a) of Section 16 of the Agreement, and all such taxes and
assessments owed by Agent (or estimated amounts thereof) are included in the
Budget.

5.   Availability of Utilities. All utility services and facilities (including,
without limitation, gas, electrical, water and sewage services, and
Interconnection Facilities) (a) which are necessary and required during the
construction period have been completed or will be available in such a manner
that construction will not be impeded by a lack thereof and (b) which are
necessary for operation and occupancy of the Project are or will be completed in
such a manner and at such a time as will assure the operation of the Project.

6.   Flood Zone. Attached hereto at Tab 5 is certification by the Surveyor on
the Survey or an official of an appropriate Governmental Authority that the
Premises are not located in any "special flood hazard area" as such term is used
in the Flood Disaster Protection Act of 1973.

7.   Permits. Except as disclosed in Section 8.26 of the Agreement for Lease,
all Permits and Governmental Actions required for the construction and operation
of the Project and for the use of the Premises in accordance with and as
contemplated by the Construction Documents, the Project Contracts, the Agreement
and the Lease have been or will be issued or obtained in such a manner that such
construction, operation and use will not be impeded or delayed by a lack thereof
and no liabilities or penalties shall result from a lack thereof. A list of the
Permits and Governmental Actions which have not been or will not be issued or
obtained as of the date of this Initial Advance is set forth on Schedule 4(i) to
the Agreement.

8.   Survey. Attached hereto at Tab 6 is the Survey complying with the
requirements of paragraph (j) of Section 4 of the Agreement.

9.   Site Plan. Attached hereto at Tab 7 is a site plan prepared on behalf of
Agent, showing the proposed location of the Project to be constructed on the
Premises.

10.   Plans. Attached hereto at Tab 8 is a copy of the Plans and, as requested
by Owner, such other specifications for the construction of the Project as are
available to Agent.

11.   Use of Proceeds, No Liens and Representations of Agent. (a) All costs and
expenses which are the subject of the Initial Advance requested have been paid
in full or will be paid in full out of the proceeds of this Initial Advance; (b)
all premiums and costs owing under any insurance policy pursuant to subsection
9.3 of the Agreement have been paid in full or will be paid in full out of the
proceeds of this Initial Advance, by the General Contractor or otherwise, and
all such insurance policies are in full force and effect; (c) there are no Liens
on the Premises that are not Permitted Liens; (d) all representations and
warranties in the Agreement, in the Lease and in the various agreements,
instruments and documents delivered to Owner by or on behalf of Agent in
connection with this Initial Advance, are and remain true and correct on and as
of the date of this Initial Advance as if made on and as of the date of this
Initial Advance (except to the extent such representations and warranties are
made expressly as to a specific earlier date, in which case such representations
and warranties were true and correct as of such earlier date); and (e) no Event
of Loss, Event of Default, Potential Default, Event of Project Termination,
Potential Event of Project Termination or Termination Event under the Agreement
has occurred and is continuing on the date this Initial Advance is to be made or
will exist by reason of giving effect to this Initial Advance.

12.   Environmental Report. Attached hereto at Tab 9 is the Environmental Report
complying with paragraph (n) of Section 4 of the Agreement.

13.   Opinions of Counsel for Agent and Guarantor. (a) Attached hereto at Tab 10
is an opinion of Orrick, Herrington & Sutcliffe LLP, counsel for Agent and
Guarantor, and (b) attached hereto at Tab 11 is an opinion of Robert W. Burke,
Esq., in-house counsel of Agent, and (c) attached hereto at Tab 12 is an opinion
of Michael A. McGrail, Esq., in-house counsel of Guarantor.

14.   Budget. Attached hereto at Tab 13 is a copy of the Budget, which Budget
(a) is true, complete and correct, (b) is accurately representative of all
expected costs of the Project, and (c) is within the dollar limit set forth in
the first sentence of subsection 2.2 of the Agreement.

15.   Request for Initial Advance. Attached hereto at Tab 14 is a duly executed
Request for Initial Advance complying with paragraph (q) of Section 4 of the
Agreement.

16.   Project Contracts; Construction Documents. Attached hereto at Tab 15 is a
fully executed and complete copy of each of the Construction Documents and the
Project Contracts which have been executed prior to the date of this Initial
Advance.

17.   Title Insurance Policy. Attached hereto at Tab 16 are copies of pro-forma
policies of insurance complying with paragraph (s) of Section 4 of the
Agreement.

18.   Representations and Warranties of Guarantor. All representations and
warranties of the Guarantor set forth in the Guaranty are and remain true and
correct on and as of the date of this Initial Advance as if made on and as of
the date of this Initial Advance (except to the extent such representations and
warranties are made expressly as to a specific earlier date, in which case such
representations and warranties were true and correct as of such earlier date),
and no default under the Guaranty has occurred and is continuing on the date
this Initial Advance is to be made or will exist by reason of giving effect to
this Initial Advance.

19.   Construction Drawdown Schedule. Attached hereto at Tab 17 is a copy of the
Construction Drawdown Schedule prepared by Agent, which reflects Agent's best
estimates as to the amount and timing of construction drawdowns on the date of
this Initial Advance.

20.   Construction Progress. Attached hereto at Tab 18 are true copies of unpaid
invoices, receipted bills and Lien waivers (to the extent such Lien waivers are
required under any Project Contract) requested by Owner or Assignee, and such
other reasonably available supporting information as Owner or Assignee may have
reasonably requested.

21.   No Other Security Interests. All materials and fixtures incorporated in
the construction of the Project have been purchased so that title thereto has
automatically been transferred to Owner, and there are no Liens on such
materials and fixtures other than Permitted Liens.

22.   Material Adverse Change. Since the date of the Private Placement
Memorandum, there has been no change in the business, assets, properties,
revenues, financial condition, operations or prospects of Agent which could
reasonably be expected to have a material adverse effect on (a) the
construction, operation, maintenance, leasing, ownership, use, value or
regulatory status of the Project, (b) the ability of Agent to observe and
perform its obligations under the Operative Documents, or any of the
Construction Documents or the Project Contracts in a timely manner or the
ability of the Guarantor to perform its obligations under the Guaranty in a
timely manner, or (c) the rights or interests of Owner or Assignee under the
Operative Documents, the Guaranty, or any of the Construction Documents or the
Project Contracts.

23.   Conditions Precedent Under Project Contracts. All conditions precedent to
the effectiveness of each Construction Document and Project Contract in effect
as of the date of this Initial Advance, have been satisfied in full (other than
those (a) relating to completion of construction of the Project, (b) which the
failure to satisfy could not reasonably be expected to have a material adverse
effect on Agent's ability to perform its obligations under the Construction
Documents and Project Contracts or (c) which will be fulfilled as a result of
Agent's execution and delivery of and performance under the Agreement).

24.   Intellectual Property Rights. All Intellectual Property Rights necessary
for the use and operation of the Project in accordance with and as contemplated
by the Construction Documents, the Project Contracts, the Agreement and the
Lease have been or, prior to the Effective Date will have been, obtained and are
or, prior to the Effective Date will be, in full force and effect. There has
been no material breach under any such Intellectual Property Rights, and there
are no pending or threatened claims or proceedings relating thereto which, if
adversely determined, could reasonably be expected to have a material adverse
effect on (a) the construction, operation, maintenance, leasing, ownership, use,
value or regulatory status of the Project, (b) the ability of Agent to observe
and perform its obligations under the Operative Documents, or any of the
Construction Documents or the Project Contracts in a timely manner or the
ability of the Guarantor to perform its obligations under the Guaranty in a
timely manner, or (c) the rights or interests of Owner or Assignee under the
Operative Documents, the Guaranty, or any of the Construction Documents or the
Project Contracts.

25.   Required Easements. The Required Easements have been or, prior to the
Effective Date will be, obtained and are or, prior to the Effective Date will
be, in full force and effect and constitute all easements, rights-of-way and
licenses contemplated to be in place under the Construction Documents, the
Project Contracts, the Agreement and the Lease as of the date of this Initial
Advance. There has been no material breach under any such Required Easements,
and there are no pending or, to the best of Agent's knowledge, threatened claims
or proceedings relating thereto which, if adversely determined, could reasonably
be expected to have a material adverse effect on (a) the construction,
operation, maintenance, leasing, ownership, use, value or regulatory status of
the Project, (b) the ability of Agent to observe and perform its obligations
under the Operative Documents, or any of the Construction Documents or the
Project Contracts in a timely manner or the ability of the Guarantor to perform
its obligations under the Guaranty in a timely manner, or (c) the rights or
interests of Owner or Assignee under the Operative Documents, the Guaranty, or
any of the Construction Documents or the Project Contracts.

26.   Appraisal. Attached hereto at Tab 19 is an appraisal prepared by the
Appraiser complying with paragraph (cc) of Section 4 of the Agreement.

27.   Opinion of Local Pennsylvania Counsel. Attached hereto at Tab 20 is an
opinion of Morgan, Lewis & Bockius LLP, special Pennsylvania counsel.

28.   Additional Matters. Attached hereto at Tab 21 are such other documents and
legal matters in connection with a request for the Initial Advance as are
reasonably requested by Owner or Assignee.

Dated: ______________, ____.

 

LOWER MOUNT BETHEL ENERGY, LLC

         

By:__________________________________

 

   Name:

 

   Title:

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF INTERIM ADVANCE CERTIFICATE

LOWER MOUNT BETHEL ENERGY, LLC ("Agent"), Agent under a certain Agreement for
Lease (the "Agreement"), dated as of December 21, 2001, entered into with LMB
FUNDING, LIMITED PARTNERSHIP ("Owner"), delivers this Interim Advance
Certificate pursuant to Section 5(A) of the Agreement. All terms used in this
Certificate shall have the meanings given to such terms in the Agreement. Agent
hereby certifies to Owner and Assignee as follows:

1.   Use of Proceeds and Continuing Representations of Agent. (a) All costs and
expenses which are the subject of the Interim Advance requested have been paid
in full or will be paid in full out of the proceeds of this Interim Advance; (b)
all premiums and costs owing under any insurance policy pursuant to subsection
9.3 of the Agreement have been paid in full by the General Contractor or
otherwise or will be paid in full out of the proceeds of this Interim Advance,
and all such insurance policies are in full force and effect; (c) all
representations and warranties in the Agreement (except for the representations
and warranties made in subsections 8.9 and 8.26 thereof which shall not be made
by Agent), in the Lease, and in the various agreements, instruments and
documents delivered to Owner by or on behalf of Agent in connection with this
Interim Advance, are and remain true and correct in all material respects on and
as of the date of this Interim Advance as if made on and as of the date of this
Interim Advance (except to the extent such representations and warranties are
made expressly as to a specific earlier date, in which case such representations
and warranties were true and correct as of such earlier date); and (d) no Event
of Loss, Event of Default, Potential Default, Event of Project Termination,
Potential Event of Project Termination or Termination Event under the Agreement,
or default under any Project Contract or Construction Document has occurred and
is continuing on the date this Interim Advance is to be made or will exist by
reason of giving effect to this Interim Advance.

2.   Construction Progress. Attached hereto at Tab 1 are (a) all Monthly
Progress Reports (as defined in the EPC Contract) delivered under the EPC
Contract and requested by Owner or Assignee, (b) true copies of unpaid invoices,
receipted bills and Lien waivers (to the extent such Lien waivers are required
under the EPC Contract or any other Project Contract) requested by Owner or
Assignee, and such other reasonably requested supporting information as has been
requested by Owner or Assignee and (c) a certificate from Agent certifying to
Owner and Assignee the amount of Unreimbursed Project Costs outstanding on the
date of this Interim Advance.

3.   No Other Security Interests. All materials and fixtures incorporated in the
construction of the Project have been purchased so that title thereto has
automatically been transferred to Owner pursuant to the EPC Contract, and there
are no Liens on such materials and fixtures other than Permitted Liens.

4.   Request for Interim Advance. Attached hereto at Tab 2 is a duly executed
Request for Interim Advance complying with paragraph (e) of Section 5(A) of the
Agreement.

5.   Representations and Warranties of Guarantor. All representations and
warranties of the Guarantor in the Guaranty (except for the representations and
warranties made in Sections 4.5, 4.6, 4.8 and 4.9 thereof which shall not be
made by the Guarantor) are and remain true and correct in all material respects
on and as of the date of this Interim Advance as if made on and as of the date
of this Interim Advance (except to the extent such representations and
warranties are made expressly as to a specific earlier date, in which case such
representations and warranties were true and correct as of such earlier date),
and no default under the Guaranty has occurred and is continuing on the date
this Interim Advance is to be made or will exist by reason of giving effect to
this Interim Advance.

6.   Satisfactory Title. Attached hereto at Tab 3 is a notice of title
continuation or date-down endorsement issued by the Title Company and complying
with paragraph (g) of Section 5(A) of the Agreement.

7.   List of Project Authorizations. Attached hereto at Tab 4 is a list of all
certificates, Permits, licenses, authorizations and approvals required by all
applicable law in effect on the date of this Interim Advance in substitution for
Exhibit F to the Agreement pursuant to subsection 8.18 of the Agreement.

Dated: ______________, ____.

 

LOWER MOUNT BETHEL ENERGY, LLC

         

By:__________________________________

 

   Name:

 

   Title:

--------------------------------------------------------------------------------

EXHIBIT C

FORM OF CERTIFICATE OF SUBSTANTIAL COMPLETION

LOWER MOUNT BETHEL ENERGY, LLC ("Agent"), Agent under a certain Agreement for
Lease (the "Agreement"), dated as of December 21, 2001, entered into with LMB
FUNDING, LIMITED PARTNERSHIP ("Owner"), delivers this Certificate of Substantial
Completion pursuant to Section 6 of the Agreement. All terms used in this
Certificate shall have the meanings given to such terms in the Agreement. Agent
hereby certifies to Owner and Assignee as follows:

1.   Payment of All Costs. The Final Advance is sufficient to provide for the
payment of all costs of constructing the Project (other than (a) the cost of
completing any open Punch List (as defined in the EPC Contract) items), (b)
Unreimbursed Project Costs not designated by Agent for payment by the Final
Advance and (c) those estimated costs in connection with the designing,
constructing, equipping and installing of the Project that are not yet due and
which will be included as part of a Completion Advance in an amount not to
exceed the amount of such estimate, provided that (i) the Available Commitment
remaining after the Final Advance is equal to or exceeds the aggregate amount of
all such estimated costs and (ii) Agent certifies, based upon its reasonable
expectations, that (x) all costs in connection with the designing, constructing,
equipping and installing of the Project that are not yet due will not exceed
such estimated costs or (y) to the extent that such costs will exceed such
estimated costs, such excess costs are Unreimbursed Project Costs).

2.   Construction and Equipping of the Project. The Project (exclusive of Punch
List (as defined in the EPC Contract) items), (a) has been completed (including
all Performance Tests (as defined in the EPC Contract) required for Substantial
Completion under the EPC Contract) in all material respects in accordance with
the Plans, the terms of the Construction Documents and the Project Contracts,
and (b) has been constructed in accordance with generally accepted engineering
and construction practices.

3.   Permits. All Permits and Governmental Actions required for the occupancy,
use and operation of the Project in the manner contemplated in paragraph 2 above
and in accordance with and as contemplated by the Construction Documents, the
Project Contracts and the Lease have been issued or obtained and are in full
force and effect.

4.   Liens. (a) The Project has been completed in the manner contemplated in
paragraph 2 above free of all Liens, except for Permitted Liens (all of which
Permitted Liens are itemized in Tab 1 attached hereto, as to the nature, amount,
claimant and status thereof, and which Permitted Liens do not include any
mechanics' Liens other than those mechanics' Liens that are (i) to be satisfied
or discharged out of the proceeds of this Final Advance or a Completion Advance
or (ii) subject to a Permitted Contest and bonded or otherwise secured to the
satisfaction of Owner and Assignee); (b) there are no claims outstanding with
respect to any Construction Document or Project Contract (other than claims
which are itemized in Tab 2 attached hereto, as to the nature, amount, claimant
and status thereof and which claims are bonded or otherwise secured to the
satisfaction of Owner and Assignee); and (c) [there are no current Permitted
Contests] [OR] [the Permitted Contests in existence as of the date of this Final
Advance are itemized in Tab 3 attached hereto, as to the nature, amount,
claimant and status thereof].

5.   Final Survey. Attached hereto at Tab 4 is the Final Survey complying with
the requirements of paragraph (f) of Section 6 of the Agreement.

6.   Utilities. Connection has been made to all appropriate utility facilities
(including Interconnection Facilities) and the Project is capable of operation
in the manner contemplated in paragraph 2 above and in accordance with and as
contemplated by the Construction Documents, the Project Contracts and the Lease.

7.   Use of Proceeds and Continuing Representations of Agent. (a) All costs and
expenses which are the subject of the Final Advance requested have been paid in
full or will be paid in full out of the proceeds of this Final Advance; (b) all
premiums and costs owing under any insurance policy pursuant to subsection 9.3
of the Agreement have been paid in full by the General Contractor or otherwise
or will be paid in full out of the proceeds of this Final Advance, and all such
insurance policies are in full force and effect; (c) all representations and
warranties in the Agreement (except for the representations and warranties made
in subsections 8.9 and 8.26 thereof which shall not be made by Agent), in the
Lease, and in the various agreements, instruments and documents delivered to
Owner by or on behalf of Agent in connection with this Final Advance are and
remain true and correct in all material respects on and as of the date of this
Final Advance as if made on and as of the date of this Final Advance (except to
the extent such representations and warranties are made expressly as to a
specific earlier date, in which case such representations and warranties were
true and correct as of such earlier date); and (d) no Event of Loss, Event of
Default, Potential Default, Event of Project Termination, Potential Event of
Project Termination or Termination Event under the Agreement has occurred and is
continuing on the date this Final Advance is to be made or will exist by reason
of giving effect to this Final Advance.

8.   Request for Final Advance. Attached hereto at Tab 5 is a duly executed
Request for Final Advance complying with paragraph (i) of Section 6 of the
Agreement.

9.   Satisfactory Title. Attached hereto at Tab 6 is a notice of title
continuation or endorsement issued by the Title Company and complying with
paragraph (j) of Section 6 of the Agreement.

10.   Representations and Warranties of Guarantor. All representations and
warranties of the Guarantor in the Guaranty (except for the representations and
warranties made in Sections 4.5, 4.6, 4.8 and 4.9 thereof which shall not be
made by the Guarantor) are and remain true and correct in all material respects
on and as of the date of this Final Advance as if made on and as of the date of
this Final Advance (except to the extent such representations and warranties are
made expressly as to a specific earlier date, in which case such representations
and warranties were true and correct as of such earlier date), and no default
under the Guaranty has occurred and is continuing on the date this Final Advance
is to be made or will exist by reason of giving effect to this Final Advance.

11.   Commercial Operation. (a) Commercial Operation of the Project has been
achieved, including, without limitation, satisfaction of (i) the Minimum
Performance Guarantees, (ii) the Emission Guarantees and (iii) the Noise
Compliance Guarantee (as each such term is defined in the EPC Contract), in each
case according to the procedures set forth in the EPC Contract; (b) no defective
or uncompleted work exists that could reasonably be expected to materially and
adversely affect the generation of electricity from the Project; (c) the Project
as constructed complies in all material respects with all Governmental Actions;
and (d) the Project is capable of operating in a manner consistent with prudent
industry practices, all applicable Permits and Legal Requirements and in
accordance with the terms of the Agreement, the Lease and the Project Contracts.
[In addition, only if Agent has elected not to request a Completion Advance,
Agent shall satisfy the requirements of paragraph (g) of Section 7 of the
Agreement.]

12.   Environmental Compliance. All compliance tests, emissions tests, and
certifications and other actions required by any Environmental Requirements as a
precondition to Commercial Operation of the Project (including, without
limitation, the performance criteria, emissions standards and reliability
criteria required by the EPC Contract) has been successfully completed and all
filings, notices and other submissions required under such Environmental
Requirements shall have been fully and accurately completed and submitted to
applicable Governmental Authorities, as required by applicable Legal
Requirements.

13.   Intellectual Property Rights. All Intellectual Property Rights necessary
for the use and operation of the Project in accordance with and as contemplated
by the Project Contracts, the Agreement and the Lease have been obtained and are
in full force and effect.

14.   Easements. The Easements have been obtained and are in full force and
effect and are not subject to any Liens other than Permitted Liens and
constitute all easements, rights-of-way (i) contemplated to be in place under
the Construction Documents, the Project Contracts, the Agreement and the Lease
as of the date of this Final Advance and (ii) which are necessary for Agent's
performance of its obligations under this Agreement, the Lease, the Construction
Documents and the Project Contracts.

15.   Construction Progress. Attached hereto at Tab 7 are (a) copies of all
Monthly Progress Reports (as defined in the EPC Contract) delivered under the
EPC Contract and requested by Owner or Assignee, (b) true copies of unpaid
invoices, receipted bills and Lien waivers (to the extent such Lien waivers are
required under the EPC Contract or any other Project Contract) requested by
Owner or Assignee, and such other reasonably available supporting information as
shall have been reasonably requested by Owner or Assignee and (c) a certificate
from Agent certifying to Owner and Assignee the amount of Unreimbursed Project
Costs outstanding on the date of this Final Advance.

16.   No Other Security Interests. All materials and fixtures incorporated in
the construction of the Project have been purchased so that title thereto has
automatically been transferred to Owner pursuant to the EPC Contract, and there
are no Liens on such materials and fixtures other than Permitted Liens.

17.   Evidence of EWG Status. Attached hereto as Tab 8 are copies of the filing
of an application for determination that Owner is an EWG under Section 32 of the
1935 Act, together with a determination issued by FERC of such EWG status.

--------------------------------------------------------------------------------

18.   List of Project Authorizations. Attached hereto at Tab 9 is a list of all
certificates, Permits, licenses, authorizations and approvals required by all
applicable law in effect on the date of this Final Advance in substitution for
Exhibit F to the Agreement pursuant to subsection 8.18 of the Agreement.

Dated: ______________, _____.

 

LOWER MOUNT BETHEL ENERGY, LLC

         

By:__________________________________

 

   Name:

 

   Title:

EXHIBIT D

FORM OF CERTIFICATE OF INCREASED COST

   LOWER MOUNT BETHEL ENERGY, LLC ("Agent"), Agent under a certain Agreement for
Lease (the "Agreement"), dated as of December 21, 2001, entered into with LMB
FUNDING, LIMITED PARTNERSHIP ("Owner"), delivers this Certificate of Increased
Cost pursuant to Section 7 of the Agreement. All terms used in this Certificate
shall have the meanings given to such terms in the Agreement. Agent hereby
certifies to Owner and Assignee as follows:

1.   Payment of All Costs. The Completion Advance is sufficient to provide for
the payment of (a) all costs of completing any open Punch List (as defined in
the EPC Contract) items, and (b) all costs in connection with the designing,
constructing, equipping and installing of the Project that were not included as
part of the Final Advance; provided that all such costs fall within the limits
of the Budget.

2.   Use of Proceeds and Continuing Representations of Agent. (a) All costs and
expenses which are the subject of the Completion Advance requested have been
paid in full or will be paid in full out of the proceeds of this Completion
Advance; (b) all premiums and costs owing under any insurance policy pursuant to
subsection 9.3 of the Agreement have been paid in full by the General Contractor
or otherwise or will be paid in full out of the proceeds of this Completion
Advance, and all such insurance policies are in full force and effect; (c) all
representations and warranties in the Agreement (except for the representations
and warranties made in subsections 8.9 and 8.26 thereof which shall not be made
by Agent), in the Lease, and in the various agreements, instruments and
documents delivered to Owner by or on behalf of Agent in connection with this
Completion Advance are and remain true and correct in all material respects on
and as of the date of this Completion Advance as if made on and as of the date
of this Completion Advance (except to the extent such representations and
warranties are made expressly as to a specific earlier date, in which case such
representations and warranties were true and correct as of such earlier date);
and (d) no Event of Loss, Event of Default, Potential Default, Event of Project
Termination, Potential Event of Project Termination or Termination Event under
the Agreement has occurred and is continuing on the date this Completion Advance
is to be made or will exist by reason of giving effect to this Completion
Advance.

3.   Request for Completion Advance. Attached hereto at Tab 1 is a duly executed
Request for Completion Advance complying with paragraph (d) of Section 7 of the
Agreement.

4.   Satisfactory Title. Attached hereto at Tab 2 is a notice of title
continuation or endorsement issued by the Title Company complying with paragraph
(e) of Section 7 of the Agreement.

5.   Representations and Warranties of Guarantor. All representations and
warranties of the Guarantor in the Guaranty (except for the representations and
warranties made in Sections 4.5, 4.6, 4.8 and 4.9 thereof which shall not be
made by the Guarantor) are and remain true and correct in all material respects
on and as of the date of this Completion Advance as if made on and as of the
date of this Completion Advance (except to the extent such representations and
warranties are made expressly as to a specific earlier date, in which case such
representations and warranties were true and correct as of such earlier date),
and no default under the Guaranty has occurred and is continuing on the date
this Completion Advance is to be made or will exist by reason of giving effect
to this Completion Advance.

6.   Final Completion. (a) Final Completion (as defined in the EPC Contract) has
occurred as evidenced by the Notice of Final Completion (as defined in the EPC
Contract) and the certificate of Final Completion attached hereto at Tab 3; (b)
[either] [the Project has satisfied the Output Guarantee (as defined in the EPC
Contract)] [or] [the General Contractor has paid the OutPut Buydown Amount (as
defined in the EPC Contract)]; and (c) [either] [the Project has satisfied the
Heat Rate Guarantee (as defined in the EPC Contract)] [or] [the General
Contractor has paid the Heat Rate Buydown Amount (as defined in the EPC
Contract)].

7.   Construction Progress. Attached hereto at Tab 4 are (a) copies of all
Monthly Progress Reports (as defined in the EPC Contract) delivered under the
EPC Contract and requested by Owner or Assignee and (b) true copies of unpaid
invoices, receipted bills and Lien waivers (to the extent such Lien waivers are
required under the EPC Contract or any other Project Contract) requested by
Owner or Assignee, and such other reasonably available supporting information as
may have reasonably been requested by Owner or Assignee.

8.   No Other Security Interests. All materials and fixtures incorporated in the
construction of the Project have been purchased so that title thereto has vested
solely in Owner, and there are no Liens on such materials and fixtures other
than Permitted Liens.

9.   List of Project Authorizations. Attached hereto at Tab 5 is a list of all
certificates, Permits, licenses, authorizations and approvals required by all
applicable law in effect on the date of this Completion Advance in substitution
for Exhibit F to the Agreement pursuant to subsection 8.18 of the Agreement.

Dated: ______________, _____.

 

LOWER MOUNT BETHEL ENERGY, LLC

         

By:__________________________________

 

   Name:

   

--------------------------------------------------------------------------------

EXHIBIT E

LIST OF PROJECT CONTRACTS

 * The Engineering, Procurement and Construction Contract, dated as of December
   20, 2001, between Owner and the General Contractor.

 * The Guaranty, dated as of December 20, 2001, by Foster Wheeler LLC to Owner,
   guaranteeing the obligations of the General Contractor under the EPC
   Contract.

 * The Engineering Services Agreement, dated as of September 21, 2001, between
   Owner and the General Contractor, as amended by an Amended and Restated
   Engineering Services Agreement, dated as of November 19, 2001, between Owner
   and the General Contractor.

 * The Power Transformers Contract, dated as of December 21, 2001, between
   Siemens Power Transmission & Distribution, Inc. and Owner.

 * The Combined Cycle Power Island Equipment Supply Contract, dated as of August
   11, 2000, between Siemens Westinghouse Power Corporation and Owner (as
   assigned to the General Contractor in connection with the EPC Contract).

 * The Ground Lease Agreement, dated as of December 21, 2001, between Agent, as
   ground lessor, and Owner, as ground lessee.

 * The Operation and Maintenance Agreement for the Lower Mount Bethel Energy
   Project Sewage Treatment Facility, dated July 13, 2001, between Lower Mount
   Bethel Township and PPL Generation, LLC.

 * The Land Development Improvements Agreement to be entered into by and between
   Lower Mount Bethel Township and Owner.

 * The Interconnection Service Agreement, dated as of August 8, 2001, between
   PJM Interconnection, L.L.C. and Owner.

 * The Memorandum of Understanding, dated December 3, 1999, between PPL
   Corporation (successor-in-interest to PP&L Resources, Inc.) and Agent, as
   assigned to PPL Martins Creek, LLC pursuant to an Assignment and Assumption
   Agreement dated as of the date hereof.

 * The Reimbursement, Construction and Ownership Agreement to be entered into by
   and between Owner and PPL Interstate Energy Company.

 * The Gas Transportation Agreement to be entered into by and between PPL
   Interstate Energy Company and Owner.
   
   
   --------------------------------------------------------------------------------
   

EXHIBIT F

LIST OF PERMITS AND PROJECT AUTHORIZATIONS

 

 

Issuing

       

Permit

Agency

Description

Need

 

Status

           

Alternate Fuels Capability

DOE

Baseload facilities fueled by natural gas

Construction

 

Self certifying

       

10-12-01

           

Toxic Chemical Release

EPA

Actual Release of Hazardous Materials

Operation

 

To be filed if necessary

Inventory Reporting

                     

Notice of Proposed

FAA

Construction of Object Capable of

Construction

 

To be filed

Construction or Alteration

 

Affecting Navigable Air Space

                 

Air Quality Plan Approval

PDEP

Air Quality permitting and new source review

Construction

 

Permit # 48-328-004 10-29-01; under appeal

         

Air Quality Operating Permit

PDEP

Operation of an air contamination source

Operation

 

To be filed

Title IV Acid Rain

PDEP

Fossil fuel generation units > 25 MW

Operation

 

To be filed

Operating Permit

         

Air Quality Plan Approval

PDEP

Air quality permitting to convert Martins

Creek Station combustion turbines from oil to gas-fired

Operation

 

To be filed

           

Air Quality Operating Permit

Modification

PDEP

Modification to PM-10 limit for Auxiliary

Boiler 4B at Martins Creek Station

Operation

 

Permit # 48-00011

3-31-01

           

ERCs for NOx and VOC

PDEP

Emission reduction credits

Operation

 

To be obtained

Allowances for NOx

PDEP

Emission allowances

Operation

 

To be obtained

Allowances for SOx

EPA

Emission allowances

Operation

 

To be obtained

           

Water Quality Management Plan

Part II Permit

PDEP

Wastewater treatment facility modifications

Construction

 

To be filed

           

NPDES Permit for Industrial

Wastewater

PDEP

Discharge of Industrial Wastewater

Operation

 

Permit # PA 0012823

8-6-01

           

Preparedness, Prevention

And Contingency Plan

PDEP

Required as part of NPDES permit

Operation

 

To be filed

           

NPDES General Storm

Water Construction Permit

PDEP

Discharge of Storm Water

Construction

 

Issued

           

Sewage Disposal Permit

PDEP

On site sanitary sewage disposal

Operation

 

Permit # T092557

8-29-01

           

Public Water Supply

PDEP

Potable water supply distribution

Construction

 

To be filed

           

Storage Tanks

PDEP

Underground or above ground

storage tanks

Construction

 

To be filed

           

Spill Prevention Control

and Countermeasure Plan

PDEP

Prevention of releases of regulated

substances from tanks

Operation

 

To be filed

           

Consumptive Water Use

DRBC

Withdrawal of water

Construction

 

Docket # D-99-54

3-7-00

           

Consumptive Water Use

DRBC

Drought Operating Plan

Operation

 

To be filed

           

Stack Approval

PDOT

Construction of object affecting

navigable air space

Construction

 

To be filed

           

Archeological and Historical

Review

PHMC

Activities that impact archeological or

historical resources

Construction

 

4-6-98

           

Review of Threatened or

Endangered Species

PDNI

 

Construction

 

8-30-99

           

Fire Safety Approval

Local Fire

Marshal

Issuance of building or occupancy permits

Construction

Operation

 

To be filed

           

Site Plan Approval

LMBT/NC

Site Development

Construction

 

10-26-01

           

Special Exception to Zoning

LMBT

 

Construction

 

2-21-01; as modified

Ordinance

       

on 7-13-01; under

         

appeal

           

Building Permit

LMBT

Construction of foundations and structures

Construction

 

11/30/01

           

Occupancy Permit

LMBT

Construction and occupancy of

Operation

 

To be filed

   

foundations and structures

                 

E&S Control Plan

NC

Soil erosion and sedimentation control

Construction

 

10-4-01

           

Building Plan Approval

PDLI

Building Plans

Construction

 

To be filed

           

Occupancy Permit

PDLI

Conformance with Approved Building Plans

Operation

 

To be filed

           

Generator Identification

Number

PDEP/EPA

Hazardous Waste Generation

Operation

 

To be filed

           

Section 32 of PUHCA

FERC

Exemption of wholesale generators from holding company regulation

Operation

 

To be filed

           

Section 205 of FPA

FERC

Market-based rate authority/market-based tariff

Operation

 

To be filed

           

FPA

FERC

Disclaimer of jurisdiction over passive owner Of FERC jurisdictional facilities

Operation

 

To be filed

           

Interconnection Approvals

PJM

Interconnection with power grid

Operation

 

To be filed

           

ACOE

Army Corps of Engineers

DOE

Department of Energy

EPA

US Environmental Protection Agency

FAA

Federal Aviation Administration

FERC

Federal Energy Regulatory Commission

FPA

Federal Power Act

NPDES

National Pollutant Discharge Elimination System Program

PHMC

Pennsylvania Historical and Museum Commission

PDEP

Pennsylvania Department of Environmental Protection

PDLI

Pennsylvania Department of Labor and Industry

PJM

PJM Interconnection, LLC

PNDI

Pennsylvania Natural Diversity Inventory

PDOT

Pennsylvania Department of Transportation

PUHCA

Public Utility Holding Company Act

DRBC

Delaware River Basin Commission

LMBT

Lower Mount Bethel Township

NC

Northampton County

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This Agreement for Lease is Confidential and Proprietary

EXHIBIT G

BUDGET

   

Item

Amount ($OOOs)

Power Island Costs

$ 132,924

EPC Costs

196,865

Gas Line Costs

7,100

Interconnection Costs

1,750

Substation Costs

3,352

Infrastructure Services

2,010

NOX / VOX Off-sets

750

Spare Parts

5,011

Start-Up Costs

690

Contingency

23,688

Total Construction Costs

$ 374,139

Total Financing Costs

$ 5,803

Total Other Costs

$ 75,102

TOTAL COSTS

$ 455,044

 

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This Agreement for Lease is Confidential and Proprietary

EXHIBIT H

CONSTRUCTION DRAWDOWN SCHEDULE

   

Date

Construction Expenses ($OOOs)

Dec-01

$ 163,610

Jan-02

16,698

Feb-02

19,902

Mar-02

21,875

Apr-02

14,417

May-02

16,743

Jun-02

29,093

Jul-02

20,106

Aug-02

20,745

Sep-02

9,911

Oct-02

10,129

Nov-02

8,049

Dec-02

25,723

Jan-03

7,956

Feb-03

7,493

Mar-03

563

Apr-03

6,401

May-03

1,142

Jun-03

25,555

Jul-03

       

813

Aug-03

5 72

Sep-03

143

Oct-03

8,793

Nov-03

-

Dec-03

18,608

TOTAL

$ 455,044

 

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SCHEDULE 4(i)
PERMITS

 

Toxic Chemical Release Inventory Reporting

Notice of Proposed Construction or Alteration

Air Quality Operating Permit

Title IV Acid Rain Operating Permit

Air Quality Plan Approval (to convert Martins Creek Station combustion turbines
from oil to gas-fired)

ERCs for NOx and VOC

Allowances for NOx

Allowances for SOx

Water Quality Management Plan Part II Permit

Preparedness, Prevention, and Contingency Plan

Public Water Supply

Storage Tanks

Spill Prevention Control and Countermeasure Plan

Consumptive Water Use (Drought Operating Plan)

Stack Approval

Fire Safety Approval

Occupancy Permit

Building Plan Approval

Occupancy Permit

Generator Identification Number

Section 32 of PUHCA

Section 205 of FPA

FPA

Interconnection Approvals

--------------------------------------------------------------------------------

SCHEDULE 4(s)

LIST OF TITLE ENDORSEMENTS

 

 

ALTA 9 Comprehensive Endorsement

Survey Endorsement

Land Same as Survey Endorsement

Access Endorsement

Address Endorsement

Due Execution Endorsement

Separate Tax Lot Endorsement

Environmental Protection Lien Endorsement

Internal Contiguity Endorsement

Pending Disbursements

Recharacterization (Lessor's policy only)

Special Synthetic Lease Endorsement

--------------------------------------------------------------------------------

SCHEDULE 8.4

LITIGATION

 

 * PPL Martins Creek, LLC and Lower Mount Bethel Energy, LLC v. Lower Mount
   Bethel Township Zoning Hearing Board v. Robert Taylor, Inc. and William
   A.Humphries, III. (Intervenors), C0048CV2001002703 (The appeal to the Zoning
   Ordinance Special Exception; all conflicts with the Township were settled
   pursuant to the court approved stipulation with regard to the noise
   condition).
   
   

 * Robert Taylor and Mona Taylor v. Lower Mount Bethel Township, PPL Martins
   Creek, LLC and Lower Mount Bethel Energy, LLC, C0048CV2001006573 (the
   nuisance action).

 * The Air Quality Plan Approval which was issued by the Commonwealth of
   Pennsylvania Department of Environmental Protection on October 29, 2001 was
   appealed on November 29, 2001.

 * The Building Permit, which was issued by Lower Mount Bethel Township on
   November 30, 2001, may be appealed.

 

 

--------------------------------------------------------------------------------

SCHEDULE 8.26

DISCLOSURE

 

 

 * The Air Quality Plan Approval which was issued by the Commonwealth of
   Pennsylvania Department of Environmental Protection on October 29, 2001 was
   appealed on November 29, 2001.

 * The Building Permit which was issued by Lower Mount Bethel Township on
   November 30, 2001 may be appealed.

 * The Zoning Ordinance Special Exception which was issued on February 21, 2001,
   as modified by Stipulation on July 13, 2001, is currently the subject of an
   appeal to the Northampton County Court of Common Pleas regarding the noise
   condition.

 

--------------------------------------------------------------------------------

SCHEDULE 8.27

ENVIRONMENTAL DISCLOSURE

 

 

 * The Air Quality Plan Approval which was issued by the Commonwealth of
   Pennsylvania Department of Environmental Protection on October 29, 2001 was
   appealed on November 29, 2001.
   
   

 * The Zoning Ordinance Special Exception which was issued on February 21, 2001,
   as modified by Stipulation on July 13, 2001, is currently the subject of an
   appeal to the Northampton County Court of Common Pleas regarding the noise
   condition.