Exhibit 10.2

                                                                 EXECUTION COPY


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                            FACILITY LEASE AGREEMENT

                            Dated as of May 25, 2004

                                     between

                              SE RAVENSWOOD TRUST,
                                 as Owner Lessor

                                       and

                            KEYSPAN-RAVENSWOOD, LLC,
                                    as Lessee



================================================================================

CERTAIN  OF THE RIGHT,  TITLE AND  INTEREST  OF THE OWNER  LESSOR IN AND TO THIS
LEASE  AND THE RENT DUE AND TO  BECOME  DUE  HEREUNDER  HAVE  BEEN  ASSIGNED  AS
COLLATERAL  SECURITY  TO, AND ARE  SUBJECT TO A SECURITY  INTEREST  IN FAVOR OF,
Wells Fargo Bank Northwest,  N.A., NOT IN ITS INDIVIDUAL  CAPACITY BUT SOLELY AS
INDENTURE  TRUSTEE UNDER AN INDENTURE OF TRUST,  MORTGAGE,  ASSIGNMENT OF LEASES
AND  RENTS  AND  SECURITY  AGREEMENT,  DATED AS OF MAY 25,  2004,  BETWEEN  SAID
INDENTURE  TRUSTEE,  AS SECURED  PARTY,  AND THE OWNER  LESSOR,  AS DEBTOR.  SEE
SECTION 21 HEREOF FOR  INFORMATION  CONCERNING THE RIGHTS OF THE ORIGINAL HOLDER
AND THE HOLDERS OF THE VARIOUS COUNTERPARTS HEREOF.


<PAGE>


<TABLE>

                                TABLE OF CONTENTS

                                                                                                                Page
                                                                                                                ----
<CAPTION>



<S>       <C>                                                                                                   <C>
SECTION 1. DEFINITIONS............................................................................................1


SECTION 2. LEASE OF THE FACILITY..................................................................................1

         Section 2.1. Lease  1
         Section 2.2. Title; Personal Property....................................................................2

SECTION 3. FACILITY LEASE TERM AND RENT...........................................................................2

         Section 3.1. Basic Lease Term............................................................................2
         Section 3.2. Rent........................................................................................2
         Section 3.3. Supplemental Lease Rent.....................................................................3
         Section 3.4. Adjustment of Lease Schedules...............................................................4
         Section 3.5. Manner of Payments..........................................................................6

SECTION 4. DISCLAIMER OF WARRANTIES; RIGHT OF QUIET ENJOYMENT.....................................................6

         Section 4.1. Disclaimer of Warranties....................................................................6
         Section 4.2. Quiet Enjoyment.............................................................................7

SECTION 5. RETURN OF FACILITY.....................................................................................7

         Section 5.1. Return 7
         Section 5.2. Condition Upon Return.......................................................................8
         Section 5.3. Environmental Reports; Clean-up.............................................................9

SECTION 6. LIENS.................................................................................................10


SECTION 7. MAINTENANCE; REPLACEMENTS OF COMPONENTS...............................................................10

         Section 7.1. Maintenance................................................................................10
         Section 7.2. Replacement of Components..................................................................11

SECTION 8. MODIFICATIONS.........................................................................................12

         Section 8.1. Required Modifications.....................................................................12
         Section 8.2. Optional Modifications.....................................................................12
         Section 8.3. Title to Modifications.....................................................................12

SECTION 9. NET LEASE.............................................................................................13


SECTION 10. EVENTS OF LOSS.......................................................................................15

         Section 10.1. Occurrence of Events of Loss..............................................................15
         Section 10.2. Termination of Basic Lease Rent and Renewal Lease Rent; Application of Payments...........19
         Section 10.3. Rebuild or Replace........................................................................21
         Section 10.4. Application of Payments Not Relating to an Event of Loss..................................24
         Section 10.5. Certain Conditions to Termination.........................................................24

SECTION 11. INSURANCE............................................................................................24


SECTION 12. INSPECTION...........................................................................................24

                                       i

<PAGE>


SECTION 13. TERMINATION OPTION FOR BURDENSOME EVENTS.............................................................25

         Section 13.1. Election to Terminate.....................................................................25
         Section 13.2. Solicitation of Offers; Payments Upon Termination.........................................26
         Section 13.3. Procedure for Exercise of Termination Option..............................................27
         Section 13.4. Assumption of the Notes...................................................................29
         Section 13.5. Certain Conditions to Termination.........................................................29

SECTION 14. TERMINATION FOR OBSOLESCENCE.........................................................................29

         Section 14.1. Termination...............................................................................29
         Section 14.2. Solicitation of Offers....................................................................30
         Section 14.3. Right of Owner Lessor to Retain the Owner Lessor's Interest...............................30
         Section 14.4. Procedure for Exercise of Termination Option..............................................31
         Section 14.5. Certain Conditions to Termination.........................................................33

SECTION 15. FACILITY LEASE RENEWAL...............................................................................33

         Section 15.1. First Wintergreen Renewal Lease Term......................................................33
         Section 15.2. Second Wintergreen Renewal Lease Term.....................................................33
         Section 15.3. Fair Market Value Renewal Lease Terms.....................................................34
         Section 15.4. Renewal Lease Rent for the Renewal Lease Terms............................................35
         Section 15.5. Determination of Fair Market Rental Value.................................................35
         Section 15.6. Termination Value During Renewal Lease Terms..............................................35

SECTION 16. EVENTS OF DEFAULT....................................................................................36


SECTION 17. REMEDIES.............................................................................................38

         Section 17.1. Remedies for Lease Event of Default.......................................................38
         Section 17.2. Cumulative Remedies.......................................................................42
         Section 17.3. No Delay or Omission to be Construed as Waiver............................................42

SECTION 18. SECURITY INTEREST AND INVESTMENT OF SECURITY FUNDS...................................................42


SECTION 19. LESSEE'S RIGHT TO SUBLEASE...........................................................................42


SECTION 20. OWNER LESSOR'S RIGHT TO PERFORM......................................................................44


SECTION 21. SECURITY FOR OWNER LESSOR'S OBLIGATION TO THE INDENTURE TRUSTEE......................................44


SECTION 22. MISCELLANEOUS........................................................................................44

         Section 22.1. Amendments and Waivers....................................................................44
         Section 22.2. Notices...................................................................................45
         Section 22.3. Survival..................................................................................46
         Section 22.4. Successors and Assigns....................................................................47
         Section 22.5. "True Lease"..............................................................................47
         Section 22.6. Governing Law.............................................................................47
         Section 22.7. Severability..............................................................................47

                                       ii

<PAGE>


         Section 22.8. Counterparts..............................................................................47
         Section 22.9. Headings and Table of Contents............................................................47
         Section 22.10. Further Assurances.......................................................................47
         Section 22.11. Limitation of Liability..................................................................47
         Section 22.12. Measuring Life...........................................................................48
         Section 22.13. New York Sales Taxes.....................................................................48
</TABLE>













                                      iii


<PAGE>




SCHEDULE A     -   BASIC LEASE RENT PAYMENTS
SCHEDULE B     -   ALLOCATION OF RENT, PREPAID RENT AMOUNTS AND INTEREST ON
                   PREPAID RENT
SCHEDULE C     -   TERMINATION VALUES
SCHEDULE D     -   INSURANCE
EXHIBIT A      -   DESCRIPTION OF FACILITY SITE
EXHIBIT B      -   DESCRIPTION OF THE FACILITY














                                       iv



<PAGE>



                            FACILITY LEASE AGREEMENT

     This FACILITY  LEASE  AGREEMENT,  dated as of May 25, 2004 (this  "Facility
Lease"),  between SE Ravenswood  Trust, a Delaware  statutory  trust (the "Owner
Lessor"), and KEYSPAN-RAVENSWOOD, LLC, a New York limited liability company (the
"Lessee").

                                   WITNESSETH:

     WHEREAS,  pursuant to the Deed and Bill of Sale of even date herewith,  the
Owner Lessor has  acquired  the Facility (as more fully  described on Exhibit B)
from the Lessee;

     WHEREAS, pursuant to this Facility Lease, the Owner Lessor desires to lease
the  Facility to the Lessee for the Basic Lease Term and any Renewal  Lease Term
provided  herein,  and the Lessee  desires to lease the Facility  from the Owner
Lessor on such terms;

     WHEREAS, the Facility is located on the Facility Site (as more particularly
described on Exhibit A hereto); and

     WHEREAS,  pursuant to the Site Lease,  the Lessee is granting and conveying
the Ground  Interest to the Owner Lessor for the Site Lease Term and pursuant to
the Site Sublease the Owner Lessor is subleasing  the Facility Site and granting
a right to use the  Easements  to the  Lessee for a term equal to a term of this
Facility Lease, including any renewals hereof;

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

SECTION 1.        DEFINITIONS

     Unless the context hereof  otherwise  requires,  capitalized  terms used in
this Facility Lease,  including those in the recitals, and not otherwise defined
herein shall have the respective  meanings  specified  therefor in Appendix A to
the  Participation  Agreement,  dated as of May 25, 2004, among the Lessee,  the
Owner Lessor, SE Ravenswood Lease,  L.L.C.,  Wilmington Trust Company, and Wells
Fargo Bank Northwest,  N.A., as Indenture Trustee and Pass Through Trustee.  The
general  provisions  of such  Appendix  A shall  apply to this  Facility  Lease,
including the terms specifically defined herein.

SECTION 2.        LEASE OF THE FACILITY

     Section 2.1. Lease.  The Owner Lessor hereby leases the Facility,  upon the
terms and  conditions  set forth herein,  to the Lessee for the Basic Lease Term
and,  subject  to the  Lessee's  exercise  of the  renewal  option or options in
Section 15, one or more Renewal  Lease Terms,  and the Lessee  hereby leases the
Facility,  upon the terms and conditions set forth herein, from the Owner Lessor
for such term. The Facility shall be subject to the terms of this Facility Lease
from the date on which this Facility Lease is executed and delivered.

<PAGE>


Section 2.2. Title; Personal Property. Title to the Facility and every portion
thereof, is severed, and shall be and remain severed, from title to the real
estate constituting the Facility Site (or the Ground Interest), and shall not,
except as specifically contemplated by the Operative Documents, be affected in
any way by any instrument dealing with the Facility Site (or the Ground
Interest) or any part thereof. The Facility constitutes personal property for
all purposes, other than possibly for the purposes of laws relating to ad
valorem or property taxes.

SECTION 3.        FACILITY LEASE TERM AND RENT

     Section 3.1.  Basic Lease Term.  The basic term of this Facility Lease (the
"Basic Lease Term")  shall  commence on the Closing Date and shall  terminate at
11:59 p.m. (New York City time) on May 25, 2040 (the "Expiration Date"), subject
to earlier termination in whole pursuant to Section 10, 13, 14 or 17 hereof.

     Section 3.2. Rent.

     (a) Basic and  Renewal  Lease Rent.  (i)  Payment of Basic Lease Rent.  The
Lessee hereby agrees to pay to the Owner Lessor on each Basic Lease Rent Payment
Date  during  the Basic  Lease  Term,  unless  this  Facility  Lease is  earlier
terminated in accordance with the express  provisions hereof, an amount equal to
the product of the Purchase  Price and the  percentage  set forth  opposite such
Basic  Lease Rent  Payment  Date in column (b) of  Schedule A under the  heading
"Basic Lease Rent Payment Percentage" ("Basic Lease Rent"). The Basic Lease Rent
payable hereunder constitutes  compensation to the Owner Lessor for the lease of
the Facility to the Lessee under this  Facility  Lease  determined  after taking
Interest on Prepaid Rent into  account.  The Basic Lease Rent payable under this
Section 3.2(a), together with any Renewal Lease Rent payable pursuant to Section
15 and any  Supplemental  Lease Rent  payable  pursuant  to Section  3.3,  fully
satisfies the obligation of the Lessee to pay rent under this Facility Lease.

     (ii) Allocated  Rent.  Basic  Lease Rent  attributable  to the lease of the
          Facility by the Owner Lessor to the Lessee under this  Facility  Lease
          shall be  allocated to each full or partial  calendar  year during the
          Basic Lease Term (each,  a "Rental  Period") in an amount equal to the
          product of the Purchase  Price and the  percentage  set forth opposite
          such Rental Period in column (b) of Schedule B under the heading "Rent
          Allocated to Rental Period" (the "Allocated  Rent").  Within each such
          Rental  Period,  Allocated Rent shall be allocated on a level basis by
          month  and  on a  level  daily  basis  within  each  month.  It is the
          intention  of the Owner Lessor and the Lessee that the  allocation  of
          Basic  Lease Rent to each Rental  Period as  provided in this  Section
          3.2(a)(ii)  constitutes a specific allocation of fixed rent within the
          meaning of Treasury  Regulation section  1.467-1(c)(2)(ii).  The Owner
          Lessor and the Lessee, on any Federal income tax returns filed by them
          (or on any  Federal  income  tax  returns  on which  their  income  is
          included),   shall  accrue  as  rental  income  and  rental   expense,
          respectively,  for each  Rental  Period  the  Allocated  Rent for such
          Rental Period. For the avoidance of doubt, the Allocated Rent has been
          determined without taking Interest on Prepaid Rent into account.


                                       2
<PAGE>


     (iii)Prepaid Rent Amounts and Interest on Prepaid  Rent. To the extent that
          the sum of the cumulative amount of Basic Lease Rent payable as of the
          close of any Rental Period plus an amount equal to the absolute  value
          of Interest on Prepaid  Rent taken into  account in the  determination
          thereof  exceeds the  cumulative  amount of  Allocated  Rent as of the
          close of the  succeeding  Rental  Period,  it is the  intention of the
          Owner Lessor and the Lessee that such excess constitutes  prepaid rent
          within the meaning of Treasury  Regulation  section  1.467-1(c)(3)(ii)
          and interest  shall accrue  thereon at the Prepaid Rent Interest Rate.
          The Lessee  shall be  considered  to have prepaid rent in an aggregate
          amount as of the end of a Rental  Period  equal to the  product of the
          Purchase  Price and the  percentage  set forth  opposite  such  Rental
          Period in column (e) of  Schedule B under the  heading  "Prepaid  Rent
          Amount"  (each,  a "Prepaid  Rent  Amount").  The Owner Lessor and the
          Lessee,  on any Federal  income tax  returns  filed by them (or on any
          Federal  income tax returns on which their income is included),  shall
          accrue  the  amounts  of  interest   expense  and   interest   income,
          respectively,  set forth for each Rental  Period in an amount equal to
          the  product  of the  Purchase  Price  and the  percentage  set  forth
          opposite  such  Rental  Period in column  (f) of  Schedule B under the
          heading "Interest on Prepaid Rent" (the "Interest on Prepaid Rent").

               Interest on Prepaid Rent is included in the  calculation of Basic
          Lease Rent,  and  Interest on Prepaid Rent as well as  Overpayment  of
          Basic Lease Rent and  Underpayment of Basic Lease Rent are included in
          the calculation of Termination Values (except that Interest on Prepaid
          Rent is not  included  in the  calculation  of  Termination  Values on
          Termination Dates that are also Basic Lease Rent Payment Dates because
          such  Interest  on Prepaid  Rent has been  taken  into  account in the
          calculation  of the  Basic  Lease  Rent  payable  on such  Termination
          Dates),  are  payable as a portion  thereof,  and have been taken into
          account  in the  calculation  of the  percentage  set forth  under the
          heading "Basic Lease Rent Payment Percentage" on Schedule A hereto and
          under the heading "Termination Value Percentage" on Schedule C hereto.
          In no event shall any Prepaid Rent Amount,  Interest on Prepaid  Rent,
          Overpayment of Basic Lease Rent or Underpayment of Basic Lease Rent be
          separately  payable  (including  upon any termination of this Facility
          Lease,  and  regardless of whether or not  Termination  Value shall be
          payable in connection with any such  termination)  except as expressly
          set forth in this Facility Lease.

               (iv) Renewal Lease Rent.  Renewal  Lease Rent,  if any,  shall be
          paid and allocated as set forth in Section 15.

     Section 3.3.  Supplemental Lease Rent. The Lessee also agrees to pay to the
Owner  Lessor,  or to any other Person  entitled  thereto as expressly  provided
herein  or in  any  other  Operative  Document,  as  appropriate,  any  and  all
Supplemental  Lease Rent,  promptly as the same shall  become due and owing,  or
where no due date is  specified,  promptly  after demand by the Person  entitled
thereto,  and in the event of any  failure  on the part of the Lessee to pay any
Supplemental Lease Rent, the Owner Lessor shall have all the same rights, powers
and remedies as are provided for herein or by law or equity or otherwise for the


                                       3
<PAGE>


failure to pay Basic Lease Rent or Renewal Lease Rent.  The Lessee will also pay
as Supplemental Lease Rent, to the extent permitted by Applicable Law, an amount
equal to interest at the Overdue  Rate on any part of any payment of Basic Lease
Rent or  Renewal  Lease Rent not paid when due for any period for which the same
shall be overdue and on any  Supplemental  Lease Rent not paid when due (whether
on demand or  otherwise)  for the period from such due date until the same shall
be paid.  The Lessee  also  agrees to pay as  Supplemental  Lease Rent an amount
equal to any Make Whole Premium required to be paid pursuant to the Indenture or
any Note;  provided that the Lessee shall have the right to the exclusion of the
Owner Lessor to agree with the  Indenture  Trustee as to the amount of such Make
Whole Premium.  All Supplemental  Lease Rent to be paid pursuant to this Section
3.3 shall be payable in the manner set forth in Section 3.5.

     Section 3.4. Adjustment of Lease Schedules.

     (a) The Lessee and the Owner  Lessor  agree that Basic Lease Rent,  Renewal
Lease Rent (if applicable),  Allocated Rent,  Prepaid Rent Amounts,  Interest on
Prepaid Rent, Overpayment of Basic Lease Rent,  Underpayment of Basic Lease Rent
and  Termination  Values  shall be adjusted,  either  upwards or  downwards,  to
reflect (i) the issuance of any Additional Lessor Notes pursuant to Section 2.12
of the  Indenture in  connection  with a refunding or  refinancing  of any Notes
pursuant to Section 11.2 of the Participation  Agreement,  and (ii) the issuance
of  Additional  Lessor  Notes  pursuant  to  Section  2.12 of the  Indenture  in
connection with the financing of  Modifications  pursuant to Section 11.1 of the
Participation Agreement.

     (b) Any  adjustments  pursuant to this Section 3.4 shall be  calculated  to
preserve the Owner Participant's Net Economic Return; provided, however, that to
the extent consistent with preserving such objective,  all adjustments shall, at
the option of the Lessee, be calculated to minimize (x) the net present value to
the Lessee of the Basic  Lease  Rent  and/or  (y) to the  extent  possible,  the
average  annual  Basic Lease Rent over the Basic Lease Term for the  Guarantor's
GAAP  accounting  purposes.  Adjustments  will be made using the same  method of
computation and assumptions,  including Tax Assumptions and Pricing Assumptions,
originally  used (other than those that have  changed as the result of the event
giving rise to the  adjustment)  in the  calculation of the Basic Lease Rent and
Termination  Values  and  shall  comply  with  Applicable  Law,  as  well as the
requirements  of  Revenue  Procedure  2001-28,   2001-19  I.R.B.  1156,  Revenue
Procedure  2001-29,  2001-19  I.R.B.  1160,  and Section 467 of the Code and the
Treasury  Regulations  thereunder  (except  to  the  extent  that  the  original
Transaction  did not  comply  therewith),  each as in effect at the time of such
adjustment,  and shall  not  cause  this  Facility  Lease to be a  "disqualified
leaseback or long-term  agreement" within the meaning of Section 467 of the Code
or any such Treasury Regulations  thereunder as in effect as of the date of such
adjustment. Without limiting the generality of the foregoing, the entire benefit
of any  adjustments  made pursuant to this Section 3.4 to reflect the effects of
any  refunding  or  refinancing  of any Notes  pursuant  to Section  11.2 of the
Participation Agreement shall be for the account of the Lessee.

     (c)  Anything  herein or in any other  Operative  Document to the  contrary
notwithstanding,  Basic Lease Rent payable on any Basic Lease Rent Payment Date,
whether or not  adjusted in  accordance  with this Section  3.4,  shall,  in the
aggregate,  be in an amount at least  sufficient  to pay in full  principal  and
interest  payable on the Notes on such Basic Lease Rent Payment  Date.  Anything
herein or in any  other  Operative  Document  to the  contrary  notwithstanding,


                                       4
<PAGE>


Termination Values payable on any date under this Facility Lease, whether or not
adjusted in accordance  with this Section 3.4, shall in the aggregate,  together
with all other Rent due and owing on such date, exclusive of any portion thereof
that is an Excepted Payment,  be in an amount at least sufficient to pay in full
the principal of, Make Whole Premium,  if any, and accrued interest on the Notes
payable on such date.  No  adjustment  made  pursuant to Section  3.4(a)(i)  (in
respect  of a partial  refinancing)  or  Section  3.4(a)(ii)  shall  affect  the
amortization of the existing Notes.

     (d) Any adjustment pursuant to this Section 3.4 shall initially be computed
by the Owner  Participant,  subject to the verification  procedure  described in
this  Section  3.4(d).  Once  computed,  the results of such  computation  shall
promptly be delivered  by the Owner  Participant  to the Lessee.  Within 20 days
after the receipt of the results of any such adjustment,  the Lessee may request
that a nationally  recognized firm of accountants or lease advisors  selected by
the Owner Participant and reasonably satisfactory to the Lessee (the "Verifier")
verify,  after  consultation  with the Owner  Participant  and the  Lessee,  the
accuracy of such  adjustment  in  accordance  with this  Section  3.4. The Owner
Participant  and the  Lessee  hereby  agree  (i) each  shall  have the  right to
communicate with the Verifier, and (ii) subject to the execution by the Verifier
of an appropriate  confidentiality  agreement,  to provide the Verifier with all
information and materials (other than income tax returns or accounting  records)
as shall be necessary in  connection  therewith.  If the Verifier  confirms that
such  adjustment is in accordance  with this Section 3.4, it shall so certify to
the Lessee,  the Owner Lessor and the Owner  Participant and such  certification
shall be final,  binding and conclusive on the Lessee, the Owner Participant and
the Owner  Lessor.  If the Verifier  concludes  that such  adjustment  is not in
accordance  with this  Section  3.4,  and the  adjustments  to Basic Lease Rent,
Allocated Rent, Prepaid Rent Amounts,  Interest on Prepaid Rent,  Overpayment of
Basic  Lease  Rent,  Underpayment  of  Basic  Lease  Rent or  Termination  Value
calculated  by the Verifier are  different  from those  calculated  by the Owner
Participant,  then it shall so certify to the Lessee,  the Owner  Lessor and the
Owner  Participant and the Verifier's  calculation  shall be final,  binding and
conclusive  on the Lessee,  the Owner Lessor and the Owner  Participant.  If the
Lessee  does not  request  verification  of any  adjustment  within  the  period
specified  above,  the computation  provided by the Owner  Participant  shall be
final,  binding and  conclusive  on the Lessee,  the Owner  Lessor and the Owner
Participant.  The final  determination of any adjustment  hereunder shall be set
forth in an  amendment to this  Facility  Lease,  executed and  delivered by the
Owner Lessor and the Lessee and consented to by the Owner Participant; provided,
however,  that any  omission  to execute and deliver  such  amendment  shall not
affect the validity and  effectiveness  of any such  adjustment.  The reasonable
fees, costs and expenses of the Verifier in verifying an adjustment  pursuant to
this Section 3.4 shall be paid by the Lessee;  provided,  however,  that, in the
event that such Verifier  determines  that the present value of Basic Lease Rent
to be made under this Facility  Lease as calculated by the Owner  Participant is
greater than the present  value of the correct  Basic Lease Rent as certified by
the Verifier,  in each case,  discounted  semi-annually on each Basic Lease Rent
Payment Date at the Discount  Rate,  by more than five basis  points,  then such
expenses of the Verifier shall be paid by the Owner Participant. Notwithstanding
anything herein to the contrary,  the sole  responsibility of the Verifier shall
be to verify the calculations  hereunder and matters of  interpretation  of this
Facility Lease or any other Operative  Document shall not be within the scope of
the Verifier's responsibilities.


                                       5
<PAGE>


     Section  3.5.  Manner of  Payments.  All Rent  (whether  Basic  Lease Rent,
Renewal  Lease Rent or  Supplemental  Lease Rent) shall be paid by the Lessee in
lawful  currency of the United States of America in immediately  available funds
to the  recipient not later than 11:00 a.m. (New York City time) on the due date
therefor. All Rent payable to the Owner Lessor (other than Excepted Payments and
other than Rent payable pursuant to Section  13.2(b),  13.3, 14.3, 14.4 or 17.1)
shall be paid by the Lessee to the Owner Lessor by payment to the Owner Lessor's
Account,  or to such other place as the Owner  Lessor shall notify the Lessee in
writing;  provided,  however,  that so long as the Lien of the Indenture has not
been terminated or discharged,  the Owner Lessor hereby irrevocably  directs (it
being agreed and  understood  that such  direction  shall be deemed to have been
revoked after the Lien of the Indenture shall have been terminated or discharged
in accordance with its terms), and the Lessee agrees,  that all payments of Rent
(other than Excepted  Payments) payable to the Owner Lessor shall be paid to the
Indenture  Trustee's  Account or to such other account as the Indenture  Trustee
shall  notify  the  Lessee  in  writing  pursuant  to  the  Indenture.  Payments
constituting  Excepted  Payments shall be made to the Person entitled thereto at
the address for such Person set forth in the Participation Agreement, or to such
other place as such Person shall notify the Lessee in writing.

     SECTION 4. DISCLAIMER OF WARRANTIES; RIGHT OF QUIET ENJOYMENT

     Section 4.1. Disclaimer of Warranties.

     (a) Without waiving any claim the Lessee may have against any manufacturer,
vendor or contractor,  THE LESSEE ACKNOWLEDGES AND AGREES SOLELY FOR THE BENEFIT
OF THE OWNER LESSOR,  THE OWNER TRUSTEE,  THE OWNER  PARTICIPANT,  THE INDENTURE
TRUSTEE AND THE PASS THROUGH  TRUSTEE  THAT (i) THE FACILITY AND EACH  COMPONENT
THEREOF IS OF A SIZE, DESIGN, CAPACITY AND MANUFACTURE ACCEPTABLE TO THE LESSEE,
(ii) THE LESSEE IS SATISFIED  THAT THE FACILITY  AND EACH  COMPONENT  THEREOF IS
SUITABLE FOR THEIR  RESPECTIVE  PURPOSES,  (iii) NONE OF THE OWNER  LESSOR,  THE
OWNER  TRUSTEE,  OR THE  OWNER  PARTICIPANT  IS A  MANUFACTURER  OR A DEALER  IN
PROPERTY  OF SUCH KIND,  (iv) THE  FACILITY  IS LEASED  HEREUNDER  TO THE EXTENT
PROVIDED  HEREBY FOR THE BASIC LEASE TERM AND THE RENEWAL  LEASE TERMS,  IF ANY,
SPECIFIED  HEREIN  SUBJECT  TO ALL  APPLICABLE  LAWS NOW IN EFFECT OR  HEREAFTER
ADOPTED,  INCLUDING  (1)  ZONING  REGULATIONS,  (2)  ENVIRONMENTAL  LAWS  OR (3)
BUILDING RESTRICTIONS, AND IN THE STATE AND CONDITION OF EVERY PART THEREOF WHEN
THE SAME FIRST BECAME SUBJECT TO THIS FACILITY LEASE WITHOUT  REPRESENTATION  OR
WARRANTY OF ANY KIND BY THE OWNER  LESSOR OR THE OWNER  PARTICIPANT  AND (v) THE
OWNER LESSOR  LEASES FOR THE BASIC LEASE TERM AND THE RENEWAL  LEASE  TERMS,  IF
ANY,  SPECIFIED  HEREIN AND THE LESSEE  TAKES THE FACILITY  UNDER THIS  FACILITY
LEASE  "AS-IS",  "WHERE-IS" AND "WITH ALL FAULTS",  AND THE LESSEE  ACKNOWLEDGES
THAT NONE OF THE OWNER LESSOR,  THE OWNER TRUSTEE,  THE OWNER  PARTICIPANT,  THE
INDENTURE  TRUSTEE OR THE PASS THROUGH TRUSTEE MAKES NOR SHALL BE DEEMED TO HAVE
MADE, AND EACH EXPRESSLY DISCLAIMS,  ANY AND ALL RIGHTS,  CLAIMS,  WARRANTIES OR
REPRESENTATIONS,  EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION, FITNESS


                                       6
<PAGE>


FOR ANY PARTICULAR PURPOSE, DESIGN, OPERATION,  MERCHANTABILITY THEREOF OR AS TO
THE TITLE OF THE FACILITY, THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREOF OR
CONFORMITY  THEREOF  TO  SPECIFICATIONS,   FREEDOM  FROM  PATENT,  COPYRIGHT  OR
TRADEMARK  INFRINGEMENT,  THE ABSENCE OF ANY LATENT OR OTHER DEFECT,  WHETHER OR
NOT  DISCOVERABLE,  OR AS TO THE  ABSENCE  OF ANY  OBLIGATIONS  BASED ON  STRICT
LIABILITY  IN TORT OR ANY OTHER  EXPRESS OR IMPLIED  REPRESENTATION  OR WARRANTY
WHATSOEVER  WITH RESPECT  THERETO,  except that the Owner Lessor  represents and
warrants that on the Closing Date, the Facility will be free of Owner  Trustee's
Liens  attributable  to the Owner Lessor.  It is agreed that all such risks,  as
between the Owner Lessor,  the Owner Trustee,  the Equity Investor and the Owner
Participant  on the one hand and the Lessee on the other hand are to be borne by
the Lessee with respect to acts,  occurrences  or omissions  during the Facility
Lease Term. None of the Owner Lessor, the Owner Trustee,  the Owner Participant,
the Indenture Trustee or the Pass Through Trustee shall have any  responsibility
or  liability  to the  Lessee or any other  Person  with  respect  to any of the
following  occurring during the Facility Lease Term: (x) any liability,  loss or
damage caused or alleged to be caused  directly or indirectly by the Facility or
any Component or by any inadequacy thereof or deficiency or defect therein or by
any other  circumstances  in  connection  therewith;  (y) the use,  operation or
performance  of the  Facility  or any  Component  thereof or any risks  relating
thereto;  or  (z)  the  delivery,  operation,  servicing,  maintenance,  repair,
improvement,  replacement  or  decommissioning  of the Facility or any Component
thereof.  The  provisions  of this  paragraph  (a) of this Section 4.1 have been
negotiated,  and, except to the extent  otherwise  expressly stated herein or in
Sections  3.2(f)  and  3.4(f)  of the  Participation  Agreement,  the  foregoing
provisions  are  intended  to  be a  complete  exclusion  and  negation  of  any
representations  or  warranties  of the Owner Lessor and the Owner  Participant,
express or implied,  with respect to the Facility or any Component  thereof that
may  arise  pursuant  to any  Applicable  Law now or  hereafter  in  effect,  or
otherwise.

     (b) During the  Facility  Lease Term,  so long as no Lease Event of Default
shall  have  occurred  and be  continuing,  the  Owner  Lessor  hereby  appoints
irrevocably and constitutes the Lessee its agent and  attorney-in-fact,  coupled
with an interest,  to assert and enforce, from time to time, in the name and for
the account of the Owner Lessor and the Lessee,  as their  interests may appear,
but in all cases at the sole cost and expense of the Lessee, whatever claims and
rights the Owner  Lessor may have in respect of the  Facility  or any  Component
thereof against any manufacturer,  vendor or contractor, or under any express or
implied warranties relating to the Facility or any Component thereof.

     Section 4.2. Quiet Enjoyment.  The Owner Lessor  acknowledges notice of the
Site Lease and Site  Sublease and  expressly  agrees  that,  so long as no Lease
Event of Default has  occurred and is  continuing,  neither the Owner Lessor nor
any party acting by, through or under the Owner Lessor (other than the Indenture
Trustee)  shall take or cause to be taken any action  contrary  to the  Lessee's
rights under this Facility Lease and the Site  Sublease,  including the right to
possession,  use and quiet enjoyment of the Facility,  the Facility Site and the
Easements.

SECTION 5.        RETURN OF FACILITY

     Section 5.1. Return.  Upon expiration or early termination of this Facility
Lease, the Lessee, at its own expense,  shall return the Facility (together with
any  Modifications to the Facility title to which shall have vested in the Owner


                                       7
<PAGE>


Lessor pursuant to the first sentence of Section 8.3) to the Owner Lessor or any
transferee or assignee of the Owner Lessor by surrendering the Facility into the
possession  of the Owner Lessor or such  transferee  or assignee at the Facility
Site. In connection with such return, the Lessee shall:

          (i) assign,  to the extent  permitted  by  Applicable  Law,  and shall
     cooperate with all reasonable requests of the Owner Participant,  the Owner
     Trustee,  the Owner  Lessor or any  transferee  or  assignee of any of such
     parties for purposes of obtaining,  or enabling the Owner Participant,  the
     Owner Trustee, the Owner Lessor or such transferees or assignees to obtain,
     any and all  Governmental  Approvals and licenses,  permits,  approvals and
     consents of any other  Persons  that are or will be required to be obtained
     by the Owner  Participant,  the  Owner  Trustee,  the Owner  Lessor or such
     transferee or assignee in connection with the use, operation or maintenance
     of the Facility on or after such return in compliance  with Applicable Law;
     provided that if any such Governmental  Approval or other license,  permit,
     approval or consent  also relates to any other  facilities,  the Lessee and
     the Owner Lessor shall enter into  mutually  satisfactory  arrangements  so
     that the Facility and such other facilities may each be owned, operated and
     maintained in a commercially reasonable manner;

          (ii) provide the Owner Lessor or a transferee or assignee of the Owner
     Lessor copies of all documents  (including equipment inspection reports and
     maintenance records and all Governmental  Approvals and related materials),
     instruments,  plans,  maps,  specifications,  manuals,  drawings  and other
     documentary materials relating to the installation, maintenance, operation,
     construction,  design,  modification and repair of the Facility as shall be
     in the Lessee's possession and shall be reasonably appropriate or necessary
     for the continued operation of the Facility. Upon such return, the right to
     use the  Facility  granted  hereunder  for the benefit of the Lessee  shall
     cease and terminate; and

          (iii) assign any long-term service contracts  specifically  applicable
     only to the Facility to the extent such  assignment is permitted under such
     contract without the consent of the counterparty thereto.

          Section 5.2.  Condition Upon Return.  At the time of the return of the
     Facility by the Lessee to the Owner Lessor or any transferee or assignee of
     the Owner Lessor pursuant to Section 5.1, the following conditions shall be
     complied  with,  all at the Lessee's  sole cost and expense;  provided that
     this Section 5.2 shall not apply to any return pursuant to Section 10:

     (a) the Facility shall be free and clear of all Liens (other than Permitted
Liens of the type specified in (b) (other than Indenture  Trustee's Liens), (h),
(i),  (j),  (k), (l) or (m) of the  definition  thereof and the interests of the
Owner Participant and the Owner Lessor under any of the Operative Documents);

     (b) the Facility shall be in at least as good a condition as if it had been
maintained and operated  during the Facility  Lease Term in compliance  with the
provisions of this Facility Lease, ordinary wear and tear excepted;


                                       8
<PAGE>


     (c) if this Facility  Lease is being  terminated  and the Facility is being
transferred  to a third party  pursuant to Section 13, 14 or 17, the Lessee,  at
the request of the Owner Lessor, shall enter into a site lease (substantially in
the form of the Site Lease) and an assignment and assumption agreement with such
third party or make other arrangements reasonably acceptable to such third party
to permit such third party access to and use of the Facility,  the Facility Site
and the Ground Interest; and

     (d) the Lessee,  at the request of the Owner Lessor made in accordance with
Section 8.3,  shall sell to the Owner Lessor (or its designee or  transferee) at
the then Fair Market Sales Value  thereof,  determined by agreement  between the
Lessee and the Owner  Lessor,  or absent  agreement,  by an appraisal  conducted
according  to  the  Appraisal  Procedure,  each  Severable  Modification  to the
Facility  title to which has not vested in the Owner  Lessor as set forth in the
first  sentence  of Section  8.3,  subject  to all  existing  encumbrances.  The
appraiser's fees and expenses incurred pursuant to this clause (d) shall be paid
by the Owner Lessor.

Section 5.3.      Environmental Reports; Clean-up.

     (a) In  connection  with the return of the  Facility to the Owner Lessor at
the Expiration  Date or the expiration of the last Renewal Lease Term elected by
the Lessee or  pursuant  to Section 17, the Lessee  shall,  at its own  expense,
provide the Owner Lessor and the Owner  Participant  and, so long as the Lien of
the  Indenture  shall not have been  terminated  or  discharged,  the  Indenture
Trustee (a) not later than nine (9) months prior to the later of the  Expiration
Date or the  expiration  date of the last  Renewal  Lease  Term  elected  by the
Lessee,  or (b) in  connection  with any return  pursuant  to Section 17 of this
Facility Lease,  as promptly as possible prior to such return,  a Phase I Survey
(as defined below) as to the  environmental  conditions or  circumstances of the
Facility and the Facility Site and the presence or absence of any  Environmental
Conditions  that  reasonably  could  give  rise to a  liability  or a  potential
liability.  Such survey shall be conducted in conformance  with American Society
for Testing and  Materials  (ASTM)  standards for a Phase I  environmental  site
assessment and shall include a review of the compliance or non-compliance of the
Facility  and Facility  Site at the time of the return of the Facility  with any
applicable Environmental Laws, as then currently in effect (together, a "Phase I
Survey")  performed  not more  than 90 days  prior to the date  such  report  is
provided to the Owner  Participant  and the  Indenture  Trustee,  by a reputable
environmental  consulting firm (selected by the Lessee and reasonably acceptable
to the Owner  Participant).  The Phase I Survey will only be expanded to a Phase
II  environmental  site  assessment  conducted  in  conformance  with  the  ASTM
standards (a "Phase II Survey") if, as a result of the Phase I Survey, facts are
revealed that would reasonably necessitate a Phase II Survey; provided, however,
that such facts were not otherwise  previously  identified in the scope of work,
site  investigation  results,  contaminant  fate and transport,  conclusions and
recommendations sections of the environmental reports listed as items 13, 14 and
21 in Schedule 4(w) to the Participation Agreement. The provisions of such Phase
I Survey or Phase II Survey shall not relieve the Lessee of any  indemnification
obligation  or  liability  with  respect  to  Environmental  Conditions  or  any
non-compliance  with  Environmental  Laws  existing at the time of such  return,
whether known or unknown, in respect of the Facility or the Facility Site.


                                       9
<PAGE>


     (b) If the Phase I Survey or Phase II Survey delivered  pursuant to Section
5.3(a) indicates that, or at the time of any return of the Facility  pursuant to
Section 5.1 (other than pursuant to Section 10) the Lessee has received  written
notice or otherwise has Actual Knowledge that, any action  (including  clean-up,
investigation,  abatement,  correction, removal or remediation) is then required
under  any  then  applicable  Environmental  Laws as then  currently  in  effect
(whether  indicated  in the Phase I Survey or Phase II Survey or  otherwise  and
including any action then required under applicable  Environmental Laws (as then
currently  in  effect)  for the  Facility  to be then in  compliance  with  such
Environmental Laws), the Lessee shall, at its own expense, within 90 days of the
Owner Lessor having received such Phase I Survey or Phase II Survey, or, provide
the Owner  Participant  and, so long as the Lien of the Indenture shall not have
been  terminated or discharged,  the Indenture  Trustee with a remediation  plan
reasonably satisfactory to the Owner Participant and, so long as the Lien of the
Indenture  shall not have been terminated or discharged,  the Indenture  Trustee
designed to effect compliance with then applicable  Environmental  Laws (as then
currently  in effect) and the return  conditions  set forth in this Section 5 as
promptly as is reasonably practical (and in any event prior to the expiration of
the  Facility  Lease  Term)  and  without  materially  adversely  affecting  the
continued  operation of the Facility.  To the extent that any action  (including
clean-up, investigation, abatement, correction, removal or remediation) required
to be taken under this Section  5.3(b) cannot  reasonably be completed  prior to
expiration or termination of this Facility Lease, the Lessee shall complete such
action (including clean-up,  investigation,  abatement,  correction,  removal or
remediation) as promptly thereafter as is reasonably practical,  and in addition
the Lessee shall provide to the Owner Lessor and the Owner  Participant  and, so
long as the Lien of the Indenture  shall not have been terminated or discharged,
the Indenture Trustee, adequate financial assurance during such period following
the end of the Facility Lease Term with respect to the ability of the Lessee (or
any  other  Person  responsible  therefor)  to  satisfy  such  obligation.   The
obligations of the Lessee set forth in this Section 5.3(a) and (b) shall survive
the  termination of this Facility Lease and the expiration of the Facility Lease
Term.

SECTION 6.        LIENS

     The Lessee will not directly or indirectly create,  incur, assume or suffer
to exist any Lien on or with respect to the Facility (or any Component thereof),
the Ground Interest or the Operative  Documents,  or the Owner Lessor's or Owner
Participant's  interest  therein,  except  Permitted  Liens.  The  Lessee  shall
promptly notify the Owner Lessor and the Indenture  Trustee of the imposition of
any such Lien of which the Lessee is aware and shall promptly at its own expense
take such action as may be necessary to fully discharge and release such Lien.

SECTION 7.        MAINTENANCE; REPLACEMENTS OF COMPONENTS

     Section 7.1. Maintenance. The Lessee, at its own cost and expense, will (a)
cause the Facility to be maintained in good condition, repair and working order,
ordinary wear and tear excepted,  and in any event in all material  respects (i)
in accordance with Prudent Industry Practice without discrimination by reason of
the leased status of the Facility as compared to other comparable property owned
or  leased  by the  Lessee  or its  Affiliates;  (ii)  in  compliance  with  all
Applicable  Laws of any  Governmental  Entity  having  jurisdiction  unless such
non-compliance  could not reasonably be expected to result in a Material Adverse
Effect; provided, however, that the Lessee may, in good faith and by appropriate
proceedings,  diligently  contest the validity or  application of any Applicable
Law in any reasonable  manner that (A) does not involve any risk of foreclosure,
sale or  forfeiture or loss of the Facility or any  substantial  part thereof or


                                       10
<PAGE>


the  Facility  Site (in each  case,  unless  such risk is not  material)  or the
impairment of the use,  operation or maintenance of the Facility in any material
respect,  and (B) could not result in any criminal  liability being incurred by,
or could not  reasonably be expected to have any material  adverse effect on the
interests  of,  the Owner  Participant  (or any  Affiliate  thereof),  the Owner
Trustee or the Owner Lessor,  including subjecting the Owner Participant (or any
Affiliate  thereof),  the Owner  Trustee or the Owner Lessor to  regulation as a
public utility under  Applicable  Law; and (iii) in accordance with the terms of
all insurance  policies  required to be maintained  with respect to the Facility
pursuant to Section 11; and (b) cause to be made,  at its own cost and  expense,
all repairs,  renewals,  replacements  and improvements  thereof,  all as in the
judgment of the Lessee may be  necessary so that the Facility may be operated in
accordance with its intended purpose.

     Section  7.2.  Replacement  of  Components.   In  the  ordinary  course  of
maintenance,  service,  repair or testing of the Facility or any Component,  the
Lessee,  at its sole  cost and  expense,  may  remove  or cause or  permit to be
removed from the  Facility any  Component;  provided,  however,  that the Lessee
shall (a) cause such Component to be replaced by a replacement  Component  which
shall be free and clear of all Liens (except Permitted Liens) and in at least as
good operating condition as the Component replaced,  assuming that the Component
replaced  was  maintained  in  accordance  with this  Facility  Lease (each such
replacement  Component being herein  referred to as a "Replacement  Component");
and (b) cause such  replacement to be performed in such a manner and with such a
Replacement  Component  as shall not (i)  materially  diminish  the  current  or
residual  value,  remaining  useful  life or utility of the  Facility as a whole
below the current or residual  value,  the remaining  useful life or the utility
thereof immediately prior to such replacement (assuming the Facility was then in
the condition  required to be maintained by the terms of this Facility Lease) or
(ii) cause the Facility or any  substantial  portion  thereof to become "limited
use" property within the meaning of Revenue  Procedure  2001-28,  2001-19 I.R.B.
1156 or Revenue Procedure 2001-29,  2001-19 I.R.B. 1160. If any Component to the
Facility that is subject to this Facility  Lease is at any time removed from the
Facility,  such Component shall remain subject to this Facility Lease,  wherever
located,  until such time as such  Component  shall be replaced by a Replacement
Component  which has been  incorporated  in the  Facility  and  which  meets the
requirements for Replacement  Components  specified above.  Immediately upon any
Replacement Component becoming incorporated in the Facility, without further act
(and at no cost to the  Owner  Lessor  and with no  adjustment  to the  Purchase
Price, Basic Lease Rent or Renewal Lease Rent), (x) the replaced Component shall
no  longer  be  subject  to this  Facility  Lease,  (y)  title to such  replaced
Component  shall  thereupon  vest in the Lessee or such other Person as shall be
designated  by the Lessee,  free and clear of all rights of the Owner Lessor and
the  Indenture  Trustee,  and  (z)  title  to the  Replacement  Component  shall
thereupon  vest with the Owner  Lessor  and shall  (i)  become  subject  to this
Facility Lease and the Lien of the  Indenture,  and (ii) be deemed a part of the
Facility  for all  purposes  of this  Facility  Lease  and the  other  Operative
Documents.  Notwithstanding  anything in this  Section 7.2 or  elsewhere in this
Facility Lease to the contrary, if the Lessee has determined that a Component is
surplus or obsolete,  it shall have the right to remove such  Component  without
replacing it;  provided,  that no such Component may be so removed without being
replaced  if such  removal  would  materially  diminish  the current or residual
value,  remaining  useful  life or utility of the  Facility as a whole below the
current or residual  value,  the  remaining  useful life or the utility  thereof
immediately  prior  to such  removal  (assuming  the  Facility  was  then in the
condition  required to be  maintained  by the terms of this  Facility  Lease) or
cause the Facility or any  substantial  portion  thereof to become "limited use"
property within the meaning of Revenue Procedure 2001-28, 2001-19 I.R.B. 1156 or
Revenue Procedure 2001-29, 2001-19 I.R.B. 1160.


                                       11
<PAGE>


SECTION 8.        MODIFICATIONS

     Section  8.1.  Required  Modifications.  The  Lessee,  at its sole cost and
expense, shall make or cause to be made all Modifications to the Facility as are
required (a) by Applicable Law or (b) to maintain in effect any insurance policy
required to be  maintained  with respect to the Facility  pursuant to Section 11
hereof (each, a "Required  Modification");  provided,  however,  that the Lessee
may,  in good  faith and by  appropriate  proceedings,  diligently  contest  the
validity or application of any Applicable Law in any reasonable  manner that (i)
does not involve any danger of  foreclosure,  sale or  forfeiture or loss of any
part of the Facility or any  substantial  part thereof or the Facility  Site (in
each case  unless such risk is not  material)  or impair the use,  operation  or
maintenance of the Facility in any material  respect,  and (ii) could not result
in any criminal liability being incurred by, or could not reasonably be expected
to have any material  adverse effect on the interests of, the Owner  Participant
(or any Affiliate  thereof),  the Owner  Trustee or the Owner Lessor,  including
subjecting the Owner Participant (or any Affiliate  thereof),  the Owner Trustee
or the Owner Lessor to regulation as a public utility under Applicable Law.

     Section  8.2.  Optional  Modifications.  The Lessee at any time may, at its
sole cost and expense,  make or cause or permit to be made any  Modification  to
the  Facility as the Lessee  considers  desirable  in the proper  conduct of its
business  (any  such  Modification  that is not a  Required  Modification  being
referred to as an "Optional  Modification");  provided that the Lessee shall not
make and shall prevent from being made any Optional Modification to the Facility
that would (i) materially diminish the current or residual value, utility (other
than with respect to Optional  Modifications for pollution control equipment) or
remaining useful life of the Facility as a whole,  below the current or residual
value, utility (other than with respect to Optional  Modifications for pollution
control  equipment)  or  remaining  useful  life  of  the  Facility  as a  whole
immediately prior to such Optional Modification  (assuming the Facility was then
in the condition  required to be maintained by the terms of this Facility Lease,
but without  regard to any  Severable  Modifications  previously  made that were
neither Required Modifications nor financed through this Facility Lease) or (ii)
cause the Facility or any  substantial  portion  thereof to become "limited use"
property,  within the meaning of Revenue Procedure 2001-28,  2001-19 I.R.B. 1156
or Revenue Procedure 2001-29, 2001-19 I.R.B. 1160.

     Section   8.3.   Title  to   Modifications.   Title  to  (a)  all  Required
Modifications,  (b) all  Nonseverable  Modifications  and (c) all  Modifications
financed  by  the  Owner  Lessor  by  an  Additional   Equity  Investment  or  a
Supplemental  Financing pursuant to Section 11.1 of the Participation  Agreement
shall (at no cost to the Owner  Lessor and with no  adjustment  to the  Purchase
Price or,  except as  provided  in Section  3.4 hereof and  Section  11.1 of the
Participation  Agreement,  Basic Lease Rent or Renewal  Lease Rent)  immediately
vest in the Owner Lessor,  and such  Modifications  shall immediately (i) become
subject to this Facility  Lease and, so long as the Lien of the Indenture  shall
not have been terminated or discharged,  the Lien of the Indenture,  and (ii) be
deemed part of the  Facility  for all  purposes of this  Facility  Lease and the
other Operative Documents.  The Lessee, at its own cost and expense,  shall take


                                       12
<PAGE>


such steps as the Owner Lessor and, so long as the Lien of the  Indenture  shall
not have been  terminated or  discharged,  the Indenture  Trustee may reasonably
require  from time to time to  confirm  that such  title has vested in the Owner
Lessor and that such title is subject to this Facility Lease and, so long as the
Lien of the Indenture shall not have been terminated or discharged,  the Lien of
the  Indenture.  No interest in any Optional  Modification  which is a Severable
Modification  (other than such Optional  Modifications which are financed by the
Owner Lessor by an  Additional  Equity  Investment or a  Supplemental  Financing
pursuant to Section 11.1 of the Participation  Agreement) (any such Modification
is referred to as  "Removable  Modification")  shall vest in the Owner Lessor or
become subject to this Facility  Lease or the Lien of the  Indenture;  provided,
however,  that if the Lessee  shall have caused a Removable  Modification  to be
made to the Facility, the Owner Lessor shall have the right to purchase any such
Removable Modification which shall not have been removed from the Facility prior
to the date which is twelve (12) months prior to the later of (x) the  scheduled
expiration of the Basic Lease Term or (y) the  scheduled  expiration of the last
Renewal Lease Term elected by the Lessee. The Owner Lessor may only exercise the
purchase option described in the proviso of the immediately  preceding  sentence
by  irrevocable  written  notice to the Lessee  during the six (6) month  period
commencing  on the date that is  twelve  (12)  months  prior to the later of the
dates specified in (x) and (y) of such proviso.  The purchase price for any such
Removable  Modification  shall be the then Fair Market Sales Value as determined
pursuant to Section 5.2(d).  During such six (6) month period,  the Lessee shall
not,  except  as  otherwise  required  to make  any  Required  Modification,  be
permitted to remove any  Removable  Modification.  Following  such six (6) month
period,  the Lessee  may,  at the  Lessee's  sole cost and  expense,  remove any
Removable  Modification  that the Owner Lessor has not elected to purchase.  The
Lessee  shall (at the Lessee's  sole cost and expense)  repair any damage to the
Facility caused by the removal by the Lessee of any Removable Modification.

SECTION 9.        NET LEASE

     This Facility Lease is a "net lease" and the Lessee's obligation to pay all
Rent,  including  Basic Lease Rent,  Renewal  Lease Rent and  Supplemental  Rent
payable  hereunder  (and all amounts,  including  Termination  Value (or amounts
computed by  reference  thereto),  in lieu of Basic Lease Rent or Renewal  Lease
Rent following  termination of this Facility Lease in whole or in part) shall be
absolute  and  unconditional  under any and all  circumstances  and shall not be
terminated,  extinguished,   diminished,  lost  or  otherwise  impaired  by  any
circumstance  of any  character,  including  by (i)  any  setoff,  counterclaim,
recoupment,  defense or other right which the Lessee may have  against the Owner
Lessor,  the Owner Trustee,  the Owner  Participant,  the Equity  Investor,  the
Indenture Trustee, any of their respective Affiliates,  the Pass Through Trustee
or any other  Person,  including  any claim as a result of any  breach by any of
said parties of any covenant or  provision in this  Facility  Lease or any other
Operative  Document,  (ii) any lack or  invalidity of title or any defect in the
title, condition,  design, operation,  merchantability or fitness for use of the
Facility or any Component or any portion of either  thereof,  or any eviction by
paramount  title  or  otherwise,  or any  unavailability  of the  Facility,  the
Facility Site, any Component or any portion of either thereof, any other portion
of the Facility,  or any part thereof,  (iii) any loss, theft or destruction of,
or damage to, the Facility or any Component or any portion of either  thereof or
interruption  or cessation in the use or possession  thereof or any part thereof
by the Lessee for any  reason  whatsoever  and of  whatever  duration,  (iv) the
condemnation, requisitioning, expropriation, seizure or other taking of title to


                                       13
<PAGE>


or use of the  Facility  Site,  the  Facility,  any  Component or any portion of
either thereof by any  Governmental  Entity or otherwise,  (v) the invalidity or
unenforceability  (or allegation of invalidity or  unenforceability)  or lack of
due  authorization  or other  infirmity  of this  Facility  Lease  or any  other
Operative  Document,  (vi) the lack of right,  power or  authority  of the Owner
Lessor to enter into this Facility Lease or any other Operative Document,  (vii)
any  ineligibility  of the  Facility or any  Component  or any portion of either
thereof for any particular use,  whether or not due to any failure of the Lessee
to comply with any Applicable  Law,  (viii) any event of "force  majeure" or any
frustration,  (ix) any legal requirement similar or dissimilar to the foregoing,
any present or future law to the contrary  notwithstanding,  (x) any insolvency,
bankruptcy, reorganization or similar proceeding by or against the Lessee or any
other Person, (xi) any Lien of any Person with respect to the Facility Site, the
Facility,  any  Component or any portion of either  thereof or any part thereof,
(xii) any  prohibition,  limitation or restriction of Lessee's use of all or any
part of the Facility,  the Facility  Site or the Ground  Interest or any portion
thereof or any interest therein or the interference with such use by any Person,
(xiii) the termination or loss of the Facility,  the Facility Site or the Ground
Interest  or any  portion  thereof,  any other  lease,  sublease,  right-of-way,
easement or other  interest in  personal or real  property  upon or to which any
portion of the Facility is located,  attached or  appurtenant  or in  connection
with  which any  portion of the  Facility  is used or  otherwise  affects or may
affect  the  Facility  or any  right  thereto,  (xiv)  any  breach,  default  or
misrepresentation  by Owner Lessor or any other Person under this Facility Lease
or any of the other Operative Documents,  (xv) any failure, omission or delay on
the part of any  Person  to  exercise  any  right,  power or  remedy  under  any
Operative Document,  (xvi) the taking or omission of any of the actions referred
to in any of the Operative Documents or (xvii) any other cause,  whether similar
or  dissimilar  to the  foregoing,  any  present or future law  notwithstanding,
except as expressly  set forth  herein or in any other  Operative  Document,  it
being the  intention of the parties  hereto that all Rent,  including  all Basic
Lease Rent and Renewal Lease Rent (and all amounts, including Termination Value,
in lieu of Basic Lease Rent or Renewal Lease Rent following  termination of this
Facility  Lease in  whole or in part)  payable  by the  Lessee  hereunder  shall
continue  to be payable in all  events in the manner and at times  provided  for
herein.  Such Rent,  including  Basic Lease Rent or Renewal  Lease Rent (and all
amounts, including Termination Value (or amounts computed by reference thereto),
in lieu of Basic Lease Rent or Renewal Lease Rent following  termination of this
Facility  Lease in whole or in part) shall not be subject to any  abatement  and
the payments  thereof  shall not be subject to any setoff or  reduction  for any
reason  whatsoever,  including any present or future claims of the Lessee or any
other Person  against the Owner  Lessor or any other Person under this  Facility
Lease or otherwise. To the extent permitted by Applicable Law, the Lessee hereby
waives 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 or
surrender this Facility Lease with respect to the Facility  except in accordance
with  Section 10, 13 or 14. If for any reason  whatsoever  this  Facility  Lease
shall be terminated in whole or in part by operation of law or otherwise, except
as specifically  provided herein, the Lessee  nonetheless  agrees, to the extent
permitted by Applicable  Law, to pay to the Owner Lessor an amount equal to each
installment  of Basic  Lease Rent (or, in  connection  with a  termination  of a
Renewal Lease Term,  Renewal Lease Rent) and all Supplemental Lease Rent due and
owing,  at the time such payment would have become due and payable in accordance
with the terms hereof had this Facility  Lease not been so  terminated.  Nothing
contained  herein  shall be  construed to waive any claim which the Lessee might
have under any of the Operative  Documents or otherwise or to limit the right of
the Lessee to make any claim it might have against the Owner Lessor or any other
Person  or to  pursue  such  claim  in such  manner  as the  Lessee  shall  deem
appropriate.


                                       14
<PAGE>


SECTION 10.       EVENTS OF LOSS

     Section  10.1.  Occurrence  of  Events  of  Loss.  (a) If an  Event of Loss
described in clauses (a),  (b) or (c) of the  definition  of Event of Loss shall
occur,  then the Lessee shall (i) promptly  notify the Owner  Lessor,  the Owner
Trustee,  the Owner  Participant and, so long as the Lien of the Indenture shall
not have been terminated or discharged,  the Indenture Trustee of the occurrence
thereof,  and (ii) if no Significant Lease Default or Lease Event of Default has
occurred and is continuing  (other than any  Significant  Lease Default or Lease
Event of Default  that  would be cured by such  rebuilding)  and  subject to the
satisfaction  of the  conditions  set  forth in  Section  10.3(a),  (b) and (e),
rebuild or replace the Facility,  so that the rebuilt or replacement facility as
a whole  shall have a current  and  residual  value,  remaining  useful life and
utility at least equal to that of the  Facility as a whole,  prior to such Event
of Loss  (assuming  the  Facility  was  then  in the  condition  required  to be
maintained  by the  terms  of this  Facility  Lease),  and  such  rebuilding  or
replacement  will not result in the  Facility's  being  "limited  use"  property
within the meaning of Revenue Procedure 2001-28,  2001-19 I.R.B. 1156 or Revenue
Procedure 2001-29,  2001-19 I.R.B. 1160; provided that the Lessee shall have the
right, in lieu of rebuilding or replacing the Facility,  upon irrevocable notice
given to the Owner  Lessor not later than twelve (12) months after such Event of
Loss has occurred,  to terminate this Facility Lease pursuant to Section 10.1(b)
hereof.

     If the Lessee  fails to duly  satisfy the  conditions  set forth in Section
10.3(a),  the Lessee will be deemed to have made the election to terminate  this
Facility  Lease  pursuant to Section  10.1(b) as of the end of the  twelve-month
period  referred  to in the  previous  sentence.  If the  Lessee  satisfies  the
conditions in Section  10.3(a),  but fails to satisfy the  conditions in Section
10.3(b) or (c), the Lessee will be deemed to have elected the termination option
as of the last day of the period by which the  rebuilding or  replacement  is to
commence specified in Section 10.3(b) or the period for completion  specified in
Section 10.3(c), as the case may be.

     (b) (i) If an Event of Loss  described  in  clause  (a),  (b) or (c) of the
definition  of Event of Loss  shall  have  occurred  and the  Lessee  shall have
elected  (or shall be deemed to have  elected)  not to rebuild  or  replace  the
Facility  pursuant to Section 10.1(a) hereof,  then, (A) in the case of an Event
of Loss  described in clause (a) or (b) of the definition  thereof,  on the date
set forth in the following  clauses (ii), (iii) or (iv) or (B) in the case of an
Event  of  Loss  described  in  clause  (c) of the  definition  thereof,  on the
Termination  Date next  occurring (1) at least three months after the occurrence
of such Event of Loss or (2) if  earlier,  at least one month  after  receipt of
insurance or  Requisition  proceeds in respect of such Event of Loss, the Lessee
shall terminate this Facility Lease.

          (ii) In connection  with any such  termination in the case of an Event
     of Loss described in clause (a) or (b) of the definition thereof, the Owner
     Lessor  may (A) tender  the  Facility  to the  Lessee,  in which  event the
     provisions of clauses  (iii) and (iv) of this Section  10.1(b) shall apply,
     or (B) subject to  prepayment  by the Owner Lessor of the Notes and payment
     by the Owner Lessor to the Lessee on the  Termination  Date  referred to in
     the next sentence of this Section 10.1(b)(ii) of the sum of any Overpayment


                                       15
<PAGE>


     of  Basic  Lease  Rent  as of  such  Termination  Date  plus,  unless  such
     Termination  Date is a Basic  Lease Rent  Payment  Date,  any  Interest  on
     Prepaid Rent accrued and unpaid as of such  Termination Date and the rights
     of any insurers under  policies  maintained by the Lessee and upon not less
     than 45 days'  written  notice to the  Lessee,  elect to  retain  the Owner
     Lessor's  Interest.  If the Owner Lessor  makes the  election  described in
     clause (B) of the  preceding  sentence,  the Lessee  shall pay to the Owner
     Lessor on the next  Termination  Date occurring at least 30 days after such
     election (w) if such  Termination  Date is a Rent Payment  Date,  any Basic
     Lease Rent or Renewal Lease Rent due and payable on such Termination  Date,
     plus (x) any unpaid Basic Lease Rent or Renewal  Lease Rent due before such
     Termination  Date, plus (y) any Underpayment of Basic Lease Rent as of such
     Termination  Date,  plus (z) all  other  Accrued  Supplemental  Lease  Rent
     (including  reasonable  documented  out-of-pocket costs and expenses of the
     Owner  Lessor,  the Owner  Trustee,  the Owner  Participant,  the Indenture
     Trustee and the Pass Through  Trustee  (excluding the fees and costs of any
     broker  unless  engaged  by  the  Lessee  on  the  Owner  Lessor's  behalf)
     associated  with the exercise of the  termination  option  pursuant to this
     Section 10.1(b)) due and payable on or prior to such Termination Date; upon
     payment of such amounts,  this Facility Lease shall  terminate with respect
     to the Facility.

          (iii)In  connection  with any  termination  in the case of an Event of
     Loss described in clause (a) or (b) of the definition  thereof with respect
     to which the Owner  Lessor  does not make the  election to retain the Owner
     Lessor's  Interest  described  in clause  (B) of Section  10.1(b)(ii),  the
     Lessee shall,  as  non-exclusive  agent for the Owner Lessor and subject to
     the rights of any insurers  under  policies  maintained by the Lessee,  use
     commercially  reasonable  efforts to sell the Owner Lessor's  Interest.  In
     addition,  the Lessee  may,  but shall be under no  obligation  to, make an
     offer to purchase  the Owner  Lessor's  Interest  and shall have a right of
     first refusal with respect to any offer received (pursuant to the terms and
     conditions  set  forth  in  Section  13.2 of the  Participation  Agreement,
     mutatis  mutandis);  provided that the Lessee  reasonably  demonstrates its
     ability to make such a purchase.

          (iv) (A) If at least one cash bid is  received on or prior to the next
     Termination Date occurring at least six months after the occurrence of such
     Event of Loss,  this  Facility  Lease shall  terminate on such  Termination
     Date,  and the Owner Lessor shall,  subject to the Lessee's  right of first
     refusal  (pursuant to the terms and conditions set forth in Section 13.2 of
     the  Participation  Agreement,  mutatis  mutandis) and to the rights of any
     insurers under policies  maintained by the Lessee,  sell the Owner Lessor's
     Interest to the party that  submitted  the highest  cash bid on an "as is",
     "where  is"  and  "with  all  faults"  basis,  without  representations  or
     warranties other than a warranty as to the absence of Owner Trustee's Liens
     attributable to the Owner Lessor and a warranty of the Owner Participant as
     to the absence of Owner  Participant's  Liens,  and all of the  proceeds of
     such sale will be for the account of the Owner Lessor; and the Lessee shall
     pay (1) the amount, if any, by which the Termination Value determined as of


                                       16
<PAGE>


     the  applicable  Termination  Date exceeds the sales price  received by the
     Owner Lessor for the Owner Lessor's Interest (net of the fees,  commissions
     and costs of any broker  engaged by the Lessee or any  Affiliate  thereof),
     plus (2) if such  Termination  Date is a Rent Payment Date, any Basic Lease
     Rent or Renewal Lease Rent due and payable on such  Termination  Date, plus
     (3) any  unpaid  Basic  Lease Rent or  Renewal  Lease Rent due before  such
     Termination  Date,  plus (4)  Accrued  Supplemental  Lease Rent  (including
     reasonable documented out-of-pocket costs and expenses of the Owner Lessor,
     the Owner Trustee,  the Owner  Participant,  the Indenture  Trustee and the
     Pass  Through  Trustee,  associated  with the  exercise of the  termination
     option  pursuant to this  Section  10.1(b))  due and payable on or prior to
     such Termination Date.

               (B) If (1) no cash  bids  are  received  on or  prior to the next
               Termination   Date  occurring  at  least  six  months  after  the
               occurrence  of such  Event  of Loss or (2) if any  cash  bids are
               received  but no sale is  consummated,  the Lessee  shall pay (w)
               Termination  Value as of such Termination  Date, plus (x) if such
               Termination  Date is a Rent Payment Date, any Basic Lease Rent or
               Renewal Lease Rent due and payable on such Termination Date, plus
               (y) any unpaid Basic Lease Rent or Renewal  Lease Rent due before
               such  Termination  Date, plus (z) all other Accrued  Supplemental
               Lease Rent (including reasonable  documented  out-of-pocket costs
               and expenses of the Owner Lessor,  the Owner  Trustee,  the Owner
               Participant,  the Indenture  Trustee and the Pass Through Trustee
               associated with the exercise of the  termination  option pursuant
               to this  Section  10.1(b))  due and  payable  on or prior to such
               Termination  Date,  and,  upon  payment  of  such  amounts,  this
               Facility Lease shall terminate.

          (v) If an Event of Loss  described in clause (c) of the  definition of
     Event of Loss shall have  occurred,  on the  Termination  Date described in
     clause (B) of Section  10.1(b)(i),  the  Lessee  shall pay (w)  Termination
     Value as of such  Termination  Date, plus (x) if such Termination Date is a
     Rent  Payment  Date,  any Basic  Lease Rent or  Renewal  Lease Rent due and
     payable on such  Termination  Date, plus (y) any unpaid Basic Lease Rent or
     Renewal  Lease Rent due before such  Termination  Date,  plus (z) all other
     Accrued   Supplemental   Lease  Rent   (including   reasonable   documented
     out-of-pocket  costs and expenses of the Owner Lessor,  the Owner  Trustee,
     the Owner  Participant,  the Indenture Trustee and the Pass Through Trustee
     associated  with the exercise of the  termination  option  pursuant to this
     Section 10.1(b)) due and payable on or prior to such Termination Date, and,
     upon payment of such amounts, this Facility Lease shall terminate.

     (c)  (i)  If an  Event  of  Loss  described  in  clause  (d)  or (e) of the
definition  of Event of Loss shall have  occurred,  then the  Lessee  shall,  as
non-exclusive agent for the Owner Lessor, use commercially reasonable efforts to
obtain cash bids for the Owner Lessor's Interest.  In connection with such Event
of Loss,  the Lessee may, but shall be under no obligation  to, make an offer to
purchase the  Facility  and shall have a right of first  refusal with respect to
any offer received.  Neither the Owner  Participant or any Affiliate thereof nor
the Owner Lessor may purchase the Owner  Lessor's  Interest in  connection  with
such Event of Loss.


                                       17
<PAGE>


          (ii) If at  least  one cash  bid is  received  on or prior to the next
     Termination  Date  occurring at least three months after the  occurrence of
     such Event of Loss, this Facility Lease shall terminate on such Termination
     Date and the Owner Lessor  shall,  subject to the  Lessee's  right of first
     refusal  (pursuant to the terms and conditions set forth in Section 13.2 of
     the Participation  Agreement,  mutatis  mutandis),  sell the Owner Lessor's
     Interest to the party that  submitted  the highest  cash bid on an "as is",
     "where  is"  and  "with  all  faults"  basis,  without  representations  or
     warranties other than a warranty as to the absence of Owner Trustee's Liens
     attributable to the Owner Lessor and a warranty of the Owner Participant as
     to the absence of Owner  Participant's  Liens,  and all of the  proceeds of
     such sale will be for the account of the Owner Lessor; and the Lessee shall
     pay (i) the amount, if any, by which the Termination Value determined as of
     the  applicable  Termination  Date exceeds the sales price  received by the
     Owner Lessor for the Owner Lessor's Interest (net of the fees,  commissions
     and costs of any broker  engaged by the Lessee or any  Affiliate  thereof),
     plus (ii) if such  Termination Date is a Rent Payment Date, any Basic Lease
     Rent or Renewal Lease Rent due and payable on such  Termination  Date, plus
     (iii) any unpaid  Basic  Lease Rent or Renewal  Lease Rent due before  such
     Termination  Date,  plus (iv) all other  Accrued  Supplemental  Lease  Rent
     (including  reasonable  documented  out-of-pocket costs and expenses of the
     Owner  Lessor,  the Owner  Trustee,  the Owner  Participant,  the Indenture
     Trustee and the Pass Through  Trustee  associated  with the exercise of the
     termination  option  pursuant to this  Section  10.1) due and payable on or
     prior to such Termination Date.

          (iii) If no cash bids are received on or prior to the next Termination
     Date  occurring at least three months after the occurrence of such Event of
     Loss or if any  cash  bids are  received  but no sale is  consummated,  the
     Lessee shall pay (w) Termination  Value as of such  Termination  Date, plus
     (x) if such  Termination  Date is a Rent Payment Date, any Basic Lease Rent
     or Renewal Lease Rent due and payable on such  Termination  Date,  plus (y)
     any  unpaid  Basic  Lease  Rent or  Renewal  Lease  Rent  due  before  such
     Termination  Date,  plus (z) all  other  Accrued  Supplemental  Lease  Rent
     (including  reasonable  documented  out-of-pocket costs and expenses of the
     Owner  Lessor,  the Owner  Trustee,  the Owner  Participant,  the Indenture
     Trustee and the Pass Through  Trustee  associated  with the exercise of the
     termination  option  pursuant to this  Section  10.1) due and payable on or
     prior to such Termination Date, and, upon payment of such amounts, (i) this
     Facility  Lease  shall  terminate  other  than,  to the extent set forth in
     clause (iii)(B) of this sentence,  the Lessee's  obligations under Sections
     7, 8 and 11 hereof,  (ii) if shutting  down the Facility does not eliminate
     the  circumstances  which gave the Owner  Participant  the right to declare
     such Event of Loss,  the Owner Lessor shall sell the  Facility,  subject to
     the  Lessee's  right of first  refusal,  and  (iii)  if  shutting  down the
     Facility  eliminates the circumstances which gave the Owner Participant the
     right to declare such Event of Loss,  (A) the  Facility  shall be shut down
     and (B) the  Lessee  may,  at its  option,  continue  marketing  the  Owner


                                       18
<PAGE>


     Lessor's  Interest  for up to an  additional  three  months (the  "Extended
     Marketing  Period")  during  which  time,  the  Lessee's  obligation  under
     Sections  7, 8 and 11 hereof  shall  continue.  If at least one cash bid is
     received  prior to the end of the  Extended  Marketing  Period,  the  Owner
     Lessor shall,  subject to the Lessee's right of first refusal  (pursuant to
     the terms and  conditions  set forth in Section  13.2 of the  Participation
     Agreement,  mutatis  mutandis),  sell the Owner  Lessor's  Interest  to the
     highest cash bidder on an "as is",  "where is" and "with all faults" basis,
     without  representations  or  warranties  other than a  warranty  as to the
     absence of Owner  Trustee's  Liens  attributable  to the Owner Lessor and a
     warranty of the Owner Participant as to the absence of Owner  Participant's
     Liens;  the  Lessee  shall  pay,  on an  After-Tax  Basis,  all  reasonable
     documented  out-of-pocket costs and expenses of the Owner Participant,  the
     Owner Lessor, the Owner Trustee, the Indenture Trustee and the Pass Through
     Trustee  associated  with the sale and the Owner  Lessor  shall pay the net
     cash  proceeds of the sale to the Lessee to the extent of payments  made by
     the Lessee under  clauses (w) and (z) above (but in the case of clause (z),
     only to the extent of payments described in the parenthetical  thereof). If
     there is no Extended  Marketing  Period or no offers are received  prior to
     the end of the Extended  Marketing Period,  the Owner Lessor shall sell the
     Facility  as scrap or  otherwise,  subject to the  Lessee's  right of first
     refusal  (pursuant to the terms and conditions set forth in Section 13.2 of
     the Participation  Agreement,  mutatis mutandis).  The Lessee's obligations
     under  Sections  7, 8 and 11  shall  terminate  at the end of the  Extended
     Marketing Period.

          (iv) Notwithstanding the foregoing provisions of this Section 10.1(c),
     in the case of an  Event  of Loss  described  in  clause  (d) or (e) of the
     definition  of Event of Loss  where  the  Facility  is  transferred  to the
     Lessee,  (i) if the  Lessee  (or its  designee)  shall  have  executed  and
     delivered an assumption  agreement to assume in full the Notes as permitted
     by and in accordance with Section 2.10(b) of the Indenture,  (ii) all other
     conditions contained in such Section 2.10(b) shall have been satisfied, and
     (iii) no  Significant  Lease  Default or Lease Event of Default  shall have
     occurred or be continuing after giving effect to such assumption, then, the
     obligation  of the Lessee to pay  Termination  Value shall be reduced by an
     amount equal to the outstanding principal amount of and accrued interest on
     the Notes so assumed by the Lessee.

     Section  10.2.  Termination  of Basic  Lease Rent and  Renewal  Lease Rent;
Application of Payments.

     (a) Upon the payment of all sums  required  to be paid  pursuant to Section
10.1,  (i) the  obligation  to pay Basic Lease Rent and Renewal  Lease Rent with
respect to the  Facility  shall  cease,  (ii) the Lessee shall cease to have any
other  liability  hereunder or under the other  Operative  Documents  except for
Supplemental  Lease Rent and other  obligations  (including those under Sections
9.1  and  9.2 of  the  Participation  Agreement  and  under  the  Tax  Indemnity
Agreement)  surviving  pursuant  to the  express  provisions  of  any  Operative
Document,  (iii)  unless  the  Lessee  assumes  the Notes  pursuant  to  Section
10.1(c)(iv), the Owner Lessor shall pay the portion of the outstanding principal
and accrued  interest on the Notes pursuant to Section 2.10(a) of the Indenture,
(iv) this Facility  Lease shall  terminate,  (v) the Owner Lessor shall,  at the


                                       19
<PAGE>


Lessee's  sole cost and expense,  execute and deliver to the Lessee a release or
termination  of this  Facility  Lease,  (vi) in the event the Owner  Lessor  has
elected   to  retain   the  Owner   Lessor's   Interest   pursuant   to  Section
10.1(b)(ii)(B),  the Lessee will return the Owner Lessor's Interest to the Owner
Lessor in accordance  with Section 5.1,  (vii) in the event the Owner Lessor has
not  elected  to  retain  the  Owner  Lessor's   Interest  pursuant  to  Section
10.1(b)(ii)(B) and a sale of the Owner Lessor's Interest is consummated pursuant
to the terms of Section 10.1,  the Owner Lessor will transfer (by an appropriate
instrument  of transfer in form and  substance  reasonably  satisfactory  to the
Owner  Lessor and prepared and recorded by and at the expense of the Lessee) the
Owner Lessor's Interest to the purchaser on an "as is", "where is" and "with all
faults" basis, without representations or warranties other than a warranty as to
the absence of Owner  Trustee's  Liens  attributable  to the Owner  Lessor and a
warranty  from the Owner  Participant  as to the absence of Owner  Participant's
Liens,  (viii) so long as the Lien of the Indenture  has not been  discharged or
terminated,  the Owner  Lessor  shall use all  reasonable  efforts  to cause the
Indenture  Trustee to discharge or terminate  the Lien of the Indenture and (ix)
the Owner Lessor shall execute and deliver, and shall use all reasonable efforts
to cause the Indenture Trustee to execute and deliver,  appropriate releases and
other documents or instruments  necessary or reasonably  requested by the Lessee
to effect the foregoing, all to be prepared, filed and recorded (as appropriate)
at the cost and expense of the Lessee.

     (b) Any payments  with respect to the Facility  received at any time by the
Owner Lessor,  the Owner Trustee,  the Indenture  Trustee or the Lessee from any
Governmental  Entity as a result of the occurrence of an Event of Loss described
in clause (c) of the definition of Event of Loss or from insurance proceeds as a
result of the occurrence of an Event of Loss described in clause (a), (b) or (d)
of the  definition  of Event of Loss  shall be paid to an account  specified  in
accordance  with  paragraph  (i) of  Schedule  D hereto  and shall be applied as
follows:

          (i) all such  payments  received  at any time by the  Lessee  shall be
     promptly paid to the Owner Lessor or if the Lien of the Indenture shall not
     have  been  terminated  or  discharged,   to  the  Indenture  Trustee,  for
     application pursuant to the following provisions of this Section 10.2;

          (ii) so much of such  payments  as shall not  exceed  the  Termination
     Value portion of the amount  required to be paid by the Lessee  pursuant to
     Section 10.1 shall be applied in reduction  of the Lessee's  obligation  to
     pay such  amount if not already  paid by the Lessee or, if already  paid by
     the Lessee, shall be applied to reimburse the Lessee for its payment of the
     Termination Value portion of such amount; and

          (iii) the balance, if any, of such payments remaining thereafter shall
     be apportioned  between the Owner Lessor and the Lessee as their  interests
     may appear.

     Notwithstanding the foregoing,  if the Lessee shall have elected to rebuild
or replace the  Facility  pursuant to Section  10.1(a),  (i) any  proceeds  from
insurance  maintained  by the Lessee and received by the Lessee or any Financing
Party as a result of the  occurrence of an Event of Loss described in clause (a)
or (b) of the  definition  of  Event of Loss or (ii)  any  Requisition  proceeds
received  as the  result  of an Event of Loss  described  in  clause  (c) of the
definition thereof shall be used to pay for, or to reimburse the Lessee for, the
costs of,  rebuilding or replacing the Facility in accordance  with the terms of
this Facility Lease and the Operative Documents.


                                       20
<PAGE>


     Section 10.3.  Rebuild or Replace.  (a) The Lessee's  ability to rebuild or
replace  the  Facility  pursuant  to  Section  10.1(a)  shall be  subject to the
fulfillment,  at  the  Lessee's  sole  cost  and  expense,  in  addition  to the
conditions contained in Section 10.1(a), of the following conditions:

          (i) receipt by the Owner  Participant  and, so long as the Lien of the
     Indenture  shall not have been  terminated  or  discharged,  the  Indenture
     Trustee,  prior to the last date of the twelve month period  referred to in
     the proviso of Section  10.1(a),  of: (A) a report of a licensed  engineer,
     which  licensed  engineer  shall be  reasonably  satisfactory  to the Owner
     Participant  and, so long as the Lien of the Indenture  shall not have been
     terminated or discharged,  the Indenture  Trustee (it being understood that
     an internal  engineer at KeySpan  would be considered  reasonable),  to the
     effect   that  the   rebuilding   or   replacement   of  the   Facility  is
     technologically  feasible and economically  viable and that such rebuilding
     or replacement  can be completed at least eighteen (18) months prior to the
     end of the Facility  Lease Term,  including  any Renewal Lease Term then in
     effect or elected by the Lessee,  and (B) an  appraisal  of an  independent
     appraiser  selected by the Lessee,  such appraiser and such appraisal to be
     reasonably  acceptable  to the Owner  Participant,  to the effect  that the
     Facility  as  a  whole  will,   after   completion  of  the  rebuilding  or
     replacement, have at least the same current and residual value, utility and
     remaining useful life as the Facility as a whole  immediately  prior to the
     Event of Loss (assuming the Facility was then in the condition  required to
     be maintained by the terms of this  Facility  Lease),  and (C) an Officer's
     Certificate  of the  Lessee  to the  reasonable  satisfaction  of the Owner
     Participant to the effect that (1) no Significant Lease Default or Event of
     Default shall have occurred and is continuing  (other than any  Significant
     Lease  Default  or  Lease  Event  of  Default  that  would be cured by such
     rebuilding  or  replacement),  and (2) the  Lessee has  adequate  financial
     resources,  from insurance proceeds,  Requisition proceeds or otherwise, to
     complete such rebuilding or replacement  (including  pursuant to a guaranty
     of its obligations by any of its Affiliates);

          (ii)  receipt by the Owner  Participant  prior to the last date of the
     twelve month period referred to in the proviso of Section 10.1(a), of (A) a
     favorable  (more likely than not) legal opinion of independent  tax counsel
     selected by the Owner Participant and reasonably satisfactory to the Lessee
     to the effect that such rebuilding or replacement  (including any extension
     of the Facility  Lease Term or payment of renewal rent  pursuant to Section
     10.3(e)) will not result in any material  incremental tax risk to the Owner
     Participant,  or (B) an indemnity  against any such incremental tax risk to
     the extent provided for under the Tax Indemnity Agreement;

          (iii) the Owner  Participant  shall not  suffer any  material  adverse
     accounting effect under GAAP as a result of such rebuilding or replacement;
     and


                                       21
<PAGE>


          (iv) the Lessee shall have demonstrated to the reasonable satisfaction
     of the Owner  Lessor  and, so long as the Lien of the  Indenture  shall not
     have  been  terminated  or  discharged,  the  Indenture  Trustee,  that all
     Governmental  Approvals  required in  connection  with such  rebuilding  or
     replacement have been obtained or can reasonably be expected to be obtained
     on or prior to the date required in connection therewith.

     (b) The Lessee shall cause the rebuilding or replacement of the Facility to
commence as soon as practicable, and in any event within eighteen (18) months of
the  occurrence  of the event that caused such Event of Loss and will cause work
on such  rebuilding or  replacement  to proceed  diligently  thereafter.  As the
rebuilding or  replacement of the Facility  progresses,  title to the rebuilt or
replacement  Facility shall vest in the Owner Lessor and such title shall become
subject to this Facility  Lease and, so long as the Lien of the Indenture  shall
not have been terminated or discharged,  the Lien of the Indenture automatically
without any further act by any Person.

     (c) On the date of the completion of such  rebuilding or replacement of the
Facility (the "Rebuilding  Closing Date"), the following documents shall be duly
authorized, executed and delivered and, if appropriate, filed for recordation by
the respective  party or parties  thereto and shall be in full force and effect,
and an executed  counterpart  of each  thereto  shall be  delivered to the Owner
Lessor, the Owner Trustee, the Owner Participant and, so long as the Lien of the
Indenture shall not have been terminated or discharged, the Indenture Trustee:

          (i)  supplements  to this Facility  Lease  subjecting  such rebuilt or
     replacement  facilities to this Facility  Lease (with no change in Purchase
     Price or the Basic  Lease  Rent or  Renewal  Lease Rent as a result of such
     rebuilding or replacement);

          (ii)   supplements  to  the  Indenture   subjecting  such  rebuilt  or
     replacement facilities to the Lien of the Indenture;

          (iii)  subject  to the  terms and  conditions  of  Section  5.8 of the
     Participation  Agreement,  such recordings and filings as may be reasonably
     requested by the Owner  Participant and the Indenture Trustee to be made or
     filed;

          (iv) an opinion of counsel of the Lessee (such  opinion and counsel to
     be reasonably satisfactory to the Owner Participant) to the effect that (A)
     the  supplements  to this  Facility  Lease  required  by  clause  (i) above
     constitute effective instruments for subjecting such rebuilt or replacement
     facilities to this Facility  Lease,  (B) the  supplements  to the Indenture
     required by clause (ii) above, if any, constitute effective instruments for
     subjecting  such  rebuilt  or  replacement  facilities  to the  Lien of the
     Indenture,  and (C) all filings and other  action  necessary to perfect and
     protect the Owner  Lessor's and, if  applicable,  the  Indenture  Trustee's
     interest in such rebuilt or replacement facilities have been accomplished;


                                       22
<PAGE>


          (v) an  appraisal by an  Independent  Appraiser,  certifying  that the
     rebuilt or  replacement  Facility  (A) has a current  and  residual  value,
     remaining  useful  life and  utility  at least  equal  to the  current  and
     residual  value,  remaining  useful life and utility that the Facility as a
     whole would have had on the Rebuilding  Closing Date had such Event of Loss
     not occurred  (assuming the Facility was then in the condition  required to
     be maintained by the terms of this Facility  Lease) and (B) is not "limited
     use"  property  within the meaning of Revenue  Procedure  2001-28,  2001-19
     I.R.B. 1156 or Revenue Procedure 2001-29, 2001-19 I.R.B. 1160;

          (vi) a report by a licensed engineer, which licensed engineer shall be
     reasonably  satisfactory to the Owner  Participant and, so long as the Lien
     of the  Indenture  shall  not  have  been  terminated  or  discharged,  the
     Indenture Trustee (it being understood that an internal engineer at KeySpan
     would be considered reasonable), certifying that the rebuilt or replacement
     Facility is in a state of repair and  condition  required by this  Facility
     Lease;

          (vii) an Officer's  Certificate  of the Lessee as to  compliance  with
     this Section 10.3 and that no  Significant  Lease Default or Lease Event of
     Default shall have occurred and be continuing as a result of the rebuild or
     replacement; and

          (viii)  satisfactory  evidence as to the compliance with Section 11 of
     this Facility Lease with respect to the rebuilt or replacement Facility.

If the Rebuilding Closing Date and the satisfaction of the foregoing  conditions
shall not have  occurred  by the  expiration  of the Basic Lease Term or, if the
Lessee has elected to renew this  Facility  Lease for one or more Renewal  Lease
Terms, the expiration of any Renewal Lease Term then in effect or elected by the
Lessee, then the Lessee shall be required to comply with Section 10.1(b) and the
Termination  Date shall be the first  Termination  Date that  occurs  after such
date.

     (d) Whether or not the  transactions  contemplated by this Section 10.3 are
consummated,  the Lessee agrees to pay or reimburse,  on an After-Tax Basis, any
reasonable,  documented  out-of-pocket costs or expenses  (including  reasonable
legal fees and expenses)  incurred by the Owner Lessor,  the Owner Trustee,  the
Owner  Participant,  the  Indenture  Trustee  and the Pass  Through  Trustee  in
connection with the transactions contemplated by this Section 10.3.

     (e) In  connection  with any such  Event of Loss in  respect  of which  the
Lessee  intends to rebuild or replace the  Facility if such Event of Loss occurs
after the last day upon which the Lessee may exercise a renewal right under this
Facility Lease, (i) the Facility Lease Term shall be automatically  extended for
such period of time as is  reasonably  necessary  for the Lessee to complete any
rebuilding  or  replacement  required  hereunder,  (ii) the Lessee  shall pay as
renewal  rent  during  any such  extended  term an  amount,  payable  monthly in
arrears,  equal to the average  monthly  Basic Lease Rent or Renewal  Lease Rent
paid during the Basic Lease Term or Renewal Lease Term, as the case may be, then
being extended,  and (iii) the Termination Value during such extended term shall
be the Termination  Value as of the end of the Basic Lease Term or Renewal Lease
Term,  as the  case  may be,  then  ending  without  giving  effect  to any such
extension.


                                       23
<PAGE>


Section 10.4.     Application of Payments Not Relating to an Event of Loss.

     (a) In the event that during the Facility  Lease Term the use of all or any
portion of the Facility is requisitioned or taken by or pursuant to a request of
any  Governmental  Entity under the power of eminent  domain or otherwise  for a
period which does not  constitute an Event of Loss,  the Lessee's  obligation to
pay all  installments  of Basic Lease Rent and Renewal Lease Rent shall continue
for the duration of such requisitioning or taking. Any sums payable for any such
period by such  Governmental  Entity as  compensation  for such  requisition  or
taking of possession  shall be applied in accordance with the terms of paragraph
(j) of Schedule D to this Facility Lease.

     (b) Any  insurance  proceeds  with respect to the Facility  received at any
time by the Owner Lessor,  the Indenture  Trustee or the Lessee under any of the
insurance policies required to be maintained by the Lessee under Section 11 as a
result  of any  damage  to the  Facility  or any  part  thereof  which  does not
constitute  an Event of Loss shall be applied  in  accordance  with the terms of
paragraph (j) of Schedule D to this Facility Lease.

     Section 10.5. Certain  Conditions to Termination.  Anything to the contrary
in this  Section  10  notwithstanding,  the Lessee  and the Owner  Lessor  agree
(without relieving the Owner Lessor of any liability hereunder) that, so long as
the Lien of the  Indenture  shall not have been  terminated  or  discharged,  no
termination  pursuant to this  Section 10 shall be  effective  and the  Lessee's
rights  and  obligations  under this  Facility  Lease  immediately  prior to the
election to  terminate  this  Facility  Lease  pursuant to this Section 10 shall
remain in full force and effect in all respects (regardless of whether the Owner
Lessor shall elect to retain or sell the Owner  Lessor's  Interest in connection
with such proposed  termination)  unless and until the Lessee shall have assumed
the Notes  pursuant to Section  10.1(c) or the Owner  Lessor shall have paid all
outstanding  principal  and accrued  interest  on the Notes  pursuant to Section
2.10(a) of the  Indenture  and all other  amounts due under the  Indenture as of
such proposed date of termination.

SECTION 11.       INSURANCE

     The Lessee will maintain (or cause to be maintained) the insurance required
to be maintained pursuant to Schedule D to this Facility Lease.

SECTION 12.       INSPECTION

     During the Facility Lease Term,  each of the Owner  Participant,  the Owner
Lessor,  the Owner Trustee,  and, so long as the Lien of the Indenture shall not
have been terminated or discharged,  the Indenture  Trustee and the Pass Through
Trustee and each of their  representatives may, during normal business hours, on
reasonable  (and, in any event, not less than five (5) Business Days') notice to
the Lessee and at their own risk and expense (except, at the expense but not the
risk, of the Lessee when a Significant Lease Default or a Lease Event of Default
has  occurred  and is  continuing),  inspect the  Facility  and the records with
respect to the operations and maintenance thereof, in the Lessee's custody or to
which the Lessee has  access so long as the  Lessee  has the  opportunity  to be
present; provided,  however, that so long as no Significant Lease Default, Lease


                                       24
<PAGE>


Event of  Default  or Lease  Default  occasioned  by a  breach  of the  Lessee's
obligations  under Section 7.1 shall have occurred and be continuing,  each such
Person shall only be entitled to make one  inspection in any twelve- (12-) month
period, provided,  further, however, that any such Person may make more than one
inspection  during the last twelve (12) months of the Facility Lease Term unless
the Lessee has  exercised  its option  under  Section 15 to renew this  Facility
Lease beyond such  twelve-  (12-) month  period.  Any such  inspection  will not
unreasonably  disturb or interfere  with the normal  operation or maintenance of
the  Facility  or the  surrounding  areas or the  conduct  by the  Lessee of its
business  and will be in  accordance  with the  Lessee's and any operator of the
Facility's safety, security, insurance and confidentiality programs. In no event
shall the Owner Lessor, the Owner Trustee, the Owner Participant,  the Indenture
Trustee or the Pass Through Trustee have any duty or obligation to make any such
inspection  and such  Persons  shall not incur any  liability or  obligation  by
reason of not making any such inspection.

SECTION 13.       TERMINATION OPTION FOR BURDENSOME EVENTS

     Section 13.1.  Election to Terminate.  So long as no Lease Event of Default
shall have occurred and be continuing,  the Lessee shall have the right,  at its
option,  upon at least 30 days' prior written notice (a "Burdensome  Termination
Notice") to the Owner Lessor, the Owner Trustee, the Owner Participant,  and, so
long as the Lien of the Indenture  shall not have been terminated or discharged,
the Indenture  Trustee and the Pass Through Trustee,  to terminate this Facility
Lease in whole on the Termination Date specified in such notice (the "Burdensome
Termination Date") (which shall be a date occurring not more than six (6) months
after the date of such notice or such longer  period (not to exceed  twelve (12)
months) as may be required to effect the consummation of such termination) if:

          (a) as a result of a change in  Applicable  Law or  interpretation  of
     Applicable Law by a court of competent  jurisdiction,  it shall have become
     illegal for the Lessee to continue this Facility Lease or for the Lessee to
     make payments under this Facility Lease or the other  Operative  Documents,
     and the  transactions  contemplated  by the Operative  Documents  cannot be
     restructured  to comply  with such  change  in  Applicable  Law in a manner
     reasonably  acceptable  to the  Lessee,  the Owner  Participant,  the Owner
     Lessor,  the Owner Trustee and, so long as the Lien of the Indenture  shall
     not have been terminated or discharged,  the Indenture Trustee and the Pass
     Through Trustee; or

          (b) one or more  events  outside  the  control  of the  Lessee  or any
     Affiliate  thereof  shall have  occurred  that will,  or can  reasonably be
     expected to, give rise to an obligation by the Lessee to incur an indemnity
     obligation  under the Tax Indemnity  Agreement or Section 9.1 or 9.2 of the
     Participation  Agreement;   provided,  that  (i)  such  indemnity  (or  the
     underlying cost or Tax) can be avoided in whole or in part if this Facility
     Lease is terminated and the Owner Lessor sells the Owner Lessor's  Interest
     and (ii) the amount of such avoided payments would exceed (x) (on a present
     value basis,  discounted at the Discount Rate to the Burdensome Termination
     Date, compounded on an annual basis to the Burdensome Termination Date) two
     percent (2%) of the Purchase  Price or (y)  $3,000,000  in the aggregate in
     any calendar year, and provided,  further,  that no such termination option
     shall exist if the applicable  indemnitee  shall waive its right to, or the
     Owner  Participant  shall arrange,  in its sole discretion,  for payment of


                                       25
<PAGE>


     (without reimbursement by the Lessee or any Affiliate thereof),  amounts of
     indemnification  payments under the Tax Indemnity  Agreement and/or Section
     9.1 or 9.2 of the Participation  Agreement,  in excess of such amount as to
     cause such avoided  payments,  computed in  accordance  with the  preceding
     proviso,  not to exceed (x) two percent (2%) of the  Purchase  Price or (y)
     $3,000,000 in the aggregate in any calendar year.

No termination of this Facility Lease pursuant to this Section 13.1 shall become
effective unless the conditions set forth in Section 13.5 are satisfied.  If the
Lessee does not give notice of its exercise of the termination option under this
Section 13.1 within twelve (12) months of the date the Lessee receives notice or
first has Actual Knowledge of an event or condition  described above, the Lessee
will lose its right to terminate  this Facility  Lease  pursuant to this Section
13.1 as a result of such event or condition.

     Section 13.2. Solicitation of Offers;  Payments Upon Termination.  (a) Upon
receipt of a termination  notice from the Lessee  pursuant to Section 13.1,  the
Owner Lessor may, but shall be under no obligation  to, sell the Owner  Lessor's
Interest  and,  at  the  request  of the  Owner  Lessor,  the  Lessee  will,  as
non-exclusive agent for the Owner Lessor, use commercially reasonable efforts to
obtain  cash bids for the  Owner  Lessor's  Interest.  In  connection  with such
termination,  the Lessee may, but shall be under no obligation to, make an offer
to purchase the Owner Lessor's  Interest and shall have a right of first refusal
(pursuant  to the  terms  and  conditions  set  forth  in  Section  13.2  of the
Participation  Agreement,  mutatis  mutandis) with respect to any offer received
from an  unaffiliated  third party (which may be exercised any time prior to the
Burdensome Termination Date), in connection with such sale. Only bona fide bids,
whether  from the  Lessee or a third  party,  to  purchase  the  Owner  Lessor's
Interest for cash on the Burdensome Termination Date on an "as is, where is" and
"with all  faults"  basis  without any  representation,  other than by the Owner
Lessor as to the  absence of Owner  Trustee's  Liens  attributable  to the Owner
Lessor  and a  warranty  of the Owner  Participant  as to the  absence  of Owner
Participant's  Liens,  shall be "Qualifying  Cash Bids". All the proceeds of any
such sale shall be for the account of the Owner Lessor; provided that so long as
the Lien of the  Indenture  shall not have been  terminated or  discharged,  the
proceeds of such sale, other than any Excepted Payments,  shall be paid directly
to the  Indenture  Trustee.  The Owner  Lessor shall be under no  obligation  to
accept any Qualifying Cash Bid. If the Owner Lessor receives any Qualifying Cash
Bids,  the Owner  Lessor  shall be deemed to have  accepted the highest such bid
received  by the  date  which  is 10  Business  Days  prior  to  the  Burdensome
Termination  Date unless the Owner Lessor  rejects such bid and elects to retain
the  Owner  Lessor's  Interest  in  writing  prior  to the  earlier  of (y)  the
expiration  date of such  bid and (z) the  date at least 45 days (15 days if the
Lessee has given less than 60 days notice of its election to terminate  pursuant
to Section 13.1(a)) prior to the Burdensome Termination Date.

     (b) If the Owner Lessor  receives any  Qualifying  Cash Bid  (regardless of
whether or not such Qualifying Cash Bid is accepted by the Owner Lessor), on the
Burdensome  Termination  Date,  the  Lessee  shall pay the Owner  Lessor (i) the
amount,  if any, by which the Termination  Value determined as of the Burdensome
Termination  Date  exceeds the sales price of the  highest  Qualifying  Cash Bid
received by the Owner  Lessor,  whether from the Lessee or a third party (net of
the fees,  commissions  and costs of any  broker  engaged  by the  Lessee or any
Affiliate  thereof),  plus (ii) all other  amounts due and payable by the Lessee
under  clauses (a), (b) and (c) of Section  13.3;  provided  that so long as the
Lien of the Indenture shall not have been terminated or discharged, such amounts
(other than Excepted Payments) shall be paid directly to the Indenture Trustee.


                                       26
<PAGE>


     (c) If no Qualifying Cash Bids are received by the Termination Date or if a
Qualifying  Cash Bid is accepted  (or deemed  accepted)  by the Owner Lessor but
does not, other than as a result of the Owner  Lessor's  failure to transfer the
Owner Lessor's Interest free and clear of Owner Trustee's Liens  attributable to
the Owner Lessor or the Owner Participant's  failure to provide a warranty as to
the absence of Owner Participant's Liens, result in a sale of the Facility,  the
Owner Lessor may elect in writing to retain the Owner Lessor's  Interest (and to
forego its right to receive payment of Termination Value) and require the Lessee
to pay to the Owner Lessor on the Burdensome  Termination  Date any Underpayment
of Basic Lease Rent as of the Burdensome  Termination  Date plus all amounts due
and payable by the Lessee  under  clauses  (a), (b) and (c) of Section 13.3 (but
not Termination Value);  provided,  however, that the Owner Lessor may not elect
to retain the Owner  Lessor's  Interest  unless it shall pay the  principal  and
interest on the Notes in full  pursuant to Section  2.10(a) of the Indenture and
shall  pay to the  Lessee  on the  Burdensome  Termination  Date  the sum of any
Overpayment  of Basic Lease Rent as of such  Burdensome  Termination  Date plus,
unless such Burdensome  Termination Date is a Basic Lease Rent Payment Date, any
Interest on Prepaid  Rent accrued and unpaid as of such  Burdensome  Termination
Date.  In the event the Owner  Lessor  elects not to retain  the Owner  Lessor's
Interest,  the Lessee may, in its sole  discretion,  (i) withdraw its Burdensome
Termination  Notice  (subject,  however,  to Section  5.10 of the  Participation
Agreement),  in which event this  Facility  Lease shall  continue and the Lessee
shall pay all  reasonable,  documented  out-of-pocket  costs and expenses of the
Owner Lessor, the Owner Trustee,  the Owner  Participant,  the Indenture Trustee
and the Pass  Through  Trustee in  connection  with the giving  (and  subsequent
withdrawal) of the Burdensome Termination Notice, or (ii) as non-exclusive agent
for the Owner  Lessor,  use  commercially  reasonable  efforts to sell the Owner
Lessor's  Interest,  in which  case the  Lessee  shall  be  required  to pay the
Termination  Value  determined as of the  Burdensome  Termination  Date plus all
amounts due and payable  under  clauses (a), (b) and (c) of Section 13.3. If the
Lessee does not withdraw its Burdensome  Termination Notice, the Lessee may, but
shall be under no  obligation  to, make an offer to purchase the Owner  Lessor's
Interest  and shall  have a right of first  refusal  (pursuant  to the terms and
conditions  set forth in Section 13.2 of the  Participation  Agreement,  mutatis
mutandis)  with  respect  to any  offer  received.  If at least  one cash bid is
received,  the Owner Lessor shall, subject to such right of first refusal,  sell
the Owner Lessor's  Interest to the party that submitted the highest cash bid on
an "as is", "where is" and "with all faults" basis,  without  representations or
warranties  other than a warranty as to the absence of Owner Trustee's Liens and
a warranty of the Owner  Participant  as to the  absence of Owner  Participant's
Liens. The Lessee shall pay all reasonable documented  out-of-pocket expenses of
the Owner Participant, the Owner Lessor, the Owner Trustee, the Equity Investor,
the Indenture  Trustee,  and the Pass Through  Trustee in  connection  with such
sale,  and the Owner Lessor  shall pay the net cash  proceeds of the sale to the
Lessee to the extent the Lessee has paid Termination Value and the amounts under
clauses (a) and (b) of Section 13.3 (but in the case of said clause (a), only to
the extent set forth in the parenthetical thereto).

     Section 13.3.  Procedure for Exercise of Termination  Option. If the Lessee
shall have  exercised its option to terminate  this Facility Lease under Section
13.1, on the Burdensome Termination Date specified in the Burdensome Termination
Notice,  the Lessee shall pay to the Owner  Lessor (a) all Accrued  Supplemental


                                       27
<PAGE>


Lease Rent  (including  all reasonable  out-of-pocket  costs and expenses of the
Owner Lessor, the Owner Trustee, the Owner Participant, the Equity Investor, the
Indenture  Trustee and the Pass Through Trustee  associated with the exercise of
the termination option pursuant to this Section 13 and all indemnity amounts not
obviated  by the  termination)  due and  payable on or prior to such  Burdensome
Termination Date, plus (b) if such Burdensome Termination Date is a Rent Payment
Date,  any Basic  Lease  Rent or  Renewal  Lease  Rent due and  payable  on such
Burdensome  Termination  Date,  plus (c) any unpaid  Basic Lease Rent or Renewal
Lease Rent due before such Burdensome Termination Date. All Rent payments (other
than Excepted  Payments) under Section 13.2 and this Section 13.3 shall, so long
as the Lien of Indenture shall not have been  terminated or discharged,  be made
to the  Indenture  Trustee.  So long as the Lessee shall not have  withdrawn its
Burdensome  Termination Notice pursuant to Section  13.2(c)(i),  upon payment of
all sums  specified in Section 13.2 and this Section 13.3 (i), the obligation to
pay Basic Lease Rent and Renewal  Lease Rent shall cease,  (ii) the Lessee shall
cease  to have any  other  liability  hereunder  or under  the  other  Operative
Documents,  except for Supplemental Lease Rent and other obligations  (including
those under  Sections  9.1 and 9.2 of the  Participation  Agreement  and the Tax
Indemnity  Agreement)  surviving  pursuant to the express terms of any Operative
Document,  (iii) unless the Lessee  assumes the Notes  pursuant to Section 13.4,
the Owner Lessor shall pay the outstanding principal and accrued interest on the
Notes  pursuant to Section  2.10(a) of the  Indenture,  (iv) this Facility Lease
shall  terminate,  (v) the Owner Lessor shall, at the Lessee's cost and expense,
execute  and  deliver to the Lessee a release or  termination  of this  Facility
Lease,  (vi) in connection with any sale of Owner Lessor's  Interest pursuant to
Section 13.2, the Owner Lessor shall  transfer (by an appropriate  instrument of
transfer in form and substance  reasonably  satisfactory to the Owner Lessor and
prepared  by and at the  expense  of the  Lessee)  all of its  right,  title and
interest in and to the Owner Lessor's Interest to the purchaser pursuant to this
Section  13.3 on an "as is",  "where is" and "with all  faults"  basis,  without
representations  or warranties  other than a warranty as to the absence of Owner
Trustee's  Liens and a warranty  of the Owner  Participant  as to the absence of
Owner  Participant's  Liens,  (vii) so long as the Lien of the Indenture has not
been discharged or terminated, the Owner Lessor shall use all reasonable efforts
to cause the Indenture  Trustee to discharge or terminate  such Lien, and (viii)
the Owner Lessor shall execute and deliver, and shall use all reasonable efforts
to cause the Indenture Trustee to execute and deliver,  appropriate releases and
other  documents or instruments  necessary or desirable to effect the foregoing,
all to be prepared,  filed and recorded (as appropriate) at the cost and expense
of the Lessee. It shall be a condition of the termination of this Facility Lease
pursuant  to this  Section  13 that  the  Lessee  shall  pay all  amounts  it is
obligated to pay under  Section 13.2 and this Section  13.3. If the Lessee fails
to consummate the  termination  option under this Section 13 after giving notice
of its  intention to do so, (i) the  Facility  Lease shall  continue,  (ii) such
failure to consummate  shall not constitute a default under this Facility Lease,
and (iii) if such failure is a consequence of a failure of the Lessee to fulfill
its  obligations  under  this  Section  13,  the  Lessee  will lose its right to
terminate  this Facility  Lease  pursuant to this Section 13 as a result of such
event or condition  during the remainder of the Facility Lease Term.  Whether or
not this Facility Lease is terminated,  the Lessee shall in any event pay, on an
After-Tax Basis, all reasonable,  documented out-of-pocket costs and expenses of
the Owner Lessor, the Owner Trustee, the Owner Participant, the Equity Investor,
the  Indenture  Trustee  and the Pass  Through  Trustee in  connection  with the
exercise by the Lessee of its right to terminate  this Facility Lease under this
Section 13.


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<PAGE>


     Section 13.4.  Assumption of the Notes.  Notwithstanding  the provisions of
Section 13.2, if (a)(1) the Lessee submits a Qualifying  Cash Bid, and the Owner
Lessor accepts (or is deemed to have accepted) such  Qualifying Cash Bid, or (2)
the Lessee  purchases  the  Facility  pursuant to Section  13.2(c)(ii),  (b) the
Lessee (or its  designee)  shall  have  executed  and  delivered  an  assumption
agreement  to assume in full the Notes as permitted  by and in  accordance  with
Section  2.10(b) of the Indenture,  (c) all other  conditions  contained in such
Section 2.10(b) shall have been satisfied,  and (d) no Significant Lease Default
or Lease Event of Default  shall have  occurred and be  continuing  after giving
effect to such  assumption,  then the  amounts  otherwise  payable by the Lessee
pursuant to this Section 13 shall be reduced by the outstanding principal amount
of and accrued interest on the Notes so assumed by the Lessee.

     Section 13.5. Certain  Conditions to Termination.  Anything to the contrary
in this  Section  13  notwithstanding,  the Lessee  and the Owner  Lessor  agree
(without relieving the Owner Lessor of any liability hereunder) that, so long as
the Lien of the  Indenture  shall not have been  terminated  or  discharged,  no
termination  of this  Facility  Lease  pursuant  to this  Section  13  shall  be
effective and the Lessee's  rights and  obligations  under this  Facility  Lease
immediately  prior to the electing to terminate  this Facility Lease pursuant to
Section 13.1 shall  remain in full force and effect in all respects  (regardless
of whether the Owner  Lessor  shall  elect to retain or sell the Owner  Lessor's
Interest in  connection  with such  proposed  termination)  unless and until the
Lessee shall have assumed the Notes pursuant to Section 13.4 or the Owner Lessor
shall have paid all  outstanding  principal  and accrued  interest on the Lessor
Notes  pursuant to Section 13.3 and all other amounts due under the Indenture on
such proposed date of termination.

SECTION 14.       TERMINATION FOR OBSOLESCENCE

     Section 14.1.  Termination.  Upon at least six months' prior written notice
to the Owner Lessor,  the Owner Trustee,  the Owner  Participant and, so long as
the Lien of the Indenture has not been  terminated or discharged,  the Indenture
Trustee and the Pass Through  Trustee  (which notice shall be  accompanied  by a
certification  by the treasurer (or the equivalent  thereof) of the Guarantor as
to one or more of the  matters  described  in clauses  (i) and (ii) below and an
Officer's  Certificate  setting forth in reasonable detail the basis on which it
is exercising this  termination  option),  the Lessee shall have the option,  so
long as no  Significant  Lease  Default  or Lease  Event of  Default  shall have
occurred and be continuing  on the proposed  Obsolescence  Termination  Date, to
terminate this Facility Lease on any Termination  Date occurring on or after the
fifth  anniversary of the Closing Date (the date of termination  selected by the
Lessee being the  "Obsolescence  Termination  Date") on the terms and conditions
set forth in this Section 14 if the  treasurer of the  Guarantor  determines  in
good faith that:

          (i) the Facility is economically or technologically obsolete, or

          (ii) the  Facility  is surplus to the  Lessee's  needs or is no longer
     useful in its trade or business,

          in  each  case,  as a  result  of  (a) a  change  in  Applicable  Law,
     regulation or tariff of general  application,  or imposition by FERC or any
     other Governmental  Entity having or claiming  jurisdiction over the Lessee
     or the Facility of any  conditions  or  requirements  (including  requiring
     significant  capital  improvement to the Facility)  upon the  availability,


                                       29
<PAGE>


     continued  effectiveness  or renewal of any license or permit  required for
     the  ownership  or  operation of the  Facility  (any such  circumstance,  a
     "Regulatory  Obsolescence  Event"),  (b) a change  in the  markets  for the
     wholesale purchase and/or sale of energy or (c) any other reason.

No termination of this Facility Lease pursuant to this Section 14.1 shall become
effective unless the conditions set forth in Section 14.5 hereof are satisfied.

     Section 14.2.  Solicitation  of Offers.  If the Lessee shall give the Owner
Lessor  notice  pursuant  to Section  14.1 and the Owner  Lessor  shall not have
elected to retain  the Owner  Lessor's  Interest  with  respect to the  Facility
pursuant to Section 14.3 hereof,  the Lessee shall, as  non-exclusive  agent for
the Owner Lessor, use its commercially reasonable efforts to obtain bids for the
sale of and, subject to Section 14.5 hereof, sell the Owner Lessor's Interest on
the Obsolescence  Termination Date, and all of the proceeds of such sale will be
for the account of the Owner  Lessor;  provided  that so long as the Lien of the
Indenture  shall not have been  terminated or  discharged,  the proceeds of such
sale shall be paid  directly to the  Indenture  Trustee.  The Owner Lessor shall
also have the  right,  but no  obligation,  to obtain  bids for the sale of such
Owner Lessor's Interest either directly or through agents other than the Lessee.
At least 90 days prior to the  Obsolescence  Termination  Date the Lessee  shall
certify to the Owner Lessor and the  Indenture  Trustee  each bid or offer,  the
amount and terms  thereof and the name and address of the party (which shall not
be the  Lessee,  any  Affiliate  of the Lessee or any third  party with whom the
Lessee or an  Affiliate  of the Lessee has an  arrangement  to sell or lease the
Owner  Lessor's  Interest to the Lessee or an  Affiliate  thereof,  or to use or
operate the Facility for the Lessee or an Affiliate thereof or to generate power
for the benefit of the Lessee or such  Affiliate  after the  termination of this
Facility Lease) submitting such bid or offer.

     Section 14.3. Right of Owner Lessor to Retain the Owner Lessor's  Interest.
The Owner Lessor may  irrevocably  elect to retain,  rather than sell, the Owner
Lessor's  Interest by giving  notice to the Lessee at least 90 days prior to the
Obsolescence  Termination  Date. If the Owner Lessor elects to retain such Owner
Lessor's Interest pursuant to this Section 14.3, on the Obsolescence Termination
Date the Lessee shall pay to the Owner Lessor (a) all Accrued Supplemental Lease
Rent (including all reasonable,  documented  out-of-pocket costs and expenses of
the Owner  Lessor,  the Owner  Trustee,  the Owner  Participant,  the  Indenture
Trustee and the Pass Through Trustee (excluding the fees and costs of any broker
unless engaged by the Lessee on the Owner Lessor's  behalf)  associated with the
exercise  of the  termination  option  pursuant  to this  Section  14.3) due and
payable on such  Obsolescence  Termination  Date, plus (b) if such  Obsolescence
Termination  Date is also a Rent Payment  Date,  any Basic Lease Rent or Renewal
Lease Rent due and payable on such  Obsolescence  Termination Date, plus (c) any
unpaid  Basic  Lease Rent or Renewal  Lease  Rent due before  such  Obsolescence
Termination  Date, plus (d) any Make Whole Premium due on the Notes arising from
a  termination  pursuant to Section  14.1 not due to a  Regulatory  Obsolescence
Event,  plus (e) any  Underpayment  of Basic Lease Rent as of such  Obsolescence
Termination Date, but the Lessee shall not be required to pay Termination Value.
All Rent payments (other than Excepted  Payments) under this Section 14.3 shall,
so  long as the  Lien  of the  Indenture  shall  not  have  been  terminated  or
discharged,  be made to the Indenture Trustee. Upon payment of all sums required
to be paid pursuant to this Section 14.3,  (i) the obligation to pay Basic Lease
Rent and Renewal  Lease Rent shall cease to accrue,  (ii) the Lessee shall cease


                                       30
<PAGE>


to have any other liability  hereunder or under the other  Operative  Documents,
except for Supplemental Lease Rent and other obligations  (including those under
Sections  9.1  and 9.2 of the  Participation  Agreement  and  the Tax  Indemnity
Agreement)  surviving  pursuant to the express terms of any Operative  Document,
(iii) the Owner Lessor shall pay the outstanding  principal and accrued interest
(and Make Whole Premium, if applicable) on the Notes payable pursuant to Section
2.10(a) or (c) of the Indenture, as applicable, and to the Lessee the sum of any
Overpayment of Basic Lease Rent as of such  Obsolescence  Termination  Date and,
unless such  Obsolescence  Termination  Date is a Basic Lease Rent Payment Date,
any Interest on Prepaid Rent as of such Obsolescence Termination Date, (iv) this
Facility Lease shall terminate, (v) the Owner Lessor shall, at the Lessee's cost
and expense, execute and deliver to the Lessee a release and termination of this
Facility Lease,  (vi) the Lessee will return the Owner Lessor's  Interest to the
Owner Lessor in  accordance  with Section 5.1,  (vii) so long as the Lien of the
Indenture has not been discharged or terminated,  the Owner Lessor shall use all
reasonable efforts to cause the Indenture Trustee to terminate or discharge such
Lien,  and (viii) the Owner Lessor shall execute and deliver,  and shall use all
reasonable  efforts  to cause the  Indenture  Trustee to  execute  and  deliver,
appropriate  releases and other documents or instruments  necessary or desirable
to effect the foregoing, all to be prepared, filed and recorded (as appropriate)
at  the  cost  and  expense  of the  Lessee.  It  shall  be a  condition  to the
termination  of this  Facility  Lease  pursuant to this Section  14.3,  that the
Lessee  shall pay all amounts  that it is  obligated  to pay under this  Section
14.3.

     Section 14.4.  Procedure for Exercise of Termination  Option.  If the Owner
Lessor has not elected to retain the Owner Lessor's  Interest in accordance with
Section 14.3 hereof, on the Obsolescence Termination Date the Owner Lessor shall
sell the Owner Lessor's Interest under this Section 14.4 hereof to the bidder or
bidders (which shall not be the Lessee, any Affiliate thereof or any third party
with whom the Lessee or an Affiliate of the Lessee has an arrangement to sell or
lease the Owner  Lessor's  Interest to the Lessee or an Affiliate  thereof or to
use or  operate  the  Facility  for the  Lessee or an  Affiliate  thereof  or to
generate  power  for the  benefit  of the  Lessee  or such  Affiliate  after the
termination of this Facility Lease),  that shall have submitted the highest cash
bid.  In  addition,  the Lessee  shall  certify to the Owner  Lessor,  the Owner
Trustee,  the Owner  Participant and, so long as the Lien of the Indenture shall
not have been  terminated  or  discharged,  the  Indenture  Trustee and the Pass
Through Trustee that such buyer is not the Lessee,  any Affiliate thereof or any
third  party  with  whom  the  Lessee  or an  Affiliate  of  the  Lessee  has an
arrangement  to sell or lease the Owner  Lessor's  Interest  to the Lessee or an
Affiliate  thereof  or to use or  operate  the  Facility  for the  Lessee  or an
Affiliate  thereof or to  generate  power for the  benefit of the Lessee or such
Affiliate  after the  termination of this Facility  Lease.  On the  Obsolescence
Termination  Date,  the Lessee shall pay to the Owner Lessor (a) the excess,  if
any, of Termination Value determined as of such  Obsolescence  Termination Date,
over the total  sales  price of the Owner  Lessor's  Interest  (net of the fees,
commissions  and costs of any  broker  engaged  by the  Lessee or any  Affiliate
thereof on the Owner Lessor's behalf), plus (b) if such Obsolescence Termination
Date is also a Rent Payment  Date,  any Basic Lease Rent or Renewal Rent due and
payable on such  Obsolescence  Termination Date, plus (c) any unpaid Basic Lease
Rent or Renewal Lease Rent due on or before such Obsolescence  Termination Date,
plus  (d)  all  amounts  of  Accrued  Supplemental  Lease  Rent  (including  all
reasonable, documented out-of-pocket costs and expenses of the Owner Lessor, the
Owner Trustee, the Owner Participant, the Equity Investor, the Indenture Trustee
and the Pass Through Trustee  (excluding the fees and costs of any broker unless
engaged by the Lessee on the Owner Lessor's behalf) associated with the exercise
of the  termination  option pursuant to this Section 14) due and payable on such


                                       31
<PAGE>


Obsolescence  Termination Date, plus (e) any Make Whole Premium due on the Notes
arising  from a  termination  pursuant to Section  14.1 not due to a  Regulatory
Obsolescence  Event. All Rent payments (other than Excepted Payments) under this
Section  14.4 shall,  so long as the Lien of the  Indenture  shall not have been
terminated or discharged,  be made to the Indenture Trustee. Upon the payment of
all sums required to be paid pursuant to this Section 14.4,  (i) the  obligation
to pay Basic  Lease Rent and  Renewal  Lease Rent shall  cease,  (ii) the Lessee
shall cease to have any other  liability  hereunder or under the other Operative
Documents except for Supplemental  Lease Rent and other  obligations  (including
those under  Sections  9.1 and 9.2 of the  Participation  Agreement  and the Tax
Indemnity  Agreement)  surviving  pursuant to the express terms of any Operative
Document,  (iii) the Owner Lessor will pay the outstanding principal and accrued
interest (and Make Whole Premium, if applicable) on the Notes,  payable pursuant
to Section  2.10(a) or (c) of the  Indenture,  (iv) this  Facility  Lease  shall
terminate, (v) the Owner Lessor shall, at the Lessee's cost and expense, execute
and deliver to the Lessee a release or termination of this Facility Lease,  (vi)
the Owner Lessor will transfer (by an appropriate instrument of transfer in form
and  substance  reasonably  satisfactory  to the Owner  Lessor and  prepared and
recorded by and at the expense of the Lessee) the Owner Lessor's  Interest under
this Section  14.4,  to the  purchaser  on an "as is",  "where is" and "with all
faults" basis, without representations or warranties other than a warranty as to
the absence of Owner Trustee's  Liens and a warranty from the Owner  Participant
as to the absence of Owner Participant's Liens, (vii) so long as the Lien of the
Indenture has not been discharged or terminated,  the Owner Lessor shall use all
reasonable efforts to cause the Indenture Trustee to discharge or terminate such
Lien,  and (viii) the Owner Lessor shall execute and deliver,  and shall use all
reasonable  efforts  to cause the  Indenture  Trustee to  execute  and  deliver,
appropriate  releases and other documents or instruments  necessary or desirable
to effect the foregoing, all to be prepared, filed and recorded (as appropriate)
at the sole cost and expense of the Lessee.  Unless the Owner  Lessor shall have
elected to retain the Owner  Lessor's  Interest  pursuant to Section 14.3 or the
Owner  Lessor with the consent of the Lessee  shall have  entered into a legally
binding  contract to sell the Owner  Lessor's  Interest,  the Lessee may, at its
election,  revoke  its  notice  of  termination  at least 30 days'  prior to the
proposed Obsolescence Termination Date by giving notice to the Owner Lessor, the
Owner Trustee,  the Owner  Participant and, so long as the Lien of the Indenture
shall not have been terminated or discharged, the Indenture Trustee and the Pass
Through  Trustee in which  event this  Facility  Lease shall  continue,  and the
Lessee  will  reimburse  the  Owner  Lessor,   the  Owner  Trustee,   the  Owner
Participant,  the Equity  Investor,  the Indenture  Trustee and the Pass Through
Trustee,  on an After-Tax  Basis, for all reasonable,  documented  out-of-pocket
costs and expenses  incurred in  connection  with the election  (and  subsequent
revocation)  by the Lessee of its right to terminate  this Facility  Lease under
this Section 14;  provided,  however,  that the Lessee shall not be permitted to
initiate a notice to  terminate  pursuant to Section 14.1 more than twice in any
five (5) year period.  The Owner Lessor shall be under no duty to solicit  bids,
to inquire into the efforts of the Lessee to obtain bids or  otherwise  take any
action in arranging any such sale of the Owner Lessor's  Interest other than, if
the Owner  Lessor  has not  elected to retain the Owner  Lessor's  Interest,  to
transfer  the Owner  Lessor's  Interest in  accordance  with clause (vi) of this
Section  14.4.  It shall be a  condition  of the Owner  Lessor's  obligation  to
consummate a sale of the Owner  Lessor's  Interest that the Lessee shall pay all
amounts it is obligated to pay under this Section  14.4.  If no sale shall occur
on the Obsolescence  Termination Date, the notice of termination shall be deemed
revoked (subject,  however, to Section 5.10 of the Participation  Agreement) and
this Facility Lease shall  continue in full force and effect in accordance  with
its terms (without  prejudice to the Lessee's right to exercise its rights under
this Section 14).


                                       32
<PAGE>


     Section 14.5. Certain  Conditions to Termination.  Anything to the contrary
in this  Section  14  notwithstanding,  the Lessee  and the Owner  Lessor  agree
(without relieving the Owner Lessor of any liability hereunder) that, so long as
the Lien of the  Indenture  shall not have been  terminated  or  discharged,  no
termination  pursuant to this  Section 14 shall be  effective  and the  Lessee's
rights and obligations  under this Facility Lease shall remain in full force and
effect in all  respects  (regardless  of whether the Owner Lessor shall elect to
retain or sell the Owner  Lessor's  Interest in  connection  with such  proposed
termination)  unless and until the Owner Lessor shall have paid the  outstanding
principal and accrued  interest on the Notes payable pursuant to Section 2.10(a)
or (c) of the  Indenture  and the Lessee shall have paid any Make Whole  Premium
due on the Notes arising from a termination  pursuant to Section 14.1 not due to
a Regulatory  Obsolescence  Event, and all other amounts due under the Indenture
with respect thereto shall have been paid.

SECTION 15.       FACILITY LEASE RENEWAL

     Section 15.1. First Wintergreen Renewal Lease Term. Unless a Lease Event of
Default shall have occurred and be continuing,  not earlier than thirty-six (36)
months and not later than  twelve  (12) months  prior to the  expiration  of the
Basic Lease  Term,  the Lessee may deliver to the Owner  Lessor  written  notice
(which notice may be in addition to a notice of the Lessee's  tentative interest
in  electing  an FMV  Renewal  Lease Term under  Section  15.3) of the  Lessee's
tentative  interest  in  renewing  this  Facility  Lease for a term (the  "First
Wintergreen Renewal Lease Term") commencing on the day following the last day of
the Basic  Lease Term and ending on a date (a) as of which the sum of the number
of years of the  proposed  First  Wintergreen  Renewal  Lease Term and the Basic
Lease Term is not more than 75% of the  estimated  economic  useful  life of the
Facility  measured  from the Closing  Date,  but  determined  by an  Independent
Appraiser  (which  Independent  Appraiser  shall be  selected  by the Lessee and
reasonably  acceptable  to the Owner  Lessor) in  accordance  with the Appraisal
Procedure not more than thirty-six (36) months before the end of the Basic Lease
Term,  and (b) as of which  the  estimated  fair  market  value of the  Facility
determined, by such Independent Appraiser,  subsequent to the Lessee's tentative
election  of the First  Wintergreen  Renewal  Lease Term (but not  earlier  than
thirty-six  (36) months prior to the expiration of the Basic Lease Term),  shall
equal or exceed twenty percent (20%) of the Purchase Price (without  taking into
account  inflation  or deflation  subsequent  to the Closing  Date).  Unless the
Lessee shall have  irrevocably  elected to renew this Facility  Lease for an FMV
Renewal  Lease Term under  Section  15.3,  and  provided  that no Lease Event of
Default  shall have  occurred and be continuing on such notice date, on or prior
to twelve (12) months before the  expiration of the Basic Lease Term, the Lessee
may deliver to the Owner Lessor a further notice in writing irrevocably electing
to renew  this  Facility  Lease for the First  Wintergreen  Renewal  Lease  Term
determined as aforesaid and,  subject to no  Significant  Lease Default or Lease
Event of Default  having  occurred and  continuing  on the last day of the Basic
Lease Term, the First Wintergreen Renewal Lease Term shall thereupon take effect
as provided herein.


                                       33
<PAGE>


     Section  15.2.  Second  Wintergreen  Renewal  Lease Term.  Not earlier than
thirty-six  (36)  months  and not later than  twelve  (12)  months  prior to the
expiration of the First Wintergreen  Renewal Lease Term, unless a Lease Event of
Default  shall have  occurred and be  continuing,  the Lessee may deliver to the
Owner Lessor  written notice (which notice may be in addition to a notice of the
Lessee's  tentative interest in electing an FMV Renewal Lease Term under Section
15.3) of the Lessee's  tentative  interest in renewing this Facility Lease for a
term (the "Second  Wintergreen  Renewal  Lease Term" and together with the First
Wintergreen   Renewal  Lease  Term,  the  "Wintergreen   Renewal  Lease  Terms")
commencing on the day following  the last day of the First  Wintergreen  Renewal
Lease  Term and  ending on a date (a) as of which the sum of the number of years
of the proposed  Wintergreen Renewal Lease Terms and the Basic Lease Term is not
more than 75% of the  estimated  economic  useful life of the Facility  measured
from the  Closing  Date,  but  determined  by an  Independent  Appraiser  (which
Independent  Appraiser shall be selected by the Lessee and reasonably acceptable
to the Owner  Lessor) in accordance  with the Appraisal  Procedure not more than
thirty-six  (36) months  before the end of the First  Wintergreen  Renewal Lease
Term,  and (b) as of which  the  estimated  fair  market  value of the  Facility
determined, by such Independent Appraiser,  subsequent to the Lessee's tentative
election of the Second  Wintergreen  Renewal  Lease Term (but not  earlier  than
thirty-six (36) months prior to the expiration of the First Wintergreen  Renewal
Lease Term),  shall equal or exceed 20% of the Purchase  Price  (without  taking
into account inflation or deflation  subsequent to the Closing Date). Unless the
Lessee shall have  irrevocably  elected to renew this  Facility  Lease for a FMV
Renewal  Lease Term under  Section  15.3,  and  provided  that no Lease Event of
Default  shall have  occurred and be continuing on such notice date, on or prior
to twelve (12) months  before the  expiration of the First  Wintergreen  Renewal
Lease  Term,  the Lessee may  deliver  to the Owner  Lessor a further  notice in
writing  irrevocably  electing  to renew  this  Facility  Lease  for the  Second
Wintergreen  Renewal  Lease Term  determined  as  aforesaid  and,  subject to no
Significant  Lease  Default  or  Lease  Event of  Default  having  occurred  and
continuing  on the last day of the First  Wintergreen  Renewal  Lease Term,  the
Second  Wintergreen  Renewal Lease Term shall  thereupon take effect as provided
herein.

     Section  15.3.  Fair Market Value  Renewal  Lease  Terms.  Not earlier than
thirty-six  (36)  months  and not later than  twelve  (12)  months  prior to the
expiration of the Basic Lease Term,  the First  Wintergreen  Renewal Lease Term,
the Second  Wintergreen  Renewal  Lease Term,  or any other  Renewal Lease Term,
unless a Lease  Event of Default  shall have  occurred  and be  continuing,  the
Lessee may deliver to the Owner Lessor  written  notice  (which notice may be in
addition to a notice of the  Lessee's  tentative  interest in electing the First
Wintergreen  Renewal Lease Term or the Second Wintergreen Renewal Lease Term) of
the Lessee's tentative interest in renewing this Facility Lease for a term (each
such term, a "FMV Renewal Lease Term")  commencing on the day following the last
day of the Basic  Lease Term or a Renewal  Lease  Term  otherwise  expiring  and
extending for no fewer than three years and no more than five years.  Unless the
Lessee  shall  have  irrevocably  elected  to renew  this  Facility  Lease for a
Wintergreen  Renewal  Lease Term  pursuant  to  Sections  15.1 or 15.2 (it being
understood  that the exercise by the Lessee of its right to renew this  Facility
Lease at the end of the Basic Lease Term or at the end of the First  Wintergreen
Renewal Lease Term pursuant to Sections 15.1 or 15.2 hereof, respectively, shall
not  impair  its  right  to renew  this  Facility  Lease at any time  thereafter
pursuant to this  Section  15.3),  and  provided  that no Lease Event of Default
shall have  occurred and be continuing on any such notice date or on the date of
expiration  of the  Basic  Lease  Term or the  Renewal  Lease  Term  immediately
preceding such FMV Renewal Lease Term, as the case may be, on or prior to twelve
(12)  months  before the  expiration  of the  existing  Basic  Lease Term or the


                                       34
<PAGE>


relevant  Renewal  Lease Term as the case may be, the Lessee may  deliver to the
Owner  Lessor a further  notice in writing  irrevocably  electing  to renew this
Facility Lease for the FMV Renewal Lease Term  tentatively  elected as aforesaid
and,  subject to no  Significant  Lease Default or Lease Event of Default having
occurred and  continuing  on the last day of the Basic Lease Term or the Renewal
Lease Term  immediately  preceding  such FMV Renewal Lease Term, as the case may
be, the FMV Renewal Lease Term shall thereupon take effect as provided herein.

     Section 15.4. Renewal Lease Rent for the Renewal Lease Terms.

     (a) Renewal Lease Rent shall be paid on each January 15 and July 15 (and on
the last day of any Renewal Lease Term if such last day is not a January 15 or a
July 15), in arrears, during each Renewal Lease Term. The installment of Renewal
Lease Rent for the  Facility  payable on each such Rent  Payment Date during the
Wintergreen Renewal Lease Terms shall be determined as follows:

          (i) for each year  during the First  Wintergreen  Renewal  Lease Term,
     Renewal  Lease  Rent  shall be equal to the  lesser of (i) the Fair  Market
     Rental  Value for the  Facility,  and (ii) 100% of the average  Basic Lease
     Rent during the Basic Lease Term; and

          (ii) for each year during the Second  Wintergreen  Renewal Lease Term,
     Renewal  Lease  Rent  shall be equal to the  lesser of (i) the Fair  Market
     Rental  Value for the  Facility,  and (ii) 100% of the average  Basic Lease
     Rent during the Basic Lease Term.

     (b) Renewal  Lease Rent  payable on each Rent  Payment  Date during any FMV
Renewal  Lease Term for the Facility  shall be the Fair Market  Rental Value for
the Facility.

     (c)  Renewal  Lease Rent for each full or partial  calendar  year  during a
Renewal  Lease Term shall be  allocated on a level daily basis over such full or
partial  calendar  year in an amount equal to the Renewal Lease Rent payable for
such year pursuant to Section 15.4(a) or Section 15.4(b), as applicable.

     Section 15.5.  Determination  of Fair Market Rental Value.  The Fair Market
Rental Value of the Facility as of the  commencement  of any Renewal  Lease Term
shall be  determined  by agreement of the Owner Lessor and the Lessee within six
months after receipt by the Owner Lessor of the tentative notice from the Lessee
of its election to renew  pursuant to Section  15.1,  15.2 or 15.3 (but not more
than thirty-six (36) months before the  commencement of such Renewal Lease Term)
or,  if they  shall  fail to  agree  within  such  six-month  period,  shall  be
determined  by  an  Independent  Appraiser  in  accordance  with  the  Appraisal
Procedure,  which  Independent  Appraiser  shall be  selected  by the Lessee and
reasonably  acceptable to the Owner Lessor. The appraiser's fees and expenses in
connection with any Facility Lease renewal under this Section 15 (whether or not
the Lessee exercises such option) shall be borne by the Lessee.

     Section 15.6.  Termination  Value During  Renewal Lease Terms.  The amounts
which are payable during any Renewal Lease Term in respect of Termination  Value
shall be  determined on the basis of the Fair Market Sales Value of the Facility
as of the commencement of such Renewal Lease Term,  amortized on a straight-line
basis  over  such  Renewal  Lease  Term to the Fair  Market  Sales  Value of the
Facility as of the  expiration  of such Renewal  Lease Term, as such Fair Market


                                       35
<PAGE>


Sales Value in each case is determined prior to the commencement of such Renewal
Lease Term,  plus an amount equal to any excess of the cumulative  Renewal Lease
Rent  allocated  to the  portion of the Renewal  Lease Term  through the date of
termination of this Facility  Lease over the cumulative  Renewal Lease Rent paid
through the date of termination of this Facility Lease, or minus an amount equal
to any excess of the  cumulative  Renewal  Lease Rent paid  through  the date of
termination  of this  Facility  Lease  over the  cumulative  Renewal  Lease Rent
allocated  to the  portion  of the  Renewal  Lease  Term  through  the  date  of
termination of this Facility Lease.

SECTION 16.       EVENTS OF DEFAULT

     The following events shall constitute a "Lease Event of Default"  hereunder
(whether any such event shall be voluntary  or  involuntary  or come about or be
effected by operation of law or pursuant to or in compliance  with any judgment,
decree  or  order  of  any  court  or  any  order,  rule  or  regulation  of any
Governmental Entity):

     (a) any payment of Basic Lease Rent, Renewal Lease Rent,  Termination Value
(or amounts  computed by reference to Termination  Value) or Supplemental  Lease
Rent consisting  solely of Make Whole Premium shall not have been made after the
same shall have become due and payable,  and such failure  shall have  continued
unremedied for five (5) Business Days; or

     (b) any payment of Supplemental  Lease Rent (other than Excepted  Payments,
unless the Owner  Participant  shall have  declared a Lease Default with respect
thereto,  Make Whole Premium, if any, and Termination Value) shall not have been
made after the same shall have become due and such failure shall have  continued
from a period of 30 days after  receipt by the Lessee of written  notice of such
failure from the Owner  Participant,  the Owner Lessor,  the Owner Trustee,  the
Indenture Trustee or the Pass Through Trustee; or

     (c) the Lessee shall fail to observe or perform its  obligation to maintain
(or cause to be maintained)  insurance in the amounts and on the terms set forth
in Section 11; or

     (d) the Lessee shall fail to perform or observe any covenant, obligation or
agreement  to be performed  or observed by it under this  Facility  Lease or any
other  Operative  Document  (other than any  covenant,  obligation  or agreement
referred to in Section  16(a),  16(b) or 16(c) or contained in the Tax Indemnity
Agreement) in any material respect,  and such failure shall continue  unremedied
for thirty  (30) days after the  earlier of (i) receipt by the Lessee of written
notice thereof from the Owner Participant,  the Owner Lessor, the Owner Trustee,
the Indenture Trustee or the Pass Through Trustee and (ii) the date on which the
Lessee obtained Actual Knowledge thereof;  provided,  however,  that if (i) such
failure is capable of being remedied but not within such 30-day period, and (ii)
such party is diligently  proceeding  to cure such failure,  and such failure is
reasonably  capable of being  remedied  within such  extended  period,  then the
period for cure shall be extended for an additional 180 days; provided, further,
that in the case of the  Lessee's  obligation  set  forth in clause  (a)(ii)  of
Section 7.1, if, to the extent and for so long as a test,  challenge,  appeal or
proceeding  shall be prosecuted in good faith by the Lessee,  the failure by the
Lessee to comply with such  requirement  shall not  constitute  a Lease Event of
Default if such test, challenge,  appeal or proceeding shall not involve (i) any


                                       36
<PAGE>


material danger of foreclosure,  sale, forfeiture or loss of, or imposition of a
Lien on, the Facility or any  substantial  part thereof or the impairment of the
use,  operation or maintenance of the Facility in any material  respect (in each
case,  unless  such risk is  appropriately  bonded),  (ii) any risk of  criminal
liability being asserted against the Owner  Participant,  the Owner Lessor,  the
Owner  Trustee,  the  Indenture  Trustee  or the Pass  Through  Trustee or their
respective  Affiliates,  or (iii)  any risk of the  occurrence  of any  material
adverse effect being incurred by the Owner  Participant,  the Owner Lessor,  the
Owner  Trustee,  the Indenture  Trustee or the Pass Through  Trustee,  including
subjecting  the Owner  Participant  or the Owner Lessor or their  Affiliates  to
regulation as a public utility under Applicable Law; and provided, further, that
in the case of the Lessee's  obligation  set forth in clause  (a)(ii) of Section
7.1, if the  noncompliance is not a type that can be immediately  remedied,  the
failure to comply  shall not be a Lease Event of Default if the Lessee is taking
all  reasonable  action to remedy such  noncompliance  and if, but only if, such
noncompliance  shall not  involve any danger or risks  described  in clause (i),
(ii) or (iii)  of the  preceding  proviso;  and  provided,  further,  that  such
noncompliance, or such test, challenge, appeal or proceeding to review shall not
extend  beyond the date that is  twenty-four  (24) months prior to the scheduled
expiration  of the Basic Lease Term or any Renewal  Lease Term then in effect or
elected by the Lessee; or

     (e) the  Guarantor  shall fail to  perform  any  covenant  set forth in the
Guaranty or the Certificate Purchase Agreement (other than any covenant referred
to in paragraph (a) or (b) of this Section 16) and such failure  shall  continue
unremedied for thirty (30) days after receipt by the Guarantor of written notice
thereof from the Owner  Participant,  the Owner Lessor,  the Owner Trustee,  the
Indenture Trustee or the Pass Through Trustee;  provided,  however,  that if (i)
such failure is capable of being remedied but not within such 30-day period, and
(ii) the  Guarantor  is  diligently  proceeding  to cure such  failure  and such
failure is reasonably  capable of being  remedied  within such extended  period,
then the period for cure shall be extended for an additional 180 days; or

     (f) any  representation  or warranty made by the Lessee or the Guarantor in
the  Operative  Documents  (other than the Tax  Indemnity  Agreement)  or in any
officer's  certificate  delivered  pursuant  thereto  shall  prove to have  been
incorrect as of the date made in any material  respect and shall  continue to be
material  and the  condition  giving rise to such  incorrect  representation  or
warranty is  unremedied  for a period of thirty  (30) days after  receipt by the
Lessee or the Guarantor, as applicable, of written notice thereof from the Owner
Participant,  the Owner Lessor, the Owner Trustee,  the Indenture Trustee or the
Pass Through Trustee;  provided,  however, that if (i) the condition giving rise
to such  incorrect  representation  or warranty is capable of being remedied but
not within such 30-day period,  and (ii) such party is diligently  proceeding to
remedy  such  condition,  and such  condition  is  reasonably  capable  of being
remedied within such extended period, then the period for cure shall be extended
for an additional 180 days; or

     (g) (i) the  Lessee  or the  Guarantor  shall  commence  any  case or other
proceeding (A) under any existing or future law of any jurisdiction, domestic or
foreign,  relating  to  bankruptcy,  insolvency,  reorganization  or  relief  of
debtors,  seeking to have an order for  relief  entered  with  respect to it, or
seeking to  adjudicate it a bankrupt or  insolvent,  or seeking  reorganization,
arrangement,  adjustment, winding-up, liquidation,  dissolution,  composition or
other relief with respect to it or its debts,  or (B) seeking  appointment  of a


                                       37
<PAGE>


receiver,  trustee, custodian or other similar official for it or for all or any
substantial  part of its  assets,  or the Lessee or the  Guarantor  shall make a
general  assignment  for the  benefit of its  creditors;  or (ii) there shall be
commenced  against the Lessee or the Guarantor any case or other proceeding of a
nature  referred  to in clause  (i) above  which (A)  results in the entry of an
order  for  relief  or any  such  adjudication  or  appointment  or (B)  remains
undismissed,  undischarged or unbonded for a period of sixty (60) days; or (iii)
there shall be commenced  against the Lessee or the  Guarantor any case or other
proceeding seeking issuance of a warrant of attachment,  execution, distraint or
similar process against all or any substantial  part of its assets which results
in the entry of an order for any such relief which shall not have been  vacated,
discharged,  or stayed or bonded  pending appeal within sixty (60) days from the
entry  thereof;  or (iv) the  Lessee or the  Guarantor  shall take any action in
furtherance of, or indicating its consent to,  approval of, or acquiescence  in,
any of the acts set forth in clause (i), (ii) or (iii) above;  or (v) the Lessee
or the Guarantor  shall  generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or

          (h) the Site Lease ceases to be a valid and binding  obligation of the
     Lessee; or

          (i) the Guaranty  ceases to be a valid and binding  obligation  of the
     Guarantor.

SECTION 17.       REMEDIES

     Section 17.1.  Remedies for Lease Event of Default.  Upon the occurrence of
any Lease Event of Default and at any time  thereafter so long as the same shall
be continuing,  the Owner Lessor may, at its option, declare this Facility Lease
to be in  default  by  written  notice  to the  Lessee;  provided  that upon the
occurrence of a Lease Event of Default described in paragraph (g) of Section 16,
this Facility Lease shall  automatically  be deemed to be in default without the
need for giving any notice;  and at any time  thereafter,  so long as the Lessee
shall not have  remedied  all  outstanding  Lease  Events of Default,  the Owner
Lessor  may do one or more of the  following  as the  Owner  Lessor  in its sole
discretion  shall elect,  to the extent  permitted by, and subject to compliance
with any mandatory requirements of, Applicable Law then in effect:

          (a) proceed by appropriate  court action or actions,  either at law or
     in equity, to enforce  performance by the Lessee, at the Lessee's sole cost
     and expense,  of the applicable  covenants and terms of this Facility Lease
     or to recover damages for breach thereof;

          (b) by notice in writing to the Lessee,  terminate this Facility Lease
     whereupon  all right of the  Lessee to the  possession  and use under  this
     Facility Lease of the Facility shall absolutely cease and terminate but the
     Lessee shall remain liable as  hereinafter  provided;  and  thereupon,  the
     Owner Lessor may demand that the Lessee,  and the Lessee shall upon written
     demand of the Owner Lessor and at the Lessee's  expense,  forthwith  return
     possession  of the Facility to the Owner Lessor in the manner and condition
     required by, and  otherwise in  accordance  with all of the  provisions  of
     Section 5, except those provisions  relating to periods of notice;  and the
     Owner Lessor may thenceforth hold, possess and enjoy the same free from any
     right of the Lessee,  or its successor or assigns,  to use the Facility for
     any purpose whatever;


                                       38
<PAGE>


          (c) sell the Owner Lessor's Interest at public or private sale, as the
     Owner  Lessor  may  determine,  free and clear of any  rights of the Lessee
     under this  Facility  Lease and  without  any duty to account to the Lessee
     with respect to such sale or for the proceeds thereof (except to the extent
     required by paragraph  (f) below if the Owner Lessor elects to exercise its
     rights under said  paragraph  and by  Applicable  Law),  in which event the
     Lessee's  obligation  to pay  Basic  Lease  Rent  and  Renewal  Lease  Rent
     hereunder  due for any  periods  subsequent  to the date of such sale shall
     terminate  (except to the extent that Basic  Lease Rent and  Renewal  Lease
     Rent is to be included in computations  under paragraph (e) or (f) below if
     the Owner Lessor elects to exercise its rights under said paragraphs);

          (d) hold, keep idle or lease to others the Owner Lessor's  Interest as
     the Owner Lessor in its sole  discretion may  determine,  free and clear of
     any rights of the Lessee under this Facility  Lease and without any duty to
     account to the Lessee  with  respect to such  action or inaction or for any
     proceeds with respect thereto,  except that the Lessee's  obligation to pay
     Basic Lease Rent and Renewal  Lease Rent due for any periods  subsequent to
     the date upon which the Lessee shall have been deprived of  possession  and
     use of the Facility pursuant to this Section 17 shall be reduced by the net
     proceeds, if any, received by the Owner Lessor from leasing the Facility to
     any Person other than the Lessee;

          (e) whether or not the Owner  Lessor  shall have  exercised,  or shall
     thereafter  at any time  exercise,  any of its rights under  paragraph  (b)
     above with respect to the Facility,  the Owner Lessor, by written notice to
     the Lessee  specifying a Termination Date that shall be not earlier than 10
     days after the date of such  notice,  may demand that the Lessee pay to the
     Owner  Lessor,  and  the  Lessee  shall  pay to the  Owner  Lessor,  on the
     Termination Date specified in such notice, if such Termination Date is also
     a Rent  Payment  Date,  any Basic Lease Rent or Renewal  Lease Rent due and
     payable on such  Termination  Date,  plus any unpaid  Basic  Lease Rent and
     Renewal  Lease Rent due before  such  Termination  Date,  plus any  Accrued
     Supplemental Lease Rent due and payable as of the payment date specified in
     such notice,  plus as liquidated damages for loss of a bargain and not as a
     penalty (in lieu of the Basic  Lease Rent and Renewal  Lease Rent due after
     the Termination Date specified in such notice),  (i) an amount equal to the
     excess,  if any, of the Termination  Value for the Facility  computed as of
     the  Termination  Date  specified in such notice over the Fair Market Sales
     Value of the Owner Lessor's  Interest as of the Termination  Date specified
     in  such  notice,  or  (ii) an  amount  equal  to the  excess,  if any,  of
     Termination  Value for the  Facility  computed as of the  Termination  Date
     specified  in such notice over the Fair  Market  Rental  Value of the Owner
     Lessor's Interest until the end of the Basic Lease Term or the then current
     Renewal  Lease  Term,  after  discounting  such Fair  Market  Rental  Value
     semi-annually to present value as of the Termination Date specified in such
     notice at a rate equal to the Lease Debt Rate,  or (iii) an amount equal to
     the Termination Value computed as of the Termination Date specified in such
     notice;  provided  that upon  payment  of  Termination  Value by the Lessee
     pursuant to clause (iii), above, and all other Rent then due and unpaid, or
     accrued  and unpaid,  by the  Lessee,  the Owner  Lessor  shall  proceed to
     exercise its  commercially  reasonable  efforts  promptly to sell the Owner
     Lessor's  Interest  at  public  or  private  sale and shall pay over to the
     Lessee  upon  consummation  of any such sale the net  proceeds of such sale


                                       39
<PAGE>


     (after deducting from such proceeds all costs and expenses  incurred by the
     Owner Lessor in connection  therewith and all other amounts that may become
     payable to the Owner Lessor, the Owner Trustee, the Owner Participant,  the
     Indenture Trustee or the Pass Through Trustee) but not to exceed the sum of
     Termination  Value  paid by the  Lessee  and the  Lessee  waives all claims
     against the Owner Lessor and the Owner  Participant in connection  with the
     sale of the Owner Lessor's  Interest or the use of commercially  reasonable
     efforts  pursuant to this proviso;  provided further that in lieu of paying
     an amount equal to the  Termination  Value  pursuant to clause (iii) above,
     the Lessee  may make a  rejectable  offer in  writing  to the Owner  Lessor
     (within 5 days following the Lessee's receipt of notice by the Owner Lessor
     specifying a  Termination  Date) (an "Offer") to purchase the Facility at a
     purchase  price  equal to or greater  than  Termination  Value (the  "Offer
     Price").  If the Owner  Lessor  rejects  such Offer in writing,  the Lessee
     shall remain liable to pay Termination Value pursuant to clause (iii) above
     provided  that (1) the Lessee shall have no obligation to pay the costs and
     expenses incurred by the Owner Lessor solely in connection with any sale of
     the Owner  Lessor's  Interest  and (2) the Owner  Lessor  shall  proceed to
     exercise its best efforts  promptly to sell the Owner Lessor's  Interest at
     public or private  sale and shall pay over to the Lessee upon  consummation
     of any such sale the  proceeds  of such sale,  but not to exceed the sum of
     Termination  Value paid by the Lessee.  If the Lessee has made an Offer and
     the Owner  Lessor  accepts  such  Offer or fails to  respond  to such Offer
     within two (2)  Business  Days prior to the date on which the Lessee  would
     have been required to pay Termination Value pursuant to clause (iii) above,
     the Lessee  shall pay to the Owner  Lessor the Offer Price on or before the
     Termination  Date and upon such  payment  of the Offer  Price and all other
     Rent then due and unpaid, or accrued and unpaid, by the Lessee,  the Lessee
     shall no longer  remain  liable to pay  Termination  Value or other amounts
     pursuant  to  clause  (iii)  above  and the Owner  Lessor  shall  forthwith
     transfer to the Lessee (or its  designee) in  accordance  with this Section
     17.1(e)  and  Section  2.4 of the Site Lease on an "as is,"  "where is" and
     "with all faults" basis,  without  representation  or warranty other than a
     warranty as to the absence of Owner  Trustee's  Liens  attributable  to the
     Owner Lessor  accompanied by a warranty of the Owner  Participant as to the
     absence of Owner  Participant's  Liens,  all of its  interest  in the Owner
     Lessor's Interest and execute, acknowledge and deliver, and record and file
     (as appropriate), appropriate releases and shall use all reasonable efforts
     to cause the Indenture  Trustee to release the Lien of the  Indenture,  and
     all other  documents  or  instruments  necessary or desirable to effect the
     foregoing all in form and substance  reasonably  satisfactory  to the Owner
     Lessor and at the cost and expense of the Lessee,  and upon payment of such
     amount under either clause (i), (ii) or (iii) of this  paragraph  (e), this
     Facility  Lease and the  Lessee's  obligation  to pay Basic  Lease Rent and
     Renewal Lease Rent hereunder due for any periods  subsequent to the date of
     such payment shall terminate;

          (f) if the Owner  Lessor shall have sold the Owner  Lessor's  Interest
     pursuant  to  paragraph  (c) above,  the Owner  Lessor  may, if it shall so
     elect, demand that the Lessee pay to the Owner Lessor, and the Lessee shall
     pay to the Owner Lessor,  as  liquidated  damages for loss of a bargain and
     not as a penalty (in lieu of the Basic  Lease Rent and  Renewal  Lease Rent
     due for any periods  subsequent to the date of such sale),  an amount equal
     to (i) any unpaid  Basic Lease Rent and  Renewal  Lease Rent due before the
     date of such sale plus (ii) if that  date is not a  Termination  Date,  the
     daily  equivalent  of Basic Lease Rent or Renewal Lease Rent for the period


                                       40
<PAGE>


     from the  preceding  Termination  Date to the date of such sale and if such
     date is a Rent Payment Date, Basic Lease Rent or Renewal Lease Rent due and
     payable  on such  date,  plus  (iii)  the  amount,  if any,  by  which  the
     Termination Value for the Facility computed as of the Termination Date next
     preceding  the date of such sale or, if such sale occurs on a Rent  Payment
     Date or a Termination  Date then computed as of such date,  exceeds the net
     proceeds of such sale,  and,  upon  payment of such amount,  this  Facility
     Lease and the Lessee's obligation to pay Basic Lease Rent and Renewal Lease
     Rent  for  any  periods  subsequent  to the  date  of  such  payment  shall
     terminate; or

          (g)  apply  any  amounts  that are  held by the  Owner  Lessor  or the
     Indenture  Trustee as security  for the Lessee's  obligations  hereunder or
     under  any  Operative  Document  against  any  amounts  owed by the  Lessee
     hereunder or under any other Operative Document.

     In  addition,  the Lessee  shall be liable,  except as  otherwise  provided
above,  (i) for any and all unpaid  Basic Lease Rent and Renewal  Lease Rent due
hereunder  before or during the exercise of any of the foregoing  remedies,  and
(ii) on an After-Tax  Basis,  for  reasonable  legal fees and other  reasonable,
documented out-of-pocket costs and expenses incurred by reason of the occurrence
of any Lease  Event of Default or the  exercise of the Owner  Lessor's  remedies
with respect thereto,  including the repayment in full of any costs and expenses
necessary  to be  expended  in  connection  with the return of the  Facility  in
accordance with Section 5 hereof,  including, any costs and expenses incurred by
the Owner  Lessor,  the Owner  Trustee,  the Owner  Participant,  the  Indenture
Trustee and the Pass Through  Trustee in connection  with retaking  constructive
possession  of,  or in  repairing,  the  Facility  in order to cause it to be in
compliance with all maintenance standards imposed by this Facility Lease.

     Upon any termination of this Facility Lease in consequence of a Lease Event
of Default in circumstances  where Termination Value (or an amount determined by
reference thereto, including any Offer Price) is not payable by the Lessee under
this  Section  17.1,  the Lessee shall pay to the Owner Lessor any excess of any
Underpayment  of Basic  Lease  Rent as of the  Termination  Date on  which  this
Facility  Lease so  terminates  over any  Interest on Prepaid  Rent  accrued and
unpaid as of such Termination  Date, or the Owner Lessor shall pay to the Lessee
(but only after the Lessee and the Guarantor  shall have fully  satisfied all of
their obligations to the Owner Lessor, the Owner Trustee,  the Owner Participant
and  the  Equity  Investor  under  the  Operative  Documents)  the  sum  of  any
Overpayment  of  Basic  Lease  Rent as of the  Termination  Date on  which  this
Facility  Lease  so  terminates  and any  Interest  on  Prepaid  Rent as of such
Termination  Date, as the case may be,  provided that in the event this Facility
Lease  shall  terminate  on a Basic Lease Rent  Payment  Date,  the  Interest on
Prepaid Rent accrued and unpaid as of the applicable  Termination  Date shall be
deemed to be zero, and provided  further,  that in the event this Facility Lease
shall terminate on a date other than a Termination Date, the applicable  amounts
in respect of  Underpayment  of Basic Lease Rent and  Overpayment of Basic Lease
Rent  and  Interest  on  Prepaid  Rent  shall be  interpolated  as  between  the
Termination  Date  immediately  preceding and the Termination  Date  immediately
succeeding such date of termination.


                                       41
<PAGE>


     All payments of Rent (other than Excepted Payments) under this Section 17.1
shall,  so long as the Lien of the Indenture  shall not have been  terminated or
discharged, be made to the Indenture Trustee.

     Section 17.2.  Cumulative  Remedies.  The remedies in this  Facility  Lease
provided in favor of the Owner Lessor shall not be deemed  exclusive,  but shall
be  cumulative  and  shall be in  addition  to all other  remedies  in its favor
existing at law or in equity;  and the  exercise or beginning of exercise by the
Owner  Lessor  of any  one or  more  of  such  remedies  shall  not,  except  as
specifically  provided in this Section 17,  preclude the  simultaneous  or later
exercise by the Owner Lessor of any or all of such other remedies. To the extent
permitted  by  Applicable  Law,  the  Lessee  hereby  waives  any  rights now or
hereafter  conferred by statute or otherwise  which may require the Owner Lessor
to sell,  lease or  otherwise  use the  Facility  or any  Component  thereof  in
mitigation  of the Owner  Lessor's  damages  as set forth in this  Section 17 or
which  may  otherwise  limit or  modify  any of the Owner  Lessor's  rights  and
remedies in this Section 17.

     Section 17.3.  No Delay or Omission to be Construed as Waiver.  No delay or
omission to exercise  any right,  power or remedy  accruing to the Owner  Lessor
upon any breach or default by the Lessee under this Facility  Lease shall impair
any such right, power or remedy of the Owner Lessor, nor shall any such delay or
omission be  construed  as a waiver of any breach or default,  or of any similar
breach or default hereafter  occurring;  nor shall any waiver of a single breach
or default be deemed a waiver of any subsequent breach or default.

SECTION 18.       SECURITY INTEREST AND INVESTMENT OF SECURITY FUNDS.

     Any moneys received by the Owner Lessor or the Indenture  Trustee  pursuant
to  Section  10.2(b)  or 11 or  Schedule  D shall,  until  paid to the Lessee in
accordance  with such  Sections,  be held by the Owner  Lessor or the  Indenture
Trustee, as the case may be, as security for the Lessee's obligations under this
Facility Lease and be invested from time to time in Permitted Investments by the
Owner Lessor or the Indenture  Trustee,  as the case may be, at the sole risk of
the Lessee,  as the Lessee may, so long as no Significant Lease Default or Lease
Event of  Default  has  occurred  and is  continuing,  direct in writing if such
instruments are reasonably available for purchase.  Any gain (including interest
received)  realized as the result of any such Permitted  Investment  (net of any
fees, commissions, taxes and other expenses, if any, incurred in connection with
such  Permitted  Investment)  shall be applied or  remitted to the Lessee in the
same manner as the principal invested.

SECTION 19.       LESSEE'S RIGHT TO SUBLEASE

     The Lessee  shall  have the right to  sublease  the  Facility  without  the
consent of the Owner  Lessor,  the Owner  Participant,  the Owner  Trustee,  the
Indenture Trustee or the Pass Through Trustee under the following conditions:

          (a) the sublessee (i) is a corporation,  partnership,  business trust,
     limited  liability  company  or other  person  or  entity  not  subject  to
     bankruptcy  proceedings,  (ii) is not  involved  in  material  pending  and
     unresolved litigation with the Owner Participant (or any of its Affiliates)
     and  (iii) is,  or its  operating  and  maintenance  obligations  under the


                                       42
<PAGE>


     sublease  are  guaranteed  by, or such  obligations  are  contracted  to be
     performed by, an  experienced,  reputable  operator of electric  generating
     assets similar to the Facility;

          (b) the Owner Lessor,  the Owner  Participant and, so long as the Lien
     of the  Indenture  shall  not  have  been  terminated  or  discharged,  the
     Indenture Trustee shall have received an opinion of counsel,  which opinion
     and counsel shall be reasonably  acceptable to each such recipient,  to the
     effect that all material  regulatory  approvals  required to enter into the
     sublease  have been  obtained and are in full force and effect and the Pass
     Through  Trustee  shall have  received a copy of, and be  permitted to rely
     upon, such opinion;

          (c) the sublease does not extend  beyond the  scheduled  expiration of
     the  Basic  Lease  Term  or any  Renewal  Lease  Term  then  in  effect  or
     irrevocably  elected  by the  Lessee  (and  may be  terminated  upon  early
     termination  of  this  Facility   Lease)  and  is  expressly   subject  and
     subordinate to this Facility Lease;

          (d) all terms and conditions of this Facility Lease,  the Guaranty and
     the other Operative Documents remain in effect and the Lessee remains fully
     and primarily liable for its obligations  under this Facility Lease and the
     other Operative Documents;

          (e) no Significant  Lease Default or Lease Event of Default shall have
     occurred and be continuing;

          (f) the sublease prohibits further assignment or subletting;

          (g) the sublease  requires  the  sublessee to operate and maintain the
     Facility  (or to cause the  Facility to be operated  and  maintained)  in a
     manner consistent with this Facility Lease;

          (h) the sublease does not cause the Facility to become "tax-exempt use
     property"  within the  meaning of Section  168(h) of the Code  (unless  the
     Lessee shall make a payment to the Owner Participant contemporaneously with
     the execution of the sublease that  compensates  the Owner  Participant (as
     determined  in good faith by the Owner  Participant)  for the  adverse  tax
     consequences   resulting  from  the   classification  of  the  Facility  as
     "tax-exempt use property");

          (i) neither the Owner Participant nor the Owner Lessor nor, so long as
     the  Lien of the  Indenture  has not been  terminated  or  discharged,  the
     Indenture Trustee, the Pass Through Trustee or any Certificateholder  shall
     become an  "electric  utility  company",  a  "public  utility  company,"  a
     "holding  company",  or  an  "affiliate,"  a  "subsidiary  company"  or  an
     "associate  company" of a "holding  company" under the Holding  Company Act
     and the rules and regulations promulgated thereunder or a "public utility",
     or an  "electric  utility"  under the  Federal  Power Act or  otherwise  be
     subject to  regulation  under the Public  Service  Law of New York or other
     similar Applicable Law as a result of such sublease; and

          (j) the sublease does not cause a Regulatory Event of Loss.


                                       43
<PAGE>


     The Lessee  shall pay, on an After-Tax  Basis,  all  reasonable  documented
out-of-pocket  expenses  of the  Owner  Lessor,  the  Owner  Trustee,  the Owner
Participant,  the Equity  Investor,  the Indenture  Trustee and the Pass Through
Trustee in connection with such sublease.

SECTION 20.       OWNER LESSOR'S RIGHT TO PERFORM

     If the Lessee fails to make any payment required to be made by it hereunder
or fails to perform or comply with any of its other agreements  contained herein
after  notice to the  Lessee  and  failure of the Lessee to so perform or comply
within ten (10) days  thereafter in the case of a failure to make any payment or
thirty (30) days thereafter in all other cases, the Owner Lessor may itself,  or
may cause the Owner  Participant to, make such payment or perform or comply with
such agreement in a reasonable manner,  but shall not be obligated  hereunder to
do so, and the amount of such  payment  and of the  reasonable  expenses  of the
Owner Lessor or the Owner  Participant  incurred in connection with such payment
or the  performance of or compliance  with such  agreement,  as the case may be,
together with interest  thereon at the Overdue Rate, to the extent  permitted by
Applicable  Law, shall be deemed to be Supplemental  Lease Rent,  payable by the
Lessee to the Owner Lessor on demand.

SECTION 21.      SECURITY FOR OWNER LESSOR'S OBLIGATION TO THE INDENTURE TRUSTEE

     In order to secure the Notes, the Owner Lessor will assign and grant a Lien
to the Indenture  Trustee in and to all of the Owner Lessor's  right,  title and
interest in, to and under this Facility Lease, and grant a security  interest in
favor of the Indenture  Trustee in all of the Owner  Lessor's  right,  title and
interest in and to the  Facility  (other than  Excepted  Payments  and  Excepted
Rights).  The Lessee hereby  consents to such  assignment and to the creation of
such  Lien and  security  interest  and  acknowledges  receipt  of copies of the
Indenture,   it  being  understood  that  such  consent  shall  not  affect  any
requirement  or the  absence of any  requirement  for any  consent of the Lessee
under any other  circumstances.  Unless and until the Lessee shall have received
written  notice from the  Indenture  Trustee that the Lien of the  Indenture has
been  terminated or  discharged,  the Indenture  Trustee shall have the right to
exercise the rights of the Owner Lessor under this Facility  Lease to the extent
set  forth  in and  subject  in each  case to the  exceptions  set  forth in the
Indenture.  TO THE EXTENT, IF ANY, THAT THIS FACILITY LEASE 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 FACILITY LEASE MAY BE
CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART  HEREOF OTHER THAN
THE  ORIGINAL  COUNTERPART,   WHICH  SHALL  BE  IDENTIFIED  AS  THE  COUNTERPART
CONTAINING  THE  RECEIPT  THEREFOR  EXECUTED  BY THE  INDENTURE  TRUSTEE  ON THE
SIGNATURE PAGE THEREOF.

SECTION 22.       MISCELLANEOUS

     Section  22.1.  Amendments  and Waivers.  No term,  covenant,  agreement or
condition  of this  Facility  Lease may be  terminated,  amended  or  compliance
therewith waived (either generally or in a particular instance, retroactively or
prospectively)  except by an instrument or  instruments  in writing  executed by
each party hereto.


                                       44
<PAGE>


     Section 22.2. Notices. Unless otherwise expressly specified or permitted by
the terms hereof,  all communications and notices provided for herein to a party
hereto shall be in writing or by a telecommunications device capable of creating
a written record,  and any such notice shall become  effective (a) upon personal
delivery  thereof,  including by overnight mail or courier  service,  (b) in the
case of notice by United States mail, certified or registered,  postage prepaid,
return receipt requested,  upon receipt thereof, or (c) in the case of notice by
such a  telecommunications  device,  upon  transmission  thereof,  provided such
transmission is promptly  confirmed by either of the methods set forth in clause
(a) or (b)  above,  in each case  addressed  to such party and copy party at its
address set forth below or at such other address as such party or copy party may
from time to time designate by written notice to the other party:

         If to the Owner Lessor:

                  SE Ravenswood Trust
                  c/o Wilmington Trust Company
                  Rodney Square North
                  1100 North Market Street
                  Wilmington, DE 19890-0001
                  Telephone No.:  (302) 636-6000
                  Facsimile No.:  (302) 636-4140
                  Attention: Corporate Trust Administration

         with a copy to the Owner Participant:

                  SE Ravenswood Lease, L.L.C.
                  c/o Southern Energy Finance Company, Inc.
                  270 Peachtree Street, N.W.
                  Atlanta, GA 30303
                  Telephone No.:  (404) 506-5000
                  Facsimile No.:  (404) 506-0708
                  Attention: Director of Capital Markets and Leasing

         with a copy to:

                  SE Ravenswood Lease, L.L.C.
                  c/o Southern Energy Finance Company, Inc.
                  270 Peachtree Street, N.W.
                  Atlanta, GA 30303
                  Telephone No.:  (404) 506-5000
                  Facsimile No.:  (404) 506-0708
                  Attention: Financial Manager

         and to the Indenture Trustee (so long as the Lien of the
         Indenture has not been terminated or discharged):

                  Wells Fargo Bank Northwest, N.A.
                  213 Court Street, Suite 703
                  Middletown, CT 06457
                  Telephone No.:  (860) 704-6216
                  Facsimile No.:  (860) 704-6219
                  Attention: Corporate Trust Services


                                       45
<PAGE>


                  with a copy to:

                  Wells Fargo Bank Northwest, N.A.
                  299 South Main Street, 12th
                  Salt Lake City, Utah 84111
                  Telephone No.:  (801) 246-5630
                  Facsimile No.:  (801) 246-5053
                  Attention: Corporate Trust Services

         and to the Pass Through Trustee (so long as the Lien of the
         Indenture has not been terminated or discharged):

                  Wells Fargo Bank Northwest, N.A.
                  213 Court Street, Suite 703
                  Middletown, CT 06457
                  Telephone No.:  (860) 704-6216
                  Facsimile No.:  (860) 704-6219
                  Attention: Corporate Trust Services

                  with a copy to:

                  Wells Fargo Bank Northwest, N.A.
                  299 South Main Street, 12th
                  Salt Lake City, Utah 84111
                  Telephone No.:  (801) 246-5630
                  Facsimile No.:  (801) 246-5053
                  Attention: Corporate Trust Services

         If to the Lessee:

                  KeySpan-Ravenswood, LLC
                  c/o KeySpan Corporation
                  One MetroTech Center
                  Brooklyn, New York  11201

                  Attention: General Counsel
                  Telephone: (718) 403-1000
                  Telecopy: (718) 696-7139

     Section 22.3. Survival.  Except for the provisions of Sections 3.3, 3.5, 5,
9 and 17 (and any other provisions hereof which expressly  contemplate that they
shall so survive),  which shall  survive,  the  warranties and covenants made by
each party  hereto  shall not  survive the  expiration  or  termination  of this
Facility Lease in accordance with its terms.


                                       46
<PAGE>


     Section 22.4.  Successors and Assigns. This Facility Lease shall be binding
upon and shall inure to the benefit of, and shall be enforceable by, the parties
hereto  and their  respective  successors  and  assigns as  permitted  by and in
accordance with the terms hereof.  Except as expressly provided herein or in the
other  Operative  Documents,  neither  party hereto may assign its  interests or
transfer its obligations herein without the consent of the other party hereto.

     Section  22.5.  "True  Lease".  This  Facility  Lease shall  constitute  an
agreement  of lease and  nothing  herein  shall,  prior to  termination  of this
Facility Lease,  affect the Owner Lessor's status as owner of the Facility or be
construed as  conveying to the Lessee any right,  title or interest in or to the
Facility except as lessee only.

     Section 22.6.  Governing Law. This Facility Lease has been delivered in the
State of New York and shall be in all  respects  governed  by and  construed  in
accordance  with the laws of the State of New York,  including  all  matters  of
construction, validity and performance.

     Section 22.7.  Severability.  Any provision of this Facility  Lease that is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

     Section  22.8.  Counterparts.  This  Facility  Lease may be executed by the
parties hereto on any number of separate counterparts, each of which, subject to
Section 21, when so executed and  delivered  shall be an original,  but all such
counterparts shall together constitute but one and the same instrument.

     Section 22.9. Headings and Table of Contents.  The headings of the sections
of this  Facility  Lease and the Table of Contents  are inserted for purposes of
convenience   only  and  shall  not  be  construed  to  affect  the  meaning  or
construction of any of the provisions hereof.

     Section 22.10. Further Assurances. Each party hereto will promptly and duly
execute and deliver such further  documents to make such further  assurances for
and take such further action reasonably requested by the other party, all as may
be reasonably  necessary to carry out more effectively the intent and purpose of
this Facility Lease.  The Lessee shall be responsible for any costs and expenses
incurred  in  connection  therewith  in  accordance  with  Section  9.1  of  the
Participation Agreement.

     Section  22.11.  Limitation of Liability.  It is expressly  understood  and
agreed by the  parties  hereto  that (a) this  Facility  Lease is  executed  and
delivered by the Trust  Company,  not  individually  or personally but solely as
trustee of the Owner  Lessor under the Trust  Agreement,  in the exercise of the
powers and authority  conferred and vested in it pursuant  thereto,  (b) each of
the representations,  undertakings and agreements herein made on the part of the
Owner Lessor is made and intended not as personal representations,  undertakings
and  agreements by the Trust  Company,  but is made and intended for the purpose
for  binding  only the Owner  Lessor,  (c)  nothing  herein  contained  shall be
construed  as creating  any  liability  on the Trust  Company,  individually  or
personally,  to perform  any  covenant  either  expressed  or implied  contained
herein, all such liability, if any, being expressly waived by the parties hereto


                                       47
<PAGE>


or by any Person  claiming by, through or under the parties hereto and (d) under
no circumstances shall the Trust Company be personally liable for the payment of
any  indebtedness or expenses of the Owner Lessor or be liable for the breach or
failure  of  any  obligation,  representation,  warranty  or  covenant  made  or
undertaken by the Owner Lessor under this Facility Lease.

     Section 22.12.  Measuring Life. If and to the extent that any of the rights
and privileges  granted under this Facility Lease,  would, in the absence of the
limitation  imposed by this sentence,  be invalid or  unenforceable  as being in
violation of the rule against  perpetuities or any other rule or law relating to
the  vesting  of  interests  in  property  or the  suspension  of the  power  of
alienation  of  property,  then it is  agreed  that  notwithstanding  any  other
provision of this Facility Lease, such options,  rights and privileges,  subject
to the  respective  conditions  hereof  governing  the exercise of such options,
rights and privileges,  will be exercisable  only during (a) the longer of (i) a
period which will end twenty-one (21) years after the death of the last survivor
of the descendants living on the date of the execution of this Facility Lease of
the following Presidents of the United States:  Franklin D. Roosevelt,  Harry S.
Truman,  Dwight D. Eisenhower,  John F. Kennedy,  Lyndon B. Johnson,  Richard M.
Nixon,  Gerald R. Ford,  James E. Carter,  Ronald W. Reagan,  George H.W.  Bush,
William J.  Clinton  and George W. Bush or (ii) the  period  provided  under the
Uniform  Statutory  Rule Against  Perpetuities  or (b) the  specific  applicable
period of time  expressed in this  Facility  Lease,  whichever of (a) and (b) is
shorter.

     Section 22.13.  New York Sales Taxes.  For New York State and New York City
sales tax purposes, the parties to this Facility Lease intend that 5.98% of each
payment  of  Basic  Lease  Rent  and  Renewal  Lease  Rent,  if  any,  shall  be
attributable to transmission  equipment and other tangible personal property the
rental of which is subject to sales tax under Articles 28 and 29 of the New York
Tax Law. The Lessee shall pay all taxes due with respect thereto directly to New
York State.











                                       48
<PAGE>




     IN  WITNESS  WHEREOF,  the Owner  Lessor and the Lessee  have  caused  this
Facility  Lease to be duly executed and delivered by their  respective  officers
thereunto duly authorized.



                          SE Ravenswood Trust


                          By:    Wilmington Trust Company, not in its individual
                                 capacity but solely as Owner Trustee


                                 By:
                                        ---------------------------------------
                                        Name:
                                        Title:


                          KEYSPAN-RAVENSWOOD, LLC


                                 By:
                                        ----------------------------------------
                                        Name:
                                        Title:





                                       49
<PAGE>



*Receipt of the original  counterpart of the foregoing  Facility Lease is hereby
acknowledged on this 25th day of May, 2004.

                                            Wells Fargo Bank Northwest, n.a.,
                                            as Indenture Trustee


                                            By:
                                                   -----------------------------
                                                   Name:
                                                   Title:


-------------
* This acknowledgment executed in the original counterpart only.



<PAGE>







061267-0037-08734-NY02.2342818.35
                                                                SCHEDULE A
                                                                    to
                                                              Facility Lease
                                                              --------------


                            BASIC LEASE RENT PAYMENTS
                            -------------------------

                  (expressed as a percentage of Purchase Price)

                            (a)                    (b)
                        Basic Lease          Basic Lease Rent
                      Rent Payment Date     Payment Percentage
                      -----------------     ------------------





                                    SCH. A-1

<PAGE>





                                                                  SCHEDULE B
                                                                       to
                                                                Facility Lease
                                                                --------------

<TABLE>
<CAPTION>

                              ALLOCATION OF RENT,[1]
                PREPAID RENT AMOUNTS AND INTEREST ON PREPAID RENT
                -------------------------------------------------
  <S>  <C>              <C>                <C>                     <C>                  <C>           <C>
       (a)              (b)                (c)                     (d)                  (e)           (f)

                                      Cumulative Rent         Cumulative Rent
                                      Payable through      Allocated through End
     Rental         Rent Allocated      End of Rental      of Succeeding Rental       Prepaid       Interest on
  Period Ending    to Rental Period        Period                Period            Rent Amount      Prepaid Rent
  -------------    ----------------        ------                ------            -----------      ------------
</TABLE>



--------
1    For purposes of this Schedule B, Rent refers to the sum of Basic Lease Rent
     plus the absolute  value of any Interest on Prepaid Rent taken into account
     in the determination thereof.


                                    SCH. B-1

<PAGE>








                                                                   SCHEDULE C
                                                                      to
                                                                 Facility Lease
                                                                 --------------

<TABLE>
<CAPTION>

                               TERMINATION VALUES
                               ------------------

                   (expressed as percentage of Purchase Price)
    <S>  <C>              <C>              <C>              <C>             <C>            <C>             <C>
         (a)              (b)              (c)              (d)             (e)            (f)             (g)
                                                                                                         Equity
                      Preliminary                                                                       Portion of
                      Termination      Overpayment     Underpayment     Interest on    Termination      Termination
     Termination    Value Percentage     of Basic        of Basic      Prepaid Rent       Value           Value
        Date                            Lease Rent      Lease Rent                      Percentage*      Percentage
        ----        ----------------    ----------      ----------     ------------     -----------      ----------
</TABLE>





*    Column (f) = Column (b) - Column (c) + Column (d) - Column (e), except that
     on  Termination  Dates that are also Basic Lease Rent Payment  Dates Column
     (f) = Column (b) - Column (c) + Column (d).


                                    SCH. C-1






<PAGE>






                                                                   SCHEDULE D
                                                                      to
                                                                  Facility Lease
                                                                  --------------


                                    INSURANCE
                                    ---------

     (a) Insurance Coverage.  The Lessee will procure and maintain,  or cause to
be procured and maintained, in full force and effect at all times throughout the
term  of the  Facility  Lease  insurance  policies  with  responsible  insurance
companies  authorized  to do  business  in the  State  of New  York  with a Best
Insurance  Reports  rating of "A" or better,  or if not rated by Best,  a claims
paying ability rating by S&P of BBB+ or higher (or such other company acceptable
to the Owner Lessor,  the Indenture Trustee and the Pass Through Trustee),  with
no less than the limits and coverage provisions set forth below:

     (i) Workers' Compensation  Insurance.  Workers'  compensation  insurance in
accordance  with and as  required  under the laws of the  State of New  York.  A
maximum  deductible or self insured retention of $2,000,000 per occurrence shall
be allowed.

     (ii) Employer's Liability Insurance. Employer's liability insurance, if the
Lessee has any employees,  providing  compensation for occupational diseases and
for injuries  sustained by or death  resulting to employees of the Lessee or its
subcontractors as required by law,  including the laws of each state wherein any
work is performed  under the Facility  Lease and where  employment  contracts of
such employees were made, including employer's liability insurance coverage with
a $10,000,000  minimum limit per accident.  A maximum deductible or self insured
retention of $2,000,000 per occurrence shall be allowed.

     (iii) General Liability Insurance. Liability insurance on an occurrence (or
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 and shall be subject to the pollution  liability exclusion
with a $5,000,000  minimum limit per occurrence  for combined  bodily injury and
property damage. A maximum  deductible or self insured  retention of $10,000,000
per occurrence shall be allowed.

     (iv) 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  with a
$5,000,000  minimum limit per occurrence for combined bodily injury and property
damage  and  containing  appropriate  no  fault  insurance  provisions  wherever
applicable.  A maximum  deductible or self insured  retention of $10,000,000 per
occurrence shall be allowed.

     (v) Excess  Insurance.  Excess  liability  insurance on an  occurrence  (or
claims made form) basis covering  claims in excess of the  underlying  insurance
described in the foregoing  clauses (ii),  (iii) and (iv),  with a  $100,000,000
minimum limit per  occurrence.  In the event the available limit of liability is
less than $50,000,000 due to claims against such excess liability insurance, the


                                    SCH. D-1
<PAGE>


Lessee  shall  purchase  additional  coverage  so that  the  available  limit of
liability under such excess liability insurance is not less than $100,000,000.

     The  Lessee  may  satisfy  the  insurance  requirements  set  forth  in the
foregoing  clauses  (ii),  (iii),  (iv) and (v) by  purchasing  coverage  in 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.

     (vi) Physical Damage  Insurance to the Facility.  Property damage insurance
on  an  "all  risk"  basis,  including  boiler  and  machinery  insurance  on  a
comprehensive  basis,  including coverage against damage or loss caused by earth
movement,  fire, lightning and flood and providing coverage for (1) the Facility
in an  amount  equal  to one  hundred  percent  (100%)  of the  "full  insurable
replacement value" of the Facility,  (2) transit including ocean marine transit,
if applicable,  with sub limits not less than  $5,000,000,  (3)  foundations and
other  property  below  the  surface  of the  ground  and (4)  attorneys'  fees,
engineering and other  consulting  costs,  and permit fees directly  incurred in
order to repair or  replace  damaged  insured  property  in a minimum  amount of
$1,000,000. For purposes of this clause (vi), "full insurable replacement value"
shall  mean  the  full   replacement   value  of  the  Facility   including  any
improvements,  equipment,  spare parts, fuel and supplies, without deduction for
obsolescence.  All such  insurance  may have  deductibles  of not  greater  than
$10,000,000 per occurrence. Such insurance shall (x) not include any coinsurance
provision,  (y) provide for increased cost of construction and loss to undamaged
property as the result of  enforcement  of building laws or ordinances  with sub
limits  not less  than 10% of the  "full  insurable  replacement  value"  of the
Facility,  and (z)  include  debris  removal  with  sub  limits  not  less  than
$5,000,000.  The earth  movement  and flood  coverage may be of the type usually
carried  by  corporations  engaged in the same or  similar  business,  similarly
situated  with the Lessee or its  Affiliates,  and owning or  operating  similar
equipment and which cover risks of the kind customarily  insured against by such
corporations,  and in substantially  the amount  applicable to similar equipment
owned, leased or held by the Lessee or its Affiliates.

     If the  insurance  company  providing  the  physical  damage  insurance  is
different  from  the  insurance  company  providing  the  boiler  and  machinery
insurance  required  pursuant to this clause  (a)(vi) of this Schedule D, then a
joint loss agreement  between such  companies  shall be required and included as
part of the respective policies.

     (b)  Endorsements.  All policies of insurance  required by this  Schedule D
shall provide for waivers of  subrogation  by the insurers in favor of the Owner
Lessor,  the Owner Trustee,  the Owner  Participant,  the Equity  Investor,  the
Indenture  Trustee and the Pass Through Trustee and their  respective  officers,
directors, members, trustees and employees.

     All policies of liability insurance required to be maintained by the Lessee
pursuant to clauses (a)(iii),  (iv) and (v) of this Schedule D shall be endorsed
as follows:

          (1)  To provide a severability of interest or cross-liability clause;

          (2)  Such that the  insurance  shall be  primary  and not excess to or
               contributing  with any insurance or self insurance  maintained by
               the Owner Lessor, the Trust Company, the Owner Trustee, the Owner


                                    SCH. D-2
<PAGE>


               Participant,  the Equity Investor,  the Indenture  Trustee or the
               Pass Through Trustee; or

          (3)  To name the Owner Lessor,  the Trust Company,  the Owner Trustee,
               the Owner Participant, the Equity Investor, the Indenture Trustee
               and the Pass  Through  Trustee  and  their  respective  officers,
               directors,   members,   trustees  and   employees  as  additional
               insureds.

     All policies of insurance  required to be maintained by the Lessee pursuant
to clause (a)(vi) of this Schedule D shall name the Indenture  Trustee as a loss
payee and (subject to the provisions of clause (d)(ii) of this Schedule D) shall
name the Owner Lessor,  the Owner  Trustee,  the Owner  Participant,  the Equity
Investor  and the Pass  Through  Trustee as  additional  loss  payees,  as their
interests may appear.

     (c) Waiver of Subrogation.  The Lessee hereby waives any and all claims for
recovery from the Owner Lessor, the Owner Trustee,  the Owner  Participant,  the
Equity  Investor,  the Indenture  Trustee and the Pass Through Trustee and their
respective officers,  directors, members, trustees and employees for any and all
loss  or  damage  covered  by any of the  insurance  required  to be  maintained
pursuant to the terms of this  Schedule D to the extent that such loss or damage
is recovered  under any such  insurance.  Inasmuch as the foregoing  waiver will
preclude the  assignment  of any such claim to the extent of such  recovery,  by
subrogation  (or  otherwise),  to an insurance  company (or other  Person),  the
Lessee shall give written  notice of the terms of such waiver to each  insurance
company which has issued,  or which may issue in the future,  any such policy of
insurance (if such notice is required by the  insurance  policy) and shall cause
each such insurance policy to be properly endorsed by the issuer thereof,  or to
otherwise  contain one or more provisions  that prevent the  invalidation of the
insurance coverage provided thereunder by reason of such waiver.

         (d) Additional Requirements.

     (i) The Lessee shall  promptly  notify the Owner Lessor and, so long as the
Notes are outstanding, the Indenture Trustee and the Pass Through Trustee of any
loss in excess of $10,000,000 covered by any insurance required to be maintained
pursuant to clause (a)(vi) of this Schedule D.

     (ii) All policies of insurance required to be maintained pursuant to clause
(a)(vi) of this  Schedule D shall  provide  that the  proceeds of such  policies
shall be payable  solely to the Indenture  Trustee  pursuant to a standard first
mortgage  endorsement  substantially  equivalent  to the  Lenders  Loss  Payable
Endorsement  438BFU or ISO endorsement  CP12181091,  without  contribution.  The
Owner Lessor,  the Owner  Trustee,  the  Indenture  Trustee and the Pass Through
Trustee  shall have the right to join the Lessee in adjusting any loss in excess
of $10,000,000  covered by any insurance  required to be maintained  pursuant to
clause  (a)(vi)  of this  Schedule  D. All  policies  (other  than in respect to
liability or workers  compensation  insurance) shall insure the interests of the
Owner Lessor, the Owner Trustee, the Owner Participant, the Equity Investor, the
Indenture  Trustee  and the Pass  Through  Trustee  regardless  of any breach or
violation by the Lessee of any warranties,  declarations or conditions contained
in such  policies,  any action or inaction of the  Lessee,  the Owner  Lessor or
others,  or any foreclosure  relating to the Facility or any change in ownership
of all or any portion of the Facility.

                                    SCH. D-3

<PAGE>


     (iii) A loss under any  insurance  required  to be  maintained  pursuant to
clause  (a)(vi)  of this  Schedule  D  shall  be  adjusted  with  the  insurance
companies, including the filing in a timely manner of appropriate proceedings by
the Lessee, subject to the approval of the Owner Lessor and, so long as the Lien
of the Indenture  shall not have been  terminated or  discharged,  the Indenture
Trustee and the Pass Through  Trustee if such loss is in excess of  $10,000,000,
such  approval  not to be  unreasonably  withheld,  delayed or  conditioned.  In
addition the Lessee may in its reasonable  judgment consent to the settlement of
any loss;  provided  that,  in the  event  that the  amount of the loss  exceeds
$10,000,000,  the terms of such  settlement  shall be  consented to by the Owner
Lessor and, so long as the Lien of the Indenture  shall not have been terminated
or discharged,  the Indenture Trustee and the Pass Through Trustee, such consent
not to be unreasonably withheld, delayed or conditioned.

     (iv) All  policies  of  insurance  required  to be  maintained  pursuant to
paragraph  (a) of this  Schedule D shall be endorsed so that if at any time they
should be canceled,  or coverage  shall be reduced in a manner  which  adversely
affects  the  interests  of the  Owner  Lessor,  the  Owner  Trustee,  the Owner
Participant,  the Equity  Investor,  the  Indenture  Trustee or the Pass Through
Trustee,  such cancellation or reductions shall not be effective as to the Owner
Lessor,  the Owner Trustee,  the Owner  Participant,  the Equity  Investor,  the
Indenture  Trustee and the Pass Through  Trustee  until thirty (30) days (except
for non payment of any premium, which shall be for ten (10) days), after receipt
by the Owner  Lessor  and the  Indenture  Trustee of  written  notice  from such
insurer of such cancellation or reduction.

     (v) The  Lessee  may,  at its own cost and  expense,  prosecute  any  claim
against any insurer or contest any settlement  proposed by any insurer,  and the
Lessee may bring any such  prosecution  or contest in the name of the  Indenture
Trustee,  the Owner Lessor, the Owner Trustee,  the Lessee, or any thereof,  and
the  Indenture  Trustee and the Owner  Lessor will join  therein at the Lessee's
request,  provided that the Lessee shall indemnify the Indenture Trustee and the
Owner  Lessor  against  any  losses,  costs or  expenses  (including  reasonable
attorneys'  fees) which the  Indenture  Trustee or the Owner Lessor may incur in
connection with such prosecution or contest.

(e)  Evidence of  Insurance.  On the Closing  Date and on an annual  basis on or
before each policy  anniversary,  the Lessee shall furnish the Owner Lessor and,
so  long as the  Lien  of the  Indenture  shall  not  have  been  terminated  or
discharged,  the  Indenture  Trustee and the Pass Through  Trustee with approved
certification  of all  insurance  required  to be  maintained  pursuant  to this
Schedule  D. Such  certification  shall be  executed  by each  insurer  or by an
authorized  representative  of each insurer  where it is not  practical for such
insurer to execute the certificate  itself.  Such  certification  shall identify
underwriters,  the type of insurance,  the insurance  limits and the policy term
and shall specifically list the special  provisions  required for such insurance
pursuant to  paragraph  (a) of this  Schedule D. Upon  request,  the Lessee will
without  unreasonable delay furnish the Owner Lessor and, so long as the Lien of
the  Indenture  shall not have been  terminated  or  discharged,  the  Indenture
Trustee and the Pass Through Trustee copies of all insurance  policies,  binders
and cover notes or other  evidence of such  insurance  regarding  the  insurance
required to be maintained by the Lessee pursuant to this Schedule D.

                                    SCH. D-4

<PAGE>


     (f) Reports.  Upon the request of the Owner Lessor or the Indenture Trustee
or  the  Pass  Through  Trustee,   concurrently   with  the  furnishing  of  the
certification  referred to in paragraph  (e) above,  the Lessee will furnish the
Owner Lessor,  the Owner  Trustee,  the  Indenture  Trustee and the Pass Through
Trustee with (i) a report of an independent broker,  signed by an officer of the
broker,  stating that in the opinion of such broker,  the insurance then carried
or to be renewed is in accordance  with paragraphs (a), (b), (d) and (l) of this
Schedule  D and (ii) a schedule  of the  insurance  policies  held by or for the
benefit of the Lessee and required to be maintained pursuant to paragraph (a) of
this Schedule D. Such schedule of insurance  shall  include,  to the extent such
information  is not  included  on the  insurance  certificates,  the name of the
insurance company,  policy number, type of insurance,  major limits of liability
and expiration  date of the insurance  policies.  In addition,  the Lessee shall
promptly  advise the Owner  Lessor and, so the Lien of the  Indenture  shall not
have been terminated or discharged,  the Indenture  Trustee and the Pass Through
Trustee in writing of any default in the payment of any premium and of any other
act or  omission  on the part of the  Lessee  which  may  invalidate  or  render
unenforceable,  in whole or in part, any insurance  required to be maintained by
the Lessee pursuant to this Schedule D.

     (g)  Failure  to  Maintain  Insurance.  In the  event the  Lessee  fails to
maintain the full insurance  coverage required pursuant to paragraph (a) of this
Schedule D, the Owner Lessor or the  Indenture  Trustee,  upon thirty (30) days'
prior  notice  (unless the  aforementioned  insurance  would  lapse  within such
period, in which event notice shall be given as soon as reasonably  possible) to
the Lessee of any such failure, may (but shall not be obligated to) take out the
required  policies  of  insurance  and pay the  premiums  on the  same  and such
premiums paid by the Owner Lessor or the Indenture Trustee shall be Supplemental
Lease Rent.

     (h) No Duty of the Owner Lessor,  the Owner Trustee,  the Indenture Trustee
or the Pass Through  Trustee to Verify or Review.  No provision of this Schedule
D, or any  provision of this Facility  Lease,  shall impose on the Owner Lessor,
the Trust Company,  the Owner Trustee, the Indenture Trustee or the Pass Through
Trustee  any duty or  obligation  to verify the  existence  or  adequacy  of the
insurance  coverage  maintained by the Lessee,  nor shall the Owner Lessor,  the
Trust  Company,  the Owner  Trustee,  the Indenture  Trustee or the Pass Through
Trustee be  responsible  for any  representations  or  warranties  made by or on
behalf of the Lessee to any insurance company or underwriter. Any failure on the
part of the Owner Lessor,  the Trust Company,  the Owner Trustee,  the Indenture
Trustee  or the Pass  Through  Trustee  to  pursue  or obtain  the  evidence  of
insurance  required  by this  Schedule D from the Lessee  and/or  failure of the
Owner Lessor, the Trust Company, the Owner Trustee, the Indenture Trustee or the
Pass  Through  Trustee  to point  out any non  compliance  of such  evidence  of
insurance shall not constitute a waiver of any of the insurance requirements set
forth in this Schedule D.

     (i)  Application  of Insurance or  Requisition  Proceeds for Event of Loss.
Subject to paragraph (k) of this  Schedule D, as between the Indenture  Trustee,
the Owner Lessor and the Lessee,  it is agreed that (i) any  insurance  proceeds
received  as the  result of the  occurrence  of any Event of Loss  described  in
paragraph (a) or (b) of the definition thereof, or (ii) any Requisition proceeds
received as the result of any Event of Loss  described in  paragraph  (c) of the
definition  thereof,  will be  paid to the  Indenture  Trustee's  Account  or an
account  designated  by the  Indenture  Trustee,  so  long  as the  Lien  of the
Indenture  shall not have been  terminated or  discharged,  and thereafter to an
account of the Owner Lessor and  disposed of as set forth in Section  10.2(b) of
this Facility Lease.

                                    SCH. D-5

<PAGE>


     (j)  Application of Insurance or Requisition  Proceeds for Other than Event
of Loss.  Subject to paragraph  (k) of this Schedule D, as between the Indenture
Trustee,  the Owner Lessor and the Lessee,  so long as no Lease Event of Default
or Event of Loss shall have  occurred  and be  continuing,  (x) in the event (A)
insurance  proceeds  received  under the  insurance  maintained  pursuant to the
requirements  of Section 11 of this  Facility  Lease on account of any damage to
the Facility or any part thereof  which does not  constitute an Event of Loss or
(B)  proceeds  received  as  compensation  for  any  Requisition  or  taking  of
possession  of all or any portion of the Facility by or pursuant to a request of
any  Governmental  Entity under the power of eminent  domain or otherwise  for a
period which does not constitute an Event of Loss, in the aggregate, do not with
respect to any such event exceed  $10,000,000,  such proceeds  shall be paid out
directly  to the  Lessee  and (y) in the event  any such  proceeds  exceed  such
amount,  such proceeds will be held in an account of the Indenture  Trustee,  so
long as the Lien of the Indenture  shall not have been terminated or discharged,
and  thereafter  in an account of the Owner Lessor and applied in payment (or to
reimburse the Lessee) for repairs or replacement in accordance with the terms of
this  Facility  Lease.  The Lessee  shall be  entitled to receive the amounts so
deposited against certificates,  invoices or bills satisfactory to the Indenture
Trustee,  so long as the Lien of the Indenture shall not have been terminated or
discharged,  and thereafter the Owner Lessor,  delivered to such party from time
to time as such work or repair  progresses.  To the  extent  that the  Indenture
Trustee,  so long as the Lien of the Indenture shall not have been terminated or
discharged, and thereafter the Owner Lessor estimates that the cost of such work
or repair  shall  exceed  the  amount of such  proceeds,  the  Lessee  will make
adequate  provisions  for  the  payment  thereof,   which  provisions  shall  be
acceptable to such party.  Any moneys  remaining in the aforesaid  account after
final payment for repairs has been made shall be paid to the Lessee.

     (k) Application in Default. Any amount referred to in paragraphs (i) or (j)
of this  Schedule  D which is  payable  to the  Lessee  shall not be paid to the
Lessee or, if it has been previously paid to the Lessee, will not be retained by
the Lessee,  if at the time of such payment a Lease Event of Default  shall have
occurred and be continuing. In such event, all such amounts shall be paid to and
held by the Indenture  Trustee,  so long as the Lien of the Indenture  shall not
have been terminated or discharged and thereafter the Owner Lessor,  as security
for the  obligations  of the Lessee  hereunder,  and be  invested  in  Permitted
Investments  in  accordance  with Section 18 of this  Facility  Lease.  Any such
amounts, and any gain realized from such Permitted  Investments,  may be applied
by such party  toward  payment of any of such  obligations  of the Lessee at the
time due hereunder as such party may elect in its sole discretion.  At such time
as there shall not be continuing any Lease Event of Default, all such amounts at
the time held by the  Indenture  Trustee,  so long as the Lien of the  Indenture
shall not have been  terminated or discharged,  and thereafter the Owner Lessor,
in excess of the amount, if any, which such party shall have elected to apply as
above provided shall be paid to the Lessee.

     (l) "Claims Made" Policies for Certain Types of Insurance. If any liability
insurance required to be maintained pursuant to paragraph (a) of this Schedule D
is allowed to be written on a "claims  made" basis,  then such  insurance  shall
include the following:

                                    SCH. D-6

<PAGE>


     (i)  the  retroactive  date  (as  such  term is  specified  in each of such
policies) shall be no later than the Closing Date; and

     (ii) each time any policy  written on a "claims  made" basis is not renewed
or the retroactive date of such policy is to be changed, the Lessee shall obtain
or cause to be obtained for each such policy or policies  the broadest  extended
reporting  period  coverage,  or "tail"  reasonably  available in the commercial
insurance  market  for each  such  policy  or  policies,  as  determined  in the
reasonable  judgment  of the  Owner  Lessor  and,  so  long  as the  Lien of the
Indenture  shall not have been terminated or discharged,  the Indenture  Trustee
and the Pass  Through  Trustee,  but in no event  less than two years  after the
expiration of such policy or policies.

     (m) Required  Insurance Not Available.  In the event any insurance required
to be maintained  pursuant to this Schedule D, other than insurance  required by
law  to be  maintained,  shall  not be  reasonably  available  and  commercially
feasible in the commercial  insurance  market,  the Owner Lessor and, so long as
the  Notes  are  outstanding,  the  Indenture  Trustee  shall  not  unreasonably
withhold,  delay or condition  their  consent to waive such  requirement  to the
extent the  maintenance  thereof is not so available so long as the Lessee shall
(i)  provide  written  reports  to the  Owner  Lessor,  the Owner  Trustee,  the
Indenture  Trustee  and the Pass  Through  Trustee  prepared  by an  independent
insurance advisor of recognized national standing certifying that such insurance
is  not  reasonably  available  and  commercially  feasible  in  the  commercial
insurance  market for  electric  generating  plants of similar type and capacity
(and, in any case where the required  amount is not so available,  certifying as
to the maximum  amount which is so available) and explaining in detail the basis
for such  conclusions;  and (ii) at any time after the  granting of such waiver,
but not more often than once a year,  the Owner Lessor and, so long as the Notes
are outstanding,  the Indenture Trustee or the Pass Through Trustee may request,
and the Lessee shall  furnish to the Owner Lessor  within thirty (30) days after
such request,  supplemental  reports  reasonably  acceptable to the Owner Lessor
from such  insurance  advisor  updating its prior reports and  reaffirming  such
conclusion  and shall  furnish to the  Indenture  Trustee  and the Pass  Through
Trustee,  so long as the Notes are  outstanding,  a certificate of the Lessee to
such  effect;  provided,  that any such relief from such  requirements  shall be
effective only so long as such insurance shall not be available and commercially
feasible  in the  commercial  insurance  market,  it being  understood  that the
failure of the Lessee to timely  furnish any such  supplemental  report shall be
conclusive  evidence  that  such  relief  is no longer  effective  because  such
condition  no  longer  exists,  but  that  such  failure  is not the only way to
establish such nonexistence.

     (n)  Additional  Insurance by Owner Lessor.  At any time,  the Owner Lessor
(either  directly or in the name of the Owner  Participant),  the Trust Company,
the Owner  Trustee or the  Indenture  Trustee may at its own expense and for its
own account  carry  insurance  with  respect to its  interest  in the  Facility;
provided,  that such  insurance  does not in any way interfere with the Lessee's
ability to obtain insurance required to be maintained  pursuant to this Schedule
D. Any insurance payments received from policies maintained by the Owner Lessor,
the Trust Company,  the Owner Trustee or the Indenture  Trustee  pursuant to the
previous  sentence  shall be retained by the Owner Lessor,  the Owner Trustee or
the  Indenture  Trustee,  as the  case may be,  without  reducing  or  otherwise
affecting the Lessee's obligations hereunder.

                                    SCH. D-7

<PAGE>


     (o)  Shared  Coverage.  All  of  the  insurance  policies  required  to  be
maintained  pursuant to this Schedule D may cover other  operations,  facilities
and properties of either the Lessee or the Guarantor or any of their  Affiliates
as long as the limits of  insurance  available to the Facility are not less than
the  requirements  set forth  herein.  In such  case,  any  reference  herein to
insurance  maintained pursuant to the terms hereof shall be deemed only to refer
to the  insurance  provided  under such  insurance  policies  to the extent such
insurance is required to be maintained pursuant to the terms hereof.


                                    SCH. D-8


<PAGE>






                                                                  EXHIBIT A
                                                                     to
                                                                Facility Lease
                                                                --------------


                          DESCRIPTION OF FACILITY SITE
                          ----------------------------

                                  FACILITY SITE














                                    EXH. A-1

<PAGE>



                                                                   EXHIBIT B
                                                                      to
                                                                  Facility Lease
                                                                  --------------


                             Description of Facility
                             -----------------------




                                    EXH. B-1