Exhibit 10.40



                                     PURCHASE AGREEMENT

                                          BETWEEN

                                 MOUNTAINVIEW POWER COMPANY

                                            AND

                                  GENERAL ELECTRIC COMPANY

                                            FOR

                        FOUR PG7241 FA COMBUSTION TURBINE GENERATORS

                                          FOR THE

                              MOUNTAINVIEW GENERATION PROJECT



                                      October 25, 1999




 CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
               EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

<PAGE>
                                         APPENDICES



     A. SCOPE OF WORK (GE Proposal # 90044AG dated September 1999)

     B. PERSONNEL TRAINING PROGRAM

     C. QUALITY ASSURANCE PROGRAM

     D. PAYMENT/TERMINATION SCHEDULE

     E. SAMPLE GE MONTHLY REPORT Schedule 1: Final Lien Waiver Form

     F. INTENTIONALLY OMITTED

     G. APPROVED TEST PROCEDURES

     H. INTENTIONALLY OMITTED

     I. CONFIDENTIALITY AGREEMENT

     J. FORM OF RETAINAGE BOND.

     K. TECHNICAL ADVISORY SERVICES

     L. FUELS SPECIFICATION

     M. PRICING SUMMARY/OPTIONS



                                       2
<PAGE>
TABLE OF CONTENTS


SECTION 1: DEFINITIONS......................................................5


SECTION 2:  GENERAL TERMS OF SALE...........................................9


SECTION 3:  OBLIGATION TO PROCEED..........................................10


SECTION 4:  PERSONNEL TRAINING; OPERATING MANUAL...........................10


SECTION 5:  QUALITY ASSURANCE..............................................10


SECTION 6:  RESERVED..........................................................


SECTION 7:  PAYMENT........................................................10


SECTION 8:  TAXES..........................................................12


SECTION 9:  PRICE ADJUSTMENTS..............................................13


SECTION 10:  INSPECTION AND FACTORY TESTS..................................13


SECTION 11:  TITLE TRANSFER, RISK OF LOSS, SHIPMENT TO STORAGE.............14


SECTION 12:  COMPLIANCE WITH APPLICABLE LAWS AND PERMITS...................14


SECTION 13: EXPORT PROHIBITIONS............................................15


SECTION 14:  CHANGES.......................................................16


SECTION 15:  NON-RECOURSE OBLIGATIONS......................................16


SECTION 16: MECHANICAL COMPLETION..........................................16


SECTION 17: GUARANTEED SHIPMENT DATE; LIQUIDATED DAMAGES FOR LATE SHIPMENT.18


SECTION 18:  PERFORMANCE TESTS.............................................19


SECTION 19:  PERFORMANCE GUARANTEES........................................20


SECTION 20.  ACHIEVMENT OF PERFORMANCE GUARANTEES..........................22


SECTION 21. ACCEPTANCE.....................................................23


                                       3
<PAGE>
TABLE OF CONTENTS





SECTION 22: INTENTIONALLY LEFT BLANK..........................................


SECTION 23: PERFORMANCE GUARANTEE PAYMENTS AND REMEDIES.....................24


SECTION 24: WARRANTIES......................................................25


SECTION 25:    FORCE MAJEURE EVENT..........................................26


SECTION 26:   INDEMNITIES...................................................28


SECTION 27:   LIMITATIONS OF LIABILITIES....................................29


SECTION 28: CONSEQUENTIAL DAMAGES...........................................30


SECTION 29:  SELLER-PROVIDED INSURANCE......................................30


SECTION 30: BUYER-PROVIDED INSURANCE........................................32


SECTION 31: DEFAULT AND REMEDIES............................................33


SECTION 32: ASSIGNMENTS.....................................................34


SECTION 33: PERFORMANCE IN FAVOR OF FINANCING PARTIES.......................35


SECTION 34: BUYER REVIEW OF DOCUMENTS.......................................35


SECTION 35: WAIVERS.........................................................36


SECTION 36: GOVERNING LAW...................................................36


SECTION 37: SEVERABILITY....................................................37


SECTION 38:  NOTICES........................................................37


SECTION 39:  HEADINGS AND INTERPRETATION RULES..............................38


SECTION 40: ENTIRE AGREEMENT................................................38


SECTION 41: SELLER'S PROPRIETARY INFORMATION................................38


SECTION 42:  PUBLICITY RELEASES; INFORMATION................................38


SECTION 43:  NON NUCLEAR USE................................................38



                                       4
<PAGE>
THIS PURCHASE  AGREEMENT  ("AGREEMENT") IS ENTERED INTO OCTOBER 25, 1999, BY AND
AMONG GENERAL ELECTRIC COMPANY, A NEW YORK CORPORATION, HAVING A PRINCIPAL PLACE
OF BUSINESS AT 1 RIVER ROAD, SCHENECTADY,  NEW YORK 12345 USA ("GE" OR "SELLER")
AND MOUNTAINVIEW POWER COMPANY, A DELAWARE CORPORATION, HAVING A PRINCIPAL PLACE
OF BUSINESS AT 245 WINTER ST, SUITE 300,  WALTHAM,  MA 02451  ("BUYER")  (GE AND
BUYER BEING REFERRED TO HEREIN  INDIVIDUALLY AS A "PARTY" AND  COLLECTIVELY  THE
"PARTIES").


                                          RECITALS

     WHEREAS, GE is, among other things, a manufacturer of combustion and steam
     turbine generator equipment; and

     WHEREAS, Buyer is, among other things, in the business of independent power
     generation facility development and operation.

     WHEREAS, Seller has the desire to sell four (4) new PG7241 (FA) gas
     turbine-generators (the "Turbine Generator Units") to the Buyer and ship
     two Turbine Generator Units prior to August 31, 2002 and two Turbine
     Generator Units prior to September 30, 2002 which is expected to be used by
     Buyer in its development and construction of the Mountainview Generation
     Project (the "Project"); and

     WHEREAS, Buyer desires to purchase, and Seller desires to sell four (4)
     PG7241FA Gas Turbine Generators for the Project, subject to the terms and
     conditions of this purchase agreement ("AGREEMENT");.

NOW, THEREFORE,  in consideration of the premises and mutual covenants set forth
herein the Parties agree as follows:

                                   SECTION 1: DEFINITIONS

"Acceptance" Acceptance shall have the meaning in Section 21 hereof.

"Applicable Laws and Permits" means all laws,  ordinances,  rules & regulations,
permits and, judgments, decrees, injunctions, orders of any court, arbitrator or
governmental  agency or authority,  having  jurisdiction over the location where
the Work is to be performed.

"Applicable  Codes and Standards" means those codes and standards  applicable to
the design,  engineering,  manufacture,  workmanship and equipment applicable to
the Scope of Work, as more fully described in the Scope of Work.

"Approved  Test  Procedures"  means the test  procedures set forth in Appendix G
hereto as amended and supplemented in accordance with this Agreement.

"Base Labor Index" shall be as defined in Section 9.

"Base Materials Index" shall be as defined in Section 9.

"Business Days" means all calendar days, except Saturday,  Sunday and such other
days on which banks in the State of  California  are required or  authorized  to
close.

"Buyer Taxes" shall have the meaning in Section 8.2

"Contract Price" shall have the meaning in Section 7.2


                                       5
<PAGE>
"Damages"  shall mean  suits,  judgements,  expenses,  losses,  costs,  damages,
injuries,  obligations,  liabilities,  claims,  demands,  royalties,  penalties,
interest  and  causes  of  action,   including  without  limitation   reasonable
attorney's  fees  (collectively  the "Damages") as they may apply to third party
claims pursuant to Section 26.

"Defects or Deficiencies" means, any materials, equipment, tools, supplies which
(i) do not conform to the Agreement,  (ii) would materially and adversely affect
the performance of the Turbine Generator Units under the Performance  Guarantees
or would materially and adversely affect the capability of the Turbine Generator
Units to be operated on a continuous  basis;  or (iii) affect the ability of the
Turbine  Generator  Units to be operated in accordance  with Applicable Laws and
Permits or Applicable Codes and Standards.

"Delay Payments" shall include Late Guaranteed Shipment Delay Payments and Late
Substantial Completion Delay Payments.

"Delivery  Point" means the Project Site for shipments made via common  carrier,
and to the nearest rail siding for shipments made via rail.

"Emission Guarantee" shall be as defined in Section 19.4

"EPC Contractor" shall be as defined in Section 23.5.

"Financing  Parties"  means  any and all  lenders  providing  the  construction,
interim or  long-term  financing  (including  any  refinancing  thereof) for the
Project.

"Force Majeure" shall be as defined in Section 25.

"General Warranty" shall be as described in Section 24

"Good Electric Power Producing  Practices" means those  construction,  operation
and  maintenance  practices,  methods and  procedures,  as modified by published
guidelines from time to time, that are generally  accepted by the electric power
producing  industry in North America,  as of the date of this  Agreement.  Those
practices   which  are  commonly  used  in  prudent   electric  power  producing
engineering  and  operations  to  construct,   operate  and  maintain  equipment
lawfully, safely, dependably and economically, as applied by the Seller to units
of the size and type used for the Project.

"Guarantee Conditions" shall have the meaning in Section 19.1

"Guaranteed Heat Rate" shall have the meaning in Section 19.1

"Guaranteed Shipment Dates" shall be as described in Section 17.1

"Late Guaranteed Shipment Delay Payments" shall be as described in Section 17.2

"Late  Substantial  Completion  Delay Payments" shall be as described in Section
16.1.5

"Liens" shall have the meaning in Section 7.11.

 "Hazardous  Material"  means  any  toxic  or  hazardous  waste,  pollutants  or
substances,  including, without limitations,  asbestos, PCBs, petroleum products
and by-products,  substances defined or listed as "hazardous substance",  "toxic
substance",  "toxic pollutant",  or similarly identified substances or mixtures,
in or  pursuant to any  environmental  law,  including,  but not limited to, the
Comprehensive Environmental Response, Compensation


                                       6
<PAGE>
and  Liability  Act of 1980,  as amended,  42 U.S.C.  Section 9601 et seq.,  the
Hazardous Materials  Transportation  Act, 49 U.S.C.  Section 1802, et seq. , the
Resource  Conservation  and Recovery Act, 42 U.S.C.  Section 6901, et seq.,  the
Toxic  Substance  Control Act of 1976,  as amended,  15 U.S.C.  Section 2601, et
seq.,  and the Clean Water Act, 33 U.S.C.  Section 446 et seq., as amended,  and
any substance regulated as hazardous under Florida state law.

"Mechanical Completion" shall have the meaning provided in Section 16.

"Minimum Performance" shall mean achieving (i) less than or equal to 105% of the
Heat Rate Guarantee while achieving 100% of the Emission Guarantee, (ii) greater
than or equal to 95% of the Turbine  Generator Unit Electrical  Output Guarantee
while achieving 100% of the Emission Guarantees.

"Natural Gas" shall mean the fuel delivered by pipeline to the Turbine Generator
Units and in  accordance  with the fuel  specification  attached  as Appendix L,
Fuels Specification.

" Heat Rate Guarantee" shall have the meaning in section 19.2

"Notice of Acceptance" shall have the meaning in Section 21.2

"Notice of Default" shall have the meaning in Section 31

"Notice of Mechanical  Completion"  means when Buyer delivers to Seller a notice
of Mechanical Completion.

"Notice of Performance Test Success" shall have the meaning of Section 20.1

"Notice of Substantial  Completion" means when Buyer delivers to Seller a notice
of Substantial Completion.

"Operating  Criteria" means the mode of operation of the Turbine Generator Units
combusting Natural Gas fuel

"Operating  Manual"  means the complete  equipment and system  instructions  and
procedures for the start-up,  operation and maintenance of the Turbine Generator
Units.

"Options" shall have the meaning in Section 7.2 hereof.

"Parties" shall mean Seller or Buyer.

"Payment/Termination Schedule" shall be in accordance with Appendix D

"Performance  Tests"  means  the  operation  of the  Turbine  Generator  Unit in
accordance  with the  provisions  of  Section 18 hereof  and the  Approved  Test
Procedures for the purposes of determining  each Turbine  Generator Unit's level
of  achievement  of one or more of the  Performance  Guarantees,  as  defined in
Section 19 hereof.

"Performance Guarantees" shall have the meaning in Section 19 hereof.

"Performance Guarantee Payments" shall have the meaning in Section 23.

"Permit"   means   any   waiver,   exemption,   variance,   franchise,   permit,
authorization,  license or similar order of or from any federal,  state, county,
municipal, regional, environmental or


                                       7
<PAGE>
CONFIDENTIAL  MATERIAL  OMITTED AND FILED  SEPARATELY  WITH THE  SECURITIES  AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

other governmental body, instrumentality, agency, authority, court or other body
having jurisdiction over the matter in question.

"Project"  shall  mean  the  Mountainview   Generation  Project,  an  electrical
generating facility being developed in San Bernardino, California.

"Project Site" means certain parcels of land in San Bernardino,  California, and
any other real estate  rights of Buyer upon which the Project will be located or
from which the Project will otherwise benefit.

"Punch List" means the list prepared  (and  periodically  revised) by Buyer,  of
minor items of work which may remain to be performed by Seller after Acceptance,
but which items do not affect Buyer's  ability to operate the Turbine  Generator
Units in accordance with Applicable Laws and Permits and the Agreement.

"Quality  Assurance  Program" is Seller's written quality  assurance program for
the work,  including  the written  procedures  to  implement  such  program,  as
described in Appendix C.

"Reliability Guarantee" shall have the meaning in Section 19.5

******************************************************************
"Rewarranty Period" shall have the meaning in Section 24.4

"Revised Guaranteed Shipment Date" shall have the meaning in Section 7.2.

"Seller Taxes" Shall have the meaning in Section 8.1.

"Scope  Changes"  means  a  material   addition  to,  deletion  from,  or  other
modification to, the quality,  function or scope of the Turbine  Generator Units
as delineated in the Scope of Work, or a material change to the  requirements of
this Agreement,  but shall not include Seller's correction of the Work from time
to time pursuant to the Scope of Work or Seller's warranties.

"Scope of Work" shall be as described in Appendix A.

"Steam Turbines" shall have the meaning in Section 2

"Subcontract"  means a  contract  between  Seller  and a  Subcontractor  for the
performance or supply of a portion of the Work by such Subcontractor.

"Subcontractor" shall mean any subcontractor of Seller.

"Substantial Completion" shall have the meaning provided in Section 16.1.4

"Substantial  Completion Cure Period" shall have the meaning provided in Section
16.1.5.

"Technical Advisory Services" shall be as described in Appendix K.

"Termination for Cause" shall have the meaning in Section 31.


                                       8
<PAGE>

"Termination for Convenience" shall have the meaning in Section 31.

"Training Services" shall be as described in Appendix B.

"Turbine Generator Unit(s)" shall be as described in Section 2.

"Turbine  Generator Units Electrical  Output Guarantee" shall be as described in
Section 19.3.

"Warranty Period" shall have the meaning of Section 24.1

"Work"  shall  mean  all  work,  manufacture  and  technical  direction  of  the
installation  of the Turbine  Generator  Units on the Project Site as more fully
described in the Scope of Work.


                              SECTION 2: GENERAL TERMS OF SALE

A.   The  Turbine  Generator  Units  shall  meet  all the  requirements  of this
     Agreement including,  but not limited to, the Scope of Work, and shall meet
     all  the  requirements  of  (i)  Seller's  design  criteria,  manufacturing
     processes and procedures and Quality Assurance Program, (ii) those portions
     of industry specifications, codes and standards in effect as of the date of
     this Agreement,  which are deemed  applicable by Seller to the Work,  (iii)
     the United States Federal, State and local laws and rules applicable to the
     locations  where  the Work is  performed  in  effect as of the date of this
     Agreement.  Buyer agrees to buy, and Seller agrees to sell,  subject to the
     terms and conditions of this Agreement.

               Four (4) PG 7241 FA gas turbine  generators  for  combined  cycle
               use, using a dry low NOx combustion  system,  combusting  Natural
               Gas Fuel, and associated  auxiliary  equipment as more completely
               defined in Appendix A, Scope of Work, (collectively, the "Turbine
               Generator Units" or individually the "Turbine  Generator  Unit").
               Two  Turbine  Generator  Units to be shipped no later than August
               31, 2002 and two Turbine  Generator  Units to be shipped no later
               than  September  30, 2002.  Seller  shall also provide  personnel
               qualified to give technical  advice relative to the  installation
               and startup of the Turbine  Generator Units (as described  herein
               and as further  defined in  Appendix K, the  "Technical  Advisory
               Services").  Seller shall also  provide  training  services  (the
               "Training  Services")  for  Buyer's  personnel  as  described  in
               Appendix B Personnel  Training  Program.  The Technical  Advisory
               Services and Training Services and any optional services provided
               are referred to herein as the "Services."

     It is expressly  understood  that the Seller will have the right to utilize
     all resources within its global  manufacturing and vendor network to supply
     the requirements of this Agreement for the supply of the Turbine  Generator
     Units.


                                       9
<PAGE>


CONFIDENTIAL  MATERIAL  OMITTED AND FILED  SEPARATELY  WITH THE  SECURITIES  AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.


         **********************************************************


                              SECTION 3: OBLIGATION TO PROCEED


********************************************************************************


                      SECTION 4: PERSONNEL TRAINING; OPERATING MANUAL

Commencing as soon as  practicable  prior to start-up  operations,  Seller shall
provide on-site classroom training for the operation and maintenance  personnel.
Such Training Services, as more fully described in Appendix B, shall be designed
to offer  basic  instruction  and  training  to the  operation  and  maintenance
personnel,  and  shall  be of such  quality  as to  provide  the  operation  and
maintenance  personnel with a reasonable  understanding  of the major,  critical
operational and maintenance aspects of the Turbine Generator Units. Seller shall
provide a minimum of eighteen (18) copies of the  appropriate  manuals and other
written  materials as part of the training  program  (hereinafter the "Operating
Manual").  Buyer shall provide a suitable classroom for the Seller's training of
the operation and maintenance personnel.

                                SECTION 5: QUALITY ASSURANCE

Seller shall fully observe and implement its Quality  Assurance  Program as more
fully  described  in Appendix C until  Acceptance.  All tests,  inspections  and
quality assurance procedures required by this Agreement shall be in addition to,
and not in lieu of, applicable Quality Assurance Program activity.  Seller shall
inspect  and test the Work,  including  all design,  installation,  engineering,
materials and services  performed or provided.  Seller shall correct all Defects
or  Deficiencies  within a reasonable  time.  Seller's  compliance with Seller's
Quality Assurance Program in accordance with the procedures contained therein is
a requirement of this Agreement.

                                    SECTION 6: RESERVED


                                     SECTION 7: PAYMENT

7.1       ***************************************************************
7.2
Buyer agrees to pay Seller a base price of
********************************************************("Contract  Price")  for
shipment and  Acceptance of the Turbine  Generator  Units and  completion of the
Scope of Work set  forth  in  Appendix  A, as may be  adjusted  by such  amounts
associated  with options that Buyer elects to include or exclude in the Scope of
Work as  described  in Appendix M (the  "Options")  or as adjusted by any change
orders  pursuant to Section 14. Buyer shall notify  Seller of all Options  Buyer
wishes to include 15 months prior to the Guaranteed Shipment Dates. The Contract
Price may be subsequently modified through changes to the Scope of Work pursuant
to Section 14 hereof.  The Contract Price set forth above  includes  freight and
delivery to the Delivery Point.


                                       10
<PAGE>


CONFIDENTIAL  MATERIAL  OMITTED AND FILED  SEPARATELY  WITH THE  SECURITIES  AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

7.3      Seller retains the right to determine transportation mode.

7.4      Paymentsof  the  Contract  Price shall be made in  accordance  with the
         Payment/Termination  Schedule as set forth in Appendix D, provided that
         Seller has complied with all the material  terms and conditions of this
         Agreement.  The  progress  payments  in Appendix D listed as payable in
         March and April of 2001 may be  delayed by Buyer  until May 2001.  Such
         delayed  payments will be then payable in May 2001  (together  with the
         scheduled May 2001 payment),  and will be paid to Seller with interest.
         The interest shall be calculated  utilizing an annual rate equal to the
         U.S. prime lending rate  published,  on the day the payment was due, by
         Citibank  N.A.,  plus two  percent  (2%) from the date the  payment was
         originally scheduled to be made until the actual payment is made.

7.5      ****************************************************************

7.6      Thirty (30) days prior to each scheduled  payment,  Seller shall submit
         to Buyer a written  request or invoice for the  applicable  payment set
         forth on the Payment/Termination  Schedule. No payment to Seller or any
         use of the Turbine  Generator Units by Buyer shall alone  constitute an
         acceptance  of  any  of  the  Work  or  relieve  Seller  of  any of its
         obligations or liabilities with respect thereto.

7.7      Seller shall submit to Buyer all  information  required to be submitted
         with each payment request  pursuant to Appendix E. Seller shall furnish
         to Buyer with each payment request the information listed in Appendix E
         hereto  relating to such  payment  request and which are  necessary  to
         satisfy the requirements of all state and local tax authorities.

7.8      Subjectto  the terms of this  Agreement,  and  provided  that Buyer has
         received  Seller's  request for payment  and the  information  required
         pursuant to Appendix E hereof,  Buyer shall make,  or cause to be made,
         the scheduled payment pursuant to the Payment/Termination  Schedule, to
         Seller, provided that Buyer may withhold all or part of any Payment for
         the month in which the event occurs, to the extent of the occurrence of
         any of the following events:

         a.   Seller's  request for payment  does not meet the  requirements  of
              Appendix E hereof or the Monthly Progress Report for the month for
              which the request for  payment is made has not been  submitted  to
              Buyer.

         b.   Seller  has  failed to pay any  amounts  due and  payable to Buyer
              under the Agreement.

7.9      Seller shall  indemnify Buyer against any mechanics liens filed against
         the  Project  Site by  suppliers  or  subcontractors  to  Seller in the
         performance  of the Work  hereunder  and which  allege  non-payment  by
         Seller for such supplier or subcontractor work.


7.10     ******************************************************************


                                       11
<PAGE>


7.11     Final  Payment  Subject  to a Release  of  Liens:  At the time of final
         payment  hereunder,  Seller shall  certify to Buyer that the Project to
         the extent of the most  recent  payment  received  by Seller,  are free
         from,  and that  there are no  known,  or  pending  claims  of,  liens,
         security interests (including without limitation mortgages, pledges) or
         encumbrances of whatsoever  nature referred to collectively as "Liens")
         arising out of or in  connection  with  performance  by Seller,  or any
         Subcontractor, of the Work, or to the extent that any such Liens exist,
         that a bond or corporate  guaranty in an amount sufficient to discharge
         any  or  all  Liens  against  Seller  in  form,  substance  and  amount
         reasonably satisfactory to Buyer has been delivered by Seller.

7.12     Any  provision  hereof  to  the  contrary  notwithstanding,   upon  the
         occurrence  and  continuance  of a default  by Seller  as  provided  in
         Section 31 and the cure  period  applicable  hereto if any,  shall have
         expired,  Buyer may withhold or retain such portion  (including all) of
         any payments due to Seller under this Agreement as reasonably necessary
         to insure the performance of the Work or to protect fully Buyers rights
         hereunder.


                                      SECTION 8: TAXES

8.1      Seller Taxes:

         The Contract  Price shall not include and,  Seller shall be responsible
         for, and shall pay directly, any and all corporate and individual taxes
         that are measured by net income or profit  imposed by any  governmental
         authority of any country on Seller, its employees or Subcontractors due
         to the execution of any agreement or the  performance of or payment for
         Work hereunder (the "Seller Taxes"). It is expressly  understood by the
         Parties  that all export and import  duties  that may be applied to the
         Turbine  Generator Units and any Buyer taxes related to the manufacture
         of the Turbine  Generator Units outside of the United States of America
         are the responsibility of the Seller.

8.2      Buyer Taxes:

         Buyer shall be  responsible  for, and shall pay  directly  when due and
         payable,  any and all Buyer Taxes (defined below), and all payments due
         and payable by Buyer to Seller  hereunder shall be made, free and clear
         of all  deductions  and  withholding,  for  Buyer  Taxes.  If Seller is
         required to pay Buyer Taxes, Buyer shall, promptly upon presentation of
         Seller's invoice for such Buyer Taxes, pay to Seller an amount equal to
         the Buyer Taxes or alternatively, Buyer shall provide Seller with a tax
         exemption certificate acceptable to the taxing authorities.

         "Buyer  Taxes" means all taxes,  fees,  or other  charges of any nature
         (including,  but not  limited  to,  ad  valorem,  consumption,  excise,
         franchise,  gross receipts,  license,  property, sales, stamp, storage,
         transfer, turnover, use, or value-added taxes, and any and all items of
         withholding,   deficiency,  penalty,  addition  to  tax,  interest,  or
         assessment  related thereto),  other than Seller Taxes,  imposed by any
         governmental authority of any country on the Project. Products exported
         from the  United  States are  presumed  to be exempt  from Buyer  Taxes
         levied within the United States. When requested by Seller, Buyer agrees
         to furnish without charge evidence of tax or duty exemption  acceptable
         to the taxing or customs authorities.


                                       12
<PAGE>


                      SECTION 9: PRICE ADJUSTMENTS

For  shipments  beyond the  Guaranteed  Shipment  Dates due to delays  caused by
events of Force Majeure,  the Contract Price is subject to adjustment  upward or
downward by adjustment  of payments  made after such date to reflect  changes in
Bureau of Labor  Statistics  Indexes as  follows:  (a) 50% of the price shall be
adjusted by an amount equal to the percentage by which the "Labor Index" for the
month in which  payment is made is greater or less than the "Base Labor  Index";
(b) 50% of the price shall be adjusted by an amount equal to the  percentage  by
which the "Materials Index" for the month in which payment is made is greater or
less than the "Base Materials Index";

For the purpose of this  provision,  the following  definitions  apply:  (a) The
Labor  Index shall be that index  identified  as SIC 3511  (Turbine  and Turbine
Generator  Sets)  determined  and  reported  monthly  by  the  Bureau  of  Labor
Statistics  of the U.S.  Department of Labor;  (b) the Materials  Index shall be
that index identified as PPI 10-17 (Steel Mill Products) determined and reported
monthly by the Bureau of Labor  Statistics of the U.S.  Department of Labor; and
(c) the Base  Labor  Index  and Base  Materials  Index  shall be  determined  by
averaging the applicable indices for the month of the firm price date with those
of the preceding and following month.

All such  payments  shall be adjusted on a day to day basis based upon the month
of revised shipment. For billing purposes each payment shall include a tentative
adjustment  calculated  in the  manner  prescribed  above  but  based  upon  the
preliminary  indices in the most recent U.S.  Department  of Labor Index and the
Materials  Index at the time such  payment is invoiced.  Any further  adjustment
which  may be  required  shall be made at the time the final  indices  are first
published  for the month of shipment.  Should the bases for  calculation  of the
indices be modified, the index series in effect at the date of shipment shall be
used for final price adjustment. Should the indices be discontinued,  substitute
indices shall be substituted by mutual agreement of the parties.  The Base Labor
Index  shall  be  determined  to the  nearest  second  decimal  place.  The Base
Materials  Index shall be  determined to the nearest  first  decimal  place.  In
either case, if the next succeeding place is five or more, the preceding decimal
place  shall be raised  to the next  higher  figure.  Both  labor  and  material
adjustment shall be calculated to the nearest one-tenth of one percent.

                          SECTION 10: INSPECTION AND FACTORY TESTS

Buyer's inspectors will be provided reasonable access to Seller's facilities for
purposes of obtaining information on production progress, determining status and
observing tests and inspections of the Turbine Generator Units. Such access will
be limited to areas  concerned  with the Turbine  Generator  Units and shall not
include  restricted areas where work of a proprietary nature is being conducted.
Buyer will be advised as to the  schedule  for testing  which the  Parties  have
mutually  agreed  upon.  Buyer 's  inspectors  will be given an  opportunity  to
observe  these  tests  during  regular  working  hours.  Neither  completion  of
production  work  nor  shipment  of any  part of the  Turbine  Generator  Units,
however,  will be delayed to accommodate the inspectors.  The inspectors will be
informed of  Seller's  methods of  reporting  production  progress.  Appropriate
office  facilities  will be provided where Buyer's  inspectors may conduct their
work in connection  with the above.  Subject to the conditions set forth in this
Section 10, Seller shall obtain, where reasonably available, for Buyer access to
Subcontractors'  plants for the purposes described above.  Buyer's inspection of
the work or his failure to inspect in no way relieves  Seller of its  obligation
to fulfill the  requirements  of this  Agreement  nor is it to be  construed  as
acceptance by Buyer.


                                       13
<PAGE>


               SECTION 11: TITLE TRANSFER, RISK OF LOSS, SHIPMENT TO STORAGE

11.1     Passage of Title

         Title to major  components or materials of each Turbine  Generator Unit
         to be shipped  from within the United  States  shall pass to Buyer when
         made   available   for   shipment   from  the   Seller's   or  Seller's
         Subcontractor's  factory.  Title to major components or materials to be
         shipped from a country other than the United States shall pass to Buyer
         at the port of export  immediately  after such  components or materials
         have been cleared for export. Title to installation  services and other
         work in progress  conducted  at the Project Site shall pass to Buyer as
         such work is performed.

11.2     Risk of Loss

         Notwithstanding  passage of title,  Seller shall remain responsible for
         risk of loss or damage to the  Turbine  Generator  Units and  materials
         incorporated therein until delivered to the Delivery Point.

11.3     Shipment to Storage

         If any part of the Turbine  Generator  Units cannot be shipped to Buyer
         by the Guaranteed  Shipment Date due to any cause not  attributable  to
         Seller, Seller may ship such parts to storage. If such parts are placed
         in storage,  including storage at the facility where manufactured,  the
         following  conditions  shall apply:  (a) title shall  thereupon pass to
         Buyer if it had not already passed;  (b) any amounts  otherwise payable
         to Seller upon shipment shall be payable upon  presentation of Seller's
         invoices  and  certification  of  cause  for  storage;  (c) all  direct
         expenses incurred by Seller,  such as for preparation for and placement
         into storage, handling, inspection,  preservation,  insurance, storage,
         removal charges and any taxes shall be payable by Buyer upon submission
         of Seller's  invoices;  and (d) when conditions permit and upon payment
         of all amounts  due  hereunder,  Seller  shall  resume  shipment of the
         Turbine Generator Units to the Delivery Point.

                  SECTION 12: COMPLIANCE WITH APPLICABLE LAWS AND PERMITS


The Contract Price is based on Seller's design,  manufacture and shipment of the
Turbine  Generator Units and performance of the Work pursuant to Applicable Laws
and Permits in effect as of the date of this Agreement.  The Contract Price will
be equitably  adjusted to reflect  additional costs incurred by Seller resulting
from a change in Applicable  Laws and Permits  after the execution  date of this
Agreement  which have a material  effect on the Turbine  Generator  Units or the
Scope of Work. If Seller  determines that a change is not possible,  Seller will
so notify Buyer and Buyer may terminate this Agreement pursuant to Section 31.4,
"Termination  for  Convenience  by Buyer"  hereof or direct  completion  without
change and assume responsibility for obtaining any necessary waivers.

Notwithstanding the foregoing paragraphs,  no modification in the Contract Price
will be made as a result of any general change in the  manufacturing  facilities
of Seller  resulting  from the  imposition of any  requirements  by any Federal,
State or local governmental entity.


                                       14
<PAGE>


In addition to the Codes listed in Appendix A, Seller supplied Equipment will be
designed and furnished in compliance with the following State of California Code
requirements:

                         * CBC - 98 or UBC - 97
                         * Earthquake  Zone 4
                         * Soil Profile Type Sd
                         * Special  Occupancy  Structure
                         * Near Source Factor Na = 1.0
                         * Near  Source  Factor  Nv = 1.0
                         * Wind  Speed:  70 MPH
                         * Exposure Category C

Seller will submit Seller drawings,  as reasonably  required by the above stated
California  Code, for review by the appropriate  reviewing  authority as part of
Seller's  price.  Should  changes be required to bring  Seller's  Equipment into
compliance with codes or requirements  other than those State of California Code
requirements  stated  above,  such  changes  will be  performed  by  Seller as a
Contract extra to Buyer's account, and will be effected via a mutually agreed to
change order in accordance with this Section and Section 14.

                              SECTION 13: EXPORT PROHIBITIONS

Buyer agrees not to re-export US origin goods supplied by Seller,  other than in
and to the ultimate  country of  destination  specified in Buyer's  order and/or
declared as the country of ultimate  destination on Seller's invoice,  except as
may be permitted by the US export laws and regulations, as may be amended. Buyer
agrees  that it  will  not  re-export  to the  countries  designated  in  Export
Administration Regulations Section 779.4(f), any technical data or software (nor
the direct product thereof)  provided to Buyer by Seller in connection with this
Agreement,  unless prior  written  authorization  is obtained from the US Export
Administration.

Unless otherwise  provided in Seller's  proposal the Turbine Generator Units and
the Work sold hereunder are not intended for application (and shall not be used)
in connection with any nuclear  installation or activity and Buyer warrants that
it shall not use the Turbine Generator Units and Services for such purposes,  or
permit others to use or permit others to use the Turbine Generator Units for any
such purposes. If, in breach of the foregoing, any such use occurs, Seller shall
have no liability for any nuclear or other damage, injury or contamination,  and
Buyer shall  indemnify  Seller,  its  affiliates and suppliers of every type and
tier  against  any such  liability,  whether  arising  as a result  of breach of
Agreement, warranty, indemnity, tort (including negligence), strict liability or
otherwise.  Notwithstanding,  any other  provisions  herein,  and to the  extent
applicable,  Seller  shall be  responsible  for timely  obtaining  any  required
authorization,  such as an export  license,  import  license,  foreign  exchange
permit,  work permit or any other governmental  authorization.  Buyer and Seller
provide each other reasonable assistance in obtaining required authorizations.

Seller shall comply with all  applicable  state and federal laws,  including but
not  limited  to,  the  Fair  Labor  Standards  Act of  1938,  as  amended,  the
Occupational Safety and Health Act of 1970 (OSHA), laws related to nonsegregated
facilities and equal  employment  opportunity  (including  the seven  paragraphs
appearing in Sec. 202 of Executive Order 11246, as amended),  and all standards,
rules, regulations, and orders issued pursuant to such state and federal laws.


                                       15
<PAGE>


                                    SECTION 14: CHANGES

Buyer may,  by written  change  order,  make  mutually  agreed to changes in the
Turbine  Generator Units and the Work. If any such change results in an increase
or decrease in the cost or time required for the  performance  of the Work under
this Agreement, there shall be an equitable adjustment in the Contract Price and
the Guaranteed  Shipment Date. Seller shall not be obligated to proceed with the
changed  or extra  work  until the price of such  change  and its  effect on the
Guaranteed Shipment Date has been agreed upon in a written change order.

                            SECTION 15: NON-RECOURSE OBLIGATIONS

Except as may be otherwise  agreed  pursuant to Section 7.5  (particularly  the
second sentence thereof), none of the affiliates,  or members of Buyer, or their
respective officers, employees or agents shall be personally liable for payments
due under this Agreement or for the performance of any obligation hereunder, and
the sole recourse of Seller for the payment of amounts due from Buyer or for the
satisfaction  of any other  obligations of Buyer  hereunder shall be against the
Buyer.

                SECTION 16: MECHANICAL COMPLETION AND SUBSTANTIAL COMPLETION

16.1     Mechanical Completion

     16.1.1    Mechanical  Completion  shall  mean  that all the  following  has
               occurred:  (i) each Turbine Generator Unit has been substantially
               manufactured  in accordance with the terms of the Agreement (with
               the   exception  of  curing  the  Punch  List,   completing   the
               Performance   Tests   and   delivery   of  Final   Drawings   and
               Documentation);  (ii) Seller has provided to Buyer the  Operating
               Manual in accordance with Section 4 hereof,  Seller has completed
               the  operator  training  and Buyer has  provided  and  Seller has
               accepted the Punch List, (iii) all pollution and emission control
               systems  for  each  Turbine  Generator  Unit are  functional  and
               operating  as provided for in this  Agreement;  (iv) each Turbine
               Generator Unit is mechanically  and  electrically  functional and
               operating as intended per this Agreement; (v) all instrumentation
               and control  systems have been  calibrated and are functional and
               operating as intended  per this  Agreement;  (vi) all  applicable
               Turbine  Generator Unit systems shall have  undergone  functional
               testing at full load,  without leaks or equipment  failures;  and
               (vii) Mechanical Completion has been acknowledged by Buyer. Buyer
               shall give  Seller at least 5 days  notice  before  Buyer  begins
               mechanical completion tests.

     16.1.2    Notice of Mechanical Completion

               When Buyer  believes that it has achieved  Mechanical  Completion
               for any Turbine Generator Unit, it shall deliver to Seller notice
               thereof (the "Notice of Mechanical Completion").

     16.1.3    Achievement of Mechanical Completion

               Within ten (10) Business Days following  receipt of the Notice of
               Mechanical   Completion,   (a)  Seller  shall   acknowledge  that
               Mechanical  Completion for any applicable  Turbine Generator Unit
               has been achieved if the requirements of Section 16.1 hereof have
               been  satisfied,  or (b) notify Buyer in writing that  Mechanical
               Completion has not been achieved,


                                       16
<PAGE>


               CONFIDENTIAL  MATERIAL  OMITTED  AND  FILED  SEPARATELY  WITH THE
               SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

               stating the reasons therefor. In the event that Seller determines
               that  Mechanical  Completion has not been  achieved,  Buyer shall
               promptly take such reasonable actions,  including the performance
               of  additional  work as will achieve  Mechanical  Completion  and
               shall issue to Seller  another  Notice of  Mechanical  Completion
               pursuant to Section 16.1 hereof. Such procedure shall be repeated
               as necessary until Mechanical  Completion has been achieved.  For
               all  purposes  of this  Agreement,  the  date of  achievement  of
               Mechanical  Completion shall be the date on which Seller receives
               a Notice of Mechanical  Completion relating thereto, with respect
               to  which  Seller   ultimately   acknowledges   that   Mechanical
               Completion has been achieved.

     16.1.4    Substantial Completion

               Substantial  Completion  shall  mean  that  each  of the  Turbine
               Generator  Units  has  achieved   Minimum   Performance  and  has
               successfully   achieved  the  Reliability   Guarantee  (with  the
               exception of curing the Punch List and delivery of Final Drawings
               and Documentation).

     16.1.5    Delay in Achievement of Substantial Completion:

               If, as a result of Seller's sole fault or negligence, Substantial
               Completion  for any Turbine  generator Unit has not been achieved
               within ninety (90) days of achievement of Mechanical  Completion,
               and  Buyer has  provided  to  Seller  60 days,  during  which the
               balance of plant and auxiliaries are functional and operating for
               the  purpose of  Seller's  correction  and or  adjustment  of the
               deficientTurbine  Generator  Unit  to  meet  Minimum  Performance
               ("Substantial  Completion Cure Period"),  Seller hereby agrees to
               pay to Buyer  **********per  day for each Turbine  Generator Unit
               which  fails to  achieve  Substantial  Completion  as  liquidated
               damages, and not as a penalty ("Late Substantial Completion Delay
               Payments") for each day beyond the  Substantial  Completion  Cure
               Period  to the date  Substantial  Completion  occurs.  Buyer  and
               Seller hereby  acknowledge  and agree that the terms,  conditions
               and amounts fixed  pursuant to the payment of liquidated  damages
               provided herein are reasonable and will not constitute a penalty,
               considering  the delay and the actual costs that Buyer will incur
               due to any Turbine Generator Unit failing to achieve  Substantial
               Completion  within the Substantial  Completion Cure Period due to
               the sole fault or negligence of Seller.  The amount of liquidated
               damages  is  agreed  upon  and  fixed  hereunder  because  of the
               difficulty of ascertaining the exact amount of damages that would
               actually be incurred by Buyer if  Substantial  Completion  is not
               achieved during the Substantial Completion Cure Period, and Buyer
               and Seller agree that the  liquidated  damages  specified  herein
               shall be  applicable  regardless  of the  amount of such  damages
               actually  incurred by Buyer.  Late  Substantial  Completion Delay
               Payments  shall be  Seller's  sole and  exclusive  liability  for
               delays in not achieving  Substantial  Completion  within the time
               period stated in this Section  16.1.5.


                                       17
<PAGE>


               Sellers total liquidated  damages for delays under this paragraph
               16.1.5 and the following paragraph 17.2, in aggregate,  shall not
               exceed 15 % of the Contract Price.

     16.1.6    Notice of Substantial Completion

               When Seller believes that any Turbine Generator Unit has achieved
               Substantial  Completion,  it  shall  deliver  to  Buyer a  notice
               thereof (the "Notice of Substantial Completion").

     16.1.7    Achievement of Substantial Completion

               Within ten (10) Business Days following  receipt of the Notice of
               Substantial  Completion  (including  all the results of testing),
               (a) Buyer shall acknowledge that Substantial  Completion has been
               achieved,  if the requirements of Section 16.1.4 hereof have been
               satisfied, or (b) if Buyer determines that Substantial completion
               has not been achieved,  Buyer shall notify Seller in writing that
               Substantial Completion has not been achieved, stating the reasons
               therefor.   In  such  event,  Seller  shall  promptly  take  such
               reasonable actions,  including the performance of additional Work
               as will achieve Substantial  Completion.  Such procedure shall be
               repeated  as  necessary  until  Substantial  Completion  has been
               achieved.  For  all  purposes  of  this  Agreement,  the  date of
               achievement of Substantial  Completion shall be the date on which
               Buyer  receives  a  Notice  of  Substantial  Completion  relating
               thereto, with respect to which Buyer ultimately acknowledges that
               Substantial  Completion  has been  achieved.  In the event  Buyer
               fails to  acknowledge,  within  twenty (20)  Business  Days after
               Buyer's  receipt  of a Notice  of  Substantial  Completion,  that
               Substantial  Completion  has  been  achieved,  or  has  not  been
               achieved,  as the case  may be,  Substantial  Completion  will be
               deemed to have been  achieved  on the date  upon  which  Seller's
               Notice of Substantial Completion was received by Buyer.


   SECTION 17: GUARANTEED SHIPMENT DATE; LIQUIDATED DAMAGES FOR LATE SHIPMENT

17.1     Seller shall ship the Turbine  Generator Units and all major components
         of the Turbine Generator Units (gas turbine,  generator,  and accessory
         base module) no later than August 31,  2002,  for the first two Turbine
         Generator  Units and  September  30,  2002 for the second  two  Turbine
         Generator Units (the  "Guaranteed  Shipment  Dates").  In the event the
         Turbine  Generator Units are manufactured  outside the United States of
         America the  Guaranteed  Shipment  dates shall be the dates the Turbine
         Generator Unit are transported to the United States of America, cleared
         for import  into the United  States of America by customs and ready for
         inland transportation.

17.2     If the actual shipment dates are delayed beyond the Guaranteed Shipment
         Dates due to causes  other  than  delays  caused by the Buyer or due to
         events of Force Majeure,  Seller shall pay Buyer as liquidated  damages
         per Turbine  Generator  Unit and not as a penalty,  a sum in accordance
         with the following schedule:

                  Days after the Guaranteed Shipment date:


                                       18
<PAGE>


CONFIDENTIAL  MATERIAL  OMITTED AND FILED  SEPARATELY  WITH THE  SECURITIES  AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

     Days 1 through 14 *********day for each delayed Turbine Generator Unit

     Days 15 through 21 ********day for each delayed Turbine Generator Unit

     Days 22 through 28 ********day for each delayed Turbine Generator Unit

     Days 29 through 35 ********day for each delayed Turbine Generator Unit

     Each day after day 36 ********day for each delayed Turbine Generator Unit

               Hereafter, "Late Guaranteed Shipment Delay Payments".

               Late  Guaranteed   Shipment  Delay  Payments  shall  apply  until
               shipment  of the delayed  Turbine  Generator  Unit is made.  Late
               Guaranteed  Shipment  Delay  Payments  shall be Seller's sole and
               exclusive  liability  for  delays  in not  shipping  the  Turbine
               Generator  Units by the  Guaranteed  Shipment  Dates.  Buyer  and
               Seller hereby  acknowledge  and agree that the terms,  conditions
               and amounts fixed  pursuant to the payment of liquidated  damages
               provided herein are reasonable and will not constitute a penalty,
               considering  the delay and the actual costs that Buyer will incur
               due to Seller's  failure to ship the Turbine  Generator  Units by
               the Guaranteed  Shipment Dates. The amount of liquidated  damages
               is agreed upon and fixed  hereunder  because of the difficulty of
               ascertaining  the exact amount of damages that would  actually be
               incurred  by Buyer due to  Seller's  failure to ship the  Turbine
               Generator Units by the Guaranteed  Shipment Dates,  and Buyer and
               Seller agree that the liquidated  damages  specified herein shall
               be applicable  regardless of the amount of such damages  actually
               incurred by Buyer.  Sellers total  liquidated  damages for delays
               under this paragraph 17.2 and the preceding  paragraph 16.1.5, in
               aggregate, shall not exceed ****of the Contract Price.


                               SECTION 18: PERFORMANCE TESTS

18.1     When the Turbine  Generator Units have achieved  Mechanical  Completion
         and are capable of safe operation in accordance  with  Applicable  Laws
         and Permits,  the Operating  Manual and Applicable Codes and Standards,
         Buyer shall perform the Performance  Tests on each  individual  Turbine
         Generator  Unit,  as  specified  in the  Approved  Test  Procedures  in
         Appendix G. Buyer shall  provide to Seller at least ten (10) days prior
         written  notice of the date on which Buyer  intends to commence each of
         the Performance Tests.

18.2     Buyer shall have the right to suspend or delay any Performance  Test if
         performance  of such test would not be in  compliance  with  Applicable
         Laws and Permits, the Operating Manual, Applicable Codes and Standards.

18.3     All Performance  Tests on each individual  Turbine Generator Unit shall
         be conducted and results  calculated  in accordance  with Approved Test
         Procedures  for the  Performance  Tests,  including any  adjustments to
         reflect deviations from Guarantee  Conditions,  to be calculated as set
         forth in the Approved  Test  Procedures  and  verified by Parties.  The
         Performance  Tests shall be based on the American Society of Mechanical
         Engineer's  Power Test Code 22, 1997,  as amended by mutual  consent of
         the Parties. Seller's degradation curve attached hereto and made

                                       19
<PAGE>


         a part hereof within  Appendix A shall apply if the  Performance  Tests
         are  conducted or completed  after 100 hours of fired  operation of any
         individual  Turbine  Generator  Unit.  Notwithstanding  GEK-28106A  VI.
         Evaluation, located in Appendix A, Tab17, the performance tolerances of
         a single  unit  station  instrumentation  test for  measurement  of the
         Performance Guarantees shall be in general accordance with the American
         Society of Mechanical  Engineer's  Power Test Code 22, 1997, as amended
         by mutual consent of the Parties.

18.4     Seller  may  designate  and make  available  qualified  and  authorized
         representatives  to observe the Performance Tests to monitor the taking
         of   measurements   to  determine  the  level  of  achievement  of  the
         Performance  Guarantees.  Buyer  shall  keep  Seller's  representatives
         continuously  apprised  of  the  specific  schedule,  and  any  changes
         thereto,  for  the  commencement,  and  any  re-performances,   of  the
         Performance  Tests.  Buyer shall provide to Seller a written  report of
         the results of each Performance Test that is conducted.

18.5     If testing  demonstrates  that any individual  Turbine Generator Unit's
         corrected  performance levels (adjusted for actual operating conditions
         in accordance  with 19.1 and calculated  measurement  uncertainties  in
         accordance with 18.3) do not achieve the Performance Guarantees, Seller
         shall  submit  to  Buyer a  written  plan to  achieve  the  Performance
         Guarantees pursuant to Section 23.

                             SECTION 19: PERFORMANCE GUARANTEES

Subject to the provisions of this Agreement,  Seller guarantees that the Turbine
Generator Units will achieve all of the  Performance  Guarantees in this Section
(the "Performance Guarantees") during one or more Performance Tests.


Performance Guarantees

--------------------------- ---------------------------------------------------
   Guaranteed Heat Rate                     9420 BTU/kWh (LHV)
                                       at Guarantee Conditions****

--------------------------- ---------------------------------------------------
--------------------------- ---------------------------------------------------
 Turbine Generator Units          162,300 kW at Guarantee Conditions****
    Electrical Output
        Guarantee*
--------------------------- ---------------------------------------------------
--------------------------- ---------------------------------------------------
        Emissions           NOx    9 ppmvd  @ 15% O2
        Guarantee
                            CO      9 ppmvd

                            UHC    7 ppmvw

                            PM- dry filterable (Front Half) 9 lb./hr**
                            Condensables (Back Half) 0.0 lb./hr***

                            VOC     1.4 lb./hr
--------------------------- ---------------------------------------------------

         *As measured at the generator terminals

         ** Front Half particulates as measured by US EPA Method 5


                                       20
<PAGE>


         *** Condensable (Back Half) particulates as measured by US EPA Method 8
         (Sulfur Acid Mist) excluded ammonia salts.

          ****"Guarantee  Conditions"  means  evaporative  coolers off,  ambient
          temperature corrected to 59 degrees Fahrenheit,  14.19 psig barometric
          pressure,  relative  humidity of 60%,  elevation  at 1105 feet,  inlet
          losses equal to 4 inches  water and exhaust  losses equal to 17 inches
          water,  generator  power  factor  at .8  lagging,  generator  cold gas
          temperature  of 40 degrees C and generator H2 pressure of 30 psig with
          fuel characteristics as follows:

         Natural Gas Fuel: 21,490 Btu/lb. LHV @ 365 degrees F

         NOx emissions are corrected to 15% O2 without heat rate  correction and
         are not  corrected to ISO reference  condition per 40CFR  60.335(c)(1).
         NOx  levels  shown  will  be  controlled   by  algorithms   within  the
         SPEEDTRONIC control system.


19.2     Heat Rate Guarantee

         Seller  guarantees  to Buyer,  that during a  continuous  four (4) hour
         Performance  Test for the Operating  Criteria,  conducted in accordance
         with the Approved Test  Procedure,  each individual  Turbine  Generator
         Unit's heat rate will not exceed the Guaranteed Heat Rates specified in
         Section 19.1,  plus the allowance  for test  uncertainty  in accordance
         with Section 18.3 herein.  Each thirty (30) minute interval within each
         four (4) hour test period will be treated as an individual  test point.
         The Turbine  Generator  Unit's heat rate will be the average  corrected
         results from the eight (8) test points.



19.3     Turbine Generator Units Electrical Output Guarantee

         Seller  guarantees  to Buyer  that  during a  continuous  four (4) hour
         Performance  Test  for  each  the  Operating  Criteria,   conducted  in
         accordance  with the Approved Test Procedure,  each individual  Turbine
         Generator  Unit's  electrical  output will not be less than the Turbine
         Generator Unit's Electrical Output Guarantee specified in Section 19.1,
         less the allowance for test uncertainty in accordance with Section 18.3
         herein. Each thirty (30) minute interval within each four (4) hour test
         period  will be  treated  as an  individual  test  point.  The  Turbine
         Generator  Unit's  electrical  output  will  be the  average  corrected
         results from the eight (8) test points.

19.4     Emissions Guarantee

     19.4.1    Subject to the provisions of this Agreement, Seller guarantees to
               Buyer that, for the Operating  Criteria,  during each of the six,
               one hour Emission Tests,  during an eight hour period  throughout
               which each  individual  Turbine  Generator Unit is operating at a
               net power output level within the range of fifty  percent and one
               hundred percent of the Turbine Generator Unit's Electrical Output
               Guarantee,  and in accordance  with the Approved Test  Procedures
               and Section 19.4.2 below,  each Turbine  Generator Unit will meet
               the Emissions  Guarantee  during each test period as specified in
               Section 19.1 for the Operating Criterion.

     19.4.2    Methods of Testing


                                       21
<PAGE>


               Methods for  emission  testing  will  follow the test  procedures
               defined in "US  Standard  Field  Testing  Procedure  for Emission
               Compliance",  GEK-28172F,  located in Appendix A, Tab 17, subject
               to the  acceptance of the  California  Energy  Commission and the
               California Air Resources Board-South Coast Air Quality Management
               District or their successors and assigns.

               a.   NOx:   utilizing   plant   certified   continuous   emission
                    monitoring system, EPA Method 7E and 20

               b.   CO: EPA Method 10

               c.   PM: Front Half EPA Method 5, Back Half EPA Method 8

               d.   VOC: EPA Method 18, 25 and/or 25A

19.5     Reliability Guarantee

         Seller guarantees to Buyer that each individual  Turbine Generator Unit
         will,  during a single  continuous 5-day Reliability Test in accordance
         with the Approved Test Procedures:

         a.       each  individual   Turbine  Generator  Unit  while  combusting
                  Natural Gas Fuel operating at various loads,  will ramp up and
                  ramp down and will continue to operate and will not trip;

         b.       Should the  Reliability  Test be  interrupted  for reasons not
                  solely   attributable  to  the  Turbine  Generator  Unit,  the
                  Reliability   Test  will   re-commence  at  the  hour  of  the
                  interruption.

                     SECTION 20: ACHIEVEMENT OF PERFORMANCE GUARANTEES

20.1     When Buyer  believes that any  individual  Turbine  Generator  Unit has
         achieved  successful  completion  of a Performance  Test  providing the
         basis for achieving the Heat Rate  Guarantee,  Turbine  Generator  Unit
         Electrical   Output  Guarantee,   Emission   Guarantee  or  Reliability
         Guarantee,  it shall deliver to Seller a notice thereof (the "Notice of
         Performance Test Success").

         In the event  that Buyer  determines  that for any  individual  Turbine
         Generator Unit the Heat Rate Guarantee,  Electrical  Output  Guarantee,
         Emission  Guarantee or  Reliability  Guarantee  have not been achieved,
         Buyer shall give Seller written notice of such determination and Seller
         shall promptly take such reasonable actions,  including the performance
         of additional work and the completion of additional  Performance  Tests
         (all fuel and operational personnel needed for any and all retesting to
         be supplied  by Buyer),  as may be  necessary  to achieve the Heat Rate
         Guarantee, Turbine Generator Unit Electrical Output Guarantee, Emission
         Guarantee or Reliability Guarantee for such deficient Turbine Generator
         Unit, as the case may be. Such procedure shall be repeated as necessary
         until the Heat Rate Guarantee, Turbine Generator Unit Electrical Output
         Guarantee,  Emission  Guarantee  and  Reliability  Guarantee  for  such
         deficient Turbine generator Unit has been achieved. If Buyer determines
         that the  Performance  Guarantees  have been  satisfied  it shall  give
         written  notice to Seller.  In the event Buyer  fails  either to notify
         Seller within  thirty (30) Business Days that the Heat Rate  Guarantee,
         Turbine

                                       22
<PAGE>


         Generator  Unit  Electrical  Output  Guarantee,  Emission  Guarantee or
         Reliability  Guarantee,  as the case may be, or to notify  Seller  that
         such  Performance  Guarantee  has not  been  achieved,  the  Heat  Rate
         Guarantee, Turbine Generator Unit Electrical Output Guarantee, Emission
         Guarantee or Reliability Guarantee,  as the case may be, will be deemed
         to have been achieved as of the date of  completion of the  Performance
         Test.

20.2     The Heat Rate  Guarantee,  Turbine  Generator  Unit  Electrical  Output
         Guarantee  and Emission  Guarantee,  shall be  considered  to have been
         achieved if Seller meets the  requirements  of Sections 19.2,  19.3 and
         19.4 respectively,  or Seller has achieved Minimum  Performance and has
         paid Liquidated Damages in accordance with Section 23 hereof.


                                   SECTION 21: ACCEPTANCE

21.1     Acceptance  shall have occurred if the following  conditions  have been
         met:

         (a)      Seller  has  performed  all  of  the  Work  required  by  this
                  Agreement in accordance with the Scope of Work,  including any
                  items listed on the Punch List; and

         (b)      All portions of all of the Turbine Generator Units are capable
                  of  being  used in  accordance  with all  Applicable  Laws and
                  Permits,   Good  Electric  Power  Producing   Practices,   the
                  Operating  Manual,  Applicable  Codes and  Standards  and, the
                  Agreement, and are free from Defects and Deficiencies and that
                  all systems are  functioning as designed  without  contacts or
                  software inhibited or with jumpers in place; and

         (c)      All quality assurance documentation has been provided to Buyer
                  in accordance with the Seller's Quality  Assurance Program and
                  Seller  has  otherwise  complied  with its  Quality  Assurance
                  Program; and

         (d)      Seller has conducted  and  completed  the  Personnel  Training
                  Program and has delivered the Operating Manual; and

         (e)      Substantial  Completion  with  respect  to  all  four  Turbine
                  generator Units has occurred; and

         (f)      Seller has delivered to Buyer its written  certification  that
                  the conditions for Acceptance set forth in clauses (a) through
                  (e) of this Section have been satisfied.

21.2     When Seller  believes it has achieved  Acceptance,  it shall deliver to
         Buyer a notice  thereof  (the  "Notice of  Acceptance").  Buyer  shall,
         within  ten (10)  Business  Days  following  receipt  of the  Notice of
         Acceptance,  (a)  inspect  the  Turbine  Generator  Units  and all Work
         hereunder  and  acknowledge  that  Acceptance  has been achieved or (b)
         notify Seller in writing that Acceptance has not been achieved, stating
         the reasons therefor. In the event Buyer determines that Acceptance has
         not been achieved,  Seller shall promptly take such reasonable actions,
         including the performance of additional Work as required herein and the
         completion of additional Performance Tests, as will achieve Acceptance,
         and shall issue to Buyer another Notice of  Acceptance.  Such procedure
         shall be repeated as necessary until  Acceptance has been achieved.  In
         the event Buyer fails to acknowledge, within


                                       23
<PAGE>

CONFIDENTIAL  MATERIAL  OMITTED AND FILED  SEPARATELY  WITH THE  SECURITIES  AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

         twenty  (20)  Business  Days  after  Buyer's  receipt  of a  Notice  of
         Acceptance,  that  Acceptance  has  been  achieved,  or  has  not  been
         achieved,  as the case may be,  Acceptance  will be deemed to have been
         achieved  on the date upon  which  Seller's  Notice of  Acceptance  was
         received by Buyer.

                           SECTION 22: (INTENTIONALLY LEFT BLANK)

                  SECTION 23: PERFORMANCE GUARANTEE PAYMENTS AND REMEDIES

23.1     In the event that  Substantial  Completion  has been  achieved  but the
         Turbine  Generator  Unit Heat  Rate  Guarantee  has not been  achieved,
         Seller  shall  be  afforded  a 180  days  cure  period,  commencing  at
         Substantial  Completion,  during which time Seller shall use reasonable
         efforts to cure such  shortfall.  In the event that Seller is unable to
         cure such  shortfall in  performance  within said cure  period,  Seller
         agrees to pay to Buyer as  liquidated  damages and not as a penalty for
         the amount that the aggregate  heat rates of all the Seller's  supplied
         Turbine  Generator  Units for the Project (sum of heat  rates/number of
         Units  delivered  to the Project)  fails to meet the Turbine  Generator
         Unit Heat Rate Guarantee,  an amount equal to ********for every Btu/kWh
         (lower  heating value) by which average heat rate exceeds the Heat Rate
         Guarantee based on the average heat rates recorded during the heat rate
         performance  test, up to a maximum  liquidated  damages amount equal to
         *******of the Contract Price.

23.2     In the event that  Substantial  Completion  has been  achieved  but the
         Turbine  Generator  Electrical  Output Guarantee has not been achieved,
         Seller  shall  be  afforded  a 180  days  cure  period,  commencing  at
         Substantial  Completion,  during which time Seller shall use reasonable
         efforts to cure such  shortfall.  In the event that Seller is unable to
         cure such  shortfall in  performance  within said cure  period,  Seller
         agrees to pay to Buyer, as liquidated  damages and not as a penalty for
         the amount that the  aggregate  electrical  output of all the  Seller's
         supplied  Turbine  Generator  Units for the Project (sum of  electrical
         outputs/number  of Units  delivered to the  Project)  fails to meet the
         Turbine Generator Unit Electrical Output Guarantee,  an amount equal to
         $600 for  every kW of  electrical  energy by which  the  aggregate  net
         electrical  output of the Turbine  Generator  Units (in kW) falls below
         the Turbine  Generator Unit  Electrical  Output  Guarantee based on the
         average kW output of the Turbine  Generator  Units recorded  during the
         Electrical Output  Performance Test, up to a maximum liquidated damages
         amount equal to twenty percent (20%) of the Contract Price..


23.3     If due to the  sole  fault  of  Seller  Substantial  Completion  is not
         achieved  within 180 days after  Mechanical  Completion (or such longer
         period as may be mutually agreed between the Parties),  Seller shall be
         in default of this Agreement and Buyer may avail itself of all remedies
         pursuant to Section 31 hereof.

23.4     The Performance  Guarantee Payments specified in Sections 23.1 and 23.2
         above, shall be calculated individually for each Turbine Generator Unit
         for failure to achieve any Performance Guarantee and, shall be Seller's
         sole and exclusive

                                       24
<PAGE>


         liability for failure to achieve any Performance  Guarantee,  except as
         provided in 16.1.5.

23.5     Notwithstanding anything else to the contrary in this Agreement, Seller
         shall not be  subject  to  Performance  Guarantee  damages  under  this
         Agreement  to  the  extent  that  the   engineering,   procurement  and
         construction  contractor for the Project, (the "EPC Contractor") is not
         liable to the Buyer for  performance  guarantee  payments under the EPC
         Contractor's agreement with Buyer.

23.6     Buyer  and  Seller  hereby   acknowledge  and  agree  that  the  terms,
         conditions and amounts fixed pursuant to the payment of the Performance
         Guarantee  Payments  liquidated  damages provided herein are reasonable
         and will not constitute a penalty, considering the delay and the actual
         costs that Buyer will incur due to the Turbine  Generator Units failure
         to achieve the Performance Guarantees. The amount of liquidated damages
         is  agreed  upon and  fixed  hereunder  because  of the  difficulty  of
         ascertaining  the exact  amount  of  damages  that  would  actually  be
         incurred  by Buyer if the Turbine  Generator  Units fail to achieve the
         Performance Guarantees,  and Buyer and Seller agree that the liquidated
         damages  specified herein shall be applicable  regardless of the amount
         of such  damages  actually  incurred by Buyer.  Payment of  Performance
         Guarantee  Payments  shall be Seller's sole and exclusive  liability if
         the Turbine Generator Units fail to achieve the Performance Guarantees.


                                   SECTION 24: WARRANTIES

24.1     Seller  warrants  to  Buyer  that  (i) the  equipment  to be  delivered
         hereunder  shall be  designed  and fit for the  purpose  of  generating
         electric  power when  operated in accordance  with  Seller's  operation
         instructions and, in the absence thereof,  in accordance with generally
         accepted  operation  practices of the electric power producing industry
         and shall be free from defects in material,  workmanship and title; and
         (ii) Technical  Advisory Services (as specified in Appendix K) shall be
         performed  in a  competent,  diligent  manner  in  accordance  with any
         mutually agreed specifications. The warranties and related remedies for
         Personal Training Program as specified in Appendix B, if provided,  are
         exclusively set forth elsewhere in this Agreement. Seller shall warrant
         the foregoing for the earlier of: (i) one year following achievement of
         Minimum  Performance,  or (ii) two years  following  the  completion of
         shipment of the  Turbine  Generator  Units  (hereafter,  the  "Warranty
         Period").

24.2     The foregoing warranties (except as to title) for each Unit shall apply
         to defects which appear during the Warranty Period.

24.3     If the equipment  delivered or Technical  Advisory  Services  performed
         hereunder do not meet the above warranties  during the Warranty Period,
         Buyer shall  promptly  notify  Seller in writing and make the equipment
         available  promptly for correction.  Seller shall thereupon correct any
         defect by, at its option,  (i)  reperforming  the  defective  Technical
         Advisory  Services,  (ii)  repairing or replacing the defective part or
         equipment, as may be applicable (freight and insurance paid by Seller).
         Seller shall provide all reasonably necessary labor, tools and services
         for  any  such  repair  of  the  equipment,  but  Seller  shall  not be
         responsible  for removal or replacement of structures or other parts of
         the facility.  If a defect in the  equipment or part thereof  cannot be
         corrected by Seller's reasonable efforts,  the Parties will negotiate a
         mutually agreeable equitable  adjustment in Contract Price with respect
         to such


                                       25
<PAGE>


         equipment or part thereof. The condition of any tests shall be mutually
         agreed upon and Seller shall be notified of and may be represented  at,
         all tests that may be made.

24.4     Any reperformed service or repaired or replacement part furnished under
         this  warranty  shall carry  warranties  on the same terms as set forth
         above,  except that the  warranty  period  shall be for a period of one
         year from the date of such reperformance, repair or replacement. In any
         event the  warranty  period  and  Seller's  responsibilities  set forth
         herein for such repaired or replacement  part shall  terminate one year
         after  the  end  of  the  Warranty  Period  ("the  Rewarranty  Period")
         applicable  to  the  item  of  equipment  in  which  such  repaired  or
         replacement   part  was   installed   or  in  which  such  Service  was
         reperformed.

24.5     Seller does not warrant the Turbine  Generator Units or any repaired or
         replacement  parts against  normal wear and tear,  including  operation
         beyond design  capability,  frequent  starting,  detrimental  air inlet
         conditions or erosion,  corrosion or material  deposit from fluids (all
         as indicated in Seller's  technical  publication GEK 3620F,  Heavy Duty
         Gas  Operating  and  Maintenance   Considerations)   and  fuel  not  in
         accordance  with the fuel  specification  (attached as Appendix L). The
         warranties and remedies set forth herein are further  conditioned  upon
         (i) the proper storage, installation, operation, and maintenance of the
         Turbine  Generator  Units and  conformance  with the  Operation  Manual
         (including   revisions   thereto)   provided   by  Seller   and/or  its
         subcontractors,  as applicable and (ii) repair of modification pursuant
         to Seller's  instructions or approval.  Buyer shall keep proper records
         of operation and maintenance during the Warranty Period.  These records
         shall be kept in the form of log sheets and copies  shall be  submitted
         to Seller upon its  request.  Seller does not warrant any  equipment or
         services of others designated by Buyer where such equipment or services
         are not supplied by Seller.

24.6     Except as otherwise  specifically  provided for in this  Agreement  the
         preceding  paragraphs  of  this  Article  24 set  forth  the  exclusive
         remedies for all breach of Warranty, however instituted,  whether based
         on contract, indemnity,  warranty, tort (including negligence),  strict
         liability or otherwise.  The foregoing warranties are exclusive and are
         in lieu of all other warranties and guarantees  whether written,  oral,
         implied or statutory.  NO IMPLIED STATUTORY WARRANTY OF MERCHANTABILITY
         OR IMPLIED STATUTORY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE SHALL
         APPLY.

                              SECTION 25: FORCE MAJEURE EVENT

25.1     A "Force  Majeure  Event"  means  any  act,  condition,  or event  that
         prevents either Party to this Agreement from performing its obligations
         under this Agreement,  and such act, condition, or event could not have
         been prevented by the exercise of due diligence of the Party  asserting
         the claim,  was beyond the  reasonable  control of the Party or was not
         reasonably  foreseeable and occurred without the fault or negligence of
         the Party  asserting  the  claim.  Seller  or Buyer  shall not have any
         liability  or  be  considered  to  be  in  breach  or  default  of  its
         obligations  under this Contract  (other than Buyer for payment) to the
         extent that  performance  of such  obligations is delayed or prevented,
         directly  or  indirectly,  due to:  (i) causes  beyond  its  reasonable
         control;  or (ii) acts of God, act (or failures to act) of governmental
         authorities, fires, severe weather conditions,  earthquakes, strikes or
         other  labor  disturbances,   floods,  war  (declared  or  undeclared),
         epidemics,  civil  unrest,  riot,  delays  in  transportation,  or  car
         shortages;  or (iii) acts (or omissions) of Buyer including  failure to
         promptly:  (a) provide Seller with information and approvals  necessary
         to permit Seller to proceed with work immediately and without


                                       26
<PAGE>


         interruption,  (b) comply  with the terms of  payment,  or (c)  provide
         Seller  with such  evidence  as Seller may  request  that any export or
         import license or permit has been issued (if such is the responsibility
         of Buyer),  or (iv)  shipment to storage or (v) inability on account of
         causes  beyond the  reasonable  control  of Seller to obtain  necessary
         materials,  necessary components or services. Seller shall notify Buyer
         of any such  delay.  The date of delivery  or of  performance  shall be
         extended for a period  equal to the time lost by reason of delay,  plus
         such  additional  time as may be  reasonably  necessary to overcome the
         effect of such excusable  delay.  Seller shall notify Buyer, as soon as
         practicable,  of the revised Shipment Date and Service resumption date.
         If  Seller  is  delayed  by  acts  or  omissions  of  Buyer,  or by the
         prerequisite  work of Buyer's other  contractors  or suppliers,  Seller
         shall also be entitled to an equitable price adjustment.

         If a delay excused by Force Majeure under this Article extends for more
         than  three  hundred  sixty-five  (365) days and the  parties  have not
         agreed upon a revised basis for  continuing  the Work at the end of the
         delay,  including  adjustment  of the price,  then either party (except
         where  delay is caused by Buyer,  in which  event  only  Seller),  upon
         thirty (30) days written  notice,  may terminate  this  Agreement  with
         respect to the undelivered  Turbine  Generator Units to which title has
         not yet passed and any  uncompleted  services,  whereupon  Buyer  shall
         promptly pay Seller its  termination  charges  determined in accordance
         Appendix D upon submission of Seller's invoices therefor.

25.2     In the event of a Force Majeure occurrence:

         (a)  the  affected  Party shall  promptly  give the other Party  notice
              describing  the  particulars  of  the  occurrence,   including  an
              estimation  of its expected  duration  and probable  impact on the
              performance of such party's obligations  hereunder,  and continues
              to furnish timely regular  reports with respect thereto during the
              continuation of the Force Majeure Event;

         (b)  the  notice  described  in clause (a) above is given no later than
              five (5) Business  Days after the affected  party becomes aware or
              should, with due diligence,  have become aware of the commencement
              of any such delay due to the claimed Force Majeure Event;

         (c)  the extension of time of performance  shall be of no greater scope
              and of no longer duration than is reasonably required by the Force
              Majeure Event.

         (d)  no liability of either Party which arose before the  occurrence of
              the Force  Majeure Event  causing the  suspension  of  performance
              shall be excused as a result of the occurrence;

         (e)  the affected Party exercises all reasonable efforts to mitigate or
              limit damages to the other party and to resume its  performance as
              quickly as possible;

         (f)  the affected Party shall use all reasonable efforts to continue to
              perform its obligations hereunder and to correct or cure the event
              or condition excusing performance; and

         (g)  when the  affected  Party  is able to  resume  performance  of the
              affected  obligations  under the Agreement,  that Party shall give
              the other party  written  notice to that  effect,  a Change  Order
              shall be  executed  by Buyer and Seller to adjust  the  Guaranteed
              Shipment  Date to account  for the actual  effect on the


                                       27
<PAGE>

              affected  party's  performance  of its  obligations  by the  Force
              Majeure  Event,  and the  affected  Party  shall  promptly  resume
              performance under the Agreement Documents

25.3     If  Seller  is  delayed  by  acts  or  omissions  of  Buyer,  or by the
         prerequisite work of Buyer's other subcontractors or suppliers,  Seller
         shall be entitled to seek an equitable  price  adjustment in accordance
         with Section 9 herein.


                                  SECTION 26: INDEMNITIES

26.1     Seller Indemnities:

         Seller shall indemnify,  protect, save, hold harmless and defend Buyer,
         the  Financing  Parties,  each of  their  respective  subsidiaries  and
         affiliates, and their directors, officers, agents, partners, employees,
         and Buyer's subcontractors, successors and assigns of each of them (the
         "Buyer  Indemnified  Parties")  from and  against  any and all  Damages
         arising out of  third-party  claims for any damage to or destruction of
         third-party  property or death of or bodily  injury to, any person,  to
         the extent caused by Seller's or Seller's  Subcontractors'  wrongful or
         negligent acts or omissions, in the performance of Seller's obligations
         hereunder. Seller's aforesaid indemnity is for the exclusive benefit of
         the  Buyer  Indemnified  Parties  and in no  event  shall  inure to the
         benefit of any other party except for permitted assignees. "Third party
         property" shall not include property of the foregoing Buyer Indemnified
         Parties for purposes of this Section 26.1.

26.2     Buyer Indemnities:

         Buyer  shall  indemnify,  save  harmless  and  defend  Seller  and  its
         Subcontractors  and  their  affiliates  and  each of  their  directors,
         officers,  agents,  employees,  successors and assigns of each of them,
         (the  "Seller  Indemnified  Parties"),  from  and  against  any and all
         Damages  arising  out  of  third-party   claims   associated  with  the
         performance  by  Buyer  or Buyer  Indemnified  Parties  of its or their
         obligations  hereunder,  including without  limitation any damage to or
         destruction  of  property  of, or death of or  bodily  injury  to,  any
         person,  to the extent caused by Buyer's or Buyer  Indemnified  Party's
         wrongful or negligent acts or omissions,  in the performance of Buyer's
         or Buyer Indemnified Party's obligations  hereunder.  Buyer's aforesaid
         indemnity  is for  the  exclusive  benefit  of the  Seller  Indemnified
         Parties  and in no event  shall inure to the benefit of any other party
         except for permitted assignees.

26.3     Tax Indemnification:

         Seller shall indemnify,  save harmless and defend the Buyer Indemnified
         Parties  from  and  against  any  and all  Seller  Taxes.  Buyer  shall
         indemnify, save harmless and defend the Seller Indemnified Parties from
         and against any and all Buyer Taxes.

26.4     Patent Indemnification:

         Seller  agrees to indemnify and hold harmless and defend the Buyer from
         any claims,  suits or proceedings of any third party that any Equipment
         furnished   hereunder   infringes  any  patent  of  the  United  States
         ("Claim").  If Buyer  notifies  Seller  promptly  of the receipt of any
         Claim,  does not take any  position  adverse to Seller  regarding  such
         Claim and gives Seller information,  assistance and exclusive authority
         to settle and defend the Claim,  Seller  shall,  at its own expense and
         option,


                                       28
<PAGE>


CONFIDENTIAL  MATERIAL  OMITTED AND FILED  SEPARATELY  WITH THE  SECURITIES  AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

         either  (i) settle or defend  the Claim and pay all  damages  and costs
         awarded in it against  Buyer,  or (ii)  procure  for Buyer the right to
         continue using the Equipment,  or (iii) modify the Equipment so that it
         becomes   non-infringing,   or  (iv)   replace   the   Equipment   with
         non-infringing  Equipment.  If, in any suit  arising from such a Claim,
         the  continued  use  of the  Equipment  for  the  purpose  intended  is
         forbidden by any court of competent  jurisdiction,  Seller shall at its
         option take one or more of the actions under (ii), (iii) or (iv) above.
         The  foregoing  states  the  entire  liability  of  Seller  for  patent
         infringement of any Equipment.

         The foregoing shall not apply to any Equipment which is manufactured to
         Buyer's  design.  As to any Equipment or use described in the preceding
         sentence,   Seller   assumes  no   liability   whatsoever   for  patent
         infringement.

26.5     Notice and Legal Defenses:

         Promptly after receipt by Buyer Indemnified Party or Seller Indemnified
         Party  of any  claim  or  notice  of the  commencement  of any  action,
         administrative  or legal  proceeding,  or investigation as to which the
         indemnity  in  favor  of  the  Buyer  Indemnified   Parties  or  Seller
         Indemnified  Parties applies,  the Buyer Indemnified  Parties or Seller
         Indemnified  Parties,  as the case may be, shall notify the  indemnitor
         thereof in writing.  The indemnitor shall assume the defense thereof on
         behalf of the Buyer Indemnified Parties or Seller Indemnified  Parties,
         as the case may be, and conduct such defense with due  diligence and in
         good  faith  with  counsel   reasonably   satisfactory   to  the  Buyer
         Indemnified  Parties  or Seller  Indemnified  Parties,  as  applicable;
         provided,  however,  that (a) the Buyer  Indemnified  Parties or Seller
         Indemnified  Parties,  as the case may be,  shall  have the right to be
         represented therein by advisory counsel of its own selection and at its
         own expense.

26.6     Failure to Defend Action:

         If any claim,  action,  proceeding or investigation  arises as to which
         the  indemnity  in favor of the  Buyer  Indemnified  Parties  or Seller
         Indemnified  Parties  applies,  and the indemnitor  fails to assume the
         defense of such claim,  action,  proceeding or investigation,  then the
         Buyer Indemnified  Parties or Seller Indemnified  Parties,  as the case
         may be, may at Seller's or Buyer's expense, as applicable, contest (or,
         with the prior  written  consent  of Seller  or Buyer,  as  applicable,
         settle) such claim.

26.7     Survival:

         The  provisions  of this Section 26 shall  survive  Acceptance  and the
         termination of this Agreement.

                           SECTION 27: LIMITATIONS OF LIABILITIES

In no event shall the sum of Seller's  liability  to Buyer under this  Agreement
for all Delay Payments and all Performance Guarantee Payments (excluding failure
to achieve the Emission  Guarantee)  exceed an amount equal to ***********of the
Contract Price. In no event shall the sum of Seller's liability to Buyer for any
claim arising from this Agreement  whether based upon warranty,  tort (including
negligence), strict liability, for defaults pursuant to Section 31, or otherwise
arising  from  Seller's  performance  or  breach of this


                                       29
<PAGE>

CONFIDENTIAL  MATERIAL  OMITTED AND FILED  SEPARATELY  WITH THE  SECURITIES  AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

Agreement  exceed  *********of  the Contract  Price.  All liability  under this
Contract  shall  terminate  four years  after the  Shipment  Date of the Turbine
Generator Unit giving rise to the claim, except for any liabilities or claims of
which Buyer has notified Seller within such four year period.

                             SECTION 28: CONSEQUENTIAL DAMAGES

28.1     It is  understood  and agreed by the Parties  that  liquidated  damages
         which may be payable  by  Seller,  if  applicable,  under the  specific
         liquidated damages provisions  elsewhere in this Agreement shall not be
         considered  consequential  damages for purposes of this Section; and it
         is further understood and agreed that, in no event, whether as a result
         of  breach  of   contract,   warranty,   indemnity,   tort   (including
         negligence),  strict  liability,  or  otherwise,  shall  Seller  or its
         subcontractors  or  suppliers be liable for loss of profit or revenues,
         loss  of use of the  equipment  or any  associated  equipment,  cost of
         capital, cost of substitute equipment, (which does not include Seller's
         liability,  if any,  pursuant to Section  31.2(c)  hereof for equipment
         which  must  be  purchased  by  Buyer   following   Seller's   default)
         facilities,  services or replacement power,  downtime costs,  claims of
         Buyer's customers for such damages, or for any special,  consequential,
         incidental,  indirect or  exemplary  damages and Buyer shall  indemnify
         Seller against such claims of Buyer's customers.

28.2     If Buyer cannot obtain for Seller from the  subsequent  purchasers  the
         protections specified in this Article 28, Buyer shall indemnify, defend
         and hold  Seller  harmless  from and against any and all claims made by
         any subsequent  purchasers of the Turbine  Generator  Units or services
         against  Seller for loss or damage  arising out of the  performance  or
         non-performance  of the  Equipment  or  Services  provided  under  this
         Contract.

28.3     If Seller  furnishes  Buyer with advice or  assistance  concerning  any
         products,  systems or work which is not required  pursuant to the Scope
         of Work the  furnishing of such advice or  assistance  will not subject
         Seller to any liability, whether in contract, warranty, indemnity, tort
         (including negligence), strict liability or otherwise.

28.4     For the  purposes  of this  Article  28, the term  "Seller"  shall mean
         Seller,  its affiliates,  subcontractors and suppliers of any tier, and
         their  respective  agents  and  employees,   whether   individually  or
         collectively.

28.5     The provisions of this Article 28 shall prevail over any conflicting or
         inconsistent  provisions  contained in any of the documents  comprising
         this  Contract,  except  to the  extent  that such  provisions  further
         restrict Seller's liability.

                           SECTION 29: SELLER PROVIDED INSURANCE

29.1     From a period  commencing  15 months prior to the  Guaranteed  Shipment
         Date,  Seller shall provide and maintain the following  insurance  with
         the indicated limits,  with insurance  carriers rated not less than "A"
         by Best,  or equivalent  (with the


                                       30
<PAGE>

         exception of Worker's Compensation insurance), and in a form reasonably
         satisfactory  to Buyer and,  unless  indicated to the  contrary  below,
         shall   maintain  such   insurance  in  full  force  and  effect  until
         Acceptance;  provided, however, that Seller shall provide the liability
         insurance   coverage  required  under  this  Section  29  and  workers'
         compensation coverage for all periods during which Seller or any of its
         agents  or  employees  enters  onto the  Project  Site;  and  provided,
         further,   that  such   liability   insurance   coverage  and  workers'
         compensation  coverage  shall  continue in full force and effect during
         the  Warranty  Period.  Such  liability  insurance  shall  include  the
         contractual  liability assumed under the Section 26 (Indemnity  Clause)
         of this Agreement,  covering claims for bodily injury (including death)
         or third party property damage that may arise from operations performed
         under this  Agreement,  whether such  operations be by Seller or by any
         Subcontractor of any tier or their respective agents or employees:

            (i)   Workers'   compensation   insurance  in  compliance  with  any
                  applicable  federal law; with  statutory  limits in compliance
                  with the workers' compensation laws applicable in the state in
                  which the Work is being  performed.  Coverage  will  include a
                  Broad Form All States Endorsement.

            (ii)  Employers'  liability insurance with a limit of $5,000,000 per
                  accident and $5,000,000 annual aggregate,  $5,000,000  disease
                  per employee and $5,000,000 disease policy limit.

            (iii) Automobile liability insurance including,  but not limited to,
                  coverage  for owned,  non-owned  and  hired,  leased or rented
                  motor  vehicles,  licensed  or  unlicensed  with a  $5,000,000
                  combined single limit per accident.

            (iv)  Comprehensive  or  commercial   general  liability   insurance
                  written on an occurrence basis with a combined single limit of
                  liability for bodily injury,  including death, personal injury
                  and  property   damage  of  $5,000,000   per   occurrence  and
                  $10,000,000  in the  aggregate.  Such  coverage  shall include
                  premises/operations,   broad  form  property  damage,  blanket
                  contractual liability, independent Sellers, products/completed
                  operations liability, and personal injury.

            (v)   Excess  liability  insurance in connection with the employers'
                  liability coverage,  the automobile  liability  coverage,  the
                  comprehensive or commercial  general liability  coverage,  and
                  with a combined single limit of $10,000,000 per occurrence and
                  $10,000,000  annual aggregate.  Such insurance shall drop down
                  to provide primary coverage in the event the underlying policy
                  aggregate is exhausted by payment of claims.  Any  combination
                  of primary and excess  limits is  acceptable  to the extent it
                  complies with the total limits.

29.2     Certificates:  Seller shall furnish to Buyer  certificates of insurance
         required  hereunder in the applicable forms set forth hereto.  All such
         certificates  shall state that ninety (90) days' prior  written  notice
         shall be given to each  such  party  in the  event of  cancellation  or
         non-renewal of or material change in the relevant policy.

29.3     Waivers of  Subrogation:  All  insurance  policies  supplied  by Seller
         (except  those  relating  to  workers'  compensation  insurance)  shall
         include a waiver of any right of subrogation of the insurers thereunder
         against Buyer, the Financing Parties, and the Independent Engineer.


                                       31
<PAGE>


29.4     Failure to Procure  Insurance:  If Seller fails to procure and maintain
         the required  insurance,  or any portion thereof,  the Buyer shall have
         the right, but not the obligation, to procure and maintain the required
         insurance for and in the name of Seller,  and Seller shall promptly pay
         the cost thereof and shall furnish all information necessary to acquire
         and maintain such  insurance.  Neither party shall violate or knowingly
         permit  any  violation  of any  condition  or term of the  policies  of
         insurance carried hereunder.

29.5     Additional  Insureds,  etc.: All liability insurance policies furnished
         by Seller shall name Buyer as additional insureds.

29.6     No Limitation of Liability: The required coverage's referred to and set
         forth in this Section 29 shall in no way affect,  nor are they intended
         as a limitation of, Seller's  liability with respect to its performance
         of the Work.

29.7     Insurance  Primary:  All  policies  of  insurance  provided  by  Seller
         pursuant to this Section 29 shall be written as primary  policies,  not
         contributing  with, and not in excess of, the coverage that Buyer,  and
         the  Financing  Parties,   and  their  respective   permitted  assigns,
         successors,  parent  companies,  subsidiaries  and affiliates may carry
         against the same hazards.

                            SECTION 30: BUYER-PROVIDED INSURANCE

Buyer shall  provide and maintain the  following  insurance  with the  indicated
limits  and,  unless  indicated  to the  contrary  below,  shall  maintain  such
insurance  in full force and  effect  from six  months  prior to the  Guaranteed
Shipment Date until Acceptance:

             (i)  Workers' Compensation insurance written in compliance with any
                  applicable  federal law; with  statutory  limits in compliance
                  with  workers'  compensation  laws  applicable in the state in
                  which the Work is being performed. Coverage will include broad
                  form All States endorsement.

             (ii) Employers'  liability insurance with a limit of $1,000,000 per
                  accident and $1,000,000 annual aggregate,  $1,000,000  disease
                  per employee and $1,000,000 disease policy limit.

             (iii)Comprehensive  or  commercial   general  liability   insurance
                  written on an occurrence basis with a combined single limit of
                  liability for bodily injury,  including death, personal injury
                  and  property  damage  of  $1,000,000  per  occurrence.   Such
                  coverage   shall   include   premises/operations,   explosion,
                  blasting  (if  any),  excavation,   collapse  and  underground
                  hazards,  broad  form  property  damage,  blanket  contractual
                  liability, independent Sellers,  products/completed operations
                  liability,  and personal injury. If the policy is written on a
                  commercial  general  liability form, the general aggregate and
                  products/completed  operations aggregate shall be no less than
                  $1,000,000, respectively.

             (iv) Automobile liability insurance, including, but not limited to,
                  coverage  for all owned,  non-owned,  hired,  leased or rented
                  motor vehicles,  licensed or unlicensed.  Such insurance shall
                  provide  coverage  having a combined single limit per accident
                  of $1,000,000.

             (v)  Excess  liability  coverage in connection  with the employers'
                  liability coverage,  the automobile liability coverage and the
                  commercial general


                                       32
<PAGE>

                  liability coverage, with a combined single limit of $4,000,000
                  per occurrence and in the aggregate.

            (vi)  Builders risk insurance  policy covering the full value of the
                  Work.

                  Seller shall be added as an additional insured, with waiver of
                  subrogation,  as Seller's  interests may appear,  under all of
                  the above policies except workers compensation.


                                  SECTION 31: TERMINATION

31.1     Default by Seller

         Seller  shall be in default of this  Agreement  if: (i) Seller fails to
         perform any of its material  obligations  under this Agreement or fails
         to comply with the material terms of this Agreement,  unless the remedy
         for the breach of any such  obligation is payment of Delay  Payments or
         Performance Guarantee Payments, and Seller does not diligently commence
         to cure such default  within thirty (30) days after  written  Notice of
         Default from Buyer, and the default is not cured within 90 days, except
         for the cure  periods  in Section  23 or such  longer  period as may be
         determined by the Buyer, and; (ii) Seller  intentionally or negligently
         disregards  Applicable  Laws and Permits  which are  applicable  to the
         performance of Seller's Work and such failure continues for thirty (30)
         days after written Notice of Default from Buyer;  (iii) Seller abandons
         the Work or  suspends  its efforts to complete  the Work  (except  when
         permitted  pursuant to this  Agreement);  (iv)  Seller  makes a general
         assignment for the benefit of its creditors, is generally unable to pay
         its debts as they become  due, or becomes the subject of any  voluntary
         or involuntary bankruptcy, insolvency,  arrangement,  reorganization or
         other  debtor  relief  proceeding,   and,  in  the  case  of  any  such
         involuntary  proceeding,  such  proceeding  is not  dismissed or stayed
         within forty-five (45) days after it is commenced.

31.2     If Seller is in default under the  foregoing  Section 31.1 and does not
         cure within the applicable cure periods  pursuant to Section 31.1 Buyer
         shall have any or all of the following rights and remedies:

                 (a)    Buyer,  without prejudice to any of its other rights and
                        remedies under this  Agreement,  and at Buyer's  option,
                        may terminate this Agreement  immediately by shipment to
                        Seller of a notice of  termination (a  "Termination  for
                        Cause"),  in which event Seller  shall be relieved  from
                        any obligation to complete any unfinished portion of the
                        Work,  but shall not be relieved  from its  liabilities,
                        warranties  or   obligations   otherwise   provided  for
                        hereunder  in  respect  of any  portion  of the Work for
                        which  the  Seller  has been  paid  hereunder.  If Buyer
                        elects not to  terminate,  Buyer shall retain all rights
                        under  applicable  law for the purpose of enforcing  its
                        rights specified under this Agreement;

                 (b)    Any  amounts  owed by Buyer to  Seller as of the date of
                        the  Termination  for Cause  shall be  retained by Buyer
                        until after  completion of the Work and applied by Buyer
                        to pay any  amounts  owed  by  Seller  pursuant  to this
                        Section;

                 (c)    Seller shall be liable to Buyer for any additional  cost
                        in addition to the Contract Price hereunder  incurred by
                        Buyer  in  the   purchase  of

                                       33
<PAGE>


                        equipment   or  services   corresponding   to  the  Work
                        terminated   pursuant   to  a   Termination   for  Cause
                        hereunder.

31.3     Default by Buyer:

         Buyer shall be in default of this  Agreement  if (a) Buyer fails to pay
         to Seller any required payment which is not in dispute and such failure
         continues for thirty (30) days after written Notice of Default has been
         given by  Seller  to Buyer or (b) as a result  of the  occurrence  of a
         Force Majeure  Event,  Work has been  suspended for three hundred sixty
         five (365) days or longer,  then Seller may  terminate  this  Agreement
         upon written notice to Buyer.  Seller will not be obligated to ship the
         Turbine Generator Units or pass title to Buyer unless all payments from
         Buyer to Seller are current.

31.4     Termination For Convenience by Buyer

         Buyer may terminate  this  Agreement by five (5) days written notice to
         Seller if Buyer  determines  in its sole  discretion to be necessary or
         convenient   ("Termination  For  Convenience").   In  the  event  Buyer
         terminates this Agreement for  convenience,  Buyer shall pay Seller the
         termination  amount determined using the  Payment/Termination  Schedule
         (Appendix D) through the date of termination;  however, Buyer shall not
         be  obligated  to  make  any  other  payments  due  after  the  date of
         termination. Payments made against the Contract Price shall be credited
         against  the  termination  payment.  For  termination  prior  to  title
         transfer,  title to the  Turbine  Generator  Units  shall  remain  with
         Seller.  Upon  payment of the  termination  amount,  neither  Buyer nor
         Seller shall have any further obligations to the other.

31.5     Surviving Obligations

         Termination of this Agreement for Cause (a) shall not relieve Seller or
         Buyer of any obligation  hereunder that expressly survives  termination
         hereof;  (b) except as  otherwise  provided  in any  provision  of this
         Agreement expressly limiting the liability of either Party, termination
         shall not relieve either Buyer or Seller of any contractual obligations
         or liabilities  hereunder for loss or damage to the other Party arising
         out of or  caused  by acts or  omissions  of such  Party  prior  to the
         effectiveness   of   such   termination   or   arising   out  of   such
         termination;(c)  shall  not  relieve  Seller of its  warranty  or other
         contractual  obligations as to portions of the Work  hereunder  already
         performed or relieve  either party of continuing  obligations of Seller
         or Buyer,  as the case may be arising prior to the date of termination,
         and (d)  Seller  shall be liable  for  Delay  Payments  or  Performance
         Guarantee  Payments  for  which  liability  has  arisen  prior  to such
         Termination for Cause.

                                  SECTION 32: ASSIGNMENTS

32.1     Buyer  subject to  Sellers  approval,  which  will not be  unreasonably
         withheld, may assign its rights interests and obligations,  in whole or
         in part,  under this  agreement  and this  Agreement  to an  affiliated
         company,  in  which  Buyer  owns an  equity  interest  of 50% or  more,
         provided  it gives  written  notice to  Seller.  Seller  may assign its
         rights and obligations  regarding the Work, in part or in whole, to one
         or more of its wholly owned subsidiaries provided that it gives written
         notice to Buyer setting forth the  effective  date of such  assignment.
         Upon  the  effective  date of said  assignment  all of the  rights  and
         obligations  of  Seller  under  this  Agreement  shall  vest  solely in
         Seller's  respective   subsidiaries.   Buyer  agrees  to  execute  such
         documents as may be necessary to effect the assignment.  SELLER REMAINS
         LIABLE AS A


                                       34
<PAGE>

         GUARANTOR UNDER THIS AGREEMENT AND HEREBY GUARANTEES THE PERFORMANCE OF
         ITS SUBSIDIARIES  AFTER THE ASSIGNMENT  TAKES EFFECT.  Buyer may assign
         this  Agreement  to the EPC  Contractor  who will  provide  engineering
         procurement  and  construction  services  to Buyer with  respect to the
         Project,  subject to Buyer  demonstrating to Seller pursuant to Section
         7.5 that the EPC  Contractor  has the  financial  ability to pay Seller
         hereunder.

32.2     Except  as  provided  in  the  preceding  paragraph,  it  is  expressly
         understood  and agreed  that this  Agreement  is personal to Seller and
         Buyer,  and  that  Seller  and  Buyer  shall  have no  right,  power or
         authority to assign or delegate this  Agreement or any portion  hereof,
         either  voluntarily  or  involuntarily,  or by  operation  of law.  Any
         assignment by Buyer shall not release Buyer from any of its obligations
         hereunder. Notwithstanding the foregoing, Seller hereby consents to the
         collateral  assignment  of the Buyers  rights  under this  Agreement by
         Buyer  to  the   Financing   Parties   and  agrees  to   provide   such
         acknowledgments  and consents in respect of such collateral  assignment
         as the  Financing  Parties  or  their  counsel  may  from  time to time
         reasonably require. In the event of such collateral assignment,  Seller
         hereby consents to the exercise of the Financing  Parties' rights under
         such  collateral  assignment.  Upon  request of Buyer or any  permitted
         assignee,  Seller will further  evidence its consent by execution of an
         assignment or other instrument  reasonably acceptable to Seller and the
         permitted assignee.

32.3     Successors and Assigns

         All of the rights, benefits, duties, liabilities and obligations of the
         Parties  hereto shall inure to the benefit of and be binding upon their
         respective successors and permitted assigns.


                   SECTION 33: PERFORMANCE IN FAVOR OF FINANCING PARTIES

Seller  agrees  that in the  event of a  default  by Buyer  under  the terms and
conditions of any agreement between Buyer and any Financing Party, the Financing
Parties shall be entitled to use and enforce this Agreement,  as the same may be
amended or  supplemented  before or after such default,  all without  additional
cost to the Financing Parties.  In the event any Financing Party notifies Seller
in writing that Buyer has defaulted  under any  agreement  between Buyer and the
Financing  Parties  and  requests  Seller to  continue  performance  under  this
Agreement,  Seller shall  thereafter  perform  hereunder in accordance  with the
terms and provisions  hereof, so long as Seller shall be paid in accordance with
this Agreement for the Work performed  hereunder,  including payment of any sums
due to Seller for Work  performed to and including the date of Buyer's  default,
and so long as such Financing Parties agree in writing to continue to pay Seller
for Work performed in accordance with this Agreement.

Seller  agrees to amend this  Agreement  as may be  reasonably  requested by the
Financing  Parties  to the  extent  that  Seller's  rights  and  or  obligations
thereunder are not materially adversely affected.


                           SECTION 34: BUYER REVIEW OF DOCUMENTS

34.1     Buyer Review

         Neither  (a) the  review by Buyer of any  information  or  calculations
         supplied  by


                                       35
<PAGE>

         Seller  nor (b)  Buyer's  certification  of the  Heat  Rate  Guarantee,
         Turbine Generator Unit Electrical Output Guarantee, Emission Guarantee,
         Reliability  Guarantee or  Acceptance  nor (c) Buyer's  payments of the
         Contract  Price  constitute a waiver of, or release  Seller  from,  any
         liability  hereunder  from any breach or  default by Seller  under this
         Agreement.  Notwithstanding  anything to the contrary herein contained,
         Buyer shall not be liable for and makes no representation  with respect
         to any designs and  specifications  for the Turbine  Generator Units or
         the Scope of Work, including any designs and specifications prepared by
         Seller and reviewed or accepted by Buyer, and including any designs and
         specifications  set forth in the Agreement.  Buyer's  Acceptance of the
         Turbine  Generator Units shall not relieve Seller of its obligation for
         such compliance.

34.2     Final Drawings and Documentation

         One hundred-twenty (120) days after Mechanical Completion, Seller shall
         furnish to Buyer CAD disks where reasonably  available and reproducible
         mylars of the Final Drawings and  Documentation.  Without  limiting the
         requirements   otherwise   applicable   to  the  Final   Drawings   and
         Documentation  hereunder,  the Final Drawings and  Documentation  shall
         completely and accurately,  in all material respects, show and describe
         all piping and instrumentation, electrical interconnections, electrical
         elementarys   and  control  loop  logic  diagrams  within  the  Turbine
         Generator Units.  Seller shall  incorporate into the Final Drawings and
         Documentation  all  material  changes  or  corrections  to the  Turbine
         generator  Unit made at the Project Site prior to  Acceptance  so as to
         represent the completed as-built Turbine Generator Units completely and
         accurately  in all  material  respects.  Seller  shall  establish  such
         systems and retain such  personnel as are  necessary  to maintain  full
         quality  control  and  quality  assurance  with  respect  to the  Final
         Drawings and Documentation.

34.3     Ownership

         Seller  agrees that all  documents  prepared by Seller and  provided to
         Buyer pursuant to this Agreement shall be the property of Buyer.


                                    SECTION 35: WAIVERS

No failure to exercise,  and no delay in exercising,  any right, power or remedy
under the  Agreement  shall  impair  any right,  power or remedy  that any Party
hereto may have,  nor shall such failure or delay be construed to be a waiver of
any such rights,  powers or remedies or an acquiescence in any breach or default
under the  Agreement,  nor shall any waiver of any breach or default be deemed a
waiver of any default or breach subsequently occurring under the Agreement. This
Agreement may not be changed or amended  orally and any waiver hereof must be in
writing and executed by both  Parties.  Either  Party's  waiver of any breach or
failure to enforce any of the terms, covenants,  conditions, or other provisions
of this Agreement at any time shall in no way affect,  limit,  modify,  or waive
that Party's right thereafter to enforce or compel strict  compliance with every
term,  covenant,  condition or other  provision,  notwithstanding  any course of
dealing, course of performance, or custom of the trade.

                                 SECTION 36: GOVERNING LAW

This agreement and the rights and duties of the parties hereunder and/or arising
from or relating in any way to the transactions evidenced by the agreement shall
be governed by and


                                       36
<PAGE>


construed in  accordance  with the laws of the state of New York,  including all
matters of interpretation, validity and performance.

                                  SECTION 37: SEVERABILITY

In the event that any of the provisions, or portions or applications thereof, or
of  any of  the  Agreement  are  held  to be  unenforceable  or  invalid  by any
arbitrator,   arbitration  panel,  court,  or  regulatory  agency  of  competent
jurisdiction,  the validity and enforceability of the remaining  provisions,  or
portions or applications hereof, shall not be affected thereby.

                                    SECTION 38: NOTICES

38.1     Unless otherwise expressly required or permitted by the Agreement,  any
         notice  required or permitted to be given by Seller to Buyer  hereunder
         shall be in writing and shall be addressed to Buyer at:

                  Mountainview Power Company
                  25770 San Bernardino Avenue
                  San Bernardino, CA 92408
                  Attention: Scott Noll, General Manager
                  Telephone: (909) 478-7943          Facsimile: (909) 478-7910


         With a copy to:
                  Mountainview Power Company
                  245 Winter Street
                  Suite 300
                  Waltham, MA 02541
                  Attention: Arnold Wallenstein, Corporate Counsel
                  Telephone: (781) 370-1515          Facsimile: (781) 370-1594


and any notice  required or permitted  to be given by Buyer to Seller  hereunder
shall be in writing and shall be addressed to Seller at:

                  GENERAL ELECTRIC COMPANY
                  1 River Road
                  Schenectady, New York 12345
                  Attention: Joseph Such
                  Telephone: (518) 385-4613          Facsimile: (518) 385-5128



38.2     Delivery

         Unless otherwise expressly required or permitted by the Agreement,  all
         notices  shall be by writing and  delivered  (a) in person to the party
         above mentioned, (b) via certified mail with a return receipt requested
         in a securely  sealed  envelope and postage  prepaid,  (c) by expedited
         delivery service with signed proof of delivery by company recipient, or
         (d) by  prepaid  telegram  or  facsimile.  A  notice  shall  be  deemed
         delivered  either at the time of personal  delivery  or, in the case of
         delivery  service  or mail,  as the  date of  delivery  at the  address
         provided  herein,  or in the  case  of  telegram,  or  facsimile,  upon
         receipt. Each Party, by notice to the other Party,


                                       37
<PAGE>


         may designate,  from time to time,  another  address or office to which
         notices may be given pursuant to this Agreement.

                       SECTION 39: HEADINGS AND INTERPRETATION RULES

The Section and Section  headings  herein have been inserted for  convenience of
reference only and shall not in any manner affect the  construction;  meaning or
effect of the provisions  herein contained nor govern the rights and liabilities
of the parties hereto. Where the context requires,  words importing the singular
include the plural and vice versa.  Words  importing  natural persons or Parties
shall include firms and  corporations and any other  organizations  having legal
capacity.

                                SECTION 40: ENTIRE AGREEMENT

This Agreement  together with  attachments  (Appendices A - M)  constitutes  the
entire  agreement of the Parties with respect to the subject matter hereof.  All
prior,  correspondence,  negotiations and agreements, oral or written, among the
Parties  with  respect  to the  subject  matter  hereof are  superseded  by this
Agreement.  The  following  Sections  shall  survive  the  termination  of  this
Agreement:

               *    Section 8 (Taxes)
               *    Section 24 (Warranties)
               *    Section 26 ( Indemnities)
               *    Section 27 (Limitation of Liabilities)
               *    Section 40 (Entire Agreement)
               *    Section 41 ( Seller's Proprietary Information)
               *    Appendix I (Confidentiality Agreement)


                        SECTION 41: SELLER'S PROPRIETARY INFORMATION

At the time of furnishing confidential or proprietary  information,  Seller will
expressly  designate by label,  stamp, or other written  communication  that the
information  or  documentation  furnished is  confidential.  Buyer agrees (i) to
treat  such  information  as  confidential,  (ii)  to  restrict  the use of such
information to matters  relating to Seller's  performance of the Agreement,  and
(iii) to  restrict  access to such  information  to  employees  of Buyer and its
agents  whose  access  is  necessary  in the  implementation  of the  Agreement.
Confidential  information will not be reproduced  without Seller's prior written
consent,  and all copies of written  information will be returned to Seller upon
request  except to the extent that such  information  is to be retained by Buyer
pursuant  to  the  Agreement.   The  foregoing  restrictions  do  not  apply  to
information which: (i) is contained in a printed  publication which was released
to the  public  by  Seller  prior to the date of the  Agreement;  or (ii) is, or
becomes,  publicly  known  otherwise  than through a wrongful act of Buyer,  its
employees,  or agents;  or (iii) is in possession of Buyer,  its  employees,  or
agents  prior to  receipt  from  Seller,  provided  that the  person or  persons
providing the same have not had access to the information  from Seller;  (iv) or
is furnished to others by Seller without restrictions similar to those herein on
the right of the  receiving  party to use or  disclose;  or (v) is  approved  in
writing by Seller for  disclosure  by Buyer,  its agents or employees to a third
party.

                        SECTION 42: PUBLICITY RELEASES; INFORMATION

Seller shall not, and shall not permit any  Subcontractor to, issue any press or
publicity  release or any  advertisement,  or publish,  release or disclose  any
photograph  concerning  this Agreement or the Turbine  Generator Units except in
accordance with the Confidentiality Agreement attached as Appendix I or with the
consent of the Buyer, such consent not to be


                                       38
<PAGE>


unreasonably  withheld.  Seller may list Buyer's name, project name, and a brief
project  description  in  Seller's  experience  lists,  which  are  periodically
developed  and  published.  Seller  shall  give  prior  notice  to  Buyer of any
information  contained in documents  filed with public  authorities or any other
public  disclosure  that  could  result  in the  dissemination  of  confidential
information; provided, however, that disclosures made pursuant to any federal or
state securities laws of the United States of America or regulations or pursuant
to the rules of any  securities  exchange  may be made  without  the  consent of
Buyer.

                                SECTION 43:NON-NUCLEAR USE.

The  equipment   furnished  hereunder  this  Agreement  shall  not  be  used  in
conjunction  with the use or handling of nuclear material or the construction or
operation of a nuclear  installation.  Buyer  warrants that it shall not use the
equipment  for such  purpose  or  permit  others to use the  equipment  for such
purposes.  If any such use does occur,  Seller  disclaims  all liability for any
nuclear or other damage, injury or contamination or destruction of the equipment
and Buyer shall indemnify Seller against any such liability howsoever arising.


IN WITNESS  WHEREOF,  the Parties  have caused this  AGREEMENT to be executed by
this respective authorized representatives as of the date first set forth above.


GENERAL ELECTRIC COMPANY                     MOUNTAINVIEW POWER COMPANY


By:  _________________________                By:  ___________________________

Name:  _______________________                Name:  _________________________

Title:  ________________________              Title:  ________________________





                                       39
<PAGE>



                                   APPENDIX A


                                  SCOPE OF WORK



GE Proposal # 90044AG dated September 1999 definesSellers scope of supply.

It is  expressly  understood  that the steam  turbine  generator  equipment  and
accessories  listed in the GE Proposal are not included in the contract price or
scope of supply  and are  provided  as an option  that the Buyer and  Seller may
mutually agree to execute.

Tab 2, Tab 4, Tab 11, Tab 12, Tab 13, Tab 14, Tab 15, and Tab 18:  References to
the  Steam  Turbine  Generator  equipment,  services  and  accessories  shall be
disregarded for the purposes of this Agreement

Tab 5, Tab 6 and Tab 8 shall be disregarded for the purposes of this Agreement

Tab 1 Revision 0
Tab 2 Revision 2
Tab 3 Revision 2
Tab 4 Revision 1
Tab 5 Revision 0
Tab 6 Revision 0
Tab 7 Revision 2
Tab 8 Revision 0
Tab 9 Revision 0
Tab 10 Revision 0
Tab 11 Revision 0
Tab 12 Revision 0
Tab 13 Revision 0
Tab 14 Revision 0
Tab 15 Revision 0
Tab 16 Revision 0
Tab 17 Revision 0
Tab 18 Revision 0



                                       40
<PAGE>



                                         APPENDIX B


                                 PERSONNEL TRAINING PROGRAM


                             Please refer to Appendix A, Tab 13


                                       41
<PAGE>



                                         APPENDIX C


                                 QUALITY ASSURANCE PROGRAM



                             Please refer to Appendix A Tab 16



                                       42
<PAGE>



   CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
                EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                                   Appendix D
                          Payment/Termination Schedule

                             4 x PG7241(FA) GTG Sets
                         Payment - Termination Schedule

<TABLE>
<CAPTION>
<S>                                   <C>                                 <C>              <C>               <C>
                                                                                Payment                   Termination
   Payment                                                              Monthly        Cumulative          Cumulative
   Month                             Event                           % of Contract   % of Contract        % of Contract
   -----                             -----                           -------------   -------------        -------------


  Oct-99                       Signed Agreement                            *               *                    *
  Nov-99
  Dec-99
  Jan-00

  Feb-00
  Mar-00
  Apr-00
  May-00
  Jun-00                       Progress Payment                            *               *                    *
  Jul-00
  Aug-00
  Sep-00
  Oct-00
  Nov-00
  Dec-00
  Jan-01
  Feb-01
  Mar-01                       Progress Payment                            *               *                    *
  Apr-01                       Progress Payment                            *               *                    *
  May-01                       Progress Payment                            *               *                    *
  Jun-01                       Progress Payment                            *               *                    *
  Jul-01                       Progress Payment                            *               *                    *
  Aug-01                       Progress Payment                            *               *                    *
  Sep-01                       Progress Payment                            *               *                    *

                                       43
<PAGE>

  Oct-01                       Progress Payment                            *               *                    *
  Nov-01                       Progress Payment                            *               *                    *
  Dec-01                       Progress Payment                            *               *                    *
  Jan-02                       Progress Payment                            *               *                    *
  Feb-02                       Progress Payment                            *               *                    *
  Mar-02                       Progress Payment                            *               *                    *
  Apr-02                       Progress Payment                            *               *                    *
  May-02                       Progress Payment                            *               *                    *
  Jun-02                       Progress Payment                            *               *                    *
  Jul-02                       Progress Payment                            *               *                    *
  Aug-02                         Ship 2 x GTG                              *               *                    *
  Sep-02                         Ship 2 x GTG                              *               *                    *
  Oct-02          30 Days After Shipment of All Major Components           *               *                    *
</TABLE>






Notes:      The notes below are more precisely set forth in the Agreement

            The  initial  payment  is due  within  5  business  days  of  signed
            Agreement and is  non-refundable.  Progress  Payments are due on the
            15th of the  indicated  month and will be billed 30 days in advance.
            Payments  tied to shipment  are due Net 30 days after  certification
            that equipment has shipped.

            The Buyer  may  terminate  this  contract  at any time upon  written
            notice and payment of  termination  charges in  accordance  with the
            schedule set forth above.


            Upon  termination  prior to title transfer,  title to terminated gas
            turbine-generator equipment and accessories remains with the Seller.

            The  termination  charge  for any  equipment  for  which  title  has
            transferred is 100%.



                                       44
<PAGE>










                                         APPENDIX E


                             SAMPLE GE MONTHLY PROGRESS REPORT





                                       45
<PAGE>

                                   APPENDIX E

                                   Schedule 1

                             FINAL LIEN WAIVER FORM

State of  _ _____________
County of __ _________________________

KNOW ALL MEN BY THESE PRESENTS THAT General Electric  Company,  a corporation of
the State of New York,  acting through its Power System business,  whose address
is One River Road, Schenectady, New York 12345, hereinafter called SUPPLIER, and
with regard to the (unit type) at (Project/site  name), for and in consideration
of payment in the amount  of______________ for invoice number ____ __________ to
be made by (Customer Name).  (CONTRACTOR)  upon execution of this Final Release,
hereby represents that all bills for labor,  subcontractors,  materials,  lands,
licenses,  and  other  expenses  relating  to this  invoice  have  been  paid by
SUPPLIER.  Upon receipt by the undersigned of a check from the CONTRACTOR in the
above amount, payable to the undersigned, and when the check has been paid, this
document shall become effective to release and forever  discharge the CONTRACTOR
and the OWNER from any and all claims,  liens, and claims of lien arising out of
the materials and services for which payment is being made. Before any recipient
of this  document  relies upon it, he should  verify  evidence of payment to the
SUPPLIER.  Supplier hereby covenants and agrees,  for itself, its successors and
assigns,  that it and they,  and each of them,  shall and will  defend  and save
harmless the Owner from and against any and all suits, actions, claims, liens or
demands  of  laborers,  mechanics,  materialmen  or others,  with  regard to the
invoice    to   be   paid   in    exchange    for   this    Release   of   Lien.
--------------------------------------------------------------------------------

IN  WITNESS  WHEREOF,  I have  hereunder  set my hand in behalf of the  Supplier
______   ______________  day  of  _  ______,   19______  at  _________  ________
______________   ______________________   (City)__________  (State)  (Zip  Code)
(Supplier)

By    ________________________________
Title _                                                            _
      --------------------------------------------------------------

                                        ACKNOWLEDGMENT

State of ____ ________________________

County of __ ___________________________ ss:

On this __________________________ day of  _____ __________________,
19


                                       46
<PAGE>

before  me   appeared   ____   _______________________________________,   to  me
personally  known,  who,  being by me duly  sworn,  did depose and say that (he)
(she)  (they)  executed  the above  release for the Supplier and that (he) (she)
(they) was duly authorized to do so.

IN WITNESS WHEREOF, I have set hereunto my signature and seal this __________day
of _____ __________________, 19____.
                                                    ---------------------------
                                                                (Notary Public)
                                                          My commission expires
                                                     --------------------------



                                       47
<PAGE>


                                         APPENDIX F


                                   INTENTIONALLY OMITTED




                                       48
<PAGE>



                                   APPENDIX G

                  I.        APPROVED TEST PROCEDURES


                        Please refer to Appendix A Tab 3 and Tab 17.




                                       49
<PAGE>


                                   APPENDIX I



                            CONFIDENTIALITY AGREEMENT


THIS  CONFIDENTIALITYAGREEMENT  IS MADE AND  EFFECTIVE  THIS  13TH DAY OF AUGUST
1999") , BY AND AMONG  GENERAL  ELECTRIC  COMPANY,  ACTING  THROUGH ITS GE POWER
SYSTEMS BUSINESS,  A NEW YORK CORPORATION,  HAVING A PRINCIPAL PLACE OF BUSINESS
AT  1  RIVER  ROAD,   SCHENECTADY,   NEW  YORK  12345  USA  ("GE"  OR  "SELLER")
ANDMOUNTAINVIEW POWER COMPANY, A DELAWARE CORPORATION,  HAVING A PRINCIPAL PLACE
OF BUSINESS AT 245 WINTER ST, SUITE 300, WALTHAM, MA 02451 ("BUYER") (SELLER AND
BUYER BEING REFERRED TO HEREIN INDIVIDUALLY AS A "PARTY" AND COLLECTIVELY AS THE
"PARTIES").



WHEREAS, each Party may provide to the other Party confidential information (the
"Confidential Information"), as defined below; and

WHEREAS, each Party receiving such Confidential  Information agrees to keep such
information confidential pursuant to the terms and conditions set forth herein.

NOW  THEREFORE,  in  consideration  of the  premises  and  for  other  good  and
sufficient consideration the Parties hereby agree as follows:

1.   Neither  party will  disclose any of the  Confidential  Information  to any
     third  party;  provided,  however,  the  Confidential  Information  may  be
     disclosed to each Party's  employees and  representatives  who need to know
     such  information  for the purpose of prosecuting the Work and who agree to
     keep  such  information  confidential  to the same  extent  as if they were
     parties  hereto.  The Parties shall label all  Confidential  Information as
     "Confidential",  "Proprietary"  or similar  designation.  Oral  information
     which is  confidential  or  proprietary so stated at the time of disclosure
     shall be reduced to writing by the disclosing party within ten (10) working
     days after disclosure,  which writing shall specifically reference the date
     of  disclosure.  A party (the  "parent  party") may  disclose  Confidential
     Information  of the  other  party  (the  "other  party")  for the  purposes
     contemplated  herein;  provided that such subsidiary or affiliate agrees in
     writing to be bound by the terms of this Agreement  prior to receipt of the
     Confidential  Information  of the other  party.  In such event,  the parent
     party shall notify the other party of the  disclosure  of the  Confidential
     Information  and  provide  the  other  party  with a copy of  such  written
     agreement executed by the subsidiary or affiliate of the parent party.


                                       50
<PAGE>


2.   Confidential  Information shall not include any information which (i) is or
     becomes  generally  available  to the  public  other  than as a result of a
     breach of this Agreement by either Party,  (ii) becomes available to either
     Party on a non-confidential basis from a source other than the other Party,
     its  representatives or agents,  provided that such source is not in breach
     of any secrecy or  confidentiality  obligation  to either  Party,  (iii) is
     known to either Party prior to receiving the Confidential  Information,  or
     (iv) is independently developed by either Party.

3.   In the event that either  Party  becomes  legally  compelled  by a court or
     administrative  agency  order  or  by  subpoena  to  disclose  any  of  the
     Confidential  Information,  such Party will  provide  the other  Party with
     prompt notice of the order or subpoena before such Confidential Information
     is  disclosed.  In the event that such Party is required  to  disclose  the
     Confidential  Information,  the  disclosing  Party will  furnish  only that
     portion of the  Confidential  Information  which it is legally  required to
     disclose  and  will  reasonably  assist  the  other  Party in  obtaining  a
     protective  order or other  assurance that  confidential  treatment will be
     accorded to the Confidential Information that is so disclosed.

4.   Neither Party makes any  representation  or warranty as to the completeness
     or accuracy of the information to be provided hereunder.

5.   Except as expressly provided herein with respect to the confidentiality and
     non-disclosure of the Confidential  Information,  nothing in this Agreement
     shall  obligate  any  Party  in  any  manner  whatsoever  with  respect  to
     consummate or agree to any other transaction between the Parties.

6.   This Agreement  shall not be construed to grant to either Party any patent,
     license, know-how, license, trade secret or any other rights, or to use any
     related  licenses or patent,  trade secret or know how,  which are owned by
     either Party or its affiliates.

7.   Without prejudice to the rights and remedies  otherwise  available,  either
     Party shall be entitled to seek  equitable  relief by way of  injunction or
     otherwise if the receiving Party or any of its representative's breach this
     Agreement.

8.   Neither Party will use or disclose any Confidential Information provided by
     the other Party for any purpose  other than with working with such party on
     the prosecution of the Work and, provided further,  neither Party shall use
     or provide to any third party any Confidential  Information provided by the
     other Party in connection with any competing project.



                                       51
<PAGE>


9.   This  Agreement  shall be governed by and construed in accordance  with the
     laws of the State of New York.

10.  This Agreement contains the full and complete  understanding of the Parties
     with  respect  to the  subject  matter  hereof  and  supersedes  all  prior
     representations and understandings  whether oral or written. This Agreement
     may not be modified in any manner except by written  amendment  executed by
     both Parties.

11. This Agreement shall expire three years from the date hereof.

IN WITNESS  WHEREOF,  the Parties  have  executed  this  Agreement by their duly
authorized officers in duplicate counterparts, each of which shall be considered
an original.

 Mountainview Power Company


By: _________________________
Name:_______________________
Title:_________________________

 General Electric Company


By: _________________________
Name:_______________________
Title:_________________________



                                       52
<PAGE>


   CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
                EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                                   APPENDIX J

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

              *****************************************************


                                       53
<PAGE>



                                   APPENDIX K


                           TECHNICAL ADVISORY SERVICES



                        Please refer to Appendix A Tab 12



                                       54
<PAGE>



                                   APPENDIX L


                               FUELS SPECIFICATION



               Please refer to Appendix A Tab 3, Tab 9 and Tab 17.



                                       55
<PAGE>



   CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
                EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                                   APPENDIX M

               **************************************************
Buyer shall  notify  Seller of all Options  Buyer wishes to include or delete 24
months  prior  to the  Guaranteed  Shipment  Date.  The  Contract  Price  may be
subsequently  modified  through changes to the Scope of Work pursuant to Section
14 hereof.  The Contract Price set forth above includes  freight and delivery to
the Delivery Point.

                               Note 1
                               Packaged   Electronic  and   Electrical   Control
                               Compartment
                               (PEECC)

                               The PEECC is a  completely  enclosed  compartment
                               suitable for outdoor  installation.  Heating, air
                               conditioning,    compartment   lighting,    power
                               outlets,  temperature alarms, and smoke detectors
                               are provided for  convenience  and  protection of
                               the equipment in the PEECC.


                               Electrical monitoring and control of the unit are
                               accomplished by the turbine control panel and the
                               generator  control panel,  which are mounted on a
                               common  skid  and  located  in  the  PEECC.   The
                               customer  control  local  interface  (I) is  also
                               located in the PEECC.  In addition to the control
                               systems,  the PEECC also  houses the gas  turbine
                               motor  control  centers and  batteries,  rack and
                               charger (s). The  arrangement of the equipment is
                               shown in the typical compartment layout below.





                               [chart   depicting  a  Packaged   Electronic  and
                               Electrical Control Compartment]





                                       56
<PAGE>