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                                                                     EXHIBIT 2.A

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                              TRANSACTION AGREEMENT

                                     BETWEEN

                    EAST COAST POWER HOLDING COMPANY L.L.C.,

                    ECTMI TRUTTA HOLDINGS LP AND ENRON CORP.,

                                       AND

            MESQUITE INVESTORS, L.L.C. AND EL PASO ENERGY CORPORATION

                                DECEMBER 18, 2000







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<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>              <C>                                                                                   <C>
                                                 ARTICLE 1
                                                DEFINITIONS

SECTION 1.01.     DEFINITIONS............................................................................2

                                                 ARTICLE 2
                                         TRANSACTIONS AND CLOSINGS

SECTION 2.01.     INITIAL CLOSING........................................................................6
SECTION 2.02.     SECOND CLOSING.........................................................................7
SECTION 2.03.     CLOSINGS...............................................................................9
SECTION 2.04.     OTHER POST-CLOSING PAYMENTS............................................................9

                                                 ARTICLE 3
                           REPRESENTATIONS AND WARRANTIES OF SELLER AND TRUTTA

SECTION 3.01      CAPACITY; ORGANIZATION, ETC...........................................................10
SECTION 3.02      TITLE TO MEMBERSHIP INTERESTS; COMPANY SUBORDINATED NOTES.............................10
SECTION 3.03      NO VIOLATION..........................................................................11
SECTION 3.04      APPROVALS.............................................................................11
SECTION 3.05      BROKERS...............................................................................12
SECTION 3.06      SUBORDINATED PROMISSORY NOTE..........................................................12
SECTION 3.07      DEFAULTS; LITIGATION..................................................................12

                                                 ARTICLE 4
                            REPRESENTATIONS AND WARRANTIES OF BUYER AND EL PASO

SECTION 4.01      ORGANIZATION, ETC.....................................................................12
SECTION 4.02      TITLE TO MEMBERSHIP INTERESTS.........................................................13
SECTION 4.03      NO VIOLATION..........................................................................13
SECTION 4.04      APPROVALS.............................................................................14
SECTION 4.05      INVESTMENT INTENT, INVESTIGATION......................................................14
SECTION 4.06      REGULATORY MATTERS....................................................................15
SECTION 4.07      BROKERS...............................................................................15
SECTION 4.08      NET WORTH REQUIREMENT.................................................................15
SECTION 4.09      EL PASO SEC REPORTS...................................................................15
SECTION 4.10      DEFAULTS; LITIGATION..................................................................16

                                                 ARTICLE 5
                                                 COVENANTS

SECTION 5.01      CONDUCT OF BUSINESS...................................................................16
SECTION 5.02      PUBLIC ANNOUNCEMENTS..................................................................16
SECTION 5.03      BEST EFFORTS..........................................................................16
SECTION 5.04      TERMINATION OF OPTION COVENANT........................................................17
SECTION 5.05      INDEMNIFICATION OF DIRECTORS, OFFICERS, ETC...........................................17
SECTION 5.06      RELEASE OF CLAIMS.....................................................................17
SECTION 5.07      TAXES.................................................................................19
SECTION 5.08      CREDIT SUPPORT AGREEMENT..............................................................19
SECTION 5.09      CAPITAL ACCOUNT AND SALES PRICE AFFIRMATION...........................................19

</TABLE>

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<TABLE>
<S>              <C>                                                                                   <C>
                                                ARTICLE 6
                                        CONDITIONS TO CLOSINGS

SECTION 6.01.     CONDITIONS TO THE OBLIGATIONS OF EACH PARTY TO EFFECT THE INITIAL CLOSING.............20
SECTION 6.02      CONDITIONS TO OBLIGATIONS OF BUYER AND EL PASO TO THE CLOSINGS........................21
SECTION 6.03.     CONDITIONS TO OBLIGATIONS OF SELLER AND TRUTTA TO EFFECT THE CLOSINGS.................22

                                                ARTICLE 7
                                               TERMINATION

SECTION 7.01.     GROUNDS FOR TERMINATION...............................................................23
SECTION 7.02.     EFFECT OF TERMINATION.................................................................23
SECTION 7.03.     TERMINATION FOLLOWING INITIAL CLOSING.................................................24

                                                ARTICLE 8
                                      SURVIVAL; INDEMNIFICATION

SECTION 8.01.     SURVIVAL..............................................................................24
SECTION 8.02.     INDEMNIFICATION.......................................................................24
SECTION 8.03.     PROCEDURES FOR THIRD PARTY CLAIMS.....................................................25
SECTION 8.04      EXCLUSIVE REMEDY......................................................................25

                                                ARTICLE 9
                                              MISCELLANEOUS

SECTION 9.01.     NOTICES...............................................................................25
SECTION 9.02.     AMENDMENTS; NO WAIVERS................................................................26
SECTION 9.03.     PARTIES IN INTEREST...................................................................26
SECTION 9.04.     EXPENSES..............................................................................27
SECTION 9.05.     SUCCESSORS AND ASSIGNS................................................................27
SECTION 9.06.     GOVERNING LAW; ARBITRATION............................................................27
SECTION 9.07.     COUNTERPARTS; EFFECTIVENESS...........................................................28
SECTION 9.08.     ENTIRE AGREEMENT......................................................................28
SECTION 9.09.     CAPTIONS..............................................................................28
ANNEXES:
1.01              Form of Guarantee
1.02              Form of Swap Agreement
1.03              Form of Swap Assignment
1.04              Form of Credit Event Agreement
2.01              Second Amendment
2.02-A            Membership Transfer Agreement
2.02-B            Restated LLC Agreement
2.02-C            Buyer Security Agreement Amendment
2.02-D            Amended Buyer Affiliate Security Agreement
2.02-E            Seller Security Agreement Amendment
2.02-F            Note Assignment and Acknowledgement
5.06              Surviving Affiliate Contracts
6.02              Opinion of Counsel to Seller/Trutta
6.03              Opinion of Counsel to Buyer/El Paso
</TABLE>


                                       ii
<PAGE>

                              TRANSACTION AGREEMENT

         This TRANSACTION AGREEMENT ("AGREEMENT") is made this 18th day of
December, 2000 between East Coast Power Holding Company L.L.C., a Delaware
limited liability company ("SELLER"), ECTMI Trutta Holdings LP, a Delaware
limited partnership ("TRUTTA"), Enron Corp., an Oregon corporation (for certain
limited purposes specified on the signature page hereto, "ENRON"), Mesquite
Investors, L.L.C., a Delaware limited liability company ("BUYER"), and El Paso
Energy Corporation, a Delaware corporation (for certain limited purposes
specified on the signature page hereto, "EL PASO").

         A. Seller owns 51% of the outstanding Class A Membership Interest and
51% of the outstanding Class B Membership Interest in East Coast Power, L.L.C.,
a Delaware limited liability company (the "COMPANY").

         B. Buyer owns 49% of the outstanding Class A Membership Interest and
49% of the outstanding Class B Membership Interest in the Company.

         C. El Paso controls Buyer and owns indirectly a portion of the issued
and outstanding membership interests in Buyer.

         D. Enron owns indirectly approximately 50% of the issued and
outstanding membership interests in Seller.

         E. The parties contemplate that, at the Initial Closing (as defined
herein), Buyer will contribute to the Company the amounts specified herein in
cash in exchange for additional Class A Membership Interest in the Company that
will increase its total Class A Membership Interest Sharing Ratio to 44.28%,
Buyer Affiliate will contribute to the Company the amounts specified herein in
cash in exchange for a Class A Membership Interest in the Company with a Sharing
Ratio of 0.9% and be admitted to the Company as a new Member and Seller's Class
A Membership Interest Sharing Ratio in the Company shall be reduced to 44.82%,
on the terms described herein.

         F. The parties contemplate that, at the Second Closing (as defined
herein), Seller (i) will sell to Buyer all of its Class A Membership Interest
and a portion of its Class B Membership Interest in the Company having a Sharing
Ratio of 4.1%, and (ii) will have its remaining Class B Membership Interest with
a Sharing Ratio of 1% converted to a New Preferred Membership Interest, all on
the terms described herein.

         G. The parties contemplate that, at the Second Closing, immediately
following the transfer by Seller of its Class A and a portion of its Class B
Membership Interest to Buyer, the Class A Membership Interest in the Company and
the Class B Membership Interest in the Company that is retained by Buyer and
Buyer Affiliate be reclassified into New Common Interests (as defined herein),
all on the terms described herein.

         H. The parties contemplate that, at the Second Closing, Buyer will
purchase from Trutta outstanding subordinated promissory notes of the Company in
the aggregate principal amount of $187,900,000 issued pursuant to the First
Amended and Restated Credit and Subordination Agreement dated as of April 20,
1999, as amended (the "COMPANY SUBORDINATED


                                       1
<PAGE>


NOTES"), which Company Subordinated Notes shall remain subject to the
$30,000,000 Note Participation Agreement (as defined herein), in exchange for
the consideration specified herein.

         NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, the parties agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

         SECTION 1.01.     DEFINITIONS.

         (a) The following capitalized terms used in this Agreement shall have
the meanings set forth below:

         "AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such other Person. The term "control" and correlative terms includes the
possession, directly or indirectly and whether acting alone or in conjunction
with others, of the authority to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities or
similar interests, by contract, or otherwise.

         "AMENDED BUYER AFFILIATE SECURITY AGREEMENT" has the meaning set forth
in Section 2.02(d)(ii).

         "APPLICABLE LAW" means, with respect to any Person, any domestic or
foreign, federal, state or local statute, law, ordinance, rule, administrative
interpretation, regulation, order, writ, injunction, directive, judgment, decree
or other requirement of any Governmental Authority applicable to such Person or
any of its Affiliates or any of their respective properties or assets.

         "BAYONNE FACILITY" means the cogeneration facility located at 10 Hook
Road, Block 381/A, Lot 2/4 (also known as Block 0047601, Lot 0001), in the City
of Bayonne, County of Hudson, State of New Jersey.

         "BUSINESS DAY" means a day other than a Saturday, Sunday or other day
on which commercial banks in Houston, Texas or New York, New York are authorized
or required by law to close.

         "BUYER" has the meaning set forth in the introductory paragraph to this
Agreement.

         "BUYER AFFILIATE" means a wholly owned subsidiary of Buyer to be
designated by Buyer before the Initial Closing for the purpose of becoming a
member of the Company as contemplated in Section 2.01.

         "BUYER AFFILIATE SECURITY AGREEMENT" has the meaning set forth in
Section 2.01(b).

         "BUYER COVERED PARTY" has the meaning set forth in Section 5.06 (c).


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<PAGE>

         "BUYER SECURITY AGREEMENT AMENDMENT" has the meaning set forth in
Section 2.02(d)(i).

         "CAMDEN COGENERATION FACILITY" means the cogeneration facility located
at 570 Chelton Avenue, Block 506/507, Lot 1/3, in the City of Camden, County of
Camden, State of New Jersey.

         "CASH CONTRIBUTION AMOUNT" means an aggregate cash amount necessary to
result in the Sharing Ratios contemplated after the additional issuances of
Class A Membership Interests to Buyer and Buyer Affiliate pursuant to Section
2.01(a) at the Initial Closing, based upon the Capital Accounts (as defined in
the LLC Agreement) immediately prior to the Initial Closing. Buyer and Seller
agree that such Capital Accounts shall be valued using the value of the
consideration to be received by Seller in exchange for its Membership Interests
at the Second Closing, which consists of both the cash to be paid pursuant to
Section 2.02(a)(ii) and the present value as of the Second Closing Date of the
net payments under the Swap Agreement to be delivered to Seller under Section
2.02(a)(i), determined using an annual discount rate of 8.5%. For the purposes
of allocating the Swap Agreements between Seller's Membership Interests and the
Company Subordinated Notes, the value of the Swap Agreements to be allocated to
the Company Subordinated Notes shall equal $157,900,000 plus 51% of the accrued
and unpaid interest thereon to the Second Closing Date.

         "CLOSING" refers to either or both of the Initial Closing or the Second
Closing, as applicable.

         "CLOSING DATE" refers to either or both of the Initial Closing Date or
the Second Closing Date, as applicable.

         "COMPANY" has the meaning set forth in the recitals to this Agreement.

         "COMPANY INDENTURE" means the Indenture dated as of April 20, 1999
between the Company and the Company Note Trustee governing the Company's Senior
Secured Notes.

         "COMPANY NOTE TRUSTEE" means The Bank of New York, as Trustee under the
Company Indenture.

         "COMPANY SUBORDINATED NOTES" has the meaning set forth in the recitals
to this Agreement.

         "COVERED PARTY" has the meaning set forth in Section 5.05(a).

         "CREDIT EVENT AGREEMENTS" means the letter agreements to be entered
into among EPMEH and each of Seller and Trutta, in substantially the form
attached hereto as ANNEX 1.04, which Credit Event Agreements shall in the
aggregate cover an obligation to pay up to $1,000,000 on the terms specified
therein.

         "CREDIT SUPPORT AGREEMENT" has the meaning set forth in Section
5.08(a).

         "DAMAGES" has the meaning set forth in Section 8.02(a).


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<PAGE>

         "DISPUTED CLAIMS" has the meaning set forth in Section 9.06(b).

         "EL PASO" has the meaning set forth in the introductory paragraph to
this Agreement.

         "ENRON" has the meaning set forth in the introductory paragraph to this
Agreement.

         "ENA" means Enron North America Corp., a Delaware corporation.

         "EPME" means El Paso Merchant Energy - Gas, L.P., a wholly-owned
subsidiary of El Paso.

         "EPMEH" means El Paso Merchant Energy Holding Company, a wholly-owned
subsidiary of El Paso.

         "GOVERNMENTAL AUTHORITY" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, court, government commission, tribunal or organization or any other
governmental regulatory, administrative or other agency, or any political or
other subdivision, department or branch of any of the foregoing.

         "GUARANTEES" means the Guaranties to be executed by El Paso in favor of
Seller and Trutta with respect to EPME's performance under the Swap Agreements,
which Guarantees shall be in substantially the form attached hereto as ANNEX
1.01.

         "INDEMNIFIED PARTY" has the meaning set forth in Section 8.03(a).

         "INDEMNIFYING PARTY" has the meaning set forth in Section 8.03(a).

         "INITIAL CLOSING" has the meaning set forth in Section 2.03(a).

         "INITIAL CLOSING DATE" means the date of the consummation of the
Initial Closing.

         "ISRA" means the New Jersey Industrial Site Recovery Act, N.J.S.A.
13:1-6K et seq., as amended, and its implementing regulations and policies.

         "LIEN" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, option, calls, preemptive right,
encumbrance, or other adverse claim of any kind in respect of such property or
asset.

         "LINDEN COGENERATION FACILITY" means the cogeneration facility located
at 1400 Park Avenue, Block 520, Lot 6, in the City of Linden, County of Union,
State of New Jersey.

         "LLC AGREEMENT" means the Second Amended and Restated Limited Liability
Company Agreement of the Company, dated as of August 13, 1999, as amended by
Amendment No. 1 thereto dated June 30, 2000.

         "MATERIAL ADVERSE EFFECT" means any event or occurrence (or series of
events or occurrences, taken together) which has had or is reasonably likely to
have a material adverse effect on the business, results of operations, condition
(financial or otherwise), assets, liabilities or prospects of the party in
question.


                                       4
<PAGE>

         "MEMBERSHIP INTEREST" has the meaning given to such term in the LLC
Agreement.

         "NEW COMMON INTERESTS" has the meaning set forth in Section 2.02(c).

         "NEW PREFERRED INTERESTS" has the meaning set forth in Section 2.02(c).

         "NJDEP" means the New Jersey Department of Environmental Protection.

         "NJ VENTURE AGREEMENT" has the meaning set forth in Section 6.01(g).

         "NOTE PARTICIPATION AGREEMENT" means the Sale and Assignment of Senior
Participation Interest dated as of December 22, 1999 by and among ENA and ENA
CLO I Holding Company I L.P.

         "PAYMENT EVENT" has the meaning set forth in Section 2.04(a).

         "PERSON" means an individual, corporation, partnership, joint venture,
limited liability company, association, trust, estate or other entity or
organization, including a Governmental Authority.

         "PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.

         "PURCHASED INTERESTS" means the Class A Membership Interest and Class B
Membership Interest in the Company to be purchased by Buyer from Seller under
this Agreement at the Second Closing and the Company Subordinated Notes to be
purchased by Buyer from Trutta under this Agreement at the Second Closing.

         "RESTATED LLC AGREEMENT" has the meaning set forth in Section 2.02(c).

         "SEC" means the United States Securities and Exchange Commission.
         "SECOND AMENDMENT" has the meaning set forth in Section 2.01(a).

         "SECOND CLOSING" has the meaning set forth in Section 2.03(b).

         "SECOND CLOSING DATE" means the date of the consummation of the Second
Closing.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "SELLER" has the meaning set forth in the introductory paragraph to
this Agreement.

         "SELLER SECURITY AGREEMENT AMENDMENT" has the meaning set forth in
Section 2.02(d)(iii).

         "SENIOR NOTE SECURITY INTERESTS" means the security interests granted
by Seller and Buyer in their Membership Interest pursuant to various security
agreements between each such entity and the Company Note Trustee, in each case
securing the obligations of the Company under the Senior Secured Notes issued
under the Company Indenture.


                                       5
<PAGE>

         "SHARING RATIO" has the meaning set forth in the LLC Agreement (as
adjusted pursuant to the Second Amendment).

         "SWAP AGREEMENTS" means the ISDA Master Swap Agreements, including the
related Schedules and Confirmations to be entered into among EPME and Buyer,
that are to be assigned at the Second Closing to Seller and Trutta, in
substantially the form attached hereto as ANNEX 1.02, which Swap Agreements
shall in the aggregate cover the total volumes reflected in such ANNEX 1.02.

         "SWAP ASSIGNMENT" means the Assignment and Assumption Agreement to be
used to assign the Swap Agreements to Seller and Trutta at the Second Closing,
in substantially the form attached hereto as Annex 1.03.

         "THIRD PARTY CLAIM" has the meaning set forth in Section 8.03.

         "TOTAL SWAP AGREEMENT VOLUME" means the total volume to be covered by
the Swap Agreements as reflected in ANNEX 1.02.

         "TRUTTA" has the meaning set forth in the introductory paragraph to
this Agreement.

         "UNDERTAKING" has the meaning set forth in Section 5.08(b).

         (b) Unless the context otherwise requires, as used in this Agreement:
(i) a term has the meaning ascribed to it; (ii) "or" is not exclusive; (iii)
"including" means "including, without limitation;" (iv) words in the singular
include the plural; (v) words in the plural include the singular; (vi) words
applicable to one gender shall be construed to apply to each gender; (vii) the
terms "hereof," "herein," "hereby," "hereto" and derivative or similar words
refer to this entire Agreement and (viii) the terms "Article" or "Section" shall
refer to the specified Article or Section of this Agreement.

                                    ARTICLE 2

                            TRANSACTIONS AND CLOSINGS

         SECTION 2.01. INITIAL CLOSING.

         (a) Upon the terms and subject to the conditions set forth herein, the
parties agree that on the Initial Closing Date, (i) Buyer will contribute to the
Company its pro rata portion of the Cash Contribution Amount in cash in exchange
for additional Class A Membership Interest in the Company that will increase its
Class A Membership Interest Sharing Ratio to 44.28%, (ii) Buyer Affiliate will
contribute to the Company its pro rata portion of the Cash Contribution Amount
in cash in exchange for a new Class A Membership Interest in the Company with a
Sharing Ratio of 0.9% and be admitted to the Company as a new Member, and (iii)
Seller's Class A Membership Interest Sharing Ratio in the Company shall be
reduced to 44.82%, all as described in the form of Amendment No. 2 to the Second
Amended and Restated Limited Liability Company Agreement of the Company attached
hereto as ANNEX 2.01 (the "SECOND AMENDMENT").


                                       6
<PAGE>

         (b) At the Initial Closing Buyer, Buyer Affiliate, and Seller
will contemporaneously therewith execute and deliver to each other the Second
Amendment. To the extent required by the Company Note Trustee, (i) Buyer and
Seller will each take commercially reasonable efforts to enter into amendments
to Buyer's and Seller's respective Security Agreements with the Company Note
Trustee to reflect the changes in ownership contemplated by the Second
Amendment, and (ii) Buyer Affiliate will execute and deliver to the Company Note
Trustee a security agreement in form contemplated by the Company Indenture
covering the membership interests in the Company acquired at the Initial Closing
(the "BUYER AFFILIATE SECURITY AGREEMENT").

         SECTION 2.02. SECOND CLOSING. Upon the terms and subject to the
conditions set forth herein, the parties agree that, on the Second Closing Date:

         (a) Buyer will purchase, and Seller will sell, assign, transfer and
convey to Buyer, all of Seller's Class A Membership Interest and a portion of
Seller's Class B Membership Interest in the Company having a Sharing Ratio of
4.1%, subject to the Senior Note Security Interests but free and clear of all
other Liens, in exchange for (i) the assignment by Buyer to Seller of its rights
under a duly executed Swap Agreement, together with a Guarantee with respect
thereto duly executed by El Paso, covering such portion of the Total Swap
Agreement Volume as shall be designated by Seller and Trutta prior to the Second
Closing, (ii) a cash payment by Buyer to Seller equal to the sum of
$15,083,510.20 plus the amount of any cash contributions required to be made by
Seller to the Company from the date of this Agreement until the Second Closing,
provided that if the Second Closing occurs on or prior to December 27, 2000,
such cash payment shall be reduced by $500,000 and (iii) a Credit Event
Agreement duly executed by EPMEH in favor of Seller covering such portion of the
aggregate $1,000,000 maximum amount thereunder as shall be designated by Seller
and Trutta prior to the Second Closing. The cash payment to be made by Buyer to
Seller at the Second Closing shall be made by wire transfer of immediately
available funds to an account designated by Seller. The assignment of the Swap
Agreement referred to above shall be pursuant to a Swap Assignment executed by
EPME, El Paso and Seller.

         (b) To evidence the sale, assignment, transfer and conveyance of
Seller's Class A and Class B Membership Interest contemplated by paragraph (a)
above, Seller shall execute and deliver to Buyer at the Second Closing the
Membership Transfer Agreement in substantially the form attached hereto as ANNEX
2.02-A.

         (c) Contemporaneously with the transactions contemplated in paragraph
(a) above, Buyer, Buyer Affiliate, and Seller shall enter into the Third Amended
and Restated Limited Liability Company Agreement (the "RESTATED LLC AGREEMENT")
of the Company in substantially the form attached hereto as ANNEX 2.02-B, which
shall, among other things, effect the reclassification of (i) the remaining
Class B Membership Interest in the Company (having a Sharing Ratio of 1%)
retained by Seller into 100% of the outstanding Preferred Interests, as defined
in Restated LLC Agreement ("NEW PREFERRED INTERESTS"), and (ii) all Membership
Interests in the Company owned by Buyer and Buyer Affiliate into 100% of the
outstanding Common Interests, as defined in the Restated LLC Agreement ("NEW
COMMON INTERESTS"), all on the terms set forth in such Restated LLC Agreement.


                                       7
<PAGE>

         (d) In connection with the transactions referred to in this Section
2.02, prior to or contemporaneously with the Second Closing:

                  (i) Buyer will enter into an amendment to its security
         agreement with the Company Note Trustee relating to its New Common
         Interests in substantially the form attached hereto as ANNEX 2.02-C
         (the "BUYER SECURITY AGREEMENT AMENDMENT");

                  (ii) Buyer Affiliate will enter into an amendment to the Buyer
         Affiliate Security Agreement with the Company Note Trustee relating to
         its new Common Interests in substantially the form attached hereto as
         ANNEX 2.02-D (the "AMENDED BUYER AFFILIATE SECURITY AGREEMENT");

                  (iii) Seller will enter into an amendment to its Security
         Agreement with the Company Note Trustee relating to its New Preferred
         Interests in substantially the form attached hereto as ANNEX 2.02-E
         (the "SELLER SECURITY AGREEMENT AMENDMENT"); and

                  (iv) The Seller and Buyer shall cause the Company to issue in
         the name of each of Buyer, Buyer Affiliate, and Seller a new
         certificate evidencing the respective Membership Interest of such party
         as contemplated by the terms of the Restated LLC Agreement, and each of
         Buyer, Buyer Affiliate and Seller shall cause its respective
         certificate to be delivered to the Company Note Trustee together with
         duly executed transfer powers or assignments satisfactory to the
         Company Note Trustee, against surrender (in the case of Buyer and
         Seller) by the Company Note Trustee to the Company of the old
         certificates representing such Membership Interest.

         (e) Buyer will purchase, and Trutta will sell, assign, transfer and
convey to Buyer, all of the Company Subordinated Notes, in exchange for (i) the
assignment by Buyer to Trutta of its rights under a duly executed Swap
Agreement, together with a Guarantee with respect thereto duly executed by El
Paso, covering such portion of the Total Swap Agreement Volume as shall be
designated by Seller and Trutta prior to the Second Closing, (ii) a cash payment
by Buyer to Trutta equal to 49% of the accrued and unpaid interest on the
Company Subordinated Notes through and including the Second Closing Date, and
(iii) a Credit Event Agreement duly executed by EPMEH in favor of Trutta
covering such portion of the aggregate $1,000,000 maximum amount thereunder as
shall be designated by Seller and Trutta prior to the Second Closing. Such cash
payment shall be made by wire transfer of immediately available funds to an
account designated by Trutta contemporaneously with the Second Closing. To
evidence the forgoing assignment of the Company Subordinated Notes, Trutta and
Buyer shall execute and deliver the Note Assignment and Acknowledgement in
substantially the form attached as ANNEX 2.02-F, and Trutta shall deliver to
Buyer the Company Subordinated Notes, free and clear of any Liens (other than
those arising under the terms of such Company Subordinated Notes and other than
those arising under the Note Participation Agreement). The assignment of the
Swap Agreement referred to above shall be pursuant to a Swap Assignment executed
by EPME, El Paso and Seller.

         (f) In connection with the transactions described above, El Paso agrees
to (i) cause EPME to enter into the Swap Agreements with Buyer and to enter into
the Swap Assignments pursuant to Sections 2.02(a) and (e), and El Paso agrees to
enter into the Guarantees with respect


                                       8
<PAGE>

to such Swap Agreements and the Swap Assignments, and (ii) to cause EPMEH to
execute and deliver to Seller and Trutta the Credit Event Agreements pursuant to
Sections 2.02(a) and (e).

         SECTION 2.03. CLOSINGS.

         (a) Subject to the satisfaction of the conditions to the Initial
Closing set forth in Article 6, the closing (the "INITIAL CLOSING") of the
transactions contemplated by Section 2.01 of this Agreement shall take place at
the offices of Vinson & Elkins L.L.P., 1001 Fannin, Houston, Texas 77002, on a
Business Day no later than January 22, 2001 selected by Seller, provided that
Seller gives Buyer notice of such Initial Closing Date at least one Business Day
prior to such Initial Closing Date.

         (b) Subject to the satisfaction of the conditions to the Second Closing
set forth in Article 6, the closing (the "SECOND CLOSING") of the transactions
contemplated by Section 2.02 of this Agreement shall take place at the offices
of Vinson & Elkins L.L.P., 1001 Fannin, Houston, Texas 77002, on the Business
Day following the Initial Closing Date, or on such other date as Buyer and
Seller shall agree.

         SECTION 2.04. OTHER POST-CLOSING PAYMENTS.

         (a) In consideration for the transactions contemplated by this
Agreement, Buyer agrees that, in the event that any event occurs that would
cause to become payable to Seller, as holder of the New Preferred Interest, any
distribution contemplated by Section 5.01 of the Restated LLC Agreement
(including amounts due in respect thereof under Section 5.02), whether or not
the Company is still in existence, and such distribution is not paid in full on
the date on which such payment becomes due (each, a "PAYMENT EVENT"), then Buyer
agrees to pay to Seller an amount equal to the difference between (i) the
distribution specified in such Section 5.01 with respect to such Payment Event
and (ii) any distribution actually made by the Company to Seller in respect of
such Payment Event. Any such payment shall be paid by wire transfer in
immediately available funds to an account designated by Seller within three
Business Days following written demand from Seller.

         (b) In consideration for the transactions contemplated by this
Agreement, El Paso agrees that, in the event that Buyer becomes obligated to
make any payment to Seller pursuant to Section 2.04(a) and fails to make such
payment when due from Buyer, then El Paso will promptly pay to Seller the amount
of such payment within three Business Days following written demand from Seller.
Any such payment shall be paid by wire transfer in immediately available funds
to an account designated by Seller.

         (c) The obligations of Buyer and El Paso hereunder are full,
unconditional and absolute obligations of Buyer and El Paso, and shall not
require Seller to exercise any remedies against the Company or Buyer prior to
claiming payment hereunder. If payment is made in full of any distribution
required pursuant to Section 5.01 of the Restated LLC Agreement by Buyer or El
Paso as set forth above, such payment shall be deemed to have been made on
behalf of the Company for purposes of the Restated LLC Agreement.


                                       9
<PAGE>

                                    ARTICLE 3

               REPRESENTATIONS AND WARRANTIES OF SELLER AND TRUTTA

         Seller and Trutta hereby severally, and not jointly, represent and
warrant to Buyer and El Paso, as follows (it being understood that Seller is
hereby making only the portions of the following representations and warranties
applicable to it, and that Trutta is making only the portions of the following
representations and warranties applicable to it):

         SECTION 3.01 CAPACITY; ORGANIZATION, ETC.

         (a) Seller is duly organized, validly existing and in good standing as
a limited liability company under the laws of the State of Delaware, and has
full right, power and authority to enter into and perform its obligations under
this Agreement, the Second Amendment and the Restated LLC Agreement and, the
Seller Security Agreement Amendment, and to consummate the transactions
contemplated hereby. This Agreement constitutes, and the Second Amendment, the
Restated LLC Agreement and the Seller Security Agreement, when executed and
delivered at the applicable Closing, will constitute, valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms.

         (b) Trutta is a limited partnership duly formed and validly existing
under the laws of the State of Delaware and has full partnership power and
authority to enter into and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement constitutes
valid and binding obligations of Trutta enforceable against Trutta in accordance
with its terms.

         SECTION 3.02 TITLE TO MEMBERSHIP INTERESTS; COMPANY SUBORDINATED NOTES.

         (a) Seller is as of the date hereof, and immediately prior to the
Initial Closing will be, the record and full legal and beneficial owner of 51%
of the outstanding Class A Membership Interest in the Company and 51% of the
outstanding Class B Membership Interest in the Company, and such Membership
Interests are owned by Seller free and clear of all Liens, except for the Senior
Note Security Interests and except as set forth in the LLC Agreement. Seller has
full right and authority to sell and transfer the Membership Interest to be
transferred by it pursuant to this Agreement, free and clear of all Liens,
except for the Senior Note Security Interests and except as set forth in the
Restated LLC Agreement. Seller will not transfer any of its Membership Interests
prior to the Second Closing.

         (b) Trutta is as of the date hereof, and immediately prior to the
Second Closing will be, the record and full legal and beneficial owner of the
Company Subordinated Notes, and such Company Subordinated Notes are owned by
Trutta free and clear of all Liens (other than those arising under the terms
thereof). Trutta has full right and authority to transfer and sell the Company
Subordinated Notes pursuant to this Agreement, free and clear of all Liens
(other than those arising under the terms thereof and other than under the Note
Participation Agreement). As of the date of this Agreement, (i) the aggregate
principal amount of the Company Subordinated Notes is $187,900,000, (ii) the
last interest payment on the Company Subordinated Notes was made on November 15,
2000, and (iii) to Trutta's knowledge, the Company is not in any material
default of the terms of the Company Subordinated Notes.


                                       10
<PAGE>


         SECTION 3.03 NO VIOLATION.

         (a) The execution and delivery of this Agreement by Seller does not,
and the consummation by Seller of the transactions contemplated by this
Agreement, the Second Amendment, the Restated LLC Agreement and the Seller
Security Agreement Amendment will not (a) violate the organizational documents
of Seller, (b) violate any permit, concession, grant, franchise, law, rule or
regulation, or any judgment, decree or order of any Governmental Authority to
which Seller is a party or to which Seller or any of its property is subject
(assuming satisfaction of the condition set forth in Section 6.01(c)) or (c)
assuming execution and delivery by Buyer and Seller of the Second Amendment and
the Restated LLC Agreement, conflict with, or result in a breach or violation
of, or accelerate the performance required by, the terms of any agreement,
contract, indenture or other instrument to which Seller is a party or to which
any of its property is subject, except in each case such as would not materially
impair the ability of Seller to consummate the transactions contemplated by this
Agreement, including the agreements contemplated hereby.

         (b) The execution and delivery of this Agreement by Trutta does not,
and the consummation by Trutta of the transactions contemplated by this
Agreement will not (a) violate the organizational documents of Trutta, (b)
violate any permit, concession, grant, franchise, law, rule or regulation, or
any judgment, decree or order of any Governmental Authority to which Trutta or
any subsidiary of Trutta (other than the Company and its subsidiaries) is a
party or to which Trutta or any subsidiary of Trutta (other than the Company or
its subsidiaries) or any of their respective property is subject (assuming
satisfaction of the condition set forth in Section 6.01(c)) or (c) conflict
with, or result in a breach or violation of, or accelerate the performance
required by, the terms of any agreement, contract, indenture or other instrument
to which Trutta or any subsidiary of Trutta (other than the Company and its
subsidiaries) is a party or to which any of its respective property is subject,
except in each case such as would not materially impair the ability of Trutta or
the Company to consummate the transactions contemplated by this Agreement,
including the agreements contemplated hereby.

         SECTION 3.04 APPROVALS.

         (a) The execution and delivery of this Agreement, the Second Amendment,
the Restated LLC Agreement, the Membership Transfer Agreement and the Seller
Security Agreement Amendment by Seller, and the consummation of the transactions
contemplated hereby and thereby by Seller, will not require the consent,
approval, order or authorization of any Governmental Authority or, assuming
execution and delivery by Buyer and Seller of the Second Amendment and the
Restated LLC Agreement, any other Person under any permit, license, agreement,
indenture or other instrument to which Seller is a party or to which any of its
properties are subject, and no declaration, filing or registration with any
Governmental Authority is required by Seller in connection with the execution
and delivery of this Agreement, the Second Amendment or the Restated LLC
Agreement and the consummation of such transactions other than any notice
filings that may be required to be made after the Second Closing and other than
the approval of the NJDEP contemplated in Section 6.01(c), in each case except
such as would not materially impair the ability of Seller to consummate the
transactions contemplated by this Agreement, including the agreements
contemplated hereby.


                                       11
<PAGE>

         (b) The execution and delivery by Trutta of this Agreement, and the
Note Assignment and Acknowledgement and the consummation of the transactions
contemplated hereby will not, require the consent, approval, order or
authorization of any Governmental Authority or any other Person under any
permit, license, agreement, indenture or other instrument to which Trutta is a
party or to which any of its properties are subject, and no declaration, filing
or registration with any Governmental Authority is required by Trutta in
connection with the execution and delivery of this Agreement and the
consummation of such transactions, in each case except such as would not
materially impair the ability of Trutta to consummate the transactions
contemplated by this Agreement, including the agreements contemplated hereby.

         SECTION 3.05 BROKERS. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Seller or Trutta who might be entitled to any fee or commission from Buyer or
the Company or any of its subsidiaries in connection with the transactions
contemplated by this Agreement.

         SECTION 3.06 SUBORDINATED PROMISSORY NOTE. All of the Company
Subordinated Notes are, and have been since their issuance, classified by the
Company as debt (as opposed to an equity interest) for all purposes, including
without limitation for federal, state and local tax purposes and for financial
reporting purposes and Seller, Trutta and the Company have treated the Company
Subordinated Notes as debt for all purposes.

         SECTION 3.07 DEFAULTS; LITIGATION. (a)There is no litigation, legal,
administrative or arbitral proceeding, investigation or other action of any
nature pending or, to the knowledge of Seller or Trutta threatened against or
affecting Seller or Trutta which involves the possibility of any judgment or
liability against Seller or Trutta that would have any adverse effect on the
ability of Seller or Trutta to perform their respective obligations under this
Agreement or any of the other agreements contemplated by this Agreement.

         (b) Neither Seller nor Trutta is in default under, nor has any event or
circumstance occurred which, but for the expiration of any waiting period or
notice or both, would constitute a default, under (i) its respective certificate
of incorporation, bylaws or other organizational or governing documents or (ii)
any material agreement, contract, indenture or other instrument to which of
Seller or Trutta is a party or to which any of their respective property is
subject, in each case except as would not have an adverse effect on the ability
of Seller or Trutta to perform their respective obligations under this Agreement
or any of the other agreements contemplated by this Agreement.

                                    ARTICLE 4

               REPRESENTATIONS AND WARRANTIES OF BUYER AND EL PASO

         Buyer and El Paso hereby jointly and severally represent and warrant to
Seller and Trutta as follows:

         SECTION 4.01 ORGANIZATION, ETC.

         (a) Buyer is duly organized, validly existing and in good standing as a
limited liability company under the laws of the State of Delaware and has full
right, power and authority


                                       12
<PAGE>

to enter into and perform its obligations under this Agreement, the Second
Amendment, the Restated LLC Agreement and the Buyer Security Agreement Amendment
and to consummate the transactions contemplated hereby. This Agreement
constitutes, and the Second Amendment, the Restated LLC Agreement and the Buyer
Security Agreement Amendment, when executed and delivered at the applicable
Closing, will constitute, valid and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms.

         (b) El Paso is duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full corporate power and
authority to enter into and perform its obligations under this Agreement and the
Guarantees and to consummate the transactions contemplated hereby and thereby.
This Agreement constitutes, and the Guarantees, when executed and delivered at
the applicable Closing, will constitute, valid and binding obligations of El
Paso, enforceable against El Paso in accordance with their respective terms.

         SECTION 4.02 TITLE TO MEMBERSHIP INTERESTS. Buyer is as of the date
hereof, and immediately prior to the Initial Closing will be, the record and
beneficial owner of 49% of the outstanding Class A Membership Interest in the
Company and 49% of the outstanding Class B Membership Interest in the Company,
and such Membership Interests are owned by such Buyer free and clear of all
Liens, except for the Senior Note Security Interests and except as set forth in
the LLC Agreement.

         SECTION 4.03 NO VIOLATION.

         (a) The execution and delivery of this Agreement by Buyer does not, and
the consummation by Buyer of the transactions contemplated by this Agreement,
Swap Assignments, the Second Amendment, the Restated LLC Agreement, and the
Buyer Security Agreement Amendment will not (a) violate the organizational
documents of Buyer, (b) violate any permit, concession, grant, franchise, law,
rule or regulation, or any judgment, decree or order of any Governmental
Authority to which Buyer or any subsidiary of Buyer (other than the Company and
its subsidiaries) is a party or to which Buyer or any of its property (other
than its interest in the Company and its subsidiaries) is subject (assuming
satisfaction of the condition set forth in Section 6.01(c)) or (c) assuming
execution and delivery by Buyer and Seller of the Second Amendment and the
Restated LLC Agreement, conflict with, or result in a breach or violation of, or
accelerate the performance required by, the terms of any agreement, contract,
indenture or other instrument to which Buyer is a party or to which any of its
property (other than its interest in the Company and its subsidiaries) is
subject, except in each case such as would not materially impair the ability of
Buyer to consummate the transactions contemplated by this Agreement, including
the agreements contemplated hereby.

         (b) The execution and delivery of this Agreement and the Guarantees by
El Paso does not, and the consummation by El Paso of the transactions
contemplated hereby and thereby will not (a) violate the organizational
documents of El Paso, (b) violate any permit, concession, grant, franchise, law,
rule or regulation, or any judgment, decree or order of any Governmental
Authority to which El Paso or any subsidiary of El Paso (other than the Company
and its subsidiaries) is a party or to which El Paso or any subsidiary of El
Paso (other than the Company and its subsidiaries) or any of their respective
property (other than its interest in the Company and its subsidiaries) is
subject (assuming satisfaction of the condition set forth in Section 6.01(c))


                                       13
<PAGE>

or (c) conflict with, or result in a breach or violation of, or accelerate the
performance required by, the terms of any agreement, contract, indenture or
other instrument to which El Paso or its subsidiaries (other than the Company
and its subsidiaries) is a party or to which any of its respective property
(other than its interest in the Company and its subsidiaries) is subject, except
in each case such as would not materially impair the ability of El Paso to
consummate the transactions contemplated by this Agreement, including the
agreements contemplated hereby.

         SECTION 4.04 APPROVALS.

         (a) The execution and delivery of this Agreement, the Second Amendment,
the Swap Assignments, the Restated LLC Agreement, and the Buyer Security
Agreement Amendment and the consummation of the transactions contemplated hereby
and thereby by Buyer, will not require the consent, approval, order or
authorization of any Governmental Authority or, assuming execution and delivery
by Seller of the Second Amendment and the Restated LLC Agreement, any other
Person under any permit, license, agreement, indenture or other instrument to
which Buyer or any of its subsidiaries is a party or to which any of their
properties are subject, and no declaration, filing or registration with any
Governmental Authority is required by Buyer or any of its subsidiaries in
connection with the execution and delivery of this Agreement and the
consummation of such transactions other than any notice filings that may be
required to be made after the Second Closing and other than the approval of the
NJDEP contemplated by Section 6.01(c), except such as would not materially
impair the ability of Buyer to consummate the transactions contemplated by this
Agreement, including the agreements contemplated hereby.

         (b) The execution and delivery of this Agreement and the Guarantees and
the consummation of the transactions contemplated hereby and thereby by El Paso,
will not require the consent, approval, order or authorization of any
Governmental Authority or any other person under any permit, license, agreement,
indenture or other instrument to which El Paso or any of its subsidiaries is a
party or to which any of their properties are subject, and no declaration,
filing or registration with any Governmental Authority is required by El Paso or
any of its subsidiaries in connection with the execution and delivery of this
Agreement and the consummation of such transactions other than any notice
filings that may be required to be made after the Second Closing and other than
the approval of the NJDEP contemplated by Section 6.01(c), except such as would
not materially impair the ability of El Paso to consummate the transactions
contemplated by this Agreement, including the agreements contemplated hereby.

         SECTION 4.05 INVESTMENT INTENT, INVESTIGATION.

         (a) Buyer is capable of evaluating the merits and risks of its
investment in the Purchased Interests. Buyer is taking such Purchased Interests
for its own account and not with a view to or for sale in connection with any
distribution of such securities as such terms are defined under the Securities
Act. Buyer has had an opportunity to discuss the Company's and its subsidiaries'
business and financial condition, properties, operations and prospects with the
Company's and its subsidiaries' management and to ask questions of officers of
the Company and its subsidiaries, and all requests for information in such
connection have been answered to their satisfaction.


                                       14
<PAGE>

         (b) Buyer understands that (i) the Purchased Interests will be
"restricted securities" under the applicable federal securities laws, (ii) that
the Securities Act and the rules of the SEC provide in substance that a holder
may dispose of the Purchased Interests only pursuant to an effective
registration statement under the Securities Act or in a transaction exempt from
the registration requirements of the Securities Act, and that, accordingly,
Buyer may be required to bear the economic risk of the investment in the
Purchased Interests for a substantial period of time, and (iii) the certificates
representing the Purchased Interests shall bear a legend to the foregoing
effect.

         SECTION 4.06 REGULATORY MATTERS.

         (a) None of Buyer or any "affiliate" thereof, as defined in section
2(a)(11)(B) of PUHCA, is subject to regulation as a "public utility" under the
Federal Power Act, other than as contemplated by 18 C.F.R. Section 292.601(c),
or under any state law or regulation with respect to the rates or the financial
or organizational regulation of electric utilities, other than as contemplated
by 18 C.F. R. Section 292.602(c)(2). None of Buyer or any "affiliate" thereof,
as defined in section 2(a)(11) of PUHCA, is subject to regulation as a
"public-utility company," a "holding company," a "subsidiary company," an
"associate company," or an "affiliate" of any of a "public-utility company," a
"holding company," or a "subsidiary company" of a "holding company," as each
such term is defined in PUHCA. Buyer is not subject to regulation as (i) a
"public utility" under the Federal Power Act; (ii) a "public-utility company," a
"holding company," or a "subsidiary company," "associate company," or
"affiliate" of a "public-utility company" or a "holding company" or an
"affiliate" of a "subsidiary company" of a "holding company," as each such term
is defined in PUHCA. None of Buyer or any "affiliate" thereof, as defined in
section 2(a)(11) of PUHCA, requires any approvals under the Federal Power Act or
PUHCA for the execution, delivery, or performance of the transactions
contemplated by this Agreement.

         (b) Buyer is not "a person primarily engaged in the generation or sale
of electric power (other than electric power solely from cogeneration facilities
or small power production facilities"), an "electric utility", an "electric
utility holding company", or "a wholly or partially owned subsidiary of an
electric utility or electric utility holding company", within the meaning of 18
C.F.R. Section 292.206.

         SECTION 4.07 BROKERS. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Buyer or its Affiliates who might be entitled to any fee or commission from
Seller or the Company or any of its subsidiaries in connection with the
transactions contemplated by this Agreement.

         SECTION 4.08 NET WORTH REQUIREMENT. Buyer or El Paso will, upon
completion of each of the Initial Closing and the Second Closing, satisfy the
requirement of paragraph (i) of Section 11 of the Letter of Credit and
Reimbursement Agreement dated as of September 17, 1992 between Cogen
Technologies Linden Venture, L.P. and General Electric Capital Corporation, as
amended by the Amendment, Consent and Waiver Under Reimbursement Agreement dated
as of February 4, 1999 among such parties.

         SECTION 4.09 EL PASO SEC REPORTS. El Paso has, since December 31, 1999,
filed with the SEC all reports on forms 10-K, 10-Q or 8-K required to be filed
by it pursuant to the


                                       15
<PAGE>

Securities Exchange Act of 1934. Such reports, at the time they were filed
(including at the time of filing of any amendments thereto), (i) complied as to
form in all material respects with the rules and regulations of the SEC under
the Securities Exchange Act of 1934 and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.

         SECTION 4.10 DEFAULTS; LITIGATION

         (a) There is no litigation, legal, administrative or arbitral
proceeding, investigation or other action of any nature pending or, to the
knowledge of Buyer or El Paso, threatened against or affecting Buyer or El Paso
which involves the possibility of any judgment or liability against Buyer or El
that would have any adverse effect on the ability of Buyer or El Paso to perform
their respective obligations under this Agreement, the Guarantees or any of the
other agreements contemplated by this Agreement.

         (b) Neither Buyer nor El Paso is in default under, nor has any event or
circumstance occurred which, but for the expiration of any waiting period or
notice or both, would constitute a default, under (i) its respective certificate
of incorporation, bylaws or other organizational or governing documents or (ii)
any material agreement, contract, indenture or other instrument to which Buyer
or El Paso is a party or to which any of their respective property is subject,
in each case except as would not have an adverse effect on the ability of Buyer
or El Paso to perform their respective obligations under this Agreement, the
Guarantees or any of the other agreements contemplated by this Agreement.

                                    ARTICLE 5

                                    COVENANTS

         SECTION 5.01 CONDUCT OF BUSINESS. Except as contemplated by this
Agreement, from the Initial Closing until the earlier of (a) the Second Closing,
or (b) the effectiveness of the actions contemplated by Section 7.03,
notwithstanding Section 6.01 of the LLC Agreement, all decisions and actions,
other than in the ordinary course, relating to the Company or its subsidiaries
shall require the consent of Buyer and Seller.

         SECTION 5.02 PUBLIC ANNOUNCEMENTS. Subject to applicable securities
laws or stock exchange requirements, no party shall, without the prior approval
of the other parties, issue or permit any of their respective partners,
directors, officers, employees, agents or Affiliates to issue, any press release
or other public announcement with respect to this Agreement or the transactions
contemplated hereby. If a party is required to disclose information with respect
to this Agreement or the transactions contemplated hereby under applicable
securities laws or stock exchange requirements, to the extent reasonably
practicable under the circumstances, such party shall provide the other party
with prior notice of its intent to make the disclosure and the general content
of the disclosure.

         SECTION 5.03 FURTHER EFFORTS. Upon the terms and subject to the
conditions hereof, Buyer, El Paso, Seller and Trutta agree to use their
commercially reasonable best efforts to take, or cause to be taken, all actions
to do, or cause to be done, all things necessary to satisfy the


                                       16
<PAGE>

conditions to the Closings that relate to such party set forth herein. Buyer
shall cause Buyer Affiliate to perform all actions required to be performed by
it hereunder. Without limiting the foregoing, Buyer and Seller will each use
their commercially reasonable best efforts to satisfy the condition to closing
set forth in Section 6.01(g). Buyer and Seller will cooperate with each other
until the Second Closing to enable each other to conduct the due diligence
necessary to satisfy the condition to closing set forth in Section 6.01(h).

         SECTION 5.04 TERMINATION OF OPTION COVENANT. The agreement set forth in
Section 5.06 of the Purchase Agreement dated as of August 2, 1999 between Buyer
and Seller shall be terminated subject to and effective upon consummation of the
Second Closing.

         SECTION 5.05 INDEMNIFICATION OF DIRECTORS, OFFICERS, ETC.

         (a) Buyer agrees that, to the fullest extent permitted by Applicable
Law and as allowed under and pursuant to the terms of the Restated LLC
Agreement, all rights to indemnification and exculpation now existing or
hereafter arising in favor of Seller or other Indemnified Person (as that term
is used in the Restated LLC Agreement) acting at the direction of Seller,
including those Indemnified Persons who may be officers, directors, employees,
and agents of Seller (the "COVERED PARTIES") with respect to acts or omissions
occurring prior to the Second Closing that are based on or arise out of such
Covered Party's service to the Company or any subsidiary thereof in such
Person's capacity as such, pursuant to the articles or certificates of
incorporation, bylaws, partnership agreements or limited liability agreements of
such entities as in effect on the date hereof, shall survive the Second Closing
and shall continue in full force and effect thereafter, and shall not be
amended, repealed or otherwise modified or eliminated in any manner that would
adversely affect the rights thereunder of the Covered Parties with respect to
acts or omissions occurring on or before the Second Closing Date.

         (b) Buyer shall use reasonable commercial efforts to maintain in effect
for a period of six years after the Second Closing Date policies of directors'
and officers' liability insurance maintained by or on behalf of the Company and
its subsidiaries as of the date of this Agreement covering those Covered Parties
who are currently covered by policies of directors' and officers' liability
insurance policies in connection with their service to the Company and its
subsidiaries with respect to actions taken or omissions occurring prior to the
Second Closing (or, at Buyer's option, substitute policies of at least the same
coverage containing terms that are in the aggregate no less favorable to such
insured persons).

         (c) The provisions of this Section 5.05 are expressly for the benefit
of the Covered Parties, shall be enforceable by each of them, and shall survive
the Second Closing. If Buyer or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving entity of such consolidation or merger, or (ii)
transfers all or substantially all of its properties and assets to any Person,
then, and in each such case, proper provision shall be made so that the
successors and assigns of Buyer assume the obligations of Buyer set forth in
this Section 5.05.


                                       17
<PAGE>

         SECTION 5.06 RELEASE OF CLAIMS.

         (a) From and after the Second Closing Date all contracts and agreements
between the Company or its Affiliates and Seller or its Affiliates relating to
the operations of the Company and its subsidiaries shall be terminated,
excepting and excluding those contracts and agreements set out on ANNEX 5.06 and
any agreements to be entered into pursuant to this Agreement, which shall remain
in effect and not be affected by this Section 5.06; provided, that any amounts
owed under any agreement terminated pursuant to this Section 5.06(a) (and any
rights and obligations with respect thereto) shall continue to be owed after the
Second Closing until paid as long as, prior to the Second Closing, all amounts
owed by the Company to Seller or its Affiliates under such agreements shall have
been invoiced for all activities through September 30, 2000.

         (b) Except as set forth in Section 5.06(a), subject to and effective
upon completion of the Second Closing, Buyer does hereby for itself and its
successors and assigns release, acquit and forever discharge Seller or any
Person who, on behalf of Seller, serves or has served as a director or officer
of the Company or any subsidiary of the Company or as a Manager of the Company
as that term is used in the Restated LLC Agreement (each, a "SELLER COVERED
PARTY") of and from any and all claims, demands, liabilities, responsibilities,
disputes, causes of action and obligations of every nature whatsoever,
liquidated or unliquidated, known or unknown, matured or unmatured, fixed or
contingent, that Buyer may now have, own or hold, or has at any time previously
had, owned or held against Seller or such Seller Covered Party, including
without limitation all liabilities created as a result of the negligence (but
not gross negligence, willful acts or acts of fraud) of Seller or such Seller
Covered Party, existing as of the Second Closing or relating to any matter that
occurred on or prior to the Second Closing; provided, however, that any claims,
liabilities, debts or causes of action that may arise in the connection with the
failure of Seller, any Seller Covered Party, Trutta or Enron to perform any of
their obligations hereunder or under any other contractual agreement
contemplated hereby, or from any breaches by any of them of any representations
or warranties herein or in connection with any of such other agreements
contemplated hereby shall not be released or discharged pursuant to this
provision.

         (c) Except as set forth in Section 5.06(a), subject to and effective
upon completion of the Second Closing, Seller does hereby for itself and its
successors and assigns release, acquit and forever discharge Buyer or any Person
who, on behalf of Buyer, serves or has served as a director or officer of the
Company or any subsidiary of the Company or as a Manager of the Company as that
term is used in the Restated LLC Agreement, or is otherwise and Indemnified
Person under the terms of the Restated LLC Agreement (each, a "BUYER COVERED
Parties"), of and from any and all claims, demands, liabilities,
responsibilities, disputes, causes of action and obligations of every nature
whatsoever, liquidated or unliquidated, known or unknown, matured or unmatured,
fixed or contingent, that Seller may now have, own or hold, or has at any time
previously had, owned or held against Buyer or any of such Buyer Covered Parties
in their capacity as such, including without limitation all liabilities created
as a result of the negligence (but not gross negligence, willful acts or acts of
fraud) of the Buyer or such Buyer Covered Party, existing as of the Second
Closing or relating to any matter that occurred on or prior to the Second
Closing; provided, however, that any claims, liabilities, debts or causes of
action that may arise in the connection with the failure of any of the parties
hereto to perform to perform any of their obligations hereunder or under any
other contractual agreement contemplated hereby or from any breaches by any of
them of any representations or warranties herein or in connection


                                       18
<PAGE>

with any of such other agreements contemplated hereby shall not be released or
discharged pursuant to this provision.

         SECTION 5.07 TAXES. All registration, stamp, value-added sales or other
similar state transfer taxes that are attributable solely to the sale, transfer
or delivery of Membership Interests hereunder by Seller to Buyer shall be borne
by Seller. The Seller shall file all necessary returns and other document with
respect to the taxes described in this Section 5.07.

         SECTION 5.08 CREDIT SUPPORT AGREEMENT.

         (a) At or prior to the Second Closing, El Paso shall (i) take such
actions as shall be required to terminate, effective as of the Second Closing,
all obligations of Enron under the Amended and Restated Credit Support Agreement
dated as of August 13, 1999 among the Company, Enron and El Paso (the "CREDIT
SUPPORT Agreement"), (ii) provide equivalent substitute letters of credit and
use its commercially reasonable best efforts to obtain the release of Enron
under each of the letters of credit maintained by Enron under the Credit Support
Agreement (such obligation to continue after the Second Closing if such releases
are not obtained prior thereto), (iii) use its commercially reasonable best
efforts (without payment of a material consent fee) to obtain the release of ENA
under the Guaranty Agreement dated as of June 1, 2000 by ENA in favor of Cogen
Technologies Linden Venture, L.P. by replacing such Guaranty Agreement with a
substantially equivalent guaranty by El Paso (such obligation to continue after
the Second Closing if such release is not obtained prior thereto), and (iv)
reimburse Enron for any amounts owed to Enron under the Credit Support
Agreement.

         (b) El Paso acknowledges that Enron intends to notify the Company Note
Trustee on or after the Second Closing Date that it is terminating the
Undertaking (the "UNDERTAKING") dated as of April 20, 1999 (as amended) made by
Enron in favor of the Company Note Trustee. El Paso therefore agrees, on or
before 45 days after the Second Closing Date, to take such action as shall be
required under the Company Indenture to provide Debt Service Credit Support
(within the meaning of the Company Indenture) in substitution for Enron's
terminated Undertaking.

         (c) Subject to the Second Closing, El Paso shall, or shall cause the
Company to, immediately indemnify, refund, and reimburse (i) Enron for any
amounts paid to the Company Note Trustee from and after the date hereof pursuant
to the Undertaking, including all fees, costs and other expenses related to such
payment, and for any amounts drawn under the letters of credit maintained by
Enron under the Credit Support Agreement, and (ii) ENA for any amounts paid
pursuant to the Guaranty Agreement referred to in Section 5.08(a)(iii) from and
after the date hereof, including all fees, costs, and other expenses related to
such payment.

         SECTION 5.09 CAPITAL ACCOUNT AND SALES PRICE AFFIRMATION. Buyer and
Seller agree that, immediately prior to the Initial Closing, they will execute a
certificate setting forth their respective Capital Accounts (as defined in the
LLC Agreement) with respect to their Membership Interests in the Company
immediately prior to the Initial Closing, which shall be valued in accordance
with the definition of Cash Contribution Amount. If the Restated LLC Agreement
becomes effective on or before December 31, 2000, the Capital Account
attributable to the Preferred Interest of Seller, as set forth on Exhibit D to
the Restated LLC Agreement, shall


                                       19
<PAGE>

equal the anticipated Net Losses, as agreed by the parties, to be allocated to
Seller pursuant to Section 5.04(b)(iii) of the Restated LLC Agreement. Seller
will further certify, as of the Second Closing, the amount to be realized by it
on the disposition of its Membership Interests pursuant to Section 2.02 of this
Agreement, which will also be valued in accordance with the definition of Cash
Contribution Amount.

                                    ARTICLE 6

                             CONDITIONS TO CLOSINGS

         SECTION 6.01. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY TO EFFECT THE
INITIAL CLOSING AND THE SECOND CLOSING. The obligations of the parties to
consummate the transactions contemplated by this Agreement at the Initial
Closing and Second Closing (to the extent set forth below with respect to such
Closing) are subject to the satisfaction of the following conditions:

         (a) As of each Closing no temporary restraining order, preliminary or
permanent injunction or other order or restraint issued by any court of
competent jurisdiction, no order, decree, restraint or pronouncement by any
Governmental Authority, and no other legal restraint or prohibition that would
prevent or have the effect of preventing the consummation of the transactions
described in this Agreement shall be in effect;

         (b) At each Closing, the Ratings Agencies (as defined in the Company
Indenture) shall have confirmed that a Ratings Downgrade (as defined in the
Company Indenture) will not result from consummation of the transactions
contemplated by this Agreement, such that the transactions contemplated by this
Agreement will not be deemed to constitute a Change of Control within the
meaning of the Company Indenture;

         (c) As of the Initial Closing, Seller shall have received (and
delivered a copy to Buyer), pursuant to ISRA, one of the following in connection
with the transactions contemplated hereby as they relate to each of the Bayonne
Facility, the Camden Facility and the Linden Facility: (i) a letter of
non-applicability of ISRA; (ii) a no further action letter under ISRA; (iii) a
remediation agreement pursuant to ISRA; (iv) approval of an application for one
of the following exemptions from ISRA: (A) a "de minimus quantity" exemption;
(B) an underground storage tank exemption; (C) a minimal environmental concern
exemption; (D) a "remediation in progress waiver;" or (v) any other approval or
authorization of NJDEP reasonably acceptable to Seller and Buyer;

         (d) At each applicable Closing, the Company Note Trustee shall have (i)
executed the amendments to the Security Agreements of Buyer, Buyer Affiliate and
Seller, (ii) taken the other actions required of the Company Note Trustee
pursuant to Article 2 of this Agreement;

         (e) As of the Initial Closing, the Company Note Trustee shall have
acknowledged its willingness or agreed (in a form acceptable to Buyer) to accept
as Debt Service Credit Support under the Company Indenture an undertaking by El
Paso substantially similar to the Undertaking;

         (f) As of the Initial Closing, Buyer and Seller shall have reached
mutually acceptable agreements regarding employee related matters and the
provision of transition services;


                                       20
<PAGE>

         (g) Seller shall have received (and delivered to Buyer) a written
consent, in form reasonably satisfactory to each of Buyer and Seller, from each
of the Venturers (other than JEDI Bayonne GP, LLC) under the Amended and
Restated Joint Venture Agreement of Cogen Technologies NJ Venture dated as of
August 25, 1986, as amended, including by the Agreement, Consent and Waiver and
Assumption and Release of Interests in Cogen Technologies NJ Venture dated as of
February 2, 1999 (collectively, the "NJ Venture Agreement"), consenting to the
transfer by Seller of its Class A Membership Interests and Class B Membership
Interests to Buyer and waiving any right of first refusal or similar rights
under the NJ Venture Agreement with respect thereto; and

         (h) Each of Buyer and Seller shall have, in its sole discretion,
conducted such due diligence as in its sole discretion shall have been necessary
to confirm that the execution and delivery by Seller of this Agreement and the
performance by it of its obligations hereunder do not and will not conflict
with, or result in a breach or violation under, or accelerate the performance
required by, the terms of any material agreement or instrument to which the
Company or any of its subsidiaries is a party or by which any of their
respective property is bound, except as would not in the aggregate have a
Material Adverse Effect on the Company and its subsidiaries, taken as a whole.

         SECTION 6.02 CONDITIONS TO OBLIGATIONS OF BUYER AND EL PASO TO THE
INITIAL CLOSING AND THE SECOND CLOSING. The obligations of Buyer and El Paso to
consummate the transactions contemplated by this Agreement at each Closing are
subject to the satisfaction of the following further conditions:

         (a) As of each Closing, Seller and Trutta shall have performed in all
material respects all of their obligations under this Agreement required to be
performed by them at or prior to such Closing;

         (b) As of each Closing, the representations and warranties of Seller
and Trutta contained in this Agreement and in any certificate or other writing
delivered by Seller or Trutta pursuant to this Agreement shall be true in all
material respects at and as of such Closing Date, as if made at and as of such
date, except that representations specifically made as of an earlier date need
only be true and correct as of such earlier date;

         (c) As of each Closing, Buyer shall have received certificates signed
by an authorized representative of Seller and Trutta attesting to the matters
set forth in Section 6.02(a) and (b);

         (d) As of each Closing, there shall not have occurred, since the date
of this Agreement, any event or occurrence (or series of events or occurrences,
taken together) which has had or is reasonably likely to have a Material Adverse
Effect on the Company;

         (e) Buyer shall have received, at the Second Closing only, an opinion
of counsel to Seller and Trutta reasonably satisfactory to Buyer to the effect
set forth on ANNEX 6.02 hereto;

         (f) Seller shall provide Buyer, on or before the Second Closing, an
affidavit that Seller is not a "foreign person" within the meaning of Code
Section 1445; and


                                       21
<PAGE>


         (g) Seller shall have delivered to Buyer and El Paso a written
representation dated as of the Initial Closing and the Second Closing to the
effect that, to Seller's knowledge without inquiry, the execution, delivery and
performance by Seller of this Agreement and performance of its obligations
hereunder does not and will not, assuming the absence of any adverse federal,
state or local tax consequences that may arise out of the transactions
contemplated by this Agreement, conflict with, or result in a breach or
violation of, or accelerate the performance required by, the terms of any of the
partnership or joint venture agreements governing Camden Cogen L.P., Cogen
Technologies NJ Venture, or Cogen Technologies Linden Venture, L.P. or any
material loan agreement, indenture or other financing instrument (including any
security agreements related thereto) to which any subsidiary of the Company is a
party, except as would not have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole.

         SECTION 6.03. CONDITIONS TO OBLIGATIONS OF SELLER AND TRUTTA TO EFFECT
THE INITIAL CLOSING AND THE SECOND CLOSING. The obligations of Seller and Trutta
to consummate the transactions contemplated by this Agreement at each Closing is
subject to the satisfaction of the following further conditions:

         (a) As of each Closing, Buyer and El Paso shall have performed in all
material respects all of their obligations under this Agreement required to be
performed by them on or prior to such Closing;

         (b) As of each Closing, the representations and warranties of Buyer and
El Paso contained in this Agreement and in any certificate or other writing
delivered by Buyer or El Paso pursuant to this Agreement shall be true and
correct in all material respects at and as of such Closing Date, in each case as
if made at and as of such date, except that representations specifically made as
of an earlier date need only be true and correct as of such earlier date;

         (c) As of each Closing, there shall not have occurred, since the date
of this Agreement, (i) any event or occurrence (or series of events or
occurrences, taken together) which has had or is reasonably likely to have a
Material Adverse Effect on Buyer, EPME, or El Paso and its subsidiaries, taken
as a whole, as applicable, or (ii) any adverse change in the ratings assigned to
the senior unsecured long-term debt of El Paso by either of Moody's Investors
Service, Inc. or Standard & Poors Rating Services, including any announcement of
a negative outlook with respect thereto;

         (d) As of each Closing, Seller and Trutta shall have received a
certificate signed by an executive officer of Buyer and El Paso attesting to the
matters set forth in 6.03(a), (b) and (c); and

         (e) Seller and Trutta shall have received, at the Second Closing only,
an opinion of counsel to Buyer and El Paso reasonably satisfactory to Seller to
the effect set forth on ANNEX 6.02 hereto.


                                       22
<PAGE>

                                    ARTICLE 7

                                   TERMINATION

         SECTION 7.01. GROUNDS FOR TERMINATION. This Agreement may be terminated
at any time prior to the Second Closing:

         (a) by mutual written agreement of Buyer and Seller;

         (b) by either Buyer or Seller if the Initial Closing shall not have
been consummated on or prior to January 22, 2001 or the Second Closing shall not
have occurred by January 23, 2001 (each, the "END DATE"); provided, however,
that Seller may not terminate this Agreement pursuant to this Section 7.01(b) if
the Initial Closing shall not have been consummated by the End Date by reason of
Seller's or Trutta's failure to perform in all material respects any of its
respective covenants or agreements contained in this Agreement; and provided,
further, that Buyer may not terminate this Agreement pursuant to this Section
7.01(b) if the Initial Closing shall not have been consummated by the End Date
by reason of Buyer's or El Paso's failure to perform in all material respects
any of their respective covenants or agreements contained in this Agreement;

         (c) by Buyer, if a breach of any representation, warranty, covenant or
agreement on the part of Seller or Trutta set forth in this Agreement shall have
occurred which would cause any of the conditions set forth in Section 6.01 or
6.02 not to be satisfied, and such breach is incapable of being cured or, if
capable of being cured, shall not have been cured within 30 Business Days
following receipt by Seller of notice of such breach from Buyer (or, if earlier,
by the End Date);

         (d) by Seller, if a breach of any representation, warranty, covenant or
agreement on the part of Buyer or El Paso set forth in this Agreement shall have
occurred which would cause any of the conditions set forth in Section 6.01 or
6.03 not to be satisfied, and such breach is incapable of being cured or, if
capable of being cured, shall not have been cured within 30 Business Days
following receipt by Buyer of notice of such breach from Seller (or, if earlier,
by the End Date); or

         (e) by either Buyer or Seller if there shall be any Applicable Law that
makes consummation of the transactions contemplated hereby illegal or otherwise
prohibited or if consummation of the transactions contemplated hereby would
violate any nonappealable final order, decree or judgment of any Governmental
Authority having competent jurisdiction.

         SECTION 7.02. EFFECT OF TERMINATION. Any termination of this Agreement
in accordance with Sections 7.01 (b)-(f) shall be effective upon notice thereof
by the terminating party to the other parties given in accordance with Section
9.01. If this Agreement is terminated as permitted by Section 7.01, such
termination shall be without liability of any party to any other party to this
Agreement, except that if such termination shall result from (i) the willful
failure of any party to this Agreement to fulfill a condition to the performance
of the obligations of the other parties that is within the control of such
party, (ii) the willful failure of any party to this Agreement to perform a
covenant or agreement contained in this Agreement or (iii) the willful breach by
any party to this Agreement of any representation or warranty contained in this
Agreement, such

                                       23
<PAGE>

party shall be fully liable for any and all damages incurred or suffered by any
other party as a result of such failure or breach, subject to Section 9.06. The
provisions of Sections 5.01 and 7.03 shall survive any termination of this
Agreement after the Initial Closing. The provisions of this Section 7.02 shall
survive any termination of this Agreement.

         SECTION 7.03. TERMINATION FOLLOWING INITIAL CLOSING. If this Agreement
is terminated following the occurrence of the Initial Closing and prior to the
occurrence of the Second Closing, Buyer and Seller shall, and Buyer shall cause
Buyer Affiliate to, take such actions as shall be necessary to amend the LLC
Agreement (as amended by the Second Amendment) to provide that the Class A
Membership Interests acquired by Buyer and Buyer Affiliate pursuant to the
Second Amendment shall be converted to a membership interest in the Company (the
"Subordinated Interest") with respect to which there will be no current
distributions made, no allocations of Net Income or Net Loss (each, as defined
in the LLC Agreement) (unless Net Loss is allocated to such interest because the
Adjusted Capital Account (as defined in the LLC Agreement) balance of all other
Members is zero), no Sharing Ratio (as defined in the LLC Agreement) and no
voting rights. Such amendment shall provide that the owners of a Subordinated
Interest will only have the right to receive the balance of the Adjusted Capital
Account attributable to such interest.

                                    ARTICLE 8

                            SURVIVAL; INDEMNIFICATION

         SECTION 8.01. SURVIVAL. The representations and warranties of the
parties contained in this Agreement or in any certificate or other writing
delivered pursuant to this Agreement shall each survive the Closings
indefinitely, provided, that the representation made by Seller at the Initial
Closing pursuant to Section 6.02(g) shall terminate and expire six months after
the Second Closing Date. The covenants and agreements of the parties (including,
without limitation, the covenants and agreements of the parties set forth in
this Article 8) contained in this Agreement shall survive the Closings.

         SECTION 8.02. INDEMNIFICATION.

         (a) Seller and Enron hereby agree jointly and severally to defend,
indemnify and hold harmless Buyer and El Paso against any and all damages,
losses, liabilities and expenses (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) ("DAMAGES") incurred or suffered
by them arising out of any misrepresentation or breach of any of the
representations and warranties made in Article 3 by Seller, or any covenant or
agreement made or to be performed Seller under this Agreement, provided,
however, that any claim for such indemnity must be made no later than the
applicable period specified in Section 8.01 for the survival of such
representation.

         (b) Trutta and Enron hereby agree jointly and severally to defend,
indemnify and hold harmless Buyer and El Paso against any and all Damages
incurred or suffered by them arising out of any misrepresentation or breach of
any of the representations and warranties made in Article 3 by Trutta, or any
covenant or agreement made or to be performed Trutta under this Agreement.


                                       24
<PAGE>

         (c) Buyer and El Paso hereby agree jointly and severally to defend,
indemnify and hold harmless Seller and Trutta against any and all Damages
incurred or suffered by them arising out of any misrepresentation or breach of a
representation or warranty made by Buyer or El Paso, as applicable, in Article 4
or any covenant or agreement made or to be performed by Buyer or El Paso, as
applicable, pursuant to this Agreement.

         SECTION 8.03. PROCEDURES FOR THIRD PARTY CLAIMS.

         (a) The parties seeking indemnification under Section 8.02 (the
"INDEMNIFIED PARTIES") agree to give prompt notice to the parties against whom
indemnity is sought (the "INDEMNIFYING PARTIES") of the assertion of any claim,
or the commencement of any suit, action or proceeding in respect of which
indemnity may be sought under Section 8.02 (the "THIRD PARTY CLAIMS"). The
failure by any Indemnified Party so to notify the Indemnifying Parties shall not
relieve any Indemnifying Party from any liability which it may have to such
Indemnified Party with respect to any claim made pursuant to this Section 8.03,
except to the extent such failure shall actually prejudice an Indemnifying
Party.

         (b) Upon receipt of notice from the Indemnified Parties pursuant to
Section 8.03(a), the Indemnifying Parties will assume the defense and control of
such Third Party Claims but shall allow the Indemnified Parties a reasonable
opportunity to participate in the defense of such Third Party Claims with their
own counsel and at their own expense. The Indemnified Parties shall, and shall
cause each of their Affiliates and Representatives to, cooperate fully with the
Indemnifying Parties in the defense of any Third Party Claim defended by the
Indemnifying Parties.

         (c) The Indemnifying Parties shall be authorized to consent to a
settlement of, or the entry of any judgment arising from, any Third Party Claim,
without the consent of any Indemnified Party, but only if the Indemnifying
Parties shall pay or cause to be paid all amounts arising out of such settlement
or judgment concurrently with the effectiveness of such settlement; not encumber
any of the assets of any Indemnified Party or agree to any restriction or
condition that would apply or adversely affect any Indemnified Party or to the
conduct of any Indemnified Party's business; and obtain, as a condition of any
settlement or other resolution, a complete release of any Indemnified Party
potentially affected by such Third Party Claim.

         SECTION 8.04. EXCLUSIVE REMEDY. Each party hereto acknowledges and
agrees that the provisions of this Article 8 shall be the exclusive remedy of
such party with respect to any matter arising under this Agreement.

                                    ARTICLE 9

                                  MISCELLANEOUS

         SECTION 9.01. NOTICES. All notices, requests and other communications
to any party under this Agreement shall be in writing (including telecopy or
similar writing) and shall be given,


                                       25
<PAGE>

         if to Seller, Trutta or Enron:

                           c/o East Coast Power Holding Company L.L.C.
                           1400 Smith Street
                           Houston, Texas 77002-7361
                           Attention: W. David Duran
                           Telecopy: (713) 646-8717


         with a copy to: Enron North America Corp.

                           Compliance Department
                           1400 Smith Street
                           Houston, Texas 77002-7361
                           Attention: Donna Lowry
                           Telecopy: (713) 646-4039

         if to Buyer or El Paso:

                           c/o El Paso Energy Corporation
                           1001 Louisiana Street
                           Houston, Texas 77002
                           Attention: John O' Rourke and Andrew C. Kidd, Esq.
                           Telecopy: (713) 420-2813

or to such other address or telecopy number and with such other copies, as such
party may hereafter specify for the purpose by notice to the other parties. Each
such notice, request or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified in
this Section and evidence of receipt is received or (ii) if given by any other
means, upon delivery or refusal of delivery at the address specified in this
Section.

         SECTION 9.02.     AMENDMENTS; NO WAIVERS.

         (a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by each party to this Agreement, or in the case of a waiver, by the
party against whom the waiver is to be effective.

         (b) No failure or delay by any party in exercising any right, power or
privilege under this Agreement shall operate as a waiver of such right, power or
privilege nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.

         SECTION 9.03. PARTIES IN INTEREST. Except as set forth in Section 5.05
or 5.06, nothing in this Agreement is intended to confer any rights or remedies
under or by reason of this Agreement on any persons other than Buyer, El Paso or
Seller and their respective successors and permitted assigns.


                                       26
<PAGE>

         SECTION 9.04. EXPENSES. All costs and expenses incurred in connection
with the transactions contemplated by this Agreement shall be paid by the party
incurring such cost or expenses.

         SECTION 9.05. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns. No party may assign, delegate or otherwise
transfer any of its obligations under this Agreement without the consent of each
of the other parties. After the Second Closing, nothing herein shall prevent
Seller from assigning any of its rights under this Agreement.

         SECTION 9.06. GOVERNING LAW; ARBITRATION.

         (a) This Agreement (including, but not limited to, the validity and
enforceability hereof) shall be governed by, and construed in accordance with,
the laws of the State of Texas, other than the conflict of laws rules thereof.

         (b) Any and all claims, counterclaims, demands, cause of action,
disputes, controversies, and other matters in question arising under this
Agreement or the alleged breach of any provision hereof, (all of which are
referred to herein as "DISPUTED CLAIMS"), whether such Disputed Claims arise at
law or in equity, under State or federal law, for damages or any other relief,
shall be resolved by binding arbitration in the manner set forth herein.

         (c) The validity, construction, and interpretation of this agreement to
arbitrate, and all procedural aspects of the arbitration conducted pursuant to
this agreement to arbitrate and the rules governing the conduct of the
arbitration (including the time for filing an answer, the time for the filing of
counter Disputed Claims, the times for amending the pleadings, the specificity
of the pleadings, the extent and scope of discovery, the issuance of subpoenas,
the times for the designation of experts, whether the arbitration is to be
stayed pending resolution of related litigation involving third parties not
bound by this Agreement, the receipt of evidence, and the like), shall be
decided by the arbitrators. In deciding the substance of the parties' Disputed
Claims, the arbitrators shall refer to the substantive laws of the State of
Texas for guidance (excluding Texas choice-of-law principles that might call for
the application of some other state's law); provided, however, that IT IS
EXPRESSLY AGREED THAT NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT TO
THE CONTRARY, THE ARBITRATORS SHALL HAVE ABSOLUTELY NO AUTHORITY TO AWARD
CONSEQUENTIAL DAMAGES (SUCH AS LOSS OF PROFIT), TREBLE, EXEMPLARY OR PUNITIVE
DAMAGES OF ANY TYPE UNDER ANY CIRCUMSTANCES REGARDLESS OF WHETHER SUCH DAMAGES
MAY BE AVAILABLE UNDER TEXAS LAW, THE LAW OF ANY OTHER STATE, OR FEDERAL LAW, OR
UNDER THE UNITED STATES ARBITRATION ACT, OR UNDER ANY OTHER RULES OF
ARBITRATION. The arbitrators shall have the authority to assess the costs and
expenses of the arbitration proceeding (including the arbitrators' fees and
expenses) against either or both parties. However, each party shall bear its own
attorneys fees and the arbitrators shall have no authority to award attorneys
fees.

         (d) The arbitration proceedings shall be conducted in Houston, Texas by
three arbitrators in accordance with the CPR Institute for Dispute Resolution
Non-Administered

                                       27
<PAGE>

Arbitration rules in effect on the date of this agreement. Within 30 days of the
notice of initiation of the arbitration procedure, the parties shall select
three arbitrators. If the parties are unable to agree upon the identity of the
three arbitrators, within the time set forth herein, the vacancies in the
selection of agreed arbitrators shall be filled by CPR in the manner specified
in CPR Rule 6. The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. Section 1-16, as such Act is modified by this
Agreement and judgment upon the award rendered by the arbitrators may be entered
by any court having jurisdiction thereof.

         (e) All fees of the arbitrators and other administrative charges
related to the arbitration shall be borne equally by the parties.

         (f) The parties hereby agree that the arbitration proceeding and the
arbitrators' award are to remain confidential and none of the parties or their
counsel will divulge or discuss, directly or indirectly, in the newspaper,
electronic media, or other public or private forum, or with any third parties,
the arbitration proceeding and/or the arbitrators' award except: (1) to the
extent required by a court of law or any federal, state, or local government,
agency or regulatory body or to the extent required to comply with applicable
securities laws or stock exchange requirements; (2) to the extent further agreed
to by the parties hereto, which consent will not be unreasonably withheld; or
(3) to the extent necessary under subsection (g) below.

         (g) The award of the arbitrators shall be final and binding on the
parties, and judgment thereon may be entered in a court of competent
jurisdiction.

         SECTION 9.07. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures were upon the same instrument.

         SECTION 9.08. ENTIRE AGREEMENT. This Agreement and the agreements
specifically contemplated hereby constitute the entire agreement among the
parties with respect to the subject matter of such documents and supersede all
prior agreements, understandings and negotiations, both written and oral,
between the parties with respect to the subject matter of such documents.

         SECTION 9.09. CAPTIONS. The captions in this Agreement are included for
convenience of reference only and shall be ignored in the construction or
interpretation of the provisions of this Agreement.

                         [SIGNATURES BEGIN ON NEXT PAGE]


                                       28
<PAGE>

         The parties have caused this Agreement to be duly executed individually
or by their authorized representatives on the day and year first above written.

<TABLE>
<S>                                                 <C>

                                                     EAST COAST POWER HOLDING COMPANY L.L.C.

                                                     By:      Joint Energy Development Investments II Limited
                                                              Partnership, its Managing Member

                                                     By:      Enron Capital Management II Limited Partnership,
                                                              its General Partner

                                                     By:      Enron Capital II Corp., its General Partner

                                                     By:      /s/ Joseph Deffner
                                                              -----------------------------------------------------
                                                     Name:    Joseph Deffner
                                                     Title:   Vice President

                                                     ECTMI TRUTTA HOLDINGS LP

                                                     By:      Brook I LLC, general partner

                                                     By:      /s/ Joseph Deffner
                                                              -----------------------------------------------------
                                                     Name:    Joseph Deffner
                                                     Title:   Vice President

                                                     MESQUITE INVESTORS, L.L.C.

                                                     By:      Chaparral Investors, L.L.C., its sole Member

                                                     By:      El Paso Chaparral Investor, L.L.C., its managing
                                                              Member

                                                     By:      El Paso Chaparral Holding Company, its sole Member

                                                     By:      /s/ John L. Harrison
                                                              -----------------------------------------------------
                                                     Name:    John L. Harrison
                                                     Title:   Senior Vice President and
                                                              Chief Financial Officer

</TABLE>


                                Signature Page-1
<PAGE>

         The undersigned, El Paso Corporation, joins this Agreement for purposes
of its representations, covenants and other agreements set forth in Article 1;
Sections 2.02, 2.03, 2.04 (b), 2.04(c); Article 4; Sections 5.02, 5.03, 5.06 and
5.08; and Articles 8 and 9.

                                            EL PASO ENERGY CORPORATION

                                            By:      /s/ Thomas G. Kilgore
                                                  -----------------------------
                                            Name:    Thomas G. Kilgore
                                            Title:   Vice President

         The undersigned, Enron Corp. joins this Agreement for purposes of its
agreements set forth in Articles 8 and 9 hereof. Enron hereby represents and
warrants to El Paso and Buyer that (i) it is duly organized, validly existing
and in good standing under the laws of the State of Oregon and has full
corporate power and authority to enter into and perform its obligations under
this Agreement, and (ii) this Agreement constitutes a valid and binding
obligation of Enron, enforceable against Enron in accordance with its terms.

                                            ENRON CORP.

                                            By:      /s/ Barry Schnapper
                                                   ----------------------------
                                            Name:    Barry Schnapper
                                            Title:   Vice President




                                Signature Page-2
<PAGE>

                                                                      ANNEX 5.06


                          SURVIVING AFFILIATE CONTRACTS

1.       Fixed Price Engineering, Procurement and Construction Agreement between
         Cogen Technologies Linden Venture, L.P. and National Energy Production
         Corporation, dated as of June 2, 2000.

2.       Irrevocable Standby Letter of Credit No. SBY506480 dated February 3,
         1999 and amended February 5, 1999 (but effective February 1, 1999),
         issued by UBS AG on behalf of the Company for the benefit of Forsgate
         Industrial Complex, a New Jersey limited partnership, securing certain
         obligations of Cogen Technologies NJ Venture pursuant to a real
         property lease in the amount of $155,000.

3.       Irrevocable Standby Letter of Credit No. SBY506481 dated February 3,
         1999 and amended February 5, 1999 (but effective February 1, 199),
         issued by UBS AG on behalf of the Company for the benefit of Forsgate
         Industrial Complex, a New Jersey limited partnership, securing certain
         obligations of Cogen Technologies NJ Venture pursuant to a real
         property lease in the amount of $300,000.

4.       Irrevocable Standby Letter of Credit No. 3014306 dated February 4, 1999
         issued by Bank of America on behalf of Linden, Ltd. in favor of State
         Street Bank and Trust Company of Connecticut National Association, to
         secure certain obligations pursuant to that certain Amended and
         Restated Term Loan Agreement by and among Linden Ltd. dated as of
         September 15, 1992 and State Street Bank and Trust Company of
         Connecticut, National Association, as Owner Trustee, as amended in the
         amount of $22,250,000.

5.       Irrevocable Letter of Credit No. 3016258 dated effective May 21, 1999,
         issued by Bank of America for the benefit of Public Service Electric
         and Gas Company, in the amount of $4,434,689.

6.       Guaranty Agreement dated as of June 1, 2000 by ENA in favor of Cogen
         Technologies Linden Venture, L.P.

7.       The Undertaking (as defined in Section 5.08(b) of this Agreement).


                                   Annex 5.06


<PAGE>

                                                                      ANNEX 6.02


                    OPINIONS OF COUNSEL TO SELLER AND TRUTTA
                            TO BE DELIVERED TO BUYER

         1. Seller is a limited liability company validly existing and in good
standing under the laws of the State of Delaware and has all limited liability
company powers required to carry on its business as now conducted.

         2. Trutta is a limited partnership duly formed and validly existingg
under the laws of the State of Delaware with all corporate powers required to
carry on its business as now conducted.

         3. The execution, delivery and performance by Seller of the Transaction
Agreement, the Second Amendment and the Restated LLC Agreement (the "Transaction
Documents") and the consummation of the transactions contemplated by such
agreements, are within the limited liability company powers of Seller and have
been duly authorized by all necessary limited liability company action on the
part of Seller. Each Transaction Document has been duly and validly executed and
delivered by or on behalf of Seller and constitutes a valid and binding
agreement of Seller, enforceable against Seller in accordance with its terms
(except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding at law or equity).

         4. The execution, delivery and performance by Trutta of the Transaction
Agreement and the consummation of the transactions contemplated thereby, are
within the limited partnership powers of Trutta and have been duly authorized by
all necessary partnership action on the part of Trutta. The Transaction
Agreement has been duly and validly executed and delivered by or on behalf of
Trutta and constitutes a valid and binding agreement of Trutta, enforceable
against Trutta in accordance with its terms (except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally and by general principles
of equity, regardless of whether such enforceability is considered in a
proceeding at law or equity).

         5. The execution, delivery and performance by each of Seller and Trutta
of the Transaction Documents to which it is a party and the consummation of the
transactions contemplated thereby require no material action by or in respect
of, or material filing on their behalf with, any Governmental Authority, other
than notice filings required to be filed after the Closing.

         6. The execution, delivery and performance by Seller of the Transaction
Documents and the consummation of the transactions contemplated thereby do not
(i) violate the organizational or governing documents of Seller, (ii) conflict
with, or result in a breach or violation of, or accelerate the performance
required by, the terms of any material agreement, contract, indenture or other
instrument to which Seller is a party or to which any of its properties are
subject or (iii) violate any Applicable Law applicable to Seller.


                                   Annex 6.02

<PAGE>

         7. The execution, delivery and performance by Trutta of the Transaction
Agreement and the consummation of the transactions contemplated thereby do not
(i) violate the limited partnership agreement of Trutta, (ii) conflict with, or
result in a breach or violation of, or accelerate the performance required by,
the terms of any material agreement, contract, indenture or other instrument to
which Trutta is a party or to which any of its properties are subject or (iii)
violate any Applicable Law applicable to Trutta.

         8. The execution, delivery and performance by Seller of the Transaction
Agreement and performance of its obligations thereunder does not and will not,
assuming the absence of any adverse federal, state or local tax consequences
that may arise out of the transactions contemplated by the Transaction
Agreement, conflict with, or result in a breach or violation of, or accelerate
the performance required by, the terms of a specifically identified list of
agreements to consist of the partnership or joint venture agreements governing
Camden Cogen L.P., Cogen Technologies NJ Venture, or Cogen Technologies Linden
Venture, L.P. or any material loan agreement, indenture or other financing
instrument (including any security agreements related thereto) to which any
subsidiary of the Company is a party, except as would not have a Material
Adverse Effect on the Company and its subsidiaries, taken as a whole.


                                Annex 6.02

<PAGE>
                                                                      ANNEX 6.03


                    OPINIONS OF COUNSEL TO BUYER AND EL PASO
                    TO BE DELIVERED TO SELLER AND TRUTTA AND
              ANY ASSIGNEE OF THE SWAP AGREEMENTS OR THE GUARANTEES

         1. Buyer is a limited liability company validly existing and in good
standing under the laws of the State of Delaware and has all limited liability
company powers required to carry on its business as now conducted.

         2. El Paso is a corporation validly existing and in good standing under
the laws of the State of Delaware and has all corporate powers required to carry
on its business as now conducted.

         3. Buyer Affiliate is a corporation validly existing and in good
standing under the laws of the state of its incorporation and has all powers
required to carry on its business as now conducted.

         4. EPME is a limited partnership validly existing and in good standing
under the laws of the state of its formation and has all powers required to
carry on its business as now conducted.

         5. EPMEH is a corporation validly existing and in good standing under
the laws of the state of its incorporation and has all powers required to carry
on its business as now conducted.

         6. The execution, delivery and performance by Buyer of the Transaction
Agreement, the Second Amendment, the Restated LLC Agreement, the Swap
Agreements, the Swap Assignments, and Buyer Security Agreement Amendment (the
"Buyer Transaction Documents") and the consummation of the transactions
contemplated by such agreements, are within the limited liability company powers
of Buyer and have been duly authorized by all necessary limited liability
company action on the part of Buyer. Each Buyer Transaction Document has been
duly and validly executed and delivered by or on behalf of Buyer and constitutes
a valid and binding agreement of Buyer, enforceable against Buyer in accordance
with its terms (except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding at law or equity).

         7. The execution, delivery and performance by El Paso of the
Transaction Agreement and the Guarantees (the "El Paso Transaction Documents")
and the consummation of the transactions contemplated thereby, are within the
corporate powers of El Paso and have been duly authorized by all necessary
corporate action on the part of El Paso. Each El Paso Transaction Document has
been duly and validly executed and delivered by or on behalf of El Paso and
constitutes a valid and binding agreement of El Paso enforceable against it in
accordance with its terms (except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding at law or equity).


                                   Annex 6.03
<PAGE>

         8. The execution, delivery and performance by Buyer Affiliate of the
Second Amendment, the Restated LLC Agreement, the Buyer Affiliate Security
Agreement, and the Amended Buyer Affiliate Security Agreement (the "Buyer
Affiliate Transaction Documents") and the consummation of the transactions
contemplated by such agreements, are within the company powers of Buyer
Affiliate and have been duly authorized by all necessary company action on the
part of Buyer Affiliate. Each Buyer Affiliate Transaction Document has been duly
and validly executed and delivered by or on behalf of Buyer Affiliate and
constitutes a valid and binding agreement of Buyer Affiliate enforceable against
it in accordance with its terms (except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding at law
or equity).

         9. The execution, delivery and performance by EPME of the Swap
Agreements and the Swap Assignments, and the consummation of the transactions
contemplated by such agreements, are within the company powers of EPME and have
been duly authorized by all necessary company action on the part of EPME. Each
Swap Agreement has been duly and validly executed and delivered by or on behalf
of EPME and constitutes a valid and binding agreement of EPME enforceable
against it in accordance with its terms (except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding at law
or equity).

         10. The execution, delivery and performance by EPMEH of the Credit
Event Agreements, and the consummation of the transactions contemplated by such
agreements, are within the corporate powers of EPMEH and have been duly
authorized by all necessary corporate action on the part of EPMEH. Each Credit
Event Agreement has been duly and validly executed and delivered by or on behalf
of EPMEH and constitutes a valid and binding agreement of EPMEH enforceable
against it in accordance with its terms (except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding at law
or equity).

         11. The execution, delivery and performance by each of Buyer, El Paso,
Buyer Affiliate, EPME and EPMEH of the Buyer Transaction Documents, the El Paso
Transaction Documents, the Buyer Affiliate Transaction Documents, and the Swap
Agreements and Swap Assignments, and the Credit Event Agreements, respectively,
and the consummation of the transactions contemplated thereby require no
material action by or in respect of, or material filing on their behalf with,
any Governmental Authority other than notice filings to be made after the Second
Closing.

         12. The execution, delivery and performance by Buyer of the Buyer
Transaction Documents and the consummation of the transactions contemplated
thereby do not (i) violate the organizational or governing documents of Buyer,
(ii) conflict with, or result in a breach or violation of, or accelerate the
performance required by, the terms of any material agreement, contract,
indenture or other instrument to which Buyer is a party or to which any of its
property is subject or (iii) violate any Applicable Law applicable to Buyer.


                                   Annex 6.03


<PAGE>

         13. The execution, delivery and performance by El Paso of the El Paso
Transaction Documents and the consummation of the transactions contemplated
thereby do not (i) violate the certificate of incorporation or bylaws of El
Paso, (ii) conflict with, or result in a breach or violation of, or accelerate
the performance required by, the terms of any material agreement, contract,
indenture or other instrument to which El Paso is a party or to which any of its
property is subject or (iii) violate any Applicable Law applicable to El Paso.

         14. The execution, delivery and performance by Buyer Affiliate of the
Buyer Affiliate Transaction Documents and the consummation of the transactions
contemplated thereby do not (i) violate the organizational or governing
documents of Buyer Affiliate, (ii) conflict with, or result in a breach or
violation of, or accelerate the performance required by, the terms of any
material agreement, contract, indenture or other instrument to which Buyer is a
party or to which any of its property is subject, or (iii) violate any
Applicable Law applicable to Buyer Affiliate.

         15. The execution, delivery and performance by EPME of the Swap
Agreements and the Swap Assignments, and the consummation of the transactions
contemplated thereby do not (i) violate the organizational or governing
documents of EPME, (ii) conflict with, or result in a breach or violation of, or
accelerate the performance required by, the terms of any material agreement,
contract, indenture or other instrument to which EPME is a party or to which any
of its property is subject, or (iii) violate any Applicable Law applicable to
EPME.

         16. The execution, delivery and performance by EPMEH of the Credit
Event Agreements, and the consummation of the transactions contemplated thereby
do not (i) violate the organizational or governing documents of EPMEH, (ii)
conflict with, or result in a breach or violation of, or accelerate the
performance required by, the terms of any material agreement, contract,
indenture or other instrument to which EPMEH is a party or to which any of its
property is subject, or (iii) violate any Applicable Law applicable to EPMEH.

         17. None of Buyer, Buyer Affiliate, or any of their respective
"affiliates," as defined in section 2(a)(11)(B) of PUHCA, is subject to
regulation as a "public utility" under the Federal Power Act, other than as
contemplated by 18 C.F.R. Section 292.601(c), or under any state law or
regulation with respect to the rates or the financial or organizational
regulation of electric utilities, other than as contemplated by 18 C.F. R.
Section 292.602(c)(2). None of the Buyer or any "affiliate" thereof, as defined
in section 2(a)(11) of PUHCA, is subject to regulation as a "public-utility
company," a "holding company," a "subsidiary company," an "associate company,"
or an "affiliate" of any of a "public-utility company," a "holding company," or
a "subsidiary company" of a "holding company," as each such term is defined in
PUHCA. Buyer is not subject to regulation as (i) a "public utility" under the
Federal Power Act; (ii) a "public-utility company," a "holding company," or a
"subsidiary company," "associate company," or "affiliate" of a "public-utility
company" or a "holding company" or an "affiliate" of a "subsidiary company" of a
"holding company," as each such term is defined in PUHCA. None of Buyer or any
"affiliate" thereof, as defined in section 2(a)(11) of PUHCA, requires any
approvals under the Federal Power Act or PUHCA for the execution, delivery, or
performance of the transactions contemplated by the Purchase Agreement.

         18. Neither Buyer nor Buyer Affiliate is "a person primarily engaged in
the generation or sale of electric power (other than electric power solely from
cogeneration facilities

                                   Annex 6.03
<PAGE>

or small power production facilities"), an "electric utility", an "electric
utility holding company", or "a wholly or partially owned subsidiary of an
electric utility or electric utility holding company", within the meaning of 18
C.F.R. Section 292.206.



                                   Annex 6.03