EXHIBIT 10.2


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                                 OWNER/GUARANTOR

                             SUPPLEMENTAL AGREEMENT

         This OWNER/GUARANTOR SUPPLEMENTAL AGREEMENT (this "Agreement") is
entered into and is dated as of November 21, 2001 (the "Effective Date"), by and
among, AES RED OAK, L.L.C., a Delaware limited liability company ("Owner"), and
RAYTHEON COMPANY, a Delaware corporation ("Raytheon"). Each of Owner and
Raytheon are hereinafter referred to as a "Party" and collectively as the
"Parties".

         WHEREAS, Owner and Washington Group International, Inc., an Ohio
corporation ("Contractor"), as successor in interest to Raytheon Engineers &
Constructors, Inc., entered into an Agreement for Engineering, Procurement and
Construction Services, dated as of October 15, 1999, as amended by that certain
Amendment No. 1 dated as of February 23, 2000 (as so amended, the "EPC
Agreement") for the design, construction, start-up, testing and initial
operation of Owner's electric generating facility located near Sayreville, New
Jersey (the "Project");

         WHEREAS, Raytheon, pursuant to that certain Guaranty No. 2381, dated as
of October 15, 1999 (the "Guaranty"), guaranteed to Owner all of Contractor's
obligations under the EPC Agreement;

         WHEREAS, Contractor, and its corporate parent, Washington Group
International Inc., a Delaware corporation ("Parent") filed voluntary petitions
(the "Bankruptcy Filing") in the United States Bankruptcy Court for Nevada (the
"Bankruptcy Court") on May 14, 2001;

         WHEREAS, Contractor informed Owner that Contractor had insufficient
funds to pay Subcontractors in accordance with the terms of their subcontracts
as required by Section 3.3 of the EPC Agreement, or to pay Contractor's own
employees who are performing services with respect to the Project, and requested
that Owner fund such payments as advances to be deducted from Scheduled Payments
that would otherwise be made by Owner to Contractor under the EPC Agreement;

         WHEREAS, in order that Contractor would continue to perform work under
the EPC Agreement, Owner, Contractor, Parent and Raytheon entered into that that
certain Interim Agreement For Advance Payments, dated as of June 20, 2001 (as
amended, the "Interim Agreement"), whereby Owner and Raytheon agreed on a
limited basis to fund Contractor's costs;

         WHEREAS, Owner and Raytheon agreed to share the costs of funding the
Interim Agreement in that certain Funding Cap Agreement, dated as of June 20,
2001 (as amended, the "Funding Cap Agreement");

         WHEREAS, Contractor and Raytheon, in order to better define the terms
upon which Contractor will complete the Project, have entered into a Project
Completion Agreement, dated as of even date herewith (the "Project Completion
Agreement"), pursuant to which, among other things, Contractor agreed to
complete performance of the Project on a cost reimbursable basis, Raytheon
agreed to fund certain costs in connection with such performance, and Parent
agreed to guaranty the obligations of Contractor to Raytheon;

         WHEREAS, as a condition to entering into the Project Completion
Agreement, Contractor received from the Bankruptcy Court an order permitting
Contractor, among other things, (i) to enter into the Project Completion
Agreement, (ii) to reject the EPC Agreement, (iii) to assume and to assign to
Owner the outstanding subcontracts and purchase orders and other vendor
contracts relating to the Project set forth on Schedule 3.1.1 of the Project
Completion Agreement (the "Owner Assumed Contracts"); and (iv) to assume and




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assign to Raytheon the outstanding subcontracts and purchase orders and other
vendor contracts related to the Project set forth on Schedule 3.1.2 of the
Project Completion Agreement (the "Assigned Vendor Contracts") and Schedule
3.1.2.1 of the Project Completion Agreement (the "Non-Executory Contracts" and
together with the Assigned Vendor Contracts, the "Raytheon Assumed Contracts");
and

         WHEREAS, the parties hereto wish to clarify their respective rights and
obligations with respect to the Project under the EPC Agreement, the Guaranty,
and the Project Completion Agreement;

         NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto each hereby
agrees as follows:

         SECTION 1. CONTRACTING STRUCTURE.
                    ----------------------

         1.1 Consent of Owner. Owner hereby consents to the execution and
delivery by Raytheon and Contractor, and Owner acknowledges receipt of a copy
of, the Project Completion Agreement. Owner acknowledges and agrees that with
respect to the Project, all payments made, obligations undertaken or agreements
entered into by Raytheon in connection with the Project, are made, undertaken or
entered into, by Raytheon solely in Raytheon's capacity as Guarantor, as such
term is defined in the Guaranty.

         1.2 Affirmation of Prior Agreements.

             1.2.1 The Parties hereby agree that notwithstanding the Bankruptcy
        Filing of Contractor and Parent, or Contractor's rejection of the EPC
        Agreement pursuant to a Bankruptcy Court order, the EPC Agreement
        remains in full force and effect, and shall have continuing
        applicability, insofar as it defines (i) the obligations of Contractor
        guaranteed by Raytheon (the "Guaranteed Obligations"), (ii) Owner's
        rights against and obligations to Raytheon under the Guaranty, and (iii)
        Raytheon's rights against and obligations to Owner under the Guaranty.

             1.2.2 Raytheon hereby acknowledges, ratifies and confirms that the
        Guaranty is and shall remain in full force and effect as the binding
        obligation of Raytheon.

        1.3 Contractor Instructions. Owner hereby acknowledges and agrees that
it has received instructions from Contractor, the form of which is attached
hereto as Schedule 1.3, instructing Owner to make all unpaid payments,
originally payable under the EPC Agreement to Contractor, including any
milestone payments and retention amounts, when due and owing under the EPC
Agreement, to Raytheon, by wire transfer, at the account specified in such
instruction.

        1.4 Original Owner Payments. Subject to Raytheon's performance of the
Guaranteed Obligations, and in accordance with the other terms and conditions
set forth in the EPC Agreement, Owner shall pay the Contract Price (as defined
in the EPC Agreement), less the aggregate amount heretofore paid by Owner to
Contractor under the EPC Agreement and the Interim Agreement, and all Retainage
otherwise payable under the EPC Agreement to Contractor, to Raytheon, in each
case when due and payable in accordance with the terms of the EPC Agreement,
irrespective of Contractor's Bankruptcy Filing or Contractor's rejection of the
EPC Agreement pursuant to a Bankruptcy Court order. Without limiting the
generality of the foregoing, Owner shall make payments to Raytheon in accordance
with the Payment and Milestone Schedule (as defined in the EPC Agreement) and
such other payment procedures as are set forth in the EPC Agreement, including
Section 4.2.2 thereof, and heretofore applicable to Contractor, including,


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without limitation, making payments only upon receipt of a payment request,
substantially in the form of a Contractor Payment Request (as defined in the EPC
Agreement), submitted by Raytheon, or its designee. Owner agrees that, provided
Raytheon performs the Guaranteed Obligations in accordance with the terms and
conditions set forth in the EPC Agreement, Owner shall make such payments of the
Contract Price, in accordance herewith and with the terms of the EPC Agreement,
when due and owing, notwithstanding the continuation or termination of the
Project Completion Agreement and notwithstanding Raytheon's use of Contractor as
its completion agent.

        1.5 Funding Obligations under the Project Completion Agreement. Other
than as set forth in the Interim Agreement or the Funding Cap Agreement,
Raytheon shall be solely responsible for the payment of Contractor and any other
parties under the Project Completion Agreement, including all payments described
in Section 1.6 of this Agreement. Nothing in this section is intended to impair
Raytheon's right to seek reimbursement for such amounts from Contractor or
Parent.

        1.6 Raytheon's Performance of the Guaranteed Obligations. Raytheon shall
make, or shall cause Contractor to make, all payments, as and when due, and to
perform all obligations originally to be made or performed by Contractor under
the Owner Assumed Contracts (which have been assigned by Contractor to Owner in
accordance with the Project Completion Agreement), in each case, in accordance
with the terms thereof, without regard to any assignment of such Owner Assumed
Contracts by Contractor to Owner.

        1.7 Raytheon's Right to Terminate Project Completion Agreement. The
Parties acknowledge and agree that (i) Raytheon may, in its sole and absolute
discretion (subject to any terms imposed thereon by the Project Completion
Agreement) terminate the Project Completion Agreement and Contractor's services
thereunder, (ii) Raytheon may utilize any other completion agent to perform the
Guaranteed Obligations, and (iii) that nothing contained herein shall in any way
contradict, waive, modify, restrict or otherwise alter Raytheon's rights to make
such termination or replacement.

        1.8 Termination of Contractor under the EPC Agreement. It is
acknowledged and agreed that, as a result of Contractor's rejection of the EPC
Agreement pursuant to the order of the Bankruptcy Court, Owner's obligations to
pay Contractor under the EPC Agreement have terminated. Nothing contained in
this Agreement (including the foregoing sentence) shall, or shall be construed
to, (a) limit in any way Owner's rights against Contractor for default or breach
of the EPC Agreement, (b) limit in any way Raytheon's contractual or equitable
subrogation rights (including to payments from Owner) under the Guaranty, or (c)
limit Raytheon's rights to payments from Owner pursuant to Section 1.4 of this
Agreement.

        1.9 Discharge of Raytheon's Guaranteed Obligations. Owner acknowledges
that Raytheon's liability under the Guaranty for the Guaranteed Obligations
shall be discharged to the extent that Raytheon, or its designee or agent,
performs the Guaranteed Obligations.

        1.10 Owner Agreements with Contractor. With respect to the Project,
Owner shall not enter into any change order, amendment or modification of the
EPC Agreement or any other agreement whatsoever with Contractor, without the
prior written consent of Raytheon.

        1.11 Claims. Nothing contained herein, including the provisions of
Section 2, shall in any way waive, limit or alter any rights that Raytheon may
have to bring any claim against Owner by virtue of its contractual and/or
equitable subrogation to Contractor. Nothing contained herein shall in any way
waive, limit or alter Owner's rights to defend against any of Raytheon's claims
brought against Owner by virtue of Raytheon's contractual and/or equitable
subrogation to Contractor.


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        SECTION 2. Subcontracts and Purchase Orders.
                   ---------------------------------

        2.1 Owner Assumed Contracts; Appointment of Raytheon as Owner's Agent.
Owner hereby acknowledges that Contractor has assigned, and that Owner has
assumed, the Owner Assumed Contracts set forth on Schedule 3.1.1 of the Project
Completion Agreement. Owner hereby irrevocably appoints Raytheon as Owner's
agent with respect to each of the Owner Assumed Contracts assigned to Owner
pursuant to the Bankruptcy Court order, to exercise all of the rights and
perform all of the obligations of Owner under such Owner Assumed Contracts,
including the rights as assignee from Contractor of such Owner Assumed
Contracts. Raytheon hereby accepts such appointment and agrees to perform, or
cause Contractor or other Raytheon designee to perform, all of Owner's
obligations, and to exercise all of Owner's rights under, the Owner Assumed
Contracts in accordance with the terms thereof. As Owner's agent with respect to
the Owner Assumed Contracts, Raytheon shall be entitled to appoint Contractor or
any other Raytheon designee (subject to the acceptance by such designee) as
Raytheon's subagent, and/or to enter into a subcontract with any third party, to
assist Raytheon in the performance of its obligations as Owner's agent under
this Section 2.1; provided, however, that no such appointment of Contractor or
any other designee by Raytheon shall release Raytheon from any obligation it may
have under this Agreement or the Guaranty.

        2.2 Indemnity. Raytheon shall indemnify, defend and hold harmless,
Owner, its officers, directors and members and their respective officers,
directors and shareholders (each, an "Indemnified Party") from any and all
costs, expenses, losses and damages of any kind (collectively, "Losses"),
including reasonable attorney's fees, arising from or in connection with Owner's
obligations under the Owner Assumed Contracts and Raytheon's obligations under
this Agreement with respect to such Owner Assumed Contracts, including under
Section 2.1 of this Agreement; provided however, Raytheon shall not indemnify,
defend or hold any Indemnified Party harmless from and against any such Losses
if such Losses (i) arise from any Indemnified Party's willful misconduct or
gross negligence, or (ii) would have been incurred by Owner under the EPC
Agreement had Contractor fully performed thereunder, or (iii) arise from any
claim by Raytheon by virtue of its contractual and/or equitable subrogation to
Contractor under the Guaranty.

        2.3 Procedures.

             2.3.1 Raytheon may, at its option and at its expense, contest,
        defend and control the pursuit and defense of any claim with respect to
        which it may be liable to indemnify an Indemnified Party under the
        indemnities set forth in Section 2.2 and with respect to which the
        Indemnified Party is named as a party.

             2.3.2 If any Indemnified Party is named as a party to any
        proceeding, it shall have the right to retain counsel at its own expense
        to advise it with respect to such contest and defense, and, Raytheon
        shall (x) keep the Indemnified Party and its counsel reasonably informed
        as to the progress of such contest and defense; (y) to the extent
        reasonably practicable, give the Indemnified Party and its counsel the
        opportunity to review and comment in advance on all written submissions
        and filings relevant to the claim; and (z) consider in good faith any
        reasonable suggestions made by the Indemnified Party or its counsel or
        the request by the Indemnified Party and its counsel to submit
        documentation or attend those portions of any meetings and proceedings
        that related to the claim.

        2.4 No Fiduciary Duties. Raytheon shall perform, or have performed,
Owner's obligations under the Owner Assumed Contracts, solely pursuant to its
obligations under the Guaranty, and notwithstanding anything to the contrary


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contained herein, Raytheon shall not have, or be deemed to have, any fiduciary
or other duties associated with an agency relationship to Owner beyond those
expressly set forth in the Guaranty or herein.

        2.5 Performance under the Project Completion Agreement. Owner hereby
acknowledges that performance by Raytheon, or its designees of Owner's
obligations under the Owner Assumed Contracts (including by Contractor pursuant
to the Project Completion Agreement) shall constitute performance of Raytheon's
obligations under the Guaranty, to the extent so performed by Raytheon or its
designee. Nothing contained in this Section 2.5 shall, or shall be deemed to,
limit Raytheon's obligations to the Owner under the Guaranty.

        2.6. Raytheon Assumed Contracts; Waiver of Assignment. Owner and
Raytheon hereby acknowledge and agree that Contractor has assigned, and Raytheon
has assumed, the Raytheon Assumed Contracts, pursuant to an order of the
Bankruptcy Court. Upon completion of the Project, or as otherwise set forth in
the EPC Agreement, to the extent requested to do so by Owner, Raytheon shall use
its commercially reasonable efforts to assign all right, title and interest in
and to the Raytheon Assumed Contracts, and all benefits thereunder, to Owner.
Provided that Raytheon shall have used its commercially reasonable efforts to
effect an assignment of the Raytheon Assumed Contracts to Owner in accordance
with the foregoing sentence, then, notwithstanding anything to the contrary
contained in the EPC Agreement, the Guaranty, this Agreement, or otherwise,
Raytheon shall not be liable for (or required to indemnify Owner for costs and
expenses relating to) any failure to effect such assignment, or any costs,
expenses, damages, losses or liabilities arising in connection therewith.

        SECTION 3. Milestones Achieved.
                   --------------------

        3.1 Milestones and Payments. Raytheon acknowledges that Owner has (i)
previously paid Contractor Payment and Milestone Schedule payments 1 through 23
and (ii) advanced funds in the amount of $17,500,000 to Contractor pursuant to
the Interim Agreement.

        3.2 Retainage. Raytheon agrees that it shall not exercise any right it
may have under the proviso in the first sentence of Section 4.2.4 of the EPC
Agreement until January 1, 2002.

        3.3 Prepayment Discount. In accordance with the provisions of Section
2.11 of the EPC Contract Prepayment Agreement, dated as of March 14, 2000,
between Owner and Contractor (as successor in interest to Raytheon Engineers &
Constructors, Inc.) (the "Prepayment Agreement"), the Parties agree that the
aggregate additional amount that is due to Contractor in respect of Payment and
Milestone Schedule payments 21 through 31 is $3,022,934.00, and that such amount
shall be paid to Raytheon on a pro-rata basis across the remaining milestone
payments in accordance with Schedule 3.3 attached hereto.

        3.4 Project Manager. The Parties hereby agree that Raytheon shall
designate in writing a person to be treated as the Project Manager (as that term
is defined in the EPC Agreement), and that the foregoing designation shall
satisfy Contractor's obligations to Owner set forth in Section 2.1.4 of the EPC
Agreement. Raytheon hereby appoints David Dickman as the Project Manager.

        SECTION 4. Representations and Warranties.
                   -------------------------------

Each of Owner and Raytheon hereby represents and warrants that:

        4.1 Corporate Action. It has all necessary limited liability company or
corporate, as the case may be, power and authority to execute and deliver this
Agreement; the execution and delivery of this Agreement has been duly authorized
by all necessary action on its part; and this Agreement has been duly and
validly executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms except as may be


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limited by applicable bankruptcy or other laws affecting the rights of creditors
generally and applicable equitable principles; and

        4.2 Approvals. No approval or consent of any third party is necessary
for the execution and delivery by it of this Agreement or for the validity or
enforceability thereof.

        SECTION 5. Miscellaneous.
                   --------------

        5.1 Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the law of the State of New York.

        5.2 Headings. Headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.

        5.3 Counterparts. This Agreement may be executed in any number of
counterparts, which when so executed and delivered shall constitute one and the
same instrument.

        5.4 Amendments. No change, amendment or modification of this Agreement
shall be valid or binding upon the Parties unless such change, amendment or
modification shall be in writing and duly executed by each of Raytheon and
Owner. Nothing in this Agreement express or implied is intended or shall be
construed to confer upon or to give any person, firm or corporation, except the
Parties hereto, any rights or remedies under or by reason of this Agreement.

        5.5 Waiver of Jury Trials. Each Party hereto hereby waives its rights to
a jury trial with respect to any action or claim arising out of any dispute in
connection with this Agreement.

        5.6 Capitalized Terms. Capitalized terms used but not defined herein
shall have the meanings specified in the EPC Agreement.

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         IN WITNESS WHEREOF, each Party hereto has caused this Owner/Guarantor
Supplemental Agreement to be executed by its authorized representative as of the
date first written above.


                                      AES RED OAK, L.L.C. ("Owner")



                                      By: /s/ A.W. Bergeron
                                         ---------------------------------------
                                         Name: A.W. Bergeron
                                         Title: Plant Manager


                                      RAYTHEON COMPANY ("Raytheon")



                                      By: /s/ Timothy R. Montgomery
                                         ---------------------------------------
                                         Name: Timothy R. Montgomery
                                         Title: Authorized Person














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