Document:

<PAGE>

                                                                   EXHIBIT 10.QQ

                                                               EXECUTION VERSION

                              ASSIGNMENT AGREEMENT

         This ASSIGNMENT AGREEMENT, dated December 20, 2002, (this "Assignment
Agreement"), is by and among POWER CONTRACT FINANCE, L.L.C., a Delaware limited
liability company ("PCF"), COGEN TECHNOLOGIES NJ VENTURE, a New Jersey general
partnership (the "Bayonne Venture"), Tevco/Mission Bayonne Partnership, a
Delaware general partnership ("Tevco/Mission"), CPN Bayonne, L.L.C., a Delaware
limited liability company ("CPN Bayonne"), EAST COAST POWER Bayonne GP, L.L.C.,
a Delaware limited liability company ("Bayonne GP"), TM Bayonne, L.L.C., a
Delaware limited liability company ("TM Bayonne"), Bergen Point Energy Company,
L.L.C., a Delaware limited liability company ("Bergen Point" and, together with
the Bayonne Venture, Tevco/Mission, CPN Bayonne, Bayonne GP, and TM Bayonne, the
"Bayonne Assignors"), East Coast Power L.L.C., a Delaware limited liability
company ("ECP"), Bonneville Pacific Corporation, a Delaware corporation ("BPC"),
and Mesquite Investors, L.L.C., a Delaware limited liability company
("Mesquite") (PCF, the Bayonne Assignors, ECP, BPC and Mesquite each
individually a "Party" and collectively the "Parties").

                              W I T N E S S E T H:

         WHEREAS, the Bayonne Venture is a party with Jersey Central Power &
Light Company, a New Jersey corporation ("JCP&L"), to the Agreement for Purchase
of Electric Power, dated October 29, 1985, as amended by the First Amendment
thereto, dated September 5, 1986, and the Second Amendment thereto, dated August
15, 1988 (as so amended, the "Original Bayonne PPA"), whereby the Bayonne
Venture sells generating capacity and associated energy to JCP&L from the
Bayonne Venture's cogeneration facility in Bayonne, New Jersey;

         WHEREAS, the governing body of the Bayonne Venture has adopted
resolutions approving the distribution of the Bayonne Venture's entire right,
title, and interest in and to the Original Bayonne PPA (the "Bayonne Assigned
Interest") to its direct parents, Tevco/Mission, CPN Bayonne, and Bayonne GP
(the distributions described in this recital, collectively, the "First Bayonne
Distribution");

         WHEREAS, the governing body of Tevco/Mission has adopted resolutions
approving the distribution of Tevco/Mission's entire right, title, and interest
in and to the Original Bayonne PPA to its direct parents, TM Bayonne and Bergen
Point (the distributions described in this recital, collectively, the "Second
Bayonne Distribution");

         WHEREAS, the governing body of each of TM Bayonne, Bergen Point, CPN
Bayonne, and Bayonne GP has adopted resolutions approving the distribution of TM
Bayonne's, Bergen Point's, CPN Bayonne's, and Bayonne GP's, as applicable,
entire right, title, and interest in and to the Original Bayonne PPA to its
direct parent, ECP (the distributions described in this recital, collectively,
the "Third Bayonne Distribution");

         WHEREAS, the governing body of ECP has adopted resolutions approving
the transfer of ECP's entire right, title, and interest in and to the Original
Bayonne PPA to its direct

<PAGE>

parents, BPC and Mesquite (the transfer described in this recital, collectively,
the "ECP Transfer");

         WHEREAS, BPC and Mesquite have agreed to assume certain debt
obligations of ECP that are owed to El Paso Merchant Energy North America
Company, a Delaware corporation;

         WHEREAS, the governing body of each of BPC and Mesquite has adopted
resolutions approving the contribution of BPC's and Mesquite's, as applicable,
entire right, title, and interest in and to the Original Bayonne PPA to its
direct subsidiary, PCF (the contributions described in this recital,
collectively, the "BPC/Mesquite Contribution");

         WHEREAS, Article 19 of the Original Bayonne PPA permits Bayonne
Venture, the seller under the Original Bayonne PPA, to assign its rights and
obligations thereunder subsequent to a prior written consent of JCP&L, the buyer
under the Original Bayonne PPA (the "Consent"); and

         WHEREAS, in order to give effect to the distributions and contributions
approved in the above-described resolutions, the Bayonne Venture desires to
assign and convey to PCF, and PCF desires to acquire from the Bayonne Venture,
the Bayonne Venture's entire right, title, and interest in and to the Original
Bayonne PPA;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and for good and valuable consideration, the receipt
and substantiality of which are hereby acknowledged, the Parties hereto agree as
follows:

         1. EFFECTIVE DATE. This Assignment Agreement, and the assignments,
transfers and distributions hereunder, shall be effective as of the earliest
date and time ("Effective Date") when all of the following are satisfied: (a) an
effective Consent is received by PCF; (b) all of the Conditions Precedent in
Article III, Section B of the Amended and Restated Power Purchase Agreement
between JCP&L and PCF dated as of February 27, 2002 have been satisfied or
waived with the exception of Art. III(B)(vii), which pertains to the
effectiveness of this Assignment Agreement; and (c) PCF delivers to BPC and
Mesquite a certification that it has accepted this assignment.

         2. TRANSFER AND ASSUMPTION. From and after the Effective Date, the
Bayonne Venture hereby irrevocably grants, conveys, assigns, transfers, and sets
over unto PCF all of the Bayonne Venture's rights, title, interest, powers,
privileges, remedies, obligations and duties in, to, under and in respect of the
Original Bayonne PPA, free and clear of all Encumbrances, which each of the
Bayonne Assignors, ECP, BPC, and Mesquite acknowledges and agrees that such
assignment is deemed to effect the First Bayonne Distribution, the Second
Bayonne Distribution, the Third Bayonne Distribution, the ECP Transfer, and the
BPC/Mesquite Contribution, and PCF hereby assumes all of the rights, title,
interest, powers, privileges, remedies, obligations and duties of the Bayonne
Venture under the Original Bayonne PPA.

                                        2
<PAGE>

         3. REPRESENTATIONS AND WARRANTIES.

         (a) Each of the Bayonne Assignors, ECP, BPC, and Mesquite (each, an
"Assigning Party") hereby represents and warrants, as of the date hereof and the
Effective Date, to PCF that:

                  (i) it is duly organized, validly existing, and in good
         standing under the laws of its jurisdiction of organization and is in
         good standing in all jurisdictions where necessary with respect to its
         business or properties and has all requisite power and authority to
         conduct its business, to own its properties, and to execute, deliver,
         and perform its obligations under this Assignment Agreement;

                  (ii) the execution, delivery, and performance by such
         Assigning Party of this Assignment Agreement have been duly authorized
         by all necessary action, and do not and will not (A) require any
         consent or approval of its board of directors, shareholders, partners,
         members, or any other person or entity that has not been obtained, (B)
         violate any provision of its organizational documents or any law, rule,
         regulation, order, writ, judgment, injunction, decree, or award having
         applicability to it, or (C) result in a breach of or constitute a
         default or result in any Encumbrance on the Original Bayonne PPA or the
         Bayonne Assigned Interest, under any agreement relating to the
         management of its affairs or any indenture or loan or credit agreement
         or other agreement, lease, or instrument to which it is a party or by
         which it or its properties may be bound or affected;

                  (iii) this Assignment Agreement has been duly executed and
         delivered by such Assigning Party and is in full force and effect and
         constitutes the legal, valid, and binding contractual obligation of
         such Assigning Party, enforceable against such Assigning Party in
         accordance with its terms;

                  (iv) no consent, license, approval, or authorization of, or
         other action by, or any notice or filing with, any Governmental Entity
         or any other person or entity is necessary in connection with the
         execution, delivery, and performance by such Assigning Party of this
         Assignment Agreement, other than those that have been duly obtained and
         that are currently in full force and effect;

                  (v) there is no pending or, to such Assigning Party's
         knowledge on the date hereof, threatened, action or proceeding
         affecting such Assigning Party before any court, governmental agency,
         regulatory body, or arbitrator that could affect its ability to perform
         its obligations under, or that purports to affect the legality,
         validity, or enforceability of, this Assignment Agreement or the
         Original Bayonne PPA;

                  (vi) to such Assigning Party's knowledge on the date hereof,
         there exists no event or condition that constitutes a default, or that
         would, with the giving of notice or lapse of time, or both, constitute
         a default, under this Assignment Agreement or the Original Bayonne PPA,
         and, with respect to the Original Bayonne PPA, no Assigning Party has
         received any notice of termination, cancellation, breach or default
         thereunder;

                                        3

<PAGE>

                  (vii) such Assigning Party has duly performed, complied with,
         and fulfilled all covenants, agreements, and conditions contained in
         this Assignment Agreement required to be performed or complied with by
         it on or before the date hereof, and this Assignment Agreement, as of
         the date hereof, is in full force and effect and has not been amended,
         and none of such Assigning Party's rights under this Assignment
         Agreement have been waived;

                  (viii) the Assigning Parties have filed or caused to be filed,
         or will file or cause to be filed, all tax returns required to be
         filed, with respect to taxes pertaining to the Original Bayonne PPA or
         the Bayonne Assigned Interest and all taxes shown on such tax returns
         have been paid, such tax returns are true, accurate and complete in all
         material respects, and there are no tax liens on the Original Bayonne
         PPA or the Bayonne Assigned Interest;

                  (ix) immediately prior to the Effective Date, the Original
         Bayonne PPA is in full force and effect and constitutes the legal,
         valid, and binding contractual obligation of the parties thereto,
         enforceable against such parties in accordance with its terms;

                  (x) the Bayonne Assigned Interest constitutes all of the
         right, title, interest, powers, privileges, remedies, obligations and
         duties in, to, under and in respect of the Original Bayonne PPA other
         than those of JCP&L; and

                  (xi) as of the Effective Date PCF will receive, all of the
         rights and benefits of the Bayonne Venture under the Original Bayonne
         PPA free and clear of all Encumbrances.

         (b) (i) The Bayonne Venture represents and warrants that, immediately
prior to the Effective Date, it has good and marketable title to the Bayonne
Assigned Interest, free and clear of all Encumbrances.

             (ii) Each of the Bayonne Assignors, ECP, BPC, and Mesquite
represents and warrants that, upon the Effective Date, PCF will acquire good and
marketable title to the Bayonne Assigned Interest, free and clear of all
Encumbrances.

         (c) PCF represents and warrants that this Assignment Agreement has been
duly and validly executed and delivered by PCF and constitutes a valid and
binding agreement of PCF, enforceable against PCF in accordance with its terms.

         4. FURTHER REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS. Each of the
Bayonne Assignors (other than the Bayonne Venture), ECP, BPC, and Mesquite
agrees that it shall not at any time (a) exercise the legal authority (i) to
control or direct the control of the seller under the Original Bayonne PPA or
(ii) to make any sales of electric capacity or energy under the Original Bayonne
PPA or (b) file the Original Bayonne PPA as a rate filing with the Federal
Energy Regulatory Commission.

                                        4
<PAGE>

         5. ADDITIONAL DEFINITIONS. Capitalized terms used but not defined
herein shall have the respective meanings ascribed to them in the Purchase and
Sale Agreement dated as of November 5, 2002, among Mesquite, BPC and Morgan
Stanley Capital Group Inc.

         6. BINDING EFFECT. This Assignment Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and
assigns.

         7. GOVERNING LAW. This Assignment Agreement shall be governed by and
construed in accordance with the law of the State of New York without giving
effect to the principles thereof relating to conflicts of law except Section
5-1401 of the New York General Obligations Law.

         8. FULL FORCE AND EFFECT. Except as provided in this Assignment
Agreement, all transactions under the Original Bayonne PPA, as assigned
hereunder, shall remain in full force and effect.

         9. ENTIRE AGREEMENT. This Assignment Agreement, including all
Schedules, Exhibits and attachments hereto, constitutes the entire agreement and
understanding of the Parties with respect to the subject matter hereof and
supercedes all oral communications and prior writings with respect hereto and
thereto.

         10. COUNTERPARTS. This Assignment Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument.

         11. AMENDMENTS AND WAIVERS. This Assignment Agreement may be amended or
any of its provisions waived only by a written instrument signed by the Parties.

         12. FURTHER ASSURANCES. Each party hereto agrees to execute and deliver
such documents and take such other actions as any other party hereto may from
time to time reasonably request to further evidence the transactions
contemplated hereby.

         13. JURISDICTION. Each party hereto hereby irrevocably and
unconditionally:

         (a) submits for itself and its property in any legal action or
proceeding relating to this Assignment Agreement, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of the United
States for the Southern District of New York, and any appellate courts thereof;

         (b) consents that any such action or proceeding may be brought in such
courts and waives (i) any right to trial by jury and (ii) any objection that it
may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;

         (c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the address of the
party to be served set forth opposite such

                                        5
<PAGE>

party's name on Schedule 1 hereto or to such other address as may be hereafter
notified by the respective Parties hereto;

         (d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to sue
in any other jurisdiction; and

         (e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section 13(e), any special, exemplary, punitive, or consequential damages.

           [The remainder of this page was left blank intentionally.]

                                        6

<PAGE>

         IN WITNESS WHEREOF, the Parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the day and year first above
written.

                                           COGEN TECHNOLOGIES NJ VENTURE

                                           By EAST COAST POWER BAYONNE GP,
                                              L.L.C.,
                                              its general partner

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

                                           POWER CONTRACT FINANCE, L.L.C.

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

                                           TEVCO/MISSION BAYONNE
                                           PARTNERSHIP

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

                                           CPN BAYONNE, L.L.C.

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

<PAGE>

                                           EAST COAST POWER BAYONNE GP, L.L.C.

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

                                           TM BAYONNE, L.L.C.

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

                                           BERGEN POINT ENERGY COMPANY, L.L.C.

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

                                           EAST COAST POWER, L.L.C.

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

                                           BONNEVILLE PACIFIC CORPORATION

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

<PAGE>

                                           MESQUITE INVESTORS, L.L.C.

                                           By EL PASO CHAPARRAL
                                              MANAGEMENT, L.P.,
                                              its manager

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

<PAGE>

                                                                      Schedule 1

                                Notice Addresses

<Table>
<Caption>
<S>                                                     <C>
To Bayonne Venture:                                     To Bergen Point:

Cogen Technologies NJ Venture                           Bergen Point Energy Company, L.L.C.
1001 Louisiana Street                                   1001 Louisiana Street
Houston, TX 77002                                       Houston, TX 77002
Attention: General Counsel                              Attention: General Counsel
           JEDI Bayonne GP, L.L.C.

To PCF:                                                 To Tevco/Mission:

Power Contract Finance, L.L.C.                          TEVCO/Mission Bayonne Partnership
1001 Louisiana Street                                   1001 Louisiana Street
Houston, TX 77002                                       Houston, TX 77002
Attention: General Counsel                              Attention: General Counsel
                                                                   TM Bayonne, L.L.C.

To CPN Bayonne:                                         To ECP:

CPN Bayonne, L.L.C.                                     East Coast Power L.L.C.
1001 Louisiana Street                                   1001 Louisiana Street
Houston, TX 77002                                       Houston, TX 77002
Attention: General Counsel                              Attention: General Counsel

To Bayonne GP:                                          To BPC:

East Coast Power Bayonne GP, L.L.C.                     Bonneville Pacific Corporation
1001 Louisiana Street                                   1001 Louisiana Street
Houston, TX 77002                                       Houston, TX 77002
Attention: General Counsel                              Attention: General Counsel

To TM Bayonne:                                          To Mesquite:

TM Bayonne, L.L.C.                                      Mesquite Investors, L.L.C.
1001 Louisiana Street                                   1001 Louisiana Street
Houston, TX 77002                                       Houston, TX 77002
Attention: General Counsel                              Attention: General Counsel
</Table><PAGE>

                                                                   EXHIBIT 10.RR

                                                                  EXECUTION COPY

                                                                 ---------------
                                                                     (STAMP)
                                                                    RECEIVED
                                                                   JAN 19 2001
                                                                 COGEN/JAMESBURG
                                                                 ---------------

                      OPERATION AND MAINTENANCE AGREEMENT

                                 By and Between

                             JEDI LINDEN NB, L.L.C.,
                                   AS "OWNER"

                                       AND

                      GENERAL ELECTRIC INTERNATIONAL, INC.,
                                  AS "OPERATOR"

                                 January 10, 2000
                                            (2001)

<PAGE>

                                TABLE OF CONTENTS
<Table>
<Caption>
                                     Section                               Page
                                     -------                               ----
<S>                                                                         <C>
I. DEFINITIONS............................................................    2
        Affiliate ........................................................    2
        Agreement ........................................................    2
        Annual Fee Adjustment Amount or "AFAA" ...........................    2
        Annual Operating Plan ............................................    2
        Applicable Adjustment Amount .....................................    2
        Approved Annual Operating Plan ...................................    2
        Approved O&M Plan ................................................    2
        Approved Operating Budget ........................................    2
        Base Index .......................................................    2
        Bayonne Approved Operating Budget ................................    2
        Bayonne Facility .................................................    2
        Bayonne O&M Agreement ............................................    2
        Bayway ...........................................................    2
        Camden Approved Operating Budget .................................    2
        Camden Facility ..................................................    3
        Camden Q&M Agreement .............................................    3
        Capital Improvements .............................................    3
        Cogen ............................................................    3
        Confidential Information .........................................    3
        Consumables ......................................................    3
        CPI Adjusted Payments ............................................    3
        Defaulting Party .................................................    3
        Default Rate .....................................................    3
        Direct Costs .....................................................    3
        Electricity ......................................................    3
        Energy Services Agreement ........................................    3
        EPC Agreement ....................................................    3
        Equipment ........................................................    3
        Event of Default .................................................    4
        Execution Date ...................................................    4
        Existing Plant ...................................................    4
        Existing Plant O&M Agreement .....................................    4
        Existing Plant Approved Operating Budget .........................    4
        Facility .........................................................    4
        Facility Data ....................................................    4
        Facility Manager .................................................    4
        Force Majeure ....................................................    4
        Forced Outage ....................................................    4
        Fuel .............................................................    4
        GE ...............................................................    4
        GEII O&M Personnel ...............................................    4
        GEII Q&M Personnel Overhead ......................................    5
</Table>

                                       i
<PAGE>

<Table>
<Caption>
                                     Section                                Page
                                     -------                                ----
<S>                                                                         <C>
        Granite ..........................................................    5
        Ground Lease .....................................................    5
        GT MW ............................................................    5
        Hazardous Materials ..............................................    5
        HP Steam .........................................................    5
        Initial Support Stage ............................................    5
        IP Steam .........................................................    5
        Key Personnel ....................................................    5
        Key Regional Office Personnel ....................................    5
        kW ...............................................................    5
        kWh ..............................................................    5
        Lender ...........................................................    5
        Major Maintenance Overhaul .......................................    5
        Mobilization Stage ...............................................    6
        Mobilization Stage Operating Budget ..............................    6
        Mobilization Stage Operating Plan ................................    6
        Mobilization Stage Plan ..........................................    6
        NEPCO ............................................................    6
        Non-Defaulting Party .............................................    6
        O&M Fee ..........................................................    6
        O&M Staffing Plan ................................................    6
        O&M Plan .........................................................    6
        Operating Budget .................................................    6
        Operating Procedures .............................................    6
        Operator .........................................................    6
        Operator Confidential Information ................................    6
        Operator Indemnitee ..............................................    6
        Operator Personnel ...............................................    6
        Operator Personnel Overhead ......................................    6
        OSHA .............................................................    6
        Overhead Percentage Rate .........................................    6
        Own ..............................................................    6
        Owner Confidential Information ...................................    6
        Owner Indemnitees ................................................    7
        PJM Net Capability Verification Test .............................    7
        Plant Manager ....................................................    7
        Project Year .....................................................    7
        Prudent Utility Practices ........................................    7
        PSE&G Interconnection Agreement ..................................    7
        PURPA ............................................................    7
        Qualifying Cogeneration Facility .................................    7
        Rated Capacity ...................................................    7
        Refinery .........................................................    7
        Regional Office ..................................................    7
        Reimbursable Costs ...............................................    7
        Related Agreements ...............................................    8
</Table>

                                       ii

<PAGE>

<Table>
<Caption>
                                     Section                                Page
                                     -------                                ----
<S>                                                                         <C>
        Scheduled Outages ................................................    8
        Shared Facilities Agreement ......................................    8
        Site .............................................................    8
        Special Improvements .............................................    8
        Sublease .........................................................    8
        Test Plan ........................................................    8
        Tosco ............................................................    8
        Turnover Date ....................................................    8
        2003 Termination Fee .............................................    8
        Unit Availability ................................................    8
        Unscheduled Maintenance ..........................................    8
        W-2 Wages ........................................................    8
        Work .............................................................    8
II. RESPONSIBILITIES OF OPERATOR .........................................    9
        2.1     Generally ................................................    9
        2.2     Compliance with Related Agreements .......................   14
        2.3     QF Status ................................................   14
        2.4     Annual Operating Plan ....................................   14
        2.5     Monthly Summary ..........................................   15
        2.6     Emergencies ..............................................   15
        2.7     Inspections ..............................................   16
        2.8     Operating Procedures and Training ........................   16
        2.9     Facility Turnover ........................................   17
        2.10    Initial Support Stage ....................................   17
        2.11    Mobilization Stage .......................................   18
        2.12    Limited Authority ........................................   19
III. RESPONSIBILITIES OF OWNER ...........................................   19
        3.1     Services, Operation, Obligations .........................   19
        3.2     Payments .................................................   20
        3.3     Right to Perform Upon Operator's Default .................   20
IV. OPERATING COSTS AND EXPENSES .........................................   20
        4.1     Procedure for Incurring Costs ............................   20
        4.2     Procedure for Payment of Direct Costs ....................   21
        4.3     Limitation on Ability to Incur Direct Costs ..............   21
        4.4     Payment for Special Improvements .........................   21
        4.5     Payment for Unscheduled Maintenance ......................   21
        4.6     Payment for Major Maintenance Overhaul ...................   22
        4.7     Payment for Capital Improvements .........................   22
        4.8     Wage Increases in Excess of CPI ..........................   22
V. PAYMENTS TO OPERATOR ..................................................   22
        5.1    Initial Support Fee .......................................   22
        5.2    Mobilization Stage Fee ....................................   22
        5.3    O&M Fee ...................................................   22
</Table>

                                      iii

<PAGE>

<Table>
<Caption>
                                     Section                                Page
                                     -------                                ----
<S>                                                                         <C>
        5.4    Reimbursable Costs ........................................   23
        5.5    CPI Adjustment ............................................   26
        5.6    Procedure for Payment of Reimbursable Costs ...............   26
        5.7    Late Payments .............................................   26

VI. FACILITY PERFORMANCE, LIQUIDATED DAMAGES AND BONUS ...................   26
        6.1    Annual Fee Adjustment Amount ..............................   26
        6.2    Quarterly Meeting .........................................   31
        6.3    Partial Project Year ......................................   31
        6.4    Payment of Annual Fee Adjustment Amount ...................   31
        6.5    Application of CPI Adjustment .............................   31
        6.6    Change in Conditions or Circumstances .....................   31
        6.7    Employee Bonuses ..........................................   32

VII. WARRANTY; CORRECTION OF DEFECTS .....................................   32
        7.1    Warranty ..................................................   32
        7.2    Consequence of Breach .....................................   32
        7.3    Vendor Warranties .........................................   32
        7.4    Exclusions ................................................   32

VIII. TERM ...............................................................   32

IX. TERMINATION ..........................................................   33
        9.1    Event of Default ..........................................   33
        9.2    Termination Upon Breach ...................................   33
        9.3    Termination for Insolvency ................................   34
        9.4    Owner's Additional Remedies ...............................   34
        9.5    Transfer of Operations Upon Termination ...................   34
        9.6    Condition of Facility Upon Termination ....................   35
        9.7    Survival of Obligations ...................................   35

X. INSURANCE .............................................................   35
       10.1    Operator Insurance Coverage ...............................   35
       10.2    Owner Insurance Coverage ..................................   36
       10.3    Form and Content of Insurance .............................   38
       10.4    Additional Requirements ...................................   38

XI. NOTIFICATIONS ........................................................   40

XII. ASSIGNMENT; LENDERS RIGHTS ..........................................   41
       12.1    Assignment ................................................   41
       12.2    Lenders Rights ............................................   41
       12.3    Estoppel Certificate ......................................   43
       12.4    Legal Opinion .............................................   43

XIII. INDEMNIFICATION ....................................................   43
       13.1    Operator Indemnity ........................................   43
       13.2    Owner Indemnity ...........................................   44
</Table>

                                       iv

<PAGE>

<Table>
<Caption>
                                     Section                                Page
                                     -------                                ----
<S>                                                                         <C>
       13.3    No Limitation .............................................   44

XIV. REPRESENTATIONS AND WARRANTIES ......................................   44
       14.1    Representations and Warranties of Owner ...................   44
       14.2    Representations and Warranties of Operator ................   45

XV. BOOKS, RECORDS AND REPORTS ...........................................   45
       15.1    Books and Records .........................................   45
       15.2    Reports ...................................................   46

XVI. FORCE MAJEURE........................................................   46
       16.1    Force Majeure .............................................   46
       16.2    Effect of Force Majeure ...................................   47
       16.3    Extended Force Majeure ....................................   47
       16.4    Payments to Operator During an Event of Force Majeure .....   47

XVII. LIMITATION OF LIABILITY ............................................   48
       17.1    Operator ..................................................   48
       17.2    Owner .....................................................   48

XVIII. RESOLUTION OF DISPUTES ............................................   49
       18.1    Resolution by Parties .....................................   49
       18.2    Mediation by Expert .......................................   49
       18.3    Arbitration ...............................................   51
       18.4    Selection of Arbitrators ..................................   51
       18.5    Notice ....................................................   52
       18.6    Award .....................................................   52
       18.7    Survival ..................................................   52

XIX. CONFIDENTIALITY AND INTELLECTUAL PROPERTY ...........................   52
       19.1    Confidential Information ..................................   52
       19.2    Return of Confidential Information ........................   53
       19.3    Continuation of Confidentiality Obligations ...............   53
       19.4    Ownership of Confidentiality Information ..................   53
       19.5    Intellectual Property .....................................   54

XX. HAZARDOUS MATERIALS HANDLING .........................................   54

XXI. MISCELLANEOUS .......................................................   55
       21.1    Governing Law .............................................   55
       21.2    Severability ..............................................   55
       21.3    Entire Agreement ..........................................   55
       21.4    Amendments ................................................   55
       21.5    Waiver ....................................................   55
       21.6    Original and Counterparts .................................   55
       21.7    Independent Contractor ....................................   55
       21.8    Limited Recourse ..........................................   55
       21.9    Captions ..................................................   56
</Table>

                                       v

<PAGE>

<Table>
<Caption>
                                     Section                                Page
                                     -------                                ----
<S>                                                                         <C>
       21.10   Exhibits ..................................................   56
       21.11   Effectiveness of Agreement ................................   56

Exhibit A      Monthly O&M Report Format
Exhibit B      Unit Availability
Exhibit C      Assignment
Exhibit D      Consent and Agreement
Exhibit E      Recognition Agreement
</Table>

                                       vi

<PAGE>

                       OPERATION AND MAINTENANCE AGREEMENT

                  This Agreement is entered into this 10th day of January, 2001
(the "Execution Date"), by and between JEDI LINDEN NB, L.L.C., a Delaware
limited liability company ("Owner"), and General Electric International, Inc., a
corporation organized and existing under the laws of the State of Delaware
("Operator").

                                   WITNESSETH:

                  WHEREAS, Owner owns the Facility (as defined herein); and

                  WHEREAS, Owner and National Energy Production Corporation
("NEPCO") entered into that certain Engineering, Procurement and Construction
Agreement dated effective as of June 2, 2000 (the "EPC Agreement"), pursuant to
which NEPCO will provide turnkey services for the design and engineering of,
procurement for and construction and testing of the Facility in accordance, with
the terms thereof; and

                  WHEREAS the EPC Agreement provides that NEPCO will provide
certain training to the Operator and Operator's employees in the operation and
maintenance of the Facility prior to the Turnover Date; and

                  WHEREAS, Owner desires to engage the services of an entity
qualified and competent to operate and maintain the Facility commencing on the
Turnover Date; and

                  WHEREAS, Operator has represented that it is qualified and
capable to operate and maintain cogeneration facilities such as the Facility;
and

                  WHEREAS, Cogen Technologies Linden Venture, L.P. ("Cogen"), an
Affiliate of Owner owns an existing cogeneration facility (the "Existing Plant")
adjacent to the Facility and has contracted with Operator to operate and
maintain the Existing Plant;

                  WHEREAS, pursuant to the Shared Facilities Agreement between
Cogen and Owner, the operation and maintenance of the Facility and the Existing
Plant are to be coordinated;

                  WHEREAS, Owner desires to appoint Operator and Operator
desires to operate and maintain the Facility on and after the Turnover Date; and

                  WHEREAS, Owner and Operator desire to enter into this
Agreement in order to set forth their agreements relative to the training of
Operator and Operator's personnel prior to the Turnover Date and the operation
and maintenance of the Facility on and after the Turnover Date;

                  NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:

<PAGE>

                                       I.

                                   DEFINITIONS

                  The following definitions shall apply to this Agreement:

                  Affiliate shall mean any person or corporation or other entity
that, directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, another person or corporation or
entity including, without limitation, any affiliate of Seller as such term is
defined in the Energy Services Agreement. The term "control" with respect to any
entity means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such entity, whether
through the ownership of voting securities, by contract or otherwise.

                  Agreement shall mean this Operation and Maintenance Agreement,
including all exhibits attached hereto, as the same may be amended from time to
time in accordance herewith.

                  Annual Fee Adjustment Amount or "AFAA" shall, have the meaning
set forth in Section 6.1 hereof.

                  Annual Operating Plan shall have the meaning set forth in
Section 2.4(a) hereof.

                  Applicable Adjustment Amount shall have the meaning set forth
in Section 5.5 hereof.

                  Approved Annual Operating Plan shall have the meaning set
forth in Section 2.4(a) hereof.

                  Approved O&M Plan shall have the meaning set forth in Section
2.4(a) hereof.

                  Approved Operating Budget shall have the meaning set forth in
Section 2.4(a) hereof.

                  Base Index shall have the meaning set forth in Section 5.5
hereof.

                  Bayonne Approved Operating Budget shall mean an Approved
Operating Budget for the Bayonne Facility as set forth in Section 2.4 of the
Bayonne O&M Agreement.

                  Bayonne Facility shall mean the cogeneration plant owned by
Cogen Technologies NJ Venture located in Bayonne, New Jersey.

                  Bayonne O&M Agreement shall mean that certain Operation and
Maintenance Agreement dated as of June 6, 1997, by and between Cogen
Technologies NJ Venture and Operator relating to the Bayonne Facility, as may be
amended from time to time.

                  Bayway shall mean Bayway Refining Company, a Delaware
corporation.

                  Camden Approved Operating Budget shall mean an Approved
Operating Budget for the Camden Facility as set forth in Section 2.4 of the
Camden O&M Agreement.

                                       2
<PAGE>

                  Camden Facility shall mean the cogeneration plant owned by
Camden Cogen L.P. located in Camden, New Jersey.

                  Camden O&M Agreement shall mean that certain Operation and
Maintenance Agreement dated as of June 6, 1997, by and between Camden Cogen L.P.
and Operator, relating to the Camden Facility, as may be amended from time to
time.

                  Capital Improvements shall have the meaning set forth in
Section 2.1(2) hereof.

                  Cogen shall mean Cogen Technologies Linden Venture, L.P., a
Delaware limited partnership.

                  Confidential Information shall have the meaning set forth in
Section 19.1 hereof.

                  Consumables shall mean, collectively, all items consumed or
needing regular periodic replacement during operation and maintenance of the
Facility, including, but not limited to, spare parts, water treatment chemicals,
lubricants, office supplies, air filters, gaskets, hand tools, and all other
consumable materials and parts required for the normal operation of the
Facility, but not including Fuel and water.

                  CPI Adjusted Payments shall have the meaning set forth in
Section 5.5 hereof.

                  Defaulting Party shall have the meaning set forth in Section
9.2 hereof.

                  Default Rate shall mean the lesser of (i) the rate of interest
announced by The Chase Manhattan Bank, N.A., from time to time, at its principal
office located at 1 Chase Manhattan Plaza, New York, New York 10081 (or any
successor financial institution), as its prime commercial lending rate, plus 1%
or (ii) the maximum lawful nonusurious rate of interest that may be charged
under applicable law.

                  Direct Costs shall mean those costs incurred by Operator for
goods and services in connection with the operation and maintenance of the
Facility which are paid directly by Owner to the vendor of such goods and
services.

                  Electricity shall have the meaning ascribed to such term in
the Energy Services Agreement.

                  Energy Services Agreement shall mean that certain Energy
Services Agreement dated as of February 14, 2000 by and between Owner and Tosco
Refining, L.P., as may be amended from time to time.

                  EPC Agreement means that certain Fixed Price Engineering,
Procurement and Construction Agreement by and between Owner and National Energy
Production Corporation dated as of June 2, 2000, as may be amended from time to
time.

                  Equipment shall mean any and all materials, supplies,
equipment and facilities, of whatever nature, intended to become or which are a
part of the Facility.

                                       3
<PAGE>
                  Event of Default shall have the meaning set forth in Section
9.1 hereof.

                  Execution Date shall have the meaning set forth in the
preamble of this Agreement.

                  Existing Plant means the facility defined as the "Facility" in
the Existing Plant O&M Agreement.

                  Existing Plant O&M Agreement shall mean that certain Operation
and Maintenance Agreement dated as of June 6, 1997, by and between Cogen
Technologies Linden Venture, LP as "Owner" and Operator as "Operator," relating
to the Existing Plant, as may be amended from time to time.

                  Existing Plant Approved Operating Budget means an Approved
Operating Budget for the Existing Plant as set forth in Section 2.4 of the
Existing Plant O&M Agreement.

                  Facility shall mean (i) the approximately 172 megawatt natural
gas fired, cogeneration plant owned by Owner located on the Site for the
production and sale of electric power and steam, including all buildings,
interconnections, utilities and Equipment located on the Site, as defined in the
EPC Agreement, and other associated tools and equipment necessary for the
operation and maintenance thereof furnished by Owner and located on the Site and
(ii) the steam and other pipelines connecting the Facility to the Existing
Plant.

                  Facility Data shall mean all facility and equipment design
data pertaining to the Facility, including, without limitation, plant data
manuals, equipment user/maintenance manuals, facility drawings and system
descriptions, inspection reports and operating plans.

                  Facility Manager shall mean Operator's employee, who shall be
present on the Site during regular business hours on all business days to
oversee the operation, maintenance, inspection and repair of the Facility and
all parts thereof, and who shall be authorized to make decisions on behalf of
Operator. The Facility Manager shall serve as Operator's single point of contact
for all matters regarding the operation, maintenance, inspection and repair of
the Facility.

                  Force Majeure shall have the meaning set forth in Section 16.1
hereof.

                  Forced Outage shall mean an outage of the Facility which is
not a Scheduled Outage.

                  Fuel shall mean natural gas, distillate or any other fuel
suitable for operating the Facility.

                  GE shall mean General Electric Company, a New York
corporation.

                  GEII O&M Personnel shall mean all employees of Operator
involved in the performance of the Work, including, without limitation, all Key
Personnel, but expressly excluding the Operator Personnel.

                                       4
<PAGE>
                  GEII O&M Personnel Overhead shall have the meaning set forth
in Section 5.4 hereof.

                  Granite shall mean Granite Technical and Professional
Services, Inc., a wholly owned subsidiary of Operator.

                  Ground Lease shall mean that certain Ground Lease dated August
1, 1990, between Bayway, as "Lessor" therein, and Cogen Technologies, Linden
Venture, L.P., as "Lessee" therein, as amended from time to time.

                  GT MW shall have the meaning ascribed to it in Section 6.1(b)
hereof.

                  Hazardous Materials means any "hazardous substance" or
"petroleum" as defined in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.),
"hazardous materials," as defined in the Hazardous Materials Transportation Act,
as amended (49 U.S.C. Section 1801, et seq.), "hazardous wastes" as defined in
the Resource Conservation and Recovery Act, as amended (42 U.S.C. Section 9601,
et seq.), "toxic substances" as defined in the Toxic Substance Control Act as
amended (15 U.S.C. Section 2601 et seq.), "contaminants" as defined in the
Environmental Protection Act, R.S.O. 1990., C.E. 19, "toxic substances" as
defined in the Environmental Protection Act, S.C. 1991 c. 15.3, as amended and
in the regulations adopted, published, and promulgated pursuant thereto, or in
any other applicable legal requirements.

                  HP Steam shall have the meaning ascribed to it in Section
6.1(b) hereof.

                  Initial Support Stage shall have the meaning ascribed to it in
Section 2.10 hereof.

                  IP Steam shall have the meaning ascribed to it in Section
6.1(b) hereof.

                  Key Personnel shall mean the Key Regional Office Personnel,
the Facility Manager and all other personnel reporting directly to the Facility
Manager.

                  Key Regional Office Personnel shall mean the following
personnel who will be located in the Regional Office: the Environmental Health
and Safety engineer, the Human Resources Manager and such other personnel as
Owner may designate.

                  kW shall mean kilowatt.

                  kWh shall mean kilowatt-hour.

                  Lender shall mean any entity or entities providing Owner with
the construction, term, permanent or other debt or equity financing for the
Facility and/or the operation thereof and/or any entity or entities providing a
letter of credit or other security in connection with the financing of the
Facility and/or the operation thereof.

                  Major Maintenance Overhaul shall mean any overhaul or repair
of major components of the Equipment on a periodic basis which requires a
scheduled outage for a period of ten (10) or more days in any Project Year.

                                       5
<PAGE>

                  Mobilization Stage shall have the meaning set forth in Section
2.11 hereof.

                  Mobilization Stage Operating Budget shall have the meaning set
forth in Section 2.10(b) hereof.

                  Mobilization Stage Operating Plan shall have the meaning set
forth in Section 2.10(b) hereof.

                  Mobilization Stage Plan shall have the meaning set forth in
Section 2.10(b) hereof.

                  NEPCO means National Energy Production Corporation, a Delaware
corporation.

                  Non-Defaulting Party shall have the meaning set forth in
Section 9.2 hereof.

                  O&M Fee shall have the meaning set forth in Section 5.1
hereof.

                  O&M Staffing Plan shall have the meaning set forth in Section
2.10(a) hereof.

                  O&M Plan shall have the meaning set forth in Section 2.4(a)
hereof.

                  Operating Budget shall have the meaning set forth in Section
2.4(a) hereof.

                  Operating Procedures shall have the meaning set forth in
Section 2.8(a) hereof.

                  Operator shall have the meaning set forth in the preamble of
this Agreement.

                  Operator Confidential Information shall have the meaning set
forth in Section 19.1 hereof.

                  Operator Indemnitee shall have the meaning set forth in
Section 13.1 hereof.

                  Operator Personnel shall mean all employees of Granite
involved in the performance of the Work or, in the event that during the term of
this Agreement Granite ceases to provide personnel for performance of the Work,
then such personnel who perform the functions that were previously performed by
the employees of Granite.

                  Operator Personnel Overhead shall have the meaning
set forth in Section 5.2 hereof.

                  OSHA shall mean the Occupational Safety and Health
Administration.

                  Overhead Percentage Rate shall have the meaning set forth in
Section 5.4 hereof.

                  Own shall have the meaning set forth in the preamble of this
Agreement.

                  Owner Confidential Information shall have the meaning set
forth in Section 19.1 hereof.

                                       6
<PAGE>

                  Owner Indemnitees shall have the meaning set forth in Section
13.2 hereof.

                  Permitted Transferee shall mean (i) any Affiliate of Lender or
(ii) any other person or entity who succeeds to the rights and interests of
Lender under any mortgage.

                  PJM Net Capability Verification Test shall have the meaning
ascribed to it in Section 6.1(b) hereof.

                  Plant Manager shall mean the person designated by Owner,
pursuant to Section 3.1(4) hereof, to serve as Owner's administrative
representative at the Site.

                  Project Year shall mean any calendar year during the term of
this Agreement, provided that the First Project Year shall be deemed to begin on
the Turnover Date and extend through the next occurring December 31.

                  Prudent Utility Practices shall mean those practices, methods,
acts, techniques, standards and equipment, as changed from time to time, that
are then generally accepted by the electric utility industry and commonly used
in prudent electric utility engineering and operations to operate and maintain
equipment lawfully, safely, dependably and economically, and as would have been
(i) expected to accomplish the desired result in a manner consistent with
applicable laws, applicable governmental permits, reliability, safety,
environmental protection, economy and expediency and (ii) implemented using that
degree of skill, diligence and foresight which would reasonably and ordinarily
be expected from a skilled and experienced operator complying with all
applicable laws and engaged in the same time of undertaking, including, without
limitation, those established by the North American Electric Reliability
Council, as applicable to units of the size and service of the Facility.

                  PSE&G Interconnection Agreement shall mean that certain
agreement among Public Service Electric and Gas Company, Owner and Tosco dated
as of October 27, 2000, as may be amended from time to time.

                  PURPA shall mean the Public Utility Regulatory Policies Act of
1978 (U.S.C.A., Title 16, Section 824a-3, subsection (i), as amended, a law of
the United States of America.

                  Qualifying Cogeneration Facility shall have the meaning set
forth in PURPA.

                   Rated Capacity shall have the meaning set forth in Section
6.1(b) hereof.

                  Refinery shall mean the Bayway Refinery, owned by Bayway and
operated by Tosco.

                  Regional Office shall mean the office established by Operator
at a location designated by Owner for the sole purpose (and no others) of
administering and performing its obligations under (i) this Agreement, (ii) the
Existing Plant O&M Agreement, (iii) the Bayonne O&M Agreement and (iv) the
Camden O&M Agreement.

                  Reimbursable Costs shall have the meaning set forth in Section
5.4 hereof.

                                       7
<PAGE>

                  Related Agreements shall mean and include the Energy Services
Agreement, the Ground Lease, the Sublease between Cogen and Owner, all easements
used in connection with the Facility, the fuel supply agreements, the EPC
Agreement, the PSE&G Interconnection Agreement, the Shared Facilities Agreement
and Refinery safety and security regulations applicable to the Facility.

                  Scheduled Outages shall mean a planned outage of the Facility
or any portion thereof necessary for regular inspection and maintenance.

                  Shared Facilities Agreement means that certain Shared
Facilities and Coordinated Operation Agreement and Indemnity between Owner and
Cogen Technologies Linden Venture, L.P. dated as of June 1, 2000, as may be
amended from time to time.

                  Site shall mean the certain tract of land leased from Cogen
pursuant to the Sublease, which consists of part of a parcel of land located at
Railroad and Chemico Streets at Bayway's Bayway Facility in Linden, New Jersey,
upon which the Facility is constructed, such tract being more particularly
described in the Sublease and Ground Lease, together with easements appurtenant
thereto or used in connection therewith.

                  Special Improvements shall have the meaning set forth in
Section 4.4 hereof.

                  Sublease shall mean that certain sublease by and between Cogen
Technologies Linden Venture, L.P. d/b/a Cogen Technologies Linden Venture
Limited Partnership and JEDI Linden NB, L.L.C. dated as of June 1, 2000, as may
be amended from time to time.

                  Test Plan shall have the meaning set forth in Section 6.1(b)
hereof.

                  Tosco means Tosco Refining, L.P., a Delaware limited
partnership.

                  Turnover Date shall have the meaning ascribed to it in Section
2.9 hereof.

                  2003 Termination Fee shall have the meaning set forth in
Article VIII hereof.

                  Unit Availability shall have the meaning used in Section
6.1(a) hereof.

                  Unscheduled Maintenance shall mean all maintenance, repair and
replacement requirements of the Facility during each Project Year which are not
contemplated in the Approved Annual Operating Plan, or any approved revision
thereof, for each such Project Year.

                  W-2 Wages shall mean the amount listed in box 1 on Internal
Revenue Service Form W-2, or if such form ceases to be used, then the sum of
such amounts as would have been included in the calculation of the number to be
inserted in such box 1 if such form were still in use.

                  Work shall mean all obligations, services, duties and
responsibilities assigned to or agreed to be undertaken by Operator and its
subcontractors pursuant to this Agreement.

                                       8
<PAGE>
                                       II.
                          RESPONSIBILITIES OF OPERATOR

                  2.1 Generally. Operator hereby agrees to provide all
operations and maintenance services necessary or advisable in order to safely,
dependably and efficiently operate and maintain the Facility as contemplated by
the Related Agreements. Without limiting the generality of the foregoing,
Operator shall perform the following services on behalf of Owner in connection
with the operation and maintenance of the Facility:

                  (1) Provide all services necessary or advisable to use,
         operate and maintain the Facility's gas turbine unit and associated
         waste heat steam generator in good operating condition with the
         objective of maximizing output of steam and electricity while
         minimizing Fuel consumption consistent with (i) Prudent Utility
         Practices, (ii) the thermal and mechanical limits and other
         requirements specified in the nameplates thereon or in vendor and
         manufacturer warranty requirements or recommendations relating thereto
         so as to maximize the residual value of the Facility, (iii) the
         applicable terms of the Related Agreements and all easements related to
         the operation of the Facility and the sale of steam and Electricity,
         (iv) all applicable federal, state and local laws, regulations, orders,
         licenses, approvals, certificates and permits, including all Qualifying
         Cogeneration Facility requirements, (v) procedures established pursuant
         to the Facility Data and the Operating Procedures as revised from time
         to time, (vi) the requirements of insurance policies required hereunder
         and Owner's insurance carrier so as to maintain insurance coverage in
         full force and effect with respect to the Facility or any part
         thereof, (vii) the applicable Annual Operating Plan, and (viii) the
         reasonable instructions of Owner;

                  (2) Maintain the Facility, including, without limitation, its
         associated facilities, structures, buildings and offices, all
         interconnections with Cogen's facilities, all interconnections with the
         Refinery's facilities, all mechanical and electrical systems and
         controls, drainage systems, air pollution control and water treatment
         facilities, access roads, security fencing and all other Equipment and
         (i) develop, implement and maintain a maintenance management program
         which (a) meets all applicable vendor and manufacturer warranty and
         preventive and predictive maintenance requirements and specifications,
         (b) meets Prudent Utility Practices, and (c) includes provisions for
         continuously improving such program, (ii) develop, implement and
         maintain emergency preparedness procedures that allow an immediate and
         appropriate response to events such as fires, explosions, bomb threats,
         release of toxic chemicals, employee illnesses and other accidents,
         (iii) perform or cause to be performed routine and scheduled
         inspections and monitoring of the Facility and daily maintenance, work
         (such as cleaning the Equipment and maintaining levels of liquids),
         (iv) perform or cause to be performed all necessary Unscheduled
         Maintenance, subject to Owner's approval when required pursuant to
         Section 4.5 hereof; and (v) perform or cause to be performed scheduled
         maintenance and perform such replacement of major components of the
         Equipment (the "Capital Improvements") as may be recommended or
         required by the manufacturer of any such Equipment or requested by
         Owner or as may become, in Operator's reasonable discretion, upon
         consultation with and approval from Owner, otherwise necessary or
         appropriate;

                                       9
<PAGE>

                  (3) Establish and maintain an effective work force required
         for the operation and maintenance of the Facility in accordance with
         the terms of this Agreement and the Related Agreements through proper
         hiring, training, supervising and qualifying procedures, and administer
         all matters pertaining to labor relations, salaries, wages, working
         conditions, hours of work, termination of employment, employee
         benefits, safety and all related matters in connection with these
         duties in accordance with applicable laws;

                  (4) Maintain or cause to be available a sufficient number of
         personnel adequately trained in effective operation and maintenance
         such that the Facility can be operated in accordance with the terms of
         this Agreement and the Related Agreements in the event of a strike by
         or other labor problem with Operator's normal work force;

                  (5) Maintain an inventory of spare parts, Consumables and
         items of equipment as Owner requires or, subject to Owner's prior
         approval, as Operator determines are necessary or advisable to perform
         the operation and maintenance services required hereunder, provided
         that (i) Operator shall surrender such inventory to Owner upon
         termination of this Agreement and (ii) the cost of maintaining such
         inventory shall be a Reimbursable Cost to Operator,

                  (6) Coordinate with Owner all deliveries and services under
         and monitor the contracts with respect to Consumables, water, and Fuel;
         review performance under such contracts and assist owner in maintaining
         compliance therewith,

                  (7) Maintain a spare parts and tools inventory control and
         reporting system, which system shall include, without limitation, (i)
         procedures for receiving, storing, trending the history of and
         cataloging spare parts and tools, (ii) the ability to access the
         inventory of spare parts and tools for the Existing Plant, (iii) the
         ability to access the inventory of spare parts and tools for the
         Bayonne Facility, and (iv) the ability to access the inventory of spare
         parts and tools for the Camden Facility; and store spare parts and
         tools on the Site and at a central location in conjunction with the
         storage of spare parts and tools for the Existing Plant, the Bayonne
         Facility and the Camden Facility in a manner reasonably calculated to
         assure their continued good condition, including storage in accordance
         with vendors' and manufacturers' warranty requirements and
         recommendations in order to insure them against risks reasonably
         expected to occur during periods of such storage. The decision as to
         which spare parts will be stored on Site and which spare parts will be
         stored at a central location shall be mutually agreed upon by Owner and
         Operator;

                  (8) Schedule, hire, and supervise subcontractors and vendors
         as may be necessary for the performance of the services required
         hereunder and regularly provide Owner with an updated list of all such
         subcontractors and vendors; provided that (i) Operator shall obtain
         Owner's prior written approval, such approval shall not be unreasonably
         withheld of any subcontractor or vendor intended to be used for Major
         Maintenance Overhaul, Capital Improvements or operation of the
         Facility, (ii) Operator shall remain fully liable for the management
         and satisfactory performance of its subcontractors and vendors, (iii)
         Operator shall use reasonable efforts to ensure that all

                                       10
<PAGE>

         contracts and sub-contracts can be freely assigned to Owner or a
         successor operator on this Agreement, and (iv) Owner may, upon delivery
         of written notice to Operator, require that a subcontractor or vendor
         be replaced in the event that Owner considers that such subcontractor's
         or vendor's performance has been unsatisfactory;

                  (9) Assist Owner in maintaining good community relations;

                  (10) Maintain good labor relations and, to the extent the work
         force at the Facility is or becomes affiliated with labor unions, use
         best efforts to obtain a no strike clause in any collective bargaining
         agreement and consult with and obtain approval from Owner before taking
         any action inconsistent with any such collective bargaining agreement;

                  (11) On behalf of Owner, generate, maintain and store all
         operating and maintenance logs (which shall include an up-to-date
         record of (i) real and reactive power production for each clock hour,
         (ii) Fuel consumption, (iii) steam output, (iv) emission outputs, (v)
         water consumption, (vi) changes in operating status, Scheduled Outages
         and Forced Outages, (vii) all OSHA reportable and lost time accidents,
         and (viii) any unusual conditions found during inspections) relating to
         the use, operation and maintenance of the Facility. All such
         information shall be considered proprietary and confidential
         information and shall not be disclosed to any third party for any
         reason without the prior written consent of Owner;

                  (12) Maintain current revisions of all Facility drawings and
         specifications, technical documents, instruction books, equipment
         diagrams and other information illustrating a material, product or
         system relating to the Facility;

                  (13) Keep accurate cost ledgers regarding the Work pursuant to
         the terms of Section 15.1 hereof and in accordance with generally
         accepted accounting principles, consistently applied, in such forms as
         shall be reasonably required by Owner;

                  (14) Maintain records and provide to Owner all data and/or
         reports required of Owner and/or Operator to federal, state and local
         agencies (excluding any reports to be filed for federal, state and
         local income tax purposes);

                  (15) Assist Owner in the renewal and maintenance of all
         licenses, approvals and permits required in connection with the
         operation and maintenance of the Facility, as modified from time to
         time;

                  (16) Collect, handle, transport and dispose of all waste and
         refuse from the Site in accordance with all applicable laws, provided
         that Owner signs all manifests prior to waste leaving the Site;

                  (17) Provide reasonable access to the Facility and all records
         relating to the operation and maintenance of the Facility to all
         agents, representatives and inspectors of Owner, Lender and
         governmental authorities;

                                       11
<PAGE>

                  (18) Monitor the sufficiency of the Fuel, water and backup
         electrical power supplied to the Facility in terms of quality and
         quantity and advise Owner of any deficiency thereof and any
         noncompliance of Fuel with the appropriate specifications; work
         directly with suppliers of the Fuel, water and backup electrical power
         to ensure adequate deliveries and likely future requirements for the
         Facility; and verify invoices with respect thereto for payment by
         Owner;

                  (19) Supply all tools, materials and services necessary or
         advisable for the operation and maintenance of the Facility, including,
         but not limited to, (i) all such materials, tools, equipment and
         services required for the day to day operation and maintenance of the
         Facility and (ii) all Consumables, including, without limitation,
         lubricating oils, chemicals, filters and greases recommended by
         equipment manufacturers and suppliers or as required to operate,
         maintain and protect the Facility;

                  (20) Take reasonable precautions for the safety of personnel
         performing operations and maintenance services and comply with (i) all
         safety rules and guidelines outlined in the Facility Data, (ii) all
         requirements under the Ground Lease and Sublease, including, without
         limitation. Refinery safety and security regulations applicable to the
         Facility and (iii) all applicable federal, state and local safety laws,
         regulations, orders, licenses, approvals, certificates, permits, and
         other safety requirements (including, without limitation, applicable
         requirements under OSHA) necessary or advisable to prevent accidents or
         injury to persons or damage to property on, about or adjacent to the
         Site, including erecting and properly maintaining guards and barriers
         as needed for the protection of workers and the public and posting
         danger signs warning against any hazards on the Site; and strive to
         eliminate or abate safety hazard created by or otherwise resulting from
         the performance of its operations and maintenance services hereunder;

                  (21) Conduct, and allow Owner to approve, and to participate
         in, the process of interviewing, selecting and hiring individuals for
         the Key Personnel positions. In the event any Key Personnel positions
         become vacated during the term of this Agreement, Operator shall
         conduct, and allow Owner to participate in, the process of
         interviewing, selecting and hiring replacements to fill such vacancies,
         all such replacements being subject to Owner's approval; provided such
         Owner's approval shall not be reasonably withheld. Without the prior
         written approval of Owner, Operator shall not remove any individual
         from a Key Personnel position prior to such individual being in such
         position for a minimum of two (2) years; provided, however, if Owner
         notifies Operator that the performance of an individual is
         unsatisfactory then Operator shall promptly replace such individual in
         accordance with the terms hereof;

                  (22) Participate in and provide services during the Facility
         Turnover and Mobilization Stages, as set forth in Sections 2.9 and 2.11
         hereof;

                  (23) Exercise Owner's rights under subcontractor and vendor
         warranties, monitor and report to Owner concerning the remaining terms
         of all warranties and, prior to the expiration of any such warranty,
         perform such inspections as are reasonable to ensure that any final
         warranty work is not required; provided, however, Operator shall not
         file suit to enforce any such warranty without the prior written
         consent of Owner;

                                       12
<PAGE>
                  (24) Keep and maintain the Facility free and clear of all
         liens and encumbrances resulting from performance of the Work by
         Operator or its subcontractors;

                  (25) Keep Owner informed of the operating status of the
         Facility through daily, weekly and monthly reports, as may be agreed on
         from time to time, and through ongoing written and verbal
         communication;

                  (26) Determine and recommend to Owner for approval any
         necessary or advisable Capital Improvements, modifications or
         alterations to the Facility;

                  (27) Determine the need for any change, deletion or addition
         to the obligations, services or duties performed by Operator pursuant
         to this Section 2.1 and the change in cost attributable thereto, if
         any, where such change, deletion or addition is caused by a reason
         outside of the control of Operator, including, without limitation, a
         Capital Improvement or change in Operating Procedures. Except as
         provided in Section 2.6 hereof, any change, deletion or addition to the
         obligations, services or duties specifically enumerated in this Section
         2.1 shall be submitted to Owner for approval, prior to implementation,
         as a modification to the Approved Annual Operating Plan for the given
         Project Year;

                  (28) Work diligently to operate and maintain the Facility in a
         first class manner and provide all other work as is reasonably
         necessary or advisable to perform Operator's operations and maintenance
         services pursuant to this Agreement;

                  (29) Maintain all insurance coverage as required to be
         provided by Operator under Article X hereof;

                  (30) Comply with the terms and conditions of each Approved
         Annual Operating Plan, this Agreement and the Related Agreements;

                  (31) Maintain a document control system for documents critical
         to Facility operation and maintenance;

                  (32) Without any duty of inquiry, notify Owner if Operator
         becomes aware of (i) a default by any of the parties to the Related
         Agreements, (ii) any breach of any consents, licenses or permits which
         are required in connection with operation of the Facility, (iii) any
         occurrence which constitutes a violation of law or the occurrence of
         any event of force majeure under the Related Agreements;

                  (33) Be responsible for payment in respect of fines and
         penalties imposed on it or on Owner for breaches of applicable laws,
         permits or licenses where such fines or penalties result from a failure
         by Operator to comply with Prudent Utility Practices;

                  (34) Assist and cooperate with Owner in obtaining Owner status
         as a "qualified business" under and complying with the New Jersey Urban
         Enterprise Zones Act;

                  (35) As soon as reasonably practicable notify Owner and the
         Refinery of any outage, whether or not such outage is scheduled; and

                                       13
<PAGE>
                  (36) Staff, operate and maintain the Regional Office.

                  2.2 Compliance with Related Agreements. Operator (i) has
reviewed the Related Agreements, (ii) shall abide by all of the terms thereof
applicable to the operation and maintenance of the Facility pursuant to the
terms of this Agreement and (iii) shall not operate and maintain the Facility in
a manner which would cause Owner to be in breach of any of the terms of the
Related Agreements. Owner shall provide Operator with written notice of any
changes to such terms that may affect Operator's provision of operation and
maintenance services hereunder, and such notice, unless otherwise agreed in
writing by the parties, shall modify Operator's obligation hereunder. This
Section 2.2 shall not be deemed to make Operator a party to any or all of the
Related Agreements.

                  2.3 QF Status. Operator shall operate and maintain the
Facility so as to maintain the status of the Facility and the Existing Plant as
a Qualifying Cogeneration Facility.

                  2.4 Annual Operating Plan.

                  (a) Subject to the terms of the next succeeding sentence
hereof, not later than one hundred eighty (180) days prior to the Turnover Date
and not later than one hundred eighty (180) days prior to the first day of each
Project Year, Operator shall, prepare and submit to Owner for approval a
proposed operating and maintenance plan providing information for each month
during the upcoming Project Year (the "O&M Plan") and a five-year projection of
operating and capital budgets ("Five-Year Projection") as such term is used in
Section 6.2A of the Energy Services Agreement. The O&M Plan shall describe, in
detail acceptable to Owner and on a monthly basis, anticipated maintenance and
overhaul schedules, staffing plans; equipment acquisitions and spare parts and
Consumables inventories (including a breakdown of capital items and expense
items), schedules of subcontract services, plant performance data regarding
required environmental performance, projected Fuel usage and such other matters
as Owner may reasonably require. Any actions proposed under the O&M Plan shall
be consistent with the Facility Data, the Operating Procedures, Prudent Utility
Practices, the Related Agreements and this Agreement. Contemporaneously with the
delivery of the O&M Plan, Operator shall submit to Owner a proposed budget for
operating and maintaining the Facility during the upcoming Project Year (the
"Operating Budget"), which shall, include the estimated cost, based on time and
materials and all fees contemplated in this Agreement, for all anticipated
operating and maintenance services to be provided by Operator during each month
of the upcoming Project Year in the account structure and format provided by
Owner (the O&M Plan and the Operating Budget are hereinafter sometimes together
called the "Annual Operating Plan"). When approved pursuant to subparagraph (b)
below, the Annual Operating Plan shall be an "Approved Annual Operating Plan"
and shall consist of an "Approved O&M Plan" and an "Approved Operating Budget".

                  (b) Owner shall give its approval or disapproval of the Annual
Operating Plan no later than thirty (30) days after receipt thereof from
Operator. If Owner objects to all or any portion of the proposed Annual
Operating Plan, Owner shall furnish its objections in writing to Operator, and
Owner and Operator shall amend such Annual Operating Plan in order to
accommodate those items to which Owner objects.

                                       14
<PAGE>
                  (c) An Approved Annual Operating Plan shall constitute
authorization for Operator to operate and maintain the Facility in accordance
with such Approved Annual Operating Plan and the terms of this Agreement, it
being recognized and agreed that Operator shall operate and maintain the
Facility in a prudent and efficient manner so as to maximize both the current
performance and the residual value of the Facility and shall endeavor to ensure
that the actual costs of operating and maintaining the Facility are as low as
reasonably practicable and in any event do not exceed the Approved Operating
Budget either in total or, to the extent reasonably practicable, in any one
budgetary category. Operator shall notify Owner as soon as reasonably possible
of any significant deviations or discrepancies between the costs and expenses
actually incurred by Operator during each Project Year and the costs and
expenses projected to be incurred by Operator as set forth in the Approved
Operating Budget for each such Project Year.

                  (d) In the event Operator desires to request an adjustment to
an Approved Annual Operating Plan at any time during the Project Year, Operator
shall submit a proposed revised Annual Operating Plan for Owner's consideration,
which Owner shall approve or disapprove within fifteen (15) days after
submission thereof. If the proposed revised Annual Operating Plan is disapproved
by Owner within such fifteen (15) day period, Owner shall furnish Operator with
the reasons for such disapproval and shall immediately begin discussions with
Operator in an effort to reach a mutually agreeable revised Annual Operating
Plan. Upon such agreement, Operator shall revise the Annual Operating Plan with
respect thereto. Until the revised Annual Operating Plan is approved in writing
by Owner, Operator shall not, except in an emergency as described in Section 2.6
hereof, act outside of the Approved Annual Operating Plan for such Project Year
without the prior written consent of Owner. Once approved, Operator's authority
as to the revised, or any additionally revised, Annual Operating Plan shall be
the same as that authorized for the original Approved Annual Operating Plan.

                  2.5 Monthly Summary. Within two (2) business days after the
end of each calendar month of each Project Year, Operator shall submit to Owner,
in a form reasonably acceptable to Owner, a preliminary report containing
operating data, meter readings, and other billing documentation for such month
sufficient to generate monthly invoices for the sale of Electricity and steam
produced at the Facility. In addition, within ten (10) days after the end each
month of each Project Year, Operator shall submit to Owner, in a form to
Exhibit A attached hereto and made a part hereof for all purposes and otherwise
acceptable to Owner, a monthly operating report summarizing in reasonable detail
all area of operation and maintenance and all activities performed by Operator
during such month. Operator shall submit the proposed forms of such reports to
Owner for approval on or before thirty (30) days after the date on which this
Agreement is executed.

                  2.6 Emergencies. Immediately upon the occurrence or imminent
likelihood of an accident or emergency involving the Facility or adjoining
property and endangering the safety of any person or property, or materially
adversely affecting the performance of the Facility or the Facility's compliance
with applicable law, Operator shall, after consultation with the Plant Manager
if the circumstances allow, and without the necessity of obtaining any other
approvals which might otherwise be required hereunder and exercising reasonable
care without special instruction or authorization from Owner, take any
reasonable and necessary or advisable action deemed by Operator to be reasonably
necessary or advisable under the circumstances to prevent,

                                       15
<PAGE>
avoid or mitigate injury, damage or loss to persons or property or to avoid
penalties, fines or damages under applicable law. Operator shall notify Owner
thereof as soon as practicable.

                  2.7 Inspections.

                  (a) In addition to its daily activities associated with the
operation and maintenance of the Facility, Operator shall conduct inspections of
the Facility at regular intervals, as required by vendors' or manufacturers'
recommendations and Prudent Utility Practices. Within ten (10) days after the
Execution Date for the first (1st) Project Year and no later than one hundred
twenty (120) days prior to each Project Year thereafter, Operator shall submit
to Owner for approval Operator's proposed inspection schedule (which inspection
schedule shall be included as part of each O&M Plan to be submitted to Owner)
and shall incorporate into the proposed inspection schedule any reasonable
amendments proposed by Owner. Any inspection conducted pursuant to this Section
2.7 shall be conducted in such a manner so as to minimize the impact on the
production of electricity and steam from the Facility.

                  (b) During such inspections, Operator shall make any necessary
decisions and promptly perform all Work as may be necessary to effect (after
Owner's approval, if necessary) the maintenance, repair or replacement of any
part of the Facility the necessity of which becomes apparent during such
inspection.

                  (c) Within forty-five (45) business days after (i) each
inspection and (ii) the completion of any maintenance or repair work performed
after such an inspection, Operator shall prepare and deliver to Owner a report
of the results of such inspection or any Work completed after such inspection,
as the case may be, containing a summary of Operator's observations and
recommendations relating thereto. Operator shall arrange for its personnel to
attend any meetings or conferences with Owner's personnel as Owner may from time
to time request to review the results of Operator's inspections and maintenance
work.

                  (d) Operator shall cooperate with Owner, the Plant Manager,
Lender and any other designees of Owner in connection with inspections of the
Facility. Such inspections may occur at any time, provided that they do not
unreasonably interfere with the performance of Operator's obligations hereunder,
and further provided that if Owner or Owner's designated representative desires
to conduct any such inspection after normal business hours, Owner shall give
Operator reasonable notice thereof. Operator agrees to correct, in accordance
with the terms of Section 7.2 hereof, any failure to comply with the obligations
and standards set forth in this Agreement for the operation and maintenance of
the Facility that is identified by Lender.

                  2.8 Operating Procedures and Training

                  (a) Owner and Operator shall use due diligence to obtain from
any Equipment vendor or manufacturer all instruction manuals and spare parts
lists not timely submitted by such Equipment vendor or manufacturer, it being
understood that Owner shall coordinate this effort with Operator's assistance
and Owner may pursue all appropriate rights and remedies available to Owner
under any equipment supply agreements. To the extent any supplementary materials
are required for Operator training that are not provided by Equipment vendors or
manufacturers, Operator shall provide such materials, at Operator's sole cost
and expense; except where such

                                       16
<PAGE>
supplementary materials are required in connection with a Reimbursable Cost
Operator shall review the operating procedures in effect at the Facility as of
the Execution Date (the "Operating Procedures") and shall prepare and submit to
Owner a complete set of revisions to the Operating Procedures sufficient to
ensure the continued safe and efficient operation and maintenance of the
Facility in accordance with vendors' and manufacturers' warranty requirements
and recommendations, Prudent Utility Practices, the Related Agreements and this
Agreement. The Operating Procedures shall, among other things, include Facility
specific preventive and predictive maintenance procedures integrating (i) vendor
and manufacturer recommendations and warranty requirements, (ii) requirements of
the Related Agreements, (iii) Operator's experience, (iv) adequate safety and
fire prevention, response and reporting measures and procedures, (v) adequate
security measures and procedures, and (vi) the monitoring of the performance of
the Facility. In addition, the Operating Procedures shall include, without
limitation, (i) employee manuals outlining proper employee conduct and general
expectations, rules and procedures, (ii) safety manuals, (iii) emergency
preparedness and response manuals, and (iv) environmental compliance manuals.
Within twenty (20) days of Owner's receipt thereof, Owner shall review revisions
to the Operating Procedures, provide reasonable written comments and
suggestions, and Operator shall duly consider such comments and suggestions in
revising the Operating Procedures. Owner's review and approval of the Operating
Procedures shall not relieve Operator of its obligation to operate and maintain
the Facility in accordance with this Agreement. Operator shall, as often as
necessary but not less often than annually, review and, if necessary, revise and
update the Operating Procedures, but shall not implement any amendments thereto
without Owner's prior written consent.

                  (b) Operator shall provide training materials, instructional
personnel and management oversight as necessary to develop and implement a
comprehensive training program for operation of the Facility. Operator shall
ensure that its personnel are fully trained and qualified to operate and
maintain the Facility in accordance with vendors' and manufacturers' warranty
requirements and recommendations, Prudent Utility Practices, the Related
Agreements and this Agreement.

                  2.9 Facility Turnover. Pursuant to the EPC Agreement, care,
custody and control of the Facility will pass from NEPCO to Owner. Owner shall
simultaneously transfer to Operator, and Operator shall accept, the care,
custody and control of the Facility provided that, in Operator's reasonable
judgment (i) any deficiencies affecting the safety, reliability or operability
of the Facility identified to Owner in accordance with Section 2.11 hereof have
been corrected, and (ii) the Facility otherwise comports with Prudent Utility
Practices. The Facility will be turned over to Operator on the Turnover Date,
the date declared by Owner in an endorsement of NEPCO's Notice of Substantial
Completion that shall occur after the date on which NEPCO has completed
commissioning tests of the Facility, perform steam interconnection with the
Existing Plant, completed the Performance and Reliability Testing and achieved
Substantial Completion as such terms are defined in the EPC Agreement (the
"Turnover Date"). By accepting care, custody and control of the Facility,
Operator acknowledges that it can and will perform its Work in conformance with
the requirements of the Related Agreements, Prudent Utility Practices, and
Owner's insurance policies.

                  2.10 Initial Support Stage. As the Turnover Date approaches,
an orderly transition from NEPCO to Operator must occur. In order to facilitate
such a transfer, Operator

                                       17
<PAGE>
must take certain actions prior to the commencement of the Mobilization Stage
("Initial Support Stage").

                  (a) During the Initial Support Stage, which is anticipated to
commence as of February 1, 2001, and prior to the commencement of the
Mobilization Stage, Operator shall: (i) plan and prepare for hiring Key
Personnel; (ii) submit to Owner an O&M Staffing Plan by February 1, 2001; (iii)
upon Owner's approval of the O&M Staffing Plan, hire personnel as necessary for
the operation and maintenance of the Facility as contemplated in the O&M
Staffing Plan; (iv) establish the Annual Operating Plan for use during the first
(1st) Project Year and obtain approval of Owner thereof, (v) establish the
inspection schedule for the Facility (which inspection schedule shall be
included as part of the first (1st) Annual Operating Plan and shall be the same
for the first Project Year as the inspection schedule established for such
period of time pursuant to the terms of the EPC Agreement unless Owner or
Operator recommends a change to such inspection schedule) and obtain approval of
Owner thereon, (vi) prepare a detailed monthly report format as described in
Section 2.5 hereof and obtain approval of Owner thereon, and (vii) make only
such changes to the staff of the Regional Office as Owner or Operator may agree
is necessary for Operator's performance of this Agreement.

                  (b) Using a format similar to that described in Section 2.4
hereof for the development of the Annual Operating Plan, Operator shall prepare
and submit to Owner a "Mobilization Stage Operating Plan," comprised of the
"Mobilization Stage Plan" and the "Mobilization Stage Operating Budget" no later
than thirty (30) days period to the commencement of the Mobilization Stage,
which is anticipated to commence on May 1, 2001. The Mobilization Stage
Operating Plan shall include expenditures and activities to occur during, the
Mobilization Stage as described in this Section 2.10, and shall be submitted to
Owner for its review and comment within thirty (30) days after the Execution
Date. If Owner objects to all or any portion of the proposed Mobilization Stage
Operating Plan, Owner shall promptly furnish its objections to Operator, and
Owner and Operator shall work diligently to resolve such objections.

                  2.11 Mobilization Stage. Operator shall participate in an
orderly process of transition from the construction and testing of the Facility
by NEPCO to the operation and maintenance of the Facility by Operator (the
"Mobilization Stage"). For purposes of this Agreement, the Mobilization Stage
shall commence as of May 1, 2001 unless such date shall have been changed in a
notice from Owner to Operator. During the Mobilization Stage, Operator shall
cooperate and coordinate with NEPCO and shall report to and be subject to the
authority of Owner.

                  (a) During the Mobilization Stage, Operator shall cause its
employees to be available for and attend training by NEPCO as described in more
detail in Exhibit C-1 to the EPC Agreement.

                  (b) At such time as Owner has given written notice to Operator
to commence Mobilization Stage operations, Operator shall perform all such
duties and obligations otherwise set forth in this Agreement to the extent that
such duties and obligations are not inconsistent with its transition role.

                                       18
<PAGE>
                  (c) During the Mobilization Stage, Operator shall review and
report to the Owner on the status of, and where appropriate, make written
recommendations to Owner with respect to (i) operation and maintenance
facilities, tools, equipment, supplies and spare parts inventories, (ii)
reporting, accounting, maintenance management and communication systems
necessary for Operator to operate and maintain the Facility in accordance with
the terms of this Agreement, (iii) security and safety systems and plans,
including any necessary or desirable special clothing or safety gear for
operations and maintenance personnel, and (iv) such other facilities and systems
as shall be necessary or desirable to operate and maintain the Facility and to
fulfill Operator's ongoing responsibilities under this Agreement.

                  (d) During the Mobilization Stage, Operator or its authorized
representative shall, if reasonably requested by Owner, attend any and all
review meetings between NEPCO and Owner. Operator shall, if reasonably requested
by Owner, review and comment upon plans, specifications, documents, or other
data generated by NEPCO. Operator shall take all necessary steps to assist NEPCO
in achieving Final Completion, as such term is used in the EPC Agreement, in a
manner consistent with the operation of the Facility and Prudent Utility
Practices.

                  (e) During the Mobilization Stage, Operator shall coordinate
operations and maintenance with Owner and NEPCO in order to assist NEPCO in
achieving Final Completion, as such term is used in the EPC Agreement, in a
manner consistent with the operation of the Facility and Prudent Utility
Practices.

                  (f) Upon the Turnover Date, care, custody and control of the
Facility will pass from NEPCO to Owner under the terms of the EPC Agreement and
from Owner to Operator under the terms of this Agreement and the Mobilization
Stage shall end. Operator shall thereafter operate and maintain the Facility in
accordance with this Agreement and provide any and all technical and engineering
support required for the safe and efficient operation and maintenance of the
Facility.

                  2.12 Limited Authority. Operator shall not have any authority
to (i) negotiate any change to the Energy Services Agreement, (ii) settle or
compromise claims on behalf of Owner under any Related Agreement, (iii) agree to
any amendments to, or waivers, consents or approvals in connection with, any
Related Agreement, (iv) serve any notice of a breach under any of the Related
Agreements, or (v) transfer, dispose of, lease or create any encumbrance on any
assets of Owner.

                                      III.
                            RESPONSIBILITIES OF OWNER

                  3.1 Services, Operation, Obligations. Except as otherwise
provided in Section 3.1(3) hereof, Operator shall have no obligation to provide
any of the following services or perform any of the following work, which
services and work shall be provided and performed by Owner:

                  (1) Arrange for a supply of Fuel and water, at no cost to
         Operator, in such quantities as are necessary for the performance by
         Operator of the Work;

                                       19
<PAGE>

                  (2) Provide for the sale of steam and electricity generated by
         the Facility and for the billing and collection of revenues therefrom,

                  (3) Obtain or cause to be obtained all governmental licenses,
         permits and approvals necessary to operate the Facility, including
         environmental licenses, permits and approvals; provided, however, that
         Operator shall (i) provide to Owner such technical information and
         other assistance as is required from time to time to obtain licenses,
         permits or approvals or renewals or extensions thereof and (ii) keep
         such records and provide such reports to appropriate governmental
         agencies as may be required of Owner or Operator by any such licenses,
         permits and approvals;

                  (4) Designate and advise Operator of the Plant Manager (who
         shall act and be designated as Owner's authorized representative);

                  (5) Provide and grant to Operator full access to the Facility
         and such portions of the Site as are necessary to allow Operator to
         perform the Work;

                  (6) Arrange for start-up power and back-up power in such
         quantities as is necessary for the performance by Operator of the Work;

                  (7) Pay all applicable federal, state and local taxes (except
         for sales taxes which are the responsibility of Operator) attributable
         to the Facility and the sale of steam and electricity therefrom,
         including the preparation of all tax returns and reports to be filed
         for federal, state and local income tax purposes; and

                  (8) Maintain all insurance coverage as required to be provided
         by Owner under Article X hereof

                  3.2 Payments. Owner shall compensate Operator for the Work
performed hereunder pursuant to the terms of Articles IV, V and VI hereof.

                  3.3 Right to Perform Upon Operator's Default. If at any time
Operator fails to perform any obligation hereunder and such failure is likely to
cause injury to any person or damage to the Facility, to exceed or breach the
terms or conditions of any permit or easement, or to breach the terms of any
Related Agreement, Owner, in addition to all other rights and remedies it has
under this Agreement, may, but shall have no duty to, perform or have performed
by a third party any, such obligation not performed by Operator. Such
performance by Owner shall reduce any compensation payable to Operator hereunder
during the Initial Support and Mobilization Stages or in any Project Year by an
amount equal to the cost to Owner of effecting such performance.

                                       IV.
                          OPERATING COSTS AND EXPENSES

                  4.1 Procedure for Incurring Costs. Owner, and not Operator,
shall be ultimately liable for all Reimbursable Costs and Direct Costs expended
hereunder in connection with the Facility and Operator shall receive payment for
Reimbursable Costs in accordance with the terms of Sections 5.2 and 5.4 hereof
Operator shall submit a written requisition to Owner for

                                       20
<PAGE>

any single item requiring an expenditure in excess of Five Thousand and 00/100
Dollars ($5,000.00) or as otherwise may be required by Owner, and after receipt
of written approval from Owner, but not before, Operator shall be authorized to
prepare Operator's purchase order for such item. Operator shall (i) verify the
receipt at the Site of all materials and services to be delivered to the
Facility covered by Owner's and Operator's purchase orders, (ii) verify the
accuracy of vendors' invoices in connection therewith, and (iii) forward
invoices for Direct Costs to Owner for approval, processing, and payment by
Owner in accordance with the terms of Section 4.2 hereof.

                  4.2 Procedure for Payment of Direct Costs. Operator shall
periodically, but not more often than once a week, deliver to Owner invoices
received by Operator from third parties for all Direct Costs, accompanied by a
summary of all, such invoices which itemizes all such invoices by operating cost
account number. Such invoices shall also be accompanied by a statement from
Operator confirming that all such invoices are accurate, due and payable,
together with all relevant documentation reasonably necessary for Owner to
verify the accuracy thereof. Each invoice submitted to Owner shall be paid by
Owner directly to the payee of such invoice on or before the date such invoice
is due, provided that if Owner disputes any amount set forth in any such
invoice, Owner shall pay the undisputed portion on or before such due date, and
Owner, Operator and such payee shall attempt in good faith to resolve all
disputed items as soon as reasonably practicable.

                  4.3 Limitation on Ability to Incur Direct Costs. Operator
shall prepare Operator's purchase order for costs and expenses incurred in
connection with the operation and maintenance of the Facility during each month
of a Project Year pursuant to the terms hereof, to the extent and only to the
extent such costs and expenses:

                  (i)      are included within the Approved Operating Budget,
                           and any approved revision thereof, for the applicable
                           Project Year;

                  (ii)     are incurred in connection with the performance of
                           any Unscheduled Maintenance, Special Improvements or
                           Capital Improvements as approved in writing by Owner;

                  (iii)    are incurred in connection with an emergency under
                           Section 2.6 hereof; or

                  (iv)     are otherwise approved by Owner in writing.

                  4.4 Payment for Special Improvements. The actual cost of any
alterations, modifications, improvements or additions to the Facility which are
required by any, governmental or regulatory agency or are otherwise required to
comply with applicable laws, regulations or requirements ("Special
Improvements") shall be the sole responsibility of Owner. If any such costs are
necessary or advisable and become known to Operator, Operator shall promptly so
inform Owner who shall promptly determine the most feasible manner in which to
pay for such costs. Operator shall not be authorized to incur any expenditure in
relation to any Special Improvements without the prior written consent of Owner.

                  4.5 Payment for Unscheduled Maintenance. The actual cost of
Unscheduled Maintenance shall be the sole responsibility of Owner. Operator
shall not incur any expenditure

                                       21
<PAGE>
in relation to any Unscheduled Maintenance without the prior written consent of
Owner, except in the event of an emergency as described in Section 2.6 hereof.

                  4.6 Payment for Major Maintenance Overhaul. The actual cost of
Major Maintenance Overhaul shall be the sole responsibility of Owner. Operator
shall not incur any expenditure in relation to any Major Maintenance Overhaul
without the prior written consent of Owner.

                  4.7 Payment for Capital Improvements. The actual cost of
Capital Improvements shall be the sole responsibility of Owner. Operator shall
not incur any expenditure in relation to any Capital Improvements without the
prior written consent of Owner.

                  4.8 Wage Increases in Excess of CPI. In the event that
Operator finds it necessary to increase salaries and/or wages, then, without the
prior written consent of Owner, Operator shall not increase salaries and/or
wages from one Project Year to the next Project Year by an amount which exceeds
the percentage increase in the Base Index from the beginning of such Project
Year to the beginning of such next Project Year; provided, however, there shall
be no obligation on behalf of Owner to approve any such increase in salaries
and/or wages.

                                        V.
                              PAYMENTS TO OPERATOR

                  5.1 Initial Support Fee. Upon execution of the Agreement by
Operator, Owner shall pay to Operator an initial support fee in the amount of
One Hundred Fifty Thousand Dollars ($150,000) as compensation for the provision
of services during the Initial Support Stage.

                  5.2 Mobilization Stage Fee. As compensation for the provision
of services by Operator during the Mobilization Stage, including but not limited
to any expenses of Operator associated with the hiring, operational training,
safety training, physical examinations, purchase and/or preparation of employee
books and operating and safety manuals, temporary operator manpower (including
salaries and travel expenses), Owner shall pay Operator a Mobilization Fee of
Two Hundred Ninety Thousand Dollars ($290,000) payable in five monthly
installments of Fifty-eight Thousand Dollars ($58,000), the first such monthly
payment being due as of May 1, 2001.

                  5.3 O&M Fee. As compensation for the performance of the Work
by Operator pursuant to this Agreement on and after the Turnover Date, Owner
shall pay to Operator an operations and maintenance fee in the amount of Twelve
Thousand Five Hundred and 00/100 Dollars ($12,500.00) per month (the "O&M
Fee"), beginning with the first day of the first month following the Turnover
Date and continuing for each month thereafter throughout the term this
Agreement. The O&M Fee shall be payable monthly, in arrears, with the first such
payment being due and payable on the last business day of the month that begins
after the Turnover Date, and with a like payment on the last business day of
each month thereafter throughout the term of this Agreement. If the last day of
the term of this Agreement does not fall on the last day of a month, the O&M Fee
for such partial month shall be prorated. If during the term of this Agreement
conditions or circumstances change from those in effect on the Turnover

                                       22
<PAGE>
Date such that there is either a material increase or decrease in the
responsibilities and obligations of Operator hereunder from those
responsibilities and obligations of Operator as of the Turnover Date, then Owner
and Operator shall meet and negotiate an equitable adjustment to the O&M Fee.

                  5.4 Reimbursable Costs. To the extent not paid by Owner as
Direct Costs pursuant to Article IV hereof, Owner shall reimburse Operator for
those costs and expenses actually incurred by Operator in connection with the
operation and maintenance of the Facility during each month of a Project Year or
during the Mobilization Stage pursuant to the terms hereof, to the extent and
only to the extent such costs and expenses (collectively, the "Reimbursable
Costs") are:

                  (i)      included within the approved Transition Operating
                           Budget and any approved revision thereof;

                  (ii)     included within the Approved Mobilization Stage
                           Operating Budget, and any approved revision thereof,
                           for the applicable Project Year;

                  (iii)    incurred in connection with the performance of any
                           Unscheduled Maintenance approved in writing by Owner;

                  (iv)     incurred in connection with an emergency under
                           Section 2.6 hereof;

                  (v)      subject to the limitations set forth in Section 4.8
                           hereof, the actual salaries, straight time hourly
                           wages and overtime hourly wages (including vacation
                           and holiday pay for hourly personnel) for all
                           Operator Personnel (whether employed directly by
                           Operator or through a contractor) to the extent
                           pertaining to the Work, plus (a) the actual cost of
                           associated payroll taxes, unemployment and disability
                           insurance, worker's compensation, fringe benefits and
                           other statutory compensation for all such Operator
                           Personnel to the extent pertaining to the Work and
                           (b) five percent (5%) of the W-2 Wages for all such
                           Operator Personnel to the extent pertaining to the
                           Work ((a) and (b) above collectively referred to
                           herein as "Operator Personnel Overhead"); provided,
                           however, the amount of Operator Personnel Overhead,
                           other than such Overhead that is required by law,
                           that is allowed to be included in Reimbursable Costs
                           shall be limited to (i) twenty-three and 05/100
                           percent (23.05%) of the W-2 Wages for all such
                           Operator Personnel through December 31, 2001 and (ii)
                           thereafter, twenty-four and 05/100 percent (24.05%)
                           of the W-2 Wages for all such Operator Personnel per
                           Project Year for the remainder of term of this
                           Agreement;

                                       23
<PAGE>
                  (vi)     (a) subject to the limitations set forth in Section
                           4.8 hereof, the actual salaries for all GE O&M
                           Personnel to the extent pertaining to the Work, plus
                           (b) thirty-six percent (36%) of the W-2 Wages for all
                           such GE O&M Personnel to the extent pertaining to the
                           Work (the "Overhead Percentage Rate") to offset
                           Operator's actual cost of associated payroll taxes,
                           unemployment and disability insurance, worker's
                           compensation, fringe benefits and other statutory
                           compensation for all such GE O&M Personnel to the
                           extent pertaining to the Work (such actual cost
                           collectively referred to herein as "GE O&M Personnel
                           Overhead"), whether such actual costs are more or
                           less than such percentage; provided, however, if the
                           amount of GE O&M Personnel Overhead that is required
                           by law increases or decreases over that in effect as
                           of the Existing O&M Agreement Termination Date, then
                           the Overhead Percentage Rate shall be increased or
                           decreased, as the case may be, to the extent of any
                           such increase or decrease in GE O&M Personnel
                           Overhead that is required by law; or

                  (vii)    otherwise approved by Owner in writing.

         Subject to the limitations imposed in the immediately preceding
paragraph, the term Reimbursable Costs shall include, but not be limited to, the
following costs incurred by Operator in its performance of the Work.

                  (viii)   the actual delivered cost of supplies, Consumables,
                           spare parts and/or replacement components and all
                           other items Operator is required to provide and does
                           provide for the Facility under this Agreement;

                  (ix)     special training costs conducted off-site or by
                           non-Operator personnel, as approved in advance and in
                           writing by Owner;

                  (x)      community and labor relations costs provided by
                           non-Operator personnel, as approved in advance and in
                           writing by Owner;

                  (xi)     relocation and recruitment costs of salaried
                           employees and recruitment costs (but not relocation
                           costs) of non-salaried employees;

                  (xii)    the actual costs of suppliers, subcontractors,
                           attorneys, certified accountants and other third
                           party advisors, as approved in advance and in writing
                           by Owner;

                  (xiii)   upon Owner's request and subject to Owner's prior
                           written approval, the cost of services (other than
                           the Work) at mutually agreed upon prices, terms and
                           conditions;

                                       24
<PAGE>

                  (xiv)    the actual delivered cost for the purchase of certain
                           materials such as tools, office equipment and office
                           supplies; and

                  (xv)     a fraction of the actual costs incurred by Operator
                           to staff; operate and maintain the Regional Office,
                           the numerator of which fraction is the total of all
                           costs and expenses set forth in the Approved
                           Operating Budget for the Project Year in question for
                           the Facility and the denominator of which fraction is
                           the total of all costs and expenses set forth in the
                           Facility's Approved Operating Budget, Camden Approved
                           Operating Budget, the Bayonne Approved Operating
                           Budget and the Approved Operating Budget for the
                           Existing Plant for such Project Year.

         Unless Owner shall otherwise agree in writing, or unless otherwise
included in the approved Mobilization Stage Operating Budget or an Approved
Operating Budget, the term Reimbursable Costs shall not include and Operator
shall not be entitled to reimbursement for:

                  (xvi)    salaries or other compensation of Operator's
                           officers, executives, general managers, estimators,
                           auditors, attorneys, labor consultants, risk
                           managers, accountants, purchasing and contracting
                           agents and other employees at Operator's principal
                           office and branch offices, except employees of
                           Operator at the Facility and the Regional Office;

                  (xvii)   expenses of Operator's principal and branch offices
                           other than the field office at the Facility and the
                           Regional Office;

                  (xviii)  any of Operator's general and administrative expenses
                           of any kind;

                  (xix)    all costs of insurance paid by Operator and payments
                           for deductibles or self-insured retentions associated
                           with such insurance;

                  (xx)     all costs and expenses incurred in connection with
                           any engineering services provided by Operator in
                           connection with the performance of the Work (e.g.,
                           maintaining Facility drawings, specifications and
                           technical documents up-to-date) to the extent
                           performed by Operator's employees other than the
                           Operator Personnel or the GE O&M Personnel;

                  (xxi)    all costs and expenses incurred in connection with
                           the preparation of all reports required to be made by
                           Operator pursuant to the terms of this Agreement to
                           the extent performed by Operator's employees other
                           than the Operator Personnel or the GE O&M Personnel;
                           and

                  (xxii)   all employee bonuses paid by Operator to the Operator
                           Personnel and the GE O&M Personnel pursuant to
                           Section 6.7 hereof.

                                       25
<PAGE>
                  5.5 CPI Adjustment. The O&M Fee and the Annual Fee Adjustment
Amount (together, the "CPI Adjusted Payments") shall be adjusted on the first
day of each Project Year (except the first Project Year) throughout the term of
this Agreement and any extensions hereof. On each such date each of the CPI
Adjusted Payments shall be adjusted to a new CPI Adjusted Payment calculated in
accordance with the following equation:

                  New CPI Adjusted Payment = (Applicable Adjustment Amount)
                                                  multiplied by (A/B)

                  "Applicable Adjustment Amount" equals the original dollar
amount set forth in this Agreement for a given CPI Adjusted Payment.

                  "A" equals the average of the Consumer Price Index for all
urban consumers for the New York/New Jersey area (1982-84 = 100), published by
the Bureau of Labor Statistics, United States Department of Labor (the "Base
Index") for the last three full calendar months prior to the commencement of
the Project Year for which the new CPI Adjusted Payments are to be computed.

                  "B" equals the Base Index for the last calendar month prior to
the month in which the Turnover Date occurs.

                  5.6 Procedure for Payment of Reimbursable Costs. On or before
the tenth (10th) day of each month commencing after the Commencement of the
Mobilization Stage, Operator shall render an invoice to Owner for all
Reimbursable Costs, if any, paid by Operator during the preceding month. Such
invoices shall be accompanied by a certificate from Operator confirming that all
such Reimbursable Costs have been paid, together with all relevant documentation
necessary for Owner to verify the accuracy thereof, including all relevant
invoices for Consumables, spare parts and replacement components and labor costs
and benefits computations incurred by Operator for the relevant staff and
specialists. Each invoice submitted to Owner shall be paid by Owner by wire
transfer not later than the tenth (10th) day of the next calendar month after
the month in which such invoice was received, but in no event shall Owner be
required to pay an invoice earlier than thirty (30) days after receipt of such
invoice provided that if Owner disputes any amount set forth in any such
invoice, (i) Owner shall promptly notify Operator of such dispute, (ii) Owner
shall pay the undisputed portion to Operator within said period and (iii) Owner
and Operator shall attempt in good faith to resolve all disputed items as soon
as reasonably practicable.

                  5.7 Late Payments. All payments that are past due and are not
disputed, or disputed and subsequently demonstrated to be payable to Operator,
shall accrue interest from the date such payments are due until such payments
are made at a per annum rate equal to the Default Rate.

                                       VI.
               FACILITY PERFORMANCE, LIQUIDATED DAMAGES AND BONUS

                  6.1 Annual Fee Adjustment Amount. To provide incentive for
Operator to operate and maintain the Facility in such a way so as to maximize
profitability and efficiency of operation, achieve target operating levels of
performance, and protect the overall life and

                                       26
<PAGE>
viability of the Facility, the O&M Fee earned by Operator shall be subject to an
annual adjustment. The amount of such adjustment (the "Annual Fee Adjustment
Amount" or "AFAA") shall be the sum of bonuses earned by and/or liquidated
damages assessed against Operator in each of six (6) separate categories of
evaluation. The six (6) categories of evaluation are:

                  (i)      Unit Availability,

                  (ii)     Change in Rated Capacity,

                  (iii)    Steam Delivery,

                  (iv)     Net Plant Heat Rate,

                  (v)      O&M Costs, and

                  (vi)     Subjective Factors.

                  In each category the maximum bonus or liquidated damage will
be limited to a specific dollar amount. The AFAA shall be the sum of the bonuses
earned and liquidated damages assessed in each individual category and in any
Project Year shall never exceed One Hundred Fifty Thousand and 00/100 Dollars
($150,000.00) for bonus and One Hundred Thousand and 00/100 Dollars
($100,000.00) in liquidated damages, as the case may be.

                  (a) Unit Availability. The maximum bonus or liquidated damages
capable of being earned by or assessed against Operator in the Available Hours
category of the AFAA in any Project Year respectively shall be Forty-five
Thousand and 00/100 Dollars ($45,000.00) and Thirty Thousand and 00/100 Dollars
($30,000.00). The determination of the amount of bonus or liquidated damages
attributable to such category for a Project Year shall be calculated in
accordance with Exhibit B hereto.

                  (b) Change in Rated Capacity. The maximum bonus or liquidated
damages capable of being earned by or assessed against Operator in the Change in
Rated Capacity category of the AFAA in any Project Year respectively shall be
Ten Thousand Hundred and 00/100 Dollars ($10,000.00) and Six Thousand Six
Hundred Sixty-eight and 00/100 Dollars ($6,668.00). As incentive to attain the
level of Rated Capacity required by Owner, Operator shall be entitled to receive
a bonus or, alternatively, be assessed liquidated damages in the Change in Rated
Capacity category of the AFAA based on the results of the semi-annual PJM Net
Capability Verification Test compared with the results of the semi-annual PJM
Net Capability Verification Test conducted during the corresponding period in
the immediately preceding Project Year (the "Target Rated Capacity"); provided,
however, if either Owner or Operator desires not to use the results of the
semi-annual PJM Net Capability Verification Test conducted during the
corresponding period in the immediately preceding Project Year as the Target
Rated Capacity, then the Target Rated Capacity shall be mutually agreed to be
Owner and Operator. The Target Rated Capacity shall reflect wear and tear
degradation, maintenance and output improvements. If Owner and Operator can not
agree prior to the running of such test, then the Target Rated Capacity for such
test shall be the Rated Capacity as demonstrated by the semi-annual PJM Net
Capability Verification Test conducted during the corresponding period in the
immediately preceding Project Year. By no later than forty-five (45) days prior
to each semiannual PJM Net Capability Verification Test, Operator shall prepare
and submit for Owner's approval a plan for such PJM Net Capability Verification
Test (the "Test Plan") Which shall clearly identify the measures to be taken by
Operator to meet the Target Rated Capacity. The Test Plan shall be subject to
Owner approval, provided, however, in the event that Owner objects

                                       27
<PAGE>

to all or any portion of the Test Plan, Owner shall notify Operator in writing
and Owner and Operator shall promptly meet to resolve any differences in order
to establish an approval Test Plan by no later than twenty (20) days prior to
the annual PJM Net Capability Verification Test.

                  For each PJM Net Capability Verification Test conducted during
a Project Year, Operator shall be entitled to receive a bonus of Five Thousand
and 00/100 Dollars ($5,000.00) in the Change in Rated Capacity category of the
AFAA if the Rated Capacity, as demonstrated by such PJM Net Capability
Verification Test, is greater than or equal to one hundred one percent (101%) of
the Target Rated Capacity for such PJM Net Capability Verification Test.
Operator shall be assessed liquidated damages of Three Thousand Three Hundred
Thirty-four and 00/100 Dollars ($3,334.00) in the Change in Rated Capacity
category of the AFAA if in Rated Capacity, as demonstrated by such PJM Net
Capability Verification Test, in less than ninety-nine percent (99%) of the
Target Rated Capacity for such PJM Net Capability Verification Test. In the
event the Rated Capacity, as demonstrated by such PJM Net Capability
Verification Test is greater than ninety-nine percent (99%) of the Target Rated
Capability Verification Test, but less than one hundred one percent (101%) of
the Target Rated Capacity for such PJM Net Capability Verification Test, Owner
may, in Owner's sole discretion, pay Operator a bonus in the Change in Rated
Capacity category of the AFAA of up to Five Thousand and 00/100 Dollars
($5,000.00).

                  If an event of Force Majeure prevents or disrupts the running
of a scheduled PJM Net Capacity Verification Test, Operator shall neither be
assessed liquidated damages nor receive a bonus under such test. The sole effect
of Force Majeure under this Section 6.1(b) shall be to cause a rescheduling of
such PJM Net Capability Verification Test. After conducting four (4)PJM Net
Capability Verification Tests, and paying bonuses and/or liquidated damages in
accordance with this Section 6.1(b), in the first two (2) Project Years, Owner
and Operator shall meet and, in consideration of actual Facility operation,
actual PJM Net Capability Verification Test results and the amounts of bonuses
paid and/or liquidated damages assessed, reevaluate the method used in
determining the Change in Rated Capacity category of the AFAA.

                  For purposes of this Section 6.1(b), the following definitions
shall apply:

                  "Rated Capacity" shall mean the capacity of the Facility,
expressed in kilowatts, as expressed by the following formula:

                  Rated Capacity = (CT MW at base load) + (HP Steam kpph/x) +
(IP Steam kpph/y)

                  Where:

                  CT MW means the rated capacity in megawatts of the gas turbine
at baseload, net of plant parasitic power.

                  HP Steam means the Adjusted HP Steam Output as such term is
used in the EPC Agreement.

                  IP Steam means the Adjusted IP Steam Output as such term is
used in the EPC Agreement.

                                       28
<PAGE>

                  x=7.4

                  y=20

                  "PJM Net Capability Verification Test" shall mean a
semi-annual test conducted, in accordance with the Test Plan, to determine the
Rated Capacity of the Facility. Each PJM Net Capability Verification Test shall
be conducted on the date determined by Owner, but no later than June 30th, for
the first such test during a Project Year and no later than December 31st for
the second such test during a Project Year. One such test will be performed at
PJM winter ambient temperature rating, and one such test will be performed at
PJM summer ambient temperature rating. All test data will be taken at PJM
ambient temperatures +/- 3 degrees F.

                  The PJM Net Capability Verification Test will be conducted
during a two-hour (2) period any time after the Facility has achieved steady
state operation. The results of the PJM Net Capability Verification Test will
consist of the average of three (3) data points, one at time zero, one at the
end of the first hour and one at the end of the second hour. The Target Rated
Capacity for the first Project Year will be determined from the results of the
acceptance test to be performed in accordance with the EPC Agreement. The peak
electric power rating and steam power augmentation capability of the equipment
shall not be utilized in such determination.

                  (c) Steam Delivery. The maximum bonus or liquidated damages
capable of being earned by or assessed against Operator in the Steam Delivery
category of the AFAA in any Project Year respectively shall be Fifteen Thousand
and 00/100 Dollars ($15,000.00) and Ten Thousand Dollars ($10,000.00). If, over
the course of a Project Year, fewer than two interruptions occur in the delivery
of steam, Operator shall receive a bonus in an amount up to Fifteen Thousand and
00/100 Dollars ($15,000.00) under the Steam Delivery category of the AFAA for
such Project Year. If two (2) or three (3) interruptions occur in the delivery
of steam to Steam Purchasers during a Project Year, then the AFAA for the Steam
Delivery category of the AFAA for such Project Year shall be zero. If more than
three (3) interruptions occur in the delivery of steam to Steam Purchasers
during a Project Year, Operator shall be assessed liquidated damages in an
amount up to Ten Thousand and 00/100 Dollars ($10,000.00) under the Steam
Delivery category of the AFAA for such Project Year. In no event shall the
amount of bonus earned or liquidated damages assessed in the Steam Delivery
category of the AFAA exceed Fifteen Thousand and 00/100 Dollars ($15,000.00) and
Ten Thousand and 00/100 Dollars ($10,000.00) in any Project Year. For purposes
of this category of the AFAA, a steam interruption shall be deemed to be any
event that lasts for sixty (60) minutes or more where the steam production rate
of steam delivered to the Existing Plant is reduced by eighty-five percent (85%)
as compared to the previous hour of steam production. A steam interruption event
shall be deemed to have ended whenever the Facility shall have achieved steady
state operation for a period in excess of one (1) hour.

                  (d) Net Plant Heat Rate. The maximum bonus or liquidated
damages capable of being earned by or assessed against Operator in the Net Plant
Heat Rate category of the AFAA in any Project Year respectively shall be Forty
Thousand and 00/100 Dollars ($40,000.00) and Twenty-eight Thousand Six Hundred
Sixty-eight and 00/100 Dollars ($28,668.00). Over the course of a Project Year,
operation of the Facility at the optimum net Plant heat rate increases
profitability. Owner shall evaluate Operator on its ability to achieve the

                                       29
<PAGE>
optimum net plant heat rate, and, subject to Owner's sole and complete
discretion, award Operator a bonus of up to Forty Thousand and 00/100 Dollars
($40,000.00) or assess Operator with liquidated damages of up to Twenty-eight
Thousand Six Hundred Sixty-eight and 00/100 Dollars ($28,668.00) in the Net
Plant Heat Rate category of the AFAA. The initial net plant heat rate shall be
determined pursuant to a performance test conducted within sixty (60) days after
the Turnover. The Net Plant Heat Rate category of the AFAA depends solely upon
Owner's subjective evaluation of Operator's overall performance of its
obligations with respect to Operator's attention to the Net Plant Heat Rate
during the Project Year. Solely for the purpose of guidance, the Net Plant Heat
Rate (NPHR) shall be calculated consistent with the following:

         NPHR = Total Fuel Used Btu HRV/ (GT KWhrs delivered + Steam KWhrs)

         Where:

         Steam KW Hrs = (HP Steam kpph/x) + (IP Steam kpph/y)

         x = 7.4

         y = 20

         HP Steam and IP Steam shall have the same meaning as used in Section
6.1(b) hereof.

         (e) O&M Costs. The maximum bonus or liquidated damages capable of being
earned by or assessed against Operator in the O&M Costs category of the AFAA
respectively shall be Fifteen Thousand and 00/100 Dollars ($15,000.00) and Ten
Thousand and 00/100 Dollars ($10,000.00). During each Project Year, this
Agreement contemplates the existence of an Approved Operating Budget. Developing
reliable budgets based on obtainable forecasts and realistic expectations, and
receiving such budgets and any revisions thereof in a timely manner, are
essential elements of Owner's ability to monitor its investment in the Facility.
Owner shall evaluate and compare the Approved Operating Budget for a given
Project Year against the costs and expenses actually incurred and, subject to
Owner's sole and complete discretion, award Operator a bonus of up to Fifteen
Thousand and 00/100 Dollars ($15,000.00) or assess Operator with liquidated
damages of up to Ten Thousand and 00/100 Dollars ($10,000.00) in the O&M Costs
category of the AFAA.

         (f) Subjective Factors. The maximum bonus or liquidated damages capable
of being earned by or assessed against Operator in the Subjective Factors
category of the AFAA in any Project Year respectively shall be Twenty-five
Thousand and 00/100 Dollars ($25,000.00) and Sixteen Thousand Six Hundred
Sixty-eight and 00/100 Dollars ($16,668.00). The Subjective Factors category of
the AFAA depends solely upon Owner's subjective evaluation of Operator's overall
performance of its obligations and services rendered hereunder. Subject to
Owner's sole and complete discretion, Owner shall evaluate Operator's
performance with respect to the following qualitative factors; frequency of
insurance claims and increases in related insurance costs, community and public
relations (5%), compliance with permits and easements (10%), safety and
environmental compliance (50%), turn-over of personnel (0%), development of
apprentice programs (0%), personnel management relevant to Urban Enterprise Zone
criteria (0%), timeliness of response to and handling of events of Force Majeure
(5%), working

                                       30
<PAGE>

relationship with Owner and Lender (5%), professionalism, profitability of the
Facility and overall handling and care of the Facility (25%). Periodically but
no more often than every three (3) months during each Project Year, Owner shall
deliver to Operator a list of the various qualitative factors, and any changes
in the qualitative factors, to be used by Owner in its subjective evaluation of
Operator's performance for the remainder of such Project Year. Based on Owner's
subjective evaluation of Operator's performance during a Project Year, Owner
shall, in Owner's sole and complete discretion, either award Operator a bonus of
up to Twenty-five Thousand and 00/100 Dollars ($25,000.00) or assess Operator
liquidated damages of up Sixteen Thousand Six Hundred Sixty-eight and 00/100
Dollars ($16,668.00) under the Subjective Factors category of the AFAA for such
Project Year or prorate such bonus accordingly based on the effective
qualitative factors and weighting percentage.

         6.2 Quarterly Meeting. Owner and Operator shall schedule and attend
regular quarterly meetings to discuss Operator's performance of the Work and
Owner's evaluation thereof and, when necessary, to review and revise the list of
qualitative factors described in Section 6.1(f) above.

         6.3 Partial Project Year. In any partial Project Year, the amounts
attributable to each category of the AFAA and the overall limitation placed on
the AFAA itself shall be prorated based on the number of calendar days in such
partial Project Year divided by 365 or 366, as the case may be.

         6.4 Payment of Annual Fee Adjustment Amount. Not later than thirty (30)
days after the end of each Project Year, Owner shall render a statement to
Operator, with all necessary and appropriate supporting documentation,
calculating the amount of bonus payments due to Operator and/or the amount of
liquidated damages due to Owner under each category of the AFAA. If the AFAA
results in an amount payable by Operator to Owner, such amount shall be set off
against that portion of the O&M Fee for such Project Year that has not yet been
advanced to Operator, and the balance, if any, shall be paid by Operator to
Owner within thirty (30) days after Owner delivers the statement therefor to
Operator. If the AFAA results in an amount payable by Owner to Operator, such
amount shall be paid by Owner within thirty (30) days after Owner delivers the
statement therefor to Operator. A party's obligation to pay the AFAA to the
other party shall survive the termination of this Agreement, even though such
AFAA may not be capable of being calculated until after the termination of this
Agreement.

         6.5 Application of CPI Adjustment. Each of the dollar amounts
indicated in Section 6.1 above shall be adjusted in accordance with the
provisions of Section 5.5 hereof.

         6.6 Change in Conditions or Circumstances. If during the term of this
Agreement conditions or circumstances change from those in effect an the
Turnover Date such that there is either a material increase or decrease in the
responsibilities and obligations of Operator hereunder from those
responsibilities and obligations of Operator as of the Turnover Date, then Owner
and Operator shall meet and negotiate an equitable adjustment to the manner in
which the AFAA is determined, including, without limitation, revisions to the
categories of evaluation used in determining the AFAA, the relative weightings
thereof and the overall limit on the AFAA, if necessary.

                                       31
<PAGE>

         6.7 Employee Bonuses. Operator shall pay to the Operator Personnel and
the GE O&M Personnel as bonuses in the aggregate not less than twenty-five
percent (25%) of the AFAA for each such Project Year; provided, however, Owner
may pay, in Owner's sole discretion, additional bonuses to the Operator
Personnel and the GE O&M Personnel during any Project Year.

                                      VII.
                         WARRANTY; CORRECTION OF DEFECTS

         7.1 Warranty. Operator warrants that (i) the Work hereunder shall be
performed in a first-class, competent, cost-conscious manner appropriately
qualified personnel, (ii) the Work shall be performed in accordance with the
terms and conditions of this Agreement, including all standards set forth
herein, and (iii) all aspects of such Work shall be suitable for the purpose of
generating steam and electricity as contemplated in the Related Agreements.

         7.2 Consequence of Breach. In the event Operator breaches any warrant
described in Section 7.1 above, Operator shall re-perform any defective
service, replace any unfit or unqualified personnel and train new personnel, and
repair or replace any components of the Facility damaged as a consequence of
such breach. Any such re-performance, training, repair or replacement by
Operator pursuant to this Section 7.2 shall be at Operator's sole cost and
expense.

         7.3 Vendor Warranties. Operator shall use its best efforts to obtain
not less than one-year vendor warranties for all spare parts and replacement
parts, other than parts having a useful life of less than one year and parts
supplied by Owner pursuant to Article III. Any warranties obtained by Operator
from outside vendors or subcontractors shall be assignable and passed through to
Owner, but, during the term of Agreement, Operator shall maintain, administer
and enforce such warranties for the benefit of Owner; provided, however,
Operator shall not file suit to enforce any such warranty without the prior
written consent of Owner.

         7.4 Exclusions. This warranty is exclusive and in lieu of all other
warranties, whether written, oral, implied, or statutory. NO IMPLIED
STATUTORY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE
SHALL APPLY.

                                      VIII.
                                      TERM

         (a) Unless sooner terminated as provided herein, the term of this
Agreement shall begin on the Execution Date and shall extend for an initial term
expiring at the end of the day on December 31, 2008; provided, however, Owner
shall have the right, in Owner's sole discretion, to terminate this Agreement
effective either (i) as of December 31, 2003 or (ii) December 31, 2006 for
convenience by delivering to Operator written notice of such termination on or
before one hundred eighty (180) days prior to the effective date of termination.

         (b) If Owner elects to terminate this Agreement effective as of
December 31, 2003, Owner agrees to pay Owner the 2003 Termination Fee (as
defined hereinbelow) in accordance with the terms hereof.

         The "2003 Termination Fee" shall be due and payable as follows:

                                       32
<PAGE>

         (i)      Five Hundred Thousand and 00/100 Dollars ($500,000.00), which
                  shall be due and payable by Owner to Operator within thirty
                  (30) days after the termination of this Agreement, plus

         (ii)     the reasonable costs actually incurred by Operator in
                  transferring, relocating and/or terminating Operator's
                  personnel at the Facility and terminating subcontracts
                  pertaining to the Facility up to a maximum of One Hundred
                  Fifty Thousand and 00/100 Dollars ($150,000.00), which shall
                  be due and payable by Owner to Operator within thirty (30)
                  days after receipt by Owner from Operator of an invoice
                  accompanied by all relevant documentation reasonably necessary
                  for Owner to verify the accuracy thereof.

         (c) If Owner elects to terminate this Agreement effective as of
December 31, 2006 Owner shall pay Operator the reasonable costs incurred by
Operator in terminating subcontracts pertaining to the Facility up to a maximum
of One Hundred Fifty Thousand and 00/100 Dollars ($150,000.00) which shall be
due and payable by Owner to Operator within thirty (30) days after receipt by
Owner from Operator of an invoice accompanied by all relevant documentation
reasonably necessary for Owner to verify the accuracy thereof.

                                       IX.
                                   TERMINATION

         9.1 Event of Default. Should any of the following events or conditions
occur, the same shall constitute an event of default under this Agreement
(herein called an "Event of Default"):

         (a) Operator breaches any of its material obligations under this
Agreement.

         (b) Owner breaches any of its material obligations under Agreement.

         (c) If any representation or warranty of Operator or Owner under
Article XIV hereof shall prove untrue in any material respect.

         (d) If, in any two (2) successive Project Years, Operator incurs the
maximum liquidated damages possible under Article VI hereof for each such
successive Project Year, then such occurrence shall be an Event of Default by
Operator.

         (e) If Operator's aggregate limit of liability over the term of this
Agreement as set forth in Section 17.1 hereof is reached, then such occurrence
shall be an Event of Default by Operator.

         (f) An Event of Default of Operator under the Existing Plant O&M
Agreement.

         9.2 Termination Upon Breach. If either party commits an Event of
Default, the other party (hereinafter the "Non-Defaulting Party") may give such
party in default (the "Defaulting Party") a written notice describing such
default in reasonable detail and demanding

                                       33

<PAGE>
that the Defaulting Party cure such default; provided, however, Operator shall
have no right to cure the Events of Default set forth in Sections 9.1(d) and
9.1(e) above. If the Defaulting Party does not cure its default within twenty
(20) days after its receipt of such notice, or if the default is such that it
cannot be cured within such period of time and the Defaulting Party does not
promptly commence action within such twenty (20) day period which is calculated
to cure such default and thereafter diligently pursue such action to completion,
the Non-Defaulting Party shall have the right to terminate this Agreement by
written notice to the Defaulting Party, without prejudice to any remedies at law
or in equity which are available to the Non-Defaulting Party by reason of the
Defaulting Party's default. Provided Operator is performing all of its
obligations under this Agreement in accordance with the terms and conditions
hereof, it shall not constitute an Event of Default if Operator falls to earn a
bonus for any Project Year, so long as Operator shall pay Owner when due any
associated liquidated damages required to be paid under Article VI hereof and
promptly makes all corrections to the Facility as may be required hereunder.
Notwithstanding anything stated herein, a good faith dispute with respect to the
payment of any amount claimed to be due hereunder, for so long as such dispute
remains unresolved and contested in good faith, shall not be considered an Event
of Default.

         9.3 Termination for Insolvency. Subject to Article XII hereof, either
party may terminate this Agreement by written notice to the other party if the
other party (i) commences a proceeding under Federal or state bankruptcy,
insolvency or reorganization law, or (ii) has such a proceeding filed against it
and fails to have such proceeding stayed or vacated within sixty (60) days or
upon the end of any such stay, fails to have such involuntary proceeding vacated
within sixty (60) days thereafter, or (iii) admits the material allegations of
any petition in bankruptcy filed against it, or (iv) is adjudged bankrupt, or
(v) makes a general assignment for the benefit of its creditors, or (vi) has a
receiver appointed for all or a substantial portion of such party's assets which
receiver is not discharged within sixty (60) days after his appointment. Any
termination of this Agreement pursuant to this Section 9.3 shall be considered
to be by reason of anticipatory breach of contract, and such termination shall
be without prejudice to any rights the terminating party may have by reason of
such anticipatory breach.

         9.4 Owner's Additional Remedies. After termination of this Agreement by
Owner by written notice pursuant to Section 9.2 or 9.3 hereof, Owner may, in
addition to its other rights hereunder, take possession of and utilize any
materials, tools, equipment, manuals, records and other property of any kind
furnished by Operator, paid for by Owner, and necessary or intended to be used
to operate the Facility. Operator shall not be entitled to receive any further
payments under this Agreement except for payments for services provided prior to
termination of this Agreement. Operator and Owner shall continue to be bound by
such provisions of this Agreement that shall survive the termination hereof. In
addition, Operator shall remain liable for all liquidated damages hereunder
which have accrued but have not yet been paid at the time of such termination.

         9.5 Transfer of Operations Upon Termination. Upon termination of this
Agreement for any reason, Operator shall fully cooperate with Owner in the
transfer of the performance of Operator's obligations hereunder to Owner or a
third party designated by Owner. Without limiting the foregoing, Operator shall
provide Owner and such third party with such information as may be reasonably
necessary for the safe and proper operation and maintenance of the Facility. The
parties acknowledge Owner's interest that the Facility be operated and

                                       34
<PAGE>
maintained during the final Project Year of this Agreement or portion thereof,
whether or not commensurate with the term hereof, to the same standards as it is
operated and maintained throughout the term of this Agreement and that personnel
of Owner have an opportunity to gain experience in the operation and maintenance
of the Facility during such final Project Year. Accordingly, Operator agrees
that Owner may send its personnel to the Facility during the final Project Year
for the purposes of monitoring Operator's performance under the terms of this
Agreement and gaining experience in operation and maintenance of the Facility,
without charge to Owner (except for the cost of Owner's personnel), provided
that Owner's personnel do not interfere with the continuing operation and
maintenance of the Facility by Operator pursuant to the terms hereof. Owner,
however, shall remain fully liable for the actions and inactions of its
employees during such time period. Upon termination of this Agreement, Operator,
to the extent permitted by law, shall assign to Owner any existing warranties
obtained by Operator on the Facility or any portion thereof and shall, promptly
deliver to Owner all copies of the Facility Data, drawings, books and originals
or certified copies of all records relating to the operation and maintenance of
the Facility that are required to be maintained by Operator hereunder as of the
date of such termination.

         9.6 Condition of Facility Upon Termination. Upon expiration or
termination of this Agreement, Operator shall leave the Facility in as good
condition as on the Turnover Date, normal wear and tear excepted, and with the
equivalent supply of Consumables (other than spare parts) and other operating
items as were provided by Owner to Operator. All special tools, improvements,
inventory of supplies, spare parts, safety equipment (as provided to or obtained
by or provided by Operator during the term of this Agreement) and any other
items furnished by Operator hereunder will be left at the Facility and will
become or remain the property of Owner - without additional charge.

         9.7 Survival of Obligations. Termination of this Agreement for any
reason shall not relieve Owner or Operator of any obligation accrued or accruing
prior to such termination. Without limiting the generality of the foregoing,
Owner and Operator shall continue to be bound by Section 6.4, Article VII,
Sections 9.4, 9.5, 9.6 and 9.7, Article XIII, Article XVIII, Article XIX,
Article XXI, and such provisions shall survive the termination of this
Agreement.

                                       X.
                                    INSURANCE

         10.1 Operator Insurance Coverage. Operator shall secure and maintain as
a minimum during the term of this Agreement the following insurance:

         (a) Worker's Compensation, subject to statutory limits.

         (b) Employer's Liability, with limits as follows:

             (i) Bodily Injury by Accident - $1,000,000 per accident;

             (ii) Bodily Injury by Disease - $1,000,000 policy limit; and

             (iii) Bodily Injury by Disease - $ 1,000,000 per each employee.

                                       35
<PAGE>
         (c) Comprehensive (Business) Automobile Liability including automobile
contractual liability endorsement in an amount equal to a "combined single
limit" coverage for bodily injury and property damage limit of One Million and
00/100 Dollars ($1,000,000.00) per accident, in comprehensive form and covering
hired, owned and non-owned vehicles, including, without limitation, vehicles
leased by Operator from Owner. Such insurance shall name Owner and Lender as
Additional Insureds.

         (d) Comprehensive (Commercial) General Liability Insurance in an amount
equal to at least One Million and 00/100 Dollars ($1,000,000.00) per occurrence,
"combined single limit" coverage. Such insurance shall contain such coverages as
Operator normally maintains for its own protection to include
Premises/Operations, Explosion, Collapse and Underground Hazards, Broad Form
Contractual; Independent Contractors, Products/Completed Operations, Broad Form
Property Damage (excluding care, custody and control), Personal Injury, Cross
Liability including a Broad form Contractual endorsement to meet the liability
assumed in Section 13.1 hereof. Such insurance shall name Owner and Lender as
Additional Insureds.

         (e) Excess (or Umbrella) Liability insurance providing total or excess
limits for, and following the form of; the policies referred to in Section
10.1(b), (c) and (d) so as to bring the total of each up to Twenty-five Million
and 00/100 Dollars ($25,000,000.00) per occurrence, and in the annual aggregate
where applicable. Such insurance shall name Owner and Lender as Additional
Insureds.

         (f) Aircraft and Marine insurance should any aircraft or watercraft be
used in the Work. Such insurance shall be at limits at least equal to those
specified in Section 10.1(e) above. Such insurance shall name Owner and Lender
as Additional Insureds.

         10.2 Owner Insurance Coverage. Owner shall secure and maintain during
the term of this Agreement the following insurance:

         (a) Worker's Compensation, subject to statutory limits.

         (b) Employer's Liability, with limits as follows:

             (i)   Bodily Injury by Accident - $1,000,000 per accident;

             (ii)  Bodily Injury by Disease - $1,000,000 policy limit; and

             (iii) Bodily Injury by Disease - $1,000,000 per each employee.

         (c) Commercial General Liability Insurance covering legal liability of
the insured for damage to property of third parties or bodily injury to third
parties arising out of the ownership, operation and maintenance of the Facility,
in an amount equal to One Million and 00/100 Dollars ($1,000,000.00) per
occurrence, "combined single limit" property damage/bodily injury coverage. Such
insurance policy shall be endorsed naming Lender as an Additional Insured and
Operator as an Additional Insured in connection with claims arising out of or
relating in any way to Operator's presence on the Site or for the Work to be
performed pursuant to this Agreement only, and shall include
Premises/Operations, Explosion, Collapse and Underground Hazards, Broad Form
Contractual, Independent Contractors, Products/Completed Operations, Broad
Form Property Damage, Personal Injury, Cross Liability (Insured vs. Insured)

                                       36
<PAGE>
and a Broad Form Named Insured endorsement; provided, however, if a claim is
made under such insurance and the claim is not based upon the negligence or
willful misconduct of Operator, then Operator acknowledges it shall have no
right to any recovery with respect to such claim and, in furtherance thereof,
Operator shall execute and deliver to Owner the appropriate waiver forms
necessary for a check to be issued by the insurer solely in the name of Owner.

         (d) Excess (or Umbrella) Liability insurance providing total or excess
limits for, and following the form of, the policies referred to in Section
10.2(b) and (c) so as to bring the total of each up to Twenty-five Million and
00/100 Dollars ($25,000,000.00) per occurrence, and in the annual aggregate
where applicable. Such insurance policy shall be endorsed naming Lender as an
Additional Insured and Operator as an Additional Insured in connection with
claims arising out of or relating in any way to Operator's presence on the Site
or for the Work to be performed pursuant to this Agreement only; provided,
however, if a claim is made under such insurance and the claim is not based upon
the negligence or willful misconduct of Operator, then Operator acknowledges it
shall have no right to any recovery with respect to such claim and, in
furtherance thereof; Operator shall execute and deliver to Owner the appropriate
waiver forms necessary for check to be issued by the insurer solely in the name
of Owner.

         (e) Property Insurance on an "All Risk" basis covering physical damage
or loss to all real and personal property of Owner located at the Site and to
off-premises electrical, gas, and steam transmission lines and facilities, and
other equipment for which Owner has an insurable interest and in an amount not
less than one hundred percent (100%) of the full replacement value of such
property. Such coverage shall meet all requirements for property insurance set
forth in the Related Agreements and shall name Lender as an Additional Named
Insured.

         (f) Boiler and Machinery Insurance on the Facility for all insurable
objects, including but not limited to pressure vessels, turbines and equipment,
electrical generators, motors, air tanks, boilers, machinery, pressure piping or
similar apparatus, on a comprehensive form in an amount not less than one
hundred percent (100%) of the full replacement value of such property. Such
insurance policy shall cover objects at all locations required to be insured
under Section 10.2(e) above and shall name Lender and Operator as Additional
Insureds. Owner shall have the right at any time, and from time to time, at
Owner's sole option, to combine the Property Insurance and the Boiler and
Machinery Insurance into a single policy. Owner shall be relieved of the
obligation to renew the business interruption coverage under said Property
Insurance and Boiler and Machinery Insurance in the event such business
interruption coverage cannot be purchased at commercially reasonable rates.

         (g) Pollution Legal Liability Insurance for both gradual and sudden and
accidental pollution, with limits in accordance with applicable New Jersey
statutory requirements. Owner shall cause Operator to be named as a Named
Insured on the policy. In the event that Owner is unable to obtain such coverage
at reasonable rates, Owner may, at its sole option, demonstrate financial
responsibility by any method permitted by applicable New Jersey statute. If
Owner elects the above option, Owner shall so advise Operator thirty (30) days
prior to the inception date of such change.

                                      37
<PAGE>
         10.3 Form and Content of Insurance. All policies, and binders with
respect to insurance provided pursuant to this Article X shall be as follows:

         (a) Form of Policies. All insurance provided for hereunder shall be
placed on forms reasonably acceptable to Owner, Operator, and Lender.

         (b) Insurance Companies. All insurance required hereunder shall be
issued by and binding upon insurance companies reasonably acceptable to Owner,
Operator and Lender that are licensed or authorized to do business in the State
of New Jersey. Operator, at its option, may use Electric Insurance Company to
provide coverage under Sections 10.1(a), 10.1(b) and 10.1(c) of this Agreement.

         (c) Additional Insureds shall include the officers, directors and
employees of each entity so named as its interests may appear.

         (d) Severability. All liability insurance shall contain a severability
of interest provision providing that, except with respect to the total limits of
liability, the insurance shall apply to each Insured or Additional Insured in
the same manner as if separate policies had been issued to each.

         (e) Non-Recourse. All insurance shall provide that there will be no
recourse the Additional Insureds for the payment of premiums or commissions or
(if such policies provide for the payment thereof) additional premiums or
assessments.

         (f) Waiver of Subrogation. All insurance maintained by Operator and
Owner hereunder except for the insurance required pursuant to Section 10.1(b)
and (c) and Section 10.2(b) hereof shall provide for the waiver of any right of
subrogation by the insurers thereunder against Owner, Operator and Lender and
the officers, directors and employees, agents and representatives of each of
them, and any right of the insurers to any setoff or counterclaim or any other
deduction, whether by attachment or otherwise, in respect of any liability of
any such person insured under such policy.

         (g) Notice of Cancellation. All insurance shall provide that it may not
be canceled or materially changed without giving Owner, Operator, and Lender
thirty (30) days prior written notification thereof; except in cases of
non-payment of premium for which ten (10) days prior written notice shall be
provided (unless longer notice period for non-payment is agreed to by the
relevant insurer).

         (h) Breach of Warranty. The interest of any Insured or Additional
Insured shall not be invalidated by any action or inaction of any of the other
parties so named.

         10.4 Additional Requirements.

         (a) Certificates; Proof or Loss. Prior to the performance of any Work
by Operator hereunder, each party shall furnish certificates of insurance to the
other party evidencing the insurance required of such party pursuant to this
Agreement. The party maintaining each policy hereunder shall make all proofs of
loss under each such policy, and shall take all other action reasonably required
to ensure collection from insurers for any loss under any

                                      38
<PAGE>
such policy, except that Owner may require Operator to provide such proof of
loss and take such other action on behalf of Owner in the case of the insurance
maintained by Owner pursuant to Section 10.2(c), (d), (e) and (f). Operator
shall provide Owner with copies of insurance policies obtained by it promptly
upon Owner's request.

         (b) Insurance Report. Concurrently with the furnishing of the
certification referred to in Section 10.4(a), Operator shall furnish Owner and
Lender with an opinion of each insurance broker stating that all premiums then
due have been paid and that, in the opinion of such broker, the insurance then
carried and maintained with respect to the Facility is in accordance with the
term of this Article. Furthermore, Operator shall cause each insurer or such
broker to advise Owner and Lender in writing of any default in the payment of
any premiums or any other act or omission on the part of Operator which might
invalidate or render unenforceable, in whole or in part, any insurance provided
hereunder. Owner may at its sole option obtain such insurance if not provided by
Operator and, in such event, Operator shall reimburse Owner upon demand for the
cost thereof.

         (c) Payment of Deductibles and Self-Insured Retention Amounts. Owner
shall be responsible for deductibles or self-insured retention under all of the
insurance policies required to be carried by Owner pursuant to Section 10.2
hereof, except in the event of loss or damage due to the negligence or willful
misconduct of Operator, in which case Operator shall be liable proportionately
to the extent of Operator's negligence or willful misconduct, for the
deductibles and/or self-insured retention applicable to such insurance up to but
not exceeding Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) per
occurrence. In addition, Operator shall be responsible for all deductibles and
self-insured retention under other policies maintained by Operator. Owner may,
in its sole discretion, change the deductibles or self-insured retention under
any of the insurance policies that it is required to carry pursuant to Section
10.2 hereof and shall promptly give Operator written notice of any such change;
provided, however, that Operator shall not be responsible for any deductibles or
self-insured retention in excess of Two Hundred Fifty Thousand and 00/100
Dollars ($250,000.00) per occurrence.

         (d) Subcontractor Insurance. Operator shall require all subcontractors
and suppliers to obtain, maintain, and keep in force, prior to entry on the Site
and during the time in which they are engaged in performing services to be
furnished by Operator adequate coverage in accordance with Operator's normal
practice and shall provide Owner with current certificates of insurance
evidencing such coverage.

         (e) Notification. Operator agrees to advise Owner as soon as
practicable writing of any notice of claim to which insurance pursuant to this
Article X applies.

         (f) Step-in Rights. Should either party fail to provide or maintain any
of the insurance policies required of it, the other party or any Lender shall
have the right to provide and/or maintain such coverage at the other party's
expense once the other party has had a reasonable time to cure.

         (g) Capitalized Terms. Capitalized terms used in this Article X and not
otherwise defined in this Agreement shall have the meanings generally ascribed
to them in the commercial insurance industry in the United States of America.

                                      39
<PAGE>
         (h) Disclosure. When requested, Operator agrees to make full disclosure
to insurers of all material facts and circumstances as required by the terms of
any insurance policy under which Operator is named as an Additional Insured.

                                       XI.
                                  NOTIFICATIONS

         Any notice to either party required or permitted hereunder shall be in
writing and shall be given by (i) personal delivery, (ii) commercial courier
(iii) registered or certified U. S. mail, return receipt requested, postage
prepaid, or (iv) facsimile if also given by personal delivery, commercial
courier or registered or certified U.S. mail, return receipt requested, postage
prepaid, within three (3) days after the facsimile transmission, all such
notices to be addressed as follows:

                             If to Owner.

                                           JEDI Linden NB, L.L.C.
                                           Pennzoil Building - South Tower
                                           711 Louisiana
                                           32nd Floor
                                           Houston, TX 77002
                                           Attention: Mr. Robert J. Licato
                                           Facsimile: (713) 345-9705

                             with copy to:

                                           Enron North America Corp.
                                           1400 Smith Street
                                           Houston, TX 77002
                                           Attention: Ms. Lisa Mellencamp
                                           Facsimile: (713) 853-7986

                             If to Plant:

                                           East Coast Power L.L.C.
                                           c/o Bayway Refining Company
                                           Railroad and Chemical Avenue
                                           Linden, New Jersey 07036
                                           Attention: General Manager
                                           Facsimile: (908) 474-0801
                                           and

                                           East Coast Power, L.L.C.
                                           1095 Cranbury South River Rd.
                                           Jamesburg, New Jersey 08831
                                           Attention: Vice President, Operations
                                           Facsimile: (609) 409-9404

                                      40
<PAGE>

                              If to Operator:

                                            General Electric International, Inc.
                                            4200 Wildwood Parkway
                                            Atlanta, Georgia 30339
                                            Attention: Region Manager,
                                            Northeast Region
                                            Facsimile: (770) 859-7796

Notice by personal delivery shall be effective when made and notice by
commercial courier or by mail shall be deemed effective upon receipt. A copy of
each such notice shall, to the extent reasonably practicable, also be forwarded
by telecopier.

                                      XII.
                           ASSIGNMENT; LENDERS RIGHTS

         12.1 Assignment. Neither Owner nor Operator may assign all or any part
of their interests in this Agreement without the prior written consent of the
other, which consent shall not be unreasonably withheld, delayed or conditioned;
provided, however, Owner may assign its rights under this Agreement (i) to any
Affiliate of Owner and (ii) as security for the payment of any indebtedness
payable or to become payable to any Lender. Operator may assign this Agreement
to any Affiliate of Operator, provided however that Operator shall first deliver
to Owner and any Lender a guarantee of such Affiliate's performance hereunder in
form and substance acceptable to Owner and any Lender. In connection therewith,
if requested by any Lender, Operator will execute an appropriate consent to any
such assignment. Moreover, if requested by any Lender, Owner and Operator will
execute a Recognition Agreement with Lender substantially in the form shown in
Exhibit D attached hereto and made a part hereof for all purposes. This
Agreement shall be binding on and shall inure to the benefit of the parties and
their respective successors and assigns to the extent that assignment is
permitted under this Agreement.

         12.2 Lenders Rights. (a) Operator agrees that so long as any such
assignment to any Lender or any Recognition Agreement with any Lender shall
remain in effect or until written notice of satisfaction is given to Operator by
such Lender, the following provisions will apply:

                  (1) except for the natural expiration of the term of this
         Agreement (after giving effect to any renewal terms), there shall be no
         modification of this Agreement without the prior written consent of
         Lender which consent shall not be unreasonably withheld;

                  (2) Operator will not terminate, cancel or surrender this
         Agreement by reason of Owner's default without giving any Lender the
         same notice and right to cure such default as Owner may have (plus an
         additional thirty (30) days); provided, that if the default is a
         non-monetary default and (i) is of such nature that it cannot be cured
         without first taking possession of the Facility or (ii) is of such
         nature that it is not susceptible of being cured by Lender, then
         Operator shall have no right to terminate this Agreement by reason of
         such default if and so long as Lender shall proceed diligently to
         attempt to

                                       41
<PAGE>

         obtain possession of the Facility or exercise its remedies pursuant to
         the financing agreements including possession by a receiver and upon
         obtaining such possession, Lender shall proceed diligently to cure such
         default if such default is susceptible of being cured by Lender;

                  (3) Operator will not terminate this Agreement by reason of
         Owner's default under Section 9.3 if a Lender has cured any monetary
         default and has diligently commenced and is diligently continuing to
         exercise its remedies under any of the financing agreements;

                  (4) Operator will deliver to any Lender a copy of each notice
         of default and notice of termination, extension or renewal at the same
         time that any such notice is delivered to Owner;

                  (5) upon instructions from any Lender, Operator will make any
         payments due to Owner hereunder in accordance with such instructions;

                  (6) if a Lender or a Permitted Transferee shall acquire title
         to or possession of the Facility or shall appoint a new managing
         general partner of Owner, then Operator shall accept performance from
         Lender or such Permitted Transferee so long as Lender or such Permitted
         Transferee shall have paid to Operator all costs and fees herein
         provided for, and then due and payable, and shall comply or cause Owner
         to comply with the other provisions of this Agreement. Upon acquiring
         title to or possession of the Facility, Lender shall have the same
         rights as Owner with respect to the availability and review of books
         and records of the Facility; and

                  (b) Lender, as such, shall not be deemed to assume the
performance of any of the terms, covenants or conditions on the part of Owner to
be performed hereunder, but the purchaser, assignee or transferee of this
Agreement under any instrument of sale, assignment or transfer pursuant to or in
connection with any proceedings for the foreclosure of any leasehold mortgage
affecting the Facility shall be deemed to be an assignee or transferee within
the meaning of this Agreement, and shall be deemed to have agreed to perform all
of the terms, covenants and conditions on the part of Owner to be performed
hereunder from and after the date of such purchase and assignment, but only for
so long as such purchaser or assignee is the owner of such leasehold estate.

                  (c) Notwithstanding any other provisions of this Agreement,
any sale, transfer, or assignment of this Agreement to Lender or a Permitted
Transferee pursuant to or in connection with (1) any proceedings for the
foreclosure of any leasehold mortgage affecting the Facility or (2) the exercise
by Leader of any other remedies under any of the financing agreements shall be
deemed to be a permitted sale, transfer or assignment of this Agreement.

                  (d) Any Lender or any Permitted Transferee may sell, assign or
transfer this Agreement to a Permitted Transferee; provided, however, that such
Lender or Permitted Transferee shall remain liable hereunder for the
obligations, if any, incurred by it prior to the sale, assignment or transfer.

                                       42

<PAGE>

         12.3 Estoppel Certificate. Operator shall, without charge, at any time
and from time to time hereafter, but not more frequently than twice in any
one-year period (or more frequently if such request is made in connection with
any sale or mortgaging of Owner's leasehold interest), within thirty (30) days
after written request of Owner, certify by written instrument duly executed and
acknowledged to any Lender or Permitted Transferee or any other person, firm or
corporation specified in such request: (a) as to whether this Agreement has been
supplemented or amended, and if so, the substance of such supplement or
amendment; (b) as to the validity and force and effect of Agreement; (c) as to
the existence of any Event of Default hereunder; (d) as to the existence of any
offsets, counterclaims or defenses hereto on the part of Owner; and (e) as to
any other matters as may be reasonably so requested. Any such certificate may be
relied upon by Owner and any other person, firm or corporation to whom the same
may be exhibited or delivered, and the contents of such certificate shall be
binding on Operator.

         12.4 Legal Opinion. Incident to the execution of this Agreement, if
requested by Owner, Operator shall furnish to Owner and any Lender or Permitted
Transferee an opinion of counsel to Operator with respect to the enforceability
of this Agreement against Operator and covering such other matters as may be
reasonably requested by Owner.

                                     XIII.
                                 INDEMNIFICATION

         13.1 Operator Indemnity. Operator shall indemnify, defend and hold
harmless Owner, Lender, Exxon, Bayway and their respective Affiliates, and
partners, joint venturers, officers, agents, employees, successors and assigns
(collectively, the "Owner Indemnitees") from and against any and all suits,
actions, legal or administrative proceedings, claims, demands, penalties, costs
and expenses (including attorneys' fees, court costs and all costs or expenses
related to environmental clean-up, containment, remediation or removal of
hazardous waste or pollution to property of third parties) of any nature for
personal injury or death or physical damage to property of any third party
(including employees of Operator and its subcontractors) arising out of or
resulting from the performance or non-performance of the Work or any other
activities on or about the Site or other locations where the Work is performed
to the extent that the same is caused by any negligent act or negligent omission
of, or willful misconduct or intentional act by, Operator or its subcontractors
or suppliers, or anyone employed by any of them or anyone for whose acts any of
them my be liable, unless solely caused by the negligence of any of the Owner
Indemnitees. In the event that such damage or injury is caused by the joint or
concurrent negligence of Owner, its employees, subcontractors (other than
subcontractors of Operator) or agents, the loss shall be borne by Operator and
Owner proportionately to their degree of fault. In the event Operator shall be
liable for any loss, costs and expenses pursuant to this Section 13.1, the
proceeds of the insurance policies referred to in Section 10.2(c) and (d) shall
first apply, other than as stipulated therein, to the loss, costs and expenses.
If such proceeds are insufficient to cover all such loss, costs and expenses,
Operator shall be liable for and shall pay for all sums in excess of such
insurance proceeds; provided, however, in the event that such loss, costs and
expenses are caused by the joint or concurrent negligence of Owner, its
employees, subcontractors (other than subcontractors of Operator) or agents, the
loss, costs and expenses shall be borne by Operator and Owner proportionately to
their degree of fault. Notwithstanding anything herein to the contrary, in the
event of loss or damage due to the negligence or willful misconduct of
Operator, Operator shall be liable, proportionately to the

                                       43

<PAGE>

extent of Operator's negligence or willful misconduct, for the deductibles,
self-insured retention and waiting period deductibles applicable to the
insurance policies required to be carried by Owner pursuant to Section 10.2
hereof.

         13.2 Owner Indemnity. Owner shall indemnify, defend and hold harmless
Operator and its Affiliates and partners, joint venturers, officers, agents,
employees, successors, and assigns (collectively, the "Operator Indemnitees")
from and against any and all suits, actions, legal or administrative
proceedings, claims, demands, penalties, costs, and expenses (including
attorneys' fees, court costs and all costs or expenses related to environmental
cleanup, containment, remediation or removal of hazardous waste or pollution to
property of third parties) of any nature for personal injury or death physical
damage to property of any third party (including employees of Owner and its
subcontractors) arising out of or resulting from the performance or
non-performance of Owner of its obligations hereunder or any of Owner's
activities on or about the Site or other location where Owner is to perform its
obligations hereunder to the extent that the same is caused by any negligent act
or negligent omission of, or willful misconduct or intentional act by, Owner,
its subcontractors (other than subcontractors of Operator) or suppliers (other
than suppliers of Operator), or anyone employed by any of them, or anyone for
whose acts any of them may be liable, unless solely caused by the negligence of
any of the Operator Indemnitees. In the event that such damage or injury is
caused by the joint or concurrent negligence of Operator or its employees,
contractors, subcontractors or agents, the loss shall be borne by Operator and
Owner proportionately to their degree of fault.

         13.3 No Limitation. In any and all claim against any of the Owner
Indemnitees by any employee of Operator, any of Operator's subcontractors or
suppliers, or anyone directly or indirectly employed by any of them or anyone
for whose acts any of them may be liable, the indemnification obligation under
Section 13.1 shall not be limited in any way by any limitation on the amount or
type of damages, compensation or benefits payable by or for Operator or any of
its subcontractors or suppliers under workers' or workmen's compensation acts,
disability benefit acts or other employee benefits acts, nor by the provision by
Operator of any insurance required to be provided under this Agreement.

                                      XIV
                         REPRESENTATIONS AND WARRANTIES

         14.1 Representations and Warranties of Owner. Owner hereby represents
and warrants to Operator as follows:

             (a) Owner is a limited liability company duly organized and
existing in good standing under the laws of the State of Delaware and is
qualified to do business in the State of New Jersey.

             (b) Owner possesses all requisite power and authority to enter into
and perform this Agreement and to carry out the transactions contemplated
herein.

             (c) Owner's execution, delivery, and performance of Agreement have
been duly authorized, and Agreement has been duly executed and delivered and
constitutes Owner's legal, valid, and binding obligation, enforceable against
Owner in accordance with its terms,

                                       44
<PAGE>

except as may be limited by bankruptcy, insolvency and other legal principles
pertaining to creditor's rights.

             (d) No suit, action or arbitration, or legal, administrative or
other proceeding is pending or, to Owner's knowledge, threatened against Owner
that would affect the validity or enforceability of Agreement or the ability of
Owner to fulfill its obligations and commitments hereunder.

             (e) No material consents or approvals are required in connection
with the execution, delivery and performance by Owner of this Agreement.

             (f) The execution, delivery and performance by Owner of this
Agreement will not (i) violate any law, rule or regulation applicable to Owner,
(ii) result in any breach of, or constitute any default under, any contractual
obligation of Owner, or (iii) result in, or require, the creation or imposition
of any Lien or other encumbrance on any of the properties or revenues of Owner.

         14.2 Representations and Warranties of Operator. Operator hereby
represents and warrants to Owner as follows:

             (a) Operator is a corporation duly organized and existing in good
standing under the laws of the State of New York and is qualified to do business
in the State of New Jersey.

             (b) Operator possesses all requisite power and authority to enter
into and perform this Agreement and to carry out the transactions contemplated
herein.

             (c) Operator's execution, delivery, and performance of this
Agreement have been duly authorized, and this Agreement has been duly executed
and delivered and constitutes Operator's legal, valid, and binding obligation,
enforceable against Operator in accordance with its terms, except as may be
limited by bankruptcy, insolvency and other legal principles pertaining to
creditors' rights.

             (d) No suit, action or arbitration, or legal, administrative or
other proceeding is pending or, to Operator's knowledge, threatened against
Operator that would affect the validity or enforceability of this Agreement or
the ability of Operator to fulfill its obligations and commitments hereunder.

                                       XV.
                           BOOKS, RECORDS AND REPORTS

         15.1 Books and Records. Operator shall maintain books and records at
the Site reflecting solely transactions arising from the operation and
maintenance of the Facility pursuant to the terms of this Agreement, including,
without limitation, accounting, bookkeeping and administrative reports relating
to Facility performance data, the accrual and payment of items constituting
operating expenses and Reimbursable Costs, and the payment of all O&M Fees and
other monies to Operator. Such books and records shall (a) reflect only
transactions in connection with the Facility, (b) be kept physically apart from
any other books and records

                                       45
<PAGE>

maintained by Operator for whatever purpose, and (c) be available to Owner upon
Owner's request for examination or copying during the normal business hours of
Operator. Operator shall cooperate with Owner's accountant in the event Owner
requests such accountant to conduct a financial audit of the services provided
by Operator hereunder. If such audit reveals errors in the calculation of any
amounts paid by Owner, Operator shall promptly reimburse Owner for any amounts
improperly paid by Owner or Owner shall promptly reimburse Operator for any
amounts not paid by Owner, as the case may be. Furthermore, if such audit
reveals errors of more than two percent (2%) in the calculation of Reimbursable
Costs during any given month, then Operator shall pay to Owner the cost of the
audit. At the termination of this Agreement, Operator shall furnish to Owner one
copy of each report previously delivered to Owner pursuant to Section 15.2
hereof, and one copy of such other books and records which (i) relate to the
Facility, and (ii) Operator maintains at the time of such termination in the
normal course of its record keeping under this Article XV.

         15.2 Reports. In addition to any other report required to be made by
Operator pursuant to the terms of this Agreement, Operator shall furnish to
Owner all such reports concerning the operation and maintenance of the Facility,
including any reports which may be required under the Related Agreements and as
may be required by the Lender. Operator shall provide such reports in the manner
and at the times as may be required under the Related Agreements or by the
Lender.

                                      XVI.
                                  FORCE MAJEURE

         16.1 Force Majeure. Neither party shall be responsible or liable for or
deemed in breach hereof because of any delay in the performance of their
respective obligations hereunder due to circumstances beyond the reasonable
control of the party experiencing such delay, including but not limited to acts
of God; unusually severe weather conditions; strikes or other labor difficulties
(except that Operator's performance shall not be excused by strikes persons
employed directly by Operator at the Site or by strikes limited to the Site);
war; riots; requirements, actions or failures to act on the part of governmental
authorities preventing performance; inability despite due diligence to obtain
required licenses, permits or governmental approvals; accidents; fire; damage to
or breakdown of necessary facilities; transportation delays or accidents;
failure or refusal of Refinery or PJM to accept deliveries of Electricity under
the Energy Services Agreement; or unavailability of Fuel (such causes
hereinafter called "Force Majeure"); provided that the non-performing party is
materially and adversely affected by the event of Force Majeure and:

             (a) The non-performing party gives the other party, as soon as
reasonably practicable but in any event within forty-eight (48) hours of such
Force Majeure occurrence, written notice describing the particulars of the
occurrence;

             (b) The suspension of performance is of no greater scope and of no
longer duration than is required by the Force Majeure;

             (c) The non-performing party uses its best efforts to mitigate the
effects of the Force Majeure and remedy its inability to perform;

                                       46

<PAGE>

             (d) When the non-performing party is able to resume performance of
its obligations under this Agreement, that party shall give the other party
written notice to that effect; and

             (e) The Force Majeure was not caused by or connected with any
negligent or intentional acts, errors, or omissions, or failure by the
non-performing party to comply with any applicable law, rule, regulation, order,
or ordinance or for any breach or default of this Agreement.

The term Force Majeure does not include changes in market conditions or
governmental action, that affect the cost of Owner's supply of Fuel or any
alternative supplies of Fuel or the demand for Owner's products.

         16.2 Effect of Force Majeure. If after an event of Force Majeure that
has caused Operator to suspend or delay performance of the Work hereunder,
Operator has failed to take such action as Operator could lawfully and
reasonably initiate to remove or relieve either such event of Force Majeure or
its direct or indirect effects, Owner may in its sole discretion, at Operator's
expense initiate such reasonable measures as will be design to remove or
relieve such event of Force Majeure or its direct or indirect effects and
thereafter require Operator to resume full or partial performance of the Work
hereunder.

         16.3 Extended Force Majeure. In the event an event of Force Majeure
hereunder or under any of the Related Agreements continues for thirty (30) days
or more, then Owner shall have the right, upon delivery of thirty (30) days
advance written notice to Operator, to cause Operator to de-mobilize, and
effective thirty (30) days after Operator's receipt of such notice, Owner shall
be permanently relieved of the obligation to make payment of the O&M Fee to
Operator for those months during such extended event of Force Majeure that
Operator is de-mobilized. Owner shall pay all costs and expenses incurred in
connection with de-mobilization and re-mobilization to the extent such costs and
expenses are approved in writing by Owner. In addition, if such de-mobilization
continues for a period of one hundred eighty (180) or more consecutive days then
Owner may terminate Agreement by delivering written notice of termination to
Operator, such termination to be effective no earlier than thirty (30) days
after Operator's receipt of such notice.

         16.4 Payments to Operator During an Event of Force Majeure. During the
continuance of an event of Force Majeure, Owner's obligation to make payments to
Operator for the O&M Fee and the AFAA shall be limited to the net income
(including insurance proceeds) derived from the Facility; provided, however, (i)
after the event of Force Majeure terminates, Owner shall bring current the
payment of all O&M Fees and AFAA (which are unpaid and accrued during the
event of Force Majeure) to Operator at such time as there is sufficient net
income from the Facility to make such payments and (ii) any such delayed
payments of the O&M Fee and the AFAA shall accrue interest at the rate of
interest announced by The Chase Manhattan Bank, N.A., from time to time, at its
principal office located at 1 Chase Manhattan Plaza, New York, New York 10081
(or any successor financial institution), as its prime commercial lending rate;
provided, however, Operator shall not be entitled to any O&M Fees for
those periods in which Operator was de-mobilized pursuant to Section 16.3
hereof. Owner's obligations under this Section 16.4 shall survive the
termination or expiration of this Agreement.

                                       47

<PAGE>
                                     XVII.
                             LIMITATION OF LIABILITY

         17.1 Operator

             (a) In no event, whether in tort, negligence, strict liability,
breach of contract, warranty or otherwise, shall Operator's total liability
hereunder to Owner exceed (a) in any Project Year, One Million and 00/100
Dollars ($1,000,000.00) and (b) over the term of this Agreement, a total
aggregate amount of Three Million and 00/100 Dollars ($3,000,000.00); provided,
however, that the foregoing limitation on liability shall not apply to any
liability of Operator to Owner (i) resulting from willful misconduct or
intentional tortious acts by Operator or (ii) otherwise covered by the insurance
policies required to be maintained by Operator pursuant to Section 10.1 hereof
up to the minimum amounts therein stated. Notwithstanding anything contained
herein to the contrary, in no event, whether in tort, negligence, strict
liability, breach of contract, warranty, indemnity or otherwise, shall Operator
be liable to Owner for special, incidental, exemplary or consequential damages,
including but not limited to, loss of profits or revenues.

             (b) This Section 17.1 shall apply to Operator's total liability to
Owner to the extent it is determined to arise solely out of Operator's
performance of its obligations under this Agreement and shall not modify or
alter in any way Operator's total liability to the owner of the Existing Plant
pursuant to the Existing Plant O&M Agreement. Should any claim concerning
Operator's total liability to Owner or to the owner of the Existing Plant
pursuant to the Existing Plant O&M Agreement result in a dispute among Operator,
and Owner or the owner of the Existing Plant or both, as to whether said
claim arises pursuant to this Agreement or the Existing Plant O&M Agreement,
such disputed claim shall be resolved pursuant to the limits upon Operator's
total liability to the owner of the Existing Plant pursuant to the Existing
Plant O&M Agreement unless such disputed claim has been resolved on the basis
that Operator's liability arises solely out of Operator's performance of its
obligations under this Agreement; provided, however, that in no event shall
Operator's total liability to the owner of the Existing Plant or Owner exceed in
the aggregate the sum of Operator's total liability pursuant to this Agreement
and the Existing O&M Agreement.

         17.2 Owner. In no event, whether in tort, negligence, strict liability,
breach of contract, warranty or otherwise, shall Owner's total liability
hereunder to Operator exceed (a) in any Project Year, One Million and 00/100
Dollars ($1,000,000.00) and (b) over the term of this Agreement, a total
aggregate amount of Three Million and 00/100 Dollars ($3,000,000.00); provided,
however, that the foregoing limitation on liability shall not apply to any
liability of Owner to Operator (i) resulting from willful misconduct
or intentional tortious acts by Owner, or (ii) otherwise covered by the
insurance policies required to be maintained by Owner pursuant to Section 10.2
hereof up to the minimum amounts therein stated or (iii) Owner's obligations to
make payments to Operator as specified in Article V. Notwithstanding anything
contained herein to the contrary, in no event, whether in tort, negligence,
strict liability, breach of contract, warranty, indemnity or otherwise, shall
Owner be liable to Operator for special, incidental, exemplary or consequential
damages, including but not limited to, loss of profits or revenues, except Owner
shall indemnify Operator against claims from Owner's customers for special,

                                       48
<PAGE>

incidental, exemplary or consequential damages up to, but not in excess of a
total aggregate amount of Three Million and 00/100 Dollars ($3,000,000.00) over
the term of Agreement.

                                     XVIII.
                             RESOLUTION OF DISPUTES

         18.1 Resolution by Parties

             (a) In the event that a dispute arises hereunder between the
parties, the parties shall attempt in good faith to settle such dispute by
mutual discussions within thirty (30) days after the date that a party gives
written notice of the dispute to the other party; provided, however, that if the
dispute involves the amount of an invoice and after ten (10) days of mutual
discussion either party believes in good faith that further discussion will not
resolve the dispute to its satisfaction, such party may immediately refer the
matter to the expert for consideration pursuant to Section 18.2 hereof.

             (b) In the event that the dispute is not resolved in accordance
with Section 18.1(a) hereof, either party may refer the dispute to the chief
executive officers or chief operating officers of the respective parties for
further consideration. In the event that such individuals are unable to reach
agreement within fifteen (15) days, or such longer period as they may agree,
either party may refer the matter to an expert in accordance with Section 18.2
hereof.

         18.2 Mediation by Expert

             (a) In the event that the parties are unable to resolve a dispute
in accordance with Section 18.1 hereof, then either party, in accordance with
this Section 18.2, may refer the dispute to an expert for consideration of the
dispute and to obtain a recommendation from the expert as to the resolution of
the dispute; provided, however, that with respect to disputes that involve the
amount of an invoice, either party may before any such dispute arises require
that an expert be appointed in accordance with the provisions of Section 18.2(b)
hereof and shall nominate a person it proposes to be the expert. Such an expert
shall have responsibility for considering all disputes that involve the amount
of invoices until replaced in accordance with the provisions of Section 18.2(b)
hereof.

             (b) The party initiating submission of the dispute to the expert
shall provide the other party with a notice stating that it is submitting the
dispute to an expert and nominating the person it proposes to be the expert. The
other party shall, within fifteen (15) days of receiving such notice, notify the
initiating party whether such person is acceptable. If the party receiving such
notice fails to respond or notifies the initiating party that the person is not
acceptable, the parties shall meet and discuss in good faith for a period of ten
(10) days to agree upon a person to be the expert. If the parties are unable to
agree, the responding party shall by the end of such ten (10) day period
nominate a person to be an expert, whereupon the two nominated experts shall
meet and agree upon a third person who shall be the expert. Should an expert
die, resign, refuse to act or become incapable of performing his or her
functions, the vacancy shall be filled by the method by which the expert was
originally appointed.

                                       49

<PAGE>
         (c) (i) Consideration of the dispute by an expert shall be initiated by
the party who is seeking consideration of the dispute by the expert submitting
to both the expert and the other party written materials setting forth:

                  (A) a description of the dispute;

                  (B) a statement of the party's position; and

                  (C) copies of records supporting the party's position.

                  (ii) Within ten (10) days of the date that a party has
submitted the materials described in Section 18.2(c)(i) hereof, the other party
may submit to the expert:

                  (A) description of the dispute;

                  (B) a statement of the party's position; and

                  (C) copies of any records supporting the party's position.

         The expert shall consider any such information submitted by the
responding party within the period provided in Section 18.2(b)(C) hereof and, in
the expert's discretion, may consider any additional information submitted by
either party at a later date.

         (d) The parties shall not be entitled to apply for discovery of
documents, but shall be entitled to have access to the other party's relevant
records and to receive copies of the records submitted by the other party.

         (e) Each party shall designate one person knowledgeable about the
issues in dispute who shall be available to the expert to answer questions and
provide any additional information requested by the expert. Except for such
person, a party shall not be required to, but may, provide oral statements or
presentations to the expert or make any particular individuals available to the
expert.

         (f) Except as provided in Section 18.2(h) hereof with respect to the
payment of costs, the proceedings shall be without prejudice to any party and
any evidence given or statements made in the course of this process may not be
used against a party in any other proceedings. The process shall not be regarded
as an arbitration and the laws relating to commercial arbitration shall not
apply. Unless the parties agree in writing signed by both parties at the time
the expert is selected that the decision of the expert will be binding, the
determination of the expert shall not be binding.

         (g) When consideration of the dispute by an expert is initiated, the
expert shall be requested to provide a recommendation within fifteen (15) days
after the ten (10) day response period provided in Section 18.2(b)(C) above has
run. If the expert's recommendation is given within such fifteen (15) day
period, or if the expert's recommendation is given at a later time and neither
party has at such time initiated any other proceeding concerning the dispute,
the parties shall review and discuss the recommendation with each other in good
faith for a period of

                                       50
<PAGE>
ten (10) days following delivery of the recommendation before proceeding with
any other actions.

         (h) If a party does not accept the recommendation of the expert with
respect to the dispute, it may initiate arbitration proceedings in accordance
with Section 18.3 hereof, provided, however, that prior to initiating the
arbitration proceedings it shall have paid all costs of the expert (including
the reimbursement of any costs paid to the expert by the other party) and all
out-of-pocket costs of the other party. Similarly if the expert has not
submitted its recommendation within the time period provided in Section 18.2(g)
hereof a party may initiate arbitration proceedings in accordance with Section
18.3 hereof, provided that prior to initiating the arbitration proceedings it
shall have paid all costs of the expert (including the reimbursement of any
costs paid to the expert by the other party).

         (i) Except as provided in Section 18.2(h) hereof, the costs of engaging
an expert shall be borne equally the parties and each party shall bear its own
costs in preparing materials for, and making presentations to, the expert.

         (j) Without prejudice to the parties' rights to initiate arbitration
proceedings following the recommendation of the expert in accordance with
Section 18.2(h), the parties shall act in accordance with the recommendation of
the expert until resolution of the dispute by arbitration.

         18.3 Arbitration. In the event a dispute arises between Owner and
Operator which is not resolved pursuant to Section 18.1 or 18.2 hereof, as
applicable, each party, as its sole remedy, other than mediation pursuant to
the terms of Section 18.2 hereof, for resolution of such dispute, shall have the
right to pursue arbitration pursuant to the terms hereof. All claims, disputes,
and other matters in question arising out of or relating to this Agreement or
the breach thereof and which are resolved by arbitration shall be decided by
arbitrators selected as hereinafter provided and shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then obtaining, unless the parties mutually agree otherwise. The
resolution of such disputes shall not delay Operator's performance of its
undisputed obligations under the terms of this Agreement nor Owner's payment to
Operator for such Work. The arbitration shall be held in New York, New York, and
any arbitration demand must be filed with the American Arbitration Association
office located closest to New York, New York. If the claim or defense of either
party was without merit the arbitrators may require that the party at fault pay
or reimburse the other party for (i) fees and expenses, including, attorneys and
expert fees and expenses, and (ii) reasonable out of pocket expenses incurred by
the other party in connection with the arbitration proceedings.

         18.4 Selection of Arbitrators. Each dispute shall be submitted to three
(3) arbitrators, one (1) arbitrator being selected by Owner, one (1) arbitrator
being selected by Operator, and the third arbitrator being selected by the two
(2) so selected. The party initiating the arbitration shall include in its
notification under Section 18.5 below the designation of its selected arbitrator
and the party receiving such notification shall designate its arbitrator within
fifteen (15) days thereafter and notify the initiating party and its arbitrator
of the selection. If the arbitrators selected by Owner and Operator cannot agree
on a third arbitrator within fifteen (15) days after the second arbitrator is
selected, the third arbitrator shall be selected by the American

                                       51
<PAGE>
Arbitration Association. In the event the party receiving notification of a
demand for arbitration shall not have selected its arbitrator and given notice
thereof to the other party and its arbitrator within fifteen (15) days after
receiving such notification, such arbitrator shall be selected by the American
Arbitration Association. Should a vacancy arise because any arbitrator dies,
resigns, refuses to act or in the opinion of his fellow arbitrators becomes
incapable of performing his or her functions, the vacancy shall be filled by the
method by which that arbitrator was originally appointed.

         18.5 Notice. Notice of demand for arbitration shall be filed in writing
with the other party to this Agreement and with the American Arbitration
Association. The demand shall be made within a reasonable time after the claim,
dispute or other matter in question has arisen. In no event shall the demand for
arbitration be made after the date when the applicable statute of limitations
would bar institution of a legal or equitable proceeding based on such claim,
dispute, or other matter in question; provided, however, any claims asserted by
Owner with respect to a breach of the warranty set forth in Section VII hereof
shall be made within one (1) year after the termination of this Agreement.

         18.6 Award. This agreement to arbitrate shall be specifically
enforceable under the prevailing arbitration law. The award rendered by the
arbitrators shall be final and judgment may be entered upon it in accordance
with applicable law in any court having jurisdiction thereof.

         18.7 Survival. This Article XVIII shall survive termination of this
Agreement.

                                      XIX.
                    CONFIDENTIALITY AND INTELLECTUAL PROPERTY

         19.1 Confidential Information. Operator agrees to keep confidential and
not to disclose to any person for use for any purpose other than the performance
of the Work any written or other tangible information which is marked or
designated by Owner as confidential or proprietary (including documents,
computer records, specifications, formulae, evaluations, methods, processes,
technical descriptions, reports and other data, records and information)
provided to or created or acquired by Operator solely in the course of the
performance of the Work (collectively, "Owner Confidential Information"). Owner
agrees to keep confidential and not to disclose to any person for use for any
purpose other than in connection with Owners ownership of the Facility any
written or other tangible information which is marked or designated by Operator
as confidential or proprietary (including documents, computer records,
specifications, formulae, evaluations, methods, processes, technical
descriptions, reports and other data, records and information) provided to it by
Operator, but not provided to or created or acquired by Operator solely in the
course of the performance of the Work (collectively, "Operator Confidential
Information", and together with the Owner Confidential Information, the
"Confidential Information"). Notwithstanding the foregoing, Operator and Owner
shall be entitled to disclose Owner Confidential Information or Operator
Confidential Information, as the case may be:

         (i)      to its respective directors, officers, employees,
                  subcontractors, agents or professional advisors to the extent
                  necessary for performance of its

                                       52
<PAGE>
                  obligations under this Agreement or to its auditors for the
                  purposes of any audit of its accounts, provided that it first
                  obtains from any such person or entity to whom the disclosure
                  is to be made an agreement of confidentiality in favor of the
                  other party with respect to the Confidential Information in
                  question substantially on the terms of this Article XIX;
                  provided, however, in the case of employees, the party
                  desiring to disclose Confidential Information need not obtain
                  a confidentiality agreement from such employees, but shall
                  make such employees aware of, and require that such employees
                  comply with, the confidentiality obligations contained herein;

         (ii)     when required to do so by law or by or pursuant to the rules
                  of any order having the force of law of any court, association
                  or agency of competent jurisdiction or any governmental
                  agency, provided that the party seeking to disclose
                  Confidential Information first informs the other party of its
                  intent to disclose such Confidential Information so that such
                  other party can seek a protective order or other equitable
                  relief to prevent disclosure of such Confidential Information;

         (iii)    to the extent that the Confidential Information has, except as
                  a result of breach of confidentiality by a party, become
                  publicly available or generally known to the public at the
                  time of such disclosure;

         (iv)     to the extent that a party has acquired the Confidential
                  Information from a third party who is not in breach of any
                  obligation as to confidentiality;

         (v)      to the extent that the Confidential Information has been
                  independently developed by employees who have not had access
                  to the Confidential Information of the other party; or

         (vi)     to any person with the prior written consent of the other
                  party.

         19.2 Return of Confidential Information. Upon termination of this
Agreement, Operator shall return to Owner the Owner Confidential Information
(including all copies thereof) within its possession or control and Owner shall
return to Operator the Operator Confidential Information (including all copies
thereof) within its possession or control.

         19.3 Continuation of Confidentiality Obligations. The obligations under
this Article XIX shall continue for a period of three (3) years following the
termination of this Agreement.

         19.4 Ownership of Confidentiality Information. All Owner Confidential
Information shall be and shall remain the property of Owner and all Operator
Confidential Information shall be and shall remain the property of Operator.

                                       53

<PAGE>
         19.5 Intellectual Property.

         (a) All of Owner's intellectual property rights shall remain the
property of Owner, but Owner hereby grants to Operator an irrevocable,
non-exclusive, royalty-free, non-transferable license to use such intellectual
property to the extent that Operator requires use of such intellectual property
in connection with the performance of the Work during the term of this
Agreement.

         (b) Operator hereby grants to Owner a non-exclusive, royalty-free
license to use any intellectual property rights owned by Operator located on
Site and required in connection with the operation of the Facility for a period
of not more than one (1) year after the termination of this Agreement at which
time Operator may request that Owner return such intellectual property. Such
license shall be non-transferable and limited for the use and benefit of the
Facility, except that Owner may assign the benefit of such license to Lender.
Owner shall at all times be entitled to retain all documents, operating
procedures, data and computer software specifically developed for the safe and
efficient operation of the Facility.

         (c) Before entering into an agreement with a third party relating to
the supply of material specifically created by such third party for the
Facility, Operator shall request that such third party grant licenses to
Operator and Owner (with rights to Owner to assign or sub-license to any person
appointed operator of the Facility) to use all intellectual property rights
which arise in connection with such materials. In addition, Operator shall use
reasonable efforts to procure that intellectual property rights owned or
developed by third parties and used by Operator in connection with the Facility
be licensed either to both Operator and Owner or (ii) to Operator solely, but
with rights to sub-license such intellectual property rights to Owner.

         (d) Owner shall have the right either to (i) assign all sub-licenses of
intellectual property rights granted to it or (ii) grant sub-licenses to any new
operator of the Facility in respect of intellectual property in respect of which
a sub-license has been granted to Owner; provided, however, any such
sub-licenses shall limit the use of intellectual property for the benefit of the
Facility.

                                       XX.
                          HAZARDOUS MATERIALS HANDLING

         Owner shall be responsible for the proper off-Site transportation,
storage (if applicable) and disposal of Hazardous Materials produced, generated
or otherwise encountered on the Site during the operation and maintenance of the
Facility. With respect to the transportation, off-Site storage and disposal of
Hazardous Materials, Operator shall assist in the preparation of purchase orders
and manifests directed to transportation, storage and disposal suppliers
selected by Owner. Operator shall assist Owner in identifying possible licensed
and qualified suppliers for suitable transportation, storage (if applicable) and
disposal of Hazardous Materials, provided, however, that determination of the
acceptability of such suppliers shall be the sole responsibility of Owner. Prior
to issuance, such purchase orders and manifests shall be submitted to Owner for
review and approval. Such supplier invoices shall be forwarded to Owner for
payment. Prior to the timely removal of Hazardous Materials by Owner from and
off the Site, Operator shall, in accordance with applicable law, utilizing the
facilities, equipment and

                                       54
<PAGE>
systems provided by Owner for such purposes, properly handle and store on the
Site, Hazardous Materials produced or generated during the operation and
maintenance of the Facility. Neither Owner nor Operator shall introduce new
Hazardous Materials to the Site after the execution of this Agreement without
notice to the other party.

                                      XXI.
                                  MISCELLANEOUS

         21.1 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey, without giving effect to
the conflict of laws principles thereof.

         21.2 Severability. Every provision of this Agreement is intended to be
severable such that if any term or provision hereof is illegal or invalid for
any reason, such provision shall be severed from this Agreement and shall not
affect the validity of the remainder of this Agreement.

         21.3 Entire Agreement. This Agreement constitutes the entire agreement
between Owner and Operator relating to the subject matter hereof and supersedes
and replaces all prior and contemporaneous agreements and understandings not
incorporated herein by reference thereto, whether written or oral, and sets
forth all the representations, covenants and warranties upon which Owner and
Operator rely in entering into this Agreement.

         21.4 Amendments. No amendment or modification hereof shall be valid or
binding upon the parties hereto unless evidenced in writing and signed by a duly
authorized representative of Owner and Operator and consented to by any Lender.

         21.5 Waiver. No failure by Owner to insist upon the strict performance
of any term, covenant or condition of this Agreement, or to exercise any right
or remedy upon breach of any provision, and no acceptance of payment or
performance during the continuation of any such breach, shall constitute a
waiver of any term, covenant or condition herein or a waiver of any subsequent
breach or default in the performance of any term, covenant or condition herein.

         21.6 Original and Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original for all
purposes, but all of which shall constitute one and the same instrument.

         21.7 Independent Contractor. Operator shall perform its duties and
obligations hereunder as an independent contractor, and nothing contained herein
shall be deemed to create a relationship of employer/employee, master/servant,
agency (except, as otherwise expressly set forth herein), partnership or joint
venture.

         21.8 Limited Recourse. Any claim against Owner that may arise under
this Agreement shall be made only against and shall be limited to the assets of
Owner, and no judgment, order or execution entered in any suit, action or
proceeding thereon shall be obtained or enforced against any partner or joint
venturer of Owner or the assets of such partner or joint venturer or any
incorporator, shareholder or other equity holder, employee, officer or director
thereof whether acting individually or in a representative capacity hereunder or
in connection

                                       55
<PAGE>
with the ownership, operation or maintenance of the Facility (or, in the case of
such partners or joint venturers that are partnerships, of any partner thereof),
or against any direct or indirect parent corporation or affiliate or any
incorporator, shareholder or other equity holder, employee, officer or director
of any thereof, whether acting individually or in a representative capacity
hereunder or in connection with the ownership, operation or maintenance of the
Facility, for the purpose of obtaining satisfaction of any payment of any amount
owing under this Agreement.

         21.9 Captions. The captions contained in this Agreement are for
convenience and reference only and in no way define, describe, extend or limit
the scope or intent of this Agreement or the intent of any provision contained
herein.

         21.10 Exhibits. All Exhibits referenced in this Agreement shall be
incorporated into this Agreement by such reference and shall be deemed to be an
integral part of this Agreement.

         21.11 Effectiveness of Agreement. This Agreement shall become effective
upon its execution.

                                       56
<PAGE>
         IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed as of the date and year first above written.

                                    JEDI LINDEN NB, L.L.C.

                                    By: /s/ ROBERT J. LICATO
                                       -----------------------------------------
                                    Name: Robert J. Licato
                                         ---------------------------------------
                                    Title: President
                                          --------------------------------------

                                                                         "OWNER"
                                                                     [ILLEGIBLE]

                                    GENERAL ELECTRIC INTERNATIONAL, INC.

                                    By: /s/ [ILLEGIBLE]
                                       -----------------------------------------
                                    Name: [ILLEGIBLE]
                                         ---------------------------------------
                                    Title: GM
                                          --------------------------------------

                                                                      "OPERATOR"

                                       57
<PAGE>

                                    EXHIBIT A

                            MONTHLY O&M REPORT FORMAT

OVERVIEW

         Summary of Facility operation for the period and foreseeable future.

PRODUCTION SUMMARY (BUDGETED vs. ACTUAL)

         -        Gross Electrical Generation (kilowatt hours)

         -        Net Electrical Generation (kilowatt hours)

         -        Effective Capacity

         -        Supplementary Outside Electrical Usage (and Level of Demand
                  Charges)

         -        Fuel Received (Amount and Type)

         -        Fuel Used (Amount and Type)

         -        Gross Facility Heat Rate

         -        Net Facility Heat Rate

         -        Steam Produced for Export

         -        Miscellaneous Consumable Usage (i.e., water treatment
                  chemicals, boiler chemicals, wastewater treatment chemicals,
                  lubricants, etc.)

         -        Wastewater Produced

         -        Make-up Water Used

         -        Number and Duration of Start-ups

BUDGET

         -        Reasonable Itemization of all Costs (by budgetary category, if
                  appropriate) which up operating expenses and the Reimbursable
                  Costs associated therewith.

         -        Comparison of the current total of Project Year operating
                  expenses and the Reimbursable Costs associated therewith with
                  the Approved Operating Budget.

         -        Provide a reasonably detailed explanation of any material
                  deviations or discrepancies between the costs and expenses
                  actually incurred by Operator

<PAGE>

                  during the preceding month and the costs and expenses
                  projected to be incurred by Operator during such month as set
                  forth in the approved Operating Budget.

PERSONNEL

         -        Staff

                  --       Salaried

                  --       Hourly

                  --       Turnover

         -        Contract Personnel

SAFETY RECORD AND TRADING

         -        Summary of Safety Training Performed vs. Anticipated

         -        Description of Safety Record, including

                  --       OSHA Reportable Accidents

                  --       Lost Time Accidents

         -        Summary of Operator Training Performed vs. Anticipated

AVAILABILITY SUMMARY (SUGGEST GADS(1) METHOD)

         -        Major Facility Systems (i.e., Combustion Turbine Generators,
                  Heat Recovery Steam Generators, Condensate, and Feedwater)

                  --       Daily Availability for Period

                  --       Reason for Downtime

         -        Capacity Factor for Period

         -        Forecast for Next Three Months

                  --       Capacity Factor

                  --       Export Steam

                  --       Electrical Generation

----------

(1) North American Electric Reliability Council Generating Availability Data
    System.

<PAGE>

MAINTENANCE ACTIVITY

         -        Number and Length of All Scheduled Outages (and the reasons
                  therefore)

         -        Number and Length of All Forced Outages (and the reasons
                  therefore)

         -        Completed Major Maintenance Activities, Including Associated
                  Dates

         -        Anticipated Major Maintenance Activities, Including Associated
                  Dates

         -        Contract Maintenance Utilized

         -        Maintenance Backlog Performance Indicator

         -        Preventive/Predictive Maintenance Backlog Performance
                  Indicator

EMISSIONS

Identify permit violations, implications on facility operation and approach to
obtaining compliance.

         -        Air

         -        Wastewater

         -        Solid Waste

OTHER

Include information on any unanticipated occurrence at the Facility and the
actions taken by Operator with respect thereto.

ATTACHMENTS

         -        Daily Operator's Log Summary

         -        Correspondence with Permitting Agencies Regarding Facility
                  Compliance with All Permit Criteria

<PAGE>

                                    EXHIBIT B

                                UNIT AVAILABILITY

         Subject to the Forty-five Thousand and 00/100 Dollars ($45,000)
limitation for bonuses and the Thirty thousand and 00/100 Dollars ($30,000)
limitation for liquidated damages, for a given Project Year, Operator shall be
entitled to a bonus or shall be assessed liquidated damages for the Unit
Availability category of the AFAA that shall be calculated in accordance with
the following formulas:

         where the AAF is greater than or equal to the BTA:

         Bonus = $22,500 + [$11,250 x (AAF - BTA)]

         where the LDTA is greater than or equal to the AAF:

         Liquidated Damages = [$22,500 + [$11,250 x (LDTA - AAF)]] x 0.66

         For purposes of the foregoing calculations, Unit Availability shall be
computed at the end of each Project Year in accordance with the following
definitions:

         "Available Hours" means the difference between (i) Period Hours and
(ii) the sum of Forced Outage Hours and Scheduled Outage Hours during any
Project Year. The determination of Available Hours shall include all hours when
the Facility is not operating but is deemed available pursuant to the Energy
Services Agreement that are not Forced Outage Hours or Scheduled Outage Hours
(other than Forced Outage Hours caused by Operator). For purposes of this
Agreement, a Forced Outage or Scheduled Outage of the Facility shall be deemed
to commence in the hour in which the circuit breaker connecting the Facility to
its load is opened. A Forced Outage or Scheduled Outage shall be deemed to
conclude in the hour following the hour in which the circuit breaker connecting
the Facility to its load is closed by Operator at the conclusion of work
scheduled or necessary to restore the Facility to service or, if Owner instructs
Operator not to place the Facility in service, at such time as the Operator
could have closed the circuit breaker and connected the Facility to its load.

         "Actual Availability Factor" ("AAF") means for any Project Year:

         (i) Available Hours

         (ii) divided by Period Hours

         (iii) multiplied by 100.

         "Bonus Target Availability" ("BTA") means the target availability of
the Facility for purposes of calculating bonuses for the Unit Availability
category of the AFAA. The BTA for each Project Year shall be determined in
accordance with Table 1 based on the full scope of the maintenance event that
has been performed in such Project Year. If more than one of the separate
maintenance events listed in Table 1 has been performed in a Project Year, the
BTA for

<PAGE>

such Project Year shall be determined by mutual agreement of the parties after
taking into consideration the scope of all of the maintenance events conducted
in that Project Year.

         "Combustion Inspection" ("CI") means a disassembly of the gas turbine
for inspection of fuel nozzles, liners, transition pieces, crossfire tubes and
retainers, spark plug assemblies, flame detectors and end caps consistent with
the description of the same in Figure 29 of the GE publication "Heavy Duty Gas
Turbine Operating and Maintenance Considerations" ("GER-3620F"), as may be
amended from time to time.

         "Forced Outage Hours" means the number of hours in any period that the
Facility is not available as a result of a Facility failure or as a result of
being removed from service for unplanned maintenance.

         "Hot Gas Path Inspection" ("HGPI") means an inspection encompassing the
full scope of a CI and which, in addition, includes a detailed inspection of the
turbine nozzles, stationary stator shrouds and turbine buckets consistent with
the description of the same in Figure 30 of GER-3620F, as may be amended from
time to time.

         "Liquidated Damages Target Availability" ("LDTA") means the target
availability of the Facility for purposes of calculating liquidated damages for
the Unit Availability category of the AFAA. The LDTA shall be determined for
each Project Year in accordance with Table 1 based on the full scope of the
maintenance event that has been performed in such Project Year. If more than one
of the separate maintenance events listed in Table 1 has been performed in a
Project Year, the LDTA for such Project Year shall be determined by mutual
agreement of the parties after taking into consideration the scope of all of
the maintenance events conducted in that Project Year.

         "Major Maintenance Inspection" ("MMI") means an inspection
encompassing the full scope of activities conducted for a CI and an HGPI and
which, in addition, includes a comprehensive examination of all of the internal
rotating and stationary components from the inlet of the gas turbine through the
exhaust section of the gas turbine consistent with the description of the same
in Figure 33 of GER-3620F, as may be amended from time to time.

         "Period Hours" means the number of hours in a Project Year which shall
be calculated as follows: (number of days in a Project Year) x 24 = Period
Hours.

         "Scheduled Outage Hours" means the number of hours in any Project Year
that the Facility is (i) not available as a result of being removed from service
for planned maintenance or, (ii) if the Facility was not operating and deemed
available pursuant to this Agreement, for planned maintenance scheduled in
accordance with Section 5.7D of the Energy Services Agreement.

<PAGE>

                                     TABLE 1

                               TARGET AVAILABILITY

<Table>
<S>                       <C>            <C>           <C>           <C>
     Maintenance            None            CI           HGPI          MMI
        Event

     Bonus Target           96.5           94.6          92.1          89.7
     Availability
       ("BTA")

      Liquidated            94.5           92.6          90.1          87.7
       Damages
        Target
     Availability
       ("LDTA")
</Table>

<PAGE>

                                    EXHIBIT C

                                   ASSIGNMENT

                       THIS PAGE INTENTIONALLY LEFT BLANK

<PAGE>

                                    EXHIBIT D

                              CONSENT AND AGREEMENT

                       THIS PAGE INTENTIONALLY LEFT BLANK

<PAGE>
                                    EXHIBIT E

                              RECOGNITION AGREEMENT

         RECOGNITION AGREEMENT, dated as of _________ (this "Recognition
Agreement"), among General Electric International, Inc., a Delaware corporation
("Operator"), JEDI Linden N.B., LLC, a Delaware limited liability company
("Owner") and [Lender].

         WHEREAS, the term "Lender" in the O&M Agreement (as defined in Section
1.02 below) includes any person providing funds for the refinancing or
taking-out of any loans made to Owner in connection with the construction of the
Facility; and

         WHEREAS, Lender has requested Operator and Owner to enter into this
Recognition Agreement to confirm that each has certain rights under the O&M
Agreement; and

         WHEREAS, Lender has agreed to provide its consent to assignment of the
O&M Agreement to an Affiliate of Operator on the condition that the Owner and
Operator enter into this Recognition Agreement confirming the Lender's rights as
set forth herein and that the Operator delivers to Owner and Lender a guarantee
of such affiliate's performance; and

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:

                                    ARTICLE I

                                   AGREEMENTS

         1.01 Amendment of O&M Agreement: Notice. Operator agrees that,
notwithstanding any right it may have under the O&M Agreement at law, in equity
or otherwise, Operator shall not amend or agree to any amendment of the O&M
Agreement without the prior written consent of the Lender, which shall not be
unreasonably withheld.

         1.02 Termination of O&M Agreement: Right to Cure. Operator agrees that,
notwithstanding any right it may have under the O&M Agreement at law, in equity
or otherwise, Operator shall have no right to terminate the O&M Agreement unless
Operator has provided the Lender notice of a breach specified in Section 9.1 of
the O&M Agreement at the same time as Operator has provided notice to Owner
pursuant to Section 9.2 of the O&M Agreement. As provided in Section 12.2 of the
O&M Agreement the Lender shall have the same right to cure such a breach as
Owner, which right shall remain in effect for an additional (30) days after the
last day that Owner could have cured such breach.

         1.03 Consents. Owner hereby agrees to the execution and delivery by the
Lender and Operator of this Recognition Agreement and agrees that this
Recognition Agreement shall not cause the Lender to be under any obligation to
Owner or Operator for the performance of any of the representations, warranties,
terms or conditions of the O&M Agreement. Operator hereby confirms that Owner
(or any successor or assign thereof) shall be entitled to assign the

<PAGE>
O&M Agreement pursuant to Section 12.1 thereof. Notwithstanding this Recognition
Agreement, Owner shall be and remain obligated to Operator to perform all of its
obligations and agreements under the O&M Agreement, and Operator shall be and,
except as provided in Section 1.02, remain obligated to Owner to perform all of
Operator's obligations and agreements under the O&M Agreement.

         1.04 Waiver and Assurance. Operator agrees and confirms to the Lender
that (a) the exercise by the Lender of the rights set forth herein shall not
constitute a breach of or default under the O&M Agreement, (b) each
representation, warranty covenant, indemnity and agreement of Operator in the
O&M Agreement shall continue in full force and effect, inure to the benefit of
and be enforceable by the Lender to the same extent as if the Lender were named
in the place of Owner in the O&M Agreement, (c) this Recognition Agreement shall
not relieve Owner from any duty, debt or obligation owing to Operator, (d) on
the date of its execution of this Recognition Agreement to Operator's best
knowledge, without investigation, Owner is not in default under, and Operator
may not exercise any right to terminate, the O&M Agreement and (e) on the date
of Operator's execution of this Recognition Agreement, the O&M Agreement has not
be terminated or modified.

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

         2.01 Representations and Warranties of Operator. Operator represents
and warrants that:

         (a) it (i) is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and (ii) has all requisite
corporate power and authority to execute and deliver the O&M Agreement and this
Recognition Agreement and to perform all of its obligations thereunder and
hereunder;

         (b) the execution and delivery by it of the O&M Agreement and this
Recognition Agreement and the performance by it of all of its obligations
thereunder and hereunder (i) have been duly authorized on behalf of Operator by
all requisite corporate action necessary to be taken prior to the date hereof;
(ii) do not and will not violate or be in conflict with (1) any provision of the
Certificate of Incorporation and By-Laws of Operator or (2) except as provided
in paragraph (c), any existing requirement of law by which Operator is bound or
to which it is subject; and (iii) to the best of its knowledge, do not and will
not violate, be in conflict with result in a breach of, or constitute a default
under (with or without the giving of notice or the passage of time or both) any
material instrument, mortgage, indenture, agreement or other obligation to which
it is a party or by which it or any of its assets and properties is bound or to
which it or any of its assets and properties is subject;

         (c) on the basis of current law, all consents, approvals, or
authorizations of, or registrations, declarations of or filings with, any
governmental authority or any other person required to be obtained, given or
taken on behalf of Operator as a condition of Operator's execution, delivery and
performance of the O&M Agreement and this Recognition Agreement have been duly
obtained or give and are in full force and effect; and

<PAGE>
         (d) the O&M Agreement and this Recognition Agreement have been duly
executed and delivered by Operator and are the legal, valid and binding
obligations of Operator, enforceable against it in accordance with their
respective terms, except as enforceability may be limited by (1) applicable
bankruptcy, insolvency, moratorium, reorganization and other similar laws
affecting the rights or remedies of creditors generally and (2) general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).

         2.02 Representations and Warranties of Lender.

         Lender represents and warrants that:

         (a) it is a banking association duly organized and validly existing
under the laws of the United States of America with all corporate power and
authority to enter into and perform its obligations under this Recognition
Agreement;

         (b) it is duly authorized, executed and delivered this Recognition
Agreement; this Recognition Agreement is a legal, valid and binding obligation
of the Lender, enforceable against the Owner in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principals of equity; and

         (c) neither its execution and delivery of this Recognition Agreement
nor its performance of its obligations hereunder nor its compliance with any of
the terms and provisions hereof in the manner specified herein (i) does or will
contravene any existing law or judgment, governmental rule, regulation or order
applicable to or binding on or any of its properties, (ii) does or will
contravene or result in any breach of or constitute any default under, or result
in the creation of any lien upon any of its property under, any indenture,
mortgage, deed of trust, bank loan or credit agreement, corporate charter,
by-law or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound or (iii) should or will require it to obtain,
make or take any consent or approval of, any notice to, any registration with,
any recording or filing of any document with, or any other action in respect of,
any Federal, state or other governmental commission, authority or agency which
has not been obtained, made or taken.

                                   ARTICLE III

                                  MISCELLANEOUS

         3.01 Notices. Where notice is required by this Recognition Agreement,
all notices, certificates or other communications hereunder shall be in writing
and shall be deemed given when mailed by United States registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:

<PAGE>
         If to Owner:

                  JEDI Linden NB, L.L.C.
                  Pennzoil Building - South Tower
                  711 Louisiana
                  32nd Floor
                  Houston, TX 77002
                  Attention: Mr. Robert J. Licato
                  Facsimile: (713) 345-9705

         with copy to:

                  Enron North America Corp.
                  1400 Smith Street
                  Houston, TX 77002
                  Attention: Ms. Lisa Mellencamp
                  Facsimile: (713) 853-7986

         If to Operator:

                  General Electric International, Inc.
                  4200 Wildwood Parkway
                  Atlanta, Georgia 30339
                  Attention: Region Manager, Northeast Region
                  Facsimile: (770) 859-7796

         If to Lender

         with a copy to:

or to such other and different person or address as may be designated by the
parties.

         3.02 Severability. If any provision of this Recognition Agreement shall
be held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining Provisions shall not in any way be affected or
impaired thereby.

         3.03 Governing Law. This Recognition Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey.

         3.04 Counterparts. This Recognition Agreement may be executed in any
number of counterparts, all of which together shall constitute a single
instrument, and it shall not be necessary that any counterpart be signed by all
the parties hereto.

<PAGE>
         3.05 Headings. The headings hereof are for convenience only and are not
to affect the meaning or interpretation of this Recognition Agreement.

         3.06 Successors and Assigns. This Recognition Agreement shall be
binding unto the benefit of, and be enforceable by, the parties hereto and their
respective fund assigns; provided, however, that this Recognition Agreement
shall only be in conjunction with the assignment of the O&M Agreement.

         3.07 Further Assurances. Operator agrees that, upon the request of the
Lender, date and deliver to the Lender a certificate in the form of Exhibit A
attached hereto.

         IN WITNESS WHEREOF, the undersigned have caused this Recognition to be
duly executed by their respective officers thereunto duly authorized as of the
first above written.

                  "OWNER":

                  JEDI LINDEN NB, L.L.C.

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

                  "OPERATOR":

                  GENERAL ELECTRIC INTERNATIONAL, INC.

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

                  "LENDER":

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

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