Document:

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                                                                  Exhibit 10.88

                                                                [PEAKING UNITS]

                                       POWER PURCHASE AGREEMENT

                                     Dated as of December 15, 1999

                                                Between

                                      Commonwealth Edison Company

                                                  and

                                        Midwest Generation, LLC

                             Crawford, Fisk, Waukegan, Calumet, Joliet,
                    Bloom, Electric Junction, Sabrooke and Lombard Peaking Units

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<TABLE>
<CAPTION>

                                           TABLE OF CONTENTS

                                                                                                 PAGE
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<S>      <C>                                                                                     <C>
1.       Definitions and Interpretation.............................................................1
         (a)      Definitions.......................................................................1
         (b)      Interpretation....................................................................9
         (c)      Legal Representation of Parties..................................................10
         (d)      Titles and Headings..............................................................10

2.       Term......................................................................................10

3.       Generating Capacity.......................................................................11

4.       Electric Energy Supply....................................................................11
         (a)      Character........................................................................11
         (b)      Supply...........................................................................11
         (c)      Dispatch.........................................................................11
         (d)      Energy Imbalance.................................................................11

5.       Metering; Billing; Payment................................................................12
         (a)      Metering.........................................................................12
         (b)      Meter Inaccuracies...............................................................12
         (c)      Billing..........................................................................12
         (d)      Billing Disputes.................................................................13

6.       Operation of Reserved Units...............................................................13
         (a)      Standard of Operation............................................................13
         (b)      Electric Energy Generation.......................................................14
         (c)      Outages..........................................................................15
         (d)      Operating Characteristics........................................................17
         (e)      Fuel Source and Emissions Reports................................................17
         (f)      Records..........................................................................17

7.       Compensation..............................................................................17
         (a)      Monthly Charges..................................................................17
         (b)      Minimum Take True-Up.............................................................19

8.       Testing...................................................................................19

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9.       Ancillary Services........................................................................20

10.      Limitation of Liability...................................................................20

11.      Disagreements.............................................................................22
         (a)      Administrative Committee Procedure...............................................22
         (b)      Arbitration......................................................................22
         (c)      Obligations to Pay Charges and Perform...........................................24
         (d)      Preliminary Injunctive Relief....................................................24
         (e)      Settlement Discussions...........................................................24

12.      Assignment; Transfer of Reserved Units....................................................25
         (a)      Assignment.......................................................................25
         (b)      Collateral Assignment............................................................25
         (c)      Transfer of Reserved Units during the Term.......................................26

13.      Termination by ComEd with respect to Certain Generating Units.............................26

14.      Default; Termination and Remedies.........................................................27
         (a)      Seller's Default.................................................................27
         (b)      ComEd Default....................................................................27
         (c)      Remedies and Remedies Cumulative.................................................28
         (d)      Extended Outage..................................................................28
         (e)      Terminations Under Section 13....................................................29

15.      Force Majeure.............................................................................29
         (a)      Force Majeure Event..............................................................29
         (b)      Obligations Under Force Majeure..................................................29
         (c)      Continued Payment Obligation.....................................................30
         (d)      Availability.....................................................................30

16.      Representations and Warranties............................................................30
         (a)      Representations and Warranties of Seller.........................................30
         (b)      Representations and Warranties of ComEd..........................................31

17.      Indemnification...........................................................................32

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18.      Notices...................................................................................33

19.      Confidentiality...........................................................................35

20.      Governing Law.............................................................................35

21.      Partial Invalidity........................................................................35

22.      Waivers...................................................................................36

23.      Competitive Transition Charge.............................................................36

24.      Entire Agreement and Amendments...........................................................36

</TABLE>

APPENDICES

Appendix A........Design Limits
Appendix B........MAIN Guide Number 3A
Appendix C........EO Communications and Guidelines
Appendix D........Reporting Forms

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                            POWER PURCHASE AGREEMENT

         THIS POWER PURCHASE AGREEMENT (including Appendices, this
"AGREEMENT") dated as of December 15, 1999, between COMMONWEALTH EDISON
COMPANY, an Illinois corporation ("COMED"), and MIDWEST GENERATION, LLC, a
Delaware limited liability company ("SELLER"; ComEd and Seller are sometimes
referred to herein individually as a "PARTY" and collectively as the
"PARTIES");

                              W I T N E S S E T H:

         WHEREAS, ComEd owns electric facilities and is engaged in the
generation, purchase, transmission, distribution and sale of electric energy;
and

         WHEREAS, Seller intends to purchase and thereafter operate ComEd's
combustion turbine generation units located at the Crawford, Fisk, Waukegan,
Calumet, Joliet, Bloom, Electric Junction, Sabrooke and Lombard sites; and

         WHEREAS, ComEd desires to receive and purchase, and Seller desires
to deliver and sell, electric capacity, energy and other generation-related
services; and

         WHEREAS, ComEd desires to determine the dispatching of such
combustion turbine units as provided in this Agreement;

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

1.       DEFINITIONS AND INTERPRETATION

         (a)   DEFINITIONS. As used in this Agreement, (i) the terms set
forth below in this Section 1(a) shall have the respective meanings so set
forth, and (ii) the terms defined elsewhere in this Agreement shall have the
meanings therein so specified.

         "AFFECTED PARTY" has the meaning specified in Section 15(a).

         "ANCILLARY SERVICES" has the meaning set forth in Section 9.

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                  "ASSET SALE AGREEMENT" means the Asset Sale Agreement dated
         as of March 22, 1999, between ComEd and Seller, governing, among other
         things, the transfer of the Units from ComEd to Seller.

                  "AVAILABLE" means a state in which a Unit is capable of
         providing service, whether or not it is actually in service, regardless
         of the capacity level that can be provided.

                  "BANKRUPTCY" means any case, action or proceeding under any
         bankruptcy, reorganization, debt arrangement, insolvency or
         receivership law or any dissolution or liquidation proceeding commenced
         by or against a Person and, if such case, action or proceeding is not
         commenced by such Person, such case or proceeding shall be consented to
         or acquiesced in by such Person or shall result in an order for relief
         or shall remain undismissed for 90 days.

                  "BUSINESS DAY" means each weekday (Monday through Friday)
         except the days on which the following holidays are observed: New
         Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
         and Christmas Day.

                  "CAPACITY ADJUSTMENT FACTOR" means, with respect to a month,
         the factor (rounded to four decimal places) obtained from the following
         calculation:

                  (1-[Average Unavailable Capacity/Reserved Capacity]) x 100%

         For purposes of the foregoing, "AVERAGE UNAVAILABLE CAPACITY" means,
         with respect to such month, the average of the Unavailable Capacity
         following each dispatch request from the EO Generation Dispatcher to
         deliver Electric Energy from the Reserved Units; and "UNAVAILABLE
         CAPACITY" means the capacity (measured in megawatts) which Seller is
         unable to deliver within the time frames (as measured from the point
         when the dispatch request is sent to Seller until the time that the
         Reserved Units are synchronized and achieve the load that the EO
         Generation Dispatcher requested in the dispatch order for delivery to
         the ComEd System) specified in the dispatch request for the Reserved
         Units; PROVIDED that such time frames are not less than the Start Times
         specified in Appendix A for the aggregate capacity so requested;
         PROVIDED FURTHER, that Seller may use a Substitute Unit to replace any
         unavailable Reserved Unit, in which case the capacity provided by such
         Substitute Unit may be used to offset the unavailable capacity of the
         Reserved Unit; and PROVIDED FURTHER a Reserved Unit

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         with a ten minute start time may not be used to respond to twenty
         minute start request. As an example, if Seller is able to deliver only
         40 megawatts from a 50 megawatt unit within the specified time frame,
         10 megawatts shall be considered Unavailable Capacity.

                  "CHANGE OF LAW" means the adoption, promulgation, modification
         or reinterpretation of any law, rule, regulation, ordinance, order or
         other Requirement of Law of any federal, state, county or local
         government, governmental agency, court, commission, department or other
         such entity which occurs subsequent to the date of execution of this
         Agreement but excluding any change in law relating to (i) taxation of
         net income or (ii) any requirement regarding reduction or control of
         nitrogen oxide (NOx), carbon dioxide or volatile organic materials
         under any Requirement of Law.

                  "COMED EVENT OF DEFAULT" has the meaning specified in Section
         14(b).

                  "COMED SYSTEM" means the electric transmission and
         distribution system owned by ComEd and its affiliates.

                  "CONFIDENTIAL INFORMATION" has the meaning specified in
         Section 19.

                  "CONTRACT YEAR" means, in the case of the First Contract Year,
         the period beginning on the Effective Date and ending on the day prior
         to the first anniversary of such beginning date, if the Effective Date
         is the first day of a calendar month, or ending on the day prior to the
         first anniversary of the beginning of the month immediately following
         the Effective Date, if the Effective Date is not the first day of a
         month; and, in the case of subsequent Contract Years, means the period
         beginning on the day immediately following the end of the preceding
         Contract Year and ending on the day prior to the first anniversary of
         such beginning day. First Contract Year refers to the first such period
         commencing on the Effective Date; Second Contract Year refers to the
         second such period; and so on.

                  "DEFAULT RATE" means (i) the "Prime Rate" as published from
         time to time in the "Money Rates" section of THE WALL STREET JOURNAL,
         plus (ii) 2.5% (250 basis points) per annum.

                  "DESIGN LIMITS" means, with respect to a Reserved Unit, the
         items listed in Appendix A with respect to such Reserved Unit.

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                  "EFFECTIVE DATE" means the date of this Agreement.

                  "ELECTRIC ENERGY" has the meaning specified in Section 4(a).

                  "EMERGENCY CONDITION" means a condition or situation which (i)
         in the sole judgment of ComEd (or any ISO) presents an imminent
         physical threat of danger to life, or significant threat to health or
         property, (ii) in the sole judgment of ComEd (or any ISO) could cause a
         significant disruption on or significant damage to the ComEd System (or
         any material portion thereof) or the transmission system of a third
         party (or any material portion thereof), (iii) in the sole judgment of
         Seller could cause significant damage to a Reserved Unit (or any
         material portion thereof) or (iv) in the sole judgment of ComEd could
         cause significant damage to the equipment located in the switchyard
         associated with a Reserved Unit (or any material portion of such
         switchyard).

                  "ENERGY AVAILABILITY ADJUSTMENT FACTOR" means, for a Contract
         Year, one minus the sum of (i) the number of Summer Months in such
         Contract Year that the Capacity Adjustment Factor was less than 90%,
         multiplied by 0.15, plus (ii) the number of Winter Months in such
         Contract Year that the Capacity Adjustment Factor was less than 85%,
         multiplied by 0.08, plus (iii) the number of Off-Season Months in such
         Contract Year that the Capacity Adjustment Factor was less than 80%,
         multiplied by 0.04.

         All outage hours and derating attributable to ComEd transmission system
         problems, outages or stability load restrictions shall be deemed
         Available Hours.

                  "ENERGY CHARGE" means an amount determined under Section
         7(a)(ii) in respect of a month.

                  "EO" means ComEd's Electric Operations Department.

                  "EO GENERATION DISPATCHER" means the Person so designated from
         time to time by ComEd as contemplated in Appendix C. Notice provisions
         for the EO Generation Dispatcher are contained in Appendix C.

                  "FERC" means the Federal Energy Regulatory Commission.

                  "FORCE MAJEURE EVENT" has the meaning specified in Section
         15(a).

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                  "FORCED OUTAGE" means an unplanned component failure
         (immediate, delayed, postponed, startup failure) or other condition
         that requires the Unit be removed from service immediately or before
         the end of the next weekend.

                  "GAS-FIRED RESERVED CAPACITY" means, with respect to a
         Contract Year, an amount (in megawatts) equal to (i) 643.9 minus (ii)
         the aggregate peak capacity (as set forth in Appendix A) of all Units
         identified as gas-fired in Appendix A with respect to which this
         Agreement has been terminated in accordance with Section 13.

                  "GOVERNMENTAL ACTION" has the meaning specified in Section
         15(a).

                  "INTERCONNECTION AGREEMENT" means the Facilities,
         Interconnection and Easement Agreement dated as of the Effective Date
         between ComEd and Seller with respect to the Site at which a Reserved
         Unit is located.

                  "ISO" means any Person that becomes responsible under
         applicable FERC guidelines for the transmission system to which the
         Units are connected.

                  "LENDERS" means (i) any person or entity that, from time to
         time, has made loans to Seller, its permitted successors or permitted
         assigns for the financing or refinancing of the Reserved Units or which
         are secured by the Reserved Units, (ii) any holder of such
         indebtedness, (iii) any trustee on behalf of any such holders or (iv)
         any Person who purchases a Reserved Unit in connection with a
         sale-leaseback or other lease arrangement in which the Seller is the
         lessee of such Reserved Unit pursuant to a net lease.

                  "MAIN" means the Mid-America Interconnected Network.

                  "MAINTENANCE OUTAGE" means the removal of a Unit from service
         to perform work on specific components that can be deferred beyond the
         end of the next weekend, but requires the Unit be removed from service
         before the next Planned Outage. Typically, Maintenance Outages may
         occur any time during the year, have flexible start dates, and may or
         may not have predetermined durations.

                  "MINIMUM ENERGY AMOUNT" means, with respect to a Contract
         Year, the product of (i) 82,607 megawatt hours, multiplied by (ii) a
         fraction, the numerator

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         of which is the Gas-Fired Reserved Capacity for such Contract Year and
         the denominator of which is the Peak Capacity.

                  "MINIMUM LOAD" means the "Minimum Operating Level" for a
         Reserved Unit (below which it cannot operate in a stable manner) as set
         forth in Appendix A. Minimum Load for a Reserved Unit shall be measured
         in net megawatts.

                  "MINIMUM TAKE TRUE-UP" means (i) the product of the Minimum
         Energy Amount for a Contract Year, multiplied by the Energy
         Availability Adjustment Factor for such Contract Year, multiplied by
         the megawatt hour charge for gas-fired energy for such Contract Year,
         as determined from the table in Section 7(a)(ii), less (ii) the
         aggregate amounts paid or payable by ComEd to Seller under Section
         7(a)(ii) in respect of the months (including, in the case of the First
         Contract Year, any partial month) constituting such Contract Year.

                  "MONTHLY CAPACITY CHARGE" means an amount determined under
         Section 7(a)(i) in respect of a month.

                  "NERC" means the North American Electric Reliability Council.

                  "NON-SUMMER CAPACITY CHARGE" means (i) $1,200 per
         megawatt-month during the First through Third Contract Years and (ii)
         $1,500 per megawatt-month during the Fourth and Fifth Contract Years.

                  "NON-SUMMER CAPACITY PAYMENT" means, for a Non-Summer Month,
         the sum of the following calculations for each Reserved Unit during
         such month: the product of (i) the Net Dependable Capacity of such
         Reserved Unit as set forth in Appendix B, multiplied by (ii) the
         quotient of (a) the Capacity Adjustment Factor for such month, divided
         by (b) 100, multiplied by (iii) the Non-Summer Capacity Charge for such
         month.

                  "NON-SUMMER MONTH" means any month other than a Summer Month.

                  "PEAK CAPACITY" means 1,117.3 megawatts.

                  "OFF-SEASON MONTH" means each month which is neither a Summer
         Month nor a Winter Month.

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                  "PEAK CAPACITY CHARGE" means (i) $16,500 per megawatt-month
         during the First through Third Contract Years and (ii) $28,500 per
         megawatt-month during the Fourth and Fifth Contract Years.

                  "PEAK OPERATION BONUS" means, with respect to a Reserved Unit
         during a month, the value obtained from the following:

<TABLE>
<CAPTION>

                                                      PEAKER OPERATION BONUS
                                                      ----------------------
                  <S>                                 <C>
                  If such Reserved Unit operated
                  at peak following a dispatch
                  to peak by ComEd                    (RUPR-RUBC) x Peak Capacity Charge

                  If such Reserved Unit is not
                  dispatched to peak                  Zero
</TABLE>

         For purposes of the foregoing, "RUPR" means such Reserved Unit's peak
         rating during such month; and "RUBC" means such Reserved Unit's Net
         Dependable Capacity as set forth in Appendix A.

                  "PERSON" means any individual, corporation, partnership, joint
         venture, limited liability company, association, joint stock company,
         trust, unincorporated organization, entity, government or other
         political subdivision.

                  "PLANNED OUTAGE" means the removal of a Unit from service to
         perform work on specific components that is scheduled well in advance
         and has a predetermined start date and duration (e.g., annual overhaul,
         inspections or testing).

                  "POINT OF DELIVERY" means the point of Electric Energy
         delivery from the Site on which the Reserved Unit is located to the
         ComEd System specified in the Interconnection Agreement.

                  "PRUDENT UTILITY PRACTICE" means any of the practices, methods
         and acts required or approved by any ISO or engaged in or approved by a
         significant portion of the electric utility industry in the United
         States of America during the relevant time period, or any of the
         practices, methods and acts which, in the

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         exercise of reasonable judgment in light of the facts known at the time
         the decision was made, could have been expected to accomplish the
         desired result at a reasonable cost consistent with good business
         practices, reliability, safety and expedition. "Prudent Utility
         Practice" is not intended to be limited to the optimum practice, method
         or act to the exclusion of all others, but rather to be acceptable
         practices, methods or acts generally accepted in the United States of
         America.

                  "REQUIREMENT OF LAW" means any foreign, federal, state and
         local laws, statutes, regulations, rules, codes or ordinances enacted,
         adopted, issued or promulgated by any federal, state, local or other
         governmental authority or regulatory body (including those pertaining
         to electrical, building, zoning, environmental and occupational safety
         and health requirements) or a tariff filed with any federal, state,
         local or other governmental authority or regulatory body.

                  "RESERVED CAPACITY" means, with respect to a Contract Year, an
         amount (in megawatts) equal to (i) 943.6 megawatts minus (ii) the
         aggregate Net Dependable Capacity (as set forth in Appendix A) of all
         Units with respect to which this Agreement has been terminated in
         accordance with Section 13.

                  "RESERVED UNIT" means each, and "RESERVED UNITS" means all,
         Units except those Units with respect to which this Agreement has been
         terminated in accordance with Section 13.

                  "SELLER'S EVENT OF DEFAULT" has the meaning specified in
         Section 14(a).

                  "SITE" means, with respect to a Reserved Unit, the real
         property on which such Reserved Unit is located.

                  "SUBSTITUTE UNIT" means a combustion turbine generating unit
         which is located at the same Site as the Reserved Unit which such unit
         is proposed to replace and is not a Reserved Unit under this Agreement
         at the time in question.

                  "SUMMER CAPACITY CHARGE" means (i) $7,600 per megawatt-month
         during the First through Third Contract Years and (ii) $9,500 per
         megawatt-month during the Fourth and Fifth Contract Years.

                  "SUMMER CAPACITY PAYMENT" means, for a Summer Month, the sum
         of the following calculations for each Reserved Unit during such month:
         the

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         product of (i) the Net Dependable Capacity of such Reserved Unit as
         set forth in Appendix A, multiplied by (ii) the quotient of (a) the
         Capacity Adjustment Factor for such month plus ten, divided by (b) 100,
         multiplied by (iii) the Summer Capacity Charge for such month.

                  "SUMMER MONTH" means each of June, July, August and September.

                  "SUMMER PERIOD" means the period from May 15 through September
         15.

                  "TERM" has the meaning specified in Section 2.

                  "TERMINATION DATE" means the earlier of (i) the day
         immediately preceding the fifth anniversary of the Effective Date if
         the Effective Date is the first day of a month and otherwise the day
         immediately preceding the fifth anniversary of the first day of the
         month immediately following the Effective Date and (ii) the date on
         which this Agreement is terminated by a Party pursuant to its terms.

                  "UNIT" means a combustion turbine generating unit listed on
         Appendix A.

                  "WINTER MONTH" means each of January and February.

                  (b)    INTERPRETATION. In this Agreement, unless a clear
contrary intention appears:

                  (i)    the singular includes the plural and vice versa;

                  (ii)   reference to any Person includes such Person's
         successors and assigns but, in the case of a Party, only if such
         successors and assigns are permitted by this Agreement, and
         reference to a Person in a particular capacity excludes such Person in
         any other capacity or individually;

                  (iii)  reference to any gender includes each other gender;

                  (iv)   reference to any agreement (including this Agreement),
         document, instrument or tariff means such agreement, document,
         instrument or tariff as amended or modified and in effect from time to
         time in accordance with the terms thereof and, if applicable, the terms
         hereof;

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                  (v)    reference to any Requirement of Law means such
         Requirement of Law as amended, modified, codified or reenacted, in
         whole or in part, and in effect from time to time, including, if
         applicable, rules and regulations promulgated thereunder;

                  (vi)   reference to any Section or Appendix means such Section
         of this Agreement or such Appendix to this Agreement, as the case may
         be, and references in any Section or definition to any clause means
         such clause of such Section or definition;

                  (vii)  "hereunder", "hereof", "hereto" and words of similar
         import shall be deemed references to this Agreement as a whole and not
         to any particular Section or other provision hereof or thereof,

                  (viii) "including" (and with correlative meaning "include")
         means including without limiting the generality of any description
         preceding such term; and

                  (ix)   relative to the determination of any period of time,
         "from" means "from and including", "to" means "to but excluding" and
         "through" means "through and including".

                  (c)    LEGAL REPRESENTATION OF PARTIES. This Agreement was
negotiated by the Parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring this Agreement to be
construed or interpreted against any Party shall not apply to any construction
or interpretation hereof or thereof.

                  (d)    TITLES AND HEADINGS. Section and Appendix titles and
headings in this Agreement are inserted for convenience of reference only and
are not intended to be a part of, or to affect the meaning or interpretation of,
this Agreement.

2.       TERM

                  This Agreement shall have a term (the "TERM") commencing on
the Effective Date and ending on the Termination Date. The provisions of
Sections 6(e) (Fuel Source and Emissions Reports), 6(f) (Records), 10
(Limitation of Liability), 11 (Disagreements), 14 (Default, Termination and
Remedies), and 16 (Indemnification) shall survive the termination of this
Agreement.

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3.       GENERATING CAPACITY

                  Subject to the terms and conditions of this Agreement, Seller
shall, consistent with Prudent Utility Practice, cause the aggregate peak
capacity of the Reserved Units during a Contract Year to be not less than the
Reserved Capacity for such Contract Year.

4.       ELECTRIC ENERGY SUPPLY

                  (a)      CHARACTER. All electric energy which Seller shall
sell and deliver to ComEd from a Reserved Unit (or a Substitute Unit) hereunder
(such electric energy being referred to herein as the "ELECTRIC ENERGY") shall
be consistent with the requirements of Section 5.7 of the Interconnection
Agreement.

                  (b)      SUPPLY. Subject to the terms and conditions of this
Agreement, Seller shall make available at the Point of Delivery to ComEd for
delivery and sale, and ComEd may receive and purchase from Seller, Electric
Energy. If a Reserved Unit is not Available, Seller may use a Substitute Unit
to fulfil such obligation. ComEd shall not be obligated to receive or purchase
any Electric Energy from Seller except such Electric Energy as is dispatched by
ComEd pursuant to Section 4(c).

                  (c)      DISPATCH. ComEd may dispatch the delivery of
Electric Energy from each Reserved Unit (or Substitute Unit) in accordance with
the provisions set forth in Appendix C at a rate up to the Net Dependable
Capacity indicated in Appendix A for such Reserved Unit or the Net Dependable
Capacity of such Substitute Unit, as the case may be (or such greater or lesser
rate as Seller may from time to time declare to be Available in accordance with
Section 3 of Appendix C), at any time when such Net Dependable Capacity is so
declared by Seller to be Available; although ComEd reserves the right to
dispatch such Reserved Unit at a rate up to its peak capacity as set forth in
Appendix A.

                  (d)      ENERGY IMBALANCE. ComEd shall hold Seller harmless
from any energy imbalance charges that result from ComEd's dispatch orders under
this Agreement.

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<PAGE>

5.       METERING; BILLING; PAYMENT

                  (a)      METERING. All Electric Energy delivered by Seller to
ComEd from the Reserved Units under this Agreement shall be metered at billing
meter installations provided, installed, owned, maintained and tested as
provided in Section 5.18 of the Interconnection Agreement. At Sellers option
and expense, back-up meters and associated metering equipment independent of
the Metering Equipment may be installed at the Sites; and such back-up meters
and metering equipment shall be used in accordance with the practices and
procedures established by the Parties for billing adjustments of discovered
billing meter inaccuracies. Any such back-up meters may be tested by ComEd at
Seller's expense, and any inaccuracies shall be handled as provided in Section
5.18 of the Interconnection Agreement. In the event that ComEd's billing meters
are not in service, ComEd will use meter information from the meters it uses
for dispatch for the period that the billing meters are unavailable and provide
the information to Seller. As soon as practicable but in any event no later
than five Business Days after the end of each calendar month, ComEd shall
provide Seller with information from the billing meter installations for
Seller's use in preparing billing statements and Seller shall have the right to
witness such meter readings and testing.

                  (b)      METER INACCURACIES. ComEd shall provide to Seller
copies of all routine meter calibration test results. If any test of the
billing meters by ComEd or Seller discloses an inaccuracy of more than 0.5%
fast or 0.5% slow, then a billing adjustment shall be made to correct for the
inaccuracy. For purpose of the billing adjustment, if the inaccuracy is
traceable to a specific event or occurrence at a reasonably ascertainable time,
then the adjustment shall extend back to that time; otherwise, it shall be
assumed that the error has existed for a period equal to one-half of the time
elapsed since the meter was installed or one-half of the time since the last
meter test, whichever is later. At any metering location, should the billing
meter at any time fail to register, the delivered Electric Energy shall be
determined by ComEd from the best available data, unless Seller objects within
30 days. Such disagreements shall be resolved pursuant to Section 11.

                  (c)      BILLING. As soon as practicable after the end of
each calendar month during the Term and after the Termination Date, Seller
shall render a statement to ComEd for the amounts due in respect of such month
under Section 7, which statement shall contain reasonable detail showing the
manner in which the Monthly Capacity Charge, Energy Charge, Peak Operation
Bonus and any Minimum Take True-Up were determined.

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<PAGE>

                  Billings for Electric Energy shall be based on ComEd revenue
quality meter information or, if such meters are not yet in service, on
information from the meters that ComEd uses for dispatch. The amount due to
Seller as shown on any such monthly statement rendered by Seller shall be paid
by ComEd within fifteen Business Days after the date such statement is rendered
to ComEd by electronic means to an account specified by Seller. Any amount not
paid when due shall bear interest from the due date until paid at the Default
Rate.

                  (d)      BILLING DISPUTES.

                  (i)      If ComEd questions or contests the amount of any
         amount claimed by Seller to be due under Section 7 of this Agreement,
         ComEd shall make such payment under protest and thereafter shall be
         reimbursed by Seller for any amount in error after resolution of the
         dispute in accordance with Section 5(d)(ii).

                  (ii)     In the event that ComEd, by timely notice to Seller,
         questions or contests the correctness of any charge or payment claimed
         to be due by Seller, Seller shall promptly review the questioned charge
         or payment and shall notify ComEd, within fifteen Business Days
         following receipt by Seller of such notice from ComEd, of the amount of
         any error and the amount of any reimbursement that ComEd is entitled to
         receive in respect of such alleged error. Any disputes not resolved
         within fifteen Business Days after Seller's receipt of notice from
         ComEd shall be resolved in accordance with Section 11. Upon
         determination of the correct amount of any reimbursement, such amount
         shall be promptly paid by Seller.

                  (iii)    Reimbursements made by Seller to ComEd under this
         Section 5(d) shall include interest from the date the original payment
         was made until the date such reimbursement together with interest is
         made, which interest shall accrue at the Default Rate.

6.       OPERATION OF RESERVED UNITS

                  (a)      STANDARD OF OPERATION. Consistent with Prudent
Utility Practice, Seller shall operate each Reserved Unit in accordance with
(i) the applicable practices, methods, acts, guidelines, standards and criteria
of MAIN, NERC, any ISO and any successors to the functions thereof; (ii) the
requirements of the Interconnection Agreement; and (iii) all applicable
Requirements of Law. Seller will maintain all

                                      13
<PAGE>

certifications, permits, licenses and approvals necessary to operate and
maintain each Reserved Unit and to perform its obligations under this Agreement
during the Term.

                  (b)      ELECTRIC ENERGY GENERATION.

                  (i)      During a Contract Year, ComEd shall have the right
         to receive and purchase Electric Energy represented by the Reserved
         Capacity of each Reserved Unit for such Contract Year. To the extent
         that ComEd has not dispatched the full Reserved Capacity of the
         Reserved Units and the EO Generation Dispatcher has released such
         capacity, Seller may sell the electric energy represented by such
         undispatched Reserved Capacity to third parties; PROVIDED, HOWEVER,
         that any such sales to third parties shall be cancelable by Seller upon
         not more than ten minutes notice; PROVIDED FURTHER that Seller shall be
         responsible for arranging transmission service for any deliveries of
         electric energy contemplated by any such sales to third parties (it
         being understood that this Agreement does not grant any rights of
         access to, or use of, any transmission service); and PROVIDED FURTHER
         that the delivery of electric energy contemplated by any such sales to
         third parties shall be in accordance with the provisions of the
         Interconnection Agreement. Seller shall schedule the sale of any energy
         so released through EO and shall respond to any recall of such energy
         by EO within the applicable time period specified in this Section
         6(b)(i). No sales of electric energy shall be made to any Person from a
         Reserved Unit (or any portion thereof) declared by Seller to be not
         Available.

                  (ii)     In the event that a Reserved Unit shall have electric
         generation capacity in excess of its Net Dependable Capacity set forth
         in Appendix A, Seller may offer and sell such capacity and associated
         electric energy to third parties on such terms as Seller shall
         determine in its sole discretion. Seller shall be responsible for
         arranging transmission service for any deliveries of electric energy
         contemplated by any such sales to third parties (it being understood
         that this Agreement does not grant any rights of access to, or use of,
         any transmission service); and the delivery of electric energy
         contemplated by any such sales to third parties shall be in accordance
         with the provisions of the Interconnection Agreement; and Seller shall
         schedule the sale of any energy so released through EO and shall
         respond to any recall of such energy by EO within the applicable time
         period specified in Section 6(b)(i). It is further understood that, in
         the event that any such sales to third parties shall be made and there
         shall be a derating in the associated Reserved Unit, such sales shall
         be curtailed in full before any

                                      14
<PAGE>

         curtailment of Electric Energy dispatched by ComEd from such Reserved
         Unit as a result of such derating.

                  (iii)    Seller may not sell Ancillary Services with respect
         to any undispatched Reserved Capacity referred to in Section 6(b)(i) or
         with respect to any excess capacity referred to in Section 6(b)(ii).

                  (c)      OUTAGES

                  (i)      PLANNED OUTAGES. On or prior to the Effective Date,
         Seller shall submit to ComEd a proposed schedule of Planned Outages
         (including Planned Deratings) scheduled by Seller for the following
         three Contract Years for the Reserved Units, which schedule shall be
         supplemented by Seller every six months following the Effective Date
         by notice to the EO Generation Dispatcher to extend the period covered
         by such schedule by six months; PROVIDED, HOWEVER, that no Planned
         Outage may be scheduled to cover any portion of a Summer Period. Such
         schedule, and each supplement thereto, shall indicate the planned
         start and completion dates for each Planned Outage shown during the
         period covered thereby and the amount of generating capacity that will
         be affected. Within sixty days of receipt of such schedule or any
         supplement thereto, ComEd may request reasonable modifications
         therein. Seller and ComEd shall work together to schedule Planned
         Outages to meet their mutual requirements; however, it is understood
         that in the event of a disagreement on such scheduling, ComEd will
         have the right to resolve such disagreements as it reasonably
         determines to be appropriate in accordance with Prudent Utility
         Practice. In addition, ComEd may at any time request, and Seller shall
         make, changes to such schedule or any such supplement if ComEd deems
         such changes to be necessary, PROVIDED THAT, Seller shall not be
         required in connection with any such changes to split a single Planned
         Outage into more than one outage or to reduce the duration of a
         Planned Outage; PROVIDED FURTHER that, except for changes requested
         during the first six months of the Term, such changes do not affect
         any Planned Outages during the six months immediately following
         Seller's receipt of such request; and PROVIDED FURTHER, that if Seller
         reasonably incurs increased costs as a result of ComEd's request to
         reschedule a Planned Outage, ComEd shall reimburse Seller for the
         actual, documented increased out-of-pocket costs. At least one week
         prior to any Planned Outage, Seller shall orally notify the EO
         Generation Dispatcher of the expected start date of such Planned
         Outage, the amount of generating capacity at the Reserved Units which
         will not be available to ComEd during such Planned Outage, and the
         expected

                                      15
<PAGE>

         completion date of such Planned Outage. Seller shall orally notify the
         EO Generation Dispatcher promptly of any subsequent changes in such
         generating capacity not available or any subsequent changes in the
         Planned Outage completion date. As soon as practicable, all such oral
         notifications shall be confirmed in writing.

                  (ii)     MAINTENANCE OUTAGES. To the extent that during any
         Contract Year Seller needs to schedule a Maintenance Outage, Seller
         shall notify the EO Generation Dispatcher of such outage and shall plan
         such outage of generating capacity and use reasonable efforts to
         accommodate the requirements and service obligations of ComEd. Notice
         of a proposed Maintenance Outage shall include the expected start date
         of the outage, the amount of unavailable generating capacity of the
         Reserved Units and the expected completion date of the outage, and
         shall be given to ComEd at the time the need for the outage is
         determined by Seller. ComEd shall promptly respond to such notice and
         may request reasonable modifications in the schedule for the outage to
         accommodate the requirements and service obligations of ComEd. Seller
         shall use reasonable efforts to comply with such requested
         modifications; and shall, if requested by ComEd, reschedule its
         Maintenance Outages, PROVIDED THAT it may do so in accordance with
         Prudent Utility Practice. Seller shall notify the EO Generation
         Dispatcher promptly of any subsequent changes in such generating
         capacity not available to ComEd or any subsequent changes in such
         outage completion date. As soon as practicable, any such notifications
         given orally shall be confirmed in writing.

                  (iii)    FORCED OUTAGES. Seller shall provide to the EO
         Generation Dispatcher immediately an oral report of any Forced Outage
         (including Forced Deratings) of the Reserved Units, which report shall
         include the amount of generating capacity at the Reserved Units
         unavailable because of such Forced Outage and the expected return date
         of such generating capacity, and shall update such report by notice to
         the EO Generation Dispatcher promptly as necessary to advise ComEd of
         changed circumstances. As soon as practicable, all such oral reports
         shall be confirmed in writing.

                  (iv)     INFORMATION RELATED TO OUTAGES. In addition to the
         foregoing, Seller shall provide to ComEd information relating to
         outages of generating capacity at the Reserved Units which would affect
         Seller's ability to deliver Electric Energy from such Units.

                                      16
<PAGE>

                  (d)      OPERATING CHARACTERISTICS. The operating
characteristics of each Reserved Unit shall be consistent with the Design
Limits for such Reserved Unit set forth in Appendix A unless otherwise mutually
agreed by the Parties. Any changes to such operating characteristics which may
affect the delivery of Electric Energy pursuant to this Agreement must be
agreed by the Parties. Seller shall reduce, curtail or interrupt electrical
generation at the Reserved Units in accordance with Prudent Utility Practice or
take other appropriate action in accordance with the applicable provisions of
the Interconnection Agreement which in the reasonable judgment of ComEd may be
necessary to operate, maintain and protect the ComEd System or the transmission
system of another utility during an Emergency Condition or in the reasonable
judgment of Seller may be necessary to operate, maintain and protect the
Reserved Units during an Emergency Condition.

                  (e)      FUEL SOURCE AND EMISSIONS REPORTS. Seller shall
provide ComEd with information concerning Seller's fuel sources and emissions
(including carbon dioxide, nitrous oxides and sulfur dioxide emissions) as
reasonably requested by ComEd in order to allow ComEd to meet its statutory
reporting obligations (including those reporting obligations imposed by Section
16-127 of the Illinois Public Utilities Act and associated rules of the Illinois
Commerce Commission) in respect of such information to governmental bodies,
customers or other Persons.

                  (f)      RECORDS. Each Party shall keep and maintain all
records as may be necessary or useful in performing or verifying any
calculations or charges made pursuant to this Agreement, or in verifying such
Party's performance hereunder. All such records shall be retained by each Party
for at least three calendar years following the calendar year in which such
records were created. Each Party shall make such records available to the other
Party for inspection and copying at the other Party's expense, upon reasonable
notice during such Party's regular business hours. Each Party and its agents,
including auditors, shall have the right, upon thirty days written notice prior
to the end of an applicable three calendar year period to request copies of
such records. Each Party shall provide such copies, at the other Party's
expense, within thirty days of receipt of such notice or shall make such
records available to the other Party and its agents, including auditors, in
accordance with the foregoing provisions of this Section.

7.       COMPENSATION

                  (a)      MONTHLY CHARGES. ComEd shall pay to Seller, in
respect of each calendar month during the Term, the following amounts:

                                      17
<PAGE>

                  (i)      MONTHLY CAPACITY CHARGE. A Monthly Capacity Charge
         equal to the Summer Capacity Payment, if such month is a Summer Month,
         or the Non-Summer Capacity Payment, if such month is a Non-Summer
         Month; PROVIDED, HOWEVER, if the first month of the First Contract
         Year is a partial month (as a result of the Effective Date occurring
         during a month), the amount payable under this Section 7(a)(i) in
         respect of such partial month shall be prorated by multiplying it by a
         fraction, the numerator of which is the number of days from the
         Effective Date through the last day of such month and the denominator
         of which is the total number of days in such month.

                  (ii)     ENERGY CHARGE. An amount equal to the product of (x)
         the Electric Energy (expressed in megawatt hours) sold to ComEd under
         this Agreement during such month multiplied by (y) the megawatt hour
         charge applicable to such Electric Energy as determined from the
         following table:

<TABLE>
<CAPTION>
                                      OIL-FIRED ENERGY               GAS-FIRED ENERGY
              CONTRACT                 MEGAWATT HOUR                  MEGAWATT HOUR
                YEAR                 CHARGE ($/MEGAWATT             CHARGE ($/MEGAWATT
                                           HOUR)(1)                       HOUR)(2)
            ============================================================================
            <S>                      <C>                            <C>
                  1                         $75                            $40

                  2                          80                             45

                  3                          85                             50

                  4                          90                             55

                  5                          95                             60
</TABLE>

                ----------
                (1) Applicable to Fisk, Waukegan and Bloom.
                (2) Applicable to Crawford, Calumet, Joliet, Electric Junction,
                   Lombard and Sabrooke.

                  (iii)    An amount equal to the sum of the following
         calculations for each Reserved Unit during a given month: the product
         of (1) the number of megawatt hours during such month that such
         Reserved Unit is operated at the request of ComEd within the range set
         forth opposite generating units of the same type as such Reserved Unit
         (I.E., gas-fired or oil-fired) in the following

                                      18
<PAGE>

         table, multiplied by (2) the Low Load Charge set forth opposite such
         unit in the following table; PROVIDED, HOWEVER, that no Low Load
         Charge shall be due if, due to derating (not directed by ComEd), the
         Reserved Unit is unable to operate above the Low Load Range specified
         in the table below.

<TABLE>
<CAPTION>

        =================================================================================
         Peaking Unit                Load Range                       Low Load Charge
                                     (Net MWs)                     ($ per Megawatt-hour)
        =================================================================================
        <S>                       <C>                              <C>
         Gas-Fired(1)              0 - (2 x Minimum Load)                   $26

         Gas-Fired(1)             (2 x Minimum Load) -                      12
                                  (3.5 x Minimum Load)

         Oil-Fired(2)              0 - Minimum Load                         48

         Oil-Fired(2)                Minimum Load -                         22
                                  (2 x Minimum Load)
        ---------------------------------------------------------------------------------
</TABLE>

         (1)      Applicable to Crawford, Calumet, Joliet, Electric Junction,
                  Lombard and Sabrooke.
         (2)      Applicable to Fisk, Waukegan and Bloom.

                  (iv)     PEAK OPERATION BONUS.  An amount equal to the Peak
         Operation Bonus, if any, in respect of the Reserved Units.

                  (v)      ANCILLARY  SERVICES.  There shall not be any
         additional charges payable by ComEd or otherwise in respect of the
         Ancillary Services described in Section 9.

                  (b)      MINIMUM TAKE TRUE-UP. The amount otherwise payable
under Section 7(a)(ii) in respect of the last month of a Contract Year shall be
subject to upward adjustment to reflect the Minimum Take True-Up, if any.

8.       TESTING

                  Capability evaluations of the Reserved Units may be conducted
by ComEd at reasonable intervals. Such evaluations shall consist of a period of
one hour during which ComEd may request the Net Dependable Capacity of a
Reserved Unit (as set forth in Appendix A) to generate Electric Energy for
delivery to the ComEd System. Once a test period has been initiated, it must
last one hour unless ComEd and the

                                      19
<PAGE>

general manager for the Reserved Units mutually agree to a shorter duration. In
addition, ComEd may request not more than once per Contract Year that a
Reserved Unit undergo a generating test as specified in Guide No. 3A of MAIN (a
copy of which is attached as Appendix B). No tests will be conducted or
continued which, in the opinion of Seller, should not be conducted or continued
in accordance with Prudent Utility Practice. If Seller prevents or discontinues
a test in accordance with Prudent Utility Practice, ComEd shall have the right
to retest the affected Reserved Unit upon prior notice to Seller. Seller shall
have the right to retest any Reserved Unit after the failure of any test
performed at the request of ComEd pursuant to this Section 8.

9.       ANCILLARY SERVICES

                  As directed by ComEd, Seller shall provide the following
additional services (the "ANCILLARY SERVICES") with respect to the Reserved
Capacity:

                  (a)      Reactive supply and voltage control from generation
                           sources
                  (b)      Regulation and frequency response
                  (c)      Operating reserve - spinning
                  (d)      Operating reserve - supplemental

The requirements of these services shall be as stated in ComEd's Open Access
Transmission Tariff as filed with FERC, and any requirements of MAIN, NERC, any
ISO and any successors to the functions thereof.

10.      LIMITATION OF LIABILITY

                  In no event or under any circumstances shall either Party
(including such Party's affiliates and such Party's and such affiliates'
respective directors, officers, employees and agents) be liable to the other
Party (including such Party's affiliates and such Party's and such affiliate's
respective directors, officers, employees and agents) for any special,
incidental, exemplary, indirect, punitive or consequential damages or damages
in the nature of lost profits, whether such loss is based on contract, warranty
or tort (including intentional acts, errors or omissions, negligence,
indemnity, strict liability or otherwise). A Party's liability under this
Agreement shall be limited to direct, actual damages, and all other damages at
law or in equity are waived.

                  Notwithstanding the foregoing provisions of this Section or
any other Section hereof, if

                                      20
<PAGE>

                  (i)      ComEd dispatches the delivery of Electric Energy
         from a Reserved Unit in accordance with the provisions hereof (other
         than during a ComEd Event of Default under Section 14(b)(i)) and
         Seller fails to provide the Electric Energy so dispatched by ComEd, or

                  (ii)     if Seller falls to declare a Reserved Unit Available
         at its Net Dependable Capacity (as set forth in Appendix A),

and, during such failure, Seller sells or provides electric energy from the
Reserved Unit to any Person other than ComEd (including Seller but excluding
provision or use of electric energy by Seller solely for use at the Site), ComEd
shall, in addition to any rights it has to an adjustment of payments otherwise
due hereunder or to terminate this Agreement, be entitled to reimbursement by
Seller for all of ComEd's out-of-pocket costs related to or resulting from such
failure by Seller, including:

                  (w)      the costs to purchase and transmit electric energy in
substitution for the subject Electric Energy to the extent such costs exceed the
costs that would have been due hereunder had, in the case of a failure under
clause (i) above, Seller provided the Electric Energy dispatched by ComEd, or
the costs to purchase and transmit electric energy in substitution for the Net
Dependable Capacity (as set forth in Appendix A) from the subject Reserved Unit
to the extent such costs exceed the costs that would have been due hereunder
had, in the case of a failure under clause (ii) above, Seller declared such
Reserved Unit Available and ComEd had dispatched Electric Energy from such
Reserved Unit in each case in an amount inclusive of the electric energy sold to
such Person;

                  (x)      any and all amounts paid (whether in the form of cash
payments, bill credits, tariff adjustments or otherwise) by ComEd to its
customers pursuant to statute, tariff or order of a tribunal of competent
jurisdiction or other Requirement of Law because ComEd was unable to provide
electric energy to any of its customers to the extent that all or any part of
such inability could reasonably have been expected to have been avoided absent
such failure by Seller;

                  (y)      attorneys', consultants' and witnesses' fees incurred
by ComEd in connection with a regulatory or judicial investigation or proceeding
of any kind related to or resulting from an inability of ComEd to provide
electric energy to any of its customers to the extent that all or any part of
such inability could reasonably have been expected to have been avoided absent
such failure by Seller; and

                                       21
<PAGE>

                  (z)      any other amounts owed to third parties because of
ComEd's inability to deliver electric energy if all or any part of such
inability could reasonably have been expected to have been avoided absent such
failure by Seller.

In addition, if ComEd is unable to provide electric energy to any customer or
third party and all or part of such inability could reasonably have been
expected to have been avoided absent such failure by Seller, ComEd will suffer
significant damages in addition to its out-of-pocket costs, the quantification
of which is difficult to ascertain. Accordingly, if ComEd is unable to provide
electric energy to any customer or third party and all or any part of such
inability could reasonably have been expected to have been avoided absent such
failure by Seller, and, during such failure by Seller, Seller sells or provides
electric energy from the subject Reserved Unit to any person other than ComEd
(including Seller but excluding provision or use of electric energy by Seller
solely for use at the Site), Seller shall pay for each occurrence, in addition
to the out-of-pocket costs described above, liquidated damages to ComEd in the
amount of $25,000 for each megawatt of Net Dependable Capacity (as set forth in
Appendix A) for the relevant Reserved Unit.

11.       DISAGREEMENTS.

                  (a)      ADMINISTRATIVE COMMITTEE PROCEDURE. Except to the
extent otherwise provided in Section 5(d), if any disagreement arises on matters
concerning this Agreement, the disagreement shall be referred to one
representative of each Party, who shall attempt to timely resolve the
disagreement. If such representatives can resolve the disagreement, such
resolution shall be reported in writing to and shall be binding upon the
Parties. If such representatives cannot resolve the disagreement within a
reasonable time, or a Party fails to appoint a representative within 10 days of
written notice of the existence of a disagreement, then the matter shall proceed
to arbitration as provided in Section 11(b).

                  (b)      ARBITRATION. If pursuant to Section 11(a), the
Parties are unable to resolve a disagreement arising on a matter pertaining to
this Agreement, such disagreement shall be settled by arbitration in Chicago,
Illinois. The arbitration shall be governed by the United States Arbitration
Act (9 U.S.C. Section 1 ET SEQ.), and any award issued pursuant to such
arbitration may be enforced in any court of competent jurisdiction. This
agreement to arbitrate and any other agreement or consent to arbitrate entered
into in accordance herewith will be specifically enforceable under the
prevailing arbitration law of any court having jurisdiction. Notice of demand
for arbitration must

                                      22
<PAGE>

be filed in writing with the other Party to this Agreement. Arbitration shall
be conducted as follows:

                  (i)      Either Party may give the other Party written notice
         in sufficient detail of the disagreement and the specific provision of
         this Agreement under which the disagreement arose. The demand for
         arbitration must be made within a reasonable time after the
         disagreement has arisen. In no event may the demand for arbitration be
         made if the institution of legal or equitable proceedings based on such
         disagreement is barred by the applicable statute of limitations. Any
         arbitration related to this Agreement may be consolidated with any
         other arbitration proceedings related to this Agreement.

                  (ii)     The Parties shall attempt to agree on a person with
         special knowledge and expertise with respect to the matter at issue to
         serve as arbitrator. If the Parties cannot agree on an arbitrator
         within ten days, each shall then appoint one person to serve as an
         arbitrator and the two thus appointed shall select a third arbitrator
         with such special knowledge and expertise to serve as Chairman of the
         panel of arbitrators; and such three arbitrators shall determine all
         matters by majority vote; PROVIDED HOWEVER, if the two arbitrators
         appointed by the Parties are unable to agree upon the appointment of
         the third arbitrator within five days after their appointment, both
         shall give written notice of such failure to agree to the Parties, and,
         if the Parties fail to agree upon the selection of such third
         arbitrator within five days thereafter, then either of the Parties upon
         written notice to the other may require appointment from, and pursuant
         to the rules of, the Chicago office of the American Arbitration
         Association for commercial arbitration. Prior to appointment, each
         arbitrator shall agree to conduct such arbitration in accordance with
         the terms of this Agreement.

                  (iii)    The Parties shall have sixty days from the
         appointment of the arbitrator(s) to perform discovery and present
         evidence and argument to the arbitrator(s). During that period, the
         arbitrator(s) shall be available to receive and consider all such
         evidence as is relevant and, within reasonable limits due to the
         restricted time period, to hear as much argument as is feasible,
         giving a fair allocation of time to each Party to the arbitration.
         The arbitrator(s) shall use all reasonable means to expedite
         discovery and to sanction noncompliance with reasonable discovery
         requests or any discovery order. The arbitrator(s) shall not consider
         any evidence or argument not presented during such period and shall not
         extend such period except by the written consent of both Parties. At
         the conclusion of such period, the arbitrator(s) shall have forty-five
         calendar days

                                         23
<PAGE>

         to reach a determination. To the extent not in conflict with the
         procedures set forth herein, which shall govern, such arbitration shall
         be held in accordance with the prevailing rules of the Chicago office
         of the American Arbitration Association for commercial arbitration.

                  (iv)     The arbitrator(s) shall have the right only to
         interpret and apply the terms and conditions of this Agreement and to
         order any remedy allowed by this Agreement, but may not change any term
         or condition of this Agreement, deprive either Party or any right or
         remedy expressly PROVIDED HEREUNDER, or provide any right or remedy
         that has been expressly excluded hereunder.

                  (v)      The arbitrator(s) shall give a written decision to
         the Parties stating their findings of fact and conclusions of law, and
         shall furnish to each Party a copy thereof signed by him (them) within
         five calendar days from the date of their determination. The
         arbitrator's(s') decision shall be final and binding upon the Parties.

                  (vi)     Each Party shall pay the cost of the arbitrator(s)
         with respect to those issues as to which they do not prevail, as
         determined by the arbitrator(s).

                  (c)      OBLIGATIONS TO PAY CHARGES AND PERFORM. If a
disagreement should arise on any matter which is not resolved as provided in
Section 11(a), then, pending the resolution of the disagreement by arbitration
as provided in Section 11(b), Seller shall continue to operate the Reserved
Units in a manner consistent with the applicable provisions of this Agreement
and ComEd shall continue to pay all charges and perform all other obligations
required in accordance with the applicable provisions of this Agreement.

                  (d)      PRELIMINARY INJUNCTIVE RELIEF. Nothing in this
Section 11 shall preclude, or be construed to preclude, the resort by either
Party to a court of competent jurisdiction solely for the purposes of securing a
temporary or preliminary injunction to preserve the status quo or avoid
irreparable harm pending arbitration pursuant to this Section 11.

                  (e)      SETTLEMENT DISCUSSIONS. The Parties agree that no
statements of position or offers of settlement made in the course of the dispute
process described in this Section 11 will be offered into evidence for any
purpose in any litigation or arbitration between the Parties, nor will any such
statements or offers of settlement be used in any manner against either Party in
any such litigation or arbitration. Further, no

                                       24
<PAGE>

such statements or offers of settlement shall constitute an admission or
waiver of rights by either Party in connection with any such litigation or
arbitration. At the request of either Party, any such written statements and
offers of settlement, and all copies thereof, shall be promptly returned to
the Party providing the same.

12.       ASSIGNMENT; TRANSFER OF RESERVED UNITS

                  (a)      ASSIGNMENT. Neither Party may assign its rights or
obligations under this Agreement without the prior written consent of the other
Party, which shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, ComEd shall have the right to assign its rights and obligations
hereunder without the consent of Seller to (i) any entity that has a net worth
of at least $500 million and credit ratings for long-term secured debt from
Standard & Poor's Ratings Group of BBB- or higher and from Moody's Investors
Service, Inc. of Baa3 or higher or (ii) any affiliate of ComEd. For the purposes
of this Section 12(a), any direct transfer or series of direct transfers
(whether voluntary or by operation of law) of a majority of the outstanding
voting equity interests of Seller (or any entity or entities directly or
indirectly holding a majority of the outstanding voting equity interests of
Seller) to any party other than an affiliate controlled by, or under common
control with, Seller shall be deemed an assignment of this Agreement.

                  (b)      COLLATERAL ASSIGNMENT. Notwithstanding the above,
ComEd hereby consents to the assignment by Seller of a security interest in this
Agreement to any Lenders; PROVIDED that Owner shall have provided notice of any
such assignment to ComEd. ComEd further agrees to execute documentation to
evidence such consent, PROVIDED it shall have no obligation to waive any of its
rights under this Agreement. ComEd recognizes that such consent may grant
certain rights to such Lenders, which shall be fully developed and described in
the consent documents, including (i) this Agreement shall not be amended in any
material respect or terminated (except for termination pursuant to the terms of
this Agreement) without the consent of Lenders, which consent as to amendments
shall not be unreasonably withheld or delayed, (ii) Lenders shall be given
notice of, and a reasonable time period (but in no event more than the time
period provided to Seller) to cure, any Seller breach or default of this
Agreement, (iii) if a Lender forecloses, takes a deed in lieu or otherwise
exercises its remedies pursuant to any security documents, that ComEd shall, at
Lender's request, continue to perform all of its obligations hereunder, and
Lender or its nominee may perform in the place of Seller, and may assign this
Agreement to another party in place of Seller (PROVIDED either (i) such proposed
assignee is creditworthy and possesses experience and skill in the operation of
electric generation plants or (ii) ComEd consents

                                       25
<PAGE>

to the assignment to such proposed assignee, which consent shall not be
unreasonably withheld (it being understood that ComEd may, in deciding
whether to grant such consent, take into account the creditworthiness and the
electric generation plant experience and skill of the proposed assignee)),
and enforce all of Seller's rights hereunder, (iv) that Lender(s) shall have
no liability under this Agreement except during the period of such Lender(s)'
ownership and/or operation of a Reserved Unit(s), (v) that ComEd shall accept
performance in accordance with this Agreement by Lender(s) or its (their)
nominee, (vi) that ComEd shall make all payments to an account designated by
Lender(s), and (vii) that ComEd shall make representations and warranties to
Lender(s) as Lender(s) may reasonably request with regard to (A) ComEd's
corporate existence, (B) ComEd's corporate authority to execute, deliver, and
perform this Agreement, (C) the binding nature of this Agreement on ComEd,
(D) receipt of regulatory approvals by ComEd with respect to its performance
under this Agreement, and (E) whether any defaults by Owner are known by
ComEd then to exist under this Agreement.

                  (c)      TRANSFER OF RESERVED UNITS DURING THE TERM. Prior to
the Termination Date, Seller shall not sell or otherwise transfer any interest
in the Reserved Units to any Person without first obtaining ComEd's written
consent, which consent shall not be unreasonably withheld or delayed and may be
conditioned upon the transferee's assumption of the obligations of Seller under
this Agreement in respect of the Reserved Units. No such assignment shall
relieve Seller from its obligations hereunder, unless otherwise agreed to by
ComEd in writing. Any such sale or transfer without consent under this Section
12 shall be null and void.

13.       TERMINATION BY COMED WITH RESPECT TO CERTAIN GENERATING UNITS

                  Subject to the notice and other requirements contained in this
Section 13, ComEd shall have the right, in its sole discretion, with respect to
each of the Third Contract Year, the Fourth Contract Year and the Fifth Contract
Year to terminate this Agreement with respect to any of the Units (such rights
to terminate being referred to herein collectively as "TERMINATION OPTIONS" and
individually as a "TERMINATION OPTION"). ComEd may exercise a Termination Option
with respect to the Third, Fourth and/or Fifth Contract Years by providing
written notice of such exercise to Seller by no later than 90 days before the
first day of the applicable Contract Year. Such notice shall contain (i) a
statement that ComEd is exercising a Termination Option or Termination Options
and (ii) the Contract Year or Contract Years with respect to which the
Termination Option or Termination Options being exercised relate. Such
termination(s) shall become effective as of the first day of the earliest
Contract Year with respect to which such termination(s) relate, and at such time
this Agreement shall terminate and

                                         26
<PAGE>

be of no further force or effect with respect to the Units so terminated,
PROVIDED THAT, the provisions of Sections 6(e) (Fuel Source and Emissions),
6(f) (Records), 10 (Limitation of Liability), 11 (Disagreements), 14
(Default, Termination and Remedies), and 16 (Indemnification) shall survive
such termination(s), and PROVIDED FURTHER, that any such termination(s) shall
have no effect on this Agreement as it relates to the Units that are not
terminated in accordance with this Section 13.

14.       DEFAULT; TERMINATION AND REMEDIES.

                  (a)      SELLER'S DEFAULT. The occurrence and continuation of
any of the following events or circumstances at any time during the Term, except
to the extent caused by, or resulting from, an act or omission of ComEd in
breach of this Agreement, shall constitute an event of default by Seller
("SELLER'S EVENT OF DEFAULT"):

                  (i)      Seller fails to pay any sum due from it hereunder on
         the due date thereof and such failure is not remedied within ten
         Business Days after receipt of written notice thereof;

                  (ii)     Seller shall without reasonable cause abandon or
         wilfully desert for a period in excess of 24 hours whatever control
         center is responsible for receiving dispatch orders from ComEd with
         respect to the Reserved Units;

                  (iii)    Seller's Bankruptcy; or

                  (iv)     Seller fails in any material respect to perform or
         comply with any other obligation in this Agreement on its part to be
         observed or performed which failure materially and adversely affects
         ComEd, and if reasonably capable of remedy, is not remedied within 60
         days after ComEd has given written notice to Seller of such failure and
         requiring its remedy; PROVIDED, HOWEVER, that if such remedy cannot
         reasonably be cured within such period of 60 days, such failure shall
         not constitute a Seller's Event of Default if Seller has promptly
         commenced and is diligently proceeding to cure such default.

                  (b)      COMED DEFAULT. The occurrence and continuation of any
of the following events or circumstances at any time during the Term, except to
the extent caused by, or resulting from, an act or omission of Seller in breach
of this Agreement, shall constitute an event of default by ComEd ("COMED EVENT
OF DEFAULT"):

                                     27
<PAGE>

                  (i)      ComEd fails to pay any amount due from it pursuant to
         Section 7 hereof on the due date thereof and such failure is not
         remedied within ten Business Days after receipt of written notice
         thereof;

                  (ii)     ComEd fails to pay any sum (other than one set forth
         in subsection (i) above) due from it hereunder on the due date thereof
         and such failure is not remedied within fifteen days after Seller has
         given written notice to ComEd of such failure and requiring its remedy;

                  (iii)    ComEd's Bankruptcy; or

                  (iv)     ComEd fails in any material respect to perform or
         comply with any other obligation in this Agreement on its part to be
         observed or performed which failure materially and adversely affects
         Seller, and if reasonably capable of remedy, is not remedied within 60
         days after Seller has given written notice to ComEd of such failure and
         requiring its remedy; PROVIDED, HOWEVER, that if such remedy cannot
         reasonably be cured within such period of 60 days, such failure shall
         not constitute a ComEd Event of Default if ComEd has promptly commenced
         and is diligently proceeding to cure such default.

                  (c)      REMEDIES AND REMEDIES CUMULATIVE.

                  (i)      Upon the occurrence and during the continuance of a
         ComEd Event of Default or a Seller's Event of Default, the non-
         defaulting party may at its discretion (A) terminate this Agreement
         upon 30 days prior written notice to the Party in default and (B)
         exercise any other rights and remedies available at law or in equity.

                  (ii)     If a ComEd Event of Default under Section 14(b)(i)
         has occurred and is continuing, Seller shall have the right to sell
         the electric energy represented by the Reserved Capacity on a daily
         basis during the continuance of such ComEd Event of Default to third
         parties.

                  (d)      EXTENDED OUTAGE. ComEd may terminate this Agreement
upon thirty days prior written notice to Seller if an outage (including an
outage caused by, or resulting from, a Force Majeure Event) at the Reserved
Units prevents Seller from substantially performing its obligations hereunder
for a consecutive period of 120 days, PROVIDED THAT if Seller demonstrates that
it has taken significant steps toward remediating the circumstances which led to
such outage and certifies in writing to

                                      28
<PAGE>

ComEd that such outage will end within 300 days of its commencement (and such
outage in fact ends within such 300 days), then ComEd may not so terminate
this Agreement.

                  (e)      TERMINATIONS UNDER SECTION 13. This Agreement shall
terminate at such time as all of the Units are terminated by ComEd in accordance
with Section 13.

5.       FORCE MAJEURE

                  (a)      FORCE MAJEURE EVENT. For the purposes of this
Agreement, "FORCE MAJEURE EVENT" means any unforeseeable event, condition or
circumstance beyond the reasonable control of the Party affected (the "AFFECTED
PARTY") which, despite all reasonable efforts of the Affected Party to prevent
it or mitigate its effects, prevents the performance by such Affected Party of
its obligations hereunder. Subject to the foregoing, "Force Majeure Event" shall
include:

                  (i)      explosion and fire (in either case to the extent not
         attributable  to the negligence of the Affected Party);

                  (ii)     flood, earthquake, storm, or other natural calamity
         or act of God;

                  (iii)    strike or other labor dispute;

                  (iv)     war, insurrection or riot;

                  (v)      acts of, or failure to act by, legislative, judicial
         or regulatory agencies or officials (collectively, "GOVERNMENTAL
         ACTION"); and

                  (vi)     Change of Law.

                  (b)      OBLIGATIONS UNDER FORCE MAJEURE.

                  (i)      If the Affected Party is rendered unable, wholly or
         in part, by a Force Majeure Event, to carry out some or all of its
         obligations under this Agreement, then, during the continuance of such
         inability, the obligation of such Party to perform the obligations so
         affected shall be suspended.

                  (ii)      The Affected Party shall give written notice of such
         Force Majeure Event to the other Party as soon as practicable after
         such event occurs,

                                         29
<PAGE>

         which notice shall include information with respect to the nature,
         cause and date of commencement of the occurrence(s), and the
         anticipated scope and duration of the delay. Upon the conclusion of
         the Force Majeure Event, the Affected Party shall, with all reasonable
         dispatch, take all steps reasonably necessary to resume the
         obligation(s) previously suspended.

                  (iii)    Notwithstanding the foregoing, an Affected Party
         shall not be excused under this Section 15(b) for (x) any non-
         performance of its obligations under this Agreement having a greater
         scope or longer period than is justified by the Force Majeure Event or
         (y) the performance of obligations that arose prior to the Force
         Majeure Event. Nothing contained herein shall be construed as requiring
         an Affected Party to settle any strike, lockout or other labor dispute
         in which it may be involved.

                  (c)      CONTINUED PAYMENT OBLIGATION. A Party's obligation to
make payments already owing pursuant to this Agreement shall not be suspended by
a Force Majeure Event.

                  (d)      AVAILABILITY. Notwithstanding this Section 15,
outages or deratings of Reserved Units caused by, or attributable to, Force
Majeure Events shall be considered periods that the affected capacity is
Unavailable unless such Force Majeure Event is an event described in clause (ii)
or (iv) of Section 15(a) (in which case, such affected capacity shall be
considered Available at a Capacity Adjustment Factor of 90 for the Summer Months
and 100 for the Non-Summer Months).

6.       REPRESENTATIONS AND WARRANTIES

                  (a)      REPRESENTATIONS AND WARRANTIES OF SELLER. Seller
hereby makes the following representations and warranties to ComEd:

                  (i)      Seller is a limited liability company duly organized,
         validly existing and in good standing under the laws of the State of
         Delaware, is qualified to do business in the State of Illinois and has
         the legal power and authority to own its properties, to carry on its
         business as now being conducted and to enter into this Agreement and
         carry out the transactions contemplated hereby and perform and carry
         out all covenants and obligations on its part to be performed under and
         pursuant to this Agreement.

                                       30

<PAGE>

                  (ii) The execution, delivery and performance by Seller of this
         Agreement have been duly authorized by all necessary corporate action,
         and do not and will not require any consent or approval of Seller's
         Board of Directors or equity holders other than that which has been
         obtained (evidence of which shall be, if it has not heretofore been,
         delivered to ComEd).

                  (iii) The execution and delivery of this Agreement, the
         consummation of the transactions contemplated hereby and the
         fulfillment of and compliance with the provisions of this Agreement, do
         not and will not conflict with or constitute a breach of or a default
         under, any of the terms, conditions or provisions of any legal
         requirements, or any organizational documents, agreement, deed of
         trust, mortgage, loan agreement, other evidence of indebtedness or any
         other agreement or instrument to which Seller is a party or by which it
         or any of its property is bound, or result in a breach of or a default
         under any of the foregoing.

                  (iv) This Agreement constitutes the legal, valid and binding
         obligation of Seller enforceable in accordance with its terms, except
         as such enforceability may be limited by bankruptcy, insolvency,
         reorganization or similar laws relating to or affecting the enforcement
         of creditors' rights generally or by general equitable principles,
         regardless of whether such enforceability is considered in a proceeding
         in equity or at law.

                  (v) There is no pending, or to the knowledge of Seller,
         threatened action or proceeding affecting Seller before any
         governmental authority which purports to affect the legality, validity
         or enforceability of this Agreement.

                  (vi) Seller has all governmental approvals necessary for it to
         perform its obligations under this Agreement.

                  (b)  REPRESENTATIONS AND WARRANTIES OF COMED. ComEd hereby
         makes the following representations and warranties to Seller:

                  (i) ComEd is a corporation duly organized, validly existing
         and in good standing under the laws of the State of Illinois, is
         qualified to do business in the State of Illinois and has the legal
         power and authority to own its properties, to carry on its business as
         now being conducted and to enter into this Agreement and carry out the
         transactions contemplated hereby and perform and carry out all
         covenants and obligations on its part to be performed under and
         pursuant to this Agreement.

                                       31

<PAGE>

                  (ii) The execution, delivery and performance by ComEd of this
         Agreement have been duly authorized by all necessary corporate action,
         and do not and will not require any consent or approval of ComEd's
         Board of Directors or shareholders other than that which has been
         obtained (evidence of which shall be, if it has not heretofore been,
         delivered to Seller).

                  (iii) The execution and delivery of this Agreement, the
         consummation of the transactions contemplated hereby and the
         fulfillment of and compliance with the provisions of this Agreement do
         not and will not conflict with or constitute a breach of or a default
         under, any of the terms, conditions or provisions of any legal
         requirements, or its articles of incorporation or bylaws, or any deed
         of trust, mortgage, loan agreement, other evidence of indebtedness or
         any other agreement or instrument to which ComEd is a party or by which
         it or any of its property is bound, or result in a breach of or a
         default under any of the foregoing.

                  (iv) This Agreement constitutes the legal, valid and binding
         obligation of ComEd enforceable in accordance with its terms, except as
         such enforceability may be limited by bankruptcy, insolvency,
         reorganization or similar laws relating to or affecting the enforcement
         of creditors' rights generally or by general equitable principles,
         regardless of whether such enforceability is considered in a proceeding
         in equity or at law.

                  (v) There is no pending, or to the knowledge of ComEd,
         threatened action or proceeding affecting ComEd before any governmental
         authority which purports to affect the legality, validity or
         enforceability of this Agreement.

                  (vi) ComEd has all governmental approvals necessary for it to
         perform its obligations under this Agreement.

7.       INDEMNIFICATION

                  Each Party shall indemnify and hold harmless the other
Party, and its officers, directors, agents and employees from and against any
and all claims, demands, actions, losses, liabilities, expenses (including
reasonable legal fees and expenses), suits and proceedings of any nature
whatsoever for personal injury, death or property damage to each other's
property or facilities or personal injury, death or property damage to third
parties caused by the gross negligence or wilful misconduct of the
indemnifying Party that arise out of or are in any manner connected with the
performance of this Agreement,

                                       32

<PAGE>

except to the extent such injury or damage is attributable to the gross
negligence or wilful misconduct of, or breach of this Agreement by, the Party
seeking indemnification hereunder. Title, and all risk relating to, all
Electric Energy purchased by ComEd under this Agreement from a Reserved Unit
shall pass to ComEd at the Point of Delivery for such Reserved Unit. ComEd
shall indemnify Seller for liability from Electric Energy once sold and
delivered at such Point of Delivery; and Seller shall indemnify ComEd for
liability from Electric Energy prior to its delivery at such Point of
Delivery.

8.       NOTICES

                  Unless otherwise provided in this Agreement, any notice,
consent or other communication required to be made under this Agreement shall
be in writing and shall be delivered to the address set forth below or such
other address as the receiving Party may from time to time designate by
written notice:

                  If to ComEd, to:

                           Commonwealth Edison Company
                           One First National Plaza, 37th Floor
                           10 South Dearborn Street
                           Chicago, Illinois 60603
                           Attention: Senior Vice President-Transmission
                           Facsimile No.: (312) 394-3110
                           Confirmation No.: (312) 394-3172

                  with a copy to:

                           Commonwealth Edison Company
                           Law Department
                           Room 1535
                           125 South Clark Street
                           Chicago, Illinois 60603
                           Attention: Associate General Counsel-
                                      Corporate and Commercial
                           Facsimile No.: (312) 394-3950
                           Confirmation No.: (312) 394-5400

                                       33

<PAGE>

                  If to Seller, to:

                           Midwest Generation, LLC
                           One Financial Place - Suite 3500
                           440 South LaSalle Street
                           Chicago, Illinois 60605
                           Attention: President
                           Facsimile No.: (312) 583-6000
                           Confirmation No.: (312) 583-6111

                  with copies to:

                  Edison Mission Marketing & Trading Inc.
                  18101 Von Karman Avenue - Suite 1700
                  Irvine, California 92612
                  Attention: Bulk Power Operations
                  Fax No.: (949) 798-7425
                  Confirmation No.: (949) 798-7421

                  and

                  Edison Mission Energy
                  18101 Von Karman Avenue - Suite 1700
                  Irvine, California 92612
                  Attention: General Counsel
                  Fax No.: (949) 757-0807
                  Confirmation No.: (949) 798-7902

                  and

                  Edison Mission Energy
                  18101 Von Karman Avenue - Suite 1700
                  Irvine, California 92612
                  Attention: Assistant General Counsel
                  Fax No.: (949) 757-0807
                  Confirmation No.: (949) 798-7937

All notices shall be effective when received.

                                       34

<PAGE>

9.       CONFIDENTIALITY

                  Each Party agrees that it will treat in confidence all
documents, materials and other information marked "Confidential,"
"Proprietary" or with a similar designation by the disclosing Party
("CONFIDENTIAL INFORMATION") which it shall have obtained during the course
of the negotiations leading to, and its performance of, this Agreement
(whether obtained before or after the date of this Agreement). Confidential
Information shall not be communicated to any third party (other than, in the
case of Seller, to its affiliates, to its counsel, accountants, financial or
tax advisors, or insurance consultants, to prospective partners and other
investors in Seller and their counsel, accountants, or financial or tax
advisors, or in connection with any financing or refinancing, or its
permitted assignees or transferees; and in the case of ComEd, to its
affiliates, or to its counsel, accountants, financial advisors, tax advisors
or insurance consultants, or its permitted assignees or transferees). As used
herein, the term "Confidential Information" shall not include any information
which (i) is or becomes available to a Party from a source other than the
other Party, (ii) is or becomes available to the public other than as a
result of disclosure by the receiving Party or its agents or (iii) is
required to be disclosed under applicable law or judicial, administrative or
regulatory process, but only to the extent it must be disclosed.

10.      GOVERNING LAW

                  Except as provided in Section 11, this Agreement shall be
deemed to be an Illinois contract and shall be construed in accordance with
and governed by the laws of Illinois without regard to its conflicts of laws
provisions.

11.      PARTIAL INVALIDITY

                  Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder
of such invalid, illegal or unenforceable provision or provisions or any
other provisions hereof, unless such a construction would be unreasonable. In
the event that such a construction would be unreasonable or would deprive a
Party of a material benefit under this Agreement, the Parties shall seek to
amend this Agreement to remove the invalid provision and otherwise provide
the benefit unless prohibited by any Requirements of Law.

                                       35

<PAGE>

12.      WAIVERS

                  The failure of either Party hereto to enforce at any time
any provision of this Agreement shall not be construed to be a waiver of such
provision, nor in any way to affect the validity of this Agreement or any
part hereof or the right of a Party thereafter to enforce each and every such
provision. A waiver under this Agreement must be in writing and state that it
is a waiver. No waiver of any breach of this Agreement shall be held to
constitute a waiver of any other or subsequent breach.

13.      COMPETITIVE TRANSITION CHARGE.

                  The Parties acknowledge that Seller has satisfied its
Competitive Transition Charge (as defined in the Illinois Public Utilities
Act) obligations with respect to the Sites by prepayment, which was included
in the Purchase Price paid under the Asset Sale Agreement.

14.      ENTIRE AGREEMENT AND AMENDMENTS

                  Except as provided in the Asset Sale Agreement and the
Interconnection Agreement, this Agreement supersedes all previous
representations, understandings, negotiations and agreements either written
or oral between the Parties hereto or their representatives with respect to
the subject matter hereof and constitutes the entire agreement of the Parties
with respect to the subject matter hereof. No amendments or changes to this
Agreement shall be binding unless made in writing and duly executed by both
Parties.

                                       36

<PAGE>

                  IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date set forth at the beginning of this Agreement.

                                      COMMONWEALTH EDISON COMPANY

                                      By: /s/ Robert J. Manning
                                          ---------------------------------
                                      Name:   Robert J. Manning
                                      Title:  Executive Vice President

                                      MIDWEST GENERATION, LLC

                                      By: /s/ Georgia R. Nelson
                                          ---------------------------------
                                      Name:   Georgia R. Nelson
                                      Title:  President

                                       37
<PAGE>

         Peaking Units Power Purchase Agreement Appendices
         -----------------------------------------------------------------------

                                   APPENDIX A

                                  DESIGN LIMITS

                  The Design Limits listed below shall be applicable to any
dispatch of the combustion turbine units by ComEd:

<TABLE>
<CAPTION>

==================================================================================================================
                                                                                           Minimum
                         Fuel      Peak          Net          Minimum                        Time           Ramp
Peaker                   Type    Capacity     Dependable     Operating    Start Time        Between         Rate
                                   (MW)        Capacity        Level       (minutes)       Dispatched       (MW/
                                               (MW)(1)        (NetMW)                  Starts (Hours)(2)   minute)
==================================================================================================================
<S>                     <C>      <C>          <C>            <C>          <C>          <C>                 <C>
ASSET GROUP A:
------------------------------------------------------------------------------------------------------------------
Crawford 31             Gas/Oil    55.9           42             8             20             2              12.8
------------------------------------------------------------------------------------------------------------------
Crawford 32             Gas/Oil    57.5          39.8            8             20             2              12.8
------------------------------------------------------------------------------------------------------------------
Crawford 33             Gas/Oil     56           39.1            8             20             2              12.8
------------------------------------------------------------------------------------------------------------------
Fisk 31                   Oil      49.1          41.8           15             10             1               26
------------------------------------------------------------------------------------------------------------------
Fisk 32                   Oil      50.8          43.2           15             10             1               26
------------------------------------------------------------------------------------------------------------------
Fisk 33                   Oil      49.1          39.4           15             10             1               26
------------------------------------------------------------------------------------------------------------------
Fisk 34                   Oil      48.2          38.6           15             10             1               26
------------------------------------------------------------------------------------------------------------------
Waukegan 3l               Oil      53.1          45.1           15             10             1               26
------------------------------------------------------------------------------------------------------------------
Waukegan 32               Oil      55.2          46.9           15             10             1               26
------------------------------------------------------------------------------------------------------------------
Calumet 3l              Gas/Oil    55.9          48.5            8             20             2              12.8
------------------------------------------------------------------------------------------------------------------
Calumet 33              Gas/Oil    41.7          37.7            8             20             2               9.6
------------------------------------------------------------------------------------------------------------------
Calumet 34              Gas/Oil    50.9          42.9            8             20             2              12.8
------------------------------------------------------------------------------------------------------------------
ASSET GROUP B:
------------------------------------------------------------------------------------------------------------------
Joliet 31               Gas/Oil    58.9          51.2            8             20             2              12.8
------------------------------------------------------------------------------------------------------------------
Joliet 32               Gas/Oil    56.8          49.9            8             20             2              12.8
------------------------------------------------------------------------------------------------------------------

                                                 A-1

<PAGE>

         Peaking Units Power Purchase Agreement Appendices
         -----------------------------------------------------------------------

==================================================================================================================
                                                                                           Minimum
                         Fuel      Peak          Net          Minimum                        Time           Ramp
Peaker                   Type    Capacity     Dependable     Operating    Start Time        Between         Rate
                                   (MW)        Capacity        Level       (minutes)       Dispatched       (MW/
                                               (MW)(1)        (NetMW)                  Starts (Hours)(2)   minute)
==================================================================================================================
OFF-SITE:
------------------------------------------------------------------------------------------------------------------
Bloom 33                  Oil      24.1          21.9          Base            20             2               N/A
------------------------------------------------------------------------------------------------------------------
Bloom 34                  Oil       26           22.8          Base            20             2               N/A
------------------------------------------------------------------------------------------------------------------
Electric Junction 31    Gas/Oil    59.4           53             8             20             2              12.8
------------------------------------------------------------------------------------------------------------------
E1ectric Junction 32    Gas/Oil    59.2          52.8            8             20             2              12.8
------------------------------------------------------------------------------------------------------------------
Electric Junction 33    Gas/Oil    59.2          52.8            8             20             2              12.8
------------------------------------------------------------------------------------------------------------------
Sabrooke 31             Gas/Oil    25.2          22.2          Base            20             2               N/A
------------------------------------------------------------------------------------------------------------------
Sabrooke 32             Gas/Oil    24.9          17.7          Base            20             2               N/A
------------------------------------------------------------------------------------------------------------------
Sabrooke 33             Gas/Oil    23.8          19.9          Base            20             2               N/A
------------------------------------------------------------------------------------------------------------------
Sabrooke 34             Gas/Oil    12.5          10.5          Base            20             2               N/A
------------------------------------------------------------------------------------------------------------------
Lombard 32              Gas/Oil    31.5          31.5            4             10             1               13
------------------------------------------------------------------------------------------------------------------
Lombard 33              Gas/Oil    32.4          32.4            4             10             1               13
==================================================================================================================

</TABLE>

(1)   Summer net megawatts.
(2)   Except during an Emergency Condition affecting the ComEd System and for
      instances where ComEd and Seller agree on a price to induce Seller to
      cycle a unit under the indicated time.

                                                 A-2

<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

                                   APPENDIX B

                              MAIN GUIDE NUMBER 3A

                                MAIN GUIDE NO. 3A
                              (Formerly Guide No. 3)
                                 (Revision No. 3)
                                   June 8, 1995
                             APPROVED NOVEMBER 9, 1995

                          PROCEDURE FOR THE UNIFORM RATING
                              OF GENERATING EQUIPMENT

                  The Mid-America Interconnected Network, Inc. bylaws provide
for the coordination of planning, construction and utilization of generation
and transmission facilities on a regional basis for reliability of electric
bulk power supply. This MAIN Guide presents the criteria for uniform rating
of generating equipment on the systems of MAIN members.

1.       General

                  Generating capability to meet the system load and provide
the required amount of reserves is necessary to assure the maximum degree of
service reliability. This generating capability must be accounted for in a
uniform manner which assures the use of consistently attainable values for
planning and operating the system.

                  Procedures are herein established for rating generating
units in service or which will be brought into service in the future. These
procedures define the framework under which the ratings are to be established
while recognizing the necessity of exercising judgement in their
determination. The tests required are functional and do not require special
instrumentation. They are designed to demonstrate that the ratings can be
obtained for the time periods required under normal operating conditions for
the equipment being tested.

                  It is intended that the terms defined and the ratings
established pursuant to this MAIN Guide shall be used for all MAIN purposes,
including determining generation reserves for both planning and operating
purposes, scheduling maintenance, and preparation

                                      B-1

<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

of reports or other information for industry organizations, news media, and
governmental agencies.

2.       Uniform Ratings

                  Each MAIN member shall establish Monthly Net Capability
ratings for each generating unit and station on the member's system. The
Monthly Net Capability is the net power output which can be obtained for the
period specified on a monthly adjusted basis with all equipment in service
under average conditions of operation and with equipment in an average state
of maintenance. The Monthly Net Capability should include generating
capability which is temporarily out of service for maintenance or repair.

                  The monthly adjustments required to develop Monthly Net
Capability are intended to include such seasonal variations as ambient
temperature, condensing water temperature and availability, fuels, steam
heating loads, reservoir levels, and scheduled reservoir discharge.

                  Generating capability shall be tested annually to
demonstrate and verify that the Monthly Net Capability can be achieved in the
month of the test. It is intended that frequent changes in Monthly Net
Capability be avoided. The reported capability is, therefore, a figure which
should not be altered until the accumulated evidence of tests and analyses or
operating experience indicate that a long-term change has taken place. The
Monthly Net Capability shall be confirmed annually and revised at other times
when necessary. Confirmations and revisions will be submitted to the MAIN
Coordination Center.

3.       General Guides for Establishing Capability Ratings

                  The following general guides shall be applied in
establishing Monthly Net Capability:

                  (a) The total Monthly Net Capability rating shall be that
available regularly to satisfy the daily load patterns of the member and
shall be available for four continuous hours or more. The rating established
must not require a period of operation at a reduced level during a system's
remainder of the peak period to recover the Monthly Net Capability.

                                      B-2

<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

                  (b) The Monthly Net Capability will be determined
separately for each generating unit in a power plant where the input to the
prime mover of the unit is independent of the others. The Monthly Net
Capability will be determined as a group for commonheader steam plants or
multiple-unit hydro plants and each unit assigned a rating by apportioning
the combined capability among the units.

                  (c) Monthly Net Capability, as reported, will not be
reduced to provide regulating margin or spinning reserve. It will reflect
operation at the power factor level at which the generating equipment is
normally expected to be operated over the daily peak load period. It will
exclude the temporary higher output attainable immediately after a new unit
goes into service or immediately after an overhaul.

                  (d) Extended capability of a unit or plant obtained through
bypassing of feedwater heaters, by utilizing other than normal steam
conditions, or by abnormal operation of auxiliaries in steam plants; or by
abnormal utilization of reservoir storage in hydro plants; or by abnormal
operation of combustion turbines or diesel units; may be included in the
Monthly Net Capability if the following conditions are met:

                  (i) The extended capability based on such conditions will be
         available for a period of not less than four continuous hours when
         needed and meets the restrictions of Section III-A.

                  (ii) Normal procedures have been established so that this
         capability will be made available promptly when requested by the
         dispatcher.

                  (e) The Monthly Net Capability established for nuclear
units will be determined taking into consideration the fuel management
program and any restrictions imposed by governmental agencies.

                  (f) The Monthly Net Capability established for
hydro-electric plants, including pumped-hydro, will be determined taking into
consideration the reservoir storage program and any restrictions imposed by
governmental agencies and will be based on median hydro conditions.

                                      B-3

<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

4.       Testing Procedures to Demonstrate Capability

                  (a)   General Procedure for Testing

                  (i)   Ratings will be confirmed annually or more frequently if
         appropriate to demonstrate the Monthly Net Capability. IF ADEQUATE DATA
         ARE AVAILABLE TO DEMONSTRATE THE CAPABILITY DURING NORMAL PEAK LOAD
         PERIOD OPERATION, NO SPECIAL TEST IS REQUIRED. Peaking units and cold
         reserve units which are not operated frequently shall be tested at such
         intervals as necessary to assure that capability is available to meet
         operating reserve requirements.

                  (ii)  If the total capability of a plant is materially
         affected by the interaction of its parts, a test of the entire plant
         will be performed to demonstrate Monthly Net Capability.

                  (iii) All equipment when tested will be in normal operating
         condition with all auxiliary equipment needed for normal operation in
         service and with provision for extended capability if this capability
         is to be included in Monthly Net Capability. Energy consumption by
         auxiliary facilities common to the entire plant (for example,
         coal-handling or lighting) will be distributed over the appropriate
         units in the plant, and will represent the consumption normally
         experienced during the high-load period of the day.

                  (iv) It is intended that the test loadings should be
         maintained at a constant level. The reported test results will be no
         greater than the MWh/hr integrated output for the test period.

                  (b)  Steam Turbo-Generation Unit Tests, Excluding Steam
         Turbines with Gas or Oil Fired Boilers

                  (i)  The test period for steam turbo-generator units,
         including both fossil fuel and nuclear reactor steam generators, will
         be not less than four continuous hours.

                  (ii) Generating unit net capability as affected by the turbine
         exhaust pressure will be corrected to the average for the past five
         years of the monthly averages of the daily maximum circulating water
         temperatures for the month of the test. Steam conditions will
         correspond to the operating standard established by the

                                      B-4

<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

         member for the unit or plant. The steam generator will be operated with
         the regularly available type and quality of fuel.

                  (c)  Tests of Combustion Turbine and Diesel Units and Steam
         Turbines with Gas or Oil Fired Boilers

                  (i)  The test period for combustion turbine and diesel units
         and steam turbines with gas or oil fired boilers will be of sufficient
         duration to permit stabilized operating conditions to be attained.

                  (ii) Ambient temperature conditions will be corrected to the
         average for the past five years of the monthly maximum temperatures for
         the month of the test. Where evaporative coolers are used, the
         temperature at the discharge of the evaporative coolers shall be the
         basis for ambient temperature corrections.

                  (iii) Generating unit net capability as affected by the
         turbine exhaust pressure will be corrected to the average for the past
         five years of the monthly averages of the daily maximum circulating
         water temperatures for the month of the test. Steam conditions will
         correspond to the operating standard established by the member for the
         unit or plant. The steam generator will be operated with the regularly
         available type and quality of fuel.

                  (d)   Hydro-Electric Unit Tests

                  (i)   The test period for hydro-electric units, including
         pumped-hydro units, will be not less than one hour.

                  (ii)  Water conditions will be corrected to the median
         conditions for the month of the test.

                  (e)   Reactivated Unit Tests

                        Deactivated generating equipment which is not being
         reported and is being returned to active status shall be tested within
         thirty days to demonstrate its Monthly Net Capability.

                                      B-5

<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

5.       Reporting Procedures

                  Each member shall submit the required data on the included
Uniform Rating Forms to the MAIN Coordination Center annually on or before
November 1 for the following calendar year. Each annual report shall cover
all existing units, planned start-up of new units, and planned retirements of
units and shall consist of the following:

                  (i) A letter identifying those units whose rating has not
         changed, showing the dates of latest tests confirming capabilities.

                  (ii) Completely revised forms (Form A and B-1, B-2, or B-3)
         for units on which a change has occurred.

                  (iii) Completely revised form (Form A) showing planned
         additions or retirements beginning with the month of commercial
         operation or month of retirement.

Between annual reporting, revised forms shall be submitted as necessary for
new units placed in commercial operation, units retired, and for units where
tests show the rating has changed. Any change in additions, retirements, or
ratings shall be submitted within 30 days of the addition, retirement, or
test. In this manner, by each November 1, all test data should be current.
However, the letter should be submitted confirming the dates of tests.

                  The MAIN Coordination Center will analyze and review the
annual reporting for completeness and correctness and report the need for
clarification to the member concerned. The MAIN Coordination Center will
maintain the updated set of reports, including current changes as they occur,
from the MAIN members, and will provide complete reports and/or revisions to
the members requesting them.

                  (a)   Uniform Rating Form A

                        This form is used to report the Monthly Net
Capability of each unit in each station. Where required by the number of
units in a station, additional sheets should be used.

                  (b)   Uniform Rating Forms B-1, B-2, and B-3

                                      B-6

<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

                        These forms are used to report test results, certain
actual and five year average variables where pertinent, and to show
relationship of actual net generation to stated capability during the month
of the test. It is the intent that test data equal or exceed stated Monthly
Net Capability to demonstrate that this level of generation can be achieved.
Where simultaneous tests of several units are conducted, as in common steam
header plants, data should be reported for each unit and total of the group.

                  Test results should be reported as follows:

                  Form B-1 --steam turbo-generator units
                  Form B-2 --hydro electric units
                  Form B-3 --Combustion turbine units and diesel units

NOTE: IN SUBMITTING REVISED FORMS, EACH FORM SHALL BE SUBMITTED IN SUCH A
MANNER THAT IT COMPLETELY REPLACES THE SHEET ON WHICH DATA ARE BEING REVISED.

                                      B-7
<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

                               APPENDIX C

                  EO COMMUNICATIONS AND GUIDELINES

                  1.       PURPOSES. The purposes of this Appendix are (i) to
describe the nature of the communications link that will be maintained
between Seller and ComEd, (ii) to establish the nature and content of
communications relating to availability of the Reserved Units and their
dispatch, and (iii) to establish certain operating procedures. The Parties
recognize that it is important that such communication channels be
established so that only responsible and authorized personnel can issue
requests and/or orders that may impact unit reliability and availability as
well as transmission system security and stability.

                  2.       COMMUNICATIONS LINK. The Parties shall establish
and maintain dedicated telephone lines for the dispatch of the Reserved
Units. Seller will notify EO as soon as possible of any disruption or
unavailability of the dedicated telephone lines or standard telephone lines.
ComEd shall also establish and maintain a radio system for communications,
which radio system shall be used in the event that the aforementioned
communications methods are unavailable. Seller shall cooperate in performing
periodic tests of the radio system as from time to time directed by the EO
Dispatcher. Seller shall notify EO promptly of any problems with said radio
system.

                  (a)      Telephone numbers are set forth below for the
                           indicated persons:

                           EO Generation Dispatcher            (630) 691-4744
                           EO Transmission Dispatcher          (630) 691-4772
                           EO Operation Supervisor             (630) 691-4730
                           EO Generation Dispatch Supervisor   (630) 691-4693
                           EO facsimile transmission number    (630) 691-4899

The alternate office for EO will be used as a backup in the event that the
normal office of EO is not operational. The telephone numbers of the alternate
office are (815) 727-5902, 5903, and the facsimile transmission number is (815)
727-5745.

                  3.       CONTENT OF COMMUNICATIONS. To the extent that events
are known or anticipated, Seller shall provide to the EO Generation Dispatcher
information regarding the availability of the Reserved Units, including
information regarding the following matters:

                                      C-1
<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

                  (i)      conditions, issues or events which may affect the
         output or reliability of the Reserved Units;

                  (ii)     time of day (based on a twenty-four hour clock) when
         a Reserved Unit is placed on the line and taken off the line;

                  (iii)    changes of rated capacity of a Reserved Unit, when it
         is known that such changes have taken place or will take place;

                  (iv)     Reserved Unit de-ratings, including the amount of any
         derate, the estimated or known start time and date of the derate, the
         estimated or known ending time and date of the derate, and the cause of
         the derate;

                  (v)      the availability, or lack of availability, of remote
         controls on a Reserved Unit and the times in which such controls will,
         or will not, be available and the reason for such limitations;

                  (vi)     conditions at the Site or of a Reserved Unit that
         could affect the present or anticipated capability of a Reserved Unit,
         including problems related to fuel, fires, loss of essential equipment
         and opacity excedences;

                  (vii)    when required testing or other operational work could
         limit the availability or maneuverability of a Reserved Unit;

                  (viii)   Seller's desire to declare a Substitute Unit to
         replace Unavailable Capacity, including the capacity and schedule of
         energy and ramping ability; and

                  (ix)     Seller's desire to request the release of energy from
         undispatched on-line capacity of a Reserved Unit or an off-line
         Reserved Unit under the circumstances provided in Section 6(b)(i) of
         this Agreement.

As it becomes available or anticipated, such information shall be made available
to the EO Generation Dispatcher. To the extent that such information reflects
anticipated events over which Seller has some control, Seller shall undertake to
coordinate the occurrence of such event with the EO Generation Dispatch
Supervisor.

                                     C-2
<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

                  (a)      Seller shall use the forms attached as Appendix D
for the purpose of reporting Reserved Unit capability, ramp rates, oil
storage inventory, outages and deratings. Such forms consist of the following
elements and shall be completed and transmitted by facsimile transmission to
the EO Generation Dispatcher:

                  (i)      Form "Page 1," "[Location] Generation Offer Sheet,"
         is the cover sheet to be used for all facsimile transmissions; and

                  (ii)     Form "Page 2," "Generation Capability," is the sheet
         to be used to report with respect to each Reserved Unit (1) its net
         generating capability for the twenty-four period beginning 12:00 a.m.,
         Midnight (0000 hours) (Chicago time) the following day and (2) derating
         and outage information, which sheet shall be completed and transmitted
         daily by 11:00 p.m. (2300 hours) (Chicago time).

ComEd shall acknowledge receipt of any such facsimile transmissions by signing
the "Page 1" cover sheet and transmitting such signed page by facsimile
transmission to Seller at the return facsimile transmission number indicated
thereon. Copies of the transmissions described in this Section 3(b) shall be
retained by Seller and ComEd for at least 36 months, after which they may be
destroyed.

                  (b)      Seller shall provide information regarding Reserved
Unit availability by telephone on a daily basis to ComEd's Wholesale Energy
Trading Organization.

                  4.       DISPATCH: OPERATIONS. The EO Generation Dispatcher
shall issue dispatch orders on behalf of ComEd, which orders shall be given by
the EO Generation Dispatcher to Seller. Following receipt by Seller of any such
order, Seller shall repeat back the content of such order to the EO Generation
Dispatcher to confirm receipt and understanding of such order.

                  (a)      Seller shall perform the following tasks in order
to assist in meeting the dispatch needs of the ComEd System:

                  (i)      maintain generating control systems and subsystems
         enabling the Reserved Units to synchronize and ramp to the generation
         levels as ordered by the EO Generation Dispatcher in the time durations
         and at the rates as set forth in Appendix A;

                                        C-3
<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

                  (ii)     to the extent that the remote control capability
         identified in Section 3(a)(v) is unavailable, Seller shall arrange to
         man each such affected site, as requested by the EO Generation
         Dispatcher, with operating personnel to operate the site;

                  (iii)    operate the Reserved Units at generation levels as
         requested by the EO Generation Dispatcher, and Seller shall promptly
         notify the EO Generation Dispatcher if the Reserved Units are unable
         for any reason to achieve such generation levels; and

                  (iv)     bring the Reserved Units to their peak capacity
         levels as set forth in Appendix A as requested by the EO Generation
         Dispatcher, and Seller shall promptly notify the EO Generation
         Dispatcher if the Reserved Units are unable for any reason to achieve
         such levels.

                                      C-4
<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

                                   APPENDIX D

Page 1:                         REPORTING FORMS

                    _______________ GENERATION OFFER SHEET

                 DATA APPLICABLE FOR AVAILABILITY DECLARATION

FOR THE PERIOD OF: 00:00____________ to 23:59_____________

TO:   COMED EO       FAX NO:       (630) 691-4899
                     TELEPHONE NO:   (630) 691-4744 GENERATION DISP. SUPERVISOR
                                   (630) 691-4730 OPERATIONS SUPERVISOR
--------------------------------------------------------------------------------
THIS FAX IS A SUBMISSION OF
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
GENERATION OFFER DATA
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A REVISION TO THE PREVIOUSLY SUBMITTED OFFER OF:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
THIS DOCUMENT IS A HARDCOPY BACK-UP TO THE OFFER OF:
--------------------------------------------------------------------------------

FULL SUBMISSION:      _______     NUMBER OF PAGES INCLUDING COVER PAGE: _____
PARTIAL SUBMISSION:   _______

SUBMITTED BY:
             -------------------------------------------------------
DATE:
             ----------------------------------------------------------------

IF YOU DO NOT RECEIVE ALL THE PAGES OR IF CLARIFICATION OR RETRANSMISSION IS
REQUIRED

        CALL: (___) ___-____ EXT. ____

RETURN ACKNOWLEDGMENT FAX TO THE ATTENTION OF:_______________________

        FAX NUMBER (___) ___-____

ACKNOWLEDGMENT BY COMED: (SIGNATURE)
                                     -------------------------------------------
                         (TITLE)     -------------------------------------------

ACKNOWLEDGMENT DATE AND TIME:
                              -----------------------------------------

                                    D-1

<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

                                    D-2

<PAGE>

Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------

Page 2:                 ______________ GENERATION OFFER DATA

AVAILABILITY DECLARATION PERIOD COMMENCING 00:00 __________ TO: 23:59 __________

                                           Capabilities based on the forecasted
                                           peak hour temperature of __________.

                                           GENERATION CAPABILITY

RESERVED UNIT #__________

PEAK LOAD CAPABILITY:      _________ MW

BASE LOAD CAPABILITY:      _________ MW

MINIMUM LOAD CAPABILITY:   _________ MW

MAXIMUM MVARS:             _________

MINIMUM MVARS:             _________

HOURS OF OIL AVAILABLE AT BASE LOAD: _________

DERATINGS:
CAUSE CODE:______MW______START TIME______DATE______STOP TIME______DATE_____
CAUSE CODE:______MW______START TIME______DATE______STOP TIME______DATE_____
CAUSE CODE:______MW______START TIME______DATE______STOP TIME______DATE_____
CAUSE CODE:______MW______START TIME______DATE______STOP TIME______DATE_____
CAUSE CODE:______MW______START TIME______DATE______STOP TIME______DATE_____
CAUSE CODE:______MW______START TIME______DATE______STOP TIME______DATE_____

                                    D-3<PAGE>

                                                                  Exhibit 10.89
                                                                  EXECUTION COPY

                             PARTICIPATION AGREEMENT

                            dated as of June 23, 2000

                                      among

                             MIDWEST GENERATION, LLC

                                   as Lessee,

                              EDISON MISSION ENERGY

                                  as Guarantor,

                                  EME/CDL TRUST

                                   as Lessor,

                   THE INVESTORS PARTY TO THE TRUST AGREEMENT,

                                  as Investors,

                            WILMINGTON TRUST COMPANY,

                         not in its individual capacity,
                except as provided herein, but solely as Trustee,

             THE PERSONS LISTED AS NOTEHOLDERS ON SCHEDULE I HERETO

                                 as Noteholders,

                          CITICORP NORTH AMERICA, INC.

                          as Administrative Agent, and

                          CITICORP NORTH AMERICA, INC.

                              as Collateral Agent.

                          Synthetic Lease Financing of
                           Combustion Turbines at the
                Crawford, Fisk, Waukegan, Calumet, Joliet, Bloom,
         Electric Junction, Sabrooke and Lombard Peaking Units, Illinois

<PAGE>

                                          TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                            PAGE
<S>                                                                                         <C>
SECTION 1.   DEFINITIONS.......................................................................2

SECTION 2.   SUMMARY OF THE TRANSACTIONS............................................. .........2
    2.1      Basic Documents...................................................................2
    2.2      Leased Equipment Purchase and Lease...............................................2
    2.3      Nature of Transaction.............................................................2
    2.4      Legal and Tax Representation......................................................3

SECTION 3.   THE LOANS AND INVESTOR CONTRIBUTIONS..............................................3
    3.1      Loans.............................................................................3
    3.2      Security; Consent to Assignment...................................................3
    3.3      The Investor Contributions........................................................4
    3.4      Obligations Several...............................................................4
    3.5      Procedure for Advances............................................................5
    3.6      Continuation and Conversion Elections.............................................6
    3.7      Funding...........................................................................6
    3.8      Funding; Application of Proceeds..................................................7
    3.9      Time and Place of Closing.........................................................7
    3.10     The Lessor Account; Priority of Payments..........................................7
    3.11     Payments to Investors and Noteholders............................................10
    3.12     Use of Proceeds..................................................................11
    3.13     Interest and Yield...............................................................11
    3.14     Interest Rate and Yield Rate Determination.......................................12
    3.15     Fees.............................................................................12
    3.16     Prepayments......................................................................12

SECTION 4.   CERTAIN LIBO RATE AND OTHER PROVISIONS...........................................13
    4.1      LIBO Rate Lending Unlawful.......................................................13
    4.2      Inability to Determine Rates.....................................................14
    4.3      Increased LIBO Rate Advance Costs................................................14
    4.4      Obligation to Mitigate...........................................................14
    4.5      Funding Losses...................................................................16

                                      i
<PAGE>

    4.6      Increased Capital Costs..........................................................16
    4.7      Taxes............................................................................17
    4.8      Computations.....................................................................19
    4.9      Sharing of Payments..............................................................19
    4.10     Setoff...........................................................................20
    4.11     Replacement of Noteholder or Investor............................................21

SECTION 5.   CONDITIONS TO CLOSING............................................................21
    5.1      Conditions to Closing............................................................21

SECTION 6.   INDEMNITIES......................................................................26
    6.1      Guarantor General Indemnity......................................................26
    6.2      Lessee General Indemnity.........................................................33
    6.3      General Tax Indemnity............................................................39
    6.4      Gross Up.........................................................................51
    6.5      Tax Returns......................................................................51
    6.6      Withholding Tax Exemption........................................................52
    6.7      Environmental Indemnity..........................................................53
    6.8      Limitation on Environmental Indemnity............................................54

SECTION 7.   CERTAIN LEASE RELATED PROVISIONS.................................................54
    7.1      Renewal Lease Terms..............................................................54
    7.2      Limitation on Lessee's Liability.................................................55

SECTION 8.   LESSEE REPRESENTATIONS AND WARRANTIES............................................56
    8.1      Organization; Power; Compliance with Law and Contractual Obligations.............56
    8.2      Non-Contravention................................................................56
    8.3      Governmental Approval; Regulation................................................56
    8.4      Validity.........................................................................57
    8.5      Litigation.......................................................................57
    8.6      Ownership of Properties; Liens...................................................57
    8.7      Taxes............................................................................57
    8.8      Pension and Welfare Plans........................................................58

                                      ii
<PAGE>

    8.9      Environmental Warranties.........................................................58
    8.10     Regulations T, U and X...........................................................60
    8.11     Accuracy of Information..........................................................60
    8.12     Perfection of Security Interest..................................................60
    8.13     Chief Executive Office of Lessee.................................................61
    8.14     No Material Adverse Change.......................................................61
    8.15     No Default.......................................................................61

SECTION 9.   GUARANTOR REPRESENTATIONS AND WARRANTIES.........................................61
    9.1      Organization; Power; Compliance with Law and Contractual Obligations.............61
    9.2      Non-Contravention................................................................61
    9.3      Governmental Approval; Regulation................................................62
    9.4      Validity.........................................................................62
    9.5      Litigation.......................................................................62
    9.6      Taxes............................................................................62
    9.7      Pension and Welfare Plans........................................................63
    9.8      Accuracy of Information..........................................................63
    9.9      Financial Information............................................................63
    9.10     Chief Executive Office...........................................................64
    9.11     No Material Adverse Change.......................................................64
    9.12     No Default.......................................................................64

SECTION 10.  NOTEHOLDERS' AND INVESTORS' REPRESENTATIONS AND WARRANTIES.......................64
    10.1     Organization; Power; Compliance with Law and Contractual Obligations.............64
    10.2     Non-Contravention................................................................64
    10.3     Governmental Approval; Regulation................................................65
    10.4     Validity.........................................................................65
    10.5     Litigation.......................................................................65
    10.6     ERISA............................................................................65
    10.7     Investment in Certificates or Notes..............................................66

                                      iii
<PAGE>

SECTION 11.  LESSOR REPRESENTATIONS AND WARRANTIES............................................66
    11.1     Due Organization, etc............................................................66
    11.2     Authorization; No Conflict.......................................................67
    11.3     Enforceability, etc..............................................................67
    11.4     Litigation.......................................................................67
    11.5     Assignment.......................................................................67
    11.6     No Default.......................................................................67
    11.7     Chief Place of Business..........................................................68
    11.8     Securities Act...................................................................68
    11.9     Lessor Liens.....................................................................68
    11.10    Investment Company Act; Public Utility Holding Company Act.......................68
    11.11    Governmental Actions.............................................................68

SECTION 12.  REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE AND THE TRUST COMPANY..............69
    12.1     Due Incorporation; etc...........................................................69
    12.2     Due Authorization, Enforceability; etc...........................................69
    12.3     Non-Contravention................................................................70
    12.4     Governmental Actions.............................................................70
    12.5     Litigation.......................................................................71
    12.6     Liens............................................................................71

SECTION 13.  GUARANTOR AFFIRMATIVE COVENANTS..................................................71
    13.1     Financial Information, Reports, Notices..........................................71
    13.2     Conduct of Business and Maintenance of Existence.................................73
    13.3     Compliance with Laws.............................................................73
    13.4     Books and Records; Right of Inspection...........................................73

SECTION 14.  GUARANTOR NEGATIVE COVENANTS.....................................................74
    14.1     Restrictions on Secured Indebtedness.............................................74
    14.2     Restrictions on Liens............................................................74
    14.3     Investments......................................................................76
    14.4     Consolidation, Merger............................................................76

                                      iv
<PAGE>
    14.5     Asset Dispositions...............................................................77
    14.6     Transactions with Affiliates.....................................................78
    14.7     Restrictive Agreements...........................................................78
    14.8     ERISA............................................................................78
    14.9     Financial Condition..............................................................78

SECTION 15.  LESSEE AFFIRMATIVE COVENANTS.....................................................79
    15.1     Financial Information, Reports, Notices..........................................79
    15.2     Conduct of Business and Maintenance of Existence.................................80
    15.3     Compliance with Laws.............................................................80
    15.4     Insurance........................................................................80
    15.5     Books and Records; Right of Inspection...........................................80
    15.6     Maintenance of Properties........................................................81
    15.7     Maintenance of Leased Equipment..................................................81
    15.8     Environmental Covenant...........................................................81

SECTION 16.  LESSEE NEGATIVE COVENANT.........................................................82
    16.1     Restrictions on Liens............................................................82
    16.2     Restriction on Extension of ComEd Agreements.....................................82

SECTION 17.  LESSOR, TRUSTEE, TRUST COMPANY, INVESTOR AND NOTEHOLDER COVENANTS................82
    17.1     Compliance with Trust Agreement..................................................82
    17.2     Discharge of Liens...............................................................82
    17.3     Trust Agreement..................................................................83
    17.4     Successor Trustee................................................................83
    17.5     Indebtedness; Other Business.....................................................83
    17.6     Depreciation.....................................................................83
    17.7     Quiet Enjoyment..................................................................84
    17.8     No Liens.........................................................................84
    17.9     Credit Agreement.................................................................84

SECTION 18.  AGENT COVENANT...................................................................84

                                      v
<PAGE>

SECTION 19.  AGENT............................................................................85
    19.1     Actions..........................................................................85
    19.2     Funding Reliance.................................................................86
    19.3     Exculpation......................................................................86
    19.4     Successor........................................................................87
    19.5     Reliance by Agent................................................................87
    19.6     Notice of Default................................................................88
    19.7     Credit Decisions.................................................................88
    19.8     Copies...........................................................................89

SECTION 20.  TRANSACTION COSTS AND OTHER COSTS................................................89

SECTION 21.  MISCELLANEOUS....................................................................90
    21.1     Effect of Waiver.................................................................90
    21.2     Survival of Agreements...........................................................90
    21.3     Applicable Law...................................................................90
    21.4     Effect and Modification of Agreement.............................................91
    21.5     Notices..........................................................................92
    21.6     Severability.....................................................................92
    21.7     Successors and Assigns; Transfers................................................93
    21.8     Participations...................................................................95
    21.9     Parties in Interest..............................................................96
    21.10    Agent............................................................................96
    21.11    Brokers..........................................................................96
    21.12    Limitation of Liability..........................................................96
    21.13    Reproduction of Documents........................................................97
    21.14    Consideration for Consents to Waivers and Amendments.............................97
    21.15    Submission to Jurisdiction; Venue................................................98
    21.16    Agent for Service of Process.....................................................98
    21.17    Jury Trial.......................................................................99
    21.18    Captions; Table of Contents......................................................99
    21.19    Schedules; Exhibits; Appendix....................................................99
    21.20    References to Sections, Exhibits and Schedules...................................99

                                      vi
<PAGE>

SCHEDULE I...................................................................................Sch. I-1

SCHEDULE II...............................................................................Sch. II - 1

EXHIBIT A-1....................................................................................A1 - 1

EXHIBIT A-2....................................................................................A2 - 1

EXHIBIT B-1....................................................................................B1 - 1

EXHIBIT B-2....................................................................................B2 - 1

EXHIBIT C-1....................................................................................C1 - 1

EXHIBIT C-2....................................................................................C2 - 1

EXHIBIT C-3....................................................................................C2 - 2

EXHIBIT C-4....................................................................................C2 - 3

EXHIBIT C-5....................................................................................C2 - 4

EXHIBIT D.......................................................................................D - 1

EXHIBIT E.......................................................................................E - 1

EXHIBIT F.......................................................................................F - 1
</TABLE>

                                      vii
<PAGE>

         PARTICIPATION AGREEMENT (this "AGREEMENT") dated as of June 23, 2000
among MIDWEST GENERATION, LLC, a Delaware limited liability company, as lessee
("LESSEE"), EDISON MISSION ENERGY, a California corporation, as guarantor
("GUARANTOR"), EME/CDL TRUST, a trust created under the laws of the State of
Delaware, as lessor ("LESSOR"), THE INVESTOR PARTY TO THE TRUST AGREEMENT, as
Initial Investor, WILMINGTON TRUST COMPANY, as Trustee under the Trust
Agreement, THE PERSONS LISTED AS NOTEHOLDERS ON SCHEDULE I HERETO, as
Noteholders, CITICORP NORTH AMERICA, INC. as Administrative Agent for the
Noteholders and Investors (the "AGENT") and CITICORP NORTH AMERICA, INC. as
Collateral Agent (the "COLLATERAL AGENT").

                                    RECITALS

         WHEREAS, Lessee wishes to sell to Lessor, and Lessor wishes to acquire,
the Leased Equipment pursuant to the Bill of Sale; and

         WHEREAS, Lessor will lease the Leased Equipment to Lessee on the
terms and conditions set forth in the Lease; and

         WHEREAS, the Investors and Noteholders are willing to provide financing
to Lessor to fund payment of the Purchase Price; and

         WHEREAS, concurrently with the execution and delivery of this
Agreement, CDL has entered into the Trust Agreement, pursuant to which CDL has
authorized Lessor to, among other things and subject to the terms and conditions
thereof and hereof, (i) issue the Tranche A Notes and sell such Tranche A Notes
to Tranche A Noteholders, (ii) issue the Tranche B Notes and sell such Tranche B
Notes to Tranche B Noteholders, (iii) issue the Certificates and sell such
Certificates to the Investors, (iv) purchase the Leased Equipment from Midwest,
(v) lease the Leased Equipment to Lessee and (vi) enter into security
arrangements as described herein; and

         WHEREAS, to induce the Investor and the Noteholders to provide funding
for the Leased Equipment, Guarantor has agreed to guaranty the obligations of
Lessee under the Lease (other than Supplemental Rent payable by Lessee pursuant
to SECTION 6.7).

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

SECTION 1.  DEFINITIONS.

         Capitalized terms used but not defined herein shall have the meanings
set forth in Appendix 1 hereto; the rules of interpretation set forth in
Appendix 1 hereto shall apply to this Agreement.

SECTION 2.  SUMMARY OF THE TRANSACTIONS.

         2.1 BASIC DOCUMENTS. On the Closing Date, each of the respective
parties hereto shall execute and deliver this Agreement, the Lease, the
Memorandum of Lease, the Guaranty, the Credit Agreement, the Notes, the
Certificates, the Bill of Sale, the Deeds, the ComEd Consent, the Intercompany
Note, the Assignment Agreement and the Trust Agreement and such other documents,
instruments, certificates and opinions of counsel as agreed to by the parties
hereto.

         2.2 LEASED EQUIPMENT PURCHASE AND LEASE. On the Closing Date, (i) the
Initial Investor will make the Investor Contribution in accordance with SECTION
3.3 hereof, (ii) the Noteholders will make the Loans in accordance with SECTION
3.1 hereof, (iii) Lessor will purchase all right, title and interest in and to
the Leased Equipment from Lessee and (iv) Lessor will simultaneously lease all
of its right, title and interest in the Leased Equip ment to Lessee.

         2.3 NATURE OF TRANSACTION. It is the intent of the parties hereto that:
(a) the transaction contemplated hereby constitutes an operating lease pursuant
to GAAP from Lessor to Lessee for purposes of Lessee's financial reporting only,
(b) the transaction contemplated hereby preserves ownership of the Leased
Equipment by Lessee for Federal and state income tax, bankruptcy and UCC
purposes and (c) other than for Lessee's financial reporting, the obligations of
Lessee to pay Basic Rent shall be treated as pay ments of principal and
interest, respectively. Except as specifically provided for herein, Lessor shall
retain title to the Leased Equipment, free and clear of all Liens other than
Permitted Liens, as security for the obligations of Lessee under the Basic
Documents. Except as otherwise required by any taxing Authority (in which case
the last sentence of SECTION 17.6 shall apply), each of the

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parties to this Agreement agrees that it will not, nor will any of its
Affiliates, at any time take any action or fail to take any action with
respect to the filing of any income tax return, including an amended income
tax return, inconsistent with the intention of the parties expressed in this
SECTION 2.3.

         2.4 LEGAL AND TAX REPRESENTATION. Lessee acknowledges and agrees that
none of Lessor, any Investor, any Noteholder, Trustee, Collateral Agent or Agent
has made any representation or warranty concerning the tax, accounting or legal
characteristics of the Lease or any of the other Basic Documents, and that
Lessee has obtained and relied on such tax, accounting and legal advice
regarding the Lease, the Guaranty and the other Basic Documents as it deems
appropriate. Each of Lessor, each Investor, each Noteholder, Collateral Agent
and Agent acknowledges and agrees that it has obtained and relied on the Basic
Documents and the various items delivered in connection therewith, and on such
tax, accounting and legal advice regarding the Lease, the Guaranty and the other
Basic Documents as it deems appropriate.

SECTION 3.  THE LOANS AND INVESTOR CONTRIBUTIONS.

         3.1 LOANS. Subject to the terms and conditions of this Agreement and
the Credit Agreement, and in reliance on the representations and warranties of
each of the parties hereto contained herein or made pursuant hereto, on the
Closing Date, each Noteholder shall make a loan to Lessor (each, a "LOAN") in an
amount as set forth in the Credit Agreement, in order for Lessor (i) to acquire
the Leased Equipment and (ii) to pay Transaction Costs. Loans shall be made
pursuant to the Credit Agreement and shall accrue interest as set forth in
SECTION 3.13 hereof.

         3.2 SECURITY; CONSENT TO ASSIGNMENT. (a) As collateral security for
the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the Lessor's Obligations to the Noteholders
under the Basic Documents, now existing or hereafter arising, the Lessor has,
pursuant to the terms of the Assignment Agreement, pledged, assigned,
hypothecated and transferred to the Collateral Agent for the benefit of the
Noteholders, and has granted to the Collateral Agent for the benefit of the
Noteholders, a Lien on all of the Lessor's right, title and interest in, to
and under the Lessor Collateral.

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                  (b) The Guarantor (i) acknowledges that the Noteholders and
Investors are making the Advances in reliance upon the execution and delivery by
the Guarantor of the Guaranty and this Agreement, (ii) consents in all respects
to the pledge and assignment to the Collateral Agent pursuant to the Assignment
Agreement of all of the Lessor's right, title and interest in, to and under the
Guaranty including, without limitation, all of the Lessor's rights to receive
payment under or with respect to the Guaranty and all payments due and to become
due to the Lessor under or with respect to the Guaranty, whether as contractual
obligations, damages, indemnity payments or otherwise and (iii) acknowledges the
right of the Collateral Agent or any designee of the Collateral Agent, in the
exercise of the Collateral Agent's rights and remedies under the Assignment
Agreement, to make all demands, give all notices, take all actions and exercise
all rights of the Lessor under the Guaranty.

                  (c) The Lessee (i) acknowledges that the Noteholders and
Investors are making the Advances in reliance upon the execution and delivery by
the Lessee of the Lease and this Agreement, (ii) consents in all respects to the
pledge and assignment to the Collateral Agent pursuant to the Assignment
Agreement of all of the Lessor's right, title and interest in, to and under the
Lease including, without limitation, all of the Lessor's rights to receive
payment under or with respect to the Lease and all payments due and to become
due to the Lessor under or with respect to the Lease, whether as contractual
obligations, damages, indemnity payments or otherwise and (iii) acknowledges the
right of the Collateral Agent or any designee of the Collateral Agent, in the
exercise of the Collateral Agent's rights and remedies under the Assignment
Agreement, to make all demands, give all notices, take all actions and exercise
all rights of the Lessor under the Lease.

         3.3 THE INVESTOR CONTRIBUTIONS. Subject to the terms and conditions of
this Agreement and the Trust Agreement, and in reliance on the representations
and warranties contained herein or made pursuant hereto, the Initial Investor
shall make an investment in Lessor (the "INVESTOR CONTRIBUTION") in an amount
set forth in the Trust Agreement. Lessor will use the Investor Contribution (i)
to acquire the Leased Equipment and (ii) pay Transaction Costs. Investor
Contributions shall accrue yield ("YIELD") as set forth in SECTION 3.13 hereof.

         3.4 OBLIGATIONS SEVERAL. The obligations of each Investor and
Noteholder under any Basic Document shall be several and not joint. No Investor
or Noteholder

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shall have any obligation to any other Investor or Noteholder or to Lessee or
Lessor with respect to the transactions contemplated by the Basic Documents,
except those obligations of such Investor or Noteholder expressly set forth
in the Basic Documents or except as set forth in the instruments delivered in
connection therewith, and no Investor or Noteholder shall be liable for
performance by any other Person of such other Person's obligations under the
Basic Documents except as otherwise so set forth.

         3.5 PROCEDURE FOR ADVANCES. By delivering an irrevocable Advance
Request in the form of EXHIBIT D hereto (the "ADVANCE REQUEST") to the Agent on
or before 12:00 Noon, New York City time, not less than three Business Days'
prior to the Scheduled Closing Date, the Lessor, at the direction of the Lessee,
may irrevocably request the Noteholders to make the Loans and the Initial
Investor to make the Investor Contribution. Upon receipt of the Advance Request,
the Agent shall promptly notify each Noteholder and Investor thereof. On the
terms and subject to the conditions of this Agreement, the Credit Agreement and
the Trust Agreement (as appropriate), each of the Advances shall be of the same
type, and shall be made on the Closing Date. On or before 2:00 p.m., New York
City time, on the Closing Date, (i) the Tranche B Noteholder shall deposit with
the Agent immediately available funds in an amount equal to such Noteholder's
Loan, (ii) the Tranche A Noteholder shall deliver to the Agent a check (the
"TRANCHE A CHECK") payable to the order of the Lessor in an amount equal to such
Noteholder's Loan and (iii) the Initial Investor shall deposit with the Agent
immediately available funds in an amount equal to its Investor Contribution. Any
such deposit of funds will be made to an account which the Agent shall specify
by notice to the Tranche B Noteholder and the Initial Investor. To the extent
funds and the Tranche A Check are received from the Noteholders and Investors,
the Agent shall make such funds available to the Lessor by wire transfer to the
accounts the Lessor shall have specified in the Advance Request and such Tranche
A Check available to the Lessor by delivery to the Lessor. No Noteholder's or
Investor's obligation to make its Advance shall be affected by any other
Noteholder's or Investor's failure to make any Advance.

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         3.6      CONTINUATION AND CONVERSION ELECTIONS.  By delivering a
Continuation/Conversion Notice in the form of EXHIBIT F hereto (the
"CONTINUATION/CONVERSION NOTICE") to the Agent on or before 12:00 Noon, New
York City time on a Business Day, the Lessor, at the direction of the Lessee,
may from time to time irrevocably elect that all, or any portion in an
aggregate minimum amount of $10,000,000 and an integral multiple of
$1,000,000 in excess thereof, of any Advance be (i) on not less than three
Business Days' notice, converted into, or continued as, a LIBO Rate Advance,
or (ii) on the same Business Day, be converted into, or continued as a Base
Rate Advance. In the absence of delivery of such Continuation/Conversion
Notice with respect to any LIBO Rate Advance, such LIBO Rate Advance shall
automatically be continued as a LIBO Rate Advance with an Interest Period of
the same duration as the then expiring Interest Period; PROVIDED, HOWEVER,
that (x) with respect to any Loan, each such conversion or continuation shall
be pro rated among the applicable outstanding Loans of all Noteholders
holding Loans of the same tranche, (y) a LIBO Rate Advance may not be
converted at any time other than the last day of the Interest Period
applicable thereto and (z) no portion of the outstanding principal amount of
any Advance may be continued as, or be converted into, a LIBO Rate Advance
when any Credit Agreement Event of Default or Credit Agreement Default under
SECTION 5.1.1 of the Credit Agreement has occurred and is continuing. Each
delivery of such Continuation/Conversion Notice shall constitute a
certification and warranty by the Lessor that on the date of delivery of such
notice no Credit Agreement Default has occurred and is continuing. If prior
to the time of such continuation or conversion any matter certified to by the
Lessor by reason of the immediately preceding sentence will not be true and
correct at such time if then made, the Lessor will immediately so notify the
Agent. Except to the extent, if any, that prior to the time of such
continuation or conversion the Agent shall have received written notice to
the contrary from the Lessor, such certification and warranty shall be deemed
to be made at the date of such continuation or conversion as if then made.
Upon the occurrence and during the continuance of any Credit Agreement Event
of Default under SECTION 5.1.1 of the Credit Agreement, each LIBO Rate
Advance shall convert automatically to a Base Rate Advance at the end of the
Interest Period then in effect for such LIBO Rate Advance.

         3.7 FUNDING. Each Noteholder and each Investor may, if it so elects,
fulfill its obligation to make, continue or convert LIBO Rate Advances hereunder
by causing one of its foreign branches or Affiliates (or an international
banking facility created by such Noteholder or Investor) to make or maintain
such LIBO Rate

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<PAGE>

Advance; PROVIDED, HOWEVER, that such LIBO Rate Advance shall nonetheless be
deemed to have been made and to be held by such Noteholder or Investor, as
the case may be, and the obligation of the Lessor to repay such LIBO Rate
Advance shall nevertheless be to such Noteholder or Investor, as the case may
be, for the account of such foreign branch, Affiliate or international
banking facility. In addition, the Lessor hereby consents and agrees that,
for purposes of any determination to be made for purposes of SECTIONS 4.1,
4.2, 4.3, 4.4, 4.5, 4.6 or 4.7, it shall be conclusively assumed that each
Noteholder and Investor elected to fund all LIBO Rate Advances by purchasing
deposits in its LIBOR Office's interbank eurodollar markets.

         3.8      FUNDING; APPLICATION OF PROCEEDS.

                  (a) FUNDING. Following (i) receipt by Lessor of (A) the
Investor Contribution by the Investor pursuant to SECTION 3.3 and (B) all Loans
by the Noteholders pursuant to SECTION 3.1 and (ii) satisfaction or waiver of
each of the applicable conditions set forth in, and in accordance with, SECTION
5.1, Lessor shall transfer to the Lessee Account, as payment for the Leased
Equipment, by 4:00 p.m. New York City time on the Closing Date, the aggregate
amount of such Advances.

                  (b) APPLICATION OF PROCEEDS. All Advances shall be used solely
for payment of the Purchase Price for the Leased Equipment and payment of
Transaction Costs.

         3.9      TIME AND PLACE OF CLOSING. The closing of the transactions
contemplated hereby (the "CLOSING") shall take place after 12:00 Noon, New York
City time on the Scheduled Closing Date or such other date as the parties hereto
shall mutually agree (the "CLOSING DATE") at the New York offices of Skadden,
Arps, Slate, Meagher & Flom, LLP.

         3.10     THE LESSOR ACCOUNT; PRIORITY OF PAYMENTS. (a) In accordance
with SECTION 10 of the Assignment Agreement, the Lessor shall establish and
maintain, or shall cause to be established and maintained, the Lessor Account
into which the Collateral Agent shall deposit all payments, receipts and
other consideration of any kind whatsoever paid to the Lessor under any Basic
Document or otherwise and received by the Collateral Agent pursuant to the
Lease, the Assignment Agreement or the Trust Agreement. The Agent shall
report the amounts of any distributions from the Lessor Account pursuant to
this SECTION 3.10 to the Trustee.

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                  (b) Payments deposited from time to time in the Lessor Account
shall be paid out by the Collateral Agent as follows:

                           (i) Any payment identified by Lessee as either (i)
         Basic Rent, (ii) payment in respect of Termination Value pursuant to
         SECTION 11.1, SECTION 12.1 or SECTION 15.1 of the Lease, (iii) proceeds
         of an Auction pursuant to SECTION 12.4 of the Lease (but in any event
         excluding costs and expenses described in SECTION 12.5(b) of the Lease)
         ("NET SALE PROCEEDS") or (iv) payment in respect of the Lessee Purchase
         Fixed Price pursuant to SECTION 12.3 of the Lease or the Investor
         Purchase Price pursuant to SECTION 12.5(d) of the Lease shall be paid
         out of the Lessor Account by the Collateral Agent, at the direction of
         the Agent, promptly after receipt, and shall be applied, FIRST, ratably
         to the payment of the principal of the Tranche B Loan then outstanding
         and all interest then due and payable on such amount, SECOND, ratably
         to the payment of the principal of the Tranche A Loan then outstanding
         and all interest due and payable on such amount (after application of
         any Residual Deficiency Payment made by the Lessee) and THIRD, the
         remainder of such amount shall be paid out of the Lessor Account, at
         the direction of the Agent, by the Collateral Agent, ratably, to the
         Investors.

                           (ii) Any payment identified by Lessee as the Residual
         Deficiency Payment shall be paid out of the Lessor Account by the
         Collateral Agent, at the direction of the Agent, promptly after receipt
         and shall be applied, ratably, to the payment of the principal of the
         Tranche A Loan then outstanding and all interest then due and payable
         on such amount.

                           (iii) Any payment identified by Lessee as
         Supplemental Rent (other than any such amounts payable pursuant to the
         preceding provisions of this SECTION 3.10(b)) shall be paid out of the
         Lessor Account by the Collateral Agent, at the direction of the Agent,
         promptly after receipt, and shall be applied to the payment of any
         amounts then owing to the Collateral Agent, the Agent, the Investors,
         the Trustee, the Noteholders and the other parties to the Basic
         Documents (or any of them) as shall be designated by Lessee (or, in
         the absence of such designation, ratably according to the respective
         amounts so owing of which Agent has received written notice).

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<PAGE>

In the event that Lessee shall fail to identify the nature of any payment
deposited by it in the Lessor Account, or the Collateral Agent or the Agent in
its reasonable judgment shall determine that the identification made by Lessee
is incorrect or inappropriate, the nature of such payment shall instead be
identified by the Agent in its reasonable judgment and applied in the manner
specified above.

                  (c) Any amounts payable to the the Collateral Agent as a
result of an Event of Loss pursuant to SECTION 11.1(c) of the Lease and the
Assignment Agreement shall be distributed as follows:

                           (i) in the event that the Lessor (at the direction of
                  the Required Participants) and the Agent elect to pay all or
                  a portion of such amounts to the Lessee for the repair of
                  damage caused by such Event of Loss, then such amounts shall
                  be distributed to the Lessee, and

                           (ii) in the event that the Lessor (at the direction
                  of the Required Participants) and the Agent elect to apply
                  all or a portion of such amounts to the purchase price of the
                  Leased Equipment in accordance with SECTION 12.3 of the Lease,
                  then such amounts shall be distributed in accordance with
                  clause (b) above.

                  (d) All payments received and amounts realized by the Lessor
or the Collateral Agent after the occurrence of a Lease Event of Default shall
be promptly remitted by the Lessor (if received by the Lessor) to the Collateral
Agent and shall be paid out of the Lessor Account by the Collateral Agent, at
the direction of the Agent, promptly after receipt, and shall be applied,

                  FIRST, ratably to the payment of the principal of the Tranche
         B Loans then outstanding and all interest then due and payable on such
         amount;

                  SECOND, ratably to the payment of the principal of all Tranche
         A Loans then outstanding and all interest then due and payable on such
         amount;

                  THIRD, ratably to the payment of the principal of the
         Certificates then outstanding and all Yield then due and payable on
         such amount; and

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                  FOURTH, the remainder of such amount after making the payments
         in FIRST through THIRD above shall be paid to, or at the direction of,
         the Lessee.

                  (e) Upon the payment in full of the Loans and all other
amounts owing by Lessor (including amounts owing to the Investors, Noteholders,
Agent, the Collateral Agent and Trustee) under the Credit Agreement, Trust
Agreement or under any other Basic Document, any moneys remaining in the Lessor
Account shall be paid to Lessee or such other Person or Persons as Lessee may
designate.

         3.11     PAYMENTS TO INVESTORS AND NOTEHOLDERS.

                  (a) Any payments received by Trustee or the Collateral Agent
from or on behalf of Lessee not later than 1:00 p.m., New York City time, shall
be paid by Trustee or the Collateral Agent, as the case may be, at the direction
of the Agent, to the Investors or Noteholders, as the case may be, in
immediately available funds no later than 3:00 p.m., New York City time, on the
same day, and any payments received by Trustee or the Collateral Agent from or
on behalf of Lessee after 1:00 p.m., New York City time, shall be paid by
Trustee or the Collateral Agent, as the case may be, at the direction of the
Agent, to the Investors or Noteholders as the case may be, as soon after receipt
as practicable, but not later than 11:00 a.m., New York City time, on the next
succeeding Business Day. Properly initiating wire transfers prior to the times
set forth above shall constitute compliance by the Trustee or the Collateral
Agent with this SECTION 3.11.

                  (b) Rent and all other sums due from Lessee to Lessor or any
Noteholder or Investor under the Basic Documents shall be paid by Lessee in
immediately available funds to Lessor by deposit to the Lessor Account, or if
instructed in writing by the Lessor, at its office specified in SCHEDULE I to
this Agreement or at such other office as it may from time to time specify to
Lessee in a notice pursuant to SECTION 21.5. All such payments must be received
by Lessor or such Investor or Noteholder, as applicable, not later than 3:00
p.m. New York City time on the date due. Funds received after such time shall
for all purposes of the Basic Documents be deemed to have been received on the
next succeeding Business Day.

                  (c) Unless otherwise expressly provided in SECTION 3.10 or
otherwise herein or in the Credit Agreement or the Trust Agreement, all payments
by

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Lessor pursuant to any Basic Document shall be made by Lessor to the
Collateral Agent for the PRO RATA account of the Noteholders and Investors
entitled to receive such payment. The Collateral Agent shall promptly remit
in immediately available funds to each Noteholder or Investor, as the case
may be, its share, if any, of such payments received by the Collateral Agent
for the account of such Noteholder or Investor pursuant to SECTION 3.10 or
otherwise.

         3.12     USE OF PROCEEDS. Lessor covenants that it shall apply the
proceeds of the Advances solely in accordance with the provisions of the Basic
Documents.

         3.13     INTEREST AND YIELD.

                  (a) Each Tranche A Loan shall accrue interest at a rate per
annum equal to the then applicable Interest Rate for Tranche A Loans, and each
Tranche B Loan shall accrue interest at a rate per annum equal to the then
applicable Interest Rate for Tranche B Loans.

                  (b) The Investor Amounts outstanding from time to time shall
accrue Yield at a rate per annum equal to the Yield Rate.

                  (c) Notwithstanding any other provision hereof, at such time
as there shall exist for any Noteholder or Investor a LIBOR Reserve Percentage
which is greater than zero, the LIBO Rate used in the determination of LIBO Rate
Advances made by such Noteholder or Investor shall be the LIBO Rate (Reserve
Adjusted).

                  (d) After the date any principal amount of any Advance is due
and payable (whether on the Final Maturity Date, upon acceleration or
otherwise), or after any monetary Obligation of the Lessor under the Basic
Documents shall become due and payable, the Lessor shall pay, but only to the
extent permitted by law, interest (after as well as before judgment) on such
overdue amount at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin plus 2% until such amount is paid in full.

                  (e) All interest or Yield on the Advances and all other
amounts due with respect to the Advances shall be distributed by the Collateral
Agent, at the

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direction of the Agent, to the Noteholders or Investors, as the case may be,
in accordance with SECTION 3.10.

                  (f) Interest and Yield accrued on each Advance shall be
payable, without duplication (each such date, an "INTEREST PAYMENT DATE"):

                           (i)      on the Final Maturity Date;

                           (ii)     on the date of any payment or prepayment,
         in whole or in part, of principal outstanding on such Advance;

                           (iii)    on each Scheduled Interest Payment Date;
         and

                           (iv) on that portion of any Advance which is
         accelerated pursuant to SECTION 6.2 or SECTION 6.3 of the Credit
         Agreement or otherwise, immediately upon such acceleration.

Interest and Yield accrued on Advances or other monetary Obligations arising
under any Basic Document after the date such amount is due and payable (whether
on the Final Maturity Date, upon acceleration or otherwise) shall be payable
upon demand (or if no demand is made, on the last Business Day of each Month).

         3.14     INTEREST RATE AND YIELD RATE DETERMINATION. The Agent shall
determine the Interest Rate applicable to the Loans and the Yield Rate
applicable to the Investor Amounts, and shall give prompt notice to the Lessor
and the Noteholders or the Investors, as appropriate, of such determination.
Such determinations by the Agent shall be conclusive in the absence of manifest
error.

         3.15     FEES. The Guarantor agrees to pay to the Agent for (a) its own
account in its capacity as Agent and Collateral Agent and (b) the account of CDL
as the Tranche B Noteholder and the Initial Investor the respective fees agreed
to in the letter dated July 10, 2000 (the "FEE LETTER") between the Agent, CDL,
the Guarantor and the Lessee.

         3.16     PREPAYMENTS.

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<PAGE>

                  (a) The Lessee shall have the right to pay to the Lessor such
amounts to allow for the Lessor to prepay, without premium or penalty (except
as may be required by SECTION 4.5), an amount equal to the Loans and the
Investor Amounts in whole or in part from time to time pursuant to the exercise
of any purchase or early termination option permitted under the Lease. Any such
prepayment of LIBO Rate Advances shall require at least ten (10) days prior
written notice to the Agent, and any such prepayment of Base Rate Loans may be
made on same day's written notice to the Agent.

                  (b) All amounts payable by the Lessee to the Lessor pursuant
to SECTIONS 11, 12, or 15 of the Lease shall be used to prepay the Advances and
shall be applied by the Lessor to the Loans and the Investor Amounts in the
manner set forth in SECTION 3.10.

                  (c) Each prepayment of Advances made pursuant to this SECTION
3.16 shall be accompanied by accrued interest or Yield, as the case may be, to
the date of such prepayment on the amount prepaid, but shall be without premium
or penalty, except as may be required by SECTION 4.5.

SECTION 4.  CERTAIN LIBO RATE AND OTHER PROVISIONS

         4.1 LIBO RATE LENDING UNLAWFUL. If any Noteholder or Investor shall
reasonably determine (which determination shall, upon notice thereof to Lessor
and Agent, be conclusive and binding on Lessor absent manifest error) that the
introduction of or any change in or in the interpretation of any law, rule or
regulation makes it unlawful, or any central bank or other governmental
authority or comparable agency asserts that it is unlawful, for such Noteholder
or Investor, as the case may be, to make, continue or maintain any Advance as,
or to convert any Advance into, a LIBO Rate Advance, the obligations of such
Noteholder or Investor to make, continue, maintain or convert any such Advance
shall, upon such determination, forthwith be suspended until such Noteholder or
Investor, as the case may be, shall notify Agent that the circumstances causing
such suspension no longer exist, and all LIBO Rate Advances of such Noteholder
or Investor shall automatically convert into Base Rate Advances at the end of
the then-current Interest Periods with respect thereto or sooner, if required by
such law or assertion.

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<PAGE>

         4.2 INABILITY TO DETERMINE RATES. If Agent shall have determined that,
by reason of circumstances affecting Agent's relevant market, adequate means do
not exist for ascertaining the interest rate applicable hereunder to LIBO Rate
Advances, then, upon notice from Agent to Lessor, the Investors and the
Noteholders, the obligations of all Noteholders and Investors under SECTION 3.5
hereof, to make or continue any Advances as, or to convert any Advances into,
LIBO Rate Advances shall forth with be suspended until Agent shall notify
Lessor, the Investors and the Noteholders that the circumstances causing such
suspension no longer exist.

         4.3 INCREASED LIBO RATE ADVANCE COSTS. If after the date hereof, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Noteholder or Investor (or its
LIBOR Office) with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency shall increase the
cost to such Noteholder or Investor of, or result in any reduction in the amount
of any sum receivable by such Noteholder or Investor in respect of, making,
continuing or maintaining (or of its obligation to make, continue or maintain)
any Advances as, or of converting (or of its obligation to convert) any Advances
into, LIBO Rate Advances, then Lessor agrees to pay to each such Noteholder or
Investor, as the case may be, the amount of any such increase or reduction. Such
Noteholder or Investor shall promptly notify Agent and Lessor in writing of the
occurrence of any such event, such notice to state, in reasonable detail, the
reasons therefor and the additional amount required fully to compensate such
Noteholder or Investor for such increased cost or reduced amount. Such
additional amounts shall be payable by Lessor directly to such Noteholder or
Investor, as the case may be, within ten (10) Business Days of its receipt of
such notice, and such notice shall be binding on Lessor absent clear and
convincing evidence to the contrary.

         4.4 OBLIGATION TO MITIGATE. Each Noteholder and Investor agrees that as
promptly as practicable after it becomes aware of the occurrence of an event
that would entitle it to give notice pursuant to SECTION 4.1, 4.3, or 4.6, and
in any event if so requested by Lessor, each such Noteholder and Investor shall
use reasonable efforts to make, fund or maintain its affected Advances through
another lending office or one of its foreign branches or Affiliates (or an
international banking facility created by such Noteholder or Investor) if as a
result thereof the increased costs

                                      14

<PAGE>

would be avoided or materially reduced or the illegality would thereby cease
to exist and if, in the reasonable opinion of such Noteholder or Investor, as
the case may be, the making, funding or maintaining of such Advances through
such other lending office, foreign branch or Affiliate (or international
banking facility created by such Noteholder or Investor) would not in any
material respect be disadvantageous to such Noteholder or Investor, contrary
to such Noteholder's or Investor's normal banking practices or violate any
applicable law or regulation. No change by a Noteholder or Investor in its
Domestic Office or LIBOR Office made for such Noteholder's or Investor's
convenience shall result in any increased cost to Lessor. Lessor shall not be
obligated to compensate any Noteholder or Investor for the amount of any
additional amount pursuant to SECTIONS 4.1, 4.3, or 4.6 accruing prior to the
date which is 90 days before the date on which such Noteholder or Investor
first notifies Lessor that it intends to claim such compensation; it being
understood that the calculation of the actual amounts may not be possible
within such period and that such Noteholder or Investor may provide such
calculation as soon as reasonably practicable thereafter without affecting or
limiting Lessor's payment obligation thereunder. If any Noteholder or
Investor demands compensation pursuant to SECTIONS 4.1, 4.3, or 4.6 with
respect to any LIBO Rate Advance, Lessor may, at any time upon at least one
(1) Business Days' prior notice to such Noteholder or Investor through Agent,
elect to convert such Advance into a Base Rate Advance. Thereafter, unless
and until such Noteholder or Investor, as the case may be, notifies Lessor
that the circumstances giving rise to such notice no longer apply, all such
LIBO Rate Advances by such Noteholder or Investor shall bear interest as
Base Rate Advances, notwithstanding any prior election by Lessor to the
contrary. If such Noteholder or Investor notifies Lessor that the
circumstances giving rise to such notice no longer apply, Lessor may elect
that the principal amount of each such Advance again bear interest as LIBO
Rate Advances in accordance with this Agreement, on the first day of the next
succeeding Interest Period applicable to the related LIBO Rate Advances of
other Noteholders or Investors, as the case may be. Additionally, Lessor may,
at its option, upon at least five (5) Business Days' prior notice to such
Noteholder or Investor, elect to prepay in full, without premium or penalty,
such Noteholder's or Investor's affected LIBO Rate Advances. If Lessor elects
to prepay any Advances pursuant to this SECTION 4.4, Lessor shall pay within
ten (10) Business Days after written demand any additional increased costs of
such Noteholder or Investor accruing for the period prior to such date of
prepayment. If such conversion or prepayment is made on a day other than the
last day of the current Interest Period for

                                      15

<PAGE>

such affected LIBO Rate Advances, such Noteholder or Investor shall be
entitled to make a request for, and Lessor shall pay, compensation under
SECTION 4.5.

         4.5 FUNDING LOSSES. In the event any Noteholder or Investor shall incur
any loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Noteholder or Investor to make, continue or maintain any portion of the
principal amount of any Advance as, or to convert any portion of the principal
amount of any Advance into, a LIBO Rate Advance) as a result of:

                  (a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Advances on a date other than the scheduled last day of
the Interest Period applicable thereto, whether pursuant to SECTION 3.16 hereof,
or otherwise;

                  (b) Lessor's failure to borrow or prepay any LIBO Rate
Advances in accordance with the Advance Request or the notice of prepayment
therefor delivered under SECTION 3.16 hereof; or

                  (c) any Advances not being continued as, or converted into,
LIBO Rate Advances in accordance with the Continuation/Conversion Notice
therefor;

then, upon the written notice of such Noteholder or Investor to Lessor (with a
copy to Agent), Lessor shall, within ten (10) Business Days of its receipt
thereof, pay directly to such Noteholder or Investor such amount as will (in the
reasonable determination of such Noteholder or Investor) reimburse such
Noteholder or Investor for such loss or expense. Such written notice (which
shall include calculations in reasonable detail) shall be binding on Lessor
absent manifest error.

         4.6 INCREASED CAPITAL COSTS. If after the date hereof any change in, or
the introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any applicable law or regulation, directive, guideline, decision or
request (whether or not having the force of law) of any court, central bank,
regulator or other governmental authority affects the amount of capital
required to be maintained by any Noteholder or Investor, as the case may be,
and such Noteholder or Investor reasonably determines that the rate of return on
its capital as a consequence of the Advances made by such Noteholder or Investor
is reduced in a material amount to a

                                      16

<PAGE>

level below that which such Noteholder or Investor could have achieved but
for the occurrence of any such circumstance, then, in any such case upon
notice from time to time by such Noteholder or Investor to Lessor, Lessor
shall pay within ten (10) Business Days after such demand directly to such
Noteholder or Investor additional amounts sufficient to compensate such
Noteholder or Investor for such reduction in rate of return. A state ment of
such Noteholder or Investor as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall be binding on
Lessor absent manifest error.

         4.7 TAXES. (a) All payments by Lessor of principal of, and interest on,
the Advances and all other amounts payable hereunder shall be made free and
clear of and without deduction for any present or future income, excise, stamp
or franchise taxes and other taxes, fees, duties, withholdings or other charges
of any nature whatsoever imposed by any governmental or taxing authority, but
excluding franchise taxes or taxes imposed on or measured by any Noteholder's or
Investor's net income, as the case may be, in each case, imposed as a result of
a connection between such Noteholder or Investor and the jurisdiction imposing
the tax (other than a connection arising solely from such Noteholder or Investor
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement), and such Noteholders or Investors will use
reasonable efforts to minimize, to the extent possible, any such applicable
taxes (such non-excluded items being called "TAXES PAYABLE"). In the event that
any withholding or deduction from any payment to be made by Lessor hereunder is
required in respect of any Taxes Payable pursuant to any applicable law, rule or
regulation, then Lessor will: (i) pay directly to the relevant authority the
full amount required to be so withheld or deducted; (ii) within 30 days after
such payment forward to Agent an official receipt or other documentation
satisfactory to Agent evidencing such payment to such authority; and (iii) pay
to Agent for the account of the Noteholders or Investors, as the case may be,
such additional amount or amounts as is necessary to ensure that the net amount
actually received by each Noteholder or Investor, as the case may be, will equal
the full amount such Noteholder or Investor would have received had no such
withholding or deduction been required. Moreover, if any Taxes Payable are
directly asserted against Agent, any Noteholder or any Investor with respect to
any payment received by Agent or such Noteholder or Investor hereunder, Agent or
such Noteholder or Investor may pay such Taxes Payable and, upon receipt of
notice from Agent or such Noteholder or Investor within 30 days after such
payment, Lessor will promptly pay such additional amounts (including any
penalties, interest or expenses)

                                      17

<PAGE>

as are necessary so that the net amount received by such person after the
payment of such Taxes Payable (including any Taxes Payable on such
additional amount) shall equal the amount such person would have received had
no such Taxes Payable been asserted.

                  (b) If Lessor fails to pay any Taxes Payable when due to the
appropriate taxing authority or fails to remit to Agent, for the account of the
respective Noteholders or Investors, as the case may be, the required receipts
or other required documentary evidence, Lessor shall indemnify the Noteholders
or Investors, as the case may be, for any incremental Taxes Payable, interest or
penalties that may become payable by any Noteholder or Investor as a result of
any such failure. For purposes of this SECTION 4.7, a distribution hereunder by
Agent, any Investor or any Noteholder to, or for the account of, any Noteholder
or Investor shall be deemed a payment for the account of Lessor.

         (c) Each Noteholder and Investor that is not a United States person as
defined in Section 7701(a)(30) of the Code (a "NON-U.S. PARTICIPANT") shall
deliver to Lessor and Agent on or before such Non-U.S. Participant becomes a
party to this Agreement two accurate and complete copies of either U.S.
Internal Revenue Service Form W-8BEN or Form W-8ECI, or any subsequent versions
thereof or successors thereto properly completed and duly executed by such
Non-U.S. Participant claiming complete exemption from U.S. federal withholding
tax on all payments by Lessor under the Basic Documents. In addition, each Non-
U.S. Participant shall deliver two new accurate and complete copies of either
U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI promptly upon the
obsolescence or invalidity (either from a lapse in time or a change in
circumstance, other than as a result of a change in law, in which case such
forms shall only be required upon the request of the Lessor) of any form
previously delivered by such Non-U.S. Participant. Each Non-U.S. Participant
shall promptly notify Lessor at any time it determines that it is no longer in a
position to provide any previously delivered certificate to Lessor (or any
other form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding anything to the contrary contained in this SECTION
4.7, Lessor shall not be required to increase any such amounts payable to any
Non-U.S. Participant with respect to any Taxes Payable (i) that are attributable
to such Non-U.S. Participant's failure to comply with the requirements of this
SECTION 4.7(c) or (ii) that are United States withholding taxes imposed on
amounts payable to such Noteholder or Investor at the time such Noteholder or
Investor becomes a party

                                      18

<PAGE>

to this Agreement, except to the extent that such Noteholder's or Investor's
assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from Lessor with respect to such Taxes Payable pursuant to
SECTION 4.7(a). Notwithstanding any other provision of this SECTION 4.7(c), a
Non-U.S. Participant shall not be required to deliver any form pursuant to
this SECTION 4.7(c) that such Non-U.S. Participant is not legally able to
deliver.

         4.8 COMPUTATIONS. All interest and fees shall be computed on the basis
of the actual number of days (including the first day but excluding the last
day) occurring during the period for which such interest or fee is payable over
a year comprised of 360 days (or, in the case of interest on a Base Rate
Advance, 365 days or, if appropriate, 366 days). Whenever any payment to be made
shall otherwise be due on a day which is not a Business Day, such payment shall
(except as otherwise required by CLAUSE (c) of the definition of the term
"INTEREST PERIOD" with respect to LIBO Rate Advances) be made on the next
succeeding Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such payment. Any change
in the Interest Rate or the Yield Rate resulting from a change in the Alternate
Base Rate or the LIBO Rate shall become effective as of the opening of business
on the day on which such change becomes effective.

         4.9 SHARING OF PAYMENTS. If any Noteholder or Investor shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Advance (other than pursuant to the terms
of SECTIONS 4.3, 4.4, 4.5, 4.6 OR 4.7) in excess of its PRO RATA share of
payments then or therewith obtained by all Noteholders or Investors, as the case
may be, holding Advances of the same tranche and the same type, such Noteholder
or Investor shall purchase from the other Noteholders or Investors, as the case
may be, such participations in Advances made by them as shall be necessary to
cause such purchasing Noteholder or Investor to share the excess payment or
other recovery ratably with each of them; PROVIDED, HOWEVER, that if all
or any portion of the excess payment or other recovery is thereafter recovered
from such purchasing Noteholder or Investor, the purchase shall be rescinded and
each Noteholder or Investor, as the case may be, which has sold a participation
to such purchasing Noteholder or Investor shall repay to such purchasing
Noteholder or Investor the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Noteholder's or Investor's
ratable share (according to the proportion of (a) the amount of such selling
Noteholder's or Investor's required repayment to such

                                      19

<PAGE>

purchasing Noteholder or Investor to (b) the total amount so recovered from
such purchasing Noteholder or Investor) of any interest or other amount paid
or payable by such purchasing Noteholder or Investor in respect of the total
amount so recovered. Lessor agrees that any Noteholder or Investor, as the
case may be, so purchasing a participation from another Noteholder or
Investor pursuant to this SECTION 4.9 may, to the fullest extent permitted by
law, exercise all its rights of payment (including pursuant to SECTION 4.10)
with respect to such participation as fully as if such Noteholder or Investor
were the direct creditor of Lessor in the amount of such participation.

         If under any applicable bankruptcy, insolvency or other similar law,
any Noteholder or Investor receives a secured claim in lieu of a setoff to which
this SECTION 4.9 applies, such Noteholder or Investor shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Noteholders or Investors, as the case may be,
entitled under this SECTION 4.9 to share in the benefits of any recovery on such
secured claim.

         4.10 SETOFF. Each Noteholder and Investor shall, upon the occurrence
of any Credit Agreement Event of Default described in CLAUSES (a) or (b) of
SECTION 5.1.5 of the Credit Agreement and, upon the occurrence of any Credit
Agreement Default described in CLAUSES (c) through (d) of SECTION 5.1.5 of
the Credit Agreement with respect to Lessor or, with the consent of the
Required Noteholders or Required Investors, as the case may be, upon the
occurrence and continuance beyond the expiration of the applicable grace
period, if any, of any other Credit Agreement Event of Default, have the
right to appropriate and apply to the payment of the monetary Obligations
owing to it (whether or not then due), and (as security for such Obligations)
Lessor hereby grants to each Noteh older and Investor a continuing security
interest in, any and all balances, credits, deposits, accounts or moneys of
Lessor then or thereafter maintained with such Noteholder or Investor or any
bank controlling such Noteholder or Investor; PROVIDED, HOWEVER, that any
such appropriation and application shall be subject to the provisions of
SECTION 4.9.

         Each Noteholder and Investor agrees promptly to notify Lessor and Agent
after any such setoff and application made by such Noteholder or Investor;
PROVIDED, HOWEVER, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of each Noteholder and
Investor under this SECTION 4.10

                                      20

<PAGE>

are in addition to other rights and remedies (including other rights of
setoff under applicable law or otherwise) which such Noteholder or Investor
may have.

         4.11 REPLACEMENT OF NOTEHOLDER OR INVESTOR. Lessor shall be
permitted to replace (with one or more replacement Noteholders or Investors,
as the case may be) any Noteholder or Investor which requests reimbursement
for amounts owing pursuant to SECTION 4.3, 4.6 or 4.7 or becomes subject to
the provisions of SECTION 4.1; PROVIDED that (i) such replacement does not
conflict with any law, treaty, rule or regulation or determination of an
arbitrator or a court or other governmental authority, in each case
applicable to Lessor, such Investor or such Noteholder or to which Lessor,
such Investor or such Noteholder or any of their respective property is
subject, (ii) no Credit Agreement Default or Credit Agreement Event of
Default shall have occurred and be continuing at the time of such
replacement, (iii) Lessor shall repay (or the replacement bank or institution
shall purchase, at par) all Advances and other amounts owing to such replaced
Noteholder or Investor prior to the date of replacement, (iv) Lessor shall be
liable to such replaced Noteholder or Investor under SECTION 4.5 if any LIBO
Rate Advance owing to such replaced Noteholder or Investor shall be prepaid
(or purchased) other than on the last day of the Interest Period relating
thereto, (v) the replacement bank or institution, if not already a Noteholder
or Investor, as the case may be, shall be reasonably satisfactory to
Agent, (vi) the replaced Noteholder or Investor shall be obligated to make
such replacement in accordance with the provisions of SECTION 6.8.1 of the
Credit Agreement (provided that Lessor or replacement Noteholder shall be
obligated to pay the registration and processing fee) or the provisions of
SECTION 4.07 of the Trust Agreement and SECTION 21.7 of this Agreement, as
the case may be, (vii) until such time as such replacement shall be
consummated, Lessor shall pay all additional amounts (if any) required
pursuant to SECTION 4.1, 4.3, 4.6 or 4.7, as the case may be, and (viii) any
such replacement shall not be deemed to be a waiver of any rights which
Lessor, Agent, any other Investor or any other Noteholder shall have against
the replaced Noteholder or Investor.

SECTION 5.  CONDITIONS TO CLOSING.

         5.1 CONDITIONS TO CLOSING. The obligations of each Noteholder and each
Investor to perform its respective obligations hereunder shall be subject to the
fulfillment to the satisfaction of, or the waiver in writing by, each Noteholder
and Investor of the conditions precedent set forth in this SECTION 5.1 on or
before the

                                      21
<PAGE>

Closing Date (except that the obligation of any party hereto shall not be
subject to the performance or compliance of such party or of any of such
party's Affiliates).

                  (a) BASIC DOCUMENTS. The Noteholders and the Investors shall
have received fully executed counterparts of each Basic Document; PROVIDED,
HOWEVER, that originals of Notes shall be provided only if requested by any
Noteholder.

                  (b) DESCRIPTION OF LEASED EQUIPMENT.  Lessee
shall have provided to Lessor a detailed description of
all Leased Equipment.

                  (c) APPRAISAL. Lessor, the Investors and the Noteholders shall
have received an Appraisal of the Leased Equipment in form and substance
acceptable to the Noteholders and the Investors, which Appraisal shall contain
the following conclusions as of the date of the Appraisal: (i) the remaining
economic useful life of the Leased Equipment measured from the date of the
Appraisal is greater than 133 1/3% of the Lease Term, (ii) the Fair Market Value
of the Leased Equipment on the date of the Appraisal is estimated to be its
Purchase Price, (iii) the Fair Market Value of the Leased Equipment at the end
of the Lease Term is estimated to be the Lessee Purchase Fixed Price for such
Leased Equipment and (iv) at the end of the Lease Term, the use of the Leased
Equipment by a Person other than Lessee or an Affiliate, is expected to be
feasible.

                  (d) OPINIONS OF COUNSEL. Lessor, the Investors and the
Noteholders and their respective counsel shall have received (i) the opinion of
Skadden, Arps, Slate, Meagher & Flom, LLP, counsel to Lessee and Guarantor,
substantially in the form of EXHIBIT C-1 hereto, (ii) the opinion of Milbank,
Tweed, Hadley & McCloy, counsel to the Noteholders, substantially in the form of
EXHIBIT C-2 hereto, (iii) the opinion of Richards, Layton & Finger, special
counsel to the Trustee, substantially in the form of EXHIBIT C-3 hereto, (iv)
the opinion of Sonnenschein, Nath and Rosenthal, special Illinois counsel to
the Lessee and Guarantor, substantially in the form of EXHIBIT C-4 hereto, (v)
the opinion of Van Ness Feldman, Federal Energy Regulatory Commission counsel to
the Lessee and Guarantor, substantially in the form of EXHIBIT C-5 hereto and
(vi) the opinion of Mary Ellen Olson, general counsel to Lessee, Midwest Peaker
and Guarantor, substantially in the form of EXHIBIT C-6 hereto.

                                      22

<PAGE>

                  (e) CORPORATE STATUS AND PROCEEDINGS; ACCEPTANCE LETTER.  On
or before the Closing Date, Lessor shall have received:

                           (i) certificates of existence and good standing with
         respect to Lessee from the Secretary of State of the State of Delaware
         and the Guarantor from the Secretary of State of the State of
         California, each dated no earlier than the 15th day before the Closing
         Date;

                           (ii) Officer's Certificates of Lessee and Guarantor,
         substantially in the form of EXHIBIT B-1 hereto, dated the Closing
         Date;

                           (iii) Secretary's Certificates of Lessee and
         Guarantor, substantially in the form of EXHIBIT B-2, hereto, dated the
         Closing Date;

                           (iv) a letter from CT Corporation System, accepting
         its appointment as agent for service of process on the terms and
         conditions set forth in SECTION 21.16.

                  (f) LESSOR'S AND NOTEHOLDERS' CERTIFICATES. On the Closing
Date, each Noteholder and each Investor shall have received:

                           (i) an Officer's Certificate of Lessor, dated the
         Closing Date, with respect to representations and warranties made by
         Lessor, and the effectiveness of, and the compliance by Lessor with,
         the Basic Documents to which Lessor is a party;

                           (ii) an Officer's Certificate of each Noteholder and
         Investor, dated the Closing Date, with respect to representations and
         warranties made by such Noteholder or Investor, as the case may be, and
         the effectiveness of, and the compliance by such Noteholder or
         Investor, as the case may be, with the Basic Documents to which such
         Noteholder or Investor is a party;

                                      23

<PAGE>

                           (iii) a certificate of the Secretary or Assistant
         Secretary of each Noteholder and Investor, dated the Closing Date,
         with respect to such Noteholder's or Investor's, as the case may be,
         governing documents, resolutions and incumbent officers; and

                           (iv) a good standing certificate from the appropriate
         Authority as to Lessor's, each Investor's and each Noteholder's good
         standing.

                  (g) CONSENTS AND APPROVALS. All necessary consents, approvals
and authorizations of, and declarations, registrations and filings with,
Authorities and nongovernment Persons required to consummate the transactions
contemplated by the Basic Documents (including any consent required from ComEd
or any lenders to EME, the Lessee or their Affiliates) shall have been obtained
or made by Lessee and Guarantor, in form and substance satisfactory to the
Noteholders and Investors and shall be in full force and effect.

                  (h) PAYMENT OF TAXES. All material Taxes payable on or before
the Closing Date in connection with the execution, delivery, recording or
filing of any of the Basic Documents or with the consummation of any other
transactions contemplated hereby or by any of the other Basic Documents shall
have been paid in full by Lessee and Guarantor, or arrangement for such payment
shall have been made, or appropriate reserves shall have been established in
accordance with GAAP.

                  (i) TRANSACTION COSTS. The following legal and other fees,
costs and expenses incurred by Lessor, the Investors, the Noteholders, the
Agent, the Collateral Agent and the Trustee in connection with the consummation
of the transactions contemplated by the Basic Documents, and the preparation,
negotiation, execution and delivery of the Basic Documents (collectively, the
"TRANSACTION COSTS") shall have been paid in full to the extent then due: (i)
reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy LLP, special
counsel to the Noteholders; (ii) reasonable fees and expenses of Skadden, Arps,
Slate, Meagher & Flom LLP, special counsel to the Guarantor, Lessee and Midwest
Peaker; (iii) Appraisal fees and reasonable expenses; (iv) all search fees,
recording fees, filing fees and search costs incurred in connection with lien
searches and the filing of UCC financing statements; (v) the Closing Fee and
the Agency Fee; (vi) any up-front fees and expenses of the Agent, Collateral
Agent and Trustee; and (vii) all reasonable fees, costs and expenses of Lessor.
Such payments shall be made by wire transfer of

                                      24

<PAGE>

immediately available funds to the accounts specified by the parties
receiving such payments.

                  (j) PROCEEDINGS SATISFACTORY, ETC. All proceedings taken in
connection with the Advances and all documents relating thereto shall be
reasonably satisfactory to each Noteholder and Investor, and each such Person
shall have received copies of such documents as such Person may reasonably
request in connection therewith, all in form and substance reasonably
satisfactory to such Noteholder or Investor.

                  (k) CORPORATE PROCEEDINGS OF THE TRUST COMPANY. On the
Closing Date, the Investors, the Noteholders and Lessee shall have received a
copy of the resolutions, in form and substance satisfactory to such parties in
the form of a secretary's certificate of the Trust Company authorizing the
execution, delivery and performance of the Basic Documents to which it is a
party

                  (l) TRUST COMPANY INCUMBENCY CERTIFICATES. On the Closing
Date, each Investor, each Noteholder and Lessee shall have received a
certificate of the Trust Company, dated the Closing Date, as to the incumbency
and signature of the officers of the Trust Company executing any Basic Document,
satisfactory in form and substance to each Investor, each Noteholder and Lessee,
executed by any Authorized Representative of the Trust Company.

                  (m) ADVANCE REQUEST. Lessee shall have delivered to Lessor,
not later than three (3) Business Days prior to the Closing Date and not earlier
than five (5) Business Days prior to the Closing Date, the Advance Request.

                  (n) ACCEPTANCE CERTIFICATE. Lessee shall have inspected to its
satisfaction and accepted the Leased Equipment by delivering to Lessor the
Acceptance Certificate.

                  (o) INSURANCE. Lessor, each Noteholder and each Investor shall
have received evidence confirming that insurance complying with SECTION 11.2 of
the Lease is in full force and effect, and there shall be no past due premiums
in respect of such insurance.

                                      25

<PAGE>

                  (p) FINANCING STATEMENTS. Such UCC financing statements shall
have been prepared for filing as, in the reasonable opinion of counsel for the
Lessor, each Noteholder and each Investor, are necessary or desirable to
perfect the security interests created by, or pursuant to, the Basic Documents.

                  (q) FINANCIAL STATEMENTS. The Agent shall have received the
audited consolidated financial statements of the Guarantor for the 1999 Fiscal
Year and the unaudited consolidated financial statements of the Guarantor for
the Fiscal Quarter ended March 31, 2000.

                  (r) GUARANTOR'S RATING. Each Noteholder and each Investor
shall have received evidence that the Guarantor's Debt Rating is BBB+ or Baa2 or
better from S&P and Moody's, respectively.

                  (s) LITIGATION. There shall not be any actions, suits or
proceedings pending, or to the knowledge of the Lessee or the Guarantor,
threatened, with respect to the Lessee, the Guarantor, the Leased Equipment, the
Basic Documents or the transactions contemplated by the Basic Documents (i) to
set aside, restrain, enjoin or prevent the full performance of this Agreement,
the other Basic Documents or the transactions contemplated hereby or thereby or
(ii) that question or challenge the validity of the Basic Documents or the
rights or remedies of the Lessor, any Noteholder, any Investor, the Trustee, the
Collateral Agent or the Agent with respect to the obligations of the Lessee, the
Guarantor or the Lessor under any Basic Document, the Leased Equipment or the
Lessee Collateral under the Basic Documents.

                  (t) LESSOR ACCOUNT. The Lessor shall have established the
Lessor Account.

SECTION 6.  INDEMNITIES.

         6.1      GUARANTOR GENERAL INDEMNITY.

                  (a)      CLAIMS INDEMNIFIED.  Subject to the exclusions
stated in paragraph (b) below, Guarantor agrees to indemnify, protect, defend
and hold harmless on an After-Tax Basis, and does hereby indemnify each
Indemnitee against any and all Claims imposed on, incurred or suffered by or
asserted against such

                                      26

<PAGE>

Indemnitee in any way relating to or resulting from or arising out of or
attributable to:

                           (i) the purchase, acceptance, rejection, maintenance,
         possession, use, operation, return, disposition, delivery or condition
         of, or improvement to, the Leased Equipment or any part thereof or any
         interest therein;

                           (ii) the Lease, the Guaranty or any other Basic
         Document, the execution or delivery thereof or the performance,
         enforcement, attempted enforcement or amendment, supplement or
         modification of any terms thereof, or the transactions contemplated
         thereby or resulting therefrom;

                           (iii) the reasonable costs and expenses of any
         Indemnitee in connection with amendments or supplements to the Basic
         Documents requested or consented to by Lessee or required or necessary
         as a result of a Lease Event of Default;

                           (iv) the non-performance or breach by Lessee or
         Guarantor of any obligation contained in this Agreement or any other
         Basic Document or the falsity or inaccuracy of any representation,
         warranty or obligation of Lessee or Guarantor contained in this
         Agreement or any other Basic Document;

                           (v) the imposition of any Lien other than, with
         respect to a particular Indemnitee (or a Related Party), a Lien arising
         by or through such Indemnitee that is prohibited by the terms of this
         Agreement or any other Basic Document;

                           (vi) any violation by, or liability relating to, the
         Lessee of, or under, any Applicable Law, whether now or hereafter in
         effect (other than any Environmental Law), or any action of any
         Governmental Authority or other Person taken with respect to
         the Leased Equipment, the Basic Documents or the interest of any
         Indemnitee under the Basic Documents;

                           (vii) the continuing fees (if any) and expenses of
         the Lessor and the Trustee (including the reasonable compensation and
         expenses of their

                                      27

<PAGE>

         counsel, accountants and other professional persons) arising out of
         the Lessor's or Trustee's discharge of their respective duties under
         or in connection with the Basic Documents;

                           (viii) the continuing fees (if any) and expenses of
         the Agent, the Collateral Agent, the Depositary Bank, the Noteholders
         and the Investors (including the reasonable compensation and expenses
         of their counsel, accountants and other professional persons) arising
         out of the discharge of their respective duties under or in connection
         with the Basic Documents;

                           (ix) the payment of any amount, the incurrence of
         any liability or the performance of any obligation by, or the setoff
         against any accounts or moneys of, the Lessor pursuant to SECTION 4.3,
         Section 4.5, SECTION 4.6 and SECTION 4.10; and

                           (x) in any other way relating to the transactions
         contemplated by the Basic Documents.

                  (b) CLAIMS EXCLUDED. Any Claim, to the extent relating to or
resulting from or arising out of or attributable to any of the following, is
excluded from Guarantor's agreement to indemnify any Indemnitee under this
SECTION 6.1:

                           (i) acts, omissions or events occurring after
         expiration or other termination of the Lease and, where required by the
         Lease, return of the Leased Equipment to Lessor or its designee in
         compliance with the provisions of the Lease (other than Claims arising
         under SECTION 6.1(a)(ii) relating directly or indirectly to the ComEd
         Consent);

                           (ii) with respect to a particular Indemnitee and
         Related Parties, any offer, sale, assignment, transfer or other
         disposition (voluntary or involuntary) by or on behalf of (a) in the
         case of any Investor, of any of its interest in Lessor, or (b) in
         the case of Lessor, and if such action is taken at the written
         direction of any Investor, the Investor and Related Parties, of all
         or any of Lessor's interest in the Leased Equipment, or (c) in the
         case of the Noteholders, all or any of the Noteholders' interest in
         the Notes, unless such transfer is required by the terms of the
         Basic Documents or occurs in connection with the exercise of
         remedies during a Lease Event of Default;

                                      28

<PAGE>

                           (iii) with respect to any Indemnitee and Related
         Parties, any Claim attributable to the gross negligence or willful
         misconduct of the Indemnitee seeking indemnification or a Related
         Party of such Indemnitee;

                           (iv) as to any Indemnitee, any Claim to the extent
         attributable to the noncompliance of such Indemnitee or a Related
         Party, with any of the terms of, or any misrepresentation or breach of
         warranty by such Indemnitee contained in any Basic Document or any
         breach by such Indemnitee or a Related Party of any covenant contained
         in any Basic Document attributable to such Indemnitee or Related Party,
         unless attributable to the Lessee or the breach by another Person of
         its obligations under the Basic Documents or imputed to the Indemnitee;

                           (v) with respect to Agent, any Claim arising from a
         Lessor Lien attributable to it;

                           (vi) any Claim relating to the payment of any amount
         to the extent such Indemnitee or a Related Party has expressly agreed
         in any Basic Document to pay such amount without a right of
         reimbursement;

                           (vii) any Claim that is a Tax, or is a cost of
         contesting a Tax, whether or not Guarantor is required to indemnify
         therefor pursuant to SECTION 6.3;

                           (viii) any failure on the part of the Trustee to
         distribute in accordance with the Trust Agreement any amounts received
         by it under the Basic Documents and distributable by it thereunder;

                           (ix) any Claim relating to the costs and expenses of
         any Indemnitee in connection with any amendments or supplements to the
         Basic Documents requested by such Indemnitee or a Related Party if such
         amendment or supplement is not required by the Basic Documents;

                           (x) any Claim, under any theory of law, with respect
         to any actual or potential environmental liability, including but not
         limited to, any actual or potential liability arising under or related
         to Environmental

                                      29

<PAGE>

         Laws or Hazardous Materials, whether past, present or future, from
         the ownership, operation or use of the Leased Equipment;

                           (xi) any Claim that constitutes principal and/or
         interest on the Notes or Yield on the Investor Contributions; and

                           (xii) any Claim arising out of obligations expressly
         assumed by the Indemnitee seeking indemnification or a Related Party
         thereof;

PROVIDED that the terms "omission," "gross negligence" and "willful misconduct,"
when applied with respect to any Indemnitee or any Affiliate of any thereof,
shall not include any liability imputed as a matter of law to such Indemnitee
solely by reason of such entity's interest in the Leased Equipment or such
Indemnitee's failure to act in respect of matters which are or were the
obligation of Lessee or Guarantor under this Agreement or any other Basic
Document.

                  (c) INSURED CLAIMS. Subject to the provisions of paragraph
(e) of this SECTION 6.1, in the case of any Claim indemnified by Guarantor
hereunder which is covered by a policy of insurance maintained by Guarantor,
each Indemnitee agrees, unless it and each other Indemnitee shall waive its
rights to indemnification (for itself and each Related Party thereto) in a
manner reasonably acceptable to Guarantor, to cooperate, at the sole cost and
expense of Guarantor, with insurers in exercise of their rights to
investigate, defend or compromise such Claim.

                  (d) CLAIMS PROCEDURE. Each Indemnitee shall promptly after
such Indemnitee shall have actual knowledge thereof notify Guarantor in writing
of any Claim as to which indemnification is sought; PROVIDED, that the failure
so to notify Guarantor shall not reduce or affect Guarantor's liability which it
may have to such Indemnitee under this SECTION 6.1. Any amount payable to any
Indemnitee pursuant to this SECTION 6.1 shall be paid within fifteen (15) days
after receipt of such written demand therefor from such Indemnitee, accompanied
by a certificate of such Indemnitee stating in reasonable detail the basis for
the indemnification thereby sought and (if such Indemnitee is not a party
hereto) an agreement to be bound by the terms hereof as if such Indemnitee
were such a party. The foregoing shall not, however, constitute an obligation to
disclose confidential information of any kind without the execution of an
appropri ate confidentiality agreement. Promptly after Guarantor receives
notification of such Claim accompanied by a written statement

                                      30

<PAGE>

describing in reasonable detail the Claims which are the subject of and basis
for such indemnity and the computation of the amount so payable, Guarantor
shall notify such Indemnitee in writing whether it intends to pay, object to,
compromise or defend any matter involving the asserted liability of such
Indemnitee. Guarantor shall have the right to investigate and so long as no
Lease Event of Default shall have occurred and be continuing, Guarantor shall
have the right in its sole discretion, to defend or compromise any Claim for
which indemnification is sought under this SECTION 6.1 which Guarantor
acknowledges in writing to the applicable Indemnitee is subject to
indemnification hereunder; PROVIDED that no such defense or compromise shall
involve any danger of (i) foreclosure, sale, forfeiture or loss of, or
imposition of a Lien on any part of the Leased Equipment or the impairment of
the Leased Equipment in any material respect or (ii) any criminal liability
being incurred or any material adverse effect on such Indemnitee; PROVIDED,
FURTHER, that no Claim shall be compromised by Guarantor on a basis that admits
any criminal violation or gross negligence or willful misconduct on the part of
such Indemnitee without the express written consent of such Indemnitee; and
PROVIDED, FURTHER, that to the extent that other Claims unrelated to the
transactions contemplated by the Basic Documents are part of the same
proceeding involving such Claim, Guarantor may assume responsibility for the
contest or compromise of such Claim only if the same may be and is severed from
such other Claims (and each Indemnitee agrees to use reasonable efforts to
obtain such a severance). If Guarantor elects, subject to the foregoing, to
compromise or defend any such asserted liability, it may do so at its own
expense and by counsel selected by it and reasonably satisfactory to such
Indemnitee. Upon Guarantor's election to compromise or defend such asserted
liability and prompt notification to such Indemnitee of its intent to do so,
such Indemnitee shall cooperate at Guarantor's expense with all reasonable
requests of Guarantor in connection therewith and will provide Guarantor with
all information not within the control of Guarantor as is reasonably available
to such Indemnitee which Guarantor may reasonably request; PROVIDED, HOWEVER,
that such Indemnitee shall not, unless otherwise required by Applicable Law, be
obligated to disclose to Guarantor or any other Person, or permit Guarantor or
any other Person to examine (i) any income tax returns of the Investors or (ii)
any confidential information or pricing information not generally accessible by
the public possessed by the Investors (and, in the event that any such
information is made available, Guarantor shall treat such information as
confidential and shall take all actions reasonably requested by such Indemnitee
for purposes of obtaining a stipulation from all parties to the related
proceeding providing for the confidential treatment of such information from
all such parties). Where

                                       31
<PAGE>

Guarantor, or the insurers under a policy of insurance maintained by
Guarantor, undertake the defense of such Indemnitee with respect to a Claim
(with counsel reasonably satisfactory to each such Person such Indemnitee and
without reservation of rights against such Indemnitee), no additional legal
fees or expenses of such Indemnitee in connection with the defense of such
Claim shall be indemnified hereunder unless such fees or expenses were
incurred at the request of Guarantor or such insurers. Notwithstanding the
foregoing, an Indemnitee may participate at its own expense in any judicial
proceeding controlled by Guarantor pursuant to the preceding provisions, but
only to the extent that such party's participation does not in the reasonable
opinion of counsel to Guarantor interfere with such control; PROVIDED,
HOWEVER, that such party's participation does not constitute a waiver of the
indemnification provided in this SECTION 6.1; PROVIDED, FURTHER, that if and
to the extent that (i) such Indemnitee is advised by counsel that an actual
or potential conflict of interest exists where it is advisable for such
Indemnitee to be represented by separate counsel or (ii) there is a risk that
such Indemnitee may be indicted or otherwise charged in a criminal complaint
and such Indemnitee informs Guarantor that such Indemnitee desires to be
represented by separate counsel, such Indemnitee shall have the right to
control its own defense of such Claim and the reasonable fees and expenses of
such defense (including, without limitation, the reasonable fees and expenses
of such separate counsel) shall be borne by Guarantor. So long as no Lease
Event of Default shall have occurred and be continuing, no Indemnitee shall
enter into any settlement or other compromise with respect to any Claim
without the prior written consent of Guarantor unless (i) the Indemnitee
waives its rights to indemnification hereunder or (ii) Guarantor has not
acknowledged its indemnity obligation with respect thereto and there is a
significant risk that a default judgment will be entered against such
Indemnitee. Nothing contained in this SECTION 6.1(d) shall be deemed to
require an Indemnitee to contest any Claim or to assume responsibility for or
control of any judicial proceeding with respect thereto.

                  (e) SUBROGATION. To the extent that a Claim indemnified by
Guarantor under this SECTION 6.1 is in fact paid in full by Guarantor or an
insurer under an insurance policy maintained by Guarantor, Guarantor (so long as
no Lease Event of Default shall have occurred and be continuing) or such insurer
shall be subrogated to the rights and remedies of the Indemnitee on whose behalf
such Claim was paid to the extent of such payment (other than rights of such
Indemnitee under insurance policies maintained at its own expense) with respect
to the transaction or event giving rise to such Claim. Should an Indemnitee
receive any refund, in whole

                                      32

<PAGE>

or in part, with respect to any Claim paid by Guarantor hereunder, it shall
promptly pay over to Guarantor the lesser of (i) the amount refunded reduced
by the amount of any Tax incurred by reason of the receipt or accrual of such
refund and increased by the amount of any Tax (but not in excess of the
amount of such reduction) saved as a result of such payment or (ii) the
amount Guarantor or any of its insurers has paid in respect of such Claim;
PROVIDED that, so long as a Lease Event of Default shall have occurred and is
continuing such amount may be held by Lessor as security for Lessee's or
Guarantor's obligations under the Lease and the other Basic Documents.

         Any Person seeking indemnity under this SECTION 6.1 who is not a party
to this Agreement shall agree to the terms and conditions set forth in this
SECTION 6.1 as a condition to making any such claim for indemnity under this
SECTION 6.1.

         6.2      LESSEE GENERAL INDEMNITY.

                  (a) CLAIMS INDEMNIFIED. Subject to the exclusions stated in
paragraph (b) below, Lessee agrees to indemnify, protect, defend and hold
harmless on an After-Tax Basis, and does hereby indemnify each Lessee
Indemnitee against any and all Claims imposed on, incurred or suffered by or
asserted against such Indemnitee in any way relating to or resulting from or
arising out of or attributable to:

                           (i) the purchase, acceptance, rejection, maintenance,
         possession, use, operation, return, disposition, delivery or condition
         of, or improvement to, the Leased Equipment or any part thereof or any
         interest therein;

                           (ii) the Lease, the Guaranty or any other Basic
         Document, the execution or delivery thereof or the performance,
         enforcement, attempted enforcement or amendment, supplement or
         modification of any terms thereof, or the transactions contemplated
         thereby or resulting therefrom;

                           (iii) the reasonable costs and expenses of any
         Lessee Indemnitee in connection with amendments or supplements to the
         Basic Documents requested or consented to by Lessee or required or
         necessary as a result of an Event of Default;

                                      33

<PAGE>

                           (iv) the non-performance or breach by Lessee or
         Guarantor of any obligation contained in this Agreement or any other
         Basic Document or the falsity or inaccuracy of any representation,
         warranty or obligation of Lessee or Guarantor contained in this
         Agreement or any other Basic Document;

                           (v) the imposition of any Lien other than, with
         respect to a particular Indemnitee (or a Related Party), a Lien arising
         by or through such Indemnitee that is prohibited by the terms of this
         Agreement or any other Basic Document;

                           (vi) any violation by, or liability relating to, the
         Lessee of, or under, any Applicable Law, whether now or hereafter in
         effect (other than any Environmental Law), or any action of any
         Governmental Authority or other Person taken with respect to the
         Leased Equipment, the Basic Documents or the interest of any Indemnitee
         under the Basic Documents;

                           (vii) the continuing fees (if any) and expenses of
         the Lessor and the Trustee (including the reasonable compensation and
         expenses of their counsel, accountants and other professional persons)
         arising out of the Lessor's or Trustee's discharge of their respective
         duties under or in connection with the Basic Documents;

                           (viii) the continuing fees (if any) and expenses of
         the Agent, the Collateral Agent, the Depositary Bank, the Noteholders
         and the Investors (including the reasonable compensation and expenses
         of their counsel, accountants and other professional persons) arising
         out of the discharge of their respective duties under or in connection
         with the Basic Documents;

                           (ix) the payment of any amount, the incurrence of
         any liability or the performance of any obligation by, or the setoff
         against any accounts or moneys of, the Lessor pursuant to SECTION 4.3,
         Section 4.5, SECTION 4.6 and SECTION 4.10; and

                           (x) in any other way relating to the transactions
         contemplated by the Basic Documents.

                                      34

<PAGE>

                  (b) CLAIMS EXCLUDED. Any Claim, to the extent relating to or
resulting from or arising out of or attributable to any of the following, is
excluded from Lessee's agreement to indemnify any Lessee Indemnitee under this
SECTION 6.2:

                           (i) acts, omissions or events occurring after
         expiration or other termination of the Lease and, where required by the
         Lease, return of the Leased Equipment to Lessor or its designee in
         compliance with the provisions of the Lease (other than Claims arising
         under SECTION 6.2(a)(ii) relating directly or indirectly to the ComEd
         Consent);

                           (ii) with respect to a particular Lessee Indemnitee
         and Related Parties, any offer, sale, assignment, transfer or other
         disposition (voluntary or involuntary) by or on behalf of (a) in the
         case of any Investor, of any of its interest in Lessor, or (b) in the
         case of Lessor, and if such action is taken at the written direction of
         any Investor, the Investor and Related Parties, of all or any of
         Lessor's interest in the Leased Equipment, or (c) in the case of the
         Noteholders, all or any of the Noteholders' interest in the Notes,
         unless such transfer is required by the terms of the Basic Documents or
         occurs in connection with the exercise of remedies during an Event of
         Default;

                           (iii) with respect to any Lessee Indemnitee and
         Related Parties, any Claim attributable to the gross negligence or
         willful misconduct of the Lessee Indemnitee seeking indemnification or
         a Related Party of such Lessee Indemnitee;

                           (iv) as to any Lessee Indemnitee, any Claim
         attributable to the noncompliance of such Lessee Indemnitee or a
         Related Party, with any of the terms of, or any misrepresentation or
         breach of warranty by such Lessee Indemnitee contained in any Basic
         Document or any breach by such Lessee Indemnitee or a Related Party of
         any covenant contained in any Basic Document attributable to such
         Lessee Indemnitee or Related Party, unless attributable to the Lessee
         or the breach by another Person of its obligations under the Basic
         Documents or imputed to the Lessee Indemnitee;

                           (v) with respect to Agent, any Claim arising from a
         Lessor Lien attributable to it;

                                      35
<PAGE>

                           (vi) any Claim relating to the payment of any amount
         to the extent such Lessee Indemnitee or a Related Party has expressly
         agreed in any Basic Document to pay such amount without a right of
         reimbursement;

                           (vii) any Claim that is a Tax, or is a cost of
         contesting a Tax, whether or not Guarantor is required to indemnify
         therefor pursuant to SECTION 6.3;

                           (viii) any failure on the part of the Trustee to
         distribute in accordance with the Trust Agreement any amounts received
         by it under the Basic Documents and distributable by it thereunder;

                           (ix) any Claim relating to the costs and expenses of
         any Lessee Indemnitee in connection with any amendments or supplements
         to the Basic Documents requested by such Lessee Indemnitee or a Related
         Party if such amendment or supplement is not required by the Basic
         Documents;

                           (x) any Claim that constitutes principal and/or
         interest on the Notes or Yield on the Investor Contributions; and

                           (xi) any Claim arising out of obligations expressly
         assumed by the Lessee Indemnitee seeking indemnification or a Related
         Party thereof;

PROVIDED that the terms "omission," "gross negligence" and "willful misconduct,"
when applied with respect to any Lessee Indemnitee or any Affiliate of any
thereof, shall not include any liability imputed as a matter of law to such
Lessee Indemnitee solely by reason of such entity's interest in the Leased
Equipment or such Lessee Indemnitee's failure to act in respect of matters which
are or were the obligation of Lessee or Guarantor under this Agreement or any
other Basic Document.

                  (c) INSURED CLAIMS. Subject to the provisions of paragraph (e)
of this SECTION 6.2, in the case of any Claim indemnified by Lessee hereunder
which is covered by a policy of insurance maintained by Lessee, each Lessee
Indemnitee agrees, unless it and each other Lessee Indemnitee shall waive its
rights to indemnification (for itself and each Related Party thereto) in a
manner reasonably acceptable

                                      36
<PAGE>

to Lessee, to cooperate, at the sole cost and expense of Lessee, with
insurers in exercise of their rights to investigate, defend or compromise
such Claim.

                  (d) CLAIMS PROCEDURE. Each Lessee Indemnitee shall promptly
after such Lessee Indemnitee shall have actual knowledge thereof notify Lessee
in writing of any Claim as to which indemnification is sought; PROVIDED, that
the failure so to notify Lessee shall not reduce or affect Lessee's liability
which it may have to such Lessee Indemnitee under this SECTION 6.2. Any amount
payable to any Lessee Indemnitee pursuant to this SECTION 6.2 shall be paid
within fifteen (15) days after receipt of such written demand therefor from
such Lessee Indemnitee, accompanied by a certificate of such Lessee Indemnitee
stating in reasonable detail the basis for the indemnification thereby sought
and (if such Lessee Indemnitee is not a party hereto) an agreement to be bound
by the terms hereof as if such Lessee Indemnitee were such a party. The
foregoing shall not, however, constitute an obligation to disclose confidential
information of any kind without the execution of an appropriate confidentiality
agreement. Promptly after Lessee receives notification of such Claim
accompanied by a written statement describing in reasonable detail the Claims
which are the subject of and basis for such indemnity and the computation of
the amount so payable, Lessee shall notify such Lessee Indemnitee in writing
whether it intends to pay, object to, compromise or defend any matter involving
the asserted liability of such Lessee Indemnitee. Lessee shall have the right
to investigate and so long as no Event of Default shall have occurred and be
continuing, Lessee shall have the right in its sole discretion, to defend or
compromise any Claim for which indemnification is sought under this SECTION 6.2
which Lessee acknowledges in writing to the applicable Lessee Indemnitee is
subject to indemnification hereunder; PROVIDED that no such defense or
compromise shall involve any danger of (i) foreclosure, sale, forfeiture or
loss of, or imposition of a Lien on any part of the Leased Equipment or the
impairment of the Leased Equipment in any material respect or (ii) any criminal
liability being incurred or any material adverse effect on such Lessee
Indemnitee; PROVIDED, FURTHER, that no Claim shall be compromised by Lessee on
a basis that admits any criminal violation or gross negligence or willful
misconduct on the part of such Lessee Indemnitee without the express written
consent of such Lessee Indemnitee; and PROVIDED, FURTHER, that to the extent
that other Claims unrelated to the transactions contemplated by the Basic
Documents are part of the same proceeding involving such Claim, Lessee may
assume responsibility for the contest or compromise of such Claim only if the
same may be and is severed from such other Claims (and each Lessee Indemnitee
agrees to use reasonable efforts to obtain such a severance). If

                                      37
<PAGE>

Lessee elects, subject to the foregoing, to compromise or defend any such
asserted liability, it may do so at its own expense and by counsel selected by
it and reasonably satisfactory to such Lessee Indemnitee. Upon Lessee's election
to compromise or defend such asserted liability and prompt notification to such
Lessee Indemnitee of its intent to do so, such Lessee Indemnitee shall cooperate
at Lessee's expense with all reasonable requests of Lessee in connection
therewith and will provide Lessee with all information not within the control of
Lessee as is reasonably available to such Lessee Indemnitee which Lessee may
reasonably request; PROVIDED, HOWEVER, that such Lessee Indemnitee shall not,
unless otherwise required by Applicable Law, be obligated to disclose to Lessee
or any other Person, or permit Lessee or any other Person to examine (i) any
income tax returns of the Investors or (ii) any confidential information or
pricing information not generally accessible by the public possessed by the
Investors (and, in the event that any such information is made available, Lessee
shall treat such information as confidential and shall take all actions
reasonably requested by such Lessee Indemnitee for purposes of obtaining a
stipulation from all parties to the related proceeding providing for the
confidential treat ment of such information from all such parties). Where
Lessee, or the insurers under a policy of insurance maintained by Lessee,
undertake the defense of such Lessee Indemnitee with respect to a Claim (with
counsel reasonably satisfactory to each such Person such Lessee Indemnitee and
without reservation of rights against such Lessee Indemnitee), no additional
legal fees or expenses of such Lessee Indemnitee in connection with the defense
of such Claim shall be indemnified hereunder unless such fees or expenses were
incurred at the request of Lessee or such insurers. Notwithstanding the
foregoing, an Lessee Indemnitee may participate at its own expense in any
judicial proceeding controlled by Lessee pursuant to the preceding provisions,
but only to the extent that such party's participation does not in the
reasonable opinion of counsel to Lessee interfere with such control; PROVIDED,
HOWEVER, that such party's participation does not constitute a waiver of the
indemnification provided in this SECTION 6.2; PROVIDED, FURTHER, that if and to
the extent that (i) such Lessee Indemnitee is advised by counsel that an actual
or potential conflict of interest exists where it is advisable for such Lessee
Indemnitee to be represented by separate counsel or (ii) there is a risk that
such Lessee Indemnitee may be indicted or otherwise charged in a criminal
complaint and such Lessee Indemnitee informs Lessee that such Lessee Indemnitee
desires to be represented by separate counsel, such Lessee Indemnitee shall have
the right to control its own defense of such Claim and the reasonable fees and
expenses of such defense (including, without limitation, the reasonable fees and
expenses of such separate counsel) shall be borne by Lessee.

                                      38
<PAGE>

So long as no Lease Event of Default shall have occurred and be continuing, no
Lessee Indemnitee shall enter into any settlement or other compromise with
respect to any Claim without the prior written consent of Lessee unless (i) the
Lessee Indemnitee waives its rights to indemnification hereunder or (ii) Lessee
has not acknowledged its indemnity obligation with respect thereto and there is
a significant risk that a default judgment will be entered against such Lessee
Indemnitee. Nothing contained in this SECTION 6.2(e) shall be deemed to require
an Lessee Indemnitee to contest any Claim or to assume responsibility for or
control of any judicial proceeding with respect thereto.

                  (e) SUBROGATION. To the extent that a Claim indemnified by
Lessee under this SECTION 6.2 is in fact paid in full by Lessee or an insurer
under an insurance policy maintained by Lessee, Lessee (so long as no Event of
Default shall have occurred and be continuing) or such insurer shall be
subrogated to the rights and remedies of the Lessee Indemnitee on whose behalf
such Claim was paid to the extent of such payment (other than rights of such
Lessee Indemnitee under insurance policies maintained at its own expense) with
respect to the transaction or event giving rise to such Claim. Should an Lessee
Indemnitee receive any refund, in whole or in part, with respect to any Claim
paid by Lessee hereunder, it shall promptly pay over to Lessee the lesser of (i)
the amount refunded reduced by the amount of any Tax incurred by reason of the
receipt or accrual of such refund and increased by the amount of any Tax (but
not in excess of the amount of such reduction) saved as a result of such payment
or (ii) the amount Lessee or any of its insurers has paid in respect of such
Claim; PROVIDED that, so long as a Lease Event of Default shall have occurred
and is continuing such amount may be held by Lessor as security for Lessee's
obligations under the Lease and the other Basic Documents.

         Any Person seeking indemnity under this SECTION 6.2 who is not a party
to this Agreement shall agree to the terms and conditions set forth in this
SECTION 6.2 as a condition to making any such claim for indemnity under this
SECTION 6.2.

         6.3      GENERAL TAX INDEMNITY.

                  (a) INDEMNITY. Except as provided in paragraph (b), Guarantor
agrees to indemnify on an After-Tax Basis each Indemnitee and to hold each
Indemnitee harmless from and to defend each Indemnitee against all Taxes that
are imposed upon any Indemnitee or the Leased Equipment or upon any Basic
Document

                                      39
<PAGE>

or interest therein, arising out of, in connection with or relating to, any of
the following:

                           (i) the construction, financing, refinancing,
         acquisition, operation, warranty, ownership, use, possession,
         maintenance, repair, lease, condition, alteration, modification,
         restoration, refurbishing, return, purchase, sale or other disposition,
         insuring, sublease, or other use or non-use of the Leased Equipment or
         any part thereof;

                           (ii) the manufacture, design, purchase, acceptance,
         rejection, delivery or condition of, or improvement to, the Leased
         Equipment or any part or any component thereof, or any interest
         therein;

                           (iii) the Lease, the execution or delivery thereof,
         or the performance, enforcement or amendment of any terms thereof; or

                           (iv)     the payment or receipt of Rent;

                           (v) the structuring of this transaction in the manner
         contemplated herein and in the other Basic Documents rather than as a
         direct loan between the Noteholders and Lessee; or

                           (vi) otherwise in connection with the transactions
         contemplated by the Basic Documents.

                  (b)      EXCLUDED TAXES.  The indemnity provided for in
         paragraph (a) above shall not extend to any of the following Taxes
         (the "EXCLUDED TAXES"):

                           (i) Taxes imposed on, based on or measured by gross
         or net income or receipts or capital or net worth of the Indemnitee
         (other than sales, use, property, ad valorem, rental, stamp, transfer,
         excise, license and value added taxes, and other than income or
         franchise tax imposed by the State in which the Leased Equipment or any
         part or component thereof is located upon an Indemnitee or its
         Affiliates under the law of the State in which the Leased Equipment is
         located;

                                      40
<PAGE>

                           (ii) Taxes attributable to any period after
         expiration or other termination of the Lease; PROVIDED that this clause
         (ii) shall not apply with respect to any payments arising prior to the
         expiration or other termination of the Lease but which are paid after
         such period;

                           (iii) Taxes imposed on an Indemnitee attributable to
         the gross negligence or willful misconduct of such Indemnitee or any
         Related Party of such Indemnitee;

                           (iv) Taxes in the nature of capital gain, accumulated
         earnings, personal holding company, excess profits, succession or
         estate, minimum, alternative minimum, preference, franchise, conduct of
         business and other similar taxes (other than franchise tax imposed by
         the State in which the Leased Equipment or any part or component
         thereof is located upon an Indemnitee or its Affiliates under the law
         of the State in which the Leased Equipment is located;

                           (v) Taxes imposed on an Indemnitee that arise out of,
         or are caused by, any act or omission of such Indemnitee (or any
         Related Party thereof) that is expressly prohibited by any Basic
         Document or by a breach by such Indemnitee (or any Related Party
         thereof) of any of its representations, warranties or covenants under
         any Basic Document;

                           (vi) Taxes arising out of, or caused by, any
         voluntary assignment, sale, transfer or other voluntary disposition, or
         any involuntary transfer or disposition resulting from a bankruptcy or
         similar proceeding for relief of debtors in which such Indemnitee is a
         debtor, by (or a foreclosure by a creditor of) Lessor, unless such
         transfer or disposition occurs during the continuance of a Lease Event
         of Default;

                           (vii) Taxes imposed on any assignee or
         successor-in-interest to an Indemnitee to the extent any such Taxes
         exceed the Taxes that would have been imposed had no assignment or
         transfer taken place determined under the law as in effect on the date
         of transfer; PROVIDED that this exclusion shall not apply to the
         computation of the gross-up amounts necessary to make a payment on an
         After-Tax Basis, nor to a transferee, assignee or successor in

                                      41
<PAGE>

         interest that acquires the interest of an Indemnitee pursuant to a
         transfer or disposition during the continuance of a Lease Event of
         Default;

                           (viii) Taxes that are included as a part of
         Transaction Costs;

                           (ix) Taxes imposed on, based on, or measured by any
         compensation that any Trustee receives for its services;

                           (x) Taxes imposed on the Lessor or Owner Participant
         resulting from Lessor not being treated as a grantor trust or a
         nonentity for federal, state or local income tax purposes;

                           (xi) Taxes attributable to the failure of the
         Indemnitee to comply with certification, information, documentation,
         reporting or other similar requirements concerning the nationality,
         residence, identity, connection with the jurisdiction imposing such
         Taxes or other similar matters; PROVIDED that the foregoing exclusion
         shall only apply if such Indemnitee is eligible and obligated to comply
         with such requirement and shall have been given timely written notice
         of such requirement by Guarantor, however, such written notice shall
         not be required with respect to the certification, information,
         documentation and reporting requirements of SECTION 4.7(c) and SECTION
         6.6;

                           (xii) Taxes imposed on an Indemnitee to the extent
         that the Indemnitee's breach of its contest obligations under SECTION
         6.4 effectively precludes Lessee's ability to contest the Taxes;

                           (xiii) Taxes imposed on any Indemnitee resulting from
         an amendment, modification, supplement or waiver to any Basic Document
         which was not requested by Lessee or Guarantor or to which Lessee or
         Guarantor is not a party and the Indemnitee (or, in the case of the
         Contributor, Lessor, if acting at the express direction of the
         Contributor) is a party;

                           (xiv) Taxes imposed under Section 4975 of the Code,
         Section 406 of ERISA or any comparable laws of any governmental
         authority to the extent resulting from action by such Indemnitee;

                                      42
<PAGE>

                           (xv) Taxes imposed to the extent such Taxes result
         from the Indemnitee (and in the case of Lessor, only if acting at the
         written direction of the Contributor) being organized under the laws of
         a jurisdiction other than the United States or any State thereof;

                           (xvi) Any Taxes imposed on an Indemnitee to the
         extent that such taxes would not have been imposed but for the
         activities of such Indemnitee unrelated to the transactions
         contemplated hereby;

                           (xvii) Taxes imposed on an Indemnitee in the nature
         of interest, penalties, fines and additions to tax (i) payable as a
         result of such Indemnitee's failure to file, in a procedurally proper
         manner and on a timely basis, any tax reports, returns or statements
         as to which Lessee has timely notified such Indemnitee in writing of
         the requirement to file, unless such failure is otherwise caused by
         the failure of Lessee to fulfill its obligations, if any, with respect
         to such return (including provision of information sufficient to enable
         such Indemnitee to file such report, return or statement), or (ii) to
         the extent not attributable to or resulting from Taxes for which an
         indem nity is provided hereunder; and

                           (xviii) Taxes for as long as such Taxes are being
         contested pursuant to the contest provisions contained in SECTION
         6.3(g).

                  (c)      PAYMENT.  Each payment required to be made by
Guarantor to an Indemnitee pursuant to this SECTION 6.3 shall be paid either
(i) when due directly to the applicable taxing authority by Guarantor if it is
permitted to do so, or (ii) where direct payment is not permitted and with
respect to gross up amounts in immediately available funds to such Indemnitee
by the latest of (A) fifteen (15) days following Guarantor's receipt of the
Indemnitee's written demand for the payment (which demand shall be accompanied
by a statement of the Indemnitee describing in reasonable detail the Taxes for
which the Indemnitee is demanding indemnity and the computation of such Taxes),
(B) in the case of amounts which are being contested pursuant to such paragraph
(g), fifteen (15) days following the time and in accordance with a final
determination of such contest or (C) in the case of any indemnity demand for
which Guarantor has requested review and determination pursuant to paragraph
below, the completion of such review and determination, but in no event later
than the date which is three (3) Business Days prior to the date

                                      43
<PAGE>

payment of such Taxes is due. Any amount payable to Guarantor pursuant to
paragraph (e) or (f) below shall be paid within fifteen (15) days after the
Indemnitee realizes a Tax Benefit (as defined below) giving rise to a payment
under paragraph (e) or receives a refund or credit giving rise to a payment
under paragraph (f), as the case may be, and shall be accompanied by a statement
of the Indemnitee computing in reasonable detail the amount of such payment.
Upon the final determination of any contest pursuant to paragraph (g) below in
respect of any Taxes for which Guarantor has made a Tax Advance (as defined
below), the amount of Guarantor's obligation under paragraph (a) above shall be
determined as if such Tax Advance had not been made. Any obligation of
Guarantor under this SECTION 6.3 and the Indemnitee's obligation to repay the
Tax Advance will be satisfied first by set off against each other, and any
difference owing by either party will be paid within ten (10) days of such final
determination.

                  (d) INDEPENDENT EXAMINATION. Within fifteen (15) days after
Guarantor receives any computation from the Indemnitee, Guarantor may request in
writing that an independent public accounting firm selected by the Indemnitee
and reasonably acceptable to Guarantor review and determine on a confidential
basis the amount of any indemnity payment by Guarantor to the Indemnitee
pursuant to this SECTION 6.3 or any payment by an Indemnitee to Guarantor
pursuant to paragraph (e) or (f) below. The Indemnitee and Guarantor shall
cooperate with such accounting firm and supply it with all information
reasonably necessary for the accounting firm to conduct such review and
determination, PROVIDED that such accounting firm shall agree in writing in a
manner satisfactory to the Indemnitee, or Guarantor, as the case may be, to
maintain the confidentiality of such information, and PROVIDED FURTHER that
neither any Indemnitee nor Guarantor shall be required to disclose any of its
tax returns or books that such Indemnitee or Guarantor, as the case may be,
reasonably deems to be confidential in connection with such verification, and
the parties hereto agree that such Indemnitee, or Guarantor, as the case may be,
shall have sole control over the positions taken with respect to such party's
tax returns and filings. The fees and disbursements of such accounting firm will
be paid by Guarantor; PROVIDED that such fees and disbursements will be paid by
the Indemnitee if the accountants determine that the present value of the total
payments as calculated by the Indemnitee is more than 105 percent of the present
value of the correct payments (such present values in each case to be determined
by the Discount Rate). In the event such accounting firm determines that such
computations are incorrect, then such firm shall determine what it believes to
be the correct computations. The

                           PARTICIPATION AGREEMENT
                                      44

<PAGE>

computations of the accounting firm shall be final, binding and conclusive
upon Guarantor and the Indemnitee. The parties hereto agree that the independent
public accounting firm's sole responsibility shall be to verify the
computation of any payment pursuant to this SECTION 6.3 and that matters of
interpretation of this Agreement are not within the scope of the independent
accountant's responsibility. Such accounting firm shall be requested to make
its determination within thirty (30) days.

                  (e) TAX BENEFIT. If, as the result of any Taxes paid or
indemnified against by Guarantor under this SECTION 6.3, the aggregate Taxes
actually paid by the Indemnitee in connection with such payment for any tax able
year and not subject to indemnification pursuant to this SECTION 6.3 are less
(whether by reason of a deduc tion, credit, allocation or apportionment of
income or otherwise) than the amount of such Taxes that otherwise would have
been payable by such Indemnitee (a "TAX BENEFIT"); then to the extent such Tax
Benefit was not taken into account in determining the amount of indemnification
payable by Guarantor under paragraph (a) above and provided no Lease Event of
Default shall have occurred and be continuing (in which event the payment
provided under this SECTION 6.3(e) shall be deferred until the Lease Event of
Default has been cured), such Indemnitee shall pay to Guarantor the lesser of
(A) (y) the amount of such Tax Benefit, plus (z) an amount equal to any United
States federal, state or local income tax benefit resulting to the Indemnitee
from the payment under clause (y) above and this clause (z) (determined using
the same assumptions as set forth in the second sentence under the definition of
After-Tax Basis) and (B) the amount of the indemnity paid pursuant to this
SECTION 6.3 giving rise to such Tax Benefit, provided that any excess of the
amount described in clause (A) over the amount described in clause (B) shall be
carried forward and applied to reduce pro tanto any subsequent obligations of
Guarantor to make payment to such Indemnitee pursuant to this SECTION 6.3. If it
is subsequently determined that the Indemnitee was not entitled to such Tax
Benefit, the portion of such Tax Benefit that is required to be repaid or
recaptured will be treated as Taxes for which Guarantor must indemnify the
Indemnitee pursuant to this SECTION 6.3 without regard to paragraph (b) hereof.

                  (f) REFUND. If an Indemnitee obtains a refund or credit or
would have received such refund or credit but for a counterclaim or other claim
not indemnified by Guarantor hereunder against which such refund or credit has
not been applied (an "offset refund or credit") of all or part of any Taxes
paid, reimbursed or

                                      45

<PAGE>

advanced by Guarantor pursuant to this SECTION 6.3, the Indemnitee shall pay
to Guarantor within fifteen (15) days of such receipt, or in the case of an
offset refund or credit, within fifteen (15) days of the resolution of such
contest (x) the amount of such refund or credit (net of any Tax payable by
the Indemnitee as a result of the receipt or accrual of such refund or
credit) plus (y) an amount equal to any Tax Benefit realized by such
Indemnitee by reason of such payment to Guarantor (determined using the same
assumptions as set forth in the second sentence under the definition of
After-Tax Basis), PROVIDED that (A) if at the time such payment is due to
Guarantor a Lease Event of Default shall have occurred and be continuing,
such amount shall not be payable until such Lease Event of Default has been
cured, and (B) the amount payable to Guarantor pursuant to this sentence
shall not exceed the amount of the indemnity payment in respect of such
refunded or credited Taxes that was made by Guarantor (and such excess shall
be carried forward and applied to reduce pro tanto any subsequent obligations
of Guarantor to make payments to such Indemnitee pursuant to this SECTION
6.3). If it is subsequently determined that the Indemnitee was not entitled
to such refund or credit, the portion of such refund or credit that is
required to be repaid or recaptured will be treated as Taxes for which
Guarantor must indemnify the Indemnitee pursuant to this SECTION 6.3 without
regard to paragraph (b) hereof. If, in connection with a refund or credit of
all or part of any Taxes paid, reimbursed or advanced by Guarantor pursuant
to this SECTION 6.3, an Indemnitee receives an amount representing interest
on such refund or credit, the Indemnitee shall pay to Guarantor within
fifteen (15) days (1) the amount of such interest that shall be fairly
attributable to such Taxes paid, reimbursed or advanced by Guarantor prior to
the receipt of such refund or credit (net of Taxes payable in respect of the
receipt or accrual of such interest) and (2) any Tax savings resulting from
payments made by the Indemnitee under this SECTION 6.3.

                  (g)      CONTEST.

                           (i) NOTICE OF CONTEST. If a written claim is made by
         any taxing authority against an Indemnitee for any Taxes with respect
         to which Guarantor may be required to indemnify against hereunder (a
         "TAX CLAIM"), such Indemnitee shall give Guarantor written notice of
         such Tax Claim promptly after its receipt, and shall furnish Guarantor
         with copies of such Tax Claim and all other writings received from the
         taxing authority to the extent relating to such claim, provided that
         failure so to notify Guarantor shall not relieve Guarantor of any
         obligation to indemnify the Indemnitee hereunder

                                      46

<PAGE>

         except to the extent such failure effectively precludes Guarantor
         from contesting such Tax.  The Indemnitee shall not pay such Tax
         Claim until at least thirty (30) days after providing Guarantor with
         such written notice, unless (a) the Indemnitee is required to do so
         by law or regulation and (b) in the written notice described above,
         the Indemnitee has notified Guarantor of such requirement.

                           (ii) CONTROL OF CONTEST. Subject to subsection
         (g)(iii) below, Guarantor will be entitled to contest (acting
         through counsel selected by Guarantor and reasonably satisfactory to
         the Indemnitee), and control the contest of, any Tax Claim if (i)
         such Tax Claim may be segregated procedurally and contested
         independently from tax claims for which Guarantor is not obligated
         to indemnify the Indemnitee, PROVIDED that if the Indemnitee reasonably
         determines at any time that permitting Guarantor to conduct or
         continue to conduct such contest could have material adverse
         business or other consequences to such Indemnitee, such Indemnitee
         shall have the right to control or reassert control over such
         contest, or (ii) the Indemnitee requests that Guarantor control such
         contest; PROVIDED that in the case of any such contest pursuant to
         (i) or (ii) Guarantor shall use all reasonable efforts to con test
         such Tax Claim in its own name, and PROVIDED FURTHER that such
         contest shall be at Guarantor's sole cost and expense. In connection
         with any Lessee controlled contest, Guarantor shall consult in good
         faith with the Indemnitee and its counsel and shall provide the
         Indemnitee with copies of any reports or claims issued by the
         relevant auditing agent or taxing authority, but the decisions
         regarding what actions to be taken shall be made by Guarantor in
         its sole judgment.

                                    In the case of all other Tax
         Claims, the Indemnitee will contest the Tax Claim at Guarantor's
         expense if Guarantor shall request that the Tax be contested if such
         Tax Claim is for an amount of at least $25,000 (in accordance with
         subsection (g)(iii) below), and the following rules shall apply with
         respect to such contest:
                                    (1)     the Indemnitee will control the
         contest of such Tax Claim in good faith (acting through counsel
         selected by the Indemnitee and reasonably satisfactory to Guarantor),

                                      47

<PAGE>

                                    (2)     at Guarantor's written request,
         if payment is made to the applicable taxing authority, the Indemnitee
         shall use all reasonable efforts to obtain a refund thereof in
         appropriate administrative or judicial proceedings, and

                                    (3)     the Indemnitee conducting such
         contest shall consult with and keep reasonably informed Guarantor and
         its designated counsel with respect to such Tax Claim and shall
         consider and consult in good faith with Guarantor regarding any request
         (a) to resist payment of Taxes if practical and (b) not to pay such
         Taxes except under protest if protest is necessary and proper, but the
         decision regarding what actions to be taken shall be made by the
         Indemnitee in its sole judgment.

                                    (4)     Notwithstanding paragraph (3),
         above, the Indemnitee shall not otherwise settle, compromise or abandon
         such contest without Guarantor's prior written consent except as
         provided in paragraph (g)(iv) below.

                           (iii) CONDITIONS OF CONTEST. Notwithstanding the
         foregoing, no contest with respect to a Tax Claim will be required or
         permitted pursuant to this SECTION 6.3, and Guarantor shall be required
         to pay the applicable Taxes without contest, unless:

                                    (1)     within thirty (30) days after
         notice by the Indemnitee to Guarantor of such Tax Claim, Guarantor
         shall request in writing to the Indemnitee that such Tax Claim be
         contested, provided that if a shorter period is required for taking
         action with respect to such Tax Claim and the Indemnitee notifies
         Guarantor of such requirement, Guarantor shall be required to request
         such contest within such shorter period, and such Indemnitee shall take
         no action for as long as it is legally able to do so,

                                    (2)     no Lease Event of Default has
         occurred and is continuing,

                                    (3)     there is no risk of sale, forfeiture
         or loss of, or the creation of a Lien (other than a Permitted Lien) on
         the Leased Equipment

                                      48

<PAGE>

         or any interest therein as a result of such Tax Claim;
         PROVIDED that this clause (3) shall not apply if Guarantor shall
         have posted and maintained a bond or otherwise provided security for
         Guarantor's obligations under SECTION 6.3 satisfactory to the
         Indemnitee in its reasonable discretion, or the Tax is fully paid
         in either manner specified in clause (5) below,

                                    (4)     there is no risk of imposition
         of any criminal penalties,

                                    (5)     if such contest involves payment
         of such Tax, Guarantor will either advance to the Indemnitee on an
         interest-free basis and with no after-tax cost to such Indemnitee (a
         "TAX ADVANCE") or pay such Indemnitee the amount payable by Guarantor
         pursuant to SECTION 6.3(a) above with respect to such Tax, and such
         Indemnitee shall promptly pay to Guarantor any net Tax Benefit
         recognized which results from any imputed interest deduction arising
         from such interest free Tax Advance plus any net Tax Benefit recognized
         which result from making any such payment, and

                                    (6)     Guarantor agrees to pay (and pays
         on demand) and with no after-tax cost to such Indemnitee all
         reasonable costs, losses and expenses incurred by the Indemnitee in
         connection with the contest of such claim (including, without
         limitation, all reasonable legal, accounting and investigatory fees
         and disbursements).

                           (iv) WAIVER OF INDEMNIFICATION. Notwithstanding
         anything to the contrary contained in this SECTION 6.3, the Indemnitee
         at any time may elect to decline to take any action or any further
         action with respect to a Tax Claim and may in its sole
         discretion settle or compromise any contest with respect to such Tax
         Claim without Guarantor's consent if the Indemnitee:

                                    (1)     waives its right to any indemnity
         payment by Lessee pursuant to this SECTION 6.3 in respect of such
         Tax Claim (and any other claim for Taxes with respect to any other
         taxable year the contest of which is effectively precluded by the
         Indemnitee's declining to take action with respect to the Tax Claim),
         and

                                      49

<PAGE>

                                    (2)     promptly repays to Guarantor any
         Tax Advance and any amount paid to such Indemnitee under SECTION
         6.3(a) above in respect of such Taxes.

         Except as provided in the preceding sentence, any such waiver shall be
without prejudice to the rights of the Indemnitee with respect to any other Tax
Claim.

                  (h)      REPORTS.

                           (i) If any report, statement or return is required to
         be filed by an Indemnitee with respect to any Tax that is subject to
         indemnification under this SECTION 6.3, Guarantor will (1) notify the
         Indemnitee in writing of such requirement not later than thirty (30)
         days prior to the date such report, statement or return is required to
         be filed (determined without regard to extensions) and (2) either (y)
         if permitted by applicable law, prepare such report, statement or
         return for filing by Guarantor in such manner as will show the
         ownership of the Leased Equipment by Guarantor for United States
         federal, state and local income tax purposes (if applicable), send a
         copy of such report, statement or return to the Indemnitee and timely
         file such report, statement or return with the appropriate taxing
         authority, or (z) if so directed by the Indemnitee or in any event if
         practicable and if the return to be filed reflects only information in
         respect of the transactions contemplated by the Basic Documents,
         prepare and furnish to such Indemnitee not later than 30 days prior to
         the date such report, statement or return is required to be filed
         (determined without regard to extensions) a proposed form of such
         report, statement or return for filing by the Indemnitee.

                           (ii) Each of the Indemnitee or Guarantor, as the case
         may be, will timely provide the other, at Guarantor's expense, with all
         information in its possession that the other party may reasonably
         require and request to satisfy its obligations under this paragraph
         (h), but only if and to the extent that such Indemnitee is legally
         entitled to furnish such information.

                  (i) NON-PARTIES. If an Indemnitee is not a party to this
Agreement, Guarantor may require such Indemnitee to agree in writing, in a form
reasonably acceptable to Guarantor, to the terms of this SECTION 6 (to the
extent applicable

                                      50

<PAGE>

to such Indemnitee) prior to making any payment to such Indemnitee under this
SECTION 6.

         6.4 GROSS UP. If an Indemnitee shall not be entitled to a
corresponding and equal deduction with respect to any payment or Tax which
Guarantor is required to pay or reimburse under SECTION 6 (each such payment or
reimbursement, an "original payment") and which original payment constitutes
income to such Indemnitee, then Guarantor shall pay to such Indemnitee on demand
the amount of such original payment on a gross-up basis such that, after
subtracting all Taxes imposed on such Indemnitee with respect to such original
payment by Guarantor (including any Taxes otherwise excluded by SECTION 6.3 and
assuming for this purpose that such Indemnitee was subject to taxation at the
applicable Federal, state or local marginal rates in effect for the year in
which such income is taxable), such payments shall be equal to the original
payment to be received.

         6.5 TAX RETURNS. Guarantor will provide such information reasonably
requested by an Indemnitee, or required to enable an Indemnitee to fulfill its
tax filing requirements with respect to the transactions contemplated by the
Basic Documents. In the event that any return, statement or report is required
to be made or filed with respect to any Tax imposed on Guarantor, or
indemnified against by Guarantor pursuant to SECTION 6.3, Guarantor shall notify
such Indemnitee of such requirement and (i) to the extent permitted by law
(unless otherwise required by law or requested by the Indemnitee) prepare and
file in its own name such return, statement or report and furnish the Indemnitee
with a copy of such return, statement or report; (ii) where such return,
statement or report is required to be in the name of, or filed by, such
Indemnitee, or the Indemnitee otherwise requests that such return, statement or
report be filed in its name, prepare and furnish such return, statement or
report for filing by such Indemnitee in such manner as shall be satisfactory to
the Noteholders, and provide the same to the Indemnitee for filing no later than
fifteen (15) days prior to the due date of such return, statement or report; or
(iii) where such return, statement or report is required to reflect items in
addition to Taxes indemnified against by Guarantor under SECTION 6.3 as
determined by such Indemnitee, provide such Indemnitee with information in a
form and manner reasonably acceptable to such Indemnitee within a reasonable
time sufficient to permit such return, statement or report to be properly and
timely filed. Lessor shall forward to Guarantor at its address listed in SECTION
21.5 copies of all assessment and valuation notices it receives within five (5)
days of receipt; PROVIDED that Lessor's failure to deliver

                                      51

<PAGE>

such notices on a timely basis shall not relieve Guarantor of any obligations
hereunder.

         6.6 WITHHOLDING TAX EXEMPTION. At least five (5) Business Days prior to
the first date on which any Rent is payable hereunder or under any other Basic
Document for the account of any Noteholder or Investor not incorporated under
the laws of the United States or a state thereof, such Noteholder or Investor
agrees that it will have delivered to Guarantor and Lessor two duly completed
copies of United States Internal Revenue Service Form W-8BEN or W-8ECI,
certifying in either case that such Noteholder or Investor is entitled to
receive payments under this Agreement and the other Basic Documents with out
deduction or withholding of any United States Federal income taxes unless such
Noteholder or Investor advises Guarantor and Lessor that, as a result of a
change in an applicable treaty, law, or regulation, or in the judicial or
administrative interpretations thereof, occurring after the Closing Date, that
it may no longer lawfully deliver such Forms. Each Noteholder and Investor which
so delivers a Form W-8BEN or W-8ECI further undertakes to deliver to Guarantor
and Lessor two additional copies of such form (or a successor form) on or before
the date that such form expires W-8ECI W-8BEN or becomes obsolete or inaccurate
(either from a lapse in time or a change in circumstance) or after the
occurrence of any event requiring a change in the most recent forms so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by Guarantor or Lessor, in each case certifying
that such Noteholder or Investor, as the case may be, is entitled to receive
payments under this Agreement and the other Basic Documents without deduction
or withholding of any United States Federal income taxes, unless prior to the
date on which any such delivery would otherwise be required any change in
treaty, law or regulation or in the interpretation thereof by the applicable
taxing Authority occurring after such Noteholder or Investor became a Noteholder
or Investor hereunder has rendered all such forms inapplicable or has prevented
such Noteholder or Investor from duly completing and delivering any such form
with respect to it and such Noteholder or Investor advises Guarantor and Lessor
that, as a result of such change in treaty, law, regulation or interpretation,
it is not capable of receiving payments without any withholding of United States
Federal income tax.

                                      52

<PAGE>

         6.7 ENVIRONMENTAL INDEMNITY. Lessee hereby agrees to indemnify, hold
harmless and defend each Indemnitee from and against any and all Environmental
Claims. "ENVIRONMENTAL CLAIMS" shall mean all Claims (including, without
limitation, third party Claims for personal injury or real or personal property
damage), administrative and judicial proceedings (including informal
proceedings) and orders, judgments, remedial action requirements, enforcement
actions of any kind, and all reasonable and documented costs and expenses
incurred in connection therewith (including but not limited to, reasonable and
documented attorneys' fees and expenses), including but not limited to, all
costs incurred in connection with any investigation or monitoring of site
conditions or any clean-up, remedial, removal or restoration work by any
federal, state or local government agency, arising in whole or in part, out of:

                           (i) the presence on or under the Leased Equipment of
         any Hazardous Material, or any releases or discharges of any Hazardous
         Material on, under, from or onto the Leased Equipment,

                           (ii) any activity, including construction, carried on
         or undertaken on or off the Leased Equipment, whether by Lessee or any
         predecessor in title or any employees, agents, contractors or
         subcontractors of Lessee or any predecessor in title, or any other
         Persons (other than such Indemnitee), in connection with the handling,
         treatment, removal, storage, decontamination, clean-up, transport or
         disposal of any Hazardous Materials that are located or present on or
         under or that migrate, flow, percolate, diffuse or in any way move
         onto or under the Leased Equipment,

                           (iii) loss of or damage to any property or the
         environment (including clean-up costs, response costs, remediation and
         removal costs, costs of corrective action, costs of financial
         assurance, fines and penalties and natural resource damages), or death
         or injury to any Person, and all expenses associated with the
         protection of wildlife, aquatic species, vegetation, flora and fauna,
         and any mitigative action required by or under Environmental Laws, in
         connection with the Leased Equipment or any activities undertaken
         thereon, or

                           (iv) in connection with the Leased Equipment, any
         activities undertaken thereon or the actions of Lessee or Guarantor,
         any claim

                                      53

<PAGE>

         concerning lack of compliance with Environmental Laws, or any act
         or omission causing an environmental condition that requires
         remediation or would allow any Authority to record a Lien on the land
         records;

but Lessee shall not be required to indemnify any Indem nitee under this SECTION
6.7 for (1) any Claim to the extent such Claim results from the willful
misconduct or gross negligence of such Indemnitee, or any Affiliate of such
Indemnitee (it being understood that, unless the applicable Indemnitee was in
possession of the Leased Equipment and caused the Claim, Lessee shall be
required to indemnify an Indemnitee even if the ordinary (but not gross)
negligence of such Indemnitee, or any Affiliate of such Indemnitee, caused or
contributed to such Claim) or (2) any Claim to the extent attributable to acts
or events occurring after the Lease Expiration Date or the return or remarketing
of the Leased Equipment. The indemnity provided for herein shall survive the
expiration or termination of and shall be separate and independent from any
remedy under the Lease or any other Basic Document.

         6.8 LIMITATION ON ENVIRONMENTAL INDEMNITY. Not withstanding any other
provision of this Agreement, each Indemnitee hereby waives any right and agrees
not to take any action against the Guarantor, under any theory of law, with
respect to any actual or potential environmental liability, including but not
limited to, any actual or potential liability arising under or related to
Environmental Laws or Hazardous Materials, whether past, present or future from
the ownership, operation or use of the Leased Equipment.

SECTION 7.  CERTAIN LEASE RELATED PROVISIONS.

         7.1      RENEWAL LEASE TERMS.

                  (a) So long as the Lease has not been terminated under
SECTION 12.1 thereof, Lessee may, not less than 360 days prior to the Lease
Expiration Date, provide written notice (the "RENEWAL NOTICE") to Lessor, the
Agent and Guarantor of its election to renew the Lease (the "RENEWAL LEASE")
with respect to all of the Leased Equipment for an additional term of five (5)
years commencing on the last day of the Lease Term (the "RENEWAL TERM"). In the
event Lessee elects such Renewal Term, Lessee shall have a ninety (90) day
period after such election to agree with the Financing Parties upon the terms of
the Renewal Lease (including, but not limited to, (i) the interest rates on the
Notes and the Yield Rate for the Certifi-

                                      54

<PAGE>

cates, which interest rates and Yield Rate shall be determined in the
individual sole discretion of the Financing Parties and shall be based upon
the then-current market conditions and the then-current credit ratings of
Lessee and Guarantor, (ii) the Renewal Rent, which shall be sufficient to
enable Lessor to pay interest and principal and Yield due and owing on the
Notes and the Certificates, as applicable, and (iii) the adjusted amount of
the Residual Deficiency Payment, which shall be determined by the Financing
Parties in their individual sole discretion) and to satisfy the following
conditions: (x) each Financing Party shall have received the End of Term
Appraisal satisfactory in form and substance to each Financing Party in its
individual sole discretion, (y) the Guaranty shall be acceptable to the
Financing Parties in their individual sole discretion and (z) the Renewal
Lease shall qualify as an "operating lease" for Lessee in accordance with
GAAP. The parties hereto agree to cooperate in good faith to amend the Basic
Documents, as may be necessary, to reflect the agreed terms relating to the
Renewal Lease and other amendments as are necessary as a result of a Lease
renewal pursuant to this SECTION 7.1(a).

                  (b) In the event that, within 90 days of Lessee's delivery of
a Renewal Notice, Lessee shall have been unable to negotiate terms of the
Renewal Lease as described in clause (a) above, or the conditions set forth in
clause (a) shall not have been satisfied, Lessee shall not be entitled to enter
into a Renewal Lease and shall notify Lessor, on or prior to the Purchase
Decision Date, of Lessee's intention (i) to exercise the Lessee Purchase Option
(as defined in the Lease) and/or (ii) to exercise the Sale Option (as defined in
the Lease). In the event the Lessee does not elect the Lessee Purchase Option
and/or the Sale Option on or prior to the Purchase Decision Date, the Lessee
shall be deemed to have elected to exercise the Lessee Purchase Option with
respect to all of the Leased Equipment.

         7.2 LIMITATION ON LESSEE'S LIABILITY. Notwithstanding any provision to
the contrary contained in the Lease or other Basic Documents, the Lessee's
liability for Rent (other than Supplemental Rent payable by Lessee pursuant to
SECTION 6.7) due on any Rent Payment Date or other date (a "DUE DATE") shall be
limited to an amount equal to Free Cashflow attributable to the period
commencing on the immediately preceding Due Date and ending on such Due Date.
Nothing contained in the Lease or other Basic Documents shall create any
liability of the Lessee for any Rent (other than Supplemental Rent payable by
Lessee pursuant to SECTION 6.7) in excess of such amounts; PROVIDED, that the
Guarantor shall be liable under the

                                      55
<PAGE>

Guaranty for any Rent (other than Supplemental Rent payable by Lessee
pursuant to SECTION 6.7) payable on any Rent Payment Date.

SECTION 8.  LESSEE REPRESENTATIONS AND WARRANTIES.

         Lessee hereby represents and warrants to each of the other parties
hereto, as of the Closing Date as follows:

         8.1 ORGANIZATION; POWER; COMPLIANCE WITH LAW AND CONTRACTUAL
OBLIGATIONS. It (a) is validly organized and existing and in good standing under
the laws of the State of Delaware, (b) is duly qualified to do business and is
in good standing under the laws of each jurisdiction where the nature of its
business requires such qualification, (c) has all requisite power and authority
and holds all material requisite governmental licenses, permits and other
approvals to enter into and perform its obligations under each Basic Document to
which it is a party and to conduct its business substantially as currently
conducted by it and (d) is in compliance with all laws, governmental
regulations, court decrees, orders and Contractual Obligations applicable to it,
except, with respect to CLAUSES (b), (c) and (d) to the extent that the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect with respect to the Lessee.

         8.2 NON-CONTRAVENTION. The execution, delivery and performance by it of
each Basic Document to which it is a party do not:

                  (a) contravene its Organic Documents;

                  (b) contravene any law, governmental regulation, court decree
or order or material Contractual Obligation binding on or affecting it; or

                  (c) result in, or require the creation or imposition of, any
Lien (except as expressly provided for in the Basic Documents) on any of its
properties.

         8.3 GOVERNMENTAL APPROVAL; REGULATION.

                  (a) No authorization, consent, approval, license, exemption of
or filing or registration with any court or governmental authority or regulatory
body ("GOVERNMENTAL APPROVAL") is required for it to execute and perform its
obligations

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<PAGE>

under any Basic Document to which it is a party, except for those which have
been duly obtained or effected. No material Governmental Approval is required
for it to carry on its business, except for those which have been duly
obtained or effected.

                  (b) It is not subject to any regulation as an "investment
company" subject to the Investment Company Act of 1940, as amended, or as a
"holding company" or a "subsidiary company" or an "affiliate" of a "holding
company" subject to the Public Utility Holding Company Act of 1935, as amended
("PUHCA"), except that Guarantor is a "subsidiary company" of Edison
International which is a "holding company" that is exempt from all regulation
under PUHCA (except SECTION 9(a)(2) thereof) pursuant to SECTION 3(a) thereof.

         8.4 VALIDITY. Each Basic Document executed by it on or prior to the
date hereof constitutes, and each Basic Document executed by it after the date
hereof will constitute, its legal, valid and binding obligation enforceable in
accordance with its terms (except as may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights generally and
general principles of equity).

         8.5 LITIGATION. There is no pending or, to its knowledge, threatened
litigation, action, proceeding, or labor controversy affecting Lessee or any of
its properties, businesses, assets or revenues, which, if adversely determined
(taking into account any insurance proceeds payable under a policy where the
insurer has accepted coverage without any reservations), would have a Material
Adverse Effect with respect to Lessee or which purports to adversely affect the
legality, validity or enforce ability of this or any Basic Document.

         8.6 OWNERSHIP OF PROPERTIES; LIENS.  It owns good and marketable title
to, or a valid leasehold interest in, or an other enforceable interest in all
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever (including patents, trademarks, trade names, service marks and
copyrights) purported to be owned, leased or held by it, free and clear of all
Liens, charges or claims (including infringement claims with respect to patents,
trademarks, copyrights and the like) except as permitted pursuant to the Basic
Documents.

         8.7 TAXES. It has filed all tax returns and reports required by law to
have been filed by it and has paid all taxes and governmental charges thereby
shown to be

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<PAGE>

owing, except any such taxes or charges which are being diligently contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.

         8.8 PENSION AND WELFARE PLANS. During the consecutive twelve- month
period prior to the date of the execution and delivery of this Agreement, no
steps have been taken by it to terminate any Pension Plan, and no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise to
a Lien under SECTION 302(f) of ERISA. No condition exists or event or
transaction has occurred with respect to any Pension Plan which could reasonably
be expected to result in the incurrence by it or any member of the Controlled
Group of any liability (other than liabilities incurred in the ordinary course
of maintaining the Pension Plan), fine or penalty other than any liability, fine
or penalty which could reasonably be expected to have a Material Adverse Effect
with respect to Lessee. Neither it nor any member of the Controlled Group has
any contingent liability with respect to any post-retirement benefit under a
Welfare Plan which could reasonably be expected to have a Material Adverse
Effect with respect to Lessee other than liability for continuation coverage
described in Part 6 of Title I of ERISA.

         8.9 ENVIRONMENTAL WARRANTIES. (a) All facilities and property owned
or leased by it or any of its Subsidiaries or Partnerships in connection with
the Leased Equipment have been, and continue to be, owned or leased by it and
its Subsidiaries in compliance with all applicable Environmental Laws, except
where the failure so to comply would not have, or be reasonably expected to
have, a Material Adverse Effect with respect to Lessee or any of its
Subsidiaries or Partnerships.

                  (b) There are no pending or, to its knowledge, threatened:

                           (i) material claims, complaints, notices or requests
         for information received by it from governmental authorities with
         respect to any alleged violation by it of any applicable Environmental
         Law in connection with the ownership or operation of the Leased
         Equipment that, singly, or in the aggregate, have, or may reasonably be
         expected to have, a Material Adverse Effect on Lessee or any of its
         Subsidiaries or Partnerships; or

                           (ii) material complaints, notices or inquiries to it
         from governmental authorities regarding potential liability under any
         applicable

                                      58
<PAGE>

         Environmental Law in connection with the ownership or operation of the
         Leased Equipment that, singly, or in the aggregate, have, or may
         reasonably be expected to have, a Material Adverse Effect on Lessee or
         any of its Subsidiaries or Partnerships.

                  (c) There have been no Releases of Hazardous Materials at, on
or under any property owned or leased by it in connection with the ownership or
operation of the Leased Equipment that, singly, or in the aggregate, have, or
may reasonably be expected to have, a Material Adverse Effect with respect to
Lessee or any of its Subsidiaries or Partnerships.

                  (d) It has obtained and is in compliance with all permits,
certificates, approvals, licenses and other authorizations relating to
environmental matters and necessary for its business in connection with the
ownership or operation of the Leased Equipment, except where the failure to
obtain, maintain or comply with such permits, certificates, approvals, licenses
or other authorizations would not have, or be reasonably expected to have, a
Material Adverse Effect with respect to Lessee or any of its Subsidiaries or
Partnerships.

                  (e) To its knowledge, the property owned or leased by it in
connection with the ownership or operation of the Leased Equipment is not
listed or proposed for listing (with respect to owned property only) on the
National Priorities List, on the CERCLIS or on any similar state list of sites
requiring investigation or clean-up, except where such listing would not
reasonably be expected to have a Material Adverse Effect with respect to Lessee
or any of its Subsidiaries or Partnerships.

                  (f) No conditions exist at, on or under any property owned or
leased by it in connection with the ownership or operation of the Leased
Equipment which, with the passage of time, or the giving of notice or both,
would give rise to liability under any applicable Environmental Law, which
liability would have, or may reasonably be expected to have, a Material Adverse
Effect with respect to Lessee or any of its Subsidiaries or Partnerships.

                                      59
<PAGE>

         8.10 REGULATIONS T, U AND X. Neither it nor any of its Affiliates will,
directly or indirectly, use any of the proceeds of the Advances or the purchase
by Lessor of the Leased Equipment for the purpose of purchasing or carrying any
"margin security" or "margin stock" within the meaning of Regulation T, U or X
of the Board of Governors of the Federal Reserve System, respectively, or for
the purpose of reducing or retiring any indebtedness originally incurred to
purchase or carry a margin security or margin stock or for any other purpose
which might cause any of the transactions contemplated by this Agreement or any
other Basic Document to constitute a "purpose credit" within the meaning of
Regulation T, U or X of the Board of Governors of the Federal Reserve System, or
for the purpose of purchasing or carrying any security, and neither it nor any
of its Affiliates has taken or will otherwise take or permit any action by it or
any of its Affiliates in connection with any of the transactions contemplated by
any of the Basic Documents that would involve a violation of Regulation T, U or
X, or any other regulation of the Board of Governors of the Federal Reserve
System.

         8.11 ACCURACY OF INFORMATION.  All material factual information
heretofore or contemporaneously furnished by it in writing to Lessor, any
Investor or any Noteholder for purposes of or in connection with this Agreement
or any transaction contemplated hereby is, and all other such material written
factual information hereafter furnished by it in writing to Lessor, any
Investor, any Noteholder, the Agent, the Collateral Agent, the Depositary Bank
or the Trustee will be, true and materially accurate in every material respect
on the date as of which such information is dated or certified and as of the
date of execution and delivery of this Agreement by the parties hereto, and such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary in order to make such information not
materially misleading.

         8.12 PERFECTION OF SECURITY INTEREST. Upon the filing of appropriate
UCC financing statements with the Secretary of State of the State of Illinois
and fixture financing statements in the real estate records in the offices of
Cook County, Illinois, Du Page County, Illinois, Kane County, Illinois, Lake
County, Illinois, Will County, Illinois and Winnebago County, Illinois, Lessor
will have an enforceable, perfected security interest of record in the Lessee
Collateral granted pursuant to the Lease.

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<PAGE>

         8.13 CHIEF EXECUTIVE OFFICE OF LESSEE. The principal place of business
and chief executive office, as such terms are used in Section 9-103(3) of the
UCC, of Lessee is located at One Financial Place, 440 South LaSalle Street,
Suite 3500, Chicago, Illinois 60605.

         8.14 NO MATERIAL ADVERSE CHANGE. There has not occurred any event or
condition having a Material Adverse Effect with respect to the Lessee since
March 31, 2000.

         8.15 NO DEFAULT. No Lease Default or Lease Event of Default
attributable to it has occurred and is continuing.

SECTION 9.  GUARANTOR REPRESENTATIONS AND WARRANTIES.

         The Guarantor hereby represents and warrants to each of the other
parties hereto, as of the Closing Date as follows:

         9.1 ORGANIZATION; POWER; COMPLIANCE WITH LAW AND CONTRACTUAL
OBLIGATIONS. It (a) is validly organized and existing and in good standing under
the laws of the State of California, (b) is duly qualified to do business and is
in good standing under the laws of each jurisdiction where the nature of its
business requires such qualification, (c) has all requisite power and authority
and holds all material requisite governmental licenses, permits and other
approvals to enter into and perform its obligations under each Basic Document to
which it is a party and to conduct its business substantially as currently
conducted by it and (d) is in compliance with all laws, governmental
regulations, court decrees, orders and Contractual Obligations applicable to it,
except, with respect to clauses (b), (c) and (d) to the extent that the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect with respect to the Guarantor.

         9.2 NON-CONTRAVENTION. The execution, delivery and performance by it of
each Basic Document to which it is a party do not:

                  (a) contravene its Organic Documents;

                  (b) contravene any law, governmental regulation, court decree
or order or material Contractual Obligation binding on or affecting it; or

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<PAGE>

                  (c) result in, or require the creation or imposition of, any
Lien (except as expressly provided for in the Basic Documents) on any of its
properties.

         9.3 GOVERNMENTAL APPROVAL; REGULATION.

                  (a) No Governmental Approval is required for it to execute and
perform its obligations under any Basic Document to which it is a party, except
for those which have been duly obtained or effected. No material Governmental
Approval is required for it to carry on its business, except for those which
have been duly obtained or effected.

                  (b) It is not subject to any regulation as an "investment
company" subject to the Investment Company Act of 1940, as amended, or as a
"holding company" or a "subsidiary company" or an "affiliate" of a "holding
company" subject to the Public Utility Holding Company Act of 1935, as amended
("PUHCA"), except that it is a "subsidiary company" of Edison International
which is a "holding company" that is exempt from all regulation under PUHCA
(except Section 9(a)(2) thereof) pursuant to Section 3(a) thereof.

         9.4 VALIDITY. Each Basic Document executed by it on or prior to the
date hereof constitutes, and each Basic Document executed by it after the date
hereof will constitute, its legal, valid and binding obligation enforceable in
accordance with its terms (except as may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights generally and
general principles of equity).

         9.5 LITIGATION. There is no pending or, to its knowledge, threatened
litigation, action, proceeding, or labor controversy affecting it, or any of its
properties, businesses, assets or revenues, which, if adversely determined
(taking into account any insurance proceeds payable under a policy where the
insurer has accepted coverage without any reservations), would have a Material
Adverse Effect with respect to Guarantor or which purports to adversely affect
the legality, validity or enforceability of this or any Basic Document.

         9.6 TAXES. It has filed all tax returns and reports required by law to
have been filed by it and has paid all taxes and governmental charges thereby
shown to be

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<PAGE>

owing, except any such taxes or charges which are being diligently contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.

         9.7 PENSION AND WELFARE PLANS. During the consecutive twelve- month
period prior to the date of the execution and delivery of this Agreement, no
steps have been taken by it to terminate any Pension Plan, and no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise to
a Lien under Section 302(f) of ERISA. No condition exists or event or
transaction has occurred with respect to any Pension Plan which could reasonably
be expected to result in the incurrence by it or any member of the Controlled
Group of any liability (other than liabilities incurred in the ordinary course
of maintaining the Pension Plan), fine or penalty other than any liability, fine
or penalty which could reasonably be expected to have a Material Adverse Effect
with respect to it. Neither it nor any member of the Controlled Group has any
contingent liability with respect to any post-retirement benefit under a Welfare
Plan which could reasonably be expected to have a Material Adverse Effect with
respect to it, other than liability for continuation coverage described in Part
6 of Title I of ERISA.

         9.8 ACCURACY OF INFORMATION. All material factual information
heretofore or contemporaneously furnished by it in writing to Lessor, any
Investor or any Noteholder for purposes of or in connection with this Agreement
or any transaction contemplated hereby is, and all other such material written
factual information hereafter furnished by it in writing to Lessor, any
Investor, any Noteholder, the Agent, the Collateral Agent, the Depositary Bank
or the Trustee will be, true and materially accurate in every material respect
on the date as of which such information is dated or certified and as of the
date of execution and delivery of this Agreement by the parties hereto, and such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary in order to make such information not
materially misleading.

         9.9 FINANCIAL INFORMATION. The consolidated balance sheet of Guarantor
as at December 31, 1999, and the related consolidated statement of income and
cash flows of Guarantor, copies of which have been furnished to the Agent
pursuant to SECTION 5.1(q) have been prepared in accordance with GAAP
consistently applied, and present fairly the consolidated financial condition of
Guarantor and its Subsidiar-

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<PAGE>

ies as at the dates thereof and the results of their operations for the
periods then ended.

         9.10 CHIEF EXECUTIVE OFFICE. The principal place of business and chief
executive office of the Guarantor, and the place where the documents, accounts
and records relating to the transactions contemplated by this Agreement and each
other Basic Document are kept by the Guarantor, is located at 18101 Von Karman
Ave., Suite 1700, Irvine, CA 92612.

         9.11 NO MATERIAL ADVERSE CHANGE. There has not occurred any event or
condition having a Material Adverse Effect with respect to the Guarantor and its
Subsidiaries and Affiliates, taken as a whole, since March 31, 2000.

         9.12 NO DEFAULT. No Lease Default or Lease Event of Default
attributable to Guarantor, and no default under the Guaranty, has occurred and
is continuing.

SECTION 10.  NOTEHOLDERS' AND INVESTORS' REPRESENTATIONS AND WARRANTIES.

         Each Investor and Noteholder represents and warrants, severally and
only as to itself, to each of the other parties hereto, as of the Closing Date
as follows:

         10.1 ORGANIZATION; POWER; COMPLIANCE WITH LAW AND CONTRACTUAL
OBLIGATIONS. It (a) is validly organized and existing and in good standing under
the laws of the jurisdiction of its organization, (b) is duly qualified to do
business and is in good standing under the laws of each jurisdiction where the
nature of its business requires such qualification, (c) has all requisite power
and authority and holds all material requisite governmental licenses, permits
and other approvals to enter into and perform its obligations under each Basic
Document to which it is a party and to conduct its business substantially as
currently conducted by it and (d) is in compliance with all laws, governmental
regulations, court decrees, orders and Contractual Obligations applicable to it,
except, with respect to CLAUSES (b), (c) and (d), to the extent that the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect with respect to such Noteholder or Investor, as applicable.

         10.2 NON-CONTRAVENTION. The execution, delivery and performance by it
of each Basic Document to which it is a party do not:

                                      64
<PAGE>

                  (a) contravene its Organic Documents;

                  (b) contravene any law, governmental regulation, court decree
or order or material Contractual Obligation binding on or affecting it; or

                  (c) result in, or require the creation or imposition of, any
Lien (except as expressly provided for in the Basic Documents) on any of its
properties.

         10.3 GOVERNMENTAL APPROVAL; REGULATION. No Governmental Approval is
required for it to execute and perform its obligations under any Basic Document
to which it is a party, except for those which have been duly obtained or
effected. No Governmental Approval is required for it to carry on its business,
except for those which have been duly obtained or effected.

         10.4 VALIDITY. Each Basic Document executed by it on or prior to the
date hereof constitutes, and each Basic Document executed by it after the date
hereof will constitute, its legal, valid and binding obligation enforceable in
accordance with its terms (except as may be limited by bankruptcy, insolvency
or other similar laws affecting the enforcement of creditors' rights generally
and general principles of equity).

         10.5 LITIGATION. No litigation, investigation or proceeding of or
before any arbitrator or Authority is pending or threatened by or, to its
knowledge, against it with respect to any of the Basic Documents or any of the
transactions contemplated hereby or thereby.

         10.6 ERISA.

                  (a) It is not and will not be purchasing any Certificates or
Notes, as the case may be, with the assets of an "employee benefit plan" (as
defined in SECTION 3(3) of ERISA) which is subject to Title I of ERISA, or a
"plan" (as defined in SECTION 4975(e)(1) of the Code).

                  (b) Each Investor and Noteholder, and each subsequent holder
of any Certificate or Note, as the case may be, covenants that it will not, so
long as no Lease Event of Default exists, dispose of the Certificate or Note to
be purchased by it

                                      65
<PAGE>

or any interest therein (including, without limitation, any transfer by a
change in the capacity in which such Investor or Noteholder holds its
investment in such Certificates or Notes) to any Person unless (i) such Person
shall (A) make the representation and warranty contained in SECTION 10.6(a) and
(B) agree to be bound by this SECTION 10.6(b).

         10.7 INVESTMENT IN CERTIFICATES OR NOTES. It is an "accredited
investor" as defined in Rule 501(a)(1) promulgated under the Securities Act. It
is acquiring its Certificate or Note, as the case may be, for its own account
for investment and not with a view to any distribution (as such term is used in
SECTION 2(11) of the Securities Act) thereof except as may be permitted by the
Securities Act without registration, and if in the future it should decide to
dispose of its Certificate or Note, it understands that it may do so only in
compliance with the Securities Act and the rules and regulations of the SEC
thereunder and any applicable state securities laws. Neither it nor anyone
authorized to act on its behalf has taken or will take any action which would
subject the issuance of any Certificate or Note or any interest in the Leased
Equipment, the Trust Estate or the Lease to the registration requirements of
SECTION 5 of the Securities Act and no representation or warranty contained in
this SECTION 10.7 shall include or cover any action or inaction of Lessee or
any Affiliate thereof whether or not purportedly on behalf of any Investor,
Noteholder or Lessor or any of their respective Affiliates, but subject to the
foregoing and SECTION 10.6(b), and subject to SECTION 5 of the Trust Agreement
and SECTION 16 of the Lease, it is understood among the parties that the
disposition of such Investor's or Noteholder's property, as the case may be,
shall be at all times within its control.

SECTION 11.  LESSOR REPRESENTATIONS AND WARRANTIES.

         Lessor represents and warrants to each of the other parties hereto as
of the Closing Date as follows:

         11.1 DUE ORGANIZATION, ETC. Lessor is a duly organized and validly
existing "business trust" as such term is defined in 12 Del.C. Section 3801(a)
under the laws of the State of Delaware, is in good standing under the laws of
the State of Delaware and has the power and authority to carry on its business
as now conducted and to enter into and perform its obligations under this
Agreement, each Basic Document to which it is a party and each other agreement,
instrument and document executed and

                                      66
<PAGE>

delivered prior to the Closing Date in connection with, or as contemplated
by, each such Basic Document.

         11.2 AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance of each Basic Document to which it is a party has been duly
authorized by all necessary action on its part and neither the execution and
delivery thereof by Lessor, nor the consummation of the transactions
contemplated thereby by Lessor, nor compliance by it with any of the terms and
provisions thereof (i) requires or will require any approval (which approval
has not been obtained) of any party or approval or consent of any trustee or
holders of any indebtedness or obligations of Lessor, (ii) contravenes or will
contravene any Applicable Law applicable to or binding on it as of the date
hereof, (iii) does or will contravene or result in any breach of or constitute
any default under, or result in the creation of any Lessor Lien upon any of the
Leased Equipment, the Trust Agreement, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or credit
agreement or other agreement or instrument to which it or its properties may be
bound or (iv) does or will require any action by any Authority.

         11.3 ENFORCEABILITY, ETC. Each Basic Document to which it is a party
has been duly executed and delivered by it and constitutes, or upon execution
and delivery will constitute, a legal, valid and binding obligation enforceable
against it in accordance with the terms thereof (except as may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity).

         11.4 LITIGATION.  No litigation, investigation or proceeding of or
before any arbitrator or Authority is pending or, to its knowledge, threatened
by or against Lessor (a) with respect to any of the Basic Documents or any of
the transactions contemplated hereby or thereby, or (b) which could reasonably
be expected to have a Material Adverse Effect with respect to Lessor.

         11.5 ASSIGNMENT. Lessor has not assigned or transferred any of its
right, title or interest in or under the Lease, any Basic Document or any of
the Leased Equipment, except in accordance with the Basic Documents.

         11.6 NO DEFAULT. Lessor is not in default under or with respect to any
of its Contractual Obligations in any respect which could have a Material
Adverse Effect

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with respect to Lessor. No Credit Agreement Default or Credit Agreement Event
of Default attributable to it has occurred and is continuing.

         11.7 CHIEF PLACE OF BUSINESS. Lessor's chief place of business, chief
executive office and office where the documents, accounts and records relating
to the transactions contemplated by this Agreement and each other Basic
Document are kept are located at c/o Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Trust Administration.

         11.8 SECURITIES ACT. Neither Lessor nor any Person authorized by
Lessor to act on its behalf has offered or sold any interest in the Leased
Equipment, the Certificates or the Notes, or in any similar security or
interest relating to the Leased Equipment, or in any security the offering of
which for the purposes of the Securities Act would be deemed to be part of the
same offering as the offering of the aforementioned securities to, or solicited
any offer to acquire any of the same from, any Person, other than, in the case
of the Notes, Agent, and neither Lessor nor any Person authorized by Lessor to
act on its behalf will take any action which would subject the issuance or sale
of any interest in any of the Leased Equipment, the Certificates or the Notes
to the provisions of SECTION 5 of the Securities Act or require the
qualification of any Basic Document under the Trust Indenture Act of 1939, as
amended.

         11.9 LESSOR LIENS. The Leased Equipment is free and clear of all Lessor
Liens attributable to Lessor.

         11.10 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
Lessor is not (i) an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended, (ii) a "holding company," a "public utility company" or a
"subsidiary company" of a "holding company" within the meaning of PUHCA, or
(iii) subject to any other Applicable Law which purports to restrict or
regulate its ability to borrow money.

         11.11 GOVERNMENTAL ACTIONS. Assuming the representation and warranties
of Lessee contained in SECTIONS 8.2, 8.3 and 8.9 are true, no authorization or
approval or other action by, and no notice to or filing or registration with,
any Authority is required for the due execution, delivery or performance by
Lessor, as the case may

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be, of the Trust Agreement, the Credit Agreement, the Notes, the Certificates,
this Agreement, the Assignment Agreement or the other Basic Documents to which
Lessor is or will be a party, other than any such authorization or approval or
other action or notice or filing as has been duly obtained, taken or given.

SECTION 12.  REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE AND THE TRUST
COMPANY.

         The Trust Company (only with respect to representations and warranties
relating to the Trust Company) and the Trustee hereby severally represent and
warrant that, as of the Closing Date:

         12.1 DUE INCORPORATION; ETC. The Trust Company is a banking
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, has the corporate power and authority, as the
Trustee and/or in its individual capacity to the extent expressly provided
herein or in the Trust Agreement, to enter into and perform its obligations
under the Trust Agreement, this Agreement and each of the other Basic Documents
to which it is or will be a party.

         12.2 DUE AUTHORIZATION, ENFORCEABILITY; ETC. (a) (i) The Trust
Agreement has been duly authorized, executed and delivered by the Trust Company,
and (ii) assuming the due authorization, execution and delivery of the Trust
Agreement by the Investors thereto, the Trust Agreement constitutes the legal,
valid and binding obligation of the Trust Company, enforceable against it in its
individual capacity or as Trustee, as the case may be, in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, arrangement, moratorium or other laws relating to or
affecting the rights of creditors generally and by general principles of equity.

                  (b) (i) This Agreement has been duly authorized, executed and
delivered by the Trustee and the Trust Company, and (ii) assuming the due
authorization, execution and delivery of this Agreement by each party hereto
other than the Trustee and the Trust Company, this Agreement constitutes a
legal, valid and binding obligation of the Trustee and the Trust Company,
enforceable against the Trust Company or the Trustee, as the case may be, in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorga-

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nization, arrangement, moratorium or other laws relating to or affecting the
rights of creditors generally and by general principles of equity.

                  (c) (i) Each of the other Basic Documents to which the Trust
Company or the Trustee is or will be a party has been or when executed and
delivered will be duly authorized, executed and delivered by the Trust Company
or the Trustee and (ii) assuming the due authorization, execution and delivery
of each of the other Basic Documents by each party thereto other than the Trust
Company or the Trustee, each of the other Basic Documents to which the Trust
Company or the Trustee is or will be a party constitutes or when executed and
delivered will constitute a legal, valid and binding obligation of the Trust
Company or the Trustee, as the case may be, enforceable against the Trust
Company or the Trustee in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
arrangement, moratorium or other laws relating to or affecting the rights of
creditors generally and by general principles of equity.

         12.3 NON-CONTRAVENTION. The execution and delivery by the Trust
Company, in its individual capacity or as Trustee, as the case may be, of the
Trust Agreement, this Agreement and the other Basic Documents to which it is or
will be a party, the consummation by the Trust Company, in its individual
capacity or as Trustee, as the case may be, of the transactions contemplated
hereby and thereby, and the compliance by the Trust Company, in its individual
capacity or as Trustee, as the case may be, with the terms and provisions
hereof and thereof, do not and will not (i) contravene any Applicable Law of
the State of Delaware or the United States governing the banking or trust
powers of the Trust Company, the Trust Agreement or the Organic Documents of
the Trust Company, or (ii) contravene the provisions of, or constitute a
default by the Trust Company under, or result in the creation of any Lessor's
Lien attributable to it in its individual capacity and unrelated to the
transactions contemplated by the Basic Documents upon the Trust Estate under
any indenture, mortgage or other material contract, agreement or instrument to
which the Trust Company is a party or by which the Trust Company or its
property is bound.

         12.4 GOVERNMENTAL ACTIONS. Assuming the representations and warranties
of Lessee contained in SECTIONS 8.2, 8.3 and 8.9 are true, no authorization or
approval or other action by, and no notice to or filing or registration with,
any Authority of the State of Delaware or the United States governing the
banking or trust powers of the

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Trust Company is required for the due execution, delivery or performance by the
Trust Company or the Trustee, as the case may be, of the Trust Agreement, this
Agreement or the other Basic Documents to which the Trust Company or the
Trustee is or will be a party, other than any such authorization or approval or
other action or notice or filing as has been duly obtained, taken or given.

         12.5 LITIGATION. There is no pending or, to the actual knowledge of
the Trust Company, threatened, action, suit, investigation or proceeding
against the Trust Company either in its individual capacity or as the Trustee,
as the case may be, before any Authority of the State of Delaware or the United
States governing its banking and trust powers which, if determined adversely to
it, would materially adversely affect the ability of the Trust Company, in its
individual capacity or as Trustee, as the case may be, to perform its
obligations under the Trust Agreement, this Agreement or the other Basic
Documents to which it is or will be a party or would materially adversely
affect the Leased Equipment or any interest therein or which would question the
validity or enforceability of any Basic Document to which the Trust Company, in
its individual capacity or as the Trustee, is or will be a party.

         12.6 LIENS. The Trust Estate is free of any Lessor 's Liens
attributable to the Trust Company or the Trustee.

SECTION 13.  GUARANTOR AFFIRMATIVE COVENANTS.

         Guarantor covenants with Lessor, each Investor and each Noteholder as
follows:

         13.1 FINANCIAL INFORMATION, REPORTS, NOTICES.

         Guarantor will furnish, or will cause to be furnished, to Lessor,
copies of the following financial statements, reports, notices and information:

                  (a) as soon as available and in any event within sixty (60)
days after the end of each of the first three Fiscal Quarters of each Fiscal
Year of Guarantor, unaudited consolidated balance sheets of Guarantor and its
Subsidiaries as of the end of such Fiscal Quarter and unaudited consolidated
statement of income and cash flows of Guarantor and its Subsidiaries for such
Fiscal Quarter and for the period commencing at the end of the previous Fiscal
Year and ending with the end of such

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<PAGE>

Fiscal Quarter, certified by an Authorized Representative with responsibility
for financial matters;

                  (b) as soon as available and in any event within one hundred
and twenty (120) days after the end of each Fiscal Year of Guarantor, a copy of
the annual audited report for such Fiscal Year for Guarantor and its
Subsidiaries, including therein consolidated balance sheets of Guarantor and
its Subsidiaries as of the end of such Fiscal Year and consolidated statements
of income and cash flows of Guarantor and its Subsidiaries for such Fiscal
Year, and accompanied by the unqualified opinion of Arthur Andersen & Co. or
other internationally recognized independent auditors selected by Guarantor
which report shall state that such consolidated financial statements present
fairly in all material respects the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
periods;

                  (c) concurrently with the delivery of the financial statements
referred to in SECTION 13.1(a), a certificate, executed by the controller,
treasurer or chief financial officer of Guarantor, showing (in reasonable detail
and with appropriate calculations and computations in all respects satisfactory
to the Investors and Noteholders) compliance with the financial covenant set
forth in SECTION 14.9;

                  (d) as soon as possible and in any event within five (5)
Business Days after any Authorized Representative obtains knowledge of the
occurrence of each Lease Default or default under material agreements of
Guarantor, a statement of such Authorized Representative setting forth details
of such Lease Default or default and the action which Guarantor has taken and
proposes to take with respect thereto;

                  (e) as soon as possible and in any event within five (5)
Business Days after (x) the occurrence of any material adverse development with
respect to any litigation, action, proceeding, or labor controversy of the type
described in SECTION 9.5 or (y) the commencement of any labor controversy,
litigation, action, proceeding of the type described in SECTION 9.5, notice
thereof and, upon request of the Investors and Noteholders copies of all
non-privileged documentation relating thereto;

                  (f) as soon as known, the occurrence of any Rating Event; and

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                  (g) immediately upon becoming aware of the institution of any
steps by the Guarantor or any other Person to terminate any Pension Plan (other
than a standard termination under ERISA Section 4041(b)), or the failure to
make a required contribution to any Pension Plan if such failure is sufficient
to give rise to a Lien under Section 302(f) of ERISA, or the taking of any
action with respect to a Pension Plan which could result in the requirement
that the Guarantor furnish a bond or other security to the PBGC or such Pension
Plan, or the occurrence of any event with respect to any Pension Plan which
could result in the incurrence by the Guarantor or any member of the Controlled
Group of any liability (other than liabilities incurred in the ordinary course
of maintaining the Pension Plan), fine or penalty which liability could
reasonably be expected to have a Material Adverse Effect on Guarantor, or any
increase in the contingent liability of the Guarantor with respect to any
post-retirement Welfare Plan benefit which has a Material Adverse Effect on
Guarantor, notice thereof and copies of all documentation relating thereto.

         13.2 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Guarantor will
continue to engage in business of the same type as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all material rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by SECTION 14.4.

         13.3 COMPLIANCE WITH LAWS. Guarantor will comply in all material
respects with all Applicable Law, such compliance to include the payment, before
the same shall become delinquent, of all taxes, assessments and governmental
charges imposed upon it or upon its property, except to the extent
non-compliance would not have a Material Adverse Effect with respect to
Guarantor.

         13.4 BOOKS AND RECORDS; RIGHT OF INSPECTION. Guarantor will, and will
cause each of its active Subsidiaries to, keep books and records which
accurately reflect all of its business affairs and transactions. Guarantor will
at any reasonable time and from time to time upon reasonable prior notice,
permit Noteholders and Investors to examine and make copies of and abstracts
from the records and books of account of Guarantor which books and records
shall relate to the transactions contemplated by the Basic Documents; PROVIDED
THAT by virtue of this SECTION 13.4 Guarantor shall not be deemed to have
waived any right to confidential treatment of the information obtained, subject
to the provisions of Applicable Law or court order.

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<PAGE>

         13.5 OTHER INFORMATION. Guarantor will prepare, or cause to be
prepared, and will furnish, or will cause to be furnished, to each of the
Lessor and the Trustee such tax returns and Periodic Filings (as defined in the
Trust Agreement) relating to the Lessor, and will advise the Lessor and the
Trustee to make such elections as may from time to time be required or
appropriate under any applicable Federal, state or local statute or rule of
regulation thereunder, so as to maintain to the extent possible the Lessor's
characterization set forth in SECTION 6.04 of the Trust Agreement.

SECTION 14.  GUARANTOR NEGATIVE COVENANTS.

         Guarantor covenants with Lessor, each Investor and each Noteholder as
follows:

         14.1 RESTRICTIONS ON SECURED INDEBTEDNESS. Guarantor will not create,
incur, assume or suffer to exist any secured Indebtedness, except the
Indebtedness incurred pursuant to this Agreement and the other Basic Documents,
other than:

                  (a) Capitalized Lease Liabilities and other secured
Indebtedness of any kind whatsoever (including, without limitation, Indebtedness
secured by a pledge of the stock of a Subsidiary not otherwise permitted under
CLAUSE (b) of this SECTION 14.1) at any time outstanding not exceeding an
aggregate principal amount equal to 10% of Net Tangible Assets; PROVIDED THAT
any Indebtedness exceeding such amount may be secured pursuant to SECTION 14.2;
and

                  (b) Non-Recourse Debt with respect to which Guarantor has
pledged the stock of a Subsidiary in order to secure a project financing
obtained or being obtained after the Closing Date by such Subsidiary (or the
Partnership in which such Subsidiary is a partner).

         14.2 RESTRICTIONS ON LIENS. Guarantor will not create, incur, assume or
suffer to exist any Lien upon any of its property, revenues or assets, whether
now owned or hereafter acquired, except:

                  (a) Liens granted to secure payment of Indebtedness of the
type permitted and described in CLAUSE (b) of SECTION 14.1;

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<PAGE>

                  (b) Liens for taxes, assessments or other governmental charges
or levies incurred in the ordinary course of business and not at the time
delinquent or thereafter payable without penalty or which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books;

                  (c) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not overdue
or which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books;

                  (d) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds;

                  (e) judgment Liens in existence less than thirty (30) days
after the entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies;

                  (f) Liens upon any property at any time directly owned by
Guarantor to secure any Indebtedness of the nature described in CLAUSE (a) of
SECTION 14.1 in excess of the amount otherwise permitted thereby; PROVIDED,
that the obligations of the Basic Documents are equally and ratably secured
with any and all such Indebtedness and with any other Indebtedness similarly
entitled to be equally and ratably secured;

                  (g) Liens imposed as a result of costs incurred by any
federal, state or local governmental agency or any other Authority pursuant to
any applicable Environmental Law; PROVIDED, that such Liens or costs are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP have been set aside on its books; and

                  (h) any Lien existing on the property of Guarantor on the
Closing Date.

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         In the event that Guarantor shall propose to create, incur, assume or
suffer to exist any Lien upon any property at any time directly owned by it to
secure any Indebtedness as contemplated by CLAUSE (f) above, Guarantor will
give prior written notice thereof to Agent, who shall give notice to the
Noteholders and the Investors.

         14.3 INVESTMENTS. Guarantor will not, and will not permit any of its
Subsidiaries to, make, incur, assume or suffer to exist any Investment in any
other Person, except:

                  (a) Investments existing on the Closing Date;

                  (b) Cash Equivalent Investments, PROVIDED, HOWEVER, that any
Investment which when made complies with the requirements of the definition of
the term "CASH EQUIVALENT INVESTMENT" may continue to be held notwithstanding
that such Investment if made thereafter would not comply with such requirements;

                  (c) without duplication, Investments permitted as
Indebtedness pursuant to SECTION 14.1;

                  (d) Investments otherwise in the ordinary course of business;

                  (e) Investments permitted pursuant to SECTION 14.4(b); and

                  (f) Investments in Persons primarily engaged in the power
generation, power sales or power transmissions business.

         14.4 CONSOLIDATION, MERGER. Guarantor will not, and will not permit
any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge
into or with, any other Person, or purchase or otherwise acquire all or
substantially all of the assets of any Person (or of any division thereof) in
one or any series of transactions except:

                  (a) any such Subsidiary may liquidate or dissolve voluntarily
into, or may merge with and into, Guarantor or any other Subsidiary, and the
assets or stock of any Subsidiary may be purchased or otherwise acquired by
Guarantor or any other Subsidiary;

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<PAGE>

                  (b) so long as no Lease Default (by reason of the violation of
SECTION 14.9) has occurred and is continuing or would occur after giving effect
thereto, Guarantor or any of its Subsidiaries may purchase all or substantially
all of the assets of any Person, or (in the case of any such Subsidiary) acquire
such Person by merger; and

                  (c) so long as no Lease Default or Lease Event of Default has
occurred and is continuing or would occur after giving effect thereto,
Guarantor may consolidate with or merge into any other Person, or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, or permit any Person to merge into or consolidate with Guarantor if
Guarantor is the surviving entity or the surviving entity (i) unconditionally
guarantees all obligations of the Lessee under the Lease pursuant to a
guarantee agreement containing substantially the same provisions as the
Guaranty and (ii) is an entity formed and existing under the laws of the United
States of America and assumes the Obligations of Guarantor.

         14.5 ASSET DISPOSITIONS.  Guarantor will not, and will not permit any
of its Subsidiaries to, sell, transfer, lease, contribute or otherwise convey,
or grant options, warrants or other rights with respect to, all or any
substantial part of its assets (including accounts receivable and capital stock
of Subsidiaries) to any Person, unless:

                  (a) such sale, transfer, lease, contribution or conveyance
is in the ordinary course of its business; or

                  (b) the aggregate net book value of such assets, together
with the aggregate net book value of all other assets sold, transferred,
leased, contributed or conveyed otherwise than in the ordinary course of
business by Guarantor or any of its Subsidiaries pursuant to this SECTION
14.5(b) during the most recent 12-month period since the Closing Date, does not
exceed 10% of Net Tangible Assets computed as of the end of the most recent
quarter preceding such sale; PROVIDED, HOWEVER, that any such sales shall be
disregarded for purposes of the limitation of this SECTION 14.5(b) if the
proceeds of such sale are invested in assets in similar or related lines of
business of Guarantor; and PROVIDED FURTHER, that Guarantor may sell or
otherwise dispose of assets in excess of such 10% if the proceeds from such
sales or dispositions, which are not so reinvested, are retained by Guarantor
as cash or Cash Equivalent Investments.

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         14.6 TRANSACTIONS WITH AFFILIATES. Guarantor will not enter into, or
cause, suffer or permit to exist any arrangement or contract with any of its
Affiliates unless such arrangement or contract is fair and equitable to
Guarantor and is an arrangement or contract of the kind which would be entered
into by a prudent Person in the position of Guarantor with a Person which is not
one of its Affiliates.

         14.7 RESTRICTIVE AGREEMENTS. Guarantor will not, and will not permit
any of its Subsidiaries to, enter into any agreement (excluding any Basic
Document and any agreement governing any Indebtedness permitted by CLAUSE (b) of
SECTION 14.1 as to the assets financed with the proceeds of such Indebtedness):

                  (a) prohibiting the ability of Guarantor from amending or
otherwise modifying any Basic Document; or

                  (b) restricting the ability of any Subsidiary to make any
payments, directly or indirectly, to Guarantor by way of dividend, advances,
repayments of loans or advances, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on investments, or
any other agreement or arrangement which restricts the ability of any such
Subsidiary to make any payment, directly or indirectly, to Guarantor, in each
case, where such prohibition or restriction has a Material Adverse Effect with
respect to the Guarantor.

         14.8 ERISA. Guarantor will not engage in any prohibited transactions
under SECTION 406 of ERISA or under SECTION 4975 of the Code, which would
subject Guarantor to any tax, penalty or other liabilities having a Material
Adverse Effect with respect to the Guarantor.

         14.9 FINANCIAL CONDITION. Guarantor will not permit its Tangible Net
Worth to be less than $400,000,000 PLUS 25% of Guarantor's and its
Subsidiaries' consolidated net income earned (without subtracting net losses)
in each Fiscal Quarter commencing with the quarter ended December 31, 1999.

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SECTION 15.  LESSEE AFFIRMATIVE COVENANTS.

         Lessee covenants with Lessor, each Investor and each Noteholder as
follows:

         15.1 FINANCIAL INFORMATION, REPORTS, NOTICES. Lessee will furnish, or
will cause to be furnished, to Lessor, copies of the following financial
statements, reports, notices and information:

                  (a) as soon as possible and in any event within five (5)
Business Days after any Authorized Representative obtains knowledge of the
occurrence of each Lease Default or default under material agreements of Lessee,
a statement of such Authorized Representative setting forth details of such
Lease Default or default and the action which Lessee has taken and proposes to
take with respect thereto; and

                  (b) as soon as possible and in any event within five (5)
Business Days after (x) the occurrence of any material adverse development with
respect to any litigation, action, proceeding, or labor controversy of the type
described in SECTION 8.5 or (y) the commencement of any labor controversy,
litigation, action, proceeding of the type described in SECTION 8.5, notice
thereof and, upon request of the Investor and Noteholders, copies of all
non-privileged documentation relating thereto.

         15.2 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Lessee will
continue to engage in business of the same type as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all material rights, privileges and
franchises necessary or desirable in the normal conduct of its business.

         15.3 COMPLIANCE WITH LAWS. Lessee will comply in all material respects
with all applicable law, rules, regulations and orders, such compliance to
include the payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its property,
except to the extent non-compliance would not have a Material Adverse Effect
with respect to Lessee.

         15.4 INSURANCE. Lessee shall maintain insurance as set forth in
SECTION 11.2 of the Lease.

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         15.5 BOOKS AND RECORDS; RIGHT OF INSPECTION.

              (a) Lessee will keep books and records which accurately reflect
all of its business affairs and transactions. Lessee will at any reasonable
time and from time to time upon reasonable prior notice, permit Noteholders and
Investors to examine and make copies of and abstracts from the records and
books of account of Lessee, which books and records shall relate to the
transactions contemplated by the Basic Documents; PROVIDED, THAT by virtue of
this SECTION 15.5 Lessee shall not be deemed to have waived any right to
confidential treatment of the information obtained, subject to the provisions
of Applicable Law or court order.

              (b) During the Lease Term, Lessee shall permit the Noteholders
and the Investors (and their agents) (at each such party's sole expense),
during normal business hours and under conditions reasonably acceptable to
Lessee (including the execution and delivery of appropriate confidentiality
agreements and adherence to Lessee's safety and insurance procedures) upon
reasonable and adequate prior notice, to visit and inspect the Leased Equipment
and related records.

         15.6 MAINTENANCE OF PROPERTIES. Lessee will maintain, preserve,
protect and keep its property and equipment in good repair, working order and
condition (ordinary wear and tear excepted), and make necessary and proper
repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times, unless Lessee
determines in good faith that the continued maintenance of any of its
properties or equipment is no longer economically desirable and except where
the failure to do so would not have a Material Adverse Effect with respect to
Lessee.

         15.7 MAINTENANCE OF LEASED EQUIPMENT.  Lessee shall maintain the
Leased Equipment pursuant to the provisions of the Lease.

         15.8 ENVIRONMENTAL COVENANT.  Lessee will, in connection with its
ownership and operation of the Leased Equipment:

              (a) use and operate the Leased Equipment in compliance with all
Environmental Laws, keep all necessary permits, approvals, certificates,
licenses and other authorizations relating to environmental matters in effect
and remain in material compliance therewith, and handle all Hazardous Materials
in material

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<PAGE>

compliance with all applicable Environmental Laws, in each case where the
failure to do so may reasonably be expected to have a Material Adverse Effect
with respect to the Lessee;

                  (b) promptly cure and have dismissed with prejudice to the
reasonable satisfaction of the Noteholders and Investors any actions and
proceedings relating to compliance with Environmental Laws where such action or
proceeding may reasonably be expected to have a Material Adverse Effect with
respect to the Lessee; PROVIDED that the Lessee may postpone such cure and
dismissal during any period in which it is diligently pursuing any available
appeals in such action or proceeding so long as such postponement would not be
reasonably likely to have a Material Adverse Effect with respect to the Lessee;
and

                  (c) provide such non-privileged information as the Noteholders
or Investors may reasonably request from time to time to evidence compliance
with this SECTION 15.8.

SECTION 16.  LESSEE NEGATIVE COVENANT.

         Lessee covenants with Lessor, each Investor and each Noteholder as
follows:

         16.1 RESTRICTIONS ON LIENS. Lessee will not create, incur, assume or
suffer to exist any Lien upon the Leased Equipment, except Liens created
pursuant to the Basic Documents.

         16.2 RESTRICTION ON EXTENSION OF COMED AGREEMENTS. Without the written
consent of the Lessor, which shall not be unreasonably withheld, Lessee will not
enter into any agreement the effect of which would be to renew or extend the
ComEd Agreements or which would otherwise limit in any way the Lessor's rights
in respect of the Leased Equipment.

SECTION 17.   LESSOR, TRUSTEE, TRUST COMPANY, INVESTOR AND NOTEHOLDER COVENANTS.

         Each of Lessor, Trust Company, Trustee, the Investor and each
Noteholder covenants (as to itself and not jointly with any other Person) with
each other party hereto, as follows:

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         17.1 COMPLIANCE WITH TRUST AGREEMENT. Each of Lessor, the Trust Company
and the Trustee hereby covenants and agrees severally and as to itself only
that it will:

                  (a) comply with all the terms of the Trust Agreement
applicable to it; and

                  (b) not amend, supplement or otherwise modify SECTIONS 7.06
AND 10.06 of the Trust Agreement without the prior written consent of Lessee
and Agent, so long as the Certificates and Notes are outstanding.

         17.2 DISCHARGE OF LIENS. It will not create or permit to exist at any
time, and will, at its own cost and expense, promptly take such action as may
be necessary duly to discharge, or to cause to be discharged, all Lessor Liens
attributable to it, and will cause restitution to be made to the Trust Estate
in the amount of any diminution of the value thereof as a result of its failure
to comply with its obligations under this SECTION 17.2.

         17.3 TRUST AGREEMENT. Without prejudice to any right of Trustee under
the Trust Agreement to resign as Trustee, or the right of the Investors under
the Trust Agreement to remove the Trustee as Trustee, each of the Investors and
Lessor hereby agrees with Lessee (a) not to terminate or revoke the trust
created by the Trust Agreement except as permitted by SECTION 8.01 of the Trust
Agreement before the later of the Lease Expiration Date or the payment in full
of the obligations under the Certificates and (b) not to amend, supplement,
terminate or revoke or otherwise modify any provision of the Trust Agreement
before the Lease Expiration Date in such a manner as to materially and
adversely affect the rights of Lessee under the Basic Documents.

         17.4 SUCCESSOR TRUSTEE. Trustee, or any successor, may resign or be
removed by the Investors as Trustee, a successor Trustee may be appointed, and a
corporation may become Trustee under the Trust Agreement, only in accordance
with the provisions of SECTION 7.06 of the Trust Agreement. Notwithstanding
anything to the contrary contained in the Lease or the Trust Agreement, so long
as no Lease Default or Lease Event of Default exists, the appointment of a
successor Trustee shall be subject to the consent of Lessee (which consent shall
not be unreasonably withheld or delayed).

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         17.5     INDEBTEDNESS; OTHER BUSINESS.  Lessor shall not
contract for, create, incur or assume any Indebtedness, or enter into any
business or other activity, other than pursuant to and in accordance with the
Basic Documents.

         17.6 DEPRECIATION. Before the Lease Expiration Date, none of Lessor,
any Noteholder or any Investor shall claim any federal or state tax attributes
or benefits (including depreciation) relating to the Leased Equipment unless
required to do so by an appropriate taxing authority or after a clearly
applicable change in Applicable Law or as a protective response to a proposed
adjustment by an Authority. If an appropriate taxing Authority requires Lessor,
any Noteholder or any Investor to claim any such federal or state Tax attributes
or benefits, such Person shall promptly notify Lessee and Guarantor thereof and
shall permit Lessee and Guarantor to contest such requirement in a manner
similar to the contest rights provided in, and subject to any applicable
limitation to a contest contained in, SECTION 6.3.

         17.7 QUIET ENJOYMENT. So long as the Lease remains in effect or so long
as the obligations of Lessee arising hereunder have not been fully and finally
discharged, Lessor, each Noteholder and each Investor covenants that it will
not, through its own actions, interfere in Lessee's (or any sublessee's or
assignee's) quiet enjoyment of the Leased Equipment during the term of the
Lease, except during the occurrence and continuance of a Lease Event of Default.

         17.8 NO LIENS. No Noteholder or Investor will create or permit to exist
at any time, and each Noteholder and Investor will, at its own cost and expense,
promptly take such action as may be necessary duly to discharge, or to cause to
be discharged, all Lessor Liens attributable solely to such Noteholder's or
Investor's, as the case may be, acts or failures to act.

         17.9 CREDIT AGREEMENT. Provided that no Credit Agreement Event of
Default is continuing, none of the Noteholders, Investors or Lessor shall
consent to any amendment, supplement, waiver or other modification of the terms
and provisions of the Credit Agreement, the Certificates, the Notes or the Trust
Agreement, in each case without the prior written consent of Lessee, which
consent shall not be unreasonably withheld or delayed; PROVIDED THAT no such
amendment, supplement, waiver or other modification shall increase the
obligations of Lessee or Guarantor under the Basic Documents without the prior
written consent of Lessee or Guarantor.

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SECTION 18.  AGENT COVENANT.

         Agent will not directly or indirectly create, incur, assume or suffer
to exist any Lessor Lien attributable to it and arising out of events or
conditions not related to its rights in the Lease or the administration function
under the Basic Documents, and will promptly notify the Investors, the
Noteholders, the Trustee, Lessee and Lessor in writing of the imposition of any
such Lien of which it has actual knowledge and shall promptly, at its own
expense, take such action as may be necessary to duly discharge such Lessor
Lien.

SECTION 19.  AGENT.

         19.1 ACTIONS.

         (a) Each Noteholder and Investor hereby appoints Citicorp North
America, Inc. as its Administrative Agent ("AGENT") under and for the purposes
of each Basic Document. Each Noteholder and Investor authorizes Agent to act on
behalf of such Noteholder or Investor, as the case may be, under each Basic
Document and, in the absence of other written instructions from the Required
Investors, Required Noteholders or Required Participants, as applicable,
received from time to time by Agent (with respect to which Agent agrees that it
will comply, except as otherwise provided in this SECTION 19.1 or as otherwise
advised by counsel), to exercise such powers hereunder and thereunder as are
specifically delegated to or required of Agent by the terms hereof and thereof,
together with such powers as may be reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in any Basic
Document, Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall Agent have or be deemed to have any
fiduciary relationship with any Noteholder or Investor, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into any Basic Document or otherwise exist against Agent. Without
limiting the generality of the foregoing sentence, the use of the term "agent"
in this Agreement with reference to Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.

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                  (b) Each Noteholder and Investor hereby agrees to indemnify
(which indemnity shall survive any termination of this Agreement) Agent-Related
Persons PRO RATA according to such Noteholder's or Investor's Percentage
Interest, from and against any and all liabilities, obligations, losses,
damages, claims, costs or expenses of any kind or nature whatsoever which may
at any time be imposed on, incurred by, or asserted against, Agent-Related
Persons in any way relating to or arising out of any Basic Document, including
reasonable attorneys' fees, and as to which Agent is not reimbursed by Lessor;
PROVIDED, HOWEVER, that no Noteholder or Investor shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
claims, costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted from Agent-Related Person's
gross negligence or willful misconduct. No Agent-Related Persons shall be
required to take any action under any Basic Document, or to prosecute or defend
any suit in respect of any Basic Document, unless it is indemnified hereunder
to its satisfaction. If any indemnity in favor of Agent shall be or become, in
its determination, inadequate, Agent-Related Person may call for additional
indemnification from the Noteholders and Investors and cease to do the acts
indemnified against hereunder until such additional indemnity is given.

         19.2 FUNDING RELIANCE. Unless Agent shall have been notified by
telephone, confirmed in writing, by any Noteholder or Investor, as the case may
be, by 12:00 Noon, New York City time, on the Business Day prior to the Closing
Date that such Noteholder or Investor will not make available the amount of its
respective Advance on the Closing Date, Agent may assume that such Noteholder
or Investor, as the case may be, has made such amount available to Agent and,
in reliance upon such assumption, may, but shall not be required to, make
available to Lessor a corresponding amount. If and to the extent that such
Noteholder or Investor shall not have made such amount available to Agent, such
Noteholder or Investor and Lessor severally agree to repay Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date Agent made such amount available to Lessor to the date such
amount is repaid to Agent, at the interest rate applicable to such Advance on
the Closing Date; PROVIDED, that if such Noteholder or Investor, as the case
may be, makes available the amount of its respective Advance on or before the
next Business Day following the Closing Date, the interest rate payable on such
amount shall be the Federal Funds Rate.

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         19.3 EXCULPATION. No Agent-Related Person shall be (i) liable to any
Noteholder or Investor for any action taken or omitted to be taken by it under
any Basic Document, or in connection therewith, except for its own willful
misconduct or gross negligence, nor (ii) responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of any Basic Document, nor to make any inquiry
respecting the performance by any Noteholder or Investor of its obligations
under any Basic Document. Any such inquiry which may be made by Agent shall not
obligate it to make any further inquiry or to take any action. Each
Agent-Related Person shall be entitled to rely upon advice of counsel
concerning legal matters and upon any notice, consent, certificate, statement
or writing which Agent believes to be genuine and to have been presented by a
proper Person.

         19.4 SUCCESSOR. Agent may resign as such at any time upon at least 30
days' prior notice to Lessor and all Noteholders and Investors. If Agent at any
time shall resign, the Required Participants may, within ten (10) days after
such notice and with the consent of Lessor (not to be unreasonably withheld),
appoint another Noteholder or Investor as a successor Agent which shall
thereupon become Agent hereunder. If no successor Agent shall have been so
appointed by the Required Participants, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving notice of
resignation, then the retiring Agent may, on behalf of the Noteholders and
Investors, after notice to and consultation with Lessor, appoint a successor
Agent, which shall be one of the Noteholders or Investors or an as signee
thereof, and shall have a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall be entitled to receive from the
retiring Agent such documents of transfer and assignment as such successor
Agent may reasonably request, and shall thereupon succeed to and become vested
with all rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After the effective date of any retiring Agent's resignation
hereunder as Agent, the provisions of this SECTION 19 and SECTIONS 6 and 20
hereof shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.

         19.5 RELIANCE BY AGENT. (a) Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other

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document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Lessor), independent
accountants and other experts selected by Agent. Agent shall be fully justified
in failing or refusing to take any action under any Basic Document unless it
shall first receive such advice or concurrence of the Required Noteholders,
Required Investors or Required Participants (as the case may be) as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Noteholders and Investors against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. Agent shall in all cases be fully protected in acting, or in
refraining from acting, under any Basic Document in accordance with a request
or consent of the Required Noteholders, Required Investors or Required
Participants (as the case may be) and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Noteholders
and Investors.

                  (b) For purposes of determining compliance with the
conditions referred to in SECTION 5, each Noteholder and Investor that has
executed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter either sent by
Agent to such Noteholder or Investor, as the case may be, for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to such Noteholder or Investor.

         19.6 NOTICE OF DEFAULT. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to Agent for the account of the Noteholders or Investors, unless Agent
shall have received written notice from a Noteholder or Investor, as the case
may be, or Lessor referring to this Agreement, describing such Lease Default or
Lease Event of Default and stating that such notice is a "notice of default."
Agent will notify the Noteholders and Investors of its receipt of any such
notice. Agent shall take such action with respect to such Default or Event of
Default as may be requested by the Required Noteholders in accordance with
SECTION 5 of the Credit Agreement or as may be requested by the Required
Noteholders in accordance with SECTION 8 of the Assignment Agreement; PROVIDED,
HOWEVER, that unless and until Agent has received any such request, Agent may
(but shall not be obligated to) take such action, or refrain from taking such

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action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Noteholders and Investors.

         19.7 CREDIT DECISIONS. Each Noteholder or Investor acknowledges that
it has, independently of each Agent-Related Person and each other Noteholder or
Investor, and based on such Noteholder's and Investor's review of the financial
information of Lessor, the Basic Documents (the terms and provisions of which
being satisfactory to such Noteholder or Investor, as the case may be) and such
other documents, information and investigations as such Noteholder or Investor,
as the case may be, has deemed appropriate, made its own credit decision to
make the Advance. Each Noteholder and Investor also acknowledges that it will,
independently of Agent and each other Noteholder and Investor, and based on
such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under any Basic Document.

         19.8 COPIES. Agent shall give prompt notice to each Noteholder and
Investor of each notice or request required or permitted to be given to Agent
by Lessor pursuant to the terms of this Agreement (unless concurrently
delivered to the Noteholders and Investors by Lessor). Agent will distribute to
each Noteholder and Investor each document or instrument received for its
account and copies of all other communications received by Agent from Lessor
for distribution to the Noteholders and Investors by Agent in accordance with
the terms of this Agreement.

SECTION 20.  TRANSACTION COSTS AND OTHER COSTS.

         Lessee shall pay all Transaction Costs pursuant to (i) SECTION 5.1(i)
on or prior to the Closing Date, (ii) the Fee Letter on the dates set forth
therein and (iii) in all other cases promptly upon demand. In addition, Lessee
shall pay or reimburse Lessor, the Investors, the Noteholders, the Agent, the
Collateral Agent, the Depositary Bank and the Trustee for all other
out-of-pocket costs and expenses (including counsel fees and expenses)
reasonably incurred in connection with: (a) the negotiation, preparation,
execution and delivery of the Basic Documents; (b) the initial syndication of
the Tranche B Loan; (c) entering into, or the giving or withholding of, any
future amendments, supplements, waivers or consents with respect to the Basic
Documents; (d) any Event of Loss or termination of the Lease or any other Basic
Document; (e) the negotiation and documentation of any restructuring or
"workout,"

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whether or not consummated, of any Basic Document; (f) the enforcement of the
rights or remedies under the Basic Documents; (g) any transfer by Lessor,
Investor or any Noteholder of any interest in the Basic Documents during the
continuance of a Lease Event of Default; (h) the performance by the Agent, the
Collateral Agent and the Depositary Bank of their respective obligations under
the Basic Documents, including the opening and maintenance of the Lessor
Account; (i) the performance by the Trustee of its obligations under the Basic
Documents, whether payable pursuant to fee arrangements entered into by Lessee
or any Participant or otherwise; and (j) the ongoing fees and expenses for
which Lessee is obligated under the Basic Documents.

SECTION 21.  MISCELLANEOUS.

         21.1 EFFECT OF WAIVER. No delay or omission to exercise any right,
power or remedy accruing to any party hereto upon any breach or default
hereunder or under any other Basic Document shall impair any such right, power
or remedy, nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein or of or in any similar breach or default
thereafter occurring, nor shall any single or partial exercise of any right,
power or remedy preclude any other or further exercise thereof, or the exercise
of any other right, power or remedy, nor shall any waiver of any single breach
or default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party hereto of any breach or default under this
Agreement or any other Basic Document must be specifically set forth in writing.

         21.2 SURVIVAL OF AGREEMENTS. All representations, warranties,
covenants, indemnities and agreements of the parties provided for in the Basic
Documents, and the obligations of the parties under any and all provisions
thereof, shall survive the execution and delivery and the termination or
expiration of this Agreement and any of the other Basic Documents, the transfer
of the interest in the Leased Equipment to or by Lessor as provided herein or
in any of the other Basic Documents (and shall not be merged into any
conveyance or transfer document), any disposition of any interest of Lessor in
the Leased Equipment, the purchase and sale of the Notes or Certificates,
payment therefor and any disposition thereof, the payment of the Advances and
any disposition thereof and shall be and continue in effect notwithstanding any
investigation made by any party hereto or to any of the other Basic

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Documents and the fact that any such party may waive compliance with any of
the other terms, provisions or conditions of any of the Basic Documents.

         21.3 APPLICABLE LAW. THIS AGREEMENT AND THE OTHER BASIC DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK, INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT
EXCLUDING ALL OTHER CHOICE OF LAWS AND CONFLICTS RULES OF SUCH STATE, EXCEPT AS
TO MATTERS RELATING TO PERFECTION AND THE EFFECT OF PERFECTION OR
NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREUNDER, WHICH SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, SECTION 9-103(1)(b) OF THE UCC.

         21.4 EFFECT AND MODIFICATION OF AGREEMENT. (a) This Agreement and the
other Basic Documents exclusively and completely state the rights of all
parties hereto and thereto with respect to the leasing of the Leased Equipment
and the other transactions contemplated by the Basic Documents and supersedes
all prior agreements, oral or written, with respect thereto.

                  (b) Any amendment, modification, termination or waiver of, or
supplement or consent to this Agreement, any other Basic Document or any of the
terms hereof or thereof (collectively, "AMENDMENTS") shall require the prior
written consent of all parties thereto or hereto, it being understood and
agreed that the consent of the Required Noteholders, if such Noteholders are
affected by such Amendment, shall be deemed to be the consent of the
Noteholders and the consent of at least 50% of the Investors affected by such
Amendment shall be deemed to be the consent of the Investors; PROVIDED,
HOWEVER, that Amendments with respect to administrative matters, which
Amendments have no adverse effect on a party hereto or thereto, shall not
require the consent of such party; PROVIDED, FURTHER that Amendments with
respect to the following matters shall require the prior written consent of
100% of the Noteholders affected by such Amendment and 100% of the Investors
affected by such Amendment:

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                           (i) modification of any of the provisions of this
         SECTION 21.4, change of the definition of "Required Investors,"
         "Required Noteholders" or "Required Participants," or modification or
         waiver of any provision of any Lease Financing Document requiring
         action by all of the Required Investors, Required Noteholders or
         Required Participants;

                           (ii) reduction in the amount or change in the time of
         payment of any Noteholder Amount, Investor Amount, Interest Amount or
         Yield Amount owing or payable on any Certificate or Note, as the case
         may be, or modification of any of the provisions of SECTION 3.10 hereof
         or SECTION 5 of the Trust Agreement;

                           (iii) reduction, modification, amendment or waiver
         of any indemnities in favor of any Investor or Noteholder;

                           (iv) reduction in the amount or change in the time
         of payment of Rent or the Termination Value;

                           (v) consent to any assignment of the Lease releasing
         Lessee from its obligations to pay Rent or any other amounts due under
         any of the Lease Financing Documents or change in the absolute and
         unconditional character of such obligations;

                           (vi) modification of any provision in any Basic
         Document regarding application of payments among Noteholders or
         Investors;

                           (vii) permission to the creation of any interest in
         or lien on the Trust Estate or any part thereof except as contemplated
         by the Lease Financing Documents, or depriving any Investor or any
         Noteholder of the benefit of the security interest and lien secured by
         the Trust Estate.

         21.5 NOTICES. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be by letter or facsimile (and in the case of a facsimile,
confirmed, which confirmation may be mechanical) and shall be deemed to have
been given (i) in the case of notice by letter, the earlier of when delivered
to the addressee by hand or courier if delivered on a Business Day and, if not
delivered on a Business Day, the first Business Day

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thereafter or on the third Business Day after depositing the same in the mails,
registered or certified mail, postage prepaid, return receipt requested,
addressed as provided on SCHEDULE I, and (ii) in the case of notice by
facsimile, when transmitted during business hours on a Business Day and, if not
transmitted during business hours on a Business Day, the first Business Day
thereafter, addressed as provided on SCHEDULE I, or to such other address as
any of the parties hereto may designate by written notice. Copies of all
notices given by facsimile shall be contemporaneously sent by overnight courier.

         21.6 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
Applicable Law; but if any provision of this Agreement is prohibited by or
invalid under Applicable Law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

         21.7 SUCCESSORS AND ASSIGNS; TRANSFERS. (a) This Agreement shall be
binding upon the parties hereto and their respective successors and assigns,
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns as permitted by and in accordance with the
terms of the Basic Documents. Except as expressly provided herein or in the
other Basic Documents, no party hereto may assign its interest herein without
the prior written consent of the other parties hereto.

                  (b) Lessee may not assign any of its respective rights and
obligations under any Basic Document except as expressly provided in the Basic
Documents.

                  (c) Any Investor which is a bank or other financial or
commercial lending institution may pledge its interest in the ordinary course
of its business (including, without limitation, to the Federal Reserve);
PROVIDED, that no transfer upon a foreclosure pursuant to such a pledge may
occur unless the other provisions of this SECTION 21.7 are complied with.

                  (d) Each Investor may assign, convey or otherwise transfer
all or any portion of its right, title or interest in, to or under any of the
Basic Documents or any Certificate upon compliance with subsections (a) through
(f) below PROVIDED,

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HOWEVER, that the restrictions set forth in this SECTION 21.7 shall not
apply to a participation, with respect to which SECTION 21.8 shall apply.

                  (e) REQUIRED NOTICE AND EFFECTIVE DATE. Any Investor desiring
to effect a transfer of its interest shall give written notice of each such
proposed transfer to Agent at least five (5) days prior to such proposed
transfer, setting forth the name of such proposed transferee, the percentage or
interest to be retained by such Investor, if any, and the date on which such
transfer is proposed to become effective. In the case of a transfer by an
Investor of its interest in the Trust, such Investor shall notify the Transfer
Agent and Certificate Registrar of such transfer and surrender its Trust
Certificate(s) for transfer pursuant to SECTION 4.07 of the Trust Agreement. In
the event of a transfer under this SECTION 21.7, any expenses incurred by the
transferee in connection with its review of the Basic Documents and its
investigation of the transactions contemplated thereby shall be borne by such
transferee or the relevant Investor, as they may determine, but shall not be
considered costs and expenses which Lessee is obligated to pay or reimburse.

                  (f) ASSUMPTION OF OBLIGATIONS. Any transferee pursuant to
this SECTION 21.7 shall have executed and delivered to Lessor a letter in
substantially the form of the Investor's Letter attached hereto as EXHIBIT E.
Upon the assumption by the transferee of the obligations of the transferring
Investor, as the case may be, under the Basic Documents, such obligations of
the transferor shall be proportionately released and reduced to the extent of
such transfer. Upon any such transfer as above provided, the transferee shall
be deemed to be bound by all obligations (whether or not yet accrued) under,
and to have become a party to, all Basic Documents to which its transferor was
a party, shall be deemed the pertinent "INVESTOR" for all purposes of the Basic
Documents and shall be deemed to have made that portion of the payments
pursuant to the Basic Documents previously made or deemed to have been made by
the transferor represented by the interest being conveyed; and each reference
herein and in the other Basic Documents to the pertinent "INVESTOR" shall
thereafter be deemed a reference to the transferee, to the extent of such
transfer, for all purposes. Not withstanding any transfer as provided in this
SECTION 21.7, the transferor shall be entitled to all benefits accrued and all
rights vested prior to such transfer, including, without limitation, rights to
indemnification under this Agreement or any other Basic Document. Upon any such
transfer, Lessor shall deliver to each Investor and Lessee an amended
Certificate Register, revised to reflect the relevant information for such new
Investor and the Investor Amount of such new

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Investor (and the revised Investor Amount of the transferor Investor if it
shall not have transferred its entire interest).

                  (g) EMPLOYEE BENEFIT PLANS. No Investor may make any such
assignment, conveyance or transfer to or in connection with any arrangement or
understanding in any way involving any employee benefit plan (or its related
trust), as defined in SECTION 3(3) of ERISA, or with the assets of any such
plan (or its related trust), as defined in SECTION 4975(e)(1) of the Code
(other than a governmental plan, as defined in SECTION 3(32) of ERISA), with
respect to which Lessee or such Investor, as the case may be, or any of their
Affiliates is a party in interest within the meaning of ERISA or a
"disqualified person" within the meaning of the Code.

                  (h) REPRESENTATIONS AND WARRANTIES. Notwithstanding anything
to the contrary set forth above, no Investor may assign, convey or transfer its
interest to any Person, unless such Person shall have delivered to Lessor and
Lessee a certificate confirming the accuracy of the representations and
warranties set forth in SECTION 10 with respect to such Person (other than as
such representation or warranty relates to the execution and delivery of Basic
Documents).

                  (i) FINANCIAL CONDITION OF TRANSFEREE. No transfer by an
Investor shall be effective against the other parties to this Agreement unless
the transferee is (A) a bank or other financial institution with a combined
capital, surplus and undivided profits of at least $50,000,000, or (B) any
subsidiary of such a bank, financial institution or corporation, provided that
such bank, financial institution or corporation furnishes a guaranty with
respect to the transferee's obligations as an Investor, or (C) an Affiliate of
such Investor, or (D) any financial institution consented to by Lessee, or (E)
any other entity, provided the transferee's obligations as an Investor, as the
case may be, are guaranteed by the transferor Investor.

                  (j) AMOUNTS. Any transfer of Certificates shall be in a
principal amount of at least $3,000,000; PROVIDED that the foregoing limitation
shall not apply to a Investor's transfer of the entire principal amount of such
Investor's Certificates.

         21.8 PARTICIPATIONS. Notwithstanding anything in SECTION 21.7 to the
contrary, each Investor (in such case, the "ORIGINATOR") may at any time sell
to one or more commercial banks or other financial institutions not Affiliates
of Lessee (an "INVESTOR PARTICIPANT") participating interests in any
Certificates hereunder and under

                                       94
<PAGE>

the other Basic Documents; PROVIDED that (i) the Originator's obligations under
this Agreement and the other Basic Documents shall remain unchanged, (ii) the
Investor Participant represents and warrants, in writing, to such Investor, for
the benefit of Lessor, the other Investors and Lessee, that no part of the
funds used by it to acquire an interest in the Certificates constitutes assets
of any Plan or its related trust, (iii) Lessee shall continue to deal solely
and directly with such Investor in connection with such Investor's rights and
obligations under this Agreement and under the other Basic Documents, (iv) no
Investor shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Basic Document, except to the
extent such participation, consent or waiver would require unanimous consent of
the Investors as described in SECTION 21.4. In the case of any such
participation, the Investor Participant shall be entitled to the benefits of
SECTION 20 as though it were also an Investor hereunder, and if amounts
outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of a Lease
Event of Default, each Investor Participant shall be deemed to have the right
of set-off in respect of its participating interest in amounts owing under this
Agreement or the other Basic Documents to the same extent as if the amount of
its participating interest were owing directly to it as an Investor under this
Agreement and such Basic Documents.

         21.9 PARTIES IN INTEREST. Except as expressly provided herein, none of
the provisions of this Agreement is intended for the benefit of any Person
except the parties hereto, their successors and permitted assigns.

         21.10 AGENT. Agent shall have no right, power, obligation, liability,
responsibility or duty under this Agreement or the other Basic Documents other
than those applicable to all Investors and Noteholders as such. Without limiting
the foregoing, Agent shall not have, and shall not be deemed to have, any
fiduciary relationship with any Investor or Noteholder, nor shall Agent be
deemed to be acting as a trustee or in any similar capacity. Each Investor and
Noteholder acknowledges that it has not relied, and will not rely, on Agent in
deciding to enter into this Agreement or the other Basic Documents or in taking
or not taking any action hereunder or there under.

         21.11 BROKERS. Each of Lessee, each Noteholder, each Investor and
Lessor represents to the others that it has not retained or employed any broker,
finder or

                                       95

<PAGE>

financial advisor to act on its behalf in connection with this Agreement or
the other Basic Documents, nor has it authorized any broker, finder or
financial adviser retained or employed by any other Person so to act, nor has
it incurred any fees or commissions to which Lessor, any Investor or any
Noteholder might be subjected by virtue of their entering into the
transactions contemplated by the Basic Documents. Any Person who is in breach
of this representation shall indemnify and hold the other Persons harmless
from and against any liability arising out of such breach of this
representation.

         21.12 LIMITATION OF LIABILITY. It is expressly understood and agreed
by the parties hereto that (a) except as otherwise expressly provided herein,
this Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally but solely as Trustee of the Trust, in the exercise
of the power and authority conferred and vested in it under the Trust
Agreement; (b) except as otherwise expressly provided herein, each of the
representations, undertakings and agreements herein made on the part of Lessor
is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Trust; (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, individually or personally
(except to the extent specifically agreed in its individual capacity), to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
other Person claiming by, through or under this Agreement; and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of Lessor or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by Lessor under this Agreement or any of the other Basic Documents.

         21.13 REPRODUCTION OF DOCUMENTS. This Agreement and all other Basic
Documents, all documents constituting Schedules or Exhibits hereto or thereto,
and all documents relating hereto or thereto received by Lessee, Guarantor,
Lessor, any Investor or any Noteholder, including: (a) consents, waivers and
modifications that may hereafter be executed; (b) documents received by the
Investors, Noteholders or Lessor in connection with the receipt and/or
acquisition of the Leased Equipment; and (c) financial statements,
certificates, and other information previously or hereafter furnished to
Lessor, any Investor or any Noteholder may be reproduced by the party receiving
the same by any photographic, photostatic, microfilm, mi-

                                       96

<PAGE>

cro-card, miniature photographic or other similar process. Each of Lessee,
Lessor, each Investor and each Noteholder agrees and stipulates that, to the
extent permitted by law, any such reproduction shall be admissible in evidence
as the original itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such reproduction was made
by such party in the regular course of business) and that, to the extent
permitted by law, any enlargement, facsimile, or further reproduction of such
reproduction shall likewise be admissible in evidence.

         21.14 CONSIDERATION FOR CONSENTS TO WAIVERS AND AMENDMENTS. Lessee
hereby agrees that it will not, and that it will not permit any of its
Affiliates to, offer or give any consideration or benefit of any kind whatsoever
to any Investor or Noteholder in connection with, in exchange for, or as an
inducement to, such Investor's or Noteholder's consent to any waiver in respect
of, any modification or amendment of, any supplement to, or any other consent
or approval under, any Basic Document unless such consideration or benefit is
offered ratably to all Investors and Noteholders, as the case may be.

         21.15 SUBMISSION TO JURISDICTION; VENUE. Each of Lessee, Guarantor,
Lessor, Trustee, Trust Company, each Noteholder, each Investor, the Collateral
Agent and Agent irrevocably and unconditionally:

                  (a) submits for itself and its property in any legal action
or proceeding relating to this Agreement or any other Basic Document, 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
sitting in the Borough of Manhattan, the courts of the United States of America
for the Southern District of New York, and appellate courts from any thereof;

                  (b) consents that any such action or proceedings may be
brought to such courts, and waives 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 such
Person at its address set

                                       97

<PAGE>

forth on SCHEDULE I or at such other address of which the other Persons have
been notified pursuant to SECTION 21.5; and

                  (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.

         21.16 AGENT FOR SERVICE OF PROCESS. Each of Lessee, Guarantor and
Midwest Peaker hereby irrevocably designates, appoints and empowers CT
Corporation System with offices on the date hereof at 111 Eighth Ave., NY, NY
10011, as its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of any and all
legal process, summons, notices and documents which may be served in any action
or proceeding brought against it pursuant to any of the Basic Documents. If for
any reason such designee, appointee and agent shall cease to be available to
act as such, each of Lessee and Guarantor agrees to designate a new designee,
appointee and agent in New York City on the terms and for the purposes of this
SECTION 21.16 satisfactory to the Investors and Noteholders.

         21.17 JURY TRIAL. EACH OF LESSEE, GUARANTOR, LESSOR, TRUSTEE, TRUST
COMPANY, EACH NOTEHOLDER, EACH INVESTOR, THE COLLATERAL AGENT AND AGENT WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT OR ANY OTHER BASIC DOCUMENT OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER BASIC
DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.

         21.18 CAPTIONS; TABLE OF CONTENTS. Section captions and the table of
contents used in this Agreement (including the Schedules, Exhibits, Appendixes
and Annexes hereto) are for convenience of reference only and shall not affect
the construction of this Agreement.

                                       98

<PAGE>

         21.19 SCHEDULES; EXHIBITS; APPENDIX. The Schedules, Exhibits and
Appendix hereto, along with all attachments referenced in any of such items,
are incorporated herein by reference and made a part hereof.

         21.20 REFERENCES TO SECTIONS, EXHIBITS AND SCHEDULES. Any reference to
a section, exhibit or schedule in any Basic Document shall be to a section,
exhibit or schedule of such Basic Document unless otherwise specified.

                                       99

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                        EDISON MISSION ENERGY, as Guarantor

                        By: /s/ John P. Finneran, Jr.
                            ------------------------------------
                        Name: John P. Finneran, Jr.
                        Title:  Vice President

                        MIDWEST GENERATION, LLC, as Lessee

                        By: /s/ John P. Finneran, Jr.
                            ------------------------------------
                        Name: John P. Finneran, Jr.
                        Title: Vice President

                        EME/CDL TRUST, as Lessor
                        By: Wilmington Trust Company, not in its
                            individual capacity, but solely as Trustee

                        By: /s/ James P. Lawler
                            ------------------------------------
                        Name:  James P. Lawler
                        Title:  Vice President

                        MIDWEST PEAKER HOLDINGS, INC., as
                        Tranche A Noteholder

                        By:  /s/ John P. Finneran
                            ------------------------------------
                        Name: John P. Finneran, Jr.
                        Title:  Vice President

<PAGE>

                        CITICORP DEL-LEASE, INC., as Tranche B
                        Noteholder

                        By:  /s/ Julie M. Chin
                            ------------------------------------
                        Name:  Julie M. Chin
                        Title:  Vice President

                        CITICORP DEL-LEASE, INC., as Investor

                        By:  /s/ Julie M. Chin
                            ------------------------------------
                        Name:  Julie M. Chin
                        Title:  Vice President

                        WILMINGTON TRUST COMPANY, as Trust
                        Company

                        By:  /s/ Kathleen A. Pedelini
                            ------------------------------------
                        Name: Kathleen A. Pedelini
                        Title: Administrative Account Manager

                        WILMINGTON TRUST COMPANY, not in its
                        individual capacity, except as expressly provided
                        herein, but solely as Trustee

                        By: /s/ KATHLEEN A. PEDELINI
                            ------------------------------------
                        Name:  Kathleen A. Pedelini
                        Title: Administrative Account Manager

<PAGE>

                        CITICORP NORTH AMERICA, INC., as Agent

                        By:  /s/ Julie M. Chin
                            ------------------------------------
                        Name:  Julie M. Chin
                        Title:  Vice President

                        CITICORP NORTH AMERICA, INC.,
                        as Collateral Agent

                        By:  /s/ Julie M. Chin
                            ------------------------------------
                        Name:  Julie M. Chin
                        Title:  Vice President

<PAGE>

                                   SCHEDULE I
                                       TO
                             PARTICIPATION AGREEMENT

1.       LESSOR

         Address for all communications (except wire transfers):

                  EME/CDL Trust
                  c/o Wilmington Trust Company
                  Rodney Square North
                  1100 North Market Street
                  Wilmington, DE  19890-0001

         Address for wire transfers:

                  Bank:    Wilmington Trust Company
                           Wilmington, Delaware

                  ABA Routing #: 031100092
                  Account #:     52088-0
                  Attn:          Mike Oller

2.       LESSEE

         Address for all communications (except wire transfers):

                  One Financial Place
                  440 South LaSalle Street, Suite 3500
                  Chicago, Illinois 60605
                  Attn: President
                           WITH A COPY TO:
                  Edison Mission Midwest Holdings Co.
                  18101 Von Karman Avenue, Suite 1700
                  Irvine, California 92612
                  Attn: General Counsel

                                    Sch. I-1
<PAGE>

         Address for wire transfers:

                  Bank:    Bank of America
                           Concord, California

                  ABA Routing #:    121000358
                  Account #:        12335-32776
                  Acct Party:       Midwest Generation, LLC
                  Attn:             Debbie Waterdown

3.       GUARANTOR

         Address for all communications (except wire transfers):

                  18101 Von Karman Avenue
                  Suite 1700
                  Irvine, CA  92616
                  Attention:  General Counsel
                  Telephone No.: (949) 752-5588

         Address for wire transfers:

                  Bank: Bank of America
                        Concord, California

                  ABA Routing #:    121000358
                  Account #:        11013-01596
                  Acct Party:       Edison Mission Energy
                  Attn:             Debbie Waterdown

4.       NOTEHOLDERS

A.       MIDWEST PEAKER HOLDINGS, INC.

         Address for all communications (except wire transfers):

                  18101 Von Karman Ave.

                                    Sch. I-2
<PAGE>

                  Suite 1700
                  Irvine, CA 92612
                  Attention: General Counsel
                  Telecopier No.:  (949) 752-5588

         Address for wire transfers:

                  Bank:  Bank of America
                         Concord, CA

                  ABA Routing #:    121000358
                  Account #:        12338-33939
                  Attn:             Debbie Waterdown

B.       CITICORP DEL-LEASE, INC.

         Address for all communications (except wire transfers):

                  989 E. Hillsdale Blvd.
                  Suite 300
                  Foster City, CA 94404-2401
                  Attention:  Contract Services
                  Tel No. 650-573-1200
                  Fax. No. 650-573-5669

         Address for wire transfers:

                  Bank: Citibank, NA
                  ABA Routing #: 021000089
                  Account #: 3846-9701
                  Notify:  Colleen Pollard
                  Reference: Midwest Generation/EME

5.       INITIAL INVESTOR

         CITICORP DEL-LEASE, INC.

                                    Sch. I-3
<PAGE>

         Address for all communications (except wire transfers):

                  989 E. Hillsdale Blvd.
                  Suite 300
                  Foster City, CA 94404-2401
                  Attention:  Contract Services
                  Tel No. 650-573-1200
                  Fax. No. 650-573-5669

         Address for wire transfers:

                  Bank: Citibank, NA
                  ABA Routing #: 021000089
                  Account #: 3846-9701
                  Notify:  Colleen Pollard
                  Reference: Midwest Generation/EME
6.       AGENT

         Address for all communications (except wire transfers):

                  989 E. Hillsdale Blvd.
                  Suite 300
                  Foster City, CA 94404-2401
                  Attention:  Contract Services
                  Tel No. 650-573-1200
                  Fax. No. 650-573-5669

         Address for wire transfers:

                  Bank: Citibank, NA
                  ABA Routing #: 021000089
                  Account #: 3846-9701
                  Notify:  Colleen Pollard
                  Reference: Midwest Generation/EME

                                    Sch. I-4
<PAGE>

7.       TRUSTEE

         Address for all communications (except wire transfers):

                  c/o Wilmington Trust Company
                  Rodney Square North
                  1100 North Market Street
                  Wilmington, DE  19890-0001

         Address for wire transfers:

                  Wilmington Trust Company
                  Wilmington, Delaware
                  ABA No. 031100092
                  For credit to the account of
                  EME/CDL Trust
                  Account No. 52088-0 (Principal)
                  Attn: Mike Oller

8.       TRUST COMPANY

         Address for all communications (except wire transfers):

                  c/o Wilmington Trust Company
                  Rodney Square North
                  1100 North Market Street
                  Wilmington, DE  19890-0001

         For WTC individually (Fees&Expenses):

                  Wilmington Trust Company
                  Wilmington, Delaware
                  ABA No. 031100092
                  For credit to the account of
                  Corporate Trust Administration - Income Account
                  Account No. 9974-0 (Income)
                  Attn: Irene Lennon
                  Reference: Trustee Fees and Expenses

                                    Sch. I-5
<PAGE>

                  Transaction Name: EME/CDL Trust

9.       COLLATERAL AGENT

         Address for all communications (except wire transfers):

                  989 E. Hillsdale Blvd.
                  Suite 300
                  Foster City, CA 94404-2401
                  Attention:  Contract Services
                  Tel No. 650-573-1200
                  Fax. No. 650-573-5669

         Address for wire transfers:

                  Bank: Citibank, NA
                  ABA Routing #: 021000089
                  Account #: 3846-9701
                  Notify:  Colleen Pollard
                  Reference: Midwest Generation/EME

                                    Sch. I-6
<PAGE>

                                  SCHEDULE II
                                       TO
                            PARTICIPATION AGREEMENT

                               APPLICABLE MARGIN

                                   [TO COME]

                                    Sch. II-1
<PAGE>

                                                                    EXHIBIT A-1
                                                                             TO
                                                        PARTICIPATION AGREEMENT

                                   [FORM OF]
                                  BILL OF SALE

         Midwest Generation, LLC, a Delaware limited liability company
("SELLER"), is the owner of certain items of Leased Equipment as defined in the
Participation Agreement, dated as of June 23, 2000 among MIDWEST GENERATION,
LLC, a Delaware limited liability company, as lessee ("LESSEE"), EDISON MISSION
ENERGY, a California corporation, as guarantor ("GUARANTOR"), EME/CDL TRUST, a
trust created under the laws of the State of Delaware, as lessor ("LESSOR"),
THE INVESTORS PARTY TO THE TRUST AGREEMENT, as Investors, WILMINGTON TRUST
COMPANY, as Trustee under the Trust Agreement, THE PERSONS LISTED AS
NOTEHOLDERS ON SCHEDULE I THERETO, as Noteholders, CITICORP NORTH AMERICA, INC.
as Administrative Agent for the Noteholders and Investors (the "AGENT") and
CITICORP NORTH AMERICA, INC., as Collateral Agent for the Noteholders (the
"COLLATERAL AGENT"). Capitalized terms used but not otherwise defined herein
shall have the meaning set forth in Appendix 1 of the Participation Agreement.

         [For valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Seller hereby sells, grants, conveys, transfers and assigns
all of its right, title and interest, whether now owned or hereafter acquired,
to the Leased Equipment described on Attachment A hereto to Lessor.]

         Seller warrants to Lessor, its successors and assigns, that there is
conveyed to Lessor good title to the Leased Equipment covered hereby, free and
clear of all liens, claims, rights or encumbrances of others (except the rights
of Seller pursuant to the Lease and Permitted Liens) and Seller will warrant and
defend such title forever against all claims and demands whatsoever.

         The rights and obligations of the parties under this agreement and
each other Basic Document shall be governed by, and construed and interpreted
in accordance with, the laws of New York, including section 5-1401 of the New
York general obligations law but excluding all other choice of laws and
conflicts rules of such State, except as to

                                     A1-1
<PAGE>

matters relating to perfection and the effect of perfection or
non-perfection of the security interest created hereunder, which shall be
governed by, and construed in accordance with, section 9-103(1)(b) of the UCC.

                                     A1-2
<PAGE>

         IN WITNESS WHEREOF, Seller has caused this BILL OF SALE to be executed
and delivered by one of its duly authorized officers on _______ __, 20__.

                                        MIDWEST GENERATION, LLC

                                        By:
                                        Name:
                                        Title:

                                     A1-3
<PAGE>

                                                                    EXHIBIT A-2
                                                                             TO
                                                        PARTICIPATION AGREEMENT

                                   [FORM OF]
                            ACCEPTANCE CERTIFICATE

                                    [Date]

TO:      Lessor, the Investors and the Noteholders, pursuant to the
         Participation Agreement (the "PARTICIPATION AGREEMENT") dated as of
         June 23, 2000 among MIDWEST GENERATION, LLC, a Delaware limited
         liability company, as lessee ("LESSEE"), EDISON MISSION ENERGY, a
         California corporation, as guarantor ("GUARANTOR"), EME/CDL TRUST, a
         trust created under the laws of the State of Delaware, as lessor
         ("LESSOR"), THE INVESTORS PARTY TO THE TRUST AGREEMENT, as
         Investors, WILMINGTON TRUST COMPANY, as Trustee under the Trust
         Agreement, THE PERSONS LISTED AS NOTEHOLDERS ON SCHEDULE I THERETO,
         as Noteholders, CITICORP NORTH AMERICA, INC. as Administrative Agent
         for the Noteholders and Investors (the "AGENT") and CITICORP NORTH
         AMERICA, INC., as Collateral Agent for the Noteholders (the
         "COLLATERAL AGENT") (capitalized terms used herein shall have the
         meanings ascribed thereto in Appendix 1 to the Participation
         Agreement).

FROM:    Lessee

         Please refer to the above-captioned Participation Agreement. Lessee
certifies to you as follows:

         1. That it has inspected, received, approved and accepted delivery of
the Leased Equipment on Attachment A hereto as required under the Lease.

                                     A2-1
<PAGE>

         2. That such Leased Equipment is subject to and governed by all of the
provisions of the Lease and the other Basic Documents.

         3. That its representations and warranties set forth in SECTION 8 of
the Participation Agreement are true and correct as of the date hereof as if
such representations and warranties were set forth herein in full.

         IN WITNESS WHEREOF, Lessee has caused this ACCEPTANCE CERTIFICATE to
be duly executed and delivered by one of its officers hereunto duly authorized
this ______ ____ day of ________, 20__.

                                        MIDWEST GENERATION, LLC
                                        By:
                                        Name:
                                        Title:

                                     A2-2
<PAGE>

                                                                    EXHIBIT B-1
                                                                             TO
                                                        PARTICIPATION AGREEMENT

                                   [FORM OF]
                    LESSEE/GUARANTOR OFFICER'S CERTIFICATE

         Pursuant to the Participation Agreement (the "PARTICIPATION
AGREEMENT") dated as of June 23, 2000 among MIDWEST GENERATION, LLC, a Delaware
limited liability company, as lessee ("LESSEE"), EDISON MISSION ENERGY, a
California corporation, as guarantor ("GUARANTOR"), EME/CDL TRUST, a trust
created under the laws of the State of Delaware, as lessor ("LESSOR"), THE
INVESTORS PARTY TO THE TRUST AGREEMENT, as Investors, WILMINGTON TRUST COMPANY,
as Trustee under the Trust Agreement, THE PERSONS LISTED AS NOTEHOLDERS ON
SCHEDULE I THERETO, as Noteholders, CITICORP NORTH AMERICA, INC. as
Administrative Agent for the Noteholders and Investors (the "AGENT") and
CITICORP NORTH AMERICA, INC., as Collateral Agent for the Noteholders (the
"COLLATERAL AGENT"). I, _______________, _______________ of [Lessee/Guarantor],
do hereby certify as follows (capitalized terms used herein shall have the
meanings ascribed thereto in Appendix 1 to the Participation Agreement):

         1. The representations and warranties of [Lessee/Guarantor] contained
in the Participation Agreement and other Basic Documents to which it is a party
are true, correct and complete in all material respects on and as of the date
hereof with the same effect as if such representations and warranties had been
made on and as of the date hereof (unless stated to be given as of an earlier
date, in which case such representation or warranty shall be true and correct
only as of such earlier date).

         2. [Lessee/Guarantor] has performed all material agreements on its part
required to be performed under the Participation Agreement and the other Basic
Documents to which it is a party on or prior to the date hereof.

         3. There exists on the date hereof no Lease Default or Lease Event
of Default under the Lease or default under the Guaranty, as the case may
be, except for Lease Defaults or Lease Events of Default under the Lease or
defaults under the Guaranty, as the case may be which would not reasonably be
expected to result in a Material Adverse Effect with respect to
[Lessee/Guarantor].

                                     B1-1
<PAGE>

         IN WITNESS WHEREOF, I have signed my name this _____ day of
_____________, 20__.

                                        [LESSEE/GUARANTOR]

                                        By:
                                        Name:
                                        Title:

                                     B1-2
<PAGE>

                                                                     EXHIBIT B-2
                                                                              TO
                                                         PARTICIPATION AGREEMENT

                                   [FORM OF]
                    LESSEE/GUARANTOR SECRETARY'S CERTIFICATE

         The undersigned, _________________, [Assistant] Secretary of
[Lessee/ Guarantor], a ______ [limited liability company/corporation]
[("LESSEE"/"GUARANTOR")], pursuant to the Participation Agreement (the
"PARTICIPATION AGREEMENT") dated as of June 23, 2000 among MIDWEST GENERATION,
LLC, a Delaware limited liability company, as lessee ("LESSEE"), EDISON MISSION
ENERGY, a California corporation, as guarantor ("GUARANTOR"), EME/CDL TRUST, a
trust created under the laws of the State of Delaware, as lessor ("LESSOR"),
THE INVESTORS PARTY TO THE TRUST AGREEMENT, as Investors, WILMINGTON TRUST
COMPANY, as Trustee under the Trust Agreement, THE PERSONS LISTED AS
NOTEHOLDERS ON SCHEDULE I THERETO, as Noteholders, CITICORP NORTH AMERICA, INC.
as Administrative Agent for the Noteholders and Investors (the "AGENT") and
CITICORP NORTH AMERICA, INC., as Collateral Agent for the Noteholders (the
"COLLATERAL AGENT") does hereby certify as follows (capitalized terms used
herein shall have the meanings ascribed thereto in Appendix 1 to the
Participation Agreement):

         1. Attached hereto as EXHIBIT A is a true, correct and complete copy of
[Lessee's/Guarantor's] [Certificate of Formation/Certificate of Incorporation],
as amended and in effect on the date hereof, certified by the Secretary of
State of the State of [its formation/incorporation].

         2. Attached hereto as EXHIBIT B is a true, correct and complete copy of
[Lessee's/Guarantor's] [Operating Agreement/Articles of Incorporation and
By-Laws], as amended and in effect on the date hereof, and such [Operating
Agreement/Articles of Incorporation and Bylaws] have been in full force and
effect since [_________], [19/20__] without modification or amendment.

                                     B2-1
<PAGE>

         3. Attached hereto as EXHIBIT C are true, correct and complete copies
of all resolutions adopted by the [Managers/Board of Directors] (and
shareholders) of [Lessee/Guarantor] relating to the [Lease/Guaranty] and the
other Basic Documents to which [Lessee/Guarantor] is a party, which resolutions
have not been amended or rescinded and are in full force and effect on the date
hereof.

         4. No proceeding for merger, consolidation, liquidation,
reorganization or dissolution of [Lessee/Guarantor] or the sale of all or
substantially all of its assets is pending or contemplated.

         5. The following persons are on the date hereof duly qualified and
acting officers of [Lessee/Guarantor], duly elected or appointed to the offices
set forth beside their respective names and signatures, and each such person
who, as an officer of [Lessee/Guarantor], signed the [Lease/Guaranty], any of
the other Basic Documents or any other document delivered before or on the date
hereof in connection with such agreements and documents and the transactions
contemplated therein was, at the respective times of such signing and delivery,
and is now duly elected or appointed, qualified and acting as such officer, and
the signatures of such persons appearing on such documents are their genuine
signatures:

       NAME         OFFICE             SIGNATURE
       ----         ------             ---------
       _______      _________          _____________

       _______      _________          _____________

       _______      _________          _____________

                                     B2-2
<PAGE>

         IN WITNESS WHEREOF, I have signed my name this _____ day of
_____________, 20__.

                                        [LESSEE/GUARANTOR]

                                        By:
                                        Name:
                                        Title:  [Assistant] Secretary

         I, ___________________, [Vice] President of [Lessee/Guarantor], hereby
certify that ____________________ __ is on the date hereof the duly elected,
qualified and acting [Assistant] Secretary of [Lessee/Guarantor], and that the
signature set forth above is such person's true and correct signature.

Dated:  _________________, 20__

                                        [LESSEE/GUARANTOR]

                                        By:
                                        Name:
                                        Title:  [Vice] President

                                     B2-3
<PAGE>

                                                                    EXHIBIT C-1
                                                                             TO
                                                        PARTICIPATION AGREEMENT

                                   [FORM OF]
                  OPINION OF COUNSEL TO LESSEE AND GUARANTOR

                                   [TO COME]

                                     C1-1
<PAGE>

                                                                    EXHIBIT C-2
                                                                             TO
                                                        PARTICIPATION AGREEMENT

                                   [FORM OF]
                      OPINION OF COUNSEL TO NOTEHOLDERS

                                   [TO COME]

                                     C2-1
<PAGE>

                                                                    EXHIBIT C-3
                                                                             TO
                                                        PARTICIPATION AGREEMENT

                                   [FORM OF]
                     OPINION OF SPECIAL COUNSEL TO TRUSTEE

                                   [TO COME]

                                     C2-2
<PAGE>

                                                                    EXHIBIT C-4
                                                                             TO
                                                        PARTICIPATION AGREEMENT

                                   [FORM OF]
              OPINION OF ILLINOIS COUNSEL TO LESSEE AND GUARANTOR

                                   [TO COME]

                                     C2-3
<PAGE>

                                                                     EXHIBIT C-5
                                                                              TO
                                                         PARTICIPATION AGREEMENT

                                   [FORM OF]
              OPINION OF FERC COUNSEL TO LESSEE AND GUARANTOR

                                   [TO COME]

                                     C2-4
<PAGE>

                                                                      EXHIBIT D
                                                                             TO
                                                        PARTICIPATION AGREEMENT

                                 [FORM OF]
                              ADVANCE REQUEST

                                   [Date]

TO:       Agent, Collateral Agent, the Investors and the Noteholders, pursuant
          to the Participation Agreement (the "PARTICIPATION AGREEMENT") dated
          as of June 23, 2000 among MIDWEST GENERATION, LLC, a Delaware limited
          liability company, as lessee ("LESSEE"), EDISON MISSION ENERGY, a
          California corporation, as guarantor ("GUARANTOR"), EME/CDL TRUST, a
          trust created under the laws of the State of Delaware, as lessor
          ("LESSOR"), THE INVESTORS PARTY TO THE TRUST AGREEMENT, as Investors,
          WILMINGTON TRUST COMPANY, as Trustee under the Trust Agreement, THE
          PERSONS LISTED AS NOTEHOLDERS ON SCHEDULE I THERETO, as Noteholders,
          CITICORP NORTH AMERICA, INC. as Administrative Agent for the
          Noteholders and Investors (the "AGENT") and CITICORP NORTH AMERICA,
          INC., as Collateral Agent for the Noteholders (the "COLLATERAL AGENT")
          capitalized terms used herein shall have the meanings ascribed
          thereto in Appendix 1 to the Participation Agreement).

FROM:     Lessor, at the direction of the Lessee

RE:       FINANCIAL CLOSING

                                     D - 1
<PAGE>

22.      This Advance Request is hereby delivered by Lessor (on the basis of
         information provided by Lessee) pursuant to SECTION 5.1(m) of the
         Participation Agreement.

23.      The Closing Date is scheduled for ________________, 20__ .

24.      The amounts of the Advances are as follows:

                  Tranche A Loan: $____________________
                  Tranche B Loan: $____________________
                  Investor Contributions: $ ___________________

4.       The Advances are [LIBO Rate Advances/Alternate Base Rate Advances].

5        Advances shall be sent by wire transfer as follows:

         a.       Each Noteholder or Investor, as the case may be, shall
                  transfer its respective Advance to the following account of
                  Lessor:

                           Bank:
                           ABA Routing #:
                           Account #:
                           Reference:

         b.       Lessee hereby instructs Lessor to distribute the funds as
                  follows:

                           [information to be provided by Lessee]

6.       All of the costs being funded pursuant to this Advance Request relate
         to the acquisition of the Leased Equipment subject to the Lease and the
         payment of Transaction Costs and all moneys advanced to Lessee
         pursuant to this Advance Request will be applied by Lessee pursuant to
         the Participation Agreement and the other Basic Documents.

7.       In connection with the requested Advances, the Lessee hereby represents
         and warrants to you as follows:

                                     D - 2
<PAGE>
         (a)      The aggregate amount of the Advances will be applied as
                  follows:

                  $_______________ will be applied to the acquisition of the
                  Leased Equipment; and

                  $_______________ will be applied to the payment of Transaction
                  Costs.

         (b)      On the Closing Date, no Lease Default or Lease Event of
                  Default has occurred and is continuing and no Lease Default or
                  Lease Event of Default will occur as a result of, or after
                  giving effect to, the Advances requested hereby.

         (c)      All of the conditions precedent set forth in SECTION 5.1 of
                  the Participation Agreement have been satisfied or waived.

                           EME/CDL TRUST

                           By:      Wilmington Trust Company, not
                                    in its individual capacity by
                                    solely as trustee of EME/CDL
                                    Trust, a Delaware business
                                    trust

                           By:_________________________
                           Name:_______________________
                           Title:________________________

                           MIDWEST GENERATION, LLC

                           By:_________________________
                           Name:_______________________
                           Title:________________________

                                     D - 3
<PAGE>

                                                                      EXHIBIT E
                                                                             TO
                                                        PARTICIPATION AGREEMENT

                                    [FORM OF]
                                 INVESTORS LETTER

[Name and Address of Investor]
Re:      EME/CDL TRUST
Attn:    Corporate Trust Department

Ladies and Gentlemen:

         Capitalized terms used in this letter and not otherwise defined herein
shall have the meanings assigned thereto in that certain Participation Agreement
(the "PARTICIPATION AGREEMENT"), dated as of June 23, 2000 among MIDWEST
GENERATION, LLC, a Delaware limited liability company, as lessee ("LESSEE"),
EDISON MISSION ENERGY, a California corporation, as guarantor ("GUARANTOR"),
EME/CDL TRUST, a trust created under the laws of the State of Delaware, as
lessor ("LESSOR"), THE INVESTORS PARTY TO THE TRUST AGREEMENT, as Investors,
WILMINGTON TRUST COMPANY, as Trustee under the Trust Agreement, THE PERSONS
LISTED AS NOTEHOLDERS ON SCHEDULE I THERETO, as Noteholders, CITICORP NORTH
AMERICA, INC. as Administrative Agent for the Noteholders and Investors (the
"AGENT") and CITICORP NORTH AMERICA, INC., as Collateral Agent for the
Noteholders (the "COLLATERAL AGENT")(capitalized terms used herein shall have
the meanings ascribed thereto in Appendix 1 to the Participation Agreement).
The undersigned has agreed to purchase the interest of ________________ as an
Investor under the Participation Agreement and the other Basic Documents (as
defined therein), representing an Investor's Amount of (amount) Dollars
($________) (the "INTEREST"), and desires that Lessor authenticate and deliver
to the undersigned and to each Lessor an amended Certificate Register
evidencing the Investor's Amount of the undersigned pursuant to SECTION 21.7(f)
of the Participation Agreement. The undersigned hereby represents and warrants
as of the date hereof to the addressees hereof as follows:

                                    E - 1
<PAGE>
                  (a) The undersigned is not (i) an "employee benefit plan" (or
         related trust) as defined in SECTION 3(3) of ERISA, which is subject
         to Title I of ERISA, (ii) a "plan" (or related trust) as defined in
         SECTION 4975(e)(1) of the Code, or an entity deemed to hold "plan
         assets" within the meaning of 29 C.F.R. Section 2510.3-101 of any such
         employee benefit plan or plan, and the acquisition of the undersigned
         of the Interest will not give rise to a nonexempt prohibited
         transaction under SECTION 406(a) of ERISA or SECTION 4975(c)(1)(A)-(D)
         of the Code;

                  (b) The Interest is being acquired by the undersigned for
         investment and not with a view to the resale or distribution of such
         Interest or any part thereof, but without prejudice, however, to the
         right of the undersigned at all times to sell or otherwise dispose of
         all or any part of such Interest under a registration available under
         the Securities Act or under an exemption from such registration
         available under such Act, it being understood that (subject to SECTION
         21.7 of the Participation Agreement) the disposition by the undersigned
         of the Interest to be purchased by the undersigned shall, at all times,
         remain entirely within its control; and

                  (c) The undersigned agrees to treat the Interest for federal,
         state and local income and franchise tax purposes as indebtedness of
         Lessee.

         The undersigned hereby advises you of the following administrative
details with respect to the Interest:

                  1. Address for Notices: [          ].

                  2. Payment Instructions: [           ].

                                        Very truly yours,

                                        By:
                                        Name:
                                        Title:

                                    E - 2
<PAGE>

                                                                      EXHIBIT F
                                                                             TO
                                                        PARTICIPATION AGREEMENT

                                   [FORM OF]
                        CONTINUATION/CONVERSION NOTICE

[_________________________], as Agent

Attention:        [_________]

                  MIDWEST GENERATION SYNTHETIC LEASE

Ladies and Gentlemen:

         This Continuation/Conversion Notice is delivered to you pursuant to
SECTION 3.6 of the Participation Agreement, dated as of June 23, 2000
(together with all amendments, supplements and other modifications, if any,
from time to time thereafter made thereto, the "PARTICIPATION AGREEMENT"),
among MIDWEST GENERATION, LLC, as lessee (the "LESSEE"), EDISON MISSION
ENERGY, as guarantor (the "GUARANTOR"), EME/CDL TRUST, a Delaware business
trust (the "LESSOR"), THE INVESTORS PARTY TO THE TRUST AGREEMENT, as
Investors, WILMINGTON TRUST COMPANY, as Trustee under the Trust Agreement, THE
PERSONS LISTED AS NOTEHOLDERS ON SCHEDULE I THERETO, as Noteholders, CITICORP
NORTH AMERICA, INC. as Administrative Agent for the Noteholders and Investors
(the "AGENT") and CITICORP NORTH AMERICA, INC., as Collateral Agent for the
Noteholders (the "COLLATERAL AGENT"). Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided in
Appendix I to the Participation Agreement.

         The Lessor, at the direction of the Lessee, hereby requests that on
__________, ____,

                                    F - 1
<PAGE>

         (1)      $_________ of the presently outstanding principal amount of
the [Tranche [__] Loans]/[Investor Contributions] originally made on the
Closing Date,

         (2)      and all presently being maintained as [Alternative Base Rate
Advances] [LIBO Rate Advances],

         (3)      be [continued as] [converted into],

         (4)      [LIBO Rate Advances having an Interest Period of _______
months] [Alternative Base Rate Advances].

         The Lessor has caused this Continuation/Conversion Notice to be
executed and delivered by its Authorized Representative this ___ day of ___,
____.

                                        EME/CDL TRUST

                                        By: Wilmington Trust Company, not
                                            in its individual capacity by
                                            solely as trustee of EME/CDL
                                            Trust, a Delaware business
                                            trust

                                        By:
                                        Name:
                                        Title:

                                        MIDWEST GENERATION, LLC

                                        By:_________________________
                                        Name:_______________________
                                        Title:________________________

                                    F - 2
<PAGE>

                                                                            PAGE

                                                                     APPENDIX 1
                                                                             TO
                                                        PARTICIPATION AGREEMENT

                         DEFINITIONS AND INTERPRETATION

         A.       INTERPRETATION.  In each Basic Document, unless a clear
contrary intention appears:

                  (i)   the singular number includes the plural number and
         vice versa;

                  (ii)  reference to any Person include such Person's successors
         and assigns but, if applicable, only if such successors and assigns are
         permitted by the Basic Documents, and reference to a Person in a
         particular capacity excludes such Person in any other capacity or
         individually;

                  (iii) reference to any gender includes each other gender;

                  (iv)  reference to any agreement (including any Basic
         Document), document or instrument means such agreement, document or
         instrument as amended or modified and in effect from time to time in
         accordance with the terms thereof and, if applicable, the terms of the
         other Basic Documents and

                                      1
<PAGE>

         reference to any promissory note includes any promissory note which is
         an extension or renewal thereof or a substitute or replacement
         therefor;

                  (v)    reference to any Applicable Law means such Applicable
         Law as amended, modified, codified, replaced or reenacted, in whole
         or in part, and in effect from time to time, including rules and
         regulations promulgated thereunder and reference to any section or
         other provision of any Applicable Law means that provision of such
         Applicable Law from time to time in effect and constituting the
         substantive amendment, modification, codification, replacement or
         reenactment of such section or other provision;

                  (vi)   reference in any Basic Document to any Article,
         Section, Appendix, Schedule or Exhibit means such Article or Section
         thereof or Appendix, Schedule or Exhibit thereto;

                  (vii)  "hereunder", "hereof", "hereto" and words of similar
         import shall be deemed references to an Basic Document as a whole and
         not to any particular Article, Section or other provision thereof;

                  (viii) "including" (and with correlative meaning "include")
         means including without limiting the generality of any description
         preceding such term; and

                  (ix)   with respect to any rights and obligations of the
         parties under the Basic Documents, all such rights and obligations
         shall be construed to the extent permitted by Applicable Law.

         B.       COMPUTATION OF TIME PERIODS. For purposes of computation of
periods of time under the Basic Documents, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding".

         C.       ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified in any Basic Document, all terms of an accounting character used
therein shall be interpreted, all accounting determinations thereunder shall
be made, and any financial

                                      2
<PAGE>

statements required to be delivered thereunder shall be prepared, in
accordance with GAAP.

         D.       CONFLICT IN BASIC DOCUMENTS. If there is any conflict
between any Basic Documents, such Basic Document shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, the Participation Agreement
shall prevail and control.

         E.       LEGAL REPRESENTATION OF THE PARTIES. The Basic Documents
were negotiated by the parties with the benefit of legal representation and
any rule of construction or interpretation otherwise requiring the Basic
Document to be construed or interpreted against any party shall not apply to
any construction or interpretation hereof or thereof.

         F.       DEFINITIONS:

         "ACCEPTANCE CERTIFICATE" shall mean the acceptance certificate from
Lessee to Lessor with respect to the Leased Equipment to be leased by Lessor to
Lessee under the Lease, substantially in the form of Exhibit A-2 to the
Participation Agreement.

         "ADVANCE REQUEST" shall have the meaning given such term in Section 3.5
of the Participation Agreement.

         "ADVANCES" shall mean the Loans and Investor Contributions.

         "AFFILIATE" of any Person shall mean any other Person directly or
indirectly controlling, controlled by or under common control with, such Person.
For purposes of this definition, the term "control" (including the correlative
meanings of the terms "controlling," "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise, PROVIDED (but without limiting the foregoing) that no
pledge of voting securities of any Person

                                      3

<PAGE>

without the current right to exercise voting rights with respect thereto
shall by itself be deemed to constitute control over such Person.

         "AFTER-TAX BASIS" shall mean, in the context of determining the amount
of a payment to be made on such basis, the payment of an amount which, after
reduction by the net increase in Taxes of the recipient (actual or constructive)
of such payment, which net increase shall be calculated by taking into account
any reduction in such Taxes resulting from any tax benefits realized or to be
realized by the recipient as a result of such payment, shall be equal to the
amount required to be paid. In calculating the amount payable by reason of this
provision in the case of any person that is a U.S. Person, all income taxes
payable and tax benefits realized or to be realized shall be determined on the
assumptions that (i) the recipient is subject to (a) U.S. Federal income taxes
at the highest marginal rate then applicable to corporations for the relevant
period or periods, and (b) state and local income taxes at the highest marginal
rates then applicable to corporations for the relevant period or periods, and
(ii) all related tax benefits are utilized (a) with regard to U.S. Federal
income taxes, at the highest marginal rates then applicable to corporations for
the relevant period or periods, and (b) with regard to state and local income
taxes, at the highest marginal rate then applicable to corporations for the
relevant period or periods.

         "AGENCY FEE" shall mean the Agency Fee payable by EME to CDL on the
Closing Date in accordance with the Fee Letter.

         "AGENT" shall mean Citicorp North America, Inc., as Administrative
Agent pursuant to Section 19.1 of the Participation Agreement.

         "AGENT-RELATED PERSONS" shall mean the Agent, together with its
respective Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.

         "ALTERNATE BASE RATE" shall mean a fluctuating interest rate per annum
equal at all times to the highest of:

                                      4
<PAGE>

                  (a)      the rate of interest announced publicly by
Citibank, N.A. in New York, New York, from time to time, as Citibank, N.A.'s
base rate; or

                  (b)      for any day, 1/2 of one percent per annum above the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by Citibank, N.A.
from three Federal funds brokers of recognized standing selected by it.

         "AMENDMENTS" shall have the meaning given such term in Section 21.4(b)
of the Participation Agreement.

         "APPLICABLE LAW" shall mean all applicable laws, rules, regulations
(including Environmental Laws), statutes, treaties, codes, ordinances, permits,
certificates, orders and licenses of and interpretations by, any Authority, and
applicable judgments, decrees, injunctions, writs, orders or like action of any
court, arbitrator or other administrative, judicial or quasi-judicial tribunal
or agency of competent jurisdiction (including those pertaining to health,
safety or the environment) affecting Lessee, Guarantor or the Leased Equipment.

         "APPLICABLE MARGIN" shall mean, with respect to a Base Rate Advance or
a LIBO Rate Advance, a percentage amount determined in accordance with Schedule
II to the Participation Agreement.

         "APPRAISAL" shall mean an appraisal, prepared by Appraiser, of the
Leased Equipment, pursuant to the Participation Agreement or the Lease.

         "APPRAISED VALUE" shall mean, with respect to the Leased Equipment or
any part thereof, as of any date of determination, the Fair Market Value of such
Leased Equipment or part as set forth in the Appraisal therefor.

                                      5
<PAGE>

         "APPRAISER" shall mean Deloitte & Touche or such other independent
appraisal company as may be selected by Lessor.

         "ASSIGNEE" shall have the meaning given such term in Section 6.8.1 of
the Credit Agreement.

         "ASSIGNOR" shall have the meaning given such term in Section 6.8.1 of
the Credit Agreement.

         "ASSIGNMENT AGREEMENT" shall mean the Assignment Agreement dated as of
June 23, 2000 among the Lessor, the Collateral Agent for the benefit of the
Noteholders, the Depositary Bank and the Noteholders.

         "AUCTION" shall have the meaning given such term in Section 12.4 of the
Lease.

         "AUCTION PURCHASER" shall have the meaning given such term in Section
12.6(a) of the Lease.

         "AUCTION SALE PRICE" shall have the meaning given such term in Section
12.6(a) of the Lease.

         "AUTHORITY" shall mean any applicable foreign, federal, state, county,
municipal or other government, quasi-government or regulatory authority, agency,
board, body, commission, instrumentality, court or tribunal, or any political
subdivision of any thereof, or any arbitrator or panel of arbitrators.

          "AUTHORIZED REPRESENTATIVE" shall mean, relative to a Person, those of
its officers and employees whose signatures and incumbency shall have been
certified to the other Parties to the Participation Agreement pursuant to
Section 5.1 of the Participation Agreement.

         "BANKRUPTCY CODE" shall mean the United States Bankruptcy Code of
1978, as amended from time to time, 11 U.S.C. Section 101 ET SEQ.

                                      6
<PAGE>

         "BASE RATE ADVANCE" shall mean an Advance bearing interest at a
fluctuating rate determined by reference to the Alternate Base Rate plus
Applicable Margin from time to time in effect.

         "BASIC DOCUMENTS" shall mean the Participation Agreement, the Lease,
the Memorandum of Lease, the Deeds, the ComEd Consent, the Guaranty, the Credit
Agreement, the Notes, the Certificates, the Bill of Sale, the Intercompany
Note, the Assignment Agreement and the Trust Agreement and such other documents,
instruments, certificates and opinions of counsel as agreed to by the Lease
Financing Parties.

         "BASIC RENT" shall mean the sum of (i) Tranche A Basic Rent, (ii)
Tranche B Basic Rent and (iii) Investor Basic Rent, calculated as of the
applicable Payment Date.

         "BILL OF SALE" shall mean the bill of sale executed in favor of Lessor
with respect to the Leased Equipment to be transferred by Lessee to Lessor,
substantially in the form of Exhibit A-1 to the Participation Agreement.

         "BOARD OF DIRECTORS" shall mean, with respect to a corporation, either
the board of directors or any duly authorized committee of that board of
directors which, pursuant to the bylaws of such corporation, has the same
authority as that board of directors as to the matter at issue.

         "BUSINESS DAY" shall mean any day on which Federal and state chartered
banks in Wilmington, Delaware and New York are open for commercial banking
business and, solely with respect to determinations of Interest Periods for LIBO
Rate Advances, dealings in United States dollars are carried on in the London
interbank market.

         "CAPEX CREDIT AGREEMENT" shall mean the Credit Agreement, dated as of
May 9, 2000, by and among Holdings, Societe Generale and Bayerische Landesbank
Girozentrale.

                                      7
<PAGE>

         "CAPITALIZED LEASE LIABILITIES" of any Person shall mean all monetary
obligations of such Person under any leasing or similar arrangement which, in
accordance with GAAP, would be classified as capitalized leases, and, for
purposes of each Basic Document, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.

         "CASH EQUIVALENT INVESTMENT" shall mean, at any time:

                  (a)    any evidence of Indebtedness, maturing not more than
         one year after such time, issued or guaranteed by the United States
         Government or an agency thereof; or

                  (b)    other investments in securities or bank instruments
         rated at least "A" by S&P and "A2" by Moody's or "A-1" by S&P and "P-1"
         by Moody's and with maturities of less than 366 days; or

                  (c)    other securities as to which Lessee has demonstrated,
         to the satisfaction of the Agent, adequate liquidity through secondary
         markets or deposit agreements.

         "CASHFLOW AVAILABLE FOR FIXED CHARGES" shall mean, in respect of any
period, the excess, if any, of Revenues (excluding (i) proceeds of any permitted
asset sale, (ii) amounts available in the Cashflow Recapture Fund and (iii)
payments made by Edison Mission Energy under or in respect of the Intercompany
Note) during such period OVER Operating Expenses during such period.

         "CASHFLOW RECAPTURE FUND" shall have the meaning given such term in the
Holdings Credit Agreement.

         "CATEGORY OF LEASED EQUIPMENT" shall mean any category of Leased
Equipment as set forth on Schedule 4 to the Lease.

         "CDL" shall mean Citicorp Del-Lease, Inc., a Delaware corporation.

                                      8
<PAGE>

         "CERCLIS" shall mean the Comprehensive Environmental Response
Compensation Liability Information System List.

         "CERTIFICATES" shall mean the trust certificates issued to the
Investors pursuant to Article IV of the Trust Agreement.

         "CLAIMS" shall mean liabilities, obligations, damages, losses,
demands, penalties, interest, fines, claims, actions, suits, judgments,
settlements, and reasonable costs, fees, expenses and disbursements (including
legal fees, (including allocated time charges of internal counsel) and expenses
and costs of investigation) whether any of the foregoing be founded or
unfounded, of any kind and nature whatsoever.

         "CLOSING" shall have the meaning given such term in Section 3.9 of the
Participation Agreement.

         "CLOSING DATE" shall have the meaning given such term in Section 3.9 of
the Participation Agreement.

         "CLOSING FEE" shall mean the Closing Fee payable by EME to CDL on the
Closing Date in accordance with the Fee Letter.

         "CODE" shall mean the Internal Revenue Code of 1986 and the regulations
promulgated from time to time under and pursuant thereto, as amended.

         "COLLATERAL AGENT" shall mean Citicorp North America, Inc. as
Collateral Agent pursuant to Section 12 of the Assignment Agreement.

         "COMED" shall mean Commonwealth Edison Company, an Illinois
corporation.

         "COMED AGREEMENTS" shall mean the following agreements, collectively,
each dated as of December 15, 1999, and each between ComEd and Midwest: Power
Purchase Agreement; Peaker Control Agreement; Facilities, Interconnection and
Easement Agreement (Crawford Station); Facilities, Interconnection and Easement

                                      9
<PAGE>

Agreement (Fisk Station); Facilities, Interconnection and Easement Agreement
(Joliet 9 Station); Facilities, Interconnection and Easement Agreement (Waukegan
Station); Facilities, Interconnection and Easement Agreement (Calumet Peaker
Site); Facilities, Interconnection and Easement Agreement (Bloom Peaker Site);
Facilities, Interconnection and Easement Agreement (Electric Junction Peaker
Site); Facilities, Interconnection and Easement Agreement (Lombard Peaker Site);
and Facilities, Interconnection and Easement Agreement (Sabrooke Peaker Site).

         "COMED CONSENT" shall mean the Consent to Sale of Assets, dated as of
July 10, 2000, by and among ComEd, Midwest and the Lessor.

         "CONTINGENT LIABILITY" shall mean any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
indebtedness, obligation or any other liability of any other Person (other than
by endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount of the debt, obligation or other liability guaranteed thereby;
PROVIDED, HOWEVER, that if the maximum amount of the debt, obligation or other
liability guaranteed thereby has not been established, the amount of such
Contingent Liability shall be the maximum reasonably anticipated amount of the
debt, obligation or other liability.

         "CONTINUATION/CONVERSION NOTICE" shall have the meaning given such term
in Section 3.6 of the Participation Agreement.

         "CONTRACTUAL OBLIGATION" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

         "CONTRIBUTOR" shall mean Citicorp Del-Lease, Inc.

                                      10
<PAGE>

         "CONTROLLED GROUP" shall mean, with respect to any Person, all members
of a controlled group of corporations and all members of a controlled group of
trades or businesses (whether or not incorporated) under common control which,
together with such Person are treated as a single employer under Section 414(b)
or 414(c) of the Code or Section 4001 of ERISA.

         "CREDIT AGREEMENT" shall mean the Credit Agreement, dated as of June
23, 2000 among EME/CDL Trust as Lessor, Midwest Peaker Holdings, Inc. as Tranche
A Noteholder, Citicorp Del-Lease, Inc. as Tranche B Noteholder and Citicorp
North America, Inc. as Administrative Agent for the Participants.

         "CREDIT AGREEMENT DEFAULT" shall mean any Credit Agreement Event of
Default or any condition, occurrence or event which, after notice or lapse of
time or both, would constitute a Credit Agreement Event of Default.

         "CREDIT AGREEMENT EVENT OF DEFAULT" shall have the meaning given such
term in Section 5.1 of the Credit Agreement.

         "DEBT RATING" shall mean, as to any Person, a rating by each of
Moody's and S&P of such Person's long-term debt which is not secured or
supported by a guarantee, letter of credit or other form of credit
enhancement. If Moody's or S&P shall have changed its system of classification
after the date of the Participation Agreement, a Person's Debt Rating shall be
considered to be at or above a specified level if it is at or above the new
rating which most closely corresponds to the specified level under the old
rating system.

         "DEBT SERVICE COVERAGE RATIO" shall mean, for any period, the ratio of
(a) Cashflow Available for Fixed Charges for such period to (b) Fixed Charges
for such period.

         "DEEDS" shall mean the nine Special Warranty Deeds, each dated as of
June 23, 2000, by Midwest Generation, LLC in favor of EME/CDL Trust.

         "DEFAULT" shall mean a Lease Default or a Credit Agreement Default.

                                      11
<PAGE>

         "DEPOSITARY BANK" shall mean Citibank, N.A. as Depositary Bank
pursuant to Section 12 of the Assignment Agreement.

         "DESIGNATED LEASE LIABILITIES" shall have the meaning ascribed thereto
in the Holdings Credit Agreement.

         "DISCOUNT RATE" shall mean 7.25% per annum.

         "DOLLARS" and the sign "$" shall mean lawful money of the United
States.

         "DOMESTIC OFFICE" shall mean, (a) relative to any Noteholder, the
office of such Noteholder designated on Schedule I of the Participation
Agreement, or designated in the Lender Assignment Agreement pursuant to which
such Noteholder became a Noteholder under the Credit Agreement or such other
office of a Noteholder (or any successor or assign of such Noteholder) within
the United States as may be designated from time to time by notice from such
Noteholder, as the case may be, to each other Person party to the Credit
Agreement and (b) relative to any Investor, the office of such Investor
designated on Schedule I of the Participation Agreement, or designated
in the Trust Agreement pursuant to which such Investor became an Investor under
the Trust Agreement or such other office of an Investor (or any successor or
assign of such Investor) within the United States as may be designated from time
to time by notice from such Investor, to each other Person party to the Trust
Agreement. A Noteholder or Investor may have separate Domestic Offices for
purposes of making, maintaining or continuing, as the case may be, Base Rate
Advance.

         "EDISON INTERNATIONAL" shall mean Edison International, a California
corporation.

         "EDISON MISSION ENERGY" shall mean Edison Mission Energy, a
California corporation.

         "EME" shall mean Edison Mission Energy, a California corporation.

                                      12
<PAGE>

         "EMOC" shall mean Edison Mission Overseas Co., a Subsidiary of Holdings
and a limited liability company organized under the laws of Delaware.

         "EMPLOYEE BENEFIT PLAN" shall mean an employee benefit plan (within the
meaning of Section 3(3) of ERISA, including any multiemployer plan (within the
meaning of Section 3(37)(A) of ERISA)), or any "plan" as defined in Section
4975(e)(1) of the Code and as interpreted by the Internal Revenue Service and
the Department of Labor in rules, regulations, releases or bulletins in effect
on the Closing Date.

         "END OF TERM APPRAISAL" shall mean an appraisal, prepared by the
Appraiser, of the Leased Equipment and delivered to the Financing Parties
pursuant to Section 7.1 of the Participation Agreement.

         "ENVIRONMENTAL CLAIMS" shall have the meaning given such term in
Section 6.7 of the Participation Agreement.

         "ENVIRONMENTAL LAWS" shall mean the Resource Conservation and
Recovery Act of 1976, (RCRA) 42 U.S.C. Sections 6901-6992k, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections
9601-9657 ET SEQ., (CERCLA), the Hazardous Materials Transportation Act of
1975, 49 U.S.C. Sections 1801-1812, the Toxic Substances Control Act, 15
U.S.C. Sections 2601-2671, the Clean Air Act, 42 U.S.C. Sections 7401 et
seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
Sections 136 et seq., the Clean Water Act, 33 U.S.C. Sections 401 et seq.,
and all similar federal, state and local environmental laws, ordinances,
rules, orders, statutes, binding consent decrees, judgments or injunctions,
codes and regulations, and any other federal, state or local laws,
ordinances, rules, codes and regulations relating to the environment, human
health, natural resources or Hazardous Materials or their clean-up,
remediation or response, to the extent any of the foregoing are applicable to
the Leased Equipment.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.

                                      13

<PAGE>

         "ERISA AFFILIATE" shall mean, with respect to any Person, any
corporation or trade or business which is a member of the same controlled group
of corporations (within the meaning of Section 414(b) of the Code) as such
Person or is under common control (within the meaning of Section 414(c) of the
Code) with such Person.

         "EVENT OF DEFAULT" shall mean a Lease Event of Default or a Credit
Agreement Event of Default.

         "EVENT OF LOSS" shall mean each of (i) loss or damage to the Leased
Equipment that (a) renders the Leased Equipment permanently unfit for normal use
or (b) in the reasonable judgment of the Lessor, is likely to materially
diminish the Fair Market Value, useful life or residual value of the Leased
Equipment and (ii) seizure, condemnation, confiscation or taking of, or
requisition of title to or use of (x) all of the Leased Equipment by any
Authority or (y) less than all of the Leased Equipment by any Authority and, in
the reasonable judgment of the Lessor, the Fair Market Value, useful life or
residual value of the Leased Equipment is materially diminished.

         "EXCESS CASHFLOW" shall have the meaning ascribed thereto in the
Holdings Credit Agreement.

         "EXCLUDED AMOUNTS" shall mean:

                  (a) all indemnity payments and expenses to which Lessor, any
         Investor or any Noteholder (or the respective successors, assigns,
         agents, officers, directors or employees of any such Person) is
         entitled pursuant to the Basic Documents;

                  (b) any amounts payable under any Basic Document to reimburse
         Lessor, any Investor, any Noteholder, the Agent, the Collateral Agent,
         the Depositary Bank or the Trustee (including the reasonable expenses
         of Lessor, any Investor, any Noteholder, the Agent, the Collateral
         Agent, the Depositary Bank or the Trustee incurred in connection with
         any such payment) for

                                     14
<PAGE>

         performing any of the obligations of Lessee under and as permitted by
         any Basic Document;

                  (c) any insurance proceeds under policies maintained by
         Lessor, any Investor or any Noteholder and not required to be
         maintained by Lessee under the Lease;

                  (d) any insurance proceeds (or corresponding amounts with
         respect to risks that are self-insured by Lessee and the amounts of any
         policy deductibles) under liability policies payable to the Agent, the
         Collateral Agent, any Investor or any Noteholder (or the respective
         successors, assigns, agents, officers, directors or employees of any
         Investor or any Noteholder);

                  (e) any amount payable in respect of Transaction Costs or any
         other costs payable pursuant to Section 20 of the Participation
         Agreement; and

                  (f) any payments of interest on payments referred to in
         clauses (a) through (e) above.

         "EXCLUDED TAXES" shall have the meaning given such term in Section
6.3(b) of the Participation Agreement.

         "FAIR MARKET VALUE" shall mean, with respect to the Leased Equipment or
any part thereof as of any date, the price a purchaser would pay to purchase
such Leased Equipment or part in an arm's-length transaction between a willing
buyer and a willing seller, neither of them being under any compulsion to buy or
sell.

         "FEDERAL FUNDS RATE" shall mean for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of quotations for such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by it.

                                     15
<PAGE>

         "FEE LETTER" shall have the meaning given to such term in Section 3.15
of the Participation Agreement.

         "FINAL MATURITY DATE" shall mean the fifth anniversary of the
Closing Date or such later date established pursuant to a Renewal Term, but in
no event later than July 9, 2010; PROVIDED, that the Final Maturity Date shall
be a Payment Date.

         "FINANCING PARTIES" shall mean the Noteholders, the Investors and the
Lessor, collectively.

         "FISCAL QUARTER" shall mean any quarter of a Fiscal Year.

         "FISCAL YEAR" shall mean any period of twelve consecutive calendar
months ending on December 31; references to a Fiscal Year with a number
corresponding to any calendar year (E.G., the "1999 Fiscal Year") refers to
the Fiscal Year ending on December 31 occurring during such calendar year.

         "FIXED CHARGES" shall mean, in respect of any period, an amount equal
to the aggregate of, without duplication, (i) all interest due and payable on
any Indebtedness of Holdings PLUS or MINUS any net amount due and payable in
respect of Interest Rate Hedging Transactions during such period, including (A)
all capitalized interest and (B) the interest portion of any deferred payment
obligation, (ii) amounts due and payable in respect of fees on Indebtedness
permitted to be incurred by Holdings during such period, (iii) amounts due and
payable to any lenders of Holdings with respect to the deduction of withholding
tax on such payments during such period, (iv) the interest portion of any
deferred payment obligation due and payable during such period, (v) the
aggregate amount of the Lease Obligations due and payable during such period,
(vi) all other amounts due and payable by the Loan Parties with respect to
Indebtedness permitted to be incurred by the Loan Parties under the Lessee
Financing Documents during such period, (vii) all dividends accrued or paid
during such period to any Person other than EME or an Affiliate of EME and
(viii) all amounts due and payable during such period in respect of any
obligation to repurchase or redeem warrants, preferred stock or other similar
obligations.

                                     16
<PAGE>

         "FREE CASHFLOW" shall mean, for any period, the excess if any, of (i)
Cashflow Available for Fixed Charges for such period OVER (ii) the sum of (x)
Fixed Charges for such period and (y) amounts required to be deposited into the
Cashflow Recapture Fund; PROVIDED that Free Cashflow shall be zero in the event
that any of the following conditions has not been satisfied: (i) Holdings has
paid all amounts then due and payable in respect of (x) all monetary obligations
of the Loan Parties arising under or in connection with the Holdings Credit
Agreement and any agreements or instruments related thereto and (y) any
Indebtedness of Holdings that is a Secured Obligation; (ii) no Default, Event of
Default or Maturity Event (each as defined in the Holdings Credit Agreement)
shall have occurred and be continuing or will occur after giving effect to the
making of such payment; and (iii) (A) the Debt Service Coverage Ratio for the
12-month period ended on the last day of the immediately preceding Fiscal
Quarter (or, in respect of any Quarterly Payment Date prior to January 1, 2001,
the Debt Service Coverage Ratio for the period commencing on January 1, 2000 and
ending on the last day of the immediately preceding Fiscal Quarter), (B) the
projected Debt Service Coverage Ratio for the 12-month period commencing on the
first day of the then current Fiscal Quarter and (C) the projected Debt Service
Coverage Ratio for the 12-month period commencing on the first anniversary of
the first day of the then current Fiscal Quarter, in each case shall be no less
than 1.75 to 1.00.

         "F.R.S. BOARD" shall mean the Board of Governors of the Federal
Reserve System or any successor.

         "GAAP" shall mean, with respect to any Person, generally accepted
accounting principles in the United States as in effect from time to time
applied on a basis consistent (except for changes concurred in by such Person's
independent public accountants) with such Person's most recent audited
consolidated financial statements.

         "GOVERNMENTAL APPROVAL" shall have the meaning given such term in
Section 8.3 of the Participation Agreement.

         "GUARANTOR" shall mean Edison Mission Energy, a California
corporation.

                                     17
<PAGE>

         "GUARANTY" shall mean the Guaranty Agreement, dated as of June 23,
2000, made by EME in favor of the Lessor and Lessee.

         "HAZARDOUS MATERIAL" shall mean any substance, waste or material
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous by listing, characteristic or
definition under any Environmental Law, including petroleum, crude oil or any
fraction thereof, petroleum derivatives, by-products and other hydrocarbons
and also including asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls ("PCBS") and radon gas.

         "HOLDINGS" shall mean Edison Mission Midwest Holdings Co., a Delaware
corporation.

         "HOLDINGS CREDIT AGREEMENT" shall mean the Credit Agreement, dated as
of December 15, 1999, by and among Edison Mission Midwest Holdings Co., the
Holdings Lenders (as defined therein) and The Chase Manhattan Bank, as the
Administrative Agent (as defined therein).

         "IMPROVEMENTS" shall have the meaning given such term in Section 8 of
the Lease.

         "INDEBTEDNESS" of any Person shall mean, without duplication:

                  (a) all indebtedness for borrowed money;

                  (b) all obligations issued, undertaken or assumed as the
         deferred purchase price of property or services which purchase price is
         due more than six months from the date of incurrence of the obligation
         in respect thereof or is evidenced by a note or other instrument,
         except trade accounts arising in the ordinary course of business;

                  (c) all reimbursement obligations with respect to surety
         bonds, letters of credit (to the extent not collateralized with cash or
         Cash Equivalent

                                     18
<PAGE>

         Investments), bankers' acceptances and similar instruments (in each
         case, whether or not matured);

                  (d) all obligations evidenced by notes, bonds, debentures or
         similar instruments, including obligations so evidenced incurred in
         connection with the acquisition of property, assets or businesses;

                  (e) all indebtedness created or arising under any conditional
         sale or other title retention agreement, or incurred as financing, in
         either case with respect to property acquired by the Person (even
         though the rights and remedies of the seller or bank under such
         agreement in the event of default are limited to repossession or sale
         of such property);

                  (f) all Capitalized Lease Liabilities;

                  (g) all net obligations with respect to sales of foreign
         exchange options;

                  (h) all indebtedness referred to in CLAUSES (a) through (g)
         above secured by (or for which the holder of such Indebtedness has an
         existing right, contingent or otherwise, to be secured by) any Lien
         upon or in property (including accounts and con tracts rights) owned by
         such Person, even though such Person has not assumed or become liable
         for the payment of such Indebtedness; and

                  (i) all Contingent Liabilities.

For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partner ship or joint venture in which such Person is a
general partner or a joint venturer.

         "INDEMNITEE" shall mean the Agent, the Collateral Agent, the Depositary
Bank, each Noteholder, each Investor, the Trustee and the Lessor, and their
respective

                                     19
<PAGE>

Affiliates and the successors, assigns, directors, officers, employees,
members, partners and agents thereof.

         "INITIAL INVESTOR" shall mean Citicorp Del-Lease, Inc.

         "INSOLVENCY EVENT" shall mean, with respect to any Person, any event
pursuant to which (i) such Person makes an assignment for the benefit of
creditors, files a petition in bankruptcy, petitions or applies to any tribunal
for the appointment of a custodian, receiver or any trustee for it or for a
substantial part of its property, commences any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction, whether now or hereafter in effect, consents
or acquiesces in the filing of any such petition, application, proceeding or
appointment of or taking possession by the custodian, receiver, liquidator,
assignee, trustee or sequestrator (or other similar official) of such Person or
any substantial part of its property, or admits its inability to pay its debts
generally as they become due, or authorizes any of the foregoing to be done or
taken on behalf of such Person; or (ii) any involuntary case is commenced
against any Person and the petition is not controverted within 10 days, or is
not dismissed within 60 days, after commencement of the case.

         "INTERCOMPANY NOTE" shall mean the Promissory Note, dated as of June
23, 2000, by EME in favor of Midwest Generation, LLC.

         "INTERCREDITOR AGREEMENT" shall mean the Collateral Agency and
Intercreditor Agreement, dated as of December 15, 1999, among The Chase
Manhattan Bank, MGE, Holdings, EMOC, Midwest Generation LLC, Collins Holdings
EME, LLC, Collins Trust I, Collins Trust II, Collins Trust III, Collins Trust
IV, Midwest Funding LLC, each Holder Representative (as defined therein),
Citibank N.A. as Depositary Agent (as defined therein), Bayerische Landesbank
International S.A., Citibank, N.A. as Depositary Bank (as defined therein) and
Citibank N.A. as Holdings Collateral Agent (as defined therein).

                                     20
<PAGE>

         "INTEREST AMOUNT" shall mean for any Interest Period, an amount equal
to the applicable Interest Rate on the aggregate Noteholder Amount PLUS the
applicable Yield on the aggregate Investor Amount.

         "INTEREST PAYMENT DATE" shall have the meaning given such term in
Section 3.13(f) of the Participation Agreement. "INTEREST PERIOD" shall mean,
relative to any LIBO Rate Advance, the period beginning on (and including) the
date on which such LIBO Rate Advance is made or continued as, or converted into,
a LIBO Rate Advance pursuant to the Participation Agreement and shall end on
(but exclude) the day which numerically corresponds to such date one, two,
three or six months (or such longer or shorter period as the Noteholders or
Investors, as the case may be, determine is available) thereafter (or, if such
month has no numerically corresponding day, on the last Business Day of such
month), in either case as the Lessor may select in its relevant notice pursuant
to Section 3.6 of the Participation Agreement; PROVIDED, HOWEVER, that:

                  (a) all outstanding LIBO Rate Advances shall have the same
Interest Period;

                  (b) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first Business Day
of a calendar month, in which case such Interest Period shall end on the
Business Day next preceding such numerically corresponding day); and

                  (c) no Interest Period may end later than the Final Maturity
Date.

         "INTEREST RATE" shall mean the applicable rate payable from time to
time on the Notes during the Lease Term, which rate (i) relating to a LIBO Rate
Advance for each Interest Period shall be equal to the LIBO Rate for such
Interest Period plus the Applicable Margin (subject to Section 4.1 of the
Participation Agreement), each such rate to be determined by the Agent and (ii)
relating to a Base Rate Advance shall

                                     21
<PAGE>

equal the Alternative Base Rate in effect from time to time plus the
Applicable Margin.

         "INTEREST RATE HEDGING TRANSACTIONS" shall mean, as to any Loan
Party, all interest rate swaps, caps or collar agreements or similar
arrangements entered into by such Person in order to protect against
fluctuations in interest rates or the exchange of nominal interest
obligations, either generally or under specific contingencies, and, in any
event, not for speculative purposes.

         "INVESTMENT" shall mean, relative to any Person:

                 (a) any loan or advance made by such Person to any other
         Person (excluding commission, travel and similar advances to
         officers and employees made in the ordinary course of business);

                 (b) any Contingent Liability of such Person; and

                 (c) any ownership or similar interest held by such Person in
         any other Person.

The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.

         "INVESTOR" shall have the meaning given such term in the Trust
Agreement, and shall include, but is not limit ed to, the Initial Investor.

         "INVESTOR AMOUNT" shall mean, with respect to any Investor, as of the
date of determination, the aggregate face amount of the Certificates held by
such Investor pursuant to the Trust Agreement.

                                     22
<PAGE>

         "INVESTOR BASIC RENT" shall mean the Yield due on the Investor
Contributions on any Interest Payment Date pursuant to the Participation
Agreement and the Trust Agreement.

         "INVESTOR CONTRIBUTION" shall have the meaning given such term in
Section 3.3 of the Participation Agreement.

         "INVESTOR PARTICIPANT" shall have the meaning given such term in
Section 21.8 of the Participation Agreement.

         "INVESTOR PURCHASE OPTION" shall have the meaning given such term in
Section 12.5(d) of the Lease.

         "INVESTOR PURCHASE PRICE" shall have the meaning given such term in
Section 12.5(d) of the Lease.

         "INVESTOR'S LETTER" shall mean the letter delivered to the Lessor in
substantially the form of Exhibit E to the Participation Agreement.

         "LEASE" shall mean the Lease Agreement between Lessor and Lessee, dated
June 23, 2000.

         "LEASE DEFAULT" shall mean any condition, event or act, which with
notice or lapse of time or both would become a Lease Event of Default.

         "LEASE EVENT OF DEFAULT" shall have the meaning given such term in
Section 14 of the Lease.

         "LEASE EXPIRATION DATE" shall mean the earlier of (a) the date the
Lease is terminated pursuant to the Lease in connection with a Lease Event of
Default or otherwise and (b) the Final Maturity Date.

         "LEASE FINANCING DOCUMENTS" shall mean the Participation Agreement,
the Trust Agreement, the Certificates, the Credit Agreement, the Notes, the
Assignment

                                     23
<PAGE>

Agreement, the Guaranty and each other agreement, document or instrument
delivered in connection with any of the foregoing.

         "LEASE FINANCING PARTIES" shall mean, collectively, the Noteholders,
the Investors and the Lessor.

         "LEASE OBLIGATIONS" shall mean the obligations of the Lessee and
Collins Holdings EME, LLC to make basic lease rent, basic sublease rent, renewal
lease rent, renewal sublease rent, supplemental lease rent, supplemental
sublease rent and other payments under the Facility Subleases and the Facility
Leases (as defined in the Holdings Credit Agreement) and under the Lease.

         "LEASE TERM" shall have the meaning given such term in Section 3 of the
Lease.

         "LEASED EQUIPMENT" shall mean the combustion turbines as described on
Schedule 1 to the Lease, purchased by Lessor and leased to Lessee pursuant to
the Lease.

         "LESSEE" shall mean Midwest Generation, LLC, a Delaware limited
liability company.

         "LESSEE ACCOUNT" shall mean the account established by the Lessee into
which the proceeds of the Advances shall be deposited by Lessor as payment for
the Leased Equipment.

         "LESSEE COLLATERAL" shall mean all assets of the Lessee, now owned or
hereafter acquired, upon which a Lien is purported to be created by the Security
Documents.

         "LESSEE FINANCING DOCUMENTS" shall mean the Holdings Credit Agreement,
the CAPEX Credit Agreement and all other Indebtedness of Holdings and the
Lessee.

         "LESSEE INDEMNITEE" shall mean (i) an Indemnitee and (ii) the Guarantor
and the Affiliates and the directors, officer, employees and agents thereof.

                                     24

<PAGE>

                                                                            PAGE

         "LESSEE PURCHASE FIXED PRICE" shall have the meaning given such term in
Section 12.3 of the Lease.

         "LESSEE PURCHASE OPTION" shall have the meaning given such term in
Section 12.3 of the Lease.

         "LESSEE SECURED OBLIGATIONS" shall have the meaning given such term in
Section 17 of the Lease.

         "LESSOR" shall mean EME/CDL Trust, a statutory business trust created
under the laws of the State of Delaware.

         "LESSOR ACCOUNT" shall have the meaning given such term in Section
10(a) of the Assignment Agreement.

         "LESSOR COLLATERAL" shall have the meaning given such term in Section 2
of the Assignment Agreement.

         "LESSOR LIENS" shall mean Liens on or against any or all of the Leased
Equipment or any part thereof, the Lease, the Trust Estate or any payment of
Rent which result from (a) any act of, or any Claim against, any Investor, any
Noteholder, Trustee, Trust Company, Lessor, Collateral Agent or Agent in any
case unrelated to the transactions contemplated by the Basic Documents, (b) any
Tax owed by any such Person, except for any Tax required to be paid by Lessee
under the Basic Documents, including any Tax for which Lessee is obligated to
indemnify such Person, or (c) any act or omission of such Person which is
prohibited by the Basic Documents.

         "LIBO RATE" shall mean, with respect to any Interest Period, the
Telerate LIBOR Rate applicable to such Interest Period or, if the Telerate
LIBOR Rate ceases to be reported, the London Interbank Offered Rate applicable
to such Interest Period, where:

                  "LONDON INTERBANK OFFERED RATE" shall mean, with respect to
         each Interest Period, the average rate per annum equal to the average
         rate of interest

                                     25
<PAGE>

                                                                            PAGE

         at which deposits in Dollars (in the approximate amount equal to the
         aggregate outstanding principal balance of the Notes or Certificates,
         as the case may be, and for a period of time comparable to the
         applicable Interest Period) are offered to the Agent and two other
         major banks selected by the Agent in the London interbank market at
         approximately 11:00 a.m. (London time) two Business Days before the
         first day of such Interest Period for delivery on the first day of such
         Interest Period; and

                  "TELERATE LIBOR RATE" shall mean, with respect to a Interest
         Period, the rate of interest per annum at which deposits in Dollars are
         offered to major banks in the London interbank market at approximately
         11:00 a.m. (London time) for a period of time comparable to the
         applicable Interest Period, as reported by the Telerate System page
         3750 (or such other page as may replace such page 3750 on such system
         for the purpose of reporting London Interbank Offered Rates of major
         banks) under the heading for British Bankers Association Interest
         Settlement Rates in the column designated "USD" (U.S. Dollar), two
         Business Days before the first day of such In terest Period for
         delivery on the first day of such Interest Period.

         "LIBO RATE (RESERVE ADJUSTED)" means, relative to any Advance to be
made, continued or maintained as, or converted into, a LIBO Rate Advance for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest
whole multiple of l/100 of 1%) determined pursuant to the following formula:

LIBO Rate (Reserve Adjusted)   =                     LIBO Rate
                                        -------------------------------
                                        1.00 - LIBOR Reserve Percentage

The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Advances
will be determined by the Agent on the basis of the LIBOR Reserve Percentage in
effect on, and the applicable rates furnished to and received by the Agent, two
Business Days before the first day of such Interest Period.

         "LIBO RATE ADVANCE" shall mean any Advance under which interest accrues
at the LIBO Rate plus the Applicable Margin.

                                     26
<PAGE>

                                                                            PAGE

         "LIBOR OFFICE" shall mean initially, the funding office of each
Noteholder or Investor, as the case may be, designated as such in Schedule I to
the Participation Agreement or designated in any assignment agreement relating
to the assignment of any Loan or Investor Amount pursuant to the Basic
Documents; and thereafter, such other office of such Noteholder or Investor, if
any, making or maintaining such Noteholder's or Investor's investment in
Certificates or Notes.

         "LIBOR RESERVE PERCENTAGE" means, relative to any Interest Period for
LIBO Rate Advances, the reserve percentage (expressed as a decimal) equal to the
aggregate reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional adjustments
or other scheduled changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of and including "Eurocurrency Liabilities," as currently
defined in Regulation D of the F.R.S. Board, having a term approximately equal
or comparable to such Interest Period.

         "LIEN" shall mean any lien (statutory or otherwise), mortgage, deed of
trust, encumbrance, pledge, financing statement, charge, lease, easement,
servitude or security interest of any kind, including any thereof arising under
any conditional sale or other title retention agreement or any financing lease
having substantially the same effect as the foregoing.

         "LOAN PARTICIPANT" shall have the meaning given such term in Section
6.8.2 of the Credit Agreement.

         "LOAN PARTIES" shall mean (i) Holdings, (ii) the Lessee and (iii) EMOC
and their respective Subsidiaries.

         "LOANS" shall mean the loans made to the Lessor by the Noteholders on
the Closing Date pursuant to Section 3.1 of the Participation Agreement.

         "MATERIAL ADVERSE EFFECT" shall mean, with respect to any Person, any
event, development or circumstance that has had or could reasonably be expected
to have a

                                     27
<PAGE>

                                                                            PAGE

material adverse effect on (i) the business, assets, property, condition
(financial or otherwise) or operations of such Person and its Subsidiaries,
taken as a whole, since the Closing Date or (ii) the ability of such Person to
perform its obligations under any of the Basic Documents to which such Person
is a party.

         "MAXIMUM DEFICIENCY AMOUNT" shall mean, with respect to any Category of
Leased Equipment, the Maximum Deficiency Amount set forth on Schedule 4 to the
Lease.

         "MEMORANDUM OF LEASE" shall mean the five Memorandum of Lease, each
dated as of June 23, 2000, between the Lessor and the Lessee and filed with
the Registries of Deeds, in Cook, Lake, Will, DuPage and Winnebago Counties,
Illinois, respectively.

         "MGE" shall mean Midwest Generation EME, LLC, a Subsidiary of Edison
Mission Energy and a limited liability company organized under the laws of the
State of Delaware.

         "MOODY'S" shall mean Moody's Investors Service, a division of Dun &
Bradstreet Corporation, and its successors and assigns.

         "MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as such term is
defined in Section 4001(a)(3) of ERISA.

         "NET SALE PROCEEDS" shall have the meaning given such term in Section
3.10(b) of the Participation Agreement.

         "NET TANGIBLE ASSETS" shall mean, as of the date of any determination
thereof, the total amount of all assets of Guarantor and its Subsidiaries
(determined on a consolidated basis in accordance with GAAP), LESS the sum of
(i) the consolidated current liabilities of Guarantor and its Subsidiaries
(determined on a consolidated basis in accordance with GAAP) and (ii) assets
properly classified as "intangible assets" in accordance with GAAP.

                                     28
<PAGE>

                                                                            PAGE

         "NON-RECOURSE DEBT" shall mean, with respect to any Person,
Indebtedness which such Person is not directly or indirectly obligated to repay.

         "NON-US PARTICIPANT" shall have the meaning given such term in Section
4.7(c) of the Participation Agreement.

         "NOTE" shall mean, as the context may require, a Tranche A Note or a
Tranche B Note.

         "NOTEHOLDER AMOUNT" shall mean, with respect to any Noteholder, as of
any date of determination, the aggregate face amount of the Notes held by such
Noteholder pursuant to the Credit Agreement.

         "NOTEHOLDER ASSIGNMENT AGREEMENT" shall mean a Noteholder Assignment
Agreement, substantially in the form of Exhibit B to the Credit Agreement.

         "NOTEHOLDERS" shall mean the Tranche A Noteholders and Tranche B
Noteholders.

         "OBLIGATIONS" shall mean, with respect to any Per son, all obligations
(monetary or otherwise) of such Person, as the context may require, arising
under or in connection with the Basic Documents.

         "OFFICER'S CERTIFICATE" of a Person shall mean a certificate signed
by (i) the Chairman of the Board of Directors or the President or any
Executive Vice President or any Senior Vice President or any other Vice
President of such Person signing with the Treasurer or any Assistant
Treasurer or the Controller or any Assistant Controller, Cashier, Assistant
Cashier or the Secretary or any Assistant Secretary of such Person, or by any
Vice President who is also Controller, Treasurer or Cashier signing alone or
(ii) with respect to the Lessor and the Trustee, an authorized signatory of
the Trustee.

         "OPERATING EXPENSES" shall mean, in respect of any period, all cash
amounts paid by the Loan Parties in the conduct of their business during such
period, including premiums for insurance policies, fuel supply and
transportation costs, utilities, costs

                                     29
<PAGE>

                                                                            PAGE

of maintaining, renewing and amending Governmental Approvals, franchise,
licensing, property, real estate and income taxes, sales and excise taxes,
general and administrative expenses, employee salaries, wages and other
employment-related costs, business management and administrative services
fees, fees for letters of credit, surety bonds and performance bonds,
necessary capital expenditures and all other fees and expenses necessary for
the continued operation and maintenance of the Generating Assets (as defined
in the Holdings Credit Agreement) and the conduct of the business of the Loan
Parties. Operating Expenses shall exclude (to the extent included) Lease
Obligations (except Supplemental Rent payable by Lessee pursuant to Section
6.7 of the Participation Agreement) and shall include (to the extent excluded)
Designated Lease Liabilities (other than Lease Obligations).

         "ORGANIC DOCUMENTS" shall mean, (i) with respect to any Person that is
a corporation, its certificate of incorporation, its by-laws and all shareholder
agreements, voting trusts and similar arrangements applicable to any of its
authorized shares of capital stock, (ii) with respect to any Person that is a
limited partnership, its certificate of limited partnership and partnership
agreement, (iii) with respect to any Person that is a limited liability company,
its certificate of formation and its limited liability company agreement and
(iv) with respect to any Person that is a trust, its certificate of formation
and trust agreement, in each case, as from time to time amended, supplemented,
amended and restated, or otherwise modified and in effect from time to time.

         "ORIGINATOR" shall have the meaning given such term in Section 21.8 of
the Participation Agreement.

         "OVERDUE RATE" shall mean the lesser of (a) the highest interest rate
permitted by Applicable Law and (b) to the extent the relevant overdue amount
(i) accrues interest or Yield, an interest rate per annum equal to the Interest
Rate or the Yield Rate, as applicable, plus 2% per annum, or (ii) does not
accrue interest or Yield, the Alternate Base Rate plus 2% per annum.

         "OWNER" shall have the meaning given such term in Section 12.6(a) of
the Lease.

                                     30
<PAGE>

                                                                            PAGE

         "PARTICIPANT" shall mean any Investor or Noteholder.

         "PARTICIPATION AGREEMENT" shall mean the Participation Agreement,
dated as of June 23, 2000, among Lessee, Guarantor, Lessor, the Noteholders, the
Initial Investor, Trustee, Collateral Agent and Agent.

         "PARTNERSHIP" shall mean a general partnership, limited partnership,
joint venture or similar entity in which Lessee or Guarantor, as the case may
be, or a Subsidiary is a partner, joint venturer or equity participant.

         "PAYMENT DATE" shall mean each Interest Payment Date and any other date
on which a payment is otherwise due by the Lessor to the Noteholders or
Investors under the Basic Documents.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.

         "PENSION PLAN" shall mean with respect to any Person a "pension
plan," as such term is defined in Section 3(2) of ERISA, which is subject to
Title IV of ERISA (other than a multiemployer plan as defined in Section
4001(a)(3) of ERISA), and to which such Person or any corporation, trade or
business that is, along with such Person a member of a Controlled Group, has
any liability, including any liability by reason of having been a substantial
employer within the meaning of Section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing
sponsor under Section 4069 of ERISA.

         "PERCENTAGE INTEREST" shall mean, relative to any Investor or
Noteholder, the ratio of the outstanding principal amount of all Advances or
Investor Amounts held by such Noteholder or Investor, as the case may be, to the
aggregate outstanding principal amount of all Advances.

         "PERMITS" shall mean those permits, licenses, registrations,
certificates, approvals and consents required by Applicable Law or any Authority
in connection with the ownership, delivery, installation, use and operation of
the Leased Equipment.

                                     31
<PAGE>

                                                                            PAGE

         "PERMITTED CONTEST" shall mean actions taken by a Person to contest
in good faith, by appropriate proceedings initiated timely and diligently
prosecuted, the legality, validity or applicability to the Leased Equipment or
any part thereof or any interest therein of any Person of (a) any law,
regulation, rule, judgment, order, or other legal provision or judicial or
administrative requirements, (b) any term or condition of, or any revocation
or amendment of, or other proceeding relating to, any authorization or other
consent, approval or other action by any Authority or (c) any Lien or Tax, if
the initiation and prosecution of such contest would not: (i) involve a risk
of any criminal liability being incurred by or, other than with respect to
contests relating to Taxes, a Material Adverse Effect on, such Indemnitee;
(ii) materially and adversely affect the security interests created by the
Basic Documents or the rights and interest of Lessor in or to any of the
Leased Equipment or the right of Lessor, any Investor or any Noteholder to
receive payment of all or any amount payable under the Basic Documents; (iii)
permit, or pose a risk of, the sale or forfeiture of, or foreclosure or, other
than with respect to contests relating to Taxes, the imposition of a Lien on,
any of the Leased Equipment or any part there of or (iv) materially and
adversely affect the Fair Market Value, utility or remaining useful life of
the Leased Equipment or any part thereof or any interest therein or the
continued use, economic operation or maintenance thereof; PROVIDED, further,
that in any event adequate reserves in accordance with GAAP are maintained by
such Person against any adverse determination of such contest.

         "PERMITTED INVESTMENTS" shall mean (i) obligations issued or
unconditionally guaranteed by the United States of America or any agency
thereof and backed by the full faith and credit of the United States of
America, maturing in not more than one year from the date such investment is
made; (ii) certificates of deposit having a final maturity of not more than
one year after the date of issuance thereof of a Noteholder or of any other
commercial bank incorporated under the laws of the United States of America or
any state thereof or the District of Columbia, which bank is a member of the
Federal Reserve System and has a combined capital and surplus of not less than
$500,000,000 and with a senior unsecured debt credit rating of at least "A" by
Moody's and "A" by S&P; (iii) commercial paper of any Noteholder or any
Affiliate thereof having a remaining term until maturity of not more than 180
days from the date such investment is made; (iv) commercial paper of
companies, banks, trust

                                     32
<PAGE>

                                                                            PAGE

companies or national banking associations (in each case excluding the Lessee
and its Affiliates) incorporated or doing business under the laws of the
United States or one of the States thereof, in each case having a remaining
term until maturity of not more than 180 days from the date such investment is
made and rated at least P-1 by Moody's or at least A-1 by S&P; and (v)
repurchase agreements maturing within one year with any financial institution
having combined capital and surplus of not less than $500,000,000 with any of
the obligations described in clauses (i) through (iv) as collateral so long as
title to the underlying obligations pass to Lessor and such underlying
securities shall be segregated in a custodial or trust account for the benefit
of Lessor.

         "PERMITTED LIENS" shall mean (i) the respective rights and interests of
Lessee, Guarantor, the Investors, the Noteholders and Lessor, as provided in any
of the Basic Documents; (ii) materialmen's, mechanics', workers', artisan's,
repairmen's, employees' or other like Liens securing payment of the price of
goods or services rendered in the ordinary course of business for amounts the
payment of which is not overdue or is being contested pursuant to a Permitted
Contest; and (iii) the rights of any sublessee or assignee under a sublease or
an assignment permitted by the terms of the Lease.

         "PERMITTED SECURED INDEBTEDNESS" shall mean Indebtedness permitted by
each of Section 8.2.1(b),(f),(g) or (j) of the Holdings Credit Agreement,
Section 8.1(c), (g), (h) or (k) of each Applicable Participation Agreement (as
defined in the Intercreditor Agreement), and the correlative provisions of any
other Financing Document (as defined in the Intercreditor Agreement).

         "PERSON" shall mean an individual, corporation, partnership, joint
venture, limited liability company, limited liability partnership, association,
joint-stock company, trust, limited liability company, unincorporated
organization or Authority.

         "PLAN" shall mean any "employee benefit plan" (as defined in Section
3(3) of ERISA) that is subject to ERISA, any "plan" (as defined in Section
4975(e)(1) of the Code) that is subject to Section 4975 of the Code, any trust
created under any such plan or any "governmental plan" (as defined in Section
3(32) of ERISA or Section 414(d) of the Code) that is organized in a
jurisdiction having prohibitions on transac-

                                     33

<PAGE>

                                                                            PAGE

tions with government plans similar to those contained in Section 406 of ERISA
or Section 4975 of the Code.

         "PROHIBITED TRANSACTION" shall mean a transaction that is prohibited
under Code Section 4975 or ERISA Section 406 and not exempt under Code Section
4975 or ERISA Section 408 or otherwise.

         "PRUDENT INDUSTRY PRACTICE" shall mean, at any time, (i) any of the
practices, methods and acts engaged in or approved by a significant portion of
the competitive electric generating industry operating in the United States at
such time, or (ii) with respect to any matter to which clause (i) does not
apply, any of the practices, methods and acts which, in the exercise of
reasonable judgment at the time the decision was made, could reason ably have
been expected to accomplish the desired result at a reasonable cost consistent
with good business practices, reliability, safety and expedition. "Prudent
Industry Practice" is not intended to be limited to the optimum practice, method
or act to the exclusion of all others, but rather to be a spectrum of possible
practices, methods or acts having due regard for, among other things,
manufacturers' warranties and the requirements of any Authority of competent
jurisdiction.

         "PUHCA" shall have the meaning given such term in Section 8.3 of the
Participation Agreement.

         "PURCHASE DECISION DATE" shall have the meaning given such term in
Section 12.2 of the Lease.

         "PURCHASE PRICE" shall mean $300 million.

         "QUARTERLY PAYMENT DATE" shall mean the first Business Day of each
January, April, July and October.

         "RATING EVENT" shall mean (i) a downgrading of the Debt Rating of the
Guarantor below BBB+ or Baa2 by S&P or Moody's, respectively or (ii) the Debt

                                     34
<PAGE>

                                                                            PAGE

Rating of the surviving entity, if not the Guarantor, following any merger of
the Guarantor being below BBB+ or Baa2 by S&P or Moody's, respectively.

         "REGISTER" shall have the meaning given such term in Section 6.8.1 of
the Credit Agreement.

         "RELATED PARTY" shall mean, with respect to any Person or its
successors and assigns, an Affiliate of such Person or its successors and
assigns and any director, officer, servant, employee or agent of that Person
or any such Affiliate or their respective successors and assigns; PROVIDED,
that the Trustee shall not be treated as a Related Party to any other party
and neither Lessor nor Trustee shall be treated as a Related Party to the
Contributor.

         "RELEASE" shall mean the release, deposit, disposal or leak of any
Hazardous Material into or upon or under any land or water or air, or otherwise
into the environment, including by shall mean of burial, disposal, discharge,
emission, injection, spillage, leakage, seepage, leaching, dumping, pumping,
pouring, escaping, emptying, placement and the like, except to the extent
subject to and in accordance with a Permit or an express exclusion from the
requirement to have a Permit.

         "RENEWAL LEASE" shall have the meaning given such term in Section
7.1(a) of the Participation Agreement.

         "RENEWAL NOTICE" shall have the meaning given such term in Section
7.1(a) of the Participation Agreement.

         "RENEWAL RENT" shall mean the sum of (i) the interest due on the
Tranche A Loan on any Interest Payment Date during the Renewal Term, pursuant to
the Credit Agreement and the Participation Agreement (but not including
interest on overdue amounts under Section 3.13 of the Participation Agreement or
otherwise), (ii) the interest due on the Tranche B Loan on any Interest Payment
Date pursuant to the Credit Agreement and the Participation Agreement (but not
including interest on overdue amounts under Section 3.13 of the Participation
Agreement or otherwise) and

                                     35
<PAGE>

                                                                            PAGE

(iii) the Yield on the Investor Contributions on any Interest Payment Date
pursuant to the Trust Agreement and the Participation Agreement.

         "RENEWAL TERM" shall have the meaning given such term in Section 7.1 of
the Participation Agreement.

         "RENT" shall mean Basic Rent and Supplemental Rent, collectively.

         "RENT PAYMENT DATE" shall mean each Interest Payment Date.

         "REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30- day notice requirement under ERISA has been waived in regulations
issued by the PBGC.

         "REQUIRED IMPROVEMENT" shall have the meaning given such term in
Section 8 of the Lease.

         "REQUIRED INVESTORS" shall mean as of any date of determination,
Investors whose Investor Amounts in the aggregate constitute more than 66.66% of
the aggregate Investor Amounts.

         "REQUIRED NOTEHOLDERS" shall mean as of any date of determination,
Noteholders (other than EME or any Affiliate of EME) whose Noteholder Amounts
in the aggregate constitute more than 66.66% of the aggregate Noteholder Amounts
held by Noteholders other than EME or any Affiliate of EME.

         "REQUIRED PARTICIPANTS" shall mean Participants whose Noteholder
Amounts and Investor Amounts in the aggregate constitute more than 66.66% of the
sum of (i) the aggregate Noteholder Amounts held by Noteholders other than EME
or any Affiliate of EME and (ii) the aggregate Investor Amounts held by
Investors other than EME or any Affiliate of EME.

                                     36
<PAGE>

                                                                            PAGE

         "RESIDUAL DEFICIENCY PAYMENT" shall have the meaning given such term in
Section 12.6(a) of the Lease.

         "RESPONSIBLE OFFICER" shall mean the Chairman or Vice Chairman of the
Board of Directors, the Chairman or Vice Chairman of the Executive Committee
of the Board of Directors, the President, any Senior Vice President or
Executive Vice President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer, or any Assistant Treasurer; PROVIDED that, with
respect to an Investor or Noteholder, "Responsible Officer" shall include only
those Persons described above who are responsible for corporate trust
functions.

         "RETURN ACCEPTANCE CONDITIONS" shall mean a condition at least as good
as the condition in which the Leased Equipment would have been if the Lessee has
maintained the Leased Equipment in accordance with Section 7.2 of the Lease.

         "REVENUES" shall mean, in respect of any period, all cash amounts
(other than any payment under any intercompany note) received by the Loan
Parties during such period, including revenues from the sale of energy and
capacity, proceeds of business interruption insurance and all interest and other
income earned on amounts in the Cashflow Recapture Fund.

         "S&P" shall mean Standard & Poor's Ratings Services and its successors
and assigns.

         "SALE OPTION" shall have the meaning given such term in Section 12.4 of
the Lease.

         "SCHEDULED CLOSING DATE" shall mean July 10, 2000.

         "SCHEDULED INTEREST PAYMENT DATE" shall mean, as to any Advance, the
last day of each applicable Interest Period (or for any Advance bearing interest
or Yield, respectively, at the Alternate Base Rate, the first day of each
calendar month) and the Final Maturity Date.

                                     37
<PAGE>

                                                                            PAGE

         "SEC" shall mean the United States Securities and Exchange Commission.

         "SECURED OBLIGATIONS" shall mean all obligations of Holdings, the
Lessee, MGE or EMOC, under, with respect to or arising out of, without
duplication, (i) the principal of, premium (if any) and interest on, the Loans
(as defined in the Holdings Credit Agreement), (ii) the obligations of
Holdings under each Lease Obligations Guarantee (as defined in the Holdings
Credit Agreement) with respect to the Lease Obligations, (iii) the obligations
of Holdings under the Letter of Credit Guarantee (as defined in the Holdings
Credit Agreement) and (iv) the principal of, premium (if any) and interest on,
Permitted Secured Indebtedness subject of a Designation Letter (as defined in
the Intercreditor Agreement).

         "SECURITIES ACT" shall mean the Securities Act of 1933.

         "SECURITY DOCUMENTS" shall mean the Lease and all other security
documents hereafter delivered to the Agent, granting a Lien on the Leased
Equipment to secure the obligations and liabilities of the Lessee under the
Lease.

         "SEVERABLE IMPROVEMENT" shall have the meaning given such term in
Section 8 of the Lease.

         "SUBSIDIARY" shall mean, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person.

         "SUPPLEMENTAL RENT" shall mean any and all amounts, liabilities and
obligations other than Basic Rent which Lessee assumes or agrees or is otherwise
obligated to pay under the Lease or any other Basic Document (whether or not
designated as Supplemental Rent) to Lessor, any Investor, any Noteholder or any
other Person, including indemnities and damages for breach of any covenants,
representations, warranties or agreements.

                                     38
<PAGE>

                                                                            PAGE

         "TANGIBLE NET WORTH" shall mean the net worth of Guarantor and its
Subsidiaries (determined on a consolidated basis in accordance with GAAP)
after subtracting therefrom the aggregate amount of any intangible assets of
Guarantor and its Subsidiaries (determined on a consolidated basis in
accordance with GAAP), including goodwill, franchises, licenses, patents,
trademarks, trade names, copyrights, service marks and brand names.

         "TAX ADVANCE" shall have the meaning given such term in Section 6.3(g)
of the Participation Agreement.

         "TAX BENEFIT" shall have the meaning set forth in Section 6.3(e) of the
Participation Agreement.

         "TAX CLAIM" shall have the meaning given such term in Section 6.3(g) of
the Participation Agreement.

         "TAXES" and "TAX" shall mean any and all fees (including, but not
limited to, documentation, recording, license and registration fees), taxes
(including, but not limited to, income (whether net, gross or adjusted gross),
gross receipts, lease, sublease, sales, rental, use, turnover, value-added,
property, excise and stamp taxes), levies, imposts, duties, charges, assessments
or withholdings of any nature whatsoever, together with any penalties, fines or
interest thereon or additions there to.

         "TAXES PAYABLE" shall have the meaning given such term in Section 4.7
of the Participation Agreement.

         "TERMINATION DATE" shall mean each of the Rent Payment Dates during the
Lease Term identified as a Termination Date on Schedule 3 of the Lease, which
dates shall be the same days on which Basic Rent and Renewal Rent, if any, are
payable under the Lease.

         "TERMINATION EVENT" shall mean (i) a reportable event described in
Section 4043(b) of ERISA and the regulations issued thereunder (other than a
reportable event (a) not subject to the provision for a 30-day notice to the
PBGC under such regula-

                                     39
<PAGE>

                                                                            PAGE

tions or (b) for which a waiver of such 30-day notice is provided in such
regulations), or (ii) the withdrawal of Lessee or Guarantor, as the case may
be, or any of their respective ERISA Affiliates from a Plan during a Plan Year
in which it was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA, or (iii) the distribution of a notice of intent to terminate a Plan or
the treatment of a Plan amendment as a termination under Section 4041 of
ERISA, or (iv) the institution of proceedings to terminate a Plan by the PBGC
under Section 4042 of ERISA, or (v) any other event or condition which to the
knowledge of Lessee or Guarantor, as the case may be, would constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or (vi) the complete or partial withdrawal of
Lessee or Guarantor, as the case may be, or any of their respective ERISA
Affiliates from a Multiemployer Plan or the institution by a fiduciary of any
Multiemployer Plan against Lessee or Guarantor, as the case may be, or any of
their respective ERISA Affiliates of a proceeding to enforce Section
4219(c)(5) of ERISA, provided, that in all such cases, in aggregate at any one
time that the sum of (A), (B) and (C) below exceeds 1.5% of the consolidated
total assets of Lessee or Guarantor, as the case may be, where: (A) is, in the
case of an event of the type referred to in the preceding clauses (i) through
(v), the amount by which the then aggregate current value of all accrued
benefits under all Plans exceeds the then aggregate current value of all
assets of such Plans allocable to such accrued benefits (excluding, for these
purposes, any Plan under which the current market value of Plan assets exceeds
the current value of accrued benefits), (B) is, in the case of an event of the
type referred to in the preceding clause (vi), the amount of the complete or
partial withdrawal liability, and (C) is the outstanding amount of any prior
complete or partial withdrawal liability form a Multiemployer Plan.

         "TERMINATION VALUE" shall mean for any Termination Date the Termination
Values set forth on Schedule 3 of the Lease for such Termination Date.

         "TOTAL ADVANCES" shall mean the aggregate of the Advances of all of
the Noteholders and Investors.

         "TRANCHE" refers in respect of any Note, to whether such Note is a
Tranche A Note or a Tranche B Note.

                                     40
<PAGE>

                                                                            PAGE

         "TRANCHE A BASIC RENT" shall mean the interest due on the Tranche A
Loan on any Interest Payment Date pursuant to the Credit Agreement and the
Participation Agreement (but not including interest on overdue amounts under
Section 3.6 of the Participation Agreement or otherwise).

         "TRANCHE A CHECK" shall have the meaning given such term in Section 3.5
of the Participation Agreement.

         "TRANCHE A LOAN" shall mean the loan made by the Tranche A Noteholders
under Section 2.1.1 of the Credit Agreement.

         "TRANCHE A MAXIMUM AMOUNT" shall mean $255,000,000.

         "TRANCHE A NOTE" shall mean a promissory note of the Lessor dated the
Closing Date in the form of Exhibit A-I attached to the Credit Agreement and all
other promissory notes accepted from time to time in substitution therefor or
replacement thereof.

         "TRANCHE A NOTEHOLDERS" shall mean the holders, from time to time, of
the Tranche A Notes as recorded in the Register pursuant to Section 6.8.1(b) of
the Credit Agreement.

         "TRANCHE B BASIC RENT" shall mean the interest due on the Tranche B
Loan on any Interest Payment Date pursuant to the Credit Agreement and the
Participation Agreement (but not including interest on overdue amounts under
Section 3.6 of the Participation Agreement or otherwise).

         "TRANCHE B LOAN" shall mean the loan made by the Tranche B Noteholders
under Section 2.1.2 of the Credit Agreement.

         "TRANCHE B MAXIMUM AMOUNT" shall mean $36,000,000.

         "TRANCHE B NOTE" shall mean a promissory note of the Lessor dated the
Closing Date in the form of Exhibit A-II attached to the Credit Agreement and
all

                                     41
<PAGE>

                                                                            PAGE

other promissory notes accepted from time to time in substitution therefor or
replacement thereof.

         "TRANCHE B NOTEHOLDERS" shall mean the holders, from time to time, of
the Tranche B Notes as recorded in the Register pursuant to Section 6.8.1(b) of
the Credit Agreement.

         "TRANSACTION COSTS" shall have the meaning given such term in Section
5.1(i) of the Participation Agreement.

         "TRUST" shall have the meaning given such term in Article II of the
Trust Agreement.

         "TRUST AGREEMENT" shall mean the Amended and Restated Trust Agreement,
dated as of June 23, 2000, between Citicorp Del-Lease, Inc. as Contributor and
Investor and Wilmington Trust Company as Trustee.

         "TRUST COMPANY" shall mean Wilmington Trust Company, in its individual
capacity, and any successor trustee under the Trust Agreement in its individual
capacity.

         "TRUST ESTATE" shall mean all estate, right, title and interest of
Lessor in, to and under the Leased Equipment and any part thereof, the Trust
Agreement, the Lease and all of the other Basic Documents and any other
property contributed to the Trust or otherwise acquired by the Trust,
including (i) all amounts of Rent and other payments due or to become due of
any kind for or with respect to the Leased Equipment and any part thereof or
payable under any of the foregoing, (ii) any or all payments or proceeds
received by Lessor after the termination of the Lease with respect to the
Leased Equipment and any part thereof as the result of the sale, lease or
other disposition thereof, and (iii) proceeds of the investments in the Notes
and Certificates, together with any other moneys, proceeds or property at any
time received by Lessor under or in connection with the Basic Documents but
in any case specifically excluding Excluded Amounts.

                                     42
<PAGE>

                                                                            PAGE

         "TRUSTEE" shall have the meaning given such term in Article II of the
Trust Agreement.

         "TYPE" means, relative to any Advance, the portion thereof, if any,
being maintained as a Base Rate Advance or a LIBO Rate Advance.

         "UCC" shall mean the Uniform Commercial Code of New York or any other
applicable jurisdiction.

         "WELFARE PLAN" shall mean, with respect to any Person, a "welfare plan"
as such term is defined in section 3(1) of ERISA to which such Person or any
Affiliate of such Person may have any liability or contingent liability.

         "YIELD" shall have the meaning given such term in Section 3.3 of the
Participation Agreement.

         "YIELD AMOUNT" shall mean for any Interest Period, an amount equal to
the applicable Yield on the aggregate Investor Amount.

         "YIELD RATE" shall mean the applicable rate payable from time to time
on the Certificates for each Interest Period during the Lease Term, which rate
for each Interest Period then applicable (i) relating to a LIBO Rate Advance
shall be equal to the LIBO Rate for such Interest Period plus the Applicable
Margin (subject to Section 4.1 of the Participation Agreement), each such rate
to be determined by the Agent and (ii) relating to an Alternative Base Rate
Advance shall be equal to the Alternative Base Rate in effect during such
Interest Period plus the Applicable Margin.

                                     43

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