Document:

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                                                                    EXHIBIT 10.1

                              POWER PUT AGREEMENT

     This Power Put Agreement (this "Agreement") is entered into as of
September 19, 1986 and it replaces in its entirety that certain agreement,
between Project Orange Associates, L.P. ("Seller") and Niagara Mohawk Power
Corporation ("Buyer") (each a "Party", and collectively "the Parties"). The
Parties anticipate entering into one or more transactions that will be governed
by this Agreement.

                             W I T N E S S E T H:

     WHEREAS, Seller and Buyer are parties to an agreement (the "Power Purchase
Agreement"), dated as of September 19, 1986 and amended April 7, 1989 and
August 20, 1996; and

     WHEREAS, the Parties and several other independent power producers ("IPPs")
have entered into a Master Restructuring Agreement dated July 9, 1997 ("MRA")
pursuant to which the IPPs have agreed to amend, amend and restate or terminate
each of their existing power purchase agreements with Buyer pursuant to the
terms and conditions set forth in the MRA and in anticipation of the
introduction of competition in wholesale and retail electricity markets and the
restructuring of Buyer's electric operations; and

     WHEREAS, the Parties wish to amend and restate their Power Purchase
Agreement so that, as of the Effective Date, as defined in the MRA, the Power
Purchase Agreement shall thereafter consist of this Agreement and the indexed
swap agreement (the "Indexed Swap") which the Parties will enter into, or have
entered into concurrently with this Agreement, pursuant to the MRA, and which
will become effective as of the Effective Date; and

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     WHEREAS, Buyer owns certain interconnection facilities connected to
Seller's Plant which are operated and maintained in accordance with the
Interconnection Agreement between Buyer and Seller dated January 13, 1992; and

     WHEREAS, Buyer and Seller desire to amend such Interconnection Agreement.

     NOW, THEREFORE, in consideration of the mutual obligations and undertakings
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged the Parties hereto agree as
follows:

I.   Amendment and Restatement, Effective Date and Term

     1.1  As of the Effective Date, the Power Purchase Agreement shall be
amended and restated in its entirety so that such agreement shall consist, on
and after the Effective Date, of this Agreement and the Indexed Swap.

     1.2  Notwithstanding the foregoing, except to the extent specifically
amended, waived or otherwise addressed herein, the rights and obligations of the
Parties which accrue and have accrued under the Power Purchase Agreement prior
to the Effective Date shall be enforceable and shall be performed in accordance
with the Power Purchase Agreement without regard to the amendment and
restatement thereof as set forth herein and in the Indexed Swap.

     1.3  The Agreement shall take effect as the Effective Date. The
effectiveness of the provisions in respect of the put option in Section III
below shall expire at the end of the Proxy-Market Price Period, but in no event
later than at the end of ten (10) Contract Years. The effectiveness of all other
provisions of this Agreement shall expire at the end of ten (10) Contract Years,
unless otherwise provided below.

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II.  Representations

     Each Party represents to the other Party that (i) it is duly organized and
validly existing under the laws of the jurisdiction of its organization or
incorporation and, if relevant under such laws, in good standing; (ii) it has
the power to execute this Agreement and any other documentation relating to this
Agreement to which it is a party, to deliver this Agreement and any other
documentation relating to this Agreement that is required by this Agreement, to
deliver and to perform its obligations under this Agreement and has taken all
necessary actions to authorize such execution, delivery and performance; (iii)
such execution, delivery and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional documents, any order or
judgment of any court or other agency or government applicable to it or any of
its assets or any contractual restriction binding on or affecting it or any of
it assets; (iv) all governmental and other consents that are required to have
been obtained by it with respect to this Agreement have been obtained and are in
full force and effect and all conditions of any such consents have been complied
with; and (v) its obligations under this Agreement constitute its legal, valid
and binding obligations, enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or law)).

III. Power Put Option

     3.1  Power Put Quantity and Pricing. At the option of Seller, Seller shall
have the right to put (i) energy to Buyer up to the specified contract quantity
of electricity set forth in

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Attachment A (including energy subject to the Overgeneration Amount), and (ii)
capacity, which is subject to both seasonal variation and degradation associated
with the contract quantity of electricity, in each case, for each Interval
during the immediately succeeding Settlement Period, and Buyer shall be
obligated to take and pay for such energy and capacity from Seller at the Proxy-
Market Price or the Market Price and, if applicable, the Market Capacity Price,
as the case may be. Energy and associated capacity in excess of the Interval
Quantity shall not be subject to this Agreement and, at the option of Seller,
may be sold to third parties without an obligation to offer such energy and
capacity to Buyer.

     3.2  Energy and Capacity Subject to Put Options. The right of Seller to put
energy and capacity to Buyer hereunder shall be limited to energy and associated
capacity of Seller's Plant, subject to Seller's rights to assign this Agreement
pursuant to the assignment provisions contained herein. Seller shall not object
to Buyer's inclusion of all capacity associated with the contract quantity of
electricity pursuant to the terms hereof as capacity available to Buyer for
regulatory purposes.

     3.3  Notice of Put Exercise and Length of Exercise Period. Seller shall
have the right to put energy and capacity to Buyer for periods ranging for a
minimum period of time of one hour to a maximum period of one month. On or prior
to 12:00 p.m. noon of the business day two days prior to the first day of the
month, Seller shall provide to Buyer a dynamic schedule showing, on an hour-by-
hour basis, the projected deliveries of energy and capacity to Buyer for the
following calendar month. Seller shall have the right to update such dynamic
schedule on an hourly basis by providing notice of the change, in writing or
through electronic telecommunications, no less than thirty minutes prior to the
start of the hour in which the change

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to the schedule is to be effected.

     3.4  Payment Notices and Payment Dates. After netting the amounts owing
pursuant to the payment provisions of this section, Seller shall provide Buyer
with a Notice of any payment due for energy and/or capacity put to Buyer during
each Settlement Period on or before the 5th business day of the following
calendar month, unless Seller and Buyer agree otherwise. Payments set forth in a
Notice shall be due on the associated Payment Date. The Buyer and Seller agree
that the Notice may at times include estimated electricity prices or quantities
as applicable to the Settlement Period. Buyer agrees to make payment to Seller
based upon these estimated amounts on the Payment Date. However as soon as
practicable, Seller will provide Buyer with a revised Notice that contains the
actual electricity prices and quantities for the applicable Settlement Period.
The Buyer or Seller, as the case may be, shall remit any payment or credit due
under the revised Notice on the next Payment Date. Interest shall not be applied
to such adjustments.

     3.5  Payment Disputes. If either Party, in good faith, disputes any part of
any Notice of a payment obligation, that Party shall provide a written
explanation of the basis for such dispute and the undisputed portion of the net
payment obligations set forth in such Notice shall be paid by the party
obligated to pay such amounts no later than the applicable Payment Date. Any
adjustment under this Section shall bear interest at the prime rate for U.S.
currency as published from time to time under "Money Rates" in The Wall Street
Journal, from and including the Payment Date any such underpayment or
overpayment was originally due but excluding the date on which such underpayment
or overpayment is finally settled by the Parties hereto, or in the event the
Parties hereto are unable to settle such matter, such matter shall be

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settled by an independent nationally recognized public accounting firm mutually
selected by the Parties whose determination shall be final and binding on the
Parties hereto and whose fees and expenses shall be borne by the Party found to
be at substantial fault by such independent nationally recognized public
accounting firm. If the independent public accounting firm finds that there is
no substantial fault on the part of either Party, each Party shall be
responsible for it own fees and expenses. No Notice (or payment obligation
thereunder) shall be subject to this Section unless a notice of dispute is given
with respect thereto within one year of the Payment Date applicable to such
Notice.

     3.6  Buyer's Right of First Refusal. If Seller determines not to
exercise its rights to put energy and capacity to Buyer, Seller may sell any
energy or capacity associated with the Interval Quantity or the contract
quantity of electricity set forth in Attachment A to third parties, provided
Seller has first offered to sell energy and capacity to Buyer at the Proxy
Market Price or Market Price, whichever is applicable, and the Market Capacity
Price, if applicable, and Buyer has declined the opportunity to purchase such
energy and capacity.

     With respect each possible sale, Seller shall provide Buyer with notice of
Seller's intention to sell energy and/or capacity to one or more third parties.
Such notice shall specify the quantity of energy and/or capacity and the
delivery point on Buyer's transmission or distribution system, if applicable.
Such notice shall be given as far in advance of the time of the anticipated sale
as is reasonable in the circumstances.

     After receiving Seller's notice, Buyer shall advise Seller as promptly as
is reasonable in the circumstances whether Buyer wishes to purchase such energy
and capacity.

     Seller and Buyer acknowledge that their views of what notice is
"reasonable in the

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circumstances" may change from time to time. Also, notification for sale of
energy and/or capacity to a third party shall be completed within the FERC
approved notification period for market participants to submit day-ahead bids to
the New York Independent System Operator. Accordingly, each agrees to discuss
and make reasonable revisions to notice periods whenever requested by the other.

     Until the parties agree otherwise, the following notice periods shall
apply to sales of the indicated durations:

     (a)  for energy and/or capacity sales for one hour up to and including one
          week - Seller shall notify Buyer of such request, by 9:00 a.m. two
          business days prior to the start of the energy and/or capacity sale
          and Buyer shall respond no later than four hours from such request;

     (b)  for energy and/or capacity sales for more than one week up to and
          including one month - Seller shall notify Buyer of such request, by
          9:00 a.m. three business days prior to the start of the energy and/or
          capacity sale and Buyer shall respond no later than one business day
          from such request;

     (c)  for energy and/or capacity sales for more than one month up to and
          including twelve months - Seller shall notify Buyer of such request,
          by 9:00 a.m. five business days prior to the start of the energy
          and/or capacity sale and Buyer shall respond no later than three
          business days from such request; and

     (d)  for energy and/or capacity sales for more than twelve months -Seller
          shall notify Buyer of such request, by 9:00 a.m. seven business days
          prior to the start of the energy and/or capacity sale and Buyer shall
          respond no later than five business

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          days from such request.

     All notifications by Seller and responses by Buyer described herein shall
be made during normal business hours (8:00 a.m. to 5:00 p.m.). In the event that
Buyer fails to respond to Seller's request within the specified time period,
Buyer shall be deemed to have waived its rights to such energy and/or capacity
and Seller shall have the right to proceed with the sale of such energy and/or
capacity to a third party.

IV.  Required Payments for Changes in Costs

     4.1  Required Netting Payments for Cost Changes. On each Payment Date,
Buyer shall be obligated to pay to Seller (to the extent that such number is
positive) and Seller shall be obligated to pay Buyer (to the extent that such
number is negative and in such case the absolute value of such number) (x) the
difference between (A) any increase as compared to the costs under Seller's
contractual arrangements with Buyer as of January 1, 1997 during the associated
Settlement Period in (i) Buyer's local distribution system gas transportation
and fixed and variable charges and retainages actually incurred by Seller, and
(ii) electrical interconnection, costs and costs associated with industry
reliability standards actually incurred by Seller (including any increase in
cost related to Seller's compliance with Niagara Mohawk's Electric System
Bulletin #756 dated December, 1997), and (B) any decreases as compared to the
costs under Seller's contractual arrangements with Buyer as of January 1, 1997
during the associated Settlement Period in those costs listed in (i) and (ii)
above, and (y) any increase as compared to the costs under Seller's contractual
arrangements with Buyer as of January 1, 1997 during the associated Settlement
Period in costs incurred by Seller caused by changes in federal, state or local
laws, rules or regulations; provided that this clause (y) shall only be
effective during the

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Proxy-Market Price Period and any periods thereafter during which like
adjustments in costs are also recovered by any entity that owns any of Buyer's
non-nuclear generating assets.

     4.2  Certain Other Cost Additions. On each Payment Date, Buyer shall be
obligated to pay to Seller any increase as compared to the costs under Seller's
contractual arrangements with Buyer as of January 1, 1997 in electrical
transmission costs or access or other charges, which are actually incurred by
Seller during the preceding calendar month while physically delivering
electricity to (x) Buyer during the Proxy-Market Price Period or (y) an ISO/PE
following the Proxy-Market Price Period; provided that this clause (y) shall
only be effective during the periods when like increases in costs or charges are
then also incurred by any entity that owns any of Buyer's non-nuclear generating
assets.

     4.3  Reactive Power, Voltage Support Services and Line-Loss Charges. Buyer
and Seller acknowledge that the contract prices under this Agreement do not
include charges for reactive power, voltage support services or line-losses. In
the event that Buyer's tariffs require Seller to pay Buyer for reactive power or
line-losses during periods when the Seller's generating facilities are
generating electricity, then Seller shall be entitled to reimbursement by Buyer
in an amount equal to all reactive power charges and/or line-loss charges or
costs actually incurred by Seller during the associated Settlement Period. In
addition, in the event (i) under any ISO tariff, Seller is required to provide
voltage support services, as defined by such ISO tariff, Buyer shall pay to
Seller on each Settlement Date any and all voltage support service payments made
by the ISO to Buyer in the associated Settlement Period which are attributable
to the voltage support services provided by Seller, and (ii) the ISO charges
Seller for any line-losses, then Seller shall be entitled to reimbursement by
Buyer in an amount equal to all such line-loss charges incurred

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by Seller during the associated Settlement Period.

     4.4  Payment Notices and Payment Dates. After netting the amounts owing
pursuant to the payment provisions of this section, Seller shall provide Buyer
with a Notice of any payment due for energy and/or capacity put to Buyer during
each Settlement Period on or before the 5th business day of the following
calendar month, unless Seller and Buyer agree otherwise. Payments set forth in a
Notice shall be due on the associated Payment Date. The Buyer and Seller agree
that the Notice may at times include estimated electricity prices or quantities
as applicable to the Settlement Period. Buyer agrees to make payment to Seller
based upon these estimated amounts on the Payment Date. However as soon as
practicable, Seller will provide Buyer with a revised Notice that contains the
actual electricity prices and quantities for the applicable Settlement Period.
The Buyer or Seller, as the case may be, shall remit any payment or credit due
under the revised Notice on the next Payment Date. Interest shall not be applied
to such adjustments.

     4.5  Payment Disputes. If either Party, in good faith, disputes any part of
any Notice of a payment obligation, that Party shall provide a written
explanation of the basis for such dispute and the undisputed portion of the net
payment obligations set forth in such Notice shall be paid by the Party
obligated to pay such amounts no later than the applicable Payment Date. Any
adjustment under this Section shall bear interest at the prime rate for U.S.
currency as published from time to time under "Money Rates" in The Wall Street
Journal, from and including the Payment Date any such underpayment or
overpayment was originally due but excluding the date on which such underpayment
or overpayment is finally settled by the Parties hereto, or in the event the
Parties hereto are unable to settle such matter, such matter shall be

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settled by an independent nationally recognized public accounting firm mutually
selected by the Parties whose determination shall be final and binding on the
Parties hereto and whose fees and expenses shall be borne by the Party found to
be at substantial fault by such independent public accounting firm. If the
independent public accounting firm finds that there is no substantial fault on
the part of either Party, each Party shall be responsible for it own fees and
expenses. No Notice (or payment obligation thereunder) shall be subject to this
Section unless a notice of dispute is given with respect thereto within one year
of the Payment Date applicable to such Notice.

V. Delivery of Electricity

     Seller shall deliver the electricity to the system of Buyer at
approximately 115,000 volts, 60 Hertz and 3 Phase. The installation of the
electrical connections and the operation of the Plant must meet or exceed the
requirements of Niagara Mohawk's Electric System Bulletin #756 (including
Appendix C), dated December, 1997 including the exceptions and clarifications
included in Attachment B of this Agreement, or, if applicable, the standards of
the ISO/PE. A copy of Niagara Mohawk's Electric System Bulletin #756 (including
Appendix C), dated December, 1997 is incorporated herein by reference. Seller
shall deliver electricity to the Delivery Point.

     Buyer's acceptance of and obligation to pay for electricity produced by
Seller may from time to time be suspended for any periods of time during which,
for reasons of necessary maintenance, repair, system emergency, safety or
similar actions, Buyer's transmission system is temporarily physically unable to
accept such electricity. Buyer shall give reasonable notice

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under the circumstances of the need for such disconnecting to Seller, upon
receipt of which Seller shall carry out the required action without delay.
During any such period of suspension, Buyer shall use its best efforts to
restore Buyer's capability to accept delivery of electricity as promptly as
possible. Buyer will use its best efforts to schedule any planned outages upon
consultation with Seller and commensurate with Seller's schedule for planned
maintenance or other outages. Buyer shall bear any costs incurred by it in
connection with any such disconnection or reconnection. All deliveries of power
which are subject to any such suspension may be rescheduled at the option of the
Seller. Seller shall have the right to shut down the operation of the Plant for
any reason and for any period whatsoever upon reasonable notice to Buyer.

VI. Coordinated Maintenance

     Seller shall have the right to shut down the operation of the Plant or to
temporarily disconnect it from Buyer's system whenever and for such periods of
time as may be necessary for maintenance, safety, or emergency reasons. Seller
shall bear its own cost of disconnection and reconnection. Annually, Seller
shall provide Buyer with a five year schedule detailing the projected
maintenance requirements of Seller's Plant, including the number and duration of
planned outages. At least three (3) months before the end of the annual period
preceding the annual period to be scheduled, Seller shall provide Buyer with
Seller's planned maintenance schedule. Prior to the final week before the
planned maintenance, Seller may make changes to the planned maintenance schedule
for its Plant upon advance written notice to Buyer. Buyer shall have the right
to require seller to move the planned maintenance date for Seller's Plant to a
date not earlier than nor later than one (1) day from the scheduled date
provided (i) it is

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reasonably possible for Seller to arrange such rescheduling, (ii) Buyer
reimburses Seller for any costs (including any applicable penalties) of
rescheduling the planned maintenance date, (iii) such rescheduling will not
cause Seller to violate any applicable equipment warranties, and (iv) all
deliveries of electricity which are affected by such changes can be rescheduled
at the option, if Seller so requires. Notwithstanding the foregoing, Seller may
perform maintenance, whether planned or unplanned, at any time the Seller is not
putting electricity to Buyer under this Agreement.

VII. Metering

     Electricity delivered by Seller hereunder shall be measured by electric
watthour meters of a type approved by the Commission. The meters shall be
located in Seller's Plant. These metering facilities will be installed, owned
and maintained by Buyer and shall be sealed by Buyer, with the seal broken only
upon occasion when the meters are to be inspected, tested or adjusted and
representatives of both Buyer and Seller are present. The meter and installation
costs shall be borne by Seller. The meters shall be maintained in accordance
with the rules set forth in 16 NYCRR Part 92. Buyer will guarantee the
installation of any meter and its accuracy for a period of one year from the
date that said meter is installed. Any repair or replacement required during the
initial year for any such meter will be at the expense of Buyer. In the event
that any meter is found to be inaccurate after the initial year, Buyer will
repair or replace the same as soon as possible at the expense of Seller. Each
Party shall have the right at all reasonable times; upon giving not less than
five (5) days notice to the other Party for the purpose of permitting the other
Party to be present at the inspection, to inspect, and test said meters and, if
found defective, Buyer shall adjust, repair or replace the same at the expense
of Seller. Any

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test or inspection requested by a Party shall be at the expense of that Party.
Seller shall have the right, but not the obligation, to read all meters
installed and maintained pursuant to this Section. Buyer agrees to make
available to Seller, at no additional cost, all information of the kind which is
available to the Buyer as of the Consummation Date and which is captured by the
Buyer's meter including, but not limited to, reactive power and voltage support
services. Upon written request, Buyer shall provide Seller's operating personnel
with appropriate written instructions and training to enable such personnel to
read the meters.

     If a meter fails to register, or if the measurement made by a meter is
found to be inaccurate by more than the limits defined in 16 NYCRR Part 92, then
an adjustment shall be made correcting all measurements made by the inaccurate
or defective meter for (a) the actual period during which inaccurate
measurements were made, if that period can be determined to the satisfaction of
the Parties; or (b) if the actual period cannot be determined to the mutual
satisfaction of the Parties, one-half of the period from the date of the last
previous test of the meter. To the extent that the adjustment period covers a
period of deliveries for which payment has already been made by Buyer, a payment
corresponding to the adjustment for that period shall be made by the Party
against whom the adjustment runs, to the other Party, not later than the twenty-
fifth (25) day of the month following the month in which the paying Party
receives notice from the other Party that such a payment is due. Seller may
elect to install its own metering equipment in addition to Buyer's metering
equipment. Such metering equipment shall meet the requirements of 16 NYCRR Part
92. Should any metering equipment installed by Buyer fail to register during the
term of this Agreement, the Parties shall use Seller's metering equipment, if
installed, to determine the amount of electricity delivered to Buyer. On a day
or days on which

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neither Buyer's nor Seller's metering equipment is in service, the quantity of
electricity delivered shall be determined in such manner as the Parties shall
agree.

VIII.  Maintenance of Interconnection

       Seller shall install, own and maintain the portion of its interconnection
with Buyer's transmission system that includes the generator output leads, the
generator step-up transformer and the 115 kV tap, together with associated
equipment. The 115 kV tap line from the dead-end tower to Buyer's 115 kV
transmission system will be owned and maintained by Buyer. The Interconnection
Agreement between Buyer and Seller dated January 13, 1992 shall remain in full
force and affect except that it shall extend to, and terminate at the end of
this Agreement.

IX.    Force Majeure

       In the event either Party hereto is rendered unable, wholly or in part,
by Force Majeure to carry out its obligations under the Agreement, other than
the obligation to make payments of amounts due hereunder, it is agreed that upon
notice, with reasonably full particulars of such Force Majeure given by such
Party to the other Party in writing within a reasonable time frame after the
occurrence of the cause relied upon, then the obligation or obligations
hereunder of the party giving such notice, so far as they are affected by such
Force Majeure, shall be suspended during the continuance of an inability so
caused. Such cause shall, as far as possible, be remedied with all reasonable
dispatch. All deliveries of power which are subject to any such Force Majeure
event may be rescheduled by Seller, at Sellers option, upon a mutually agreeable
schedule.
X.     Relocation of Power Lines

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     10.1  In the event it becomes necessary for Buyer to relocate or
rearrange its transmission system to which Seller is connected, Buyer shall
advise Seller at least one year in advance in writing. If such relocation or
rearrangement is ordered or required by a Governmental Authority, Buyer shall
give prior written notice to Seller equal in time to the notice given to Buyer
by such Governmental Authority. Buyer shall consult with Seller on the new
facilities that Buyer shall propose to reestablish the connection. Such new
facilities shall be reasonably satisfactory to Seller and, at a minimum, shall
provide Seller with at least as much output capacity as with the prior
connection facilities. Buyer shall bear the full cost and expense of
reestablishing the connection to the Seller. Buyer shall use its best efforts to
minimize the duration of any disruption to Seller's service during the
relocation or rearrangement of Buyer's transmission facilities. Not withstanding
anything to the contrary contained herein, the provisions of this Section 10.1
shall not apply to the abandonment of power lines.

     10.2  In the event that Buyer determines it is necessary to retire or
abandon its transmission system to which Seller's Plant is connected, Buyer
shall advise Seller, at least one year in advance, in writing, indicating
Buyer's annual cost of the transmission facilities dedicated exclusively to
accommodate the output of the Plant. Seller shall then have the option of paying
Buyer for these annual costs or of providing alternate interconnection to
Buyer's transmission system. Such alternate interconnection may be the purchase
by Seller of Buyer's existing 115 kV facilities at the depreciated book cost or
salvage value, whichever is lower, but not less than zero. In the event Seller
elects to pay Buyer the annual charges associated with these facilities, said
charges shall be recomputed as of January 1 of every year.

XI.   Qualifying Facility Monitoring and Status

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     11.1  Buyer shall have no contractual right and shall waive any other right
which it might have under state or federal law to demand information from
Seller, or any other person, including but not limited to any Governmental
Authority, with respect to such Seller's status as a qualifying facility ("QF
Status") under state and/or federal law.

     11.2  Seller shall have the right, but not the obligation, in its sole
discretion to obtain and/or maintain its QF Status. Buyer's rights and
obligations, including without limitation its obligation to pay for electricity
produced by Seller as set forth hereunder, shall continue as a matter of
contractual right regardless of whether the Seller maintains its QF Status. Any
failure by Seller to comply with the requirements applicable to QF Status under
New York law (including compliance with NYPSL (S) 2(2-a)) shall have no adverse
impact on Seller under this Agreement. In the event Seller wishes to qualify or
perform as an Exempt Wholesale Generator under Section 32 of PUHCA and FERC's
regulations promulgated thereunder, as the same may be amended, modified or
restated from time to time, Buyer shall cooperate with (including, without
limitation, by providing consents and affidavits), and shall not take any action
to oppose, impede or subvert, Seller's efforts to obtain appropriate regulatory
exemptions and approvals, including market-based rate approval. Except to the
extent that the contract prices under this Agreement are or may be based
thereon, during the term of the Agreement, Seller (i) shall waive any statutory
right it may have under Section 66-c of NYPSL pursuant to which Seller may
demand a 6c per kWh minimum power purchase rate from Buyer, and (ii) shall
waive, for itself and for the successors and assigns of its Plant with respect
to such Plant, any statutory right it may have under PURPA or NYPSL to require
Buyer to enter into a power purchase contract or otherwise take the output of
Seller's Plant; provided, however, that until the end of the Proxy-

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Market Price Period Buyer agrees, at Seller's request, to act as agent for
Seller (or, if necessary to effectuate such sales to the New York Power Pool, by
purchase and resale of Seller's capacity and/or energy, at no cost to Buyer) for
the sale on up to a monthly basis, of the Seller's Plant capacity and energy to
the New York Power Pool or any third party, in each case on a nondiscriminatory
basis with respect to Buyer's or any third party's capacity and energy, at no
cost to the Seller. Buyer agrees to use its Reasonable Best Efforts to effect
such sales on the most favorable terms, including price, to the Seller giving
consideration to the quantity, term, and market conditions prevailing at the
time of sale. Nothing contained herein shall be construed to constitute a waiver
by the Seller of any other rights it may have under PURPA, NYPSL, or applicable
law, including rights with respect to back-up services, interconnection,
reactive power or other similar rights, whether or not a contract is required or
desirable.

XII.   Indemnification

       Each Party hereto respectively assumes full responsibility in connection
with the electricity supplied hereunder on its side of the Delivery Point and
for the wires, apparatus, devices and appurtenances used in connection
therewith. Each Party shall indemnify, save harmless and defend the other
against all claims, demands, cost or expense for loss, damage or injury to
person or persons or property in any manner directly or indirectly arising from,
connected with or growing out of the generation, transmission or use of energy
by it on its side of the Delivery Point or for the operation of switching
equipment in connection with said delivery; provided, however, that each Party
shall be liable for all claims of the Party's own employees arising out of any
provision of the Workers' Compensation Law. Each Party shall maintain or cause
to be maintained Workers' Compensation and Employees' Liability Insurance
covering

                                   Page -18-
<PAGE>

their respective employees as required by law.

XIII.  ASSIGNMENT

       13.1 Assignment by Seller. Upon notice to Buyer, Seller may assign or
transfer the Agreement in whole or in part, without the consent of Buyer, (a) as
collateral security for purposes of securing indebtedness, or (b) to any
approved assigned or transferee (an "Approved Assignee"). An Approved Assignee
shall be (i) any person who (x) (A) acquires Seller's Plant, or (B) has a plant
with technical capability that is equal to or greater than the technical
capability of the Seller's plant, and (y) has (A) a long-term unsecured debt
credit rating of no less than investment grade issued by Moody's or S&P or the
equivalent of such rating from another nationally recognized rating agency, or
(B) a net worth calculated in accordance with generally accepted accounting
principles ("Net Worth"), that is equal to or greater than the Net Worth of the
entity making such assignment or transfer on the date of such assignment or
transfer, provided that evidence of such qualifying Net Worth is reasonably
demonstrated to Buyer; or (ii) any Affiliate of Seller; provided (x) such
Affiliate has a long-term unsecured debt credit rating of no less than
investment grade issued by Moody's or S&P or the equivalent of such rating from
another nationally recognized rating agency, (y) such Affiliate has a Net Worth
that is equal to or greater than the Net Worth of the entity making such
assignment or transfer on the date of such assignment or transfer, or (z) Seller
unconditionally guarantees, pursuant to a guarantee in form and substance
reasonably satisfactory to Buyer, the obligations of such Affiliate in
connection with such assignment or transfer. Seller may split and assign the
quantities of electricity and Intervals to Approved Assignees, each in respect
of a lesser quantity and/or Intervals that the full

                                   Page -19-
<PAGE>

amounts thereof hereunder, provided that (a) each such assignment is for 50,000
MWh of electricity per year or any integral multiples thereof and to the extent
that the remaining unassigned balance of the quantity of electricity hereunder
for any such year is less than 50,000 MWh, then for such remaining balance, (b)
each such assignment is for a period of at least one year, and (c) the sum of
all assigned and retained quantities of electricity and Intervals does not
exceed the total quantities of electricity and Intervals hereunder. At the
request of Seller during the individual negotiations and during the term of the
Agreement, Buyer and Seller shall use their Reasonable Best Efforts to mutually
agree upon reasonable alternatives to the assignment qualification contained in
the immediately preceding sentence. Except to the extent expressly provided in
any applicable guarantee, upon any such assignment or transfer, Seller shall be
released and have no further obligations to Buyer hereunder with respect to the
assigned or transferred quantities and/or Intervals.

     13.2  Assignment by Buyer. Buyer shall not assign its rights and
obligations hereunder except as expressly authorized under this Section.

           (a)  Niagara Restructuring. In the event that Buyer restructures its
                ---------------------
corporate structure or assets, including by creating any new entities that hold
significant assets, whether in connection with the Niagara Restructuring or
otherwise, upon notice to Seller (or its assignee hereunder) the Agreement will
be assigned to and assumed by the entity or entities owning all or substantially
all of Buyer's electric transmission and distribution assets or, if separated
from Buyer's electric transmission assets pursuant to such a restructuring
Buyer's electric distribution assets, provided that, upon the effective date of
the restructuring (i) such assignee's performance under this Agreement is
unconditionally guaranteed, pursuant to a guarantee in form and

                                   Page -20-
<PAGE>

substance reasonably satisfactory to Seller (or its assignee hereunder), by each
of the other entities arising out of the restructuring, including any entity
spun-off to Buyer's shareholders or any Affiliate of Buyer holding significant
assets that were held by Buyer prior (or any subsidiary of Buyer) to the
restructuring, unless such assignee has a long-term unsecured debt credit rating
issued by Moody's, S&P or another nationally recognized rating agency that is at
least as favorable as Buyer's long-term unsecured debt credit rating immediately
prior to the effective date of the restructuring, and (ii) if such assignee is
not the entity which will collect from customers the Competitive Transaction
Charge approved by the Commission pursuant to the Commission Approval, such
assignee's performance under this Agreement is unconditionally guaranteed,
pursuant to a guarantee in form and substance reasonably satisfactory to Seller
(or its assignee hereunder), by each of the entities which will collect from
customers the Competitive Transaction Charge provided by the Commission pursuant
to the Commission Approval.

          (b)  Third Party Assignment. Upon notice to Seller (or its assignee
               ----------------------
hereunder), Buyer may assign its rights and obligations under this Agreement to
any third party ("Buyer Assignee") (except those parties referenced in Section
13.2(a) above) provided that the Buyer Assignee has (i) received a long-term
unsecured debt credit rating by Moody's or S&P of at least investment grade or
the equivalent of such rating from another nationally recognized rating agency,
as of the date of consummation of the assignment; or (ii) furnished Seller with
such collateral security as may be reasonably acceptable to Seller in order to
limit Seller's credit risk in connection with such assignment.

                                   Page -21-
<PAGE>

XIV.   Further Assurances

       Subject to the terms and conditions contained herein, upon the request
from time to time of either Party hereto, the other Party shall promptly execute
and deliver or use its Reasonable Best Efforts to cause to be executed and
delivered, such consents, approvals and other instruments, including, without
limitation, assignments of the Agreement as collateral, estoppel certificates
and utility certificates, in form and substance reasonably satisfactory to both
Parties and their respective counsel to implement any financing or other
material business transaction undertaken by the requesting Party.

XV.    Curtailment

       Buyer agrees that its obligation to accept and pay for electricity as
provided herein shall in no event be subject to any curtailment of electricity
under the provisions of 18 C.F.R. (S) 292.304(f) (1997), or any subsequent or
similar rule or regulation adopted by the PSC or the FERC, or any rule or order
of the PSC, the FERC, or any other Governmental Authority interpreting or
applying those provisions or authorizing Buyer to reserve any rights under those
provisions.

XVI.   Wheeling

       Seller shall have the right to have Buyer wheel some or all of the output
of its Plant to third parties pursuant to applicable law, or Buyer's, or other
companies', duly filed transmission and distribution tariffs or schedules.

XVII.  Certain Amendments

                                   Page -22-
<PAGE>

     In the event that Buyer restructures its corporate structure or assets,
including by creating any new entities that hold significant assets, whether in
connection with the Niagara Restructuring or otherwise, Seller (or its assignee
hereunder) shall have the right to replace the Agreement, as applicable, with
power purchase and/or hedging contractual arrangements substantially equivalent
to those that are entered into between the entity(ies) holding the transmission
and/or distribution assets of Buyer or which will collect from customers the
Competitive Transition Charge approved by the Commission pursuant to the
Commission Approval and the entity(ies) holding the non-nuclear generating
assets of Buyer, whether or not such assets are spun-off to Buyer's shareholders
(a "Genco Contract"), provided that the term, price and quantity under the
Agreement shall not be altered thereby, unless any of such terms are materially
and expressly conditioned by certain provisions in the Genco Contract, in which
case appropriate and equitable adjustments in such terms shall be mutually
agreed upon by Buyer or its assignee, as the case may be, and Seller.

XVIII. Persons Bound and Benefited

       This Agreement shall bind and benefit assigns and other successors of the
Parties.

XIX.   Waivers

       No failure on the part of a Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof. No waiver by
a Party of any right hereunder with respect to any matter or default arising in
connection with this Agreement shall be considered a waiver with respect to any
subsequent matter or default.

XX.    Governing Law

       This Agreement shall be governed by the substantive law of New York,
irrespective of

                                   Page -23-
<PAGE>

conflicts of law rules.

XXI.   Execution in Counterparts.

       This Agreement may be executed by the Parties in separate counterparts,
each of which shall be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.

XXII.  Headings.

       Section headings in this Agreement are included herein for convenience of
references only and shall not constitute a part of this Agreement for any other
purpose.

XXIII. Notices.

       All written notifications pursuant to this Agreement shall be in writing
and shall be personally delivered or mailed by certified or registered first
class mail, return receipt requested, as follows:

To Buyer:                                 To Seller:

Niagara Mohawk Power Corporation          Project Orange Associates, L.P.
Director Energy Transactions              c/o GPU International, Inc.
300 Erie Boulevard West                   One Upper Pond Road
Syracuse, New York 13202                  Parsippany, NJ 07054
315-428-3159 (phone)                      Attn: President
315-460-2660 (fax)

Either Party may change its address for notices by notice to the other in the
manner provided above.

XXIV.  Entire Agreement

       This Agreement constitutes the entire agreement between the Parties with
respect to the

                                   Page -24-
<PAGE>

subject matter hereof, and supersedes all prior agreements and understandings,
written or oral, between the Parties with respect thereto.

XXV.   Definitions

As used in this Agreement:

"Affiliate" means, with respect to any Party to this Agreement, any person or
entity which controls, is controlled by, or is under the common control with,
such Party, wherein the term "control" shall mean the power to direct the
management and policies by or of such Party through the ownership of voting
securities, by contract or otherwise.

"Commission" means the New York State Public Service Commission.

"Commission Approval" means a final Commission order setting forth the findings,
authorizations and approvals set forth in Schedule 6.6C of the Master
Restructuring Agreement.

"Competitive Transition Charge" means a charge, however designated, for the
recovery of strandable costs.

"Consummation Date" has the meaning set forth in Section 10.2 of the Master
Restructuring Agreement.

"Contract Quantity" means the amount of electricity (expressed in megawatt
hours) as set forth in Attachment A under the heading Contract Quantity for the
applicable month and which may be adjusted in accordance with Section 3.1, and
shall be subject to the Interval Cap.

"Contract Year" means the period commencing at 11:59:59 p.m. on the Consummation
Date and ending at 11:59:59 p.m. on the first anniversary of the last day of the
month in which the Consummation Date occurs and each successive 12-month period
thereafter to the extent applicable.

                                   Page -25-
<PAGE>

"Delivery Point" means (a) with respect to electricity delivered from the Plant,
the receiving point as set forth in the Interconnection Agreement dated January
13, 1992; and (b) with respect to electricity delivered thereunder from any
other source, any other interconnection on Buyer's transmission system, subject
to Buyer's concurrence which shall not be unreasonably withheld.

"Effective Date" means 11:59:59 p.m. on the Consummation Date.

"FERC" means the Federal Energy Regulatory Commission.

"Force Majeure" as used herein means acts of God, strikes, lockouts, act of
public enemies, wars, blockades, insurrections, riots, epidemics, landslides,
lightning, system emergencies, earthquakes, fires, storms, floods, washouts,
arrests, explosions, force majeure gas supplier interruptions, breakage or
accident to machinery, equipment or transmission or distribution lines or gas
pipelines; provided that the term Force Majeure does not mean or include any
cause which by the exercise of reasonable diligence of the party claiming
suspension could be overcome.

"Governmental Authority" means any federal, state, municipal or local
governmental authority, department, commission, board, agency, body or official,
whether executive, legislative, administrative, regulatory or judicial,
including but not limited to the FERC and the Commission.

"Interval" means 1 hour or such other period of time as Buyer and Seller shall
mutually agree upon, provided that such mutually agreed upon time period may
only be modified upon the prior written consent of Buyer and Seller.

"Interval Quantity" shall mean the amount of electricity scheduled for delivery
to Buyer during each Interval in accordance with Section 3.3 hereof and subject
to Attachment A.

"ISO/PE" means a New York Independent System Operator and Power Exchange.

                                   Page -26-
<PAGE>

"Market Capacity Price" Shall equal zero (i) prior to the ISO/PE Establishment
Date (as defined below) and (ii) thereafter at any time when no separate market
for capacity exists. Commencing on the first day of the month following the
calendar month in which the ISO/PE Establishment Date occurs and only if there
then exists a separate market for capacity, the Market Capacity Price shall mean
the market price paid to sellers for capacity, at the region in which the
Delivery Point is located, established by the ISO/PE capacity auction; provided,
however, that at such time the parties shall conduct good faith negotiations and
diligently endeavor to mutually determine whether to continue the pricing
referred to in clause (i) of the definition of Proxy-Market Price for a mutually
agreed upon additional period of time. Following the Proxy-Market Price Period
and only if there then exists a separate market for capacity, the parties shall
conduct good faith negotiations and diligently endeavor to adjust the applicable
capacity on a basis consistent with the structure of such separate market.

"Market Price" means commencing on the first day of the month following the
calendar month in which the ISO/PE is established, the day ahead locational
based market price (ALBMP") paid to sellers for energy, at the region in which
Delivery Point is located, specified and published by the ISO/PE; provided,
however, that at such time the Parties shall conduct good faith negotiations and
use their Reasonable Best Efforts to mutually determine whether to continue the
pricing referred to in clause (i) of the definition of Proxy-Market Price for a
mutually agreed upon additional period of time.

"Moodys" means Moody's Investor Services.

"Notice" means a notice of payment due pursuant to Section 3.4 and/or Section
4.4 delivered by Seller to Buyer.

                                   Page -27-
<PAGE>

"Overgeneration Amount" means an amount of energy in excess of the Contract
Quantity of Electricity; provided such amount of excess energy shall not exceed
5% of the contract quantity of electricity for the applicable Interval. Seller
shall have the right to put the Overgeneration Amount to Buyer hereunder at the
Proxy-Market Price or the Market Price, as the case may be.

"Payment Date" means the day of the month which is the later of (i) the 25th day
of the calendar month in which a Notice is given by Seller to Buyer; or (ii) the
15th day after delivery by Seller to Buyer of a Notice. In the event that the
Payment Date is a Saturday, Sunday, or legal holiday, the corresponding payment
shall be due on or before the first business day following such Payment Date or
legal holiday, as the case may be .

"Plant" means Seller's generating facility located in Syracuse, New York.

"Proxy-Market Price" means (i) prior to the establishment of the ISO/PE, Buyer's
short-term avoided energy and capacity costs at the transmission voltage level
of Seller's Plant's bus bar and location (or region) of the Delivery Point, as
stated in its tariff approved by the Commission providing for the purchase of
power from PURPA qualifying facilities, which tariff is currently designated as
S.C.-6, as the same may be in effect from time to time, or any successor tariff
thereto or such other price as may be agreed upon by Buyer and Seller, and (ii)
on the first day of the month following the calendar month in which the ISO/PE
is established, the Market Price and, if applicable, the Market Capacity Price;
provided, however, that at such time the Parties shall conduct good faith
negotiations and use their Reasonable Best Efforts to mutually determine whether
to continue the pricing referenced in clause (i) above for a mutually agreed
upon additional period of time. The Proxy-Market Price shall not be reduced or
offset by any costs that Buyer may incur, including, without limitation, costs
for ancillary services,

                                   Page -28-
<PAGE>

transmission services or transition (or stranded) costs.

"Proxy-Market Price Period" means the period commencing on the date of this
Agreement and ending on the first day of the calendar month following the
calendar month in which the ISO/PE has been fully established and functioning,
provided the following conditions have been satisfied during each of the
previous six months:
          (i)   the volumes (in GWh) of energy sales and purchases transacted
                through the ISO/PE in the day ahead market based upon the day
                ahead pricing mechanism adopted by the FERC for the ISO/PE for
                the Upstate Market shall be at least equal to those
                corresponding with the months listed in the following table
                (which GWh shall include the aggregate contract quantities of
                energy during such period under all physical delivery Restated
                Contracts with Gas IPPs and all physical delivery Contracts
                between Buyer and any IPP party to the Master Restructuring
                Agreement entered into in lieu of Fixed Price Swap Contracts,
                regardless of whether the IPPs parties thereto actually effected
                such sales, and all sales on up to a monthly basis of energy
                (other than sales through the ISO/PE) by the IPPs parties to the
                Master Restructuring Agreement which are effectuated by Buyer
                acting as agent for any such IPP);

                    ---------------------- ----------------
                       Month                  GWh
                    ---------------------- ----------------
                       January                4,611
                    ---------------------- ----------------

                                   Page -29-
<PAGE>

                    ---------------------- ----------------
                      February               4,136
                    ---------------------- ----------------
                      March                  4,327
                    ---------------------- ----------------
                      April                  3,827
                    ---------------------- ----------------
                      May                    3,788
                    ---------------------- ----------------
                      June                   3,974
                    ---------------------- ----------------
                      Month                  GWh
                    ---------------------- ----------------
                      July                   4,278
                    ---------------------- ----------------
                      August                 4,160
                    ---------------------- ----------------
                      September              3,793
                    ---------------------- ----------------
                      October                3,856
                    ---------------------- ----------------
                      November               3,896
                    ---------------------- ----------------
                      December               4,361
                    ---------------------- ----------------

            and

     (ii)   only if a separate market for capacity then exists, a minimum of
            5,700 MW of the capacity sales and purchases within the Upstate
            Market have been transacted through the ISO/PE capacity auction
            (which MW shall include the aggregate capacity associated with the
            aggregate contract quantities of energy during such

                                   Page -30-
<PAGE>

            period under all physical delivery Restated Contracts with Gas IPPs
            and all physical delivery Contracts between Buyer and any IPP party
            to the Master Restructuring Agreement entered into in lieu of Fixed
            Price Swap Contracts, regardless of whether the IPPs parties thereto
            actually effected such sales, and all sales on up to a monthly basis
            of capacity (other than sales through the ISO/PE) by the IPPs
            parties to the Master Restructuring Agreement which are effectuated
            by Buyer acting as agent for any such IPP).

Notwithstanding the foregoing, the Proxy-Market Price Period may be extended or
terminated upon the mutual agreement of the parties.

     In the event the ISO/PE does not provide adequate information to confirm
the monthly sales within the Upstate Market transacted through the ISO/PE, the
parties agree to renegotiate the conditions based on the original intent of the
Master Restructuring Agreement (as defined by the "Proxy-Market Price Period",
page 28, Attachment A-8 of the "Terms of Amended Power Purchase Agreements,
Restated Contracts and Fixed Price Swap Contracts").

"PURPA" shall mean the Public Utility Regulatory Policies Act of 1978, as
amended.

"Reasonable Best Efforts" means, with respect to any Party, such Party's
diligent pursuance of the course of action or result stated as determined by
such Party itself in good faith, but shall not require such Party to pay any sum
or other consideration or incur or assume any liability or obligation that is
not otherwise expressly required to be paid, incurred or assumed pursuant to
this Agreement, excluding (i) normal and customary incidental out-of-pocket
costs and expenses and (ii) attorneys' fees (except, with respect to any IPP,
attorneys' fees required to be paid by Buyer pursuant to the IPPs' Special
Counsel Fee Letter or the IPPs' Local Regulatory Counsel

                                   Page -31-
<PAGE>

Fee Letter).

 "Restated Contracts" has the meaning set forth in Exhibit A to the Master
Restructuring Agreement.

"Settlement Period' means each calendar month during the term of this Agreement.
AS&P" means Standard & Poor's Corporation.

"Upstate Market" means collectively (i) the service territory retail loads in
the regions currently served by Niagara Mohawk Power Corporation, New York State
Electric & Gas Corporation, Rochester Gas & Electric Corporation and Central
Hudson Gas & Electric Corporation (each a "Utility", collectively the
"Utilities"), and (ii) wholesale sales transactions by any of the Utilities to
third parties outside the regions currently served by such Utility, excluding
any such sales which are effectuated pursuant to contracts having a term of at
least one year existing as of the date of the Master Restructuring Agreement to
the extent such contracts are in effect thereafter.

          IN WITNESS WHEREOF, the Parties hereto have signed this Agreement as
of the date first above written.

PROJECT ORANGE ASSOCIATES           NIAGARA MOHAWK POWER CORP.
LIMITED PARTNERSHIP

By:    NCP Syracuse, Inc.           By: /s/ William F. Edwards
Its:   General Partner                 ________________________________
                                    Name:  William F. Edwards
                                    Title: Senior Vice President

By:    NCP Energy, Inc.
Its:   Attorney-In-Fact

By: /s/ Bruce Levy
   ___________________________
Name:  Bruce Levy
Title: President

                                   Page -32-
<PAGE>

                                 Attachment A
<TABLE>
<CAPTION>

------------- ----------- --------------------------------------------------------------------------------------------------------
                                                         Contract Quantity
------------- ----------- --------------------------------------------------------------------------------------------------------
                 Annual     Period      Period     Period      Period      Period      Period      Period     Period      Period
Contract        Contract     Jan         Feb        Mar         Apr         May         Jun         Jul        Aug         Sep
  Year          Quantity    (MWh)       (MWh)      (MWh)       (MWh)       (MWh)       (MWh)       (MWh)      (MWh)       (MWh)
                 (MWh)
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
<S>             <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>        <C>         <C>
   1            663,000     57,884      52,160      57,884      55,976      50,774      54,928      56,072     55,988      49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
   2            663,000     57,884      52,160      57,884      55,976      50,774      54,928      56,072     55,988      49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
   3            663,000     57,884      52,160      57,884      55,976      50,774      54,928      56,072     55,988      49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
   4            663,000     57,884      52,160      57,884      55,976      50,774      54,928      56,072     55,988      49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
   5            663,000     57,884      52,160      57,884      55,976      50,774      54,928      56,072     55,988      49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
   6            663,000     57,884      52,160      57,884      55,976      50,774      54,928      56,072     55,988      49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
   7            663,000     57,884      52,160      57,884      55,976      50,774      54,928      56,072     55,988      49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
   8            663,000     57,884      52,160      57,884      55,976      50,774      54,928      56,072     55,988      49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
   9            663,000     57,884      52,160      57,884      55,976      50,774      54,928      56,072     55,988      49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
   10           663,000     57,884      52,160      57,884      55,976      50,774      54,928      56,072     55,988      49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------

<CAPTION>
------------- ------------------------------------

------------- ------------------------------------
                 Period       Period       Period
Contract          Oct          Nov          Dec
  Year           (MWh)        (MWh)        (MWh)

-------------  ----------- ----------- -----------
<S>              <C>         <C>         <C>
   1             57,884      55,976      57,884
-------------  ----------- ----------- -----------
   2             57,884      55,976      57,884
-------------  ----------- ----------- -----------
   3             57,884      55,976      57,884
-------------  ----------- ----------- -----------
   4             57,884      55,976      57,884
-------------  ----------- ----------- -----------
   5             57,884      55,976      57,884
------------- ------------ ----------- -----------
   6             57,884      55,976      57,884
------------- ------------ ----------- -----------
   7             57,884      55,976      57,884
------------- ------------ ----------- -----------
   8             57,884      55,976      57,884
------------- ------------ ----------- -----------
   9             57,884      55,976      57,884
------------- ------------ ----------- -----------
   10            57,884      55,976      57,884
------------- ------------  ---------- -----------
</TABLE>

The contract quantity of electricity for each Interval shall not exceed 80 MWh
+5% (the "Interval Cap"), provided however, the aggregate contract quantity of
electricity that Seller shall have the right to put to Buyer in each Contract
Year hereunder shall not exceed 663,000 MWh + 5%.

                                   Page -33-
<PAGE>

                                 Attachment B
Exceptions/Clarifications to Electric System Bulletin 756 (Including Appendix C)
                              dated December 1997

1.)  II. GENERAL, B. CONTRIBUTIONS, Page 4:

     Replace:  "The Company will advise the Generator-owner concerning any
               charges and payment schedules required"

     With:     "The Company will provide the Generator-owner with an invoice
               detailing all charges. The Generator-owner agrees to pay all
               undisputed amounts within thirty days of the invoice date."

2.)  III. PROJECT MANAGEMENT, C. COMPLIANCE, 4.0 Periodic, Page 10, Paragraph 1:

     Add:      The Company will seal or witness the installation of the
               Generator-owner's seal on all protective devices.

3.)  III. PROJECT MANAGEMENT, C. COMPLIANCE, 4.0 Periodic, Page 10, Paragraph 2:

     Add:      ,or by the Generator-owner

4.)  III. PROJECT MANAGEMENT, C. COMPLIANCE, 4.0 Periodic, Page 10, Paragraph 3:

     Add:      In the event that the Generator-owner is notified by the Company
               that is not in compliance with any provision contained in the
               Electric Bulletin #756 dated December 1997, the Generator-owner
               will be given a reasonable period of time to come into
               compliance.

5.)  Appendix C, IV. PLANT PERFORMANCE, A. Generator Criteria, Page C-6:

     Replace:  bullet (1)
     With:     In order to minimize the interference of the Generator-owner's
               parallel generation with the Company's electric power system or
               electric service operation, the following criteria shall be met:

     A.   Voltage - the Generator-owner's generating equipment shall not cause
          -------
          excessive voltage excursions in excess of +/- 5% of nominal. The
          Generator-owner shall install any necessary voltage regulating
          equipment. The Generator-owner shall provide relaying to disconnect
          his generating equipment from the Company system if the voltage cannot
          be maintained within acceptable tolerances.

                                   Page -34-
<PAGE>

                            Attachment B, Continued
Exceptions/Clarifications to Electric System Bulletin 756 (Including Appendix C)
                              dated December 1997

     B.   Flicker - The Generator-owner shall not cause voltage flicker on the
          -------
          electric power system.

     C.   Frequency - The operating frequency of the Generator-owner's
          ---------
          generating equipment shall be maintained between 59.5 hertz and 60.5
          hertz.

     D.   Harmonics - Starting surges or harmonics generated by Generator-owner
          ---------
          equipment must not cause any reduction in the quality of service
          provided to other utility Generator-owners nor interfere with the
          Company's system. Total harmonic distortion shall be limited to 5% of
          the fundamental 60 hertz voltage or current waveform. Any single
          harmonic shall not exceed 3% of the fundamental. In certain cases a
          more stringent limitation may apply.

     E.   Fault and Line Clearing - The Generator-owner shall be responsible for
          -----------------------
          removing his generation equipment from the electric power system for
          phase faults, ground faults, or outages occurring on the electric
          circuit serving him.

     F.   Power Factor - The Generator-owner shall maintain a nominal power
          ------------
          factor of unity.

     G.   Interruptions - The Generator-owner's generating equipment shall not
          -------------
          cause repeated interruptions on the Company's electric power system.

6.)  Appendix C, IV. PLANT PERFORMANCE, B. VAR Control, Bullet 1., Page C-7:

     Replace:  primary side (high side) voltage schedule as
     With:     a system unity power factor unless otherwise

7.)  Appendix C, IV. PLANT PERFORMANCE, B. VAR Control, Bullet 2., Page C-7:

     Delete in its entirety.

8.)  Appendix C, V.A. Plant Protection Criteria, Page C-8:

     Bullet 1: Delete the words "Return to automatic voltage control after
            excitation event shall be automatic."

     Bullet 6: Delete in its entirety.

                                   Page -35-
<PAGE>

                            Attachment B, Continued
Exceptions/Clarifications to Electric System Bulletin 756 (Including Appendix C)
                              dated December 1997

9.)  Appendix C VI. OPERATING B, Disconnection by the Company, Bullet 1.1., Page
     C-10:

          Replace:  Excess generation on  the Company's system

          With:     Excess generation on the Company's system in accordance with
                    the steps stated in the New York Power Pool Operating Policy
                    17-0.

10.) Appendix C, VI. OPERATING, C. Generation Scheduling, Bullet 2.0, Page C-10:

          Replace bullet in its entirety with: Scheduling notices shall be
          adhered to as described in Section 3.1 of the Power Put Agreement.

                                   Page -36-<PAGE>

                                                                    Exhibit 10.2
(Multicurrency--Cross Border)

                                    ISDA(R)
                 International Swap Dealers Association, Inc.

                                MASTER AGREEMENT

                           dated as of June 30, 1998

 Project Orange Associates L.P.    and    Niagara Mohawk Power Corporation
--------------------------------         ----------------------------------

have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will bc governed by this Master Agreement, which
includes the schedule (the "Schedule"), and thc documents and other confirming
evidence (each a "Confirmation") exchanged between thc parties confirming those
Transactions.

Accordingly, the parties agree as follows:--

1.   Interpretation

(a)  Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.

(b)  Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the
Schedule will prevail. In the event of any inconsistency between the
provisions of any Confirmation and this Master Agreement (including the
Schedule), such Confirmation will prevail for the purpose of the relevant
Transaction.

(c)  Single Agreement. All Transactions arc entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement") and the
parties would not otherwise enter into any Transactions.

2.   Obligations

(a)  General Conditions.

     (i) Each party will make each payment or delivery specified in each
     Confirmation to be made by it, subject to the other provisions of this
     Agreement.

     (ii) Payments under this Agreement will be made on the due date for value
     on that date in the place of the account specified in the relevant
     Confirmation or otherwise pursuant to this Agreement, in freely
     transferable funds and in the manner customary for payments in the required
     currency. Where settlement is by delivery (that is, other than by payment),

                                      -1-
<PAGE>

     such delivery will be made for receipt on the due date in the manner
     customary for the relevant obligation unless otherwise specified in the
     relevant Confirmation or elsewhere in this Agreement.

     (iii) Each obligation of each party under Section 2(a)(i) is subject to (1)
     the condition precedent that no Event of Default or Potential Event of
     Default with respect to the other party has occurred and is continuing, (2)
     the condition precedent that no Early Termination Date In respect Of the
     relevant Transaction has occurred or been effectively designated and (3)
     each other applicable condition precedent specified in this Agreement.

(b)  Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to
which such change applies unless such other party gives timely notice of a
reasonable objection to such change.

(c)  Netting. If on any date amounts would otherwise be payable:--

     (i)  in the same currency, and

     (ii) in respect of the same Transaction,

by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to apply to such Transactions from such date). This election may
be made separately (or different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.

(d)  Deduction or Withholding for Tax.

     (i) Gross-Up. All payments under this Agreement will be made without any
     deduction or withholding for or on account of any Tax unless such deduction
     or withholding is required by any applicable law, as modified by the
     practice of any relevant governmental revenue authority, then in effect. If
     a party is so required to deduct or withhold, then that party ("X') will:--

          (1) promptly notify the other party ("Y") of such requirement:

          (2) pay to the relevant authorities the full amount required to be
          deducted or withheld (including the full amount required to be
          deducted or withheld from any additional amount paid by X to Y under
          this Section 2(d)) promptly upon the

                                      -2-
<PAGE>

          earlier of determining that such deduction or withholding is required
          or receiving notice that such amount has been assessed against Y:

          (3) promptly forward to Y an official receipt (or a certified copy),
          or other documentation reasonably acceptable to Y, evidencing such
          payment to such authorities; and

          (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
          payment to which Y is otherwise entitled under this Agreement, such
          additional amount as is necessary to ensure that the net amount
          actually received by Y (free and clear of Indemnifiable Taxes, whether
          assessed against X or Y) will equal the full amount Y would have
          received had no such deduction or withholding been required. However,
          X will not be required to pay any additional amount to Y to the extent
          that it would not be required to be paid but for:--

             (A) the failure by Y to comply with or perform any agreement
             contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

             (B) the failure of a representation made by Y pursuant to Section
             3(f) to be accurate and true unless such failure would not have
             occurred but for (I) any action taken by a taxing authority, or
             brought in a court of competent jurisdiction, on or after the date
             on which a Transaction is entered into (regardless of whether such
             action is taken or brought with respect to a party to this
             Agreement) or (II) a Change in Tax Law.

     (ii) Liability. If:--

          (1) X is required by any applicable law, as modified by the practice
          of any relevant governmental revenue authority, to make any deduction
          or withholding in respect of which X would not be required to pay an
          additional amount to Y under Section 2(d)(i)(4);

          (2) X does not so deduct or withhold; and

          (3) a liability resulting from such Tax is assessed directly against
          X,

     then, except to the extent Y has satisfied or then satisfies the liability
     resulting from such Tax, Y will promptly pay to X the amount of such
     liability (including any related liability for interest, but including any
     related liability for penalties only if Y has failed to comply with or
     perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

(e)  Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.

                                      -3-
<PAGE>

3.   Representations

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--

(a)  Basic Representations.

     (i) Status. It is duly organised and validly existing under the laws of the
     jurisdiction of its organisation or incorporation and, if relevant under
     such laws, in good standing;

     (ii) Powers. It has the power to execute this Agreement and any other
     documentation relating to this Agreement to which it is a party, to deliver
     this Agreement and any other documentation relating to this Agreement that
     it is required by this Agreement to deliver and to perform its obligations
     under this Agreement and any Obligations it has under any Credit Support
     Document to which it is a party and has taken all necessary action to
     authorise such execution, delivery and performance;

     (iii) No Violation or Conflict. Such execution, delivery and performance do
     not violate or conflict with any law applicable to it, any provision of its
     constitutional documents, any order or judgment of any court or other
     agency of government applicable to it or any of its assets or any
     contractual restriction binding on or affecting it or any of its assets;

     (iv) Consents. All governmental and other consents that are required to
     have been obtained by it with respect to this Agreement or any Credit
     Support Document to which it is a party have been obtained and are in full
     force and effect and all conditions of any such consents have been complied
     with; and

     (v) Obligations Binding. Its obligations under this Agreement and any
     Credit Support Document to which it is a party constitute legal, valid and
     binding obligations, enforceable in accordance with their respective terms
     (subject to applicable bankruptcy, reorganisation, insolvency, moratorium
     or similar laws affecting creditors' rights generally and subject, as to
     enforceability, to equitable principles of general application (regardless
     of whether enforcement is sought in a proceeding in equity or at law)).
(b)  Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.

(c)  Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.

(d)  Accuracy of Specified information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

                                      -4-
<PAGE>

(e)  Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.

(f)  Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.

4.   Agreements

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--

(a)  Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--

     (i) any forms, documents or certificates relating to taxation specified in
     the Schedule or any Confirmation;

     (ii) any other documents specified in the Schedule or any Confirmation; and

     (iii) upon reasonable demand by such other party, any form or document that
     may be required or reasonably requested in writing in order to allow such
     other party or its Credit Support Provider to make a payment under this
     Agreement or any applicable Credit Support Document without any deduction
     or withholding for or on account of any Tax or with such deduction or
     withholding at a reduced rate (so long as the completion, execution or
     submission of such form or document would not materially prejudice the
     legal or commercial position of the party in receipt of such demand), with
     any such form or document to be accurate and completed in a manner
     reasonably satisfactory to such other party and to be executed and to be
     delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

(b)  Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority
that are required to be obtained by it with respect to this Agreement or
any Credit Support Document to which it is a party and will use all
reasonable efforts to obtain any that may become necessary in the future.

(c)  Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to
comply would materially impair its ability to perform its obligations under
this Agreement or any Credit Support Document to which it is a party.

(d)  Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.

(e)  Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of
this Agreement by a jurisdiction in which it is incorporated, organised,
managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this
Agreement is

                                      -5-
<PAGE>

located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.

5.   Events of Default and Termination Events

(a)  Events of Default. The Occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an 'Event of Default") with respect to such party:--

     (i) Failure to Pay or Deliver. Failure by the party to make, when due, any
     payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
     required to be made by it if such failure is not remedied on or before the
     third Local Business Day after notice of such failure is given to the
     party;

     (ii) Breach of Agreement. Failure by the party to comply with or perform
     any agreement or obligation (other than an obligation to make any payment
     under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
     notice of a Termination Event or any agreement or obligation under Section
     4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
     in accordance with this Agreement if such failure is not remedied on or
     before the thirtieth day after notice of such failure is given to the
     party;

     (iii) Credit Support Default.

        (1) Failure by the party or any Credit Support Provider of such party to
        comply with or perform any agreement or obligation to he complied with
        or performed by it in accordance with any Credit Support Document if
        such failure is continuing after any applicable grace period has
        elapsed;

        (2) the expiration or termination of such Credit Support Document or the
        failing or ceasing of such Credit Support Document to be in full force
        and effect for the purpose of this Agreement (in either case other than
        in accordance with its terms) prior to the satisfaction of all
        obligations of such party under each Transaction to which such Credit
        Support Document relates without the written consent of the other party;
        or

        (3) the party or such Credit Support Provider disaffirms, disclaims,
        repudiates or rejects, in whole or in part, or challenges the validity
        of, such Credit Support Document;

     (iv) Misrepresentation. A representation (other than a representation under
     Section 3(e) or (f)) made or repeated or deemed to have been made or
     repeated by the party or any Credit Support Provider of such party in this
     Agreement or any Credit Support Document proves to have been incorrect or
     misleading in any material respect when made or repeated or deemed to have
     been made or repeated;

     (v) Default under Specified Transaction. The party, any Credit Support
     Provider of such party or any applicable Specified Entity of such party(l)
     defaults under a Specified Transaction and, after giving effect to any
     applicable notice requirement or grace period, there occurs a liquidation
     of, an acceleration of obligations under, or an early termination

                                      -6-
<PAGE>

     of, that Specified Transaction, (2) defaults, after giving effect to any
     applicable notice requirement or grace period, in making any payment or
     delivery due on the last payment, delivery or exchange date of, or any
     payment on early termination of, a Specified Transaction (or such default
     continues for at least three Local Business Days if there is no applicable
     notice requirement or grace period) or (3) disaffirms, disclaims,
     repudiates or rejects, in whole or in part, a Specified Transaction (or
     such action is taken by any person or entity appointed or empowered to
     operate it or act on its behalf);

     (vi) Cross Default. If "Cross Default" is Specified in the Schedule as
     applying to the party, the occurrence or existence of (1) a default, event
     of default or other similar condition or event (however described) in
     respect of such party, any Credit Support Provider of such party or any
     applicable Specified Entity of such party under one or more agreements or
     instruments relating to Specified Indebtedness of any of them (individually
     or collectively) in an aggregate amount of not less than the applicable
     Threshold Amount (as specified in the Schedule) which has resulted in such
     Specified Indebtedness becoming, or becoming capable at such time of being
     declared, due and payable under such agreements or instruments, before it
     would otherwise have been due and payable or (2) a default by such party,
     such Credit Support Provider or such Specified Entity (individually or
     collectively) in making one or more payments on the due date thereof in an
     aggregate amount of not less than the applicable Threshold Amount under
     such agreements or instruments (after giving effect to any applicable
     notice requirement or grace period);

     (vii) Bankruptcy. The party, any Credit Support Provider of such party or
     any applicable Specified Entity of such party:--

        (1) is dissolved (other than pursuant to a consolidation, amalgamation
        or merger); (2) becomes insolvent or is unable to pay its debts or fails
        or admits in writing its inability generally to pay its debts as they
        become due; (3) makes a general assignment, arrangement or composition
        with or for the benefit of its creditors; (4) institutes or has
        instituted against it a proceeding seeking a judgment of insolvency or
        bankruptcy or any other relief under any bankruptcy or insolvency law or
        other similar law affecting creditors' rights, or a petition is
        presented for its winding-up or liquidation, and, in the case of any
        such proceeding or petition instituted or presented against it, such
        proceeding or petition (A) results in a judgment of insolvency or
        bankruptcy or the entry of an order for relief or the making of an order
        for its winding-up or liquidation or (B) is not dismissed, discharged,
        stayed or restrained in each case within 30 days of the institution or
        presentation thereof; (5) has a resolution passed for its winding-up,
        official management or liquidation (other than pursuant to a
        consolidation, amalgamation or merger); (6) seeks or becomes subject to
        the appointment of an administrator, provisional liquidator,
        conservator, receiver, trustee, custodian or other similar official for
        it or for all or substantially all its assets; (7) has a secured party
        take possession of all or substantially all its assets or has a
        distress, execution, attachment, sequestration or other legal process
        levied, enforced or sued on or against all or substantially all its
        assets and such secured party maintains possession, or any such process
        is not dismissed, discharged, stayed or restrained, in each case within
        30 days thereafter; (8) causes or is subject to any event with respect
        to it which, under the applicable laws of any jurisdiction, has an
        analogous effect to any of the events specified in clauses (1) to (7)
        (inclusive); or (9) takes any action in furtherance of, or indicating
        its consent to, approval of, or acquiescence in, any of the foregoing
        acts; or

                                      -7-
<PAGE>

     (viii) Merger Without Assumption. The party or any Credit Support Provider
     of such party consolidates or amalgamates with, or merges with or into, or
     transfers all or substantially all its assets to, another entity and, at
     the time of such consolidation, amalgamation, merger or transfer:-

        (1) the resulting, surviving or transferee entity fails to assume all
        the obligations of such party or such Credit Support Provider under this
        Agreement or any Credit Support Document to which it or its predecessor
        was a party by operation of law or pursuant to an agreement reasonably
        satisfactory to the other party to this Agreement; or

        (2) the benefits of any Credit Support Document fall to extend (without
        the consent of the other party) to the performance by such resulting,
        surviving or transferee entity of its obligations under this Agreement.

(b)  Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an illegality
if the event is specified in (i) below, a Tax Event if the event is
specified in (ii) below or a Tax Event Upon Merger if the event is
specified in (iii) below, and, if specified to be applicable, a Credit
Event Upon Merger if the event is specified pursuant to (iv) below or an
Additional Termination Event if the event is specified pursuant to (v)
below:--

     (i) Illegality. Due to the adoption of, or any change in, any applicable
     law after the date on which a Transaction is entered into, or due to the
     promulgation of, or any change in, the interpretation by any court,
     tribunal or regulatory authority with competent jurisdiction of any
     applicable law after such date, it becomes unlawful (other than as a result
     of a breach by the party of Section 4(b)) for such party (which will be the
     Affected Party):--

        (1) to perform any absolute or contingent obligation to make a payment
        or delivery or to receive a payment or delivery in respect of such
        Transaction or to comply with any other material provision of this
        Agreement relating to such Transaction: or

        (2) to perform, or for any Credit Support Provider of such party to
        perform, any contingent or other obligation which the party (or such
        Credit Support Provider) has under any Credit Support Document relating
        to such Transaction;

     (ii) Tax Event. Due to (x) any action taken by a taxing authority, or
     brought in a court of competent jurisdiction, on or after the date on which
     a Transaction is entered into (regardless of whether such action is taken
     or brought with respect to a party to this Agreement) or (y) a Change in
     Tax Law, the party (which will be the Affected Party) will, or there is a
     substantial likelihood that it will, on the next succeeding Scheduled
     Payment Date (1) be required to pay to the other party an additional amount
     in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in
     respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
     payment from which an amount is required to be deducted or withheld for or
     on account of a Tax (except in respect of interest under Section 2(e),
     6(d)(ii) or 6(e)) and no additional amount is required to be paid in
     respect of such Tax under Section 2(d)(i)(4) (other than by reason of
     Section 2(d)(i)(4)(A) or (B));

                                      -8-
<PAGE>

     (iii) Tax Event Upon Merger. The party (the "Burdened Party') on the next
     succeeding Scheduled Payment Date will either (1) be required to pay an
     additional amount in respect of an Indemnifiable Tax under Section
     2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
     6(e)) or (2) receive a payment from which an amount has been deducted or
     withheld for or on account of any Indemnifiable Tax in respect of which the
     other party is not required to pay an additional amount (other than by
     reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
     party consolidating or amalgamating with, or merging with or into, or
     transferring all or substantially all its assets to, another entity (which
     will be the Affected Party) where such action does not constitute an event
     described in Section 5(a)(viii);

     (iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
     in the Schedule as applying to the party, such party ("X"), any Credit
     Support Provider of X or any applicable Specified Entity of X consolidates
     or amalgamates with, or merges with or into, or transfers all or
     substantially all its assets to, another entity and such action does not
     constitute an event described in Section 5(a)(viii) but the
     creditworthiness of the resulting, surviving or transferee entity is
     materially weaker than that of X, such Credit Support Provider or such
     Specified Entity, as the case may be, immediately prior to such action
     (and, in such event, X or its successor or transferee, as appropriate, will
     be the Affected Party); or

     (v) Additional Termination Event. If any "Additional Termination Event" is
     specified in the Schedule or any Confirmation as applying, the occurrence
     of such event (and, in such event, the Affected Party or Affected Parties
     shall be as specified for such Additional Termination Event in the Schedule
     or such Confirmation).

(c)  Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes
an Illegality, it will be treated as an Illegality and will not constitute
an Event of Default.

6.   Early Termination

(a)  Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and
is then continuing, the other party (the "Non-defaulting Party") may, by
not more than 20 days notice to the Defaulting Party specifying the
relevant Event of Default, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of all
outstanding Transactions. If, however, "Automatic Early Termination" is
specified in the Schedule as applying to a party, then an Early Termination
Date in respect of all outstanding Transactions will occur immediately upon
the occurrence with respect to such party of an Event of Default specified
in Section 5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto,
(8), and as of the time immediately preceding the institution of the
relevant proceeding or the presentation of the relevant petition upon the
occurrence with respect to such party of an Event of Default specified in
Section 5(a)(vii)(4) or, to the extent analogous thereto, (g).

(b)  Right to Terminate Following Termination Event.

     (i) Notice. If a Termination Event occurs, an Affected Party will, promptly
     upon becoming aware of it, notify the other party, specifying the nature of
     that Termination Event and each Affected Transaction and will also give
     such other information about that Termination Event as the other party may
     reasonably require.

                                      -9-
<PAGE>

     (ii) Transfer to A void Termination Event. If either an Illegality under
     Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected
     Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
     Affected Party, the Affected Party will, as a condition w its right to
     designate an Early Termination Date under Section 6(b)(iv), use all
     reasonable efforts (which will not require such party to incur a loss,
     excluding immaterial, incidental expenses) to transfer within 20 days after
     it gives notice under Section 6(b)(i) all its rights and obligations under
     this Agreement in respect of the Affected Transactions to another of its
     Offices or Affiliates so that such Termination Event ceases to exist.

     If the Affected Party is not able to make such a transfer it will give
     notice to the other party to that effect within such 20 day period,
     whereupon the other party may effect such a transfer within 30 days after
     the notice is given under Section 6(b)(i).

     Any such transfer by a party under this Section 6(b)(ii) will be subject to
     and conditional upon the prior written consent of the other party, which
     consent will not be withheld if such other party's policies in effect at
     such time would permit it to enter into transactions with the transferee on
     the terms proposed.

     (iii) Two Affected Parties, If an Illegality under Section 5(b)(i)(1) or a
     Tax Event occurs and there are two Affected Parties, each party will use
     all reasonable efforts to reach agreement within 30 days after notice
     thereof is given under Section 6(b)(i) on action to avoid that Termination
     Event.

     (iv) Right to Terminate, If;--

        (1) a transfer under Section 6(b)(ii) or an agreement under Section
        6(b)(iii), as the case may be, has not been effected with respect to all
        Affected Transactions within 30 days after an Affected Party gives
        notice under Section 6(b)(i); or

        (2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger
        or an Additional Termination Event occurs, or a Tax Event Upon Merger
        occurs and the Burdened Party is not the Affected Party.

     either party in the case of an Illegality, the Burdened Party in the case
     of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
     or an Additional Termination Event if there is more than one Affected
     Party, or the party which Is not the Affected Party in the case of a Credit
     Event Upon Merger or an Additional Termination Event if there is only one
     Affected Party may, by not more than 20 days notice to the other party and
     provided that the relevant Termination Event is then continuing, designate
     a day not earlier than the day such notice is effective as an Early
     Termination Date in respect of all Affected Transactions.

(c)  Effect of Designation.

     (i)   If notice designating an Early Termination Date is given under
     Section 6(a) or (b), the Early Termination Date will occur on the date so
     designated, whether or not the relevant Event of Default or Termination
     Event is then continuing.

     (ii)  Upon the occurrence or effective designation of an Early Termination
     Date, no further payments or deliveries under Section 2(a)(i) or 2(c) in
     respect of the Terminated

                                      -10-
<PAGE>

     Transactions will be required to be made, but without prejudice to the
     other provisions of this Agreement. The amount, if any, payable in respect
     of an Early Termination Date shall be determined pursuant to Section 6(e).

(d)  Calculations.

     (i)   Statement. On or as soon as reasonably practicable following the
     occurrence of an Early Termination Date, each party will make the
     calculations on its part, if any, contemplated by Section 6(e) and will
     provide to the other party a statement (1) showing, in reasonable detail,
     such calculations (including all relevant quotations and specifying any
     amount payable under Section 6(e)) and (2) giving details of the relevant
     account to which any amount payable to it is to be paid. In the absence of
     written confirmation from the source of a quotation obtained in determining
     a Market Quotation, the records of the party obtaining such quotation will
     be conclusive evidence of the existence and accuracy of such quotation.

     (ii)  Payment Date. An amount calculated as being due in respect of any
     Early Termination Date under Section 6(e) will be payable on the day that
     notice of the amount payable is effective (in the case of an Early
     Termination Date which is designated or occurs as a result of an Event of
     Default) and on the day which is two Local Business Days after the day on
     which notice of the amount payable is effective (in the case of an Early
     Termination Date which is designated as a result of a Termination Event).
     Such amount will be paid together with (to the extent permitted under
     applicable law) interest thereon (before as well as after judgment) in the
     Termination Currency, from (and including) the relevant Early Termination
     Date to (but excluding) the date such amount is paid, at the Applicable
     Rate. Such interest will be calculated on the basis of daily compounding
     and the actual number of days elapsed.

(e)  Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.

     (i)   Events of Default. If the Early Termination Date results from an
     Event of Default:--

        (1) First Method and Market Quotation.  If the First Method and Market
        Quotation apply, the Defaulting Party will pay to the Non-defaulting
        Party the excess, if a positive number, of (A) the sum of the Settlement
        Amount (determined by the Non-defaulting Party) in respect of the
        Terminated Transactions and the Termination Currency Equivalent of the
        Unpaid Amounts Owing to the Non-defaulting Party over (B) the
        Termination Currency Equivalent of the Unpaid Amounts owing to the
        Defaulting Party.

        (2) First Method and Loss. If the First Method and Loss apply, the
        Defaulting Party will pay to the Non-defaulting Party, if a positive
        number, the Non-defaulting Party's Loss in respect of this Agreement.

                                      -11-
<PAGE>

        (3) Second Method and Market Quotation. If the Second Method and Market
        Quotation apply, an amount will be payable equal to (A) the sum of the
        Settlement Amount (determined by the Non-defaulting Party) in respect of
        the Terminated Transactions and the Termination Currency Equivalent of
        the Unpaid Amounts owing to the Non-defaulting Party less (B) the
        Termination Currency Equivalent of the Unpaid Amounts owing to the
        Defaulting Party. If that amount is a positive number, the Defaulting
        Party will pay it to the Non-defaulting Party; if it is a negative
        number, the Non-defaulting Party will pay the absolute value of that
        amount to the Defaulting Party.

        (4) Second Method and Loss. If the Second Method and Loss apply, an
        amount will be payable equal to the Non-defaulting Party's Loss in
        respect of this Agreement. If that amount is a positive number, the
        Defaulting Party will pay it to the Non-defaulting Party; if it is a
        negative number, the Non-defaulting Party will pay the absolute value of
        that amount to the Defaulting Party.

   (ii) Termination Events. If the Early Termination Date results from a
        Termination Event:--

          (1) One Affected Party. If there is one Affected Party, the amount
          payable will be determined in accordance with Section 6(e)(i)(3), if
          Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
          except that, in either case, references to the Defaulting Party and to
          the Non-defaulting Party will be deemed to be references to the
          Affected Party and the party which is not the Affected Party,
          respectively, and, if Loss applies and fewer than all the Transactions
          are being terminated, Loss shall be calculated in respect of all
          Terminated Transactions.

          (2) Two Affected Parties. If there are two Affected Parties:--

             (A) if Market Quotation applies, each party will determine a
             Settlement Amount in respect of the Terminated Transactions, and an
             amount will be payable equal to (I) the sum of (a) one-half of the
             difference between the Settlement Amount of the party with the
             higher Settlement Amount ("X") and the Settlement Amount of the
             party with the lower Settlement Amount ("Y") and (b) the
             Termination Currency Equivalent of the Unpaid Amounts owing to X
             less (II) the Termination Currency Equivalent of the Unpaid Amounts
             owing to Y; and

             (B) if Loss applies, each party will determine its Loss in respect
             of this Agreement (or, if fewer than all the Transactions are being
             terminated, in respect of all Terminated Transactions) and an
             amount will be payable equal to one-half of the difference between
             the Loss of the party with the higher Loss ("X") and the Loss of
             the party with the lower Loss ("Y").

          If the amount payable Is a positive number, Y will pay it to X; if it
          is a negative number, X will pay the absolute value of that amount to
          Y.

     (iii) Adjustment for Bankruptcy. In circumstances where an Early
     Termination Date occurs because "Automatic Early Termination" applies in
     respect of a party, the amount determined under this Section 6(e) will be
     subject to such adjustments as are appropriate and permitted by law to
     reflect any payments or deliveries made by one party to the other

                                      -12-
<PAGE>

     under this Agreement (and retained by such other party) during the period
     from the relevant Early Termination Date to the date for payment determined
     under Section 6(d)(ii).

     (iv) Pre-Estimate. The parties agree that if Market Quotation applies an
     amount recoverable under this Section 6(e) is a reasonable pre-estimate of
     loss and not a penalty, Such amount is payable for the loss of bargain and
     the loss of protection against future risks and except as otherwise
     provided in this Agreement neither party will be entitled to recover any
     additional damages as a consequence of such losses.

7.   Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--

(a)  a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of
all or substantially all its assets to, another entity (but without
prejudice to any other right or remedy under this Agreement); and

(b)  a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8.   Contractual Currency

(a)  Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the
Contractual Currency will not be discharged or satisfied by any tender in
any currency other than the Contractual Currency, except to the extent such
tender results in the actual receipt by the party to which payment is owed,
acting in a reasonable manner and in good faith in converting the currency
so tendered into the Contractual Currency, of the full amount in the
Contractual Currency of all amounts payable in respect of this Agreement.
If for any reason the amount in the Contractual Currency so received falls
short of the amount in the Contractual Currency payable in respect of this
Agreement, the party required to make the payment will, to the extent
permitted by applicable law, immediately pay such additional amount in the
Contractual Currency as may be necessary to compensate for the shortfall.
If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount
of such excess.

(b)  Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is
rendered (i) for the payment of any amount owing in respect of this
Agreement, (ii) for the payment of any amount relating to any early
termination in respect of this Agreement or (iii) in respect of a judgment
or order of another court for the payment of any amount described in (i) or
(ii) above, the party seeking recovery, after recovery in full of the
aggregate amount to which such party is entitled pursuant to the judgment
or order, will be entitled to receive immediately from the other party the
amount of any shortfall of the Contractual Currency received by such party
as a consequence of sums paid in such other currency and will refund
promptly to the other party any excess of the Contractual Currency received
by such party as a consequence of sums paid in such other

                                      -13-
<PAGE>

currency if such shortfall or such excess arises or results from any variation
between the rate of exchange at which the Contractual Currency is converted into
the currency of the judgment or order for the purposes of such judgment or order
and the rate of exchange at which such party is able, acting in a reasonable
manner and in good faith in converting the currency received into the
Contractual Currency, to purchase the Contractual Currency with the amount of
the currency of the judgment or order actually received by such party. The term
"rate of exchange" includes, without limitation, any premiums and costs of
exchange payable in connection with the purchase of or conversion into the
Contractual Currency.

(c)  Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and
independent causes of action, will apply notwithstanding any indulgence
granted by the party to which any payment is owed and will not be affected
by judgment being obtained or claim or proof being made for any other sums
payable in respect of this Agreement.

(d)  Evidence of Loss. For the purpose of this Section 8, It will be sufficient
for a party to demonstrate that It would have suffered a loss had an actual
'exchange or purchase been made.

9.   Miscellaneous

(a)  Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and
supersedes all oral communication and prior writings with respect thereto.

(b)  Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing
evidenced by a facsimile transmission) and executed by each of the parties
or confirmed by an exchange of telexes or electronic messages on an
electronic messaging System.

(c)  Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive
the termination of any Transaction.

(d)  Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative
and not exclusive of any rights, powers, remedies and privileges provided
by law.

(e)  Counterparts and Confirmations.

     (i) This Agreement (and each amendment, modification and waiver in respect
     of it) may be executed and delivered in counterparts (including by
     facsimile transmission), each of which will be deemed an original.

     (ii) The parties intend that they are legally bound by the terms of each
     Transaction from the moment they agree to those terms (whether orally or
     otherwise). A Confirmation shall be entered into as soon as practicable and
     may be executed and delivered in counterparts (including by facsimile
     transmission) or he created by an exchange of telexes or by an exchange of
     electronic messages on an electronic messaging system, which in each case
     will be sufficient for all purpose-s to evidence a binding supplement to
     this Agreement. The parties will specify therein or through another
     effective means that any such counterpart, telex or electronic message
     constitutes a Confirmation.

                                      -14-
<PAGE>

(f)  No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege
will not be presumed to preclude any subsequent or further exercise, of
that right, power or privilege or the exercise of any other right, power or
privilege.

(g)  Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken
into consideration in interpreting this Agreement.

10.  Offices; Multibranch Parties

(a)  If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of
booking office or jurisdiction of incorporation or organisation of such
party, the obligations of such party are the same as if it had entered into
the Transaction through its head or home office. This representation will
be deemed to be repeated by such party on each date on which a Transaction
is entered into.

(b)  Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.

(c)  If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may nuke and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office
through which it makes and receives payments or deliveries with respect to
a Transaction will be specified in the relevant Confirmation.

11.  Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.

12.  Notices

(a)  Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice
or other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--

    (i)   if in writing and delivered in person or by courier, on the date it is
    delivered;

    (ii)  if sent by telex, on the date the recipient's answerback is received;

    (iii) if sent by facsimile transmission, on the date that transmission is
    received by a responsible employee of the recipient in legible form (it
    being agreed that the burden of

                                      -15-
<PAGE>

    proving receipt will be on the sender and will not be met by a transmission
    report generated by the senders facsimile machine);

    (iv) if sent by certified or registered mail (airmail, if overseas) or the
    equivalent (return receipt requested), on the date that mail is delivered
    or its delivers' is attempted: or

    (v)  if sent by electronic messaging system, on the date that electronic
    message is received.

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.

(b)  Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details
at which notices or other communications are to be given to it.

13.  Governing Law and Jurisdiction

(a)  Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b)  Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--

     (i)  submits to the jurisdiction of the English courts, if this Agreement
     is expressed to be governed by English law, or to the non-exclusive
     jurisdiction of the courts of the State of New York and the United States
     District Court located in the Borough of Manhattan in New York City, if
     this Agreement is expressed to be governed by the laws of the State of New
     York; and

     (ii) waives any objection which it may have at any time to the laying of
     venue of any Proceedings brought in any such court, waives any claim that
     such Proceedings have been brought in an inconvenient forum and further
     waives the right to object with respect to such Proceedings, that such
     court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or re-
enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

(c)  Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on
its behalf, service of process In any proceedings. If for any reason any
party's Process Agent is unable to act as such, such party will promptly
notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to
service of process given in the manner

                                      -16-
<PAGE>

provided for notices in Section 12. Nothing in this Agreement will affect the
right of either party to serve process in any other manner permitted by
law.

(d)  Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the
grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any court, (iii) relief by way of injunction, order for
specific performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or enforcement
of any judgment to which it or its revenues or assets might otherwise be
entitled in any Proceedings in the courts of any jurisdiction and
irrevocably agrees, to the extent permitted by applicable law, that it will
not claim any such immunity in any Proceedings.

14.  Definitions

As used in this Agreement:--

"Additional Termination Event" has the meaning specified in Section 5(b).

"Affected Party" has the meaning-specified in Section 5(b).

"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.

"Applicable Rate" means:--

(a)  in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b)  in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section
6(d)(ii)) on which that amount is payable, the Default Rate;

(c)  in respect of all other obligations payable or deliverable (or which would
have been but (or Section 2(a)(iii)) by a Non-defaulting Party, the Non-
default Rate; and

(d)  in all other cases, the Termination Rate.

"Burdened Party" has the meaning, specified in Section 5(b).

"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
irrelevant Transaction is entered into.

                                      -17-
<PAGE>

"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.

"Credit Event Upon Merger" has the meaning specified in Section 5(b).

"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.

"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

"Defaulting Party" has the meaning specified in Section 6(a).

"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

"Illegality" has the meaning specified in Section 5(b).

"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).

"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.

"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(h), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.

"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party

                                      -18-
<PAGE>

reasonably determines in good faith to be its total losses and costs (or gain,
in which case expressed as a negative number) in connection with this Agreement
or that Terminated Transaction or group of Terminated Transactions, as the case
may be, including any loss of bargain, cost of funding or, at the election of
such party but without duplication, loss or cost incurred as a result of its
terminating, liquidating, obtaining or reestablishing any hedge or related
trading position (or any gain resulting from any of them). Loss includes losses
and costs (or gains) in respect of any payment or delivery required to have been
made (assuming satisfaction of each applicable condition precedent) on or before
the relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does
not include a party's legal fees and out-of-pocket expenses referred to under
Section 11. A party will determine its Loss as of the relevant Early Termination
Date, or, if that is not reasonably practicable, as of the earliest date
thereafter as is reasonably practicable. A party may (but need not) determine
its Loss by reference to quotations of relevant rates or prices from one or more
leading dealers in the relevant markets.

"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference Market-
maker to enter into a transaction (the "Replacement Transaction") that would
have the effect of preserving for such party the economic equivalent of any
payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to-different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.

"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.

"Non-defaulting Party" has the meaning specified in Section 6(a).

                                      -19-
<PAGE>

"Office" means a branch or office of a party, which may be such party's head or
home office.

"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.

"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.

"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:--

(a)  the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined and

(b)  such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions (or which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.

"Specified Entity" has the meaning specified in the Schedule.

"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions

                                      -20-
<PAGE>

and (c) any other transaction identified as a Specified Transaction in this
Agreement or the relevant confirmation.

"Stamp Tax" means any stamp, registration, documentation or similar tax.

'Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.

"Tax Event" has the meaning specified in Section 5(b).

"Tax Event Upon Merger" has the meaning specified in Section 5(b).

"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).

"Termination Currency" has the meaning specified in the Schedule.

"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) (or the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.

"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.

"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or

                                      -21-
<PAGE>

would have been) required to be delivered as of the originally scheduled date
for delivery, in each case together with (to the extent permitted under
applicable law) interest, in the currency of such amounts, from (and including)
the date such amounts or obligations were or would have been required to have
been paid or performed to (but excluding) such Early Termination Date at the
Applicable Rate. Such amounts of interest will be calculated on the basis of
daily compounding and the actual number of days elapsed. The fair market value
of any obligation referred to in clause (b) above shall be reasonably determined
by the party obliged to make the determination under Section 6(e) or, if each
party is so obliged, it shall be the average of the Termination Currency
Equivalents of the fair market values reasonably determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

Project Orange Associates, L.P.    NIAGARA MOHAWK POWER CORPORATION

By: NCP Syracuse, Inc.,            By: /s/ Clement E. Nadeau
    Its General Partner                ___________________________________
                                   Name: Clement E. Nadeau
    By: NCP Energy, Inc.           Title: V.P. Marketing & Planning
    Its Attorney-in-Fact           Date:

    By: /s/ Bruce Levy
       _____________________
       Name: Bruce Levy
       Title: President
       Date:

                                      -22-
<PAGE>

                       SCHEDULE TO ISDA MASTER AGREEMENT

                           DATED AS OF JUNE 30, 1998

         Between Project Orange Associates, L.P. "PROJECT ORANGE" and
                  Niagara Mohawk Power Corporation "NIAGARA"

I.   TERMINATION PROVISIONS

     1(a).     "Specified Entity" shall mean in relation to NIAGARA for the
               purpose of:

               (1)       Section 5(a)(v): None
               (2)       Section 5(a)(vi): None
               (3)       Section 5(a)(vii): None
               (4)       Section 5(b)(iv): None

     1(b).     "Specified Entity" shall mean in relation to PROJECT ORANGE for
               the purpose of:

               (1)       Section 5(a)(v): None
               (2)       Section 5(a)(vi): None
               (3)       Section 5(a)(vii): None
               (4)       Section 5(b)(iv): None

     1(c).     "Specified Transaction" will have the meaning specified in
               Section 14 of this Agreement.

     1(d).     The "Cross Default" provisions of Section 5(a)(vi) will apply to
               PROJECT ORANGE and NIAGARA, except that the words "or becoming
               capable at such time of being declared" shall be deleted
               therefrom.

               "Specified Indebtedness" shall have the meaning specified in
               Section 14.

               "Threshold Amount" means (i) with respect to NIAGARA, the lesser
               of $50,000,000 or an amount equal to 10% of NIAGARA's
               shareholders' equity as of the end of its most recently completed
               fiscal year, and (ii) with respect to PROJECT ORANGE,
               $30,000,000.

     1(e).     The "Credit Event Upon Merger" provisions of Section 5(b)(iv)
               will apply to NIAGARA and PROJECT ORANGE; provided, however, that
               in no event shall an assignment of the Agreement in compliance
               with the terms of the Agreement be deemed a Credit Event Upon
               Merger.

                                   Page -1-
<PAGE>

     1(f).     The "Automatic Early Termination" provisions of Section 6(a) will
               apply to either NIAGARA or PROJECT ORANGE.

     1(g).     "Payments on Early Termination": For purposes of Section 6(e) of
               this Agreement, Loss and the Second Method will apply.

     1(h).     "Termination Currency" means United States Dollars.

     1(i).     "Additional Termination Event" will not apply.

II.  TAX REPRESENTATIONS

     (a)       Payer Representations: For the purpose of Section 3(e) of this
               Agreement, PROJECT ORANGE will make the following representation
               and NIAGARA will make the following representation:

               It is not required by any applicable law, as modified by the
               practice of any relevant governmental revenue authority, of any
               Relevant Jurisdiction to make any deduction or withholding for or
               on account of any Tax from any payment (other than interest under
               Section 2(e), 6 (d)(ii) or 6 (e) of this Agreement) to be made by
               it to the other party under this Agreement. In making this
               representation, it may rely on (i) the accuracy of any
               representations made by the other party pursuant to Section 3(f)
               of this Agreement, (ii) the satisfaction of the agreement
               contained in Section 4(a)(i) or 4 (a)(iii) of this Agreement and
               the accuracy and effectiveness of any document provided by the
               other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
               Agreement and (iii) the satisfaction of the agreement of the
               other party contained in Section 4(d) of this Agreement, provided
               that it shall not be a breach of this representation where
               reliance is placed on clause (ii) and the other party does not
               deliver a form or document under Section 4(a)(iii) by reason of
               material prejudice to its legal or commercial position.

     (b)       Payee Representations: For the purpose of Section 3(f) of this
               Agreement, PROJECT ORANGE makes the representation specified
               below:

               (i)    It is a Limited Partnership organized under the laws of
                      the State of Delaware

               For the purpose of Section 3(f) of this Agreement, NIAGARA makes
               the representation specified below:

               (i)    It is a corporation organized under the laws of the State
                      of New York.

                                   Page -2-
<PAGE>

III. AGREEMENT TO DELIVER DOCUMENTS

     For the purposes of Section 4(a)(i) and (ii) of this Agreement, each party
     agrees to deliver the following documents, as applicable:

     (a)  Tax forms, documents or certificates to be delivered are:

          Each of PROJECT ORANGE and NIAGARA shall, as soon as practicable after
          demand, deliver to the other party any form or document required or
          reasonably requested in order to allow a party to make payments under
          this Agreement without deduction or withholding for or on account of
          any Tax or with such deduction or withholding at a reduced rate.

     (b)  Other documents to be delivered are:

<TABLE>
<CAPTION>
          Party required                                                                          Covered by
          to deliver         Form/Document/                               Date by which           Section 3(d)
          document           Certificate                                  to be delivered         Representation
          --------           -----------                                  ---------------         --------------
          <S>                <C>                                           <C>                    <C>
          PROJECT            An opinion of counsel                         Upon execution of         Yes
          ORANGE and         to PROJECT ORANGE                             this Agreement.
          NIAGARA            and NIAGARA
                             substantially in the form
                             of Exhibit A to this
                                ---------
                             Schedule.

          PROJECT            An incumbency certificate                     Upon execution of         Yes
          ORANGE and         with respect to the                           this Agreement.
          NIAGARA            signatory of this
                             Agreement.

          PROJECT            Annual audited financial                      Upon execution of         Yes
          ORANGE and         statements of such party,                     this Agreement and
          NIAGARA            or its Credit Support upon request after      public availability
                             Providers, as the case may                    thereof.
                             be, prepared in accordance
                             with generally accepted
                             accounting principles
                             consistently applied ("GAAP").

          PROJECT            Quarterly unaudited                            Upon request after       Yes
          ORANGE and         financial statements of                        public availability
          NIAGARA            such party, or its Credit                      thereof.
</TABLE>

                                   Page -3-
<PAGE>

<TABLE>
          <S>                <C>                                            <C>                      <C>
                             Support Providers, as the
                             case may be, for its most
                             recent fiscal quarter
                             prepared in accordance
                             with GAAP.

          PROJECT            A copy of the resolutions                      Upon execution of        Yes
          ORANGE and         (the "Authorizing                              this Agreement.
          NIAGARA            Resolution") of the board of
                             directors or other governing
                             body of such party, pursuant
                             to which such party is
                             authorized to enter into this
                             Agreement and each Trans-
                             action entered into under this
                             Agreement.
</TABLE>

IV.  MISCELLANEOUS

     4.1  Addresses for Notices: For purposes of Section 12(a) of this
          Agreement, the addresses for notices and communications for NIAGARA
          and PROJECT ORANGE are as follows:

          For PROJECT ORANGE:

          Project Orange Associates, L.P.
          c/o GPU International, Inc.
          One Upper Pond Road
          Parsippany, NJ 07054
          Attn: President

          For NIAGARA:

          Director of Energy Transactions
          Niagara Mohawk Power Corporation
          300 Erie Blvd., West
          Syracuse, NY 13202
          Facsimile: 315-460-2660

     4.2  Process Agent:  For the purpose of Section 13 of this Agreement:

               PROJECT ORANGE appoints as its Process Agent: Not applicable

                                   Page -4-
<PAGE>

               NIAGARA appoints as its Process Agent: Not applicable

     4.3  Offices: The provisions of Section 10(a) will apply to this Agreement.

     4.4  Multibranch Party: For the purpose of Section 10(c) of this Agreement:

               PROJECT ORANGE is not a Multibranch Party.

               NIAGARA is not a Multibranch Party.

     4.5  Calculation Agent: The Calculation Agent is NIAGARA; provided, that if
          NIAGARA fails to comply with or perform any of its agreements or
          obligations in that capacity or if any Event of Default with respect
          to NIAGARA has occurred and is continuing, then upon notice to
          NIAGARA, PROJECT ORANGE (or its designee) shall be the Calculation
          Agent for so long as such failure or such Event of Default, as the
          case may be, continues.

     4.6  Credit Support Documents: None.

     4.7  Credit Support Provider: Not Applicable.

     4.8  Choice of Law: This Agreement shall be governed by and construed in
          accordance with the laws of the State of New York (without reference
          to the choice of law doctrine).

     4.9  Netting of Payments: Subparagraph (ii) of Section 2(c) of this
          Agreement shall not apply to any Transaction under this Agreement.

     4.10 Affiliate: Notwithstanding Section 14 of this Agreement, means, with
          respect to NIAGARA or PROJECT ORANGE, any other person or entity which
          controls, is controlled by, or is under common control with, such
          party, wherein the term "control" shall mean the power to direct the
          management and policies by or of such party through ownership of
          voting securities, by contract, or otherwise.

V.   OTHER PROVISIONS

     (a)  ISDA Definitions

          The definitions and provisions contained in the 1991 ISDA Definitions
          (the "1991 Definitions") (the "ISDA Definitions"), as published by the
          International Swaps and Derivatives Association, Inc. (formerly the
          International Swap Dealers Association, Inc.), are incorporated into
          this Agreement.  Any terms used and not otherwise defined herein which
          are contained in the ISDA Definitions shall have

                                   Page -5-
<PAGE>

          the meaning set forth herein. In the event of any inconsistency
          between the ISDA Definitions and any other definitions incorporated
          into a Confirmation, the definitions incorporated into such
          Confirmation will govern.

     (b)  Representations

          Section 3 is amended by adding the following at the end of the
          Section:

          (g)  Non-reliance:  In connection with this Agreement, each
               Transaction, and any other documentation relating to this
               Agreement to which it is a party or that it is required to
               deliver:

               (i)    it has consulted with its own legal, regulatory, tax,
                      business, investment, financial and accounting advisors to
                      the extent it has deemed necessary, and it has made its
                      own investment, hedging and trading decisions (including
                      decisions regarding the suitability of any Transaction
                      made pursuant to this Agreement) based upon its own
                      judgment and upon any advice from such advisors as it has
                      deemed necessary and not upon any view expressed by the
                      other party;

               (ii)   it is not relying on any representations (whether written
                      or oral) of the other party other than the representations
                      expressly set forth in this Agreement and in any
                      Confirmation;

               (iii)  it has a full understanding of all the terms, conditions
                      and risks (economic and otherwise) of the Agreement and
                      each Transaction and is capable of assuming and willing to
                      assume those risks;

               (iv)   it is entering into this Agreement, each Transaction and
                      such other documentation as principal, and not as agent or
                      in any other capacity, fiduciary or otherwise; and

               (v)    the other party is not acting as a fiduciary or financial,
                      investment or commodity trading advisor for it.

          (h)  Eligible Swap Participant:  It is an "eligible swap participant"
               as defined in Section 35.1(b) of the regulations of the Commodity
               Futures Trading Commission.

     (c)  Affected Parties in Termination Events

          For purposes of Section 6(e) (Payments on Early Termination), both
          parties shall

                                   Page -6-
<PAGE>

     be deemed to be Affected Parties in connection with any Illegality or Tax
     Event, so that payments in connection with early termination shall be
     calculated as provided in Section 6(e)(ii).

(d)  Set-off

     Section 6 of the Agreement is modified to include the following additional
     sub-clause (f).

     (f)  Set-off:  Any amount (the "Early Termination Amount") payable to
          one party (the "Payee") by the other party (the "Payer") under
          Section 6(e), in circumstances where there is a Defaulting Party
          or one Affected Party in the case where a Termination Event under
          Section 5(b)(iv) has occurred, will, at the option of the party
          ("X") other than the Defaulting Party or the Affected Party (and
          without prior notice to the Defaulting Party or the Affected
          Party), be reduced by its set-off against any amount(s) (the
          "Other Agreement Amount") payable (whether at such time or in the
          future or upon the occurrence of a contingency) by the Payee to
          the Payer (irrespective of the currency, place of payment or
          booking office of the obligation) under any other agreement(s)
          between the Payee and the Payer or instrument(s) or
          undertaking(s) issued or executed by one party to, or in favor
          of, the other party (and the Other Agreement Amount will be
          discharged promptly and in all respects to the extent it is so
          set-off).  X will give notice to the other party of any set-off
          effected under this Section 6(f).

          For this purpose, either the Early Termination Amount or the
          Other Agreement Amount (or the relevant portion of such amounts)
          may be converted by X into the currency in which the other is
          denominated at the rate of exchange at which such party would be
          able, acting in a reasonable manner and in good faith, to
          purchase the relevant amount of such currency.

          If an obligation is unascertained, X may in good faith estimate
          that obligation and set-off in respect of the estimate, subject
          to the relevant party accounting to the other when the obligation
          is ascertained.

          Nothing in this Section 6(f) shall be effective to create a
          charge or other security interest.  This Section 6(f) shall be
          without prejudice and in addition to any right of set-off,
          combination of accounts, lien or other right to which any party
          is at any time otherwise entitled (whether by operation of law,
          contract or otherwise).

                                   Page -7-
<PAGE>

(e)  Miscellaneous

          Add the following paragraph c to Section 7:

          (c)  a party making such transfer shall provide prompt written
          notification thereof to the other party.

          Add the following paragraphs at the end of Section 9:

          (h)  Severability: In the event that any provision of this Agreement
          is declared illegal, invalid or otherwise unenforceable by a court of
          competent jurisdiction, the remainder of this Agreement shall not be
          affected except to the extent necessary to delete such illegal,
          invalid or unenforceable provision, unless the deletion of such
          provision shall substantially impair the benefits of the remaining
          portions of this Agreement.

          (i)  Waiver of Jury Trial: Each party waives, to the fullest extent
          permitted by applicable law, any right it may have to a trial by jury
          in respect of any suit, action or proceeding relating to this
          Agreement or, after any assignment which requires a Credit Support
          Document, such Credit Support Document. Each party (i) certifies that
          no representative, agent or attorney of the other party of, after any
          assignment which requires a Credit Support Provider, such Credit
          Support Provider has represented, expressly or otherwise, that such
          other party would not, in the event of such a suit, action or
          proceeding, seek to enforce the foregoing waiver and (ii) acknowledges
          that it and the other party have been induced to enter into this
          Agreement and, after any assignment which requires a Credit Support
          Document, provide for any such Credit Support Document, by, among
          other things, the mutual waivers and certifications in this Section.

                                   Page -8-
<PAGE>

IN WITNESS WHEREOF, the parties have executed this document by their duly
authorized officers as of the date specified on the first page of this document.

                         NIAGARA MOHAWK POWER CORPORATION

                         By: /s/ William F. Edwards
                            _________________________

                              Name: William F. Edwards
                              Title: Senior Vice President

                         PROJECT ORANGE ASSOCIATES, L.P.

                         By:  NCP Syracuse, Inc.
                         Its: General Partner

                         By:  NCP Energy
                         Its: Attorney-In-Fact

                         By: /s/ Bruce Levy
                            _________________________
                         Name:  Bruce Levy
                         Title:  President

                                   Page -9-
<PAGE>

                                                                       EXHIBIT A
                           FORM OF OPINION OF COUNSEL

Ladies and Gentlemen:

     We have acted as counsel to Project Orange Associates, L.P. (the "Company")
in connection with the execution and delivery by the Company of an ISDA Master
Agreement (1992 Multicurrency - Cross Border) dated as of [Date] (including the
Schedule thereto, the Confirmation dated ____________________ and the
Transaction referred to therein, collectively the "Agreement") between the
Company and ____________________.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the Agreement.

     In connection with the opinions expressed below, we have examined and
relied upon executed copies of the Agreement and such other documents and
records of the Company and certificates or other comparable documents of public
officials and representatives of the Company and others as we have deemed
necessary or appropriate for the purposes of this opinion.  In our examination,
we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as conformed, certified or photostatic copies
thereof, and the authenticity of the originals of such conformed, certified or
photostatic copies.  We have assumed the due execution and delivery, pursuant to
due authorization, of the Agreement by the parties thereto other than the
Company.

     Based upon the foregoing and subject to the limitations, qualifications and
exceptions set forth below,  we are of the opinion that:

     (1) The Company is duly organized and validly existing and has requisite
power and authority to enter in to, execute and deliver the Agreement and to
perform its obligations thereunder.

     (2) The Agreement has been duly authorized, executed and delivered by the
Company.

     (3) The execution, delivery and performance of the Agreement by the Company
does not violate or conflict with any United States federal or New York State
law or regulation applicable to the Company, any order or judgment of any court
or other agency of government applicable to the Company or any of its assets of
which I have knowledge or, to the best of my knowledge after due inquiry, any
material contract binding on or affecting the Company or any of its assets.

     (4) All United States federal or New York State governmental and other
consents, authorizations, licenses, approvals, registrations, declarations and
filings that are required to have been obtained by the Company with respect to
the execution, delivery or performance of the

                                   Page -10-
<PAGE>

Agreement have been obtained and are in full force and effect and all conditions
of any such consents, authorizations, licenses, approvals, registrations,
declarations and filings have been complied with.

     The opinions expressed herein are further subject to the following
assumptions, exceptions, limitations and qualifications:

     A.   We are members of the Bar of the State of New York and do not impart
          to be expert in the laws of any other jurisdiction, other than the
          Federal laws of the United States.  The opinions expressed herein are
          limited to questions arising under the Federal laws of the United
          States and the laws of the State of New York. The opinion expressed in
          paragraph (3) relates only to those laws and regulations that, in our
          experience, are normally applicable to, or relevant in connection
          with, transactions of the type provided for in agreements similar to
          the Agreement.

     B.   We have assumed that:

          a.   the Transactions relate solely to transactions which are not
               traded on or over any commodities or other exchange;

          b.   each party to the Agreement has a valid business purpose for
               entering therein and into each Transaction; and

          c.   the execution, delivery and performance of the Agreement by each
               party are exempt from the provisions of the Commodity Exchange
               Act (as amended) as provided in 17 C.F.R. (S)35.2.

     This opinion is as of the date hereof, and we undertake no, and hereby
disclaim any, obligation to advise you of any change in any matter set forth
herein.  The opinions expressed herein are solely for your benefit in connection
with the above transaction and may not be relied on in any manner or for any
purpose by, or disclosed to, any person other than the addressee hereof.  This
opinion is specific to the transactions and documents referred to herein, and
this opinion should not be assumed to state general principles of law applicable
to transactions of this kind.

                                    Very truly yours,

                                   Page -11-
<PAGE>

                                  CONFIRMATION

Project Orange Associates, L.P.
c/o GPU International, Inc.
One Upper Pond Road
Parsippany, NJ 07054

Ladies and Gentlemen:

     The purpose of this letter agreement (this "Confirmation") is to confirm
the terms and conditions of the Transaction entered into between us on the date
hereof specified below (the "Transaction").  This Confirmation constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below.

     This Confirmation supplements, forms part of, and is subject to the ISDA
Master Agreement dated as of 1992, as amended and supplemented from time to
time, between Niagara Mohawk Power Corporation ("NIAGARA") and Project Orange
Associates, L.P. ("PROJECT ORANGE").  All provisions contained in the ISDA
Master Agreement govern this Confirmation except as expressly modified below.

I.   PAYMENT OBLIGATIONS

     THE OBLIGATIONS INCURRED PURSUANT TO THIS CONFIRMATION SHALL REQUIRE CASH
     PAYMENTS AND SHALL IN NO EVENT BE INTERPRETED TO REQUIRE THE PURCHASE OR
     SALE OF ELECTRICITY.

     1.1  Payment on Settlement Date: Subject to Section 1.2 of this
          Confirmation, on each Settlement Date, NIAGARA shall be obligated to
          pay to PROJECT ORANGE the sum of the accrued and unpaid Fixed Payments
          from and including the Interval commencing at 12:00 a.m. on the
          immediately preceding Settlement Date to but excluding the Interval
          commencing at 12:00 a.m. on the current Settlement Date, and PROJECT
          ORANGE shall be obligated to pay to NIAGARA the sum of the accrued and
          unpaid Floating Payments from and including the Interval commencing at
          12:00 a.m. on the immediately preceding Settlement Date to but
          excluding the Interval commencing at 12:00 a.m. on the current
          Settlement Date. Such payment obligations shall be paid on a net basis
          pursuant to Section 2(c) of the Agreement.

     1.2  Payment Dispute Mechanism: If PROJECT ORANGE (or NIAGARA in the event
          that PROJECT ORANGE or its designee is then acting as the Calculation
          Agent), in good faith, disputes any part of any Notice of a net
          payment obligation, PROJECT ORANGE (or NIAGARA in the event that
          PROJECT ORANGE or its designee is then acting as the Calculation
          Agent) shall provide a written

                                   Page -1-
<PAGE>

          explanation of the basis for such dispute and the undisputed portion
          of the net payment obligations set forth in such Notice shall be paid
          by the party obligated to pay such amounts no later than the
          applicable Payment Date. Any underpayment or overpayment under this
          Section 1.2 shall bear interest at the prime rate for U.S. currency as
          published from time to time under "Money Rates" in The Wall Street
          Journal, from and including the Payment Date any such underpayment or
          overpayment was originally due to but excluding the date on which such
          underpayment or overpayment is finally settled by the parties hereto,
          or in the event the parties hereto are unable to settle such matter,
          such matter shall be settled by an independent nationally recognized
          public accounting firm mutually selected by the parties, whose
          determination shall be final and binding on the parties hereto and
          whose fees and expenses shall be borne by the party found to be at
          substantial fault by such independent public accounting firm. No
          Notice (or payment obligation thereunder) shall be subject to this
          Section 1.2 unless a notice of dispute is given with respect thereto
          within one year of the Payment Date applicable to such Notice.

II.  DEFINITIONS

     In addition to the terms defined in Section 14 of the Agreement, the
     following terms shall have the following meanings for purposes of this
     Confirmation:

     Approved Assignee: Shall be (i) any person, having a long-term unsecured
     debt credit rating of no less than Investment Grade issued by Moody's
     Investors Service, Inc., or any successor thereof ("Moody's"), or Standard
     & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc.,
     or any successor thereof ("S&P"), or the equivalent of such rating from
     another nationally recognized rating agency; (ii) any Affiliate of PROJECT
     ORANGE; provided (x) such Affiliate has a long-term unsecured debt credit
     rating of no less than Investment Grade issued by Moody's or S&P or the
     equivalent of such rating from another nationally recognized rating agency,
     or (y) such Affiliate has a net worth calculated in accordance with
     generally accepted accounting principles ("Net Worth"), that is equal to or
     greater than the Net Worth of the entity making assignment or transfer (or
     its Credit Support Provider, if it has one) on the date of such assignment
     or transfer, or (z) PROJECT ORANGE unconditionally guarantees, pursuant to
     a guarantee in form and substance reasonably satisfactory to NIAGARA, the
     obligations of such Affiliate so assigned or transferred (in which case
     PROJECT ORANGE shall be a Credit Support Provider and such guarantee shall
     be a Credit Support Document); (iii) any of the other Gas IPPs party to a
     Restated Contract (as defined in the definition of Proxy-Market Price
     Period) with NIAGARA or their respective Affiliates; provided (x) such
     other Gas IPP or such Affiliate has a long-term unsecured debt credit
     rating of no less than Investment Grade issued by Moody's or S&P or the
     equivalent of such rating from another nationally recognized rating agency,
     or (y) such other Gas IPP or such Affiliate has a Net Worth that is equal
     to or greater than the Net Worth of the entity making

                                   Page -2-
<PAGE>

     assignment or transfer (or its Credit Support Provider, if it has one) on
     the date of such assignment or transfer, or (z) PROJECT ORANGE (in the case
     of an assignment or transfer to another Gas IPP) or such other Gas IPP (in
     the case of an assignment or transfer to any of its Affiliates)
     unconditionally guarantees, pursuant to a guarantee in form and substance
     reasonably satisfactory to NIAGARA, the obligations of such other Gas IPP
     or such Affiliate, as the case may be, so assigned or transferred (in which
     case PROJECT ORANGE or such Gas IPP, as applicable, shall be a Credit
     Support Provider and such guarantee shall be a Credit Support Document); or
     (iv) any other person who has a Net Worth that is equal to or greater than
     the Net Worth of the entity making assignment or transfer (or its Credit
     Support Provider, if it has one) on the date of such assignment or
     transfer; provided evidence of such qualifying Net Worth is reasonably
     demonstrated to NIAGARA;

     Business Day: Notwithstanding Section 14 of this Agreement, shall mean any
     day other than a Saturday, Sunday or other day on which banks in the State
     of New York are authorized or required to be closed.

     Competitive Transition Charge: Shall mean a charge, however designated, for
     the recovery of strandable costs.

     Consummation Date: Shall have the meaning set forth in Section 10.2 of the
     Master Restructuring Agreement.

     Contract Price: Shall mean for the first two Contract Years of the Term of
     this Agreement $53.84/MWh and $54.62/MWh, respectively.

     Contract Year: Shall mean the period commencing at 11:59:59 p.m. on the
     Consummation Date and ending at 11:59:59 p.m. on the first anniversary of
     the last day of the month in which the Consummation Date occurs and each
     successive 12-month period thereafter to the extent applicable.

     FERC: Shall mean the Federal Energy Regulatory Commission.

     Fixed Payment: Shall mean an amount for each Interval equal to the NIAGARA
     Payment Obligation for the current Interval.

     Floating Payment: Shall mean an amount for each Interval equal to the sum
     of (i) the IPP Payment Obligation for the current Interval, and (ii) if
     applicable, the Market Capacity Price in $/MW multiplied by the weight
     averaged capacity associated with the Notional Quantity of electricity for
     each Interval occurring from and including the Interval commencing at 12:00
     a.m. on the immediately preceding Settlement Date and to but excluding the
     Interval commencing at 12:00 a.m. on the current Settlement Date.

                                   Page -3-
<PAGE>

     Gas IPPs: Shall mean those IPPs which produce power using primarily natural
     gas.

     Governmental Authority: Shall mean any federal, state, municipal or local
     governmental authority, department, commission, board, agency, body or
     official, whether executive, legislative, administrative, regulatory or
     judicial, including but not limited to the FERC and the PSC.

     Indexed Contract Price: Shall mean, beginning on the first day of the third
     Contract Year of the Term of this Agreement and continuing thereafter, the
     price calculated in accordance with the indexing formula set forth in
     Schedule 1 attached hereto.

     Initial Interval: Shall be the first Interval under this Agreement.

     Interval: Shall be (i) 1 hour; provided that, in the event that following
     the Proxy-Market Price Period, ISO/PE procedures require the use of an
     alternate time period, such alternate time period shall automatically be
     deemed to be incorporated in, and shall supersede, the 1 hour period set
     forth herein, or (ii) such time period as NIAGARA and PROJECT ORANGE shall
     mutually agree in writing; provided that such mutually agreed upon time
     period may only be subsequently modified upon the prior written consent of
     NIAGARA and PROJECT ORANGE.

     IPP Payment Obligation: Shall be an amount equal to the product of the
     Notional Quantity of electricity during the applicable Interval multiplied
     by the Proxy-Market Price or the Market Price, as the case may be,
     applicable to such Interval.

     IPPs: Shall mean those independent power producers that are identified on
     the signature pages and on Schedule A of the MRA.

     ISO/PE: Shall mean a New York Independent System Operator and Power
     Exchange.

     ISO/PE Establishment Date: Shall be the first day of the month following
     the calendar month in which the ISO/PE is  established.

     Investment Grade: Shall mean a senior unsecured debt rating as published by
     S&P of not less than BBB- (or its then-equivalent) and an equivalent rating
     as published by Moody's.

     Market Capacity Price: Shall equal zero (i) prior to the ISO/PE
     Establishment Date (as defined below) and (ii) thereafter at any time when
     no separate market for capacity exists.  Commencing on the first day of the
     month following the calendar month in which the ISO/PE Establishment Date
     occurs and only if there then exists a separate market for capacity, the
     Market Capacity Price shall mean the market price paid to sellers for
     capacity, at the region in which the PROJECT ORANGE's Project's bus bar is
     located,

                                   Page -4-
<PAGE>

     established by the ISO/PE capacity auction; provided, however, that at such
     time the parties shall conduct good faith negotiations and diligently
     endeavor to mutually determine whether to continue the pricing referred to
     in clause (i) of the definition of Proxy-Market Price for a mutually agreed
     upon additional period of time. Following the Proxy-Market Price Period and
     only if there then exists a separate market for capacity, the parties shall
     conduct good faith negotiations and diligently endeavor to adjust the
     applicable capacity on a basis consistent with the structure of such
     separate market.

     Market Price: Shall mean for any Interval commencing on the first day of
     the month following the calendar month in which the ISO/PE Establishment
     Date occurs, the day ahead locational based market price ("LBMP") paid to
     sellers for energy, at the PROJECT ORANGE's Project's bus bar or the region
     in which the PROJECT ORANGE's Project's bus bar is located, specified and
     published by the ISO/PE; provided, however, that at such time the parties
     shall conduct good faith negotiations and diligently endeavor to mutually
     determine whether to continue the pricing referred to in clause (i) of the
     definition of Proxy-Market Price for a mutually agreed upon additional
     period of time.

     MRA: Shall mean the Agreement dated July 9, 1997, as amended, by and
     between NIAGARA and the independent power producers identified therein.

     NIAGARA Payment Obligation: Shall mean an amount equal to the product of
     the Notional Quantity of electricity during the applicable Interval
     multiplied by the Contract Price or the Indexed Contract Price, as the case
     may be, applicable to such Interval.

     NIAGARA Restructuring: Shall mean NIAGARA's proposed corporate
     restructuring and disaggregation in connection with PowerChoice proposal.

     Notice: After calculating the payments owing pursuant to Section 1.1 of
     this Confirmation, NIAGARA shall provide PROJECT ORANGE with notice (each,
     a "Notice") of any net payment obligation resulting therefrom on or before
     the 5th day of the first calendar month following the Settlement Date;
     provided that, in the event that following the Proxy-Market Price Period,
     ISO/PE procedures require an alternate date for payment notices, such
     alternate notice date shall automatically be deemed to be incorporated in,
     and shall supersede, the notice date set forth herein.

     Notional Quantity: Shall mean, for each Interval, the sum of the contract
     quantity of electricity (in MWh) for each hour or fraction thereof in such
     Interval, for which PROJECT ORANGE and NIAGARA are contractually committed.
     The contract quantities for Contract Years during the Proxy-Market Price
     Period are set forth in Schedule 2A attached hereto.  The contract
     quantities for Contract Years after the Proxy-Market Price Period are set
     forth in Schedule 2B attached hereto.

                                   Page -5-
<PAGE>

     NYPSL: Shall mean the New York Public Service Law, as amended.

     Payment Date: Shall occur each month commencing on the Commencement Date
     and shall be the day of such month which is the later of (i) the 25th day
     of the calendar month after the relevant Settlement Date, provided such day
     is a Business Day, and if such day is not a Business Day on the first
     Business Day following such 25th day, or (ii) the 15th day after the
     receipt by PROJECT ORANGE of a Notice from NIAGARA, provided such day is a
     Business Day, and if such is not a Business Day, on the first Business Day
     following such 15th day.  Notwithstanding the foregoing, in the event that
     following the Proxy-Market Price Period ISO/PE procedures require alternate
     dates for payments, such alternate payment dates shall automatically be
     deemed to be incorporated in, and shall supersede, the payment dates set
     forth herein.

     Project: Shall be PROJECT ORANGE's natural gas-fired electric generating
     plant located in the City of Syracuse, New York.

     Proxy-Market Price: Shall mean for any Interval (i) prior to and until the
     ISO/PE Establishment Date, NIAGARA's short-term avoided energy and capacity
     costs at the voltage level of PROJECT ORANGE's Project bus bar, as stated
     in its tariff approved by the PSC providing for the purchase of power from
     PURPA qualifying facilities, which tariff is currently designated as S.C.-
     6, as the same may be in effect from time to time or any successor tariff
     thereto or such other price as may be agreed upon by NIAGARA and PROJECT
     ORANGE during individual negotiations, and (ii) after the ISO/PE
     Establishment Date, the Market Price and, if applicable, the Market
     Capacity Price; provided, however, that at such time the parties shall
     conduct good faith negotiations and diligently endeavor to mutually
     determine whether to continue the pricing referenced in clause (i) above
     for a mutually agreed upon additional period of time.  The Proxy-Market
     Price shall not be reduced or offset by any costs that NIAGARA may incur,
     including, without limitation, costs for ancillary services, transmission
     services or transition (or stranded) costs.

     Proxy-Market Price Period: Shall mean the period commencing on the date of
     this Agreement and ending on the first day of the calendar month following
     the calendar month in which the ISO/PE power market satisfies the following
     conditions for each of the previous six months:

          (i)  the volumes (in GWh) of energy sales and purchases transacted
               through the ISO/PE in the day ahead market based upon the day
               ahead pricing mechanism adopted by the FERC for the ISO/PE for
               the Upstate Market shall be at least equal to those corresponding
               with the months listed in the following table (which GWh shall
               include the aggregate contract quantities of energy during such
               period under all physical delivery Restated Contracts with Gas
               IPPs and all physical delivery contracts

                                   Page -6-
<PAGE>

               between NIAGARA and any IPP party to the Master Restructuring
               Agreement entered into in lieu of Fixed Price Swap Contracts,
               regardless of whether the IPPs parties thereto actually effected
               such sales, and all sales on up to a monthly basis of energy
               (other than sales through the ISO/PE) by the IPPs parties to the
               Master Restructuring Agreement which are effectuated by NIAGARA
               acting as agent for any such IPP);

                        --------------------------
                         Month             GWh
                        --------------------------
                         January           4,611
                        --------------------------
                         February          4,136
                        --------------------------
                         March             4,327
                        --------------------------
                         April             3,827
                        --------------------------
                         May               3,788
                        --------------------------
                         June              3,974
                        --------------------------
                         July              4,278
                        --------------------------
                         August            4,160
                        --------------------------
                         September         3,793
                        --------------------------
                         October           3,856
                        --------------------------
                         November          3,896
                        --------------------------
                         December          4,361
                        --------------------------

          and
          (ii) only if a separate market for capacity then exists, a minimum of
               5,700 MW of the capacity sales and purchases within the Upstate
               Market have been transacted through the ISO/PE capacity auction
               (which MW shall include the aggregate capacity associated with
               the aggregate contract quantities of energy during such period
               under all physical delivery Restated Contracts with Gas IPPs and
               all physical delivery Contracts between NIAGARA and any IPP party
               to the Master Restructuring Agreement entered into in lieu of
               Fixed Price Swap Contracts, regardless of whether the IPPs
               parties thereto actually effected such sales, and all sales on up
               to a monthly basis of capacity (other than sales through the
               ISO/PE) by the IPPs parties to the Mastering Restructuring
               Agreement

                                   Page -7-
<PAGE>

               which are effectuated by NIAGARA acting as agent for
               any such IPP).

     Notwithstanding the foregoing, the Proxy-Market Price Period may be
     extended or terminated upon the mutual agreement of the Parties.

     PSC: Shall mean the New York Public Service Commission.

     PUHCA: Shall mean the Public Utility Holding Company Act of 1935, as
     amended.

     PURPA: Shall mean the Public Utility Regulatory Policies Act of 1978, as
     amended.

     Reasonable Best Efforts: Shall mean, with respect to any party, such
     party's diligent pursuance of the course of action or result stated as
     determined by such party itself in good faith, but shall not require such
     party to pay any sum or other consideration or incur or assume any
     liability or obligation that is not otherwise expressly required to be
     paid, incurred or assumed pursuant to this Transaction, excluding (i)
     normal and customary incidental out-of-pocket costs and expenses and (ii)
     attorneys' fees.

     Settlement Date: Shall be the last day of each calendar month during the
     Term of this Transaction, commencing on the Commencement Date.

     Term: The term of this Agreement shall commence at 11:59:59 p.m. on the
     Consummation Date and end at 11:59:59 p.m. on the tenth anniversary of the
     last day of the month in which the Consummation Date occurs.

     Upstate Market: Shall mean collectively (i) the service territory retail
     loads in the regions currently served by NIAGARA, New York State Electric &
     Gas Corporation, Rochester Gas & Electric Corporation and Central Hudson
     Gas and Electric Corporation (collectively, the "Utilities") and (ii)
     wholesale sales transactions by any of the Utilities to third parties
     outside the regions currently serviced by such Utility, excluding any such
     sales which are effectuated pursuant to contracts having a term of at least
     one year existing as of July 9, 1997 to the extent such contracts remain in
     effect thereafter.

III. ASSIGNMENTS

     3.1  Assignment by PROJECT ORANGE: Notwithstanding Section 5(b)(iv) and
          Section 7 of the Agreement, upon delivery to NIAGARA of an
          Acknowledgment of Assignment (as such term is defined below), PROJECT
          ORANGE may assign or transfer this Agreement in whole or in part,
          without the consent of NIAGARA (a) as collateral security for purposes
          of securing indebtedness, or (b) to any Approved Assignee. PROJECT
          ORANGE may split and assign the Notional Quantities of electricity and
          Intervals to Approved Assignees, each in respect of a lesser Notional
          Quantity and/or Intervals than the full amounts thereof hereunder,

                                   Page -8-
<PAGE>

          provided that (a) each such assignment is for 50,000 MWh of
          electricity per year or any integral multiples thereof and to the
          extent that the remaining unassigned balance of the Notional Quality
          of electricity hereunder for any such year is less than 50,000 MWh,
          then for such remaining balance, (b) each such assignment is for a
          period of at least one year, and (c) the sum of all assigned and
          retained Notional Quantities of electricity and Intervals does not
          exceed the total Notional Quantities of electricity and Intervals
          hereunder. In connection with any assignment or transfer to an
          Approved Assignee pursuant to clause (b) above, such Approved Assignee
          must (1) execute and deliver to NIAGARA an acknowledgment of such
          assignment or transfer in the form attached hereto as Schedule 3 (an
          "Acknowledgment of Assignment"), which includes representations by
          such Approved Assignee to NIAGARA comparable in scope to those
          contained in Section 3 of the Agreement and Part 2 of the Schedule to
          the Agreement, and (2) provide to NIAGARA an opinion of counsel with
          respect to such Approved Assignee (and any Credit Support Provider for
          it, if applicable) and the acknowledgment of such assignment
          comparable in scope to that delivered by PROJECT ORANGE pursuant to
          Part 3 of the Schedule to the Agreement. Except to the extent
          expressly provided in any applicable guarantee, upon any such
          assignment or transfer, PROJECT ORANGE shall be released and have no
          further obligations to NIAGARA hereunder with respect to the assigned
          or transferred Notional Quantities and/or Intervals. No assignments in
          compliance with Section 3.1 shall be deemed to be a Credit Event Upon
          Merger under Section 5(b)(iv) of the Master Agreement. NIAGARA shall
          be entitled to rely in good faith upon any Acknowledgment of
          Assignment delivered pursuant hereto.

     3.2  Assignment by NIAGARA: Notwithstanding Section 5(b)(iv) and Section 7
          of this Agreement, NIAGARA shall not assign its rights and obligations
          hereunder except as expressly authorized under this Section 3.2. In
          connection with any assignment to an authorized assignee pursuant to
          this Section 3.2, such assignee must (1) execute and deliver to
          PROJECT ORANGE an acknowledgment of such assignment which shall
          include representations by such assignee to PROJECT ORANGE comparable
          in scope to those contained in Section 3 of the Agreement and Part 2
          of the Schedule to the Agreement, and (2) provide to PROJECT ORANGE an
          opinion of counsel with respect to such assignee and the
          acknowledgment of such assignment comparable in scope to that
          delivered by PROJECT ORANGE pursuant to Part 3 of the Schedule to the
          Agreement. No assignments in compliance with this Section 3.2 shall be
          deemed to be a Credit Event Upon Merger under Section 5(b)(iv) of the
          Master Agreement.

          (a)  NIAGARA Restructuring: In the event that NIAGARA restructures its
               corporate structure or assets, including by creating any new
               entities that hold significant assets, whether in connection with
               the NIAGARA

                                   Page -9-
<PAGE>

               Restructuring or otherwise, upon notice to PROJECT ORANGE (or its
               assignee hereunder), this Agreement will be assigned to and
               assumed by the entity or entities owning all or substantially all
               of NIAGARA's electric transmission and distribution assets or, if
               separated from NIAGARA's electric transmission assets pursuant to
               such a restructuring, NIAGARA's electric distribution assets,
               provided that, upon the effective date of the restructuring (i)
               such assignee's performance under this Transaction is
               unconditionally guaranteed, pursuant to a guarantee in form and
               substance reasonably satisfactory to PROJECT ORANGE (or its
               assignee hereunder), by each of the other entities arising out of
               the restructuring, including any entity spun-off to NIAGARA's
               shareholders or any Affiliate of NIAGARA holding significant
               assets that were held by NIAGARA (or any subsidiary of NIAGARA)
               prior to the restructuring, unless such assignee has a long-term
               unsecured debt credit rating issued by Moody's, S&P or another
               nationally recognized rating agency that is at least as favorable
               as NIAGARA's long-term unsecured debt credit rating immediately
               prior to the effective date of the restructuring, and (ii) if
               such assignee is not the entity which will collect from customers
               the Competitive Transition Charge approved by the PSC in
               connection with the NIAGARA Restructuring, such assignee's
               performance under this Transaction is unconditionally guaranteed,
               pursuant to a guarantee in form and substance reasonably
               satisfactory to PROJECT ORANGE (or its assignee hereunder), by
               each of the entities which will collect from customers the
               Competitive Transition Charge approved by the PSC.

          (b)  Third Party Assignment: Upon notice to PROJECT ORANGE (or its
               assignee hereunder), NIAGARA may assign its rights and
               obligations under this Agreement to any third party (ANIAGARA
               Assignee") (except those parties referenced in Section 3.2(a)
               above), provided that the NIAGARA Assignee has (i) received a
               long-term unsecured debt credit rating by Moody's or S&P of at
               least Investment Grade or the equivalent of such rating from
               another nationally recognized rating agency, as of the date of
               consummation of the assignment; or (ii) furnished PROJECT ORANGE
               with such collateral security as may be reasonably acceptable to
               PROJECT ORANGE in order to limit PROJECT ORANGE's credit risk in
               connection with such assignment.

IV.  FURTHER ASSURANCES

     Subject to the terms and conditions contained herein, upon the request from
     time to time of either party hereto, the other party shall promptly execute
     and deliver or use its reasonable best efforts to cause to be executed and
     delivered, such consents, approvals and other instruments, including,
     without limitation, assignments of this Agreement as

                                   Page -10-
<PAGE>

     collateral, estoppel certificates and utility certificates, in form and
     substance reasonably satisfactory to both parties and their respective
     counsel to implement any financing or other material business transaction
     undertaken by the requesting party.

V.   QUALIFYING FACILITY MONITORING AND STATUS

     5.1  Qualifying Facility Monitoring: NIAGARA shall have no contractual
          right and hereby waives any other right which it might have under
          state or federal law to demand information from PROJECT ORANGE, or any
          other person, including but not limited to any Governmental Authority,
          with respect to PROJECT ORANGE's status as a qualifying facility ("QF
          Status") under state and/or federal law.

     5.2  Qualifying Facility Status: NIAGARA acknowledges and agrees that
          PROJECT ORANGE is not required to maintain a generating facility
          pursuant to the terms hereof for the performance of its obligations
          hereunder. Notwithstanding the foregoing, PROJECT ORANGE shall have
          the right, but not the obligation, in its sole discretion to obtain
          and/or maintain its QF Status. NIAGARA's rights and obligations
          hereunder shall continue as a matter of contractual right, regardless
          of whether PROJECT ORANGE maintains its QF Status. Any failure by
          PROJECT ORANGE to comply with the requirements applicable to QF Status
          under New York law (including compliance with NYPSL (S) 2(2-a)) shall
          have no adverse impact on PROJECT ORANGE under this Transaction. In
          the event PROJECT ORANGE wishes to qualify or perform as an Exempt
          Wholesale Generator (as defined under Section 32 of PUHCA and FERC's
          regulations promulgated thereunder, as the same may be amended,
          modified or restated from time to time), NIAGARA shall cooperate with
          (including, without limitation, by providing consents and affidavits),
          and shall not take any action to oppose, impede or subvert, PROJECT
          ORANGE's efforts to obtain appropriate regulatory exemptions and
          approvals including market-based rate approval. Except to the extent
          that the contract prices under this Transaction are or may be based
          thereon, during the Term hereof, PROJECT ORANGE (i) shall waive any
          statutory right it may have under Section 66-c of NYPSL pursuant to
          which PROJECT ORANGE may demand a 6c per kWh minimum power purchase
          rate from NIAGARA and (ii) shall waive, for itself and for the
          successors and assigns of its Project with respect to such Project,
          any statutory right PROJECT ORANGE may have under PURPA or NYPSL to
          require NIAGARA to enter into a power purchase contract or otherwise
          take the output of PROJECT ORANGE's Project; provided, however, that
          until the end of the Proxy-Market Price Period, NIAGARA agrees, at
          PROJECT ORANGE's request, to act as agent for PROJECT ORANGE (or, if
          necessary to effectuate such sales to the New York Power Pool, by
          purchase and resale of PROJECT ORANGE's capacity and energy, at no
          cost to NIAGARA), for the sale on up to a monthly basis, of the
          PROJECT ORANGE's Project's capacity and energy to the New York Power
          Pool or any third party, in each case

                                   Page -11-
<PAGE>

          on a nondiscriminatory basis with respect to NIAGARA's or any third
          party's capacity and energy, at no cost to PROJECT ORANGE. NIAGARA
          agrees to use its Reasonable Best Efforts to effect such sales on the
          most favorable terms, including price, to PROJECT ORANGE giving
          consideration to the quantity, term and market conditions prevailing
          at the time of sale. Nothing contained herein shall be construed to
          constitute a waiver by PROJECT ORANGE of any other rights it may have
          under PURPA, NYPSL or applicable law, including rights with respect to
          back-up services, interconnection, reactive power or other similar
          rights, whether or not a contract is required or desirable.

VI.   CURTAILMENT

      NIAGARA agrees that the performance of any of its obligations hereunder
      shall in no event be subject to any curtailment of electricity under the
      provisions of 18 C.F.R.(S)292.304 (f) (1997), or any subsequent or similar
      rule or regulation adopted by the PSC or the FERC, or any order of the
      PSC, the FERC, or any Governmental Authority interpreting or applying
      those provisions of authorizing NIAGARA to reserve any rights under those
      provisions.

VII.  AMENDMENTS

      In the event that NIAGARA restructures its corporate structure or assets,
      including by creating any new entities that hold significant assets,
      whether in connection with the NIAGARA Restructuring or otherwise, PROJECT
      ORANGE (or its assignee hereunder) shall have the right to replace this
      Agreement, as applicable, with power purchase and/or hedging contractual
      arrangements substantially equivalent to those that are entered into
      between the entity(ies) holding the transmission and/or distribution
      assets of NIAGARA or which will collect from customers the Competitive
      Transition Charge approved by the PSC and the entity(ies) holding the non-
      nuclear generating assets of NIAGARA, whether or not such assets are spun-
      off to NIAGARA's shareholders (a "Genco Contract"), provided that the
      term, price and quantity under this Transaction shall not be altered
      thereby, unless any of such terms are materially and expressly conditioned
      by certain provisions in the Genco Contract, in which case appropriate and
      equitable adjustments in such terms shall be mutually agreed upon by
      NIAGARA or its assignee, as the case may be, and PROJECT ORANGE.

VIII. ACCOUNT DETAILED

          Account for payments to NIAGARA:
          Bank name:     Citibank
          Address:       399 Park Avenue
                         New York, New York 10022
          ABA #:         021000089

                                   Page -12-
<PAGE>

          Account name:  Niagara Mohawk Power Corporation
          Account #:     40662754

          Account for payments to PROJECT ORANGE:
          Bank name:     ABN LaSalle National Bank
          Address:       135 South LaSalle Street
                         Chicago, IL 60603
          ABA #:         071000505
          Account name:  POA Operating Account
          Account #:     22-64153

     Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.

                                   Sincerely,

                                   NIAGARA MOHAWK POWER CORPORATION

                                   By: _______________________
                                          Name:
                                          Title:

Confirmed as of the date first above written:

PROJECT ORANGE ASSOCIATES, L.P.

By:    NCP Syracuse, Inc.
Its:   General Partner

By:    NCP Energy
Its:   Attorney-In-Fact

By: ____________________________
Name:  Bruce Levy
Title: President

                                   Page -13-
<PAGE>

                                    FORM OF
                         ACKNOWLEDGMENT OF ASSIGNMENT

     This Acknowledgment of Assignment, dated as of _______________ (this
"Assignment"), is made by _______________ ("Assignee") in favor of Niagara
Mohawk Power Corporation ("Party A" or "NIAGARA") and is acknowledged by
______________ ("Party B" or "Counterparty").

                             W I T N E S S E T H:

     WHEREAS, NIAGARA has entered into a certain ISDA Master Agreement,
including a Schedule thereto and an Indexed Price Swap Confirmation, each dated
as of ______________ (collectively, the "Agreement"), between NIAGARA and Party
B);

     WHEREAS, capitalized terms used herein which are not otherwise defined
shall have the meanings given to such terms in the Agreement; and

     WHEREAS, in accordance with Section 3.1 of the Confirmation, Party B has
assigned to assignee, and assignee has assumed from Party B, the obligations of
Party B under the Agreement relating to certain Notional Quantities of
electricity and Intervals subject of the Agreement (the "Assigned Obligations").

     NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignee hereby agrees as follows:

     1.   Assumption.  Assignee hereby assumes and agrees to be solely liable
          ----------
for and to pay, honor and discharge when due, all Assigned Obligations of Party
B under the Agreement relating to the following Notional Quantities of
electricity and Intervals:

          Notional Quantities       Intervals
          -------------------       ---------
          [to be supplied]          [to be supplied]

     2.   Tax Representations.  Assignee represents to NIAGARA as follow:
          -------------------

          (a)  Payer Tax Representations. For the purpose of Section 3(e) of the
               -------------------------
               Agreement, it is not required by any applicable law, as modified
               by the practice of any relevant governmental revenue authority,
               of any Relevant Jurisdiction to make any deduction or withholding
               for or on account of any Tax from any payment (other than
               interest under Sections 2(e), 6 (d)(ii) and 6 (e) of the
               Agreement) to be made by it to the other party under the
               Agreement.  In making this representation, it may rely on (i) the
               accuracy of any representation made by the other party pursuant
               to Section

                                   Page -1-
<PAGE>

               3(f) of the Agreement, (ii) the satisfaction of the agreement of
               the other party contained in Section 4(a)(i) or 4(a)(iii) of the
               Agreement and the accuracy and effectiveness of any document
               provided by the other party pursuant to Section 4(a)(i) and
               4(a)(iii) of the Agreement; and (iii) the satisfaction of the
               agreement of the other party contained in Section 4(d) of the
               Agreement, provided that it shall not be a breach of this
               representation where reliance is placed on clause (a)(ii) of this
               Section 2 and the other party does not deliver a form or document
               under Section 4(a)(iii) of the Agreement by reason of material
               prejudice to its legal or commercial position.

          (b)  Payee Tax Representation.  For the purpose of Section 3(f) of the
               ------------------------
               Agreement, Assignee represents that it is a
               __________________________.

     3.   Other Representations.  Assignee represents to NIAGARA on the date
          ---------------------
hereof (and in the case of the representations in Section 3(f) hereof, at all
times until the termination of the Agreement) that:

          (a)  Basic Representations.
               ---------------------

               (i)    Status. It is duly organized and validly existing under
                      the laws of the jurisdiction of its organization or
                      incorporation and, if relevant under such laws, in good
                      standing;

               (ii)   Powers. It has the power to execute this Assignment and
                      any other documentation relating to this Assignment to
                      which it is a party, to deliver this Assignment and any
                      other documentation relating to this Assignment that it is
                      required by this Assignment to deliver and to perform its
                      obligation under this Assignment and has taken all
                      necessary action to authorize such execution, delivery and
                      performance;

               (iii)  No Violation or Conflict. Such execution, delivery and
                      performance do not violate or conflict with any law
                      applicable to it, any provision of its constitutional
                      documents, any order or judgment of any court or other
                      agency of government applicable to it or any of its assets
                      or any contractual restriction binding on or affecting it
                      or any of its assets;

               (iv)   Consents. All governmental and other consents that are
                      required to have been obtained by it with respect to this
                      Assignment have been obtained and are in full force and
                      effect and all conditions of any

                                   Page -2-
<PAGE>

                                   such consents have been complied with; and

                         (v)       Obligations Binding. Its obligations under
                                   this Assignment constitute its legal, valid
                                   and binding obligations, enforceable in
                                   accordance with their respective terms
                                   (subject to applicable bankruptcy,
                                   reorganization, insolvency, moratorium or
                                   similar laws affecting creditors' rights
                                   generally and subject, as to enforceability,
                                   to equitable principles of general
                                   application (regardless of whether
                                   enforcement is sought in a proceeding in
                                   equity or at law)).

               (b)       Absence of Certain Events. No Event of Default or
                         Potential Event of Default or, to its knowledge,
                         Termination Event with respect to it has occurred and
                         is continuing and no such event or circumstance would
                         occur as a result of its entering into or performing
                         its obligations under this Assignment.

               (c)       Absence of Litigation. There is not pending or, to its
                         knowledge, threatened against it or any of its
                         Affiliates any action, suit or proceeding at law or in
                         equity or before any court, tribunal, governmental
                         body, agency or official or any arbitrator that is
                         likely to affect the legality, validity or
                         enforceability against it of this Assignment or its
                         ability to perform its obligations under this
                         Assignment.

               (d)       Accuracy of Specified Information. All applicable
                         information that is furnished in writing by or on
                         behalf of it to the other party and is identified for
                         the purpose of this Section 3(d) in the Schedule is, as
                         of the date of the information, true, accurate and
                         complete in every material aspect.

               (e)       Payer Tax Representation. Each representation specified
                         in Section 2 of this Assignment as being made by it for
                         the purpose of this Section 3(e) is accurate and true.

               (f)       Payee Tax Representations. Each representation
                         specified in Section 2 of this Assignment as being made
                         by it for the purpose of this Section 3(f) is accurate
                         and true.

               (g)       Non-reliance. In connection with this Assignment and
                         any other documentation relating to the Agreement to
                         which it is a party or that it is required to deliver:

                         (i)   it has consulted with its own legal, regulatory,
                               tax, business, investment, financial and
                               accounting advisors to the extent it has

                                   Page -3-
<PAGE>

                              deemed necessary, and it has made its own
                              investment, hedging and trading decisions
                              (including decisions regarding the suitability of
                              any Transaction made pursuant to the Agreement)
                              based upon its own judgment and upon any advice
                              from such advisors as it has deemed necessary and
                              not upon any view expressed by the other party;

                    (ii)      it is not relying on any representations (whether
                              written or oral) of the other party other than the
                              representations expressly set forth in the
                              Agreement and in any Conformation;

                    (iii)     it has a full understanding of all the terms,
                              conditions and risks (economic and otherwise) of
                              the Agreement and each Transaction and is capable
                              of assuming and is willing to assume those risks;

                    (iv)      it is entering into this Assignment, each
                              transaction and such other documentation as
                              principal, and not as agent or in any other
                              capacity, fiduciary or otherwise; and

                    (v)       the other party is not acting as fiduciary or
                              financial, investment or commodity trading advisor
                              for it.

               (h)  Eligible Swap Participant. It is an Aeligible swap
                    participant" as defined in Rule 35.1(b) of the regulations
                    of the Commodity Futures Trading Commission, 17 C.F.R. (S)
                    35.1 (b) (2) (1993).

          4.   Notices.  For purposes of Section 12(a) of the Agreement:
               -------

                    Except as otherwise specified in a Notice, all notices or
                    communications to assignee shall be sent to:

                    [Name]
                    [Address]
                    Facsimile:  [      ]
                    Attention:

          5.   Account Details.  Accounts for payments to Assignee:
               ---------------
                      [to be supplied]

                                   Page -4-
<PAGE>

IN WITNESS WHEREOF, Assignee has duly executed this Assignment as of the date
first written above.

                                        [ASSIGNEE]

                                        By:______________________________
                                             Name:
                                             Title:

Acknowledged as of the date
first written above.

[PARTY B]

By:______________________________
     Name:
     Title:

                                   Page -5-
<PAGE>

                                                                      SCHEDULE 1

                        PROJECT ORANGE ASSOCIATES, L.P.
                               INDEXING FORMULA

______________________________________________________________________________

        ICP = CP * [(15% * (GC/GC\\o\\)) + (41% * (INF/INF\\o\\))] + CN

     Where: ICP = The Indexed Contract Price.

               CP = The Contract Price in the reference year (CP = $53.84/MWh).

               GC = The average Niagara Border Spot Price for natural gas
               (delivered to pipe as stated in U.S. dollars ) published by
               Natural Gas Week in its Canadian Price Report first issue of
               month.

               GC\\o\\ = The average Niagara Border Spot Price for natural gas
               (delivered to pipe as stated in U.S. dollars) published by
               Natural Gas Week in its weekly Canadian Price Report for the
               month in which the Consummation Date occurs.

               INF = The Consumer Price Index - All Urban Consumers for New York
               - Northern New Jersey - Long Island, All items, available on the
               first day of the month from the US Department of Labor, Bureau of
               Labor Statistics (base year 1982-84=100).

               INF\\o\\ = The Consumer Price Index - All Urban Consumers for New
               York - Northern New Jersey - Long Island, All items, available on
               the first day of the month in which the Consummation Date occurs
               from the US Department of Labor, Bureau of Labor Statistics (base
               year 1982-84=100).

               CN = as indicated below in $/MWh:

               Contract Year             CN
               -------------            -----
                    1                   n/a
                    2                   n/a
                    3                   23.56
                    4                   23.99
                    5                   24.67
                    6                   25.28
                    7                   25.93

                                   Page -6-
<PAGE>

                                                           SCHEDULE 1, Continued

                        PROJECT ORANGE ASSOCIATES, L.P.
                               INDEXING FORMULA

________________________________________________________________________________

               Contract Year              CN
               -------------             -----
                    8                    26.77
                    9                    27.42
                    10                   27.70

                                   Page -7-
<PAGE>

                                                                     SCHEDULE 2A

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                       Contract Quantity Proxy Market Period (MWh/hr)
                              ---------------------------------------------------------------------------------------
                   Annual
                  Contract                                                                                               Contract
   Contract       Quantity                                                                                                 Price
     Year          (MWh)        Jan    Feb    Mar    Apr    May    Jun    Jul    Aug    Sep   Oct     Nov     Dec         ($/MWh)
                              ---------------------------------------------------------------------------------------
<S>               <C>         <C>      <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>     <C>     <C>
      1           663,000       77.80  77.60  77.80  77.74  68.20  76.30  75.40  75.30  68.90  77.80   77.70   77.80        53.84
                              ---------------------------------------------------------------------------------------
      2           663,000       77.80  77.60  77.80  77.74  68.20  76.30  75.40  75.30  68.90  77.80   77.70   77.80        54.62
                              ---------------------------------------------------------------------------------------
      3           663,000       77.80  77.60  77.80  77.74  68.20  76.30  75.40  75.30  68.90  77.80   77.70   77.80          I
                              ---------------------------------------------------------------------------------------
      4           663,000       77.80  77.60  77.80  77.74  68.20  76.30  75.40  75.30  68.90  77.80   77.70   77.80          I
                              ---------------------------------------------------------------------------------------
      5           663,000       77.80  77.60  77.80  77.74  68.20  76.30  75.40  75.30  68.90  77.80   77.70   77.80          I
                              ---------------------------------------------------------------------------------------
      6           663,000       77.80  77.60  77.80  77.74  68.20  76.30  75.40  75.30  68.90  77.80   77.70   77.80          I
                              ---------------------------------------------------------------------------------------
      7           663,000       77.80  77.60  77.80  77.74  68.20  76.30  75.40  75.30  68.90  77.80   77.70   77.80          I
                              ---------------------------------------------------------------------------------------
      8           663,000       77.80  77.60  77.80  77.74  68.20  76.30  75.40  75.30  68.90  77.80   77.70   77.80          I
                              ---------------------------------------------------------------------------------------
      9           663,000       77.80  77.60  77.80  77.74  68.20  76.30  75.40  75.30  68.90  77.80   77.70   77.80          I
                              ---------------------------------------------------------------------------------------
      10          663,000       77.80  77.60  77.80  77.74  68.20  76.30  75.40  75.30  68.90  77.80   77.70   77.80          I
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

For each Contract Year which is a leap year the Contract Quantity for the month
of February will be adjusted by a factor of 28 divided by 29.

I = Indexed Contract Price

                                   Page -8-
<PAGE>

                                                                     SCHEDULE 2B

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                Contract Quantity for Contract Years Following the Proxy Market Period (MWh/hr)
                              ---------------------------------------------------------------------------------------
                   Annual
                  Contract                                                                                                Contract
   Contract       Quantity                                                                                                  Price
     Year          (MWh)        Jan    Feb    Mar    Apr    May    Jun     Jul     Aug     Sep    Oct    Nov    Dec        ($/MWh)
                              ---------------------------------------------------------------------------------------
<S>               <C>         <C>     <C>    <C>    <C>    <C>    <C>     <C>     <C>     <C>    <C>    <C>    <C>
      1           663,000      75.69  75.68  75.68  75.68  75.68  75.68   75.68   75.68   75.69  75.69  75.69  75.69         53.84
                              ---------------------------------------------------------------------------------------
      2           663,000      75.69  75.68  75.68  75.68  75.68  75.68   75.68   75.68   75.69  75.69  75.69  75.69         54.62
                              ---------------------------------------------------------------------------------------
      3           663,000      75.69  75.68  75.68  75.68  75.68  75.68   75.68   75.68   75.69  75.69  75.69  75.69           I
                              ---------------------------------------------------------------------------------------
      4           663,000      75.69  75.68  75.68  75.68  75.68  75.68   75.68   75.68   75.69  75.69  75.69  75.69           I
                              ---------------------------------------------------------------------------------------
      5           663,000      75.69  75.68  75.68  75.68  75.68  75.68   75.68   75.68   75.69  75.69  75.69  75.69           I
                              ---------------------------------------------------------------------------------------
      6           663,000      75.69  75.68  75.68  75.68  75.68  75.68   75.68   75.68   75.69  75.69  75.69  75.69           I
                              ---------------------------------------------------------------------------------------
      7           663,000      75.69  75.68  75.68  75.68  75.68  75.68   75.68   75.68   75.69  75.69  75.69  75.69           I
                              ---------------------------------------------------------------------------------------
      8           663,000      75.69  75.68  75.68  75.68  75.68  75.68   75.68   75.68   75.69  75.69  75.69  75.69           I
                              ---------------------------------------------------------------------------------------
      9           663,000      75.69  75.68  75.68  75.68  75.68  75.68   75.68   75.68   75.69  75.69  75.69  75.69           I
                              ---------------------------------------------------------------------------------------
      10          663,000      75.69  75.68  75.68  75.68  75.68  75.68   75.68   75.68   75.69  75.69  75.69  75.69           I
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

For each Contract Year which is a leap year the Contract Quantity for the month
of February will be adjusted by a factor of 28 divided by 29.

I = Indexed Contract Price

                                   Page -9-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]