Document:

EXHIBIT 4.10

                         EIGHTH AMENDMENT AND CONSENT TO

                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

      This EIGHTH AMENDMENT AND CONSENT TO THIRD AMENDED AND RESTATED CREDIT
AGREEMENT (this "AMENDMENT") dated as of February 16, 2000 and effective as of
February 29, 2000 (the "EFFECTIVE DATE") is made among WEIDER NUTRITION
INTERNATIONAL, INC., a Delaware corporation ("HOLDINGS"), WEIDER NUTRITION
GROUP, INC., a Utah corporation ("NUTRITION"), WNG HOLDINGS (INTERNATIONAL)
LTD., a Nevada corporation ("INTERNATIONAL"; Holdings, Nutrition and
International, individually, each an "OBLIGOR" and, collectively, "OBLIGORS"),
GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation, for itself, as
Lender, and as Agent for Lenders (in such capacity, "AGENT"), and the other
Lenders signatory to the hereinafter defined Credit Agreement.

                                    RECITALS

      A. Agent, Lenders and Obligors are party to that certain Third Amended and
Restated Credit Agreement dated as of May 6, 1997 (as previously amended,
restated, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT").

      B. On and subject to the terms and conditions hereof, Obligors have
requested, and Agent and Lenders are willing to grant, certain amendments and
consents under the Credit Agreement.

      C. This Amendment shall constitute a Loan Document and these Recitals
shall be construed as part of this Amendment; capitalized terms used herein
without definition are so used as defined in Annex A to the Credit Agreement.

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:

      1. AMENDMENT. Subject to the conditions precedent set forth in Section 5
hereof, the Credit Agreement is hereby amended as follows:

            (a) The text of Section 1.5(a) of the Credit Agreement is replaced
      with the following text:

            "(a) Borrowers shall pay interest to Agent, for the ratable benefit
            of Lenders, in arrears on (i) the first day of each month with
            respect to Index Rate Loans and (ii) on the last day of each
            applicable LIBOR Period with respect to LIBOR Loans, at a per annum
            rate equal to (A) with respect to

                                      -1-
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            Index Rate Loans, the Index Rate plus a margin of 4.00% and (B) with
            respect to LIBOR Loans, the LIBOR Rate plus a margin of 5.50%."

            (b) The definition of "REVOLVING COMMITMENT TERMINATION DATE" in
      Annex A to the Credit Agreement is amended by deleting the reference to
      "February 29, 2000" and replacing such reference with a reference to "June
      30, 2000."

            (c) The definition of "REVOLVING CREDIT LOAN COMMITMENT" in Annex A
      to the Credit Agreement is amended by deleting the reference to "One
      Hundred Fifteen Million Dollars ($115,000,000)" and replacing such
      reference with a reference to "Ninety Million Dollars ($90,000,000)."

            (d) Annex E to the Credit Agreement is amended by deleting
      paragraphs (a) and (b) in their entirety and replacing them with the
      following paragraphs:

            "(a) To Agent and Lenders, within thirty (30) days after the end of
            each Fiscal Month (i) for Holdings and its Subsidiaries on a
            consolidated and consolidating basis, unaudited balance sheets as of
            the close of such Fiscal Month and the related statements of income
            and cash flow for that portion of the Fiscal Year ending as of the
            close of such Fiscal Month, in each case setting forth in
            comparative form the figures for the corresponding period in the
            prior year and the figures contained in the budget, all prepared in
            accordance with GAAP (subject to normal year-end adjustments), (ii)
            a certificate of the Chief Financial Officer of Holdings (on behalf
            of itself and each Borrower) attached to the foregoing financial
            information to the effect that (A) the attached Financial Statements
            present fairly in all material respects and in accordance with GAAP
            (subject to normal year-end adjustments and the absence of
            footnotes) the financial position and results of operations of
            Holdings and its Subsidiaries, on a consolidated and consolidating
            basis, in each case as at the end of, and for, such Fiscal Month,
            (B) all other attached financial information is true, correct and
            complete in all material respects and (C) there was no Default or
            Event of Default in existence as of such time or, if a Default or
            Event of Default shall have occurred and be continuing, describing
            the nature thereof and all efforts undertaken to cure such Default
            or Event of Default, and (iii) a statement setting forth the
            calculations used in determining compliance with each financial
            covenant set forth on ANNEX G;

            (b) To Agent and Lenders, within forty-five (45) days after the end
            of each Fiscal Quarter, a management discussion and analysis which
            includes a comparison to budget for that Fiscal Quarter and a
            comparison of performance for that Fiscal Quarter to the
            corresponding period in the prior year;"

            (e) Annexes G and J to the Credit Agreement are respectively
      replaced with Annexes G and J respectively attached as ANNEXES A and B
      hereto.

      2. CONSENT. Subject to the conditions precedent set forth in Section 5
hereof, notwithstanding any provision of the Credit Agreement to the contrary,
Agent and Lenders

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hereby consent to the transfer (in the form of a loan, advance or investment) on
or before the earlier of the Revolving Commitment Termination Date and June 30,
2000 of an aggregate amount of up to $1.5 million by Obligors to its
Subsidiaries not domiciled in the United States.

      3.    AGREEMENTS BY OBLIGORS.

            (a) Each Obligor hereby agrees that it will use its best efforts to
      (i) obtain, on or before February 18, 2000, a signed proposal letter with
      respect to refinancing of the Revolving Credit Loan Commitment and (ii)
      hold, on or before April 21, 2000, a syndication bank meeting with respect
      to such refinancing.

            (b) In addition to the fee referenced in Section 5(e), the Obligors
      jointly and severally agree to pay to Agent (at Agent's option, by payment
      or as a charge against the Revolving Loan) for the ratable benefit of each
      Lender, a fee of $450,000 on May 31, 2000, if the Revolving Credit Loan
      Commitment has not been refinanced and terminated on or before such date.

      4.    REPRESENTATIONS AND WARRANTIES. As of the date hereof, Obligors
hereby jointly and severally represent and warrant to Agent and Lenders as
follows:

            (a) After giving effect to this Amendment and the transactions
      contemplated hereby (i) no Default or Event of Default shall have occurred
      or be continuing and (ii) the representations and warranties of Obligors
      contained in the Loan Documents shall be true, accurate and complete in
      all respects on and as of the date hereof to the same extent as though
      made on and as of such date, except to the extent such representations and
      warranties specifically relate to an earlier date.

            (b) The execution, delivery and performance, as the case may be, by
      each Obligor of this Amendment and the other documents and transactions
      contemplated hereby are within each Obligor's corporate powers, have been
      duly authorized by all necessary corporate action (including, without
      limitation, all necessary shareholder approval) of each Obligor, have
      received all necessary governmental approvals, and do not and will not
      contravene or conflict with any provision of law applicable to any
      Obligor, the certificate or articles of incorporation or bylaws of any
      Obligor, or any order, judgment or decree of any court or other agency of
      government or any contractual obligation binding upon any Obligor.

            (c) This Amendment, the Credit Agreement and each other Loan
      Document is the legal, valid and binding obligation of each Obligor
      enforceable against each Obligor in accordance with its respective terms,
      except to the extent enforceability is limited by bankruptcy, insolvency
      or similar laws affecting the rights of creditors generally or by
      application of general principles of equity.

      5. CONDITIONS PRECEDENT. This Amendment shall become effective as of the
Effective Date, PROVIDED that as of the Effective Date each of the following
items shall have been received by Agent or satisfied, as the case may be, all in
form and substance satisfactory to Agent:

                                      -3-
<PAGE>
            (a)   AMENDMENT. This Amendment, duly executed by each Obligor,
      Agent and each Lender.

            (b)   REVOLVING CREDIT NOTES. Revolving Credit Notes reflecting each
      Revolving Credit Loan Commitment set forth on ANNEX A attached hereto,
      duly executed by each Borrower.

            (c)   NO DEFAULT. After giving effect to this Amendment and the
      transactions contemplated hereby, no Default or Event of Default shall
      have occurred and be continuing.

            (d)   WARRANTIES AND REPRESENTATIONS. After giving effect to this
      Amendment and the transactions contemplated hereby, the warranties and
      representations of each Obligor contained in this Amendment shall be true
      and correct in all respects.

            (e)   FEES, COSTS AND EXPENSES. Agent shall have received (at
      Agent's option, by payment or as a charge against the Revolving Loan) (i)
      for the ratable benefit of each Lender, an amendment fee of $450,000,
      which fee shall be fully earned as of the date hereof and shall be
      non-refundable when paid, and (ii) all other fees, costs and expenses,
      including reasonable attorneys' fees, due pursuant to the Loan Documents,
      including as incurred by Agent in connection herewith.

      6. EFFECT ON LOAN DOCUMENTS. This Amendment is limited to the specific
purpose for which it is granted and, except as specifically set forth above (a)
shall not be construed as a consent, waiver, amendment or other modification
with respect to any term, condition or other provision of any Loan Document and
(b) each of the Loan Documents shall remain in full force and effect and are
each hereby ratified and confirmed.

      7. SUCCESSORS AND ASSIGNS. This Amendment shall be binding on and shall
inure to the benefit of Obligors, Agent, Lenders and their respective successors
and assigns; PROVIDED that no Obligor may assign its rights, obligations, duties
or other interests hereunder without the prior written consent of Agent and
Lenders. The terms and provisions of this Amendment are for the purpose of
defining the relative rights and obligations of Obligors, Agent and Lenders with
respect to the transactions contemplated hereby and there shall be no third
party beneficiaries of any of the terms and provisions of this Amendment.

      8. ENTIRE AGREEMENT. This Amendment, including all documents attached
hereto, incorporated by reference herein or delivered in connection herewith,
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all other understandings, oral or written, with
respect to the subject matter hereof.

      9. FEES AND EXPENSES. Obligors shall pay to Agent on demand all fees,
costs and expenses owing by Obligors pursuant to Section 11.3 of the Credit
Agreement, including those incurred by Agent or otherwise payable in connection
with the preparation, execution and delivery of this Amendment.

                                      -4-
<PAGE>
      10. INCORPORATION OF CREDIT AGREEMENT. The provisions contained in
Sections 11.9 and 11.14 of the Credit Agreement are incorporated herein by
reference to the same extent as if reproduced herein in their entirety with
respect to this Amendment.

      11. ACKNOWLEDGMENT. Each Obligor hereby represents and warrants that there
are no liabilities, claims, suits, debts, liens, losses, causes of action,
demands, rights, damages or costs, or expenses of any kind, character or nature
whatsoever, known or unknown, fixed or contingent (collectively, the "CLAIMS"),
which any Obligor may have or claim to have against Agent or any Lender, or any
of their respective affiliates, agents, employees, officers, directors,
representatives, attorneys, successors and assigns (collectively, the "LENDER
RELEASED PARTIES"), which might arise out of or be connected with any act of
commission or omission of the Lender Released Parties existing or occurring on
or prior to the date of this Amendment, including, without limitation, any
Claims arising with respect to the Obligations or any Loan Documents. In
furtherance of the foregoing, each Obligor hereby releases, acquits and forever
discharges the Lender Released Parties from any and all Claims that any Obligor
may have or claim to have, relating to or arising out of or in connection with
the Obligations or any Loan Documents or any other agreement or transaction
contemplated thereby or any action taken in connection therewith from the
beginning of time up to and including the date of the execution and delivery of
this Amendment. Each Obligor further agrees forever to refrain from commencing,
instituting or prosecuting any lawsuit, action or other proceeding against any
Lender Released Parties with respect to any and all Claims which might arise out
of or be connected with any act of commission or omission of the Lender Released
Parties existing or occurring on or prior to the date of this Amendment,
including, without limitation, any Claims arising with respect to the
Obligations or any Loan Documents.

      12. CAPTIONS. Section captions used in this Amendment are for
convenience only, and shall not affect the construction of this Amendment.

      13. SEVERABILITY. Whenever possible each provision of this Amendment shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Amendment shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Amendment.

      14. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument. Delivery of an
executed counterpart of a signature page to this Amendment by telecopy shall be
effective as delivery of a manually executed counterpart of this Amendment.

                             [signature pages follow]

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<PAGE>
      IN WITNESS WHEREOF, this Eighth Amendment and Consent to Third Amended and
Restated Credit Agreement has been duly executed and delivered as of the day and
year first above written.

                              WEIDER NUTRITION INTERNATIONAL, INC.
                              WEIDER NUTRITION GROUP, INC.
                              WNG HOLDINGS (INTERNATIONAL) LTD.

                              For each of the foregoing:

                              By:  _______________________________

                              Title:  ______________________________

                              GENERAL ELECTRIC CAPITAL CORPORATION,
                              as Agent and Lender

                              By: _______________________________

                              Title:  Duly Authorized Signatory

                              FIRST UNION NATIONAL BANK, successor by merger to
                              Corestates Bank, N.A.

                              By: _______________________________

                              Title:______________________________

                              LASALLE  BANK NATIONAL ASSOCIATION,
                              successor to LaSalle National Bank

                              By: _______________________________

                              Title:______________________________

                                      -6-
<PAGE>
                              THE BANK OF NOVA SCOTIA

                              By: _______________________________

                              Title:______________________________

                              BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.

                              By: _______________________________

                              Title:______________________________

                              By: _______________________________

                              Title:______________________________

                              DRESDNER BANK AG, NEW YORK AND
                              GRAND CAYMAN BRANCHES

                              By: _______________________________

                              Title:______________________________

                              By: _______________________________

                              Title:______________________________

                              ZIONS FIRST NATIONAL BANK

                              By: _______________________________

                              Title:______________________________

                                      -7-
<PAGE>
                                     Annex A

                             ANNEX G (SECTION 6.20)
                                       TO
                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                               FINANCIAL COVENANTS

            Nutrition shall not breach or fail to comply with the following
financial covenant, which shall be calculated in the same manner as in the most
recently delivered and approved Projections and in accordance with GAAP,
consistently applied:

MINIMUM EBITDA. Nutrition shall have, at the end of the period described below,
EBITDA equal to or greater than the amount set forth opposite such period:

            PERIOD                                                      AMOUNT
            ------                                                   -----------
            Nine Fiscal Months ending February 29, 2000              $12,050,000
            Ten Fiscal Months ending March 31, 2000                  $12,525,000
            Eleven Fiscal Months ending April 30, 2000               $13,325,000
            Twelve Fiscal Months ending May 31, 2000                 $14,400,000
            Twelve Fiscal Months ending June 30, 2000                $13,225,000

                                      -8-
<PAGE>
                                     Annex B

                                     ANNEX J

                                       TO
                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                   COMMITMENTS

                                          REVOLVING CREDIT
LENDER                                    LOAN COMMITMENT         PERCENTAGE
-----                                     ---------------         ----------

General Electric Capital Corporation      $ 30,150,000.00              33.50%

First Union National Bank                 $ 15,525,000.00              17.25%

LaSalle Bank National Association         $ 15,525,000.00              17.25%

The Bank of Nova Scotia                   $  7,200,000.00               8.00%

Bank Austria Creditanstalt                $  7,200,000.00               8.00%
Corporate Finance, Inc.

Dresdner Bank AG, New York and            $  7,200,000.00               8.00%
Grand Cayman Branches

Zions First National Bank                 $  7,200,000.00               8.00%
                                                                  ----------
            Total:                        $ 90,000,000.00             100.00%
                                          ===============         ==========

                                      -9-EXHIBIT 10.24.4

                       OPERATION AND MAINTENANCE AGREEMENT

                                     BETWEEN

                             PANDA-BRANDYWINE, L.P.

                                       AND

                           PANDA GLOBAL SERVICES, INC.

                                                                     17 May 1999
<PAGE>
                       OPERATION AND MAINTENANCE AGREEMENT

                                     BETWEEN

                             PANDA-BRANDYWINE, L.P.

                                       AND

                           PANDA GLOBAL SERVICES, INC.

                                    RECITALS

     THIS AGREEMENT is made and entered into on the 17th day of June, 1999, by
and between Panda-Brandywine, L.P. ("Owner"), a Delaware limited partnership and
Panda Global Services, Inc. ("Operator"), a Delaware Corporation.

     WHEREAS, Owner and Potomac Electric Power Company entered into a Power
Purchase Agreement dated as of August 9, 1991, as amended on September 16, 1994
and, pursuant to which Owner operates a natural gas and oil fired 230 net
megawatt cogeneration facility and a distilled water facility relating thereto
(collectively the "Facility") in Brandywine, Maryland and pursuant to which
Owner will sell and certain persons including but not limited to utilities,
factories, and power marketers (customers) will purchase electrical energy
produced by the Facility; and

     WHEREAS, Owner and the Brandywine Water Company ("Brandywine Water"), a
Delaware Corporation, entered into a Steam Sales Agreement (the "Steam Sales
Agreement") attached hereto as Exhibit A pursuant to which Owner will sell and
Brandywine Water will purchase steam produced by the Facility; and

     WHEREAS, Owner desires to have Operator provide operation and maintenance
services at the Facility and Operator desires to provide such services;

     NOW, THEREFORE, in consideration of the foregoing and of the premises
hereinafter contained, Owner and Operator agree as follows:

                                       1
<PAGE>
                                    SECTION I

                                   DEFINITIONS

     Whenever the following terms appear in this Agreement, they shall have the
following meanings:

          "Actual Commercial Operation Date" shall have the meaning given such
term in the Power Agreement.

          "Affiliate" shall mean, with respect to any corporation, a corporation
which controls, is controlled by, or is under common control with, such
corporation or successor thereto.

          "Agreement" shall mean this Operation and Maintenance Agreement made
and entered into on the date set forth above by and between Panda-Brandywine,
L.P. and Panda Global Services, Inc.

          "Annual Budget" shall mean the budget of all costs and expenses
anticipated to be incurred by Operator to meet its obligations under this
Agreement during any calendar year, or part thereof.

          "Approved Budget" shall mean the annual budget prepared and submitted
by Operator pursuant to Section 2.17 (n) hereof, which has been approved by
Owner.

          "Authorization To Proceed" shall mean Owner's written notice to
Operator to commence the work required by this Agreement.

          "Claims" shall have the meaning given such term in Section 9.02 (a)
hereof

          "Commencement Date" shall mean the calendar date upon which Operator
is to commence the work required by this Agreement as specified in the
Authorization to Proceed. The expected date for the Commencement Date is
November 1, 1999.

          "Commercial Operation" shall mean the commencement of regular
deliveries of electricity to the customers pursuant to the Power Agreements,
which occurs as of the Actual Commercial Operation Date.

          "Commercial Operation Date" shall mean the date of Commercial
Operation, which occurred on October 31, 1996.

          "Construction Agreement" shall mean the Amended and Restated Turnkey
Construction Agreement between Owner and Turnkey Contractor relating to the
design, construction, testing and starting up of the Facility as the same may be
amended, supplemented or modified from time to time.

                                       2
<PAGE>
          "Consumables" shall be the meaning set forth in Section 2.07 hereof.

          "Delivery Facilities" shall mean the lines and pipes used to deliver
gas and water to the facility.

          "Dependable Capacity" shall mean the capacity of the Facility
determined by testing pursuant to Section 8.2 of the Power Agreement.

          "Equivalent Availability Factor" shall have the meaning set forth in
the Power Agreement.

          "Equivalent Forced Outage Rate" shall have the meaning set forth in
the Power Agreement.

          "Facility" shall mean the natural gas and oil fired 230 net megawatt
cogeneration facility and the distilled water facility built by Owner near
Brandywine, Maryland to supply electrical energy to the Utility, factories, and
power marketers (customers) and thermal energy to Brandywine Water and all
equipment contained therein and parts thereof. It shall include, without
limitation, Delivery Facilities, the fuel oil storage tank, all fuel oil
delivery lines from the fuel oil storage tank to the balance of the Facility,
the portion of the natural gas pipeline located on the Site, interconnection
facilities to interconnect with the Utility (to the extent located on Owner's
side of the interconnection point that is on the high side of Owner's step-up
transformers) and other equipment and systems described in the Construction
Agreement.

          "Indemnitee" shall have the meaning set forth in Section 9.02 hereof.

          "Steam Sales Agreement" shall mean the Steam Sales Agreement between
Owner and Brandywine Water as the same may be amended, supplemented or modified
from time to time.

          "Lender" and "Lenders" shall mean the financing entities, security
holders, investors, equity providers and others providing financing or financing
to or on behalf of Panda, for the development, construction, ownership,
operation, and maintenance of the Facility or any portion thereof, or any
trustee or agent acting on behalf of any of the foregoing.

          "Maintenance Reserve" shall mean the fund established to cover major
maintenance expenditures such as combustion turbine overhauls and other
equipment major maintenance overhauls.

          "Operator" shall mean Panda Global Services Inc., a Delaware
Corporation.

          "Owner" shall mean Panda-Brandywine, L.P., a Delaware Limited
Partnership.

                                       3
<PAGE>
          "Plant General Manager" shall mean Operator's on-site employee
responsible for the operation and maintenance of the Facility.

          "Project Funding" shall mean the date upon which the initial loan was
made by the Lender to Owner.

          "Power Agreement" shall mean the Power Purchase Agreement between
Owner and Utility dated as of August 9, 1991, and as amended on September 16,
1994 and as supplemented, amended or modified from time to time during the term
of this Agreement, which is on file at the Facility at 16400 Mattawoman Drive,
Brandywine, Maryland and Panda's Corporate offices located at 4100 Spring Valley
Rd. Suite 1001, Dallas, Texas.

          "Prudent Utility Practices" shall mean those practices generally
followed by the United States electric utility industry with respect to the
operation and maintenance of electric generating, transmission and distribution
facilities (including, but not limited to, the operating and safety practices
generally followed by the electric utility industry).

          "Qualifying Facility" or "QF" shall mean a cogeneration facility
meeting the requirements for a qualifying cogeneration facility set forth in the
Public Utility Regulatory Policies Act of 1978, Public Law No. 95-617 as amended
from time to time and in the regulations with respect thereto, including Title
18 of the Code of Federal Regulations Part 292 as the same may be amended from
time to time.

          "Reimbursable Costs" or "Reimbursable Cost" shall mean all reasonable
and actual direct costs properly incurred pursuant to Sections 2.04 through
2.08, and 2.13 of this Agreement.

          "Site" shall mean that real property upon which the Facility is
located.

          "Summer Period" shall mean the months of June, July, and August.

          "Termination Payment" shall be a lump-sum payment as defined in
Section 8.01 hereof.

          "Turnkey Contractor" shall mean Raytheon Engineers and Constructors,
Inc. a Delaware Corporation.

          "Utility" shall mean Potomac Electric Power Company, a District of
Columbia and Virginia corporation, or any successor thereto.

          "Winter Period" shall mean the months of December, January and
February.

                                       4
<PAGE>
                                   SECTION II

                      SERVICES TO BE PERFORMED BY OPERATOR

     Operator will provide all operation and maintenance services necessary for
the efficient, sound and effective operation of the Facility so as to enable the
Facility to respond to the thermal requirements and operation and maintenance
requirements of Brandywine Water, as set forth in the Steam Sales Agreement,
attached as Exhibit A hereto, and to satisfy the requirements set forth in the
Power Agreement, attached as Exhibit F, and to maintain the Facility in good
mechanical and operating repair and condition all in accordance with Prudent
Utility Practices in a manner consistent with that of a prudent non-utility
owner maintaining its own facility for its own account. Without limiting the
generality of the foregoing, Operator shall do the following:

2.01 Personnel. Operator shall hire, train and provide, in a manner
          consistent with that of a prudent non-utility owner maintaining,
          competent qualified personnel to operate and maintain the Facility
          including, without limitation, the following:

          (a)  A General Manager, Plant Manager, Operations Manager, Maintenance
               Manager, and Plant Engineer assigned to the Facility full time,
               to manage on-site operations and maintenance which individuals
               shall be approved in writing by Owner and shall not be replaced
               without the written approval of the Owner.

          (b)  Additional full time on-site personnel as needed.

          (c)  Additional engineering support, maintenance, and management
               personnel not located full time at the Facility, as needed to
               perform the requirements of this Agreement.

Without limiting the generality of the foregoing, Operator will (i) staff the
Facility with two or more qualified operators (in the control room or
electronically connected thereto when elsewhere on the Facility site) during all
hours when the Facility is in operation or when the generator is electrically
connected to the Utility's system; (ii) provide those full time on-site
personnel required to operate the Facility in accordance with Prudent Utility
Practices, including without limitation, those positions identified in Exhibit B
hereto; and (iii) provide the home office support identified in Exhibit C
hereto. Operator shall submit the qualifications of full-time on-site personnel
hired for review and approval by Owner as requested in writing.

2.02 Staffing. After receiving Authorization to Proceed, Operator shall hire the
personnel identified in Exhibit B.

2.03 Operation and Maintenance. Operator shall operate and maintain the
Facility, seven days a week, twenty-four hours per day, in accordance with
Prudent Utility Practices, manufacturers' recommendations as applicable, and as
required by the Power Agreements, loan,

                                       5
<PAGE>
single investor or leveraged lease documents relating to the Facility and this
Agreement. The Operator will operate the Facility in a manner calculated to
maximize the useful life of the equipment, to avoid excessive fuel consumption,
to minimize downtime for repairs, to avoid forced outages, and to maintain (to
the extent controllable by Operator) the Facility's QF status, in a manner
consistent with that of a prudent non-utility owner. Operator shall consult with
Owner in order to clarify its obligations in the event that any conflict exists
in these obligations under this Agreement. Operator shall be solely responsible
for the operation and maintenance of the Facility hereunder but will follow the
directions of Owner with respect to financi al or economic matters as long as
compliance with such directions will not be likely to materially and adversely
affect the operation and maintenance of the Facility as required hereunder.

2.04  Tools.

          (a)  Operator shall review the tool list developed by the Turnkey
               Contractor and the previous O&M Contractor and identify and
               prepare a list of recommended tools required to adequately
               perform the requirements of this Agreement. Said list will be
               submitted to Owner and shall be modified or supplemented
               throughout the term of this Agreement by agreement of the parties
               as necessary to permit the timely acquisition thereof.

          (b)  The initial supply of tools identified on the list described in
               paragraph (a) shall be subject to the written approval of the
               Owner and will be purchased by Operator to Owner's account as
               provided in Section 4 of this Agreement or as a Reimbursable
               Cost. Operator shall promptly notify Owner in writing of tools
               that were not approved that could impact its obligations and
               duties hereunder.

          (c)  Operator shall be responsible for annually, or as otherwise
               reasonably requested by Owner in writing, preparing and
               presenting to Owner an accurate reconciliation of the Facility's
               tool inventory.

          (d)  Operator shall be responsible for the use, management, control,
               care, and custody of Facility tools.

          (e)  Operator shall repair or replace as required, as a Reimbursable
               Cost or to the account of Owner, as provided in Section 4, tools
               that deteriorate due to normal use.

          (f)  Operator shall replace, to the account of Operator, tools that
               are broken due to misuse, stolen or lost while in Operator's
               care.

          (g)  Operator shall periodically, and no less frequently than
               annually, review Facility tools, and make recommendations to
               Owner for additional tools that would improve Facility
               operations.

                                       6
<PAGE>
2.05  Spare Parts.

          (a)  Operator shall review the spare parts list developed by the
               Turnkey Contractor and previous O&M Contractor, and shall
               identify and prepare a list of recommended spare parts required
               to adequately perform the requirements of this Agreement. Said
               list will be submitted to Owner and shall be modified or
               supplemented throughout the term of this Agreement by agreement
               of the parties as necessary to permit the timely acquisition
               thereof. Spare parts will be determined with reference to
               generally accepted practices in the industry and with reference
               to manufacturer's recommendations.

          (b)  The supply of spare parts identified on the list described in
               paragraph (a) shall be subject to the written approval of the
               Owner and will be purchased by Operator for Owner's account as
               provided in Section 4 of this Agreement or as a Reimbursable
               Cost.

          (c)  Operator shall, subsequent to submitting the initial list of
               spare parts described in paragraph (a) be responsible for
               purchasing, for Owner's account as provided in Section 4 hereof
               or as a Reimbursable Cost, replacements for said listed spare
               parts as necessary.

          (d)  Operator shall be responsible for the use, care, custody,
               management and control of said spare parts.

          (e)  Operator shall be responsible for annually on or about January
               15, or as otherwise reasonably requested by Owner in writing,
               performing and presenting to Owner an accurate reconciliation of
               the Facility's spare parts inventory.

          (f)  Operator shall be responsible for establishing proper and
               effective on-Site warehousing and inventory controls for such
               spare parts.

          (g)  Operator shall purchase additional parts subject to Owner's
               written approval or replacement parts to maintain inventory at
               levels to support Facility requirements, as a Reimbursable Cost
               or to the account of Owner as provided for in Section 4.

2.06  Equipment.

          (a)  Operator shall identify and prepare a list of recommended
               equipment required to adequately perform the requirements of this
               Agreement. Said list will be submitted to Owner or supplemented
               throughout the term of this

                                       7
<PAGE>
               Agreement by agreement of the parties as necessary to permit the
               timely acquisition thereof.

          (b)  The equipment identified on the list of such equipment described
               in paragraph (a) shall be subject to the written approval by
               Owner and shall be purchased by Operator for Owner's account as
               provided in Section 4 or as a Reimbursable Cost. Operator shall
               promptly notify Owner in writing of equipment that was not
               approved that could impact Operator's obligations and duties
               hereunder.

          (c)  Operator shall periodically review the equipment required to
               perform under this Agreement and make recommendations to Owner of
               modifications or additions to Facility equipment throughout the
               term of this Agreement that would improve or enhance Facility
               operations.

          (d)  Operator shall be responsible for the use, management, care,
               custody, operation and maintenance of said equipment. Operator
               shall repair or replace, as a Reimbursable Cost or to the account
               of Owner as provided for in Section 4, this equipment.

          (e)  Operator shall, when approved in advance by Owner in writing,
               purchase and install additional equipment as a Reimbursable Cost
               or to the account of Owner as provided for in Section 4.

2.07  Consumables and Other Materials.

          (a)  Operator shall identify those consumable, expendable, and other
               materials and supplies ("Consumables") necessary to perform the
               requirements of this Agreement. Said Consumables will be
               identified to Owner throughout the term of this Agreement as
               necessary to permit the timely acquisition thereof.

          (b)  Operator shall use, manage, care for, control and maintain
               Consumables as required to support the needs of the Facility, and
               purchase Consumables, as Reimbursable Costs or to Owner's account
               as provided in Section 4, throughout the term of this Agreement.

2.08 Purchased Parts, Labor and Services. Operator shall identify and purchase
as Reimbursable Costs or for the account of Owner as provided for in Section 4,
parts other than spare parts and purchased labor and services throughout the
term of this Agreement as necessary to perform the requirements of this
Agreement, including but not limited to the labor and services identified in
Exhibit D hereto. This will include purchases for the services of factory
personnel, or personnel trained and qualified to provide equivalent services, to
perform manufacturer's recommended service procedures when deemed necessary.
Without limitation, Operator shall purchase as a Reimbursable Cost third-party
contracts to clean up and remove hazardous waste

                                       8
<PAGE>
and solid waste, except such waste arising out of the negligence or fault of
Operator. Any maintenance or repair that can reasonably be performed by regular
full time on-site personnel, provided pursuant to Section 2.01 above and Exhibit
D, will be performed by them, without additional compensation.

2.09 Maintenance and Repairs. Operator shall comply with procedures developed
pursuant to Section 2.10 below and otherwise provide all maintenance and repair
services necessary to keep the Facility in good working order in a manner
consistent with that of a prudent non-utility owner, to correct by appropriate
measures any damage to or malfunction of the Facility, and provide all necessary
information to and cooperate with Owner so that Owner may enforce or make
warranty claims with respect to any repair or malfunction. Any parts utilized in
performing operation and maintenance services shall be new or refurbished
according to manufacturer's recommendations. Operator shall assign to Owner the
manufacturer's warranty on all parts Operator has purchased.

2.10 Operating, Maintenance and Safety Plans and Procedures. Using the
operations and maintenance manuals supplied to Owner by the Turnkey Contractor
pursuant to the Construction Agreement, those supplied by the previous O&M
Contractor, and as supplemented by Operator's standard procedures developed for
like facilities, Operator shall develop (and furnish copies to Owner for review
and approval in writing) necessary operating, maintenance and safety plans and
procedures including, without limitation, the following (each of which shall
satisfy the requirements set forth in the Power Agreement):

          (a)  Startup, operating, dispatching and shutdown procedures for
               Facility equipment and systems including appropriate periodic
               checks of and/or for water quality and treatment requirements,
               fluid or gaseous leaks, improper temperatures, excessive noise
               and vibrations, proper pressures and liquid levels, and other
               pertinent operating information indicative of equipment
               condition.

          (b)  Periodic maintenance plans identifying schedules and procedures
               for equipment lubrication, packing and seal checks, filter checks
               and services, and electrical and control system checks.

          (c)  A Ten Year Plan, other Plans and procedures for long-term
               maintenance and overhaul of Facility equipment.

          (d)  Plans and procedures for as-needed repairs and overhauls.

          (e)  Plans and procedures for emergency service and repairs as needed,
               twenty-four (24) hours a day, each day of the year. Such
               procedures will provide for expedited service and repairs; for
               the availability of Operator's management personnel, in
               connection with such services, on a twenty-four (24) hours a day,
               each day of the year basis; for notification of and expediting
               the availability of factory or service personnel when necessary

                                       9
<PAGE>
               repairs are beyond the capabilities of on-site personnel, and for
               the immediate notification of Owner of any emergency event or
               condition, of anticipated corrective actions to be taken and of
               anticipated service and repair times and consequences.

          (f)  Procedures for identifying, acquiring and maintaining required
               spare parts to ensure that the Facility has an adequate inventory
               of spare parts, in accordance with Section 2.05 of this
               Agreement.

          (g)  Procedures for notice to and approval by Owner of any alterations
               to the Facility, so that no alterations to the Facility will be
               made without the written consent of Owner.

Operator will, without limitation, provide in such plans and procedures for
visual, mechanical or instrumental inspection as necessary in order to provide
early detection of required adjustments, repairs or replacements so that
required adjustments, repairs or replacements can be scheduled with minimum
interference to Facility operations insofar as possible. Such procedures will be
consistent with applicable manufacturer's recommendations, will provide for the
services of factory representatives and/or outside consultants where appropriate
and will provide for orderly shutdowns and minimum interference with operations.
Such procedures will be reviewed as required and in no event less frequently
than annually with a copy of the review provided to Owner. No alterations to the
Facility shall, in any event, be made without the prior written approval of
Owner.

2.11 Records. Operator shall keep and maintain maintenance and operation records
for the Facility and for the equipment therein. Such records shall satisfy the
requirements set forth in the Power Agreement and Lenders requirements under
loan, single investor or leveraged lease documents relating to the Facility and
shall include, without limitation: the logging of daily exception reports; daily
Operator's logs; a record of all maintenance and repairs performed; copies of
all plans and procedures developed pursuant to Section 2.10 above or otherwise;
emissions and compliance reports; equipment and instrument calibration records;
fuel consumption records; steam production; water consumption, consumption and
delivery records; and electricity production, consumption and delivery records
and QF status calculation records. All records shall be made available to the
Owner.

2.12 Reports. Operator shall prepare and furnish a monthly operations report
within fifteen (15) business days following the close of each calendar month,
including the following:

          (a)  A review of operations for the prior month (fuel consumption;
               electricity and steam production, consumption and deliveries and
               QF status records, etc.).

          (b)  Identification of significant exceptions to the normal status of
               equipment.

                                       10
<PAGE>
          (c)  Identification of all major repairs or alterations made to
               equipment during the prior month.

          (d)  Identification and explanation of significant performance
               deviations from the prior month or from anticipated performance.

          (e)  Identification of maintenance and shutdowns planned for the
               succeeding twelve (12) months.

          (f)  Such other matters as may be reasonably requested by Owner in
               writing.

Operator shall also provide all notices required in connection with the
operation and maintenance of the Facility by applicable permits, laws and
regulations and the Power Agreement and loan, single investor or leveraged lease
documents relating to the Facility within the times required. Owner shall be
responsible, pursuant to Section 3.08 (c), for providing those documents which
identify all required notices relating to the operation and maintenance of
equipment contained in the Facility that are required by this paragraph.

2.13 Governmental, Regulatory, Utility And Safety Requirements. Operator shall
operate and maintain the Facility in compliance with all-applicable laws,
permits, approvals, ordinances, rules, regulations and orders of Federal, State
and local governmental authorities. Operator shall also comply with all safety
and other rules and regulations reasonably established by Owner with respect to
the Facility and with all safety and other rules and regulations established by
Utility with respect to interconnection delivery facilities and with respect to
property owned by or leased from the Utility. In the event that such
requirements change during the term of the Agreement, and such changes require
additional costs of Operator, these additional costs shall be mutually
determined by Owner and Operator and reimbursed to Operator by Owner as
Reimbursable Costs. In the event such changes require alteration to the
Facility, Owner shall be responsible for the costs of such alterations.

2.14 Liens And Encumbrances. Operator shall keep all real property and all
personal property and equipment associated with or part of the Facility free and
clear of all liens and encumbrances caused by an action or failure to act by
Operator or any of its consultants, suppliers or subcontractors in the
performance of its obligations under this Agreement, including, without
limitation, failure by Operator to pay, when due, any bill or charge for labor
or services performed or materials or equipment furnished for use in connection
with this Agreement. Nothing herein contained shall require Operator to pay any
claims for labor, materials or services which Operator, in good faith disputes
and which Operator, at its own expense, is currently and diligently contesting;
PROVIDED, HOWEVER, that Operator shall, not later than ten (10) days after
notice of the filing of any claim of lien that is disputed or contested by
Operator, post a surety bond sufficient to release said claim of lien.

2.15 Metering. Operator shall verify the accuracy of meters and devices used to
measure the delivery of thermal energy as required, but in no event less
frequently than quarterly and shall verify the accuracy of meters and devices
used to measure the delivery of electricity, natural gas,

                                       11
<PAGE>
steam and water as required, but in no event less frequently than annually. Such
verification is to be performed in a manner consistent with the requirements of
the Power Agreements.

2.16 Waste. Operator shall not allow any hazardous or solid waste to accumulate
on the Site in contravention of any applicable law, regulation or governmental
permit or license, the Power Agreement, or any loan or leveraged lease documents
relating to the Facility.

2.17 Scope of Work. Operator shall perform those services described in this
Agreement. Such services shall be performed and supplied in connection with, but
not limited to, the following:

          (a)  Operations & Maintenance of the Facility, including without
               limitation, the following:

               (i)  The development of training programs and development of
                    Facility procedures.

               (ii) The hiring and training of qualified Operator personnel.

          (b)  Testing of the Facility required by this Agreement and Power
               Agreements.

          (c)  Startup of the Facility in connection with each dispatch from the
               Utility or for the Customers.

          (d)  Management and provision of all activities required for Facility
               support and operation, under the direction of Owner, including
               but not limited to: community interface, fuel scheduling, and
               management of other contracts and services necessary to support
               the Facility.

          (e)  Operation of the Facility.

          (f)  Management of all operation and maintenance requirements of the
               Facility.

          (g)  Maintenance of the Facility.

          (h)  Furnishing electrical energy to the Customers, together with the
               maintenance schedules and other records required by the
               Customers.

          (i)  Providing home office support activities for the Facility
               including but not limited to those of Exhibit C.

          (j)  Assist Owner in maintaining and renewing the necessary permits
               and licenses of Section 3.04.

                                       12
<PAGE>
          (k)  Submit a desired schedule of Scheduled Outages as defined in the
               Power Agreement (including the duration of each outage) to Owner
               at least four (4) weeks before Owner is required to supply same
               to Customers.

          (l)  Cooperate with Customers and Owner in scheduling and performing
               all scheduled maintenance outages, routine maintenance and major
               overhaul outages in accordance with Owner's obligations of the
               Power Agreements or as set forth in loan or leveraged leased
               documents relating to the Facility.

          (m)  Preparation and submission to Owner, for Owner's approval, of an
               Annual Budget for the Facility, at least ninety (90) days before
               the beginning of each calendar year. Such budget shall be
               consistent with the requirements of this Agreement and meet the
               requirements of the Power Agreements or any loan, single investor
               or leveraged lease documents relating to the Facility.

          (n)  Provide sufficient training to operating and maintenance
               personnel to assure that their capabilities and qualifications
               are maintained.

          (o)  Cooperate with Customers, Utility, and Owner in scheduling and
               performing all Dependable Capacity Testing for the Summer and
               Winter Periods and other testing required.

                                   SECTION III

                        SERVICES TO BE PERFORMED BY OWNER

Owner shall be responsible for the following:

3.01 Office Space, Equipment, And Administrative Services. Owner shall provide
office and administrative space, administrative services and equipment for
Operator at the Facility.

3.02 Tools, Spare Parts, Equipment And Consumables. Owner will:

          (a)  Provide written approval or give timely objections to the lists
               of tools, spare parts, equipment, and Consumables identified by
               Operator pursuant to Sections 2.04, 2.05, 2.06, and 2.07
               hereinabove.

          (b)  Pay for approved supplies of tools, spare parts, equipment,
               Consumables, and purchased parts, labor and services and
               Reimbursable Costs required by Operator to perform its
               responsibilities as defined in Section II of this Agreement, as
               provided for in Section 4.01 and 4.02.

3.03  Utilities. Owner will provide and pay for all utilities.

                                       13
<PAGE>
3.04 Permits And Licenses. Owner has obtained and will maintain all necessary
permits and licenses, except those that are issued in the name of Operator.

3.05 Staffing Schedules. Owner will provide written approval or give timely
objections for its obligation to give staffing schedule approval required in
Section 2.02.

3.06 Manuals. Consistent with the needs of Operator for such material to perform
its obligations under this Agreement, Owner shall deliver, or cause to be
delivered to Operator, copies of operating and maintenance manuals for all
equipment purchased since COD or installed in the Facility and any and all
additional documents received from Turnkey Contractor under the Construction
Agreement including, but not limited to, as-built drawings of the Facility,
record books, vendor manuals and operations and maintenance manuals.

3.07 Payments. Owner shall make payments to Operator in accordance with Articles
IV, V, and VI of this Agreement.

3.08  Other. Owner will:

          (a)  Provide and pay for all natural gas, fuel oil, chemicals required
               throughout the term of this Agreement.

          (b)  Pay all property or other taxes related to the Facility or its
               activities but not income or employment related taxes of the
               Operator or its employees.

          (c)  Provide all necessary documents that Operator needs to perform
               its obligations relating to the operation and maintenance of
               equipment contained in the Facility under this Agreement. Owner
               and Operator shall consult with each other to determine the
               obligations under such documents for which the Operator is
               responsible.

3.09 Owner shall, at all times, conform to all laws, ordinances, rules and
regulations applicable to it.

                                   SECTION IV

                                  COMPENSATION

4.01  Operator shall be compensated by Owner as follows:

          (a)  A fixed price of $140,000 per month, as adjusted by the
               provisions of Section V, for all services to be provided by
               Operator pursuant to this Agreement except as otherwise provided
               for in this Agreement. Said

                                       14
<PAGE>
               monthly payment shall be adjusted annually commencing on the
               first day of each year subsequent to January 1, 2000, by the
               change in index values of the (i) immediately preceding month of
               December and (ii) the prior month of December, as specified in
               the Consumer Price Index for All Urban Consumers, U.S. City
               Average, Table 1, in the row titled "Services" under the column
               heading "Unadjusted percent change to..." as published in the CPI
               Detailed Report for the immediately preceding December; plus

          (b)  All Reimbursable Costs properly incurred pursuant to this
               Agreement.

4.02 Operator Procurement to Owner's Account. Operator may procure those items
and services which are considered Reimbursable Costs and are included in the
Approved Budget by issuing purchase orders to be paid directly by Owner on
Owner's purchasing and requisition forms. Operator shall supply a confirming
copy of the purchase order to Owner. For purchase orders in excess of $10,000 or
for any items not in the Approved Budget, Operator is required to receive
written authorization from Owner prior to issuing purchase orders to be paid
directly by Owner on Owner's purchasing and requisition forms.

                                    SECTION V

                            CONTRACT PRICE ADJUSTMENT

5.01 Equivalent Availability Factor Contract Price Adjustment. Operator's fixed
fee described in Section 4.01(a) of this Agreement shall be adjusted each month
as follows based on the Facility's monthly Equivalent Availability Factor (EAF):

          (a)  If the EAF is greater than or equal to 92%, Operator's fixed fee
               described in Section 4.01(a) shall be increased by:
               (EAF-.92)*$100,000

          (b)  If the EAF is greater than 88% but less than or equal to 92%,
               Operator's fixed fee described in Section 4.01(a) shall not be
               adjusted.

          (c)  If the EAF is less than 88%, Operator's fixed fee described in
               Section 4.01(a) shall be decreased by:
               (.88-EAF) * $50,000

          Under no circumstances shall the monthly increase or decrease in the
          Operator's fixed fee pursuant to the paragraphs (a) or (c) above
          exceed $6,000 per month.

          The Equivalent Availability Factor calculation is defined in Exhibit N
          of the Power Agreement and for reference in Exhibit E attached.

5.02 Capacity Performance Contract Price Adjustment. Operator's fees under this
          Agreement shall be adjusted each month based on the Dependable
          Capacity test conducted for Winter and Summer Period as follows:

                                       15
<PAGE>
          (a)  If the plant's Dependable Capacity, as determined by the Utility,
               is set at the lesser of 230 MW or the Dependable Capacity set at
               the Commercial Operation Date for the applicable Summer or Winter
               Period without a Dependable Capacity test being performed the
               Operator's fixed fee described in Section 4.01(a) will be
               increased by $2,000 per month for the applicable Summer Period or
               Winter Period and the following three months as a contract price
               adjustment.

          (b)  If the plant's Dependable Capacity, as determined by the Utility
               during the Dependable Capacity test for the applicable Summer
               Period or Winter Period, is equal to or above the lesser of 230
               MW or the Dependable Capacity set by the Utility at the
               Commercial Operation Date, then the Operator's fixed fee in
               Section 4.01(a), will be increased by $2,000 per month for the
               applicable Summer or Winter Period and the following three months
               as a contract adjustment.

          (c)  If the plant's Dependable Capacity, as determined by the Utility
               during the Dependable Capacity test for the applicable Summer
               Period or Winter Period, is lower than the lesser 230MW or the
               Dependable Capacity set by the Utility at the Commercial
               Operation Date, then the Operator's fixed fee in Section 4.01
               (a), will be decreased by $2,000 per month for the applicable
               Summer or Winter Period as a contract adjustment.

5.03 Safety Performance Contract Price Adjustment. Operator's fees under this
          agreement will be adjusted quarterly in the months of March, June,
          September, and December (maximum of four-(4) payments of $1,000 each)
          based on the Plant safety as follows:

          (a)  For employee on-the-job performance resulting in no lost time
               during the quarter, Operator's fee of Section 4 will be increased
               during the appropriate month described above will be increased by
               $1,000 as a contract price adjustment. This adjustment in some
               mutually agreed to manner will be distributed to the crew members
               (approximately $50 per employee) on a quarterly basis in the form
               of a Safety incentive.

          (b)  For employee on-the-job performance resulting in any lost time
               during the quarter, the Operator's fees of Section 4 will be
               decreased during the appropriate month described above by $1,000
               as a contract price adjustment.

                                       16
<PAGE>
                                   SECTION VI

                                     PAYMENT

6.01 Payment of Monthly Compensation. The payment required by Sections 4.01 and
4.02 above will be made on a calendar month basis. Operator shall submit its
invoices on or before the fifteenth (15th) day of the month following the month
during which services were provided or Reimbursable Costs were incurred. Owner
shall pay the amount due to Operator on or before the thirtieth (30th) day
following the date the invoice is received by Owner. Operator shall submit its
billing together with copies of supporting invoices, vouchers, receipts, and
such other evidence of payment as Owner shall require.

6.02 Payment Of Termination Payment. Owner shall pay the amount due pursuant to
Section 8.01 to Operator on or before the thirtieth (30th) day following the
date the invoice for such amount is received by Owner.

6.03 Payment Disputes. In the event of a dispute or question regarding any
invoice submitted by Operator, (i) all amounts not disputed or in question shall
be promptly paid as and when required by Section 6.01 above, (ii) an explanation
of the dispute shall be promptly transmitted by Owner to Operator, (iii) Owner
and Operator shall immediately seek to resolve the dispute or question, and (iv)
payment shall be made within ten (10) days of any remaining amount due when the
dispute is resolved.

                                   SECTION VII

                                      TERM

7.01 Term. This Agreement shall become effective as of the date of execution of
this Agreement, and shall continue in effect thereafter until the ninth
anniversary of the Actual Commercial Operation Date unless otherwise terminated
as provided in this Agreement.

7.02 Extension of Term. Any extension of the term of this Agreement will be
effected by written agreement between the parties. All of the terms and
conditions of this Agreement which are not modified or changed in any such
written agreement shall remain in full force and effect throughout any such
extended term.

7.03 Authorization to Proceed. Obligations of Owner and Operator shall commence
on the Commencement Date.

7.04 Actual Commercial Operation Date. Commercial Operation Date occurred on
October 31, 1996.

                                       17
<PAGE>
                                  SECTION VIII

                                   TERMINATION

8.01 Termination By Owner Without Cause. Owner shall have the right to terminate
this Agreement upon any termination of the Power Agreement. Upon termination
pursuant to this Section VIII, Owner shall pay Operator:

          (a)  all outstanding costs pursuant to Section 4.02 hereof,

          (b)  reasonable costs that may be incurred by Operator in support of
               the termination of this Agreement, and

          (c)  reasonable severance costs resulting from the termination of
               employment of Operator's employees.

Lender shall have the right to terminate this Agreement for convenience should
it declare an event of default under any financing documents and Owner shall
have the right to terminate this Agreement for convenience should the Facility
be sold to a third party who intends to operate the Facility. In the event Owner
effectuates such a termination of convenience after the Actual Commercial
Operation Date, Owner shall pay Operator, in addition to the costs identified in
(a), (b) and (c) above, the Termination Payment pursuant to the following
schedule:

          (d)  If the Agreement is terminated prior to or within 12 months
               following Authorization to Proceed, $7,500 per month for each
               month otherwise remaining in the term of the Agreement.

          (e)  If the Agreement is terminated after 12 months but prior to 24
               months following the Authorization to Proceed, $6,000 per month
               for each month otherwise remaining in the term of the Agreement.

          (f)  If the Agreement is terminated after 24 months but prior to 36
               months following the Authorization to Proceed, $5,000 per month
               for each month otherwise remaining in the term of the Agreement.

Neither party may otherwise terminate this Agreement except as otherwise
provided in this Section VIII.

8.02 Termination By Owner for Cause. Owner or Lender may terminate this
Agreement upon written notice to Operator as provided for in Section 8.05 upon
the occurrence of any of the following:

          (a)  Operator's failure to provide adequate qualified personnel to
               perform its obligations under the Agreement.

                                       18
<PAGE>
          (b)  Failure of the Operator to perform in any material respect any
               service or obligation to be performed by it hereunder or if any
               representation or warranty shall prove to be incorrect in any
               material respect.

          (c)  The appointment of a receiver, liquidator or trustee for Operator
               by a court of competent jurisdiction or an adjudication of
               bankruptcy or insolvency by any such court or the filing by
               Operator of a petition seeking an adjudication of bankruptcy or
               insolvency.

          (d)  Failure of the Operator to maintain an Equivalent Availability
               Factor as defined in the Power Agreement of at least 80% or
               Equivalent Forced Outage Rate less than 10% on an annual basis to
               the extent such failure was due to causes within Operator's
               control. Following Owner's directions pursuant to Section 2.03
               shall not be construed as an occurrence of failure under this
               paragraph.

          (e)  Continuance of a Force Majeure by Operator for more time than
               that allowed in Section 13.01.

          (f)  Failure of Owner and Operator to reach agreement by renegotiation
               provided by Section XIV.

          (g)  Failure of the Facility to produce adequate thermal or electrical
               energy to enable Owner to meets its obligations to its customers
               to the extent such failure was within Operator's control.

          (h)  Failure to maintain the Facility's QF status due to negligent
               acts or omissions of Operator.

8.03 Termination By Operator For Cause. Operator may terminate this Agreement
upon written notice to Owner as provided for in Section 8.05 upon the occurrence
of any of the following:

          (a)  Failure to pay undisputed amounts due to Operator under this
               Agreement in accordance with Section VI.

          (b)  Failure of Owner to approve, and pay for tools, parts, equipment,
               or Consumables required by Operator to perform its obligations
               under this Agreement.

          (c)  Failure of Owner to perform in any material respect any service
               or obligation to be supplied or performed by it or if any
               representation or warranty shall prove to be incorrect in any
               material respect.

                                       19
<PAGE>
          (d)  Failure of Owner and Operator to reach agreement by renegotiation
               provided by Section XIV.

          (e)  Continuance of a Force Majeure by Owner for more time than that
               allowed in Section 13.01.

8.04 Termination Under Section 8.01. In the event Owner gives a written
termination notice pursuant to the provision of Section 8.01, this Agreement
shall terminate as of the date specified in such notice which shall be no
earlier than fifteen (15) days after the date the notice is given.

8.05 Termination Under Section 8.02 and 8.03. In the event a written termination
notice is given pursuant to Sections 8.02(a), 8.02(b), 8.03(b) or 8.03(c), such
notice shall set forth the circumstances providing the basis for such notice and
the Party which receives such notice shall have thirty (30) days to remedy such
condition. In the event such circumstance is not corrected by the Party
receiving such notice, or the Party receiving such notice has not taken
substantive action acceptable to the other Party in its sole discretion to
correct the circumstances by the end of such thirty (30) day period, this
Agreement shall terminate.

8.06 Termination Procedure. Operator shall, in the event of termination, take
all reasonable steps necessary to assure an orderly transfer of operation and
maintenance responsibility to Owner or to Owner's designee including, without
limitation, the delivery of all of the following to Owner or to any such
designee:

          (a)  All operation, maintenance or other records, manuals and
               procedures associated with the Facility.

          (b)  All tools, Consumables, spare parts and equipment associated with
               the Facility.

          (c)  At the option of Owner or such designee, assignments to Owner or
               such designee, in form reasonably satisfactory to Owner or such
               designee, of any agreements between Operator and third parties
               relating to the performance of the obligations of Operator under
               this Agreement.

8.07 Owner Cure of Operator's Default. In the event of a default by Operator in
its obligations hereunder, Owner may after the applicable cure period (but shall
not be required to) cure such default and may charge Operator any additional
incremental costs incurred by Owner to cure such default. The exercise by Owner
of this right shall not waive any other rights of Owner hereunder or at law.

8.08 Rights and Remedies in Law or Equity. In the case of a material breach by
either Party of its representations, warranties or obligations hereunder, in
addition to, or in lieu of, the right to terminate this Agreement pursuant to
Section 8.02 and 8.03 hereof, each Party shall have all other rights and
remedies provided for in law or equity.

                                       20
<PAGE>
                                   SECTION IX

                          INSURANCE AND INDEMNIFICATION

9.01 Insurance. Without limiting any of the obligations or liabilities of the
Operator, Operator shall at all times throughout the term of this Agreement and
any renewal thereof, carry and maintain, or cause to be maintained, at its own
expense, insurance with at least the minimum insurance coverage set forth below
and such other additional insurance as may reasonably be required from time to
time by the Owner. All insurance carried and maintained pursuant to this
Agreement shall be with insurers, and shall be in such form as shall be
satisfactory to the Lender.

          (a)  Operator shall carry and maintain or cause to be maintained
               commercial or comprehensive general liability insurance written
               on an occurrence basis and with a combined single limit of not
               less than $ 1,000,000 each accident and in the annual aggregate.
               Such insurance shall include premises/operations, explosions,
               collapse and underground hazards, broad form contractual,
               products/completed operations, independent contractors, broad
               form property damage and bodily injury coverages.

          (b)  Operator shall carry and maintain or cause to be maintained
               worker's compensation insurance written in accordance with
               statutory limits and employers' liability coverage in an amount
               not less than $1,000,000 per occurrence in the annual aggregate.
               The employers' liability coverage shall not contain occupational
               disease exclusion. Such policy or policies shall contain an all
               states endorsement or stop gap endorsement.

          (c)  Operator shall carry and maintain or cause to be maintained
               comprehensive automobile liability insurance covering all owned,
               non-owned and hired vehicles. Such coverage shall be written in
               an amount not less than $1,000,000 per occurrence in the annual
               aggregate.

          (d)  Operator shall carry and maintain or cause to be maintained
               excess (or umbrella) liability insurance written on an occurrence
               basis and providing coverage for a limit of not less than
               $14,000,000 per occurrence annual aggregate in excess of the
               insurance as required in item (a), item (b) with respect to
               employers' liability only and item (c) herein.

          (e)  Operators' subcontractors, if any, shall carry and maintain or
               cause to be maintained commercial or comprehensive general
               liability insurance as described in item (a) above and workers'
               compensation and employers' liability insurance as described in
               item (b) above and comprehensive automobile liability insurance
               as described in item (c) above.

                                       21
<PAGE>
          (f)  All deductibles or self-insured retentions shall be the sole
               responsibility of the Operator.

          (g)  Any insurance carried and maintained in accordance with this
               Agreement shall be endorsed to provide that:

               (i)  the interest of the Owner and Lender shall not be
                    invalidated by any action or inaction of the Operator or any
                    other person and all policies shall insure the Owner and
                    Lender regardless of any breach or violation by the Operator
                    or any other Person of any warranties, declarations, or
                    conditions in such policies;

               (ii) the insurer thereunder waives all rights of subrogation
                    against the Owner, Lender, and Utility, any right of setoff
                    and counterclaim and any other right to deduction due to
                    outstanding premium, whether by attachment or otherwise;

               (iii) Such insurance shall be primary without right of
                    contribution of any other insurance carried by or on behalf
                    of the Owner and Lender with respect to their interests as
                    such in the Facility;

               (iv) Inasmuch as such policies are written to cover more than one
                    insured, all terms, conditions, insuring agreements and
                    endorsements (other than the limits of liability) shall
                    operate in the same manner as if there were a separate
                    policy covering each insured;

               (v)  If such insurance is canceled for any reason whatsoever,
                    including nonpayment of premium, or any substantial change
                    is made in the coverage that affects the interests of the
                    Owner, Lender, and Customers, such cancellation or change
                    shall not be effective as to the Owner and Lender until
                    sixty (60) days after receipt by the Owner and Lender of
                    written notice sent by registered mail from such insurer of
                    such cancellation or change; provided, however, that such
                    sixty (60) day period shall be reduced to ten (10) days in
                    the case where cancellation results from the nonpayment of
                    premiums; and

          (h)  On or before the execution of this Agreement and annually
               thereafter, Operator shall arrange for furnishing Owner and
               Lender with approved certification of all required insurance.
               Such certification shall be executed by each insurer or by an
               authorized representative of each insurer. Such certification or
               notice, as the case may be, shall identify insurers, the type of
               insurance, the insurance limits and the policy term and shall
               specifically list

                                       22
<PAGE>
               the special endorsements in (g) above. Operator will furnish
               Owner and Lender with copies of all insurance policies, binders,
               and cover notes or other evidence of such insurance relating to
               the Facility in the event of a claim.

          (i)  Concurrently with the furnishing of the certification referred to
               in item (h) above, Operator will furnish Owner and Lender with a
               report of each insurer or insurance broker stating that all
               premiums then due from the Operator have been paid and that in
               the opinion of such insurer or insurance broker, the insurance
               then carried and maintained with respect to the Facility is in
               accordance with the terms of this Agreement. Furthermore,
               Operator will cause an insurer or insurance broker to advise
               Owner and Lender promptly in writing of any default in the
               payment of any premiums or any other act or omission on the part
               of the Operator or any other person of which such broker has
               actual knowledge which might invalidate or render unenforceable,
               in whole or in part, any insurance provided hereunder. Owner
               and/or Lender may, at their sole option, obtain such insurance if
               not obtained by the Operator and, in such event, Operator shall
               reimburse Owner and/or Lender upon demand for the cost thereof.

          (j)  The Owner shall maintain or cause to be maintained All Risk
               Property and Boiler and Machinery insurance, covering physical
               loss or damage to the cogeneration facility, including, but not
               limited to, fire and extended coverage, collapse, flood,
               earthquake, and comprehensive boiler & machinery including
               electrical and mechanical breakdown. Such coverage shall be
               written on a replacement cost basis, however sublimits of not
               less than $75,000,000 are acceptable for loss or damage due to
               flood or earthquake.

          (k)  The Owner, its insurer, and the Operator agree to waive all
               rights of subrogation against each other for damages caused by
               fire and or other perils to the extent covered by the all risk
               property and boiler & machinery insurance identified in (j)
               above.

9.02  Indemnification.

          (a)  Operator agrees to defend and indemnify the Owner and Lenders and
               their respective directors, officers and employees (collectively
               "Indemnitee") against, and to hold them harmless from any and all
               claims, suits, liabilities and legal expenses (collectively
               "Claims") resulting from or in connection with Operator's
               performance, negligent performance, or non-performance of its
               obligations hereunder except where such Claims were caused by the
               sole negligence or willful misconduct of an Indemnitee, provided
               that Operator shall be promptly notified in writing of such claim
               or suit brought

                                       23
<PAGE>
               against such Indemnitee and shall be permitted to participate in
               the defense thereof.

          (b)  Owner agrees to defend and indemnify Operator and its directors,
               officers and employees (collectively "Operator Indemnitee")
               against, and to hold them harmless from any and all Claims,
               resulting from or in connection with Owner's performance,
               negligent performance, or non-performance of its obligations
               hereunder, except where, such claims were caused by the sole
               negligence or willful misconduct of the Operator Indemnitee,
               provided that the same notification to, and opportunity to
               participate, specified in Section 9.02(a) above is afforded to
               Owner.

9.03 Additional Insured. Lender shall be named as an additional insured under
the foregoing policies of insurance.

9.04 Damage Limitation. Neither Operator nor Owner shall have liability to the
other party hereunder for indirect, incidental or consequential damages,
including, without limitation, loss of revenues.

                                    SECTION X

                              PERMITS AND LICENSES

10.01 Owner Permits and Licenses. Owner shall be responsible for obtaining and
maintaining all permits and licenses, required to be in the name of Owner,
necessary for the operation and maintenance of the Facility. Operator shall
cooperate with Owner in obtaining and maintaining such permits and licenses and
in preparing reports required thereunder.

10.02 Operator Permits and Licenses. Operator shall be responsible for obtaining
and maintaining all permits and licenses required to be in the name of Operator.

                                   SECTION XI

                             INDEPENDENT CONTRACTOR

At all times, Operator shall perform the requirements of this Agreement as an
independent contractor to the Owner. Operator shall have full responsibility for
the control and direction of its employees, servants and agents. Operator shall
be fully and solely responsible for the payment of such employees, servants and
agents and for the payment of all obligations incurred by Operator in performing
the requirements of this Agreement. This Agreement is not intended to and shall
not create a partnership of any kind or type. Except for as provided in Section
4.02, Operator shall not be an agent for and may not bind Owner. Owner shall not
be an agent for and may not bind Operator.

                                       24
<PAGE>
                                   SECTION XII

                             COORDINATION AND ACCESS

12.01 Access. Owner shall provide Operator and its employees, agents, and
sub-contractors with full and free access to the Facility at all times to
perform its obligations under this Agreement. Operator shall furnish Owner with
a list of employees engaged in operation and maintenance of the Facility and
shall inform Owner in writing of all changes thereto. Operator, its employees,
agents and subcontractors shall comply with all safety and other requirements
established by Owner in connection with such access.

12.02 Coordination; Required Level of Performance. Operator's personnel will
interface with Owner's Representative and with appropriate representatives of
Utility. Operator shall accept daily instructions from the Utility and Owner as
to projected requirements, subject to the design limits of the Facility. In the
event of any interruption of the operation of the Facility or in the event
Operator is unable to operate the Facility so as to meet the requirements of
Utility, and Owner, Operator shall immediately notify Owner of the circumstance
and shall exert its best efforts to restore the Facility to its required
operating level.

12.03 Intellectual Property Owner acknowledges that in the course of Operator
performing its obligations under the Agreement, Operator may provide to Owner
access to certain copyright material and other proprietary intellectual property
which is either owned or licensed by Operator (collectively the "Operator
Intellectual Property"). Owner agrees that it shall not obtain any ownership or
other rights in or with respect to the Operator Intellectual Property except as
expressly agreed by Operator, provided, however, that Operator hereby grants to
Owner and its assigns an irrevocable royalty-free license to use any such
Operator Intellectual Property for purposes of operating and maintaining the
Facility. Owner will, if requested by Operator, execute such license and other
documentation as Operator may reasonably request in order to protect Operator's
rights with respect to the Operator Intellectual Property.

                                       25
<PAGE>
                                  SECTION XIII

                                  FORCE MAJEURE

13.01 Force Majeure. Neither Party shall be responsible or liable for or
subjected to a termination of this Agreement for or deemed in breach of this
Agreement as a result of any deficiency in the performance of its obligations
hereunder to the extent that such deficiency is due to circumstances beyond its
reasonable control including, without limitation, deficiencies attributable to
acts of God; unusually severe weather conditions; any labor difficulty not
involving employees of any parties hereto, any labor difficulty involving
employees of parties hereto to the extent such employees are members of a labor
union and such labor difficulty is in violation of a labor contract or in
violation of applicable laws; any labor difficulty involving employees of
parties hereto, not caused by the act or the failure to act on the part of the
relevant party hereto, to the extent such employees are in the process of
becoming members of a labor union; war; inability to obtain fuel for the
Facility; riots; requirements, actions or failures to act on the part of
governmental authorities preventing performance; changes in law, inability
despite due diligence to obtain required licenses; accident; fire; damage to or
breakdown of necessary facilities; or transportation delays or accidents (such
causes hereinafter called "Force Majeure"); provided that:

          (a)  The non-performing party shall give the other party prompt
               written notice after the discovery of the Force Majeure
               describing the particulars of the occurrence; and

          (b)  The suspension of performance is of no greater scope and of no
               longer duration than is required by the Force Majeure but under
               no circumstances shall the Force Majeure exceed one hundred and
               eighty (180) days; however, if such Force Majeure is declared by
               Operator and results in either (i) the inability of the Facility
               to furnish Dependable Capacity to the Customers, or (ii) the
               inability of the Facility to maintain its QF status, in each
               case, then the Force Majeure shall not exceed thirty (30) days;
               and

          (c)  The party with a deficiency in its performance uses its best
               efforts to remedy such deficiency and

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

          (e)  The Force Majeure shall not excuse failure to apply money
               obligations nor shall it excuse any deficiency in performance to
               the extent caused by any negligent or intentional act, error, or
               omission, or failure to comply with any law, rule, regulation,
               order or ordinance.

13.02 Extension of Agreement by Force Majeure. Except as otherwise provided, in
no event will any condition of Force Majeure extend this Agreement beyond its
stated Term.

                                       26
<PAGE>
                                   SECTION XIV

                                  RENEGOTIATION

14.01 Operator's Monthly Fee. In the event that Owner's actions make
substantive, material and adverse changes to the configuration or operational
ability of the Facility which have the demonstrable effect of increasing
Operator's direct on-site labor, overhead, payroll and other related costs,
Operator may request a retrospective and/or prospective renegotiation of the
monthly fees in Section 4.01. Operator's request must be in writing and must be
accompanied by all necessary supporting documentation. The Owner and Operator
will negotiate in good faith to resolve any such request.

14.02 Resolution. Owner and Operator will attempt to resolve said request by
negotiation or they may resort to Arbitration. In the event of Arbitration, the
issue presented to the arbitrator shall be the amount, if any, by which
Operator's direct on-site labor, overhead and payroll-related costs, determined
in accordance with generally accepted accounting principles (excluding those
paid on a cost reimbursement basis as provided in Section 4.02 above) have
increased.

                                   SECTION XV

                OPERATOR AND OWNER REPRESENTATIONS AND WARRANTIES

15.01 Representations and Warranties of Operator. Operator represents and
warrants, as of the date hereof, as follows:

          (a)  it is a corporation duly organized, validly existing and in good
               standing under the laws of Delaware and is duly qualified to do
               business in and is in good standing in the State of Maryland;

          (b)  it has taken all necessary action to authorize the execution,
               delivery and performance of its obligations under this Agreement,
               which action has not been superseded or modified, and this
               Agreement constitutes the legal, valid and binding obligation of
               Operator, enforceable in accordance with its terms;

          (c)  the execution, delivery and performance of this Agreement do not
               violate (i) its articles of incorporation or by-laws or any
               resolution of its Board of Directors or other committees charged
               with the governance of its affairs, (ii) any contract to which it
               or, to the best of its knowledge, any of its Affiliates is a
               party or (iii) any law, rule, regulation, order, writ, judgment,
               injunction, decree or determination affecting Operator or any of
               its properties;

                                       27
<PAGE>
          (d)  it has not filed any petition for relief under the bankruptcy
               laws of the United States of America, has not made nor is making
               an assignment for the benefit of creditors, initiated nor been
               the subject of any proceeding seeking to have a receiver or
               trustee appointed to liquidate or manage its affairs, and none of
               its properties is subject to the jurisdiction of any bankruptcy
               court of the United States of America or any receivership
               proceeding;

          (e)  no litigation is pending or, to its knowledge, threatened which
               seeks to restrain it from performing its obligations hereunder or
               the adverse outcome of which would materially affect its business
               or its ability to perform its obligations hereunder;

          (f)  no authorization or approval or other action by, and notice to or
               filing with, any government agency or regulatory body is required
               for the due execution, delivery and performance by Operator of
               this Agreement which have not been obtained;

          (g)  it or one of its Affiliates is experienced in the operation,
               maintenance and repair of electrical generating facilities, has
               complied with the provisions of all applicable laws, including,
               without limitation, environmental laws, respecting the operation
               of such facilities and has not been and is not currently subject
               to any judgment or settlement of any claim imposing significant
               liability on it for noncompliance with law or mismanagement in
               its operation of any electric power generating facility;

          (h)  it is familiar with the terms of the customer sales agreements
               that affect or relate to the operation of the Facility.

15.02 Representations and Warranties of Owner. Owner represents warrants, as of
the date hereof, as follows:

          (a)  it is a partnership duly organized, validly existing and in good
               standing under the laws of the State of Delaware.

          (b)  it has taken all necessary action to authorize the execution,
               delivery and performance of its obligations under this Agreement,
               which action has not been superseded or modified, and this
               Agreement represents the valid and binding obligation of Owner,
               enforceable in accordance with its terms;

          (c)  the execution, delivery and performance of this Agreement do not
               violate (i) its articles of incorporation or by-laws or any
               resolution of its Board of Directors or other committees charged
               with the governance of its affairs, (ii) any contract to which it
               is a party or (iii) any law, rule, regulation, order,

                                       28
<PAGE>
               writ, judgment, injunction, decree or determination affecting
               Owner or any of its properties;

          (d)  it has not filed any petition for relief under the bankruptcy
               laws of the United States of America, has not made nor is making
               an assignment for the benefit of creditors, has not initiated nor
               been the subject of any proceeding seeking to have a receiver or
               trustee appointed to liquidate or manage its affairs, and none of
               its properties is subject to the jurisdiction of any bankruptcy
               court of the United States of America or any receivership
               proceeding; and

          (e)  no litigation is pending or, to its knowledge, threatened which
               seeks to restrain the performance of its obligations hereunder or
               the adverse outcome of which could materially affect its business
               or its ability to perform its obligations hereunder; and

          (f)  no authorization or approval or other action by, and notice to or
               filing with, any government agency or regulatory body is required
               for the due execution, delivery and performance by Operator of
               this Agreement which have not been obtained.

                                   SECTION XVI

                                     NOTICES

     All notices, approvals, consents, requests and other communications
hereunder shall be in writing and shall be deemed to have been given when
delivered to the other Party by registered, certified, or express mail, return
receipt requested, postage prepaid, or by telecopy, addressed as follows:

                        If to Operator:

                        Panda Global Services, Inc.
                        4100 Spring Valley Road, Suite 1001
                        Dallas, Texas 75244

                        ATTN: Vice President of Operations

                                       29
<PAGE>
                        If to Owner:
                        Panda-Brandywine, L.P.
                        4100 Spring Valley Road, Suite 1001
                        Dallas, Texas 75244
                        ATTN: President

      Either Party may change or augment their above address by written notice
given as provided herein.

                                  SECTION XVII

                                 APPLICABLE LAW

     This Agreement shall be deemed to have been made in Dallas, Texas and to be
performed in the state of Maryland. It shall be construed in accordance with the
laws of the state of Maryland.

                                  SECTION XVIII

                                   NON-WAIVER

     The failure of Owner or of Operator to enforce any of the terms and
conditions or to exercise any right or privilege under this Agreement shall not
be construed as waiving any such term or condition or right or privilege and the
same shall continue and remain in force and effect as if no such failure to
enforce or exercise has occurred. No waiver shall be valid unless so stated in
writing.

                                   SECTION XIX

                                      TITLE

     Title to all tools, equipment, supplies and parts purchased by Operator for
which Operator is directly reimbursed and of all reports, record logs and
documentation prepared by Operator pursuant to this Agreement shall pass
directly upon payment by Owner. Said tools, equipment, supplies and parts shall
be and become the property of Owner free of all liens and encumbrances except as
provided for in Section 2.14.

                                       30
<PAGE>
                                   SECTION XX

                                   ASSIGNMENT

20.01 Assignment. Neither Operator nor Owner shall assign this Agreement or any
portion hereof, or any of the rights or obligations hereunder, whether by
operation of law or otherwise, without the prior written consent of the other
Party. This Agreement and any such assignment shall inure to the benefit of, and
be binding upon, the successors and permitted assigns of the Parties.

20.02 Owner shall be entitled to assign this Agreement and its rights herein
without the consent of Operator to any of Owner's Affiliates that has a direct
or indirect interest in the Plant. In addition, Operator hereby consents to the
granting of a security interest in and an assignment by Owner of the Customer's
rights and obligations under this Agreement and its rights herein to the Lenders
and their successors, assigns and designees in connection with any financing or
refinancing related to the development, construction, operation and maintenance
of the Plant. In furtherance of the foregoing, Operator acknowledges that the
Lenders may under certain circumstances assume the interests and rights of Owner
under this Agreement.

20.03 Operator acknowledges that the Lenders may under certain circumstances
foreclose upon and sell, or cause Owner to sell or lease the Plant and cause any
new lessee or purchaser of the Plant to assume all of the interests, rights and
obligations of Owner arising under this Agreement. In such event, Operator
agrees to the assignment by Owner and the Lenders of this Agreement and its
rights herein to such purchaser or lessee and shall release Owner and the
Lenders from all obligations hereunder upon any such assignment.

                                   SECTION XXI

                                     LENDERS

21.01 Lenders. Operator acknowledges that Owner has borrowed certain funds from
the Lenders for the construction of the Plant and that, as a condition to making
loans to Owner, the Lenders may from time to time require certain documents from
Operator and its Subcontractors and Vendors. In connection therewith, Operator
agrees to furnish to the Lenders, and to use its best efforts to cause its
Subcontractors and Vendors to furnish to the Lenders, such written information,
certificates, copies of invoices and receipts, lien waivers (upon payment),
affidavits and other like documents as the Lenders may reasonably request.
Operator shall negotiate in good faith amendments to this Agreement reasonably
requested by the Lenders. In addition, Operator shall promptly execute any
additional documentation, as may be mutually agreed upon in form and substance,
that is reasonably requested by the Lenders.

21.02 Operator shall promptly execute any additional documentation as may be
mutually agreed on form and substance, and which is reasonably requested by the
Lenders, including, but not limited to, documents evidencing Operator's consent
to assignment of this Agreement as a security to the Lenders or otherwise upon
the occurrence of events specified in such documents and any reasonable
modifications to this Agreement.

                                       31
<PAGE>
21.03 Operator hereby subordinates any Liens to which it may be entitled under
Applicable Law or under the provisions of this Agreement to any Lien granted in
favor of the Lenders, whether such Lien in favor of Lenders is created, attached
or perfected prior to or after the Lien in favor of Operator. In addition,
Operator shall submit proof satisfactory to Owner that it has included in each
subcontract entered into by it with a substantial subcontractor a requirement
that any Lien to which such substantial subcontractor may be entitled to
thereunder or by Applicable Law shall be subordinate and inferior to any Lien
granted in favor of the Lenders, whether such Lien in favor of Lenders is
created, attached or perfected prior to or after the Lien in favor of such
substantial subcontractor.

21.04 In the event of Owner's default under this Agreement, the Lenders shall
have the right to cure Owner's default and, in such event, Operator's duties and
obligations under this Agreement shall be unaffected. In that regard, the
Lenders shall have (i) sixty (60) days from the date notice of default is
delivered to the Lenders to cure such default if such default is the failure to
pay amounts to Operator which are due and payable under the Contract or (ii)
such other period to cure such default if the breach or default cannot be cured
by the payment of money to Operator so long as the Lenders or their designee
shall have commenced to cure the default and thereafter diligently pursue such
cure to completion and continue to perform any monetary obligations under the
contract and all other obligations under the contract are performed by Owner or
the Lenders. If possession of the Project is necessary to cure such breach or
default, and the Lenders declare Owner in default and commence foreclosure
proceeding s, the Lenders will be allowed a reasonable period to complete such
proceedings. If the Lenders are prohibited by any court order or proceedings
from curing the default or from commencing or prosecuting foreclosure
proceedings, the foregoing time periods shall be extended by the period of such
prohibition. Operator further agrees to perform its obligations hereunder for
the benefit of the Lenders in the event of Owner's default under this Agreement
or under the Financing Documents, provided that the Lenders (or its assignee)
shall have cured all defaults of Owner's obligations hereunder and shall have
paid all amounts then due, including costs to cure. In such event, the Lenders
(or its assignee) shall have the rights and obligations of Owner under this
Agreement, provided the Lenders shall have no personal liability to Operator for
the performance of such obligations, and the sole recourse of Operator in
seeking the enforcement of such obligations shall be to such parties' interest
in the Project.

          Owner and Operator agree that the Lenders are intended to be a third
party beneficiary of this Agreement. In that regard, Owner and Operator will
not, without the prior written consent of the Lenders, amend or modify this
Agreement in any respect.

                                       32
<PAGE>
                                  SECTION XXII

                                  MISCELLANEOUS

22.01 Amendments. All amendments to this Agreement must be written and must be
signed by both parties hereto.

22.02 Invalidity. If any provision of this Agreement shall be found to be
invalid by any court of competent jurisdiction, such finding shall not
invalidate any other provision hereof.

22.03 Successors & Assigns. This Agreement shall inure to the benefit of and
shall be binding upon the parties hereto and upon their respective successors
and assigns.

22.04 Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties as to the subject matter of this Agreement and
merges and supersedes all prior agreements, commitments, representations, and
discussion between the Parties pertaining to the subject matter of this
Agreement.

22.05 Third Party Beneficiaries. Excluding rights of the Lenders to the
Facility, this Agreement is not intended to create any third party beneficiary
or rights.

22.06 Counterparts. This Agreement may be executed in more than one counterpart,
each of which shall be deemed to be an original but all of which taken together
shall be deemed a single instrument.

     Executed on the first day above written.

                             PANDA-BRANDYWINE, L.P.
                             By:  Panda Brandywine Corporation, General Partner

                             By: _______________________________________
                             Name: /s/ Darol Lindloff
                             Title:    President

                             PANDA GLOBAL SERVICES, INC.

                             By: ______________________________________
                             Name: /s/  Don Thorpe
                             Title:     Vice President - Plant Operations

                                       33
<PAGE>
                                    EXHIBIT B

                         Operator's Name Site Personnel

Operator will provide the site management, supervisory, and hourly personnel
required for the ongoing operations and maintenance requirements of the Facility
as identified on the attached organization chart. Descriptions of the positions
identified on the chart are provided in the following paragraphs.

Position Descriptions

     I.   General Manager

          The General Manager is responsible for all aspects of asset and
          business management of the Facility and administers the obligations of
          the Owner under this agreement.

          1.   Manages the Facility Annual Budget.

          2.   Manages the Facility O& M Contract, PPA, Fuel Contracts, and
               Thermal Contract from a business perspective.

          3.   Manage the Facilities Finances

          4.   Manage Administration Functions - hiring, supervising, training,
               and compensation of  personnel.

          5.   Perform as the Facility Point of Contact

          6.   Support Panda Corporate Projects as assigned

II.  Plant Manager

     The Plant Manager shall have full local responsibility for the ongoing
     operations and maintenance requirements of the Facility as defined by this
     Agreement. Specific duties shall include:

     1.   Coordination of all O&M activities with Utility management and
          dispatch personnel.

     2.   On-site administration of the applicable agreements between Owner and
          the Utility, and Customers.

     3.   Development and administration of contracts with service providers.

                                       1
<PAGE>
     4.   Manage Operations and Maintenance

     5.   Scheduling operating personnel.

     6.   Providing immediate response to operational problems.

     7.   Identifying plant improvement projects.

     8.   Performing other activities necessary for the operation at the
          Facility.

     9.   The Plant Manager shall have at least ten (10) years of industry or
          related experience in the management, operation and maintenance of
          thermal electrical generating facilities, including gas-fired thermal
          electric generating facilities.

III. Maintenance Manager

     The Maintenance Supervisor shall be responsible for scheduled and
     unscheduled maintenance of the Facility. Specific duties shall include:

     1.   Scheduling maintenance personnel.

     2.   Planning and directing maintenance activities.

     3.   Training and developing maintenance personnel.

     4.   Executing maintenance instructions as defined by Plant Manager.

     5.   Providing immediate maintenance support for operational problems.

     6.   Identifying plant improvement projects.

     7.   Developing and administering a maintenance management system.

     8.   Developing and administering plant safety programs.

     9.   Developing and administrating plant QA programs.

     10.  Performing other activities required for Facility maintenance.

IV.  Shift Supervisor and Auxiliary Operator:

     These individuals are responsible for normal physical operations of the
     Facility. Specific duties shall include:

                                       2
<PAGE>
     1.   Starting up and shutting down plant equipment; operating all systems
          on an ongoing basis.

     2.   Taking periodic readings; identifying and responding to deviations.

     3.   Diagnosing and responding to operational upsets.

     Shift Supervisor and Auxiliary Operator selection shall be based on:

     1.   Previous industry or military experience in related fields.

     2.   Education and training.

     3.   Oral and written communication skills.

VI.  Instrumentation and Control Technician

     Specific duties shall include:

     1.   Operating and maintaining the instrumentation repair and test shop.

     2.   Troubleshooting and correcting system problems on a 24-hour per day
          basis.

     3.   Assisting in normal power plant operations as needed, particularly
          during start up and shutdown sequences.

     4.   Working with I&C specialist (supervisory, home office, vendor reps,
          etc.) to resolve equipment or system problems.

VII.  Electrical Technician

     Specific duties shall include:

     1.   Maintaining plant electrical equipment.

     2.   Assisting in plant start up/shutdowns as required.

     3.   Troubleshooting and correcting electrical problems.

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<PAGE>
VIII.  Mechanical Technician

     Specific duties shall include:

     1.   Assisting in daily operations as required.

     2.   Assisting in plant start up/shutdowns as required.

     3.   Executing planned maintenance program.

     4.   Responding to plant upsets and making repairs as required.

     5.   Working with outside service providers when required (e.g. on jobs
          beyond in-house capabilities).

     The I&C Technician, Electrical Technician, and Mechanical Technician
     selection shall be based on:

     1.   Previous industry or military experience in related fields.

     2.   Education and training.

     3.   Oral and written communication skills.

All site personnel shall be provided with additional Facility-specific formal
training during the construction and start-up phases of the project. Such
training requirements shall be identified during the construction phase of the
project and compared with the training to be provided by the Turnkey Contractor.
Any training requirements beyond that provided by the Turnkey Contractor shall
be identified to Owner and, upon approval, arranged for and provided for by
Operator. Associated costs will be billed directly to Owner or passed through to
Owner as a Reimbursable Cost.

In the event that it becomes necessary to replace or add personnel, training and
orientation shall be identified, developed and provided by Operator on an
individual basis.

This level of manning is based on the expectation that: (1) the Facility will be
operated as a combined-cycle generating facility, (2) that it will require less
than three hundred (365) starts per year, and (3) that it is designed in such a
manner that it can be started with a crew of five (5) or less, and
operated/shutdown as a combined-cycle facility with a crew of four (4) or less.

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                                    EXHIBIT C

                               HOME OFFICE SUPPORT

The following services shall be provided by the home office and all associated
costs are included in the operation and maintenance base fee:

          Overall job management

          Annual Operations audit and report

          Engineering review of plant performance and efficiency

          Maintenance planning assistance programs

          Inventory tracking control programs

          Contract administration and interpretation assistance

          Troubleshooting support

          Site safety and hazardous materials programs

          Capital project engineering support (conceptualization, analysis, and
          recommendation)

          Problem analysis and resolution

          Warranty administration assistance

          Clerical and administrative

          Payroll

          Accounts payable

          General accounting

          Travel and living expenses of home office personnel

In the event that support services beyond the scope or intent of those
identified above are required; Operator shall identify the expanded scope and
associated costs required. Said expanded scope shall be provided upon receipt of
written authorization to proceed from the Owner's Representative.

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                                    EXHIBIT D

                  Purchased Parts, Purchased Labor and Services

Operator will provide purchased parts, other than spare parts, purchased labor
and services throughout the term of the Agreement as necessary to perform the
requirements of the Agreement. Any maintenance or repair that can reasonably be
performed by the regular full-time on-site personnel provided pursuant to
Section 2.01 of the Agreement will be perfomred by them without additional
compensation.

The following are examples of services which would not be performed by regular
full-time on-site personnel.

1.   General Purchase Order Labor (used to supplement site labor force on a
     project basis)

2.   Water System Analysis & consultants

3.   Fuel Analysis

4.   Emissions Testing (one test per source per year)

5.   Gas Turbine Maintenance, Inspection and Repairs

6.   Steam Turbine Maintenance, Inspections and Repairs

7.   Boiler Maintenance, Inspection and Repairs (HRSG)

8.   Control System Service

9.   Switchgear Service and Repairs

10.  Motor, Compressor and Pump Service and Repairs

11.  Emissions Control Service

12.  Meter Certification and Calibration

                                        1

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