Document:

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                                                                     EXHIBIT 4.2

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                               HOMER CITY OL1 LLC

               $___________ 8.137% Series A Lessor Notes due 2019

               $___________ 8.734% Series B Lessor Notes due 2026

               INDENTURE OF TRUST, OPEN-END MORTGAGE AND LEASEHOLD
                        MORTGAGE AND SECURITY AGREEMENT

                          Dated as of December __, 2001

                              THE BANK OF NEW YORK,
                            as Lease Indenture Trustee

                                       and

                              THE BANK OF NEW YORK,
                                as Security Agent

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THIS IS AN OPEN-END MORTGAGE SECURING FUTURE ADVANCES UP TO A MAXIMUM PRINCIPAL
AMOUNT OF [$____] PLUS ACCRUED INTEREST AND OTHER INDEBTEDNESS AS DESCRIBED IN
42 Pa.C.S. Section 8143

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                                TABLE OF CONTENTS
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              ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.1                DEFINITIONS............................................................13
SECTION 1.2                OTHER DEFINITIONS......................................................19
SECTION 1.3                OTHER DEFINITIONS......................................................19
SECTION 1.4                ONE CLASS OF SECURITIES................................................20

                           ARTICLE II THE LESSOR NOTES

SECTION 2.1                LIMITATION ON LESSOR NOTES.............................................20
SECTION 2.2                INITIAL LESSOR NOTES...................................................20
SECTION 2.3                EXECUTION AND AUTHENTICATION OF LESSOR NOTES...........................20
SECTION 2.4                ISSUANCE AND TERMS OF THE INITIAL LESSOR NOTES.........................21
SECTION 2.5                PAYMENTS FROM INDENTURE ESTATE ONLY; NO PERSONAL LIABILITY OF THE OWNER
                           PARTICIPANT SECURITY AGENT OR THE LEASE INDENTURE TRUSTEE..............21
SECTION 2.6                SUBSEQUENT LESSOR NOTES................................................22
SECTION 2.7                PAYMENT OF EXPENSES ON TRANSFER........................................24
SECTION 2.8                RESTRICTIONS OF TRANSFER RESULTING FROM FEDERAL SECURITIES LAWS;
                           LEGEND.................................................................25
SECTION 2.9                SECURITY FOR AND PARITY OF LESSOR NOTES................................25
SECTION 2.10               ACCEPTANCE OF THE LEASE INDENTURE TRUSTEE AND APPOINTMENT OF THE
                           SECURITY AGENT.........................................................25
SECTION 2.11               REGISTRAR AND PAYING AGENT.............................................26
SECTION 2.12               PAYING AGENT TO HOLD MONEY IN TRUST....................................26
SECTION 2.13               [RESERVED].............................................................27
SECTION 2.14               REPLACEMENT LESSOR NOTES...............................................27
SECTION 2.15               OUTSTANDING LESSOR NOTES...............................................27
SECTION 2.16               TREASURY LESSOR NOTES..................................................28
SECTION 2.17               [RESERVED].............................................................28
SECTION 2.18               CANCELLATION...........................................................28
SECTION 2.19               LEASE INDENTURE DEFAULTED INTEREST.....................................28
SECTION 2.20               [RESERVED].............................................................29
SECTION 2.21               ASSUMPTION OF LESSOR NOTES.............................................29

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                 ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM INDENTURE ESTATE

SECTION 3.1                DISTRIBUTION PRIOR TO LEASE INDENTURE EVENT OF DEFAULT.................31
SECTION 3.2                PAYMENTS FOLLOWING EVENT OF LOSS OR OTHER EARLY TERMINATION............32
SECTION 3.3                PAYMENTS AFTER LEASE INDENTURE EVENT OF DEFAULT........................33
SECTION 3.4                CERTAIN PAYMENTS.......................................................34
SECTION 3.5                OTHER PAYMENTS.........................................................35
SECTION 3.6                MANNER OF PAYMENT TO THE OWNER LESSOR..................................35
SECTION 3.7                ESTABLISHMENT OF THE NOTE ACCOUNTS; AND LIEN AND SECURITY INTEREST;
                           ETC. ..................................................................36
SECTION 3.8                THE ACCOUNT BANK; LIMITED RIGHTS OF THE OWNER LESSOR...................37
SECTION 3.9                EXERCISE OF POWERS; INSTRUCTIONS OF REQUIRED LEASE INDENTURE SECURED
                           PARTIES................................................................39
SECTION 3.10               INVESTMENT OF AMOUNTS HELD BY LEASE INDENTURE TRUSTEE..................40

                      ARTICLE IV REDEMPTION AND PREPAYMENT

SECTION 4.1                NOTICES TO LEASE INDENTURE TRUSTEE.....................................40
SECTION 4.2                SELECTION OF LESSOR NOTES TO BE REDEEMED...............................40
SECTION 4.3                NOTICE OF REDEMPTION...................................................41
SECTION 4.4                EFFECT OF NOTICE OF REDEMPTION.........................................42
SECTION 4.5                DEPOSIT OF REDEMPTION PRICE............................................42
SECTION 4.6                LESSOR NOTES REDEEMED IN PART..........................................43
SECTION 4.7                OPTIONAL REDEMPTION....................................................43
SECTION 4.8                MANDATORY REDEMPTION...................................................43

                               ARTICLE V COVENANTS

SECTION 5.1                PAYMENT OF LESSOR NOTES................................................44
SECTION 5.2                STAY, EXTENSION AND USURY LAWS.........................................45
SECTION 5.3                PAYMENTS FOR CONSENT...................................................45
SECTION 5.4                DEBT SERVICE RESERVE ACCOUNT...........................................45

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                              ARTICLE VI SUCCESSORS

SECTION 6.1                LIMITATION ON MERGER, CONSOLIDATION AND SALE OF SUBSTANTIALLY ALL
                           ASSETS.................................................................46

                           ARTICLE VII LEASE INDENTURE EVENTS OF LEASE INDENTURE DEFAULT

SECTION 7.1                LEASE INDENTURE EVENTS OF LEASE INDENTURE DEFAULT......................46
SECTION 7.2                CERTAIN RIGHTS TO CURE.................................................48
SECTION 7.3                ACCELERATION...........................................................50
SECTION 7.4                OTHER REMEDIES.........................................................51
SECTION 7.5                TAKING POSSESSION OF INDENTURE ESTATE..................................52
SECTION 7.6                WAIVER OF PAST LEASE INDENTURE DEFAULTS................................53
SECTION 7.7                CONTROL BY MAJORITY....................................................54
SECTION 7.8                [RESERVED].............................................................54
SECTION 7.9                RIGHTS OF HOLDERS OF LESSOR NOTES TO RECEIVE PAYMENT...................54
SECTION 7.10               COLLECTION SUIT BY LEASE INDENTURE TRUSTEE.............................54
SECTION 7.11               [RESERVED].............................................................55
SECTION 7.12               [RESERVED].............................................................55
SECTION 7.13               NO ACTION CONTRARY TO THE FACILITY LESSEE'S RIGHTS UNDER THE FACILITY
                           LEASE..................................................................55

                              ARTICLE VIII LEASE INDENTURE TRUSTEE AND SECURITY AGENT

SECTION 8.1                DUTIES OF LEASE INDENTURE TRUSTEE AND SECURITY AGENT...................55
SECTION 8.2                RIGHTS OF LEASE INDENTURE TRUSTEE......................................56
SECTION 8.3                INDIVIDUAL RIGHTS OF SECURITY AGENT....................................58
SECTION 8.4                LEASE INDENTURE TRUSTEE'S DISCLAIMER...................................58
SECTION 8.5                NOTICE OF LEASE INDENTURE DEFAULTS.....................................58
SECTION 8.6                GENERAL AUTHORITY OF THE SECURITY AGENT OVER THE INDENTURE ESTATE......58
SECTION 8.7                COMPENSATION...........................................................59
SECTION 8.8                REPLACEMENT OF LEASE INDENTURE TRUSTEE.................................60
SECTION 8.9                SUCCESSOR LEASE INDENTURE TRUSTEE BY MERGER, ETC.......................61
SECTION 8.10               ELIGIBILITY; DISQUALIFICATION..........................................62
SECTION 8.11               OTHER CAPACITIES.......................................................62

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                            ARTICLE IX SHARED RIGHTS

SECTION 9.1                CERTAIN RIGHTS OF OWNER LESSOR AND OWNER PARTICIPANT...................62
SECTION 9.2                NO REPRESENTATIONS OR WARRANTIES AS TO THE PROPERTY INTEREST...........65

                 ARTICLE X SUPPLEMENTS AND AMENDMENTS TO THIS LEASE INDENTURE AND OTHER DOCUMENTS

SECTION 10.1               WITHOUT CONSENT OF NOTEHOLDERS OR REQUIRED NOTEHOLDERS.................66
SECTION 10.2               WITH CONSENT OF REQUIRED NOTEHOLDERS; LIMITATIONS......................68
SECTION 10.3               DOCUMENTS FURNISHED TO NOTEHOLDERS.....................................70
SECTION 10.4               LEASE INDENTURE TRUSTEE AND SECURITY AGENT PROTECTED...................70
SECTION 10.5               REVOCATION AND EFFECT OF CONSENTS......................................70
SECTION 10.6               NOTATION ON OR EXCHANGE OF LESSOR NOTES................................71
SECTION 10.7               LEASE INDENTURE TRUSTEE TO SIGN AMENDMENTS, ETC........................71

               ARTICLE XI LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 11.1               OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE...............71
SECTION 11.2               LEGAL DEFEASANCE AND DISCHARGE.........................................72
SECTION 11.3               COVENANT DEFEASANCE....................................................72
SECTION 11.4               CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.............................73
SECTION 11.5               DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER
                           MISCELLANEOUS PROVISIONS...............................................75
SECTION 11.6               REPAYMENT TO OWNER LESSOR..............................................75
SECTION 11.7               REINSTATEMENT..........................................................76

                            ARTICLE XII MISCELLANEOUS

SECTION 12.1               TERMINATION OF INDENTURE...............................................76
SECTION 12.2               NOTICES................................................................77
SECTION 12.3               RULES BY LEASE INDENTURE TRUSTEE AND AGENTS............................79

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SECTION 12.4               NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
                           SHAREHOLDERS...........................................................79
SECTION 12.5               GOVERNING LAW..........................................................79
SECTION 12.6               NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..........................79
SECTION 12.7               SUCCESSORS.............................................................79
SECTION 12.8               SEVERABILITY...........................................................80
SECTION 12.9               COUNTERPART ORIGINALS..................................................80
SECTION 12.10              TABLE OF CONTENTS, HEADINGS, ETC.......................................80
SECTION 12.11              CONCERNING THE OWNER MANAGER...........................................80
SECTION 12.12              ACKNOWLEDGEMENT........................................................80

EXHIBITS:

A        Form of Lessor Note
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THIS IS AN OPEN-END MORTGAGE SECURING FUTURE ADVANCES UP TO A MAXIMUM PRINCIPAL
AMOUNT OF [$____] PLUS ACCRUED INTEREST AND OTHER INDEBTEDNESS AS DESCRIBED IN
42 Pa.C.S. Section 8143

               INDENTURE OF TRUST, MORTGAGE AND SECURITY AGREEMENT

                  This INDENTURE OF TRUST, MORTGAGE AND SECURITY AGREEMENT (__)
(as amended, supplemented or otherwise modified from time to time in accordance
with the provisions hereof, this "LEASE INDENTURE"), dated as of December __,
2001, among Homer City OL1 LLC, a Delaware limited liability company created for
the benefit of the Owner Participant referred to below, as grantor (the "OWNER
LESSOR" or the "MORTGAGOR"), The Bank of New York, as grantee (the "LEASE
INDENTURE TRUSTEE" or the "Mortgagee") and The Bank of New York, as Security
Agent (the "SECURITY AGENT").

                                   WITNESSETH:

                  WHEREAS, this Lease Indenture is executed pursuant to the
Participation Agreement as of the date hereof set forth on Schedule I hereto
among the Owner Lessor, the Owner Manager, the Owner Participant, EME Homer City
Generation L.P. ("Homer City"), Homer City Funding LLC ("Lender"), the Lease
Indenture Trustee, and the Bondholder Trustee (as defined herein);

                  WHEREAS, by a Facility Deed of even date intended to be
recorded prior to this Lease Indenture in the office of the Recorder of Deeds
of Indiana County, Pennsylvania, Homer City conveyed to the Owner Lessor an
Undivided Interest Percentage in the Homer City Assets (the "FACILITY"),
which Facility is more particularly described in Exhibit A attached hereto
and made a part hereof and is located on the Facility Site in Indiana County,
Pennsylvania;

                  WHEREAS, a Memorandum of the Facility Lease executed by the
Owner Lessor and Homer City is intended to be recorded as aforesaid prior to the
recording of this Lease Indenture;

                  WHEREAS, the Owner Lessor and Homer City (the "FACILITY
LESSEE") will pursuant to the Participation Agreement enter into the
Facility Lease Agreement (__), dated as of December __, 2001 (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions thereof, the "FACILITY LEASE"), pursuant to which the Owner Lessor
will lease to the Facility Lessee and the Facility Lessee will lease from the
Owner Lessor for a term of 33 3/4 years the Owner Lessor's undivided interest
equal to the Undivided Interest Percentage in and to the Homer City Assets
(the "FACILITY") with the right to nonexclusive possession thereof (the
"UNDIVIDED INTEREST");

                  WHEREAS, Homer City has leased to the Owner Lessor a
corresponding undivided interest equal to the Undivided Interest Percentage in
and to the Facility Site described in Exhibit B attached hereto and made a
part hereof with the right to nonexclusive possession thereof and has granted
certain non-exclusive easements (such undivided leasehold interest, together
with such non-exclusive easements, the "GROUND INTEREST") pursuant to a Facility
Site Lease between Homer City and the Owner Lessor as of the date hereof (the
"Facility Site Lease");

                  WHEREAS, a Memorandum of the Facility Site Lease executed by
Homer City and the Owner Lessor is intended to be recorded prior to this Lease
Indenture;

                  WHEREAS, the Owner Lessor has subleased the Ground Interest
back to Homer City pursuant to a Sublease of even date herewith (the "FACILITY
SITE SUBLEASE"), a memorandum of which is intended to be recorded prior to this
Lease Indenture;

                  WHEREAS, the Facility is more particularly described in
Exhibit A attached hereto and made a part hereof and is located on the Facility
Site located in Indiana County, in the Commonwealth of Pennsylvania, which,
together with certain

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easements, are more particularly described in Exhibit B attached hereto and
made a part hereof;

                  WHEREAS, the Owner Lessor was authorized and directed in the
LLC Agreement (__), effective as of September __, 2001 (as amended, supplemented
or otherwise modified from time to time in accordance with the provisions
thereof, the "LESSOR LLC AGREEMENT"), between Wilmington Trust Company, as
independent manager (the "TRUST COMPANY"), and GECC (the "OWNER PARTICIPANT"), a
copy of which is recorded contemporaneously herewith, to execute and deliver
this Lease Indenture;

                  WHEREAS, in connection with the transactions contemplated by
the Lessor LLC Agreement, the Owner Lessor entered into the Participation
Agreement;

                  WHEREAS, the Owner Lessor, pursuant to the Facility Deed and
Bill of Sale, will purchase the Undivided Interest from the Facility Lessee,
such purchase to include assumption of the Existing Debt, and concurrently
therewith will lease such Undivided Interest to the Facility Lessee pursuant to
the Facility Lease;

                  WHEREAS, the holders of the Existing Debt have consented to
the amendments and waivers to the Bondholder Indenture.

                  WHEREAS, in accordance with this Lease Indenture, the Owner
Lessor will execute and deliver the Initial Lessor Notes, in consideration of
the assumption of certain indebtedness by the initial Noteholders which
constitutes a portion of the Purchase Price, and will grant to the Security
Agent the liens and security interests herein provided;

                  WHEREAS, this Lease Indenture is intended to be an open-end
leasehold mortgage as to the Ground Interest and an open-end mortgage as to
the Facility Interest under the laws of the Commonwealth of Pennsylvania and a
security agreement under the Uniform Commercial Code of the State of New York;

                  WHEREAS, the Owner Lessor, the Security Agent and the Lease
Indenture Trustee desire to enter into this Lease Indenture, to, among other
things, provide for (a) the issuance by the Owner Lessor of the Lessor Notes in
two series, and (b) creation of the liens and security interests in favor of the
Security Agent

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as security for, INTER ALIA, the Owner Lessor's obligations to and for the
benefit of the Noteholders and the issuer of the Debt Service Reserve Letter
of Credit and for the benefit and security of such Noteholders; and

                  WHEREAS, in order to simplify the administration of the common
collateral, the Lease Indenture Trustee and the Owner Lessor desire to appoint
the Security Agent to serve as a common representative and to hold the Indenture
Estate for the benefit of the Lease Indenture Secured Parties.

                                GRANTING CLAUSE:

                  NOW, THEREFORE, to secure the prompt payment of the principal
of and interest on, and all other amounts due with respect to, the Lessor Notes
from time to time outstanding hereunder, and all other amounts owing hereunder
by the Owner Lessor and the performance and observance by the Owner Lessor of
all the agreements, covenants and provisions contained in the Operative
Documents, and the prompt payment of all amounts from time to time due or to
become due to any Lease Indenture Secured Party under the Operative Documents
(collectively, the "LESSOR SECURED OBLIGATIONS"), and for the uses and purposes
and subject to the terms and provisions hereof, and in consideration of the
premises and of the covenants herein contained, and of the acceptance of the
Lessor Notes by the Noteholders thereof, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Owner Lessor does
hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
warrant, unto and for the security and benefit of, the Security Agent acting
for and on behalf of the Lease Indenture Secured Parties, a first priority
security interest in and mortgage lien on all estate, right, title and interest
now held or hereafter acquired by the Owner Lessor in, to and under the
following described property, rights, interests and privileges, whether now or
hereafter acquired, other than Excepted Payments (such property, rights,
interests and privileges as are conveyed pursuant to this granting clause, but
excluding Excepted Payments and the rights to enforce and collect the sums as
set forth herein, being hereinafter referred to as the "INDENTURE ESTATE"):

                           (1) the Undivided Interest, the Owner Lessor's
                  interest in any Components; the Owner Lessor's interest in any
                  Improvements; the Facility Site Lease and the Ground Interest
                  thereunder; the Facility Lease and all payments of any kind by
                  the Facility Lessee thereunder (including Rent); the Facility
                  Site Sublease and the Sublease Ground Interest thereunder and
                  all payments of any kind by the Facility Lessee thereunder;
                  Owner Lessor's interest in all tangible property located on or
                  at or attached to the Facility Land that an interest in such
                  tangible

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                  property arises under applicable real estate law
                  ("FIXTURES"); the Facility Deed, the Bill of Sale, the
                  Ownership and Operation Agreement, the Lessor LLC Agreement,
                  and all and any interest in any property now or hereafter
                  granted to the Owner Lessor pursuant to any provision of the
                  Facility Site Lease, Facility Lease or the Facility Site
                  Sublease; the Security Depositary Agreement, the Debt Service
                  Reserve Letter of Credit, the Pledge and Collateral Agreement
                  and each other Operative Document to which the Owner Lessor
                  is a party (the Undivided Interest, the Owner Lessor's
                  interest in any Components, the Owner Lessor's interest in any
                  fixtures, Improvements and the Ground Interest are
                  collectively referred to as the "PROPERTY INTEREST" and the
                  documents, specifically referred to above in this paragraph
                  (1) are collectively referred to as the "INDENTURE ESTATE
                  DOCUMENTS"), including, without limitation, (x) all rights of
                  the Owner Lessor or the Facility Lessee (to the extent
                  assigned by the Facility Lessee to the Owner Lessor) to
                  receive any payments or other amounts or to exercise any
                  election or option or to make any decision or determination or
                  to give or receive any notice, consent, waiver or approval or
                  to make any demand or to take any other action under or in
                  respect of any such document, to accept surrender or
                  redelivery of the Property Interest or any part thereof, as
                  well as all the rights, powers and remedies on the part of the
                  Owner Lessor or the Facility Lessee (to the extent assigned by
                  the Facility Lessee to the Owner Lessor), whether acting under
                  any such document or by statute or at law or in equity or
                  otherwise, arising out of any Lease Default or Lease
                  Event of Default and (y) any right to restitution from the
                  Facility Lessee, any sublessee or any other Person in respect
                  of any determination of invalidity of any such document;

                           (2) all rents, royalties, issues, profits, revenues,
                  proceeds, damages, claims and other income from the property
                  described in this Granting Clause, including, without
                  limitation, all payments or proceeds payable to the Owner
                  Lessor as the result of the sale of the Property Interest or
                  the lease or other disposition of the Property Interest, and
                  all estate, right, title and interest of every nature
                  whatsoever of the Owner Lessor in and to such rents, issues,
                  profits, revenues and other income and every part thereof (the
                  "LEASE REVENUES");

                           (3) all condemnation proceeds with respect to the
                  Property Interest or any part thereof (to the extent of the
                  Owner Lessor's interest therein), and all proceeds (to the
                  extent of the Owner Lessor's

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                  interest therein) of all insurance maintained pursuant to
                  Section 11 of the Facility Lease or otherwise;

                           (4) all other property of every kind and description
                  and interests therein now held or hereafter acquired by the
                  Owner Lessor pursuant to the terms of any Operative Document,
                  wherever located;

                           (5) all damages resulting from breach (including,
                  without limitation, breach of warranty or misrepresentation)
                  or termination of any of the Indenture Estate Documents or
                  arising from bankruptcy, insolvency or other similar
                  proceedings involving any party to the Indenture Estate
                  Documents; and

                           (6)      all proceeds of the foregoing;

                  BUT EXCLUDING from the Indenture Estate all Excepted Payments,
any and all rights to enforce and collect the same, and SUBJECT TO the rights of
the Owner Lessor and the Owner Participant hereunder.

                  Concurrently with the delivery hereof, the Owner Lessor is
delivering to the Security Agent on behalf of the Lease Indenture Secured
Parties from time to time the original executed counterpart of the Facility
Lease to which a chattel paper receipt is attached.

                  TO HAVE AND TO HOLD the Indenture Estate and all parts,
rights, members and appurtenances thereof, to the Security Agent, the use,
benefit and on behalf of the Lease Indenture Secured Parties assigns (a) in fee
simple, forever, as to all parts thereof constituting real property other than
the Ground Interest, and (b) with respect to the Ground Interest, for a term of
years pursuant to the Facility Site Lease.

                  This Lease Indenture is intended to constitute an open-end
mortgage and leasehold mortgage under the laws of the Commonwealth of
Pennsylvania and a security agreement as required under the Uniform Commercial
Code of the State of New York. This Lease Indenture is given to secure the
payment and performance of the Lessor Secured Obligations.

                  PROVIDED, HOWEVER, that if the principal, interest and any
other amounts due in respect of all the Lessor Notes, all other amounts due to
the Noteholders at the time and in the manner required hereby and by the Lessor
Notes, the Facility Lease and the Participation Agreement (but not including
Excepted Payments) and any other Lessor Secured Obligations shall have been
paid, then this Lease Indenture shall be surrendered and cancelled and upon such
surrender and cancellation the rights hereby and thereby granted and assigned
shall terminate and

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cease and the Security Agent shall take such actions as are required to be
taken by it to evidence such termination and cancellation pursuant to and as
directed under Section 12.1.

                  Subject to the terms and conditions hereof, the Lease
Indenture Secured Parties do hereby irrevocably constitute and appoint the
Security Agent as their true and lawful attorney (which appointment is coupled
with an interest) with full power (in the name of each Lease Indenture Secured
Party, as applicable) to ask, require, demand and receive any and all moneys and
claims for moneys (in each case, including, without limitation, insurance and
requisition proceeds to the extent of the Owner Lessor's interest therein but
excluding in all cases Excepted Payments) due and to become due under or arising
out of the Indenture Estate Documents and all other property which now or
hereafter constitutes part of the Indenture Estate and, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or to
take any action or to institute any proceedings (other than in connection with
the enforcement or collection of Excepted Payments) which the Security Agent may
deem to be necessary or advisable. Pursuant to the Facility Lease, the Facility
Lessee is directed to make all payments of Rent required to be paid or deposited
with the Owner Lessor (other than Excepted Payments) and all other amounts which
are required to be paid to or deposited with the Owner Lessor pursuant to the
Facility Lease (other than Excepted Payments) directly to the Security Agent at
such address or addresses as the Security Agent shall specify, for application
as provided in this Lease Indenture. Further, the Owner Lessor agrees that
promptly on receipt thereof, it will transfer to the Security Agent any and all
moneys from time to time received by it constituting part of the Indenture
Estate, whether or not expressly referred to in the immediately preceding
sentence, for distribution pursuant to this Lease Indenture.

                  It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner Lessor shall remain liable under the
Indenture Estate Documents to perform all of the obligations assumed by it
thereunder, all in accordance with and pursuant to the terms and provisions
thereof, and the Lease Indenture Trustee and the Noteholders shall have no
obligation or liability under any term or provision thereof by reason of or
arising out of the assignment hereunder, nor shall the Lease Indenture Trustee
or the Noteholders be required or obligated in any manner, except as herein
expressly provided, to perform or fulfill any obligations of the Owner Lessor
under or pursuant to any of the Indenture Estate Documents to make any payment,
or to make any inquiry as to the nature or sufficiency of any payment received
by it, or present or file any claim or take any action to collect or enforce the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.

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                  The Owner Lessor agrees that at any time and from time to
time, upon the written request of the Lease Indenture Trustee (acting on the
instruction of any Noteholder) or any Noteholder, the Owner Lessor will promptly
and duly execute and deliver or cause to be duly executed and delivered any and
all such further instruments and documents necessary to obtain the full benefits
of the assignment hereunder and of the rights and powers herein granted;
PROVIDED, HOWEVER, that the Owner Lessor shall have no obligation to execute or
deliver or to cause to be executed or delivered any further instruments or
documents that would give the Lease Indenture Trustee, the Security Agents or
the Lease Indenture Secured Parties Reserve Letter of Credit greater rights and
powers than the rights and powers of the Owner Lessor which have been granted
herein or intended to be granted herein.

                  The Owner Lessor does hereby warrant and represent that it has
not assigned, pledged or granted a lien or security interest in, to or under,
and hereby covenants that, so long as this Lease Indenture shall remain in
effect and the Lien hereof shall not have been released pursuant to Section 7.1
hereof, it will not assign, pledge or grant a lien or security interest in any
of its estate, right, title or interest in, to or under, the Indenture Estate to
anyone other than the Security Agent for the benefit of the Lease Indenture
Secured Parties. The Owner Lessor hereby further covenants that with respect to
its estate, right, title and interest in, to or under the Indenture Estate, it
will not, except as provided in this Lease Indenture and except as to Excepted
Payments, (i) accept any payment from the Facility Lessee or any sublessee or
enter into any agreement amending, modifying or supplementing any of the
Indenture Estate Documents, execute any waiver or modification of, or consent
under, the terms of any of the Indenture Estate Documents or revoke or terminate
any of the Indenture Estate Documents, (ii) settle or compromise any claim
arising under any of the Indenture Estate Documents, or (iii) submit or consent
to the submission of any dispute, difference or other matter arising under or in
respect of any of the Indenture Estate Documents to arbitration thereunder.

                  Except as provided herein, the Owner Lessor hereby ratifies
and confirms its obligations under the Indenture Estate Documents and does
hereby agree that it will not take or omit to take any action, the taking or
omission of which might result in an alteration or impairment of any of the
Indenture Estate Documents or of any of the rights created by any such Indenture
Estate Document or the assignment (subject to the previous paragraph) hereunder.

                  The Security Agent, for itself and its successors and
permitted assigns, hereby agrees that it shall hold the Indenture Estate, in
trust for the benefit and security of (i) the Noteholders of the Lessor Notes
from time to time outstanding, without any priority of any one Lessor Note over
any other except as herein otherwise expressly provided, (ii) the Lease
Indenture Trustee, and for the

                                        12

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uses and purposes and subject to the terms and provisions set forth in this
Lease Indenture and (iii) the issuer of the Debt Service Reserve Letter of
Credit.

                  Accordingly, the Owner Lessor, for itself and its successors
and permitted assigns, agrees that all Lessor Notes are to be issued and
delivered and that all property subject or to become subject hereto is to be
held subject to the further covenants, conditions, uses and trusts hereinafter
set forth, and the Owner Lessor, for itself and its successors and permitted
assigns, hereby covenants and agrees with the Security Agent, for the benefit
and security of the Noteholders from time to time of the Lessor Notes from time
to time outstanding and the issuer of the Debt Service Letter of Credit and to
protect the security of this Lease Indenture, and the Lease Indenture Trustee
and the Security Agent agree to accept the trusts and duties hereinafter set
forth, as follows:

                                    ARTICLE I
                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.1                DEFINITIONS

                   "ACCEPTABLE CREDIT SUPPORT" means an irrevocable letter of
credit from an Acceptable Credit Provider. In the event that (a) such letter
of credit will expire or otherwise terminate, substitute Acceptable Credit
Support must be provided at least 30 days prior to the applicable expiration
or termination date or (b) a downgrade of any Acceptable Credit Provider by
Moody's or S&P to below the minimum criteria specified above, substitute
Acceptable Credit Support must be provided within 30 days of such event.
Otherwise, in either such case, the Lease Indenture Trustee shall draw down
the then outstanding amount of the Acceptable Credit Support and deposit such
monies into the Debt Service Reserve Account.

                   "AGENT" means any Registrar, Paying Agent, co-registrar,
authenticating agent or securities custodian.

                  "ASSUMPTION EVENT" means the election by the Facility Lessee
to assume the Lessor Notes pursuant to Section 10.2(b) or Section 13.4 of the
Facility Lease.

                   "BOARD OF MANAGERS" means the [Board of Managers] of the
Owner Lessor or any committee thereof duly authorized to act on behalf of such
[Board of Managers].

                                        13

<Page>

                  "BOND HOLDER INDENTURE" means the Indenture dated May 27, 1999
between Edison Mission Holdings Co. and The Bank of New York, as Lease Indenture
Trustee, as amended and restated.

                   "BOARD RESOLUTION" means, with respect to any Person, a copy
of a resolution certified by the Secretary or an Assistant Secretary of such
Person or the general partner, in the case of a limited partnership, of such
Person (or, if such Person is a partnership, one of its general partners) to
have been duly adopted by the Board of Directors of such Person or the general
partner, in the case of a limited partnership, of such Person (or, if such
Person is a partnership, one of its general partners) and to be in full force
and effect on the date of such certification, and delivered to the Lease
Indenture Trustee.

                  "BUSINESS DAY" means a day other than a Saturday, Sunday or
other day on which commercial banking institutions are authorized or required by
law, regulation or executive order to be closed in New York, New York or the
city and state in which the office of the Lease Indenture Trustee is located.

                  "CAPITAL LEASE OBLIGATION" means, as to any Person, all
monetary obligations of such Person under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of the Lease Indenture, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.

                  "CEDEL" means Cedelbank and its successors and assigns.

                  "CLOSING DATE" means the date of issuance and delivery of the
Initial Lessor Notes.

                  "COLLATERAL" means the collective reference to all assets,
whether now owned or hereafter acquired, upon which a Lien is created or granted
from time to time pursuant to any Security Document.

                  "CORPORATE TRUST OFFICE OF THE LEASE INDENTURE TRUSTEE" shall
be at the address of the Lease Indenture Trustee specified in Section 13.2
hereof or such

                                        14

<Page>

other address as to which the Lease Indenture Trustee may give
notice to the Owner Lessor.

                  "CUSTODIAN" means the Lease Indenture Trustee, as custodian
with respect to the Lessor Notes in global form, or any successor entity
thereto.

                  "DEPOSITARY" means, with respect to the Lessor Notes issuable
or issued in whole or in part in global form, the Person specified in Section
2.11 hereof as the Depositary with respect to the Lessor Notes, and any and all
successors thereto appointed as depositary hereunder and having become such
pursuant to the applicable provision of this Lease Indenture.

                  "DUFF & PHELPS" means Duff & Phelps Credit Rating Co. and
its successors and assigns.

                  "EUROCLEAR" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.

                  "FINANCING DOCUMENTS" has the meaning set forth in the
Security Deposit Agreement.

                  "GOVERNMENT SECURITIES" means direct obligations of, or
obligations guaranteed by, the United States of America, and the payment for
which the United States pledges its full faith and credit.

                  "INDEPENDENT ENGINEER" means Stone and Webster Management
Consultants, Inc. or another nationally recognized independent engineering and
consulting firm which, as Independent Engineer, will independently review the
technical aspects of the project, analyze the contractual structure and create
financial projections for the benefit of the Noteholders.

                  "INDEPENDENT MANAGER" means Wilmington Trust Company, a
Delaware corporation or its successors and assigns.

                                        15

<Page>

                  "LEASE INDENTURE DEFAULT" means an event or condition that,
with the giving of notice or the lapse of time, or both, would become a Lease
Indenture Event of Default.

                  "LEASE INDENTURE SECURED PARTY" means each Noteholder, the
Lease Indenture Trustee and the issuer of the Debt Service Reserve Letter of
Credit.

                  "LESSOR NOTES" the Series A Lessor Notes and the Series B
Lessor Notes.

                  "MAKE-WHOLE PREMIUM" means, with respect to any Lessor Note to
be redeemed on any Redemption Date, an amount calculated by the Owner Lessor as
of such date equal to the excess, if any, of (i) the net present value of the
then remaining scheduled installments of principal and payments of interest (but
excluding that portion of any scheduled installment of principal or payment of
interest that is actually due and paid on the Redemption Date) in respect of
such Lessor Note calculated using a discount factor equal to the sum of the
Treasury Yield plus 50 basis points, over (ii) the unpaid principal amount of
such Lessor Note. Such Yield Maintenance Premium shall be determined in
accordance with the following provisions:

                  (a) the average life of the remaining scheduled installments
         of principal in respect of such Lessor Note (the "Remaining Average
         Life") shall be calculated as of such Redemption Date; and

                  (b) the "Treasury Yield" shall be calculated for the United
         States Treasury security having an average life equal to the Remaining
         Average Life and trading in the secondary market at the price closest
         to par (the "Primary Issue"); PROVIDED, HOWEVER, that, if no United
         States Treasury security has an average life equal to the Remaining
         Average Life, the yields (the "Other Yields") for maturities of the two
         United States Treasury securities having average lives most closely
         corresponding to such Remaining Average Life and trading in the
         secondary market at the price closest to par shall be calculated, and
         the yield to maturity for the Primary Issue shall be the yield
         interpolated or extrapolated from such Other Yields on a straight-line
         basis, rounding in each of such relevant periods to the nearest month.

                  "MANAGER'S CERTIFICATE" means a certificate signed by the
Independent Manager of the Owner Lessor.

                  "MOODY'S" means Moody's Investors Service, Inc., a division
of Moody's Corporation, and its successors and assigns.

                  "NEW LESSOR NOTES" has the meaning set forth in Section 2.6(a)
to this Lease Indenture.

                  "NOTEHOLDER" means a Person in whose name a Lessor Note is
registered.

                  "OFFERING" means the offering of the Initial Lessor Notes by
the Owner Lessor.

                  "OPINION OF COUNSEL" means a written opinion of counsel for
any Person either expressly referred to in the Lease Indenture or otherwise
reasonably satisfactory to the Lease Indenture Trustee which may include,
without limitation, counsel for the Owner Lessor, whether or not such counsel is
an employee of the Owner Lessor.

                  "POWER MARKET CONSULTANT" means PHB Hagler Bailly, Inc. or
another nationally recognized power market consulting firm which, as Power
Market Consultant, will perform a market study of certain markets relating to
the Facility and develop independent electricity price forecasts for the benefit
of the Noteholders.

                                        16

<Page>

                  "PRINCIPAL ACCOUNT" has the meaning set forth in the Amended
Security Deposit Agreement.

                  "RECOVERY EVENT" means any settlement of or payment of
$5,000,000 or more in respect of (i) any property or casualty insurance claim
relating to the Facility or (ii) any seizure, condemnation, confiscation or
taking of, or requisition of title or use of, the Facility or any part thereof
by any Governmental Authority.

                  "REDEMPTION DATE" means a date set forth for redemption of
Lessor Notes pursuant to this Lease Indenture.

                  "REDEMPTION PRICE" means the price to be paid by the Owner
Lessor for the Lessor Notes that are redeemed pursuant to this Lease Indenture.

                  "RENT DEFAULT REMEDY DATE" means the earlier to occur of
(i) the Existing Debt is retired or (ii) there is an acceleration under
Section 7.3 hereof so long as such acceleration is not rescinded.

                  "REQUIRED LEASE INDENTURE SECURED PARTIES" means, at any time,
holders of debt that at such time hold greater than 50% of the sum of (i) the
Lessor Notes outstanding at such time (disregarding for such computation any
Lessor Notes held directly or beneficially by the Facility Lessee, the Owner
Lessor, the Owner Participant, or any of their respective Affiliates, unless
such Person owns all of the Lessor Notes in accordance with the provisions of
this Lease Indenture) and (ii) in the case of the Debt Service Reserve Letter of
Credit, the commitments with respect thereto at such time.

                  "RESPONSIBLE OFFICER," when used with respect to the Lease
Indenture Trustee, means any officer within the Corporate Trust Office of the
Lease Indenture Trustee (or any successor group of the Lease Indenture Trustee)
or any other officer of the Lease Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.

                  "RULE 144" means Rule 144 promulgated under the Securities
Act.

                  "RULE 144A" means Rule 144A promulgated under the Securities
Act.

                  "RULE 903" means Rule 903 promulgated under the Securities
Act.

                                        17

<Page>

                  "RULE 904" means Rule 904 promulgated under the Securities
Act.

                  "S&P" means Standard & Poor's Rating Services.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended.

                  "SENIOR RENT" has the meaning set forth in the Security
Deposit Agreement.

                  "SERIES A LESSOR NOTES" has the meaning set forth in Section
2.2.

                  "SERIES B LESSOR NOTES" " has the meaning set forth in Section
2.2.

                  "SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.

                                        18

<Page>

SECTION 1.2                OTHER DEFINITIONS

<Table>
<Caption>                                                                         Defined in
         Term                                                                       Section
<S>                                                                                   <C>
         "AUTHENTICATION ORDER"........................................................2.2
         "COVENANT DEFEASANCE".........................................................2.3
         "DTC".........................................................................2.3
         "EVENT OF LEASE INDENTURE DEFAULT"............................................6.1
         "INCUR".......................................................................4.9
         "LEGAL DEFEASANCE"............................................................8.2
         "PAYING AGENT"................................................................2.3
         "PERMITTED INDEBTEDNESS"......................................................4.9
         "PERMITTED LIENS"............................................................4.13
         "REGISTRAR"...................................................................2.3

</Table>
SECTION 1.3                OTHER DEFINITIONS

                  Unless otherwise defined in SECTION 1.1 hereof (including
Annex A hereto), each capitalized term used in this Lease Indenture and not
otherwise defined herein shall have the respective meaning set forth in Appendix
A to the Participation Agreement (__) dated as of December __, 2001 (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions thereof, the "PARTICIPATION AGREEMENT") among the Facility Lessee,
the Owner Manager, the Owner Lessor, the Owner Participant, the Lease Indenture
Trustee, the Lender and the Bondholder Lease Indenture Trustee, unless the
context hereof shall otherwise require. The general provisions of Appendix A to
the Participation Agreement shall apply to terms used in this Lease Indenture
and specifically defined herein.

                                        19

<Page>

SECTION 1.4                ONE CLASS OF SECURITIES

                  The Series A Lessor Notes and Series B Lessor Notes (and any
Subsequent Lessor Notes issued pursuant to Section 2.6 hereof) shall vote and
consent together on all matters as one class and none of the Series A Lessor
Notes or Series B Lessor Notes shall have the right to vote or consent as a
separate class on any matter.

                                   ARTICLE II
                                THE LESSOR NOTES

THIS IS AN OPEN-END MORTGAGE AND LEASEHOLD MORTGAGE SECURING FUTURE ADVANCES
UP TO A MAXIMUM PRINCIPAL AMOUNT OF [$____] PLUS ACCRUED INTEREST AND OTHER
INDEBTEDNESS AS DESCRIBED.

SECTION 2.1                LIMITATION ON LESSOR NOTES

                  No Lessor Notes may be issued under the provisions of, or
become secured by, this Lease Indenture except in accordance with the provisions
of this Section 2. The aggregate principal amount of the Lessor Notes which may
be authenticated and delivered and outstanding at any one time under this Lease
Indenture shall be limited to the aggregate principal amount of the Initial
Lessor Notes issued on the Closing Date to the Lender plus the aggregate
principal amount of Additional Lessor Notes issued pursuant to Section 2.6
hereof.

SECTION 2.2                INITIAL LESSOR NOTES

                  There are hereby created and established hereunder two series
of Lessor Notes consisting of the Series A Lessor Notes (the "Series A Lessor
Notes") and the Series B Lessor Notes (the "Series B Lessor Notes"), each in
substantially the form set forth in Exhibit [ ] to this Lease Indenture and each
such series in the aggregate principal amount, having installments payable on
the dates and in the amounts and having the final maturity date and interest
rate set forth in Schedule I to this Lease Indenture (the Series A Lessor Notes
and the Series B Lessor Notes, collectively, the "INITIAL LESSOR NOTES" or,
individually, an "INITIAL LESSOR NOTE").

SECTION 2.3                EXECUTION AND AUTHENTICATION OF LESSOR NOTES

                  Each Lessor Note issued hereunder shall be executed and
delivered on behalf of the Owner Lessor by one of its authorized signatories, be
in fully registered form, be dated the date of original issuance of such Lessor
Note and be in denominations of not less than $1,000. Any Lessor Note may be
signed by a Person who, at the actual date of the execution of such Lessor Note,
is an authorized

                                        20

<Page>

signatory of the Owner Lessor although at the nominal date of
such Lessor Note such Person may not have been an authorized signatory of the
Owner Lessor. No Lessor Note shall be secured by or be entitled to any benefit
under this Lease Indenture or be valid or obligatory for any purpose unless
there appears thereon a certificate of authentication substantially in the form
set forth in Exhibit D to this Lease Indenture (or in the appropriate form
provided for in any supplement hereto executed pursuant to Section 2.6 hereof),
executed by the Lease Indenture Trustee by the manual signature of one of its
authorized officers, and such certificate upon any Lessor Note shall be
conclusive evidence that such Lessor Note has been duly authenticated and
delivered hereunder. The Lease Indenture Trustee shall authenticate and deliver
the Initial Lessor Notes for original issue in the respective aggregate
principal amounts specified in Schedule I to this Lease Indenture, upon a
written order of the Owner Lessor signed on its behalf by the Owner Manager. The
Lease Indenture Trustee shall authenticate and deliver Subsequent Lessor Notes,
upon a written order of the Owner Lessor executed on its behalf by the Owner
Manager and satisfaction of the conditions specified in Section 2.6 hereof. Such
order shall specify the principal amount of the Subsequent Lessor Notes to be
authenticated and the date on which the original issue of Subsequent Lessor
Notes is to be authenticated.

SECTION 2.4                ISSUANCE AND TERMS OF THE INITIAL LESSOR NOTES

         (a) There shall be issued to the Lender the Initial Lessor Notes, dated
the Closing Date. The aggregate amount of the Initial Lessor Notes shall be in
the principal amount equal to the aggregate principal amount of the Lessor Notes
purchased by the Lender from the Owner Lessor pursuant to Section 2.1(b) of the
Participation Agreement.

         (b) Interest, including post-petition interest in any proceeding under
any Bankruptcy Code (computed on the basis of a 360-day year of twelve 30-day
months) on any overdue principal and, to the extent permitted by Requirements of
Law, on overdue interest or Make-Whole Premium shall be paid on demand at a rate
that is 1% per annum in excess of the rate then in effect.

SECTION 2.5                PAYMENTS FROM INDENTURE ESTATE ONLY; NO PERSONAL
                           LIABILITY OF THE OWNER PARTICIPANT SECURITY AGENT
                           OR THE LEASE INDENTURE TRUSTEE

                  Except as may otherwise specifically be provided in this Lease
Indenture or in the Participation Agreement, all payments to be made in respect
of the Lessor Notes or under this Lease Indenture shall be made only from the
Indenture Estate, and the Owner Lessor shall have no obligation for the payment
thereof except to the extent that there shall be sufficient income or proceeds
from the Indenture Estate to make such payments in accordance with the terms of
Section 3

                                        21

<Page>

hereof, and the Owner Participant shall not have any obligation for
payments in respect of the Lessor Notes or under this Lease Indenture. The Lease
Indenture Trustee, the Security Agent, each Noteholder and the issuer of the
Debt Service Reserve Letter of Credit, by its acceptance thereof, agrees that it
will look solely to the income and proceeds from the Indenture Estate to the
extent available for distribution to the Lease Indenture Trustee, the Security
Agent, or such Noteholder or the issuer of the Debt Service Reserve Letter of
Credit, as the case may be, as herein provided and that, except as expressly
provided in this Lease Indenture or the Participation Agreement, (x) none of the
Owner Participant, the Trust Company, the Security Agent, or the Lease Indenture
Trustee, or any Affiliate of any thereof, shall be personally liable to such
Noteholder or the issuer of the Debt Service Reserve Letter of Credit for any
amounts payable hereunder, under such Lessor Note or for any performance to be
rendered under any Indenture Estate Document or for any liability under any
Indenture Estate Document, and (y) such amounts shall be non-recourse to the
assets of each of the Owner Participant, the Security Agent, the Trust Company
or the Lease Indenture Trustee or the issuer of the Debt Service Reserve Letter
of Credit, or any Affiliate of any thereof. Without prejudice to the foregoing,
the Owner Lessor will duly and punctually pay or cause to be paid the principal
of, premium (including, without limitation, Make-Whole Premium), if any, and
interest on all Lessor Notes according to their terms and the terms of this
Lease Indenture. Nothing contained in this Section 2.5 limiting the liability of
the Owner Lessor shall derogate from the right of the Lease Indenture Trustee
the Security Agent, the Noteholders and the issuer of the Debt Service Reserve
Letter of Credit to proceed against the Indenture Estate to secure and enforce
all payments and obligations due hereunder and under the Indenture Estate
Documents and the Lessor Notes.

                  In furtherance of the foregoing, to the fullest extent
permitted by law, each Noteholder (and each assignee of such Person) and the
issuer of the Debt Service Reserve Letter of Credit, by their acceptance
thereof, agrees, as a condition to its being secured under this Lease Indenture,
that neither they nor the Lease Indenture Trustee will exercise any statutory
right to negate the agreements set forth in this Section 2.5.

                  Nothing herein contained shall be interpreted as affecting the
representations, warranties or agreements of the Owner Lessor expressly made set
forth in the Participation Agreement or the Lessor LLC Agreement.

SECTION 2.6                SUBSEQUENT LESSOR NOTES

         (a) The Owner Lessor may, subject to the conditions hereafter provided
in this Section 2.6, issue additional Lessor Notes ("SUBSEQUENT LESSOR NOTES")
under and secured by this Lease Indenture, at any time or from time to time for
the purpose of (i) providing funds for a Supplemental Financing pursuant to
Section 12.1 of the

                                        22

<Page>

Participation Agreement (Subsequent Lessor Notes issued for such purpose, the
"ADDITIONAL LESSOR NOTES") or (ii) refinancing the Lessor Notes or other
Subsequent Lessor Notes pursuant to Section 12.2 of the Participation
Agreement (Subsequent Lessor Notes issued for such purpose, the "NEW LESSOR
NOTES").

         (b) Before any Subsequent Lessor Notes shall be issued under the
provisions of this Section 2.6, the Owner Lessor shall have delivered to the
Lease Indenture Trustee, not less than 5 (15 days in the case of New Lessor
Notes) days nor more than 60 days (or in the case of a Supplemental Financing
under Section 12.1 of the Participation Agreement, 90 days) prior to the
proposed date of issuance of such Subsequent Lessor Notes, a request and
authorization to issue such Subsequent Lessor Notes, which request and
authorization shall (i) contain the proposed date of issuance of such Lessor
Notes and the terms thereof and (ii) include a certification by the Facility
Lessee that the terms of such Lessor Notes are in compliance with this Section
2.6 and Section 12.1 or 12.2 of the Participation Agreement, as the case may be.
Such Subsequent Lessor Notes shall have a designation so as to distinguish such
Subsequent Lessor Notes from the Lessor Notes theretofore issued, be dated their
respective dates of issuance, bear interest at such rates (which may be either
fixed or floating) as shall be agreed between the Facility Lessee and the Owner
Lessor, and shall be stated to be payable by their terms not later than the
latest date permitted therefore under Section 12.1 or 12.2 of the Participation
Agreement, as the case may be.

         (c) Except as to any differences in the maturity dates of the
Subsequent Lessor Notes or the rate or rates of interest thereon, such
Subsequent Lessor Notes shall be on a parity with, and shall be entitled to the
same benefits and security of this Lease Indenture, and shall be subject to the
same terms hereof, as the other Lessor Notes issued pursuant to the terms
hereof.

         (d) The terms, provisions and designations of such Subsequent Lessor
Notes shall be set forth in a supplement to this Lease Indenture executed by the
Owner Lessor, the Lease Indenture Trustee and the Security Agent. Such
Subsequent Lessor Notes shall be executed, delivered and registered as provided
in this Lease Indenture, but before such Subsequent Lessor Notes shall be
delivered and registered there shall be delivered to the Lease Indenture Trustee
and the Security Agent, in addition to other documents and certificates required
by this Section 2.6, the following, all of which shall be dated as of the date
of the supplement to this Lease Indenture:

                  (i) a copy of such supplement (which shall include
         the form of such series of Subsequent Lessor Notes);

                                        23

<Page>

                  (ii) unless the Subsequent Lessor Notes will upon issuance be
         the only Lessor Notes outstanding, evidence of the filing of record of
         such supplement, together with UCC lien searches, supplemental title
         reports, opinions, title insurance endorsements and such other evidence
         that may be reasonably required by the Lease Indenture Trustee or the
         Security Agent, as applicable, demonstrating that this Lease Indenture
         and such supplement provide a first-priority perfected lien and
         security interest, subject to Permitted Liens, in the Indenture Estate
         for the full amount of all Lessor Notes outstanding, including all
         Subsequent Lessor Notes described in such supplement and the issuer of
         the Debt Service Reserve Letter of Credit;

                  (iii) an officer's certificate of an Authorized Officer of the
         Facility Lessee stating that (A) no Lease Default or Lease Event of
         Default has occurred and is continuing, (B) the conditions in respect
         of the issuance of such Subsequent Lessor Notes contained in this
         Section 2.6 have been satisfied, (C) the Basic Lease Rent and the
         Termination Value are calculated to be sufficient to pay all the
         outstanding Lessor Notes, after taking into account the issuance of
         such Subsequent Lessor Notes and any related prepayment of Lessor Notes
         theretofore outstanding and (D) all conditions to the Supplemental
         Financing or refinancing contained in Section 12.1 or 12.2 of the
         Participation Agreement or in any other provision of the Operative
         Documents have been satisfied;

                  (iv) a Manger's Certificate of the Owner Lessor
         stating that no Lease Indenture Default has occurred and is
         continuing; and

                  (v) an opinion of counsel to the Owner Lessor that the
         Subsequent Lessor Notes and the supplement to this Lease Indenture have
         been duly authorized, executed and delivered by the Owner Lessor and
         constitute the legal, valid and binding obligations of the Owner Lessor
         enforceable in accordance with their terms.

SECTION 2.7                PAYMENT OF EXPENSES ON TRANSFER

                  Upon the issuance of a new Lessor Note or Lessor Notes
pursuant to Section 2.14 or 2.6 hereof, the Owner Lessor or the Lease Indenture
Trustee may require from the party requesting the issuance of such new Lessor
Note or Lessor Notes payment of a sum to reimburse the Owner Lessor and the
Lease Indenture Trustee for, or to provide funds for, the payment on an
After-Tax Basis to the Owner Lessor, Lease Indenture Trustee, Security Agent,
Owner Participant and any OP Member of any tax or other governmental charge,
legal fees and expenses in connection therewith or any charges and expenses
connected with such tax or

                                        24

<Page>

governmental charge paid or payable by the Owner Lessor or the Lease
Indenture Trustee.

SECTION 2.8                RESTRICTIONS OF TRANSFER RESULTING FROM FEDERAL
                           SECURITIES LAWS; LEGEND

                  Each Lessor Note shall be delivered to the initial Noteholder
thereof without registration of such Lessor Note under the Securities Act and
without qualification of this Lease Indenture under the Trust Indenture Act of
1939, as amended. Prior to any transfer of any such Lessor Note, in whole or in
part, to any Person, the Noteholder thereof shall furnish to the Facility
Lessee, the Lease Indenture Trustee and the Owner Lessor an opinion of counsel,
which opinion and which counsel shall be reasonably satisfactory to the Lease
Indenture Trustee, the Owner Lessor and the Facility Lessee, to the effect that
such transfer will not violate the registration provisions of the Securities Act
or require qualification of this Lease Indenture under the Trust Indenture Act
of 1939, as amended, and all Lessor Notes issued hereunder shall be endorsed
with a legend which shall read substantially as follows:

         THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
         MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE OR OTHERWISE DISPOSED
         OF EXCEPT WHILE SUCH REGISTRATION IS IN EFFECT OR PURSUANT TO AN
         EXEMPTION FROM REGISTRATION UNDER SAID ACT.

SECTION 2.9                SECURITY FOR AND PARITY OF LESSOR NOTES

                  All Lessor Notes issued and outstanding hereunder shall rank
on a parity with each other and with the issuer of the Debt Service Reserve
Letter of Credit and shall as to each other be secured equally and ratably by
this Lease Indenture, without preference, priority or distinction of any thereof
over any other by reason of difference in time of issuance or otherwise.

SECTION 2.10               ACCEPTANCE OF THE LEASE INDENTURE TRUSTEE AND
                           APPOINTMENT OF THE SECURITY AGENT

                  (a) Each Noteholder, by its acceptance of a Lessor Note, shall
be deemed to have consented to the appointment of the Lease Indenture Trustee.

                  (b) Each of the Lease Indenture Secured Parties or their
representatives hereby designates and appoints The Bank of New York as the
security agent for such Lease Indenture Secured Parties under the Lease
Indenture, and authorizes The Bank of New York in such capacity to take such
action on its

                                        25

<Page>

behalf under the provisions of the Lease Indenture and to exercise
such powers and perform such duties as are expressly delegated to it by the
terms of this Lease Indenture, together with such other powers as are incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this Lease
Indenture, the Security Agent shall not have any duties or responsibilities,
except those expressly set forth herein, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Lease Indenture or otherwise exist against the Security Agent.

SECTION 2.11               REGISTRAR AND PAYING AGENT

         (a) The Owner Lessor shall maintain in the Borough of Manhattan, the
City of New York, an office or agency where Lessor Notes may be presented for
registration of transfer ("REGISTRAR") and an office or agency where Lessor
Notes may be presented for payment ("PAYING AGENT"). The Registrar shall keep a
register of the Lessor Notes and of their transfer. The Owner Lessor may appoint
one or more co-registrars and one or more additional paying agents. The term
Registrar includes any co-registrar and the term Paying Agent includes any
additional paying agent. The Owner Lessor may change any Paying Agent without
notice to any Noteholder. The Owner Lessor shall notify the Security Agent and
the Lease Indenture Trustee in writing of the name and address of any Agent not
a party to this Lease Indenture. If the Owner Lessor fails to appoint or
maintain another entity as Registrar or Paying Agent, the Lease Indenture
Trustee shall act as such.

         (b) The Owner Lessor initially appoints the Lease Indenture Trustee to
act as the Registrar and Paying Agent and to act as Custodian with respect to
the Lessor Notes.

         (c) The Security Agent shall deposit with the Lease Indenture Trustee
for as long as the Lessor Note Indenture is outstanding, (or to the Paying Agent
if applicable) a sum sufficient to pay such principal and interest, and premium,
if any, when so becoming due. The Owner Lessor shall require each Paying Agent
(other than the Lease Indenture Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Noteholders or the Lease Indenture
Trustee all money held by the Paying Agent for the payment of principal of or
interest on the Lessor Notes and shall notify the Lease Indenture Trustee of any
default by the Security Agent in making any such payment.

SECTION 2.12               PAYING AGENT TO HOLD MONEY IN TRUST

                  The Owner Lessor shall require each Paying Agent other than
the Lease Indenture Trustee to agree in writing that the Paying Agent will hold
in trust for the benefit of Noteholders or issuer of the Debt Service Reserve
Letter of Credit,

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if applicable, and all money held by the Paying Agent for the payment of
principal on, premium, if any, or interest on the Lessor Notes, and will
notify the Lease Indenture Trustee in writing of any default  by the
Security Agent in making any such payment. While any such default continues,
the Lease Indenture Trustee may require a Paying Agent to pay all money held
by it to the Lease Indenture Trustee. The Owner Lessor at any time may require
a Paying Agent to pay all money held by it to the Lease Indenture Trustee.
Upon payment over to the Lease Indenture Trustee, the Paying Agent shall have no
further liability for the money.

SECTION 2.13               [RESERVED]

SECTION 2.14               REPLACEMENT LESSOR NOTES

                  If any mutilated Lessor Note is surrendered to the Lease
Indenture Trustee or the Owner Lessor and the Lease Indenture Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Lessor
Note, the Owner Lessor shall issue and the Lease Indenture Trustee, upon receipt
of an Authentication Order, shall authenticate a replacement Lessor Note and
deliver in lieu of such Lessor Note, a new Lessor Note, dated the same date as
such Lessor Note and of like tenor and principal amounts. If required by the
Lease Indenture Trustee or the Owner Lessor, an indemnity Lessor Note must be
supplied by the Noteholder that is sufficient in the judgment of the Lease
Indenture Trustee and the Owner Lessor to protect the Owner Lessor, the Lease
Indenture Trustee, any Agent and any authenticating agent from any loss that any
of them may suffer if a Lessor Note is replaced. The Owner Lessor and the Lease
Indenture Trustee may charge for their expenses in replacing a Lessor Note.

                  Every replacement Lessor Note is an additional obligation of
the Owner Lessor and shall be entitled to all of the benefits of this Lease
Indenture equally and proportionately with all other Lessor Notes duly issued
hereunder.

SECTION 2.15               OUTSTANDING LESSOR NOTES

                  The Lessor Notes outstanding at any time are all the Lessor
Notes authenticated by the Lease Indenture Trustee except for those canceled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding. Except as set forth in Section 2.16 hereof, a Lessor Note
does not cease to be outstanding because the Owner Lessor or an Affiliate of the
Owner Lessor holds the Lessor Note.

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                  If a Lessor Note is replaced pursuant to Section 2.14 hereof,
it ceases to be outstanding unless the Lease Indenture Trustee receives proof
satisfactory to it that the replaced Lessor Note is held by a bona fide
purchaser.

                  If the principal amount of any Lessor Note is considered paid
under Section 5.1 hereof, it ceases to be outstanding and interest on it ceases
to accrue.

                  If the Paying Agent holds, on a redemption date or maturity
date, money sufficient to pay Lessor Notes payable on that date, then on and
after that date such Lessor Notes shall be deemed to be no longer outstanding
and shall cease to accrue interest.

SECTION 2.16               TREASURY LESSOR NOTES

                  In determining whether the Noteholders of the required
principal amount of Lessor Notes have concurred in any direction, waiver or
consent, Lessor Notes owned by the Owner Lessor, or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Owner Lessor shall be considered as though not outstanding,
except that for the purposes of determining whether the Lease Indenture Trustee
shall be protected in relying on any such direction, waiver or consent, only
Lessor Notes that the Lease Indenture Trustee knows are so owned shall be so
disregarded.

SECTION 2.17               [RESERVED]

SECTION 2.18               CANCELLATION

                  The Owner Lessor at any time may deliver Lessor Notes to the
Lease Indenture Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Lease Indenture Trustee any Lessor Notes surrendered to them for
registration of transfer, exchange or payment. The Lease Indenture Trustee and
no one else shall cancel all Lessor Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Lessor Notes (subject to the record retention requirement of the
Exchange Act). Certification of the destruction of all canceled Lessor Notes
shall be delivered (at the expense of the Owner Lessor) to the Owner Lessor. The
Owner Lessor may not issue New Lessor Notes to replace Lessor Notes that it has
paid or that have been delivered to the Lease Indenture Trustee for
cancellation.

SECTION 2.19               DEFAULTED INTEREST

                  If the Owner Lessor defaults in a payment of interest on the
Lessor Notes, it shall pay the defaulted interest in any lawful manner plus, to
the extent lawful, interest payable on the defaulted

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interest, to the Noteholders on a subsequent special record date, in each
case at the rate provided in the Lessor Notes and in Section 5.1 hereof. The
Owner Lessor shall notify the Security Agent and the Lease Indenture Trustee
in writing of the amount of defaulted interest proposed to be paid on each
Lessor Note and the date of the proposed payment. The Owner Lessor shall fix
or cause to be fixed each such special record date and payment date, PROVIDED
that no such special record date shall be less than 10 days prior to the
related payment date for such defaulted interest. At least 15 days before the
special record date, the Owner Lessor (or, upon the written request of the
Owner Lessor, the Lease Indenture Trustee in the name and at the expense of
the Owner Lessor) shall mail or cause to be mailed to Noteholders a notice
that states the special record date, the related payment date and the amount
of such interest to be paid.

SECTION 2.20               [RESERVED]

SECTION 2.21               ASSUMPTION OF LESSOR NOTES

         (a) Upon the occurrence of an Assumption Event, the Facility Lessee may
notify the Security Agent and the Lease Indenture Trustee of its intention to
assume all of the Lessor Notes in whole (but not in part) pursuant to and in
accordance with this Section 2.21. In the event of the occurrence of an
Assumption Event and provided each of the conditions set forth below have been
satisfied, all of the obligations and liabilities of the Owner Lessor under this
Lease Indenture and each Lessor Note shall be assumed by the Facility Lessee and
the Owner Lessor shall be released and discharged without further act or
formality whatsoever from all obligations and liabilities under this Lease
Indenture and each Lessor Note:

                  (i) no Lease Event of Default shall have occurred
         and be continuing after giving effect to such assumption;

                  (ii) the Lease Indenture Trustee shall have received a
         supplement to this Lease Indenture which shall, among other things, (A)
         confirm the release of the Owner Lessor thereby effected and (B)
         contain provisions appropriately amending this Lease Indenture: (1) to
         reflect the fact that the obligations of the Owner Lessor under this
         Lease Indenture have been assumed directly by the Facility Lessee, (2)
         to incorporate herein such provisions from the Facility Lease, the
         Facility Site Lease and the Participation Agreement as shall be
         appropriate, including covenants substantially identical to those set
         forth in the Facility Lease and (3) as otherwise necessary to reflect
         the foregoing provisions and preserve, protect and maintain the Lien on
         the Indenture Estate (such supplement, the "ASSUMPTION AGREEMENT");

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                  (iii) the Lease Indenture Trustee shall have received an
         opinion of counsel to the Facility Lessee (with customary
         qualifications and limitations and otherwise reasonably satisfactory to
         the Lease Indenture Trustee), addressed to the Lease Indenture Trustee
         and the Noteholders of the Lessor Notes, to the effect that (A) the
         Assumption Agreement and each other instrument, document or agreement
         executed and delivered by the Facility Lessee in connection with the
         assumption contemplated by the Assumption Agreement (collectively, the
         "ASSUMPTION DOCUMENTS") have been duly authorized, executed and
         delivered by the Facility Lessee, (B) each Assumption Document and the
         assumption contemplated thereby do not contravene (1) the Organic
         Documents of the Facility Lessee, (2) any contractual obligation of the
         Facility Lessee or (3) Requirements of Law, (C) no Governmental
         Approval is necessary or required in connection with any Assumption
         with any Assumption Document or the assumption contemplated thereby
         (or, if any such Governmental Approval is necessary or required that
         the same has been duly obtained and is final and in full force and
         effect and any period for the filing of notice of rehearing or
         application for judicial review of the issuance of such Governmental
         Approval has expired without any such notice or application having been
         made), (D) each Assumption Document is a legal, valid and binding
         obligation of the Facility Lessee, enforceable in accordance with its
         terms (except as limited by bankruptcy, insolvency or similar laws of
         general application affecting the enforcement of creditors' rights
         generally and equitable principles), (E) unless the Facility Lessee has
         elected to provide to the Lease Indenture Trustee an indemnity against
         the risk that such assumption of the Lessor Notes will cause a Tax
         Event to occur as to any direct or indirect holder of a Lessor Note
         (including any holder of the Bonds), such Assumption Agreement and the
         assumption of the Notes thereunder shall not cause a Tax Event to occur
         as to any direct or indirect holder of any Lessor Note (including any
         Fundco Bondholders) and (F) the lien of this Lease Indenture will
         continue to be a first priority perfected lien on the Indenture Estate;

                  (iv) the Lease Indenture Trustee shall have received copies of
         all Governmental Approvals (if any) referred to in the opinion of
         counsel referred to in clause (iii) above;

                  (v) the Lease Indenture Trustee shall have received UCC lien
         searches, supplemental title reports, opinions and such other evidence
         as may reasonably be required by the Lease Indenture Trustee
         demonstrating that no impairment exists or will exist to the first
         priority perfected lien and security interest in the Undivided
         Interest; and

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                  (vi) the Lease Indenture Trustee shall have received ratings
         letters from each of Moody's and S&P to the effect that the then
         existing rating of the Bonds will not be downgraded as a result of such
         assumption.

         (b) Notice of any assumption of the Lessor Notes shall be given by the
Lease Indenture Trustee to the Noteholders as promptly as practicable after the
Lease Indenture Trustee has received notice thereof in accordance with the first
sentence of section 2.21(a) hereof.

                                   ARTICLE III
                      RECEIPT, DISTRIBUTION AND APPLICATION
                         OF INCOME FROM INDENTURE ESTATE

SECTION 3.1           DISTRIBUTION PRIOR TO LEASE INDENTURE EVENT OF DEFAULT

                  Except as otherwise provided in Section 3.2 or 3.3 of this
Lease Indenture, each installment of Basic Lease Rent and any payment of
Supplemental Lease Rent constituting interest on overdue installments of
Basic Lease Rent or constituting reimbursement for any drawing under the Debt
Service Reserve Letter of Credit received by the Security Agent shall be
deposited into the Security Agent's Account and distributed in the following
order of priority:

                           FIRST, ratably to (i) so much of such amounts as
                  shall be required to pay in full the aggregate principal,
                  accrued interest and other fees and expenses (as well as
                  any interest on overdue principal and, to the extent
                  permitted by Requirements of Law, on overdue interest) then
                  due and payable under the Lessor Notes shall be deposited
                  into the Lessor Notes Payment Account and distributed by
                  the Lease Indenture Trustee or by each Paying Agent and shall
                  be distributed to the Noteholders ratably, without priority
                  of any Noteholder over any other Noteholder, in the
                  proportion that the amount of such payment then due and
                  payable under each such Lessor Note bears to the aggregate
                  amount of the payments then due and payable under all such
                  Lessor Notes and (ii) so much of such amounts as shall be
                  required to reimburse the issuer of the Debt Service
                  Reserve Letter of Credit for any amount drawn thereunder;

                           SECOND, so much of such amounts as shall be
                  required to meet the required balance in the Debt Service
                  Reserve Account pursuant to Section 5.4; and

                           THIRD, the balance, if any, of such amounts
                  remaining in the Lessor Notes Payment Account shall be
                  distributed to the Owner Lessor for distribution by it in
                  accordance with the terms of the Lessor LLC Agreement;
                  PROVIDED, HOWEVER, that if a Lease Indenture Event of Default
                  shall have occurred and be continuing, then such balance shall
                  not be distributed as provided in this clause "THIRD" but
                  shall be held by the Lease Indenture Trustee or the Security
                  Agent, as applicable, as part of the Indenture Estate until
                  the earliest to occur of (i) receipt by the Security Agent of
                  a Notice of Action

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                  stating that all Lease Indenture Events of Default shall have
                  been cured or waived, in which event such balance shall be
                  distributed as provided in this clause "THIRD," or (ii)
                  receipt by the Security Agent of a Notice of Action stating
                  that Section 3.3 hereof shall be applicable, in which event
                  such balance shall be distributed in accordance with the
                  provisions of said Section 3.3.

SECTION 3.2           PAYMENTS FOLLOWING EVENT OF LOSS OR OTHER EARLY
                      TERMINATION

         (a) Except as otherwise provided in Section 3.3 hereof, any payment
received by the Security Agent and deposited into the Security Agent's
Account on account of a redemption of the Lessor Notes shall then be
deposited into the Lessor Notes Payment Account and distributed by the Lease
Indenture Trustee or by each Paying Agent with respect to such redemption
arising pursuant to Article 4 hereof in the following order of priority:
FIRST, as provided in clause "SECOND" of Section 3.3 hereof; (but including
all Make-Whole Premium (if any) due in respect thereof required to be paid in
accordance with Section 4.7 hereof); SECOND, to reimburse such Noteholder (to
the extent not previously reimbursed) for any reasonable out-of-pocket costs
or expenses incurred in connection with such prepayment (including payments
provided for in clause "THIRD" of Section 3.3 hereof); and THIRD, as provided
in clause "THIRD" of Section 3.3 hereof.

         (b) Except as otherwise provided in Section 3.2(a) or 3.3 hereof, any
amounts received directly or indirectly from any Governmental Authority or
insurer or other party not as a result of an Event of Loss or pursuant to any
provision of Section 10.3, Section 10.5 or Section 11 of the Facility Lease
shall be applied as provided in the applicable provisions of the Facility Lease
and, if and to the extent that any portion of such amounts are required to be
held for the account of the Facility Lessee and are not at the time required to
be paid to the Facility Lessee pursuant to the applicable provisions of the
Facility Lease, shall be promptly paid to (if not initially paid directly to the
Security Agent) and, thereafter, held by, the Security Agent as security for the
obligations of the Facility Lessee under the Facility Lease, and at such time as
the Security Agent shall have received written notice from the Facility Lessee
(i) stating that the conditions specified in the Facility Lease for payment of
such amounts to the Facility Lessee shall have been satisfied and (ii) setting
out the portion of such amounts so held by the Security Agent to be paid to the
Facility Lessee, the Security Agent shall pay to the Facility Lessee the amount
specified in such notice.

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SECTION 3.3           PAYMENTS AFTER LEASE INDENTURE EVENT OF DEFAULT

         If, during the continuance of a Lease Indenture Event of Default,
the Security Agent (acting upon a Notice of Action) has elected to pursue
remedies in respect thereof or (b) the entire principal amount of the Lessor
Notes shall have become due and payable as provided herein, all payments (other
than Excepted Payments) received by the Security Agent or the Lease Indenture
Trustee or by each Paying Agent in respect of all amounts (other than Excepted
Payments) held or realized by the Security Agent or the Lease Indenture Trustee
upon, and all other payments or amounts (other than Excepted Payments) held by
the Security Agent or the Lease Indenture Trustee or by each Paying Agent as
part of the Indenture Estate shall be promptly distributed in the following
order of priority:

                           FIRST, to the Lease Indenture Trustee and the
                  Security Agent, so much of such payments or amounts as shall
                  be required to reimburse the Lease Indenture Trustee and the
                  Security Agent for any amounts payable to them under Section
                  8.7 hereof and Section 10.1 of the Participation Agreement
                  and not previously paid;

                           SECOND, ratably paid to (i) so much of such payments
                  or amounts remaining as shall be required to pay in full the
                  aggregate unpaid principal amount of all Lessor Notes and
                  accrued but unpaid interest and premium, if any, thereon to
                  the date of distribution (as well as any interest on overdue
                  principal and, to the extent permitted by Requirements of Law,
                  overdue interest as provided in Section 5.1(b) hereof), shall
                  be distributed to the Noteholders, (ii) all amounts as shall
                  be required to reimburse to the issuer of the Debt Service
                  Reserve Letter of Credit for any drawings thereunder that is
                  due and payable, and if the aggregate amount shall be
                  insufficient to pay all such amounts of (i) and (ii) above in
                  full, such amounts shall be distributed ratably, without
                  priority of any Lease Indenture Secured Party over any other
                  Lease Indenture Secured Party, in the proportion that the
                  aggregate amount due each such Lease Indenture Secured Party
                  under this clause "SECOND" bears to the aggregate amount due
                  to all such Noteholders under this clause "SECOND"; and if the
                  aggregate amount so to be distributed shall be insufficient to
                  pay in full as aforesaid, then such distribution shall be
                  made, ratably, without priority of one Noteholder over any
                  other Noteholder, in the proportion that the aggregate unpaid
                  principal amount of all Lessor Notes held by each such
                  Noteholder, plus the accrued but unpaid interest thereon to
                  the date of distribution, bears to the aggregate unpaid
                  principal amount of

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                  all Lessor Notes, plus the accrued but unpaid interest
                  thereon to the date of distribution;

                           THIRD, to the Noteholders, so much of such payments
                  or amounts as shall be required to reimburse each such
                  Noteholder for any tax, expense, charge or other loss
                  (including, without limitation, all amounts to be expended at
                  the expense of, or charged upon, the tolls, rents, revenues,
                  issues, products and profits of the Indenture Estate pursuant
                  to Section 7.5(b) hereof) incurred by such Noteholder (to the
                  extent reimbursable and not previously reimbursed) under the
                  Operative Documents, including, without limitation, the
                  expenses of any sale, taking or other proceeding, reasonable
                  attorneys' fees and expenses, court costs, and any other
                  expenditures incurred or expenditures or advances made by
                  such Noteholder in the protection, exercise or enforcement of
                  any right, power or remedy or any damages sustained by such
                  Noteholder, liquidated or otherwise, upon such Lease Indenture
                  Event of Default shall be applied by such Noteholder in
                  reimbursement of such expenses; and

                           FOURTH, the balance, if any, of such payments or
                  amounts remaining thereafter shall be paid to the Owner Lessor
                  for distribution in accordance with the terms of the Lessor
                  LLC Agreement.

SECTION 3.4           CERTAIN PAYMENTS

         (a) Except as otherwise provided in this Lease Indenture, any payments
received by the Lease Indenture Trustee or the Security Agent for which
provision as to the application thereof is made in any other Operative Document
shall be applied forthwith to the purpose for which such payment was made in
accordance with the terms of such Operative Document.

         (b) The Owner Lessor hereby agrees that if, at any time during the term
of this Lease Indenture, it receives from the Facility Lessee or any Affiliate
of the Facility Lessee any amount or payment (other than Excepted Payments)
described in Section 3.4(c) hereof, it shall hold such amount of payment in
trust for the benefit of the Security Agent and promptly pay such amount of
payment to the Security Agent. The Owner Lessor further aggress that the
obligation to remit such amount or payment shall be secured by this Lease
Indenture.

         (c) Any payment of Supplemental Lease Rent received by the Owner
Participant or the Security Agent pursuant to the fourth sentence of Section 7.2
hereof shall, so long as no Lease Indenture Event of Default shall have occurred
and be continuing, and except to the extent applied as provided in Section 3.3
hereof, be

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retained by, or promptly distributed to, the Owner Participant. Notwithstanding
anything to the contrary in this Section 3 or any of the Operative Documents and
without regard to whether a Lease Indenture Event of Default shall have occurred
and be continuing, all Excepted Payments received by the Security Agent shall be
paid by the Security Agent forthwith to the Person or Persons entitled thereto.

SECTION 3.5           OTHER PAYMENTS

                  Any payments in respect of the Indenture Estate received by
the Security Agent no provision for the application of which is made in the
Facility Lease or in another Operative Document or elsewhere in this Indenture
shall (i) to the extent received or realized at any time prior to the payment in
full of all obligations to the Noteholders or to the issuer of the Debt Service
Reserve Letter of Credit secured by the Lien of this Lease Indenture, be
deposited into the Lease Indenture Trustee's Account, and thereafter applied to
the payment of principal, interest, Make-Whole Premium or other amounts as and
when such principal, interest, Make-Whole Premium or other amounts come due
pursuant to priority "FIRST" specified in Section 3.1 hereof or, if applicable
at such time, pursuant to Section 3.2 or 3.3 hereof and (ii) to the extent
received or realized at any time after payment in full of all obligations to the
Noteholders or to the issuer of the Debt Service Reserve Letter of Credit
secured by the Lien of this Lease Indenture, in the following order of priority:
FIRST, to reimburse the Lease Indenture Trustee and the Security Agent (to the
extent not previously reimbursed) for any reasonable out-of-pocket costs or
expenses to which it is entitled to reimbursement pursuant to an Operative
Document; and SECOND, in the manner provided in clause "FOURTH" of Section 3.3
hereof.

SECTION 3.6           MANNER OF PAYMENT TO THE OWNER LESSOR

                  Any amounts distributed hereunder by the Security Agent to the
Owner Lessor shall be paid by the Security Agent to the Owner Lessor by wire
transfer of funds of the type received by the Security Agent at such offices and
to such account or accounts of such entity or entities as shall be designated in
advance by written notice from the Owner Lessor to the Security Agent from time
to time. The Security Agent shall, whether or not the Lien of this Lease
Indenture shall have been discharged in accordance herewith, act as paying agent
for the Owner Lessor, in connection with the Security Agent's duties to make
distributions to or for the benefit of the Owner Lessor pursuant to this Section
3 and to accept all revenues, payments, securities, investments and other
amounts received by the Security Agent and to be distributed to the Owner Lessor
pursuant thereto or held in trust for the benefit of the Owner Lessor pursuant
to the terms of this Lease Indenture. The Owner Lessor hereby notifies and
instructs the Security Agent that unless and until the Security Agent receives
written notice to the contrary from the Owner Lessor, all amounts to

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be distributed to the Owner Lessor pursuant to clause "SECOND" of Section 3.1
hereof shall be distributed by wire transfer of funds of the type received by
the Security Agent to the Owner Participant. In the event that the Security
Agent is unable to distribute any amounts to the Owner Lessor or the Owner
Participant on the same day such amounts are received by the Security Agent, the
Security Agent agrees that such amounts shall be held in trust for the benefit
of the Owner Lessor or the Owner Participant, as the case may be, and shall be
invested by the Security Agent for and at the expense and risk of the Owner
Lessor or the Owner Participant, as the case may be, in Permitted Investments
identified in written instructions to the Security Agent from the Owner Lessor
or the Owner Participant, as the case may be, if such investments are reasonably
available.

SECTION 3.7           ESTABLISHMENT OF THE NOTE ACCOUNTS; AND LIEN AND SECURITY
                      INTEREST; ETC.

         (a) The Security Agent hereby confirms that it has established
securities accounts entitled the "SECURITY AGENT'S ACCOUNT" (the "SECURITY
AGENT'S ACCOUNT") and "LESSOR NOTES PAYMENT ACCOUNT" (the "LESSOR NOTES PAYMENT
ACCOUNT", collectively with the Security Agent's Accounts, the "NOTE ACCOUNTS")
which Note Accounts shall be maintained by the Account Bank until the date this
Lease Indenture is terminated pursuant to Section 12.1 hereof. The account
number of the Note Accounts established hereunder is specified in Schedule II
hereto. The Note Accounts shall not be evidenced by passbooks or similar
writings.

         (b) All amounts from time to time held in the Note Accounts shall be
maintained (i) in the name of the Owner Lessor subject to the lien and security
interest of the Security Agent for the benefit of the Lease Indenture Secured
Parties as set forth herein and (ii) in the custody of the Security Agent for
and on behalf of the Security Agent for the benefit of the Secured Parties for
the purposes and on the terms set forth in this Lease Indenture. All such
amounts shall constitute a part of the Note Accounts Collateral and shall not
constitute payment of any Indebtedness or any other obligation of the Owner
Lessor until applied as hereinafter provided.

         (c) As collateral security for the prompt payment in full when due of
the Lessor's Secured Obligations owed to the Lease Indenture Secured Parties,
the Owner Lessor hereby pledges, assigns, hypothecates and transfers to the
Security Agent for the benefit of the Lease Indenture Secured Parties, and
hereby grants to the Security Agent for the benefit of the Lease Indenture
Secured Parties, a lien on and security interest in and to (i) the Note Accounts
and any successor account thereto and (ii) all cash, investments, investment
property, securities or other property at any time on deposit in or credited to
the Note Accounts, including all income or gain earned thereon and any proceeds
thereof (the "NOTE ACCOUNTS COLLATERAL").

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SECTION 3.8           THE ACCOUNT BANK; LIMITED RIGHTS OF THE OWNER LESSOR

         (a)      THE ACCOUNT BANK.

                  (i) ESTABLISHMENT OF SECURITIES ACCOUNT. The Security Agent
         hereby agrees and confirms that (A) that it has established the Note
         Accounts as set forth in Section 3.7, (B) Note Accounts are and each
         will be maintained as a "SECURITIES ACCOUNT" (within the meaning of
         Section 8-501 (a) of the UCC), (C) the Owner Lessor is the "ENTITLEMENT
         HOLDER" (within the meaning of Section 8-102(a)(7) of the UCC) in
         respect of the "FINANCIAL ASSETS" (within the meaning of Section
         8-102(a)(9) of the UCC) credited to each Note Account, (D) all property
         delivered to the Security Agent pursuant to this Lease Indenture or any
         other Operative Document will be held by the Security Agent and
         promptly credited to each Note Account by an appropriate entry in its
         records in accordance with this Lease Indenture, (E) all "FINANCIAL
         ASSETS" (within the meaning of Section 8-102(a)(9) of the UCC) in
         registered form or payable to or to the order of and credited to each
         Note Account shall be registered in the name of, payable to or to the
         order of, or indorsed to, the Security Agent or in blank, or credited
         to another securities account maintained in the name of the Security
         Agent, and in no case will any financial asset credited to any of the
         Note Accounts be registered in the name of, payable to or to the order
         of, or indorsed to, the Owner Lessor except to the extent the foregoing
         have been subsequently indorsed by the Owner Lessor to the Account Bank
         or in blank and (F) the Security Agent shall not change the name or
         account number of the Security Agent's Account without the prior
         written consent of the Security Agent.

                  (ii) FINANCIAL ASSETS ELECTION. The Security Agent agrees that
         each item of property (including any security, instrument or
         obligation, share, participation, interest or other property
         whatsoever) credited to the Security Agent's Account shall be treated
         as a "FINANCIAL ASSET" within the meaning of Section 8-102(a)(9) of the
         UCC.

                  (iii) ENTITLEMENT ORDERS. Notwithstanding anything in this
         Lease Indenture to the contrary, if at any time the Security Agent
         shall receive any "ENTITLEMENT ORDER" (within the meaning of Section
         8-102(a)(8) of the UCC) or any other order directing the transfer or
         redemption of any financial asset relating to the Security Agent's
         Account, the Security Agent shall comply with such entitlement order or
         other order without further consent by the Owner Lessor or any other
         Person. The parties hereto hereby agree that the Security Agent shall
         have "CONTROL" (within the meaning of Section 8-106(d) of the UCC) of
         the Owner Lessor's "SECURITY ENTITLEMENTS"

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<Page>

         (within the meaning of Section 8-102(a)(17) of the UCC) with respect to
         the financial assets credited to the Security Agent's Account and the
         Owner Lessor hereby disclaims any entitlement to claim "CONTROL" of
         such "SECURITY ENTITLEMENTS". Unless a Lease Indenture Event of Default
         shall have occurred and is continuing, the Lease Indenture Trustee
         shall not deliver any entitlement order directing the transfer or
         redemption of any financial asset relating to the Security Agent's
         Account.

                  (iv) SUBORDINATION OF LIEN; WAIVER OF SET-OFF. In the event
         that the Security Agent has or subsequently obtains by agreement,
         operation of law or otherwise a lien or security interest in the
         Security Agent's Account or any security entitlement credited thereto,
         the Security Agent agrees that such lien or security interest shall be
         subordinate to the lien and security interest of the Security Agent for
         the benefit of the Lease Indenture Secured Parties. The financial
         assets standing to the credit of the Lease Indemnitee's Lease Indenture
         Trustee's Account will not be subject to deduction, set-off, banker's
         lien, or any other right in favor of any Person other than the Security
         Agent for the benefit of the Lease Indenture Secured Parties (except
         for the face amount of any checks which have been credited to the Note
         Accounts but are subsequently returned unpaid because of uncollected or
         insufficient funds).

                  (v) NO OTHER AGREEMENTS. The Security Bank and the Owner
         Lessor have not entered into any agreement with respect to the Note
         Accounts or any financial assets credited to the Note Accounts other
         than this Lease Indenture. The Security Agent has not entered into any
         agreement with the Owner Lessor or any other Person purporting to limit
         or condition the obligation of the Security Agent to comply with
         entitlement orders originated by the Security Agent in accordance with
         Section 3.8(a)(iii) hereof. In the event of any conflict between this
         Section 3.8 or any other agreement now existing or hereafter entered
         into, the terms of this Section 3.8 shall prevail.

                  (vi) NOTICE OF ADVERSE CLAIMS. Except for the claims and
         interest of the Security Agent for the benefit of the Lease Indenture
         Secured Parties and the Owner Lessor in the Note Accounts, the Security
         Agent does not know of any claim to, or interest in, the Note Accounts
         or in any financial asset credited thereto. If any Person asserts any
         lien, encumbrance or adverse claim (including any writ, garnishment,
         judgment, warrant of attachment, execution or similar process) against
         the Note Accounts or in any financial asset credited thereto, the
         Security Agent will promptly notify the Security Agent and the Owner
         Lessor in writing thereof.

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                  (vii) RIGHTS AND POWERS OF THE SECURITY AGENT. The rights and
         powers granted by the Lease Indenture Secured Parties to the Security
         Agent have been granted in order to perfect its lien and security
         interests in the Security Agent's Account, are powers coupled with an
         interest and will neither be affected by the bankruptcy of the Owner
         Lessor nor the lapse of time.

         (b) LIMITED RIGHTS OF THE OWNER LESSOR. The Owner Lessor shall not have
any rights against or to monies held in the Note Accounts, as third party
beneficiary or otherwise, or any right to direct the Security Agent or the
Security Agent to apply or transfer monies in the Note Accounts, except the
right to receive or make requisitions of monies held by the Security Agent and
to direct investments of monies as provided in Section 3.10 hereof, as provided
in this Lease Indenture. Except as provided in this Lease Indenture, in no event
shall any amounts or Cash Equivalent Investments deposited in or credited to the
Note Accounts be registered in the name of the Owner Lessor, payable to the
order of the Owner Lessor or specially indorsed to the Owner Lessor except to
the extent that the foregoing have been specially indorsed to the Security Agent
or in blank.

SECTION 3.9           EXERCISE OF POWERS; INSTRUCTIONS OF REQUIRED LEASE
                      INDENTURE SECURED PARTIES.

                  (a) All of the powers, remedies and rights of the Security
Agent set forth in or contemplated by this Agreement may be exercised by the
Security Agent as though set forth in full herein, and all of the powers,
remedies and rights of the Security Agent and the Lease Indenture Secured
Parties as set forth herein.

                  (b) Following the delivery of a direction of acceleration
under Section 7.4 hereof to the Security Agent, during any Event of Default, the
Required Lease Indenture Secured Parties may deliver a "NOTICE OF ACTION" to the
Security Agent directing the Security Agent to exercise one or more of the
rights and remedies available to the Security Agent under this Lease Indenture.
The Security Agent shall deliver to each Lease Indenture Secured Party a copy of
such Notice of Action promptly after receipt thereof. The Security Agent shall
exercise the rights and remedies and take the other actions described in such
Notice of Action at the time or times specified in such Notice of Action.

                  (c) All Proceeds of the Indenture Estate received by the
Security Agent from the exercise of its rights and remedies under this Lease
Indenture shall be applied as set forth in Article 3 hereof.

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<Page>

SECTION 3.10               INVESTMENT OF AMOUNTS HELD BY LEASE INDENTURE
                           TRUSTEE.

                  Any amounts held by the Security Agent pursuant to the
proviso to clause "SECOND" of Section 3.1 hereof, pursuant to Section 3.2 or
Section 3.3 hereof, or pursuant to Section 10 or 11 of the Facility Lease
shall be invested by the Security Agent from time to time in Permitted
Investments identified in written instructions to the Security Agent from the
Owner Lessor, at the expense of the Owner Lessor, if such investments are
reasonably available. Unless otherwise expressly provided in this Lease
Indenture, any income realized as a result of any such investment, net of the
Security Agent's reasonable fees and expenses in making such investment,
shall be held and applied by the Security Agent in the same manner as the
principal amount of such investment is to be applied, and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Security Agent shall not be liable for any
loss resulting from any investment required to be made by it under this Lease
Indenture other than by reason of its willful misconduct or gross negligence
as determined by a court of competent jurisdiction in receiving, handling or
disbursing funds, and any such investment may be sold (without regard to its
maturity) by the Security Agent without instructions whenever it reasonably
believes such sale is necessary to make a distribution required by this Lease
Indenture.

                                   ARTICLE IV
                            REDEMPTION AND PREPAYMENT

SECTION 4.1                NOTICES TO LEASE INDENTURE TRUSTEE

                  If the Owner Lessor elects to redeem Lessor Notes pursuant
to the redemption provisions of Section 4.7 or 4.8 hereof, it shall furnish
to the Lease Indenture Trustee, the Security Agent, and for so long as the
Bonds are outstanding, the Bondholder Trustee at least 30 days but not more
than 60 days before a redemption date, an Officer's Certificate setting forth
(i) the clause of this Lease Indenture pursuant to which the redemption shall
occur, (ii) the redemption date, (iii) the principal amount of Lessor Notes
to be redeemed and (iv) the redemption price.

SECTION 4.2                SELECTION OF LESSOR NOTES TO BE REDEEMED

                  If less than all of the Lessor Notes are to be redeemed at
any time, the Lease Indenture Trustee shall select the Lessor Notes to be
redeemed among the Noteholders of the Lessor Notes in compliance with the
requirements of the principal national securities exchange, if any, on which
the Lessor Notes are listed or, if the Lessor Notes are not so listed, on a
PRO RATA basis, by lot or in accordance with any other method the Lease
Indenture Trustee considers fair and appropriate. In the

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event of partial redemption by lot, the particular Lessor Notes to be
redeemed shall be selected, unless otherwise provided herein, not less than
30 nor more than 60 days prior to the redemption date by the Lease Indenture
Trustee from the outstanding Lessor Notes not previously called for
redemption.

                  The Lease Indenture Trustee shall promptly notify the Owner
Lessor and the Security Agent of the Lessor Notes selected for redemption
and, in the case of any Lessor Note selected for partial redemption, the
principal amount thereof to be redeemed. Lessor Notes and portions of Lessor
Notes selected shall be in amounts of $100,000 or whole multiples of $1,000
in excess thereof; except that if all of the Lessor Notes of a Noteholder are
to be redeemed, the entire outstanding amount of Lessor Notes held by such
Noteholder, even if not in the amount of $100,000 or a multiple of $1,000 in
excess thereof, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Lease Indenture that apply to Lessor Notes
called for redemption also apply to portions of Lessor Notes called for
redemption.

SECTION 4.3                NOTICE OF REDEMPTION

                  At least 30 days but not more than 60 days before a
redemption date, the Owner Lessor shall mail or cause to be mailed, by first
class mail, a notice of redemption to each Noteholder whose Lessor Notes are
to be redeemed at its registered address and, for as long as the Bonds are
outstanding, the Bondholder Trustee and each holder of the Bonds
corresponding to the tenor and the principal amount of the Lessor Notes being
redeemed.

                  The notice shall identify the Lessor Notes to be redeemed
and shall state:

         (a)      the redemption date;

         (b)      the redemption price;

         (c) if any Lessor Note is being redeemed in part, the portion of the
principal amount of such Lessor Note to be redeemed and that, after the
redemption date upon surrender of such Lessor Note, a new Lessor Note or
Lessor Notes in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Lessor Note;

         (d)      the name and address of the Paying Agent;

         (e)      that Lessor Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;

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         (f) that, unless the Owner Lessor defaults in making such redemption
payment, interest on Lessor Notes called for redemption ceases to accrue on
and after the redemption date;

         (g)      the paragraph of the Lessor Notes and/or Section of this
Lease Indenture pursuant to which the Lessor Notes called for redemption are
being redeemed; and

         (h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Lessor
Notes.

                  At the Owner Lessor's request, the Lease Indenture Trustee
shall give the notice of redemption in the Owner Lessor's name and at its
expense; PROVIDED, HOWEVER, that the Owner Lessor shall have delivered to the
Lease Indenture Trustee, at least 45 days prior to the redemption date (or
such shorter time period acceptable to the Lease Indenture Trustee), an
Officer's Certificate requesting that the Lease Indenture Trustee give such
notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.

SECTION 4.4                EFFECT OF NOTICE OF REDEMPTION

                  Once notice of redemption is mailed in accordance with
Section 4.3 hereof, Lessor Notes (and the Bonds corresponding to the tenor
and principal amount of such Lessor Notes) called for redemption become
irrevocably due and payable on the redemption date at the redemption price. A
notice of redemption may not be conditional.

SECTION 4.5                DEPOSIT OF REDEMPTION PRICE

                  One Business Day prior to the redemption date, the Security
Agent shall deposit with the Lease Indenture Trustee or with the Paying Agent
into the Lessor Notes Payment Account money sufficient to pay the redemption
price of and accrued interest on all Lessor Notes to be redeemed on that
date. The Lease Indenture Trustee or the Paying Agent shall promptly return
to the Owner Lessor any money deposited with the Lease Indenture Trustee or
the Paying Agent by the Owner Lessor in excess of the amounts necessary to
pay the redemption price of, and accrued interest on, all Lessor Notes to be
redeemed.

                  If the Owner Lessor complies with the provisions of the
preceding paragraph, on and after the redemption date, interest shall cease
to accrue on the Lessor Notes or the portions of Lessor Notes called for
redemption. If a Lessor Note is redeemed on or after an interest record date
but on or prior to the related interest payment date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Lessor Note
was registered at the close of business on such record

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date. If any Lessor Note called for redemption shall not be so paid upon
surrender for redemption because of the failure of the Owner Lessor to comply
with the preceding paragraph, interest shall be paid on the unpaid principal,
from the redemption date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each case at the
rate provided in the Lessor Notes and in Section 5.1 hereof.

SECTION 4.6                LESSOR NOTES REDEEMED IN PART

                  Upon surrender of a Lessor Note that is redeemed in part,
the Owner Lessor shall issue and, upon receipt of an Authentication Order,
the Lease Indenture Trustee shall authenticate for the Noteholder at the
expense of the Owner Lessor a new Lessor Note equal in principal amount to
the unredeemed portion of the Lessor Note surrendered.

SECTION 4.7                OPTIONAL REDEMPTION

                  The Lessor Notes shall be subject to optional redemption at
any time at a Redemption Price equal to the outstanding principal amount of
the Lessor Notes to be redeemed plus all accrued and unpaid interest thereon
to the Redemption Date, plus the Make-Whole Premium, if any.

SECTION 4.8                MANDATORY REDEMPTION

                  The Lessor Notes will be subject to mandatory redemption
upon the occurrence of a Recovery Event with respect to the Facility, other
than with respect to amounts received by the Owner Lessor in connection with
a Recovery Event for which the Facility Lessee elects to restore or replace
the asset or assets in respect of which such Recovery Event occurred and a
Reinvestment Notice is provided by the Facility Lessee to the Owner
Participant, the Collateral Agent and the Lease Indenture Trustee within 45
days of such Recovery Event (provided that, with respect to any Recovery
Event of $50 million or more, the Independent Engineer shall have certified
as to the reasonableness, in light of Prudent Industry Practice, of the
Facility Lessee's repair and replacement plans as set forth in the Facility
Lessee's Reinvestment Notice relating to such Recovery Event). Any mandatory
redemption of the Lessor Notes will be without premium or penalty at a
Redemption Price equal to the unpaid principal amount thereof plus accrued and
unpaid interest thereon to the Redemption Date.

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                                    ARTICLE V
                                    COVENANTS

SECTION 5.1                PAYMENT OF LESSOR NOTES

                  The Owner Lessor hereby covenants and agrees as follows:

         (a) The Owner Lessor will duly and punctually pay the principal of
and interest on and other amounts (including any Make-Whole Premium) due
under the Lessor Notes and this Lease Indenture in accordance with the terms
hereof and thereof and all amounts payable by it to the Lease Indenture
Trustee, the Noteholders and the issuer of the Debt Service Reserve Letter of
Credit under any other Operative Document. Principal, premium, if any, and
interest shall be considered paid on the date due if the Security Agent holds
as of 10:00 A.M. Eastern time on the due date, money deposited by, or at the
direction of the Owner Lessor, in immediately available funds and designated
for and sufficient to pay all principal, premium, if any, and interest then
due;

         (b) The Owner Lessor shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Code) on overdue principal at
the rate equal to 1% per annum in excess of the then applicable interest rate
on the Lessor Notes to the extent lawful; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Code) on
overdue installments of interest (without regard to any applicable grace
period) at the same rate to the extent lawful.

         (c) In the event that the Independent Manager of the Owner Lessor
shall have actual knowledge of a Lease Indenture Event of Default or a Lease
Indenture Default, the Owner Lessor will give prompt written notice of such
Lease Indenture Event of Default or Lease Indenture Default to the Facility
Lessee, the Owner Participant, the Lease Indenture Trustee (and the Lease
Indenture Trustee shall thereupon promptly deliver a copy of such notice to
each Noteholder and the Security Agent); and

                  (i) in the event that an Authorized Officer of the Owner
         Lessor shall have actual knowledge of an Event of Loss, then, to the
         extent that the Facility Lessee is not required, pursuant to the
         Facility Lease, to give notice of such event to the Lease Indenture
         Trustee and the Security Agent, the Owner Lessor will give prompt
         written notice of such Event of Loss to the Lease Indenture Trustee
         (and the Lease Indenture Trustee shall thereupon promptly deliver a
         copy of such notice to each Noteholder) and the Security Agent; and

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                  (ii) the Owner Lessor will furnish to the Lease Indenture
         Trustee and the Security Agent true and correct duplicates or copies of
         all reports, notices, requests, demands, certificates, financial
         statements and other instruments furnished to the Owner Lessor under
         the Facility Lease, to the extent that the same shall not have been (or
         are not required to be) furnished to the Lease Indenture Trustee, the
         Noteholders, or the Security Agent pursuant to the Facility Lease or
         the Participation Agreement.

         (d) Except as contemplated by the Operative Documents, the Owner
Lessor will not incur any Indebtedness or engage in any business activity
except with the prior written consent of the Lease Indenture Trustee and
acting on the instructions of the Required Holders.

SECTION 5.2                STAY, EXTENSION AND USURY LAWS

                  The Owner Lessor covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Lease
Indenture; and the Owner Lessor (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Security Agent or the
Lease Indenture Trustee, but shall suffer and permit the execution of every
such power as though no such law had been enacted.

SECTION 5.3                PAYMENTS FOR CONSENT

                  The Owner Lessor shall not directly or indirectly, pay or
cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Noteholder for or as an inducement to any consent, waiver
or amendment of any of the terms or provisions of this Lease Indenture or the
Lessor Notes unless such consideration is offered to be paid or is paid to
all Noteholders of the Lessor Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such
consent, waiver or agreement.

SECTION 5.4                DEBT SERVICE RESERVE ACCOUNT

                  The Owner Lessor shall establish and, so long as any Lessor
Notes and Bonds remain outstanding, maintain with the Security Agent the Debt
Service Reserve Account. On the Closing Date and on any date on which a
payment is made pursuant to Section 6.9 of the Participation Agreement, the
Debt Service Reserve Amount on such date of determination will be 100% of the
projected debt service on

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the Lessor Notes for the succeeding six-month period, and may be satisfied by
one or a combination of the following: (i) cash or (ii) a letter of credit
issued by a bank or trust company that constitutes Acceptable Credit Support.
Withdrawal of funds from the Debt Service Reserve Account or a draw on the
letter of credit issued pursuant to this Section 5.4 following a Lease Event
of Default remitting from failure to pay any Basic Lease Rent or Supplemental
Lease Rent when due, shall be deemed to be an exercise of the Owner Lessor of
its rights under Section 7.2 hereof (other than clause (i) of the last
proviso of the last sentence of Section 7.2). Any deposit made by the Owner
Lessor into the Debt Service Reserve Account and any re-instatement of the
Debt Service Reserve Letter of Credit other than in connection with the
payment by the Facility Lessee of the related overdue Rent shall be deemed to
be an exercise by the Owner Lessor of its rights under Section 7.2 hereof for
purposes of clause (i) of the last proviso of the last sentence of Section
7.2.

                                   ARTICLE VI
                                   SUCCESSORS

SECTION 6.1                LIMITATION ON MERGER, CONSOLIDATION AND SALE OF
                           SUBSTANTIALLY ALL ASSETS

                  The Owner Lessor shall not, directly or indirectly,
consolidate or merge with or into any other person (whether or not the Owner
Lessor is the surviving corporation), or sell, assign, convey, lease,
transfer or otherwise dispose of, all or substantially all of its properties
or assets in one or a series of transactions, to any Person or Persons.

                                   ARTICLE VII
                LEASE INDENTURE EVENTS OF LEASE INDENTURE DEFAULT

SECTION 7.1                LEASE INDENTURE EVENTS OF LEASE INDENTURE DEFAULT

                  "LEASE INDENTURE EVENT OF DEFAULT" means any of the
following events (whatever the reason for such Lease Indenture Event of
Default and whether such event shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or regulation
of any Governmental Authority):

         (a) any Lease Event of Default (other than with respect to (x) a
Rent Default Event, (y) Excepted Payments unless the Facility Lease has been
declared in default by the Owner Lessor or (z) the failure of the Facility
Lessee to maintain insurance in the amounts and on the terms set forth in the
Operative Documents so long as the insurance actually maintained by the
Facility Lessee is in accordance with Prudent Industry Practice and such
Lease Event of Default is waived by the Owner Lessor and the
Owner Participant) shall have occurred and be continuing; or

         (b) default of the Owner Lessor for 15 days in the payment when due any
(i) payment of principal of, premium (including, without limitation, Make-Whole
Premium), if any, or interest on, or any scheduled fees within fifteen days
after the same shall become due or (ii) other amounts due and payable by the
Owner Lessor under or with respect to, any Lessor Note and such failure shall
continue for thirty days after receipt by the Owner Lessor of written demand
therefore from the Security Agent; or

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         (c) any material representation or warranty made by the Owner
Participant or the Owner Lessor in this Lease Indenture or in any other
Operative Document to which it is a party shall prove to have been inaccurate
when made or deemed made in any material respect or by any OP Guarantor in
its OP Guaranty (provided the OP Guaranty shall not have been terminated or
released), as the case may be, and such misrepresentation or breach of
warranty remains material and shall not have been corrected within a period
of 30 days following written notice thereof being given to the Owner Lessor
and the Owner Participant or such OP Guarantor, as the case may be, by any
Noteholder (through the Lease Indenture Trustee); PROVIDED that, if such
misrepresentation or breach of warranty is capable of correction but cannot
with diligence be corrected within such 30-day period, such failure will not
constitute a Lease Indenture Event of Default so long as the party whose
representation or warranty was inaccurate promptly institutes corrective
action within such 30-day period and diligently pursues such corrective
action (but in no event shall the total period permitted to correct such
misrepresentation or breach of warranty extend beyond 120 days from the date
such notice was provided), or

         (d) any failure (i) by the Owner Lessor to observe, perform or
comply with the provisions of any material covenant or obligation of the
Owner Lessor contained in this Lease Indenture or in any Operative Document
to which it is a party (other than as provided in clause (a) above) in any
material respect or (ii) by the Owner Participant to observe or perform any
material covenant or obligation of the Owner Participant contained in any
Operative Document (other than the Tax Indemnity Agreement) to which it is a
party or (iii) by any OP Guarantor to observe or any material covenant or
obligation of such OP Guarantor contained in any OP Guaranty (provided the OP
Guaranty shall not have been terminated or released); and such covenant
remains material and such failure shall not have been cured within a period
of 30 days following written notice thereof being given to the Owner Lessor
and the Owner Participant, as the case may be, by any Noteholder (through the
Lease Indenture Trustee); PROVIDED that, if such failure is capable of cure
but cannot with diligence be cured within such 30-day period, such failure
will not constitute a Lease Indenture Event of Default so long as the party
failing to observe or perform such covenant promptly institutes corrective
action within such 30-day period and diligently pursues such corrective
action (but in no event shall the total period permitted to cure such failure
extend beyond 180 days from the date such notice was provided);

         (e) the Owner Participant, any OP Guarantor (provided the OP
Guaranty shall not have been terminated or released) or the Owner Lessor
shall (i) voluntarily commence any proceeding or file any petition seeking
relief under Bankruptcy Code or any other federal, state or foreign
bankruptcy, insolvency or similar law, (ii) consent to the institution of, or
fail to controvert in a timely and appropriate manner, any such proceeding or
the filing of any such petition, (iii) apply for or consent to the

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appointment of a receiver, trustee, custodian, sequestrator or similar
official for the Owner Lessor, such OP Guarantor (provided the OP Guaranty
shall not have been terminated or released) the Owner Participant or any
substantial part of the property of any of the foregoing, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors, (vi)
become unable, admit in writing its inability or fail generally to pay its
debts as they become due, or (vii) take corporate action for the purpose of
effecting any of the foregoing; or

         (f) an involuntary proceeding is commenced or an involuntary
petition is filed in a court of competent jurisdiction seeking (i) relief in
respect of the Owner Participant, any OP Guarantor (provided the OP Guaranty
shall not have been terminated or released) or the Owner Lessor under
Bankruptcy Code or any other federal, state or foreign bankruptcy, insolvency
or similar law now or hereafter in effect, (ii) the appointment of a
receiver, Lease Indenture Trustee, custodian, sequestrator or similar
official for the Owner Participant, such OP Guarantor (provided the OP
Guaranty shall not have been terminated or released) or the Owner Lessor or
any substantial part of the property of the foregoing or (iii) the winding-up
or liquidation of the Owner Participant, such OP Guarantor (provided the OP
Guaranty shall not have been terminated or released) or the Owner Lessor and
such proceeding or petition continues undismissed for 60 days or an order or
decree approving or ordering any of the foregoing continues unstayed and in
effect for 60 days.

         (g) If Owner Lessor shall give any notice pursuant to 42 Pa.C.S.
Section 8143(c) or otherwise to terminate the operation of this Mortgage as
security for future advances or future obligations made or incurred after the
date the Lease Indenture Secured Parties receive such notice, or Owner Lessor
shall take any other similar action for the purpose of limiting or attempting
to limit the operation of this Mortgage as such security; or

SECTION 7.2                CERTAIN RIGHTS TO CURE

         In the event of any Lease Event of Default in the payment of any
installment of Basic Lease Rent or Supplemental Lease Rent (other than with
respect to Excepted Payments) due under the Facility Lease, the Owner Lessor
or the Owner Participant may, but shall not be obligated to, within ten
Business Days, (but with respect to Basic Lease Rent default in no event more
than 15 days after the related Rent Payment Date) after receipt by the Owner
Lessor and Owner Participant of written notice of

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the occurrence of such Lease Default or Lease Event of Default, without the
consent or concurrence of the Security Agent, the Lease Indenture Trustee or
any Noteholder, pay, as provided in Section 2.11 hereof, for application in
accordance with Section 3.1 hereof, the principal of, interest on and other
amounts payable under or in respect of, the Lessor Notes as shall then be due
and payable on the Lessor Notes (without giving effect to any acceleration
pursuant to Section 7.3 hereof). If any other Lease Default or other Lease
Event of Default occurs and the Owner Lessor shall have been furnished (by or
for the account of the Owner Participant) with all funds necessary for
remedying such Lease Default or Lease Event of Default, the Owner Participant
may, within ten Business Days after the earlier of (a) receipt by the Owner
Participant of written notice of or (b) the Owner Participant acquiring
actual knowledge of the occurrence of such Lease Event of Default, without
the consent or concurrence of the Security Agent, the Lease Indenture Trustee
or any Noteholder, instruct the Owner Lessor to exercise the Owner Lessor's
rights under Section 20 of the Facility Lease to perform such obligation on
behalf of the Facility Lessee. Solely for the purpose of determining whether
there exists a Lease Indenture Event of Default, (a) any payment by the Owner
Participant or the Owner Lessor pursuant to, and in compliance with, the
first sentence of this Section 7.2 shall be deemed to remedy (for purposes of
this Lease Indenture) any Lease Default or Lease Event of Default in the
payment of installments of Basic Lease Rent theretofore due and payable and
to remedy any default by the Owner Lessor in the payment of any amount due
and payable under the Lessor Notes or hereunder, and (b) any performance by
the Owner Lessor of any obligation of the Facility Lessee under the Facility
Lease pursuant to, and in compliance with, the second sentence of this
Section 7.2 shall be deemed to remedy (for purposes of this Lease Indenture)
any Lease Default or Lease Event of Default to the same extent that like
performance by the Facility Lessee itself would have remedied such Lease
Event of Default (but any such payment or performance shall not relieve the
Facility Lessee of its duty to pay all Rent and perform all of its
obligations pursuant to the Facility Lease). If, on the basis specified in
the preceding sentence, such Lease Default or Lease Event of Default shall
have been remedied, then any determination that the Facility Lease, and any
declaration pursuant to this Lease Indenture that the Lessor Notes are due
and payable or that a Lease Indenture Default or Lease Indenture Event of
Default exists hereunder, based upon such Lease Default or Lease Event of
Default, shall be deemed to be rescinded, and the Owner Participant shall (to
the extent of any such payments made by or for the account of the Owner
Lessor) be subrogated to the rights of the Noteholders hereunder to receive
such payment of Rent from the Facility Lessee (and the payment of interest on
account of such Rent from the Facility Lessee being overdue), and shall be
entitled, so long as no other Lease Indenture Event of Default shall have
occurred or would result therefrom, to receive and retain such payment from
the Facility Lessee; provided, however, that the Owner Participant shall not,
so long as this Lease Indenture shall not have terminated,

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otherwise attempt to recover any such amount paid by it or for its account on
behalf of the Facility Lessee pursuant to this Section 7.2 except by
demanding of the Facility Lessee payment of such amount or by commencing an
action at law and obtaining and enforcing a judgment against the Facility
Lessee for the payment of such amount or taking appropriate action in a
pending action at law against the Facility Lessee and the Owner Participant
will not obtain any Lien on any part of the Indenture Estate on account of
such payment nor will any claim of the Owner Participant against the Facility
Lessee or any other party for the repayment thereof impair the prior right
and security interest of the Lease Indenture Secured Parties in and to the
Indenture Estate, as the case may be; provided, further, however, that

                  (i) this Section 7.2 shall not apply with respect to any cure
         of any default in the payment of Basic Lease Rent if such cure shall
         have previously been effected with respect to (A) four (4) consecutive
         payments of Basic Lease Rent immediately preceding the date of such
         default, or (B) more than eight (8) payments of Basic Lease Rent;

                  (ii) neither the Owner Lessor nor the Owner Participant shall
         (without a Notice of Action) have the right to cure any Lease Event of
         Default except as specified in this Section 7.2; and

                  (iii) until the expiration of the period during which the
         Owner Lessor shall be entitled to exercise rights under the first and
         second sentence of this Section 7.2 with respect to any failure by the
         Facility Lessee referred to therein, neither the Lease Indenture
         Trustee and the Security Agent nor any Lease Indenture Secured Party
         shall take or commence any action it would otherwise be entitled to
         take or commence as a result of such failure by the Facility Lessee,
         whether under this Section 7 or Section 17 of the Facility Lease or
         otherwise.

SECTION 7.3                ACCELERATION

                  If any Lease Indenture Event of Default (other than a Lease
Indenture Event of Default specified in clause (e) or (f) of Section 7.1 hereof
with respect to the Owner Lessor) occurs and is continuing, the Security Agent
may, and upon written direction of the Noteholders of at least 33-1/3% (in the
case of any Lease Indenture Event of Default specified in clause (b) of Section
7.1 hereof) or 50% (in the case of any other Lease Indenture Event of Default)
in principal amount of the then outstanding Lessor Notes shall, declare, by
written notice to the Owner Lessor, all the Lessor Notes to be due and payable
immediately. Notwithstanding the foregoing, if a Lease Indenture Event of
Default specified in clause, (e) or (f) of Section 7.1 hereof occurs with
respect to the Owner Lessor, all outstanding Lessor Notes shall be due and
payable without further action or notice. Noteholders may

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not enforce this Lease Indenture or the Lessor Notes except as provided in
this Lease Indenture. The Lease Indenture Trustee may withhold from
Noteholders a notice of any continuing Lease Indenture Default or Lease
Indenture Event of Default (except a Lease Indenture Default or Lease
Indenture Event of Default relating to the payment of principal or interest)
if it determines that withholding notice is in their best interest. The
Noteholders of 66 2/3% in aggregate principal amount of the then outstanding
Lessor Notes by notice to the Security Agent may on behalf of all Noteholders
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Lease Indenture
Events of Lease Indenture Default (except nonpayment of principal, interest
or premium that has become due solely because of the acceleration) have been
cured or waived.

                  The Noteholders of a majority (or 66 2/3% in case of a Lease
Indenture Event of Default triggered by the Lease Event of Lease Indenture
Default specified in clause (d)(i) of the Facility Lease, for non-compliance
with SECTION 6.1 of the Participation Agreement) in aggregate principal amount
of the Lessor Notes then outstanding by notice to the Lease Indenture Trustee
may on behalf of the Noteholders of all of the Lessor Notes waive any existing
Lease Indenture Lease Indenture Default or Lease Indenture Event of Default and
its consequences under this Lease Indenture except (i) a continuing Lease
Indenture Default or Lease Indenture Event of Default in the payment of
principal of, premium, if any, or interest on, the Lessor Notes (including in
connection with an offer to purchase) and (ii) a Lease Indenture Event of
Default specified in clause (e) or (f) of Section 7.1 hereof.

SECTION 7.4                OTHER REMEDIES

         (a) If a Lease Indenture Event of Default shall have occurred and so
long as the same shall be continuing unremedied the Security Agent may, if
not precluded by law or otherwise, exercise any or all of the rights and
powers and pursue any and all remedies available to collect the payment of
principal, premium, if any, or interest on the Lessor Notes including the
remedies pursuant to this Section 7.4 and shall have and may exercise all of
the rights and remedies of a secured party under any and all applicable law,
rule or regulation. It is understood and agreed that if a Lease Indenture
Event of Default has occurred and is continuing by virtue of one or more
Lease Events of Default the Security Agent shall not exercise foreclosure
remedies under this Lease Indenture without exercising material remedies
seeking to dispossess the Lessee under the Lease, unless exercising such
remedies under the Facility Lease shall be prohibited at the time by law,
governmental authority or court order, in which case the Security Agent shall
not exercise foreclosure remedies under the Lease Indenture until the
expiration of a period of one year from the commencement of such prohibition.
For the avoidance of doubt, it is expressly understood and agreed that the
above-described inability of the Security Agent to

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exercise any right or remedy under the Facility Lease shall not prevent the
Security Agent from exercising any of its other rights, powers and remedies
under this Lease Indenture.

         (b) Both the Owner Lessor, the Lease Indenture Trustee and the
Security Agent irrevocably agree for the benefit of the Facility Lessee that
neither of them will exercise any remedies on account of a Lease Event of
Default resulting from a Rent Default Event other than (x) the Owner Lessor
may at any time a Rent Default Event has occurred and is continuing, exercise
the remedy set forth in Section 17.1(g) of the Facility Lease and (y) upon
the Rent Default Remedy Date, the Owner Lessor may declare the Facility Lease
in default and the Owner Lessor, or if the Lien of this Lease Indenture has
not terminated, the Security Agent may exercise all remedies. The Owner
Lessor and the Security Agent irrevocably agree that the Facility Lessee is a
third party beneficiary of the remedies set forth in SECTION 7.4 hereof.

SECTION 7.5                TAKING POSSESSION OF INDENTURE ESTATE

         (a) Subject to the rights of the Owner Lessor and the Owner
Participant under Sections 7.2 and 2.21 hereof, and unless a Lease Indenture
Event of Default shall have occurred and be continuing and the Lessor Notes
shall have been accelerated (and any such acceleration has not been
rescinded) pursuant to Section 7.3 hereof, upon a Notice of Action , the
Owner Lessor shall promptly execute and deliver or cause to be delivered to
the Security Agent such instruments and other documents as the Required Lease
Indenture Secured Parties may deem necessary or advisable to enable the
Security Agent at such time or times and place or places as the Security
Agent (acting upon a Notice of Action) may specify, to obtain possession of
all or any part of the Indenture Estate to which the Lease Indenture Secured
Parties shall at the time be entitled hereunder. If the Owner Lessor shall
for any reason fail to execute and deliver or cause to be delivered such
instruments and documents after such request by the Security Agent , the
Security Agent (acting upon a Notice of Action) may (i) obtain a judgment
conferring on the Security Agent the right to immediate possession and
requiring the Owner Lessor to execute and deliver or cause to be delivered
such instruments and documents to the Security Agent and the Owner Lessor
hereby specifically consents to the entry of such judgment to the fullest
extent it may lawfully do so, and (ii) to the extent permitted by law, pursue
all or part of such Indenture Estate, as applicable, wherever it may be
found, subject to Article XI of the Participation Agreement and Section 4.2
of the Facility Lease, if applicable. All expenses (including those of the
Security Agent) of obtaining such judgment or of pursuing, searching for and
taking such property shall, until paid, be secured by the Lien of this
Indenture.

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<Page>

         (b) Upon every such taking of possession in connection with a Lease
Event of Default, the Security Agent (acting upon a Notice of Action) may,
from time to time at the expense of the Indenture Estate, make all such
expenditures for maintenance, insurance, repairs, replacements, alterations,
additions and improvements to and of the Indenture Estate as the Required
Lease Indenture Secured Parties may deem proper. In each such case, the
Security Agent (acting upon a Notice of Action) or its designee shall have
the right to maintain, use, operate, store, lease, control or manage the
Indenture Estate and to carry on the business and to exercise all rights and
powers of the Owner Lessor relating to the Indenture Estate, as the Required
Lease Indenture Secured Parties shall deem best, including the right to enter
into any and all such agreements with respect to the maintenance, insurance,
use, operation, storage, leasing, control, management or disposition of the
Indenture Estate or any part thereof as the Required Lease Indenture Secured
Parties may determine; and the Security Agent shall be entitled to collect
and receive directly all tolls, rents (including Rent), revenues, issues,
income, products and profits constituting part of the Indenture Estate and
every part thereof, except Excepted Payments, without prejudice, however, to
the right of the Security Agent under any provision of this Lease Indenture
to collect and receive all cash held by, or required to be deposited with,
the Security Agent hereunder. Such tolls, rents (including Rent), revenues,
issues, income, products and profits shall be applied to pay the expenses of
use, operation, storage, subleasing, control, management or disposition of
the Indenture Estate and of conducting the business thereof, and of all
maintenance, repairs, replacements, alterations, additions and improvements,
and to make all payments which the Security Agent may be required or may
elect (acting upon a Notice of Action) to make, if any, for taxes,
assessments, insurance or other proper charges upon the Indenture Estate or
any part thereof (including the employment of engineers and accountants to
examine, inspect and make reports upon the properties and books and records
of the Owner Lessor), and all other payments which the Security Agent may be
required or authorized to make under any provision of this Lease Indenture,
as well as reasonable compensation for the services of the Lease Indenture
Trustee and the Security Agent, and of all Persons properly engaged and
employed by the Lease Indenture Trustee and the Security Agent.

SECTION 7.6                WAIVER OF PAST LEASE INDENTURE DEFAULTS

                  Upon any waiver of any existing Lease Indenture Default or
Lease Indenture Event of Default pursuant to the second paragraph of Section
7.3, such Lease Indenture Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every
purpose of this Lease Indenture; but no such waiver shall extend to any
subsequent or other Lease Indenture Default or impair any right consequent
thereon.

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SECTION 7.7                CONTROL BY MAJORITY

                  The Required Lease Indenture Secured Parties may direct the
time, method and place of conducting any proceeding for exercising any remedy
available to the Security Agent or exercising any trust or power conferred on
it. However, the Security Agent may refuse to follow any direction that
conflicts with law or this Lease Indenture or that the Security Agent
determines may be unduly prejudicial to the rights of other Noteholders or
the issuer of the Debt Service Reserve Letter of Credit or that may involve
the Security Agent in personal liability. The Security Agent e may take any
other action consistent with this Lease Indenture relating to any such
direction.

SECTION 7.8                [RESERVED]

SECTION 7.9                RIGHTS OF HOLDERS OF LESSOR NOTES TO RECEIVE PAYMENT

                  Notwithstanding any other provision of this Lease Indenture
but subject to Section 2.5, the right of any Noteholder, which is absolute
and unconditional, to receive payment of principal, premium, if any, and
interest on the Lessor Note, on or after the respective due dates expressed
in the Lessor Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such
respective dates, or the obligation of the Owner Lessor, which is also
absolute and unconditional, to pay the principal of, premium, if any, and
interest on the Lessor Note to such Noteholder at the time and place set
forth in the Lessor Note, shall not be impaired or affected without the
consent of such Noteholder.

SECTION 7.10               COLLECTION SUIT BY LEASE INDENTURE TRUSTEE

                  If a Lease Indenture Event of Default specified in Section
6.1(a) occurs and is continuing, the Security Agent is authorized to recover
judgment in its own name and as Lease Indenture Trustee of an express trust
against the Owner Lessor for the whole amount of principal of, premium, if any,
and interest remaining unpaid on the Lessor Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, fees, expenses, disbursements and advances of the
Security Agent, its agents and counsel.

SECTION 7.11               [RESERVED]

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SECTION 7.12               NO ACTION CONTRARY TO THE FACILITY LESSEE'S RIGHTS
                           UNDER THE FACILITY LEASE

                  Notwithstanding any other provision of any Operative
Document, so long as the Facility Lease shall not have been declared (or
deemed to have been declared) in default, the Security Agent shall not take
or cause to be taken any action contrary to the right of the Facility Lessee
under the Facility Lease, including its rights, as between the Facility
Lessee and the Owner Lessor, to quiet use and possession of the Undivided
Interest under the Facility Lease.

                                  ARTICLE VIII
                   LEASE INDENTURE TRUSTEE AND SECURITY AGENT

SECTION 8.1                DUTIES OF LEASE INDENTURE TRUSTEE AND SECURITY AGENT

         (a) If a Lease Indenture Event of Default has occurred and is
continuing, the Security Agent and the Lease Indenture Trustee shall exercise
such of the rights and powers vested in it by this Lease Indenture, and use the
same degree of care and skill in its exercise as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.

         (b)      Except during the continuance of a Lease Indenture Event of
Default:

                  (i) the duties of each of the Lease Indenture Trustee and the
         Security Agent shall be determined solely by the express provisions of
         this Lease Indenture and the Lease Indenture Trustee and the Security
         Agent need perform only those duties that are specifically set forth in
         this Lease Indenture and no others, and no implied covenants or
         obligations shall be read into this Lease Indenture against the Lease
         Indenture Trustee or the Security Agent; and

                  (ii) in the absence of bad faith on its part, the Lease
         Indenture Trustee or the Security Agent may conclusively rely, as to
         the truth of the statements and the correctness of the opinions
         expressed therein, upon certificates or opinions furnished to the

         Lease Indenture Trustee or the Security Agent and conforming to the
         requirements of this Lease Indenture. However, the Lease Indenture
         Trustee and the Security Agent shall examine the certificates and
         opinions to determine whether or not they conform to the requirements
         of this Lease Indenture.

         (c) The Lease Indenture Trustee nor the Security Agent may not be
relieved from liabilities for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:

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<Page>

                  (i)  this paragraph does not limit the effect of paragraph
         (b) of this Section;

                  (ii) the Lease Indenture Trustee nor the Security Agent shall
         not be liable for any error of judgment made in good faith by a
         Responsible Officer, unless it is proved that the Lease Indenture
         Trustee or the Security Agent was negligent in ascertaining the
         pertinent facts; and

                  (iii) [the Lease Indenture Trustee and the Security Agent
         shall not be liable with respect to any action it takes or omits to
         take in good faith in accordance with a direction received by it
         pursuant to Section 7.7 hereof.]

         (d) Whether or not therein expressly so provided, every provision of
this Lease Indenture that in any way relates to the Lease Indenture Trustee or
the Security Agent is subject to paragraphs (a), (b), (c), (e) and (f) of this
Section.

         (e) No provision of this Lease Indenture shall require the Lease
Indenture Trustee nor the Security Agent to expend or risk its own funds or
incur any liability. The Lease Indenture Trustee and the Security Agent shall
be under no obligation to exercise any of its rights and powers under this
Lease Indenture at the request or direction of any Noteholders, unless such
Noteholder shall have offered and, if requested, provided to the Lease
Indenture Trustee security and indemnity satisfactory to it against any loss,
liability or expense.

         (f) The Lease Indenture Trustee shall not be liable for interest on
any money received by it except as the Lease Indenture Trustee or the
Security Agent may agree in writing with the Owner Lessor. Money held in
trust by the Lease Indenture Trustee or the Security Agent need not be
segregated from other funds except to the extent required by law.

SECTION 8.2                RIGHTS OF LEASE INDENTURE TRUSTEE

         (a) The Lease Indenture Trustee or the Security Agent may
conclusively rely upon any document believed by it to be genuine and to have
been signed or presented by the proper Person. The Lease Indenture Trustee
and the Security Agent need not investigate any fact or matter stated in the
document, but the Lease Indenture Trustee nor the Security Agent, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and if the Lease Indenture Trustee or the Security
Agent shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Owner Lessor
personally or by agent or attorney.

         (b) Before the Lease Indenture Trustee or the Security Agent acts or
refrains from acting, it may require a Manager's Certificate or an Opinion of
Counsel

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or both. The Lease Indenture Trustee or the Security Agent shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officer's Certificate or Opinion of Counsel. The Lease Indenture Trustee
or the Security Agent may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.

         (c) The Lease Indenture Trustee or the Security Agent may act through
its attorneys and agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.

         (d) The Lease Indenture Trustee or the Security Agent shall not be
liable for any action it takes or omits to take in good faith that it
believes to be authorized or within the rights or powers conferred upon it by
this Lease Indenture.

         (e) Unless otherwise specifically provided in this Lease Indenture,
any demand, request, direction or notice from the Owner Lessor shall be
sufficient if signed by the Independent Manager of the Owner Lessor.

         (f) The Lease Indenture Trustee or the Security Agent shall be under
no obligation to exercise any of the rights or powers vested in it by this
Lease Indenture at the request or direction of any of the Lease Indenture
Secured Parties unless such Lease Indenture Secured Parties shall have
offered and, if requested, provided to the Lease Indenture Trustee or the
Security Agent reasonable security or indemnity against the costs, expenses
and liabilities that might be incurred by it in compliance with such request
or direction.

         (g)      No permissive right of the Lease Indenture Trustee or the
Security Agent to act hereunder shall be construed as a duty.

         (h) Whenever in the administration of this Lease Indenture the Lease
Indenture Trustee or the Security Agent shall deem it desirable that a matter
be proved or established prior to taking, suffering or omitting any action
hereunder, the Lease Indenture Trustee or the Security Agent (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers Certificate, an Opinion of Counsel, or
both.

SECTION 8.3                INDIVIDUAL RIGHTS OF SECURITY AGENT

                  The Security Agent in its individual or any other capacity may
become the owner or pledgee of Lessor Notes and may otherwise deal with the
Owner Lessor or any Affiliate of the Owner Lessor with the same rights it would
have if it were not the Security Agent. However, in the event that the Security
Agent

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acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue as Lease Indenture
Trustee or resign. Any Agent may do the same with like rights and duties. The
Security Agent is also subject to Sections 8.10 and 8.11 hereof.

SECTION 8.4                LEASE INDENTURE TRUSTEE'S DISCLAIMER

                  The Lease Indenture Trustee or the Security Agent shall not be
responsible for and makes no representation as to the validity or adequacy of
this Lease Indenture or the Lessor Notes; they shall not be accountable for the
Owner Lessor's use of the proceeds from the Lessor Notes or any money paid to
the Owner Lessor or upon the Owner Lessor's direction under any provision of
this Lease Indenture; they shall not be responsible for the use or application
of any money received by any Paying Agent other than the Lease Indenture
Trustee, and they shall not be responsible for any statement or recital herein
or any statement in the Lessor Notes or any other document in connection with
the sale of the Lessor Notes or pursuant to this Lease Indenture other than its
certificate of authentication.

SECTION 8.5                NOTICE OF LEASE INDENTURE DEFAULTS

                  If a Lease Indenture Default or a Lease Indenture Event of
Default occurs and is continuing and if the Lease Indenture Trustee receives
written notice thereof, the Lease Indenture Trustee shall (at the expense of
the Owner Lessor) mail to Noteholders a notice of the Lease Indenture Default
or Lease Indenture Event of Default within 90 days after it occurs. Except in
the case of a Lease Indenture Default or Lease Indenture Event of Default in
payment of principal of, premium, if any, or interest on any Lessor Note, the
Lease Indenture Trustee may withhold the notice if and so long as a committee
of its Responsible Officers in good faith determines that withholding the
notice is in the interests of the Noteholders of the Lessor Notes.

SECTION 8.6                 GENERAL AUTHORITY OF THE SECURITY AGENT OVER THE
                            INDENTURE ESTATE

                  Each Lease Indenture Secured Party hereby irrevocably
constitutes and appoints, effective after the occurrence and during the
continuance of a Lease Indenture Event of Default, the Security Agent and any
officer or agent thereof, with full power of substitution as among such
officers and agents, as its true and lawful attorney-in-fact with full power
and authority in the name of such Lease Indenture Secured Party or in its own
name, from time to time in the Security Agent's reasonable discretion to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to carry out the terms of the
Lease Indenture (but subject to the terms hereof and thereof) and to

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accomplish the purposes hereof and thereof; and, without limiting the
generality of the foregoing, each Lease Indenture Secured Party hereby gives
the Security Agent, during any Lease Indenture Event of Default or Lease
Indenture Default, the power and right on behalf of such Lease Indenture
Secured Party, without notice to or further assent by such Lease Indenture
Secured Party, to: (i) ask for, demand, sue for, collect, receive and give
acquittance for any and all moneys due or to become due upon, or in
connection with, the Indenture Estate; (ii) receive, take, endorse, assign
and deliver any and all checks, notes, drafts, acceptances, documents and
other negotiable and non-negotiable instruments taken or received by the
Security Agent as, or in connection with, the Indenture Estate, (iii)
commence, prosecute, defend, settle, compromise or adjust any claim, suit,
action or proceeding with respect to, or in connection with, the Indenture
Estate; (iv) sell, transfer, assign or otherwise deal in or with the
Indenture Estate or any part thereof as fully and effectively as if the
Security Agent were the absolute owner thereof; (v) exercise all remedies
provided for by the Lease Indenture; and (vi) do, at its option and at the
expense and for the account of such Lease Indenture Secured Party, at any
time or from time to time, all acts and things which the Security Agent
reasonably deems necessary to perfect the liens and security interests of the
Security Agent in the Indenture Estate, to protect or preserve the Indenture
Estate and to realize upon the Indenture Estate in each case is accordance
with the terms hereof. Each Lease Indenture Secured Party hereby ratifies all
that said attorneys-in-fact shall lawfully do or cause to be done by virtue
hereof. This power of attorney is a power coupled with an interest and shall
be irrevocable.

SECTION 8.7                COMPENSATION

                  The Owner Lessor agrees to pay to the Lease Indenture Trustee
and the Security Agent from time to time compensation as agreed upon by the
Lease Indenture Trustee and the Security Agent and the Owner Lessor, and, in the
absence of any such agreement, reasonable compensation for its acceptance of
this Lease Indenture and services hereunder. The Lease Indenture Trustee's and
the Security Agent's compensation shall not be limited by any law on
compensation of a Lease Indenture Trustee of an express trust.

                  To secure the Owner Lessor's payment obligations in this
Section, the Lease Indenture Trustee and the Security Agent shall have a Lien
prior to the Lessor Notes on all money or property held or collected by the
Lease Indenture Trustee or the Security Agent, except that held in trust to pay
principal and interest on particular Lessor Notes.

                  When the Lease Indenture Trustee or the Security Agent incurs
expenses or renders services after a Lease Indenture Event of Default specified
in Section 7.1(e) or (b) hereof occurs, the expenses and the compensation for
the

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services (including the fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under any Bankruptcy Code.

SECTION 8.8       REPLACEMENT OF LEASE INDENTURE TRUSTEE

                  A resignation or removal of the Lease Indenture Trustee or the
Security Agent and appointment of a successor Lease Indenture Trustee or
Security Agent shall become effective only upon the successor Lease Indenture
Trustee's acceptance of appointment as provided in this Section.

                  The Lease Indenture Trustee or the Security Agent may resign
in writing at any time and be discharged from the trust hereby created by so
notifying the Owner Lessor. The Noteholders of a majority in principal amount of
the then outstanding Lessor Notes may remove the Lease Indenture Trustee or the
Security Agent by so notifying the Lease Indenture Trustee or the Security Agent
and the Owner Lessor in writing. The Owner Lessor may by a Board Resolution
remove the Lease Indenture Trustee or the Security Agent if:

         (a) the Lease Indenture Trustee or the Security Agent fails to
comply with Section 8.10 hereof;

         (b) the Lease Indenture Trustee or the Security Agent is adjudged a
bankrupt or an insolvent or an order for relief is entered with respect to the
Lease Indenture Trustee or the Security Agent under any Bankruptcy Code;

         (c) a custodian or public officer takes charge of the Lease
Indenture Trustee or Security Agent or either of its property; or

         (d) the Lease Indenture Trustee or the Security Agent becomes
incapable of acting as Lease Indenture Trustee hereunder.

                  If the Lease Indenture Trustee or the Security Agent resigns
or is removed or if a vacancy exists in the office of Lease Indenture Trustee or
the Security Agent for any reason, the Owner Lessor shall promptly appoint a
successor Lease Indenture Trustee or Security Agent. Within one year after the
successor Lease Indenture Trustee or Security Agent takes office, the Required
Lease Indenture Secured Parties may appoint a successor Lease Indenture Trustee
or Security Agent to replace the successor Lease Indenture Trustee or Security
Agent appointed by the Owner Lessor.

                  If a successor Lease Indenture Trustee or Security Agent does
not take office within 60 days after the retiring Lease Indenture Trustee or
Security Agent resigns or is removed, the retiring Lease Indenture Trustee or
Security Agent, as applicable, the Owner Lessor, the Noteholders of at least 10%
in principal amount

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of the then outstanding Lessor Notes or the issuer of the Debt Service
Reserve Letter of Credit may petition any court of competent jurisdiction for
the appointment of a successor Lease Indenture Trustee or Security Agent, as
applicable.

                  If the Lease Indenture Trustee or Security Agent, as
applicable, after receiving a written request by any Noteholder who has been a
BONA FIDE Noteholder for at least six months, fails to comply with Section 8.10,
such Noteholder or the issuer of the Debt Service Reserve Letter of Credit may
petition any court of competent jurisdiction for the removal of the Lease
Indenture Trustee or Security Agent, as applicable and the appointment of a
successor Lease Indenture Trustee or Security Agent, as applicable.

                  A successor Lease Indenture Trustee or Security Agent, as
applicable shall deliver a written acceptance of its appointment to the retiring
Lease Indenture Trustee or Security Agent, as applicable and to the Owner
Lessor. Thereupon, the resignation or removal of the retiring Lease Indenture
Trustee shall become effective, and the successor Lease Indenture Trustee or
Security Agent, as applicable shall have all the rights, powers and duties of
the Lease Indenture Trustee or Security Agent, as applicable under this Lease
Indenture. The successor Lease Indenture Trustee or Security Agent, as
applicable shall mail a notice of its succession to the Noteholders. The
retiring Lease Indenture Trustee or Security Agent, as applicable shall promptly
transfer all property held by it as Lease Indenture Trustee or Security Agent,
as applicable to the successor Lease Indenture Trustee or Security Agent, as
applicable, PROVIDED all sums owing to the Lease Indenture Trustee or Security
Agent, as applicable hereunder have been paid and subject to the Lien provided
for in Section 8.7 hereof. Notwithstanding replacement of the Lease Indenture
Trustee or Security Agent pursuant to this Section 8.8, the Owner Lessor's
obligations under Section 8.7 hereof shall continue for the benefit of the
retiring Lease Indenture Trustee.

SECTION 8.9       SUCCESSOR LEASE INDENTURE TRUSTEE BY MERGER, ETC

                  If the Lease Indenture Trustee or Security Agent or any Agent
of theirs consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Lease
Indenture Trustee, Security Agent or Agent, as the case may be.

SECTION 8.10      ELIGIBILITY; DISQUALIFICATION

                  (a) There shall at all times be a Lease Indenture Trustee and
a Security Agent hereunder that is a corporation organized and doing business
under

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the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that together
with its direct parent, if any, or in the case of a corporation included in a
bank holding company system, its related bank holding company, has a combined
capital and surplus of at least $100 million as set forth in its most recent
published annual report of condition.

SECTION 8.11      OTHER CAPACITIES

                  All references in this Lease Indenture to the Lease Indenture
Trustee shall be deemed to refer to the Lease Indenture Trustee in its capacity
as Lease Indenture Trustee and in its capacities as any Agent, to the extent
acting in such capacities, and every provision of this Lease Indenture relating
to the conduct or affecting the liability or offering protection, immunity or
indemnity to the Lease Indenture Trustee shall be deemed to apply with the same
force and effect to the Lease Indenture Trustee acting in its capacities as any
Agent.

                                   ARTICLE IX
                                  SHARED RIGHTS

SECTION 9.1       CERTAIN RIGHTS OF OWNER LESSOR AND OWNER PARTICIPANT

         (a) Notwithstanding any other provisions of this Lease Indenture other
than Section 9.1 hereof, including the Granting Clause, the following rights
(the "SECTION 9.1 RIGHTS") shall be exercisable by the Owner Lessor or the
Security Agent (acting upon a Notice of Action):

                  (i) at all times the Owner Lessor shall have the right,
         together with or independently of the Security Agent, (A) to receive
         from the Facility Lessee all notices, certificates, reports, filings,
         opinions of counsel and other documents and all information which the
         Facility Lessee is permitted or required to give or furnish to the
         Owner Lessor pursuant to any Operative Document, (B) to exercise
         inspection rights granted to the Owner Lessor pursuant to Section 12 of
         the Facility Lease, (C) to exercise, to the extent necessary to enable
         it to exercise its rights under Section 7.2 hereof, the rights of the
         Owner Lessor under Section 20 of the Facility Lease, (D) to request
         from the Facility Lessee such further documents or assurances, or
         request that the Facility Lessee take such further actions in respect
         of such party's interests, as shall be required to be delivered or
         taken by the Facility Lessee pursuant to Section 5.6 or 16.14 of the
         Participation Agreement and (B) to declare and give notice of a Lease
         Default or a Lease Event of Default pursuant to Section 17 of the
         Facility Lease; PROVIDED,

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         HOWEVER, that the rights excepted and reserved by this Section
         9.1(a)(i) shall not be deemed to include the exercise of any
         remedies provided for in Section 17.1 of the Facility Lease, except
         that the Owner Lessor and the Owner Participant may proceed by
         appropriate court action or actions, either at law or in equity, to
         enforce performance by the Facility Lessee of the applicable
         covenants and terms of Excepted Payments but not proceed to terminate
         the Facility Lease;

                  (ii) so long as the Lessor Notes have not been accelerated
         pursuant to Section 7.3 hereof and the Security Agent shall not have
         commenced the exercise of remedies to dispossess the Facility Lessee of
         the Undivided Interest under this Lease Indenture, the Owner Lessor
         shall have the right, but not to the exclusion of the Security Agent
         and to the extent permitted by the Operative Documents and Requirements
         of Law, to (A) seek specific performance of the, covenants of the
         Facility Lessee under the Operative Documents relating to the
         protection, insurance, maintenance, possession, use and return of the
         Property Interest, (B) to provide such insurance as may be permitted by
         Section 11 of the Facility Lease and (C) to perform for the Facility
         Lessee as provided in Section 20 of the Facility Lease; and

                  (iii) so long as the Lessor Notes have not been accelerated
         pursuant to Section 7.3 hereof (or, if accelerated, such acceleration
         has theretofore been rescinded) and the Security Agent shall not have
         commenced the exercise of remedies to dispossess the Facility Lessee of
         the Undivided Interest under this Lease Indenture, neither the Owner
         Lessor nor the Security Agent shall have any right, without the prior
         consent of the other (A) to amend, supplement, modify or waive any
         return condition in Section 5 of the Facility Lease, or (B) to exercise
         any rights with respect to the Facility Lessee's use and operation,
         modification or maintenance of the Property Interest which the Facility
         Lease specifically confers on the Owner Lessor, or (C) to exercise the
         Owner Lessor*s right under Section 22.4(b) of the Facility Lease to
         withhold or grant its consent to an assignment by the Facility Lessee
         of its rights under the Facility Lease; and

         (b) Notwithstanding the foregoing provisions of this Section 9.1 but
subject to Section 7.4(b) hereof, the Security Agent (acting upon a Notice of
Action) shall at all times have the right to declare the Facility Lease in
default and to exercise the remedies set forth in Section 17.1 of the
Facility Lease and in Section 7.4 and 7.5 hereof. Notwithstanding anything
herein or in any other Operative Document to the contrary, so long as the
Facility Lessee or any Affiliate of the Facility Lessee is a Noteholder or Owner
Lessor, neither the Facility Lessee nor any such Affiliate, in its capacity as
Noteholder or Owner Lessor, shall have any

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rights to approve, consent to, vote on or ratify any action, inaction or
determination taken or made or to be taken or made hereunder; provided,
however, that this sentence shall not apply to the Facility Lessee or any
such Affiliate with respect to those matters set forth in Section 10.2 hereof
requiring the consent of all Noteholders.

         (c) Notwithstanding any other provision of this Lease Indenture:

                  (i) The Owner Lessor shall at all times, to the exclusion of
         the Lease Indenture Trustee and the Security Agent, retain all rights
         (A) subject to the Lease Subordination Agreement (so long as it has not
         been terminated) in accordance with its terms, to demand and receive
         payment of, and to commence an action for payment of, Excepted
         Payments, but the Owner Lessor shall have no remedy or right with
         respect to any such payment against the Indenture Estate nor any right
         to collect any such payment by the exercise of any of the remedies
         under Section 17 of the Facility Lease; (B) except in connection with
         the exercise of remedies pursuant to the Facility Lease, to exercise
         the Owner Lessor's rights relating to the Appraisal Procedure and to
         confer and agree with the Facility Lessee on Fair Market Rental Value,
         or any Renewal Lease Term; (C) retain all rights with respect to
         insurance that Section 11 of the Facility Lease specifically confers
         upon the Owner Lessor and to waive any failure by the Facility Lessee
         to maintain the insurance required by Section 11 of the Facility Lease
         before or after the fact so long as the insurance maintained by the
         Facility Lessee still constitutes Prudent Industry Practice; (D) to
         consent or withhold consent to any change of control as provided in
         Section 16.1(m) of the Facility Lease provided that such consent
         shall not be given if: (i) the Bonds are not rated at least BBB- by
         S&P, Baa3 by Moody's, and BBB by Duff & Phelps, and a reaffirmation of
         such ratings if obtained and (ii) the reduction of EME's interest in
         the facility Lessee has not been approved by more than 66 1/3 of the
         Noteholders; (E) to exercise remedies from time to time set forth in
         Section 17.1(g) of the Facility Lease; and (F) retain all rights to
         adjust Basic Lease Rent (or any component thereof), Allocated Rent,
         Lessor Section 467 Loan Balance, Lessee Section 467 Loan Balance,
         Lessor Section 467 Interest, Proportional Rent, Lessee Section 467
         Interest and Termination Value as provided in Section 3.4 of the
         Facility Lease, Section 13 of the Participation Agreement or the Tax
         Indemnity Agreement; provided, however, that after giving effect to
         any such adjustment (x) the amount of Basic Lease Rent (exclusive of
         any Equity Portion thereof) payable on each Rent Payment Date shall
         be at least equal to the aggregate amount of all principal and
         accrued interest payable on such Rent Payment Date on all Lessor
         Notes then outstanding and (y) Termination Value shall in no event
         be less (when added to all other amounts required to be paid by the
         Facility Lessee in respect of any early termination of the Facility
         Lease) than an amount sufficient, as of the date of

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         payment, to pay in full the principal of, and interest on all Lessor
         Notes outstanding on and as of such date of payment;

                  (ii) So long as the Lessor Notes have not been accelerated
         pursuant to Section 7.3 hereof (or, if accelerated, such acceleration
         has theretofore been rescinded) or the Security Agent shall not have
         exercised any of its rights pursuant to Section 7 hereof to take
         possession of, foreclose, sell or otherwise take control of all or any
         part of the Indenture Estate, the Owner Lessor shall retain the right
         to the exclusion of the Security Agent to exercise the rights of the
         Owner Lessor under the provisions of Section 10 (other than Section
         10.3 and Section 10.5 thereof), 13, 14 and 15 of the Facility Lease;
         PROVIDED, HOWEVER, that if a Lease Indenture Event of Default shall
         have occurred and be continuing, subject to Section 7.2, the Owner
         Lessor shall cease to retain such rights upon notice from the Security
         Agent (acting upon a Notice of Action) stating that such rights shall
         no longer be retained by the Owner Lessor.

SECTION 9.2       NO REPRESENTATIONS OR WARRANTIES AS TO THE PROPERTY INTEREST.

                  NONE OF THE OWNER LESSOR, THE OWNER MANAGER, THE TRUST COMPANY
OR THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE, AND EACH HEREBY
EXPRESSLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO
THE TITLE, VALUE, WORKMANSHIP, COMPLIANCE WITH SPECIFICATIONS, CONDITION,
DESIGN, QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE OF THE PROPERTY INTEREST OR ANY PART THEREOF, AS TO THE
ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE
ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE
ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, INCLUDING ANY
ENVIRONMENTAL LIABILITY, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO
THE PROPERTY INTEREST OR ANY PART THEREOF WHATSOEVER, except that the Owner
Lessor warrants that on the Closing Date it shall have received such rights and
interests that were conveyed to it with respect to the Property Interest
pursuant to the Facility Deed, the Bill of Sale and the Facility Site Lease
subject to the rights of the parties to this Lease Indenture and to Permitted
Liens and Permitted Encumbrances, and the Trust Company warrants that on the
Closing Date the Property Interest shall be free and clear of Owner Lessor Liens
attributable to the Trust Company. None of the Owner Manager or the Trust
Company makes or shall be deemed to have made any representation or warranty as
to the validity, legality or enforceability of this

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Indenture, the Lessor LLC Agreement or the Lessor Notes or as to the
correctness of any statement contained in any such document, except for the
representations and warranties of the Owner Lessor, the Owner Manager or the
Trust Company in its individual capacity made under this Lease Indenture or
in the Participation Agreement.

                                    ARTICLE X
    SUPPLEMENTS AND AMENDMENTS TO THIS LEASE INDENTURE AND OTHER DOCUMENTS

SECTION 10.1      WITHOUT CONSENT OF NOTEHOLDERS OR REQUIRED NOTEHOLDERS.

                  Subject to the provisions of the Participation Agreement, at
any time and from time to time, the Owner Lessor (but only on the written
request of the Owner Participant) and the Lease Indenture Trustee may enter into
any indenture or indentures supplemental hereto or execute any amendment,
modification, supplement, waiver or consent with respect to any other Operative
Document, without the consent of the Noteholders or the Required Lease Indenture
Secured Parties for one or more of the following purposes:

                  (i) to correct, confirm or amplify the description of any
         property at any time subject to the Lien on the Indenture Estate or to
         convey, transfer, assign, mortgage or pledge any property or assets to
         the Security Agent as security for the Lessor Notes;

                  (ii) to evidence the succession of another corporation as
         Owner Manager or the appointment of a co-manager in accordance with
         the terms of the Lessor LLC Agreement;

                  (iii) to add to the covenants of the Owner Lessor for the
         benefit of the Lease Indenture Secured Parties such further covenants,
         restrictions, conditions or provisions as the Owner Lessor and the
         Security Agent shall consider to be for the protection of the
         Noteholders of any series, and to make the occurrence, or the
         occurrence and continuance, of a default in complying
         with any such additional covenant, restriction, condition or provision
         a Lease Indenture Event of Default permitting the enforcement of all or
         any of the several remedies provided in this Lease Indenture as herein
         set forth; in respect of any such additional covenant, restriction,
         condition or provision, such supplement may provide for a particular
         period of grace after default (which period may be shorter or longer
         than that allowed in the case of other defaults) or may provide for
         an immediate enforcement upon such a Lease

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         Indenture Event of Default or may limit the remedies available to the
         Security Agent upon such a Lease Indenture Event of Default or may
         limit the right of the Required Lease Indenture Secured Parties to
         waive such a Lease Indenture Event of Default;

                  (iv) to cure any ambiguity or to correct or supplement any
         provision contained herein or in any supplement which may be defective
         or inconsistent with any other provision contained herein or in any
         supplement, or to add or modify such other provisions or agreements
         herein or in any other Operative Documents, in each case as the Owner
         Lessor may deem necessary or desirable, with respect to matters or
         questions arising under this Lease Indenture; provided that no such
         action shall, in the reasonable judgment of the Security Agent,
         materially adversely affect the interests of the Lease Indenture
         Secured Parties of any series;

                  (v) to provide for any evidence of the creation and issuance
         of any Subsequent Lessor Notes of any series pursuant to, and subject
         to the conditions of, Section 2.6 and to establish the form and terms
         of such Subsequent Lessor Notes;

                  (vi) to effect an assumption of the Lessor Notes, as permitted
         by Section 2.21; provided that the supplemental indenture entered into
         to effect such assumption shall contain all of the covenants applicable
         to the Facility Lessee contained in the Facility Lease and the
         Participation Agreement for the benefit of the Lease Indenture Trustee,
         the Security Agent or the Lease Indenture Secured Parties, such that
         the Facility Lessee's obligations contained therein, to the extent they
         are applicable, will continue to be in full force and effect in the
         event the Facility Lease is terminated;

                  (vii) to evidence and provide for the removal of the Lease
         Indenture Trustee or Security Agent or the acceptance of appointment
         hereunder by a successor Lease Indenture Trustee or Security Agent with
         respect to the Lessor Notes as provided in Section 8.8;

                  (viii) to grant or confer upon the Lease Indenture Trustee or
         the Security Agent for the benefit of the Lease Indenture Secured
         Parties any additional rights, remedies, powers, authority or security
         which may be lawfully granted or conferred upon the Lease Indenture
         Trustee or the Security Agent and which are not contrary to or
         inconsistent with this Lease Indenture;

                  (ix) subject to Section 10.2 with respect to the provisions of
         the Indenture Estate Documents referred to therein, to effect any other

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         amendment, modification, supplement, waiver or consent with respect to
         any Indenture Estate Document; provided that no such action shall, in
         the judgment of the Security Agent, materially and adversely affect the
         interests of the Lease Indenture Secured Parties; PROVIDED, HOWEVER,
         that no such amendment, modification, supplement, waiver or consent
         contemplated by this Section 10.1 shall, without the consent of the
         Required Lease Indenture Secured Parties, modify the provisions of
         Sections [5.4, 5.12, 6.1, 6.2, 6.3, 6,4, 6.7 or 6.8] of the
         Participation Agreement or Sections [20.1, 23.4(b), 23.4(c) or 23.4(d)]
         of the Facility Lease (other than any amendment, modification,
         supplement, waiver or consent having no adverse effect on the interests
         of the Lease Indenture Secured Parties).

                  (x) The Security Agent and the Lease Indenture Trustee is
         hereby authorized to join with the Owner Lessor in the execution of any
         such supplement, to make any further appropriate agreements and
         stipulations which may be therein contained and to accept the
         conveyance, transfer, assignment, mortgage or pledge of any property or
         assets thereunder, but the Security Agent and the Lease Indenture
         Trustee shall not be obligated to enter into any such supplement which
         affects the Lease Indenture Trustee's or the Security Agent's own
         rights, duties or immunities under this Lease Indenture or otherwise.

SECTION 10.2      WITH CONSENT OF REQUIRED NOTEHOLDERS; LIMITATIONS.

                  Subject to the provisions of the Participation Agreement, at
any time and from time to time, (i) the Owner Lessor (but only on the written
request of the Owner Participant) and the Security Agent and the Lease Indenture
Trustee (but only if so directed upon a Notice of Action to the extent that the
same is not expressly permitted by Section 10.1), may execute a supplement or
amendment hereto for the purpose of adding provisions to, or changing or
eliminating provisions of, this Lease Indenture as specified in such request,
(ii) the Owner Lessor (but only on the written request of the Owner Participant)
and, except with respect to Excepted Payments, the Security Agent and the Lease
Indenture Trustee (but only if so directed upon a Notice of Action to the extent
that the same is not expressly permitted by Section 10.1), may enter into such
written amendment of or supplement to any Indenture Estate Document as may be
specified in such request and (iii) the Owner Lessor shall not revoke or
otherwise terminate the Lessor LLC Agreement or, if such amendment or supplement
would impair the rights of the Security Agent and the Lease Indenture Trustee or
any Lease Indenture Secured Parties, amend or supplement the Lessor LLC
Agreement; provided, however, that, without the consent of each Lease Indenture
Secured Party affected, except with respect to Excepted Payments, no such
amendment of or supplement to any Indenture Estate Document, and no waiver or

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modification of the terms of any thereof, shall, except to the extent pertaining
to the Excepted Payments,

                  (i) modify the definition of the term "Required Lease
         Indenture Secured Party" or reduce the percentage of Lease Indenture
         Secured Parties required to take or approve any action hereunder,

                  (ii) change the amount or the time of payment of any amount
         owing or payable under any Lessor Note or change the rate or manner of
         calculation of interest payable with respect to any Lessor Note, or
         make any Lessor Note payable in money other than that stated on the
         Lessor Notes,

                  (iii) alter or modify the provisions of Section 3 hereof with
         respect to the manner of payment or the order of priorities in which
         distribution thereunder shall be made as between the Noteholders, the
         issuer of the Debt Service Reserve Letter of Credit and the Owner
         Lessor or the Owner Participant, or waive a Lease Indenture Event of
         Default in the payment of principal of, premium, if any, or interest on
         the Lessor Notes (except a rescission of acceleration of the Lessor
         Notes by the Noteholders of at least 66 2/3% in aggregate principal
         amount of then outstanding Lessor Notes and a waiver of the payment
         default that resulted from such acceleration),

                  (iv) reduce the amount (except as to any amount as shall be
         sufficient to pay the aggregate principal of, make-whole premium, if
         any, and interest on, all outstanding Lessor Notes) or extend the time
         of payment of Basic Lease Rent or Termination Value except as expressly
         provided in the Facility Lease, or, except in connection with Section
         10.1(vi), change any of the circumstances under which Basic Lease Rent
         or Termination Value is payable,

                  (v) except in connection with Section 10.1(vi) or as expressly
         provided in Section 22.4 of the Facility Lease, allow for the
         assignment of the Facility Lease if, in connection therewith, the
         Facility Lessee will be released from its obligation to pay Basic Lease
         Rent and Termination Value,

                  (vi) except in connection with Section 10.1(vi), release the
         Facility Lessee from its obligation to pay Basic Lease Rent or
         Termination Value or change the absolute and unconditional character of
         such obligations as set forth in Section 9 of the Facility Lease,

                  (vii) deprive the Security Agent of the Lien on a material
         portion of the Indenture Estate or permit the creation of any Lien on a

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         material portion of the Indenture Estate ranking equally or prior to
         the Lien of the Security Agent, except for permitted liens.

                  (viii) make any change in the provisions of this Lease
         Indenture relating to waivers of past Lease Indenture Defaults or the
         rights of Noteholders to receive payments of principal of, premium, if
         any, or interest on the Lessor Notes;

                  (ix) waive a redemption payment with respect to any Lessor
                       Note; or
                  (x)  make any change in the foregoing amendment and waiver
                       provisions.

SECTION 10.3               DOCUMENTS FURNISHED TO NOTEHOLDERS.

                  Promptly after the execution by the Owner Lessor, the Security
Agent or the Lease Indenture Trustee of any document entered into pursuant to
Sections 10.1 and 10.2, the Lease Indenture Trustee shall furnish a copy thereof
to the Noteholders but the failure of the Lease Indenture Trustee to deliver
such conformed copy, or the failure of the Noteholders to receive such conformed
copies, shall not impair or affect the validity of such document.

SECTION 10.4               LEASE INDENTURE TRUSTEE AND SECURITY AGENT PROTECTED.

                  Notwithstanding anything to the contrary contained herein, if,
in the opinion of the Lease Indenture Trustee or the Security Agent, any
document required to be executed by it pursuant to Sections 10.1 and 10.2
adversely affects any right, duty, immunity or indemnity of or in favor of the
Lease Indenture Trustee or the Security Agent under any Indenture Estate
Document or under any other Operative Document, the Lease Indenture Trustee or
the Security Agent may in its discretion decline to execute such document unless
the Person or Persons requesting any related action shall provide an indemnity
that is reasonably satisfactory to the Lease Indenture Trustee or the Security
Agent.

SECTION 10.5               REVOCATION AND EFFECT OF CONSENTS

                  Until an amendment, supplement or waiver becomes effective, a
consent to it by a Lease Indenture Secured Party is a continuing consent by the
Lease Indenture Secured Party, even if notation of the consent is not made on
any Lessor Note. However, any such Lease Indenture Secured Party may revoke the
consent if the Security Agent receives written notice of revocation before the
date the waiver, supplement or amendment becomes effective. An amendment,
supplement or waiver

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becomes effective in accordance with its terms and thereafter binds every
Lease Indenture Secured Party.

SECTION 10.6               NOTATION ON OR EXCHANGE OF LESSOR NOTES

                  The Lease Indenture Trustee may place an appropriate notation
about an amendment, supplement or waiver on any Lessor Note thereafter
authenticated. The Owner Lessor in exchange for all Lessor Notes may issue and
the Lease Indenture Trustee shall, upon receipt of an Authentication Order,
authenticate new Lessor Notes that reflect the amendment, supplement or waiver.

                  Failure to make the appropriate notation or issue a new Lessor
Note shall not affect the validity and effect of such amendment, supplement or
waiver.

SECTION 10.7               LEASE INDENTURE TRUSTEE TO SIGN AMENDMENTS, ETC

                  The Lease Indenture Trustee and the Security Agent shall sign
any amended or supplemental Lease Indenture authorized pursuant to this Article
Nine if the amendment or supplement does not adversely affect the rights,
duties, liabilities or immunities of the Lease Indenture Trustee or the Security
Agent. The Owner Lessor may not sign an amendment or supplemental Lease
Indenture until the Board of Managers approves it. In executing any amended or
supplemental indenture, the Lease Indenture Trustee and the Security Agent shall
be entitled to receive and (subject to Section 8.1 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section 12.4
hereof, an Officer's Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted
by this Lease Indenture.

                                   ARTICLE XI
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 11.1               OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
                           DEFEASANCE

                  The Owner Lessor may, at its option and at any time, elect to
have either Section 11.2 or 11.3 hereof be applied to all outstanding Lessor
Notes upon compliance with the conditions set forth below in this Article 11.

SECTION 11.2               LEGAL DEFEASANCE AND DISCHARGE

                  Upon the Owner Lessor's exercise under Section 11.1 hereof of
the option applicable to this Section 11.2, the Owner Lessor shall, subject to
the satisfaction of the conditions set forth in Section 11.4 hereof, be deemed
to have

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been discharged from its obligations with respect to all outstanding Lessor
Notes on the date the conditions set forth below are satisfied (hereinafter,
"LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means that the Owner
Lessor shall be deemed to have paid and discharged the entire Indebtedness
represented by the Debt Service Reserve Letter of Credit and by the
outstanding Lessor Notes, which shall thereafter be deemed to be
"OUTSTANDING" only for the purposes of Section 11.5 hereof and the other
Sections of this Lease Indenture referred to in (a) and (b) below, and to
have satisfied all its other obligations under such Lessor Notes and this
Lease Indenture (and the Lease Indenture Trustee or the Security Agent, as
applicable, on demand of and at the expense of the Owner Lessor, shall
execute proper instruments acknowledging the same), except for the following
provisions which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Noteholders of outstanding Lessor Notes to
receive solely from the trust fund described in Section 11.4 hereof, and as
more fully set forth in such Section, payments in respect of the principal
of, premium, if any, and interest on such Lessor Notes when such payments are
due, (b) the Owner Lessor's obligations with respect to such Lessor Notes
under Article 2 hereof, (c) the rights, powers, trusts, duties and immunities
of the Security Agent, the Lease Indenture Trustee and any Agent hereunder
and the Owner Lessor's obligations in connection therewith, including,
without limitation, Article 8 and Section 11.5 and 11.7 hereunder, and (d)
this Article 11. Subject to compliance with this Article 11, the Owner Lessor
may exercise its option under this Section 11.2 notwithstanding the prior
exercise of its option under Section 11.3 hereof.

SECTION 11.3               COVENANT DEFEASANCE

                  Upon the Owner Lessor's exercise under Section 11.1 hereof of
the option applicable to this Section 11.3, the Owner Lessor shall, subject to
the satisfaction of the conditions set forth in Section 11.4 hereof, be released
from its obligations under the material covenants contained herein with respect
to the outstanding Lessor Notes on and after the date the conditions set forth
in Section 11.4 are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the
Lessor Notes shall thereafter be deemed not "outstanding" for the purposes of
any direction, waiver, consent or declaration or act of Noteholders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "OUTSTANDING" for all other purposes hereunder (it being
understood that such Lessor Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Lessor Notes or any outstanding amounts due under the Debt Service
Reserve Letter of Credit, the Owner Lessor may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other

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document and such omission to comply shall not constitute a Lease Indenture
Default or a Lease Indenture Event of Default under Section 7.1 hereof, but,
except as specified above, the remainder of this Lease Indenture and such
Lessor Notes shall be unaffected thereby. In addition, upon the Owner
Lessor's exercise under Section 11.1 hereof of the option applicable to this
Section 11.3 hereof, subject to the satisfaction of the conditions set forth
in Section 11.4 hereof, Section 7.1(a) hereof shall not constitute a Lease
Indenture Event of Default.

SECTION 11.4               CONDITIONS TO LEGAL OR COVENANT DEFEASANCE

                  The following shall be the conditions to the application of
either Section 11.2 or 11.3 hereof to the outstanding Lessor Notes or any
outstanding amounts due under the Debt Service Reserve Letter of Credit, as
applicable:

In order to exercise either Legal Defeasance or Covenant Defeasance:

         (a) the Owner Lessor must irrevocably deposit with the Security Agent
in the Security Agent's Account, in trust, for the benefit of the Noteholders
(or the issuer of the Debt Service Reserve Letter of Credit if applicable), cash
in United States dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal of,
premium, if any, and interest on the outstanding Lessor Notes on the stated
maturity or on the applicable redemption date, as the case may be, and the Owner
Lessor must specify whether the Lessor Notes are being defeased to maturity or
to a particular redemption date and any amount outstanding under the Debt
Service Reserve Letter of Credit;

         (b) in the case of an election under Section 11.2 hereof, the Owner
Lessor shall have delivered to the Lease Indenture Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Lease Indenture Trustee
confirming that (A) the Owner Lessor has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of
this Lease Indenture, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Noteholders of the outstanding Lessor Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;

         (c) in the case of an election under Section 11.3 hereof, the Owner
Lessor shall have delivered to the Lease Indenture Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Lease Indenture Trustee
confirming that, subject to customary assumptions and exclusions, the
Noteholders of the outstanding

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Lessor Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;

         (d) no Lease Indenture Default or Lease Indenture Event of Default
shall have occurred and be continuing on the date of such deposit (other than a
Lease Indenture Default or an Event of Lease Indenture Default resulting from
the borrowing of funds to be applied to such deposit) or insofar as Sections
7.1(e) or 7.1(f) hereof are concerned, at any time in the period ending on the
91st day after the date of deposit;

         (e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a Lease Indenture Default under, any
material agreement or instrument (other than this Lease Indenture or any other
Financing Document) to which the Owner Lessor is a party or by which the Owner
Lessor is bound;

         (f) the Owner Lessor shall have delivered to the Security Agent an
Opinion of Counsel to the effect that (subject to customary qualifications and
assumptions) after the 91st day following the deposit, the trust funds will not
be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;

         (g) the Owner Lessor shall have delivered to the Security Agent an
Officer's Certificate stating that the deposit was not made by the Owner Lessor
with the intent of preferring the Noteholders or the issuer of the Debt Service
Reserve Letter of Credit over any other creditors of the Owner Lessor or with
the intent of defeating, hindering, delaying or defrauding creditors of the
Owner Lessor or others; and

         (h) the Owner Lessor shall have delivered to the Lease Indenture
Trustee and the Security Agent an Officer's Certificate and an Opinion of
Counsel, each stating that, subject to customary assumptions and exclusions, all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.

SECTION 11.5               DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD
                           IN TRUST; OTHER MISCELLANEOUS PROVISIONS

                  Subject to Section 11.6 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Security

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Agent (or other qualifying trustee or agent) pursuant to Section 11.4 hereof
in respect of the outstanding Lessor Notes or outstanding amounts due under
the Debt Service Reserve Letter of Credit shall be held in trust and applied
by the Security Agent, in accordance with the provisions of such Lessor Notes
and this Lease Indenture, to the payment, either directly or through any
Paying Agent [(including the Owner Lessor acting as Paying Agent)], to the
Noteholders of such Lessor Notes of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such money need not
be segregated from other funds except to the extent required by law or the
issuer of the Debt Service Reserve Letter of Credit.

                  The Owner Lessor agrees to pay and indemnify the Lease
Indenture Trustee and the Security Agent against any tax, fee or other charge
imposed on or assessed against the cash or non-callable Government Securities
deposited pursuant to Section 11.4 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Noteholders of the outstanding Lessor Notes.

                  Anything in this Article 11 to the contrary notwithstanding,
the Lease Indenture Trustee or the Security Agent shall deliver or pay to the
Owner Lessor from time to time upon the request of the Owner Lessor any money or
non-callable Government Securities held by it as provided in Section 11.4 hereof
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the Lease
Indenture Trustee (which may be the opinion delivered under Section 11.4(a)
hereof), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

SECTION 11.6               REPAYMENT TO OWNER LESSOR

                  Any money deposited with the Security Agent or any Paying
Agent, or then held by the Owner Lessor in trust for the payment of the
principal of, premium, if any, or interest on any Lessor Note and remaining
unclaimed for two years after such principal, and premium, if any, or interest
has become due and payable shall be paid to the Owner Lessor on its request or
(if then held by the Owner Lessor) shall be discharged from such trust; and the
Noteholder of such Lessor Note shall thereafter, as a secured creditor, look
only to the Owner Lessor for payment thereof, and all liability of the Security
Agent or such Paying Agent with respect to such trust money, and all liability
of the Owner Lessor as trustee thereof, shall thereupon cease; PROVIDED,
HOWEVER, that the Security Agent or such Paying Agent, before being required
to make any such repayment, may at the expense of the Owner Lessor cause to be
published once, in The New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30

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days from the date of such notification or publication, any unclaimed balance
of such money then remaining will be repaid to the Owner Lessor.

SECTION 11.7               REINSTATEMENT

                  If the Security Agent or Paying Agent is unable to apply any
United States dollars or non-callable Government Securities in accordance with
Section 11.2 or 11.3 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Owner Lessor's obligations
under this Lease Indenture and the Lessor Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 11.2 or 11.3 hereof until
such time as the Security Agent or Paying Agent is permitted by such court or
governmental authority to apply all such money in accordance with Section 11.2
or 11.3 hereof, as the case may be; PROVIDED, HOWEVER, that, if the Owner Lessor
makes any payment of principal of, premium, if any, or interest on any Lessor
Note following the reinstatement of its obligations, the Owner Lessor shall be
subrogated to the rights of the Noteholders of such Lessor Notes to receive such
payment from the money held by the Security Agent or Paying Agent.

                                   ARTICLE XII

                                  MISCELLANEOUS

SECTION 12.1               TERMINATION OF INDENTURE

                  Upon payment in full of the principal of and interest on, and
all other amounts payable to the Noteholders hereunder, under all Lessor Notes
and under the Operative Documents and to the issuer of the Debt Service Letter
of Credit, the Security Agent shall execute and deliver to the Owner Lessor an
appropriate instrument releasing the Indenture Estate from the Lien of this
Lease Indenture and releasing the Indenture Estate Documents from the assignment
and pledge thereof hereunder, and the Security Agent shall execute and deliver
such instrument as aforesaid and, at the Owner Lessor's expense, will execute
and deliver such other instruments or documents as may be reasonably requested
by the Owner Lessor to give effect to such release; PROVIDED, HOWEVER, that this
Lease Indenture shall earlier terminate and shall be of no further force or
effect upon any sale or other final disposition by the Security Agent of all
property constituting part of the Indenture Estate and the final distribution by
the Security Agent of all moneys or other property or proceeds constituting part
of the Indenture Estate in accordance with the terms hereof. Further, upon the
purchase or redemption of the Lessor Notes pursuant to Section 4.7 or 4.8
hereof, and receipt by the Lease Indenture Trustee and then the Security Agent
of a certificate from each Noteholder to the effect that all sums

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payable to the Noteholders hereunder and under the Operative Documents, the
Security Agent shall execute and deliver to the Owner Lessor an appropriate
instrument releasing the Indenture Estate from the Lien of this Lease
Indenture and releasing the Indenture Estate Documents from the assignment
and pledge hereunder, and the Security Agent shall execute and deliver such
instruments as aforesaid. Except as otherwise provided in this Section 12.1,
this Lease Indenture and the Lien created by this Lease Indenture shall
continue in full force and effect in accordance with the terms hereof.
Promptly upon receipt by a Noteholder of payment in full of the principal of
and interest on the Lessor Notes held by it, and all other amounts payable to
it hereunder, under the Lessor Notes and under the Operative Documents and
under the Debt Service Reserve Letter of Credit such Noteholder shall deliver
the appropriate certificate contemplated by the foregoing sentences of this
Section 12.1 to be delivered by it.

SECTION 12.2               NOTICES

                  Any notice or communication by the Owner Lessor, the Lease
Indenture Trustee and the Security Agent to the others is duly given if in
writing and delivered in Person or mailed by first class mail (registered or
certified, return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, to the others' address.

                  If to the Owner Lessor:

                  Homer City Funding LLC
                  18101 Von Karman Avenue
                  Suite 1700
                  Irvine, CA  92612-1046
                  Attention:  Treasurer
                  Facsimile:  949-752-5624

                  With a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, New York  10036-6522
                  Attention:  Harold F. Moore, Esq.
                  Facsimile:  212-735-2000

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                  If to the Lease Indenture Trustee or the Security Agent:

                  The Bank of New York
                  114 West 47th Street
                  25th Floor
                  New York, New York  10036
                  Attention:  Corporate Trust Division
                  Facsimile:  212-852-1625

                  The Owner Lessor, the Lease Indenture Trustee or the Security
Agent, by notice to the others may designate additional or different addresses
for subsequent notices or communications.

                  All notices and communications (other than those sent to
Noteholders) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; five Business Days after being deposited in the
mail, postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.

                  Any notice or communication to a Lease Indenture Secured Party
shall be mailed by first class mail, certified or registered, return receipt
requested, or by overnight air courier guaranteeing next day delivery to its
address shown on the register kept by the Registrar.

                  If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it, except for notices or communications to the Security Agent or the
Lease Indenture Trustee, which shall be effective only upon actual receipt
thereof.

                  If the Owner Lessor mails a notice or communication to
Noteholders, it shall mail a copy to the Lease Indenture Trustee, the Security
Agent and each Agent at the same time.

SECTION 12.3               RULES BY LEASE INDENTURE TRUSTEE AND AGENTS

                  The Lease Indenture Trustee may make reasonable rules for
action by or at a meeting of Noteholders. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.

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SECTION 12.4               NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
                           EMPLOYEES AND SHAREHOLDERS

                  No director, officer, employee, incorporator, shareholder or
Affiliate of the Owner Lessor, as such, shall have any liability for any
obligations of the Owner Lessor under the Lessor Notes, this Lease Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Noteholder of Lessor Notes by accepting a Lessor Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Lessor Notes. Such waiver may not be effective
to waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.

SECTION 12.5               GOVERNING LAW

                  THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS LEASE INDENTURE AND THE LESSOR NOTES EXCEPT TO THE EXTENT
THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA ARE MANDATORILY APPLICABLE UNDER
THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.

SECTION 12.6               NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS

                  This Lease Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Owner Lessor or its Subsidiaries or of
any other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Lease Indenture.

SECTION 12.7               SUCCESSORS

                  All agreements of the Owner Lessor in this Lease Indenture and
the Lessor Notes shall bind its successors. All agreements of the Lease
Indenture Trustee and the Security Agent in this Lease Indenture shall bind its
successors.

SECTION 12.8               SEVERABILITY

                  In case any provision in this Lease Indenture or in the Lessor
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

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SECTION 12.9               COUNTERPART ORIGINALS

                  The parties may sign any number of copies of this Lease
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.

SECTION 12.10              TABLE OF CONTENTS, HEADINGS, ETC

                  The Table of Contents, Cross-Reference Table and Headings
of the Articles and Sections of this Lease Indenture have been inserted for
convenience of reference only, are not to be considered a part of this Lease
Indenture and shall in no way modify or restrict any of the terms or
provisions hereof.

SECTION 12.11              CONCERNING THE OWNER MANAGER.

                  The Owner Manager is executing this Lease Indenture on
behalf of the Owner Lessor solely in its capacity as Owner Manager under the
Lessor LLC Agreement and not in its individual capacity (except as expressly
stated herein) and in no case shall the Trust Company (or any successor
entity acting as Owner Manager under the Lessor LLC Agreement) be personally
liable for or on account of any of the statements, representations,
warranties, covenants or obligations stated to be those of the Owner Lessor
or the Owner Manager hereunder, all such liability, if any, being expressly
waived by the parties hereto and any Person claiming by, through, or under
such party; PROVIDED, HOWEVER, that the Trust Company (or any such successor
Owner Manager) shall be personally liable hereunder for its own gross
negligence or willful misconduct or for its breach of its covenants,
representations and warranties contained herein, to the extent covenanted or
made in its individual capacity.

SECTION 12.12              ACKNOWLEDGEMENT.

                  In order to secure the Fundco Bonds of the Lender, the
Lender will assign and grant a first priority security interest in favor of
the Bondholder Trustee in and to all of the Lender's right, title and
interest to and under the Lessor Notes. The Owner Lessor hereby consents to
such assignment and to the creation of such Lien and security interest and
acknowledges receipt of copies of the Fundco Indenture. In addition, the
Lender has granted to the Bondholder Trustee a power of attorney to, among
other things, take any action with respect to and exercise any rights or
remedies of the Lender under the Lessor Notes and this Lease Indenture and
has assigned to the Bondholder Trustee its rights to receive any and all
payments on and in respect of the Lessor Notes and this Lease Indenture for
as long as the estate created by the Fundco Indenture remains in existence.
The Owner Lessor hereby acknowledges and consents to such power of attorney
and assignment and further agrees that all amounts due to the Lender under
the Lessor Notes and this Lease Indenture will be paid directly to the
Bondholder Trustee. Unless and until the Lien of the Fundco Indenture shall
have been discharged, the Bondholder Trustee shall have the right to exercise
the rights of the Lender under this Lease Indenture and to directly receive
for application in accordance with the Fundco Indenture all amounts payable
or otherwise distributable with respect to the Lessor Notes or this Lease
Indenture.

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                                   SIGNATURES

Dated as of December __, 2001

                                            THE BANK OF NEW YORK, as Lease
                                            Indenture Trustee

                                            By:_________________________________
                                                 Name:
                                                 Title:

                                            THE BANK OF NEW YORK, as Security
                                            Agent

                                            By:_________________________________
                                                 Name:
                                                 Title:

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                                            Homer City OL1 LLC, as Owner
                                            Lessor

                                            By: Wilmington Trust Company, not
                                                in its individual capacity, but
                                                solely as Owner Manager under
                                                the LLC Agreement

                                            By:______________________________
                                               Name:
                                               Title:

                  FUTURE ADVANCES, 42 PA. C.S. Section 8143. This Mortgage shall
         secure any additional loans as well aS any and all present or future
         advances and readvances under this Lease Indenture, made by _________
         to or for the benefit of the Owner Lessor or the Mortgaged Property,
         all of which shall be entitled to the benefits of an Open-End Mortgage
         under 42 Pa.C.S.A. Section 8143 and shall have the same lien priority
         as if the future loans, advances or readvances were made as of the date
         hereof including, without limitation: (i) principal, interest, late
         charges, fees and other amounts due under this Lease Indenture; (ii)
         all advances by ___________ to Mortgagor or any other person to pay
         costs of erection, construction, alteration, repair, restoration,
         maintenance and completion of any improvements on the Mortgaged
         Property; (iii) all advances made or costs incurred by _________ for
         the payment of real estate taxes, assessments or other governmental
         charges, maintenance charges, insurance premiums, appraisal charges,
         environmental inspection, audit, testing or compliance costs, and costs
         incurred by ___________ for the enforcement and protection of the
         Mortgaged Property or the lien of this Mortgage; and (iv) all legal
         fees, costs and other expenses incurred by ___________ by reason of any
         default or otherwise in connection with this Lease Indenture.

                  42 PA. C.S. Section 8144. In addition to any other
         indebtedness secured hereby, this Mortgage secureS unpaid balances of
         advances made with respect to the Mortgaged Property, for the payment
         of taxes, assessments, maintenance charges, insurance premiums or
         costs incurred for the protection of the Mortgaged Property or the
         lien of this Mortgage, expenses incurred by ______________ by reason
         of default by the ____________ under this Mortgage or advances made
         under a construction loan to enable  completion of the improvements for
         which the construction loan was originally made. This Mortgage shall be
         a lien on the Mortgaged Property from the time the Mortgage is left for
         record, or the time of  delivery to the __________ of a Purchase Money
         Mortgage which is recorded within ten days after its date, for the full
         amount of the unpaid balances of such advances that are made under this
         Mortgage, plus interest thereon, regardless of the time when such
         advances are or may be made.

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                                                   EXHIBIT A to Lease Indenture

                           FORM OF INITIAL LESSOR NOTES

                            THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
                  BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
                  EXCEPT WHILE SUCH A REGISTRATION IS IN EFFECT OR
                   PURSUANT TO AN EXEMPTION FROM REGISTRATION
                                 UNDER SAID ACT

                             Homer City OL1 LLC
                              as Owner Lessor

                        SERIES [A] [B] LESSOR NOTE DUE [ ]

                  $[___________] December, 20_

                  Homer City OL1 LLC (herein called the "OWNER LESSOR", which
term includes any successor person under the Indenture hereinafter referred
to), a Delaware limited liability company and wholly-owned subsidiary of
[General Electric Capital Corporation], a [Delaware] limited liability
company (the "OWNER PARTICIPANT") acting pursuant to that certain LLC
Agreement (__) effective as of September __, 2001 (as the same may from time
to time be amended, amended and restated, supplemented or otherwise modified
in accordance with the terms thereof and, where applicable, the terms of the
other Operative Documents, the "LESSOR LLC AGREEMENT") between the Owner
Participant and Wilmington Trust Company (the "TRUST COMPANY"), hereby
promises to pay to [________________________]
[, as Lease Indenture Trustee/Paying Agent,] or its registered assigns, the
principal sum of [_____________] Dollars, which is due and payable in a
series of installments of principal on the Payment Dates and in the amounts
set forth in Annex A hereto; PROVIDED, HOWEVER, that the final principal
payment hereon shall in any and all events equal the then outstanding
principal balance hereof. Interest shall be due and payable in arrears on
each Interest Payment Date and on the date the Lessor Note is paid in full at
the rate of [ ]% per annum on the unpaid principal amount hereof from time to
time outstanding from and including the date hereof until such principal
amount is paid in full. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months. This Lessor Note shall bear interest, to the
extent permitted by

                                      83

<Page>

Requirements of Law, at a rate that is 1% per annum in excess of the rate
then in effect on any part of the principal amount hereof and on any
interest, Make-Whole Premium or other amounts due hereunder, not paid when
due (whether at stated maturity, by acceleration or otherwise), for the
period the same is past due, payable on demand of the holder hereof.

                  Capitalized terms used in this Lessor Note which are not
otherwise defined herein shall have the meanings ascribed thereto in the
Indenture of Trust, Mortgage and Security Agreement, dated as of December __,
2001 (as the same may from time to time be amended, amended and restated,
supplemented or otherwise modified in accordance with the terms thereof and,
where applicable, the terms of the other Operative Documents, the " LEASE
INDENTURE"), between the Owner Lessor and The Bank of New York, not in its
individual capacity but solely as trustee (the "LEASE
INDENTURE TRUSTEE").

                  All payments of principal and interest and all other
amounts to be made by the Owner Lessor hereunder or under the Lease Indenture
shall be made only from the income and proceeds from the Indenture Estate and
the Owner Lessor and Lease Indenture Trustee shall have no obligation for the
payment thereof except to the extent that the Lease Indenture Trustee shall
have sufficient income or proceeds from the Indenture Estate to enable such
payments to be made in accordance with the terms of the Lease Indenture. Each
holder hereof, by its acceptance of this Lessor Note, agrees that (a) it will
look solely to the income and proceeds from the Indenture Estate to the
extent available for distribution to the holder hereof as above provided, (b)
none of the Lease Indenture Trustee, Owner Participant, the Equity Investor,
any OP Guarantor, the Owner Manager or the Trust Company, or any Affiliate of
any thereof, is, or shall be, personally liable to the holder hereof for any
amounts payable under this Lessor Note or under the Lease Indenture or for
any liability under the Lease Indenture, except as expressly provided in the
Lease Indenture and (c) any such amounts shall be non-recourse to the assets
of each of the Lease Indenture Trustee, the Owner Participant, the Equity
Investor, any [OP Guarantor], the Owner Manager or the Trust Company, or any
Affiliate of any thereof.

                  Principal, Make-Whole Premium (if any) and interest and
other amounts due hereunder or under the Lease Indenture shall be payable in
Dollars by wire transfer of immediately available funds on the due date
thereof to the Security Agent's Account (by wire transfer of immediately
available funds if not otherwise specified) or to such other account as the
holder hereof shall have designated to the Owner Lessor in writing. Payment
to the Lease Indenture Trustee must be received by 12:00 noon, New York City
time. If any sum payable hereunder or under the Lease Indenture falls due on
a day which is not a Business Day, then such sum shall be payable on the next
succeeding Business Day and, if paid on such Business Day,

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the payment thereof shall be without penalty or interest (unless calculation
of such amount is based on actual days elapsed) or other adjustment.

                  The holder hereof, by its acceptance of this Lessor Note,
agrees that each payment of principal and interest or other amounts received
by it hereunder shall be applied, first, to the payment of interest on this
Lessor Note (as well as any interest on overdue principal, and, to the extent
permitted by law, interest and other amounts hereunder) due and payable to
the date of such payment as hereinabove provided, second, to the payment of
the principal of, and Make-Whole Premium, if any, then due hereunder, and
third, to the extent permitted under the Lease Indenture, the balance, if
any, remaining thereafter, to the payment of the principal amount of, and
Make-Whole Premium, if any, hereunder.

                  This Lessor Note is one of the Lessor Notes, and one of the
Initial Lessor Notes, referred to in the Lease Indenture which have been or
are to be issued by the Owner Lessor pursuant to the terms of the Lease
Indenture. The Indenture Estate is held by the Lease Indenture Trustee as
security for the Lessor Notes. Reference is hereby made to the Lease
Indenture for a statement of the rights and obligations of the holder of, and
the nature and extent of the security for, this Lessor Note and of the rights
and obligations of the Noteholders of, and the nature and extent of the
security for, the other Lessor Notes, as well as for a statement of the terms
and conditions of the trusts created thereby. By its acceptance of this
Lessor Note, each holder hereof agrees to all of the terms and conditions in
the Lease Indenture and in the Participation Agreement referred to therein
expressed to be binding on the Lease Indenture Trustee or a holder of a
Lessor Note.

                  There shall be maintained a register for the purpose of
registering this Lessor Note and registering transfers and exchanges of
Lessor Notes in the manner provided in Section 2.11 of the Lease Indenture.
As provided in the Lease Indenture and subject to certain limitations therein
set forth, the Lessor Notes are exchangeable for Lessor Notes of the same
series, of any authorized denominations and of like aggregate original
principal amount, as requested by the holder hereof surrendering the same.

                  Except as otherwise provided in Section 2.11 of the Lease
Indenture, prior to the due presentment for registration of transfer of this
Lessor Note, the Owner Lessor and the Lease Indenture Trustee shall deem and
treat the Person in whose name this Lessor Note is registered on the register
as the absolute owner and holder hereof for the purpose of receiving payment
of all amounts payable with respect to this Lessor Note and for all other
purposes whether or not this Lessor Note is overdue, and neither the Owner
Lessor nor any holder hereof shall be affected by any notice to the contrary.
All payments made on this Lessor Note in accordance with the provisions of
this paragraph shall be valid and effective to satisfy and

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discharge the liability on this Lessor Note to the extent of the sums so paid
and neither the Lease Indenture Trustee nor the Owner Lessor shall have any
liability in respect of such payment.

                  This Lessor Note is subject to redemption solely as
required by Sections 4.7 and 4.8 of the Lease Indenture, to purchase by the
Owner Lessor or the Owner Participant as provided in Section ___ of the
Indenture and to assumption by the Facility Lessee in accordance with Section
2.21 of the Lease Indenture. If at any time a Lease Indenture Event of
Default shall have occurred and be continuing, this Lessor Note may, subject
to certain rights of the Owner Lessor and Owner Participant contained or
referred to in the Lease Indenture, be declared, and under certain
circumstances shall automatically be deemed to be declared, due and payable,
all upon the conditions, in the manner and with the effect provided in the
Lease Indenture.

                  By its acceptance hereof, the holder of this Lessor Note
agrees that the Owner Manager is executing this Lessor Note on behalf of the
Owner Lessor solely in its capacity as Owner Manager under the Lessor LLC
Agreement and not in its individual capacity and in no case shall the Trust
Company (or any entity acting as Owner Manager under the Lessor LLC
Agreement) be personally liable in respect of the obligations stated to be
those of the Owner Lessor or the Owner Participant hereunder.

                  In circumstances set forth in Section 2.21 of the
Indenture, the obligations of the Owner Lessor under this Lessor Note may,
subject to the conditions set forth in Section 2.21 of the Lease Indenture,
be assumed in whole by the Facility Lessee in accordance with Section 2.21 of
the Lease Indenture, in which case the Owner Lessor shall be released and
discharged from all such obligations. In connection with such an assumption,
the holder of this Lessor Note may be required to exchange this Lessor Note
for a new Lessor Note evidencing such assumption.

                  THIS LESSOR NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE, WITH THE LAWS OF THE STATE OF NEW YORK.

                                      86

<Page>

                  IN WITNESS WHEREOF, the Owner Lessor has caused this Lessor
Note to be executed in its name by the Owner Manager by an officer of the Owner
Manager thereunto duly authorized, as of the date hereof.

                                          Homer City OL1 LLC, as Owner Lessor

                                          By: Wilmington Trust Company
                                          not in its individual capacity, but
                                          solely as Owner Manager under the LLC
                                          Agreement

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

                                      87

<Page>

                          SCHEDULE OF SCHEDULED PAYMENTS OF PRINCIPAL

                    [Attach the following table for Series A Lessor Notes]
<Table>
<Caption>
------------------------------------------------------ ---------------------------------------------------------------
               PRINCIPAL PAYMENT DATES                                 PERCENTAGE OF PRINCIPAL AMOUNT
                                                                     PAYABLE ON EACH PRINCIPAL PAYMENT
                                                                                    DATE
           <S>                                                                   <C>
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2004                                           1.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2005                                           2.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2006                                           2.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2007                                           2.500%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2008                                           3.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2009                                           3.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2010                                           3.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2011                                           3.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2012                                           3.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2013                                           3.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2014                                           3.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2015                                           4.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2016                                           4.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2017                                           5.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2018                                           5.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2019                                           3.500%
------------------------------------------------------ ---------------------------------------------------------------
</Table>

                                      A-2-1

<Page>

                   [Attach the following table for Series B Lessor Notes]
<Table>
<Caption>
------------------------------------------------------ ---------------------------------------------------------------
               PRINCIPAL PAYMENT DATES                                 PERCENTAGE OF PRINCIPAL AMOUNT
                                                                     PAYABLE ON EACH PRINCIPAL PAYMENT
                                                                                    DATE
           <S>                                                                   <C>
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2004                                           0.055%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2005                                           0.480%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2006                                           0.590%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2007                                           0.375%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2008                                           0.375%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2009                                           0.415%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2010                                           1.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2011                                           1.750%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2012                                           2.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2013                                           1.250%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2014                                           1.500%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2015                                           2.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2016                                           2.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2017                                           2.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2018                                           2.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2019                                           2.500%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2020                                           3.500%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2021                                           3.500%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2022                                           3.500%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2023                                           4.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2024                                           4.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2025                                           5.000%
------------------------------------------------------ ---------------------------------------------------------------
             April 1 and October 1, 2026                                           6.210%
------------------------------------------------------ ---------------------------------------------------------------
</Table>

                                      A-2-2

<Page>

                                 ASSIGNMENT FORM

To assign this Lessor Note, fill in the form below: (I) or (we) assign and
transfer this Lessor Note to

--------------------------------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)

and irrevocably appoint
                       ---------------------------------------------------------
to transfer this Lessor Note on the books of the Owner Lessor. The agent may
substitute another to act for him.

--------------------------------------------------------------------------------

Date:
     ------------------

                                           Your signature:
                                                          ----------------------
                                           (Sign exactly as your name appears on
                                           the face of this Lessor Note)

                                           Tax Identification No.:
                                                                  --------------

                                           SIGNATURE GUARANTEE:

                                           -------------------------------------

                                           Signatures must be guaranteed by an
                                           "eligible guarantor institution"
                                           meeting the requirements of the
                                           Registrar, which requirements include
                                           membership or participation in the
                                           Security Transfer Agent Medallion
                                           Program ("STAMP") or such other
                                           "signature guarantee program" as may
                                           be determined by the Registrar in
                                           addition to, or in substitution for,
                                           STAMP, all in accordance with the
                                           Securities Exchange Act of 1934, as
                                           amended.

                                      A-2-3

<Page>

          SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL BOND

                  The following exchanges of a part of this Regulation S
Temporary Global Bond for an interest in another Global Bond for an interest
in this Regulation S Temporary Global Bond, have been made:
<Table>
<Caption>
                                                                           Principal Amount
                                Amount of          Amount of increase     of this Global Bond
                               decrease in            in Principal          following such
                            Principal Amount         Amount of this          decrease (or
Date of Exchange           of this Global Bond        Global Bond              increase
---------------------    -----------------------  --------------------   ---------------------
<S>                        <C>                     <C>                    <C>

</Table>

                                      A-2-4

<Page>

                                       C-1<Page>

--------------------------------------------------------------------------------

                                  EXHIBIT 4.3

                            FACILITY LEASE AGREEMENT

                                      (--)

                         Dated as of December ___, 2001

                                     between

                               HOMER CITY OL[1] LLC,
                                 as Owner Lessor

                                       and

                          EME HOMER CITY GENERATION L.P.
                               as Facility Lessee

                          HOMER CITY GENERATING STATION
       1,884 Megawatt (net), Coal-Fired Electric Generation Power Facility
                              Located northeast of
                            Pittsburgh, Pennsylvania

--------------------------------------------------------------------------------
CERTAIN OF THE RIGHT, TITLE AND INTEREST OF THE OWNER LESSOR IN AND TO THIS
LEASE AND THE RENT DUE AND TO BECOME DUE HEREUNDER HAVE BEEN ASSIGNED AS
COLLATERAL SECURITY TO, AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF
LENDER, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS LEASE INDENTURE TRUSTEE
UNDER AN INDENTURE OF TRUST, MORTGAGE AND SECURITY AGREEMENT, DATED AS OF
DECEMBER __, 2001 BETWEEN SAID LEASE INDENTURE TRUSTEE, AS SECURED PARTY, FOR
THE BENEFIT OF THE HOLDERS THEREUNDER, AND THE OWNER LESSOR, AS DEBTOR. SEE
SECTION 21 HEREOF FOR INFORMATION CONCERNING THE RIGHTS OF THE HOLDERS OF THE
VARIOUS COUNTERPARTS HEREOF.

<Page>

                                TABLE OF CONTENTS
<Table>
<Caption>
                                                                                                               Page
<S>           <C>                                                                                              <C>
Section 1     DEFINITIONS.........................................................................................2

Section 2     LEASE OF THE UNDIVIDED INTEREST.....................................................................2

Section 3     FACILITY LEASE TERM AND RENT........................................................................2

              Section 3.1        BASIC LEASE TERM.................................................................2
              Section 3.2        RENT.............................................................................2
              Section 3.3        SUPPLEMENTAL LEASE RENT..........................................................4
              Section 3.4        ADJUSTMENT OF BASIC LEASE RENT AND TERMINATION VALUE.............................4
              Section 3.5        Manner of Payments...............................................................6

Section 4     DISCLAIMER OF WARRANTIES; RIGHT OF QUIET ENJOYMENT..................................................7

              Section 4.1        Disclaimer of Warranties.........................................................7
              Section 4.2        QUIET ENJOYMENT..................................................................9

Section 5     RETURN OF UNDIVIDED INTEREST........................................................................9

              Section 5.1        RETURN...........................................................................9
              Section 5.2        CONDITION UPON RETURN............................................................9
              Section 5.3        EXPENSES........................................................................13

Section 6     LIENS..............................................................................................13

Section 7     MAINTENANCE; REPLACEMENTS OF COMPONENTS............................................................13

              Section 7.1        MAINTENANCE.....................................................................13
              Section 7.2        REPLACEMENT OF COMPONENTS.......................................................14
              Section 7.3        ENVIRONMENTAL MATTERS...........................................................15

Section 8     IMPROVEMENTS.......................................................................................16

              Section 8.1        REQUIRED IMPROVEMENTS...........................................................16
              Section 8.2        OPTIONAL IMPROVEMENTS...........................................................17
              Section 8.3        TITLE TO IMPROVEMENTS...........................................................17
              Section 8.4        FINANCING OF IMPROVEMENTS.......................................................18

Section 9     NET LEASE..........................................................................................18

Section 10    EVENTS OF LOSS.....................................................................................20

              Section 10.1       OCCURRENCE OF EVENTS OF LOSS....................................................20
              Section 10.2       Payment Upon Termination; Special Lessee Transfer...............................20
<Page>

              Section 10.3       APPLICATION OF PROCEEDS.........................................................23
              Section 10.4       Rebuilding or Replacement.......................................................24
              Section 10.5       Application of Payments Not Relating to an Event of Loss........................25
              Section 10.6       Partial Casualties..............................................................25

Section 11    INSURANCE..........................................................................................26

              Section 11.1       General.........................................................................26
              Section 11.2       Application of Insurance Proceeds...............................................26

Section 12    INSPECTION.........................................................................................27

Section 13    TERMINATION OPTION FOR BURDENSOME EVENTS...........................................................27

              Section 13.1       ELECTION TO TERMINATE...........................................................28
              Section 13.2       SOLICITATION OF QUALIFYING BIDS; PAYMENTS UPON TERMINATION......................29
              Section 13.3       PROCEDURE FOR EXERCISE OF TERMINATION OPTION....................................30
              Section 13.4       Assumption of the Lessor Notes; Special Lessee Transfers .......................31

Section 14    TERMINATION FOR OBSOLESCENCE; PARTIAL RELEASE OF INTEREST..........................................32

              Section 14.1       TERMINATION.....................................................................32
              Section 14.2       SOLICITATION OF OFFERS..........................................................32
              Section 14.3       RIGHT OF OWNER LESSOR TO RETAIN THE UNDIVIDED INTEREST..........................33
              Section 14.4       PROCEDURE FOR EXERCISE OF TERMINATION OPTION....................................33

Section 15    LEASE RENEWAL......................................................................................34

              Section 15.1       RENEWAL LEASE TERMS.............................................................34
              Section 15.2       FAIR MARKET VALUE RENEWAL LEASE TERMS...........................................36
              Section 15.3       RENEWAL RENT AND TERMINATION VALUE FOR RENEWAL LEASE TERM.......................36
              Section 15.4       DETERMINATION OF FAIR MARKET RENTAL VALUE.......................................37
              Section 15.5       TERMINATION VALUE DURING RENEWAL LEASE TERMS....................................37

Section 16    EVENTS OF DEFAULT..................................................................................37

Section 17    REMEDIES...........................................................................................41

              Section 17.1       REMEDIES FOR LEASE EVENT OF DEFAULT.............................................41
              Section 17.2       CUMULATIVE REMEDIES.............................................................44

                                       ii
<Page>

              Section 17.3       NO DELAY OR OMISSION TO BE CONSTRUED AS WAIVER..................................44

Section 18    SECURITY INTEREST AND INVESTMENT OF SECURITY FUNDS.................................................44

Section 19    RIGHT TO SUBLEASE..................................................................................45

              Section 19.1       SUBLEASE........................................................................45

Section 20    OWNER LESSOR'S RIGHT TO PERFORM....................................................................46

Section 21    SECURITY FOR OWNER LESSOR'S OBLIGATION TO THE LEASE INDENTURE TRUSTEE..............................47

Section 22    MISCELLANEOUS......................................................................................47

              Section 22.1       AMENDMENTS AND WAIVERS..........................................................47
              Section 22.2       NOTICES.........................................................................47
              Section 22.3       SURVIVAL........................................................................48
              Section 22.4       SUCCESSORS AND ASSIGNS..........................................................48
              Section 22.5       TRUE LEASE; SEPARATE LEGAL OBLIGATIONS..........................................50
              Section 22.6       GOVERNING LAW...................................................................51
              Section 22.7       SEVERABILITY....................................................................51
              Section 22.8       COUNTERPARTS....................................................................51
              Section 22.9       HEADINGS AND TABLE OF CONTENTS..................................................51
              Section 22.10      FURTHER ASSURANCES..............................................................51
              Section 22.11      EFFECTIVENESS...................................................................51
              Section 22.12      LIMITATION OF LIABILITY.........................................................52
              Section 22.13      MEASURING LIFE..................................................................52

EXHIBITS AND SCHEDULES

Exhibit A               Description of Facility Site
Exhibit B               Description of Facility
Schedule 1-1            Basic Lease Rent
Schedule 1-2            Allocated Rent
Schedule 1-3            467 Rent Allocation
Schedule 2              Termination Values
Schedule 3              Stipulated Loss Values
Schedule 5.2(d)         Return Items

</Table>

                                       iii
<Page>

                            FACILITY LEASE AGREEMENT

                  This FACILITY LEASE AGREEMENT, dated as of September __, 2001
(as amended, supplemented or otherwise modified from time to time and in
accordance with the provisions hereof, this "FACILITY LEASE"), between GE LLC, a
Delaware limited liability company (together with its successors and permitted
assigns, the "OWNER LESSOR") created for the benefit of [GE Capital Owner
Participant][Full Service Leasing Corporation Owner Participant], a Delaware
corporation (together with its successors and permitted assigns, the "OWNER
PARTICIPANT"), and EME Homer City Generation L.P., a Pennsylvania limited
partnership (together with its successors assigns, the "FACILITY LESSEE" or
"HOMER CITY").

                                   WITNESSETH:

                  WHEREAS, the Facility Lessee owns the Facility Site which is
more particularly described in Exhibit A hereto, such Exhibit A being attached
to this Facility Lease as a part hereof;

                  WHEREAS, pursuant to the Facility Site Lease, Homer City has
leased the Ground Interest and granted certain non-exclusive easements to the
Owner Lessor for the Facility Lease Term;

                  WHEREAS, pursuant to the Facility Site Sublease, the Owner
Lessor has leased the Ground Interest to Homer City for the term equal to the
term of this Facility Lease, including any renewals hereof;

                  WHEREAS, the Facility is located on the Facility Site and is
more particularly described in Exhibit B hereto, such Exhibit B being attached
to this Facility Lease as a part hereof;

                  WHEREAS, pursuant to the Facility Deed and the Bill of Sale,
the Owner Lessor has acquired from the Facility Lessee an undivided ownership
interest in the Facility, with the right to nonexclusive possession of the
Facility including an entitlement share in the electrical capacity and output of
the Facility equal to the Owner Lessor's Percentage (such undivided ownership
interest and entitlement share together, the "UNDIVIDED INTEREST");

                  WHEREAS, the Facility does not include the Facility Site or
any part thereof, and the Facility Site is being leased to the Owner Lessor
pursuant to the Facility Site Lease and is being subleased to the Facility
Lessee pursuant to the Facility Site Sublease; and

                  WHEREAS, pursuant to this Facility Lease, the Owner Lessor
will lease the Undivided Interest to the Facility Lessee for the Basic Lease
Term and the Renewal Lease Terms, if any, provided herein.

<Page>

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

SECTION 1         DEFINITIONS

                  Capitalized terms used in this Facility Lease, including those
in the recitals, and not otherwise defined herein shall have the respective
meanings set forth in Appendix A to that certain Participation Agreement (P1),
dated as of December ___, 2001 (the "PARTICIPATION AGREEMENT"), among the
Facility Lessee, the Owner Lessor, the Owner Manager, the Owner Participant, The
Bank of New York, as successor to United States Trust Company of New York, as
Existing Trustee, Lender, Bondholder Trustee, Security Agent and Lease Indenture
Trustee unless the context hereof shall otherwise require. The general
provisions of Appendix A to the Participation Agreement shall apply to the terms
used in this Facility Lease and not specifically defined herein.

SECTION 2         LEASE OF THE UNDIVIDED INTEREST

                  Upon the terms and conditions set forth herein, the Owner
Lessor hereby leases the Undivided Interest to the Facility Lessee, and the
Facility Lessee hereby leases the Undivided Interest from the Owner Lessor, for
the Basic Lease Term and, subject to the Facility Lessee's exercise of any of
its options to renew this Facility Lease as provided in SECTION 15, one or more
Renewal Lease Terms. The Facility Lessee and the Owner Lessor understand and
agree that this Facility Lease is subject to those encumbrances set forth in the
Title Policies. The Undivided Interest shall be subject to the terms of this
Facility Lease from the date on which this Facility Lease is executed and
delivered.

SECTION 3        FACILITY LEASE TERM AND RENT

         SECTION 3.1       BASIC LEASE TERM. The basic lease term of this
Facility Lease (the "BASIC LEASE TERM") shall commence on the Closing Date
(the "BASIC LEASE COMMENCEMENT DATE") and shall continue for a period of 33
years and nine months, to and including _______ ___, 2034, subject to earlier
termination pursuant to SECTION 10, 13, 14 OR 17 hereof. The Facility Lessee
shall have the right to renew this Facility Lease in accordance with SECTION
15 hereof. The Basic Lease Term and the Renewal Lease Terms are referred to
as the "FACILITY LEASE TERM".

         SECTION 3.2       RENT

                  (a) . The Facility Lessee hereby agrees to pay to the Owner
Lessor lease rent payable with respect to the Basic Lease Term ("BASIC LEASE
RENT"). The Basic Lease Rent shall be paid by the Facility Lessee to the Owner
Lessor in installments in the amounts and on the dates (each a "RENT PAYMENT
DATE") shown on SCHEDULE 1-1 hereto. All Basic Lease Rent to be paid pursuant to
this SECTION 3.2 shall be payable in the manner set forth in SECTION 3.5 and
shall be adjusted from time to time in accordance with SECTION 3.4 hereof.
Renewal Rent, with respect to any exercised Renewal Lease

                                       2
<Page>

Term, shall be paid in accordance with the provisions of SECTION 15.3 hereof.
The term "BASIC LEASE RENT" is intended to constitute "fixed rent" (as such
term is defined in Treasury Regulation Section 1.467-1(h)(3)).

                  (b) Unless and until such time as adjustments are made
pursuant to Section 3.4, the Basic Lease Rent allocated to each period for the
use by the Facility Lessee of the Undivided Interest shall be the amount set
forth on SCHEDULE 1-2 hereto (the "ALLOCATED RENT"). Notwithstanding that Basic
Lease Rent is payable in accordance with SECTION 3.2(a), the Allocated Rent
allocated pursuant to this SECTION 3.2(b) shall represent and be the amount of
Basic Lease Rent for which the Facility Lessee becomes liable on account of the
use of the Undivided Interest for each calendar year in whole or in part of the
Basic Lease Term.

                  (c) It is the intention of the parties hereto that the
allocation of Basic Lease Rent to each Rent Payment Period as provided in
SECTION 3.2(b) constitutes a specific allocation of fixed rent within the
meaning of Treasury Regulation Section 1.467-1(c)(2)(ii)(a) with the effect that
pursuant to Treasury Regulation Section 1.467-1(d) and 1.467-2 the Owner Lessor
and the Facility Lessee, on any federal income tax returns filed by them (or on
any return on which their income is included), shall accrue the amounts of
rental income and rental expense, respectively, set forth for each Rent Payment
Period on SCHEDULE 1-3 hereto under the caption "Proportional Rent" (the
"PROPORTIONAL RENT"). Because there shall be from time to time a difference
between (i) the cumulative amount of Basic Lease Rent paid by the Facility
Lessee (as set forth in SECTION 3.2(a) and (ii) the cumulative amount of Basic
Lease Rent allocated pursuant to SECTION 3.2(b), there shall be considered to
exist a loan for purposes of Section 467 of the Code, the amount of which is
equal to the difference between the cumulative amount of Basic Lease Rent paid
by the Facility Lessee and the cumulative amount of the Proportional Rent
accrued by the Facility Lessee as set forth on SCHEDULE 1-3 hereto under the
caption "Section 467 Loan" (the "SECTION 467 LOAN"). If the applicable amount of
the Section 467 Loan set forth on SCHEDULE 1-3 hereto is positive, such amount
(the "LESSOR SECTION 467 LOAN BALANCE") represents a loan from the Facility
Lessee to the Owner Lessor; if the applicable amount of the Section 467 Loan set
forth on SCHEDULE 1-3 hereto is negative, such amount (the "LESSEE SECTION 467
LOAN BALANCE") represents a loan from the Owner Lessor to the Facility Lessee.
If there shall be a Lessor Section 467 Loan Balance, the Owner Lessor shall
deduct interest expense and the Facility Lessee shall accrue interest income, in
each case, in an amount equal to the amount set forth under the caption "Lessor
Section 467 Interest" for the applicable Rent Payment Period on SCHEDULE 1-3
hereto (the "LESSOR SECTION 467 INTEREST"). If there shall be a Lessee Section
467 Loan Balance, the Owner Lessor shall accrue interest income and the Facility
Lessee shall deduct interest expense, in each case, in an amount equal to the
amount set forth for the applicable Rent Payment Period on SCHEDULE 1-3 hereto
(the "LESSEE SECTION 467 INTEREST").

                  (d) If the Lease is terminated prior to the end of the Basic
Lease Term or the Lessee is otherwise required to pay Termination Value (or
amounts computed by reference thereto) (A) the Owner Lessor shall make a payment
to the Lessee on the applicable Termination Date equal to the Lessor Section 467
Loan Balance on such date, if any, and (B) the Lessee shall make a payment to
the Owner Lessor on the applicable

                                       3
<Page>

Termination Date equal to the Lessee Section 467 Loan Balance on such date,
if any. Notwithstanding the foregoing, either party may offset any Lessor
Section 467 Loan Balance owed by the Owner Lessor to the Lessee against the
amount of Termination Value (or amounts computed by reference thereto) due
and payable by the Lessee to the Owner Lessor on such date, and the Lessee
shall pay an amount equal to the excess of such Termination Value (or amounts
computed by reference thereto) over such Lessor Section 467 Loan Balance or
the Owner Lessor shall pay an amount equal to the excess of such Lessor
Section 467 Loan Balance over such Termination Value (or amounts computed by
reference thereto). The obligations of the Owner Lessor and the Lessee to
repay the Lessor Section 467 Loan Balance and the Lessee Section 467 Loan
Balance, respectively, shall, except as otherwise provided in this SECTION
3.2, survive termination of this Lease.

         SECTION 3.3       SUPPLEMENTAL LEASE RENT. The Facility Lessee also
agrees to pay, on an After-Tax Basis, to the Owner Lessor, or to any other
Person entitled thereto as expressly provided herein or in any other
Operative Document, as appropriate, any and all Supplemental Lease Rent,
promptly as the same shall become due and owing, or where no due date is
specified, promptly after demand by the Person entitled thereto, and in the
event of any failure on the part of the Facility Lessee to pay any
Supplemental Lease Rent, the Owner Lessor shall have all rights, powers and
remedies provided for herein or by law or equity or otherwise for the failure
to pay Basic Lease Rent. The Facility Lessee will also pay as Supplemental
Lease Rent, unless prohibited by any Requirement of Law, an amount equal to
interest at the applicable Overdue Rate (computed on the basis of a 360-day
year of twelve 30-day months) on any part of any payment of Basic Lease Rent
not paid when due for any period for which the same shall be overdue and on
any Supplemental Lease Rent not paid when due (whether on demand or
otherwise) for the period from such due date until the same shall be paid.
All Supplemental Lease Rent to be paid pursuant to this SECTION 3.3 shall be
payable in the manner set forth in SECTION 3.5.

         SECTION 3.4       ADJUSTMENT OF BASIC LEASE RENT AND TERMINATION
VALUE (a) The Facility Lessee and the Owner Lessor agree that Basic Lease
Rent, Allocated Rent, Proportional Rent, Lessor Section 467 Loan Balance,
Lessee Section 467 Loan Balance, Lessor Section 467 Interest, Lessee Section
467 Interest and Termination Values may be adjusted, either upwards or
downwards, at the request of the Facility Lessee or the Owner Participant in
the following situations: (i) after the Closing Date to reflect the change in
interest rate on any New Lessor Notes issued pursuant to SECTION 2.6 of the
Lease Indenture and (ii) in connection with the financing of improvements
through Additional Lessor Notes pursuant to Section 12.1(a)(iii) of the
Participation Agreement and (iii) to reflect the payments made pursuant to
Section 10.3(d) hereof.

                  (b) Any adjustments pursuant to this SECTION 3.4 shall be
calculated, (A) first, so as to maintain the Owner Participant's Net Economic
Return, the minimum and average Rent Service Coverage Ratios set forth in the
Closing Projections through the end of the Basic Lease Term, and the "operating
lease" treatment for the Facility Lessee and, (B) second at the option of the
Facility Lessee (x) to minimize the average annual Basic Lease Rent over the
Basic Lease Term for GAAP accounting purposes of the Facility Lessee and/or (y)
to minimize, to the extent possible, the net present value of the

                                       4
<Page>

Basic Lease Rent (PROVIDED, that with respect to GAAP earnings, the Owner
Participant shall not be obligated by any such adjustment to record a book
loss or reduce book earnings in the year of adjustment). Adjustments shall be
computed by the Owner Participant, using the same method of computation, Tax
Assumptions and Pricing Assumptions originally used (other than those that
have changed as a result of the event giving rise to the adjustment) in the
calculation of Basic Lease Rent, Allocated Rent, Proportional Rent, Lessor
Section 467 Loan Balance, Lessee Section 467 Loan Balance, Lessor 467
Interest, Lessee 467 Interest and Termination Values set forth in SCHEDULES
1-1, 1-2, 1-3 and SCHEDULE 2 hereto, respectively, but shall be subject to
the verification procedure described in SECTION 3.4(d) and shall be in
compliance with SECTION 467 of the Code and Rev. Proc. 2001-28, 2001-19 IRB
1156 or Rev. Proc. 2001-29, 2001-19 IRB 1160 except to the extent the
original transaction did not comply therewith.

                  (c) Anything herein or in any other Operative Document to
the contrary notwithstanding, Basic Lease Rent (excluding the Equity Portion
of Basic Lease Rent) payable on any Rent Payment Date, whether or not
adjusted in accordance with this SECTION 3.4, shall, in the aggregate, be in
an amount at least sufficient to pay in full principal and interest payable
on the Lessor Notes on such Rent Payment Date. Anything herein or in any
other Operative Document to the contrary notwithstanding, Termination Values
(excluding the Equity Portion of Termination Value) payable on any date under
this Facility Lease, whether or not adjusted in accordance with this SECTION
3.4, shall in the aggregate, together with all other Rent due and owing on
such date, exclusive of any portion thereof that is the Equity Portion of
Basic Lease Rent or an Excepted Payment, be in an amount at least sufficient
to pay in full the principal of, premium, if any, and accrued interest on the
Lessor Notes payable on such date.

                  (d) Any adjustment pursuant to this SECTION 3.4 or SECTION 14
of the Participation Agreement computed by the Owner Participant pursuant to
SECTION 3.4(b) shall be subject to the verification procedure described in this
SECTION 3.4(d). Once computed, the results of such computation shall promptly be
delivered by the Owner Participant to the Facility Lessee. Within 30 days after
the receipt of the results of any such adjustment, the Facility Lessee may
request that a nationally recognized firm of accountants or lease advisors
selected by the Owner Participant and reasonably acceptable to the Facility
Lessee (the "VERIFIER") verify, on a confidential basis, after consultation with
the Owner Participant and the Facility Lessee, the accuracy of such adjustment
in accordance with this SECTION 3.4. The Owner Participant and the Facility
Lessee hereby agree, subject to the execution by the Verifier of an appropriate
confidentiality agreement, to provide the Verifier with all necessary
information and materials (other than the Owner Participant's, the OP
Guarantor's or any of their respective Affiliates' income tax returns or
accounting records) as shall be necessary in connection with such verification.
Both the Owner Participant and the Facility Lessee shall have the right to
communicate with the Verifier and to submit supporting information and data to
the Verifier. If the Verifier confirms that such adjustment is in accordance
with this SECTION 3.4, and the adjustment to Basic Lease Rent, Allocated Rent
and Termination Value calculated by the Verifier are the same as those
calculated by the Owner Participant, it shall so certify to the Facility Lessee,
the Owner Lessor and the Owner Participant and such certification shall be
final, binding and conclusive on the Facility Lessee, the Owner Lessor and the
Owner Participant. If the Verifier concludes

                                       5
<Page>

that such adjustment is not in accordance with this SECTION 3.4, and the
adjustments to Basic Lease Rent, Allocated Rent and Termination Value
calculated by the Verifier are different from those calculated by the Owner
Participant, it shall so certify to the Facility Lessee, the Owner Lessor and
the Owner Participant, and the Verifier's calculation shall be final, binding
and conclusive on the Facility Lessee, the Owner Lessor and the Owner
Participant. If the Facility Lessee does not request a verification of any
adjustment within the 30 day period specified above in this SECTION 3.4(d),
the computation provided by the Owner Participant shall be final, binding and
conclusive on the Facility Lessee, the Owner Lessor and the Owner
Participant. The final determination of any adjustment hereunder shall be set
forth in an amendment to this Facility Lease, executed and delivered by the
Owner Lessor and the Facility Lessee and consented to by the Owner
Participant; PROVIDED, HOWEVER, that any omission to execute and deliver such
amendment shall not affect the validity and effectiveness of any such
adjustment. The reasonable costs of the Verifier in verifying an adjustment
pursuant to this SECTION 3.4 shall be paid by the Facility Lessee; PROVIDED,
HOWEVER, that in the event that such Verifier determines that the present
value of the remaining Basic Lease Rent to be made under this Facility Lease
as calculated by the Owner Participant is greater than the present value of
the remaining Basic Lease Rent as certified by the Verifier, in each case,
discounted annually at the Discount Rate, by more than ten basis points, then
such reasonable costs of the Verifier shall be paid by the Owner Participant.
Notwithstanding anything herein to the contrary, the sole responsibility of
the Verifier shall be to verify the calculations hereunder and the scope of
the Verifier's responsibilities shall not include matters of interpretation
of this Facility Lease or any other Operative Document.

         SECTION 3.5       MANNER OF PAYMENTS. All Rent (whether Basic Lease
Rent, Renewal Rent or Supplemental Lease Rent) and all Termination Value
payments shall be paid by the Facility Lessee in Dollars in immediately
available funds to the recipient not later than 11:00 a.m. (New York City
time) on the date due. If any Rent is due on a day which is not a Business
Day, payment thereof shall be made on the next succeeding Business Day with
the same effect as if made on the date on which such payment was due. All
Rent payments payable to the Owner Lessor (other than Excepted Payments)
shall be paid by the Facility Lessee to the Owner Lessor at its account at
[________] (Account No. [________])(the "OWNER LESSOR'S RENT ACCOUNT"), or to
such other place as the Owner Lessor shall notify the Facility Lessee in
writing; provided, however, that so long as the Lessor Notes are outstanding
and the Lien created under the Lease Indenture has not been discharged, the
Owner Lessor hereby irrevocably directs (it being agreed and understood that
such direction shall be deemed to have been revoked after the Lien created
under the Lease Indenture shall have been fully discharged in accordance with
its terms), and the Facility Lessee agrees, that all payments of Rent (other
than Excepted Payments) payable to the Owner Lessor shall be paid by "wire"
transfer directly to the Security Agent's Account or to such other place as
the Security Agent shall notify the Facility Lessee in writing pursuant to
the Participation Agreement. On each Rent Payment Date, Basic Lease Rent
shall be paid by transferring funds in the amount equal to the Basic Lease
Rent payment (in the amount notified by the Facility Lessee to the Owner
Lessor and, so long as the Lessor Notes are outstanding and the Lien created
under the Lease Indenture has not been discharged, the Security Agent) into
the Owner Lessor's Rent Account or, so long as the Lessor Notes are
outstanding and the

                                       6
<Page>

Lien created under the Lease Indenture has not been discharged, the Security
Agent's Account. Payments constituting Excepted Payments shall be made to the
Person entitled thereto at the address for such Person set forth in the
Participation Agreement, or to such other place as such Person shall notify
the Facility Lessee in writing.

SECTION 4         DISCLAIMER OF WARRANTIES; RIGHT OF QUIET ENJOYMENT

         SECTION 4.1   DISCLAIMER OF WARRANTIES.

                  (a) Without waiving any claim the Facility Lessee may have
against any manufacturer, vendor or contractor, THE FACILITY LESSEE ACKNOWLEDGES
AND AGREES SOLELY FOR THE BENEFIT OF THE OWNER LESSOR AND THE OWNER PARTICIPANT
THAT (i) THE FACILITY AND EACH COMPONENT ARE OF A SIZE, DESIGN, CAPACITY AND
MANUFACTURE ACCEPTABLE TO THE FACILITY LESSEE, (ii) THE FACILITY LESSEE IS
SATISFIED THAT THE FACILITY AND EACH COMPONENT ARE SUITABLE FOR THEIR RESPECTIVE
PURPOSES, (iii) NEITHER THE OWNER LESSOR NOR THE OWNER PARTICIPANT IS A
MANUFACTURER OR A DEALER IN PROPERTY OF SUCH KIND, (iv) THE UNDIVIDED INTEREST
IS LEASED HEREUNDER TO THE EXTENT PROVIDED HEREBY FOR THE BASIC LEASE TERM AND
THE RENEWAL LEASE TERMS, IF ANY, SPECIFIED HEREIN SUBJECT TO ALL REQUIREMENTS OF
LAW NOW IN EFFECT OR HEREAFTER ADOPTED, INCLUDING (1) ZONING REGULATIONS, (2)
ENVIRONMENTAL LAWS OR (3) BUILDING RESTRICTIONS, AND IN THE STATE AND CONDITION
OF EVERY PART THEREOF WHEN THE SAME FIRST BECAME SUBJECT TO THIS FACILITY LEASE
WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND BY THE OWNER LESSOR OR THE OWNER
PARTICIPANT AND (v) THE OWNER LESSOR LEASES FOR THE BASIC LEASE TERM AND THE
RENEWAL LEASE TERMS, IF ANY, SPECIFIED HEREIN AND THE FACILITY LESSEE TAKES THE
UNDIVIDED INTEREST UNDER THIS FACILITY LEASE "AS-IS," "WHERE-IS" AND "WITH ALL
FAULTS," AND THE FACILITY LESSEE ACKNOWLEDGES THAT NEITHER THE OWNER LESSOR, NOR
THE OWNER PARTICIPANT MAKES NOR SHALL BE DEEMED TO HAVE MADE, AND EACH EXPRESSLY
DISCLAIMS, ANY AND ALL RIGHTS, CLAIMS, WARRANTIES OR REPRESENTATIONS, EITHER
EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION, FITNESS FOR ANY PARTICULAR
PURPOSE, DESIGN, OPERATION, MERCHANTABILITY THEREOF OR AS TO THE TITLE OF THE
FACILITY, THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREOF OR CONFORMITY
THEREOF TO SPECIFICATIONS, FREEDOM FROM PATENT, COPYRIGHT OR TRADEMARK
INFRINGEMENT, THE ABSENCE OF ANY LATENT OR OTHER DEFECT, WHETHER OR NOT
DISCOVERABLE, OR AS TO THE ABSENCE OF ANY OBLIGATIONS BASED ON STRICT LIABILITY
IN TORT OR ANY OTHER EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WHATSOEVER
WITH RESPECT THERETO, except that the Owner Lessor represents and warrants that
on the Closing Date, the Undivided Interest will be free of Owner Lessor Liens.
It is agreed that all such risks, as between the Owner Lessor and the Owner
Participant on the one hand and the Facility Lessee on the other hand are to be
borne by

                                       7

<Page>

the Facility Lessee with respect to acts, occurrences or omissions during the
Facility Lease Term. Neither the Owner Lessor nor the Owner Participant shall
have any responsibility or liability to the Facility Lessee or any other
Person with respect to any of the following: (x) any liability, loss or
damage caused or alleged to be caused directly or indirectly by the Facility
or any Component or by any inadequacy thereof or deficiency or defect therein
or by any other circumstances in connection therewith; (y) the use, operation
or performance of the Facility, any Component or any risks relating thereto;
or (z) the delivery, operation, servicing, maintenance, repair, improvement,
replacement or decommissioning of the Facility or any Component. The
provisions of this paragraph (a) of this SECTION 4.1 have been negotiated,
and, except to the extent otherwise expressly stated, the foregoing
provisions are intended to be a complete exclusion and negation of any
representations or warranties of the Owner Lessor, express or implied, with
respect to the Facility, any Component or the Undivided Interest that may
arise pursuant to any Requirement of Law now or hereafter in effect, or
otherwise.

                  (b) During the Facility Lease Term, so long as no Lease Event
of Default shall have occurred and be continuing, the Owner Lessor hereby
appoints irrevocably and constitutes the Facility Lessee its agent and
attorney-in-fact, coupled with an interest, to assert and enforce, from time to
time, in the name and for the account of the Owner Lessor and the Facility
Lessee, as their interests may appear, but in all cases at the sole cost and
expense of the Facility Lessee, whatever claims and rights the Owner Lessor may
have in respect of the Facility, any Component or the Undivided Interest against
any manufacturer, vendor or contractor, or under any express or implied
warranties relating to the Facility, any Component or the Undivided Interest.
Notwithstanding the foregoing, any amount in excess of $5,000,000 that is
payable under any warranty shall not be payable to or retained by the Facility
Lessee (for application in repair or replacement of the affected property if
necessary) if at the time of such payment a Material Lease Default or Lease
Event of Default shall have occurred and be continuing, but shall be paid to and
held by the Owner Lessor as security for the obligations of the Facility Lessee
under this Facility Lease (or, if the Lien created under the Lease Indenture
shall not have been discharged pursuant to the terms thereof, such amounts shall
be paid to and held by the Security Agent in accordance with the terms of the
Lease Indenture) in accordance with [SECTION 21] or shall be applied towards
payment of the Facility Lessee's obligations under the Operative Documents at
the Owner Lessor's option during such time as any Material Lease Default or
Lease Event of Default shall have occurred and be continuing. At such time
thereafter as no Material Lease Default or Lease Event of Default shall be
continuing, such amount at the time held by the Owner Lessor, or, if applicable,
the Security Agent, in excess of the amount applied in accordance with the
preceding sentence shall be paid to the Facility Lessee net of and after
deduction for any applicable withholding Taxes, upon the Facility Lessee's
written request therefor, specifying the amount to be paid and certifying that
no Material Lease Default or Lease Event of Default has occurred and is
continuing. The Owner Lessor agrees to execute and deliver such further
documents and take such further action (including the assignment of warranty
claims), at the Facility Lessee's expense and at no after-tax cost to the Owner
Participant, as may be reasonably requested by the Facility Lessee in order to
obtain such warranty service as may be furnished for the Facility or any
Component by any of the

                                       8

<Page>

warrantors.

         SECTION 4.2   QUIET ENJOYMENT. So long as no Lease Event of Default has
occurred and is continuing, the Facility Lessee's quiet enjoyment of the use,
operation, or possession by the Facility Lessee of the Facility or the
Undivided Interest will not be disturbed by the Owner Lessor or the Owner
Participant, any of their respective Affiliates thereof or any other Person
having a rightful, valid and legal claim by, through or under the Owner
Lessor or any of its Affiliates.

SECTION 5         RETURN OF UNDIVIDED INTEREST

         SECTION 5.1   RETURN. Upon expiration of the Facility Lease Term (or
earlier than such date if required pursuant to the provisions of this
Facility Lease) (the "DATE OF RETURN"), unless the Undivided Interest is
being transferred to the Facility Lessee (or its designee) pursuant to
SECTION 10 OR 13, the Facility Lessee shall return the Undivided Interest
(together with all Required Improvements, all Non-Severable Improvements, all
other Improvements financed through this Facility Lease, if any, all logs and
records relating to the Undivided Interest title to each of which shall vest
in the Owner Lessor) to the Owner Lessor or any designee or transferee of the
Owner Lessor by surrendering the Undivided Interest into the possession of
the Owner Lessor or such designee or transferee at the location of the
Facility on the Facility Site.

         SECTION 5.2   CONDITION UPON RETURN. On the Date of Return, (other than
in connection with a return of the Undivided Interest by the Facility Lessee
pursuant to SECTION 13 OR 14), the Facility Lessee agrees that the following
conditions (the "RETURN CONDITIONS") shall be satisfied or waived, whereupon
this Facility Lease and the Facility Site Sublease shall terminate:

                  (a) the Facility will be in at least as good condition as
it would have been in if it had been maintained during the Facility Lease
Term in compliance with the provisions of this Facility Lease (including,
without limitation, SECTION 7) ordinary wear and tear excepted; and the
Designated Representative Agreement shall be terminated and all emissions
credits and allowances allocated on or after the Termination Date shall be
for the exclusive account of the Owner Lessor (and the Facility Lessee shall
take such action as the Owner Lessor may reasonably request which the Owner
Lessor deems necessary to obtain such credits or allowances);

                  (b) the Facility Lessee shall, to the extent permitted by
Requirements of Law and the provisions of such licenses or permits, assign an
undivided interest equal to the Owner Lessor's Percentage to the Owner Lessor or
its transferee or designee in, and shall cooperate with all reasonable requests
of the Owner Participant, the Owner Lessor or any transferee or designee of
either such Person for purposes of obtaining, or enabling the Owner Participant,
the Owner Lessor or such transferee or designee to obtain, any and all licenses
and permits of any Governmental Authorities or other Persons that are or will be
required to be obtained by the Owner Participant, the Owner Lessor or such
transferee or designee in connection with the use, operation or maintenance of
the Undivided Interest that are not already in the name of the Owner Lessor or a
transferee or designee, as the case may be on or after such return as required
by Requirements of Law;

                  (c) the Facility Lessee shall provide the Owner Lessor or its
transferee or designee with originals or copies of all documents, instruments,
plans, maps,

                                       9

<Page>

specifications, manuals, drawings and other documentary materials relating to
the installation, maintenance, operation, construction, design, modification
and repair of the Facility, in each case as shall be in the Facility Lessee's
possession and reasonably appropriate or necessary for the continued
operation of the Facility;

                  (d) the Facility Lessee, at the request of the Owner Lessor,
shall sell to the Owner Lessor or its designee or transferee at the then fair
market value thereof, determined by agreement between the Facility Lessee and
the Owner Lessor or, absent such agreement, by an appraisal (the fees and
expenses to be for the account of the Owner Lessor) conducted according to the
Appraisal Procedure, an undivided interest equal to the Owner Lessor's
Percentage in (i) the Facility Lessee's right, title and interest in and to any
or all Severable Improvements made to the Facility that are owned by the
Facility Lessee, and (ii) any and all supplies, spare parts, consumables, safety
equipment, and other parts or materials as shall be in the Facility Lessee's
possession and shall be reasonably appropriate or necessary for the continued
operation of the Facility;

                  (e) the Undivided Interest (and the Severable Improvements,
supplies, spare parts, consumables, safety equipment, and other parts and
materials referred to in Section 5.2(d)) shall be free and clear of all Liens
other than Permitted Encumbrances set forth in clauses (ii), (iii), (vii),
(viii), (ix), (xi) and (xiii) of the definition thereof; PROVIDED, HOWEVER, in
the case of Permitted Encumbrances set forth in clauses (iii), (vii), (viii) and
(ix) of the definition thereof, adequate cash reserves shall have been escrowed
in a manner reasonably satisfactory to the Owner Lessor; PROVIDED, FURTHER, that
nothing in this SECTION 5.2(e) shall limit the obligations of the Facility
Lessee under SECTION 10.1 of the Participation Agreement;

                  (f) any  Component in existence on the Date of Return shall
satisfy the  standards of SECTION 7.2;

                  (g) the Facility Lessee, or an Affiliate thereof, shall enter
into an agreement or other arrangements reasonably acceptable to the Owner
Lessor, which arrangements, however, shall not be a condition precedent to the
return of the Undivided Interest (the "SUPPORT ARRANGEMENTS") to provide the
Owner Lessor with the Support Services; PROVIDED, that the Facility Lessee, or
its Affiliate, as the case may be, shall be bound to provide Support Services
only to the extent the Facility Lessee or any domestic, unregulated Affiliate
thereof is capable of providing such services and is either in the business of
providing such Support Services to others or performs such Support Services on
its own behalf, and only to the extent that such services are necessary for the
operation of the Facility and cannot commercially reasonably and timely be
obtained by the Owner Lessor or its Affiliates from third parties. It is the
intent of the parties hereto that the Support Arrangements, together with the
Facility Site Lease, and mutually agreed easements and rights of way, if
required, will provide all rights, including reasonable access to the Facility
and the Facility Site, that are necessary and appropriate for the Owner Lessor
(or any transferee or designee thereof) to own and operate the Facility, and
transmit power generated thereby, during and after the expiration of this
Facility Lease in the same manner as operated and transmitted by the Facility
Lessee during the Facility Lease Term (assuming such operation and transmission
was in accordance with the

                                      10

<Page>

Facility Site Lease and the other Operative Documents). Support Arrangements
shall provide for the provision of Support Services from and after the
expiration of this Facility Lease, and will provide for fair market value
compensation from time to time to be paid to the Facility Lessee, or an
Affiliate thereof, for the performance of such Support Services, periodically
in advance on no more than a monthly basis and no less than an annual basis,
for such rights and the performance of other services and all such
arrangements shall terminate upon expiration or early termination of the
Facility Site Lease or at the Owner Lessor's option. Within 180 days after
the expiration or termination of this Facility Lease, the Owner Lessor shall
notify the Facility Lessee of the material elements of the Support Services
that the Owner Lessor desires the Facility Lessee, or its Affiliate, to
continue to perform. Following such notice, the Facility Lessee and the Owner
Lessor shall negotiate in good faith the terms of the fair market value,
performance standards, compensation and other terms of such specified Support
Services, including the circumstances under which the Facility Lessee and its
Affiliates shall be released of any further obligation to provide such
Support Services, and enter into contracts for the performance of the Support
Services upon any such negotiated terms, provided, further, that if the
notice referenced in the preceding sentence is given by the Owner Lessor at
any time up to 60 days prior to the Date of Return, the Owner Lessor and the
Facility Lessee shall use reasonable efforts to cause such contracts to be
executed no later than the Date of Return; PROVIDED, FURTHER, that, in the
event such contracts shall not have been executed prior to the Date of
Return, from the period beginning on such Date of Return and ending on the
date on which such contracts are executed, the Facility Lessee shall provide
to the Owner Lessor, at the then prevailing rate being charged for the same
or similar services in the power generation industry, such specified Support
Services as are necessary to enable the Owner Lessor to operate, maintain and
repair the Facility in accordance with Prudent Industry Practice and the
Facility Lease and in compliance with applicable Requirements of Law. The
Facility Lessee shall also, subject to obtaining any required third party
consents, assign to the Owner Lessor upon termination of this Facility Lease
any support or similar agreements to the extent relating to the Facility it
has with third parties.

                  (h) the Facility Lessee shall provide to the Owner Lessor and
the Owner Participant a Phase I Environmental Survey of the Facility and the
Facility Site and, if as a result of such survey, facts are revealed that would
reasonably necessitate a Phase II Environmental Survey, a Phase II Environmental
Survey, as to the presence or absence of Environmental Conditions (and
compliance or non-compliance with applicable Environmental Laws), not later than
12 months prior to the Date of Return or, in connection with a return other than
pursuant to SECTION 5.1, not later than the date such Undivided Interest is
returned, such surveys to be prepared by a reputable and nationally recognized
environmental consulting firm (selected by the Facility Lessee and reasonably
acceptable to the Owner Participant) and to be in form and scope reasonably
satisfactory to the Owner Participant. The cost and expense of preparing and
providing such surveys shall be for the account of the Facility Lessee. If, as a
result of either such environmental survey, any action (including, any cleaning,
investigation, abatement, correction, removal or remediation) is required in
order that the Facility and the Facility Site are in compliance with applicable
Environmental Laws and the Return Conditions, the Facility Lessee shall, at its
own expense, within 90 days of the Owner Lessor having received

                                      11

<Page>

such environmental survey, (a) provide the Owner Participant and, so long as
the Lessor Notes are outstanding and the Lien of the Lease Indenture shall
not have been discharged, the Security Agent with a plan, reasonably
satisfactory to the Owner Participant and/or the Security Agent, designed to
ensure that the Facility and the Facility Site will be brought into
compliance with applicable Environmental Laws and all material Environmental
Conditions recommended for correction in such survey will be corrected as
promptly as is reasonably practical and without materially adversely
affecting the continued operation of the Facility. The actions referred to in
this SECTION 5.2(h) shall be completed prior to the expiration of the Basic
Lease Term or any then existing Renewal Lease Term or early termination
thereof, as applicable, in compliance with Environmental Laws other than
immaterial violations that do not involve any (1) material risk of
foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other than
Liens permitted pursuant to SECTION 5.2(e)) on the Facility, the Undivided
Interest or the Facility Site or the impairment of the use, operation or
maintenance of the Facility or the Facility Site in any material respect, (2)
the risk of criminal liability being incurred by the Owner Lessor, the Owner
Participant or the OP Guarantor or (3) a material risk of any material
adverse effect on the interest of the Owner Lessor, the Owner Participant or
the OP Guarantor; PROVIDED, HOWEVER, if any such action cannot reasonably be
completed prior to the expiration or early termination of such Lease Term and
if continued operation of the Facility could not reasonably be expected to
result in strict liability being imposed upon the Owner Lessor, the Owner
Participant, the OP Guarantor or the Facility Lessee shall complete such
action as promptly thereafter as is reasonably practical and shall provide
financial assurance in the form of a satisfactory letter of credit or
equivalent collateral to the Owner Lessor and the Owner Participant,
reasonably satisfactory to each such Person, during the period of such action
following the end of such Lease Term and provided, further, that any such
action shall be completed no later than 12 months after the Date of Return.
Neither the provision of the surveys contemplated by this SECTION 5.2(h), nor
any other provision of this SECTION 5.2(h), shall alter the obligations of
any party to the Operative Documents, including those set forth in SECTIONS
5.4(iii) and 10.1 of the Participation Agreement. The obligations of the
Facility Lessee set forth in this SECTION 5.2(h) shall survive the
termination of this Facility Lease and the expiration of the applicable
Facility Lease Term;

                  (i) the Facility shall have at least the capability and the
functional ability to generate electricity, on a continuous basis in normal
commercial operating conditions, substantially at the ratings for which it was
designed after taking into account normal performance degradation as a function
of (i) time and (ii) all Required Improvements to the Facility made in
accordance with this Facility Lease; and

                  (j) at the Owner Lessor's request, a nationally recognized
independent engineer (selected by the Facility Lessee and reasonably acceptable
to the Owner participant) shall provide a certificate certifying that the
Facility is in compliance with the Return Conditions.

                  There shall be no other return conditions or requirements
other than the Return Conditions set forth in this Section 5.2.

                                      12

<Page>

         SECTION 5.3   EXPENSES. Except as provided in SECTION 5.2(d) AND
5.2(g), the Facility Lessee agrees to pay or reimburse or to cause to be paid
or reimbursed, on an After-Tax Basis, on demand, all costs and expenses
incurred in connection with any return contemplated by this SECTION 5.

SECTION 6         LIENS

                  The Facility Lessee hereby covenants that it will not directly
or indirectly create, incur, assume or suffer to exist any Lien or other
encumbrance on or with respect to the Undivided Interest, the Facility, the
Facility Site, any Component, any Project Document, or on any Operative Document
or on the Owner Lessor's or the Owner Participant's interest in or under any
Operative Document, except Permitted Encumbrances. The Facility Lessee shall
promptly notify the Owner Lessor of the imposition of any such Lien of which the
Facility Lessee has Actual Knowledge and shall promptly, at its own expense,
take such action as may be necessary to fully discharge or release any such Lien
(except for Permitted Encumbrances). The Facility Lessee shall defend the Owner
Lessor from and against all claims to the Owner Lessor's title to the Undivided
Interest or any portion thereof.

SECTION 7         MAINTENANCE; REPLACEMENTS OF COMPONENTS

         SECTION 7.1   MAINTENANCE. The Facility Lessee, at its own cost and
expense, will (i) cause the Facility to be maintained in as good condition,
repair and working order as when delivered, ordinary wear and tear excepted,
and in any event, in all material respects (a) no less favorably as compared
to other facilities of a similar type owned or operated by the Facility
Lessee (or any of its domestic unregulated Affiliates), solely as a result of
the status of the Facility as a leased facility as opposed to an owned
facility, (b) in accordance with Prudent Industry Practice, (c) in compliance
with all Requirements of Law, including, without limitation all applicable
Environmental Laws and safety laws and FERC, unless such noncompliance could
not reasonably be expected to result in a Material Adverse Effect or involve
any (1) material risk of foreclosure, sale, forfeiture or loss of, or
imposition of a Lien (other than a Permitted Encumbrance) on, the Facility,
the Undivided Interest or the Facility Site or the impairment of the use,
operation or maintenance of the Facility or the Facility Site in any material
respect, (2) risk of criminal or material civil liability being incurred by
the Owner Lessor, the Owner Participant or the OP Guarantor, or (so long as
the Lessor Notes are outstanding and the Lien of the Lease Indenture has not
been discharged) the Security Agent, any Lender or the Bondholder Trustee or
any of their respective Affiliates, or (3) material risk of any material
adverse effect on the interests of the Owner Lessor, the Owner Participant or
the OP Guarantor, or (so long as the Lessor Notes are outstanding and the
Lien of the Lease Indenture has not been discharged) the Security Agent, any
Lender or the Bondholder Trustee or any of their respective Affiliates
(including, without limitation, subjecting any such Person to regulation as a
public utility under any Requirement of Law), and (d) in accordance with the
terms of all insurance policies required to be maintained pursuant to Section
11 and (ii) cause to be made all repairs, renewals, replacements, betterments
and improvements to the Facility, all as in the reasonable judgment of the
Facility Lessee may be necessary so that the Facility may be operated (x) in
compliance with all Requirements

                                      13

<Page>

of Law, unless such noncompliance could not reasonably be expected to result
in a Material Adverse Effect, (y) in accordance with the Operative Documents
and (z) to the extent commercially reasonable, consistent with the estimated
remaining economic useful life of the Facility as set forth in the Closing
Appraisal (it being understood and agreed that the timing of such repairs,
renewals, replacements, betterments and improvements required under clause
(z) of this SECTION 7.1 shall be in the sole discretion of the Facility
Lessee).

         SECTION 7.2   REPLACEMENT OF COMPONENTS. In the ordinary course of
maintenance, service, repair or testing of the Facility or any Component, the
Facility Lessee, at its own cost and expense, may remove or cause, or permit,
to be removed from the Facility any Component; provided, however, that the
Facility Lessee shall (a) cause any such Component to be replaced as soon as
commercially practicable by a replacement Component which shall be free and
clear of all Liens (other than Permitted Encumbrances) and which shall be in
as good an operating condition as and shall have a current and residual
value, remaining economic useful life and utility at least equal to that of
the Component replaced, assuming such replaced Component was maintained in
accordance with the terms of this Facility Lease, and (b) cause such
replacement to be performed in a manner that does not diminish the current
value, residual value, utility or remaining economic useful life of the
Facility by more than a de minimis amount (as measured immediately prior to
such replacement, assuming the Facility is, at such time, in the condition
required by the terms of this Facility Lease) or cause the Facility to become
"limited use property" within the meaning of Rev. Proc. 2001-28, 2001-19 IRB
1156 or Rev. Proc. 2001-29, 2001-19 IRB 1160 (each such replacement Component
being herein referred to as a "REPLACEMENT COMPONENT"). An undivided interest
equal to the Owner Lessor's Percentage in each Component at any time removed
from the Facility shall remain subject to this Facility Lease, wherever
located, until such time as such Component shall be replaced by a Replacement
Component which has been incorporated in the Facility and which meets the
requirements for Replacement Components specified above. Immediately upon any
Replacement Component becoming incorporated in the Facility, without further
act (and at no cost to the Owner Lessor and with no adjustment to the
Purchase Price, Basic Lease Rent, Renewal Rent, Proportional Rent, Allocated
Rent, Lessor Section 467 Loan Balance, Lessee Section 467 Loan Balance,
Lessor Section 467 Interest, Lessee Section 467 Interest or Termination
Values), (i) the replaced Component shall no longer be subject to this
Facility Lease, (ii) title to the Owner Lessor's undivided interest equal to
the Owner Lessor's Percentage in the removed Component shall thereupon vest
in the Facility Lessee or such other Person as shall be designated by the
Facility Lessee, free and clear of all rights of the Owner Lessor and the
Lease Indenture Trustee, and (iii) title to an undivided interest equal to
the Owner Lessor's Percentage in the Replacement Component shall thereupon
vest with the Owner Lessor and such undivided interest shall (a) become
subject to this Facility Lease and, so long as the Lessor Notes are
outstanding, the Lien of the Lease Indenture, and (b) be deemed a part of the
Facility and the Undivided Interest for all purposes of this Facility Lease.
Notwithstanding anything in this SECTION 7.2 to the contrary, if the Facility
Lessee has determined that any part, Component or portion of the Facility is
surplus or obsolete, the Facility Lessee shall have the right to remove such
part, Component or portion of the Facility without replacing it as long as
such removal would not diminish the current

                                       14

<Page>

value, residual value, utility or remaining economic useful life of the
Facility or the Undivided Interest by more than a de minimis amount below the
then current or residual value, the remaining economic useful life or the
utility thereof (as measured immediately prior to such removal, assuming the
Facility is, at such time, in the condition required by the terms of this
Facility Lease) or cause the Facility to become "limited use property" within
the meaning of Rev. Proc. 2001-28, 2001-19 IRB 1156 or Rev. Proc. 2001-29,
2001-19 IRB 1160.

         SECTION 7.3   ENVIRONMENTAL MATTERS.  The Facility Lessee will, at its
own expense:

                  (a) comply with all Environmental Laws applicable to the
Facility or the Facility Site, except instances of non-compliance that could not
reasonably be expected to have a Material Adverse Effect or involve any (1)
material risk of foreclosure, sale, forfeiture or loss of, or imposition of a
Lien (other than a Permitted Encumbrance) on, the Facility, the Undivided
Interest or the Facility Site or the impairment of the use, operation or
maintenance of the Facility or the Facility Site in any material respect, (2)
risk of criminal or material civil liability being incurred by the Owner Lessor,
the Owner Participant or the OP Guarantor, or (so long as the Lessor Notes are
outstanding and the Lien of the Lease Indenture has not been discharged) the
Security Agent, any Lender or the Bondholder Trustee or any of their respective
Affiliates, or (3) material risk of any material adverse effect on the interests
of the Owner Lessor, the Owner Participant or the OP Guarantor, or (so long as
the Lessor Notes are outstanding and the Lien of the Lease Indenture has not
been discharged) the Security Agent, any Lender or the Bondholder Trustee or any
of their respective Affiliates (including, without limitation, subjecting any
such Person to regulation as a public utility under any Requirement of Law);

                  (b) obtain and maintain all necessary Governmental Approvals
required under any applicable Environmental Law in connection with the use,
operation and maintenance of the Facility and the Facility Site and operate the
Facility in compliance with such Governmental Approvals except instances of
non-compliance that could not reasonably be expected to have a Material Adverse
Effect or involve any (1) material risk of foreclosure, sale, forfeiture or loss
of, or imposition of a Lien (other than a Permitted Encumbrance) on, the
Facility, the Undivided Interest or the Facility Site or the impairment of the
use, operation or maintenance of the Facility or the Facility Site in any
material respect, (2) risk of criminal or material civil liability being
incurred by the Owner Lessor, the Owner Participant or the OP Guarantor, or (so
long as the Lessor Notes are outstanding and the Lien of the Lease Indenture has
not been discharged) the Security Agent, any Lender or the Bondholder Trustee or
any of their respective Affiliates, or (3) material risk of any material adverse
effect on the interests of the Owner Lessor, the Owner Participant or the OP
Guarantor, or (so long as the Lessor Notes are outstanding and the Lien of the
Lease Indenture has not been discharged) the Security Agent, any Lender or the
Bondholder Trustee or any of their respective Affiliates (including, without
limitation, subjecting any such Person to regulation as a public utility under
any Requirement of Law);

                  (c) conduct and complete, at no cost and expense to the Owner
Participant

                                       15

<Page>

or the Owner Lessor, any investigation, study, sampling, monitoring and
testing and undertake any cleanup, removal, remediation, correction,
mitigation, response or other action necessary or advisable to abate,
correct, remove and clean up any Environmental Condition at the Facility or
the Facility Site, to the extent required by and in material compliance with
applicable Environmental Laws except instances of non-compliance that could
not reasonably be expected to have a Material Adverse Effect or involve any
(1) material risk of foreclosure, sale, forfeiture or loss of, or imposition
of a Lien (other than a Permitted Encumbrance) on, the Facility, the
Undivided Interest or the Facility Site or the impairment of the use,
operation or maintenance of the Facility or the Facility Site in any material
respect, (2) risk of criminal or material civil liability being incurred by
the Owner Lessor, the Owner Participant or the OP Guarantor, or (so long as
the Lessor Notes are outstanding and the Lien of the Lease Indenture has not
been discharged) the Security Agent, any Lender or the Bondholder Trustee or
any of their respective Affiliates, or (3) material risk of any material
adverse effect on the interests of the Owner Lessor, the Owner Participant or
the OP Guarantor, or (so long as the Lessor Notes are outstanding and the
Lien of the Lease Indenture has not been discharged) the Security Agent, any
Lender or the Bondholder Trustee or any of their respective Affiliates
(including, without limitation, subjecting any such Person to regulation as a
public utility under any Requirement of Law); and

                  (d) as soon as possible and in any event within thirty
Business Days of the Facility Lessee obtaining Actual Knowledge thereof, provide
the Owner Lessor with written notice of any pending or threatened material
Environmental Claim involving the Facility or the Facility Site that could be
expected to have a Material Adverse Effect on the Facility Lessee or involve any
(1) material risk of foreclosure, sale, forfeiture or loss of, or imposition of
a Lien (other than a Permitted Encumbrance) on, the Facility, the Undivided
Interest or the Facility Site or the impairment of the use, operation or
maintenance of the Facility or the Facility Site in any material respect, (2)
risk of criminal or material civil liability being incurred by the Owner Lessor,
the Owner Participant or the OP Guarantor, or (so long as the Lessor Notes are
outstanding and the Lien of the Lease Indenture has not been discharged) the
Security Agent, any Lender or the Bondholder Trustee or any of their respective
Affiliates, or (3) material risk of any material adverse effect on the interests
of the Owner Lessor, the Owner Participant or the OP Guarantor, or (so long as
the Lessor Notes are outstanding and the Lien of the Lease Indenture has not
been discharged) the Security Agent, any Lender or the Bondholder Trustee or any
of their respective Affiliates (including, without limitation, subjecting any
such Person to regulation as a public utility under any Requirement of Law).

SECTION 8         IMPROVEMENTS

         SECTION 8.1   REQUIRED IMPROVEMENTS. The Facility Lessee, at its own
cost and expense, and without the consent of the Lease Indenture Trustee, the
Lender, the Bondholder Trustee, the Owner Lessor or Owner Participant, shall
make or cause to be made any Improvements as are required (x) by Requirements
of Law or by any Governmental Authority having jurisdiction thereon, (y) by
any insurance policy required to be maintained by the Facility Lessee under
any Operative Document or (z) by the terms of the Operative Documents (each,
a "REQUIRED IMPROVEMENT"); provided,

                                      16
<Page>

however, that the Facility Lessee may, in good faith and by appropriate
proceedings, diligently contest the validity or application of any
Requirement of Law in any reasonable manner which does not involve any (1)
material risk of foreclosure, sale, forfeiture or loss of, or imposition of a
Lien (other than a Permitted Encumbrance) on, the Facility, the Undivided
Interest or the Facility Site or the impairment of the use, operation or
maintenance of the Facility or the Facility Site in any material respect, (2)
risk of criminal liability being incurred by the Owner Lessor, the Owner
Participant or the OP Guarantor, or (so long as the Lessor Notes are
outstanding and the Lien of the Lease Indenture has not been discharged) the
Security Agent, any Lender or the Bondholder Trustee or any of their
respective Affiliates, or (3) material risk of any material adverse effect on
the interests of the Owner Lessor, the Owner Participant or the OP Guarantor,
or (so long as the Lessor Notes are outstanding and the Lien of the Lease
Indenture has not been discharged) the Security Agent or any of its
respective Affiliates (including, without limitation, subjecting any such
Person to regulation as a public utility under any Requirement of Law);
provided further, that no such contest may extend beyond the date that is 180
days prior to the expiration or earlier termination of this Facility Lease.

         SECTION 8.2       OPTIONAL IMPROVEMENTS.  So long as no Material
Lease Default or Lease Event of Default shall have occurred and be
continuing, the Facility Lessee at any time may, at its own cost and expense,
and without the consent of the Lease Indenture Trustee, the Lender, the
Bondholder Trustee, the Owner Lessor or Owner Participant make, cause to be
made, or permit to be made any Improvement as the Facility Lessee considers
desirable in the proper conduct of its business (any such non-Required
Improvement being referred to as an "OPTIONAL IMPROVEMENT"); provided that
the Facility Lessee shall prevent any Optional Improvement from being made
that would decrease the then current value, residual value, utility or
remaining economic useful life of the Facility by more than a de minimis
amount below the then current or residual value, the remaining economic
useful life or the utility thereof (as measured immediately prior to the
making of such Optional Improvement, assuming the Facility is, at such time,
in the condition required by the terms of this Facility Lease), or cause the
Facility to become "limited use property" within the meaning of Rev. Proc.
2001-28, 2001-19 IRB 1156 or Rev. Proc. 2001-29, 2001-19 IRB 1160.

         SECTION 8.3       TITLE TO IMPROVEMENTS. Title to an undivided
interest equal to the Owner Lessor's Percentage in (i) all Required
Improvements, (ii) all Non-Severable Improvements and (iii) all other
Improvements which are financed by the Owner Lessor by an Additional Equity
Investment or a Supplemental Financing pursuant to SECTION 12.1 of the
Participation Agreement shall (at no cost to the Owner Lessor, the Owner
Participant or the OP Guarantor and with no adjustment to the Purchase Price,
or except as expressly provided herein, Basic Lease Rent, Renewal Rent,
Proportional Rent, Allocated Rent, Lessor Section 467 Loan Balance, Lessee
Section 467 Loan Balance, Lessor Section 467 Interest, Lessee Section 467
Interest or Termination Values) automatically vest in the Owner Lessor upon
being affixed to or incorporated into the Facility, and such undivided
interest shall immediately (a) become subject to this Facility Lease and (b)
be deemed part of the Undivided Interest for all purposes of this Facility
Lease. The Facility Lessee shall, at its own cost and expense, take such
steps as the Owner Lessor may reasonably require from time to time to confirm
that title to such

                                      17
<Page>

Improvement has vested in the Owner Lessor and is subject to this Facility
Lease. No interest in any Optional Improvement which is a Severable
Improvement (other than Severable Improvements which are financed by the
Owner Lessor by an Additional Equity Investment or a Supplemental Financing
pursuant to SECTION 12.1 of the Participation Agreement) shall vest in the
Owner Lessor or become subject to this Facility Lease; provided, however,
that if the Facility Lessee shall, at its cost and expense, cause such
Optional Improvements which are Severable Improvements to be made to the
Facility, the Owner Lessor shall have the right, prior to the return of the
Undivided Interest to the Owner Lessor hereunder, to purchase an undivided
interest equal to the Owner Lessor's Percentage in any such Optional
Improvements which are Severable Improvements. The purchase price for such
undivided interest shall be the then Fair Market Sales Value of such
undivided interest. If the Owner Lessor does not elect to purchase such
Optional Improvements which are Severable Improvements, the Facility Lessee
may, and at the request of the Owner Lessor shall, remove such Improvements
at the end of the Facility Lease Term. The Facility Lessee shall repair any
damage to the Facility and the Facility Site caused by such removal, all at
the Facility Lessee's sole cost and expense; provided that such removal shall
not (i) materially diminish the value, remaining economic useful life or
utility of the Facility as a whole (assuming the Facility is, at such time,
in the condition required by the terms of this Facility Lease) or (ii) cause
the Facility to become "limited use property" within the meaning of Rev.
Proc. 2001-28, 2001-19 IRB 1156 or Rev. Proc. 2001-29, 2001-19 IRB 1160. If
the Facility Lessee shall have failed to remove any Optional Improvement
which is a Severable Improvement as above provided prior to the return of the
Undivided Interest pursuant to Section 5.1, title to an undivided interest
equal to the Owner Lessor's Percentage in such Optional Improvement shall (at
no cost to the Owner Lessor, the Owner Participant or the OP Guarantor) vest
in the Owner Lessor.

         SECTION 8.4       FINANCING OF IMPROVEMENTS. Subject to SECTION 6.7
of the Participation Agreement, the Facility Lessee shall at all times have
the right to finance Improvements other than through this Facility Lease. The
Facility Lessee may elect to finance Improvements to the Facility through
this Facility Lease in accordance with Section 12.1 of the Participation
Agreement.

SECTION 9         NET LEASE

                  This Facility Lease is a "net lease." The Facility Lessee's
obligation to make all Rent payments payable hereunder (and all amounts,
including Termination Value, following termination of this Facility Lease) shall
be absolute and unconditional under any and all circumstances, and shall not be
terminated, extinguished, diminished, lost or otherwise impaired by any
circumstance of any character, including by (i) any setoff, counterclaim,
recoupment, defense or other right which the Facility Lessee may have against
the Owner Lessor, the Owner Participant, the OP Guarantor, the Lease Indenture
Trustee, the Security Agent, the Lender, the Bondholder Trustee or any other
Person, including, without limitation, any claim as a result of any breach by
any of said parties of any covenant or provision in this Facility Lease or any
other Operative Document, (ii) any lack or invalidity of title or any defect in
the title, condition, design, operation, merchantability or fitness for use of
the Facility or any Component, or any

                                      18
<Page>

eviction by paramount title or otherwise, or any unavailability of the
Facility, the Facility Site, any Component, any other portion of the
Undivided Interest, or any part thereof, (iii) any loss or destruction of, or
damage to, the Facility or any Component or interruption or cessation in the
use or possession thereof or any part thereof by the Facility Lessee for any
reason whatsoever and of whatever duration, (iv) the condemnation,
requisitioning, expropriation, seizure or other taking of title to or use of
the Facility, the Facility Site, any Component, or any other portion of the
Undivided Interest by any Governmental Authority or otherwise, (v) the
invalidity or unenforceability or lack of due authorization or other
infirmity of this Facility Lease or any other Operative Document, (vi) the
lack of right, power or authority of the Owner Lessor to enter into this
Facility Lease or any other Operative Document, (vii) any ineligibility of
the Facility or any Component for any particular use, whether or not due to
any failure of the Facility Lessee to comply with any Requirement of Law,
(viii) any event of "force majeure" or any frustration, (ix) any legal
requirement similar or dissimilar to the foregoing, any present or future law
to the contrary notwithstanding, (x) any insolvency, bankruptcy,
reorganization or similar proceeding by or against the Facility Lessee or any
other Person, (xi) any Lien of any Person with respect to the Facility, the
Facility Site, any Component, any other portion of the Undivided Interest or
any part thereof, (xii) any prohibition, limitation or restriction of the
Facility Lessee's use of all or any part of the Facility or any portion
thereof or any interest therein or the interference with such use by any
Person, (xiii) the termination or loss of the Facility or any portion
thereof, any other lease, sublease, right-of-way, easement or other interest
in personal or real property upon or to which any portion of the Facility is
located, attached or appurtenant or in connection with which any portion of
the Facility is used or otherwise affects or may affect the Facility or any
right thereto, (xiv) the existence of any Lien with respect to the Facility
or any act or circumstance that may constitute an eviction or constructive
eviction, failure of consideration or commercial frustration of purpose, (xv)
any breach, default or misrepresentation by the Owner Lessor or any other
Person under the Facility Lease or any of the other Operative Documents,
PROVIDED that the Facility Lessee reserves it rights with respect to any
breach, default or misrepresentation by the Owner Lessor or any other Person
or (xvi) any other cause, whether similar or dissimilar to the foregoing, any
present or future law notwithstanding, except as expressly set forth herein
or in any other Operative Document, it being the intention of the parties
hereto that Allocated Rent shall continue to accrue and all Basic Lease Rent,
Renewal Rent and Supplemental Lease Rent (and all amounts, including
Termination Value, in lieu of Basic Lease Rent, following termination of this
Facility Lease) payable by the Facility Lessee hereunder shall continue to be
payable in all events in the manner and at times provided for herein. Such
Allocated Rent, Basic Lease Rent, Renewal Rent and Supplemental Lease Rent
(and all amounts, including Termination Value, in lieu of Basic Lease Rent,
following termination of this Facility Lease) shall not be subject to any
abatement and the accrued and payments thereof shall not be subject to any
setoff or reduction for any reason whatsoever, including any present or
future claims of the Facility Lessee or any other Person against the Owner
Lessor or any other Person under this Facility Lease or otherwise. To the
extent permitted by Requirements of Law, the Facility Lessee hereby waives
any and all rights which it may now have or which at any time hereafter may
be conferred upon it, by statute or otherwise, to terminate, cancel, quit or
surrender this Facility Lease with respect to the Undivided Interest except
in

                                      19
<Page>

accordance with SECTION 10, 13, OR 14. If for any reason whatsoever this
Facility Lease shall be terminated in whole or in part by operation of law or
otherwise, except as specifically provided herein, the Facility Lessee
nonetheless agrees, to the extent permitted by Requirements of Law, (x) that
Allocated Rent shall continue to accrue and (y) to pay to the Owner Lessor an
amount equal to each installment of Basic Lease Rent, Renewal Rent and all
Supplemental Lease Rent due and owing, at the time such payment would have
become due and payable in accordance with the terms hereof had this Facility
Lease not been so terminated. Nothing contained herein shall be construed to
waive any claim which the Facility Lessee might have under any of the
Operative Documents or otherwise or to limit the right of the Facility Lessee
to make any claim it might have against the Owner Lessor or any other Person
or to pursue such claim in such manner as the Facility Lessee shall deem
appropriate.

SECTION 10        EVENTS OF LOSS

         SECTION 10.1      OCCURRENCE OF EVENTS OF LOSS.

                  (a) Each of the Owner Participant and the Owner Lessor will
promptly notify the Facility Lessee of any event of which it is aware that would
result in a Regulatory Event of Loss; PROVIDED, HOWEVER, that the failure to
provide such notice shall not result in any liability with respect to the Owner
Participant or the Owner Lessor and shall not in any way relieve the Facility
Lessee of any of its obligations under this Facility Lease, including the
obligations under this SECTION 10. The Facility Lessee shall promptly notify
each other Lease Financing Party of any Event of Loss.

                  (b) If an Event of Loss described in clauses (i), (ii) or
(iii) of the definition of Event of Loss shall occur, then the Facility Lessee
shall rebuild or replace the Facility in accordance with this Facility Lease and
the other Operative Documents and subject to the Rebuild Conditions; provided,
that in the event that any such Event of Loss occurs after the last day upon
which the Facility Lessee may exercise a renewal right under this Facility Lease
pursuant to SECTION 15.1, (i) the Lease Term shall be automatically extended for
such period of time as is reasonably necessary for the Facility Lessee to
complete any rebuilding or replacement required hereunder, (ii) the Facility
Lessee shall pay as Renewal Rent during any such extended term an amount,
payable monthly in arrears, equal to the average monthly Rent paid during the
Basic Lease Term or Renewal Term, as the case may be, then being extended, and
(iii) the Termination Value during such extended term shall be the Termination
Value as of the end of the Facility Lease Term without giving effect to any such
extension. The Facility Lessee shall have the right, in lieu of rebuilding or
replacing the Facility, to terminate this Facility Lease and purchase the
Undivided Interest from the Owner Lessor by paying to the Owner Lessor an amount
equal to the Termination Value and paying to the parties entitled thereto all
other amounts payable pursuant to SECTION 10.2; provided that the Facility
Lessee shall give irrevocable written notice of its election to terminate the
Facility Lease not later than six (6) months after such Event of Loss.

         In the event of a Regulatory Event of Loss or an Event of Loss
described in clause (v) of the definition of Event of Loss, the Facility
Lessee shall use commercially reasonable efforts to obtain bids from third
parties unaffiliated with the Facility Lessee and sell the Owner Lessor's
interest following such Event of Loss subject to Section 10.2(b) hereof.

         SECTION 10.2      PAYMENT UPON TERMINATION; SPECIAL LESSEE TRANSFER
PAYMENT UPON TERMINATION; SPECIAL LESSEE TRANSFER

                                      20
<Page>

                  (a) If (A) the Facility Lessee shall elect (or be deemed to
have elected) to terminate this Facility Lease pursuant to SECTION 10.1(b)
following an Event of Loss described in clause (i), (ii) or (iii) of the
definition of Event of Loss, then on the next Termination Date following the
Facility Lessee's election not to rebuild or replace the Facility and (B) the
Owner Lessor tenders all of its right, title and interest in the Facility to
the Facility Lessee, the Facility Lessee shall pay to the Owner Lessor, or so
long as the Lessor Notes are outstanding and the Lien of the Lease Indenture
has not been discharged, the Security Agent, the sum of (a) the Termination
Value determined as of the relevant Termination Value Payment Date, plus (b)
all reasonable documented out-of-pocket costs and expenses incurred in
connection with the Event of Loss by the Owner Lessor, the Owner Participant,
and so long as the Lessor Notes are outstanding and the Lien of the Lease
Indenture has not been discharged, the Security Agent, the Lender and the
Bondholder Trustee plus (c) any other Rent (other than Basic Lease Rent or
Renewal Rent payable on or after the Termination Value Payment Date) due and
unpaid on the Termination Value Payment Date and any amount due and unpaid or
accrued and unpaid on the Termination Value Payment Date under any other
Operative Document (the "EVENT OF LOSS PAYMENT") plus (d) any Lessee Section
467 Loan Balance.

Upon payment of the Event of Loss Payment (i) the Owner Lessor shall redeem
the Lessor Notes together with all other amounts due to the Security Agent
including the Lessor Section 467 Loan Balance, if any, determined as of such
date (the obligations to make such payments shall be subject to the
provisions of SECTION 3.2(d)); (ii) the Bondholder Trustee shall use such
funds to repay the Lease Debt (iii) this Facility Lease, Facility Site Lease
and the Facility Site Sublease shall terminate and the Facility Lessee shall
cease to have any liability to the Owner Lessor or the Owner Participant
other than for obligations surviving pursuant to the express terms of the
Operative Documents and (iv) all of the Owner Lessor's right, title and
interest in and to the Facility shall be transferred to the Facility Lessee,
on an "as is," "where is" and "with all faults" basis, without warranty but
free of Lessor Liens.

                  (b) In the case of Regulatory Event of Loss or an Event of
Loss described in clause (v) of the definition of Event of Loss, if at least
one cash bid is received on or prior to the next Termination Date occurring at
least three months after the occurrence of such Regulatory Event of Loss or an
Event of Loss described in clause (v) of the definition of Event of Loss, this
Facility Lease shall terminate on such Termination Date and the Owner Lessor
shall, subject to the Facility Lessee's right of first refusal, sell the
Undivided Interest in the Facility to the party submitting the highest cash bid
on an "as is", "where is" and "with all faults" basis, without representations
or warranties other than a warranty of the Owner Lessor as to the absence of
Owner Lessor Liens and a warranty of the Owner Participant as to the absence of
Owner Participant Liens, all of the proceeds of which will be for the account
of the Owner Lessor. The Facility Lessee shall pay to the Owner Lessor (i) the
amount, if any, by which the Termination Value determined as of the Termination
Date exceeds the sales price received by the Owner Lessor for the Facility (net
of the fees, commissions and costs of any broker engaged by the Facility Lessee
or any Affiliate thereof), plus (ii) on an After-Tax Basis all reasonable
documented out-of-pocket costs and expenses incurred in connection with the
Event of Loss by the Owner Lessor, the Owner Participant, and so long as the
Lessor Notes are outstanding and the Lien of the Lease Indenture has not been
discharged, the Security Agent, the Lease Indenture Trustee, the Lender and the
Bondholder Trustee plus (iii) any other Rent (other

                                      21
<Page>

than Basic Lease Rent or Renewal Rent payable after the Termination Value
Payment Date) due and unpaid on the Termination Value Payment Date and any
amount due and unpaid or accrued and unpaid on the Termination Value Payment
Date under any other Operative Document plus (iv) Lessee Section 467 Loan
Balance. If no cash bids are received by such time or if any cash bids are
received but no sale is consummated, the Facility Lessee shall pay (x)
Termination Value as of such Termination Date, plus (y) the amounts described
in clauses (ii) and (iii) above. Upon payment of such amounts, (a) the
obligation to pay or accrue rent shall cease and (b) this Facility Lease shall
terminate other than certain specified covenants. The Owner Lessor shall pay to
the Facility Lessee The Section 467 Loan Balance if any, determined as of such
date. The obligation to make such payments shall be subject to the provisions
of SECTION 3.2(d). In the case of a Regulatory Event of Loss, if shutting down
the Facility does not eliminate the burdensome regulation on the Owner
Participant, the Owner Lessor shall sell the Facility as scrap subject to the
Facility Lessee's right of first refusal; PROVIDED, HOWEVER, that if shutting
down the Facility eliminates such burdensome regulation, the Facility shall be
shut down and the Facility Lessee may, at its option, continue marketing the
Facility for up to an additional three months (the "EXTENDED MARKETING
PERIOD"). In the case of an Event of Loss defined in clause (v) of the
definition of Event of Loss, the Facility Lessee may, at its option, continue
remarketing the Facility during the Extended Marketing Period. If at least one
cash bid is received prior to the end of the Extended Marketing Period, the
Owner Lessor shall, subject to the Facility Lessee's right of first refusal,
sell the Undivided Interest in the Facility to the highest cash bidder on an
"as, is", "where is" and "with all faults" basis, without representations or
warranties other than a warranty of the Owner Lessor as to the absence of Owner
Lessor's Liens and a warranty of the Owner Participant as to the absence of
Owner Participant's Liens. The Facility Lessee shall pay on an After-Tax Basis
all reasonable, documented out-of-pocket costs and expenses of the Owner
Participant the Owner Lessor, and so long as the Lessor Notes are outstanding
and the Lien of the Lease Indenture has not been terminated, the Security
Agent, the Lender and the Bondholder Trustee; the Owner Lessor shall pay the
net cash proceeds of the sale to the Facility Lessee to the extent of payments
made by the Facility Lessee under clauses (x) or (y) above. If there is no
Extended Marketing Period or no offers are received prior to the end of the
Extended Marketing Period, the Owner Lessor shall sell the Facility as scrap
subject to the Facility Lessee's right of first refusal.

                  (c) Any Requisition or property damage insurance proceeds
received in respect of an Event of Loss shall be used to pay, or to reimburse
the Facility Lessee for, the Event of Loss Payment. Requisition proceeds in
excess of the Event of Loss Payment shall be for the account of the Owner
Lessor and the Facility Lessee in accordance with their respective interests.

                  (d) Notwithstanding anything herein to the contrary, in the
event of a Regulatory Event of Loss or an Event of Loss described in clause
(v) of the definition of Event of Loss and in connection with the Facility
Lessee's purchase of the Undivided Interest in accordance with SECTION
10.1(b), the Facility Lessee may, at its option, in lieu of paying
Termination Value, assume the Owner Lessor's obligations under the Lease
Indenture and pay an amount equal to the difference between the Termination
Value and the outstanding principal amount of the Lessor Notes assumed by the
Facility Lessee, so long as all payments required to be made pursuant to
Section 10.3(d) have been made and no Lease Event of Default or Material
Lease Default shall have occurred and be continuing after giving effect to
such assumption. (Alternatively, the Facility Lessee may purchase the Owner
Participant's interest in the Owner Lessor and elect not to terminate

                                      22
<Page>

this Facility Lease pursuant to SECTION 13.4). In addition, on the Termination
Value Payment Date, the Facility Lessee, in addition to the Termination Value
determined as of the relevant Termination Value Payment Date, shall also pay
(without duplication of any other amount paid hereunder) on an After-Tax Basis
to the Owner Lessor all reasonable documented out-of-pocket costs and expenses
incurred in connection with the Event of Loss by the Owner Lessor, the Owner
Participant, and so long as the Lessor Notes are outstanding and the Lien of
the Lease Indenture has not been discharged, the Security Agent, the Lease
Indenture Trustee, the Lender and the Bondholder Trustee plus any other Rent
(other than Basic Lease Rent or Renewal Rent payable after the Termination
Value Payment Date) due and unpaid on the Termination Value Payment Date and
any amount due and unpaid or accrued and unpaid on the Termination Value
Payment Date under any other Operative Document, whereupon (other than in the
case of a Special Lessee Transfer) this Facility Lease, Facility Site Lease and
Facility Site Sublease shall terminate. The Facility Lessee shall pay any
Lessee Section 467 Loan Balance and the Owner Lessor shall pay to the Facility
Lessee the Lessor Section 467 Loan Balance, if any, determined as of such date.
The obligation to make such payments shall be subject to the provisions of
SECTION 3.2(d).

         SECTION 10.3      APPLICATION OF PROCEEDS. Any payments with respect
to the Undivided Interest received at any time by the Owner Lessor or the
Facility Lessee from any Governmental Authority or from insurance proceeds as
a result of the occurrence of an Event of Loss shall be applied as follows:

                  (a) all such payments received at any time by the Facility
Lessee shall be promptly paid to the Owner Lessor or, so long as the Lessor
Notes are outstanding, to the Security Agent, for application pursuant to the
following provisions of this SECTION 10.3, except that, so long as no Material
Lease Default or Lease Event of Default shall have occurred and be continuing or
shall be created thereby (other than Material Lease Defaults and Lease Events of
Defaults arising as a result of such Event of Loss), the Facility Lessee may
retain any amounts that the Owner Lessor would at the time be obligated to pay
to the Facility Lessee as reimbursement pursuant to Section 10.3(b);

                  (b) so much of such payments as shall not exceed the Event of
Loss Payment required to be paid by the Facility Lessee pursuant to SECTION 10.2
shall be applied in reduction of the Facility Lessee's obligation to pay such
amount if not already paid by the Facility Lessee or, if already paid by the
Facility Lessee, shall, so long as no Material Lease Default or Lease Event of
Default shall have occurred and be continuing or shall be created thereby (other
than Material Lease Defaults and Lease Events of Defaults arising as a result of
such Event of Loss), be applied to reimburse the Facility

                                      23
<Page>

Lessee for its payment of such amount; and

                  (c) the balance, if any, of such payments remaining thereafter
shall be apportioned between the Owner Lessor and the Facility Lessee in
accordance with their respective interests.

         Notwithstanding the foregoing, if the Facility Lessee shall have
elected to rebuild or replace the Facility pursuant to SECTION 10.1(b), any
insurance proceeds received by the Owner Lessor, the Security Agent or the
Facility Lessee as a result of the occurrence of an Event of Loss described in
clause (i) or (ii) of the definition of Event of Loss shall be applied as
provided in SECTION 11.2.

                  (d) Notwithstanding anything to the contrary herein, upon
the occurrence of an Event of Loss described in clauses (i), (ii), (iii) or
(v) of the definition of Event of Loss or a Partial Event of Loss in
connection with which the Facility Lessee does not elect to rebuild or does
not deliver the Reinvestment Notice to the Owner Lessor, the Owner
Participant and so long as the Lessor Notes are outstanding and the Lien of
the Lease Indenture has not been discharged, the Security Agent, the Lender
and the Bondholder Trustee, within 45 days of the settlement of or payment of
$5,000,000 or more in respect of an Event of Loss described in clauses (i),
(ii), (iii) or (v) of the definition of the Event of Loss or a Partial Event
of Loss, then the Facility Lessee shall pay to the Owner Lessor as
Supplemental Rent an amount equal to such Owner Lessor Percentage of such
payment to be applied pursuant to Section 4.8 of the Lease Indenture. Payment
of any such Supplemental Rent shall not relieve the Facility Lessee from any
of its other obligations hereunder, including its obligations as set forth in
Section 10.6.

         SECTION 10.4      Rebuilding or Replacement. In connection with the
Facility Lessee's obligation to rebuild or replace the Facility pursuant to
Section 10.1(b), the Facility Lessee shall have satisfied the conditions set
forth in clauses (a) through (g) below (collectively, the "Rebuild Conditions"):

                  (a) delivery to the Owner Participant either (i) an opinion
reasonably satisfactory to it from Owner Participant's Counsel to the effect
that such rebuilding or replacement should not result in any material
unindemnified incremental tax consequences to the Owner Participant, (ii) an
indemnity against such risk in form and substance reasonably satisfactory to the
Owner Participant from or guaranteed by an entity that meets the Minimum Credit
Rating or (iii) any other indemnity arrangement against such risks satisfactory
to the Owner Participant;

                  (b) delivery to the Owner Participant and, so long as the
Lessor Notes are outstanding, the Security Agent, the Lender and the Bondholder
Trustee (i) a report of the Engineering Consultant, or such other independent
engineer satisfactory to the Owner Participant and the Lease Indenture Trustee,
to the effect that the rebuilding or replacement of the Facility is
technologically feasible and economically viable and that it is reasonable to
expect that such rebuilding or replacement can be completed prior to the end of
the Facility Lease Term, including any Renewal Lease Term then in effect or
elected by the Facility Lessee (including any extension pursuant to Section
10.1(b), and (ii) a report of an appraiser selected by the Facility Lessee and
reasonably acceptable to the Owner Participant, to the effect that the Facility
will after completion of the rebuilding or replacement have at least the same
current value, residual value, utility and remaining economic useful life as
the Facility immediately prior to the Event of Loss (assuming the Facility
shall be in the condition required by the terms of this Facility Lease) and
such rebuilding or replacement will not result in the Facility being "limited
use property" within the meaning on Rev. Proc. 2001-28, 2001-19 I.R.B. 1156 or
Rev. Proc. 2001-29, 2001-19 I.R.B. 1160;

                  (c) delivery of a certificate from a responsible officer of
the Facility Lessee to the reasonable satisfaction of the Owner Participant and
the Lease Indenture Trustee that the Facility Lessee (i) has adequate financial
resources, from insurance proceeds or otherwise, to complete such rebuilding or
replacement and to perform its other obligations under the Operative Documents
including the payment Basic Lease Rent or Renewal Rent, as the case may be, that
is projected to become due and payable while the Facility is being rebuilt or
replaced and (ii) reasonably expects to be capable of replacing or modifying any
project documents that must be replaced or modified in order

                                      24
<Page>

to avoid a Material Adverse Effect;

                  (d) commencement of such rebuilding or replacement as soon
as reasonably practicable and, in any event, within 12 months of such damage
or destruction;

                  (e) not causing any material adverse accounting effect on
the Owner Participant;

                  (f) demonstration of the absence of any Material Lease
Default or Lease Event of Default (other than any Material Lease Default or
Lease Event of Default that would be cured by such rebuilding); and

                  (g) demonstration that all Governmental Approvals required
in connection with the work done or proposed to be done have been obtained or
can reasonably be expected to be obtained on or prior to the date required in
connection therewith

         SECTION 10.5      APPLICATION OF PAYMENTS NOT RELATING TO AN EVENT OF
LOSS. (i) In the event that during the Facility Lease Term title to, or the use
of, all or any portion of the Undivided Interest, the Facility or the Facility
Site is requisitioned or taken by or pursuant to a request of any Governmental
Authority under the power of eminent domain or otherwise for a period or in a
manner which does not constitute an Event of Loss, the Facility Lessee's
obligation to pay all installments of Basic Lease Rent or Renewal Rent, as
applicable, shall continue for the duration of such requisitioning or taking.
Subject to Section 10.3(d) hereof, the Facility Lessee shall be entitled to
receive and retain for its own account all sums payable for any such period by
such Governmental Authority as compensation for such requisition or taking of
possession; PROVIDED, that if at the time of such payment a Material Lease
Default or a Lease Event of Default shall have occurred and be continuing, such
amounts shall be paid to and held by the Owner Lessor unless the Lessor Notes
are outstanding, in which case such amounts shall be paid to and held by the
Security Agent, as security for the obligations of the Facility Lessee under
this Facility Lease until such time as no Material Lease Default or Lease Event
of Default is continuing.

                  (b) Any insurance proceeds with respect to the Undivided
Interest received at any time by the Owner Lessor, the Security Agent or the
Facility Lessee under any of the insurance policies required to be maintained by
the Facility Lessee under SECTION 11 as a result of any damage to the Facility
or any part thereof which does not constitute an Event of Loss shall be applied
as follows: (i) in accordance with SECTION 11.7, and (ii) the balance, if any,
of such insurance proceeds remaining thereafter shall be paid to the Facility
Lessee.

         SECTION 10.6      PARTIAL CASUALTIES.  If the Facility or any part
thereof shall suffer any destruction, damage, loss or theft not constituting an
Event of Loss ("Partial Event of Loss"), the Facility Lessee shall rebuild or
make such repairs as are necessary (i) to restore the Facility to the current
value, residual value, utility and remaining economic useful life it had
immediately prior to such destruction, damage, loss or theft (assuming, for the
purposes

                                      25
<Page>

of determining the current value, residual value, utility and remaining
economic useful life of the Facility, that no Severable Improvements that are
not Required Improvements shall have been made to the Facility during the
Facility Lease Term (and assuming the Facility was in the condition and repair
required to be maintained by the terms of this Facility Lease) and (ii) to
ensure that the Facility is maintained in accordance with Sections 7 and 8
hereof and that the Facility does not become "limited use property" within the
meaning of Rev. Proc. 2001-28, 2001-19 I.R.B. 1156 or Rev. Proc. 2001-29,
2001-19 I.R.B. 1160, provided however, that in connection with a Partial Event
of Loss in respect of which the Facility Lessee received a settlement of or
payment of $5,000,000 or more, the Facility Lessee shall deliver a Reinvestment
Notice to the Owner Lessor, the Owner Participant, the Lease Indenture Trustee,
the Security Agent, the Lender and the Bondholder Trustee within 45 days of the
receipt of the proceeds in respect of such Partial Event of Loss.

SECTION 11        INSURANCE

         SECTION 11.1  GENERAL.  The Facility Lessee will comply with the
requirements set forth in Schedule 5.10 of the Participation Agreement.

         SECTOPM 11.2  APPLICATION OF INSURANCE PROCEEDS.

                  (a) All insurance proceeds exceeding $5,000,000 but less
than $50,000,000 on account of any damage to, or destruction of, the Facility
or any part thereof (in each case less the actual costs, fees and expenses
incurred in the collection thereof), shall, subject to the provisions of
SECTION 11.2(d), be held in the Recovery Event Proceeds Account for
application in repair or replacement of the affected property. If the
insurance proceeds on account of such damage to, or destruction of, the
Facility exceed $50,000,000, or in the case of an Event of Loss, then the
Owner Lessor's Percentage of all insurance proceeds on account of such damage
or destruction to the Facility shall be paid to the Owner Lessor or, if the
Lessor Notes are outstanding and the Lien of the Lease Indenture shall not
have been discharged, the Security Agent and shall be applied and dealt with
as provided in SECTION 11.2(b) below.

                  (b) Other than proceeds of insurance paid to the Security
Agent or the Owner Lessor in connection with an Event of Loss, all proceeds
of insurance paid to the Security Agent or the Owner Lessor, as the case may
be, and the Facility Lessee shall be paid over to the Facility Lessee upon
receipt by the Owner Lessor and the Lease Indenture Trustee, if applicable,
of evidence satisfactory to each of them, in their reasonable judgment that
such proceeds, together with funds of the Facility Lessee available for the
purpose will be sufficient to complete such repair and restoration of the
Facility or portion thereof. Promptly after receiving Actual Knowledge that a
Material Lease Default or Lease Event of Default shall have occurred and be
continuing, the Facility Lessee shall notify the insurer under any property
insurance policy providing coverage of the Undivided Interest of the
existence of such Material Lease Default or Lease Event of Default. After
receipt of any such notification, each such insurer shall pay the proceeds of
any property insurance policies in accordance with SECTION 11.2(d).

                  (c) Within 30 days after receiving Actual Knowledge that an
Event of

                                        26

<Page>

Loss has occurred, the Facility Lessee shall notify the insurer under any
property insurance policy providing coverage for such Event of Loss, the
Security Agent so long as the Lien of the Lease Indenture shall not have been
discharged, and the Owner Lessor of the occurrence of such Event of Loss.
Each of the Facility Lessee, the Owner Lessor and the Security Agent, as
applicable, shall provide any necessary endorsements and otherwise cooperate
in the processing of any related claims or proceeds in accordance with the
terms of this SECTION 11.

                  (d) Notwithstanding the foregoing provisions of this SECTION
11 or SECTION 10, so long as a Material Lease Default or Lease Event of Default
shall have occurred and be continuing, the proceeds of any insurance required to
be maintained pursuant to this SECTION 11 that would otherwise be payable to or
for the account of, or that would otherwise be retained by, the Facility Lessee
pursuant to this SECTION 11 or SECTION 10.3 will be held as security for the
obligations of the Facility Lessee under this Facility Lease by the Owner Lessor
or, so long as the Lien of the Lease Indenture shall not have been terminated or
discharged, the Security Agent and, at such time thereafter as no Material Lease
Default or Lease Event of Default shall be continuing, such amount shall be paid
promptly to the Facility Lessee.

SECTION 12        INSPECTION

                  During the Facility Lease Term, each of the Owner Lessor, the
Owner Participant, the OP Guarantor and, so long as the Lessor Notes are
outstanding and the Lien of the Lease Indenture has not been discharged, the
Security Agent, the Lender and the Bondholder Trustee and their respective
representatives shall have the right, during normal business hours, upon
reasonable notice to the Facility Lessee and at their own expense (except when a
Lease Default or a Lease Event of Default has occurred and is continuing) and
risk, to inspect the Facility and the records relating to the operation and
maintenance thereof in the Facility Lessee's custody or, so long as the Facility
Lessee has the opportunity to be present, to which the Facility Lessee has
access; PROVIDED, HOWEVER, that any such inspection will not interfere with the
operation or maintenance of the Facility or the conduct by the Facility Lessee
of its business and shall be in accordance with the Facility Lessee's safety and
insurance programs; PROVIDED, FURTHER, HOWEVER, that, except during the
continuance of a Material Lease Default or a Lease Event of Default, no more
than one inspection in any twelve (12) month period shall be conducted by each
of (x) the Owner Lessor and the Owner Participant and (y), if applicable, the
Lease Indenture Trustee; PROVIDED, FURTHER, HOWEVER, that any such Person (or
group of Persons) may make more than one inspection during the last eighteen
(18) months of the Facility Lease Term unless the Facility Lessee has exercised
one of its options under SECTION 15 hereof to renew this Facility Lease beyond
such eighteen (18) month period. In no event shall the Owner Lessor, the Owner
Participant, the OP Guarantor, or the Lease Indenture Trustee, the Lender and
the Bondholder Trustee have any duty or obligation to make any such inspection
and such Persons shall not incur any liability or obligation by reason of not
making any such inspection.

SECTION 13        TERMINATION OPTION FOR BURDENSOME EVENTS

                                        27

<Page>

         SECTION 13.1  ELECTION TO TERMINATE. The Facility Lessee, by giving
written notice (the "BURDENSOME TERMINATION NOTICE") to the Owner Lessor no
later than twelve (12) months after the date the Facility Lessee receives
notice or first has Actual Knowledge of either of the events specified below,
shall have the right, at its option, to terminate this Facility Lease in
accordance with SECTION 13.3 on the Termination Date specified in the
Burdensome Termination Notice (which shall be a date occurring not less than
30 days nor more than 60 days after the date of the Burdensome Termination
Notice) or such later Termination Date (which shall be a date occurring not
more than 12 months after the date of the Burdensome Termination Notice) as
may be necessary for the Facility Lessee to obtain such consents and
approvals required for the Facility Lessee to comply with its obligations
under this SECTION 13 if:

                  (a) as a result of a change in Requirements of Law, it shall
have become illegal for the Facility Lessee to continue this Facility Lease or
for the Facility Lessee to make payments under this Facility Lease, and the
transactions contemplated by the Operative Documents cannot be restructured to
comply with such change in Requirements of Law in a manner reasonably acceptable
to the Facility Lessee, the Owner Participant, the Owner Lessor, and, so long as
the Lessor Notes are outstanding, the Security Agent, the Lender and the
Bondholder Trustee; or

                  (b) one or more events outside the control of the Facility
Lessee, shall have occurred which will, or can reasonably be expected to give
rise to an obligation by the Facility Lessee to make a payment or to incur an
indemnity obligation in respect of the Tax Indemnity Agreement or Section 10.1
or 10.2 of the Participation Agreement; PROVIDED, HOWEVER, that (i) such payment
or indemnity obligation (and the underlying cost or tax) can be avoided in whole
or in material part if this Facility Lease is terminated or the Owner Lessor
sells the Owner Lessor's Interest and (ii) the amount of such avoided payments
would exceed (on a present value basis, discounted at the Discount Rate,
compounded on an annual basis to the date of the termination) 2.5% of the
Purchase Price (unless the Owner Participant has waived its right to payments in
excess of 2.5% of the Purchase Price or arranged for its own account for the
payment thereof).

                  (c) Notwithstanding the foregoing, if the Owner Participant or
any Affiliate thereof owns the membership interest in any Other Owner Lessor,
the Facility Lessee may deliver to the Owner Lessor a Burdensome Termination
Notice and exercise the Burdensome Buyout Option (as defined below) only if (i)
it has also delivered such a notice to each Other Owner Lessor under Section
13.1 of the Other Facility Leases and (ii) it is concurrently exercising its
Burdensome Buyout Option under Section 13 of the Other Facility Leases;
provided, however, that the requirements in clauses (i) and (ii) of this
paragraph shall not apply in the event the Facility Lessee does not have the
right to deliver such notice or exercise such Burdensome Buyout Option, as
applicable, under Section 13 of the Other Facility Leases.

                  (d) If the Facility Lessee does not give the Burdensome
Termination Notice within twelve (12) months of the date the Facility Lessee
receives notice or has Actual Knowledge of an event or condition described
above, the Facility Lessee shall lose its right to terminate this Facility Lease
pursuant to this SECTION 13.1 as a result of

                                        28

<Page>

such event or condition.

         SECTION 13.2  SOLICITATION OF QUALIFYING BIDS; PAYMENTS UPON
TERMINATION.

                  (a) (i) Upon receipt of a Burdensome Termination Notice
pursuant to SECTION 13.1, the Owner Lessor shall have the right, but shall be
under no obligation to, sell the Undivided Interest and, at the request of
the Owner Lessor, the Facility Lessee will, as nonexclusive agent for the
Owner Lessor, use commercially reasonable efforts to obtain cash bids from
unaffiliated third parties for the sale of the Undivided Interest. In
connection with the delivery of a Burdensome Termination Notice, the Facility
Lessee may, but shall be under no obligation to, make an offer to purchase
the Undivided Interest and shall have a right of first refusal with respect
to any offer received from an unaffiliated third party (which may be
exercised any time prior to the Termination Date), in connection with such
sale. Only bona fide bids, whether from the Facility Lessee or a third party,
to purchase the Undivided Interest for cash on the Termination Date on an "as
is, where is" and "with all faults" basis without any representation, other
than by the Owner Lessor that the Owner Lessor's Undivided Interest is free
of Owner Lessor Liens and a warranty of the Owner Participant as to the
absence of Owner Participant Liens, shall be qualifying cash bids
("QUALIFYING CASH BIDS") and all the proceeds of any such Qualifying Cash Bid
shall be for the account of the Owner Lessor. If a Qualifying Cash Bid is
received and the Owner Lessor accepts such bid in writing, the Facility
Lessee shall pay the Owner Lessor on the Termination Date (i) the Termination
Value determined as of such Termination Date, less the cash actually received
by the Owner Lessor in connection with such Qualifying Cash Bid (or, if the
amount of such cash actually received by the Owner Lessor from such
Qualifying Cash Bid is equal to or greater than such Termination Value, zero)
plus (ii) all amounts due and payable under SECTION 13.3. If a Qualifying
Cash Bid is rejected in writing by the Owner Lessor and the Owner Lessor has
not elected to retain the Owner Lessor's Interest, the Facility Lessee shall
pay the Owner Lessor on the Termination Date (x) the Termination Value
determined as of such Termination Date, less the amount of such rejected
Qualifying Cash Bid (or, if the amount of such rejected Qualifying Cash Bid
is equal to or greater than such Termination Value, zero) plus (y) all
amounts due and payable under SECTION 13.3. If no Qualifying Cash Bid is
offered and the Owner Lessor has not elected to retain the Owner Lessor's
Interest, the Facility Lessee shall pay the Owner Lessor on the Termination
Date (A) the Termination Value determined as of such Termination Date plus
(B) all amounts due and payable under SECTION 13.3. If the Owner Lessor
elects in writing to retain the Owner Lessor's Interest, the Facility Lessee
shall pay the Owner Lessor on the Termination Date all amounts due and
payable under Section 13.3 (but shall have no obligation to pay Termination
Value). In any case, the Owner Lessor shall be obligated to pay all amounts
payable under SECTION 13.3.

                  (b) If, within 30 days of the Termination Date set forth in
the Burdensome Termination Notice delivered pursuant to Section 13.1 (a), (i)
the Facility Lessee shall not have paid Termination Value in accordance with
clause (A) of Section 13.1 above, (ii) the Owner Lessor shall not have received
a Qualifying Cash Bid from the Facility Lessee, and (iii) the Owner Lessor shall
not have elected to retain the Owner Lessor's Interest, this Facility Lease
shall continue, the Facility Lessee shall lose its right to terminate this
Facility Lease for the Burdensome Buyout Event referred to in such

                                        29

<Page>

Burdensome Termination Notice, and any and all rights that the Owner Lessor
had immediately prior to the receipt of such Burdensome Termination Notice
shall remain in full force and effect.

         SECTION 13.3  PROCEDURE FOR EXERCISE OF TERMINATION OPTION.

                  (a) (i) If the Facility Lessee shall have exercised its
option under SECTION 13.1 (a "BURDENSOME BUYOUT OPTION"), the Facility Lessee
shall, prior to and as a condition to the closing of the sale, pay (in
addition to the applicable amount set forth in SECTION 13.2(a), if any,
without duplication of any other amounts paid hereunder): (i) on an After-Tax
Basis, all reasonable documented out-of-pocket costs and expenses of the
Owner Lessor, the Owner Participant and, so long as the Lessor Notes are
outstanding and the Lien of the Lease Indenture has not been discharged, the
Security Agent; (ii) any Lessee Section 467 Loan Balance; and (iii) any other
payment under this Facility Lease (other than Basic Lease Rent or Renewal
Rent payable after the Termination Date) due and unpaid on the Termination
Date and any amounts due and unpaid, or accrued and unpaid, on the
Termination Date under any other Operative Document. Concurrently with the
payment of all sums specified in SECTION 13.2 and this SECTION 13.3(a), (A)
Allocated Rent and Basic Lease Rent or Renewal Rent, as the case may be, for
the Undivided Interest shall cease to accrue, (B) this Facility Lease, the
Facility Site Lease and the Facility Site Sublease shall terminate and the
Facility Lessee shall cease to have any liability to the Owner Lessor with
respect to the Undivided Interest, except for Supplemental Lease Rent and
other obligations surviving pursuant to the express terms of any Operative
Document, (C) the Owner Lessor will pay all amounts of principal and interest
and any other amounts owing under the Lessor Notes (excluding any Make Whole
Premium, if any, due and payable) to the Security Agent pursuant to SECTION
2.11 of the Lease Indenture, (D) in connection with any sale of the Owner
Lessor's Interest pursuant to SECTION 13.2, the Owner Lessor shall transfer
(by an appropriate instrument of transfer in form and substance reasonably
satisfactory to the Owner Participant and Facility Lessee and prepared by and
at the expense of the Facility Lessee) all of its right, title and interest
in and to the Owner Lessor's Interest to the Facility Lessee (or its
designee) or to the third party making the accepted Qualifying Cash Bid on an
"as is", "where is", "with all faults" basis, without representation or
warranty other than a warranty as to the absence of Owner Lessor Liens and a
warranty of the Owner Participant as to the absence of Owner Participant
Liens, (E) the Owner Lessor shall execute and deliver appropriate releases
and other documents or instruments necessary or desirable to effect the
foregoing all to be prepared, filed and recorded (as appropriate) at the sole
cost and expense of the Facility Lessee and (F) the Owner Lessor shall pay to
the Facility Lessee the Lessor Section 467 Loan Balance, if any, determined
as of such date. The obligation to make such payments shall be subject to the
provisions of SECTION 3.2(d). It shall be a condition precedent to the
termination of this Facility Lease pursuant to this SECTION 13.3, that the
Owner Lessor and the Facility Lessee shall each pay all amounts that each is
obligated to pay under this SECTION 13.3.

                  (b) If the Facility Lessee fails to consummate the termination
option under this SECTION 13 after giving notice of its intention to do so
(other than in consequence of failure of the Owner Lessor or the Owner
Participant to fulfill their respective obligations under this SECTION 13), (A)
this Facility Lease shall continue, (B) such failure to

                                        30

<Page>

consummate shall not constitute a default under this Facility Lease, (C) the
Facility Lessee will lose its right to terminate this Facility Lease pursuant
to this SECTION 13 as a result of such event or condition during the
remainder of the Facility Lease Term but the Facility Lessee shall in any
event (without relieving the Owner Lessor of any liability hereunder) pay the
amounts set forth in clause (ii) of the first sentence of SECTION 13.3(a) and
(D) the Owner Lessor shall pay to the Facility Lessee the Lessor Section 467
Loan Balance, if any, determined as of such date. The obligation to make such
payments shall be subject to the provisions of SECTION 3.2(d).

         SECTION 13.4      ASSUMPTION OF THE LESSOR NOTES; SPECIAL LESSEE
                           TRANSFERS.

                  (a) Notwithstanding the foregoing provisions of SECTION 13.3
to the contrary, at the option of the Facility Lessee, if (i) the Facility
Lessee shall have executed and delivered an assumption agreement to assume the
Lessor Notes on a fully recourse basis, as permitted by and in accordance with
SECTION 2.12 of the Lease Indenture, (ii) all other conditions contained in such
SECTION 2.12 of the Lease Indenture shall have been satisfied, (iii) no Material
Lease Default or Lease Event of Default shall have occurred and be continuing
and shall not be cured by such assumption and (iv) the Facility Lessee shall
purchase the Undivided Interest pursuant to SECTION 13.1 OR 13.2, as the case
may be, then, the obligation of the Facility Lessee to pay Termination Value
shall be reduced by the outstanding principal amount of the Lessor Notes so
assumed by the Facility Lessee and the Owner Lessor shall have no further
obligation to prepay the outstanding principal and accrued interest on the
Lessor Notes to the extent of the Lessor Notes so assumed by the Facility
Lessee; PROVIDED, HOWEVER, for so long as the Lessor Notes are outstanding, if
the Facility Lessee shall have chosen to assume the Lessor Notes pursuant to
this SECTION 13.4(a), the Facility Lessee shall acquire the Undivided Interest
from the Owner Lessor subject to the Lien of the Lease Indenture.

                  (b) If the Facility Lessee assumes the Lessor Notes under
this SECTION 13, the Facility Lessee shall, on the Termination Date, also pay
(without duplication of any other amount paid hereunder) the Owner Lessor the
following: (i) on an After-Tax Basis, all reasonable out-of-pocket costs and
expenses of the Owner Lessor, the Owner Participant, the OP Guarantor, the
Security Agent, the Lender and the Bondholder Trustee; (ii) the Lessee Section
467 Loan Balance; (iii) any other payment under this Facility Lease (other than
Basic Lease Rent or Renewal Rent payable after the Termination Date) due and
unpaid on the Termination Date and any amounts due and unpaid, or accrued and
unpaid, on the Termination Date under any other Operative Document. The Owner
Lessor shall pay to the Facility Lessee the Lessor Section 467 Loan Balance, if
any, determined as of such date. The obligation to make such payment shall be
subject to the provisions of Section 3.2(d).

                  (c) Notwithstanding the foregoing provisions of SECTION 13.3
to the contrary, in the case of a Burdensome Buyout Event, the Facility Lessee
(or its designee) so long as the Facility Lessee shall remain liable under this
Facility Lease to pay Basic Lease Rent and all other payments hereunder in full,
and in all respects in accordance with SECTION XV of the Participation
Agreement, may purchase the Lessor Membership Interest or all of the outstanding
membership interests in the Owner Participant, in lieu of purchasing the
Undivided Interest pursuant to SECTIONS 13.1 AND 13.2 hereof, and keep this
Facility Lease (and Lessor Notes) in place in consideration of the amounts set
forth in SECTION XV of the Participation Agreement.

                                        31

<Page>

SECTION 14        TERMINATION FOR OBSOLESCENCE; PARTIAL RELEASE OF INTEREST

         SECTION 14.1  TERMINATION. Upon at least six months' prior written
notice to the Owner Lessor, (which notice shall be accompanied by a
certification by the Facility Lessee's Manager as to one or more of the matters
described below), the Facility Lessee shall have the option, so long as no
Lease Event of Default shall have occurred and be continuing on the date of
such notice or on the proposed Obsolescence Termination Date (as defined
below), to terminate this Facility Lease on any Termination Date occurring on
or after the seventh anniversary of the Closing Date (the date of termination
selected by the Facility Lessee being the "Obsolescence Termination Date")
which proposed Obsolescence Termination Date shall be set forth in the
aforementioned notice, on the terms and conditions set forth in this Section
14, if the Facility is economically or technologically obsolete; as determined
by the general partner of the Facility Lessee in good faith, including, without
limitation, as a result of any change in applicable law, regulation or tariff,
any material change in the markets for the wholesale purchase and/or sale of
energy or any imposition by FERC or any other Governmental Authority having or
claiming jurisdiction over the Facility Lessee or the Facility of any
burdensome conditions or requirements including requiring capital improvements
to the Facility.

                  Notwithstanding the foregoing, the Facility Lessee may
elect to terminate this Facility Lease pursuant to this SECTION 14.1 and
exercise its other rights under this SECTION 14 only if (i) concurrently with
such election, it also elects to terminate all Other Facility Leases pursuant
to SECTION 14.1 thereof and (ii) concurrently with its termination hereunder,
it terminates all Other Facility Leases in accordance with SECTION 14 thereof.

         SECTION 14.2  SOLICITATION OF OFFERS. If the Facility Lessee shall
give the Owner Lessor notice pursuant to SECTION 14.1 and the Owner Lessor
shall not have elected to retain the Undivided Interest pursuant to SECTION
14.3 below, the Facility Lessee shall (i) as non-exclusive agent for the
Owner Lessor, use commercially reasonable efforts to obtain bids from
unaffiliated third parties with the Facility Lessee and sell the Owner
Lessor's Interest on the Obsolescence Termination Date and (ii) covenant that
it will not sell the Owner Lessor's Interest to itself, an Affiliate or to
any third party with whom the Facility Lessee or its Affiliate has an
arrangement to use or operate the Facility to generate power for the Facility
Lessee's or any such Affiliate's benefit after the termination of this
Facility Lease. All of the proceeds of any such sale, will be for the account
of the Owner Lessor; PROVIDED that, so long as the Lessor Notes are
outstanding and the Lien of the Lease Indenture has not been discharged, the
proceeds of such sale shall be paid directly to the Security Agent. At least
120 days prior to the Obsolescence Termination Date, the Facility Lessee
shall certify to the Owner Lessor and, so long as the Lessor Notes are
outstanding and the Lien of the Lease Indenture has not been discharged, the
Security Agent, the Lender and the Bondholder Trustee each bid or offer, the
amount and terms thereof and the name and address of the party (which shall
not be the Facility Lessee, any of its Affiliates or any third party with
whom it or any such Affiliate has an arrangement to use or operate the
Facility to generate power for the benefit of the Facility Lessee or such
Affiliate after the termination of this Facility Lease)

                                        32

<Page>

submitting such bid or offer. The Owner Lessor shall also have the right, but
not the obligation, to obtain bids for the sale of the Owner Lessor's
Interest either directly or through agents other than the Facility Lessee.

         SECTION 14.3  RIGHT OF OWNER LESSOR TO RETAIN THE UNDIVIDED
INTEREST. The Owner Lessor may irrevocably elect to retain, rather than sell,
the Undivided Interest by giving notice to the Facility Lessee at least 90
days prior to the Obsolescence Termination Date. If the Owner Lessor elects
to retain the Undivided Interest pursuant to this SECTION 14.3, on the
Obsolescence Termination Date the Facility Lessee shall pay to the Owner
Lessor the amounts described in clauses (i) through (iii) of SECTION 14.4
below. Concurrently with the payment of all sums required to be paid pursuant
to this SECTION 14.3 or SECTION 14.4 below, (i) Allocated Rent and Basic
Lease Rent or Renewal Rent, as the case may be, for the Undivided Interest
shall cease to accrue, (ii) this Facility Lease and the Facility Site
Sublease shall terminate and the Facility Lessee shall cease to have any
liability or obligations hereunder or any other Operative Document with
respect to the Undivided Interest, except for Supplemental Lease Rent and
other obligations surviving pursuant to the express terms of the Operative
Documents, (iii) the Owner Lessor shall pay all outstanding principal and
accrued interest on the Lessor Notes and, to the extent actually received
from the Facility Lessee as Supplemental Lease Rent, all other amounts due
under the Lease Indenture including the reimbursement of any fees or expenses
of the Security Agent, (iv) the Facility Lessee shall return the Undivided
Interest to the Owner Lessor in accordance with SECTION 5.1 hereof and (v)
only with respect to the termination option of the Owner Lessor under Section
14.4 , the Owner Lessor will transfer (by an appropriate instrument of
transfer in form and substance reasonably satisfactory to the Owner Lessor
the Owner Lessor's Interest under Section 14.4 to the purchaser on "as is",
"where is", "with all faults" basis, without representations or warranties
other than a warranty as to the absence of Owner Lessor's Liens and a
warranty from the Owner Participant as to the absence of Owner Participant's
Liens, (vi) the Owner Lessor shall execute and deliver appropriate releases
and other documents or instruments necessary or desirable to effect the
foregoing and (vii) the Owner Lessor shall pay to the Facility Lessee the
Lessor Section 467 Loan Balance, if any, determined as of such date. The
obligation to make such payments shall be subject to the provisions of
SECTION 3.2(D). It shall be a condition precedent to the termination of this
Facility Lease pursuant to this SECTION 14.3, that the Owner Lessor and the
Facility Lessee shall each pay all amounts that each is obligated to pay
under this SECTION 14.3.

         SECTION 14.4  PROCEDURE FOR EXERCISE OF TERMINATION OPTION. If the
Owner Lessor has not elected to retain the Undivided Interest in accordance
with SECTION 14.3 hereof, on the Obsolescence Termination Date, the Owner
Lessor shall sell the Owner Lessor's Undivided Interest under this SECTION
14.4 and its interest in the Ground Interest under SECTION 6 of the Facility
Site Lease and SECTION 6 of the Facility Site Sublease to the bidder or
bidders pursuant to SECTION 14.2 hereof (which shall not be the Facility
Lessee, any Affiliate thereof or any third party with whom the Facility
Lessee or any such Affiliate has an arrangement to use or operate the
Facility to generate power for the benefit of the Facility Lessee or such
Affiliate after the termination of this Facility Lease), that shall have
submitted the highest cash bid or bids with respect to the Owner Lessor's
Interest and the Facility Lessee shall certify to the Owner Lessor, the Owner

                                        33

<Page>

Participant and, so long as the Lien of the Lease Indenture shall not have
been terminated or discharged, the Security Agent that such buyer is not the
Facility Lessee, any Affiliate thereof or any third party with whom it or an
Affiliate has an arrangement with respect to the use or operation of the
Facility after the termination of this Facility Lease. On the Obsolescence
Termination Date, the Facility Lessee shall pay to the Owner Lessor the
excess, if any, of the applicable Termination Value determined as of such
Obsolescence Termination Date over the net proceeds from the sale of the
Undivided Interest paid to or retained by the Owner Lessor plus (without
duplication) (i) on an After-Tax Basis all reasonable out-of-pocket costs and
expenses incurred by the Owner Lessor, the Owner Participant, the OP
Guarantor and, so long as the Lessor Notes are outstanding and the Lien of
the Lease Indenture has not been discharged, Security Agent in connection
therewith (excluding the reasonable fees and costs of any broker unless
engaged by the Facility Lessee on the Owners Lessor's behalf) plus (ii) any
Lessee Section 467 Loan Balance plus (iii) any other payment of the Facility
Lessee (other than Basic Lease Rent or Renewal Rent payable after the
Obsolescence Termination Date) under this Facility Lease due and unpaid on
the Obsolescence Termination Date and any amount due and unpaid, or accrued
and unpaid, on the Obsolescence Termination Date under any Operative
Document. Upon payment of all amounts due under this section, the Owner
Lessor shall pay to the Facility Lessee the Lessor Section 467 Loan Balance,
if any, determined as of such date. The obligation to make such payments
shall be subject to the provisions of SECTION 3.2(d). Unless the Owner
Lessor, with the consent of the Facility Lessee, shall have entered into a
legally binding contract to sell the Owner Lessor's Interest, the Facility
Lessee may, at its election, revoke its notice of termination by giving
notice to the Owner Lessor at least 30 days prior to the proposed
Obsolescence Termination Date, in which event this Facility Lease shall
continue with respect to the Undivided Interest and the Facility Lessee shall
have the right to later reissue a notice to terminate pursuant to SECTION
14.1; PROVIDED that the Facility Lessee may give notice that it is exercising
its Termination Option for obsolescence no more than once in any five (5)
year period. The Owner Lessor shall be under no duty to solicit bids, to
inquire into the efforts of the Facility Lessee to obtain bids or otherwise
take any action in arranging any such sale of the Owner Lessor's Interest
other than, if the Owner Lessor has not elected to retain the Owner Lessor's
Interest, to transfer the Owner Lessor's Interest in accordance with this
SECTION 14.4. It shall be a condition of the Owner Lessor's obligation to
consummate a sale of the Owner Lessor's Interest that the Facility Lessee
shall pay all amounts it is obligated to pay under this SECTION 14.4. If no
sale shall occur on the Obsolescence Termination Date, the notice of
termination shall be deemed revoked and this Facility Lease shall continue
with respect to the Undivided Interest in full force and effect in accordance
with its terms (without prejudice to the Facility Lessee's right to exercise
its rights under this SECTION 14); PROVIDED, HOWEVER, that the Facility
Lessee shall in any event pay, without duplication of any amounts payable
hereunder, the amounts set forth in clause (i) of this SECTION 14.4.

SECTION 15        LEASE RENEWAL

         SECTION 15.1  RENEWAL LEASE TERMS.

                  (a) Not earlier than 42 months prior to, but not less than 18
months prior

                                        34

<Page>

to, the expiration of the Basic Lease Term, so long as no Material Lease
Default or Lease Event of Default shall have occurred and be continuing on
the date any notice is given pursuant to this SECTION 15.1(a) and no Material
Lease Default or Lease Event of Default shall have occurred and be continuing
on the date the lease renewal proposed pursuant to this SECTION 15.1(a) is to
commence, the Facility Lessee may deliver to the Owner Lessor a notice (which
notice may be in addition to a notice of the Facility Lessee's interest in
electing a FMV Renewal Lease Term under SECTION 15.2) of the Facility
Lessee's interest in renewing this Facility Lease at the end of the Basic
Lease Term for a term (the "FIRST RENEWAL TERM") selected by the Facility
Lessee, which term shall satisfy the following criteria: (i) the aggregate of
the proposed First Renewal Term and the Basic Lease Term shall be no greater
than 75% of the estimated remaining economic useful life of the Facility as
of the Closing Date, as determined in an appraisal to be conducted at such
time and (ii) on the last date of such proposed First Renewal Term, the
estimated Fair Market Sales Value of the Facility is expected to be no less
than 20% of the Purchase Price (without taking into account inflation or
deflation subsequent to the Closing Date as determined in an appraisal to be
conducted at such time). Items (i) and (ii) of the immediately preceding
sentence shall be determined by an Independent Appraiser selected by the
Facility Lessee and reasonably acceptable to the Owner Lessor. The Facility
Lessee shall pay all expenses and fees of such Independent Appraiser. The
Facility Lessee may withdraw any notice given in accordance with this SECTION
15.1(a) by written notice of such withdrawal to the Owner Lessor, on or prior
to the date which is 18 months before the commencement of the proposed First
Renewal Term.

                  (b) Not earlier than 42 months prior to, but not less than
18 months prior to, the expiration of the First Renewal Term, so long as no
Material Lease Default or Lease Event of Default shall have occurred and be
continuing on the date any notice is given pursuant to this SECTION 15.1(b)
and no Material Lease Default or Lease Event of Default shall have occurred
and be continuing on the date the lease renewal proposed pursuant to this
SECTION 15.1(b) is to commence, the Facility Lessee may deliver to the Owner
Lessor a notice (which notice may be in addition to a notice of the Facility
Lessee's interest in electing a FMV Renewal Lease Term under SECTION 15.2) of
the Facility Lessee's interest in renewing this Facility Lease at the end of
the First Renewal Term for a term (the "SECOND RENEWAL TERM") selected by the
Facility Lessee, which term shall satisfy the following criteria: (i) the
aggregate of the proposed Second Renewal Term, the First Renewal Term and the
Basic Lease Term shall be no greater than 75% of the estimated remaining
economic useful life of the Facility as of the Closing Date, as determined in
an appraisal to be conducted at such time and (ii) on the last date of such
proposed Second Renewal Term, the estimated Fair Market Sales Value of the
Facility is expected to be no less than 20% of the Purchase Price (without
taking into account inflation or deflation subsequent to the Closing Date as
determined in an appraisal to be conducted at such time). Items (i) and (ii)
of the immediately preceding sentence shall be determined by an Independent
Appraiser selected by the Facility Lessee and reasonably acceptable to the
Owner Lessor. The Facility Lessee shall pay all expenses and fees of such
Independent Appraiser. The Facility Lessee may withdraw any notice given in
accordance with this SECTION 15.1(b) by written notice of such withdrawal to
the Owner Lessor on or prior to 18 months before commencement of the proposed
Second Renewal Lease Term.

                                        35
<Page>

                  Notwithstanding the foregoing, the Facility Lessee may
elect to renew this Facility Lease pursuant to subsection (a) or (b) of this
SECTION 15.1 and exercise its other rights under such subsections only if (i)
concurrently with such election, the Facility Lessee also elects to renew
each Other Facility Lease pursuant to subsection (a) or (b), as applicable,
of SECTION 15.1 thereof and (ii) concurrently with the renewal of this
Facility Lease, the Facility Lessee renews each Other Facility Lease in
accordance with subsection (a) or (b), as applicable, of SECTION 15.1 thereof.

         SECTION 15.2     FAIR MARKET VALUE RENEWAL LEASE TERMS. Not earlier
than 42 months prior to, but not less than 18 months prior to, the expiration
of the Basic Lease Term or any Renewal Lease Term, so long as no Material
Lease Default or Lease Event of Default shall have occurred and be continuing
on the date any notice is given pursuant to this SECTION 15.2 and no Material
Lease Default or Lease Event of Default shall have occurred and be continuing
on the date the lease renewal proposed pursuant to this SECTION 15.2 is to
commence, the Facility Lessee may deliver to the Owner Lessor a notice (which
notice may be in addition to a notice of the Facility Lessee's interest in
electing the First Renewal Term or the Second Renewal Term, as applicable) of
the Facility Lessee's interest in renewing this Facility Lease for a term
(each such term, a "FMV RENEWAL LEASE TERM") commencing upon expiration of
the Basic Lease Term or the Renewal Lease Term otherwise expiring and
extending for no less than one year and no more than five years; PROVIDED
that, no such FMV Renewal Lease Term shall extend beyond the first date
(rounded to the last day of the immediately preceding whole year) as of which
10% or less of the estimated remaining economic useful life of the Facility
as of the Closing Date would remain (such estimated remaining economic useful
life being measured as of the Closing Date) and on or after which the
estimated Fair Market Sales Value of the Facility is expected to be less than
10% of the Purchase Price (in each case, as set forth in the most recent of
(a) the Closing Appraisal, (b) the appraisal obtained in connection with the
Facility Lessee's option to elect the First Renewal Term (the "FIRST RENEWAL
OPTION") and (c) the appraisal obtained in connection with the Facility
Lessee's option to elect the Second Renewal Term (the "SECOND RENEWAL
OPTION.") The Facility Lessee may withdraw any notice given in accordance
with this SECTION 15.2 by written notice of such withdrawal to the Owner
Lessor on or prior to 18 months before commencement of the proposed Fair
Market Value Renewal Lease Term.

                  Notwithstanding the foregoing, the Facility Lessee may
elect to renew this Facility Lease pursuant to this SECTION 15.2 and exercise
its other rights under such Section only if (i) concurrently with such
election, the Facility Lessee also elects to renew each Other Facility Lease
pursuant to SECTION 15.1 thereof and (ii) concurrently with the renewal of
this Facility Lease, the Facility Lessee renews each Other Facility Lease in
accordance with SECTION 15.1 thereof.

         SECTION 15.3     RENEWAL RENT AND TERMINATION VALUE FOR RENEWAL
LEASE TERM. During each Renewal Lease Term, Renewal Rent shall be paid on the
Rent Payment Dates. The installment of Renewal Rent payable on each such Rent
Payment Date during the First Renewal Term shall be equal to the lesser of
(i) the Fair Market Rental Value of the Undivided Interest (as determined at
the commencement of the First Renewal Lease Term) and (ii) 75% of the average
Basic Lease Rent payable with respect to the Basic

                                    36

<Page>

Lease Term. The installment of Renewal Rent payable on each such Rent Payment
Date during the Second Renewal Term shall be equal to the lesser of (i) the
Fair Market Rental Value of the Undivided Interest (determined at the
commencement of the Second Renewal Term) and (ii) 75% of the average Basic
Lease Rent payable with respect to the Basic Lease Term. The installment of
Renewal Rent payable on each such Rent Payment Date during the FMV Renewal
Lease Term shall be equal to the Fair Market Rental Value of the Undivided
Interest at the end of the applicable Lease Term (determined not more than 36
months prior to the commencement of such FMV Renewal Lease Term).

         SECTION 15.4     DETERMINATION OF FAIR MARKET RENTAL VALUE. The Fair
Market Rental Value of the Undivided Interest as of the commencement of any
Renewal Lease Term shall be determined by agreement of the Owner Lessor and
the Facility Lessee within six months after receipt by the Owner Lessor of
the notice from the Facility Lessee of its election to renew pursuant to
SECTION 15.1 or 15.2 (but not more than 36 months before the commencement of
such Renewal Lease Term) or, if they shall fail to agree within such six
month period, shall be determined by an appraisal conducted by an Independent
Appraiser according to the Appraisal Procedure. The Facility Lessee shall be
responsible for such Independent Appraiser's fees and expenses.

         SECTION 15.5     TERMINATION VALUE DURING RENEWAL LEASE TERMS. The
amounts which are payable during any Renewal Lease Term in respect of
Termination Value shall be determined on the basis of the Fair Market Sales
Value of the Undivided Interest as of the commencement of such Renewal Lease
Term, amortized on a straight-line basis over such Renewal Lease Term to the
projected Fair Market Sales Value of the Facility as of the expiration of
such Renewal Lease Term, as such Fair Market Sales Value in each case is
determined prior to the commencement of such Renewal Lease Term.

SECTION 16        EVENTS OF DEFAULT

                  Each of the following events shall constitute a "Lease
Event of Default" hereunder (whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to
or in compliance with any judgment, decree or order of any court or any
order, rule or regulation of any Governmental Authority):

                  (a) the Facility Lessee shall fail to make any payment of
Basic Lease Rent, Renewal Rent, or Termination Value, when due, and such
failure shall continue unremedied for five (5) Business Days; or

                  (b) the Facility Lessee shall fail to make any other
payment required to be made under any Operative Document (other than Excepted
Payments, unless the Owner Participant shall have declared a default with
respect thereto) when due, and such failure shall have continued unremedied
for 10 days after receipt by the Facility Lessee of written notice of such
failure from the Owner Participant, the Owner Lessor or, so long as the
Lessor Notes are outstanding and the Lien of the Lease Indenture has not been
discharged, the Security Agent; or

                  (c) the Facility Lessee shall fail to maintain insurance in
the amounts and

                                     37

<Page>

on the terms set forth in the Operative Documents, including SECTION 11
hereof; or

                  (d) the Facility Lessee shall fail to perform or observe in
all material respects (i) the covenant set forth in SECTIONS 6.1 and 5.13 of
the Participation Agreement, or (ii) if such failure is in respect of any
borrowed money, the covenant set forth in SECTION 6.3 of the Participation
Agreement; or

                  (e) the Facility Lessee shall fail to perform or observe
any other covenant set forth in the Participation Agreement, this Facility
Lease, any Project Document or in any other Operative Document (other than
any of the covenants referred to in clauses (a), (b), (c) and (d) of this
SECTION 16) , in any material respect and such failure shall continue
unremedied for 30 days after receipt by the Facility Lessee of written notice
thereof from the Owner Participant, Owner Lessor, or, so long as the Lessor
Notes are outstanding and the Lien of the Lease Indenture has not been
discharged, the Security Agent; PROVIDED, HOWEVER, that for any failure other
than a failure to comply with any covenant set forth in Article 6 of the
Participation Agreement if such failure cannot be remedied within such 30-day
period, then the period within which to remedy such failure shall be extended
up to an additional 180 days, so long as the Facility Lessee diligently
pursues such remedy and such failure is reasonably capable of being remedied
within such additional 180-day period; PROVIDED, FURTHER, that in the case of
the Facility Lessee's obligation set forth in clause (b) of SECTION 7.1, to
the extent and for so long as a test, challenge, appeal or proceeding to
review with respect to such non-compliance shall be prosecuted in good faith
by the Facility Lessee, the failure by the Facility Lessee to comply with the
requirements thereof shall not constitute a Lease Event of Default if such
test, challenge, appeal or proceeding shall not involve any (i) material risk
of foreclosure, sale, forfeiture or loss of, or imposition of a Lien (other
than a Permitted Encumbrance) on, the Facility, the Undivided Interest or the
Facility Site or the impairment of the use, operation or maintenance of the
Facility or the Facility Site in any material respect, (ii) risk of criminal
liability being incurred by the Owner Lessor, the Owner Participant or the OP
Guarantor, or (so long as the Lessor Notes are outstanding and the Lien of
the Lease Indenture has not been discharged) the Security Agent, the Lender
or the Bondholder Trustee or any of their respective Affiliates, or (iii)
material risk of any material adverse effect on the interests of the Owner
Lessor, the Owner Participant or the OP Guarantor, or (so long as the Lessor
Notes are outstanding and the Lien of the Lease Indenture has not been
discharged) the Security Agent or any of their respective Affiliates
(including, without limitation, subjecting any such Person to regulation as a
public utility under any Requirement of Law); and PROVIDED, FURTHER, also in
the case of the Facility Lessee's obligation set forth in clause (b) of
SECTION 7.1, if such noncompliance is not of a type that can be immediately
remedied, the failure to comply shall not be a Lease Event of Default if the
Facility Lessee is taking all reasonable action to remedy such noncompliance
and if, and only if, such noncompliance shall not involve any danger
described in clause (i), (ii) or (iii) of the preceding proviso; and
PROVIDED, FURTHER, such noncompliance, or such test, challenge, appeal or
proceeding to review with respect to such noncompliance shall not extend
beyond the date that is 36 months prior to the scheduled expiration of the
Basic Lease Term or any Renewal Lease Term then in effect or already
irrevocably elected by the Facility Lessee; or

                                      38

<Page>

                  (f) any representation or warranty of the Facility Lessee
set forth in the Operative Documents (other than a tax representation set
forth in the Tax Indemnity Agreement) shall prove to have been incorrect in
any material respect when made or misleading in any material respect when
made because the omission to state a material fact continues to be material
and the circumstances upon which such breach of representation or warranty is
based continue to be material and unremedied for a period of 30 days after
receipt by the Facility Lessee of written notice thereof from the Owner
Participant, Owner Lessor, or, so long as the Lessor Notes are outstanding
and the Lien of the Lease Indenture has not been discharged, the Security
Agent; PROVIDED, HOWEVER, that if such condition cannot be remedied within
such 30-day period, then the period within which to remedy such condition
shall be extended by up to an additional 60 days, so long as the Facility
Lessee diligently pursues such remedy, such condition is reasonably capable
of being remedied within such additional 60-day period; or

                  (g) the Facility Lessee, ME Westside, Chestnut Ridge,
Finance Co., Property Co. or EMHC shall (i) commence a voluntary case or
other proceeding seeking relief under Title 11 of the Bankruptcy Code or
liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect, or apply for or consent to the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, or (ii) consent to, or fail to controvert within 60 days,
any such relief or the appointment of or taking possession by any such
official in any voluntary case or other proceeding commenced against it, or
(iii) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, or (iv) make a general assignment for the
benefit of creditors; or

                  (h) an involuntary case or other proceeding shall be
commenced against the Facility Lessee, ME Westside, Chestnut Ridge, Finance
Co., Property Co. or EMHC seeking (i) liquidation, reorganization or other
relief with respect to it or its debts under Title 11 of the Bankruptcy Code
or any bankruptcy, insolvency or other similar law now or hereafter in
effect, or (ii) the appointment of a trustee, receiver, liquidator, custodian
or other similar official with respect to it or any substantial part of its
property or (iii) the winding-up or liquidation of such entity, and such
involuntary case or other proceeding shall remain undismissed and unstayed
for a period of 90 days; or

                  (i) default under any bond, debenture, note or other
evidence of Indebtedness (but excluding obligations arising under the
Operative Documents and non-recourse Indebtedness) for money borrowed by the
Facility Lessee under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness
of the Facility Lessee, whether such indebtedness now exists or shall
hereafter be created, which Indebtedness is in an aggregate principal amount
exceeding $5,000,000 at all other times and which default shall have resulted
in such Indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, without such
Indebtedness having been discharged, or such acceleration having been
rescinded or annulled; or

                  (j) any of the Security Documents to which the Facility
Lessee, Owner

                                    39

<Page>

Lessor, Owner Participant, the OP Guarantor or (so long as the Lessor Notes
are outstanding and the Lien of the Lease Indenture has not been discharged)
the Security Agent is a party are declared unenforceable, are terminated, or
cease to be in full force and effect; or

                  (k) any Reportable Event shall occur; (ii) there shall be
initiated any action by the Facility Lessee, the Facility Sublessee or any
member of the Controlled Group to terminate a Plan; (iii) there shall be
initiated proceedings by the PBGC under SECTION 4042 of ERISA to terminate a
Plan or to appoint a trustee to administer a Plan; (iv) any Plan shall incur
an "accumulated funding deficiency" (as defined in SECTION 412 of the Code or
SECTION 302 of ERISA), unless waived; (v) the imposition upon the Facility
Lessee, the Facility Sublessee or any member of the Controlled Group or any
Plan fiduciary of a material liability resulting from either the engagement
by any such party in a transaction prohibited under SECTION 4975 of the Code
or SECTION 406 of ERISA or any other violation of Title I of ERISA; (vi) the
Facility Lessee, the Facility Sublessee or any member of the Controlled Group
suffers a partial or complete withdrawal from a Multiemployer Plan, which,
with respect to clauses (i) through (vi) above, results in a liability,
individually or in the aggregate, of at least $5,000,000; or

                  (l) judgments or orders for the payment of money against
the Facility Lessee, which judgments or orders, as the case may be, are in
excess of $1,000,000 in the aggregate (taking into account any insurance
proceeds payable under a policy where the insurer has accepted coverage
without reservation) and which are not vacated, discharged or effectively
stayed or bonded within 60 days from the entry thereof; or

                  (m) except as permitted by Section 6.1 of the Participation
Agreement, EME shall, without the prior written consent of the Owner Lessor,
the Owner Participant and, so long as the Lessor Notes are outstanding and the
Lien of the Lease Indenture shall have been discharged or terminated, the
Lender or the Bondholder Trustee, cease to own directly or indirectly in excess
of 50% of the Ownership Interests in the Facility Lessee; provided, however,
that the consent of the Lender or Bondholder Trustee shall not be required if,
at such time either (i) the Fundco Bonds are rated at least BBB- by S&P, Baa3
by Moody's, and BBB- by Duff & Phelps, and a reaffirmation of such ratings is
obtained, or (ii) the reduction of EME's interest in the Facility Lessee has
been approved by holders of more than 66 2/3% of the holders of the Lessor
Notes; or

                  (n) any of the Facility Site Lease, the Facility Site
Sublease, or any other material Project Document shall have been cancelled or
terminated, or shall otherwise cease to be in full force and effect unless,
in any such case, alternative arrangements satisfactory to the Owner Lessor,
the Owner Participant and, so long as the Lessor Notes are outstanding and
the Lien of the Lease Indenture has not been released or discharged, the
Security Agent, the Lender and the Bondholder Trustee have been made and such
parties have so acknowledged in writing; or

                  (o) at any time, funds on deposit in any Account are used
by or at the direction of the Facility Lessee other than for the purposes
expressly specified in the Operative Documents; or

                  (p) the Amended and Restated Guarantee and Collateral
Agreement or the Pledge and Collateral Agreement, once executed and
delivered, shall for any reason, cease to be in full force and effect; or

                                    40

<Page>

                  (q) at any time, the Facility Lessee shall fail to remain
exempt from regulation under PUHCA or to remain exempt from regulation under
state utility law which would cause a Material Adverse Effect (or would
materially adversely affect any of the Lease Financing Parties); or

                  (r) any material Operative Document to the which the
Facility Lessee or any of its Affiliates is a party is declared unenforceable
against the Facility Lessee or any of its Affiliates, is terminated by the
Facility Lessee or any of its Affiliates, or ceases to be in full force and
effect in respect of the Facility Lessee or any of its Affiliates (in each
case, other than in accordance with their terms); or

                  (s) default under any of the Other Facility Leases.

SECTION 17        REMEDIES

         SECTION 17.1     REMEDIES FOR LEASE EVENT OF DEFAULT. Upon the
occurrence of any Lease Event of Default and at any time thereafter so long
as the same shall be continuing, the Owner Lessor may, at its option, declare
this Facility Lease to be in default by written notice to the Facility Lessee
(provided, that this Facility Lease shall automatically be in default without
the need for giving any notice upon the occurrence of a Lease Event of
Default in clause (g) or (h) of SECTION 16) in respect of the Facility
Lessee; and at any time thereafter, so long as the Facility Lessee shall not
have remedied all outstanding Lease Events of Default, the Owner Lessor may,
at the Facility Lessee's sole cost and expense, do one or more of the
following as the Owner Lessor in its sole discretion shall elect, to the
extent permitted by, and subject to compliance with any mandatory
Requirements of Law then in effect:

                  (a) proceed by appropriate court action or actions, either
at law or in equity, to enforce performance by the Facility Lessee of the
applicable covenants and terms of this Facility Lease or to recover damages
for breach thereof;

                  (b) by notice in writing to the Facility Lessee, terminate
this Facility Lease whereupon all right of the Facility Lessee to the
possession and use of the Undivided Interest under this Facility Lease shall
absolutely cease and terminate but the Facility Lessee shall remain liable as
hereinafter provided; and thereupon, the Owner Lessor may demand that the
Facility Lessee, and the Facility Lessee shall, upon written demand of the
Owner Lessor and at the Facility Lessee's sole cost and expense, forthwith
return possession of the Undivided Interest to the Owner Lessor in the manner
and condition required by, and otherwise in accordance with all of the
provisions of SECTION 5, except those provisions relating to periods of
notice; and the Owner Lessor may thenceforth hold, possess and enjoy the same
free from any right of the Facility Lessee, or its successor or assigns, to
use the Undivided Interest for any purpose whatever;

                  (c) sell the Owner Lessor's Interest at public or private
sale, as the Owner Lessor may determine, free and clear of any rights of the
Facility Lessee under this Facility Lease and without any duty to account to
the Facility Lessee with respect to such sale or for the proceeds thereof
(except to the extent required by paragraph (f) below if the Owner Lessor
elects to exercise its rights under said paragraph and by Requirements of
Law), in which event (i) Allocated Rent shall cease to accrue and (ii) the
Facility

                                 41

<Page>

Lessee's obligation to pay Basic Lease Rent or Renewal Rent hereunder due for
any periods subsequent to the date of such sale shall terminate (except to
the extent that Basic Lease Rent or Renewal Rent is to be included in
computations under paragraph (f) below if the Owner Lessor elects to exercise
its rights under said paragraph);

                  (d) hold, keep idle or lease to others the Owner Lessor's
Interest as the Owner Lessor in its sole discretion may determine, free and
clear of any rights of the Facility Lessee under this Facility Lease and
without any duty to account to the Facility Lessee with respect to such
action or inaction or for any proceeds with respect thereto, except that the
Facility Lessee's obligation to pay Basic Lease Rent or Renewal Rent with
respect to the Undivided Interest due for any periods subsequent to the date
upon which the Facility Lessee shall have been deprived of possession and use
of the Undivided Interest pursuant to this SECTION 17 shall be reduced by the
net proceeds, if any, received by the Owner Lessor from leasing the Undivided
Interest to any Person other than the Facility Lessee;

                  (e) whether or not the Owner Lessor shall have exercised, or
shall thereafter at any time exercise, any of its rights under paragraph (b)
above with respect to the Undivided Interest, the Owner Lessor, by written
notice to the Facility Lessee specifying a Termination Date that shall be not
earlier than 10 days after the date of such notice, may demand that the
Facility Lessee pay to the Owner Lessor, and the Facility Lessee shall pay to
the Owner Lessor, on the Termination Date specified in such notice any due and
unpaid, or accrued and unpaid, Basic Lease Rent or Renewal Rent due through the
Termination Date, any Supplemental Lease Rent due and payable as of the payment
date specified in such notice, plus as liquidated damages for loss of a bargain
and not as a penalty (in lieu of the Basic Lease Rent or Renewal Rent due after
the Termination Date specified in such notice), (i) an amount equal to the
excess, if any, of the Termination Value computed as of the Termination Date
specified in such notice over the Fair Market Sales Value of the Owner Lessor's
Interest as of the Termination Date specified in such notice; or (ii) an amount
equal to the excess, if any, of Termination Value computed as of the
Termination Date specified in such notice over the Fair Market Rental Value of
the Owner Lessor's Interest until the end of the Basic Lease Term or the then
current Renewal Lease Term, after discounting such Fair Market Rental Value
semi-annually to present value as of the Termination Date specified in such
notice at a rate equal to the Discount Rate; or (iii) an amount equal to the
Termination Value computed as of the Termination Date specified in such notice
provided that upon payment of such Termination Value by the Facility Lessee
pursuant to this clause (iii) and all other Rent then due and unpaid, or
accrued and unpaid by the Facility Lessee and the payment of the Lessee Section
467 Loan Balance as of the Termination Date, the Owner Lessor shall proceed to
exercise its commercially reasonable efforts promptly to sell the Undivided
Interest at public or private sale and shall pay over to the Facility Lessee
upon consummation of any such sale the net proceeds of such sale (after
deducting from such proceeds all costs and expenses incurred by the Owner
Lessor in connection therewith and all other amounts that may become payable to
the Owner Lessor, the Security Agent or any other Lease Financing Party) and
the Facility Lessee waives all claims against the Owner Lessor and the Owner
Participant in connection with the sale of the Undivided Interest or the use of
commercially reasonable efforts pursuant to this proviso; PROVIDED FURTHER that
in lieu of

                                    42

<Page>

paying an amount equal to the Termination Value pursuant to clause (iii) above,
the Facility Lessee may make a rejectable offer in writing to the Owner Lessor
(within 5 days following the Facility Lessee's receipt of notice by the Owner
Lessor specifying a Termination Date) (an "OFFER") to purchase the Undivided
Interest at a purchase price equal to or greater than Termination Value (the
"OFFER PRICE"). If the Owner Lessor rejects such Offer in writing, the Facility
Lessee shall remain liable to pay Termination Value pursuant to clause (iii)
above, all other Rent then due and unpaid, or accrued and unpaid, by the
Facility Lessee and the Lessee Section 467 Loan Balance provided that (1) the
Facility Lessee shall have no obligation to pay the costs and expenses incurred
by the Owner Lessor solely in connection with any sale of the Undivided
Interest and (2) the Owner Lessor shall proceed to exercise its best efforts
promptly to sell the Undivided Interest at public or private sale and shall pay
over to the Facility Lessee upon consummation of any such sale the proceeds of
such sale, but not to exceed the sum of Termination Value paid by the Facility
Lessee plus interest at the Applicable Rate from the Termination Date until the
date of payment of such proceeds to the Facility Lessee. If the Facility Lessee
has made an Offer and the Owner Lessor accepts such Offer or fails to respond
to such Offer within two (2) Business Days prior to the date on which the
Facility Lessee would have been required to pay Termination Value pursuant to
clause (iii) above, the Facility Lessee shall pay to the Owner Lessor the Offer
Price on or before the Termination Date and upon such payment of the Offer
Price and all other Rent then due and unpaid, or accrued and unpaid, by the
Facility Lessee and the Lessee Section 467 Loan Balance on the Termination
Date, the Facility Lessee shall no longer remain liable to pay Termination
Value or other amounts pursuant to clause (iii) above and the Owner Lessor
shall forthwith transfer to the Facility Lessee (or its designee) in accordance
with this SECTION 17.1(e) hereof and SECTION 6 of the Facility Site Lease on an
"as is," "where is" and "with all faults" basis, without representation or
warranty other than a warranty as to the absence of Owner Lessor Liens
accompanied by a warranty of the Owner Participant as to the absence of the
Owner Participant Liens, all of its interest in the Owner Lessor's Interest and
execute, acknowledge and deliver, and record and file (as appropriate),
appropriate releases, including a release from the Lien of the Lease Indenture,
and all other documents or instructions necessary or desirable to effect the
foregoing all in form and substance reasonably satisfactory to the Owner Lessor
and at the cost and expense of the Facility Lessee, and upon payment of such
amounts due under this paragraph (e), (x) Allocated Rent shall cease to accrue,
(y) this Facility Lease, and the Facility Lessee's obligation to pay Basic
Lease Rent or Renewal Lease Rent hereunder due for any periods subsequent to
the date of such payment shall terminate and (z) the Owner Lessor shall pay to
the Facility Lessee the Lessor Section 467 Loan Balance, if any, determined as
of such date. The obligation to make such payments shall be subject to the
provisions of SECTION 3.2(d); and

                  (f) if the Owner Lessor shall have sold the Owner Lessor's
Interest pursuant to paragraph (c) above, the Owner Lessor may, if it shall so
elect, demand that the Facility Lessee pay to the Owner Lessor, and the Facility
Lessee shall pay to the Owner Lessor, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of the Basic Lease Rent or Renewal Rent
due for any periods subsequent to the date of such sale), an amount equal to (i)
any unpaid Basic Lease Rent or Renewal Rent due and unpaid through the date of
such sale plus (ii) the Lessee Section 467 Loan Balance plus (iii) the amount,
if any, by which the Termination Value computed as of the Termination

                                  43

<Page>

Date next preceding the date of such sale or, if such sale occurs on a Rent
Payment Date or a Termination Date then computed as of such date, exceeds the
net proceeds of such sale, and, upon payment of such amount, this Facility
Lease and the Facility Lessee's obligation to pay Basic Lease Rent or Renewal
Rent for any periods subsequent to the date of such payment shall terminate,
Allocated Rent shall cease and the Owner Lessor shall pay to the Facility
Lessee the Lessor Section 467 Loan Balance, if any, determined as of such
date. The obligation to make such payments shall be subject to the provisions
of SECTION 3.2(d). In addition, the Facility Lessee shall be liable, except
as otherwise provided above, for (i) any and all unpaid Basic Lease Rent or
Renewal Rent due hereunder before, or during the exercise of any of the
foregoing remedies, and (ii) on an After-Tax Basis, for legal fees and other
costs and expenses incurred by reason of the occurrence of any Lease Event of
Default or the exercise of the Owner Lessor's remedies with respect thereto,
including the repayment in full of any costs and expenses necessary to be
expended in connection with the return of the Undivided Interest in
accordance with SECTION 5 hereof, including, without limitation, any costs
and expenses incurred by the Owner Lessor, the Owner Participant and the
Lease Indenture Trustee in connection with retaking constructive possession
of, or in repairing, the Undivided Interest in order to cause it to be in
compliance with all maintenance standards imposed by this Facility Lease.

         (g) upon the occurrence and during the continuance of a Rent Default
Event, the Owner Lessor may from time to time withdraw amounts from the
Equity Account pursuant to Section 7.1(g) of the Amended Security Deposit
Agreement and subject to the posting of an Equity Letter of Credit required
thereunder.

         SECTION 17.2     CUMULATIVE REMEDIES. The remedies in this Facility
Lease provided in favor of the Owner Lessor shall not be deemed exclusive,
but shall be cumulative and shall be in addition to all other remedies in the
Owner Lessor's favor existing at law or in equity; and the exercise or
beginning of exercise by the Owner Lessor of any one or more of such remedies
shall not preclude the simultaneous or later exercise by the Owner Lessor of
any or all of such other remedies. To the extent permitted by Requirements of
Law, the Facility Lessee hereby waives any rights now or hereafter conferred
by statute or otherwise which may require the Owner Lessor to sell, lease or
otherwise use the Undivided Interest or any Component in mitigation of Owner
Lessor's damages as set forth in this SECTION 17 or which may otherwise limit
or modify any of Owner Lessor's rights and remedies in this SECTION 17.

         SECTION 17.3     NO DELAY OR OMISSION TO BE CONSTRUED AS WAIVER. No
delay or omission to exercise any right, power or remedy accruing to the
Owner Lessor upon any breach or default by the Facility Lessee under this
Facility Lease shall impair any such right, power or remedy of the Owner
Lessor, nor shall any such delay or omission be construed as a waiver of any
breach or default, or of any similar breach or default hereafter occurring;
nor shall any waiver of a single breach or default be deemed a waiver of any
subsequent breach or default.

SECTION 18        SECURITY INTEREST AND INVESTMENT OF SECURITY FUNDS

                                  44

<Page>

                  Any moneys received by the Owner Lessor or the Security
Agent pursuant to SECTION 10.3, 10.5 OR 11.2 shall, until paid to the
Facility Lessee as provided in accordance with such Sections, be held by the
Owner Lessor or the Security Agent, as the case may be, as security for the
Facility Lessee's obligations under this Facility Lease and be invested in
Permitted Investments by the Owner Lessor or the Security Agent, as the case
may be, at the sole risk of the Facility Lessee, from time to time as
directed in writing by the Facility Lessee if such investments are reasonably
available for purchase. Any gain (including interest received) realized as
the result of any such Permitted Investment (net of any fees, commissions,
taxes and other expenses, if any, incurred in connection with such Permitted
Investment) shall be applied or remitted to the Facility Lessee in the same
manner as the principal invested.

SECTION 19        RIGHT TO SUBLEASE

         SECTION 19.1     SUBLEASE. The Facility Lessee shall have the right
to sublease the Undivided Interest without the consent of the Owner Lessor,
the Owner Participant or the Lease Indenture Trustee if:

                  (a) the sublessee is a United States Person within the
meaning of SECTION 7701(a)(30) of the Code that (i) is a solvent corporation,
partnership, business trust, limited liability company or other person or
entity not then subject to bankruptcy proceedings; and (ii) is not involved
in material pending or unresolved litigation with the Owner Participant or
any of its Affiliates; and (iii) is, or its operating, maintenance and use
obligations under the sublease are guaranteed by, or such obligations are
contracted to be performed by, an experienced operator of United States
based, coal-fired electric generating facilities similar to the Facility;

                  (b) The Owner Lessor, the Owner Participant, so long as the
Lessor Notes are outstanding, the Security Agent and the Bondholder Trustee
shall have received an opinion of counsel, which opinion of counsel shall be
reasonably acceptable to the recipients thereof, to the effect that all
material regulatory approvals required to enter into the sublease have been
obtained;

                  (c) the sublease does not extend beyond the scheduled
expiration of the Basic Lease Term or any Renewal Lease Term then in effect
or irrevocably elected by the Facility Lessee (and may be terminated upon
early termination of this Facility Lease) and is expressly subject and
subordinate to this Facility Lease;

                  (d) all terms and conditions of this Facility Lease and the
other Operative Documents and Project Documents remain in effect and the
Facility Lessee remains fully and primarily liable for its obligations under
this Facility Lease, the other Operative Documents and Project Documents;

                  (e) no Lease Default or Lease Event of Default shall have
occurred and be continuing or be created as a result of such sublease;

                  (f) the sublease prohibits further assignment or subletting;

                                       45

<Page>

                  (g) the sublease requires the sublessee to operate and
maintain the Undivided Interest (or to cause the Undivided Interest to be
operated and maintained) in a manner consistent with this Facility Lease;

                  (h) the sublease does not cause the Facility to become
"tax-exempt use property" within the meaning of SECTION 168(h) of the Code
(unless the Facility Lessee shall make a payment to the Owner Participant
contemporaneously with the execution of the sublease that, in the reasonable
judgment of the Owner Participant, compensates the Owner Participant for the
adverse tax consequences resulting from the classification of the Facility as
"tax-exempt use property");

                  (i) Neither the sublease nor the sublessee shall jeopardize
the Owner Lessor's, the Owner Participant's and the Lender or Bondholder
Trustee's or the Security Agent's exemption from regulation under PUHCA and
other laws relating to electric utilities, generators, wholesalers or retailers;
and

                  (j) the Facility sublessee shall pay all reasonable documented
out-of-pocket expenses incurred by the other Lease Financing Parties in
connection with such sublease.

                  As a condition precedent to such sublease, the Facility Lessee
shall provide the Owner Lessor, the Owner Participant and, so long as the Lessor
Notes are outstanding and the Lien of the Lease Indenture shall not have been
terminated or discharged, the Security Agent with all documentation in respect
of such sublease and an opinion of counsel to the effect that such sublease
complies with the provisions of this SECTION 19 (such documentation, counsel and
opinion to be reasonably satisfactory to each such recipient).

SECTION 20        OWNER LESSOR'S RIGHT TO PERFORM

                  If the Facility Lessee fails to make any payment required to
be made by it hereunder or fails to perform or comply with any of its other
agreements contained herein after notice to the Facility Lessee and failure of
the Facility Lessee to so perform or comply within 10 Business Days thereafter,
the Owner Lessor or the Owner Participant may itself make such payment or
perform or comply with such agreement in a reasonable manner, but shall not be
obligated hereunder to do so, and the amount of such payment and of the
reasonable expenses of the Owner Lessor, the Owner Participant or the OP
Guarantor incurred in connection with such payment or the performance of or
compliance with such agreement, as the case may be, together with interest
thereon at the Overdue Rate, to the extent permitted by the Requirements of Law
shall be deemed to be Supplemental Lease Rent, payable by the Facility Lessee to
the Owner Lessor on demand. Notwithstanding anything to the contrary contained
in the foregoing, the provisions of this SECTION 20 shall in no event restrict
any of the Owner Lessor's rights following the occurrence of a Lease Event of
Default, it being agreed and understood that, subject to SECTION 7.3 of the
Participation Agreement, the Owner Lessor shall be entitled to exercise all of
its remedies pursuant to SECTION 17 upon the occurrence of any such event.

                                      46
<Page>

SECTION 21        SECURITY FOR OWNER LESSOR'S OBLIGATION TO THE LEASE INDENTURE
TRUSTEE

                  In order to secure the Lessor Notes, the Owner Lessor will
assign and grant a first priority security interest in favor of the Lease
Indenture Trustee in and to all of the Owner Lessor's right, title and interest
in, to and under this Facility Lease, and the Undivided Interest (other than
Excepted Payments and the rights to enforce and collect the same). The Facility
Lessee hereby consents to such assignment and to the creation of such Lien and
security interest and acknowledges receipt of copies of the Lease Indenture, it
being understood that such consent shall not affect any requirement or the
absence of any requirement for any consent of the Facility Lessee under any
other circumstances. Unless and until the Facility Lessee shall have received
written notice from the Lease Indenture Trustee that the Lien of the Lease
Indenture has been fully discharged, the Lease Indenture Trustee shall have the
right to exercise the rights of the Owner Lessor under this Facility Lease
(other than Excepted Payments and the rights to enforce and collect the same) to
the extent set forth in and subject in each case to the exceptions set forth in
the Lease Indenture. TO THE EXTENT, IF ANY, THAT THIS FACILITY LEASE CONSTITUTES
CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN
EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS FACILITY
LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART
HEREOF OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE
COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE LEASE INDENTURE
TRUSTEE ON THE SIGNATURE PAGE THEREOF.

SECTION 22        MISCELLANEOUS

         SECTION 22.1      AMENDMENTS AND WAIVERS. No term, covenant,
agreement or condition of this Facility Lease may be terminated, amended or
compliance therewith waived (either generally or in a particular instance,
retroactively or prospectively) except by an instrument or instruments in
writing executed by each party hereto.

         SECTION 22.2      NOTICES. Unless otherwise expressly specified or
permitted by the terms hereof, all communications and notices provided for
herein to a party hereto shall be in writing or shall be produced by a
telecommunications device capable of creating a written record, and any such
notice shall become effective (a) upon personal delivery thereof, including,
without limitation, by overnight mail or courier service, (b) in the case of
notice by United States mail, certified or registered, postage prepaid,
return receipt requested, upon receipt thereof, or (c) in the case of notice
by such a telecommunications device, upon transmission thereof, provided such
transmission is promptly confirmed by either of the methods set forth in
clauses (a) or (b) above, in each case addressed to such party and any copy
party at its address set forth below or at such other address as such party
or copy party may from time to time designate by written notice to the other
party:

                  If to the Owner Lessor:

                                      47
<Page>

                  with a copy to the Owner Participant:

                  and to the Lease Indenture Trustee:

                  with a copy to:

                  If to the Facility Lessee:

                  Homer City

                  with a copy to:

                  Edison Mission Energy
                  18101 Von Karman Avenue
                  Suite 1700
                  Irvine, CA  92612
                  Telephone No.:  (949)
                  Facsimile No.:  (949)
                  Attention:  President, with a copy to General Counsel

         SECTION 22.3      SURVIVAL. Except for the provisions of SECTIONS
[3.3, 3.5, 5, 9 AND 17], which shall survive, the warranties and covenants
made by each party hereto shall not survive the expiration or termination of
this Facility Lease in accordance with its terms. Notwithstanding any
provisions hereof, any indemnity contained in Sections 10.1 and 10.2 of the
Participation Agreement or elsewhere in the Operative Documents shall,
subject to the provisions thereof, survive the expiration or early
termination of this Facility Lease regardless of the cause therefor.

         SECTION 22.4      SUCCESSORS AND ASSIGNS

                  (a) This Facility Lease shall be binding upon and shall
inure to the benefit of, and shall be enforceable by, the parties hereto and
their respective successors and assigns as permitted by and in accordance
with the terms hereof.

                  (b) Except as expressly provided in SECTION 22.4(c), the
Facility Lessee may not assign this Facility Lease or any other Operative
Document or Project Document, or any interest therein, without the prior written
consent of the Owner Lessor.

                  (c) The Facility Lessee may, upon satisfaction of the
conditions set forth herein and in SECTION 22.4(d), without the consent of the
Owner Lessor or the Owner Participant, so long as none of the Owner Lessor, the
Owner Participant and the OP Guarantor becomes subject to regulation as a
"public utility," a "public utility company," a "holding company," a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding company" within
the meaning of the Federal Power Act or PUHCA as a

                                      48
<Page>

result of such assignment, assign this Facility Lease and the corresponding
Operative Documents to any person or entity. In the case of an assignment,
upon the transferee's assumption of the Facility Lessee's obligations under
this Facility Lease and the other Operative Documents in accordance with the
terms of this SECTION 22.4(c) and SECTION 22.4(d), the Facility Lessee shall
have no further liability or obligation thereunder, except any liability and
obligation relating to the period prior to such assignment.

                  (d) Any assignment by the Facility Lessee pursuant to SECTION
22.4(B) shall be subject to satisfaction of the following additional conditions:

                                    (1) the transferee (or a party which
                           guarantees such transferee's obligations under the
                           Operative Documents assigned to such entity): (i)
                           shall have a credit rating equal to, or greater than,
                           BBB- by S&P and Baa3 by Moody's and (ii) shall be
                           substantially engaged in the wholesale power
                           generating business;

                                    (2) such transfer occurs subsequent to the
                           seventh year of the Lease Term;

                                    (3) the Owner Lessor and the Owner
                           Participant (and, so long as the Lessor Notes are
                           outstanding and the Lien of the Lease Indenture has
                           not been discharged, the Security Agent) shall have
                           received an opinion of counsel, which opinion of
                           counsel shall be reasonably satisfactory to each
                           recipient thereof, to the effect that all regulatory
                           approvals required in connection with such transfer
                           or necessary to assume the Facility Lessee's
                           obligations under the Operative Documents shall have
                           been obtained and such transfer shall not subject the
                           Facility Lessee, the Owner Lessor or the Owner
                           Participant to regulation under PUHCA or state laws
                           and regulations regarding the rate and financial or
                           organizational regulation of electric utilities;

                                    (4) such transfer shall be pursuant to an
                           assignment and assumption agreement in form and
                           substance reasonably satisfactory to the Owner
                           Participant (and, so long as the Lessor Notes are
                           outstanding and the Lien of the Lease Indenture has
                           not been discharged, the Security Agent);

                                    (5) the Owner Lessor and the Owner
                           Participant (and, so long as the Lessor Notes are
                           outstanding and the Lien of the Lease Indenture has
                           not been discharged, the Security Agent and the Pass
                           Through Trustee) shall have received an opinion of
                           counsel, which opinion of counsel shall be reasonably
                           satisfactory to each recipient thereof, in respect of
                           such assignment and assumption;

                                      49
<Page>

                                    (6) the Owner Participant shall have
                           received (x) an opinion reasonably satisfactory to it
                           from Owner Participant's Counsel to the effect that
                           such transfer should not result in any incremental
                           risk of material adverse federal income tax
                           consequences to the Owner Participant or (y) an
                           indemnity against such risk in form and in substance
                           reasonably satisfactory to the Owner Participant;

                                    (7) no Lease Event of Default shall have
                           occurred and be continuing, or shall be created by
                           such transfer;

                                    (8) such transfer by the Facility Lessee
                           shall not result in a Regulatory Event of Loss;

                                    (9) the transferee shall not be involved in
                           material litigation with the Owner Participant or
                           any of its Affiliates;

                                    (10) the Facility Lessee shall pay on an
                           After-Tax Basis all reasonable documented
                           out-of-pocket expenses incurred by the Owner Lessor
                           and the Owner Participant, the Lease Indenture
                           Trustee and the Pass Through Trustees, in connection
                           with such assignment;

                                    (11) concurrently with such transfer, the
                           Facility Lessee assigns to the transferee each Other
                           Facility Lease and, in each such case, the
                           corresponding Operative Documents;

                                    (12) each of the Rating Agencies shall have
                           confirmed the then existing long term secured debt
                           credit rating of the Lender and the Bondholder
                           Trustee; and

                                    (13) unless the Facility Lessee has elected
                           to provide to the Lease Indenture Trustee an
                           indemnity against the risk that such assignment will
                           cause a Tax Event to occur to any direct or indirect
                           holder of any Lessor Note, the Lease Indenture
                           Trustee shall have received an opinion of counsel to
                           the Facility Lessee (with customary qualifications
                           and limitations and otherwise reasonably satisfactory
                           to the Lease Indenture Trustee), addressed to the
                           Lease Indenture Trustee, the Lender and the
                           Bondholder Trustee, to the effect that such
                           assignment shall not cause a Tax Event to occur to
                           any direct or indirect holder of any Lessor Note.

         SECTION 22.5      TRUE LEASE; SEPARATE LEGAL OBLIGATIONS. This
Facility Lease shall constitute an agreement of lease and nothing herein
shall be construed as conveying to the Facility Lessee any right, title or
interest in or to the Undivided Interest except as lessee only. The parties
hereto hereby agree that the Facility Lessee's obligation to make Excepted
Payments is a separate and independent obligation from its obligation to make
other Rent payments, and that the Facility Lessee's obligation to make
Excepted

                                      50
<Page>

Payments may be assigned, pledged or otherwise transferred separately from
the Facility Lessee's obligations to make other Rent payments. The obligation
to make Excepted Payments has been included herein for the convenience of the
parties.

         SECTION 22.6      GOVERNING LAW. This Facility Lease was negotiated
in the State of New York which the Facility Lessee and the Owner Lessor agree
has a substantial relationship to the parties and to the underlying
transaction embodied hereby, and, in accordance with ss. 5-1401 of the New
York General Obligations Law, in all respects, including matters of
construction, validity and performance, this Facility Lease shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts made and performed in such State and any Requirement
of Law of the United States of America, except provisions for the creation
and enforcement of the leasehold interest created hereby shall be governed by
and construed according to the law of the state in which the Facility is
located, it being understood that, to the fullest extent permitted by the law
of the state in which the Facility is located, the law of the State of New
York shall govern the validity and the enforceability of the representations,
warranties, covenants and obligations of the Facility Lessee and the Owner
Lessor under this Facility Lease and all other Operative Documents and all of
the indebtedness arising hereunder or thereunder. To the fullest extent
permitted by law, the Facility Lessee and the Owner Lessor hereby
unconditionally and irrevocably waive any claim to assert that the law of any
other jurisdiction governs this Facility Lease, except as expressly otherwise
provided above.

         SECTION 22.7      SEVERABILITY. Any provision of this Facility Lease
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

         SECTION 22.8      COUNTERPARTS. This Facility Lease may be executed
by the parties hereto in separate counterparts, each of which, subject to
SECTION 21, when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.

         SECTION 22.9      HEADINGS AND TABLE OF CONTENTS. The headings of
the sections of this Facility Lease and the table of contents are inserted
for purposes of convenience only and shall not be construed to affect the
meaning or construction of any of the provisions hereof.

         SECTION 22.10     FURTHER ASSURANCES. Each party hereto will
promptly and duly execute and deliver such further documents and assurances
for and take such further action reasonably requested by the other party, all
as may be reasonably necessary to carry out more effectively the intent and
purpose of this Facility Lease.

         SECTION 22.11     EFFECTIVENESS. This Facility Lease has been dated
as of the date first above written for convenience only. This Facility Lease
shall be effective on the date of execution and delivery by the Facility
Lessee and the Owner Lessor.

                                      51
<Page>

         SECTION 22.12     LIMITATION OF LIABILITY. It is expressly
understood and agreed by the parties hereto that (a) this Facility Lease is
executed and delivered by the Trust Company, not individually or personally
but solely as manager of the Owner Lessor under the Owner Lessor LLC
Agreement, in the exercise of the powers and authority conferred and vested
in it pursuant thereto, (b) each of the representations, undertakings and
agreements herein made on the part of the Owner Lessor is made and intended
not as personal a representation, undertaking and agreement by the Trust
Company but is made and intended for the purpose for binding only the Owner
Lessor, (c) nothing herein contained shall be construed as creating any
liability on the Trust Company individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if
any, being expressly waived by the parties hereto or by any Person claiming
by, through or under the parties hereto and (d) under no circumstances shall
the Trust Company be personally liable for the payment of any indebtedness or
expenses of the Owner Lessor or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Owner Lessor under this Facility Lease.

         SECTION 22.13     MEASURING LIFE. If and to the extent that any of
the rights and privileges granted under this Facility Lease, would, in the
absence of the limitation imposed by this sentence, be invalid or
unenforceable as being in violation of the rule against perpetuities or any
other rule or law relating to the vesting of interests in property or the
suspension of the power of alienation of property, then it is agreed that
notwithstanding any other provision of this Facility Lease, such options,
rights and privileges, subject to the respective conditions hereof governing
the exercise of such options, rights and privileges, will be exercisable only
during (a) the longer of (i) a period which will end twenty-one (21) years
after the death of the last survivor of the descendants living on the date of
the execution of this Facility Lease of the following Presidents of the
United States: Franklin D. Roosevelt, Harry S. Truman, Dwight D. Eisenhower,
John F. Kennedy, Lyndon B. Johnson, Richard M. Nixon, Gerald R. Ford, James
E. Carter, Ronald W. Reagan, George H.W. Bush, William J. Clinton and George
W. Bush or (ii) the period provided under the Uniform Statutory Rule Against
Perpetuities or (b) the specific applicable period of time expressed in this
Facility Lease, whichever of (a) and (b) is shorter.

                                      52
<Page>

         IN WITNESS WHEREOF, the Owner Lessor and the Facility Lessee have
caused this Facility Lease to be duly executed and delivered under seal by
their respective officers thereunto duly authorized.

                                  HOMER CITY OL1 LLC

                                  By:

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

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

<Page>

                                    EXHIBIT A

                                TO FACILITY LEASE

                          DESCRIPTION OF FACILITY SITE

                                      A-1
<Page>

                                    EXHIBIT B

                                TO FACILITY LEASE

                             DESCRIPTION OF FACILITY

                                      B-1
<Page>
                                  SCHEDULE 1-1

                                TO FACILITY LEASE

                                BASIC LEASE RENT

<Table>
<Caption>
                                      COLUMN (A)                COLUMN (B)
                                    COMPONENT A OF            COMPONENT B OF
     RENT PAYMENT DATE             BASIC LEASE RENT          BASIC LEASE RENT
     -----------------             ----------------          ----------------
<S>                                <C>                       <C>

</Table>

                                  Schedule 1-1-1

<Page>

                                  SCHEDULE 1-2

                                       TO

                                 FACILITY LEASE

                        ALLOCATION OF PERIODIC LEASE RENT

<Table>
<Caption>
           RENTAL PERIOD ENDING ON    ALLOCATED RENT      SECTION 467 LOAN
           -----------------------    --------------      ----------------
                                                          (LAST DAY OF TERM)
                                                          ------------------
<S>                                   <C>                 <C>

</Table>

                                 Schedule 1-2-2

<Page>

                                  SCHEDULE 1-3

                                       TO

                                 FACILITY LEASE

                   PROPORTIONAL RENT AND SECTION 467 INTEREST

<Table>
<Caption>
                      RENTAL PERIOD
   RENTAL PERIOD     ENDING ON (BUT                        LESSOR SECTION    LESSEE SECTION
   BEGINNING ON      NOT INCLUDING)   PROPORTIONAL RENT     467 INTEREST      467 INTEREST
   ------------      --------------   -----------------     ------------      ------------
<S>                  <C>              <C>                   <C>               <C>

</Table>

                                 Schedule 1-3-1

<Page>

                                   SCHEDULE 2

                                       TO

                                 FACILITY LEASE

                               TERMINATION VALUES
                               -------------------

                                  Schedule 2-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00029-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00029-of-00352.parquet"}]]