Document:

SCHEDULING AND ASSET OPTIMIZATION SERVICES AGREEMENT

                                     BETWEEN

                                PPM ENERGY, INC.

                                 on the one hand

                                       AND

                          MMC ENERGY NORTH AMERICA LLC
                               MMC CHULA VISTA LLC
                                MMC ESCONDIDO LLC

                                on the other hand

                               Dated June 7, 2006

<PAGE>

              SCHEDULING AND ASSET OPTIMIZATION SERVICES AGREEMENT

      THIS   SCHEDULING  AND  ASSET   OPTIMIZATION   SERVICES   AGREEMENT  (this
"Agreement"),  entered into this 7th day of June,  2006,  is between PPM Energy,
Inc.,  an Oregon  corporation  ("PPM")  on the one hand,  and MMC  Energy  North
America LLC, a Delaware limited liability company ("MMCN"), MMC Chula Vista LLC,
a Delaware limited liability company ("MMCC"), and MMC Escondido LLC, a Delaware
limited liability company ("MMCE"; each and all of MMCN, MMCC and MMCE intending
to be fully and  independently,  and jointly and severally,  liable for each and
all of the obligations of each and all of MMCN, MMCC and MMCE, and  collectively
herein referred to as "MMC"; each reference to MMC means and includes any one or
more of MMCN,  MMCC, or MMCE as  applicable)  on the other hand. MMC and PPM are
sometimes hereinafter referred to collectively as the "Parties" and individually
as a "Party."

      WHEREAS, PPM is in the business of energy and gas marketing,  and provides
services  to  optimize  the  fuel  use  and  dispatch  of  electric   generating
facilities; and

      WHEREAS,   MMC  wishes  to  hire  PPM  to  perform  scheduling  and  asset
optimization services for the Chula Vista Facility and Escondido Facility;

      NOW,  THEREFORE,  in  consideration of the mutual covenants and agreements
set forth below and for other good and valuable  consideration,  the receipt and
sufficiency  of which are hereby  acknowledged,  the Parties  mutually  agree as
follows:

                                   SECTION 1
                      DEFINITIONS; RULES OF INTERPRETATION

      1.1 Defined Terms.  Unless otherwise  required by the context in which any
term appears,  initially  capitalized terms used herein shall have the following
meanings:

      "AAA" is defined in Section 21.2.

      "Affiliate"  means, with respect to any entity,  each entity that directly
or indirectly controls,  is controlled by, or is under common control with, such
designated entity. For purposes of this definition,  "control" (including,  with
correlative  meanings,  the terms  "controlled  by" and  "under  common  control
with"), as used with respect to any entity, shall mean the possession,  directly
or  indirectly,  of the power to direct or cause the direction of the management
and policies of such entity,  whether through the ownership of voting securities
or by contract or otherwise.

      "Applicable Pricing Date" is defined in Section 10.1.

      "Budgeted Expectations" is defined in Section 6.1.

      "Budgets" is defined in Section 6.1.

      "CAISO" means the California Independent System Operator Corporation.

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***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

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      "CAISO Protocols" means all present and future protocols as in effect from
time to time under the authority of the CAISO.

      "CAISO  Tariff"  means all present and future  protocols as in effect from
time to time under the authority of the CAISO.

      "CEC" means the California Energy Commission.

      "Chula  Vista  Facility"  is an  approximately  35 MW  gas-fired  electric
generating facility owned by MMCC located in Chula Vista, California.

      "Commercial  Operation" means for each Facility that the Facility is fully
operational  and reliable and is fully  interconnected,  fully  integrated,  and
synchronized  with, and lawfully  permitted to deliver  wholesale energy to, the
System.  MMC and PPM shall agree as to when MMC  believes  that the Facility has
achieved Commercial Operation,  anticipated to be June 1, 2006. In order to meet
the  requirements  for Commercial  Operation,  all of the following events shall
have occurred and remain true and accurate: (1) Start-Up Testing of the Facility
shall have been  completed;  (2) MMC has  obtained or entered  into all Required
Facility  Documents  except where the failure to obtain or enter into a Required
Facility Document would not result in a Material Adverse Effect and provided PPM
copies of any or all of the Material Facility Documents to the extent reasonably
requested by PPM;  and (3) the Facility is staffed 24 hours a day,  seven days a
week,  or  with  remote  start   capability   and  otherwise  able  to  dispatch
instantaneously  to  precision  Net Output and  dispatch  schedules  as provided
herein.

      "Commercial  Operation Date" means the date that  Commercial  Operation is
achieved.

      "Confidential Business Information" is defined in Section 20.1.

      "Contract  Interest  Rate" means the lesser of the highest rate  permitted
under applicable law or 200 basis points per annum plus the rate per annum equal
to the publicly  announced prime rate or reference rate for commercial  loans to
large  businesses  in effect  from time to time quoted by  Citibank,  N.A as its
"prime rate".  If a Citibank,  N.A. prime rate is not available,  the applicable
prime rate shall be the announced  prime rate or reference  rate for  commercial
loans in effect  from time to time  quoted by a bank with $10 billion or more in
assets in New York City,  N.Y.,  selected by the Party to whom interest is being
paid.

      "CPUC" means the California Public Utilities Commission

      "Delivery  Point"  means for the Chula  Vista  Facility,  Otay  Substation
Radial Tie Line TL6929 and for the Escondido Facility, Radial Tie Line 6933.

      "Derating" means a reduction in Facility capacity or generating capability
for any cause,  including ambient air temperature,  relative humidity,  Btu heat
content of fuel,  gas pipeline  pressure,  shaft or other  component  vibration,
excessive bearing temperatures, or combustion tuning..

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***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

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      "EEI  Agreement"  means those certain  Edison  Electric  Institute  Master
Agreements  for the  Purchase  & Sale of Energy,  with  credit  support  and gas
annexes,  entered  into by and  between PPM on the one hand and MMCC and MMCE on
the other hand, dated May 8, 2006.

      "Effective Date" is defined in Section 2.1.

      "Electric System Authority" means each of NERC, CAISO, WECC, a regional or
sub-regional reliability council, and any other similar council, organization or
body of  recognized  standing  with  respect to the  operations  of the electric
system in the WECC region or part thereof.

      "Energy Costs" is defined in Section 6.1.  "Energy  Revenue" is defined in
Section 6.4.

      "Escondido   Facility"  is  an  approximately  35  MW  gas-fired  electric
generating facility owned by MMCE located in Escondido, CA.

      "EWG" means an "exempt wholesale generator" as defined under PUHCA.

      "Facility"  means the Chula Vista Facility or the Escondido  Facility,  or
both, as applicable.

      "FERC" means the Federal Energy Regulatory Commission.

      "FERC 203  Application"  means an application to FERC of MMC under Section
203 of the  Federal  Power Act for  Authorization  to Dispose of  Jurisdictional
Facilities.

      "FERC 205 Notice" means a "Notice of Change in Status" to be filed at FERC
by PPM and its subsidiaries with market-rate  authorization under Section 205 of
the Federal Power Act referencing PPM's entering into this Agreement.

      "FIN 46" is defined in Section 12.11.

      "Force  Majeure"  means an event of Force Majeure as defined and described
in Section 18.1.

      "Forced  Outage"  means  NERC  Event  Types U1, U2 and U3, as set forth in
attached Exhibit N, and specifically  excludes any Maintenance Outage or Planned
Outage.

      "Fuel  Price"  means the price of gas as  calculated  pursuant  to Section
10.1.

      "Gas Day" means a period of 24 consecutive hours, coextensive with a "day"
as defined by the SoCalGas or SDG&E, as applicable.

      "Gas Daily Midpoint Price" is defined in Section 10.1.

      "General  Order 167" means CPUC General Order No. 167 for the  Enforcement
of  Maintenance  and  Operation  Standards  for Electric  Generating  Facilities
effective September 2, 2005, as the same may be in effect from time to time.

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***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      "Generation  Interconnection  Agreement" means the agreement  entered into
between  MMC and  Interconnection  Provider  for  each  Facility  regarding  the
Interconnection Facilities.

      "GMC" is defined in Section 8.1.1.

      "Governmental Authority" means any supranational,  federal, state or other
political  subdivision  thereof,  having  jurisdiction  over  MMC,  PPM or  this
Agreement,   including   any   municipality,   township   or  county,   and  any
quasi-municipal agency or district or other entity or body exercising executive,
legislative,  judicial,  regulatory or administrative functions of or pertaining
to government,  including any corporation or other entity owned or controlled by
any of the foregoing.

      "Interconnection  Facilities"  means the  facilities  installed,  or to be
installed,  for the  purpose of  interconnecting  the  Facility  to the  System,
including electrical  transmission lines, upgrades,  transformers and associated
equipment, substations, relay and switching equipment, and safety equipment.

      "Interconnection  Provider" means SDG&E for the Chula Vista Facility,  and
SDG&E for the Escondido Facility.

      "Letter of Credit" means an irrevocable standby letter of credit in a form
reasonably acceptable to PPM, naming PPM as the party entitled to demand payment
and present draw requests  thereunder,  which letter(s) of credit: (1) is issued
by a  Qualifying  Institution;  (2) by its terms,  permits PPM to draw up to the
face amount  thereof for the purpose of paying any and all amounts  owing by MMC
hereunder;  (3) if issued by a foreign bank with a U.S.  branch,  permits PPM to
draw upon the U.S.  branch;  (4) permits PPM to draw the entire amount available
thereunder  if such  letter of credit is not  renewed  or  replaced  at least 30
business days prior to its stated  expiration  date; and (5) permits PPM to draw
the entire  amount  available  thereunder  if such  letter(s)  of credit are not
increased, replaced or replenished as and when required herein.

      "Liquidated Damages" is defined in Section 9.1.

      "Local  Transportation  Shrinkage" means the Pipeline Shrinkage applicable
to the SoCalGas or the SDG&E gas pipeline system, as applicable, used to deliver
gas from the SoCal Border to the applicable Facility, expressed in MMBtu.

      "Maintenance  Outage"  means NERC Event Type MO, as set forth in  attached
Exhibit  N, and  includes  any Outage  that is not a Forced  Outage or a Planned
Outage.

      "Market-Place  Dispatchable"  means for each  Facility  the period of time
during which it is operated and operational for market-driven  dispatch,  rather
than operational dispatch,  and shall exclude periods during which a Facility is
not in Commercial Operation, is being tested or fine-tuned, has an Outage, or is
otherwise  unavailable  or only  available for  operationally  driven  dispatch,
rather than market-driven dispatch.

      "Material  Adverse  Effect" means any event or condition that (A) actually
has, or is reasonably likely to have, a significant  adverse effect on (i) MMC's
ability to own, control or operate a Facility, (ii) PPM's rights to dispatch the
Facility, (iii) a Party's required rights from third parties, or other necessary
abilities to perform its  obligations  hereunder,  (iv) a Facility's  ability to
operate,  generate  and deliver  Power  Products  to the Point of  Delivery  for
transmission  away  from the  Point of  Delivery,  (v) a  Facility's  rights  to
transmit Power Products to or through the CAISO, (vi) the business,  operations,
properties assets,  prospects or condition  (financial or otherwise) of a Party,
(B) ***.

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***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      "Material   Facility  Document"  means  those  documents,   permits,   and
authorizations specified on Exhibit M.

      "Mediation Notice" is defined in Section 21.2(a).

      "Mediation Procedures" is defined in Section 21.2.

      "MMC" is defined in the Recitals.

      "MMCC" is defined in the Recitals.

      "MMCE" is defined in the Recitals.

      "MMCN" is defined in the Recitals.

      "Monthly Fee" means $*** per month.

      "MW" means megawatt.

      "MWh"  means  megawatt  hour.  "NERC"  means the North  American  Electric
Reliability Council.

      "Net Energy Revenue" is defined in Section 6.4.

      "Net Output" means all Output delivered at the Delivery Point.

      "Operational Flow  Order/Emergency  Flow Order Day" or "OFO/EFO" means the
Gas Day(s)  declared by SoCal and or SDG&E as an OFO/EFO Gas Day pursuant to the
respective tariff.

      "Outage" means a Forced Outage, Maintenance Outage or Planned Outage.

      "Output" means all energy and electricity produced by a Facility.

      "Pacific  Prevailing Time" or "PPT" means Pacific Standard Time or Pacific
Daylight Time, as applicable on the day in question.

      "Party" and "Parties" are defined in the Recitals.

      "PPM" is defined in the Recitals.

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***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      "Permits"  means all of the permits,  licenses,  approvals,  certificates,
entitlements and other  authorizations  issued by, and notices and registrations
submitted to, Governmental  Authorities required for the ownership and operation
of the Facility and  occupancy of the  Premises,  including  those  specified in
Exhibit  3.2.9,  and  all  amendments,   modifications,   supplements,   general
conditions and addenda thereto.

      "Pipeline  Shrinkage"  means the  quantity of gas that  SoCalGas or SDG&E,
pursuant   to   their   applicable   tariffs,   recover   in-kind   from   their
customers/shippers to offset gas used in their system operations.

      "Pipeline  Fixed Cost" means any fixed  costs,  fees,  taxes or  penalties
specified in SoCalGas or SDG&E  tariffs  applicable  to the delivery of gas to a
Facility.

      "Pipeline  Variable  Cost"  means  any  variable  costs,  fees,  taxes  or
penalties  specified in SoCalGas or SDG&E tariffs  applicable to the delivery of
gas to a Facility, including Pipeline Shrinkage.

      "Planned  Outage"  means  NERC  Event  Type PO, as set  forth in  attached
Exhibit N, and specifically excludes any Maintenance Outage or Forced Outage.

      "Power Products" ***.

      "Premises"  means the real  property  on which the  Facility is or will be
located.

      "Protocols" are set forth in Exhibit P.

      "Prudent  Electrical  Practices"  means any of the practices,  methods and
acts engaged in or approved by a significant  portion of the electrical  utility
industry or any of the  practices,  methods or acts,  which,  in the exercise of
reasonable  judgment  in the light of the facts  known at the time a decision is
made,  could have been expected to accomplish  the desired  result at the lowest
reasonable  cost  consistent with  reliability,  safety and expedition.  Prudent
Electrical  Practices  is not  intended to be limited to the  optimum  practice,
method or act to the  exclusion  of all  others,  but rather to be a spectrum of
possible practices, methods or acts.

      "PUHCA" means the Public Utility  Holding  Company Act of 1935, as amended
from time to time and, in the case of full or partial repeal, successor laws and
regulations,   including   those   governing   generation  or   transmission  of
electricity.

      "Qualifying   Institution"  means  a  commercial  bank  or  trust  company
organized  under  the  laws of the  United  States  or a  political  subdivision
thereof,  or a United States  branch of a foreign  bank,  with a net worth of at
least $500,000,000 and a credit rating on its long-term senior unsecured debt of
at least "A" by Standard & Poor's Ratings Services or "A2" by Moody's  Investors
Service, Inc.

      "Resource  Adequacy   Requirements"   means  requirements   applicable  to
California generating facilities generally pursuant to those California laws and
regulations  promulgated with the stated intent to ensure that adequate physical
generating  capacity  dedicated  to serving all load  requirements  to meet peak
demand and planning and operating  reserves,  at or deliverable to locations and
at  times as may be  necessary  to  ensure  loan  area  reliability  and  system
reliability, at just and reasonable rates.

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***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      "Required   Facility   Documents"   means  all   Permits   and  any  other
authorizations,  rights,  CAISO  certifications  and agreements now or hereafter
necessary for the operation and maintenance of the Facility and the Premises and
the generation and transmission  for energy and receipt of gas,  including those
set forth in  Exhibit  3.2.9.  Nothing  set forth in  Exhibit  3.2.9  limits the
obligations of MMC to obtain the Permits required hereunder.

      "Requirements of Law" means any applicable  federal,  state and local law,
statute, executive order, regulation,  rule, code or ordinance enacted, adopted,
issued  or  promulgated  by any  federal,  state,  local or  other  Governmental
Authority  or  regulatory  body  (including   those  pertaining  to  electrical,
building,   zoning,   environmental   and   occupational   safety   and   health
requirements).

      "SDG&E" means San Diego Gas & Electric.

      "Services" is defined in Section 4.1.

      "SoCalGas" means the Southern California Gas Company.

      "Standard  Packages"  means  full-Gas Day physical  deliveries of gas. Any
group of  contiguous  Gas Days which are traded as one package shall be deemed a
Standard  Package and the quantity of gas  delivered on each Gas Day included in
such a Standard Package shall be the same.  Contiguous Gas Days shall be treated
as a  Standard  Package if the  Parties  reasonably  expect  such Gas Days to be
listed next to the label "Flow  date(s):"  under the heading "Daily price survey
($/MMBtu)" in the applicable  Platts Gas Daily  publication  or its  successors.
Examples of contiguous Gas Days,  which are usually  traded as one package,  are
Saturdays, Sundays, and Mondays.

      "Start Costs" is defined in Section 6.2.

      "Start-Up Testing" means the start-up tests for the Facility.

      "System"  means the  electric  transmission  substation  and  transmission
and/or  distribution  facilities  owned,  operated or maintained by Transmission
Provider, which includes the circuit reinforcements,  extensions, and associated
terminal  facility  reinforcements  or additions  required to  interconnect  the
Facility, all as set forth in the Generation Interconnection Agreement.

      "Term" is defined in Section 2.1.

      "Test  Energy" means any Output  during  periods  prior to the  Commercial
Operation Date.

      "Transmission  Provider"  means  CAISO for the Chula Vista  Facility,  and
CAISO for the Escondido Facility.

      "Transmission  Service" means, if applicable,  the  transmission  services
pursuant to which the Transmission  Provider  transmits Output from the Delivery
Point, as applicable.

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***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      "Unwind Fee" means ***.

      "WECC" means the Western Electricity Coordinating Council.

      1.2 Rules of Interpretation.

            1.2.1.  General.  Unless otherwise  required by the context in which
any term  appears,  (a) the  singular  includes  the plural and vice versa;  (b)
references to "Articles,"  "Sections,"  "Schedules,"  "Annexes," "Appendices" or
"Exhibits" (if any) are to articles, sections, schedules, annexes, appendices or
exhibits hereof,  (c) all references to a particular entity or an electricity or
gas  market  price  index  include  a  reference  to such  entity's  or  index's
successors  and (if  applicable)  permitted  assigns;  (d) the  words  "herein,"
"hereof"  and  "hereunder"  refer to this  Agreement  as a whole  and not to any
particular   Section  or  subsection   hereof;  (e)  all  accounting  terms  not
specifically  defined  herein are to be construed in accordance  with  generally
accepted  accounting  principles in the United  States of America,  consistently
applied; (f) references to this Agreement include a reference to all appendices,
annexes,  schedules and exhibits hereto,  as the same may be amended,  modified,
supplemented  or replaced  from time to time;  (g) the  masculine  includes  the
feminine and neuter and vice versa; (h) "including"  means  "including,  without
limitation"  or  "including,  but not limited  to"; and (i) the word "or" is not
necessarily exclusive.

            1.2.2.  Terms Not to be Construed For or Against Either Party.  Each
term hereof  shall be  construed  simply  according  to its fair meaning and not
strictly for or against  either  Party.  The Parties have jointly  prepared this
Agreement,  and no term hereof shall be construed  against a Party on the ground
that the Party is the author of that provision.

            1.2.3.  Headings.  The  headings  used for the sections and articles
hereof  are for  convenience  and  reference  purposes  only and shall in no way
affect the meaning or interpretation of the provisions hereof.

            1.2.4.  Examples.  Example calculations and other examples set forth
herein are for purposes of illustration  only and are not intended to constitute
a  representation,  warranty or covenant  concerning  the example  itself or the
matters assumed for purposes of such example.  If there is a conflict between an
example and the text hereof, the text shall control.

            1.2.5. Joint Obligations of MMC. Any obligation,  covenant,  waiver,
indemnity or representation of or by "MMC" in this Agreement,  an EEI Agreement,
or any document or instrument ancillary hereto or thereto is without limitation,
and  an  independently  enforceable,  mutually  guarantied,  joint  and  several
obligation,  covenant,  waiver,  indemnity and representation of each and all of
MMCC, MMCE and MMCN.

                                   SECTION 2
                                      TERM

      2.1  Term.  This  Agreement  shall  become  effective  on the date  hereof
("Effective  Date") and,  unless earlier  terminated as provided  herein,  shall
remain in effect until six months from the  Commercial  Operation Date and shall
automatically renew month-to-month thereafter, until terminated on prior written
notice  given by either  Party at least 60 days before the last day of the month
in which termination is desired to be effective (the "Term").  In the event of a
termination,  any  outstanding  delivery and/or payment  obligations,  including
those  committed  to by PPM with third  parties  respecting  the  Facilities  in
accordance   with  the  Services,   shall  continue  until  fully  performed  or
discharged. If MMC terminates prior to ***, in addition to all other amounts due
hereunder, MMC shall pay the Unwind Fee.

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***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

                                   SECTION 3
                         REPRESENTATIONS AND WARRANTIES

      3.1 PPM's Representations and Warranties.  PPM represents,  covenants, and
warrants to MMC that:

            3.1.1.  Organization.  PPM is duly  organized  and validly  existing
under the laws of the State of Oregon.

            3.1.2.  Authority.  PPM  has the  requisite  corporate,  legal,  and
regulatory power and authority to enter hereinto and to perform according to the
terms hereof.

            3.1.3.  Corporate Actions.  PPM has taken all actions required to be
taken by it to authorize the execution,  delivery and performance hereof and the
consummation of the transactions contemplated hereby.

            3.1.4.  No  Contravention.  The execution and delivery hereof do not
contravene  any  provision  of, or constitute a default  under,  any  indenture,
mortgage,  security  instrument or undertaking,  or other material  agreement to
which PPM is a party or by which it is bound,  or any valid  order of any court,
or any regulatory agency or other body having authority to which PPM is subject.

            3.1.5.  Valid and Enforceable  Agreement.  This Agreement is a valid
and legally  binding  obligation of PPM,  enforceable  against PPM in accordance
with its terms  (except as the  enforceability  hereof may be limited by general
principles of equity or bankruptcy,  insolvency, bank moratorium or similar laws
affecting  credit-ors' rights generally and laws restricting the availability of
equitable remedies).

      3.2 MMC's Representations and Warranties.  MMC represents,  covenants, and
warrants to PPM that:

            3.2.1. Organization. MMCN, MMCC, and MMCE are each limited liability
companies duly organized and validly existing under the laws of Delaware.

            3.2.2. Authority.

                  (a) MMCC (i) leases the Chula  Vista  Facility  pursuant  to a
lease with at least five years' term remaining from the date hereof; (ii) is not
a load-serving entity;  (iii) has the requisite corporate,  legal and regulatory
power and  authority  to enter  hereinto  and to perform  according to the terms
hereof, including all required regulatory authority to make wholesale sales from
the Facility; (iv) has the power and authority to own and operate its businesses
and  properties,  to own or lease the  Premises  and to conduct the  business in
which it currently engaged; and (v) is duly qualified and in good standing under
the  laws of each  jurisdiction  where  its  ownership,  lease or  operation  of
property or the conduct of its business requires such  qualification,  except in
each case in clauses (iii),  (iv), and (v) where the failure would not result in
a Material Adverse Effect.

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***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

                  (b)  MMCE  (i)  owns  the  Escondido  Facility;  (ii) is not a
load-serving  entity;  (iii) has the requisite  corporate,  legal and regulatory
power and  authority  to enter  hereinto  and to perform  according to the terms
hereof, including all required regulatory authority to make wholesale sales from
the Facility; (iv) has the power and authority to own and operate its businesses
and  properties,  to own or lease the  Premises  and to conduct the  business in
which it currently engaged; and (v) is duly qualified and in good standing under
the  laws of each  jurisdiction  where  its  ownership,  lease or  operation  of
property or the conduct of its business requires such  qualification,  except in
each case in clauses (iii),  (iv), and (v) where the failure would not result in
a Material Adverse Effect.

                  (c) MMCN (i) owns  100% of the  equity  interests  in MMCC and
MMCE;  (ii) is not a  load-serving  entity;  (iii) has the requisite  corporate,
legal and  regulatory  power and  authority  to enter  hereinto  and to  perform
according to the terms hereof,  including all required  regulatory  authority to
make wholesale sales from the Facility;  (iv) has the power and authority to own
and operate  its  businesses  and  properties,  to own or lease the  property it
occupies and to conduct the business in which it currently  engaged;  and (v) is
duly  qualified and in good standing under the laws of each  jurisdiction  where
its  ownership,  lease or  operation  of property or the conduct of its business
requires such qualification, except in each case in clauses (iii), (iv), and (v)
where the failure would not result in a Material Adverse Effect.

            3.2.3.  Actions.  MMCC,  MMCE,  and MMCN have each taken all actions
required to authorize the  execution,  delivery and  performance  hereof and the
consummation of the transactions contemplated hereby.

            3.2.4.  Familiarity  with  Requirements of Law. MMC is familiar with
the  requirements  of and can comply  with all  Requirements  of Law,  including
General Order 167.

            3.2.5. No Contravention.  The execution,  delivery,  performance and
observance by MMCC,  MMCE,  and MMCN of their  obligations  hereunder do not and
will not:

                  (a) contravene,  conflict with or violate any provision of any
material  Requirements of Law presently in effect having applicability to MMC or
any of MMC's members;

                  (b) require  the consent or approval of or material  filing or
registration  with any  Governmental  Authority  or other person other than such
consents and approvals which are (i) set forth in Exhibit 3.2.9 or (ii) required
in  connection  with the  operation or ownership of the  Facility,  described in
Exhibit 3.2.9 and expected to be obtained in due course;

                  (c)  Except to the  extent it would not  result in a  Material
Adverse Effect, result in a breach of or constitute a default under any material
agreement,  instrument  or  undertaking  to which MMC is a party or by which the
Premises or MMC is bound.

                                       10
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Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

            3.2.6.  Valid and Enforceable  Agreement.  This Agreement is a valid
and legally binding obligation, enforceable in accordance with its terms (except
as the  enforceability  hereof may be limited by general principles of equity or
bankruptcy,  insolvency,  bank  moratorium or similar laws affecting  creditors'
rights generally and laws restricting the availability of equitable remedies).

            3.2.7.  Litigation.  No litigation,  arbitration,  investigation  or
other  proceeding  is  pending  or, to the best of MMC's  knowledge,  threatened
against any of MMCN,  MMCC or MMCE,  or against any of their members or managers
with respect hereto or the transactions contemplated hereunder.

            3.2.8.  Accuracy of  Information.  No exhibit,  contract,  report or
document  furnished  by MMC to PPM in  connection  with this  Agreement,  or the
negotiation or execution hereof,  contains any material  misstatement of fact or
omits to state a  material  fact or any fact  necessary  to make the  statements
contained therein not misleading.

            3.2.9. Required Facility Documents.  All Required Facility Documents
are listed on Exhibit 3.2.9, are held by MMC and are valid and in full force and
effect  with any  applicable  appeal  periods  having  expired.  Pursuant to the
Required Facility Documents, MMC holds as of the Effective Date, or will hold by
the Commercial  Operation Date, and covenants that it will hold during the Term,
all rights and  entitlements  necessary  to own and operate the  Facility and to
perform its duties under and deliver Net Output to PPM in  accordance  with this
Agreement.  No unusual or burdensome conditions are expected by MMC to be placed
upon, or created by, any of the Required Facility  Documents and the anticipated
operation of the Facility  complies with all  applicable  restrictive  covenants
affecting the Premises and all Requirements of Law.

      3.3 No Other  Representations or Warranties.  Each Party acknowledges that
it has entered hereinto in reliance upon only the representations and warranties
set forth in this  Agreement,  and that no other  representations  or warranties
have been made by the other Party with respect to the subject matter hereof.

      3.4 Continuing  Nature of  Representations  and  Warranties;  Notice.  The
representations  and  warranties  set forth in this  Section  are made as of the
Effective Date and deemed made  continually  throughout the Term. If at any time
during the Term, any Party obtains actual  knowledge of any event or information
which causes any of the  representations  and warranties in this Section 3 to be
materially  untrue or misleading,  such Party shall provide the other Party with
written notice of the event or information,  the  representations and warranties
affected,  and the action,  if any, which such Party intends to take to make the
representations and warranties true and correct. The notice required pursuant to
this Section shall be given as soon as practicable  after the occurrence of each
such event.

                                       11
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***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

                                    SECTION 4
                                    SERVICES

            4.1.1.  Services.  PPM will  provide,  and MMC hereby grants PPM the
authority  to  perform  and  provide,   the  following   scheduling   and  asset
optimization  services to MMC for each  Facility  from and after the  Commercial
Operation Date for such facility (the "Services"): ***.

      4.2 Direct Payment. ***.

      4.3 Exclusivity. ***.

      4.4 Ultimate Control. ***.

                                   SECTION 5
               FUTHER COVENANTS RESPECTING SERVICES AND FACILITIES

      5.1  Protocols.  The  Parties  shall  agree  upon day ahead  and  intraday
protocols for provision of the Services.  These  protocols shall include and not
be limited to the Protocols.

      5.2 Maintenance of Authorities. MMC agrees that it will, and maintain such
personnel   and   authorities,   Required   Facility   Documents,   rights   and
authorizations as are necessary to enable it to, follow any instructions  issued
to  it  by  PPM  in  connection  with  the  foregoing,  including  the  dispatch
instantaneously to precision Net Output and the dispatch of schedules.

      5.3 MMC Operational  Control. MMC will remain in charge of and responsible
for the operations of the Facilities  and the  maintenance of the Premises,  and
will be  responsible  to  maintain  all  contracts,  rights,  Required  Facility
Documents,  Requirements of Law, and tariffs with third parties and Governmental
Authorities  as  necessary  for  the  operation  of  the  Facilities,  sale  and
transportation of natural gas and transmission of electricity.

      5.4 EWG.  MMC  covenants  that  during the Term MMC  shall,  to the extent
required  to  prevent  MMC or any  Facility  from being  regulated  as a "Public
Utility" pursuant to PUHCA or otherwise, cause MMC, as applicable, to be an EWG.
During the Term, MMC shall maintain its EWG status (to the extent it is required
by law to do so) and its authority to perform its obligations hereunder.

                                   SECTION 6
                               PRICING OF SERVICES

      6.1 Energy Costs. ***.

      6.2 Inclusions. ***.

      6.3 Exclusions. ***.

      6.4 Energy Revenue. ***.

      6.5 Payment to PPM. ***.

      6.6 Limitation on PPM Obligations and  Liabilities.  Without  limiting the
generality of the limitations on the obligations or liabilities of PPM set forth
elsewhere herein: ***

                                       12
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Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      6.7 Further Terms Respecting Pricing.  Without limiting the foregoing:***.

      6.8  Monthly  Scheduling  Fee.  In  addition  to  the  other  amounts  due
hereunder,  MMC shall pay PPM each month the  Monthly Fee for each month or part
thereof during the Term.

      6.9 ***.

                                   SECTION 7
                              CONDITIONS PRECEDENT

      7.1  Conditions  Precedent.  The  obligations  of the  Parties  under this
Agreement are subject to the following conditions precedent:

            7.1.1. MMC's proof of ownership and right to conduct itself with the
Facilities  and their  interconnection  and fuelling in the manner  contemplated
herein.

            7.1.2.  The Parties  meeting all  Requirements of Law and having all
authorities  required by all applicable  Electric System  Authorities to perform
this Agreement and the transactions contemplated herein.

            7.1.3.  MMC and the  Facilities  will  have all  required  emissions
credits,  CAISO certifications,  FERC market-based rate authority,  CEC and CPUC
authorizations and approvals,  interconnection agreements and authorizations and
Required  Facility  Documents,  in the correct  name, as are required to perform
this Agreement and the transactions  contemplated hereunder.  Specifically,  MMC
shall  be  responsible  and  confirm  to PPM  that  is  has  complied  with  all
requirements   under  sections  8  and  9  of  the   "California  ISO  Generator
Interconnection      Manual"      located      on     the      internet      at:
http:/lwww.caiso.comldocs/2003/06/09/200306090024421491.doc

            7.1.4.   MMC's   establishment  of  all   record-keeping  and  other
capabilities required for compliance with General Order 167.

            7.1.5.  The Parties  shall have all such  control over any rights to
deal with energy and gas as are required to perform this Agreement.

                                   SECTION 8
               PPM AS SCHEDULING COORDINATOR AND CONTRACT MARKETER

      8.1 Scheduling  Coordinator.  PPM shall be the Scheduling Coordinator with
the CAISO for the Facilities (or MMC, as applicable) during the term. MMC hereby
indemnifies and agrees to hold PPM harmless from all liabilities associated with
so serving,  including any charges later assessed to the  marketplace or certain
classes of participants  in the  marketplace as a whole by CAISO,  except to the
extent such  liabilities  result from the gross  negligence,  fraud,  or willful
misconduct  of PPM.  PPM will  perform  its  scheduling  services  hereunder  as
Scheduling  Coordinator  as defined in the CAISO Tariff and pursuant to and
consistent  with  the  CAISO  tariffs,  protocols,   operating  procedures,  and
scheduling  practices.  PPM will  provide  these  services  in  accordance  with
industry practice and the CAISO Protocols.

                                       13
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Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

            8.1.1.  PPM shall pass  through and bill MMC as part of Energy Costs
for all CAISO fees,  penalties and charges attributable to the services provided
by PPM to MMC as Scheduling  Coordinator.  Subject to the  provisions of Section
8.1,  MMC  shall be  responsible  for all CAISO  fees,  penalties  and  charges,
including Grid Management Charges ("GMC") applied to deviation  amounts,  market
transmission  transaction  charges,  including  minimum  load cost  compensation
charges,  uninstructed  energy settlements,  congestion  charges,  allocation of
excess  and  intermit-tent   resources  net  deviation  allocation  charge,  and
associated credit charges.

            8.1.2.  MMC shall assume all liability and reimburse PPM for any for
any fees, penalties, liabilities,  assessments, or charges assessed by the CAISO
that are part of Energy Costs whether billed to PPM or MMC, or that are incurred
by PPM as a result  of MMC's  negligent  action  failure  to abide by the  CAISO
Tariff and CAISO Protocols.  MMC and PPM shall cooperate to minimize  imbalances
and fees, liabilities,  assessments, or similar charges assessed by the CAISO to
the extent possible.

      8.2 Contract  Marketer.  With respect to all of MMC's contracts and rights
with respect to gas and gas transportation,  PPM will be designated as "Contract
Marketer" as defined by the  appropriate  tariffs as may be changed from time to
time. MMC will indemnify and hold PPM harmless from all  liabilities  associated
with so serving.

                                   SECTION 9
                       FURTHER COVENANTS RESPECTING ENERGY

      9.1  Liquidated  Damages.  In addition to all other amounts due hereunder,
and  notwithstanding  any  provision to the contrary in the EEI Agreement or any
definition or product  definition therein or transaction  thereunder,  MMC shall
pay PPM "Liquidated  Damages"  representing the cost to PPM of replacement Power
Products,  local  distribution  company charges or CAISO charges or penalties to
cover a Forced Outage from a Facility,  or any part thereof, or fees, penalties,
charges, costs or losses otherwise incurred by PPM due to any action or inaction
by MMC personnel,  agents or contractors,  or failures of MMC automatic dispatch
systems, or failure of MMC internal or external communications, or default under
or termination of this  Agreement,  except to the extent such action or inaction
was a result of or in connection with the fraud,  willful  misconduct,  or gross
negligence  of PPM.  Without  limiting  the  generality  of the  foregoing,  MMC
understands  that Power  Products may be  remarketed by PPM in a manner that may
render PPM liable to others for damages for such Power Products or parts thereof
that are  financially  firm  even if unit  contingent,  and  that MMC is  liable
hereunder to  reimburse  PPM for any costs or losses for failure to deliver such
Power Products or part thereof as Liquidated  Damages.  Liquidated Damages shall
also include  amounts due from MMC denominated as such pursuant to Section 10.1.
MMC shall be responsible for Liquidated Damages for periods respecting which the
Facilities are reported by MMC as available but do not perform as expected,  and
result in actual  Liquidated  Damages to PPM.

      9.2 Title and Risk of Loss of Net  Output.  MMC shall  deliver  Net Output
free and clear of all liens, claims and encumbrances.  Title to and risk of loss
of all Net Output shall transfer from MMC to PPM upon its delivery to PPM at the
Delivery  Point.  MMC  shall  be  deemed  to be in  exclusive  control  of,  and
responsible  for,  any  damage or injury  caused by, all energy up to and at the
Delivery  Point.  PPM  shall  be  deemed  to be in  exclusive  control  of,  and
responsible  for, any damages or injury  caused by, Net Output from the Delivery
Point.

                                       14
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Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      9.3 Further Assurances.  At PPM's request,  the Parties shall execute such
documents and  instruments as may be reasonably  required to effect  recognition
and transfer of the Power Products to PPM.

                                   SECTION 10
                    FURTHER COVENANTS RESPECTING NATURAL GAS,

      10.1 Fuel Price. ***.

                                   SECTION 11
                           PERFORMANCE OF THE FACILITY

            11.1 Facility Dispatch.  Subject to Section 4.4, MMC shall cause the
Facilities to perform as directed by PPM as follows:

            11.1.1.  Dispatch and  scheduling of Power Products as determined by
PPM pursuant to the terms hereof.

            11.1.2. Facility turbine starts, as determined by PPM.

            11.1.3. Facility turbine ramp rates, as each Facility is technically
capable of performing.

      11.2 Costs and Charges.  MMC shall be responsible for paying or satisfying
when due all costs or charges  imposed in  connection  with the  scheduling  and
delivery of Net Output up to and at the Delivery Point,  including  transmission
costs,  Transmission Service, and transmission line losses. Without limiting the
generality  of the  foregoing,  MMC  shall  bear all costs  associated  with the
modifications  to  Interconnection  Facilities or the System  (including  system
upgrades).

      11.3 Costs of Ownership and Operation.  Without limiting the generality of
any other provision hereof,  MMC shall be solely responsible for paying when due
(a) all costs of owning and operating  the Facility in compliance  with existing
and future  Requirements of Law and the terms and conditions hereof, and (b) all
taxes and charges (however characterized) now existing or hereinafter imposed on
or with  respect to the  Facilities,  its  operation,  or on or with  respect to
emissions or other environmental  impacts of the Facilities,  including any such
tax or charge  (however  characterized)  to the extent payable by a generator of
such energy.

      11.4  Station  Service.   MMC  shall  be  responsible  for  arranging  and
obtaining,  at its sole risk and expense,  any station  service  required by the
Facilities.

      11.5 Taxes.  MMC shall pay or cause to be paid when due, or reimburse  PPM
for, all  existing and any new sales,  use,  excise,  ad valorem,  and any other
similar taxes, imposed or levied by any Governmental Authority on the generation
or on the sale of Power  Products,  regardless of whether such taxes are imposed
on PPM or MMC under Requirements of Law.

                                       15
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Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      11.6 Standard of Facility Operation.

            11.6.1.  General. At MMC's sole cost and expense, MMC shall operate,
maintain  and  repair  the  Facility  and  the  Interconnection   Facilities  in
accordance with (i) the applicable and mandatory standards,  criteria and formal
guidelines of FERC and any Electric System Authority; (ii) the Required Facility
Documents; (iii) the Generation Interconnection Agreement; (iv) all Requirements
of Law; (v) the requirements hereof, and (vi) Prudent Electrical Practice.

            11.6.2.  CAISO Standards.  PPM and MMC shall perform all generation,
scheduling and transmission services in compliance with all applicable operating
policies,  criteria,  rules,  guidelines  and  tariffs of the CAISO and  Prudent
Electrical  Practices.  MMC  shall  comport  and  comply  with  any  conditions,
modifications,  amendments  or  additions  to the  applicable  CAISO  Tariff and
protocols.

      11.7 Fines and Penalties.

            11.7.1. MMC shall pay when due all fines,  penalties, or legal costs
incurred by MMC or for which MMC is legally  responsible  for  noncompliance  by
MMC, its agents, employees,  contractors or subcontractors,  with respect to any
provision hereof, any agreement, commitment, obligation or liability incurred in
connection  with this  Agreement  or the  Facility or any  Requirements  of Law,
except where such fines,  penalties  or legal costs are being  contested in good
faith by MMC, its agents or contractors through appropriate  proceedings and MMC
has set aside and funded  adequate  reserves  or posted  security  to cover such
fines,  penalties or legal costs in the event of an adverse determination to the
extent required under generally accepted accounting principles.

            11.7.2. If fines, penalties, or legal costs are assessed against PPM
by any Governmental  Authority due to noncompliance by MMC with any Requirements
of Law,  or if the  performance  of MMC is  delayed  or  stopped by order of any
Governmental  Authority due to MMC's noncompliance with any Requirements of Law,
MMC  shall  indemnify  and  hold  harmless  PPM  against  any  and  all  losses,
liabilities, damages, and claims suffered or incurred by PPM as a result (except
to the extent MMC's  non-compliance  resulted from or was in connection with the
gross negligence, fraud, or willful misconduct of PPM).

            11.7.3. MMC shall reimburse PPM for all fees,  damages, or penalties
imposed on PPM by any Governmental Authority, other person or to other utilities
for  violations  to the  extent  caused  by a  default  by MMC or a  failure  of
performance  by MMC hereunder  (except to the extent MMC's default or failure to
perform was caused by or resulted from the gross  negligence,  fraud, or willful
misconduct of PPM).

      11.8 Interconnection.  MMC shall be responsible for the costs and expenses
associated with interconnection of the Facility at the Delivery Point, including
the  costs of any  System  upgrades  beyond  the  Delivery  Point  necessary  to
interconnect the Facility with System and to allow the delivery of energy to the
Delivery Point.  MMC agrees that it shall have no claims  hereunder  against PPM
with respect to any  requirements  imposed by or damages caused by (or allegedly
caused by) acts or omissions of Interconnection Provider, in connection with the
Generation Interconnection Agreement or otherwise.

      11.9  Coordination   with  System.   MMC  shall  be  responsible  for  the
coordination and  synchronization  of the Facility's  equipment with the System,
and shall be solely  responsible  for (and shall  defend  and hold PPM  harmless
against)  any damage  that may occur as a direct  result of MMC's  breach of the
Generation  Interconnection  Agreement,  except to the extent  MMC's  breach was
caused by or was a result of the gross negligence,  fraud, or willful misconduct
of PPM).

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Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      11.10 Outages.

            11.10.1.  Planned Outages.  Except as otherwise provided herein, MMC
shall only schedule  Planned  Outage during the months of March,  April and May,
except to the extent a Planned  Outage is  reasonably  required  (i) to enable a
vendor to satisfy a guarantee  requirement in a situation in which the vendor is
not otherwise able to perform the guarantee work at a time other than during one
of the  months  specified  above  or  (ii) to  comply  with  Prudent  Electrical
Practices and such work is not otherwise  reasonably able to be performed during
the  above-specified  months.  MMC shall provide PPM with an annual  forecast of
Planned  Outages  for each  Contract  Year at least one month,  but no more that
three months,  before the first day of that Contract  Year,  and shall  promptly
update  such  schedule,  or  otherwise  change it only to the extent that MMC is
reasonably  required  to change it in order to comply  with  Prudent  Electrical
Practices.

            11.10.2.  Maintenance Outages. If MMC reasonably  determines that it
is  necessary  to schedule a  Maintenance  Outage,  MMC shall  notify PPM of the
proposed  Maintenance  Outage as soon as  practicable  but in any event at least
five days before the Outage begins. Upon such notice, the Parties shall plan the
Maintenance  Outage to mutually  accommodate the reasonable  requirements of MMC
and the service obligations of PPM; provided,  however,  that MMC shall take all
reasonable  measures and use best  efforts  consistent  with Prudent  Electrical
Practices  to not schedule any  Maintenance  Outage  during the months of March,
April  and May.  Notice of a  proposed  Maintenance  Outage  shall  include  the
expected start date and time of the Outage, the amount of generation capacity of
the Facility that will not be available,  and the expected  completion  date and
time of the Outage.  MMC shall give PPM notice of the Maintenance  Outage within
ten minutes after MMC determines that the Maintenance  Outage is necessary.  PPM
shall promptly respond to such notice and may request  reasonable  modifications
in the schedule for the Outage.  MMC shall use all reasonable  efforts to comply
with any request to modify the schedule for a Maintenance  Outage  provided that
such  change  has no  substantial  impact on MMC.  MMC shall  notify  PPM of any
subsequent  changes in generation  capacity available to PPM as a result of such
Maintenance  Outage or any changes in the Maintenance Outage completion date and
time. As soon as practicable,  any notifications given orally shall be confirmed
in writing. MMC shall take all reasonable measures and exercise its best efforts
consistent  with Prudent  Electrical  Practices to minimize  the  frequency  and
duration of Maintenance Outages.

                                       17
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Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

            11.10.3. Forced Outages. MMC shall within ten minutes provide to PPM
an oral report, via telephone to a number specified by PPM, of any Forced Outage
of the Facility. This report shall include the amount of the generation capacity
of the Facility that will not be available  because of the Forced Outage and the
expected return date of such generation  capacity.  MMC shall within ten minutes
update the report as necessary to advise PPM of changed circumstances. MMC shall
take all  reasonable  measures and exercise  its best  efforts  consistent  with
Prudent  Electrical  Practices  to avoid  Forced  Outages and to minimize  their
duration.

            11.10.4.  Notice of  Deratings  and  Outages.  Without  limiting the
foregoing,  MMC will inform PPM, via telephone to a number  specified by PPM, of
any major limitations, restrictions, Deratings or Outages known to MMC affecting
the  Facility  for the  following  day and will within ten minutes  update MMC's
notice to the extent of any material changes in this information.

      11.11  Expansion.  If MMC  elects to  increase,  at its own  expense,  the
ability of the  Facility  to deliver  Net Output  through  any means,  including
replacement or modification of turbines or related infrastructure, such Facility
as modified shall be subject to the terms hereof,  provided that the Monthly Fee
shall be increased by the same percentage by which the Net Output  capability of
the Facility was increased.

                                   SECTION 12
                              FACILITY INFORMATION

      12.1  Metering.  Metering  shall be  performed  at the location and in the
manner specified in the Generation  Interconnection Agreement. All quantities of
energy purchased shall reflect Net Output.  MMC shall bear all costs relating to
all metering equipment.

      12.2 Meter Data. Upon written  request by PPM, MMC shall promptly  request
the Interconnection  Provider or Transmission Provider in writing to provide any
and all meter or other data associated with the Facility and Net Output directly
to PPM.  PPM shall have the right to provide  such data to any  Electric  System
Authority.

      12.3 PPM's Right to Monitor. During the Term, MMC shall permit PPM and its
advisors and consultants to perform such examinations,  inspections, and quality
surveillance  as, in PPM's reasonable  judgment,  are appropriate and advisable,
provided such activities take place during business hours and after no less than
three days' written notice.

      12.4  Exculpation.  PPM is under no  obligation  to exercise  any of these
monitoring  rights provided for herein and, having exercised any such rights, is
under  no  obligation  to  communicate  or  take  action  with  respect  to  any
information  discovered  as  a  result  of  monitoring.   Without  limiting  the
generality  of the  foregoing,  although  PPM will in good  faith pass on to MMC
information discovered of which it becomes aware, PPM shall have no liability to
MMC  for  failing  to  advise  it or  incorrectly  advising  it,  of  associated
activities  or  omissions,  including  any  condition,  damages,  circumstances,
infraction,  fact, act,  omission or disclosure  discovered or not discovered by
PPM with respect to the Facility or any contractor.

      12.5 Electronic  Communications.  MMC shall provide such real time data to
PPM on the same basis on which MMC receives the data (e.g.,  if MMC receives the
data in four second  intervals,  PPM shall also  receive the data in four second
intervals).  MMC shall install a dedicated direct  communication  circuit (which
may be by common carrier telephone or internet  connection)  between PPM and the
control  center  in the  Facility's  control  room or such  other  communication
equipment as the Parties may agree.  MMC shall maintain an electronic  fault log
of  operations  of the Facility  during each hour of the Term  commencing on the
Commercial  Operation  Date. MMC shall provide PPM with a copy of the electronic
fault log within 30 days after the end of the calendar  month to which the fault
log applies.

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Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      12.6  Maintenance   Information.   MMC  shall  provide  to  PPM  a  report
summarizing the results of maintenance performed during each Maintenance Outage,
Planned  Outage,  and any  Forced  Outage,  and upon  request  of PPM any of the
technical data obtained in connection with such maintenance;

      12.7 Documents to  Governmental  Authorities.  After sending or filing any
statement,  application,  and  report  or any  document  with  any  Governmental
Authority or Electric System Authority  relating to operation and maintenance of
the Facility, MMC shall promptly provide to PPM a copy of the same.

      12.8 Notice of Material  Adverse Events.  MMC shall promptly notify PPM of
receipt of written  notice or actual  knowledge by MMC of the  occurrence of any
event of default under any material agreement to which MMC is a party and of any
other development,  financial or otherwise,  which would have a material adverse
effect on MMC or a Facility.

      12.9 Notice of  Litigation.  Following  its  receipt of written  notice or
actual knowledge of the commencement of any action,  suit, and proceeding before
any court or  Governmental  Authority  which  would,  if  adversely  determined,
materially and adversely affect the ability of MMC, MMCC, or MMCE to perform its
obligations  under this Agreement or cause a Material Adverse Effect,  MMC shall
promptly give notice to PPM of the same.

      12.10  Additional  Information.  MMC  shall  provide  to  PPM  such  other
information  respecting  the  condition  or  operations  of  MMCC,  MMCE  or the
Facilities as PPM may, from time to time, reasonably request.

      12.11  Financial  and  Accounting  Information.  If  PPM  or  one  of  its
Affiliates  determines that, under the Financial  Accounting  Standards  Board's
revised Interpretation No. 46, Consolidation of Variable Interest Entities ("FIN
46"),  it may hold a  variable  interest  in MMC,  but it lacks the  information
necessary  to  make a  definitive  conclusion,  MMC  hereby  agrees  to  provide
sufficient financial and ownership  information so that PPM or its Affiliate may
confirm  whether a  variable  interest  does  exist  under FIN 46. If PPM or its
Affiliate  determines that,  under FIN 46, it holds a variable  interest in MMC,
MMC hereby agrees to provide  sufficient  financial and other information to PPM
or its  Affiliate  so that PPM may properly  consolidate  the entity in which it
holds the variable  interest and/or present the disclosures  required by FIN 46.
PPM  shall  reimburse  MMC for MMC's  reasonable  costs  and  expenses,  if any,
incurred in connection with PPM's requests for  information  under this Section.
Notwithstanding  the foregoing,  MMC and PPM  acknowledge and agree that, in the
event of such a  determination,  they shall  endeavor to make such  commercially
reasonable  amendments or  modifications  to this  Agreement so as to avoid such
treatment under FIN 46.

                                       19
***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      12.12  Access  Rights.  Upon  reasonable  prior  notice and subject to the
prudent  safety  requirements  of MMC, MMC shall provide PPM and its  authorized
agents, employees and inspectors with reasonable access during business hours to
the Facilities for all purposes.

                                   SECTION 13
                                     CREDIT

      13.1  Default  Security.  Within  five  days of the  Effective  Date,  and
continuing at all times until 98 days  following the end of the Term,  MMC shall
post and  maintain in favor of PPM a Letter of Credit in the amount of $***.  If
MMC fails to pay any  amount due to PPM within  the time  provided  for  payment
hereunder,  PPM shall be  entitled  to and shall  draw upon the Letter of Credit
from  time to time an  amount  equal  to the  amount  unpaid,  and MMC  shall be
required  to  replenish  or  reinstate  the  Letter of  Credit up to the  amount
specified  in this  Section.  Without  limiting  its other  remedies  hereunder,
subject to the provisions  set forth herein,  PPM shall also be entitled to draw
upon the Letter of Credit for damages  arising if this  Agreement is  terminated
because of MMC's default.

      13.2 Annual and Quarterly Financial  Statements.  If requested by PPM from
time to time,  MMC shall  provide PPM with copies of its most recent  annual and
quarterly  financial  statements  prepared in accordance with generally accepted
accounting  principles;   provided,   however,  to  the  extent  such  financial
statements are, or will be, otherwise publicly  available,  PPM shall obtain the
financial statement through such publicly available sources.

      13.3 Security is Not a Limit on MMC's Liability. The security contemplated
by this Section: (a) constitutes security for, but is not a limitation of, MMC's
obligations  hereunder,  and (b) shall not be PPM's  exclusive  remedy for MMC's
failure to perform in accordance with this Agreement.

                                   SECTION 14
                       BILLINGS, COMPUTATIONS AND PAYMENTS

      14.1 Payment  Settlement.  Settlement  of all payments  shall occur by the
25th day of the month following the month in which  performance was rendered and
if such 25th day is not a business day then on the next  business day  occurring
after  such 25th day;  provided,  however,  that all such  settlements  shall be
subject to adjustment when the true costs are received from the CAISO, generally
90 days from the end of a month,  but in no event  shall an  adjustment  be made
more than one year after the end of the applicable month.

      14.2  Offsets.  PPM may offset any payment due hereunder  against  amounts
owing  from MMC to PPM  pursuant  hereto  or any  other  agreement  between  the
Parties.

      14.3  Interest on Late  Payments.  Any amounts  that are not paid when due
hereunder  shall bear  interest at the Contract  Interest Rate from the date due
until paid.

      14.4 Disputed Amounts. If either Party, in good faith, disputes any amount
due pursuant to an invoice rendered hereunder, such Party shall notify the other
Party of the specific  basis for the dispute and, if the invoice shows an amount
due, shall pay that portion of the statement  that is  undisputed,  on or before
the due date.  Any such notice shall be provided  within one year of the date of
the invoice in which the error first  occurred.  If any amount  disputed by such
Party is  determined  to be due the other Party,  or if the Parties  resolve the
payment  dispute,  the  amount  due shall be paid  within  five days  after such
determination or resolution,  along with interest at the Contract  Interest Rate
from the date due until the date paid.

                                       20
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Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      14.5 Audit Rights.  Each Party,  through its  authorized  representatives,
shall have the right,  at its sole  expense  upon  reasonable  notice and during
normal business hours, to examine and copy the records of the other Party to the
extent reasonably  necessary to verify the accuracy of any statement,  charge or
computation  made  hereunder or to verify the other Party's  performance  of its
obligations hereunder. Upon request, each Party shall provide to the other Party
statements  evidencing the quantities of energy delivered at the Delivery Point.
If any  statement  is found to be  inaccurate,  a corrected  statement  shall be
issued  and any  amount  due  thereunder  will be  promptly  paid and shall bear
interest  at the  Contract  Interest  Rate from the date of the  overpayment  or
underpayment to the date of receipt of the reconciling payment.  Notwithstanding
the  foregoing,  no  adjustment  shall be made with respect to any  statement or
payment  hereunder  unless a Party  questions  the  accuracy of such  payment or
statement within two years after the date of such statement or payment.

                                   SECTION 15
                              DEFAULTS AND REMEDIES

      15.1  Defaults by Either  Party.  The  occurrence  of any of the following
constitutes an event of default by that Party:

            15.1.1.  A Party's  failure to make a payment when due  hereunder if
the failure is not cured within ten days after such payment is due.

            15.1.2.  A Party  (i) makes an  assignment  for the  benefit  of its
creditors;  (ii)  files  a  petition  or  otherwise  commences,   authorizes  or
acquiesces  in the  commencement  of a  proceeding  or cause of action under any
bankruptcy  or  similar  law for the  protection  of  creditors,  or has  such a
petition filed against it and such petition is not withdrawn or dismissed within
60 days after such filing; (iii) becomes insolvent; or (iv) is unable to pay its
debts when due.

            15.1.3.  A Party's  breach of a  representation  or warranty made by
that  Party  herein  if the  breach  is not  cured  within  30  days  after  the
non-defaulting Party gives the defaulting Party a notice of the default.

            15.1.4. An Event of Default under an EEl Agreement.

            15.1.5.  A Party otherwise fails to perform any material  obligation
imposed upon that Party by this  Agreement if the failure is not cured within 30
days after the  non-defaulting  Party gives the  defaulting  Party notice of the
default; provided, however, that, upon written notice from the defaulting Party,
this 30 day period shall be extended by an additional 60 days if (a) the failure
cannot  reasonably be cured within the 30 day period despite  diligent  efforts,
(b) the default is capable of being cured within the  additional  60 day period,
and (c) the  defaulting  Party  commences  the cure  within the  original 30 day
period and is at all times thereafter diligently and continuously  proceeding to
cure the failure.

                                       21
***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      15.2 Defaults by MMC. The  occurrence of any of the following  constitutes
an event of default by MMC:

            15.2.1. MMC's failure to post,  increase,  maintain or replenish the
Letter of Credit.

            15.2.2.  MMC's  default  under  any  agreement  with  third  parties
relating  to  the  ownership,  interconnection,  operation,  transmission  from,
maintenance  or repair of the Facility,  and failure to cure such default within
the time  required  under such  agreement,  after the  expiration  of applicable
notice,  cure and waiver periods,  if such default results in a Material Adverse
Effect.

            15.2.3.  MMC's receipt of notice of  foreclosure  of the Facility or
any part thereof by a lender, mechanic or materialman, or any other holder of an
unpaid lien or other  charge or  encumbrance  if the same  results in a Material
Adverse Effect.

            15.2.4. MMC otherwise causes a Material Adverse Effect on PPM.

            15.2.5. Violation of General Order 167.

            15.2.6.  MMC's sale of any Power Products from a Facility to a party
other than PPM.

            15.2.7.  MMC's failure to maintain any Material  Facility  Document,
after the expiration of applicable notice, cure and waiver periods.

      15.3  Termination  and Remedies.  Upon the  occurrence  of, and during the
continuation of, an event of default hereunder,  the non-defaulting  Party shall
be entitled to all remedies available hereunder and at law or in equity, and may
terminate  this Agreement by notice to the other Party  designating  the date of
termination  and delivered to the defaulting  Party no less than ten days before
such termination date.  Further,  during the continuation of default by MMC, and
until it has recovered  all damages  incurred on account of such default by MMC,
without exercising its termination right, PPM may offset its damages against any
payment due MMC. The rights  contemplated  by this  Agreement are cumulative and
not exclusive  such that the exercise of one or more rights shall not constitute
a waiver of any other rights. In the event of a termination  hereof,  each Party
shall pay or turn over to the other all amounts due the other  hereunder for all
periods  prior to  termination,  subject to offset by the  non-defaulting  Party
against damages  incurred by such Party. The provisions of Sections 1, 6.5, 6.7,
8, 9, 11.7,  11.9,  12.11,  13.1,  14, 15.3, 16, 20, 21 and 25 shall survive the
termination hereof.

                                       22
***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

                                   SECTION 16
                     INDEMNIFICATION AND LIMITS ON LIABILITY

      16.1 Indemnities.

            16.1.1.  Indemnity by MMC.  MMC shall  release,  indemnify  and hold
harmless PPM, its directors,  officers,  agents, and representatives against and
from the  claims of any third  party  for any and all  loss,  fines,  penalties,
claims, actions or suits, including costs and attorney's fees, both at trial and
on appeal, whether or not suit is brought,  resulting from, or arising out of or
in any  way  connected  with  (i)  the  performance  by  MMC of its  obligations
hereunder,  (ii) any  violation of General  Order 167, and (iii) the  existence,
discovery,  release or discharge of any environmental  contamination on or under
the Premises,  including any loss,  claim,  action or suit, for or on account of
injury,  bodily or  otherwise,  to, or death of,  persons,  or for damage to, or
destruction  or economic  loss of  property,  excepting  only to the extent such
loss,  claim,  action  or suit as may be caused by the  fault,  fraud,  or gross
negligence   of   PPM,   its   directors,   officers,   employees,   agents   or
representatives.

            16.1.2.  Indemnity by PPM.  PPM shall  release,  indemnify  and hold
harmless MMC, its directors,  officers,  agents, and representatives against and
from the  claims of any third  party  for any and all  loss,  fines,  penalties,
claims, actions or suits, including costs and attorney's fees, both at trial and
on appeal, whether or not suit is brought,  resulting from, or arising out of or
in any way connected with the performance by PPM of its  obligations  hereunder,
including any loss, claim,  action or suit, for or on account of injury,  bodily
or otherwise,  to, or death of,  persons,  or for damage to, or  destruction  or
economic loss of property, excepting only to the extent such loss, claim, action
or suit as may be caused by the fault,  fraud,  or gross  negligence of MMC, its
directors, officers, employees, agents or representatives.

         16.2 Limitation on Damages. ***.

                                   SECTION 17
                                    INSURANCE

         17.1 Required Policies and Coverages.  Without limiting any liabilities
or any other  obligations  of MMC hereunder,  MMC shall secure and  continuously
carry with an insurance  company or  companies  rated not lower than "A-" by the
A.M.  Best  Company the  insurance  coverage  specified on Exhibit 17 during the
periods specified on Exhibit 17.

         17.2  Certificates and Certified Copies of Policies.  MMC shall provide
PPM  with a  certified  "true  and  correct"  copy  of the  insurance  policies,
provisions and endorsements contemplated by Exhibit 17 within ten days after the
date by which such policies are required to be obtained (as set forth in Exhibit
17).  The  certificate  (a) shall not  include  the legend  "certificate  is not
evidence of coverage" or any  statement  with  similar  effect,  (b) the insurer
shall have a firm  obligation to provide PPM with 30 days' prior written  notice
of coverage  modifications  (not merely an  obligation to "endeavor" or words of
similar effect), and (c) shall be endorsed by a person who has authority to bind
the insurer.  Within 30 days after the date by which such  policies are required
to be obtained,  MMC shall provide PPM with a certified  "true and correct" copy
of the insurance policies,  provisions and endorsements  contemplated by Exhibit
17. If any  coverage  is written on a  "claims-made"  basis,  the  certification
accompanying  the policy  shall  conspicuously  state that the policy is "claims
made."

                                       23
***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

                                   SECTION 18
                                  FORCE MAJEURE

         18.1 Definition of Force Majeure. "Force Majeure" or "an event of Force
Majeure"  means an event that (a) is not  reasonably  anticipated as of the date
hereof,  (b) is not within the  reasonable  control of the Party affected by the
event,  (c) is not the result of such Party's  negligence or failure to act, and
(d) could not be overcome by the  affected  Party's use of due  diligence in the
circumstances.  Force Majeure includes,  but is not restricted to, events of the
following types (but only to the extent that such an event, in  consideration of
the  circumstances,  satisfies the tests set forth in the  preceding  sentence):
acts of God; fire; explosion;  civil disturbance;  sabotage; action or restraint
by court order or Governmental  Authority not arising out of failure to obtain a
Required Facility Document (as long as the affected Party has not applied for or
assisted in the application for, and has opposed to the extent reasonable,  such
court  or  government  action).  Notwithstanding  the  foregoing,  none  of  the
following  constitute  Force Majeure:  (i) Fuel Cost or  availability of fuel to
operate the Facility; (ii) economic hardship, including lack of money; (iii) for
an MMC claim of Force  Majeure,  delay or failure of MMC to obtain any  Required
Facility  Document;  (iv) MMC's  ability to sell the Power  Products  at a price
greater than the price set forth in this  Agreement;  or (v) a Forced Outage not
caused by a Force Majeure event.

         18.2 Force Majeure Does Not Affect Other Obligations. No obligations of
either  Party that arose  before the Force  Majeure  causing the  suspension  of
performance  or that arise after the  cessation  of the Force  Majeure  shall be
excused by the Force  Majeure.  The  Monthly  Fee shall  continue  to be due and
payable  during  the  pendency  of a Force  Majeure.  In no event  shall a Force
Majeure or a Forced  Outage  excuse MMC from  paying  Liquidated  Damages or the
Unwind Fee whenever applicable.

                                   SECTION 19
                                     NOTICES

         19.1 Addresses and Delivery Methods. All notices, requests,  statements
or payments shall be made to the addresses set out below. Notices required to be
in writing shall be delivered by letter,  facsimile or other  documentary  form.
Notice by  facsimile  or hand  delivery  shall be deemed to have been given when
received or hand delivered.  Notice by overnight mail or courier shall be deemed
to have been given on the date and time evidenced by the delivery receipt.

         To MMC                       Denis Gagnon
                                      Chief Financial Officer
                                      MMC Energy, Inc.
                                      26 Broadway, Suite 907
                                      New York, NY 10004
                                      Telefacsimile: (212) 785-7640

         with a copy to:              Dean M. Colucci, Esq.
                                      DLA Piper  Rudnick  Gray Cary US LLP
                                      1251  Avenue  of  the  Americas  New
                                      York, New York 10020  Telefacsimile:
                                      (212) 884-8494

         To PPM:                      PPM Energy, Inc.
                                      1125 NW Couch Street
                                      Suite 700
                                      Portland, OR 97209
                                      Attention:  Contract Administration
                                      Telefacsimile: (503) 796-6937

         with a copy to:              PPM Energy, Inc.
                                      1125 NW Couch Street
                                      Suite 700
                                      Portland, OR 97209
                                      Legal Department
                                      Attention:  Christian Yoder, Esq.
                                      and Jeremy D. Weinstein, Esq.
                                      Telefacsimile: (503) 796-6907 and (925)
                                      943-3105

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Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

         19.2  Changes of Address.  The Parties may change any of the persons to
whom such  notices are  addressed,  or their  addresses,  by  providing  written
notices thereof in accordance with this Section.

                                   SECTION 20
                                 CONFIDENTIALITY

         20.1  Confidential  Business  Information.  The  following  constitutes
"Confidential  Business  Information," whether oral or written: (a) the Parties'
proposals and negotiations concerning this Agreement, made or conducted prior to
the date  hereof,  (b) this  Agreement  and the terms  hereof,  (c)  information
provided  hereunder,   (d)  the  matters  learned  by  MMC  in  connection  with
performance of the Protocols,  (e) the matters learned by PPM in connection with
the Facilities' operations, and (f) any information ever delivered by PPM to MMC
relating  to  the  market   prices  of  energy  and   methodologies   for  their
determination  or estimation.  MMC and PPM each agree to hold such  Confidential
Business Information wholly confidential. Such Confidential Business Information
may  only  be  used  by the  Parties  for  purposes  related  to  the  approval,
administration or enforcement hereof and for no other purpose.

         20.2  Duty  to  Maintain  Confidentiality.  Each  Party  agrees  not to
disclose  Confidential  Business Information to any other person (other than its
Affiliates,  counsel,  consultants,  lenders,  prospective lenders,  purchasers,
prospective   purchasers,   contractors  providing  services  to  the  Facility,
employees,  officers and  directors  who agree to be bound by the  provisions of
this Section),  without the prior written  consent of the other Party,  provided
that either Party may disclose Confidential Business Information,  if and to the
extent such disclosure is required: (i) by Requirements of Law, (ii) pursuant to
an order of a court or  regulatory  agency,  or (iii) in order to  enforce  this
Agreement or to seek approval hereof. In the event a Party is required by law or
by a court or regulatory agency to disclose  Confidential  Business Information,
such Party  shall to the extent  possible  notify the other Party at least three
Business Days in advance of such disclosure.

         20.3 Proprietary Trade Secrets. MMC understands that this Agreement and
the  structure  of  the  provision  of  the  Services  hereunder  constitutes  a
proprietary trade secret and know-how of PPM, and that disclosure thereof in any
manner other than in the course of the  performance of its terms would damage if
not destroy the value thereof to PPM.

                                       25
***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

         20.4 Press  Releases.  Each Party agrees not to issue any press release
or other public  announcement  of the  relationship  of the Parties or the terms
hereof without the express prior written consent of the other Party.

         20.5 Irreparable Injury;  Remedies. Each Party agrees that violation of
the terms of this Section  constitutes  irreparable  harm to the other, and that
the  harmed  Party may seek any and all  remedies  available  to it at law or in
equity, including injunctive relief.

                                   SECTION 21
                                  DISAGREEMENTS

         21.1  Negotiations.  The Parties shall attempt in good faith to resolve
all disputes  arising out of,  related to or in connection  with this  Agreement
promptly by negotiation,  as follows. Any Party may give the other Party written
notice of any dispute not resolved in the normal course of business.  Executives
of the Parties at levels one level above the personnel who have  previously been
involved  in the  dispute  shall  meet at a mutually  acceptable  time and place
within ten days after  delivery of such notice,  and thereafter as often as they
reasonably deem necessary,  to exchange  relevant  information and to attempt to
resolve the dispute.  If the matter has not been  resolved  within 30 days after
the referral of the dispute to such senior executives,  or if no meeting of such
senior  executives  has taken place within 15 days after such  referral,  either
Party may  initiate  litigation  as provided  hereinafter  if neither  Party has
requested  that the dispute be mediated in  accordance  with Section 21.2 below.
All negotiations pursuant to this Section are confidential.

         21.2 Mediation. If the dispute is not resolved within 30 days after the
referral  of the  dispute  to  senior  executives,  or if no  meeting  of senior
executives has taken place within 15 days after such referral,  either Party may
request that the matter be submitted to nonbinding mediation. If the other Party
agrees,  the  mediation  will be conducted in accordance  with the  Construction
Industry  Arbitration Rules and Mediation Procedures  (Including  Procedures for
Large,  Complex Construction  Disputes) of the American Arbitration  Association
(the  "AAA"),  as  amended  and  effective  on  July  1,  2003  (the  "Mediation
Procedures"), notwithstanding any Dollar amounts or Dollar limitations contained
therein.

                  (a) The  Party  requesting  the  mediation  may  commence  the
mediation  process  with AAA by  notifying  AAA and the other  Party in  writing
("Mediation Notice") of such Party's desire that the dispute be resolved through
mediation,  including  therewith a copy of the Dispute  Notice and the  response
thereto,  if any,  and a copy of the other  Party's  written  agreement  to such
mediation.

                  (b) The mediation  shall be conducted  through,  by and at the
office of AAA located in Portland, Oregon.

                                       26
***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

                  (c) The mediation shall be conducted by a single mediator. The
Parties may select any mutually acceptable mediator. If the Parties cannot agree
on a mediator within five days after the date of the Mediation Notice,  then the
AAA's Arbitration Administrator shall send a list and resumes of three available
mediators to the Parties,  each of whom shall strike one name, and the remaining
person shall be appointed as the mediator. If more than one name remains, either
because one or the other Parties have failed to respond to the AAA's Arbitration
Administrator  within five days after  receiving  the list or because one or the
other  Parties have failed to strike a name from the list or because all Parties
strike  the same  name,  the AAA's  Arbitration  Administrator  will  choose the
mediator from the remaining names. If the designated  mediator shall die, become
incapable or, unwilling to, or unable to serve or proceed with the mediation,  a
substitute  mediator  shall  be  appointed  in  accordance  with  the  selection
procedure described above in this Section 21.2(c),  and such substitute mediator
shall have all such powers as if he or she has been originally appointed herein.

                  (d) The  mediation  shall  consist  of one or  more  informal,
nonbinding  meetings  between  the  Parties  and the  mediator,  jointly  and in
separate caucuses, out of which the mediator will seek to guide the Parties to a
resolution  of the dispute.  The  mediation  process  shall  continue  until the
resolution of the dispute,  or the termination of the mediation process pursuant
to Section  21.2(f).  The costs of the  mediation,  including fees and expenses,
shall be borne equally by the Parties.

                  (e) All verbal and written  communications between the Parties
and issued or  prepared in  connection  with this  Section  21.2 shall be deemed
prepared  and  communicated  in  furtherance,  and in the  context,  of  dispute
settlement,  and shall be exempt from discovery and production, and shall not be
admissible in evidence  (whether as admission or otherwise) in any litigation or
other proceedings for the resolution of the dispute.

                  (f) The initial  mediation meeting between the Parties and the
mediator shall be held within 20 days after the Mediation  Notice.  Either Party
may terminate  the  mediation  process upon or after the earlier to occur of (A)
the failure of the initial  mediation  meeting to occur within 20 days after the
date of the Mediation  Notice,  (B) the passage of 30 days after the date of the
Mediation  Notice without the dispute having been resolved,  or (C) such time as
the mediator makes a finding that there is no possibility of resolution  through
mediation.

                  (g) All  deadlines  specified  in  this  Section  21.2  may be
extended by mutual agreement.

      21.3 Place of Contract Formation; Choice of Forum. MMC and PPM acknowledge
and agree  that this  Agreement  has been made and  entered  into as of the date
first set forth above in the City of Portland,  Oregon.  Each Party  irrevocably
consents  and agrees  that any legal  action or  proceeding  arising out of this
Agreement  or the actions of the Parties  leading up to the  Agreement  shall be
brought  exclusively  in the United  States  District  Court for the District of
Oregon,  Portland Division, or if such court does not have jurisdiction,  in the
Circuit Court for Multnomah  County,  Oregon.  By execution and delivery hereof,
each Party (a) accepts the exclusive  jurisdiction  of such court and waives any
objection  that  it may  now or  hereafter  have  to the  exercise  of  personal
jurisdiction by such court over each Party,  (b) irrevocably  agrees to be bound
by any final judgment  (after any and all appeals) of any such court arising out
of such  documents or actions,  (c)  irrevocably  waives,  to the fullest extent
permitted by law, any objection  that it may now or hereafter have to the laying
of venue of any  suit,  action  or  proceedings  arising  out of such  documents
brought  in such  court  (including  any  claim  that any such  suit,  action or
proceeding has been brought in an inconvenient  forum),  (d) agrees that service
of  process  in any such  action may be  effected  by mailing a copy  thereof by
registered or certified mail,  postage prepaid,  to such Party at its address as
set forth herein,  and (e) agrees that nothing  herein shall affect the right to
effect service of process in any other manner permitted by law.

                                       27
***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      21.4  Settlement  Discussions.  The Parties  agree that no  statements  of
position  or offers of  settlement  made in the  course of the  dispute  process
described in this  Section will be offered into  evidence for any purpose in any
litigation  between  the  Parties,  nor will any such  statements  or  offers of
settlement  shall constitute an admission or waiver of rights by either Party in
connection with any such  litigation.  At the request of either Party,  any such
statements and offers of settlement,  and all copies thereof,  shall be promptly
returned to the Party providing the same.

      21.5   Waiver  of  Jury   Trial.   EACH  PARTY   KNOWINGLY,   VOLUNTARILY,
INTENTIONALLY AND IRREVOCABLY  WAIVES THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY  LITIGATION  BASED  ON  THIS  AGREEMENT,  OR  ARISING  OUT OF,  UNDER  OR IN
CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT  EXECUTED OR CONTEMPLATED TO BE
EXECUTED IN CONJUNCTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING,  STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO.
THIS  PROVISION  IS A MATERIAL  INDUCEMENT  TO EACH OF THE PARTIES FOR  ENTERING
HEREINTO.  EACH  PARTY  HEREBY  WAIVES  ANY  RIGHT TO  CONSOLIDATE  ANY  ACTION,
PROCEEDING OR  COUNTERCLAIM  ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OTHER  AGREEMENT  EXECUTED OR  CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
WITH THIS AGREEMENT,  OR ANY MATTER ARISING HEREUNDER OR THEREUNDER,  IN WHICH A
JURY TRIAL HAS NOT OR CANNOT BE WAIVED.

                                   SECTION 22
                                     GENERAL

      22.1 Parties not Joint  Venturers.  Nothing  contained  herein  creates an
association, trust, partnership or joint venture or imposes a trust, partnership
or fiduciary duty, obligation or liability on or between the Parties.

      22.2 Non-Reliance.  The Parties acknowledge and understand that PPM is not
acting as a financial,  investment or commodity  trading advisor for MMC and has
not given MMC directly or indirectly any assurance,  guaranty or  representation
whatsoever  as to the merits of this  Agreement or any  transaction  or expected
performance  of any  transaction.  MMC  acknowledges  and  understands  that the
Services and arrangements set forth herein are not exclusive to MMC and that PPM
may transact in a manner similar as set forth herein with any other third party.
MMC is not relying upon any advice or representations,  whether written or oral,
of PPM other than the representations expressly set forth in an EEl Agreement or
this  Agreement.  MMC has  made  and  will  make  its own  decisions,  including
decisions  regarding  the  suitability  of this  Agreement,  based  upon its own
judgment  and  upon the  advice  from  such  professional  advisors  as it deems
necessary to consult.  In the event that any Services or obligation set forth in
this Agreement  jeopardize  PPM's FERC  market-based  rate tariff,  PPM shall be
permitted to terminate this Agreement immediately without fault or penalty.

                                       28
***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

      22.3 Choice of Law. This Agreement  shall be  interpreted  and enforced in
accordance  with the laws of the state of  Oregon,  excluding  any choice of law
rules that may direct the application of the laws of another jurisdiction.

      22.4 Legal  Compliance.  The  Parties  do not  intend to violate  any laws
governing the subject matter  hereof.  If any of the terms hereof are determined
to be invalid, illegal or void as being contrary to any applicable law or public
policy,  all other terms of this Agreement  shall remain in effect.  The Parties
shall use best  efforts to amend this  Agreement  to reform or replace any terms
determined  to be  invalid,  illegal or void,  such that the  amended  terms (a)
comply with and are  enforceable  under  applicable  law, (b) give effect to the
intent of the Parties in entering hereinto,  and (c) preserve the balance of the
economics and equities contemplated by this Agreement in all material respects.

      22.5  Further  Assurances.  The Parties  shall  execute  and deliver  such
further documents and instruments and take such further action as may reasonably
be required to fulfill the essential intent and purposes  hereof,  and to comply
with its terms.

      22.6 Waivers.  No waiver of any provision hereof shall be effective unless
the waiver is set forth in a writing that (a) expressly identifies the provision
being waived,  and (b) is signed by the Party waiving the  provision.  A Party's
waiver of one or more failures by the other Party in the  performance  of any of
the provisions hereof shall not be construed as a waiver of any other failure or
failures, whether of a like kind or different nature.

      22.7  Restriction  on  Assignments.  Except as expressly  provided in this
Section  22,  neither  Party may assign this  Agreement  or any of its rights or
obligations hereunder without the prior written consent of the other Party.

      22.8 Integration Clause.  This Agreement and the EEI Agreements  represent
the entire agreement between the Parties and it supersedes all prior agreements,
proposals, representations,  negotiations,  discussions or letters, whether oral
or in writing,  regarding the subject matter hereof.  In the event of a conflict
between this  Agreement and the EEI Agreement,  this Agreement will prevail.  No
modification hereof shall be effective unless it is in writing and signed by all
Parties.

                                       29
***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

         IN WITNESS  WHEREOF,  the  Parties  have caused  this  Agreement  to be
executed in their respective names as of the date first above written.

MMC ENERGY NORTH AMERICA LLC                PPM ENERGY, INC.
a Delaware limited liability company        an Oregon corporation

By:  /s/ Karl W. Miller                     By: /s/ Trevor Mihalik
   ----------------------------                 ----------------------------
Karl W. Miller                              Trevor Mihilik
Chief Executive Officer                     Vice President, Controller

MMC CHULA VISTA LLC                         MMC ESCONDIDO LLC
a Delaware limited liability company        a Delaware limited liability company

By:  /s/ Karl W. Miller                     By:  /s/ Karl W. Miller
   ----------------------------                  --------------------------
Karl W. Miller                              Karl W. Miller
Chief Executive Officer                     Chief Executive Officer

                                       30
***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

                                    EXHIBIT M

                       LIST OF MATERIAL FACILITY DOCUMENTS

Interconnection Agreements:

      o     Dispersed     Generating     Company,      LLC's     (assignor     &
            successor-in-interest  of  RAMCO)  release  of  assignment  of SDG&E
            Interconnection  Agreement  & Expedited  Interconnection  Facilities
            Agreement  to MMC Chula  Vista,  LLC. & MMC  Escondido,  LLC.  Dated
            4/14/2001.

      o     Historical  notice to FERC -  Expedited  Interconnection  Facilities
            Agreement  between  SDG&E and RAMCO,  Inc..  Covers RAMCO  Escondido
            facility. Dated 4/26/2001.

      o     Historical  notice to FERC -  Expedited  Interconnection  Facilities
            Agreement  between SDG&E and RAMCO,  Inc..  Covers RAMCO Chula Vista
            facility. Dated 4/26/2001.

Air Permits:

      o     County of San  Diego,  Air  Pollution  Control  District  "Permit to
            Operate".  Permit #976039  covers MMC Chula Vista,  LLC, and expires
            February 2007.

      o     County of San  Diego,  Air  Pollution  Control  District  "Permit to
            Operate".  Permit  #976038  covers MMC  Escondido,  LLC, and expires
            February 2007.

***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

                                    EXHIBIT N

                                NERC EVENT TYPES

Event                                              Description of Outages
Type
U1(1)    Unplanned (Forced) Outage-Immediate - An outage that requires immediate
         removal  of a unit  from  service,  another  outage  state or a Reserve
         Shutdown   state.   This  type  of  outage   results   from   immediate
         mechanical/electrical/hydraulic  control  systems  trips  and  operator
         initiated trips in response to unit alarms.

U2(1)    Unplanned  (Forced)  Outage-Delayed  - An outage  that does not require
         immediate  removal  of a unit from the  in-service  state but  requires
         removal within six (6) hours.  This type of outage can only occur while
         the unit is in service.

U3(1)    Unplanned  (Forced)  Outage-Postponed - An outage that can be postponed
         beyond  six  hours  but  requires  that  a unit  be  removed  from  the
         in-service  state  before  the end of the next  weekend.  This  type of
         outage can only occur while the unit is in service.

SF       Startup  Failure  - An  outage  that  results  from  the  inability  to
         synchronize a unit within a specified  startup time period following an
         outage or Reserve Shutdown. A startup period begins with the command to
         start and ends  when the unit is  synchronized.  An SF begins  when the
         problem preventing the unit from synchronizing occurs. The SF ends when
         the unit is synchronized or another SF occurs.

MO       Maintenance  Outage - An outage that can be deferred  beyond the end of
         the next  weekend,  but requires  that the unit be removed from service
         before the next planned outage. (Characteristically, a MO can occur any
         time during the year,  has a flexible start date, may or may not have a
         predetermined duration and is usually much shorter than a PO.)

ME       Maintenance  Outage  Extension - An extension of a  maintenance  outage
         (MO) beyond its estimated completion date. This is typically used where
         the  original  scope  of  work  requires  more  time to  complete  than
         originally  scheduled.  Do not use this where  unexpected  problems  or
         delays render the unit out of service  beyond the estimated end date of
         the MO.

PO       Planned  Outage - An outage that is scheduled well in advance and is of
         a predetermined duration,  lasts for several weeks and occurs only once
         or twice a year.  (Boiler  overhauls,  turbine overhauls or inspections
         are typical planned outages.)

PE       Planned Outage Extension - An extension of a planned outage (PO) beyond
         its  estimated  completion  date.  This is  typically  used  where  the
         original  scope of work requires more time to complete than  originally
         scheduled.  Do not use this where unexpected  problems or delays render
         the unit out of service beyond the estimated end date of the PO

----------------------
         (1)  These  event  types  are  all  contributors  to  the  FOR  &  EFOR
calculations in the reports section.

***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

                              Exhibit P: Protocols

         o        ***

***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

                                  EXHIBIT 3.2.9

                       LIST OF REQUIRED FACILITY DOCUMENTS

Interconnection Agreements:

         o        Dispersed    Generating    Company,    LLC's    (assignor    &
                  successor-in-interest of RAMCO) release of assignment of SDG&E
                  Interconnection    Agreement   &   Expedited   Interconnection
                  Facilities Agreement to MMC Chula Vista, LLC. & MMC Escondido,
                  LLC. Dated 4/14/2001.

         o        Historical   notice  to  FERC  -   Expedited   Interconnection
                  Facilities  Agreement  between SDG&E and RAMCO,  Inc..  Covers
                  RAMCO Escondido facility. Dated 4/26/2001.

         o        Historical   notice  to  FERC  -   Expedited   Interconnection
                  Facilities  Agreement  between SDG&E and RAMCO,  Inc..  Covers
                  RAMCO Chula Vista facility. Dated 4/26/2001.

Air Permits:

         o        County of San Diego, Air Pollution Control District "Permit to
                  Operate".  Permit  #976039  covers MMC Chula  Vista,  LLC, and
                  expires February 2007.

         o        County of San Diego, Air Pollution Control District "Permit to
                  Operate".  Permit  #976038  covers  MMC  Escondido,  LLC,  and
                  expires February 2007.

***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

                                  EXHIBIT 6.1

***

***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

                                   EXHIBIT 17

                               REQUIRED INSURANCE

         o        ***.

***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.

<PAGE>

                              Contact List Exhibit

                                       ***

***Confidential  information  has been  omitted  and filed  separately  with the
Securities and Exchange Commission pursuant to a confidential treatment request.EXHIBIT
      10.1

    

    INNOVATIVE
      SOFTWARE TECHNOLOGIES, INC.

    2006
      EQUITY INCENTIVE PLAN

    

     

    1. PURPOSE. 
      The
      Innovative Software Technologies, Inc. 2006 Equity Incentive Plan has two
      complementary purposes: (a) to attract and retain outstanding individuals
      to serve as officers, employees, consultants and advisors to the Company and
      its
      affiliates, and (b) to increase shareholder value. The Plan will provide
      participants incentives to increase shareholder value by offering the
      opportunity to acquire shares of the Company’s common stock, receive monetary
      payments based on the value of such common stock, or receive other incentive
      compensation, on the potentially favorable terms that this Plan provides.

     

    2. EFFECTIVE
      DATE. The
      Plan
      shall become effective, and Awards may be granted on and after, August 9,
      2006.

     

    
      
        3.
          DEFINITIONS.
          Capitalized
          terms used in this Plan have the following meanings: 

      

    

     

    (a) “Affiliate”
      means any entity that, directly or through one or more intermediaries, is
      controlled by, controls, or is under common control with, the Company within
      the
      meaning of Code Sections 414(b) or (c), provided
      that,
      in
      applying such provisions, the phrase “at least 50 percent” shall be used in
      place of “at least 80 percent” each place it appears therein. 

     

    (b) “Award”
      means a grant of Options, Stock Appreciation Rights, Performance Shares,
      Restricted Stock or Restricted Stock Units. 

     

    (c) “Board”
      means the Board of Directors of the Company. 

     

    (d) “Change
      of Control” means the occurrence of any one of the following
      events:

     

    (i) A
      change
      in the ownership of the Company, which shall occur on the date that any one
      person, or more than one person acting as a group (as defined below) acquires
      ownership of the stock of the Company that, together with the stock then held
      by
      such person or group, constitutes more than fifty percent (50%) of the total
      fair market value or total voting power of the stock of the Company. However,
      if
      any one person or more than one person acting as a group is considered to own
      more than fifty (50%) of the total fair market value or total voting power
      of
      the stock of the Company, the acquisition of additional stock by the same person
      or persons is not considered to cause a Change of Control. 

     

    (ii) A
      change
      in the effective control of the Company, which shall occur on the date that:
      

     

    (1) Any
      one
      person, or more than one person acting as a group (as defined below), acquires
      (or has acquired during the twelve month period ending on the date of the most
      recent acquisition by such person or persons) ownership of stock of the Company
      possessing fifty-one percent (51%) or more of the total voting power of the
      stock of the Company. However, if any one person or more than one person acting
      as a group is considered to own more than fifty-one percent (51%) of the total
      voting power of the stock of the Company, the acquisition of additional voting
      stock by the same person or persons is not considered to cause a Change of
      Control; or 

     

    (2) A
      majority of the members of the Board is replaced during any twelve month period
      by directors whose appointment or election is not endorsed by a majority of
      the
      members of the Board prior to the date of the appointment or election.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (iii) A
      change
      in the ownership of a substantial portion of the Company’s assets, which shall
      occur on the date that any one person, or more than one person acting as a
      group
      (as defined below), acquires (or has acquired during the twelve month period
      ending on the date of the most recent acquisition by such person or persons)
      assets from the Company that have a total gross fair market value equal to
      more
      than fifty-one percent (51%) of the total gross fair market value of all the
      assets of the Company immediately prior to such acquisition or acquisitions,
      other than an excluded transaction (as defined below). For purposes of this
      paragraph:

     

    (1) “Gross
      fair market value” means the value of the assets of the Company, or the value of
      the assets being disposed of, as applicable, determined without regard to any
      liabilities associates with such assets.

     

    (2) The
      term
“excluded transaction” means any a transaction in which assets are transferred
      to: (A) a shareholder of the Company (determined immediately before the asset
      transfer) in exchange for or with respect to its stock; (B) an entity, fifty
      percent (50%) or more of the total value or voting power of which is owned,
      directly or indirectly, by the Company (determined after the asset transfer);
      (C) a person, or more than one person acting as a group (as defined above),
      that
      owns, directly or indirectly, fifty percent (50%) or more of the total value
      or
      voting power of all the outstanding stock of the Company (determined after
      the
      asset transfer); or (D) an entity at least fifty percent (50%) of the total
      value or voting power of which is owned, directly or indirectly, by a person
      described in clause (C) (determined after the asset transfer). 

     

    The
      term
“persons acting as a group” as used in this Plan shall not include any persons
      acting as a group solely because they purchase or own stock of the Company
      at
      the same time, or as a result of the same public offering, or because they
      purchase assets at the same time, as applicable. However, persons will be
      considered to be acting as a group if they are owners of an entity that enters
      into a merger, consolidation, purchase or acquisition of stock, or similar
      business transaction with the Company. 

     

    Notwithstanding
      the foregoing, no “Change of Control” shall be deemed to have occurred if there
      is consummated any transaction or series of integrated transactions immediately
      following which the record holders of the common stock of the Company
      immediately prior to such transaction or series of transactions continue to
      have
      substantially the same proportionate ownership in an entity which owns all
      or
      substantially all of the assets of the Company immediately following such
      transaction or series of transactions. 

     

    (e) “Change
      of Control Price” means the higher of: (i) the Fair Market Value of Share,
      as determined on the date of the Change of Control; or a (ii) the highest
      price per Share paid in the Change of Control transaction. 

     

    (f) “Code”
      means the Internal Revenue Code of 1986, as amended. Any reference to a specific
      provision of the Code includes any successor provision and the regulations
      promulgated under such provision. 

     

    (g) “Committee”
      means the Compensation Committee of the Board (or such successor committee
      with
      the same or similar authority). At any time while the Company has a class of
      securities registered under the Securities Exchange Act of 1934, as amended
      (the
“Exchange Act”), then the Committee shall consist of not fewer than two members
      of the Board, each of whom shall qualify (at the time of appointment to the
      committee and during all periods of service on the Committee) in all respects
      as
      a “non-employee director” as defined in Rule 16b-3 under the Exchange Act and as
      an outside director as defined in Section 162(m) of the Code and the regulations
      thereunder.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (h) “Common
      Stock” means the common stock of the Company. 

     

    (i) “Company”
      means Innovative Software Technologies, Inc., a California corporation, or
      any
      successor thereto. 

     

    (j) “Fair
      Market Value” means, per Share on a particular date, the value as determined by
      the Board using a reasonable valuation method, within the meaning of Code
      Section 409A, based on all information in the Company’s possession at such time.
      The reasonable valuation method may take into consideration, as applicable,
      the
      value of tangible and intangible assets of the Company, the present value of
      future cash-flows of the Company, the market value of stock or equity interests
      in similar corporations and other entities engaged in trades or businesses
      substantially similar to those engaged in by the Company (if the market value
      can be readily determined through objective means, such as through trading
      prices on an established securities market), and other relevant factors such
      as
      control premiums or discounts for lack of marketability. The Board may not
      rely
      on a valuation that is more than twelve months old. 

     

    (k) “Option”
      means the right to purchase Shares at a stated price. “Options” may either be
“incentive stock options” which meet the requirements of Code Section 422,
      or “nonqualified stock options” which do not meet the requirements of Code
      Section 422. 

     

    (l) “Participant”
      means an officer or other employee of the Company or its Affiliates, or an
      individual that the Company or an Affiliate has engaged to become an officer
      or
      employee, or a consultant or advisor who provides services to the Company or
      its
      Affiliates, including a non-employee director of the Board, who the Committee
      designates to receive an Award. 

     

    (m) “Performance
      Shares” means the right to receive Shares to the extent the Company or
      Participant achieves certain goals that the Committee establishes over a period
      of time the Committee designates. 

     

    (n) “Plan”
      means this Innovative Software Technologies, Inc. 2006 Equity Incentive Plan,
      as
      amended from time to time. 

     

    (o) “Restricted
      Stock” means Shares that are subject to a risk of forfeiture and/or restrictions
      on transfer, which may lapse upon the achievement or partial achievement of
      performance goals during a specified period and/or upon the completion of a
      period of service, as determined by the Committee. 

     

    (p) “Restricted
      Stock Unit” means the right to receive a Share, or a cash payment the amount of
      which is equal to the Fair Market Value of a Share, which is subject to a risk
      of forfeiture which may lapse upon the achievement or partial achievement of
      performance goals during a specified period and/or upon the completion of a
      period of service, as determined by the Committee.

     

    (q) “Share”
      means a share of Common Stock. 

     

    (r) “Stock
      Appreciation Right” or “SAR” means the right of a Participant to receive cash,
      and/or Shares with a Fair Market Value, equal to the excess of the Fair Market
      Value of a Share over the grant price. 

    (s) “Subsidiary”
      means any corporation in an unbroken chain of corporations beginning with the
      Company if each of the corporations (other than the last corporation in the
      chain) owns stock possessing more than fifty percent (50%) of the total combined
      voting power of all classes of stock in one of the other corporations in the
      chain.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (t) “10%
      Owner-Employee” means an employee who, at the time an incentive stock option is
      granted, owns (directly or indirectly, within the meaning of Code Section
      424(d)) more than ten percent (10%) of the total combined voting power of all
      classes of stock of the Company or of any Subsidiary.

     

    4. ADMINISTRATION.
      

     

    (a) Committee
      Administration.
      The
      Committee has full authority to administer this Plan, including the authority
      to
      (i) interpret the provisions of this Plan, (ii) prescribe, amend and
      rescind rules and regulations relating to this Plan, (iii) correct any
      defect, supply any omission, or reconcile any inconsistency in any Award or
      agreement covering an Award in the manner and to the extent it deems desirable
      to carry this Plan into effect, and (iv) make all other determinations
      necessary or advisable for the administration of this Plan. A majority of the
      members of the Committee will constitute a quorum, and a majority of the
      Committee’s members must make all determinations of the Committee. The Committee
      may make any determination under this Plan without notice or meeting of the
      Committee by a writing that a majority of the Committee members have signed.
      All
      Committee determinations are final and binding. If at any time the Committee
      shall not be in existence, the Board shall administer the Plan and all
      references to the Committee herein shall be deemed to mean the
      Board.

     

    (b) Delegation
      to Other Committees or Officers.
      To the
      extent applicable law permits, the Board may delegate to another committee
      of
      the Board or to one or more officers of the Company any or all of the authority
      and responsibility of the Committee. If the Board has made such a delegation,
      then all references to the Committee in this Plan include such other committee
      or one or more officers to the extent of such delegation. 

     

    (c) No
      Liability.
      No
      member of the Committee, and no officer to whom a delegation under subsection
      (b) has been made, will be liable for any act done, or determination made,
      by the individual in good faith with respect to the Plan or any Award. The
      Company will indemnify and hold harmless such individual to the maximum extent
      that the law and the Company’s bylaws permit. 

     

    5. ELIGIBILITY.
      The
      Committee may designate from time to time the Participants to receive Awards
      under this Plan. The Committee’s designation of a Participant in any year will
      not require the Committee to designate such person to receive an Award in any
      other year. 

     

    6. DISCRETIONARY
      GRANTS OF AWARDS. Subject
      to the terms of this Plan, the Committee has full power and authority to:
      (a) determine the type or types of Awards to be granted to each
      Participant; (b) determine the number of Shares with respect to which an
      Award relates; and (c) determine any terms and conditions of any Award.
      Awards under this Plan may be granted either alone or in addition to, in tandem
      with, or in substitution for any other Award (or any other award granted under
      another plan of the Company or any Affiliate). 

    7. SHARES
      AUTHORIZED UNDER THIS PLAN. 

     

    (a) Plan
      Authorization.
      An
      aggregate of  20
      million (20,000,000) Shares is authorized for issuance under this Plan. However,
      the limitations of this subsection are subject to adjustments as provided in
      Section ‎15.
      

     

    (b) Replenishment
      of Shares Under this Plan.
      If an
      Award lapses, expires, terminates or is cancelled without the issuance of Shares
      or payment of cash under the Award, then the Shares subject to or reserved
      for
      in respect of such Award, or the Shares to which such Award relates, may again
      be used for new Awards under this Plan as determined under subsection (a),
      including issuance pursuant to incentive stock options. If Shares are delivered
      to (or withheld by) the Company in payment of the exercise price or withholding
      taxes of an Award, then such Shares may be used for new Awards under this Plan
      as determined under subsection (a), including issuance pursuant to incentive
      stock options. If Shares are issued under any Award and the Company subsequently
      reacquires them pursuant to rights reserved upon the issuance of the Shares,
      then such Shares may be used for new Awards under this Plan as determined under
      subsection (a), but excluding issuance pursuant to incentive stock
      options.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    8. OPTIONS.
      Subject
      to the terms of this Plan, the Committee will determine all terms and conditions
      of each Option, including but not limited to: 

     

    (a) Whether
      the Option is an incentive stock option or a nonqualified stock option; provided
      that in the case of an incentive stock option, if the aggregate Fair Market
      Value (determined at the time of grant) of the Shares with respect to which
      such
      option and all other incentive stock options issued under this Plan (and under
      all other incentive stock option plans of the Company or any Affiliate that
      is
      required to be included under Code Section 422) are first exercisable by the
      Participant during any calendar year exceeds $100,000, such Option automatically
      shall be treated as a nonqualified stock option to the extent this limit is
      exceeded.

     

    (b) The
      number of Shares subject to the Option.

     

    (c) The
      exercise price per Share, which may not be less than the Fair Market Value
      of a
      Share as determined on the date of grant; provided that an incentive stock
      option granted to a 10% Owner-Employee must have an exercise price that is
      at
      least one hundred ten percent (110%) of the Fair Market Value of a Share on
      the
      date of grant.

     

    (d) The
      terms
      and conditions of exercise.

     

    (e) The
      termination date, except that each Option must terminate no later than the
      tenth
      (10th) anniversary of the date of grant, and each incentive stock option
      granted to any 10% Owner-Employee must terminate no later than the fifth
      (5th)
      anniversary of the date of grant.

     

    In
      all
      other respects, the terms of any incentive stock option should comply with
      the
      provisions of Code Section 422 except to the extent the Committee
      determines otherwise. Upon a Participant’s death, the Option may be exercised by
      the person or persons to whom such Participant’s rights under the Option shall
      pass by will or by applicable law or, if no such person has such rights, by
      his
      executor or administrator. 

     

    9. STOCK
      APPRECIATION RIGHTS. Subject
      to the terms of this Plan, the Committee will determine all terms and conditions
      of each SAR, including but not limited to: 

     

    (a) The
      number of Shares to which the SAR relates.

     

    (b) The
      grant
      price, provided that the grant price shall not be less than the Fair Market
      Value of the Shares subject to the SAR as determined on the date of
      grant.

    (c) The
      terms
      and conditions of exercise or maturity.

     

    (d) The
      term,
      provided that an SAR must terminate no later than the tenth (10th)
      anniversary of the date of grant. 

     

    (e) Whether
      the SAR will be settled in cash, Shares or a combination thereof. 

     

    Upon
      a
      Participant’s death, the SAR may be exercised by the person or persons to whom
      such Participant’s rights under the SAR shall pass by will or by applicable law
      or, if no such person has such rights, by his executor or
      administrator.

    

    10. PERFORMANCE
      SHARE AWARDS. Subject
      to the terms of this Plan, the Committee will determine all terms and conditions
      of each Performance Share Award, including but not limited to: 

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (a) The
      number of Shares to which the Performance Share Award relates.

     

    (b) The
      terms
      and conditions of each Award, including, without limitation, the selection
      of
      the performance goals that must be achieved for the Participant to realize
      all
      or a portion of the benefit provided under the Award. 

     

    (c) Whether
      all or a portion of the Shares subject to the Award will be issued to the
      Participant, without regard to whether the performance goals have been attained,
      in the event of the Participant’s death, disability or retirement or other
      termination of employment.

     

    11. RESTRICTED
      STOCK AND RESTRICTED UNIT AWARDS. Subject
      to the terms of this Plan, the Committee will determine all terms and conditions
      of each award of Restricted Stock or Restricted Stock Units, including but
      not
      limited to: 

     

    (a) The
      number of Shares or Units to which such Award relates. 

     

    (b) The
      period of time over which, and/or the criteria or conditions that must be
      satisfied so that, the risk of forfeiture and/or restrictions on transfer
      imposed on the Restricted Stock or Restricted Stock Units will lapse.

     

    (c) With
      respect to awards of Restricted Stock, the manner of registration of
      certificates for such Shares, and whether to hold such Shares in escrow pending
      lapse of the risk
      of
      forfeiture and/or restrictions
      on transfer or to issue such Shares with an appropriate legend referring to
      such
      restrictions. 

     

    (d) With
      respect to awards of Restricted Stock, whether dividends paid with respect
      to
      such Shares will be immediately paid or held in escrow or otherwise deferred
      and
      whether such dividends shall be subject to the same terms and conditions as
      the
      Award to which they relate. 

     

    (e) With
      respect to awards of Restricted Stock Units, whether to credit dividend
      equivalent units equal to the amount of dividends paid on a Share and whether
      such dividend equivalent units shall be subject to the same terms and conditions
      as the Award to which they relate.

     

    12. TRANSFERABILITY.
      Each
      Award granted under this Plan is not transferable other than by will or the
      laws
      of descent and distribution, except that a Participant may, to the extent the
      Committee allows and in a manner the Committee specifies: (a) designate in
      writing a beneficiary to exercise the Award after the Participant’s death; or
      (b) transfer any award. 

     

    13. TERMINATION
      AND AMENDMENT OF PLAN; AMENDMENT, MODIFICATION OR CANCELLATION OF
      AWARDS.

     

    (a) Term.
      Subject
      to the right of the Board to terminate the Plan pursuant to Section ‎13‎(b),
      the
      Plan shall remain in effect until all Shares subject to it shall have been
      purchased or acquired according to the Plan’s provisions; provided that no
      incentive stock option may be issued under the Plan after the tenth
      (10th)
      anniversary of the Plan’s effective date.

     

    (b) Termination
      and Amendment.
      The
      Board may amend, alter, suspend, discontinue or terminate this Plan at any
      time,
provided
      that shareholders must approve any of the following Plan amendments: (i) an
      amendment to materially increase any number of Shares specified in
      Section 7(a) (except as permitted by Section ‎15)
      or
      expand the class of individuals eligible to receive an Award; or (ii) any
      other amendment if required by applicable law. 

     

    (c) Amendment,
      Modification or Cancellation of Awards.
      Except
      as provided in subsection (e) and subject to the requirements of this Plan,
      the Committee may modify or amend any Award or waive any restrictions or
      conditions applicable to any Award or the exercise of the Award, and the terms
      and conditions applicable to any Awards may at any time be amended, modified
      or
      canceled by mutual agreement between the Committee and the Participant or any
      other persons as may then have an interest in the Agreement, so long as any
      amendment or modification does not increase the number of Shares issuable under
      this Plan (except as permitted by Section ‎15),
      but
      the Committee need not obtain Participant (or other interested party) consent
      for the cancellation of an Award pursuant to the provisions of
      Section ‎15.
      Notwithstanding the foregoing, any such amendment shall be made in a manner
      that
      will enable an Award intended to be exempt from Section 409A of the Code to
      continue to be so exempt, or to enable an Award intended to comply with Section
      409A of the Code to continue to so comply.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (d) Survival
      of Committee Authority and Awards.
      Notwithstanding the foregoing, the authority of the Committee to administer
      this
      Plan and modify or amend an Award may extend beyond the date of this Plan’s
      termination. In addition, termination of this Plan will not affect the rights
      of
      Participants with respect to Awards previously granted to them, and all
      unexpired Awards will continue in force and effect after termination of this
      Plan except as they may lapse or be terminated by their own terms and
      conditions. 

     

    (e) Repricing
      Prohibited.
      Notwithstanding anything in this Plan to the contrary, and except for the
      adjustments provided in Section ‎15,
      neither the Committee nor any other person may decrease the exercise price
      or
      grant price of any Option or SAR nor take any action that would result in a
      deemed decrease of the exercise price or grant price of an Option or SAR under
      Code Section 409A, after the date of grant. 

     

    (f) Foreign
      Participation.
      To
      assure the viability of Awards granted to Participants employed in foreign
      countries, the Committee may provide for such special terms as it may consider
      necessary or appropriate to accommodate differences in local law, tax policy
      or
      custom. Moreover, the Committee may approve such supplements to, or amendments,
      restatements or alternative versions of this Plan as it determines is necessary
      or appropriate for such purposes. Any such amendment, restatement or alternative
      versions that the Committee approves for purposes of using this Plan in a
      foreign country will not affect the terms of this Plan for any other country.
      

     

    14. TAXES. (a) Withholding.
      The
      Company is entitled to withhold the amount of any tax attributable to any amount
      payable or Shares deliverable under this Plan after giving the person entitled
      to receive such amount or Shares notice as far in advance as practicable, and
      the Company may defer making payment or delivery if any such tax may be pending
      unless and until indemnified to its satisfaction. The Committee may permit
      a
      Participant to pay all or a portion of the federal, state and local withholding
      taxes arising in connection with the grant, vesting or payment of an Award,
      by
      electing to (a) have the Company withhold Shares otherwise issuable under
      the Award, or (b) tender back Shares received in connection with such Award
      in each case having a Fair Market Value equal to the amount to be withheld;
      provided
      that
      the
      amount to be withheld may not exceed the total minimum federal, state and local
      tax withholding obligations associated with the transaction. The election must
      be made on or before the date as of which the amount of tax to be withheld
      is
      determined and otherwise as the Committee requires. The Fair Market Value of
      fractional Shares remaining after payment of the withholding taxes may be paid
      to the Participant in cash. The obligations of the Company under the Plan shall
      be conditional on such payment or arrangements, and the Company and any
      Affiliate shall, to the extent permitted by law, have the right to deduct any
      such taxes from any payment otherwise due to the Participant.

     

    (b) No
      Guarantee of Tax Treatment.
      Notwithstanding any provisions of the Plan, the Company does not guarantee
      to
      any Participant or any other Person with an interest in an Award that any Award
      intended to be exempt from Section 409A of the Code shall be so exempt, nor
      that
      any Award intended to comply with Section 409A of the Code shall so comply,
      nor
      will the Company or any Affiliate indemnify, defend or hold harmless any
      individual with respect to the tax consequences of any such failure.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    15. ADJUSTMENT
      PROVISIONS; CHANGE OF CONTROL. 

     

    (a) Adjustment
      of Shares.
      In the
      event that any dividend or other distribution (whether in the form of cash,
      Shares, other securities, or other property), recapitalization, stock split,
      reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
      combination, repurchase, or exchange of Shares or other securities of the
      Company, issuance of warrants or other rights to purchase Shares or other
      securities of the Company, or other similar corporate transaction or event
      affects the Shares, then the Committee shall adjust the Plan or Award to prevent
      dilution or enlargement of the benefits or potential benefits intended to be
      made available under this Plan. In such case, the Committee may, in such manner
      as it may deem equitable, adjust any or all of (i) the number and type of
      Shares subject to this Plan (including the number and type of Shares that may
      be
      issued pursuant to incentive stock options), (ii) the number and type of
      Shares subject to outstanding Awards, (iii) the grant, purchase, or
      exercise price with respect to any Award, and (iv) the performance goals
      established under any Award. In any such case, the Committee may also make
      provision for a cash payment in an amount determined by the Committee to the
      holder of an outstanding Award in exchange for the cancellation of all or a
      portion of the Award (without the consent of the holder of an Award) effective
      at such time as the Committee specifies (which may be the time such transaction
      or event is effective); provided
      that any
      such adjustment to an Award that is exempt from Code Section 409A shall be
      made
      in manner that permits the Award to continue to be so exempt, and any adjustment
      to an Award that is subject to Code Section 409A shall be made in a manner
      that
      complies with the provisions thereof. However, with respect to Awards of
      incentive stock options, no such adjustment may be authorized to the extent
      that
      such authority would cause this Plan to violate Code section 422(b).
      Further, the number of Shares subject to any Award payable or denominated in
      Shares must always be a whole number. Without limitation, subject to
      Participants’ rights under subsection (c), in the event of any reorganization,
      merger, consolidation, combination or other similar corporate transaction or
      event, whether or not constituting a Change of Control, other than any such
      transaction in which the Company is the continuing corporation and in which
      the
      outstanding Common Stock is not being converted into or exchanged for different
      securities, cash or other property, or any combination thereof, the Committee
      may substitute, on an equitable basis as the Committee determines, for each
      Share then subject to an Award, the number and kind of shares of stock, other
      securities, cash or other property to which holders of Common Stock are or
      will
      be entitled in respect of each Share pursuant to the transaction. 

     

    (b) Issuance
      or Assumption.
      Notwithstanding any other provision of this Plan, and without affecting the
      number of Shares otherwise reserved or available under this Plan, in connection
      with any merger, consolidation, acquisition of property or stock, or
      reorganization, the Committee may authorize the issuance or assumption of awards
      upon such terms and conditions as it may deem appropriate. 

     

    (c) Change
      of Control.
      Unless
      provided otherwise by the Committee prior to a Change of Control or unless
      otherwise provided in an individual Award or Award agreement, and subject to
      the
      provisions of subsection (d): 

     

    (i) each
      Option or SAR that is held by a Participant who is employed by the Company
      or an
      Affiliate or who is providing services to the Company or an Affiliate
      immediately prior to the Change of Control shall become fully vested immediately
      prior to the Change of Control, and upon the date of the Change of Control,
      all
      outstanding Options and SARs shall be cancelled in exchange for a payment in
      cash and/or Shares (which may include shares of any surviving or successor
      corporation or the purchasing corporation) equal to the excess of the Change
      of
      Control Price of the Shares covered by the Option or SAR that is so cancelled
      over the exercise or grant price of such Shares under the Award; 

     

    (ii) Restricted
      Stock and Restricted Stock Units that are not then vested shall vest immediately
      prior to the date of the Change of Control; 

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (iii) each
      Performance Share Award for which the performance period has not expired shall
      be cancelled in exchange for a payment in cash and/or Shares (which may include
      shares of any surviving or successor corporation or the purchasing corporation)
      equal to the product of the value of the Performance Shares (assuming the target
      performance goals were met) and a fraction the numerator of which is the number
      of whole months which have elapsed from the beginning of the performance period
      to the date of the Change of Control and the denominator of which is the number
      of whole months in the performance period; and

     

    (iv) each
      holder of a Performance Share that has been earned but not yet paid shall
      receive a payment in cash /or Shares (which may include shares of any surviving
      or successor corporation or the purchasing corporation) equal to the value
      of
      the Performance Shares earned.

     

    For
      purposes of this Section ‎15,
      the
“value” of a Performance Share shall be based on the Change of Control Price.

    

    (d) Parachute
      Payment Limitation.
      

     

    (i) Except
      as
      may be set forth in a written agreement by and between the Company and the
      holder of an Award, in the event that the Company’s auditors determine that any
      payment or transfer by the Company under the Plan to or for the benefit of
      a
      Participant (a “Payment”) would be nondeductible by the Company for federal
      income tax purposes because of the provisions concerning “excess parachute
      payments” in Code Section 280G, then the aggregate present value of all
      Payments shall be reduced (but not below zero) to the Reduced Amount. For
      purposes of this Section 15(d), the “Reduced Amount” shall be the amount,
      expressed as a present value, which maximizes the aggregate present value of
      the
      Payments without causing any Payment to be nondeductible by the Company because
      of Code Section 280G.

     

    (ii) If
      the
      Company’s auditors determine that any Payment would be nondeductible by the
      Company because of Code Section 280G, then the Company shall promptly give
      the Participant notice to that effect and a copy of the detailed calculation
      thereof and of the Reduced Amount, and the Participant may then elect, in his
      or
      her sole discretion, which and how much of the Payments shall be eliminated
      or
      reduced (as long as after such election the aggregate present value of the
      Payments equals the Reduced Amount) and shall advise the Company in writing
      of
      his or her election within ten (10) days of receipt of notice. If no such
      election is made by the Participant within such ten (10) day period, then the
      Company may elect which and how much of the Payments shall be eliminated or
      reduced (as long as after such election the aggregate present value of the
      Payments equals the Reduced Amount) and shall notify the Participant promptly
      of
      such election. For purposes of this Section 15(d), present value shall be
      determined in accordance with Code Section 280G(d)(4). All determinations
      made by the Company’s auditors under this Section 15(d) shall be binding
      upon the Company and the Participant and shall be made within sixty (60) days
      of
      the date when a Payment becomes payable or transferable. As promptly as
      practicable following such determination and the elections hereunder, the
      Company shall pay or transfer to or for the benefit of the Participant such
      amounts as are then due to him or her under the Plan and shall promptly pay
      or
      transfer to or for the benefit of the Participant in the future such amounts
      as
      become due to him or her under the Plan.

     

    (iii) As
      a
      result of uncertainty in the application of Code Section 280G at the time
      of an initial determination by the Company’s auditors hereunder, it is possible
      that Payments will have been made by the Company that should not have been
      made
      (an “Overpayment”) or that additional Payments that will not have been made by
      the Company could have been made (an “Underpayment”), consistent in each case
      with the calculation of the Reduced Amount hereunder. In the event that the
      Company’s auditors, based upon the assertion of a deficiency by the Internal
      Revenue Service against the Company or the Participant that the auditors believe
      has a high probability of success, determine that an Overpayment has been made,
      such Overpayment shall be treated for all purposes as a loan to the Participant
      which he or she shall repay to the Company, together with interest at the
      applicable federal rate provided in Code Section 7872(f)(2); provided,
      however, that no amount shall be payable by the Participant to the Company
      if
      and to the extent that such payment would not reduce the amount subject to
      taxation under Code Section 4999. In the event that the auditors determine
      that an Underpayment has occurred, such Underpayment shall promptly be paid
      or
      transferred by the Company to or for the benefit of the Participant, together
      with interest at the applicable federal rate provided in Code
      Section 7872(f)(2).

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (iv) For
      purposes of this Section 15(d), the term “Company” shall include affiliated
      corporations to the extent determined by the Auditors in accordance with Code
      Section 280G(d)(5).

     

    16. MISCELLANEOUS.
      

     

    (a) Other
      Terms and Conditions.
      The
      grant of any Award under this Plan may also be subject to other provisions
      (whether or not applicable to the Award awarded to any other Participant) as
      the
      Committee determines appropriate, including, without limitation, provisions
      for:

     

    (i) the
      payment of the purchase price of Options by delivery of cash or other Shares
      or
      other securities of the Company (including by attestation) having a then Fair
      Market Value equal to the purchase price of such Shares, or by delivery
      (including by fax) to the Company or its designated agent, of an executed
      irrevocable option exercise form together with irrevocable instructions to
      a
      broker-dealer to sell or margin a sufficient portion of the Shares and deliver
      the sale or margin loan proceeds directly to the Company to pay for the exercise
      price; 

     

    (ii) provisions
      giving the Participant the right to receive dividend payments or dividend
      equivalent payments with respect to the Shares subject to the Award (both before
      and after the Shares subject to the Award are earned, vested or acquired),
      which
      payments may be either made currently or credited to an account for the
      Participant, and may be settled in cash or Shares, as the Committee determines;
      

     

    (iii) restrictions
      on resale or other disposition, including requiring the Participant (or other
      interested party) to execute a stockholder’s agreement in such form and subject
      to such terms as the Company may prescribe; and 

     

    (iv) compliance
      with federal or state securities laws and stock exchange requirements.

     

    (b) Code
      Section 409A.
      The
      provisions of Section 409A of the Code are incorporated herein by reference
      to
      the extent necessary for any Award that is subject to Section 409A of the Code
      to comply therewith. 

     

    (c) Employment
      or Service.
      The
      issuance of an Award shall not confer upon a Participant any right with respect
      to continued employment or service with the Company or any Affiliate, or the
      right to continue as a consultant or director. Unless determined otherwise
      by
      the Committee, for purposes of the Plan and all Awards, the following rules
      shall apply:

     

    (i) a
      Participant who transfers employment between the Company and any Affiliate,
      or
      between Affiliates, will not be considered to have terminated
      employment;

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (ii) a
      Participant who ceases to be a non-employee director because he or she becomes
      an employee of the Company or an Affiliate shall not be considered to have
      ceased service as a director with respect to any Award until such Participant’s
      termination of employment with the Company and its Affiliates; 

     

    (iii) a
      Participant who ceases to be employed by the Company or an Affiliate of the
      Company and immediately thereafter becomes a non-employee director of the
      Company or any Affiliate, or a consultant to the Company or any Affiliate shall
      not be considered to have terminated employment until such Participant’s service
      as a director of, or consultant to, the Company and its Affiliates has ceased;
      and

     

    (iv) a
      Participant employed by an Affiliate of the Company will be considered to have
      terminated employment when such entity ceases to be an Affiliate of the Company.
      

     

    Notwithstanding
      the foregoing, with respect to an Award subject to Code Section 409A, a
      Participant shall be considered to have terminated employment upon the date
      of
      his separation from service within the meaning of Code Section 409A.

    

    (d) No
      Fractional Shares.
      No
      fractional Shares or other securities may be issued or delivered pursuant to
      this Plan, and the Committee may determine whether cash, other securities or
      other property will be paid or transferred in lieu of any fractional Shares
      or
      other securities, or whether such fractional Shares or other securities or
      any
      rights to fractional Shares or other securities will be canceled, terminated
      or
      otherwise eliminated. 

     

    (e) Unfunded
      Plan.
      This
      Plan is unfunded and does not create, and should not be construed to create,
      a
      trust or separate fund with respect to this Plan’s benefits. This Plan does not
      establish any fiduciary relationship between the Company and any Participant.
      To
      the extent any person holds any rights by virtue of an Award granted under
      this
      Plan, such rights are no greater than the rights of the Company’s general
      unsecured creditors. 

     

    (f) Requirements
      of Law.
      The
      granting of Awards under this Plan and the issuance of Shares in connection
      with
      an Award are subject to all applicable laws, rules and regulations and to such
      approvals by any governmental agencies or national securities exchanges as
      may
      be required. Notwithstanding any other provision of this Plan or any Award
      agreement, the Company has no liability to deliver any Shares under this Plan
      or
      make any payment unless such delivery or payment would comply with all
      applicable laws and the applicable requirements of any securities exchange
      or
      similar entity. (Becoming C Corp) In such event, the Company may substitute
      cash
      for any Share(s)otherwise deliverable hereunder without the consent of the
      Participant or any other person. 

    (g) Governing
      Law.
      This
      Plan, and all agreements under this Plan, shall be construed in accordance
      with
      and governed by the laws of the State of Florida, without reference to any
      conflict of law principles. Any legal action or proceeding with respect to
      this
      Plan, any Award or any Award agreement, or for recognition and enforcement
      of
      any judgment in respect of this Plan, any Award or any Award agreement, may
      only
      be brought and determined in the state or federal courts sitting in West Palm
      Beach or Broward Counties, Florida.

     

    (h) Limitations
      on Actions.
      Any
      legal action or proceeding with respect to this Plan, any Award or any Award
      agreement, must be brought within one year (365 days) after the day the
      complaining party first knew or should have known of the events giving rise
      to
      the complaint. 

     

    (i) Construction.
      Whenever any words are used herein in the masculine, they shall be construed
      as
      though they were used in the feminine in all cases where they would so apply;
      and wherever any words are used in the singular or plural, they shall be
      construed as though they were used in the plural or singular, as the case may
      be, in all cases where they would so apply. Title of sections are for general
      information only, and the Plan is not to be construed with reference to such
      titles.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (j) Severability.
      If any
      provision of this Plan or any Award agreement or any Award (i) is or
      becomes or is deemed to be invalid, illegal or unenforceable in any
      jurisdiction, or as to any person or Award, or (ii) would disqualify this
      Plan, any award agreement or any Award under any law the Committee deems
      applicable, then such provision should be construed or deemed amended to conform
      to applicable laws, or if it cannot be so construed or deemed amended without,
      in the determination of the Committee, materially altering the intent of this
      Plan, Award agreement or Award, then such provision should be stricken as to
      such jurisdiction, person or Award, and the remainder of this Plan, such Award
      agreement and such Award will remain in full force and effect. 

    

    
      
         

      

      
        12

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