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Confidential Information

HOUSTON/28557.2

GAS TURBINE GENERATOR

PURCHASE AND SALE AGREEMENT

BETWEEN

EL PASO POWER PURCHASING, L.P.

AND

[BUYER]

DATED _________, 2005


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TABLE OF CONTENTSPage

ARTICLE I DEFINITIONS.................................................................................................................................1

1.1 CERTAIN DEFINITIONS ...................................................................................................................................1

ARTICLE II PURCHASE AND SALE OF ASSETS ..........................................................................................5

2.1 PURCHASE AND SALE OF ASSETS ...................................................................................................................52.2 ASSUMPTION OF GE EQUIPMENT CONTRACT. .................................................................................................52.3 DOCUMENTS TO BE DELIVERED BY SELLER....................................................................................................62.4 DOCUMENTS TO BE DELIVERED BY BUYER .....................................................................................................62.5 CLOSING .......................................................................................................................................................6

ARTICLE III PAYMENTS..................................................................................................................................6

ARTICLE IV TITLE, RISK OF LOSS AND DELIVERY..................................................................................7

4.1 TITLE; RISK OF LOSS .....................................................................................................................................74.2 IDENTIFICATION OF EQUIPMENT .....................................................................................................................74.3 BUYER STORAGE FACILITY SUBLEASE ...........................................................................................................7

ARTICLE V INDEMNIFICATION.....................................................................................................................7

5.1 INDEMNIFICATION BY BUYER.........................................................................................................................75.2 INDEMNIFICATION BY SELLER ........................................................................................................................85.3 ENVIRONMENTAL INDEMNITY........................................................................................................................85.4 LIMITATION OF LIABILITY .............................................................................................................................85.5 INDEMNIFICATION NOTICE.............................................................................................................................85.6 INDEMNIFICATION PROCEDURE ......................................................................................................................95.7 SETTLEMENT OF INDEMNITY CLAIMS .............................................................................................................95.8 EXCLUSIVE REMEDY ...................................................................................................................................10

ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLER......................................................10

6.1 ORGANIZATION AND GOOD STANDING .........................................................................................................106.2 AUTHORIZATION OF AGREEMENT.................................................................................................................106.3 NO VIOLATION; CONSENTS..........................................................................................................................106.4 GE EQUIPMENT CONTRACT .........................................................................................................................116.5 LITIGATION .................................................................................................................................................116.6 TITLE TO THE EQUIPMENT............................................................................................................................116.7 PREFERENTIAL RIGHTS ................................................................................................................................116.8 FINANCIAL ADVISORS .................................................................................................................................11

ARTICLE VII REPRESENTATIONS AND WARRANTIES OF BUYER......................................................11

7.1 ORGANIZATION AND GOOD STANDING .........................................................................................................117.2 AUTHORIZATION OF AGREEMENT.................................................................................................................117.3 NO VIOLATION; CONSENTS..........................................................................................................................127.4 LITIGATION .................................................................................................................................................127.5 FINANCIAL CAPABILITY...............................................................................................................................127.6 FINANCIAL ADVISORS .................................................................................................................................12

ARTICLE VIII OTHER COVENANTS............................................................................................................13

8.1 PRESERVATION OF RECORDS; COOPERATION ................................................................................................138.2 PUBLIC ANNOUNCEMENTS ...........................................................................................................................138.3 FURTHER ASSURANCES ...............................................................................................................................13

ARTICLE IX TAXES.........................................................................................................................................13

9.1 PERSONAL PROPERTY TAXES .......................................................................................................................13


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9.2 SALES AND OTHER TRANSFER TAXES...........................................................................................................13

ARTICLE X LIMITATIONS.............................................................................................................................14

10.1 BUYER’S REVIEW ......................................................................................................................................1410.2 LIMITATION OF REPRESENTATIONS AND WARRANTIES ..............................................................1410.3 NO CONSEQUENTIAL OR PUNITIVE DAMAGES ...............................................................................1510.4 NO RECOURSE...........................................................................................................................................15

ARTICLE XI MISCELLANEOUS....................................................................................................................15

11.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS .......................................................1511.2 EXPENSES .................................................................................................................................................1511.3 INCORPORATION OF EXHIBITS ....................................................................................................................1611.4 DISPUTE RESOLUTION ...............................................................................................................................1611.5 NO RIGHT OF SET-OFF...............................................................................................................................1611.6 TIME OF ESSENCE ......................................................................................................................................1611.7 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS ...................................................................................1611.8 GOVERNING LAW ......................................................................................................................................1711.9 HEADINGS.................................................................................................................................................1711.10 NOTICES .................................................................................................................................................1711.11 SEVERABILITY.........................................................................................................................................1811.12 BINDING EFFECT; ASSIGNMENT ...............................................................................................................1811.13 COUNTERPARTS.......................................................................................................................................18

SCHEDULE OF EXHIBITS

SCHEDULE 1 – Equipment List

SCHEDULE 2 – Excluded Equipment

EXHIBIT A – Form of Equipment Bill of Sale

EXHIBIT B – GE Assignment, Assumption and Release Agreement

EXHIBIT C – Buyer Storage Facility Sublease


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GAS TURBINE GENERATORS PURCHASE AND SALE AGREEMENT

This GAS TURBINE GENERATORS PURCHASE AND SALE AGREEMENT, dated as of ___________, 2005 (this “Agreement”), is made and entered into by and between El Paso Power Purchasing, L.P., a Delaware limited partnership (“Seller”) and [BUYER] (“Buyer”).

W I T N E S S E T H:

WHEREAS, Seller (as successor in interest to EPED B Company) and GE are parties to the GE Equipment Contract under which GE sold the Equipment (as such terms are defined herein);

WHEREAS, Seller and GE have agreed to amend and restate in its entirety the Amended and Restated GE Equipment Contract by bifurcating the Amended and Restated Equipment Contract into (i) the GE Equipment Contract with respect to the Equipment, and (ii) the Excluded GE Equipment Contract with respect to the Excluded Equipment;

WHEREAS, Seller desires to sell and assign to Buyer, and Buyer desires to purchase and assume from Seller, the Equipment (as defined herein) pursuant to the terms and conditions of this Agreement; and

WHEREAS, Seller desires assign to Buyer the GE Equipment Contract and Buyer desires to assume from Seller the GE Equipment Contract.

NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE IDEFINITIONS

1.1 Certain Definitions. For purposes of this Agreement, the following terms have the meanings specified in this Section 1.1:

“Action” means any action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority of any nature whether civil, criminal, regulatory or otherwise, at law or in equity.

“Affiliate” means, with respect to any Person, any other Person that directly, or through one or more intermediaries, controls or is controlled by or is under common control with such first Person. As used in this definition, “control” (including with correlative meanings, “controlled by” and “under common control with”) means possession, directly or indirectly, of power (i) to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), (ii) to vote fifty percent (50%) or more of the total combined voting power of such Person, or (iii) to direct the voting of sufficient securities to elect at least 50% of the board of directors or similar governing body of such Person.


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“Agreement” means this Gas Turbine Generator Purchase and Sale Agreement, executed on the date first set forth above.

“Amended and Restated GE Equipment Contract” means the Contract for Sale of Equipment & Services, contract number 91600, for the Equipment and the Excluded Equipment, entered into by and between Seller (as successor in interest to EPED B Company) and GE, dated as of September 28, 2000, as amended and restated in August 2005 (which shall be bifurcated in its entirety into two separate contracts, the GE Equipment Contract and the Excluded GE Equipment Contract).

“Applicable Law(s)” means, with respect to any Person, any Law applicable to such Person or its business, properties or assets.

“Assets” means all of Seller’s right, title and interest in and to the Equipment and the Records.

“Bill of Sale” means that bill of sale to be executed by the Parties at the Closing, substantially in the form attached hereto as Exhibit A.

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in Houston, Texas are authorized or required by Law to close. Any event the scheduled occurrence of which would fall on a day that is not a Business Day shall be deferred until the next succeeding Business Day.

“Buyer” means [BUYER]. “Buyer Storage Facility Sublease” means that certain sublease agreement to be

entered into between Buyer and Seller, substantially in the form attached hereto as Exhibit C, under which Buyer is to sublease from Seller certain space at the Storage Facility on which the Equipment is being stored for a maximum of three months at the rate of $10,000 per month.

“Claim” means any demand, obligation, liability, action, claim (including, but not limited to, any claim for damage to property or injury to or death of any persons), cause of action, chose in action, right of recovery or right of set-off of whatever kind.

“Closing” means the closing of the purchase and sale of the Assets as contemplated by this Agreement.

“Closing Date” means the date this Agreement is executed by the parties, or at such other time as agreed in writing by the parties.

“Confidentiality Agreement” means, collectively, the Confidentiality Agreement between Seller and Buyer, dated [_________], 2005.

“Environmental Law(s)” means all Applicable Laws in effect on the date hereof, relating to the protection of health or the environment, natural resources or the protection thereof, including but not limited to any applicable provisions of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136 et seq., and the


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Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq., including the regulations promulgated pursuant thereto, and all analogous state or local statutes and regulations.

“Environmental Liabilities and Obligations” means all Liabilities arising from any impairment or damage to the environment or failure to comply with Environmental Laws in connection with the ownership or operation of the Assets including, without limitation, Liabilities related to:

(a) the transportation, storage, use or disposal of Hazardous Materials or waste;

(b) the Release of Hazardous Materials or waste;

(c) any other pollution or contamination of the surface, substrata, soil, air, ground water, surface water or marine environments;

(d) any other obligations imposed under Environmental Laws with respect to the Assets; and

(e) all obligations with respect to personal injury, property damages, wrongful death and other damages and losses arising under Applicable Law as a result of any of the matters identified in subparagraphs (a) – (d) of this paragraph.

“Equipment” means one (1) PG7121EA gas turbine generator set, serial number298064 for the gas turbine and serial number 336X961 for the generator, shipped to Seller (or its predecessor-in-interest) and such other associated equipment located at the Storage Facility on the Closing Date, as set forth in Schedule I hereto.

“Excluded Equipment” means two (2) PG7121EA gas turbine generator sets(serial numbers 298062 and 298063 for the gas turbines and serial numbers 336X959 and 336X960 for the generators, respectively), shipped to Seller (or its predecessor in interest) pursuant to the Amended and Restated GE Equipment Contract and as further identified in the Excluded GE Equipment Contract, and the associated equipment, as further described and listed on Schedule II.

“Excluded GE Equipment Contract” means that certain Amended and Restated Contract for the Purchase and Sale of Equipment and Services to be entered into prior to Closing by and between Seller (as successor in interest to EPED B) and GE relating to the Excluded Equipment.

“GE” means General Electric International, Inc, a Delaware corporation.“GE Assignment, Assumption and Release Agreement” means that certain

assignment, assumption and release agreement to be executed by the Parties and GE, substantially in the form attached hereto as Exhibit B.

“GE Equipment Contract” means that certain Amended and Restated Contract for Sale of Equipment & Services, to be entered into prior to Closing by and between Seller (as successor in interest to EPED B) and GE relating to the Equipment.


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“Governmental Authority” means any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any governmental authority, agency, department, board, commission or instrumentality of a governmental entity or any political subdivision thereof, and any tribunal, court or arbitrator(s) of competent jurisdiction.

“Hazardous Materials” means all substances defined as “hazardous substances,” “hazardous wastes,” “hazardous materials,” “pollutants,” “toxic wastes,” “toxic substances” or “contaminants” or regulated under Environmental Laws.

“Landlord” means J. Supor & Son Trucking & Rigging Co., Inc.“Law” means any federal, state or local law (including common law), statute,

code, ordinance, rule, regulation, or other requirement enacted, promulgated, issued or entered by a Governmental Authority.

“Liabilities” means any and all debts, losses, liabilities, damages, expenses, awards, judgments, settlement payments, fines, costs, royalties, proceedings, deficiencies or obligations (including, without limitation, those arising out of any Action or Claim, such as any settlement or compromise thereof or judgment or award therein), of any nature, whether known or unknown, absolute, accrued, contingent or otherwise and whether due or to become due, and whether or not resulting from third party claims, and any reasonable out-of-pocket costs and expenses (including reasonable legal counsels’, accountants’, or other fees and expenses incurred in defending any Action or Claim or in investigating any of the same or in asserting any rights hereunder), but not including consequential, exemplary, special and punitive damages and lost profits.

“Lien” means any lien, pledge, security interest, lease, charge, option, right of first refusal or transfer restriction under any shareholder or similar agreement or encumbrance.

“Order” means any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award.

“Party” or “Parties” mean any or all signatories to this Agreement, respectively.“Permitted Liens” means Liens securing payment to materialmen, warehouse,

storage, mechanics, repairmen, employees, contractors, operators, royalty owners and taxing authorities or the Landlord and other similar Liens or charges relating to any of the Assets to the extent any of the foregoing arise as a result of any inspection, work, survey or services performed at the request of Buyer, or any of its Affiliates, contractors or agents, including, without limitation, any inspection or analysis performed on the Equipment by GE.

“Person” means and includes natural persons, corporations, limited partnerships, limited liability companies, general partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, business trusts or other organizations, whether or not legal entities, and all Governmental Authorities.

“Personal Property Taxes” means any ad valorem Taxes or personal property Taxes due or payable as a result of the ownership of the Assets.

“Purchase Price” means ($___________).


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“Records” means the original copy (to extent available, or then otherwise copies) of Seller’s drawings and manuals in the possession of Seller which were provided by GE under the GE Equipment Contract for use in connection with the Equipment.

“Release” means any release, spill, emission, discharge, leaking, pumping, injection, deposit or disposal of Hazardous Materials into the environment.

“Seller” means El Paso Power Purchasing, L.P.

“Seller’s knowledge” or “to the knowledge of Seller” means the actual knowledge of the current employees of Seller or its Affiliates directly and actively engaged in the negotiation of the GE Equipment Contract or the operation, maintenance or storage of the Assets.

“Storage Facility” means the warehouse storage facility located in Harrison, New Jersey, at which the Equipment is being stored by Seller, as further identified in the Buyer Storage Sublease.

“Tax” means all federal, state, provincial, territorial, municipal, local or foreign income, profits, franchise, gross receipts, environmental (including taxes under Internal Revenue Code § 59A), customs, duties, net worth, sales, use, goods and services, withholding, value added, ad valorem, employment, social security, disability, occupation, pension, real property, personal property (tangible and intangible), stamp, transfer, conveyance, severance, production, excise and other taxes, withholdings, duties, levies, imposts and other similar charges and assessments (including any and all fines, penalties and additions attributable to or otherwise imposed on or with respect to any such taxes, charges, fees, levies or other assessments, and interest thereon) imposed by or on behalf of any Governmental Authority, in each case whether such Tax arises by law, contract or otherwise.

“Transaction Documents” means this Agreement, the Bill of Sale, the GE Assignment, Assumption and Release Agreement, and the Buyer Storage Facility Sublease.

ARTICLE IIPURCHASE AND SALE OF ASSETS

2.1 Purchase and Sale of Assets. Subject to the terms and conditions contained herein, at the Closing Seller shall sell, assign, transfer and convey to Buyer, and Buyer shall purchase, accept and receive from Seller, all of Seller’s right, title and interest in and to the Assets; provided that Seller may retain a copy of any Records. The Assets shall not include any items that are inextricably intertwined among the Equipment and the Excluded Equipment (the “Shared Components”); all such items shall be deemed Excluded Equipment for the purposes of this Agreement.

2.2 Assumption of GE Equipment Contract. Seller will use its commercially reasonable efforts to assist Buyer in obtaining GE’s consent to the assignment of the GE Equipment Contract to Buyer. At the Closing, Buyer shall assume and agree to be responsible for, all Liabilities of Seller accruing or otherwise arising under the GE Equipment Contract or in connection with the Equipment after the Closing Date. Notwithstanding anything in this Agreement to the contrary, Seller makes no representation or warranty that GE will counter sign and deliver the GE Assignment, Assumption and Release Agreement. Seller’s sole obligation with respect to such agreement and assignment thereof to Buyer shall be to comply with Section 2.3(a). If Buyer has not obtained GE’s counter-signature on the GE


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Assignment, Assumption and Release Agreement or otherwise obtained GE’s consent to the assignment and assumption of the GE Equipment Contract within ninety (90) days of the Closing Date, Seller may unilaterally terminate such agreement without any liability to Buyer whatsoever.

2.3 Documents to Be Delivered by Seller. At the Closing, Seller shall deliver, or cause to be delivered, to Buyer the following:

(a) the GE Assignment, Assumption and Release Agreement duly executed and delivered by Seller, effective as of the Closing Date;

(b) the Bill of Sale and such other instruments of conveyance reasonably necessary for the transfer of the Assets, duly executed by Seller;

(c) the Buyer Storage Facility Sublease duly executed and delivered by Seller, effective as of the Closing Date; and

(d) the GE Equipment Contract, duly executed by GE and Seller.

2.4 Documents to be Delivered by Buyer. At the Closing, Buyer shall deliver to Seller the following:

(a) the amount of the Purchase Price as provided in Article III;

(b) the GE Assignment, Assumption and Release Agreement duly executed and delivered by Buyer, effective as of the Closing Date;

(c) the Bill of Sale and such other instruments of conveyance reasonably necessary for the transfer of the Assets, duly executed by Buyer; and

(d) the Buyer Storage Facility Sublease duly executed and delivered by Buyer, effective as of the Closing Date.

2.5 Closing. The Closing shall take place at the offices of Seller at 10:00 a.m. Houston time on the Closing Date.

ARTICLE IIIPAYMENTS

At the Closing, Buyer shall pay to Seller the amount of the Purchase Price, in immediately available funds in U.S. dollars to the following account:

Bank: Mellon Bank Pittsburgh, PA

Acct Name: El Paso Energy International Acct #: 035-5215 ABA#: 043000261


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ARTICLE IVTITLE, RISK OF LOSS AND DELIVERY

4.1 Title; Risk of Loss. Title to and risk of loss of the Assets shall remain with Seller until, and shall pass to Buyer upon, the Closing.

4.2 Identification of Equipment. Seller makes no representation or warranty regarding the kind, character or quantity of the Equipment. Notwithstanding anything in this Agreement to the contrary, the Equipment shall be limited to those items actually located at the Storage Facility and owned by Seller. After the Closing, Buyer, at its cost, shall engage GE to identify the crates and storage containers at the Storage Facility that GE reasonably believes include only the Equipment and none of the Excluded Equipment. As soon as possible following the Closing, Buyer, at its cost, shall further engage GE to identify the additional items of Equipment that are commingled with Excluded Equipment in crates and storage containers at the Storage Facility. Buyer shall provide Seller at least five (5) Business Days notice prior to the date on which such work is to be conducted by GE and Seller shall have the right to participate in and witness such work; provided that GE may proceed with such work on the scheduled date in the absence of Seller’s representatives only if such notice is timely given. Seller and Buyer shall each have the right to take reasonable steps to verify the identification of the Equipment. In the event of any dispute as to whether an item is Equipment or Excluded Equipment, such dispute shall be referred to GE to determine whether the item in dispute wasoriginally intended as part of the PG7121EA gas turbine generator included in the Equipment as shipped by GE under the Amended and Restated GE Contract. If such item in dispute is determined by GE to be part of the PG7121EA gas turbine generator that is part of the Equipment, such item shall be included in the Equipment; otherwise, such item shall be part of the Excluded Equipment. All shared systems and special tools shall be Excluded Equipment. All consumables and fungible products such as piping or cabling shall be Excluded Equipmentunless specifically packaged and labeled as belonging with the Equipment..

4.3 Buyer Storage Facility Sublease. On and after the Closing Date, Seller shall have no responsibility for the Equipment and Purchaser assumes all liability associated with the same in accordance with the Buyer Storage Facility Sublease.

ARTICLE VINDEMNIFICATION

5.1 Indemnification by Buyer. Buyer agrees to defend, indemnify and hold harmless Seller, its Affiliates, successors, assigns, and their officers, directors, agents, employees and representatives from all Liabilities (i) for any damage or destruction to the Equipment or Claim by a third party imposed upon, incurred by, or asserted against Seller for bodily injuries, death and property loss or damage, in each case to the extent caused by, or attributable to, Buyer and/or Buyer’s agents’, representatives’ or contractors’ actions, omissions or negligence or presence at the Storage Facilities, (ii) arising out of, relating to, resulting from or in connection with any site change study, equipment survey or any other inspection or testing of the Equipment conducted by Buyer, including any survey inspection or test conducted on behalf of or for the benefit of Buyer or any of its Affiliates; (iii) from any broker, sales agent, financial advisor or other third party claiming any fee, commission or like payment by, through, on account of or on behalf of Buyer, resulting from the sale of the Equipment and (iv) from and after the Closing,


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arising out of, relating to, resulting from or in connection with (1) any material misrepresentation or breach of any material warranty or representation given by Buyer in this Agreement or material breach of any material covenant or agreement made by Buyer in this Agreement, (2) any of the Liabilities relating to the Equipment, (3) the storage, transportation or use of any of the Equipment after the Closing, (4) arising out of, relating to, resulting from or in connection with the Buyer Storage Sublease and (5) arising out of, relating to, resulting from or in connection with the GE Equipment Contract.

5.2 Indemnification by Seller. From and after the Closing, Seller agrees to defend, indemnify and hold harmless Buyer, its Affiliates, successors, assigns, and their officers, directors, agents, employees and representatives from all Liabilities arising out of, relating to, or resulting from or in connection with any material misrepresentation or breach of any material warranty or representation given by Seller in this Agreement or material breach of any material covenant or agreement made by Seller in this Agreement.

5.3 Environmental Indemnity. Buyer shall indemnify, defend and hold harmless Seller and its Affiliates, and their respective agents, directors, shareholders, partners, employees, officers, consultants, representatives, attorneys, successors and assigns, from and against any and all Claims arising from or incident to any Environmental Liabilities and Obligations with respect to or relating to events concerning or relating to the Equipment that occur or accrue after the Closing.

5.4 Limitation of Liability. To the maximum extent allowed by law, Seller’s total liability to Buyer, on all claims of any kind, whether in contract, warranty, tort (including negligence), strict liability, indemnity, or otherwise, arising out of the performance or breach of the Agreement shall not exceed an amount equal to 25% the Purchase Price, other than claims arising from a breach by Seller of its representations contained in Section 6.6 in which event such total liability shall not exceed the amount of the Purchase Price.

5.5 Indemnification Notice. If any Party (or its Affiliates or its or their respective agents, directors, shareholders, partners, employees, officers, consultants, representatives, attorneys, successors or assigns) (an “Indemnified Party”) entitled to or seeking indemnification hereunder (a) determines that any event, occurrence, fact, condition or claim has given or could reasonably be expected to give rise to Liabilities which such Indemnified Party is or may be entitled to, or may seek, indemnification under this Agreement, or (b) otherwise identifies an event, occurrence, fact, condition or Claim giving rise (or which may give rise) to a right of indemnification hereunder in favor of such Indemnified Party (any of the foregoing, an “Indemnity Claim”), such Indemnified Party shall promptly notify the Party obligated to provide indemnification or from whom indemnification is being or will be sought (the “Indemnifying Party”) in writing of such Indemnity Claim (a “Claim Notice”) describing in reasonable detail the facts giving rise to the claim for indemnification hereunder and shall include in such Claim Notice (if then known) the amount or the method of computation of the amount of such Liability; provided, however, the failure of any Indemnified Party to give timely notice thereof shall not affect any of its rights to indemnification hereunder nor relieve the Indemnifying Party from any of its indemnification obligations hereunder, except to the extent the Indemnifying Party is materially prejudiced by such failure.


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5.6 Indemnification Procedure. Any obligation to provide indemnification hereunder with respect to any Action at law or in equity by or against any third party, including any Governmental Authority (a “Third Party Claim”), shall be subject to the following terms and conditions:

(a) Upon receipt of a Claim Notice in respect of any such Third Party Claim, the Indemnifying Party shall, at its cost and expense and upon notice to the Indemnified Party within thirty (30) days of its receipt of such Claim Notice, assume and control the defense, compromise, settlement and investigation of such Indemnity Claim, including the management of any proceeding relating thereto, and shall employ and engage counsel reasonably acceptable to the Indemnified Party; provided, however, that if there exists a material conflict of interest (other than one of a monetary nature) or if the Indemnified Party has been advised by counsel that there may be one or more legal or equitable defenses available to it that are different from or additional to those available to the Indemnifying Party, which, in either case, would make it inappropriate for the same counsel to represent both the Indemnifying Party and the Indemnified Party, then the Indemnified Party shall be entitled to retain its own counsel at the cost and expense of the Indemnifying Party (except that the Indemnifying Party shall not be obligated to pay the fees and expenses of more than one separate counsel, other than local counsel, for all Indemnified Parties, taken together).

(b) The Indemnified Party may, at its own cost and expense, participate in the defense of such Indemnity Claim and agrees to cooperate with the Indemnifying Party in such efforts and make available to the Indemnifying Party all witnesses, records, materials and information in the Indemnified Party’s possession, under its control or to which it may have access as may be reasonably required by the Indemnifying Party. The Indemnifying Party will keep the Indemnified Party reasonably informed of the progress of the defense of any such Indemnity Claim. If the Indemnifying Party fails to so assume the defense and investigation of any such Indemnity Claim as provided in this Section 5.6, (i) the Indemnified Party shall have the right to undertake the defense, compromise, settlement and investigation of such Indemnity Claim on behalf of, and at the cost and expense of and for the account and risk of the Indemnifying Party, (ii) the Indemnifying Party agrees to cooperate with the Indemnified Party in such efforts, and (iii) the Indemnified Party will keep the Indemnifying Party reasonably informed of the progress of the defense of any such Indemnity Claim.

(c) If a Third Party Claim is made by any Governmental Authority, the Indemnifying Party agrees to consult with the Indemnified Party prior to communicating with such Governmental Authority (but, for avoidance of doubt, the Indemnifying Party shall be under no obligation to take account of the views of the Indemnified Party).

5.7 Settlement of Indemnity Claims. The Indemnifying Party shall not, without the written consent of the Indemnified Party, (a) settle or compromise any Indemnity Claim or consent to the entry of any final judgment which does not include as an unconditional term thereof the delivery by the claimant or plaintiff of a written release or releases from all liability in respect of such Indemnity Claim of all Indemnified Parties affected by such Indemnity Claim, or (b) settle or compromise any Indemnity Claim if the settlement imposes equitable remedies or material obligations on the Indemnified Party other than financial obligations for which such Indemnified Party will be indemnified hereunder. No Indemnity


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Claim that is being defended in good faith by the Indemnifying Party shall be settled or compromised by the Indemnified Party without the written consent of the Indemnifying Party.

5.8 Exclusive Remedy. THE PARTIES ACKNOWLEDGE AND AGREE THAT THE REMEDIES SET FORTH IN ARTICLES HEREIN, INCLUDING THE LIABILITY LIMITS, SURVIVAL PERIODS, DISCLAIMERS AND LIMITATIONS ON REMEDIES SET FORTH IN THIS AGREEMENT ARE INTENDED TO BE, AND SHALL BE, THE EXCLUSIVE REMEDIES WITH RESPECT TO ANY ASPECT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE BILL OF SALE OR THE GE ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT, EXCEPT FOR ANY CLAIMS ARISING OUT OF A BREACH OF THE CONFIDENTIALITY AGREEMENT SHALL ALSO BE GOVERNED BY THE TERMS OF THE CONFIDENTIALITY AGREEMENT. EACH PARTY HEREBY RELEASES, WAIVES AND DISCHARGES, AND COVENANTS NOT TO SUE WITH RESPECT TO, ANY CLAIM WITH RESPECT TO ANY ASPECT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE BILL OF SALE OR THE ASSIGNMENT AND ASSUMPTION AGREEMENT NOT EXPRESSLY PROVIDED FOR IN THIS AGREEMENT OR THE CONFIDENTIALITY AGREEMENT TO THE MAXIMUM EXTENT PERMITTED BY LAW.

ARTICLE VIREPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Buyer that:6.1 Organization and Good Standing. Seller is a limited partnership duly

organized and validly existing under the laws of the jurisdiction in which it was formed and Seller has the requisite power and authority to own, lease and operate its properties and to carry on its business as now conducted. Seller is duly qualified to transact business and is in good standing in each jurisdiction in which its ownership of the Assets makes such qualification necessary.

6.2 Authorization of Agreement. Seller has the requisite power and authority to execute this Agreement and the other Transaction Documents to which it is a party and to consummate the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party. The execution and delivery of this Agreement and the other Transaction Documents by Seller and the consummation by Seller of the transactions contemplated by this Agreement and the other Transaction Documents have been duly authorized by all necessary action on the part of Seller. This Agreement has been, and the other Transaction Documents to which Seller is a party will be, duly executed and delivered by Seller and, assuming due execution and delivery by Buyer, constitute (or in the case of the Transaction Documents will constitute upon the execution and delivery thereof) valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms, except to the extent that enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles regardless of whether enforcement is sought in equity or at law.

6.3 No Violation; Consents. The execution and delivery by Seller of this Agreement and the other Transaction Documents and the consummation of the transactions


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contemplated hereby and thereby do not and will not violate (i) any provision of the organizational or constituent documents of Seller, (ii) any Order of any Governmental Authority to which Seller is bound or subject, (iii) any Applicable Law, or (iv) any agreement by which Seller is bound or by which its assets are subject, other than, in the case of clauses (ii), (iii) and (iv), any conflict, violation, breach, default, requirement for consents, rights of acceleration, cancellation, or termination that would not materially and adversely affect the ability of Seller to perform its obligations under this Agreement or would result in any Lien on the Equipment.

(b) To Seller’s knowledge, no Order or permit issued by, or declaration or filing with, or notification to, or waiver or consent from any Governmental Authority is required on the part of Seller in connection with the execution and delivery of this Agreement, or the compliance or performance by Seller with any provision contained in this Agreement.

6.4 GE Equipment Contract. Seller has not assigned any of its rights under the Amended and Restated GE Equipment Contract. Neither Seller nor, to Seller’s knowledge, GE is in breach of or default under the Amended and Restated GE Equipment Contract. The Equipment was delivered as new equipment and has not been used or otherwise placed into service by Seller.

6.5 Litigation. There is no Action or Order pending or, to Seller’s knowledge, threatened against Seller or any of its Affiliates that seeks to restrain or prohibit the consummation, legality or validity of the transactions contemplated hereby.

6.6 Title to the Equipment. Seller has good and marketable title to the Equipment free and clear of any Claims or Liens, other than the Permitted Liens.

6.7 Preferential Rights. No rights of first offer or other preferential rights to purchase any of the Equipment are held by any Person.

6.8 Financial Advisors. Seller has not entered into a contract with any broker, finder or financial advisor that would obligate Buyer to pay any fee or commission or like payment to any broker, finder or financial advisor as a result of the consummation of the transactions contemplated by this Agreement.

ARTICLE VIIREPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Seller as follows:7.1 Organization and Good Standing. Buyer is a [type of entity] duly

organized and validly existing under the laws of the jurisdiction in which it was formed and Buyer has the requisite power and authority to own, lease and operate its properties and to carry on its business as now conducted. Buyer is duly qualified to transact business and is in good standing in each jurisdiction in which operates.

7.2 Authorization of Agreement. Buyer has the requisite power and authority to execute this Agreement and the other Transaction Documents to which it is a party


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and to consummate the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party. The execution and delivery of this Agreement and the other Transaction Documents to which it is a party by Buyer and the consummation by Buyer of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party have been duly authorized by all necessary action on the part of Buyer. This Agreement has been, and the other Transaction Documents to which it is a party will be, duly executed and delivered by Buyer and constitute (or in the case of the Transaction Documents will constitute upon the execution and delivery thereof) valid and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms, except to the extent that enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles regardless of whether enforcement is sought in equity or at law.

7.3 No Violation; Consents.

(a) The execution and delivery by Buyer of this Agreement and the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby do not and will not violate (i) any provision of the organizational or constituent documents of Buyer, (ii) any Order of any Governmental Authority to which Buyer is bound or subject, (iii) any Applicable Law, or (iv) any agreement by which Buyer is bound or by which its assets are subject, other than, in the case of clauses (ii), (iii) and (iv), any conflict, violation, breach, default, requirement for consents, rights of acceleration, cancellation or termination that would not materially and adversely affect the ability of Buyer to perform its obligations under this Agreement.

(b) To the knowledge of Buyer, no Order or Permit issued by, or declaration or filing with, or notification to, or waiver or consent from, any Governmental Authority is required on the part of Buyer in connection with the execution and delivery of this Agreement, or the compliance or performance by Buyer with any of the provisions contained in this Agreement.

7.4 Litigation. There is no Action or Order pending or, to the knowledge of Buyer, threatened against Buyer or any of its Affiliates that seeks to restrain or prohibit the consummation, legality or validity of the transactions contemplated hereby.

7.5 Financial Capability. Buyer has sufficient cash and cash equivalents and/or credit facilities or letters of credit (and has provided Seller with evidence thereof) to purchase the Assets and to consummate the transactions contemplated by this Agreement, including, without limitation, payments of fees and expenses contemplated hereunder. Buyer is not aware of any facts or circumstances that would cause Buyer to be unable to pay the Purchase Price in accordance with the terms of Article III.

7.6 Financial Advisors. Buyer has not entered into a contract with any broker, finder or financial advisor that would obligate Seller or Buyer to pay any fee or commission or like payment to any broker, finder or financial advisor as a result of the consummation of the transactions contemplated by this Agreement, except for that certain Agreement for Online Auction Services between SalvageSale, Inc. and Buyer.


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ARTICLE VIIIOTHER COVENANTS

8.1 Preservation of Records; Cooperation. Following the Closing, Buyer shall (and shall cause its Affiliates to) preserve and keep in its possession all Records and other documents transferred to it pursuant to this Agreement, for a period as may be required by Applicable Law and shall promptly make such records and personnel available to Seller as may reasonably be required by it in connection with, among other things, any disputes under this Agreement, insurance claims or legal proceedings involving the Assets, or any governmental investigations of Seller or any of its Affiliates related to the Assets or in order to enable Seller or any of its Affiliates to comply with its obligations under this Agreement and each other agreement, document or instrument contemplated hereby or thereby. Buyer further acknowledges that Seller or its Affiliates shall be entitled to copy any such records at Seller’s sole cost and expense and to retain such records.

8.2 Public Announcements. None of Seller, Buyer or any of their respective Affiliates, or any of their agents or representatives, shall issue any press release or public statement concerning this Agreement or the transactions contemplated hereby without obtaining the prior written approval of the other Parties, unless such disclosure is required by any Applicable Law, Order or obligations pursuant to any agreement with any national securities exchange; provided, that the Party intending to make such release shall give the other Party prior notice and shall use its commercially reasonable efforts consistent with such Applicable Law, Order or obligation to consult with the other Party with respect to the text thereof.

8.3 Further Assurances. Each of the Parties will execute and deliver such additional instruments and other documents and will take such further actions as may be necessary or appropriate to effectuate, carry out and comply with all of the terms of this Agreement and the other Transaction Documents.

ARTICLE IXTAXES

9.1 Personal Property Taxes. All Personal Property Taxes relating to the Assets for the taxable year in which the Closing Date occurs shall be apportioned as of the Closing Date between Seller and Buyer. Seller shall be liable for the portion of such Personal Property Taxes based upon the number of days in the taxable year occurring prior to the Closing Date, and Buyer shall be liable for the portion of such Personal Property Taxes based upon the number of days in the year occurring on and after the Closing Date. For any taxable year in which an apportionment is required, Buyer shall file all required reports and returns incident to these Taxes assessed for the taxable year in which the Closing Date occurs that are not filed by Seller as of the Closing Date. If Seller has paid any portion of Personal Property Taxes apportioned to Buyer under this Section 9.1, Buyer shall pay to Seller, promptly upon notice from Seller, to which shall be annexed copies of the relevant tax filing and demand, of the portion of such Taxes apportioned to Buyer, Buyer’s share of such Taxes.

9.2 Sales and Other Transfer Taxes. The Purchase Price does not include any sales Taxes or other transfer Taxes imposed in connection with the sale of the Assets. Buyer shall pay any sales Tax or other transfer Tax, as well as any applicable conveyance,


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transfer and recording fee, and real estate transfer stamps or Taxes imposed on the transfer of the Assets pursuant to the Agreement. If Buyer is of the opinion that it is exempt from the payment of any such sales Tax or other transfer Tax, Buyer shall furnish to Seller the appropriate Tax exemption certificate.

ARTICLE XLIMITATIONS

10.1 Buyer’s Review.

(a) No Reliance. Buyer has reviewed and has had access to all documents, records and information which it has desired to review, and have had the opportunity to ask questions, and has received sufficient answers, in connection with its decision to enter into this Agreement, and to consummate the transactions contemplated hereby. In connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, Buyer has not relied upon, and Buyer expressly waives and releases Seller from any liability for any claims (including claims based upon fraudulent inducement) relating to or arising from, any representation, warranty, statement, advice, document, projection, or other information of any type provided by Seller or its Affiliates or any of their representatives, except for those representations and warranties expressly set forth in Article VI. In deciding to enter into this Agreement, and to consummate the transactions contemplated hereby, Buyer has relied solely upon its own knowledge, investigation, judgment and analysis (and that of its attorneys, accountants, consultants and representatives) and not on any disclosure or representation made by, or any duty to disclose on the part of, Seller or its Affiliates or any of their representatives, other than the express representations and warranties of Seller set forth in Article VI.

(b) Limited Duties. Any and all duties and obligations which any Party may have to the other Party with respect to or in connection with the Assets, this Agreement or the transactions contemplated hereby are limited to those specifically set forth in this Agreement. Neither the duties nor obligations of any Party, nor the rights of any Party, shall be expanded beyond the terms of this Agreement on the basis of any legal or equitable principle or on any other basis whatsoever. Neither any equitable or legal principle nor any implied obligation of good faith or fair dealing nor any other matter requires any Party to incur, suffer or perform any act, condition or obligation contrary to the terms of this Agreement, whether or not existing and whether foreseeable or unforeseeable. Each of the Parties acknowledges that it would be unfair, and that it does not intend, to increase any of the obligations of any other Party under this Agreement on the basis of any implied obligation or otherwise.

10.2 LIMITATION OF REPRESENTATIONS AND WARRANTIES. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE VI, SELLER IS NOT MAKING ANY REPRESENTATIONS OR WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, CONCERNING THE ASSETS OR SELLER OR THE BUSINESS, ASSETS OR LIABILITIES OF SELLER AND IT IS UNDERSTOOD THAT BUYER TAKES THE ASSETS “AS IS” AND “WHERE IS”. BUYER ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, SELLER HAS NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER HEREBY EXPRESSLY WAIVES, ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY


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STATUTE OR OTHERWISE RELATING TO, AND BUYER HEREBY EXPRESSLY WAIVES AND RELINQUISHES ANY AND ALL RIGHTS, CLAIMS AND CAUSES OF ACTION AGAINST SELLER AND ITS AFFILIATES AND EACH OF ITS REPRESENTATIVES IN CONNECTION WITH, THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) HERETOFORE FURNISHED TO BUYER OR ITS REPRESENTATIVES BY OR ON BEHALF OF SELLER OR ANY OF ITS AFFILIATES OR ANY OF ITS REPRESENTATIVES IN CONNECTION THEREWITH. WITHOUT LIMITING THE FOREGOING, SELLER IS NOT MAKING ANY REPRESENTATION OR WARRANTY TO BUYER (I) UNDER THE GE ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT OR THE BILL OF SALE OR (II) OTHERWISE WITH RESPECT TO THE CONDITION, OPERATION, PERFORMANCE OR FITNESS FOR A PARTICULAR PURPOSE OF THE ASSETS.

10.3 NO CONSEQUENTIAL OR PUNITIVE DAMAGES. NO PARTY (OR ITS AFFILIATES) SHALL, UNDER ANY CIRCUMSTANCE, BE LIABLE TO ANY OTHER PARTY (OR ITS AFFILIATES) FOR ANY CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES CLAIMED BY SUCH PARTY UNDER THE TERMS OF OR DUE TO ANY BREACH OF THIS AGREEMENT, OR ANY ASSIGNMENT, BILL OF SALE, AGREEMENT OR CERTIFICATE DELIVERED HEREUNDER OR IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT INCLUDING, BUT NOT LIMITED TO, LOSS OF REVENUE OR INCOME, COST OF CAPITAL, OR LOSS OF BUSINESS REPUTATION OR OPPORTUNITY.

10.4 No Recourse. No past, present or future director, officer, employee, member, shareholder, incorporator, partner and/or Affiliate of Seller or any Affiliate thereof shall have any liability for any obligations of Seller under this Agreement or for any claim based on, in respect of or by reason of such obligations or their creation.

ARTICLE XIMISCELLANEOUS

11.1 Nonsurvival of Representations, Warranties and Covenants. All representations and warranties of the Parties made herein or in any other agreement delivered pursuant to this Agreement shall not survive beyond one (1) year from the Closing Date or termination of this Agreement and there shall be no liability in respect thereof after such date. All covenants and agreements, which, by their terms, contemplate performance after such date, shall survive in accordance with their terms.

11.2 Expenses. Except as otherwise set forth in this Agreement, each of Seller and Buyer shall each bear its own expenses (including, without limitation, attorneys’ fees) incurred in connection with the negotiation and execution of this Agreement and each other agreement, document and instrument contemplated by this Agreement and the consummation of the transactions contemplated hereby and thereby.


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11.3 Incorporation of Exhibits. The exhibits identified in this Agreement are incorporated herein by reference and made a part hereof.

11.4 Dispute Resolution.

(a) In the event of a dispute between the Parties arising under or relating to this Agreement, prior to seeking relief from any court of competent jurisdiction, such dispute shall be referred to a representative of senior management of each of the Parties for resolution for a period of no less than thirty (30) days. Pending resolution of any claim or dispute, the Parties shall continue to perform their obligations under this Agreement.

(b) Each of the Parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the jurisdiction of any Texas state court or federal court of the United States of America sitting in Houston, Texas, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the Parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such Texas state court or, to the extent permitted by law, in such federal court. Each of the Parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(c) Each party hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to the Agreement in any Texas state or federal court. Each of the parties hereto hereby irrevocably waives, to thefullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and any right to which it may be entitled, on account of place of residence or domicile.

11.5 No Right of Set-Off. Buyer, for itself and for its subsidiaries, Affiliates, successors and assigns hereby unconditionally and, irrevocably waives any rights of set-off, netting, offset, recoupment, or similar rights that Buyer or any of its Affiliates, successors and assigns has or may have with respect to the payment of the Purchase Price or any other payments to be made by Buyer pursuant to this Agreement or any other document or instrument delivered by Buyer in connection herewith.

11.6 Time of Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.

11.7 Entire Agreement; Amendments and Waivers. This Agreement (including the Exhibits hereto), the Transaction Documents and the Confidentiality Agreement represent the entire understanding and agreement between the Parties with respect to the subject matter hereof and supersedes any other agreements, written or oral, among Seller and Buyer concerning such subject matter. This Agreement can be amended, supplemented or changed, and any provision hereof can be waived, only by written instrument making specific reference to this Agreement signed by the Party against whom enforcement of any such amendment,


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supplement, modification or waiver is sought. No action taken pursuant to this Agreement, including without limitation, any investigation by or on behalf of any Party, shall be deemed to constitute a waiver by the Party taking such action of compliance with any representation, warranty, covenant or agreement contained herein. The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

11.8 Governing Law. THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT, AND ANY CLAIM OR CONTROVERSY DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THISAGREEMENT (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL IN ALL RESPECTS BE GOVERNED BY AND INTERPRETED, CONSTRUED, AND DETERMINED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICT OF LAWS PROVISION THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION).

11.9 Headings. The section headings of this Agreement are for reference purposes only and are to be given no effect in the construction or interpretation of this Agreement.

11.10 Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed duly given (i) when delivered personally or by prepaid overnight courier, with a record of receipt, (ii) the fourth day after mailing if mailed by certified mail, return receipt requested, or (iii) the day of transmission, if sent by facsimile or telecopy during regular business hours or the day after transmission, if sent after regular business hours (with a copy promptly sent by prepaid overnight courier with record of receipt or by certified mail, return receipt requested), to the Parties at the following addresses or telecopy numbers (or to such other address or telecopy number as a Party may have specified by notice given to the other Party pursuant to this provision):

If to Seller:El Paso Power Purchasing, L.P.Office 1532A1001 Louisiana StreetHouston, Texas 77002Attention: SecretaryPhone: (713)-420-6195Fax: (713)-420-4099

With a copy to:El Paso Power Purchasing, L.P.


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1001 Louisiana StreetHouston, Texas 77002Attention: Pat Doherty

Manager – Power TechnologyPhone: (713)-420-1537Fax: (713)-420-6960

If to Buyer:[Buyer][Address]Attention: _________________Phone: [Phone]Fax: [Fax]

11.11 Severability. If any provision of this Agreement is held or determined to be invalid or unenforceable, the balance of this Agreement shall remain in effect. In such event, the parties shall negotiate in good faith replacement provisions that will be valid and enforceable and that provide the same or substantially similar economic effect as provided by the invalid or unenforceable provisions.

11.12 Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Unless specifically set forth herein, nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any Person not a party to this Agreement. No assignment of this Agreement or of any rights or obligations hereunder may be made by Seller or Buyer (by operation of law or otherwise) without the prior written consent of the other Party, which consent shall not be unreasonably withheld, and any attempted assignment without the required consents shall be void.

11.13 Counterparts. This Agreement may be executed by facsimile signature, which shall be binding upon the parties, to each other, upon the transmission of such facsimile and in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

The remainder of this page is intentionally blank.


Purchase and Sale AgreementSignature Page

HOUSTON/28557.2

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized officers, effective as of the date first written above.


By:Name:Title:

[BUYER]

By:Name:Title:


Schedule I - 1HOUSTON/28557.2

SCHEDULE IEQUIPMENT

Equipment and associated components

The Equipment includes Unit 3 (serial number 298064 for the gas turbine and serial number 336X961 for the generator) consisting of one (1) of the three (3) units originally supplied by General Electric under the Amended and Restated GE Equipment Contract, plus the associated generator and auxiliary components, as generally described in this Schedule I. Notwithstanding the foregoing, the Equipment shall exclude specific Units 3 components which shall remain with the Excluded Equipment.

Shared Components – subject to the following, shall be Excluded Equipment:

Water Wash Skid – shall remain with the Excluded EquipmentMiscellaneous Parts Package – shall remain with the Excluded EquipmentInstallation Equipment – shall remain with the Excluded EquipmentTurbine and Generator maintenance tools – shall remain with the Excluded EquipmentOne Remote HMI – shall remain with the Excluded Equipment

If it is determined that commodity materials cannot be split, such materials shall remain with the Excluded Equipment.

The Equipment shall include the following;

One (1) Gas TurbineOne set of documentation

Gas Turbines Accessory Module

Inlet System including;Inlet filtration system – self-cleaningInlet heating Inlet ducting

Exhaust System

Coupling

Gas Turbine Packaging including;Lagging and enclosuresCompartment ventilation

Fire Protection System

Cleaning System – on base piping for water wash system (does not include wash skid)


Schedule I - 2HOUSTON/28557.2

Starting System

Generator

Generator lube oil piping

Generator grounding, neutral and line equipment

Generator packaging, enclosures and compartments

Generator Excitation Systems

Gas Turbine – Generator Controls and Electric Auxiliaries


Schedule II - 1HOUSTON/28557.2

SCHEDULE IIEXCLUDED EQUIPMENT

Excluded Equipment and associated components

The Excluded Equipment includes Units 1 and 2 (serial numbers 298062 and 298063 for the gas turbines and serial numbers 336X959 and 336X960 for the generators, respectively), consisting of two (2) of the three (3) units originally supplied by General Electric under the Amended and Restated GE Equipment Contract, and includes its associated generator and auxiliary components, as generally described in this Schedule II. In addition, specific components of Units 3 included with the Equipment shall remain with the Excluded Equipment.

Shared Components – subject to the following, shall be Excluded Equipment:

Water Wash Skid – shall remain with the Excluded EquipmentMiscellaneous Parts – shall remain with the Excluded EquipmentInstallation Equipment – shall remain with the Excluded EquipmentTurbine and Generator maintenance tools – shall remain with the Excluded EquipmentOne Remote HMI – shall remain with the Excluded Equipment

If it is determined that commodity materials cannot be split, such materials shall remain with the Excluded Equipment.

The Excluded Equipment shall include the following;

Two (2) Gas TurbinesTwo sets of documentationGas Turbine Accessory Modules

Inlet System includingInlet filtration system – self-cleaningInlet heating Inlet ducting

Exhaust System

Couplings

Gas Turbine Packaging including;Lagging and enclosuresCompartment ventilation

Fire Protection System

Cleaning System – on base piping for water wash system (includes wash skid)


Schedule II - 2HOUSTON/28557.2

Starting Systems

Two (2) Generators

Generator lube oil piping

Generator grounding, neutral and line equipment

Generator packaging, enclosures and compartments

Generator Excitation Systems

Gas Turbine – Generator Controls and Electric Auxiliaries


Exhibit A - 1HOUSTON/28557.2

EXHIBIT AEQUIPMENT BILL OF SALE

EL PASO POWER PURCHASING, L.P., a Delaware limited partnership (“Seller”), for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does hereby grant, sell, assign, transfer and convey unto [BUYER] (the “Buyer”), all of Seller’s right, title and interest in and to the Equipment (as defined in that certain Gas Turbine Generators Purchase and Sale Agreement between Seller and Buyer dated of even date herewith (the “Purchase Agreement”)), to have and to hold for its disposition. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Purchase Agreement.

This Bill of Sale is made pursuant to, and is subject to the terms and conditions set forth in, the Purchase Agreement. Nothing contained herein shall be construed to limit, terminate or expand the representations, warranties, covenants, disclaimers, exclusions, remedies and indemnities set forth in the Purchase Agreement.

EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE VI OF THE PURCHASE AGREEMENT, SELLER IS NOT MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, CONCERNING THE EQUIPMENT AND IT IS UNDERSTOOD THAT BUYER TAKES THE EQUIPMENT “AS IS” AND “WHERE IS”. BUYER ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY PROVIDED IN THE PURCHASE AGREEMENT, SELLER HAS NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER HEREBY EXPRESSLY WAIVES, ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO THE EQUIPMENT, AND BUYER HEREBY EXPRESSLY WAIVES AND RELINQUISHES ANY AND ALL RIGHTS, CLAIMS AND CAUSES OF ACTION AGAINST SELLER AND ITS AFFILIATES AND EACH OF ITS REPRESENTATIVES IN CONNECTION WITH THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) HERETOFORE FURNISHED TO BUYER OR ITS REPRESENTATIVES BY OR ON BEHALF OF SELLER OR ANY OF ITS AFFILIATES OR ANY OF ITS REPRESENTATIVES IN CONNECTION THEREWITH. WITHOUT LIMITING THE FOREGOING, SELLER IS NOT MAKING ANY REPRESENTATION OR WARRANTY TO BUYER WITH RESPECT TO THE CONDITION, OPERATION, PERFORMANCE OR FITNESS FOR A PARTICULAR PURPOSE OF THE EQUIPMENT.

This Bill of Sale shall be governed by and construed in accordance with the internal laws of the State of Texas, without regard to any conflict of laws provisions that would require the application of the law of any other jurisdiction.

This Bill of Sale shall bind and inure to the benefit of Seller and Buyer and their respective successors and assigns.

This Bill of Sale may be executed by facsimile signature and in any number of counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.


HOUSTON/28557.2

IN WITNESS WHEREOF, the undersigned have executed this Bill of Sale on ________, 2005.

SELLER:EL PASO POWER PURCHASING, L.P.

By:Name:Title:

BUYER:[BUYER]

By:Name:Title:


HOUSTON/28557.2

EXHIBIT BGE ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT

THIS ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT (this “Agreement”) is made and entered into this __________, 2005 (the “Effective Date”), by and among EL PASO POWER PURCHASING, L.P. (“Assignor”), a Delaware limited partnership having a place of business at 1001 Louisiana Street, Houston, Texas 77001; [ASSIGNEE NAME] (“Assignee”), a [ENTITY TYPE] having a place of business at [ADDRESS], and GENERAL ELECTRIC INTERNATIONAL, INC. (“GE”), a corporation organized under the laws of the State of Delaware and having a principal place of business at One River Road, Schenectady, New York 12345 (Assignor, Assignee and GE are sometimes referred to collectively as the “Parties” and each individually a “Party”).

WITNESSETH

WHEREAS, Assignor and GE are parties to a certain Amended and Restated Contract for the Sale of Equipment and Services dated as of ________, 2005, (the “Equipment Agreement”), relating to one (1) GE Model PG7121EA gas turbine generator set, including start-up and spare parts;

WHEREAS, Assignor and Assignee executed and delivered a Gas Turbine Generators Purchase and Sale Agreement, dated as of the date hereof, between Assignor and the Assignee, whereby Assignor agreed, among other things, to transfer all of its right, title and interest in, to and under the Equipment Agreement to the Assignee (the “Purchase Agreement”);

WHEREAS, Assignor desires to assign all of its rights and benefits under the Equipment Agreement, and assign all of its corresponding obligations and liabilities to be performed from and after the date hereof under the Equipment Agreement to Assignee, and Assignee is willing to accept such assignment and assume all obligations and liabilities from Assignor accruing or otherwise arising from and after the date hereof under the Equipment Agreement or otherwise with respect to the Equipment (the “Assumed Liabilities”); and

WHEREAS, GE is willing to consent to such assignment and release Assignor and Assignor’s affiliates from all liabilities and obligations arising in, under or pursuant to the Equipment Agreement arising from and after the date hereof.

NOW, THEREFORE, FOR AND IN CONSIDERATION of the mutual agreements contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Assignment and Assumption. Effective as of the Effective Date, Assignor hereby assigns and transfers to Assignee all of the rights and benefits of Assignor in, to and under the Equipment Agreement and hereby assigns to Assignee all of the future obligations and liabilities of Assignor in, under and pursuant to the Equipment Agreement, including its obligations to be performed from and after the date hereof (collectively, the “Assignment”), without recourse, representation or warranty (express or implied) of any kind, except as


Exhibit B - 2HOUSTON/28557.2

expressly set forth in the Purchase Agreement. Assignee hereby accepts the Assignment and assumes, and agrees to pay, perform and discharge, the Assumed Liabilities. Assignee agrees to be bound by the terms and conditions of the Equipment Agreement and to assume the Assumed Liabilities, and undertakes to perform, in accordance with and subject to the terms of, the Equipment Agreement.

2. Consent and Release. GE hereby acknowledges and consents to the Assignment and irrevocably and unconditionally waives all conditions thereto in the Equipment Agreement. GE hereby irrevocably and unconditionally RELEASES and FOREVER DISCHARGES Assignor, El Paso Corporation and any and all of their respective affiliates, from all liabilities, obligations and duties accruing or otherwise arising on or after the date hereof under the Equipment Agreement or any other agreement or instrument, including, without limitation, a guaranty, surety agreement or other form of credit support, including, without limitation, any indemnity obligations and obligations to pay the Contract Price (as defined in the Equipment Agreement).

3. Representations and Warranties by GE. GE hereby represents and warrants to the Assignee that the Equipment Agreement is in full force and effect and has not been amended, supplemented or modified other than as indicated in the recitals hereof. GE represents that the Equipment Agreement is a legal, binding and enforceable obligation of GE and that it is not in default thereunder, and to the best of its knowledge, (i) Assignor is not in default thereunder and (ii) no event has occurred which, with the passage of time or the giving of notice, or both, would constitute a default by Assignor or GE thereunder. GE further represents and warrants that it has not delivered any notice of an Excusable Delay under the Equipment Agreement (as defined therein).

4. Purchase Agreement. As between Assignor and Assignee, nothing contained herein shall be construed to limit, terminate or expand the representations, warranties, covenants, disclaimers, exclusions, remedies and indemnities set forth in the Purchase Agreement. For the avoidance of doubt, as between Assignor and Assignee, Assignee’s exclusive remedy arising out of or in connection with this Agreement are as set forth in the Purchase Agreement, including the liability limits, survival periods and disclaimers set forth in the Purchase Agreement. In no event shall GE be deemed a third party beneficiary under the Purchase Agreement.

5. Amendments. No amendment to the terms and conditions of this Agreement shall be valid and binding on the Parties unless made in writing and signed by an authorized representative of each of the Parties.

6. Waiver. No waiver of any provision of this Agreement or any breach hereof shall be effective unless such waiver is in writing, signed by the Party waiving such provision.

7. Counterparts; Signatures. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. Any signature page of any such counterpart, or any electronic facsimile thereof, may be attached or appended to any other counterpart to complete a fully executed counterpart of this Agreement. Any electronic facsimile transmission of any signature of a Party shall be deemed an original and shall bind such Party.


Exhibit B - 3HOUSTON/28557.2

8. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of New York (without regard to its conflict of laws rules).

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


By:Name:Title:

[BUYER]

By:Name: ____Title: ____

GENERAL ELECTRIC INTERNATIONAL, INC.

By:Name:Title:

HOUSTON/28557.2

EXHIBIT C

FORM OF SUBLEASE AGREEMENT

THIS SUBLEASE, made as of [____________,] 2005, is by and between EL PASO POWER PURCHASING, L.P. (“Sublessor”), as sublessor, and [_________________] (“Sublessee”), as sublessee.

Recitals

Sublessor is the lessee of the premises consisting of an approximate 150,839 usable square foot industrial building and associated yard areas (the “Master Leased Premises”) in the Building Complex (as defined below) under a Lease (the “Master Lease”) dated May 7, 2002 by and between J. Supor & Son Trucking & Rigging Co., Inc., as landlord (“Landlord”) and Sublessor, as tenant.

The Master Leased Premises is located at 225 Manor Avenue, Harrison, New Jersey and consists of five (5) contiguous buildings (the “Building Complex”).

1. PREMISES

Sublessee hereby subleases from Sublessor that portion of the Master Leased Premises designated as “the Premises” on Exhibit A hereto (the “Premises”), on the terms and conditions set forth to this Sublease.Sublessee warrants and acknowledges and agrees with Sublessor that Sublessee is leasing the Premises in an “as-is” condition “with all faults” and all defects as of the date of this Sublease, and specifically and expressly without any warranties, representations or guarantees, either express or implied, of any kind, nature, or type whatsoever relating to the condition of the Premises or the Building Complex, including any condition relating to environmental contamination. Sublessee acknowledges that Sublessee has done its own inspection of the Premises and has not relied, and will not be relying upon any information, documents, brochures or other literature, maps or sketches, projections, pro formas, statements, representations, guarantees or warranties (whether express or implied, oral or written, material or immaterial) that may heretofore or hereafter have been given by or made by or on behalf of Sublessor.

2. RENT

The rent payable for the Premises (“Rent”) shall be [$10,000 per month per unit] per month. Sublessee shall pay the first month’s Rent concurrently with the execution and delivery of this Sublease. Sublessor shall deliver to Sublessee an invoice for the Rent that is payable for each calendar month during the Term (other than for the first month which is to be paid upon execution of this Sublease). Sublessee shall pay the Rent for each calendar month so invoiced no later than the first day of said calendar month or thirty (30) days after receipt of such invoice, whichever is later. Rent for any partial month during the Term shall be prorated.

If and when the Rent payable by Sublessor under the Master Lease increases, there shall be a proportionate increase in the Rent payable thereafter under this Sublease equal to [25% per unit] of the Rent increase payable by Sublessor under the Master Lease; provided, however, Sublessor

Exhibit C - 5HOUSTON/28557.2

shall not agree to any increase of the Rent under the Master Lease not provided for by the Primary Lease as of the date of this Sublease.

3. TERM

Subject to the continued existence of the Master Lease, the term (“Term”) of this Sublease shall commence on the date that this Sublease has been executed and delivered by both parties (“Commencement Date”), and shall terminate on the close of business on the 90th day after the date of this Sublease (“Termination Date”). Notwithstanding the foregoing, so long as Sublessee has complied with the provisions of this Sublease, including Paragraph 20 hereof, Sublessee shall have the right to terminate this Sublease prior to the scheduled Termination Date by giving 30 days prior written notice of such termination to Sublessor, in which event such earlier date shall be deemed the Termination Date. Sublessee shall be responsible for the cost and expense of removing, shipping and transporting the Equipment, as defined in the Gas Turbine Generator Purchase and Sale Agreement by and between Sublessee and Sublessor dated of even date with this Sublease.Termination of this Sublease shall not excuse or terminate the obligation of Sublessee to pay any amounts due on or after the date of such termination or for the performance of any of its other obligations to be performed under this Sublease.

4. MASTER LEASE

(a) All the obligations contained in the Master Lease conferred and imposed upon Sublessor (as tenant therein), except to the extent expressly provided to the contrary in this Sublease, are hereby conferred and imposed upon Sublessee to the extent applicable to the Premises or Sublessee’s use and occupancy thereof. Sublessee covenants and agrees fully and faithfully to perform the terms and conditions of the Master Lease and the Sublease on its part to be performed. Sublessee shall not do or cause to be done or suffer or permit any act to be done which would or might cause the Master Lease, or the rights of Sublessor as tenant under the Master Lease, to be endangered, cancelled, terminated, forfeited or surrendered, or which would or might cause Sublessor to be in default thereunder or liable for any damage, claim or penalty. Sublessee agrees, as an express inducement for Sublessor’s executing this Sublease, that if there is any conflict between the provisions of this Sublease and the provisions of the Master Lease which would permit Sublessee to do or cause to be done or suffer or permit any act or thing to be done which is prohibited by the Master Lease, then the provisions of the Master Lease shall prevail. All rights and remedies given to the Landlord are hereby given to Sublessor under this Sublease.

(b) Sublessor shall have no duty to perform any obligations of the Landlord and shall under no circumstances be responsible or liable to Sublessee for any default, failure or delay on the part of the Landlord in the performance of any obligations under the Master Lease. In the event of any default or failure of performance by Landlord, Sublessor agrees, upon notice from Sublessee, to make demand upon Landlord to perform its obligations under the Master Lease. Sublessor further agrees, at the sole expense of Sublessee, to use reasonable efforts to enforce the terms of the Master Lease for the benefit of Sublessee.


(c) In the event that Sublessee shall fail to perform or observe any obligation hereby assumed by Sublessee under the Master Lease (whether or not any grace period under the Master Lease as a condition to default shall have expired), or in the event that Sublessor shall deem itself insecure concerning any such performance or observance, Sublessor may at its option perform or observe the same and Sublessee, on demand, shall indemnify, defend and hold Sublessor harmless from and against any and all liability, damage, loss, cost and expense incurred by Sublessor in connection therewith.

(d) Sublessor shall provide Sublessee that with a true, correct and complete copy of the Master Lease and all amendments thereto.

(e) Notwithstanding anything in this Sublease to the contrary, Sublessor shall not have any liability or responsibility under this Sublease with respect to obligations or matters arising or accruing under this Sublease after the expiration of the Master Lease. The Landlord under the Master Lease is a third party beneficiary of this provision.

5. RESERVED

6. USE

The Premises shall be used for the purposes of storage of the Equipment. Sublessee shall be responsible for the disposal of all hazardous wastes generated by Sublessee at the Premises in accordance with all governmental laws, rules and regulations and shall comply with all laws applicable to Sublessee’s use thereof, including the New Jersey Industrial Site Recovery Act.

7. SECURITY DEPOSIT

Sublessee shall deposit with Sublessor the sum of one (1) month’s rent as a security deposit for the payment of the Rent hereunder and the full and faithful performance of this Sublease by Sublessee. No later than thirty (30) days after the expiration or earlier termination of this Sublease, Sublessor shall return said security deposit to Sublessee to the extent not previously used by Sublessor to cure a default by Sublessee under this Sublease.

8. REPAIRS

Sublessor shall deliver the Premises to Sublessee on the Commencement Date in the condition described in Paragraph 1, with no express or implied warranties regarding its condition, merchantability or fitness for a particular purpose. Sublessor shall not be responsible for any maintenance, repairs and replacements of, at or to the Premises, including structural, roof, and exterior repairs and repairs and/or replacement of the building systems. Such services, if any, will be provided by Landlord to the extent provided in the Master Lease. Sublessor shall not be responsible for housekeeping, rubbish removal, maintenance and mechanical systems servicing the Premises. Such services, if any, will be provided by Landlord to the extent provided in the Master Lease.

Sublessee covenants and agrees, at its sole cost and expense, to comply with all present and future laws, orders and regulations of all state, federal, municipal, and local governments, departments, commissions and boards regarding the collection, sorting, separation and recycling of waste products, garbage, refuse and trash. Sublessee shall sort and separate waste products,


garbage, refuse and trash into such categories as provided by law or local custom. Each separately sorted category of waste products, garbage, refuse and trash shall be placed in separate receptacles reasonably approved by the Sublessor. Such separate receptacles may, at the Sublessor’s option, be removed from the Premises in accordance with a collection schedule prescribed by law or custom and usage.

9. LESSOR’S ENTRY

Sublessee agrees that Sublessor or Landlord, their agents and other authorized representatives, shall have the right to enter the Premises during business hours upon reasonable notice to Sublessee for the purpose of examining the same.

10. ALTERATIONS

Sublessee covenants that it will not make any structural alteration in or to the Premises without first obtaining Sublessor’s written consent, which consent shall not be unreasonably withheld, conditioned or delayed.

11. ASSIGNMENT OR SUBLETTING

Sublessee shall not, and it hereby covenants that it will not, assign this Sublease or sublet all or part of the Premises.

12. INDEMNIFICATION

Sublessee agrees to indemnify Sublessor and Landlord, and their agents, invitees, employees or assigns and save them harmless from and against any and all claims, actions, damages, liability and expense in connection with loss of life and/or bodily injury and/or property damage arising from or occasioned wholly or in part from the presence of Sublessee or its agents, subtenants, contractors, employees or invitees in or about the Premises, any breach on the part of Sublessee of any covenant or condition of this Sublease or by any negligent act or omission of Sublessee, its agents, subtenants, contractors, employees or invitees in or about the Premises.

13. INSURANCE

Sublessee shall, at its sole cost and expense, secure and maintain general liability insurance written on a so-called comprehensive general liability or commercial liability form with respect to liability for injury to persons or property or death of persons occurring in or about the Premises, with death and bodily injury limits of not less than combined single limit of $500,000.00 per occurrence and with Sublessor named as an additional insured. Sublessor shall, at its sole cost and expense, secure and maintain “all risk” property damage insurance on the Premises for the full replacement value thereof. Each party shall furnish to other party a certificate of its insurance carrier evidencing said coverage and providing that in the event of cancellation or material change in coverage, such other party shall receive at least thirty (30) days (or ten (10) days for cancellation on account of nonpayment of premium) advance written notice thereof. Sublessee and Sublessor each hereby releases and relieves the other, and waives its entire right to recover damages (whether in contract or in tort) against the other, for loss or damage to property arising out of or incident to the perils required to be insured against under this Paragraph 13. The effect of such release and waiver of the right to recover damages shall not be limited by the amount of insurance carried or required, or by any deductibles applicable


thereto. Sublessor and Sublessee agree to have their respective insurance companies issuing property damage insurance required hereunder to waive any right to subrogation that such companies may have against Sublessor or Sublessee, as the case may be.

14. NO BROKER

Sublessee and Sublessor represent and warrant to each other that no broker has been involved with the negotiation of this Sublease. Sublessee and Sublessor agree to indemnify and hold each other harmless from any and all claims of brokers and expenses in connection therewith arising out of or in connection with the negotiation of or the execution of this Sublease by Sublessee and Sublessor.

15. COMPLIANCE WITH LAWS

Sublessee shall not use or permit the use of the Premises for the generation, storage, treatment, use transportation or disposal of any chemical, material or substance which is regulated by any Federal, state, county, regional, local or other governmental authority (Hazardous Materials).

Sublessee agrees to indemnify and hold Sublessor and Landlord harmless from and against any and all liability, penalties, losses, expenses, damages, costs, claims, causes of action, judgments and/or the like, of whatever nature, including but not limited to attorney’s fees and other costs of litigation or preparation thereof, arising out of or in connection with Sublessee’s failure to observe or comply with any and all environmental laws, statutes and/or regulations in connection with any hazardous materials generated or acquired at, or brought onto the Premises, by Sublessee.

16. LIENS

Sublessee shall not permit any mechanic’s, materialmen’s, contractor’s or other liens arising from, or any claims for damages growing out of any work, repair or alterations performed by Sublessee, materials furnished or obligations incurred by Sublessee to be enforced against the Premises. Sublessee shall pay or cause to be paid all of said liens and claims before any action is brought to enforce the same against Sublessor, Landlord or the Premises.

17. DEFAULT

(A) The following events shall be considered events of default by Sublessee hereunder:(1) Sublessee shall fail to pay any installments of Rent hereby reserved and

such failure shall continue for a period of ten (10) days after written notice thereof to Sublessee that such installment of Rent is due pursuant hereto.

(2) Sublessee shall fail to comply with any material term, provision or covenant of this Sublease, other than the payment of Rent, and shall not cure such failure within thirty (30) days after written notice thereof to Sublessee; provided, however, if the reasonable time to cure such failure shall be longer than thirty (30) days, Sublessee shall have as long as reasonably necessary to complete the same if it commences to cure within the thirty (30) day period and diligently continues thereafter to completion.

(3) Sublessee shall become insolvent, or shall make a transfer in fraud of creditors or shall make an assignment for the benefit of creditors or shall be adjudged a bankrupt


or insolvent in proceedings filed against Sublessee or shall file a voluntary petition in bankruptcy.

(4) A receiver or trustee shall be appointed for all or substantially all of Sublessee’s assets and such receiver or trustee has not been discharged within ninety (90) days.

(5) Sublessee shall act or fail to take any action that constitutes or causes a default under the terms of the Master Lease or that would cause a default under the Master Lease if Sublessee were a tenant thereunder and, in either case, any applicable period of cure, grace or notice has elapsed under the Primary Sublease.

(B) Upon the occurrence of any such event of default, Sublessor shall have the option to pursue any one or more of the following remedies without notice or demand whatsoever:

(1) With ten (10) days prior written notice to Sublessee, terminate this Sublease, in which event Sublessee shall immediately surrender the Premises to Sublessor, and if Sublessee fails to do so, Sublessor may, without prejudice to any other remedy which it may have for possession or arrearages in rent or rent for the remainder of the Term, enter upon and take possession of the Premises and expel or remove Sublessee and any other person who may be occupying said premises or any part thereof, by all lawful means, without being liable for prosecution or any claim of damages therefore (except that nothing herein shall limit Sublessor’s liability under Paragraph 12 of this Sublease), and Sublessee agrees to pay to Sublessor on demand the amount of all loss and damage which Sublessor may suffer by reason of such termination, whether through inability to relet the leased premises on satisfactory terms or otherwise.

(2) Enter upon the Premises by all lawful means without being liable for prosecution or any claim for damages therefore (except that nothing herein shall limit Sublessor’s liability under Paragraph 12 of this Sublease), and do whatever Sublessee is obligated to do under the terms of this Sublease, and Sublessee agrees to reimburse Sublessor on demand for any reasonable expenses which Sublessor may incur in thus effecting compliance with Sublessee’s obligations under this Sublease, and Sublessee further agrees that Sublessor shall not be liable for any damage resulting to Sublessee from such action provided the same is not caused by the negligence or willful misconduct of Sublessor or its agents, employees or contractors or otherwise.

(3) Pursuit of any of the foregoing remedies shall not preclude pursuit of anyof the other remedies provided for herein, in the consent to sublease of even date herewith or any other remedies provided by law, all of which may be enforced cumulatively, nor shall pursuit of any remedy provided for herein constitute a forfeiture or waiver of any rent due to Sublessor hereunder or of any damages accruing to Sublessor by reason of the violation of any of the terms, provisions and covenants herein contained. Sublessee shall remain obligated to pay all rent, additional rent and other reimbursements to Sublessor on the dates when due as provided in this Sublease. Failure of Sublessor to enforce one or more of the remedies herein provided upon any event of default shall not be deemed or construed to constitute a waiver of such default, or of any other violation or breach of any of the terms, provisions and covenants herein contained.

(C) The following events shall be considered events of default by Sublessor hereunder:(1) Sublessor shall fail to comply with any material term, provision or

covenant of this Sublease, and shall not cure such failure within thirty (30) days after written


notice thereof to Sublessor; provided, however, if the reasonable time to cure such failure shall be longer than thirty (30) days, Sublessor shall have as long as reasonably necessary to complete the same if it commences to cure within the thirty (30) day period and diligently continues hereafter to completion.

(D) Upon the occurrence of any such event of default, Sublessee upon ten (10) days prior written notice to Sublessor shall have the right to terminate this Sublease and recover damages as may be allowed by law; provided, however, that Sublessee shall use its best efforts to mitigate such damages.

18. HEIRS AND SUCCESSORSThis Sublease and each of its covenants and conditions shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors and legal representatives and the respective assigns.

19. SUBORDINATION AND ATTORNMENT

Upon thirty (30) days written request of Sublessor, or any first mortgagee or first deed of trust beneficiary of Landlord, Sublessor, or ground lessor of Sublessor, Sublessee shall, in writing, in form reasonably satisfactory to Sublessee’s counsel, subordinate its rights under this Sublease to the lien of any first mortgage or first deed of trust, or in the interest of any lease in which Sublessor is Sublessee, and to all advances made or hereafter to be made thereunder. However, before signing any subordination agreement, Sublessee shall have the right to obtain from any lender or lessor of Sublessor requesting such subordination, an agreement in writing, in form satisfactory to Sublessee’s counsel, providing that, as long as Sublessee is not in material breach or default hereunder, this Sublease shall remain in full force and effect for the full term specified herein, which agreement is commonly known as a Non-Disturbance Agreement. Concurrently with the execution and delivery of this Sublease, Sublessor shall deliver to Sublessee a Non-Disturbance Agreement in form satisfactory to Sublessee’s counsel, from any lender, lessor or other person that holds a lien or leasehold interest in the Premises as of the Commencement Date.

20. SURRENDER AT END OF TERM

Upon the expiration of the Term hereof or sooner termination of this Sublease as provided herein, Sublessee shall surrender and yield possession of the Premises to Sublessor peacefully and in the same or better order and condition as when received, subject to ordinary wear and tear and use thereof. The Sublessee shall remove all of the Equipment and other personal property stored on the Premises on or prior to the end of the Term and repair any damage to the Premises caused by such storage or by the Sublessee, its Affiliates, and its and their employees, representatives, invitees and agents. The Sublessee shall pay all the costs and expenses involved in removing, shipping, and transporting its Equipment and other personal property from the Premises.

21. HOLD-OVER

In the event Sublessee shall remain in possession of the Premises after the expiration of the Term of this Sublease, such holding over shall be from month-to-month, subject to all the terms and conditions of this Sublease except that the Rent shall be 200% of the then current Rent.


22. APPROVALS/CONSENTS

No approval or consent by either party hereto in connection with this Sublease shall be unreasonably withheld, conditioned or delayed.

23. DAMAGE, DESTRUCTION, CONDEMNATION

In the event of any damage or destruction of all or any portion of the Premises, such damage this Sublease shall continue in full force and effect; provided, however, that (1) Rent payable by Sublessee shall be equitably abated until any Landlord repairs are completed and (2) if all such repairs are not completed within thirty (30) days after the date of casualty, then Sublessee shall have the right to terminate this Sublease.

If the entire Premises shall be taken under the power of eminent domain, this Sublease shall automatically terminate as of the date of final judgment in such condemnation, or as of the date possession is taken by the condemning authority, whichever is earlier. If less than the entire Premises shall be taken under the power of eminent domain, then Sublessee shall have the right to terminate this Sublease either, as determined by Sublessee in its sole discretion, entirely or as to the portion of the Premises affected by such taking. If Sublessee elects not to terminate this Sublease entirely, then Rent for the portion of the Premises that is not taken under power of eminent domain shall be equitably reduced.

24. NOTICES

All notices and other communications under this Sublease shall be in writing and shall be deemed duly given (i) when delivered personally or by prepaid overnight courier, with a record of receipt, (ii) the fourth day after mailing if mailed by certified mail, return receipt requested, or (iii) the day of transmission, if sent by facsimile or telecopy during regular business hours or the day after transmission, if sent after regular business hours (with a copy promptly sent by prepaid overnight courier with record of receipt or by certified mail, return receipt requested), to the parties at the following addresses or telecopy numbers (or to such other address or telecopy number as a party may have specified by notice given to the other party pursuant to this provision):

If to Sublessor: El Paso Power Purchasing, L.P.Office 1532A1001 Louisiana StreetHouston, Texas 77002Attention: SecretaryPhone: (713)-420-6195Fax: (713)-420-4099

With a copy to: El Paso Power Purchasing, L.P.1001 Louisiana StreetHouston, Texas 77002Attention: Pat Doherty

Manager – Power TechnologyPhone: (713)-420-1537


Fax: (713)-420-6960

If to Sublessee: [Buyer][Address]Attention: _________________Phone: [Phone]Fax: [Fax]

25. ATTORNEYS FEES

If any legal action is brought by either party hereto to enforce or interpret any of the terms, covenants or conditions of the Sublease, the successful party in such action shall be entitled to recover from the other party reasonable attorney’s fees and related costs, the amount of which shall be fixed by the courts, or the arbitrators, as the case may be.

26. APPLICABLE LAW

This Sublease, and the rights and obligations of the parties, shall be construed and enforced in accordance with the laws of the state where the Premises is located.

27. NON-WAIVER

Failure of Sublessor or Sublessee to declare any breach or default immediately upon occurrence thereof of delay in taking action in connection therewith, shall not waive such breach or default, but Sublessor or Sublessee, as the case may be, shall have the right to declare any such breach or default at any time and take such action as might be or authorized hereunder, whether in law or in equity.

28. SEVERABILITY

If any term, covenant, condition or provision of this Sublease, or the application thereof to any person or circumstance, shall to any extent be held by a court of competent jurisdiction to be invalid, void, or enforceable, the remainder of the terms, covenants, conditions or provisions of this Sublease or the application thereof to any person or circumstance shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby.

29. PARAGRAPH HEADINGS

The paragraph headings contained herein are solely for the convenience and shall in no way define, increase, limit, or describe the scope or intent of any provision of this Sublease.

30. ENTIRE AGREEMENT

This Sublease contains the entire agreement between the parties hereto with respect to the subject matter hereof and all previous negotiations leading thereto, and it may be modified only by agreement in writing signed by Sublessor and Sublessee.

31. COUNTERPARTS

This Agreement may be executed by facsimile signature, which shall be binding upon the parties, to each other, upon the transmission of such facsimile and in any number of counterparts, each of


which will be deemed an original, but all of which together will constitute one and the same instrument.


IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of the day and year first above written.

SUBLESSOR:


By: ______________________________Its: ______________________________

SUBLESSEE:

[_________________]

By: _______________________________Its: _______________________________

HOUSTON/28557.2

EXHIBIT A

DESCRIPTION OF PREMISES

For purposes of the Sublease, the subleased premises shall be those locations where the Equipment is currently located within the Master Leased Premises. The Equipment may be located at some or all of the following locations of within the Building Complex:

1.) Building #11, 1000 Frank E. Rodgers Blvd. Harrison, NJ 070292.) Supor Industrial Park, 3rd Floor Mezzanine, 500 Supor Blvd3.) Eagle Building, 505 Manor Ave., Harrison New Jersey 07029