Exhibit 10.1
EXECUTION COPY

TEMPORARY WAIVER AND AGREEMENT

This TEMPORARY WAIVER AND AGREEMENT (this “Agreement”) is dated as of June 14,
2004 and is entered into by and among INDIANTOWN COGENERATION, L.P., a Delaware
limited partnership (“ICLP”), INDIANTOWN COGENERATION FUNDING CORPORATION, a
Delaware corporation (“ICFC”), and CALYON NEW YORK BRANCH (as
successor-in-interest by consolidation to Credit Lyonnais New York Branch) (the
“Agent”), as agent bank under each of (a) that certain Debt Service Reserve
Letter of Credit and Reimbursement Agreement, dated as of October 10, 2003,
among ICLP, the Agent, and the various other banks and institutions from time to
time party thereto (as amended, supplemented, or otherwise modified from time to
time, the “DSR LOC Agreement”) and (b) that certain Letter of Credit and
Reimbursement Agreement, dated as of October 10, 2003, among ICLP, the Agent,
and the various other banks and institutions from time to time party thereto
(the “LOC Agreement”). Capitalized terms used herein without definition have the
meaning given thereto in the Disbursement Agreement (as defined below),
including by reference to the Indenture defined therein.

RECITALS:

     WHEREAS, pursuant to that certain Amended and Restated Disbursement
Agreement, dated as of October 10, 2003, among ICLP, ICFC, the Agent, The Bank
of New York, as Tax Exempt Trustee, as Trustee, and as Disbursement Agent,
Deutsche Bank Trust Company Americas, as Collateral Agent, and the Martin County
Industrial Development Authority (as amended, supplemented, or otherwise
modified from time to time, the “Disbursement Agreement”), the letters of credit
outstanding under the DSR LOC Agreement and the LOC Agreement may be
cash-collateralized upon the occurrence and continuation of a Fuel Supply
Coverage Event;

     WHEREAS, a Fuel Supply Coverage Event occurred on February 1, 2004 and
another Fuel Supply Coverage Event occurred on June 1, 2004, pursuant to the
terms of the Disbursement Agreement;

     WHEREAS, the Agent, with the consent of the Banks (as defined in each of
the DSR LOC Agreement and the LOC Agreement, respectively) as may be required
pursuant to the terms of the DSR LOC Agreement and the LOC Agreement, is willing
to waive the Banks’ rights and remedies that arise because of the Fuel Supply
Coverage Events for a limited period of time.

     NOW, THEREFORE, for the sum of ten dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and incorporating the foregoing recitals herein, the parties
hereto agree as follows.

SECTION I.
ACKNOWLEDGMENTS

     1.1 Acknowledgment of Fuel Supply Coverage Event. ICLP acknowledges
(a) that a Fuel Supply Coverage Event has occurred as of the date hereof in
respect of its failure to enter into the fuel Amendments as of February 1, 2004
and (b) that a Fuel Supply Coverage Event

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has occurred as of the date hereof in respect of its failure to enter into the
Fuel Amendments as of February 1, 2004, and (b) that a Fuel Supply Coverage
Event has occurred as of June 1, 2004 in respect of ICLP’s failure as of such
date to either (i) certify to Agent that FPUC approval of the PPA Amendment is
not required or (ii) obtain FPUC’s approval of the PPA Amendment.

SECTION II.
TEMPORARY WAIVER

     2.1 Agreement to Waive. The Agent, with the consent of the Required Banks
under each of the DSR LOC Agreement and the LOC Agreement, hereby agrees to
waive the Banks’ rights and remedies under the Disbursement Agreement, the DSR
LOC Agreement, and the LOC Agreement in respect of the Fuel Supply Coverage
Events referred to in Section 1.1, including the right of the Agent to deliver
notice of such Fuel Supply Coverage Events to the Disbursement Agent pursuant to
Section 4.3(a) of the Disbursement Agreement, during the period (the “Waiver
Period”) commencing on the date hereof and ending on December 1, 2004.

     2.2 Limitation. Except as expressly set forth herein, nothing in this
Agreement, nor in any communication between the Agent and/or any of the other
Banks and ICLP or ICFC or any officer, agent, employee, or representative of
ICLP or ICFC, shall constitute as a waiver of any provision of the DSR LOC
Agreement, the LOC Agreement, the Disbursement Agreement or any other Financing
Document not expressly referred to herein and shall not be construed as a waiver
or consent to any further or future action on the part of ICLP that would
require a waiver or consent of the Banks or the Agent. The execution and
delivery of this Agreement shall not constitute an amendment, extension,
supplement, or modification of any aspect of the DSR LOC Agreement, the LOC
Agreement, or the Disbursement Agreement. Except as expressly limited herein,
the Agent hereby expressly reserves all of its defenses, rights and remedies
under the DSR LOC Agreement, the LOC Agreement, and the Disbursement Agreement
and under applicable law or otherwise. From and after the expiration of the
Waiver Period, the Agent and the Banks shall be entitled to enforce the DSR LOC
Agreement, the LOC Agreement, and the Disbursement Agreement according to their
terms without giving effect to the provisions of this Agreement and to enforce
any and all of their rights and remedies with respect thereto in accordance with
their respective terms, whether arising under the DSR LOC Agreement, the LOC
Agreement, or the Disbursement Agreement, pursuant to applicable law, in equity
or otherwise.

SECTION III.
REPRESENTATIONS AND WARRANTIES

     3.1 Each of ICLP and ICFC (only with respect to clauses (a) and (b) below
in the case of ICFC) represents and warrants, by its signature below, that on
and as of the date of this Agreement:

          (a) the execution, delivery and performance by it of this Agreement
has been duly approved by all necessary partnership or corporate (as applicable)
action;

          (b) this Agreement is the legal, valid and binding obligation of it,
enforceable against it in accordance with its terms, and is in full force and
effect;

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          (c) each of the representations and warranties made by it in each of
the DSR LOC Agreement and the LOC Agreement is true and correct in all material
respects (except that any such representation or warranty that is expressly
stated as being made only as of a specified earlier date shall be true and
correct in all material respects as of such earlier date);

          (d) no Default or Event of Default has occurred and is continuing
under any Financing Document; and

          (e) no Indexation Event will occur on or prior to the Interest Payment
Date immediately following the date of this Agreement.

SECTION IV.
CONDITIONS TO EFFECTIVENESS.

     4.1 The effectiveness of this Agreement shall be subject to the
satisfaction of the following conditions precedent:

          (a) This Agreement shall have been duly executed and delivered by
ICLP, ICFC and the Agent.

          (b) The Agent shall have received signed counterparts of this
Agreement from the Required Banks (as such term is defined under each of the DSR
LOC Agreement and the LOC Agreement).

          (c) The Banks shall have received a satisfactory progress report from
ICLP in connection with the negotiations of the Fuel Amendments with FPL and the
Project’s fuel supplier, with a copy to the Engineering Advisor, and a report
with respect to the FPUC approval.

          (d) The Agent shall have received satisfactory evidence that as of the
Interest Payment Date immediately following the date of this Agreement, (i) the
Senior Debt Service Coverage Ratio for the semi-annual period ended on such
Interest Payment Date is equal to or greater than 1.30 to 1 and (ii) the
projected average annual Senior Coverage Ratio for each calendar year from and
including the calendar year in which such Interest Payment Date occurs through
and including the calendar year ending December 31, 2015, based on the Pro Forma
Model adjusted to give effect to the proposed Fuel Amendments (as described in
the report delivered pursuant to clause (c) above) and as otherwise deemed
appropriate in the reasonable discretion of the Partnership (as confirmed by the
Engineering Advisor), is equal to or greater than 1.30 to 1.

          (e) There shall not have occurred and be continuing any Default or
Event of Default under any Financing Document or any Indexation Event.

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SECTION V.
MISCELLANEOUS.

     5.1 Additional Action. The parties agree to take such further action to
execute and deliver to each other such additional agreements, instruments and
documents as may reasonably be required to carry out the purposes and intent of
this Agreement.

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

     5.3 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

     5.4 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF THAT MIGHT DIRECT THE
APPLICATION OF THE LAW OF ANOTHER JURISDICTION.

     5.5 Counterparts. This Agreement may be executed in any number of
counterparts, and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Delivery
of an executed counterpart of a signature page to this Agreement by facsimile
shall be effective as delivery of a manually executed counterpart of this
Agreement.

[signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their proper and duly authorized officers as of the
date first set forth above.

              INDIANTOWN COGENERATION, L.P.
 
       

  By:   \s\ JOHN C. BARPOULIS

     

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      Name: John C. Barpoulis

      Title: Vice President and Treasurer
 
            INDIANTOWN COGENERATION FUNDING CORPORATION
 
       

  By:   \s\ JOHN C. BARPOULIS

     

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      Name: John C. Barpoulis

      Title: Vice President and Treasurer:
 
            CALYON NEW YORK BRANCH, in its capacity as Agent
 
       

  By:   \s\ TED VANDERMEL

     

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      Name: Ted Vandermel

      Title: Director
 
       

  By:   \s\ JAMES F. GUIDERA

     

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      Name: James F. Guidera

      Title: Managing Director

 

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              ACKNOWLEDGED AND AGREED:
 
            BNP PARIBAS, as a Bank
 
       

  By:   \s\ ANDREW S. PLATT

     

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      Name: Andrew S. Platt

      Title: Director
 
       

  By:   \s\ SEAN FINNEGAN

     

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      Name: Sean Finnegan

      Title: Vice President
 
            CALYON NEW YORK BRANCH, as a Bank
 
       

  By:   \s\ TED VANDERMEL

     

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      Name: Ted Vandermel

      Title: Director
 
       

  By:   \s\ JAMES F. GUIDERA

     

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      Name: James F. Guidera

      Title: Managing Director
 
            HSH NORDBANK, AG, NEW YORK BRANCH, as a Bank
 
       

  By:    

     

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