Exhibit 10.1
Execution Version

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

SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
CPN Management, LP
a Delaware Limited Partnership
effective as of August 29, 2018

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

PARTNERSHIP INTERESTS IN CPN MANAGEMENT, LP, A DELAWARE LIMITED PARTNERSHIP,
HAVE NOT BEEN REGISTERED WITH OR QUALIFIED BY THE U.S. SECURITIES AND EXCHANGE
COMMISSION OR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE. THE INTERESTS
ARE BEING SOLD IN RELIANCE UPON EXEMPTIONS FROM SUCH REGISTRATION OR
QUALIFICATION REQUIREMENTS. THE INTERESTS CANNOT BE SOLD, TRANSFERRED, ASSIGNED
OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON
TRANSFERABILITY CONTAINED IN THIS SECOND AMENDED AND RESTATED LIMITED
PARTNERSHIP AGREEMENT OF CPN MANAGEMENT, LP AND APPLICABLE FEDERAL AND STATE
SECURITIES LAWS.

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

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

TABLE OF CONTENTS
 
 
 
 
ARTICLE I. DEFINITIONS
1

 
 
 
 
 
1.01
Certain Definitions
1

 
1.02
Construction
12

 
 
 
 
ARTICLE II. FORMATION
12

 
 
 
 
 
2.01
Continuation of the Partnership
12

 
2.02
Name
13

 
2.03
Registered Office; Registered Agent
13

 
2.04
Principal Place of Business
13

 
2.05
Purpose; Powers
13

 
2.06
Fiscal Year
13

 
2.07
Foreign Qualification Governmental Filings
13

 
2.08
Duration
13

 
 
 
 
ARTICLE III. PARTNERS; REPRESENTATIONS AND WARRANTIES OF PARTNERS
14

 
 
 
 
 
3.01
Partners
14

 
3.02
Additional Partners
14

 
3.03
Representations and Warranties
14

 
3.04
Liability to Third Parties
15

 
 
 
 
ARTICLE IV. INTERESTS AND CAPITAL CONTRIBUTIONS
16

 
 
 
 
 
4.01
Interests
16

 
4.02
Capital Contributions
16

 
4.03
Return of Contribution
16

 
4.04
Withdrawal of Capital
16

 
4.05
Further Contributions
16

 
4.06
Capital Accounts
16

 
4.07
Award of Interests to Class B Partners
16

 
 
 
 
ARTICLE V. DISTRIBUTIONS, REDEMPTIONS AND ALLOCATIONS
18

 
 
 
 
 
5.01
Distributions
18

 
5.02
Benchmark Amounts; Other Adjustments
19

 
5.03
Tax Distributions
19

 
5.04
Distributions in Error
19

 
5.05
Allocations
20

 
5.06
Withholding
24

 
 
 
 
ARTICLE VI. TRANSFERS OF INTERESTS
24

 
 
 
 
 
6.01
Transfers
24

i

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

 
6.02
Drag-Along Rights
26

 
6.03
Tag-Along Rights
27

 
6.04
Pledge of Interests
31

 
6.05
Repurchase Rights
31

 
6.06
Elective Transfer
34

 
6.07
IPO
35

 
6.08
Power of Attorney
36

 
6.09
Incapacity
36

 
6.10
Non-Competition; Non-Solicitation; Non-Disparagement
36

 
6.11
Parent Distribution
39

 
 
 
 
ARTICLE VII. MANAGEMENT
40

 
 
 
 
 
7.01
Management
40

 
7.02
Limitation of Duties
40

 
7.03
Transactions with Affiliates
40

 
7.04
Officers; Partners
40

 
7.05
Indemnification; Limitation of Liability
41

 
7.06
Officers’ Insurance
43

 
 
 
 
ARTICLE VIII. OTHER RIGHTS AND OBLIGATIONS OF PARTNERS
43

 
 
 
 
 
8.01
Books and Records
43

 
8.02
Schedule K-1 Information
43

 
8.03
Confidentiality
43

 
 
 
 
ARTICLE IX. TAXES
43

 
 
 
 
 
9.01
Tax Returns
43

 
9.02
Tax Classification
44

 
9.03
Partnership Representative
44

 
9.04
Section 409A
44

 
 
 
 
ARTICLE X. CERTIFICATION OF INTERESTS; REPORTS; BANK ACCOUNTS
44

 
 
 
 
 
10.01
Certification of Interests
44

 
10.02
Reports
45

 
10.03
Bank Accounts
45

 
 
 
 
ARTICLE XI. DISSOLUTION, LIQUIDATION TERMINATION AND CONVERSION
45

 
 
 
 
 
11.01
Dissolution
45

 
11.02
Liquidation and Termination
45

 
11.03
Cancellation of Filing
46

 
 
 
 
 
 
 
 
 
 
 
 

ii

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

ARTICLE XII. GENERAL PROVISIONS
46

 
 
 
 
 
12.01
Changes in Interests; Disposition of Assets
46

 
12.02
Offset
47

 
12.03
Notices
47

 
12.04
Entire Agreement; Supersedure
47

 
12.05
Effect of Waiver or Consent
47

 
12.06
Amendment or Modification
47

 
12.07
Binding Effect
48

 
12.08
Governing Law; Severability
48

 
12.09
Further Assurances
48

 
12.10
Consent to Jurisdiction; Service of Process; Waiver of Jury Trial
48

 
12.11
Waiver of Certain Rights
49

 
12.12
Counterparts
49

 
 
 
 
EXHIBIT A
A-1

 
 
 
EXHIBIT B
B-1

 
 
 
EXHIBIT C
C-1

 
 
 
EXHIBIT D
D-1

 
 
 
EXHIBIT E
E-1

iii

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

SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
CPN MANAGEMENT, LP
This SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
“Agreement”) of CPN MANAGEMENT, LP, a Delaware limited partnership (the
“Partnership”), effective as of August 9, 2018 (the “Effective Date”), is made
and entered into by and among VOLT PARENT GP, LLC, a Delaware limited liability
company, as the “General Partner,” and each of VOLT PARENT, LP, a Delaware
limited partnership (“Parent”), and the holders of Class B Interests who execute
this Agreement or a joinder hereto. Capitalized terms used but not otherwise
defined herein have the meanings set forth in Section 1.01.
R E C I T A L S
WHEREAS, the Partnership was formed as a limited partnership under the Act
pursuant to a certificate of limited partnership (the “Delaware Certificate”)
filed in the office of the Delaware Secretary of State on January 10, 2018;
WHEREAS, the General Partner and Parent previously entered into that certain
Amended and Restated Limited Partnership Agreement of the Partnership, effective
as of March 8, 2018 (the “Prior Agreement”); and
WHEREAS, the Partners desire to amend and restate the Prior Agreement in its
entirety as set forth herein and do hereby adopt this Agreement as the Limited
Partnership Agreement of the Partnership.
A G R E E M E N T
NOW, THEREFORE, in consideration of the promises and the covenants hereinafter
contained and to induce the parties hereto to enter into this Agreement, it is
agreed as follows:
ARTICLE I.
DEFINITIONS
1.01    Certain Definitions. As used in this Agreement, the following terms have
the following meanings:
“Act” means the Delaware Revised Uniform Limited Partnership Act and any
successor statute, as amended from time to time.
“Adjusted Capital Account” means, with respect to any Partner, the balance in
such Partner’s Capital Account as of the end of the relevant Fiscal Year or
other period, after giving effect to the following adjustments:
(a)    add to such Capital Account any amounts which such Partner is obligated
to restore pursuant to this Agreement or is deemed to be obligated to restore to
the Partnership pursuant to Treasury Regulations Section 1.704-1(b)(2)(ii)(c) or
the penultimate sentence of each of Treasury Regulations Sections 1.704-2(g)(1)
and 1.704-2(i)(5); and

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

(b)    subtract from such Capital Account such Partner’s share of the items
described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
“Affiliate” of a Person means any other Person directly or indirectly
Controlling or Controlled by or under direct or indirect common Control with the
first Person.
“Agreement” has the meaning set forth in the introductory paragraph hereof.
“Amended Drag-Along Notice” has the meaning set forth in Section 6.02(c).
“Amended Tag-Along Notice” has the meaning set forth in Section 6.03(b).
“Assumed Tax Liability” means, with respect to any Partner, an amount, as
determined in good faith by the General Partner, that is equal to the excess, if
any, of (i) an amount sufficient to satisfy such Partner’s projected deemed
federal, state and local income tax liability with respect to the income and
gain allocated to such Partner (giving effect to any current or prior
allocations of losses and deductions) for tax purposes pursuant to Section 5.05
of this Agreement for the portion of the then-current year through the end of
the then-current fiscal quarter (determined without regard to any activities,
income or loss of that Partner realized other than in its capacity as a Partner
of the Partnership) over (ii) the distributions made to such Partner pursuant to
Sections 5.01, 5.02 and 5.03 of this Agreement for such year. For each Partner
other than Parent, the Assumed Tax Liability will be calculated based on the
highest combined marginal income tax rate for an individual residing in New
York, New York. For Parent, the Assumed Tax Liability will be calculated based
on the highest combined marginal income tax rate for an individual or a
corporation (whichever is higher) resident for tax purposes in New York, New
York. In each case, the Assumed Tax Liability will also be calculated by
utilizing the rates for ordinary income or capital gain (as applicable)
depending on the character of the Partnership’s income and gain and (solely if
and to the extent that Section 164(b)(6) of the Code is amended or repealed or
expires after the date hereof and no longer applies to limit such deduction)
taking into account the deductibility (if any) of state and local taxes for
federal income tax purposes for the relevant period(s).
“Available Cash” means the gross cash proceeds from the Partnership’s operations
(including sales and dispositions of property whether or not in the ordinary
course of business) and any net cash proceeds from any issuance of equity, less
amounts used to pay or establish reserves for all Partnership expenses, debt
payments, capital improvements, replacements, future acquisitions and
investments and contingencies, in each case as reasonably determined by the
General Partner.
“Award” has the meaning set forth in Section 4.07(a).
“Award Agreement” means the written agreement between the Partnership and a
Limited Partner of the Partnership pursuant to which Class B Interests may be
issued to such Limited Partner in accordance with the terms of Section 3.02.
“Benchmark Amount” has the meaning set forth in Section 4.07(c).

2

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

“Benchmark Component” has the meaning set forth in Section 4.07(c).
“Business Day” means any day other than a Saturday, Sunday or legal holiday on
which banks in New York are authorized or obligated by law to close.
“Calpine” means Calpine Corporation, a Delaware corporation and a wholly-owned
subsidiary of the Partnership.
“Calpine Repurchase Right” has the meaning set forth in Section 6.05(a).
“Calpine Shares” means shares of common stock of Calpine.
“Capital” means the amount of cash and/or the initial Gross Asset Value of any
non-cash property contributed to the Partnership (at the time of such
contribution) by the Partners pursuant to the terms of this Agreement.
“Capital Account” means the capital account maintained for each Partner on the
Partnership’s books and records in accordance with the following provisions:
(a)    To each Partner’s Capital Account there will be added (i) the amount of
cash and the Gross Asset Value of any other asset contributed by such Partner
(at the time of such contribution) to the Partnership pursuant to Article IV
hereof, (ii) such Partner’s allocable share of Profits and any items in the
nature of income or gain that are specially allocated to such Partner pursuant
to Section 5.05(a) and (b) hereof or other provisions of this Agreement, and
(iii) the amount of any Partnership liabilities assumed by such Partner or which
are secured by any property distributed to such Partner.
(b)    From each Partner’s Capital Account there will be subtracted (i) the
amount of cash and the Gross Asset Value of any other Partnership assets
distributed to such Partner pursuant to any provision of this Agreement, (ii)
such Partner’s allocable share of Losses and any other items in the nature of
expenses or losses that are specially allocated to such Partner pursuant to
Section 5.05(a) and (b) or other provisions of this Agreement, and (iii)
liabilities of such Partner assumed by the Partnership or which are secured by
any property contributed by such Partner to the Partnership.
(c)    In the event any Interest is Transferred in accordance with the terms of
this Agreement, the transferee will succeed to the Capital Account of the
transferor to the extent it relates to the transferred Interest.
(d)    Determination of the amount of any liability for purposes of
subparagraphs (a) and (b) above will take into account Code Section 752(c) and
any other applicable provisions of the Code and Treasury Regulations.
(e)    The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Treasury Regulations Sections 1.704-1(b) and 1.704-2 and will be interpreted and
applied in a manner consistent with such Treasury Regulations. In the event that
the General Partner determines that it is prudent to modify the manner

3

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

in which the Capital Accounts, or any additions or subtractions thereto, are
computed in order to comply with such Treasury Regulations, the General Partner
may make such modification, provided that it is not likely to have a material
effect on the amounts distributable to any Partner pursuant to Article XI hereof
upon the dissolution of the Partnership.
“Capital Contribution” means any amount of Capital contributed to the
Partnership by a Partner pursuant to the terms of this Agreement. Any reference
to the Capital Contributions of a Partner will include the Capital Contributions
made by a predecessor holder of the Interest of such Partner.
“Class A Interest” means any Interests (other than the Class B Interests), which
may be denominated in one or more sub-classes and all such sub-classes together
shall be deemed Class A Interests.
“Class A Partner” and “Class A Partners” means a Partner, in its capacity as a
holder of record of Class A Interests, with a Capital Account as set forth on
Exhibit A hereto.
“Class B Interests” means the Interests in the Partnership having the rights and
obligations set forth in this Agreement with respect to Class B Interests and
issued pursuant to Sections 3.02 and 4.07, as set forth on Exhibit A hereto.
“Class B Partner” and “Class B Partners” means a Limited Partner, in its
capacity as a holder of record of Class B Interests, in each case so long as
such Person is shown on the Partnership’s books and records as the owner of
Class B Interests hereunder (or Calpine Shares received in redemption therefor
pursuant to Section 6.05), but excluding the Partnership, the General Partner
and the Class A Partners in the event the Partnership, the General Partner
and/or the Class A Partners purchase Class B Interests pursuant to this
Agreement.
“Code” means the Internal Revenue Code of 1986 and any successor statute, as
amended from time to time.
“Control” means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
ownership of voting securities, by agreement or otherwise.
“Conversion Date” has the meaning set forth in Section 6.07(b).
“Conversion Shares” has the meaning set forth in Section 6.07(a).
“Date of Termination” means, with respect to each Class B Partner, the date on
which such Class B Partner’s employment with or other service for the
Partnership or its Affiliates terminates for any reason.
“Deemed Fair Value” means the price which, if paid for all of the Partnership’s
assets, would produce net proceeds after payment of the Partnership’s
liabilities (limited, in the case of nonrecourse liabilities, to the fair market
value of the assets securing those liabilities) which, if distributed to the
applicable Partner pursuant to Section 11.02(c)(iii) with respect to that
portion of

4

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

such Partner’s aggregate Interest being Transferred, would equal the applicable
purchase price payable to such Partner in connection with any Drag-Along Sale or
Tag-Along Sale, as applicable.
“Delaware Certificate” has the meaning set forth in the Recitals.
“Depreciation” means, for each Fiscal Year or other period, an amount equal to
the depreciation, amortization or other cost recovery deduction allowable for
federal income tax purposes with respect to an asset for such Fiscal Year or
other period, except that if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such Fiscal
Year or other period, Depreciation will be an amount that bears the same ratio
to such beginning Gross Asset Value as the federal income tax depreciation,
amortization or other cost recovery deduction for such Fiscal Year or other
period bears to such beginning adjusted tax basis; provided, that if the method
described in Treasury Regulations Section 1.704-3(d) is used to take account of
the difference between an asset’s Gross Asset Value and its adjusted tax basis,
then Depreciation in respect of such asset (or the relevant portion thereof)
shall be determined in accordance with Treasury Regulations Section
1.704-3(d)(2). Notwithstanding the foregoing, if the federal income tax
depreciation, amortization or other cost recovery deduction allowable for such
Fiscal Year or other period is zero, Depreciation will be determined with
reference to such beginning Gross Asset Value using any reasonable method
selected by the General Partner.
“Disability Notice” has the meaning set forth in Section 6.05(f)(ii).
“Drag-Along Co-Seller” has the meaning set forth in Section 6.02(a).
“Drag-Along Notice” has the meaning set forth in Section 6.02(c).
“Drag-Along Rights” has the meaning set forth in Section 6.02(a).
“Drag-Along Sale” has the meaning set forth in Section 6.02(a).
“Drag-Along Transferee” has the meaning set forth in Section 6.02(a).
“Economic Interest” means a Person’s right to share in the Profits, Losses or
similar items of, and to receive distributions from, the Partnership, but does
not include any other rights of a Partner including the right to vote, consent
or otherwise participate in the management of the Partnership, or, except as
specifically provided in this Agreement or required under the Act, any right to
information concerning the business and affairs of the Partnership.
“ECP” means, collectively, Energy Capital Partners III, LP, Energy Capital
Partners IV, LP and any of their respective parallel funds, co-investment
vehicles, acquisition vehicles or alternative investment vehicles.
“ECP Aggregate Ownership” has the meaning set forth in Section 4.07(e).
“Effective Date” has the meaning set forth in the introductory paragraph hereof.

5

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

“Entity” means any corporation, limited liability company, general partnership,
limited partnership, venture, trust, business trust, unincorporated association,
estate or other entity.
“Fair Market Value” means the price at which property would change hands between
a willing buyer and a willing seller, neither being under any compulsion to buy
or sell, and both having reasonable knowledge of the relevant facts, as
determined by the General Partner in good faith and consistent with any
contemporaneous arm’s length transaction using such reasonable methods of
valuation as it may adopt.
“Financing Documents” has the meaning set forth in Section 6.05(f)(i).
“Fiscal Year” has the meaning set forth in Section 2.06.
“GAAP” means generally accepted accounting principles in effect from time to
time in the United States, applied on a consistent basis.
“General Partner” means Volt Parent GP, LLC, a Delaware limited liability
company, and its successors and permitted assigns as general partner of the
Partnership. The General Partner has no obligation to make Capital Contributions
or right to receive distributions under this Agreement.
“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis
for federal income tax purposes, except as follows:
(a)    The initial Gross Asset Value of any non-cash asset contributed by a
Partner to the Partnership is the gross Fair Market Value of such asset.
(b)    The Gross Asset Value of all Partnership assets immediately prior to the
occurrence of any event described in subparagraphs (i) through (v) below may be
adjusted to equal their respective gross Fair Market Values:
(i)    the acquisition of an additional Interest in the Partnership by a new or
existing Partner in exchange for a more than de minimis Capital Contribution, if
the General Partner reasonably determines that such adjustment is necessary or
appropriate to reflect the relative Interests of the Partners in the
Partnership;
(ii)    the distribution by the Partnership to a Partner of more than a de
minimis amount of Partnership assets as consideration for an Interest in the
Partnership, if the General Partner reasonably determines that such adjustment
is necessary or appropriate to reflect the relative Interests of the Partners in
the Partnership;
(iii)    the liquidation or dissolution of the Partnership within the meaning of
Treasury Regulations Section 1.704-1(b)(2)(ii)(g);
(iv)    the grant of a more than de minimis Interest in the Partnership as
consideration for the provision of services to or for the benefit of the
Partnership by an existing Partner acting in his capacity as a Partner, or by a
new Partner acting in his capacity as a Partner or in anticipation of becoming a
Partner of the Partnership, if the General Partner

6

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

reasonably determines that such adjustment is necessary or appropriate to
reflect the relative Interests of the Partners in the Partnership, provided that
such adjustment is consistent with the economic results contemplated by the
parties under this Agreement; and
(v)    at such other times as the General Partner may reasonably determine
necessary or advisable in order to comply with Treasury Regulations Sections
1.704-1(b) and 1.704-2 in a manner consistent with the economic results
contemplated by the parties under this Agreement.
(c)    The Gross Asset Value of any Partnership asset distributed to a Partner
is the gross Fair Market Value of such asset (taking Section 7701(g) of the Code
into account) on the date of distribution.
(d)    The Gross Asset Values of Partnership assets will be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m), except that Gross
Asset Values will not be adjusted pursuant to this subparagraph (d) to the
extent that an adjustment pursuant to subparagraph (b) above is made in
connection with a transaction that would otherwise result in an adjustment
pursuant to this subparagraph (d).
(e)    If the Gross Asset Value of a Partnership asset has been determined or
adjusted pursuant to subparagraph (a), (b) or (d) above, such Gross Asset Value
will thereafter be adjusted by the Depreciation taken into account with respect
to such asset for purposes of computing Profits and Losses, and not by the
depreciation, amortization and other cost recovery deductions taken into account
with respect to that asset for federal income tax purposes.
“Hypothetical Value” means, in respect of a Partner’s Interests (or ECP’s direct
or indirect equity interest in Parent), a pro rata portion (based on the ratio
which (i) the portion of such Partner’s Interests (or ECP’s direct or indirect
equity interest in Parent) being Transferred pursuant to Tag-Along Rights or
Drag-Along Rights bears to (ii) such Partner’s entire Interest (or ECP’s entire
direct or indirect equity interest in Parent)) of the amount that would have
been distributed with respect to such Partner’s entire Interest (or ECP’s entire
direct or indirect equity interest in Parent) pursuant to Section 11.02(c)(iii),
if all of the Partnership’s assets and liabilities had been sold for their
Deemed Fair Value and, immediately following the consummation of such
hypothetical sale, the Partnership distributed the proceeds in accordance with
Section 11.02(c)(iii).
“Incapacity” means the entry of an order of incompetence or of insanity, or the
death, dissolution, bankruptcy (as defined in the Act), or termination (other
than by merger or consolidation) of any Person.
“Indemnitee” has the meaning set forth in Section 7.05(a).
“Initial ECP Sale Percentage” has the meaning set forth in Section
6.03(a)(ii)(C).
“Initial Effective Date” means March 8, 2018.

7

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

“Initial Parent Sale Percentage” has the meaning set forth in Section
6.03(a)(ii)(A).
“Initial Repurchase Deadline” has the meaning set forth in Section 6.05(a).
“Initial Tag-Along Sale” means any Transfer subject to Section 6.03(a).
“Interest” means the partnership interest of a Partner in the Partnership at any
particular time including such Partner’s Economic Interest and the right, if
any, to participate in the management of the business and affairs of the
Partnership, including the right (if any) to vote on, consent to or otherwise
participate in any decision or action of or by the Partners, the right (if any)
to designate members to the board of managers (or similar governing body) of the
General Partner, and the right (if any) to receive information concerning the
business and affairs of the Partnership, in each case to the extent expressly
provided in this Agreement or otherwise required by the Act.
“IPO” means the initial public offering of the Partnership’s equity securities
or the equity securities of a Person that owns not less than 50.1% of the equity
securities of the Partnership and holds no assets other than equity securities
of the Partnership or any successor of the Partnership, in either case pursuant
to an effective registration statement under the Securities Act.
“Lien” means (a) any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, and any
lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing and (b) in the
case of securities, any purchase option, call or similar right of a third party
with respect to such securities.
“Limited Partner” means a limited partner of the Partnership.
“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).
“Nonrecourse Liability” has the meaning set forth in Treasury Regulations
Sections 1.704-2(b)(3) and 1.752-1(a)(2).
“Obligations” means all obligations of every nature of the Partnership under
this Agreement.
“Officer” means any Person designated as an officer of the Partnership pursuant
to Section 7.04(a).
“Parent” has the meaning set forth in the introductory paragraph hereof.
“Parent Distribution” has the meaning set forth in Section 6.11.
“Parent Interests” means the limited partnership interests in Parent.
“Parent LPA” means that certain Second Amended and Restated Limited Partnership
Agreement of Parent, dated March 7, 2018, as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms.

8

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

“Parent-Related Indemnitee” has the meaning set forth in Section 7.05(g).
“Parent-Related Indemnitors” has the meaning set forth in Section 7.05(g).
“Parent-Related Partner” means Parent and (i) any Affiliate of Parent or any
direct or indirect partner, member or other equity participant of any of the
foregoing, and (ii) any Transferee of the foregoing, in each case for so long as
such Person owns any Interests.
“Partner” means each of the General Partner, Parent, each other Limited Partner,
and any other Person who becomes a Partner in accordance with the terms of this
Agreement, but does not include any Person who has ceased to hold any Interests
in the Partnership.
“Partner Minimum Gain” means an amount, with respect to each Partner Nonrecourse
Debt, equal to the Partnership Minimum Gain that would result if such Partner
Nonrecourse Debt were treated as a Nonrecourse Liability, determined in
accordance with Treasury Regulations Section 1.704-2(i) with respect to “partner
minimum gain.”
“Partner Nonrecourse Debt” has the meaning set forth in Treasury Regulations
Section 1.704-2(b)(4) for the phrase “partner nonrecourse debt.”
“Partner Nonrecourse Deductions” has the meaning set forth in Treasury
Regulations Section 1.704-2(i) for the phrase “partner nonrecourse deductions.”
“Partnership” has the meaning set forth in the introductory paragraph hereof.
“Partnership Minimum Gain” has the meaning set forth in Treasury Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1) for the phrase “partnership minimum
gain.”
“Partnership Redemption Right” has the meaning set forth in Section 6.05(a).
“Percentage Interest” means, (i) as to each Class B Partner, its Percentage
Interest (including both the vested and unvested portions), as set forth on
Exhibit A attached hereto, as shall be amended from time to time by the General
Partner to reflect any changes, and (ii) with respect to each Class A Partner,
the product of (A) 100% minus the aggregate then outstanding Percentage
Interests held by the Class B Partners at such time and (B) a fraction, the
numerator of which is the total Capital contributed by such Class A Partner, as
applicable, to the Partnership and the denominator of which is the aggregate
total Capital contributed by all Class A Partners to the Partnership.
“Performance Class B Interests” has the meaning set forth in Section 4.07(e).
“Person” means any individual or Entity.
“Prime Rate” means the prime rate listed from time to time in The Wall Street
Journal, which listing appears as of the relevant date of determination under
the caption “Money Rates.”
“Prior Agreement” has the meaning set forth in the Recitals.

9

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

“Profits” and “Losses” means, for each Fiscal Year or other period, an amount
equal to the Partnership’s taxable income or loss for such year or period
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss, deduction or credit required to be stated separately
pursuant to Code Section 703(a)(1) will be included in taxable income or loss),
with the following adjustments:
(a)    Any income of the Partnership that is exempt from federal income tax and
not otherwise taken into account in computing Profits or Losses pursuant to this
definition of Profits and Losses will increase the amount of such income and/or
decrease the amount of such loss;
(b)    Any expenditure of the Partnership described in Code Section 705(a)(2)(B)
or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Profits or Losses pursuant to this definition of Profits and
Losses, will decrease the amount of such income and/or increase the amount of
such loss;
(c)    Gain or loss resulting from any disposition of Partnership assets where
such gain or loss is recognized for federal income tax purposes will be computed
by reference to the Gross Asset Value of the Partnership assets disposed of,
notwithstanding that the adjusted tax basis of such Partnership assets differs
from their Gross Asset Value;
(d)    In lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such income or loss, Depreciation
will be taken into account for such Fiscal Year or other period;
(e)    To the extent an adjustment to the adjusted tax basis of any asset
included in Partnership assets pursuant to Code Section 734(b) or Code Section
743(b) is required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)
to be taken into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Partner’s Interest, the amount of
such adjustment will be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases the basis of the
asset) from the disposition of the asset and will be taken into account for the
purposes of computing Profits and Losses;
(f)    If the Gross Asset Value of any Partnership asset is adjusted in
accordance with subparagraph (b) or subparagraph (c) of the definition of “Gross
Asset Value” above, the amount of such adjustment will be taken into account in
the taxable year of such adjustment as gain or loss from the disposition of such
asset for purposes of computing Profits or Losses; and
(g)    Notwithstanding any other provision of this definition of Profits and
Losses, any items that are specially allocated pursuant to Article V hereof will
not be taken into account in computing Profits or Losses. The amounts of the
items of Partnership income, gain, loss or deduction available to be specially
allocated pursuant to Article V hereof will be determined by applying rules
analogous to those set forth in this definition of Profits and Losses.
“Proposed Regulations” has the meaning set forth in Section 5.05(d)(iv).

10

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

“Proprietary Information” has the meaning set forth in Section 6.10(c).
“Regulatory Allocations” has the meaning set forth in Section 5.05(b)(viii).
“Reinstatement Notice” has the meaning set forth in Section 6.05(f)(ii).
“Repurchase Disability” has the meaning set forth in Section 6.05(f)(i).
“Repurchase Price” means, with respect to any Calpine Shares held by a Class B
Partner subject to the repurchase rights in Section 6.05, the “Repurchase Price”
as defined in the Award Agreement between the Partnership and the triggering
Class B Partner.
“Repurchase Trigger” has the meaning set forth in Section 6.05(a).
“Restricted Business” has the meaning set forth in Section 6.10(a).
“Restricted Period” has, with respect to each Class B Partner, the meaning set
forth in any Award Agreement entered into with such Class B Partner.
“Section 409A” means Section 409A of the Code and the Department of Treasury
Regulations and other interpretive guidance issued thereunder, including without
limitation any such regulations or other guidance that may be issued after the
Effective Date hereof.
“Securities Act” means the Securities Act of 1933, as amended.
“Stockholders Agreement” means that certain Stockholders Agreement of Calpine,
dated as of the Initial Effective Date, by and among Calpine, the Partnership
and each of the other stockholders who become parties thereto from time to time
in accordance with the terms thereof, as such agreement may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof.
“Subsequent ECP Sale Percentage” has the meaning set forth in Section
6.03(a)(ii)(D).
“Subsequent Parent Sale Percentage” has the meaning set forth in Section
6.03(a)(ii)(B).
“Subsequent Tag-Along Sale” means any Transfer subject to Section 6.03(a).
“Substitute Partner” means (i) any Person (A) to whom a Partner (or transferee
thereof) Transfers all or any part of such Partner’s Interest in the
Partnership, and (B) which has been admitted to the Partnership as a Substitute
Partner pursuant to Section 6.01(e) and (ii) any Person that purchases any
Interest(s) pursuant to and in compliance with Sections 6.02, 6.03 or 6.06.
“Tag-Along Notice” has the meaning set forth in Section 6.03(b).
“Tag-Along Participant” has the meaning set forth in Section 6.03(a).
“Tag-Along Rights” has the meaning set forth in Section 6.03(a)(i)(D).

11

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

“Tag-Along Sale” means any Transfer subject to Section 6.03(a).
“Tag-Along Transferee” has the meaning set forth in Section 6.03(a).
“Third Party” means any “person” or related “group” of “persons” (as such terms
are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended) other than (i) Calpine, the Partnership, Parent or any of their
respective Affiliates or (ii) any employee benefit plan maintained by Calpine or
any of its subsidiaries.
“Transfer” means a sale, assignment, transfer, exchange, or other disposition of
or a pledge or grant of a security interest in or other encumbrance on any
Interest.
“Transferee” means a Person that acquires all or any portion of an Interest as a
result of a Transfer.
“Transferor” means a Person that Transfers all or any portion of an Interest to
another Person.
“Unreturned Capital” means, with respect to any Class A Partner, an amount equal
to the aggregate Capital Contributions made or deemed made by such Partner with
respect to such Partner’s Interest, minus the aggregate amount of such Capital
Contributions that have been returned to such Partner pursuant to Section 5.01
and Section 5.03.
1.02    Construction. Whenever the context requires, the gender of all words
used in this Agreement includes the masculine, feminine, and neuter. All
references to Articles and Sections refer to articles and sections of this
Agreement, and all references to Exhibits and Schedules are to exhibits and
schedules attached hereto, each of which is made a part hereof for all purposes.
The use herein of the word “include” or “including,” when following any general
statement, term or matter, will not be construed to limit such statement, term
or matter to the specific items or matters set forth following such word or to
similar items or matters, whether or not non-limiting language (such as “without
limitation” or “but not limited to” or words of similar import) is used with
reference thereto, but rather will be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement,
term or matter. The term “or” is not exclusive. The definitions set forth or
referred to in Section 1.01 will apply equally to both the singular and plural
forms of the terms defined. All accounting terms used herein and not otherwise
defined herein will have the meanings accorded them in accordance with GAAP and,
except as expressly provided herein, all accounting determinations will be made
in accordance with GAAP.
ARTICLE II.
FORMATION
2.01    Continuation of the Partnership. The Partnership was formed as a
Delaware limited partnership on January 10, 2018 by the filing of the Delaware
Certificate. The Partners desire to continue the Partnership for the purposes
and upon the terms and conditions set forth herein. As of the Effective Date,
the General Partner, Parent and the holders of Class B Interests party to this
Agreement constitute all of the Partners of the Partnership. Except as provided
herein, the rights, duties and liabilities of each Partner will be as provided
in the Act.

12

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

2.02    Name. The name of the Partnership is “CPN Management, LP”. Partnership
business will be conducted in such name or such other names that comply with
applicable law as the General Partner may select from time to time.
2.03    Registered Office; Registered Agent. The registered office of the
Partnership in the State of Delaware will be the initial registered office
designated in the Delaware Certificate or such other office (which need not be a
place of business of the Partnership) as the General Partner may designate from
time to time in the manner provided by law. The registered agent of the
Partnership in the State of Delaware will be the initial registered agent
designated in the Delaware Certificate, or such other Person or Persons as the
General Partner may designate from time to time in the manner provided by law.
2.04    Principal Place of Business. The principal place of business of the
Partnership will be at 717 Texas Avenue, Suite 100, Houston Texas 77002, or such
other location as the General Partner may designate from time to time, which
need not be in the State of Delaware. The Partnership may have such other
offices as the General Partner may determine appropriate.
2.05    Purpose; Powers. The purpose of the Partnership is to directly or
indirectly own Calpine and to issue the Class B Interests to the Class B
Partners. The Partnership shall have the power to engage in any and all lawful
businesses or activities and exercise any powers in which a limited partnership
may be engaged under applicable law, including the Act. The Partnership will
have all powers permitted to be exercised by a limited partnership organized in
the State of Delaware.
2.06    Fiscal Year. The fiscal year of the Partnership (the “Fiscal Year”) for
financial statement and federal income tax purposes will end on December 31st
unless otherwise determined by the General Partner or required under the Code.
2.07    Foreign Qualification Governmental Filings. The General Partner is
authorized to cause the Partnership to comply, to the extent procedures are
available, with all requirements necessary to qualify the Partnership as a
foreign limited partnership in any jurisdiction where the Partnership may
conduct business. Each Officer is authorized, on behalf of the Partnership, to
execute, acknowledge, swear to and deliver all certificates and other
instruments as may be necessary or appropriate in connection with such
qualifications. Further, each Partner will execute, acknowledge, swear to and
deliver all certificates and other instruments that are necessary or appropriate
to qualify, or, as appropriate, to continue or terminate such qualification of,
the Partnership as a foreign limited partnership in all such jurisdictions in
which the Partnership may conduct business.
2.08    Duration. The Partnership commenced on the date the Delaware Certificate
was filed with the Delaware Secretary of State, and the Partnership will be
perpetual in duration unless terminated pursuant to this Agreement.

13

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

ARTICLE III.
PARTNERS; REPRESENTATIONS AND WARRANTIES OF PARTNERS
3.01    Partners. As of the Effective Date, the General Partner, Parent and the
holders of Class B Interests party to this Agreement are the only Partners of
the Partnership. The names, addresses, type of Interests held by the Partners,
Benchmark Components, Capital Contributions and Percentage Interests of the
Partners are set forth on Exhibit A attached hereto and incorporated herein. The
General Partner is hereby authorized to complete or amend Exhibit A from time to
time to reflect the admission of additional Partners, the withdrawal of a
Partner, the change of address of any Partner, the Capital Contribution of a
Partner, the Percentage Interests of a Partner upon any issuance, redemption or
Transfer of such Partner’s Interests, and other information called for by
Exhibit A, and to correct or amend Exhibit A. Such completion, correction or
amendment may be made from time to time as and when the General Partner
considers it appropriate. The General Partner may, in its discretion, in lieu of
providing each Partner with a complete version of Exhibit A, elect to provide
any Partner with a redacted or partial version of Exhibit A containing only such
information as the General Partner determines appropriate under the
circumstances; provided, that any such redacted or partial version of Exhibit A
shall contain at least such Partner’s Capital Contributions and Percentage
Interests.
3.02    Additional Partners. Subject to the provisions of this Agreement,
including Section 8.03 and Article VI, as applicable, hereof upon the approval
of the General Partner, additional Persons may be admitted to the Partnership as
Partners and Interests may be created and issued to such Persons as determined
by the General Partner on such terms and conditions as the General Partner may
determine at the time of admission (including subject to such Person’s agreement
to be bound by and execution of an Award Agreement containing vesting and other
terms and conditions determined in the General Partner’s sole discretion),
provided that any Person that acquires Interests pursuant to a Transfer
permitted by, and effected in accordance with, this Agreement will be deemed to
be automatically approved by the General Partner. The terms of admission may
provide for the creation of different classes or series of Interests having
different rights, powers and duties. As a condition to the admission of any
Person as a Partner of the Partnership, such Person must agree to be bound by
the terms of this Agreement by executing and delivering a joinder to this
Agreement in the form attached hereto as Exhibit B, and must make the
representations and warranties set forth in Section 3.03 as of the date of such
Person’s admission as a Partner of the Partnership.
3.03    Representations and Warranties. Each Partner hereby represents and
warrants to the Partnership and each other Partner that, as of the Effective
Date (or, for any Partner that becomes a Partner after the Effective Date, as of
such date he, she or it becomes a Partner):
(a)    Power and Authority. Such Partner has full power and authority to enter
into this Agreement and to perform its obligations hereunder;
(b)    No Conflicts. The execution, delivery and performance of this Agreement
do not conflict with any other agreement or arrangement to which such Partner is
a party or by which it is or its assets are bound;

14

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

(c)    Own Account. Such Partner is and will be acquiring such Partner’s
Interest for investment purposes only for his, her or its own account and not
with a view to distribution, reoffer, resale or any other disposition not in
compliance with the Securities Act and applicable state securities laws;
(d)    Expertise. Such Partner alone, or together with such Partner’s
representatives, possesses such expertise, knowledge and sophistication in
financial and business matters generally, and in the type of transactions in
which the Partnership proposes to engage in particular, that such Partner is
capable of evaluating the merits and economic risks of acquiring and holding an
Interest, and such Partner is able to bear all such economic risks now and in
the future;
(e)    Access to Information. Such Partner has had access to all of the
information with respect to the Partnership and his, her or its Interest that
such Partner deems necessary to make a complete evaluation thereof;
(f)    Own Evaluation. Such Partner’s decision to acquire an Interest for
investment has been based solely upon the evaluation made by such Partner;
(g)    Awareness of Economic Risk. Such Partner is aware that such Partner must
bear the economic risk of such Partner’s investment in the Partnership for an
indefinite period of time because the Interests have not been registered under
the Securities Act or under the securities laws of any state, and, therefore,
such Interests cannot be sold unless they are subsequently registered under the
Securities Act and any applicable state securities laws or an exemption from
registration is available;
(h)    No Registration Rights. Such Partner is aware that only the Partnership
can take action to register Interests in the Partnership and that the
Partnership is under no such obligation and does not propose or intend to
attempt to do so;
(i)    Transfer Restrictions. Such Partner is aware that this Agreement provides
restrictions on the ability of a Partner to Transfer Interests, and such Partner
will not seek to effect any Transfer other than in accordance with such
restrictions; and
(j)    Accredited Investor. Such Partner is, and at such time that such Partner
acquires any Interests of the Partnership or makes Capital Contributions (if
any) to the Partnership, will be, an “accredited investor” within the meaning of
Rule 501 under the Securities Act, unless such Partner has notified the
Partnership in writing that such Partner is not an accredited investor.
3.04    Liability to Third Parties. No Limited Partner or Officer will have any
personal liability for any obligations or liabilities of the Partnership,
whether such liabilities arise in contract, tort or otherwise, except to the
extent that any such liabilities or obligations are expressly assumed in writing
by such Limited Partner or Officer. Nothing in this Section 3.04 comprises or
will be construed as an agreement by the Partnership to indemnify or hold
harmless any Limited Partner or Officer.

15

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

ARTICLE IV.
INTERESTS AND CAPITAL CONTRIBUTIONS
4.01    Interests. Each Partner’s interest in the Partnership will be
represented by its Capital Account and by Interests issued by the Partnership to
such Partner. Subject to Sections 3.02 and 8.03, additional Interests may be
issued from time to time as may be determined by the General Partner. The
General Partner may create additional series or classes through subdivision or
by issuance of Interests of such class or series.
4.02    Capital Contributions. As of the Effective Date, Parent has made the
Capital Contributions set forth on Exhibit A hereto. The General Partner will
determine, in its sole discretion at any time and from time to time, whether
Parent will make additional Capital Contributions.
4.03    Return of Contribution. Except as provided in this Agreement, a Partner
is not entitled to the return of any part of its Capital Contributions or to be
paid interest in respect of either its Capital Account or its Capital
Contributions. Any Capital Contribution that has not been repaid is not a
liability of the Partnership or of the other Partners. A Partner is not required
to contribute or to lend any cash or property to the Partnership to enable the
Partnership to return the other Partners’ Capital Contributions.
4.04    Withdrawal of Capital. Except as provided in Article VI, no Partner has
the right to withdraw any part of its Capital Contribution from the Partnership
or to receive the return of any part of its Interest in the Partnership prior to
its liquidation and termination pursuant to Article XI hereof.
4.05    Further Contributions. Except as specifically set forth in Section 4.02,
no Partner shall be required or permitted to make further Capital Contributions
to the Partnership.
4.06    Capital Accounts. The Partnership will maintain for each Limited Partner
owning any Interests a separate Capital Account with respect to such Interests
in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv)
and as set forth in this Agreement.
4.07    Award of Interests to Class B Partners.
(a)    Each issuance of Interests to a Class B Partner hereunder (an “Award”)
shall be subject to the terms and conditions of this Agreement and an Award
Agreement containing such vesting and other terms, conditions and limitations
(including provisions regarding repurchases of interests) as may be determined
in the sole discretion of the General Partner; provided that, (i) no Award
Agreement shall be entered into by the Partnership, and the Partnership shall
not issue any Award, without the prior approval of Parent, and (ii) except as
expressly provided in the Award Agreement or any employment agreement, if the
Award Agreement or employment agreement contains any provision that conflicts
with this Agreement, the applicable provision of this Agreement shall prevail
and control and the conflicting provision of such Award Agreement or employment
agreement (and only such provision) shall be of no force or effect. Each Award
Agreement shall be executed by an authorized Officer, on behalf of the
Partnership, and by such Class B Partner. No Class B

16

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

Partner or any employee of, or service provider to, the Partnership or any
subsidiary thereof shall execute or approve, on behalf of the Partnership, such
employee or service provider’s own, or such Class B Partner’s own Award
Agreement or any other instrument that directly relates to such employee or
service provider’s specific interests under this Agreement or the Award
Agreement. Neither this Agreement nor any Award Agreement shall confer upon any
Class B Partner or any other Person any right with respect to continuation of
service with the Partnership or any subsidiary thereof, nor shall it interfere
in any way with the right of the Partnership or any subsidiary thereof to
terminate any employee’s, service provider’s or any other Person’s service at
any time. Absent express provisions to the contrary, Awards and related benefits
or payments shall not be deemed compensation for purposes of computing benefits
or contributions under any retirement plan of the Partnership or any subsidiary
thereof and shall not affect any benefits under any other benefit plan of any
kind or subsequently in effect under which the availability or amount of
benefits is related to level of compensation.
(b)    A separate series of Class B Interests shall be created with respect to
the Awards issued to any Class B Partner on any given issuance date, and shall
be set forth on Exhibit A along with the applicable information determined in
accordance with Section 4.07(c) below.
(c)    The General Partner shall determine the benchmark amount with respect to
each series of Class B Interests as of a given date, which amount shall, unless
otherwise specified by the General Partner or as provided in Section 4.07(e), be
the sum of (x) the amount set forth with respect to such series in the
“Benchmark Component” column on Exhibit A (with such “Benchmark Component”
representing the Fair Market Value of the equity Interests of the Partnership at
such time such series is issued or such greater amount as determined by the
General Partner in its sole discretion) and (y) the amount of all Capital
Contributions (if any) made on or after the date such series is issued (the
“Benchmark Amount”). This Section 4.07(c), together with the provisions of
Section 5.02, is intended to result in each series of Class B Interests being
treated as a “profits interest” for U.S. federal income tax purposes as of the
date such series is issued. In the event that a taxing authority determines that
the Class B Interests did not qualify as “profits interests” for federal income
tax purposes either (x) as a result of a disposition by a Class B Partner of
Class B Interests within two years following the date of grant or (y) on the
date of grant, Parent shall indemnify and hold harmless the applicable Class B
Partner from and against the excess, if any, of such Class B Partner’s actual
liabilities for income taxes (and any related interest imposed by a taxing
authority) over such Class B Partner’s liabilities for income taxes had the
Class B Interests qualified as a “profits interest” for federal income tax
purposes; provided, that such Class B Partner reports the Class B Interests as
“profits interests” on his or her tax return and does not file an election under
Section 83(b) of the Code with the Internal Revenue Service with respect to the
Class B Interests; provided, further, that the amount of any such
indemnification shall be reduced (but not below zero) by the tax benefit that
such Class B Partner is expected to realize resulting from the tax basis that
such Class B Partner will have in the Class B Interest for federal income tax
purposes as a result of such Class B Interests failing to qualify as “profits
interests”.

17

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

(d)    Except as provided in Section 4.07(e), in no event shall the aggregate
amount of outstanding Class B Interests held by Class B Partners represent an
aggregate Percentage Interest (including both vested and unvested Percentage
Interests) in excess of 6%, of which an aggregate Percentage Interest of 5.5%
shall be granted as soon as practicable following the Initial Effective Date.
The allocation of the remaining 0.5% among the employees of Calpine shall be
made by the Chief Executive Officer of Calpine, with the approval of the General
Partner.
(e)    In addition to the Class B Interests described in Section 4.07(d), the
Partnership shall grant Class B Interests with an aggregate Percentage Interest
of 2.5% (the “Performance Class B Interests”). Each Performance Class B Interest
shall have a Benchmark Component equal to the greater of (i) 2.00x the aggregate
Fair Market Value of the equity Interests of the Partnership as of the Initial
Effective Date and (ii) the aggregate Fair Market Value of the equity Interests
of the Partnership as of the date such Performance Class B Interest is granted
and, notwithstanding Section 4.07(c), shall have a Benchmark Amount equal to the
sum of (x) the Benchmark Component and (y) 2.00x the amount of all Capital
Contributions (if any) made on or after the Initial Effective Date. The
Performance Class B Interests shall vest only upon a Change in Control (as
defined in the applicable Award Agreement) that occurs within seven (7) years
following the Initial Effective Date, subject to the holder’s continuous
employment with Calpine or any of its subsidiaries through the date of such
Change in Control; provided that, in the event of such a Change in Control
arising from a transaction or series of transactions in which ECP directly or
indirectly Transfers to a Third Party securities of Parent possessing less than
100% of the total combined voting power of the securities of Parent beneficially
owned, directly or indirectly, in the aggregate by ECP as of the Initial
Effective Date (such combined voting power as of the Initial Effective Date, the
“ECP Aggregate Ownership”), then only a portion of the Performance Class B
Interests held by each Limited Partner shall vest, with such portion equal to
the percentage of the ECP Aggregate Ownership directly or indirectly Transferred
by ECP in such Change in Control, and the remainder of such Limited Partner’s
Performance Class B Interests shall be forfeited upon such Change in Control
without payment therefor. Any unvested Performance Class B Interests shall be
forfeited on the day after the seventh (7th) anniversary of the Initial
Effective Date without payment therefor. The allocation of the Performance Class
B Interests among the employees of Calpine shall be made by the Chief Executive
Officer of Calpine, with the approval of the General Partner.
ARTICLE V.
DISTRIBUTIONS, REDEMPTIONS AND ALLOCATIONS
5.01    Distributions. Subject to Sections 5.02, 5.03, 5.04, and 5.06, Available
Cash will be applied or distributed to the Partners in accordance with the
provisions of this Section 5.01 solely at the discretion of the General Partner,
as follows:
(a)    first, to the Class A Partners, pro rata in accordance with their
respective amounts of Unreturned Capital, until each such Partner’s Unreturned
Capital is reduced to zero; and

18

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

(b)    second, among all of the Limited Partners in accordance with their
respective Percentage Interests as of the date of such distribution;
provided that, except for distributions pursuant to Section 5.03, any
distributions with respect to any Percentage Interests that are not vested
pursuant to the applicable Award Agreement shall not be distributed to such
holder pursuant to this Section 5.01(b) and shall be held by the Partnership in
a segregated money market account (separate from and not commingled with the
general funds of the Partnership) and shall be credited with interest that
accrues in accordance with the terms of such account. Any such amount with
respect to any unvested Percentage Interests (including any interest with
respect thereto) shall be distributed to the holder of such Percentage Interest
upon the vesting of such Percentage Interest; provided that, if any such
unvested Percentage Interest is forfeited or is otherwise cancelled or ceases to
remain outstanding prior to vesting in accordance with the terms of the relevant
Award Agreement, then such amount (including any interest with respect thereto)
shall be distributable to the Partners pursuant to this Section 5.01.
5.02    Benchmark Amounts; Other Adjustments. Notwithstanding anything to the
contrary in Section 5.01, no distribution (other than any tax distribution
pursuant to Section 5.03) shall be made to any Class B Partner with respect to
any series of Class B Interests until the aggregate distributions made to all
Partners (or, in the case of the Performance Class B Interests, to the Class A
Partner) pursuant to Section 5.01 (including pursuant to the immediately
following sentence) from the date of issuance of such series equals the
Benchmark Amount of such series. An amount equal to the amount of any reduction
in distributions to the Class B Partners resulting from the application of the
foregoing sentence (i.e., the incremental amount that the Class B Partners would
have otherwise been distributed with respect to a series of Class B Interests)
shall be distributed, in accordance with Section 5.01(b), to all of the Limited
Partners, including the Class B Partners with respect to any series of Class B
Interests with a lower Benchmark Amount than that of the series with respect to
which each Class B Partner’s distributions were reduced and which would
otherwise be entitled to participate in such distribution pursuant to Section
5.01(b), taking into account the application of the first sentence of this
Section 5.02.
5.03    Tax Distributions. Notwithstanding Sections 5.01 or 5.02 hereof, to the
extent the General Partner determines that the Partnership has Available Cash,
the Partnership shall make quarterly distributions to each Partner in an amount
equal to such Partner’s Assumed Tax Liability (if any); provided that if the
amount of Available Cash is not sufficient to make the foregoing payments in
full, the amount that is available will be distributed among the Partners in the
same proportion as if the full amount were available. Distributions made
pursuant to this Section 5.03 will be treated as advances of distributions to be
made under Sections 5.01, 5.02 and 11.02 of this Agreement and will be credited
against and will reduce the next future distributions to be made to each Partner
under Sections 5.01, 5.02 and 11.02 of this Agreement.
5.04    Distributions in Error. Any distributions pursuant to this Article V
made in error or in violation of Section 18-607(a) of the Act, will, upon demand
by the General Partner, be returned to the Partnership.

19

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

5.05    Allocations.
(a)    Profits and Losses. Profits and Losses will be determined and allocated
with respect to each Fiscal Year of the Partnership as of the end of such Fiscal
Year, at such times as the Partnership assets are revalued in accordance with
the definition of Gross Asset Value and at such other times as determined
appropriate by the General Partner. Subject to the other provisions of this
Article V, an allocation to a Partner of a share of Profits or Losses will be
treated as an allocation of the same share of each item of income, gain, loss or
deduction that is taken into account in computing those Profits or Losses.
Subject to the other provisions of this Article V, for purposes of adjusting the
Capital Accounts of the Partners, the Profits and Losses for any Fiscal Year or
other period will be allocated among the Partners in a manner such that the
Adjusted Capital Account of each Partner immediately after making such
allocation is, as nearly as possible, equal (proportionately) to the
distributions that would be made to such Partner pursuant to Section
11.02(c)(iii) if the Partnership were dissolved, its affairs wound up and its
assets sold for cash equal to their Gross Asset Value, all Partnership
liabilities were satisfied (limited with respect to each Nonrecourse Liability
to the Gross Asset Value of the asset securing such liability), and the net
assets of the Partnership were distributed in accordance with Section
11.02(c)(iii) to the Partners immediately after making such allocation (for this
purpose treating all Interests held by all Partners as being 100% vested).
(b)    Regulatory Allocations. Notwithstanding the foregoing provisions of
Section 5.05(a), the following special allocations will be made in the following
order of priority:
(i)    If there is a net decrease in Partnership Minimum Gain during a
Partnership taxable year, then each Partner will be allocated items of
Partnership income and gain for such taxable year (and, if necessary, for
subsequent years) in an amount equal to such Partner’s share of the net decrease
in Partnership Minimum Gain, determined in accordance with Treasury Regulations
Section 1.704-2(g)(2). This Section 5.05(b)(i) is intended to comply with the
minimum gain chargeback requirement of Treasury Regulations Section 1.704-2(f)
and will be interpreted consistently therewith.
(ii)    If there is a net decrease in Partner Minimum Gain attributable to a
Partner Nonrecourse Debt during any Partnership taxable year, each Partner who
has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(5), will be
specially allocated items of Partnership income and gain for such taxable year
(and, if necessary, subsequent years) in an amount equal to such Partner’s share
of the net decrease in Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in a manner consistent with the provisions of
Treasury Regulations Section 1.704-2(g)(2). This Section 5.05(b)(ii) is intended
to comply with the partner nonrecourse debt minimum gain chargeback requirement
of Treasury Regulations Section 1.704-2(i)(4) and will be interpreted
consistently therewith.
(iii)    If any Partner unexpectedly receives an adjustment, allocation, or
distribution of the type contemplated by Treasury Regulations Section 1.704-1(b)

20

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

(2)(ii)(d)(4), (5) or (6), items of income and gain will be allocated to all
such Partners (in proportion to the amounts of their respective deficit Adjusted
Capital Accounts) in an amount and manner sufficient to eliminate the deficit
balance in the Adjusted Capital Account of such Partner as quickly as possible,
provided that an allocation pursuant to this Section 5.05(b)(iii) will be made
if and only to the extent that such Partner would have an Adjusted Capital
Account deficit after all other allocations provided for in this Article V have
been tentatively made as if this Section 5.05(b)(iii) were not in this
Agreement. It is intended that this Section 5.05(b)(iii) qualify and be
construed as a “qualified income offset” within the meaning of Treasury
Regulations Section 1.704-1(b)(2)(ii)(d).
(iv)    If the allocation of Losses to a Partner as provided in Section 5.05(a)
hereof would create or increase an Adjusted Capital Account deficit, there will
be allocated to such Partner only that amount of Losses as will not create or
increase an Adjusted Capital Account deficit. The Losses that would, absent the
application of the preceding sentence, otherwise be allocated to such Partner
will be allocated to the other Partners in accordance with their relative
positive Adjusted Capital Account balances, subject to the limitations of this
Section 5.05(b)(iv).
(v)    To the extent that an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or,
as the result of a distribution to a Partner in complete liquidation of its
Interest, Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into
account in determining Capital Accounts, the amount of such adjustment to the
Capital Accounts will be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases such basis), and
such gain or loss will be specially allocated to the Partners in accordance with
their Percentage Interests in the Partnership in the event that Treasury
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom
such distribution was made in the event that Treasury Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
(vi)    The Nonrecourse Deductions for each taxable year of the Partnership will
be allocated to the Partners in proportion to their respective Percentage
Interests.
(vii)    The Partner Nonrecourse Deductions will be allocated each year to the
Partner that bears the economic risk of loss (within the meaning of Treasury
Regulations Section 1.752-2) for the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable.
(viii)    The allocations set forth in Sections 5.05(b)(i) through (vii) hereof
(the “Regulatory Allocations”) are intended to comply with certain requirements
of Treasury Regulations Sections 1.704-1(b) and 1.704-2(i). It is the intent of
the Partners that, to the extent possible, all Regulatory Allocations will be
offset either with other Regulatory Allocations or with special allocations of
other items of Partnership income, gain, loss, credit or deduction pursuant to
this Section 5.05(b)(viii). Therefore, notwithstanding Section 5.05(a), the
General Partner will make

21

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

such offsetting special allocations of Partnership income, gain, loss or
deduction so that, to the extent possible, the net amount of such allocations of
other items pursuant to this Section 5.05(b)(viii) and the Regulatory
Allocations to each Partner will be equal to the net amount that would have been
allocated to each such Partner if the Regulatory Allocations had not occurred.
(c)    Tax Allocations.
(i)    Except as provided in Section 5.05(c)(ii) hereof, for income tax purposes
under the Code and the Treasury Regulations, each Partnership item of income,
gain, loss and deduction will be allocated among the Partners as its correlative
item of “book” income, gain, loss or deduction is allocated pursuant to this
Article V.
(ii)    Tax items with respect to any Partnership asset that is contributed to
the Partnership with a Gross Asset Value that varies from its tax basis in the
hands of the contributing Partner immediately preceding the contribution will be
allocated between the Partners for income tax purposes pursuant to the Treasury
Regulations promulgated under Code Section 704(c) so as to take into account
such variation. The Partnership will account for such variation under any method
approved under Code Section 704(c) and the applicable Treasury Regulations. If
the Gross Asset Value of any Partnership asset is adjusted pursuant to the
definition of “Gross Asset Value” herein, subsequent allocations of income,
gain, loss, deduction and credit with respect to such Partnership asset will
take account of any variation between the adjusted basis of such Partnership
asset for federal income tax purposes and its Gross Asset Value in a manner
consistent with Code Section 704(c) and the Treasury Regulations promulgated
thereunder. Allocations pursuant to this Section 5.05(c)(ii) are solely for
purposes of federal, state and local taxes and will not affect, or in any way be
taken into account in computing, any Partner’s Capital Account or share of
Profits, Losses and any other items or distributions pursuant to any provision
of this Agreement.
(d)    Other Provisions.
(i)    For any Fiscal Year or other period during which any part of an Interest
in the Partnership is transferred between Partners or to another person, the
portion of the Profits, Losses and other items of income, gain, loss, deduction
and credit that are allocable with respect to such part of an Interest in the
Partnership will be apportioned between the transferor and the transferee under
any method allowed pursuant to Section 706 of the Code and the applicable
Treasury Regulations as determined in good faith by the General Partner.
(ii)    In the event that the Code or any Treasury Regulations require
allocations of items of income, gain, loss, deduction or credit different from
those set forth in this Article V, the General Partner is hereby authorized to
make new allocations in reliance on the Code and such Treasury Regulations, and
no such new allocation will give rise to any claim or cause of action by any
Partner.

22

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

(iii)    For purposes of determining a Partner’s proportional share of the
Partnership’s “excess nonrecourse liabilities” within the meaning of Treasury
Regulations Section 1.752-3(a)(3), each Partner’s interest in Profits will be
equal to its Percentage Interest.
(iv)    The Partnership will follow the proposed Treasury Regulations that were
issued on May 24, 2005 regarding the issuance of partnership equity for services
(including Prop. Treas. Reg. §§1.83-3, 1.83-6, 1.704-1, 1.706-3, 1.721-1 and
1.761-1), as such regulations may be subsequently amended (the “Proposed
Regulations”), upon the issuance of Class B Interests issued for services
rendered or to be rendered to or for the benefit of the Partnership or a
subsidiary thereof, until final Treasury Regulations or other succeeding legal
authorities regarding these matters are issued. In furtherance of the foregoing,
the definition of Capital Accounts and Gross Asset Value, and the allocations of
Profits and Losses of the Partnership set forth in this Agreement, will be made
in a manner that is consistent with the Proposed Regulations. The General
Partner is expressly authorized by each Partner to elect to apply the safe
harbor set forth in the Proposed Regulations if the provisions of the Proposed
Regulations and the proposed Revenue Procedure described in IRS Notice 2005-43,
or provisions similar thereto, are adopted as final (or temporary) Treasury
Regulations. If the General Partner determines that the Partnership should make
such election, the General Partner is hereby authorized to amend this Agreement
without the consent of any other Partner to provide that (A) the Partnership is
authorized and directed to elect the safe harbor, (B) the Partnership and each
of its Partners (including any person to whom a partnership interest is
transferred in connection with the performance of services) will comply with all
requirements of the safe harbor with respect to all Class B Interests
transferred in connection with the performance of services while such election
remains in effect and (C) the Partnership and each of its Partners will take all
actions necessary, including providing the Partnership with any required
information, to permit the Partnership to comply with the requirements set forth
or referred to in the applicable Proposed Regulations for such election to be
effective until such time (if any) as the General Partner determines, in its
discretion, that the Partnership should terminate such election. The General
Partner is further authorized to amend this Agreement to the extent the General
Partner determines in its discretion that such modification is necessary or
desirable as a result of the issuance of such Regulations relating to the tax
treatment of the transfer of a partnership interest in connection with the
performance of services. Notwithstanding anything to the contrary in this
Agreement, each Partner expressly confirms and agrees that it will be legally
bound by any such amendment.
(e)    Valuation; Revaluation. For tax purposes only, valuations will be made by
the General Partner or by independent third parties appointed by the General
Partner and deemed qualified by the General Partner to render an opinion as to
the value of the Partnership’s assets, using such methods and considering such
information relating to the investments, assets and liabilities of the
Partnership as the General Partner or independent

23

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

third party, as the case may be, may determine in the reasonable discretion of
the General Partner.
5.06    Withholding. The Partnership may withhold in connection with
distributions, allocations or portions thereof (or any other amounts that are
withholdable in respect of Awards or otherwise in respect of a Partner
hereunder) if it is required to do so by any applicable rule, regulation, or
law, and each Partner hereby authorizes the Partnership to withhold from or pay
on behalf of or with respect to such Partner any amount of federal, state, local
or foreign taxes that the General Partner determines that the Partnership is
required to withhold or pay with respect to any such Partner pursuant to this
Agreement (including any amounts payable in respect of Awards hereunder and
including any “imputed underpayment” within the meaning of Section 6232 of the
Code). Any amounts withheld or paid pursuant to this Section 5.06 will be
treated as having been distributed to such Partner. To the extent that the
cumulative amount of such withholding or payments exceeds the amount actually
withheld from distributions to which such Partner would otherwise then have been
entitled, the amount of such excess will be considered a loan from the
Partnership to such Partner, with interest accruing at the Prime Rate plus two
percent. Such loan may, at the option of the General Partner, be satisfied (a)
out of the next distributions to which such Partner would otherwise be
subsequently entitled, or (b) by the immediate payment in cash by such Partner
to the Partnership of such excess amount. The General Partner, on behalf of the
Partnership, may take any other action it determines to be necessary or
appropriate in connection with any obligation or possible obligation to impose
withholding pursuant to any tax law or to pay any amounts on account of tax with
respect to a Partner. Each Partner hereby unconditionally and irrevocably grants
to the Partnership a security interest in such Partner’s Interests to secure
such Partner’s obligation to pay to the Partnership any amounts required to be
paid by that Partner pursuant to this Section 5.06. Each Partner will take such
actions as the Partnership may request in order to perfect or enforce the
security interest created hereunder.
ARTICLE VI.    
TRANSFERS OF INTERESTS
6.01    Transfers.
(a)    Restricted and Unrestricted Transfers. The General Partner and Parent may
each Transfer all or any portion of its Interest from time to time to any
Person, including to any Affiliate. None of the Class B Partners may Transfer
all or any portion of their respective Interests without the prior written
approval of the General Partner in its sole discretion, except in the case of
Transfers effected pursuant to and in accordance with this Section 6.01 and
Sections 6.02, 6.03, 6.05 and 6.06 of this Agreement (including pursuant to the
power of attorney in Section 6.08) or for bona fide estate planning purposes.
Each Class B Partner further agrees that, in connection with any Transfer by
such Class B Partner (including any Transfer approved by the General Partner),
such Class B Partner will, if requested by the General Partner, deliver to the
Partnership an opinion of counsel, in form and substance reasonably satisfactory
to the General Partner and counsel for the Partnership, to the effect that such
Transfer is not in violation of this Agreement, the Securities Act or the
securities laws of any state.

24

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

(b)    Prohibited Tax Consequences. No Transfer may be effected by any Class B
Partner if such Transfer would cause the Partnership to be treated as an
association or “publicly traded partnership” taxable as a corporation for
federal income tax purposes. In addition, unless otherwise consented to by the
General Partner, no Transfer may be effected by any Class B Partner if such
Transfer would cause the Partnership not to be able to qualify for the safe
harbor contained in Treasury Regulations Section 1.7704-1(h) and if there is a
reasonable risk (as determined by the General Partner) that the Partnership may
be treated as a “publicly traded partnership” taxable as a corporation for US
federal income tax purposes.
(c)    VOID TRANSFERS. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT,
ANY PURPORTED TRANSFER IN VIOLATION OF ANY OF THE PROVISIONS OF THIS ARTICLE VI
WILL BE NULL AND VOID AND WILL HAVE NO FORCE OR EFFECT.
(d)    Admission of Transferees as Partners. Until such time, if any, as a
Transferee is admitted to the Partnership as a Substitute Partner pursuant to
Section 6.01(e): provided such Transfer is permitted under the terms of this
Agreement, (i) such Transferee shall receive only, to the extent Transferred,
the Economic Interest associated with the Interest so Transferred, and (ii) such
Transferee shall not be entitled or enabled to exercise any other rights or
powers of a Partner, such other rights remaining with the Transferring Partner
(even if such Partner has transferred such Partner’s entire Economic Interest in
the Partnership to one or more Transferees). If any Transferee desires to make a
further assignment of any Economic Interest in the Partnership, such Transferee
shall be subject to all of the provisions of this Agreement to the same extent
and in the same manner as any Partner desiring to make such a Transfer.
(e)    Substitute Partners. A Transferee shall become a Substitute Partner only
if and when each of the following conditions are satisfied: (i) the General
Partner consents to such admission and (ii) the Transferee (A) provides such
information concerning the Transferee’s financial capacities and investment
experience as may be reasonably requested by the General Partner, (B) agrees to
become a party to this Agreement as a Partner, and (C) executes a joinder in the
form attached as Exhibit B hereto acknowledging that such Transferee agrees to
be bound by the terms hereof, together with such other written instruments of
Transfer in a form reasonably satisfactory to the General Partner. Upon
admission of any Substitute Partner, the Transferor shall (x) cease to be a
Partner with respect to the portion of the Interest so Transferred to the extent
such obligations are Transferred and assumed, (y) be released from any
obligations arising after the date of such Transfer with respect to the portion
of the Interest so Transferred, and (z) Exhibit A shall be amended to reflect
the name and address of such Substitute Partner and to eliminate, if necessary,
the name and address of the predecessor of such Substitute Partner and to
reflect the Interest of such Substitute Partner and to eliminate or adjust, if
necessary, the Interest of the predecessor of such Substitute Partner.
Notwithstanding the foregoing, any Person that purchases any Interest pursuant
to and in accordance with Sections 6.02, 6.03, or 6.06 shall be deemed
Substitute Partners without regard to the foregoing.

25

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

6.02    Drag-Along Rights.
(a)    General. If, at any time, (1) Parent elects to consummate a Transfer to
any Person or Persons (other than to any Person who is an Affiliate of Parent at
the time of such Transfer) in a bona fide arm’s-length transaction or series of
related transactions (including by way of a purchase agreement, tender offer,
merger or other business combination transaction or otherwise) of Interests
consisting of more than 50% of the aggregate Class A Interests held by Parent on
the Effective Date, (2) ECP elects to consummate a Transfer to any Person or
Persons (other than to any Person who is an Affiliate of ECP at the time of such
Transfer) in a bona fide arm’s-length transaction or series of related
transactions (including by way of a purchase agreement, tender offer, merger or
other business combination transaction or otherwise) that would result in the
Transfer of Parent Interests by ECP exceeding in the aggregate an amount equal
to (x) 17.7588% of the aggregate Parent Interests as of the Effective Date plus
(y) 50% of any additional Parent Interests acquired by ECP after the Effective
Date or (3) ECP elects to consummate a Transfer to any Person or Persons (other
than to any Person who is an Affiliate of ECP at the time of such Transfer) in a
bona fide arm’s-length transaction or series of related transactions (including
by way of a purchase agreement, tender offer, merger or other business
combination transaction or otherwise) that would result in ECP (directly or
indirectly) no longer being the largest holder of Parent Interests (each of
clauses (1), (2) and (3) being a “Drag-Along Sale” and the recipient in any
Drag-Along Sale being a “Drag-Along Transferee”), Parent or ECP, as applicable,
may, subject to the other provisions of this Section 6.02, require each other
Limited Partner (including each Class B Partner) to Transfer a percentage of its
Interests (and solely in the case of a Class B Partner, its vested Class B
Interests) equal to the percentage of the aggregate Class A Interests of Parent
or ECP’s (direct or indirect) Parent Interests, as applicable, proposed to be
Transferred (such rights arising under clauses (1) through (3) of this Section
6.02(a) being referred to as “Drag-Along Rights”). Each Limited Partner or Class
B Partner Transferee required to Transfer its Interests pursuant to this Section
6.02 shall be referred to herein as a “Drag-Along Co-Seller”. In connection with
any Drag-Along Sale:
(i)    subject to Section 6.02(b), each Drag-Along Co-Seller will transfer the
applicable percentage of its Interests (and solely in the case of a Class B
Partner, its vested Class B Interests) on substantially the same terms (other
than aggregate price) and conditions applicable to, and, for the same type of
consideration payable to, Parent or ECP, as applicable, at the price calculated
in accordance with Section 6.02(a)(ii);
(ii)    the aggregate purchase price payable for the Interests purchased by a
Drag-Along Transferee will be allocated among Parent or ECP, as applicable, and
Drag-Along Co-Sellers based upon the Hypothetical Value of such Partner’s
Interests so Transferred; and
(iii)    any indemnification or other obligations will be apportioned pro rata
as among Parent or ECP, as applicable, and the Drag-Along Co-Sellers, other than

26

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

with respect to representations, warranties and covenants made individually by a
Partner or other Drag-Along Co-Seller (e.g., representations as to title or
authority or representations qualified by the individual knowledge of such or
other Drag-Along Co-Seller).
(b)    Terms of Sale. In connection with a Drag-Along Sale, the Drag-Along
Co-Sellers will execute such documents, and make such representations,
warranties, covenants and indemnities, as are executed and made by Parent or
ECP, as applicable. At the request of the Drag-Along Transferee, all or a
portion of the purchase price payable to the Partners and the other Drag-Along
Co-Sellers in connection with a Drag-Along Sale may be held back in an escrow
account for the purpose of satisfying such Partners’ and such other Drag-Along
Co-Sellers’ obligations under the applicable documents, including indemnity
obligations. In connection with a Drag-Along Sale, the Drag-Along Co-Sellers
will also (A) consent to and raise no objections against the Drag-Along Sale or
the process pursuant to which the Drag-Along Sale was arranged, (B) waive any
dissenter’s rights and other similar rights, (C) take all actions reasonably
required or desirable or requested by Parent or ECP, as applicable, to
consummate such Drag-Along Sale and (D) comply with the terms of the
documentation relating to the Drag-Along Sale.
(c)    Drag-Along Notice. The rights set forth in this Section 6.02 will be
exercised by Parent or ECP, as applicable, giving written notice (the
“Drag-Along Notice”) to each other Partner, at least 30 days prior to the date
on which Parent or ECP, as applicable, expect to consummate the Drag-Along Sale.
In the event that the material terms and/or conditions set forth in the
Drag-Along Notice are thereafter amended in any material respect, Parent or ECP,
as applicable, will give written notice (an “Amended Drag-Along Notice”) of the
amended terms and conditions of the proposed Transfer to each other Partner.
Each Drag-Along Notice and Amended Drag-Along Notice will set forth: (i) the
name and address of the Drag-Along Transferee, (ii) the proposed amount and form
of consideration and terms and conditions of payment offered by the Drag-Along
Transferee, and (iii) the material terms of the proposed transaction including
the expected closing date of the transaction.
(d)    Upstream Sale. The provisions of this Section 6.02 will not in any event
be interpreted so as to apply to any indirect sale, transfer, exchange or other
disposition of Interests by Parent or ECP to a Drag-Along Transferee, except for
any sale, transfer, exchange or other disposition of interests in ECP IV Calpine
Holdings, LP, Volt Energy Holdings, LP or any other Person set up by ECP for the
sole purpose of only holding, directly or indirectly, the Parent Interests.
6.03    Tag-Along Rights.
(a)    General. If (1) Parent elects to consummate a Transfer to any Person or
Persons (other than to any Person who is an Affiliate of Parent at the time of
such Transfer) in a bona fide arm’s-length transaction or series of related
transactions (including by way of a purchase agreement, tender offer, merger or
other business combination transaction or otherwise) that, when combined with
all prior Transfers of Class A Interests by Parent to any Person or Persons
(other than to any Person who is an Affiliate of Parent at the time of

27

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

such Transfer), would result in the Transfer of more than 50% of the aggregate
Class A Interests held by Parent on the Effective Date, (2) ECP elects to
consummate a Transfer to any Person or Persons (other than to any Person who is
an Affiliate of ECP at the time of such Transfer) in a bona fide arm’s-length
transaction or series of related transactions (including by way of a purchase
agreement, tender offer, merger or other business combination transaction or
otherwise) that, when combined with all prior Transfers of Parent Interests by
ECP to any Person or Persons (other than to any Person who is an Affiliate of
ECP at the time of such Transfer), would result in the Transfer of Parent
Interests by ECP exceeding in the aggregate an amount equal to (x) 17.7588% of
the aggregate Parent Interests as of the Effective Date plus (y) 50% of any
additional Parent Interests acquired by ECP after the Effective Date or (3) ECP
elects to consummate a Transfer to any Person or Persons (other than to any
Person who is an Affiliate of ECP at the time of such Transfer) in a bona fide
arm’s-length transaction or series of related transactions (including by way of
a purchase agreement, tender offer, merger or other business combination
transaction or otherwise) that would result in ECP (directly or indirectly) no
longer being the largest holder of Parent Interests (each of clauses (1), (2)
and (3) being an “Initial Tag-Along Sale”), then, subject to the other
provisions of this Section 6.03(a), each Partner may participate in the proposed
Transfer by Parent or ECP, as applicable, to the Tag-Along Transferee (as
defined below). In addition, (x) following the occurrence of an Initial
Tag-Along Sale under clause (1) of the prior sentence of this Section 6.03(a),
if Parent elects to Transfer any Class A Interests to any Person or Persons
(other than to any Person who is an Affiliate of Parent at the time of such
Transfer) in a bona fide arm’s-length transaction or series of related
transactions (including by way of a purchase agreement, tender offer, merger or
other business combination transaction or otherwise) or (y) following the
occurrence of an Initial Tag-Along Sale under clauses (2) or (3) of the prior
sentence of this Section 6.03(a), if ECP elects to Transfer any Parent Interests
to any Person or Persons (other than to any Person who is an Affiliate of ECP at
the time of such Transfer) in a bona fide arm’s-length transaction or series of
related transactions (including by way of a purchase agreement, tender offer,
merger or other business combination transaction or otherwise) (each of clauses
(x) and (y) being a “Subsequent Tag-Along Sale”, either an Initial Tag-Along
Sale or a Subsequent Tag-Along Sale being a “Tag-Along Sale” and the recipient
in any Tag-Along Sale being a “Tag-Along Transferee”), then, subject to the
other provisions of this Section 6.03(a), each Partner may participate in the
proposed Transfer by Parent or ECP, as applicable, to the Tag-Along Transferee.
Each Partner, other than Parent, shall be referred to herein as a “Tag-Along
Participant” solely to the extent that such Partner is entitled to participate
in such proposed Transfer pursuant to this Section 6.03(a).
(i)    Subject to Section 6.03(b), each Tag-Along Participant may participate in
such transaction by Transferring to the Tag-Along Transferee a percentage of its
Interests (and solely in the case of a Class B Partner, its vested Class B
Interests) equal to:
(A)
in the case of an Initial Tag-Along Sale under clause (1) of the first sentence
of Section 6.03(a), the product of (1) the Initial Parent Sale

28

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

Percentage multiplied by (2) such Tag-Along Participant’s Interests at such
time;
(B)
in the case of a Subsequent Tag-Along Sale under clause (x) of the second
sentence of Section 6.03(a), the product of (1) the Subsequent Parent Sale
Percentage multiplied by (2) such Tag-Along Participant’s Interests at such
time;

(C)
in the case of an Initial Tag-Along Sale under clause (2) or (3) of the first
sentence of Section 6.03(a), the product of (1) the Initial ECP Sale Percentage
multiplied by (2) such Tag-Along Participant’s Interests at such time; and

(D)
in the case of a Subsequent Tag-Along Sale under clause (y) of the second
sentence of Section 6.03(a), the product of (1) the Subsequent ECP Sale
Percentage multiplied by (2) such Tag-Along Participant’s Interests at such time
(such participation rights in the prior clauses (A), (B), (C) and (D) being
hereinafter referred to as “Tag-Along Rights”).

(ii)    As used herein:
(A)
“Initial Parent Sale Percentage” shall be equal to a percentage, (1) the
numerator of which shall be equal to the Class A Interests proposed to be
Transferred by Parent in the Initial Tag-Along Sale under clause (1) of the
first sentence of Section 6.03(a) (including any such Class A Interests
Transferred by Parent prior to such Initial Tag-Along Sale) and (2) the
denominator of which shall be an amount equal to (i) the aggregate Class A
Interests held by Parent on the Effective Date plus (ii) any additional Class A
Interests acquired by Parent after the Effective Date and prior to the
applicable Initial Tag-Along Sale;

(B)
“Subsequent Parent Sale Percentage” shall be equal to a percentage, (1) the
numerator of which shall be equal to the Class A Interests proposed to be
Transferred by Parent in the applicable Subsequent Tag-Along Sale under clause
(x) of the second sentence of Section 6.03(a) and (2) the denominator of which
shall be the aggregate Class A Interests held by Parent as of immediately prior
to the applicable Subsequent Tag-Along Sale; provided, however, that, in the
event that the applicable Tag-Along Participant has not exercised in full its
Tag-Along Rights in all previous Tag-Along Sales, such Tag-Along Participant
shall have the right to include all or any such unexercised Tag-Along Rights in
the then applicable Tag-Along Sale;

(C)
“Initial ECP Sale Percentage” shall be equal to a percentage, (1) the numerator
of which shall be equal to the Parent Interests proposed to be Transferred by
ECP in the Initial Tag-Along Sale under clause (2) or (3) of the first sentence
of Section 6.03(a) (including any such Parent Interests Transferred by ECP prior
to such Initial Tag-Along

29

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

Sale) and (2) the denominator of which shall be an amount equal to (i) the
aggregate Parent Interests held by ECP on the Effective Date, plus (ii) any
additional Parent Interests acquired by ECP after the Effective Date and prior
to the applicable Initial Tag-Along Sale; and
(D)
“Subsequent ECP Sale Percentage” shall be equal to a percentage, (1) the
numerator of which shall be equal to the Parent Interests proposed to be
Transferred by ECP in the Subsequent Tag-Along Sale under clause (y) of the
second sentence of Section 6.03(a) and (2) the denominator of which shall be the
aggregate Parent Interests held by ECP as of immediately prior to the applicable
Subsequent Tag-Along Sale; provided, however, that, in the event that the
applicable Tag-Along Participant has not exercised in full its Tag-Along Rights
in all previous Tag-Along Sales, such Tag-Along Participant shall have the right
to include all or any such unexercised Tag-Along Rights in the then applicable
Tag-Along Sale.

(iii)    The aggregate purchase price payable for the Interests purchased by a
Tag-Along Transferee will be allocated among Parent or ECP, as applicable, and
the Tag-Along Participants participating in such Tag-Along Sale based upon the
Hypothetical Value of such Partner’s or such other Tag-Along Participant’s
Interests so Transferred.
(iv)    Any indemnification or other obligations will be apportioned pro rata as
among Parent or ECP, as applicable, and the Tag-Along Participants, other than
with respect to representations, warranties and covenants made individually by a
Partner or other Tag-Along Participant (e.g., representations as to title or
authority or representations qualified by the individual knowledge of such
Partner or other Tag-Along Participant).
(b)    Tag-Along Notice. At least five days prior to Parent or ECP, as
applicable, making any Transfer which gives rise to Tag-Along Rights pursuant to
this Section 6.03, Parent or ECP, as applicable, will give written notice (a
“Tag-Along Notice”) to each potential Tag-Along Participant, setting forth in
reasonable detail the terms and conditions of such proposed Transfer, including
(i) the name and address of the Tag-Along Transferee, (ii) the proposed amount
and form of consideration and terms and conditions of payment offered by the
Tag-Along Transferee, and (iii) the material terms of the proposed transaction
including the expected closing date of the transaction. In the event that the
terms and/or conditions set forth in the Tag-Along Notice are thereafter amended
in any material respect, Parent or ECP, as applicable, will give written notice
(an “Amended Tag-Along Notice”) of the amended terms and conditions of the
proposed Transfer to each other Partner. Those Tag-Along Participants opting to
exercise their Tag-Along Rights will give written notice to Parent or ECP, as
applicable, within ten Business Days after receipt of the Tag-Along Notice, or,
if later, within five Business Days after receipt of the most recent Amended
Tag-Along Notice (but in any event prior to the closing date of the proposed
Transfer as specified in such Tag-Along Notice or Amended Tag-Along Notice) of
their intention to participate

30

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

in the proposed Transfer by Parent or ECP, as applicable, to the Tag-Along
Transferee on the terms and conditions set forth in such Tag-Along Notice or the
most recent Amended Tag-Along Notice. Any Partner or other Tag-Along Participant
that has not notified Parent or ECP, as applicable, of its intent to exercise
Tag-Along Rights within the period of time specified in this Section 6.03(b)
will be conclusively deemed to have elected not to exercise such Tag-Along
Rights with respect to the Transfer contemplated by such notice.
(c)    Terms of Sale. In connection with a Tag-Along Sale, each Tag-Along
Participant will execute such documents, and make such representations,
warranties, covenants and indemnities, as are executed and made by Parent or
ECP, as applicable. At the request of the Tag-Along Transferee, all or a portion
of the purchase price payable to the Partners or the other Tag-Along
Participants in connection with a Tag-Along Sale may be held back in an escrow
account for the purpose of satisfying such Partners’ or other Tag-Along
Participants’ obligations under the applicable documents, including indemnity
obligations. In connection with a Tag-Along Sale, each Tag-Along Participant
will also (A) consent to and raise no objections against the Tag-Along Sale or
the process pursuant to which the Tag-Along Sale was arranged, (B) waive any
dissenter’s rights and other similar rights, (C) take all actions reasonably
required or desirable or requested by Parent or ECP, as applicable, to
consummate such Tag-Along Sale and (D) comply with the terms of the
documentation relating to the Tag-Along Sale.
(d)    Upstream Sale. The provisions of this Section 6.03 will not in any event
be interpreted so as to apply to any indirect sale, transfer, exchange or other
disposition of Interests by Parent or ECP to a Tag-Along Transferee, except for
any sale, transfer, exchange or other disposition of interests in ECP IV Calpine
Holdings, LP, Volt Energy Holdings, LP or any other Person set up by ECP for the
sole purpose of only holding, directly or indirectly, the Parent Interests.
6.04    Pledge of Interests. In connection with any indebtedness of the
Partnership, the General Partner shall be authorized to cause each Partner to
pledge, hypothecate, mortgage, assign, transfer or grant security interests in
or other liens on the Partners’ Interests. Each Partner agrees to, if requested
by the General Partner, execute and deliver such consent letters and estoppel
certificates as are reasonably and customarily requested by lenders and any and
all reasonable and customary ancillary documents thereto; provided, however,
that no such pledge, hypothecation, mortgage, assignment, transfer or grant
shall convey to the transferee recourse against any Partner.
6.05    Repurchase Rights.
(a)    Repurchase Right. Except to the extent provided in any employment
agreement or Award Agreement, in the event that any Class B Partner (i)
experiences a termination of employment or termination of other services with
the Partnership or its Affiliates for any reason or (ii) engages in a purported
Transfer in violation of the provisions of this Article VI (each, a “Repurchase
Trigger”), then (A) the unvested Interests of such Class B Partner shall be
forfeited without payment therefor and (B) at any time and from time to time
during the period commencing on the date of such Repurchase Trigger and ending
on the later of (I) the six-month anniversary of the Repurchase Trigger and (II)
the

31

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

one-month anniversary of the date of expiration of any holding period that would
prohibit the exercise of rights pursuant to this Section 6.05(a), as determined
by the General Partner in good faith (such later date, the “Initial Repurchase
Deadline”), (x) the Partnership will have the right, but not the obligation, to
redeem the vested Class B Interests of such employee or other service provider
(taking into account any acceleration of vesting that occurs in connection with
such Repurchase Trigger pursuant to the applicable Award Agreement) in exchange
for such number of Calpine Shares with a Fair Market Value equal in the
aggregate to the Fair Market Value (if any) of the Interests (or portion
thereof) to be redeemed on the date of the redemption (the “Partnership
Redemption Right”), and (y) following any redemption pursuant to the foregoing
clause (x), the Partnership shall have the right, but not the obligation, to
cause Calpine to purchase, and if the Partnership exercises such right, such
Class B Partner will be required to sell to Calpine, any or all of the Calpine
Shares so received by such Class B Partner, at a price equal to the applicable
Repurchase Price with respect to the Interests in exchange for which the Class B
Partner received such Calpine Shares to be purchased on the date of the purchase
(the “Calpine Repurchase Right”). The rights and obligations applicable to a
holder of Class B Interests under this Agreement shall apply mutatis mutandis to
any Class B Partner who receives Calpine Shares pursuant to a Partnership
Redemption Right, taking into account the difference in tax consequences of the
Class B Interests and the Calpine Shares. For the avoidance of doubt, (1) the
Partnership Redemption Right and the Calpine Repurchase Right, respectively, may
be exercised more than once, and, any Calpine Shares subject to purchase
hereunder may be purchased at different Repurchase Prices, (2) the Partnership,
in its sole discretion, may elect to redeem all or any portion of such
Interests, and (3) the Partnership, in its sole discretion, may cause Calpine to
purchase all or any portion of such Calpine Shares, including purchasing only
such Calpine Shares that are subject to purchase at a lower Repurchase Price.
Notwithstanding the foregoing, in no event will the Partnership redeem any
Interests pursuant to the Partnership Redemption Right prior to the day
immediately following the six-month anniversary of the date such Interests first
became vested, and the Partnership Redemption Right and the Calpine Repurchase
Right shall be subject to the terms of any employment agreement or Award
Agreement. Each Partner agrees that Calpine shall be deemed a third-party
beneficiary of, and shall be entitled to enforce, this Section 6.05.
(b)    In the event that the Partnership (or its assignee) exercises the Calpine
Repurchase Right pursuant to Section 6.05(a) and, within the six (6) month
period following the date that the Partnership pays the Class B Partner the
Repurchase Price, the stock of Calpine or its affiliates becomes readily
tradeable on an established securities market pursuant to an IPO or a Tag-Along
Sale occurs, within ten (10) business days following the date of the IPO or the
Tag-Along Sale, as applicable, the Partnership shall pay such Class B Partner an
amount equal to the product of (A) the excess of (x) the per share price of the
Partnership’s common shares or other equity interests, as applicable, as of the
date of the IPO or the Tag-Along Sale, as applicable, over (y) the amount the
Partnership paid the Class B Partner with respect to each Class B Interest
purchased pursuant to the Calpine Repurchase Right and (B) the number of Class B
Interests purchased pursuant to the Calpine Repurchase Right up to, in the case
of a Tag-Along Sale, the number of Class B Interests that the Class B Partner
would have been entitled to sell in connection with the Tag-Along Sale. In the

32

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

event of two or more Tag-Along Sales during any such period, the foregoing
sentence shall apply to each such sale, provided that the number Class B
Interests taken into account in the aggregate under Clause (B) above shall not
exceed the number of shares with respect to which the Partnership exercises its
Calpine Repurchase Right.
(c)    Form of Consideration. Subject to Section 6.05(f), Calpine may pay the
Repurchase Price for such Calpine Shares by delivery of funds deposited into an
account designated by such Class B Partner, a bank cashier’s check, a certified
check or a company check of Calpine for the Repurchase Price. Notwithstanding
anything to the contrary in this Agreement, Calpine may deduct and withhold from
the amounts otherwise payable pursuant to this Agreement such amounts as
necessary to comply with the Code, or any other provision of applicable law,
with respect to the making of such payment.
(d)    Release. As a condition of any Transfer of Interests or repurchase of
Calpine Shares under this Section 6.05, the Class B Partner will be required to
execute a release in favor of the Partnership and its Partners and Affiliates,
releasing the Partnership and its Partners and Affiliates from all liabilities
to such Class B Partner.
(e)    Breach of Restrictive Covenants. Notwithstanding anything to the contrary
herein, each Class B Partner agrees that in the event of the breach by such
Class B Partner of any restrictive covenants contained in this Agreement or any
employment, consulting or other agreement between such Class B Partner and the
Partnership or any Affiliate thereof, in addition to any other remedy which may
be available at law or in equity, Calpine will be entitled to reimbursement by
such Class B Partner, and such Class B Partner shall be obligated to reimburse
Calpine, for the aggregate Repurchase Price of any Calpine Shares purchased by
Calpine in respect of such Class B Partner.
(f)    Repurchase Disability.
(i)    Notwithstanding anything to the contrary herein, except as otherwise
provided by Section 6.05(f)(iii), Calpine shall not be permitted to purchase any
Calpine Shares upon exercise of the Calpine Repurchase Right if the General
Partner determines that: (A) the purchase of such Calpine Shares would render
Calpine or its subsidiaries unable to meet their Obligations in the ordinary
course of business taking into account any pending or proposed transactions,
capital expenditures or other budgeted cash outlays by Calpine or any of its
subsidiaries, including any proposed acquisition of any other entity by Calpine
or any of its subsidiaries, (B) Calpine is prohibited from purchasing Calpine
Shares by applicable law restricting the purchase by an entity of its own equity
securities, or (C) the purchase of Calpine Shares would constitute a breach of,
default, or event of default under, or is otherwise prohibited by, the terms of
any loan agreement or other agreement or instrument to which Calpine or any of
its subsidiaries is a party (the “Financing Documents”) or Calpine or any of its
subsidiaries is not able to obtain the requisite consent of any of its senior
lenders to effect the purchase of the Interests. The events described in (A)
through (C) above each constitute a “Repurchase Disability.”

33

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

(ii)    Except as otherwise provided in Section 6.05(f)(iii), in the event a
Repurchase Disability shall occur, the Partnership shall notify in writing such
Class B Partner (such notice, a “Disability Notice”). The Disability Notice
shall specify the nature of the Repurchase Disability. The Partnership shall
thereafter cause Calpine to purchase the Calpine Shares described in the
Disability Notice as soon as reasonably practicable after all Repurchase
Disabilities cease to exist (or Calpine may elect, but shall have no obligation,
to cause its nominee to purchase such Calpine Shares while any Repurchase
Disabilities continue to exist). In the event that the Calpine suspends its
obligations to purchase such Calpine Shares pursuant to a Repurchase Disability,
(A) the Partnership shall provide written notice to such Class B Partner as soon
as practicable after all Repurchase Disabilities cease to exist (the
“Reinstatement Notice”); (B) the Repurchase Price, if applicable, of such
Calpine Shares shall be determined as of the date the Reinstatement Notice is
delivered to such Class B Partner; and (C) the redemption shall occur on a date
specified by the Partnership within ten days following the later of (x) the date
the Reinstatement Notice is delivered to such Class B Partner or (y) if
applicable, the date of the determination of the Repurchase Price of the Calpine
Shares to be repurchased.
(iii)    Notwithstanding Sections 6.05(f)(i) and (ii), if (x) the Partnership
has caused Calpine to exercise the Calpine Repurchase Right and (y) a Repurchase
Disability shall occur, then, in the sole discretion of the Partnership, the
Partnership may cause Calpine to purchase such Calpine Shares, and, in lieu of
cash consideration, issue a promissory note to the Class B Partner in the amount
of the Repurchase Price, the terms of which promissory note shall be acceptable
to Calpine’s senior lenders and shall not result in a breach or violation of any
of the Financing Documents. The promissory note shall (A) bear simple interest
at the Prime Rate as published in the Wall Street Journal on the date such
payment is due and owing from such date to the date such payment is made and (B)
have such other reasonable terms and conditions as may be determined by the
Partnership. All payments of interest accrued under the promissory note shall be
paid only at the date of payment by Calpine of the principal amount of such
promissory note.
6.06    Elective Transfer In lieu of causing Calpine to consummate a purchase of
a Class B Partner’s Calpine Shares pursuant to Section 6.05, the General Partner
may instead require the Class B Partner to Transfer to the Partnership, for the
same aggregate consideration that would be otherwise payable in such purchase
under Section 6.05, all or any portion of the Calpine Shares then held by such
Class B Partner, and such Transfer shall be subject to Sections 6.05(b), (d) and
(e).

34

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

6.07    IPO.
(a)    Authority. In the event that the Partnership determines to consummate an
IPO, the General Partner shall have the power and authority, without any vote or
consent of the Partners, to convert the Partnership to a master limited
partnership structure, incorporate the Partnership, or take such other actions
as it may deem advisable, including (i) creating one or more subsidiaries of the
newly incorporated corporation (or other form of entity selected by the General
Partner) and transferring to such subsidiaries any or all of the assets of the
Partnership (including by merger) or (ii) causing the Partners to exchange their
Interests for common shares of the newly-formed corporation (or for limited
partnership interests or other equity interests, as applicable, in such other
form of entity as may be selected by the General Partner) with equivalent value
(“Conversion Shares”); provided that if the Interests of Class A Partners are
exchanged for Conversion Shares or cash, the Interests of Class B Partners shall
be concurrently exchanged for Conversion Shares or cash to the same extent as
the Class A Partners, proportionate to their respective Interests. Prior to
consummating any such transaction, the General Partner shall approve the
proposed forms of a certificate of incorporation, by-laws, stockholders’
agreement and/or any other applicable governing documents proposed to be
established for such corporation (or other entity) and its subsidiaries, if any.
For the avoidance of doubt, the General Partner may, in its sole discretion in
connection with any IPO, impose such customary lock-up and resale restrictions
or other customary conditions on any Conversion Shares in connection with the
IPO as the General Partner may deem appropriate.
(b)    Vesting of Conversion Shares. Conversion Shares issued to Class B
Partners will be vested only to the extent that the related original Interests
are vested on the date of such conversion (the “Conversion Date”), and vesting
thereafter will continue in accordance with the schedule set forth in the
respective Award Agreements.
(c)    Delivery. As promptly as practicable after the determination of the
number of Conversion Shares each holder shall receive under Section 6.07 above,
each holder of Interests shall deliver to the Partnership the certificate or
certificates, if any, representing the Interests to be converted into Conversion
Shares, duly endorsed or assigned in blank or to the Partnership (if required by
it) and stating the name or names (with address) in which the certificate or
certificates for the Conversion Shares, if any, are to be issued. Upon receipt
of any such certificates representing the Interests, the Partnership shall issue
and deliver to each holder entitled to Conversion Shares, to the place and in
the name designated by such holder, a certificate or certificates, if any, for
the number of Conversion Shares to which such Partner is entitled (including any
fractional shares). The Person in whose name the certificate or certificates of
the Conversion Shares may be issued shall be deemed to have become a holder of
record on the Conversion Date unless the transfer books of the Partnership are
closed on that date, in which event such Person shall be deemed to have become a
holder of record on the next succeeding date on which the transfer books are
open.
(d)    Approvals; Stockholders’ Agreement. The Partners agree to take all
necessary and desirable actions, and to vote their Interests (or Conversion
Shares, as applicable), as requested by the General Partner in connection with
the consummation of

35

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

those actions contemplated by this Section 6.07. In connection with the
conversion of the Partnership into a corporation, such actions by the Partners
shall include, without limitation, entering into a stockholders’ agreement
containing provisions similar to the provisions in this Agreement, except that
the stockholders’ agreement will include such customary lock-up and resale
restrictions or other customary conditions in connection therewith as the
General Partner may deem appropriate.
6.08    Power of Attorney. Each Class B Partner hereby makes, constitutes and
appoints the General Partner and Parent as his, her or its true and lawful
attorney-in-fact for his, her or it and in his, her or its name, place, and
stead and for his, her or its use and benefit, to sign, execute, certify,
acknowledge, swear to, file and record any instrument that is now or may
hereafter be deemed necessary by Parent in its reasonable discretion to carry
out fully the provisions and the agreements, obligations and covenants of such
Class B Partner in Sections 6.02, 6.03, 6.04, 6.05 and 6.06 in the event that
he, she or it is required to Transfer Interests pursuant to such provisions.
Each Class B Partner hereby gives such attorney-in-fact full power and authority
to do and perform each and every act or thing whatsoever requisite or advisable
to be done in connection with his, her or its obligations and agreements
pursuant to Sections 6.02, 6.03, 6.04, 6.05 and 6.06 as fully as he, she or it
might or could do himself, herself or itself, and hereby ratifies and confirms
all that any such attorney-in-fact will lawfully do or cause to be done by
virtue of the power of attorney granted hereby. The power of attorney granted
pursuant to this Section 6.08 is a special power of attorney, coupled with an
interest, and is irrevocable, and will survive the bankruptcy, insolvency,
dissolution or cessation of existence of any Class B Partner.
6.09    Incapacity. Upon the Incapacity of a Partner, such Partner’s Interest
shall automatically be converted to an Economic Interest, and such Partner (or
its executor, administrator, trustee or receiver, if applicable) shall
thereafter be deemed a Transferee of such Interests for all purposes hereunder,
with the same Economic Interest as was held by such Partner, but without any
other rights of a Partner, except that the General Partner may in its discretion
cause the Partnership to redeem such interest on the same basis as would apply
pursuant to Section 6.05.
6.10    Non-Competition; Non-Solicitation; Non-Disparagement. In consideration
for (i) the issuance of any initial Interest to a Class B Partner pursuant to
Section 3.01 and Section 4.07 above and/or (ii) the issuance of any additional
Interest to an existing Class B Partner pursuant to Section 4.01 above, the
adequacy of which such Class B Partner hereby acknowledges, such Class B Partner
hereby agrees as follows:
(a)    Non-Competition. Such Class B Partner shall not, at any time during the
Restricted Period, directly or indirectly engage in, have any interest in
(including, without limitation, through the investment of capital or lending of
money or property), or manage, operate or otherwise render any services to, any
Person (whether on his or her own or in association with others, as a principal,
director, manager, officer, employee, agent, representative, partner, member,
security holder, consultant, advisor, independent contractor, owner, investor,
participant or in any other capacity) that engages in (either directly or
through any subsidiary or affiliate thereof) any business or activity in North
America relating to (i) the sale or generation of electricity from natural gas
renewables and geothermal resources (including retail sales of electricity) in
competitive wholesale and retail power markets or (ii) any other business that
constitutes more than 20% of the revenue

36

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

or net operating profit of Calpine at the time (any such business or activity in
clause (i) or (ii), a “Restricted Business”). Notwithstanding the foregoing,
engagement in (x) a natural gas production, transportation or trading business,
(y) a business that, incidental to its core business, sells wholesale power into
a market and the Class B Partner is not engaged in such activity, or (z) a
financial commodities trading business, shall not be considered a Restricted
Business. Notwithstanding the foregoing, such Class B Partner shall be permitted
to acquire a passive stock or equity interest in such a business; provided that
such stock or other equity interest acquired is not more than five percent of
the outstanding interest in such business.
(b)    Non-Solicitation. Such Class B Partner shall not, at any time during the
Restricted Period, directly or indirectly, either for himself or herself or on
behalf of any other Person, (i) recruit or otherwise solicit or induce any
employee, customer or supplier of Calpine or any of its subsidiaries to
terminate his, her or its employment or arrangement with Calpine or such
subsidiary, or otherwise change his, her or its relationship with Calpine or
such subsidiary, or (ii) hire, or cause to be hired, any person who was employed
by the Calpine or any of its subsidiaries at any time during the 12-month period
immediately prior to the Date of Termination or who thereafter becomes employed
by Calpine or any of its Subsidiaries.
(c)    Additional Class B Partner Confidentiality Obligations. Except as such
Class B Partner reasonably and in good faith determines to be required in the
faithful performance of such Class B Partner’s duties to the Partnership or in
accordance with Section 6.10(e), such Class B Partner shall, for so long as such
Class B Partner is employed by or provides services to the Partnership and
thereafter, maintain in confidence and shall not directly or indirectly use,
disseminate, disclose or publish, for such Class B Partner’s benefit or the
benefit of any other Person, any Proprietary Information (as defined below), or
deliver to any Person, any document, record, notebook, computer program or
similar repository of or containing any such Proprietary Information. Unless
otherwise defined in any employment agreement, “Proprietary Information” means
any confidential or proprietary information or trade secrets of or relating to
the Partnership, including, without limitation, information with respect to the
Partnership’s operations, processes, protocols, products, inventions, business
practices, finances, principals, vendors, suppliers, customers, potential
customers, marketing methods, costs, prices, contractual relationships,
regulatory status, strategic business plans, technology, designs, compensation
paid to employees or other terms of employment. Notwithstanding the foregoing,
“Proprietary Information” shall not include (A) information that is or becomes
generally available to the public other than as a result of a Person’s improper
disclosure (including any disclosure by such Class B Partner or his, her or its
representatives) or (B) information made available to the Class B Partner on a
non-confidential basis from a person that to the best of the Class B Partner’s
knowledge (after reasonable inquiry), was not otherwise prohibited from
disclosing such information. Such Class B Partner’s obligation to maintain and
not use, disseminate, disclose or publish, or use for such Class B Partner’s
benefit or the benefit of any other Person, any Proprietary Information will
survive the Date of Termination. The parties hereby stipulate and agree that as
between them, the Proprietary Information identified herein is important,
material and affects the successful conduct of the businesses of the Partnership
(and any successor or assignee of the Partnership).

37

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

(d)    Return of Materials. Upon termination of such Class B Partner’s
employment or other service relationship with the Partnership for any reason,
such Class B Partner will promptly deliver to the Partnership (i) all
correspondence, drawings, manuals, letters, notes, notebooks, reports, programs,
plans, proposals, financial documents, or any other documents that are
Proprietary Information, including all physical and digital copies thereof, and
(ii) all other Partnership property (including, without limitation, any personal
computer or wireless device and related accessories, keys, credit cards and
other similar items) which is in his or her possession, custody or control.
(e)    Legal Process; Exceptions. Such Class B Partner may respond to a lawful
and valid subpoena or other legal process but shall give the Partnership the
earliest possible notice thereof, and shall, as much in advance of the return
date as possible, make available to the Partnership and its counsel the
documents and other information sought, and shall assist such counsel in
resisting or otherwise responding to such process. In addition, nothing herein
shall prevent any Class B Partner from reporting possible violations of federal
law or regulation to, otherwise communicating with or participating in any
investigation or proceeding that may be conducted by, or providing documents and
other information, without notice to the Partnership, to, any governmental
agency or entity (including the Department of Justice, the Securities and
Exchange Commission, Congress, and any agency Inspector General), including in
accordance with the provisions of and rules promulgated under Section 21F of the
Exchange Act or Section 806 of the Sarbanes-Oxley Act of 2002, as each may have
been amended from time to time, or any other whistleblower protection provisions
of state or federal law or regulation.
(f)    Non-Disparagement. Such Class B Partner agrees not to (i) make any
negative, unflattering, accusatory, or derogatory remarks about the Partnership,
any of the Partnership’s products or practices, or any of the Partnership’s
directors, officers, agents, representatives, partners, members, equity holders
or Affiliates, either orally or in writing, at any time, or (ii) take any action
that might reasonably be expected to cause damage or harm (reputational or
otherwise) to the Partnership or any of its Affiliates; provided that such Class
B Partner may confer in confidence with such Class B Partner’s legal
representatives and make truthful statements as required by law.
(g)    Transitions. Prior to accepting other employment or any other service
relationship during the Restricted Period, such Class B Partner shall provide a
copy of this Section 6.10 to any recruiter who assists such Class B Partner in
obtaining other employment or any other service relationship and to any employer
or other Person with which such Class B Partner discusses potential employment
or any other service relationship.
(h)    Interpretation. In the event the terms of this Section 6.10 shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its extending for too great a period of time or over too great a geographical
area or by reason of its being too extensive in any other respect, it will be
interpreted to extend only over the maximum period of time for which it may be
enforceable, over the maximum geographical area as to which it may be
enforceable, or to the maximum extent in all other respects as to which it may
be enforceable, all as determined by such court in such action. Any breach or
violation by such Class B Partner of the provisions of this Section 6.10 shall
toll the running of any time periods set forth in this Section 6.10 for the
duration of any such breach or violation.

38

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

(i)    Certain Terms. As used in this Section 6.10, the term “the Partnership”
shall include the Partnership, the General Partner, Parent, Calpine and their
respective subsidiaries and Affiliates.
(j)    Injunctive Relief. Such Class B Partner recognizes and acknowledges that
a breach of the covenants contained in this Section 6.10 will cause irreparable
damage to the Partnership and its goodwill, the exact amount of which will be
difficult or impossible to ascertain, and that the remedies at law for any such
breach will be inadequate. Accordingly, such Class B Partner agrees that in the
event of a breach of any of the covenants contained in this Section 6.10, in
addition to any other remedy which may be available at law or in equity
(including, without limitation, pursuant to Section 6.05(e)), the Partnership
will be entitled to specific performance and injunctive relief.
6.11    Parent Distribution. Notwithstanding anything to the contrary in this
Agreement, it is expressly understood and agreed that Parent or any of its
Affiliates or any direct or indirect partner, member or other equity participant
of any of the foregoing may, with the consent of the General Partner, distribute
all or any portion of the Interests or Calpine Shares held directly or
indirectly by it to its respective direct or indirect partners, members or other
equity participants (any such distribution, a “Parent Distribution”). Any such
partners, members or other equity participants (a) who receive Interests
pursuant to a Parent Distribution, shall agree to be bound by the terms of this
Agreement by executing and delivering a joinder to this Agreement in the form
attached hereto as Exhibit B, and make the representations and warranties set
forth in Section 3.03 as of the date of such Person’s admission as a Partner of
the Partnership, in each case in accordance with Section 3.02, and (b) who
receive Calpine Shares pursuant to a Parent Distribution, shall agree to be
bound by the terms of the Stockholders Agreement by executing and delivering a
joinder to the Stockholders Agreement. Notwithstanding anything to the contrary
contained in this Agreement, a Parent Distribution shall not constitute a
“Transfer” for any purpose under this Agreement and shall, except as expressly
provided in this Section 6.11, be exempt in all respects from the terms and
conditions of this Agreement. As an example, and without limiting the generality
of the foregoing, it is expressly understood and agreed that a Parent
Distribution shall not constitute a Tag-Along Sale. Any such partners, members
or other equity participants (a) who receive Interests pursuant to a Parent
Distribution, shall have the same rights and restrictions as applicable to
Parent under this Agreement and (b) who receive Calpine Shares pursuant to a
Parent Distribution, shall have the same rights and restrictions as applicable
to Parent under the Stockholders Agreement.

39

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

ARTICLE VII.
MANAGEMENT
7.01    Management. Except as otherwise provided in this Agreement or by
applicable law, the power and authority to manage, direct and control the
Partnership will be vested in the General Partner. The General Partner will have
full, complete and exclusive authority to manage, direct and control the
business, affairs and properties of the Partnership, and to perform any and all
other acts or activities customary or incident to the management of the
Partnership’s activities. Unless expressly authorized to do so by the provisions
hereof or by action of the General Partner, no Partner may claim or exercise any
authority to act, or to enter into any contract or agreement, on behalf of the
Partnership. The General Partner shall be removed as general partner of the
Partnership immediately upon the removal of the General Partner as general
partner of Parent in accordance with the Parent LPA and the Person appointed as
the successor general partner of Parent shall be appointed the successor General
Partner of the Partnership. For the avoidance of doubt, notwithstanding anything
to the contrary in this Agreement, in no event shall the Partnership take any
action set forth in Section 6.8.1 of the Parent LPA without the consent of
“Two-Thirds in Interest” of the “Limited Partners” of Parent (each as defined in
the Parent LPA), if such action would, pursuant to Section 6.8.1 of the Parent
LPA, require such consent.
7.02    Limitation of Duties. No Partner (in its capacity as such) shall have
any duties (including fiduciary duties) or liabilities relating thereto to the
Partnership or the Partners, except for the implied covenant of good faith and
fair dealing and except as may be specifically provided herein or required by
any provisions of the Act or other applicable law that cannot be waived.
Moreover, except as expressly provided herein, each Partner and each of their
respective Affiliates shall be free to engage or invest in, and devote his or
its and their time to, any other business venture or activity of any nature and
description, whether or not such activities are considered competitive with the
Partnership, and neither the Partnership nor any other Person will have any
right by virtue of this Agreement or the relationship created hereby in or to
such other venture or activity of any Person (or to the income or proceeds
derived therefrom), and the pursuit of such other venture or activity will not
be deemed wrongful or improper. No notice, approval or other sharing of any such
other opportunity or activity will be required. The legal doctrines of
“corporate opportunity,” “business opportunity” and similar doctrines will not
be applied to any such competitive venture or activity to the fullest extent
permitted by applicable law.
7.03    Transactions with Affiliates. To the extent permitted by applicable law,
each Partner, whether acting for itself or on behalf of the Partnership, is,
subject to Section 7.02, hereby authorized to purchase property from, sell
property to, or otherwise deal with any other Partner, the Partnership, or any
of their respective Affiliates.
7.04    Officers; Partners.
(a)    Officers. The General Partner may, from time to time, designate one or
more Persons to be Officers of the Partnership, with such titles as the General
Partner may assign to such Persons. No Officer need be a Partner or a resident
of the State of Delaware. Officers so designated will have such authority and
perform such duties as the General Partner may, from time to time, delegate to
them and, unless otherwise specified by the General Partner,

40

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

will have the authority and responsibilities generally held by officers of a
Delaware corporation holding the same titles. Any number of offices may be held
by the same Person. The salaries or other compensation, if any, of the Officers
and agents of the Partnership will be fixed from time to time by the General
Partner. Any Officer may resign as such at any time. Such resignation will be
made in writing and will take effect at the time specified therein, or if no
time be specified, at the time of its receipt by the General Partner. Any
Officer may be removed as such, either with or without cause, by the General
Partner, in its sole discretion. Any vacancy occurring in any office of the
Partnership may be filled by the General Partner. The Officers of the
Partnership, and their respective titles, as of the Effective Date are set forth
on Exhibit C.
(b)    Separate Interests. The General Partner, in performing its obligations
under this Agreement, may act or omit to act at the direction of Parent,
considering only such factors, including the separate interests of Parent and
its Affiliates (which interests may differ from, and be given priority over, the
interests of the Partnership or any other Partner), as the General Partner or
Parent chooses to consider, and any action of the General Partner or failure to
act, taken or omitted in good faith reliance on this Section 7.04(b) will not
constitute a breach of any duty (including any fiduciary duty) on the part of
the General Partner or Parent to the Partnership or any other Partner. The
provisions of this Agreement, to the extent that they modify or eliminate the
duties and liabilities of the General Partner or any Partner otherwise existing
at law or in equity, are agreed by the Partners to modify or eliminate to that
extent such other duties and liabilities of the General Partner or such Partner
to the fullest extent permitted by applicable law.
7.05    Indemnification; Limitation of Liability.
(a)    Indemnification. Except as limited by applicable law and subject to the
provisions of this Section 7.05, the Officers and each Partner of the
Partnership (each, an “Indemnitee”) will not be liable for, and will be
indemnified and held harmless by the Partnership against, any and all losses,
liabilities and reasonable expenses, including attorneys’ fees, arising from
proceedings in which such Indemnitee may be involved, as a party or otherwise,
by reason of its being a Partner or Officer of the Partnership, or by reason of
its involvement in the management of the affairs of the Partnership, whether or
not it continues to be such at the time any such loss, liability or expense is
paid or incurred. Notwithstanding the foregoing, no Indemnitee will be held
harmless or indemnified under this Section 7.05 for any losses, liabilities or
expenses arising out of the fraud, intentional misconduct, or knowing or
reckless breach of Indemnitee’s obligations under this Agreement, or bad faith
of such Indemnitee. The rights of indemnification provided in this Section 7.05
are in addition to any rights to which an Indemnitee may otherwise be entitled
by contract or as a matter of law. Without limiting the foregoing, an Indemnitee
will be entitled to indemnification by the Partnership against reasonable
expenses (as incurred), including attorneys’ fees, incurred by the Indemnitee in
connection with the defense of any action to which the Indemnitee may be made a
party (without regard to the success of such defense), to the fullest extent
permitted under the provisions of the Act or any other applicable statute.

41

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

(b)    Payments Prior to Final Disposition. Except as limited by applicable law,
expenses incurred by an Indemnitee in defending any proceeding (except a
proceeding by or in the right of the Partnership or a majority in interest of
the Partners against such Indemnitee), will be paid by the Partnership in
advance of the final disposition of the proceeding, upon receipt of a written
undertaking by or on behalf of such Indemnitee to repay such amount if such
Indemnitee is determined pursuant to this Section 7.05 or adjudicated to be
ineligible for indemnification, which undertaking will be an unlimited general
obligation of the Indemnitee but need not be secured unless so determined by the
General Partner.
(c)    Heirs and Representatives. The indemnification provided by this Section
7.05 will inure to the benefit of the heirs and personal representatives of each
Indemnitee.
(d)    Officers and Agents. The Partnership may, at the direction of the General
Partner, indemnify and advance expenses to any other Officer, employee or agent
of the Partnership to the same extent and subject to the same conditions under
which it may indemnify and advance expenses under Sections 7.05(a) and (b).
(e)    Not Exclusive. The right to indemnification and the advancement and
payment of expenses conferred in this Section 7.05 shall not be exclusive of any
other right that a Partner or other Person indemnified pursuant to this Section
7.05 may have or hereafter acquire under any law (common or statutory) or
provision of this Agreement.
(f)    No Partner Personal Liability for Indemnification. Any indemnification
pursuant to this Section 7.05 will be made only out of the assets of the
Partnership and will in no event cause any Partner to incur any personal
liability nor will it result in any liability of the Partners to any third
party.
(g)    Priority. The Partnership hereby acknowledges that each Indemnitee that
is a Parent-Related Partner or heir or representative of any Parent-Related
Partner (each, a “Parent-Related Indemnitee”), may have certain rights to
indemnification, advancement of expenses and/or insurance provided by or on
behalf of the Parent-Related Partners and/or their Affiliates (collectively, the
“Parent-Related Indemnitors”). Notwithstanding anything to the contrary in this
Agreement or otherwise: (i) the Partnership is the indemnitor of first resort
(i.e., the Partnership’s obligations to each Parent-Related Indemnitee are
primary and any obligation of the Parent-Related Indemnitors to advance expenses
or to provide indemnification for the same expenses or liabilities incurred by
each Parent-Related Indemnitee are secondary), (ii) the Partnership will be
required to advance the full amount of expenses incurred by each Parent-Related
Indemnitee and will be liable for the full amount of all liabilities, expenses,
judgments, penalties, fines and amounts paid in settlement to the extent legally
permitted and as required by this Section 7.05, without regard to any rights
each Parent-Related Indemnitee may have against the Parent-Related Indemnitors,
and (iii) the Partnership and the Partners irrevocably waive, relinquish and
release the Parent-Related Indemnitors from any and all claims against the
Parent-Related Indemnitors for contribution, subrogation or any other recovery
of any kind in respect thereof. Notwithstanding anything to the contrary in this
Agreement or otherwise, no advancement or payment by the Parent-

42

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

Related Indemnitors on behalf of a Parent-Related Indemnitee with respect to any
claim for which such Parent-Related Indemnitee has sought indemnification or
advancement of expenses from the Partnership will affect the foregoing and the
Parent-Related Indemnitors will have a right of contribution and/or be
subrogated to the extent of such advancement or payment to all of the rights of
recovery of such Parent-Related Indemnitee against the Partnership. The
Parent-Related Indemnitors are express third party beneficiaries of the terms of
this Section 7.05(g).
7.06    Officers’ Insurance. The Partnership shall purchase and maintain officer
liability insurance in the amount approved by the General Partner on behalf of
any Person who is or was a Partner or Officer of the Partnership against any
liability asserted against such Person or incurred by such Person in any
capacity identified in Section 7.05 or arising out of such Person’s status as an
Indemnitee, whether or not the Partnership would have the power to indemnify
such Person against that liability under Section 7.05.
ARTICLE VIII.    
OTHER RIGHTS AND OBLIGATIONS OF PARTNERS
8.01    Books and Records. The Partnership shall maintain or cause to be
maintained at the principal office of the Partnership appropriate books and
records with respect to the Partnership’s business. The books of the Partnership
shall be maintained, for financial reporting purposes, on an accrual basis in
accordance with GAAP. All decisions as to accounting matters, except as
specifically provided to the contrary herein, shall be made by the General
Partner.
8.02    Schedule K-1 Information. No later than 90 days after the end of each
Fiscal Year, the Partnership shall use its reasonable efforts to provide an
estimated Schedule K-1 to each Partner, and, no later than June 30 following the
end of each Fiscal Year, the Partnership shall use its reasonable efforts to (i)
provide to each Partner a final Schedule K-1 and (ii) provide to any Partner
such other information reasonably requested by such Partner in order for such
Partner to fulfill its federal, state and local tax reporting obligations.
8.03    Confidentiality. Each Partner agrees that the provisions of this
Agreement, all understandings, agreements and other arrangements between and
among the Partners, and all other non-public information received from or
otherwise relating to the Partnership or its business will be confidential, and
will not be disclosed or otherwise released to any other Person (other than
another party hereto), without the prior approval of the General Partner. The
obligations of the Partners hereunder will not apply to the extent that the
disclosure of information otherwise determined to be confidential is required by
applicable law; provided, that prior to disclosing such confidential
information, to the extent practicable a Partner must notify the Partnership
thereof, which notice will include the basis upon which such Partner believes
the information is required to be disclosed.
ARTICLE IX.
TAXES
9.01    Tax Returns. The General Partner will cause to be prepared and timely
filed all necessary federal, state and local income tax returns for the
Partnership. Each Partner will furnish

43

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

to the General Partner all pertinent information in its possession relating to
Partnership operations that is necessary to enable the Partnership’s tax returns
to be prepared and timely filed.
9.02    Tax Classification. It is the intent of the Partners that the
Partnership be treated as a partnership (for so long as any Class B Interests
have been issued and are outstanding) or as a disregarded entity (if no Class B
Interests are then outstanding), in each case, for federal income tax purposes
and, to the extent permitted by applicable law, for state and local franchise
and income tax purposes. Neither the Partnership nor any Partner may make an
election for the Partnership to be excluded from the application of the
provisions of subchapter K of chapter 1 of subtitle A of the Code or any similar
provisions of applicable state or local law or to be treated as a corporation
for federal income tax purposes (other than as determined by the General Partner
in connection with the consummation of an IPO pursuant to Section 6.07 of this
Agreement), and no provision of this Agreement will be construed to sanction or
approve such an election.
9.03    Partnership Representative. The General Partner is hereby designated as
the Partnership’s “partnership representative” within the meaning of Code
Section 6223, unless and until another Person is designated as such from time to
time by the General Partner.
9.04    Section 409A. No Award is intended to constitute or provide for
“nonqualified deferred compensation” within the meaning of Section 409A. To the
extent that the General Partner determines that any Award granted under this
Agreement is subject to Section 409A, the Award Agreement evidencing such Award
shall incorporate the terms and conditions required by Section 409A.
Notwithstanding any provision of this Agreement to the contrary, in the event
that following the Effective Date, the General Partner determines that any Award
may be subject to Section 409A, the General Partner reserves the right to
(without any obligation to do so or to indemnify the holder of such Award for
failure to do so), in its sole discretion, adopt such amendments to this
Agreement and the applicable Award Agreement or adopt such other policies and
procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, that the General Partner determines to be
necessary or appropriate (i) to preserve the intended tax treatment of the
benefits provided with respect to the Award, to preserve the economic benefits
with respect to the Award, or to avoid less favorable accounting or tax
consequences for the Partnership and/or (ii) to exempt the Award from Section
409A or to comply with the requirements of Section 409A and thereby avoid the
application of penalty taxes thereunder.
ARTICLE X
CERTIFICATION OF INTERESTS; REPORTS; BANK ACCOUNTS
10.01    Certification of Interests. If the General Partner so elects at any
time, (i) each Partner will enter into an amendment to this Agreement which
provides that this Section 10.01 will be amended and restated substantially as
set forth in Exhibit D hereto and (ii) the Partnership will cause the Interests
in the Partnership to be evidenced by certificates in the form of Exhibit E
hereto. The Partnership will maintain books for the purpose of registering the
transfer of Interests.

44

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

10.02    Reports. The Partnership will cause to be prepared or delivered such
reports as the General Partner may require. The Partnership will bear the costs
of such reports.
10.03    Bank Accounts. The General Partner will cause the Partnership to
establish and maintain one or more separate bank or investment accounts for
Partnership funds in the Partnership’s name with such financial institutions and
firms as the General Partner may select and with such signatories thereon as the
General Partner may designate.
ARTICLE XI.
DISSOLUTION, LIQUIDATION, TERMINATION AND CONVERSION
11.01    Dissolution. The Partnership will dissolve and its affairs will be
wound up upon the first to occur of any of the following:
(a)    the consent of the General Partner; or
(b)    the occurrence of any other event causing dissolution of the Partnership
under the Act;
provided that, upon dissolution pursuant to clause (b) of this Section 11.01,
any or all of the remaining Partners may elect to continue the business of the
Partnership within 90 days after the occurrence of the event causing such
dissolution. The death, resignation, withdrawal, bankruptcy, insolvency or
expulsion of any Partner will not dissolve the Partnership.
11.02    Liquidation and Termination. On dissolution of the Partnership, the
General Partner may appoint one or more other Persons as liquidator(s). The
liquidator will proceed diligently to wind up the affairs of the Partnership and
make final distributions as provided herein. The costs of liquidation will be
borne as a Partnership expense. Until final distribution, the liquidator will
continue to operate the Partnership properties with all of the power and
authority of the Partners. The steps to be accomplished by the liquidator are as
follows:
(a)    Accounting. As promptly as possible after dissolution and again after
final liquidation, the liquidator will cause a proper accounting to be made by a
recognized firm of certified public accountants of the Partnership’s assets,
liabilities, and operations through the last day of the calendar month in which
the dissolution occurs or the final liquidation is completed, as applicable;
(b)    Payments. The liquidator will pay from Partnership funds all of the debts
and liabilities of the Partnership (including all expenses incurred in
liquidation) or otherwise make adequate provision therefor (including the
establishment of a cash escrow fund for contingent liabilities in such amount
and for such term as the liquidator may reasonably determine); and
(c)    Disposition of Assets. The Partnership will dispose of all remaining
assets as follows:

45

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

(i)    the liquidator may sell any or all Partnership property, and any
resulting gain or loss from each sale will be computed and allocated to the
Partners pursuant to Article V;
(ii)    with respect to all Partnership property that has not been sold, the
fair market value of that property will be determined and the Capital Accounts
of the Partners will be adjusted to reflect the manner in which the unrealized
income, gain, loss, and deduction inherent in property that has not been
reflected in the Capital Accounts previously would be allocated among the
Partners if there were a taxable Transfer of that property for the fair market
value of that property on the date of distribution;
(iii)    thereafter, Partnership property will be distributed among the Partners
in accordance with Section 5.01, taking into account prior distributions under
Section 5.03 but subject to Section 5.02.
(iv)    Distributions. All distributions in kind to the Partners will be made
subject to the liability of each distributee for its allocable share of costs,
expenses and liabilities theretofore incurred or for which the Partnership has
committed prior to the date of termination and those costs, expenses and
liabilities will be allocated to the distributee pursuant to this Section 11.02.
11.03    Cancellation of Filing. On completion of the distribution of
Partnership assets as provided herein, the Partnership will be terminated, and
the General Partner (or such other Person or Persons as may be required) will
cause the cancellation of any other filings made as provided in Section 2.07 and
will take such other actions as may be necessary to terminate the Partnership.
ARTICLE XII.
GENERAL PROVISIONS
12.01    Changes in Interests; Disposition of Assets. In the event that the
General Partner determines that any dividend or other distribution (whether in
the form of cash, Interests, other equity securities or other property), Capital
Contribution, recapitalization, reclassification, reorganization, change to
corporate form, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Partnership, or
exchange of Interests or other equity securities of the Partnership, or other
similar corporate transaction or event, affects the Interests such that an
adjustment is determined by the General Partner in good faith to be appropriate
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under this Agreement or with respect to
an Award, or if the events described in clause (i) of the definition of
Drag-Along Sale occur, then the General Partner shall, in such manner as it may
deem equitable, adjust any or all of:
(a)    The number of Interests or the number and kind of equity securities of
the Partnership with respect to which Awards may be granted under this
Agreement;

46

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

(b)    The number of Interests or the number and kind of equity securities of
the Partnership subject to outstanding Awards, including the cancellation of
outstanding Awards for an amount of cash, securities, or other property equal to
the amount, if any, that could have been attained upon the realization of the
Partner’s rights had such Award (or portion thereof) been fully vested
immediately prior to the occurrence of such transaction or event;
(c)    The purchase price, if any, with respect to any Interest; and
(d)    The Benchmark Amount, Benchmark Component or any financial or other
“targets” specified in this Agreement or in any Award Agreement for determining
the vesting of any Award.
12.02    Offset. Whenever the Partnership is to pay any sum to any Partner, any
amounts such Partner owes the Partnership may be deducted from that sum before
payment.
12.03    Notices. All notices, requests or consents provided for or permitted to
be given under this Agreement will be in writing and will be given either by
depositing such writing in the United States mail, addressed to the recipient,
postage paid and certified with return receipt requested, or by depositing such
writing with a reputable overnight courier for next day delivery, or by
delivering such writing to the recipient in person, by courier or by facsimile
transmission. A notice, request or consent given under this Agreement will be
effective on receipt by the Person to receive it. All notices, requests and
consents to be sent to a Partner or other party hereto will be sent to or made
at the addresses given for that Person on the list attached hereto as Exhibit A
or such other address as such Person may specify by notice to the other Persons
party hereto. Any notice, request or consent to the Partnership made by a
Partner will be given to each other Partner.
12.04    Entire Agreement; Supersedure. This Agreement (together with the
Exhibits hereto), and the agreements entered into in connection herewith,
constitute the entire agreement of the Partners relating to the Partnership and
supersede all prior contracts or agreements with respect to the Partnership,
whether oral or written.
12.05    Effect of Waiver or Consent. A waiver or consent, express or implied,
to or of any breach or default by any Person in the performance by that Person
of its obligations with respect to the Partnership will not constitute a consent
or waiver to or of any other breach or default in the performance by that Person
of the same or any other obligations of that Person with respect to the
Partnership. Failure on the part of a Person to complain of any act of any
Person or to declare any Person in default with respect to the Partnership,
irrespective of how long such failure continues, will not constitute a waiver by
that Person of its rights with respect to that default until the applicable
limitations period has expired.
12.06    Amendment or Modification.
(a)    Except as otherwise provided herein, this Agreement may be amended or
modified from time to time only by a written instrument that is adopted by the
General Partner; provided that without the consent of any Partner to be
adversely affected thereby, this Agreement may not be amended so as to (i)
modify the limited liability of any Partner, (ii) disproportionately and
adversely affect the interest of such Partner in any Profits, Losses

47

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

or distributions or (iii) require any Partner to make any additional Capital
Contribution to the Partnership without that Partner’s prior written consent;
provided, further, that any amendment which impairs the rights of the Class B
Partners arising under this Agreement in a manner that has a disproportionate
negative impact on the Class B Partners shall also require the consent of the
holders of a majority of the Class B Interests.
(b)    Notwithstanding the foregoing or anything to the contrary herein, in
addition to other amendments authorized herein, amendments may be made to this
Agreement from time to time by the General Partner without the consent of any
Partner to (i) amend Exhibit A in accordance with Section 3.01, (ii) correct any
typographical or similar ministerial errors, (iii) delete or add any provision
of this Agreement required to be so deleted or added by, or for compliance with,
applicable law, (iv) amend any provisions of this Agreement as the General
Partner reasonably deems necessary or appropriate in furtherance of any Transfer
to, or admission of, any Affiliate of Parent and/or (v) cure any mistake or
ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Agreement in each such
case in a manner that is not inconsistent with the provisions of this Agreement.
12.07    Binding Effect. Subject to the restrictions on Transfer set forth in
this Agreement, this Agreement will be binding on and inure to the benefit of
the Partners and their respective heirs, legal representatives, successors, and
assigns.
12.08    Governing Law; Severability. This Agreement, and all rights and
remedies in connection therewith, will be governed by, and construed under, the
laws of the State of Delaware, without regard to otherwise governing principles
of conflicts of law (whether of the State of Delaware or otherwise) that would
result in the application of the laws of any other jurisdiction. If any
provision of this Agreement or its application to any Person or circumstance is
held invalid or unenforceable to any extent, the remainder of this Agreement and
the application of such provision to other Persons or circumstances will not be
affected thereby, and such provision will be enforced to the greatest extent
permitted by law.
12.09    Further Assurances. In connection with this Agreement and the
transactions contemplated thereby, each Partner will execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of this
Agreement and such transactions.
12.10    Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. EACH
PARTY TO THIS AGREEMENT HEREBY CONSENTS TO THE JURISDICTION OF ANY UNITED STATES
DISTRICT COURT OR DELAWARE STATE CHANCERY COURT LOCATED IN WILMINGTON, DELAWARE
AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER SUCH
ACTIONS OR PROCEEDINGS ARE BASED IN STATUTE, TORT, CONTRACT OR OTHERWISE), SHALL
BE LITIGATED IN SUCH COURTS. EACH PARTY (A) CONSENTS TO SUBMIT ITSELF TO THE
PERSONAL JURISDICTION OF SUCH COURTS FOR SUCH ACTIONS OR

48

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

PROCEEDINGS, (B) AGREES THAT IT WILL NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL
JURISDICTION BY MOTION OR OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT, AND (C)
AGREES THAT IT WILL NOT BRING ANY SUCH ACTION OR PROCEEDING IN ANY COURT OTHER
THAN SUCH COURTS. EACH PARTY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE AND IRREVOCABLE
JURISDICTION AND VENUE OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM
NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY NON-APPEALABLE
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH ACTIONS OR PROCEEDINGS. A COPY
OF ANY SERVICE OF PROCESS SERVED UPON THE PARTIES SHALL BE MAILED BY REGISTERED
MAIL TO THE RESPECTIVE PARTY EXCEPT THAT, UNLESS OTHERWISE PROVIDED BY
APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF
SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY A PARTY REFUSES TO ACCEPT SERVICE,
EACH PARTY AGREES THAT SERVICE UPON THE APPROPRIATE PARTY BY REGISTERED MAIL
SHALL CONSTITUTE SUFFICIENT SERVICE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF A
PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH PARTY HERETO
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.
12.11    Waiver of Certain Rights. To the maximum extent permitted by applicable
law, each Partner irrevocably waives any right it might have to maintain any
action for dissolution of the Partnership, or to maintain any action for
partition of the property of the Partnership
12.12    Counterparts. This Agreement may be executed in any number of
counterparts, any of which may be delivered via facsimile or PDF, each of which
will be deemed to be an original and all of which will constitute one agreement,
binding on all parties hereto.
[Signature pages follow]

49

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

IN WITNESS THEREOF, the undersigned Partners have executed this Agreement
effective as of the Effective Date.

GENERAL PARTNER

VOLT PARENT GP, LLC

By: Energy Capital Partners III, LLC,
its managing member

By: ECP ControlCo, LLC,
its managing member

By: /s/ Tyler Reeder
Name: Tyler Reeder
Title:     Managing Member

LIMITED PARTNERS

VOLT PARENT, LP

By:    Volt Parent GP, LLC,
its general partner

By: Energy Capital Partners III, LLC,
its managing member

By: ECP ControlCo, LLC,
its managing member

By: /s/ Tyler Reeder
Name: Tyler Reeder
Title:     Managing Member

[Signature Page to Second Amended and Restated Limited Partnership Agreement of
CPN Management, LP]

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

EXHIBIT A
Partners, Capital Contributions, and Interests
Revised as of: August 29, 2018

General Partner and Class A Partners

Partner Name and Address
Type of Interest
Capital Contribution
Unreturned Capital
Percentage Interest(2)
Benchmark Component
General Partner(1)
Volt Parent GP, LLC
51 JFK Parkway
Suite 200
Short Hills, NJ 07078
Attn: President and CEO
Fax: (973) 671-6101
General Partner
 
 
 
 
Parent(1)
Volt Parent, LP
51 JFK Parkway
Suite 200
Short Hills, NJ 07078
Attn: President and CEO
Fax: (973) 671-6101
Class A
$5,439,205,757.50
$5,439,205,757.50
100.0000%
None

A-1

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

Class B Partners

Partner Name and Address
Date of Issuance
Type of Interest
Percentage Interest(3)
Benchmark Components
John Hill
                              
                                   
March 8, 2018
Class B Interest
1.3900%
$5,452,861,009.00
William Miller
                              
                                      
March 8, 2018
Class B Interest
0.5300%
$5,452,861,009.00
Zamir Rauf
                              
                                 
March 8, 2018
Class B Interest
0.3900%
$5,452,861,009.00
August 29, 2018
Class B Interest
0.0100%
$5,452,861,009.00

Other individuals each holding Class B Interests each with a Benchmark Component
of $5,452,861,009.00 and representing Percentage Interests in the aggregate of
3.1900%,(3) in each case as set forth in the books and records of the
Partnership.

(1)
All notices shall be sent with a copy concurrently to Latham & Watkins LLP, 885
Third Avenue, New York, NY 10022-4834, Facsimile No.: (212) 751-4864, Attn:
David Kurzweil.

(2)
Not adjusted for Benchmark Amount.

(3)
Reflects the Awards granted to such Class B Partner, whether vested or unvested.
Awards are subject to vesting as set forth in the applicable Award Agreement.

A-2

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

EXHIBIT B
FORM OF JOINDER
TO
SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF
CPN MANAGEMENT, LP

The undersigned hereby joins in the execution and delivery of that certain
Second Amended and Restated Limited Partnership Agreement, dated as of August 9,
2018 (as may hereafter be amended from time to time, the “Partnership
Agreement”), of CPN Management, LP, a Delaware limited partnership (the
“Partnership”), and agrees to be bound in all respects by the terms and
conditions specified in the Partnership Agreement as a limited partner of the
Partnership. If the undersigned is married, the undersigned has further caused
his or her spouse to execute the Spousal Consent set forth below.

Dated: _________ ___, 20__

__________________________
Name:

Address:
_______________________
_______________________
_______________________
FEIN/SSN:

SPOUSAL CONSENT
The undersigned is the spouse of _______________________. The undersigned
acknowledges that he or she has read the Partnership Agreement (as defined
above) and clearly understands its provisions. The undersigned is aware that, by
the provisions of the Partnership Agreement, he or she has agreed to sell or
transfer all of his or her interest in the Partnership (as defined above),
including any community property interest, in accordance with the terms and
provisions of the Partnership Agreement. The undersigned hereby expressly
approves of and agrees to be bound by the provisions of the Partnership
Agreement in its entirety, including, but not limited to, those provisions
relating to the sales and transfers of interests in the Partnership.

Dated: _________ ___, 20__

__________________________
Name:

B-1

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

EXHIBIT C
Officers
Name
Title
Tyler Reeder
President and Chief Executive Officer
Andrew Singer
General Counsel and Secretary
Andrew Gilbert
Vice President and Treasurer

C-1

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

EXHIBIT D
Certificated Securities and Article 8 Opt-in Provision

Section 10.01. Certification of Interests; Article 8 Opt-in.
(a)    Certification of Interests. The Interests in the Partnership will be
evidenced by certificates in the form of Exhibit E hereto. The Partnership will
maintain books for the purpose of registering the Transfer of Interests. In
connection with a transfer in accordance with this Agreement of any Interests in
the Partnership, the certificate(s) evidencing the Interests will be delivered
to the Partnership for cancellation, and the Partnership will thereupon issue a
new certificate to the transferee evidencing the Interests that were Transferred
and, if applicable, the Partnership will issue a new certificate to the
transferor evidencing any Interests registered in the name of the transferor
that were not Transferred.
(b)    Article 8 Opt-in. The Partnership hereby irrevocably elects that all
Interests in the Partnership will be securities governed by Article 8 of the
Uniform Commercial Code as in effect in the State of Delaware and each other
applicable jurisdiction. Each certificate evidencing Interests in the
Partnership will bear the following legend: “This certificate evidences an
interest in CPN Management, LP and will be a security governed by Article 8 of
the Uniform Commercial Code as in effect in the State of Delaware and, to the
extent permitted by applicable law, Article 8 of the Uniform Commercial Code of
each other applicable jurisdiction.” This provision will not be amended, and any
purported amendment to this provision will not take effect, until all
outstanding certificates have been surrendered for cancellation.

D-1

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

EXHIBIT E
Form of Interest Certificate
CERTIFICATE OF INTEREST

Certificate Number: [___]
CPN Management, LP
Formed under the Delaware Revised Uniform Limited Partnership Act
The transfer of interest represented by this certificate is subject to the
restrictions set forth on the reverse side

This certifies that [_____________] holds an interest in:

CPN Management, LP
a Delaware Limited Partnership

This Certificate is transferable only on the books of CPN Management, LP by the
holder hereof in accordance with the Second Amended and Restated Limited
Partnership Agreement of CPN Management, LP, as amended from time to time (the
“Partnership Agreement”).

This Certificate evidences an interest CPN Management, LP and will be a security
governed by Article 8 of the Uniform Commercial Code as in effect in the State
of Delaware and, to the extent permitted by applicable law, Article 8 of the
Uniform Commercial Code of each other applicable jurisdiction.
In Witness Whereof, the undersigned has executed this Certificate on behalf of
CPN Management, LP this __ day of _________, _____.
_____________________________
Name: [_________]
Title: [_________]

E-1

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

THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR BLUE
SKY LAWS (“BLUE SKY LAW”). THE INTEREST MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE ACT
AND UNDER APPLICABLE BLUE SKY LAW OR UNLESS SUCH OFFER, SALE, TRANSFER, PLEDGE
OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION THEREUNDER AND IS MADE IN
ACCORDANCE WITH THE TERMS, CONDITIONS AND RESTRICTIONS IN THE PARTNERSHIP
AGREEMENT.

E-2