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|                                       | TABLE OF CONTENTS                        | Page |
|--------------------------------------------|----------------------------------------------------|------|
| ARTICLE 1                                  | DEFINITIONS                                        | 2    |
|      Section 1.1. | Definitions and Usage                              | 2    |
|      Section 1.2. | Appendices and Exhibits                            | 2    |
|      Section 1.3. | Headings                                           | 2    |
| ARTICLE 2                                  | FORMATION OF COMPANY AND RELATED MATTERS           | 3    |
|      Section 2.1. | Formation                                          | 3    |
|      Section 2.2. | Name                                               | 3    |
|      Section 2.3. | General Purposes                                   | 3    |
|      Section 2.4. | Specific Powers of Company                         | 3    |
|      Section 2.5. | Principal Place of Business                        | 4    |
|      Section 2.6. | Registered Agent and Office                        | 4    |
|      Section 2.7. | No State Law Partnership                           | 5    |
|      Section 2.8. | Title to Company Assets                            | 5    |
|      Section 2.9. | Term and End of Term                               | 5    |
| ARTICLE 3                                  | OWNERSHIP INTERESTS AND CAPITAL CONTRIBUTIONS      | 6    |
|      Section 3.1. | Members and Ownership Interests                    | 6    |
|      Section 3.2. | Initial Capital Contributions                      | 6    |
|      Section 3.3. | Further Contributions                              | 8    |
|      Section 3.4. | Election to Not Make Further Capital Contributions | 9    |
|      Section 3.5. | No Interest on Capital Contributions               | 11   |
|      Section 3.6. | Contribution Loans                                 | 11   |
|      Section 3.7. | Capital Accounts                                   | 11   |
|      Section 3.8. | Non-Liability of Members                           | 12   |
|      Section 3.9. | Partition                                          | 12   |

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|                                        | TABLE OF CONTENTS(continued)                                | Page     |
|---------------------------------------------|------------------------------------------------------------------|----------|
|      Section 3.10. | Resignation                                                      | 12       |
| ARTICLE 4                                   | MEMBERS AND MANAGEMENT                                           | 12       |
|      Section 4.1.  | General Management Authority                                     | 12       |
|      Section 4.2.  | Day to Day Management Responsibility; Operations and Maintenance | 13       |
|      Section 4.3.  | Management Committee                                             | 16       |
|      Section 4.4.  | Business with Affiliates                                         | 20       |
| ARTICLE 5                                   | JOINT DEVELOPMENT OF PROJECT                                     | 21       |
|      Section 5.1.  | Owner Construct                                                  | 21       |
|      Section 5.2.  | Phases of Development                                            | 22       |
|      Section 5.3.  | Project Director                                                 | 22       |
|      Section 5.4.  | Members' Phase I Development Responsibilities                    | 24       |
|      Section 5.5.  | Project Agreements                                               | 26       |
|      Section 5.6.  | Significant Offtake Agreements                                   | 26       |
|      Section 5.7.  | Project Financing                                                | 28       |
|      Section 5.8.  | PPA Managers                                                     | 29       |
| ARTICLE 6                                   | BUDGETS, CONTRIBUTIONS AND ACCOUNTING                            | 30       |
|      Section 6.1.  | Development Funding                                              | 30       |
|      Section 6.2.  | Operations Funding                                               | 31       |
|      Section 6.3.  | Funding of Capital Repairs and Additions                         | 32       |
|      Section 6.4.  | Approval of Budgets; No Management Committee Deadlock            | 33       |
|      Section 6.5.  | Other Matters Relating to Contributions                          | 34       |
|      Section 6.6.  | Inspection and Audit Rights                                      | 34       |
|      Section 6.7.  | Reporting                                                        | 34       |
|      Section 6.8.       | Financial Statements                                             |  34 |

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|                                       | TABLE OF CONTENTS(continued)                         | Page     |
|--------------------------------------------|-----------------------------------------------------------|----------|
| ARTICLE 7                                  | POWER MARKETING AND FUEL PROCUREMENT                      | 34       |
|      Section 7.1. | Power Marketing Agreement                                 | 34       |
|      Section 7.2. | Marketing Annual Plan; Revenue and Forecasting Benchmarks | 38       |
|      Section 7.3. | Member Marketing                                          | 39       |
|      Section 7.4. | Replacement of Power Marketer                             | 39       |
|      Section 7.5. | Fuel Supply by Members                                    | 41       |
| ARTICLE 8                                  | ASSET OPTIMIZATION                                        | 41       |
|      Section 8.1. | Asset Optimization Committee                              | 41       |
|      Section 8.2. | AOC Participation                                         | 41       |
|      Section 8.3. | AOC Meetings                                              | 42       |
|      Section 8.4. | Chairman                                                  | 42       |
|      Section 8.5. | Vote Required for Action                                  | 42       |
|      Section 8.6. | Compensation                                              | 42       |
|      Section 8.7. | Right to Present Matters to Management Committee          | 42       |
| ARTICLE 9                                  | INSURANCE                                                 | 43       |
|      Section 9.1. | Insurance                                                 | 43       |
| ARTICLE 10                                 | CASUALTY DAMAGE                                           | 43       |
|    Section 10.1.            | Damage or Destruction                                     | 43       |
|    Section 10.2.            | Option to Terminate                                       | 43       |
| ARTICLE 11                                 | CONDEMNATION                                              | 44       |
|    Section 11.1.            | Condemnation of Substantially All of the Facility         | 44       |
|    Section 11.2.            | Condemnation of Part                                      | 44       |
|    Section 11.3.            | Temporary Taking                                          |  44 |
|    Section 11.4.            | Survival                                                  |  44 |

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|                            | TABLE OF CONTENTS(continued)                        |  Page |
|---------------------------------|-----------------------------------------------------|------------|
| ARTICLE 12                      | DISTRIBUTIONS                                       | 44         |
|    Section 12.1. | Priority Distributions                              | 44         |
|    Section 12.2. | Special Distribution to Calpine on Restatement Date | 45         |
|    Section 12.3. | Ordinary Distributions                              | 45         |
|    Section 12.4. | Restricted Distributions                            | 45         |
| ARTICLE 13                      | ALLOCATIONS OF PROFITS AND LOSSES                   | 45         |
|    Section 13.1. | Allocations of Profits                              | 45         |
|    Section 13.2. | Allocation of Losses                                | 46         |
|    Section 13.3. | Allocations Upon Liquidation of the Company         | 46         |
|    Section 13.4. | Substantial Economic Effect of Allocations          | 46         |
|    Section 13.5. | Minimum Gain Chargeback                             | 46         |
|    Section 13.6. | Member Minimum Gain Chargeback                      | 46         |
|    Section 13.7. | Qualified Income Offset                             | 47         |
|    Section 13.8. | Excess Losses                                       | 47         |
|    Section 13.9. | Member Nonrecourse Deductions                       | 47         |
|  Section 13.10.            | Nonrecourse Deductions                              | 47         |
|  Section 13.11.            | Curative Allocations                                | 47         |
|  Section 13.12.            | Code § 754 Adjustments                    | 48         |
|  Section 13.13.            | Other Allocation Rules                              | 48         |
|  Section 13.14.            | Code § 704(c) Allocations                 | 49         |
|  Section 13.15.            | Special Calpine Allocations                         | 49         |
| ARTICLE 14                      |  DISPOSAL OF INTERESTS                         |  49   |
|    Section 14.1.      |  Disposition by Members                        |  49   |
|    Section 14.2.      |  Right of First Refusal                        |  49   |

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|                                        | TABLE OF      CONTENTS(continued)              |  Page |
|---------------------------------------------|------------------------------------------------|------------|
|    Section 14.3.             | Further Requirements                           | 50         |
|    Section 14.4.             | Equitable Relief                               | 51         |
|    Section 14.5.             | Disposee to Become Member                      | 51         |
|    Section 14.6.             | Sales of Interest in a Member                  | 51         |
| ARTICLE 15                                  | DISSOLUTION AND WINDING UP                     | 52         |
|    Section 15.1.             | Events of Dissolution                          | 52         |
|    Section 15.2.             | Winding Up                                     | 52         |
|    Section 15.3.             | Objective of Winding Up                        | 54         |
|    Section 15.4.             | Effect of a Member's Bankruptcy                | 55         |
|    Section 15.5.             | Application and Distribution of Company Assets | 55         |
|    Section 15.6.             | Capital Account Adjustment                     | 55         |
|    Section 15.7.             | Termination of the Company                     | 55         |
|    Section 15.8.             | Deficit Capital Accounts                       | 55         |
| ARTICLE 16                                  | TAXES                                          | 56         |
|    Section 16.1.             | Tax Matters Partner                            | 56         |
|    Section 16.2.             | Tax Returns                                    | 56         |
|      Section 16.3. | Tax Elections                                  | 56         |
|      Section 16.4. | Survival of Tax Provisions                     | 57         |
| ARTICLE 17                                  | LIABILITY, EXCULPATION AND INDEMNIFICATION     | 57         |
|    Section 17.1.             | Liability                                      | 57         |
|    Section 17.2.             | Exculpation                                    | 57         |
|    Section 17.3.                  | Duties and Liabilities of Covered Persons      |  58   |
|    Section 17.4.                  | Indemnification                                |  58   |
|    Section 17.5.                  | Expenses                                       |  59   |

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|                            | TABLE OF      CONTENTS(continued)                           |  Page |
|---------------------------------|-------------------------------------------------------------|------------|
| ARTICLE 18                      | DEFAULTS AND REMEDIES                                       | 59         |
|    Section 18.1. | Defaults and Cure Periods                                   | 59         |
|    Section 18.2. | Remedies of Non-Defaulting Member                           | 60         |
|    Section 18.3. | Notice; Termination                                         | 61         |
|    Section 18.4. | No Pursuit of Project                                       | 61         |
|    Section 18.5. | Defaulting Party's Loss of Representation and Voting Rights | 61         |
|    Section 18.6. | Interest on Overdue Obligations and Post-Judgment Interest  | 61         |
|    Section 18.7. | No Waivers                                                  | 62         |
| ARTICLE 19                      | REPRESENTATIONS, WARRANTIES AND COVENANTS                   | 62         |
|    Section 19.1. | Due Organization                                            | 62         |
|    Section 19.2. | Power and Authority                                         | 62         |
|    Section 19.3. | Due Authorization                                           | 62         |
|    Section 19.4. | Consents                                                    | 62         |
|    Section 19.5. | Binding Obligation                                          | 62         |
|    Section 19.6. | No Violation                                                | 62         |
|    Section 19.7. | No Litigation                                               | 63         |
|    Section 19.8. | Taxes                                                       | 63         |
|    Section 19.9. | Authorized Signatory                                        | 63         |
| ARTICLE 20                      | DISPUTE RESOLUTION                                          | 63         |
|    Section 20.1. | Settlement By Mutual Agreement                              | 63         |
|    Section 20.2.      |  Arbitration                                           |  64   |
|    Section 20.3.      |  Emergency Relief                                      |  64   |
|    Section 20.4.      |  Survival                                              |  64   |
|  ARTICLE 21                |  TIME, APPROVALS AND CONSENTS                          |  64   |

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|                            | TABLE OF      CONTENTS(continued)                     |  Page |
|---------------------------------|-------------------------------------------------------|------------|
|    Section 21.1. | Time                                                  | 64         |
|    Section 21.2. | Approvals and Consents; Standards for Review          | 64         |
| ARTICLE 22                      | GENERAL PROVISIONS                                    | 65         |
|    Section 22.1. | Actual Damages                                        | 65         |
|    Section 22.2. | Amendment                                             | 65         |
|    Section 22.3. | Binding Effect                                        | 65         |
|    Section 22.4. | Complete Agreement                                    | 65         |
|    Section 22.5. | Confidentiality                                       | 65         |
|    Section 22.6. | Counterparts                                          | 66         |
|    Section 22.7. | Further Assurances                                    | 66         |
|    Section 22.8. | Governing Law                                         | 66         |
|    Section 22.9. | Headings; Table of Contents                           | 66         |
|  Section 22.10.            | Interpretation and Reliance                           | 66         |
|  Section 22.11.            | Notices                                               | 66         |
|  Section 22.12.            | Method and Timing of Payment                          | 66         |
|  Section 22.13.            | Intellectual Property License                         | 67         |
|  Section 22.14.            | Public Announcements                                  | 67         |
|  Section 22.15.            | Severability                                          | 67         |
|  Section 22.16.            | Third Party Beneficiaries                             | 67         |
|  Section 22.17.            |  Purchase Procedures                        |  68   |
|                            |  APPENDICES AND EXHIBITS                    |       |
|  APPENDICES:               |                                                  |       |
|  APPENDIX A                |  Glossary of Defined Terms and Rules as to Usage |       |
|  APPENDIX B                |  Members' Contributed Assets                     |       |
|  APPENDIX C                |  Addresses for Notices; Description of Accounts  |       |

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|       | TABLE OF      CONTENTS(continued)                     |   Page |
|------------|-------------------------------------------------------|------------------|
| APPENDIX D | Arbitration Procedures                                |             |
| APPENDIX E | Members' Phase I Development Responsibilities         |             |
| APPENDIX F | Reimbursable Member Expenses as of 1/31/00            |             |
| APPENDIX G | Required Provisions of Asset Management Policy Manual |             |
| APPENDIX H | Development Plan and Construction Schedule            |             |
|       |                                                  |             |
| EXHIBITS:  |                                                  |             |
| EXHIBIT A  | Project Budget                                        |             |
| EXHIBIT B  | Initial Operating Budget                              |             |
| EXHIBIT C  | Insurance Plan                                        |             |
| EXHIBIT D  | Legal Description of Facility Site                    |             |

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ARTICLE2FORMATION OF COMPANY AND RELATED MATTERS

         

           Section 2.2.  Name

           Section 2.3.  GeneralPurposes

            Section 2.4.  SpecificPowers of Company

       (a)  Qualifyto and conduct its business, carry on its operations and have and exercise thepowers granted to a limited liability company by the Delaware Act in any state,territory, district or possession of the United States, or in any foreigncountry, that may be necessary, convenient or incidental to the accomplishmentof the purposes of the Company;

              (b)  Enterinto, perform and carry out contracts of any kind, including contracts with anyMember, any Affiliate thereof, or any agent of the Company necessary, convenientor incidental to, or in connection with, the accomplishment of the purposes of

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the Company, including the DefinitiveAgreements, the Project Agreements and any Financing Documents;

               (c)  Invest andreinvest its funds;

              (d)  Sueand be sued, complain and defend, and participate in administrative or otherproceedings in its name;

               (e)  Appoint agents ofthe Company, including officers, and define their duties and fix theircompensation;

              (f)  Employor retain such agents, officers, employees, managers, accountants, attorneys,consultants and other Persons necessary or appropriate to carry out the businessand affairs of the Company, and to pay such fees, expenses, salaries and wagesand other compensation as the Management Committee shall determine;

               (g)  Indemnify anyPerson in accordance with the Delaware Act and obtain any and all types ofinsurance;

              (h)  Ceaseits activities and cancel its Certificate of Formation;

               (i)  Negotiate, enterinto, renegotiate, extend, renew, terminate, modify, amend, waive, execute,acknowledge or take any other action with respect to any lease, contract,security agreement or any other agreement with respect to any Company Assets oractivities of the Company;

              (j)  Borrowmoney and issue evidences of indebtedness, and secure the same by a mortgage,pledge, security interest or other lien on or in some or all of the CompanyAssets;

               (k)  Pay, collect,compromise, litigate, arbitrate or otherwise adjust or settle any and all otherclaims or demands of or against the Company or to hold such proceeds against thepayment of contingent liabilities; and

              (l)  Make,execute, acknowledge and file any and all documents or instruments necessary,convenient or incidental to the accomplishment of the purposes of theCompany.

          Section 2.6.  RegisteredAgent and Office

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           Section 2.8.  Title toCompany Assets

          Section 2.9.  Term andEnd of Term 

               (a)  In the event the Management Committeedecides to dissolve the Company and trigger the Windup Events, on and after thedate of this decision, the Company shall continue its existence only for suchpurpose until the completion of the Windup Events, at which time the TerminationDate will be deemed to have occurred.

               (b)  In theevent the Management Committee does not agree upon a course of action before thedate that is six (6) months prior to the end of the Initial Term, either Membershall have the right to acquire all (but not less than all) of the OwnershipInterest of the other Member at a Purchase Price equal to Fair Market Value ofsuch Ownership Interest, as determined in accordance with the procedures setforth in Section22.17.  The Member desiring to acquire all of the OwnershipInterest of the other Member must submit its Offer to the other Member prior tothe end of the Initial Term.  If no Offer is submitted prior to theend of the Initial Term, then, unless either Member timely initiates the WindupEvents under Section 2.9(d),the Members will be deemed to have decided to continue the operation of theFacility, and the Term of the Company will continue for an ExtensionTerm.

               (c)  In the event that each Memberwishes to purchase the other Member's Ownership Interest at the end of theInitial Term or the Extension Term then in effect, then the Members will bedeemed to have decided to continue the operation of the Facility, and the Termof the Company will continue for an additional periodof five (5) years ("Extension Term")commencing on the next day after the last day of the Initial Term or theprevious Extension Term

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and ending on the fifth (5th) anniversarythereof.  No later than one (1) year before the end of any ExtensionTerm then in effect, the Management Committee shall again meet to determinewhether to continue the operation of the Facility or whether to dissolve theCompany and trigger the Windup Events.  In the event the ManagementCommittee does not agree upon a course of action before the date that is six (6)months prior to the end of the Extension Term then in effect, the proceduresdescribed in Section 2.9(b)shall again be applicable with respect to each subsequent ExtensionTerm.

               (d)  In the event that bythe end of the Initial Term or the Extension Term then in effect (ifapplicable), the Management Committee has not agreed on a course of action andneither Member has exercised its right to purchase the Ownership Interest of theother Member, then, within six (6) months after the end of the Initial Term orthe previous Extension Term (as applicable), either Member may initiate theWindup Events and this Agreement shall thereafter remain in effect only for thepurpose of dissolving the Company and undertaking the Windup Events and, uponcompletion thereof, the Termination Date will be deemed to haveoccurred.  Any failure by the Management Committee to agree on acourse of action under this Section 2.9shall not constitute a Dispute or Controversy.

               (e)  The existence of the Companyas a separate legal entity shall continue until the cancellation of theCompany's Certificate of Formation in the manner required by the DelawareAct.

ARTICLE 3OWNERSHIPINTERESTS AND CAPITAL CONTRIBUTIONS 

| Members           | Ownership Interests   |
|------------------------|----------------------------|
| Calpine           | 50%                   |
| Acadia Holdings   | 50%                   |

          Section 3.2.  InitialCapital Contributions 

                    

| Calpine           | $1,000   |
|------------------------|---------------|
| Acadia Holdings   | $1,000   |

 

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                    3.2.3.  ActionsPrior to Contribution Date 

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            Section 3.3.  Further Contributions.

                    3.3.1.  MaximumAggregate Capital Contributions

| Calpine           | $250,000,000   |
|------------------------|---------------------|
| Acadia Holdings   | $250,000,000   |

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                    3.3.3.  Paymentsby Affiliate Guarantors Prior to Commercial OperationDate

                    3.3.4.  Paymentsby Affiliate Guarantors On or After Commercial OperationDate

                    3.3.5.  SubordinatedObligations

            Section 3.4.  Electionto Not Make Further Capital Contributions. 

                    3.4.1.  Opt-OutNotice and Non-Electing Member's Election

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     Section 3.5. NoInterest on Capital Contributions.  No Member is entitled to interest on its CapitalContributions.

           Section3.6.  ContributionLoans 

              (a)  Shouldthere occur a Contribution Default as to any Member (a "NoncontributingMember"), then the Member which has made its required CapitalContributions (such Member being the "Contributing Member")shall have the right, but not the obligation, to advance such amount directly tothe Company as a loan to the Noncontributing Member (a "Contribution Loan"),without prejudice to the Contributing Member's other rights hereunder, includingthe right to declare an Event of Default under Article 18.

              (b)  EachContribution Loan shall bear interest at a rate equal to the DefaultRate.  A Noncontributing Member shall repay its Contribution Loan on afirst priority basis out of any and all subsequent distributions to which theNoncontributing Member would otherwise be entitled under this Agreement (and theCompany and the Management Committee are hereby irrevocably directed to pay allsuch distributions directly to the Contributing Member), with all principal andinterest in any event being due in full on the first anniversary of the datesuch Contribution Loan is made.  All payments on account of aContribution Loan shall be applied first to interest and then to principal untilthe Contribution Loan is repaid in full.

              (c)  AContributing Member participating in a Contribution Loan may designate anAffiliate to make a Contribution Loan hereunder on such Member'sbehalf.

              (d)  TheContributing Member's Contribution Loan shall be secured by a security interestin the noncontributing Member's Ownership Interest and all proceeds thereof,including all distributions attributable thereto, and each Member shall grant tothe other a security interest therein to secure its obligation to repay anyContribution Loan together with interest thereon.  Such securityinterest shall at all times be subordinate to any security interest granted bythe Members in connection with any Project Financing.

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            Section 3.9.  Partition

            Section 3.10.  Resignation

  

           Section 4.1.  GeneralManagement Authority

         (a)  Approveall budgets of the Company for any expense or expenditure, including eachOperating Budget and Capital Expense Budget as provided in Section6.4;

              (b)  Approveany expenditure undertaken for the Project not budgeted and/or adjustments inthe approved and then-applicable Project Budget, Operating Budget or CapitalExpense Budget;

                      (c)  Approvechanges in the schedule for the Project;

Approve any expenditures out of contingency funds and requestsfor additional Capital Contributions;

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               (e)  Appoint and/or remove the Project Management Company, subject tothe terms of the Project Management Agreement; appoint and/or remove theOperator, subject to the terms of the O&M Arrangements; appoint and/orremove the Project Director, or such Person's replacement, in accordance withSection 5.3;reassign either Member's development responsibilities established pursuant toSection 5.4,and appoint and/or remove the individuals responsible for undertaking thoseresponsibilities; and appoint and/or remove the Power Marketer in accordancewith the Power Marketing Agreement;

               (f)  Approve any application for and accept any conditions toany Necessary Regulatory Approvals and any other necessary or appropriategovernmental permits or authorizations related to the Facility or itsconstruction or operation;

               (g)  Approve the form and content of any FinancingCommitments;

               (h)  Approve all tax policy matters regarding the Company, includingelections relating to income and single business taxes (other than thoseelections reserved for the individual Members to make), preparation and filingof Company tax returns and the handling of and participation in Company taxaudits conducted by any Governmental Authority;

               (i)  Appoint and/or remove outside legal counsel, CertifiedPublic Accountants and other consultants for the Company;

               (j)  Approve any insurance and indemnity program covering theinterests of the Company or other Persons;

               (k)  Make or approve any public announcements regarding the Project;and

               (l)  Approve the Project Agreements, Definitive Agreement or anyFinancing Document and any amendment thereto, waiver of any provision thereof orthe exercise of remedies with respect thereto.

                    4.2.1.  O&MArrangements

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               (a)  Assisting the Company and the ProjectManagement Company in preparing for commercial operation of the Facility;

               (b)  Conducting orientation and trainingprograms for employees;

               (c)  Developing andenforcing a plant safety program, hazardous materials program and emergencyresponse plan;

               (d)  Developing a reasonable inventory listfor materials, supplies, spare and replacement parts, equipment, vehicles andother items necessary for operation and Maintenance of the Facility;

               (e)  Performing procurementservices for the Company;

               (f)  Managing scheduled andunscheduled outages and emergencies at the Facility;

               (g)  Testing fuel quality;

               (h)  Operating the Facility inaccordance with (i) the Annual Plan and the schedules provided by the PowerMarketer for the delivery of Energy, (ii) the then current OperatingBudget, and (iii) the Operating Standard;

               (i)  Carrying out periodic performance testsof the Facility;

               (j)  Preparing the OperatingBudgets as required by Section 6.2.1and Capital Expense Budgets as required by Section 6.3.1for submission to the Management Committee for approval;

               (k)  Testing and recalibrating theFacility meter(s);

               (l)  Performing, or causing to beperformed, all Maintenance necessary to keep the Facility in a condition tooperate in accordance with the Operating Standard and keeping, or causing to bekept, the Facility and the Facility Site in a clean, neat and orderly conditiongiven its nature and use;

               (m)  Performing, or causing to beperformed, all Capital Repairs and Additions authorized by the ManagementCommittee in connection with the then current Capital Expense Budget;

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               (o)  Preparing and maintainingdaily operating logs regarding generation of Energy and operation andMaintenance of the Facility.

                    4.2.3.  Owner'sRepresentative

                    4.2.4.  ReplacementUpon Event of Default and Termination of PPA

          (a)  TheCompany shall require Calpine Central to enter into a written instrument ofassignment and assumption transferring the O&M Agreement and the ProjectManagement Agreement to Acadia Holdings or an Affiliate thereof designated byAcadia Holdings (together with its address), such instrument to be in form andsubstance satisfactory to the Company and Acadia Holdings; and

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               (b)  Acadia Holdings shall, or shall cause itsdesignated Affiliate to, enter into such instrument of assignment and assumptionas assignee.

            Section 4.3.  ManagementCommittee 
| Position         | Calpine           | Acadia Holdings        |
|-----------------------|------------------------|-----------------------------|
| Representative   | Woody Saylor      | Samuel Charlton, III   |
| Representative   | Robert Regan      | Bill Fontenot          |
| Alternate        | Andre K. Walker   | Keith Johnson          |
| Alternate        | Steve Dowdy       | Chuck Murray           |

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      4.3.3.  Regular Meetings

                    4.3.4.  Special Meetings

                    4.3.5.  Telephonic MeetingsPermitted

                    4.3.6.  Chairman; Secretary.

               (a)  A Calpine Representative shall act as Chairman of the ManagementCommittee from the Effective Time until the Commercial OperationDate.  As of the Restatement Date, Samuel Charlton, III has beendesignated as the Chairman of the Management Committee.  Chairmanshipof the Management Committee shall rotate between the Members every two (2)Fiscal Years during the Term, such rotation to be effective on January 1 ofevery other Fiscal Year.  The Chairman shall at all times be one ofthe Representatives.  The Chairman of the Management Committee shallprovide notice to each Representative stating the place, date and hour of eachmeeting of the Management Committee, together with an agenda for the meeting,not less than ten (10) days before the date of the meeting (unless such noticeis waived by each Member's Representatives either at the meeting or by writtenconsent).  The Chairman of the Management Committee shall include onthe agenda any items that a Member or a Representative requests in advance to beincluded.  At least five (5) days before each meeting (or if themeeting is called on shorter notice, as far in advance as is practicable underthe circumstances), detailed information on the mattersto be considered by the Management Committee will be provided to eachRepresentative. The Chairman shall have the authority to sign for and bind theCompany to all agreements, subject to the prior approval of the ManagementCommittee.  The Chairman will have the same voting power as the otherRepresentatives and will not have any right to cast any tie-breaking or specialvote of any kind.

              (b)  TheChairman or any Representative may invite additional attendees to meetings ofthe Management Committee.  Such attendees, who shall be identified atthe 

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               (c)  The Management Committee shall also designate a Secretaryof the Management Committee, who may or may not be a Representative orAlternate.  The Secretary shall be responsible for maintaining allminutes and other necessary records of the meetings of the Management Committeeand shall be authorized to execute and deliver any and all certificatesacknowledging actions approved by the Management Committee.  Withinten (10) days after each Management Committee meeting, the Secretary shall sendto each Member for review and approval a copy of the minutes of such meeting. Inaddition, the Secretary shall have such other responsibilities as arecustomarily undertaken by the Secretary of a corporation or are otherwiseauthorized by action of the Management Committee.

                    4.3.8.  Quorum;Simple Majority Vote Required for Action

                    4.3.9.  SuperMajority Vote on Certain Matters

               (a)  The sale of all or a substantial portionof the Company Assets;

           (b)  Merger or consolidation of the Company with another Person;and

              (c)  Voluntarywinding up of the affairs of the Company and dissolution or liquidation of theCompany.

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                    4.3.10.  Unanimous ApprovalRequired

               (a)  Any proposal by aMember to substitute credit support pursuant to Section 4.4.5;

              (b)  Theappointment of a Liquidator under Section15.2(b);

               (c)  Any actioncontemplated by Code § 6222 through6231; and

              (d)  Achange in the nature of the Company's business.

                    4.3.12.  ManagementCommittee Compensation

                    4.3.13.  Duties ofMembers

            Section 4.4.  Businesswith Affiliates 

                    4.4.1.  Arms'Length Basis for Affiliate Contracts

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                    4.4.2.  DisqualifiedMatters

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                    4.4.4.  Conflictsof Interest; Competition with Project

                    4.4.5.  Substitutionfor Credit Support

                    4.4.6.  CertainActions Under Calpine 2001 PPA Guaranty

ARTICLE 5JOINTDEVELOPMENT OF PROJECT 

            Section 5.1.  OwnerConstruct

              (a)  "Phase I" commencedprior to the Effective Time and shall end on the Project Director DischargeDate, it being understood that Phase I and Phase II will overlap. Phase I shallconsist of all activities necessary or appropriate for the development andfinancing 

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              (b)  "Phase II" shallcommence at the Effective Time and shall end on the Commercial OperationDate.  Phase II shall consist of all activities necessary orappropriate for the construction, testing and start-up of the Facility (the"Phase IIActivities"), and shall include (i) procurement activities and (ii)hiring and training of necessary operating staff.

               (c)  "Phase III" shallcommence on the Commercial Operation Date and shall end on the TerminationDate.  Phase III shall consist of all activities necessary orappropriate for the operation, maintenance and management of the Project inaccordance with the Operating Standard, this Agreement, the DefinitiveAgreements, the Project Agreements and the Financing Documents (the "Phase IIIActivities").

          Section 5.3.  ProjectDirector 

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                    5.3.3.  ReportingResponsibilities

                    5.3.4.  Standardof Conduct

              (a)  TheProject Director has been identified and proposed by the Project ManagementCompany, subject to approval by the Management Committee, and is employed by theProject Management Company or an Affiliate of the Project ManagementCompany.  The power and authority of the Project Director shallcontinue in full force and effect until the date on which the ManagementCommittee determines that the Phase I Activities hereunder have beencompleted or that their coordination will be completed by the ConstructionManager or the Plant Manager (the "Project Director DischargeDate").

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               (b)  The appointed ProjectDirector may be earlier terminated by the Management Committee (i) if he or shehas failed to follow the directions of the Management Committee in any materialinstance or to observe any provision of this Agreement, after notice to theProject Management Company and the Project Director specifying the infractionand the actions to be taken to remedy the same, and a reasonable opportunity tocure such infraction has elapsed without remedying the infraction, by a vote ofthe Management Committee (with such matter considered a Disqualified Matter onwhich the Member that is the Project Management Company or the Member whoseAffiliate is the Project Management Company, as the case may be, shall have novote) or (ii) if said individual dies, becomes incapacitated or ceasesworking for the Project Management Company or an Affiliate of the ProjectManagement Company.  In the event the appointment of a ProjectDirector is terminated, the Member that is the Project Management Company or theMember whose Affiliate is the Project Management Company, as the case may be,shall promptly provide the Company with a plan for succession and orderlytransition of the Project Director's functions so that at no point will there beno Project Director in place, including, in the event the appointment of theProject Director is terminated under clause (ii) above, the temporaryappointment of an interim Project Director (which shall not require ManagementCommittee approval) who shall serve in such capacity until the ManagementCommittee shall have approved a replacement Project Director.

           (c)  Upon theManagement Committee's direction, the Member that is the Project ManagementCompany or the Member whose Affiliate is the Project Management Company, as thecase may be, shall implement such succession plan.  As part of suchplan, the Project Management Company shall give the Company notice of theproposed substitution or replacement of another qualified individual as theProject Director to serve until the Project Director Discharge Date (togetherwith information as to the individual's qualifications and credentials), and theManagement Committee shall have the right to approve or disapprove of theindividual proposed to serve as the Project Director.  If theManagement Committee does not approve the individual proposed within fifteen(15) days after the proposal is made, the Member that is the Project ManagementCompany or the Member whose Affiliate is the Project Management Company, as thecase may be, shall promptly propose another qualified individual in accordancewith the preceding sentence.  Until the Management Committee approvesa replacement Project Director, the then acting Project Director (including anyinterim Project Director) shall continue in the performance of his or her dutiesas Project Director.

          Section 5.4.  Members'Phase I Development Responsibilities

                    5.4.1.  

               (a)  To appoint an individual, who may or may not be theMember's Representative, to have lead responsibility for each of the tasksassigned.  Such individual will coordinate his or her activitiesdirectly with the Project Director, who shall supervise and coordinate allPhase I Activities;

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               (b)  To provide to the Project Directoran initial budget of anticipated Third Party Expenses and Reimbursable MemberExpenses and schedule for accomplishing its tasks and other data and informationin regard to the budget and schedule upon the Project Director's request or ascircumstances warrant;

              (c)  Toact as the interface with, and supervise, all third parties performing workrelated to its tasks;

               (d)  To report to theProject Director as requested, or cause the individuals to whom such tasks areassigned to report to the Project Director as requested, regarding the status ofthe Member's tasks, and to report all major developments relating to its tasksas circumstances warrant;

               (e)  To provide such information and materials, or to cause theindividuals to whom such tasks are assigned to provide such information andmaterials, as the Project Director or the other Member may reasonably requestand to allow review by the Management Committee or the other Member of allmaterial work product; and

               (f)  To cooperate withthe other Member in performing its respective tasks.

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                    5.4.4.  Appointmentand Removal of Individuals

            Section 5.5.  ProjectAgreements

           Section 5.6.  SignificantOfftake Agreements

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               (a)  Vote to approve the proposedSignificant Offtake Agreement, in which event the proposed agreement shall beexecuted by the Chairman on behalf of the Company or the proposing Member shallbe authorized to conclude any final negotiations of the agreement (which shallnot include any material changes from the agreement presented to the ManagementCommittee for approval), and prepare and submit to the Chairman for signaturethe final, executable Significant Offtake Agreement;

              (b)  Subjectto the provisions of Section 5.6.1, voteagainst approving the proposed Significant Offtake Agreement, in which event theproposing Member shall take no further action on behalf of the Company withregard to the proposed agreement; or

               (c)  Specify revisions to the terms of the proposedSignificant Offtake Agreement that the Management Committee requires forapproval of the agreement, in which event the proposing Member (i) shallcontinue to negotiate with the counterparty to the proposed agreement in orderto address such terms to the satisfaction of the Management Committee and(ii) shall, if it is successful in negotiating the terms required by theManagement Committee (or in negotiating such alternate terms that the proposingMember reasonably believes the Management Committee may desire to accept),present the revised Significant Offtake Agreement at a subsequent meeting of theManagement Committee in accordance with the foregoing procedures.

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            Section 5.8.  PPAManagers. 

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                    5.8.1.  Appointment

                    5.8.2.  Scope ofAuthority.  The PPA Managers shall have theright to make all decisions on behalf of the Company with respect to the mattersthat require a decision of or direction from the Company at such time pursuantto Section 2.11.5of the O&M Agreement, including the issuance of Product Notices (as definedin the O&M Agreement) and, to the extent the Company so elects in accordancewith Section 2.11.5.2of the O&M Agreement, directing the issuance of Operational Notices (asdefined in the O&M Agreement) by the Operator.  To the extent anysuch decision or direction involves the first twenty-four (24) hours of anyoutage or other event or circumstance, such decision or direction shall be givenor made by the Acadia Holdings PPA Manager in his or her sole discretion onbehalf of the Company.  To the extent any such decision or directioninvolves the period beyond the first twenty-four (24) hours of any outage orother event or circumstance, such decision or direction shall be given or madeonly by mutual agreement of the Acadia Holdings PPA Manager and the Calpine PPAManager.  Either PPA Manager may, without the need for any consentfrom the other PPA Manager, exercise the elections afforded the Company underSection 2.11.5.2of the O&M Agreement.  All directions given and decisions made byeither PPA Manager or both PPA Managers in accordance with this Section 5.8.2shall be final and binding on the Company and shall not be subject to review orapproval by the Management Committee or by anyMember.  Notwithstanding the foregoing, if the PPA Managers do notagree on any matter requiring the mutual agreement of both PPA Managers underthis Section 5.8.2within three (3) hours after the initial communication between the PPAManagers regarding such matter, either PPA Manager may refer the matter to theManagement Committee, which shall then give therelevant directions or make the relevant decisions on behalf of theCompany.

ARTICLE 6BUDGETS, CONTRIBUTIONS AND ACCOUNTING

          Section 6.1.  DevelopmentFunding 

                   6.1.2.  ProjectAccount; Project Costs

  

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                    6.1.3.  Submissionof Third Party Expenses by Members.

ach Member shall promptly forward invoices for payment ofThird Party Expenses to the Project Director by the tenth (10th) day of each Monthwith respect to the preceding Month.  Third Party Expenses shall bepaid solely by the Project Management Company and only to the extent included inthe Project Budget, and no Member shall make direct payment of any Third PartyExpenses.  Such Third Party Expenses will be submitted to theManagement Committee by the Project Management Company as Project Costs to theextent they are included in the Project Budget, in accordance with Section 6.1.2(b), andpaid by the Company

ach Member shall be entitled to reimbursement by the Companyfor all its Reimbursable Member Expenses incurred in connection with itsPhase I development 

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           Section 6.2.  OperationsFunding 

                    6.2.3.  Reserves

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           Section 6.3.  Fundingof Capital Repairs and Additions 

                    6.3.1.  CapitalExpense Budget

                    6.3.2.  Funding of Capital ExpenseBudgets

            Section 6.4.  Approvalof Budgets; No Management Committee Deadlock 

                    6.4.1.  Approvalof Budgets

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                    6.4.2.  BudgetDeadlock

            Section 6.5.  OtherMatters Relating to Contributions 

            Section 6.6.  Inspectionand Audit Rights

           Section 6.7.  Reporting

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            Section 6.8.  FinancialStatements

           Section 7.1.  PowerMarketing Agreement.  As soon as reasonably practicableafter the Trigger Date, in a period that is anticipated to end ninety (90) daysafter the Trigger Date, the Management Committee shall negotiate and cause theCompany to enter into an Affiliate Contract with the Power Marketer (the "Power MarketingAgreement") for the provision of the following services to theCompany:  the nomination, purchase and sale of natural gas necessaryto operate the Facility, the sale of Energy, Capacity and ancillary servicesprovided by the Facility, intra-day trading of Reserve Margin and Energygenerated therefrom (or other trading as directed by the Management Committee),risk management, scheduling for, and the dispatch of, Energy, and other projectrelated commercial and operational activities assigned to it by the

                    7.1.1.Initial Power Marketer;Power Marketing for Next Project

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                    7.1.2.  Reimbursement

                    7.1.3.  ThirdParty Assistance

                    7.1.4.  Asset Management Policy Manual

              (a)  TheAsset Management Policy Manual shall set the applicable price at which eitherMember can purchase (or arrange for the purchase) of Capacity and Energypursuant to Section 7.3 (the"TransferPrice"), state the policies and procedures for all Power MarketingServices, contain certain risk parameters for trading by the Power Marketer ofCapacity, Energy and ancillary services from the Facility (which the ManagementCommittee may change from time to time) and incorporate the provisions set forthin Appendix I.  TheTransfer Price is anticipated to reflect the "all in" costs to the Companyallocable to the Capacity and Energy that either Member may purchase (or arrangefor the purchase of) from the Company hereunder.

               (b)  All Power MarketingServices undertaken by the Power Marketer in connection with the Project shallbe undertaken in accordance with the Asset Management Policy Manual, and any andall risk parameters set forth therein or that the Management Committee may fromtime to time establish in connection therewith.  The ManagementCommittee may modify, amend or restate the Asset Management Policy Manual at anytime and from time to time in its discretion.

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                    7.1.5.  Asset Manager

                    7.1.6.  Standard of Conduct

                    7.1.7.  AssetBook

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                    7.1.8.  Dispatch

                    7.1.9.  Orderly Transition of PowerMarketer

            Section 7.2.  MarketingAnnual Plan; Revenue and Forecasting Benchmarks. 

                    7.2.1.  AnnualPlan; Updates; Benchmarks

               (a)  Revenue benchmarks setting forth the Power Marketer'sproposed net revenue goals for the Company over specified periods of time andthe frequency upon which the Power Marketer's performance shall be determined(the "RevenueBenchmarks"); and

          (b)  Anannual forecast (the "Annual Forecast")that sets forth the following:  (i) the variable maximum amounts ofEnergy that the Power Marketer anticipates the Company will be required todeliver each Month under all Offtake Agreements for the forecasted year,together with reasonable margins above the delivery requirements under allOfftake Agreements (such margins being referred to herein as the "Reserve Margin")(collectively, the "Contracted EnergyRequirements"); (ii) the fixed amount of Capacity that the Power Marketerbelieves in no event will be needed to meet the Contracted Energy Requirementsat any time during the forecasted year ("UncommittedCapacity"); 

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                    7.2.2.  Approval of AnnualPlan

                    7.2.3.  Implementation of Annual Plan;Meetings

                    7.2.4.  Changesto Annual Plan

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           Section 7.3.  MemberMarketing

       (a)  Up tofifty percent (50%) of the Uncommitted Capacity, if any, and the Energy that canbe generated from this percentage of Uncommitted Capacity; and

               (b)  Up to fifty percent(50%) of the Available Swing Energy.

          Section 7.4.  Replacementof Power Marketer.

                    7.4.1. 

                    7.4.2.  UponChange in Control of Member

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                    7.4.3.  UponDefault

            Section 7.5.  Fuel Supply by Members

ARTICLE 8ASSETOPTIMIZATION 

   

            Section 8.2.  AOCParticipation

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          Section 8.3.  AOCMeetings 

                    8.3.2.  SpecialMeetings

                    8.3.3.  TelephonicMeetings Permitted

            Section 8.4.  Chairman

           Section 8.5.  VoteRequired for Action

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            Section 8.6.  Compensation

           Section 8.7.  Right toPresent Matters to Management Committee

ARTICLE9 INSURANCE

ARTICLE 10 CASUALTYDAMAGE 

            Section 10.1.  Damage orDestruction

             Section 10.2.  Option toTerminate 

                    10.2.1.  Damage orDestruction of Substantially All of the Facility

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                    10.2.2.  Proceeds and Deductiblesupon Termination

ARTICLE11 CONDEMNATION

                    11.1.2.  CondemnationAwards

            Section 11.2.  Condemnationof Part

           Section 11.3.  TemporaryTaking

            Section 11.4.  Survival

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ARTICLE 12 DISTRIBUTIONS

            Section 12.2.  Special Distribution to Calpine onRestatement Date.

           Section 12.3.  OrdinaryDistributions

            Section 12.4.  RestrictedDistributions

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            Section 13.1.  Allocationsof Profits

            Section 13.2.  Allocation of Losses.

           Section 13.3.AllocationsUpon Liquidation of the Company. 

           Section 13.4.  Substantial Economic Effect ofAllocations

           Section13.5.  MinimumGain Chargeback

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            Section 13.6.  MemberMinimum Gain Chargeback

           Section 13.7.  Qualified IncomeOffset

            Section 13.8.  ExcessLosses

            Section 13.9.  MemberNonrecourse Deductions

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           Section13.10.  NonrecourseDeductions

           Section13.11.  CurativeAllocations

            Section 13.12.  Code § 754Adjustments

            Section 13.13.  OtherAllocation Rules

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            Section 13.14.  Code § 704(c)Allocations

           Section13.15.  SpecialCalpine Allocations

  

            Section 14.1.  Dispositionby Members

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           Section 14.2.  Right ofFirst Refusal

            Section 14.3.  FurtherRe

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            Section 14.4.  Equitable Relief

            Section 14.5.  Disposeeto Become Member

            Section 14.6.  Sales ofInterest in a Member

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            Section 15.3.  Objectiveof Winding Up

           Section15.4.  Effect of a Member'sBankruptcy

            Section 15.5.  Applicationand Distribution of Company Assets

           Section 15.6.  Capital AccountAdjustment

           Section 15.7.  Terminationof the Company

            Section 15.8.  DeficitCapital Accounts

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ARTICLE 16TAXES

           Section 16.2.  TaxReturns

           Section 16.3.  TaxElections

              (a)  Toadopt the calendar year as the Company's Fiscal Year;

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               (b)  To adopt theaccrual method of accounting applied in a consistent manner for purposes ofmaintaining the Company's books and records and for federal income taxpurposes;

              (c)  Ifa distribution of Company Assets as described in Code § 734 occurs or if atransfer of an Ownership Interest as described in Code § 743 occurs, onwritten request of the other Member or the Tax MattersPartner's own election, to elect, pursuant to Code § 754, to adjust thebasis of the Company Assets;

              (d)  To elect to amortize the organizational expenses of theCompany and the startup expenditures of the Company under Code § 195ratably over a period of sixty (60) months as permitted by Code§ 709(b);

         (e)  Toelect to adopt the Code § 704(c) allocation methods with respect toproperty contributions by the Members; and

          (f)  Anyother election the Management Committee may deem appropriate and in the bestinterests of the Members.

           Section 16.4.  Survival of TaxProvisions

ARTICLE 17LIABILITY,EXCULPATION AND INDEMNIFICATION 

            Section 17.2.  Exculpation

              (a)  NoCovered Person shall be liable to the Company or any other Covered Person forany loss, damage or claim incurred by reason of any act or omission performed oromitted by such Covered Person in good faith on behalf of the Company and in amanner reasonably believed to be within the scope of authority conferred on suchCovered Person by this Agreement, except that a Covered Person shall be liablefor any such loss, damage or claim incurred by reason of such Covered Person'sgross negligence or willful misconduct.

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               (b)  A Covered Personshall be fully protected in relying in good faith upon the records of theCompany and upon such information, opinions, reports or statements presented tothe Company by any Person selected by the Management Committee as to matters theCovered Person reasonably believes are within such other Person's professionalor expert competence, including information, opinions,reports or statements as to the value and amount of the assets, liabilities,profits, losses, or any other facts pertinent to the existence and amount ofassets from which distributions to Members might properly be paid.

          Section 17.3.  Dutiesand Liabilities of Covered Persons 

               (a)  To the extent that, at law orin equity, a Covered Person has duties (including fiduciary duties) andliabilities relating thereto to the Company or to any other Covered Person, aCovered Person acting under this Agreement shall not be liable to the Company orto any other Covered Person for its good faith reliance on the provisions ofthis Agreement.  The provisions of this Agreement, to the extent thatthey restrict the duties and liabilities of a Covered Person otherwise existingat law or in equity, are agreed by the Members to replace such other duties andliabilities of such Covered Person.

               (b)  Unless otherwiseexpressly provided herein, whenever a conflict of interest exists or arisesbetween Covered Persons, or whenever this Agreement or any other agreementcontemplated herein provides that a Covered Person shall act in a manner thatis, or provides terms that are, fair and reasonable to the Company or anyMember, the Covered Person shall resolve such conflict of interest, taking suchaction or providing such terms, considering in each case the relative interestof each party (including its own interest) to such conflict, agreement,transaction or situation and the benefits and burdens relating to suchinterests, any customary or accepted industry practices, including the OperatingStandard, and any applicable generally accepted accounting practices orprinciples.  In the absence of bad faith by the Covered Person, theresolution, action or term so made, taken or provided by the Covered Personshall not constitute a breach of this Agreement or any other agreementcontemplated herein or of any duty or obligation of the Covered Person at law orin equity or otherwise.

               (c)  Whenever in this Agreement aCovered Person is permitted or required to make a decision (i) in its"discretion" or under a grant of similar authority or latitude, the CoveredPerson shall be entitled to consider such interests and factors as it desires,including its own interests, and shall have no duty or obligation to give anyconsideration to any interest of or factors affecting the Company or any otherPerson, or (ii) in its "good faith" or under another express standard, theCovered Person shall act under such express standard and shall not be subject toany other or difference standard imposed by this Agreement or other ApplicableLaw.

           Section 17.4.  Indemnification

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           Section 17.5.  Expenses

ARTICLES 18DEFAULTSAND REMEDIES 

            Section 18.1.  Defaultsand Cure Periods

              (a)  Thematerial breach of any provision of this Agreement by a Member;

               (b)  The institutionby a Member of proceedings of any nature under any Law, whether now existing orsubsequently enacted or amended, for the relief of debtors wherein such Memberis seeking relief as a debtor;

              (c)  Ageneral assignment by a Member for the benefit of creditors;

               (d)  The institutionby a Member of a case or other proceeding as a debtor under any section orchapter of the federal Bankruptcy Code or other bankruptcy or insolvency Law asnow existing or hereafter amended or becoming effective;

               (e)  The institution against a Member of a case or proceedingunder any section or chapter of the federal Bankruptcy Code or other bankruptcyor insolvency Law as now existing or hereafter amended or becoming effective,which proceeding is not dismissed, stayed or discharged within a period of sixty(60) days after the filing thereof or, if stayed, which stay is thereafterlifted without a contemporaneous discharge or dismissal of suchproceeding;

              (f)  Theappointment of a receiver, custodian, liquidator, trustee or like officer, totake possession of assets of a Member having a value in excess of $1,000,000 ifthe pendency of said receivership would reasonably tend to have a materiallyadverse effect upon the performance by said Member of its obligations under thisAgreement, which receivership remains undischarged for a period of ninety (90)days from the date of its imposition;

               (g)  Theadmission by a Member in writing of its inability to pay its debts as theymature;

               (h)  The attachment, execution or otherjudicial seizure of all or any substantial part of a Member's assets or of aMember's Ownership Interest, or any part thereof, such 

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after the levy thereof, ifthe occurrence of such attachment, execution or other judicial seizure wouldreasonably tend to have a materially adverse effect upon the performance by suchMember of its obligations under this Agreement; provided, however, that such anattachment, execution or seizure shall not constitute an Event of Defaulthereunder if such Member posts a bond sufficient to fully satisfy the amount ofsuch claim or judgment within fifteen (15) days after the levy thereof and theMember's assets are thereby released from the lien of such attachment;

               (i)  Fraud by a Member which relates tothe Company or the Members; or

               (j)  The occurrence ofa Contribution Default and/or breach of any guarantee provided by such Member orits Affiliate in connection with any Capital Contribution;

            Section 18.2.  Remedies of Non-DefaultingMember

              (a)  TheNon-Defaulting Party may recover for deposit into the Project Account allamounts due and payable by the Defaulting Party into the Project Account underthis Agreement, regardless whether the Non-Defaulting Party has exercised any ofits termination rights hereunder with respect to such Event ofDefault;

               (b)  TheNon-Defaulting Party shall have the right, subject to the notice and cure andother provisions of Section 18.3, todissolve the Company and trigger the Windup Events; and

              (c)  TheNon-Defaulting Party shall have the right to acquire all (but not less than all)of the Ownership Interest of the Defaulting Party in accordance with theprocedures set forth in Section 22.17,except that the Purchase Price shall be the Fair Market Value of the DefaultingParty's Ownership Interest minus an amount equal to twenty percent (20%) of suchFair Market Value as liquidated damages, it being agreed by the Members

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with reasonablecertainty, (ii) are not a penalty, and (iii) will be applicable regardless ofthe actual damages sustained by the Non-Defaulting Party.

           Section 18.3.  Notice; Termination

          

       Section 18.4.  No Pursuit of Project

            Section 18.5.  DefaultingParty's Loss of Representation and Voting Rights

           Section 18.6.  Intereston Overdue Obligations and Post-Judgment Interest

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            Section 18.7.  No Waivers

ARTICLES 19REPRESENTATIONS, WARRANTIES AND COVENANTS

            Section 19.1.  Due Organization

           Section 19.2.  Power andAuthority 

            Section 19.3.  DueAuthorization 

           Section 19.4.  Consents

           Section 19.5.  BindingObligation

            Section 19.6.  NoViolation 

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           Section 19.7.  No Litigation

            Section 19.9.  AuthorizedSignatory

ARTICLES 20DISPUTERESOLUTION 

            Section 20.1.  SettlementBy Mutual Agreement

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            Section 20.2.  Arbitration

            Section 20.3.  EmergencyRelief

           Section 20.4.  Survival

ARTICLES 21TIME, APPROVALSAND CONSENTS

           Section 21.1.  Time

  

            Section 21.2.  Approvalsand Consents; Standards for Review

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ARTICLES 22GENERAL PROVISIONS

            Section 22.1.  ActualDamages 

           Section 22.3.  BindingEffect

            Section 22.4.  CompleteAgreement

            Section 22.5.  Confidentiality

           Section 22.6.  Counterparts

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           Section 22.7.  FurtherAssurances

            Section 22.8.  GoverningLaw 

           Section 22.9.  Headings;Table of Contents 

           Section22.10.  Interpretationand Reliance

            Section 22.11.  Notices

            Section 22.12.  Methodand Timing of Payment

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            Section 22.13.  IntellectualProperty License

            Section 22.14.  PublicAnnouncements

            Section 22.15.  Severability

            Section 22.16.  ThirdParty Beneficiaries

          Section22.17.  PurchaseProcedures

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         (a)  Inthe Offer, the Acquiring Member shall state the price that it is willing to payas the Purchase Price for the other Member's Ownership Interest.  TheConveying Member, within thirty (30) days following receipt of such notice,shall state in writing (the "Response") whether ornot it accepts such amount as the Purchase Price.  If the Members donot agree on the Purchase Price within fifteen (15) days of receipt of theResponse by the Acquiring Member, then each Member shall designate a qualifiedappraiser within fifteen (15) days from the expiration of the aforementionedfifteen (15) day period.  A qualified appraiser shall be an appraiserwith at least five (5) years experience in the appraisal of properties similarto the Facility.  Each appraiser shall be directed to determine theFair Market Value of the Conveying Member's Ownership Interest within thirty(30) days of his appointment and to notify each Member of hisdetermination.  If the lower of the two determinations is not lessthan ninety-five percent (95%) of the higher of the two determinations, then theFair Market Value shall be the average of the two determinations.  Ifthe lower of the two determinations is less than ninety-five percent (95%) ofthe higher of the two determinations, then the two appraisers shall, withinfifteen (15) days thereafter, appoint a third appraiser with similarqualifications (who shall not have performed any work for either Member withinthe five (5) year period prior to his or her appointment) and shall each furnishto such appraiser a written report of his or her respectivedetermination.  Within thirty (30) days of his appointment, the thirdappraiser shall select the Fair Market Value of one or the other of theappraisers appointed by the Members and shall notify each Member of hisdetermination, which shall be binding upon the Members.  The thirdappraiser must select one of the two appraisals and shall not have the right toestablish a different Fair Market Value determination.  Each Membershall bear the cost of the appraiser appointed by it, and they shall shareequally the cost of the third appraiser.

               (b)  Within ten (10) Business Daysof receiving the final determination of Fair Market Value as provided inparagraph (a) above, the Acquiring Member shall either (i) pay to the ConveyingMember the Purchase Price by wire transfer of immediately available funds or(ii) notify the Conveying Member that it no longer desires to purchase theOwnership Interest of the Conveying Member, in which case (1) in the event theseprocedures were initiated pursuant to Section 2.9, theprovisions of Section 2.9(d)will control as if the Members had not decided in a course of action and neitherhad exercised its right to purchase the Ownership Interest of the other; (2) inthe event these procedures were initiated pursuant to Section 14.6,the provisions of Section 14.6will control as if the Member had not exercised its right to purchase theOwnership Interest of the other; (3) in the event these procedures wereinitiated pursuant to Section 10.2.1,the last sentence of Section 10.2.1shall control as if neither Member had exercised its right to purchase theOwnership Interest of the other; and (4) in the event these procedures wereinitiated pursuant to Section 18.2(c),the Non-Defaulting Party may either rescind its Final Notice and elect tocontinue the Company or exercise its remedy under Section 18.2(b)without delivering an additional Final Notice (and in the latter event, theprovisions of Section 18.4shall be put into effect).  Concurrent with the payment of thePurchase Price, the Conveying Member shall deliver suchinstruments of transfer of title and assignment as are reasonably requested bythe Acquiring Member; provided, however, that norepresentations shall be required to be provided by the Conveying Member otherthan representations that the Conveying Member has good title to its OwnershipInterest, that the Conveying Member has the right, power and authority to conveythe Ownership Interest and that the Ownership Interest is transferred free andclear of all liens.

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|   | ACADIA POWER HOLDINGS, LLC                                                                                                                                                                                                                                                                           |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                      |
|   | By:      /s/      David M.      Eppler                                                                                |
|   | David M. EpplerManager                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                      |
|   | CALPINE ACADIA HOLDINGS,      LLC,acting by and through its sole member,CPN Acadia, Inc.                                                                                                                                                                                                   |
|   | By:      /s/      Diana      Knox                                        |
|   | Diana KnoxSenior Vice President                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                      |

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| Acadia Holding’s      Contributed Assets:                             | Third      Party Expensesincurred      through 1/31/00in acquiring such assets:   |
|-----------------------------------------------------------------------------|---------------------------------------------------------------------------------------------|
| Fee      simple title to Facility Site                                      | $1,064,011                                                                                  |   |
| Survey      dated May 5, 1999 of Facility Site                              | 4,724                                                                                       |   |
| Application      for Air Permit (and all supporting studies)                | 117,363                                                                                     |   |
| Water      testing studies and reports                                      | 205,577                                                                                     |   |
| Transmission      studies and reports                                       | 14,534                                                                                      |   |
| Easements      and/or route assessments for fuel lines and waterdischarge   | 12,787                                                                                      |   |
| Preliminary      engineering (conceptual design, site layout, budgets,etc.) | 83,805                                                                                      |   |
|                                                                        | 1,502,801                                                                                   |   |

| Calpine’s Contributed    Assets:                          | Third      Party Expensesincurred      through 1/31/00in acquiring such assets: |
|-----------------------------------------------------------------|---------------------------------------------------------------------------------|
| Scope      Book                                                 | $          1                  |   |
| Combustion      Turbine Purchase Contract                       |                                                                            |   |
| Payment 1/2/00                                                  | 3,250,000                                                                       |   |
| (Payment on 3/2/00      $3,250,000)                             |                                                                            |   |
| HRSG      Purchase Contract (9/99 through 12/99)                | 1,050,000                                                                       |   |
| Steam      Turbine Purchase Contract (Payment in 3/00 ($2.2 MM) |              0 |   |
|                                                            | 4,300,000                                                                       |   |

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|   | Union Bank of California                                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Account of:  Acadia Power Partners, LLC                                                                                                 |
|   | Account Number:  187 00333 93                                                                                                           |
|   | ABA Number:  122 000 496                                                                                                                |
|   | Attention:     Michael Thomas                                                                                            |
|   |                      (408)      995-0505 |

|   | Bank One, NA                                                   |
|--------|----------------------------------------------------------------|
|   | Account of:  Cleco Corporation                       |
|   | Account Number:  1013200                             |
|   | ABA Number:  071000013                               |
|   | Attention:  Acadia Power Holdings, LLC               |
|   |      Treasury Services (318) 484-7786 |

|   | Acadia Power Holdings, LLC         |
|--------|------------------------------------|
|   | c/o Cleco Midstream Resources, LLC |
|   | 2030 Donahue Ferry Road            |
|   | Pineville, LA 71360                |
|   | Attention: Samuel Charlton, III    |

|   | Account Name:      Calpine      Corporation                                          |
|--------|---------------------------------------------------------------------------------------------------------------|
|   | Account Number:     3160010990                                                       |
|   | Bank Name:                Union Bank of      California     |
|   |                Oakland, California |
|   | ABA      Number:       122000496                                           |
|   | Notation:          Calpine      Acadia Holdings, LLC        |

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|   | Calpine Acadia Holdings, LLC                                                   |
|--------|--------------------------------------------------------------------------------|
|   | c/o Calpine Corporation                                                        |
|   | 700 Louisiana, Suite 2700                                                      |
|   | Houston, Texas  77002                                                |
|   | Attention:     Diana Knox, Senior Vice      President |
|   |                                                                           |

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| ACTION/PROJECTAGREEMENT                                                                          | RESPONSIBILITY                            | REPRESENTATIVES                   |                       |
|-------------------------------------------------------------------------------------------------------|------------------------------------------------|----------------------------------------|----------------------------|
| Land and Easements procurement                                                                   | Acadia Holdings (lead)/Calpine (review)   | Acadia      Holdings Irene Norris | Calpine Jackie Thomas |
|                                                                                                  |                                           |                                   |                       |
| Permitting                                                                                       | Acadia Holdings (lead)/Calpine (review)        | Charlie Van Hoof                  | Patrick Blanchard     |
|                                                                                                  |                                           |                                   |                       |
| Design and Scope                                                                                 | Calpine (lead)/Acadia Holdings (review)        | Don Jeansonne                     | Chris Shugart         |
|                                                                                                  |                                           |                                   |                       |
| Combustion Turbine Purchase Contract, Steam Turbine Purchase Contract      and HRSG Purchase Contract | Calpine (lead)/Acadia Holdings (review)   | Don Jeansonne                     | Steve Ellington       |
|                                                                                                  |                                           |                                   |                       |
| Offtake/Power Marketing Agreement and Offtake Agreements                                              | Acadia Holdings (lead)/Calpine (review)        | Keith Johnson                     | Peter Blood           |
|                                                                                                  |                                           |                                   |                       |
| Fuel Supply and Transportation/Fuel Supply Agreements                                                 | Acadia Holdings (lead)/Calpine (review)        | Sam Charleton                     | Jeff Rawls            |
|                                                                                                  |                                           |                                   |                       |
| Transmission/ Interconnection and Transmission Services Agreement                                     | Acadia Holdings (lead)/Calpine (review)        | Mark MacDonald                    | Terry Dodson          |

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| Public/Government Relations   | Acadia Holdings (lead)/Calpine (review)   | Public: Mike BurnsGovernment: Kim Fontenot | Jimmy Glotfelty   |
|------------------------------------|------------------------------------------------|--------------------------------------------|------------------------|
|                               |                                           |                                       |                   |
| Pro Forma Economics           | Calpine (lead)/Acadia Holdings (review)        | Keith Crump                           | Andre Walker      |
|                               |                                           |                                       |                   |
| Finance                       | Calpine and Acadia Holdings (co-lead)          | Tom Howlin                            | Adam Dexter       |
|                               |                                           |                                       |                   |
| Property Tax Abatement        | Acadia Holdings (lead)/Calpine (review)        | Nick Lemoine                          | Jackie Thomas     |
|                               |                                           |                                       |                   |
| Louisiana PSC                 | Acadia Holdings (lead)/Calpine (review)        | Kim Fontenot                          | Jimmy Glotfelty   |
|                               |                                           |                                       |                   |
| FERC                          | Calpine (lead)/Acadia (review)                 | Bill Fontenot                         | Joe Rohen         |

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| Legal Coordination                                                      | Calpine and Acadia Holdings (co-lead)  | Tom Howlin      | Liz Miller (In House Counsel) |
|------------------------------------------------------------------------------|----------------------------------------|----------------------|------------------------------------|
|                                                                         |                                   |                 |                               |
| Accounting                                                              | Calpine(lead)/Acadia Holdings (review) | Chuck Murray    | Henry Nader                   |
|                                                                         |                                   |                 |                               |
| Insurance                                                               | Calpine(lead)/Acadia Holdings (review) | John Melancon   | Denise Straka                 |
|                                                                         |                                   |                 |                               |
| Construction Agreements (other than as covered above) and OEM      Contracts | Calpine(lead)/Acadia Holdings (review) | Don Jeansonne   | Angelo Urbani                 |

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| Acadia:                                         |           |
|------------------------------------------------------|----------------|
| Transmission      Engineering                        | $27,869   |
| Production      Engineering                          | 28,280    |
| Tax      Department                                  | 1,976     |
| Right      Of Way Department                         | 24,713    |
| Environmental      Services                          | 23,188    |
| Technical      Services                              | 5,266     |
| Project      Management                              | 59,541    |
| Energy      Marketing                                | 12,317    |
| Fuel      Procurement RFP & Pipeline Engineering | 19,583    |
| Governmental      Affairs                            | 2,154     |
|  Accounting                                     | 5,277          |
| TOTAL                                                | $210,164  |
| Calpine:                                             | $      0  |
|                                                 |           |

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               (1)  Anasset optimization log showing the daily utilization of the executed Fuel SupplyAgreements; 

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rmations, and all deal tickets. 

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