THIRD AMENDMENT TO THE


              AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OFINDIANTOWN COGENERATION, L.P.

THIS THIRD  AMENDMENT  TO THE  AMENDED  AND  RESTATED  LIMITED  PARTNERSHIP
AGREEMENT OF INDIANTOWN COGENERATION,  L.P. (this "Third  Amendment")
dated  as  of  the  4th  day  of  June,   1999  by  and  among   PALM   POWER
CORPORATION/,   a  Delaware  corporation  ("Palm"),   TOYAN
ENTERPRISES, a California corporation ("Toyan"), INDIANTOWN
PROJECT  INVESTMENT  PARTNERSHIP,   L.P.,  a  Delaware  limited  partnership
("IPIP"),   TIFD  III-Y   INC.,   a  Delaware   corporation
("TIFD")  and THALEIA,  LLC,  a Delaware limited  liability
company  ("Thaleia"  and together with Palm, IPIP, Toyan and TIFD,
the "Partners").

STATEMENT OF PURPOSE

WHEREAS,  Partners are parties to that certain  Amended and Restated
     Limited  Partnership  Agreement  of  Indiantown  Cogeneration,   L.P.  (the
"Partnership")  dated  September 30, 1992 (as amended by the First
Amendment thereto, dated as of November 1, 1994, the Cogentrix Amendment thereto
dated August 10, 1998 and the Dana Amendment  thereto dated August 10, 1998, the
"Agreement").

         
     WHEREAS,  TIFD is the owner of a 40% limited  partner  interest (the
"Partnership   Interest")   in  the  Partnership,   which  limited
partnership interest includes BOC Partner Rights.

         
     WHEREAS,  pursuant to that certain  Purchase  Agreement  dated as of
June  3,  1999  by  and   between   Thaleia   and  TIFD   (the   "Purchase
Agreement"), TIFD has agreed to sell, and Thaleia has agreed to purchase
the  Partnership   Interest,   including  the  BOC  Partner  Rights,   in  three
installments  as  follows:  at the First  Closing  (as  defined in the  Purchase
Agreement),  Thaleia shall purchase a 19.9% interest in the Partnership,  at the
Second Closing (as defined in the Purchase Agreement),  Thaleia shall purchase a
20.0%  interest in the  Partnership  (including  the BOC Partner  Rights held by
TIFD), and at the Third Closing (as defined in the Purchase Agreement),  Thaleia
shall purchase a 0.1% interest in the Partnership,  in each case, subject to the
terms and  conditions  set  forth in the  Purchase  Agreement  (such  sale,  the
"Proposed Sale").

         
     WHEREAS,  Thaleia is a wholly-owned indirect subsidiary of Cogentrix
Energy, Inc. and, as such,  qualifies as a PGE  Corp.-Cogentrix  Affiliate under
the Agreement.

         
     WHEREAS,  the  Partners  desire to amend the  Agreement  in  certain
respects in connection with the Proposed Sale.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency  of which are hereby  acknowledged,  the  Partners  intending  to be
legally bound, hereby agree as follows:
         
     1.     Certain  Terms.  All capitalized  terms
used herein without  definition shall have the meanings  assigned thereto in the
Agreement.

         
     2.     Effective Date. This Agreement shall be
effective as of the date hereof except for the  provisions set forth in Sections
3(a),  (c), (d), (e), (f), (g), (h) and (j), which shall become  effective as of
the Second Closing (as defined in the Purchase Agreement).

         
     3.    Amendments to Agreement.

         

(a)   The definition of "BOC Partner" in Section 1.7 of the
Agreement is hereby amended by deleting the name "TIFD" in  subsections  (i) and
(ii) thereof and adding Thaleia in lieu thereof.

         
(b)   Section 1.7 of the Agreement is hereby  amended to
include the following  term:  "Thaleia"  means  Thaleia LLC, a Delaware  limited
liability company.

         
(c)   Section 6.1(b) of the Agreement is hereby amended by
deleting  the  phrase  "TIFD  Representatives:  Robert E.  Maxwell  and  Michael
Tzougrakis" therefrom and adding the phrase "Thaleia Representatives:  Thomas J.
Bonner and Thomas F. Schwartz" in lieu thereof.

        
(d)   Section 6.9(a) of the Agreement is hereby amended by
deleting  the  semicolon at the end of  subparagraph  (i) thereof and adding the
word "and" in lieu thereof.

         
(e)   Section  6.9(a) of the  Agreement is hereby  further
amended by deleting the phrase "; and (iii) the president of GE Capital Services
Structured Finance Group, Inc." therefrom and adding a period in lieu thereof.

          
(f)   Section 6.9(c) of the Agreement is hereby deleted in
its entirety.

         
(g)   Section 6.10(a) of the Agreement is hereby amended by
deleting  the name  "TIFD" in the third and  eighth  lines  thereof  and  adding
"Thaleia" in lieu thereof.

         
(h)   Section 6.10(b) of the Agreement is hereby amended by
deleting the name "TIFD" in the third line thereof and adding  "Thaleia" in lieu
thereof.

         
(i)   Section 11.4 of the  Agreement is hereby  amended by
adding the following after the notice address of TIFD therein:

"Thaleia         
          
          
                             Thaleia, LLC
          
          
          
          
                             c/o Cogentrix Energy, Inc.
          
          
          
          
                             9405 Arrowpoint Boulevard
          
          
          
          
                             Charlotte, North Carolina 28273
          
          
          
          
                             Attn:  Senior Vice President-Finance and Treasurer
          
        with a copy to:         

                             Cogentrix Energy, Inc.
          
          
          
          
                             9405 Arrowpoint Boulevard
          
          
          
          
                             Charlotte, North Carolina 28273
          
          
          
          
                             Attn:  General Counsel"


          

     (j)     Section 11.4 of the  Agreement is hereby  amended by
deleting the notice address of TIFD therefrom.

               

     4.   Admission  and  Withdrawal  of  Partners.
Effective at the time the First Closing shall have been consummated,  Thaleia is
admitted as a Partner and agrees to be bound by the terms and  conditions of the
Agreement.  Effective at the time the Third Closing shall have been consummated,
TIFD withdraws as a Partner.
               

     5.   Board  of Control  Consent.  The Board of
Control of the Partnership  shall be deemed to have consented to the sale of the
Partnership  Interest to Thaleia and the other transactions  contemplated by the
Purchase Agreement.

               

     6.   Governing  Law.  This Amendment  shall be
governed by and construed in accordance  with the laws of the State of Delaware,
without regard to any other applicable conflict of law provisions.

               

     7.     Amendments.  This  Amendment may not be
amended,  altered,  modified or revoked without the prior written consent of all
parties hereto.


               

     8.    Headings. All headings in this Amendment
are  included  only for  convenience  and ease of  reference  and  shall  not be
considered   in  the   construction   and   interpretation   of  any   provision
hereof.

               

     9.    Further Obligations. Each of the parties
hereto agrees to execute all other agreements,  instruments and documents and to
perform all further acts which may be necessary to consummate  the  transactions
contemplated herein.


               

     10.     Binding  Nature  and  Benefit.   This
Amendment  shall be binding  upon and inure to the benefit of each party  hereto
and their respective successors and assignors.

               

     11.   Counterparts.  This  Amendment  may be
executed in multiple counterparts, each of which shall be deemed an original for
all  purposes,  but all of  which  together  shall  constitute  one and the same
instrument.




               

        IN WITNESS WHEREOF,  the parties hereto have caused this Third Amendment
     to be duly executed by their duly authorized  officers,  all as of the date
first above written.

`PALM:
                                       PALM POWER CORPORATION


                                       By:________________________________
                                          Name:
                                          Title:

                           TOYAN:

                                       TOYAN ENTERPRISES


                                       By:________________________________
                                          Name:
                                          Title:

                           TIFD:

                                       TIFD III-Y INC.



                                       By:________________________________
                                          Name:
                                          Title:

                           THALEIA:

                                       THALEIA, LLC

                                       By:________________________________
                                          Name:
                                          Title:


                           INDIANTOWN PROJECT INVESTMENT
                              PARTNERSHIP, L.P.:

                                       By:________________________________
                                          Name:
                                          Title:`