DANA AMENDMENT TO AMENDED AND RESTATED LIMITED PARTNERSHIP
                   AGREEMENT OF INDIANTOWN COGENERATION, L.P.


This  AMENDMENT  TO AMENDED AND RESTATED  LIMITED  PARTNERSHIP  AGREEMENT  (this
"Amendment"),  is made and entered into  effective as of August 10, 1998, by and
among  PALM  POWER  CORPORATION,   a  Delaware   corporation   ("Palm"),   TOYAN
ENTERPRISES,  a California  corporation  ("Toyan"),  TIFD III-Y INC., a Delaware
corporation  ("TIFD,"  and  collectively  with  Palm and  Toyan,  the  "Existing
Partners")  and  INDIANTOWN  PROJECT  INVESTMENT  PARTNERSHIP,  L.P., a Delaware
limited partnership (the "New Partner", and together with the Existing Partners,
the  "Partners").
WHEREAS,  the  Existing  Partners are parties to that certain
Amended and Restated  Limited  Partnership  Agreement  dated as of September 30,
1992 (the  "Partnership  Agreement");  and
WHEREAS,  the  Existing  Partners are
partners in a Delaware  limited  partnership  known as INDIANTOWN  COGENERATION,
L.P. (the "Partnership") formed under the Partnership Agreement for the purposes
described therein; and
WHEREAS,  Bechtel Generating Company,  Inc. ("BGCI") owns
all of the capital stock of Palm; and WHEREAS, pursuant to that certain Purchase
Agreement dated as of March 6, 1998 (the "Purchase  Agreement"),  by and between
BGCI and Cogentrix  Energy,  Inc.  ("Cogentrix"),  BGCI has agreed to sell,  and
Cogentrix  has agreed to purchase  and accept  through an indirect  wholly owned
subsidiary  that  has not yet  been  formed,  all of the  capital  stock of Palm
subject to the terms and  conditions set forth in the Purchase  Agreement  (such
sale,  the "Proposed  Cogentrix  Sale");  and
WHEREAS,  in  connection  with the
Proposed  Cogentrix Sale,  Palm, Toyan and TIFD  contemporaneously  herewith are
entering into that certain  Cogentrix  Amendment to Amended and Restated Limited
Partnership  Agreement of Indiantown  Cogeneration,  L.P., dated as of even date
herewith (the "Cogentrix Amendment"), certain amendatory paragraphs of which are
effective only as of the time the Proposed Cogentrix Sale shall have closed; and
WHEREAS,  Toyan intends to create a new Delaware  corporation  as a wholly-owned
subsidiary  of Toyan  (the  "New  Subsidiary")  and to  transfer  (as an  equity
contribution)  a ten  percent  (10%)  Interest  in  the  Partnership  (the  "New
Subsidiary  Interest")  to the New  Subsidiary  (the  "Toyan  to New  Subsidiary
Transfer");  and
WHEREAS,  Toyan  intends  to, and intends to cause New  Subsidiary  to, form New
Partner in which Toyan would hold an approximately  forty-nine and eight hundred
seventy-five thousandths percent (49.875 %) general partner interest and the New
Subsidiary  would  hold  an  approximately  fifty  and one  hundred  twenty-five
thousandths percent (50.125%) limited partner interest;  and
WHEREAS,  Toyan then  intends  to  transfer  a nine and  ninety-five  hundredths
percent  (9.95%)  Interest in the  Partnership and its BOC Partner Rights to the
New Partner  (the  "Toyan to New Partner  Transfer");  and  WHEREAS,  Toyan then
intends to cause the New Subsidiary to transfer the New  Subsidiary  Interest to
the New Partner (the "New  Subsidiary  to New Partner  Transfer");  and

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WHEREAS,  Toyan then intends to cause the New Subsidiary to sell its interest in
the New Partner to DCC Project Finance Twelve,  Inc. ("DCC XII"), a wholly-owned
subsidiary of Dana Commercial Credit Corporation (the "New Subsidiary to DCC XII
Transfer," and collectively with the Toyan to New Partner Transfer, the Toyan to
New  Subsidiary  Transfer and the New  Subsidiary to New Partner  Transfer,  the
"Proposed Transfers"); and WHEREAS, the Partners desire to amend the Partnership
Agreement in certain  respects  and take other  actions in  connection  with the
Proposed Transfers as of the time when the Proposed Transfers shall have closed,
and without  regard to whether any portion of the  Cogentrix  Amendment  is then
effective or ever will become  effective (it being the Partners'  intention that
if any portion of the Cogentrix  Amendment and the  amendments set forth in this
Amendment both become effective,  then such portions of the Cogentrix  Amendment
and the amendments set forth in this Amendment all shall be and remain effective
concurrently)  (such date, the "Effective Date"); NOW THEREFORE in consideration
of the premises and of the mutual covenants and agreements  herein, and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged,  the  Partners  intending  to be legally  bound,  hereby  agree as
follows:

Admission  as  Partner.  As of the  Effective  Date,  the New  Partner  shall be
admitted  as a general  partner in the  Partnership  and the New  Partner  shall
succeed to thirty-nine  and  nine-tenths  percent (39.9%) of the capital account
balance,  and to  thirty-nine  and  nine-tenths  percent  (39.9%) of the Sharing
Percentage,  of Toyan as of the time  when the  Proposed  Transfers  shall  have
occurred.

Designation  of  Board  of  Control  Authority.  As of the  Effective  Date,  in
accordance  with  Section  7.1(c) of the  Partnership  Agreement,  Toyan  hereby
designates  that New Partner shall succeed to all of Toyan's BOC Partner  Rights
at the  time  when  the  Proposed  Transfers  shall  have  occurred  and the New
Partner's  initial  members of the Board of Control under Section  6.1(b) of the
Partnership Agreement shall be P. Chrisman Iribe and M. Richard Smith.

Affiliate  Status.  As of the Effective Date, the New Partner shall be deemed to
be an affiliate of Toyan,  including  for the purposes of Section  6.9(c) of the
Partnership Agreement.

Amendments  to  the  Partnership  Agreement.  As  of  the  Effective  Date,  the
Partnership Agreement shall be amended as follows:

     a.  The  definition  of  BOC  Partner  set  forth  in  Section  1.7  of the
Partnership  Agreement shall be amended and restated in its entirety as follows:

               ""BOC  Partner"  means  (i)  each of Palm,  TIFD  and  Indiantown
               Project Investment Partnership,  in each case for so long as such
               Partner retains its BOC Partner Rights, (ii) any successor to the
               Interest  of  Palm,   TIFD  or  Indiantown   Project   Investment
               Partnership to whom BOC Partner Rights are  transferred  pursuant
               to Section 7.1(c), or (iii) any other General Partner to whom BOC
               Partner Rights are granted by the Board of Control."

     b. The  definition  of General  Partners  set forth in  Section  1.7 of the
Partnership  Agreement shall be amended and restated in its entirety as follows:

               ""General  Partners" means Palm and Indiantown Project Investment
               Partnership  and/or any Person who, at the time of the  reference
               thereto,  has been admitted to the  Partnership as a successor to
               the duties or interest of either such Person, or as a replacement
               or additional  general partner as provided herein,  and any other
               Person  admitted to the  Partnership as a general  partner in any
               such Person's capacity as a

<PAGE>


               general  partner,  in any case,  so long as such  Person  has not
               ceased to be a general partner hereunder."

     c. The  definition  of Limited  Partners  set forth in  Section  1.7 of the
Partnership  Agreement shall be amended and restated in its entirety as follows:

               ""Limited  Partners" means TIFD,  Toyan and/or any Person who, at
               the  time  of  reference  thereto,   has  been  admitted  to  the
               Partnership as a limited  partner in accordance with the terms of
               this  Agreement,  in such person's  capacity as a limited partner
               for so long as such Person has not ceased to be a Limited Partner
               hereunder."

     d. Section 1.7 of the  Partnership  Agreement is hereby  amended to include
the  following  term:

               ""Indiantown  Project  Investment  Partnership"  means Indiantown
               Project   Investment   Partnership,   L.P.,  a  Delaware  limited
               partnership."

     e. Section 11.4 of the  Partnership  Agreement  shall be amended to include
the notice  address of New Partner as  follows:

                    Indiantown   Project   Investment   Partnership
                    c/o   U.S. Generating  Company
                    7500 Old  Georgetown  Road,  13th Floor
                    Bethesda, MD 20814
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     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.

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

     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.

     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.

     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.

     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.

     Defined Terms.  Capitalized terms used herein without definition shall have
the meanings specified in the Partnership Agreement.

     Effectiveness.  Subject to  paragraphs  1, 2, 3, and 4 with  respect to the
date on which certain  amendatory  provisions set forth herein became effective,
the Amendment  shall be effective as among the Existing  Partners as of the date
first above  written and shall be effective  as among the Existing  Partners and
the New Partner as of the date this Amendment is executed by the New Partner.

IN WITNESS  WHEREOF,  the parties have caused this Amendment to be duly executed
and delivered.

                                             TOYAN ENTERPRISES, a California
                                             corporation



Dated:  ___________________                   By:  ____________________________
                                              Name: ___________________________
                                              Title: __________________________


                                              TIFD III-Y INC., a Delaware
                                              corporation




Dated:  ___________________                   By:______________________________
<PAGE>

                                              Name: ___________________________
                                              Title: __________________________


                                              PALM POWER CORPORATION, a Delaware
                                              corporation



Dated:  ___________________                   By:______________________________
                                              Name: ___________________________
                                              Title: __________________________


                                              INDIANTOWN PROJECT INVESTMENT
                                              PARTNERSHIP, L.P., a Delaware
                                              limited partnership

Dated:  ___________________                   By:  Toyan Enterprises, a
                                                   California corporation,
                                                   its general partner


                                              By:  ____________________________
                                              Name: ___________________________
                                              Title: __________________________