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


This AMENDMENT TO AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT dated as of
August 10, 1998 (this  "Amendment"),  is made and entered into by and among PALM
POWER  CORPORATION,  a  Delaware  corporation  ("Palm"),  TOYAN  ENTERPRISES,  a
California  corporation  ("Toyan"),  and TIFD III-Y INC., a Delaware corporation
("TIFD," and collectively  with Palm and Toyan, the  "Partners").

WHEREAS,  the Partners are parties to that certain Amended and Restated  Limited
Partnership   Agreement  dated  as  of  September  30,  1992  (the  "Partnership
Agreement"); and

WHEREAS,  the 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 by and between BGCI and Cogentrix Energy, Inc.  ("Cogentrix"),  as
amended (the "Purchase  Agreement"),  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
Sale"); and

WHEREAS, Toyan intends,  through a series of related transfers,  to transfer its
BOC Partner Rights and a portion of its Interest in the  Partnership  (together,
the "DCC XII Transfer") to a new partnership (the "Indiantown Project Investment
Partnership") that will initially have Toyan as its sole general partner and DCC
Project  Finance  Twelve,  Inc., a  wholly-owned  subsidiary of Dana  Commercial
Credit Corporation, as its sole limited partner; and

WHEREAS, in connection with the DCC XII Transfer, the Partners may enter into an
amendment to the Partnership  Agreement (the "DCC XII  Amendment"),  portions of
which shall be  effective  only upon the  formation  of the  Indiantown  Project
Investment  Partnership,  the execution of the DCC XII Amendment and the closing
of the DCC XII  Transfer,  all as and to the  extent  set  forth  in the DCC XII
Amendment;  and

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

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:

Amendments  to the  Partnership  Agreement.  Effective  as of the time  when the
Proposed  Sale shall have closed,  and without  regard to whether any portion of
the DCC XII  Amendment  is then  effective  or ever will become  effective,  the
Partnership Agreement shall be amended as follows: Section 1.7 is hereby amended
to include the following terms:

               ""PG&E   Corp."   means  (i)  PG&E   Corporation,   a  California
          corporation,  (ii) any corporation that succeeds to substantially  all
          the assets and  liabilities of PG&E  Corporation  and (iii) any Person
          who directly or indirectly  owns at least 80% of the voting stock of a
          corporation described in clause (i) or (ii).""

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               ""Cogentrix"  means (i) Cogentrix Energy,  Inc., a North Carolina
          corporation,  (ii) any corporation that succeeds to substantially  all
          the assets and  liabilities  of Cogentrix  Energy,  Inc. and (iii) any
          Person  who  directly  or  indirectly  owns at least 80% of the voting
          stock of a  corporation  described  in clause  (i) or  (ii).""

               ""PG&E  Corp.-Cogentrix  Affiliate"  means (i) any partnership in
          which  Persons  directly  or  indirectly  wholly  owned by PG&E Corp.,
          Cogentrix  or  both  are  general   partners  with  the   unrestricted
          collective  voting  power  sufficient  in and of itself to direct  the
          management  and  policies of such  partnership  (other than  specified
          matters for which the  approval of other  partners  may be  required),
          (ii) any  corporation  more than 50% of the  voting  stock of which is
          owned  collectively or individually by Persons  directly or indirectly
          wholly owned by PG&E Corp.,  Cogentrix or both, which Persons have the
          unrestricted  collective  voting power  sufficient in and of itself to
          direct the  management  and policies of such  corporation  (other than
          specified matters for which the approval of other  shareholders may be
          required),  or (iii) any Person directly or indirectly wholly owned by
          a Person described in clause (i) or (ii)."

Section  6.1(b)  shall be amended to delete the names Joseph P. Kearney and John
R. Cooper,  and to reflect that Palm's  representatives  on the Board of Control
shall be Thomas J. Bonner and Thomas F. Schwartz.

Section 6.9(a) shall be amended and restated in its entirety as follows:

               "6.9 Dispute Resolution.  (a) The "Dispute Resolution  Committee"
          shall consist of the persons  holding the following  offices:  (i) the
          president of Cogentrix;  (ii) the  president of U.S. Gen.  Power Group
          LLC; and (iii) the president of GE Capital Services Structured Finance
          Group, Inc. Any entity represented on the Dispute Resolution Committee
          may substitute a person having authority  greater than or equal to the
          authority  of the  persons  holding  the  offices  designated  in this
          Section  6.9(a).  Any member of the Dispute  Resolution  Committee may
          bring one or more  colleagues  knowledgeable  about the Project to any
          meeting of the Dispute Resolution Committee, but no such colleague may
          serve or vote as a member of the Dispute  Resolution  Committee unless
          such  colleague's  authority is greater than or equal to the authority
          of the person holding the office designated in this Section 6.9(a)."

Section 7.1(a)(1) shall be amended and restated in its entirety as follows:

               "(1) in whole or in part,  to (A) a  corporation  at least 80% of
          the voting stock of which is owned by such Partner,  (B) a corporation
          which owns at least 80% of the  voting  stock of such  Partner,  (C) a
          corporation  at  least  80% of the  voting  stock  of  which  is owned
          directly or indirectly by Persons which  collectively own, directly or
          indirectly, 80% of the voting stock of such Partner, (D) a corporation
          into which such Partner shall merge or with which it shall consolidate
          or to which it shall sell all or substantially  all of its assets,  if
          after such merger,  consolidation  or sale, at least 80% of the voting
          stock of such  continuing  corporation is

<PAGE>

          owned directly or indirectly by Persons which held (immediately  prior
          to such  transaction),  directly  or  indirectly,  at least 80% of the
          voting stock of such Partner or (E) a PG&E Corp.-Cogentrix Affiliate."

Section 7.1(a)(3) shall be amended and restated in its entirety as follows:

               "(3) in whole or in part to a limited  partnership  in which such
          Partner, a corporation having a relationship to such Partner described
          in Section 7.1 (a) (2) above or a PG&E  Corp.-Cogentrix  Affiliate  is
          the  sole  general  partner;  but  only  if  (A)  the  sale  or  other
          disposition of limited partnership  interests and admission of limited
          partners in such partnership  prior to or at the time of such Transfer
          shall have complied with the conditions and  restrictions set forth in
          Section 9.1 (whether or not such partnership was a Partner at the time
          of  such  disposition),   (B)  the  partnership   agreement  for  such
          partnership  complies with Section 9.2 and (C) the limited partners in
          such  partnership  do  not  have  the  right  to  participate  in  the
          appointment or removal of, or in the formulation of instructions given
          to,  such  partnership's  representatives,  if any,  on the  Board  of
          Control."

Section 8.3(b)(1) shall be amended and restated in its entirety as follows:

               "(1)  Assignments  by Limited  Partners.  A Limited  Partner  may
          Assign all or a portion of its Limited  Partner  Interest  only (x) to
          (A) a  corporation  at least 80% of the voting stock of which is owned
          by the Limited Partner,  (B) a corporation  which owns at least 80% of
          the voting stock of such Limited  Partner,  (C) a corporation at least
          80%  of  the  voting  stock  of  which  is  owned  by  Persons   which
          collectively own,  directly or indirectly,  at least 80% of the voting
          stock of such  Limited  Partner,  (D) a  corporation  into  which such
          Limited  Partner shall merge or with which it shall  consolidate or to
          which it shall sell all or substantially  all of its assets,  if after
          such merger,  consolidation  or sale, at least 80% of the voting stock
          of such  continuing  corporation  is owned  directly or  indirectly by
          Persons  which   collectively   owned   (immediately   prior  to  such
          transaction), directly or indirectly, at least 80% of the voting stock
          of such Limited Partner, or (E) a PG&E Corp.-Cogentrix  Affiliate,  or
          (y) to a transferee  whose  identity has been approved by the Board of
          Control, which approval shall not be unreasonably withheld;  provided,
          however,  that such approval may be in the form of a list of permitted
          transferees  pre-approved  from time to time by action of the Board of
          Control, such list to be kept with the records of the Partnership; and
          in each case only if:"

Section 9.1(b) shall be amended and restated in its entirety as follows:

               "(b) A Second  Tier  Owner may  Transfer  all or a portion of its
          Second Tier Interest only to (x) (1) a corporation at least 80% of the
          voting  stock  of  which is owned  by the  Second  Tier  Owner,  (2) a
          corporation which owns at least 80% of the voting stock of such Second
          Tier  Owner,  (3) a  corporation  at least 80% of the voting  stock of
          which  is  owned  by  Persons  which  collectively  own,  directly  or
          indirectly,  at least  80% of the  voting  stock of such  Second  Tier
          Owner, (4) a corporation

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          into which such  Second  Tier owner shall merge or with which it shall
          consolidate or to which it shall sell all or substantially  all of its
          assets,  if after such merger,  consolidation or sale, at least 80% of
          the voting stock of such  continuing  corporation is owned directly or
          indirectly by Persons which  collectively  owned (immediately prior to
          such transaction),  directly or indirectly, at least 80% of the voting
          stock  of  such  Second  Tier  Owner,  or (5) a  PG&E  Corp.-Cogentrix
          Affiliate,  or (y) any Person  whose  identity  has been  approved  in
          advance  by  the  Board  of  Control,  which  approval  shall  not  be
          unreasonably withheld; provided, however, that such approval may be in
          the form of a list of permitted transferees  pre-approved from time to
          time by action of the Board of Control,  such list to be kept with the
          records of the Partnership; and in each case only if,"

Section  11.4 shall be amended to delete the notice  address of U.S.  Generating
Company and to reflect that copies of notices sent to Palm shall be sent to:

                      Palm Power Corporation
                      c/o Cogentrix Energy, Inc.
                      9405 Arrowpoint Blvd.
                      Charlotte, NC  28273
                      Attn:  Senior Vice President - Finance and Treasurer

with a copy to:

                      Cogentrix Energy, Inc.
                      9405 Arrowpoint Blvd.
                      Charlotte, NC  28273
                      Attn:  General Counsel

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     Board of Control Consent.  The Board of Control of the Partnership shall be
deemed to have  consented to the sale of the capital  stock of Palm to Buyer and
the other transactions contemplated by the Purchase Agreement.

     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.


IN WITNESS  WHEREOF,  the parties have caused this Amendment to be duly executed
and delivered as of the day and year first above written.

                                         TOYAN ENTERPRISES, a California
                                         corporation



                                         By:    _______________________________
                                         Name:  _______________________________
                                         Title: _______________________________


                                         TIFD III-Y INC., a Delaware corporation



                                         By:    _______________________________
                                         Name:  _______________________________
                                         Title: _______________________________

<PAGE>


                                            PALM POWER CORPORATION, a Delaware
                                            corporation



                                         By:    _______________________________
                                         Name:  _______________________________
                                         Title: _______________________________