Document:

PARTICIPATION AGREEMENT

THIS  PARTICIPATION AGREEMENT ("Agreement") is made and entered into as of March
31,  2000, by and among Adair Yemen Exploration Limited, a company organized and
existing  under  the  laws  of  the  Bahamas  ("Adair"),  Saba Yemen Oil Company
Limited,  a  limited  liability company organized and existing under the laws of
the  British  Virgin  Islands  ("Saba"),  and Occidental Yemen Sabatain, Inc., a
company  organized  and existing under the laws of Nevis ("Occidental"). (Adair,
Saba, and Occidental are hereinafter collectively referred to as the "Parties").

                             W I T N E S S E T H:

WHEREAS,  concurrently herewith the Parties, The Yemen Company for Investment in
Oil  and Minerals,  a subsidiary of Yemen Oil and Gas Company ("YICOM"), and the
Ministry of  Oil and Mineral Resources  (the  "MOMR")  of the Republic of Yemen,
are entering into a Production Sharing Contract for the Exploration, Development
and Production of Petroleum (as  the  same may be  amended or modified from time
to   time,  the  "PSA"),  covering  Block  20  in  Sabatain  Area,  Marib-Shabwa
Governorates  in  Yemen;  and

WHEREAS,  concurrently  herewith the Parties and YICOM are entering into a Joint
Operating  Agreement  (as  the same may be amended from time to time, the "YICOM
JOA");  and

WHEREAS, concurrently herewith, the Parties are entering into a Joint Management
Agreement  (as  the  same  may  be  amended  from  time to time, the "JMA"); and

WHEREAS,  the  Parties desire to enter into this Agreement in order to set forth
certain  additional  agreements  among them in respect of the PSA, the YICOM JOA
and  the  JMA.

NOW,  THEREFORE, in consideration of the covenants and premises set forth below,
it  is  hereby  mutually  agreed  as  follows:

ARTICLE  1-  DEFINITIONS
------------------------

1.1     "Effective Date" means the date of issuance of the law ratifying the PSA
        as  provided  in  Article  33  of  the  PSA.

1.2     "Management  Committee"  means  at  any  time  the committee established
        pursuant  to  Article  5.1  of  the  JMA.

1.3     "Operations"  means  any operations conducted by Operator under the JMA,
        whether  as  Joint  Operations  or  Sole Risk Operations, as defined  in
        the JMA.

1.4     "Participating Interest" means the undivided percentage interest of each
        Party  in  the  rights and obligations, privileges, and  liabilities  in
        And  under the  JMA,  as  set  forth  in  Article  3.1(a)  of  the  JMA.

<PAGE>
1.5     "Third Party" or "Third Parties" shall mean any individual or entity, or
        any  individuals  or  entities,  other  than  any  of  the  Parties.

All  other  terms used in this Agreement that are defined in the English version
of  the  PSA  shall have the same meaning as expressed in the English version of
the  PSA,  unless  otherwise  defined  herein.

ARTICLE  2-  PAYMENT  TO  ADAIR
-------------------------------

Within  ten  (10)  days of the Effective Date, Occidental shall pay to Adair the
amount  of  Seven  Hundred  and  Fifty  Thousand  United  States  Dollars  (U.S.
$750,000).

ARTICLE  3-  OCCIDENTAL  FUNDING  OBLIGATIONS
----------------------------------------------

Subject  to  Management  Committee  approval of the Work Programs and Budgets in
respect  of  the  First  Exploration  Period,  Occidental shall pay for its sole
account one hundred percent (100%) of the costs to acquire and process up to two
hundred  (200)  square  kilometers  of  3D  seismic;  provided,  'however,  that
Occidental  shall  not be obliged to expend more than Four Million United States
Dollars  (U.S. $4,000,000) (the "Cap") for such purpose. If the costs in respect
of  such  3D  seismic  exceed the Cap, the Parties shall pay any and all of such
excess  in  proportion  to  their respective Participating Interests. Occidental
shall  have  the  first  right  to  all  Cost  Oil in respect of the full amount
expended  by  it  on such 3D seismic up to the Cap, and, subject to Article 4 of
this  Agreement,  the  concurrent  right  to all Cost Oil in respect of the full
amount  expended  by  it in excess of the Cap in proportion to its Participating
Interest.  For  clarity,  except as provided in this Article 3, the liability of
the  Parties  under  the  PSA, the YICOM JOA and the JMA in respect of Petroleum
Operations  shall  be several and not joint; and each Party shall be responsible
only  for  a  share  of  the  obligations,  costs  and  expenses  of  Operations
proportionate  to  its  respective  Participating  Interest.

ARTICLE  4-  COST  OIL  ASSIGNMENT
----------------------------------

Adair  hereby  assigns,  transfers,  and conveys to Occidental all of its right,
title, and interest to receive the first One Million United States Dollars (U.S.
$1,000,000)  of  Cost  Oil to which Adair is entitled under the JMA due to costs
and  expenditures  actually  incurred  and  made  by  Adair  thereunder.

ARTICLE  5-  LETTERS  OF  CREDIT
--------------------------------

5.1        Support  for  the  Signature  Bonus

           5.1.1    Within two(2)weeks after the signing of the PSA, Adair shall
                    provide or cause to be provided  to the MOMR an  irrevocable
                    letter  of credit in the  amount  of Four  Hundred  Thousand
                    Dollars   (U.S.$400,000)   and  in   accordance   with   the
                    requirements of Article 9.2.1 of the PSA.

<PAGE>
          5.1.2     Within ten (10) days of signing  the PSA,  Occidental  shall
                    either (a)  transfer  Two  Hundred  Thousand  Dollars  (U.S.
                    $200,000)  to an account of Adair  designated  in writing by
                    Adair  not less than  three (3) days  prior to the date such
                    transfer  is  required to be made or (b) provide to Adair or
                    its designee an irrevocable letter of credit in such amount.

          5.1.3     Within ten (10) days of the  signing of the PSA,  Saba shall
                    either (a) transfer Eighty Thousand  Dollars (U.S.  $80,000)
                    to an  account of Adair  designated  in writing by Adair not
                    less than three (3) days prior to the date such  transfer is
                    required to be made or (b) provide to Adair or its  designee
                    an irrevocable letter of credit in such amount.

          5.1.4     Any amounts  transferred by Occidental or Saba under Section
                    5.1.2 or 5.1.3  shall  be  deposited  and  shall  remain  on
                    deposit  in  an  account  of  Adair  and  shall  remain  the
                    respective  property of  Occidental  or Saba or both, as the
                    case may be,  unless  and  until  the PSA  shall  have  been
                    ratified by the Parliament,  as provided in Article 9.2.1 of
                    the PSA  ("Ratification").  Until Ratification,  Adair shall
                    hold such funds in trust and escrow for  Occidental or Saba,
                    as the case may be,  it being  agreed  that if  Ratification
                    does not occur on or before May 30, 2001, Adair shall return
                    and transfer  back to Occidental or Saba or both of them any
                    amounts originally transferred, together with any amounts of
                    interest actually earned on such funds.  Upon  Ratification,
                    any funds  transferred to Adair by Occidental and Saba under
                    this Section 5.1, shall be and become the property of Adair,
                    provided  that  the  expenditure  of  such  funds  shall  be
                    considered  to be a charge  to the Joint  Account  under the
                    JMA.

          5.1.5     Any letters of credit  provided by  Occidental or Saba under
                    Section  5.1.2 or 5.1.3 shall be payable upon  Ratification,
                    provided that the respective amount paid thereunder shall be
                    considered  to be a charge  to the Joint  Account  under the
                    JMA.

5.2       Support  for  the  Minimum  Work  Obligation

          5.2.1     Within thirty (30) Working Days of the Effective Date of the
                    PSA, Occidental shall provide or cause to be provided to the
                    MOMIR an irrevocable letter of credit in the amount of Eight
                    Million Three Hundred Thousand Dollars (U.S. $8,300,000) and
                    in  accordance  with the  requirements  of Article 2.1.4 and
                    Annex D of the PSA.

          5.2.2     Within thirty (30) Working Days of the Effective Date of the
                    PSA,  Adair  shall  provide  or  cause  to  be  provided  to
                    Occidental  an  irrevocable  letter  of  credit  payable  to
                    Occidental  in the amount of One Million Two Hundred  Ninety
                    Thousand  Dollars (U.S.  $1,290,000)  and in accordance with
                    the same  requirements  of Article  2.1.4 and Annex D of the
                    PSA  applicable  to a the letter of credit to be provided by
                    Occidental pursuant to Section 5.2 of this Agreement.

<PAGE>
          5.2.3     Within thirty (30) Working Days of the Effective Date of the
                    PSA,   Saba  shall  provide  or  cause  to  be  provided  to
                    Occidental  an  irrevocable  letter  of  credit  payable  to
                    Occidental  in the amount of Eight  Hundred  Sixty  Thousand
                    Dollars  (U.S.  $860,000)  and in  accordance  with the same
                    requirements  of  Article  2.1.4  and  Annex  D of  the  PSA
                    applicable  to  the  letter  of  credit  to be  provided  by
                    Occidental pursuant to Section 5.2 of this Agreement.

          5.2.4     If a letter of credit is required under Article 2.1.4 of the
                    PSA and by the  MOMIR  for the  Second  Exploration  Period,
                    Occidental  will  provide  such  second  letter of credit or
                    similar  credit  support  under the PSA,  and Adair and Saba
                    each  will  also  provide  a  second  letter  of  credit  to
                    Occidental  in an  amount  determined  by  multiplying  such
                    Party's  Percentage  Interest  by the amount of such  second
                    letter of credit provided by Occidental.

5.3       The reasonable and customary bank fees and charges paid by the Parties
          for any letters of credit  delivered  pursuant to this Section 5 shall
          be charged to the Joint Account under the JMA.

5.4       If any Party  fails to provide  any letter of credit  required by this
          Section 5 within the specified time, such Party shall be considered to
          be in default  under  Article  IX of the JMA to the same  extent as if
          such failure was a failure to make a payment under the JMA, such Party
          shall be  considered a Defaulting  Party under  Article IX of the JMA,
          and the non-Defaulting  Parties shall be entitled to all of the rights
          and  remedies of a  non-Defaulting  Party under such Article IX unless
          and until such Defaulting Party shall cure such default.

ARTICLE  6-  MISCELLANEOUS
--------------------------

6.1       The  Parties  agree  to keep  the  terms  of this  Agreement  strictly
          confidential  and shall not  disclose  such  information  to any Third
          Party, other than an Affiliated Company, or its attorneys, without the
          prior consent of the other  Parties,  which shall not be  unreasonably
          withheld.  Nothing  in this  Article  6  shall  prevent  a Party  from
          disclosing the contents of this Agreement to:

          6.1.1     Any contractor, consultant, financial or banking institution
                    in connection with this Agreement, provided such Third Party
                    executes an agreement to keep this Agreement confidential;

          6.1.2     An  Affiliated  Company,  provided such  Affiliated  Company
                    shall  be   committed   to   treat   such   information   as
                    confidential;

<PAGE>
          6.1.3     The extent  that any Party is legally  required  to disclose
                    any information  contained in this Agreement in an annual or
                    periodic report to shareholders or governmental bodies;

          6.1.4     The extent  required to make an announcement or statement to
                    comply with a legal  obligation  in Yemen or  elsewhere,  or
                    with the applicable  requirements of a government  agency or
                    other regulatory  body, or an established  stock exchange on
                    which such Party or an Affiliated  Company has its shares or
                    securities listed or proposed to be listed.

6.2       This  Agreement  shall be governed by and  construed  and  enforced in
          accordance  with the laws of  England,  except  for any  choice of law
          rules which would cause the laws of another jurisdiction to apply. Any
          and all disputes,  controversies,  claims or  differences  between the
          Parties  in  connection  with  this  Agreement,  or  relating  to this
          Agreement, or the existence, construction, validity, interpretation or
          meaning, performance, non-performance, enforcement, operation, breach,
          continuance or termination of this Agreement  which cannot be resolved
          amicably by the Parties through prompt good faith negotiations,  shall
          be  exclusively   submitted  to  and  finally   resolved   through  an
          arbitration proceeding in accordance with Article 15 of the JMA.

6.3       Notices  given under this  Agreement  shall be given or  confirmed  in
          writing,  in the English  language,  and may be sent by  international
          overnight courier mail, by telefax, or delivered by hand, in each case
          with a copy sent and addressed as follows:

          If  to  Occidental:
          -------------------
          Occidental  Oil  and  Gas  Corporation
          5  Greenway  Plaza,  Suite  2400
          Houston
          TX  77227-775  7

          Attention:  John  Winterman
                      Vice President Worldwide Exploration

          Telephone:  (713) 215  7184
          Facsimile:  (918) 641  7045

          With  copy  to:

          Occidental  International  Exploration  and  Production  Company
          10889  Wilshire  Boulevard
          Seventh  Floor
          Los  Angeles,  CA  90024
          U.S.A.

<PAGE>
          Attention:  Nathan  E.  Fagre
                      Senior  Vice  President  and  General  Counsel

          Telephone:  310-443-6831
          Facsimile:  310-443-6192

          If  to  Adair:
          --------------

          Adair  Yemen  Exploration  Limited
          do  Adair  International  Oil  &  Gas,  Inc.
          3000  Richmond  Avenue,  Suite  100
          Houston,  Texas  77098
          U.S.A.

          Attention:  John  W.  Adair
                      Chairman  of  the  Board  and  Chief  Executive  Officer

          Telephone:  (713) 621-8241
          Facsimile:  (713) 621-8240

          If  to  Saba:
          -------------

          Saba  Yemen  Oil  Company  Limited
          P.O.  Box  16921
          Sana'a,  Republic  of  Yemen

          Attention:  Kamal  Salem  Mi  Abdo
                      Vice  Chairman

          Telephone:  967  1  401  447
          Facsimile:  967  1  200  989

          or to such other address or telefax number as may from time to time be
          noticed  in writing  by any of the  Parties  to the other.  Any notice
          delivered  by hand or sent by  international  overnight  courier  mail
          shall be deemed to have been  served at the time of  receipt,  and any
          notice sent by telefax shall be deemed to have been served on the date
          on which it is transmitted.

6.4       The Parties each  represent  and warrant to the other that,  except as
          disclosed in writing to the other Parties prior to the date  hereof,no
          Party  has  engaged  or  dealt  with any  broker,  finder  or  similar
          intermediary in connection with the execution, or negotiations leading
          to the  execution,  of this  Agreement,  the PSA, the YICOM JOA or the
          JMA. Any fees, payments, obligations or claims arising with respect to
          any such broker,  finder or similar  intermediary,  whether arising in
          the past, present or future, shall be for the sole account and expense
          of the Party  whose  actions  or course of  conduct  gave rise to such
          liability.

<PAGE>
6.5       All costs and expenses  incurred by a Party prior to execution of this
          Agreement,  the PSA,  the  YICOM JOA and the JMA shall be for the sole
          account  of such  Party.  No Party  shall be under any  obligation  to
          reimburse  another  Party for any costs and expenses not  specifically
          agreed to in writing in advance by all Parties.

6.6       It is understood  that upon  execution of this Agreement no provisions
          of this Agreement  shall be modified,  altered,  or waived,  except by
          prior written consent of the Parties.  This Agreement shall be binding
          upon the successors and assigns of the Parties hereto.

6.7       This  Agreement,  the  PSA,  the  YICOM  JOA  and  the  JMA,  together
          constitute the entire understanding of the Parties with respect to the
          subject  matter  hereof  and  supersede  all  prior  negotiations  and
          agreements  pertaining to the subject matter  hereof,  whether oral or
          written, of the Parties.

6.8       As between the Parties, in the case of a conflict, express or implied,
          between the provisions of this Agreement,  and those of the JMA or the
          YICOM JOA, this Agreement shall control.

6.9       Each Party may sign identical  counterparts of this Agreement with the
          same effect as if the Parties signed the same document. A copy of this
          Agreement signed by a Party and delivered by facsimile transmission to
          the other  Party  shall  have the same  effect as the  delivery  of an
          original of this Agreement  containing the original  signature of such
          Party.

<PAGE>
IN  WITNESS  WHEREOF,  the duly authorized representatives of the Parties hereto
have  executed  this  Agreement  in  duplicate.

ADAIR YEMEN  EXPLORATION  LIMITED

By:
       ------------------------------

Title:  President
       ------------------------------

Date:   31 March 2000
       ------------------------------

SABA  YEMEN  OIL  COMPANY  LIMITED

By:
       ------------------------------

Title:  Chairman
       ------------------------------

Date:   31 March 2000
       ------------------------------

OCCIDENTAL  YEMEN  SABATAIN,  INC.

By:
       ------------------------------

Title:  Attorney in Fact
       ------------------------------

Date:   31 March 2000
       ------------------------------

<PAGE>SITE DEVELOPMENT AGREEMENT

     THIS  SITE  DEVELOPMENT AGREEMENT ("Agreement") is dated as of November 30,
1999  ("Effective  Date")  and  is  made and entered into by and between Calpine
Corporation,  a  Delaware corporation ("Calpine"), with its principal offices at
50 West San Fernando Street, San Jose, CA 95113, and Adair International Oil and
Gas,  Inc.,  a  Texas  corporation  ("Adair") with its principal offices at 3000
Richmond  Avenue, Houston, TX 77098. Calpine and Adair are sometimes referred to
herein  individually  as  a  "Party"  and  collectively  as  the  "Parties"~

     1.    Recitals. This Agreement  is  made  with  reference to the following:
           --------

          1.1. Calpine and  Adair are parties to a letter agreement dated May 5,
1999  ("Letter  Agreement")  wherein  they agreed to jointly perform feasibility
studies  to  review  and  evaluate  the  potential  development by Calpine or an
Affiliate  of  two  500  MW  (nominal)  combined  cycle  generation  projects
(collectively, the "Projects", individually, a "Project") on sites in California
and  New  Mexico.

          1.2. One of  the  Projects ("Mecca Power Project") would be located in
Mecca,  California  on  land ("Mecca Project Site") owned by the Torres-Martinez
Desert  Cahuilla  Indians ("Owners"). Based upon their initial evaluation of the
Mecca  Project  Site, the Parties believe that it may be feasible for Calpine or
an  Affiliate  to construct and operate a merchant power plant thereon, and they
desire to further examine the eligibility of the proposed Mecca Project Site for
development.

          1.3.  Pursuant  to  the  Letter Agreement, the Parties agreed to enter
into  a development agreement for the purposes of further implementing a Project
site that they agree is feasible for development by Calpine or an Affiliate, and
they  desire  and  intend  hereby  to enter into such an agreement regarding the
proposed  Mecca  Project  Site.

          1.4. In connection  with their initial evaluation of the Mecca Project
Site, the Parties entered into an agreement ("Initial Owner Agreement") with the
Owners dated, July 8, 1999, which, among other things, grants to the Parties (i)
certain  rights  of entry on the Mecca Project Site to conduct due diligence and
feasibility  investigations,  (ii)  a  period  of  one  (1)  year  of  exclusive
negotiations  with the Owners for an option to lease the Mecca Project Site, and
(iii)  access to certain documents of the Owners pertaining to the Mecca Project
site,  its  prior  use  and  operation,  and  its  present  physical  condition.

     NOW,  THEREFORE, in consideration of the foregoing and the mutual covenants
and  agreements  contained  herein,  the Parties, intending to be legally bound,
hereby  agree  as  follows:

     2.    Definitions. Capitalized terms  used in this Agreement shall have the
           -----------
following  meanings  unless  the  context  clearly  requires  otherwise:

     "Adair"  means  Adair International Oil and Gas, Inc., a Texas corporation.

<PAGE>
     "ADAIR NOTICE  OF  TERMINATION:  has  the  meaning  given  in  Section  12.

     "AFFILIATE"  means,  with  respect  to  any  Party,  any  other entity that
directly,  or  indirectly  through  one  or  more  intermediaries,  controls, is
controlled  by  or is under common control with such person. For purposes of the
foregoing  "control,"  "controlled  by"  and  "under  common control with," with
respect  to  any Party shall mean the possession, directly or indirectly, of the
power  to  direct  or cause the direction of the management and policies of such
person,  whether  through  the  ownership  of  voting  securities or partnership
interests,  by  contract  or  otherwise.

     "AGREEMENT"  means  this Site Development Agreement, including all Exhibits
attached  hereto.

     "CALPINE"  means  Calpine  Corporation,  a  Delaware  corporation.

     "CALPINE" Notice  of  Termination"  has  the  meaning  given in SECTION 11.

     "COMMERCIAL OPERATION" means the Project has passed its performance testing
as  described  in the definitive construction agreements and the Project is able
to  operate and produce electrical energy for commercial sale in accordance with
prudent  utility  practices  as  are commonly used for gas fired projects of the
type  and  size  similar  to  the  Project  and  applicable  laws.

     "COMMERCIAL  OPERATION  DATE" means the date in which the Project commences
Commercial  Operation.

     "COMMUNITY  DEVELOPMENT AGREEMENT(S)" has the meaning given in SECTION 4.5.

     "DEFINITIVE OWNER AGREEMENTS" means collectively the Lease Option, the Tero
Agreement,  the  Sales  Tax  Agreement,  the  Franchise  Tax  Agreement, and the
Community  Development  Agreement(s).

     "DEVELOPMENT  FEE"  has  the  meaning  given  in  SECTION  6.

     "DEVELOPMENT  PERIOD"  is  a  two  year period beginning at signing of this
agreement.

     "EFFECTIVE DATE" mean the effective date of this Agreement, as set forth in
the  Preamble  to  this  Agreement.

     "FINANCIAL  CLOSING"  means,  with  respect to the Mecca Power Project, the
date  when construction financing for the Mecca Power Project is fully committed
and  first  available  for  draw down pursuant to financing arrangements entered
into  between  Calpine  or  an  Affiliate  and  one  or  more  project  lenders.

     "FRANCHISE  FEE  AGREEMENT"  has  the  meaning  given  in  SECTION  4.4.

     "INITIAL  OWNER  AGREEMENT"  has  the  meaning  given  in  SECTION  1.4.

                                      -2-
<PAGE>
     "LEASE" has the meaning given in SECTION 4.1.

     "LEASE  OPTION"  has  the  meaning  given  in  SECTION  4.1.

     "LETTER  AGREEMENT"  has  the  meaning  given  in  SECTION  1.1.

     "MECCA  POWER  PROJECT"  has  the  meaning  given  in  SECTION  1.2.

     "MECCA  PROJECT  SITE"  has  the  meaning  given  in  SECTION  1.2.

     "Notice  of  Termination"  has  the  meaning  given  in  SECTION  11.

     "Notice  of  Withdrawal"  has  the  meaning  given  in  SECTION  12.

     "OWNERS"  has  the  meaning  given  in  SECTION  1.2.

     "PARTY OR PARTIES" has the meaning given in the Preamble of this Agreement.

     "POWER  PURCHASE  AGREEMENT"  has  the  meaning  given in SECTION 8 of this
Agreement.

     "PROJECT  OR  PROJECTS"  has  the  meaning  given  in  SECTION  1.1.

     "SALES  TAX  AGREEMENT"  has  the  meaning  given  in  SECTION  4.3.

     "Site  Development"  has  the  meaning  given  in  Section  4.

     "TERM"  has  the  meaning  given  in  SECTION  3.

     "TERMINATION  DATE"  has  the  meaning  given  in  SECTION  3.

     "TERO  AGREEMENT"  has  the  meaning  given  in  SECTION  4.2.

     3.  Term.  The  term  of  this  Agreement  ("Term")  shall  commence on the
         ----
Effective  Date defined in the Preamble hereto and shall terminate ("Termination
Date")  on  the  earlier  of (i) ten (10) days after Calpine has given a Calpine
Notice  of  Termination  pursuant to Section 11 of this Agreement, (ii) ten (10)
days after Adair has given an Adair Notice of Termination pursuant TO SECTION 12
of  this  Agreement,  or  (iii)  the date on which all of the obligations of the
Parties  pursuant to this Agreement have been performed, discharged or released.

     4.  Site  Development.  Commencing  on  the  Effective  Date and continuing
         -----------------
throughout the Term of this Agreement, Calpine shall pursue the Site Development
for  the  Mecca Project Site. Throughout the Term of this Agreement, Adair shall
cooperate  with  and  assist  Calpine  with Site Development for the Mecca Power
Project.  "Site  Development" shall mean and include, but is not limited to, the
following:

                                      -3-
<PAGE>
          4.1. Negotiations with  the Owners for and documentation and execution
of an option to lease ("Lease Option") the Mecca Project Site which Lease Option
shall  include,  among other things, the definitive lease ("Lease") of the Mecca
Project  Site to be executed by Owners and Calpine or an Affiliate if Calpine or
an  Affiliate  should  exercise  the  Lease  Option;

          4.2. Negotiations  with the Owners for and documentation and execution
of  an  agreement  ("Tero  Agreement")  regarding  the  employment  of  labor in
connection  with  the  construction  of  the  Mecca  Power  Project;

          4.3. Negotiations  with the Owners for and documentation and execution
of  an  agreement ("Sales Tax Agreement") regarding the payment of sales, use or
other  comparable  taxes  in  connection  with  the  purchase  and  placement of
equipment  for  the  Mecca  Power  Project;

          4.4. Negotiations  with the Owners for and documentation and execution
of  an  agreement  ("Franchise  Fee  Agreement")  regarding  the  payment by the
owner/operator  of the Mecca Power Project of an annual fee for the operation of
the  Project;

          4.5. Negotiations  with the Owners for and documentation and execution
of  an  agreement or agreements ("Community Development Agreement(s)") regarding
payments  for  construction  by  the  developer  of  the  Mecca Power Project of
community  services  and  facilities  benefiting  the  Owners;

          4.6. Negotiations with the Owners and/or such other interested parties
as may be deemed necessary or desirable by Calpine for the purpose of evaluating
the  Mecca  Project  Site,  completing  a  feasibility  study,  and  otherwise
structuring,  planning, and organizing implementation of the Mecca Power Project
throughout  the  development  and  construction  period  until  the  Commercial
Operation  Date;

Adair's  assistance and cooperation hereunder shall include, without limitation:
(i)  introduction  of  Calpine  representatives  and  agents  to  the  Owners'
representatives and to the representatives of other interested parties with whom
discussions and/or negotiations are deemed by Calpine necessary or desirable for
purposes  of  Site  Development;  (ii)  scheduling and, if requested by Calpine,
attending and participating in meetings related to Site Development; (iii) using
its best efforts to secure on terms favorable to and acceptable by Calpine or an
Affiliate  the  Definitive  Owner Agreements and such other agreements as may be
necessary  or  deemed by Calpine desirable to implement the Mecca Power Project;
and (iv) otherwise taking such actions as may be reasonably requested by Calpine
or  an  Affiliate  for  the  purpose  of Site Development and for the purpose of
siting,  permitting,  financing  and  constructing a merchant power plant on the
Mecca  Project  Site.

     5.     Expenses. Each Party shall bear its own direct and internal expenses
            --------
incurred  in  connection  with  the  Site  Development  and  in  discharging its
obligations  pursuant  to  this Agreement; provided, however, that Calpine shall
pay all third party expenses for consultants, testing of the Mecca Project Site,
and  as  required  to  prepare  the Definitive Owner Agreements. Adair shall not
incur  any  third  party  expense  for which Calpine is liable hereunder without
first  obtaining  Calpine's  written  approval of such expense. Each party shall
bear  its  own  legal  expenses  incurred in connection with the preparation and
implementation  of  this  Agreement.

                                      -4-
<PAGE>
      6.     Development Fee and Consulting Contract.  In consideration  of  the
             ---------------------------------------
faithful  and  timely  performance  of  its  duties  and  obligations under this
Agreement,  Adair  shall  be paid a fee ("Development Fee") in the amount of One
Million  Dollars  ($1,000,000).  The Development Fee shall be due and payable in
two  (2)  equal  installments  of Five Hundred Thousand Dollars ($500,000) each.
The  first  installment  shall  be  paid at Financial Closing of the Mecca Power
Project  and  the  second  installment shall be paid on the Commercial Operation
Date.  Adair's  right  to  receive  the Development Fee is expressly conditioned
upon  Financial  Closing  and Commercial Operation occurring for the Mecca Power
Project.  For  no  longer  than, the duration of the Project Development Period,
Adair shall, for a fee, consult with Calpine to assist with project development,
-tribal negotiations, and permitting.  Adair shall be paid a monthly retainer of
$12,000  in  exchange  for 100 hours per month of support from John Adair, Jalal
Alghani  and  Dennis  Lambert.  All hours over 100 per month will be billed at a
rate  of  $100  per  hour  up  to  a maximum of $15,000 per month, including the
monthly  retainer.

     7.     Contingent  Royalty  Interest  Note. In further consideration of the
            -----------------------------------
faithful  and  timely  performance  of  its  duties  and  obligations under this
Agreement,  Adair shall be issued a Contingent Royalty Interest Note which shall
pay  Adair  a  royalty  interest  equal  to  3% of the Project's earnings before
interest,  taxes  and  depreciation (EBITDA) for years 1 through 7 of Commercial
Operations,  3.5%  of  the Project's EBITDA for years 8 through 15 of Commercial
Operations  and  4.0%  of  the  Project's  EBITDA  for  years  16  through 20 of
Commercial  Operations. Payments will commence following the first full calendar
quarter  after the Commercial Operation Date of the Mecca Power Project and will
continue  each  successive  quarter  thereafter  until  the  twentieth  (20th)
anniversary  of  the  Commercial  Operation  Date  of  the  Mecca Power Project.

Adair's  right  to  receive  the  royalty  interest  or  power production fee is
expressly  conditioned  upon  commencement  of Commercial Operation of the Mecca
Power  Project.

     8.     Power  Purchase  Agreement.  At  or  before Financial Closing, Adair
            --------------------------
shall  have  the  opportunity  to  purchase up to 20% of the output of the Mecca
Power  Project  under  a  long-term  power  sales agreement with Calpine ("Power
Purchase  Agreement").  The terms of the Power Purchase Agreement and associated
power  purchase  prices will be negotiated during the project development period
and  will  be  determined  as  project costs and operations become more defined.
Power  purchase  prices  shall  be at a discount to prevailing market prices and
shall approximate the fuel, operations and maintenance, financing and management
expenses for the Project. Adair's right to enter into a Power Purchase Agreement
is  expressly conditioned upon commencement of Commercial Operation of the Mecca
Power  Project.  The  Power  Purchase  Agreement will permit Adair to assign its
rights thereunder subject to Calpine's approval, which shall not be unreasonably
withheld,  and  subject  to  a  right  of  first  refusal  in  favor of Calpine.

     9.     Exclusivity. During the Term of this Agreement, the Parties agree to
            -----------
associate  exclusively  together  for  the  purpose  of furthering the potential
development  of  the  Mecca  Power  Project  on  the  Mecca  Project  Site.

                                      -5-
<PAGE>
      10.     Confidentiality. The Parties specifically agree that the terms of
              ---------------
this  Agreement,  of  the  Definitive  Owner Agreements, of any other agreements
entered  into  in  connection  with the Mecca Power Project, and all information
developed  by  or  at  the direction of either of the Parties in determining the
feasibility  of  the  Mecca  Power  Project  and  the  Mecca  Project  Site  are
Confidential  Information  for  purposes  of  this  Agreement.  All Confidential
Information  received  from  a  Party  or its Affiliates shall be held in strict
confidence  by  the  other  Party  and shall not be disclosed to any third party
except as may be reasonably required for the performance and fulfillment of this
Agreement.  Confidential  Information  shall  be used by the receiving Party and
its Affiliates only with regard to the Mecca Power Project and shall not be used
for  any  other  purpose.  Notwithstanding  the  foregoing,  such obligations of
confidentiality  shall not apply to any Confidential Information that: (i) is in
or  enters the public domain through no fault of the receiving Party; ii) was in
the  possession  of  the  receiving Party prior to receipt under this Agreement;
(iii)  corresponds in substance to information heretofore or hereafter furnished
by  third  parties  to the receiving party without restriction on disclosure; or
(iv)  must  be  disclosed pursuant to applicable law or an order of any court or
governmental  body.  Upon expiration or other termination of this Agreement, all
Confidential  Information  shall be returned to the Party from whom received, or
shall be destroyed with an appropriate assurance that any and all copies thereof
have  been destroyed, or shall be retained by the receiving Party subject to the
confidentiality,  non-disclosure  and  use  restrictions  of  this  Section.
Notwithstanding  anything  to the contrary in this Agreement, this Section shall
be  of  no  further  force  or  effect,  however,  with  respect to Confidential
Information,  from and after the date that is three (3) years following the date
of  initial  disclosure of such Confidential Information to the receiving Party.

     11.    Calpine Termination. If  at any time Calpine, in its reasonable good
            -------------------
faith  discretion,  shall determine that the Mecca Power Project is not feasible
and/or  does  not  satisfy  its  criteria for the development and operation of a
merchant  power  plant, Calpine may, by written notice to Adair ("Calpine Notice
of Termination"), terminate this Agreement. If Calpine gives a Calpine Notice of
Termination,  this  Agreement  shall  terminate  at midnight on the tenth (10th)
calendar  day  after  such Notice is given and the Parties shall have no further
rights  or  obligations hereunder except for such obligations as by the terms of
this  Agreement expressly survive termination. If Calpine gives a Calpine Notice
of  Termination,  Adair  shall  be free to pursue development of the Mecca Power
Project  alone  or with others, independently of Calpine, and Calpine shall have
no  further  rights  hereunder.

     12.     Adair  Termination.  If  at  any time Adair, in its reasonable good
             ------------------
faith  discretion,  shall determine that the Mecca Power Project is not feasible
and/or  does  not  satisfy  its  criteria for the development and operation of a
merchant  power plant, Adair may, by written notice to Calpine ("Adair Notice of
Termination  "),  terminate  this  Agreement.  If Adair gives an Adair Notice of
Termination,  this  Agreement  shall  terminate  at midnight on the tenth (10th)
calendar  day  after such Notice~ is given and the Parties shall have no further
rights  or  obligations hereunder except for such obligations as by the terms of
this  Agreement expressly survive termination. If Adair gives an Adair Notice of
Termination,  Calpine  shall  be  free  to pursue development of the Mecca Power
Project  alone  or  with others, independently of Adair, and Adair shall have no
further  rights  hereunder,  including,  but  not  limited  to, the right to the
Development  Fee,  the  right  to  consulting  fees, the right to the Contingent
Royalty  Interest  Note or the right to enter into the power sales agreement. If
Adair withdraws from the Mecca Power Project, within five (5) days after written
demand  from  Calpine, Adair shall execute and deliver to Calpine an assignment,

                                      -6-
<PAGE>
in  form  reasonably  satisfactory  to  Calpine,  of all of its right, title and
interest  in  and  to any and all agreements, studies, and other work product of
its  Site  Development  activities hereunder (including, but not limited to, the
Initial  Owner  Agreement)  together with all such original agreements, studies,
and  work  products.  This  obligation  shall  survive  the  termination of this
Agreement.

     13.     Liability.
             ----------

          13.1. Indemnification.  To  the fullest extent permitted by applicable
                ---------------
law,  each  Party shall indemnify, defend and hold harmless the other Party, its
officers,  directors,  employees and representatives with respect to (i) any and
all  claims  made  against  any of them by any person or persons claiming, by or
through such indemnifying Party or as a result of any action by the indemnifying
Party,  the  identifying party's interest in this Agreement, and the identifying
party's  interest  in  the  Mecca Power Project, or an entitlement to payment of
fees,  reimbursement  of  costs  or  other  amounts  in connection with the Site
Development  to  which  interest  or  claim the other Party has not consented or
approved,  or  agreed  to  hereunder,  and  (ii)  any liability, damage, cost or
expense,  including  court  costs  and reasonable attorneys' fees, in connection
with  any  third  party claim arising from the negligence, willful misconduct or
breach  of this Agreement by the indemnifying Party or its Affiliates; provided,
however, that neither Party shall have any indemnification obligations hereunder
to the extent any such claim, liability, damage, cost or expense is caused by or
arises  from  an  indemnified  Party's  fault  or  negligence.

          13.2. Limitation  of Liability.  In no event shall either Party or its
                ------------------------
Affiliates  have  any  liability  to  the  other Party or its Affiliates for any
monetary  loss  or  damages  arising out of or in connection with the activities
performed  under  this  Agreement  and  each Party hereby expressly releases the
other  Party  and  its  Affiliates from any such liability. Without limiting the
generality  of  the  foregoing,  neither  Party  shall be liable for damages for
failure  to  accomplish  the  Site  Development  tasks assigned to it hereunder,
failure  to  obtain  sufficient  debt  and  equity financing for the Mecca Power
Project, or failure for any reason to achieve the Financial Closing of the Mecca
Power  Project.  In  no  event  shall  either  Party or its Affiliates, or their
officers,  directors,  employees  or  representatives,  be  liable hereunder for
consequential,  special  or  indirect  loss or damage, including loss of profit,
loss  of  revenue  or  any  other  special or incidental damages, and each Party
hereby  expressly  releases the other Party, its Affiliates, and their officers,
directors,  employees  and  representatives  therefrom.

          13.3. Intent of the Parties. The Parties intend that the releases from
                ---------------------
liability,  disclaimers  of  liability and limitations on liability set forth in
this  Section 13 shall apply whether in contract, tort or otherwise, even in the
event  of  the fault, negligence, strict liability, or breach of contract of the
Party  release or whose liability is disclaimed or limited, shall extend to such
Party's  Affiliates  and  to  its  and  their officers, directors, employees and
representatives, and shall continue in full force and effect notwithstanding the
expiration  or  other termination of this Agreement. The Parties also intend and
agree  that  the  indemnification  provisions  set  forth  in  SECTION  13.1 and
SECTION  15.2  shall  survive  the  expiration  or  other  termination  of  this
Agreement,  or the withdrawal of a Party from the Mecca Power Project hereunder,
with  respect  to  events,  occurrences  and  claims  arising  on or before such
expiration,  other  termination  or  withdrawal.

                                      -7-
<PAGE>
     14.     Notices
             -------

             14.1.  Writing. Any notice, invoice, demand, offer or other written
                    -------
instrument  required or permitted to be given pursuant to this Agreement (unless
expressly permitted to be sent electronically) shall be in writing signed by the
Party  giving  such  notice  and shall, to the extent reasonably practicable, be
sent  by  telefax, and if not reasonably practicable to send by telefax, then by
hand  delivery, overnight courier, or registered mail, to the other Party at the
address  set  forth  below:

                    If  delivered  to  Adair:
                    -------------------------

                    Adair  International  Oil  and  Gas,  Inc.
                    3000  Richmond  Ave.,  Suite  100
                    Houston,  Texas  77098
                    Telephone:  (713) 621-8241
                    Fax:  (713) 621-8240
                    Attention:  John  Adair

                    If  delivered  to  Calpine:
                    ---------------------------

                    Calpine  Corporation
                    6700  Koll  Center  Parkway
                    Pleasanton,  CA  94566
                    Telephone:  (925) 600-2000
                    Fax:  (925) 600-8925
                    Attention:  Business  Development  Department

                    with  a  copy  to:

                    Calpine  Corporation
                    50  West  San  Fernando  Street
                    San  Jose,  CA  95113
                    Telephone:  (408) 995-5115
                    Fax:  (408) 975-4648
                    Attention:  General  Counsel

Each  Party  shall  have  the right to change the place to which notice shall be
sent  or  delivered  or  to  specify  one  additional address to which copies of
notices  may be sent, in either case by similar notice sent or delivered in like
manner  to  the  other  Party.

                                      -8-
<PAGE>
             14.2.     Timing  of  Receipt. Without limiting any other means  by
                       -------------------
which a Party may  be  able  to  prove  that  a notice has been received by  the
other Party, a notice  shall  be  deemed  to  be  duly  received:

                  (a)     If  delivered  by  hand or overnight courier, the date
              when left at the  address  of  the  recipient;

                  (b)     If  sent  by  registered  mail, the date of the return
              receipt; or

                  (c)     If sent by telefax, upon receipt by the  sender  of an
              acknowledgment or  transmission report  generated  by the  machine
              form which the telefax was sent indicating  that  the telefax  was
              sent in its entirety to the recipient's telefax number.

In  any case hereunder in which a Party is required or permitted to respond to a
notice  from  the  other  Party within a specified period, such period shall run
from the date on which the notice was deemed received as above provided, and the
response  shall  be  considered to be timely given if given as above provided by
the  last  day  of  such,  period.

     15.     Miscellaneous.
             --------------

          15.1.  Relationship  of  the  Parties.  It is agreed and understood by
                 ------------------------------
the  Parties that this Agreement shall not constitute or create a joint venture,
partnership or legal entity of any kind or any other similar arrangement between
the Parties.  Except where otherwise expressly approved by the other Party, each
Party  shall act hereunder only on an individual and several basis and shall not
be  authorized to act as agent or representative of the other Party nor have the
power  or  authority to bind the other Party for any purpose.  No Party shall so
bind  the  other  Party or represent to anyone that it has the authority to bind
such  other  Party  or  make any other representation about or on behalf of such
other  Party.

          15.2. Compliance  with  Laws.  Each  Party  in  its  Site  Development
                ----------------------
activities  hereunder  shall  comply  with all applicable laws, regulations, and
orders  of  any  governmental  or  regulatory authority having jurisdiction with
respect  to  the Mecca Power Project, and each Party shall indemnify, defend and
hold  harmless  the  other  Party  from any costs, claims, damages, penalties or
liability  arising  as  a  result  of  such Party's failure to comply therewith.

          15.3. Entire  Agreement; Amendment.  This  Agreement  constitutes  the
                ----------------------------
entire  agreement  between  the Parties as of the Effective Date with respect to
the  subject  matter  hereof  and  supersedes  any  and  all prior negotiations,
agreements,  understandings  and representations relating thereto, including the
Letter Agreement; provided, however, notwithstanding the foregoing, that certain
Confidentiality  and  Non-Disclosure  Agreement dated as of February 11, 1999 by
and  between  the  Parties  shall  not be superseded by this Agreement and shall
remain  in  full  force  and  effect  in accordance with the terms thereof. This
Agreement may not be amended, modified or changed except as mutually agreed in a
writing executed by both Parties and specifying that such writing is intended to
be  an  amendment  to  this  Agreement.

                                      -9-
<PAGE>
          15.4. Joint  Effort.  Preparation of  this  Agreement has been a joint
               --------------
effort of the  Parties  and  the  resulting document shall not be construed more
severely against  one  of  the  Parties  than  against  the  other.

          15.5. Captions.  The  captions  contained  in  this  Agreement are for
                --------
convenience  and  reference only and in no way define, describe, extend or limit
the  scope  or intent of this Agreement or the intent of any provision contained
herein.

          15.6. Severability. The invalidity of one or more phrases, sentences,.
                -----------
clauses,  or  Sections contained in this Agreement shall not affect the validity
of  the  remaining portions of the Agreement so long as the material purposes of
this  Agreement  can  be  determined  and  effectuated.

          15.7. No Waiver.  Any  failure  of  either Party to enforce any of the
                ---------
provisions  of  this Agreement or to require compliance with any of its terms at
any  time  during the term of this Agreement shall in no way affect the validity
of  this  Agreement, or any part hereof, and shall not be deemed a waiver of the
right  of  such  Party  thereafter  to  enforce any and each of such provisions.

          15.8. Applicable Law.  This  Agreement shall be governed by, construed
                --------------
and  enforced  in accordance with the Laws of the State of California, exclusive
of  conflicts  of  laws  provisions,  and  any  action brought pursuant to or in
connection  with  this  Agreement  shall  be  venued  in  California.

          15.9. Counterparts.  This  Agreement  may  be  signed in any number of
                ------------
counterparts  and  each counterpart shall represent a fully executed original as
if  signed  by  both  patties.

          15.10. Survival.  The provisions of Sections 10, 13, and 15.12 of this
                 --------
Agreement  shall survive the expiration or earlier termination of this Agreement
for  the  terms  specified  therein,  if  any,  and  otherwise  indefinitely.

          15.11.  Further  Assurances.  Each Party agrees to execute and deliver
                  -------------------
all  further  instruments  and  documents,  and  take  all  further  action  not
inconsistent  with  the  provisions  of  this  Agreement  that may be reasonably
necessary  to  complete performance of the Parties' obligations hereunder and to
effectuate  the  purposes  and  intent  of  this  Agreement.

          15.12. Third Parties.  Except  as otherwise expressly provided in this
                 -------------
Agreement  with  respect to indemnified persons, nothing in this Agreement shall
be  construed  to  create  any duty to, standard of care with respect to, or any
liability  to  any  person  who  is  not  a  Party  to  this  Agreement.

     IN  WITNESS  WHEREOF, the Parties have caused this Agreement to be executed
as  of  the  Effective Date by their duly authorized representatives as follows:

                                      -10-
<PAGE>
Calpine Corporation, a Delaware corporation    Adair International Oil and Gas,
                                               Inc., a Texas corporation

By:  /s/  JACOB  M.  RUDISILL                  By:  /s/  John W. Adair
-----------------------------                  -------------------------------
Its:  VICE PRESIDENT                           Its:  Chairman, C.E.O.
-----------------------------                  -------------------------------

                                      -11-
<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}]]