Document:

<PAGE>
                                                                 Exhibit 4.22.10

                         PARTICIPATION AGREEMENT (BR-4)

                          Dated as of October 18, 2001

                                      among

                   BROAD RIVER ENERGY LLC, as Facility Lessee,

                     BROAD RIVER OL-4, LLC, as Owner Lessor,

     WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
  capacity, except as expressly provided herein, but solely as Lessor Manager,

                       CALPINE CORPORATION, as Guarantor,

                      SBR OP-4, LLC, as Owner Participant,

    STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
                     not in its individual capacity, except
                    as expressly provided herein, but solely
                            as Indenture Trustee, and

    STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
                     not in its individual capacity, except
                    as expressly provided herein, but solely
                            as Pass Through Trustees

                               BROAD RIVER PROJECT

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                                TABLE OF CONTENTS

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SECTION 1. DEFINITIONS; INTERPRETATION OF THIS PARTICIPATION AGREEMENT ......................................................      3

SECTION 2. PARTICIPATION; CLOSING DATE; TRANSACTION COSTS ...................................................................      3

  Section 2.1.  Agreements to Participate ...................................................................................      3

  Section 2.2.  Closing Date; Procedure for Participation ...................................................................      4

  Section 2.3.  Transaction Costs ...........................................................................................      6

SECTION 3. REPRESENTATIONS AND WARRANTIES ...................................................................................      6

  Section 3.1.  Representations and Warranties of the Facility Lessee .......................................................      6

  Section 3.2.  Representations and Warranties of the Owner Lessor ..........................................................     17

  Section 3.3.  Representations and Warranties of the Lessor Manager and the Trust Company ..................................     18

  Section 3.4.  Representations and Warranties of the Owner Participant .....................................................     20

  Section 3.5.  Representations and Warranties of Indenture Trustee and the Lease Indenture Company .........................     22

  Section 3.6.  Representations, Warranties and Covenants of the Pass Through Trustees and the Pass Through Company .........     24

SECTION 4. CLOSING CONDITIONS ...............................................................................................     25

  Section 4.1.  Completion of the Facility ..................................................................................     27

  Section 4.2.  Operative Documents .........................................................................................     27

  Section 4.3.  Certificates and the Lessor Notes ...........................................................................     27

  Section 4.4.  Equity Investment ...........................................................................................     27

  Section 4.5.  Organizational Documents ....................................................................................     27

  Section 4.6.  Representations and Warranties ..............................................................................     27

  Section 4.7.  Defaults, Events of Default, Events of Loss .................................................................     27

  Section 4.8.  Regulatory Approvals ........................................................................................     27

  Section 4.9.  Consents ....................................................................................................     28

  Section 4.10. Governmental Actions ........................................................................................     29
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                          TABLE OF CONTENTS (continued)

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Section 4.11. Insurance .....................................................................................................     29

Section 4.12. Ratings .......................................................................................................     29

Section 4.13. Environmental Report ..........................................................................................     29

Section 4.14. Surveys .......................................................................................................     29

Section 4.15. Appraisal; Condition of the Facility ..........................................................................     29

Section 4.16. Letter from the Appraiser .....................................................................................     29

Section 4.17. Other Reports .................................................................................................     30

Section 4.18. Opinion with Respect to Certain Tax Aspects ...................................................................     30

Section 4.19. Opinions of Counsel ...........................................................................................     30

Section 4.20. Recordings and Filings ........................................................................................     30

Section 4.21. Conditions to Closing .........................................................................................     30

Section 4.22. Taxes .........................................................................................................     30

Section 4.23. No Changes in Applicable Law ..................................................................................     31

Section 4.24. Registered Agent for the Facility Lessee and the Owner Lessor .................................................     31

Section 4.25. Operating Lease Treatment .....................................................................................     31

Section 4.26. Rent Adjustments ..............................................................................................     31

Section 4.27. Title Insurance ...............................................................................................     31

Section 4.28. Parent Guaranty ...............................................................................................     31

Section 4.29. Letter as to Number of Offerees ...............................................................................     31

Section 4.30. Lien Search ...................................................................................................     32

Section 4.31. Litigation ....................................................................................................     32

Section 4.32. No Material Adverse Change ....................................................................................     32

Section 4.33. Private Placement Number ......................................................................................     32

Section 4.34. Proceedings and Documents .....................................................................................     32
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                          TABLE OF CONTENTS (continued)

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  Section 4.35. No Proposed Tax Law Change ..................................................................................     32

  Section 4.36. Payment of Fees and Expenses ................................................................................     32

  Section 4.37. Corrective Ordinance ........................................................................................     32

SECTION 5. COVENANTS OF FACILITY LESSEE AND GUARANTOR .......................................................................     33

  Section 5.1.  Maintenance of Existence ....................................................................................     33

  Section 5.2.  Merger, Consolidation, Sale of Substantially All Assets .....................................................     33

  Section 5.3.  Guaranty and Contingent Obligations .........................................................................     33

  Section 5.4.  Assignment of Rights ........................................................................................     34

  Section 5.5.  Lessor Manager Fees .........................................................................................     34

  Section 5.6.  Conduct of Business, Properties, Etc ........................................................................     34

  Section 5.7.  Obligations .................................................................................................     34

  Section 5.8.  Books, Records, Access ......................................................................................     34

  Section 5.9.  Other Information ...........................................................................................     35

  Section 5.10. Warranty of Title to Facility Site ..........................................................................     35

  Section 5.11. ERISA .......................................................................................................     36

  Section 5.12. Certain Contracts and Agreements ............................................................................     36

  Section 5.13. Certain Costs ...............................................................................................     36

  Section 5.14. Limitations on Liens ........................................................................................     37

  Section 5.15. Investments .................................................................................................     37

  Section 5.16. Intentionally Deleted .......................................................................................     37

  Section 5.17. Regulations .................................................................................................     37

  Section 5.18. Partnerships ................................................................................................     37

  Section 5.19. Dissolution .................................................................................................     37

  Section 5.20. Termination of Operative Documents; Delegation of Authority .................................................     37
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                          TABLE OF CONTENTS (continued)

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  Section 5.21. Name and Location ...........................................................................................     39

  Section 5.22. Use of Facility Site ........................................................................................     39

  Section 5.23. Abandonment of Facility .....................................................................................     39

  Section 5.24. Taxes, Other Government Charges and Utility Charges .........................................................     39

  Section 5.25. Compliance with Laws, Instruments, Etc ......................................................................     39

  Section 5.26. PUHCA .......................................................................................................     40

  Section 5.27. Further Assurances ..........................................................................................     40

  Section 5.28. No Subsidiaries .............................................................................................     41

  Section 5.29. Permitted Business ..........................................................................................     41

  Section 5.30. Support Arrangements ........................................................................................     41

  Section 5.31. Insurance ...................................................................................................     41

  Section 5.32. Tax Status ..................................................................................................     41

  Section 5.33. Transmission Assets .........................................................................................     42

SECTION 6. COVENANTS OF THE OWNER LESSOR, THE TRUST COMPANY AND THE LESSOR MANAGER ..........................................     42

  Section 6.1.  Compliance with the LLC Agreement ...........................................................................     42

  Section 6.2.  Owner Lessor's Liens ........................................................................................     43

  Section 6.3.  Amendments to Operative Documents ...........................................................................     43

  Section 6.4.  Transfer of the Owner Lessor's Interest .....................................................................     43

  Section 6.5.  Owner Lessor; Lessor Estate .................................................................................     43

  Section 6.6.  Limitation on Indebtedness and Actions ......................................................................     43

  Section 6.7.  Change of Location ..........................................................................................     43

  Section 6.8.  Bankruptcy of Owner Lessor ..................................................................................     43

SECTION 7. COVENANTS OF THE OWNER PARTICIPANT ...............................................................................     44

  Section 7.1.  Restrictions on Transfer of Member Interest .................................................................     44
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                          TABLE OF CONTENTS (continued)

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  Section 7.2.  Owner Participant's Liens ...................................................................................     46

  Section 7.3.  Amendments or Revocation of LLC Agreement ...................................................................     46

  Section 7.4.  Bankruptcy Filings ..........................................................................................     46

  Section 7.5.  Instructions ................................................................................................     47

  Section 7.6.  Right of First Refusal ......................................................................................     47

  Section 7.7.  Prohibition on Fundamental Changes ..........................................................................     47

  Section 7.8.  Appointment of Successor Lessor Manager .....................................................................     49

  Section 7.9.  Cooperation .................................................................................................     49

SECTION 8. COVENANTS OF THE INDENTURE TRUSTEE AND THE PASS THROUGH TRUSTEES .................................................     49

  Section 8.1.  Indenture Trustee's Liens ...................................................................................     49

  Section 8.2.  Pass Through Trustees' Covenant Not to Transfer Lessor Notes ................................................     50

SECTION 9. INDEMNIFICATION ..................................................................................................     50

  Section 9.1. General Indemnity ............................................................................................     50

  Section 9.2. General Tax Indemnity ........................................................................................     57

SECTION 10. FACILITY LESSEE'S RIGHT OF QUIET ENJOYMENT ......................................................................     66

SECTION 11. SUPPLEMENTAL FINANCING IMPROVEMENTS; OPTIONAL REFINANCINGS ......................................................     66

  Section 11.1. Financing Improvements ......................................................................................     66

  Section 11.2. Optional Refinancing of Lease Debt ..........................................................................     68

  Section 11.3. Cooperation .................................................................................................     69

SECTION 12. CERTAIN ADJUSTMENTS TO PERIODIC RENT, TERMINATION VALUE AND OTHER AMOUNTS .......................................     69

SECTION 13. TRANSFER OF THE FACILITY LESSEE OWNERSHIP; SPECIAL LESSEE TRANSFERS .............................................     70

  Section 13.1. Transfer of the Facility Lessee Ownership ...................................................................     70

  Section 13.2. Special Facility Lessee Transfers ...........................................................................     72

SECTION 14. OWNER LESSOR'S EXERCISE OF PURCHASE OPTIONS .....................................................................     73
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SECTION 15. MISCELLANEOUS ...................................................................................................     75

  Section 15.1.  Consents; Cooperation ......................................................................................     75

  Section 15.2.  Successor Owner Lessor .....................................................................................     75

  Section 15.3.  Bankruptcy of Lessor Estate ................................................................................     75

  Section 15.4.  Amendments and Waivers .....................................................................................     75

  Section 15.5.  Notices ....................................................................................................     75

  Section 15.6.  Survival ...................................................................................................     80

  Section 15.7.  Successors and Assigns .....................................................................................     80

  Section 15.8.  Business Day ...............................................................................................     80

  Section 15.9.  Governing Law ..............................................................................................     80

  Section 15.10. Severability ...............................................................................................     80

  Section 15.11. Counterparts ...............................................................................................     80

  Section 15.12. Headings and Table of Contents .............................................................................     81

  Section 15.13. Limitation of Liability ....................................................................................     81

  Section 15.14. Consent to Jurisdiction; Waiver of Trial by Jury; Process Agent ............................................     82

  Section 15.15. Further Assurances .........................................................................................     83

  Section 15.16. Effectiveness ..............................................................................................     83

  Section 15.17. Measuring Life .............................................................................................     83

  Section 15.18. No Partnership, Etc ........................................................................................     83

  Section 15.19. Entire Agreement ...........................................................................................     83

  Section 15.20. Public Utility Regulation ..................................................................................     84

  Section 15.21. Confidentiality of Information .............................................................................     84

  Section 15.22. Reliance ...................................................................................................     85

  Section 15.23. Amendments, Etc ............................................................................................     85
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<PAGE>
APPENDICES:

     Appendix A   Definitions and Rules of Interpretation

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SCHEDULES:

  Schedule 1-A              Equity Investment
  Schedule 1-B              Indenture Trustee's Account
  Schedule 1-C              Owner Participant's Account
  Schedule 2                Pricing Assumptions
  Schedule 3.1(h)           Post-FILOT Lease Recordings, Filings and Notifications
  Schedule 3.1(m)           Environmental Matters - Hazardous Substances
  Schedule 4.20             Recording and Filings
  Schedule 5.31             Maintenance of Insurance

EXHIBITS:

  Exhibit A                 Description of Facility
  Exhibit B                 Form of Assignment Agreement (BR-4)
  Exhibit C                 Form of Facility Lease Agreement
  Exhibit D                 Form of Facility Site Lease
  Exhibit E                 Intentionally Omitted
  Exhibit F                 Form of Pass Through Trust Agreement
  Exhibit G                 Form of OP Parent Guaranty
  Exhibit H                 Form of Calpine Guaranty
  Exhibit I                 Form of Collateral Trust Indenture
  Exhibit J                 Form of OP Assignment and Assumption Agreement
  Exhibit K                 List of Competitors
  Exhibit L                 Form of Guarantor Assignment and Assumption Agreement
  Exhibit M                 Form of Springing Facility Site Lease
  Exhibit N                 Form of Springing Facility Site Sublease
  Exhibit O                 Forms of Consents
</TABLE>

                                      vii
<PAGE>
                            PARTICIPATION AGREEMENT

          This PARTICIPATION AGREEMENT, dated as of October 18, 2001 (as
     amended, supplemented or otherwise modified from time to time, in
     accordance with the provisions hereof, this "Participation Agreement" or
     this "Agreement"), among (i) BROAD RIVER ENERGY LLC (herein, together
     with its successors and permitted assigns, called the "Facility Lessee"),
     a limited liability company organized under the laws of the State of
     Delaware, (ii) CALPINE CORPORATION, a Delaware corporation, as Guarantor
     (together with its successors and permitted assigns, the "Guarantor")
     under the Calpine Guaranty (BR-4), (the "Calpine Guaranty"), (iii) BROAD
     RIVER OL-4, LLC, a Delaware limited liability company (the "Owner
     Lessor"), (iv) SBR OP-4, LLC, a Delaware limited liability company
     (herein, together with its successors and permitted assigns, called the
     "Owner Participant"), (v) STATE STREET BANK AND TRUST COMPANY OF
     CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
     organized and existing under the laws of the United States, not in its
     individual capacity, except as expressly provided herein, but solely as
     trustee under the Collateral Trust Indenture (herein in its capacity as
     trustee under the Collateral Trust Indenture, together with its
     successors and permitted assigns, called the "Indenture Trustee", and
     herein in its individual capacity, together with its successors and
     permitted assigns, called the "Lease Indenture Company"), (vi) STATE
     STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
     national banking association organized and existing under the laws of the
     United States, not in its individual capacity, except as expressly
     provided herein, but solely as trustee under each of the Pass Through
     Trust Agreements (herein in its capacity as trustee under the Pass
     Through Trust Agreements, the "Pass Through Trustees", and herein in its
     individual capacity, together with its successors and permitted assigns,
     the "Pass Through Company"), and (vii) WELLS FARGO BANK NORTHWEST,
     NATIONAL ASSOCIATION, a national banking association organized and
     existing under the laws of the United States, not in its individual
     capacity except as expressly provided herein, but solely as independent
     manager under the LLC Agreement (herein in its capacity as independent
     manager under the LLC Agreement, together with its successors and
     permitted assigns, called the "Lessor Manager", and herein in its
     individual capacity, together with its successors and permitted assigns,
     called the "Trust Company").

                                  WITNESSETH:

          WHEREAS, in March, 2000, the County and the Facility Lessee
entered into a fee-in-lieu of taxes transaction, pursuant to which the Facility
Lessee conveyed to the County, and the County leased back to the Facility
Lessee, pursuant to the FILOT Lease, a 850 MW gas-fired simple cycle merchant
power plant located near Gaffney, South Carolina, owned by the County and more
fully described in Exhibit A hereto ("Facility");
<PAGE>
          WHEREAS, Facility Lessee desires to assign and transfer to the
Owner Lessor the Undivided Interest and the Ground Interest pursuant to the
Assignment Agreement;

          WHEREAS, the Owner Participant desires to cause the Owner
Lessor to acquire and accept such assignment and transfer of the Undivided
Interest and the Ground Interest from the Facility Lessee pursuant to the
Assignment Agreement, and to lease the Undivided Interest (excluding the
Facility Purchase Option) and the Ground Interest (excluding the Land Purchase
Option) to the Facility Lessee pursuant to the Facility Lease and the Facility
Site Lease, respectively;

          WHEREAS, the Facility Lessee desires to sublease the Undivided
Interest (excluding the Facility Purchase Option) and lease the Ground Interest
(excluding the Land Purchase Option) from the Owner Lessor pursuant to the
Facility Lease and the Facility Site Lease, respectively;

          WHEREAS, on the Closing Date, the Facility Lessee has executed
(i) a Springing Facility Site Lease (pursuant to which, upon the Post-FILOT
Lease Conversion Date, the Springing Facility Site Lease shall become effective
and the Facility Lessee shall lease the Ground Interest to the Owner Lessor
pursuant thereto) and (ii) a Springing Facility Site Sublease (pursuant to
which, upon the Post-FILOT Lease Conversion Date, the Springing Facility Site
Sublease shall become effective and the Owner Lessor shall sublease the Ground
Interest back to the Facility Lessee pursuant thereto);

          WHEREAS, the Owner Participant has entered into the LLC
Agreement, pursuant to which the Owner Participant has authorized the Owner
Lessor to, among other things and subject to the terms and conditions thereof
and hereof, issue the Lessor Notes and sell such Lessor Notes to the relevant
Pass Through Trust, acquire and accept such assignment and transfer of the
Undivided Interest and the Ground Interest from Facility Lessee pursuant to the
Assignment Agreement, and lease the Undivided Interest (excluding the Land
Purchase Option) and the Ground Interest (excluding the Facility Purchase
Option) to the Facility Lessee pursuant to the Facility Lease and the Facility
Site Lease, respectively;

          WHEREAS, in order to provide a portion of the Assumption Price
payable by the Owner Lessor in respect of its acquisition of the Undivided
Interest pursuant to the Assignment Agreement, the Owner Participant is willing
to make an investment in the Owner Lessor in an amount equal to the Equity
Investment, all in the manner and subject to the conditions set forth herein;

     WHEREAS, on the Closing Date, the Owner Lessor intends to sell the Lessor
Notes to the relevant Pass Through Trust and to grant to the Indenture Trustee
liens and security interests in the Indenture Estate to secure its obligations
thereunder;

     WHEREAS, concurrently with the execution and delivery of this
Participation Agreement, each Pass Through Trustee has entered into a Pass
Through Trust Agreement, pursuant to which such Pass Through Trustee has been
directed to use the Proceeds to purchase the Lessor Notes from the Owner Lessor
on the Closing Date;

                                      2
<PAGE>
          WHEREAS, concurrently with the execution and delivery of this
Participation Agreement, the Facility Lessee has entered into the Certificate
Purchase Agreement with the Initial Purchasers and the Pass Through Trusts
pursuant to which the Initial Purchasers will purchase the Certificates on the
Closing Date from the Pass Through Trusts;

          WHEREAS, concurrently with the execution and delivery of this
Participation Agreement, the OP Guarantor has executed and delivered the OP
Parent Guaranty pursuant to which the OP Guarantor guarantees the payment and
performance obligations of the Owner Participant under the Operative Documents;

          WHEREAS, pursuant to the Calpine Guaranty, Calpine has
guaranteed all of the obligations of the Facility Lessee under the Participation
Agreement and as of the Closing Date shall guarantee all of the obligations of
the Facility Lessee under the other Operative Documents to which the Facility
Lessee is a party; and

          WHEREAS, the parties hereto desire to consummate the transactions
contemplated hereby.

          NOW, THEREFORE, in consideration of the foregoing premises,
the mutual agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

DEFINITIONS; INTERPRETATION OF THIS PARTICIPATION AGREEMENT

          The capitalized terms used in this Participation Agreement,
including the foregoing recitals, and not otherwise defined herein shall have
the respective meanings specified in Appendix A hereto. The rules of
interpretation set forth in Appendix A shall apply to terms used in this
Participation Agreement and specifically defined herein.

PARTICIPATION; CLOSING DATE; TRANSACTION COSTS

Agreements to Participate. Subject to the terms and conditions of this
Agreement, and in reliance on the agreements, representations and warranties
made herein, the parties agree to participate in the transactions described in
this Section 2.1 on the Closing Date as follows:

the Owner Participant agrees to provide funds in an amount sufficient to (i)
     fund the Equity Investment and (ii) pay the Transaction Costs which the
     Owner Lessor is responsible to pay pursuant to Section 2.3(a) hereof
     (collectively, the "Owner Participant's Commitment");

the Facility Lessee shall assign and transfer the Undivided Interest and the
     Ground Interest to the Owner Lessor on the terms and conditions set forth
     in the Assignment Agreement and the Owner Lessor agrees to acquire and
     accept such assignment and transfer of the Undivided Interest and the
     Ground Interest from Facility Lessee, and each agrees to execute and
     deliver the Assignment Agreement;

the Owner Lessor agrees to lease the Undivided Interest (except the Facility
     Purchase Option) and the Ground Interest (except the Land Purchase Option)
     to the Facility Lessee on the terms and conditions set forth in the
     Facility Lease and Facility Site Lease; the Facility

                                      3
<PAGE>
     Lessee agrees to lease the Undivided Interest (except the Facility
     Purchase Option) and the corresponding Ground Interest (except the Land
     Purchase Option) from the Owner Lessor, and each agrees to execute and
     deliver the respective Facility Lease and the Facility Site Lease;

the Indenture Trustee agrees to act as the trustee under and enter into the
     Collateral Trust Indenture pursuant to which the Lessor Notes will be
     issued;

the Pass Through Trustees agree to use the Proceeds from the sale of the
     Certificates by the Pass Through Trusts to purchase the Lessor Notes from
     the Owner Lessor;

the Owner Lessor agrees to sell to the relevant Pass Through Trusts the
     applicable Lessor Notes and to grant to the Indenture Trustee, for the
     benefit of the Pass Through Trustees, certain liens and security interests
     in the Indenture Estate to secure its obligations thereunder;

the OP Guarantor will guarantee the performance and payment obligations of the
     Owner Participant under the Operative Documents and the FILOT Lease
     pursuant to the OP Parent Guaranty;

the Owner Lessor agrees to use the funds received from the Owner Participant
     and the Pass Through Trusts pursuant to clause (a)(i) and (e),
     respectively, of this Section 2.1 on the Closing Date to pay the Purchase
     Price;

the Owner Participant and the Facility Lessee agree to enter into the Tax
     Indemnity Agreement;

effective upon the occurrence of the Post-FILOT Lease Conversion Date, the
     Facility Lessee agrees to lease the Ground Interest to the Owner Lessor on
     the terms and conditions set forth in the Springing Facility Site Lease and
     the Owner Lessor agrees to sublease the Ground Interest back to the
     Facility Lessee on the terms and conditions set forth in the Springing
     Facility Site Sublease;

the Owner Lessor agrees to exercise the Purchase Options pursuant to, and to the
     extent provided in, Section 14.1 hereof; and

the parties agree to enter into the agreements referred to above and the other
     Operative Documents, and to cause each Affiliate thereof that is not a
     party hereto but is a party to an Operative Document to enter into such
     Operative Document, as the case may be (in each case, if attached as an
     Exhibit hereto, in substantially the form attached hereto).

Closing Date; Procedure for Participation.

Closing Date. The closing of the transactions contemplated hereby (the
     "Closing") shall take place after 10:00 a.m., New York City time, on the
     Scheduled Closing Date or such other date as the parties hereto shall
     mutually agree (the "Closing Date"), at the offices of Dewey Ballantine LLP
     or at such other place as the parties hereto shall mutually agree.

Procedures for Funding. Unless the Closing Date shall have been postponed
     pursuant to Section 2.2(c), subject to the terms and conditions of this
     Participation Agreement, the Owner

                                      4
<PAGE>
     Participant shall make the Owner Participant's Commitment available not
     later than 10:00 a.m., New York City time, on the Scheduled Closing Date,
     by transferring or delivering such amount, in funds immediately available
     on such Scheduled Closing Date, to the Owner Lessor in New York, New York.

Postponement of the Closing. The Scheduled Closing Date may be postponed from
     time to time for any reason if the Facility Lessee gives the Owner
     Participant, the Owner Lessor, the Indenture Trustee and the Pass Through
     Trustees a facsimile or telephonic (confirmed in writing) notice of such
     postponement and notice of the date to which the Closing has been
     postponed, such notice of postponement to be received by each party no
     later than noon, New York City time, on the Scheduled Closing Date. If,
     prior to receipt of a postponement notice under this Section 2.2(c), the
     Owner Participant shall have provided funds in accordance with Section
     2.2(b), such funds shall be returned to the Owner Participant, as soon as
     reasonably practicable but in no event later than the Business Day
     following the date of such notice, unless the Owner Participant shall have
     otherwise directed. All funds made available pursuant to Section 2.2(b)
     will be held by the Owner Lessor in trust for the Owner Participant and
     shall not be part of the Indenture Estate or the Lessor Estate, shall be
     invested by the Owner Lessor in accordance with clause (d) below and such
     funds shall remain the sole property of the Owner Participant unless and
     until released by the Owner Participant and made available to the Owner
     Lessor and applied to pay the Purchase Price or Transaction Costs or
     returned to the Owner Participant, as provided in this Agreement.

Investment of Funds. If, on the Scheduled Closing Date, the Owner Participant
     has made the Owner Participant's Commitment available to the Owner Lessor
     in accordance with Section 2.2(b), the Closing does not occur on such date
     and the Owner Lessor is unable to return such funds to the Owner
     Participant on such date, the Owner Lessor shall, subject to Section 2.2(c)
     above, use reasonable efforts to invest such funds from time to time at the
     written direction of Calpine, and at Calpine's sole expense and risk, in
     Permitted Investments until such funds can be returned to the Owner
     Participant. If, on the Scheduled Closing Date, the Owner Participant has
     made the Owner Participant's Commitment available to the Owner Lessor in
     accordance with Section 2.2(b), the Closing does not occur on such date and
     the Owner Lessor has not returned such funds to the Owner Participant on or
     before 1:00 p.m., New York City time, on such date, then Calpine shall
     reimburse the Owner Participant for loss of the use of such funds at the
     Applicable Rate for each day, from and including the day that such funds
     were made available to the Owner Lessor by the Owner Participant to, but
     excluding the earlier of (i) the day that such funds have been returned to
     the Owner Participant pursuant to Section 2.2(c) (funds received by the
     Owner Participant after 1:00 p.m., New York City time, of any day shall be
     deemed to be returned on the next succeeding Business Day) and (ii) the
     Closing Date. Subject to payment for the account of the Owner Participant
     of any reimbursement for loss of use of funds due to it at the Applicable
     Rate, any net gain realized on the investment of such funds (including
     interest) shall be paid to Calpine by the Owner Lessor on the earlier of
     (i) the date such funds are returned to the Owner Participant pursuant to
     Section 2.2(c) and (ii) the Closing Date. The Owner Lessor shall not be
     liable for any interest on or loss resulting from such investments and, if
     such funds are made available to the Owner Lessor and utilized to pay the
     Purchase Price or Transaction Costs on the Closing Date, Calpine shall
     reimburse the Owner Lessor for any net loss realized on the investment of
     such funds. If such funds are not so utilized, Calpine shall, in

                                      5
<PAGE>
     addition to its obligation to reimburse the Owner Participant for loss of
     use as provided above, reimburse the Owner Participant on the date such
     funds are returned to the Owner Participant for any net loss realized on
     the investment of such funds. In order to obtain funds for payment of the
     Purchase Price or Transaction Costs or to return funds made available to
     the Owner Lessor by the Owner Participant, the Owner Lessor is authorized
     to sell any investments or obligations purchased as aforesaid.

Expiration of Commitments. The obligation of the Owner Participant to make
     its Equity Investment shall expire at 5:00 p.m., New York City time, on
     December 31, 2001. If the Closing Date has not occurred on or before
     December 31, 2001 the Transaction Parties shall have no obligation to
     consummate the transactions contemplated under this Agreement and, except
     as provided in Sections 2.3, 9.1 and 9.2, all obligations of the
     Transaction Parties shall cease and terminate.

Transaction Costs.

If the transactions contemplated by this Agreement are consummated, all
     Transaction Costs up to an amount equal to US$1,500,000, which shall be
     substantiated or otherwise supported in reasonable detail (provided that
     legal bills may be redacted to preserve attorney-client privilege), shall
     be paid within 10 days after the Closing Date by the Owner Lessor (with
     funds provided by the Owner Participant), assuming all invoices have been
     approved by Calpine and received by the Owner Lessor by 7 days after the
     Closing Date. All other Transaction Costs, fees, costs and expenses
     incurred by the Facility Lessee, the Owner Lessor and the Owner Participant
     shall be paid by Calpine. If the Overall Transaction is not consummated for
     any reason (including as a result of the Facility Lessee terminating this
     Agreement pursuant to Section 12(a)), then Calpine shall bear all
     Transaction Costs; provided, however, that Calpine shall not be obligated
     to pay Transaction Costs incurred by the Owner Participant if the Overall
     Transaction is not consummated on the basis of the provisions of this
     Agreement due to a failure of the Owner Participant to satisfy any
     condition to the Closing required to be satisfied by the Owner Participant.

Following the Closing Date, the Facility Lessee will be responsible for, and
     will pay as Supplemental Rent on an After-Tax Basis to the Owner
     Participant, the annual administration fees, if any, and expenses
     (including reasonable and documented fees and expenses of its outside
     counsel) of the Lessor Manager, the Indenture Trustee (as such and in its
     individual capacity) and the Pass Through Trustees.

REPRESENTATIONS AND WARRANTIES

Representations and Warranties of the Facility Lessee. The Facility Lessee
represents and warrants that as of the date of execution and delivery hereof and
as of the Closing Date:

Due Incorporation, etc. The Facility Lessee is a limited liability company
     duly organized, validly existing, and in good standing under the laws of
     the State of Delaware. The Facility Lessee is duly licensed or qualified
     and in good standing in each jurisdiction where the character of its
     properties or the nature of its activities makes such qualification
     necessary, and the Facility Lessee has the power and authority to (x) own
     or hold under lease the

                                      6
<PAGE>
     property it purports to own or hold under lease, (y) carry
     on its business as now being conducted and as presently proposed to be
     conducted and (z) take all actions as may be necessary to consummate the
     transactions contemplated hereunder and under the other Operative Documents
     to which each is a party. The Facility Lessee is an indirect wholly-owned
     subsidiary of Calpine.

Authorization; Enforceability, etc. This Agreement and each of the other
     Operative Documents to which the Facility Lessee is or will be a party have
     been, or when executed and delivered will be, duly authorized, executed and
     delivered by all necessary action by the Facility Lessee, and, assuming the
     due authorization, execution and delivery by each other party thereto, this
     Agreement constitutes and, when executed and delivered, the other Operative
     Documents to which the Facility Lessee is or will be a party will
     constitute the legal, valid and binding obligations of the Facility Lessee,
     enforceable against the Facility Lessee, in accordance with their
     respective terms, except as the same may be limited by applicable
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     affecting the rights of creditors generally and by general principles of
     equity.

          1.   Non-Contravention.   (1) The execution, delivery and performance
               by the Facility Lessee of this Agreement and each of the other
               Operative Documents to which it is or will be a party, the
               consummation by the Facility Lessee of the transactions
               contemplated hereby and thereby, and compliance by the Facility
               Lessee with the terms and provisions hereof and thereof, do not
               and will not (i) contravene any Applicable Law binding on the
               Facility Lessee or its property, or its organizational
               documents, (ii) constitute a default by the Facility Lessee
               under, or result in the creation of any Lien upon the property
               of the Facility Lessee (other than pursuant to any Operative
               Document) under any indenture, mortgage or other material
               contract, agreement or instrument to which the Facility Lessee
               is a party or by which the Facility Lessee or any of its
               property is bound, (iii) contravene any Organic Document of the
               Facility Lessee or (iv) require the consent or approval of any
               Person which has not already been obtained, in each case with
               respect to clauses (i), (ii) and (iv) above, which would
               reasonably be expected to have a Material Adverse Effect.

          (2)  Neither the assignment and transfer of the Undivided
Interest and the Ground Interest by Facility Lessee to the Owner Lessor, nor the
grant by the Owner Lessor to the Indenture Trustee of the Liens and security
interests in the Undivided Interest, the Ground Interest and the applicable
Operative Documents executed in connection therewith to secure its obligations
thereunder does or will constitute a default by the Facility Lessee or the Owner
Lessors under the Ownership and Operation Agreement.

Government Actions. The Facility Lessee has all Permits with or from any
     Governmental Entity or under any Applicable Law required (x) for the due
     execution, delivery or performance by the Facility Lessee of this
     Agreement, and the other Operative Documents to which the Facility Lessee
     is or will be a party or (y) without regard to any other transactions or
     other actions of the Owner Participant, the Owner Lessor or any Affiliate
     of any of them or any assignee or transferee of any of the Owner
     Participant, the Owner Lessor (or any Affiliate of

                                      7
<PAGE>
     any transferee or assignee) and assuming that none of the Owner
     Participant, the Owner Lessor or any Affiliate of any of them or any
     assignee or transferee of any of the Owner Participant (or any Affiliate
     of any such transferee or assignee) is an "electric utility" or a "public
     utility" or a "public utility holding company" or any similar entity
     subject to public utility regulation under any Applicable Law immediately
     prior to the Closing, with respect to the participation by the Owner
     Participant, the Owner Lessor in the Overall Transaction, other than (i)
     any Permit where the failure to obtain or maintain such Permit would not
     be reasonably likely to result in a Material Adverse Effect, (ii) the
     FERC Orders, (iii) as may be required under Applicable Law providing for
     the supervision or regulation of the Owner Participant, the Owner Lessor
     or any Affiliate of any of them as a result of investing, lending or
     other commercial activity in which the Owner Participant, the Owner
     Lessor or any Affiliate of any of them is or may be engaged other than
     the transactions contemplated hereby or by any of the other Operative
     Documents, (iv) as may be required under existing Applicable Laws to be
     obtained, given, accomplished or renewed at any time, or from time to
     time, in each case, after the Closing Date and which the Facility Lessee
     has no reason to believe will not be timely obtained and the lack of
     which would not reasonably be expected to have a Material Adverse Effect
     or involve any danger of criminal or material civil liability being
     incurred by the Owner Participant, the Owner Lessor, the Indenture
     Trustee or the Pass Through Trustees, (v) in connection with any
     modification to or rebuilding or replacement of the Facility or any
     portion thereof that may occur in the future, (vi) as may be required in
     connection with any refinancing of the Lessor Notes or the Certificates
     or the issuance of Additional Lessor Notes or Additional Certificates,
     (vii) as may be required in consequence of any transfer of the Member
     Interest or any transfer of the Undivided Interest or the Owner Lessor's
     Interest, or any part thereof by the Owner Lessor or the exercise by any
     such party of dispossessory remedies under the Operative Documents or any
     relinquishment of the use or operation of the Facility by the Facility
     Lessee, (viii) appropriate filing and recording to perfect the Lien of
     the Collateral Trust Indenture, if required, and the ownership and
     leasehold interests conveyed pursuant to this Agreement, or (ix) as may
     be required under any Applicable Law enacted or adopted after the date
     hereof.

Litigation. There is no pending or, to the Actual Knowledge of the Facility
     Lessee, threatened, action, suit, investigation or proceeding against the
     Facility Lessee or any other Calpine Party before any Governmental Entity
     which (i) questions the validity of the Operative Documents and the FILOT
     Lease or the ability of the Facility Lessee or such other Calpine Party to
     perform its obligations under the Operative Documents and the FILOT Lease
     to which the Facility Lessee or such other Calpine Party is or will be a
     party or (ii) if determined adversely to it, could reasonably be expected
     to have a Material Adverse Effect or otherwise materially adversely affect
     the Undivided Interest leased by the Facility Lessee.

No Defaults. Neither the Facility Lessee nor any other Calpine Party is in
     default, and no condition exists that with notice or lapse of time or both
     would constitute a default, under any mortgage, indenture or other
     contract, agreement or instrument to which the Facility Lessee or such
     other Calpine Party is a party or by which the Facility Lessee or such
     other Calpine Party or its property is bound in any such case where any
     such default, individually or in the aggregate, would reasonably be
     expected to have a Material Adverse Effect.

                                      8
<PAGE>
Location of Chief Executive Office and Principal Place of Business, etc.   (1)
     The chief executive office and principal place of business of the Facility
     Lessee and the office where the Facility Lessee keeps its company records
     concerning the Facility, the Undivided Interest, the Ground Interest, the
     Facility Site and the Operative Documents is located at: c/o Calpine
     Corporation, 50 West San Fernando Street, 5th Floor, San Jose, CA 95113.

          (2)  The Facility is located on the Facility Site.

          (3)  The condition of the Facility is substantially identical
to the condition it was in when inspected by the Appraiser in connection with
the Closing Appraisal.

Leasehold Interest; Liens.   (1) On and before the Closing Date, the Facility
     Lessee has (i) good and valid leasehold interest to the Facility, free and
     clear of all Liens other than Permitted Closing Date Liens, and (ii) good
     and valid leasehold interest to the Facility Site free and clear of all
     Liens other than Permitted Closing Date Liens.

          (2) Upon execution and delivery of the Operative Documents (other than
the Springing Operative Documents), and recording or filing (as appropriate) of
the instruments and documents referred to in Part I of Schedule 4.20 in
accordance with Section 4.20, (A) good and valid leasehold interest to the
Undivided Interest will be duly, validly and effectively conveyed and
transferred to the Owner Lessor free and clear of all Liens other than Permitted
Closing Date Liens, and (B) good and valid leasehold interest in the Ground
Interest will be duly, validly and effectively granted to the Owner Lessor upon
the terms and conditions in the corresponding Facility Site Lease, free and
clear of all Liens other than Permitted Closing Date Liens.

          (3)  Upon the closing of the conveyance of the Land and the
Facility (in each case to the extent of the Owner Lessor's Percentage interest
therein) on the Post-FILOT Lease Conversion Date and recording or filing (as
appropriate) of the instruments and documents referred to in Schedule 3.1(h)
hereto (A) good and valid fee title to the Facility (to the extent of the Owner
Lessor's Percentage interest therein) will be duly, validly and effectively
conveyed and transferred to the Owner Lessor free and clear of all Liens other
than Permitted Liens, and (B) good and valid leasehold interest in the Land (to
the extent of the Owner Lessor's Percentage) will be duly, validly and
effectively granted to the Owner Lessor upon the terms and conditions in the
corresponding Springing Facility Site Lease, free and clear of all Liens other
than Permitted Liens. Upon any other conveyance of the Facility and/or the Land
(to the extent of the Owner Lessor's Percentage) by the County to the Owner
Lessor or its designee upon the Owner Lessor's exercise of the Facility Purchase
Option and/or the Land Purchase Option, as the case may be, good and valid fee
title ownership thereof will be duly, validly and effectively vested in the
Owner Lessor, free and clear of all Liens other than Permitted Liens.

          (4)  When duly authorized, executed and delivered by each of
the parties thereto, the Collateral Trust Indenture will create a valid and,
when the filings and recordings to be made pursuant to Section 4.20 have been
made, first priority perfected Lien in favor of the Indenture Trustee in the
Indenture Estate and no filing, recording, registration or notice with, or
payment of any fees to, any federal or state Governmental Entity will be
necessary to establish or, except for such filings and recordings as will be
made pursuant to Section 4.20, to perfect, or

                                      9
<PAGE>
give record notice of, the Lien in favor of the Indenture Trustee in the
Indenture Estate to the extent such Lien may be perfected by filings or
recordings.

          (5)  None of the Permitted Encumbrances will, on and after the
Closing, interfere with the use, operation or possession of the Facility (as
contemplated by the Operative Documents and the FILOT Lease) or the use of or
the exercise by the Owner Lessor of its rights under Assignment Agreement or the
Facility Site Lease or the Facility Lease, in a manner which could reasonably be
expected to have a Material Adverse Effect.

Regulation U, etc. No Calpine Party is engaged principally, or as one of its
     principal activities, in the business of extending credit for the purpose
     of purchasing or carrying margin stock (as defined in Regulations T, U or X
     of the Federal Reserve Board), and no part of the proceeds of Lessor Notes
     or the Equity Investment will be used by any Calpine Party, directly or
     indirectly, for the purpose of buying or carrying any margin stock within
     the meaning of Regulation U of the Board of Governors of the Federal
     Reserve System (12 CFR 221), or for the purpose of buying or carrying or
     trading in any securities under such circumstances as to involve such
     Person in a violation of Regulation X of said Board (12 CFR 224) or to
     involve any broker or dealer in a violation of Regulation T of said Board
     (12 CFR 220).

Holding Company Act. The Facility Lessee is not an "electric utility
     company," a "holding company", a "subsidiary company" of a "holding
     company" or an "affiliate" of a "holding company" within the meaning of the
     Holding Company Act, and the execution, delivery and performance of the
     Operative Documents to which the Facility Lessee is or will be a party and
     the performance of the FILOT Lease will not subject the Facility Lessee to
     such regulation under the Holding Company Act and do not violate any
     provision of the Holding Company Act or any rule or regulation thereunder.

Investment Company Act. The Facility Lessee is not an "investment company"
     or a company controlled by an "investment company" within the meaning of
     the Investment Company Act of 1940.

Securities Act. Neither the Facility Lessee nor anyone authorized by it has
     directly or indirectly offered or sold any interest in the Member Interest,
     the Lessor Notes or the Certificates or any part thereof, or in any similar
     security or lease, or in any security or lease the offering of which for
     the purposes of the Securities Act would be deemed to be part of the same
     offering as the offering of the Member Interest, the Lessor Notes or the
     Certificates or any part thereof or solicited any offer to acquire any of
     the same, in any such case, in violation of the registration requirements
     of Section 5 of the Securities Act.

Environmental Matters. Except as set forth in Schedule 3.1(m):

          (1)  The Facility Lessee has not received and does not have
Actual Knowledge of any written notice, letter, citation, order, warning,
complaint, inquiry, claim or demand from any Governmental Entity or any other
Person that: (i) there has been a Release, or there is a threat of Release, of
Hazardous Substances in, on, under or from the Facility or the Facility Site;
(ii) the Facility Lessee or any other Calpine Party is or is asserted to be
liable, in whole or in part, for the costs of cleaning up, remedying or
responding at any location (including any location at

                                      10
<PAGE>
which any Hazardous Substances have been generated, stored, treated or disposed
by or on behalf of the Facility Lessee or such other Calpine Party) to a
Release or threatened Release of any Hazardous Substance generated, used or
stored at or Released in, on, under or from the Facility or the Facility Site;
(iii) the Facility or the Facility Site is subject to a Lien in favor of any
Governmental Entity in response to a Release or threatened Release of Hazardous
Substances or (iv) the Facility or the Facility Site is or is asserted to be in
violation of or not in compliance with any Environmental Law, in any case with
respect to clauses (ii), (iii) or (iv), which could reasonably be expected to
have a Material Adverse Effect;

          (2)  The Facility Lessee and the other Calpine Parties are in
compliance with and have complied with all Environmental Laws, except to the
extent that failure to so comply could not reasonably be expected to have a
Material Adverse Effect; and

          (3)  To the Facility Lessee's Actual Knowledge, there is not
and has not been any Environmental Condition (A) at, on, under or from the
Facility or the Facility Site, or (B) at, on, under or from any other location
resulting from or arising in connection with the operation by any Person of the
Facility or the Facility Site, that in each case could reasonably be expected to
have a Material Adverse Effect or involve any danger of (i) foreclosure, sale,
forfeiture or loss of, or imposition of a material lien on, such Facility or the
Facility Site, (ii) the impairment of the ownership (or leasehold or easement
interest in), use, operation or, maintenance of the Facility or Facility Site in
any material respect, or (iii) any criminal or material civil liability being
incurred by the Owner Participant, the Owner Lessor, the Lessor Manager, the
Indenture Trustee or the Pass Through Trustees.

          (4)  All environmental permits necessary to own, operate, lease
or maintain the Facility and the Facility Site in accordance with the Operative
Documents and the FILOT Lease and the Ownership and Operation Agreement and
Environmental Laws have been obtained on behalf of the Owner Lessor or by the
Facility Lessee and they are final, in proper form, and in full force and
effect, with all appeal periods expired, and the Facility Lessee is in
compliance with the provisions of all such permits, except where the failure to
obtain, maintain the effectiveness of, or comply with such permits would not
reasonably be expected to have a Material Adverse Effect or involve any danger
of (i) foreclosure, sale, forfeiture or loss of, or imposition of a material
lien on, the Facility or the Facility Site, (ii) the impairment of the ownership
(or leasehold or easement interest in), use, operation or maintenance of the
Facility or the Facility Site in any material respect, or (iii) any criminal or
material civil liability being incurred by the Owner Participant, the Owner
Lessor, the Indenture Trustee, the Lessor Manager, the Pass Through Trustees or
the Certificateholders.

Operation and Use. Assuming the Facility will continue to be operated
     substantially as operated as of the Closing Date, the rights and interests
     to be possessed on the Closing Date by the Facility Lessee with respect to
     the Undivided Interest and the Ground Interest and based upon the Facility
     Lessee's reasonable expectations and on Applicable Law in effect on and as
     of the Closing Date, the rights and interests made available to the Owner
     Lessor pursuant to the Operative Documents and the FILOT Lease and the
     rights contemplated by the Facility Lease to be made available under such
     Operative Documents and the FILOT Lease, permit on a commercially
     practicable basis during the Facility Lease Term and the period following
     the expiration or termination of the Facility Lease Term, as applicable,
     until the end of the

                                      11
<PAGE>
     Facility's useful life as set forth in the Closing Appraisal, (i) the
     location, occupation, interconnection, maintenance and repair of each
     Facility, (ii) the use, operation and possession of the Facility, (iii) as
     of the Closing Date, the use, operation, possession, maintenance,
     replacement, renewal and repair of all Improvements required to be made to
     the Facility, (iv) adequate ingress to and egress from the Facility in
     connection with the ownership, use, operation, possession, maintenance or
     repair of the Facility and (v) the transmission of electricity from the
     Facility substantially in the manner currently transmitted as of the
     Closing Date.

Tax Returns. The Facility Lessee and each other Calpine Party has filed all
     federal, state and local income tax returns which are required to be filed
     by it and has paid all Taxes shown to be due and payable on such returns or
     pursuant to any assessment received by it (other than Taxes and assessments
     the payment of which is being contested in good faith by such Person and
     with respect to which appropriate accounting reserves have to the extent
     required by GAAP been set aside) and neither the Facility Lessee nor any
     other Calpine Party has any Actual Knowledge of any actual or proposed
     assessment in connection therewith which, either in any case or in the
     aggregate, would reasonably be expected to have a Material Adverse Effect.

Jurisdiction. In accordance with Section 15.14 hereof, the Facility Lessee
     has validly submitted to the jurisdiction of the Supreme Court of the
     State of New York, New York County and the United States District Court
     for the Southern District of New York.

Applicable Law. The Facility Lessee is in compliance with all Applicable Law,
     including all applicable zoning, use and building codes, laws, regulations
     and ordinances relating to the operations, maintenance, use, lease or
     ownership of the Facility and the Facility Site, except where the
     noncompliance would not reasonably be expected to have a Material Adverse
     Effect or involve any danger of (i) foreclosure, sale, forfeiture or loss
     of, or imposition of a material lien on, the Facility or the Facility Site,
     (ii) the impairment of the ownership (or leasehold or easement interest
     in), use, operation or maintenance of the Facility or the Facility Site in
     any material respect, or (iii) any criminal or material civil liability
     being incurred by the Owner Participant, the Owner Lessor, the Lessor
     Manager, the Indenture Trustee or the Pass Through Trustees, including
     subjecting the Owner Participant or the Owner Lessor to regulation as a
     public utility under Applicable Law. None of the Calpine Parties is in
     default of any judgments, orders or decrees of any Governmental Entity
     relating to such Facility or the Facility Site.

ERISA. Assuming the accuracy of the representations of the other parties
     hereto and the Certificateholders in the Certificates, the execution and
     delivery of the Operative Documents and the issuance and sale of the Lessor
     Notes under the Collateral Trust Indenture and the Certificates under the
     Pass Through Trust Agreements will be exempt from, or will not involve any
     transaction which is subject to, the prohibitions of either Section 406 of
     ERISA or Section 4975 of the Code and will not involve any transaction in
     connection with which a penalty could be imposed under Section 502(i) of
     ERISA or a tax could be imposed pursuant to Section 4975 of the Code.

                                      12
<PAGE>
Insurance. All insurance required to be obtained pursuant to Schedule 5.31 is
     in full force and effect.

No Default; No Event of Loss; Burdensome Buyout. No Lease Default or Lease
     Event of Default, exists or will exist upon execution and delivery of the
     Operative Documents. No Event of Loss exists or will exist upon the
     execution and delivery of the Operative Documents. To the Actual Knowledge
     of the Facility Lessee, no Burdensome Buyout Event has occurred or will
     occur upon the execution and delivery of the Operative Documents and the
     Facility Lessee does not have Actual Knowledge of any event that could
     reasonably be expected to result in a Burdensome Buyout Event.

Special Assessments. There is no action pending or, to the Facility Lessee's
     Actual Knowledge, threatened by a Governmental Entity or other Person to
     specially assess the Facility or the Facility Site for any public
     improvements constructed or to be constructed which would reasonably be
     expected to have a Material Adverse Effect.

Utility Services. The Facility and the Facility Site have available all
     services of public utilities necessary for use and operation of the
     Facility as currently being used and as contemplated by the applicable
     Operative Documents and the FILOT Lease, except where the failure to have
     any such services or public utilities available would not result in a
     material adverse effect with respect to the Facility.

Eminent Domain. There is no action pending with respect to, or threatened by
     a Governmental Entity or other Person to initiate, a Requisition of any of
     the Undivided Interest, the Facility, the Ground Interest or the Facility
     Site, which would reasonably be expected to have a Material Adverse Effect.

Permitted Liens. There are no violations or proceedings or actions pending or
     threatened, with respect to any easements, reciprocal easement agreements,
     declarations, development agreements or recorded restrictions or covenants
     relating to the Facility or the Facility Site, which would reasonably be
     expected to have a Material Adverse Effect.

Access; Egress. Access to and egress from the Facility and the Facility Site
     is available and provided by public streets and/or private roads fully
     accessible by the Facility Lessee. To the Facility Lessee's Actual
     Knowledge, there are no plans of any Governmental Entity to change the
     highway or road system in the vicinity of the Facility or the Facility
     Site, or to restrict or change access from any such highway or road to the
     Facility or the Facility Site, in either case, in any manner which would
     reasonably be expected to have a Material Adverse Effect.

Notices. To the Facility Lessee's Actual Knowledge, (i) there are no
     outstanding written notices from any Governmental Entity of any violation
     of, or that the Facility or Facility Site is not in compliance with, any
     and all Applicable Laws relating to the Facility and Facility Site or the
     ownership, use, occupancy and operation thereof and (ii) there are no
     outstanding written notices that any repairs or work or capital
     improvements are required to be done at or with respect to the Facility or
     Facility Site by any Governmental Entity or by any insurance company which
     currently issues any insurance to the Facility Lessee or by any board of
     fire

                                      13
<PAGE>
     underwriters or other body exercising similar functions, except, in
     either case with respect to (i) or (ii) above, where such violation,
     noncompliance or repairs could not reasonably be expected to have a
     Material Adverse Effect.

Business. The Facility Lessee has not conducted any business other than the
     acquisition, construction, development, ownership, operation, maintenance,
     leasing and financing of the Facility and Facility Site and activities
     incidental thereto.

Intellectual Property. To the Actual Knowledge of the Facility Lessee, the
     Facility Lessee has the right to use all patents, trademarks, service
     marks, trade names, copyrights, licenses and other rights which are
     necessary for the operation of its business as presently conducted and to
     transfer all such rights to the Owner Lessor subsequent to termination of
     the Facility Lease, except to the extent failure to possess such rights
     would not reasonably be likely to result in a Material Adverse Effect.

Land Not in Flood Zone. No portion of the Facility or the Facility Site
     includes improved real property that is located in an area that has been
     identified by the Director of the Federal Emergency Management Agency as
     an area having special flood hazards and in which flood insurance has been
     made available under the National Flood Insurance Act of 1968, as amended.

No Fraudulent Conveyances. The Facility Lessee is consummating the
     transactions contemplated hereby in good faith and without any intent to
     defraud creditors of the Facility Lessee or subsequent purchasers. The
     execution and delivery of the Operative Documents to which the Facility
     Lessee is a party will not render the Facility Lessee insolvent under GAAP
     or leave the Facility Lessee with assets whose present fair valuation of
     assets is less than the present fair valuation of the Facility Lessee's
     debts. As used in this Section 3.1(dd), "debts" includes any and all
     liabilities, whether matured or unmatured, liquidated or unliquidated,
     absolute, fixed or contingent, and whether or not such liabilities are
     required under GAAP to be shown on the Facility Lessee's balance sheet. The
     execution and delivery of the Operative Documents to which the Facility
     Lessee is a party will not leave it with property remaining in its hands
     which would constitute unreasonably small assets or capital, and the
     Facility Lessee has and, after giving effect to such transactions will
     have, an adequate amount of assets and capital to engage in its business
     now and in the future, based on the actual and anticipated needs for
     capital of the businesses anticipated to be conducted by the Facility
     Lessee, and based upon the other information described herein. After giving
     effect to the transactions contemplated under the Operative Documents, the
     Facility Lessee will be able to pay all of its debts and liabilities,
     including unrecorded contingent liabilities, as they mature, the Facility
     Lessee will have positive cash flow after paying all of its scheduled and
     anticipated debt as it matures, and the Facility Lessee will realize
     sufficient monies from current assets in the ordinary and usual course of
     business to pay recurring current debt, short-term debt and long-term debt
     as such debts mature.

No Additional Fees. Except for the fees referred to in clause (xiv) and (xv)
     of the definition of Transaction Costs, the Facility Lessee has not paid or
     become obligated to pay any fee or commission to any broker, finder or
     intermediary for or on account of arranging the financing of the
     transactions contemplated by the Operative Documents.

                                      14
<PAGE>
Status under Certain Statutes. Neither the Facility Lessee, the Owner
     Participant, the Owner Lessor, the Lessor Manager, the Indenture Trustee,
     the Pass Through Trustees nor any Certificateholder solely as a result of
     execution, delivery and performance and the consummation of the
     transactions contemplated by the Operative Documents and the performance of
     the FILOT Lease shall be or become (i) subject to regulation as a "public
     utility company," "holding company," an "affiliate" of a "holding company"
     or a "subsidiary company" of a "holding company" within the meaning of
     PUHCA or (ii) a "public utility" (except that the Facility Lessee will be a
     public utility subject to the Federal Power Act with authority to sell
     wholesale electricity at market-based rates and with waivers of regulations
     customarily granted to a public utility that sells wholesale power at
     market-based rates), a "transmitting utility," or an "electric utility"
     within the meaning of the Federal Power Act, (iii) subject to state
     regulation of rates or organizational requirements for electric utilities.

Material Omission. Neither the Offering Circular (including any preliminary
     offering circular approved by the Facility Lessee for distribution) nor the
     written information furnished to the Owner Lessor, the Owner Participant,
     the Lessor Manager, the Indenture Trustee and the Pass Through Trustees by
     or on behalf of the Facility Lessee or any of its Affiliates in connection
     with the transactions contemplated hereby contains any untrue statement of
     a material fact or omits to state a material fact necessary in order to
     make the statements contained therein, in light of the circumstances under
     which they were made, not misleading; provided, that no representation or
     warranty is made with regard to (i) any projections or other
     forward-looking statements provided by or on behalf of the Facility Lessee,
     or (ii) the descriptions of the Operative Documents or the tax consequences
     to beneficial owners of Certificates; provided, further, each of the
     Transaction Parties acknowledge and agree that (i) Calpine has heretofore
     provided to the Appraiser, solely in order to assist the Appraiser in
     connection with the preparation of the appraisal to be delivered by the
     Appraiser to certain of the Transaction Parties at the Closing, certain (1)
     general market information, (2) information about the South Carolina energy
     markets and (3) information passed along from other Persons and (ii) that
     the Facility Lessee makes no representation or warranty whatsoever with
     respect to the information described in clause (i) above except to the
     extent expressly set forth in Section 4(b) of the Tax Indemnity Agreement.

Exempt Wholesale Generator. The Facility Lessee is an "exempt wholesale
     generator" under PUHCA. The Facility is interconnected with the high
     voltage network operated by Duke Electric Transmission, a division of Duke
     Energy Corporation, and has access to transmission services and ancillary
     services sufficient to sell the net generating capacity of the Facility at
     wholesale, and the Facility Lessee has the authority to sell wholesale
     electric power from the net generating capacity of such generating Facility
     at market-based rates.

FERC Orders. The Facility Lessee has duly filed with FERC the filings
     referenced in Section 4.8 and, except with respect to the FERC Owner
     Lessor EWG Orders and the FERC Order referenced in clause (v) of the
     definition of "FERC Orders" set forth in Appendix A hereto, received from
     FERC the orders referenced therein.

Fully Taxable. As of the Closing Date, each Person owning an Ownership
     Interest (i) is fully taxable at the highest federal tax rate and (ii)
     expects to be fully taxable at the highest federal tax rate throughout the
     Facility Lease Term; for the avoidance of doubt, this representation is

                                      15
<PAGE>
     not intended to be construed as nor shall it be deemed to be a guaranty as
     to any such Person's future taxation.

Commencement of Commercial Operations and Compliance. To the knowledge of the
     Facility Lessee, the Facility has commenced commercial operations and
     currently is capable of producing at least 850 MW of capacity and complies
     in all material respects with the other specifications set forth in the
     purchase and construction contracts for the Facility.

FILOT Lease. The FILOT Lease is in full force and effect and neither the
     Facility Lease nor, to the Actual Knowledge of the Facility Lessee, the
     County is in default thereunder; all of the rights, title and interest of
     the Facility Lessee, in, to and under the FILOT Lease assigned pursuant to
     the Assignment Agreement have been transferred free and clear of any and
     all Liens other than Permitted Liens. Prior to the execution and delivery
     of the Assignment Agreement by the Facility Lessee, the FILOT Lease was
     enforceable against the Facility Lessee in accordance with its respective
     terms, except as the same may be limited by applicable bankruptcy,
     insolvency, reorganization, moratorium or other similar laws affecting the
     rights of creditors generally and by general principles of equity; the
     execution, delivery and performance of the FILOT Lease by the Facility
     Lessee (i) did not and does not contravene any Applicable Law binding on
     the Facility Lessee or its property, (ii) does not constitute a default by
     the Facility Lessee under, or result in the creation of any Lien upon the
     property of the Facility Lessee (other than pursuant to any Operative
     Document) under any indenture, mortgage or other material contract,
     agreement or instrument to which the Facility Lessee is a party or by which
     the Facility Lessee or any of its property is bound, (iii) does not
     contravene any Organic Document of the Facility Lessee, (iv) does not
     require the consent or approval of any Person which has not already been
     obtained, in each case with respect to clauses (i), (ii) and (iv) above,
     which would reasonably be expected to have a Material Adverse Effect, or
     (v) does not create a Lien on the FILOT Lease; the Facility Lessee has all
     Permits with or from any Governmental Entity or under Applicable Law
     required for the performance of the FILOT Lease by the Owner Lessor or the
     Facility Lessee, other than (i) any Permit where the failure to obtain or
     maintain such Permit would not be reasonably likely to result in a Material
     Adverse Effect, (ii) the FERC Orders, (iii) as may be required under
     Applicable Law providing for the supervision or regulation of the Owner
     Participant, the Owner Lessor or any Affiliate of any of them as a result
     of investing, lending or other commercial activity in which the Owner
     Participant, the Owner Lessor or any Affiliate of any of them is or may be
     engaged other than the transactions contemplated hereby or by performance
     of the FILOT Lease upon and after the assignment thereof to the Owner
     Lessor pursuant to the Assignment Agreement, (iv) as may be required under
     existing Applicable Laws to be obtained, given, accomplished or renewed at
     any time, or from time to time, in each case, after the Closing Date and
     which the Facility Lessee has no reason to believe will not be timely
     obtained and the lack of which would not reasonably be expected to have a
     Material Adverse Effect or involve any danger of criminal or material civil
     liability being incurred by the Owner Participant, the Owner Lessor, the
     Indenture Trustee or the Pass Through Trustees, (v) in connection with any
     modification to or rebuilding or replacement of the Facility or any portion
     thereof that may occur in the future, (vi) as may be required in connection
     with any refinancing of the Lessor Notes or the Certificates or the
     issuance of Additional Lessor Notes or Additional Certificates, (vii) as
     may be required in consequence of any transfer of the Member Interest or
     any transfer of the Undivided Interest or the Owner

                                      16
<PAGE>
     Lessor's Interest, or any part thereof by the Owner Lessor or the exercise
     by any such party of dispossessory remedies under the Operative Documents
     or any relinquishment of the use or operation of the Facility by the
     Facility Lessee, (viii) appropriate filing and recording to perfect the
     Lien of the Collateral Trust Indenture, if required, and the ownership and
     leasehold interests conveyed pursuant to this Agreement, or (ix) as may be
     required under any Applicable Law enacted or adopted after the date hereof.

     B.   Representations and Warranties of the Owner Lessor. The Owner Lessor
represents and warrants that as of the date of execution and delivery hereof and
as of the Closing Date:

Due Organization. The Owner Lessor is a duly organized and validly existing
     limited liability company under the laws of the State of Delaware of which
     the Owner Participant is the sole member, and has the power and authority
     to enter into and perform its obligations under this Agreement and each of
     the other Operative Documents to which it is a party.

Due Authorization, Enforceability; etc.   (1) (i) This Agreement and each of
     the other Operative Documents (other than the Lessor Notes) to which the
     Owner Lessor is or will be a party has been or when executed and delivered
     will be duly authorized, executed and delivered by the Owner Lessor, and
     (ii) assuming the due authorization, execution and delivery of this
     Agreement by each party hereto other than the Owner Lessor, this Agreement
     constitutes and when executed and delivered each of the other Operative
     Documents (other than the Lessor Notes) to which it is or will be a party
     will be the legal, valid and binding obligations of the Owner Lessor,
     enforceable against the Owner Lessor in accordance with its terms, except
     as the same may be limited by applicable bankruptcy, insolvency,
     reorganization, moratorium or other similar laws affecting the rights of
     creditors generally and by general principles of equity.

          (2)  Upon the execution of the Lessor Notes by the Owner Lessor
in accordance with the Collateral Trust Indenture and delivery of such Lessor
Notes against payment therefor, the Lessor Notes will constitute legal, valid
and binding obligations of the Owner Lessor, enforceable against the Owner
Lessor in accordance with their terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the rights of creditors generally and by general principles of
equity.

Non-Contravention. The execution and delivery by the Owner Lessor of this
     Agreement and the other Operative Documents to which it is or will be a
     party, the consummation by the Owner Lessor of the transactions
     contemplated hereby and thereby, and the compliance by the Owner Lessor
     with the terms and provisions hereof and thereof, do not and will not
     contravene any Applicable Law of the United States of America or the State
     of Delaware, or the LLC Agreement or the Owner Lessor's other
     organizational documents or contravene the provisions of, or constitute a
     default by the Owner Lessor under any indenture, mortgage or other material
     contract, agreement or instrument to which the Owner Lessor is a party or
     by which the Owner Lessor or its property is bound, or in the creation of
     any Owner Lessor's Lien; provided, however, that no representation is made
     with respect to the right, power or authority of the Owner Lessor to act as
     operator of the Facility following a Lease Event of Default or the
     expiration or termination of the Facility Lease.

                                      17
<PAGE>
Governmental Actions. Assuming the representations and warranties of the
     Facility Lessee contained in paragraphs (j), (k), (l), (m), (q), (z), (ff)
     and (hh) of Section 3.1 are true, no authorization or approval or other
     action by, and no notice to or filing or registration with, any
     Governmental Entity is required for the due execution, delivery or
     performance by the Owner Lessor, as the case may be, of the LLC Agreement,
     the Collateral Trust Indenture, the Lessor Notes, this Agreement or the
     other Operative Documents to which the Owner Lessor is or will be a party,
     other than any such authorization or approval or other action or notice or
     filing as has been duly obtained, taken or given.

Litigation. There is no pending or, to the Actual Knowledge of the Owner
     Lessor, threatened, action, suit, investigation or proceeding against the
     Owner Lessor before any Governmental Entity which (i) questions the
     validity of the Operative Documents or the FILOT Lease or the ability of
     the Owner Lessor to perform its obligations under the FILOT Lease or the
     Operative Documents to which it is or will be a party or (ii) if determined
     adversely to it, could reasonably be expected to materially adversely
     affect the ability of the Owner Lessor to perform its obligations under
     this Agreement or any other Operative Document to which it is or will be a
     party or would materially adversely affect the Facility, the Facility Site
     or any interest therein or part thereof or the Lien of the Indenture
     Trustee on the Indenture Estate.

Liens. The Owner Lessor's right, title and interest in and to the Lessor
     Estate is free of all Owner Lessor's Liens.

Location of Registered Office; Location of Corporate Records. The registered
     office of the Owner Lessor is 1209 Orange Street, Wilmington, Delaware
     19801, and the Owner Lessor will keep its corporate records concerning the
     Facility, the Facility Site, the Operative Documents and the South Point
     Ground Lease with the Lessor Manager, at the Lessor Manager's address set
     forth in Section 15.5 hereof.

Securities Act. Neither the Owner Lessor nor anyone authorized by it has
     directly or indirectly offered or sold any interest in the Member Interest,
     the Lessor Notes or the Certificates or any part thereof, or in any similar
     security or lease, the offering of which for the purposes of the Securities
     Act would be deemed to be part of the same offering as the offering of the
     Member Interest, the Lessor Notes or the Certificates or any part thereof
     or solicited any offer to acquire any of the same in violation of the
     registration requirements of Section 5 of the Securities Act.

          C.   Representations and Warranties of the Lessor Manager and the
Trust Company. The Trust Company (only with respect to representations and
warranties expressly relating to the Trust Company) and the Lessor Manager
hereby severally represent and warrant that as of the date of execution and
delivery hereof and as of the Closing Date:

Due Organization. The Trust Company is national banking association duly
     organized and validly existing and in good standing under the laws of the
     United States has the corporate power and authority, as Lessor Manager
     and/or in its individual capacity to the extent expressly provided herein
     or in the LLC Agreement, to enter into and perform its obligations under
     the LLC Agreement, this Agreement and each of the other Operative Documents
     to which it is a party.

                                      18
<PAGE>
Due Authorization, Enforceability; etc.   (1) (i) The LLC Agreement has been
     duly authorized, executed and delivered by the Trust Company, and (ii)
     assuming the due authorization, execution and delivery of the LLC
     Agreement by the Owner Participant, the LLC Agreement constitutes the
     legal, valid and binding obligation of the Trust Company, enforceable
     against it in its individual capacity or as Lessor Manager, as the case
     may be, in accordance with its terms, except as may be limited by
     bankruptcy, insolvency, fraudulent conveyance, reorganization,
     arrangement, moratorium or other laws relating to or affecting the rights
     of creditors generally and by general principals of equity.

          (2)  Execution. This Agreement and each of the other Operative
Documents to which the Trust Company or the Lessor Manager is or will be a party
has been or when executed and delivered will be duly authorized, executed and
delivered by the Trust Company or the Lessor Manager, and (ii) assuming the due
authorization, execution and delivery of this Agreement by each party hereto
other than the Trust Company or the Lessor Manager, this Agreement constitutes
and when executed and delivered each of the other Operative Documents to which
it is or will be a party will be the legal, valid and binding obligations of the
Lessor Manager and, to the extent expressly provided herein, the Trust Company,
as the case may be, enforceable against the Lessor Manager and, to the extent
expressly provided herein, the Trust Company, in accordance with its terms,
except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally and by general principles of equity.

Non-Contravention. The execution and delivery by the Trust Company, in its
     individual capacity or as Lessor Manager, as the case may be, of the LLC
     Agreement, this Agreement and the other Operative Documents to which it is
     or will be a party, the consummation by the Trust Company, in its
     individual capacity or as Lessor Manager, as the case may be, of the
     transactions contemplated hereby and thereby, and the compliance by the
     Trust Company, in its individual capacity or as Lessor Manager, as the case
     may be, with the terms and provisions hereof and thereof, do not and will
     not contravene any Applicable Law of the State of Utah governing the Trust
     Company or any United States federal law governing the banking or trust
     powers of the Trust Company, or the LLC Agreement or its organizational
     documents or bylaws or contravene the provisions of, or constitute a
     default by the Trust Company under any indenture, mortgage or other
     material contract, agreement or instrument to which the Trust Company is a
     party or by which the Trust Company or its property is bound, or in the
     creation of any Owner Lessor's Lien; provided, however, that no
     representation is made with respect to the right, power or authority of the
     Trust Company or the Lessor Manager to act as operator of the Facility
     following a Lease Event of Default.

Governmental Actions. Assuming the representations and warranties of the
     Facility Lessee contained in paragraphs (j), (k), (l), (m), (q), (z), (ff)
     and (hh) of Section 3.1 are true, no authorization or approval or other
     action by, and no notice to or filing or registration with, any
     Governmental Entity is required for the due execution, delivery or
     performance by the Trust Company or the Lessor Manager, as the case may be,
     of the LLC Agreement, this Agreement or the other Operative Documents to
     which the Trust Company or the Lessor Manager is or will be a party, other
     than any such authorization or approval or other action or notice or filing
     as has been duly obtained, taken or given.

                                      19
<PAGE>
Litigation. There is no pending or, to the Actual Knowledge of the Trust
     Company, threatened, action, suit, investigation or proceeding against the
     Trust Company either in its individual capacity or as Lessor Manager, as
     the case may be, before any Governmental Entity which (i) questions the
     validity of the Operative Documents or the ability of the Owner Lessor to
     perform its obligations under the Operative Documents to which it is or
     will be a party or (ii) if determined adversely to it, could reasonably be
     expected to materially adversely affect the ability of the Trust Company
     either in its individual capacity or as Lessor Manager, as the case may be,
     to perform its obligations under the LLC Agreement, this Agreement or any
     other Operative Document to which it is or will be a party or would
     materially adversely affect the Facility, the Facility Site or any interest
     therein or part thereof or the Lien of the Indenture Trustee on the
     Indenture Estate.

Liens. The Lessor Estate is free of any Owner Lessor's Liens attributable to
     the Trust Company, in its individual capacity, or the Lessor Manager.

Securities Act. Neither the Trust Company, the Lessor Manager nor anyone
     authorized by either of such Persons has directly or indirectly offered or
     sold any interest in the Member Interest, the Lessor Notes or the
     Certificates or any part thereof, or in any similar security or lease, the
     offering of which, for the purposes of the Securities Act, would be deemed
     to be part of the same offering as the offering of the Member Interest, the
     Lessor Notes or the Certificates or any part thereof or solicited any offer
     to acquire any of the same in violation of the registration of Section 5 of
     the Securities Act.

Representations and Warranties of the Owner Participant. The Owner Participant
represents and warrants that as of the date of execution and delivery hereof and
as of the Closing Date:

Due Organization. The Owner Participant is a limited liability company duly
     organized, validly existing and in good standing under the laws of the
     State of Delaware and has the power and authority to enter into and perform
     its obligations under this Agreement, the LLC Agreement and the Tax
     Indemnity Agreement. The Owner Participant is a direct wholly owned
     subsidiary of Newcourt Capital USA Inc.

Due Authorization, Enforceability; etc. This Agreement, the LLC Agreement and
     the Tax Indemnity Agreement have been or when executed and delivered will
     be duly authorized, executed and delivered by the Owner Participant and
     assuming the due authorization, execution and delivery by each other party
     thereto, this Agreement, the LLC Agreement, the Tax Indemnity Agreement and
     any other Operative Document to which the Owner Participant is or will be a
     party constitute or when executed and delivered will constitute the legal,
     valid and binding obligations of the Owner Participant, enforceable against
     the Owner Participant in accordance with their respective terms, except as
     the same may be limited by applicable bankruptcy, insolvency,
     reorganization, moratorium or other similar laws affecting the rights of
     creditors generally and by general principles of equity.

Non-Contravention. The execution and delivery by the Owner Participant of
     this Agreement, the LLC Agreement, the Tax Indemnity Agreement and any
     other Operative Document to which the Owner Participant is or will be a
     party, the consummation by the Owner Participant of the transactions
     contemplated hereby and thereby, and the compliance by the Owner
     Participant

                                      20
<PAGE>
     with the terms and provisions hereof and thereof, do not and will not
     contravene any Applicable Law binding on the Owner Participant, or its
     organizational documents, or contravene the provisions of, or constitute
     a default under any indenture, mortgage or other material contract,
     agreement or instrument to which the Owner Participant is a party or by
     which the Owner Participant or its property is bound or result in the
     creation of any Owner Participant's Lien (other than any Lien created
     under any Operative Document) upon the Lessor Estate, the Facility Site
     or any interest therein or part thereof (it being understood that no
     representation or warranty is being made as to (i) any Applicable Laws
     relating to the particular nature of the Facility or the Facility Site or
     (ii) other than its representations set forth in Section 3.4(g), ERISA or
     Section 4975 of the Code).

Governmental Action. Assuming the representations and warranties of the
     Facility Lessee contained in paragraphs (j), (k), (l), (m), (q), (z),
     (ff) and (hh) of Section 3.1 are true, no authorization or approval or
     other action by, and no notice to or filing or registration with, any
     Governmental Entity is required for the due execution, delivery or
     performance by the Owner Participant of this Agreement, the LLC
     Agreement, the Tax Indemnity Agreement or any other Operative Document to
     which the Owner Participant is or will be a party, other than any
     authorization or approval or other action or notice or filing as has been
     duly obtained, taken or given (it being understood that no representation
     or warranty is being made as to any Applicable Laws relating to the
     Facility or the Facility Site), and other than, with respect to the
     Post-FILOT Lease Conversion Date, the conveyances and other matters
     referred to in the definition thereof.

Litigation. There is no pending or, to the Actual Knowledge of the Owner
     Participant, threatened, action, suit, investigation or proceeding against
     the Owner Participant before any Governmental Entity which (i) questions
     the validity of the Operative Documents or the ability of the Owner
     Participant to perform its obligations under the Operative Documents to
     which it is or will be a party or (ii) if determined adversely to it, could
     reasonably be expected to materially adversely affect the ability of the
     Owner Participant to perform its obligations under the LLC Agreement, this
     Agreement or any other Operative Document to which it is or will be a party
     or would materially adversely affect the Facility, the Facility Site or any
     interest therein or part thereof or the Lien of the Indenture Trustee on
     the Indenture Estate.

Liens. The Lessor Estate is free of any Owner Participant's Liens.

ERISA. No part of the funds to be used by the Owner Participant to make its
     investment pursuant to this Agreement, directly or indirectly, constitutes
     or is deemed to constitute assets (within the meaning of ERISA and any
     applicable rules, regulations and court decisions thereunder) of any
     "employee benefit plan" (as defined in Section 3(3) of ERISA) that is
     subject to ERISA, of any Transaction Party and ERISA Affiliate thereof.

Acquisition for Investment. The Owner Participant is purchasing the Member
     Interest to be acquired by it for its own account with no present intention
     of distributing such Member Interest or any part thereof in any manner
     which would require registration under or would violate the Securities Act,
     but without prejudice, however, to the right of the Owner

                                      21
<PAGE>
     Participant at all times to sell or otherwise dispose of all or any part of
     such Member Interest under an exemption from registration available under
     such Act.

Securities Act. Neither the Owner Participant nor anyone authorized by it has
     directly or indirectly offered or sold any interest in the Member Interest,
     the Lessor Notes or the Certificates or any part thereof, or in any similar
     security or lease, or in any security or lease the offering of which for
     the purposes of the Securities Act would be deemed to be part of the same
     offering as the offering of the Member Interest, the Lessor Notes or the
     Certificates or any part thereof or solicited any offer to acquire any of
     the same in violation of the registration requirements of Section 5 of the
     Securities Act.

Holding Company Act and Federal Power Act. Immediately prior to executing
     this Agreement, the Owner Participant is not an "electric utility",
     "electric utility company", "public utility", "public-utility company",
     "holding company" or a "subsidiary company" or "affiliate" of any of the
     foregoing, under the Federal Power Act or the Holding Company Act.

Investment Company Act. The Owner Participant is not an "investment company"
     or a company controlled by an "investment company" within the meaning of
     the Investment Company Act of 1940.

Regulatory Event of Loss. The Owner Participant is not aware of any fact or
     circumstance that would constitute a Regulatory Event of Loss.

Representations and Warranties of Indenture Trustee and the Lease Indenture
Company. The Lease Indenture Company and the Indenture Trustee hereby severally
represent and warrant that as of the date of execution and delivery hereof and
as of the Closing Date:

Due Organization. The Lease Indenture Company is a national banking
      association duly organized, validly existing and in good standing under
     the laws of the United States, has the corporate power and authority, as
     Indenture Trustee and/or in its individual capacity to the extent
     expressly provided herein or in the Collateral Trust Indenture, to enter
     into and perform its obligations under the Collateral Trust Indenture,
     this Agreement and each of the other Operative Documents to which it is
     or will be a party.

Due Authorization, Enforceability; etc.   (1) (i) This Agreement has been duly
     authorized, executed and delivered by the Indenture Trustee and the Lease
     Indenture Company, and (ii) assuming the due authorization, execution and
     delivery of this Agreement by each party hereto other than the Indenture
     Trustee and the Lease Indenture Company, this Agreement constitutes a
     legal, valid and binding obligation of the Lease Indenture Company and the
     Indenture Trustee, enforceable against the Lease Indenture Company or the
     Indenture Trustee, as the case may be, in accordance with its terms, except
     as the same may be limited by applicable bankruptcy, insolvency,
     reorganization, moratorium or other similar laws affecting the rights of
     creditors generally and by general principles of equity.

          (2)  (i) Each of the other Operative Documents to which the
Indenture Trustee is or will be a party has been or when executed and delivered
will be duly authorized, executed and delivered by the Indenture Trustee, and
(ii) assuming the due authorization, execution and delivery of each of the other
Operative Documents by each party thereto other than the Indenture

                                      22
<PAGE>
Trustee, each of the other Operative Documents to which the Indenture Trustee
is or will be a party constitutes or when executed and delivered will be a
legal, valid and binding obligation of the Indenture Trustee, enforceable
against the Indenture Trustee in accordance with its terms, except as the same
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the rights of creditors generally and by
general principles of equity.

Non-Contravention. The execution and delivery by the Lease Indenture Company,
     in its individual capacity or as Indenture Trustee, as the case may be,
     of this Agreement and the other Operative Documents to which it is or
     will be a party, the consummation by the Lease Indenture Company, in its
     individual capacity or as Indenture Trustee, as the case may be, of the
     transactions contemplated hereby and thereby, and the compliance by the
     Lease Indenture Company, in its individual capacity or as Indenture
     Trustee, as the case may be, with the terms and provisions hereof and
     thereof, do not and will not contravene any Applicable Law of the State
     of Connecticut or the United States of America governing the Lease
     Indenture Company or the banking or trust powers of the Lease Indenture
     Company, or its articles of association or by-laws, or contravene the
     provisions of, or constitute a default by the Lease Indenture Company
     under or pursuant to any indenture, mortgage or other material contract,
     agreement or instrument to which the Lease Indenture Company is a party
     or by which the Lease Indenture Company or its property is bound, or
     result in the creation of any Lien attributable to the Lease Indenture
     Company upon the Indenture Estate, the Facility Site or any interest
     therein or any part thereof (other than the Lien of the Collateral Trust
     Indenture), which would materially adversely affect the ability of the
     Lease Indenture Company, in its individual capacity or as Indenture
     Trustee, as the case may be, to perform its obligations under this
     Agreement or the other Operative Documents to which it is or will be a
     party or would materially adversely affect the Facility, the Facility
     Site or any interest therein or part thereof or the security interest of
     the Indenture Trustee in the Indenture Estate; provided, however, that no
     representation or warranty is made with respect to the right, power or
     authority of the Lease Indenture Company or the Indenture Trustee to act
     as operator of the Facility following a Lease Event of Default.

Governmental Action. Assuming the representations and warranties of the
     Facility Lessee contained in paragraphs (j), (k), (l), (m), (q), (z),
     (ff) and (hh) of Section 3.1 are true, no authorization or approval or
     other action by, and no notice to or filing or registration with, any
     Governmental Entity of the State of Delaware or of the United State of
     America governing its banking or trust powers is required for the due
     execution, delivery or performance by the Lease Indenture Company or the
     Indenture Trustee, as the case may be, of this Agreement or the other
     Operative Documents to which the Indenture Trustee is or will be a party,
     other than any such authorization or approval or other action or notice
     or filing as has been duly obtained, taken or given.

Litigation. There is no pending or, to the Actual Knowledge of the Lease
     Indenture Company, threatened, action, suit, investigation or proceeding
     against the Lease Indenture Company before any Governmental Entity which
     (i) questions the validity of the Operative Documents or the ability of the
     Lease Indenture Company or the Indenture Trustee to perform its obligations
     under the Operative Documents to which it is or will be a party or (ii) if
     determined adversely to it, could reasonably be expected to materially
     adversely affect the

                                      23
<PAGE>
     ability of the Lease Indenture Company to perform its obligations under
     this Agreement or any other Operative Document to which it is or will be
     a party or could reasonably be expected to materially adversely affect
     the Facility, the Facility Site or any interest therein or part thereof
     or the Lien of the Indenture Trustee on the Indenture Estate.

          D.   Representations, Warranties and Covenants of the Pass Through
Trustees and the Pass Through Company. The Pass Through Company and the Pass
Through Trustees hereby severally represent and warrant that as of the date of
execution and delivery hereof and as of the Closing Date:

Due Organization. The Pass Through Company is a national banking association
     duly organized, validly existing and in good standing under the laws of the
     United States, has the corporate power and authority, as Pass Through
     Trustee and/or in its individual capacity to the extent expressly provided
     herein or in the Pass Through Trust Agreements, to enter into and perform
     its obligations under the Pass Through Trust Agreements, this Agreement and
     each of the other Operative Documents to which it is or will be a party.

Due Authorization, Enforceability; etc.

(A)  This Agreement has been duly authorized, executed and delivered by the Pass
     Through Trustees and the Pass Through Company and (B) assuming the due
     authorization, execution and delivery of this Agreement by each party
     hereto other than each Pass Through Trustee and the Pass Through Company,
     as the case may be, this Agreement constitutes a legal, valid and binding
     obligation of the Pass Through Company and each Pass Through Trustee,
     enforceable against the Pass Through Company or each Pass Through Trustee,
     as the case may be, in accordance with its terms, except as the same may be
     limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
     arrangement, moratorium or other laws relating to or affecting the rights
     of creditors generally and by general principles of equity.

(A)  Each of the other Operative Documents to which the Pass Through Company or
     any Pass Through Trustee is or will be a party has been or when executed
     and delivered will be duly authorized, executed and delivered by the Pass
     Through Company or such Pass Through Trustee, as the case may be, and (B)
     assuming the due authorization, execution and delivery of each of the other
     Operative Documents by each party thereto other than the Pass Through
     Company or such Pass Through Trustee, as the case may be, each of the other
     Operative Documents to which the Pass Through Company or any Pass Through
     Trustee is or will be a party constitutes or when executed and delivered
     will constitute a legal, valid and binding obligation of the Pass Through
     Company or such Pass Through Trustee, enforceable against the Pass Through
     Company or such Pass Through Trustee, as the case may be, in accordance
     with its terms, except as the same may be limited by bankruptcy,
     insolvency, fraudulent conveyance, reorganization, arrangement, moratorium
     or other laws relating to or affecting the rights of creditors generally
     and by general principles of equity.

Non-Contravention. The execution and delivery by the Pass Through Company, in
     its individual capacity or as Pass Through Trustee, as the case may be, of
     this Agreement and the other Operative Documents to which it is or will be
     a party, the consummation by the Pass Through Company, in its individual
     capacity or as Pass Through Trustee, as the case may be,

                                      24
<PAGE>
     of the transactions contemplated hereby and thereby, and the compliance by
     the Pass Through Company, in its individual capacity or as Pass Through
     Trustee, as the case may be, with the terms and provisions hereof and
     thereof, do not and will not contravene any Applicable Law of the United
     States of America or the State of Connecticut governing the Pass Through
     Company or the banking or trust powers of the Pass Through Company, or its
     organizational documents or by-laws, or contravene the provisions of, or
     constitute a default by the Pass Through Company under, or result in the
     creation of any Lien attributable to the Pass Through Company upon the
     Certificates or any indenture, mortgage or other material contract,
     agreement or instrument to which the Pass Through Company is a party or by
     which the Pass Through Company or its property is bound which would
     materially adversely affect the ability of the Pass Through Company, in its
     individual capacity or as Pass Through Trustee, as the case may be, to
     perform its obligations under this Agreement or the other Operative
     Documents to which it is a party or would materially adversely affect the
     Facility, the Facility Site or any interest therein or part thereof or the
     security interest of any Pass Through Trustee in the Indenture Estate;
     provided, however, that no representation is made with respect to the
     right, power or authority of the Pass Through Company or any Pass Through
     Trustee to act as operator of the Facility following a Lease Event of
     Default.

Governmental Action. Assuming the representations and warranties of the
      Facility Lessee contained in paragraphs (j), (k), (l), (m), (q), (z),
     (ff) and (hh) of Section 3.1 are true, no authorization or approval or
     other action by, and no notice to or filing or registration with, any
     Governmental Entity governing its banking or trust powers is required for
     the due execution, delivery or performance by the Pass Through Company or
     any Pass Through Trustee, as the case may be, of this Agreement or the
     other Operative Documents to which such Pass Through Trustee is or will
     be a party, other than any such authorization or approval or other action
     or notice or filing as has been duly obtained, taken or given.

Litigation. There is no pending or, to the knowledge of the Pass Through
     Company, threatened action, suit, investigation or proceeding against the
     Pass Through Company either in its individual capacity or as Pass Through
     Trustee, before any Governmental Entity which, if determined adversely to
     it, would materially adversely affect the ability of the Pass Through
     Company, in its individual capacity or as Pass Through Trustee, as the case
     may be, to perform its obligations under this Agreement or the other
     Operative Documents to which it is a party or would materially adversely
     affect the Facility, the Facility Site or any interest therein or part
     thereof or the security interest of any Pass Through Trustee in the
     Indenture Estate or which questions the validity or enforceability of any
     Operative Document to which the Pass Through Company or any Pass Through
     Trustee is a party.

CLOSING CONDITIONS

          The obligations of the Owner Participant, the Owner Lessor, the Lessor
Manager, the Lease Indenture Company, the Indenture Trustee, the Pass Through
Company, the Pass Through Trustees, the Guarantor and the Facility Lessee to
consummate the transactions contemplated hereby on the Closing Date shall be
subject to the following conditions, except that the obligations of any Person
shall not be subject to such Person's own performance or compliance, and each
of the Transaction Parties (other than the Certificateholders) shall provide

                                      25
<PAGE>
such proof of satisfaction of these conditions as any other Transaction Party
shall reasonably request.

                                      26
<PAGE>
Completion of the Facility. The Facility shall have commenced commercial
operations and shall currently be capable of producing at least 850 MW of
capacity and shall comply in all material respects with the other specifications
set forth in the purchase and construction contracts for the Facility.

Operative Documents. On or before the Closing Date, each of the Operative
Documents to be delivered at or before the Closing (as well as any other
agreements, certificates and other documents relating to the Overall Transaction
to be delivered at Closing (including, without limitation, the Offering
Circular)) shall have been duly authorized, executed and delivered by the
parties thereto (if attached as an Exhibit hereto, in substantially the form
attached as such Exhibit or if not so attached, in form and substance
satisfactory to each Transaction Party), shall each be in full force and effect,
and executed counterparts of each shall have been delivered to each of the
parties hereto (other than the Tax Indemnity Agreement, which shall only be
delivered to the parties thereto).

Certificates and the Lessor Notes. Each of the conditions precedent contained in
the Certificate Purchase Agreement shall have been satisfied or waived by the
Initial Purchasers and such Initial Purchasers shall have purchased the
Certificates pursuant to and in accordance with, the terms of the Certificate
Purchase Agreement and the Proceeds shall have been provided to the Owner Lessor
through the purchase by the Pass Through Trustees of the applicable Lessor
Notes.

Equity Investment. The Owner Participant shall have made or caused to be made
the Equity Investment available to the Owner Lessor at the place and in the
manner contemplated by Section 2.

Organizational Documents. Each of the Transaction Parties shall have received
certified copies of the organizational documents of each of the other parties
hereto and resolutions of the board of directors of each such other corporate
party duly authorizing the transaction and such documents and such evidence as
each party may reasonably request in order to establish the authority of each
such other party to consummate the transactions contemplated by this Agreement,
the taking of all corporate and other proceedings in connection therewith and
compliance with the conditions herein or therein set forth and the incumbency of
all officers signing any of the Operative Documents. Each of the foregoing
documents shall be reasonably satisfactory to each recipient thereof.

     E.   Representations and Warranties. The representations and warranties
of each party hereto set forth in Section 3 shall be true and correct on and as
of the Closing Date with the same effect as though made on and as of the
Closing Date.

Defaults, Events of Default, Events of Loss. No Lease Event of Default, Lease
Indenture Event of Default, Event of Loss or Burdensome Buyout Event or event
that with the passage of time or giving of notice or both would constitute a
Lease Event of Default, Lease Indenture Event of Default, Event of Loss or
Burdensome Buyout Event shall have occurred and be continuing.

Regulatory Approvals. Except with respect to the FERC Owner Lessor EWG Orders
status and the FERC Order referenced in clause (v) of the definition of "FERC
Orders" set forth in Appendix A hereto, the Owner Participant and the Pass
Through Trustees shall have received evidence of receipt of the FERC Orders.

                                      27
<PAGE>
     F.   Consents.

          (a)  All permits, licenses, approvals and consents (including
management, credit and other internal approvals of the Transaction Parties, but
excluding the Third Party Consents referred to in (b) below) necessary to
consummate the Overall Transaction and to own and operate the Facility as
currently operated shall have been duly obtained and shall be in full force and
effect and in the form and substance satisfactory to each of the Transaction
Parties.

          (b)  Each Third Party Consent shall have been obtained and
shall be in full force and effect substantially in the form attached hereto as
Exhibit O which is applicable to the relevant third party granting such consent;
provided that if any Third Party Consent is not substantially in the form
attached hereto as Exhibit O, an authorized officer of Calpine shall provide a
certificate to the Owner Lessor, the Indenture Trustee and the Pass Through
Trustee certifying that any differences between the form of such consent
attached hereto and the executed version are not materially adverse to any of
the Indenture Trustee, the Pass Through Trustee, the Noteholders, the
Certificateholders or the Owner Lessor.

                                      28
<PAGE>
Governmental Actions. All actions, if any, required to have been taken by any
Governmental Entity on or prior to the Closing Date in connection with the
transactions contemplated by any Operative Document, including, without
limitation, the FERC Orders, shall have been taken and, except with respect to
the determination by FERC of EWG status and the FERC Order referenced in clause
(v) of the definition of "FERC Orders" set forth in Appendix A hereto, all
Applicable Permits required to be in effect on the Closing Date in connection
with the consummation of the transactions contemplated by the Operative
Documents shall have been issued and shall be in full force and effect; and all
such Applicable Permits shall be final, in full force and effect on the Closing
Date.

Insurance. Insurance (including all related endorsements) complying with the
requirements of Schedule 5.31 shall be in full force and effect and all premiums
thereon shall be current. The Owner Participant, the Manager, the Lessor
Manager, the Indenture Trustee and the Pass Through Trustees shall have received
a certificate or certificates (or binders, if certificates are not then
available) dated the Closing Date of Summit Global Partners Insurance Services
or an independent insurance broker or carrier reasonably satisfactory to such
Persons stating that such insurance complies with the requirements of Schedule
5.31, is in full force and effect and all premiums then due and payable in
connection therewith have been paid.

Ratings. The Certificates shall have been rated at least Ba1 by Moody's and
BB+ by S&P.

Environmental Report. The Owner Participant, the Manager, the Indenture Trustee
and the Pass Through Trustees shall have received copies of the Environmental
Reports which shall be in form and substance satisfactory to such parties. The
Facility Lessee shall cause the Environmental Consultant to deliver at the same
time a reliance letter addressed to the Owner Lessor, the Manager and the Owner
Participant allowing them to rely on such reports as if addressed to each of
them.

Surveys. The Owner Participant shall have a copy of the Survey (which Survey
shall be certified to the Owner Lessor and the Title Company) in form and
substance satisfactory to the Owner Participant.

Appraisal; Condition of the Facility. The Owner Participant shall have received
the Closing Appraisal prepared by the Appraiser addressed and delivered only to
the Owner Participant and in form and substance satisfactory to the Owner
Participant, together with a letter of the Appraiser certifying that its
conclusions set forth in the Closing Appraisal are true and correct as of the
Closing Date. The Indenture Trustee, the Pass Through Trustees and the Initial
Purchasers shall have received a copy of the verification of value, useful life
and estimated residual value prepared by the Appraiser in connection with the
appraisal of assets subject to the Facility Lease, each of which will be
reasonably satisfactory to the recipient.

     G.   Letter from the Appraiser. Each of the Owner Lessor and the Manager
shall have received a satisfactory letter of the Appraiser setting forth the
conclusions of the Closing Appraisal as to the fair market value and remaining
economic useful life of the Facility as of the Closing Date and the methodology
of determination thereof.

                                      29
<PAGE>
Other Reports. The Owner Participant, the Indenture Trustee and the Pass Through
Trustees shall have received copies of the reports of the Engineering
Consultant, the Insurance Consultant, and the Power Market Consultant, which
reports shall be dated as of the Closing Date and shall otherwise each be in
form and substance reasonably satisfactory to the recipients.

Opinion with Respect to Certain Tax Aspects. The Owner Participant shall have
received the opinion, dated the Closing Date, of Dewey Ballantine LLP addressed
and delivered only to the Owner Participant as to certain tax matters and in
form and substance satisfactory to the Owner Participant.

Opinions of Counsel. Each of the relevant Transaction Parties shall have
received an opinion or opinions, dated the Closing Date, of (a) Ronald W.
Fischer, Esq., in-house counsel to the Facility Lessee and Guarantor (which
opinion shall include, without limitation, a favorable opinion with respect to
the transfer by Facility Lessee of its interest in the Undivided Interest and
the Ground Interest to the Owner Lessor), (b) Thelen Reid & Priest LLP, special
counsel to the Facility Lessee and Guarantor, (c) Davis Wright & Tremaine LLP,
special regulatory counsel to the Facility Lessee, (d) McNair Law Firm, P.A.,
South Carolina counsel to the Facility Lessee, (e) Karen Scowcroft, Esq.,
in-house counsel to the Equity Investor, (f) Dewey Ballantine LLP, counsel to
the Owner Participant and to the Owner Lessor, (g) Bingham Dana LLP, counsel to
the Lease Indenture Company and the Indenture Trustee, (h) Bingham Dana LLP,
counsel to the Pass Though Trustees and the Pass Through Company, and (i) Ray
Quinney & Nebeker, in-house counsel to the Lessor Manager, in each case in form
and substance reasonably satisfactory to each Transaction Party. Each such
Person expressly consents to the rendering by its counsel of the opinion
referred to in this Section 4.19 and acknowledges that such opinion shall be
deemed to be rendered at the request and upon the instructions of such Person,
each of whom has consulted with and has been advised by its counsel as to the
consequences of such request, instructions and consent. Furthermore, each such
counsel shall, to the extent requested, permit the Rating Agencies and the
Initial Purchasers to rely on their opinion as if such opinion were addressed to
such parties.

     H.   Recordings and Filings. All filings and recordings listed on Schedule
4.20 hereto shall have been duly made and all filing, recordation, transfer and
other fees payable in connection therewith shall have been paid; and the filing
of all precautionary financing statements under the Uniform Commercial Code of
South Carolina and Delaware and any other documents as may be reasonably
requested by counsel to the Owner Participant, the Indenture Trustee or the
Pass Through Trustees to perfect (i) the Owner Lessor's Interest, or any part
thereof or interest therein and (ii) and the Lien of the Indenture Trustee on
the Indenture Estate.

Conditions to Closing. All conditions required to have been satisfied by on or
before the Closing Date under the Operative Documents and the FILOT Lease shall
have been satisfied or waived and the Owner Participant shall be satisfied that
the Facility shall be in the condition described in the Closing Appraisal.

Taxes. All Taxes, if any, due and payable on or before the Closing Date in
connection with the execution, delivery, recording and filing of this Agreement
or any other Operative Document, or any document or instrument contemplated
thereby shall have been duly paid in full.

                                      30
<PAGE>
No Changes in Applicable Law. No change shall have occurred in Applicable Law or
the interpretation thereof by any competent court or other Governmental Entity
that would make it illegal for the Owner Participant, the Owner Lessor, the
Lessor Manager, the Indenture Trustee, the Pass Through Trustees or the Facility
Lessee, to participate in any of the transactions contemplated by the Operative
Documents or the Owner Lessor to participate in any of the transactions
contemplated by the FILOT Lease or would materially adversely affect the
Facility or the Facility Site. On the Closing Date, each Certificateholder's
purchase of Lessor Notes shall (i) be permitted by the laws and regulations of
each jurisdiction to which such Certificateholder is subject, (ii) not violate
any Applicable Law (including Regulation U, T or X of the Board of Governors of
the Federal Reserve System) and (iii) not subject any Certificateholder to any
tax, penalty or liability under or pursuant to any Applicable Law, which
Applicable Law was not in effect on the date hereof. If requested by any
Certificateholder, such Certificateholder shall have received an Officer's
Certificate of the Owner Lessor, in form and substance satisfactory to such
Certificateholder, certifying as to such matters of fact as such
Certificateholder may reasonably specify to enable such Certificateholder to
determine whether such purchase is so permitted.

Registered Agent for the Facility Lessee and the Owner Lessor. National
Registered Agents, Inc. shall have been appointed by the Facility Lessee, and CT
Corporation System shall have been appointed by the Owner Lessor, each as
registered agent for service of process in the State of New York as provided in
the Operative Documents and each of National Registered Agents, Inc. and CT
Corporation System shall have accepted such appointments.

Operating Lease Treatment. The present value of Basic Rent payable during the
Basic Lease Term under the Facility Lease (taking into account any rent
adjustment through or contemplated on the Closing Date), together with all rent
payable under the related Facility Site Lease, discounted at the Discount Rate,
shall satisfy the 90 percent test for operating lease classification under FASB
13. The Facility Lessee shall have received confirmation from Arthur Andersen
LLP that the Facility Lease will be treated as an operating lease under FASB 13
and FASB 98 for the purposes of GAAP.

Rent Adjustments. The aggregate of all rent adjustments made on or before, or
contemplated to be made on, the Closing Date (other than adjustments to reflect
a change in Transaction Costs or the actual interest rates on the Certificates)
shall not cause either (i) the pre-tax net present value of Basic Rent
discounted at 6% to increase by more than 100 basis points or (ii) the total
Basic Rent to increase by more than 2%.

Title Insurance. The Title Policy shall have been delivered to the Owner
Participant, the Owner Lessor, the Indenture Trustee, as the case may be, with
copies to the Pass Through Trustees.

Parent Guaranty. The OP Guarantor shall have executed and delivered to the other
Transaction Parties an OP Parent Guaranty in the form of Exhibit G hereto.

Letter as to Number of Offerees. (i) The Owner Participant and the
Certificateholders shall have received a certification from the Facility Lessee
as to the number of offerees by it of the Lessor Estate and (ii) the Facility
Lessee shall have received certification from the Newcourt Capital Securities,
Inc. as to the number of offerees by it of the Lessor Estate and (iii) the
Facility Lessee

                                      31
<PAGE>
shall have received certification from CSFB as to the number of offerees by it
of the Lessor Estate.

     I.   Lien Search. The Owner Participant (with a copy to the Indenture
Trustee) shall have received Lien searches with respect to the Facility Lessee
in form and substance satisfactory to the Owner Participant.

Litigation. There shall be no actions, investigations, suits or proceedings
pending or threatened against the Facility Lessee and/or the Calpine Parties or
their properties before any court or Governmental Entity which, individually or
in the aggregate, would, if adversely determined, be reasonably likely to have a
Material Adverse Effect (including, but not limited to, the Facility Lessee, the
Owner Participant, the Owner Lessor or the Certificateholders being subject to
or not exempted from regulation as a "public utility company" or a "holding
company" under PUHCA or under state laws and regulations respecting the rates or
the financial and organizational regulation of electric utilities), nor shall
any order, judgment or decree have been issued or proposed by any Governmental
Entity at the time of the Closing Date, to set aside, restrain, enjoin or
prevent the consummation of the Operative Documents or the FILOT Lease or any of
the Transactions contemplated by any of the Operative Documents.

No Material Adverse Change. The annual reports, information, documents and other
reports referred to in Section 3.2(a) of the Calpine Guaranty shall have been
received by the Owner Participant, and there shall have been no material adverse
change in the financial condition, business assets or operation of Calpine and
its Consolidated Subsidiaries since the date of such annual reports,
information, documents and other reports.

Private Placement Number. A private placement number issued by S&P's CUSIP
Service bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have been obtained for
the Certificates.

Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be reasonably satisfactory to
the Facility Lessee, the Owner Participant and the Initial Purchasers and their
respective special counsel, and such parties and their respective special
counsel shall have received all such information and counterpart originals or
certified or other copies of such documents and certificates as each such party
or its special counsel may reasonably request in connection with the matters
contemplated hereby and by the other Operative Documents.

No Proposed Tax Law Change. There has been no Proposed Tax Law Change for which
an adjustment has not been made pursuant to Section 12 of this Agreement.

     J.   Payment of Fees and Expenses. Without limiting the provisions of
Section 2.3, all Transaction Costs invoiced at least 3 Business Days prior to
Closing to the Owner Participant with a copy to the Facility Lessee shall be
paid promptly after the Closing Date (but no later than October 29, 2001).

     K.   Corrective Ordinance. The Facility Lessee shall have received a copy
of the Corrective Ordinance.

                                      32
<PAGE>
COVENANTS OF FACILITY LESSEE AND GUARANTOR

     The Facility Lessee and the Guarantor, to the extent provided below,
covenant as follows;

Maintenance of Existence. Except as permitted by Section 5.2, the Facility
Lessee, at its own cost and expense, will at all times do or cause to be done
all things necessary to preserve and keep in full force and effect both its
legal existence and its qualification to do business in any state in which the
conduct of its business or the ownership or leasing of assets used in its
business requires such qualification and where the failure to be so qualified
would reasonably be expected to have a Material Adverse Effect.

Merger, Consolidation, Sale of Substantially All Assets. The Facility Lessee
covenants and agrees as follows:

The Facility Lessee will not consolidate or merge with or into any other
     Person, or sell, assign, convey, lease, transfer or otherwise dispose of,
     all or substantially all of its properties or assets to any Person or
     Persons in one or a series of transactions, unless (i) immediately after
     giving effect to any such transaction or transactions, either (A) Calpine
     would own, directly or indirectly, at least a majority of the Ownership
     Interest of each succeeding or surviving entity, the Calpine Guaranty
     remains in full force and effect (without a transferee of Calpine's
     obligations thereunder having succeeded thereto in accordance with Section
     8.4(b) thereof) and Calpine shall have reaffirmed in writing its
     obligations under the Calpine Guaranty and the other Operative Documents to
     which Calpine is a party in a manner reasonably satisfactory to the Owner
     Participant and the Owner Lessor or (B) Calpine's obligations under the
     Calpine Guaranty have been succeeded to in accordance with Section 8.4(b)
     of the Calpine Guaranty, the transferee of Calpine shall own, directly or
     indirectly, at least a majority of the Ownership Interest of each
     succeeding or surviving entity and the Calpine Guaranty shall remain in
     full force and effect, (ii) immediately after giving effect to such
     transaction, the requirements set forth in Section 13.1(b)(i) through (vi)
     of this Agreement (with appropriate conforming changes to take into account
     the nature of the transactions referred to hereunder) have been satisfied
     in connection with such transfer, and (iii) each succeeding or surviving
     entity shall be organized under the laws of the United States, any state
     thereof or the District of Columbia.

Upon the consummation of such transaction described in Section 5.2(a), the
     resulting, surviving or succeeding entity, if other than the Facility
     Lessee, shall succeed to, and be substituted for, and may exercise every
     right and power and shall perform every obligation of, the Facility Lessee
     under this Participation Agreement and each other Operative Document to
     which the Facility Lessee was a party immediately prior to such
     transaction, with the same effect as if such entity had been named herein
     and therein. The Facility Lessee will pay the costs and expenses (including
     reasonable attorneys' fees and expenses) of the Owner Participant, the
     Owner Lessor, the Lessor Manager, the Indenture Trustee, the Pass Through
     Trustees and the Certificateholders in connection with any transaction
     contemplated by this Section 5.2.

Guaranty and Contingent Obligations. The Facility Lessee will not create, incur,
assume or suffer to exist any Indebtedness (including without limitation any
guaranty or other contingent

                                      33
<PAGE>
obligations) except (i) by reason of endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of the
Facility Lessee's business, (ii) indemnities in respect of unfiled mechanics'
liens and other liens permitted by clause (d) of the definition of "Permitted
Liens", (iii) contingent obligations set forth in, or incurred in connection
with, or indemnities set forth in, the Operative Documents and the FILOT Lease,
(iv) unsecured indemnities provided, and other unsecured contingent obligations
incurred by the Facility Lessee in connection with either (x) easements
relating to its applicable interest in the Facility or the Facility Site or (y)
any contract, agreement or other document or instrument relating to the Broad
River project which is entered into in the ordinary course of the Facility
Lessee's business, (v) customary indemnities in favor of the title insurers
providing the title policies covering the Facility Site or any portion thereof
or any easement or appurtenant right relating thereto in respect of claims by
the holder of mechanics' liens, (vi) the indemnities referred to in Section 9.1
and 9.2 of the Participation Agreement or pursuant to the Tax Indemnity
Agreement and (vii) unsecured Indebtedness incurred in accordance with Section
11.1 or 11.2 hereof.

Assignment of Rights. The Facility Lessee shall not assign any of its rights or
obligations except as permitted by the Operative Documents and the FILOT Lease.

Lessor Manager Fees. The Facility Lessee and Calpine shall pay the fees, costs
and expenses of the Lessor Manager (including the reasonable compensation and
expenses of its counsel), as set forth in a letter agreement approved by the
Facility Lessee arising out of the Owner Lessor's and the Owner Participant's
discharge of their duties under or in connection with the Operative Documents
and the FILOT Lease, as in effect on the Closing Date.

Conduct of Business, Properties, Etc. Except as otherwise expressly permitted
under this Agreement, the Facility Lessee shall (a) perform and comply with all
of its contractual obligations under the Operative Documents to which it is a
party and all other material agreements and contracts by which it is bound,
unless (other than in connection with the Operative Documents) such
noncompliance would not cause a Material Adverse Effect, and (b) engage only in
the business contemplated by the Operative Documents to which it is a party.

Obligations. The Facility Lessee shall pay all of its obligations, howsoever
arising, as and when due and payable except such as may be contested in good
faith or as to which a bona fide dispute may exist; provided, that (i) adequate
reserves consistent with GAAP requirements are maintained for such contested or
disputed obligations or (ii) the Facility Lessee otherwise establishes and
maintains adequate security arrangements for the payment of such contested or
disputed obligations which are reasonably acceptable to the Owner Participant.

     L.   Books, Records, Access. The Facility Lessee shall maintain or cause
to be maintained adequate books, accounts and records with respect to itself,
the Facility and Facility Site and prepare all financial statements required
hereunder in accordance with GAAP and in compliance with the regulations of any
Governmental Entity having jurisdiction thereof, and permit employees, agents
and representatives of the Owner Lessor, the Owner Participant, and, so long as
the Lien of the Collateral Trust Indenture shall have not been terminated or
discharged, the Indenture Trustee, the Pass Through Trustees and the
Certificateholders, and such parties' independent consultants, at all
reasonable times during normal business hours and upon reasonable prior notice
and at no risk or (except during the existence of a Lease Default or

                                      34
<PAGE>
Lease Event of Default) expense to the Facility Lessee to inspect, the Facility
and Facility Site, to examine or audit all of or any of the Facility Lessee's
books, accounts and records and make copies and memoranda thereof and, together
with such consultants, to observe the operation, maintenance and repair of the
Facility; provided, however, any such inspection shall be conducted in
accordance with Section 12 of the Facility Lease.

Other Information.

          1.   The Facility Lessee shall furnish, or shall cause to be furnished
               to, the Owner Lessor, the Owner Participant and, so long as the
               Lien of the Collateral Trust Indenture has not been terminated
               or discharged, the Indenture Trustee and the Pass Through
               Trustees, and their respective authorized representatives from
               time to time such information as such party shall reasonably
               request concerning the Facility and Facility Site including
               information concerning the condition, operation, maintenance and
               use of the Facility and Facility Site and such other financial
               or operating information as it shall reasonably request and
               which is routinely made available to creditors of the Facility
               Lessee, to the extent it possesses such information; provided
               that, the Facility Lessee reserves the right not to provide any
               information that is not otherwise publicly available to any
               transferee Owner Participant (or its Owner Lessor) if it
               reasonably believes in its good faith judgment that such
               transferee Owner Participant or any Affiliate thereof is a
               competitor or is an Affiliate of a competitor of the Facility
               Lessee or its Affiliates in the competitive power market,
               unless, before receiving any such information, such transferee
               Owner Participant shall have put in place (to the reasonable
               satisfaction of the Facility Lessee) appropriate confidentiality
               arrangements. To the extent such information consists of
               information contained in records kept by the Facility Lessee or
               any Affiliate, such information shall be furnished without cost
               to the recipient.

          (b)  The Facility Lessee will advise the Owner Participant, the
Owner Lessor, the OP Guarantor, the Pass Through Trustees and the Indenture
Trustee promptly in writing of the occurrence of any Significant Lease Default,
Lease Event of Default or Lease Indenture Event of Default (to the extent the
Facility Lessee has Actual Knowledge of any such Lease Indenture Event of
Default) and, as soon as practicable thereafter, will provide a description
thereof and a statement as to the actions, if any, the Facility Lessee proposes
to take with respect thereto.

     M.   Warranty of Title to Facility Site.

          1.   On and after the Post-FILOT Lease Conversion Date, the Facility
               Lessee shall maintain good and valid fee, title to, or easement
               or other surface rights in, as applicable, the Facility Site,
               subject only to Permitted Liens.

          2.   The Facility Lessee shall maintain good and valid title to all
               of its other properties and assets (other than properties and
               assets disposed of in the

                                      35
<PAGE>
               ordinary course of business, including any sale, transfer or
               other disposition of any obsolete, surplus or worn out equipment,
               parts, supplies or other materials or assets to the extent
               permitted by the Operative Documents), subject only to Permitted
               Liens.

ERISA. The Facility Lessee shall not establish, maintain or contribute to,
any Plan. If any Plan is established, maintained or contributed to by either
the Facility Lessee or any ERISA Affiliate, or if the Facility Lessee or any
ERISA Affiliate becomes obligated to contribute to any Plan, (a) with respect
to each such Plan, the Facility Lessee or such ERISA Affiliate (i) shall have
at all times fulfilled in all material respects their obligations under the
minimum funding standards of ERISA and the Code, (ii) shall not allow any such
Plan to have an Unfunded Current Liability, (iii) shall, with respect to each
Plan (and each related trust, if any) which is intended to be qualified under
Sections 401(a) and 501(a) of the Code, obtain a determination letter from the
Internal Revenue Service to the effect that such Plan (and trust, if any) meets
the requirements of Sections 401(a) and 501(a) of the Code, and (iv) shall at
all times be in compliance in all material respects with applicable provisions
of ERISA and the Code, and (b) within fifteen (15) days after (i) the
occurrence of any reportable event (as defined in Section 4043(c) of ERISA)
with respect to any Plan, (ii) the complete or partial withdrawal by the
Facility Lessee or any ERISA Affiliate from any Multiemployer Plan, (iii) to
the extent the Facility Lessee or any ERISA Affiliate is notified that any
Multiemployer Plan has entered reorganization status, has become insolvent, or
has terminated (or any Multiemployer Plan notifies the Facility Lessee or any
ERISA Affiliate of its intent to terminate) under Section 4041A of ERISA, (iv)
the institution of any action to terminate a Plan in a distress termination
under Section 4041(c) of ERISA, or (v) in the case of the breach of any other
covenant contained in this Section 5.11, the Facility Lessee shall report such
occurrence or breach to the Indenture Trustee, the Pass Through Trustees, the
Owner Lessor and the Owner Participant and furnish such information as such
Persons may reasonably request with respect thereto.

Certain Contracts and Agreements. Without the consent of the Owner Participant,
the Facility Lessee agrees that, except as required by the Operative Documents
or the FILOT Lease, it will not enter into or become bound by any contract or
agreement providing for the sale of energy produced from the Facility, or the
purchase of services to be performed at, for or in connection with, the Facility
or any other contract or agreement relating to the Facility that (i) has a term
that extends beyond the Basic Lease Term or the scheduled expiration of any
Renewal Lease Term then in effect or elected by the Facility Lessee, unless such
contract or agreement may be terminated by the Facility Lessee without material
costs or obligation prior to the Basic Lease Term or the scheduled expiration of
such Renewal Lease Term, as the case may be or (ii) results in any lien,
encumbrance, restriction or agreement relating to the Facility which extends
beyond the expiration of the Facility Lease Term or which binds the Facility or
the owner of the Facility beyond the expiration of the Facility Lease Term;
provided that nothing in this Section 5.12 shall prevent the Operator from
entering agreements to operate the Facility in accordance with the Operative
Documents and the FILOT Lease.

Certain Costs. The Facility Lessee agrees to pay to the Owner Lessor as
Supplemental Rent (i) overdue interest with respect to the Lessor Notes issued
under the Collateral Trust Indenture if the same is due and payable because of
the occurrence of a Lease Indenture Event of Default which is attributable to a
Lease Event of Default and (ii) an amount equal to any Make-Whole

                                      36
<PAGE>
Amount which has become due and payable with respect to the Lessor Notes under
the Collateral Trust Indenture.

Limitations on Liens. The Facility Lessee shall not, directly or indirectly,
create, assume or permit to exist any Lien, securing a charge or obligation on
the Facility, the Facility Site or on any of its other properties real or
personal, whether now owned or hereafter acquired, except Permitted Liens.

     N.   Investments. The Facility Lessee shall not make or permit to remain
outstanding any advances, loans or extensions of credit to, or purchase or own
any stock, bonds, notes, debentures or other securities of any Person, except
Permitted Investments.

     O.   Intentionally Deleted.

Regulations. The Facility Lessee shall not, directly or indirectly, apply the
proceeds of the sale of Lessor Notes or any other revenues to the purchasing or
carrying of any margin stock within the meaning of Regulations T, U or X of the
Federal Reserve Board, or any regulations, interpretations or rulings
thereunder.

Partnerships. The Facility Lessee shall not become a general or limited
partner in any partnership or a joint venturer in any joint venture.

Dissolution. The Facility Lessee shall not liquidate or dissolve, except
pursuant to transactions permitted under Section 5.2.

Termination of Operative Documents; Delegation of Authority.

          1.   The Facility Lessee shall not without the prior written consent
               of the Owner Participant and, except as otherwise provided in
               Section 8 of the Collateral Trust Indenture and so long as the
               Lien of the Collateral Trust Indenture has not been terminated
               or discharged, the Indenture Trustee, (x) cause or consent to
               or (y) acquiesce in any amendment, modification, extension,
               termination, variance or waiver of timely compliance with any
               terms or conditions of any Operative Document. In addition,
               the Facility Lessee shall not enter into or acquiesce in any
               amendment, modification, extension, termination, variance or
               waiver of timely compliance with any terms or provisions of
               the FILOT Lease without the consent of the Owner Participant
               if the same would (i) subject in all cases to the provisions
               of clause (iii) below, during the Facility Lease Term, have a
               material adverse effect on the Owner Participant or the Owner
               Lessor (including, without limitation, any material decrease
               in their respective rights or any material increase in their
               respective obligations or any material increase in the
               liability exposure of the Owner Lessor or the
               Owner Participant, it being agreed that (x) in determining
               whether any such material adverse effect has occurred, the fact
               of the Facility Lessee's obligations under the Operative
               Documents (including paragraph (b) below) and of Calpine under
               the Calpine Guaranty shall be taken into account and (y) any
               increase in rent or any other amount payable by the Owner Lessor
               or the

                                      37
<PAGE>
               Owner Participant under the FILOT Lease that is also reflected
               to the same extent under the Facility Site Lease and does not
               remain in effect after the expiration of the then existing Basic
               Lease Term or any Renewal Term with respect to which the
               Facility Lessee shall have irrevocably exercised its renewal
               option shall not constitute or cause or be deemed to constitute
               or cause such a material adverse effect), (ii) during the period
               after the expiration or termination of the Facility Lease Term,
               have any adverse effect whatsoever on the Owner Participant or
               the Owner Lessor (including, without limitation, any increase in
               their respective obligations or decrease in their respective
               rights) or (iii) whether during or after the Facility Lease
               Term, result in any change to the length of the term of the
               FILOT Lease or in any option to renew the Facility Lease Term.
               The Facility Lessee will furnish the Owner Participant with a
               copy of the executed version thereof promptly after the
               execution thereof. Notwithstanding anything to the contrary
               contained in the foregoing, the Facility Lessee shall not have
               any right to take any action otherwise permitted pursuant to
               this Section 5.20 if a Significant Lease Default or Lease Event
               of Default shall have occurred and be continuing. So long as the
               Lien of the Collateral Trust Indenture has not been discharged,
               the Facility Lessee shall not take any action pursuant to or in
               accordance with the foregoing provisions of this Section 5.20,
               if such action would (i) have a material adverse effect on the
               Indenture Trustee, the Pass Through Trustees, the Noteholders or
               the Certificateholders including, without limitation, a material
               adverse effect on such Person's rights and remedies under the
               Operative Documents (it being agreed that (x) in determining
               whether any such material adverse effect has occurred, the fact
               of the Facility Lessee's obligations under the Operative
               Documents (including paragraph (b) below) and Calpine's
               obligations under the Calpine Guaranty shall be taken into
               account and (y) any increase in rent or any other amount payable
               by the Owner Lessor or the Owner Participant under the FILOT
               Lease that is also reflected to the same extent under the
               Facility Site Lease ) shall not constitute or cause such a
               material adverse effect) or (ii) result in the release of or
               loss of the first priority, perfected Lien (subject to Permitted
               Liens) on all or any material portion of the Owner Lessor's
               interest in the Facility or the Facility Site, except as
               otherwise permitted by the Operative Documents.

     2.        During the Facility Lease Term (i) the Facility Lessee shall, at
               its own expense, on behalf of the Owner Lessor, duly fulfill and
               comply with all obligations on the part of the Owner Lessor
               under or in connection with the FILOT Lease (or any extension
               or renewal thereof) at the time performance of such
               obligations is required under the FILOT Lease and (ii) in
               connection with the foregoing obligation of the Facility
               Lessee set forth in clause (i), subject to clause (a) above,
               the Facility Lessee shall have and be entitled to exercise all
               rights and benefits (including the right to enter into any
               amendment, modification, extension, termination, variance,
               waiver, notice or consent or any action with respect thereto,

                                      38
<PAGE>
               subject to the terms and conditions of the Operative Documents)
               of the Owner Lessor under the FILOT Lease.

Name and Location. The Facility Lessee shall not change its name or the location
of its chief executive office or place of business without notice to the Owner
Lessor, the Lessor Manager, the Indenture Trustee, the Pass Through Trustees and
the Owner Participant at least thirty (30) days prior to such change.

Use of Facility Site. The Facility Lessee shall not use, or permit to be used,
the Facility Site for any purpose other than for the operation and maintenance
of the Facility, except as otherwise required or permitted under the Operative
Documents and/or the FILOT Lease.

Abandonment of Facility. The Facility Lessee shall not voluntarily abandon the
operation, maintenance or repair the Facility, except as otherwise permitted by
the Operative Documents.

Taxes, Other Government Charges and Utility Charges. The Facility Lessee shall
pay, or cause to be paid, as and when due and prior to delinquency, all taxes,
assessments and governmental charges of any kind that may at any time be
lawfully assessed or levied against or with respect to the Facility Lessee, its
interests in the Facility Site and Facility, all utility and other charges
incurred in the operation, maintenance, use, occupancy and upkeep of the
Facility or the Facility Site, and all assessments and charges lawfully made by
any Governmental Entity for public improvements that may be secured by a Lien on
any part of the Facility; provided, that the Facility Lessee may contest in good
faith any such taxes, assessments and other charges and, in such event, may
permit the taxes, assessments or other charges so contested to remain unpaid
during any period, including appeals, when the Facility Lessee is in good faith
contesting the same, so long as (a) adequate reserves consistent with GAAP
requirements (or other security arrangements reasonably satisfactory to the
Indenture Trustee and the Owner Participant) are established and maintained in
an amount sufficient to pay any such taxes, assessments or other charges,
accrued interest thereon and potential penalties or other costs relating
thereto, or other adequate provision for the payment thereof shall have been
made, and (b) any tax, assessment or other charge determined to be due, together
with any interest or penalties thereon, is immediately paid after resolution of
such contest.

Compliance with Laws, Instruments, Etc. At its expense, the Facility Lessee
shall promptly (a) comply or cause compliance with all Applicable Laws,
including those relating to pollution control, environmental protection, equal
employment opportunity plans, Plans and employee safety, with respect to itself,
the Facility or Facility Site, whether or not compliance therewith shall require
structural changes in the Facility or any part thereof or require major changes
in operational practices or interfere with the use and enjoyment of the Facility
or any part thereof, and (b) procure, maintain and comply, or cause to be
procured, maintained and complied with, all Applicable Permits, except in the
case of clause (a) and (b) above (1) as may be contested in accordance with
Section 7 or 8 of the Facility Lease and (2) the Facility Lessee may, in good
faith and by appropriate proceedings, diligently contest the validity or
application of any such Applicable Laws in any reasonable manner which does not
involve any danger of (i) foreclosure, sale, forfeiture or loss of, or
imposition of a material Lien on the Facility, (ii) impair the use, operation or
maintenance of the Facility in any material respect, (iii) any criminal
liability being incurred by the Owner Participant, the Owner Lessor, the Lessor
Manager, the Indenture Trustee,

                                      39
<PAGE>
the Lease Indenture Company, the Pass Through Trustees, the Pass Through
Company or any Certificateholder, (iv) the Owner Participant, the Owner Lessor,
the Lessor Manager, the Indenture Trustee, the Lease Indenture Company, the
Pass Through Trustees, the Pass Through Company or any Certificateholder being
subjected to any unindemnified civil liability or of the Owner Participant or
the Owner Lessor being subject to regulation as a public utility under
Applicable Law, or (v) any Material Adverse Effect.

PUHCA. The Facility Lessee shall not take any action or fail to take any
action within its control that would subject the Owner Lessor, the Lessor
Manager, the Owner Participant, the Indenture Trustee or the Pass Through
Trustees to regulation under PUHCA.

Further Assurances. The Facility Lessee, at its own cost, expense and
liability, will cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances as may be necessary
in order to carry out the intent and purposes of this Participation Agreement
and the other Operative Documents, and the transactions contemplated hereby and
thereby. The Facility Lessee, at its own cost, expense and liability, will
cause such financing statements and fixture filings (and continuation
statements with respect thereto) as may be necessary and such other documents
as the Owner Participant, the Owner Lessor and, so long as the Lien of the
Collateral Trust Indenture shall not have been terminated or discharged, the
Indenture Trustee and the Pass Through Trustees shall reasonably request to be
recorded or filed at such places and times in such manner, and will take all
such other actions or cause such actions to be taken, as may be necessary in
order to establish, preserve, protect and perfect the right, title and interest
of the Owner Lessor in and to the Undivided Interest, the Ground Interest, any
Component or any portion of any thereof or any interest therein and the first
priority Lien intended to be created by the Collateral Trust Indenture therein.
The Facility Lessee shall promptly from time to time furnish to the Owner
Participant, the Owner Lessor or, so long as the Lien of the Collateral Trust
Indenture shall not have been terminated or discharged, the Indenture Trustee
or the Pass Through Trustees such information with respect to the Facility or
the Facility Site or the transactions contemplated by the Operative Documents
to which the Facility Lessee is a party and the performance of the FILOT Lease
as may be required to enable the Owner Participant, the Owner Lessor or, so
long as the Lien of the Collateral Trust Indenture shall not have been
terminated or discharged, the Indenture Trustee or the Pass Through Trustees,
as the case may be, to timely file with any Governmental Entity any reports and
obtain any licenses or permits required to be filed or obtained by the Owner
Lessor under any Operative Document or the FILOT Lease, the Owner Participant
as the owner of the Member Interest or the Indenture Trustee. The Facility
Lessee will preserve, protect, defend and enforce, or cause to be preserved,
protected, defended and enforced, the rights of itself, the Owner Lessor and
the Owner Participant under each and every Operative Document to which it is a
party (including by assignment and assumption of the rights thereunder),
including using commercially reasonable efforts to prosecute suits to enforce
any such rights and, at the request of Indenture Trustee, so long as the Lien
of the Collateral Trust Indenture has not been discharged or terminated (and
thereafter at the request of the Owner Participant), permit the Indenture
Trustee and the Owner Participant, at their respective cost and expense, to
participate in such capacity as it may choose in any such suit, any defense
thereof or in the preparation therefor; provided, however, that upon the
occurrence and during the continuance of any Lease Event of Default, if the
Indenture Trustee or the Owner Participant request that certain actions be
taken and the Facility Lessee fails to take the requested action, or to cause
the requested action to be taken within (5) Business

                                      40
<PAGE>
Days, the Indenture Trustee, so long as the Lien of the Collateral Trust
Indenture has not been discharged or terminated, and the Owner Lessor may, at
the Facility Lessee's reasonable expense, enforce, in its own name, or the
Facility Lessee's name, such rights of the Facility Lessee.

No Subsidiaries. The Facility Lessee shall not create or suffer to exist any
Subsidiaries.

Permitted Business. The Facility Lessee shall not engage in any business or
activities other than the lease, operation, maintenance and marketing and sale
of the output, fuel or other products from, or relating or incidental to, the
Facility leased by the Facility Lessee. Notwithstanding any of the foregoing the
Facility Lessee may not change the nature of its business.

     P.   Support Arrangements. The Facility Lessee agrees that, to the extent
that the rights described in Section 3.1(n) which have already been made
available to the Owner Lessor prior to the expiration or termination of the
Facility Lease Term, and any rights assigned pursuant to the last sentence of
this Section 5.30, are insufficient to permit on a commercially practicable
basis during the period following the expiration or termination of the Facility
Lease Term, until the end of the Facility's useful life as set forth in the
Closing Appraisal, (i) the location, occupation, interconnection (including
with respect to electricity, steam, gas and water), maintenance and repair of
the Facility, (ii) the use, operation and possession of the Facility, (iii) the
use, operation, possession, maintenance, replacement, renewal and repair of all
Improvements then required to be made to the Facility, (iv) adequate ingress to
and egress from the Facility in connection with the ownership, use, maintenance
or operation of the Facility, (v) adequate transmission of electricity from the
Facility to enable such Person to deliver the net electrical and steam output
of the Facility on a commercially reasonable basis and (vi) the interest of the
Owner Lessor (or any successor) in the Undivided Interest or the Ground
Interest, the Facility Lessee will cause Calpine to provide, and Calpine will
provide, the Owner Lessor with any additional services relating to the Owner
Lessor's Interest and operation of the Facility substantially in the same
manner as operated as of the Closing Date (to the extent Calpine or any
Affiliate thereof then owns or controls the physical assets and/or contractual
rights necessary to provide such services (or can enter into contracts on a
commercially reasonable basis for such ownership, control or other rights) and
remains in the business of providing such services) necessary to permit the
Owner Lessor to use the Facility as described in (i) through (vi) above. Such
arrangements will provide for fair market value compensation to Calpine
(payable periodically on no more frequently than a monthly and no less
frequently than on a quarterly basis) and will terminate upon the later of the
expiration or termination of the FILOT Lease or the Springing Facility Site
Lease, or earlier at the option of the Owner Lessor. The Facility Lessee shall
also, subject to obtaining any required third party consents, assign to the
Owner Lessor upon termination of the Facility Lease any support or similar
agreements to the extent relating to the Facility it has with third parties.

     Q.   Insurance. The Facility Lessee shall comply with the covenants set
forth in Schedule 5.31.

     R.   Tax Status. The Facility Lessee and each Person owning an Ownership
Interest therein will not voluntarily take any action to cause the Facility
Lessee to be subject to taxation as a separate entity for federal income tax
purposes.

                                      41
<PAGE>
     S.   Transmission Assets.

          1.   If and to the extent that on the Closing Date the FERC Order
               referred to in clause (v) of the definition thereof has not
               been obtained with respect to the jurisdictional facilities
               referred to therein (which facilities are identified in
               Exhibit A as Transmission Assets (the "Transmission Assets")),
               the Owner Participant shall, upon 5 days prior written notice
               to the Facility Lessee, and subject to the grant of the
               aforesaid order, cause the Owner Lessor to acquire an
               undivided interest equal to the Owner Lessor's Percentage in
               the Facility Lessee's right, title and interest in the
               Transmission Assets, for a price equal to $1.00. Upon payment
               by the Owner Lessor of such amount, the Facility Lessee shall
               execute and deliver such documentation as is reasonably
               requested by the Owner Lessor to transfer such undivided
               interest in the Facility Lessee's right, title and interest in
               the Transmission Assets to the Owner Lessor. Upon such
               transfer such Undivided Interest shall be and shall be deemed
               to be an integral part of the Undivided Interest (to the
               extent constituting a portion of the Facility) and the Ground
               Interest (to the extent constituting a portion of the
               leasehold interest in the Facility Site) for all purposes of
               the Operative Documents without the necessity of amending or
               supplementing any Operative Document, subject nevertheless to
               Section 14.15 hereof.

          2.   Without limiting Section 10 hereof or Section 4.2 of
               the Facility Lease, the Facility Lessee agrees that from and
               after the Closing Date and until the earlier to occur of (A)
               the transfer referred to in clause (a) above and (B) the
               termination of the Facility Lease, the Facility Lessee shall
               make available to the Owner Lessor, for no additional
               compensation, such rights in the Transmission Assets solely to
               the extent as shall be necessary so that the representation in
               Section 3.1(n) will be correct to the same extent as if such
               transfer had occurred on the Closing Date.

II.  COVENANTS OF THE OWNER LESSOR, THE TRUST COMPANY AND THE LESSOR MANAGER

Compliance with the LLC Agreement. Each of the Owner Lessor, the Trust Company
and the Lessor Manager hereby severally covenants and agrees that during the
Facility Lease Term it will:

comply with all of the terms of the LLC Agreement applicable to it; and

          1.   not amend, supplement, or otherwise modify Section 9.1, 9.3, 13.1
               or clause (i) of Section 13.2 of the LLC Agreement without the
               prior written consent of the Facility Lessee so long as no
               Significant Lease Default or Lease Event of Default has
               occurred and is continuing and the Indenture Trustee so long
               as the Lien of the Collateral Trust Indenture has not been
               terminated or discharged.

                                      42
<PAGE>
Owner Lessor's Liens. The Owner Lessor, the Trust Company and the Lessor Manager
each covenants severally and as to itself only that it will not directly or
indirectly create, incur, assume or suffer to exist any Owner Lessor's Lien
attributable to it and will promptly notify the Facility Lessee, the Owner
Participant and the Indenture Trustee of the imposition of any such Lien of
which it has Actual Knowledge and shall promptly, at its own expense, take such
action as may be necessary to duly discharge such Owner Lessor's Lien
attributable to it.

Amendments to Operative Documents. The Lessor Manager, the Trust Company and the
Owner Lessor each covenants severally and as to itself only that it will not
unless such action is expressly permitted by the Operative Documents (a) through
its own action terminate any Operative Document to which it is a party, (b)
amend, supplement, waive or modify (or consent to any such amendment,
supplement, waiver or modification) such Operative Documents or the FILOT Lease
in any manner or (c) except as provided in Section 11 hereof or Section 2.10 or
Section 5.6 of the Collateral Trust Indenture, take any action to prepay or
refund the Lessor Notes or amend any of the payment terms of the Lessor Notes
without, in each case, the prior written consent of the Facility Lessee so long
as no Significant Lease Default or Lease Event of Default shall have occurred
and be continuing and, in the case of clause (a) or (b), the Indenture Trustee
so long as the Lien of the Collateral Trust Indenture has not been terminated or
discharged.

Transfer of the Owner Lessor's Interest. Other than as permitted by the
Operative Documents, each of the Lessor Manager and the Owner Lessor covenants
that it will not assign, pledge, sell, lease, convey or otherwise transfer any
of its then existing right, title or interest in and to the Owner Lessor's
Interest, the Lessor Estate or the other Operative Documents.

Owner Lessor; Lessor Estate. Each of the Trust Company, the Lessor Manager and
the Owner Lessor covenants that it will not voluntarily take any action to
subject the Owner Lessor or the Lessor Estate to the provisions of any
applicable bankruptcy, insolvency or similar law (as now or hereafter in
effect).

Limitation on Indebtedness and Actions. Each of the Lessor Manager and the Owner
Lessor covenants that it will not incur any Indebtedness nor enter into any
business or activity except as required or expressly permitted by any Operative
Document.

Change of Location. The Owner Lessor shall provide the Owner Participant, the
Indenture Trustee, the Certificateholders, the Pass Through Trustees and the
Facility Lessee 30 days' written notice of any relocation of the Owner Lessor's
chief executive office or the place where documents and records relating to the
Owner Lessor or the Lessor Estate are kept from the location set forth in
Section 3.2(g) and of any change in its name.

    B.   Bankruptcy of Owner Lessor.

         Each of the Trust Company, the Lessor Manager and the Owner Lessor
hereby agrees severally and as to itself only that it shall not voluntarily
take any action that shall, or cause any action to be taken that is intended
to, submit the Owner Lessor, as debtor, to any proceeding under any Applicable
Law involving bankruptcy, insolvency, reorganization or other laws affecting the
rights of creditors generally unless a Lease Event of Default or a Significant

                                      43
<PAGE>
Lease Default shall have occurred and be continuing (in which case, if the Lien
of the Collateral Trust Indenture shall not have been discharged, the Trust
Company or the Owner Lessor shall not take any such action unless the Indenture
Trustee shall have given its prior written consent to such action in its sole
discretion.

COVENANTS OF THE OWNER PARTICIPANT

Restrictions on Transfer of Member Interest.

The Owner Participant covenants and agrees that it shall not during the
     Facility Lease Term assign, convey or transfer any of its right, title or
     interest in the Member Interest without the prior written consent of the
     Facility Lessee and, so long as the Lien of the Collateral Trust Indenture
     has not been terminated or discharged, without the prior written consent of
     the Indenture Trustee; provided, however, that the Owner Participant may,
     subject to Section 7.6, assign, convey or transfer all or any part of its
     interest in the Member Interest without such consent to a Person (the
     "Transferee") which shall assume the duties and obligations of the Owner
     Participant under the Operative Documents with respect to the interest
     being transferred pursuant to an OP Assignment and Assumption Agreement
     substantially in the form of Exhibit J hereto, if each of the following
     conditions shall have been satisfied on or prior to such transfer:

the Facility Lessee, the Indenture Trustee and the Pass Through Trustees shall
     have received an opinion(s) of counsel (including an opinion with respect
     to a guaranty pursuant to clause (iii) of this Section 7.1, if applicable),
     which opinion(s) and counsel are reasonably satisfactory to each such
     recipient and consistent in scope to the opinions delivered on behalf of
     the Owner Participant at the Closing, including that all regulatory
     approvals required in connection with such transfer or necessary to assume
     the Owner Participant's obligations under the Operative Documents shall
     have been obtained and that the proposed transfer of the Member Interest
     will not require registration under the Securities Act;

the Transferee shall be a "United States person" within the meaning of Section
7701(a)(30) of the Code;

the Transferee shall be either (A) an Affiliate of the transferor Owner
     Participant which does not otherwise qualify under clause (B) below
     (but in any event, such Affiliate shall not be a Competitor of Calpine);
      provided that all of the payment and performance obligations of the
     Transferee with respect to the interest being transferred under the
     Operative Documents shall be guaranteed by the transferor Owner
     Participant, or a Person then providing a guaranty of the transferor
     Owner Participant's obligations hereunder, pursuant to an OP Parent
     Guaranty or (B) a Person which meets, or the payment and performance
     obligations of which with respect to the interest being transferred under
     the Operative Documents are guaranteed (pursuant to a OP Parent Guaranty)
     by a Person (the transferor Owner Participant or such other guarantor,
     the "Transferee Guarantor") which meets, the following criteria: (1) the
     tangible net worth of the Transferee or Transferee Guarantor, is at least
     equal to $75 million calculated in accordance with GAAP; and (2) unless
     waived in writing by the Facility Lessee prior to such transfer, such
     Transferee is not a Competitor of Calpine or in material litigation

                                      44
<PAGE>
     against the Facility Lessee or any Affiliate of the Facility Lessee
     without the consent of the Facility Lessee; and

upon consummation of such transfer, there shall not be more than four (4) Owner
     Participants for the Overall Transaction; provided that any related Owner
     Participants that shall have the same decision maker and vote their
     interest together as a single vote shall count as one for purposes of this
     clause (iv).

          Notwithstanding the foregoing, the restrictions set forth in this
Section 7.1 shall not inure to the benefit of the Facility Lessee if such
transfer occurs during the continuance of a Significant Lease Default or Lease
Event of Default.

For purposes of determining whether a Transferee is a "Competitor" of Calpine,
     Calpine shall provide to the transferor Owner Participant on or prior to
     the Closing Date a list of entities which Calpine reasonably believes in
     its good faith judgment are competitors of Calpine or any of its
     Affiliates, in the business in which Calpine or any of its Affiliates is
     engaged as of the Closing Date, which list shall be attached to this
     Agreement as Exhibit K. Any such Person on such list shall be deemed to be
     a "Competitor" for purposes of Section 7.1(a). The initial list of
     Competitors may be modified or supplemented (in a manner consistent with
     the first sentence of this clause (b)), from time to time, but no later
     than five (5) Business Days after the Facility Lessee receives each notice
     from the Owner Participant of its intent to transfer its interest and, in
     addition, no more than once in any calendar year plus each time the
     Facility Lessee receives such notice of transfer from the Owner
     Participant, and such list as modified shall govern for the purposes of
     this Section 7.1(b).

The Facility Lessee shall not be responsible for any adverse tax consequence to
     the Owner Lessor or the Owner Participant resulting from any transfer
     pursuant to this Section 7.1 and the Pricing Assumptions shall not be
     changed as a result of any such transfer.

The Owner Participant shall give the Owner Lessor, the Indenture Trustee and
     the Facility Lessee ten (10) Business Days' prior written notice of such
     transfer, specifying the name and address of any proposed Transferee and
     such additional information as shall be necessary to determine whether the
     proposed transfer satisfies the requirements of this Section 7.1. If
     requested by the Owner Participant or the Indenture Trustee, the Facility
     Lessee will acknowledge qualifying transfers. All reasonable fees, expenses
     and charges of the Indenture Trustee, the Pass Through Trustees, and the
     Facility Lessee (including reasonable attorneys' fees and expenses in
     connection with any such transfer or proposed transfer), including any of
     the foregoing relating to any amendments to the Operative Documents
     required in connection therewith, shall be paid on an After-Tax Basis by
     the Owner Lessor, without any right of indemnification from the Facility
     Lessee or any other Person; provided, however, that the Owner Participant
     shall have no obligation to pay fees, expenses or charges of the Facility
     Lessee as a result of any transfer while a Significant Lease Default or a
     Lease Event of Default is continuing, in which case the Facility Lessee
     shall be obligated to pay such costs.

Upon any such transfer in compliance with this Section 7.1, (i) such Transferee
     shall (x) be deemed the "Owner Participant" for all purposes, and (y) enjoy
     the rights and privileges and

                                      45
<PAGE>
     perform the obligations of the Owner Participant hereunder and under each
     of the OP Assignment and Assumption Agreement, the Calpine Guaranty and
     each other Operative Document to which such Owner Participant is a party,
     and each reference in this Agreement, the Calpine Guaranty and each other
     Operative Document to the "Owner Participant" shall thereafter be deemed
     to include such Transferee for all purposes and (ii) the transferor Owner
     Participant and the OP Guarantor, if any, of such transferor Owner
     Participant's obligations shall be released from all obligations
     hereunder and under each other Operative Document to which such
     transferor or OP Guarantor is a party or by which such transferor Owner
     Participant or OP Guarantor is bound to the extent such obligations are
     expressly assumed by a Transferee meeting the requirements of this
     Section 7.1; provided, however, that in no event shall any such transfer
     waive or release the transferor or its OP Guarantor from any liability
     accruing or existing in respect of any period occurring on or prior to or
     occurring simultaneously with such transfer.

The transfer restrictions set forth in this Section 7.1 (other than the
     requirement that the Owner Participant and the Transferee enter into an OP
     Assignment and Assumption Agreement) shall also apply to any transfer of
     the equity ownership interests of an Owner Participant which has as its
     sole (or substantially equivalent to sole) business activity its
     participation in the transactions contemplated by the Operative Documents.
     In the case of such a transfer of equity ownership interests which
     satisfies such restrictions of this Section 7.1, the Owner Participant's
     obligations under the Operative Documents shall continue, but the Owner
     Participant shall, except in the case of a transfer to a transferee
     described in clause (a)(iii)(A) above, procure a new OP Parent Guaranty
     from a guarantor meeting the requirements of clause (a)(iii)(B) above.

Owner Participant's Liens. The Owner Participant covenants that it will not
directly or indirectly create, incur, assume or suffer to exist any Owner
Participant's Lien and the Owner Participant shall promptly notify the Facility
Lessee and the Indenture Trustee of the imposition or existence of any such Lien
of which the Owner Participant has Actual Knowledge and shall promptly, at its
own expense, take such action as may be necessary to duly discharge such Owner
Participant's Lien.

Amendments or Revocation of LLC Agreement. Notwithstanding anything to the
contrary contained in the LLC Agreement, the Owner Participant covenants that
during the Facility Lease Term it will not (a) amend, supplement, or otherwise
modify Section 9.1, 9.3, 13.1 or clause (i) of 13.2 of the LLC Agreement without
the prior written consent of the Facility Lessee so long as no Significant Lease
Default or Lease Event of Default has occurred and is continuing, and without
the prior written consent of the Indenture Trustee so long as the Lien of the
Collateral Trust Indenture has not been terminated or discharged, or (b) revoke,
or otherwise waive compliance with or terminate the LLC Agreement without the
prior written consent of the Facility Lessee so long as no Significant Lease
Default or Lease Event of Default has occurred and is continuing, and the
Indenture Trustee so long as the Lien of the Collateral Trust Indenture has not
been terminated or discharged.

Bankruptcy Filings. The Owner Participant agrees that it will not file a
petition, or join in the filing of a petition, seeking reorganization,
arrangement, adjustment or composition of, or in

                                      46
<PAGE>
respect of, the Owner Lessor under the Bankruptcy Code, or any other applicable
federal or state law or the law of the District of Columbia.

Instructions. The Owner Participant agrees that it will not instruct the Owner
Lessor to take any action prohibited by this Agreement or any other Operative
Document.

Right of First Refusal. In the event the Owner Participant desires to sell,
lease, convey or otherwise transfer its Member Interest or cause the Owner
Lessor to sell all or substantially all of the Owner Lessor's Interest at any
time during the three (3) year period commencing on the termination or
expiration of the Facility Lease (except in the event that a Lease Event of
Default shall have existed at such time of termination or expiration), any such
sale or other transfer shall be subject to the Facility Lessee's right of first
refusal on the terms and conditions set forth in this Section 7.6. The Owner
Participant shall give the Facility Lessee prompt written notice of all bona
fide offers that have been received from any other Person to purchase or acquire
its interest of the Owner Lessor's Interest or the Member Interest of the Owner
Participant, and which offers it wishes to accept, together with a full and
complete statement of the price and all of the terms, conditions and provisions
contained in such offers. The Facility Lessee shall thereafter have the right
within a period of 45 days from and after the receipt by them of such notice
(the "Notice Period") to notify the Owner Participant of its intent to exercise
its right of first refusal. If the Facility Lessee elects to exercise the right
provided in the preceding sentence, it will within 60 days of such notice (the
"Agreement Period") execute a contract on the same terms and conditions as the
offer giving rise to such right. If the Facility Lessee does not give such
notice to the Owner Participant within the 45 day period or execute such a
contract within 60 days of such notice, the Owner Participant will be free to
proceed under the terms and conditions set forth in its notice to the Facility
Lessee, unless the failure to execute the contract within 60 days is
attributable to acts or omissions of the Owner Participant. In the event that
such terms are revised in any way that changes the agreement for sale, lease,
conveyance or transfer such that the terms of the sale are less favorable to the
Owner Participant (it being understood and agreed that any reduction in the
price or a change in the terms of payment thereof in a manner beneficial to the
potential purchaser shall be deemed to be less favorable to the Owner
Participant), the Owner Participant shall again comply with the notice and right
of first refusal provisions of this Section prior to entering into such revised
agreement; provided that, for such revised offer, the Notice Period shall be 10
Business Days from the date of such new notice, and the Agreement Period shall
not exceed 45 days from the date of the Facility Lessee's notice accepting such
new terms.

     Notwithstanding the foregoing, if, concurrently with the Owner
Participant's offer to sell its Member Interest pursuant to this Section 7.6,
it or one of its Affiliates offers to sell any interest in an owner lessor who
has entered into any Other Broad River Facility Lease, then the Facility Lessee
shall exercise its purchase rights under this Section 7.6 only if, concurrently
therewith, it exercises its purchase rights under Section 7.6 of each such
Other Broad River Facility Lease.

     C.   Prohibition on Fundamental Changes. If the Owner Participant is an
entity which has as its sole (or substantially equivalent to sole) business
activity, the participation in the transactions contemplated by the Operative
Documents, the Owner Participant shall not change

                                      47
<PAGE>
its form of organization and shall not enter into or engage in any business
other than as contemplated by the Operative Documents and the activities related
thereto.

                                      48
<PAGE>
     D.   Appointment of Successor Lessor Manager. Notwithstanding any other
provision of this Agreement, a successor Lessor Manager shall not be appointed
by the Owner Participant without the consent of the Facility Lessee and, so
long as the Lien of the Collateral Trust Indenture has not been terminated or
discharged and the Indenture Trustee unless such successor Lessor Manager (a)
meets the requirements of the LLC Agreement, (b) has a combined capital and
surplus of at least $150 million, and (c) the Facility Lessee and, so long as
Lien of the Collateral Trust Indenture has not been terminated or discharged,
the Indenture Trustee, shall have received at the expense of Facility Lessee on
an After-Tax Basis: (i) an opinion or opinions of counsel, such counsel and
such opinion to be reasonably acceptable to such parties, to the effect that no
regulatory consents or approvals are required, or (ii) such other documentation
reasonably satisfactory to the Facility Lessee or the Indenture Trustee as the
case may be.

     E.   Cooperation. The Owner Lessor agrees, and each of the Owner
Participant and the Lessor Manager agrees to cause the Owner Lessor to, at the
request of the Facility Lessee and at the sole cost and expense of the Facility
Lessee on an After-Tax Basis, take such actions as may be necessary for the
Owner Lessor to take as the holder of the leasehold interest in the Facility
for purposes of obtaining the valid and effective issue, transfer or amendment,
as the case may be, of all Governmental Approvals to the extent the same are
required for the use, ownership, operation or maintenance of the Facility, the
Facility Site, the Undivided Interest, the Ground Interest or any Component by
the Facility Lessee or any permitted assignee of the Facility Lessee in the
manner contemplated by the Operative Documents, except to the extent the same
involves any (i) material risk of foreclosure, sale, forfeiture or loss of, or
imposition of a Lien (other than a Permitted Lien) on, the Facility, the
Undivided Interest or the Facility Site or the impairment of the use, operation
or maintenance of the Facility or the Facility Site in any material respect,
(ii) the risk of criminal liability being incurred by the Owner Lessor, the
Owner Participant, the Equity Investor or the OP Guarantor, or (so long as the
Lessor Notes are outstanding and the Lien of the Lease Indenture has not been
discharged) the Indenture Trustee or the Pass Through Trustee or any of their
respective Affiliates or (iii) material risk of any material adverse effect on
the interests of the Owner Lessor, the Owner Participant, the Equity Investor
or the OP Guarantor, or (so long as the Lessor Notes are outstanding and the
Lien of the Collateral Trust Indenture has not been discharged) the Indenture
Trustee or the Pass Through Trustee or any of their respective Affiliates
(including, without limitation, subjecting any such Person to regulation as a
public utility under any applicable law. The Facility Lessee shall pay on an
After-Tax Basis all reasonable costs and expenses (including, without
limitation, the reasonable fees and expenses of counsel) of the Owner Lessor
and each other Person party to an Operative Document incurred in connection
with any such action. It is understood and agreed that, with respect to the
action requested of it, and taken by it, under this Section 7.9, the Owner
Lessor, the Owner Participant and the Lessor Manager shall make no
representation or warranty as to, and shall have no responsibility for, the
effectiveness of such action to accomplish or promote the objective intended by
the Person making such request.

COVENANTS OF THE INDENTURE TRUSTEE AND THE PASS THROUGH TRUSTEES

Indenture Trustee's Liens. Neither the Lease Indenture Company, nor the
Indenture Trustee will directly or indirectly create, incur, assume or suffer to
exist any Indenture Trustee's Lien attributable to it and arising out of events
or conditions not related to its rights in the Indenture Estate or the
administration thereof, and will promptly notify the Owner Participant, the
Lessor

                                      49
<PAGE>
Manager, the Owner Lessor and the Facility Lessee of the imposition of
any such Lien of which it has Actual Knowledge and shall promptly (and in any
event within 30 days of obtaining Actual Knowledge of such Lien), at its own
expense, take such action as may be necessary to duly discharge such Indenture
Trustee's Lien.

Pass Through Trustees' Covenant Not to Transfer Lessor Notes. The Pass Through
Trustees agree that it will not transfer any Lessor Note (or any part thereof)
to any entity (except to a successor Pass Through Trustee appointed pursuant to
the terms of the Pass through Trust Agreement) until it receives from such
entity a certification which makes a representation and warranty as of the date
of such transfer that no part of the funds to be used by it for the purchase and
holding of such Lessor Note (or any part thereof) constitutes assets of any Plan
or that such purchase and holding will be covered by a prohibited transaction
class exemption issued by the U.S. Department of Labor.

INDEMNIFICATION

General Indemnity.

Claims Indemnified. Subject to the exclusions stated in paragraph (b) below,
     the Facility Lessee agrees to indemnify, protect, defend and hold
     harmless, and do hereby indemnify the Owner Participant, the Owner
     Lessor, the Trust Company, in its individual capacity, the Lessor
     Manager, the Lease Indenture Company in its individual capacity, the
     Indenture Trustee, each Certificateholder, the Pass Through Company in
     its individual capacity, the Pass Through Trustees, and their respective
     Affiliates, successors, assigns, agents, directors, officers and
     employees (each an "Indemnitee") against any and all Claims (whether or
     not any of the transactions contemplated by the Operative Documents are
     consummated) imposed on, incurred or suffered by or asserted against any
     Indemnitee in any way relating to or resulting from or arising out of or
     attributable to:

the construction, financing, refinancing, acquisition, operation, rebuilding,
     warranty, ownership, possession, maintenance, repair, lease, condition,
     alteration, modification, restoration, refurbishing, return, purchase, sale
     or other disposition, insuring, sublease, or other use or non-use of the
     Undivided Interest, the Ground Interest, the Facility, the Facility Site or
     any Component or any portion of any thereof or any interest therein;

the conduct of the business or affairs of the Facility Lessee or Calpine and any
     other business or affairs conducted at the Facility or the Facility Site;

the manufacture, design, purchase, acceptance, rejection, delivery or condition
     of, or improvement to, the Facility, the Facility Site or any Component, or
     any portion of any thereof or any interest therein;

the Facility Lease, the Facility Site Lease, or any other Operative Document,
     the execution or delivery thereof or the performance, enforcement,
     attempted enforcement or amendment of any terms thereof, or the
     transactions contemplated thereby or resulting therefrom;

                                      50
<PAGE>
any Environmental Condition at, related to or caused by the Facility or the
     Facility Site or any Component, or any portion thereof, including, for the
     avoidance of doubt, any such Environmental Condition existing prior to the
     Closing Date;

the offer, issuance, sale, acquisition or delivery of the Lessor Notes, the
     Certificates, any Additional Lessor Notes, any Additional Certificates or
     any refinancing thereof;

the reasonable and documented costs and expenses of the Transaction Parties in
     connection with amendments or supplements to the Operative Documents and
     the FILOT Lease requested by the Facility Lessee, or resulting from the
     actions of the Facility Lessee or in connection with any Lease Default or
     Lease Event of Default;

the imposition of any Lien other than with respect to a particular Indemnitee
     (or a Related Party), an Owner Lessor's Lien, an Owner Participant's Lien
     or Indenture Trustee's Lien attributable to such Indemnitee;

any violation by, or liability relating to, the Facility Lessee or any other
     Calpine Party, the Facility or the Facility Site, of, or under, any
     Applicable Law, whether now or hereafter in effect (including Environmental
     Laws), or any action of any Governmental Entity or other Person taken with
     respect to the Facility, the Facility Site, the Operative Documents, the
     FILOT Lease or the interests of the Owner Participant, the Owner Lessor,
     the Indenture Trustee or the Pass Through Trustees, or under the Operative
     Documents or the FILOT Lease or the presence, use, storage, release,
     threatened release, transportation, arrangement for transportation,
     treatment, arrangement for treatment, manufacture, disposal or arrangement
     for disposal of any Hazardous Substance in, at, under or from the Facility
     or the Facility Site, including, for the avoidance of doubt, any of the
     foregoing existing or occurring prior to the Closing Date;

the non-performance or breach by the Facility Lessee, any Calpine Party or the
     County of any obligation contained in this Agreement or any other Operative
     Document or the FILOT Lease or the falsity or inaccuracy of any
     representation, warranty or obligation of any such Person contained in this
     Agreement or any other Operative Document or the FILOT Lease;

the continuing fees (if any) and expenses of the Owner Lessor and the Lessor
     Manager (including the reasonable compensation and expenses of their
     respective counsel) arising out of the Owner Lessor's discharge of its
     duties under or in connection with the Operative Documents or the FILOT
     Lease (other than the Facility Lease, the Facility Site Lease, the FILOT
     Lease and the Springing Facility Site Lease);

the continuing fees (if any) and expenses of the Lease Indenture Company, the
     Indenture Trustee, the Pass Through Company, the Pass Through Trustees,
     (including the reasonable compensation and expenses of their respective
     counsel, accountants and other professional persons) arising out of the
     discharge of their respective duties as provided in the Operative Documents
     or the FILOT Lease; or

any Applicable Permits including any obligations imposed by FERC in connection
     with the Facility or the Facility Site.

                                      51
<PAGE>
Claims Excluded. Any Claim, to the extent relating to or resulting from or
     arising out of or attributable to any of the following, is excluded from
     the Facility Lessee's obligations to indemnify, defend, protect and hold
     harmless any Indemnitee under this Section 9.1:

(A)  acts, omissions or events with respect to the Facility first occurring
     after the later of (x) expiration or early termination of the Facility
     Lease and, where required by the Facility Lease, surrender to the Owner
     Lessor or its successor of its interest in the Facility and the Facility
     Site in compliance with the provisions of the Facility Lease and the
     Facility Site Lease, respectively, and (y) if the Owner Lessor exercises
     its option set forth in Article VI of the Springing Facility Site Lease,
     the performance by the Facility Lessee of all obligations required to be
     performed by it thereunder or (B), if the Closing Date does not occur,
     acts, omission or events occurring after the date set forth in Section
     2.2(e);

with respect to a particular Indemnitee and Related Parties, any offer, sale,
     assignment, transfer or other disposition (voluntary or involuntary) by or
     on behalf of (A) in the case of the Owner Participant, the Owner
     Participant of its Member Interest or with respect to any Related Party,
     its direct or indirect interest in the Owner Participant, (B) in the case
     of the Owner Lessor, and if such action is taken at the written direction
     of the Owner Participant, the Owner Participant, and Related Parties, the
     Owner Lessor of all or any of the Owner Lessor's Interest, (C) the
     Indenture Trustee of all or any of its interest in the Lessor Notes,
     unless, in any such case referred to in this paragraph (ii), such transfer
     is required by the terms of the Operative Documents or occurs during the
     continuance of a Lease Event of Default; (provided that this paragraph (ii)
     shall not serve to cap the indemnity to be received by a transferee
     Indemnitee for a Claim (other than a Claim relating solely to or arising
     solely out of any offer, transfer, sale, assignment or other disposition of
     any such rights or interests) based on what the relevant transferor
     Indemnitee would have received had no such transfer occurred);

with respect to any Indemnitee, any Claim attributable to (i) the gross
     negligence or willful misconduct of such Indemnitee or a Related Party
     except to the extent such gross negligence or willful misconduct is
     attributable to any breach by the Facility Lessee (or any of them) or any
     other Calpine Party of any covenant, representation or warranty contained
     in any Operative Document or the FILOT Lease or (ii) any violation of
     Applicable Law by any such Person except to the extent attributable to a
     violation of Applicable Law by the Facility Lessee or any other Calpine
     Party or to any breach by the Facility Lessee or such other Calpine Party
     of any covenant, representation or warranty contained in any Operative
     Document or the FILOT Lease;

          a)   as to any Indemnitee, any Claim to the extent attributable to the
               noncompliance of such Indemnitee or a Related Party, with any
               of the terms of, or any misrepresentation or breach of
               warranty by such Indemnitee or Related Party contained in any
               Operative Document made by such Indemnitee or Related Party or
               any breach by such Indemnitee or a Related Party of any
               covenant contained in any Operative Document or any breach by
               such Indemnitee or a Related Party of any covenant contained
               in any Operative Document made by such Indemnitee or Related
               Party

                                      52
<PAGE>
               except to the extent attributable to any breach by the
               Facility Lessee or any other Calpine Party of any covenant,
               representation or warranty contained in any Operative Document;

any Claim constituting or arising from an Owner Lessor's Lien;

with respect to the Indenture Trustee and the Lease Indenture Company, any
     Claim constituting or arising from a Indenture Trustee's Lien;

with respect to the Owner Participant, any claim constituting or arising from an
     Owner Participant's Lien;

any Claim that is a Tax, or is a cost of contesting a Tax whether or not the
     Facility Lessee is required to indemnify therefor pursuant to Section 9.2
     hereof or under the Tax Indemnity Agreement;

any failure on the part of the Lessor Manager to distribute in accordance with
     the LLC Agreement any amounts received by it under the Operative Documents
     and distributable by it thereunder;

a Claim arising out of an Indenture Default or Lease Indenture Event of
     Default that is not also (or attributable to) a Lease Default or Lease
     Event of Default;

with respect to a particular Indemnitee and Related Party, any obligation or
     liability expressly assumed in any Operative Document by the Indemnitee
     seeking indemnification;

any Claim that constitutes scheduled principal and/or interest on the Lessor
     Notes, Additional Lessor Notes, or the corresponding payments under the
     Certificates or any Additional Certificates; and

any Claim relating to the payment of any amount which constitutes Transaction
     Costs which the Owner Participant is obligated to pay pursuant to Section
     2.3(a) hereof or any other amount to the extent such Indemnitee or a
     Related Party has expressly agreed in any Operative Document to pay such
     amount without express right of reimbursement;

provided that the terms "omission," "gross negligence" and "willful misconduct,"
when applied with respect to the Owner Lessor, the Owner Participant, the
Indenture Trustee, the Pass Through Trustees or any Affiliate of any thereof,
shall not include any liability imputed as a matter of law to such Indemnitee
solely by reason of any such entity's interest in the Facility or the Facility
Site or such Indemnitee's failure to act in respect of matters which are or were
the obligation of the Facility Lessee under this Agreement or any other
Operative Document. Nothing herein shall be deemed to constitute a guaranty of
any useful life or any present or future residual value of the Facility or a
guaranty that any amount of any Secured Indebtedness will be paid.

Insured Claims. Subject to the provisions of paragraph (e) of this Section
     9.1, in the case of any Claim indemnified by the Facility Lessee hereunder
     which is covered by a policy of insurance maintained by the Facility
     Lessee, each Indemnitee agrees, unless it and each other

                                      53
<PAGE>
     Indemnitee shall waive its rights to indemnification (for itself and
     each Related Party thereto) in a manner reasonably acceptable to the
     Facility Lessee, to cooperate, at the sole cost and expense of the
     Facility Lessee, with insurers in exercise of their rights to
     investigate, defend or compromise such Claim.

After-Tax Basis. The Facility Lessee agrees that any payment or indemnity
     pursuant to this Section 9.1 in respect of any Claim shall be made on an
     After-Tax Basis to the Indemnitees.

Claims Procedure. Each Indemnitee shall promptly after such Indemnitee shall
     have Actual Knowledge thereof notify the Facility Lessee of any Claim as to
     which indemnification is sought; provided, that the failure so to notify
     the Facility Lessee shall not reduce or affect the Facility Lessee's
     liability which it may have to such Indemnitee under this Section 9.1, and
     no payment hereunder by the Facility Lessee to an Indemnitee shall be
     deemed to constitute a waiver or release of any right or remedy that the
     Facility Lessee may have against any such Indemnitee for actual damages
     resulting directly from the failure or delay of such Indemnitee to give the
     Facility Lessee such notice. Subject to the foregoing, any amount payable
     to any Indemnitee pursuant to this Section 9.1 shall be paid within thirty
     (30) days after receipt of such written demand therefor from such
     Indemnitee, accompanied by a certificate of such Indemnitee stating in
     reasonable detail the basis for the indemnification thereby sought and (if
     such Indemnitee is not a party hereto) an agreement to be bound by the
     terms hereof as if such Indemnitee were such a party. The foregoing shall
     not, however, constitute an obligation to disclose confidential information
     of any kind without the execution of an appropriate confidentiality
     agreement. Promptly after the Facility Lessee receives notification of such
     Claim accompanied by a written statement describing in reasonable detail
     the Claims which are the subject of and basis for such indemnity and the
     computation of the amount so payable, the Facility Lessee shall, without
     affecting its obligations hereunder, notify such Indemnitee whether it
     intends to pay, object to, compromise or defend any matter involving the
     asserted liability of such Indemnitee. The Facility Lessee shall have the
     right to investigate and so long as no Significant Lease Default or Lease
     Event of Default shall have occurred and be continuing, the Facility Lessee
     shall have the right in its sole discretion, to defend or compromise any
     Claim for which indemnification is sought under this Section 9.1 which the
     Facility Lessee acknowledges is subject to indemnification hereunder;
     provided that no such defense or compromise shall involve any danger of (i)
     foreclosure, sale, forfeiture or loss of, or imposition of a Lien on any
     part of the Facility, the Undivided Interest, the Ground Interest, the
     Facility Site, the Lessor Estate or the Indenture Estate or the impairment
     of the Facility or the Facility Site, in any material respect or (ii) any
     criminal liability being incurred or any material adverse effect on such
     Indemnitee; provided, further, that no Claim shall be compromised by the
     Facility Lessee on a basis that admits any criminal violation or gross
     negligence or willful misconduct on the part of such Indemnitee without the
     express written consent of such Indemnitee; and provided, further, that to
     the extent that other Claims unrelated to the transactions contemplated by
     the Operative Documents and the FILOT Lease (giving effect to its
     assignment to the Owner Lessor pursuant to the Assignment Agreement) are
     part of the same proceeding involving such Claim, the Facility Lessee may
     assume responsibility for the contest or compromise of such Claim only if
     the same may be and is severed from such other Claims (and each Indemnitee
     agrees to use reasonable efforts to obtain such a severance). In the event
     that in the course of the investigation or defense of a claim, the Facility
     Lessee shall in good faith reasonably

                                      54
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     determine that it is not liable for indemnification with respect thereto
     under this Section 9.1, it may give notice to the applicable Indemnitee
     of such fact; and, in such case, any acknowledgment, theretofore made by
     the Facility Lessee of liability with respect to such claim under this
     Section 9.1 shall be deemed revoked, and the Facility Lessee may
     thereupon cease to defend such claim; provided that (i) the Facility
     Lessee shall have given the Indemnitee reasonable prior notice of its
     intention to renounce such acknowledgment, (ii) the Facility Lessee's
     conduct regarding the defense of such claim or any decision to withdraw
     from such defense shall not prejudice or have prejudiced the Indemnitee's
     ability to contest such claim (taking into account, among other things,
     the timing of the Facility Lessee's withdrawal and the theory or theories
     upon which the Facility Lessee shall have based its defense), and (iii)
     the Facility Lessee shall have given such Indemnitee all materials,
     documents and records relating to its defense of such claim as such
     Indemnitee shall have reasonably requested in connection with the
     assumption by such Indemnitee of the defense of such claim at the cost
     and expense of the Facility Lessee. In the event that the Facility Lessee
     shall cease to defend any claim pursuant to the preceding sentence, the
     Facility Lessee shall indemnify each Indemnitee, without regard to any
     exclusion that might otherwise apply hereunder, to the extent that the
     actions of the Facility Lessee in defending such claim or the manner or
     time of the Facility Lessee's election to withdraw from the defense of
     such claim shall have caused such Indemnitee to incur any loss, cost,
     liability or expense which such Indemnitee would not have incurred had
     the Facility Lessee not ceased to defend such claim in such manner or
     such time. If the Facility Lessee elects, subject to the foregoing, to
     compromise or defend any such asserted liability, it may do so at its own
     expense and by counsel selected by it. Upon the Facility Lessee's
     election to compromise or defend such asserted liability and prompt
     notification to such Indemnitee of its intent to do so, such Indemnitee
     shall cooperate at the Facility Lessee's expense with all reasonable
     requests of the Facility Lessee in connection therewith and will provide
     the Facility Lessee with all information not within the control of the
     Facility Lessee as is reasonably available to such Indemnitee which the
     Facility Lessee may reasonably request; provided, however, that such
     Indemnitee shall not, unless otherwise required by Applicable Law, be
     obligated to disclose to the Facility Lessee or any other Person, or
     permit the Facility Lessee or any other Person to examine (i) any income
     tax returns of the Owner Participant or (ii) any confidential information
     or pricing information not generally accessible by the public possessed
     by the Owner Participant (and, in the event that any such information is
     made available, the Facility Lessee shall treat such information as
     confidential and shall take all actions reasonably requested by such
     Indemnitee for purposes of obtaining a stipulation from all parties to
     the related proceeding providing for the confidential treatment of such
     information from all such parties). Where the Facility Lessee, or the
     insurers under a policy of insurance maintained by the Facility Lessee
     undertakes the defense of such Indemnitee with respect to a Claim (with
     counsel reasonably satisfactory to such Indemnitee and without
     reservation of rights against such Indemnitee), no additional legal fees
     or expenses of such Indemnitee in connection with the defense of such
     Claim shall be indemnified hereunder unless such fees or expenses were
     incurred at the request of the Facility Lessee or such insurers.
     Notwithstanding the foregoing, an Indemnitee may participate at its own
     expense in any judicial proceeding controlled by the Facility Lessee
     pursuant to the preceding provisions, but only to the extent that such
     party's participation does not in the reasonable opinion of counsel to
     the Facility Lessee interfere with such control or defense of such claim;
     provided, however, that such

                                      55
<PAGE>
     party's participation does not constitute a waiver of the indemnification
     provided in this Section 9.1; provided, further, that if and to the
     extent that (i) such Indemnitee is advised by counsel that an actual or
     potential conflict of interest exists where it is advisable for such
     Indemnitee to be represented by separate counsel or (ii) there is a risk
     that such Indemnitee may be subject to criminal liability and such
     Indemnitee informs the Facility Lessee that such Indemnitee desires to be
     represented by separate counsel, such Indemnitee shall have the right to
     control its own defense of such Claim and the reasonable fees and
     expenses of such defense (including, without limitation, the reasonable
     fees and expenses of such separate counsel) shall be borne by the
     Facility Lessee. So long as no Lease Event of Default described in clause
     (a), (b), (g) or (h) of Section 16 of the Facility Lease has occurred and
     be continuing, no Indemnitee shall enter into any settlement or other
     compromise with respect to any Claim without the prior written consent of
     the Facility Lessee unless (i) the Indemnitee waives its rights to
     indemnification hereunder or (ii) the Facility Lessee has not
     acknowledged their indemnity obligation with respect thereto and there is
     a significant risk that a default judgment will be entered against such
     Indemnitee. Nothing contained in this Section 9.1(e) shall be deemed to
     require an Indemnitee to contest any Claim or to assume responsibility
     for or control of any judicial proceeding with respect thereto.

Subrogation. To the extent that a Claim indemnified by the Facility Lessee
     under this Section 9.1 is in fact paid in full by the Facility Lessee or
     an insurer under an insurance policy maintained by the Facility Lessee
     (so long as no Lease Event of Default shall have occurred and be
     continuing), such insurer shall be subrogated to the rights and remedies
     of the Indemnitee on whose behalf such Claim was paid to the extent of
     such payment (other than rights of such Indemnitee under insurance
     policies maintained at its own expense) with respect to the transaction
     or event giving rise to such Claim. Should an Indemnitee receive any
     refund, in whole or in part, with respect to any Claim paid by the
     Facility Lessee hereunder, it shall promptly pay over to the Facility
     Lessee the lesser of (i) the amount refunded reduced by the amount of any
     Tax incurred by reason of the receipt or accrual of such refund and
     increased by the amount of any Tax (but not in excess of the amount of
     such reduction) saved as a result of such payment or (ii) the amount the
     Facility Lessee or any of their insurers has paid in respect of such
     Claim; provided that, so long as a Significant Lease Default or Lease
     Event of Default shall have occurred and is continuing such amount may be
     held by the Owner Lessor as security for the Facility Lessee's
     obligations under the Facility Lease, the other Operative Documents and
     the FILOT Lease.

Minimize Claims. The Owner Participant, the Owner Lessor, and each of the
     other Transaction Parties will use their respective reasonable and
     diligent efforts to minimize Claims indemnifiable by the Facility Lessee
     under this Section 9.1, including by complying with reasonable requests
     by the Facility Lessee to do or to refrain from doing any act if such
     compliance is, in the good faith opinion of the Owner Participant, the
     Owner Lessor, or such other Transaction Party, as the case may be, of a
     purely ministerial nature or otherwise has no unindemnified adverse
     impact on the Owner Participant, the Owner Lessor, or such Transaction
     Party, as the case may be, or any Affiliate of any thereof or on the
     business or operations of any of the foregoing.

                                      56
<PAGE>
General Tax Indemnity.

Indemnity. Except as provided in paragraph (b), the Facility Lessee agrees to
     indemnify each of the Owner Participant, the Owner Lessor, any OP
     Guarantor, the Trust Company in its individual capacity, the Lessor
     Manager, the Lease Indenture Company in its individual capacity, the
     Indenture Trustee, the Pass Through Company in its individual capacity, the
     Pass Through Trustees, each Certificateholder and their respective
     successors and assigns, the past and present partners or members of or
     holders of the ownership interests in, as the case may be, the Owner
     Participant (each of the foregoing, together with any Affiliate thereof, a
     "Tax Indemnitee") for, to hold each Tax Indemnitee harmless from and to
     defend each Tax Indemnitee against all Taxes that are imposed upon or with
     respect to or borne by or asserted against any Tax Indemnitee, the
     Facility, the Undivided Interest, the Facility Site, the Ground Interest,
     or any portion or Component thereof or any interest therein, or upon any
     Operative Document or interest therein, or in any way arising out of, in
     connection with or relating to, any of the following:

the acceptance, rejection, delivery, construction, financing, refinancing,
     acquisition, operation, warranty, ownership, possession, maintenance,
     repair, lease, condition, alteration, modification, restoration,
     refurbishing, rebuilding, return, transport, assembly, repossession,
     servicing, dismantling, abandonment, retirement, decommissioning,
     preparation, installation, storage, replacement, purchase, sale or other
     disposition, insuring, sublease, or other use or non-use of, the imposition
     of any lien (or incurrence of any liability to refund or pay over any
     amount as a result of any lien) on, the Facility, the Undivided Interest,
     the Ground Interest, the Facility Site or any portion or Component thereof
     or any interest therein;

the Facility, the Facility Site, the Undivided Interest, the Ground Interest,
     any portion thereof or Component or interest therein, the applicability of
     the Facility Lease to the Facility or the Undivided Interest, or the
     conduct of the business or affairs of the Facility Lessee or Calpine, the
     Facility or the Facility Site;

the manufacture, design, purchase, acceptance, rejection, delivery,
     non-delivery, redelivery or condition of, or improvement to, the Facility,
     the Facility Site or any portion or Component thereof, or any interest
     therein;

the Facility Lease, or any other Operative Document, the execution or delivery
     thereof, any other documents contemplated thereby or the performance,
     enforcement or amendment of any terms thereof;

the payment or receipt of Periodic Rent and Supplemental Rent or any other
     payment, receipt or earning under the Facility Lease, the Facility Site
     Lease or the Springing Facility Site Sublease or arising from the Facility,
     the Undivided Interest, the Ground Interest, the Facility Site or any
     portion or Component thereof or any interest therein;

any other amount paid or payable pursuant to the Operative Documents or the
FILOT Lease;

the conveyance of title to the Undivided Interest; or

                                      57
<PAGE>
otherwise relating to the transactions contemplated by the Operative Documents
     or the performance of the FILOT Lease.

          Notwithstanding anything herein to the contrary and without regard
to paragraph (b) hereof, the Facility Lessee will indemnify the Owner
Participant and the Owner Lessor on an After-Tax Basis for any Taxes collected
by way of withholding (and any interest, penalties or additions to tax
associated therewith) (or for the failure to withhold taxes) imposed on the
Lessor Notes or the Additional Lessor Notes or any other payments to each
Certificateholder or the Indenture Trustee (each a "Certificateholder
Indemnitee"), including any penalties, interest, or additions to tax applicable
in connection therewith; provided, however, that if the Facility Lessee is
required, for any reason, to indemnify the Owner Participant or the Owner Lessor
with respect to any failure to withhold such tax, and the withholding tax would
otherwise be an Excluded Tax under Section 9.2(b) without regard to the first
sentence of this paragraph, then the Certificateholder Indemnitee with respect
to which such withholding was not made will pay the amount of tax not withheld
to the relevant taxing authority if such taxes remain unpaid or will reimburse
the Facility Lessee for the amount of tax not withheld, but paid to such taxing
authority, on demand, plus interest at (a) the Lease Debt Rate during the period
commencing on the date the Facility Lessee shall have made the indemnity payment
to such taxing authority and ending the earlier of the date of repayment by such
Tax Indemnitee and five Business Days after the date the Facility Lessee demands
reimbursement thereof pursuant to this sentence, and (b) the Overdue Rate for
the period thereafter to the date the Facility Lessee actually receives such
payment.

Excluded Taxes. The indemnity provided for in paragraph (a) above shall not
     extend to any of the following Taxes (the "Excluded Taxes"):

Taxes imposed by the United States federal government or any state or local
     government, any political subdivision of any of the foregoing, imposed on,
     based on or measured by gross or net income, receipts, capital gain,
     capital or net worth, or conduct of business (other than, in each case,
     Taxes that are or are in the nature of sales, use, rental, license, value
     added (to the extent value added taxes are not imposed in clear and direct
     substitution for income taxes) or property taxes) ("Income Taxes"),
     including any such Taxes collected by way of withholding, minimum or
     alternative minimum taxes, and franchise taxes; provided that this
     exclusion (i) shall not affect any express requirement that payments be
     made on an "after-tax" basis;

Taxes imposed on a Tax Indemnitee other than a Certificateholder Indemnitee that
     are attributable to any act, event or omission by such Tax Indemnitee that
     occurs after expiration or other termination of the Facility Lease and
     surrender of the Undivided Interest to the Owner Lessor or its successors
     (or in the case of a Certificateholder Indemnitee, Taxes imposed for any
     period after the repayment of the Lease Debt) in accordance with the
     Facility Lease, (as opposed to any act, event or omission occurring prior
     to or simultaneous with such expiration, termination or surrender (or, in
     the case of a Certificateholder Indemnitee, such repayment)), provided that
     this exclusion shall not apply so long as a Lease Event of Default shall
     have occurred and be continuing;

                                      58
<PAGE>
Taxes imposed on a Tax Indemnitee that are attributable to the gross negligence
     or willful misconduct of such Tax Indemnitee, unless such negligence or
     misconduct is imputed to such Tax Indemnitee solely as a result of its
     participation in the transactions contemplated by the Operative Documents
     and the FILOT Lease (giving effect to its assignment to the Owner Lessor
     pursuant to the Assignment Agreement) and not as a result of any action or
     inaction by such Tax Indemnitee;

Taxes imposed on a Tax Indemnitee arising from a breach by such Tax Indemnitee
     of any of its representations, warranties or covenants under any Operative
     Document except to the extent attributable to any breach by the Facility
     Lessee or any other Calpine Party of any covenant, representation or
     warranty contained in any Operative Document;

Taxes (A) that are attributable to any voluntary direct or indirect assignment,
     sale, transfer or other voluntary disposition or an involuntary direct or
     indirect transfer or disposition arising out of or caused by a bankruptcy
     or similar proceeding for relief of debtors in which such Tax Indemnitee is
     a debtor or a foreclosure by a creditor of (1) in the case of the Owner
     Lessor or the Owner Participant, the Owner Participant of all or part of
     its Member Interest or Undivided Interest, (2) in the case of the Owner
     Lessor or the Owner Participant, the Owner Lessor of all or part of its
     interest in the Facility or the Facility Site (other than to a successor
     Lessor Manager), or (3) in the case of the Indenture Trustee, the Indenture
     Trustee of any interest in the Lease Debt or the Indenture Estate, or (4)
     in the case of the Owner Lessor or the Owner Participant any direct or
     indirect interest in the Owner Lessor or the Owner Participant, including
     by reason of an election made pursuant to Section 338 of the Code, in each
     case to the extent imposed by reason of any transfer described in this
     clause (v)(A), or (B) to the extent that, under law in effect on the date
     of the transfer such Taxes exceed the amount of Taxes that would be
     indemnified hereunder had there been no such assignment, sale, transfer or
     other voluntary disposition, unless such transfer or disposition occurs
     during the continuance of a Lease Event of Default or is otherwise pursuant
     to the Facility Lessee's exercise of its rights under the Operative
     Documents; provided that this exclusion shall not apply with respect to any
     initial syndication of interests in the Owner Participant accomplished
     prior to December 29, 2001;

Taxes imposed on a Tax Indemnitee that would not have been imposed but for the
     creation or existence of any Owner Lessor's Lien or Owner Participant's
     Lien attributable to such Tax Indemnitee;

Taxes that are included as a part of the cost of the Facility;

Taxes imposed on the Lessor Manager or the Indenture Trustee that are based on
     or measured by the fees or other compensation received by the Lessor
     Manager or Indenture Trustee for acting in their respective capacities.

With respect to the Owner Participant, Taxes for which the Facility Lessee is
     obligated to indemnify the Owner Participant under the Tax Indemnity
     Agreement (or which are expressly excluded from indemnification
     thereunder);

                                      59
<PAGE>
Taxes that are imposed on a Tax Indemnitee (other than a Certificateholder
     Indemnitee) resulting from the Owner Lessor not being treated as a grantor
     trust or other conduit entity for federal, state or local income tax
     purposes, but only to the extent such Taxes exceed Taxes indemnified
     hereunder that otherwise would have been imposed and are otherwise
     indemnifiable;

Taxes imposed on a Tax Indemnitee that are attributable to the failure of such
     Tax Indemnitee to comply with certification, information, documentation,
     reporting or other similar requirements concerning the nationality,
     residence, identity or connection with the jurisdiction imposing such
     Taxes; provided that the foregoing exclusion shall only apply if such
     compliance is required by statute or regulation of the jurisdiction
     imposing such Taxes as a precondition to relief or exemption from or
     reduction in such Taxes, such Tax Indemnitee is eligible to comply with
     such requirement, the Facility Lessee shall have given such Tax Indemnitee
     timely written notice of such requirement and the Tax Indemnitee shall have
     determined in good faith that compliance with any such requirement shall
     not result in any identified non-immaterial adverse effect to its interests
     or to those of its Affiliates;

Taxes consisting of interest, penalties, additions to tax or fines resulting
     from a failure of such Tax Indemnitee to properly and timely file returns
     as required by a taxing authority unless such failure is attributable to
     the Facility Lessee not providing information that it is expressly required
     to provide under the Operative Documents;

Taxes imposed on any Tax Indemnitee resulting from an amendment, modification,
     supplement to or waiver of any provision of, any Operative Document which
     amendment, modification, supplement or waiver was not requested by or
     consented to by the Facility Lessee, and as to which the Facility Lessee is
     not a party and the Tax Indemnitee (or, in the case of the Owner
     Participant, the Owner Lessor if acting at the express direction of the
     Owner Participant or any Related Party) is a party, provided that this
     exclusion shall not apply if such amendment, modification, supplement or
     waiver (A) was required by applicable law or the Operative Documents, (B)
     may be necessary or appropriate to, and is in conformity with, any
     amendment to any Operative Document requested by the Facility Lessee in
     writing, or (C) was expressly consented to by a Calpine Party in writing;

Taxes imposed as a result of, or in connection with, any "prohibited
     transaction," within the meaning of Section 4975 of the Code, Section 406
     of ERISA or any comparable laws of any Governmental Entity, engaged in by
     any Tax Indemnitee (which for this purpose shall include any ERISA
     Affiliate thereof) resulting from the breach by such Tax Indemnitee of any
     of its representations or warranties contained in Section 3.4(g) or Section
     8.2 of the Participation Agreement;

Taxes to the extent such Taxes would not have been imposed on a Tax Indemnitee
     if such Tax Indemnitee were a United States Person; and

Taxes imposed that would not have been imposed on a Tax Indemnitee but for the
     activities in the taxing jurisdiction of such Tax Indemnitee or any
     Affiliate thereof unrelated to the transactions contemplated by the
     Operative Documents other than Taxes that are or are in the

                                      60
<PAGE>
     nature of sales, use, rental or license taxes or value added taxes (except
     to the extent value added taxes are imposed in clear and direct
     substitution for income taxes) or property taxes.

Payment. Notwithstanding anything to the contrary herein and without regard
     to paragraph (b) hereof, any payment by the Facility Lessee pursuant to
     this Section 9.2 shall be increased by amounts necessary to ensure that
     all such payments are made on an After-Tax Basis. Each payment required
     to be made by the Facility Lessee to a Tax Indemnitee pursuant to this
     Section 9.2 shall be paid either (i) when due directly to the applicable
     taxing authority by the Facility Lessee if it is permitted to do so, or
     (ii) where direct payment is not permitted, and with respect to gross up
     amounts, in immediately available funds to such Tax Indemnitee by the
     later of (A) 10 days following the Facility Lessee's receipt of the Tax
     Indemnitee's written demand for the payment pursuant to clause (g)(i)
     below (which demand shall be accompanied by a written statement of the
     Tax Indemnitee describing in reasonable detail the Taxes for which the
     Tax Indemnitee is demanding payment and the computation of such Taxes),
     (B) subject to paragraph (g) below, in the case of amounts which are
     being contested pursuant to such paragraph (g), at the time and in
     accordance with a final determination of such contest or (C) in the case
     of any indemnity demand for which the Facility Lessee has requested
     review and determination pursuant to paragraph (d) below, the completion
     of such review and determination; provided, however, in no event later
     than the date which is one Business Day prior to the date on which such
     Taxes are required to be paid to the applicable taxing authority. Any
     amount payable to the Facility Lessee pursuant to paragraph (e) or (f)
     below shall be paid promptly after the Tax Indemnitee realizes a Tax
     Benefit giving rise to a payment under paragraph (e) or receives a refund
     or credit giving rise to a payment under paragraph (f), as the case may
     be, and shall be accompanied by a statement of the Tax Indemnitee
     computing in reasonable detail the amount of such payment. Upon the final
     determination of any contest pursuant to paragraph (g) below in respect
     of any Taxes for which the Facility Lessee has made a Tax Advance, the
     amount of the Facility Lessee's obligation under paragraph (a) above
     shall be determined as if such Tax Advance had not been made. Any
     obligation of the Facility Lessee under this Section 9.2 and the Tax
     Indemnitee's obligation to repay the Tax Advance will be satisfied first
     by set off against each other, and any difference owing by either party
     will be paid within 10 days of such final determination.

Independent Examination. Within 10 days after the Facility Lessee receives
     any computation from the Tax Indemnitee, the Facility Lessee may request
     in writing that an independent public accounting firm selected by the Tax
     Indemnitee and reasonably acceptable to the Facility Lessee review and
     determine on a confidential basis the amount of any indemnity payment by
     the Facility Lessee to the Tax Indemnitee pursuant to this Section 9.2 or
     any payment by a Tax Indemnitee to the Facility Lessee pursuant to
     paragraph (e) or (f) below. The Tax Indemnitee shall cooperate with such
     accounting firm and supply it with all information reasonably necessary for
     the accounting firm to conduct such review and determination (but not tax
     returns and books); provided that such accounting firm shall agree in
     writing in a manner reasonably satisfactory to the Tax Indemnitee to
     maintain the confidentiality of such information. The parties hereto agree
     that the independent public accounting firm's sole responsibility shall be
     to verify the computation of any payment pursuant to this Section 9.2 and
     that matters of interpretation of this Participation Agreement or any other
     Operative Document or the FILOT Lease are not within the scope of the

                                      61
<PAGE>
     independent accountant's responsibility. The fees and disbursements of such
     accounting firm will be paid by the Facility Lessee; provided that such
     fees and disbursements will be paid by the Tax Indemnitee if the
     verification results in an adjustment in the Facility Lessee's favor of 5
     percent or more of the indemnity payment or payments computed by the Tax
     Indemnitee.

Tax Benefit. If, as the result of any Taxes paid or indemnified against by
     the Facility Lessee under this Section 9.2, the aggregate Taxes actually
     paid by the Tax Indemnitee for any taxable year and not subject to
     indemnification pursuant to this Section 9.2 are less (whether by reason
     of a deduction, credit, allocation or apportionment of income or
     otherwise) than the amount of such Taxes that otherwise would have been
     payable by such Tax Indemnitee (a "Tax Benefit"), then to the extent such
     Tax Benefit was not taken into account in determining the amount of
     indemnification payable by the Facility Lessee under paragraph (a) or (c)
     above and provided no Significant Lease Default or Lease Event of Default
     shall have occurred and be continuing (in which event the payment
     provided under this Section 9.2(e) shall be deferred until the
     Significant Lease Default or Lease Event of Default has been cured), such
     Tax Indemnitee shall pay to the Facility Lessee the lesser of (A) (y) the
     amount of such Tax Benefit, plus (z) an amount equal to any United States
     federal, state or local income tax benefit resulting to the Tax
     Indemnitee from the payment under clause (y) above and this clause (z)
     (determined using the same assumptions as set forth in the second
     sentence under the definition of After-Tax Basis) and (B) the amount of
     the indemnity paid pursuant to this Section 9.2 giving rise to such Tax
     Benefit; provided, however, that any excess of (A) over (B) shall be
     carried forward and reduce the Facility Lessee's obligations to make
     subsequent payments to such Tax Indemnitee pursuant to this Section 9.2.
     If it is subsequently determined that the Tax Indemnitee was not entitled
     to such Tax Benefit, the portion of such Tax Benefit that is required to
     be repaid or recaptured will be treated as Taxes for which the Facility
     Lessee must indemnify the Tax Indemnitee pursuant to this Section 9.2
     without regard to paragraph (b) hereof.

          Notwithstanding anything to the contrary herein, each
Certificateholder Indemnitee shall determine the allocation of any tax
benefits, savings, credit, deduction or allocation in its sole good faith
discretion and each position to be taken on its tax return shall be in its sole
control and it shall not be required to disclose any tax return or related
documentation to any Person.

Refund. If a Tax Indemnitee obtains a refund or credit of all or part of any
     Taxes paid, reimbursed or advanced by the Facility Lessee pursuant to this
     Section 9.2, the Tax Indemnitee promptly shall pay to the Facility Lessee
     (x) the amount of such refund or credit (net of any Tax payable by the Tax
     Indemnitee as a result of the receipt or accrual of such refund or credit)
     plus (y) an amount equal to any United States federal, state or local
     income tax benefit realized by such Tax Indemnitee by reason of such
     payment to the Facility Lessee (determined using the same assumptions as
     set forth in the second sentence under the definition of After-Tax Basis);
     provided that (A) if at the time such payment is due to the Facility Lessee
     a Significant Lease Default or Lease Event of Default shall have occurred
     and be continuing, such amount shall not be payable until such Significant
     Lease Default or Lease Event of Default has been cured, and (B) the amount
     payable to the Facility Lessee pursuant to this sentence shall not exceed
     the amount of the indemnity payment in respect of such refunded or credited
     Taxes that was made by the Facility Lessee. Any excess of (x) and

                                      62
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     (y) over (B) in this Section 9.2(f) shall be carried forward and reduce
     the Facility Lessee's obligations to make subsequent payments to such Tax
     Indemnitee pursuant to this Section 9.2. If it is subsequently determined
     that the Tax Indemnitee was not entitled to such refund or credit, the
     portion of such refund or credit that is required to be repaid or
     recaptured will be treated as Taxes for which the Facility Lessee must
     indemnify the Tax Indemnitee pursuant to this Section 9.2 without regard
     to paragraph (b) hereof. If, in connection with a refund or credit of all
     or part of any Taxes paid, reimbursed or advanced by the Facility Lessee
     pursuant to this Section 9.2, a Tax Indemnitee receives an amount
     representing interest on such refund or credit, the Tax Indemnitee
     promptly shall pay to the Facility Lessee (1) the amount of such interest
     that shall be fairly attributable to such Taxes paid, reimbursed or
     advanced by the Facility Lessee prior to the receipt of such refund or
     credit (net of Taxes payable in respect of the receipt or accrual of such
     interest) and (2) any Tax savings resulting from payments made by the Tax
     Indemnitee under (1) and (2).

Contest.

Notice of Contest. If a written claim for payment is made by any taxing
     authority against a Tax Indemnitee for any Taxes with respect to which the
     Facility Lessee may be liable for indemnity hereunder (a "Tax Claim"), such
     Tax Indemnitee shall give the Facility Lessee written notice of such Tax
     Claim promptly after its receipt, and shall furnish the Facility Lessee
     with copies of such Tax Claim and all other writings received from the
     taxing authority to the extent relating to such claim; provided that
     failure to so notify the Facility Lessee shall not relieve the Facility
     Lessee of any obligation to indemnify the Tax Indemnitee hereunder except
     to the extent that such failure effectively precludes the ability to
     conduct a contest hereunder (and without limiting any damage claim or
     remedy the Facility Lessee may otherwise have for such failure).

Control of Contest. Subject to subsection (g)(iii) below, the Facility Lessee
     will be entitled to contest (acting through counsel selected by the
     Facility Lessee and reasonably satisfactory to the Tax Indemnitee), and
     control the contest of, any Tax Claim if (A) such Tax Claim may be pursued
     in the name of the Facility Lessee and may be segregated procedurally from
     tax claims for which the Facility Lessee is not obligated to indemnify the
     Tax Indemnitee or (B) the Tax Indemnitee requests that the Facility Lessee
     control such contest. In the case of all other Tax Claims, the Tax
     Indemnitee will contest the Tax Claim if the Facility Lessee shall request
     that the Tax be contested (subject to subsection (g)(iii) below), and the
     following rules shall apply with respect to such contest:

          (1)  the Tax Indemnitee will control the contest of such Tax Claim
(acting through counsel selected by the Tax Indemnitee and reasonably
satisfactory to the Facility Lessee) at the Facility Lessee's expense,

          (2)  the decisions regarding what actions to be taken shall be made by
the Tax Indemnitee in its sole judgment, and

          (3)  the Tax Indemnitee shall not otherwise settle, compromise or
abandon such contest without the Facility Lessee's prior written consent except
as provided in paragraph (g)(iv) below.

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     In either case, the party conducting such contest shall consult in good
faith with the other party and its designated counsel with respect to such Tax
Claim and shall provide the other party with copies of any reports or claims
(or extracts therefrom) issued by the relevant auditing agents or taxing
authority relating to such Tax Claim.

Conditions of Contest. Notwithstanding the foregoing, no contest with respect
     to a Tax Claim will be required or permitted pursuant to this Section 9.2,
     and the Facility Lessee shall be required to pay the applicable Taxes
     without contest, unless:

          (1)  within 30 days after written notice by the Tax Indemnitee to the
Facility Lessee of such Tax Claim (or such shorter period, to be specified by
the Tax Indemnitee in such notice, as required for taking action with respect to
such Tax Claim), the Facility Lessee shall request in writing to the Tax
Indemnitee that such Tax Claim be contested,

          (2)  no Significant Lease Default or Lease Event of Default has
occurred and is continuing, unless the Facility Lessee has provided security for
the indemnity payment and the expenses of contest in a manner reasonably
acceptable to the Tax Indemnitee and the Indenture Trustee, both as to coverage
and credit,

          (3)  there is no risk of sale, forfeiture or loss of, or the creation
of any Lien on any Facility, the Facility Site, the Undivided Interest, the
Ground Interest, or any portion or Component thereof or any interest therein as
a result of such Tax Claim; provided that this clause (3) shall not apply if the
Facility Lessee posts security satisfactory to the Tax Indemnitee, both as to
coverage and credit, in its sole discretion,

          (4)  there is no risk of imposition of any criminal penalties or
liabilities,

          (5)  if such contest involves payment of such Tax, the Facility Lessee
will advance such amount necessary to pay the Tax to the Tax Indemnitee or its
Affiliates on an interest-free basis and with no after-tax cost to such Tax
Indemnitee (a "Tax Advance"),

          (6)  the Facility Lessee agrees to pay (and pays on demand) and
with no after-tax cost to such Tax Indemnitee or its Affiliates all reasonable
costs, losses and expenses incurred by the Tax Indemnitee in connection with the
contest of such claim (including, without limitation, all reasonable legal,
accounting and investigatory fees and disbursements and penalties, interest and
additions to tax),

          (7)  the Tax Indemnitee, if it so requests has been provided at the
Facility Lessee's sole expense with an opinion, reasonably acceptable to such
Tax Indemnitee, of independent tax counsel selected by the Tax Indemnitee and
reasonably acceptable to the Facility Lessee to the effect that there is a
Reasonable Basis for contesting such Tax Claim,

          (8)  in the case of a judicial appeal, the appeal is not to the U.S.
Supreme Court,

          (9)  if such contest is controlled by the Facility Lessee, prior to
commencement of a judicial action with respect to the contest, the Facility
Lessee shall have admitted in writing its liability to pay an indemnity pursuant
to this Section 9.2 with respect to

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such Tax, which admission shall be binding on the Facility Lessee unless and to
the extent such contest is determined in a manner that conclusively demonstrates
that the Facility Lessee is not so liable, and

          (10) if the subject matter of such claim shall be of a continuing or
recurring nature and shall have previously been decided pursuant to this
paragraph (g), there shall have been a change in law after such previously
decided claim and such Tax Indemnitee receives, at the Facility Lessee's sole
cost, an opinion of counsel selected by such Tax Indemnitee and reasonably
acceptable to the Facility Lessee to the effect that such change is favorable to
the position asserted in the previous contest.

Waiver of Indemnification. Notwithstanding anything to the contrary contained
     in this Section 9.2, the Tax Indemnitee at any time may elect to decline
     to take any action or any further action with respect to (and the Facility
     Lessee shall not be permitted to contest) a Tax Claim and may in its sole
     discretion settle or compromise any contest with respect to such Tax Claim
     without the Facility Lessee's consent if the Tax Indemnitee:

          (1)  waives its right to any indemnity payment by the Facility Lessee
pursuant to this Section 9.2 in respect of such Tax Claim (and any other claim
for Taxes with respect to any other taxable year the contest of which is
effectively precluded by the Tax Indemnitee's declination to take action with
respect to the Tax Claim), and

          (2)  promptly repays to the Facility Lessee any Tax Advance and any
amount paid to such Tax Indemnitee under Section 9.2(a) above in respect of such
Taxes, but not any costs or expenses with respect to any such contest.

     Except as provided in the preceding sentence, any such waiver
shall be without prejudice to the rights of the Tax Indemnitee with respect to
any other Tax Claim.

Reports.

If any report, statement or return is required to be filed by a Tax Indemnitee
     with respect to any Tax that is subject to indemnification under this
     Section 9.2, the Facility Lessee will (1) notify the Tax Indemnitee in
     writing of such requirement not later than 30 days prior to the date such
     report, statement or return is required to be filed (determined without
     regard to extensions) and (2) either (y) unless directed by the Tax
     Indemnitee otherwise, if permitted by applicable law, prepare such report,
     statement or return for filing by the Facility Lessee in such manner as
     will show the leasehold or fee interest, as applicable, of the Owner Lessor
     in the Facility for United States federal, state and local income tax
     purposes (if applicable), send a copy of such report, statement or return
     to the Tax Indemnitee and timely file such report, statement or return with
     the appropriate taxing authority, or (z) in all other cases, prepare and
     furnish to such Tax Indemnitee not later than 30 days prior to the date
     such report, statement or return is required to be filed (determined
     without regard to extensions) a proposed form of such report, statement or
     return for filing by the Tax Indemnitee; provided that the only consequence
     for failure to file after compliance by the Facility Lessee with the
     requirements hereof shall be a loss of indemnification from the Facility
     Lessee in respect of any Tax to the extent resulting from such failure.

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<PAGE>
Each of the Tax Indemnitee and the Facility Lessee, as the case may be, will
     timely provide the other, at the Facility Lessee's expense, with all
     information (other than books or income tax returns that such party
     reasonably deems confidential) in its possession that the other party may
     reasonably require and request to satisfy its tax filing obligations.

Non-Parties. If a Tax Indemnitee is not a party to this Agreement, the
     Facility Lessee may require such Tax Indemnitee to agree in writing, in a
     form reasonably acceptable to the Facility Lessee, to the terms of this
     Section 9.2 prior to making any payment to such Tax Indemnitee under this
     Section. Subject to the preceding sentence, the Facility Lessee's
     obligations under this Section 9.2 shall inure to the benefit of each and
     every Tax Indemnitee without regard to whether such Tax Indemnitee is a
     party to this Agreement.

FACILITY LESSEE'S RIGHT OF QUIET ENJOYMENT

          Each party to this Agreement acknowledges notice of, and consents in
all respects to, the terms of the Facility Lease and the Facility Site Lease
and expressly, severally and as to its own actions only, agrees that, so long
as no Lease Event of Default has occurred and is continuing, it shall not take
or cause to be taken any action or direct that any action be taken, which is
contrary to or inconsistent with the Facility Lessee's rights under the
Facility Lease, Facility Site Lease and, if applicable, the Springing Facility
Site Sublease, including the right to possession, use and quiet enjoyment of
the Undivided Interest and the Ground Interest.

SUPPLEMENTAL FINANCING IMPROVEMENTS; OPTIONAL REFINANCINGS

Financing Improvements. Upon the request of the Facility Lessee delivered at
least 90 days prior to financing a portion of the cost of any Required or
Non-Severable Improvement, the Owner Lessor and the Indenture Trustee agree to
cooperate with the Facility Lessee to (a) issue Additional Lessor Notes under
the Collateral Trust Indenture to finance such Improvement which will rank pari
passu with the Initial Lessor Notes and/or any Additional Lessor Notes then
outstanding; (b) execute and deliver one or more supplements to the Collateral
Trust Indenture for purpose of subjecting the Owner Lessor's Interest in any
such Improvements to the Liens thereof, and (c) execute and deliver an amendment
to the Facility Lease to reflect the adjustments required by clause (iv) below;
provided, however, that (x) the Owner Participant shall have been given the
opportunity, but shall have no obligation, to provide all or part of the funds
required to finance any such Improvement by making an Additional Equity
Investment in such amount, if any, as it may determine in its sole and absolute
discretion, but the Facility Lessee shall have no obligation to accept such
Additional Equity Investment; and (y) the conditions set forth below and in
Section 2.12 of the Collateral Trust Indenture shall have been satisfied. The
obligation to finance such Improvements through the issuance of Additional
Lessor Notes under Section 2.12 of the Collateral Trust Indenture (any financing
of Improvements through the issuance of such Additional Lessor Notes under the
Collateral Trust Indenture being called a "Supplemental Financing") is subject
to the following additional conditions:

except with respect to Required Improvements, there shall be no more than one
     such financing in any calendar year;

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<PAGE>
the Additional Lessor Notes (A) shall have a final maturity no later than the
     final maturity of the Lessor Notes issued on the Closing Date and (B) will
     be fully repaid out of additional Basic Rent, as adjusted pursuant to the
     Facility Lease, during the Facility Lease Term;

the Additional Lessor Notes shall have an average life to maturity equal to the
     average life to maturity of the Lessor Notes issued on the Closing Date;

appropriate increases to Basic Rent and Termination Value (determined without
     regard to any tax benefits associated with such Improvements, unless the
     Owner Participant is making an Additional Equity Investment) shall be made
     to protect the Owner Participant's Net Economic Return; provided that there
     shall be no changes to the amortization schedule or interest amounts and
     payment dates on the then outstanding Lessor Notes;

the Facility Lessee shall have paid, on an After-Tax Basis, all reasonable
     costs and expenses of the Transaction Parties, including the reasonable
     fees and expenses of counsel to the Owner Participant, the Owner Lessor,
     the Indenture Trustee, the Lease Indenture Company, the Pass Through
     Company and the Pass Through Trustees, in each case to the extent incurred
     in connection with any financing or refinancing pursuant to this Section 11
     whether or not the financing is consummated;

no Significant Lease Default or Lease Event of Default shall have occurred and
     be continuing unless the Improvements to be constructed with the proceeds
     of the Additional Lessor Notes shall cure such Significant Lease Default or
     Lease Event of Default and such Improvements shall be made in compliance
     with the Operative Documents and the FILOT Lease;

such Additional Lessor Notes represent an aggregate amount not less than $20
     million, nor greater than 100% of the costs of the Improvements being
     financed; provided that the aggregate balance of the Lessor Notes for the
     Undivided Interest never exceeds 80% of the fair market value (which fair
     market value shall be determined by an appraiser selected by the Facility
     Lessee and reasonably acceptable to the Owner Participant) of the Undivided
     Interest taking into account the fair market value of such Improvements;

the Owner Participant shall have received a favorable opinion of its tax
     counsel satisfactory to such Owner Participant to the effect that such
     financing creates no incremental tax risk not indemnified to the Owner
     Participant's satisfaction (including additional indebtedness incurred to
     finance the Improvements not constituting "qualified nonrecourse
     indebtedness" within the meaning of Treasury Regulations Section
     1-861-10T(b));

the Owner Participant shall suffer no adverse accounting effects under GAAP as a
     result of such financing;

the Facility Lessee shall have made or delivered such representations,
     warranties, covenants, opinions or certificates as the Owner Participant,
     the Indenture Trustee may reasonably request;

the Facility Lessee or the Guarantor shall have, at such time, a credit rating
     of at least Investment Grade from S&P and Moody's;

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<PAGE>
the Facility Lessee shall pay to (a) the Owner Participant a fee of $100,000
     and (b) the Pass Through Trustees for the benefit of the
     Certificateholders, to be shared by such Certificateholders on a pro rata
     basis, a fee of $100,000 for each such financing, in each case under
     clauses (a) and (b) above, other than the first financing; and

Calpine shall have affirmed to the Transaction Parties that the Calpine
     Guaranties cover the additional indebtedness contemplated by this Section
     11.1.

          Notwithstanding the prior provision dealing with the financing of
Improvements through the Facility Lease, the Facility Lessee shall at all times
have the right to fund Improvements to the Facility other than through the
Facility Lease; provided that Required Improvements and non-Severable
Improvements may only be financed other than through the Facility Lease on an
unsecured basis. Notwithstanding any of the foregoing of this Section 11.1,
except for Required Improvements and Improvements relating to pollution
control, no Improvement shall materially decrease the value, residual value,
utility or remaining economic useful life of the Facility immediately prior to
such Improvement or cause the Facility to become limited-use property.

Optional Refinancing of Lease Debt. The Facility Lessee shall have the right,
exercisable at any time on no more than three occasions, to request the Owner
Lessor (and the Owner Lessor shall reasonably consider and not unreasonably
withhold its consent), to refund or refinance the Lease Debt, in whole but not
in part, through the issuance of Additional Lessor Notes; provided that all
conditions to the issuance of such Additional Lessor Notes contained in Section
2.12 of the Collateral Trust Indenture shall have been satisfied and all
applicable Make-Whole Amounts shall have been paid. Any refinancing under this
Section 11.2 shall also be subject to satisfaction of the following additional
conditions:

the Owner Lessor shall be able to issue and sell such debt in an amount
     adequate to accomplish such refunding or refinancing;

with respect to the refinancing of the Initial Lessor Notes of a particular
     maturity, such Additional Lessor Notes shall have a final maturity no later
     than the final maturity date of such Initial Lessor Notes and will be fully
     repaid out of Basic Rent during the Facility Lease Term;

appropriate adjustments to Basic Rent and Termination Value shall be made to
     preserve the Owner Participant's Net Economic Return; provided that no
     adjustments shall be made to the amortization schedule;

no Significant Lease Default or Lease Event of Default shall have occurred and
     be continuing;

the Owner Participant shall suffer no adverse accounting effects under GAAP;

the Facility Lessee shall have made or delivered such representations,
     warranties, covenants, opinions and certificates as the Owner Participant
     may reasonably request, which representations, warranties, covenants and
     agreements shall be of no greater scope than those provided by the Facility
     Lessee on the Closing Date under the Operative Documents to which

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<PAGE>
     it is a party (except to the extent necessitated by differences between
     existing Operative Documents and the terms and conditions of the proposed
     refinancing);

all documentation in connection with such refinancing shall be reasonably
     satisfactory to the Owner Lessor and the Owner Participant;

the Owner Participant shall receive a consent fee of $100,000 in the aggregate
     for each refinancing after the first such refinancing;

the Lease Debt as financed constitutes qualified nonrecourse indebtedness
     within the meaning of Treasury Regulations Section 1-861-10T(b) and the
     Owner Participant shall have received an opinion satisfactory to it to such
     effect; and

the Owner Participant shall receive an opinion satisfactory to it that the
     refinancing (as opposed to the right to request such refinancing) shall not
     result in any incremental tax risk not indemnified to the Owner
     Participant's satisfaction.

          Calpine shall have affirmed in writing to the Transaction Parties
that the Calpine Guaranty covers the additional indebtedness contemplated by
this Section 11.2.

Cooperation. The Owner Participant will cooperate with and assist the Facility
Lessee in connection with any refinancing and/or assumption of the Lease Debt,
so long as such refinancing and/or assumption of the Lease Debt is in accordance
with the terms of the Operative Documents and the FILOT Lease. The Owner
Participant will execute such agreements and documents as may be necessary with
respect to any such refinancing and will instruct the Owner Lessor to act
accordingly.

CERTAIN ADJUSTMENTS TO PERIODIC RENT, TERMINATION VALUE AND OTHER AMOUNTS

Prior to or on the Closing Date, Periodic Rent, Termination Value, Allocated
     Rent, Proportional Rent, Lessor 467 Loan Principal Balance, Lessee 467 Loan
     Principal Balance, Lessor 467 Loan Interest and Lessee 467 Loan Interest
     shall be adjusted, either upward or downward, in accordance with the
     Facility Lease:

at the request of the Facility Lessee, and at the Facility Lessee's option, to
     re-optimize the Lease Debt to the extent permitted by the Collateral Trust
     Indenture; provided such re-optimization shall not result in a change to
     average life by more than six (6) months;

at the request of the Facility Lessee or the Owner Participant, to reflect any
     changes in the Pricing Assumptions, including without limitation, (x) the
     initial interest rate on any of the Lessor Notes which is different from
     the applicable interest rate set forth in the Pricing Assumptions, (y) an
     increase in the Transaction Costs from the amount assumed in the Pricing
     Assumptions, unless the Facility Lessee has elected to pay such increase,
     and (z) a Closing Date other than the Scheduled Closing Date; and

at the request of the Facility Lessee or the Owner Participant to reflect any
     enactment, promulgation, release or adoption of, amendment to or change in
     the Code, Treasury

                                      69
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     Regulations, Revenue Rulings or Revenue Procedures ("Tax Law Change")
     enacted prior to the Closing;

provided that if any adjustment required by this paragraph (a) would result in
(i) the Facility Lease not qualifying as an operating lease for the Facility
Lessee under FASB 13 or FASB 98, or (ii) the aggregate of all rent adjustments
made on or before, or contemplated to be made on, the Closing Date (other than
adjustments to reflect a change in Transaction Costs or the actual interest rate
of the Certificates) shall cause either (x) the after-tax net present value of
Basic Rent discounted at 6% to increase by more than 100 basis points or (y) the
total Basic Rent to increase by more than 2%, then in either such case, the
Facility Lessee shall not be obligated to close the Overall Transaction. Any
adjustments pursuant to Section 3.4 of the Facility Lease shall comply with
Applicable Law (including any final or proposed Treasury Regulations issued
under Section 467 of the Code) as well as the requirements of Revenue Procedure
2001-28 and Sections 4.02(5), 4.07(1) and 4.07(2) of Revenue Procedure 2001-29
in a manner such that amending the Facility Lease complies with the "safe
harbors" under such Treasury Regulations or otherwise does not cause the
Facility Lease to be a "disqualified leaseback or long-term agreement" within
the meaning of Section 467 of the Code and any Treasury Regulations issued
thereunder, in each case, to the extent of such compliance on the Closing Date.

After the Closing Date, Periodic Rent, Termination Value, Allocated Rent,
     Proportional Rent, Lessor 467 Loan Principal Balance, Lessee 467 Loan
     Principal Balance, Lessor 467 Loan Interest and Lessee 467 Loan Interest
     shall be adjusted at the request of the Facility Lessee or the Owner
     Participant in accordance with the terms of the Facility Lease to which it
     is a party.

Any adjustment pursuant to this Section 12 shall be calculated (A) to preserve
     the Owner Participant's Net Economic Return through the Basic Lease Term
     and (B) to the extent consistent with (A) above, to maintain operating
     lease treatment for the Facility Lessee; provided, however, that to the
     extent consistent with preserving the Owner Participant's Net Economic
     Return, all adjustments shall at the option of the Facility Lessee be
     calculated to (x) minimize the average annual Basic Rent over the Basic
     Lease Term and the Lessor Put Renewal Lease Term for the Facility Lessee's
     GAAP accounting purposes and/or (y) minimize the present value to the
     Facility Lessee of Basic Rent; and provided, further, that no such
     adjustment shall require the Owner Participant to record a loss as of the
     date such adjustment is made. Adjustments will be computed by the Owner
     Participant based upon the Pricing Assumptions and the Tax Assumptions
     originally used to calculate the Periodic Rent, Termination Value,
     Allocated Rent, Proportional Rent, Lessor 467 Loan Principal Balance,
     Lessee 467 Loan Principal Balance, Lessor 467 Loan Interest and Lessee 467
     Loan Interest. Adjustments made pursuant to this Section 12 shall be
     subject to verification as provided in Section 3.4 of the Facility Lease.

TRANSFER OF THE FACILITY LESSEE OWNERSHIP; SPECIAL LESSEE TRANSFERS

Transfer of the Facility Lessee Ownership.

The Facility Lessee covenants and agrees that it shall not during the Facility
     Lease Term assign the Facility Lease or any other Operative Document, or
     any interest therein, without the prior

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     written consent of the Owner Lessor, the Owner Participant and, so long
     as the Lien of the Collateral Trust Indenture has not been terminated or
     discharged, the Indenture Trustee and the Pass Through Trustees.
     Notwithstanding the foregoing, upon satisfaction of the conditions in
     paragraph (b) below, the Facility Lessee may assign the Facility Lease or
     any other Operative Document to which it is a party, or any interest
     therein to any Person, without the consent of the Owner Lessor, the Owner
     Participant, the Indenture Trustee or any other Transaction Party.

Assignment under Section 13(a) above by the Facility Lessee shall be permitted
     if (A) after giving effect to such assignment or assignments, either (x)
     Calpine owns, directly or indirectly, at least a majority of the Ownership
     Interest of each assignee (as well as at least a majority of the Ownership
     Interest of any non-assigning Facility Lessee), the Calpine Guaranty
     remains in full force and effect (without a transferee of Calpine's
     obligations thereunder having succeeded thereto in accordance with Section
     8.4(b) thereof), and Calpine shall have reaffirmed in writing its
     obligations under the Calpine Guaranty or (y) Calpine's obligations under
     the Calpine Guaranty has been succeeded to in accordance with Section
     8.4(b) thereof, the transferee of Calpine shall own, directly or
     indirectly, at least a majority of the Ownership Interest of each assignee
     (as well as at least a majority of the Ownership Interest of any
     non-assigning Facility Lessee) and the Calpine Guaranty shall remain in
     full force and effect and (B) satisfaction of the following conditions:

the transferee shall assume all the obligations of the Facility Lessee under
     the Operative Documents, and the first priority Lien of the pledge of the
     Collateral as defined in and pursuant to the Facility Lease shall continue
     in effect, pursuant to an assignment and assumption agreement in form and
     substance satisfactory to the Owner Participant, Owner Lessor and, so long
     as the Lien of the Collateral Trust Indenture shall not have been
     terminated or discharged, the Indenture Trustee;

the Owner Participant, the Owner Lessor and, so long as the Lien of the
     Collateral Trust Indenture shall not have been terminated or discharged,
     the Indenture Trustee and the Pass Through Trustees shall have received an
     Opinion of Counsel as to such assignment and assumption agreement and the
     satisfaction of the requirements and conditions set forth in this Section
     13.1(b) (except for clauses (iii) and (vi) hereof);

no Significant Lease Default or Lease Event of Default shall have occurred and
     be continuing at the time of or immediately following such transfer;

the transfer shall not subject any of the Facility Lessee, the Owner
     Participant, the Owner Lessor, the Lessor Manager, the Indenture Trustee,
     the Pass Through Trustees or any Certificateholder to regulation under
     PUHCA or state laws and regulations regarding the rate and financial or
     organizational regulation of electric utilities in the affected party's
     reasonable opinion, nor result in a Regulatory Event of Loss;

the transferee shall be organized under the laws of the United States, any state
     thereof or the District of Columbia;

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<PAGE>
          b)   the Facility Lessee shall have paid, at no after-tax cost to such
               parties, all reasonable documented out-of-pocket expenses
               (including reasonable attorneys' fees and expenses) of the
               Owner Lessor, the Lessor Manager, the Owner Participant, the
               Indenture Trustee, the Lease Indenture Company and the Pass
               Through Trustees in connection with such assignment;

          c)   the Facility Lessee has provided the Indenture Trustee with (x)
               an indemnity against the risk that such assignment will cause
               a Tax Event to occur to any direct holder of any Lessor Note
               and any Certificateholder or (y) an opinion of counsel to the
               effect that such assignment will not cause a Tax Event to
               occur to any direct holder of any Lessor Note and any
               Certificateholder; and

          d)   the transfer shall not cause the Facility to become "tax-exempt
               use property within the meaning of Section 168(h) of the Code
               (unless the Facility Lessee shall make a payment
               contemporaneously with such transfer that in the reasonable
               judgment of the Owner Participant compensates the Owner
               Participant for the adverse tax consequences therefrom).

     F.   Special Facility Lessee Transfers. Upon the occurrence and during the
continuance of a Special Lessee Transfer Event, the Facility Lessee (or its
designee as provided below) may (a) terminate the Facility Lease in accordance
with its terms, or (b) upon not less than 30 days' written notice to the Owner
Participant, the Indenture Trustee and the Pass Through Trustees, purchase
subject to the limitations set forth in Section 7.1, all of the Member Interest
(any purchase under clause (b) being referred to a the "Special Lessee
Transfer") on the applicable Termination Date at a price equal to the Special
Lessee Transfer Amount determined as of the date of such transfer and keep the
Facility Lease in effect. On the applicable Termination Date, the Facility
Lessee (or its designee) shall pay to the Owner Participant or the OP Guarantor,
the Special Lessee Transfer Amount determined as of such date, plus all amounts
due and payable to the Owner Participant on such date (including all reasonable
and documented costs and expenses of the Owner Participant or the OP Guarantor
and all sales, use, value added and other Taxes covered and not excluded by
Section 9.2 hereof associated with the Special Lessee Transfer pursuant to this
Section 13.2, to the extent such amounts have not otherwise been reimbursed by
the Facility Lessee pursuant to this Section 13.2, it being understood that any
transfer pursuant to this Section 13.2 shall not be considered a voluntary
transfer for purposes of Section 9.2). Concurrently with the payment of all sums
required to be paid pursuant to this Section 13.2 (or on such later date of
transfer of the Member Interest in accordance with clause (ii) below) (i) the
Facility Lessee shall cease to have any liability to the Owner Participant or
the OP Guarantor with respect to the Operative Documents and the FILOT Lease,
except for obligations (including Section 9.1 and 9.2 hereof and the Tax
Indemnity Agreement) surviving pursuant to the express terms of the Operative
Documents or which have otherwise accrued but not been paid as of such date and
(ii) the Owner Participant or the OP Guarantor will transfer (by an appropriate
instrument of transfer) the Member Interest to the Facility Lessee (or its
designee); provided, however, that if the Lien of the Collateral Trust Indenture
has not been terminated or discharged, such transfer shall not be made to the
Facility Lessee, but shall be

                                      72
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made to the Facility Lessee's designee promptly upon the Facility Lessee's
designation of such designee and such designee will agree not to transfer the
Member Interest to the Facility Lessee until the Lien is terminated or
discharged. At the time of any transfer under this Section 13.2, the Owner
Participant or the OP Guarantor shall represent and warrant as to the absence
of Liens attributable to the Owner Participant on the Member Interest. It is
understood and agreed among the parties hereto that the transaction
contemplated by this Section 13.2 shall not effect a merger of the Facility
Lessee's interest in the Facility and the Facility Site with the Owner Lessor's
Interest. The Facility Lessee will pay, on an After-Tax Basis, all reasonable
and documented transaction costs and expenses of the parties (including
reasonable attorneys' fees and disbursements) in connection with any transfer
pursuant to this Section 13.2. Subsequent to such transfer, the Facility Lessee
and the Owner Lessor may, without the consent of the Indenture Trustee or the
Pass Through Trustees, waive the Regulatory Event of Loss or the Burdensome
Termination Event that gave rise to the Special Lessee Transfer Event and the
Facility Lease shall continue in full force and effect in accordance with its
terms.

OWNER LESSOR'S EXERCISE OF PURCHASE OPTIONS

     (a)  At any time prior to the expiration or earlier termination
of the FILOT Lease, the Facility Lessee may request (which request shall be in
writing and addressed to the Owner Lessor, the Owner Participant and the
Indenture Trustee) that the Owner Lessor exercise the Purchase Options (if and
to the extent not previously exercised) and direct the County to convey the Land
(to the extent of the Owner Lessor's Percentage interest) to the Facility Lessee
upon the closing of the conveyance of the Project pursuant thereto. Within 15
Business Days following receipt of such request, the Owner Lessor shall exercise
the Purchase Options (if and to the extent not previously exercised) and direct
the County to convey the Land (to the extent of the Owner Lessor's Percentage
interest) to the Facility Lessee upon the closing of the conveyance of the
Project pursuant thereto, if each of the following conditions shall have been
satisfied:

          (1)  the conditions specified in the definition of "Post-FILOT Lease
               Conversion Date" have been satisfied;

          (2)  no Lease Default or Lease Event of Default under any of Sections
               16(g) and 16(h) of the Facility Lease has occurred and is
               continuing; and

          (3)  no Significant Lease Default or Lease Event of Default shall
               have occurred and be continuing or would result from the
               occurrence of the Post-FILOT Lease Conversion Date.

     Notwithstanding the foregoing, the Facility Lessee shall be entitled to
make the foregoing request of the Owner Lessor and to receive a conveyance of
the Land (to the extent of the Owner Lessor's Percentage interest) only if,
concurrently with such request and receipt, the Facility Lessee also makes such
request of the Other Broad River Owner Lessors and receives their respective
interests in the Land pursuant to the Other Broad River Operative Documents.

(b) If the request of the Facility Lessee referred to in paragraph (a) above
states (and provides information constituting a reasonable basis for such
statement) (A) that the conditions specified

                                      73
<PAGE>
in paragraph (a) above have been satisfied or will be (and are capable of
being) timely satisfied, (B) that the FILOT Lease is likely to terminate or
cease to be in full force and effect before the Owner Lessor has exercised the
Purchase Options if such exercise does not occur within a period of time which
shall not be less than ten (10) Business Days from the date of the Owner
Lessor's receipt of such notice, and (C) that such notice is being given
pursuant to this Section 14(b) in anticipation of a possible exercise by the
Facility Lessee of the Purchase Options, then the Owner Lessor (or in lieu
thereof, the Owner Participant) shall respond to such notice within five (5)
Business Days after its receipt of such notice (provided that if the Facility
Lessee or the Owner Lessor shall have Actual Knowledge that a termination of
the FILOT Lease by the County is reasonably likely to occur within a time frame
shorter than the time frame of the foregoing notice provisions, the Person
having such Actual Knowledge will promptly advise the other Person of the
relevant information known to it, and thereafter the parties will proceed with
the notices to each other hereunder as promptly as commercially practicable
using all reasonable efforts). The written notice from the Owner Lessor
referred to above shall be one with which the Owner Lessor (or the Owner
Participant) either shall concur in all material facts asserted by the Facility
Lessee in its notice or shall dispute in good faith one or more of such
material facts and shall set forth the Owner Lessor's (or the Owner
Participant's or Indenture Trustee's) position (and in reasonable detail, the
basis therefor) in respect thereof. If the Owner Lessor (or the Owner
Participant) does not provide such notice in dispute of one or more material
facts so asserted by the Facility Lessee within the time period provided above,
the Facility Lessee shall be entitled, to the extent permitted by Applicable
Law, to exercise the foregoing Purchase Options (if and to the extent not
previously exercised) and direct the County to convey (to the extent of the
Owner Lessor's Percentage interest) the Land to the Facility Lessee and the
Project (other than the Land) to the Owner Lessor. Notwithstanding the
foregoing, the determination whether the conditions set forth in paragraph (a)
above have been or shall be capable of being timely satisfied shall be made by
the Owner Lessor and (if the Lien of the Collateral Trust Indenture has not
been discharged) the Indenture Trustee (without the necessity of obtaining the
consent of any of the Noteholders or the Pass Through Trustees), provided that
either the Owner Lessor, the Owner Participant or the Indenture Trustee has
notified the Facility Lessee of the dispute referred to above.

     The Owner Lessor agrees not to exercise the Purchase Options other than
as contemplated above unless (i) there has occurred and is continuing at the
time of its election to exercise the same as contemplated by Section 10.02 of
the FILOT Lease a Lease Event of Default and the Owner Lessor or, if the Lien of
the Collateral Trust Indenture has at the time not been discharged, the
Indenture Trustee has commenced the enforcement of remedies under Section 17 of
the Facility Lease, or (ii) in the judgment of the Owner Participant the FILOT
Lease is likely to terminate or cease to be in full force and effect before the
Owner Lessor has exercised the Purchase Options.

                                      74
<PAGE>
III.   MISCELLANEOUS

Consents; Cooperation. The Owner Participant covenants and agrees that it shall
not unreasonably withhold its consent to any consent requested of the Owner
Lessor under the terms of the Operative Documents that by its terms is not to be
unreasonably withheld by the Owner Lessor.

Successor Owner Lessor. The parties hereto agree that the transfer or assignment
pursuant to the terms of the LLC Agreement by the Owner Lessor to a successor
Owner Lessor, will not violate the terms of any Operative Document, the
performance of the FILOT Lease or the FILOT Lease (subject to any applicable
consent required by the County).

Bankruptcy of Lessor Estate. If (i) all or any part of the Lessor Estate becomes
the property of a debtor subject to the reorganization provisions of Title 11 of
the United States Code, as amended from time to time, (ii) pursuant to such
reorganization provisions the Owner Participant is required, by reason of the
Owner Participant being held to have recourse liability to the debtor or the
trustee of the debtor directly or indirectly, to make payment on account of any
amount payable as principal or interest on the Lessor Notes, and (iii) the
Indenture Trustee actually receives any Excess Amount, as defined below, which
reflects any payment by the Owner Participant on account of clause (ii) above,
the Indenture Trustee shall promptly refund to the Owner Participant such Excess
Amount (and, to the extent so refunded, such amount owing under the Lessor Notes
shall be reinstated). For purposes of this Section 15.3, "Excess Amount" means
the amount by which such payment exceeds the amount which would have been
received by the Indenture Trustee if the Owner Participant had not become
subject to the recourse liability referred to in clause (ii) above. Nothing
contained in this Section 15.3 shall prevent the Indenture Trustee from
enforcing any personal recourse obligations (and retaining the proceeds thereof)
of the Owner Participant as contemplated by this Participation Agreement (other
than referred to in clause (ii)).

Amendments and Waivers. No term, covenant, agreement or condition of this
Agreement may be terminated, amended or compliance therewith waived (either
generally or in a particular instance, retroactively or prospectively) except by
an instrument or instruments in writing executed by each party hereto.

Notices. Unless otherwise expressly specified or permitted by the terms hereof,
all communications and notices provided for herein shall be in writing or by a
telecommunications device capable of creating a written record, and any such
notice shall become effective (a) upon personal delivery thereof, including,
without limitation, by overnight mail or courier service, (b) in the case of
notice by United States mail, certified or registered, postage prepaid, return
receipt requested, upon receipt thereof, or (c) in the case of notice by such a
telecommunications device, upon transmission thereof; provided such transmission
is promptly confirmed by either of the methods set forth in clauses (a) or (b)
above, in each case addressed to each party hereto at its address set forth
below or, in the case of any such party hereto, at such other address as such
party may from time to time designate by written notice to the other parties
hereto:

     If to the Facility Lessee:

                                      75
<PAGE>
          Broad River Energy, LLC
          c/o Calpine Northbrook Office
          650 Dundee Road, Suite 350
          Northbrook, IL 60062
          Attention:   Senior Counsel
          Telephone:   (847) 559-9800
          Facsimile:   (847) 559-1805

          with a copy to:

               Calpine Corporation
               50 West San Fernando Street, 5th Floor
               San Jose, California  95113
               Attention: Asset Manager and General Counsel
               Telephone: (408) 995-5115
               Facsimile: (408) 995-0505

     If to the Guarantor:

          Calpine Corporation
          50 West San Fernando Street, 5th Floor
          San Jose, California  95113
          Attention: Asset Manager and General Counsel
          Telephone: (408) 995-5115
          Facsimile: (408) 995-0505

          If to the Owner Lessor, the Trust Company or the Lessor Manager:

          c/o Wells Fargo Bank Northwest, National Association
          MAC U1254-031
          79 South Main Street
          Salt Lake City, UT 84111
          Telephone: (801) 246-5630
          Facsimile:  (801) 246-5053
          Attention: Corporate Trust Services

          If to the Owner Participant:

          SBR OP-4, LLC
          c/o Wells Fargo Bank Northwest, National Association
          MAC U1254-031
          79 South Main Street
          Salt Lake City, UT 84111
          Telephone: (801) 246-5630
          Facsimile:  (801) 246-5053
          Attention: Corporate Trust Services

                                      76
<PAGE>
          with a copy to:

               Newcourt Capital USA Inc.
               1211 Avenue of the Americas - 22nd Floor
               New York, New York  10036
               Telephone:  (212) 382-7255
               Facsimile:  (212) 382-9033
               Attention:  Managing Director

                                      77
<PAGE>
          If to the Indenture Trustee:

          State Street Bank and Trust Company of Connecticut, National
          Association
          225 Asylum Street, Goodwin Square
          Hartford, CT 06103
          Telephone No.: (860) 244-1822
          Facsimile No.: (860) 244-1889
          Attention: Corporate Trust Department

               with a copy to:

          State Street Bank and Trust Company of California, National
          Association
          633 West 5th Street, 12th floor
          Los Angeles, California 90071
          Telephone No.: (213) 362-7373
          Facsimile No.: (213) 362-7357
               Attention: Corporate Trust Department

          If to the Pass Through Trustees:

          State Street Bank and Trust Company of Connecticut, National
          Association
          225 Asylum Street, Goodwin Square
          Hartford, CT 06103
          Telephone No.: (860) 244-1822
          Facsimile No.: (860) 244-1889
          Attention: Corporate Trust Department

               with a copy to:

          State Street Bank and Trust Company of California, National
          Association
          633 West 5th Street, 12th floor
          Los Angeles, California 90071
          Telephone No.: (213) 362-7373
          Facsimile No.: (213) 362-7357
               Attention: Corporate Trust Department

     If to the Manager:

          Credit Suisse First Boston
          Eleven Madison Avenue
          New York, New York 10010
          Telephone No.: (212) 325-2000
          Attention: Richard O'Day

          A copy of all notices provided for herein shall be sent by the party
          giving such notice to each of the other parties hereto. In addition,

                                      78
<PAGE>
          the Facility Lessee shall (unless otherwise
          directed by the applicable Rating Agency) provide to each
          Rating Agency a copy of any information, report or notice it
          gives to the Indenture Trustee hereunder or any other
          Operative Documents.

                                      79
<PAGE>
Survival. All warranties, representations, indemnities and covenants made by any
party hereto, herein or in any certificate or other instrument delivered by any
such party or on behalf of any such party under this Agreement shall be
considered to have been relied upon by each other party hereto and shall survive
the consummation of the transactions contemplated hereby and in the other
Operative Documents and the FILOT Lease regardless of any investigation made by
any such party or on behalf of any such party. In addition, the indemnifications
by the Facility Lessee under Sections 9.1 and 9.2 of this Agreement, subject to
Sections 9.1(b) and 9.2(b), respectively, the Facility Site Lease and the
Calpine Guaranty, shall expressly survive the expiration or early termination
(in either case, for whatever reason) of the Facility Lease or the transfer or
other disposition of the respective interests of the Owner Participant, the
Owner Lessor, the Lessor Manager, the Lease Indenture Company, the Indenture
Trustee, the Pass Through Trustees and the Certificateholders in, to and under
this Agreement, the Assignment Agreement and the other Operative Documents and
the FILOT Lease. Except as expressly provided above or in Section 22.3 of the
Facility Lease, the Tax Indemnity Agreement or as otherwise expressly provided
in the Operative Documents, the representations, warranties, covenants and
agreements of the Transaction Parties under the Operative Documents shall
terminate and be of no further force and effect effective upon the expiration or
earlier termination of the Facility Lease.

Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of, and shall be enforceable by, the parties hereto and their
respective successors and assigns as permitted by and in accordance with the
terms hereof, including each successive holder of the Member Interest of the
Owner Participant permitted under Section 7.1 and each successive transferee or
transferees of Lessor Notes permitted under Section 2.8 of the Collateral Trust
Indenture. Except as expressly provided herein or in the other Operative
Documents, no party hereto may assign its interests herein without the prior
written consent of the other parties hereto.

Business Day. Notwithstanding anything herein or in any other Operative Document
to the contrary, if the date on which any payment is to be made pursuant to this
Agreement or any other Operative Document is not a Business Day, the payment
otherwise payable on such date shall be payable on the next succeeding Business
Day with the same force and effect as if made on such scheduled date and
(provided such payment is made on such succeeding Business Day) no interest
shall accrue on the amount of such payment from and after such scheduled date to
the time of such payment on such next succeeding Business Day.

Governing Law. This Agreement has been delivered in the State of New York and
shall be in all respects governed by and construed in accordance with the laws
of the State of New York including all matters of construction, validity and
performance without giving effect to the conflicts of laws provisions thereof
except New York General Obligations Law Section 5-1401.

Severability. If any provision hereof shall be invalid, illegal or unenforceable
under Applicable Law, the validity, legality and enforceability of the remaining
provisions hereof shall not be affected or impaired thereby.

Counterparts. This Agreement may be executed in any number of counterparts,
each executed counterpart constituting an original but all together only one
agreement.

                                      80
<PAGE>
Headings and Table of Contents. The headings of the sections of this Agreement
and the Table of Contents are inserted for purposes of convenience only and
shall not be construed to affect the meaning or construction of any of the
provisions hereof.

Limitation of Liability.

None of the Owner Participant, the Owner Lessor, the Trust Company, the Lessor
     Manager, the Indenture Trustee, the Lease Indenture Company, the Pass
     Through Trustees, the Pass Through Company or the Certificateholders shall
     have any obligation or duty to the Facility Lessee or to others with
     respect to the transactions contemplated hereby, except those obligations
     or duties expressly set forth in this Agreement and the other Operative
     Documents to which such Person is a party, and none of the Owner
     Participant, the Owner Lessor, the Indenture Trustee, the Lease Indenture
     Company, the Pass Through Trustees, the Pass Through Company or the
     Certificateholders shall be liable for performance by any other party
     hereto of such other party's obligations or duties hereunder. Without
     limitation of the generality of the foregoing, under no circumstances
     whatsoever shall the Owner Participant be liable to the Facility Lessee for
     any action or inaction on the part of the Owner Lessor in connection with
     the transactions contemplated herein, whether or not such action or
     inaction is caused by willful misconduct or gross negligence of the Owner
     Lessor, unless such action or inaction is at the written direction of the
     Owner Participant.

Neither the Facility Lessee nor any other Calpine Party shall have any
     obligation or duty to the Owner Participant, the Owner Lessor, the
     Indenture Trustee, the Lease Indenture Company, the Pass Through Trustees,
     the Pass Through Company, the Certificateholders or to others with respect
     to the transactions contemplated hereby, except those obligations or duties
     expressly set forth in this Agreement and the other Operative Documents,
     and neither the Facility Lessee nor any other Calpine Party (except Calpine
     to the extent set forth in the Calpine Guaranty) shall be liable for
     performance by any other party hereto of such other party's obligations or
     duties hereunder.

The Lease Indenture Company and the Pass Through Company are entering into the
     Operative Documents to which it is a party solely as trustees under the
     Collateral Trust Indenture and the Pass Through Trust Agreements,
     respectively, and not in their individual capacities, except as expressly
     provided herein or therein, and in no case whatsoever shall the Lease
     Indenture Company and the Pass Through Company be personally liable for, or
     for any loss in respect of, any of the statements, representations,
     warranties, agreements or obligations of the Owner Lessor hereunder or
     under any other Operative Document or the FILOT Lease, as to all of which
     the other parties hereto agree to look solely to the Indenture Estate and
     the Lessor Estate, respectively; provided, however, that the Lease
     Indenture Company and the Pass Through Trust Company shall be liable
     hereunder for their own negligence or willful misconduct or for a breach of
     their representations, warranties and covenants made in their individual
     capacity under any Operative Document.

The right of the Indenture Trustee or the Pass Through Trustees to perform any
     discretionary act enumerated herein or in any other Operative Document
     (including, without limitation, the right to consent to any action which
     requires their consent and the right to waive any provision of, or consent
     to any change or amendment to, any of the Operative Documents)

                                      81
<PAGE>
     shall not be construed as a duty, and neither the Indenture Trustee nor
     the Pass Through Trustees shall be liable or answerable for other than
     its negligence or willful misconduct in the performance of such acts. In
     connection with any such discretionary acts, the Indenture Trustee may in
     its sole discretion (but shall not, except as otherwise provided herein
     or in the Collateral Trust Indenture or as otherwise required by
     Applicable Law, have any obligation to) request the approval or
     instruction of the Pass Through Trustees as the holder of the Lessor
     Notes, and the Pass Through Trustees may in its sole discretion (but
     shall not, except as otherwise provided in the Operative Documents or as
     otherwise required by Applicable Law, have any obligation to) request the
     approval of the Certificateholders.

The Owner Participant will give the Facility Lessee at least 15 days' prior
     notice of any proposed amendment or supplement to the LLC Agreement (other
     than an amendment solely effecting a transfer of the Owner Participant's
     interest in the Lessor Estate) and deliver true, complete and fully
     executed copies to the Facility Lessee of any amendment or supplement to
     the LLC Agreement. No amendment or supplement to the LLC Agreement that
     would reasonably be expected to materially adversely affect the interests
     of the Facility Lessee or the Indenture Trustee shall become effective
     without the written consent of the Indenture Trustee and the Facility
     Lessee.

Consent to Jurisdiction; Waiver of Trial by Jury; Process Agent.

Each of the parties hereto (i) hereby irrevocably submits to the nonexclusive
     jurisdiction of the Supreme Court of the State of New York, New York County
     (without prejudice to the right of any party to remove to the United States
     District Court for the Southern District of New York) and to the
     nonexclusive jurisdiction of the United States District Court for the
     Southern District of New York for the purposes of any suit, action or other
     proceeding arising out of this Agreement, the other Operative Documents,
     and the FILOT Lease (except as otherwise provided therein), or the subject
     matter hereof or thereof or any of the transactions contemplated hereby or
     thereby brought by any of the parties hereto or their successors or
     assigns; (ii) hereby irrevocably agrees that all claims in respect of such
     action or proceeding may be heard and determined in such New York State
     court, or in such federal court; and (iii) to the extent permitted by
     Applicable Law, hereby irrevocably waives, and agrees not to assert, by way
     of motion, as a defense, or otherwise, in any such suit, action or
     proceeding any claim that it is not personally subject to the jurisdiction
     of the above-named courts, that the suit, action or proceeding is brought
     in an inconvenient forum, that the venue of the suit, action or proceeding
     is improper or that this Agreement, the other Operative Documents, or the
     subject matter hereof or thereof may not be enforced in or by such court.

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY
     IRREVOCABLY WAIVES THE RIGHT TO DEMAND A TRIAL BY JURY, IN ANY SUCH SUIT,
     ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT, THE OTHER
     OPERATIVE DOCUMENTS, OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY OF THE
     TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY BROUGHT BY ANY OF THE PARTIES
     HERETO OR THEIR SUCCESSORS OR ASSIGNS.

                                      82
<PAGE>
By the execution and delivery of this Agreement, the Facility Lessee
     designate, appoint and empower National Registered Agents, Inc., 440 Ninth
     Avenue, 5th Floor, New York, New York 10001, and the Owner Lessor
     designates, appoints and empowers CT Corporation System, with an office at
     111 Eighth Avenue, New York, New York 10011, as its authorized agent to
     receive for and on its behalf service of any summons, complaint or other
     legal process in any such action, suit or proceeding in the State of New
     York for so long as any obligation of the Facility Lessee or the Owner
     Lessor, as applicable, shall remain outstanding hereunder or under any of
     the other Operative Documents or with respect to the Facility Lessee for so
     long as it has any obligations remaining under the FILOT Lease. The
     Facility Lessee shall grant an irrevocable power of attorney to CT
     Corporation System, in respect of such appointment and shall maintain such
     power of attorney in full force and effect for so long as any obligation of
     the Facility Lessee shall remain outstanding hereunder or under any of the
     Operative Documents.

Further Assurances. Each party hereto will promptly and duly execute and deliver
such further documents to make such further assurances for and take such further
action reasonably requested by any party to whom such first party is obligated,
all as may be reasonably necessary to carry out more effectively the intent and
purpose of this Agreement and the other Operative Documents.

Effectiveness. This Agreement has been dated as of the date first above written
for convenience only. This Agreement shall be effective on the date of
execution and delivery by each of the parties hereto.

Measuring Life. If and to the extent that any of the options, rights and
privileges granted under this Agreement, would, in the absence of the
limitation imposed by this sentence, be invalid or unenforceable as being in
violation of the rule against perpetuities or any other rule or law relating to
the vesting of interests in property or the suspension of the power of
alienation of property, then it is agreed that notwithstanding any other
provision of this Agreement, such options, rights and privileges, subject to
the respective conditions hereof governing the exercise of such options, rights
and privileges, will be exercisable only during (a) the longer of (i) a period
which will end twenty-one (21) years after the death of the last survivor of
the descendants living on the date of the execution of this Agreement of the
following Presidents of the United States: Franklin D. Roosevelt, Harry S.
Truman, Dwight D. Eisenhower, John F. Kennedy, Lyndon B. Johnson, Richard M.
Nixon, Gerald R. Ford, James E. Carter, Ronald W. Reagan, George H.W. Bush,
William J. Clinton and George W. Bush or (ii) the period provided under the
Uniform Statutory Rule Against Perpetuities or (b) the specific applicable
period of time expressed in this Agreement, whichever of (a) and (b) is shorter.

No Partnership, Etc. The parties hereto intend that nothing contained in this
Participation Agreement or any other Operative Document shall be deemed or
construed to create a partnership, joint venture or other co-ownership
arrangement by and among any of them.

Entire Agreement. This Agreement, together with the other applicable Operative
Documents, constitutes the entire agreement of the parties hereto and thereto
with respect to the subject matter hereof and thereof and supersedes all oral
and all prior written agreements and understandings with respect to such subject
matter; provided that, notwithstanding the foregoing,

                                      83
<PAGE>
the obligations of Calpine with respect to fees and expenses set forth in the
letter agreement, dated July 24, 2001 between Calpine and CSFB and the letter
agreement dated August 1, 2001 between Calpine and Newcourt Capital Securities,
Inc. shall not be superceded hereby and shall remain in full force and effect.

Public Utility Regulation. the Facility Lessee, the Owner Lessor and the Owner
Participant agree to cooperate and to take reasonable measures to alleviate the
source or consequence of any regulation constituting a Regulatory Event of Loss,
at the cost and expense of the Facility Lessee, so long as there shall be no
adverse consequences to the Owner Lessor or the Owner Participant as the result
of such cooperation or taking of reasonable measures.

Confidentiality of Information. Each of the parties hereto agrees that any
information (x) contained herein or in the other Operative Documents (including
any terms, conditions, agreements, financial projections, and other financial
and operating information contained herein or therein, and the terms of any
insurance policies required or otherwise maintained pursuant hereto), (y)
disclosed or to be disclosed by one such party to another such party (for
purposes of this Section 15.21, each of the parties to this Agreement being
referred to herein as a "Receiving Party") in connection with this Agreement or
any other Operative Document, or (z) otherwise received in connection with this
Agreement or any other Operative Document (or the transactions contemplated
thereby) and designated by the disclosing party in writing as confidential,
shall, in each case, be kept confidential by the Receiving Party and shall not
be used otherwise than in connection with the business of the Parties
contemplated hereunder except:

to the extent such information is generally available to the public prior to
     the Receiving Party's receipt thereof, or which becomes public after such
     receipt, but through no violation by such Receiving Party of this Section
     15.21;

as may be required by Applicable Law or, upon prompt prior written notice to the
     affected party, by judicial process;

as may be independently developed by the Receiving Party other than in
     connection with the transactions contemplated hereby with respect to the
     Facility or the Facility Site;

as may be disclosed to counsel, auditors or accountants to the Receiving Party,
     or to the National Association of Insurance Commissioners;

to the extent used in connection with any litigation to which the Receiving
     Party is a party, provided that the other parties hereto shall have been
     given prompt prior written notice (to the extent permitted by law) of such
     proposed disclosure;

as may be disclosed to any transferee or proposed transferee of the Receiving
     Party; provided, however, that, prior to any such disclosure, any such
     transferee or proposed transferee, as the case may be, shall have agreed in
     writing to be bound by the terms of this Section 15.21; or

as may be necessary or desirable in connection with the enforcement of remedies
     by any party to any of the Operative Documents.

                                      84
<PAGE>
          The foregoing obligation as to confidentiality and non-use shall
survive the termination of this Agreement for a period of five years.

Reliance. Calpine and the Facility Lessee agree that the Transaction Parties may
rely on the Environmental Reports.

Amendments, Etc. No Operative Document nor any of the terms thereof (including
the terms of this Section 15.23) may be terminated, amended, supplemented,
waived or modified, except by an instrument in writing (a) signed in the case of
a waiver, by the party against which enforcement of such waiver is sought, and
no such waiver shall become effective unless signed copies thereof shall have
been delivered to each such party or (b) in the case of termination, amendments,
supplements or modifications, consented to by all parties hereto; provided,
however, that the consent of the Facility Lessee is not required in the case of
amendments to any Operative Document to which the Facility Lessee is not a party
and which would not increase or accelerate the Facility Lessee's or the
Guarantor's obligations under any of the Operative Documents nor impair the
Facility Lessee's or the Guarantor's rights under any of the Operative
Documents. Notwithstanding the foregoing, Section 5.6 of the Collateral Trust
Indenture shall not be amended without the Guarantor's consent.

                                      85
<PAGE>
     IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be executed and delivered by their respective officers thereunto
duly authorized.

                                      BROAD RIVER ENERGY LLC,
                                      a Delaware limited liability company

                                             By: ______________________________
                                             Name:
                                             Title:
                                             Date:
<PAGE>
                                             BROAD RIVER OL-4 LLC, a Delaware
                                             limited liability company

                                             By: WELLS FARGO BANK NORTHWEST,
                                             NATIONAL ASSOCIATION
                                             not in its individual capacity but
                                             solely as Lessor Manager

                                             By: ______________________________
                                             Name:
                                             Title:
                                             Date:

                                             SBR OP-4 LLC, a Delaware limited
                                             liability company

                                             By: WELLS FARGO BANK NORTHWEST,
                                             NATIONAL ASSOCIATION
                                             not in its individual capacity but
                                             solely as Lessor Manager

                                             By: ______________________________
                                             Name:
                                             Title:
                                             Date:

                                             WELLS FARGO BANK NORTHWEST,
                                             NATIONAL ASSOCIATION,
                                      not in its individual capacity, except as
                                      expressly provided herein, but solely as
                                      Lessor Manager

                                      By:    _______________________
                                             Name:
                                             Title:
                                             Date:
<PAGE>
                                             STATE STREET BANK AND TRUST COMPANY
                                             OF CONNECTICUT, NATIONAL
                                             ASSOCIATION
                                      not in its individual capacity, except to
                                      the extent expressly provided herein, but
                                      solely as Indenture Trustee under the
                                      Collateral Trust Indenture

                                        By: ______________________________
                                        Name:
                                        Title:
                                        Date:

                                             STATE STREET BANK AND TRUST COMPANY
                                             OF CONNECTICUT, NATIONAL
                                             ASSOCIATION
                                      not in its individual capacity, except to
                                      the extent expressly provided herein, but
                                      solely as Pass Through Trustees under the
                                      Pass Through Trust Agreement

                                        By: ______________________________
                                        Name:
                                        Title:
                                        Date:
<PAGE>
                                             CALPINE CORPORATION
                                                         a Delaware corporation

                                        By: ______________________________
                                        Name:
                                        Title:
                                        Date:
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              APPENDIX A - DEFINITIONS AND RULES OF INTERPRETATION

RULES OF INTERPRETATION

          In this Appendix A and each Operative Document (as hereinafter
defined), unless otherwise provided herein or therein:

     (a)  the terms set forth in this Appendix A or in any such Operative
     Document shall have the meanings herein provided for and any term used
     in an Operative Document and not defined therein or in this Appendix A
     but in another Operative Document shall have the meaning herein or
     therein provided for in such other Operative Document;

     (b)  any term defined in this Appendix A by reference to another
     document, instrument or agreement shall continue to have the meaning
     ascribed thereto whether or not such other document, instrument or
     agreement remains in effect;

     (c)  words importing the singular include the plural and vice versa;

     (d)  words importing a gender include any gender;

     (e)  a reference to a part, clause, section, paragraph, article, party,
     annex, appendix, exhibit, schedule or other attachment to or in respect
     of an Operative Document is a reference to a part, clause, section,
     paragraph, or article of, or a party, annex, appendix, exhibit, schedule
     or other attachment to, such Operative Document unless, in any such case,
     otherwise expressly provided in any such Operative Document;

     (f)  a reference to any statute, regulation, proclamation, ordinance or
     law includes all statutes, regulations, proclamations, ordinances or
     laws varying, consolidating or replacing the same from time to time, and
     a reference to a statute includes all regulations, policies, protocols,
     codes, proclamations and ordinances issued or otherwise applicable under
     that statute unless, in any such case, otherwise expressly provided in
     any such statute or in such Operative Document;

     (g)  a definition of or reference to any document, schedule, exhibit,
     instrument or agreement includes an amendment or supplement to, or
     restatement, replacement, modification or novation of, any such document,
     schedule, exhibit, instrument or agreement unless otherwise specified in
     such definition or in the context in which such reference is used;

     (h)  a reference to a particular section, paragraph or other part of a
     particular statute shall be deemed to be a reference to any other
     section, paragraph or other part substituted therefor from time to time;
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     (i)  if a capitalized term describes, or shall be defined by reference
     to, a document, instrument or agreement that has not as of any
     particular date been executed and delivered and such document, instrument
     or agreement is attached as an exhibit to the Participation Agreement (as
     hereinafter defined), such reference shall be deemed to be to such form
     and, following such execution and delivery and subject to paragraph (g)
     above, to the document, instrument or agreement as so executed and
     delivered;

     (j)  a reference to any Person (as hereinafter defined) includes such
     Person's successors and permitted assigns;

     (k)  any reference to "days" shall mean calendar days unless "Business
     Days" (as hereinafter defined) are expressly specified;

     (l)  if the date as of which any right, option or election is
     exercisable, or the date upon which any amount is due and payable, is
     stated to be on a date or day that is not a Business Day, such right,
     option or election may be exercised, and such amount shall be deemed due
     and payable, on the next succeeding Business Day with the same effect as
     if the same was exercised or made on such date or day (without, in the
     case of any such payment, the payment or accrual of any interest or other
     late payment or charge, provided such payment is made on such next
     succeeding Business Day);

     (m)  any reference to the satisfaction, release and/or discharge of the
     Collateral Trust Indenture or the Collateral Documents (each as
     hereinafter defined) or the Lien (as hereinafter defined) thereof or
     words of similar import shall, whether or not so expressly stated, be
     deemed to be a reference to the satisfaction, release and discharge in
     full and cancellation of the Lien of the Collateral Trust Indenture or
     the Collateral Documents, as the case may be, in accordance with the
     express provisions thereof;

     (n)  words such as "hereunder", "hereto", "hereof" and "herein" and
     other words of similar import shall, unless the context requires
     otherwise, refer to the whole of the applicable document and not to any
     particular article, section, subsection, paragraph or clause thereof; and

     (o)  a reference to "including" shall mean including without limiting
     the generality of any description preceding such term, and for purposes
     hereof and of each Operative Document the rule of ejusdem generis shall
     not be applicable to limit a general statement, followed by or referable
     to an enumeration of specific matters, to matters similar to those
     specifically mentioned.

DEFINED TERMS

     "467 LOAN PRINCIPAL BALANCE" shall have the meaning set forth in Section
     3.2(d) of the Facility Lease.

     "ACCEPTABLE BANK" shall mean, for the purposes of Section 5.3 of the
      Facility Lease, a banking institution, the senior long-term unsecured
      debt of which is rated at least A by

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     S&P and by Moody's, and which maintains an office or corresponding bank
     located in New York City.

     "ACTUAL KNOWLEDGE" shall mean, with respect to any Transaction Party,
     actual knowledge of, or receipt of written notice by, an officer (or
     other employee whose responsibilities include the administration of the
     Overall Transaction) of such Transaction Party.

     "ADDITIONAL CERTIFICATES" shall mean any additional certificates issued
     by the Pass Through Trusts in connection with the issuance of Additional
     Lessor Notes.

     "ADDITIONAL EQUITY INVESTMENT" shall mean the amount, if any, the Owner
     Participant shall provide (in its sole and absolute discretion) to
     finance all or a portion of the Owner Lessor's Percentage of the cost of
     any Required or Non-Severable Improvement financed pursuant to Section
     11.1 of the Participation Agreement.

     "ADDITIONAL LESSOR NOTES" shall have the meaning specified in Section
     2.12(a) of the Collateral Trust Indenture.

     "AFFILIATE" of a particular Person shall mean, at any time, (a) any
     Person directly or indirectly controlling, controlled by or under common
     control with such particular Person and (b) any Person beneficially
     owning or holding, directly or indirectly, 10% or more of any class of
     voting or equity interest of such first Person or any corporation of
     which such first Person beneficially owns or holds, in the aggregate,
     directly or indirectly, 10% or more of any class of voting or equity
     interest. For purposes of this definition, "control" when used with
     respect to any particular Person shall mean the power to direct the
     management and policies of such Person, directly or indirectly, whether
     through the ownership of voting securities, by contract or otherwise, and
     the terms "controlling" and "controlled" have meanings correlative to the
     foregoing; provided, however, that under no circumstances shall the Lease
     Indenture Company be considered to be an Affiliate of either the
     Indenture Trustee or any Certificateholder, nor shall any of the
     Indenture Trustee or any Certificateholder be considered to be an
     Affiliate of the Lease Indenture Company, nor shall the Lease Indenture
     Company, the Indenture Trustee, solely because any Operative Document
     contemplates that any of them may request or act at the instruction of
     any such Person or such Person's Affiliate.

     "AFTER-TAX BASIS" shall mean, in the context of determining the amount
     of a payment to be made on such basis, the payment of an amount which,
     after reduction by the net increase in Taxes of the recipient (actual or
     constructive) of such payment, which net increase shall be calculated by
     taking into account any reduction in such Taxes resulting from any Tax
     benefits realized or to be realized by the recipient as a result of such
     payment, shall be equal to the amount required to be paid. In calculating
     the amount payable by reason of this provision, all income taxes payable
     and tax benefits realized or to be realized shall be determined on the
     assumptions that (i) the recipient shall be subject to the applicable
     income taxes at the highest marginal tax rates then applicable to
     corporate taxpayers taxed on the same basis as the recipient that are in
     effect in the applicable jurisdictions at the time such amount is
     received or properly accrued, and

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     (ii) all related tax benefits are utilized at the highest marginal rates
     then applicable to corporate taxpayers taxed on the same basis as the
     recipient that are then in effect in the applicable jurisdictions.

     "AGREEMENT PERIOD" shall have the meaning set forth in Section 7.6 of
     the Participation Agreement.

     "ALLOCATED RENT" shall have the meaning specified in Section 3.2(b) of
     the Facility Lease.

     "APPLICABLE LAW" shall mean, without limitation, all applicable laws,
     including, without limitation, all Environmental Laws, and treaties,
     judgments, decrees, injunctions, writs and orders of any court,
     arbitration board or Governmental Entity and rules, regulations, orders,
     ordinances, licenses and permits of any Governmental Entity.

     "APPLICABLE PERMIT" shall mean any Permit, including any zoning,
     environmental protection, pollution, sanitation, FERC, safety, siting or
     building Permit, (a) that is necessary at any given time in light of the
     stage of development, construction or operation of the Facility or
     Facility Site to acquire, operate, maintain, repair, own, lease or use
     the Facility, the Undivided Interest (if any), the Ground Interest or
     Facility Site as contemplated by the Operative Documents and the FILOT
     Lease, to sell electricity therefrom, to enter into any Operative
     Document or to consummate any transaction contemplated thereby, or (b)
     that is necessary so that none of the Owner Lessor, the Owner
     Participant, the Lessor Manager, the Indenture Trustee, the Pass Through
     Trustees or any Certificateholder nor any Affiliate of any of them may be
     deemed by any Governmental Entity to be subject to regulation under PUHCA
     or under any other Applicable Law relating to electric utilities,
     generators, wholesalers or retailers, in each case as a result of the
     operation of the Facility or the sale of electricity therefrom.

     "APPLICABLE RATE" shall mean the Prime Rate plus 1% per annum.

     "APPRAISER" shall mean Deloitte & Touche LLP Valuation Group.

     "APPRAISAL PROCEDURE" shall mean (except with respect to the Closing
     Appraisal and any appraisal to determine Fair Market Sales Value or Fair
     Market Rental Value during any period when a Lease Event of Default shall
     have occurred and be continuing), an appraisal conducted by an appraiser
     or appraisers in accordance with the following procedures. Within ten
     (10) Business Days of written notice from the initiating party of the
     commencement of an Appraisal Procedure, the Owner Participant and the
     Facility Lessee will each appoint one Independent Appraiser, which
     Independent Appraisers shall attempt to agree upon the Fair Market Sales
     Value or Fair Market Rental Value that is the subject of the appraisal.
     If either the Owner Participant or the Facility Lessee does not appoint
     its appraiser within such ten Business Day period, the determination of
     the other appraiser shall be conclusive and binding on the Owner
     Participant and the Facility Lessee. If the appraisers appointed by the
     Owner Participant and the Facility Lessee are unable to agree upon the
     value, period, amount or other determination in question within thirty
     (30) days, such appraisers shall jointly appoint a third Independent
     Appraiser or, if

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     such appraisers do not appoint a third Independent Appraiser, the Owner
     Participant and the Facility Lessee shall jointly appoint the third
     Independent Appraiser. In such case, the average of the determinations of
     the three appraisers shall be conclusive and binding on the Owner
     Participant and the Facility Lessee, unless the determination of one
     appraiser is disparate from the middle determination by more than twice
     the amount by which the third determination is disparate from the middle
     determination, in which case the determination of the most disparate
     appraiser shall be excluded, and the average of the remaining two
     determinations shall be conclusive and binding on the Owner Participant
     and the Facility Lessee. Any appraisal determined in accordance with the
     foregoing must be delivered within thirty (30) days after the date on
     which the last of the appraisers is appointed pursuant to the process set
     forth above.

     "ASSIGNED DOCUMENTS" shall have the meaning specified in clause (1) of
     the Granting Clause of the Collateral Trust Indenture.

     "ASSIGNED FILOT DOCUMENTS" with respect to the Facility Site Lease and
     the Springing Facility Site Lease, shall have the meaning set forth in
     the recitals to the Facility Site Lease and the Springing Facility Site
     Lease, respectively.

     "ASSIGNMENT AGREEMENT" shall mean the Assignment Agreement (BR-4) dated
     as of the Closing Date between the Facility Lessee and the Owner Lessor,
     substantially in the form of Exhibit B to the Participation Agreement
     duly completed, executed and delivered on the Closing Date pursuant to
     which the Owner Lessor will acquire the Undivided Interest and the Ground
     Interest from the Facility Lessee.

     "ASSUMPTION PRICE" with respect to the Undivided Interest, shall mean
     $75,000,000.

     "ATTRIBUTABLE DEBT" in respect of a Sale/Leaseback Transaction means, as
     at the time of determination, the present value (discounted at the rate
     of interest set forth or implicit in the terms of such lease (or, if not
     practicable to determine such rate, the weighted average rate of interest
     borne by the Certificates outstanding under the Pass Through Trust
     Agreement (calculated, in the event of the issuance of any original issue
     discount Lessor Notes, based on the imputed interest rate with respect
     thereto)), compounded annually) of the total obligations of the lessee
     for rental payments during the remaining term of the lease included in
     such Sale/Leaseback Transaction (including any period for which such
     lease has been extended).

     "AVERAGE LIFE" means, as of the date of determination, with respect to
     any Indebtedness or Preferred Stock, the quotient obtained by dividing
     (i) the sum of the products of (A) the numbers of years from the date of
     determination to the dates of each successive scheduled principal payment
     of such Indebtedness or scheduled redemption or similar payment with
     respect to such Indebtedness or Preferred Stock multiplied by (B) the
     amount of such payment by (ii) the sum of all such payments.

     "BANKRUPTCY CODE" shall mean the United States Bankruptcy Code of 1978,
     as amended from time to time, 11 U. S.C. [sec] 101 et seq.

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     "BANKRUPTCY LAW" means Title 11 of the United States Code or any similar
     Federal or State law for the relief of debtors.

     "BASIC LEASE TERM" shall have the meaning specified in Section 3.1 of
     the Facility Lease.

     "BASIC RENT" shall have the meaning specified in Section 3.2(a) of the
     Facility Lease.

     "BENEFICIARY" or "BENEFICIARIES" with respect to the Calpine Guaranty,
     shall have the meaning set forth in Section 4 thereof.

     "BOARD OF DIRECTORS" means the Board of Directors or General Partner, as
     applicable, of the Guarantor or the Facility Lessee, as the context
     requires, or any authorized committee of either thereof.

     "BOARD RESOLUTION" means a copy of a resolution certified by the
     Secretary or an Assistant Secretary of the Guarantor to have been duly
     adopted by the Board of Directors and to be in full force and effect on
     the date of such certification, and delivered to the Indenture Trustee.

     "BROAD RIVER" shall mean Broad River Energy LLC.

     "BURDENSOME BUYOUT EVENT" shall mean the occurrence of any event which
     gives the Facility Lessee the right to terminate the Facility Lease
     pursuant to Section 13.1 or Section 13.2 thereof.

     "BURDENSOME TERMINATION NOTICE" shall mean a notice required in
     accordance with Section 13.1 or Section 13.2, as the case may be, of the
     Facility Lease upon the exercise of a termination option by the Facility
     Lessee.

     "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday, or a
     day on which commercial banking institutions are authorized or required
     by law, regulation or executive order to be closed in New York, New York,
     the city and the state in which the Corporate Trust Office of the
     Indenture Trustee is located or the city and state in which the Pass
     Through Trustees are located.

     "CALPINE" shall mean Calpine Corporation, a Delaware corporation.

     "CALPINE DOCUMENTS" shall mean have the meaning set forth in Section 3.1
     of the Calpine Guaranty.

     "CALPINE GUARANTY" shall mean the Calpine Guaranty and Payment Agreement
     (BR-4) dated as of the Closing Date in favor of the Beneficiaries,
     substantially in the form of Exhibit H to the Participation Agreement.

     "CALPINE GUARANTY EVENT OF DEFAULT" shall mean any of the "Events of
     Default" as specified in Section 7.1 of the Calpine Guaranty.

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     "CALPINE PARTIES" shall mean Calpine, the Facility Lessee, Calpine
     Northbrook Services, LLC, and each other Affiliate of Calpine that is
     party to any Operative Document.

     "CAPITAL STOCK" means any and all shares, interests, participations or
     other equivalents (however designated) of capital stock of a corporation
     or any and all equivalent ownership interests in a Person (other than a
     corporation).

     "CAPITALIZED LEASE OBLIGATIONS" of any Person means the rental
     obligations under any lease of any property (whether real, personal or
     mixed) of which the discounted present value of the rental obligations of
     such Person as lessee, in conformity with GAAP, is required to be
     capitalized on the balance sheet of such Person; the Stated Maturity of
     any such lease shall be the date of the last payment of rent or any other
     amount due under such lease prior to the first date upon which such lease
     may be terminated by the lessee without payment of a penalty.

          "CERTIFICATE PURCHASE AGREEMENT" shall mean the Certificate Purchase
     Agreement, dated the Closing Date, among the Facility Lessee, Calpine,
     and the Initial Purchasers.

          "CERTIFICATEHOLDER INDEMNITEE" shall have the meaning set forth in
     Section 9.2(a) of the Participation Agreement.

          "CERTIFICATEHOLDERS" shall mean each of the holders of Certificates,
     and each of such holder's successors and permitted assigns.

     "CERTIFICATES" shall mean the 8.400% Pass Through Certificates Series A
     and the 9.825% Pass Through Certificates Series B issued on the Closing
     Date and any certificates issued in replacement therefor pursuant to
     Section 3.3, 3.4 or 3.5 of the Pass Through Trust Agreement.

     "CLAIM(S)" individually or collectively as the context may require,
     shall mean any liability (including in respect of negligence (whether
     passive or active or other torts), strict or absolute liability in tort
     or otherwise, warranty, latent or other defects (regardless of whether or
     not discoverable), statutory liability, property damage, bodily injury or
     death), obligation, loss, settlement, damage, penalty, claim, action,
     suit, proceeding (whether civil or criminal), judgment, penalty, fine and
     other legal or administrative sanction, judicial or administrative
     proceeding, cost, expense or disbursement, including reasonable legal,
     investigation and expert fees, expenses and reasonable related charges,
     of whatsoever kind and nature.

     "CLOSING" shall have the meaning specified in Section 2.2(a) of the
     Participation Agreement.

     "CLOSING APPRAISAL" shall mean the appraisal, dated as of the Closing
     Date, prepared by the Appraiser with respect to the Owner Lessor's
     Interest.

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     "CLOSING DATE" shall have the meaning specified in Section 2.2(a) of the
     Participation Agreement.

     "CODE" shall mean the Internal Revenue Code of 1986, as amended from
     time to time, and any successor statute.

     "COLLATERAL DOCUMENTS" shall mean the Collateral Trust Indenture and the
     financing statements.

     "COLLATERAL TRUST INDENTURE" shall mean the Indenture of Trust,
     Mortgage, Security Agreement and Fixture Filing (BR-4), dated as of the
     Closing Date, between the Owner Lessor and the Indenture Trustee, in
     substantially the form of Exhibit I to the Participation Agreement.

    "COMMENCEMENT DATE" with respect to the Springing Facility Site Lease,
     shall have the meaning specified in Section 2.1(a) of the Springing
     Facility Site Lease.

     "COMPETITOR" shall have the meaning specified in Section 7.1(b) of the
     Participation Agreement.

     "COMPONENT" shall mean any appliance, part, instrument, appurtenance,
     accessory, furnishing, equipment or other property of whatever nature
     that may from time to time be incorporated in the Facility, except to the
     extent constituting Improvements or spare parts while being held for
     future use.

     "CONSOLIDATED CURRENT LIABILITIES," as of the date of determination,
     means the aggregate amount of consolidated liabilities of the Guarantor
     and its consolidated Restricted Subsidiaries which may properly be
     classified as current liabilities (including taxes accrued as estimated),
     after eliminating (i) all inter-company items between the Guarantor and
     its Subsidiaries and (ii) all current maturities of long-term
     Indebtedness, all as determined in accordance with GAAP.

     "CONSOLIDATED NET TANGIBLE ASSETS" means, as of any date of
     determination, as applied to the Guarantor, the total amount of
     Consolidated assets (less accumulated depreciation or amortization,
     allowances for doubtful receivables, other applicable reserves and other
     properly deductible items) under GAAP which would appear on a
     Consolidated balance sheet of the Guarantor and its Subsidiaries,
     determined in accordance with GAAP, and after giving effect to purchase
     accounting and after deducting therefrom, to the extent otherwise
     included, the amounts of: (i) Consolidated Current Liabilities; (ii)
     minority interests in consolidated Restricted Subsidiaries held by
     Persons other than the Guarantor or a Restricted Subsidiary; (iii) excess
     of cost over fair value of assets of businesses acquired, as determined
     in good faith by the Board of Directors; (iv) any revaluation or other
     write-up in value of assets subsequent to December 31, 1993 as a result
     of a change in the method of valuation in accordance with GAAP; (v)
     unamortized debt discount and expenses and other unamortized deferred
     charges, goodwill, patents, trademarks, service marks, trade names,
     copyrights, licenses, organization or developmental expenses and other
     intangible items; (vi) treasury stock; and (vii) any cash set apart and
     held in a sinking or other analogous fund established for the purpose of
     redemption or other

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     retirement of Capital Stock to the extent such obligation is not reflected
     in Consolidated Current Liabilities.

     "CONSOLIDATED SUBSIDIARY" shall mean with respect to any Person at any
     date any Subsidiary or other entity the accounts of which would be
     consolidated in accordance with GAAP with those of such Person in its
     consolidated financial statements as of such date.

     "CONSOLIDATION" means, with respect to any Person, the consolidation of
     accounts of such Person and each of its subsidiaries if and to the extent
     the accounts of such Person and such subsidiaries are consolidated in
     accordance with GAAP. The term "Consolidated" shall have a correlative
     meaning.

     "CORPORATE TRUST OFFICE" shall mean, with respect to the Indenture
     Trustee, the office of such Person in the city in which at any particular
     time its corporate trust business shall be principally administered.

          "CORRECTIVE ORDINANCE" shall mean that certain ordinance authorizing
     the Assignment Agreement and adopted by the County on October 1, 2001
     pursuant to a public hearing held September 24, 2001.

     "COUNTY" shall mean Cherokee County, South Carolina.

     "CSFB" shall mean Credit Suisse First Boston.

     "CUSTODIAN" means any receiver, trustee, assignee, liquidator or similar
     official under any Bankruptcy Law.

     "DEBT PORTION OF TERMINATION VALUE" in respect of any determination of
     Termination Value or amount determined by reference to the Termination
     Value payable pursuant to the Operative Documents, shall mean an amount
     equal to the excess of (i) the Termination Value set forth opposite the
     Termination Date corresponding to such date of determination on Schedule
     2 of the Facility Lease, and, if such date of determination is a Rent
     Payment Date, Periodic Rent due on that date (to the extent payable in
     arrears) minus (ii) the sum of (A) the Equity Portion of Termination
     Value and (B) if such date of determination is a Rent Payment Date, the
     Equity Portion of Periodic Rent due on that date.

     "DEFAULT" means any event which is, or after notice or passage of time
     or both would be, a Calpine Guaranty Event of Default.

     "DEPRECIATION DEDUCTION" shall have the meaning specified in Section
     1(a) of the Tax Indemnity Agreement.

     "DISCOUNT RATE" shall mean the Facility Lessee's incremental borrowing
     rate as determined by the Facility Lessee in accordance with FASB 13.

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     "DOLLARS" or the sign "$" shall mean United States dollars or other
     lawful currency of the United States.

     "ENFORCEMENT NOTICE" shall have the meaning specified in Section 5.1 of
     the Collateral Trust Indenture.

     "ENGINEERING CONSULTANT" shall mean Stone and Webster Consultants Inc.

     "ENGINEERING REPORT" shall mean, with respect to the Facility, the Phase
     1 and Phase II reports of the Engineering Consultant, dated October 12,
     2001.

     "ENVIRONMENTAL CONDITION" shall mean any action, omission, event,
     condition or circumstance, including, without limitation, the presence of
     any Hazardous Substance, which does or reasonably could (i) require
     assessment, investigation, abatement, correction, removal or remediation,
     (ii) give rise to any obligation or liability of any nature (whether
     civil or criminal, arising under a theory of negligence or strict
     liability, or otherwise) under any Environmental Law, (iii) create or
     constitute a public or private nuisance or trespass, or (iv) constitute a
     violation of or non-compliance with any Environmental Law.

     "ENVIRONMENTAL CONSULTANT" shall mean Roy F. Weston, Inc.

     "ENVIRONMENTAL LAWS" shall mean any international, national, Native
     American, provincial, regional, federal, state, municipal or local laws,
     ordinances, rules, orders, statutes, decrees, judgments, injunctions,
     directives, permits, licenses, approvals, codes, regulations, common or
     decisional law (including principles of tort, negligence, trespass,
     nuisance, strict liability, contribution and indemnification) or other
     requirement of any Governmental Entity relating to the environment, the
     safety or health of human beings or other living organisms, natural
     resources or toxic, explosive, corrosive, flammable, infectious,
     radioactive or other Hazardous Substances, as each may from time to time
     be amended, supplemented or supplanted.

     "ENVIRONMENTAL REPORTS" shall mean the Phase 1 Environmental Site
     Assessment Report, dated October 10, 2001, prepared by the Environmental
     Consultant.

     "EQUITY INVESTMENT" shall mean the amount specified with respect thereto
     on Schedule 1-A to the Participation Agreement.

     "EQUITY INVESTOR" shall mean Newcourt Capital USA Inc.

     "EQUITY PORTION OF PERIODIC RENT" shall mean for any Rent Payment Date
     the difference between (i) Periodic Rent scheduled to be paid under the
     Facility Lease on such Rent Payment Date and (ii) the principal and
     interest scheduled to be paid on the Lessor Notes on such Rent Payment
     Date.

          "EQUITY PORTION OF TERMINATION VALUE" in respect of any determination
of Termination Value or amount determined by reference to Termination Value
payable pursuant to the Operative Documents, shall mean an amount equal to the
excess, if any, of (i) the

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Termination Value set forth opposite the Termination Date corresponding to such
date of determination on Schedule 2 of the Facility Lease, and, if such date of
determination is a Rent Payment Date, Periodic Rent due on that date (to the
extent payable in arrears) over (ii) the balance, including scheduled (in
accordance with the payment terms of the Lessor Notes) accrued interest, on the
Lessor Notes scheduled (in accordance with the payment terms of the Lessor
Notes) to be outstanding on such date of determination corresponding to the
Facility Lease.

     "ERISA" shall mean the Employee Retirement Income Security Act of 1974.

     "ERISA AFFILIATE" shall mean each person (as defined in Section 3(9) of
     ERISA) which together with the Facility Lessee or a Subsidiary of the
     Facility Lessee would be deemed to be a "single employer" (i) within the
     meaning of Section 414(b), (c), (m) and/or (o) of the Code or (ii) as a
     result of the Facility Lessee or a Subsidiary of the Facility Lessee
     being or having been a general partner of such person.

     "EVENT OF LOSS" shall mean any of the following events:

          (i)    the loss of the Facility or use thereof due to destruction or
     damage to the Facility that renders repair uneconomic or that renders the
     Facility permanently unfit for normal use or which does not satisfy the
     preconditions for repair of the Facility set forth in Section 10 of the
     Facility Lease; or

          (ii)   any damage to the Facility that results in an insurance
     settlement with respect thereto on the basis of a total loss or an agreed
     constructive or a compromised total loss of the Facility; or

          (iii)  (a) seizure, condemnation, confiscation or taking of, or
     requisition (a "Requisition") of title to the Facility by any
     Governmental Entity that shall have resulted in loss by the Owner Lessor,
     prior to the Post-FILOT Lease Conversion Date, of the Undivided Interest
     or the Ground Interest, or, from and after the Post-FILOT Lease
     Conversion Date, of title to the Undivided Interest, in each case
     following exhaustion of all permitted appeals or an election by the
     Facility Lessee in its discretion not to pursue such appeals or rights;
     provided that no such contest (or exercise) shall extend beyond the
     earlier of the date which is (x) six months after the loss of such
     leasehold interest or title, or (y) 48 months prior to the end of the
     Basic Lease Term or any Renewal Lease Term then in effect or elected by
     the Facility Lessee or (b) Requisition of use of, or leasehold interest
     represented by the Undivided Interest or the Ground Interest or, upon or
     following the Post-FILOT Lease Conversion Date, title to, the Undivided
     Interest or the Ground Interest by any Governmental Entity that shall
     have resulted in the loss of possession of the Undivided Interest or all
     or any part of the Ground Interest that is required for the use or
     operation of the Facility; provided that in any case involving
     Requisition of use of the Facility, or all or any part of the Facility
     Site that is required for the use or operation, of the Facility, but not
     of the Owner Lessor's Undivided Interest or the Ground Interest or (from
     and after the Post-FILOT Lease Conversion Date) the Facility Lessee's
     title to the Ground Interest, such event shall be an Event of Loss only if

                                      11
<PAGE>
     loss of possession continues beyond the Basic Lease Term or any Renewal
     Lease Term then in effect or elected by the Facility Lessee; or

          (iv)   if elected in writing by the Owner Participant, such election
     to be made only in circumstances where the termination of the Facility
     Lease shall remove the basis of the regulation described below, subjection
     of the Owner Participant or the Owner Lessor to any public utility
     regulation of any Governmental Entity or law which in the reasonable
     opinion of the Owner Participant is burdensome, or the subjection of the
     Owner Participant's or the Owner Lessor's interest in the Facility Lease
     to any rate of return regulation by any Governmental Entity, in either
     case by reason of the participation of the Owner Lessor, the Owner
     Participant or the OP Guarantor in the transactions contemplated by the
     Operative Documents and the FILOT Lease and not, in any event, as a result
     of (a) investments, loans or other business activities of the Owner
     Participant or any of its Affiliates in respect of equipment or facilities
     similar in nature to the Facility or any part thereof or in any other
     electrical, cogeneration or other energy or utility related equipment or
     facilities or the general business or other activities of the Owner
     Participant or any of its Affiliates or the nature of any of the
     properties or assets from time to time owned, leased, operated, managed or
     otherwise used or made available for use by the Owner Participant or any
     of its Affiliates or (b) a failure of the Owner Participant to perform
     routine, administrative or ministerial actions the performance of which
     would not subject the Owner Participant or any of its Affiliates to any
     material adverse consequence (in the reasonable opinion of such Owner
     Participant acting in good faith); provided that the Facility Lessee and
     the Owner Lessor and Owner Participant agree to cooperate and to take
     reasonable measures to alleviate the source or consequence of any
     regulation constituting an Event of Loss under this paragraph (iv), so
     long as there shall be no adverse consequences to the Owner Lessor or
     Owner Participant as a result of such cooperation or the taking of
     reasonable measures (the events and circumstances described herein this
     paragraph (iv), a "Regulatory Event of Loss"); or

          (v)    if elected by the Owner Participant, in the event that the FERC
     Owner Lessor EWG Order shall not have been obtained and become final
     within ninety (90) days of the Closing Date, such election to be
     conditioned upon receipt of a reasoned legal opinion of nationally
     recognized independent counsel (Owner Participant's outside counsel at
     Closing to be deemed to meet such qualifications) that any pending
     proceeding, if adversely determined, would reasonably be expected to have
     a material adverse effect on the Owner Participant or subject the Owner
     Participant or the Owner Lessor to regulation as a public utility company
     or a holding company under the Holding Company Act;

          (vi)   if elected by the Owner Participant, in the event that the FERC
     Order set forth in clause (v) of the definition of "FERC Orders" herein
     shall not have been obtained and become final within ninety (90) days of
     the Closing Date, such election to be conditioned upon receipt of a
     reasoned legal opinion of nationally recognized independent counsel
     (Owner Participant's outside counsel at Closing to be deemed to meet such
     qualifications) that any pending proceeding, if adversely determined,
     would reasonably be expected to have a material adverse effect on the
     Owner Participant or the Owner Lessor; or

                                      12
<PAGE>
          (vii)  the FILOT Lease shall have been cancelled or terminated or
     shall otherwise cease to be in full force and effect otherwise than by
     reason of (a) an event constituting a Lease Event of Default or (b) the
     occurrence of the Post-FILOT Lease Conversion Date.

     The date of occurrence of an Event of Loss described in clauses (i) or
     (ii) above shall be the date of the Facility Lessee's notice to the Owner
     Lessor, the Owner Participant, the Indenture Trustee and the Pass Through
     Trustees pursuant to Section 10.1 of the Facility Lease that it does not
     elect to rebuild the Facility pursuant to Section 10.3 of the Facility
     Lease but to pay Termination Value and terminate the Facility Lease
     pursuant to Section 10.2 thereof, or the date an Event of Loss is deemed
     to occur pursuant to the last sentence of Section 10.1 of the Facility
     Lease. The date of occurrence of an Event of Loss described in clause
     (iii)(a) above shall be the earlier of (A) the date which is six months
     following the loss of title, (B) the date upon which the Facility Lessee
     shall have concluded all efforts to contest such loss of title or
     exercise its rights of eminent domain, and (C) the date which is 48
     months prior to the end of the Basic Lease Term or any Renewal Lease Term
     then in effect or elected by the Facility Lessee (if an event described
     in clause (iii)(a) shall be continuing at such time). The date of
     occurrence of an Event of Loss described in clause (iii)(b) above shall
     be the date of requisition of title to the Facility Site or, in the case
     of a requisition of use of the Facility Site, the date which is the
     scheduled expiration date of the Basic Lease Term or any Renewal Lease
     Term then in effect or elected by the Facility Lessee, as the case may be
     (if an event described in clause (iii)(b) shall be continuing at such
     time). The date of occurrence of an Event of Loss described in clause
     (iv) above shall be the date on which the Facility Lessee receives the
     Owner Participant's election made in accordance with such clause (iv)
     during any period when an event is continuing which upon election by
     Owner Participant in accordance with such clause (iv) would constitute a
     Regulatory Event of Loss. The date of occurrence of an Event of Loss
     described in clause (v) above shall be the date on which the Facility
     Lessee receives the Owner Participant's election made in accordance with
     such clause (v). The date of occurrence of an Event of Loss in clause
     (vi) above shall be the date on which the Facility Lessee receives the
     Owner Participant's election made in accordance with such clause (vi).
     The date of occurrence of an Event of Loss in clause (vii) shall be ten
     (10) Business Days after the date of such termination, cancellation or
     failure to be in full force and effect.

     "EXCEPTED PAYMENTS" shall mean and include (i)(A) any right, title or
     interest to any indemnity (whether or not constituting Supplemental Rent
     and whether or not a Lease Event of Default exists) payable to either the
     Owner Lessor, the Lessor Manager, the Trust Company, or the Owner
     Participant or to their respective Indemnitees and successors and
     permitted assigns (other than the Indenture Trustee) pursuant to Section
     2.3, 9.1, 9.2, 11.1 or 11.2 of the Participation Agreement, and any
     payments under any Tax Indemnity Agreement (provided that Excepted
     Payments shall not include any Periodic Rent) or (B) any amount payable
     by the Facility Lessee to the Owner Lessor or the Owner Participant to
     reimburse any such Person for its costs and expenses in exercising its
     rights under the Operative Documents or the FILOT Lease, (ii)(A)
     insurance proceeds, if any, payable to the Owner Lessor or the Owner
     Participant under insurance separately maintained by the Owner Lessor or
     the Owner Participant

                                      13
<PAGE>
     with respect to the Facility as permitted by Section 3(b) of Schedule
     5.31 to the Participation Agreement or (B) proceeds of personal injury or
     property damage liability insurance maintained under any Operative
     Document or the FILOT Lease for the benefit of the Owner Lessor or the
     Owner Participant, (iii) any amount payable to the Owner Participant as
     the purchase price of the Owner Participant's right and interest in the
     Member Interest, (iv) all other fees expressly payable to the Owner
     Participant under the Operative Documents, (v) any payments in respect of
     interest, or any payments made on an After-Tax Basis, to the extent
     attributable to payments referred to in clause (i) through (vi) above;
     (vii) any amounts paid to the Owner Lessor as reimbursement for amounts
     expended pursuant to Section 20 of the Facility Lease; (viii) proceeds of
     the items referred to in clause (i) through (vii) above; and (ix) any
     rights to demand, collect, sue for, or otherwise receive and enforce
     payment of the foregoing amounts, including under the Calpine Guaranty,
     but without limiting clause (v) of this definition above.

     "EXCESS AMOUNT" shall have the meaning specified in Section 14.3 of the
     Participation Agreement, and, with respect to the Collateral Trust
     Indenture, the meaning specified in Section 9.13 thereof.

     "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
     amended.

     "EXCLUDED TAXES" shall have the meaning specified in Section 9.2(b) of
     the Participation Agreement.

     "EXEMPT WHOLESALE GENERATOR" or "EWG" shall mean an entity which is an
     "exempt wholesale generator" as defined in Section 32 of PUHCA.

     "FACILITY" shall mean a 850 MW nameplate capacity gas-fired simple cycle
     merchant power plant located in Gaffney, South Carolina and more fully
     described in Exhibit A to the Participation Agreement. The Facility does
     not include the Facility Site.

     "FACILITY LEASE" shall mean, the Facility Lease Agreement (BR-4), dated
     as of October 18, 2001, between the Owner Lessor and the Facility Lessee,
     substantially in the form of Exhibit C to the Participation Agreement.

     "FACILITY LEASE TERM" with respect to the Facility Lease, shall mean the
     term of the Facility Lease, including the Basic Lease Term and all
     Renewal Lease Terms.

     "FACILITY LESSEE" shall have the meaning set forth in the recitals to
     the Participation Agreement.

     "FACILITY PURCHASE OPTION" shall mean the right of the Owner Lessor,
     pursuant to Section 10.02 of the FILOT Lease, to acquire an undivided fee
     interest (to the extent of the Owner Lessor's Percentage) in all of or a
     portion of the Project, other than the portion thereof constituting the
     Land.

     "FACILITY SITE" shall have the meaning set forth in the recitals to the
     Facility Site Lease.

                                      14
<PAGE>
     "FACILITY SITE LEASE" shall mean the Facility Site Lease (BR-4), dated
     as of October 18, 2001, between Facility Lessee and the Owner Lessor,
     substantially in the form of Exhibit D to the Participation Agreement,
     pursuant to which Owner Lessor will lease the Ground Interest to the
     Facility Lessee.

     "FACILITY SITE LESSEE" shall mean, with respect to the Facility Site
     Lease, Broad River Energy LLC, and with respect to the Springing Facility
     Site Lease, shall mean Owner Lessor.

     "FACILITY SITE LESSEE EVENT OF DEFAULT" shall have the meaning set forth
     in Section 13.1 of the Facility Site Lease.

     "FACILITY SITE LESSOR" shall mean, with respect to the Facility Site
     Lease, Owner Lessor, and with respect to the Springing Facility Site
     Lease, shall mean Broad River Energy LLC.

     "FACILITY SITE RENT" shall have the meaning set forth in Article IV of
     the Facility Site Lease and Section 4.1 of the Springing Facility Site
     Lease.

     "FAIR MARKET RENTAL VALUE" or "FAIR MARKET SALES VALUE" shall mean with
     respect to any property or service as of any date, the cash rent or cash
     price obtainable in an arm's-length lease, sale or supply, respectively,
     between an informed and willing lessee or purchaser under no compulsion
     to lease or purchase and an informed and willing lessor or seller or
     supplier under no compulsion to lease or sell or supply the property or
     service in question, and shall, in the case of the Undivided Interest or
     the Owner Lessor's Interest, be determined (except pursuant to Section 17
     of the Facility Lease or as otherwise provided below or in the Operative
     Documents) on the basis and assumption that (i) the conditions contained
     in Sections 7 and 8 of the Facility Lease shall have been complied with
     in all respects, (ii) the lessee or buyer shall have rights in, or an
     assignment of, the Operative Documents to which the Owner Lessor is a
     party and the FILOT Lease and the obligations relating thereto, (iii) the
     Undivided Interest or the Owner Lessor's Interest, as the case may be, is
     free and clear of all Liens (other than Owner Lessor's Liens, Owner
     Participant's Liens and Indenture Trustee Liens), (iv) taking into
     account the remaining term of the Facility Site Lease, and (v) in the
     case the Fair Market Rental Value, taking into account the terms of the
     Facility Lease and the other Operative Documents. If the Fair Market
     Sales Value of the Owner Lessor's Interest is to be determined during the
     continuance of a Lease Event of Default or in connection with the
     exercise of remedies by the Owner Lessor pursuant to Section 17 of the
     Facility Lease, such value shall be determined by an Independent
     Appraiser appointed solely by the Owner Lessor on an "as-is", "where-is"
     and "with all faults" basis and shall take into account all Liens (other
     than Owner Lessor's Liens, Owner Participant's Liens and Indenture
     Trustee Liens); provided, however, in any such case where the Owner
     Lessor shall be unable to obtain constructive possession sufficient to
     realize the economic benefit of the Owner Lessor's Interest, Fair Market
     Sales Value of the Owner Lessor's Interest shall be deemed equal to $0
     (zero). If in any case other than in the preceding sentence the parties
     are unable to agree upon a Fair Market Sales Value of the Owner Lessor's
     Interest within 30 days after a request therefor has been made, the Fair
     Market Sales Value of the Owner Lessor's

                                      15
<PAGE>
     Interest shall be determined by appraisal pursuant to the Appraisal
     Procedures. Any fair market value determination of a Severable
     Improvement shall take into consideration any liens or encumbrances to
     which the Severable Improvement being appraised is subject and which are
     being assumed by the transferee.

     "FACILITY SITE SUBLEASE EVENT OF DEFAULT" shall have the meaning set
     forth in Section 13.1 of the Springing Facility Site Sublease.

     "FASB 13" shall mean the Statement of the Financial Accounting Standards
     Board No. 13, as amended and interpreted from time to time.

     "FASB 98" shall mean the Statement of the Financial Accounting Standards
     Board No. 98, as amended and interpreted from time to time.

     "FEDERAL POWER ACT" or "FPA" shall mean the Federal Power Act, as
     amended.

     "FERC" shall mean the Federal Energy Regulatory Commission of the United
     States or any successor or predecessor agency thereto.

     "FERC ORDERS" shall mean any or all of the following of the FERC Orders
     required pursuant to Section 4.8 of the Participation Agreement:

          (i)   a determination by FERC of EWG status of the Facility Lessee
     and Owner Lessor and the Owner Participant;

          (ii)  an approval from FERC for the Facility Lessee to sell power at
     market-based rates under Section 205 of the FPA effective on or before
     the Closing Date;

          (iii) either an approval by FERC of the issuance of securities and the
     assumption of obligations necessary to effect the sale/leaseback pursuant
     to Section 204 of the Federal Power Act or blanket authorization to issue
     securities and assume obligations under such Section;

          (iv)   Intentionally Omitted; and

          (v)   an approval from FERC under Section 203 of the Federal Power Act
     for the transfer of jurisidictional facilities in the sale/leaseback
     contemplated by the Operative Documents.

     "FERC OWNER LESSOR EWG ORDER" shall mean the orders issued by the FERC
     determining that the Owner Lessor is an EWG.

     "FILOT LEASE" shall mean the Lease Agreement dated March 1, 2000 by and
     between the County and Facility Lessee, together with the Inducement
     Agreement.

     "FINAL DETERMINATION" shall have the meaning specified in Section 9 of
     the Tax Indemnity Agreement.

                                      16
<PAGE>
     "FIRST RENEWAL LEASE TERM" with respect to the Facility Lease, shall
     have the meaning specified in Section 15.1(a) of the Facility Lease.

     "FIRST WINTERGREEN RENEWAL LEASE OPTION" with respect to the Facility
     Site Lease, shall have the meaning specified in Section 2.2(a)(i) of the
     Springing Facility Site Lease.

     "FMV RENEWAL LEASE OPTION" with respect to the Initial Term, shall have
     the meaning set forth in Section 2.2(a)(iii) of the Springing Facility
     Site Lease.

     "FMV RENEWAL LEASE TERM" with respect to the Facility Lease, shall have
     the meaning specified in Section 15.2 of the Facility Lease.

     "FORECLOSURE TRANSFER" with respect to the Springing Facility Site
     Lease, shall have the meaning set forth in Section 19.3 of the Springing
     Facility Site Lease.

     "GAAP" shall mean generally accepted accounting principles.

     "GOVERNMENTAL ACTIONS" shall mean all authorizations, consents,
     approvals, waivers, exceptions, variances, filings, permits, orders,
     licenses, exemptions and declarations of or with any Governmental Entity
     and shall include those citing, environmental and operating permits and
     licenses (including the Applicable Permits) that are required for the use
     and operation of the Facility, the Undivided Interest (if any), the
     Ground Interest and the Facility Site.

     "GOVERNMENTAL ENTITY" shall mean and include any international,
     national, Native American, provincial, regional, state, municipal or
     local government, any political subdivision of any thereof or any board,
     commission, department, division, organ, instrumentality, court or agency
     of any thereof.

     "GROUND INTEREST" shall mean, prior to the Post-FILOT Lease Conversion
     Date, the Owner Lessor's 25% undivided leasehold interest in the Facility
     Site, and upon and after the Post-FILOT Lease Conversion Date, the Owner
     Lessor's 25% undivided leasehold interest in the Facility Site.

     "GUARANTOR" shall mean Calpine Corporation.

     "GUARANTOR ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean an assignment
     and assumption agreement in form and substance substantially in the form
     of Exhibit L to the Participation Agreement.

     "HAZARDOUS SUBSTANCE" shall mean any pollutant, contaminant, hazardous
     substance, hazardous waste, toxic substance, petroleum or
     petroleum-derived substance, waste, or additive, asbestos, PCBs,
     radioactive material, or other compound, element, material or substance
     in any form whatsoever (including products) regulated, restricted or
     controlled by or under any Environmental Law.

     "HOLDING COMPANY ACT" shall mean the Public Utility Holding Company Act
     of 1935, as amended.

                                      17
<PAGE>
     "IMPROVEMENT" shall mean an addition, betterment or enlargement of the
     Facility. Improvements shall include any Required Improvements or
     Optional Improvements, but do not include Components.

     "INCOME TAXES" shall have the meaning set forth in Section 9.2(b)(i) of
     the Participation Agreement.

     "INCUR" means, as applied to any obligation, to create, incur, issue,
     assume, guarantee or in any other manner become liable with respect to,
     contingently or otherwise, such obligation, and "Incurred," "Incurrence"
     and "Incurring" shall each have a correlative meaning; provided, however,
     that any amendment, modification or waiver of any provision of any
     document pursuant to which Indebtedness was previously Incurred shall not
     be deemed to be an Incurrence of Indebtedness as long as (i) such
     amendment, modification or waiver does not (A) increase the principal or
     premium thereof or interest rate thereon, (B) change to an earlier date
     the Stated Maturity thereof or the date of any scheduled or required
     principal payment thereon or the time or circumstances under which such
     Indebtedness may or shall be redeemed, (C) if such Indebtedness is
     contractually subordinated in right of payment to the Obligations, modify
     or affect, in any manner adverse to the Beneficiaries, such subordination
     or (D) if the Guarantor is the obligor thereon, provide that a Restricted
     Subsidiary shall be an obligor and (ii) such Indebtedness would, after
     giving effect to such amendment, modification or waiver as if it were an
     Incurrence, comply with clause (i) of the first proviso to the definition
     of "Refinancing Indebtedness."

     "INDEBTEDNESS" of any Person shall mean (i) all indebtedness of such
     Person for borrowed money, (ii) all obligations of such Person evidenced
     by bonds, debentures, notes or other similar instruments, (iii) all
     obligations of such Person to pay the deferred purchase price of property
     or services, (iv) all indebtedness created or arising under any
     conditional sale or other title retention agreement with respect to
     property acquired by such Person (even though the rights and remedies of
     the seller or lender under such agreement in the event of default are
     limited to repossession or sale of such property), (v) all Lease
     Obligations of such Person (including payments of Termination Value and
     any other amounts owed pursuant to the Operative Documents), (vi) all
     obligations, contingent or otherwise, of such Person under acceptance,
     letter of credit or similar facilities, (vii) all unconditional
     obligations of such Person to purchase, redeem, retire, defease or
     otherwise acquire for value any capital stock or other equity interests
     of such Person or any warrants, rights or options to acquire such capital
     stock or other equity interests, (viii) all net obligations under
     "swaps", "caps", "floors", "collars", or other interest rate hedging
     contracts or similar arrangements, (ix) all Indebtedness of any other
     Person of the type referred to in clauses (i) through (viii), guaranteed
     by such Person or for which such Person shall otherwise (including
     pursuant to any keepwell, makewell or similar arrangement) become
     directly or indirectly liable, and (x) all Indebtedness of the type
     referred to in clauses (i) through (ix) above secured by (or for which
     the holder of such Indebtedness has an existing right, contingent or
     otherwise, to be secured by) any Lien on property (including accounts and
     contracts rights) owned by such Person, even though such Person has not
     assumed or become liable for the payment of such

                                      18
<PAGE>
     Indebtedness, the amount of such obligation being deemed to be the lesser
     of the value of such property or the amount of the obligation so secured.

     "INDEMNITEE" shall have the meaning specified in Section 9.1(a) of the
     Participation Agreement.

     "INDEMNITOR" shall have the meaning set forth in Section 13.3 of the
     Springing Facility Site Lease.

     "INDENTURE BANKRUPTCY DEFAULT" shall mean any event or occurrence,
     which, with the passage of time or the giving of notice or both, would
     become an Lease Indenture Event of Default under Section 4.2(e) or (f) of
     the Collateral Trust Indenture.

     "INDENTURE DEFAULT" shall mean any event or occurrence, which, with the
     passage of time or the giving of notice or both, would become an Lease
     Indenture Event of Default.

     "INDENTURE ESTATE" shall have the meaning specified in the Granting
     Clause of the Collateral Trust Indenture.

     "INDENTURE TRUSTEE" shall mean State Street Bank and Trust Company of
     Connecticut, National Association, not in its individual capacity, except
     as expressly provided herein, but solely as Indenture Trustee under the
     Operative Documents.

     "INDENTURE TRUSTEE OFFICE" shall mean the office to be used for notices
     to the Indenture Trustee from time to time pursuant to Section 9.5 of the
     Collateral Trust Indenture.

     "INDENTURE TRUSTEE'S ACCOUNT" shall mean the account specified with
     respect thereto on Schedule 1-B to the Participation Agreement or such
     other account of the Indenture Trustee, as the Indenture Trustee may from
     time to time specify in a notice to the other parties to the
     Participation Agreement.

     "INDENTURE TRUSTEE'S LIENS" shall mean any Lien on the Lessor Estate,
     the Facility, the Facility Site or any part thereof or any interest
     therein arising as a result of (i) Taxes against or affecting the Lease
     Indenture Company or the Indenture Trustee, or any Affiliate thereof that
     are not related to, or that are in violation of, any Operative Document
     or the FILOT Lease or the transactions contemplated thereby, (ii) Claims
     against or any act or omission of the Lease Indenture Company or the
     Indenture Trustee, or Affiliate thereof that is not related to, or that
     is in violation of, any of such Person's representations, warranties,
     covenants or agreements in an Operative Document or the transactions
     contemplated thereby or that is in breach of any covenant or agreement of
     the Lease Indenture Company or the Indenture Trustee specified therein,
     (iii) Taxes imposed upon the Lease Indenture Company or the Indenture
     Trustee, or any Affiliate thereof that are not indemnified against by the
     Facility Lessee pursuant to any Operative Document or (iv) Claims against
     or affecting the Lease Indenture Company or the Indenture Trustee, or any
     Affiliate thereof arising out of the voluntary or involuntary transfer by
     the Lease Indenture Company or the Indenture Trustee of any portion of
     the interest of the Lease Indenture Company or the Indenture Trustee in
     the Lessor Estate, other than pursuant to the Operative Documents.

                                      19
<PAGE>
     "INDEPENDENT APPRAISER" shall mean a disinterested, licensed industrial
     property appraiser who is a member of the Appraisal Institute having
     experience in the business of evaluating facilities similar to the
     Facility.

     "INDUCEMENT AGREEMENT" shall mean the Inducement Agreement and Millage
     Agreement dated June 15, 1999, between the County and the Facility Lessee.

     "INITIAL LESSOR NOTES" shall have the meaning set forth in Section 2.2
     of the Collateral Trust Indenture.

     "INITIAL PURCHASERS" shall mean CSFB, Banc of America Securities LLC,
     Scotia Capital (USA) Inc. and TD Securities (USA) Inc.

     "INITIAL SUBLEASE TERM" with respect to the Springing Facility Site
     Sublease, shall have the meaning set forth in Section 2.1(a) of the
     Springing Facility Site Sublease.

     "INITIAL TERM" with respect to the Springing Facility Site Lease, shall
     have the meaning specified in Section 2.1(a) of the Springing Facility
     Site Lease.

     "INSURANCE CONSULTANT" shall mean Marsh USA, Inc.

     "INVESTMENT BANKER" shall have the meaning set forth in Section 2.10(d)
     of the Collateral Trust Indenture.

     "INVESTMENT COMPANY ACT" shall mean the Investment Company Act of 1940.

     "INVESTMENT GRADE" with respect to a Rating Agency, shall mean, with
     respect to S&P, BBB- or higher, and with respect to Moody's, Baa3 or
     higher, or, if after the Closing Date a different system of ratings is
     established, the term shall mean a rating in one of such Rating Agency's
     generic rating categories that is comparable to such ratings.

     "IRS" shall mean the Internal Revenue Service of the United States
     Department of Treasury or any successor agency.

     "LAND" shall have the meaning thereof set forth in the FILOT Lease.

     "LAND PURCHASE OPTION" shall mean the right of the Owner Lessor,
     pursuant to Section 10.02 of the FILOT Lease, to acquire an undivided fee
     interest (to the extent of the Owner Lessor's Percentage) in the Land.

     "L/C BANK" shall mean the Acceptable Bank providing a letter of credit
     pursuant to Section 5.3 of the Facility Lease.

     "LEASE DEBT" shall mean the debt evidenced by the Lessor Notes.

     "LEASE DEBT RATE" shall mean the applicable interest rate accruing on
     Lessor Notes.

     "LEASE DEFAULT" shall mean any event or occurrence, which, with the
     passage of time or the giving of notice or both, would become a Lease
     Event of Default.

                                      20
<PAGE>
     "LEASE EVENT OF DEFAULT" with respect to the Facility Lease, shall have
     the meaning specified in Section 16 of the Facility Lease.

     "LEASE INDENTURE COMPANY" shall mean State Street Bank and Trust Company
     of Connecticut, National Association, in its individual capacity under
     the Operative Documents.

     "LEASE INDENTURE EVENT OF DEFAULT" shall have the meaning set forth in
     Section 4.2 of the Collateral Trust Indenture.

     "LEASE OBLIGATIONS" shall mean, without duplication, (i) indebtedness
     represented by obligations under a lease that is required to be
     capitalized for financial reporting purposes, (ii) with respect to
     operating leases of electric generating facilities, the termination value
     or similar amount payable by the lessee under such lease and (iii) the
     principal amount of financial obligations under any synthetic lease, tax
     retention operating lease, off-balance sheet loan or similar off-balance
     sheet financing product where such transaction is considered borrowed
     money indebtedness of the lessee for tax purposes but is classified as an
     operating lease under GAAP.

     "LEASEHOLD LIEN" with respect to the Facility Site Lease, shall have the
     meaning set forth in Section 15.3 of the Facility Site Lease and with
     respect to the Springing Facility Site Lease or Springing Facility Site
     Sublease, shall have the meaning set forth in Section 16.4 of the
     Springing Facility Site Lease or Section 15.3 of the Springing Facility
     Site Sublease.

     "LEASEHOLD MORTGAGEE" with respect to the Facility Site Lease, shall
     have the meaning set forth in Section 15.3 of the Facility Site Lease and
     with respect to the Springing Facility Site Lease or Springing Facility
     Site Sublease, shall have the meaning set forth in Section 16.4 of the
     Springing Facility Site Lease or Section 15.3 of the Springing Facility
     Site Sublease.

     "LESSEE 467 LOAN INTEREST" with respect to the Facility Lease, shall
     have the meaning specified in Section 3.2(d) of the Facility Lease.

     "LESSEE 467 LOAN PRINCIPAL BALANCE" with respect to the Facility Lease,
     shall have the meaning set forth in Section 3.2(d) of the Facility Lease.

     "LESSOR 467 LOAN INTEREST" with respect to the Facility Lease, shall
     have the meaning specified in Section 3.2(d) of the Facility Lease.

     "LESSOR 467 LOAN PRINCIPAL BALANCE" with respect to the Facility Lease,
     shall have the meaning set forth in Section 3.2(d) of the Facility Lease.

     "LESSOR ESTATE" shall mean all the estate, right, title and interest of
     the Owner Lessor in, to and under the Undivided Interest, the Ground
     Interest and the Operative Documents, including all funds advanced to the
     Owner Lessor by the Owner Participant, all installments and other
     payments of Periodic Rent, Supplemental Rent or Termination Value under
     the Facility Lease, condemnation awards, purchase price, sale proceeds,

                                      21
<PAGE>
     insurance proceeds and all other proceeds, rights and interests of any
     kind for or with respect to the estate, right, title and interest of the
     Owner Lessor in, to and under the Undivided Interest, the Ground Interest
     and the Operative Documents and the FILOT Lease and any of the foregoing,
     but shall not include Excepted Payments.

     "LESSOR MANAGER" shall mean Wells Fargo Bank Northwest, National
     Association not in its individual capacity, but solely as an independent
     manager under the LLC Agreement and each other Person that may from time
     to time be acting as Independent Manager in accordance with the
     provisions of the LLC Agreement.

     "LESSOR NOTE(S)" shall mean, individually or collectively as the context
     may require, the Initial Lessor Notes and Additional Lessor Notes, each
     issued pursuant to the Collateral Trust Indenture.

     "LESSOR PUT RENEWAL LEASE TERM" with respect to the Facility Lease,
     shall have the meaning specified in Section 15.3 of the Facility Lease.

     "LIEN" shall mean any mortgage, security deed, security title, pledge,
     lien, charge, encumbrance, lease, and security interest or title
     retention arrangement.

     "LLC AGREEMENT" shall mean the Amended and Restated Limited Liability
     Company Agreement, dated as of October 1, 2001, between the Owner
     Participant and the Lessor Manager, pursuant to which the Owner Lessor
     shall be governed.

     "MAJORITY IN INTEREST OF NOTEHOLDERS" as of any date of determination,
     shall mean Noteholders holding in aggregate more than 50% of the total
     outstanding principal amount of the Lessor Notes; provided, however, that
     any Note held by the Facility Lessee, the Guarantor or any Affiliate of
     either such party shall not be considered outstanding for purposes of
     this definition.

     "MAKE-WHOLE AMOUNT" shall mean, with respect to any Lessor Note subject
     to redemption pursuant to the Lease Indenture, an amount equal to the
     Discounted Present Value calculated for such Lessor Note being redeemed
     less the unpaid principal amount of such Lessor Note; provided that the
     Make Whole Amount shall not be less than zero. For purposes of this
     definition, the "Discounted Present Value" of any Lessor Note subject to
     redemption pursuant to the Lease Indenture shall be equal to the
     discounted present value, as of the date of redemption, of all principal
     and interest payments scheduled to become due in respect of such Lessor
     Note, after the date of such redemption calculated using a discount rate
     equal to the sum of (i) the yield to maturity on the U.S. Treasury
     security having an average life equal to the remaining average life of
     such Lessor Note and trading in the secondary market at the price closest
     to par and (ii) 50 basis points; provided, however, that if there is no
     U.S. Treasury security having an average life equal to the remaining
     average life of such Lessor Note, such discount rate shall be calculated
     using a yield to maturity interpolated or extrapolated on a straight-line
     basis (rounding to the nearest calendar month, if necessary) from the
     yields to maturity for two U.S. Treasury securities having average lives
     most closely

                                      22
<PAGE>
     corresponding to the remaining life of such Lessor Note and
     trading in the secondary market at the price closest to par.

     "MANAGER" shall mean CSFB.

     "MATERIAL ADVERSE CHANGE" and "MATERIAL ADVERSE EFFECT" shall mean a
     material adverse effect on (a) the economic prospects, operations,
     assets, financial position, results of operation or business of the
     Guarantor, including a material adverse effect on (i) the Facility, the
     Undivided Interest, the Facility Site or the Ground Interest which
     adversely affects the ability of the Guarantor to perform its obligations
     under the Operative Documents or (ii) the validity or enforceability of
     the Operative Documents, (b) the Indenture Estate or the Lessor Estate,
     the security interests in the Lessor Estate, or (c) with respect to the
     Owner Participant's (but not the Certificateholders') interest in the
     Undivided Interest, the residual value or remaining useful life of the
     Facility.

     "MEMBER INTEREST" shall mean the interest of the Owner Participant in
     the Owner Lessor.

     "MEMORANDUM OF FACILITY SITE LEASE" shall mean the Memorandum of
     Facility Site Lease (BR-4), dated as of the Closing Date, between the
     Owner Lessor, as landlord, and the Facility Lessee, as tenant, and filed
     with the Office of the Cherokee County Clerk of Court.

     "MEMORANDUM OF LEASE" shall mean the Memorandum of Facility Lease
     (BR-4), dated as of the Closing Date, between the Owner Lessor and the
     Facility Lessee filed with the Office of the Cherokee County Clerk of
     Court.

     "MEMORANDUM OF SPRINGING FACILITY SITE LEASE" shall mean the Memorandum
     of Springing Facility Site Lease (BR-4), dated as of the Closing Date,
     between the Facility Lessee, as landlord, and the Owner Lessor, as
     tenant, and filed with the Office of the Cherokee County Clerk of Court.

     "MEMORANDUM OF SPRINGING FACILITY SITE SUBLEASE" shall mean the
     Memorandum of Springing Facility Site Sublease (BR-4), dated as of the
     Closing Date, between the Owner Lessor, as sublandlord, and the Facility
     Lessee, as subtenant, and filed with the Office of the Cherokee County
     Clerk of Court.

     "MOODY'S" shall mean Moody's Investors Service, Inc. and any successor
     thereto.

     "MULTIEMPLOYER PLAN" shall mean any Plan that is a multiemployer plan
     (as defined in Section 4001(a)(3) of ERISA).

     "NOTE REGISTER" shall have the meaning specified in Section 2.8 of the
     Collateral Trust Indenture.

     "NOTEHOLDER(S)" shall mean any holder of record (as reflected on the
     Note Register) from time to time of a Lessor Note outstanding.

                                      23
<PAGE>
     "NOTICE PERIOD" shall have the meaning set forth in Section 7.6 of the
     Participation Agreement.

     "OBLIGATIONS" shall have the meaning set forth in Section 2.2 of the
     Calpine Guaranty.

     "OBSOLESCENCE TERMINATION DATE" shall have the meaning specified in
     Section 14.1 of the Facility Lease.

     "OFFERING CIRCULAR" shall mean the Offering Circular, dated October 11,
     2001, with respect to the Certificates.

     "OFFICER" shall mean, solely with respect to the Guarantor, the
     Chairman, the President, any Vice President, the Chief Operating Officer,
     the Chief Financial Officer, the Treasurer, the Secretary, any Assistant
     Treasurer, any Assistant Secretary or the Controller or Principal
     Accounting Officer of the Guarantor.

     "OFFICER'S CERTIFICATE" shall mean with respect to any Person, a
     certificate signed (i) in the case of a corporation, by the Chairman of
     the Board, the President, or a Vice President of such Person or any
     Person authorized by or pursuant to the organizational documents, the
     by-laws or any resolution of the Board of Directors or Executive
     Committee of such Person (whether general or specific) to execute,
     deliver and take actions on behalf of such Person in respect of any of
     the Operative Documents, (ii) in the case of a partnership, by the
     Chairman of the Board of Directors, the President or any Vice President,
     the Treasurer or an Assistant Treasurer of a corporate general partner
     and (iii) in the case of an Indenture Trustee, a certificate signed by a
     Responsible Officer of such Indenture Trustee.

     "OFFICIAL RECORDS" shall have the meaning specified in the recitals to
     the Facility Site Lease.

     "OP ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean an assignment and
     assumption agreement in form and substance substantially in the form of
     Exhibit J to the Participation Agreement.

     "OP GUARANTOR" shall mean Newcourt Credit Group USA Inc., or any Person
     that shall guaranty the obligations of a Transferor under the Operative
     Documents in accordance with Section 7.1 of the Participation Agreement.

     "OP LLC AGREEMENT" shall mean the Amended and Restated Limited Liability
     Company Agreement, dated as of October 1, 2001, between Newcourt Capital
     USA Inc. and the Lessor Manager, pursuant to which the Owner Participant
     shall be governed.

     "OP PARENT GUARANTY" shall mean, as applicable, (i) that certain
     guaranty of Newcourt Credit Group USA Inc., dated as of the Closing Date
     in favor of the Facility Lessee, the Owner Lessor, the Lessor Manager,
     the Trust Company, the Indenture Trustee, the Pass Through Trustees and
     the Certificateholders, or (ii) any other guaranty agreement provided by
     an OP Guarantor in form and substance substantially in the form of
     Exhibit G to the Participation Agreement.

                                      24
<PAGE>
     "OPERATIVE DOCUMENTS" shall mean the Participation Agreement, the
     Assignment Agreement, the Facility Lease, the Certificates, the Facility
     Site Lease, the Springing Facility Site Lease, the Springing Facility
     Site Sublease, the Collateral Trust Indenture, the Lessor Notes, the Pass
     Through Trust Agreements, the LLC Agreement, the Tax Indemnity Agreement,
     the Tri-Party Agreement, the Calpine Guaranty, the OP Parent Guaranty (if
     any), the Certificate Purchase Agreement and the Ownership and Operation
     Agreement.

     "OPERATOR" shall mean Calpine Northbrook Services, LLC or any
     replacement Operator appointed pursuant to the Operative Documents.

     "OPINION OF COUNSEL" shall mean, with respect to any Calpine Party, a
     written opinion (i) from Ronald W. Fischer or any other internal counsel
     of Calpine, as to matters contained in such opinions delivered at
     Closing, and as to all other matters, Thelen Reid & Priest LLP and/or
     Davis Wright & Tremaine LLP, or any other outside legal counsel
     reasonably acceptable to the Owner Participant, (ii) in form and
     substance (with respect to qualifications, exception, assumption and the
     like) substantially equivalent to the legal opinions delivered at
     Closing, with any material modification or supplements thereto to be
     reasonably acceptable to the Owner Participant, or in any such other form
     as may be reasonably acceptable to the Owner Participant, and (iii) the
     scope of which shall cover due authorization, execution, delivery and
     enforceability of the applicable agreement(s), and exemption from
     regulation, in each case, substantially in the form set forth in the
     opinions delivered at Closing with any material modifications thereto to
     be reasonably acceptable to the Owner Participant.

     "OPTIONAL IMPROVEMENT" with respect to the Facility Lease, shall have
     the meaning specified in Section 8.2 of the Facility Lease.

     "ORGANIC DOCUMENT" shall mean, with respect to any Person that is a
     corporation, its certificate of incorporation, its by-laws and all
     shareholder agreements, voting trusts and similar arrangements applicable
     to any of its authorized shares of capital stock; with respect to any
     Person that is a limited partnership, its certificate of limited
     partnership and partnership agreement; with respect to any Person that is
     a limited liability company, its certificate of formation and its limited
     liability company agreement, in each case, as from time to time amended,
     supplemented, amended and restated, or otherwise modified and in effect
     from time to time; and with respect to any Person that is a business
     trust, its certificate of business trust and its trust agreement, in each
     case, as from time to time amended, supplemented, amended and restated,
     or otherwise modified and in effect from time to time.

     "OTHER BROAD RIVER ASSIGNMENT AGREEMENTS" shall mean each of the
     assignment agreements executed and delivered pursuant to the Other Broad
     River Participation Agreements.

     "OTHER BROAD RIVER CALPINE GUARANTIES" shall mean the other Calpine
     guaranty and payment agreements executed and delivered by Calpine
     pursuant to the Other Broad River Participation Agreements.

                                      25
<PAGE>
     "OTHER BROAD RIVER COLLATERAL TRUST INDENTURES" shall mean each of the
     collateral trust indentures executed and delivered pursuant to the Other
     Broad River Participation Agreements.

     "OTHER BROAD RIVER FACILITY LEASES" shall mean the other Broad River
     facility lease agreements, dated as of October 18, 2001, by and between
     the Other Broad River Owner Lessors and the Facility Lessee, pursuant to
     which the Other Broad River Owner Lessors will lease the Other South
     Point Undivided Interests to the Facility Lessee.

     "OTHER BROAD RIVER FACILITY SITE LEASES" shall mean the other facility
     site leases, dated as of October 18, 2001, by and between the Other Broad
     River Owner Lessors and the Facility Lessee pursuant to which the Other
     Broad River Owner Lessors will sublease the Other Broad River Ground
     Interests to the Facility Lessee.

     "OTHER BROAD RIVER GROUND INTERESTS" shall mean the undivided leasehold
     interests in the Facility Site not conveyed to the Owner Lessor under the
     Facility Site Lease.

     "OTHER BROAD RIVER INDENTURE TRUSTEES" shall mean each of the indenture
     trustees relating to the Other Broad River Collateral Trust Indentures.

     "OTHER BROAD RIVER LEASE TRANSACTIONS" shall mean the transactions
     involving the assignment and transfer of the Other Broad River Undivided
     Interests and the Other Broad River Ground Interests to the Other Broad
     River Owner Lessors, and the lease by the Other Broad River Owner Lessors
     of the Other Broad River Undivided Interests and the Other Broad River
     Ground Interests to the Facility Lessee on substantially the same terms
     and conditions as under, and dated the same date as, the Overall
     Transaction.

     "OTHER BROAD RIVER LESSOR MANAGERS" shall mean each of the lessor
     managers acting on behalf of the Other Broad River Owner Lessors pursuant
     to the Other Broad River Operative Documents.

     "OTHER BROAD RIVER OWNER LESSORS" shall mean Broad River OL-1, LLC,
     Broad River OL-2, LLC and Broad River OL-3, LLC.

     "OTHER BROAD RIVER OWNER PARTICIPANTS" shall mean SBR OP-1, LLC, SBR
     OP-2, LLC and SBR OP-3, LLC.

     "OTHER BROAD RIVER OPERATIVE DOCUMENTS" shall mean the other "Operative
     Documents" for each of the Other Broad River Lease Transactions.

     "OTHER BROAD RIVER PARTICIPATION AGREEMENTS" shall mean a collective
     reference to each of the other three separate participation agreements
     entered into by the Facility Lessee, the applicable Other Broad River
     Owner Lessor, the Other Broad River Lessor Manager, Other Broad River
     Owner Participant, Other Broad River Indenture Trustee, Pass Through
     Trustees and Calpine and designated Participation Agreement (BR-1),
     Participation Agreement (BR-2) and Participation Agreement (BR-3), each
     dated as of the Closing Date, pursuant to which, among other things, the
     Facility Lessee has agreed to (a) assign and transfer to the applicable
     Other Broad River Owner Lessors certain

                                      26
<PAGE>
     undivided leasehold interests in the Facility and the Facility Site, and
     (b) lease from the applicable Other Broad River Owner Lessors such
     undivided leasehold interest in the Facility and the Facility Site
     pursuant to the Other Broad River Facility Leases and the Other Broad
     River Facility Site Leases, respectively.

     "OTHER BROAD RIVER UNDIVIDED INTERESTS" shall mean the undivided
     leasehold interest (or, upon or following the Post-FILOT Lease Conversion
     Date, the fee interest) in the Facility not conveyed to the Owner Lessor
     under the Assignment Agreement (or, in the case of the fee interest,
     pursuant to the transactions contemplated by Article XIV of the
     Participation Agreement and the Other Broad River Participation
     Agreement).

     "OTHER CALPINE GUARANTIES" shall mean collectively, the Other Broad
     River Calpine Guaranties, the South Point Calpine Guaranties and the
     RockGen Calpine Guaranties.

     "OTHER FACILITY LEASES" shall mean collectively, the Other Broad River
     Facility Leases, the South Point Facility Leases and the RockGen Facility
     Leases.

     "OTHER OWNER LESSORS" shall mean collectively, the Other Broad River
     Owner Lessors, the South Point Owner Lessors and the RockGen Owner
     Lessors.

     "OVERALL TRANSACTION" shall mean all of the transactions contemplated by
     the Operative Documents and the FILOT Lease (giving effect to its
     assignment to the Owner Lessor pursuant to the Assignment Agreement).

     "OVERDUE RATE" shall mean a rate per annum equal to the prime commercial
     lending rate of the Chase Manhattan Bank (as publicly announced to be
     effect from time to time, such rate to be adjusted automatically, without
     notice, on the effective date of any change in such rate) plus 1%.

     "OWNER LESSOR" shall mean Broad River OL-4, LLC, a Delaware limited
     liability company created for the benefit of the Owner Participant.

     "OWNER LESSOR'S ACCOUNT" shall mean Wells Fargo Bank Northwest, National
     Association, Salt Lake City, Utah, ABA # 121-000-248, Account: Corporate
     Trust Services, Account # 051-0922115, Credit to: Broad River OL-4, LLC.

     "OWNER LESSOR'S INTEREST" shall mean the Owner Lessor's right, title and
     interest in and to the Undivided Interest and the Ground Interest.

     "OWNER LESSOR'S LIEN(S)" individually or collectively as the context may
     require, shall mean any Lien on the Lessor Estate, the Facility Sites, or
     any part of any thereof or interest therein arising as a result of (i)
     Taxes against or affecting the Owner Lessor, the Trust Company or the
     Lessor Manager or any Affiliate thereof that are not related to, or that
     are in violation of, any Operative Document or the FILOT Lease (giving
     effect to its assignment to the Owner Lessor pursuant to the Assignment
     Agreement) or the transactions contemplated thereby, (ii) Claims against
     or any act or omission of the Owner Lessor, the Trust Company or the
     Lessor Manager or Affiliate thereof that is not related to, or that is in
     violation of, any Operative Document or the FILOT Lease (giving

                                      27
<PAGE>
     effect to its assignment to the Owner Lessor pursuant to the Assignment
     Agreement) or the transactions contemplated thereby or that is in breach
     of any covenant or agreement of the Owner Lessor, the Trust Company or
     the Lessor Manager specified therein, (iii) Taxes imposed upon the Owner
     Lessor, the Trust Company or the Lessor Manager or any Affiliate thereof
     that are not indemnified against by the Facility Lessee pursuant to any
     Operative Document or (iv) Claims against or affecting the Owner Lessor,
     the Trust Company or the Lessor Manager or any Affiliate thereof arising
     out of the voluntary or involuntary transfer by the Owner Lessor, the
     Trust Company or the Lessor Manager of any portion of the interest of the
     Owner Lessor in the Owner Lessor's Interest, other than pursuant to the
     Operative Documents and the FILOT Lease.

     "OWNER LESSOR'S PERCENTAGE" shall mean 25%.

     "OWNER PARTICIPANT" shall mean SBR OP-4, LLC, a Delaware limited
     liability company.

     "OWNER PARTICIPANT'S ACCOUNT" shall mean the account maintained by the
     Owner Participant at the bank specified with respect thereto on Schedule
     1-C to the Participation Agreement, or such other account of the Owner
     Participant, as the Owner Participant may from time to time specify in a
     notice to the Indenture Trustee pursuant to Section 9.5 of the Collateral
     Trust Indenture.

     "OWNER PARTICIPANT'S COMMITMENT" shall mean the Owner Participant's
     investment in the Owner Lessor contemplated by Section 2.1(a) of the
     Participation Agreement.

     "OWNER PARTICIPANT'S LIEN(S)" individually or collectively as the
     context may require, shall mean any Lien on the Lessor Estate, the
     Facility Sites, or any part of any thereof or interest therein arising as
     a result of (i) Claims against or any act or omission of the Owner
     Participant that is not related to, or that is in violation of, any
     Operative Document or the transactions contemplated thereby or that is in
     breach of any covenant or agreement of the Owner Participant set forth
     therein, (ii) Taxes against the Owner Participant that are not
     indemnified against by the Facility Lessee pursuant to the Operative
     Documents or (iii) Claims against or affecting the Owner Participant
     arising out of the voluntary or involuntary transfer by the Owner
     Participant of any portion of the interest of the Owner Participant in
     the Member Interest, other than any transfer (x) pursuant to the exercise
     of any of the Facility Lessee's (or any Affiliate thereof) rights under
     the Operative Documents or (y) during the continuance of a Lease Event of
     Default.

     "OWNER PARTICIPANT'S NET ECONOMIC RETURN" shall mean the Owner
     Participant's anticipated (i) after-tax yield, calculated according to
     the multiple investment sinking fund method of analysis, and (ii)
     periodic GAAP income and aggregate after-tax cash flow.

     "OWNERSHIP AND OPERATION AGREEMENT" shall mean the Ownership and
     Operation Agreement, dated as of October 18, 2001, among the Facility
     Lessee, the Owner Lessor and the Other Broad River Owner Lessors.

                                      28
<PAGE>
     "OWNERSHIP INTEREST" shall mean, with respect to the Facility Lessee (or
     any assigns of the Facility Lessee), any and all equity interest in the
     Facility Lessee (or such assignee of the Facility Lessee) howsoever
     designated (whether capital stock, partnership interest, member interest
     or any equivalent interest).

     "PARTICIPATION AGREEMENT" shall mean the Participation Agreement, dated
     as of October 18, 2001, among the Facility Lessee, the Guarantor, the
     Owner Lessor, the Owner Participant, Wells Fargo Bank Northwest, National
     Association, not in its individual capacity, except as expressly provided
     therein, but solely as Lessor Manager, State Street Bank and Trust
     Company of Connecticut, as Indenture Trustee, and State Street Bank and
     Trust Company of Connecticut, as Pass Through Trustees.

     "PASS THROUGH COMPANY" shall mean State Street Bank and Trust Company of
     Connecticut, National Association, in its individual capacity, together
     with its successors and permitted assigns.

     "PASS THROUGH TRUST AGREEMENT" shall mean one or more, as the context
     may require, of (i) the Pass Through Trust Agreement A, dated as of
     October 18, 2001, and (ii) the Pass Through Trust Agreement B, dated as
     of October 18, 2001, in each case between the Facility Lessee and a Pass
     Through Trustee.

     "PASS THROUGH TRUSTEES" shall mean State Street Bank and Trust Company
     of Connecticut, National Association, not in its individual capacity, but
     solely as Pass Through Trustees under each of the Pass Through Trust
     Agreements, and each other Person that may from time to time be acting as
     a Pass Through Trustee in accordance with the provisions of a Pass
     Through Trust Agreement.

     "PASS THROUGH TRUSTS" shall mean the pass through trusts created
     pursuant to the Pass Through Trust Agreements.

     "PAYING AGENT" shall have the meaning set forth in Section 2.6 of the
     Collateral Trust Indenture.

     "PERIODIC RENT" with respect to the Facility Lease, shall mean the sum
     of Basic Rent and Renewal Rent, if any, as specified in Schedule 1 to the
     Facility Lease.

     "PERMIT" shall mean any action, approval, certificate, consent, waiver,
     exemption, variance, franchise, order, permit, authorization, right or
     license of or from, and any filing with a Governmental Entity.

     "PERMITTED CLOSING DATE LIENS" shall mean Permitted Liens described in
     clause (a), (b), (d), (f), (g), (i), (j), (k), (l), (m), (n) and (o) of
     the definition thereof.

     "PERMITTED ENCUMBRANCES" shall mean with respect to the Facility Site,
     all matters shown as exceptions on Schedule B to each of the Title
     Policies as in effect on the Closing Date.

                                      29
<PAGE>
     "PERMITTED INVESTMENTS" shall mean investments in securities that are:
     (i) direct obligations of the United States or any agency thereof; (ii)
     obligations fully guaranteed by the United States or any agency thereof;
     (iii) certificates of deposit or bankers acceptances issued by commercial
     banks (or any of their affiliates) organized under the laws of the United
     States or of any political subdivision thereof or under the laws of
     Canada, Japan, Switzerland or any country that is a member of the
     European Economic Community having a combined capital and surplus of at
     least $250 million and having long-term unsecured debt securities then
     rated "A" or better by S&P or "A2" or better by Moody's (but at the time
     of investment not more than $25,000,000 may be invested in such
     certificates of deposit from any one bank); (iv) repurchase obligations
     with a term of not more than seven days for underlying securities of the
     types described in clauses (i) and (ii) above, entered into with any
     financial institution meeting the qualifications specified in clause
     (iii) above; (v) open market commercial paper of any corporation
     incorporated or doing business under the laws of the United States or of
     any political subdivision thereof having a rating of at least "A-1" from
     S&P and "P-1" from Moody's (but at the time of investment not more than
     $25,000,000 may be invested in such commercial paper from any one
     company); (vi) auction rate securities or money market preferred stock
     having one of the two highest ratings obtainable from either S&P or
     Moody's (or, if at any time neither S&P nor Moody's is rating such
     obligations, then from another nationally recognized rating service
     acceptable to the Depositary); and (vii) investments in money market
     funds or money market mutual funds sponsored by any securities broker
     dealer of recognized national standing (or an affiliate thereof), having
     an investment policy that requires substantially all the invested assets
     of such fund to be invested in investments described in any one or more
     of the foregoing clauses having a rating of "A" or better by S&P or "A2"
     or better by Moody's.

     "PERMITTED LIENS" shall mean (a) the rights and interests of the parties
     as provided in the Operative Documents and the FILOT Lease, as well as
     the rights of sublessees and/or assignees to the extent set forth in or
     expressly permitted pursuant to the Facility Lease or any other Operative
     Document, (b) as to the Facility Lessee, Owner Lessor's Liens, Owner
     Participant's Liens and Indenture Trustee's Liens, (c) Liens for any tax,
     assessment or other governmental charge, either secured by a bond
     reasonably acceptable to the Indenture Trustee and the Pass Through
     Trustees and, so long as no Lease Indenture Event of Default which is not
     a Lease Event of Default exists, the Owner Lessor, or not yet due or
     being contested in good faith and by appropriate proceedings, so long as
     (i) such proceedings shall not reasonably be expected to give rise to
     criminal liability or material civil liability on the part of the Owner
     Lessor, the Owner Participant, the Lessor Manager, the Trust Company, the
     Indenture Trustee, the Pass Through Trustees or any Certificateholders,
     and would not otherwise reasonably be expected to have a Material Adverse
     Effect, or (ii) adequate reserves consistent with GAAP requirements have
     been established and are maintained, so as to assure such Persons that
     any taxes, assessments or other charges determined to be due will be
     promptly paid in full when such contest is determined, (d) materialmen's,
     mechanics', workers', repairmen's, employees' or other like Liens arising
     in the ordinary course of business or in connection with the maintenance
     or repair of the Facility, for amounts not yet due or for amounts being
     contested in good faith and by appropriate proceedings, so long as (i)
     such proceedings shall not reasonably be expected to give rise to
     criminal liability or material

                                      30
<PAGE>
     civil liability on the part of the Owner Lessor, the Owner Participant,
     the Lessor Manager, the Trust Company, the Indenture Trustee, the Pass
     Through Trustees or any Certificateholders, and would not otherwise
     reasonably be expected to have a Material Adverse Effect, and (ii)
     adequate reserves consistent with GAAP requirements have been established
     and are maintained, so as to ensure that any amounts determined to be due
     will be promptly paid in full when such contest is determined, (e) Liens
     arising out of judgments or awards, but only so long as an appeal or
     proceeding for review is being prosecuted in good faith and so long as
     (i) such proceedings shall not reasonably be expected to give rise to
     criminal liability or material civil liability on the part of the Owner
     Lessor, the Owner Participant, the Lessor Manager, the Trust Company, the
     Indenture Trustee, the Pass Through Trustees or any Certificateholders,
     and would not otherwise reasonably be expected to have a Material Adverse
     Effect, and (ii) adequate reserves consistent with GAAP requirements have
     been established and are maintained, so as to ensure that any amounts
     determined to be due will be promptly paid in full when such contest is
     determined, or are fully covered by insurance, (f) mineral rights the use
     and enjoyment of which do not materially interfere with the use and
     enjoyment of the Facility, (g) Permitted Encumbrances, (h) Liens,
     deposits or pledges to secure statutory obligations or performance of
     bids, tenders, contracts (other than for the repayment of borrowed money)
     or leases, or for purposes of like general nature in the ordinary course
     of its business, (i) existing Liens that have been disclosed to the
     Transaction Parties prior to the Closing Date and which are reasonably
     acceptable to the Transaction Parties, (j) Liens incident to the ordinary
     course of business that are not incurred in connection with the obtaining
     of any loan, advance or credit in respect of borrowed money permitted to
     be incurred pursuant to the Operative Documents so long as such Liens (x)
     do not in the aggregate materially impair the use of the property or
     assets of the Facility Lessee or the value of such property or assets for
     the purposes of such business and (y) shall not reasonably be expected to
     give rise to criminal liability or unindemnified, material civil
     liability on the part of the Owner Lessor, the Owner Participant, the
     Lessor Manager, the Trust Company, the Indenture Trustee, the Pass
     Through Trustees or any Certificateholders, and would not otherwise
     reasonably be expected to have a Material Adverse Effect, (k) the
     interests of the Other Broad River Owner Lessors and the Other Broad
     River Indenture Trustees in the Facility, the Facility Site and the
     Ownership and Operation Agreement, (l) the interests of the Facility
     Lessee, the Other Broad River Owner Participants, the Other Broad River
     Owner Lessors, the Other Broad River Lessor Managers, the Other Broad
     River Indenture Trustees, and Pass Through Trustees under any of the
     Other Broad River Operative Documents, (m) the Ownership and Operation
     Agreement, (n) the interest of the co-owners of the Facility as tenants
     in common in the Facility and the rights of such owners under the
     Ownership and Operation Agreement and (o) the rights of the County with
     respect to the Facility and Facility Site.

    "PERSON" shall mean any individual, corporation, cooperative,
     partnership, joint venture, association, joint-stock company, limited
     liability company, other entity, trust, unincorporated organization or
     government or any agency or political subdivision thereof or any other
     entity.

     "PLAN" shall mean any pension plan as defined in Section 3(2) of ERISA,
     which is maintained or contributed to by (or to which there is an
     obligation to contribute of) the

                                      31
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     Facility Lessee or a Subsidiary of the Facility Lessee or an ERISA
     Affiliate, and each such plan for the five year period immediately
     following the latest date on which Facility Lessee, or a Subsidiary of
     Facility Lessee or an ERISA Affiliate maintained, contributed to or had
     an obligation to contribute to such plan.

     "POST-FILOT LEASE CONVERSION DATE" shall mean the date on which all of
     the following events shall have occurred:

          (a)  the closing of the sale of an undivided fee interest in the
      Land (to the extent of the Owner Lessor's Percentage) by the County to
     the Facility Lessee upon exercise by the Owner Lessor of the Land
     Purchase Option and the designation by the Owner Lessor to the County of
     the Facility Lessee (or its designee) as the entity to which an undivided
     fee interest in the Land (to such extent) is to be conveyed, pursuant to
     which title to the Land (to such extent) vests in the Facility Lessee,
     and the termination of the FILOT Lease pursuant to Section 10.02 thereof;

          (b)  the closing of the sale of an undivided fee interest in the
     Facility by the County to the Owner Lessor upon exercise by the Owner
     Lessor of the Facility Purchase Option, pursuant to which good and valid
     fee title an undivided fee interest to the Facility (to the extent of the
     Owner Lessor's Percentage) vests in the Owner Lessor;

          (c)  the commencement of the full force and effectiveness of the
     Springing Facility Site Lease and the Springing Facility Site Sublease;

          (d)  except for the termination of the FILOT Lease and the Facility
     Site Lease, no Operative Document shall cease to be in full force and
     effect as a result of the transactions in clauses (a), (b) or (c) above;

          (e)  receipt by the Owner Lessor, the Owner Participant and (if the
     Lien of the Collateral Trust Indenture has not been discharged) the
     Indenture Trustee of the following (1) evidence of the obtaining of all
     Governmental Approvals and third-party consents which are reasonably
     necessary or advisable in connection with the transactions referred to in
     clauses (a) through (d) above, (2) evidence satisfactory to the Indenture
     Trustee (including without limitation, evidence that all filings and
     recordings, if any, necessary under Applicable Law shall have been duly
     made and all filing, recordation, transfer and other fees payable in
     connection therewith shall have been paid) that the Lien of the
     Collateral Trust Indenture on the Indenture Estate shall continue in full
     force and effect and with the same priority following the consummation of
     such transactions, and (3) appropriate endorsements, reasonably
     satisfactory to such Persons, to required property title insurance
     policies to reflect the new fee owners of the Land and the other portions
     of the Project.

          (f)  the receipt by the Owner Participant and, so long as the Lien of
      the Collateral Trust Indenture has not been terminated or discharged,
     the Indenture Trustee and the Pass Through Trustees, of opinions of
     counsel with respect to the accomplishment of the foregoing matters and
     other matters substantially similar to these covered by the opinions of
     counsel to the Facility Lessee rendered on the Closing Date,

                                      32
<PAGE>
     which opinions shall be satisfactory in form and substance to the Owner
     Participant and, so long as the Lien of the Collateral Trust Indenture
     has not been terminated or discharged, the Indenture Trustee and the Pass
     Through Trustees.

     "POWER MARKET CONSULTANT" shall mean Pace Energy Global Services, LLC.

     "PREFERRED STOCK", as applied to the Capital Stock of any corporation,
     means Capital Stock of any class or classes (however designated) which is
     preferred as to the payment of dividends, or as to the distribution of
     assets upon any voluntary or involuntary liquidation or dissolution of
     such corporation, over shares of Capital Stock of any other class of such
     corporation.

     "PRICING ASSUMPTIONS" shall mean the "Pricing Assumptions" (attached as
     Schedule 2 to the Participation Agreement) for the Facility Lease,.

     "PRIME RATE" shall mean the rate of interest publicly announced by
     Citibank, N.A. from time to time as its prime rate.

     "PROCEEDS" shall mean the proceeds from the sale of the Certificates by
     the Pass Through Trust to the Certificateholders on the Closing Date.

     "PROJECT" shall have the meaning set forth in the FILOT Lease.

      "PROPORTIONAL RENTAL AMOUNT" shall have the meaning set forth in Section
      3.2(c) of the Facility Lease.

     "PROPOSED TAX LAW CHANGE" shall mean a Tax Law Change (a) that has been
     reported out of the Senate Finance Committee of the House Ways and Means
     Committee, (b) that has been included in the issuance or amendment of a
     proposed Treasury Regulation, (c) that is part of a bill that has been
     introduced into the House of Representatives or the Senate and which has
     been publicly endorsed by the Executive Branch or the Department of
     Treasury, or (d) with respect to which a notice of a specific proposed
     change in administrative guidance has been issued by the Internal Revenue
     Service or the Department of Treasury and which has been published in the
     Federal Register.

     "PRUDENT INDUSTRY PRACTICE" shall mean, at a particular time, (a) any of
     the practices, methods and acts engaged in or approved by a significant
     portion of the competitive electric generating industry at such time, or
     (b) with respect to any matter to which clause (a) does not apply, any of
     the practices, methods and acts which, in the exercise of reasonable
     judgment at the time the decision was made, could have been expected to
     accomplish the desired result at a reasonable cost consistent with good
     business practices, reliability, safety and expedition. "Prudent Industry
     Practice" is not intended to be limited to the optimum practice, method
     or act to the exclusion of all others, but rather to be a spectrum of
     possible practices, methods or acts having due regard for, among other
     things, manufacturers' warranties and the requirements of any
     Governmental Entity of competent jurisdiction.

     "PUHCA" shall mean the Public Utility Holding Company Act of 1935, as
     amended.

                                      33
<PAGE>
     "PURCHASE OPTION" shall mean, collectively, the Facility Purchase Option
     and the Land Purchase Option.

     "QUALIFYING CASH BIDS" with respect to the Facility Lease, shall have
     the meaning specified in Section 13.2 of the Facility Lease.

     "RATING AGENCIES" shall mean S&P and Moody's.

     "REASONABLE BASIS" for a position shall exist if tax counsel may
     properly advise reporting such position on a tax return in accordance
     with Formal Opinion 85-352 issued by the Standing Committee on Ethics and
     Professional Responsibility of the American Bar Association (or any
     successor to such opinion).

     "REBUILDING CLOSING DATE" with respect to the Facility Lease, shall have
     the meaning specified in Section 10.3(e) of the Facility Lease.

     "RECEIVING PARTY" shall have the meaning set forth in Section 14.21 of
     the Participation Agreement.

     "REDEMPTION DATE" shall mean, when used with respect to any Note to be
     redeemed, the date fixed for such redemption by or pursuant to the
     Collateral Trust Indenture or the respective Note, which date shall be a
     Termination Date.

     "REFINANCING INDEBTEDNESS" means Indebtedness that refunds, refinances,
     replaces, renews, repays or extends (including pursuant to any defeasance
     or discharge mechanism) (collectively, "refinances," and "refinanced"
     shall have a correlative meaning) any Indebtedness of the Guarantor or a
     Restricted Subsidiary existing on the date of the Guaranty or Incurred in
     compliance with the Indenture, dated as of August 10, 2000, between the
     Guarantor and Wilmington Trust Company, as Trustee (including
     Indebtedness of the Guarantor that refinances Indebtedness of any
     Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that
     refinances Indebtedness of another Restricted Subsidiary) including
     Indebtedness that refinances Refinancing Indebtedness; provided, however,
     that (i) if the Indebtedness being refinanced is contractually
     subordinated in right of payment to the Obligations, the Refinancing
     Indebtedness shall be contractually subordinated in right of payment to
     such Obligations to at least the same extent as the Indebtedness being
     refinanced, (ii) the Refinancing Indebtedness is scheduled to mature
     either (a) no earlier than the Indebtedness being refinanced or (b) after
     the Stated Maturity of the Obligations, (iii) the Refinancing
     Indebtedness has an Average Life at the time such Refinancing
     Indebtedness is Incurred that is equal to or greater than the Average
     Life of the Indebtedness being refinanced and (iv) such Refinancing
     Indebtedness is in an aggregate principal amount (or if issued with
     original issue discount, an aggregate issue price) that is equal to or
     less than the aggregate principal amount (or if issued with original
     issue discount, the aggregate accreted value) then outstanding (plus fees
     and expenses, including any premium, swap breakage and defeasance costs)
     under the Indebtedness being refinanced; and provided, further, that
     Refinancing Indebtedness shall not include (x) Indebtedness of a
     Subsidiary of the Guarantor that refinances Indebtedness of the Guarantor
     or (y) Indebtedness of the

                                      34
<PAGE>
     Guarantor or a Restricted Subsidiary that refinances Indebtedness of an
     Unrestricted Subsidiary.

     "REGISTRAR" shall have the meaning set forth in Section 2.8 of the
     Collateral Trust Indenture.

     "REGULATORY EVENT OF LOSS" shall have meaning specified in clause (iv)
     of the definition of "Event of Loss".

     "RELATED PARTY" shall mean, with respect to any Person or its successors
     and assigns, an Affiliate of such Person or its successors and assigns
     and any director, officer, servant, employee or agent of that Person or
     any such Affiliate or their respective successors and assigns; provided
     that none of the Trust Company, the Lessor Manager or the Owner Lessor
     shall be treated as Related Parties to each other and none of the Trust
     Company, the Owner Lessor or the Lessor Manager shall be treated as a
     Related Party to any Owner Participant Equity Investor except that, for
     purposes of Section 9 of the Participation Agreement, the Owner Lessor
     will be treated as a Related Party to an Owner Participant to the extent
     that the Owner Lessor acts on the express direction or with the express
     consent of an Owner Participant.

     "RELEASE" shall mean any release, pumping, pouring, emptying, injecting,
     escaping, leaching, migrating, dumping, seepage, spill, flow, leak,
     discharge, disposal or emission.

     "RENEWAL RENT" with respect to the Facility Lease, shall mean the rent
     payable during any Renewal Lease Term, in each case as determined in
     accordance with Section 15.4 of the Facility Lease.

     "RENEWAL TERM" with respect to the Springing Facility Site Sublease,
     shall have the meaning set forth in Section 2.1(b).

     "RENEWAL LEASE TERM" with respect to the Facility Lease, shall mean the
     First Renewal Lease Term, the Second Renewal Term, any FMV Renewal Lease
     Term or the Lessor Put Renewal Term.

     "RENEWAL SITE LEASE TERM(S)" individually or collectively as the context
     shall require, with respect to the Springing Facility Site Lease, shall
     have the meaning set forth in Section 2.2(b) of the Springing Facility
     Site Lease.

     "RENT" shall mean Basic Rent, Renewal Rent and Supplemental Rent.

     "RENT PAYMENT DATE" with respect to the Facility Lease, shall mean,
     January 18, 2002, each May 30 and November 30 occurring thereafter
     (through and including May 30, 2031) and October 18, 2031.

     "RENT PAYMENT PERIOD" with respect to the Facility Lease, shall mean (i)
     in the case of the first Rent Payment Period the period commencing on the
     Closing Date and ending on January 18, 2002 (ii) in the case of the
     second Rent Payment Period, the period commencing on January 19, 2002 and
     ending on May 30, 2002 and (iii) in all cases

                                      35
<PAGE>
     thereafter (except for the last Rent Payment Period which period shall
     commence on May 31, 2031 and end on, and include, October 18, 2031, each
     six-month period commencing on each Rent Payment Date through and
     including the following May 30 or November 30 as the case may be.

     "REPLACEMENT COMPONENT" shall have the meaning specified in Section 7.2
     of the Facility Lease.

     "REQUIRED IMPROVEMENT" with respect to the Facility Lease, shall have
     the meaning specified in Section 8.1 of the Facility Lease.

     "REQUISITION" shall have the meaning specified in clause (iii) of the
     definition of "Event of Loss".

     "RESPONSIBLE OFFICER" shall mean, with respect to any Person, (i) its
     Chairman of the Board, its President, any Senior Vice President, the
     Chief Financial Officer, any Vice President, the Treasurer or any other
     management employee (a) that has the power to take the action in question
     and has been authorized, directly or indirectly, by the Board of
     Directors or equivalent body of such Person, (b) working under the direct
     supervision of such Chairman of the Board, President, Senior Vice
     President, Chief Financial Officer, Vice President or Treasurer and (c)
     whose responsibilities include the administration of the Overall
     Transaction and (ii) with respect to the Pass Through Trustees and the
     Indenture Trustee an officer in their respective corporate trust
     departments.

     "RESTRICTED SUBSIDIARY" means any Subsidiary of the Guarantor that is
     not designated an Unrestricted Subsidiary by the Board of Directors.

     "REVENUES" shall have the meaning specified in clause (2) of the
     Granting Clause of the Collateral Trust Indenture.

     "ROCKGEN" shall mean RockGen Energy LLC.

     "ROCKGEN BILLS OF SALE" shall mean each of the bills of sale executed
     and delivered pursuant to the RockGen Participation Agreements.

     "ROCKGEN CALPINE GUARANTIES" shall mean the Calpine guaranty and payment
     agreements executed and delivered by Calpine pursuant to the RockGen
     Participation Agreements.

     "ROCKGEN COLLATERAL TRUST INDENTURES" shall mean each of the collateral
     trust indentures executed and delivered pursuant to the RockGen
     Participation Agreements.

     "ROCKGEN FACILITY LEASES" shall mean a collective reference to each of
     the four facility lease agreements, dated as of October 18, 2001, by and
     between the applicable RockGen Owner Lessor and the RockGen Facility
     Lessee, pursuant to which the RockGen Facility Lessee will lease the
     applicable RockGen Ground Interests to applicable RockGen Owner Lessor.

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<PAGE>
     "ROCKGEN FACILITY LESSEE" shall mean RockGen Energy LLC.

     "ROCKGEN FACILITY SITE" shall have the meaning set forth in the recitals
     to the RockGen Facility Site Leases.

     "ROCKGEN FACILITY SITE LEASES" shall mean a collective reference to each
     of the four facility site leases, dated as of October 18, 2001, by and
     between the applicable RockGen Owner Lessor and the RockGen Facility
     Lessee, pursuant to which RockGen Facility Lessee will lease the
     applicable RockGen Ground Interest to the applicable RockGen Owner Lessor.

     "ROCKGEN GROUND INTERESTS" shall mean the undivided leasehold interests
     in the RockGen Facility Site conveyed to the RockGen Owner Lessors under
     the RockGen Facility Site Leases.

     "ROCKGEN INDENTURE TRUSTEES" shall mean each of the indenture trustees
     relating to the RockGen Collateral Trust Indentures.

     "ROCKGEN LESSOR MANAGERS" shall mean each of the lessor managers acting
     on behalf of the RockGen Owner Lessors pursuant to the RockGen Operative
     Documents.

     "ROCKGEN OWNER LESSORS" shall mean RockGen OL-1, LLC RockGen OL-2, LLC,
     RockGen OL-3, LLC and RockGen OL-4, LLC.

     "ROCKGEN OWNER PARTICIPANTS" shall mean SBR OP-1, LLC, SBR OP-2, LLC,
     SBR OP-3, LLC and SBR OP-4, LLC.

     "ROCKGEN LEASE TRANSACTIONS" shall mean the transactions involving the
     transfer of the RockGen Undivided Interests and the lease of the RockGen
     Ground Interests to the RockGen Owner Lessors, and the simultaneous lease
     of the RockGen Undivided Interests to the RockGen Facility Lessee and the
     simultaneous sublease of the RockGen Ground Interest to the RockGen
     Facility Lessee on substantially the same terms and conditions as under,
     and dated the same date as, the RockGen Overall Transaction.

     "ROCKGEN OPERATIVE DOCUMENTS" shall mean the other "Operative Documents"
     for each of the RockGen Lease Transactions.

     "ROCKGEN OVERALL TRANSACTION" shall mean all of the transactions
     contemplated by the RockGen Operative Documents.

     "ROCKGEN PARTICIPATION AGREEMENTS" shall mean a collective reference to
     each of the other three separate participation agreements entered into by
     the RockGen Facility Lessee, the applicable RockGen Owner Lessor, the
     applicable RockGen Lessor Manager, the applicable RockGen Owner
     Participant, the applicable RockGen Indenture Trustee, the Pass Through
     Trustees and Calpine and designated Participation Agreement (RG-1),
     Participation Agreement (RG-2), Participation Agreement (RG-3) and
     Participation Agreement (RG-4), each dated as of the Closing Date,
     pursuant to which, among other things, the RockGen Facility Lessee has
     agreed to (a) sell to the applicable RockGen

                                      37
<PAGE>
     Owner Lessors certain undivided interests in the RockGen Facility, and
     (b) lease from the applicable RockGen Owner Lessors such undivided
     interest in the RockGen Facility pursuant to the RockGen Facility Leases.

     "ROCKGEN UNDIVIDED INTERESTS" shall mean the undivided ownership
     interests in the RockGen Facility conveyed to the RockGen Owner Lessors
     under the RockGen Bills of Sale.

     "SALE/LEASEBACK TRANSACTION" means an arrangement relating to property
     now owned or hereafter acquired whereby the Guarantor or a Subsidiary
     transfers such property to a Person and leases it back from such Person,
     other than leases for a term of not more than 36 months or between the
     Guarantor and a Wholly Owned Subsidiary or between Wholly Owned
     Subsidiaries.

     "SCHEDULED CLOSING DATE" shall mean October 18, 2001.

     "SEC" shall mean the Securities and Exchange Commission.

     "SECOND RENEWAL LEASE TERM" with respect to the Facility Lease, shall
     have the meaning specified in Section 15.1(b) of the Facility Lease.

     "SECOND WINTERGREEN RENEWAL LEASE OPTION" with respect to the Sringing
     Facility Site Lease, shall have the meaning set forth in Section
     2.2(a)(ii) of the Springing Facility Site Lease.

     "SECTION 467 INTEREST" with respect to the Facility Lease, shall have
     the meaning set forth in Section 3.2(d) of the Facility Lease.

     "SECTION 467 LOAN" with respect to the Facility Lease, shall have the
     meaning specified in Section 3.2(d) of the Facility Lease.

     "SECURED INDEBTEDNESS" shall have the meaning specified in Section 1(b)
     of the Collateral Trust Indenture.

     "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

     "SEVERABLE IMPROVEMENT" shall mean any Improvement that is readily
     removable without causing material damage to the Facility.

     "SIGNIFICANT LEASE DEFAULT" shall mean, with respect to the Facility
     Lease, (i) an event that is, or solely with the passage of time or the
     giving of notice (or both) would become, a "Lease Event of Default" under
     clauses (a), (b), (c), (g), (h) or (k) of Section 16 of the Facility
     Lease, (ii) the failure of the Facility Lessee to comply in any material
     respect with its obligations under Section 6 of the Facility Lease and
     (iii) the occurrence and continuation of a Significant Lease Default
     under any Other Broad River Facility Lease.

                                      38
<PAGE>
     "SIGNIFICANT SUBSIDIARY" means any Subsidiary (other than an
     Unrestricted Subsidiary) that would be a "Significant Subsidiary" of the
     Guarantor within the meaning of Rule 1-02 under Regulation S-X
     promulgated by the SEC.

     "SITE LEASE EVENT OF DEFAULT" with respect to the Springing Facility
     Site Lease, shall have the meaning set forth in Section 14.1 of the
     Springing Facility Site Lease.

     "S&P" shall mean Standard & Poor's Ratings Services, a division of The
     McGraw-Hill Companies, Inc. or any successor thereto.

     "SOUTH POINT ASSIGNMENT AGREEMENTS" shall mean each of the assignment
     agreements executed and delivered pursuant to the South Point
     Participation Agreements.

     "SOUTH POINT CALPINE GUARANTIES" shall mean the Calpine guaranty and
     payment agreements executed and delivered by Calpine pursuant to the
     South Point Participation Agreements.

     "SOUTH POINT COLLATERAL TRUST INDENTURES" shall mean each of the
     collateral trust indentures executed and delivered pursuant to the South
     Point Participation Agreements.

     "SOUTH POINT FACILITY LEASES" shall mean a collective reference to each
     of the four facility lease agreements, dated as of October 18, 2001, by
     and between the applicable South Point Owner Lessor and the South Point
     Facility Lessee, pursuant to which the applicable South Point Owner
     Lessor will lease the applicable South Point Ground Interests to South
     Point Facility Lessee.

     "SOUTH POINT FACILITY LESSEE" shall mean South Point Energy LLC.

     "SOUTH POINT FACILITY SITE" shall have the meaning set forth in the
     recitals to the South Point Facility Site Leases.

     "SOUTH POINT FACILITY SITE LEASES" shall mean a collective reference to
     each of the four facility site leases, dated as of October 18, 2001, by
     and between the applicable South Point Owner Lessor and the South Point
     Facility Lessee, pursuant to which the applicable South Point Owner
     Lessor will lease the applicable South Point Ground Interest to the South
     Point Facility Lessee.

     "SOUTH POINT GROUND INTERESTS" shall mean the undivided leasehold
     interests in the South Point Facility Site conveyed to the South Point
     Owner Lessors under the South Point Assignment Agreements.

     "SOUTH POINT INDENTURE TRUSTEES" shall mean each of the indenture
     trustees relating to the South Point Collateral Trust Indentures.

     "SOUTH POINT LEASE TRANSACTIONS" shall mean the transactions involving
     the assignment and transfer of the South Point Undivided Interests and
     the South Point Ground Interests to the South Point Owner Lessors, and
     the simultaneous lease of the South Point Undivided Interests and South
     Point Ground Interests to the South Point Facility Lessee

                                      39
<PAGE>
     on substantially the same terms and conditions as under, and dated the
     same date as, the South Point Overall Transaction.

     "SOUTH POINT LESSOR MANAGERS" shall mean each of the lessor managers
     acting on behalf of the South Point Owner Lessors pursuant to the South
     Point Operative Documents.

     "SOUTH POINT OPERATIVE DOCUMENTS" shall mean the other "Operative
     Documents" for each of the South Point Lease Transactions.

     "SOUTH POINT OWNER LESSORS" shall mean South Point OL-1, LLC, South
     Point OL-2, LLC, South Point OL-3, LLC and South Point OL-4, LLC.

     "SOUTH POINT OWNER PARTICIPANTS" shall mean SBR OP-1, LLC, SBR OP-2,
     LLC, SBR OP-3, LLC and SBR OP-4, LLC.

     "SOUTH POINT OVERALL TRANSACTION" shall mean all of the transactions
     contemplated by the Broad River Operative Documents.

     "SOUTH POINT PARTICIPATION AGREEMENTS" shall mean a collective reference
     to each of the four separate participation agreements entered into by the
     South Point Facility Lessee, the applicable South Point Owner Lessor, the
     applicable South Point Lessor Manager, the applicable South Point Owner
     Participant, the applicable South Point Indenture Trustee, the Pass
     Through Trustees and Calpine and designated Participation Agreement
     (SP-1), Participation Agreement (SP-2), Participation Agreement (SP-3)
     and Participation Agreement (SP-4), each dated as of the Closing Date,
     pursuant to which, among other things, the South Point Facility Lessee
     has agreed to (a) assign and transfer to the applicable Broad River Owner
     Lessors certain undivided leasehold interests in the South Point Facility
     and the South Point Facility Site, and (b) lease from the applicable
     South Point Owner Lessors such undivided leasehold interest in the South
     Point Facility and the South Point Facility Site pursuant to the South
     Point Facility Leases and the South Point Facility Site Leases,
     respectively.

     "SOUTH POINT UNDIVIDED INTERESTS" shall mean the undivided leasehold
     interests (or upon the Post-FILOT Lease Conversion Date, undivided fee
     interests) in the Broad River Facility conveyed to the South Point Owner
     Lessors under the South Point Assignment Agreement.

     "SPECIAL LESSEE TRANSFER" shall have the meaning specified in Section
     13.2 of the Participation Agreement.

     "SPECIAL LESSEE TRANSFER AMOUNT" shall mean for any date, the amount
     determined as follows (but without duplication):

     (a)   (i) if the determination shall be a Termination Date, the
     Termination Value under the Facility Lease on such date, or (ii) if such
     date shall not be a Termination Date, the Termination Value under the
     Facility Lease on the immediately succeeding Termination Date; plus

                                      40
<PAGE>
      (b)   (i) any unpaid Basic Rent or Renewal Rent due before the date of
     determination plus (ii) if the determination date is a Rent Payment Date,
     the Basic Rent or Renewal Rent due on that date (to the extent payable in
     arrears); minus

      (c)   the sum of all outstanding principal, premium, if any, and accrued
     interest on the Lessor Notes, if any, on such determination date (in each
     case, if such determination date is a Rent Payment Date, before taking
     into account any Basic Rent or Renewal Rent due on such determination
     date).

     "SPECIAL LESSEE TRANSFER EVENT" shall mean the occurrence of (i) a
     Regulatory Event of Loss, (ii) a Burdensome Buyout Event under Section
     13.1 of the Facility Lease, or (iii) if the Owner Lessor has agreed to
     sell and the Facility Lessee has agreed to buy the Undivided Interest, a
     Burdensome Buyout Event under Section 13.2 of the Facility Lease.

     "SPRINGING FACILITY SITE LEASE" shall mean the Springing Facility Site
     Lease (BR-4) dated as of October 18, 2001 by and between the Facility
     Lessee and Owner Lessor pursuant to which the Facility Lessee shall lease
     the Ground Interest to the Owner Lessor.

     "SPRINGING FACILITY SITE SUBLEASE" shall mean the Springing Facility
     Site Sublease (BR-4) dated as of October 18, 2001, by and between Owner
     Lessor and Facility Lessee pursuant to which the Owner Lessor shall
     sublease the Ground Interest back to the Facility Lessee.

     "SPRINGING OPERATIVE DOCUMENTS" shall mean, the Springing Facility Site
     Lease and the Springing Facility Site Sublease.

     "STATED MATURITY" means, with respect to any security, the date
     specified in such security as the fixed date on which the principal of
     such security is due and payable, including pursuant to any mandatory
     redemption provision (but excluding any provision providing for the
     repurchase of such security at the option of the holder thereof upon the
     happening of any contingency).

     "SUBSIDIARY" shall mean, with respect to any Person (the "parent"), any
     corporation or other entity of which sufficient securities or other
     ownership interests having ordinary voting power to elect a majority of
     the board of directors or other Persons performing similar functions are
     at the time directly or indirectly owned by such parent.

     "SUPPLEMENTAL FINANCING" shall have the meaning specified in Section
     11.1 of the Participation Agreement.

     "SUPPLEMENTAL RENT" shall mean any and all amounts, liabilities and
     obligations (other than Basic Rent and Renewal Rent) which the Facility
     Lessee assumes or agrees to pay under the Operative Documents (whether or
     not identified as "Supplemental Rent") to the Owner Lessor or any other
     Person, including, without limitation, Termination Value.

         "SURVEY" shall mean the ALTA/ACSM As-Built Land Title Survey of the
Facility Site, to be dated July 21, 2001 and revised October 18, 2001, which
inter alia, will show the location of the Facility Site.

                                      41
<PAGE>
     "TAX" or "TAXES" shall mean all fees (including license, documentation
     and registration fees), taxes (including, without limitation, income
     taxes, receipts, franchise, rental, turn over sales taxes, use taxes,
     stamp taxes, value-added taxes, excise taxes, ad valorem taxes and
     property taxes (personal and real, tangible and intangible)), licenses,
     exports, duties, recording charges, levies, assessments, withholdings,
     fees, assessments and other charges and impositions of any nature, plus
     all related interest, penalties, fines and additions to tax, now or
     hereafter imposed by any federal, state, local or foreign government or
     other taxing authority.

     "TAX ADVANCE" shall have the meaning specified in Section 9.2(g)(iii)(5)
     of the Participation Agreement.

     "TAX ASSUMPTIONS" shall mean the items described in Section 1 of the Tax
     Indemnity Agreement.

     "TAX BENEFIT" shall have the meaning set forth in Section 9.2(e) of the
     Participation Agreement.

     "TAX CLAIM" shall have the meaning set forth in Section 9.2(g)(i) of the
     Participation Agreement.

     "TAX EVENT" shall mean any event or transaction that will be a taxable
     transaction to the holders of the Lessor Notes (or any Certificateholder)
     or result in an adverse change in the tax characterization of the Pass
     Through Trust.

     "TAX INDEMNITEE" shall have the meaning set forth in Section 9.2(a) of
     the Participation Agreement.

     "TAX INDEMNITY AGREEMENT" shall mean the Tax Indemnity Agreement (BR-4),
     dated as of the Closing Date, between the Facility Lessee and the Owner
     Participant.

     "TAX LAW CHANGE" shall have the meaning specified in Section 12(a) of
     the Participation Agreement.

     "TAX REPRESENTATION" shall mean each of the items described in Section 4
     of the Tax Indemnity Agreement.

     "TAXES AND ASSESSMENTS" with respect to the Springing Facility Site
     Lease, shall have, collectively, the meaning set forth in Section 18.1 of
     the Springing Facility Site Lease.

     "TERM" with respect to the Facility Site Lease, shall have the meaning
     set forth in Section 2.1(a) of the Facility Site Lease.

     "TERMINATION DATE" with respect to the Facility Lease, shall mean each
     of the monthly dates during the Facility Lease Term identified as a
     "Termination Date" on Schedule 2 of the Facility Lease.

                                      42
<PAGE>
     "TERMINATION PAYMENT DATE" with respect to the Facility Lease, shall
     have the meaning specified in Section 10.2(a) of the Facility Lease.

     "TERMINATION VALUE" with respect to the Facility Lease and each
     Termination Date, shall mean the amount specified on Schedule 2 to the
     Facility Lease as the corresponding "Termination Value".

     "THIRD PARTY CONSENTS" shall mean each of the following consents, the
     form of which is attached hereto as Exhibit O: (a) Consent and Agreement
     from Carolina Power and Light Company ("CP&L") with respect to the Power
     and Purchase Agreement, dated as of December 31, 1998 (as amended),
     between CP&L and the Facility Lessee: (b) Consent and Agreement from CP&L
     with respect to the Power Purchase Agreement, dated as of July 7, 2000
     (as amended), between CP&L and the Facility Lessee; and (c) Consent and
     Agreement from Duke Electric Transmission, a division of Duke Energy
     Corporation ("Duke") with respect to the Interconnection Agreement, dated
     as of February 5, 2000 (as amended), between Duke and the Facility Lessee.

     "TIA" shall mean the Trust Indenture Act of 1939.

     "TITLE COMPANY" shall mean Lawyers Title Insurance Corporation.

     "TITLE POLICY" shall mean, the title insurance policy (#FT027141.01214)
     dated as of October 18, 2001.

     "TRANSACTION COSTS" shall mean the following costs, to the extent
     substantiated or otherwise supported in reasonable detail:

     (i)     the reasonable costs of reproducing and printing the Operative
     Documents and the FILOT Lease (giving effect to its assignment to the
     Owner Lessor pursuant to the Assignment Agreement) and all costs and
     fees, including but not limited to filing and recording fees and
     recording, transfer, mortgage, intangible and similar taxes in connection
     with the execution, delivery, filing and recording of the Facility Lease,
     the Facility Site Lease, and any other Operative Document and any other
     document required to be filed or recorded pursuant to the provisions
     hereof or of any other Operative Document and the FILOT Lease (giving
     effect to its assignment to the Owner Lessor pursuant to the Assignment
     Agreement) and any Uniform Commercial Code filing fees in respect of the
     perfection of any security interests created by any of the Operative
     Documents and the FILOT Lease (giving effect to its assignment to the
     Owner Lessor pursuant to the Assignment Agreement) or as otherwise
     reasonably required by the Owner Lessor or the Indenture Trustee and
     surveyor fees;

     (ii)    the reasonable fees and expenses of Dewey Ballantine LLP, counsel
     to the Owner Participant and the Owner Lessor for their services rendered
     in connection with the negotiation, execution and delivery of the
     Participation Agreement and the other Operative Documents;

     (iii)   the reasonable fees and expenses of McNair Law Firm, P.A., South
     Carolina, counsel to the Facility Leasee;

                                      43
<PAGE>
     (iv)    the reasonable fees and expenses of Thelen Reid & Priest LLP,
     counsel to the Facility Lessee and the Guarantor for their services
     rendered in connection with the negotiation, execution and delivery of
     the Participation Agreement and other Operative Documents;

     (v)     the reasonable fees and expenses of Davis Wright & Tremaine LLP,
     special regulatory counsel to the Facility Lessee;

     (vi)    the reasonable fees and expenses of Skadden, Arps, Slate, Meagher
     and Flom LLP, counsel to the Underwriter, for their services rendered in
     connection with the negotiation, execution and delivery of the
     Participation Agreement and the other Operative Documents;

     (vii)   the reasonable fees and expenses for services rendered in
     connection with the recording of the Memorandum of Lease, the Memorandum
     of Facility Site Lease and the other applicable Operative Documents and
     the FILOT Lease;

     (viii)   the reasonable fees and expenses of Bingham Dana LLP counsel for
     the Indenture Trustee and the Lease Indenture Company and the Pass
     Through Company and the Pass Through Trustees, for their services
     rendered in connection with the negotiation, execution and delivery of
     the Participation Agreement and the other Operative Documents;

     (ix)     the reasonable fees, expenses and disbursements of the Indenture
     Trustee and Pass Through Trustees in connection with the execution and
     delivery of the Participation Agreement and the other Operative Documents
     to which either one is or will be a party;

     (x)     the fees and expenses of the Engineering Consultant, for its
     services rendered in connection with delivering the Engineering Report
     required by Section 4.17 of the Participation Agreement;

     (xi)    the fees and expenses of the other consultants listed in Section
     4.17 of the Participation Agreement, for their respective services
     rendered in connection with delivering the reports required by such
     Section 4.17;

     (xii)   the fees and expenses of the Appraiser, for its services rendered
     in connection with delivering the Closing Appraisal required by Section
     4.15 of the Participation Agreement;

     (xiii)  the fees and expenses of the Environmental Consultant retained by
     the Owner Participant;

     (xiv)   the debt and equity arrangement fees set forth in the letter
     agreement dated July 24, 2001 between CSFB and Calpine, and its
     reasonable out-of-pocket costs and expenses payable to the Underwriter;

                                      44
<PAGE>
     (xv)   the reasonable underwriting fees, legal fees, expenses and
     disbursement of the Initial Purchasers and any discounts or commissions
     in connection with the sale of the Certificates;

     (xvi)   all reasonable costs and expenses incurred pursuant to the
     syndication and/or sale of the debt and equity;

     (xvii)   the fees and expenses of the Rating Agencies in connection with
     the rating of the Certificates;

     (xviii)   the out-of-pocket expenses of the Owner Participant, Indenture
     Trustee and the Pass Through Trustees incurred in connection with the
     Overall Transaction including cost of the title insurance and fees and
     expenses, if any, related to delivery of any non-consolidation opinions;

     (xix)   the fees and expenses set forth in the letter agreement dated
     August 1, 2001 between Newcourt Capital Securities, Inc. and Calpine.

     Notwithstanding the foregoing, Transaction Costs shall not include
     internal costs and expenses such as salaries and overhead of whatsoever
     kind or nature nor costs incurred by the parties to the Participation
     Agreement pursuant to arrangements with third parties for services (other
     than those expressly referred to above), such as computer time
     procurement (other than out-of-pocket expenses of the Owner Participant),
     financial analysis and consulting, advisory services, and costs of a
     similar nature.

     "TRANSACTION PARTY" shall mean, individually or collectively, as the
     context shall require, all or any of the parties to the Operative
     Documents (including the Lease Indenture Company and the Pass Through
     Company).

     "TRANSACTIONS" shall mean, collectively, each of the transactions
     contemplated under the Participation Agreement and the other Operative
     Documents (including the assignment of the FILOT Lease pursuant to the
     Assignment Agreement).

     "TRANSFEREE" shall mean a transferee of the Owner Participant permitted
     by Section 7.1 of the Participation Agreement.

     "TRANSFEREE GUARANTOR" shall have the meaning set forth in Section
     7.1(a)(iii) of the Participation Agreement.

     "TREASURY REGULATIONS" shall mean regulations, including temporary
     regulations, promulgated under the Code.

     "TRI-PARTY AGREEMENT" shall mean the Tri-Party Agreement, Consent,
     Acknowledgement and Notice dated as of October 1, 2001 by and among the
     County, the Facility Lessee, the Owner Lessor and the Other Broad River
     Owner Lessors.

     "TRUST COMPANY" shall mean Wells Fargo Bank Northwest, National
     Association.

                                      45
<PAGE>
     "UNDERWRITER" shall mean CSFB.

     "UNDIVIDED INTEREST" shall mean the Owner Lessor's 25% undivided
     leasehold interest (or, upon and following the Post-FILOT Lease
     Conversion Date, the Owner Lessor's 25% undivided fee interest) in the
     Facility.

     "UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if any,
     by which the value of the accumulated plan benefits under the Plan
     determined on a plan termination basis in accordance with actuarial
     assumptions at such time consistent with those prescribed by the PBGC for
     purposes of Section 4044 of ERISA, exceeds the fair market value of all
     plan assets allocable to such liabilities under Title IV of ERISA
     (excluding any accrued but unpaid contributions).

     "UNIFORM COMMERCIAL CODE" or "UCC" shall mean the Uniform Commercial
     Code as in effect in the applicable jurisdiction.

     "UNITED STATES PERSON" shall have the meaning specified in Section
     7701(a)(30) of the Code or any successor provision thereto.

     "UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary that at the time of
     determination shall be designated an Unrestricted Subsidiary by the Board
     of Directors in the manner provided by the Indenture, dated as of August
     10, 2000, between the Guarantor and Wilmington Trust Company, as Trustee
     and (ii) any Subsidiary of an Unrestricted Subsidiary.

     "VERIFIER" shall have the meaning specified in Section 3.4(c) of the
     Facility Lease.

     "WHOLLY OWNED SUBSIDIARY" means a Subsidiary (other than an Unrestricted
     Subsidiary) all the Capital Stock of which (other than directors'
     qualifying shares) is owned by the Guarantor or another Wholly Owned
     Subsidiary.

                                      46<PAGE>
                                                                 EXHIBIT 4.22.11

                                                                 EXECUTION COPY

                         PARTICIPATION AGREEMENT (RG-1)

                          Dated as of October 18, 2001

                                      among

                    ROCKGEN ENERGY LLC, as Facility Lessee,

                      ROCKGEN OL-1, LLC, as Owner Lessor,

    WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
  capacity, except as expressly provided herein, but solely as Lessor Manager,

                      CALPINE CORPORATION, as Guarantor,

                     SBR OP-1, LLC, as Owner Participant,

   STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
                    not in its individual capacity, except
                   as expressly provided herein, but solely
                          as Indenture Trustee, and

   STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
                    not in its individual capacity, except
                   as expressly provided herein, but solely
                           as Pass Through Trustees

                                ROCKGEN PROJECT

===============================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                PAGE
<S>                                                                                                             <C>
SECTION 1.DEFINITIONS; INTERPRETATION OF THIS PARTICIPATION AGREEMENT ......................................      3

SECTION 2.PARTICIPATION; CLOSING DATE; TRANSACTION COSTS ...................................................      3

  Section 2.1   Agreements to Participate ..................................................................      3

  Section 2.2   Closing Date; Procedure for Participation. .................................................      4

  Section 2.3   Transaction Costs. .........................................................................      5

SECTION 3. REPRESENTATIONS AND WARRANTIES ..................................................................      6

  Section 3.1   Representations and Warranties of the Facility Lessee ......................................      6

  Section 3.2   Representations and Warranties of the Owner Lessor .........................................     15

  Section 3.3   Representations and Warranties of the Lessor Manager and the Trust Company .................     16

  Section 3.4   Representations and Warranties of the Owner Participant ....................................     18

  Section 3.5   Representations and Warranties of Indenture Trustee and the Lease Indenture Company ........     20

  Section 3.6...Warranties and Covenants of the Pass Through Trustees and the Pass Through Company .........     22

SECTION 4       CLOSING CONDITIONS .........................................................................     23

  Section 4.1   Completion of the Facility .................................................................     25

  Section 4.2   Operative Documents ........................................................................     25

  Section 4.3   Certificates and the Lessor Notes ..........................................................     25

  Section 4.4   Equity Investment ..........................................................................     25

  Section 4.5   Organizational Documents ...................................................................     25

  Section 4.6   Representations and Warranties .............................................................     25

  Section 4.7   Defaults, Events of Default, Events of Loss ................................................     25

  Section 4.8   Regulatory Approvals .......................................................................     25

  Section 4.9   Consents ...................................................................................     26

  Section 4.10  Governmental Actions .......................................................................     27
</TABLE>

                                      i

<PAGE>

                             TABLE OF CONTENTS (continued)

<TABLE>
<CAPTION>
                                                                                                                PAGE
<S>                                                                                                             <C>
  Section 4.11  Insurance ..................................................................................     27

  Section 4.12  Ratings ....................................................................................     27

  Section 4.13  Environmental Report .......................................................................     27

  Section 4.14  Surveys ....................................................................................     27

  Section 4.15  Appraisal; Condition of the Facility .......................................................     27

  Section 4.16  Letter from the Appraiser ..................................................................     27

  Section 4.17  Other Reports ..............................................................................     28

  Section 4.18  Opinion with Respect to Certain Tax Aspects ................................................     28

  Section 4.19  Opinions of Counsel ........................................................................     28

  Section 4.20  Recordings and Filings .....................................................................     28

  Section 4.21  Conditions to Closing ......................................................................     28

  Section 4.22  Taxes ......................................................................................     28

  Section 4.23  No Changes in Applicable Law ...............................................................     29

  Section 4.24  Registered Agent for the Facility Lessee and the Owner Lessor ..............................     29

  Section 4.25  Operating Lease Treatment ..................................................................     29

  Section 4.26  Rent Adjustments ...........................................................................     29

  Section 4.27  Title Insurance ............................................................................     29

  Section 4.28  Parent Guaranty ............................................................................     29

  Section 4.29  Letter as to Number of Offerees ............................................................     29

  Section 4.30  Lien Search ................................................................................     30

  Section 4.31  Litigation .................................................................................     30

  Section 4.32  No Material Adverse Change .................................................................     30

  Section 4.33  Private Placement Number ...................................................................     30

  Section 4.34  Proceedings and Documents ..................................................................     30
</TABLE>

                                       ii
<PAGE>

                             TABLE OF CONTENTS (continued)

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                            <C>
  Section 4.35   No Proposed Tax Law Change ................................................................    30

  Section 4.36   Payment of Fees and Expenses ..............................................................    30

SECTION 5.COVENANTS OF FACILITY LESSEE AND GUARANTOR .......................................................    30

   Section 5.1  Maintenance of Existence ...................................................................    31

   Section 5.2  Merger, Consolidation, Sale of Substantially All Assets ....................................    31

   Section 5.3  Guaranty and Contingent Obligations ........................................................    31

   Section 5.4  Assignment of Rights .......................................................................    32

   Section 5.5  Lessor Manager Fees ........................................................................    32

   Section 5.6  Conduct of Business, Properties, Etc. ......................................................    32

   Section 5.7  Obligations ................................................................................    32

   Section 5.8  Books, Records, Access .....................................................................    32

   Section 5.9  Other Information. .........................................................................    33

   Section 5.10 Warranty of Title to Facility Site. ........................................................    33

   Section 5.11 ERISA ......................................................................................    33

   Section 5.12 Certain Contracts and Agreements ...........................................................    34

   Section 5.13 Certain Costs ..............................................................................    34

   Section 5.14 Limitations on Liens .......................................................................    34

   Section 5.15 Investments ................................................................................    34

   Section 5.16 Survey .....................................................................................    35

   Section 5.17 Regulations ................................................................................    35

   Section 5.18 Partnerships ...............................................................................    35

   Section 5.19 Dissolution ................................................................................    35

   Section 5.20 Termination of Operative Documents .........................................................    35

   Section 5.21 Name and Location ..........................................................................    35
</TABLE>
                                          iii

<PAGE>

                             TABLE OF CONTENTS (continued)

<TABLE>
<CAPTION>
                                                                                   PAGE
<S>                                                                                <C>
   Section 5.22    Use of Facility Site ........................................... 35

   Section 5.23    Abandonment of Facility ........................................ 35

   Section 5.24    Taxes, Other Government Charges and Utility Charges ............ 35

   Section 5.25    Compliance with Laws, Instruments, Etc. ........................ 36

   Section 5.26    PUHCA .......................................................... 36

   Section 5.27    Further Assurances ............................................. 36

   Section 5.28    No Subsidiaries ................................................ 37

   Section 5.29    Permitted Business ............................................. 37

   Section 5.30    Support Arrangements ........................................... 37

   Section 5.31    Insurance ...................................................... 38

   Section 5.32    Tax Status ..................................................... 38

   Section 5.33    Transmission Assets. ........................................... 38

SECTION 6. COVENANTS OF THE OWNER LESSOR, THE TRUST
             COMPANY AND THE LESSOR MANAGER ....................................... 39

   Section 6.1     Compliance with the LLC Agreement .............................. 39

   Section 6.2     Owner Lessor's Liens ........................................... 40

   Section 6.3     Amendments to Operative Documents .............................. 40

   Section 6.4     Transfer of the Owner Lessor's Interest ........................ 40

   Section 6.5     Owner Lessor; Lessor Estate .................................... 40

   Section 6.6     Limitation on Indebtedness and Actions ......................... 40

   Section 6.7     Change of Location ............................................. 40

   Section 6.8     Bankruptcy of Owner Lessor ..................................... 40

SECTION 7.COVENANTS OF THE OWNER PARTICIPANT ...................................... 41

   Section 7.1     Restrictions on Transfer of Member Interest. ................... 41

   Section 7.2     Owner Participant's Liens ...................................... 44

</TABLE>

                                      iv

<PAGE>

                             TABLE OF CONTENTS (continued)

<TABLE>
<CAPTION>
                                                                                             PAGE
<S>                                                                                          <C>
   Section 7.3  Amendments or Revocation of LLC Agreement .................................   44

   Section 7.4  Bankruptcy Filings ........................................................   44

   Section 7.5  Instructions ..............................................................   44

   Section 7.6  Right of First Refusal ....................................................   44

   Section 7.7  Prohibition on Fundamental Changes ........................................   45

   Section 7.8  Appointment of Successor Lessor Manager ...................................   45

   Section 7.9  Cooperation ...............................................................   45

SECTION 8.COVENANTS OF THE INDENTURE TRUSTEE AND THE PASS THROUGH TRUSTEES ................   46

   Section 8.1  Indenture Trustee's Liens .................................................   46

   Section 8.2  Pass Through Trustees' Covenant Not to Transfer Lessor Notes ..............   46

SECTION 9. INDEMNIFICATION ................................................................   46

   Section 9.1  General Indemnity. ........................................................   46

   Section 9.2  General Tax Indemnity. ....................................................   53

SECTION 10. FACILITY LESSEE'S RIGHT OF QUIET ENJOYMENT ....................................   62

SECTION 11 SUPPLEMENTAL FINANCING IMPROVEMENTS; OPTIONAL REFINANCINGS .....................   62

   Section 11.1 Financing Improvements ....................................................   62

   Section 11.2 Optional Refinancing of Lease Debt ........................................   64

   Section 11.3 Cooperation ...............................................................   65

SECTION 12.CERTAIN ADJUSTMENTS TO PERIODIC RENT, TERMINATION VALUE AND OTHER AMOUNTS ......   65

SECTION 13 TRANSFER OF THE FACILITY LESSEE OWNERSHIP; SPECIAL LESSEE TRANSFERS ............   67

   Section 13.1 Transfer of the Facility Lessee Ownership. ................................   67

   Section 13.2 Special Facility Lessee Transfers .........................................   68

SECTION 14. MISCELLANEOUS .................................................................   69

   Section 14.1 Consents; Cooperation .....................................................   69

</TABLE>

                                       v

<PAGE>

                             TABLE OF CONTENTS(continued)
<TABLE>
<CAPTION>
                                                                                             PAGE

<S>                                                                                          <C>
Section 14.2    Successor Owner Lessor ....................................................   69

Section 14.3    Bankruptcy of Lessor Estate ...............................................   69

Section 14.4    Amendments and Waivers ....................................................   69

Section 14.5    Notices ...................................................................   70

Section 14.6    Survival ..................................................................   74

Section 14.7    Successors and Assigns ....................................................   74

Section 14.8    Business Day ..............................................................   74

Section 14.9    Governing Law .............................................................   74

Section 14.10   Severability ..............................................................   74

Section 14.11   Counterparts ..............................................................   74

Section 14.12.  Headings and Table of Contents ............................................   75

Section 14.13   Limitation of Liability. ..................................................   75

Section 14.14.  Consent to Jurisdiction; Waiver of
                  Trial by Jury; Process Agent ............................................   76

Section 14.15   Further Assurances ........................................................   77

Section 14.16   Effectiveness .............................................................   77

Section 14.17   Measuring Life                                                                77

Section 14.18   No Partnership, Etc. ......................................................   77

Section 14.19   Entire Agreement ..........................................................   77

Section 14.20   Public Utility Regulation .................................................   78

Section 14.21.  Confidentiality of Information ............................................   78

Section 14.22   Reliance ..................................................................   79

Section 14.23   Amendments, Etc. ..........................................................   79

</TABLE>

<PAGE>

APPENDICES:

          Appendix A   Definitions and Rules of Interpretation

<TABLE>
<S>                         <C>
SCHEDULES:

     Schedule 1-A           Equity Investment
     Schedule 1-B           Indenture Trustee's Account
     Schedule 1-C           Owner Participant's Account
     Schedule 2             Pricing Assumptions
     Schedule 3.1(m)        Environmental Matters - Hazardous Substances
     Schedule 4.20          Recording and Filings
     Schedule 5.31          Maintenance of Insurance

EXHIBITS:

     Exhibit A          Description of Facility
     Exhibit B-1        Form of Bill of Sale
     Exhibit B-2        Form of Warranty Deed
     Exhibit C          Form of Facility Lease Agreement
     Exhibit D          Form of Facility Site Lease
     Exhibit E          Form of Facility Site Sublease
     Exhibit F          Form of Pass Through Trust Agreement
     Exhibit G          Form of OP Parent Guaranty
     Exhibit H          Form of Calpine Guaranty
     Exhibit I          Form of Collateral Trust Indenture
     Exhibit J          Form of OP Assignment and Assumption Agreement
     Exhibit K          List of Competitors
     Exhibit L          Form of Guarantor Assignment and Assumption Agreement
     Exhibit M          Forms of Consents
</TABLE>

                                      vii

<PAGE>

                            PARTICIPATION AGREEMENT

          This PARTICIPATION AGREEMENT, dated as of October 18, 2001 (as
     amended, supplemented or otherwise modified from time to time, in
     accordance with the provisions hereof, this "Participation Agreement" or
     this "Agreement"), among (i) ROCKGEN ENERGY LLC (herein, together with
     its successors and permitted assigns, called the "Facility Lessee"), a
     limited liability company organized under the laws of the State of
     Wisconsin, (ii) CALPINE CORPORATION, a Delaware corporation, as Guarantor
     (together with its successors and permitted assigns, the "Guarantor")
     under the Calpine Guaranty (RG-1), (the "Calpine Guaranty"), (iii)
     ROCKGEN OL-1, LLC, a Delaware limited liability company (the "Owner
     Lessor"), (iv) SBR OP-1, LLC, a Delaware limited liability company
     (herein, together with its successors and permitted assigns, called the
     "Owner Participant"), (v) STATE STREET BANK AND TRUST COMPANY OF
     CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
     organized and existing under the laws of the United States, not in its
     individual capacity, except as expressly provided herein, but solely as
     trustee under the Collateral Trust Indenture (herein in its capacity as
     trustee under the Collateral Trust Indenture, together with its
     successors and permitted assigns, called the "Indenture Trustee", and
     herein in its individual capacity, together with its successors and
     permitted assigns, called the "Lease Indenture Company"), (vi) STATE
     STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
     national banking association organized and existing under the laws of the
     United States, not in its individual capacity, except as expressly
     provided herein, but solely as trustee under each of the Pass Through
     Trust Agreements (herein in its capacity as trustee under the Pass
     Through Trust Agreements, the "Pass Through Trustees", and herein in its
     individual capacity, together with its successors and permitted assigns,
     the "Pass Through Company"), and (vii) WELLS FARGO BANK NORTHWEST,
     NATIONAL ASSOCIATION, a national banking association organized and
     existing under the laws of the United States, not in its individual
     capacity except as expressly provided herein, but solely as independent
     manager under the LLC Agreement (herein in its capacity as independent
     manager under the LLC Agreement, together with its successors and
     permitted assigns, called the "Lessor Manager", and herein in its
     individual capacity, together with its successors and permitted assigns,
     called the "Trust Company").

                                  WITNESSETH:

          WHEREAS, (a)   Facility Lessee, an indirect, wholly-owned subsidiary
of Calpine, will, as of the Closing Date, own a 520 MW gas-fired combined cycle
merchant power plant located near Christiana, Wisconsin and more fully
described in Exhibit A hereto ("Facility");

          WHEREAS, Facility Lessee desires to sell to the Owner Lessor the
Undivided Interest pursuant to the Bill of Sale and lease to the Owner Lessor
the Ground Interest pursuant to the Facility Site Lease, and to lease the
Undivided Interest and sublease the Ground Interest

<PAGE>

from the Owner Lessor pursuant to the Facility Lease and the Facility Site
Sublease, respectively;

          WHEREAS, the Owner Participant desires to cause the Owner Lessor to
purchase such Undivided Interest from the Facility Lessee pursuant to the Bill
of Sale, to lease the Ground Interest from the Facility Lessee pursuant to the
Facility Site Lease, and to lease the Undivided Interest and sublease the
Ground Interest to the Facility Lessee pursuant to the Facility Lease and
Facility Site Sublease, respectively;

          WHEREAS, the Owner Participant has entered into the LLC Agreement,
pursuant to which the Owner Participant has authorized the Owner Lessor to,
among other things and subject to the terms and conditions thereof and hereof,
issue the Lessor Notes and sell such Lessor Notes to the relevant Pass Through
Trust, purchase the Undivided Interest from the Facility Lessee pursuant to the
Bill of Sale, lease the Ground Interest from Facility Lessee pursuant to the
Undivided Interest and the Ground Interest to the Facility Lessee pursuant to
the Facility Lease and Facility Site Lease and lease the Undivided Interest and
sublease the Ground Interest to the Facility Lessee pursuant to the Facility
Lease and the Facility Site Sublease, respectively;

          WHEREAS, in order to provide a portion of the Purchase Price payable
by the Owner Lessor in respect of its acquisition of the Undivided Interest
pursuant to the Bill of Sale, the Owner Participant is willing to make an
investment in the Owner Lessor in an amount equal to the Equity Investment, all
in the manner and subject to the conditions set forth herein;

          WHEREAS, on the Closing Date, the Owner Lessor intends to sell the
Lessor Notes to the relevant Pass Through Trust and to grant to the Indenture
Trustee liens and security interests in the Indenture Estate to secure its
obligations thereunder;

          WHEREAS, concurrently with the execution and delivery of this
Participation Agreement, each Pass Through Trustee has entered into a Pass
Through Trust Agreement, pursuant to which such Pass Through Trustee has been
directed to use the Proceeds to purchase the Lessor Notes from the Owner Lessor
on the Closing Date;

          WHEREAS, concurrently with the execution and delivery of this
Participation Agreement, the Facility Lessee has entered into the Certificate
Purchase Agreement with the Initial Purchasers and the Pass Through Trusts
pursuant to which the Initial Purchasers will purchase the Certificates on the
Closing Date from the Pass Through Trusts;

          WHEREAS, concurrently with the execution and delivery of this
Participation Agreement, the OP Guarantor has executed and delivered the OP
Parent Guaranty pursuant to which the OP Guarantor guarantees the payment and
performance obligations of the Owner Participant under the Operative Documents;

          WHEREAS, pursuant to the Calpine Guaranty, Calpine has guaranteed all
of the obligations of the Facility Lessee under the Participation Agreement and
as of the Closing Date shall guarantee all of the obligations of the Facility
Lessee under the other Operative Documents to which the Facility Lessee is a
party; and

                                       2

<PAGE>

          WHEREAS, the parties hereto desire to consummate the transactions
contemplated hereby.

          NOW, THEREFORE, in consideration of the foregoing premises, the
mutual agreements herein contained and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

DEFINITIONS; INTERPRETATION OF THIS PARTICIPATION AGREEMENT

          The capitalized terms used in this Participation Agreement, including
the foregoing recitals, and not otherwise defined herein shall have the
respective meanings specified in Appendix A hereto. The rules of interpretation
set forth in Appendix A shall apply to terms used in this Participation
Agreement and specifically defined herein.

PARTICIPATION; CLOSING DATE; TRANSACTION COSTS

Agreements to Participate. Subject to the terms and conditions of this
Agreement, and in reliance on the agreements, representations and warranties
made herein, the parties agree to participate in the transactions described in
this Section 2.1 on the Closing Date as follows:

the Owner Participant agrees to provide funds in an amount sufficient to (i)
     fund the Equity Investment and (ii) pay the Transaction Costs which the
     Owner Lessor is responsible to pay pursuant to Section 2.3(a) hereof
     (collectively, the "Owner Participant's Commitment");

the Facility Lessee agrees to sell the Undivided Interest to the Owner Lessor
     on the terms and conditions set forth in the Bill of Sale and to lease the
     Ground Interest to the Owner Lessor on the terms set forth in the Facility
     Site Lease; the Owner Lessor agrees to buy the Undivided Interest and to
     lease the Ground Interest from the Facility Lessee, and each agrees to
     execute and deliver the Bill of Sale and the Facility Site Lease;

the Owner Lessor agrees to lease the Undivided Interest to the Facility Lessee
     and to sublease the Ground Interest from the Facility Lessee on the terms
     and conditions set forth in the Facility Lease and Facility Site Sublease;
     the Facility Lessee agrees to lease the Undivided Interest and sublease
     the Ground Interest from the Owner Lessor, and each agrees to execute and
     deliver the respective Facility Lease and the Facility Site Sublease;

the Indenture Trustee agrees to act as the trustee under and enter into the
     Collateral Trust Indenture pursuant to which the Lessor Notes will be
     issued;

the Pass Through Trustees agree to use the Proceeds from the sale of the
     Certificates by the Pass Through Trusts to purchase the Lessor Notes from
     the Owner Lessor;

the Owner Lessor agrees to sell to the relevant Pass Through Trusts the
     applicable Lessor Notes and to grant to the Indenture Trustee, for the
     benefit of the Pass Through Trustees, certain liens and security interests
     in the Indenture Estate to secure its obligations thereunder;

the OP Guarantor will guarantee the performance and payment obligations of the
     Owner Participant under the Operative Documents pursuant to the OP Parent
     Guaranty;

                                       3

<PAGE>

the Owner Lessor agrees to use the funds received from the Owner Participant
     and the Pass Through Trusts pursuant to clause (a)(i) and (e),
     respectively, of this Section 2.1 on the Closing Date to pay the Purchase
     Price;

the Owner Participant and the Facility Lessee agree to enter into the Tax
     Indemnity Agreement; and

the parties agree to enter into the agreements referred to above and the other
     Operative Documents, and to cause each Affiliate thereof that is not a
     party hereto but is a party to an Operative Document to enter into such
     Operative Document, as the case may be (in each case, if attached as an
     Exhibit hereto, in substantially the form attached hereto).

Closing Date; Procedure for Participation.

Closing Date. The closing of the transactions contemplated hereby (the
     "Closing") shall take place after 10:00 a.m., New York City time, on the
     Scheduled Closing Date or such other date as the parties hereto shall
     mutually agree (the "Closing Date"), at the offices of Dewey Ballantine
     LLP or at such other place as the parties hereto shall mutually agree.

Procedures for Funding. Unless the Closing Date shall have been postponed
     pursuant to Section 2.2(c), subject to the terms and conditions of this
     Participation Agreement, the Owner Participant shall make the Owner
     Participant's Commitment available not later than 10:00 a.m., New York
     City time, on the Scheduled Closing Date, by transferring or delivering
     such amount, in funds immediately available on such Scheduled Closing
     Date, to the Owner Lessor in New York, New York.

Postponement of the Closing. The Scheduled Closing Date may be postponed from
     time to time for any reason if the Facility Lessee gives the Owner
     Participant, the Owner Lessor, the Indenture Trustee and the Pass Through
     Trustees a facsimile or telephonic (confirmed in writing) notice of such
     postponement and notice of the date to which the Closing has been
     postponed, such notice of postponement to be received by each party no
     later than noon, New York City time, on the Scheduled Closing Date. If,
     prior to receipt of a postponement notice under this Section 2.2(c), the
     Owner Participant shall have provided funds in accordance with Section
     2.2(b), such funds shall be returned to the Owner Participant, as soon as
     reasonably practicable but in no event later than the Business Day
     following the date of such notice, unless the Owner Participant shall have
     otherwise directed. All funds made available pursuant to Section 2.2(b)
     will be held by the Owner Lessor in trust for the Owner Participant and
     shall not be part of the Indenture Estate or the Lessor Estate, shall be
     invested by the Owner Lessor in accordance with clause (d) below and such
     funds shall remain the sole property of the Owner Participant unless and
     until released by the Owner Participant and made available to the Owner
     Lessor and applied to pay the Purchase Price or Transaction Costs or
     returned to the Owner Participant, as provided in this Agreement.

Investment of Funds. If, on the Scheduled Closing Date, the Owner Participant
     has made the Owner Participant's Commitment available to the Owner Lessor
     in accordance with Section 2.2(b), the Closing does not occur on such date
     and the Owner Lessor is unable to return such funds to the Owner
     Participant on such date, the Owner Lessor shall, subject to Section
     2.2(c)

                                       4

<PAGE>

     above, use reasonable efforts to invest such funds from time to time at
     the written direction of Calpine, and at Calpine's sole expense and risk,
     in Permitted Investments until such funds can be returned to the Owner
     Participant. If, on the Scheduled Closing Date, the Owner Participant has
     made the Owner Participant's Commitment available to the Owner Lessor in
     accordance with Section 2.2(b), the Closing does not occur on such date
     and the Owner Lessor has not returned such funds to the Owner Participant
     on or before 1:00 p.m., New York City time, on such date, then Calpine
     shall reimburse the Owner Participant for loss of the use of such funds
     at the Applicable Rate for each day, from and including the day that such
     funds were made available to the Owner Lessor by the Owner Participant
     to, but excluding the earlier of (i) the day that such funds have been
     returned to the Owner Participant pursuant to Section 2.2(c) (funds
     received by the Owner Participant after 1:00 p.m., New York City time, of
     any day shall be deemed to be returned on the next succeeding Business
     Day) and (ii) the Closing Date. Subject to payment for the account of the
     Owner Participant of any reimbursement for loss of use of funds due to it
     at the Applicable Rate, any net gain realized on the investment of such
     funds (including interest) shall be paid to Calpine by the Owner Lessor
     on the earlier of (i) the date such funds are returned to the Owner
     Participant pursuant to Section 2.2(c) and (ii) the Closing Date. The
     Owner Lessor shall not be liable for any interest on or loss resulting
     from such investments and, if such funds are made available to the Owner
     Lessor and utilized to pay the Purchase Price or Transaction Costs on the
     Closing Date, Calpine shall reimburse the Owner Lessor for any net loss
     realized on the investment of such funds. If such funds are not so
     utilized, Calpine shall, in addition to its obligation to reimburse the
     Owner Participant for loss of use as provided above, reimburse the Owner
     Participant on the date such funds are returned to the Owner Participant
     for any net loss realized on the investment of such funds. In order to
     obtain funds for payment of the Purchase Price or Transaction Costs or to
     return funds made available to the Owner Lessor by the Owner Participant,
     the Owner Lessor is authorized to sell any investments or obligations
     purchased as aforesaid.

Expiration of Commitments. The obligation of the Owner Participant to make
     its Equity Investment shall expire at 5:00 p.m., New York City time, on
     December 31, 2001. If the Closing Date has not occurred on or before
     December 31, 2001 the Transaction Parties shall have no obligation to
     consummate the transactions contemplated under this Agreement and, except
     as provided in Sections 2.3, 9.1 and 9.2, all obligations of the
     Transaction Parties shall cease and terminate.

Transaction Costs.

If the transactions contemplated by this Agreement are consummated, all
     Transaction Costs up to an amount equal to US$1,125,000, which shall be
     substantiated or otherwise supported in reasonable detail (provided that
     legal bills may be redacted to preserve attorney-client privilege), shall
     be paid within 10 days after the Closing Date by the Owner Lessor (with
     funds provided by the Owner Participant), assuming all invoices have been
     approved by Calpine and received by the Owner Lessor by 7 days after the
     Closing Date. All other Transaction Costs, fees, costs and expenses
     incurred by the Facility Lessee, the Owner Lessor and the Owner
     Participant shall be paid by Calpine. If the Overall Transaction is not
     consummated for any reason (including as a result of the Facility Lessee
     terminating this Agreement pursuant to Section 12(a)), then Calpine shall
     bear all Transaction Costs;

                                       5

<PAGE>

     provided, however, that Calpine shall not be obligated to pay Transaction
     Costs incurred by the Owner Participant if the Overall Transaction is not
     consummated on the basis of the provisions of this Agreement due to a
     failure of the Owner Participant to satisfy any condition to the Closing
     required to be satisfied by the Owner Participant.

Following the Closing Date, the Facility Lessee will be responsible for,
     and will pay as Supplemental Rent on an After-Tax Basis to the Owner
     Participant, the annual administration fees, if any, and expenses
     (including reasonable and documented fees and expenses of its outside
     counsel) of the Lessor Manager, the Indenture Trustee (as such and in its
     individual capacity) and the Pass Through Trustees.

REPRESENTATIONS AND WARRANTIES

Representations and Warranties of the Facility Lessee. The Facility Lessee
represents and warrants that as of the date of execution and delivery hereof
and as of the Closing Date:

Due Incorporation, etc. The Facility Lessee is a limited liability company
     duly organized, validly existing, and in good standing under the laws of
     the State of Wisconsin. The Facility Lessee is duly licensed or qualified
     and in good standing (as evidenced by a certificate of status issued by
     the Wisconsin Department of Financial Institutions) in each jurisdiction
     where the character of its properties or the nature of its activities
     makes such qualification necessary, and the Facility Lessee has the power
     and authority to (x) own or hold under lease the property it purports to
     own or hold under lease, (y) carry on its business as now being conducted
     and as presently proposed to be conducted and (z) take all actions as may
     be necessary to consummate the transactions contemplated hereunder and
     under the other Operative Documents to which each is a party. The
     Facility Lessee is an indirect wholly-owned subsidiary of Calpine.

Authorization; Enforceability, etc. This Agreement and each of the other
     Operative Documents to which the Facility Lessee is or will be a party
     have been, or when executed and delivered will be, duly authorized,
     executed and delivered by all necessary action by the Facility Lessee,
     and, assuming the due authorization, execution and delivery by each other
     party thereto, this Agreement constitutes and, when executed and
     delivered, the other Operative Documents to which the Facility Lessee is
     or will be a party will constitute the legal, valid and binding
     obligations of the Facility Lessee, enforceable against the Facility
     Lessee in accordance with its terms, except as the same may be limited by
     applicable bankruptcy, insolvency, reorganization, moratorium or other
     similar laws affecting the rights of creditors generally and by general
     principles of equity.

Non-Contravention.   (1)   The execution, delivery and performance by the
     Facility Lessee of this Agreement and each of the other Operative
     Documents to which it is or will be a party, the consummation by the
     Facility Lessee of the transactions contemplated hereby and thereby, and
     compliance by the Facility Lessee with the terms and provisions hereof
     and thereof, do not and will not (i) contravene any Applicable Law
     binding on the Facility Lessee or its property, or its organizational
     documents, (ii) constitute a default by the Facility Lessee under, or
     result in the creation of any Lien upon the property of the Facility
     Lessee (other than pursuant to any Operative Document) under any
     indenture, mortgage or other material

                                       6

<PAGE>

     contract, agreement or instrument to which the Facility Lessee is a party
     or by which the Facility Lessee or any of its property is bound, (iii)
     contravene any Organic Document of the Facility Lessee or (iv) require
     the consent or approval of any Person which has not already been
     obtained, in each case with respect to clauses (i), (ii) and (iv) above,
     which would reasonably be expected to have a Material Adverse Effect.

          (2)   Neither the sale of the Undivided Interest or the lease of the
Ground Interest by Facility Lessee to the Owner Lessor, nor the grant by the
Owner Lessor to the Indenture Trustee of the Liens and security interests in
the Undivided Interest and the applicable Operative Documents executed in
connection therewith to secure its obligations thereunder does or will
constitute a default by the Facility Lessee or the Owner Lessors under the
Ownership and Operation Agreement.

Government Actions. The Facility Lessee has all Permits with or from any
     Governmental Entity or under any Applicable Law required (x) for the due
     execution, delivery or performance by the Facility Lessee of this
     Agreement, and the other Operative Documents to which the Facility Lessee
     is or will be a party or (y) without regard to any other transactions or
     other actions of the Owner Participant, the Owner Lessor or any Affiliate
     of any of them or any assignee or transferee of any of the Owner
     Participant, the Owner Lessor (or any Affiliate of any transferee or
     assignee) and assuming that none of the Owner Participant, the Owner
     Lessor or any Affiliate of any of them or any assignee or transferee of
     any of the Owner Participant (or any Affiliate of any such transferee or
     assignee) is an "electric utility" or a "public utility" or a "public
     utility holding company" or any similar entity subject to public utility
     regulation under any Applicable Law immediately prior to the Closing,
     with respect to the participation by the Owner Participant, the Owner
     Lessor in the Overall Transaction, other than (i) any Permit where the
     failure to obtain or maintain such Permit would not be reasonably likely
     to result in a Material Adverse Effect, (ii) the FERC Orders, (iii) as
     may be required under Applicable Law providing for the supervision or
     regulation of the Owner Participant, the Owner Lessor or any Affiliate of
     any of them as a result of investing, lending or other commercial
     activity in which the Owner Participant, the Owner Lessor or any
     Affiliate of any of them is or may be engaged other than the transactions
     contemplated hereby or by any of the other Operative Documents, (iv) as
     may be required under existing Applicable Laws to be obtained, given,
     accomplished or renewed at any time, or from time to time, in each case,
     after the Closing Date and which the Facility Lessee has no reason to
     believe will not be timely obtained and the lack of which would not
     reasonably be expected to have a Material Adverse Effect or involve any
     danger of criminal or material civil liability being incurred by the
     Owner Participant, the Owner Lessor, the Indenture Trustee or the Pass
     Through Trustees, (v) in connection with any modification to or
     rebuilding or replacement of the Facility or any portion thereof that may
     occur in the future, (vi) as may be required in connection with any
     refinancing of the Lessor Notes or the Certificates or the issuance of
     Additional Lessor Notes or Additional Certificates, (vii) as may be
     required in consequence of any transfer of the Member Interest or any
     transfer of the Undivided Interest or the Owner Lessor's Interest, or any
     part thereof by the Owner Lessor or the exercise by any such party of
     dispossessory remedies under the Operative Documents or any
     relinquishment of the use or operation of the Facility by the Facility
     Lessee, (viii) appropriate filing and recording to perfect the Lien of
     the Collateral Trust Indenture, if required, and the ownership and

                                      7

<PAGE>

     leasehold interests conveyed pursuant to this Agreement, or (ix) as may
     be required under any Applicable Law enacted or adopted after the date
     hereof.

Litigation. There is no pending or, to the Actual Knowledge of the Facility
     Lessee, threatened, action, suit, investigation or proceeding against the
     Facility Lessee or any other Calpine Party before any Governmental Entity
     which (i) questions the validity of the Operative Documents or the
     ability of the Facility Lessee or such other Calpine Party to perform its
     obligations under the Operative Documents to which the Facility Lessee or
     such other Calpine Party is or will be a party or (ii) if determined
     adversely to it, could reasonably be expected to have a Material Adverse
     Effect or otherwise materially adversely affect the Undivided Interest
     leased by the Facility Lessee.

No Defaults. Neither the Facility Lessee nor any other Calpine Party is
     in default, and no condition exists that with notice or lapse of time or
     both would constitute a default, under any mortgage, indenture or other
     contract, agreement or instrument to which the Facility Lessee or such
     other Calpine Party is a party or by which the Facility Lessee or such
     other Calpine Party or its property is bound in any such case where any
     such default, individually or in the aggregate, would reasonably be
     expected to have a Material Adverse Effect.

Location of Chief Executive Office and Principal Place of Business, etc.   (1)
     The chief executive office and principal place of business of the
     Facility Lessee and the office where the Facility Lessee keeps its
     company records concerning the Facility, the Undivided Interest, the
     Ground Interest, the Facility Site and the Operative Documents is located
     at: c/o Calpine Corporation, 50 West San Fernando Street, 5th Floor, San
     Jose, CA 95113.

          (2)   The Facility is located on the Facility Site.

          (3)   The condition of the Facility is substantially identical
to the condition it was in when inspected by the Appraiser in connection with
the Closing Appraisal.

Title; Liens.   (1)   On and before the Closing Date, the Facility Lessee has
     (i) good and valid title to the Facility, free and clear of all Liens
     other than Permitted Closing Date Liens, and (ii) good and valid title to
     the Facility Site free and clear of all Liens other than Permitted
     Closing Date Liens.

          (2)   Upon execution and delivery of the Operative Documents and
recording or filing (as appropriate) of the instruments and documents referred
to in Part I of Schedule 4.20 in accordance with Section 4.20, (A) good and
valid title to the Undivided Interest will be duly, validly and effectively
conveyed and transferred to the Owner Lessor free and clear of all Liens other
than Permitted Closing Date Liens, and (B) good and valid leasehold interest in
the Ground Interest will be duly, validly and effectively granted to the Owner
Lessor upon the terms and conditions in the corresponding Facility Site Lease,
free and clear of all Liens other than Permitted Closing Date Liens.

          (3)   When duly authorized, executed and delivered by each of
the parties thereto, the Collateral Trust Indenture will create a valid and,
when the filings and recordings to be made pursuant to Section 4.20 have been
made, first priority perfected Lien in favor of the Indenture Trustee in the
Indenture Estate and no filing, recording, registration or notice with, or

                                       8

<PAGE>

payment of any fees to, any federal or state Governmental Entity will be
necessary to establish or, except for such filings and recordings as will be
made pursuant to Section 4.20, to perfect, or give record notice of, the Lien
in favor of the Indenture Trustee in the Indenture Estate to the extent such
Lien may be perfected by filings or recordings.

          (4)   None of the Permitted Encumbrances will, on and after the
Closing, interfere with the use, operation or possession of the Facility (as
contemplated by the Operative Documents) or the use of or the exercise by the
Owner Lessor of its rights under the Bill of Sale or the Facility Site Lease or
the Facility Lease, in a manner which could reasonably be expected to have a
Material Adverse Effect.

Regulation U, etc. No Calpine Party is engaged principally, or as one of its
     principal activities, in the business of extending credit for the purpose
     of purchasing or carrying margin stock (as defined in Regulations T, U or
     X of the Federal Reserve Board), and no part of the proceeds of Lessor
     Notes or the Equity Investment will be used by any Calpine Party,
     directly or indirectly, for the purpose of buying or carrying any margin
     stock within the meaning of Regulation U of the Board of Governors of the
     Federal Reserve System (12 CFR 221), or for the purpose of buying or
     carrying or trading in any securities under such circumstances as to
     involve such Person in a violation of Regulation X of said Board (12 CFR
     224) or to involve any broker or dealer in a violation of Regulation T of
     said Board (12 CFR 220).

Holding Company Act. The Facility Lessee is not an "electric utility
     company," a "holding company", a "subsidiary company" of a "holding
     company" or an "affiliate" of a "holding company" within the meaning of
     the Holding Company Act, and the execution, delivery and performance of
     the Operative Documents to which the Facility Lessee is or will be a
     party will not subject the Facility Lessee to such regulation under the
     Holding Company Act and do not violate any provision of the Holding
     Company Act or any rule or regulation thereunder.

Investment Company Act. The Facility Lessee is not an "investment company"
     or a company controlled by an "investment company" within the meaning of
     the Investment Company Act of 1940.

Securities Act. Neither the Facility Lessee nor anyone authorized by it has
     directly or indirectly offered or sold any interest in the Member
     Interest, the Lessor Notes or the Certificates or any part thereof, or in
     any similar security or lease, or in any security or lease the offering
     of which for the purposes of the Securities Act would be deemed to be
     part of the same offering as the offering of the Member Interest, the
     Lessor Notes or the Certificates or any part thereof or solicited any
     offer to acquire any of the same, in any such case, in violation of the
     registration requirements of Section 5 of the Securities Act.

Environmental Matters. Except as set forth in Schedule 3.1(m):

          (1)   The Facility Lessee has not received or has Actual
Knowledge of any written notice, letter, citation, order, warning, complaint,
inquiry, claim or demand from any Governmental Entity or any other Person that:
(i) there has been a Release, or there is a threat of Release, of Hazardous
Substances in, on, under or from the Facility, or the Facility Site; (ii) the

                                      9

<PAGE>

Facility Lessee or any other Calpine Party is or is asserted to be liable, in
whole or in part, for the costs of cleaning up, remedying or responding at any
location (including any location at which any Hazardous Substances have been
generated, stored, treated or disposed by or on behalf of the Facility Lessee
or such other Calpine Party) to a Release or threatened Release of any
Hazardous Substance generated, used or stored at or Released in, on, under or
from the Facility or the Facility Site; (iii) the Facility or the Facility Site
is subject to a Lien in favor of any Governmental Entity in response to a
Release or threatened Release of Hazardous Substances or (iv) the Facility or
the Facility Site is or is asserted to be in violation of or not in compliance
with any Environmental Law, in any case with respect to clauses (ii), (iii) or
(iv), which could reasonably be expected to have a Material Adverse Effect;

          (2)   The Facility Lessee and the other Calpine Parties are in
compliance with and have complied with all Environmental Laws, except to the
extent that failure to so comply could not reasonably be expected to have a
Material Adverse Effect; and

          (3)   To the Facility Lessee's Actual Knowledge, there is not and
has not been any Environmental Condition (A) at, on, under or from the Facility
or the Facility Site, or (B) at, on, under or from any other location resulting
from or arising in connection with the operation by any Person of the Facility
or the Facility Site, that in each case could reasonably be expected to have a
Material Adverse Effect or involve any danger of (i) foreclosure, sale,
forfeiture or loss of, or imposition of a material lien on, such Facility or
the Facility Site, (ii) the impairment of the ownership (or leasehold or
easement interest in), use, operation or, maintenance of the Facility or
Facility Site in any material respect, or (iii) any criminal or material civil
liability being incurred by the Owner Participant, the Owner Lessor, the Lessor
Manager, the Indenture Trustee or the Pass Through Trustees.

          (4)   All environmental permits necessary to own, operate, lease or
maintain the Facility and the Facility Site in accordance with the Operative
Documents and the Ownership and Operation Agreement and Environmental Laws have
been obtained on behalf of the Owner Lessor or by the Facility Lessee and they
are final, in proper form, and in full force and effect, with all appeal
periods expired, and the Facility Lessee is in compliance with the provisions
of all such permits, except where the failure to obtain, maintain the
effectiveness of, or comply with such permits would not reasonably be expected
to have a Material Adverse Effect or involve any danger of (i) foreclosure,
sale, forfeiture or loss of, or imposition of a material lien on, the Facility
or the Facility Site, (ii) the impairment of the ownership (or leasehold or
easement interest in), use, operation or maintenance of the Facility or the
Facility Site in any material respect, or (iii) any criminal or material civil
liability being incurred by the Owner Participant, the Owner Lessor, the
Indenture Trustee, the Lessor Manager, the Pass Through Trustees or the
Certificateholders.

Operation and Use. Assuming the Facility will continue to be operated
     substantially as operated as of the Closing Date, the rights and
     interests to be possessed on the Closing Date by the Facility Lessee with
     respect to the Undivided Interest and the Ground Interest and based upon
     the Facility Lessee's reasonable expectations and on Applicable Law in
     effect on and as of the Closing Date, the rights and interests made
     available to the Owner Lessor pursuant to the Operative Documents and the
     rights contemplated by the Facility Lease to be made available under such
     Operative Documents, permit on a commercially practicable basis

                                      10

<PAGE>

     during the Facility Lease Term and the period following the expiration or
     termination of the Facility Lease Term, as applicable, until the end of
     the Facility's useful life as set forth in the Closing Appraisal, (i) the
     location, occupation, interconnection, maintenance and repair of each
     Facility, (ii) the use, operation and possession of the Facility, (iii)
     as of the Closing Date, the use, operation, possession, maintenance,
     replacement, renewal and repair of all Improvements required to be made
     to the Facility, (iv) adequate ingress to and egress from the Facility in
     connection with the ownership, use, operation, possession, maintenance or
     repair of the Facility and (v) the transmission of electricity from the
     Facility substantially in the manner currently transmitted as of the
     Closing Date.

Tax Returns. The Facility Lessee and each other Calpine Party has filed all
     federal, state and local income tax returns which are required to be
     filed by it and has paid all Taxes shown to be due and payable on such
     returns or pursuant to any assessment received by it (other than Taxes
     and assessments the payment of which is being contested in good faith by
     such Person and with respect to which appropriate accounting reserves
     have to the extent required by GAAP been set aside) and neither the
     Facility Lessee nor any other Calpine Party has any Actual Knowledge of
     any actual or proposed assessment in connection therewith which, either
     in any case or in the aggregate, would reasonably be expected to have a
     Material Adverse Effect.

Jurisdiction. In accordance with Section 14.14 hereof, the Facility Lessee
     has validly submitted to the jurisdiction of the Supreme Court of the
     State of New York, New York County and the United States District Court
     for the Southern District of New York.

Applicable Law. The Facility Lessee is in compliance with all Applicable Law,
     including all applicable zoning, use and building codes, laws,
     regulations and ordinances relating to the operations, maintenance, use,
     lease or ownership of the Facility and the Facility Site, except where
     the noncompliance would not reasonably be expected to have a Material
     Adverse Effect or involve any danger of (i) foreclosure, sale, forfeiture
     or loss of, or imposition of a material lien on, the Facility or the
     Facility Site, (ii) the impairment of the ownership (or leasehold or
     easement interest in), use, operation or maintenance of the Facility or
     the Facility Site in any material respect, or (iii) any criminal or
     material civil liability being incurred by the Owner Participant, the
     Owner Lessor, the Lessor Manager, the Indenture Trustee or the Pass
     Through Trustees, including subjecting the Owner Participant or the Owner
     Lessor to regulation as a public utility under Applicable Law. None of
     the Calpine Parties is in default of any judgments, orders or decrees of
     any Governmental Entity relating to such Facility or the Facility Site.

ERISA. Assuming the accuracy of the representations of the other parties
     hereto and the Certificateholders in the Certificates, the execution and
     delivery of the Operative Documents and the issuance and sale of the
     Lessor Notes under the Collateral Trust Indenture and the Certificates
     under the Pass Through Trust Agreements will be exempt from, or will not
     involve any transaction which is subject to, the prohibitions of either
     Section 406 of ERISA or Section 4975 of the Code and will not involve any
     transaction in connection with which a penalty could be imposed under
     Section 502(i) of ERISA or a tax could be imposed pursuant to Section
     4975 of the Code.

                                      11

<PAGE>

Insurance. All insurance required to be obtained pursuant to Schedule 5.31
     is in full force and effect.

No Default; No Event of Loss; Burdensome Buyout. No Lease Default or Lease
     Event of Default, exists or will exist upon execution and delivery of the
     Operative Documents. No Event of Loss exists or will exist upon the
     execution and delivery of the Operative Documents. To the Actual
     Knowledge of the Facility Lessee, no Burdensome Buyout Event has occurred
     or will occur upon the execution and delivery of the Operative Documents
     and the Facility Lessee does not have Actual Knowledge of any event that
     could reasonably be expected to result in a Burdensome Buyout Event.

Special Assessments. There is no action pending or, to the Facility Lessee's
     Actual Knowledge, threatened by a Governmental Entity or other Person to
     specially assess the Facility or the Facility Site for any public
     improvements constructed or to be constructed which would reasonably be
     expected to have a Material Adverse Effect.

Utility Services. The Facility and the Facility Site have available all
     services of public utilities necessary for use and operation of the
     Facility as currently being used and as contemplated by the applicable
     Operative Documents, except where the failure to have any such services
     or public utilities available would not result in a material adverse
     effect with respect to the Facility.

Eminent Domain. There is no action pending with respect to, or threatened by
     a Governmental Entity or other Person to initiate, a Requisition of any
     of the Undivided Interest, the Facility, the Ground Interest or the
     Facility Site, which would reasonably be expected to have a Material
     Adverse Effect.

Permitted Liens. There are no violations or proceedings or actions pending or
     threatened, with respect to any easements, reciprocal easement agreements,
     declarations, development agreements or recorded restrictions or covenants
     relating to the Facility or the Facility Site, which would reasonably be
     expected to have a Material Adverse Effect.

Access; Egress. Access to and egress from the Facility and the Facility Site
     is available and provided by public streets and/or private roads fully
     accessible by the Facility Lessee. To the Facility Lessee's Actual
     Knowledge, there are no plans of any Governmental Entity to change the
     highway or road system in the vicinity of the Facility or the Facility
     Site, or to restrict or change access from any such highway or road to
     the Facility or the Facility Site, in either case, in any manner which
     would reasonably be expected to have a Material Adverse Effect.

Notices. To the Facility Lessee's Actual Knowledge, (i) there are no
     outstanding written notices from any Governmental Entity of any violation
     of, or that the Facility or Facility Site is not in compliance with, any
     and all Applicable Laws relating to the Facility and Facility Site or the
     ownership, use, occupancy and operation thereof and (ii) there are no
     outstanding written notices that any repairs or work or capital
     improvements are required to be done at or with respect to the Facility
     or Facility Site by any Governmental Entity or by any insurance company
     which currently issues any insurance to the Facility Lessee or by any
     board of fire

                                      12

<PAGE>

     underwriters or other body exercising similar functions, except, in
     either case with respect to (i) or (ii) above, where such violation,
     noncompliance or repairs could not reasonably be expected to have a
     Material Adverse Effect.

Business. The Facility Lessee has not conducted any business other than the
     acquisition, construction, development, ownership, operation,
     maintenance, leasing and financing of the Facility and Facility Site and
     activities incidental thereto.

Intellectual Property. To the Actual Knowledge of the Facility Lessee, the
     Facility Lessee has the right to use all patents, trademarks, service
     marks, trade names, copyrights, licenses and other rights which are
     necessary for the operation of its business as presently conducted and to
     transfer all such rights to the Owner Lessor subsequent to termination of
     the Facility Lease, except to the extent failure to possess such rights
     would not reasonably be likely to result in a Material Adverse Effect.

Land Not in Flood Zone. No portion of the Facility or the Facility Site
     includes improved real property that is located in an area that has been
     identified by the Director of the Federal Emergency Management Agency as
     an area having special flood hazards and in which flood insurance has
     been made available under the National Flood Insurance Act of 1968, as
     amended.

No Fraudulent Conveyances. The Facility Lessee is consummating the
     transactions contemplated hereby (including the transfer of certain of
     its assets and properties to the Owner Lessor) in good faith and without
     any intent to defraud creditors of the Facility Lessee or subsequent
     purchasers. The execution and delivery of the Operative Documents to
     which the Facility Lessee is a party will not render the Facility Lessee
     insolvent under GAAP or leave the Facility Lessee with assets whose
     present fair valuation of assets is less than the present fair valuation
     of the Facility Lessee's debts. As used in this Section 3.1(dd), "debts"
     includes any and all liabilities, whether matured or unmatured,
     liquidated or unliquidated, absolute, fixed or contingent, and whether or
     not such liabilities are required under GAAP to be shown on the Facility
     Lessee's balance sheet. The execution and delivery of the Operative
     Documents to which the Facility Lessee is a party will not leave it with
     property remaining in its hands which would constitute unreasonably small
     assets or capital, and the Facility Lessee has and, after giving effect
     to such transactions will have, an adequate amount of assets and capital
     to engage in its business now and in the future, based on the actual and
     anticipated needs for capital of the businesses anticipated to be
     conducted by the Facility Lessee, and based upon the other information
     described herein. After giving effect to the transactions contemplated
     under the Operative Documents, the Facility Lessee will be able to pay
     all of its debts and liabilities, including unrecorded contingent
     liabilities, as they mature, the Facility Lessee will have positive cash
     flow after paying all of its scheduled and anticipated debt as it
     matures, and the Facility Lessee will realize sufficient monies from
     current assets in the ordinary and usual course of business to pay
     recurring current debt, short-term debt and long-term debt as such debts
     mature.

No Additional Fees. Except for the fees referred to in clause (xiv) and (xv)
     of the definition of Transaction Costs, the Facility Lessee has not paid
     or become obligated to pay any fee or

                                      13

<PAGE>

     commission to any broker, finder or intermediary for or on account of
     arranging the financing of the transactions contemplated by the Operative
     Documents.

Status under Certain Statutes. Neither the Facility Lessee, the Owner
     Participant, the Owner Lessor, The Lessor Manager, the Indenture Trustee,
     the Pass Through Trustees nor any Certificateholder solely as a result of
     execution, delivery and performance of, and the consummation of the
     transactions contemplated by the Operative Documents shall be or become
     (i) subject to regulation as a "public utility company," "holding
     company," an "affiliate" of a "holding company" or a "subsidiary company"
     of a "holding company" within the meaning of PUHCA or (ii) a "public
     utility" (except that the Facility Lessee will be a public utility
     subject to the Federal Power Act with authority to sell wholesale
     electricity at market-based rates and with waivers of regulations
     customarily granted to a public utility that sells wholesale power at
     market-based rates), a "transmitting utility," or an "electric utility"
     within the meaning of the Federal Power Act, (iii) subject to state
     regulation of rates or organizational requirements for electric utilities.

Material Omission. Neither the Offering Circular (including any preliminary
     offering circular approved by the Facility Lessee for distribution) nor
     the written information furnished to the Owner Lessor, the Owner
     Participant, the Lessor Manager, the Indenture Trustee and the Pass
     Through Trustees by or on behalf of the Facility Lessee or any of its
     Affiliates in connection with the transactions contemplated hereby
     contains any untrue statement of a material fact or omits to state a
     material fact necessary in order to make the statements contained
     therein, in light of the circumstances under which they were made, not
     misleading; provided, that no representation or warranty is made with
     regard to (i) any projections or other forward-looking statements
     provided by or on behalf of the Facility Lessee, or (ii) the descriptions
     of the Operative Documents or the tax consequences to beneficial owners
     of Certificates; provided, further, each of the Transaction Parties
     acknowledge and agrees that (i) Calpine has heretofore provided to the
     Appraiser, solely in order to assist the Appraiser in connection with the
     preparation of the appraisal to be delivered by the Appraiser to certain
     of the Transaction Parties at the Closing, certain (1) general market
     information, (2) information about the Wisconsin energy markets and (3)
     information passed along from other Persons and (ii) that the Facility
     Lessee makes no representation or warranty whatsoever with respect to the
     information described in clause (i) above except to the extent expressly
     set forth in Section 4(b) of the Tax Indemnity Agreement.

Exempt Wholesale Generator. The Facility Lessee is an "exempt wholesale
     generator" under PUHCA. The Facility is interconnected with the high
     voltage network operated by American Transmission Company and has access
     to transmission services and ancillary services sufficient to sell the
     net generating capacity of the Facility at wholesale, and the Facility
     Lessee has the authority to sell wholesale electric power from the net
     generating capacity of such generating Facility at market-based rates.

FERC Orders. The Facility Lessee has duly filed with FERC the filings
     referenced in Section 4.8 and, except with respect to the FERC Owner
     Lessor EWG Orders and the FERC Orders referred to in clause (v) of the
     definition of "FERC Orders" in Appendix A hereto, received from FERC the
     orders referenced therein.

                                      14

<PAGE>

Fully Taxable. As of the Closing Date, each Person owning an Ownership
     Interest (i) is fully taxable at the highest federal tax rate and (ii)
     expects to be fully taxable at the highest federal tax rate throughout
     the Facility Lease Term; for the avoidance of doubt, this representation
     is not intended to be construed as nor shall it be deemed to be a
     guaranty as to any such Person's future taxation.

Commencement of Commercial Operations and Compliance. To the knowledge of
     the Facility Lessee, the Facility has commenced commercial operations and
     is currently capable of producing at least 520 MW of capacity and
     complies in all material respects with the other specifications set forth
     in the purchase and construction contracts for the Facility.

Representations and Warranties of the Owner Lessor. The Owner Lessor represents
and warrants that as of the date of execution and delivery hereof and as of the
Closing Date:

Due Organization. The Owner Lessor is a duly organized and validly existing
     limited liability company under the laws of the State of Delaware of
     which the Owner Participant is the sole member, and has the power and
     authority to enter into and perform its obligations under this Agreement
     and each of the other Operative Documents to which it is a party.

Due Authorization, Enforceability; etc.   (1)   (i) This Agreement and each of
     the other Operative Documents (other than the Lessor Notes) to which the
     Owner Lessor is or will be a party has been or when executed and
     delivered will be duly authorized, executed and delivered by the Owner
     Lessor, and (ii) assuming the due authorization, execution and delivery
     of this Agreement by each party hereto other than the Owner Lessor, this
     Agreement constitutes and when executed and delivered each of the other
     Operative Documents (other than the Lessor Notes) to which it is or will
     be a party will be the legal, valid and binding obligations of the Owner
     Lessor, enforceable against the Owner Lessor in accordance with its
     terms, except as the same may be limited by applicable bankruptcy,
     insolvency, reorganization, moratorium or other similar laws affecting
     the rights of creditors generally and by general principles of equity.

          (2)   Upon the execution of the Lessor Notes by the Owner Lessor
in accordance with the Collateral Trust Indenture and delivery of such Lessor
Notes against payment therefor, the Lessor Notes will constitute legal, valid
and binding obligations of the Owner Lessor, enforceable against the Owner
Lessor in accordance with their terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the rights of creditors generally and by general principles of
equity.

Non-Contravention. The execution and delivery by the Owner Lessor of this
     Agreement and the other Operative Documents to which it is or will be a
     party, the consummation by the Owner Lessor of the transactions
     contemplated hereby and thereby, and the compliance by the Owner Lessor
     with the terms and provisions hereof and thereof, do not and will not
     contravene any Applicable Law of the United States of America or the
     State of Delaware, or the LLC Agreement or the Owner Lessor's other
     organizational documents or contravene the provisions of, or constitute a
     default by the Owner Lessor under any indenture, mortgage or other
     material contract, agreement or instrument to which the Owner Lessor is a
     party or by which the Owner Lessor or its property is bound, or in the
     creation of any Owner Lessor's

                                      15

<PAGE>

     Lien; provided, however, that no representation is made with respect to
     the right, power or authority of the Owner Lessor to act as operator of
     the Facility following a Lease Event of Default or the expiration or
     termination of the Facility Lease.

Governmental Actions. Assuming the representations and warranties of the
     Facility Lessee contained in paragraphs (j), (k), (l), (m), (q), (z),
     (ff) and (hh) of Section 3.1 are true, no authorization or approval or
     other action by, and no notice to or filing or registration with, any
     Governmental Entity is required for the due execution, delivery or
     performance by the Owner Lessor, as the case may be, of the LLC
     Agreement, the Collateral Trust Indenture, the Lessor Notes, this
     Agreement or the other Operative Documents to which the Owner Lessor is
     or will be a party, other than any such authorization or approval or
     other action or notice or filing as has been duly obtained, taken or
     given.

Litigation. There is no pending or, to the Actual Knowledge of the Owner
     Lessor, threatened, action, suit, investigation or proceeding against the
     Owner Lessor before any Governmental Entity which (i) questions the
     validity of the Operative Documents or the ability of the Owner Lessor to
     perform its obligations under the Operative Documents to which it is or
     will be a party or (ii) if determined adversely to it, could reasonably
     be expected to materially adversely affect the ability of the Owner
     Lessor to perform its obligations under this Agreement or any other
     Operative Document to which it is or will be a party or would materially
     adversely affect the Facility, the Facility Site or any interest therein
     or part thereof or the Lien of the Indenture Trustee on the Indenture
     Estate.

Liens. The Owner Lessor's right, title and interest in and to the Lessor
     Estate is free of all Owner Lessor's Liens.

Location of Registered Office; Location of Corporate Records. The registered
     office of the Owner Lessor is 1209 Orange Street, Wilmington, Delaware
     19801, and the Owner Lessor will keep its corporate records concerning
     the Facility, the Facility Site, the Operative Documents and the South
     Point Ground Lease with the Lessor Manager, at the Lessor Manager's
     address set forth in Section 14.5 hereof.

Securities Act. Neither the Owner Lessor nor anyone authorized by it has
     directly or indirectly offered or sold any interest in the Member
     Interest, the Lessor Notes or the Certificates or any part thereof, or in
     any similar security or lease, the offering of which for the purposes of
     the Securities Act would be deemed to be part of the same offering as the
     offering of the Member Interest, the Lessor Notes or the Certificates or
     any part thereof or solicited any offer to acquire any of the same in
     violation of the registration requirements of Section 5 of the Securities
     Act.

Representations and Warranties of the Lessor Manager and the Trust Company. The
Trust Company (only with respect to representations and warranties expressly
relating to the Trust Company) and the Lessor Manager hereby severally
represent and warrant that as of the date of execution and delivery hereof and
as of the Closing Date:

Due Organization. The Trust Company is national banking association duly
     organized and validly existing and in good standing under the laws of the
     United States, has the corporate

                                      16

<PAGE>

     power and authority, as Lessor Manager and/or in its individual capacity
     to the extent expressly provided herein or in the LLC Agreement, to enter
     into and perform its obligations under the LLC Agreement, this Agreement
     and each of the other Operative Documents to which it is a party.

Due Authorization, Enforceability; etc.   (1)   (i) The LLC Agreement has been
     duly authorized, executed and delivered by the Trust Company, and (ii)
     assuming the due authorization, execution and delivery of the LLC
     Agreement by the Owner Participant, the LLC Agreement constitutes the
     legal, valid and binding obligation of the Trust Company, enforceable
     against it in its individual capacity or as Lessor Manager, as the case
     may be, in accordance with its terms, except as may be limited by
     bankruptcy, insolvency, fraudulent conveyance, reorganization,
     arrangement, moratorium or other laws relating to or affecting the rights
     of creditors generally and by general principals of equity.

          (2)   Execution. This Agreement and each of the other Operative
Documents to which the Trust Company or the Lessor Manager is or will be a
party has been or when executed and delivered will be duly authorized, executed
and delivered by the Trust Company or the Lessor Manager, and (ii) assuming the
due authorization, execution and delivery of this Agreement by each party
hereto other than the Trust Company or the Lessor Manager, this Agreement
constitutes and when executed and delivered each of the other Operative
Documents to which it is or will be a party will be the legal, valid and
binding obligations of the Lessor Manager and, to the extent expressly provided
herein, the Trust Company, as the case may be, enforceable against the Lessor
Manager and, to the extent expressly provided herein, the Trust Company, in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of equity.

Non-Contravention. The execution and delivery by the Trust Company, in its
     individual capacity or as Lessor Manager, as the case may be, of the LLC
     Agreement, this Agreement and the other Operative Documents to which it
     is or will be a party, the consummation by the Trust Company, in its
     individual capacity or as Lessor Manager, as the case may be, of the
     transactions contemplated hereby and thereby, and the compliance by the
     Trust Company, in its individual capacity or as Lessor Manager, as the
     case may be, with the terms and provisions hereof and thereof, do not and
     will not contravene any Applicable Law of the State of Utah governing the
     Trust Company or any United States federal law governing the banking or
     trust powers of the Trust Company, or the LLC Agreement or its
     organizational documents or bylaws or contravene the provisions of, or
     constitute a default by the Trust Company under any indenture, mortgage or
     other material contract, agreement or instrument to which the Trust
     Company is a party or by which the Trust Company or its property is bound,
     or in the creation of any Owner Lessor's Lien; provided, however, that no
     representation is made with respect to the right, power or authority of
     the Trust Company or the Lessor Manager to act as operator of the Facility
     following a Lease Event of Default.

Governmental Actions. Assuming the representations and warranties of the
     Facility Lessee contained in paragraphs (j), (k), (l), (m), (q), (z), (ff)
     and (hh) of Section 3.1 are true, no authorization or approval or other
     action by, and no notice to or filing or registration with, any
     Governmental Entity is required for the due execution, delivery or
     performance by the

                                      17

<PAGE>

     Trust Company or the Lessor Manager, as the case may be, of the LLC
     Agreement, this Agreement or the other Operative Documents to which the
     Trust Company or the Lessor Manager is or will be a party, other than any
     such authorization or approval or other action or notice or filing as has
     been duly obtained, taken or given.

Litigation. There is no pending or, to the Actual Knowledge of the Trust
     Company, threatened, action, suit, investigation or proceeding against the
     Trust Company either in its individual capacity or as Lessor Manager, as
     the case may be, before any Governmental Entity which (i) questions the
     validity of the Operative Documents or the ability of the Owner Lessor to
     perform its obligations under the Operative Documents to which it is or
     will be a party or (ii) if determined adversely to it, could reasonably be
     expected to materially adversely affect the ability of the Trust Company
     either in its individual capacity or as Lessor Manager, as the case may
     be, to perform its obligations under the LLC Agreement, this Agreement or
     any other Operative Document to which it is or will be a party or would
     materially adversely affect the Facility, the Facility Site or any
     interest therein or part thereof or the Lien of the Indenture Trustee on
     the Indenture Estate.

Liens. The Lessor Estate is free of any Owner Lessor's Liens attributable to
     the Trust Company, in its individual capacity, or the Lessor Manager.

Securities Act. Neither the Trust Company, the Lessor Manager nor anyone
     authorized by either of such Persons has directly or indirectly offered or
     sold any interest in the Member Interest, the Lessor Notes or the
     Certificates or any part thereof, or in any similar security or lease, the
     offering of which, for the purposes of the Securities Act, would be deemed
     to be part of the same offering as the offering of the Member Interest,
     the Lessor Notes or the Certificates or any part thereof or solicited any
     offer to acquire any of the same in violation of the registration of
     Section 5 of the Securities Act.

Representations and Warranties of the Owner Participant. The Owner Participant
represents and warrants that as of the date of execution and delivery hereof
and as of the Closing Date:

Due Organization. The Owner Participant is a limited liability company duly
     organized, validly existing and in good standing under the laws of the
     State of Delaware and has the power and authority to enter into and
     perform its obligations under this Agreement, the LLC Agreement and the
     Tax Indemnity Agreement. The Owner Participant is a direct wholly owned
     subsidiary of Newcourt Capital USA Inc.

Due Authorization, Enforceability; etc. This Agreement, the LLC Agreement
     and the Tax Indemnity Agreement have been or when executed and delivered
     will be duly authorized, executed and delivered by the Owner Participant
     and assuming the due authorization, execution and delivery by each other
     party thereto, this Agreement, the LLC Agreement, the Tax Indemnity
     Agreement and any other Operative Document to which the Owner Participant
     is or will be a party constitute or when executed and delivered will
     constitute the legal, valid and binding obligations of the Owner
     Participant, enforceable against the Owner Participant in accordance with
     their respective terms, except as the same may be limited by applicable
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     affecting the rights of creditors generally and by general principles of
     equity.

                                      18

<PAGE>

Non-Contravention. The execution and delivery by the Owner Participant of
     this Agreement, the LLC Agreement, the Tax Indemnity Agreement and any
     other Operative Document to which the Owner Participant is or will be a
     party, the consummation by the Owner Participant of the transactions
     contemplated hereby and thereby, and the compliance by the Owner
     Participant with the terms and provisions hereof and thereof, do not and
     will not contravene any Applicable Law binding on the Owner Participant,
     or its organizational documents, or contravene the provisions of, or
     constitute a default under any indenture, mortgage or other material
     contract, agreement or instrument to which the Owner Participant is a
     party or by which the Owner Participant or its property is bound or result
     in the creation of any Owner Participant's Lien (other than any Lien
     created under any Operative Document) upon the Lessor Estate, the Facility
     Site or any interest therein or part thereof (it being understood that no
     representation or warranty is being made as to (i) any Applicable Laws
     relating to the particular nature of the Facility or the Facility Site or
     (ii) other than its representations set forth in Section 3.4(g), ERISA or
     Section 4975 of the Code).

Governmental Action. Assuming the representations and warranties of the
     Facility Lessee contained in paragraphs (j), (k), (l), (m), (q), (z), (ff)
     and (hh) of Section 3.1 are true, no authorization or approval or other
     action by, and no notice to or filing or registration with, any
     Governmental Entity is required for the due execution, delivery or
     performance by the Owner Participant of this Agreement, the LLC Agreement,
     the Tax Indemnity Agreement or any other Operative Document to which the
     Owner Participant is or will be a party, other than any authorization or
     approval or other action or notice or filing as has been duly obtained,
     taken or given (it being understood that no representation or warranty is
     being made as to any Applicable Laws relating to the Facility or the
     Facility Site).

Litigation. There is no pending or, to the Actual Knowledge of the Owner
     Participant, threatened, action, suit, investigation or proceeding against
     the Owner Participant before any Governmental Entity which (i) questions
     the validity of the Operative Documents or the ability of the Owner
     Participant to perform its obligations under the Operative Documents to
     which it is or will be a party or (ii) if determined adversely to it,
     could reasonably be expected to materially adversely affect the ability of
     the Owner Participant to perform its obligations under the LLC Agreement,
     this Agreement or any other Operative Document to which it is or will be a
     party or would materially adversely affect the Facility, the Facility Site
     or any interest therein or part thereof or the Lien of the Indenture
     Trustee on the Indenture Estate.

Liens. The Lessor Estate is free of any Owner Participant's Liens.

ERISA. No part of the funds to be used by the Owner Participant to make
     its investment pursuant to this Agreement, directly or indirectly,
     constitutes or is deemed to constitute assets (within the meaning of ERISA
     and any applicable rules, regulations and court decisions thereunder) of
     any "employee benefit plan" (as defined in Section 3(3) of ERISA) that is
     subject to ERISA, of any Transaction Party and ERISA Affiliate thereof.

Acquisition for Investment. The Owner Participant is purchasing the Member
     Interest to be acquired by it for its own account with no present
     intention of distributing such Member Interest or any part thereof in any
     manner which would require registration under or would

                                      19

<PAGE>

     violate the Securities Act, but without prejudice, however, to the right
     of the Owner Participant at all times to sell or otherwise dispose of all
     or any part of such Member Interest under an exemption from registration
     available under such Act.

Securities Act. Neither the Owner Participant nor anyone authorized by it
     has directly or indirectly offered or sold any interest in the Member
     Interest, the Lessor Notes or the Certificates or any part thereof, or in
     any similar security or lease, or in any security or lease the offering of
     which for the purposes of the Securities Act would be deemed to be part of
     the same offering as the offering of the Member Interest, the Lessor Notes
     or the Certificates or any part thereof or solicited any offer to acquire
     any of the same in violation of the registration requirements of Section 5
     of the Securities Act.

Holding Company Act and Federal Power Act. Immediately prior to executing
     this Agreement, the Owner Participant is not an "electric utility",
     "electric utility company", "public utility", "public-utility company",
     "holding company" or a "subsidiary company" or "affiliate" of any of the
     foregoing, under the Federal Power Act or the Holding Company Act.

Investment Company Act. The Owner Participant is not an "investment
     company" or a company controlled by an "investment company" within the
     meaning of the Investment Company Act of 1940.

Regulatory Event of Loss. The Owner Participant is not aware of any fact
     or circumstance that would constitute a Regulatory Event of Loss.

Representations and Warranties of Indenture Trustee and the Lease
Indenture Company. The Lease Indenture Company and the Indenture Trustee hereby
severally represent and warrant that as of the date of execution and delivery
hereof and as of the Closing Date:

Due Organization. The Lease Indenture Company is a national banking
     association duly organized, validly existing and in good standing under
     the laws of the United States, has the corporate power and authority, as
     Indenture Trustee and/or in its individual capacity to the extent
     expressly provided herein or in the Collateral Trust Indenture, to enter
     into and perform its obligations under the Collateral Trust Indenture,
     this Agreement and each of the other Operative Documents to which it is or
     will be a party.

Due Authorization, Enforceability; etc.   (1)   (i) This Agreement has been
     duly authorized, executed and delivered by the Indenture Trustee and the
     Lease Indenture Company, and (ii) assuming the due authorization,
     execution and delivery of this Agreement by each party hereto other than
     the Indenture Trustee and the Lease Indenture Company, this Agreement
     constitutes a legal, valid and binding obligation of the Lease Indenture
     Company and the Indenture Trustee, enforceable against the Lease Indenture
     Company or the Indenture Trustee, as the case may be, in accordance with
     its terms, except as the same may be limited by applicable bankruptcy,
     insolvency, reorganization, moratorium or other similar laws affecting the
     rights of creditors generally and by general principles of equity.

          (2)   (i) Each of the other Operative Documents to which the
Indenture Trustee is or will be a party has been or when executed and
delivered will be duly authorized, executed and delivered by the Indenture
Trustee, and (ii) assuming the due authorization, execution and

                                      20

<PAGE>

delivery of each of the other Operative Documents by each party thereto
other than the Indenture Trustee, each of the other Operative Documents to
which the Indenture Trustee is or will be a party constitutes or when executed
and delivered will be a legal, valid and binding obligation of the Indenture
Trustee, enforceable against the Indenture Trustee in accordance with its
terms, except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally and by general principles of equity.

Non-Contravention. The execution and delivery by the Lease Indenture
     Company, in its individual capacity or as Indenture Trustee, as the case
     may be, of this Agreement and the other Operative Documents to which it is
     or will be a party, the consummation by the Lease Indenture Company, in
     its individual capacity or as Indenture Trustee, as the case may be, of
     the transactions contemplated hereby and thereby, and the compliance by
     the Lease Indenture Company, in its individual capacity or as Indenture
     Trustee, as the case may be, with the terms and provisions hereof and
     thereof, do not and will not contravene any Applicable Law of the State of
     Connecticut or the United States of America governing the Lease Indenture
     Company or the banking or trust powers of the Lease Indenture Company, or
     its articles of association or by-laws, or contravene the provisions of,
     or constitute a default by the Lease Indenture Company under or pursuant
     to any indenture, mortgage or other material contract, agreement or
     instrument to which the Lease Indenture Company is a party or by which the
     Lease Indenture Company or its property is bound, or result in the
     creation of any Lien attributable to the Lease Indenture Company upon the
     Indenture Estate, the Facility Site or any interest therein or any part
     thereof (other than the Lien of the Collateral Trust Indenture), which
     would materially adversely affect the ability of the Lease Indenture
     Company, in its individual capacity or as Indenture Trustee, as the case
     may be, to perform its obligations under this Agreement or the other
     Operative Documents to which it is or will be a party or would materially
     adversely affect the Facility, the Facility Site or any interest therein
     or part thereof or the security interest of the Indenture Trustee in the
     Indenture Estate; provided, however, that no representation or warranty is
     made with respect to the right, power or authority of the Lease Indenture
     Company or the Indenture Trustee to act as operator of the Facility
     following a Lease Event of Default.

Governmental Action. Assuming the representations and warranties of the
     Facility Lessee contained in paragraphs (j), (k), (l), (m), (q), (z), (ff)
     and (hh) of Section 3.1 are true, no authorization or approval or other
     action by, and no notice to or filing or registration with, any
     Governmental Entity of the State of Delaware or of the United State of
     America governing its banking or trust powers is required for the due
     execution, delivery or performance by the Lease Indenture Company or the
     Indenture Trustee, as the case may be, of this Agreement or the other
     Operative Documents to which the Indenture Trustee is or will be a party,
     other than any such authorization or approval or other action or notice or
     filing as has been duly obtained, taken or given.

Litigation. There is no pending or, to the Actual Knowledge of the Lease
     Indenture Company, threatened, action, suit, investigation or proceeding
     against the Lease Indenture Company before any Governmental Entity which
     (i) questions the validity of the Operative Documents or the ability of
     the Lease Indenture Company or the Indenture Trustee to perform its
     obligations under the Operative Documents to which it is or will be a
     party or (ii) if

                                      21

<PAGE>

     determined adversely to it, could reasonably be expected to materially
     adversely affect the ability of the Lease Indenture Company to perform its
     obligations under this Agreement or any other Operative Document to which
     it is or will be a party or could reasonably be expected to materially
     adversely affect the Facility, the Facility Site or any interest therein
     or part thereof or the Lien of the Indenture Trustee on the Indenture
     Estate.

Representations, Warranties and Covenants of the Pass Through Trustees
and the Pass Through Company. The Pass Through Company and the Pass Through
Trustees hereby severally represent and warrant that as of the date of
execution and delivery hereof and as of the Closing Date:

Due Organization. The Pass Through Company is a national banking
     association duly organized, validly existing and in good standing under
     the laws of the United States, has the corporate power and authority, as
     Pass Through Trustee and/or in its individual capacity to the extent
     expressly provided herein or in the Pass Through Trust Agreements, to
     enter into and perform its obligations under the Pass Through Trust
     Agreements, this Agreement and each of the other Operative Documents to
     which it is or will be a party.

Due Authorization, Enforceability; etc.

(A)   This Agreement has been duly authorized, executed and delivered by the
     Pass Through Trustees and the Pass Through Company and (B) assuming the
     due authorization, execution and delivery of this Agreement by each party
     hereto other than each Pass Through Trustee and the Pass Through Company,
     as the case may be, this Agreement constitutes a legal, valid and binding
     obligation of the Pass Through Company and each Pass Through Trustee,
     enforceable against the Pass Through Company or each Pass Through Trustee,
     as the case may be, in accordance with its terms, except as the same may
     be limited by bankruptcy, insolvency, fraudulent conveyance,
     reorganization, arrangement, moratorium or other laws relating to or
     affecting the rights of creditors generally and by general principles of
     equity.

(A)   Each of the other Operative Documents to which the Pass Through
     Company or any Pass Through Trustee is or will be a party has been or when
     executed and delivered will be duly authorized, executed and delivered by
     the Pass Through Company or such Pass Through Trustee, as the case may be,
     and (B) assuming the due authorization, execution and delivery of each of
     the other Operative Documents by each party thereto other than the Pass
     Through Company or such Pass Through Trustee, as the case may be, each of
     the other Operative Documents to which the Pass Through Company or any
     Pass Through Trustee is or will be a party constitutes or when executed
     and delivered will constitute a legal, valid and binding obligation of the
     Pass Through Company or such Pass Through Trustee, enforceable against the
     Pass Through Company or such Pass Through Trustee, as the case may be, in
     accordance with its terms, except as the same may be limited by
     bankruptcy, insolvency, fraudulent conveyance, reorganization,
     arrangement, moratorium or other laws relating to or affecting the rights
     of creditors generally and by general principles of equity.

Non-Contravention. The execution and delivery by the Pass Through Company,
     in its individual capacity or as Pass Through Trustee, as the case may be,
     of this Agreement and the other Operative Documents to which it is or will
     be a party, the consummation by the Pass

                                      22

<PAGE>

     Through Company, in its individual capacity or as Pass Through Trustee, as
     the case may be, of the transactions contemplated hereby and thereby, and
     the compliance by the Pass Through Company, in its individual capacity or
     as Pass Through Trustee, as the case may be, with the terms and provisions
     hereof and thereof, do not and will not contravene any Applicable Law of
     the United States of America or the State of Connecticut governing the
     Pass Through Company or the banking or trust powers of the Pass Through
     Company, or its organizational documents or by-laws, or contravene the
     provisions of, or constitute a default by the Pass Through Company under,
     or result in the creation of any Lien attributable to the Pass Through
     Company upon the Certificates or any indenture, mortgage or other material
     contract, agreement or instrument to which the Pass Through Company is a
     party or by which the Pass Through Company or its property is bound which
     would materially adversely affect the ability of the Pass Through Company,
     in its individual capacity or as Pass Through Trustee, as the case may be,
     to perform its obligations under this Agreement or the other Operative
     Documents to which it is a party or would materially adversely affect the
     Facility, the Facility Site or any interest therein or part thereof or the
     security interest of any Pass Through Trustee in the Indenture Estate;
     provided, however, that no representation is made with respect to the
     right, power or authority of the Pass Through Company or any Pass Through
     Trustee to act as operator of the Facility following a Lease Event of
     Default.

Governmental Action. Assuming the representations and warranties of the
     Facility Lessee contained in paragraphs (j), (k), (l), (m), (q), (z), (ff)
     and (hh) of Section 3.1 are true, no authorization or approval or other
     action by, and no notice to or filing or registration with, any
     Governmental Entity governing its banking or trust powers is required for
     the due execution, delivery or performance by the Pass Through Company or
     any Pass Through Trustee, as the case may be, of this Agreement or the
     other Operative Documents to which such Pass Through Trustee is or will be
     a party, other than any such authorization or approval or other action or
     notice or filing as has been duly obtained, taken or given.

Litigation. There is no pending or, to the knowledge of the Pass Through
     Company, threatened action, suit, investigation or proceeding against the
     Pass Through Company either in its individual capacity or as Pass Through
     Trustee, before any Governmental Entity which, if determined adversely to
     it, would materially adversely affect the ability of the Pass Through
     Company, in its individual capacity or as Pass Through Trustee, as the
     case may be, to perform its obligations under this Agreement or the other
     Operative Documents to which it is a party or would materially adversely
     affect the Facility, the Facility Site or any interest therein or part
     thereof or the security interest of any Pass Through Trustee in the
     Indenture Estate or which questions the validity or enforceability of any
     Operative Document to which the Pass Through Company or any Pass Through
     Trustee is a party.

CLOSING CONDITIONS

          The obligations of the Owner Participant, the Owner Lessor, the
Lessor Manager, the Lease Indenture Company, the Indenture Trustee, the
Pass Through Company, the Pass Through Trustees, the Guarantor and the Facility
Lessee to consummate the transactions contemplated hereby on the Closing Date
shall be subject to the following conditions, except that the obligations of
any Person shall not be subject to such Person's own performance or compliance,
and each of the Transaction Parties (other than the Certificateholders) shall
provide

                                      23

<PAGE>

such proof of satisfaction of these conditions as any other Transaction
Party shall reasonably request.

                                      24

<PAGE>

Completion of the Facility. The Facility shall have commenced commercial
operations and shall currently be capable of producing at least 520 MW of
capacity and shall comply in all material respects with the other
specifications set forth in the purchase and construction contracts for the
Facility.

Operative Documents. On or before the Closing Date, each of the Operative
Documents to be delivered at or before the Closing (as well as any other
agreements, certificates and other documents relating to the Overall
Transaction to be delivered at Closing (including, without limitation, the
Offering Circular)) shall have been duly authorized, executed and delivered by
the parties thereto (if attached as an Exhibit hereto, in substantially the
form attached as such Exhibit or if not so attached, in form and substance
satisfactory to each Transaction Party), shall each be in full force and
effect, and executed counterparts of each shall have been delivered to each of
the parties hereto (other than the Tax Indemnity Agreement, which shall only be
delivered to the parties thereto).

Certificates and the Lessor Notes. Each of the conditions precedent
contained in the Certificate Purchase Agreement shall have been satisfied or
waived by the Initial Purchasers and such Initial Purchasers shall have
purchased the Certificates pursuant to and in accordance with, the terms of the
Certificate Purchase Agreement and the Proceeds shall have been provided to the
Owner Lessor through the purchase by the Pass Through Trustees of the
applicable Lessor Notes.

Equity Investment. The Owner Participant shall have made or caused to be
made the Equity Investment available to the Owner Lessor at the place and in
the manner contemplated by Section 2.

Organizational Documents. Each of the Transaction Parties shall have
received certified copies of the organizational documents of each of the other
parties hereto and resolutions of the board of directors of each such other
corporate party duly authorizing the transaction and such documents and such
evidence as each party may reasonably request in order to establish the
authority of each such other party to consummate the transactions contemplated
by this Agreement, the taking of all corporate and other proceedings in
connection therewith and compliance with the conditions herein or therein set
forth and the incumbency of all officers signing any of the Operative
Documents. Each of the foregoing documents shall be reasonably satisfactory to
each recipient thereof.

Representations and Warranties. The representations and warranties of
each party hereto set forth in Section 3 shall be true and correct on and as of
the Closing Date with the same effect as though made on and as of the Closing
Date.

Defaults, Events of Default, Events of Loss. No Lease Event of Default,
Lease Indenture Event of Default, Event of Loss or Burdensome Buyout Event or
event that with the passage of time or giving of notice or both would
constitute a Lease Event of Default, Lease Indenture Event of Default, Event of
Loss or Burdensome Buyout Event shall have occurred and be continuing.

Regulatory Approvals. Except with respect to the FERC Owner Lessor EWG
Orders and the FERC Orders set forth in clause (v) of the definition of "FERC
Orders" set forth in Appendix A hereto, the Owner Participant and the Pass
Through Trustees shall have received evidence of receipt of the FERC Orders.

                                      25

<PAGE>

Consents.   (a)   All permits, licenses, approvals and consents (including
     management, credit and other internal approvals of the Transaction
     Parties, but excluding the Third Party Consents referred to in (b) below)
     necessary to consummate the Overall Transaction and to own and operate the
     Facility as currently operated shall have been duly obtained and shall be
     in full force and effect and in the form and substance satisfactory to
     each of the Transaction Parties.

Each Third Party Consent shall have been obtained and shall be in full
     force and effect substantially in the form attached hereto as Exhibit O
     which is applicable to the relevant third party granting such consent;
     provided that if any Third Party Consent is not substantially in the form
     attached hereto as Exhibit O, an authorized officer of Calpine shall
     provide a certificate to the Owner Lessor, the Indenture Trustee and the
     Pass Through Trustee certifying that any differences between the form of
     such consent attached hereto and the executed version are not materially
     adverse to any of the Indenture Trustee, the Pass Through Trustee, the
     Noteholders, the Certificateholders or the Owner Lessor.

                                      26

<PAGE>

Governmental Actions. All actions, if any, required to have been taken by
any Governmental Entity on or prior to the Closing Date in connection with the
transactions contemplated by any Operative Document, including, without
limitation, the FERC Orders, shall have been taken and, except with respect to
the FERC Owner Lessor EWG Orders and the FERC Orders set forth in clause (v) of
the definition of "FERC Orders" set forth in Appendix A hereto, all Applicable
Permits required to be in effect on the Closing Date in connection with the
consummation of the transactions contemplated by the Operative Documents shall
have been issued and shall be in full force and effect; and all such Applicable
Permits shall be final, in full force and effect on the Closing Date.

Insurance. Insurance (including all related endorsements) complying with
the requirements of Schedule 5.31 shall be in full force and effect and all
premiums thereon shall be current. The Owner Participant, the Manager, the
Lessor Manager, the Indenture Trustee and the Pass Through Trustees shall have
received a certificate or certificates (or binders, if certificates are not
then available) dated the Closing Date of Summit Global Partners Insurance
Services or an independent insurance broker or carrier reasonably satisfactory
to such Persons stating that such insurance complies with the requirements of
Schedule 5.31, is in full force and effect and all premiums then due and
payable in connection therewith have been paid.

Ratings. The Certificates shall have been rated at least Ba1 by Moody's
and BB+ by S&P.

Environmental Report. The Owner Participant, the Manager, the Indenture
Trustee and the Pass Through Trustees shall have received copies of the
Environmental Reports which shall be in form and substance satisfactory to such
parties. The Facility Lessee shall cause the Environmental Consultant to
deliver at the same time a reliance letter addressed to the Owner Lessor, the
Manager and the Owner Participant allowing them to rely on such reports as if
addressed to each of them.

Surveys. The Owner Participant shall have received a bringdown certificate
(which certificate shall be in form and substance satisfactory to the Owner
Participant) from the surveyor with respect to its survey of the Facility Site
dated February 22, 2000.

Appraisal; Condition of the Facility. The Owner Participant shall have
received the Closing Appraisal prepared by the Appraiser addressed and
delivered only to the Owner Participant and in form and substance satisfactory
to the Owner Participant, together with a letter of the Appraiser certifying
that its conclusions set forth in the Closing Appraisal are true and correct as
of the Closing Date. The Indenture Trustee, the Pass Through Trustees and the
Initial Purchasers shall have received a copy of the verification of value,
useful life and estimated residual value prepared by the Appraiser in
connection with the appraisal of assets subject to the Facility Lease, each of
which will be reasonably satisfactory to the recipient.

Letter from the Appraiser. Each of the Owner Lessor and the Manager shall
have received a satisfactory letter of the Appraiser setting forth the
conclusions of the Closing Appraisal as to the fair market value and remaining
economic useful life of the Facility as of the Closing Date and the methodology
of determination thereof.

                                      27

<PAGE>

Other Reports. The Owner Participant, the Indenture Trustee and the Pass
Through Trustees shall have received copies of the reports of the Engineering
Consultant, the Insurance Consultant, and the Power Market Consultant, which
reports shall be dated as of the Closing Date and shall otherwise each be in
form and substance reasonably satisfactory to the recipients.

Opinion with Respect to Certain Tax Aspects. The Owner Participant shall
have received the opinion, dated the Closing Date, of Dewey Ballantine LLP
addressed and delivered only to the Owner Participant as to certain tax matters
and in form and substance satisfactory to the Owner Participant.

Opinions of Counsel. Each of the relevant Transaction Parties shall have
received an opinion or opinions, dated the Closing Date, of (a) Ronald W.
Fischer, Esq., in-house counsel to the Facility Lessee and Guarantor (which
opinion shall include, without limitation, a favorable opinion with respect to
the sale by the Facility Lessee of its interest in the Undivided Interest to
the Owner Lessor), (b) Thelen Reid & Priest LLP, special counsel to the
Facility Lessee and Guarantor, (c) Davis Wright & Tremaine LLP, special
regulatory counsel to the Facility Lessee, (d) Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, S.C., Wisconsin counsel to the Facility Lessee, the Owner
Participant, the Owner Lessor and the Initial Purchasers, (e) Karen Scowcroft,
Esq., in-house counsel to the Equity Investor, (f) Dewey Ballantine LLP,
counsel to the Owner Participant and to the Owner Lessor, (g) Bingham Dana LLP,
counsel to the Lease Indenture Company and the Indenture Trustee, (h) Bingham
Dana LLP, counsel to the Pass Though Trustees and the Pass Through Company, and
(i) Ray Quinney & Nebeker, in-house counsel to the Lessor Manager, in each case
in form and substance reasonably satisfactory to each Transaction Party. Each
such Person expressly consents to the rendering by its counsel of the opinion
referred to in this Section 4.19 and acknowledges that such opinion shall be
deemed to be rendered at the request and upon the instructions of such Person,
each of whom has consulted with and has been advised by its counsel as to the
consequences of such request, instructions and consent. Furthermore, each such
counsel shall, to the extent requested, permit the Rating Agencies and the
Initial Purchasers to rely on their opinion as if such opinion were addressed
to such parties.

Recordings and Filings. All filings and recordings listed on Schedule 4.20
hereto shall have been duly made and all filing, recordation, transfer and
other fees payable in connection therewith shall have been paid; and the filing
of all precautionary financing statements under the Uniform Commercial Code of
Wisconsin and any other documents as may be reasonably requested by counsel to
the Owner Participant, the Indenture Trustee or the Pass Through Trustees to
perfect (i) the Owner Lessor's Interest, or any part thereof or interest
therein and (ii) and the Lien of the Indenture Trustee on the Indenture Estate.

Conditions to Closing. All conditions required to have been satisfied by
on or before the Closing Date under the Operative Documents shall have been
satisfied or waived and the Owner Participant shall be satisfied that the
Facility shall be in the condition described in the Closing Appraisal.

Taxes. All Taxes, if any, due and payable on or before the Closing Date in
connection with the execution, delivery, recording and filing of this Agreement
or any other Operative Document, or any document or instrument contemplated
thereby shall have been duly paid in full.

                                      28

<PAGE>

No Changes in Applicable Law. No change shall have occurred in Applicable
Law or the interpretation thereof by any competent court or other Governmental
Entity that would make it illegal for the Owner Participant, the Owner Lessor,
the Lessor Manager, the Indenture Trustee, the Pass Through Trustees or the
Facility Lessee, to participate in any of the transactions contemplated by the
Operative Documents or would materially adversely affect the Facility or the
Facility Site. On the Closing Date, each Certificateholder's purchase of Lessor
Notes shall (i) be permitted by the laws and regulations of each jurisdiction
to which such Certificateholder is subject, (ii) not violate any Applicable Law
(including Regulation U, T or X of the Board of Governors of the Federal
Reserve System) and (iii) not subject any Certificateholder to any tax, penalty
or liability under or pursuant to any Applicable Law, which Applicable Law was
not in effect on the date hereof. If requested by any Certificateholder, such
Certificateholder shall have received an Officer's Certificate of the Owner
Lessor, in form and substance satisfactory to such Certificateholder,
certifying as to such matters of fact as such Certificateholder may reasonably
specify to enable such Certificateholder to determine whether such purchase is
so permitted.

Registered Agent for the Facility Lessee and the Owner Lessor. National
Registered Agents, Inc. shall have been appointed by the Facility Lessee, and
CT Corporation System shall have been appointed by the Owner Lessor, each as
registered agent for service of process in the State of New York as provided in
the Operative Documents and each of National Registered Agents, Inc. and CT
Corporation System shall have accepted such appointments.

Operating Lease Treatment. The present value of Basic Rent payable during
the Basic Lease Term under the Facility Lease (taking into account any rent
adjustment through or contemplated on the Closing Date), together with all rent
payable under the related Facility Site Lease, discounted at the Discount Rate,
shall satisfy the 90 percent test for operating lease classification under FASB
13. The Facility Lessee shall have received confirmation from Arthur Andersen
LLP that the Facility Lease will be treated as an operating lease under FASB 13
and FASB 98 for the purposes of GAAP.

Rent Adjustments. The aggregate of all rent adjustments made on or before,
or contemplated to be made on, the Closing Date (other than adjustments to
reflect a change in Transaction Costs or the actual interest rates on the
Certificates) shall not cause either (i) the pre-tax net present value of Basic
Rent discounted at 6% to increase by more than 100 basis points or (ii) the
total Basic Rent to increase by more than 2%.

Title Insurance. The Title Policy shall have been delivered to the Owner
Participant, the Owner Lessor, the Indenture Trustee, as the case may be, with
copies to the Pass Through Trustees.

Parent Guaranty. The OP Guarantor shall have executed and delivered to the
other Transaction Parties an OP Parent Guaranty in the form of Exhibit G hereto.

Letter as to Number of Offerees. (i) The Owner Participant and the
Certificateholders shall have received a certification from the Facility Lessee
as to the number of offerees by it of the Lessor Estate and (ii) the Facility
Lessee shall have received certification from the Newcourt Capital Securities,
Inc. as to the number of offerees by it of the Lessor Estate and (iii) the
Facility Lessee shall have received certification from CSFB as to the number of
offerees by it of the Lessor Estate.

                                      29

<PAGE>

Lien Search. The Owner Participant (with a copy to the Indenture Trustee)
shall have received Lien searches with respect to the Facility Lessee in form
and substance satisfactory to the Owner Participant.

Litigation. There shall be no actions, investigations, suits or proceedings
pending or threatened against the Facility Lessee and/or the Calpine Parties
or their properties before any court or Governmental Entity which,
individually or in the aggregate, would, if adversely determined, be reasonably
likely to have a Material Adverse Effect (including, but not limited to, the
Facility Lessee, the Owner Participant, the Owner Lessor or the
Certificateholders being subject to or not exempted from regulation as a
"public utility company" or a "holding company" under PUHCA or under state laws
and regulations respecting the rates or the financial and organizational
regulation of electric utilities), nor shall any order, judgment or decree have
been issued or proposed by any Governmental Entity at the time of the Closing
Date, to set aside, restrain, enjoin or prevent the consummation of the
Operative Documents or any of the Transactions contemplated by any of the
Operative Documents.

No Material Adverse Change. The annual reports, information, documents and
other reports referred to in Section 3.2(a) of the Calpine Guaranty shall have
been received by the Owner Participant, and there shall have been no material
adverse change in the financial condition, business assets or operation of
Calpine and its Consolidated Subsidiaries since the date of such annual
reports, information, documents and other reports.

Private Placement Number. A private placement number issued by S&P's CUSIP
Service bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have been obtained for
the Certificates.

Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory to the Facility Lessee, the Owner Participant and the Initial
Purchasers and their respective special counsel, and such parties and their
respective special counsel shall have received all such information and
counterpart originals or certified or other copies of such documents and
certificates as each such party or its special counsel may reasonably request
in connection with the matters contemplated hereby and by the other Operative
Documents.

No Proposed Tax Law Change. There has been no Proposed Tax Law Change for
which an adjustment has not been made pursuant to Section 12 of this Agreement.

Payment of Fees and Expenses. Without limiting the provisions of Section
2.3, all Transaction Costs invoiced at least 3 Business Days prior to Closing
to the Owner Participant with a copy to the Facility Lessee shall be paid
promptly after the Closing Date (but no later than October 29, 2001).

COVENANTS OF FACILITY LESSEE AND GUARANTOR

          The Facility Lessee and the Guarantor, to the extent provided below,
covenant as follows;

                                      30

<PAGE>

Maintenance of Existence. Except as permitted by Section 5.2, the Facility
Lessee, at its own cost and expense, will at all times do or cause to be done
all things necessary to preserve and keep in full force and effect both its
legal existence and its qualification to do business in any state in which the
conduct of its business or the ownership or leasing of assets used in its
business requires such qualification and where the failure to be so qualified
would reasonably be expected to have a Material Adverse Effect.

Merger, Consolidation, Sale of Substantially All Assets. The Facility
Lessee covenants and agrees as follows:

The Facility Lessee will not consolidate or merge with or into any other
     Person, or sell, assign, convey, lease, transfer or otherwise dispose of,
     all or substantially all of its properties or assets to any Person or
     Persons in one or a series of transactions, unless (i) immediately after
     giving effect to any such transaction or transactions, either (A) Calpine
     would own, directly or indirectly, at least a majority of the Ownership
     Interest of each succeeding or surviving entity, the Calpine Guaranty
     remains in full force and effect (without a transferee of Calpine's
     obligations thereunder having succeeded thereto in accordance with Section
     8.4(b) thereof) and Calpine shall have reaffirmed in writing its
     obligations under the Calpine Guaranty and the other Operative Documents
     to which Calpine is a party in a manner reasonably satisfactory to the
     Owner Participant and the Owner Lessor or (B) Calpine's obligations under
     the Calpine Guaranty have been succeeded to in accordance with Section
     8.4(b) of the Calpine Guaranty, the transferee of Calpine shall own,
     directly or indirectly, at least a majority of the Ownership Interest of
     each succeeding or surviving entity and the Calpine Guaranty shall remain
     in full force and effect, (ii) immediately after giving effect to such
     transaction, the requirements set forth in Section 13.1(b)(i) through (vi)
     of this Agreement (with appropriate conforming changes to take into
     account the nature of the transactions referred to hereunder) have been
     satisfied in connection with such transfer, and (iii) each succeeding or
     surviving entity shall be organized under the laws of the United States,
     any state thereof or the District of Columbia.

Upon the consummation of such transaction described in Section 5.2(a), the
     resulting, surviving or succeeding entity, if other than the Facility
     Lessee, shall succeed to, and be substituted for, and may exercise every
     right and power and shall perform every obligation of, the Facility Lessee
     under this Participation Agreement and each other Operative Document to
     which the Facility Lessee was a party immediately prior to such
     transaction, with the same effect as if such entity had been named herein
     and therein. The Facility Lessee will pay the costs and expenses
     (including reasonable attorneys' fees and expenses) of the Owner
     Participant, the Owner Lessor, the Lessor Manager, the Indenture Trustee,
     the Pass Through Trustees and the Certificateholders in connection with
     any transaction contemplated by this Section 5.2.

Guaranty and Contingent Obligations. The Facility Lessee will not create,
incur, assume or suffer to exist any Indebtedness (including without limitation
any guaranty or other contingent obligations) except (i) by reason of
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of the Facility Lessee's business, (ii)
indemnities in respect of unfiled mechanics' liens and other liens permitted by
clause (d) of the definition of "Permitted Liens", (iii) contingent obligations
set forth in, or incurred in connection with, or indemnities set forth in, the
Operative Documents, (iv) unsecured indemnities provided

                                      31

<PAGE>

by, and other unsecured contingent obligation incurred by, the Facility
Lessee in connection with either (x) easements relating to its applicable
interest in the Facility or the Facility Site or (y) any contract, agreement or
other document or instrument relating to the RockGen project which is entered
into in the ordinary course of the Facility Lessee's business, (v) customary
indemnities in favor of the title insurers providing the title policies
covering the Facility Site or any portion thereof or any easement or
appurtenant right relating thereto in respect of claims by the holder of
mechanics' liens, (vi) the indemnities referred to in Section 9.1 and 9.2 of
the Participation Agreement or pursuant to the Tax Indemnity Agreement and
(vii) unsecured Indebtedness incurred in accordance with Section 11.1 or 11.2
hereof.

Assignment of Rights. The Facility Lessee shall not assign any of its
rights or obligations except as permitted by the Operative Documents.

Lessor Manager Fees. The Facility Lessee and Calpine shall pay the fees,
costs and expenses of the Lessor Manager (including the reasonable compensation
and expenses of its counsel), as set forth in a letter agreement approved by
the Facility Lessee arising out of the Owner Lessor's and the Owner
Participant's discharge of their duties under or in connection with the
Operative Documents, as in effect on the Closing Date.

Conduct of Business, Properties, Etc. Except as otherwise expressly
permitted under this Agreement, the Facility Lessee shall (a) perform and
comply with all of its contractual obligations under the Operative Documents to
which it is a party and all other material agreements and contracts by which it
is bound, unless (other than in connection with the Operative Documents) such
noncompliance would not cause a Material Adverse Effect, and (b) engage only in
the business contemplated by the Operative Documents to which it is a party.

Obligations. The Facility Lessee shall pay all of its obligations,
howsoever arising, as and when due and payable except such as may be contested
in good faith or as to which a bona fide dispute may exist; provided, that (i)
adequate reserves consistent with GAAP requirements are maintained for such
contested or disputed obligations or (ii) the Facility Lessee otherwise
establishes and maintains adequate security arrangements for the payment of
such contested or disputed obligations which are reasonably acceptable to the
Owner Participant.

Books, Records, Access. The Facility Lessee shall maintain or cause to be
maintained adequate books, accounts and records with respect to itself, the
Facility and Facility Site and prepare all financial statements required
hereunder in accordance with GAAP and in compliance with the regulations of any
Governmental Entity having jurisdiction thereof, and permit employees, agents
and representatives of the Owner Lessor, the Owner Participant, and, so long as
the Lien of the Collateral Trust Indenture shall have not been terminated or
discharged, the Indenture Trustee, the Pass Through Trustees and the
Certificateholders, and such parties' independent consultants, at all
reasonable times during normal business hours and upon reasonable prior notice
and at no risk or (except during the existence of a Lease Default or Lease
Event of Default) expense to the Facility Lessee to inspect, the Facility and
Facility Site, to examine or audit all of or any of the Facility Lessee's
books, accounts and records and make copies and memoranda thereof and, together
with such consultants, to observe the operation, maintenance and repair of the
Facility; provided, however, any such inspection shall be conducted in
accordance with Section 12 of the Facility Lease.

                                      32

<PAGE>

Other Information.

The Facility Lessee shall furnish, or shall cause to be furnished to, the
     Owner Lessor, the Owner Participant and, so long as the Lien of the
     Collateral Trust Indenture has not been terminated or discharged, the
     Indenture Trustee and the Pass Through Trustees, and their respective
     authorized representatives from time to time such information as such
     party shall reasonably request concerning the Facility and Facility Site
     including information concerning the condition, operation, maintenance and
     use of the Facility and Facility Site and such other financial or
     operating information as it shall reasonably request and which is
     routinely made available to creditors of the Facility Lessee, to the
     extent it possesses such information; provided that, the Facility Lessee
     reserves the right not to provide any information that is not otherwise
     publicly available to any transferee Owner Participant (or its Owner
     Lessor) if it reasonably believes in its good faith judgment that such
     transferee Owner Participant or any Affiliate thereof is a competitor or
     is an Affiliate of a competitor of the Facility Lessee or its Affiliates
     in the competitive power market, unless, before receiving any such
     information, such transferee Owner Participant shall have put in place (to
     the reasonable satisfaction of the Facility Lessee) appropriate
     confidentiality arrangements. To the extent such information consists of
     information contained in records kept by the Facility Lessee or any
     Affiliate, such information shall be furnished without cost to the
     recipient.

          (b)   The Facility Lessee will advise the Owner Participant, the
Owner Lessor, the OP Guarantor, the Pass Through Trustees and the
Indenture Trustee promptly in writing of the occurrence of any Significant
Lease Default, Lease Event of Default or Lease Indenture Event of Default (to
the extent the Facility Lessee has Actual Knowledge of any such Lease Indenture
Event of Default) and, as soon as practicable thereafter, will provide a
description thereof and a statement as to the actions, if any, the Facility
Lessee proposes to take with respect thereto.

Warranty of Title to Facility Site.

Each Facility Lessee shall maintain good and valid fee, title to, or
     easement or other surface rights in, as applicable, its Facility Site,
     subject only to Permitted Liens.

Each Facility Lessee shall maintain good and valid title to all of its
     other properties and assets (other than properties and assets disposed of
     in the ordinary course of business including any sale, transfer or other
     disposition of any obsolete, surplus or worn out equipment, parts,
     supplies or other materials or assets to the extent permitted by the
     Operative Documents), subject only to Permitted Liens.

ERISA. The Facility Lessee shall not establish, maintain or contribute to, any
Plan. If any Plan is established, maintained or contributed to by either the
Facility Lessee or any ERISA Affiliate, or if the Facility Lessee or any ERISA
Affiliate becomes obligated to contribute to any Plan, (a) with respect to each
such Plan, the Facility Lessee or such ERISA Affiliate (i) shall have at all
times fulfilled in all material respects their obligations under the minimum
funding standards of ERISA and the Code, (ii) shall not allow any such Plan to
have an Unfunded Current Liability, (iii) shall, with respect to each Plan (and
each related trust, if any) which is intended to be qualified under Sections
401(a) and 501(a) of the Code, obtain a determination letter from the

                                      33

<PAGE>

Internal Revenue Service to the effect that such Plan (and trust, if any) meets
the requirements of Sections 401(a) and 501(a) of the Code, and (iv) shall at
all times be in compliance in all material respects with applicable provisions
of ERISA and the Code, and (b) within fifteen (15) days after (i) the
occurrence of any reportable event (as defined in Section 4043(c) of ERISA)
with respect to any Plan, (ii) the complete or partial withdrawal by the
Facility Lessee or any ERISA Affiliate from any Multiemployer Plan, (iii) to
the extent the Facility Lessee or any ERISA Affiliate is notified that any
Multiemployer Plan has entered reorganization status, has become insolvent, or
has terminated (or any Multiemployer Plan notifies the Facility Lessee or any
ERISA Affiliate of its intent to terminate) under Section 4041A of ERISA, (iv)
the institution of any action to terminate a Plan in a distress termination
under Section 4041(c) of ERISA, or (v) in the case of the breach of any other
covenant contained in this Section 5.11, the Facility Lessee shall report such
occurrence or breach to the Indenture Trustee, the Pass Through Trustees, the
Owner Lessor and the Owner Participant and furnish such information as such
Persons may reasonably request with respect thereto.

Certain Contracts and Agreements. Without the consent of the Owner Participant,
the Facility Lessee agrees that, except as required by the Operative Documents,
it will not enter into or become bound by any contract or agreement providing
for the sale of energy produced from the Facility, or the purchase of services
to be performed at, for or in connection with, the Facility or any other
contract or agreement relating to the Facility that (i) has a term that extends
beyond the Basic Lease Term or the scheduled expiration of any Renewal Lease
Term then in effect or elected by the Facility Lessee, unless such contract or
agreement may be terminated by the Facility Lessee without material costs or
obligation prior to the Basic Lease Term or the scheduled expiration of such
Renewal Lease Term, as the case may be or (ii) results in any lien,
encumbrance, restriction or agreement relating to the Facility which extends
beyond the expiration of the Facility Lease Term or which binds the Facility or
the owner of the Facility beyond the expiration of the Facility Lease Term;
provided that nothing in this Section 5.12 shall prevent the Operator from
entering agreements to operate the Facility in accordance with the Operative
Documents.

Certain Costs. The Facility Lessee agrees to pay to the Owner Lessor as
Supplemental Rent (i) overdue interest with respect to the Lessor Notes issued
under the Collateral Trust Indenture if the same is due and payable because of
the occurrence of a Lease Indenture Event of Default which is attributable to a
Lease Event of Default and (ii) an amount equal to any Make-Whole Amount which
has become due and payable with respect to the Lessor Notes under the
Collateral Trust Indenture.

Limitations on Liens. The Facility Lessee shall not, directly or indirectly,
create, assume or permit to exist any Lien, securing a charge or obligation on
the Facility, the Facility Site, or on any of its other properties real or
personal, whether now owned or hereafter acquired, except Permitted Liens.

Investments. The Facility Lessee shall not make or permit to remain outstanding
any advances, loans or extensions of credit to, or purchase or own any stock,
bonds, notes, debentures or other securities of any Person, except Permitted
Investments.

                                      34

<PAGE>

Survey. The Facility Lessee shall use diligent and commercially reasonable
efforts to deliver a copy of the Survey as soon as practicable, such survey to
be an ALTA survey or other survey in form and substance reasonably satisfactory
to the Owner Participant, provided that the failure to do so shall not
constitute, in whole or in part, the basis of any default under any Operative
Document.

Regulations. The Facility Lessee shall not, directly or indirectly, apply the
proceeds of the sale of Lessor Notes or any other revenues to the purchasing or
carrying of any margin stock within the meaning of Regulations T, U or X of the
Federal Reserve Board, or any regulations, interpretations or rulings
thereunder.

Partnerships. The Facility Lessee shall not become a general or limited partner
in any partnership or a joint venturer in any joint venture.

Dissolution. The Facility Lessee shall not liquidate or dissolve, except
pursuant to transactions permitted under Section 5.2.

Termination of Operative Documents. The Facility Lessee shall not without the
prior written consent of the Owner Participant and, except as otherwise
provided in Section 8 of the Collateral Trust Indenture and so long as the Lien
of the Collateral Trust Indenture has not been terminated or discharged, the
Indenture Trustee, (a) cause or consent to or (b) permit, any amendment,
modification, extension, termination, variance or waiver of timely compliance
with any terms or conditions of any Operative Document.

Name and Location. The Facility Lessee shall not change its name or the
location of its chief executive office or place of business without notice to
the Owner Lessor, the Lessor Manager, the Indenture Trustee, the Pass Through
Trustees and the Owner Participant at least thirty (30) days prior to such
change.

Use of Facility Site. The Facility Lessee shall not use, or permit to be used,
the Facility Site for any purpose other than for the operation and maintenance
of the Facility, except as otherwise required or permitted under the Operative
Documents.

Abandonment of Facility. The Facility Lessee shall not voluntarily abandon the
operation, maintenance or repair the Facility, except as otherwise permitted by
the Operative Documents.

Taxes, Other Government Charges and Utility Charges. The Facility Lessee shall
pay, or cause to be paid, as and when due and prior to delinquency, all taxes,
assessments and governmental charges of any kind that may at any time be
lawfully assessed or levied against or with respect to the Facility Lessee, its
interests in the Facility Site and Facility, all utility and other charges
incurred in the operation, maintenance, use, occupancy and upkeep of the
Facility or the Facility Site, and all assessments and charges lawfully made by
any Governmental Entity for public improvements that may be secured by a Lien
on any part of the Facility; provided, that the Facility Lessee may contest in
good faith any such taxes, assessments and other charges and, in such event,
may permit the taxes, assessments or other charges so contested to remain
unpaid during any period, including appeals, when the Facility Lessee is in
good faith contesting the same, so long as (a) adequate reserves consistent
with GAAP requirements (or other security arrangements reasonably satisfactory
to the Indenture Trustee and the Owner Participant) are

                                      35

<PAGE>

established and maintained in an amount sufficient to pay any such taxes,
assessments or other charges, accrued interest thereon and potential penalties
or other costs relating thereto, or other adequate provision for the payment
thereof shall have been made, and (b) any tax, assessment or other charge
determined to be due, together with any interest or penalties thereon, is
immediately paid after resolution of such contest.

Compliance with Laws, Instruments, Etc. At its expense, the Facility Lessee
shall promptly (a) comply or cause compliance with all Applicable Laws,
including those relating to pollution control, environmental protection, equal
employment opportunity plans, Plans and employee safety, with respect to
itself, the Facility or the Facility Site, whether or not compliance therewith
shall require structural changes in the Facility or any part thereof or require
major changes in operational practices or interfere with the use and enjoyment
of the Facility or any part thereof, and (b) procure, maintain and comply, or
cause to be procured, maintained and complied with, all Applicable Permits,
except in the case of clause (a) or (b) above (1) as may be contested in
accordance with Section 7 or 8 of the Facility Lease and (2) the Facility
Lessee may, in good faith and by appropriate proceedings, diligently contest
the validity or application of any such Applicable Laws in any reasonable
manner which does not involve any danger of (i) foreclosure, sale, forfeiture
or loss of, or imposition of a material Lien on the Facility, (ii) impair the
use, operation or maintenance of the Facility in any material respect, (iii)
any criminal liability being incurred by the Owner Participant, the Owner
Lessor, the Lessor Manager, the Indenture Trustee, the Lease Indenture Company,
the Pass Through Trustees, the Pass Through Company or any Certificateholder,
(iv) the Owner Participant, the Owner Lessor, the Lessor Manager, the Indenture
Trustee, the Lease Indenture Company, the Pass Through Trustees, the Pass
Through Company or any Certificateholder being subjected to any unindemnified
civil liability or of the Owner Participant or the Owner Lessor being subject
to regulation as a public utility under Applicable Law, or (v) any Material
Adverse Effect.

PUHCA. The Facility Lessee shall not take any action or fail to take any action
within its control that would subject the Owner Lessor, the Lessor Manager, the
Owner Participant, the Indenture Trustee or the Pass Through Trustees to
regulation under PUHCA.

Further Assurances. The Facility Lessee, at its own cost, expense and
liability, will cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances as may be necessary
in order to carry out the intent and purposes of this Participation Agreement
and the other Operative Documents, and the transactions contemplated hereby and
thereby. The Facility Lessee, at its own cost, expense and liability, will
cause such financing statements and fixture filings (and continuation
statements with respect thereto) as may be necessary and such other documents
as the Owner Participant, the Owner Lessor and, so long as the Lien of the
Collateral Trust Indenture shall not have been terminated or discharged, the
Indenture Trustee and the Pass Through Trustees shall reasonably request to be
recorded or filed at such places and times in such manner, and will take all
such other actions or cause such actions to be taken, as may be necessary in
order to establish, preserve, protect and perfect the right, title and interest
of the Owner Lessor in and to the Undivided Interest, the Ground Interest, any
Component or any portion of any thereof or any interest therein and the first
priority Lien intended to be created by the Collateral Trust Indenture therein.
The Facility Lessee shall promptly from time to time furnish to the Owner
Participant, the Owner Lessor or, so long as the Lien of the Collateral Trust
Indenture shall not have been terminated or discharged, the Indenture

                                      36

<PAGE>

Trustee or the Pass Through Trustees such information with respect to the
Facility or the Facility Site or the transactions contemplated by the Operative
Documents to which the Facility Lessee is a party as may be required to enable
the Owner Participant, the Owner Lessor or, so long as the Lien of the
Collateral Trust Indenture shall not have been terminated or discharged, the
Indenture Trustee or the Pass Through Trustees, as the case may be, to timely
file with any Governmental Entity any reports and obtain any licenses or
permits required to be filed or obtained by the Owner Lessor under any
Operative Document, the Owner Participant as the owner of the Member Interest
or the Indenture Trustee. The Facility Lessee will preserve, protect, defend
and enforce, or cause to be preserved, protected, defended and enforced, the
rights of itself, the Owner Lessor and the Owner Participant under each and
every Operative Document to which it is a party (including by assignment and
assumption of the rights thereunder), including using commercially reasonable
efforts to prosecute suits to enforce any such rights and, at the request of
Indenture Trustee, so long as the Lien of the Collateral Trust Indenture has
not been discharged or terminated (and thereafter at the request of the Owner
Participant), permit the Indenture Trustee and the Owner Participant, at their
respective cost and expense, to participate in such capacity as it may choose
in any such suit, any defense thereof or in the preparation therefor; provided,
however, that upon the occurrence and during the continuance of any Lease Event
of Default, if the Indenture Trustee or the Owner Participant request that
certain actions be taken and the Facility Lessee fails to take the requested
action, or to cause the requested action to be taken within (5) Business Days,
the Indenture Trustee, so long as the Lien of the Collateral Trust Indenture
has not been discharged or terminated, and the Owner Lessor may, at the
Facility Lessee's reasonable expense, enforce, in its own name, or the Facility
Lessee's name, such rights of the Facility Lessee.

No Subsidiaries. The Facility Lessee shall not create or suffer to exist any
Subsidiaries.

Permitted Business. The Facility Lessee shall not engage in any business or
activities other than the lease, operation, maintenance and marketing and sale
of the output, fuel or other products from, or related or incidental to, the
Facility leased by the Facility Lessee. Notwithstanding any of the foregoing
the Facility Lessee may not change the nature of its business.

Support Arrangements. The Facility Lessee agrees that, to the extent that the
rights described in Section 3.1(n) which have already been made available to
the Owner Lessor prior to the expiration or termination of the Facility Lease
Term, and any rights assigned pursuant to the last sentence of this Section
5.30, are insufficient to permit on a commercially practicable basis during the
period following the expiration or termination of the Facility Lease Term,
until the end of the Facility's useful life as set forth in the Closing
Appraisal, (i) the location, occupation, interconnection (including with
respect to electricity, steam, gas and water), maintenance and repair of the
Facility, (ii) the use, operation and possession of the Facility, (iii) the
use, operation, possession, maintenance, replacement, renewal and repair of all
Improvements then required to be made to the Facility, (iv) adequate ingress to
and egress from the Facility in connection with the ownership, use, maintenance
or operation of the Facility, (v) adequate transmission of electricity from the
Facility to enable such Person to deliver the net electrical and steam output
of the Facility on a commercially reasonable basis and (vi) the interest of the
Owner Lessor (or any successor) in the Undivided Interest or the Ground
Interest, the Facility Lessee will cause Calpine to provide, and Calpine will
provide, the Owner Lessor with any additional services relating to the Owner
Lessor's Interest and operation of the Facility substantially in the same

                                      37

<PAGE>

manner as operated as of the Closing Date (to the extent Calpine or any
Affiliate thereof then owns or controls the physical assets and/or contractual
rights necessary to provide such services (or can enter into contracts on a
commercially reasonable basis for such ownership, control or other rights) and
remains in the business of providing such services) necessary to permit the
Owner Lessor to use the Facility as described in (i) through (vi) above. Such
arrangements will provide for fair market value compensation to Calpine
(payable periodically on no more frequently than a monthly and no less
frequently than on a quarterly basis) and will terminate upon the expiration or
termination of the Facility Site Lease, or earlier at the option of the Owner
Lessor. The Facility Lessee shall also, subject to obtaining any required third
party consents, assign to the Owner Lessor upon termination of the Facility
Lease any support or similar agreements to the extent relating to the Facility
it has with third parties.

Insurance. The Facility Lessee shall comply with the covenants set forth in
Schedule 5.31.

Tax Status. The Facility Lessee and each Person owning an Ownership Interest
therein will not voluntarily take any action to cause the Facility Lessee to be
subject to taxation as a separate entity for federal income tax purposes.

Transmission Assets.

If and to the extent that on the Closing Date the FERC Order referred to in
     clause (v) of the definition thereof has not been obtained with respect
     to the jurisdictional facilities referred to therein (which facilities are
     identified in Exhibit A as Transmission Assets (the "Transmission
     Assets")), the Owner Participant shall, upon 5 days' prior written notice
     to the Facility Lessee, and subject to the grant of the aforesaid order,
     cause the Owner Lessor to acquire an undivided interest equal to the Owner
     Lessor's Percentage in the Facility Lessee's right, title and interest in
     the Transmission Assets, for a price equal to $1.00. Upon payment by the
     Owner Lessor of such amount, the Facility Lessee shall execute and deliver
     such documentation as is reasonably requested by the Owner Lessor to
     transfer such undivided interest in the Facility Lessee's right, title and
     interest in the Transmission Assets to the Owner Lessor. Upon such
     transfer such Undivided Interest shall be and shall be deemed to be an
     integral part of the Undivided Interest (to the extent constituting a
     portion of the Facility) and the Ground Interest (to the extent
     constituting a portion of the leasehold interest in the Facility Site) for
     all purposes of the Operative Documents without the necessity of amending
     or supplementing any Operative Document, subject nevertheless to Section
     14.15 hereof.

Without limiting Section 10 hereof or Section 4.2 of the Facility Lease,
     the Facility Lessee agrees that from and after the Closing Date and until
     the earlier to occur of (A) the transfer referred to in clause (a) above
     and (B) the termination of the Facility Lease, the Facility Lessee shall
     make available to the Owner Lessor, for no additional compensation, such
     rights in the Transmission Assets solely to the extent as shall be
     necessary so that the representation in Section 3.1(n) will be correct to
     the same extent as if such transfer had occurred on the Closing Date.

                                      38

<PAGE>

COVENANTS OF THE OWNER LESSOR, THE TRUST COMPANY AND THE LESSOR MANAGER

Compliance with the LLC Agreement. Each of the Owner Lessor, the Trust Company
and the Lessor Manager hereby severally covenants and agrees that during the
Facility Lease Term it will:

comply with all of the terms of the LLC Agreement applicable to it; and

not amend, supplement, or otherwise modify Section 9.1, 9.3, 13.1 or
     clause (i) of Section 13.2 of the LLC Agreement without the prior written
     consent of the Facility Lessee so long as no Significant Lease Default or
     Lease Event of Default has occurred and is continuing and the Indenture
     Trustee so long as the Lien of the Collateral Trust Indenture has not
     been terminated or discharged.

                                      39

<PAGE>

Owner Lessor's Liens. The Owner Lessor, the Trust Company and the Lessor
Manager each covenants severally and as to itself only that it will not
directly or indirectly create, incur, assume or suffer to exist any Owner
Lessor's Lien attributable to it and will promptly notify the Facility Lessee,
the Owner Participant and the Indenture Trustee of the imposition of any such
Lien of which it has Actual Knowledge and shall promptly, at its own expense,
take such action as may be necessary to duly discharge such Owner Lessor's Lien
attributable to it.

Amendments to Operative Documents. The Lessor Manager, the Trust Company and
the Owner Lessor each covenants severally and as to itself only that it will
not unless such action is expressly permitted by the Operative Documents (a)
through its own action terminate any Operative Document to which it is a party,
(b) amend, supplement, waive or modify (or consent to any such amendment,
supplement, waiver or modification) such Operative Documents in any manner or
(c) except as provided in Section 11 hereof or Section 2.10 or Section 5.6 of
the Collateral Trust Indenture, take any action to prepay or refund the Lessor
Notes or amend any of the payment terms of the Lessor Notes without, in each
case, the prior written consent of the Facility Lessee so long as no
Significant Lease Default or Lease Event of Default shall have occurred and be
continuing and, in the case of clause (a) or (b), the Indenture Trustee so long
as the Lien of the Collateral Trust Indenture has not been terminated or
discharged.

Transfer of the Owner Lessor's Interest. Other than as permitted by the
Operative Documents, each of the Lessor Manager and the Owner Lessor covenants
that it will not assign, pledge, sell, lease, convey or otherwise transfer any
of its then existing right, title or interest in and to the Owner Lessor's
Interest, the Lessor Estate or the other Operative Documents.

Owner Lessor; Lessor Estate. Each of the Trust Company, the Lessor Manager and
the Owner Lessor covenants that it will not voluntarily take any action to
subject the Owner Lessor or the Lessor Estate to the provisions of any
applicable bankruptcy, insolvency or similar law (as now or hereafter in
effect).

Limitation on Indebtedness and Actions. Each of the Lessor Manager and the
Owner Lessor covenants that it will not incur any Indebtedness nor enter into
any business or activity except as required or expressly permitted by any
Operative Document.

Change of Location. The Owner Lessor shall provide the Owner Participant, the
Indenture Trustee, the Certificateholders, the Pass Through Trustees and the
Facility Lessee 30 days' written notice of any relocation of the Owner Lessor's
chief executive office or the place where documents and records relating to the
Owner Lessor or the Lessor Estate are kept from the location set forth in
Section 3.2(g) and of any change in its name.

Bankruptcy of Owner Lessor. Each of the Trust Company, the Lessor Manager and
the Owner Lessor hereby agrees severally and as to itself only that it shall
not voluntarily take any action that shall, or cause any action to be taken
that is intended to, submit the Owner Lessor, as debtor, to any proceeding
under any Applicable Law involving bankruptcy, insolvency, reorganization or
other laws affecting the rights of creditors generally unless a Lease Event of
Default or a Significant Lease Default shall have occurred and be continuing
(in which case, if the Lien of the Collateral Trust Indenture shall not have
been discharged, the Trust Company or the Owner

                                      40

<PAGE>

Lessor shall not take any such action unless the Indenture Trustee shall have
given its prior written consent to such action in its sole discretion.

COVENANTS OF THE OWNER PARTICIPANT

Restrictions on Transfer of Member Interest.

The Owner Participant covenants and agrees that it shall not during the
     Facility Lease Term assign, convey or transfer any of its right, title or
     interest in the Member Interest without the prior written consent of the
     Facility Lessee and, so long as the Lien of the Collateral Trust Indenture
     has not been terminated or discharged, without the prior written consent
     of the Indenture Trustee; provided, however, that the Owner Participant
     may, subject to Section 7.6, assign, convey or transfer all or any part of
     its interest in the Member Interest without such consent to a Person (the
     "Transferee") which shall assume the duties and obligations of the Owner
     Participant under the Operative Documents with respect to the interest
     being transferred pursuant to an OP Assignment and Assumption Agreement
     substantially in the form of Exhibit J hereto, if each of the following
     conditions shall have been satisfied on or prior to such transfer:

the Facility Lessee, the Indenture Trustee and the Pass Through Trustees
     shall have received an opinion(s) of counsel (including an opinion with
     respect to a guaranty pursuant to clause (iii) of this Section 7.1, if
     applicable), which opinion(s) and counsel are reasonably satisfactory to
     each such recipient and consistent in scope to the opinions delivered on
     behalf of the Owner Participant at the Closing, including that all
     regulatory approvals required in connection with such transfer or
     necessary to assume the Owner Participant's obligations under the
     Operative Documents shall have been obtained and that the proposed
     transfer of the Member Interest will not require registration under the
     Securities Act;

the Transferee shall be a "United States person" within the meaning of
     Section 7701(a)(30) of the Code;

the Transferee shall be either (A) an Affiliate of the transferor Owner
     Participant which does not otherwise qualify under clause (B) below (but
     in any event, such Affiliate shall not be a Competitor of Calpine);
     provided that all of the payment and performance obligations of the
     Transferee with respect to the interest being transferred under the
     Operative Documents shall be guaranteed by the transferor Owner
     Participant, or a Person then providing a guaranty of the transferor Owner
     Participant's obligations hereunder, pursuant to an OP Parent Guaranty or
     (B) a Person which meets, or the payment and performance obligations of
     which with respect to the interest being transferred under the Operative
     Documents are guaranteed (pursuant to a OP Parent Guaranty) by a Person
     (the transferor Owner Participant or such other guarantor, the "Transferee
     Guarantor") which meets, the following criteria: (1) the tangible net
     worth of the Transferee or Transferee Guarantor, is at least equal to $75
     million calculated in accordance with GAAP; and (2) unless waived in
     writing by the Facility Lessee prior to such transfer, such Transferee is
     not a Competitor of Calpine or in material litigation against the Facility
     Lessee or any Affiliate of the Facility Lessee without the consent of the
     Facility Lessee; and

                                      41

<PAGE>

upon consummation of such transfer, there shall not be more than four (4)
     Owner Participants for the Overall Transaction; provided that any related
     Owner Participants that shall have the same decision maker and vote their
     interest together as a single vote shall count as one for purposes of this
     clause (iv).

          Notwithstanding the foregoing, the restrictions set forth in
Section 7.1 shall not inure to the benefit of the Facility Lessee if such
transfer occurs during the continuance of a Significant Lease Default or Lease
Event of Default.

For purposes of determining whether a Transferee is a "Competitor" of
     Calpine, Calpine shall provide to the transferor Owner Participant on or
     prior to the Closing Date a list of entities which Calpine reasonably
     believes in its good faith judgment are competitors of Calpine or any of
     its Affiliates, in the business in which Calpine or any of its Affiliates
     is engaged as of the Closing Date, which list shall be attached to this
     Agreement as Exhibit K. Any such Person on such list shall be deemed to be
     a "Competitor" for purposes of Section 7.1(a). The initial list of
     Competitors may be modified or supplemented (in a manner consistent with
     the first sentence of this clause (b)), from time to time, but no later
     than five (5) Business Days after the Facility Lessee receives each notice
     from the Owner Participant of its intent to transfer its interest and, in
     addition, no more than once in any calendar year plus each time the
     Facility Lessee receives such notice of transfer from the Owner
     Participant, and such list as modified shall govern for the purposes of
     this Section 7.1(b).

The Facility Lessee shall not be responsible for any adverse tax
     consequence to the Owner Lessor or the Owner Participant resulting from
     any transfer pursuant to this Section 7.1 and the Pricing Assumptions
     shall not be changed as a result of any such transfer.

The Owner Participant shall give the Owner Lessor, the Indenture Trustee
     and the Facility Lessee ten (10) Business Days' prior written notice of
     such transfer, specifying the name and address of any proposed Transferee
     and such additional information as shall be necessary to determine whether
     the proposed transfer satisfies the requirements of this Section 7.1. If
     requested by the Owner Participant or the Indenture Trustee, the Facility
     Lessee will acknowledge qualifying transfers. All reasonable fees,
     expenses and charges of the Indenture Trustee, the Pass Through Trustees,
     and the Facility Lessee (including reasonable attorneys' fees and expenses
     in connection with any such transfer or proposed transfer), including any
     of the foregoing relating to any amendments to the Operative Documents
     required in connection therewith, shall be paid on an After-Tax Basis by
     the Owner Lessor, without any right of indemnification from the Facility
     Lessee or any other Person; provided, however, that the Owner Participant
     shall have no obligation to pay fees, expenses or charges of the Facility
     Lessee as a result of any transfer while a Significant Lease Default or a
     Lease Event of Default is continuing, in which case the Facility Lessee
     shall be obligated to pay such costs.

Upon any such transfer in compliance with this Section 7.1, (i) such
     Transferee shall (x) be deemed the "Owner Participant" for all purposes,
     and (y) enjoy the rights and privileges and perform the obligations of the
     Owner Participant hereunder and under each of the OP Assignment and
     Assumption Agreement, the Calpine Guaranty and each other Operative
     Document to which such Owner Participant is a party, and each reference in
     this Agreement,

                                      42

<PAGE>

     the Calpine Guaranty and each other Operative Document to the "Owner
     Participant" shall thereafter be deemed to include such Transferee for all
     purposes and (ii) the transferor Owner Participant and the OP Guarantor,
     if any, of such transferor Owner Participant's obligations shall be
     released from all obligations hereunder and under each other Operative
     Document to which such transferor or OP Guarantor is a party or by which
     such transferor Owner Participant or OP Guarantor is bound to the extent
     such obligations are expressly assumed by a Transferee meeting the
     requirements of this Section 7.1; provided, however, that in no event
     shall any such transfer waive or release the transferor or its OP
     Guarantor from any liability accruing or existing in respect of any period
     occurring on or prior to or occurring simultaneously with such transfer.

The transfer restrictions set forth in Section 7.1 (other than the
     requirement that the Owner Participant and the Transferee enter into an OP
     Assignment and Assumption Agreement) shall also apply to any transfer of
     the equity ownership interests of an Owner Participant which has as its
     sole (or substantially equivalent to sole) business activity its
     participation in the transactions contemplated by the Operative Documents.
     In the case of such a transfer of equity ownership interests which
     satisfies such restrictions of this Section 7.1, the Owner Participant's
     obligations under the Operative Documents shall continue, but the Owner
     Participant shall, except in the case of a transfer to a transferee
     described in clause (a)(iii)(A) above, procure a new OP Parent Guaranty
     from a guarantor meeting the requirements of clause (a)(iii)(B) above.

                                      43

<PAGE>

Owner Participant's Liens. The Owner Participant covenants that it will not
directly or indirectly create, incur, assume or suffer to exist any Owner
Participant's Lien and the Owner Participant shall promptly notify the Facility
Lessee and the Indenture Trustee of the imposition or existence of any such
Lien of which the Owner Participant has Actual Knowledge and shall promptly, at
its own expense, take such action as may be necessary to duly discharge such
Owner Participant's Lien.

Amendments or Revocation of LLC Agreement. Notwithstanding anything to the
contrary contained in the LLC Agreement, the Owner Participant covenants that
during the Facility Lease Term it will not (a) amend, supplement, or otherwise
modify Section 9.1, 9.3, 13.1 or clause (i) of 13.2 of the LLC Agreement
without the prior written consent of the Facility Lessee so long as no
Significant Lease Default or Lease Event of Default has occurred and is
continuing, and without the prior written consent of the Indenture Trustee so
long as the Lien of the Collateral Trust Indenture has not been terminated or
discharged, or (b) revoke, or otherwise waive compliance with or terminate the
LLC Agreement without the prior written consent of the Facility Lessee so long
as no Significant Lease Default or Lease Event of Default has occurred and is
continuing, and the Indenture Trustee so long as the Lien of the Collateral
Trust Indenture has not been terminated or discharged.

Bankruptcy Filings. The Owner Participant agrees that it will not file a
petition, or join in the filing of a petition, seeking reorganization,
arrangement, adjustment or composition of, or in respect of, the Owner Lessor
under the Bankruptcy Code, or any other applicable federal or state law or the
law of the District of Columbia.

Instructions. The Owner Participant agrees that it will not instruct the Owner
Lessor to take any action prohibited by this Agreement or any other Operative
Document.

Right of First Refusal. In the event the Owner Participant desires to sell,
lease, convey or otherwise transfer its Member Interest or cause the Owner
Lessor to sell all or substantially all of the Owner Lessor's Interest at any
time during the three (3) year period commencing on the termination or
expiration of the Facility Lease (except in the event that a Lease Event of
Default shall have existed at such time of termination or expiration), any such
sale or other transfer shall be subject to the Facility Lessee's right of first
refusal on the terms and conditions set forth in this Section 7.6. The Owner
Participant shall give the Facility Lessee prompt written notice of all bona
fide offers that have been received from any other Person to purchase or
acquire its interest of the Owner Lessor's Interest or the Member Interest of
the Owner Participant, and which offers it wishes to accept, together with a
full and complete statement of the price and all of the terms, conditions and
provisions contained in such offers. The Facility Lessee shall thereafter have
the right within a period of 45 days from and after the receipt by them of such
notice (the "Notice Period") to notify the Owner Participant of its intent to
exercise its right of first refusal. If the Facility Lessee elects to exercise
the right provided in the preceding sentence, it will within 60 days of such
notice (the "Agreement Period") execute a contract on the same terms and
conditions as the offer giving rise to such right. If the Facility Lessee does
not give such notice to the Owner Participant within the 45 day period or
execute such a contract within 60 days of such notice, the Owner Participant
will be free to proceed under the terms and conditions set forth in its notice
to the Facility Lessee, unless the failure to execute the contract within 60
days is attributable to acts or omissions of the Owner Participant. In the
event that

                                      44

<PAGE>

such terms are revised in any way that changes the agreement for sale, lease,
conveyance or transfer such that the terms of the sale are less favorable to
the Owner Participant (it being understood and agreed that any reduction in the
price or a change in the terms of payment thereof in a manner beneficial to the
potential purchaser shall be deemed to be less favorable to the Owner
Participant), the Owner Participant shall again comply with the notice and
right of first refusal provisions of this Section prior to entering into such
revised agreement; provided that, for such revised offer, the Notice Period
shall be 10 Business Days from the date of such new notice, and the Agreement
Period shall not exceed 45 days from the date of the Facility Lessee's notice
accepting such new terms.

          Notwithstanding the foregoing, if, concurrently with the Owner
Participant's offer to sell its Member Interest pursuant to this Section 7.6,
it or one of its Affiliates offers to sell any interest in an owner lessor who
has entered into any Other RockGen Facility Lease, then the Facility Lessee
shall exercise its purchase rights under this Section 7.6 only if, concurrently
therewith, it exercises its purchase rights under Section 7.6 of each such
Other RockGen Facility Lease.

Prohibition on Fundamental Changes. If the Owner Participant is an entity which
has as its sole (or substantially equivalent to sole) business activity, the
participation in the transactions contemplated by the Operative Documents, the
Owner Participant shall not change its form of organization and shall not enter
into or engage in any business other than as contemplated by the Operative
Documents and the activities related thereto.

Appointment of Successor Lessor Manager. Notwithstanding any other provision of
this Agreement, a successor Lessor Manager shall not be appointed by the Owner
Participant without the consent of the Facility Lessee and, so long as the Lien
of the Collateral Trust Indenture has not been terminated or discharged and the
Indenture Trustee unless such successor Lessor Manager (a) meets the
requirements of the LLC Agreement, (b) has a combined capital and surplus of at
least $150 million, and (c) the Facility Lessee and, so long as Lien of the
Collateral Trust Indenture has not been terminated or discharged, the Indenture
Trustee, shall have received at the expense of Facility Lessee on an After-Tax
Basis: (i) an opinion or opinions of counsel, such counsel and such opinion to
be reasonably acceptable to such parties, to the effect that no regulatory
consents or approvals are required, or (ii) such other documentation reasonably
satisfactory to the Facility Lessee or the Indenture Trustee as the case may be.

Cooperation. The Owner Lessor agrees, and each of the Owner Participant and the
Lessor Manager agree to cause the Owner Lessor to, at the request of the
Facility Lessee and at the sole cost and expense of the Facility Lessee on an
After-Tax Basis, take such actions as may be necessary for the Owner Lessor to
take as the holder of the leasehold interest in the Facility for purposes of
obtaining the valid and effective issue, transfer or amendment, as the case may
be, of all Governmental Approvals to the extent the same are required for the
use, ownership, operation or maintenance of the Facility, the Facility Site,
the Undivided Interest, the Ground Interest or any Component by the Facility
Lessee or any permitted assignee of the Facility Lessee in the manner
contemplated by the Operative Documents, except to the extent the same involves
any (i) material risk of foreclosure, sale, forfeiture or loss of, or
imposition of a Lien (other than a Permitted Lien) on, the Facility, the
Undivided Interest or the Facility Site or the impairment of

                                      45

<PAGE>

the use, operation or maintenance of the Facility or the Facility Site in any
material respect, (ii) the risk of criminal liability being incurred by the
Owner Lessor, the Owner Participant, the Equity Investor or the OP Guarantor,
or (so long as the Lessor Notes are outstanding and the Lien of the Lease
Indenture has not been discharged) the Indenture Trustee or the Pass Through
Trustee or any of their respective Affiliates or (iii) material risk of any
material adverse effect on the interests of the Owner Lessor, the Owner
Participant, the Equity Investor or the OP Guarantor, or (so long as the Lessor
Notes are outstanding and the Lien of the Collateral Trust Indenture has not
been discharged) the Indenture Trustee or the Pass Through Trustee or any of
their respective Affiliates (including, without limitation, subjecting any such
Person to regulation as a public utility under any applicable law. The Facility
Lessee shall pay on an After-Tax Basis all reasonable costs and expenses
(including, without limitation, the reasonable fees and expenses of counsel) of
the Owner Lessor and each other Person party to an Operative Document incurred
in connection with any such action. It is understood and agreed that, with
respect to the action requested of it, and taken by it, under this Section 7.9,
the Owner Lessor, the Owner Participant and the Lessor Manager shall make no
representation or warranty as to, and shall have no responsibility for, the
effectiveness of such action to accomplish or promote the objective intended by
the Person making such request.

COVENANTS OF THE INDENTURE TRUSTEE AND THE PASS THROUGH TRUSTEES

Indenture Trustee's Liens. Neither the Lease Indenture Company, nor the
Indenture Trustee will directly or indirectly create, incur, assume or suffer
to exist any Indenture Trustee's Lien attributable to it and arising out of
events or conditions not related to its rights in the Indenture Estate or the
administration thereof, and will promptly notify the Owner Participant, the
Lessor Manager, the Owner Lessor and the Facility Lessee of the imposition of
any such Lien of which it has Actual Knowledge and shall promptly (and in any
event within 30 days of obtaining Actual Knowledge of such Lien), at its own
expense, take such action as may be necessary to duly discharge such Indenture
Trustee's Lien.

Pass Through Trustees' Covenant Not to Transfer Lessor Notes. The Pass Through
Trustees agree that it will not transfer any Lessor Note (or any part thereof)
to any entity (except to a successor Pass Through Trustee appointed pursuant to
the terms of the Pass through Trust Agreement) until it receives from such
entity a certification which makes a representation and warranty as of the date
of such transfer that no part of the funds to be used by it for the purchase
and holding of such Lessor Note (or any part thereof) constitutes assets of any
Plan or that such purchase and holding will be covered by a prohibited
transaction class exemption issued by the U.S. Department of Labor.

INDEMNIFICATION

General Indemnity.

Claims Indemnified. Subject to the exclusions stated in paragraph (b)
     below, the Facility Lessee agrees to indemnify, protect, defend and hold
     harmless, and do hereby indemnify the Owner Participant, the Owner Lessor,
     the Trust Company, in its individual capacity, the Lessor Manager, the
     Lease Indenture Company in its individual capacity, the Indenture Trustee,
     each Certificateholder, the Pass Through Company in its individual
     capacity, the Pass

                                      46

<PAGE>

     Through Trustees, and their respective Affiliates, successors, assigns,
     agents, directors, officers and employees (each an "Indemnitee") against
     any and all Claims (whether or not any of the transactions contemplated by
     the Operative Documents are consummated) imposed on, incurred or suffered
     by or asserted against any Indemnitee in any way relating to or resulting
     from or arising out of or attributable to:

the construction, financing, refinancing, acquisition, operation,
     rebuilding, warranty, ownership, possession, maintenance, repair, lease,
     condition, alteration, modification, restoration, refurbishing, return,
     purchase, sale or other disposition, insuring, sublease, or other use or
     non-use of the Undivided Interest, the Ground Interest, the Facility, the
     Facility Site, or any Component or any portion of any thereof or any
     interest therein;

the conduct of the business or affairs of the Facility Lessee or Calpine
     and any other business or affairs conducted at the Facility or the
     Facility Site;

the manufacture, design, purchase, acceptance, rejection, delivery or
     condition of, or improvement to, the Facility, the Facility Site, or any
     Component, or any portion of any thereof or any interest therein;

the Facility Lease, the Facility Site Lease, the Facility Site Sublease,
     or any other Operative Document, the execution or delivery thereof or the
     performance, enforcement, attempted enforcement or amendment of any terms
     thereof, or the transactions contemplated thereby or resulting therefrom;

any Environmental Condition at, related to or caused by the Facility, the
     Facility Site or any Component, or any portion thereof, including, for the
     avoidance of doubt, any such Environmental Condition existing prior to the
     Closing Date;

the offer, issuance, sale, acquisition or delivery of the Lessor Notes,
     the Certificates, any Additional Lessor Notes, any Additional Certificates
     or any refinancing thereof;

the reasonable and documented costs and expenses of the Transaction
     Parties in connection with amendments or supplements to the Operative
     Documents requested by the Facility Lessee, or resulting from the actions
     of the Facility Lessee or in connection with any Lease Default or Lease
     Event of Default;

the imposition of any Lien other than with respect to a particular
     Indemnitee (or a Related Party), an Owner Lessor's Lien, an Owner
     Participant's Lien or Indenture Trustee's Lien attributable to such
     Indemnitee;

any violation by, or liability relating to, the Facility Lessee or any
     other Calpine Party, the Facility or the Facility Site, of, or under, any
     Applicable Law, whether now or hereafter in effect (including
     Environmental Laws), or any action of any Governmental Entity or other
     Person taken with respect to the Facility, the Facility Site, the
     Operative Documents or the interests of the Owner Participant, the Owner
     Lessor, the Indenture Trustee or the Pass Through Trustees, or under the
     Operative Documents or the presence, use, storage, release, threatened
     release, transportation, arrangement for transportation, treatment,
     arrangement for treatment, manufacture, disposal or arrangement for
     disposal of any Hazardous Substance in,

                                      47

<PAGE>

     at, under or from the Facility or the Facility Site, including, for the
     avoidance of doubt, any of the foregoing existing or occurring prior to
     the Closing Date;

the non-performance or breach by the Facility Lessee or any Calpine Party
     of any obligation contained in this Agreement or any other Operative
     Document or the falsity or inaccuracy of any representation, warranty or
     obligation of any such Person contained in this Agreement or any other
     Operative Document;

the continuing fees (if any) and expenses of the Owner Lessor and the
     Lessor Manager (including the reasonable compensation and expenses of
     their respective counsel) arising out of the Owner Lessor's discharge of
     its duties under or in connection with the Operative Documents (other than
     the Facility Lease and the Facility Site Lease);

the continuing fees (if any) and expenses of the Lease Indenture Company,
     the Indenture Trustee, the Pass Through Company, the Pass Through
     Trustees, (including the reasonable compensation and expenses of their
     respective counsel, accountants and other professional persons) arising
     out of the discharge of their respective duties as provided in the
     Operative Documents; or

any Applicable Permits including any obligations imposed by FERC in
     connection with the Facility or the Facility Site.

Claims Excluded. Any Claim, to the extent relating to or resulting from or
     arising out of or attributable to any of the following, is excluded from
     the Facility Lessee's obligations to indemnify, defend, protect and hold
     harmless any Indemnitee under this Section 9.1:

(A)  acts, omissions or events with respect to the Facility first occurring
     after the later of (x) expiration or early termination of the Facility
     Lease and, where required by the Facility Lease, surrender to the Owner
     Lessor or its successor of its interest in the Facility in compliance with
     the provisions of the Facility Lease or (y) if the Owner Lessor exercises
     its option set forth in Article VI of the Facility Site Lease, the
     performance by the Facility Lessee of all obligations required to be
     performed by it thereunder, or (B), if the Closing Date does not occur,
     acts, omission or events occurring after the date set forth in Section
     2.2(e);

with respect to a particular Indemnitee and Related Parties, any offer,
     sale, assignment, transfer or other disposition (voluntary or involuntary)
     by or on behalf of (A) in the case of the Owner Participant, the Owner
     Participant of its Member Interest or with respect to any Related Party,
     its direct or indirect interest in the Owner Participant, (B) in the case
     of the Owner Lessor, and if such action is taken at the written direction
     of the Owner Participant, the Owner Participant, and Related Parties, the
     Owner Lessor of all or any of the Owner Lessor's Interest, (C) the
     Indenture Trustee of all or any of its interest in the Lessor Notes,
     unless, in any such case referred to in this paragraph (ii), such transfer
     is required by the terms of the Operative Documents or occurs during the
     continuance of a Lease Event of Default; (provided that this paragraph
     (ii) shall not serve to cap the indemnity to be received by a transferee
     Indemnitee for a Claim (other than a Claim relating solely to or arising
     solely out of any offer, transfer, sale, assignment or other disposition
     of any such rights or interests)

                                      48

<PAGE>

     based on what the relevant transferor Indemnitee would have received had
     no such transfer occurred);

with respect to any Indemnitee, any Claim attributable to (i) the gross
     negligence or willful misconduct of such Indemnitee or a Related Party
     except to the extent such gross negligence or willful misconduct is
     attributable to any breach by the Facility Lessee (or any of them) or any
     other Calpine Party of any covenant, representation or warranty contained
     in any Operative Document or (ii) any violation of Applicable Law by any
     such Person except to the extent attributable to a violation of Applicable
     Law by the Facility Lessee or any other Calpine Party or to any breach by
     the Facility Lessee or such other Calpine Party of any covenant,
     representation or warranty contained in any Operative Document;

as to any Indemnitee, any Claim to the extent attributable to the
     noncompliance of such Indemnitee or a Related Party, with any of the terms
     of, or any misrepresentation or breach of warranty by such Indemnitee or
     Related Party contained in any Operative Document made by such Indemnitee
     or Related Party or any breach by such Indemnitee or a Related Party of
     any covenant contained in any Operative Document or any breach by such
     Indemnitee or a Related Party of any covenant contained in any Operative
     Document made by such Indemnitee or Related Party except to the extent
     attributable to any breach by the Facility Lessee or any other Calpine
     Party of any covenant, representation or warranty contained in any
     Operative Document;

any Claim constituting or arising from an Owner Lessor's Lien;

with respect to the Indenture Trustee and the Lease Indenture Company, any
     Claim constituting or arising from a Indenture Trustee's Lien;

with respect to the Owner Participant, any claim constituting or arising
     from an Owner Participant's Lien;

any Claim that is a Tax, or is a cost of contesting a Tax whether or not
     the Facility Lessee is required to indemnify therefor pursuant to Section
     9.2 hereof or under the Tax Indemnity Agreement;

any failure on the part of the Lessor Manager to distribute in accordance
     with the LLC Agreement any amounts received by it under the Operative
     Documents and distributable by it thereunder;

a Claim arising out of a Indenture Default or Lease Indenture Event of
     Default that is not also (or attributable to) a Lease Default or Lease
     Event of Default;

with respect to a particular Indemnitee and Related Party, any obligation
     or liability expressly assumed in any Operative Document by the Indemnitee
     seeking indemnification;

any Claim that constitutes scheduled principal and/or interest on the
     Lessor Notes, Additional Lessor Notes, or the corresponding payments under
     the Certificates or any Additional Certificates; and

                                      49

<PAGE>

any Claim relating to the payment of any amount which constitutes
     Transaction Costs which the Owner Participant is obligated to pay pursuant
     to Section 2.3(a) hereof or any other amount to the extent such Indemnitee
     or a Related Party has expressly agreed in any Operative Document to pay
     such amount without express right of reimbursement;

provided that the terms "omission," "gross negligence" and "willful
misconduct," when applied with respect to the Owner Lessor, the Owner
Participant, the Indenture Trustee, the Pass Through Trustees or any Affiliate
of any thereof, shall not include any liability imputed as a matter of law to
such Indemnitee solely by reason of any such entity's interest in the Facility
or the Facility Site or such Indemnitee's failure to act in respect of matters
which are or were the obligation of the Facility Lessee under this Agreement or
any other Operative Document. Nothing herein shall be deemed to constitute a
guaranty of any useful life or any present or future residual value of the
Facility or a guaranty that any amount of any Secured Indebtedness will be
paid.

Insured Claims. Subject to the provisions of paragraph (e) of this Section
     9.1, in the case of any Claim indemnified by the Facility Lessee hereunder
     which is covered by a policy of insurance maintained by the Facility
     Lessee, each Indemnitee agrees, unless it and each other Indemnitee shall
     waive its rights to indemnification (for itself and each Related Party
     thereto) in a manner reasonably acceptable to the Facility Lessee, to
     cooperate, at the sole cost and expense of the Facility Lessee, with
     insurers in exercise of their rights to investigate, defend or compromise
     such Claim.

After-Tax Basis. The Facility Lessee agrees that any payment or indemnity
     pursuant to this Section 9.1 in respect of any Claim shall be made on an
     After-Tax Basis to the Indemnitees.

Claims Procedure. Each Indemnitee shall promptly after such Indemnitee
     shall have Actual Knowledge thereof notify the Facility Lessee of any
     Claim as to which indemnification is sought; provided, that the failure so
     to notify the Facility Lessee shall not reduce or affect the Facility
     Lessee's liability which it may have to such Indemnitee under this Section
     9.1, and no payment hereunder by the Facility Lessee to an Indemnitee
     shall be deemed to constitute a waiver or release of any right or remedy
     that the Facility Lessee may have against any such Indemnitee for actual
     damages resulting directly from the failure or delay of such Indemnitee to
     give the Facility Lessee such notice. Subject to the foregoing, any amount
     payable to any Indemnitee pursuant to this Section 9.1 shall be paid
     within thirty (30) days after receipt of such written demand therefor from
     such Indemnitee, accompanied by a certificate of such Indemnitee stating
     in reasonable detail the basis for the indemnification thereby sought and
     (if such Indemnitee is not a party hereto) an agreement to be bound by the
     terms hereof as if such Indemnitee were such a party. The foregoing shall
     not, however, constitute an obligation to disclose confidential
     information of any kind without the execution of an appropriate
     confidentiality agreement. Promptly after the Facility Lessee receives
     notification of such Claim accompanied by a written statement describing
     in reasonable detail the Claims which are the subject of and basis for
     such indemnity and the computation of the amount so payable, the Facility
     Lessee shall, without affecting its obligations hereunder, notify such
     Indemnitee whether it intends to pay, object to, compromise or defend any
     matter involving the asserted liability of such Indemnitee. The Facility
     Lessee shall have the right to investigate and so long as no Significant
     Lease Default or Lease Event of Default

                                      50

<PAGE>

     shall have occurred and be continuing, the Facility Lessee shall have the
     right in its sole discretion, to defend or compromise any Claim for which
     indemnification is sought under this Section 9.1 which the Facility Lessee
     acknowledges is subject to indemnification hereunder; provided that no
     such defense or compromise shall involve any danger of (i) foreclosure,
     sale, forfeiture or loss of, or imposition of a Lien on any part of the
     Facility, the Undivided Interest, the Ground Interest, the Facility Site,
     the Lessor Estate or the Indenture Estate or the impairment of the
     Facility or the Facility Site, in any material respect or (ii) any
     criminal liability being incurred or any material adverse effect on such
     Indemnitee; provided, further, that no Claim shall be compromised by the
     Facility Lessee on a basis that admits any criminal violation or gross
     negligence or willful misconduct on the part of such Indemnitee without
     the express written consent of such Indemnitee; and provided, further,
     that to the extent that other Claims unrelated to the transactions
     contemplated by the Operative Documents are part of the same proceeding
     involving such Claim, the Facility Lessee may assume responsibility for
     the contest or compromise of such Claim only if the same may be and is
     severed from such other Claims (and each Indemnitee agrees to use
     reasonable efforts to obtain such a severance). In the event that in the
     course of the investigation or defense of a claim, the Facility Lessee
     shall in good faith reasonably determine that it is not liable for
     indemnification with respect thereto under this Section 9.1, it may give
     notice to the applicable Indemnitee of such fact; and, in such case, any
     acknowledgment, theretofore made by the Facility Lessee of liability with
     respect to such claim under this Section 9.1 shall be deemed revoked, and
     the Facility Lessee may thereupon cease to defend such claim; provided
     that (i) the Facility Lessee shall have given the Indemnitee reasonable
     prior notice of its intention to renounce such acknowledgment, (ii) the
     Facility Lessee's conduct regarding the defense of such claim or any
     decision to withdraw from such defense shall not prejudice or have
     prejudiced the Indemnitee's ability to contest such claim (taking into
     account, among other things, the timing of the Facility Lessee's
     withdrawal and the theory or theories upon which the Facility Lessee shall
     have based its defense), and (iii) the Facility Lessee shall have given
     such Indemnitee all materials, documents and records relating to its
     defense of such claim as such Indemnitee shall have reasonably requested
     in connection with the assumption by such Indemnitee of the defense of
     such claim at the cost and expense of the Facility Lessee. In the event
     that the Facility Lessee shall cease to defend any claim pursuant to the
     preceding sentence, the Facility Lessee shall indemnify each Indemnitee,
     without regard to any exclusion that might otherwise apply hereunder, to
     the extent that the actions of the Facility Lessee in defending such claim
     or the manner or time of the Facility Lessee's election to withdraw from
     the defense of such claim shall have caused such Indemnitee to incur any
     loss, cost, liability or expense which such Indemnitee would not have
     incurred had the Facility Lessee not ceased to defend such claim in such
     manner or such time. If the Facility Lessee elect, subject to the
     foregoing, to compromise or defend any such asserted liability, it may do
     so at its own expense and by counsel selected by it. Upon the Facility
     Lessee's election to compromise or defend such asserted liability and
     prompt notification to such Indemnitee of its intent to do so, such
     Indemnitee shall cooperate at the Facility Lessee's expense with all
     reasonable requests of the Facility Lessee in connection therewith and
     will provide the Facility Lessee with all information not within the
     control of the Facility Lessee as is reasonably available to such
     Indemnitee which the Facility Lessee may reasonably request; provided,
     however, that such Indemnitee shall not, unless otherwise required by
     Applicable Law, be obligated to disclose to the Facility Lessee or any
     other Person, or permit

                                      51

<PAGE>

     the Facility Lessee or any other Person to examine (i) any income tax
     returns of the Owner Participant or (ii) any confidential information or
     pricing information not generally accessible by the public possessed by
     the Owner Participant (and, in the event that any such information is made
     available, the Facility Lessee shall treat such information as
     confidential and shall take all actions reasonably requested by such
     Indemnitee for purposes of obtaining a stipulation from all parties to the
     related proceeding providing for the confidential treatment of such
     information from all such parties). Where the Facility Lessee, or the
     insurers under a policy of insurance maintained by the Facility Lessee
     undertakes the defense of such Indemnitee with respect to a Claim (with
     counsel reasonably satisfactory to such Indemnitee and without reservation
     of rights against such Indemnitee), no additional legal fees or expenses
     of such Indemnitee in connection with the defense of such Claim shall be
     indemnified hereunder unless such fees or expenses were incurred at the
     request of the Facility Lessee or such insurers. Notwithstanding the
     foregoing, an Indemnitee may participate at its own expense in any
     judicial proceeding controlled by the Facility Lessee pursuant to the
     preceding provisions, but only to the extent that such party's
     participation does not in the reasonable opinion of counsel to the
     Facility Lessee interfere with such control or defense of such claim;
     provided, however, that such party's participation does not constitute a
     waiver of the indemnification provided in this Section 9.1; provided,
     further, that if and to the extent that (i) such Indemnitee is advised by
     counsel that an actual or potential conflict of interest exists where it
     is advisable for such Indemnitee to be represented by separate counsel or
     (ii) there is a risk that such Indemnitee may be subject to criminal
     liability and such Indemnitee informs the Facility Lessee that such
     Indemnitee desires to be represented by separate counsel, such Indemnitee
     shall have the right to control its own defense of such Claim and the
     reasonable fees and expenses of such defense (including, without
     limitation, the reasonable fees and expenses of such separate counsel)
     shall be borne by the Facility Lessee. So long as no Lease Event of
     Default described in clause (a), (b), (g) or (h) of Section 16 of the
     Facility Lease has occurred and be continuing, no Indemnitee shall enter
     into any settlement or other compromise with respect to any Claim without
     the prior written consent of the Facility Lessee unless (i) the Indemnitee
     waives its rights to indemnification hereunder or (ii) the Facility Lessee
     has not acknowledged their indemnity obligation with respect thereto and
     there is a significant risk that a default judgment will be entered
     against such Indemnitee. Nothing contained in this Section 9.1(e) shall be
     deemed to require an Indemnitee to contest any Claim or to assume
     responsibility for or control of any judicial proceeding with respect
     thereto.

Subrogation. To the extent that a Claim indemnified by the Facility Lessee
     under this Section 9.1 is in fact paid in full by the Facility Lessee or
     an insurer under an insurance policy maintained by the Facility Lessee (so
     long as no Lease Event of Default shall have occurred and be continuing),
     such insurer shall be subrogated to the rights and remedies of the
     Indemnitee on whose behalf such Claim was paid to the extent of such
     payment (other than rights of such Indemnitee under insurance policies
     maintained at its own expense) with respect to the transaction or event
     giving rise to such Claim. Should an Indemnitee receive any refund, in
     whole or in part, with respect to any Claim paid by the Facility Lessee
     hereunder, it shall promptly pay over to the Facility Lessee the lesser of
     (i) the amount refunded reduced by the amount of any Tax incurred by
     reason of the receipt or accrual of such refund and increased by the
     amount of any Tax (but not in excess of the amount of such reduction)
     saved as a result of such payment or (ii) the amount the Facility Lessee
     or any of

                                      52

<PAGE>

     their insurers has paid in respect of such Claim; provided that, so long
     as a Significant Lease Default or Lease Event of Default shall have
     occurred and is continuing such amount may be held by the Owner Lessor as
     security for the Facility Lessee's obligations under the Facility Lease
     and the other Operative Documents.

Minimize Claims. The Owner Participant, the Owner Lessor, and each of the
     other Transaction Parties will use their respective reasonable and
     diligent efforts to minimize Claims indemnifiable by the Facility Lessee
     under this Section 9.1, including by complying with reasonable requests by
     the Facility Lessee to do or to refrain from doing any act if such
     compliance is, in the good faith opinion of the Owner Participant, the
     Owner Lessor, or such other Transaction Party, as the case may be, of a
     purely ministerial nature or otherwise has no unindemnified adverse impact
     on the Owner Participant, the Owner Lessor, or such Transaction Party, as
     the case may be, or any Affiliate of any thereof or on the business or
     operations of any of the foregoing.

General Tax Indemnity.

Indemnity. Except as provided in paragraph (b), the Facility Lessee agrees
     to indemnify each of the Owner Participant, the Owner Lessor, any OP
     Guarantor, the Trust Company in its individual capacity, the Lessor
     Manager, the Lease Indenture Company in its individual capacity, the
     Indenture Trustee, the Pass Through Company in its individual capacity,
     the Pass Through Trustees, each Certificateholder and their respective
     successors and assigns, the past and present partners or members of or
     holders of the ownership interests in, as the case may be, the Owner
     Participant (each of the foregoing, together with any Affiliate thereof, a
     "Tax Indemnitee") for, to hold each Tax Indemnitee harmless from and to
     defend each Tax Indemnitee against all Taxes that are imposed upon or with
     respect to or borne by or asserted against any Tax Indemnitee, the
     Facility, the Undivided Interest, the Facility Site, the Ground Interest,
     or any portion or Component thereof or any interest therein, or upon any
     Operative Document or interest therein, or in any way arising out of, in
     connection with or relating to, any of the following:

the acceptance, rejection, delivery, construction, financing, refinancing,
     acquisition, operation, warranty, ownership, possession, maintenance,
     repair, lease, condition, alteration, modification, restoration,
     refurbishing, rebuilding, return, transport, assembly, repossession,
     servicing, dismantling, abandonment, retirement, decommissioning,
     preparation, installation, storage, replacement, purchase, sale or other
     disposition, insuring, sublease, or other use or non-use of, the
     imposition of any lien (or incurrence of any liability to refund or pay
     over any amount as a result of any lien) on, the Facility, the Undivided
     Interest, the Ground Interest, the Facility Site or any portion or
     Component thereof or any interest therein;

the Facility, the Facility Site, the Undivided Interest, the Ground
     Interest, any portion thereof or Component or interest therein, the
     applicability of the Facility Lease to the Facility or the Undivided
     Interest, or the conduct of the business or affairs of the Facility Lessee
     or Calpine, the Facility or the Facility Site;

                                      53

<PAGE>

the manufacture, design, purchase, acceptance, rejection, delivery,
     non-delivery, redelivery or condition of, or improvement to, the Facility,
     the Facility Site or any portion or Component thereof, or any interest
     therein;

the Facility Lease, or any other Operative Document, the execution or
     delivery thereof, any other documents contemplated thereby or the
     performance, enforcement or amendment of any terms thereof;

the payment or receipt of Periodic Rent and Supplemental Rent or any other
     payment, receipt or earning under the Facility Lease or the Facility Site
     Lease or arising from the Facility, the Undivided Interest, the Ground
     Interest, the Facility Site, or any portion or Component thereof or any
     interest therein;

any other amount paid or payable pursuant to the Operative Documents;

the conveyance of title to the Undivided Interest; or

otherwise relating to the transactions contemplated by the Operative Documents.

          Notwithstanding anything herein to the contrary and without regard
to paragraph (b) hereof, the Facility Lessee will indemnify the Owner
Participant and the Owner Lessor on an After-Tax Basis for any Taxes collected
by way of withholding (and any interest, penalties or additions to tax
associated therewith) (or for the failure to withhold taxes) imposed on the
Lessor Notes or the Additional Lessor Notes or any other payments to each
Certificateholder or the Indenture Trustee (each a "Certificateholder
Indemnitee"), including any penalties, interest, or additions to tax applicable
in connection therewith; provided, however, that if the Facility Lessee is
required, for any reason, to indemnify the Owner Participant or the Owner
Lessor with respect to any failure to withhold such tax, and the withholding
tax would otherwise be an Excluded Tax under Section 9.2(b) without regard to
the first sentence of this paragraph, then the Certificateholder Indemnitee
with respect to which such withholding was not made will pay the amount of tax
not withheld to the relevant taxing authority if such taxes remain unpaid or
will reimburse the Facility Lessee for the amount of tax not withheld, but paid
to such taxing authority, on demand, plus interest at (a) the Lease Debt Rate
during the period commencing on the date the Facility Lessee shall have made
the indemnity payment to such taxing authority and ending the earlier of the
date of repayment by such Tax Indemnitee and five Business Days after the date
the Facility Lessee demands reimbursement thereof pursuant to this sentence,
and (b) the Overdue Rate for the period thereafter to the date the Facility
Lessee actually receives such payment.

Excluded Taxes. The indemnity provided for in paragraph (a) above shall
     not extend to any of the following Taxes (the "Excluded Taxes"):

Taxes imposed by the United States federal government or any state or local
     government, any political subdivision of any of the foregoing, imposed on,
     based on or measured by gross or net income, receipts, capital gain,
     capital or net worth, or conduct of business (other than, in each case,
     Taxes that are or are in the nature of sales, use, rental, license, value
     added (to the extent value added taxes are not imposed in clear and direct
     substitution for income taxes) or property taxes) ("Income Taxes"),
     including any such Taxes collected by way of

                                      54

<PAGE>

     withholding, minimum or alternative minimum taxes, and franchise taxes;
     provided that this exclusion (i) shall not affect any express requirement
     that payments be made on an "after-tax" basis;

Taxes imposed on a Tax Indemnitee other than a Certificateholder Indemnitee
     that are attributable to any act, event or omission by such Tax Indemnitee
     that occurs after expiration or other termination of the Facility Lease
     and surrender of the Undivided Interest to the Owner Lessor or its
     successors (or in the case of a Certificateholder Indemnitee, Taxes
     imposed for any period after the repayment of the Lease Debt) in
     accordance with the Facility Lease, (as opposed to any act, event or
     omission occurring prior to or simultaneous with such expiration,
     termination or surrender (or, in the case of a Certificateholder
     Indemnitee, such repayment)), provided that this exclusion shall not apply
     so long as a Lease Event of Default shall have occurred and be continuing;

Taxes imposed on a Tax Indemnitee that are attributable to the gross
     negligence or willful misconduct of such Tax Indemnitee, unless such
     negligence or misconduct is imputed to such Tax Indemnitee solely as a
     result of its participation in the transactions contemplated by the
     Operative Documents and not as a result of any action or inaction by such
     Tax Indemnitee;

Taxes imposed on a Tax Indemnitee arising from a breach by such Tax
     Indemnitee of any of its representations, warranties or covenants under
     any Operative Document except to the extent attributable to any breach by
     the Facility Lessee or any other Calpine Party of any covenant,
     representation or warranty contained in any Operative Document;

Taxes (A) that are attributable to any voluntary direct or indirect
     assignment, sale, transfer or other voluntary disposition or an
     involuntary direct or indirect transfer or disposition arising out of or
     caused by a bankruptcy or similar proceeding for relief of debtors in
     which such Tax Indemnitee is a debtor or a foreclosure by a creditor of
     (1) in the case of the Owner Lessor or the Owner Participant, the Owner
     Participant of all or part of its Member Interest or Undivided Interest,
     (2) in the case of the Owner Lessor or the Owner Participant, the Owner
     Lessor of all or part of its interest in the Facility or the Facility Site
     (other than to a successor Lessor Manager), or (3) in the case of the
     Indenture Trustee, the Indenture Trustee of any interest in the Lease Debt
     or the Indenture Estate, or (4) in the case of the Owner Lessor or the
     Owner Participant any direct or indirect interest in the Owner Lessor or
     the Owner Participant, including by reason of an election made pursuant to
     Section 338 of the Code, in each case to the extent imposed by reason of
     any transfer described in this clause (v)(A), or (B) to the extent that,
     under law in effect on the date of the transfer such Taxes exceed the
     amount of Taxes that would be indemnified hereunder had there been no such
     assignment, sale, transfer or other voluntary disposition, unless such
     transfer or disposition occurs during the continuance of a Lease Event of
     Default or is otherwise pursuant to the Facility Lessee's exercise of its
     rights under the Operative Documents; provided that this exclusion shall
     not apply with respect to any initial syndication of interests in the
     Owner Participant accomplished prior to December 29, 2001;

Taxes imposed on a Tax Indemnitee that would not have been imposed but for
     the creation or existence of any Owner Lessor's Lien or Owner
     Participant's Lien attributable to such Tax Indemnitee;

                                      55

<PAGE>

Taxes that are included as a part of the cost of the Facility;

Taxes imposed on the Lessor Manager or the Indenture Trustee that are based
     on or measured by the fees or other compensation received by the Lessor
     Manager or Indenture Trustee for acting in their respective capacities.

With respect to the Owner Participant, Taxes for which the Facility Lessee
     is obligated to indemnify the Owner Participant under the Tax Indemnity
     Agreement (or which are expressly excluded from indemnification
     thereunder);

Taxes that are imposed on a Tax Indemnitee (other than a Certificateholder
     Indemnitee) resulting from the Owner Lessor not being treated as a grantor
     trust or other conduit entity for federal, state or local income tax
     purposes, but only to the extent such Taxes exceed Taxes indemnified
     hereunder that otherwise would have been imposed and are otherwise
     indemnifiable;

Taxes imposed on a Tax Indemnitee that are attributable to the failure of
     such Tax Indemnitee to comply with certification, information,
     documentation, reporting or other similar requirements concerning the
     nationality, residence, identity or connection with the jurisdiction
     imposing such Taxes; provided that the foregoing exclusion shall only
     apply if such compliance is required by statute or regulation of the
     jurisdiction imposing such Taxes as a precondition to relief or exemption
     from or reduction in such Taxes, such Tax Indemnitee is eligible to comply
     with such requirement, the Facility Lessee shall have given such Tax
     Indemnitee timely written notice of such requirement and the Tax
     Indemnitee shall have determined in good faith that compliance with any
     such requirement shall not result in any identified non-immaterial adverse
     effect to its interests or to those of its Affiliates;

Taxes consisting of interest, penalties, additions to tax or fines
     resulting from a failure of such Tax Indemnitee to properly and timely
     file returns as required by a taxing authority unless such failure is
     attributable to the Facility Lessee not providing information that it is
     expressly required to provide under the Operative Documents;

Taxes imposed on any Tax Indemnitee resulting from an amendment,
     modification, supplement to or waiver of any provision of, any Operative
     Document which amendment, modification, supplement or waiver was not
     requested by or consented to by the Facility Lessee, and as to which the
     Facility Lessee is not a party and the Tax Indemnitee (or, in the case of
     the Owner Participant, the Owner Lessor if acting at the express direction
     of the Owner Participant or any Related Party) is a party, provided that
     this exclusion shall not apply if such amendment, modification, supplement
     or waiver (A) was required by applicable law or the Operative Documents,
     (B) may be necessary or appropriate to, and is in conformity with, any
     amendment to any Operative Document requested by the Facility Lessee in
     writing, or (C) was expressly consented to by a Calpine Party in writing;

Taxes imposed as a result of, or in connection with, any "prohibited
     transaction," within the meaning of Section 4975 of the Code, Section 406
     of ERISA or any comparable laws of any Governmental Entity, engaged in by
     any Tax Indemnitee (which for this purpose shall include any ERISA
     Affiliate thereof) resulting from the breach by such Tax Indemnitee of

                                      56

<PAGE>

     any of its representations or warranties contained in Section 3.4(g) or
     Section 8.2 of the Participation Agreement;

Taxes to the extent such Taxes would not have been imposed on a Tax Indemnitee
     if such Tax Indemnitee were a United States Person; and

Taxes imposed that would not have been imposed on a Tax Indemnitee but for
     the activities in the taxing jurisdiction of such Tax Indemnitee or any
     Affiliate thereof unrelated to the transactions contemplated by the
     Operative Documents other than Taxes that are or are in the nature of
     sales, use, rental or license taxes, value added taxes (except to the
     extent value added taxes are imposed in clear and direct substitution for
     income taxes) or property taxes.

Payment. Notwithstanding anything to the contrary herein and without
     regard to paragraph (b) hereof, any payment by the Facility Lessee
     pursuant to this Section 9.2 shall be increased by amounts necessary to
     ensure that all such payments are made on an After-Tax Basis. Each payment
     required to be made by the Facility Lessee to a Tax Indemnitee pursuant to
     this Section 9.2 shall be paid either (i) when due directly to the
     applicable taxing authority by the Facility Lessee if it is permitted to
     do so, or (ii) where direct payment is not permitted, and with respect to
     gross up amounts, in immediately available funds to such Tax Indemnitee by
     the later of (A) 10 days following the Facility Lessee's receipt of the
     Tax Indemnitee's written demand for the payment pursuant to clause (g)(i)
     below (which demand shall be accompanied by a written statement of the Tax
     Indemnitee describing in reasonable detail the Taxes for which the Tax
     Indemnitee is demanding payment and the computation of such Taxes), (B)
     subject to paragraph (g) below, in the case of amounts which are being
     contested pursuant to such paragraph (g), at the time and in accordance
     with a final determination of such contest or (C) in the case of any
     indemnity demand for which the Facility Lessee has requested review and
     determination pursuant to paragraph (d) below, the completion of such
     review and determination; provided, however, in no event later than the
     date which is one Business Day prior to the date on which such Taxes are
     required to be paid to the applicable taxing authority. Any amount payable
     to the Facility Lessee pursuant to paragraph (e) or (f) below shall be
     paid promptly after the Tax Indemnitee realizes a Tax Benefit giving rise
     to a payment under paragraph (e) or receives a refund or credit giving
     rise to a payment under paragraph (f), as the case may be, and shall be
     accompanied by a statement of the Tax Indemnitee computing in reasonable
     detail the amount of such payment. Upon the final determination of any
     contest pursuant to paragraph (g) below in respect of any Taxes for which
     the Facility Lessee has made a Tax Advance, the amount of the Facility
     Lessee's obligation under paragraph (a) above shall be determined as if
     such Tax Advance had not been made. Any obligation of the Facility Lessee
     under this Section 9.2 and the Tax Indemnitee's obligation to repay the
     Tax Advance will be satisfied first by set off against each other, and any
     difference owing by either party will be paid within 10 days of such final
     determination.

Independent Examination. Within 10 days after the Facility Lessee receives
     any computation from the Tax Indemnitee, the Facility Lessee may request
     in writing that an independent public accounting firm selected by the Tax
     Indemnitee and reasonably acceptable to the Facility Lessee review and
     determine on a confidential basis the amount of any indemnity payment by
     the Facility Lessee to the Tax Indemnitee pursuant to this Section 9.2 or
     any

                                      57

<PAGE>

     payment by a Tax Indemnitee to the Facility Lessee pursuant to paragraph
     (e) or (f) below. The Tax Indemnitee shall cooperate with such accounting
     firm and supply it with all information reasonably necessary for the
     accounting firm to conduct such review and determination (but not tax
     returns and books); provided that such accounting firm shall agree in
     writing in a manner reasonably satisfactory to the Tax Indemnitee to
     maintain the confidentiality of such information. The parties hereto agree
     that the independent public accounting firm's sole responsibility shall be
     to verify the computation of any payment pursuant to this Section 9.2 and
     that matters of interpretation of this Participation Agreement or any
     other Operative Document are not within the scope of the independent
     accountant's responsibility. The fees and disbursements of such accounting
     firm will be paid by the Facility Lessee; provided that such fees and
     disbursements will be paid by the Tax Indemnitee if the verification
     results in an adjustment in the Facility Lessee's favor of 5 percent or
     more of the indemnity payment or payments computed by the Tax Indemnitee.

Tax Benefit. If, as the result of any Taxes paid or indemnified against by the
     Facility Lessee under this Section 9.2, the aggregate Taxes actually paid
     by the Tax Indemnitee for any taxable year and not subject to
     indemnification pursuant to this Section 9.2 are less (whether by reason
     of a deduction, credit, allocation or apportionment of income or
     otherwise) than the amount of such Taxes that otherwise would have been
     payable by such Tax Indemnitee (a "Tax Benefit"), then to the extent such
     Tax Benefit was not taken into account in determining the amount of
     indemnification payable by the Facility Lessee under paragraph (a) or (c)
     above and provided no Significant Lease Default or Lease Event of Default
     shall have occurred and be continuing (in which event the payment provided
     under this Section 9.2(e) shall be deferred until the Significant Lease
     Default or Lease Event of Default has been cured), such Tax Indemnitee
     shall pay to the Facility Lessee the lesser of (A) (y) the amount of such
     Tax Benefit, plus (z) an amount equal to any United States federal, state
     or local income tax benefit resulting to the Tax Indemnitee from the
     payment under clause (y) above and this clause (z) (determined using the
     same assumptions as set forth in the second sentence under the definition
     of After-Tax Basis) and (B) the amount of the indemnity paid pursuant to
     this Section 9.2 giving rise to such Tax Benefit; provided, however, that
     any excess of (A) over (B) shall be carried forward and reduce the
     Facility Lessee's obligations to make subsequent payments to such Tax
     Indemnitee pursuant to this Section 9.2. If it is subsequently determined
     that the Tax Indemnitee was not entitled to such Tax Benefit, the portion
     of such Tax Benefit that is required to be repaid or recaptured will be
     treated as Taxes for which the Facility Lessee must indemnify the Tax
     Indemnitee pursuant to this Section 9.2 without regard to paragraph (b)
     hereof.

          Notwithstanding anything to the contrary herein, each
Certificateholder Indemnitee shall determine the allocation of any tax
benefits, savings, credit, deduction or allocation in its sole good faith
discretion and each position to be taken on its tax return shall be in its sole
control and it shall not be required to disclose any tax return or related
documentation to any Person.

Refund. If a Tax Indemnitee obtains a refund or credit of all or part of
     any Taxes paid, reimbursed or advanced by the Facility Lessee pursuant to
     this Section 9.2, the Tax Indemnitee promptly shall pay to the Facility
     Lessee (x) the amount of such refund or credit (net of any Tax payable by
     the Tax Indemnitee as a result of the receipt or accrual of such

                                      58

<PAGE>

     refund or credit) plus (y) an amount equal to any United States federal,
     state or local income tax benefit realized by such Tax Indemnitee by
     reason of such payment to the Facility Lessee (determined using the same
     assumptions as set forth in the second sentence under the definition of
     After-Tax Basis); provided that (A) if at the time such payment is due to
     the Facility Lessee a Significant Lease Default or Lease Event of Default
     shall have occurred and be continuing, such amount shall not be payable
     until such Significant Lease Default or Lease Event of Default has been
     cured, and (B) the amount payable to the Facility Lessee pursuant to this
     sentence shall not exceed the amount of the indemnity payment in respect
     of such refunded or credited Taxes that was made by the Facility Lessee.
     Any excess of (x) and (y) over (B) in this Section 9.2(f) shall be carried
     forward and reduce the Facility Lessee's obligations to make subsequent
     payments to such Tax Indemnitee pursuant to this Section 9.2. If it is
     subsequently determined that the Tax Indemnitee was not entitled to such
     refund or credit, the portion of such refund or credit that is required to
     be repaid or recaptured will be treated as Taxes for which the Facility
     Lessee must indemnify the Tax Indemnitee pursuant to this Section 9.2
     without regard to paragraph (b) hereof. If, in connection with a refund or
     credit of all or part of any Taxes paid, reimbursed or advanced by the
     Facility Lessee pursuant to this Section 9.2, a Tax Indemnitee receives an
     amount representing interest on such refund or credit, the Tax Indemnitee
     promptly shall pay to the Facility Lessee (1) the amount of such interest
     that shall be fairly attributable to such Taxes paid, reimbursed or
     advanced by the Facility Lessee prior to the receipt of such refund or
     credit (net of Taxes payable in respect of the receipt or accrual of such
     interest) and (2) any Tax savings resulting from payments made by the Tax
     Indemnitee under (1) and (2).

Contest.

Notice of Contest. If a written claim for payment is made by any taxing
     authority against a Tax Indemnitee for any Taxes with respect to which the
     Facility Lessee may be liable for indemnity hereunder (a "Tax Claim"),
     such Tax Indemnitee shall give the Facility Lessee written notice of such
     Tax Claim promptly after its receipt, and shall furnish the Facility
     Lessee with copies of such Tax Claim and all other writings received from
     the taxing authority to the extent relating to such claim; provided that
     failure to so notify the Facility Lessee shall not relieve the Facility
     Lessee of any obligation to indemnify the Tax Indemnitee hereunder except
     to the extent that such failure effectively precludes the ability to
     conduct a contest hereunder (and without limiting any damage claim or
     remedy the Facility Lessee may otherwise have for such failure).

Control of Contest. Subject to subsection (g)(iii) below, the Facility
     Lessee will be entitled to contest (acting through counsel selected by the
     Facility Lessee and reasonably satisfactory to the Tax Indemnitee), and
     control the contest of, any Tax Claim if (A) such Tax Claim may be pursued
     in the name of the Facility Lessee and may be segregated procedurally from
     tax claims for which the Facility Lessee is not obligated to indemnify the
     Tax Indemnitee or (B) the Tax Indemnitee requests that the Facility Lessee
     control such contest. In the case of all other Tax Claims, the Tax
     Indemnitee will contest the Tax Claim if the Facility Lessee shall request
     that the Tax be contested (subject to subsection (g)(iii) below), and the
     following rules shall apply with respect to such contest:

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<PAGE>

               (1)   the Tax Indemnitee will control the contest of such Tax
Claim (acting through counsel selected by the Tax Indemnitee and reasonably
satisfactory to the Facility Lessee) at the Facility Lessee's expense,

               (2)   the decisions regarding what actions to be taken shall be
made by the Tax Indemnitee in its sole judgment, and

               (3)   the Tax Indemnitee shall not otherwise settle, compromise
or abandon such contest without the Facility Lessee's prior written consent
except as provided in paragraph (g)(iv) below.

          In either case, the party conducting such contest shall consult in
good faith with the other party and its designated counsel with respect to such
Tax Claim and shall provide the other party with copies of any reports or
claims (or extracts therefrom) issued by the relevant auditing agents or taxing
authority relating to such Tax Claim.

Conditions of Contest. Notwithstanding the foregoing, no contest with
     respect to a Tax Claim will be required or permitted pursuant to this
     Section 9.2, and the Facility Lessee shall be required to pay the
     applicable Taxes without contest, unless:

               (1)   within 30 days after written notice by the Tax Indemnitee
to the Facility Lessee of such Tax Claim (or such shorter period, to be
specified by the Tax Indemnitee in such notice, as required for taking action
with respect to such Tax Claim), the Facility Lessee shall request in writing
to the Tax Indemnitee that such Tax Claim be contested,

               (2)   no Significant Lease Default or Lease Event of Default has
occurred and is continuing, unless the Facility Lessee has provided security
for the indemnity payment and the expenses of contest in a manner reasonably
acceptable to the Tax Indemnitee and the Indenture Trustee, both as to coverage
and credit,

               (3)   there is no risk of sale, forfeiture or loss of, or the
creation of any Lien on any Facility, the Facility Site, the Undivided
Interest, the Ground Interest, or any portion or Component thereof or any
interest therein as a result of such Tax Claim; provided that this clause (3)
shall not apply if the Facility Lessee posts security satisfactory to the Tax
Indemnitee, both as to coverage and credit, in its sole discretion,

               (4)   there is no risk of imposition of any criminal penalties
or liabilities,

               (5)   if such contest involves payment of such Tax, the Facility
Lessee will advance such amount necessary to pay the Tax to the Tax Indemnitee
or its Affiliates on an interest-free basis and with no after-tax cost to such
Tax Indemnitee (a "Tax Advance"),

               (6)   the Facility Lessee agrees to pay (and pays on demand) and
with no after-tax cost to such Tax Indemnitee or its Affiliates all reasonable
costs, losses and expenses incurred by the Tax Indemnitee in connection with
the contest of such claim (including, without limitation, all reasonable legal,
accounting and investigatory fees and disbursements and penalties, interest and
additions to tax),

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               (7)   the Tax Indemnitee, if it so requests has been provided
at the Facility Lessee's sole expense with an opinion, reasonably acceptable to
such Tax Indemnitee, of independent tax counsel selected by the Tax Indemnitee
and reasonably acceptable to the Facility Lessee to the effect that there is a
Reasonable Basis for contesting such Tax Claim,

               (8)   in the case of a judicial appeal, the appeal is not to the
U.S. Supreme Court,

               (9)   if such contest is controlled by the Facility Lessee,
prior to commencement of a judicial action with respect to the contest, the
Facility Lessee shall have admitted in writing its liability to pay an
indemnity pursuant to this Section 9.2 with respect to such Tax, which
admission shall be binding on the Facility Lessee unless and to the extent such
contest is determined in a manner that conclusively demonstrates that the
Facility Lessee is not so liable, and

               (10)   if the subject matter of such claim shall be of a
continuing or recurring nature and shall have previously been decided pursuant
to this paragraph (g), there shall have been a change in law after such
previously decided claim and such Tax Indemnitee receives, at the Facility
Lessee's sole cost, an opinion of counsel selected by such Tax Indemnitee and
reasonably acceptable to the Facility Lessee to the effect that such change is
favorable to the position asserted in the previous contest.

Waiver of Indemnification. Notwithstanding anything to the contrary
     contained in this Section 9.2, the Tax Indemnitee at any time may elect to
     decline to take any action or any further action with respect to (and the
     Facility Lessee shall not be permitted to contest) a Tax Claim and may in
     its sole discretion settle or compromise any contest with respect to such
     Tax Claim without the Facility Lessee's consent if the Tax Indemnitee:

               (1)   waives its right to any indemnity payment by the Facility
Lessee pursuant to this Section 9.2 in respect of such Tax Claim (and any other
claim for Taxes with respect to any other taxable year the contest of which is
effectively precluded by the Tax Indemnitee's declination to take action with
respect to the Tax Claim), and

               (2)   promptly repays to the Facility Lessee any Tax Advance and
any amount paid to such Tax Indemnitee under Section 9.2(a) above in respect of
such Taxes, but not any costs or expenses with respect to any such contest.

          Except as provided in the preceding sentence, any such waiver shall
be without prejudice to the rights of the Tax Indemnitee with respect to any
other Tax Claim.

Reports.

If any report, statement or return is required to be filed by a Tax
     Indemnitee with respect to any Tax that is subject to indemnification
     under this Section 9.2, the Facility Lessee will (1) notify the Tax
     Indemnitee in writing of such requirement not later than 30 days prior to
     the date such report, statement or return is required to be filed
     (determined without regard to extensions) and (2) either (y) unless
     directed by the Tax Indemnitee otherwise, if permitted by applicable law,
     prepare such report, statement or return for filing by the Facility Lessee
     in

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     such manner as will show the ownership of the Facility by the Owner Lessor
     for United States federal, state and local income tax purposes (if
     applicable), send a copy of such report, statement or return to the Tax
     Indemnitee and timely file such report, statement or return with the
     appropriate taxing authority, or (z) in all other cases, prepare and
     furnish to such Tax Indemnitee not later than 30 days prior to the date
     such report, statement or return is required to be filed (determined
     without regard to extensions) a proposed form of such report, statement or
     return for filing by the Tax Indemnitee; provided that the only
     consequence for failure to file after compliance by the Facility Lessee
     with the requirements hereof shall be a loss of indemnification from the
     Facility Lessee in respect of any Tax to the extent resulting from such
     failure.

Each of the Tax Indemnitee and the Facility Lessee, as the case may be,
     will timely provide the other, at the Facility Lessee's expense, with all
     information (other than books or income tax returns that such party
     reasonably deems confidential) in its possession that the other party may
     reasonably require and request to satisfy its tax filing obligations.

Non-Parties. If a Tax Indemnitee is not a party to this Agreement, the
     Facility Lessee may require such Tax Indemnitee to agree in writing, in a
     form reasonably acceptable to the Facility Lessee, to the terms of this
     Section 9.2 prior to making any payment to such Tax Indemnitee under this
     Section. Subject to the preceding sentence, the Facility Lessee's
     obligations under this Section 9.2 shall inure to the benefit of each and
     every Tax Indemnitee without regard to whether such Tax Indemnitee is a
     party to this Agreement.

FACILITY LESSEE'S RIGHT OF QUIET ENJOYMENT

          Each party to this Agreement acknowledges notice of, and consents in
all respects to, the terms of the Facility Lease and the Facility Site Lease
and expressly, severally and as to its own actions only, agrees that, so long
as no Lease Event of Default has occurred and is continuing, it shall not take
or cause to be taken any action or direct that any action be taken, which is
contrary to or inconsistent with the rights under the Facility Lease and
Facility Site Sublease, including the right to possession, use and quiet
enjoyment of the Undivided Interest and the Ground Interest.

SUPPLEMENTAL FINANCING IMPROVEMENTS; OPTIONAL REFINANCINGS

Financing Improvements. Upon the request of the Facility Lessee delivered at
least 90 days prior to financing a portion of the cost of any Required or
Non-Severable Improvement, the Owner Lessor and the Indenture Trustee agree to
cooperate with the Facility Lessee to (a) issue Additional Lessor Notes under
the Collateral Trust Indenture to finance such Improvement which will rank pari
passu with the Initial Lessor Notes and/or any Additional Lessor Notes then
outstanding; (b) execute and deliver one or more supplements to the Collateral
Trust Indenture for purpose of subjecting the Owner Lessor's interest in any
such Improvements to the Liens thereof, and (c) execute and deliver an
amendment to the Facility Lease to reflect the adjustments required by clause
(iv) below; provided, however, that (x) the Owner Participant shall have been
given the opportunity, but shall have no obligation, to provide all or part of
the funds required to finance any such Improvement by making an Additional
Equity Investment in such amount, if any, as it may determine in its sole and
absolute discretion, but the Facility Lessee shall have no

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obligation to accept such Additional Equity Investment; and (y) the conditions
set forth below and in Section 2.12 of the Collateral Trust Indenture shall
have been satisfied. The obligation to finance such Improvements through the
issuance of Additional Lessor Notes under Section 2.12 of the Collateral Trust
Indenture (any financing of Improvements through the issuance of such
Additional Lessor Notes under the Collateral Trust Indenture being called a
"Supplemental Financing") is subject to the following additional conditions:

except with respect to Required Improvements, there shall be no more than
     one such financing in any calendar year;

the Additional Lessor Notes (A) shall have a final maturity no later than
     the final maturity of the Lessor Notes issued on the Closing Date and (B)
     will be fully repaid out of additional Basic Rent, as adjusted pursuant to
     the Facility Lease, during the Facility Lease Term;

the Additional Lessor Notes shall have an average life to maturity equal
     to the average life to maturity of the Lessor Notes issued on the Closing
     Date;

appropriate increases to Basic Rent and Termination Value (determined
     without regard to any tax benefits associated with such Improvements,
     unless the Owner Participant is making an Additional Equity Investment)
     shall be made to protect the Owner Participant's Net Economic Return;
     provided that there shall be no changes to the amortization schedule or
     interest amounts and payment dates on the then outstanding Lessor Notes;

the Facility Lessee shall have paid, on an After-Tax Basis, all reasonable
     costs and expenses of the Transaction Parties, including the reasonable
     fees and expenses of counsel to the Owner Participant, the Owner Lessor,
     the Indenture Trustee, the Lease Indenture Company, the Pass Through
     Company and the Pass Through Trustees, in each case to the extent incurred
     in connection with any financing or refinancing pursuant to this Section
     11 whether or not the financing is consummated;

no Significant Lease Default or Lease Event of Default shall have occurred
     and be continuing unless the Improvements to be constructed with the
     proceeds of the Additional Lessor Notes shall cure such Significant Lease
     Default or Lease Event of Default and such Improvements shall be made in
     compliance with the Operative Documents;

such Additional Lessor Notes represent an aggregate amount not less than
     $20 million, nor greater than 100% of the costs of the Improvements being
     financed; provided that the aggregate balance of the Lessor Notes for the
     Undivided Interest never exceeds 80% of the fair market value (which fair
     market value shall be determined by an appraiser selected by the Facility
     Lessee and reasonably acceptable to the Owner Participant) of the
     Undivided Interest taking into account the fair market value of such
     Improvements;

the Owner Participant shall have received a favorable opinion of its tax
     counsel satisfactory to such Owner Participant to the effect that such
     financing creates no incremental tax risk not indemnified to the Owner
     Participant's satisfaction (including additional indebtedness incurred to
     finance the Improvements not constituting "qualified nonrecourse
     indebtedness" within the meaning of Treasury Regulations Section
     1-861-10T(b));

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<PAGE>

the Owner Participant shall suffer no adverse accounting effects under
     GAAP as a result of such financing;

the Facility Lessee shall have made or delivered such representations,
     warranties, covenants, opinions or certificates as the Owner Participant,
     the Indenture Trustee may reasonably request;

the Facility Lessee or the Guarantor shall have, at such time, a credit
     rating of at least Investment Grade from S&P and Moody's;

the Facility Lessee shall pay to (a) the Owner Participant a fee of
     $100,000 and (b) the Pass Through Trustees for the benefit of the
     Certificateholders, to be shared by such Certificateholders on a pro rata
     basis, a fee of $100,000 for each such financing, in each case under
     clauses (a) and (b) above, other than the first financing; and

Calpine shall have affirmed to the Transaction Parties that the Calpine
     Guaranties cover the additional indebtedness contemplated by this Section
     11.1.

          Notwithstanding the prior provision dealing with the financing of
Improvements through the Facility Lease, the Facility Lessee shall at all times
have the right to fund Improvements to the Facility other than through the
Facility Lease; provided that Required Improvements and non-Severable
Improvements may only be financed other than through the Facility Lease on an
unsecured basis. Notwithstanding any of the foregoing of this Section 11.1,
except for Required Improvements and Improvements relating to pollution
control, no Improvement shall materially decrease the value, residual value,
utility or remaining economic useful life of the Facility immediately prior to
such Improvement or cause the Facility to become limited-use property.

Optional Refinancing of Lease Debt. The Facility Lessee shall have the right,
exercisable at any time on no more than three occasions, to request the Owner
Lessor (and the Owner Lessor shall reasonably consider and not unreasonably
withhold its consent), to refund or refinance the Lease Debt, in whole but not
in part, through the issuance of Additional Lessor Notes; provided that all
conditions to the issuance of such Additional Lessor Notes contained in Section
2.12 of the Collateral Trust Indenture shall have been satisfied and all
applicable Make-Whole Amounts shall have been paid. Any refinancing under this
Section 11.2 shall also be subject to satisfaction of the following additional
conditions:

the Owner Lessor shall be able to issue and sell such debt in an amount
     adequate to accomplish such refunding or refinancing;

with respect to the refinancing of the Initial Lessor Notes of a
     particular maturity, such Additional Lessor Notes shall have a final
     maturity no later than the final maturity date of such Initial Lessor
     Notes and will be fully repaid out of Basic Rent during the Facility Lease
     Term;

appropriate adjustments to Basic Rent and Termination Value shall be made
     to preserve the Owner Participant's Net Economic Return; provided that no
     adjustments shall be made to the amortization schedule;

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no Significant Lease Default or Lease Event of Default shall have occurred and
be continuing;

the Owner Participant shall suffer no adverse accounting effects under GAAP;

the Facility Lessee shall have made or delivered such representations,
     warranties, covenants, opinions and certificates as the Owner Participant
     may reasonably request, which representations, warranties, covenants and
     agreements shall be of no greater scope than those provided by the
     Facility Lessee on the Closing Date under the Operative Documents to which
     it is a party (except to the extent necessitated by differences between
     existing Operative Documents and the terms and conditions of the proposed
     refinancing);

all documentation in connection with such refinancing shall be reasonably
     satisfactory to the Owner Lessor and the Owner Participant;

the Owner Participant shall receive a consent fee of $100,000 in the
     aggregate for each refinancing after the first such refinancing;

the Lease Debt as financed constitutes qualified nonrecourse indebtedness
     within the meaning of Treasury Regulations Section 1-861-10T(b) and the
     Owner Participant shall have received an opinion satisfactory to it to
     such effect; and

the Owner Participant shall receive an opinion satisfactory to it that the
     refinancing (as opposed to the right to request such refinancing) shall
     not result in any incremental tax risk not indemnified to the Owner
     Participant's satisfaction.

          Calpine shall have affirmed in writing to the Transaction Parties
that the Calpine Guaranty covers the additional indebtedness contemplated by
this Section 11.2.

Cooperation. The Owner Participant will cooperate with and assist the Facility
Lessee in connection with any refinancing and/or assumption of the Lease Debt,
so long as such refinancing and/or assumption of the Lease Debt is in
accordance with the terms of the Operative Documents. The Owner Participant
will execute such agreements and documents as may be necessary with respect to
any such refinancing and will instruct the Owner Lessor to act accordingly.

CERTAIN ADJUSTMENTS TO PERIODIC RENT, TERMINATION VALUE AND OTHER AMOUNTS

Prior to or on the Closing Date, Periodic Rent, Termination Value,
     Allocated Rent, Proportional Rent, Lessor 467 Loan Principal Balance,
     Lessee 467 Loan Principal Balance, Lessor 467 Loan Interest and Lessee 467
     Loan Interest shall be adjusted, either upward or downward, in accordance
     with the Facility Lease:

at the request of the Facility Lessee, and at the Facility Lessee's
     option, to re-optimize the Lease Debt; provided such re-optimization shall
     not result in a change to average life by more than six (6) months;

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<PAGE>

at the request of the Facility Lessee or the Owner Participant, to reflect
     any changes in the Pricing Assumptions, including without limitation, (x)
     the initial interest rate on any of the Lessor Notes which is different
     from the applicable interest rate set forth in the Pricing Assumptions,
     (y) an increase in the Transaction Costs from the amount assumed in the
     Pricing Assumptions, unless the Facility Lessee has elected to pay such
     increase, and (z) a Closing Date other than the Scheduled Closing Date;
     and

at the request of the Facility Lessee or the Owner Participant to reflect any
     enactment, promulgation, release or adoption of, amendment to or change in
     the Code, Treasury Regulations, Revenue Rulings or Revenue Procedures
     ("Tax Law Change") enacted prior to the Closing;

provided that if any adjustment required by this paragraph (a) would result in
(i) the Facility Lease not qualifying as an operating lease for the Facility
Lessee under FASB 13 or FASB 98, or (ii) the aggregate of all rent adjustments
made on or before, or contemplated to be made on, the Closing Date (other than
adjustments to reflect a change in Transaction Costs or the actual interest
rate of the Certificates) shall cause either (x) the after-tax net present
value of Basic Rent discounted at 6% to increase by more than 100 basis points
or (y) the total Basic Rent to increase by more than 2%, then in either such
case, the Facility Lessee shall not be obligated to close the Overall
Transaction. Any adjustments pursuant to Section 3.4 of the Facility Lease
shall comply with Applicable Law (including any final or proposed Treasury
Regulations issued under Section 467 of the Code) as well as the requirements
of Revenue Procedure 2001-28 and Sections 4.02(5), 4.07(1) and 4.07(2) of
Revenue Procedure 2001-29 in a manner such that amending the Facility Lease
complies with the "safe harbors" under such Treasury Regulations or otherwise
does not cause the Facility Lease to be a "disqualified leaseback or long-term
agreement" within the meaning of Section 467 of the Code and any Treasury
Regulations issued thereunder, in each case, to the extent of such compliance
on the Closing Date.

After the Closing Date, Periodic Rent, Termination Value, Allocated Rent,
     Proportional Rent, Lessor 467 Loan Principal Balance, Lessee 467 Loan
     Principal Balance, Lessor 467 Loan Interest and Lessee 467 Loan Interest
     shall be adjusted at the request of the Facility Lessee or the Owner
     Participant in accordance with the terms of the Facility Lease to which it
     is a party.

Any adjustment pursuant to this Section 12 shall be calculated (A) to
     preserve the Owner Participant's Net Economic Return through the Basic
     Lease Term and (B) to the extent consistent with (A) above, to maintain
     operating lease treatment for the Facility Lessee; provided, however, that
     to the extent consistent with preserving the Owner Participant's Net
     Economic Return, all adjustments shall at the option of the Facility
     Lessee be calculated to (x) minimize the average annual Basic Rent over
     the Basic Lease Term and the Lessor Put Renewal Lease Term for the
     Facility Lessee's GAAP accounting purposes and/or (y) minimize the present
     value to the Facility Lessee of Basic Rent; and provided, further, that no
     such adjustment shall require the Owner Participant to record a loss as of
     the date such adjustment is made. Adjustments will be computed by the
     Owner Participant based upon the Pricing Assumptions and the Tax
     Assumptions originally used to calculate the Periodic Rent, Termination
     Value, Allocated Rent, Proportional Rent, Lessor 467 Loan Principal
     Balance, Lessee 467 Loan Principal Balance, Lessor 467 Loan Interest and
     Lessee 467 Loan Interest.

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     Adjustments made pursuant to this Section 12 shall be subject to
     verification as provided in Section 3.4 of the Facility Lease.

TRANSFER OF THE FACILITY LESSEE OWNERSHIP; SPECIAL LESSEE TRANSFERS

Transfer of the Facility Lessee Ownership.

The Facility Lessee covenants and agrees that it shall not during the
     Facility Lease Term assign the Facility Lease or any other Operative
     Document, or any interest therein, without the prior written consent of
     the Owner Lessor, the Owner Participant and, so long as the Lien of the
     Collateral Trust Indenture has not been terminated or discharged, the
     Indenture Trustee and the Pass Through Trustees. Notwithstanding the
     foregoing, upon satisfaction of the conditions in paragraph (b) below, the
     Facility Lessee may assign the Facility Lease or any other Operative
     Document to which it is a party, or any interest therein to any Person,
     without the consent of the Owner Lessor, the Owner Participant, the
     Indenture Trustee or any other Transaction Party.

Assignment under Section 13(a) above by the Facility Lessee shall be
     permitted if (A) after giving effect to such assignment or assignments,
     either (x) Calpine owns, directly or indirectly, at least a majority of
     the Ownership Interest of each assignee (as well as at least a majority of
     the Ownership Interest of any non-assigning Facility Lessee), the Calpine
     Guaranty remains in full force and effect (without a transferee of
     Calpine's obligations thereunder having succeeded thereto in accordance
     with Section 8.4(b) thereof), and Calpine shall have reaffirmed in writing
     its obligations under the Calpine Guaranty or (y) Calpine's obligations
     under the Calpine Guaranty has been succeeded to in accordance with
     Section 8.4(b) thereof, the transferee of Calpine shall own, directly or
     indirectly, at least a majority of the Ownership Interest of each assignee
     (as well as at least a majority of the Ownership Interest of any
     non-assigning Facility Lessee) and the Calpine Guaranty shall remain in
     full force and effect and (B) satisfaction of the following conditions:

the transferee shall assume all the obligations of the Facility Lessee
     under the Operative Documents, and the first priority Lien of the pledge
     of the Collateral as defined in and pursuant to the Facility Lease shall
     continue in effect, pursuant to an assignment and assumption agreement in
     form and substance satisfactory to the Owner Participant, Owner Lessor
     and, so long as the Lien of the Collateral Trust Indenture shall not have
     been terminated or discharged, the Indenture Trustee;

the Owner Participant, the Owner Lessor and, so long as the Lien of the
     Collateral Trust Indenture shall not have been terminated or discharged,
     the Indenture Trustee and the Pass Through Trustees shall have received an
     Opinion of Counsel as to such assignment and assumption agreement and the
     satisfaction of the requirements and conditions set forth in this Section
     13.1(b) (except for clauses (iii) and (vi) hereof);

no Significant Lease Default or Lease Event of Default shall have occurred
     and be continuing at the time of or immediately following such transfer;

the transfer shall not subject any of the Facility Lessee, the Owner
     Participant, the Owner Lessor, the Lessor Manager, the Indenture Trustee,
     the Pass Through Trustees or any

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Certificateholder to regulation under PUHCA or state laws and regulations
     regarding the rate and financial or organizational regulation of electric
     utilities in the affected party's reasonable opinion, nor result in a
     Regulatory Event of Loss;

the transferee shall be organized under the laws of the United States, any
     state thereof or the District of Columbia;

the Facility Lessee shall have paid, at no after-tax cost to such parties,
     all reasonable documented out-of-pocket expenses (including reasonable
     attorneys' fees and expenses) of the Owner Lessor, the Lessor Manager, the
     Owner Participant, the Indenture Trustee, the Lease Indenture Company and
     the Pass Through Trustees in connection with such assignment;

the Facility Lessee has provided the Indenture Trustee with (x) an
     indemnity against the risk that such assignment will cause a Tax Event to
     occur to any direct or indirect holder of any Lessor Note (including any
     Certificateholder) or (y) an opinion of counsel to the effect that such
     assignment will not cause a Tax Event to occur to any direct holder of any
     Lessor Note and any Certificateholder; and

the transfer shall not cause the Facility to become "tax-exempt use
     property within the meaning of Section 168(h) of the Code (unless the
     Facility Lessee shall make a payment contemporaneously with such transfer
     that in the reasonable judgment of the Owner Participant compensates the
     Owner Participant for the adverse tax consequences therefrom).

Special Facility Lessee Transfers. Upon the occurrence and during the
continuance of a Special Lessee Transfer Event, the Facility Lessee (or its
designee as provided below) may (a) terminate the Facility Lease in accordance
with its terms, or (b) upon not less than 30 days' written notice to the Owner
Participant, the Indenture Trustee and the Pass Through Trustees, purchase
subject to the limitations set forth in Section 7.1, all of the Member Interest
(any purchase under clause (b) being referred to a the "Special Lessee
Transfer") on the applicable Termination Date at a price equal to the Special
Lessee Transfer Amount determined as of the date of such transfer and keep the
Facility Lease in effect. On the applicable Termination Date, the Facility
Lessee (or its designee) shall pay to the Owner Participant or the OP
Guarantor, the Special Lessee Transfer Amount determined as of such date, plus
all amounts due and payable to the Owner Participant on such date (including
all reasonable and documented costs and expenses of the Owner Participant or
the OP Guarantor and all sales, use, value added and other Taxes covered and
not excluded by Section 9.2 hereof associated with the Special Lessee Transfer
pursuant to this Section 13.2, to the extent such amounts have not otherwise
been reimbursed by the Facility Lessee pursuant to this Section 13.2, it being
understood that any transfer pursuant to this Section 13.2 shall not be
considered a voluntary transfer for purposes of Section 9.2). Concurrently with
the payment of all sums required to be paid pursuant to this Section 13.2 (or
on such later date of transfer of the Member Interest in accordance with clause
(ii) below) (i) the Facility Lessee shall cease to have any liability to the
Owner Participant or the OP Guarantor with respect to the Operative Documents,
except for obligations (including Section 9.1 and 9.2 hereof and the Tax
Indemnity Agreement) surviving pursuant to the express terms of the Operative
Documents or which have otherwise accrued but not been paid as of such date and
(ii) the Owner Participant or the OP Guarantor will transfer (by an appropriate
instrument of transfer) the Member Interest to the Facility Lessee (or its
designee); provided, however, that if

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the Lien of the Collateral Trust Indenture has not been terminated or
discharged, such transfer shall not be made to the Facility Lessee, but shall
be made to the Facility Lessee's designee promptly upon the Facility Lessee's
designation of such designee and such designee will agree not to transfer the
Member Interest to the Facility Lessee until the Lien is terminated or
discharged. At the time of any transfer under this Section 13.2, the Owner
Participant or the OP Guarantor shall represent and warrant as to the absence
of Liens attributable to the Owner Participant on the Member Interest. It is
understood and agreed among the parties hereto that the transaction
contemplated by this Section 13.2 shall not effect a merger of the Facility
Lessee's interest in the Facility and the Facility Site with the Owner Lessor's
Interest. The Facility Lessee will pay, on an After-Tax Basis, all reasonable
and documented transaction costs and expenses of the parties (including
reasonable attorneys' fees and disbursements) in connection with any transfer
pursuant to this Section 13.2. Subsequent to such transfer, the Facility Lessee
and the Owner Lessor may, without the consent of the Indenture Trustee or the
Pass Through Trustees, waive the Regulatory Event of Loss or the Burdensome
Termination Event that gave rise to the Special Lessee Transfer Event and the
Facility Lease shall continue in full force and effect in accordance with its
terms.

MISCELLANEOUS

Consents; Cooperation. The Owner Participant covenants and agrees that it shall
not unreasonably withhold its consent to any consent requested of the Owner
Lessor under the terms of the Operative Documents that by its terms is not to
be unreasonably withheld by the Owner Lessor.

Successor Owner Lessor. The parties hereto agree that the transfer or
assignment pursuant to the terms of the LLC Agreement by the Owner Lessor to a
successor Owner Lessor, will not violate the terms of any Operative Document.

Bankruptcy of Lessor Estate. If (i) all or any part of the Lessor Estate
becomes the property of a debtor subject to the reorganization provisions of
Title 11 of the United States Code, as amended from time to time, (ii) pursuant
to such reorganization provisions the Owner Participant is required, by reason
of the Owner Participant being held to have recourse liability to the debtor or
the trustee of the debtor directly or indirectly, to make payment on account of
any amount payable as principal or interest on the Lessor Notes, and (iii) the
Indenture Trustee actually receives any Excess Amount, as defined below, which
reflects any payment by the Owner Participant on account of clause (ii) above,
the Indenture Trustee shall promptly refund to the Owner Participant such
Excess Amount (and, to the extent so refunded, such amount owing under the
Lessor Notes shall be reinstated). For purposes of this Section 14.3, "Excess
Amount" means the amount by which such payment exceeds the amount which would
have been received by the Indenture Trustee if the Owner Participant had not
become subject to the recourse liability referred to in clause (ii) above.
Nothing contained in this Section 14.3 shall prevent the Indenture Trustee from
enforcing any personal recourse obligations (and retaining the proceeds
thereof) of the Owner Participant as contemplated by this Participation
Agreement (other than referred to in clause (ii)).

Amendments and Waivers. No term, covenant, agreement or condition of this
Agreement may be terminated, amended or compliance therewith waived (either
generally or in a particular

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<PAGE>

instance, retroactively or prospectively) except by an instrument or
instruments in writing executed by each party hereto.

Notices. Unless otherwise expressly specified or permitted by the terms hereof,
all communications and notices provided for herein shall be in writing or by a
telecommunications device capable of creating a written record, and any such
notice shall become effective (a) upon personal delivery thereof, including,
without limitation, by overnight mail or courier service, (b) in the case of
notice by United States mail, certified or registered, postage prepaid, return
receipt requested, upon receipt thereof, or (c) in the case of notice by such a
telecommunications device, upon transmission thereof; provided such
transmission is promptly confirmed by either of the methods set forth in
clauses (a) or (b) above, in each case addressed to each party hereto at its
address set forth below or, in the case of any such party hereto, at such other
address as such party may from time to time designate by written notice to the
other parties hereto:

          If to the Facility Lessee:

          RockGen Energy LLC
          c/o Calpine Northbrook Office
          650 Dundee Road, Suite 350
          Northbrook, IL 60062
          Attention: Senior Counsel
          Telephone: (847) 559-9800
          Facsimile: (847) 559-1805

          with a copy to:

               Calpine Corporation
               50 West San Fernando Street, 5th Floor
               San Jose, California  95113
               Attention: Asset Manager and General Counsel
               Telephone: (408) 995-5115
               Facsimile: (408) 995-0505

          If to the Guarantor:

          Calpine Corporation
          50 West San Fernando Street, 5th Floor
          San Jose, California  95113
          Attention: Asset Manager and General Counsel
          Telephone: (408) 995-5115
          Facsimile: (408) 995-0505

          If to the Owner Lessor, the Trust Company or the Lessor Manager:

          c/o Wells Fargo Bank Northwest, National Association
          MAC U1254-031
          79 South Main Street

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<PAGE>

          Salt Lake City, UT 84111
          Telephone: (801) 246-5630
          Facsimile: (801) 246-5053
          Attention: Corporate Trust Services

          If to the Owner Participant:

          SBR OP-1, LLC
          c/o Wells Fargo Bank Northwest, National Association
          MAC U1254-031
          79 South Main Street
          Salt Lake City, UT 84111
          Telephone: (801) 246-5630
          Facsimile: (801) 246-5053
          Attention: Corporate Trust Services

          with a copy to:

               Newcourt Capital USA Inc.
               1211 Avenue of the Americas - 22nd Floor
               New York, New York  10036
               Telephone: (212) 382-7255
               Facsimile: (212) 382-9033
               Attention: Managing Director

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<PAGE>

          If to the Indenture Trustee:

          State Street Bank and Trust Company of Connecticut, National
          Association
          225 Asylum Street, Goodwin Square
          Hartford, CT 06103
          Telephone No.: (860) 244-1822
          Facsimile No.: (860) 244-1889
          Attn: Corporate Trust Department

               with a copy to:

          State Street Bank and Trust Company of California, National
          Association
          633 West 5th Street, 12th floor
          Los Angeles, California 90071
          Telephone No.: (213) 362-7373
          Facsimile No.: (213) 362-7357
               Attention: Corporate Trust Department

          If to the Pass Through Trustees:

          State Street Bank and Trust Company of Connecticut, National
          Association
          225 Asylum Street, Goodwin Square
          Hartford, CT 06103
          Telephone No.: (860) 244-1822
          Facsimile No.: (860) 244-1889
          Attn: Corporate Trust Department

               with a copy to:

          State Street Bank and Trust Company of California, National
          Association
          633 West 5th Street, 12th floor
          Los Angeles, California 90071
          Telephone No.: (213) 362-7373
          Facsimile No.: (213) 362-7357

               Attention: Corporate Trust Department

     If to the Manager:

          Credit Suisse First Boston
          Eleven Madison Avenue
          New York, New York 10010-3629
          Telephone No.:  (212) 325-2000
          Attention: Richard O'Day

          A copy of all notices provided for herein shall be sent by the party
          giving such notice to each of the other parties hereto. In addition,

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<PAGE>

          the Facility Lessee shall (unless otherwise directed by the
          applicable Rating Agency) provide to each Rating Agency a copy of
          any information, report or notice it gives to the Indenture Trustee
          hereunder or any other Operative Documents.

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<PAGE>

Survival. All warranties, representations, indemnities and covenants made by
any party hereto, herein or in any certificate or other instrument delivered by
any such party or on behalf of any such party under this Agreement shall be
considered to have been relied upon by each other party hereto and shall
survive the consummation of the transactions contemplated hereby and in the
other Operative Documents regardless of any investigation made by any such
party or on behalf of any such party. In addition, the indemnifications by the
Facility Lessee under Sections 9.1 and 9.2 of this Agreement, subject to
Sections 9.1(b) and 9.2(b), respectively, the Facility Site Lease and the
Calpine Guaranty, shall expressly survive the expiration or early termination
(in either case, for whatever reason) of the Facility Lease or the transfer or
other disposition of the respective interests of the Owner Participant, the
Owner Lessor, the Lessor Manager, the Lease Indenture Company, the Indenture
Trustee, the Pass Through Trustees and the Certificateholders in, to and under
this Agreement, the Assignment Agreement and the other Operative Documents.
Except as expressly provided above or in Section 22.3 of the Facility Lease,
the Tax Indemnity Agreement or as otherwise expressly provided in the Operative
Documents, the representations, warranties, covenants and agreements of the
Transaction Parties under the Operative Documents shall terminate and be of no
further force and effect effective upon the expiration or earlier termination
of the Facility Lease.

Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of, and shall be enforceable by, the parties hereto and their
respective successors and assigns as permitted by and in accordance with the
terms hereof, including each successive holder of the Member Interest of the
Owner Participant permitted under Section 7.1 and each successive transferee or
transferees of Lessor Notes permitted under Section 2.8 of the Collateral Trust
Indenture. Except as expressly provided herein or in the other Operative
Documents, no party hereto may assign its interests herein without the prior
written consent of the other parties hereto.

Business Day. Notwithstanding anything herein or in any other Operative
Document to the contrary, if the date on which any payment is to be made
pursuant to this Agreement or any other Operative Document is not a Business
Day, the payment otherwise payable on such date shall be payable on the next
succeeding Business Day with the same force and effect as if made on such
scheduled date and (provided such payment is made on such succeeding Business
Day) no interest shall accrue on the amount of such payment from and after such
scheduled date to the time of such payment on such next succeeding Business Day.

Governing Law. This Agreement has been delivered in the State of New York and
shall be in all respects governed by and construed in accordance with the laws
of the State of New York including all matters of construction, validity and
performance without giving effect to the conflicts of laws provisions thereof
except New York General Obligations Law Section 5-1401.

Severability. If any provision hereof shall be invalid, illegal or
unenforceable under Applicable Law, the validity, legality and enforceability
of the remaining provisions hereof shall not be affected or impaired thereby.

Counterparts. This Agreement may be executed in any number of counterparts,
each executed counterpart constituting an original but all together only one
agreement.

                                      74

<PAGE>

Headings and Table of Contents. The headings of the sections of this Agreement
and the Table of Contents are inserted for purposes of convenience only and
shall not be construed to affect the meaning or construction of any of the
provisions hereof.

Limitation of Liability.

None of the Owner Participant, the Owner Lessor, the Trust Company, the
     Lessor Manager, the Indenture Trustee, the Lease Indenture Company, the
     Pass Through Trustees, the Pass Through Company or the Certificateholders
     shall have any obligation or duty to the Facility Lessee or to others with
     respect to the transactions contemplated hereby, except those obligations
     or duties expressly set forth in this Agreement and the other Operative
     Documents to which such Person is a party, and none of the Owner
     Participant, the Owner Lessor, the Indenture Trustee, the Lease Indenture
     Company, the Pass Through Trustees, the Pass Through Company or the
     Certificateholders shall be liable for performance by any other party
     hereto of such other party's obligations or duties hereunder. Without
     limitation of the generality of the foregoing, under no circumstances
     whatsoever shall the Owner Participant be liable to the Facility Lessee
     for any action or inaction on the part of the Owner Lessor in connection
     with the transactions contemplated herein, whether or not such action or
     inaction is caused by willful misconduct or gross negligence of the Owner
     Lessor, unless such action or inaction is at the written direction of the
     Owner Participant.

Neither the Facility Lessee nor any other Calpine Party shall have any
     obligation or duty to the Owner Participant, the Owner Lessor, the
     Indenture Trustee, the Lease Indenture Company, the Pass Through Trustees,
     the Pass Through Company, the Certificateholders or to others with respect
     to the transactions contemplated hereby, except those obligations or
     duties expressly set forth in this Agreement and the other Operative
     Documents, and neither the Facility Lessee nor any other Calpine Party
     (except Calpine to the extent set forth in the Calpine Guaranty) shall be
     liable for performance by any other party hereto of such other party's
     obligations or duties hereunder.

The Lease Indenture Company and the Pass Through Company are entering into
     the Operative Documents to which it is a party solely as trustees under
     the Collateral Trust Indenture and the Pass Through Trust Agreements,
     respectively, and not in their individual capacities, except as expressly
     provided herein or therein, and in no case whatsoever shall the Lease
     Indenture Company and the Pass Through Company be personally liable for,
     or for any loss in respect of, any of the statements, representations,
     warranties, agreements or obligations of the Owner Lessor hereunder or
     under any other Operative Document, as to all of which the other parties
     hereto agree to look solely to the Indenture Estate and the Lessor Estate,
     respectively; provided, however, that the Lease Indenture Company and the
     Pass Through Trust Company shall be liable hereunder for their own
     negligence or willful misconduct or for a breach of their representations,
     warranties and covenants made in their individual capacity under any
     Operative Document.

The right of the Indenture Trustee or the Pass Through Trustees to perform
     any discretionary act enumerated herein or in any other Operative Document
     (including, without limitation, the right to consent to any action which
     requires their consent and the right to waive any provision of, or consent
     to any change or amendment to, any of the Operative Documents)

                                      75

<PAGE>

     shall not be construed as a duty, and neither the Indenture Trustee nor
     the Pass Through Trustees shall be liable or answerable for other than its
     negligence or willful misconduct in the performance of such acts. In
     connection with any such discretionary acts, the Indenture Trustee may in
     its sole discretion (but shall not, except as otherwise provided herein or
     in the Collateral Trust Indenture or as otherwise required by Applicable
     Law, have any obligation to) request the approval or instruction of the
     Pass Through Trustees as the holder of the Lessor Notes, and the Pass
     Through Trustees may in its sole discretion (but shall not, except as
     otherwise provided in the Operative Documents or as otherwise required by
     Applicable Law, have any obligation to) request the approval of the
     Certificateholders.

The Owner Participant will give the Facility Lessee at least 15 days'
     prior notice of any proposed amendment or supplement to the LLC Agreement
     (other than an amendment solely effecting a transfer of the Owner
     Participant's interest in the Lessor Estate) and deliver true, complete
     and fully executed copies to the Facility Lessee of any amendment or
     supplement to the LLC Agreement. No amendment or supplement to the LLC
     Agreement that would reasonably be expected to materially adversely affect
     the interests of the Facility Lessee or the Indenture Trustee shall become
     effective without the written consent of the Indenture Trustee and the
     Facility Lessee.

Consent to Jurisdiction; Waiver of Trial by Jury; Process Agent.

Each of the parties hereto (i) hereby irrevocably submits to the
     nonexclusive jurisdiction of the Supreme Court of the State of New York,
     New York County (without prejudice to the right of any party to remove to
     the United States District Court for the Southern District of New York)
     and to the nonexclusive jurisdiction of the United States District Court
     for the Southern District of New York for the purposes of any suit, action
     or other proceeding arising out of this Agreement, the other Operative
     Documents, or the subject matter hereof or thereof or any of the
     transactions contemplated hereby or thereby brought by any of the parties
     hereto or their successors or assigns; (ii) hereby irrevocably agrees that
     all claims in respect of such action or proceeding may be heard and
     determined in such New York State court, or in such federal court; and
     (iii) to the extent permitted by Applicable Law, hereby irrevocably
     waives, and agrees not to assert, by way of motion, as a defense, or
     otherwise, in any such suit, action or proceeding any claim that it is not
     personally subject to the jurisdiction of the above-named courts, that the
     suit, action or proceeding is brought in an inconvenient forum, that the
     venue of the suit, action or proceeding is improper or that this
     Agreement, the other Operative Documents, or the subject matter hereof or
     thereof may not be enforced in or by such court.

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO
     HEREBY IRREVOCABLY WAIVES THE RIGHT TO DEMAND A TRIAL BY JURY, IN ANY SUCH
     SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT, THE OTHER
     OPERATIVE DOCUMENTS, OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY OF THE
     TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY BROUGHT BY ANY OF THE PARTIES
     HERETO OR THEIR SUCCESSORS OR ASSIGNS.

                                      76

<PAGE>

By the execution and delivery of this Agreement, the Facility Lessee
     designate, appoint and empower National Registered Agents, Inc., 440 Ninth
     Avenue, 5th Floor, New York, New York 10001, and the Owner Lessor
     designates, appoints and empowers CT Corporation System, with an office at
     111 Eighth Avenue, New York, New York 10011, as its authorized agent to
     receive for and on its behalf service of any summons, complaint or other
     legal process in any such action, suit or proceeding in the State of New
     York for so long as any obligation of the Facility Lessee or the Owner
     Lessor, as applicable, shall remain outstanding hereunder or under any of
     the other Operative Documents. the Facility Lessee shall grant an
     irrevocable power of attorney to CT Corporation System, in respect of such
     appointment and shall maintain such power of attorney in full force and
     effect for so long as any obligation of the Facility Lessee shall remain
     outstanding hereunder or under any of the Operative Documents.

Further Assurances. Each party hereto will promptly and duly execute and
deliver such further documents to make such further assurances for and take
such further action reasonably requested by any party to whom such first party
is obligated, all as may be reasonably necessary to carry out more effectively
the intent and purpose of this Agreement and the other Operative Documents.

Effectiveness. This Agreement has been dated as of the date first above written
for convenience only. This Agreement shall be effective on the date of
execution and delivery by each of the parties hereto.

Measuring Life. If and to the extent that any of the options, rights and
privileges granted under this Agreement, would, in the absence of the
limitation imposed by this sentence, be invalid or unenforceable as being in
violation of the rule against perpetuities or any other rule or law relating to
the vesting of interests in property or the suspension of the power of
alienation of property, then it is agreed that notwithstanding any other
provision of this Agreement, such options, rights and privileges, subject to
the respective conditions hereof governing the exercise of such options, rights
and privileges, will be exercisable only during (a) the longer of (i) a period
which will end twenty-one (21) years after the death of the last survivor of
the descendants living on the date of the execution of this Agreement of the
following Presidents of the United States: Franklin D. Roosevelt, Harry S.
Truman, Dwight D. Eisenhower, John F. Kennedy, Lyndon B. Johnson, Richard M.
Nixon, Gerald R. Ford, James E. Carter, Ronald W. Reagan, George H.W. Bush,
William J. Clinton and George W. Bush or (ii) the period provided under the
Uniform Statutory Rule Against Perpetuities or (b) the specific applicable
period of time expressed in this Agreement, whichever of (a) and (b) is
shorter.

No Partnership, Etc. The parties hereto intend that nothing contained in this
Participation Agreement or any other Operative Document shall be deemed or
construed to create a partnership, joint venture or other co-ownership
arrangement by and among any of them.

Entire Agreement. This Agreement, together with the other applicable Operative
Documents, constitutes the entire agreement of the parties hereto and thereto
with respect to the subject matter hereof and thereof and supersedes all oral
and all prior written agreements and understandings with respect to such
subject matter; provided that, notwithstanding the foregoing, the obligations
of Calpine with respect to fees and expenses set forth in the letter agreement,

                                      77

<PAGE>

dated July 24, 2001 between Calpine and CSFB and the letter agreement dated
August 1, 2001 between Calpine and Newcourt Capital Securities, Inc. shall not
be superceded hereby and shall remain in full force and effect.

Public Utility Regulation. the Facility Lessee, the Owner Lessor and the Owner
Participant agree to cooperate and to take reasonable measures to alleviate the
source or consequence of any regulation constituting a Regulatory Event of
Loss, at the cost and expense of the Facility Lessee, so long as there shall be
no adverse consequences to the Owner Lessor or the Owner Participant as the
result of such cooperation or taking of reasonable measures.

Confidentiality of Information. Each of the parties hereto agrees that any
information (x) contained herein or in the other Operative Documents (including
any terms, conditions, agreements, financial projections, and other financial
and operating information contained herein or therein, and the terms of any
insurance policies required or otherwise maintained pursuant hereto), (y)
disclosed or to be disclosed by one such party to another such party (for
purposes of this Section 14.21, each of the parties to this Agreement being
referred to herein as a "Receiving Party") in connection with this Agreement or
any other Operative Document, or (z) otherwise received in connection with this
Agreement or any other Operative Document (or the transactions contemplated
thereby) and designated by the disclosing party in writing as confidential,
shall, in each case, be kept confidential by the Receiving Party and shall not
be used otherwise than in connection with the business of the Parties
contemplated hereunder except:

to the extent such information is generally available to the public prior
     to the Receiving Party's receipt thereof, or which becomes public after
     such receipt, but through no violation by such Receiving Party of this
     Section 14.21;

as may be required by Applicable Law or, upon prompt prior written notice
     to the affected party, by judicial process;

as may be independently developed by the Receiving Party other than in
     connection with the transactions contemplated hereby with respect to the
     Facility or the Facility Site;

as may be disclosed to counsel, auditors or accountants to the Receiving
     Party, or to the National Association of Insurance Commissioners;

to the extent used in connection with any litigation to which the
     Receiving Party is a party, provided that the other parties hereto shall
     have been given prompt prior written notice (to the extent permitted by
     law) of such proposed disclosure;

as may be disclosed to any transferee or proposed transferee of the
     Receiving Party; provided, however, that, prior to any such disclosure,
     any such transferee or proposed transferee, as the case may be, shall have
     agreed in writing to be bound by the terms of this Section 14.21; or

as may be necessary or desirable in connection with the enforcement of
     remedies by any party to any of the Operative Documents.

          The foregoing obligation as to confidentiality and non-use shall
survive the termination of this Agreement for a period of five years.

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<PAGE>

Reliance. Calpine and the Facility Lessee agree that the Transaction Parties
may rely on the Environmental Reports.

Amendments, Etc. No Operative Document nor any of the terms thereof (including
the terms of this Section 14.23) may be terminated, amended, supplemented,
waived or modified, except by an instrument in writing (a) signed in the case
of a waiver, by the party against which enforcement of such waiver is sought,
and no such waiver shall become effective unless signed copies thereof shall
have been delivered to each such party or (b) in the case of termination,
amendments, supplements or modifications, consented to by all parties hereto;
provided, however, that the consent of the Facility Lessee is not required in
the case of amendments to any Operative Document to which the Facility Lessee
is not a party and which would not increase or accelerate the Facility Lessee's
or the Guarantor's obligations under any of the Operative Documents nor impair
the Facility Lessee's or the Guarantor's rights under any of the Operative
Documents. Notwithstanding the foregoing, Section 5.6 of the Collateral Trust
Indenture shall not be amended without the Guarantor's consent.

                                      79

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this
Participation Agreement to be executed and delivered by their respective
officers thereunto duly authorized.

                         ROCKGEN ENERGY LLC,
                         a Wisconsin limited liability company

                              By: ___________________________________
                              Name:
                              Title:
                              Date:

<PAGE>

                              ROCKGEN OL-1 LLC, a Delaware limited liability
                              company

                              By: WELLS FARGO BANK NORTHWEST, NATIONAL
                              ASSOCIATION
                              not in its individual capacity but solely as
                              Lessor Manager

                              By: ___________________________________
                              Name:
                              Title:
                              Date:

                              SBR OP-1 LLC, a Delaware limited liability
                              company

                              By: WELLS FARGO BANK NORTHWEST, NATIONAL
                              ASSOCIATION
                              not in its individual capacity but solely as
                              Lessor Manager

                              By: ___________________________________
                              Name:
                              Title:
                              Date:

                              WELLS FARGO BANK NORTHWEST,
                              NATIONAL ASSOCIATION,
                         not in its individual capacity, except as expressly
                         provided herein, but solely as Lessor Manager

                         By:  ___________________________________
                              Name:
                              Title:
                              Date:

<PAGE>

                              STATE STREET BANK AND TRUST COMPANY OF
                              CONNECTICUT, NATIONAL ASSOCIATION,
                         not in its individual capacity, except to the extent
                         expressly provided herein, but solely as Indenture
                         Trustee under the Collateral Trust Indenture

                              By: ___________________________________
                              Name:
                              Title:
                              Date:

                              STATE STREET BANK AND TRUST COMPANY OF
                              CONNECTICUT, NATIONAL ASSOCIATION,
                         not in its individual capacity, except to the extent
                         expressly provided herein, but solely as Pass Through
                         Trustees under the Pass Through Trust Agreement

                              By: ___________________________________
                              Name:
                              Title:
                              Date:

<PAGE>

                              CALPINE CORPORATION
                                               a Delaware corporation

                              By: ___________________________________
                              Name:
                              Title:
                              Date:

<PAGE>

              APPENDIX A - DEFINITIONS AND RULES OF INTERPRETATION

RULES OF INTERPRETATION

          In this Appendix A and each Operative Document (as hereinafter
defined), unless otherwise provided herein or therein:

     (a)   the terms set forth in this Appendix A or in any such Operative
     Document shall have the meanings herein provided for and any term used in
     an Operative Document and not defined therein or in this Appendix A but
     in another Operative Document shall have the meaning herein or therein
     provided for in such other Operative Document;

     (b)   any term defined in this Appendix A by reference to another
     document, instrument or agreement shall continue to have the meaning
     ascribed thereto whether or not such other document, instrument or
     agreement remains in effect;

     (c)   words importing the singular include the plural and vice versa;

     (d)   words importing a gender include any gender;

     (e)   a reference to a part, clause, section, paragraph, article, party,
     annex, appendix, exhibit, schedule or other attachment to or in respect
     of an Operative Document is a reference to a part, clause, section,
     paragraph, or article of, or a party, annex, appendix, exhibit, schedule
     or other attachment to, such Operative Document unless, in any such case,
     otherwise expressly provided in any such Operative Document;

     (f)   a reference to any statute, regulation, proclamation, ordinance or
     law includes all statutes, regulations, proclamations, ordinances or laws
     varying, consolidating or replacing the same from time to time, and a
     reference to a statute includes all regulations, policies, protocols,
     codes, proclamations and ordinances issued or otherwise applicable under
     that statute unless, in any such case, otherwise expressly provided in
     any such statute or in such Operative Document;

     (g)   a definition of or reference to any document, schedule, exhibit,
     instrument or agreement includes an amendment or supplement to, or
     restatement, replacement, modification or novation of, any such
     document, schedule, exhibit, instrument or agreement unless otherwise
     specified in such definition or in the context in which such reference
     is used;

     (h)   a reference to a particular section, paragraph or other part of a
     particular statute shall be deemed to be a reference to any other section,
     paragraph or other part substituted therefor from time to time;

                                      2

<PAGE>

     (i)   if a capitalized term describes, or shall be defined by reference
     to, a document, instrument or agreement that has not as of any particular
     date been executed and delivered and such document, instrument or
     agreement is attached as an exhibit to the Participation Agreement (as
     hereinafter defined), such reference shall be deemed to be to such form
     and, following such execution and delivery and subject to paragraph (g)
     above, to the document, instrument or agreement as so executed and
     delivered;

     (j)   a reference to any Person (as hereinafter defined) includes such
     Person's successors and permitted assigns;

     (k)   any reference to "days" shall mean calendar days unless "Business
     Days" (as hereinafter defined) are expressly specified;

     (l)   if the date as of which any right, option or election is
     exercisable, or the date upon which any amount is due and payable, is
     stated to be on a date or day that is not a Business Day, such right,
     option or election may be exercised, and such amount shall be deemed due
     and payable, on the next succeeding Business Day with the same effect as
     if the same was exercised or made on such date or day (without, in the
     case of any such payment, the payment or accrual of any interest or other
     late payment or charge, provided such payment is made on such next
     succeeding Business Day);

     (m)   any reference to the satisfaction, release and/or discharge of the
     Collateral Trust Indenture or the Collateral Documents (each as
     hereinafter defined) or the Lien (as hereinafter defined) thereof or
     words of similar import shall, whether or not so expressly stated, be
     deemed to be a reference to the satisfaction, release and discharge in
     full and cancellation of the Lien of the Collateral Trust Indenture or
     the Collateral Documents, as the case may be, in accordance with the
     express provisions thereof.

     (n)   words such as "hereunder", "hereto", "hereof" and "herein" and
     other words of similar import shall, unless the context requires
     otherwise, refer to the whole of the applicable document and not to any
     particular article, section, subsection, paragraph or clause thereof;
     and

     (o)   a reference to "including" shall mean including without limiting
     the generality of any description preceding such term, and for purposes
     hereof and of each Operative Document the rule of ejusdem generis shall
     not be applicable to limit a general statement, followed by or referable
     to an enumeration of specific matters, to matters similar to those
     specifically mentioned.

DEFINED TERMS

     "467 LOAN PRINCIPAL BALANCE" shall have the meaning set forth in Section
     3.2(d) of the Facility Lease.

     "ACCEPTABLE BANK" shall mean, for the purposes of Section 5.3 of the
     Facility Lease, a banking institution, the senior long-term unsecured
     debt of which is rated at least A by

                                      3

<PAGE>

     S&P and by Moody's, and which maintains an office or corresponding bank
     located in New York City.

     "ACTUAL KNOWLEDGE" shall mean, with respect to any Transaction Party,
     actual knowledge of, or receipt of written notice by, an officer (or other
     employee whose responsibilities include the administration of the Overall
     Transaction) of such Transaction Party.

     "ADDITIONAL CERTIFICATES" shall mean any additional certificates issued by
     the Pass Through Trusts in connection with the issuance of Additional
     Lessor Notes.

     "ADDITIONAL EQUITY INVESTMENT" shall mean the amount, if any, the Owner
     Participant shall provide (in its sole and absolute discretion) to finance
     all or a portion of the Owner Lessor's Percentage of the cost of any
     Required or Non-Severable Improvement financed pursuant to Section 11.1 of
     the Participation Agreement.

     "ADDITIONAL LESSOR NOTES" shall have the meaning specified in Section
     2.12(a) of the Collateral Trust Indenture.

     "AFFILIATE" of a particular Person shall mean, at any time, (a) any Person
     directly or indirectly controlling, controlled by or under common control
     with such particular Person and (b) any Person beneficially owning or
     holding, directly or indirectly, 10% or more of any class of voting or
     equity interest of such first Person or any corporation of which such
     first Person beneficially owns or holds, in the aggregate, directly or
     indirectly, 10% or more of any class of voting or equity interest. For
     purposes of this definition, "control" when used with respect to any
     particular Person shall mean the power to direct the management and
     policies of such Person, directly or indirectly, whether through the
     ownership of voting securities, by contract or otherwise, and the terms
     "controlling" and "controlled" have meanings correlative to the foregoing;
     provided, however, that under no circumstances shall the Lease Indenture
     Company be considered to be an Affiliate of either the Indenture Trustee
     or any Certificateholder, nor shall any of the Indenture Trustee or any
     Certificateholder be considered to be an Affiliate of the Lease Indenture
     Company, nor shall the Lease Indenture Company, the Indenture Trustee,
     solely because any Operative Document contemplates that any of them may
     request or act at the instruction of any such Person or such Person's
     Affiliate.

     "AFTER-TAX BASIS" shall mean, in the context of determining the amount of
     a payment to be made on such basis, the payment of an amount which, after
     reduction by the net increase in Taxes of the recipient (actual or
     constructive) of such payment, which net increase shall be calculated by
     taking into account any reduction in such Taxes resulting from any Tax
     benefits realized or to be realized by the recipient as a result of such
     payment, shall be equal to the amount required to be paid. In calculating
     the amount payable by reason of this provision, all income taxes payable
     and tax benefits realized or to be realized shall be determined on the
     assumptions that (i) the recipient shall be subject to the applicable
     income taxes at the highest marginal tax rates then applicable to
     corporate taxpayers taxed on the same basis as the recipient that are in
     effect in the applicable jurisdictions at the time such amount is received
     or properly accrued, and

                                      4

<PAGE>

     (ii) all related tax benefits are utilized at the highest marginal rates
     then applicable to corporate taxpayers taxed on the same basis as the
     recipient that are then in effect in the applicable jurisdictions.

     "AGREEMENT PERIOD" shall have the meaning set forth in Section 7.6 of
     the Participation Agreement.

     "ALLOCATED RENT" shall have the meaning specified in Section 3.2(b) of
     the Facility Lease.

     "APPLICABLE LAW" shall mean, without limitation, all applicable laws,
     including, without limitation, all Environmental Laws, and treaties,
     judgments, decrees, injunctions, writs and orders of any court,
     arbitration board or Governmental Entity and rules, regulations,
     orders, ordinances, licenses and permits of any Governmental Entity.

     "APPLICABLE PERMIT" shall mean any Permit, including any zoning,
     environmental protection, pollution, sanitation, FERC, safety, siting or
     building Permit, (a) that is necessary at any given time in light of the
     stage of development, construction or operation of the Facility or
     Facility Site to acquire, operate, maintain, repair, own, lease or use
     the Facility, the Undivided Interest (if any), the Ground Interest or
     Facility Site as contemplated by the Operative Documents, to sell
     electricity therefrom, to enter into any Operative Document or to
     consummate any transaction contemplated thereby, or (b) that is
     necessary so that none of the Owner Lessor, the Owner Participant, the
     Lessor Manager, the Indenture Trustee, the Pass Through Trustees or any
     Certificateholder nor any Affiliate of any of them may be deemed by any
     Governmental Entity to be subject to regulation under PUHCA or under
     any other Applicable Law relating to electric utilities, generators,
     wholesalers or retailers, in each case as a result of the operation of
     the Facility or the sale of electricity therefrom.

     "APPLICABLE RATE" shall mean the Prime Rate plus 1% per annum.

     "APPRAISER" shall mean Deloitte & Touche LLP Valuation Group.

     "APPRAISAL PROCEDURE" shall mean (except with respect to the Closing
     Appraisal and any appraisal to determine Fair Market Sales Value or Fair
     Market Rental Value during any period when a Lease Event of Default shall
     have occurred and be continuing), an appraisal conducted by an appraiser
     or appraisers in accordance with the following procedures. Within ten (10)
     Business Days of written notice from the initiating party of the
     commencement of an Appraisal Procedure, the Owner Participant and the
     Facility Lessee will each appoint one Independent Appraiser, which
     Independent Appraisers shall attempt to agree upon the Fair Market Sales
     Value or Fair Market Rental Value that is the subject of the appraisal. If
     either the Owner Participant or the Facility Lessee does not appoint its
     appraiser within such ten Business Day period, the determination of the
     other appraiser shall be conclusive and binding on the Owner Participant
     and the Facility Lessee. If the appraisers appointed by the Owner
     Participant and the Facility Lessee are unable to agree upon the value,
     period, amount or other determination in question within thirty (30) days,
     such appraisers shall jointly appoint a third Independent Appraiser or, if

                                      5

<PAGE>

     such appraisers do not appoint a third Independent Appraiser, the Owner
     Participant and the Facility Lessee shall jointly appoint the third
     Independent Appraiser. In such case, the average of the determinations of
     the three appraisers shall be conclusive and binding on the Owner
     Participant and the Facility Lessee, unless the determination of one
     appraiser is disparate from the middle determination by more than twice
     the amount by which the third determination is disparate from the middle
     determination, in which case the determination of the most disparate
     appraiser shall be excluded, and the average of the remaining two
     determinations shall be conclusive and binding on the Owner Participant
     and the Facility Lessee. Any appraisal determined in accordance with the
     foregoing must be delivered within thirty (30) days after the date on
     which the last of the appraisers is appointed pursuant to the process set
     forth above.

     "ASSIGNED DOCUMENTS" shall have the meaning specified in clause (1) of
     the Granting Clause of the Collateral Trust Indenture.

     "ATTRIBUTABLE DEBT" in respect of a Sale/Leaseback Transaction means, as at
     the time of determination, the present value (discounted at the rate of
     interest set forth or implicit in the terms of such lease (or, if not
     practicable to determine such rate, the weighted average rate of interest
     borne by the Certificates outstanding under the Pass Through Trust
     Agreement (calculated, in the event of the issuance of any original issue
     discount Lessor Notes, based on the imputed interest rate with respect
     thereto)), compounded annually) of the total obligations of the lessee for
     rental payments during the remaining term of the lease included in such
     Sale/Leaseback Transaction (including any period for which such lease has
     been extended).

     "AVERAGE LIFE" means, as of the date of determination, with respect to
     any Indebtedness or Preferred Stock, the quotient obtained by dividing
     (i) the sum of the products of (A) the numbers of years from the date
     of determination to the dates of each successive scheduled principal
     payment of such Indebtedness or scheduled redemption or similar payment
     with respect to such Indebtedness or Preferred Stock multiplied by (B)
     the amount of such payment by (ii) the sum of all such payments.

     "BANKRUPTCY CODE" shall mean the United States Bankruptcy Code of 1978,
     as amended from time to time, 11 U.S.C. [sec] 101 et seq.

     "BANKRUPTCY LAW" means Title 11 of the United States Code or any
     similar Federal or State law for the relief of debtors.

     "BASIC LEASE TERM" shall have the meaning specified in Section 3.1 of
     the Facility Lease.

     "BASIC RENT" shall have the meaning specified in Section 3.2(a) of the
     Facility Lease.

     "BENEFICIARY" OR "BENEFICIARIES" with respect to the Calpine Guaranty,
     shall have the meaning set forth in Section 4 thereof.

     "BILL OF SALE" shall mean the Bill of Sale (RG-1) dated as of the
     Closing Date between the Facility Lessee and the Owner Lessor,
     substantially in the form of Exhibit B-1 to the

                                      6

<PAGE>

     Participation Agreement duly completed, executed and delivered on the
     Closing Date pursuant to which the Owner Lessor will purchase the
     Undivided Interest from the Facility Lessee.

     "BOARD OF DIRECTORS" means the Board of Directors or General Partner,
     as applicable, of the Guarantor or the Facility Lessee, as the context
     requires, or any authorized committee of either thereof.

     "BOARD RESOLUTION" means a copy of a resolution certified by the
     Secretary or an Assistant Secretary of the Guarantor to have been duly
     adopted by the Board of Directors and to be in full force and effect on
     the date of such certification, and delivered to the Indenture Trustee.

     "BROAD RIVER ASSIGNMENT AGREEMENTS" shall mean each of the assignment
     agreements executed and delivered pursuant to the Broad River
     Participation Agreements.

     "BROAD RIVER CALPINE GUARANTIES" shall mean the Calpine guaranty and
     payment agreements executed and delivered by Calpine pursuant to the
     Broad River Participation Agreements.

     "BROAD RIVER COLLATERAL TRUST INDENTURES" shall mean each of the
     collateral trust indentures executed and delivered pursuant to the
     Broad River Participation Agreements.

     "BROAD RIVER FACILITY LEASES" shall mean a collective reference to each
     of the four facility lease agreements, dated as of October 18, 2001, by
     and between the applicable Broad River Owner Lessor and the Broad River
     Facility Lessee, pursuant to which the applicable Broad River Owner
     Lessor will lease the applicable Broad River Ground Interests to Broad
     River Facility Lessee.

     "BROAD RIVER FACILITY LESSEE" shall mean Broad River Energy LLC.

     "BROAD RIVER FACILITY SITE" shall have the meaning set forth in the
     recitals to the Broad River Facility Site Leases.

     "BROAD RIVER FACILITY SITE LEASES" shall mean a collective reference to
     each of the four facility site leases, dated as of October 18, 2001, by
     and between the applicable Broad River Owner Lessor and the Broad River
     Facility Lessee, pursuant to which the applicable Broad River Owner
     Lessor will lease the applicable Broad River Ground Interest to the
     Broad River Facility Lessee.

     "BROAD RIVER GROUND INTERESTS" shall mean the undivided leasehold
     interests in the Broad River Facility Site conveyed to the Broad River
     Owner Lessors under the Broad River Assignment Agreements.

     "BROAD RIVER INDENTURE TRUSTEES" shall mean each of the indenture
     trustees relating to the Broad River Collateral Trust Indentures.

                                      7

<PAGE>

     "BROAD RIVER LESSOR MANAGERS" shall mean each of the lessor managers
     acting on behalf of the Broad River Owner Lessors pursuant to the Broad
     River Operative Documents.

     "BROAD RIVER OWNER LESSORS" shall mean Broad River OL-1, LLC, Broad
     River OL-2, LLC, Broad River OL-3, LLC and Broad River OL-4, LLC.

     "BROAD RIVER OWNER PARTICIPANTS" shall mean SBR OP-1, LLC, SBR OP-2,
     LLC, SBR OP-3, LLC and SBR OP-4, LLC.

     "BROAD RIVER LEASE TRANSACTIONS" shall mean the transactions involving
     the assignment and transfer of the Broad River Undivided Interests and
     the Broad River Ground Interests to the Broad River Owner Lessors, and
     the simultaneous lease of the Broad River Undivided Interests and Broad
     River Ground Interests to the Broad River Facility Lessee on
     substantially the same terms and conditions as under, and dated the
     same date as, the Broad River Overall Transaction.

     "BROAD RIVER OPERATIVE DOCUMENTS" shall mean the other "Operative
     Documents" for each of the Broad River Lease Transactions.

     "BROAD RIVER OVERALL TRANSACTION" shall mean all of the transactions
     contemplated by the Broad River Operative Documents.

     "BROAD RIVER PARTICIPATION AGREEMENTS" shall mean a collective
     reference to each of the other three separate participation agreements
     entered into by the Broad River Facility Lessee, the applicable Broad
     River Owner Lessor, the applicable Broad River Lessor Manager, the
     applicable Broad River Owner Participant, the applicable Broad River
     Indenture Trustee, the Pass Through Trustees and Calpine and designated
     Participation Agreement (BR-1), Participation Agreement (BR-2),
     Participation Agreement (BR-3) and Participation Agreement (BR-4), each
     dated as of the Closing Date, pursuant to which, among other things,
     the Broad River Facility Lessee has agreed to (a) assign and transfer
     to the applicable Broad River Owner Lessors certain undivided leasehold
     interests in the Broad River Facility, and (b) lease from the
     applicable Broad River Owner Lessors such undivided leasehold interest
     in the Broad River Facility pursuant to the Broad River Facility Leases.

     "BROAD RIVER UNDIVIDED INTERESTS" shall mean the undivided leasehold
     interests in the Broad River Facility conveyed to the Broad River Owner
     Lessors under the Broad River Assignment Agreement.

     "BURDENSOME BUYOUT EVENT" shall mean the occurrence of any event which
     gives the Facility Lessee the right to terminate the Facility Lease
     pursuant to Section 13.1 or Section 13.2 thereof.

     "BURDENSOME TERMINATION NOTICE" shall mean a notice required in
     accordance with Section 13.1 or Section 13.2, as the case may be, of
     the Facility Lease upon the exercise of a termination option by the
     Facility Lessee.

                                      8

<PAGE>

     "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday, or a
     day on which commercial banking institutions are authorized or required
     by law, regulation or executive order to be closed in New York, New
     York, the city and the state in which the Corporate Trust Office of the
     Indenture Trustee is located or the city and state in which the Pass
     Through Trustees are located.

     "BUYER(S)" shall mean, individually or collectively, (a) Wisconsin
     Power & Light Company, (b) IES Utilities and (c) Interstate Power Company.

     "CALPINE" shall mean Calpine Corporation, a Delaware corporation.

     "CALPINE DOCUMENTS" shall mean have the meaning set forth in Section 3.1
     of the Calpine Guaranty.

     "CALPINE GUARANTY" shall mean the Calpine Guaranty and Payment Agreement
     (RG-1) dated as of the Closing Date in favor of the Beneficiaries,
     substantially in the form of Exhibit H to the Participation Agreement.

     "CALPINE GUARANTY EVENT OF DEFAULT" shall mean any of the "Events of
     Default" as specified in Section 7.1 of the Calpine Guaranty.

     "CALPINE PARTIES" shall mean Calpine, the Facility Lessee, Calpine
     Northbrook Services, LLC, and each other Affiliate of Calpine that is
     party to any Operative Document.

     "CAPITAL STOCK" means any and all shares, interests, participations or
     other equivalents (however designated) of capital stock of a
     corporation or any and all equivalent ownership interests in a Person
     (other than a corporation).

     "CAPITALIZED LEASE OBLIGATIONS" of any Person means the rental
     obligations under any lease of any property (whether real, personal or
     mixed) of which the discounted present value of the rental obligations
     of such Person as lessee, in conformity with GAAP, is required to be
     capitalized on the balance sheet of such Person; the Stated Maturity of
     any such lease shall be the date of the last payment of rent or any
     other amount due under such lease prior to the first date upon which
     such lease may be terminated by the lessee without payment of a penalty.

          "CERTIFICATE PURCHASE AGREEMENT shall mean the Certificate Purchase
Agreement, dated the Closing Date, among the Facility Lessee, Calpine, and the
Initial Purchasers.

          "CERTIFICATEHOLDER INDEMNITEE" shall have the meaning set forth in
Section 9.2(a) of the Participation Agreement.

          "CERTIFICATEHOLDERS" shall mean each of the holders of Certificates,
and each of such holder's successors and permitted assigns.

                                      9

<PAGE>

     "CERTIFICATES" shall mean the 8.400% Pass Through Certificates Series A
     issued on the Closing Date and any certificates issued in replacement
     therefor pursuant to Section 3.3, 3.4 or 3.5 of the Pass Through Trust
     Agreement.

     "CLAIM(S)" individually or collectively as the context may require,
     shall mean any liability (including in respect of negligence (whether
     passive or active or other torts), strict or absolute liability in tort
     or otherwise, warranty, latent or other defects (regardless of whether or
     not discoverable), statutory liability, property damage, bodily injury or
     death), obligation, loss, settlement, damage, penalty, claim, action,
     suit, proceeding (whether civil or criminal), judgment, penalty, fine and
     other legal or administrative sanction, judicial or administrative
     proceeding, cost, expense or disbursement, including reasonable legal,
     investigation and expert fees, expenses and reasonable related charges,
     of whatsoever kind and nature.

     "CLOSING" shall have the meaning specified in Section 2.2(a) of the
     Participation Agreement.

     "CLOSING APPRAISAL" shall mean the appraisal, dated as of the Closing
     Date, prepared by the Appraiser with respect to the Owner Lessor's
     Interest.

     "CLOSING DATE" shall have the meaning specified in Section 2.2(a) of the
     Participation Agreement.

     "CODE" shall mean the Internal Revenue Code of 1986, as amended from
     time to time, and any successor statute.

     "COLLATERAL DOCUMENTS" shall mean the Collateral Trust Indenture and the
     financing statements.

     "COLLATERAL TRUST INDENTURE" shall mean the Indenture of Trust, Mortgage
     and Security Agreement (RG-1), dated as of the Closing Date, between the
     Owner Lessor and the Indenture Trustee, in substantially the form of
     Exhibit I to the Participation Agreement.

     "COMMENCEMENT DATE" with respect to the Facility Site Lease, shall have
     the meaning specified in Section 2.1(a) of the Facility Site Lease.

     "COMPETITOR" shall have the meaning specified in Section 7.1(b) of the
     Participation Agreement.

     "COMPONENT" shall mean any appliance, part, instrument, appurtenance,
     accessory, furnishing, equipment or other property of whatever nature
     that may from time to time be incorporated in the Facility, except to
     the extent constituting Improvements or spare parts while being held
     for future use.

     "CONSOLIDATED CURRENT LIABILITIES," as of the date of determination,
     means the aggregate amount of consolidated liabilities of the Guarantor
     and its consolidated Restricted Subsidiaries which may properly be
     classified as current liabilities (including taxes accrued as
     estimated), after eliminating (i) all inter-company items between the

                                      10

<PAGE>

     Guarantor and its Subsidiaries and (ii) all current maturities of
     long-term Indebtedness, all as determined in accordance with GAAP.

     "CONSOLIDATED NET TANGIBLE ASSETS" means, as of any date of
     determination, as applied to the Guarantor, the total amount of
     Consolidated assets (less accumulated depreciation or amortization,
     allowances for doubtful receivables, other applicable reserves and
     other properly deductible items) under GAAP which would appear on a
     Consolidated balance sheet of the Guarantor and its Subsidiaries,
     determined in accordance with GAAP, and after giving effect to purchase
     accounting and after deducting therefrom, to the extent otherwise
     included, the amounts of: (i) Consolidated Current Liabilities; (ii)
     minority interests in consolidated Restricted Subsidiaries held by
     Persons other than the Guarantor or a Restricted Subsidiary; (iii)
     excess of cost over fair value of assets of businesses acquired, as
     determined in good faith by the Board of Directors; (iv) any
     revaluation or other write-up in value of assets subsequent to December
     31, 1993 as a result of a change in the method of valuation in
     accordance with GAAP; (v) unamortized debt discount and expenses and
     other unamortized deferred charges, goodwill, patents, trademarks,
     service marks, trade names, copyrights, licenses, organization or
     developmental expenses and other intangible items; (vi) treasury stock;
     and (vii) any cash set apart and held in a sinking or other analogous
     fund established for the purpose of redemption or other retirement of
     Capital Stock to the extent such obligation is not reflected in
     Consolidated Current Liabilities.

     "CONSOLIDATED SUBSIDIARY" shall mean with respect to any Person at any
     date any Subsidiary or other entity the accounts of which would be
     consolidated in accordance with GAAP with those of such Person in its
     consolidated financial statements as of such date.

     "CONSOLIDATION" means, with respect to any Person, the consolidation of
     accounts of such Person and each of its subsidiaries if and to the
     extent the accounts of such Person and such subsidiaries are
     consolidated in accordance with GAAP. The term "Consolidated" shall
     have a correlative meaning.

     "CORPORATE TRUST OFFICE" shall mean, with respect to the Indenture
     Trustee, the office of such Person in the city in which at any particular
     time its corporate trust business shall be principally administered.

     "CSFB" shall mean Credit Suisse First Boston.

     "CUSTODIAN" means any receiver, trustee, assignee, liquidator or similar
     official under any Bankruptcy Law.

     "DEBT PORTION OF TERMINATION VALUE" in respect of any determination of
     Termination Value or amount determined by reference to the Termination
     Value payable pursuant to the Operative Documents, shall mean an amount
     equal to the excess of (i) the Termination Value set forth opposite the
     Termination Date corresponding to such date of determination on
     Schedule 2 of the Facility Lease, and, if such date of determination is
     a Rent Payment Date, Periodic Rent due on that date (to the extent
     payable in arrears)

                                      11

<PAGE>

     minus (ii) the sum of (A) the Equity Portion of Termination Value and (B)
     if such date of determination is a Rent Payment Date, the Equity Portion
     of Periodic Rent due on that date.

     "DEED" means that certain Warranty Deed (RG-1), dated as of October 18,
     2001, from Facility Lessee to Owner Lessor, substantially in the form
     of Exhibit B-2 to the Participation Agreement.

     "DEFAULT" means any event which is, or after notice or passage of time
     or both would be, a Calpine Guaranty Event of Default.

     "DEPRECIATION DEDUCTION" shall have the meaning specified in Section
     1(a) of the Tax Indemnity Agreement.

     "DISCOUNT RATE" shall mean the Facility Lessee's incremental borrowing
     rate as determined by the Facility Lessee in accordance with FASB 13.

     "DOLLARS" or the sign "$" shall mean United States dollars or other
     lawful currency of the United States.

     "ENFORCEMENT NOTICE" shall have the meaning specified in Section 5.1 of
     the Collateral Trust Indenture.

     "ENGINEERING CONSULTANT" shall mean Stone and Webster Consultants, Inc.

     "ENGINEERING REPORT" shall mean, with respect to the Facility, the
     report of the Engineering Consultant, dated September 12, 2001.

     "ENVIRONMENTAL CONDITION" shall mean any action, omission, event,
     condition or circumstance, including, without limitation, the presence of
     any Hazardous Substance, which does or reasonably could (i) require
     assessment, investigation, abatement, correction, removal or remediation,
     (ii) give rise to any obligation or liability of any nature (whether
     civil or criminal, arising under a theory of negligence or strict
     liability, or otherwise) under any Environmental Law, (iii) create or
     constitute a public or private nuisance or trespass, or (iv) constitute a
     violation of or non-compliance with any Environmental Law.

     "ENVIRONMENTAL CONSULTANT" shall mean Clayton Group Services, Inc..

     "ENVIRONMENTAL LAWS" shall mean any international, national, Native
     American, provincial, regional, federal, state, municipal or local
     laws, ordinances, rules, orders, statutes, decrees, judgments,
     injunctions, directives, permits, licenses, approvals, codes,
     regulations, common or decisional law (including principles of tort,
     negligence, trespass, nuisance, strict liability, contribution and
     indemnification) or other requirement of any Governmental Entity
     relating to the environment, the safety or health of human beings or
     other living organisms, natural resources or toxic, explosive,
     corrosive, flammable, infectious, radioactive or other Hazardous
     Substances, as each may from time to time be amended, supplemented or
     supplanted.

                                      12

<PAGE>

     "ENVIRONMENTAL REPORTS" shall mean the Phase I Environmental Site
     Assessment Report, dated September 27, 2001, prepared by the Environmental
     Consultant.

     "EQUITY INVESTMENT" shall mean the amount specified with respect thereto
     on Schedule 1-A to the Participation Agreement.

     "EQUITY INVESTOR" shall mean Newcourt Capital USA Inc.

     "EQUITY PORTION OF PERIODIC RENT" shall mean for any Rent Payment Date
     the difference between (i) Periodic Rent scheduled to be paid under the
     Facility Lease on such Rent Payment Date and (ii) the principal and
     interest scheduled to be paid on the Lessor Notes on such Rent Payment
     Date.

          "EQUITY PORTION OF TERMINATION VALUE" in respect of any determination
of Termination Value or amount determined by reference to Termination Value
payable pursuant to the Operative Documents, shall mean an amount equal to the
excess, if any, of (i) the Termination Value set forth opposite the Termination
Date corresponding to such date of determination on Schedule 2 of the Facility
Lease, and, if such date of determination is a Rent Payment Date, Periodic Rent
due on that date (to the extent payable in arrears) over (ii) the balance,
including scheduled (in accordance with the payment terms of the Lessor Notes)
accrued interest, on the Lessor Notes scheduled (in accordance with the payment
terms of the Lessor Notes) to be outstanding on such date of determination
corresponding to the Facility Lease.
     "ERISA" shall mean the Employee Retirement Income Security Act of 1974.

     "ERISA AFFILIATE" shall mean each person (as defined in Section 3(9) of
     ERISA) which together with the Facility Lessee or a Subsidiary of the
     Facility Lessee would be deemed to be a "single employer" (i) within the
     meaning of Section 414(b), (c), (m) and/or (o) of the Code or (ii) as a
     result of the Facility Lessee or a Subsidiary of the Facility Lessee
     being or having been a general partner of such person.

     "EVENT OF LOSS" shall mean any of the following events:

          (i)   the loss of the Facility or use thereof due to destruction
     or damage to the Facility that renders repair uneconomic or that renders
     the Facility permanently unfit for normal use or which does not satisfy
     the preconditions for repair of the Facility set forth in Section 10 of
     the Facility Lease; or

          (ii)   any damage to the Facility that results in an insurance
     settlement with respect thereto on the basis of a total loss or an
     agreed constructive or a compromised total loss of the Facility; or

          (iii)   (a) seizure, condemnation, confiscation or taking of, or
     requisition (a "Requisition") of title to the Facility by any Governmental
     Entity that shall have resulted in loss by the Owner Lessor, of title to
     its Undivided Interest or leasehold interest of the Ground Interest,
     following exhaustion of all permitted appeals or an election by the
     Facility Lessee in its discretion not to pursue such appeals or rights;
     provided that no such contest (or exercise) shall extend beyond the earlier
     of the date which is (x) six

                                      13

<PAGE>

     months after the loss of such leasehold interest or title, or (y) 48
     months prior to the end of the Basic Lease Term or any Renewal Lease Term
     then in effect or elected by the Facility Lessee or (b) Requisition of use
     of, or leasehold in, the Undivided Interest or the Ground Interest by any
     Governmental Entity that shall have resulted in the loss of possession of
     the Undivided Interest or all or any part of the Ground Interest that is
     required for the use or operation of the Facility; provided that in any
     case involving Requisition of use of the Facility, or all or any part of
     the Facility Site that is required for the use or operation, of the
     Facility, such event shall be an Event of Loss only if loss of possession
     continues beyond the Basic Lease Term or any Renewal Lease Term then in
     effect or elected by the Facility Lessee; or

          (iv)   if elected in writing by the Owner Participant, such election
     to be made only in circumstances where the termination of the Facility
     Lease shall remove the basis of the regulation described below, subjection
     of the Owner Participant or the Owner Lessor to any public utility
     regulation of any Governmental Entity or law which in the reasonable
     opinion of the Owner Participant is burdensome, or the subjection of the
     Owner Participant's or the Owner Lessor's interest in the Facility Lease
     to any rate of return regulation by any Governmental Entity, in either
     case by reason of the participation of the Owner Lessor, the Owner
     Participant or the OP Guarantor in the transactions contemplated by the
     Operative Documents and not, in any event, as a result of (a) investments,
     loans or other business activities of the Owner Participant or any of its
     Affiliates in respect of equipment or facilities similar in nature to the
     Facility or any part thereof or in any other electrical, cogeneration or
     other energy or utility related equipment or facilities or the general
     business or other activities of the Owner Participant or any of its
     Affiliates or the nature of any of the properties or assets from time to
     time owned, leased, operated, managed or otherwise used or made available
     for use by the Owner Participant or any of its Affiliates or (b) a failure
     of the Owner Participant to perform routine, administrative or ministerial
     actions the performance of which would not subject the Owner Participant
     or any of its Affiliates to any material adverse consequence (in the
     reasonable opinion of such Owner Participant acting in good faith);
     provided that the Facility Lessee and the Owner Lessor and Owner
     Participant agree to cooperate and to take reasonable measures to
     alleviate the source or consequence of any regulation constituting an
     Event of Loss under this paragraph (iv), so long as there shall be no
     adverse consequences to the Owner Lessor or Owner Participant as a result
     of such cooperation or the taking of reasonable measures (the events and
     circumstances described herein this paragraph (iv), a "Regulatory Event of
     Loss"); or

          (v)   if elected by the Owner Participant, in the event that the FERC
     Owner Lessor EWG Order shall not have been obtained and become final
     within ninety (90) days of the Closing Date, such election to be
     conditioned upon receipt of a reasoned legal opinion of nationally
     recognized independent counsel (Owner Participant's outside counsel at
     Closing to be deemed to meet such qualifications) that any pending
     proceeding, if adversely determined, would reasonably be expected to have
     a material adverse effect on the Owner Participant or subject the Owner
     Participant or the Owner Lessor to regulation as a public utility company
     or a holding company under the Holding Company Act; or

                                      14

<PAGE>

          (vi)   if elected by the Owner Participant, in the event that the
     FERC Order set forth in clause (v) of the definition of "FERC Orders"
     herein shall not have been obtained and become final within ninety (90)
     days of the Closing Date, such election to be conditioned upon receipt of
     a reasoned legal opinion of nationally recognized independent counsel
     (Owner Participant's outside counsel at Closing to be deemed to meet such
     qualifications) that any pending proceeding, if adversely determined,
     would reasonably be expected to have a material adverse effect on the
     Owner Participant or subject the Owner Participant or the Owner Lessor to
     regulation as public utility company or a holding company under the
     Holding Company Act.

          (vii)   one or more of the Buyers under the RockGen PPA has exercised
     the purchase option to acquire the Facility pursuant to the RockGen PPA,
     such purchase option presently being set forth in Section 3.05 thereof.

     The date of occurrence of an Event of Loss described in clauses (i) or
     (ii) above shall be the date of the Facility Lessee's notice to the Owner
     Lessor, the Owner Participant, the Indenture Trustee and the Pass Through
     Trustees pursuant to Section 10.1 of the Facility Lease that it does not
     elect to rebuild the Facility pursuant to Section 10.3 of the Facility
     Lease but to pay Termination Value and terminate the Facility Lease
     pursuant to Section 10.2 thereof, or the date an Event of Loss is deemed
     to occur pursuant to the last sentence of Section 10.1 of the Facility
     Lease. The date of occurrence of an Event of Loss described in clause
     (iii)(a) above shall be the earlier of (A) the date which is six months
     following the loss of title, (B) the date upon which the Facility Lessee
     shall have concluded all efforts to contest such loss of title or exercise
     its rights of eminent domain, and (C) the date which is 48 months prior to
     the end of the Basic Lease Term or any Renewal Lease Term then in effect
     or elected by the Facility Lessee (if an event described in clause
     (iii)(a) shall be continuing at such time). The date of occurrence of an
     Event of Loss described in clause (iii)(b) above shall be the date of
     requisition of title to the Facility Site or, in the case of a requisition
     of use of the Facility Site, the date which is the scheduled expiration
     date of the Basic Lease Term or any Renewal Lease Term then in effect or
     elected by the Facility Lessee, as the case may be (if an event described
     in clause (iii)(b) shall be continuing at such time). The date of
     occurrence of an Event of Loss described in clause (iv) above shall be the
     date on which the Facility Lessee receives the Owner Participant's
     election made in accordance with such clause (iv) during any period when
     an event is continuing which upon election by Owner Participant in
     accordance with such clause (iv) would constitute a Regulatory Event of
     Loss. The date of occurrence of an Event of Loss described in clause (v)
     or (vi) above shall be the date on which the Facility Lessee receives the
     Owner Participant's election made in accordance with such clause (v) or
     (vi), as applicable. The date of occurrence of an Event of Loss in clause
     (vii) above shall be the date on which the Owner Lessor's interest is
     conveyed pursuant to the terms of the Facility Lease.

     "EXCEPTED PAYMENTS" shall mean and include (i)(A) any right, title or
     interest to any indemnity (whether or not constituting Supplemental Rent
     and whether or not a Lease Event of Default exists) payable to either the
     Owner Lessor, the Lessor Manager, the Trust Indenture Company, or the
     Owner Participant or to their respective Indemnitees and successors and
     permitted assigns (other than the Indenture Trustee) pursuant to

                                      15

<PAGE>

     Section 2.3, 9.1, 9.2, 11.1 or 11.2 of the Participation Agreement, and
     any payments under any Tax Indemnity Agreement (provided that Excepted
     Payments shall not include any Periodic Rent) or (B) any amount payable by
     the Facility Lessee to the Owner Lessor or the Owner Participant to
     reimburse any such Person for its costs and expenses in exercising its
     rights under the Operative Documents, (ii)(A) insurance proceeds, if any,
     payable to the Owner Lessor or the Owner Participant under insurance
     separately maintained by the Owner Lessor or the Owner Participant with
     respect to the Facility as permitted by Section 3(b) of Schedule 5.31 to
     the Participation Agreement or (B) proceeds of personal injury or property
     damage liability insurance maintained under any Operative Document for the
     benefit of the Owner Lessor or the Owner Participant, (iii) any amount
     payable to the Owner Participant as the purchase price of the Owner
     Participant's right and interest in the Member Interest, (iv) all other
     fees expressly payable to the Owner Participant under the Operative
     Documents, (v) any payments in respect of interest, or any payments made
     on an After-Tax Basis, to the extent attributable to payments referred to
     in clause (i) through (vi) above; (vii) any amounts paid to the Owner
     Lessor as reimbursement for amounts expended pursuant to Section 20 of the
     Facility Lease; (viii) proceeds of the items referred to in clause (i)
     through (vii) above; and (ix) any rights to demand, collect, sue for, or
     otherwise receive and enforce payment of the foregoing amounts, including
     under the Calpine Guaranty, but without limiting clause (v) of this
     definition above.

     "EXCESS AMOUNT" shall have the meaning specified in Section 14.3 of the
     Participation Agreement, and, with respect to the Collateral Trust
     Indenture, the meaning specified in Section 9.13 thereof.

     "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

     "EXCLUDED TAXES" shall have the meaning specified in Section 9.2(b) of
     the Participation Agreement.

     "EXEMPT WHOLESALE GENERATOR" or "EWG" shall mean an entity which is an
     "exempt wholesale generator" as defined in Section 32 of PUHCA.

     "FACILITY" shall mean a 520 MW nameplate capacity gas-fired simple cycle
     merchant power plant located in Christiana, Wisconsin, and more fully
     described in Exhibit A to the Participation Agreement. The Facility does
     not include the Facility Site.

     "FACILITY LEASE" shall mean, the Facility Lease Agreement (RG-1), dated
     as of October 18, 2001, between the Owner Lessor and the Facility
     Lessee, substantially in the form of Exhibit C to the Participation
     Agreement.

     "FACILITY LEASE TERM" with respect to the Facility Lease, shall mean the
     term of the Facility Lease, including the Basic Lease Term and all Renewal
     Lease Terms.

     "FACILITY LESSEE" shall have the meaning set forth in the recitals to the
     Participation Agreement.

     "FACILITY SITE" shall have the meaning set forth in the recitals to the
     Facility Site Lease.

                                      16

<PAGE>

     "FACILITY SITE LEASE" shall mean the Facility Site Lease (RG-1), dated
     as of October 18, 2001, between Facility Lessee and the Owner Lessor,
     substantially in the form of Exhibit D to the Participation Agreement,
     pursuant to which Facility Lessee will lease the Ground Interest to the
     Owner Lessor.

     "FACILITY SITE LESSEE" shall mean Owner Lessor

     "FACILITY SITE LESSOR" shall mean RockGen Energy LLC .

     "FACILITY SITE RENT" shall have the meaning set forth in Section 4.1 of
     the Facility Site Lease.

     "FACILITY SITE SUBLEASE" shall mean the Facility Site Sublease (RG-1),
     dated as of October 18, 2001, between the Facility Lessee and the Owner
     Lessor, substantially in the form of Exhibit E to the Participation
     Agreement, pursuant to which the Owner Lessor will sublease the Ground
     Interest to the Facility Lessee.

     "FACILITY SITE SUBLESSEE EVENT OF DEFAULT" shall have the meaning set
     forth in Section 13.1 of the Facility Site Lease and Section 13.1 of
     the Facility Site Sublease.

     "FAIR MARKET RENTAL VALUE" or "FAIR MARKET SALES VALUE" shall mean with
     respect to any property or service as of any date, the cash rent or cash
     price obtainable in an arm's-length lease, sale or supply, respectively,
     between an informed and willing lessee or purchaser under no compulsion to
     lease or purchase and an informed and willing lessor or seller or supplier
     under no compulsion to lease or sell or supply the property or service in
     question, and shall, in the case of the Undivided Interest or the Owner
     Lessor's Interest, be determined (except pursuant to Section 17 of the
     Facility Lease or as otherwise provided below or in the Operative
     Documents) on the basis and assumption that (i) the conditions contained
     in Sections 7 and 8 of the Facility Lease shall have been complied with in
     all respects, (ii) the lessee or buyer shall have rights in, or an
     assignment of, the Operative Documents to which the Owner Lessor is a
     party and the obligations relating thereto, (iii) the Undivided Interest
     or the Owner Lessor's Interest, as the case may be, is free and clear of
     all Liens (other than Owner Lessor's Liens, Owner Participant's Liens and
     Indenture Trustee Liens), (iv) taking into account the remaining term of
     the Facility Site Lease, and (v) in the case the Fair Market Rental Value,
     taking into account the terms of the Facility Lease and the other
     Operative Documents. If the Fair Market Sales Value of the Owner Lessor's
     Interest is to be determined during the continuance of a Lease Event of
     Default or in connection with the exercise of remedies by the Owner Lessor
     pursuant to Section 17 of the Facility Lease, such value shall be
     determined by an Independent Appraiser appointed solely by the Owner
     Lessor on an "as-is", "where-is" and "with all faults" basis and shall
     take into account all Liens (other than Owner Lessor's Liens, Owner
     Participant's Liens and Indenture Trustee Liens); provided, however, in
     any such case where the Owner Lessor shall be unable to obtain
     constructive possession sufficient to realize the economic benefit of the
     Owner Lessor's Interest, Fair Market Sales Value of the Owner Lessor's
     Interest shall be deemed equal to $0 (zero). If in any case other than in
     the preceding sentence the parties are unable to agree upon a Fair Market
     Sales Value of the Owner Lessor's Interest within 30 days after a request
     therefor
                                      17

<PAGE>

     has been made, the Fair Market Sales Value of the Owner Lessor's Interest
     shall be determined by appraisal pursuant to the Appraisal Procedures. Any
     fair market value determination of a Severable Improvement shall take into
     consideration any liens or encumbrances to which the Severable Improvement
     being appraised is subject and which are being assumed by the transferee.

     "FASB 13" shall mean the Statement of the Financial Accounting Standards
     Board No. 13, as amended and interpreted from time to time.

     "FASB 98" shall mean the Statement of the Financial Accounting Standards
     Board No. 98, as amended and interpreted from time to time.

     "FEDERAL POWER ACT" or "FPA" shall mean the Federal Power Act, as amended.

     "FERC" shall mean the Federal Energy Regulatory Commission of the United
     States or any successor or predecessor agency thereto.

     "FERC ORDERS" shall mean any or all of the following of the FERC Orders
     required pursuant to Section 4.8 of the Participation Agreement:

          (i)   a determination by FERC of EWG status of the Facility Lessee
     and Owner Lessor and the Owner Participant;

          (ii)   an approval from FERC for the Facility Lessee to sell power
     at market-based rates under Section 205 of the FPA effective on or before
     the Closing Date;

          (iii)   either an approval by FERC of the issuance of securities
     and the assumption of obligations necessary to effect the
     sale/leaseback pursuant to Section 204 of the Federal Power Act or
     blanket authorization to issue securities and assume obligations under
     such Section;

          (iv)   Intentionally Omitted; and

          (v)   an approval from FERC under Section 203 of the Federal Power
     Act for the transfer of jurisidictional facilities in the sale/leaseback
     contemplated by the Operative Documents.

     "FERC OWNER LESSOR EWG ORDER" shall mean the orders issued by the FERC
     determining that the Owner is an EWG.

     "FINAL DETERMINATION" shall have the meaning specified in Section 9 of
     the Tax Indemnity Agreement.

     "FIRST RENEWAL LEASE TERM" with respect to the Facility Lease, shall
     have the meaning specified in Section 15.1(a) of the Facility Lease.

     "FIRST WINTERGREEN RENEWAL LEASE OPTION" with respect to the Facility
     Site Lease, shall have the meaning specified in Section 2.2(a)(i) of the
     Facility Site Lease.

                                      18

<PAGE>

     "FMV RENEWAL LEASE OPTION" with respect to the Facility Lease Term, shall
     have the meaning set forth in Section 2.2(a)(iii) of the Facility Site
     Lease.

     "FMV RENEWAL LEASE TERM" with respect to the Facility Lease, shall have
     the meaning specified in Section 15.2 of the Facility Lease.

     "FORECLOSURE TRANSFER" with respect to the Facility Site Lease, shall
     have the meaning set forth in Section 19.3 of the Facility Site Lease.

     "GAAP" shall mean generally accepted accounting principles.

     "GOVERNMENTAL ACTIONS" shall mean all authorizations, consents, approvals,
     waivers, exceptions, variances, filings, permits, orders, licenses,
     exemptions and declarations of or with any Governmental Entity and shall
     include those citing, environmental and operating permits and licenses
     (including the Applicable Permits) that are required for the use and
     operation of the Facility, the Undivided Interest (if any), the Ground
     Interest and the Facility Site.

     "GOVERNMENTAL ENTITY" shall mean and include any international, national,
     Native American, provincial, regional, state, municipal or local
     government, any political subdivision of any thereof or any board,
     commission, department, division, organ, instrumentality, court or agency
     of any thereof.

     "GROUND INTEREST" shall mean the Owner Lessor's 25% undivided leasehold
     interest in the Facility Site.

     "GUARANTOR" shall mean Calpine Corporation.

     "GUARANTOR ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean an assignment
     and assumption agreement in form and substance substantially in the form
     of Exhibit L to the Participation Agreement.

     "HAZARDOUS SUBSTANCE" shall mean any pollutant, contaminant, hazardous
     substance, hazardous waste, toxic substance, petroleum or
     petroleum-derived substance, waste, or additive, asbestos, PCBs,
     radioactive material, or other compound, element, material or substance
     in any form whatsoever (including products) regulated, restricted or
     controlled by or under any Environmental Law.

     "HOLDING COMPANY ACT" shall mean the Public Utility Holding Company Act of
     1935, as amended.

     "IMPROVEMENT" shall mean an addition, betterment or enlargement of the
     Facility. Improvements shall include any Required Improvements or Optional
     Improvements, but do not include Components.

     "INCOME TAXES" shall have the meaning set forth in Section 9.2(b)(i) of
     the Participation Agreement.

                                      19

<PAGE>

     "INCUR" means, as applied to any obligation, to create, incur, issue,
     assume, guarantee or in any other manner become liable with respect to,
     contingently or otherwise, such obligation, and "Incurred," "Incurrence"
     and "Incurring" shall each have a correlative meaning; provided, however,
     that any amendment, modification or waiver of any provision of any
     document pursuant to which Indebtedness was previously Incurred shall not
     be deemed to be an Incurrence of Indebtedness as long as (i) such
     amendment, modification or waiver does not (A) increase the principal or
     premium thereof or interest rate thereon, (B) change to an earlier date
     the Stated Maturity thereof or the date of any scheduled or required
     principal payment thereon or the time or circumstances under which such
     Indebtedness may or shall be redeemed, (C) if such Indebtedness is
     contractually subordinated in right of payment to the Obligations, modify
     or affect, in any manner adverse to the Beneficiaries, such subordination
     or (D) if the Guarantor is the obligor thereon, provide that a Restricted
     Subsidiary shall be an obligor and (ii) such Indebtedness would, after
     giving effect to such amendment, modification or waiver as if it were an
     Incurrence, comply with clause (i) of the first proviso to the definition
     of "Refinancing Indebtedness."

     "INDEBTEDNESS" of any Person shall mean (i) all indebtedness of such
     Person for borrowed money, (ii) all obligations of such Person evidenced
     by bonds, debentures, notes or other similar instruments, (iii) all
     obligations of such Person to pay the deferred purchase price of property
     or services, (iv) all indebtedness created or arising under any
     conditional sale or other title retention agreement with respect to
     property acquired by such Person (even though the rights and remedies of
     the seller or lender under such agreement in the event of default are
     limited to repossession or sale of such property), (v) all Lease
     Obligations of such Person (including payments of Termination Value and
     any other amounts owed pursuant to the Operative Documents), (vi) all
     obligations, contingent or otherwise, of such Person under acceptance,
     letter of credit or similar facilities, (vii) all unconditional
     obligations of such Person to purchase, redeem, retire, defease or
     otherwise acquire for value any capital stock or other equity interests of
     such Person or any warrants, rights or options to acquire such capital
     stock or other equity interests, (viii) all net obligations under "swaps",
     "caps", "floors", "collars", or other interest rate hedging contracts or
     similar arrangements, (ix) all Indebtedness of any other Person of the
     type referred to in clauses (i) through (viii), guaranteed by such Person
     or for which such Person shall otherwise (including pursuant to any
     keepwell, makewell or similar arrangement) become directly or indirectly
     liable, and (x) all Indebtedness of the type referred to in clauses (i)
     through (ix) above secured by (or for which the holder of such
     Indebtedness has an existing right, contingent or otherwise, to be secured
     by) any Lien on property (including accounts and contracts rights) owned
     by such Person, even though such Person has not assumed or become liable
     for the payment of such Indebtedness, the amount of such obligation being
     deemed to be the lesser of the value of such property or the amount of the
     obligation so secured.

     "INDEMNITEE" shall have the meaning specified in Section 9.1(a) of the
     Participation Agreement.

     "INDEMNITOR" shall have the meaning set forth in Section 13.3 of the
     Facility Site Lease.

                                      20

<PAGE>

     "INDENTURE BANKRUPTCY DEFAULT" shall mean any event or occurrence, which,
     with the passage of time or the giving of notice or both, would become an
     Lease Indenture Event of Default under Section 4.2(e) or (f) of the
     Collateral Trust Indenture.

     "INDENTURE DEFAULT" shall mean any event or occurrence, which, with the
     passage of time or the giving of notice or both, would become an Lease
     Indenture Event of Default.

     "INDENTURE ESTATE" shall have the meaning specified in the Granting Clause
     of the Collateral Trust Indenture.

     "INDENTURE TRUSTEE" shall mean State Street Bank and Trust Company of
     Connecticut, N.A., not in its individual capacity, except as expressly
     provided herein, but solely as Indenture Trustee under the Operative
     Documents.

     "INDENTURE TRUSTEE OFFICE" shall mean the office to be used for notices to
     the Indenture Trustee from time to time pursuant to Section 9.5 of the
     Collateral Trust Indenture.

     "INDENTURE TRUSTEE'S ACCOUNT" shall mean the account specified with
     respect thereto on Schedule 1-B to the Participation Agreement or such
     other account of the Indenture Trustee, as the Indenture Trustee may from
     time to time specify in a notice to the other parties to the Participation
     Agreement.

     "INDENTURE TRUSTEE'S LIENS" shall mean any Lien on the Lessor Estate, the
     Facility, the Facility Site or any part thereof or any interest therein
     arising as a result of (i) Taxes against or affecting the Lease Indenture
     Company or the Indenture Trustee, or any Affiliate thereof that are not
     related to, or that are in violation of, any Operative Document or the
     transactions contemplated thereby, (ii) Claims against or any act or
     omission of the Lease Indenture Company or the Indenture Trustee, or
     Affiliate thereof that is not related to, or that is in violation of, any
     of such Person's representations, warranties, covenants or agreements in
     an Operative Document or the transactions contemplated thereby or that is
     in breach of any covenant or agreement of the Lease Indenture Company or
     the Indenture Trustee specified therein, (iii) Taxes imposed upon the
     Lease Indenture Company or the Indenture Trustee, or any Affiliate thereof
     that are not indemnified against by the Facility Lessee pursuant to any
     Operative Document or (iv) Claims against or affecting the Lease Indenture
     Company or the Indenture Trustee, or any Affiliate thereof arising out of
     the voluntary or involuntary transfer by the Lease Indenture Company or
     the Indenture Trustee of any portion of the interest of the Lease
     Indenture Company or the Indenture Trustee in the Lessor Estate, other
     than pursuant to the Operative Documents.

     "INDEPENDENT APPRAISER" shall mean a disinterested, licensed industrial
     property appraiser who is a member of the Appraisal Institute having
     experience in the business of evaluating facilities similar to the
     Facility.

     "INITIAL LESSOR NOTES" shall have the meaning set forth in Section 2.2 of
     the Collateral Trust Indenture.

                                      21

<PAGE>

     "INITIAL PURCHASERS" shall mean CSFB, Banc of America Securities LLC,
     Scotia Capital (USA) Inc. and TD Securities (USA) Inc.

     "INITIAL SUBLEASE TERM" with respect to a Facility Site Sublease, shall
     have the meaning set forth in Section 2.1(a) of such Facility Site
     Sublease.

     "INITIAL TERM" with respect to the Facility Site Lease, shall have the
     meaning specified in Section 2.1(a) of the Facility Site Lease.

     "INSURANCE CONSULTANT" shall mean Marsh USA, Inc.

     "INVESTMENT BANKER" shall have the meaning set forth in Section 2.10(d)
     of the Collateral Trust Indenture.

     "INVESTMENT COMPANY ACT" shall mean the Investment Company Act of 1940.

     "INVESTMENT GRADE" with respect to a Rating Agency, shall mean, with
     respect to S&P, BBB- or higher, and with respect to Moody's, Baa3 or
     higher, or, if after the Closing Date a different system of ratings is
     established, the term shall mean a rating in one of such Rating Agency's
     generic rating categories that is comparable to such ratings.

     "IRS" shall mean the Internal Revenue Service of the United States
     Department of Treasury or any successor agency.

     "L/C BANK" shall mean the Acceptable Bank providing a letter of credit
     pursuant to Section 5.3 of the Facility Lease.

     "LEASE DEBT" shall mean the debt evidenced by the Lessor Notes.

     "LEASE DEBT RATE" shall mean the applicable interest rate accruing on
     Lessor Notes.

     "LEASE DEFAULT" shall mean any event or occurrence, which, with the
     passage of time or the giving of notice or both, would become a Lease
     Event of Default.

     "LEASE EVENT OF DEFAULT" with respect to the Facility Lease, shall have
     the meaning specified in Section 16 of the Facility Lease.

     "LEASE INDENTURE COMPANY" shall mean State Street Bank and Trust Company
     of Connecticut, N.A., in its individual capacity under the Operative
     Documents.

     "LEASE INDENTURE EVENT OF DEFAULT" shall have the meaning set forth in
     Section 4.2 of the Collateral Trust Indenture.

     "LEASE OBLIGATIONS" shall mean, without duplication, (i) indebtedness
     represented by obligations under a lease that is required to be
     capitalized for financial reporting purposes, (ii) with respect to
     operating leases of electric generating facilities, the termination value
     or similar amount payable by the lessee under such lease and (iii) the
     principal amount of financial obligations under any synthetic lease, tax
     retention operating

                                      22

<PAGE>

     lease, off-balance sheet loan or similar off-balance sheet financing
     product where such transaction is considered borrowed money indebtedness
     of the lessee for tax purposes but is classified as an operating lease
     under GAAP.

     "LEASEHOLD LIEN" with respect to the Facility Site Lease or the Facility
     Site Sublease, shall have the meaning set forth in Section 16.4 of the
     Facility Site Lease or Section 15.3 of the Facility Site Sublease.

     "LEASEHOLD MORTGAGEE" with respect to the Facility Site Lease or the
     Facility Site Sublease, shall have the meaning set forth in Section 16.4
     of the Facility Site Lease or Section 15.3 of the Facility Site Sublease.

     "LESSEE 467 LOAN INTEREST" with respect to the Facility Lease, shall have
     the meaning specified in Section 3.2(d) of the Facility Lease.

     "LESSEE 467 LOAN PRINCIPAL BALANCE" with respect to the Facility Lease,
     shall have the meaning set forth in Section 3.2(d) of the Facility Lease.

     "LESSOR 467 LOAN INTEREST" with respect to the Facility Lease, shall have
     the meaning specified in Section 3.2(d) of the Facility Lease.

     "LESSOR 467 LOAN PRINCIPAL BALANCE" with respect to the Facility Lease,
     shall have the meaning set forth in Section 3.2(d) of the Facility Lease.

     "LESSOR ESTATE" shall mean all the estate, right, title and interest of
     the Owner Lessor in, to and under the Undivided Interest, the Ground
     Interest and the Operative Documents, including all funds advanced to the
     Owner Lessor by the Owner Participant, all installments and other payments
     of Periodic Rent, Supplemental Rent or Termination Value under the
     Facility Lease, condemnation awards, purchase price, sale proceeds,
     insurance proceeds and all other proceeds, rights and interests of any
     kind for or with respect to the estate, right, title and interest of the
     Owner Lessor in, to and under the Undivided Interest, the Ground Interest
     and the Operative Documents and any of the foregoing, but shall not
     include Excepted Payments.

     "LESSOR MANAGER" shall mean Wells Fargo Bank Northwest, National
     Association not in its individual capacity, but solely as an independent
     manager under the LLC Agreement and each other Person that may from time
     to time be acting as Independent Manager in accordance with the
     provisions of the LLC Agreement.

     "LESSOR NOTE(S)" shall mean, individually or collectively as the context
     may require, the Initial Lessor Notes and Additional Lessor Notes, each
     issued pursuant to the Collateral Trust Indenture.

     "LESSOR PUT RENEWAL LEASE TERM" with respect to the Facility Lease, shall
     have the meaning specified in Section 15.2 of the Facility Lease.

     "LIEN" shall mean any mortgage, security deed, security title, pledge,
     lien, charge, encumbrance, lease, and security interest or title retention
     arrangement.

                                      23

<PAGE>

     "LLC AGREEMENT" shall mean the Amended and Restated Limited Liability
     Company Agreement, dated as of October 1, 2001, between the Owner
     Participant and the Lessor Manager, pursuant to which the Owner Lessor
     shall be governed.

     "MAJORITY IN INTEREST OF NOTEHOLDERS" as of any date of determination,
     shall mean Noteholders holding in aggregate more than 50% of the total
     outstanding principal amount of the Lessor Notes; provided, however, that
     any Note held by the Facility Lessee, the Guarantor or any Affiliate of
     either such party shall not be considered outstanding for purposes of this
     definition.

     "MAKE-WHOLE AMOUNT" shall mean, with respect to any Lessor Note subject
     to redemption pursuant to the Lease Indenture, an amount equal to the
     Discounted Present Value calculated for such Lessor Note being redeemed
     less the unpaid principal amount of such Lessor Note; provided that the
     Make Whole Amount shall not be less than zero. For purposes of this
     definition, the "Discounted Present Value" of any Lessor Note subject to
     redemption pursuant to the Lease Indenture shall be equal to the
     discounted present value, as of the date of redemption, of all principal
     and interest payments scheduled to become due in respect of such Lessor
     Note, after the date of such redemption calculated using a discount rate
     equal to the sum of (i) the yield to maturity on the U.S. Treasury
     security having an average life equal to the remaining average life of
     such Lessor Note and trading in the secondary market at the price closest
     to par and (ii) 50 basis points; provided, however, that if there is no
     U.S. Treasury security having an average life equal to the remaining
     average life of such Lessor Note, such discount rate shall be calculated
     using a yield to maturity interpolated or extrapolated on a straight-line
     basis (rounding to the nearest calendar month, if necessary) from the
     yields to maturity for two U.S. Treasury securities having average lives
     most closely corresponding to the remaining life of such Lessor Note and
     trading in the secondary market at the price closest to par.

     "MANAGER" shall mean CSFB.

     "MATERIAL ADVERSE CHANGE" and "MATERIAL ADVERSE EFFECT" shall mean a
     material adverse effect on (a) the economic prospects, operations, assets,
     financial position, results of operation or business of the Guarantor,
     including a material adverse effect on (i) the Facility, the Undivided
     Interest, the Facility Site or the Ground Interest which adversely affects
     the ability of the Guarantor to perform its obligations under the
     Operative Documents or (ii) the validity or enforceability of the
     Operative Documents, (b) the Indenture Estate or the Lessor Estate, the
     security interests in the Lessor Estate, or (c) with respect to the Owner
     Participant's (but not the Certificateholders') interest in the Undivided
     Interest, the residual value or remaining useful life of the Facility.

     "MEMBER INTEREST" shall mean the interest of the Owner Participant in the
     Owner Lessor.

     "MEMORANDUM OF FACILITY SITE LEASE" shall mean the Memorandum of Facility
     Site Lease (RG-1), dated as of the Closing Date, between the Facility
     Lessee, as landlord, and the Owner Lessor, as tenant, and filed with the
     Recorder of Dane County, Wisconsin.

                                      24

<PAGE>

     "MEMORANDUM OF FACILITY SITE SUBLEASE" shall mean the Memorandum of
     Facility Site Sublease (RG-1), dated as of the Closing Date, between the
     Owner Lessor, as sublandlord, and the Facility Lessee, as subtenant filed
     with the Recorder of Dane County, Wisconsin.

     "MEMORANDUM OF LEASE" shall mean the Memorandum of Facility Lease (RG-1),
     dated as of the Closing Date, between the Owner Lessor and the Facility
     Lessee filed with the Recorder of Dane County, Wisconsin.

     "MOODY'S" shall mean Moody's Investors Service, Inc. and any successor
     thereto.

     "MULTIEMPLOYER PLAN" shall mean any Plan that is a multiemployer plan (as
     defined in Section 4001(a)(3) of ERISA).

     "NOTE REGISTER" shall have the meaning specified in Section 2.8 of the
     Collateral Trust Indenture.

     "NOTEHOLDER(S)" shall mean any holder of record (as reflected on the Note
     Register) from time to time of a Lessor Note outstanding.

     "NOTICE PERIOD" shall have the meaning set forth in Section 7.6 of the
     Participation Agreement.

     "OBLIGATIONS" shall have the meaning set forth in Section 2.2 of the
     Calpine Guaranty.

     "OBSOLESCENCE TERMINATION DATE" shall have the meaning specified in
     Section 14.1 of the Facility Lease.

     "OFFERING CIRCULAR" shall mean the Offering Circular, dated October 11,
     2001, with respect to the Certificates.

     "OFFICER" shall mean, solely with respect to the Guarantor, the Chairman,
     the President, any Vice President, the Chief Operating Officer, the Chief
     Financial Officer, the Treasurer, the Secretary, any Assistant Treasurer,
     any Assistant Secretary or the Controller or Principal Accounting Officer
     of the Guarantor.

     "OFFICER'S CERTIFICATE" shall mean with respect to any Person, a
     certificate signed (i) in the case of a corporation, by the Chairman of
     the Board, the President, or a Vice President of such Person or any Person
     authorized by or pursuant to the organizational documents, the by-laws or
     any resolution of the Board of Directors or Executive Committee of such
     Person (whether general or specific) to execute, deliver and take actions
     on behalf of such Person in respect of any of the Operative Documents,
     (ii) in the case of a partnership, by the Chairman of the Board of
     Directors, the President or any Vice President, the Treasurer or an
     Assistant Treasurer of a corporate general partner and (iii) in the case
     of an Indenture Trustee, a certificate signed by a Responsible Officer of
     such Indenture Trustee.

                                      25

<PAGE>

     "OFFICIAL RECORDS" shall have the meaning specified in the recitals to the
     Facility Site Lease.

     "OP ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean an assignment and
     assumption agreement in form and substance substantially in the form of
     Exhibit J to the Participation Agreement.

     "OP GUARANTOR" shall mean Newcourt Credit Group USA Inc., or any Person
     that shall guaranty the obligations of a Transferor under the Operative
     Documents in accordance with Section 7.1 of the Participation Agreement.

     "OP LLC AGREEMENT" shall mean the Amended and Restated Limited Liability
     Company Agreement, dated as of October 1, 2001, between Newcourt Capital
     USA Inc. and the Lessor Manager, pursuant to which the Owner Participant
     shall be governed.

     "OP PARENT GUARANTY" shall mean, as applicable, (i) that certain guaranty
     of Newcourt Credit Group USA Inc., dated as of the Closing Date in favor
     of the Facility Lessee, the Owner Lessor, the Lessor Manager, the Trust
     Company, the Indenture Trustee, the Pass Through Trustees and the
     Certificateholders, or (ii) any other guaranty agreement provided by an OP
     Guarantor in form and substance substantially in the form of Exhibit G to
     the Participation Agreement.

     "OPERATIVE DOCUMENTS" shall mean the Participation Agreement, the Bill of
     Sale, the Facility Lease, the Certificates, the Facility Site Lease, the
     Facility Site Sublease, the Collateral Trust Indenture, the Lessor Notes,
     the Pass Through Trust Agreements, the LLC Agreement, the Tax Indemnity
     Agreement, the Calpine Guaranty, the OP Parent Guaranty (if any), the
     Certificate Purchase Agreement, and the Ownership and Operation Agreement.

     "OPERATOR" shall mean Calpine Northbrook Services, LLC or any replacement
     Operator appointed pursuant to the Operative Documents.

     "OPINION OF COUNSEL" shall mean, with respect to any Calpine Party, a
     written opinion (i) from Ronald W. Fischer or any other internal counsel
     of Calpine, as to matters contained in such opinions delivered at Closing,
     and as to all other matters, Thelen Reid & Priest LLP and/or Davis Wright
     & Tremaine LLP, or any other outside legal counsel reasonably acceptable
     to the Owner Participant, (ii) in form and substance (with respect to
     qualifications, exception, assumption and the like) substantially
     equivalent to the legal opinions delivered at Closing, with any material
     modification or supplements thereto to be reasonably acceptable to the
     Owner Participant, or in any such other form as may be reasonably
     acceptable to the Owner Participant, and (iii) the scope of which shall
     cover due authorization, execution, delivery and enforceability of the
     applicable agreement(s), and exemption from regulation, in each case,
     substantially in the form set forth in the opinions delivered at Closing
     with any material modifications thereto to be reasonably acceptable to the
     Owner Participant.

     "OPTIONAL IMPROVEMENT" with respect to the Facility Lease, shall have the
     meaning specified in Section 8.2 of the Facility Lease.

                                      26

<PAGE>

     "ORGANIC DOCUMENT" shall mean, with respect to any Person that is a
     corporation, its certificate of incorporation, its by-laws and all
     shareholder agreements, voting trusts and similar arrangements applicable
     to any of its authorized shares of capital stock; with respect to any
     Person that is a limited partnership, its certificate of limited
     partnership and partnership agreement; with respect to any Person that is
     a limited liability company, its certificate of formation and its limited
     liability company agreement, in each case, as from time to time amended,
     supplemented, amended and restated, or otherwise modified and in effect
     from time to time; and with respect to any Person that is a business
     trust, its certificate of business trust and its trust agreement, in each
     case, as from time to time amended, supplemented, amended and restated, or
     otherwise modified and in effect from time to time.

     "OTHER CALPINE GUARANTIES" shall mean collectively, the Other RockGen
     Calpine Guaranties, the Broad River Calpine Guaranties and the South
     Point Calpine Guaranties.

     "OTHER FACILITY LEASES" shall mean collectively, the Other RockGen
     Facility Leases, the Broad River Facility Leases and the South Point
     Facility Leases.

     "OTHER OWNER LESSORS" shall mean collectively, the Other RockGen Owner
     Lessors, the Broad River Owner Lessors and the South Point Owner Lessors.

     "OTHER ROCKGEN BILLS OF SALE" shall mean each of the bills of sale
     executed and delivered pursuant to the Other RockGen Participation
     Agreements.

     "OTHER ROCKGEN CALPINE GUARANTIES" shall mean the other Calpine guaranty
     and payment agreements executed and delivered by Calpine pursuant to the
     Other RockGen Participation Agreements.

     "OTHER ROCKGEN COLLATERAL TRUST INDENTURES" shall mean each of the
     collateral trust indentures executed and delivered pursuant to the Other
     RockGen Participation Agreements.

     "OTHER ROCKGEN FACILITY LEASES" shall mean the other RockGen facility
     lease agreements, dated as of October 18, 2001, by and between the Other
     RockGen Owner Lessors and the Facility Lessee, pursuant to which the Other
     RockGen Owner Lessors will lease the Other RockGen Undivided Interests to
     the Facility Lessee.

     "OTHER ROCKGEN FACILITY SITE LEASES" shall mean the other facility site
     leases, dated as of October 18, 2001, by and between the Other RockGen
     Owner Lessors and the Facility Lessee pursuant to which the Facility
     Lessee will lease the Other RockGen Ground Interests to the Other RockGen
     Owner Lessors.

     "OTHER ROCKGEN FACILITY SITE SUBLEASES" shall mean the other facility site
     subleases, dated as of October 18, 2001, by and between the Other RockGen
     Owner Lessors and the Facility Lessee pursuant to which the Other RockGen
     Owner Lessors will sublease the Ground Interest to the Facility Lessee.

                                      27

<PAGE>

     "OTHER ROCKGEN GROUND INTERESTS" shall mean the undivided interests in the
     Facility Site not conveyed to the Owner Lessor under the Facility Site
     Lease.

     "OTHER ROCKGEN INDENTURE TRUSTEES" shall mean each of the indenture
     trustees relating to the Other RockGen Collateral Trust Indentures.

     "OTHER ROCKGEN LEASE TRANSACTIONS" shall mean the transactions involving
     the sale of the Other RockGen Undivided Interests and the lease of the
     Other RockGen Ground Interests to the Other RockGen Owner Lessors, and the
     lease by the Other RockGen Owner Lessors of the Other RockGen Undivided
     Interests and sublease by the Other RockGen Owner Lessors of the Other
     RockGen Ground Interest to the Facility Lessee on substantially the same
     terms and conditions as under, and dated the same date as, the Overall
     Transaction.

     "OTHER ROCKGEN LESSOR MANAGERS" shall mean each of the lessor managers
     acting on behalf of the Other RockGen Owner Lessors pursuant to the Other
     RockGen Operative Documents.

     "OTHER ROCKGEN OWNER LESSORS" shall mean RockGen OL-2, LLC, RockGen OL-3,
     LLC and RockGen OL-4, LLC.

     "OTHER ROCKGEN OWNER PARTICIPANTS" shall mean SBR OP-2, LLC, SBR OP-3, LLC
     and SBR OP-4, LLC.

     "OTHER ROCKGEN OPERATIVE DOCUMENTS" shall mean the other "Operative
     Documents" for each of the Other RockGen Lease Transactions.

     "OTHER ROCKGEN PARTICIPATION AGREEMENTS" shall mean a collective reference
     to each of the other three separate participation agreements entered into
     by the Facility Lessee, the applicable Other RockGen Owner Lessor, the
     Other RockGen Lessor Manager, Other RockGen Owner Participant, Other
     RockGen Indenture Trustee, Pass Through Trustees and Calpine and
     designated Participation Agreement (RG-2), Participation Agreement (RG-3)
     and Participation Agreement (RG-4), each dated as of the Closing Date,
     pursuant to which, among other things, the Facility Lessee has agreed to
     (a) sell to the applicable Other RockGen Owner Lessors certain undivided
     interests in the Facility and lease certain undivided interests in the
     Facility Site, and (b) sublease from the applicable Other RockGen Owner
     Lessors such undivided interest in the Facility Site pursuant to the Other
     RockGen Facility Site Sublease.

     "OTHER ROCKGEN UNDIVIDED INTERESTS" shall mean the undivided interest in
     the Facility not conveyed to the Owner Lessor under the Bill of Sale.

     "OVERALL TRANSACTION" shall mean all of the transactions contemplated by
     the Operative Documents.

     "OVERDUE RATE" shall mean a rate per annum equal to the prime commercial
     lending rate of the Chase Manhattan Bank (as publicly announced to be
     effect from time to time,

                                      28

<PAGE>

     such rate to be adjusted automatically, without notice, on the effective
     date of any change in such rate) plus 1%.

     "OWNER LESSOR" shall mean RockGen OL-1, LLC, a Delaware limited liability
     company created for the benefit of the Owner Participant.

     "OWNER LESSOR'S ACCOUNT" shall mean Wells Fargo Bank Northwest, National
     Association, Salt Lake City, Utah, ABA # 121-000-248, Account: Corporate
     Trust Services, Account # 051-0922115, Credit to: RockGen OL-1, LLC.

     "OWNER LESSOR'S INTEREST" shall mean the Owner Lessor's right, title and
     interest in and to the Undivided Interest and the Ground Interest.

     "OWNER LESSOR'S LIEN(S)" individually or collectively as the context may
     require, shall mean any Lien on the Lessor Estate, the Facility Sites, or
     any part of any thereof or interest therein arising as a result of (i)
     Taxes against or affecting the Owner Lessor, the Trust Company or the
     Lessor Manager or any Affiliate thereof that are not related to, or that
     are in violation of, any Operative Document or the transactions
     contemplated thereby, (ii) Claims against or any act or omission of the
     Owner Lessor, the Trust Company or the Lessor Manager or Affiliate thereof
     that is not related to, or that is in violation of, any Operative Document
     or the transactions contemplated thereby or that is in breach of any
     covenant or agreement of the Owner Lessor, the Trust Company or the Lessor
     Manager specified therein, (iii) Taxes imposed upon the Owner Lessor, the
     Trust Company or the Lessor Manager or any Affiliate thereof that are not
     indemnified against by the Facility Lessee pursuant to any Operative
     Document or (iv) Claims against or affecting the Owner Lessor, the Trust
     Company or the Lessor Manager or any Affiliate thereof arising out of the
     voluntary or involuntary transfer by the Owner Lessor, the Trust Company
     or the Lessor Manager of any portion of the interest of the Owner Lessor
     in the Owner Lessor's Interest, other than pursuant to the Operative
     Documents.

     "OWNER LESSOR'S PERCENTAGE" shall mean 25%.

     "OWNER PARTICIPANT" shall mean SBR OP-1, LLC, a Delaware limited
     liability company.

     "OWNER PARTICIPANT'S ACCOUNT" shall mean the account maintained by the
     Owner Participant at the bank specified with respect thereto on Schedule
     1-C to the Participation Agreement, or such other account of the Owner
     Participant, as the Owner Participant may from time to time specify in a
     notice to the Indenture Trustee pursuant to Section 9.5 of the Collateral
     Trust Indenture.

     "OWNER PARTICIPANT'S COMMITMENT" shall mean the Owner Participant's
     investment in the Owner Lessor contemplated by Section 2.1(a) of the
     Participation Agreement.

     "OWNER PARTICIPANT'S LIEN(S)" individually or collectively as the context
     may require, shall mean any Lien on the Lessor Estate, the Facility Sites,
     or any part of any thereof or interest therein arising as a result of (i)
     Claims against or any act or omission of the Owner Participant that is not
     related to, or that is in violation of, any Operative Document

                                      29

<PAGE>

     or the transactions contemplated thereby or that is in breach of any
     covenant or agreement of the Owner Participant set forth therein, (ii)
     Taxes against the Owner Participant that are not indemnified against by
     the Facility Lessee pursuant to the Operative Documents or (iii) Claims
     against or affecting the Owner Participant arising out of the voluntary or
     involuntary transfer by the Owner Participant of any portion of the
     interest of the Owner Participant in the Member Interest, other than any
     transfer (x) pursuant to the exercise of any of the Facility Lessee's (or
     any Affiliate thereof) rights under the Operative Documents or (y) during
     the continuance of a Lease Event of Default.

     "OWNER PARTICIPANT'S NET ECONOMIC RETURN" shall mean the Owner
     Participant's anticipated (i) after-tax yield, calculated according to the
     multiple investment sinking fund method of analysis, and (ii) periodic
     GAAP income and aggregate after-tax cash flow.

     "OWNERSHIP AND OPERATION AGREEMENT" shall mean the Ownership and Operation
     Agreement, dated as of October 18, 2001, among the Facility Lessee, the
     Owner Lessor and the Other RockGen Owner Lessors.

     "OWNERSHIP INTEREST" shall mean, with respect to the Facility Lessee (or
     any assigns of the Facility Lessee), any and all equity interest in the
     Facility Lessee (or such assignee of the Facility Lessee) howsoever
     designated (whether capital stock, partnership interest, member interest
     or any equivalent interest).

     "PARTICIPATION AGREEMENT" shall mean the Participation Agreement, dated as
     of October 18, 2001, among the Facility Lessee, the Guarantor, the Owner
     Lessor, the Owner Participant, Wells Fargo Bank Northwest, National
     Association, not in its individual capacity, except as expressly provided
     therein, but solely as Lessor Manager, State Street Bank and Trust Company
     of Connecticut, as Indenture Trustee, and State Street Bank and Trust
     Company of Connecticut, as Pass Through Trustees.

     "PASS THROUGH COMPANY" shall mean State Street Bank and Trust Company of
     Connecticut, N.A., in its individual capacity, together with its
     successors and permitted assigns.

     "PASS THROUGH TRUST AGREEMENT" shall mean one or more, as the context may
     require, of (i) the Pass Through Trust Agreement A, dated as of October
     18, 2001, and (ii) the Pass Through Trust Agreement B, dated as of October
     18, 2001, in each case between the Facility Lessee and a Pass Through
     Trustee.

     "PASS THROUGH TRUSTEES" shall mean State Street Bank and Trust Company of
     Connecticut, N.A., not in its individual capacity, but solely as Pass
     Through Trustees under each of the Pass Through Trust Agreements, and each
     other Person that may from time to time be acting as a Pass Through
     Trustee in accordance with the provisions of a Pass Through Trust
     Agreement.

     "PASS THROUGH TRUSTS" shall mean the pass through trusts created pursuant
     to the Pass Through Trust Agreements.

                                      30

<PAGE>

     "PAYING AGENT" shall have the meaning set forth in Section 2.6 of the
     Collateral Trust Indenture.

     "PERIODIC RENT" with respect to the Facility Lease, shall mean the sum of
     Basic Rent and Renewal Rent, if any, as specified in Schedule 1 to the
     Facility Lease.

     "PERMIT" shall mean any action, approval, certificate, consent, waiver,
     exemption, variance, franchise, order, permit, authorization, right or
     license of or from, and any filing with a Governmental Entity.

     "PERMITTED CLOSING DATE LIENS" shall mean Permitted Liens described in
     clause (a), (b), (d), (f), (g), (i), (j), (k), (l), (m), (n) and (o) of
     the definition thereof.

     "PERMITTED ENCUMBRANCES" shall mean with respect to the Facility Site, all
     matters shown as exceptions on Schedule B to each of the Title Policies as
     in effect on the Closing Date.

     "PERMITTED INVESTMENTS" shall mean investments in securities that are: (i)
     direct obligations of the United States or any agency thereof; (ii)
     obligations fully guaranteed by the United States or any agency thereof;
     (iii) certificates of deposit or bankers acceptances issued by commercial
     banks (or any of their affiliates) organized under the laws of the United
     States or of any political subdivision thereof or under the laws of
     Canada, Japan, Switzerland or any country that is a member of the European
     Economic Community having a combined capital and surplus of at least $250
     million and having long-term unsecured debt securities then rated "A" or
     better by S&P or "A2" or better by Moody's (but at the time of investment
     not more than $25,000,000 may be invested in such certificates of deposit
     from any one bank); (iv) repurchase obligations with a term of not more
     than seven days for underlying securities of the types described in
     clauses (i) and (ii) above, entered into with any financial institution
     meeting the qualifications specified in clause (iii) above; (v) open
     market commercial paper of any corporation incorporated or doing business
     under the laws of the United States or of any political subdivision
     thereof having a rating of at least "A-1" from S&P and "P-1" from Moody's
     (but at the time of investment not more than $25,000,000 may be invested
     in such commercial paper from any one company); (vi) auction rate
     securities or money market preferred stock having one of the two highest
     ratings obtainable from either S&P or Moody's (or, if at any time neither
     S&P nor Moody's is rating such obligations, then from another nationally
     recognized rating service acceptable to the Depositary); and (vii)
     investments in money market funds or money market mutual funds sponsored
     by any securities broker dealer of recognized national standing (or an
     affiliate thereof), having an investment policy that requires
     substantially all the invested assets of such fund to be invested in
     investments described in any one or more of the foregoing clauses having a
     rating of "A" or better by S&P or "A2" or better by Moody's.

     "PERMITTED LIENS" shall mean (a) the rights and interests of the parties
     as provided in the Operative Documents, as well as the rights of
     sublessees and/or assignees to the extent set forth in or expressly
     permitted pursuant to the Facility Lease or any other Operative Document,
     (b) as to the Facility Lessee, Owner Lessor's Liens, Owner

                                      31

<PAGE>

     Participant's Liens and Indenture Trustee's Liens, (c) Liens for any tax,
     assessment or other governmental charge, either secured by a bond
     reasonably acceptable to the Indenture Trustee and the Pass Through
     Trustees and, so long as no Lease Indenture Event of Default which is not
     a Lease Event of Default exists, the Owner Lessor, or not yet due or being
     contested in good faith and by appropriate proceedings, so long as (i)
     such proceedings shall not reasonably be expected to give rise to criminal
     liability or material civil liability on the part of the Owner Lessor, the
     Owner Participant, the Lessor Manager, the Trust Company, the Indenture
     Trustee, the Pass Through Trustees or any Certificateholders, and would
     not otherwise reasonably be expected to have a Material Adverse Effect, or
     (ii) adequate reserves consistent with GAAP requirements have been
     established and are maintained, so as to assure such Persons that any
     taxes, assessments or other charges determined to be due will be promptly
     paid in full when such contest is determined, (d) materialmen's,
     mechanics', workers', repairmen's, employees' or other like Liens arising
     in the ordinary course of business or in connection with the maintenance
     or repair of the Facility, for amounts not yet due or for amounts being
     contested in good faith and by appropriate proceedings, so long as (i)
     such proceedings shall not reasonably be expected to give rise to criminal
     liability or material civil liability on the part of the Owner Lessor, the
     Owner Participant, the Lessor Manager, the Trust Company, the Indenture
     Trustee, the Pass Through Trustees or any Certificateholders, and would
     not otherwise reasonably be expected to have a Material Adverse Effect,
     and (ii) adequate reserves consistent with GAAP requirements have been
     established and are maintained, so as to ensure that any amounts
     determined to be due will be promptly paid in full when such contest is
     determined, (e) Liens arising out of judgments or awards, but only so long
     as an appeal or proceeding for review is being prosecuted in good faith
     and so long as (i) such proceedings shall not reasonably be expected to
     give rise to criminal liability or material civil liability on the part of
     the Owner Lessor, the Owner Participant, the Lessor Manager, the Trust
     Company, the Indenture Trustee, the Pass Through Trustees or any
     Certificateholders, and would not otherwise reasonably be expected to have
     a Material Adverse Effect, and (ii) adequate reserves consistent with GAAP
     requirements have been established and are maintained, so as to ensure
     that any amounts determined to be due will be promptly paid in full when
     such contest is determined, or are fully covered by insurance, (f) mineral
     rights the use and enjoyment of which do not materially interfere with the
     use and enjoyment of the Facility, (g) Permitted Encumbrances, (h) Liens,
     deposits or pledges to secure statutory obligations or performance of
     bids, tenders, contracts (other than for the repayment of borrowed money)
     or leases, or for purposes of like general nature in the ordinary course
     of its business, (i) existing Liens that have been disclosed to the
     Transaction Parties prior to the Closing Date and which are reasonably
     acceptable to the Transaction Parties, (j) Liens incident to the ordinary
     course of business that are not incurred in connection with the obtaining
     of any loan, advance or credit in respect of borrowed money permitted to
     be incurred pursuant to the Operative Documents so long as such Liens (x)
     do not in the aggregate materially impair the use of the property or
     assets of the Facility Lessee or the value of such property or assets for
     the purposes of such business and (y) shall not reasonably be expected to
     give rise to criminal liability or unindemnified, material civil liability
     on the part of the Owner Lessor, the Owner Participant, the Lessor
     Manager, the Trust Company, the Indenture Trustee, the Pass Through
     Trustees or any Certificateholders, and would not otherwise

                                      32

<PAGE>

     reasonably be expected to have a Material Adverse Effect, (k) the
     interests of the Other RockGen Owner Lessors and the Other RockGen
     Indenture Trustees in the Facility, the Facility Site and the Ownership
     and Operation Agreement, (l) the interests of the Facility Lessee, the
     Other RockGen Owner Participants, the Other RockGen Owner Lessors, the
     Other RockGen Lessor Managers, the Other RockGen Indenture Trustees, and
     Pass Through Trustees under any of the Other RockGen Operative Documents,
     (m) the Ownership and Operation Agreement and (n) the interest of the
     co-owners of the Facility as tenants in common in the Facility and the
     rights of such owners under the Ownership and Operation Agreement.

     "PERSON" shall mean any individual, corporation, cooperative, partnership,
     joint venture, association, joint-stock company, limited liability
     company, other entity, trust, unincorporated organization or government or
     any agency or political subdivision thereof or any other entity.

     "PLAN" shall mean any pension plan as defined in Section 3(2) of ERISA,
     which is maintained or contributed to by (or to which there is an
     obligation to contribute of) the Facility Lessee or a Subsidiary of the
     Facility Lessee or an ERISA Affiliate, and each such plan for the five
     year period immediately following the latest date on which Facility
     Lessee, or a Subsidiary of Facility Lessee or an ERISA Affiliate
     maintained, contributed to or had an obligation to contribute to such plan.

     "POWER MARKET CONSULTANT" shall mean Pace Energy Global Services, LLC.

     "PREFERRED STOCK", as applied to the Capital Stock of any corporation,
     means Capital Stock of any class or classes (however designated) which is
     preferred as to the payment of dividends, or as to the distribution of
     assets upon any voluntary or involuntary liquidation or dissolution of
     such corporation, over shares of Capital Stock of any other class of such
     corporation.

     "PRICING ASSUMPTIONS" shall mean the "Pricing Assumptions" (attached as
     Schedule 2 to the Participation Agreement) for the Facility Lease,.

     "PRIME RATE" shall mean the rate of interest publicly announced by
     Citibank, N.A. from time to time as its prime rate.

     "PROCEEDS" shall mean the proceeds from the sale of the Certificates by
     the Pass Through Trust to the Certificateholders on the Closing Date.

     "PROPORTIONAL RENTAL AMOUNT" shall have the meaning set forth in Section
     3.2(c) of the Facility Lease.

     "PROPOSED TAX LAW CHANGE" shall mean a Tax Law Change (a) that has been
     reported out of the Senate Finance Committee of the House Ways and Means
     Committee, (b) that has been included in the issuance or amendment of a
     proposed Treasury Regulation, (c) that is part of a bill that has been
     introduced into the House of Representatives or the Senate and which has
     been publicly endorsed by the Executive Branch or the Department of
     Treasury, or (d) with respect to which a notice of a specific proposed
     change in

                                      33

<PAGE>

     administrative guidance has been issued by the Internal Revenue Service or
     the Department of Treasury and which has been published in the Federal
     Register.

     "PRUDENT INDUSTRY PRACTICE" shall mean, at a particular time, (a) any of
     the practices, methods and acts engaged in or approved by a significant
     portion of the competitive electric generating industry at such time, or
     (b) with respect to any matter to which clause (a) does not apply, any of
     the practices, methods and acts which, in the exercise of reasonable
     judgment at the time the decision was made, could have been expected to
     accomplish the desired result at a reasonable cost consistent with good
     business practices, reliability, safety and expedition. "Prudent Industry
     Practice" is not intended to be limited to the optimum practice, method or
     act to the exclusion of all others, but rather to be a spectrum of
     possible practices, methods or acts having due regard for, among other
     things, manufacturers' warranties and the requirements of any Governmental
     Entity of competent jurisdiction.

     "PUHCA" shall mean the Public Utility Holding Company Act of 1935, as
     amended.

     "PURCHASE PRICE" with respect to the Undivided Interest, shall mean
     $56,250,000.

     "QUALIFYING CASH BIDS" with respect to the Facility Lease, shall have the
     meaning specified in Section 13.2 of the Facility Lease.

     "RATING AGENCIES" shall mean S&P and Moody's.

     "REASONABLE BASIS" for a position shall exist if tax counsel may properly
     advise reporting such position on a tax return in accordance with Formal
     Opinion 85-352 issued by the Standing Committee on Ethics and Professional
     Responsibility of the American Bar Association (or any successor to such
     opinion).

     "REBUILDING CLOSING DATE" with respect to the Facility Lease, shall have
     the meaning specified in Section 10.3(e) of the Facility Lease.

     "RECEIVING PARTY" shall have the meaning set forth in Section 14.21 of the
     Participation Agreement.

     "REDEMPTION DATE" shall mean, when used with respect to any Note to be
     redeemed, the date fixed for such redemption by or pursuant to the
     Collateral Trust Indenture or the respective Note, which date shall be a
     Termination Date.

     "REFINANCING INDEBTEDNESS" means Indebtedness that refunds, refinances,
     replaces, renews, repays or extends (including pursuant to any defeasance
     or discharge mechanism) (collectively, "refinances," and "refinanced"
     shall have a correlative meaning) any Indebtedness of the Guarantor or a
     Restricted Subsidiary existing on the date of the Guaranty or Incurred in
     compliance with the Indenture, dated as of August 10, 2000, between the
     Guarantor and Wilmington Trust Company, as Trustee (including Indebtedness
     of the Guarantor that refinances Indebtedness of any Restricted Subsidiary
     and Indebtedness of any Restricted Subsidiary that refinances Indebtedness
     of another Restricted Subsidiary) including Indebtedness that refinances
     Refinancing Indebtedness;

                                      34

<PAGE>

     provided, however, that (i) if the Indebtedness being refinanced is
     contractually subordinated in right of payment to the Obligations, the
     Refinancing Indebtedness shall be contractually subordinated in right of
     payment to such Obligations to at least the same extent as the
     Indebtedness being refinanced, (ii) the Refinancing Indebtedness is
     scheduled to mature either (a) no earlier than the Indebtedness being
     refinanced or (b) after the Stated Maturity of the Obligations, (iii) the
     Refinancing Indebtedness has an Average Life at the time such Refinancing
     Indebtedness is Incurred that is equal to or greater than the Average Life
     of the Indebtedness being refinanced and (iv) such Refinancing
     Indebtedness is in an aggregate principal amount (or if issued with
     original issue discount, an aggregate issue price) that is equal to or
     less than the aggregate principal amount (or if issued with original issue
     discount, the aggregate accreted value) then outstanding (plus fees and
     expenses, including any premium, swap breakage and defeasance costs) under
     the Indebtedness being refinanced; and provided, further, that Refinancing
     Indebtedness shall not include (x) Indebtedness of a Subsidiary of the
     Guarantor that refinances Indebtedness of the Guarantor or (y)
     Indebtedness of the Guarantor or a Restricted Subsidiary that refinances
     Indebtedness of an Unrestricted Subsidiary.

     "REGISTRAR" shall have the meaning set forth in Section 2.8 of the
     Collateral Trust Indenture.

     "REGULATORY EVENT OF LOSS" shall have meaning specified in clause (iv) of
     the definition of "Event of Loss".

     "RELATED PARTY" shall mean, with respect to any Person or its successors
     and assigns, an Affiliate of such Person or its successors and assigns and
     any director, officer, servant, employee or agent of that Person or any
     such Affiliate or their respective successors and assigns; provided that
     none of the Trust Company, the Lessor Manager or the Owner Lessor shall be
     treated as Related Parties to each other and none of the Trust Company,
     the Owner Lessor or the Lessor Manager shall be treated as a Related Party
     to any Owner Participant Equity Investor except that, for purposes of
     Section 9 of the Participation Agreement, the Owner Lessor will be treated
     as a Related Party to an Owner Participant to the extent that the Owner
     Lessor acts on the express direction or with the express consent of an
     Owner Participant.

     "RELEASE" shall mean any release, pumping, pouring, emptying, injecting,
     escaping, leaching, migrating, dumping, seepage, spill, flow, leak,
     discharge, disposal or emission.

     "RENEWAL RENT" with respect to the Facility Lease, shall mean the rent
     payable during any Renewal Lease Term, in each case as determined in
     accordance with Section 15.4 of the Facility Lease.

     "RENEWAL LEASE TERM" with respect to the Facility Lease, shall mean the
     First Renewal Lease Term, the Second Renewal Term, any FMV Renewal Lease
     Term or the Lessor Put Renewal Term.

                                      35

<PAGE>

     "RENEWAL SITE LEASE TERM(S)" individually or collectively as the context
     shall require, with respect to the Facility Site Lease, shall have the
     meaning set forth in Section 2.2(b) of the Facility Site Lease.

     "RENEWAL TERM" shall have the meaning set forth in Section 2.1(b) of the
     Facility Site Sublease.

     "RENT" shall mean Basic Rent, Renewal Rent and Supplemental Rent.

     "RENT PAYMENT DATE" with respect to the Facility Lease, shall mean,
     January 18, 2002 each May 30 and November 30 occurring thereafter (through
     and including May 30, 2031) and October 18, 2031.

     "RENT PAYMENT PERIOD" with respect to the Facility Lease, shall mean (i)
     in the case of the first Rent Payment Period the period commencing on the
     Closing Date and ending on January 18, 2002 (ii) in the case of the second
     Rent Payment Period, the period commencing on January 19, 2002 and ending
     on May 30, 2002 and (iii) in all cases thereafter (except for the last
     Rent Payment Period which period shall commence on May 31, 2031 and end
     on, and include, October 18, 2031) each six-month period commencing on
     each Rent Payment Date through and including the following May 30 or
     November 30 as the case may be.

     "REPLACEMENT COMPONENT" shall have the meaning specified in Section 7.2 of
     the Facility Lease.

     "REQUIRED IMPROVEMENT" with respect to the Facility Lease, shall have the
     meaning specified in Section 8.1 of the Facility Lease.

     "REQUISITION" shall have the meaning specified in clause (iii) of the
     definition of "Event of Loss".

     "RESPONSIBLE OFFICER" shall mean, with respect to any Person, (i) its
     Chairman of the Board, its President, any Senior Vice President, the Chief
     Financial Officer, any Vice President, the Treasurer or any other
     management employee (a) that has the power to take the action in question
     and has been authorized, directly or indirectly, by the Board of Directors
     or equivalent body of such Person, (b) working under the direct
     supervision of such Chairman of the Board, President, Senior Vice
     President, Chief Financial Officer, Vice President or Treasurer and (c)
     whose responsibilities include the administration of the Overall
     Transaction and (ii) with respect to the Pass Through Trustees and the
     Indenture Trustee an officer in their respective corporate trust
     departments.

     "RESTRICTED SUBSIDIARY" means any Subsidiary of the Guarantor that is not
     designated an Unrestricted Subsidiary by the Board of Directors.

     "REVENUES" shall have the meaning specified in clause (2) of the Granting
     Clause of the Collateral Trust Indenture.

                                      36

<PAGE>

     "ROCKGEN PPA" shall mean the Power Purchase Agreement dated as of August
     10, 1998 (as amended by Amendment No. 1 dated December 22, 1998 and
     Amendment No. 2 dated December 16, 1999) by and between the Buyers and the
     Facility Lessee, as the same may hereafter be further amended (subject to
     Section 5.33 of the RockGen PPA).

     "SALE/LEASEBACK TRANSACTION" means an arrangement relating to property
     now owned or hereafter acquired whereby the Guarantor or a Subsidiary
     transfers such property to a Person and leases it back from such Person,
     other than leases for a term of not more than 36 months or between the
     Guarantor and a Wholly Owned Subsidiary or between Wholly Owned
     Subsidiaries.

     "SCHEDULED CLOSING DATE" shall mean October 18, 2001.

     "SEC" shall mean the Securities and Exchange Commission.

     "SECOND RENEWAL LEASE TERM" with respect to the Facility Lease, shall have
     the meaning specified in Section 15.1(b) of the Facility Lease.

     "SECOND WINTERGREEN RENEWAL LEASE OPTION" with respect to the Facility
     Site Lease, shall have the meaning set forth in Section 2.2(a)(ii) of the
     Facility Site Lease.

     "SECTION 467 INTEREST" with respect to the Facility Lease, shall have the
     meaning set forth in Section 3.2(d) of the Facility Lease.

     "SECTION 467 LOAN" with respect to the Facility Lease, shall have the
     meaning specified in Section 3.2(d) of the Facility Lease.

     "SECURED INDEBTEDNESS" shall have the meaning specified in Section 1(b)
     of the Collateral Trust Indenture.

     "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

     "SEVERABLE IMPROVEMENT" shall mean any Improvement that is readily
     removable without causing material damage to the Facility.

     "SIGNIFICANT LEASE DEFAULT" shall mean, with respect to the Facility
     Lease, (i) an event that is, or solely with the passage of time or the
     giving of notice (or both) would become, a "Lease Event of Default" under
     clauses (a), (b), (c), (g), (h) or (k) of Section 16 of the Facility
     Lease, (ii) the failure of the Facility Lessee to comply in any material
     respect with its obligations under Section 6 of the Facility Lease and
     (iii) the occurrence and continuation of a Significant Lease Default under
     any Other RockGen Facility Lease.

     "SIGNIFICANT SUBSIDIARY" means any Subsidiary (other than an Unrestricted
     Subsidiary) that would be a "Significant Subsidiary" of the Guarantor
     within the meaning of Rule 1-02 under Regulation S-X promulgated by the
     SEC.

     "SITE LEASE EVENT OF DEFAULT" with respect to the Facility Site Lease,
     shall have the meaning set forth in Section 14.1 of the Facility Site
     Lease.

                                      37

<PAGE>

     "S&P" shall mean Standard & Poor's Ratings Services, a division of The
     McGraw-Hill Companies, Inc. or any successor thereto.

     "SOUTH POINT ASSIGNMENT AGREEMENTS" shall mean each of the assignment
     agreements executed and delivered pursuant to the South Point
     Participation Agreements.

     "SOUTH POINT CALPINE GUARANTIES" shall mean the Calpine guaranty and
     payment agreements executed and delivered by Calpine pursuant to the South
     Point Participation Agreements.

     "SOUTH POINT COLLATERAL TRUST INDENTURES" shall mean each of the
     collateral trust indentures executed and delivered pursuant to the South
     Point Participation Agreements.

     "SOUTH POINT FACILITY LEASES" shall mean a collective reference to each
     of the four facility lease agreements, dated as of October 18, 2001, by
     and between the applicable South Point Owner Lessor and the South Point
     Facility Lessee, pursuant to which the South Point Owner Lessor will lease
     the applicable South Point Undivided Interests to the South Point Facility
     Lessee.

     "SOUTH POINT FACILITY LESSEE" shall mean South Point Energy Center, LLC.

     "SOUTH POINT FACILITY SITE" shall have the meaning set forth in the
     recitals to the South Point Facility Site Leases.

     "SOUTH POINT FACILITY SITE LEASES" shall mean a collective reference to
     each of the four facility site leases, dated as of October 18, 2001, by
     and between the applicable South Point Owner Lessor and the South Point
     Facility Lessee, pursuant to which South Point Owner Lessor will lease the
     applicable South Point Ground Interests to the South Point Facility Lessee.

     "SOUTH POINT GROUND INTERESTS" shall mean the undivided leasehold
     interests in the South Point Facility Site conveyed to the South Point
     Owner Lessors under the South Point Facility Site Leases.

     "SOUTH POINT INDENTURE TRUSTEES" shall mean each of the indenture
     trustees relating to the South Point Collateral Trust Indentures.

     "SOUTH POINT LEASE TRANSACTIONS" shall mean the transactions involving
     the assignment and transfer of the South Point Undivided Interests and the
     South Point Ground Interests to the South Point Owner Lessors, and the
     simultaneous lease of the South Point Undivided Interests and the South
     Point Ground Interests to the South Point Facility Lessee on substantially
     the same terms and conditions as under, and dated the same date as, the
     South Point Overall Transaction.

     "SOUTH POINT LESSOR MANAGERS" shall mean each of the lessor managers
     acting on behalf of the South Point Owner Lessors pursuant to the South
     Point Operative Documents.

                                      38

<PAGE>

     "SOUTH POINT OWNER LESSORS" shall mean South Point OL-1, LLC South Point
     OL-2, LLC, South Point OL-3, LLC and South Point OL-4, LLC.

     "SOUTH POINT OWNER PARTICIPANTS" shall mean SBR OP-1, LLC, SBR OP-2, LLC,
     SBR OP-3, LLC and SBR OP-4, LLC.

     "SOUTH POINT OPERATIVE DOCUMENTS" shall mean the other "Operative
     Documents" for each of the South Point Lease Transactions.

     "SOUTH POINT OVERALL TRANSACTION" shall mean all of the transactions
     contemplated by the South Point Operative Documents.

     "SOUTH POINT PARTICIPATION AGREEMENTS" shall mean a collective reference
     to each of the four separate participation agreements entered into by the
     South Point Facility Lessee, the applicable South Point Owner Lessor, the
     applicable South Point Lessor Manager, the applicable South Point Owner
     Participant, the applicable South Point Indenture Trustee, the Pass
     Through Trustees and Calpine and designated Participation Agreement
     (SP-1), Participation Agreement (SP-2), Participation Agreement (SP-3) and
     Participation Agreement (SP-4), each dated as of the Closing Date,
     pursuant to which, among other things, the South Point Facility Lessee has
     agreed to (a) sell to the applicable South Point Owner Lessors certain
     undivided interests in the South Point Facility, and (b) lease from the
     applicable South Point Owner Lessors such undivided interest in the South
     Point Facility pursuant to the South Point Facility Leases.

     "SOUTH POINT UNDIVIDED INTERESTS" shall mean the undivided ownership
     interests in the South Point Facility conveyed to the South Point Owner
     Lessors under the South Point Bills of Sale.

     "SPECIAL LESSEE TRANSFER" shall have the meaning specified in Section
     13.2 of the Participation Agreement.

     "SPECIAL LESSEE TRANSFER AMOUNT" shall mean for any date, the amount
     determined as follows (but without duplication):

     (a)   (i) if the determination shall be a Termination Date, the Termination
     Value under the Facility Lease on such date, or (ii) if such date shall
     not be a Termination Date, the Termination Value under the Facility Lease
     on the immediately succeeding Termination Date; plus

     (b)   (i) any unpaid Basic Rent or Renewal Rent due before the date of
     determination plus (ii) if the determination date is a Rent Payment Date,
     the Basic Rent or Renewal Rent due on that date (to the extent payable in
     arrears); minus

     (c)   the sum of all outstanding principal, premium, if any, and accrued
     interest on the Lessor Notes, if any, on such determination date (in each
     case, if such determination date is a Rent Payment Date, before taking
     into account any Basic Rent or Renewal Rent due on such determination
     date).

                                      39

<PAGE>

     "SPECIAL LESSEE TRANSFER EVENT" shall mean the occurrence of (i) a
     Regulatory Event of Loss, (ii) a Burdensome Buyout Event under Section
     13.1 of the Facility Lease, or (iii) if the Owner Lessor has agreed to
     sell and the Facility Lessee has agreed to buy the Undivided Interest, a
     Burdensome Buyout Event under Section 13.2 of the Facility Lease.

     "STATED MATURITY" means, with respect to any security, the date specified
     in such security as the fixed date on which the principal of such security
     is due and payable, including pursuant to any mandatory redemption
     provision (but excluding any provision providing for the repurchase of
     such security at the option of the holder thereof upon the happening of
     any contingency).

     "SUBSIDIARY" shall mean, with respect to any Person (the "parent"), any
     corporation or other entity of which sufficient securities or other
     ownership interests having ordinary voting power to elect a majority of
     the board of directors or other Persons performing similar functions are
     at the time directly or indirectly owned by such parent.

     "SUPPLEMENTAL FINANCING" shall have the meaning specified in Section 11.1
     of the Participation Agreement.

     "SUPPLEMENTAL RENT" shall mean any and all amounts, liabilities and
     obligations (other than Basic Rent and Renewal Rent) which the Facility
     Lessee assumes or agrees to pay under the Operative Documents (whether or
     not identified as "Supplemental Rent") to the Owner Lessor or any other
     Person, including, without limitation, Termination Value.

     "SURVEY" shall mean a survey of the Facility Site, to be delivered after
     the Closing Date pursuant to Section 5.16 of the Participation Agreement,
     which inter alia, will show the location of the Facility Site.

     "TAX" or "TAXES" shall mean all fees (including license, documentation
     and registration fees), taxes (including, without limitation, income
     taxes, receipts, franchise, rental, turn over sales taxes, use taxes,
     stamp taxes, value-added taxes, excise taxes, ad valorem taxes and
     property taxes (personal and real, tangible and intangible)), licenses,
     exports, duties, recording charges, levies, assessments, withholdings ,
     fees, assessments and other charges and impositions of any nature, plus
     all related interest, penalties, fines and additions to tax, now or
     hereafter imposed by any federal, state, local or foreign government or
     other taxing authority.

     "TAX ADVANCE" shall have the meaning specified in Section 9.2(g)(iii)(5)
     of the Participation Agreement.

     "TAX ASSUMPTIONS" shall mean the items described in Section 1 of the Tax
     Indemnity Agreement.

     "TAX BENEFIT" shall have the meaning set forth in Section 9.2(e) of the
     Participation Agreement.

     "TAX CLAIM" shall have the meaning set forth in Section 9.2(g)(i) of the
     Participation Agreement.

                                      40

<PAGE>

     "TAX EVENT" shall mean any event or transaction that will be a taxable
     transaction to the holders of the Lessor Notes (or any Certificateholder)
     or result in an adverse change in the tax characterization of the Pass
     Through Trust.

     "TAX INDEMNITEE" shall have the meaning set forth in Section 9.2(a) of
     the Participation Agreement.

     "TAX INDEMNITY AGREEMENT" shall mean the Tax Indemnity Agreement (RG-1),
     dated as of the Closing Date, between the Facility Lessee and the Owner
     Participant.

     "TAX LAW CHANGE" shall have the meaning specified in Section 12(a) of the
     Participation Agreement.

     "TAX REPRESENTATION" shall mean each of the items described in Section 4
     of the Tax Indemnity Agreement.

     "TAXES AND ASSESSMENTS" with respect to the Facility Site Lease, shall
     have, collectively, the meaning set forth in Section 18.1 of the Facility
     Site Lease.

     "TERM" with respect to the Facility Site Lease or the Facility Site
     Sublease, shall have the meaning set forth in Section 2.2(b) of the
     Facility Site Lease or Section 2.1(b) of the Facility Site Sublease.

     "TERMINATION DATE" with respect to the Facility Lease, shall mean each of
     the monthly dates during the Facility Lease Term identified as a
     "Termination Date" on Schedule 2 of the Facility Lease.

     "TERMINATION PAYMENT DATE" with respect to the Facility Lease, shall have
     the meaning specified in Section 10.2(a) of the Facility Lease.

     "TERMINATION VALUE" with respect to the Facility Lease and each
     Termination Date, shall mean the amount specified on Schedule 2 to the
     Facility Lease as the corresponding "Termination Value".

     "THIRD PARTY CONSENTS" shall mean each of the following consents, the
     form of which is attached hereto as Exhibit M: (a) Clarification Letter
     from Duke Energy Trading and Marketing, L.L.C. ("DETM") with respect to
     the Tolling Agreement, dated as of January 8, 1999 (as amended), between
     DETM and the Facility Lessee; and (b) Consent and Agreement from ANR
     Pipeline Company ("ANR") with respect to the Interconnection Agreement,
     dated as of May 28, 1999 (as amended), between ANR and the Facility Lessee.

     "TIA" shall mean the Trust Indenture Act of 1939.

     "TITLE COMPANY" shall mean, First American Title Insurance Company.

     "TITLE POLICY" shall mean, the title insurance policy (#0303-7538-630)
     dated as of October 18, 2001.

                                      41

<PAGE>

     "TRANSACTION COSTS" shall mean the following costs, to the extent
     substantiated or otherwise supported in reasonable detail:

     (i)   the reasonable costs of reproducing and printing the Operative
     Documents and all costs and fees, including, but not limited to, filing
     and recording fees and recording, transfer, mortgage, intangible and
     similar taxes in connection with the execution, delivery, filing and
     recording of the Facility Lease, the Facility Site Lease, and any other
     Operative Document and any other document required to be filed or recorded
     pursuant to the provisions hereof or of any other Operative Document and
     any Uniform Commercial Code filing fees in respect of the perfection of
     any security interests created by any of the Operative Documents or as
     otherwise reasonably required by the Owner Lessor or the Indenture Trustee
     and surveyor fees;

     (ii)   the reasonable fees and expenses of Dewey Ballantine LLP, counsel to
     the Owner Participant and the Owner Lessor for their services rendered in
     connection with the negotiation, execution and delivery of the
     Participation Agreement and the other Operative Documents;

     (iii)   the reasonable fees and expenses of Reinhart, Boerner Van Deuren,
     Norris & Rieselbach, S.C.,Wisconsin counsel to the Facility Lessee;

     (iv)   the reasonable fees and expenses of Thelen Reid & Priest LLP,
     counsel to the Facility Lessee and the Guarantor for their services
     rendered in connection with the negotiation, execution and delivery of the
     Participation Agreement and other Operative Documents;

     (v)   the reasonable fees and expenses of Davis Wright & Tremaine LLP,
     special regulatory counsel to the Facility Lessee;

     (vi)   the reasonable fees and expenses of Skadden, Arps, Slate, Meagher
     and Flom LLP, counsel to the Underwriter, for their services rendered in
     connection with the negotiation, execution and delivery of the
     Participation Agreement and the other Operative Documents;

     (vii)   the reasonable fees and expenses for services rendered in
     connection with the recording of the Memorandum of Lease, the Memorandum
     of Facility Site Lease and the other applicable Operative Documents;

     (viii)   the reasonable fees and expenses of Bingham Dana LLP, counsel for
     the Indenture Trustee and the Lease Indenture Company and the Pass Through
     Company and the Pass Through Trustees, for their services rendered in
     connection with the negotiation, execution and delivery of the
     Participation Agreement and the other Operative Documents;

     (ix)   the reasonable fees, expenses and disbursements of the Indenture
     Trustee and Pass Through Trustees in connection with the execution and
     delivery of the Participation Agreement and the other Operative Documents
     to which either one is or will be a party;

                                      42

<PAGE>

     (x)   the fees and expenses of the Engineering Consultant, for its services
     rendered in connection with delivering the Engineering Report required by
     Section 4.17 of the Participation Agreement;

     (xi)   the fees and expenses of the other consultants listed in Section
     4.17 of the Participation Agreement, for their respective services
     rendered in connection with delivering the reports required by such
     Section 4.17;

     (xii)   the fees and expenses of the Appraiser, for its services rendered
     in connection with delivering the Closing Appraisal required by Section
     4.15 of the Participation Agreement;

     (xiii)   the fees and expenses of the Environmental Consultant retained by
     the Owner Participant;

     (xiv)   the debt and equity arrangement fees set forth in the letter
     agreement dated July 24, 2001 between CSFB and Calpine, and its reasonable
     out-of-pocket costs and expenses payable to the Underwriter;

     (xv)   the reasonable underwriting fees, legal fees, expenses and
     disbursement of the Initial Purchasers and any discounts or commissions in
     connection with the sale of the Certificates;

     (xvi)   all reasonable costs and expenses incurred pursuant to the
     syndication and/or sale of the debt and equity;

     (xvii)   the fees and expenses of the Rating Agencies in connection with
     the rating of the Certificates;

     (xviii) the out-of-pocket expenses of the Owner Participant, Indenture
     Trustee and the Pass Through Trustees incurred in connection with the
     Overall Transaction including cost of the title insurance and fees and
     expenses, if any, related to delivery of any non-consolidation opinions;
     and

     (xix)   the fees and expenses set forth in the letter agreement dated
     August 1, 2001 between Newcourt Capital Securities, Inc. and Calpine.

     Notwithstanding the foregoing, Transaction Costs shall not include
     internal costs and expenses such as salaries and overhead of whatsoever
     kind or nature nor costs incurred by the parties to the Participation
     Agreement pursuant to arrangements with third parties for services (other
     than those expressly referred to above), such as computer time procurement
     (other than out-of-pocket expenses of the Owner Participant), financial
     analysis and consulting, advisory services, and costs of a similar nature.

     "TRANSACTION PARTY" shall mean, individually or collectively, as the
     context shall require, all or any of the parties to the Operative
     Documents (including the Lease Indenture Company and the Pass Through
     Company).

                                      43

<PAGE>

     "TRANSACTIONS" shall mean, collectively, each of the transactions
     contemplated under the Participation Agreement and the other Operative
     Documents.

     "TRANSFEREE" shall mean a transferee of the Owner Participant permitted
     by Section 7.1 of the Participation Agreement.

     "TRANSFEREE GUARANTOR" shall have the meaning set forth in Section
     7.1(a)(iii) of the Participation Agreement.

     "TREASURY REGULATIONS" shall mean regulations, including temporary
     regulations, promulgated under the Code.

     "TRUST COMPANY" shall mean Wells Fargo Bank Northwest, National
     Association.

     "UNDERWRITER" shall mean CSFB.

     "UNDIVIDED INTEREST" shall mean the Owner Lessor's 25% undivided interest
     in the Facility.

     "UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if any,
     by which the value of the accumulated plan benefits under the Plan
     determined on a plan termination basis in accordance with actuarial
     assumptions at such time consistent with those prescribed by the PBGC for
     purposes of Section 4044 of ERISA, exceeds the fair market value of all
     plan assets allocable to such liabilities under Title IV of ERISA
     (excluding any accrued but unpaid contributions).

     "UNIFORM COMMERCIAL CODE" or "UCC" shall mean the Uniform Commercial Code
     as in effect in the applicable jurisdiction.

     "UNITED STATES PERSON" shall have the meaning specified in Section
     7701(a)(30) of the Code or any successor provision thereto.

     "UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary that at the time of
     determination shall be designated an Unrestricted Subsidiary by the Board
     of Directors in the manner provided by the Indenture, dated as of August
     10, 2000, between the Guarantor and Wilmington Trust Company, as Trustee
     and (ii) any Subsidiary of an Unrestricted Subsidiary.

     "VERIFIER" shall have the meaning specified in Section 3.4(c) of the
     Facility Lease.

     "WHOLLY OWNED SUBSIDIARY" means a Subsidiary (other than an Unrestricted
     Subsidiary) all the Capital Stock of which (other than directors'
     qualifying shares) is owned by the Guarantor or another Wholly Owned
     Subsidiary.

                                      44

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