Document:

<PAGE>
                                                                 Exhibit 4.22.26

                           Document Name:
Document Number  Indenture of Trust, Mortgage and
                 Security Agreement
===================================================================

                                              Recording Area
                                              ==================================

                                              Name and Return Address

                                              Sarah M. Ward, Esq.
                                              Skadden, Arps, Slate, Meagher &
                                              Flom, LLP
                                              Four Times Square
                                              New York, NY 10036

                                              Name of Preparer of the
                                              Document:
                                              Sarah M. Ward, Esq.

                                              ==================================

                                              Parcel Identification Number (PIN)
================================================================================

<PAGE>
                          INDENTURE OF TRUST, MORTGAGE
                             AND SECURITY AGREEMENT

                          Dated as of October 18, 2001

                                    between

                                ROCKGEN OL-4, LLC

                                      and

                          STATE STREET BANK AND TRUST
                  COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,
                      as Indenture Trustee and Account Bank

                     ______________________________________

                                ROCKGEN FACILITY

                                      2
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                Page
<S>                                                                             <C>
SECTION 1.     DEFINITIONS...................................................     8

SECTION 2.     THE LESSOR NOTES..............................................     9
     Section 2.1.   Limitation on Lessor Notes...............................     9
     Section 2.2.   Initial Lessor Notes.....................................     9
     Section 2.3.   Execution and Authentication of Lessor Notes.............     9
     Section 2.4.   Issuance and Terms of the Initial Lessor Notes...........    10
     Section 2.5.   Payments from Indenture Estate Only; No Personal
                    Liability of the Owner Lessor, the Owner Participant or
                    the Indenture Trustee ...................................    11
     Section 2.6.   Method of Payment........................................    12
     Section 2.7.   Application of Payments..................................    13
     Section 2.8.   Registration, Transfer and Exchange of Lessor Notes......    13
     Section 2.9.   Mutilated, Destroyed, Lost or Stolen Lessor Notes........    14
     Section 2.10.  Redemptions; Assumption..................................    15
     Section 2.11.  Payment of Expenses on Transfer..........................    20
     Section 2.12.  Additional Lessor Notes..................................    20
     Section 2.13.  Restrictions of Transfer Resulting from Federal
                    Securities Laws; Legend..................................    23
     Section 2.14.  Security for and Parity of Lessor Notes..................    23
     Section 2.15.  Acceptance of the Indenture Trustee......................    23

SECTION 3.     RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM
               INDENTURE ESTATE..............................................    23
     Section 3.1.   Distribution of Periodic Rent............................    23
     Section 3.2.   Payments Following Event of Loss or Other Early
                    Termination..............................................    25
     Section 3.3.   Payments After Lease Indenture Event of Default..........    27
     Section 3.4.   Investment of Certain Payments Held by the Indenture
                    Trustee..................................................    28
     Section 3.5.   Application of Certain Other Payments....................    28
     Section 3.6.   Other Payments...........................................    29
     Section 3.7.   Excepted Payments........................................    29
     Section 3.8.   Distributions to the Owner Lessor........................    29
     Section 3.9.   Payments Under Assigned Documents........................    30
     Section 3.10.  Disbursement of Amounts Received by the
                    Indenture Trustee........................................    30
</TABLE>
                                        i

<PAGE>

<TABLE>
<S>                                                                              <C>
SECTION 4.      COVENANTS OF OWNER LESSOR; DEFAULTS; REMEDIES OF INDENTURE
                TRUSTEE......................................................    34
     Section 4.1.   Covenants of Owner Lessor................................    34
     Section 4.2.   Lease Indenture Events of Default........................    34
     Section 4.3.   Remedies of the Indenture Trustee........................    37
     Section 4.4.   Right to Cure Certain Lease Events of Default............    39
     Section 4.5.   Rescission of Acceleration...............................    42
     Section 4.6.   Return of Indenture Estate, Etc..........................    42
     Section 4.7.   Power of Sale and Other Remedies.........................    43
     Section 4.8.   Appointment of Receiver..................................    44
     Section 4.9.   Remedies Cumulative......................................    44
     Section 4.10.  Waiver of Various Rights by the Owner Lessor.............    45
     Section 4.11.  Discontinuance of Proceedings............................    46
     Section 4.12.  No Action Contrary to the Facility Lessee's Rights Under
                    the Facility Lease.......................................    46
     Section 4.13.  Right of the Indenture Trustee to Perform Covenants, Etc.    46
     Section 4.14.  Further Assurances.......................................    47
     Section 4.15.  Waiver of Past Defaults..................................    47

SECTION 5.     DUTIES OF INDENTURE TRUSTEE; CERTAIN RIGHTS AND DUTIES OF
               OWNER LESSOR..................................................    47
     Section 5.1.   Notice of Action Upon Lease Indenture Event of Default...    47
     Section 5.2.   Actions Upon Instructions Generally......................    47
     Section 5.3.   Action Upon Payment of Lessor Notes or Termination of
                    Facility Lease...........................................    48
     Section 5.4.   Compensation of the Indenture Trustee; Indemnification...    48
     Section 5.5.   No Duties Except as Specified; No Action Except Under
                    Facility Lease, Indenture or Instructions................    49
     Section 5.6.   Certain Rights of the Owner Lessor.......................    49
     Section 5.7.   Restrictions on Dealing with Indenture Estate............    52
     Section 5.8.   Filing of Financing Statements and Continuation
                    Statements...............................................    52

SECTION 6.     INDENTURE TRUSTEE AND OWNER LESSOR............................    53
     Section 6.1.   Acceptance of Trusts and Duties..........................    53
     Section 6.2.   Absence of Certain Duties................................    55
     Section 6.3.   Representations and Warranties...........................    55
     Section 6.4.   No Segregation of Moneys; No Interest....................    56
     Section 6.5.   Reliance; Agents; Advice of Experts......................    56
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                              <C>
SECTION 7.     SUCCESSOR INDENTURE TRUSTEES AND SEPARATE TRUSTEES............    57
     Section 7.1.   Resignation or Removal of the Indenture Trustee;
                    Appointment of Successor.................................    57
     Section 7.2.   Appointment of Additional and Separate Trustees..........    60

SECTION 8.     SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND OTHER
               DOCUMENTS.....................................................    62
     Section 8.1.   Supplemental Indenture and Other Amendment With Consent;
                    Conditions and Limitations...............................    62
     Section 8.2.   Supplemental Indentures and other Amendments Without
                    Consent..................................................    63
     Section 8.3.   Conditions to Action by the Indenture Trustee............    64

SECTION 9.     MISCELLANEOUS.................................................    65
     Section 9.1.   Surrender, Defeasance and Release........................    65
     Section 9.2.   Conveyances Pursuant to the Site Sublease................    66
     Section 9.3.   Appointment of the Indenture Trustee as Attorney; Further
                    Assurances...............................................    66
     Section 9.4.   Indenture for Benefit of Certain Persons Only............    66
     Section 9.5.   Notices; Furnishing Documents, etc.......................    66
     Section 9.6.   Severability.............................................    68
     Section 9.7.   Limitation of Liability..................................    69
     Section 9.8.   Written Changes Only.....................................    69
     Section 9.9.   Counterparts.............................................    69
     Section 9.10.  Successors and Permitted Assigns.........................    69
     Section 9.13.  Reorganization Proceedings with Respect to the Lessor
                    Estate...................................................    70
     Section 9.14.  Withholding Taxes: Information Reporting.................    71
     Section 9.15.  Fixture Financing Statement..............................    72
</TABLE>

<TABLE>
<CAPTION>
EXHIBITS

<S>                 <C>
Exhibit A           Description of Facility Site
Exhibit B           Form of Lessor Note
Exhibit C           Form of Certificate of Authentication
Exhibit D           Description of the Facility
</TABLE>

APPENDIX A Definitions

                                       iii
<PAGE>
                          INDENTURE OF TRUST, MORTGAGE
                             AND SECURITY AGREEMENT

     This INDENTURE OF TRUST, MORTGAGE AND SECURITY AGREEMENT (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions hereof, this "Indenture"), dated as of October 18, 2001, between
ROCKGEN OL-4, LLC, a Delaware limited liability company created for the benefit
of the Owner Participant referred to below, as mortgagor (the "Owner Lessor")
and STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION as
mortgagee on behalf of the Noteholders (the "Indenture Trustee") and as the
Account Bank.

                                WITNESSETH:

     WHEREAS, RockGen Energy LLC (the "Facility Lessee") has sold the Undivided
Interest to the Owner Lessor pursuant to the Bill of Sale and leased the Ground
Interest to the Owner Lessor pursuant to the Facility Site Lease, a memorandum
of which shall be recorded with this Indenture in the appropriate registry of
deeds described in Exhibit A attached hereto;

     WHEREAS, the Owner Lessor has entered into the Facility Lease, dated as of
the date hereof (as amended, supplemented or otherwise modified from time to
time in accordance with the provisions thereof, the "Facility Lease"), with the
Facility Lessee pursuant to which the Facility Lessee has leased from the Owner
Lessor for a term of years the Owner Lessor's Undivided Interest in the
Facility;

     WHEREAS, the Owner Lessor has entered into the Facility Site Sublease,
dated as of the date hereof (as amended, supplemented or otherwise modified
from time to time in accordance with the provisions thereof, the "Facility Site
Sublease"), with the Facility Lessee pursuant to which the Facility Lessee has
subleased the Ground Interest from the Owner Lessor for a term of years;

     WHEREAS, the Facility is more particularly described on Exhibit D hereto
and made a part hereof and the Facility Site is more particularly described on
Exhibit A hereto and made a part hereof;
<PAGE>
     WHEREAS, in accordance with this Indenture, the Owner Lessor will (i)
execute and deliver the Lessor Notes, the proceeds of which will be used by the
Owner Lessor to finance a portion of the Purchase Price for the Undivided
Interest purchased from the Facility Lessee (ii) grant to the Indenture Trustee
the security interests herein provided;

     WHEREAS, this Indenture is intended to be regarded as a mortgage under the
laws of the State of Wisconsin (and not intended to qualify as an indenture),
as a security agreement under the Uniform Commercial Codes of the States of New
York, Delaware and Wisconsin, and as a fixture filing under the laws of the
State of Wisconsin;

     WHEREAS, the Owner Lessor and the Indenture Trustee desire to enter into
this Indenture, to, among other things, provide for (a) the issuance by the
Owner Lessor of the Lessor Notes to be issued on the Closing Date, and
Additional Lessor Notes from time to time and (b) the conveyance and assignment
to the Indenture Trustee on the Closing Date of the Undivided Interests
conveyed to the Owner Lessor and the Owner Lessor's right, title and interest
in and under the Operative Documents executed in connection therewith and all
payments and other amounts received hereunder or thereunder in accordance
herewith (excluding Excepted Payments);

     WHEREAS, all things have been done to make the Lessor Notes, when executed
by the Owner Lessor, authenticated and delivered hereunder and issued, the
valid obligations of the Owner Lessor; and

     WHEREAS, all things necessary to make this Indenture the valid, binding
and legal obligation of the Owner Lessor, for the uses and purposes herein set
forth, in accordance with its terms, have been done and performed and have
happened.

     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, and in order to
secure (i) the prompt payment when and as due of the principal of and the
Make-Whole Amount, if any, and interest on the Lessor Notes and of all other
amounts owing with respect to all Lessor Notes from time to time outstanding
hereunder, and the prompt payment when and as due of any and all other amounts
from time to time owing in respect of the Secured Indebtedness and (ii) the
performance and observance by the Owner Lessor for the benefit of the holders
of the Lessor Notes and the Indenture Trustee of all other obligations,
agreements, and covenants of the Owner Lessor set forth hereinafter and in

                                       2
<PAGE>
the Lessor Notes, the Operative Documents and the other documents, certificates
and agreements delivered in connection therewith:

                               GRANTING CLAUSE:

     The Owner Lessor hereby irrevocably grants, conveys, assigns, transfers,
pledges, bargains, sells and confirms unto the Indenture Trustee and its
successors and permitted assigns, for the benefit of the holders of the Lessor
Notes from time to time, a first priority security interest in and mortgage
lien on all estate, right, title and interest of the Owner Lessor in, to and
under the following described property, rights, interests and privileges,
whether now held or hereafter acquired (which collectively, including all
property hereafter specifically subjected to the security interest created by
this Indenture by any supplement hereto, exclusive of Excepted Payments) are
included within, and are hereafter referred to as, the "Indenture Estate"):

     (1)  the Undivided Interest, the Owner Lessor's interest in any
Components; the Owner Lessor's interest in any Improvements; the Ground
Interest; the Facility Lease and all payments of any kind by the Facility
Lessee thereunder (including Rent); any rights of the Owner Lessor as
collateral assignee of the Facility Lessee under the Facility Lease; the
Facility Site Lease (and all rights with respect to the Ground Interest
conveyed thereby); the Facility Site Sublease and all payments of any kind by
the Facility Lessee thereunder; the Bill of Sale (and all rights with respect
to the Facility conveyed thereby); the Owner Lessor's interest in all tangible
property located on or at or attached to the Facility Site as to which an
interest in such tangible property arises under applicable real estate law
("fixtures"); the Calpine Guaranty, the Ownership and Operation Agreement and
all and any interest in any property now or hereafter granted to the Owner
Lessor pursuant to any provision of the Facility Lease; and each other
Operative Document to which the Owner Lessor is a party other than the Tax
Indemnity Agreement and the LLC Agreement (the Undivided Interest, the Owner
Lessor's interest in any Components, the Owner Lessor's interest in any
fixtures, Improvements and the Ground Interest are collectively referred to as
the "Property Interest" and the documents specifically referred to above in
this paragraph (1) are collectively referred to as the "Assigned Documents"),
including, without limitation, (x) all rights of the Owner Lessor to receive
any payments or other amounts or, subject to Section 5.6 hereof, to exercise
any election or option or to make any decision or determination or to give or
receive any notice, consent, waiver or approval or to make any demand or to
take any other action under or in respect of any such document, to accept
surrender or redelivery of the Property Interest or any part thereof, as well
as all the rights, powers and remedies on the part of the Owner Lessor, whether
acting under any such document or by statute or

                                       3
<PAGE>
at law or in equity or otherwise, arising out of any Lease Default or Lease
Event of Default and (y) any right to restitution from the Facility Lessee, any
sublessee or any other person in respect of any determination of invalidity of
any such document;

     (2)  all rents (including Periodic Rent and Supplemental Rent),
royalties, issues, profits, revenues, proceeds, damages, claims, warranties and
other income from the property described in this Granting Clause, including,
without limitation, all payments or proceeds payable to the Owner Lessor as the
result of the sale of the Property Interest or the lease or other disposition
of the Property Interest, and all estate, right, title and interest of every
nature whatsoever of the Owner Lessor in and to such rents, issues, profits,
revenues and other income and every part thereof (the "Revenues");

     (3)  any sublease of the Facility and any assignment thereof now or
hereafter in effect, including, without limitation, (i) all rents or other
amounts or payments of any kind paid or payable by the obligor(s) thereunder or
in respect thereof and all collateral security or credit support with respect
thereto (whether cash or in the nature of a guarantee, letter of credit, credit
insurance, lien on or security interest in property or otherwise) for the
obligations of the sublessee thereunder as well as all rights of the Owner
Lessor to enforce payment of any such rents, amounts or payments, (ii) all
rights of the Owner Lessor to exercise any election or option or to make any
decision or determination or to give or receive any notice, consent, waiver or
approval or to take any other action under or in respect of any sublease of the
Facility and any assignment thereof or to accept surrender or redelivery of the
Facility or any part thereof, as well as all the rights, powers and remedies on
the part of the Owner Lessor, whether acting under any sublease of the Facility
or any assignment thereof or by statute or at law or in equity, or otherwise,
arising out of any default under such sublease or any assignment thereof, and
(iii) any right to restitution from the Facility Lessee, the applicable
sublessee or any guarantor of such sublessee in respect of any determination of
invalidity of any sublease of the Facility or any assignment thereof;

     (4)  all condemnation proceeds with respect to the Property Interest or
any part thereof (to the extent of the Owner Lessor's interest therein), and
all proceeds (to the extent of the Owner Lessor's interest therein) of all
insurance maintained pursuant to Section 11 of the Facility Lease or otherwise;

     (5)  all other property of every kind and description and interests
therein now held or hereafter acquired by the Owner Lessor pursuant to the
terms of any Assigned Document, wherever located; and

                                       4
<PAGE>
     (6)  all proceeds of the foregoing;

     BUT EXCLUDING from such property, rights and privileges all Excepted
Payments and SUBJECT TO the rights of the Owner Lessor and the Owner
Participant hereunder, including under Sections 4.3(d), 4.4 and 5.6 hereof;

     TO HAVE AND TO HOLD the Indenture Estate and all parts, rights, members
and appurtenances thereof, unto the Indenture Trustee and the successors and
permitted assigns of the Indenture Trustee, for the benefit and security of the
Noteholders from time to time;

     PROVIDED, HOWEVER, that if the principal of and the Make-Whole Amount, if
any, and interest on the Lessor Notes, and all other Secured Indebtedness
hereunder shall have been paid and the Owner Lessor shall have performed and
complied with all the covenants, agreements, terms and provisions hereof, then
this Indenture and the rights hereby granted shall terminate and cease.

     Subject to the terms and conditions hereof, the Owner Lessor does hereby
irrevocably constitute and appoint the Indenture Trustee the true and lawful
attorney of the Owner Lessor (which appointment is coupled with an interest)
with full power (in the name of the Owner Lessor or otherwise) to ask, require,
demand and receive any and all moneys an claims for moneys (in each case,
including, without limitation, insurance and requisition proceeds to the extent
of the Owner Lessor's interest therein but excluding in all cases Excepted
Payments) due and to become due under or arising out of the Assigned Documents
and all other property which now or hereafter constitutes part of the Indenture
Estate and, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or to take any action or to institute any
proceedings (other than in connection with the enforcement or collection of
Excepted Payments) which the Indenture Trustee may deem to be necessary or
advisable. Pursuant to the Facility Lease, the Facility Lessee is directed to
make all payments of Rent required to be paid or deposited with the Owner
Lessor (other than Excepted Payments) and all other amounts which are required
to be paid to or deposited with the Owner Lessor pursuant to the Facility Lease
(other than Excepted Payments) directly to the Indenture Trustee at such
address or addresses as the Indenture Trustee shall specify, for application as
provided in this Indenture. Further, the Owner Lessor agrees that promptly on
receipt thereof, it will transfer to the Indenture Trustee any and all moneys
from time to time received by it constituting part of the Indenture Estate,
whether or not expressly referred to in the immediately preceding sentence, for
distribution pursuant to this Indenture.

                                       5
<PAGE>
     Concurrently with the delivery of this Indenture, the Owner Lessor is
delivering to the Indenture Trustee the chattel paper originally-executed
counterpart of the Facility Lease. All property referred to in this Granting
Clause, whenever acquired by the Owner Lessor, shall secure all obligations
under and with respect to the Lessor Notes at any time outstanding. Any and
all properties referred to in this Granting Clause which are hereafter acquired
by the Owner Lessor, shall, without further conveyance, assignment or act by
the Owner Lessor or the Indenture Trustee thereby become and be subject to the
security interest hereby granted as fully and completely as though specifically
described herein.

     This Indenture is intended to constitute a security agreement as required
under the Uniform Commercial Codes of the States of New York, Delaware and
Wisconsin. This Indenture is also intended to be a mortgage under Wisconsin
law. The maximum principal indebtedness secured by this Indenture, including
future advances and contingent obligations but excluding protective advances,
shall not at any time exceed the total amount of One Hundred Eighty One Million
Eight Hundred Thousand Dollars ($181,800,000); provided, however, that nothing
herein contained shall limit the amount secured by this Indenture if the
Secured Indebtedness is increased by protective advances; and provided,
further, such limitation as to such future advances and contingent obligations
shall only pertain to the record priority of the amount thereof secured hereby
and does not otherwise limit the amount of total indebtedness of Owner Lessor
secured hereby or limit the liability of Owner Lessor to Indenture Trustee for
such total indebtedness, including future advances and contingent obligations.
The future advances secured hereby shall be made to or for the account of Owner
Lessor and may be made under the Additional Lessor Notes, or pursuant to
promissory notes or other instruments evidencing such future advances which may
be hereafter executed and delivered by Owner Lessor to Indenture Trustee.

     The Indenture Trustee, for itself and its successors and permitted
assigns, hereby agrees that it shall hold the Indenture Estate, in trust for
the benefit and security of (i) the holders from time to time of the Lessor
Notes from time to time outstanding, without any priority of any one Lessor
Note over any other except as herein otherwise expressly provided and (ii) the
Indenture Trustee, and for the uses and purposes and subject to the terms and
provisions set forth in this Indenture. It is expressly agreed that anything
herein contained to the contrary notwithstanding, the Owner Lessor shall remain
liable under the Assigned Documents to perform all of the obligations assumed
by it thereunder, all in accordance with and pursuant to the terms and
provisions thereof, and the Indenture Trustee and the Noteholders shall have no
obligation or liability under any Assigned Document by reason of or arising out
of the assignment hereunder, nor shall

                                       6
<PAGE>
the Indenture Trustee or the Noteholders be required or obligated in any
manner, except as herein expressly provided, to perform or fulfill any
obligation of the Owner Lessor under or pursuant to any such Assigned Document
or, except as herein expressly provided, to make any payment, or to make any
inquiry as to the nature or sufficiency of any payment received by it, or to
present or file any claim, or to take any action to collect or enforce the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.

     The Owner Lessor does hereby warrant and represent that it has not
assigned, pledged or granted a lien or security interest in, to or under, and
hereby covenants that, so long as this Indenture shall remain in effect and the
Lien hereof shall not have been released pursuant to Section 9.1 hereof, it
will not assign, pledge or grant a lien or security interest in any of its
estate, right, title or interest in, to or under, the Indenture Estate to
anyone other than the Indenture Trustee for the benefit of the Noteholders.
The Owner Lessor hereby further covenants that with respect to its estate,
right, title and interest in, to or under the Indenture Estate, it will not,
except as provided in this Indenture and except as to Excepted Payments, (i)
accept any payment from the Facility Lessee or any sublessee or enter into any
agreement amending, modifying or supplementing any of the Assigned Documents,
execute any waiver or modification of, or consent under, the terms of any of
the Assigned Documents or revoke or terminate any of the Assigned Documents,
(ii) settle or compromise any claim arising under any of the Assigned
Documents, or (iii) submit or consent to the submission of any dispute,
difference or other matter arising under or in respect of any of the Assigned
Documents to arbitration thereunder.

     Except as provided herein, the Owner Lessor hereby ratifies and confirms
its obligations under the Assigned Documents and does hereby agree that it will
not take or omit to take any action, the taking or omission of which might
result in an alteration or impairment of any of the Assigned Documents or of
any of the rights created by any such Assigned Document or the assignment
(subject to the previous) paragraph hereunder.

     Accordingly, the Owner Lessor, for itself and its successors and permitted
assigns, agrees that all Lessor Notes are to be issued and delivered and that
all property subject or to become subject hereto is to be held subject to the
further covenants, conditions, uses and trusts hereinafter set forth, and the
Owner Lessor, for itself and its successors and permitted assigns, hereby
covenants and agrees with the Indenture Trustee, for the benefit and security
of the holders from time to time of the Lessor Notes

                                       7
<PAGE>
from time to time outstanding and to protect the security of this Indenture,
and the Indenture Trustee agrees to accept the trusts and duties hereinafter
set forth, as follows:

                                SECTION 1.
                               DEFINITIONS

     (a)  Unless the context hereof shall otherwise require, capitalized
terms used, including those in the recitals, and not otherwise defined herein
shall have the respective meanings set forth in Appendix A to the Participation
Agreement (a copy of which is attached hereto for reference), dated as of the
date hereof, among the Facility Lessee, the Owner Lessor the Lessor Manager,
the Guarantor, the Indenture Trustee and the Pass Through Trustee (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions thereof, the "Participation Agreement"). The general provisions of
such Appendix A to the Participation Agreement shall apply to the terms used in
this Indenture and specifically defined herein.

     (b)  In addition, the following terms shall have the following meanings.

     "Assumption Documents" has the meaning set forth in Section 2.10(b).

     "Facility" means the 520 MW nameplate capacity gas-fired simple cycle
merchant power plant located in Christiana, Wisconsin and more fully described
in Exhibit D to this Indenture. The Facility does not include the Facility Site.

     "Secured Indebtedness" means principal of and the Make-Whole Amount, if
any, and interest on and other amounts due under all Lessor Notes and all other
sums payable to the Indenture Trustee or the Noteholders from time to time
hereunder and under the Participation Agreement and the other Operative
Documents by the Facility Lessee, the Owner Participant and the Owner Lessor,
including:

          (i) The indebtedness evidenced by the Lessor Notes, together with
     interest thereon at the rate provided in each Lessor Note and the
     Make-Whole Amount thereon and together with any and all renewals,
     modifications, consolidations and extensions of the indebtedness evidenced
     by such Lessor Notes, and principal of such Lessor Notes being due and
     payable as provided in such Lessor Notes;

          (ii) Any and all other indebtedness now owing or which may hereafter
     be owing by the Owner Lessor to or for the benefit of the Indenture

                                       8
<PAGE>
     Trustee under the Operative Documents including indemnities and other
     Supplemental Rent payable by the Facility Lessee under the Operative
     Documents, whether evidenced by Additional Lessor Notes issued pursuant to
     Section 2.12 hereof or otherwise, however and whenever incurred or
     evidenced, whether direct or indirect, absolute or contingent, due or to
     become due, together with interest thereon at the rate provided in each
     Additional Lessor Note and the Make-Whole Amount thereon (if any) and
     together with any and all renewals, modifications, consolidations and
     extensions of the indebtedness evidenced by such Additional Lessor Notes,
     and principal of such Additional Lessor Notes being due and payable as
     provided in each such Additional Lessor Note.

          (iii) Any and all additional advances made by the Indenture Trustee to
     protect or preserve the Indenture Estate or the security interest and other
     interests created hereby on the Indenture Estate or for taxes, assessments
     or insurance premiums as hereinafter provided or for performance of any of
     the Owner Lessor's obligations hereunder or for any other purpose provided
     herein, including advances made pursuant to Section 4.13 hereof (whether or
     not the Owner Lessor remains the owner of the Indenture Estate at the time
     of such advances); and

          (iv) Any and all expenses incident to the collection of the Secured
     Indebtedness and the foreclosure hereof by action in any court or by
     exercise of the power of sale herein contained.

     "Undivided Interest" means the Owner Lessor's 25% undivided interest in
the Facility.

                                 SECTION 2.
                              THE LESSOR NOTES

     Section 2.1.  Limitation on Lessor Notes. No Lessor Notes may be issued
under the provisions of, or become secured by, this Indenture except in
accordance with the provisions of this Section 2. The aggregate principal
amount of the Lessor Notes which may be authenticated and delivered and
outstanding at any one time under this Indenture shall be limited to the
principal amount of the Initial Lessor Notes issued on the Closing Date to the
Pass Through Trustees plus the aggregate principal amount of Additional Lessor
Notes issued pursuant to Section 2.12.

                                       9
<PAGE>
     Section 2.2.  Initial Lessor Notes. There are hereby created and
established hereunder one series of Lessor Notes consisting of the Series A
Lessor Notes, in substantially the form set forth in Exhibit B to this
Indenture and in the aggregate principal amount, having installments payable on
the dates and in the amounts and having the final maturity date and interest
rate set forth in Schedule I to this Indenture (the "Series A Lessor Notes" or,
collectively, the "Initial Lessor Notes" or, individually, an "Initial Lessor
Note").

     Section 2.3.  Execution and Authentication of Lessor Notes. Each Lessor
Note issued hereunder shall be executed and delivered on behalf of the Owner
Lessor by one of its authorized signatories, be in fully registered form, be
dated the date of original issuance of such Lessor Note and be in denominations
of not less than $1,000. Any Lessor Note may be signed by a Person who, at the
actual date of the execution of such Lessor Note, is an authorized signatory of
the Owner Lessor although at the nominal date of such Lessor Note such Person
may not have been an authorized signatory of the Owner Lessor. No Lessor Note
shall be secured by or be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears thereon a certificate
of authentication in the form contained in Exhibit C (or in the appropriate
form provided for in any supplement hereto executed pursuant to Section 2.12
hereof), executed by the Indenture Trustee by the manual signature of one of
its authorized officers, and such certificate upon any Lessor Note shall be
conclusive evidence that such Lessor Note has been duly authenticated and
delivered hereunder. The Indenture Trustee shall authenticate and deliver the
Initial Lessor Notes for original issue on the Closing Date in the principal
amount specified in Section 2.2, upon a written order of the Owner Lessor
signed by the Lessor Manager. The Indenture Trustee shall authenticate and
deliver Additional Lessor Notes, upon a written order of the Owner Lessor
executed by the Lessor Manager and satisfaction of the conditions specified in
Section 2.12. Such order shall specify the principal amount of the Additional
Lessor Notes to be authenticated and the date on which the original issue of
Additional Lessor Notes is to be authenticated.

     Section 2.4.  Issuance and Terms of the Initial Lessor Notes.

     (a)  Issuance of the Lessor Notes at the Closing. On the Closing Date,
the Initial Lessor Notes shall be issued to the applicable Pass Through Trustee
in the amounts set forth in Schedule I hereto, and shall be dated the Closing
Date.

                                       10
<PAGE>
     (b)  Principal and Interest. The principal amount of each series of
Initial Lessor Notes shall be due and payable in a series of installments
having final payment dates set forth in Schedule I hereto. The principal of
each Initial Lessor Note shall be due and payable in installments on the dates
and in the amounts set forth in Schedule I hereto. Schedule I hereto to the
contrary notwithstanding, the last payment made under such Initial Lessor Note
shall be equal to the then unpaid balance of the principal of such Lessor Note
plus all accrued and unpaid interest on, and any other amounts due under, such
Initial Lessor Note. Each Initial Lessor Note shall bear interest on the
principal from time to time outstanding from and including the date of issuance
thereof (computed on the basis of a 360-day year of twelve 30-day months) until
paid in full at the rate set forth in such Initial Lessor Note and Schedule I
hereto. Each Initial Lessor Note shall accrue additional interest under the
circumstances and at the rate per annum set forth in the third paragraph of
each Initial Lessor Note. Interest on each Initial Lessor Note shall be due
and payable in arrears semi-annually commencing on May 30, 2002, and on each
May 30 and November 30 thereafter until paid in full. If any day on which
principal, Make-Whole Amount, if any, or interest on the Initial Lessor Notes
are payable is not a Business Day, payment thereof shall be made on the next
succeeding Business Day with the same effect as if made on the date on which
such payment was due.

     (c)  Overdue Payments. Interest (computed on the basis of a 360-day
year of twelve 30-day months) on any overdue principal, Make-Whole Amount (if
any) and, to the extent permitted by Applicable Law, interest and any other
amounts payable shall be paid on demand at the Overdue Rate.

     (d)  Indemnity Amounts. The Owner Lessor agrees to pay to the Indenture
Trustee for distribution in accordance with Section 3.5 hereof any and all
indemnity amounts received by the Owner Lessor which are payable by the
Facility Lessee to (i) the Indenture Trustee, (ii) the Pass Through Trusts, or
(iii) the Pass Through Trustees.

     Section 2.5.  Payments from Indenture Estate Only; No Personal Liability
of the Owner Lessor, the Owner Participant or the Indenture Trustee. Except as
otherwise specifically provided in this Indenture or the Participation
Agreement, all payments in respect of the Lessor Notes or under this Indenture
shall be made only from the Indenture Estate, and the Owner Lessor shall have
no obligation for the payment thereof except to the extent that there shall be
sufficient income or proceeds from the Indenture Estate to make such payments
in accordance with the terms of Section 3 hereof; and the Owner Participant
shall not have any obligation for payments in respect of the Lessor

                                       11
<PAGE>
Notes or under this Indenture. The Indenture Trustee and each Noteholder, by
its acceptance thereof, agrees that it will look solely to the income and
proceeds from the Indenture Estate to the extent available for distribution to
the Indenture Trustee or such Noteholder, as the case may be, as herein
provided and that, except as expressly provided in this Indenture, the
Participation Agreement or any other Operative Document, none of the Owner
Participant, the Owner Lessor, the Trust Company, the Lease Indenture Company,
nor the Indenture Trustee, nor any Affiliate of any thereof, shall be
personally liable to such Noteholder or the Indenture Trustee for any amounts
payable hereunder, under such Lessor Note or for any performance to be rendered
under any Assigned Document or for any liability under any Assigned Document.
Without prejudice to the foregoing, the Owner Lessor will duly and punctually
pay or cause to be paid the principal of, Make-Whole Amount, if any, and
interest on all Lessor Notes according to their terms and the terms of this
Indenture. Nothing contained in this Section 2.5 limiting the liability of the
Owner Lessor shall derogate from the right of the Indenture Trustee and the
Noteholders to proceed against the Indenture Estate and the Calpine Guaranty to
secure and enforce all payments and obligations due hereunder and under the
Assigned Documents and the Lessor Notes.

     (a)  In furtherance of the foregoing, to the fullest extent permitted by
law, each Noteholder (and each assignee of such Person), by its acceptance
thereof, agrees that neither it nor the Indenture Trustee will exercise any
statutory right to negate the agreements set forth in this Section 2.5.

     (b)  Nothing herein contained shall be interpreted as affecting the
representations, warranties or agreements of the Owner Lessor set forth in the
Participation Agreement or the LLC Agreement.

     Section 2.6.  Method of Payment. The Owner Lessor shall maintain an
office or agency where Lessor Notes may be presented for payment (the "Paying
Agent"). The Owner Lessor may have one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent. The Owner Lessor
initially appoints the Indenture Trustee as Paying Agent in connection with the
Lessor Notes.

     (a)  The Owner Lessor shall deposit with the Paying Agent a sum
sufficient to pay such principal and interest when so becoming due. The Owner
Lessor shall require each Paying Agent (other than the Indenture Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Noteholders or the Indenture Trustee all money held by the Paying Agent for
the payment of principal of or interest

                                       12
<PAGE>
on the Lessor Notes and shall notify the Indenture Trustee of any default by
the Owner Lessor in making any such payment.

     (b)  The principal of and the Make-Whole Amount, if any, and interest on
each Lessor Note shall be paid by the Paying Agent from amounts available in
the Indenture Estate on the dates provided in the Lessor Notes by mailing a
check for such amount, payable in New York Clearing House funds, to each
Noteholder at the last address of each such Noteholder appearing on the Note
Register, or by whichever of the following methods shall be specified by notice
from a Noteholder to the Indenture Trustee: (i) by crediting the amount to be
distributed to such Noteholder to an account maintained by such Noteholder with
the Indenture Trustee, (ii) by making such payment to such Noteholder in
immediately available funds at the Indenture Trustee Office, or (iii) in the
case of the Initial Lessor Notes and in the case of Additional Lessor Notes, if
such Noteholder is the Pass Through Trustee, or a bank or other institutional
investor, by transferring such amount in immediately available funds for the
account of such Noteholder to the banking institution having bank wire transfer
facilities as shall be specified by such Noteholder, such transfer to be
subject to telephonic confirmation of payment. Any payment made under any of
the foregoing methods shall be made free and clear of and without reduction for
or on account of all wire and like charges and without any presentment or
surrender of such Lessor Note, unless otherwise specified by the terms of the
Lessor Note, except that, in the case of the final payment in respect of any
Lessor Note, such Lessor Note shall be surrendered to the Indenture Trustee for
cancellation after such payment. All payments in respect of the Lessor Notes
shall be made (1) as soon as practicable prior to the close of business on the
date the amounts to be distributed by the Indenture Trustee are actually
received by the Indenture Trustee if such amounts are received by 12:00 noon
New York City time, on a Business Day, or (2) on the next succeeding Business
Day if received after such time or on any day other than a Business Day. One
or more of the foregoing methods of payment may be specified in a Lessor Note.
Prior to due presentment for registration of transfer of any Lessor Note, the
Owner Lessor and the Indenture Trustee may deem and treat the Person in whose
name any Lessor Note is registered on the Note Register as the absolute owner
and holder of such Lessor Note for the purpose of receiving payment of all
amounts payable with respect to such Lessor Note and for all other purposes,
and neither the Owner Lessor nor the Indenture Trustee shall be affected by any
notice to the contrary. All payments made on any Lessor Note in accordance
with the provisions of this Section 2.6 shall be valid and effective to satisfy
and discharge the liability on such Lessor Note to the extent of the sums so
paid and (except as provided herein) neither the Indenture Trustee nor the
Owner Lessor shall have any liability in respect of such payment.

                                       13
<PAGE>
     Section 2.7.  Application of Payments. Each payment on any outstanding
Lessor Note shall be applied, first, to the payment of accrued interest
(including interest on overdue principal and the Make-Whole Amount, if any,
and, to the extent permitted by Applicable Law, overdue interest) on such
Lessor Note to the date of such payment, second, to the payment of the
principal amount of, and the Make-Whole Amount, if any, on such Lessor Note
then due (including any overdue installments of principal) thereunder and
third, to the extent permitted by Section 2.10 of this Indenture, the balance,
if any, remaining thereafter, to the payment of the principal amount of, and
the Make-Whole Amount, if any, on such Lessor Note. The order of application of
payments prescribed by this Section 2.7 shall not be deemed to supersede any
provision of Section 3 hereof regarding application of funds.

     Section 2.8.  Registration, Transfer and Exchange of Lessor Notes. The
Owner Lessor shall maintain an office or agency where Lessor Notes may be
presented for registration of transfer or for exchange (the "Registrar"). The
Registrar shall keep a register of the Lessor Notes and of their transfer and
exchange. The Owner Lessor may have one or more co-registrars. The Owner
Lessor initially appoints the Indenture Trustee as Registrar in connection with
the Lessor Notes. The Indenture Trustee shall maintain at the Indenture
Trustee Office a register in which it will provide for the registration,
registration of transfer and exchange of Lessor Notes (such register being
referred to herein as the "Note Register"). If any Lessor Note is surrendered
at said office for registration of transfer or exchange (accompanied by a
written instrument of transfer duly executed by or on behalf of the holder
thereof, together with the amount of any applicable transfer taxes), the Owner
Lessor will execute and the Indenture Trustee will authenticate and deliver, in
the name of the designated transferee or transferees, if any, one or more new
Lessor Notes (subject to the limitations specified in Sections 2.3 and 2.13
hereof) in any denomination or denominations not prohibited by this Indenture,
as requested by the Person surrendering the Lessor Note, dated the same date as
the Lessor Note so surrendered and of like tenor and aggregate unpaid principal
amount. Any Lessor Note or Lessor Notes issued in a registration of transfer
or exchange shall be valid obligations of the Owner Lessor entitled to the same
security and benefits to which the Lessor Note or Lessor Notes so transferred
or exchanged were entitled, including rights as to interest accrued but unpaid
and to accrue so that there will not be any loss or gain of interest on the
Lessor Note or Lessor Notes surrendered. Every Lessor Note presented or
surrendered for registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer in form reasonably
satisfactory to the Indenture Trustee duly executed by the holder thereof or
his attorney duly authorized in writing, and the Indenture Trustee may require
an

                                       14
<PAGE>
opinion of counsel as to compliance of any such transfer with the Securities
Act. The Indenture Trustee shall make a notation on each new Lessor Note of
the amount of all payments of principal previously made on the old Lessor Note
or Lessor Notes with respect to which such new Lessor Note is issued and the
date on which such new Lessor Note is issued and the date to which interest on
such old Lessor Note or Lessor Notes shall have been paid. The Indenture
Trustee shall not be required to register the transfer or exchange of any
Lessor Note during the 10 days preceding the due date of any payment on such
Lessor Note.

     Each Noteholder, by its acceptance of a Lessor Note, shall be deemed to
have consented to, and agreed to be bound by, the terms and conditions hereof,
of such Lessor Note (and any instrument of assignment or transfer) and of the
other Operative Documents.

     Section 2.9.  Mutilated, Destroyed, Lost or Stolen Lessor Notes. Upon
receipt by the Owner Lessor and the Indenture Trustee of evidence satisfactory
to each of them of the loss, theft, destruction or mutilation of any Lessor
Note and, in case of loss, theft or destruction, of indemnity satisfactory to
each of them, and upon reimbursement to the Owner Lessor and the Indenture
Trustee of all reasonable expenses incidental thereto and payment or
reimbursement for any transfer taxes, and upon surrender and cancellation of
such Lessor Note, if mutilated, the Owner Lessor will execute and the Indenture
Trustee will authenticate and deliver in lieu of such Lessor Note, a new Lessor
Note, dated the same date as such Lessor Note and of like tenor and principal
amount. Any indemnity provided by the holder of a Lessor Note pursuant to this
Section 2.9 must be sufficient in the reasonable judgment of the Owner Lessor
and the Indenture Trustee to protect the Owner Lessor, the Indenture Trustee,
the Paying Agent, the Registrar and any co-registrar or co-paying agent from
any loss which any of them may suffer if a Lessor Note is replaced.

     Section 2.10.  Redemptions; Assumption.

     (a)  Except as provided in paragraphs (c) and (d) of this Section 2.10
or as provided in any indenture supplemental hereto, all Lessor Notes
outstanding under this Indenture shall be redeemed, in whole but not in part,
at a price equal to the principal amount thereof, together with accrued
interest thereon, if any, on the earliest to occur on the date of redemption,
but without any Make-Whole Amount or other premium:

          (i) if the Facility Lease is terminated pursuant to Section 10 thereof
     as a result of the occurrence of an Event of Loss (other than a Regulatory
     Event

                                       15
<PAGE>
     of Loss or an Event of Loss described in clause (v) or (vi) of the
     definition of "Event of Loss"), on the applicable Termination Date
     provided in Section 10.2(a) of the Facility Lease;

          (ii) if the Facility Lease is terminated pursuant to Section 10
     thereof as a result of a Regulatory Event of Loss, unless the Facility
     Lessee effects an assumption of the applicable Lessor Notes in accordance
     with paragraph (b) of this Section 2.10, on the applicable Termination Date
     provided in Section 10.2(a) of the Facility Lease;

          (iii) if the Facility Lease is terminated pursuant to Section 13.1
     thereof, unless the Facility Lessee purchases the Facility and effectuates
     an assumption of the applicable Lessor Notes in accordance with paragraph
     (b) of this Section 2.10, on the applicable Termination Date provided in
     Section 13.1 of the Facility Lease; and

          (iv) if the Facility Lease is terminated pursuant to clause (a) of
     Section 14.1 thereof, on the Obsolescence Termination Date.

Any such redemption shall be made in accordance with the applicable provisions
of Section 3 hereof.

     (b)  Unless a Significant Lease Default or a Lease Event of Default
shall have occurred and be continuing after giving effect to such assumption,
the obligations and liabilities of the Owner Lessor hereunder and under all of
the Lessor Notes may be assumed in whole (but not in part) by the Facility
Lessee in the event of the occurrence of (i) a Regulatory Event of Loss, or
(ii) a termination by the Facility Lessee pursuant to Section 13.1 or 13.2 of
the Facility Lease, where in connection with such termination the Facility
Lessee acquires the Undivided Interest pursuant to an assumption agreement
(which assumption agreement may be combined with the indenture supplemental to
this Indenture hereinafter referred to in this Section 2.10(b), and shall
provide for the assumption by the Facility Lessee of the obligations and
liabilities of the Owner Lessor and the Owner Participant under the Operative
Documents pertaining to the Undivided Interest) which shall make such
obligations and liabilities fully recourse to the Facility Lessee and shall
otherwise be in form and substance acceptable to the Indenture Trustee and the
Owner Lessor. The Facility Lessee will execute and deliver, and the Indenture
Trustee will authenticate, to each Noteholder in exchange for such old Lessor
Note a new Lessor Note, in a principal amount equal to the outstanding
principal amount of such old Lessor Note and otherwise in substantially similar
form and tenor to such old

                                       16
<PAGE>
Lessor Note but indicating that the Facility Lessee is the issuer thereof.
When such assumption agreement becomes effective, the Owner Lessor shall be
released and discharged without further act from all obligations and
liabilities assumed by the Facility Lessee. All documentation in connection
with any such assumption (including an indenture supplemental to this Indenture
which shall, among other things, contain provisions appropriately amending
references to the Facility Lease in this Indenture and contain covenants by the
Facility Lessee similar to those contained in the Facility Lease (other than
any covenants which were solely for the benefit of the Owner Participant),
changed as appropriate, and amendments or supplements to the other Operative
Documents, officers' certificates, opinions of counsel and regulatory
approvals) shall be prepared by and at the expense of the Facility Lessee
acceptable in form and substance to the Indenture Trustee.

     As a condition to the effectiveness of the assumption by the Facility
Lessee and the release of the Owner Lessor and the Indenture Estate thereby
effected:

          (i)  the Indenture Trustee shall have received an Opinion of Counsel
     of the Facility Lessee including, in the case of clause (5) below, a
     nationally recognized outside counsel selected by the Facility Lessee and
     reasonably acceptable to the Noteholders (it being acknowledged and agreed
     that the Facility Lessee's counsel on the Closing Date shall be deemed
     acceptable), addressed to the Indenture Trustee and the Noteholders, to
     the effect that (1) the assumption agreement and each other instrument,
     document or agreement executed and delivered by the Facility Lessee in
     connection with the assumption contemplated by the assumption agreement
     (collectively, the "Assumption Documents") have been duly authorized,
     executed and delivered by the Facility Lessee, (2) each Assumption
     Document and the assumptions contemplated thereby do not contravene (x)
     the Organic Documents of the Facility Lessee, (y) any provision of any
     security issued by the Facility Lessee or of any agreement, instrument or
     other undertaking to which the Facility Lessee is a party or by which it
     or any of its property is bound or (z) any Applicable Law, (3) no
     Governmental Approval is necessary or required in connection with any
     Assumption Document or the assumption contemplated thereby (or, if any
     such Governmental Approval is necessary or required, that the same has
     been duly obtained and is final and in full force and effect and any
     period for the filing of notice of rehearing or application for judicial
     review of the issuance of such Governmental Approval has expired without
     any such notice or application having been made), (4) each Assumption
     Document is a legal, valid and binding obligation of the Facility Lessee,
     enforceable in accordance with its terms, (5)

                                       17
<PAGE>
     such assumption agreement and the assumption of the Lessor Notes
     thereunder shall not cause a Tax Event to occur as to any holder of any
     Lessor Note or any Certificateholder and (6) the lien of this Indenture
     will continue to be a first priority perfected lien on the Indenture
     Estate;

          (ii) the Facility Lessee shall have provided the Indenture Trustee
     with (x) an indemnity against the risk that such assumption of the Lessor
     Notes will cause a Tax Event to occur as to any holder of any Lessor Note
     or any Certificateholder or (y) an opinion of counsel to the Facility
     Lessee, which opinion of counsel shall be reasonably acceptable to the
     Indenture Trustee, confirming that such assumption shall not cause any
     adverse tax consequence to any holder of any Lessor Note or any
     Certificateholder ;

          (iii) Moody's and S&P shall have confirmed that such assumption will
     not result in a downgrading of the rating on the Certificates;

          (iv) the Indenture Trustee shall have received copies of all
     Governmental Approvals (if any) referred to in the opinion of counsel
     referred to in clause (i) above; and

          (v) the Indenture Trustee shall have received UCC lien searches,
     supplemental title reports and such other evidence as may reasonably be
     required by the Indenture Trustee demonstrating that no impairment exists
     or will exist of the first-priority perfected lien and secured interest in
     the Undivided Interest.

     (c)  The Owner Lessor may, at its option, redeem any Additional Lessor
Notes in whole, or in part, on any date to the extent permitted by, and at the
prices set forth in, the supplemental indenture establishing the terms,
conditions and designations of such Additional Lessor Notes, together with the
accrued interest on such principal amount plus the Make Whole Amount, if any,
so redeemed to the date of redemption.

     (d)  The Lessor Notes shall be redeemed, in whole but not in part, as
provided below, at the redemption price equal to the principal amount thereof,
together with accrued and unpaid interest thereon, if any, to the date of
redemption plus the Make-Whole Amount, as follows:

          (i)  All of the Lessor Notes outstanding under this Indenture shall
     be redeemed at such redemption price upon an optional refinancing pursuant
     to Section 11.2 of the Participation Agreement. The Owner Lessor's failure
     to

                                       18
<PAGE>
     consummate such redemption as a result of an event described in this
     clause (i) following delivery of such notice shall not constitute a Lease
     Indenture Event of Default or any other default under the Operative
     Documents.

          (ii)  All of the Lessor Notes outstanding under this Indenture shall
     be redeemed at such redemption price on the Termination Date or
     Obsolescence Termination Date, as applicable, if the Facility Lease is
     terminated as a result of an event described in Section 13.2 or clause (b)
     of Section 14.1 of the Facility Lease. The Owner Lessor's failure to
     consummate such redemption as a result of an event described in this
     clause (ii) following delivery of such notice shall not constitute a Lease
     Indenture Event of Default or any other default under the Operative
     Documents.

          (iii)  The Lessor Notes shall be redeemed at such redemption price
     upon termination of the Facility Lease pursuant to Section 10 thereof as a
     result of the occurrence of an Event of Loss described in clause (v) or
     (vi) of the definition of "Event of Loss".

The Make-Whole Amount, if any, payable with respect to the Lessor Notes will be
determined by an investment banking institution of national standing in the
United States (the "Investment Banker") selected by the Facility Lessee or, if
the Owner Lessor or the Indenture Trustee does not receive notice of such
selection at least ten days prior to a scheduled prepayment date or if a Lease
Event of Default under the Facility Lease shall have occurred and be
continuing, selected by the Owner Lessor.

     (e)  If the Owner Lessor elects to redeem Lessor Notes, or Lessor Notes
are otherwise required to be redeemed pursuant to this Section 2.10, the Owner
Lessor shall notify the Indenture Trustee in writing of the date of redemption,
the Section of this Indenture pursuant to which the redemption will occur. The
Owner Lessor shall give each notice to the Indenture Trustee provided for in
this Section 2.10 at least 30 days before the date of redemption unless the
Indenture Trustee consents in writing to a shorter period. Such notice shall
be accompanied by an Officers' Certificate and an opinion of counsel from the
Facility Lessee to the effect that such redemption will comply with the
conditions herein.

     (f)  At least 20 days but not more than 60 days before a date of
redemption, the Indenture Trustee shall deliver notification of such redemption
by first-class mail to each Noteholder to be redeemed at such Noteholder's
registered address; provided, that

                                       19
<PAGE>
no notice shall be required so long as the Pass Through Trustee and the
Indenture Trustee are the same entity. Each such notice shall state:

          (i) the date of redemption;

          (ii) the redemption price;

          (iii) the name and address of the Paying Agent;

          (iv) that Lessor Notes called for redemption must be surrendered to
     the Paying Agent to collect the redemption price;

          (v) that, unless the Owner Lessor defaults in making such redemption
     payment, interest on Lessor Notes called for redemption ceases to accrue on
     and after the redemption date; and

          (vi) the paragraph of this Indenture pursuant to which the Lessor
     Notes called for redemption are being redeemed.

     (h)  With respect to any notice of redemption of the Lessor Notes such
notice shall state that such redemption shall be conditional upon the receipt
by the Indenture Trustee, on or prior to the date fixed for such redemption, of
money sufficient to pay the principal of and Make-Whole Amount, if any, and
interest on such Notes and that, if such money shall not have been so received,
such notice shall be of no force or effect and the Owner Lessor shall not be
required to redeem such Lessor Notes. In the event that such notice of
redemption contains such a condition and such money is not so received, the
redemption shall not be made and, within a reasonable time thereafter, notice
shall be given, in the manner in which the notice of redemption was given, that
such money was not so received and such redemption was not required to be made.

     (i)  Upon surrender to the Paying Agent, such Lessor Notes shall be paid
at the redemption price stated in the notice, plus accrued interest to the date
of redemption. Failure to give notice or any defect in the notice to any
Noteholder shall not affect the validity of the notice to any other Noteholder.

     Section 2.11.  Payment of Expenses on Transfer. Upon the issuance of a
new Lessor Note or Lessor Notes pursuant to Section 2.8 or 2.9 hereof, the
Owner Lessor or the Indenture Trustee may require from the party requesting
such new Lessor Note or Lessor Notes payment of a sum to reimburse the Owner
Lessor and the Indenture

                                       20
<PAGE>
Trustee for, or to provide funds for, the payment on an After-Tax Basis to the
Owner Lessor, the Indenture Trustee and the Owner Participant of any tax or
other governmental charge in connection therewith or any charges and expenses
connected with such tax or governmental charge paid or payable by the Owner
Lessor or the Indenture Trustee.

     Section 2.12.  Additional Lessor Notes.

     (a)  Additional Lessor Notes (each, an "Additional Lessor Note") of the
Owner Lessor may be issued under and secured by this Indenture, at any time or
from time to time, in addition to the Initial Lessor Notes and subject to the
conditions hereinafter provided in this Section 2.12, for cash in the amount
equal to the original principal amount of such Additional Lessor Notes, for the
purpose of (i) providing funds in connection with Supplemental Financing
pursuant to Section 11.1 of the Participation Agreement for the payment of all
or any portion of Modifications to the Facility pursuant to Section 8 of the
Facility Lease, or (ii) redeeming any previously issued Lessor Notes pursuant
to an optional refinancing pursuant to Section 11.2 of the Participation
Agreement and providing funds for the payment of all reasonable costs and
expenses in connection therewith.

     (b)  Before any Additional Lessor Notes shall be issued under the
provisions of this Section 2.12, the Owner Lessor shall have delivered to the
Indenture Trustee, not less than fifteen (15) (unless a shorter period shall be
satisfactory to the Indenture Trustee) days nor more than thirty (30) days
prior to the proposed date of issuance of any Additional Lessor Notes, a
request and authorization to issue such Additional Lessor Notes, which request
and authorization shall include the amount of such Additional Lessor Notes, the
proposed date of issuance thereof and (except in connection with a refinancing
of all of the Lessor Notes pursuant to Section 11.2 of the Participation
Agreement) a certification that terms thereof are not inconsistent with this
Indenture. Additional Lessor Notes shall have a designation so as to
distinguish such Additional Lessor Notes from the Initial Lessor Notes
theretofore issued, but otherwise shall rank pari passu with any Lessor Notes
then outstanding, be entitled to the same benefits and security of this
Indenture as the other Lessor Notes issued pursuant to the terms hereof, be
dated the date of original issuance of such Additional Lessor Notes, bear
interest at such rates as shall be agreed between the Facility Lessee and the
Owner Lessor and indicated in the aforementioned request and authorization, and
shall be stated to be payable by their terms not later than the final maturity
date of the Initial Lessor Notes issued on the closing date. The Additional
Lessor Notes shall not be subject to (i) purchase except as provided in Section
4.4(e) hereof or (ii) redemption or assumption except as provided in Section
2.10 hereof.

                                       21
<PAGE>
     (c)  The terms, conditions and designations of such Additional Lessor
Notes (which shall be consistent with this Indenture), except in the case of a
refinancing of all of the Lessor Notes pursuant to Section 11.2 of the
Participation Agreement) shall be set forth in an indenture supplemental to
this Indenture executed by the Owner Lessor and the Indenture Trustee. Such
Additional Lessor Notes shall be executed as provided in Section 2.3 hereof and
deposited with the Indenture Trustee for authentication, but before such
Additional Lessor Notes shall be authenticated and delivered by the Indenture
Trustee there shall be filed with the Indenture Trustee the following, all of
which shall be dated as of the date of the supplemental indenture:

          (i) a copy of such supplemental indenture (which shall include the
     form of such Additional Lessor Notes and the certificate of authentication
     in respect thereof);

          (ii) an Officer's Certificate from the Facility Lessee (1) stating
     that no Significant Lease Default or Lease Event of Default has occurred
     and is continuing under the Facility Lease, (2) stating that the conditions
     in respect of the issuance of such Additional Lessor Notes contained in
     this Section 2.12 have been satisfied, (3) specifying the amount of the
     costs and expenses relating to the issuance and sale of such Additional
     Lessor Notes, (4) stating that payments pursuant to the Facility Lease and
     all supplements thereto of Periodic Rent and Termination Value, together
     with all other amounts payable pursuant to the terms of the Facility Lease,
     are calculated to be sufficient to pay when due all of the principal of and
     interest on the outstanding Lessor Notes, after taking into account the
     issuance of such Additional Lessor Notes and any related redemption of
     Lessor Notes theretofore outstanding and (5) all conditions to the
     Supplemental Financing or refinancing contained in Section 11.1 or ll.2 of
     the Participation Agreement or in any other provision of the Operative
     Documents have been satisfied;

          (iii) with respect to any Supplemental Financing, an Officer's
     Certificate from the Owner Lessor and an Officer's Certificate from the
     Lessor Manager stating that no Indenture Default under clauses (b) through
     (f) of Section 4.2 hereof or Lease Indenture Event of Default as to the
     Owner Lessor or the Lessor Manager, as the case may be, has occurred and is
     continuing;

                                       22
<PAGE>
          (iv) such additional documents, certificates and opinions as shall be
     reasonably required by the Indenture Trustee, and as shall be reasonably
     acceptable to the Indenture Trustee;

          (v) a request and authorization to the Indenture Trustee by the Owner
     Lessor to authenticate and deliver such Additional Lessor Notes to or upon
     the order of the Person or Persons noted in such request at the address set
     forth therein, and in such principal amounts as are stated therein, upon
     payment to the Indenture Trustee, but for the account of the Owner Lessor,
     of the sum or sums specified in such request and authorization;

          (vi) the consent of the Facility Lessee to such request and
     authorization; and

          (vii) an opinion of counsel to the Owner Lessor who shall be
     reasonably satisfactory to the Indenture Trustee, as to the authorization,
     validity and enforceability of the Additional Lessor Notes and that all
     conditions hereunder to the authentication and delivery of such Additional
     Lessor Notes have been complied with.

     (d)  When the documents referred to in the foregoing clauses (i) through
(vii) above shall have been filed with the Indenture Trustee and when the
Additional Lessor Notes described in the above mentioned request and
authorization shall have been executed and authenticated as required by this
Indenture and the related supplemental indenture, the Indenture Trustee shall
deliver such Additional Lessor Notes in the manner described in clause (v)
above, but only upon payment to the Indenture Trustee of the sum or sums
specified in such request and authorization.

     Section 2.13.  Restrictions of Transfer Resulting from Federal Securities
Laws; Legend. Each Lessor Note shall be delivered to the initial Noteholder
thereof without registration of such Lessor Note under the Securities Act and
without qualification of this Indenture under the Trust Indenture Act of 1939,
as amended. Prior to any transfer of any such Lessor Note, in whole or in
part, to any Person, the Noteholder thereof shall furnish to the Facility
Lessee, the Indenture Trustee and the Owner Lessor an opinion of counsel, which
opinion and which counsel shall be reasonably satisfactory to the Indenture
Trustee, the Owner Lessor and the Facility Lessee, to the effect that such
transfer will not violate the registration provisions of the Securities Act or
require qualification of this Indenture under the Trust Indenture Act of 1939,
as amended, and all Lessor Notes issued hereunder shall be endorsed with a
legend which shall read substantially as follows:

                                       23
<PAGE>
     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
     NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT.

     Section 2.14.  Security for and Parity of Lessor Notes. All Lessor Notes
issued and outstanding hereunder shall rank on a parity with each other and
shall as to each other be secured equally and ratably by this Indenture,
without preference, priority or distinction of any thereof over any other by
reason of difference in time of issuance or otherwise.

     Section 2.15.  Acceptance of the Indenture Trustee. Each Noteholder, by
its acceptance of a Lessor Note, shall be deemed to have consented to the
appointment of the Indenture Trustee.

                                SECTION 3.
                RECEIPT, DISTRIBUTION AND APPLICATION
                   OF INCOME FROM INDENTURE ESTATE

     Section 3.1.  Distribution of Periodic Rent.

     (a)  Periodic Rent Distribution. Except as otherwise provided in Section
3.1(c), 3.2, 3.3 or 3.7 of this Indenture, each installment of Periodic Rent
and any payment of Supplemental Rent constituting interest on overdue
installments of Periodic Rent received by the Indenture Trustee shall be
distributed by the Indenture Trustee in the following order of priority:

     First, so much of such amounts as shall be required to pay in full the
     aggregate principal and accrued interest (as well as any interest on
     overdue principal and, to the extent permitted by Applicable Law, on
     overdue interest) then due and payable under the Lessor Notes shall be
     distributed to the Noteholders ratably, without priority of any Noteholder
     over any other Noteholder, in the proportion that the amount of such
     payment then due and payable under each such Lessor Note bears to the
     aggregate amount of the payments then due and payable under all such
     Lessor Notes; and

                                       24
<PAGE>
     Second, the balance, if any, of such amounts remaining shall be
     distributed to the Owner Lessor for distribution by it in accordance with
     the terms of the LLC Agreement.

     (b)  Application of Other Amounts Held by the Indenture Trustee upon Rent
Default. If, as a result of any failure by the Facility Lessee to pay Periodic
Rent in full on any date when an installment of Periodic Rent is due, there
shall not have been distributed on any date (or within any applicable period of
grace) pursuant to Section 3.1(a) hereof the full amount then distributable
pursuant to clause "First" of Section 3.1(a) of this Indenture, the Indenture
Trustee shall distribute other payments of the character referred to in
Sections 3.5 and 3.6 hereof then held by it, or thereafter received by it, to
all Noteholders to the extent necessary to enable it to make all the
distributions then due pursuant to such clause "First."  To the extent the
Indenture Trustee thereafter receives the deficiency in Periodic Rent, the
amount so received shall, unless a Significant Lease Default or Lease Indenture
Event of Default shall have occurred and be continuing, be applied to restore
the amounts held by the Indenture Trustee under Section 3.5 or 3.6 hereof and
distributed pursuant to this Section 3.1(b), as the case may be. The portion
of each such payment made to the Indenture Trustee which is to be distributed
by the Indenture Trustee in payment of Lessor Notes shall be applied in
accordance with Section 2.7 hereof. Any payment received by the Indenture
Trustee pursuant to Section 4.3 hereof as a result of payment by the Owner
Lessor of principal or interest or both (as well as any interest on overdue
principal and, to the extent permitted by Applicable Law, on overdue interest)
then due on all Lessor Notes shall be distributed to the Noteholders, ratably,
without priority of one over the other, in the proportion that the amount of
such payment or payments then due and unpaid on all Lessor Notes held by each
such Noteholder bears to the aggregate amount of the payments then due and
unpaid on all Lessor Notes outstanding; and the Owner Lessor shall (to the
extent of such payment made by it) be subrogated to the rights of the
Noteholders under this Section 3.1 to receive the payment of Periodic Rent or
Supplemental Rent with respect to which its payment under Sections 4.3(a) and
(b) hereof relates, and the payment of interest on account of such Periodic
Rent or Supplemental Rent being overdue, to the extent provided in and subject
to the provisions of Section 4.3(a) and (b) hereof.

     (c)  Retention of Amounts by the Indenture Trustee. If at the time of
receipt by the Indenture Trustee of an installment of Periodic Rent (whether or
not then overdue) or of payment of interest on any overdue installment of
Periodic Rent, there shall have occurred and be continuing a Lease Indenture
Event of Default, the Indenture Trustee shall retain such installment of
Periodic Rent or payment of interest (to the

                                       25
<PAGE>
extent not then required to be distributed pursuant to clause "First" of
Section 3.1(a)) as part of the Indenture Estate and shall not distribute any
such payment of Periodic Rent or interest pursuant to clause "Second" of
Section 3.1(a) until such time as such Lease Indenture Event of Default shall
be cured or waived or until such time as the Indenture Trustee shall have
received written instructions from a Majority in Interest of Noteholders to
make such a distribution; provided that such amounts must be returned to the
Owner Lessor within six (6) months from the receipt thereof by the Indenture
Trustee unless (i) the Indenture Trustee has declared the unpaid principal of
all Lessor Notes due and payable (or such amounts shall have automatically
become due and payable), pursuant to Section 4.2(a) and the Indenture Trustee
is diligently pursuing any dispossessary remedies available under Section 4.3
hereof (unless such remedies are stayed or prevented by operation of law) or
(ii) any other Lease Indenture Event of Default shall have occurred during the
intervening period and be continuing, in which case, such six-month period will
be restarted from the date such other Lease Indenture Event of Default shall
have occurred. Upon the cure or waiver of such Lease Indenture Event of
Default, withheld Periodic Rent shall, subject to clause (ii) of the
immediately preceding sentence, be distributed to the Owner Lessor (to the
extent that all payments to be distributed pursuant to clause "First" of
Section 3.1(a) have been made), and no further withholding of Periodic Rent on
account of such Lease Indenture Event of Default shall be effected.

     Section 3.2.  Payments Following Event of Loss or Other Early Termination.
Any payment received by the Indenture Trustee as a result of (x) an Event of
Loss (other than a Regulatory Event of Loss in respect of which the Facility
Lessee shall, pursuant to Section 2.10(b) hereof, assume the obligations and
liabilities of the Owner Lessor hereunder, in which event only clauses "First"
and "Fourth" below shall be applicable), (y) early termination of the Facility
Lease pursuant to Section 13 thereof (other than a termination in respect of
which the Facility Lessee shall, pursuant to Section 2.10(b) hereof assume the
obligations and liabilities of the Owner Lessor hereunder, in which event only
clauses "First" and "Fourth" below shall be applicable), or (z) any early
termination of the Facility Lease, in whole or in part, pursuant to Section 14
thereof, shall be distributed on the applicable date of redemption to the
extent of available funds, in the following order of priority:

     First, so much of such payments and amounts as shall be required to
     reimburse the Indenture Trustee for any unpaid fees for its services under
     this Indenture and any expense (including any legal fees and
     disbursements) or loss incurred by it (to the extent incurred in
     connection with its duties as the Indenture Trustee

                                       26
<PAGE>
     and to the extent reimbursable and not previously reimbursed) shall be
     distributed to the Indenture Trustee for application to itself;

     Second, so much of such payments or amounts as shall be required to pay in
     full the applicable redemption price (as described in Section 2.10(a) or
     2.10(d) hereof or any supplemental indenture hereto) (including, interest
     on overdue principal and, to the extent permitted by Applicable Law,
     overdue interest) upon all of the Lessor Notes which shall be distributed
     to the holders of such Lessor Notes, in each case ratably, without
     priority of any Noteholder over any other, in the proportion that the
     aggregate unpaid principal amount of all such Lessor Notes held by each
     such holder, plus the Make-Whole Amount, if any, and accrued but unpaid
     interest thereon to the scheduled date of distribution to the Noteholders
     bears to the aggregate unpaid principal amount of all such Lessor Notes
     held by all such holders, together with the Make-Whole Amount, if any,
     plus accrued but unpaid interest thereon to the date of scheduled
     distribution to the Noteholders;

     Third, so much of such payments and amounts as shall be required to pay
     the then existing or prior Noteholders all other amounts then payable and
     unpaid to them as holders of the Lessor Notes which this Indenture by its
     terms secures shall be distributed to such existing or prior holders of
     Lessor Notes, ratably to each such holder, without priority of any such
     holder over any other, in the proportion that the amount of such payments
     or amounts to which each such holder is so entitled bears to the aggregate
     amount of such payments and amounts to which all such holders are so
     entitled; and

     Fourth, the balance, if any, of such payment remaining shall be
     distributed to the Owner Lessor for distribution in accordance with the
     LLC Agreement.

     Section 3.3.  Payments After Lease Indenture Event of Default. All
payments received and all amounts held or realized by the Indenture Trustee
after a Lease Indenture Event of Default shall have occurred and be continuing
(including any amounts realized by the Indenture Trustee from the exercise of
any remedies pursuant to Section 17 of the Facility Lease or from the
application of Section 4.3 hereof) and after either (a) the Indenture Trustee
has declared the Facility Lease to be in default pursuant to Section 17 thereof
or (b) the entire principal amount of Lessor Notes shall have been declared or
shall automatically have become due and payable, together with all payments or
amounts then held or thereafter received by the Indenture Trustee

                                       27
<PAGE>
hereunder, shall, so long as such declaration shall not have been rescinded, be
distributed forthwith by the Indenture Trustee in the following order of
priority:

     First, so much of such payments and amounts as shall be required to
     reimburse the Indenture Trustee for any unpaid fees for its services under
     this Indenture and any expense (including any legal fees and
     disbursements) or loss incurred by it (to the extent incurred in
     connection with its duties as the Indenture Trustee and to the extent
     reimbursable and not previously reimbursed) shall be distributed to the
     Indenture Trustee for application to itself;

     Second, so much of such payments or amounts as shall be required to pay
     the aggregate unpaid principal amount of all Lessor Notes then outstanding
     and all accrued but unpaid interest on such Lessor Notes to the date of
     such distribution (including interest on overdue principal and, to the
     extent permitted by Applicable Law, overdue interest) shall be distributed
     to the holders of such Lessor Notes, in each case ratably, without
     priority of any Noteholder over any other, in the proportion that the
     aggregate unpaid principal amount of all such Lessor Notes held by each
     such holder and accrued but unpaid interest thereon to the scheduled date
     of distribution to the Noteholders bears to the aggregate unpaid principal
     amount of all such Lessor Notes held by all such holders and accrued but
     unpaid interest thereon to the date of scheduled distribution to the
     Noteholders;

     Third, so much of such payments and amounts as shall be required to pay
     the then existing or prior Noteholders all other amounts then payable and
     unpaid to them as holders of the Lessor Notes which this Indenture by its
     terms secures, including the Make-Whole Amount, if any, required to be
     paid pursuant to Section 2.10(d) hereof, in respect of such Lessor Notes
     required to be paid pursuant to Section 4.3(a) hereof, shall be
     distributed to such existing or prior holders of Lessor Notes, ratably to
     each such holder, without priority of any such holder over any other, in
     the proportion that the amount of such payments or amounts to which each
     such holder is so entitled bears to the aggregate amount of such payments
     and amounts to which all such holders are so entitled; and

     Fourth, the balance, if any, of such payments and amounts remaining shall
     be distributed to the Owner Lessor for distribution by it in accordance
     with the terms of the LLC Agreement.

                                       28
<PAGE>
     Section 3.4.  Investment of Certain Payments Held by the Indenture
Trustee. Upon the written direction and at the risk and expense of the Owner
Lessor, the Indenture Trustee shall invest and reinvest any moneys held by the
Indenture Trustee pursuant to Section 3.1(c), 3.5 or 3.6 hereof in such
Permitted Investments as may be specified in such direction. The proceeds
received upon the sale or at maturity of any Permitted Investment and any
interest received on such Permitted Investment and any payment in respect of a
deficiency contemplated by the following sentence shall be held as part of the
Indenture Estate and applied by the Indenture Trustee in the same manner as the
moneys used to buy such Permitted Investment, and any Permitted Investment may
be sold (without regard to maturity date) by the Indenture Trustee whenever
necessary to make any payment or distribution required by this Section 3. If
the proceeds received upon the sale or at maturity of any Permitted Investment
(including interest received on such Permitted Investment) shall be less than
the cost thereof (including accrued interest), the Owner Lessor will pay or
cause to be paid to the Indenture Trustee an amount equal to such deficiency.

     Section 3.5.  Application of Certain Other Payments. Except as otherwise
provided in Section 3.1(b) or 3.1(c) hereof, any payment received by the
Indenture Trustee for which provision as to the application thereof is made in
an Operative Document, but not elsewhere in this Indenture (including payments
received by the Indenture Trustee under the Calpine Guaranty), shall, unless a
Lease Indenture Event of Default shall have occurred and be continuing, be
applied forthwith to the purpose for which such payment was made in accordance
with the terms of such Operative Document. If at the time of the receipt by
the Indenture Trustee of any payment referred to in the preceding sentence
there shall have occurred and be continuing a Lease Indenture Event of Default,
the Indenture Trustee shall hold such payment as part of the Indenture Estate,
but the Indenture Trustee shall, except as otherwise provided in Section 3.1(b)
or 3.1(c) hereof, cease to hold such payment and shall apply such payment to
the purpose for which it was made in accordance with the terms of such
Operative Document if and whenever there is no longer continuing any Lease
Indenture Event of Default; provided, however, that any such payment received
by the Indenture Trustee which is payable to the Facility Lessee shall not be
held by the Indenture Trustee unless a Significant Lease Default or Lease Event
of Default shall have occurred and be continuing.

     Section 3.6.  Other Payments. Except as otherwise provided in Section 3.5
hereof:

                                       29
<PAGE>
     (a)  any payment received by the Indenture Trustee for which no provision
as to the application thereof is made in the Participation Agreement, the
Facility Lease or elsewhere in this Section 3; and

     (b)  all payments received and amounts realized by the Indenture Trustee
with respect to the Indenture Estate (including all amounts realized after the
termination of the Facility Lease), to the extent received or realized at any
time after payment in full of the principal of and, Make-Whole Amount, if any,
and interest on all Lessor Notes then outstanding and all other amounts due the
Indenture Trustee or the Noteholders, as well as any other amounts remaining as
part of the Indenture Estate after such payment in full of the principal of,
Make-Whole Amount, if any, and interest on all Lessor Notes outstanding;

     shall be distributed forthwith by the Indenture Trustee in the order of
priority set forth in Section 3.3 hereof, omitting clause "Third" thereof.

     Section 3.7.  Excepted Payments. Notwithstanding any other provision of
this Indenture including this Section 3 or any provision of any of the
Operative Documents to the contrary, any Excepted Payments received or held by
the Indenture Trustee at any time shall promptly be paid or distributed by the
Indenture Trustee to the Person or Persons entitled thereto.

     Section 3.8.  Distributions to the Owner Lessor. Unless otherwise
directed in writing by the Owner Lessor, all amounts from time to time
distributable by the Indenture Trustee to the Owner Lessor in accordance with
the provisions hereof shall be paid by the Indenture Trustee in immediately
available funds to the Owner Participant's Account. Any amounts payable to the
Trust Company in its individual capacity shall be paid to the Trust Company.

     Section 3.9.  Payments Under Assigned Documents. Notwithstanding anything
to the contrary contained in this Indenture, until the discharge and
satisfaction of the Lien of this Indenture, all payments due or to become due
under any Assigned Document to the Owner Lessor (except so much of such
payments as constitute Excepted Payments) shall be made directly to the
Indenture Trustee's Account and the Owner Lessor shall give all notices as
shall be required under the Assigned Documents to direct payment of all such
amounts to the Indenture Trustee hereunder. The Owner Lessor agrees that if it
should receive any such payments directed to be made to the Indenture Trustee
or any proceeds for or with respect to the Indenture Estate or as the result of
the sale or other disposition thereof or otherwise constituting a part of the

                                       30
<PAGE>
Indenture Estate to which the Owner Lessor is not entitled hereunder, it will
promptly forward such payments to the Indenture Trustee or in accordance with
the Indenture Trustee's instructions. The Indenture Trustee agrees to apply
payments from time to time received by it (from the Facility Lessee, the Owner
Lessor or otherwise) with respect to the Facility Lease, any other Assigned
Document or the Facility in the manner provided in Section 2.7 hereof, and this
Section 3.

     Section 3.10.  Disbursement of Amounts Received by the Indenture Trustee.
Subject to the last sentence of this Section 3.10 and Section 3.2, amounts to
be distributed by the Indenture Trustee pursuant to this Section 3 shall be
distributed on the date such amounts are actually received by the Indenture
Trustee. Notwithstanding anything to the contrary contained in this Section 3,
in the event the Indenture Trustee shall be required or directed to make a
payment under this Section 3 on the same date on which such payment is
received, any amounts received by the Indenture Trustee after 12:00 noon, New
York City time, or on a day other than a Business Day, may be distributed on
the next succeeding Business Day.

     Section 3.11   Establishment of the Indenture Trustee's Account; and Lien
and Security Interest; Etc.

     (a) The Account Bank hereby confirms that it has established a securities
account entitled the "Indenture Trustee's Account" (the "Indenture Trustee's
Account"), which Indenture Trustee's Account shall be maintained by the Account
Bank until the date this Indenture is terminated pursuant to Section 7.1
hereof. The account number of the Indenture Trustee's Account established
hereunder is specified in Schedule II hereto. The Indenture Trustee's Account
shall not be evidenced by passbooks or similar writings. This Indenture
governs and shall be the only agreement governing the Indenture Trustee's
Account.

     (b) All amounts from time to time held in the Indenture Trustee's Account
shall be maintained (i) in the name of the Owner Lessor subject to the lien and
security interest of the Indenture Trustee for the benefit of the Indenture
Trustee and each of the Noteholders as set forth herein and (ii) in the custody
of the Account Bank for and on behalf of the Indenture Trustee for the benefit
of the Indenture Trustee and each of the Noteholders for the purposes and on
the terms set forth in this Indenture. All such amounts shall constitute a
part of the Indenture Trustee Account Collateral and shall not constitute
payment of any Indebtedness or any other obligation of the Owner Lessor until
applied as hereinafter provided.

                                       31
<PAGE>
     (c) As collateral security for the prompt payment in full when due of the
Lessor Secured Obligations owed to the Indenture Trustee and each Noteholder,
the Owner Lessor hereby pledges, assigns, hypothecates and transfers to the
Indenture Trustee for the benefit of the Indenture Trustee and each of the
Noteholders, and hereby grants to the Indenture Trustee for the benefit of the
Indenture Trustee and each of the Noteholders, a lien on and security interest
in and to, (i) the Indenture Trustee's Account and any successor account
thereto and (ii) all cash, investments, investment property, securities or
other property at any time on deposit in or credited to the Indenture Trustee's
Account, including all income or gain earned thereon and any proceeds thereof
(the "Indenture Trustee Account Collateral").

     Section 3.12 The Account Bank; Limited Rights of the Owner Lessor

     (a)  The Account Bank.

          (i) Establishment of Securities Account. The Account Bank hereby
     agrees and confirms that (A) the Account Bank has established the Indenture
     Trustee's Account as set forth in Section 3.11, (B) the Indenture Trustee's
     Account is and will be maintained as a "securities account" (within the
     meaning of Section 8-501(a) of the UCC), (C) the Owner Lessor is the
     "entitlement holder" (within the meaning of Section 8-102(a)(7) of the UCC)
     in respect of the "financial assets" (within the meaning of Section
     8-102(a)(9) of the UCC) credited to the Indenture Trustee's Account, (D)
     all property delivered to the Account Bank pursuant to this Indenture or
     any other Operative Document will be held by the Account Bank and promptly
     credited to the Indenture Trustee's Account by an appropriate entry in its
     records in accordance with this Indenture, (E) all "financial assets"
     (within the meaning of Section 8-102(a)(9) of the UCC) in registered form
     or payable to or to the order of and credited to the Indenture Trustee's
     Account shall be registered in the name of, payable to or to the order of,
     or indorsed to, the Account Bank or in blank, or credited to another
     securities account maintained in the name of the Account Bank, and in no
     case will any financial asset credited to the Indenture Trustee's Account
     be registered in the name of, payable to or to the order of, or indorsed
     to, the Owner Lessor except to the extent the foregoing have been
     subsequently indorsed by the Owner Lessor to the Account Bank or in blank,
     (F) the Account Bank shall not change the name or account number of the
     Indenture Trustee's Account without the prior written consent of the
     Indenture Trustee, (G) the Account Bank is acting and shall at all times
     act as and perform all of the duties of the "securities intermediary,"
     within the meaning of Article 8 of the UCC, with respect to the

                                       32
<PAGE>
     Indenture Trustee's Account and the financial assets credited thereto
     and (H) the Account Bank shall not enter into any other agreement
     governing, or with respect to, the Indenture Trustee's Account without the
     prior written consent of the Indenture Trustee.

          (ii) Financial Assets Election. The Account Bank agrees that each item
     of property (including any security, instrument or obligation, share,
     participation, interest, cash or cash equivalent or other property
     whatsoever) credited to the Indenture Trustee's Account shall be treated as
     a "financial asset" within the meaning of Section 8-l02(a)(9) of the UCC.

          (iii) Entitlement Orders. Notwithstanding anything in this Indenture
     to the contrary, if at any time the Account Bank shall receive any
     "entitlement order" (within the meaning of Section 8-102(a)(8) of the UCC)
     or any other order from the Indenture Trustee directing the transfer or
     redemption of any financial asset relating to the Indenture Trustee's
     Account or with respect to any "security entitlements" (within the meaning
     of Section 8-102(a)(17) of the UCC) carried or to be carried in the
     Indenture Trustee's Account, the Account Bank shall comply with such
     entitlement order or other order without further consent by the Owner
     Lessor or any other Person. The parties hereto hereby agree that the
     Indenture Trustee shall have "control" (within the meaning of Section
     8-106(d) of the UCC) of (A) the Indenture Trustee's Account, (B) all
     security entitlements carried or to be carried in the Indenture Trustee's
     Account and (C) the Owner Lessor's security entitlements with respect to
     the financial assets credited to the Indenture Trustee's Account and the
     Owner Lessor hereby disclaims any entitlement to claim "control" of such
     "security entitlements". Unless a Lease Indenture Event of Default shall
     have occurred and is continuing, the Indenture Trustee shall not deliver
     any entitlement order directing the transfer or redemption of any financial
     asset relating to the Indenture Trustee's Account.

          (iv) Subordination of Lien; Waiver of Set-Off. In the event that the
     Account Bank has or subsequently obtains by agreement, operation of law or
     otherwise a lien or security interest in the Indenture Trustee's Account or
     any security entitlement credited thereto, the Account Bank agrees that
     such lien or security interest shall be subordinate to the lien and
     security interest of the Indenture Trustee for the benefit of the Indenture
     Trustee and each Noteholder. The financial assets standing to the credit of
     the Indenture Trustee's Account will not be subject to deduction, set-off,
     banker's lien, or any other right in favor

                                       33
<PAGE>
     of any Person other than the Indenture Trustee for the benefit of the
     Indenture Trustee and each Noteholder (except for the face amount of any
     checks which have been credited to the Indenture Trustee's Account but are
     subsequently returned unpaid because of uncollected or insufficient funds).

          (v) No Other Agreements. The Account Bank and the Owner Lessor have
     not entered into any agreement governing or with respect to the Indenture
     Trustee's Account or any financial assets credited to the Indenture
     Trustee's Account other than this Indenture. The Account Bank has not
     entered into any agreement with the Owner Lessor or any other Person
     purporting to limit or condition the obligation of the Account Bank to
     comply with entitlement orders originated by the Indenture Trustee in
     accordance with Section 3.12(a)(iii) hereof. In the event of any conflict
     between this Section 3.12 or any other agreement now existing or hereafter
     entered into, the terms of this Section 3.12 shall prevail.

          (vi) Notice of Adverse Claims. Except for the claims and interest of
     the Indenture Trustee for the benefit of the Indenture Trustee and each
     Noteholder and the Owner Lessor in the Indenture Trustee's Account, the
     Account Bank does not know of any claim to, or interest in, the Indenture
     Trustee's Account or in any financial asset credited thereto. If any Person
     asserts any lien, encumbrance or adverse claim (including any writ,
     garnishment, judgment, warrant of attachment, execution or similar process)
     against the Indenture Trustee's Account or in any financial asset credited
     thereto, the Account Bank will promptly notify the Indenture Trustee and
     the Owner Lessor in writing thereof.

          (vii) Rights and Powers of the Indenture Trustee. The rights and
     powers granted by the Indenture Trustee to the Account Bank have been
     granted in order to perfect its lien and security interests in the
     Indenture Trustee's Account, are powers coupled with an interest and will
     neither be affected by the bankruptcy of the Owner Lessor nor the lapse of
     time.

     (b)  Limited Rights of the Owner Lessor. The Owner Lessor shall not have
any rights against or to monies held in the Indenture Trustee's Account, as
third party beneficiary or otherwise, or any right to direct the Account Bank
or the Indenture Trustee to apply or transfer monies in the Indenture Trustee's
Account, except the right to receive or make requisitions of monies held in the
Indenture Trustee's Account, as expressly provided in this Indenture, and to
direct the investment of monies held in the

                                       34
<PAGE>
Indenture Trustee's Account as expressly provided in Section 3.7 hereof.
Except as expressly provided in this Indenture, in no event shall any amounts
or Permitted Investments deposited in or credited to the Indenture Trustee's
Account be registered in the name of the Owner Lessor, payable to the order of
the Owner Lessor or specially indorsed to the Owner Lessor except to the extent
that the foregoing have been specially indorsed to the Indenture Trustee or in
blank.

                                  SECTION 4.
                    COVENANTS OF OWNER LESSOR; DEFAULTS;
                       REMEDIES OF INDENTURE TRUSTEE

     Section 4.1.  Covenants of Owner Lessor. The Owner Lessor hereby
covenants and agrees as follows:

     (a) the Owner Lessor will duly and punctually pay the principal of,
Make-Whole Amount, if any, and interest on and other amounts due under the
Lessor Notes and hereunder in accordance with the terms of the Lessor Notes and
this Indenture and all amounts payable by it to the Noteholders under the
Participation Agreement; and

     (b) the Owner Lessor will not, except as provided in this Indenture
(including Sections 4.4, 5.6, 8.1 and 8.2) and except as to Excepted Payments
(i) enter into any agreement amending, modifying or supplementing any of the
Assigned Documents, or exercise any election or option, or make any decision or
determination, or give any notice, consent, waiver or approval, or take any
other action, under or in respect of any Assigned Document, (ii) accept and
retain any payment from, or settle or compromise any claim arising under, any
of the Assigned Documents, except that it may forward any payment to the
Indenture Trustee in accordance with Section 3.9, (iii) give any notice or
exercise any right or take any action under any of the Assigned Documents, or
(iv) submit or consent to the submission of any dispute, difference or other
matter arising under or in respect of any of the Assigned Documents to
arbitration thereunder.

     Section 4.2.  Lease Indenture Events of Default. Subject to Section 4.4
hereof, the term "Lease Indenture Event of Default," wherever used herein,
shall mean any of the following events (whatever the reason for such Lease
Indenture Event of Default and whether it shall be voluntary or involuntary or
come about or be effected by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

                                       35
<PAGE>
     (a) any Lease Event of Default (other than the failure of the Facility
Lessee to pay any amount which shall constitute an Excepted Payment unless the
Facility Lessee has been declared in default pursuant to Section 17 thereof by
the Owner Lessor and the Indenture Trustee has consented to such event
constituting a Lease Indenture Event of Default pursuant to Section 4.3(e)
hereof) and other than a Lease Event of Default in consequence of the Facility
Lessee's failure to maintain the insurance required by Section 11 of the
Facility Lease if, and so long as, (i) such Lease Event of Default is waived by
the Owner Lessor and the Owner Participant and (ii) the insurance maintained by
the Facility Lessee still constitutes Prudent Industry Practice); or

     (b) the Owner Lessor shall fail to make any payment in respect of the
principal of, or Make-Whole Amount, if any, or interest on, or any scheduled
fees due and payable under or with respect to any Lessor Note within five
Business Days after the same shall have become due or any other amounts due and
payable under or with respect to any Lessor Note within ten Business Days after
the Owner Lessor receives notice that such amount is due and payable; or

     (c) the Owner Lessor shall fail to perform or observe any covenant,
obligation or agreement to be performed or observed by it under this Indenture
(other than any covenant, obligation or agreement contained in clause (b) of
this Section 4.2), the Owner Lessor or the Lessor Manager shall fail to perform
or observe any covenant, obligation or agreement to be performed by it under
Section 6 of the Participation Agreement, the Owner Participant shall fail to
perform or observe any covenant, obligation or agreement to be performed by it
under Section 7 of the Participation Agreement, or the OP Guarantor shall fail
to perform or observe any covenant, obligation or agreement to be performed by
it under the OP Guaranty in each case, in any material respect, which failure
shall continue unremedied for 30 days after receipt by such party of written
notice thereof; provided, however, that if such condition cannot be remedied
within such 30-day period, then the period within which to remedy such
condition shall be extended up to 180 days, so long as such party diligently
pursues such remedy and such condition is reasonably capable of being remedied
within such extended period;

     (d) any representation or warranty made by the Lessor Manager or the Owner
Lessor in Section 3.2 or 3.3 of the Participation Agreement or in the
certificate delivered by the Lessor Manager or the Owner Lessor at the Closing
pursuant to Section 4.6 of the Participation Agreement or any representation or
warranty made by the Owner Participant in Section 3.4 of the Participation
Agreement (other than Section 3.4(i)) or the certificate delivered by the Owner
Participant at the Closing

                                       36
<PAGE>
pursuant to Section 4.6 of the Participation Agreement, or any representation
or warranty made by the OP Guarantor (provided the OP Guaranty shall not have
been terminated or released) under the OP Guaranty or in the certificate
delivered by such OP Guarantor at the Closing pursuant to Section 4.6 of the
Participation Agreement, shall prove to have been incorrect in any material
respect when made and continues to be material and unremedied for a period of
30 days after receipt by such party of written notice thereof; provided,
however, that if such condition cannot be remedied within such 30-day period,
then the period within which to remedy such condition shall be extended up to
an additional 120 days, so long as such party diligently pursues such remedy
and such condition is reasonably capable of being remedied within such extended
period;

     (e) the Owner Participant, the Owner Lessor or the OP Guarantor (provided
the OP Guaranty shall not have been terminated or released) shall (i) commence
a voluntary case or other proceeding seeking relief under Title 11 of the
Bankruptcy Code or liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect, or apply for or consent to the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or (ii) consent to, or fail to controvert in
a timely manner, any such relief or the appointment of or taking possession by
any such official in any voluntary case or other proceeding commenced against
it, or (iii) file an answer admitting the material allegations of a petition
filed against it in any such proceeding; or (iv) make a general assignment for
the benefit of creditors; or (v) become unable, admit in writing its inability
or fail generally to pay its debts as they become due; or (vi) take corporate
action for the purpose of effecting any of the foregoing; or

     (f) an involuntary case or other proceeding shall be commenced against the
Owner Participant, the Owner Lessor or the OP Guarantor (provided the OP
Guaranty shall not have been terminated or released) seeking (i) liquidation,
reorganization or other relief with respect to it or its debts under Title 11
of the Bankruptcy Code or any bankruptcy, insolvency or other similar law now
or hereafter in effect, or (ii) the appointment of a trustee, receiver,
liquidator, custodian or other similar official with respect to it or any
substantial part of its property or (iii) the winding-up or liquidation of the
Owner Lessor; and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days.

     Section 4.3.  Remedies of the Indenture Trustee.

     (a) In the event that a Lease Indenture Event of Default shall have
occurred and be continuing, the Indenture Trustee in its discretion may, or
upon receipt of written

                                       37
<PAGE>
instructions from a Majority in Interest of Noteholders shall declare, by
written notice to the Owner Lessor and the Owner Participant, the unpaid
principal amount of all Lessor Notes, with accrued interest thereon, to be
immediately due and payable, upon which declaration such principal amount and
such accrued interest shall immediately become due and payable (except in the
case of a Lease Indenture Event of Default under Section 4.2(e) or (f), such
principal and interest shall automatically become due and payable immediately
without any such declaration or notice) without further act or notice of any
kind. If any Make-Whole amount is due and payable pursuant to Section 2.10 (c)
or (d) at the time of any such acceleration, such Make-Whole Amount shall also
be due and payable in connection with such acceleration.

     (b) If a Lease Indenture Event of Default shall have occurred and be
continuing, then and in every such case, the Indenture Trustee, as assignee
under the Facility Lease or hereunder or otherwise, may, and where required
pursuant to the provisions of Section 5 hereof shall, upon written notice to
the Owner Lessor, exercise any or all of the rights and powers and pursue any
or all of the remedies pursuant to this Section 4 and, in the event such Lease
Indenture Event of Default shall be a Lease Event of Default, any and all of
the remedies provided pursuant to this Section 4 and Section 17 of the Facility
Lease and, subject to Section 4.4, may take possession of all or any part of
the Indenture Estate and may exclude therefrom the Owner Participant, the Owner
Lessor and, in the event such Lease Indenture Event of Default shall be a Lease
Event of Default, the Facility Lessee and all persons claiming under them, and
may exercise all remedies available to a secured party under the Uniform
Commercial Code or any other provision of Applicable Law. The Indenture
Trustee may proceed to enforce the rights of the Indenture Trustee and of the
Noteholders by directing payment to it of all moneys payable under any
agreement or undertaking constituting a part of the Indenture Estate, by
proceedings in any court of competent jurisdiction to recover damages for the
breach hereof or for the appointment of a receiver or for sale of all or any
part of the Property Interest or for foreclosure of the Property Interest,
together with the Owner Lessor's interest in the Assigned Documents, and by any
other action, suit, remedy or proceeding authorized or permitted by this
Indenture, at law or in equity, or whether for the specific performance of any
agreement contained herein, or for an injunction against the violation of any
of the terms hereof, or in aid of the exercise of any power granted hereby or
by law, and in addition may foreclose upon, sell, assign, transfer and deliver,
from time to time to the extent permitted by Applicable Law, all or any part of
the Indenture Estate or any interest therein, at any private sale or public
auction with or without demand, advertisement or notice (except as herein
required or as may be required by law) of the date, time and place of sale and
any adjournment thereof, for cash or credit or other property, for immediate or
future delivery and for

                                       38
<PAGE>
such price or prices and on such terms as the Indenture Trustee, in its
unfettered discretion, may determine, or as may be required by law, so long as
the Owner Participant and the Owner Lessor are afforded a commercially
reasonable opportunity to bid for all or such part of the Indenture Estate in
connection therewith unless Section 4.7 shall otherwise be applicable; provided
that 20 days shall be deemed to be a commercially reasonable opportunity to bid
for purposes of this Section 4.3(b). The Indenture Trustee may file such proofs
of claim and other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee and of the Noteholders
asserted or upheld in any bankruptcy, receivership or other judicial
proceedings.

     (c) All rights of action and rights to assert claims under this Indenture
or under any of the Lessor Notes may be enforced by the Indenture Trustee
without the possession of the Lessor Notes at any trial or other proceedings
instituted by the Indenture Trustee, and any such trial or other proceedings
shall be brought in its own name as mortgagee of an express trust, and any
recovery or judgment shall be for the ratable benefit of the Noteholders as
herein provided. In any proceedings brought by the Indenture Trustee (and also
any proceedings involving the interpretation of any provision of this
Indenture), the Indenture Trustee shall be held to represent all the
Noteholders, and it shall not be necessary to make any such Persons parties to
such proceedings.

     (d) Anything herein to the contrary notwithstanding, neither the Indenture
Trustee nor any Noteholder shall at any time, including at any time when a
Lease Indenture Event of Default shall have occurred and be continuing and
there shall have occurred and be continuing a Lease Event of Default, be
entitled to exercise any remedy under or in respect of this Indenture which
could or would divest the Owner Lessor of title to, or its ownership interest
in, any portion of the Indenture Estate unless, in the case of a Lease
Indenture Event of Default as a consequence of a Lease Event of Default under
Section 16 of the Facility Lease, the Indenture Trustee shall have, to the
extent it is then entitled to do so hereunder and is not then stayed or
otherwise prevented from doing so by operation of law, commenced the exercise
of one or more remedies under the Facility Lease intending to dispossess the
Facility Lessee of its leasehold interest in the Undivided Interest and is
using good faith efforts in the exercise of such remedies (and not merely
asserting a right or claim to do so); provided that during any period that the
Indenture Trustee is stayed or otherwise prevented by operation of law from
exercising such remedies, the Indenture Trustee will not divest the Owner
Lessor of title to any portion of the Indenture Estate until the earlier of (a)
the expiration of the 180-

                                       39
<PAGE>
day period following the date of commencement of a stay or other prevention
or (b) the date of repossession of the Facility under the applicable Facility
Lease.

     (e) Any provisions of the Facility Lease or this Indenture to the contrary
notwithstanding, if the Facility Lessee shall fail to pay any Excepted Payment
to any Person entitled thereto as and when due, such Person shall have the
right at all times, to the exclusion of the Indenture Trustee, to demand,
collect, sue for, enforce performance of obligations relating to, or otherwise
obtain all amounts due in respect of such Excepted Payment or to declare a
Lease Event of Default under Section 16 of the Facility Lease solely to enforce
such obligations in respect of any Excepted Payments (provided that any such
declaration shall not be deemed to constitute a Lease Indenture Event of
Default hereunder without the consent of the Indenture Trustee).

     Section 4.4.  Right to Cure Certain Lease Events of Default.

     (a) If the Facility Lessee shall fail to make any payment of Periodic Rent
due on any Rent Payment Date when the same shall have become due, and if such
failure of the Facility Lessee to make such payment of Periodic Rent shall not
constitute the fourth consecutive such failure or the eighth cumulative failure
of the Facility Lessee, then the Owner Lessor may (but need not) pay to the
Indenture Trustee, at any time prior to the expiration of ten (10) Business
Days after the Owner Lessor and the Owner Participant shall have received
notice from the Indenture Trustee or have Actual Knowledge of the failure of
the Facility Lessee to make such payment of Periodic Rent, an amount equal to
the principal of, Make-Whole Amount, if any, and interest on the Lessor Notes,
then due (otherwise than by declaration of acceleration) on such Rent Payment
Date, together with any interest due thereon on account of the delayed payment
thereof, and such payment by the Owner Lessor shall be deemed (for purposes of
this Indenture) to have cured any Lease Indenture Event of Default which arose
or would have arisen from such failure of the Facility Lessee.

     (b) If the Facility Lessee shall fail to make any payment of Supplemental
Rent when the same shall become due or otherwise fail to perform any obligation
under the Facility Lease or any other Operative Document, then the Owner Lessor
may (but need not) make such payment on the date such Supplemental Rent was
payable, together with any interest due thereon on account of the delayed
payment thereof, or perform such obligation at any time prior to the expiration
of ten (10) Business Days after the Owner Lessor or the Owner Participant shall
have received notice or have Actual Knowledge of the occurrence of such
failure, and such payment or performance by the

                                       40
<PAGE>
Owner Lessor shall be deemed to have cured any Lease Indenture Event of Default
which arose or would have arisen from such failure of the Facility Lessee.

     (c) The Owner Lessor, upon exercising its rights under paragraph (a) or
(b) of this Section 4.4 to cure the Facility Lessee's failure to pay Periodic
Rent or Supplemental Rent or to perform any other obligation under the Facility
Lease or any other Operative Document, shall not obtain any Lien on any part of
the Indenture Estate on account of such payment or performance nor, except as
expressly provided in the next sentence, pursue any claims against the Facility
Lessee or any other party, for the repayment thereof if such claims would
impair the prior right and security interest of the Indenture Trustee in and to
the Indenture Estate. Upon such payment or performance by the Owner Lessor,
the Owner Lessor shall (to the extent of such payment made by it and the costs
and expenses incurred in connection with such payments and performance thereof
together with interest thereon and so long as no event which would, with the
passing of time or giving of notice or both, become a Lease Indenture Event of
Default under Section 4.2(b), (e) or (f), or any Lease Indenture Event of
Default hereunder shall have occurred and be continuing) be subrogated to the
rights of the Indenture Trustee and the Noteholders to receive the payment of
Periodic Rent or Supplemental Rent, as the case may be, with respect to which
the Owner Lessor made such payment and interest on account of such Periodic
Rent payment or Supplemental Rent payment being overdue in the manner set forth
in the next two sentences. If the Indenture Trustee shall thereafter receive
such payment of Periodic Rent, Supplemental Rent or such interest, the
Indenture Trustee shall, notwithstanding the requirements of Section 3.1
hereof, forthwith, remit such payment of Periodic Rent or Supplemental Rent, as
the case may be (to the extent of the payment made by the Owner Lessor pursuant
to this Section 4.4) and such interest to the Owner Lessor in reimbursement for
the funds so advanced by it, provided that if (A) any event which, with the
passing of time or giving of notice or both, would become a Lease Indenture
Event of Default under Section 4.2(b), (e) or (f) hereof, or any Lease
Indenture Event of Default hereunder shall have occurred and be continuing or
(B) any payment of principal, interest, or Make-Whole Amount, if any, on any
Lessor Note then shall be overdue, such payment shall not be remitted to the
Owner Lessor but shall be held by the Indenture Trustee as security for the
obligations secured hereby and distributed in accordance with Section 3.1
hereof. The Owner Lessor shall not attempt to recover any amount paid by it on
behalf of the Facility Lessee pursuant to this Section 4.4 except by demanding
of the Facility Lessee payment of such amount or by commencing an action
against the Facility Lessee for the payment of such amount, and except where a
Lease Indenture Event of Default (other than a Lease Event of Default) has
occurred and is continuing, the Owner Lessor shall be entitled to receive the
amount of such payment and the costs

                                       41
<PAGE>
and expenses incurred in connection with such payments and performance thereof
together with interest thereon from the Facility Lessee (but neither the Owner
Lessor nor the Owner Participant shall have any right to collect such amounts
by exercise of any of the remedies under Section 17 of the Facility Lease) or,
if paid by the Facility Lessee to the Indenture Trustee, from the Indenture
Trustee to the extent of funds actually received by the Indenture Trustee.

     (d) Until the expiration of the period during which the Owner Lessor or
the Owner Participant shall be entitled to exercise rights under paragraph (a)
or (b) of this Section 4.4 with respect to any failure by the Facility Lessee
referred to therein, neither the Indenture Trustee nor any Noteholder shall
take or commence any action it would otherwise be entitled to take or commence
as a result of such failure by the Facility Lessee, whether under this Section
4 or Section 17 of the Facility Leases or otherwise.

     (e) Each Noteholder agrees, by acceptance thereof, that if (i) (x) a Lease
Indenture Event of Default, which also constitutes a Lease Event of Default,
shall have occurred and be continuing for a period of at least 90 days without
the Lessor Notes having been accelerated or the Indenture Trustee having
exercised any remedy under the Facility Lease intended to dispossess the
Facility Lessee of the Facility, (y) the Lessor Notes have been accelerated
pursuant to Section 4.3(a) and such acceleration has not theretofore been
rescinded, or (z) an Enforcement Notice giving notice of the intent of the
Indenture Trustee to dispossess the Facility Lessee of the Facility under the
Facility Lease has been given pursuant to Section 5.1 within the previous 30
days, (ii) no Lease Indenture Event of Default of the nature described in any
of clauses (b) through (f) of Section 4.2 hereof shall have occurred and be
continuing and (iii) the Owner Lessor shall give written notice to the
Indenture Trustee of the Owner Lessor's intention to purchase all of the Lessor
Notes in accordance with this paragraph, then, upon receipt within 10 Business
Days after such notice from the Owner Lessor of an amount equal to the sum of
(x) the aggregate unpaid principal amount of any unpaid Lessor Notes then held
by the Noteholders, together with accrued but unpaid interest thereon to the
date of such receipt (as well as any interest on overdue principal and, to the
extent permitted by Applicable Law, overdue interest), plus (y) the aggregate
amount, if any, of all sums which, if Section 3.3 were then applicable, such
Noteholder would be entitled to be paid before any payments were to be made to
the Owner Lessor but excluding any Make-Whole Amount, such Noteholder will
forthwith (and upon its receipt of the payment referred to in clause (1) below,
will be deemed to) sell, assign, transfer and convey to the Owner Lessor
(without recourse or warranty of any kind other than of title to the Lessor
Notes so conveyed) all of the right, title and interest of such Noteholder in
and to the Indenture Estate, this Indenture, all Lessor Notes held by such
Noteholder and the

                                       42
<PAGE>
Assigned Documents, and the Owner Lessor shall thereupon assume all such
Noteholder's rights and obligations in such documents; provided, that no such
holder shall be required to so convey unless (1) the Owner Lessor shall have
simultaneously tendered payment on all other Lessor Notes issued by the Owner
Lessor at the time outstanding pursuant to this paragraph and (2) such
conveyance is not in violation of any Applicable Law. All charges and expenses
required to be paid in connection with the issuance of any new Lessor Note or
Lessor Notes in connection with this paragraph shall be borne by the Owner
Lessor. Notwithstanding the foregoing, the Owner Lessor may exercise the right
set forth in this clause (e) prior to the end of the 90 day period set forth
above but, in such case, the Make-Whole Amount, if any, shall also be payable.

     Section 4.5.  Rescission of Acceleration. If at any time after the
outstanding principal amount of the Lessor Notes shall have become due and
payable by acceleration pursuant to Section 4.3 hereof, (a) all amounts of
principal, Make-Whole Amount, if any, and interest which are then due and
payable in respect of all the Lessor Notes other than pursuant to Section 4.3
hereof shall have been paid in full, together with interest on all such overdue
principal and (to the extent permitted by Applicable Law) overdue interest at
the rate or rates specified in the Lessor Notes, and an amount sufficient to
cover all costs and expenses of collection incurred by or on behalf of the
holders of the Lessor Notes (including counsel fees and expenses and all
expenses and reasonable compensation of the Indenture Trustee) and (b) every
other Lease Indenture Event of Default shall have been remedied, then a
Majority in Interest of Noteholders may, by written notice or notices to the
Owner Lessor, the Indenture Trustee and the Facility Lessee, rescind and annul
such acceleration and any related declaration of default under the Facility
Lease and their respective consequences, but no such rescission and annulment
shall extend to or affect any subsequent Lease Indenture Event of Default or
impair any right consequent thereon, and no such rescission and annulment shall
require any Noteholder to repay any principal or interest actually paid as a
result of such acceleration.

     Section 4.6.  Return of Indenture Estate, Etc.

     (a) If at any time the Indenture Trustee has the right to take possession
of the Indenture Estate pursuant to Section 4.3 hereof, at the request of the
Indenture Trustee, the Owner Lessor promptly shall (i) execute and deliver to
the Indenture Trustee such instruments of title and other documents and (ii)
make all such demands and give all such notices as are permitted by the terms
of the Facility Lease to be made or given by the Owner Lessor upon the
occurrence and continuance of a Lease Event of Default, in each case as the
Indenture Trustee may deem necessary or advisable to enable the

                                       43
<PAGE>
Indenture Trustee or an agent or representative designated by the Indenture
Trustee, at such time or times and place or places as the Indenture Trustee may
specify, to obtain possession of all or any part of the Indenture Estate the
possession of which the Indenture Trustee shall at the time be entitled to
hereunder. If the Owner Lessor shall for any reason fail to execute and
deliver such instruments and documents after such request by the Indenture
Trustee, the Indenture Trustee may (i) obtain a judgment conferring on the
Indenture Trustee the right to immediate possession and requiring the Owner
Lessor to execute and deliver such instruments and documents to the Indenture
Trustee, to the entry of which judgment the Owner Lessor hereby specifically
consents, and (ii) pursue all or any part of the Indenture Estate wherever it
may be found and enter any of the premises wherever all or part of the
Indenture Estate may be or is supposed to be and search for all or part of the
Indenture Estate and take possession of and remove all or part of the Indenture
Estate.

     (b) Upon every such taking of possession, the Indenture Trustee may, from
time to time, as a charge against proceeds of the Indenture Estate, make all
such expenditures with respect to the Indenture Estate as it may deem proper.
In each such case, the Indenture Trustee shall have the right to deal with the
Indenture Estate and to carry on the business and exercise all rights and
powers of the Owner Lessor relating to the Indenture Estate, as the Indenture
Trustee shall deem best, and, the Indenture Trustee shall be entitled to
collect and receive all rents (including Periodic Rent and Supplemental Rent),
revenues, issues, income, products and profits of the Indenture Estate and
every part thereof (without prejudice to the right of the Indenture Trustee
under any provision of this Indenture to collect and receive cash held by, or
required to be deposited with, the Indenture Trustee hereunder) and to apply
the same to the management of or otherwise dealing with the Indenture Estate
and of conducting the business thereof, and of all expenditures with respect to
the Indenture Estate and the making of all payments which the Indenture Trustee
may be required or may elect to make, if any, for taxes, assessments, insurance
or other proper charges upon the Indenture Estate or any part thereof
(including the employment of engineers and accountants to examine, inspect and
make reports upon the properties and books and records of the Owner Lessor and
the Facility Lessee relating to the Indenture Estate and the Operative
Documents), or under any provision of, this Indenture, as well as just and
reasonable compensation for the services of the Indenture Trustee and of all
Persons properly engaged and employed by the Indenture Trustee.

     Section 4.7.  Power of Sale and Other Remedies. In addition to all other
remedies provided for herein if a Lease Indenture Event of Default shall have
occurred and be continuing, the Indenture Trustee shall, subject to Sections
4.3 and 4.4, have the

                                       44
<PAGE>
right to foreclose this Indenture and to have a judicial sale of the Indenture
Estate or any part of the Indenture Estate as the Indenture Trustee shall
determine, in its sole discretion, with any such sale(s) to be under the
judgment or decree of a court of competent jurisdiction. Further, if a Lease
Indenture Event of Default shall have occurred and be continuing, the Indenture
Trustee may, in addition to and not in abrogation of other rights and remedies
provided in this Section, proceed by a suit or suits in law or in equity or by
any other appropriate proceeding or remedy (i) to enforce payment of the Lessor
Notes or the performance of any term, covenant, condition or agreement of this
Indenture or any other right, and (ii) to pursue any other remedy available to
it, all as the Indenture Trustee shall determine most effectual for such
purposes. Upon any foreclosure sale, the Indenture Trustee may bid for and
purchase the Indenture Estate and shall be entitled to apply all or any part of
the Secured Indebtedness as a credit to the purchase price. In the event of a
foreclosure sale of the Indenture Estate, the proceeds of said sale shall be
applied as provided in Section 3.3 hereof. In the event of any such
foreclosure sale by the Indenture Trustee, the Owner Lessor shall be deemed a
tenant holding over and shall forthwith deliver possession to the purchaser or
purchasers at such sale or be summarily dispossessed according to provisions of
law applicable to tenants holding over. The Indenture Trustee, at the
Indenture Trustee's option, is authorized to foreclose this Indenture subject
to the rights of any tenants of the Indenture Estate, and the failure to make
any such tenants parties to any such foreclosure proceedings and to foreclose
their rights will not be, nor be asserted to be by the Owner Lessor, a defense
to any proceedings instituted by the Indenture Trustee to collect the Secured
Indebtedness.

     Section 4.8.  Appointment of Receiver. If the outstanding principal
amount of the Lessor Notes shall have been declared due and payable pursuant to
Section 4.3 hereof, as a matter of right, the Indenture Trustee shall be
entitled to the appointment of a receiver (who may be the Indenture Trustee or
any successor or nominee thereof) for all or any part of the Indenture Estate,
whether such receivership be incidental to a proposed sale of the Indenture
Estate or the taking of possession thereof or otherwise, and the Owner Lessor
hereby consents to the appointment of such a receiver and will not oppose any
such appointment. Any receiver appointed for all or any part of the Indenture
Estate shall be entitled to exercise all the rights and powers with respect to
the Indenture Estate to the extent instructed to do so by the Indenture Trustee.

     Section 4.9.  Remedies Cumulative. Each and every right, power and remedy
herein specifically given to the Indenture Trustee or otherwise in this
Indenture shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at law,
in equity or by statute, and each

                                       45
<PAGE>
and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Indenture Trustee, and the exercise or
the beginning of the exercise of any right, power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy. No delay or omission by the
Indenture Trustee in the exercise of any right, remedy or power or in the
pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner Participant,
the Owner Lessor or the Facility Lessee or to be an acquiescence therein.

     Section 4.10.  Waiver of Various Rights by the Owner Lessor. The Owner
Lessor hereby waives and agrees, to the extent permitted by Applicable Law,
that it will never seek or derive any benefit or advantage from any of the
following, whether now existing or hereafter in effect, in connection with any
proceeding under or in respect of this Lease Indenture:

     (a) any stay, extension, moratorium or other similar law;

     (b) any Applicable Law providing for the valuation of or appraisal of any
portion of the Indenture Estate in connection with a sale thereof; or

     (c) any right to have any portion of the Indenture Estate or other
security for the Lessor Notes marshaled.

The Owner Lessor covenants not to hinder, delay or impede the exercise of any
right or remedy under or in respect of this Lease Indenture, and agrees, to the
extent permitted by Applicable Law, to suffer and permit its exercise as though
no laws or rights of the character listed above were in effect; provided that
this shall not affect or reduce Owner Lessor's rights under Sections 4.3 and
4.4 hereof. Owner Lessor agrees for itself, its successors and assigns, that
the acceptance, before the expiration of the right of redemption and after the
commencement of foreclosure proceedings of this Indenture, of insurance
proceeds, eminent domain awards, rents or anything else of value to be applied
on or to the Secured Indebtedness by Indenture Trustee or any person or party
holding under it shall not constitute a waiver of such foreclosure. This
agreement by Owner Lessor is intended to apply to the acceptance and such
application of any such proceeds, awards, rents and other sums or anything else
of value whether the same shall be accepted from, or for the account of, Owner
Lessor or from any other source whatsoever by Indenture Trustee or by any
person or party holding under Indenture

                                       46
<PAGE>
Trustee at any time or times in the future while any of the obligations secured
hereby shall remain outstanding.

     Section 4.11.  Discontinuance of Proceedings. In case the Indenture
Trustee or any Noteholder shall have proceeded to enforce any right, power or
remedy under this Indenture by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Indenture Trustee or the Noteholder, then
and in every such case the Owner Lessor, the Indenture Trustee and the Facility
Lessee shall be restored to their former positions and rights hereunder with
respect to the Indenture Estate, and all rights, remedies and powers of the
Indenture Trustee or the Noteholder shall continue as if no such proceedings
had taken place.

     Section 4.12.  No Action Contrary to the Facility Lessee's Rights Under
the Facility Lease. Notwithstanding any other provision of any of the
Operative Documents, so long as no Lease Event of Default under the Facility
Lease shall have been declared (or deemed to have been declared), the Indenture
Trustee and the Noteholders shall be subject to the Facility Lessee's rights
under the Facility Lease, and neither the Indenture Trustee nor any Noteholders
shall take or cause to be taken any action contrary to the right of the
Facility Lessee, including its rights to quiet use and possession of the
Facility.

     Section 4.13.  Right of the Indenture Trustee to Perform Covenants, Etc.
If the Owner Lessor shall fail to make any payment or perform any act required
to be made or performed by it hereunder or under the Assigned Documents, or if
the Owner Lessor shall fail to release any Lien affecting the Indenture Estate
which it is required to release by the terms of this Indenture or the
Participation Agreement or the LLC Agreement, the Indenture Trustee, without
notice to or demand upon the Owner Lessor and without waiving or releasing any
obligation or defaults may (but shall be under no obligation to, and, except as
provided in the last sentence hereof, shall incur no liability in connection
therewith) at any time thereafter make such payment or perform such act for the
account and at the expense of the Indenture Estate and may take all such action
with respect thereto (including entering upon the Facility Site or any part
thereof, or the Facility for such purpose) as may be necessary or appropriate
therefor. No such entry shall be deemed an eviction. All sums so paid by the
Indenture Trustee and all costs and expenses (including legal fees and
expenses) so incurred, together with interest thereon from the date of payment
or incurrence, shall constitute additional indebtedness secured by this
Indenture and shall be paid from the Indenture Estate to the Indenture Trustee
on demand. The Indenture Trustee shall not be liable for any damages resulting
from

                                       47
<PAGE>
any such payment or action unless such damages shall be a consequence of
willful misconduct or gross negligence on the part of the Indenture Trustee.

     Section 4.14.  Further Assurances. The Owner Lessor covenants and agrees
from time to time to do all such acts and execute all such instruments of
further assurance as shall be reasonably requested by the Indenture Trustee for
the purpose of fully carrying out and effectuating this Indenture and the
intent hereof.

     Section 4.15.  Waiver of Past Defaults. Any past Lease Indenture Event of
Default and its consequences may be waived by the Indenture Trustee or a
Majority in Interest of Noteholders, except a Lease Indenture Event of Default
(i) in the payment of the principal of, Make-Whole Amount, if any, and or
interest on any Lessor Note, subject to the provisions of Sections 5.1 and 8.1
hereof, or (ii) in respect of a covenant or provision hereof which, under
Section 8.1 hereof, cannot be modified or amended without the consent of each
Noteholder. Upon any such waiver and subject to the terms of such waiver, such
Lease Indenture Event of Default shall cease to exist, and any other Lease
Indenture Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Lease Indenture Event of Default or impair any right
consequent thereon.

                                SECTION 5.
                      DUTIES OF INDENTURE TRUSTEE;
                CERTAIN RIGHTS AND DUTIES OF OWNER LESSOR

     Section 5.1.  Notice of Action Upon Lease Indenture Event of Default. The
Indenture Trustee shall give prompt written notice to the Owner Lessor and the
Owner Participant of any Lease Indenture Event of Default with respect to which
the Indenture Trustee has Actual Knowledge and will give the Facility Lessee
and the Owner Participant not less than 30 days' prior written notice of the
date on or after which the Indenture Trustee intends to exercise remedies under
Section 4.3 (an "Enforcement Notice"), which notice may be given
contemporaneously with any notice contemplated by Section 4.3(a) or 4.3(b).
The Indenture Trustee shall take such action, or refrain from taking such
action, as the Majority in Interest of Noteholders shall instruct in writing.

     Section 5.2.  Actions Upon Instructions Generally. Subject to the terms
of Sections 5.4, 5.5 and 5.6 hereof, upon written instructions at any time and
from time to time of a Majority in Interest of Noteholders, the Indenture
Trustee shall take such action, or refrain from taking such action, including
any of the following actions as may

                                       48
<PAGE>
be specified in such instructions: (a) give such notice, direction or consent
or exercise such right, remedy or power or take such action hereunder or under
any Assigned Document, or in respect of any part of or all the Indenture
Estate, as it shall be entitled to take and as shall be specified in such
instructions; (b) take such action with respect to or to preserve or protect
the Indenture Estate (including the discharge of Liens) as it shall be entitled
to take and as shall be specified in such instructions; and (c) waive, consent
to, approve (as satisfactory to it) or disapprove all matters required by the
terms of any Operative Document to be satisfactory to the Indenture Trustee.
The Indenture Trustee may, and upon written instructions from a Majority in
Interest of Noteholders, the Indenture Trustee shall, execute and file or cause
to be executed and filed any financing statement (and any continuation
statement with respect to such financing statement) or any similar instrument
or document relating to the security interest or the assignment created by this
Indenture or granted by the Owner Lessor herein as may be necessary to protect
and preserve the security interest or assignment created by or granted pursuant
to this Indenture, to the extent otherwise entitled to do so and as shall be
specified in such instructions.

     Section 5.3.  Action Upon Payment of Lessor Notes or Termination of
Facility Lease. Subject to the terms of Section 5.4 hereof, upon payment in
full of the principal of and interest on all Lessor Notes then outstanding and
all other amounts then due all Noteholders hereunder, and all other sums
secured hereby or otherwise required to be paid hereunder, under the
Participation Agreement and under the Facility Lease, the Indenture Trustee
shall execute and deliver to, or as directed in writing by, the Owner Lessor
and the Facility Lessee an appropriate instrument in due form for recording,
releasing the Indenture Estate from the Lien of this Indenture. Nothing in
this Section 5.3 shall be deemed to expand the instances in which the Owner
Lessor is entitled to prepay the Lessor Notes.

     Section 5.4.  Compensation of the Indenture Trustee; Indemnification.

     (a) The Owner Lessor will from time to time, on demand, pay to the
Indenture Trustee such compensation for its services hereunder as shall be
agreed to by the Owner Lessor and the Indenture Trustee, or, in the absence of
agreement, reasonable compensation for such services (which compensation shall
include reasonable fees and expenses of its outside counsel and shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust), and the Indenture Trustee agrees that it shall have no right
against the Noteholders or, except as provided in Section 3 and Section 4.3
hereof or this Section 5, the Indenture Estate, for any fee as compensation for
its services hereunder.

                                       49
<PAGE>
     (b) The Indenture Trustee shall not be required to take any action or
refrain from taking any action under Section 4, 5.2 or 9.1 hereof unless it and
any of its directors, officers, employees or agents shall have been indemnified
in manner and form satisfactory to the Indenture Trustee. The Indenture
Trustee shall not be required to take any action under Section 4 or Section
5.2, 5.3 or 9.1 hereof, nor shall any other provision of this Indenture be
deemed to impose a duty on the Indenture Trustee to take any action, if it
shall have been advised by counsel (who shall not be an employee of the
Indenture Trustee) that such action is contrary to the terms hereof or is
otherwise contrary to Applicable Law or (unless it shall have been indemnified
in manner and form satisfactory to the Indenture Trustee) may result in
personal liability to the Indenture Trustee.

     Section 5.5.  No Duties Except as Specified; No Action Except Under
Facility Lease, Indenture or Instructions.

     (a)  The Indenture Trustee shall not have any duty or obligation to
manage, control, use, sell, dispose of or otherwise deal with any part of the
Indenture Estate or otherwise take or refrain from taking any action under or
in connection with this Indenture or the other Assigned Documents except as
expressly provided by the terms of this Indenture or as expressly provided in
written instructions from a Majority in Interest of Noteholders in accordance
with Section 5.2 hereof; and no implied duties or obligations shall be read
into this Indenture against the Indenture Trustee.

     (b) The Indenture Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Indenture Estate except (a) as required
by the terms of the Facility Lease, to the extent applicable to the Indenture
Trustee as assignee of the Owner Lessor, (b) in accordance with the powers
granted to, or the authority conferred upon, the Indenture Trustee pursuant to
this Indenture or in accordance with the express terms hereof or with written
instructions from a Majority in Interest of Noteholders in accordance with
Section 5.2 hereof.

     Section 5.6.  Certain Rights of the Owner Lessor. Notwithstanding any
other provision of this Indenture or any provision of any Operative Document to
the contrary, and in addition to any rights conferred on the Owner Lessor
hereby:

     (a)  The Owner Lessor shall at all times, to the exclusion of the Indenture
Trustee, (i) retain all rights to demand and receive payment of, and to
commence an action for payment of, Excepted Payments but the Owner Lessor shall
have no remedy

                                       50
<PAGE>
or right with respect to any such payment against the Indenture Estate nor any
right to collect any such payment by the exercise of any of the remedies under
Section 17 of the Facility Lease except as expressly provided in this Section
5.6; (ii) retain all rights with respect to insurance that Section 11 of the
Facility Lease and Schedule 5.31 of the Participation Agreement specifically
confers upon the Owner Lessor and to waive any failure by the Facility Lessee
to maintain the insurance required by Section 11 of the Facility Lease before
or after the fact so long as the insurance maintained by the Facility Lessee
still conforms to Prudent Industry Practice; (iii) retain all rights to adjust
Periodic Rent and Termination Value as provided in Section 3.4 of the Facility
Lease, Section 12 of the Participation Agreement or the Tax Indemnity
Agreement; provided, however, that after giving effect to any such adjustment
(x) the amount of Periodic Rent payable on each Rent Payment Date shall be at
least equal to the aggregate amount of all principal and accrued interest
payable on such Rent Payment Date on all Lessor Notes then outstanding and (y)
Termination Value shall in no event be less (when added to all other amounts
required to be paid by the Facility Lessee in respect of any early termination
of the Facility Lease) than an amount sufficient, as of the date of payment, to
pay in full the principal of, and interest on all Lessor Notes outstanding on
and as of such date of payment; (iv) except in connection with the exercise of
remedies pursuant to the Facility Lease, retain all rights to exercise the
Owner Lessor's rights relating to the Appraisal Procedure and to confer and
agree with the Facility Lessee on Fair Market Rental Value, or any Renewal
Lease Term; and (v) retain the right to declare the Facility Lease to be in
default with respect to any Excepted Payment pursuant to Section 17 of the
Facility Lease.

     (b)  The Owner Lessor shall have the right, together with or independently
of the Indenture Trustee, (i) to receive from the Facility Lessee and the
Guarantor all notices, certificates, reports, filings, opinions of counsel and
other documents and all information that the Facility Lessee is permitted or
required to give or furnish to the Owner Lessor or the Owner Participant, as
the case may be, pursuant to the Facility Lease or any other Operative
Document; (ii) to inspect the Facility and the records relating thereto
pursuant to Section 12 of the Facility Lease; (iii) to provide such insurance
as may be permitted by Section 11 of the Facility Lease; (iv) to provide
notices to the Facility Lessee or the Guarantor to the extent otherwise
permitted by the Operative Documents; and (v) to perform for the Facility
Lessee as provided in Section 20 of the Facility Lease.

     (c)  So long as the Lessor Notes have not been accelerated pursuant to
Section 4.3(a) hereof (or, if accelerated, such acceleration has theretofore
been rescinded) or the Indenture Trustee shall not have exercised any of its
rights pursuant

                                       51
<PAGE>
to Section 4 hereof to take possession of, foreclose, sell or otherwise take
control of all or any part of the Indenture Estate, the Owner Lessor shall
retain the right to the exclusion of the Indenture Trustee to exercise the
rights of the Owner Lessor under, and to determine compliance by the Facility
Lessee with, the provisions of Sections 10 (other than Section 10.3 thereof),
13, 14 and 15 of the Facility Lease; provided, however, that if a Lease
Indenture Event of Default shall have occurred and be continuing, the Owner
Lessor shall cease to retain such rights upon notice from the Indenture Trustee
stating that such rights shall no longer be retained by the Owner Lessor;

     (d) Except as expressly provided in this Section 5.6, so long as the
Lessor Notes have not been accelerated pursuant to Section 4.3(a) hereof (or,
if accelerated, such acceleration has theretofore been rescinded) or the
Indenture Trustee shall not have exercised any of its rights pursuant to
Section 4 hereof to take possession of, foreclose, sell or otherwise take
control of all or any part of the Indenture Estate, the Owner Lessor shall have
the right, to be exercised jointly with the Indenture Trustee, (i) to exercise
the rights with respect to the Facility Lessee's use and operation,
modification or maintenance of the Undivided Interest, (ii) to exercise the
Owner Lessor's right under Section 13.1 of the Participation Agreement to
withhold or grant its consent to an assignment by the Facility Lessee of its
rights under the Facility Lease, and (iii) to exercise the rights of the Owner
Lessor under Section 10.3 of the Facility Lease; provided, however, that if a
Lease Indenture Event of Default shall have occurred and be continuing, the
Owner Lessor shall cease to exercise such rights under this clause (iii) upon
notice from the Indenture Trustee stating that such rights shall no longer be
retained by the Owner Lessor; provided further, however, that (A) the Owner
Lessor shall have no right to receive any Periodic Rent or other payments other
than Excepted Payments payable to the Owner Lessor, or the Owner Participant
and (B) no determination by the Owner Lessor or the Indenture Trustee that the
Facility Lessee is in compliance with the provisions of any applicable Assigned
Document shall be binding upon or otherwise affect the rights hereunder of the
Indenture Trustee or any Noteholder on the one hand or the Owner Lessor or the
Owner Participant on the other hand;

     (e) So long as the Lessor Notes have not been accelerated pursuant to
Section 4.3(a) hereof and the Indenture Trustee shall not have exercised any of
its rights pursuant to Section 4 hereof to take possession of, foreclose, sell
or otherwise take control of all or any part of the Indenture Estate, the Owner
Lessor shall have the right, together with the Indenture Trustee and to the
extent permitted by the Operative Documents and Applicable Law, to seek
specific performance of the covenants of the

                                       52
<PAGE>
Facility Lessee under the Operative Documents relating to the protection,
insurance, maintenance, possession, use and return of the Property Interest;
and

     (f) Nothing in this Indenture shall give to, or create in, or otherwise
provide the benefit of to, the Indenture Trustee, any rights of the Owner
Participant under or pursuant to the Tax Indemnity Agreement or any other
Operative Document and nothing in this Section 5.6 or elsewhere in this
Indenture shall give to the Owner Lessor the right to exercise any rights
specifically given to the Indenture Trustee pursuant to any Operative Document;
and nothing in this Indenture shall give to, or create in, the Indenture
Trustee the right to, and the Indenture Trustee shall not, release the
Guarantor of its obligations under the Calpine Guaranty in respect of payment
of the Equity Portion of Termination Value, unpaid amounts of the Equity
Portion of Periodic Rent (and all amounts of overdue interest relating to such
amount) and other amounts constituting Excepted Payments, unless such release
results in payment in full to the Owner Lessor of all such unpaid amounts as
certified to the Indenture Trustee by the Owner Lessor, and all claims of the
Noteholders;

but nothing in clauses (a) through (f) above shall deprive the Indenture
Trustee of the exclusive right, so long as this Indenture shall be in effect,
to declare the Facility Lease to be in default under Section 16 thereof and
thereafter to exercise the remedies pursuant to Section 17 of the Facility
Lease (except as expressly set forth in the proviso of Section 5.6(b)).

     Section 5.7.  Restrictions on Dealing with Indenture Estate. Except as
provided in the Operative Documents, but subject to the terms of this
Indenture, the Owner Lessor shall not use, operate, store, lease, control,
manage, sell, dispose of or otherwise deal with the Facility, the Facility
Site, any part of the Facility Site or any other part of the Indenture Estate.

     Section 5.8.  Filing of Financing Statements and Continuation Statements.
Pursuant to Section 5.10 of the Participation Agreement, the Facility Lessee
has covenanted to maintain the priority of the Lien of this Indenture on the
Indenture Estate. The Indenture Trustee shall, at the written request and
expense of the Facility Lessee, as provided in the Participation Agreement,
execute and deliver to the Facility Lessee and the Facility Lessee will file,
if not already filed, such financing statements or other documents and such
continuation statements or other documents with respect to financing statements
or other documents previously filed relating to the Lien created by this
Indenture in the Indenture Estate as may be supplied to the Indenture Trustee
by the Facility Lessee. At any time and from time to time, upon the request of
the Facility

                                       53
<PAGE>
Lessee or the Indenture Trustee, at the expense of the Facility Lessee (and
upon receipt of the form of document so to be executed), the Owner Lessor shall
promptly and duly execute and deliver any and all such further instruments and
documents as the Facility Lessee or the Indenture Trustee may request in
obtaining the full benefits of the security interest and assignment created or
intended to be created hereby and of the rights and powers herein granted.
Upon the reasonable instructions (which instructions shall be accompanied by
the form of document to be filed) at any time and from time to time of the
Facility Lessee or the Indenture Trustee, the Owner Lessor shall execute and
file any financing statement (and any continuation statement with respect to
any such financing statement), and any other document relating to the security
interest and assignment created by this Indenture as may be specified in such
instructions. In addition, the Indenture Trustee and the Owner Lessor will
execute such continuation statements with respect to financing statements and
other documents relating to the Lien created by this Indenture in the Indenture
Estate as may be specified from time to time in written instructions of any
Noteholder (which instructions may, by their terms, be operative only at a
future date and which shall be accompanied by the form of such continuation
statement or other document to be filed). Neither the Indenture Trustee nor,
except as otherwise herein expressly provided, the Owner Lessor shall have
responsibility for the protection, perfection or preservation of the Lien
created by this Indenture.

                                  SECTION 6.
                     INDENTURE TRUSTEE AND OWNER LESSOR

     Section 6.1.  Acceptance of Trusts and Duties. The Indenture Trustee
accepts the trusts hereby created and applicable to it and agrees to perform
the same but only upon the terms of this Indenture, and agrees to receive and
disburse all moneys constituting part of the Indenture Estate in accordance
with the provisions hereof. If any Lease Indenture Event of Default shall have
occurred and be continuing, the Indenture Trustee shall, subject to the
provisions of Sections 4 and 5 hereof, exercise such of the rights and remedies
vested in it by this Indenture and shall at all times use the same degree of
care in their exercise as a prudent person would exercise or use in the
circumstances in the conduct of its own affairs. The Indenture Trustee shall
not be liable under any circumstances, except (a) for its own negligence or
willful misconduct, (b) in the case of any inaccuracy of any representation or
warranty of the Indenture Trustee or the Lease Indenture Company contained in
Section 3.5 of the Participation Agreement, in the certificate delivered by the
Indenture Trustee at the Closing pursuant to Section 4.6 of the Participation
Agreement, or (c) for the performance of its obligations under Section 8 of the
Participation Agreement; and the Lease Indenture

                                       54
<PAGE>
Company and the Indenture Trustee shall not be liable for any action or
inaction of the Owner Trust; provided, however, that:

          (i) Prior to the occurrence of a Lease Indenture Event of Default of
     which a Responsible Officer of the Indenture Trustee shall have Actual
     Knowledge, and after the curing of all such Indenture Events of Default
     which may have occurred, the duties and obligations of the Indenture
     Trustee shall be determined solely by the express provisions of the
     Operative Documents to which it is a party, the Indenture Trustee shall not
     be liable except for the performance of such duties and obligations as are
     specifically set forth in the Operative Documents, no implied covenants or
     obligations shall be read into the Operative Documents against the
     Indenture Trustee and, in the absence of bad faith on the part of the
     Indenture Trustee, the Indenture Trustee may conclusively rely, as to the
     truth of the statements and the correctness of the opinions expressed
     therein, upon any notes or opinions furnished to the Indenture Trustee and
     conforming to the requirements of this Indenture;

          (ii) The Indenture Trustee shall not be liable in its individual
     capacity for an error of judgment made in good faith by a Responsible
     Officer or other officers of the Indenture Trustee, unless it shall be
     proven that the Indenture Trustee was negligent in ascertaining the
     pertinent facts;

          (iii) The Indenture Trustee shall not be liable in its individual
     capacity with respect to any action taken, suffered or omitted to be taken
     by it in good faith in accordance with this Indenture or at the direction
     of the Majority in Interest of Noteholders, relating to the time, method
     and place of conducting any proceeding or remedy available to the Indenture
     Trustee, or exercising or omitting to exercise any trust or power conferred
     upon the Indenture Trustee, under this Indenture;

          (iv) The Indenture Trustee shall not be required to take notice or be
     deemed to have notice or knowledge of any default, Lease Event of Default,
     Significant Lease Default or Lease Indenture Event of Default (except for a
     Lease Indenture Event of Default resulting from an event of nonpayment)
     unless a Responsible Officer of the Indenture Trustee shall have received
     written notice thereof. In the absence of receipt of such notice, the
     Indenture Trustee may conclusively assume that there is no default or Lease
     Indenture Event of Default;

                                       55
<PAGE>
          (v) The Indenture Trustee shall not be required to expend or risk its
     own funds or otherwise incur financial liability for the performance of any
     of its duties hereunder or the exercise of any of its rights or powers if
     there is reasonable ground for believing that the repayment of such funds
     or adequate indemnity against such risk or liability is not reasonably
     assured to it, and none of the provisions contained in this Indenture shall
     in any event require the Indenture Trustee to perform, or be responsible
     for the manner of performance of, any of the obligations of the Owner
     Lessor, under this Indenture; and

          (vi) The right of the Indenture Trustee to perform any discretionary
     act enumerated in this Indenture shall not be construed as a duty, and the
     Indenture Trustee shall not be answerable for other than its negligence or
     willful misconduct in the performance of such act.

     Section 6.2.  Absence of Certain Duties. Except in accordance with
written instructions furnished pursuant to Section 5.2 hereof and except as
provided in Section 5.5 and 5.8 hereof, the Indenture Trustee shall have no
duty (a) to see to any registration, recording or filing of any Operative
Document (or any financing or continuation statements in respect thereto) or to
see to the maintenance of any such registration, recording or filing, (b) to
see to any insurance on the Facilities or the Facilities or to effect or
maintain any such insurance, (c) except as otherwise provided in Section 5.5
hereof or in Section 10 of the Participation Agreement, to see to the payment
or discharge of any Tax or any Lien of any kind owing with respect to, or
assessed or levied against, any part of the Indenture Estate, (d) to confirm or
verify the contents of any report, notice, request, demand, certificate,
financial statement or other instrument of the Facility Lessee, (e) to inspect
the Facility at any time or ascertain or inquire as to the performance or
observance of any of the Facility Lessee's covenants with respect to the
Facility or (f) to exercise any of the trusts or powers vested in it by this
Indenture or to institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of the Noteholders,
pursuant to the provisions of this Indenture, unless such Noteholders shall
have offered to the Indenture Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein or thereby
(which in the case of the Majority in Interest of Noteholders will be deemed to
be satisfied by a letter agreement with respect to such costs from such
Majority in Interest of Noteholders). Notwithstanding the foregoing, the
Indenture Trustee shall furnish to each Noteholder and to the Owner Lessor and
the Owner Participant promptly upon receipt thereof duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
other instruments furnished to the Indenture Trustee hereunder or under any of
the Operative Documents

                                       56
<PAGE>
unless the Indenture Trustee shall reasonably believe that each such
Noteholder, the Owner Lessor and the Owner Participant shall have received
copies thereof.

     Section 6.3.  Representations and Warranties.

     (a)  The Owner Lessor represents and warrants that it has not assigned or
pledged any of its estate, right, title or interest subject to this Indenture,
to anyone other than the Indenture Trustee.

     (b)  NEITHER THE OWNER LESSOR NOR THE INDENTURE TRUSTEE MAKES, NOR SHALL BE
DEEMED TO HAVE MADE (i) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS
TO THE TITLE, VALUE, COMPLIANCE WITH PLANS OR SPECIFICATIONS, QUALITY,
DURABILITY, SUITABILITY, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR
FITNESS FOR USE OR FOR ANY PARTICULAR PURPOSE OF THE FACILITY, OR ANY PART
THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR
IMPLIED, WITH RESPECT TO THE FACILITIES OR ANY OTHER PART OF THE INDENTURE
ESTATE, except that the Owner Lessor represents and warrants that on the
Closing Date it shall have received whatever title or interest to the Undivided
Interests and the Facility Site as were conveyed to it by the Facility Lessee
and that on the Closing Date the Undivided Interests shall be free of Owner
Lessor's Liens and the Owner Participant's Liens; or (ii) any representation or
warranty as to the validity, legality or enforceability of this Indenture, the
Lessor Notes or any of the other Operative Documents, or as to the correctness
of any statement contained in any thereof, except that each of the Owner Lessor
and the Indenture Trustee represents and warrants that this Indenture and the
Participation Agreement have been, and, in the case of the Owner Lessor, the
other Operative Documents to which it is or is to become a party have been or
will be, executed and delivered by one of its officers who is and will be duly
authorized to execute and deliver such document on its behalf.

     Section 6.4.  No Segregation of Moneys; No Interest. All moneys and
securities deposited with and held by the Indenture Trustee under this
Indenture for the purpose of paying, or securing the payment of, the principal
of or Make-Whole Amount or interest on the Lessor Notes shall be held in trust.
Except as specifically provided herein or in the Facility Lease, any moneys
received by the Indenture Trustee hereunder need not be segregated in any
manner except to the extent required by Applicable Law and may be deposited
under such general conditions as may be prescribed by Applicable Law, and
neither the Owner Lessor nor the Indenture Trustee shall be liable for any

                                       57
<PAGE>
interest thereon; provided, however, subject to Section 6.5 hereof, that any
payments received or applied hereunder by the Indenture Trustee shall be
accounted for by the Indenture Trustee so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof to the
extent known to the Indenture Trustee.

     Section 6.5.  Reliance; Agents; Advice of Experts. The Indenture Trustee
shall be authorized and protected and incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed to be
genuine and believed to be signed by the proper party or parties. The
Indenture Trustee may accept in good faith a certified copy of a resolution of
the managing member (or equivalent body) of the Facility Lessee as conclusive
evidence that such resolution has been duly adopted by such Board and that the
same is in full force and effect. As to the amount of any payment to which any
Noteholder is entitled pursuant to clause "Third" of Section 3.2 or clause
"Fourth" of Section 3.3 hereof, and as to the amount of any payment to which
any other Person is entitled pursuant to Section 3.5 or Section 3.7 hereof, the
Indenture Trustee for all purposes hereof may rely on and shall be authorized
and protected in acting or refraining from acting upon an Officer's Certificate
of such Noteholder or other Person, as the case may be. As to any fact or
matter the manner of ascertainment of which is not specifically described
herein, the Indenture Trustee for all purposes hereof may rely on an Officer's
Certificate of the Owner Lessor or the Facility Lessee or a Noteholder as to
such fact or matter, and such certificate shall constitute full protection to
the Indenture Trustee for any action taken or omitted to be taken by it in good
faith in reliance thereon. The Indenture Trustee shall have the right to
request instructions from the Owner Lessor or the Majority in Interest of
Noteholders with respect to taking or refraining from taking any action in
connection with the Lease Indenture or any other Operative Document to which it
is a party, and shall be entitled to act or refrain from taking such action
unless and until the Indenture Trustee shall have received written instructions
from the Owner Lessor or the Majority in Interest of Noteholders, and the
Indenture Trustee shall not incur liability by reason of so acting (except as
provided in Section 6.1) or refraining from acting. In the administration of
the trusts hereunder, the Indenture Trustee may execute any of the trusts or
powers hereof and perform its powers and duties hereunder directly or through
agents or attorneys and may, at the expense of the Indenture Estate (but
subject to the priorities of payment set forth in Section 3 hereof), consult
with independent skilled Persons to be selected and retained by it (other than
Persons regularly in its employ) as to matters within their particular
competence, and the Indenture Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the advice or
opinion, within such Person's area of

                                       58
<PAGE>
competence, of any such Person, so long as the Indenture Trustee shall have
exercised reasonable care in selecting such Person.

                                   SECTION 7.
                          SUCCESSOR INDENTURE TRUSTEES
                             AND SEPARATE TRUSTEES

     Section 7.1.  Resignation or Removal of the Indenture Trustee; Appointment
of Successor.

     (a) Resignation or Removal. Either of the Indenture Trustee or the
Account Bank or any successor thereto may resign at any time with or without
cause by giving at least thirty (30) days' prior written notice to the Owner
Lessor, the Owner Participant, the Facility Lessee and each Noteholder, such
resignation to be effective on the acceptance of appointment by the successor
Indenture Trustee or Account Bank pursuant to the provisions of subsection (b)
below. In addition, a Majority in Interest of Noteholders may at any time
remove the Indenture Trustee or the Account Bank with or without cause by an
instrument in writing delivered to the Owner Lessor, the Owner Participant, the
Indenture Trustee and the Account Bank, and the Owner Lessor shall give prompt
written notification thereof to each Noteholder and the Facility Lessee. Such
removal will be effective on the acceptance of appointment by the successor
Indenture Trustee or Account Bank pursuant to the provisions of subsection (b)
below. In the case of the resignation or removal of the Indenture Trustee or
Account Bank, a Majority in Interest of Noteholders may appoint a successor
Indenture Trustee or Account Bank by an instrument signed by such holders. If
a successor Indenture Trustee or Account Bank shall not have been appointed
within thirty (30) days after such resignation or removal, the Indenture
Trustee, Account Bank or any Noteholder may apply to any court of competent
jurisdiction to appoint a successor Indenture Trustee or Account Bank to act
until such time, if any, as a successor shall have been appointed by a Majority
in Interest of Noteholders as above provided. The successor Indenture Trustee
or Account Bank so appointed by such court shall immediately and without
further act be superseded by any successor Indenture Trustee or Account Bank
appointed by a Majority in Interest of Noteholders as above provided.

     (b) Acceptance of Appointment. Any successor Indenture Trustee or Account
Bank shall execute and deliver to the predecessor Indenture Trustee or Account
Bank, the Owner Participant, the Owner Lessor and all Noteholders an instrument
accepting such appointment and thereupon such successor Indenture Trustee or
Account Bank, without further act, shall become vested with all the estates,
properties, rights,

                                       59
<PAGE>
powers and duties of the predecessor Indenture Trustee or Account Bank
hereunder in the trusts hereunder applicable to it with like effect as if
originally named the Indenture Trustee or Account Bank herein; but
nevertheless, upon the written request of such successor Indenture Trustee or
Account Bank or a Majority in Interest of Noteholders, such predecessor
Indenture Trustee or Account Bank shall execute and deliver an instrument
transferring to such successor Indenture Trustee or Account Bank, upon the
trusts herein expressed applicable to it, all the estates, properties, rights
and powers of such predecessor Indenture Trustee or Account Bank, and such
predecessor Indenture Trustee or Account Bank shall duly assign, transfer
deliver and pay over to such successor Indenture Trustee all moneys or other
property then held by such predecessor Indenture Trustee or Account Bank
hereunder. To the extent required by Applicable Law or upon request of the
successor Indenture Trustee or Account Bank, the Owner Lessor shall execute any
and all documents confirming the vesting of such estates, properties, rights
and powers in the successor Indenture Trustee or Account Bank.

     (c) Qualifications. Any successor Indenture Trustee or Account Bank,
however appointed, shall be a trust company or bank with trust powers (i) which
(A) has a combined capital and surplus of at least $150,000,000, or (B) is a
direct or indirect subsidiary of a corporation which has a combined capital and
surplus of at least $150,000,000 provided such corporation guarantees the
performance of the obligations of such trust company or bank as Indenture
Trustee or Account Bank, or (C) is a member of a bank holding company group
having a combined capital and surplus of at least $150,000,000 provided the
parent of such bank holding company group or a member which itself has a
combined capital and surplus of at least $150,000,000 guarantees the
performance of the obligations of such trust company or bank, and (ii) is
willing, able and legally qualified to perform the duties of Indenture Trustee
or Account Bank hereunder upon reasonable or customary terms. No successor
Indenture Trustee or Account Bank, however appointed, shall become such if such
appointment would result in the violation of any Applicable Law or create a
conflict or relationship involving a conflict of interest under the Trust
Indenture Act of 1939, as amended.

     (d) Appointment of Account Bank. The Indenture Trustee and each
Noteholder hereby irrevocably designate and appoint State Street Trust Bank and
Trust Company of Connecticut, National Association as the Account Bank under
this Indenture (the "Account Bank"). The Account Bank hereby agrees to act as
"securities intermediary" (within the meaning of Section 8-102(a)(14) of the
UCC) with respect to the Indenture Trustee's Account. The Owner Lessor hereby
acknowledges that the Account Bank shall act as securities intermediary with
respect to the Indenture Trustee's Account pursuant to this Indenture. The
Account Bank shall not have duties or

                                       60
<PAGE>
responsibilities except those expressly set forth in Sections 3.11 and 3.12 of
this Indenture. The Indenture Trustee, at the written direction of a Majority
in Interest of Noteholders, may remove and replace the Account Bank pursuant to
the terms of Section 7.1(a) and direct such Account Bank according to the terms
of this Indenture.

     (e) Merger, etc. Any Person into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Indenture
Trustee shall be a party, or any Person to which substantially all the
corporate trust business of the Indenture Trustee may be transferred, shall,
subject to the terms of subsection (c) of this Section 7.1, be the Indenture
Trustee under this Indenture without further act.

     Section 7.2.  Appointment of Additional and Separate Trustees.

     (a)  Appointment. Whenever (i) the Indenture Trustee shall deem it
necessary or prudent in order to conform to any law of any applicable
jurisdiction or to make any claim or bring any suit with respect to or in
connection with the Indenture Estate, this Indenture, the Facility Lease, the
Lessor Notes or any of the transactions contemplated by the Operative
Documents, (ii) the Indenture Trustee shall be advised by counsel, satisfactory
to it, that it is so necessary or prudent in the interest of the Noteholders or
(iii) a Majority in Interest of Noteholders deems it so necessary or prudent
and shall have requested in writing the Indenture Trustee to do so, then in any
such case the Indenture Trustee shall execute and deliver from time to time all
instruments and agreements necessary or proper to constitute another bank or
trust company or one or more Persons approved by the Indenture Trustee either
to act as additional trustee or trustees of all or any part of the Indenture
Estate, jointly with the Indenture Trustee, or to act as separate trustee or
trustees of all or any part of the Indenture Estate, in any such case with such
powers as may be provided in such instruments or agreements, and to vest in
such bank, trust company or Person as such additional trustee or separate
trustee, as the case may be, any property, title, right or power of the
Indenture Trustee deemed necessary or advisable by the Indenture Trustee,
subject to the remaining provisions of this Section 7.2. The Owner Lessor
hereby consents to all actions taken by the Indenture Trustee under the
provisions of this Section 7.2 and agrees, upon the Indenture Trustee's
request, to join in and execute, acknowledge and deliver any or all such
instruments or agreements; and the Owner Lessor hereby makes, constitutes and
appoints the Indenture Trustee its agent and attorney-in-fact for it and in its
name, place and stead to execute, acknowledge and deliver any such instrument
or agreement in the event that the Owner Lessor shall not itself execute and
deliver the same within fifteen (15) days after receipt by it of such

                                       61
<PAGE>
request so to do; provided, however, that the Indenture Trustee shall exercise
due care in selecting any additional or separate trustee if such additional or
separate trustee shall not be a Person possessing trust powers under Applicable
Law. If at any time the Indenture Trustee shall deem it no longer necessary or
prudent in order to conform to any such law or take any such action or shall be
advised by such counsel that it is no longer so necessary or prudent in the
interest of the Noteholders or in the event that the Indenture Trustee shall
have been requested to do so in writing by a Majority in Interest of
Noteholders, the Indenture Trustee shall execute and deliver all instruments
and agreements necessary or proper to remove any additional trustee or separate
trustee. In such connection, the Indenture Trustee may act on behalf of the
Owner Lessor to the same extent as is provided above. Notwithstanding anything
contained to the contrary in this Section 7.2(a), to the extent the laws of any
jurisdiction preclude the Indenture Trustee from taking any action hereunder
either alone, jointly or through a separate trustee under the direction and
control of the Indenture Trustee, the Owner Lessor, at the instruction of the
Indenture Trustee, shall appoint a separate trustee for such jurisdiction,
which separate trustee shall have full power and authority to take all action
hereunder as to matters relating to such jurisdiction without the consent of
the Indenture Trustee, but not subject to the same limitations in any exercise
of his power and authority as those to which the Indenture Trustee is subject.

     (b) The Indenture Trustee as Agent. Any additional trustee or separate
trustee at any time by an instrument in writing may constitute the Indenture
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by Applicable Law, to do all acts and things and exercise
all discretions which it is authorized or permitted to do or exercise, for and
in its behalf and in its name. In case any such additional trustee or separate
trustee shall become incapable of acting or cease to be such additional trustee
or separate trustee, the property, rights, powers, trusts, duties and
obligations of such additional trustee or separate trustee, as the case may be,
so far as permitted by Applicable Law, shall vest in and be exercised by the
Indenture Trustee, without the appointment of a new successor to such
additional trustee or separate trustee, unless and until a successor is
appointed in the manner hereinbefore provided.

     (c) Requests, etc. Any request, approval or consent in writing by the
Indenture Trustee to any additional trustee or separate trustee shall be
sufficient to warrant such additional trustee or separate trustee, as the case
may be, to take the requested, approved or consented to action.

                                       62
<PAGE>
     (d) Subject to Indenture, etc. Each additional trustee and separate
trustee appointed pursuant to this Section 7.2 shall be subject to, and shall
have the benefit of Sections 3 through 9 hereof insofar as they apply to the
Indenture Trustee. Notwithstanding any other provision of this Section 7.2,
(i) the powers, duties, obligations and rights of any additional trustee or
separate trustee appointed pursuant to this Section 7.2 shall not in any case
exceed those of the Indenture Trustee hereunder, (ii) all powers, duties,
obligations and rights conferred upon the Indenture Trustee in respect of the
receipt, custody, investment and payment of moneys or the investment of moneys
shall be exercised solely by the Indenture Trustee and (iii) no power hereby
given to, or exercisable as provided herein by, any such additional trustee or
separate trustee shall be exercised hereunder by such additional trustee or
separate trustee except jointly with, or with the consent of, the Indenture
Trustee.

                                  SECTION 8.
                 SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
                             AND OTHER DOCUMENTS

     Section 8.1.  Supplemental Indenture and Other Amendment With Consent;
Conditions and Limitations. At any time and from time to time, subject to
Sections 8.2 and 8.3 hereof, but only upon the written direction of a Majority
in Interest of Noteholders and the written consent of the Owner Lessor, (a) the
Indenture Trustee shall execute an amendment or supplement hereto for the
purpose of adding provisions to, or changing or eliminating provisions of, this
Indenture as specified in such request, and (b) the Indenture Trustee, as the
case may be, shall enter into or consent to such written amendment of or
supplement to any Assigned Document as each other party thereto may agree to
and as may be specified in such request, or execute and deliver such written
waiver or modification of or consent to the terms of any such agreement or
document as may be specified in such request; provided, however, that without
the consent of the Noteholders representing one hundred percent (100%) of the
outstanding principal amount of the Lessor Notes, such percentage to be
determined in the same manner as provided in the definition of the term
"Majority in Interest of Noteholders," no such supplement to or amendment of
this Indenture or any Assigned Document, or waiver or modification of or
consent to the terms hereof or thereof, shall (i) modify the definition of the
terms "Majority in Interest of Noteholders" or reduce the percentage of
Noteholders required to take or approve any action hereunder, (ii) change the
amount or the time of payment of any amount owing or payable under any Lessor
Note or change the rate or manner of calculation of interest payable on any
Lessor Note, (iii) alter or modify the provisions of Section 3 hereof with
respect to the manner of payment or the order of priorities in which
distributions thereunder shall be made as

                                       63
<PAGE>
between the Noteholders and the Owner Lessor, (iv) reduce the amount (except to
any amount as shall be sufficient to pay the aggregate principal of, Make-Whole
Amount, if any, and interest on all outstanding Lessor Notes) or extend the
time of payment of Periodic Rent or Termination Value except as expressly
provided in Section 3.5 of the Facility Lease, or change any of the
circumstances under which Periodic Rent or Termination Value is payable, (v)
consent to any assignment of the Facility Lease if in connection therewith the
Facility Lessee will be released from its obligation to pay Periodic Rent and
Termination Value, except as expressly provided in Section 13 of the
Participation Agreement, or release the Facility Lessee of its obligation to
pay Periodic Rent or Termination Value or change the absolute and unconditional
character of such obligations as set forth in Section 9 of the Facility Lease;
(vi) consent to any release of the Guarantor under Section 8.4 of the Calpine
Guaranty or (vii) deprive the Indenture Trustee of the Lien on the Indenture
Estate or permit the creation of any Lien on the Indenture Estate ranking
equally or prior to the Lien of the Indenture Trustee, except for Permitted
Liens.

     Section 8.2.  Supplemental Indentures and other Amendments Without
Consent. Without the consent of any Noteholders but subject to the provisions
of Section 8.3, and only after notice thereof shall have been sent to the
Noteholders and with the consent of the Owner Lessor, the Indenture Trustee
shall enter into any indenture or indentures supplemental hereto or execute any
amendment, modification, supplement, waiver or consent with respect to any
other Operative Document (a) to evidence the succession of another Person as a
Lessor Manager or the appointment of a co-manager in accordance with the terms
of the LLC Agreement, or to evidence the succession of a successor as the
Indenture Trustee hereunder, the removal of the Indenture Trustee or the
appointment of any separate or additional trustee or trustees, in each case if
done pursuant to the provisions of Section 7 hereof and to define the rights,
powers, duties and obligations conferred upon any such separate trustee or
trustees or co-trustee or co-trustees, (b) to correct, confirm or amplify the
description of any property at any time subject to the Lien of this Indenture
or to convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee, (c) to provide for any evidence of the creation and issuance
of any Additional Lessor Notes pursuant to, and subject to the conditions of,
Section 2.12 and to establish the form and the terms of such Additional Lessor
Notes, (d) to cure any ambiguity in, to correct or supplement any defective or
inconsistent provision of, or to add to or modify any other provisions and
agreements in, this Indenture or any other Operative Document in any manner
that will not in the judgment of the Indenture Trustee materially adversely
affect the interests of the Noteholders, (e) to grant or confer upon the
Indenture Trustee for the benefit of the Noteholders any additional rights,
remedies, powers, authority or security which may

                                       64
<PAGE>
be lawfully granted or conferred and which are not contrary or inconsistent
with this Indenture, (f) to add to the covenants or agreements to be observed
by the Facility Lessee or the Owner Lessor and which are not contrary to this
Indenture, to add Indenture Events of Defaults for the benefit of Noteholders
or surrender any right or power of the Owner Lessor, provided it has consented
thereto, (g) to effect the assumption of all or, to the extent otherwise
provided hereunder, part of the Lessor Notes by the Facility Lessee, provided
that the supplemental indenture will contain all of the covenants applicable to
the Facility Lessee contained in the Facility Lease and the Participation
Agreement for the benefit of the Indenture Trustees or the holders of such
Lessor Notes, such that the Facility Lessee's obligations contained therein, if
applicable in the event that the Facility Lease are terminated, will continue
to be in full force and effect, (h) to comply with requirements of the SEC, any
applicable law, rules or regulations of any exchange or quotation system on
which the Certificates are listed, or any regulatory body, (i) to modify,
eliminate or add to the provisions of any Operative Documents to such extent as
shall be necessary to qualify or continue the qualification of this Lease
Indenture or the Pass Through Trust Agreements (including any supplements
thereto) under the Trust Indenture Act, or similar federal statute enacted
after the Closing Date, and to add to this Indenture such other provisions as
may be expressly required or permitted by the Trust Indenture Act of 1939 (if
such qualification is required), and (j) to effect any indenture or indentures
supplemental hereto or any amendment, modification, supplement, waiver or
consent with respect to any other Operative Document, provided such
supplemental indenture, amendment, modification, supplement, waiver or consent
shall not reasonably be expected to materially and adversely affect the
interest of the Noteholders; provided, however, that no such amendment,
modification, supplement, waiver or consent contemplated by this Section 8.2
shall, without the consent of the holder of each then outstanding Lessor Note,
cause any of the events specified in clauses (i) through (v) of the first
sentence of Section 8.1 hereof to occur; and provided, further, that no such
amendment, modification, supplement, waiver or consent contemplated by this
Section 8.2 shall, without the consent of the holder of a Majority in Interest
of Noteholders, modify the provisions of Sections 5.1, 5.2, 5.6, 5.14, 5.31, 6,
or 13.1 of the Participation Agreement or Section 19 of the Lease, or modify in
any material respect the provisions of the Calpine Guaranty (other than, in
each case, any amendment, modification, supplement, waiver or consent having no
adverse affect on the interest of the Noteholders).

     Section 8.3.  Conditions to Action by the Indenture Trustee. If in the
opinion of the Indenture Trustee any document required to be executed pursuant
to the terms of Section 8.1 or 8.2 or the election referred to in Section 9.13
hereof adversely affects any immunity or indemnity in favor of the Indenture
Trustee under this Indenture or the

                                       65
<PAGE>
Participation Agreement, or would materially increase its administrative duties
or responsibilities hereunder or thereunder or may result in personal liability
for it (unless it shall have been provided an indemnity satisfactory to the
Indenture Trustee), the Indenture Trustee may in its discretion decline to
execute such document or the election. With every such document and election,
the Indenture Trustee shall be furnished with evidence that all necessary
consents have been obtained and with an opinion of counsel that such document
complies with the provisions of this Indenture, does not deprive the Indenture
Trustee or the holders of the Lessor Notes of the benefits of the Lien hereby
created on any property subject hereto or of the assignments contained herein
(except as otherwise consented to in accordance with Section 8.1 hereof) and
that all consents required by the terms hereof in connection with the execution
of such document or the making of such election have been obtained. The
Indenture Trustee shall be fully authorized and protected in relying on such
opinion.

                                  SECTION 9.
                                MISCELLANEOUS

     Section 9.1.  Surrender, Defeasance and Release.

     (a) Surrender and Cancellation of Indenture. This Indenture shall be
surrendered and cancelled and the trusts created hereby shall terminate and
this Indenture shall be of no further force or effect upon satisfaction of the
conditions set forth in the proviso to the Granting Clause hereof. Upon any
such surrender, cancellation, and termination, the Indenture Trustee shall pay
all moneys or other properties or proceeds constituting part of the Indenture
Estate (the distribution of which is not otherwise provided for herein) to the
Owner Lessor, and the Indenture Trustee shall, upon request and at the cost and
expense of the Owner Lessor, execute and deliver proper instruments
acknowledging such cancellation and termination and evidencing the release of
the security, rights and interests created hereby. If this Indenture is
terminated pursuant to this Section 9.1(a), the Indenture Trustee shall
promptly notify the Facility Lessee and the Owner Participant of such
termination.

     (b) Release.

          (i) Whenever a Component is replaced pursuant to the Facility Lease,
     such component shall automatically and without further act of any Person be
     released from the Lien of this Lease Indenture and the Indenture Trustee
     shall, upon the written request of the Owner Lessor or the Facility Lessee,
     execute and deliver to, and as directed in writing by, the Facility Lessee
     or the

                                       66
<PAGE>
     Owner Lessor an appropriate instrument (in due form for recording)
     releasing the replaced Component from the Lien of this Indenture.

          (ii) Whenever the Facility Lessee is entitled to acquire the Facility
     or have the Facility transferred to it pursuant to the express terms of the
     Facility Lease, the Indenture Trustee shall release the Indenture Estate
     from the Lien of this Indenture and execute and deliver to, or as directed
     in writing by, the Facility Lessee or the Owner Lessor an appropriate
     instrument (in due form for recording) releasing the Indenture Estate from
     the Lien of this Indenture; provided that all sums secured by this
     Indenture have been paid to the Persons entitled to such sums.

     Section 9.2.  Conveyances Pursuant to the Site Sublease. Sales, grants of
leases or easements and conveyances of portions of the Facility Site, rights of
way, easements or leasehold interest made by the Facility Lessee in accordance
with Article VIII of the Facility Site Sublease shall automatically, without
further act of any Person, be released from this Lease Indenture.

     Section 9.3.  Appointment of the Indenture Trustee as Attorney; Further
Assurances. The Owner Lessor hereby constitutes the Indenture Trustee the true
and lawful attorney of the Owner Lessor irrevocably with full power as long as
the Lease Indenture is in effect (in the name of the Owner Lessor or otherwise)
to ask, require, demand, receive, compound and give acquittance for any and all
moneys and claims for moneys due and to become due under or arising out of the
Assigned Documents (except to the extent that such moneys and claims constitute
Excepted Payments), to endorse any checks or other instruments or orders in
connection therewith, to make all such demands and to give all such notices as
are permitted by the terms of the Facility Lease to be made or given by the
Owner Lessor upon the occurrence and continuance of a Lease Event of Default,
to enforce compliance by the Facility Lessee with all terms and provisions of
the Facility Lease (except as otherwise provided in Sections 4.3 and 5.6
hereof), and to file any claims or take any action or institute any proceedings
which the Indenture Trustee may request in the premises.

     Section 9.4.  Indenture for Benefit of Certain Persons Only. Nothing in
this Indenture, whether express or implied, shall be construed to give to any
Person other than the parties hereto, the Owner Participant, the Facility
Lessee (with respect to Sections 4.12 and 8.1 hereof) and the Noteholders (and
any successor or assign of any thereof) any legal or equitable right, remedy or
claim under or in respect of this Indenture, and this Indenture shall be for
the sole and exclusive benefit of the parties

                                       67
<PAGE>
hereto, the Owner Participant, the Facility Lessee (as provided in Sections
4.12 and 8.1 hereof) and the Noteholders.

     Section 9.5.  Notices; Furnishing Documents, etc. Unless otherwise
expressly specified or permitted by the terms hereof, all communications and
notices provided for herein to a party hereto 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 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) and (b) above, in
each case addressed to such party and copy party at its address set forth below
or at such other address as such party or copy party may from time to time
designate by written notice to the other party:

     If to the Owner Lessor:

               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 the Owner Participant:

               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

               and

                                       68
<PAGE>
               Newcourt Capital USA Inc.
               1211 Avenue of the Americas - 22nd Floor
               New York, NY 10036
               Telephone: (212) 382-7255
               Facsimile: (212) 382-9033
               Attention:  Karen Scrowcroft, Esq.

     If to the Indenture Trustee:

               State Street Bank and Trust Company of Connecticut,
               National Association
               225 Asylum Street, Goodwin Square
               Hartford, CT 06103
               Telephone: (860) 244-1822
               Facsimile:  (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, CA 90071
               Telephone: (213) 362-7373
               Facsimile:  (213) 362-7357
               Attention:  Corporate Trust Department

     If to the Facility Lessee:

               RockGen Energy LLC
               c/o Calpine Center Northbrook Office
               Attention:  Senior Counsel
               650 Dundee Road, Suite 350
               Northbrook, IL 60062
               Telephone: (847) 559-9800
               Facsimile: (847) 559-1805

               with a copy to:

                                       69
<PAGE>
               Calpine Corporation
               Attention:  General Counsel
               50 West San Fernando Street, 5th Floor
               San Jose, CA 95113

     Section 9.6.  Severability. Any provision of this Indenture which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating or rendering unenforceable the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

     Section 9.7.  Limitation of Liability. It is expressly understood and
agreed by the parties hereto that (a) this Indenture is executed and delivered
by Wells Fargo Bank Northwest, National Association ("Wells Fargo"), not
individually or personally but solely as trustee of the Owner Lessor under the
LLC Agreement, in the exercise of the powers and authority conferred and vested
in it pursuant thereto, (b) each of the representations, undertakings and
agreements herein made on the part of the Owner Lessor is made and intended not
as personal representations, undertakings and agreements by Wells Fargo, but is
made and intended for the purpose for binding only the Owner Lessor, (c)
nothing herein contained shall be construed as creating any liability on Wells
Fargo, individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly waived by
the parties hereto or by any Person claiming by, through or under the parties
hereto and (d) under no circumstances shall Wells Fargo, be personally liable
for the payment of any indebtedness or expenses of the Owner Lessor or be
liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Owner Lessor under this Indenture.

     Section 9.8.  Written Changes Only. Subject to Sections 8.1 and 8.2
hereof, no term or provision of this Indenture or any Lessor Note may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the parties hereto; and any waiver of the terms hereof or of
any Lessor Note shall be effective only in the specific instance and for the
specific purpose given.

     Section 9.9.  Counterparts. This Indenture may be executed in separate
counterparts, each of which, when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.

                                       70
<PAGE>
     Section 9.10.  Successors and Permitted Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors and permitted assigns and
each Noteholder. Any request, notice, direction, consent, waiver or other
instrument or action by any Noteholder shall bind the successor and assigns
thereof.

     Section 9.11.  Headings and Table of Contents. The headings of the
sections of this Indenture 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.

     Section 9.12.  Governing Law. This Indenture and the Lessor Notes 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,
other than New York General Obligation Law Section 5-1401), except to the
extent mandatory choice of law rules require the application of laws of another
jurisdiction and except with respect to matters related to the enforcement of
any Lien related to the real property covered hereby or the foreclosure on any
real property covered hereby which shall be governed by the laws of the State
of Wisconsin (without giving effect to the conflicts of laws provisions
thereof). Regardless of any provision in any other agreement, for purposes of
the Uniform Commercial Code (as in effect from time to time in any jurisdiction
including the State of New York), the "Securities Intermediary's Jurisdiction"
of the Account Bank with respect to the Indenture Trustee's Account is the
State of New York.

     Section 9.13.  Reorganization Proceedings with Respect to the Lessor
Estate. If (a) the Lessor Estate becomes a debtor subject to the
reorganization provisions of Title 11 of the United States Code, or any
successor provisions, (b) pursuant to such reorganization provisions the Owner
Participant is required by reason of the Owner Participant's being held to have
recourse liability that it would not otherwise have had under Section 2.5
hereof 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 (c) any Noteholder or the Indenture Trustee actually receives
any Excess Amount (as hereinafter defined) which reflects any payment by the
Owner Participant on account of clause (b) above, then such Noteholder or the
Indenture Trustee, as the case may be, shall promptly refund such Excess
Amount, without interest, to the Owner Participant after receipt by such
Noteholder or the Indenture Trustee, as the case may be, of a written request
for such refund by the Owner Participant (which request shall specify the
amount of such Excess Amount and shall

                                       71
<PAGE>
set forth in detail the calculation thereof). For purposes of this Section
9.13, "Excess Amount" means the amount by which such payment exceeds the amount
which would have been received by such holder and the Indenture Trustee in
respect of such principal or interest if the Owner Participant had not become
subject to the recourse liability referred to in clause (b) above. Nothing
contained in this Section 9.13 shall prevent the Indenture Trustee or any
Noteholder from enforcing any personal recourse obligations (and retaining the
proceeds thereof) of the Owner Participant under the Participation Agreement.

     The Noteholders and the Indenture Trustee agree that should the Lessor
Estate become a debtor subject to the reorganization provisions of the
Bankruptcy Code, they shall upon the request of the Owner Participant, and
provided that the making of the election hereinafter referred to is permitted
to be made by them under Applicable Law and will not have any adverse impact on
any Noteholder, the Indenture Trustee or the Indenture Estate other than as
contemplated by the preceding paragraph, make the election referred to in
Section 1111(b)(1)(A)(i) of Title 11 of the Bankruptcy Code or any successor
provision if, in the absence of such election, the Noteholders would have
recourse against the Owner Participant for the payment of the indebtedness
represented by the Lessor Notes in circumstance in which such Noteholders would
not have recourse under this Indenture if the Lessor Estate had not become a
debtor under the Bankruptcy Code.

     Section 9.14.  Withholding Taxes: Information Reporting. The Indenture
Trustee shall exclude and withhold from each distribution of principal,
Make-Whole Amount, if any, and interest and other amounts due hereunder or
under the Lessor Notes any and all withholding taxes applicable thereto as
required by law. The Indenture Trustee agrees (i) to act as such withholding
agent and, in connection therewith, whenever any present or future taxes or
similar charges are required to be withheld with respect to any amounts payable
in respect of the Lessor Notes, to withhold such amounts and timely pay the
same to the appropriate authority in the name of and on behalf of the
Noteholders and to pay to the Noteholders from amounts received by Paying Agent
pursuant hereto such additional amounts so that the net amount actually
received by the Noteholders, after reduction for such withheld amounts, shall
be equal to the full amount of principal, Make-Whole Amount, interest and other
amounts otherwise due and payable hereunder; provided, however, that,
notwithstanding the foregoing, the Paying Agent shall be required to pay such
additional amounts only if and to the extent that (a) the Facility Lessee is
required to indemnify the Noteholders for such amounts under Section 9 of the
Participation Agreement and (b) the Facility Lessee has not paid such amounts
within three (3) days after notice of nonpayment, (ii) that it will file any

                                       72
<PAGE>
necessary withholding tax returns or statements when due, and (iii) that, as
promptly as possible after the payment thereof, it will deliver to each
Noteholder appropriate documentation showing the payment thereof, together with
such additional documentary evidence as such Noteholders may reasonably request
from time to time. The Indenture Trustee agrees to file any other information
as it may be required to file under United States law.

     Any Noteholder which is organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date such Noteholder becomes a
Noteholder, (a) so notify the Indenture Trustee, (b) (i) provide the Indenture
Trustee with Internal Revenue Service form W-8 BEN, W-8 ECI or W-9, as
appropriate, or (ii) notify the Indenture Trustee that it is not entitled to an
exemption from United States withholding tax or a reduction in the rate thereof
on payments of interest. Any such Noteholder agrees by its acceptance of a
Lessor Note, on an ongoing basis, to provide like certification for each
taxable year and to notify the Indenture Trustee should subsequent
circumstances arise affecting the information provided the Indenture Trustee in
clauses (a) and (b) above. The Indenture Trustee shall be fully protected in
relying upon, and each Noteholder by its acceptance of a Lessor Note hereunder
agrees to indemnify and hold the Indenture Trustee harmless against all claims
or liability of any kind arising in connection with or related to the Indenture
Trustee's reliance upon any such documents, forms or information provided by
such Noteholder to the Indenture Trustee. In addition, if the Indenture
Trustee has not withheld taxes on any payment made to any Noteholder, and the
Indenture Trustee is subsequently required to remit to any taxing authority any
such amount not withheld, such Noteholder shall return such amount to the
Indenture Trustee upon written demand by the Indenture Trustee. The Indenture
Trustee shall be liable only for direct (but not consequential) damages to any
Noteholder due to the Indenture Trustee's violation of the Code and only to the
extent such liability is caused by the Indenture Trustee's violation of the
Code and only to the extent such liability is caused by the Indenture Trustee's
failure to act in accordance with its standard of care under this Lease
Indenture.

     Section 9.15.  Fixture Financing Statement. This Indenture also is
intended to serve as a fixture financing statement under the Wisconsin Uniform
Commercial Codes. In connection therewith, the following information is
provided:

     (a)  Name and address of Debtor:

          RockGen OL-4, LLC
          c/o  Wells Fargo Bank Northwest, National Association
          MAC U1254-031

                                       73
<PAGE>
          79 South Main Street
          Salt Lake City, UT 84111
          Telephone: (801) 246-5630
          Facsimile: (801) 246-5053
          Attention: Corporate Trust Services

     (b)  Name and Address of Secured Party (from which information concerning
the security interest may be obtained):

          State Street  Bank and Trust Company of Connecticut,
          National Association,
          as Indenture Trustee
          225 Asylum Street, Goodwin Square
          Hartford, CT 06103
          Telephone: (860) 244-1822
          Facsimile: (860) 244-1889
          Attention: Corporate Trust Department

     (c) The personal property covered by the security interest granted
hereunder includes goods which are or are to become fixtures upon the real
property described in Exhibit A hereto.

     (d) Recording: This Indenture is to be recorded in the real estate records
of Dane County, Wisconsin.

                  (Remainder of Page Intentionally Left Blank)

                                       74
<PAGE>
     IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed on the day and year first above written.

                              ROCKGEN OL-4, LLC

                              By:  Wells Fargo Bank Northwest, National
                                   Association, not in its individual capacity
                                   but solely as the Lessor Manager

                              By:
                                   Name:
                                   Title:

                              STATE STREET BANK AND TRUST COMPANY OF
                              CONNECTICUT, NATIONAL ASSOCIATION, as Indenture
                              Trustee and Account Bank

                              By:

                                   Name:
                                   Title:
<PAGE>
STATE OF NEW YORK        )
                         )    SS.:
COUNTY OF NEW YORK       )

The foregoing instrument was acknowledged before me this ___ day of October
2001, by _______________________, the _______________________ of Wells Fargo
Bank Northwest, National Association, not in its individual capacity but solely
as the Lessor Manager of South Point OL-4, LLC, a Delaware limited liability
company, as the Owner Lessor (the "Owner Lessor"), to be the free act and deed
on behalf of the national banking association as the Lessor Manager of the
Owner Lessor under the LLC Agreement dated as of , 2001.

Notary Public

My Commission Expires
<PAGE>
STATE OF NEW YORK        )
                         )    SS.:
COUNTY OF NEW YORK       )

     The foregoing instrument was acknowledged before me this the ___ day of
October 2001, by _______________________, the _______________________ of State
Street Bank and Trust Company of Connecticut, National Association, a national
banking association, to be the free act and deed on behalf of the corporation.

Notary Public

My Commission Expires

                                       3
<PAGE>
                                                                       EXHIBIT A
                                                              TO LEASE INDENTURE

                         DESCRIPTION OF FACILITY SITE

The West Half of the Northwest Quarter (W1/2NW1/4) of Section Twenty-Three
(23), Township Six (6) North, Range Twelve (12) East, in the Town of
Christiana, Dane County, Wisconsin.

<TABLE>
<S>               <C>
Tax Parcel No:    016-0612-232-8500-2
                  016-0612-232-9000-5

Property Address: 2305 Carpenter Swain Road, Dane County, WI
</TABLE>
<PAGE>
                                                                       EXHIBIT B
                                                              TO LEASE INDENTURE

                         FORM OF ROCKGEN LESSOR NOTE

                              ROCKGEN OL-4, LLC
                 NONRECOURSE PROMISSORY NOTE (ROCKGEN) DUE IN
                     A SERIES OF INSTALLMENTS OF PRINCIPAL
                          WITH FINAL PAYMENT DATE
                              OF MAY 30, 2012

                 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
              SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED,
               SOLD OR OFFERED FOR SALE IN VIOLATION OF SUCH ACT

                                                   Issued at: New York, New York

                                                    Issue Date: October __, 2001

$[______]

     ROCKGEN OL-4, LLC, a Delaware limited liability company (herein called the
"Owner Lessor", which term includes any successor person under the Collateral
Trust Indenture hereinafter referred to), hereby promises to pay to State
Street Bank and Trust Company of Connecticut, National Association, in its
capacity as pass through trustee of the South Point, Broad River and RockGen
Series A Trust, (the "Pass Through Trustee") or its registered assigns, the
principal sum of $[_____], which is due and payable in a series of installments
of principal with a final payment date of May 30, 2012 as provided below,
together with interest at the rate of [___]% per annum on the principal
remaining unpaid from time to time from and including the Issue Date until paid
in full. Interest on the outstanding principal amount under this Note shall be
due and payable in arrears semiannually at the rate specified above, commencing
on May 30, 2002, and on each May 30 and November 30 thereafter until the
principal of this Note is paid in full or made available for payment. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months.

     The principal of this Note shall be due and payable in installments on
each of the dates set forth on Schedule I hereto. The installment of principal
payable on any such

                                      B-1-1
<PAGE>
date shall be in an aggregate amount equal to the product of the Principal
Portion set forth on Schedule I multiplied by the percentage set forth on
Schedule I under the column headed "Percentage of Principal Amount Payable" for
such date unless the Principal Portion has been prepaid; provided, that the
final installment of principal shall be equal to the then unpaid principal
balance of this Note.

     Capitalized terms used in this Note that are not otherwise defined herein
shall have the meanings ascribed thereto in the Indenture of Trust, Mortgage
and Security Agreement dated as of October 18, 2001 (the "Collateral Trust
Indenture"), between the Owner Lessor and State Street Bank and Trust Company
of Connecticut, National Association, as trustee (the "Indenture Trustee").

     Interest (computed on the basis of a 360-day year of twelve 30-day months)
on any overdue principal and premium, if any, and (to the extent permitted by
Applicable Law) any overdue interest shall be paid, on demand, from the due
date thereof at the Overdue Rate for the period during which any such
principal, premium or interest shall be overdue.

     In the event any date on which a payment is due under this Note is not a
Business Day, then payment thereof shall be made on the next succeeding
Business Day with the same force and effect as if made on the date on which
such payment was due.

     Except as otherwise specifically provided in the Collateral Trust
Indenture and in the Participation Agreement, all payments of principal,
premium, if any, and interest on this Note, and all payments of any other
amounts due hereunder or under the Collateral Trust Indenture shall be made
only from the Indenture Estate, and the Indenture Trustee shall have no
obligation for the payment thereof except to the extent that the Indenture
Trustee shall have sufficient income or proceeds from the Indenture Estate to
make such payments in accordance with the terms of Section 3 of the Collateral
Trust Indenture. The holder hereof, by its acceptance of this Note, agrees
that it will look solely to the income and proceeds from the Indenture Estate
to the extent available for distribution to the holder hereof, as herein
provided, and that, none of the Owner Participant, the Owner Lessor or the
Indenture Trustee is or shall be personally liable to the holder hereof for any
amounts payable under this Note or under the Collateral Trust Indenture, or,
except as expressly provided in the Collateral Trust Indenture or, in the case
of the Owner Participant and the Owner Lessor, the Participation Agreement for
any performance to be rendered under the Collateral Trust Indenture or any
Assigned Document or for any liability under the Collateral Trust Indenture or
any Assigned Document.

                                      B-1-2
<PAGE>
     The principal of and premium, if any, and interest on this Note shall be
paid by the Indenture Trustee, without any presentment or surrender of this
Note, except that, in the case of the final payment in respect of this Note,
this Note shall be surrendered to the Indenture Trustee, by mailing a check for
the amount then due and payable, in New York Clearing House funds, to the
Noteholder, at the last address of the Noteholder appearing on the Note
Register, or by whichever of the following methods specified by notice from the
Noteholder to the Indenture Trustee: (a) by crediting the amount to be
distributed to the Noteholder to an account maintained by the Noteholder with
the Indenture Trustee, (b) by making such payment to the Noteholder in
immediately available funds at the Indenture Trustee Office, or (c) by
transferring such amount in immediately available funds for the account of the
Noteholder to the banking institution having bank wire transfer facilities as
shall be specified by the Noteholder, such transfer to be subject to telephonic
confirmation of payment. All payments due with respect to this Note shall be
made (i) as soon as practicable prior to the close of business on the date the
amounts to be distributed by the Indenture Trustee are actually received by the
Indenture Trustee if such amounts are received by 12:00 noon, New York City
time, on a Business Day or (ii) on the next succeeding Business Day if received
after such time or if received on any day other than a Business Day. Prior to
due presentment for registration of transfer of this Note, the Owner Lessor and
the Indenture Trustee may deem and treat the Person in whose name this Note is
registered on the Note Register as the absolute owner and holder of this Note
for the purpose of receiving payment of all amounts payable with respect to
this Note and for all other purposes, and neither the Owner Lessor nor the
Indenture Trustee shall be affected by any notice to the contrary. All
payments made on this Note in accordance with the provisions of this paragraph
shall be valid and effective to satisfy and discharge the liability on this
Note to the extent of the sums so paid and neither the Indenture Trustee nor
the Owner Lessor shall have any liability in respect of such payment.

     The holder hereof, by its acceptance of this Note, agrees that each
payment received by it hereunder shall be applied in the manner set forth in
Section 2.7 of the Collateral Trust Indenture, which provides that each payment
on the Note shall be applied as follows: first, to the payment of accrued
interest (including interest on overdue principal and the Make Whole Amount, if
any, and, to the extent permitted by Applicable Law, overdue interest) on this
Note to the date of such payment; second, to the payment of the principal
amount of, and the Make Whole Amount, if any, on this Note then due (including
any overdue installments of principal) thereunder; and third, to the extent
permitted by Section 2.10 of the Collateral Trust Indenture, the balance, if
any, remaining thereafter, to the payment of the principal amount of, and the
Make Whole Amount, if any, on this Note.

                                      B-1-3
<PAGE>
     This Note is the Note referred to in the Collateral Trust Indenture as the
"Lessor Note". The Collateral Trust Indenture permits the issuance of
additional notes ("Additional Lessor Notes"), as provided in Section 2.12 of
the Collateral Trust Indenture, and the several Notes may be for varying
principal amounts and may have different maturity dates (not later than the
final maturity date of the Initial Lessor Notes), interest rates, redemption
provisions and other terms. The properties of the Owner Lessor included in the
Indenture Estate are pledged or mortgaged to the Indenture Trustee to the
extent provided in the Collateral Trust Indenture as security for the payment
of the principal of and premium, if any, and interest on this Note and all
other Notes issued and outstanding from time to time under the Collateral Trust
Indenture.

     Reference is hereby made to the Collateral Trust Indenture for a statement
of the rights of the holder of, and the nature and extent of the security for,
this Note and of the rights of, and the nature and extent of the security for,
the holders of the other Notes and of certain rights of the Owner Lessor and
the Owner Participant, as well as for a statement of the terms and conditions
of the trust created by the Collateral Trust Indenture, to all of which terms
and conditions the holder hereof agrees by its acceptance of this Note.

     This Note is subject to redemption, in whole but not in part as provided
in the Collateral Trust Indenture, as follows: (x) in the case of redemptions
under the circumstances set forth in Section 2.10(a) of the Collateral Trust
Indenture, at a price equal to the principal amount of this Note being redeemed
together with accrued interest on such principal amount to the Redemption Date,
and (y) in the case of redemptions under the circumstances set forth in
Sections 2.10(d) of the Collateral Trust Indenture, at a price equal to the
principal amount of this Note then outstanding together with accrued interest
on such principal amount to the Redemption Date, plus the Make-Whole Amount, if
any; provided, however, that no such redemption shall be made until notice
thereof is given by the Indenture Trustee to the holder hereof as provided in
the Collateral Trust Indenture.

     In case either (i) a Regulatory Event of Loss under the Facility Lease
shall occur or (ii) the Facility Lease shall have been terminated pursuant to
Section 13.1 or 13.2 thereof where the Facility Lessee purchases the Undivided
Interest from the Owner Lessor, the obligations of the Owner Lessor under this
Note may, subject to the conditions set forth in Section 2.10(b) of the
Collateral Trust Indenture, be assumed in whole (but not in part) by the
Facility Lessee in which case the Owner Lessor shall be released and discharged
from all such obligations. In connection with such an

                                      B-1-4
<PAGE>
assumption, the holder of this Note may be required to exchange this Note for a
new Note evidencing such assumption.

     In case a Collateral Trust Indenture Event of Default shall occur and be
continuing, the unpaid balance of the principal of this Note together with all
accrued but unpaid interest thereon may, subject to certain rights of the Owner
Lessor and the Owner Participant contained or referred to in the Collateral
Trust Indenture, be declared or may become due and payable in the manner and
with the effect provided in the Collateral Trust Indenture.

     There shall be maintained at the Indenture Trustee Office a register for
the purpose of registering transfers and exchanges of Notes in the manner
provided in the Collateral Trust Indenture. The transfer of this Note is
registrable, as provided in the Collateral Trust Indenture, upon surrender of
this Note for registration of transfer duly accompanied by a written instrument
of transfer duly executed by or on behalf of the registered holder hereof,
together with the amount of any applicable transfer taxes.

     It is expressly understood and agreed by the holder of this Note that (a)
this Note is executed and delivered by Wells Fargo Bank Northwest, National
Association, not individually or personally but solely as the lessor manager
(the "Lessor Manager"), of the Owner Lessor, in the exercise of the powers and
authority conferred and vested in it pursuant thereto, (b) each of the
undertakings and agreements in this Note made on the part of the Owner Lessor
is made and intended not as personal undertakings and agreements by the Lessor
Manager but is made and intended for the purpose for binding only the Owner
Lessor, (c) nothing contained in this Note shall be construed as creating any
liability on the Lessor Manager individually or personally, to perform any
covenant either expressed or implied contained in this Note, all such
liability, if any, being expressly waived by the holder of this Note or by any
Person claiming by, through or under such holder, and (d) under no
circumstances shall the Lessor Manager, be personally liable for the payment of
any indebtedness or expenses of the Owner Lessor or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Owner Lessor under this Note.

     This Note shall be governed by the laws of the State of New York.

                                      B-1-5
<PAGE>
     IN WITNESS WHEREOF, the Owner Lessor has caused this Note to be duly
executed as of the date hereof.

                                      ROCKGEN OL-4, LLC
                                      a Delaware limited liability company,

                                         By: Wells Fargo Bank Northwest,
                                             National Association, not in its
                                             individual capacity but solely as
                                             the Lessor Manager

                                         By:
                                             Name:
                                             Title:
<PAGE>
     This is the Lessor Note referred to in the within-mentioned Collateral
Trust Indenture duly executed as of the date hereof.

                                             STATE STREET BANK AND TRUST
                                             COMPANY OF CONNECTICUT,
                                             NATIONAL ASSOCIATION,
                                             not in its individual capacity, but
                                             solely
                                   as
                                             the Indenture Trustee

                                             Name:
                                             Title:

                                      B-1-1
<PAGE>
                              FORM OF TRANSFER NOTICE

     FOR VALUE RECEIVED the undersigned registered holder hereby sell(s)
assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

___________________________

________________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)

________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting
and appointing

________________________________________________________________________________
attorney to transfer said Note on the books of the Issuer with full power of
substitution in the premises.

Date: ________________  ____________________________________________
                        (Signature of Transferor)

                        NOTE: The signature to this assignment must correspond
                        with the name as written upon the face of the
                        within-mentioned instrument in every particular,
                        without alteration or any change whatsoever.
<PAGE>
                                   SCHEDULE I
                                    TO NOTE

                        Schedule Of Principal Amortization

                               Series A Lessor Notes

                          Principal Portion: $45,450,000

<TABLE>
<CAPTION>
                                                               Percentage of Principal
                                                               -----------------------
Regular Distribution Date                                               Amount Payable
-------------------------                                               --------------
<S>                                                            <C>
May 30, 2002.............................................                  1.21012101%
November 30, 2002........................................                  2.58525853%
May 30, 2003............................................                   3.02530253%
November 30, 2003........................................                  3.24532453%
May 30, 2004.............................................                  3.52035204%
November 30, 2004........................................                  3.68536854%
May 30, 2005.............................................                  3.96039604%
November 30, 2005........................................                  4.12541254%
May 30, 2006.............................................                  4.07040704%
November 30, 2006........................................                  4.18041804%
May 30, 2007.............................................                  4.73047305%
November 30, 2007........................................                  5.00550055%
May 30, 2008.............................................                  5.50055006%
November 30, 2008........................................                  5.77557756%
May 30, 2009.............................................                  6.16061606%
November 30, 2009........................................                  6.43564356%
May 30, 2010.............................................                  6.65566557%
November 30, 2010........................................                  6.93069307%
May 30, 2011.............................................                  7.20572057%
November 30, 2011........................................                  6.60066007%
May 30, 2012.............................................                  5.39053905%
                                                                         ------------

Total....................................................                100.00000000%
                                                                         ============
</TABLE>
<PAGE>
                                                                       EXHIBIT C
                                                              TO LEASE INDENTURE

                    FORM OF CERTIFICATE OF AUTHENTICATION

     This is one of the Lessor Notes referred to in the within-mentioned Lease
Indenture.

                                            ______________________________,
                                            not in its individual capacity but
                                            solely as the Indenture Trustee

                                            By: _________________________
                                                Name:
                                                Title:

                                       C-1
<PAGE>
                                                                       EXHIBIT D
                                                              TO LEASE INDENTURE

                        DESCRIPTION OF THE FACILITY

     That certain approximately 520 megawatt net nameplate capacity generating
facility, (known also as the "RockGen Facility") together with all structures
or improvements, all alterations thereto or replacements thereof, and all other
fixtures, attachments, appliances, equipment, machinery and other articles
(including, but not limited to, the property set forth below (the "Included
Property")), in each case located on the land, or on the easements appurtenant
to the land, consisting of approximately 78 acres located in the Town of
Christiana near the Village of Rockdale, in Dane County, Wisconsin, described
more particularly on Exhibit A.

Included Property

     1.   Three Combustion Turbines - General Electric Model PG7241 FA; Serial
          #: 297570, 297571 and 297572.

     2.   Three CT Generators - General Electric, Hydrogen Cooled, Model 7FH2,
          18kV, 220000 KVA, 0.85 pf; Serial #: 337X167, 337X168 and 337X169.

     3.   Three Combustion Turbine Step-up Transformers - GE Prolec, 18/138 KV,
          220 MVA FA, WYE/DELTA, Serial #: G720-01, G720-02 and G720-03 and
          other interconnection equipment associated with the RockGen Facility.

                                      D-1-1
<PAGE>
                                                                      SCHEDULE I
                                                              TO LEASE INDENTURE

                               SERIES A LESSOR NOTE

<TABLE>
<S>                                     <C>
Initial Aggregate Principal Amount:     $45,450,000
Final Maturity Date:                    May 30, 2012
Interest Rate:                          8.400%
Amortization Schedule:
</TABLE>

<TABLE>
<CAPTION>
                                                                      Percentage of Principal
                                                                      -----------------------
Regular Distribution Date                                                      Amount Payable
-------------------------                                                      --------------
<S>                                                                   <C>
May 30, 2002..............................................                        1.21012101%
November 30, 2002.........................................                        2.58525853%
May 30, 2003..............................................                        3.02530253%
November 30, 2003.........................................                        3.24532453%
May 30, 2004..............................................                        3.52035204%
November 30, 2004.........................................                        3.68536854%
May 30, 2005..............................................                        3.96039604%
November 30, 2005.........................................                        4.12541254%
May 30, 2006..............................................                        4.07040704%
November 30, 2006.........................................                        4.18041804%
May 30, 2007..............................................                        4.73047305%
November 30, 2007.........................................                        5.00550055%
May 30, 2008..............................................                        5.50055006%
November 30, 2008.........................................                        5.77557756%
May 30, 2009..............................................                        6.16061606%
November 30, 2009.........................................                        6.43564356%
May 30, 2010..............................................                        6.65566557%
November 30, 2010.........................................                        6.93069307%
May 30, 2011..............................................                        7.20572057%
November 30, 2011.........................................                        6.60066007%
May 30, 2012..............................................                        5.39053905%
                                                                                ------------
Total.....................................................                      100.00000000%
                                                                                ============
</TABLE>

                               SCHDULE 1-1<PAGE>
                                                                 Exhibit 4.22.27

================================================================================

            CALPINE GUARANTY AND PAYMENT AGREEMENT (SOUTH POINT SP-1)

                          Dated as of October 18, 2001

                                      among

                              CALPINE CORPORATION,

                                  as Guarantor,

                                      and

                    SOUTH POINT OL-1, LLC, as Owner Lessor,

                      SBR OP-1, LLC, as Owner Participant,

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

              STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
                              NATIONAL ASSOCIATION,
       not in its individual capacity but solely as Pass Through Trustee,

                                as Beneficiaries

                              SOUTH POINT PROJECT

================================================================================
<PAGE>
           CALPINE GUARANTY AND PAYMENT AGREEMENT (SOUTH POINT SP-1)

          This CALPINE GUARANTY AND PAYMENT AGREEMENT (SOUTH POINT SP-1),
dated as of October 18, 2001 (the "Guaranty"), is entered into by and among
Calpine Corporation, a Delaware corporation, as guarantor (the "Guarantor"),
SOUTH POINT OL-1, LLC, a Delaware limited liability company, as Owner Lessor,
SBR OP-1, LLC, a Delaware limited liability company, as Owner Participant,
State Street Bank and Trust Company of Connecticut, National Association, not
in its individual capacity but solely as Indenture Trustee and State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity but solely as Pass Through Trustee, and is issued by the
Guarantor in favor of the Beneficiaries (as defined in Section 4 below).

                                  WITNESSETH:

          WHEREAS, South Point Energy Center, LLC (the "South Point Lessee")
is an indirect wholly-owned subsidiary of the Guarantor;

          WHEREAS, the South Point Lessee is a party to the Participation
Agreement (SP-1) dated as of October 18, 2001 (the "Participation Agreement"),
among the South Point Lessee, Wells Fargo Bank Northwest, National Association,
not in its individual capacity except as expressly provided in the
Participation Agreement, but solely as Lessor Manager, South Point OL-1, LLC,
as Owner Lessor, the 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 in the Participation
Agreement, 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 in the Participation Agreement, but solely as Pass
Through Trustee;

          WHEREAS, the South Point Lessee and the Owner Lessor are entering
into the South Point (SP-1) Facility Lease, to be dated as of October 18, 2001
(as amended, modified or supplemented from time to time pursuant to Section
14.23 of the Participation Agreement, the "Facility Lease"), providing for the
Owner Lessor's leasing an undivided interest of the South Point Facility to the
South Point Lessee as contemplated therein;

          WHEREAS, the South Point Lessee and the Owner Lessor are entering
into the South Point (SP-1) Facility Site Lease, to be dated as of October 18,
2001 (as amended, modified or supplemented from time to time pursuant to
Section 14.23 of the Participation Agreement, the "Facility Site Lease"),
providing for the Owner Lessor's leasing an undivided interest in the Facility
Site to the South Point Lessee as contemplated therein;

                                       1
<PAGE>
          WHEREAS, the Guarantor will obtain benefits as a result of the
South Point Lessee entering into the Facility Lease, the Facility Site Lease
and the other transactions contemplated by the Participation Agreement; and

          WHEREAS, pursuant to Section 4.2 of the Participation Agreement,
this Guaranty is required to be provided by the Guarantor.

          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 Guarantor
agrees as follows:

SECTION 1.   DEFINITIONS

          (a)   Capitalized terms used in this Guaranty, including the
recitals, and not otherwise defined herein shall have the respective meanings
set forth on Appendix A to the Participation Agreement, provided that if a term
that is defined in this Guaranty (the "Guaranty Definition") includes in such
definition a term that is defined in Appendix A to the Participation Agreement
(the "Appendix A Definition"), and the Appendix A Definition in turn includes
in such definition a term that is defined both in this Guaranty and in Appendix
A to the Participation Agreement (the "Embedded Definition"), then for purposes
of the Appendix A Definition as it is used in the Guaranty Definition and for
purposes of the Guaranty Definition, the Embedded Definition shall be used as
defined in this Guaranty and not as defined in Appendix A to the Participation
Agreement. Except as otherwise provided in the previous sentence, the Rules of
Interpretation set forth in Appendix A to the Participation Agreement shall
apply to the terms used in this Guaranty and specifically defined herein.

          (b)   As used in this Guaranty, the following terms shall have the
respective meanings assigned thereto as follows:

               "2000 Calpine Indenture" shall mean that certain Indenture,
dated as of August 10, 2000, relating to the issuance of a principal amount of
$250,000,000 8-1/4% Senior Notes due 2005, issuance of a principal amount of
$750,000,000 8-5/8% Senior Notes due 2010 and issuance of a principal amount of
$2,000,000,000 8-1/2% Senior Notes due 2011 by and between Calpine and the
Wilmington Trust Company, as trustee, as the same may be amended, modified or
supplemented from time to time.

               "GAAP" means generally accepted accounting principals in the
United States of America as in effect and, to the extent optional, adopted by
the Guarantor, on the date of the Guaranty, consistently applied.

               "Indebtedness" of any Person means, without duplication, (i)
the principal in respect of indebtedness of such Person for money borrowed and;
(ii) all Capitalized Lease Obligations of such Person; (iii) all obligations of
such Person for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction (other than obligations with
respect to letters of credit securing obligations

                                       2
<PAGE>
(other than obligations described in (i) and (ii) above) entered into in the
ordinary course of business of such Person to the extent such letters of credit
are not drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the tenth Business Day following receipt by such
Person of a demand for reimbursement following payment on the letter of
credit); (iv) all obligations of the type referred to in clauses (i) through
(iii) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise; and (v) all obligations of the
type referred to in clauses (i) through (iv) of other Persons secured by any
Lien on any property or asset of such Person (whether or not such obligation is
assumed by such Person), the amount of such obligation on any date of
determination being deemed to be the lesser of the value of such property or
assets or the amount of the obligation so secured. The amount of Indebtedness
of any Person at any date shall be, with respect to unconditional obligations,
the outstanding balance at such date of all such obligations as described above
and, with respect to any contingent obligations at such date, the maximum
liability determined by such Person's board of directors, in good faith, as, in
light of the facts and circumstances existing at the time, reasonably likely to
be Incurred upon the occurrence of the contingency giving rise to such
obligation.

               "Lien" means any mortgage, lien, pledge, charge, or other
security interest or encumbrance of any kind (including any conditional sale or
other title retention agreement and any lease in the nature thereof).

               "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.

               "Subsidiary" means, as applied to any Person, any corporation,
partnership, trust, association or other business entity of which an aggregate
of at least 50% of the outstanding Voting Shares or an equivalent controlling
interest therein, of such Person is, at the time, directly or indirectly, owned
by such Person and/or one or more Subsidiaries of such Person.

               "Voting Shares", with respect to any corporation, means the
Capital Stock having the general voting power under ordinary circumstances to
elect at least a majority of the board of directors (irrespective of whether or
not at the time stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).

SECTION 2.   GUARANTEED AND PAYMENT OBLIGATIONS

          Section 2.1.   (a) The Guarantor hereby unconditionally and
irrevocably guarantees to the Beneficiaries (except that the obligations
referred to in clauses (1), (2) and (5)(A) (relating to clause (1) and clause
(2) amounts) of this Section 2.1(a) are for the benefit only of the Owner
Lessor and the Indenture Trustee (as assignee of the Owner Lessor), as their
interests may appear), as primary obligor and not merely as a surety, the

                                       3
<PAGE>
due, punctual and full payment (when and as the same may become due and
payable), and, as applicable, performance by the South Point Lessee of all of
the South Point Lessee's obligations under the Operative Documents to which it
is a party and with respect to the South Point Ground Lease if the same shall
not be performed when due pursuant to the Operative Documents, including,
without limitation, but without duplication, (1) the South Point Lessee's
obligation to make Periodic Rent, Supplemental Rent and other payments (in
accordance with the terms of the Operative Documents) to the Owner Lessor, (2)
the South Point Lessee's obligation to pay the Termination Value (and amounts
computed by reference thereto) to the Owner Lessor and all other amounts owed
under the Operative Documents and the South Point Ground Lease under and in
accordance with the Facility Lease, (3) without duplication of the preceding
clause (2), the South Point Lessee's obligation to pay the Equity Portion of
Periodic Rent and the Equity Portion of Termination Value to the Owner Lessor,
(4) the South Point Lessee's obligation to make indemnity payments when due in
accordance with the terms of the Participation Agreement and the Tax Indemnity
Agreement, (5) the South Point Lessee's obligation, pursuant to Section 3.3 of
the Facility Lease, to pay as Supplemental Rent an amount equal to (A) interest
at the applicable Overdue Rate on any amount under clauses (1), (2), (3), (4)
and 5(B) of this Section 2.1(a), not paid when due and (B) any Make-Whole
Amount to the extent then due and payable by the Owner Lessor to the
Certificateholders pursuant to the Participation Agreement, the Facility Lease
or any other Operative Document to which the South Point Lessee is a party and
(6) the South Point Lessee's obligation to make any and all other payments, and
perform all other covenants and agreements, when due under and in accordance
with the terms of the Operative Documents.

          (b)   The Guarantor agrees that upon the occurrence and during the
continuance of a Lease Event of Default, it shall pay to the Indenture Trustee
(as assignee of the Owner Lessor), upon written demand by the Indenture Trustee
(as assignee of the Owner Lessor) in accordance with the applicable Operative
Documents, all amounts constituting the Termination Value and all accrued but
unpaid Periodic Rent then due and payable. Such payment obligation shall be
effective without reference to or requirement for valuation of the Owner
Lessor's Interest or any other security held by any Person for performance of
the South Point Lessee's obligations under the Facility Lease or any other
Operative Documents or the South Point Ground Lease. The Guarantor agrees that
it shall make such payment notwithstanding the fact that the South Point Lessee
may have a defense to the payment of any such amounts. The Guarantor's
obligations in this Section 2.1(b) are direct and primary obligations (and not
obligations of a guarantor or surety) of the Guarantor to the Owner Lessor and
the Indenture Trustee (as assignee of the Owner Lessor), which shall not be
affected in any way by the provisions of Section 2.1(a) above or any payments
under any other Operative Documents of any amounts until the Owner Lessor and
the Indenture Trustee (as assignee of the Owner Lessor) have received full
payment of such amounts.

          (c)   The Guarantor acknowledges that notwithstanding the provisions
of the second sentence of Section 8.13 hereof (i) as and to the extent provided
in Section 5.6 of the Collateral Trust Indenture upon the occurrence and during
the continuation of a Lease Event of Default, the Indenture Trustee and the
Owner Lessor may proceed against

                                       4
<PAGE>
the Guarantor for the payment of the Termination Value (including without
limitation all amounts the Guarantor is obligated to pay under Section 2.1(b)
hereof under the circumstances specified therein).

          (d)   Notwithstanding anything herein or in the Collateral Trust
Indenture to the contrary, in the event that an Indenture Event of Default that
constitutes a Lease Event of Default has occurred and is continuing and the
Indenture Trustee (as assignee of the Owner Lessor) forecloses upon and sells,
assigns or otherwise transfers, its interest in this Guaranty pursuant to the
provisions of the Collateral Trust Indenture, the Guarantor shall remain
obligated hereunder to pay to the Owner Lessor the amounts referred to in
Section 2.1(a)(3).

          Section 2.2.   In the case of any failure by the South Point Lessee
to perform and observe any term, provision or condition referred to in Section
2.1(a) when due pursuant to the Operative Documents or the South Point Ground
Lease, the Guarantor agrees to cause such performance or observance to be done,
and in the case of any failure by the South Point Lessee to make such payment
as and when the same shall become due and payable (by acceleration or
otherwise), the Guarantor hereby agrees to make such payment (and, in addition,
such further amounts, if any, as shall be sufficient to cover the costs and
expenses of collection hereunder) as and when such payment is due and payable.

          All obligations and indebtedness set forth in Section 2.1 above,
this Section 2.2, and in Section 8.15 below are referred to in this Guaranty as
the "Obligations."

          Section 2.3.   The obligations of the Guarantor contained herein are
direct, independent, and primary obligations of the Guarantor and are absolute,
present, unconditional and continuing obligations and are not conditioned in
any way upon the institution of suit or the taking of any other action or any
attempt to enforce performance of or compliance with the obligations, covenants
or undertakings (including any payment obligations) of the South Point Lessee
and shall constitute a guaranty of, and agreement with respect to, payment and
performance and not a guaranty of collection, binding upon the Guarantor and
its successors and assigns and shall remain in full force and effect and
irrevocable without regard to the genuineness, validity, legality or
enforceability of the Participation Agreement, the Facility Lease, the Tax
Indemnity Agreement or any other agreement (including any other Operative
Document and the South Point Ground Lease) or the lack of power or authority of
the South Point Lessee to enter into any of the Participation Agreement, the
Facility Lease, the Tax Indemnity Agreement or any other agreement (including
any other Operative Document and the South Point Ground Lease) to which the
South Point Lessee is a party, or any substitution, release or exchange of any
other guaranty of, or agreement with respect to, or any other security for, any
of the Obligations (including any settlement, compromise or other adjustment
with respect to the Obligations) or any other circumstance whatsoever that
might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor and shall not be subject to any right of set-off,
recoupment or counterclaim and is in no way conditioned or

                                       5
<PAGE>
contingent upon any attempt to collect from the South Point Lessee or any other
entity or to perfect or enforce any security or upon any other condition or
contingency or upon any other action, occurrence or circumstance whatsoever.
Without limiting the generality of the foregoing, the Guarantor shall have no
right to terminate this Guaranty, or to be released, relieved or discharged
from its obligations hereunder, other than upon full payment and satisfaction
and performance of all of the Obligations (subject to Section 8.14 hereof), and
such obligations shall be neither affected nor diminished for any other reason
whatsoever, including (i) any amendment or supplement to or modification of any
of the Participation Agreement, the Facility Lease, the Tax Indemnity Agreement
or any other agreement (including any other Operative Document) to which the
South Point Lessee is a party, any release, extension or renewal of the South
Point Lessee's obligations under any of the Participation Agreement, the
Facility Lease, the Tax Indemnity Agreement or any other agreement (including
any other Operative Document) to which the South Point Lessee is a party or by
which it is bound, including, without limitation, any actions taken by the
Indenture Trustee pursuant to the Collateral Trust Indenture, or any
subletting, assignment or transfer of the South Point Lessee's or any
Beneficiary's interest in the Participation Agreement, the Facility Lease or
any other Operative Document in accordance with the terms thereof, (ii) any
bankruptcy, insolvency, readjustment, composition, liquidation or similar
proceeding with respect to the South Point Lessee, Owner Lessor, Owner
Participant or any other Person, including, without limitation, termination of
the Facility Lease and the operation of Section 502(b)(6) of the Bankruptcy
Code in connection therewith, (iii) any furnishing or acceptance of additional
security or any exchange, substitution, surrender or release of any security,
(iv) any waiver, consent or other action or inaction or any exercise or
nonexercise of any right, remedy or power with respect to the Obligations
(including any settlement, compromise or other adjustment with respect to the
Obligations) or any of the Participation Agreement, the Facility Lease, the Tax
Indemnity Agreement or any other agreement (including any Operative Document)
to which the South Point Lessee is a party, (v) without limiting Section 3.6(b)
hereof, any merger or consolidation of the South Point Lessee or the Guarantor
into or with any other Person, or any sale, assignment, conveyance, lease,
transfer or other disposition of all or substantially all of the assets or
properties of the South Point Lessee or the Guarantor, or any change in the
structure of the South Point Lessee or in the ownership of the South Point
Lessee by the Guarantor, (vi) any default, misrepresentation, negligence,
misconduct or other action or inaction of any kind by any Beneficiary, the
Indenture Trustee or any other Person under or in connection with any Operative
Document or any other agreement relating to this Guaranty, (vii) any action or
inaction by any Beneficiary as contemplated in Section 5 of this Guaranty;
(viii) any invalidity, irregularity or unenforceability of all or part of the
Obligations or of any security therefor; (ix) any change in the manner, place,
timing or schedule of payment or performance of, or in any other term of, all
or any of the Obligations; (x) whether the Guarantor is related or unrelated to
the South Point Lessee, (xi) the assignment by the Owner Lessor of its rights
and interests hereunder, under the Facility Lease or under any other Operative
Document or the South Point Ground Lease in accordance with the Operative
Documents and the South Point Ground Lease (or the genuineness, validity,
legality or enforceability of the obligations of the Owner Lessor under the
Collateral Trust Indenture) and (xii) any other circumstance whatsoever.

                                       6
<PAGE>
SECTION 3.   GUARANTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS

          Section 3.1.   The Guarantor represents and warrants, as of the date
hereof:

          (i)   The Guarantor is duly organized, validly existing and in
     good standing under the laws of the State of Delaware and has full power,
     authority and the legal right to execute, deliver and perform the terms of
     this Guaranty and each Operative Document to which it is a party
     (together, the "Calpine Documents").

          (ii)   The execution, delivery and performance by the Guarantor
     of the Calpine Documents have been duly authorized by all necessary
     corporate action. The Calpine Documents constitute legal, valid and
     binding obligations of the Guarantor enforceable against the Guarantor in
     accordance with their respective terms, except as such enforcement may be
     affected by applicable bankruptcy, insolvency, moratorium and other
     similar laws affecting creditors' rights generally and by general
     principles of equity.

          (iii)   The execution, delivery and performance of the Calpine
     Documents will not (a) contravene any provision of law, rule or
     regulation to which the Guarantor is subject or any judgment, decree or
     order applicable to the Guarantor, (b) conflict or be inconsistent with or
     result in any breach of any terms, covenants, conditions or provisions of,
     or constitute a default under, or result in the creation or imposition of
     (or the obligation to create or impose) any Lien or other encumbrance upon
     any of the property or assets of the Guarantor pursuant to the terms of
     any agreement or other instrument to which the Guarantor is a party or by
     which it or its property is bound or to which it or its property may be
     subject, in each case the violation of which would have a material adverse
     effect on the business, operations, prospects, properties or assets, or in
     the condition, financial or otherwise, of the Guarantor, or (c) violate or
     contravene any provision of the articles of incorporation or by-laws of
     the Guarantor.

          (iv)   No pending or, to the knowledge of the Guarantor,
     threatened action, suit, investigation or proceedings against the
     Guarantor before any Governmental Entity exists which, if determined
     adversely to the Guarantor, would materially adversely affect the
     business, operations, prospects, properties or assets, or in its
     condition, financial or otherwise, or the Guarantor's ability to perform
     its obligations under the Calpine Documents.

          (v)   No consent from, authorization or approval or other action
     by, and no notice to or filing with, any Person is required for the
     execution, delivery and performance by the Guarantor of the Calpine
     Documents except those which have been given and remain in full force and
     effect.

                                       7
<PAGE>
          (vi)   The South Point Lessee is an indirect, wholly-owned
     subsidiary of the Guarantor.

          (vii)   The Guarantor is not an "investment company" or a
     company controlled by an "investment company" within the meaning of the
     Investment Company Act of 1940.

          (viii)   The Guarantor is not in default with respect to any
     judgment, order, writ, injunction, decree, award, rule or regulation of
     any court, arbitrator or governmental department, commission, board,
     bureau, agency or instrumentality, domestic or foreign, which, either,
     separately or in the aggregate, would result in any material adverse
     change in any of its businesses, operations, prospects or assets, or in
     its condition, financial or otherwise, or its ability to perform its
     obligations under the Calpine Documents.

          (ix)   The Guarantor is not a party to any agreement or
     instrument, or subject to any corporate restriction or any judgment,
     order, writ, injunction, decree, award, rule or regulation, which
     materially adversely affects, or in the future may materially adversely
     affect, its business, operations, prospects, properties or assets, or
     conditions, financial or otherwise, or its ability to perform its
     obligations under the Calpine Documents.

          (x)   The audited financial statements of the Guarantor and its
     Consolidated Subsidiaries, as of December 31, 2000, reported on by Arthur
     Andersen LLP, copies of which have been delivered to the Indenture
     Trustee, the Pass Through Trustee, the Certificateholders and the Owner
     Participant, are true, complete and correct and fairly present the
     financial condition of the Guarantor and its Consolidated Subsidiaries as
     of the date thereof. The financial statements have been prepared in
     accordance with GAAP. The Guarantor and its Consolidated Subsidiaries do
     not have any material liabilities, direct or contingent, except (a) as are
     disclosed in such financial statements or (b) as arise under the Operative
     Documents or the South Point Ground Lease. There has been no material
     adverse change in the financial condition of the Guarantor and its
     Consolidated Subsidiaries since the date of the audited financial
     statements referred to above.

          (xi)   All factual information relating to the Guarantor (taken
     as a whole) heretofore or contemporaneously furnished by or on behalf of
     the Guarantor in writing to the Owner Lessor, the Owner Participant, the
     Indenture Trustee, the Pass Through Trustee or the Certificateholders
     (including, without limitation, all such information contained herein, in
     the Participation Agreement and in any preliminary or final offering
     circular distributed in accordance with the terms of the Operative
     Documents) for purposes of or in connection with the Calpine Documents or
     any transaction contemplated therein is true and accurate in all material
     respects on the date as of which such information is dated or certified
     and not incomplete by omitting to state any fact necessary to make such
     information relating to the Guarantor (taken as a whole) not misleading in
     any material respect

                                       8
<PAGE>
     at such time in light of the circumstances under which such information
     was provided; 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 Guarantor, or (ii) the descriptions of the
     Operative Documents or the South Point Ground Lease or the tax
     consequences to beneficial owners of Certificates; provided, however, each
     of the Beneficiaries acknowledges 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
     Arizona energy market and (3) information passed along from other Persons
     and (ii) that the South Point Lessee does not make any 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.

          (xii)   The Guarantor is in compliance with all applicable
     statutes, regulations and orders of, and all applicable restrictions
     imposed by, all governmental bodies, domestic or foreign, in respect of
     the conduct of its business and the ownership of its property (including
     applicable statutes, regulations, orders and restrictions relating to
     environmental standards and controls), except such noncompliance as would
     not, in the aggregate, have a material adverse effect on the business,
     operations, property, assets or condition (financial or otherwise) of the
     Guarantor, or the Guarantor's ability to perform its obligations under the
     Calpine Documents.

          (xiii)   The Guarantor has filed all tax returns and reports
     required by law to have been filed by it and has paid all taxes and
     governmental charges thereby shown to be owing (other than any such taxes
     or charges which are being diligently contested in good faith by
     appropriate proceedings and for which adequate reserves in accordance with
     GAAP shall have been set aside on its books), except such non-filing or
     non-payment, as the case may be, as would not, in the aggregate, have a
     material adverse effect on the business, operations, property, assets or
     condition (financial or otherwise) of the Guarantor.

          (xiv)   No default has occurred under this Guaranty, which
     default would reasonably be expected to result in a material adverse
     effect on the business, operations, assets or condition (financial or
     otherwise) of the Guarantor.

          (xv)   In accordance with Section 8.12 hereof and Section 14.14
     of the Participation Agreement, the Guarantor 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.

          Section 3.2.   The Guarantor covenants and agrees that on and after
the date hereof and until this Guaranty is terminated pursuant to the terms
hereof the Guarantor shall:

                                       9
<PAGE>
          (a)   file with the Owner Participant and the Indenture Trustee,
within 15 days after the filing with the SEC, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the SEC may by rules and regulations prescribe) which
the Guarantor is required to file with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act. In the event the Guarantor is at any time no longer
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, it shall file with the Owner Participant, and for so long as the
Certificates remain outstanding, the Indenture Trustee and the Pass Through
Trustee, within 15 days after the Guarantor would have been required to file
such documents with the SEC, copies of the annual reports and of the
information, documents and other reports which the Guarantor would have been
required to file with the SEC if the Guarantor had continued to be subject to
such Sections 13 or 15(d). Delivery of such reports, information and documents
to the Owner Participant, the Indenture Trustee and the Pass Through Trustee is
for informational purposes only and their receipt of the same shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Guarantor's
compliance with any of its covenants hereunder (as to which the Owner
Participant, the Indenture Trustee and the Pass Through Trustee are entitled to
rely exclusively on Officers' Certificates);

          (b)   furnish to the Beneficiaries, promptly upon the Guarantor
obtaining Actual Knowledge of any action, suit or proceeding pending or
threatened against the Guarantor before any court or before any governmental
department, commission or agency or any arbitrator, which in the Guarantor's
good faith opinion would reasonably be likely to result in a material adverse
effect on the business, operations, property, assets or condition (financial or
otherwise) of the Guarantor, a certificate of a senior officer specifying the
nature of such action, suit or proceeding and the proposed response of the
Guarantor thereto;

          (c)   furnish to the Beneficiaries, as soon as possible and in any
event within three days after the Guarantor obtains Actual Knowledge of default
by the Guarantor of any of its material obligations under this Guaranty, a
statement of an authorized officer of the Guarantor setting forth details of
such default and the action which the Guarantor has taken and proposes to take
with respect thereto. Notwithstanding the foregoing provision in this clause
(c), the Guarantor shall, within 120 days after the close of each fiscal year
of the Guarantor in which Certificates are outstanding hereunder, file with the
Owner Participant, and if the Certificates are outstanding during any part of
such fiscal year, the Indenture Trustee and the Pass Through Trustee, an
Officer's Certificate, provided that one Officer executing the same shall be
the principal executive officer, the principal financial officer or the
principal accounting officer of the Guarantor, covering the period from the
date hereof to the end of the fiscal year in which this Guaranty was executed
and delivered by the Guarantor, in the case of the first such certificate, and
covering the preceding fiscal year in the case of each subsequent certificate,
and stating whether or not, to the Actual Knowledge of each such executing
Officer, the Guarantor has complied with and performed and fulfilled all
covenants on its part contained in this Guaranty and is not in Default in the
performance or observance of any of the terms or provisions contained in this
Guaranty, and, if any such signer has obtained Actual Knowledge of any Default
by the Guarantor in the

                                       10
<PAGE>
performance, observance or fulfillment of any such covenant, terms or provision
specifying each such Default and the nature thereof; and

          (d)   promptly furnish to the Owner Participant, the Owner Lessor,
the Indenture Trustee or the Pass Through Trustee such other information as the
Owner Lessor, Owner Participant, the Indenture Trustee and the Pass Through
Trustee may from time to time reasonably request with respect to the Guarantor.

     So long as the Indenture Trustee is also serving as the Pass Through
Trustee, delivery to the Indenture Trustee shall satisfy the Guarantor's
obligation to furnish information to the Pass Through Trustee under this
Section 3.2.

          Section 3.3.   The Guarantor covenants and agrees that it will not
transfer or assign or cause to be transferred or assigned the Ownership
Interest in the South Point Lessee to any other Person, 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 Trustee (it being agreed and
understood that a consolidation with or merger of the Guarantor into, or a sale
by the Guarantor of all or substantially all of its assets to, another Person
in accordance with Section 3.6 hereof shall not be deemed to be a transfer or
assignment of the Ownership Interest in the South Point Lessee for the purposes
of this Section), except as permitted in this Section 3.3 or in Section 8.4
hereof. Notwithstanding the foregoing, and subject to Section 8.4 below, so
long as this Guaranty remains in full force and effect, the Guarantor may
transfer a portion of the Ownership Interest in the South Point Lessee
(provided that following such transfer the Guarantor shall continue to own at
least a majority of the Ownership Interest in the South Point Lessee) without
the consent of the Owner Lessor, the Owner Participant, the Indenture Trustee,
the Pass Through Trustee or any other Transaction Party if the following
conditions have been satisfied:

          (i)   the Owner Lessor, the Owner Participant 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 Trustee shall
     have received an Opinion of Counsel to the effect that all regulatory
     approvals required in connection with such transfer have been obtained;

          (ii)   all the obligations of the South Point Lessee under the
     Operative Documents and the South Point Ground Lease shall remain in full
     force and effect, the Guarantor shall reaffirm in writing all of its
     obligations hereunder in a manner reasonably satisfactory to the Owner
     Participant, such obligations of the Guarantor shall remain in full force
     and effect;

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

          (iv)   the transfer shall not subject the South Point Lessee,
     the Owner Participant, the Owner Lessor, the Indenture Trustee, the Pass
     Through Trustee or

                                       11
<PAGE>
     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; and

          (v)   the South Point Lessee shall have paid, at no after-tax
     cost to such parties, all reasonable and documented out-of-pocket
     expenses (including reasonable attorneys' fees and expenses) of the Owner
     Lessor, the Owner Participant, the Indenture Trustee, the Lease Indenture
     Company and the Pass Through Trustee in connection with such assignment.

          Section 3.4.   Subject to Section 4, the Guarantor shall not, and
shall not permit any Restricted Subsidiary to, enter into any Sale/Leaseback
Transaction unless (i) the Guarantor or such Restricted Subsidiary would be
entitled to create a Lien on such property securing Indebtedness in an amount
equal to the Attributable Debt with respect to such transaction without equally
and ratably securing the Obligations pursuant to Section 3.5 or (ii) the net
proceeds of such sale are at least equal to the fair value (as determined by
the Board of Directors) of such property or asset and the Guarantor or such
Restricted Subsidiary shall apply or cause to be applied an amount in cash
equal to the net proceeds of such sale to the retirement, within 180 days of
the effective date of any such arrangement, of Indebtedness of the Guarantor or
any Restricted Subsidiary; provided, however, that in addition to the
transactions permitted pursuant to the foregoing clauses (i) and (ii), the
Guarantor or any Restricted Subsidiary may enter into a Sale/Leaseback
Transaction as long as the sum of (x) the Attributable Debt with respect to
such Sale/Leaseback Transaction and all other Sale/Leaseback Transactions
entered into pursuant to this proviso plus (y) the amount of outstanding
Indebtedness secured by Liens Incurred pursuant to the final proviso to Section
3.5 does not exceed 15% of Consolidated Net Tangible Assets as determined based
on the consolidated balance sheet of the Guarantor as of the end of the most
recent fiscal quarter for which financial statements are available; and
provided, further, that a Restricted Subsidiary may enter into a Sale/Leaseback
Transaction with respect to property or assets owned by such Restricted
Subsidiary, the proceeds of which are used to explore, drill, develop,
construct, purchase, repair, improve or add to property or assets of any
Restricted Subsidiary, or to repay (within 365 days of the commencement of full
commercial operation of any such property) Indebtedness Incurred to explore,
drill, develop, construct, purchase, repair, improve or add to property or
assets of any Restricted Subsidiary.

          Section 3.5.   Subject to Section 4, the Guarantor shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, incur
any Lien on any of its properties or assets (including Capital Stock), whether
owned at the date hereof or thereafter acquired, in each case to secure
Indebtedness of the Guarantor or any Restricted Subsidiary, other than (a)(1)
Liens incurred by the Guarantor or any Restricted Subsidiary securing
Indebtedness Incurred by the Guarantor or such Restricted Subsidiary, as the
case may be, to finance the exploration, drilling, development, construction
or purchase of or by, or repairs, improvements or additions to, property or
assets of the Guarantor or such Restricted Subsidiary, as the case may be,
which Liens may include Liens on the Capital Stock of such Restricted
Subsidiary or (2) Liens

                                       12
<PAGE>
incurred by any Restricted Subsidiary that does not own, directly or
indirectly, at the time of such original incurrence of such Lien under this
clause (2) any operating properties or assets, securing Indebtedness Incurred
to finance the exploration, drilling, development, construction or purchase of
or by, or repairs, improvements or additions to, property or assets of any
Restricted Subsidiary that does not, directly or indirectly, own any operating
properties or assets at the time of such original incurrence of such Lien,
which Liens may include Liens on the Capital Stock of one or more Restricted
Subsidiaries that do not, directly or indirectly, own any operating properties
or assets at the time of such original incurrence of such Lien, provided,
however, that the Indebtedness secured by any such Lien may not be issued more
than 365 days after the later of the exploration, drilling, development,
completion of construction, purchase, repair, improvement, addition or
commencement of full commercial operation of the property or assets being so
financed; (b) Liens existing on the date hereof (other than Liens relating to
Indebtedness or other obligations being repaid or Liens that are otherwise
extinguished with the proceeds of the offering of the Certificates); (c) Liens
on property, assets or shares of stock of a Person at the time such Person
becomes a Subsidiary; provided, however, that any such Lien may not extend to
any other property or assets owned by the Guarantor or any Restricted
Subsidiary; (d) Liens on property or assets at the time the Guarantor or a
Subsidiary acquires the property or asset, including any acquisition by means
of a merger or consolidation with or into the Guarantor or a Subsidiary;
provided, however, that such Liens are not incurred in connection with, or in
contemplation of, such merger or consolidation; and provided, further, that the
Lien may not extend to any other property or asset owned by the Guarantor or
any Restricted Subsidiary; (e) Liens securing Indebtedness or other obligations
of a Subsidiary owing to the Guarantor or a Restricted Subsidiary or of the
Guarantor owing to a Subsidiary; (f) Liens incurred on assets that are the
subject of a Capitalized Lease Obligation to which the Guarantor or a
Subsidiary is a party, which shall include, Liens on the stock or other
ownership interest in one or more Restricted Subsidiaries leasing such assets;
(g) Liens to secure any refinancing, refunding, extension, renewal or
replacement (or successive refinancings, refundings, extensions, renewals or
replacements) as a whole, or in part, of any Indebtedness secured by any Lien
referred to in the foregoing clauses (a), (b), (c), (d) and (f), provided,
however, that (x) such new Lien shall be limited to all or part of the same
property or assets that secured the original Lien (plus repairs, improvements
or additions to such property or assets and Liens on the stock or other
ownership interest in one or more Restricted Subsidiaries beneficially owning
such property or assets) and (y) the amount of the Indebtedness secured by such
Lien at such time (or, if the amount that may be realized in respect of such
Lien is limited, by contract or otherwise, such limited lesser amount) is not
increased (other than by an amount necessary to pay fees and expenses,
including premiums, related to the refinancing, refunding, extension, renewal
or replacement of such Indebtedness); (h) Liens by which the Obligations are
secured equally and ratably with other Indebtedness pursuant to this Section
3.5; in any such case without effectively providing that the Obligations shall
be secured equally and ratably with (or prior to) the obligations so secured
for so long as such obligations are so secured; provided, however, that the
Guarantor or a Restricted Subsidiary may Incur other Liens to secure
outstanding Indebtedness as long as the sum of (x) the lesser of (A) the amount
of outstanding Indebtedness secured by Liens Incurred pursuant to this proviso
(or, if the

                                       13
<PAGE>
amount that may be realized in respect of such Lien is limited, by contract or
otherwise, such limited lesser amount) and (B) the fair value (as determined by
the Board of Directors) of the property securing such item of Indebtedness,
plus (y) the Attributable Debt with respect to all Sale/Leaseback Transactions
entered into pursuant to the first proviso to Section 3.4 does not exceed 15%
of Consolidated Net Tangible Assets as determined based on the Consolidated
balance sheet of the Guarantor as of the end of the most recent fiscal quarter
for which financial statements are available; and (i) Liensotherwise permitted
under the 2000 Calpine Indenture.

          Section 3.6.   (a) The Guarantor covenants and agrees that it shall
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 immediately after giving effect to such transaction,

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

          (ii)   either (A) the Guarantor shall be the continuing Person,
     or (B) the Person (if other than the Guarantor) formed by such
     consolidation or into which the Guarantor is merged or to which the
     properties and assets of the Guarantor are sold, assigned, conveyed,
     transferred, disposed of or leased as aforesaid shall be an entity
     organized and existing under the laws of the United States or any State
     thereof or the District of Columbia and shall execute and deliver to 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 Trustee, a Guarantor Assignment
     and Assumption Agreement; and

          (iii)   each of 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
     Trustee shall have received an Officer's Certificate of the Guarantor, the
     surviving entity or the transferee, as the case may be, in form and
     substance reasonably satisfactory to each of such parties, stating that
     the proposed merger, consolidation, assignment, conveyance, transfer,
     disposition, lease or sale, and the Guarantor Assignment and Assumption
     Agreement complies with the terms of this Section 3(a) and, as to legal
     matters, an Opinion of Counsel; and

          (iv)   In addition to the conditions set forth in clauses (i)
     through (iii) above, the Guarantor, subject to Section 4, will not
     consummate any such consolidation, merger or sale of all or substantially
     all of its properties or assets unless the long-term unsecured debt of the
     resulting, surviving or succeeding entity shall have a credit rating
     assigned by the Rating Agencies that is not less than the lower of (x) the
     credit rating of the long-term unsecured debt of the Guarantor assigned by
     the Rating Agencies immediately prior to such transaction and (y) a credit
     rating of the long-term unsecured debt of the resulting, surviving

                                       14
<PAGE>
     or succeeding entity assigned by the Rating Agencies that is Investment
     Grade; provided however, the foregoing credit rating condition set forth
     in this paragraph may be waived by the Owner Participant in its sole
     discretion, and provided further, that if such credit rating condition is
     not otherwise satisfied, or waived by the Owner Participant, the
     Guarantor, the surviving entity or the transferee, as the case may be, may
     provide in the alternative, either (A) a letter of credit from a L/C Bank
     with at least either (1) an A rating from S&P or (2) an A2 rating from
     Moody's, in either case, covering the Equity Portion of Termination Value
     from time to time throughout the Lease Term, or (B) alternative or
     additional credit support arrangements which result in the satisfaction of
     the rating condition in either clause (x) or clause (y) above, provided
     that such arrangements contemplated in this sub-clause (B) are
     satisfactory to the Owner Participant and result in the satisfaction of
     such rating condition.

           (b)   Upon the consummation of such transaction described in Section
3.6(a), the resulting, surviving or succeeding entity, if other than the
Guarantor, shall succeed to, and be substituted for, and may exercise every
right and power and shall perform every obligation of, the Guarantor under this
Guaranty and each other Calpine Document, and from and after the effective date
and time of the consummation of such transfer, the Guarantor shall be released
from all obligations accruing hereunder other than those accruing prior to such
effective date and time.

          Section 3.7.   The Guarantor shall, together with each payment it
makes hereunder, provide a written notice to each Beneficiary or Beneficiaries
which are the intended recipients of such payment of the amount payable to each
such Beneficiary and the Operative Document(s) with respect to which such
payment is being made.

SECTION 4. BENEFICIARIES; TERMINATION OF CERTAIN COVENANTS

          The Owner Participant, the Owner Lessor, the Trust Company (but
only to the extent indemnified under the Participation Agreement) and, so long
as the Lien of the Collateral Trust Indenture has not been terminated or
discharged, the Indenture Trustee and the Lease Indenture Company, and (but
only to the extent expressly referred to herein, and with respect to Section
3.2(a) hereof and with respect to the obligations of the South Point Lessee
under the Participation Agreement) the Pass Through Trustee (for the benefit of
the Certificateholders) and the Pass Through Company, in each case, together
with their respective permitted successors and assigns (and with respect to
clause (ii) below, the other related Persons referred to therein), are each
beneficiaries of this Guaranty (each a "Beneficiary" or, together, the
"Beneficiaries"); provided that, notwithstanding the foregoing or any other
provision of this Guaranty, (i) the Owner Participant shall be the sole and
exclusive beneficiary of, and shall have the sole right to enforce, (A) clause
(iv) of Section 3.6(a) hereof, (B) clause (4) of Section 2.1(a) hereof to the
extent relating to the South Point Lessee's indemnity obligation under the Tax
Indemnity Agreement, (ii) to the extent that the South Point Lessee is
obligated to indemnify a particular Beneficiary (or any Affiliate, agent
director, officer, or employee thereof) in accordance with Section 9 of the
Participation Agreement, then such Beneficiary (or such Affiliate, agent,
director, officer or employee) shall be the sole and

                                       15
<PAGE>
exclusive beneficiary of, and shall have the sole right to enforce, the
Guarantor's guaranty of, and agreement with respect to, such indemnification
obligation hereunder, (iii) the Owner Lessor and Indenture Trustee (as assignee
of Owner Lessor) shall be the sole and exclusive beneficiaries of, and shall
have the sole right to enforce, the fourth sentence of Section 2.1(b) hereof,
and (iv) the Indenture Trustee, the Lease Indenture Company, the Pass Through
Trustee and the Pass Through Company shall be the sole and exclusive
beneficiaries of the provisions of Section 3.4 and Section 3.5 hereof; provided
however, with respect to this clause (iv), once the Certificates shall have
been paid in full, the covenants set forth in Section 3.4 and Section 3.5
hereof shall, subject to the immediately following sentence, immediately and
without any further action terminate and be of no further force or effect. Any
amendment, waiver or modification of or supplement to Section 3.4 or Section
3.5 which is consented to by the Indenture Trustee shall be binding upon the
Owner Lessor and the Owner Participant. Notwithstanding the foregoing or
anything herein or in any of the Operative Documents to the contrary, if the
Owner Lessor shall have issued additional Lease Debt at the request of the
South Point Lessee in accordance with Section 11 of the Participation Agreement
prior to, simultaneously with, or after payment in full of the Certificates and
such new Lease Debt is outstanding on or after the date the Certificates are
paid in full, the covenants set forth in Section 3.4 and Section 3.5 shall, to
the extent required by the terms of such new Lease Debt, remain in effect or
thereafter become effective if not then in effect, but shall be for the sole
and exclusive benefit of, and enforceable solely by, the holder of such new
Lease Debt. Upon repayment of such new Lease Debt, or compliance with the terms
thereof, the covenants set forth in Section 3.4 and Section 3.5 shall
immediately and without further action terminate and be of no further force and
effect. Notwithstanding any of the preceding provisions, a breach of Sections
3.4 or 3.5 under this Guaranty at such time as such breach shall have become an
"Event of Default" under Section 7.1 shall constitute a Lease Event of Default
under the circumstances provided in, and to the extent set forth in, the
Facility Lease.

SECTION 5.   BENEFICIARIES' RIGHTS

          Each Beneficiary may at any time and from time to time without the
consent of, or notice to the Guarantor, without incurring responsibility to the
Guarantor and without impairing or releasing the obligations of the Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:

          (a)   change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew or alter, any of the Obligations due to
it, any security therefor, or any liability incurred directly or indirectly in
respect thereof, and, subject to clause (d) below, the guaranty and agreement
herein made shall apply to the Obligations due to it as so changed, extended,
renewed or altered;

          (b)   sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Obligations or any
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof due to it, and/or any offset thereagainst due to
it;

                                       16
<PAGE>
          (c)   exercise or refrain from exercising any rights against the
South Point Lessee or others or otherwise act or refrain from acting;

          (d)   settle or compromise any of the Obligations due to it, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether due
or not) of the South Point Lessee to its creditors other than the Guarantor;
provided that any settlement or compromise with respect to, or other reduction
(by operation of law or negotiation) of, any of the Obligations (or amounts
underlying such Obligations) due to it (whether occurring before or after the
occurrence of a Lease Event of Default) shall not alter the amount of the
original Obligations due to it guaranteed hereby and the Guarantor acknowledges
and agrees that its obligations hereunder shall be for the full amount of the
Obligations due to it without giving effect to any such settlement, compromise
or other reduction;

          (e)   apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the South Point Lessee to such Beneficiary
regardless of what liabilities or liabilities of the South Point Lessee remain
unpaid;

          (f)   consent to or waive any breach of, or any act, omission or
default under, the Participation Agreement or the Facility Lease, or otherwise
amend, modify or supplement the Participation Agreement or the Facility Lease
or any of such other instruments or agreements; and/or

          (g)   act or fail to act in any manner referred to in this Guaranty
which may deprive the Guarantor of its right to subrogation against the South
Point Lessee to recover full indemnity for any payments made pursuant to this
Guaranty.

Anything herein to the contrary notwithstanding, any exercise of rights or
remedies by any Beneficiary hereunder or under any other Operative Document or
the South Point Ground Lease, or the failure of any Beneficiary to exercise any
rights or remedies hereunder in accordance with the provisions hereof or under
any other Operative Document or the South Point Ground Lease, shall not in any
way adversely affect the ability of any other Beneficiary to exercise its
rights or remedies hereunder.

SECTION 6.   SURVIVAL OF GUARANTY AND PAYMENT AGREEMENT (SOUTH POINT (SP-1))

          Notwithstanding anything to the contrary herein, this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any of the amounts paid to any of the Beneficiaries, in whole or in part,
is required to be repaid upon the insolvency, bankruptcy, dissolution,
liquidation, or reorganization of the Guarantor or the South Point Lessee or
any other Person, or as a result of the appointment of a custodian,
interviewer, receiver, trustee, or other officer with similar powers with
respect to the Guarantor or the South Point Lessee or any other Person or any
substantial part of the property of the Guarantor or the South Point Lessee or
such other Person, all as if such payments had not been made.

                                       17
<PAGE>
SECTION 7.   DEFAULTS; REMEDIES; SUBROGATION

          Section 7.1.   Defaults. The following events shall constitute an
"Event of Default" hereunder (whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any Governmental Entity):

          (a)   the Guarantor or the South Point Lessee under the Facility
Lease shall fail to make any payment with respect to Periodic Rent or the
Termination Value (including the Equity Portion of Termination Value and Debt
Portion of Termination Value) when due and payable under such Facility Lease or
this Guaranty within five (5) days after the same shall become due thereunder;
or

          (b)   the Guarantor or the South Point Lessee shall fail to make any
other amount payable under any Operative Document after the same shall become
due thereunder and such failure shall have continued from a period of ten (10)
Business Days after receipt by the South Point Lessee and the Guarantor of
written notice of such failure by the South Point Lessee and/or the Guarantor,
as applicable;

          (c)   The Guarantor shall fail to comply with its covenants set forth
in Section 3.3 (transfer of South Point Lessee ownership), 3.6 (Guarantor
merger) or 8.4 (assignment of Guaranty) of this Guaranty.

          (d)   the Guarantor shall fail to perform or observe any covenant,
obligation or agreement to be performed or observed by it under any Calpine
Document (other than any covenant, obligation or agreement referred to in
clauses (a) or (b) of this Section 7.1) in any material respect, which shall
continue unremedied for (1) with respect to the Guarantor's guaranty of, and
agreement with respect to, any nonmonetary obligation, covenant or agreement of
the South Point Lessee under any of the Operative Documents or the South Point
Ground Lease, 30 days after receipt by the Guarantor of written notice thereof
from the Owner Participant, the Owner Lessor, the Indenture Trustee or the Pass
Through Trustee; provided, however, if such condition cannot be remedied within
such 30-day period, then the period within which to remedy such condition shall
be extended up to an additional 180 days, so long as the Guarantor diligently
pursues such remedy and such condition is reasonably capable of being remedied
within such additional 180-day period, and (2) with respect to any other
obligation, covenant or agreement hereunder, 30 days after receipt by the
Guarantor of written notice thereof;

          (e)   there shall have occurred either (i) a default by the Guarantor
or any Restricted Subsidiary under any instrument or instruments under which
there is or may be secured or evidenced any Indebtedness of the Guarantor or
any Restricted Subsidiary of the Guarantor (other than the Obligations) having
an outstanding principal amount of $50,000,000 (or its foreign currency
equivalent) or more individually or in the aggregate that has caused the
holders thereof to declare such Indebtedness to be due and payable prior to its
Stated Maturity, unless such declaration has been rescinded within 30 days or
(ii) a default by the Guarantor or any Restricted Subsidiary in the payment
when due of

                                       18
<PAGE>
any portion of the principal under any such instrument or instruments, and such
unpaid portion exceeds $50,000,000 (or its foreign currency equivalent)
individually or in the aggregate and is not paid, or such default is not cured
or waived, within any grace period applicable thereto, unless such Indebtedness
is discharged within 30 days of the Guarantor or a Restricted Subsidiary
becoming aware of such default;

          (f)   the Guarantor or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:

                (i)   commences a voluntary case;

                (ii)  consents to the entry of an order for relief against it in
                      an involuntary case;

                (iii) consents to the appointment of a Custodian of it or for
                      all or substantially all of its property;

                (iv)  makes a general assignment for the benefit of its
                      creditors; or

                (v)   admits in writing its inability to generally pay its debts
                      as such debts become due;

          or takes any comparable action under any foreign laws relating to
insolvency;

          (g)   an involuntary case or other proceeding shall be commenced
against the Guarantor or any Significant Subsidiary seeking (i) liquidation,
reorganization or other relief with respect to it or its debts under Title 11
of the Bankruptcy Code or any bankruptcy, insolvency or other similar law now
or hereafter in effect, or (ii) the appointment of a trustee, receiver,
liquidator, custodian or other similar official with respect to it or any
substantial part of its property or (iii) the winding-up or liquidation of the
Guarantor or such Significant Subsidiary; and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days;

          (h)   any representation or warranty made by the Guarantor herein
shall prove to have been incorrect in any material respect when made or
misleading in any material respect when made because of the omission to state a
material fact and such incorrect or misleading representation is and continues
to be material and unremedied for a period of 30 days after receipt by the
Guarantor of written notice thereof; provided, however, that if such condition
cannot be remedied within such 30-day period, then the period within which to
remedy such condition shall be extended up to an additional 60 days, so long as
the Guarantor diligently pursues such remedy and such condition is reasonably
capable of being remedied within such additional 60-day period.

          The grace periods set forth in Section 7.1(a) and (b) above shall
not affect in any way the right hereunder of any Beneficiary entitled to a
payment of any amount payable to it, or performance of any obligation, by the
South Point Lessee under any Operative

                                       19
<PAGE>
Document to demand prompt payment thereof, or performance thereof, by the
Guarantor immediately upon any failure of the South Point Lessee to pay or
perform the same when it has become due (and, for the avoidance of doubt,
without regard to the existence of any cure or grace period before such failure
by the South Point Lessee becomes a Lease Event of Default); provided, however,
notwithstanding the foregoing, no Lease Event of Default under Section 16(m)
and no remedies under the Facility Lease may be exercised until a Calpine
Guaranty Event of Default has occurred and is continuing.

          Section 7.2.   Remedies. Subject to the last paragraph of Section
7.1, each Beneficiary shall be entitled to (a) all rights and remedies to which
it may be entitled hereunder or at law, in equity or by statute and may proceed
by appropriate court action to enforce the terms hereof and to recover damages
for the breach hereof. Each and every remedy of the Beneficiaries shall, to the
extent permitted by law, be cumulative and shall be in addition to any other
remedy now or hereafter existing at law or in equity. At the option of each
Beneficiary and upon notice to the Guarantor, the Guarantor may be joined in
any action or proceeding commenced by such Beneficiary against the South Point
Lessee in respect of any Obligations and recovery may be had against the
Guarantor in such action or proceeding or in any independent action or
proceeding against the Guarantor, without any requirement such Beneficiary
first assert, prosecute or exhaust any remedy or claim against the South Point
Lessee. Notwithstanding any of the foregoing, if an Event of Default specified
in clause (e) or (f) of Section 7.1 with respect to the Guarantor occurs, all
monetary Obligations shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Owner Participant, the
Owner Lessor, the Indenture Trustee or the Pass Through Trustee.

          Section 7.3.   Subrogation. The Guarantor will not exercise any
rights that it may acquire by way of subrogation under this Guaranty, by any
payment made hereunder or thereunder or otherwise, until all of the Obligations
and all other obligations of the South Point Lessee and the Guarantor owing to
any of the Beneficiaries (or any other party) under the Operative Documents
shall have been paid in full. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the Obligations and
such other obligations shall not have been paid in full, such amount shall be
held in trust for the benefit of the Beneficiary to whom such Obligation or
other obligation is payable and shall forthwith be paid to such Beneficiary to
be credited and applied to such Obligation or other obligation, whether matured
or unmatured, in accordance with the terms of the Operative Document under
which such Obligation or other obligation arose. If (i) the Guarantor shall
make payment to any Beneficiary of all or any part of the Obligations or other
obligations and (ii) all the Obligations and such other obligations shall be
paid and performed in full, such Beneficiary will, at the Guarantor's request
and expense, execute and deliver to the Guarantor appropriate documents,
without recourse, subject to Section 6 hereof, necessary to evidence the
transfer by subrogation to the Guarantor of an interest in the Obligations and
such other obligations resulting from such payment by the Guarantor.

          Section 7.4.   Waiver of Demands, Notices, Etc.

                                       20
<PAGE>
          (a)   Without limiting the last sentence of Section 7.1, the
Guarantor hereby unconditionally waives (i) notice of any of the matters
referred to in the second sentence of Section 2.3 hereof; (ii) all notices
which may be required by statute, rule of law or otherwise, now or hereafter in
effect, to preserve any rights against the Guarantor hereunder, including,
without limitation, any demand, proof or notice of non-payment of any
Obligation; (iii) any right to the enforcement, assertion or exercise of any
right, remedy, power or privilege under or in respect of the Facility Lease (or
under or in respect of any other agreement including any Operative Document);
(iv) notice of acceptance of this Guaranty, demand, protest, presentment,
notice of default and any requirement of diligence; (v) any requirement to
exhaust any remedies or to mitigate any damages resulting from default by the
South Point Lessee or any Person under the Facility Lease (or under any other
agreement including any Operative Document); and (vi) any other circumstance
whatsoever which might otherwise constitute a legal or equitable discharge,
release or defense of a guarantor or surety, or which might otherwise limit
recourse against the Guarantor, other than satisfaction in full of the
Obligations.

          (b)   This Guaranty is a continuing one and all of the Obligations
shall be conclusively presumed to have been created in reliance hereon. No
failure or delay on the part of any Beneficiary in exercising any right, power
or privilege hereunder and no course of dealing among the Guarantor, any
Beneficiary or the South Point Lessee shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights, powers and remedies herein expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Beneficiary would otherwise have. No notice to or demand on the
Guarantor in any case shall entitle the Guarantor to any other further notice
or demand in similar or other circumstances or constitute a waiver of the
rights of any Beneficiary to any other or further action in any circumstances
without notice or demand.

          (c)   If a claim is ever made upon any Beneficiary for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Obligations and any of the Beneficiaries repays all or part of said amount
by reason of (a) any judgment, decree or order of any court or administrative
body having jurisdiction over such Beneficiary or any of its property or (b)
any settlement or compromise of any such claim effected by such Beneficiary
with any such claimant (including the South Point Lessee), then and in such
event the Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon it, notwithstanding any revocation hereof or
the cancellation of the Facility Lease or other instrument evidencing any
liability of the South Point Lessee, and the Guarantor shall be and remain
liable to the aforesaid Beneficiaries hereunder for the amount so repaid by or
recovered from such Beneficiary to the same extent as if such amount had never
originally been received by any such Beneficiary.

          Section 7.5.   Costs and Expenses. The Guarantor agrees to pay on an
After-Tax Basis any and all reasonable costs and expenses (including reasonable
legal fees) incurred by any Beneficiary in enforcing its rights under this
Guaranty.

                                       21
<PAGE>
          Section 7.6.   Survival of Remedies and Subrogation Rights. The
provisions of this Section 7 shall survive the term of this Guaranty and the
payment in full of the Obligations and the termination of the Operative
Documents.

SECTION 8.   MISCELLANEOUS

          Section 8.1.   Amendments and Waivers. No term, covenant, agreement
or condition of this Guaranty 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
the Guarantor and consented to by the Beneficiaries.

          Section 8.2.   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 the Guarantor hereto at its address set forth below or at such
other address as such party may from time to time designate by written notice:

     Calpine Corporation
     50 West San Fernando Street, 5th Floor
     San Jose, CA 95113

     Facsimile No.: (408) 975-4648
     Telephone No.: (408) 995-5115
     Attention: General Counsel

          Section 8.3.   Survival. Except as expressly set forth herein, the
warranties and covenants made by the Guarantor shall not survive the expiration
or termination of this Guaranty.

          Section 8.4.   Assignment and Assumption. (a) Except as provided in
clause (b) below, this Guaranty may not be assigned by the Guarantor to, or
assumed by, any successor to or assign of the Guarantor (it being understood
and agreed that a consolidation with or merger of the Guarantor into, or the
sale of all or substantially all of its assets to, another Person in accordance
with Section 3.6 shall not be deemed such an assignment or assumption for the
purposes hereof) without the prior written consent of the Beneficiaries, nor
may the Guarantor transfer or assign a majority (or more) of the Ownership
Interest in the South Point Lessee.

          (b)   Notwithstanding any of the foregoing in this Section 8.4, the
Guarantor may transfer a majority (or more) of its Ownership Interest in the
South Point

                                       22
<PAGE>
Lessee to a single third party, provided that the Guarantor assigns this
Guaranty to such third party (whereupon the Guarantor shall be released from
all obligations under this Guaranty in connection with such transfer) upon
satisfaction of the following conditions:

          (i)   unless the Owner Participant shall have consented to such
     assignment, such transferee, or a party which unconditionally guarantees
     such transferee's obligations under the Operative Documents assigned to
     such transferee (A) shall have significant experience owning or operating
     gas-fired electric generating facilities in the United Sates and (B) shall
     have a tangible net worth of at least $1 billion after giving effect to
     such transfer;

          (ii)   the requirements set forth in Section 3.3(i), (iii), (iv)
     and (v) of this Guaranty have been satisfied and, immediately after
     giving effect to such transfer, the transferee shall own at least a
     majority of the Ownership Interest of the South Point Lessee;

          (iii)   such transfer occurs (i) subsequent to the tenth year
     of the Facility Lease Term of the South Point Lessee and (ii) when the
     aggregate principal amount of the Lessor Notes is less than $50 million;

          (iv)   neither the transferee nor any Affiliate of the
     transferee shall be involved in any material litigation with the Owner
     Participant;

          (v)   the Rating Agencies shall have confirmed that after giving
     effect to such transfer, the Certificates (if then outstanding) and the
     transferee (or a party which guarantees such transferee's obligations
     under the Operative Documents assigned to such transferee) shall be rated
     at least Investment Grade (and not be on negative credit watch) by the
     Rating Agencies;

          (vi)   all the obligations of the South Point Lessee under the
     Operative Documents and the South Point Ground Lease shall remain in full
     force and effect, the transferee shall assume all the obligations of the
     Guarantor under the Operative Documents pursuant to the Guarantor
     Assignment and Assumption Agreement and such Operative Documents as so
     assumed shall remain in full force and effect, and any guaranty of such
     transferee's obligations pursuant to this Section 8.4 shall be in a form
     satisfactory to the Owner Participant (it being acknowledged and agreed
     that any such guaranty which shall be in form and substance substantially
     similar to this Guaranty shall be deemed to be satisfactory to the Owner
     Participant); and

          (vii)   the Owner Participant, the Owner Lessor and, so long as
     the Lien on the Collateral Trust Indenture shall not have been terminated
     or discharged, the Indenture Trustee and the Pass Through Trustee shall
     have received an Opinion of Counsel as to the satisfaction of the
     conditions set forth in clause (vi) of this Section 8.4(b).

                                       23
<PAGE>
          Section 8.5.   Governing Law. This Guaranty 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, other than New York General
Obligations Law Section 5-1401).

          Section 8.6.   Severability. Any provision of this Guaranty that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

          Section 8.7.   Headings. The headings of the sections of this
Guaranty are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof.

          Section 8.8.   Further Assurances. The Guarantor will promptly and
duly execute and deliver such further documents as may be reasonably requested
by the Owner Lessor, all as may be reasonably necessary to affirm the
Guarantor's obligations under this Guaranty.

          Section 8.9.   Effectiveness of Guaranty. This Guaranty has been
dated as of the date first above written for convenience only. This Guaranty
shall be effective on the date of execution and delivery by the Guarantor.

          Section 8.10.   Acknowledgment by the Guarantor. The Guarantor
acknowledges that an executed (or conformed) copy of the Participation
Agreement, the Facility Lease, the other Operative Documents and the South
Point Ground Lease have been made available to its principal executive officers
and such officers are familiar with the contents thereof.

          Section 8.11.   Tolling. Any acknowledgement or new promise, whether
by payment of principal or interest or otherwise and whether by the South Point
Lessee or others (including the Guarantor), with respect to any of the
Obligations shall, if the statute of limitations in favor of the Guarantor
against any Beneficiary shall have commenced to run, toll the running of such
statute of limitations, and if the period of such statute of limitations shall
have expired, prevent the operation of such statute of limitations.

          Section 8.12.   Consent to Jurisdiction; Waiver of Trail by Jury;
Process Agent.

          (a)   The Guarantor (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 the Guarantor 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 Guaranty, the Facility Lease, the other

                                       24
<PAGE>
Operative Documents, or the subject matter hereof or thereof or any of the
transactions contemplated hereby or thereby brought by any of the Beneficiaries
hereunder 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 Guaranty, the other Operative Documents, or the subject
matter hereof or thereof may not be enforced in or by such court.

          (b)   TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR HEREBY
IRREVOCABLY WAIVES THE RIGHT TO DEMAND A TRIAL BY JURY, IN ANY SUCH SUIT,
ACTION OR OTHER PROCEEDING ARISING OUT OF THIS GUARANTY, 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 BENEFICIARIES HEREUNDER OR
THEIR SUCCESSORS OR ASSIGNS.

          (c)   By the execution and delivery of this Guaranty, the Guarantor
designates, appoints and empowers National Registered Agent, Inc., 440 9th
Avenue, 5th Floor, New York, NY 10001 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 Guarantor shall remain outstanding hereunder or under any of
the other Operative Documents. The Guarantor shall grant an irrevocable power
of attorney to National Registered Agent, Inc. 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 Guarantor shall remain outstanding hereunder or under
any of the Operative Documents.

          Section 8.13.   Agreement for Benefit of Parties Hereto. Nothing in
this Guaranty, express or implied, is intended or shall be construed to confer
upon, or to give to, any person other than the parties hereto and their
respective successors and assigns, any right, remedy or claim under or by
reason of this Guaranty or any covenant, condition or stipulation hereof; and
the covenants, stipulations and agreements contained in this Guaranty are and
shall be for the sole and exclusive benefit of the parties hereto and their
respective successors and assigns. The Guarantor acknowledges that certain of
the rights of the Owner Lessor hereunder have been or shall be assigned to and
may be enforced by the Indenture Trustee pursuant to the terms of the
Collateral Trust Indenture (excluding, among other things, rights to Excepted
Payments), the Guarantor hereby consents to such assignment and the Guarantor
agrees to render performance of such assigned obligations directly to the
Indenture Trustee (as assignee of the Owner Lessor). The Guarantor agrees to
make all payments which have been so assigned owing to the Owner Lessor under
this Guaranty directly to the account of the Indenture Trustee to be specified
to the Guarantor in writing, or to such other account specified in writing from
time to time by the Indenture Trustee.

                                       25
<PAGE>
          Section 8.14.   Termination of Guaranty. Upon the full payment and
satisfaction of the Obligations and all of the Guarantor's obligations
hereunder, this Guaranty shall terminate and shall be of no further effect.
Nevertheless, this Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time, any payment, or any part thereof, of any of
the Obligations is rescinded or must otherwise be returned by any Beneficiary
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the South Point Lessee or otherwise, all as though such payment had not been
made.

          Section 8.15.   Additional Obligations. Upon the assumption by the
South Point Lessee of the Lessor Notes in connection with a termination of the
Facility Lease, as permitted therein, the obligation of the South Point Lessee
to pay principal of, and Make-Whole Amount if any, and interest on the Lessor
Notes, and amounts payable by it to the Indenture Trustee under the Collateral
Trust Indenture, shall thereupon become Obligations for all purposes of this
Guaranty, and the Guarantor shall therefor execute and deliver to the Indenture
Trustee such further guaranties, instruments and documents as the Indenture
Trustee may reasonably request in order to more fully effectuate the
Guarantor's unconditional guaranty of such additional Obligations.

          Section 8.16.   Miscellaneous Provisions. The payment obligations of
the Guarantor hereunder shall rank pari passu with all other senior unsecured
indebtedness of the Guarantor for borrowed money.

                          [No more text on this page]

                                       26
<PAGE>
          IN WITNESS WHEREOF, the parties have caused this Guaranty to be
duly executed and delivered on the day and year first above written.

                                           CALPINE CORPORATION,
                                           as Guarantor

                                           By:_____________________________
                                              Name:
                                              Title:
<PAGE>
                                           SOUTH POINT OL-1, LLC,
                                           a Delaware limited liability company

                                           By:_____________________________
                                              Name:
                                              Title:
<PAGE>
                                           SBR OP-1, LLC,
                                           a Delaware limited liability company

                                           By:______________________________
                                              Name:
                                              Title:
<PAGE>
                                           STATE STREET BANK AND TRUST COMPANY,
                                           National Association, not in its
                                           individual capacity but solely as
                                           Indenture Trustee

                                           By:_____________________________
                                              Name:
                                              Title:
<PAGE>
                                           STATE STREET BANK AND TRUST COMPANY,
                                           National Association, not in its
                                           individual capacity but solely as
                                           Pass Through Trustee

                                           By:_____________________________
                                              Name:
                                              Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}]]