Document:

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                                                                 Exhibit 4.22.30

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            CALPINE GUARANTY AND PAYMENT AGREEMENT (SOUTH POINT SP-4)

                          Dated as of October 18, 2001

                                     among

                              CALPINE CORPORATION,

                                  as Guarantor,

                                      and

                    SOUTH POINT OL-4, LLC, as Owner Lessor,

                      SBR OP-4, 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

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            CALPINE GUARANTY AND PAYMENT AGREEMENT (SOUTH POINT SP-4)

          This CALPINE GUARANTY AND PAYMENT AGREEMENT (SOUTH POINT SP-4), 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-4, LLC, a Delaware limited liability company, as Owner Lessor, SBR
OP-4, 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-4) 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-4, LLC,
as Owner Lessor, the Guarantor, SBR OP-4, LLC, as Owner Participant, State
Street Bank and Trust Company of Connecticut, N.A., 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, N.A., 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-4) 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-4) 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;

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          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

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(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

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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

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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

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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.

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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.

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          (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

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     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:

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          (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) Liens otherwise 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-4))

          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-4, LLC,
                                           a Delaware limited liability company

                                           By:__________________________________
                                              Name:
                                              Title:
<PAGE>
                                           SBR OP-4, LLC,
                                           a Delaware limited liability company

                                           By:__________________________________
                                              Name:
                                              Title:
<PAGE>
                                           STATE STREET BANK AND TRUST
                                           COMPANY, N.A., not in its individual
                                           capacity but solely as Indenture
                                           Trustee

                                           By:__________________________________
                                              Name:
                                              Title:
<PAGE>
                                           STATE STREET BANK AND TRUST
                                           COMPANY, N.A., not in its individual
                                           capacity but solely as Pass Through
                                           Trustee

                                           By:__________________________________
                                              Name:
                                              Title:<PAGE>
                                                                 Exhibit 4.22.31

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

            CALPINE GUARANTY AND PAYMENT AGREEMENT (BROAD RIVER BR-1)

                          Dated as of October 18, 2001

                                      among

                              CALPINE CORPORATION,

                                  as Guarantor,

                                      and

                    BROAD RIVER 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

                              BROAD RIVER PROJECT
<PAGE>
            CALPINE GUARANTY AND PAYMENT AGREEMENT (BROAD RIVER BR-1)

          This CALPINE GUARANTY AND PAYMENT (BROAD RIVER BR-1), dated as of
October 18, 2001 (the "Guaranty"), is entered into by and among Calpine
Corporation, a Delaware corporation, as guarantor (the "Guarantor"), BROAD
RIVER 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, Broad River Energy LLC (the "Broad River Lessee") is an
indirect wholly-owned subsidiary of the Guarantor;

          WHEREAS, the Broad River Lessee is a party to the Participation
Agreement (BR-1) dated as of October 18, 2001 (the "Participation Agreement"),
among the Broad River 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, Broad River 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 Broad River Lessee and the Owner Lessor are entering
into the Broad River (BR-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 Broad River Facility to the
Broad River Lessee as contemplated therein;

          WHEREAS, the Broad River Lessee and the Owner Lessor are entering
into the Broad River (BR-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 Broad River Lessee as contemplated therein;

                                      1
<PAGE>
          WHEREAS, the Guarantor will obtain benefits as a result of the Broad
River 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 Broad River Lessee of all of
the Broad River Lessee's obligations under the Operative Documents to which it
is a party and with respect to the FILOT Lease if the same shall not be
performed when due pursuant to the Operative Documents, including, without
limitation, but without duplication, (1) the Broad River 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 Broad River
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 FILOT Lease under and in accordance with the
Facility Lease, (3) without duplication of the preceding clause (2), the Broad
River Lessee's obligation to pay the Equity Portion of Periodic Rent and the
Equity Portion of Termination Value to the Owner Lessor, (4) the Broad River
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
Broad River 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 Broad River Lessee is a party and (6) the Broad River 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 Broad River Lessee's obligations under the Facility Lease or any other
Operative Documents or the FILOT Lease. The Guarantor agrees that it shall make
such payment notwithstanding the fact that the Broad River 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 Broad River 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 FILOT Lease, the
Guarantor agrees to cause such performance or observance to be done, and in the
case of any failure by the Broad River 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 Broad River 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 FILOT Lease) or the lack of power or authority of the Broad
River 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 FILOT Lease) to which the Broad River 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 contingent upon any

                                      5
<PAGE>
attempt to collect from the Broad River 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 Broad River
Lessee is a party, any release, extension or renewal of the Broad River
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 Broad River 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 Broad River 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 Broad River 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 Broad River Lessee is a party, (v) without limiting Section 3.6(b) hereof,
any merger or consolidation of the Broad River 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 Broad River Lessee or the Guarantor, or any change in the structure of the
Broad River Lessee or in the ownership of the Broad River 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 Broad
River 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 FILOT Lease in accordance with the Operative Documents and the
FILOT 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 Broad River 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 FILOT 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 at such time in light of the circumstances under
     which such information was

                                      8
<PAGE>
     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 FILOT 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 Broad River 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 Broad River 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 Broad River 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 Broad River Lessee
(provided that following such transfer the Guarantor shall continue to own at
least a majority of the Ownership Interest in the Broad River 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 Broad River Lessee under the Operative
     Documents and the FILOT 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 Broad River 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 Broad River 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) Liens otherwise 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 Broad River 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 Broad River Lessee's indemnity obligation under the Tax
Indemnity Agreement, (ii) to the extent that the Broad River 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
Broad River 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 Broad
River 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 Broad River 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 Broad River Lessee to such Beneficiary
regardless of what liabilities or liabilities of the Broad River 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 Broad
River 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 FILOT 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 FILOT 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
             (BROAD RIVER (BR-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 Broad River 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 Broad River Lessee or any other Person or any
substantial part of the property of the Guarantor or the Broad River 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 Broad River 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 Broad River 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 Broad River Lessee and the Guarantor of
written notice of such failure by the Broad River 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 Broad River 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 Broad River Lessee under any of the Operative Documents or the FILOT 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 Broad
River Lessee under any Operative

                                      19
<PAGE>
Document to demand prompt payment thereof, or performance thereof, by the
Guarantor immediately upon any failure of the Broad River 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 Broad River 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 Broad River
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 Broad River
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 Broad River 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 Broad River 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 Broad River 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 Broad River 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 Broad River 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 Broad River 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
Broad River

                                      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 Broad River Lessee;

          (iii) such transfer occurs (i) subsequent to the tenth year of the
     Facility Lease Term of the Broad River 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 Broad River Lessee under the Operative
     Documents and the FILOT 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 FILOT
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 Broad River
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 Broad River Lessee or otherwise, all as though such payment had not been
made.

          Section 8.15.   Additional Obligations. Upon the assumption by the
Broad River Lessee of the Lessor Notes in connection with a termination of the
Facility Lease, as permitted therein, the obligation of the Broad River 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>
                                           BROAD RIVER 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:

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