Document:

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                                                                   EXHIBIT 10.10

                                                                  EXECUTION COPY

                   MASTER OPERATION AND MAINTENANCE AGREEMENT

                                      AMONG

                    CALPINE OPERATING SERVICES COMPANY, INC.

                                       AND

                         CALPINE GENERATING COMPANY, LLC
                       AND ITS SUBSIDIARIES PARTY HERETO

                           DATED AS OF MARCH 23, 2004

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                                TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS....................................................      1
           1.1   Definitions..............................................      1
           1.2   General Terms............................................      1

ARTICLE 2. EXHIBITS.......................................................      2
           2.1   Exhibits.................................................      2
           2.2   Conflicting Provisions...................................      2

ARTICLE 3. APPOINTMENT; SERVICES..........................................      2
           3.1   Appointment..............................................      2
           3.2   Services.................................................      3
           3.3   Emergencies..............................................      4
           3.4   Operating Plan...........................................      4
           3.5   Subcontracts.............................................      5

ARTICLE 4. STANDARD OF SERVICES...........................................      6
           4.1   Standard of Operation....................................      6
           4.2   Liens....................................................      6

ARTICLE 5. PERSONNEL......................................................      6
           5.1   Plant Manager............................................      6
           5.2   Plant Personnel  ........................................      6
           5.3   Employee Compensation....................................      6
           5.4   Fire Prevention..........................................      6
           5.5   Drugs and Alcohol........................................      7
           5.6   Firearms and Animals.....................................      7

ARTICLE 6. INSPECTION.....................................................      7

ARTICLE 7. CHANGE ORDERS..................................................      7
           7.1   Change Orders............................................      7
           7.2   Agreement................................................      7
           7.3   Variations from the Budget...............................      8

ARTICLE 8. BUDGETS........................................................      8
           8.1   Budgets..................................................      8
           8.2   Prices For Work..........................................      8
           8.3   No Approved Budget.......................................      8
           8.4   Limitation on Expenditures...............................      9
           8.5   Escalation of Budgets....................................      9
           8.6   Budget Meetings..........................................      9
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ARTICLE 9.  COMPENSATION...................................................     9
            9.1   Compensation.............................................     9
            9.2   Reimbursable Expenses....................................     9

ARTICLE 10. PAYMENT........................................................    10
            10.1  Invoices.................................................    10
            10.2  Payment..................................................    10
            10.3  Notice of Payment Disputes...............................    10
            10.4  Late Payments............................................    10
            10.5  Audit....................................................    11

ARTICLE 11. RESPONSIBILITIES OF COMPANY....................................    11
            11.1  General..................................................    11
            11.2  Notice of Completion.....................................    11
            11.3  Easements................................................    11
            11.4  Facilities...............................................    11
            11.5  Approval.................................................    11
            11.6  Parts and Tools..........................................    11
            11.7  Information..............................................    11
            11.8  Taxes....................................................    12
            11.9  Insurance................................................    12
            11.10 Utilities................................................    12

ARTICLE 12. INDEPENDENT CONTRACTOR.........................................    12

ARTICLE 13. TERM AND TERMINATION...........................................    12
            13.1  Term.....................................................    12
            13.2  Termination..............................................    13
            13.3  Termination Dispute......................................    13
            13.4  Termination for Convenience..............................    13
            13.5  Facility Condition at End of Term........................    14
            13.6  Termination Payment......................................    14
            13.7  Effect of Termination....................................    14

ARTICLE 14. INDEMNIFICATION; LIMITATION OF LIABILITY.......................    15
            14.1  Operator Indemnification.................................    15
            14.2  Company Indemnification..................................    15
            14.3  Environmental Indemnification............................    15
            14.4  Limitation of Liability..................................    15
            14.5  Limitations on Recourse..................................    16
            14.6  Expressed Warranty.......................................    16
            14.7  Survival.................................................    16

ARTICLE 15. INSURANCE......................................................    16
            15.1  Company's Insurance......................................    16
            15.2  Operator's Insurance.....................................    16
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            15.3  Evidence of Insurance....................................    17
            15.4  Endorsements ............................................    17
            15.5  Coverage under Company's Policies........................    17

ARTICLE 16. DISPUTE RESOLUTION.............................................    17
            16.1  Procedure................................................    17
            16.2  Arbitration..............................................    17
            16.3  Fees and Expenses........................................    18
            16.4  No Interruption..........................................    18

ARTICLE 17. FORCE MAJEURE..................................................    18
            17.1  Excuse for Force Majeure.................................    18
            17.2  Legal Changes............................................    18

ARTICLE 18. PROPRIETARY DATA...............................................    18

ARTICLE 19. REPRESENTATIONS AND WARRANTIES.................................    19

ARTICLE 20. MISCELLANEOUS..................................................    19
            20.1  Assignment...............................................    19
            20.2  Governing Law............................................    19
            20.3  Entire Agreement; Amendments.............................    20
            20.4  Waivers..................................................    20
            20.5  Notices..................................................    20
            20.6  No Third Party Benefits..................................    21
            20.7  Title to Materials.......................................    21
            20.8  Partial Invalidity.......................................    21
            20.9  Headings.................................................    21
            20.10 Counterparts.............................................    21
            20.11 Separate Agreements......................................    21
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APPENDIX A             Definitions

APPENDIX B             Facility Descriptions

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                                                                  EXECUTION COPY

                   MASTER OPERATION AND MAINTENANCE AGREEMENT

            THIS MASTER OPERATION AND MAINTENANCE AGREEMENT (the "Agreement"),
dated as of March 23, 2004 (the "Effective Date"), is entered into by and
between CALPINE GENERATING COMPANY, LLC, a Delaware limited liability company
("CGC"), the indirect wholly-owned subsidiaries of CGC listed on the signature
page hereof (each a "Facility Owner" or the "Company"), and CALPINE OPERATING
SERVICES COMPANY, INC., a Delaware corporation ("Operator").

                                    RECITALS

            A.    The Facility Owners own those fourteen gas-fired,
combined-cycle electric generation facilities described on Appendix B attached
hereto (each a "Facility").

            B. The Facility Owners are indirect, wholly-owned subsidiaries of
CGC.

            C.    Each Facility Owner desires to enter into this Agreement with
Operator pursuant to which Operator shall provide the Services with respect to
each Facility Owner's Facility, as more fully described herein.

            D.    Company and Operator have agreed to set forth their agreement
regarding the Services to be provided for each Facility in this single
Agreement, but the Agreement is intended to apply separately and independently
to each Facility, as described below.

            NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and other valuable consideration, the parties hereto
agree as follows:

ARTICLE 1. DEFINITIONS

            1.1   Definitions. Capitalized terms used in this Agreement without
other definition shall have the meanings specified in Appendix A to this
Agreement, unless the context requires otherwise.

            1.2   General Terms. As used in this Agreement, the terms "herein,"
"herewith," and "hereof" are references to this Agreement, taken as a whole, the
term "includes" or "including" shall mean "including, without limitation," and
references to a "Section," "subsection," "clause," "Article," "Exhibit,"
"Appendix," or "Schedule" shall mean a Section, subsection, clause, Article,
Exhibit, Appendix or Schedule of this Agreement, as the case may be, unless in
any such case the context requires otherwise. All references to a given
agreement, instrument or other document shall be a reference to that agreement,
instrument or other document as modified, amended, supplemented and restated
through the date as of which such reference is made, and reference to a Law
includes any amendment or modification thereof. The singular shall include the
plural and the masculine shall

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include the feminine and neuter, and vice versa. Where the words "required,"
"approved," "satisfactory," "determined," "acceptable," "decision" or words of
like import are used in this Agreement, action by the Company is indicated
unless the context clearly indicates otherwise.

ARTICLE 2. EXHIBITS

            2.1   Appendix and Exhibits. This Agreement consists of this
document itself and the following Appendices which are specifically made a part
hereof by reference:

      APPENDIX A Definitions
      APPENDIX B Description of Facilities

            2.2   Conflicting Provisions. In the event of any conflict between
this document and any Appendix, schedule or exhibit hereto, the terms and
provisions of this document, as amended from time to time, shall control. In the
event of any conflict among the Appendices, the following order of priority
shall apply as among the Appendices: Appendix A and Appendix B. Subject to the
foregoing, the several instruments forming part of this Agreement are to be
taken as mutually explanatory of one another and in the case of ambiguities or
discrepancies within or between such parts the same shall be explained and
adjusted by the issuance of a written instruction by Company.

ARTICLE 3. APPOINTMENT; SERVICES

            3.1   Appointment.

            (a)   Subject to Sections 3.1(b) and 3.1(c) below, each Facility
Owner hereby appoints and retains Operator to carry out, throughout the Term,
the Services for each of the Facilities, including mobilizing in preparation for
carrying out the Services on the terms and conditions of this Agreement.
Operator hereby accepts such appointment and agrees to perform the Services in
accordance with the terms and conditions of this Agreement. This Agreement,
including all exhibits and attachments, shall constitute a separate contract
between each Facility Owner and Operator with respect to the Facility owned by
such Facility Owner, and "Facility Owner" shall be understood to mean the owner
of such Facility as indicated on Appendix B. Operator and each Facility Owner
agree that, upon the reasonable request of either party, they will execute
separate individual operation and maintenance agreements with respect to such
Facility Owner's Facility on the same terms and conditions (modified as
necessary to reflect the fact that only one Facility is covered) as are set
forth in this Agreement. The obligations and liabilities of Operator and the
applicable Facility Owner with respect to a given Facility are independent of
the obligations and liabilities of Operator and the other Facility Owners with
respect to the other Facilities, and events giving rise to a right to terminate
this Agreement with respect to one Facility shall not entitle Company or
Operator, as applicable, to terminate this Agreement with respect to any other
Facility.

            (b)   The Parties acknowledge that the Columbia Energy Center
Facility, the Pastoria Energy Center Facility and the Goldendale Energy Center
Facility have not yet achieved commercial operation and agree that Operator's
Services with respect to each of these Facilities will not commence until the
applicable Facility is ready to be started up and begin operation.

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            (c)   If CGC sells or otherwise transfers a Facility subject to this
Agreement, Company shall the right to terminate this Agreement with respect to
such Facility and the related Facility Owner (it being understood that a sale
in violation of agreements between the Company and the holders of the Secured
Obligations or a foreclosure on one or more of the Facilities by the holders of
the Secured Obligations does not constitute a sale by the Company for purposes
of this Section 3.1(c)). In such event, CGC, the applicable Facility Owner(s)
and Contractor shall amend this Agreement to add or delete such Facility and the
related Facility Owner, as applicable. If the Company sells or otherwise
transfers a Facility and elects to terminate this Agreement as provided above,
this Agreement shall not apply to such Facility and the related Facility Owner
from and after the effective date of such sale, and CGC, the applicable Facility
Owner and Operator will be released from all future liabilities, and will no
longer have any obligations, hereunder with respect to such Facility.

            3.2   Services. Subject to Sections 3.1(b) and 3.1(c), Operator
shall operate and maintain the Facilities in accordance with the standards
described in Section 4.1 below and perform, or cause to be performed, on behalf
of the applicable Facility Owner all customary and reasonable operating and
maintenance services provided by operators of power plants similar to the
Facilities, including the services described in this Section 3.2 with respect to
each Facility (the "Services"); provided, however, that the Services shall not
include any services provided or to be provided under the Administrative
Services Agreement. From and after the Effective Date, Operator shall:

            (a)   Advertise for, interview and hire qualified staff to operate
each Facility;

            (b)   Conduct orientation programs for new employees which describe
Operator's personnel policies, procedures and training programs;

            (c)   Train the staff;

            (d)   Prepare an Operating Plan, as described in Section 3.4;

            (e)   Develop a reasonable spare parts inventory lists and purchase
office equipment, initial tools, spare parts, and supplies to operate the plant;

            (f)   Operate and manage each Facility in accordance with the
Operating Plan and in compliance with all applicable Laws;

            (g)   Propose a budget for the approval of Company in accordance
with Section 8;

            (h)   Provide procurement services with respect to all materials
(except fuel), supplies, parts, equipment, vehicles, and other items and
inventory necessary for the operation and maintenance of each Facility;

            (i)   Prepare and maintain for the review of the Facility Owner
complete written operating instructions and maintenance procedures as required
(including a Maintenance Program, an Operating Program, a Safety Program and a
Water Treatment Program); identify facility improvements; plan changes; and
budget, schedule, and manage outage work;

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            (j)   Maintain an emergency response plan for each Facility, and
take such actions and implement such procedures as Operator deems necessary to
provide reasonable safety and security for each Facility;

            (k)   Perform, or cause to be performed by Subcontractors, all
ordinary maintenance (not including Major Maintenance) for the Facility in
accordance with the Operating Plan and the Maintenance Program;

            (l)   Prepare, in connection with the Operating Plan, an annual
schedule of anticipated fuel use, and advise the Facility Owner in a timely
manner as to changes in fuel requirements;

            (m)   Schedule, in coordination with the parties to the Power Sales
Contracts, power outages and maintenance shutdowns to minimize revenue loss;

            (n)   Collect data for reporting to permitting and licensing
agencies, including the Federal Energy Regulatory Commission, and prepare and
submit the required reports;

            (o)   Prepare a Hazardous Substances Plan for each Facility, update
such plan from time to time as appropriate, and observe the provisions of the
Hazardous Substance Plan applicable to such Facility;

            (p)   Maintain complete and accurate records of all activities
relating to each Facility, and provide monthly reports regarding the operation
and maintenance of each Facility to the Facility Owner;

            (q)   Enforce and represent Company in connection with its claims
under contractor's and manufacturer's warranties;

            (r)   Timely pay each Facility's vendors for the goods and services
they provide, unless Operator in good faith disputes any amounts due and reports
such dispute to the Facility Owner; and

            (s)   Provide such additional reports, certificates, invoices and
other information as Company may from time to time require.

            3.3   Emergencies. Notwithstanding any other provision of this
Agreement, if Operator believes in good faith that an Emergency exists at a
Facility and that changes or modifications in the Services for that Facility are
required to avoid or mitigate losses from such Emergency, Operator may make such
changes or modifications to the extent required by such Emergency. Operator
shall promptly notify Company of the Emergency, the remedial and preventive
measures taken, the costs incurred, and, if appropriate, proposals to modify
procedures or services in light of the circumstances resulting in the Emergency.

            3.4   Operating Plan. In furtherance of its general responsibilities
described elsewhere this Agreement, Operator shall have the following planning
responsibilities for each Facility:

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            (a)   Not less than sixty (60) Days prior to the respective
anticipated commercial operation dates of the Columbia Energy Center Facility,
the Pastoria Energy Center Facility and the Goldendale Energy Center Facility,
and within thirty (30) Days after the Effective Date with respect to the other
Facilities, and not less than sixty (60) Days prior to the end of each
subsequent Calendar Year, Operator shall prepare and submit for Company's
approval a detailed plan for the operation and maintenance (including both
routine and major maintenance) of each Facility, in each case for the following
Calendar Year. Unless otherwise agreed by Company and Operator, such plan shall
be divided into three principal categories: (i) routine operation and
maintenance, (ii) Major Maintenance and (iii) Capital Expenditures. The plan
shall include descriptions, rationales and procedures for both routine operation
or maintenance and for major maintenance, a description of projected results
from operations, including a schedule for meeting significant milestones, a
schedule of major maintenance outages for the upcoming Calendar Year, a
projection of heat rate, staffing plan and other organizational details,
including a description of the personnel required to achieve the results and
milestones, and such other matters as may be requested by Company. The Major
Maintenance and Capital Expenditures portions of such plan shall include
projections for scheduled inspections and overhauls and for Capital Expenditures
for each Facility over the next six years.

            (b)   Operator shall consult with Company as it may request
regarding the assumptions and projections underlying the Operator's proposed
plan for each Facility. Company shall, within thirty (30) Days following the
receipt of Operator's proposed plan for a Facility, either accept the proposed
plan or modify the proposed plan; provided, however, that no modification may be
made which impairs Operator's ability to deliver Services for such Facility in
accordance with the standards set out at Section 4.1.

            (c)   Upon approval of a proposed plan by Company or upon its
modification by Company as provided in Section 3.4(d), the plan as approved or
modified shall be deemed to be the "Operating Plan" for the applicable Facility
for purposes of this Agreement and shall be implemented and carried out by
Operator in accordance with the terms and conditions of this Agreement. Operator
shall continue to operate each Facility in accordance the most recently approved
Operating Plan for such Facility until such time as a revised plan has been
approved by Company.

            (d)   From time to time during any Calendar Year, Company may, upon
consultation with Operator and by notice to Operator given not less than thirty
(30) Days prior to the effective date thereof, propose to amend the then current
Operating Plan for a Facility. Such notice shall be deemed to be a Change Order
with respect to such Facility as provided in Section 7.

            3.5   Subcontracts. Operator may subcontract with qualified
Subcontractors, including Affiliates of Operator, for such routine or
non-routine, work as is necessary to perform scheduled or unscheduled
maintenance and repairs, annual inspections and equipment overhauls.
Subcontracting shall not relieve Operator of any of its duties hereunder.
Operator shall not enter into any subcontract for the day-to-day operation or
the routine daily maintenance of a Facility without Company's prior written
approval. All subcontracts between Operator and its Affiliates shall be on terms
and conditions that are no less favorable to Company than would be obtained from
unaffiliated third parties.

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ARTICLE 4. STANDARD OF SERVICES

            4.1   Standard of Operation. Operator shall perform the Services for
each Facility in all respects in accordance with: (i) all applicable Laws, (ii)
Prudent Engineering and Operating Practices, (iii) each Facility's and Facility
Owner's regulatory status, (iv) all safety, fire protection and other
requirements of each Facility's insurance policies, (v) the applicable
requirements of any Power Sales Contracts, and (vi) Company's obligations with
respect to any warranties related to the applicable Facility.

            4.2   Liens. Operator shall not permit or suffer any liens or
encumbrances on any Facility arising from the Services hereunder.

ARTICLE 5. PERSONNEL

            5.1   Plant Manager. A duly authorized Plant Manager shall represent
Operator at each Facility at all times, beginning as of the Effective Date with
respect to all of the Facilities except the Columbia Energy Center Facility, the
Pastoria Energy Center Facility and the Goldendale Energy Center Facility
(Services with respect to such Facilities commencing as set forth in Section
3.1(b)) and continuing for the balance of the Term. Each Plant Manager, and each
successor Plant Manager, shall be named by Operator by written notice to
Company, but each such nomination shall be subject to approval by Company, which
approval shall not be unreasonably withheld. Unless Company identifies its
reasons for not approving any person nominated to be Plant Manager in a notice
to Operator delivered within ten (10) Days following Company's receipt of
written notice of such person's nomination by Operator, such person shall be
deemed approved by Company.

            5.2   Plant Personnel. All personnel of Operator providing services
hereunder shall (a) meet minimum job qualifications associated with their
respective positions as determined by Operator, (b) possess experience and
training at least equal to standards generally set within the independent power
industry to carry out the tasks assigned (including, without limitation,
training with respect to handling of hazardous wastes, as Company deems
appropriate, and safety and industrial hygiene as appropriate), and (c) be
trained in accordance with the standards set forth in the Maintenance Program
for the applicable Facility. Operator shall employ competent and experienced
personnel, wherever practicable giving preference to qualified local residents.
Operator shall dedicate sufficient personnel to each Facility throughout the
Term to enable Operator to perform its obligations hereunder.

            5.3   Employee Compensation. The working hours, rates of
compensation and all other labor matters relating to the performance of the
Services by Operator's employees for each Facility shall be determined solely by
Operator, but in a manner consistent with industry standards and rates and the
O&M Budget for the applicable Facility.

            5.4   Fire Prevention. Operator's personnel shall be trained in the
basic elements of fire protection, including measures to ensure the safety of
personnel, the handling of minor fires and situations which may result in a
fire, and in emergency procedures for contacting and obtaining outside fire
fighting capabilities.

<PAGE>

            5.5   Drugs and Alcohol. No personnel of Operator on any Facility
Site shall be under the influence of, or in possession of, any alcoholic
beverage or controlled substance (except as prescribed by a physician, so long
as the performance or safety of the Facility is not affected thereby). Operator
shall implement, maintain and enforce a written alcohol and drug abuse policy
with respect to its personnel, as may from time to time be revised consistent
with Operator's corporate policy. Upon any request by Company, a copy of such
policy then in effect shall be provided to Company.

            5.6   Firearms and Animals. Except as agreed to in writing by
Company and Operator, no personnel of Operator or Company shall carry firearms,
weapons, or explosives on any Facility Site, have animals on any Facility Site,
or have any of the above in vehicles on any Facility Site.

ARTICLE 6. INSPECTION

            Company and its representatives shall have access at all reasonable
times to the Facility Sites, Facility operations, and, upon reasonable notice,
documents, materials, records and accounts relating to Facility operations, all
for purposes of inspection and review. During any inspection or review, Company
and its representatives shall comply with all of Operator's safety and security
procedures, and to conduct any inspection or review in a manner causing minimum
interference with Operator's activities. Operator shall cooperate with Company
in allowing other visitors access to the Facility Sites under conditions
mutually agreeable to the parties.

ARTICLE 7. CHANGE ORDERS

            7.1   Change Orders. If at any time during any Calendar Year, either
Operator or Company desires to amend in a material respect the then current
Operating Plan for a Facility for any bona fide purpose, then such party shall
first provide the other party with a notice in writing requesting such
amendment. Within twenty (20) Days of such notice, Operator shall notify Company
of the anticipated increase or decrease in the O&M Budget for such Facility and
the anticipated extent of changes required to the Operating Plan for such
Facility in connection with implementation of such change. Unless implementation
of a Change Order is necessary to avoid or mitigate losses in connection with an
Emergency or liability resulting from a Changed Circumstance, Operator shall not
be permitted or required to materially deviate from the Operating Plan for the
Facility in question until Company and Operator have agreed upon the terms of
the Change Order. If a Change Order is required as a result of an Emergency,
Operator may implement measures necessary to avoid or mitigate losses to such
Facility, but shall obtain Company's approval before incurring expenditures in
excess of fifteen percent (15%) of the current O&M Budget.

            7.2   Agreement. Company and Operator shall endeavor diligently to
reach agreement upon the terms of a Change Order within thirty (30) Days after
the date of receipt of the Change Order request. If agreement is not reached
within that period, the matter will be submitted to the dispute resolution
procedure set forth in Section 16. Notwithstanding any other provision of this
Agreement, in the event of a Changed Circumstance affecting a Facility, Operator
shall not be deemed to be in default of its obligations hereunder for failure to
provide

<PAGE>

Services for such Facility in compliance with Sections 3.2 and 4 of this
Agreement if Company fails to approve a Change Order requested by Operator as a
result of such Changed Circumstance.

            7.3 Variations from the Budget. After variations from the O&M Budget
or changes in the Operating Plan, as appropriate, have been determined pursuant
to Section 7.2, the Change Order shall be signed by both parties and shall
contain a detailed description of the change in the Operating Plan and of any
changes in compensation to Operator required thereby. Upon approval of each
Change Order, the variations from the O&M Budget shall be deemed approved, and
the Operating Plan for the applicable Facility shall be deemed to be so amended.

 ARTICLE 8.   BUDGETS

            8.1   Budgets. In connection with the preparation of the annual
Operating Plan pursuant to Section 3.4, Operator shall also prepare and submit
to Company a proposed annual budget for each Facility for the following Calendar
Year (prepared in monthly detail and in then current dollars) based on the
Operating Plan for each Facility, and Operator's estimate of other costs and
expenses, including work and services provided hereunder on a cost reimbursable
basis. Company shall promptly review Operator's proposed annual budgets and may
request in writing changes, additions, deletions and modifications. Company and
Operator will then meet to agree upon final budgets for each Facility for the
following Calendar Year (for each Facility, such Facility's "O&M Budget") which
shall be subject to approval in writing by both parties. Company's approval of a
final O&M Budget for a Facility must include approval by a director or
financial officer of CGC. An approved final O&M Budget shall remain in effect
for each Facility throughout the applicable Calendar Year, subject to adjustment
or revision as set forth in Sections 8.3, 8.4 and 8.5.

            8.2   Prices For Work. All work and Services provided hereunder will
be provided on a cost reimbursable basis, including reasonable overhead costs.
Operator shall use commercially reasonable efforts to keep third party costs
incurred to reasonable levels, consistent with market prices. Costs payable to
Operator and its affiliates shall not, in the aggregate, exceed costs for
similar goods or services that would normally be charged by unrelated third
parties and shall in no event exceed the prices that Operator charges to
unrelated third parties for such goods or services. The Services provided by
Operator hereunder are for routine operation and maintenance activities. Major
Maintenance activities are covered by a separate agreement between Company and
Operator and are not subject to this Agreement. If Company desires to make
Capital Expenditures, Company and Operator must separately agree on the services
to be provided and the charges therefor.

            8.3   No Approved Budget. If Company has not approved Operator's
proposed O&M Budget for a Facility for a new Calendar Year, or if Operator has
failed to provide such budget in accordance with Section 8.1:

                  (a)   Operator shall nonetheless perform the Services for such
Facility based on the existing O&M Budget for that Facility, as adjusted
pursuant to Section 8.5, except that Operator shall only carry out Capital
Expenditures to such Facility (i) to the extent contracted for with third
parties, and budgeted for in a prior Calendar Year and either reserved

<PAGE>

for or with capital committed by Company, (ii) if such improvements constitute
improvements necessary or appropriate in light of an Emergency as provided in
Section 3.3 (subject to the limitations of Section 8.4), or (iii) if such
improvements are mutually agreed upon by the parties at such time; and

                  (b)   Subject to mutually agreed upon adjustments, Operator
shall be compensated for such Services in accordance with the existing O&M
Budget for such Facility, as adjusted pursuant to Section 8.5, with respect to
all other Services. When an O&M Budget for a Facility is approved after
commencement of the Calendar Year, it shall immediately become effective, and
shall include any adjustments necessary to make it retroactive to the first day
of the Calendar Year.

            8.4   Limitation on Expenditures. The O&M Budget for each Calendar
Year for each Facility shall constitute the control document for that Facility
pursuant to which Operator shall incur expenses on behalf of Company with
respect to such Facility. If at any time during the Calendar Year for a
Facility Operator anticipates an O&M Budget overrun for such Calendar Year in
the aggregate of 15% or greater of the fixed operating expenses (i.e. not
including fuel or other variable expenses and not including costs and expenses
incurred in connection with an Emergency), Operator shall so notify Company in
writing and shall prepare a proposed Change Order for such Facility
incorporating such variation from the affected O&M Budget;

            8.5   Escalation of Budgets. In the absence of contrary information,
the estimated cost of Services for a preliminary O&M Budget shall be made by
increasing each Expense Category in such O&M Budget related to such Services by
the product derived from multiplying each such amount by the Escalation Quotient
for the Calendar Year in which the adjustment occurs, or if the indices for such
year have not yet been published, by the Escalation Quotient derived by using
the indices most recently published as of the date of calculation.

            8.6   Budget Meetings. At Company's request Operator shall meet with
Company

                  (a)   not less frequently than quarterly, to review Operator's
performance under the O&M Budget and Operating Plan for each Facility for such
Calendar Year, and to consider upcoming Capital Expenditures under the O&M
Budget for such Facility and further actions to be taken by Operator in
implementing such Operating Plan; and

                  (b)   from time to time, on an informal basis as reasonably
requested by Company, to review such aspects of Operator's performance with
respect to a Facility as Company specifies.

ARTICLE 9. COMPENSATION

            9.1   Compensation. Operator shall be compensated for the Services
on a cost reimbursable basis, including reasonable overhead costs, as described
in Section 8.2.

            9.2   Reimbursable Expenses. Operator shall be reimbursed for all
costs (including internal costs and amounts paid to third parties) incurred for
Services as provided in

<PAGE>

Article 8. In lieu of making direct payment itself of any costs or expenses
owed to suppliers, vendors, service providers or other third parties for goods
and services provided to the Facilities in connection with the Services
hereunder, Operator may request that Company pay such costs and expenses
directly to such suppliers, vendors, service providers and other third parties,
in which event Company shall do so in a timely manner, provided that such costs
and expenses do not exceed the amounts provided therefor in the O&M Budget (plus
any amounts permitted under Section 8.4). Operator shall give Company as much
prior notice as reasonably possible (which need not exceed thirty (30) Days) in
the event it requests such direct payment by Company and shall review and
approve all invoices from suppliers, vendors, service providers and other third
parties prior to submitting them to Company for payment. No amounts directly
paid by Company as provided herein may be recovered by Operator under this
Section 9.2.

ARTICLE 10. PAYMENT

            10.1  Invoices. Within ten (10) Days after the last Day of each
month after the Effective Date (or, in the case of the Columbia Energy Center
Facility, the Pastoria Energy Center Facility and the Goldendale Energy Center
Facility, the date Services hereunder commence with respect to each such
Facility pursuant to Section 3.1(b)) during the Term, Operator shall send
Company an invoice for each Facility setting forth in reasonable detail the
amount of costs and expenses to be reimbursed and Operator's overhead costs for
such Facility for such preceding month, accompanied by such supporting
documentation and additional data as Company may reasonably request.

            10.2  Payment. Subject to Sections 9.2 and 10.3, within twenty (20)
Days following the date Company receives an invoice for a Facility under Section
10.1, Company shall pay to Operator the undisputed amount of the invoice. All
payments to Operator shall be made by wire transfer to the account of the
Operator, or such other depository as Operator shall designate by written notice
to Company. Any amounts owing from Operator to Company hereunder with respect to
a particular Facility may at Company's option be credited against amounts owing
by Company to Operator hereunder with respect to such Facility.

            10.3  Notice of Payment Disputes. Notwithstanding the foregoing, if
prior to the expiration of the applicable period for payment referenced in
Section 10.2, Company disputes that the quality of any Services provided for a
particular Facility is in accordance with this Agreement, Company shall, prior
to the expiration of such period, provide Operator with written notice
identifying the basis for such dispute. Thereafter, the payment of such disputed
amounts shall be deferred until such dispute has been resolved to the
satisfaction of Company and Operator. Any dispute which is not resolved by
mutual agreement may be resolved in accordance with Section 16.

            10.4  Late Payments. If there is a dispute about any amount invoiced
by Operator, the amount not in dispute shall be promptly paid as described in
this Section 10. Any disputed amounts which are ultimately determined to have
properly payable, as well as any undisputed amounts not paid when due, shall be
paid with interest at the lower of (a) the Reference Rate plus two percent (2%),
or (b) the highest rate permitted under applicable law.

<PAGE>

            10.5  Audit. Operator shall, throughout the Term of this Agreement
and for thirty-six (36) months following the expiration or earlier termination
hereof with respect to each Facility, maintain readily accessible books and
records of the costs and expenses incurred for such Facility (including copies
of supporting invoices) incurred in connection with this Agreement. Company may,
from time to time and upon reasonable notice to Operator, review (or cause its
auditors to review), such books and records.

ARTICLE 11. RESPONSIBILITIES OF COMPANY

            11.1  General. Company shall furnish, or cause to be furnished, to
Operator, at Company's expense, such information, documentation, services,
materials and other items described in this Article 11 with respect to each
Facility, together with such other items that are not required to be provided by
Operator hereunder and which are reasonably requested by Operator to perform the
Services for the applicable Facility and to otherwise fulfill its obligations
under this Agreement. All such items shall be made available at such times and
in such manner as may be required for the expeditious and orderly performance of
the Services by Operator.

            11.2  Notice of Completion. Company shall give immediate written
notice to Operator of the occurrence of the commercial operation date for the
Columbia Energy Center Facility, the Pastoria Energy Center Facility and the
Goldendale Energy Center Facility.

            11.3  Easements. Company shall obtain and maintain throughout the
Term of this Agreement all franchises, easements, rights-of-way, permits and
licenses necessary to allow the applicable Facility to operate as contemplated
under this Agreement.

            11.4  Facilities. Company shall provide necessary facilities at each
Facility for Operator's use in performing the Services for such Facility,
including a furnished and completely equipped office facility, a completely
equipped shop facility to adequately conduct maintenance activities, and a
storage warehouse for spare parts, chemicals, consumables and supplies, which
storage is adequate to protect the same from damage or destruction.

            11.5  Approval. Company shall bear responsibility for reviewing and
approving all required plans, budgets, and schedules for each Facility in a
timely fashion.

            11.6  Parts and Tools. Company shall provide Operator an initial
supply of spare parts, tools, supplies and consumables for each Facility, and
all equipment, vehicles and operations manuals and procedures that are available
for such Facility, and shall provide, consistently with the inventory lists
prepared by Operator pursuant to Section 3.2(e), any additional spare parts,
tools, supplies, consumables, equipment, vehicles and operations manuals and
procedures.

            11.7  Information. Company shall provide to Operator technical,
operational, and other information relating to each Facility reasonably
available to Company. Subject to the standard of performance of the Services set
forth in Section 4.1, Operator shall be entitled to rely upon such information
in the performance of the Services for such Facility.

<PAGE>

            11.8  Taxes. Company shall have responsibility for payment of all
real property taxes, personal property taxes, sales taxes, use taxes, excise
taxes, import duties, fees to government agencies, and lease payments due in
connection with each Facility.

            11.9  Insurance. Company shall provide the insurance coverages
described in Section 15 for each Facility.

            11.10 Utilities. Company shall provide all fuel required for the
operation of each Facility and shall arrange for all gas, electricity, water,
telephone service, sewage and other waste disposal, and any other service or
utility required for the operation of the Facility.

            11.11. Remedies for Breach of Article 11. In the event of a breach
by Company of any of its obligations under this Article 11 with respect to a
Facility, Operator shall be entitled to suspend its performance hereunder with
respect to such Facility (but only for such Facility) (i) to the extent
prevented or restricted in performing its Services for such Facility by such
breach or (ii) if such breach involves the failure to pay taxes or insurance
premiums with respect to such Facility as provided in Sections 11.8 and 11.9, in
either case until such breach has been cured. Operator shall not be entitled to
terminate this Agreement with respect to the affected Facility on account of a
breach of Company's obligations under this Article 11 unless (i) the breach is
the failure to pay taxes or insurance premiums with respect to such Facility as
provided in Sections 11.8 and 11.9, and such breach is not cured within thirty
(30) Days after written notice thereof to Company or (ii) continued performance
of this Agreement by Operator with respect to such Facility could violate any
applicable Law or could reasonably be expected to subject Operator to
unreasonable liability.

ARTICLE 12. INDEPENDENT CONTRACTOR

            Operator shall be an independent contractor with respect to the
performance of the Services hereunder for each Facility. Neither Operator nor
its employees, subcontractors, vendors or suppliers, or the employees of any
such parties employed in Facility operations, shall be deemed to be agents,
representatives, employees, or servants of Company, except to the extent of any
express agency created hereunder pursuant to the authority granted to Operator
under Section 3. Except as otherwise expressly provided herein, this Agreement
shall not constitute Operator as the legal representative or agent of Company,
nor shall Operator have the right or authority to assume, create or incur any
liability or obligation, express or implied, against, in the name of, or on
behalf of Company or its partners. This Agreement is not intended to create, and
shall not be construed to create, a relationship of partnership or an
association for profit between Company and Operator.

ARTICLE 13. TERM AND TERMINATION

            13.1  Term. This Agreement shall become effective on the Effective
Date and, if not earlier terminated pursuant to this Article 13, shall continue
for ten (10) years (the "Term"), and shall thereafter continue for successive
one-year renewal terms; provided, however, that either party may terminate this
Agreement upon the last day of the initial term or any renewal term by giving
the other party not less than ninety (90) Days' written notice prior to the
scheduled termination date of the initial term or any renewal term.

<PAGE>

            13.2  Termination. Either party hereto may terminate this Agreement
for cause as to a particular Facility upon thirty (30) Days prior written notice
to the other party: (a) in the event of a Bankruptcy Event affecting such other
party (in the case of Company, CGC and the applicable Facility Owner, as
appropriate) or such party's guarantor; (b) subject to Section 11.11, in the
event of a material failure by such other party to perform its obligations
hereunder with respect to such Facility in accordance with the requirements of
this Agreement, if such other party does not cure such breach or failure within
thirty (30) Days of the date of a notice from the first party demanding such
cure (or within such longer period of time as is reasonably necessary to
accomplish such cure, but not to exceed ninety (90) Days in the aggregate, if it
cannot be reasonably accomplished within such thirty (30) Day period and such
other party diligently commences and continues such cure in such period), or (c)
a party's guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or
in part, or challenge the validity of the guaranty. Notwithstanding any
provision herein to the contrary, no failure of Operator to do any act or
perform any Services for a particular Facility that results from lack of
required approval by Company shall be deemed a breach of this Agreement. For the
avoidance of doubt, Company and Operator agree that an event giving rise to a
right to terminate this Agreement with respect to one Facility shall not give
Company or Operator, as applicable, the right to terminate this Agreement with
respect to another Facility unless such event or another event independently
gives such party the right to terminate this Agreement with respect to such
other Facility.

            13.3  Termination Dispute. If the parties disagree as to the
materiality of any claimed default, or as to the applicability of any cure
period, or as to the adequacy of any cure, said disagreement shall be submitted
to an advisory panel selected in accordance with Section 16 of this Agreement,
which shall be charged with preparing a non-binding written appraisal of such
disagreement, to be issued as soon as practicable by said advisory panel and in
any event within thirty (30) Days of its selection. In the event the parties are
unable to resolve their dispute or disagreement within ten days following their
receipt of the advisory panel's written appraisal, then either party may submit
such dispute or disagreement for resolution by binding arbitration under the
rules of the American Arbitration Association ("AAA"). as set forth in Article
16.2 of this Agreement.

            13.4  Termination for Convenience. Company shall have the right,
during the Term hereof, to terminate this Agreement with respect to any
Facility, without cause (including upon the sale of a Facility), upon ninety
(90) Days prior written notice to Operator and payment of the amounts described
in Section 13,6. If Company elects to terminate this Agreement pursuant to this
Section 13.4 as to a particular Facility, the parties shall confer and set out a
description of the activities required in order to terminate this Agreement with
respect to such Facility in an orderly manner, including matters addressed in
Section 13.5. At Company's request, from the date of the termination notice
through the effective date of termination (the "Transition Period"). Operator
will continue to operate and maintain the applicable Facility, assist in
training a replacement Operator and perform such other transition work as
Company may reasonably request. During the Transition Period, Operator shall be
paid with respect to the applicable Facility in accordance with Section 9.1. In
addition, upon the effective date of a termination of this Agreement with
respect to a Facility pursuant to this Section 13.4, Company shall pay to
Operator, in addition to the amounts described in the preceding sentence, the
amounts specified in Sections 13.5 and 13.6.

<PAGE>

            13.5  Facility Condition at End of Term. Upon expiration or
termination of this Agreement with respect to a Facility, Operator shall remove
its personnel from the applicable Facility Sites and shall leave such Facilities
in good condition, normal wear and tear and any other degradation for which
Operator is not responsible excepted. All special tools, improvements, inventory
of supplies, spare parts, safety equipment, operating and maintenance manuals
and procedures, operating and financial records and any other items furnished
under this Agreement with respect to such Facility shall be left at the
applicable Facility Site and shall remain the property of Company without
additional charge. Company also shall have the right, in its sole discretion, to
directly assume and become liable for any contracts or obligations related to
the terminated Facility that Operator may have undertaken with third parties,
with such third party's consent, in connection with the Services for such
Facility, and Operator shall execute all documents and take all other reasonable
steps required by Company which may be required to assign to and vest in Company
all rights, benefits, interests and title in connection with such contracts or
obligations. If Company elects not to directly assume or become liable for any
such contracts or other obligations with respect to a terminated Facility,
Company shall reimburse Operator for any additional costs reasonably incurred by
Operator in connection with the termination or other discharge of such contracts
or obligations with respect to such Facility, if such contracts or obligations
have been entered into or incurred by Operator in accordance with the provisions
of this Agreement.

            13.6  Termination Payment. In the event of a termination of this
Agreement as to a particular Facility pursuant to Section 13.2 (if Company was
the defaulting party) or Section 13.4, Operator shall be entitled, in addition
to all other amounts due to it hereunder as of the date of termination, to
receive a termination payment equal to all costs and expenses reasonably
incurred by Operator as a direct result of such termination, including (a) all
relocation and severance costs incurred with respect to Operator's employees at
the applicable Facility which Operator is contractually or legally obligated to
pay to its employees (other than pursuant to any "golden parachute" or other
like provisions contained in such contracts) or which are incurred with the
prior written consent of Company in accordance with established personnel
policies of Operator, and (b) the cost reasonably incurred by Operator in
withdrawing from the applicable Facility and otherwise demobilizing its
operations with respect to such Facility. Such amounts shall be due and payable
by Company within thirty (30) Days of Operator's submission of an invoice
therefor.

            13.7  Effect of Termination. No termination of this Agreement shall
deprive a party of amounts or other performance due to such party for any period
prior to the date of such termination, or relieve any party of the consequences
of its breach of this Agreement. Election to terminate this Agreement with
respect to a Facility pursuant to Section 13.2 shall not constitute an election
of remedies and, subject to Article 14, shall be without prejudice to any other
remedies at law or in equity available to the non-defaulting party by reason of
any default of the other party. For the avoidance of doubt, Company or Operator,
consistently with such party's rights under this Agreement, may elect to
terminate this Agreement with respect to a particular Facility due to a breach
or default of the other party with respect to such Facility, in which case this
Agreement shall terminate as to such Facility, but such termination shall not
affect the rights and obligations of Company and Operator with respect to the
other Facilities, and this Agreement shall continue in force with respect to
those other Facilities.

<PAGE>

ARTICLE 14. INDEMNIFICATION; LIMITATION OF LIABILITY

            14.1  Operator Indemnification. Subject to Sections 14.4 and 14.5,
with respect to each Facility, Operator shall defend, indemnify and hold Company
and its Indemnitees harmless from and against any and all claims, actions,
damages, expenses (including reasonable attorneys' fees), losses or liabilities
incurred by or asserted against Company or its Indemnitees for injury (including
death) to persons or damage or destruction to property and any and all fees or
penalties incurred by Company, including damages arising from environmental
contaminants, to the extent that such claims, actions, damages, expenses,
losses, liabilities, including damages arising from environmental contaminants,
are caused by Operator's breach of this Agreement or the negligence or willful
misconduct of Operator, its Affiliates, employees, partners, agents, officers or
directors.

            14.2  Company Indemnification. Company shall defend, indemnify and
hold Operator and its Indemnitees harmless from and against any and all claims,
actions; damages, expenses (including reasonable attorneys' fees), losses or
liabilities incurred by or asserted against Operator or its Affiliates,
officers, directors, employees or agents with respect to any Facility to the
extent that such claims, actions, damages, expenses, losses or liabilities are
caused by the negligence or willful misconduct of Company, its Affiliates,
employees, partners, agents, officers or directors.

            14.3  Environmental Indemnification. Company also shall defend,
indemnify and hold Operator and its Indemnitees harmless from and against any
and all claims, actions, damages, fines, penalties, expenses (including those
actions asserted by any governmental or regulatory body) incurred by or asserted
against Operator or its Indemnitees that arise out of or result from any
environmental contamination of any Facility or the property of any third party,
whether arising before or after the Effective Date, except, as to any such
contamination or failure occurring after the Effective Date, to the extent that
such claims, actions, damages, fines, penalties or expenses arise directly from
Operator's negligence or willful misconduct.

            14.4  Limitation of Liability. Notwithstanding any provision in this
Agreement to the contrary, no party nor its Indemnitees shall be liable
hereunder for consequential or indirect loss or damage, including loss of
project revenues, cost of capital, loss of goodwill, increased operating costs,
or any other special, incidental or punitive damages; provided, however, that
the foregoing limitation shall not apply to damages resulting from the willful
misconduct of a party hereto; provided, further that nothing in this sentence
shall limit the obligations of Company and Operator under this Article 14 to
indemnify the other party with respect to claims by third parties otherwise
covered by the provisions of this Article 14. Operator's maximum cumulative
liability under this Agreement with respect to a particular Facility, including
liability for matters resulting from Operator's breach of this Agreement with
respect to such Facility, shall be limited to $100,000 with respect to each
Facility during each Calendar Year in which liability is sought to be imposed;
provided, however, that the foregoing limitation of liability shall not apply to
damages resulting from Operator's willful misconduct, and provided further that
Operator shall not be liable to the extent that a liability is covered by the
proceeds collected under any policy of insurance then in force with respect to
the Services performed for such Facility, with respect to which the insurer has
waived subrogation against Operator (which proceeds shall be applied directly to
satisfy Operator's liability under this

<PAGE>

Agreement). The parties agree that, except for such liability, Company's only
remedy for breach of this Agreement by Operator with respect to a Facility or
for the failure of Operator to perform the Services with respect to a Facility
in accordance with the terms and conditions hereof shall be to terminate this
Agreement with respect to such Facility pursuant to Section 13. The parties
further agree that the waivers and disclaimers of liability, indemnities,
releases from liability, and limitations on liability expressed in this
Agreement shall survive termination or expiration of this Agreement with respect
to any Facility, and shall apply (unless otherwise expressly indicated), whether
in contract, equity, tort or otherwise, even in the event of the fault,
negligence, including sole negligence, strict liability, or breach of warranty
of the party indemnified, released or whose liabilities are limited, and shall
extend to the partners, principals, directors, officers and employees, agents
and related or affiliated entities of such party, and then partners, principals,
directors, officers and employees.

            14.5  Limitations on Recourse. The obligations of the parties under
this Agreement are obligations of the Parties only, and no recourse shall be
available against any officer, director, employee, stockholder or partner of a
party or its Affiliates. In addition, recourse against Company with respect to a
breach of this Agreement with respect to a particular Facility is limited to
Company's interest in that Facility, including all tangible and intangible
assets comprising such Facility, the revenue and income produced by such
Facility and the proceeds of any of the foregoing.

            14.6  Expressed Warranty. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, NO PARTY MAKES ANY WARRANTIES OR GUARANTEES TO ANY OTHER PARTY,
EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT,
AND OPERATOR EXPRESSLY DISCLAIMS, AND COMPANY EXPRESSLY WAIVES, ANY AND ALL
WARRANTIES IMPLIED BY LAW.

            14.7  Survival. The provisions of this Article 14 shall survive
termination, cancellation or expiration of this Agreement with respect to any
Facility.

ARTICLE 15. INSURANCE

            15.1  Company's Insurance. Beginning on the Effective Date and
continuing for the Term of this Agreement, Company shall procure and maintain in
full force and effect, at the Company's cost, the following insurance coverages
for each Facility (provided such coverages for each of the Columbia Energy
Center Facility; the Pastoria Energy Center Facility and the Goldendale Energy
Center Facility need only be procured and maintained beginning on the date
Services for such Facility commences hereunder in accordance with Section
3.1(b)):

            (a)   All risk property and business interruption insurance in an
amount equal to the replacement cost of such Facility, including boiler and
machinery coverage with deductibles and sublimits as appropriate. In addition,
Operator shall be an additional insured with respect to any liability insurance
obtained by or for the benefit of Company with respect to such Facility, and
Company shall require all such insurers to waive subrogation against Operator.

            15.2  Operator's Insurance. From and after the Effective Date,
Operator shall procure and maintain in full force and effect the following
insurance coverage for each Facility

<PAGE>

(provided such coverages for each of the Columbia Energy Center Facility, the
Pastoria Energy Center Facility and the Goldendale Energy Center Facility need
only be procured and maintained beginning on the date Services for such Facility
commences hereunder in accordance with Section 3.1(b)):

                  (a)   Worker's Compensation insurance with statutory limits,
and employers liability insurance with limits of not less than $2,000,000 in the
aggregate. Operator shall require its insurers to waive all rights of
subrogation against Company, and its officers, directors, agents and employees.

                  (b)   Business automobile liability insurance covering owned,
non-owned and hired automobiles for a combined single limit of $1,000,000 each
occurrence. This policy shall be primary as to other insurance which may be
available to Company or its constituent partners and shall name Company as an
additional insured to the extent of the indemnity obligations assumed hereunder.

                  (c)   Commercial general liability insurance, including bodily
injury, property damage, products/completed operations, blanket contractual, and
personal injury liability, with a combined single limit of $1,000,000 each
occurrence, all of which shall be endorsed to name Company an as additional
insured to the extent of the indemnity obligations assumed hereunder.

                  (d)   Umbrella liability providing excess general liability,
automobile liability and employment liability with a combined single limit of
$25,000,000, which shall be endorsed to name Company as an additional insured to
the extent of the indemnity obligations assumed hereunder.

            15.3  Evidence of Insurance. Each party shall provide to the other
certificates of insurance evidencing the required insurance as the requesting
party may reasonably specify.

            15.4  Endorsements. Each of the required policies shall be endorsed
to provide that the other party requiring the insurance hereunder be given
thirty (30) Days advance notice of cancellation or material change.

            15.5  Coverage under Company's Policies. Company, at its option, may
add Operator as a named insured to the Company's liability policies to fulfill
Operator's obligations hereunder.

ARTICLE 16. DISPUTE RESOLUTION

            16.1  Procedure. If during the term of this Agreement Company and
Operator are unable to agree on an O&M Budget for a Facility pursuant to
Sections 8.1 and 8.3 or on a Change Order pursuant to Section 7.2, then the
matter shall be referred within 5 Days to senior management of Operator and CGC
for resolution.

            16.2  Arbitration. Any dispute between Company and Operator arising
under this Agreement which cannot be resolved by agreement of the parties,
including disputes which are not resolved pursuant to the provisions of Section
16.1, shall be settled by arbitration in

<PAGE>

accordance with the rules of the American Arbitration Association; provided that
unless otherwise agreed between the parties there shall be three arbitrators who
are disinterested persons of recognized competence in the area at issue, one
named in writing by each of the parties within ten days after demand for
arbitration is made, and a third to be chosen by the two so named within thirty
(30) Days after demand for arbitration is made. Should either party refuse or
neglect to join in the appointment of the arbitrators, the arbitrator selected
by the other party shall be the sole arbitrator of the dispute. The place of
arbitration shall be San Jose, California, unless in any particular case the
parties agree upon a different venue. The award of the arbitrators shall be
final and binding upon the parties, and judgment thereon may be entered in any
court having jurisdiction thereof.

            16.3  Fees and Expenses. In the event that the arbitrators determine
by majority vote that the claim or defense of either Company or Operator in the
arbitration was frivolous (that is, without justifiable merit), they may by
majority vote require that the party at fault pay or reimburse the other party
for any or all of the following: (a) all fees and expenses of the arbitrators,
(b) the reasonable attorneys' fees of such other party, and (c) any other
reasonable out-of-pocket expenses incurred by such other party in connection
with the arbitration proceeding. In all other instances, each party shall pay
for its own costs and expenses arising out of any arbitration, with the cost of
any third arbitrator being shared equally by the parties.

            16.4  No Interruption. The pendency of these dispute resolution
procedures shall not in and of itself relieve either party from its duty to
perform under this Agreement with respect to the affected Facility or serve to
delay or suspend the operation of such Facility or the performance of the
Services hereunder with respect to such Facility or any other Facility.

ARTICLE 17. FORCE MAJEURE

            17.1  Excuse for Force Majeure. A delay in or failure of performance
hereunder by either party shall be excused to the extent caused by Force
Majeure, with the exception of payment obligations. The foregoing provisions
allowing a party to claim excuse due to Force Majeure shall not relieve such
party from using its reasonable efforts to overcome or remove such Force
Majeure. A party claiming such failure or delay shall give prompt notice thereof
to the other party, together with a description of such efforts to overcome the
Force Majeure.

            17.2  Legal Changes. In the event a party is unable to perform due
to legislative, judicial, or regulatory agency action affecting a particular
Facility, this Agreement shall be amended as appropriate with respect to such
Facility to comply with the legal change, which caused the non-performance.

ARTICLE 18. PROPRIETARY DATA

            Operator and Company agree to each hold confidential and
proprietary, except as may be reasonably necessary from time to time to perform
the Services hereunder, any proprietary or trade secret information supplied to
the other, or designated as confidential. The provisions of this Section 18
shall not apply to information within any one of the following categories or any
combination thereof: (a) information which was in the public domain prior to the
receipt thereof or which subsequently becomes part of the public domain by
publication or

<PAGE>

otherwise except by the recipient's wrongful act; (b) information which the
recipient demonstrates was lawfully in his possession prior to receipt thereof
through no breach of any confidentiality obligation; (c) information received
from a third party having no obligation of confidentiality with respect thereto;
or (d) information required to be divulged pursuant to law or court order.

ARTICLE 19. REPRESENTATIONS AND WARRANTIES

            Each party represents and warrants to each other party that: (a)
such party has the full power and authority to execute, deliver and perform this
Agreement and to carry out the transactions contemplated hereby; (b) the
execution and delivery of this Agreement by such party and the consummation by
such party of the transactions contemplated hereby have been duly authorized by
all requisite action, and this Agreement has been duly executed and delivered by
such party, enforceable against it in accordance with the terms hereof, subject,
as to enforceability of remedies, to limitations imposed by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditor's rights generally and to general
principles of equity; (c) no authorization, consent, approval or order of,
notice to, or registration, qualification, declaration or filing with, any
governmental authority, is required for the execution, delivery and performance
by such party of this Agreement or the consummation by such party of the
material transactions contemplated hereby, other than regulatory and similar
approvals needed for the operation of the applicable Facility; and (d) none of
the execution, delivery and performance by such party of this Agreement, the
compliance with the terms and provisions hereof, and the consummation of the
transactions contemplated hereby, conflicts or will conflict with or result in a
breach or violation of any of the terms, conditions, or provisions of any law,
governmental rule or regulation or the charter or certificate of formation, as
amended, or bylaws, as amended, of such party or any applicable order, writ,
injunction, judgment, or degree of any court or governmental authority against
such party, or any material loan agreement, indenture, mortgage, bond, note,
contract or other agreement or instrument to which such party is a party or by
which it is bound other than as would not reasonably be expected to have a
material adverse effect on such party's ability to perform, or its performance
of, its obligations hereunder.

ARTICLE 20. MISCELLANEOUS

            20.1  Assignment. Neither Company nor Operator may assign this
Agreement with respect to any or all of the Facilities, nor may Operator
delegate to another the performance of the Services with respect to any or all
of the Facilities, without the prior written consent of the other party;
provided, however that Company shall have the right to assign its rights under
this Agreement with respect to each Facility individually or any two or more
Facilities in the aggregate for financing purposes. In connection with any
financing, Operator shall execute a consent to assignment in customary form.

            20.2  Governing Law. This Agreement shall be governed by the law of
the State of California. Actions to enforce or interpret this Agreement or to
resolve disputes hereunder shall be brought in the United States District Court
in San Jose, California, or, if such court does not have jurisdiction over such
action, in the Superior Court of the State of California in San Jose,
California, which courts shall have exclusive jurisdiction with respect to such

<PAGE>

matters. For purposes of the foregoing, Company and Operator each hereby submits
and agrees to the jurisdiction of such courts.

            20.3  Entire Agreement; Amendments. This Agreement constitutes the
entire agreement between Operator and Company with respect to the subject matter
covered hereby and supersedes any and all prior negotiations, representations,
agreements or understandings relating hereto. This Agreement may be amended only
by a writing signed by a duly authorized representative of each party.

            20.4  Waivers. Either party may specifically waive any breach of
this Agreement by the other party, but no such waiver shall be deemed to have
been given unless such waiver is in writing, signed by the waiving party and
specifically designates the breach waived, nor shall any such waiver constitute
a continuing waiver of similar or other breaches.

            20.5  Notices. All notices, requests, offers, reports and other
communications required or permitted to be made under this Agreement shall be in
writing, and shall be given by first class, registered or certified mail,
postage prepaid, or by hand-delivered telegram telex, or facsimile copier. All
notices shall be addressed as follows:

      To Operator:                 Calpine Operating Services Company, Inc.
                                   104 Woodmere Road
                                   Folsom, California 95630
                                   Attn: General Counsel
                                   Telecopy No: (916)995-0505
                                   Telephone No: (916)995-5115

      With a copy to:              Calpine Corporation
                                   50 West San Fernando Street
                                   San Jose, California 95113
                                   Attn: General Counsel
                                   Telecopy No: (916) 995-0505
                                   Telephone No: (916) 995-5115

      To Company (as applicable):  Calpine Generating Company, LLC
                                   c/o Calpine Corporation
                                   50 West San Fernando Street
                                   San Jose, California 95113
                                   Attn: General Counsel
                                   Telecopy: (408) 995-0505
                                   Telephone: (408) 995-5115

      Facility Owner:              To the Plant Manager for the applicable
                                   Facility at the address set forth on
                                   Appendix B attached hereto.

<PAGE>

or at such other address as either party may designate from time to time in
writing by like notice to the other party. Notices shall be deemed duly given at
the time delivery is received at the address provided for above.

            20.6  No Third Party Benefits. Except with respect to the rights of
a lender or trustee (or their agent) pursuant to an assignment for financing
purposes as provided in Section 20.1 and for the rights of Indemnitees under
Section 14, this Agreement and each and every provision thereof is for the
exclusive benefit of Company and Operator and is not for the benefit of any
third party.

            20.7  Title to Materials. Title to all materials, equipment,
supplies, consumables, spare parts and other items purchased or obtained by
Operator for a Facility shall pass immediately to and vest in Company upon the
passage of title from the vendor or supplier thereof.

            20.8  Partial Invalidity. If any term, provision, covenant, or
condition of this Agreement is held by a court of competent jurisdiction to be
invalid, void, or unenforceable, whether in its application to one or more
individual Facilities or with respect to this Agreement as a whole, the rest of
this Agreement shall remain in full force and effect and in no way be affected,
impaired, or invalidated.

            20.9  Headings. The headings herein in this Agreement are for
reference only and shall not affect the construction of this Agreement.

            20.10 Counterparts. This Agreement may be executed in counterparts,
and any number of counterparts signed in the aggregate by the parties hereto
shall constitute a single original document.

            20.11 Separate Agreements. Company and Operator have agreed that
this Agreement applies separately to each Facility, as well as to the Facilities
as a whole. In applying this Agreement with respect to any particular Facility,
"Company" shall be understood to include the applicable Facility Owner with
respect to such Facility, unless the context indicates otherwise (e.g. that all
Facility Owners are intended to be included). Company and Operator nonetheless
agree that, upon the request of either party or if one or more Facilities become
owned by separate owners, they will execute separate agreements for each of the
Facilities, either singly or in groups, as they may agree, upon the request of
either party or of the senior lenders to either party.

                     [The next page is the signature page.]

<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Operation
and Maintenance Agreement to be executed by their officers or partners thereunto
duly authorized as of the day and year first above written.

CALPINE OPERATING SERVICES                 CALPINE GENERATING COMPANY, LLC
COMPANY, INC.,

By: /s/ RODNEY MALCOLM                     By: /s/ ZAMIR RAUF
    -----------------------                    -----------------------
Name: RODNEY MALCOLM                       Name: ZAMIR RAUF
Title: Authorized Signatory                Title: Vice President

BAYTOWN ENERGY CENTER, L.P.                CARVILLE ENERGY, LLC

By: /s/ ZAMIR RAUF                         By: /s/ ZAMIR RAUF
    -----------------------                    -----------------------
Name: ZAMIR RAUF                           Name: ZAMIR RAUF
Title: Vice President                      Title: Vice President

CHANNEL ENERGY CENTER, L.P.                COLUMBIA ENERGY, LLC

By: /s/ ZAMIR RAUF                         By: /s/ ZAMIR RAUF
    -----------------------                    -----------------------
Name: ZAMIR RAUF                           Name: ZAMIR RAUF
Title: Vice President                      Title: Vice President

CORPUS CHRISTI COGENERATION, L.P.          DECATUR ENERGY CENTER, LLC

By: /s/ ZAMIR RAUF                         By: /s/ ZAMIR RAUF
    -----------------------                    -----------------------
Name: ZAMIR RAUF                           Name: ZAMIR RAUF
Title: Vice President                      Title: Vice President

DELTA ENERGY CENTER, LLC                   FREESTONE POWER GENERATION, L.P.

By: /s/ ZAMIR RAUF                         By: /s/ ZAMIR RAUF
    -----------------------                    -----------------------
Name: ZAMIR RAUF                           Name: ZAMIR RAUF
Title: Vice President                      Title: Vice President

<PAGE>

GOLDENDALE ENERGY CENTER, LLC              LOS MEDANOS ENERGY CENTER, LLC

By: /s/ ZAMIR RAUF                         By: /s/ ZAMIR RAUF
    -----------------------                    -----------------------
Name: ZAMIR RAUF                           Name: ZAMIR RAUF
Title: Vice President                      Title: Vice President

MORGAN ENERGY CENTER, LLC                  CALPINE ONETA POWER, L.P.

By: /s/ ZAMIR RAUF                         By: /s/ ZAMIR RAUF
    -----------------------                    -----------------------
Name: ZAMIR RAUF                           Name: ZAMIR RAUF
Title: Vice President                      Title: Vice President

PASTORIA ENERGY FACILITY L.L.C.            ZION ENERGY, LLC

By: /s/ ZAMIR RAUF                         By: /s/ ZAMIR RAUF
    -----------------------                    -----------------------
Name: ZAMIR RAUF                           Name: ZAMIR RAUF
Title: Vice President                      Title: Vice President

<PAGE>

                                   APPENDIX A

                                   DEFINITIONS

                  (MASTER OPERATION AND MAINTENANCE AGREEMENT)

      "Administrative Services Agreement" means that certain Administrative
Services Agreement dated as of March 23, 2004 by and among CGC, the Facility
Owners and Calpine Administrative Services Company, Inc..

      "Affiliate" means with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with such Person. For purposes of the foregoing definition, "control" means (i)
the direct or indirect ownership of fifty percent (50%) or more of the
outstanding capital stock or other securities or equity interests having
ordinary voting power to elect the board of directors, managing general partner
or similar managing authority or (ii) the power to direct the management of such
Person.

      "Agreement" means this Master Operation and Maintenance Agreement dated as
of March 23, 2004 between Company and Operator.

      "Bankruptcy Event" shall be deemed to occur, with respect to any Person,
if that Person shall institute a voluntary case seeking liquidation or
reorganization under the Bankruptcy Law, or shall consent to the institution of
an involuntary case thereunder against it; or such Person shall file a petition
or consent or shall otherwise institute any similar proceeding under any other
applicable Federal or state law, or shall consent thereto; or such person shall
apply for, or by consent or acquiescence there shall be an appointment of, a
receiver, liquidator, sequestrator, trustee or other officer with similar powers
for such Person, or any substantial part of its assets; or such Person shall
make an assignment for the benefit of its creditors; or such Person shall admit
in writing its inability to pay its debts generally as they become due; or if an
involuntary case shall be commenced seeking liquidation or reorganization of
such Person under the Bankruptcy Law or any similar proceedings shall be
commenced against such Person under any other applicable Federal or state law
and (i) the petition commencing the involuntary case is not timely controverted,
(ii) the petition commencing the involuntary case is not dismissed within 60
days of its filing, (iii) an interim trustee is appointed to take possession of
all or a portion of the property, and/or to operate all or any part of the
business of such Person and such appointment is not vacated within 60 days, or
(iv) an order for relief shall have been issued or entered therein; or a decree
or order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee or other officer having similar
powers, of such Person or all or a part of its property shall have been entered;
or any other similar relief shall be granted against such Person under any
applicable Federal or state law.

      "Calendar Year" means a 12-month period commencing on the first Day of
January and ending on the last Day of December.

      "Capital Expenditures" means those costs and expenses incurred for
improvements to the applicable Facility which can be capitalized under generally
accepted accounting principles.

<PAGE>

      "Changed Circumstance" means a change not reasonably foreseeable at the
time the then current Operating Plan for the applicable Facility was adopted in:
(i) applicable Laws, or (ii) a requirement of permits or other circumstances
affecting the operation of the applicable Facility not occasioned by Operator's
negligence, willful misconduct or breach of this Agreement which change impairs
Operator's ability to operate the applicable Facility either within the budget
or the constraints of the Operating Plan for such Facility.

      "Change Order" means a change, submitted in writing, to a current
Operating Plan for the Facility.

      "CPI" means the Consumer Price Index for All Urban Consumers (CPIU), U.S.
City Average, seasonally adjusted, as published by the United States Department
of Labor, or, if such index is no longer published or the method of computation
thereof has been modified to yield a materially different result, a substitute
index acceptable to Company and Operator.

      "Day" means a calendar day.

      "Effective Date" shall have the meaning given in the first paragraph of
the Agreement.

      "Emergency" means an event occurring at a Facility which poses actual or
imminent risk of serious personal injury, physical damage or environmental
contamination requiring immediate preventative or remedial action by Operator
and for which advance approval by Operator otherwise required under the
Agreement would be impossible or impractical.

      "Escalation Quotient" shall mean, for any Calendar Year during the Term,
the quotient of the CPI as of January 1 of the current Calendar Year divided by
the CPI as of January 1, 2004.

      "Expense Category" means each subcategory of costs within each Major
Expense Category in a budget.

      "Facility" means each of the gas-fired electric generation facilities
listed on Appendix B to the Agreement.

      "Facility Owner" has the meaning defined in the preamble to this
Agreement.

      "Facility Personnel" means the permanent or temporary employees or
representatives of Operator employed or retained at a Facility solely to provide
Services relating to such Facility.

      "Facility Site" means the real property on which a Facility is situated.

      "Force Majeure" means acts, occurrences, events and conditions beyond the
reasonable control of the party claiming Force Majeure, including acts of God,
labor disputes of a general nature or that affect an entire industry, sudden
actions of the elements, the effect of changes in applicable Laws after the
Effective Date, actions by federal, state or local legislative, judicial or
regulatory agencies after the Effective Date, or denial, lapse or revocation of
any permit, license or regulatory approval necessary in connection with the
operation of a Facility, but expressly

<PAGE>

excluding matters arising from the negligence or greater fault of, or from the
breach of this Agreement by, the party claiming Force Majeure of the financial
inability of any party claiming Force Majeure to perform its obligations.

      "Hazardous Substance Laws" means the Laws regulating or governing the
management handling, labeling, containing, treatment, storage and removal of any
"hazardous" or "toxic" materials, substances or wastes.

      "Hazardous Substance Plan" a plan for the management, handling,
containment, storage or disposal of "hazardous" or "toxic" substances, materials
or waste.

      "Indemnitees" of a party means each of its Affiliates and permitted
assignees, such party's lenders, and each of the officers, directors, employees,
agents, partners and shareholders of the party and its Affiliates, permitted
assignees and lenders.

      "Laws" means all laws, statutes, rules, regulations, orders and ordinances
or specified standards or objective criteria contained in any applicable
license, permit or approval, or other legislative or administrative act, of the
United States of America or any state, agency, department, authority, political
subdivision or other instrumentality thereof, or a decree, judgment or order of
a court from time to time in effect, including but not limited to those
governing wages, hours, employment discrimination and safety, laws regarding
workers' compensation, disability laws and employee benefit laws and including
any applicable engineering, construction, safety or electrical generation code.

      "Maintenance Program" means policies and procedures developed for the
implementation and management of: preventative maintenance, regular or scheduled
maintenance, periodic major maintenance (including minor and major turbine
overhauls), facility improvements and inventory control. These policies and
procedures shall be contained in a maintenance manual and shall be consistent
with applicable manufacturers' recommendations and operating manuals.

      "Major Expense Category" means the following four (4) expense categories
in the O&M Budget for each Facility: general expenses, operating staff labor,
major maintenance expense and operation and maintenance fees.

      "Major Maintenance" means major overhauls and upgrades of gas and steam
turbines and turbine systems, generators, boilers, cooling towers and similar
equipment and systems.

      "O&M Budget" shall have the meaning set forth in Section 8.1.

      "Operating Plan" has the meaning set forth in Section 3.4 of the
 Agreement.

      "Operating Program" means policies and procedures developed for the
implementation and management of: start-up, regular operations, non-regular
operations and shutdown or outages. These policies and procedures shall be
contained in an operating manual.

<PAGE>

      "Operator" means Calpine Operating Services Company. Inc.

      "Person" means any natural person, corporation, partnership, limited
liability company, firm or other entity.

      "Plant Manager" means the representative of Operator for a Facility from
time to time appointed by Operator pursuant to this Agreement for such Facility.

      "Power Sales Contract" means any power sales and purchase contract between
the Company and any offtaker of energy from the applicable Facility.

      "Prudent Engineering and Operating Practices" means those practices,
methods, equipment, specifications and standards of safety and performance, as
the same may change from time to time, as are commonly used by independent
operators of electric generation stations of a type and size similar to those
constituting the applicable Facility as good, safe and prudent engineering
practices in connection with the operation, maintenance, repair and use of gas
turbines, electrical generators and other equipment and facilities with
commensurate standards of safety, performance, dependability, efficiency and
economy. Prudent Engineering and Operating Practices are not intended to be
limited to the optimum practice or method to the exclusion of others, but rather
to be a spectrum of possible but reasonable practices and methods.

      "Reference Rate" means the "prime rate" as published in the Wall Street
Journal from time to time.

      "Safety Program" means policies and procedures developed for the
implementation and management of: safety training, plant safety inspections and
reporting, plant emergency conditions, plant start-up and shutdown, equipment
tagging and lockout, work practices and operating procedures. These policies and
procedures shall be contained in a safety manual.

      "Secured Obligations" means the "Secured Obligations" as defined in that
certain Security Agreement dated as of March 23, 2004 by and between CGC, the
Facility Owners, as guarantors, and Wilmington Trust Company, as collateral
trustee.

      "Services" shall have the meaning set forth in Section 3.2.

      "Subcontractor" means either an entity contracting directly with the
Operator to furnish services or materials for a particular Facility as a part of
or related to the Services for such Facility, or an entity contracting with a
Subcontractor for a particular Facility of any tier to furnish services or
materials as a part or related to the Services for such Facility.

      "Term" has the meaning given in Section 13.1 of the Agreement.

      "Water Treatment Program" means policies and procedures developed for the
implementation of the purchase, use and storage of chemicals, waste water
treatment and monitoring, cooling water control, feedwater control, on-site
waste water laboratory, and hiring

<PAGE>

and coordination of technical consulting services in the field of water
chemistry. These policies and procedures shall be contained in a water treatment
manual.

<PAGE>

                                   APPENDIX B

                              FACILITY DESCRIPTIONS

                  (MASTER OPERATION AND MAINTENANCE AGREEMENT)

Baytown Energy Center Facility

      Address:    8605 FM 1405
                  Baytown, Texas 77520
                  (281) 303-4200

      The Baytown facility is a nominal 742 MW natural gas-fired combined cycle
generating facility with an estimated peak capacity of 830 MW. The facility
consists of three Siemens combustion turbines and three Nooter Eriksen heat
recovery steam generators which supply steam to a single Toshiba steam turbine.
The facility supplies power and steam to Bayer Corporation.

Carville Energy Center Facility

      Address:    4322 LA Highway 30
                  Saint Gabriel, Louisiana 70776
                  (225) 642-8993

      The Carville facility is a nominal 455 MW natural gas-fired combined cycle
generating facility with an approximate peak capacity of 531 MW. The facility
consists of two General Electric combustion turbines and two Alstom heat
recovery steam generators which supply steam to a single Alstom steam turbine.
The facility supplies steam to Cos-Mar Corporation.

Channel Energy Center Facility

      Address:    12000 Lawndale Street, LCR Gate 5
                  Pasadena, Texas 77017
                  (713)456-1300

      The Channel facility is a nominal 527 MW natural gas-fired combined cycle
generating facility. The facility consists of two Siemens combustion turbines
and two Nooter Eriksen heat recovery steam generators which supply steam to a
single Toshiba steam turbine. The facility supplies power and steam to
Lyondell-CITGO Refining, L.P.

Columbia Energy Center Facility

      Address:    100 Calpine Way
                  Gaston, South Carolina 29053
                  (803)739-4940

<PAGE>

      The Columbia facility is a nominal 464 MW natural gas-fired combined cycle
generating facility with an approximate peak capacity of 641 MW. The facility
consists of two General Electric combustion turbines and two Nooter Eriksen heat
recovery steam generators which supply steam to a single Toshiba steam turbine.
The facility supplies steam to Eastman Chemical Company.

Corpus Christi Energy Center Facility

      Address:    3852 Buddy Lawrence Drive
                  Corpus  Christi,  Texas 78407
                  (361) 696-7700

      The Corpus Christi facility is a nominal 414 MW natural gas-fired combined
cycle generating facility with an approximate peak capacity of 537 MW. The
facility consists of two General Electric combustion turbines and two Alstom
heat recovery steam generators which supply steam to a single Alstom steam
turbine. The facility supplies power and steam to CITGO Refining and Chemicals,
L.P., Elementis Chrominum, L.P. and Flint Hills Resources, L.P.

Decatur Energy Center Facility

      Address:    2024 Highway 20 West
                  Decatur, Alabama 35601
                  (256) 301-6500

      The Decatur facility is a nominal 692 MW natural gas-fired combined cycle
generating facility with an approximate peak capacity of 838 MW. The facility
consists of three Siemens combustion turbines and three Nooter Eriksen heat
recovery steam generators which supply steam to a single Toshiba steam turbine.
The facility supplies steam to Solutia Inc.

Delta Energy Center Facility

      Address:    1200 Darcy Lane
                  Pittsburg, California 94565
                  (925) 756-0789

      The Delta facility is a nominal 799 MW natural gas-fired combined cycle
generating facility with an estimated peak capacity of 882 MW. The facility
consists of three Siemens combustion turbines and three Deltak heat recovery
steam generators which supply steam to a single Toshiba steam turbine.

Freestone Energy Center Facility

      Address:    1366 FM 488
                  Fairfield, Texas 75840
                  (903)389-1400

D-2
<PAGE>

      The Freestone facility is a nominal 1,022 MW natural gas-fired combined
cycle generating facility with an approximate peak capacity of 1,022 MW. The
facility consists of four General Electric combustion turbines and four Nooter
Eriksen heat recovery steam generators which supply steam to two General
Electric steam turbines.

Goldendale Energy Center Facility

      Address:    600 Industrial Park Way
                  Goldendale, Washington 98620
                  (509) 773-0380

      The Goldendale facility will be a nominal 237 MW natural gas-fired
combined cycle power generating facility with an estimated peak capacity of 271
MW. The facility will consist of a single General Electric combustion turbine
and a Hitachi heat recoversy steam generator which supplies steam to a single
Hitachi steam turbine.

Los Medanos Energy Center Facility

      Address:    750 East Third Street
                  Pittsburg, California 94565
                  (925) 473-2180

      The Los Medanos facility is a nominal 497 MW natural gas-fired combined
cycle generating facility with an estimated peak capacity of 566 MW. The
facility consists of two General Electric combustion turbines and two Nooter
Eriksen heat recovery steam generators which supply steam to a single General
Electric steam turbine. The facility supplies power and steam to USS-POSCO
Industries and may supply power to Dow Chemical Company.

Morgan Energy Center Facility

      Address:    1410 Red Hat Road
                  Decatur, Alabama 35601
                  (256) 308-3300

      The Morgan facility is a nominal 722 MW natural gas-fired combined cycle
generating facility with an approximate peak capacity of 852 MW. The facility
consists of three Siemens combustion turbines and three Nooter Eriksen heat
recovery steam generators which supply steam to two Toshiba steam turbines. The
facility supplies steam to BP Amoco Chemical Company.

Oneta Energy Center Facility

      Address:    25142 East 105th Street South
                  Broken Arrow, Oklahoma 74014
                  (918) 486-1800

D-3
<PAGE>

      The Oneta facility is a nominal 994 MW natural gas-fired combined cycle
generating facility with an approximate peak capacity of 994 MW. The facility
consists of four General Electric combustion turbines and four Nooter Eriksen
heat recovery steam generators which supply steam to two Toshiba steam turbines.

Pastoria Energy Center Facility

     Address:     39789 Edmonston Pumping Plant Road
                  Lebec, California 93243
                  (661) 654-8000

      The Pastoria facility will be a nominal 759 MW natural gas-fired combined
cycle generating facility with an estimated peak capacity of 769 MW. Th facility
is being constructed in two phases. Phase 1 consists of a single General
Electric combustion turbine and a Nooter Eriksen heat recovery steam generator
which supplies a single General Electric steam turbine. Phase 2 consists of two
General Electric combustion turbines and two Nooter Eriksen heat recovery steam
generators which supply a single General Electric steam turbine.

Zion Energy Center Facility

      Address:    5701 Ninth Street
                  Zion, Illinois 60099
                  (847) 731-6250

      The Zion facility is a nominal 513 MW simple cycle peaking facility with
an estimated peak capacity of 513 MW. The facility consists of three General
Electric combustion turbines The facility generally runs on natural gas, but is
capable of running on oil.

D-4<PAGE>

                                                                   EXHIBIT 10.11

                                                                  EXECUTION COPY

                      MASTER MAINTENANCE SERVICES AGREEMENT
                                  BASE CONTRACT

      This Master Maintenance Services Agreement (the "Agreement"), dated as of
March 23, 2004, is made by and between CALPINE GENERATING COMPANY, LLC, a
Delaware limited liability company ("CGC"), the companies listed on the
signature pages of this Agreement (each a "Facility Owner" or the "Company") and
CALPINE OPERATING SERVICES COMPANY, INC., a Delaware corporation ("Contractor").

      WHEREAS, each of the Facility Owners is an indirect wholly-owned
subsidiary of CGC and is the owner of a Facility (as defined below); and

      WHEREAS, Company desires to secure the maintenance services described in
this Agreement (collectively, the "Work"); and

      WHEREAS, Contractor, including its Turbine Maintenance Group division, is
in the business of providing such services and desires to provide the Work in
accordance with the terms and conditions contained herein; and

      WHEREAS, Company and Contractor have agreed to set forth their agreement
regarding the Work to be provided for each Facility in this single Agreement,
but Company and Contractor intend that this Agreement apply separately and
independently to each Facility, as further described below, such that (a) except
as expressly provided herein, their respective rights and obligations with
respect to each Facility shall be severable, separate and distinct from their
respective rights and obligations with respect to each other Facility, and (b)
separate and distinct contracts exist for each Facility as between the owner of
such Facility and Contractor.

      NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, Company and Contractor agree as follows:

1.0   SCOPE OF WORK.

      1.1 (a) During the Term of this Agreement, Contractor shall perform and/or
provide the Work described in this Agreement with respect to some or all of the
following electric generating facilities owned by the respective Facility Owners
as indicated below:

<PAGE>

                     MASTER MAINTENANCE SERVICES AGREEMENT
                                 BASE CONTRACT

<TABLE>
<CAPTION>
        Facility                                  Facility Owner
        --------                                  --------------
<S>                                        <C>
   Baytown Energy Center                   Baytown Energy Center, L.P.
   Carville Energy Center                    Carville Energy LLC
   Channel Energy Center                   Channel Energy Center, L.P.
   Columbia Energy Center                    Columbia Energy LLC
Corpus Christi Energy Center             Corpus Christi Cogeneration, L.P.
   Decatur Energy Center                   Decatur Energy Center, LLC
    Delta Energy Center                     Delta Energy Center, LLC
  Freestone Energy Center                Freestone Power Generation, L.P.
 Goldendale Energy Center                  Goldendale Energy Center, LLC
Los Medanos Energy Center                Los Medanos Energy Center, LLC
    Morgan Energy Center                     Morgan Energy Center, LLC
     Oneta Energy Center                     Calpine Oneta Power, L.P.
   Pastoria Energy Center                 Pastoria Energy Facility, L.L.C.
     Zion Energy Center                          Zion Energy, LLC

</TABLE>

This Agreement will be effective as to a particular facility as and when set
forth in Section 1.2, at which time the term "Facility" as used in this
Agreement shall include each such facility as to which this Agreement is
effective.

            (b)   This Agreement, including all exhibits and attachments, shall
constitute a separate and distinct contract between each Facility Owner and
Contractor with respect to the Facility owned by such Facility Owner, if this
Agreement is effective with respect to such Facility. In applying this Agreement
with respect to any particular Facility, "Company" shall be understood to mean
the applicable Facility Owner as indicated above, and Exhibits Three and Four
shall be understood to mean the particular versions of such Exhibits applicable
to such Facility. The parties agree that the rights and obligations of
Contractor and Company with respect to a given Facility are severable, separate
and independent of the rights and obligations of Contractor and Company with
respect to another Facility, and, except as expressly provided herein, events
giving rise to a right to terminate this Agreement with respect to one Facility
shall not entitle Company or Contractor, as applicable, to terminate this
Agreement with respect to any other Facility.

            (c)   If CGC sells or otherwise transfers a Facility subject to this
Agreement, the Company shall have the right to terminate this Agreement with
respect to such Facility and the related Facility Owner (it being understood
that a sale in violation of agreements between the Company and the holders of
the Secured Obligations or a foreclosure on one or more of the Facilities by the
holders of the Secured Obligations does not constitute a sale by the Company for
purposes of this Section 1.1 (c)). In such event, CGC, the applicable Facility
Owner(s) and Contractor shall amend this Agreement to add or delete such
Facility and the related Facility Owner, as applicable. If the

<PAGE>

                     MASTER MAINTENANCE SERVICES AGREEMENT
                                 BASE CONTRACT

Company sells or otherwise transfers a Facility and elects to terminate this
Agreement as provided above, this Agreement shall not apply to such Facility and
the related Facility Owner from and after the effective date of such sale, and
CGC, the applicable Facility Owner and Contractor will be released from all
future liabilities, and will no longer have any obligations, hereunder with
respect to such Facility.

      1.2   (a) Except for the Columbia Energy Center Facility, the Pastoria
Energy Center Facility, the Goldendale Energy Center Facility and the third
combustion turbine at the Zion Energy Center Facility, this Agreement shall only
become effective with respect to a Facility when (i) Company has given
Contractor not less than 30 days notice that it has elected to have this
Agreement be effective with respect to such Facility, (ii) Company and
Contractor have agreed on Exhibit Three for such Facility, and (iii) Company
shall have either (A) terminated its maintenance services agreement with GE,
Siemens or another third party maintenance services provider currently in effect
with respect to such Facility, effective as of a date on or before the effective
date of this Agreement with respect to such Facility, and provided evidence of
such termination with the notice to Contractor under clause (i), or (B) assigned
the current maintenance services agreement with GE, Siemens or such other
maintenance services provider to Contractor on terms and conditions acceptable
to Contractor and GE, Siemens or such other maintenance services provider, as
applicable, effective as of the effective date of this Agreement with respect to
such Facility. This Agreement shall become effective with respect to the
Columbia Energy Center Facility, the Pastoria Energy Center Facility and the
Goldendale Energy Center Facility when each such Facility achieves commercial
operation and Company and Contractor have agreed on Exhibit Three for such
Facility. This Agreement shall be effective with respect to the third combustion
turbine at the Zion Energy Center Facility upon the execution of this Agreement.

      (b)   Company and Contractor agree that the pricing to be set forth on
Exhibit Three for each Facility shall be no greater than (i) with respect to the
Facilities other than the Columbia, Pastoria, Goldendale Facilities and the
third combustion turbine at the Zion Energy Center Facility, the comparable
pricing under the maintenance services contract between Company and GE, Siemens
or other maintenance services provider, as applicable, with respect to such
Facility or (ii) with respect to the Columbia, Pastoria, Goldendale Facilities
and the third combustion turbine at the Zion Energy Center Facility, no greater
than the comparable published list pricing offered by GE, Siemens or other
applicable maintenance services provider (depending on which vendor has supplied
the Combustion Turbines for the applicable Facility) for the Parts and Services
to be provided hereunder with respect to such Facility as of the date this
Agreement becomes effective with respect to such Facility, in each case
escalated in accordance with the Escalation Quotient.

      (c)   Notwithstanding anything in Section 1.2(a) to the contrary, prior to
the time this Agreement becomes effective with respect to the Facilities other
than the Columbia Energy Center Facility, the Pastoria Energy Center Facility,
the Goldendale

<PAGE>

                     MASTER MAINTENANCE SERVICES AGREEMENT
                                 BASE CONTRACT

Energy Center Facility and the third combustion turbine at the Zion Energy
Center Facility, Contractor will make the payments due under Company's currently
existing maintenance services agreements with GEI and Siemens with respect to
the Facilities other than the Columbia Energy Center Facility, the Pastoria
Energy Center Facility, the Goldendale Energy Center Facility and the third
combustion turbine at the Zion Energy Center Facility, and Company shall,
subject to the limitations set forth in Section 2.2 of this Base Contract,
reimburse Contractor for all such payments. It is acknowledged and agreed,
however, that, until this Agreement becomes effective with respect to a given
Facility, Contractor shall not be responsible for the maintenance services
performed by GEI or Siemens, as applicable, with respect to such Facility or for
any failures, defects, deficiencies or omissions in any parts supplied by or in
any services performed by Siemens or GEI, as applicable, with respect to such
Facility and that Company shall be responsible for enforcing its maintenance
services agreements with Siemens and GEI.

      (d)   Prior to the effective date of this agreement with respect to any
Facility, Company and Contractor may enter into special agreements for the
performance of certain Services, the supply or repair of certain Parts or any
other matters within the scope of this Agreement on such terms and conditions as
they may agree.

      1.3   This Agreement, including all exhibits and attachments, shall apply
to each of the Facilities with respect to which this Agreement is effective as a
separate and independent contract between Contractor and the respective Facility
Owner with respect to such Facility. Nonetheless, Company and Contractor agree
that they will execute individual "stand alone" agreements with respect to any
Facility upon the reasonable request of either party on the same terms and
conditions as are set forth in this Agreement. This Agreement shall terminate as
to any Facility for which an individual contract is executed, effective as of
the effective date of such individual contract.

2.0   CONTRACT PRICE AND TERMS OF PAYMENT.

      2.1   Subject to the other terms and conditions contained herein, all Work
performed under this Agreement shall be performed pursuant to a Work Order
issued pursuant to Parts A and B of this Agreement, and all invoices submitted
by Contractor to Company for Work performed only as authorized by a Work Order.

      2.2   In addition to the limitations set forth in Section 1.2(b), for so
long as CGC and the Company own the respective Facilities and are directly or
indirectly wholly-owned subsidiaries of Calpine Corporation, payments by Company
to Contractor hereunder shall only be made from Excess Cash Flow. On April 1 and
October 1 of each year during the Term of this Agreement (each a "Calculation
Date"). CGC will calculate the Excess Cash Flow for the preceding six-month
period (the "Six-Month Excess Cash Flow"). The entire amount of Six-Month Excess
Cash Flow will be deemed to be available to make payment of amounts due
hereunder on the relevant Calculation Date. To the extent that any of the
Six-Month Cash Flow has been distributed during the

<PAGE>

                      MASTER MAINTENANCE SERVICES AGREEMENT
                                  BASE CONTRACT

applicable six-month period by CGC to any of its parent companies, it will be
deemed to be a setoff against amounts due by CGC or Company to Contractor under
this Agreement on the succeeding Calculation Date, and Contractor agrees such
amounts shall be considered as having been paid by CGC or Company to Contractor
hereunder. Any Six-Month Excess Cash Flow that has not been distributed prior to
the relevant Calculation Date and is available for distribution by CGC to its
parent entities will be applied on the relevant Calculation Date to the payment
of amounts due under this Agreement on such Calculation Date (taking into
consideration the setoff and payment of amounts due under this Agreement
pursuant to the immediately preceding sentence). To the extent that available
Six-Month Excess Cash Flow is insufficient to pay some or all of the amounts due
from CGC or the Company to Contractor hereunder, the failure to pay such amounts
shall not constitute a default hereunder, but all such unpaid amounts shall
accrue, together with interest thereon at the Delayed Payment Rate, until the
next Calculation Date at which time all such accrued but unpaid amounts will,
subject to the application of this Section 2.2 on such Calculation Date, be due
and owing on such Calculation Date. To the extent any Six-Month Excess Cash-Flow
on any Calculation Date is greater than that required to pay amounts owing to
Contractor under this Agreement on such Calculation Date, such excess shall not
be included in the Six-Month Excess Cash Flow calculated on any future
Calculation Date. The foregoing limitations on CGC's and the Company's
obligations to make payments hereunder shall terminate with respect to each
Facility at such time as CGC and the Company no longer own such Facility or are
no longer directly or indirectly wholly-owned subsidiaries of Calpine
Corporation. Any amounts which are unpaid at such time or upon the termination
of this Agreement with respect to a Facility as a result of the accrual
described in this Section 2.2 shall be paid (i) in equal monthly installments
over the next two (2) years. Notwithstanding anything to the contrary, the
Secured Parties shall be express third party beneficiaries to this Section and
the defined terms used herein and this Section and such defined terms (to the
extent the same are used in this Section) shall not be amended without their
written consent.

      3.0   TERM. The Term of this Agreement shall commence on the date hereof
and shall continue for a period of ten (10) years, unless extended by mutual
agreement of Company and Contractor or terminated earlier as provided herein.

      4.0   NOTICES. All notices (including invoices) given or delivered
hereunder shall be in writing and shall be deemed given upon the actual date of
receipt. All notices shall be delivered personally, by facsimile or by United
States mail, first class, postage prepaid, to Company and Contractor at the
addresses set forth below, or to such other address as Company or Contractor may
designate by like notice to the other party:

Company:    Invoices:            To the plant manager at the applicable Facility
                                 as set forth on Exhibit Five

            All other notices:   To the plant manager at the applicable Facility
                                 as set forth on Exhibit Five

<PAGE>

                      MASTER MAINTENANCE SERVICES AGREEMENT
                                  BASE CONTRACT

                                       with a copy to:

                                       Calpine Generating Company, LLC
                                       50 West Francisco Street
                                       San Jose, California 95113
                                       Attn: General Counsel
                                       Telephone: (408) 995-5115
                                       Facsimile: (408) 995-0505

Contractor    Invoices and all other   Calpine Operating Services Company,Inc.
              notices:                 104 Woodmere Road
                                       Folsom, California 95630
                                       Attn: General Counsel
                                       Telephone: (916) 995-5115
                                       Facsimile: (916) 995-0505

      5.0   This Agreement is composed of this Base Contract, all Work Orders
issued hereunder and the following attachments:

Part A         Work
Part B         Commercial Terms
Part C         General Terms and Conditions
Part D         Definitions
Exhibit One    Sample Work Order
Exhibit Two    Services Descriptions
Exhibit Three  Pricing Schedule (Parts A through G)
Exhibit Four   Warranty (Parts A through G)
Exhibit Five   Facility Data

This Agreement sets forth the full and complete agreement of the parties with
respect to the subject matter hereof and supersedes any and all proposals,
negotiations and representations of the parties made or had prior to the
execution hereof related to the subject matter of this Agreement

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written

<PAGE>

                      MASTER MAINTENANCE SERVICES AGREEMENT
                                  BASE CONTRACT

CALPINE GENERATING COMPANY,                        CALPINE OPERATING SERVICES
LLC                                                COMPANY, INC.

By:   /s/ Zamir Rauf                               By:   /s/ Rodney Malcolm
      -----------------------                            -----------------------
Name:   ZAMIR RAUF                                 Name:   RODNEY MALCOLM
Title:  Vice President                             Title:  Authorized Signature

BAYTOWN ENERGY CENTER, L.P.                        CARVILLE ENERGY LLC

By:   /s/ Zamir Rauf                               By:   /s/ Zamir Rauf
      -----------------------                            -----------------------
Name:   ZAMIR RAUF                                 Name:   ZAMIR RAUF
Title:  Vice President                             Title:  Vice President

CHANNEL ENERGY CENTER, L.P.                        COLUMBIA ENERGY LLC

By:   /s/ Zamir Rauf                               By:   /s/ Zamir Rauf
      -----------------------                            -----------------------
Name:   ZAMIR RAUF                                 Name:   ZAMIR RAUF
Title:  Vice President                             Title:  Vice President

CORPUS CHRISTI COGENERATION,L.P.                   DECATUR ENERGY CENTER, LLC

By:   /s/ Zamir Rauf                               By:   /s/ Zamir Rauf
      -----------------------                            -----------------------
Name:   ZAMIR RAUF                                 Name:   ZAMIR RAUF
Title:  Vice President                             Title:  Vice President

DELTA ENERGY CENTER, LLC                           FREESTONE POWER GENERATION,
                                                   L.P.

By:   /s/ Zamir Rauf                               By:   /s/ Zamir Rauf
      -----------------------                            -----------------------
Name:   ZAMIR RAUF                                 Name:   ZAMIR RAUF
Title:  Vice President                             Title:  Vice President

<PAGE>
                      MASTER MAINTENANCE SERVICES AGREEMENT
                                  BASE CONTRACT

GOLDENDALE ENERGY CENTER,                          LOS MEDANOS ENERGY CENTER,
LLC                                                LLC

By:   /s/ Zamir Rauf                               By:   /s/ Zamir Rauf
      -----------------------                            -----------------------
Name:   ZAMIR RAUF                                 Name:   ZAMIR RAUF
Title:  Vice President                             Title:  Vice President

MORGAN ENERGY CENTER,LLC                           CALPINE ONETA POWER,L.P.

By:   /s/ Zamir Rauf                               By:   /s/ Zamir Rauf
      -----------------------                            -----------------------
Name:   ZAMIR RAUF                                 Name:   ZAMIR RAUF
Title:  Vice President                             Title:  Vice President

PASTORIA ENERGY FACILITY L.L.C.                    ZION ENERGY,LLC

By:   /s/ Zamir Rauf                               By:   /s/ Zamir Rauf
      -----------------------                            -----------------------
Name:   ZAMIR RAUF                                 Name:   ZAMIR RAUF
Title:  Vice President                             Title:  Vice President

<PAGE>

                                     PART A
                                      WORK

1. DESCRIPTION OF WORK - GENERAL. Except as otherwise expressly provided herein,
   Contractor shall supply all labor, supervision, materials, equipment, tools,
   services, testing devices, and similar items necessary for the performance of
   the Work as described herein.

2.    DESCRIPTION OF WORK - SPECIFIC

      2.1.  The Work to be provided with respect to each Facility may include
the following:

      (a)   Services described in Exhibit Two;

      (b)   New Program Parts listed on Exhibit Three relating to such Facility:

      (c)   Shop Repairs listed on Exhibit Three relating to such Facility;

      (d)   Miscellaneous Hardware listed on Exhibit Three relating to such
            Facility;

      (e)   Technical Field Advisory services listed on Exhibit Three relating
            to such Facility;

      (f)   Program Management/Program Engineer services listed on Exhibit Three
            relating to such Facility; and

      (g)   Such other goods and/or services as Contractor and Company may
            agree.

      2.2.  In connection with the development of the annual operating plan and
budget for each Calendar Year for each Facility pursuant to the Master Operation
& Maintenance Agreement, the Program Manager and Plant Representative for such
Facility will agree on the timing of Scheduled Outages and the Work to be
performed under this Agreement for such Facility during such Calendar Year and
will develop a list of New Program Parts, Miscellaneous Hardware, Shop Repairs
and Services required in connection therewith, which shall be consistent with
such annual operating plan and budget. Such Work and Scheduled Outages for each
Facility shall be set forth in a separate Work Order for such Facility signed by
Company and Contractor and will be priced on a cost reimbursable basis,
including reasonable overhead, not to exceed (to the extent applicable) the
pricing set forth on Exhibit Three relating to such Facility, as adjusted
pursuant to Section 1.2(b) of the Base Contract. Unless otherwise agreed by
Company and Contractor, all New Program Parts must be ordered at least eighteen
(18) months prior to their scheduled delivery date. Any Work for which the price
is not specifically designated on Exhibit Three will be priced according to the
"Cost Plus" section of Exhibit Three.

<PAGE>

                                     PART A
                                      WORK

      2.3.  Each Work Order shall set forth a schedule for the performance of
the Work and may specify the sequence in which such Work is to be performed.

3. UNSCHEDULED AND OTHER OUTAGES

      3.1   If an Unscheduled Outage or Other Outage occurs at a Facility, then
Company may and, to the extent that such Work is to be carried out pursuant to
Exhibit Four (Warranty) for such Facility, shall hire Contractor under a Work
Order to supply, and, if Company hires Contractor for such Work, Contractor
shall supply for the Facility in question:

      (a)   any additional New Program Parts for the Combustion Turbine required
for such Other Outage or Unscheduled Outage of the Combustion Turbine and to the
extent not covered by Contractor's Warranties, on a cost reimbursable basis,
including reasonable overhead, not to exceed (to the extent applicable) the
pricing set forth on Exhibit Three, Pricing Schedule, for such Facility as
adjusted pursuant to Section 1.2(b) of the Base Contract;

      (b)   any Miscellaneous Hardware, Shop Repairs or technical field
assistance (as distinguished from other labor or services) on the Combustion
Turbine required for such Other Outage or Unscheduled Outage and, to the extent
not covered by Contractor's Warranties, on a cost reimbursable basis, including
reasonable overhead, not to exceed (to the extent applicable) the pricing set
forth on Exhibit Three, Pricing Schedule for such Facility, as adjusted by
pursuant to Section 1.2(b) of the Base Contract; and

      (c)   any labor services, equipment, and subcontractors necessary to
remove and reinstall any Program Part(s) or Repaired Part(s), and, the extent of
to the extent not covered by Contractor's Warranties, on a cost reimbursable
basis, including reasonable overhead, not to exceed (to the extent applicable)
the pricing set forth on Exhibit Three, Pricing Schedule for such Facility, as
adjusted pursuant to Section 1.2(b) of the Base Contract.

      3.2   Contractor agrees to take prompt action in the event of any
Unscheduled or Other Outage to provide the services requested or required
hereunder as quickly as reasonably possible.

                                  END OF PART A
                                      WORK

<PAGE>

                                     PART B
                                COMMERCIAL TERMS

1. WORK ORDERS

      1.1.  Contractor shall perform all Work hereunder for each Facility and
any additional Work agreed to by Company and Contractor pursuant to a Work Order
(a sample copy of which is attached as Exhibit One), which shall describe in
more detail the Work to be performed with respect to such Facility.

      1.2.  Each Work Order and/or change thereto shall be mutually agreed upon
and executed by Company and Contractor; provided, however, that Contractor shall
enter into reasonable Work Orders related to performance of Work under its
Warranties.

      1.3.  In the event of conflict between any Work Order and the terms and
conditions of this Agreement, the terms and conditions of this Agreement will
take precedence and govern in all cases unless otherwise expressly agreed in the
Work Order.

2. CONTRACT PRICE

      2.1.  In consideration of the New Program Parts, Miscellaneous Hardware,
Shop Repairs and Services provided by Contractor for a particular Facility,
Company will pay to Contractor for all Work (as detailed in the applicable Work
Order) related to such Facility on a cost reimbursable basis, including
reasonable overhead, not to exceed (to the extent applicable) the pricing set
forth on Exhibit Three, Pricing Schedule, as adjusted pursuant to Section 1.2(b)
of the Base Contract (as so adjusted, the "Contract Priced").

<PAGE>

                                     PART B
                                COMMERCIAL TERMS

      2.2.  Taxes. The prices set forth in Exhibit Three for each Facility do
not include any federal, state or local sales, use, excise, value added, gross
receipts or similar taxes now or hereafter applicable to, measured by or imposed
upon or with respect to the transaction. Company agrees to pay or reimburse
Contractor for any taxes which Contractor or its subcontractors or vendors are
required to pay in connection with the New Program Parts, Miscellaneous
Hardware, Shop Repairs, Services or other Work provided hereunder.

      2.3.  Invoices.

      2.3.1. Contractor shall invoice 50% of the New Program Parts and
Miscellaneous Hardware cost six (6) months prior to delivery and the balance
upon delivery.

      2.3.2. All other costs for Work specified in the Work Order shall be
invoiced upon completion of the Work.

      2.3.3. All invoices shall itemize the charges for services and expenses
provided for in the Work Order as adjusted as adjusted by each Annual Price List
agreed to by Contractor and Company, shall make specific reference to the
Facility and the Work Order Number, and shall have appended thereto such
 supporting documentation as may be required for substantiation.

      2.4.  Payment.

      2.4.1. Subject to Section 2.2 of the Base Contract, on each Calculation
Date, Company shall pay to Contractor the undisputed amount of all invoices then
outstanding and unpaid that the Company has received at least fifteen (15) days
prior to such Calculation Date.

      2.4.2. All payments to Contractor shall be made by wire transfer to the
account designated by Contractor by written notice to Company.

      2.4.3. Any amounts owing from Contractor to Company hereunder with respect
to a particular Facility may at Company's option be credited against amounts
owing by Company to Contractor hereunder with respect to the same Facility.

      2.5.  Notice of Payment Disputes.

      2.5.1. Notwithstanding Company's obligations under Section 2.4 of this
Part B, but subject to Section 2.6 of this Part B, if prior to the expiration of
the applicable period for payment referenced in Section 2.4 of this Part B,
Company disputes that the provision of any Program Parts, Miscellaneous
Hardware, Shop Repairs or Services for the applicable Facility is in accordance
with this Agreement, Company shall, prior to the

<PAGE>

                                     PART B
                                COMMERCIAL TERMS

expiration of such period, provide Contractor with written notice identifying
the basis for such dispute.

      2.5.2. Thereafter, the payment of such disputed amounts shall be deferred
until such dispute has been resolved to the satisfaction of Company and
Contractor. Any dispute which is not resolved by mutual agreement shall be
resolved in accordance with Dispute Resolution in Section 30, Part C, General
Terms and Conditions.

      2.6.  Late Payments. If there is a dispute about any amount invoiced by
Contractor, the amount not in dispute shall be promptly paid as provided herein.
Any undisputed amount that is not paid when due and any disputed amount which is
ultimately determined to have been payable prior to the actual date of payment
shall be paid with interest, at the Delayed Payment Rate, from the date due to
the date of payment.

      2.7.  Payments Not Acceptance of Program Parts, Miscellaneous Hardware,
Shop Repairs or Services. No payment made hereunder shall be considered or
deemed to represent that Company has inspected the Program Parts, Miscellaneous
Hardware, Shop Repairs or Services or checked the quality or quantity thereof
and shall not be deemed or construed as approval or acceptance of any Program
Parts, Miscellaneous Hardware, Shop Repairs or Services, or as a waiver of any
claim or right that Company may then or thereafter have, including any warranty
right.

3. BILLING

      3.1   Invoices for Work performed under the Agreement shall be clearly
identified with the Facility name and Work Order number.

      3.2   Invoices shall be submitted to the address set forth in Section 4.0
of the Base Contract.

                                   END PART B
                                COMMERCIAL TERMS

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

         The following terms and conditions shall apply to all Services and Work
Orders unless specific provision to the contrary is made in the Work Order or
unless a certain provision of this Part C is not applicable to the particular
scope of work provided for in the Work Order.

1.  Contractor's Obligations and Understandings.

    1.1. Contractor shall furnish all supervision, labor, and except as
         specified otherwise in writing, all equipment, tools, materials,
         services, and supplies necessary for the proper performance and timely
         execution of all Work in accordance with the terms of the Agreement.

    1.2. Contractor shall not be reimbursed for overtime hours without the prior
         written consent of the Company. Overtime compensation shall be limited
         to the actual cost to Contractor of the overtime portion of applicable
         wages, plus benefits and such other payroll burdens as are actually
         required and paid with respect to the overtime.

    l.3. Contractor shall not, without the express written permission of
         Company, bring onto any Facility or Facility Site any hazardous or
         toxic materials. If Contractor receives such permission, Contractor
         shall notify Company as to the identity, location and any suggested
         appropriate protective measures respecting the hazardous or toxic
         materials, and, further, shall provide any appropriate Material Safety
         Data Sheets (MSDS) for same.

2.  Changes.

        2.1     Changes. Company may, at any time by written notice to
        Contractor, request to alter or vary the New Program Parts,
        Miscellaneous Hardware, Shop Repairs or Services with respect to one or
        more Facilities, or make deletions thereto, or request additional New
        Program Parts, Miscellaneous Hardware, Shop Repairs or Services within
        the general scope of this Agreement for one or more Facilities, or
        request an alteration in the schedule for providing New Program Parts,
        Miscellaneous Hardware, Shop Repairs and Services for one or more
        Facilities (a "Change"). Contractor shall not, however, be required to
        accept any requested Change.

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

        2.2     Change Orders. If Company requests a Change with respect to a
        Facility, Contractor shall promptly prepare and submit to Company an
        estimate of the increase or decrease, if any, in the cost of and/or time
        for performance of (his Agreement and any adjustment to the Contract
        Price and payment terms, schedule or other provisions of this Agreement
        that would be required by such Change, together with an explanation of
        the basis therefor, and shall inform Company whether, in Contractor's
        opinion, such Change should result in an adjustment to the price and/or
        payment terms stated in any Work Order for such Facility, the schedule
        or any other provision of this Agreement. If Company and Contractor
        agree on the adjustments to the Contract Price and payment terms,
        schedule and/or other provision of this Agreement that would be required
        by such Change, Company and Contractor shall enter into a written change
        order ("Change Order") describing in detail the Change and the agreed
        adjustments to the Contract Price and payment terms, Service Schedule or
        other provision of this Agreement.

        2.3     Authorization. No Change Order shall be of any force or effect
        unless executed in writing by Company and Contractor.

        2.4     Other Provisions Unaffected. Except to the extent a Change Order
        specifically amends one or more provisions of this Agreement with
        respect to one or more Facilities or in general, all provisions of this
        Agreement with respect to such Facilities or in general, as applicable,
        shall apply to all Change Orders with respect to such Facilities or in
        general, as applicable,, and no Change Order shall be implied as a
        result of any other Change Order.

        2.5     Change In Law. In the event that any change in Law or standards
        and codes enacted or otherwise approved after the date of this Agreement
        requires or makes advisable any modifications in the design of the New
        Program Parts, Miscellaneous Hardware, Shop Repaired Program Parts and
        other Services provided hereunder with respect to a Facility or in
        general, Company or Contractor, as the case may be, shall reasonably
        promptly notify the other thereof in writing upon its discovery of such
        change in Law or standards and codes. If any such modification is
        required by Law, Contractor shall make such modification and, if such
        modification is not so required, Contractor shall make such modification
        only if requested by Company (provided such modification is reasonably
        technically feasible). In either case, if such modification increases
        Contractor's cost of producing the New Program Parts, Miscellaneous
        Hardware, and Shop Repaired Program Parts or affects any other provision
        of this Agreement, the parties shall negotiate in good faith and enter
        into a Change Order in accordance with the provisions of Section 2.2 of
        this Part C. Nothing in this Section 2.5 of this Part C shall limit
        Seller's obligation under Section 16.

3.  Independent Contractor. Contractor is and shall be deemed to be an
    independent contractor in respect to all Work covered by the Agreement, and
    any workers,

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

   employees or subcontractors used by it in connection with the Work are not
   and shall not be considered in any sense to be the employees or servants of
   Company. Contractor shall have control over the details and means for
   performing the Work, provided that Contractor is in compliance with the terms
   of this Agreement. Anything herein which may seem to give Company the right
   to direct Contractor, is and shall be deemed to reflect only Company's
   interest in the intended results of the Work.

4. Supervision. Contractor assumes the responsibility for providing supervision,
   satisfactory to Company, for the equipment, materials, and workmanship used
   in and the personnel engaged in the execution of the Work covered by the
   Agreement.

5.  Subcontracts.

    5.1. Contractor may perform itself, purchase or subcontract with an
         affiliate or a qualified third party with respect to any Work performed
         hereunder at the prices set forth in Exhibit Three for the applicable
         Facility, as adjusted in accordance with the applicable Annual Price
         List for such Facility. Any purchase from or subcontract with an
         affiliate shall be on terms and conditions no less favorable to the
         Company than could reasonably be obtained from unaffiliated third
         parties

    5.2. Contractor shall coordinate all subcontractor(s) activities at each
         Facility Site. Nothing contained in the Agreement documents shall
         create any contractual relationship between any subcontractor and
         Company or release or relieve Contractor from any of its obligations or
         liability under the Agreement.

    5.3. Contractor shall be as fully responsible for the acts and omissions of
         its subcontractors and of persons either directly or indirectly
         employed by them as it is for the acts and omissions of persons
         directly employed or used by it.

6.  Identification of Contractor's Personnel.

    6.1. Contractor's employees entering any Facility Site shall be properly
         identified as employees of Contractor and shall, while on the premises,
         conform to all safety and other rules of conduct in effect at such
         Facility. Contractor's personnel shall also promptly comply with any
         Company instructions for the prevention of accidents, fire hazards, and
         other unsafe or perilous practices.

    6.2. Company reserves the right to refuse admittance to its Facilities to
         any employee of Contractor for any reasonable cause; and such refusal
         shall not constitute cause for claim or damages.

7.  Permits. Company shall obtain all licenses and permits, if any, required by
    the applicable governing authorities having jurisdiction with respect to the
    performance of the Work at a Facility.

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

8.  Coordination of Operations and Activities.

        8.1     Contractor shall conduct its Work in such manner that it will
        not interfere with the continuing operation of Company's business. Where
        Work is to be performed that will interfere in any way with such
        continuing operation, Company shall be consulted, and before any such
        Work is undertaken, an agreement shall be reached as to the sequence to
        be followed.

        8.2     Company shall be responsible for coordinating work being done by
        Company or other contractors engaged by Company with the Work being done
        by Contractor hereunder at a Facility. In the event any action,
        activities or work being done by Company or its other contractors
        interferes with or delays the performance of Work at a Facility by
        Contractor, Contractor shall be entitled to equitable schedule relief
        for such Work and shall be reimbursed for any direct costs incurred as a
        result of such interference or delay. All modifications to the schedule
        and/or compensation for the Work shall be reflected in a supplemental
        Work Order or a Change Order, as applicable.

9.  Order of Completion; Use of Completed Portions. Company shall have the right
    at any time to take possession of and use any completed or partially
    completed portion of the Work at any Facility to the extent that it does not
    create an unsafe work environment. Such taking possession and use shall not
    per se be deemed an acceptance of any part of the Work so taken. If such
    taking possession or use of a Facility increases the cost of or delays the
    Work for such Facility, Contractor shall be entitled to equitable extra
    compensation and/or extension of time, as the parties may agree, which shall
    be reflected in a supplemental Work Order or a Change Order, as applicable.
    Company and Contractor shall mutually agree as to whether Company or
    Contractor is liable for damages that may occur and the extent of
    Contractor's responsibility therefor, if any, when Company's operational
    needs dictate use of partially completed Work.

10. INSURANCE

        10.1. Contractor's Insurance. Without limiting Contractor's liability
under this Agreement, Contractor shall maintain in full force and effect during
the term of this Agreement for each Facility with insurance companies having a
Best's Insurance Guide rating of "A-IX" or better (or otherwise satisfactory to
Company and Lender), the insurance described below with respect to such
Facility, with coverage at levels normal in the ordinary course of its business,
but at levels no less than the minimums indicated, and shall provide to Company
certificates evidencing such coverages.

        (a)   Commercial general liability insurance, including bodily injury,
            property damage, products/completed operations, contractual, and
            personal injury

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

            liability, with a combined single limit of $1,000,000 for each
            occurrence and in the annual aggregate;

        (b)   Umbrella excess liability coverage providing excess general
            liability, automobile liability and employer's liability with a
            combined single limit of $25,000,000 for each occurrence and in the
            annual aggregate;

        (c)   Workers' Compensation insurance with statutory limits, and
            Employers Liability insurance with limits of not less than
            $1,000,000 for each occurrence and in the annual aggregate; and

        (d)   Business automobile liability insurance covering owned, non-owned
            and hired automobiles for a combined single limit of $1,000,000 for
            each occurrence and in the annual aggregate.

   Notwithstanding the foregoing, Contractor may self insure the Contractor's
   Workers Compensation insurance obligation.

      10.2. Policies. Contractor agrees to cause each liability policy to be
endorsed to provide that it is primary to any insurance carried by Company, and
Contractor agrees to cause the policies required under clauses (a), (b) and (d)
above to name each of Company's Indemnitees as an additional insured and to
include a waiver of subrogation against each of the additional insureds. All
insurance policies shall be endorsed to provide that the Company be given thirty
(30) days' advance notice of cancellation or material change. No payments shall
be due from Company to Contractor under this Agreement at any time when
Contractor is not in full compliance with this Article 10.

      10.3 Company's Insurance

            10.3.1 Without limiting Company's liability under this Agreement,
Company shall maintain in full force and effect from and after the effective
date for the Facility in question, with insurance companies having a Best's
Insurance Guide rating of "A-IX" or better (or otherwise satisfactory to
Contractor), property insurance, including boiler and machinery coverage
covering all real and personal property of Company on a 100% replacement cost
basis, with coverage at levels normal in the ordinary course of its business and
shall provide to Contractor certificates evidencing such coverages.

            10.3.2 Company agrees to cause such insurance policies to be
endorsed to provide that it is primary to any insurance carried by Contractor,
and agrees to cause such policy to name Contractor, its Affiliates (excluding
Company), and its subcontractors of every tier identified in writing for this
purpose to Company by Contractor as an additional insured. Contractor shall be
given thirty (30) days' advance notice of cancellation or material change. Such
policy shall include waivers of subrogation rights against each of the
additional insureds. Contractor shall not be

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

obligated to perform work under this Agreement at any time when Company is not
in full compliance with this Article 10.

11. INDEMNIFICATION.

      11.1 Contractor's Indemnity. To the fullest extent permitted by Law,
Contractor shall defend, indemnify and hold harmless Company's Indemnitees from
and against all loss, damage, expense and liability (including court costs and
reasonable attorneys' fees) resulting from (i) injury to or death of persons,
including employees of Contractor or the Indemnitees, and from damage to or
loss of third party property, caused by or arising in whole or in part out of,
but only to the extent of the negligent acts or omissions or acts of willful
misconduct of Contractor (or its subcontractors, vendors, officers, employees or
agents) in connection with the Services provided by Contractor under this
Agreement, or (ii) injury to or death of persons, including employees of
Contractor or the Indemnitees and from damage to or loss of third party property
resulting from, but only to the extent of, the failure of the New Program Parts,
Miscellaneous Hardware, or Shop Repairs provided by Contractor under this
Agreement, to meet the Warranties specified in Exhibit Four. Contractor's
indemnity obligation under this Section 11.1 with respect to a Facility shall
not apply to any liabilities arising out of or relating to events or
circumstances occurring more than one (1) year after the expiration or
termination of this Agreement with respect to such Facility. In no event shall
any provision in this Section 11.1 limit Company's rights under the rest of this
Agreement.

      11.2 Company's Indemnity. To the fullest extent permitted by Law, Company
shall defend, indemnify and hold harmless Contractor's Indemnitees from and
against all loss, damage, expense and liability (including court costs and
reasonable attorneys' fees) resulting from injury to or death of persons,
including employees of Company or the Indemnitees, and from damage to or loss of
third party property, caused by or arising in whole or in part out of, but only
to the extent of the negligent acts or omissions or acts of willful misconduct
of Company (or its contractors, vendors, officers, employees or agents, other
than Contractor) in connection with the New Program Parts, Miscellaneous
Hardware, Shop Repairs, Services, or other performance under this Agreement.
Company's indemnity obligation under this Section 11.2 with respect to a
Facility shall not apply to any liabilities arising out of or relating to events
or circumstances occurring more than one (1) year after the expiration or
termination of this Agreement with respect to such Facility.

      11.3 Employee Claims. In any and all claims against Company's Indemnitees
by any employee of Contractor or any subcontractor or vendor of Contractor or by
anyone directly or indirectly employed by any of them or anyone for whose acts
any of them may be liable, the indemnification obligation stated in Section 11.1
of this Part C shall not be limited in any way by any limitation on the amount
or type of damages, compensation or benefits payable by or for Contractor or any
such subcontractor or

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

vendor under any applicable workers' compensation Law, disability Laws, or other
employee benefit Law.

      11.4  Intellectual Property Rights.

            11.4.1 Contractor Indemnity. Except as provided in Section 11.4.2 of
this Part C, Contractor agrees to defend, indemnify and hold harmless Company
from any claim of any third party that any New Program Parts or Miscellaneous
Hardware furnished under this Agreement infringes any U.S. or Canadian patent or
other U.S. or Canadian intellectual property rights of any type. If Company
notifies Contractor reasonably promptly of the receipt of any such claim and
gives Company reasonable information and assistance, Contractor shall, at its
own expense and option, either (i) settle or defend the claim or any suit or
proceeding and pay all damages and costs awarded in it against Company, (ii)
procure for Company, or reimburse Company for procuring, the right to continue
using the infringing New Program Parts or Miscellaneous Hardware, (iii) modify
the infringing New Program Parts or Miscellaneous Hardware so that it becomes
non-infringing, or (iv) replace the infringing New Program Parts or
Miscellaneous Hardware with non-infringing New Program Parts or Miscellaneous
Hardware. If in connection with any such claim the continued use of any New
Program Parts or Miscellaneous Hardware for the purpose intended is forbidden by
any court of competent jurisdiction, Seller shall at its option take one or more
of the actions under preceding clauses (i), (ii), (iii), or (iv), provided that
in no case shall Contractor take any such action which materially adversely
affects Company's continued use and enjoyment of the New Program Parts or
Miscellaneous Hardware without the prior written consent of Company.

            11.4.2 Company Indemnity. Notwithstanding the provisions of Section
11.4.1 of this Part C, the indemnification obligation of Contractor set forth
therein shall not apply to New Program Parts or Miscellaneous Hardware which
are:

            (i)   supplied according to Company's specific design requirements,
            where such requirements cause Contractor to deviate from its normal
            practices and where Contractor has advised Company in writing of
            such deviation on or prior to the delivery of the Program Part;

            (ii)  modified by Company or its contractors after delivery to
            Company hereunder, without the consent of Contractor, where such
            modification gives rise to a claim of infringement; or

            (iii) combined by Company or its contractors with items not
            furnished by Contractor hereunder, where such combination gives rise
            to a claim of infringement.

In any such case of infringement or alleged infringement arising from the
circumstances described above, Company agrees to defend, indemnify and hold
harmless Contractor, provided Contractor notifies Company reasonably promptly of
the receipt of any such

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

claim and gives Company reasonable information and assistance in the defense
thereof. The rights, obligations and remedies set forth in this Section 11.4 are
the exclusive rights, obligations and remedies of the parties with respect to
infringement of any patent, copyright, or other intellectual property right and
fulfillment of such obligations shall constitute fulfillment of all liabilities
of the parties whether arising in contract, tort, including negligence strict
liability or otherwise, with respect to patent, copyright, intellectual or
proprietary rights.

      11.5 Lien Indemnity. Contractor shall indemnify and hold harmless Company
and defend Company from each and every lien filed in connection with the
performance of the Services and supply of the New Program Parts, Miscellaneous
Hardware and Shop Repairs, including all expenses and reasonable attorney's fees
incurred in discharging such lien or similar encumbrance to the extent required
payments have been made under this Agreement. If Contractor fails to immediately
discharge any lien or similar encumbrance upon a Facility or Facility Site, any
portion thereof or any New Program Parts, Miscellaneous Hardware, Shop Repairs
or materials encompassed therein for which Contractor is responsible hereunder,
Contractor shall satisfy or defend any such lien or similar encumbrance;
provided, however, that Contractor shall have the right to submit a bond
satisfactory to Company in the amount of any such lien or encumbrance if
Contractor, despite its best efforts, has been unable to obtain discharge
thereof; and provided further that Company shall not be required to accept any
such bond in lieu of discharge at the end of the Term hereof. If Contractor does
not promptly satisfy such lien or similar encumbrance (or, where permitted,
fails to provide Company a bond in lieu thereof), Company shall have the right,
at its option and after notice to Contractor, to post a bond or pay or settle
such lien or similar encumbrance by bond or agreement, and Contractor shall
within five (5) days of request of Company, reimburse Company for all costs
incurred by Company in posting such bond or discharging such lien or similar
encumbrance, including administrative costs, attorneys' fees and other expenses
and/or pursue any other remedies.

       11.6 Notice of Claim. Contractor's Indemnitees and Company's Indemnitee
(each an "Indemnitee") shall promptly after the receipt of notice of the
commencement of any legal action or of any claims against such Indemnitee in
respect of which indemnification may be sought pursuant to the foregoing
provisions of this Article notify the indemnifying party (the "Indemnitor") in
writing thereof, provided that the failure of an Indemnitee promptly to provide
any such notice shall only reduce the liability of the Indemnitor by the amount
of any damages attributable to the failure of the Indemnitee to give such notice
in such manner. In case any such claim or legal action shall be made or brought
against an Indemnitee and such Indemnitee shall notify the Indemnitor thereof,
the Indemnitor may, or if so requested by such Indemnitee shall, assume the
defense thereof, and after notice from the Indemnitor to such Indemnitee of an
election to assume the defense thereof will not be liable to such Indemnitee
under this Article 11 for any legal fees and expenses subsequently incurred by
such Indemnitee in connection with the defense thereof. No Indemnitee shall
settle any indemnified claim over which the Indemnitor has not been afforded the
opportunity to assume the defense without the

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

Indemnitor's approval, which approval shall not be unreasonably withheld. The
Indemnitor shall control the settlement of all claims over which it has assumed
the defense; provided, however, that the Indemnitor shall not conclude any
settlement which requires any action or forbearance from action by an Indemnitee
or any of its Affiliates, or any payment by an Indemnitee or any of its
Affiliates, without the prior approval of the Indemnitee and such approval shall
not be unreasonably withheld. The Indemnitee shall provide reasonable assistance
to the Indemnitor when the Indemnitor so requests, at the Indemnitor's expense,
in connection with such legal action or claim. In all cases, the Indemnitee
shall have the right to participate in and be represented by counsel of its own
choice and at its own expense in any such legal action or with respect to any
claim.

      11.6 Term of Indemnities. Notwithstanding any other provision in this
Agreement to the contrary, but subject to the specific limitations contained
herein with respect to indemnification obligations, including the limitations
contained in Sections 11.1 and 11.2, the indemnification obligations and rights
set forth in this Article 11 with respect to a Facility shall survive the
expiration or other termination of this Agreement with respect to such Facility,
and Company's acceptance of Contractor's New Program Parts, Miscellaneous
Hardware, Shop Repairs and Services shall not be construed to relieve Contractor
of any obligation under this Article 11.

12. TERMINATION AND SUSPENSION

      12.1 Termination for Contractor's Inability to Perform If any proceeding
is instituted against Contractor seeking to adjudicate Contractor as a bankrupt
or insolvent, or if Contractor makes a general assignment for the benefit of its
creditors, or if a receiver is appointed on account of the insolvency of
Contractor, or if Contractor files a petition seeking to take advantage of any
other Law relating to bankruptcy, insolvency, reorganization, winding up or
composition or readjustment of debts and, in the case of any such proceeding
instituted against Contractor (but not by Contractor), if such proceeding is not
dismissed within sixty (60) days of such filing, Company may without prejudice
to any other right or remedy Company may have, terminate this Agreement as to
any or all of the Facilities by written notice to Contractor.

      12.2 Termination for Contractor's Failure to Perform If Contractor is in
material default of any provision of this Agreement with respect to a Facility,
and fails to fully cure the same within thirty (30) days after receipt of
written notice thereof from Company (or such longer period not to exceed ninety
(90) days as may be reasonably required to cure the same, provided Contractor
has commenced cure of such default within thirty (30) days after receipt of such
written notice and diligently pursues such cure to completion), Company may,
without prejudice to any other right or remedy, terminate this Agreement as to
the affected Facility by written notice to Contractor.

      12.3 Contractor's Right to Payment Upon Termination If Company elects to
terminate this Agreement with respect to any Facility pursuant to Section 12.1
or 12.2 of

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

this Part C, Contractor shall not be entitled to retain or receive any amounts
paid or payable hereunder with respect to such Facility except for

      (i)   the amount equal to the Contract Price for any New Program Parts,
            Miscellaneous Hardware, Shop Repairs and Services for such Facility
            of which Company has taken possession or received after termination
            with respect to such Facility, and

      (ii)  any payments with respect to such Facility that were made or were
            due prior to termination.

      12.4 Termination for Convenience Company may, at its sole option,
terminate this Agreement as to any or all of the Facilities, at any time for
Company's convenience, without cause (including upon the sale of a Facility), by
providing thirty (30) days written notice to Contractor prior to termination.
Upon such a termination:

      a.    Contractor shall stop work on the applicable Facility or Facilities
      and place no further orders or lower tier subcontracts for such Facility
      or Facilities.

      b.    If so directed by Company, Contractor shall assign to Company any
      and all orders or subcontracts outstanding hereunder with respect to such
      Facility or Facilities.

      c.    Contractor shall protect property related to such Facility or
      Facilities in Contractor's possession in which Company has or may acquire
      an interest, and shall direct suppliers and subcontractors on orders or
      subcontracts outstanding to do the same.

      d.    The Company, at its option, may acquire any and all parts that have
      been removed from the Combustion Turbine(s) for such Facility or
      Facilities, and are under repair or planned to be repaired or assessed for
      repair.

      e.    Within one (1) month after receipt of such notice of termination,
      Contractor will submit to Company in writing its claim for reimbursement
      of costs resulting from the termination, which shall include without
      duplication:

            (i)   The Contract Price of items of New Program Parts,
                  Miscellaneous Hardware, and Shop Repairs and Services relating
                  to the Facility or Facilities as to which this Agreement is
                  being terminated pursuant to this Section 12.4 already
                  provided to and accepted by Company;

            (ii)  Reasonable expenses of demobilization, equipment storage,
                  transportation, and handling including reasonable overhead and
                  profit;

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

            (iii) Any actual direct cost, including reasonable overhead and
                  profit, incurred by Contractor prior to termination and
                  properly allowable under good commercial accounting practices
                  for the terminated portion of the Agreement;

            (iv)  Reasonable expenses actually incurred by Contractor and
                  approved by Company in settling Contractor's terminated orders
                  and subcontracts with respect to such Facility and the
                  protection of property in which Company has or may have an
                  interest. In no event shall the Contractor or its
                  subcontractors or suppliers be entitled to reimbursement for
                  any cost incurred subsequent to the effective date of
                  termination with respect to such Facility except for those
                  allowed herein; and

            (v)   Cancellation charges with respect to each affected Facility in
                  accordance with the following:

                  For terminations hereunder prior to the end of the third year
                  after the effective date of this Agreement with respect to
                  such Facility: $ 300,000 per Combustion Turbine.

                  For terminations thereafter with respect to such Facility:
                  $100,000 per Combustion Turbine.

      In no event shall Company be responsible for anticipatory profits or lost
opportunity costs. Payments under this Section, together with all payments made
under this Agreement prior to the termination, shall not exceed the Contract
Price for the Work performed plus any additional amounts described in this
Article 12. Contractor shall transfer title to and deliver on Company's
instructions any property related to any of the Facilities as to which this
Agreement has been terminated (including contracts, books and records) in
Contractor's possession or under its control, and the cost of such delivery will
be paid by Company. Company may audit all components of any termination claim
including any orders and contracts of any tier that Contractor has terminated.

      12.6 Termination by Contractor Subject to Section 2.2 of the Base Contract
and Section 2.4 of Part B, if, with respect to any invoice delivered in
accordance with Part B of this Agreement, Company neither makes payment thereon
nor provides a notice of dispute relating thereto, in either case on the
relevant Calculation Date, Contractor may at its option terminate this Agreement
with respect to the Facility for which payment was not received by written
notice to Company; provided that, no such termination notice shall be effective
unless at least thirty (30) days prior to such notice Contractor shall have
first notified Company in writing of Contractor's intention to so terminate this
Agreement as to such Facility at the end of such thirty (30) day period if
payment is not made. In addition, if any proceeding is instituted against
Company seeking to adjudicate Company as a bankrupt or insolvent, or if Company
makes a general assignment for the benefit of its creditors, or if a receiver is
appointed on account of the insolvency of Company, or if

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

Company files a petition seeking to take advantage of any other Law relating to
bankruptcy, insolvency, reorganization, winding up or composition or
readjustment of debts and, in the case of any such proceeding instituted against
Company (but not by Company) if such proceeding is not dismissed within sixty
(60) days of such filing, Contractor may terminate this Agreement as to any or
all of the Facilities by written notice to Company. Any termination under this
Section shall be treated as if a termination for convenience by Company.

      12.7 Suspension. Company may direct Contractor to suspend performance of
this Agreement with respect to a particular Facility at any time by Company's
ten (10) day prior notice of suspension, setting out, if appropriate a
description of the activities required in order to suspend performance in an
orderly manner. Contractor shall suspend performance as so instructed, and shall
resume the suspended performance as promptly as practical following Company's
notice of resumption. In the event of suspension, Company shall reimburse
Contractor for its actual direct out-of-pocket costs reasonably incurred plus
reasonable overhead costs and profit incurred as a result of such suspension. If
the aggregate period of any suspension exceeds 365 consecutive days, at the
option of either party, the Agreement shall be deemed terminated with respect to
such Facility for Company's convenience.

      12.8 Independent Defaults and Remedies. Notwithstanding anything herein to
the contrary, a breach or default by Company or Contractor of any obligation
hereunder relating to a particular Facility (i) shall only be a breach or
default with respect to such Facility, (ii) shall only entitle the other party
to exercise remedies under this Agreement with respect to such Facility, and
(iii) shall not affect the rights and obligations of Contractor or Company
hereunder with respect to any other Facility.

13. Confidential Information. Company and Contractor agree to hold confidential
    and not to divulge or allow their respective employees, agents, or
    subcontractors to divulge to third party(ies), and not to use in any way
    with any person, without the other party's prior written consent, any and
    all technical information and/or proprietary business information revealed,
    directly or indirectly to either Party by either Party or any of its
    affiliated companies or resulting from Work done by Contractor for Company,
    except (a) Company can disclose such information to a Lender or the Lender's
    consultants, so long as such Lender and the Lender's consultants agree to
    keep such information confidential, (b) Company and Contractor may disclose
    such information to their respective consultants, advisors, accountants and
    counsel, and (c) Company and Contractor may disclose such information as
    required by Law or exchange rule, (d) to the extent that and when such
    information becomes publicly known or otherwise is or comes into the public
    domain other than through a wrongful act of Company or Contractor, as
    applicable, and (e) as Company and Contractor may agree from time to time.
    These obligations of confidentiality shall survive the termination of the
    Agreement with respect to any or all of the Facilities regardless of the
    cause or reason for termination.

14. Contractor's Equipment and Facilities.

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

    14.1. All Contractor's equipment must be positively identified with
        Contractor's name by stamp or other suitable marking.

    14.2. Equipment, materials, tools and any other items not being used for the
        Work with respect to a Facility shall not be permitted at the applicable
        Facility Site.

    14.3. If any Company-owned tools and equipment are loaned to Contractor with
        respect to Work performed at a Facility, they must be returned to
        Company's tool room at the applicable Facility Site by the date
        specified by Company's personnel.

    14.4. Contractor shall not locate any permanent facilities on or within a
        Facility Site, except with the knowledge and written consent of Company.
        Such facilities include offices, fabrication areas, equipment parking,
        and maintenance locations. At Company's discretion, suitable space for a
        field office, material and equipment storage area, fabricating, etc.,
        may be designated by Company at a Facility Site as required in
        connection with the Work with respect to such Facility. At the
        completion of such Work, Contractor will be required to remove these
        temporary facilities from such Facility Site and leave the impacted area
        in its original condition.

15. Contractor's Personnel. It shall be the Contractor's responsibility to
    ascertain that all Contractor's personnel are qualified in accordance with
    accepted industry standards.

16. Contractor's Compliance with Legal Requirements

    16.1. In the performance of the Services, Contractor shall comply, and shall
        require each of its subcontractors to comply, with the requirements of
        any and all applicable laws, regulations, permits, rules and orders of
        any governmental body having jurisdiction over the performance of this
        Agreement. Contractor further agrees to indemnify and hold Company
        harmless from and against any cost, expense, attorney's fee, citation,
        fine, penalty and liability of every kind and nature which might be
        imposed by reason of any asserted or established violation of any such
        laws, orders, rules, permits and/or regulations. To the extent that this
        Agreement covers services and/or supplies subject to the provisions of
        Executive Order No. 11246 dated September 24, 1965, as amended and
        supplemented, the provisions of Sec. 202, subparagraphs (1) through (7)
        of said Order are, with the rules, regulations and orders of the
        Secretary of Labor thereunder, made a part hereof as fully as if copied
        herein in full. Contractor hereby certifies that it will comply fully
        with Executive Order 11246 as amended by Executive Order 11375, and the
        rules and regulations issued thereunder.

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

    1.6.2. Contractor shall perform the Work in compliance with all applicable
        rules, regulations, orders, standards and interpretations promulgated
        under the Occupational Safety and Health Act as in effect on the date of
        performance hereunder. If, during the performance of the work any
        administrative, executive or legislative changes arise regarding the
        Occupational Safety and Health Act, as amended, Contractor and Company
        shall mutually agree upon any changes required in the Work, and such
        changes shall be treated as Additional Work.

    16.3. Contractor will not discriminate against any employee or applicant for
        employment because of race, religion, color, sex or national origin; and
        it will take action to ensure that all applicants for employment and all
        employees during employment are treated without regard to their race,
        religion, color, sex, national origin, veteran status, handicap or
        minority business enterprise. Contractor will comply with all applicable
        laws and regulations relating to affirmative action, equal employment
        opportunities and non-discrimination. Upon request, Contractor will
        provide written certification of this compliance to Company.

    16.4. Contractor shall comply with all applicable federal and state wage and
        hour laws for all Work performed under this Agreement.

17. Materials. Items to be supplied by Company with respect to a Facility will
    be made available to Contractor at Company's normal storage locations for
    such Facility, unless otherwise specified. Company shall retain the right to
    stipulate in the applicable Work Order what items, if any, of the materials,
    supplies, tools, machinery, and equipment required to perform the Work are
    to be delivered to the job site by Contractor; provided, however, that if
    some of the items so stipulated are not provided for in the applicable
    Exhibit Three, they will be included only if Company and Contractor agree on
    the price and terms for providing such items. All materials, supplies,
    machinery, and equipment purchased by Contractor for a Facility that become
    a permanent part of the Work shall meet Company's specifications and/or
    standards. When Work is done on a reimbursable basis, Contractor shall
    furnish Company, when requested, copies of all purchase orders for such
    materials, supplies, machinery, and equipment, at the time the orders are
    placed.

18. Inspection.

    18.1.Inspections performed by Company or any omissions or failures on the
        part of Company to inspect, disapprove or reject any Work, materials,
        supplies, machinery or equipment shall not be construed in any way to
        relieve the Contractor of its responsibilities and liabilities under the
        terms or obligations stated in any and/or all documents that form the
        Agreement.

19. Cleaning-up.

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

    19.1. During execution of the specified Work, Contractor shall keep the work
        site clear of debris and materials created by Contractor in
        performance of the Work so as not to interfere with normal operations at
        the Facility in question. Upon completion of the Work with respect to a
        Facility, Contractor shall clear the work site for such Facility of all
        debris, materials, and equipment and leave the work site "broom clean"
        and ready for Company usage. Final payment with respect to a Facility
        will not be made if the area is not clean and safe. Company shall
        dispose of debris.

    19.2. Contractor shall inform Company immediately if, during the course of
        the Work, Contractor produces or determines that it is handling any
        material which could be classified as hazardous waste pursuant to any
        federal, state or local environmental law or regulation. In the event
        Contractor is handling a hazardous waste, Contractor and Company shall
        consult on the proper handling and disposal of same.

20. Force Majeure. Neither party shall be liable for any delays or failures in
    performance hereunder (except performance of any payment obligation with
    respect to amounts which have become due and payable) due to fire, flood,
    earthquake, wind storm, riot, acts of God, acts of war or the public enemy,
    civil disturbance, strikes at facilities other than Contractor's, orders of
    any governmental authority, or other similar unforeseeable causes beyond the
    reasonable control and without the fault or negligence of the party
    incurring such delay (each a "Force Majeure"), provided that such party has
    diligently sought to mitigate the potential impact of any such delay. A
    party which anticipates claiming any delay in performance by reason of any
    such occurrence shall within three (3) business days after obtaining
    knowledge of such occurrence notify the other party in writing thereof. The
    time for performance of a party's obligations hereunder that has been
    delayed due to Force Majeure shall be extended as reasonably necessary;
    provided, however, that no time period hereunder that is extended by reason
    of such causes shall be extended for a period exceeding the time reasonably
    necessary to overcome the Force Majeure. No such causes shall be the basis
    for a request for additional compensation or for an increase of the Contract
    Price.

21. Audit.

    21.1.Contractor shall maintain, separately for each Facility, adequate
        books, payrolls, and records satisfactory to Company in connection with
        any Work performed hereunder with respect to such Facility and shall
        retain all such written materials for a period of not less than two (2)
        years after completion of Work for such Facility. Company and its duly
        authorized representative shall have the right to audit the same at any
        reasonable time or times, and to submit claims, if any, within two years
        after completion of the Work for such Facility.

22. Delivery; Transfer of Title

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

    22.1. Delivery of New Program Parts, Shop Repaired Program Parts or
        Miscellaneous Hardware. Delivery of each New Program Part, Shop Repaired
        Program Part or Miscellaneous Hardware supplied under this Agreement
        (referred to herein as "Delivery") shall be made by Contractor to
        Company when such New Program Part, Shop Repaired Program Part,
        Miscellaneous Hardware, or component thereof, arrives free on board the
        carrier (FOB) at the Facility Site or at the nearest accessible rail
        siding to the Facility Site. Title and risk of loss or damage to each
        such New Program Part, Shop Repaired Program Part, Miscellaneous
        Hardware, or component thereof, shall pass from Contractor to Company
        upon Delivery.

    22.2. Program Parts in Need of Repair. Program Part(s) sent to Contractor
        for Shop Repair or Program Part(s) and Miscellaneous Hardware being
        returned pursuant to the warranty provisions of this Agreement will be
        delivered by Company at its own cost and expense to Contractor's repair
        facility specified by the program manager. Title to such Program Part(s)
        or Miscellaneous Hardware will remain at all times with Company. Risk of
        loss or damage to such Program Part(s) or Miscellaneous Hardware will
        transfer to Contractor upon its arrival free on board the carrier (FOB)
        at the repair or manufacturing facility and will transfer back to Buyer
        when said Shop Repaired Program Part or Miscellaneous Hardware or
        component thereof is Delivered by Contractor pursuant to Section 2.1.

    22.3. No Liens. To the extent payments have been made as required under this
        Agreement, Contractor warrants good title to New Program Parts and
        Miscellaneous Hardware furnished hereunder and shall not permit or
        suffer to exist any lien or other encumbrance of any person claiming by,
        through or under Contractor, its subcontractors, vendors or an Affiliate
        thereof upon the New Program Parts, Miscellaneous Hardware or other
        property of Company. If any such lien or encumbrance is imposed,
        Contractor shall respond to such lien or encumbrance in accordance with
        Section 11.5 hereof.

23. Safety, Fire and Security.

    23.1. All Contractor's personnel while on the Company's premises shall
        adhere to the safety, fire, and security rules and procedures issued by
        Company and which are applicable to activities at the Work site. Any
        violation of these rules by the Contractor's personnel and/or the
        Contractor or its subcontractors may result in the immediate
        cancellation of the Agreement with respect to the applicable Facility
        and/or other action as deemed necessary by Company. Specific
        requirements and/or safety procedures may be stipulated in these
        documents when unusual safety precautions are necessary.

    23.2. It shall be the Contractor's responsibility to acquire a full and
        complete understanding of Company's Safety, Fire and Security
        Regulations for each

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

        Facility. Prior to starting the Work at a Facility, the Contractor and
        its designated representative, if any, shall obtain an explanation of
        the applicable regulations from the Company.

    23.3. Contractor shall hold a weekly tool box safety meeting, which shall
        include each and every one of its employees performing Work with respect
        to each Facility. The Contractor shall document such meeting with a
        brief description of topics discussed and a sign off sheet, which shall
        be signed by all attendees. This documentation shall be submitted to
        Company no later than the day following the meeting.

    23.4. Contractor or its employees or subcontractors who may operate any
        vehicle within the Company premises must be in possession of valid
        driver's licenses applicable to the type of vehicle being operated.

    23.5. Contractor shall inform Company of any potential safety hazards
        observed while performing the Work and shall notify Company promptly of
        any damage to equipment and all circumstances of any unusual nature that
        involve Company and that are related to the Work being performed in
        accordance with the Agreement.

    23.6. Contractor shall make immediate telephone notification to Company and
        shall submit to Company, within forty-eight (48) hours of occurrence, a
        written report on all accidents, including near-misses, in which
        Contractor's employees and/or equipment are involved.

    23.7. Company shall inform Contractor of known hazardous materials in
        Company's workplace to which Contractor's employees may be exposed while
        performing their jobs and any suggested appropriate protective measures.

    23.8. Contractor shall assure, above and beyond Company's responsibility
        regarding hazardous materials notification noted above, that
        Contractor's employees are kept informed of such notification given by
        Company.

24. Controlled Substances. The possession, use, manufacture, distribution, or
    transfer of any illegal drag or controlled substance is prohibited on
    Company premises and at any of the Facilities. Any employees, agents, or
    subcontractors of Contractor who violate this prohibition or who are at work
    at Company's premises under the influence of controlled substances are
    subject to immediate removal from Company's premises and such removal shall
    not constitute any cause for claim or damages.

25. Publicity Releases and Photographs. Contractor shall obtain Company approval
    prior to making publicity releases or announcements regarding Work or
    Contractor's dealings with Company.

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

26. Governing Law. The Agreement shall be governed by and interpreted in
    accordance with the laws of the State of California.

27. Communications Equipment. Operation of portable and other mobile
    communication equipment may not be permitted at certain Facilities,
    Contractor shall obtain prior written approval from Company before using
    portable and other mobile communication equipment at any Facility.

28. Severability; Failure to Act Not a Waiver.

    28.1. In the event any section or any part or portion of any section of this
        Agreement shall be held to be invalid, void or otherwise unenforceable,
        such holding shall not affect the remaining part or portions of that
        section, or any other section hereof.

    28.2. Company's failure to insist on performance of any term or condition or
        instruction, or to exercise any right or privilege included in this
        Agreement, shall not constitute a waiver of same and shall not
        thereafter waive any such term or condition or instruction and/or any
        right or privilege. Company's waiver of any breach of any term of this
        Agreement shall not constitute a waiver of any subsequent breach or
        breaches of such term or impair Company's right to avail itself of
        remedies under this Agreement or at law or equity.

29. Limitation On Liability.

    29.1. No Consequential Damages. In no event, whether as a result of breach
        of contract, warranty, tort (including negligence), strict liability, or
        otherwise, shall Contractor or Company be liable for loss of profit or
        revenues, loss of use of New Program Parts, Miscellaneous Hardware, Shop
        Repaired Program Parts and any associated equipment, cost of capital,
        cost of replacement power, downtime costs, claims of such party's
        customers, or for any other special, consequential, incidental, indirect
        or exemplary damages.

    29.2. Extent of Waivers. The waivers and disclaimers of liability, releases
        from liability, and limitations on liability expressed in this Article
        29 shall survive termination or expiration of this Agreement, and shall
        apply, subject to the limitations and exclusions herein, whether in
        contract, equity, tort or otherwise, even in the event of the fault,
        negligence, strict liability, or breach of contract of the party
        released or whose liabilities are limited, and shall extend to the
        partners, principals, shareholders, members, directors, officers,
        employees and agents of such party and its Affiliates.

    29.3. Limit of Liability. Notwithstanding any provision to the contrary,
        except for damages resulting from Contractor's willful misconduct,
        Contractor's overall liability under this Agreement with respect to each
        Facility, whether in contract,

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

        in tort (including negligence and strict liability) or otherwise, shall
        be limited to 50% of the Contract Price paid with respect to such
        Facility in the Calendar Year in which such claim or obligation arose,
        but excluding from such limitation any liability covered by insurance
        proceeds paid under the policies described in Section 10 of this Part C.

30. Dispute Resolution. In the event a dispute arises between Contractor and
    Company regarding the application or interpretation of any provision of this
    Agreement, the aggrieved party shall promptly notify the other party to this
    Agreement of the dispute within thirty (30) days after such dispute arises.
    If the parties shall have failed to resolve the dispute within sixty (60)
    days after receipt of such notice, each party shall appoint a representative
    who shall have full authority to negotiate a settlement. Should such
    representatives be unable to resolve the dispute to then mutual
    satisfaction after a good faith effort at resolution, either party may bring
    suit in the United States District Court in San Jose, California, or if such
    court does not have jurisdiction over such dispute or over any related
    dispute arising under any other Facility related agreement, in the
    California Superior Court in San Jose, California, which court shall have
    exclusive jurisdiction with respect to all disputes arising out of or
    relating to this Agreement. Pending the resolution of any dispute, protest
    or claim under this Section 30, Contractor shall proceed with the
    performance of its obligations under this Agreement, including the
    performance of any Change Order giving rise to a dispute.

31. Assignment and Delegation.

    31.1. Contractor may not assign, sell, transfer or otherwise dispose of its
        rights or obligations under this Agreement, nor (subject to Contractor's
        subcontracting rights) may Contractor delegate its duties under this
        Agreement, without the prior written consent of Company, which consent
        shall not be unreasonably withheld; provided, however, Contractor shall
        have the right to assign this Agreement to an Affiliate of Contractor
        that is directly or indirectly wholly-owned by the same company as
        Contractor and that succeeds to Contractor's business.

    31.2. Any unauthorized assignment or delegation shall be void and
        unenforceable.

    31.3. Company shall have the right to assign this Agreement to one or more
        Lender(s) without the consent of Contractor, and to any other
        financially qualified party, except parties who are in direct
        competition with Contractor for similarly based product lines, with
        Contractor's prior written consent, which consent shall not be
        unreasonably withheld. In connection with any assignment by Company to
        Lender, Contractor shall execute a consent to assignment and such other
        documents as Lender may reasonably request.

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

    31.4. Company also shall have the right at any time, without consent of
        Contractor, to assign its rights and obligations under this Agreement to
        an Affiliate of Company that succeeds to Company's business. Upon such
        assignment and assumption in writing of Company's rights and obligations
        hereunder by such Affiliate, Company shall have no further liability or
        obligation under this Agreement, and all references to "Company"
        hereunder shall be deemed to include such Affiliate.

    31.5. Subject to the foregoing, this Agreement and terms and conditions
        hereof shall inure to the benefit of and be binding upon the respective
        legal representatives, successors and assigns of Company and the
        Contractor.

32. Representations. Each Party represents to each other Party that: (a) such
    Party has the full power and authority to execute, deliver and perform this
    Agreement and to carry out the transactions contemplated hereby; (b) the
    execution and delivery of this Agreement by such Party and the carrying out
    by such Party of the transactions contemplated hereby have been duly
    authorized by all requisite corporate, limited liability company or
    partnership action, and this Agreement has been duly executed and delivered
    by such Party and constitutes the legal, valid and binding obligation of
    such Party, enforceable against it in accordance with the terms hereof,
    subject, as to enforceability of remedies, to limitations imposed by
    bankruptcy, insolvency, reorganization, moratorium or other similar Laws
    relating to or affecting the enforcement of creditors' rights generally and
    to general principles of equity; (c) no authorization, consent, approval or
    order of, notice to or registration, qualification, declaration or filing
    with, any governmental authority, is required for the execution, delivery
    and performance by such Party of this Agreement or the carrying out by such
    Party of the transactions contemplated hereby; and (d) none of the
    execution, delivery and performance by such Party of this Agreement, the
    compliance with the terms and provisions hereof, and the carrying out of the
    transactions contemplated hereby, conflicts with or results in a breach or
    violation of (i) any applicable provisions of Law as in effect on the date
    hereof, (ii) such Party's charter documents, by-laws or partnership
    agreement as in effect on the date hereof, (iii) any order, writ, injunction
    judgment or decree of any court or governmental authority applicable to such
    party, or (iv) any loan agreement, indenture, mortgage, bond, note or
    material contract, agreement or instrument to which such Party is a party or
    by which it is bound.

33. Amendments. No change, amendment or modification of this Agreement shall be
    valid or binding upon the parties hereto unless such change, amendment or
    modification shall be in writing and duly executed by all affected Parties
    hereto.

34. Counterparts. This Agreement may be signed in any number of counterparts and
    each counterpart shall represent a fully executed original as if signed by
    all parties.

<PAGE>

                                     PART C
                          GENERAL TERMS AND CONDITIONS

35. Consents and Approvals. Any provision of this Agreement that requires the
    consent or approval of Company shall only require the consent or approval of
    the owner of the Facility in question.

                                   END PART C
                          GENERAL TERMS AND CONDITIONS

<PAGE>

                                     PART D
                                   DEFINITIONS

        "Additional Work" means Work authorized in writing by Company which may
extend the scope of a Work Order beyond that originally intended or planned;
such Work may involve additional engineering, drawings, specifications,
materials, and/or labor in conjunction with the original project.

      "Affiliate" means, when used with reference to a specified corporation,
partnership or limited liability company, any other entity that directly, or
indirectly through one or more intermediaries, controls or is controlled by or
is under common control with the partnership, corporation or limited liability
company specified. For purposes of the foregoing, "control" and "under common
control with" with respect to any entity shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such entity, whether through the ownership of voting securities,
partnership interests or by contract or otherwise.

      "Agreement" means this Master Maintenance Services Agreement.

      "Base Contract" means the portion of this Agreement signed by Contractor
and Company to which Parts A through D and Exhibits One through Five are
attached.

      "Calculation Date" has the meaning set forth in Section 2.2 of the Base
Contract.

      "Calendar Year" means from January 1st, 0001 to December 31st, 2400.

      "CGC" means Calpine Generating Company, LLC, a Delaware limited liability
company.

      "Change" has the meaning set forth in Section 2.1 of Part C.

      "Change Order" has the meaning set forth in Section 2.2 of Part C.

      "Combustion Turbine" means each of the combustion turbines for a
particular Facility identified on Exhibit Five.

      "Company" means CGC and/or one or more Facility Owners, as specified or as
the context requires.

      "Company's Indemnitees" means, collectively, the Company, the Lenders, and
Affiliates of each of the foregoing (other than Contractor), along with each of
their respective officers, directors, partners, members, agents, employees,
successors and assigns.

<PAGE>

                                     PART D
                                   DEFINITIONS

      "Contractor" means Calpine Operating Services Company, Inc.

      "Contract Price" has the meaning set forth in Section 2.1 of Part B.

      "Contractor"s Indemnitees" means Contractor, its Affiliates (other than
the Company), along with its officers, directors, partners, members, agents,
employees, successors and assigns.

      "CPI" means the Consumer Price Index for All Urban Consumers (CPIU), U.S.
City Average, seasonally adjusted, as published by the United States Department
of Labor, or, if such index is no longer published or the method of computation
thereof has been modified to yield a materially different result, a substitute
index acceptable to Company and Contractor.

      "Delayed Payment Rate" means a rate of Interest per annum equal to the
"prime rate," as published from time to time in the Wall Street Journal plus 2%,
or the maximum rate permitted by applicable Law, whichever is less.

      "Equivalent Hours" means" equivalent hours" or "equivalent base load
hours" as calculated under Siemens service bulletin 36803 with respect to
Siemens-supplied equipment and the same terms as calculated under General
Electric Operating and Maintenance Consideration GER3620F.

      "Equivalent Starts" means "equivalent starts" under Siemens service
bulletin 36803 with respect to Siemens-supplied equipment and the same term as
calculated under General Electric Operating and Maintenance Consideration
GER3620F.

      "Escalation Quotient" means, for any Calendar Year during the Term, the
quotient of the CPI as of January 1 of such Calendar Year divided by the CPI as
of January 1 of the Calendar Year in which this Agreement became effective for
the Facility in question.

      "Excess Cash Flow" has the meaning given to such term in those certain
First Priority Indenture, Second Priority Indenture and Third Priority
Indenture, each dated as of March 23, 2004, by and among CGC, CalGen Finance
Corp., certain subsidiaries of CGC and Wilmington Trust FSB with respect to
certain fixed and floating rate notes issued by CGC and CalGen Finance Corp., in
each case as specified therein as of the date hereof.

      "Facility" has the meaning set forth in Section 1.1 of the Base Contract.

      "Facility Owner" has the meaning set forth in the preamble to this
Agreement.

      "Facility Site" means, as to any Facility, the Facility Site identified on
Exhibit Five.

<PAGE>

                                     PART D
                                   DEFINITIONS

      "GE" means General Electric Company.

      "Indemnitee" has the meaning set forth in Section 11.6 of Part C.

      "Indemnitor" has the meaning set forth in Section 11.6 of Part C.

      "Laws" means all applicable laws, statutes, rules, regulations, orders and
ordinances or specified standards or objective criteria contained in any
applicable license, permit or approval, or other legislative or administrative
act, of the United States of America or any state, agency, department,
authority, political subdivision or other instrumentality thereof, or a decree,
judgment or order of a court, including but not limited to those governing
wages, hours, employment discrimination and safety, laws regarding workers'
compensation, disability laws and employee benefit laws except, for those
relating to air and sound emissions of the applicable Facility, the Combustion
Turbines, or any component thereof.

      "Lender" means the lender or other persons, including a trustee on behalf
of bondholders or noteholders providing financing or other credit support, or
any replacement therefor or successor thereto.

      "Master Operation and Maintenance Agreement" means that certain Master
Operation and Maintenance Agreement dated March 23,2004 by and between Company
and COSCI.

      "Miscellaneous Hardware" means miscellaneous hardware items such as pins,
springs, studs, gaskets, tie wires, fasteners, screws, washers, nuts, and bolts
required to secure, align, fasten and seal as part of rolling out and rolling in
the Program Parts during a Scheduled Outage, which are supplied by Contractor
under this Agreement.

      "New Program Parts" means the Program Part(s) that are listed in Exhibit
Three, which are supplied by Contractor under this Agreement, when they are new
and unused.

      "New Program Part(s) and Miscellaneous Hardware Warranty" has the meaning
set forth in Section 2.1 of Exhibit Four.

      "Normal Wear and Tear" means the wear and tear incurred by the Program
Parts as a result of the operation and maintenance of the Facility by the
Company in accordance with the Section 5 of Exhibit Four, Warranty Conditions,
and expressly excludes any downstream/consequential damage to the Program Parts
caused by the failure of some other Program Part, item, piece, part or
equipment.

      "Normal Carriage" means carriage by either highway transport (provided
this does not necessitate use of specialized riggers trailers) or by rail
transport on normal routing from the manufacturing/repair facility to the
Facility Site.

<PAGE>

                                     PART D
                                   DEFINITIONS

      "Other Outage" means any outage other than a Scheduled Outage or an
Unscheduled Outage.

      "Overtime" means time worked beyond Contractor's regularly scheduled work
hours.

      "Party" means CGC, each Facility Owner, Contractor and any other person or
entity who becomes a party to this Agreement.

      "Plant Representative" for a Facility means the person designated as such
by Company with respect to such Facility. The Plant Representative may be the
plant manager for a Facility.

      "Program Manager" for a Facility means the person designated as such with
respect to such Facility.

      "Program Part(s)" means the number and type of part(s) for each Combustion
Turbine that are listed in Exhibit Three.

      "Scheduled Outage" means a planned outage coordinated in advance between
Contractor and Company with a mutually agreed upon start time and date to
perform the planned Scheduled Maintenance. A Scheduled Outage will commence when
the Combustion Turbine breaker is opened and will end when the Contractor has
released the Combustion Turbine for operation. If there is additional work, over
and above the planned Scheduled Maintenance, the Scheduled Outage will end when
the Contractor has completed the planned Scheduled Maintenance.

      "Secured Obligations" means the "Secured Obligations" as defined in that
certain Security Agreement dated as of March 23, 2004 by and between CGC, the
Facility Owners, as guarantors, and Wilmington Trust Company, as collateral
trustee.

      "Secured Parties" means the "Secured Parties" as defined in that certain
Security Agreement dated as of March 23, 2004 by and between CGC, the Facility
Owners, as guarantors, and Wilmington Trust Company, as collateral trustee.

      "Services" means all of the services to be provided by Contractor
hereunder, as described in Exhibit Two.

      "Services Warranty" has the meaning set forth in Section 3.1 of Exhibit
Four.

      "Siemens" means Siemens Westinghouse Power Corporation.

      "Six-Month Excess Cash Flow" has the meaning given in Section 2.2 of the
Base Contract.

<PAGE>

                                     PART D
                                   DEFINITIONS

      "Shop Repair" means shop repair/refurbishment work performed by Contractor
on Program Parts at Contractor's manufacturing/repair facility, the Company's
service facility or a suitable facility selected by Company.

      "Shop Repair Warranty" has the meaning set forth in Section 4.1 of Exhibit
Four.

      "Term" has the meaning set forth in Section 3.0 of the Base Contract.

      "Unscheduled Outage" means any outage other than a Scheduled Outage which
is caused by a Combustion Turbine being out of service due as a direct result of
(ii) New Program Parts and Miscellaneous Hardware supplied by Contractor under
this Agreement not conforming with the Warranty, (iii) New Program Parts
supplied by Contractor under this Agreement requiring early replacement, (iv)
Services provided by Contractor under this Agreement not conforming with the
Services Warranty, and (v) Shop Repairs provided by Contractor under this
Agreement not conforming with the Shop Repair Warranty.

      "Warranty" means each of the New Program Parts and Miscellaneous Hardware
Warranty, the Services Warranty and the Shop Repair Warranty.

      "Work" has the meaning given in the recitals to this Agreement.

      "Work Order" means a written directive and agreement entered into by
Company and Contractor pursuant to the Agreement that describes the Work to be
done by the Contractor for a given project or time and setting for the pricing
for such Work and such other matters as the Parties may agree.

<PAGE>

                                   EXHIBIT ONE
                                   WORK ORDER

                         MAINTENANCE SERVICES AGREEMENT

WORK ORDER

SELLER:                                 DATE:
CONTRACT NAME                           Maintenance Service Agreement Between
_____and________
CONTRACT NO: WO-AA-001
ATTENTION:                                                            COST CODE:

      Except as otherwise expressly provided herein, Contractor hereby agrees to
      perform the work described below in accordance with all of the terms and
      conditions of the Agreement referenced above. Contractor's invoices must
      show charges for this work separately, identified by both the Contract
      Work Order Number and Contract Number. The (increased/decreased) Pricing
      below will be by the full and complete compensation for complete
      performance of the work included under this Work Order.

<TABLE>
<CAPTION>
ITEM                    QTY.                 DESCRIPTION OF WORK                   PRICING
------                ------                --------------------                   --------
<S>                   <C>             <C>                                          <C>

1                     1 Lot
2                     1 Lot
3                     1 Lot
4                     1 Lot
5                     1 Lot

                                      Following the signature approvals as are     Total of this Work Order
                                      noted hereinbelow, no further claim for      NTE $ 0,000,000
                                      price and/or time will be allowed against
                                      this Work Order.
</TABLE>

Performance on this work must begin on_____and be completed no later than______.

- This Contract W. O. serves to release work for which payment has already been
made or arranged under the Agreement. No additional charges shall be applicable.

- This Contract W. O. serves to release work covered by a Warranty under the
Agreement. No additional charges shall be applicable.

- This Order provides for new or changed work to the Base Scope of Work of the
Agreement and is priced as shown above.

- This Work Order allows Contractor to perform Work under this Agreement until
such time as a determination can be made to classify the Work as Warranty Work
or a change to a Work Order: Pricing changes, if any, shall be as agreed upon by
Company and Contractor at a later date.

- This Work Order is not related to the Maintenance Service Contract

[CONTRACTOR]                        [COMPANY]

<PAGE>

BY: ____________________________               BY: _____________________________

Title: _________________________               Title: __________________________

Date: __________________________               Date: ___________________________

<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

1.0   SCOPE DOCUMENTS

      1.1   Scope Documents. This Services Description applies to each Facility
and consists of this service description itself and the following addenda which
are specifically made a part hereof by reference:

                ATTACHMENT 1  -   Work Scope of Scheduled Outages
                ATTACHMENT 2  -   Division of Responsibilities

2.0   CONTRACTOR'S OBLIGATIONS

      2.1   New Program Part(s) and Shop Repairs. Contractor shall provide the
New Program Part(s) and Shop Repairs as provided on Exhibit Three relating to
such Facility or as otherwise specified in a Work Order. Actual parts life and
the degree of Shop Repair or refurbishment associated with any Program Part(s)
shall be determined by Contractor.

      2.2   Scheduled Outages. Contractor shall provide the labor, supervision
and technical field assistance to complete its services specified in Attachment
1 hereto relating to such Facility, as specified in a Work Order. Contractor is
generally responsible for those responsibilities listed in Attachment 2 with an
"X" in the Contractor column, but such division is not intended to limit
Contractor's responsibilities hereunder. Such Services can be performed on a
2-12-7 crew-schedule (2-12 hour crew-shifts/day, 7 days/week).

      2.3   Combustion Turbine Maintenance Program Management. Contractor shall
provide the services of an experienced maintenance program engineer to manage
the Combustion Turbine maintenance program for each Facility throughout the Term
of this Agreement. Company shall have the right to approve Contractor's proposed
maintenance engineer, such approval to not be unreasonably withheld. The
maintenance engineer shall attend and participate in reviews at the Facility
Site at least three times per Period and track the status of all of the Program
Part(s).

      2.4   Miscellaneous Hardware. Contractor shall provide the Miscellaneous
Hardware as specified per a Work Order required to secure, align, fasten and
seal as part of rolling out and rolling in the Program Parts during the
applicable Scheduled Outage.

<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

      2.5   All Program Parts and Services. All New Program Parts, Miscellaneous
Hardware, Shop Repairs and Services provided hereunder will comply with
Contractor's standards which meet the intent of the applicable industry codes.

      2.6   Scheduled Outage Expendable Items. The Contractor will provide the
expendable items it uses during the Scheduled Outages such as rags, dyes and
penetrants.

      2.7   Hazardous Materials. The Contractor will provide the Company with
Material Safety Data Sheets, (MSDS) for all materials the Contractor will bring
on site 30 days prior to their arrival to site. If Company objects to any of the
proposed materials and a reasonable commercial alternative material is
available, both the Company and Contractor will agree on the acceptable
alternative.

      2.8   OEM Warranties. The Contractor will undertake its Work hereunder in
a manner that does not violate or invalidate any warranties benefitting Company
with respect to the Facility at which Contractor is performing such Work.

3.0   COMPANY'S OBLIGATIONS

      3.1   Storage. Company will store and maintain parts, tools provided by
the equipment manufacturer and bolting kits as provided by Contractor at each
Facility in accordance with Contractor's written instructions.

      3.2   Outage Schedule. Company will communicate to Contractor the
Scheduled Outage plan for each Facility, not less than once each Calendar Year,
and any subsequent revisions of that plan.

      3.3   Consumables. Company will provide for each Facility consumables that
it and Contractor uses during the Scheduled Outages of such Facility as such as
filters, lubricants, grease, and oils.

      3.4   Scheduled Outages. Company will provide indoor work space for the
outage manager, outage engineer and combustion turbine technicians.
Additionally, Company will provide the resources listed in Attachment 2 with an
"X" in the Company column.

      3.5   Hazardous Waste. Company will arrange for the disposal of hazardous
wastes generated at each Faculty Site during the Term.

4.0   JOINT OBLIGATIONS

      4.1   Scope of Work. Company and Contractor will jointly review the scope
of work for each Unscheduled Outage for each Facility and establish the work to
be performed by Contractor with respect to such Facility.

<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

      4.2   Deviations from Scope. Either party shall inform the other of any
unexpected findings or any deviations from the Work Order relating to a
Scheduled Outage, and Contractor and Company shall jointly modify the scope of
that Scheduled Outage accordingly.

<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

                                  ATTACHMENT 1

                         WORKSCOPES OF SCHEDULED OUTAGES

                              Combustor Inspection
INLET SECTION

DISASSEMBLY

      1     Remove access cover on inlet manifold.

INSPECTION

1    Visually inspect compressor inlet for damage and oil leaks.

2    Clean inlet scroll and IGV airfoils.

3    Visually inspect the inlet guide vanes and row # 1 compressor blades.

4    Measure the row #1 compressor blade radial clearances.

5    Measure thrust and running position of the compressor/turbine spindle.

 ASSEMBLY

      1     Install the inlet manifold access cover.

 COMPRESSOR COMBUSTOR TURBINE SECTION

 DISASSEMBLY

      1     Perform Lock out Tag out on fire suppression, steam, and gas piping
            into compartment.

      2     Remove roof panels as necessary.

      3     Remove the combustor access manway covers.

      4     Remove dilution air piping, fuel nozzles and other piping as
            necessary to gain access to components.

      5     Remove the combustor components.

 INSPECTION

      1     Visually inspect the combustor components for damage.

      2     Perform visual inspection of the rotor cooling air pipes in place.

      3     Perform visual inspection of the row #1 turbine vane segments and
            row #1 turbine blades in place.

      4     Dye Penetrant inspect "C" stage Rings.

 ASSEMBLY

      1     Install and align replacement transitions and document as installed
            clearances.

      2     Install replacement combustor baskets, crossflame tubes, and Top
            Hats.

      3     Install replacement fuel nozzles.

      4     Install fuel nozzle piping,

      5     Install manway doors

<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

      6     Install roof panels.

      7     Remove Lock Out/Tag Out

EXHAUST SECTION

INSPECTION                            -

      1     Perform visual inspection of the turbine exhaust including the strut
            shields.

      2     Visually inspect the row #4 turbine blades and measure the radial
            clearances.

<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

                             Hot Gas Path Inspection

Inlet Section

DISASSEMBLY

      1     Remove access cover on inlet manifold.

INSPECTION

      1     Visually inspect compressor inlet for damage and oil leaks.

      2     Clean inlet scroll and IGV airfoils.

      3     Visually inspect the inlet guide vanes and row #1 compressor blades.

      4     Verify IGV angles.

      5     Measure the row #1 compressor blade radial clearances.

      6     Measure thrust and running position of the compressor/turbine
            spindle.

ASSEMBLY

      1     Install the inlet manifold access cover.

COMPRESSOR COMBUSTOR TURBINE SECTION

DISASSEMBLY

            1.    Perform Lock Out/ Tag Out on fire suppression, gas,
                  electrical, and steam sources.

            2.    Remove combustor manways.

            3.    Remove cooling, gas, and steam piping as necessary to remove
                  combustion components and turbine cylinder.

            4.    Unbolt and remove fuel nozzles, top hats, baskets, and
                  transition pieces.

            5.    Unbolt and remove turbine cylinder.

            6.    Unbolt and remove the row 1, 2, 3, and 4 blades rings/
                  interstage seals.

            7.    Measure the turbine axial and radial clearances.

            8.    Remove the lower half row 1, 2, 3, and 4 blade rings.

            9.    Remove row 1, 2, and 3 turbine blades.

INSPECTION

      1     Visually inspect the combustor components for damage.

      2     Perform visual inspection of the rotor cooling air pipes in place.

      3     Visually inspect the turbine blade ring assemblies for damage.*

      4     Clean and visually inspect the turbine discs.

      5     Clean and visually inspect the turbine cylinder and piping.

      6     Visually inspect all blades, vanes, and ring segments for damage.

      7     Record removed serial numbered turbine components for location and
            serial number.

      8     Dye Penetrant "C" stage rings.

* THE REMOVED BLADE RING ASSEMBLIES TO BE REFURBISHED AFTER UNIT IS AVAILABLE
FOR SERVICE.

 ASSEMBLY

      1     Assemble blade rings with replacement ring segment, vanes, and
            interstage seals.

      2     Install replacement turbine blades rows 1, 2, & 3.

<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

      3     Install and align row 1, 2, 3, and 4 blade rings interstage seals

      4     Measure and record the axial and radial clearances during build.

      5     Install and bolt the turbine cylinder cover and associated piping.

      6     Install, align, and document clearances of replacement transitions.

      7     Install replacement combustor baskets, crossflame tubes, and top
            hats.

      8     Install replacement fuel nozzle

      9     Install all piping removed from the unit during the inspection.

      10    Install roof panel

      11    Remove Lock Out/ Tag Out.

EXHAUST SECTION

INSPECTION

      1     Perform visual inspection of the turbine exhaust including the strut
            shields.

<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

                              Major C.T. Inspection

INLET SECTION

DISASSEMBLY

      1     Perform Lock Out/ Tag Out on fire suppression, gas, steam, and
            electrical sources.

      2     Measure thrust bearing axial clearances before any cases are
            removed.

      3     Remove upper half inlet manifold and inlet casing.

      4     Measure the inlet end journal bearing clearances and remove the
            bearing.

      5     Measure air and oil seal clearances and remove seals.

INSPECTION

      1     Clean and visually inspect inlet manifold, inlet casing, and inlet
            guide vanes.

      2     Perform ultrasonic inspection of journal bearing babbitt.

      3     Perform ultrasonic inspection of thrust bearing babbitt.

      4     Perform visual and dimensional inspection of the oil and air seals.

 ASSEMBLY

      1     Install air and oil seals and measure clearances.

      2     Install journal bearing and measure clearances.

      3     Assemble thrust bearing and measure clearance.

      4     Install and bolt upper half inlet casing and inlet manifold.

 COMPRESSOR SECTION

 DISASSEMBLY

      1     Remove compressor bleed piping.

      2     Remove upper half compressor and compressor/combustor cover.

      3     Remove compressor blade rings.

      4     Measure compressor axial and radial clearances.

      5     Remove compressor diaphragms.

 INSPECTION

      1     Clean and visually inspect compressor cylinder.

 ASSEMBLY

      1     Install replacement compressor diaphragms.

      2     Install compressor blade rings.

      3     Measure compressor axial and radial clearances.

      4     Install and bolt compressor cylinder and compressor/combustor
            cylinder cover.

COMPRESSOR COMBUSTOR TURBINE SECTION

DISASSEMBLY

<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

      1     Remove combustor manways.

      2     Remove the combustor components.

      3     Remove dilution air piping, fuel nozzles, and other piping as
            necessary to gain access to components.

      4     Remove the turbine cylinder.

      5     Unbolt and remove the upper half rows 1, 2, 3, & 4 blade rings &
            interstage seals.

      6     Measure the turbine axial and radial clearances during disassembly.

      7     Remove the lower half rows 1, 2, 3, and 4 blade rings.

INSPECTION

      1     Visually inspect the combustor components for damage.

      2     Visually inspect compressor diaphragms for damage.

      3     Visually inspect the turbine blade ring assemblies for damage.*

      4     Clean and visually inspect the turbine discs.

      5     Clean and visually inspect the turbine cylinder and piping.

      6     NDT and visually inspect "C" stage rings.

 * THE REMOVED BLADE RING ASSEMBLIES TO BE REFURBISHED AFTER UNIT IS AVAILABLE
FOR SERVICE.

ASSEMBLY

      1     Install replacement lower half blade ring assemblies.

      2     Install lower half blade rings and measure the axial and radial
            clearances.

      3     Install and bolt the upper half interstage seals.

      4     Install and bolt the upper half blade rings rows 1, 2, 3, & 4.

      5     Align the blade rings to the rotor.

      6     Install and bolt the turbine cylinder cover and associated piping.

      7     Install and align replacement transitions and document measured
            clearances.

      8     Install replacement combustor baskets, crossflame tubes, and top
            hats.

      9     Install replacement fuel nozzles.

      10    Install manway covers.

INSTALL ALL PIPING REMOVED FROM THE UNIT DURING THE INSPECTION.

TORQUE TUBE SEAL HOUSING

DISASSEMBLY

      1     Remove rotor cooling air piping.

      2     Remove the upper half torque tube seal housing.

      3     Measure the torque tube seal clearances.

      4     Remove the torque tube seals.
<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

INSPECTION

      1     Clean and visually inspect the torque tube seals.

      2     Visually inspect the static seal segments.

      3     Clean and visually inspect the torque tube seal housing.

      4     Visually inspect rotor cooling air piping.

ASSEMBLY

      1     Install the torque tube seals and measure clearances.

      2     Install and bolt the upper half torque tube seal housing.

      3     Install rotor cooling air piping.

EXHAUST SECTION

DISASSEMBLY

      1     Remove the exhaust cylinder cover.

      2     Measure the exhaust end journal bearing clearances and remove the
            bearing.

      3     Measure the air and oil seal clearances and remove the seals.

 INSPECTION

      1     Clean and visually inspect the exhaust cylinder including the struts
            and strut shields.

      2     Perform ultrasonic inspection of journal bearing babbitt.

      3     Perform visual and dimensional inspection of the oil and air seals.

 ASSEMBLY

      1     Install air and oil seals and measure clearances.

      2     Install the journal bearing and measure the clearances.

      3     Install and bolt the exhaust cylinder cover.

ROTOR

DISASSEMBLY

      1     Unbolt turbine/generator coupling and measure alignment.

      2     Rig and remove the rotor.

      3     Remove the turbine blades.

INSPECTION

      1     Clean and NDE the turbine discs.

      2     Clean and inspect the compressor blades in place per the applicable
            Service Bulletin.

      3     Clean and dimensionally inspect the bearing journals and thrust
            collar.

      4     Clean and inspect the coupling.

<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

ASSEMBLY

      1     Install replacement turbine blades rows 1, 2, 3, & 4.

      2     Rig and install rotor.

      3     Measure coupling alignment and bolt coupling.

      4     Inspect rotor per current Contractor's inspection criteria. This to
            include, but not limited to:

                  a     Minor blending of compressor blades (as necessary).

                  b.    Rotor run-outs (if required by Contractor or prudent
                        industry practice).

                  c.    Check bolt stretch (if required by Contractor or prudent
                        industry practice).

                  d.    Burnish and inspect journals where Bently/Nevada
                        Vibration Probes are located.

                  e.    Coat compressor with Sermatech DP-5380 or approved
                        equivalent if necessary (Note: Any additional critical
                        path outage days resulting from performing this coating
                        related work shall not be considered downtime for the
                        purposes of Contractor's downtime guarantee.)

HYDROGEN COOLED CT GENERATOR INSPECTION

DISASSEMBLY

      1     Purge generator (assist customer).

      2     Remove lagging.

      3     Remove exciter and starting package.

      4     Remove generator outer oil seals.

      5     Remove top half of generator bearing brackets.

      6     Remove gland seal brackets.

      7     Remove blower blades and shroud.

      8     Remove generator bearings.

      9     Lower bottom half of bearing bracket (exciter end).

     10     Remove generator rotor.

 INSPECTION

      1     Inspect generator rotor and stator (visual and electrical tests by
            GS).

      2     Inspect generator bearings (ultra sound).

      3     Visual and dimensional inspection of seals.

      4     Inspect exciter (visual and electrical tests by GS).

      5     Visually inspect coolers.

 ASSEMBLY

      1     Install generator rotor.

      2     Install lower half generator bearing bracket (exciter end).

      3     Install generator bearings.

      4     Install blower blades and shroud.

      5     Install gland seal brackets.

      6     Install top halves generator bearing brackets.

<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

      7     Install generator outer oil seals.

      8     Install exciter and starting package.

      9     Perform alignment checks.

      10    Perform maintenance oil flush/circulation.

      11    Perform air test.

      12    Purge generator (assist customer).

      13    Install lagging.
<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

                                  ATTACHMENT 2

                          DIVISION OF RESPONSIBILITIES

The following listing specifies key resources necessary to performance of the
proposed scope of work and assigns responsibility for their supply, either to
Contractor or Company.

<TABLE>
<CAPTION>
                                                                                       Contractor      Company
                                                                                       ----------      -------
<S>                                                                                    <C>             <C>
Review the scope of work, scheduling, and planning with Owners                              X             X
representative.

Provide Field Engineers and Specialists as required by the scope of work.                   X

Provide qualified labor and perform the work with good safety and                           X
housekeeping practices.

Provide tools for workforce including transportation.                                       X

Expendable materials.                                                                       X

Clerical support/administrative support.                                                    X

Final field report.                                                                         X

Electrical power including: (120/480 VAC single phase and 480 VAC three phase up                          X
to 100 amps), service water, oxygen, acetylene gas, and lubricants as necessary.

Dustblast equipment, material and services (as required).                                   X

NDE equipment, material and services (as required).                                         X

Additional compressed air.                                                                  X

Removal and replacement of insulation.                                                                    X

Additional change trailers, additional chemical toilets.                                    X

Telephone service, potable water.                                                                         X

Cribbing for disassembled parts/scaffolding.                                                X

Cable slings, lifting devices and associated special tooling supplied                                     X
</TABLE>

<PAGE>

                                   EXHIBIT TWO
                              SERVICES DESCRIPTION

with the original equipment order.

<TABLE>
<CAPTION>
                                                                                       Contractor      Company
                                                                                       ----------      -------
<S>                                                                                    <C>             <C>
Operated crane (as required.)                                                               X

Electrician for disconnections and connections.                                             X

Trash containers and disposal service.                                                      X

Fire protection equipment/first aid facilities                                              X

All asbestos removal and disposal                                                           X

Disposal of Hazardous Waste                                                                 X

Forklifts                                                                                                 X

I&C Technicians                                                                                           X

Painting                                                                                                  X
</TABLE>

<PAGE>

                                 EXHIBIT THREE
                         PART _ PRICING (____ FACILITY)

                                  EXHIBIT THREE
                                PRICING SCHEDULE
                        PART_(_________________ FACILITY)

     501F

UNIT PRICES

<TABLE>
<CAPTION>
                      REPAIR INTERVALS
       REPAIRS         HOURS  STARTS
       -------         -----  ------
<S>                   <C>    <C>       <C>
Baskets                 8000    400    $
Nozzles                 8000    800    $
Transitions             8000    400    $
Transition Seals        8000    400    $
Blade 1                24000    800    $
Blade 2                24000    800    $
Blade 3                24000    800    $
Blade 4                48000   1600    $
Vane 1                 24000    800    $
Vane 2                 24000    800    $
Vane 3                 24000    800    $
Vane 4                 24000    800    $
Compressor Blades      48000   1600    $
Compressor Diaphragms  48000   1600    $
Ring 1                 24000    800    $
Ring 2                 24000    800    $
Ring 3                 48000   1600    $
Ring 4                 48000   1600    $
</TABLE>

<PAGE>

                                 EXHIBIT THREE
                                     PRICING
                           PART _(__________FACILITY)

<TABLE>
<CAPTION>
                      PURCHASE INTERVALS
      PURCHASE          HOURS   STARTS
      --------          -----   ------
<S>                   <C>      <C>       <C>
Baskets                48000     1600    $
Nozzles                96000     3200    $
Transitions            32000     1200    $
Transition Seals       24000      800    S
Blade 1                48000     1600    $
Blade 2                72000     2400    S
Blade 3                72000     2400    $
Blade 4                96000     3200    $
Vane 1                 48000     2400    $
Vane 2                 72000     1600    $
Vane 3                 96000     1600    $
Vane 4                 96000     3200    $
Compressor Blades      96000     3200    $
Compressor Diaphragms  96000     3200    $
Ring l                 48000     1600    $
Ring 2                 48000     1600    $
Ring 3                 72000     2400    $
Ring 4                 96000     3200    $
</TABLE>

<TABLE>
<CAPTION>
OUTAGE LABOR
------------
<S>                                              <C>
Combustor                                        $
Hot Gas Path                                     $
Major                                            $
</TABLE>

<TABLE>
<CAPTION>
MISC HARDWARE
-------------
<S>                                             <C>
Combustor                                       $
Hot Gas Path                                    $
Major                                           $
</TABLE>

<TABLE>
<CAPTION>
TECHNICAL FIELD ADVISOR
-----------------------
<S>                                             <C>
Combustor                                       $
Hot Gas Path                                    $
Major                                           $
</TABLE>

<TABLE>
<CAPTION>
INITIAL MISC HARDWARE
---------------------
<S>                                              <C>
                                                 $
</TABLE>

<TABLE>
<CAPTION>
PROGRAM MANAGEMENT FEE (PROGRAM ENGINEER)
-----------------------------------------
<S>                                              <C>
                                                 $
</TABLE>

<PAGE>
                                       EXHIBIT THREE
                                     PRICING
                           PART __ (_________FACILITY)

COST PLUS

     1.   Labor Related Costs and Profits

               a.   All third party labor related costs and profits shall be
                    reimbursed at actual cost plus a mark-up, for all overhead
                    expense of Contractor thereon, of [___]%. All labor costs
                    for Contractor's own personnel shall be billed at
                    Contractor's standard billing rates therefor.

     2.   Material Costs and Mark-Up

               a.   All material pricing shall be per the Unit Price Exhibit. In
                    the event an item is not covered in the Unit Price Exhibit
                    them the actual costs to Contractor for materials supplied
                    by Contractor for incorporation into the permanent facility
                    (excluding consumables, expendables) shall be at actual
                    invoiced cost to Contractor (exclusive of taxes) delivered
                    to jobsite, plus a mark-up, for all overhead expense of
                    Contractor thereon, of [__]%.

     3.   Equipment Costs

               a.   All costs to Contractor for Contractor-Owned equipment and
                    all profit and overhead expense of Contractor thereon, shall
                    be agreed to at a later date and attached and incorporated
                    herein.

               b.   All costs of Contractor for equipment rented from third
                    parties shall be approved by Company's Plant Manager prior
                    to rental and shall be at actual invoiced cost to Contractor
                    plus a mark-up, for all overhead expense of Contractor
                    thereon, of [_____]%

     4.   Subcontracts

               a.   All subcontracts for performance of the Work for which
                    Company has non-objected to price and terms by Company in
                    advance shall be at actual cost to Contractor for such
                    subcontracts plus a mark-up, for all overhead expense of
                    Contractor thereon of [_____]%

<PAGE>

                                  EXHIBIT THREE
                                PRICING SCHEDULE
                             PART 1 (ZION FACILITY)

        7FA

UNIT PRICES

<TABLE>
<CAPTION>
                  REPAIR INTERVALS
   REPAIRS         HOURS  STARTS
   -------         -----  ------
<S>               <C>    <C>       <C>
FUEL NOZZLE ASMBY 12000    450     $   46,000
COMBUSTION LINERS 12000    450     $  178,000
TRANSITION PIECES 12000    450     $  210,000
FUEL NOZZLE TIPS  12000    450     $   92,000
BUCKETS: STAGE 1  24000    900     $1,192,000
BUCKETS: STAGE 2  24000    900     $  409,000
BUCKETS: STAGE 3  24000    900     $  389,000
NOZZLES: STAGE 1  24000    900     $  375,000
NOZZLES: STAGE 2  24000    900     $  307,000
NOZZLES: STAGE 3  24000    900     $  137,000
SHROUDS: STAGE 1  24000    900     $  313,000
SHROUDS: STAGE 2  24000    900     $   75,000
SHROUDS: STAGE 3  24000    900     $   98,000
</TABLE>

<PAGE>

                                 EXHIBIT THREE
                                    PRICING
                             PART 1 (ZION FACILITY)

<TABLE>
<CAPTION>
                  PURCHASE INTERVALS
   PURCHASE         HOURS   STARTS
   --------         -----   ------
<S>               <C>      <C>       <C>
FUEL NOZZLE ASMBY   36000     2250   $  474,000
COMBUSTION LINERS   24000     2250   $1,287,000
TRANSITION PIECES   36000     2250   $1,405,000
FUEL NOZZLE TIPS    36000     1350   $  840,000
BUCKETS: STAGE 1    48000     1800   $3,534,000
BUCKETS: STAGE 2    24000     1800   $2,174,000
BUCKETS: STAGE 3    72000     2700   $2,475,000
NOZZLES: STAGE 1    48000     1800   $1,762,000
NOZZLES: STAGE 2    48000     1800   $1,694,000
NOZZLES: STAGE 3    72000     2700   $1,610,000
SHROUDS: STAGE 1    48000     1800   $  793,000
SHROUDS: STAGE 2    48000     1800   $  537,000
SHROUDS: STAGE 3    72000     2700   $  457,000
</TABLE>

<TABLE>
<CAPTION>
OUTAGE LABOR
------------
<S>                                                 <C>
Combustor                                           $170,000
Hot Gas Path                                        $362,000
Major                                               $742,000
</TABLE>

<TABLE>
<CAPTION>
MISC HARDWARE
-------------
<S>                                                  <C>
Combustor                                            $ 47,000
Hot Gas Path                                         $113,000
Major                                                $179,000
</TABLE>

<TABLE>
<CAPTION>
TECHNICAL FIELD ADVISOR
-----------------------
<S>                                                  <C>
Combustor                                            $16,000
Hot Gas Path                                         $30,000
Major                                                $49,000
</TABLE>

<TABLE>
<CAPTION>
INITIAL MISC HARDWARE
---------------------
<S>                                                  <C>
                                                     $47,000
</TABLE>

<TABLE>
<CAPTION>
PROGRAM MANAGEMENT FEE (PROGRAM ENGINEER)
-----------------------------------------
<S>                                                  <C>
                                                     $62,000
</TABLE>
<PAGE>
                                  EXHIBIT THREE
                                     PRICING
                             PART 1 (ZION FACILITY)

COST PLUS

   1. Labor Related Costs and Profits

         a. All third party labor related costs and profits shall be reimbursed
            at actual payroll cost plus a mark-up, for all overhead expense of
            Contractor thereon, of 15%. All labor costs for Contractor's own
            personnel shall be billed at Contractor's standard billing rates
            therefor.

   2. Material Costs and Mark-Up

         a. All material pricing shall be per the Unit Price Exhibit. In the
            event an item is not covered in the Unit Price Exhibit them the
            actual costs to Contractor for materials supplied by Contractor for
            incorporation into the permanent facility (excluding consumables,
            expendables) shall be at actual invoiced cost to Contractor
            (exclusive of taxes) delivered to jobsite, plus a mark-up, for all
            overhead expense of Contractor thereon, of 15%.

   3. Equipment Costs

         a. All costs to Contractor for Contractor-Owned equipment and all
            profit and overhead expense of Contractor thereon, shall be agreed
            to at a later date and attached and incorporated herein.

         b. All costs of Contractor for equipment rented from third parties
            shall be approved by Company's Plant Manager prior to rental and
            shall be at actual invoiced cost to Contractor plus a mark-up, for
            all overhead expense of Contractor thereon, of 15%

   4. Subcontracts

         a. All subcontracts for performance of the Work for which Company has
            non-objected to price and terms by Company in advance shall be at
            actual cost to Contractor for such subcontracts plus a mark-up, for
            all overhead expense of Contractor thereon of 15%

<PAGE>

                                  EXHIBIT FOUR
                                    WARRANTY

1     The Warranties as set forth in this Exhibit are applicable to the
      Contractor and to all Contractor vendors and subcontractors with respect
      to each Facility as to which this Agreement is effective. Contractor will
      require the vendors and subcontractors to warrant their products and
      services to the Company. Upon the expiration of Contractor's Warranties
      hereunder with respect to a Facility, Contractor will assign all
      warranties from subcontractors and vendors with respect to such Facility
      to Company.

2     New Program Parts and Miscellaneous Hardware Warranty and Exclusive
      Remedy.

         2.1 Contractor warrants that the New Program Parts and Miscellaneous
      Hardware provided to Company hereunder, including any New Program Part or
      Miscellaneous Hardware repaired or replaced by Contractor under this New
      Program Parts and Miscellaneous Hardware Warranty, will be new (except in
      the case of a repaired part) and free of defects in workmanship and
      materials until the earliest of

      (a) one (1) year from the date of installation of the original New Program
      Part or Miscellaneous Hardware into the Combustion Turbine,

      (b) 8,000 Equivalent Hours after installation of the original New Program
      Part or Miscellaneous Hardware,

      (c) 400 Equivalent Starts after installation of the original New Program
      Part or Miscellaneous Hardware, or

      (d) four (4) years from the date of delivery of the original New Program
      Part or Miscellaneous Hardware; except that the warranties on all New
      Program Parts and Miscellaneous Hardware shall expire no later than one
      year after the conclusion of the Term of the Agreement (this Section 2.1
      is referred to as the "New Program Parts and Miscellaneous Hardware
      Warranty").

<PAGE>

                                  EXHIBIT FOUR
                                    WARRANTY

         2.2 If during the New Program Parts and Miscellaneous Hardware Warranty
      period, Contractor is promptly notified in writing that a New Program Part
      or Miscellaneous Hardware fails to conform to the New Program Parts and
      Miscellaneous Hardware Warranty, Contractor will at its expense and as
      Company's exclusive remedy for the breach of the New Program Parts and
      Miscellaneous Hardware Warranty, correct such failure by, at Contractor's
      option, repair or replacement. Contractor's warranty is limited to the
      actual repair or replacement of the part. The cost of removing and
      replacing the part is to the Company's account.

3     Services Warranty and Exclusive Remedy.

         3.1 Contractor warrants for each item of Services provided hereunder
      that

      (a) the engineering services of its personnel will be competent and
      consistent with prudent engineering practices,

      (b) the technical information, reports, analyses and recommendations
      transmitted by Contractor in connection therewith will be competent and
      consistent with prudent engineering practices,

      (c) the Services will comply in all material respects with applicable Laws
      for a period of one (1) year from the date of completion of that item of
      Services, and

      (d) the Services will be free from defects in workmanship for a period of
      one (1) year from the date of completion of that item of Services (this
      Section 3.1 is referred to as the "Services Warranty").

         3.2 If during the Services Warranty period Contractor is promptly
      notified in writing that any portion of the Services fails to conform to
      the Services Warranty, Contractor will, at its expense and as Company's
      exclusive remedy for the breach of the Services Warranty, promptly
      reperform such nonconforming portion of the Services.

4     Shop Repair Warranty and Exclusive Remedy.

         4.1 Contractor warrants that the Shop Repair work performed by
      Contractor on Program Parts, including any materials supplied by
      Contractor in connection therewith, will be free of defects in workmanship
      and materials until the earliest of

      (a) one (1) year from the date of installation of the original Shop
      Repaired Program Part into the Combustion Turbine,

<PAGE>

                                  EXHIBIT FOUR
                                    WARRANTY

      (b) 400 Equivalent Starts after installation of the original Shop Repaired
      Program Part into the Combustion Turbine, or

      (c) four (4) years from the date of delivery of the original Shop Repaired
      Program Part; except that the warranties on all Shop Repaired Program
      Parts shall expire no later than one year after the conclusion of the Term
      of the Agreement (this Section 4.1 is referred to as the "Shop Repair
      Warranty").

         4.2 If during the Shop Repair Warranty period Contractor is promptly
      notified in writing that a Shop Repaired Program Part fails to conform to
      the Shop Repair Warranty, Contractor will, at its expense and as Company's
      exclusive remedy for the breach of the Shop Repair Warranty, correct such
      nonconformity by repair or replacement of the defective portion of the
      Shop Repaired Program Part.

5     Warranty Conditions. The warranties and remedies set forth in this Exhibit
      4 and the obligations and remedies set forth in Section 3.2 of Part A are
      conditioned upon:

      5.1   Company's receipt, handling, storage and maintenance during any
            storage, operation and maintenance, including tasks incident
            thereto, of the Program Parts, Miscellaneous Hardware, or the
            Equipment, shall be in all material respects in accordance with the
            terms of the Combustion Turbine instruction manuals and operating
            criteria provided to Company by the manufacturer prior to the
            commencement of the last performance test for such Combustion
            Turbine and in general accordance with independent power industry
            practices.

      5.2   The Combustion Turbines shall have been operated using pipeline
            quality natural gas with the composition consistent with the fuel
            and water specifications provided by the manufacturer of such
            Combustion Turbines.

      5.3   Any accidental damage to the Combustion Turbines shall be repaired
            consistent with Contractor's reasonable recommendations, and

      5.4   Company, without cost to Contractor:

         5.4.1    providing working access to the non-conforming New Program
                  Parts, Miscellaneous Hardware, Shop Repaired Program Parts or
                  Services including disassembly and reassembly of the
                  Combustion Turbine; provided that the Company shall not remove
                  the bolts from the Combustion Turbine Casing,

         5.4.2    providing reasonable access to plant and operating and
                  maintenance data, and

<PAGE>

                                  EXHIBIT FOUR
                                    WARRANTY

         5.4.3    making its Site facilities and Site operations personnel
                  available to assist Contractor in the performance of its
                  warranty obligations, to the extent they are reasonably
                  available, and

6     Exclusivity of Warranties and Remedies. EXCEPT AS OTHERWISE PROVIDED
      HEREIN, THE WARRANTIES SET FORTH IN THIS EXHIBIT FOUR ARE EXCLUSIVE AND
      ARE IN LIEU OF ALL OTHER WARRANTIES WHETHER STATUTORY, EXPRESS, OR IMPLIED
      (INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
      PURPOSE, AND ALL WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF
      TRADE). WITHOUT LIMITING THE FOREGOING, CONTRACTOR SPECIFICALLY DISCLAIMS
      ANY WARRANTY OF OPERATIONAL AVAILABILITY OF ANY FACILITY. Except for
      termination rights set forth in Section 12 of Part C of the Agreement and
      the rights to indemnification set forth in Section 11 of Part C, the
      remedies set forth in this Exhibit Four shall constitute Contractor's sole
      liability and Company's exclusive remedies for failure of Contractor to
      meet its warranty obligations hereunder whether claims of the Company are
      based in contract, in tort (including negligence and strict liability), or
      otherwise.

7     Performance of Warranty Work Subject to Section 29.1 of Part C, Contractor
      acknowledges that the failure of any of the Program Parts, Miscellaneous
      Hardware, or Shop Repaired Program Parts to operate and perform properly
      and in accordance with the warranties and specifications provided in this
      Agreement could result in disruption of the Facility and substantial
      revenue loss to Company. Unless otherwise specified, Contractor and
      Company agree to perform all warranty work hereunder as expeditiously as
      is reasonably possible and in a manner which minimizes Facility disruption
      and revenue loss. Contractor shall perform all warranty work, at a
      minimum, on a 2-12-7 crew-schedule (2-12 hour crew-shifts/day, 7
      days/week), Monday through Sunday, unless otherwise approved by Company.

8     Inspection.

   8.1   All New Program Parts, Miscellaneous Hardware and Shop Repairs
         furnished by Contractor and Services performed by Contractor shall be
         properly inspected by Contractor at its expense, and shall at all times
         also be subject to quality surveillance or quality audit and inspection
         by Company, who shall be afforded reasonable access to the shops,
         factories or other places of business of Contractor and its vendors and
         suppliers for such quality surveillance or audit and inspection, so
         long as such access is prearranged with Contractor and does not
         unreasonably interfere with the performance of work at such locations
         and is subject to Contractor's requirements at such locations with

<PAGE>

                                  EXHIBIT FOUR
                                    WARRANTY

         respect to health, safety, security and confidentiality. Contractor
         shall provide safe and adequate facilities, drawings, documents and
         samples as required, and shall provide assistance and cooperation to
         allow Company to perform such examination as may be necessary to
         determine compliance with the requirements of this Agreement.

   8.2   Notwithstanding the foregoing, Company is not obligated to make any
         such inspection or examination. No inspection or examination of all or
         any part of the New Program Parts, Miscellaneous Hardware, Shop Repairs
         or Services nor the failure to inspect or examine the same nor
         acceptance thereof nor the expression of any approval by Company nor
         payment therefor shall be deemed to relieve Contractor from any of its
         obligations under this Agreement, including among others, the
         obligation to provide New Program Parts, Miscellaneous Hardware, Shop
         Repairs and Services satisfying the warranties set forth herein.

<PAGE>

                                  EXHIBIT FIVE
                                  FACILITY DATA

BAYTOWN ENERGY CENTER FACILITY

      Address:        8605 FM 1405
                      Baytown, Texas 77520
                      (281)303-4200

      The Baytown facility is a nominal 742 MW natural gas-fired combined cycle
generating facility with an estimated peak capacity of 830 MW. The facility
consists of three Siemens combustion turbines and three Nooter Eriksen heat
recovery steam generators which supply steam to a single Toshiba steam turbine.
The facility supplies power and steam to Bayer Corporation.

CARVILLE ENERGY CENTER FACILITY

      Address:        4322 LA Highway 30
                      Saint Gabriel, Louisiana 70776
                      (225) 642-8993

      The Carville facility is a nominal 455 MW natural gas-fired combined cycle
generating facility with an approximate peak capacity of 531 MW. The facility
consists of two General Electric combustion turbines and two Alstom heat
recovery steam generators which supply steam to a single Alstom steam turbine.
The facility supplies steam to Cos-Mar Corporation.

 CHANNEL ENERGY CENTER FACILITY

      Address:        12000 Lawndale Street, LCR Gate 5
                      Pasadena,  Texas 77017
                      (713)456-1300

      The Channel facility is a nominal 527 MW natural gas-fired combined cycle
generating facility. The facility consists of two Siemens combustion turbines
and two Nooter Eriksen heat recovery steam generators which supply steam to a
single Toshiba steam turbine. The facility supplies power and steam to
Lyondell-CITGO Refining, L.P.

<PAGE>

                                  EXHIBIT FIVE
                                  FACILITY DATA

COLUMBIA ENERGY CENTER FACILITY

      Address:        100 Calpine Way
                      Gaston, South Carolina 29053
                      (803)739-4940

      The Columbia facility is a nominal 464 MW natural gas-fired combined cycle
generating facility with an approximate peak capacity of 641 MW. The facility
consists of two General Electric combustion turbines and two Nooter Eriksen heat
recovery steam generators which supply steam to a single Toshiba steam turbine.
The facility supplies steam to Eastman Chemical Company.

CORPUS CHRISTI ENERGY CENTER FACILITY

      Address:        3852  Buddy Lawrence Drive
                      Corpus Christi, Texas 78407
                      (361)696-7700

      The Corpus Christi facility is a nominal 414 MW natural gas-fired combined
cycle generating facility with an approximate peak capacity of 537 MW. The
facility consists of two General Electric combustion turbines and two Alstom
heat recovery steam generators which supply steam to a single Alstom steam
turbine. The facility supplies power and steam to CITGO Refining and Chemicals,
L.P., Elementis Chrominum, L.P. and Flint Hills Resources, L.P.

DECATUR ENERGY CENTER FACILITY

     Address:         2024 Highway 20 West
                      Decatur, Alabama 35601
                      (256) 301-6500

      The Decatur facility is a nominal 692 MW natural gas-fired combined cycle
generating facility with an approximate peak capacity of 838 MW. The facility
consists of three Siemens combustion turbines and three Nooter Eriksen heat
recovery steam generators which supply steam to a single Toshiba steam turbine.
The facility supplies steam to Solutia Inc.

DELTA ENERGY CENTER FACILITY

      Address:        1200 Darcy Lane
                      Pittsburg, California 94565
                      (925)756-0789

      The Delta facility is a nominal 799 MW natural gas-fired combined cycle
generating facility with an estimated peak capacity of 882 MW. The facility
consists of

<PAGE>

                                  EXHIBIT FIVE
                                  FACILITY DATA

three Siemens combustion turbines and three Deltak heat recovery steam
generators which supply steam to a single Toshiba steam turbine.

FREESTONE ENERGY CENTER FACILITY

      Address:        1366 FM 488
                      Fairfield, Texas 75840
                      (903)389-1400

      The Freestone facility is a nominal 1,022 MW natural gas-fired combined
cycle generating facility with an approximate peak capacity of 1,022 MW. The
facility consists of four General Electric combustion turbines and four Nooter
Eriksen heat recovery steam generators which supply steam to two General
Electric steam turbines.

GOLDENDALE ENERGY CENTER FACILITY

      Address:        600 Industrial Park Way
                      Goldendale, Washington 98620
                      (509)773-0380

      The Goldendale facility will be a nominal 237 MW natural gas-fired
combined cycle power generating facility with an estimated peak capacity of 271
MW. The facility will consist of a single General Electric combustion turbine
and a Hitachi heat recoversy steam generator which supplies steam to a single
Hitachi steam turbine.

LOS MEDANOS ENERGY CENTER FACILITY

      Address:        750 East Third Street
                      Pittsburg, California 94565
                      (925)473-2180

      The Los Medanos facility is a nominal 497 MW natural gas-fired combined
cycle generating facility with an estimated peak capacity of 566 MW. The
facility consists of two General Electric combustion turbines and two Nooter
Eriksen heat recovery steam generators which supply steam to a single General
Electric steam turbine. The facility supplies power and steam to USS-POSCO
Industries and may supply power to Dow Chemical Company.

MORGAN ENERGY CENTER FACILITY

      Address:        1410 Red Hat Road
                      Decatur, Alabama 35601
                      (256)308-3300

      The Morgan facility is a nominal 722 MW natural gas-fired combined cycle
generating facility with an approximate peak capacity of 852 MW. The facility
consists of three Siemens combustion turbines and three Nooter Eriksen heat
recovery steam

<PAGE>

                                  EXHIBIT FIVE
                                  FACILITY DATA

generators which supply steam to two Toshiba steam turbines. The facility
supplies steam to BP Amoco Chemical Company.

ONETA ENERGY CENTER FACILITY

      Address:        25142 East 105th Street South
                      Broken Arrow, Oklahoma 74014
                      (918)486-1800

      The Oneta facility is a nominal 994 MW natural gas-fired combined cycle
generating facility with an approximate peak capacity of 994 MW. The facility
consists of four General Electric combustion turbines and four Nooter Eriksen
heat recovery steam generators which supply steam to two Toshiba steam turbines.

PASTORIA ENERGY CENTER FACILITY

      Address:        39789 Edmonston Pumping Plant Road
                      Lebec, California 93243
                      (661) 654-8000

     The Pastoria facility will be a nominal 759 MW natural gas-fired combined
cycle generating facility with an estimated peak capacity of 769 MW. The
facility is being constructed in two phases. Phase 1 consists of a single
General Electric combustion turbine and a Nooter Eriksen heat recovery steam
generator which supplies a single General Electric steam turbine. Phase 2
consists of two General Electric combustion turbines and two Nooter Eriksen heat
recovery steam generators which supply a single General Electric steam turbine.

 ZION ENERGY CENTER FACILITY

      Address:        5701 Ninth Street
                      Zion, Illinois 60099
                      (847)731-6250

      The Zion facility is a nominal 513 MW simple cycle peaking facility with
an estimated peak capacity of 513 MW. The facility consists of three General
Electric combustion turbines The facility generally runs on natural gas, but is
capable of running on oil.

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