Document:

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                                                                  Exhibit 4.22.2
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                         PASS THROUGH TRUST AGREEMENT B

                          Dated as of October 18, 2001

                                    between

                        SOUTH POINT ENERGY CENTER, LLC,

                            BROAD RIVER ENERGY LLC,

                              ROCKGEN ENERGY LLC,

                                      and

    STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION,

                   not in its individual capacity, but solely
                            as Pass Through Trustee

        South Point, Broad River and RockGen Series B Pass Through Trust

                   9.825% Pass Through Certificates, Series B

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

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                                              TABLE OF CONTENTS

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SECTION 1.   DEFINITIONS.......... ..........................................................................    2

     Section 1.1   Definitions...............................................................................    2

     Section 1.2   Compliance Certificates and Opinions......................................................    9

     Section 1.3   Form of Documents Delivered to Pass Through Trustee.......................................   10

     Section 1.4   Acts of Holders...........................................................................   11

     Section 1.5   Conflict with Trust Indenture Act.........................................................   12

SECTION 2.   ACQUISITION OF LESSOR NOTES; ORIGINAL ISSUANCE OF CERTIFICATES..................................   12

     Section 2.1   Issuance of Certificates; Acquisition of Lessor Notes.....................................   12

     Section 2.2   Acceptance by Pass Through Trustee........................................................   14

     Section 2.3   Limitation of Powers......................................................................   14

SECTION 3.   THE CERTIFICATES................................................................................   15

     Section 3.1   Form, Denomination and Execution of Certificates..........................................   15

     Section 3.2   Authentication of Certificates............................................................   15

     Section 3.3   Temporary Certificates....................................................................   16

     Section 3.4   Registration of Transfer and Exchange of Certificates.....................................   16

     Section 3.5   Mutilated, Destroyed, Lost or Stolen Certificates.........................................   18

     Section 3.6   Persons Deemed Owners.....................................................................   18

     Section 3.7   Cancellation..............................................................................   18

     Section 3.8   Limitation of Liability for Payments......................................................   19

     Section 3.9   Book-Entry and Definitive Certificates....................................................   19

     Section 3.10   Form of Certification....................................................................   22

SECTION 4.   DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS.................................................   22

     Section 4.1   Certificate Account and Special Payments Account..........................................   22

     Section 4.2   Distributions from Certificate Account and Special Payments Account.......................   23

     Section 4.3   Statements to Certificateholders..........................................................   25

     Section 4.4   Investment of Special Payment Moneys......................................................   25

SECTION 5.   FINANCIAL STATEMENTS AND OTHER REPORTS..........................................................   26

SECTION 6.   DEFAULT.........................................................................................   26
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<S>                                                                                                             <C>
     Section 6.1   Events of Default.........................................................................   26

     Section 6.2   Incidents of Sale of Lessor Notes.........................................................   27

     Section 6.3   Judicial Proceedings Instituted by Pass Through Trustee...................................   28

     Section 6.4   Control by Certificateholders.............................................................   29

     Section 6.5   Waiver of Defaults........................................................................   29

     Section 6.6   Undertaking to Pay Court Costs............................................................   30

     Section 6.7   Right of Certificateholders to Receive Payments Not to Be Impaired........................   30

     Section 6.8   Certificateholders May Not Bring Suit Except Under Certain Conditions.....................   31

     Section 6.9   Remedies Cumulative.......................................................................   31

SECTION 7.   THE PASS THROUGH TRUSTEE........................................................................   31

     Section 7.1   Certain Duties and Responsibilities.......................................................   31

     Section 7.2   Notice of Defaults........................................................................   32

     Section 7.3   Certain Rights of Pass Through Trustee....................................................   33

     Section 7.4   Not Responsible for Recitals; Issuance of Certificates....................................   34

     Section 7.5   May Hold Certificates.....................................................................   34

     Section 7.6   Money Held in Pass Through Trust..........................................................   34

     Section 7.7   Compensation, Reimbursement and Indemnification...........................................   34

     Section 7.8   Corporate Trustee Required; Eligibility...................................................   35

     Section 7.9   Resignation and Removal: Appointment of Successor.........................................   35

     Section 7.10  Acceptance of Appointment by Successor....................................................   37

     Section 7.11  Merger, Conversion, Consolidation or Succession to Business...............................   37

     Section 7.12  Maintenance of Agencies...................................................................   38

     Section 7.13  Money for Certificate Payments to Be Held in Trust........................................   39

     Section 7.14  Registration of Lessor Notes in Pass Through Trustee's Name...............................   40

     Section 7.15  Withholding Taxes; Information Reporting..................................................   40

     Section 7.16  Pass Through Trustee's Liens..............................................................   40

SECTION 8.   CERTIFICATEHOLDERS' LISTS AND REPORTS...........................................................   40

     Section 8.1   The Facility Lessees to Furnish Pass Through Trustee with
                   Names and Addresses of Certificateholder..................................................   40

     Section 8.2   Preservation of Information...............................................................   41

     Section 8.3   Reports by the Facility Lessees...........................................................   41
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<S>                                                                                                             <C>
     Section 8.4   Reports by the Pass Through Trustee.......................................................   41

SECTION 9.   SUPPLEMENTAL TRUST AGREEMENTS...................................................................   41

     Section 9.1   Supplemental Trust Agreement Without Consent of Certificateholders........................   41

     Section 9.2   Supplemental Trust Agreements with Consent of Certificateholders..........................   42

     Section 9.3   Documents Affecting Immunity or Indemnity.................................................   43

     Section 9.4   Execution of Supplemental Trust Agreements................................................   44

     Section 9.5   Effect of Supplemental Trust Agreements...................................................   44

     Section 9.6   Reference in Certificates to Supplemental Trust Agreements................................   44

     Section 9.7   Conformity with Trust Indenture Act.......................................................   44

SECTION 10.   AMENDMENTS AND CONSENTS TO COLLATERAL TRUST INDENTURE AND OTHER OPERATIVE DOCUMENTS............   44

SECTION 11.   TERMINATION OF PASS THROUGH TRUST..............................................................   45

     Section 11.1   Termination of the Pass Through Trust....................................................   45

SECTION 12.   MISCELLANEOUS PROVISIONS.......................................................................   46

     Section 12.1   Limitation on Rights of Certificateholders...............................................   46

     Section 12.2   Certificates Nonassessable and Fully Paid................................................   46

     Section 12.3   Notices..................................................................................   46

     Section 12.4   Successors and Assigns...................................................................   48

     Section 12.5   Business Day.............................................................................   48

     Section 12.6   GOVERNING LAW............................................................................   48

     Section 12.7   Severability.............................................................................   48

     Section 12.8   Benefits of Pass Through Trust Agreement.................................................   48

     Section 12.9   Counterparts.............................................................................   48

     Section 12.10  Headings and Table of Contents...........................................................   48

     Section 12.11  Further Assurances.......................................................................   49

     Section 12.12  Statement of Intent......................................................................   49

     Section 12.13  RockGen..................................................................................   49

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                         PASS THROUGH TRUST AGREEMENT B

          This PASS THROUGH TRUST AGREEMENT B, dated as of October 18, 2001
(this "Pass Through Trust Agreement"), with respect to the formation of the
South Point, Broad River and RockGen Series B Pass Through Trust (the "Pass
Through Trust"), between SOUTH POINT ENERGY CENTER, LLC, a Delaware limited
liability company ("South Point"), BROAD RIVER ENERGY LLC, a Delaware limited
liability company ("Broad River"), ROCKGEN ENERGY LLC (subject to Section
12.13), a Wisconsin limited liability company ("RockGen," and together with
South Point and Broad River, the "Facility Lessees" and individually each a
"Facility Lessee"), and STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, a national banking association, as Pass Through Trustee
(the "Pass Through Trustee").

                              W I T N E S S E T H :

          WHEREAS, the Facilities Lessees, the Pass Through Trustee, and
certain other parties named therein have entered into the Participation
Agreements referred to on Schedule 1 hereto, pursuant to which the Facilities
Lessees and, in the case of the South Point Facility, CCFC (as defined below)
have agreed to sell, assign or otherwise transfer to the Owner Lessors certain
Undivided Interests in the South Point facility, the Broad River facility and
the RockGen facility (each, a "Facility" and together, the "Facilities"), and
the Facility Lessees have agreed to lease or sublease from the Owner Lessors
such Undivided Interests in the Facilities;

          WHEREAS, the Facilities Lessees, the Pass Through Trustee, and
certain other parties named therein have entered into the Participation
Agreements referred to on Schedule 1 hereto, pursuant to which the Facilities
Lessees and, in the case of the South Point Facility, CCFC (as defined below)
have agreed to lease, assign or otherwise transfer to the Owner Lessors certain
Ground Interests in the South Point Site, the Broad River Site and the RockGen
Site (together, the "Facility Sites"), and the Facility Lessees have agreed to
lease or sublease from the Owner Lessors such Ground Interests;

          WHEREAS, CCFC, South Point, Broad River and RockGen will consummate
the sale or assignment to and lease or sublease from the Owner Lessors of the
Undivided Interests in Facilities and the Ground Interests in the Facility
Sites on the Closing Date;

          WHEREAS, on the Closing Date, each Owner Lessor will enter into a
Collateral Trust Indenture and issue, on a non-recourse basis, Lessor Notes
thereunder to finance a portion of the purchase price for the related Undivided
Interests purchased or assumed by such Owner Lessor;

          WHEREAS, subject to the terms and conditions of this Pass Through
Trust Agreement, the Pass Through Trust will purchase Lessor Notes issued in
connection with the purchase or assumption of the Undivided Interests in the
Facilities from South Point and Broad River on the Closing Date and will hold
all such Lessor Notes in trust for the benefit of the Certificateholders;

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          WHEREAS, the Pass Through Trustee, upon the execution and delivery of
this Pass Through Trust Agreement, hereby declares the creation of this Pass
Through Trust for the benefit of the Certificateholders, and the initial
Certificateholders as the grantors of the Pass Through Trust and by their
respective acceptances of the Certificates join in the creation of this Pass
Through Trust with the Pass Through Trustee; and

          WHEREAS, to facilitate the sale of Lessor Notes to the Pass Through
Trust and the purchase of Lessor Notes by the Pass Through Trust, the Facility
Lessees are, on a joint and several basis, undertaking to perform certain
administrative and ministerial duties hereunder and are also undertaking to pay
the fees and expenses of the Pass Through Trustee.

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

SECTION 1.  DEFINITIONS

     Section 1.1   Definitions.

          (a)   Unless the context hereof otherwise requires, capitalized terms
used in this Pass Through Trust Agreement, including those in the recitals, and
not otherwise defined herein shall have the respective meanings set forth in
Appendix A to the applicable Participation Agreement. The general provisions of
Appendix A to such Participation Agreement shall apply to the terms used in
this Pass Through Trust Agreement and specifically defined herein.

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

               "Act", when used with respect to any Holder, shall have the
          meaning specified in Section 1.4.
               "Authorized Agent" shall mean any Paying Agent or Registrar.

               "Avoidable Tax" shall have the meaning specified in Section
          7.9(e).

               "Book-Entry Certificate" shall mean a beneficial interest in the
          Certificates, ownership and transfers of which shall be made through
          book entries by a Clearing Agency as described in Section 3.9.

               "CCFC" shall mean Calpine Construction Finance Company, L.P.

               "Certificate" shall mean any one of the certificates executed and
          authenticated by the Pass Through Trustee, substantially in the form
          of Exhibit A hereto.

               "Certificate Account" shall mean that account or accounts created
          and maintained pursuant to Section 4.1(a).

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               "Certificate Owner" shall mean, when used in Section 3.9, the
          Person for whom a Clearing Agency Participant acts.

               "Certificate Owner Request" shall mean a request to the Pass
          Through Trustee to receive the reports and other information the
          Facility Lessees or any other Person is required to furnish to the
          Pass Through Trustee pursuant to the Operative Documents, which
          request certifies that the Person making the request is a
          Certificateholder or Certificate Owner.  Any Certificateholder or
          Certificate Owner making a Certificate Owner Request may specify its
          election to receive such information from the Pass Through Trustee on
          an ongoing basis.

               "Certificateholder" or "Holder" shall mean the Person in whose
          name a Certificate is registered in the Register, except that, when
          used in Section 3.9, such term means the Certificate Owners.

               "Clearing Agency" shall mean an organization registered as a
          "clearing agency" pursuant to Section 17A of the Exchange Act.

               "Clearing Agency Participant" shall mean a broker, dealer, bank,
          other financial institution or other Person for whom from time to
          time a Clearing Agency effects, directly or indirectly, book-entry
          transfers and pledges of securities deposited with the Clearing
          Agency.

               "Clearstream" shall have the meaning specified in Section 3.9.

               "Collateral Trust Indenture" shall mean (i) an Indenture of
          Trust, Mortgage and Security Agreement between an Owner Lessor and
          the Indenture Trustee, entered into pursuant to the Participation
          Agreement, as the same may be amended or supplemented in accordance
          with its terms and (ii) any Indenture of Trust, Mortgage and Security
          Agreement, or analogous document, between a Facility Lessee and an
          Indenture Trustee, entered into in connection with the assumption by
          such Facility Lessee of the indebtedness evidenced by any Lessor
          Note, as the same may be amended or supplemented in accordance with
          its terms.

               "Consideration" shall have the meaning specified in Section 2.1.

               "Corporate Trust Office" shall mean, with respect to the Pass
          Through Trustee, any Lessor Manager or any Indenture Trustee, the
          office of such trustee or manager, as the case may be, in the city in
          which at any particular time its corporate trust business shall be
          principally administered.

               "Cut-Off Date" shall mean December 1, 2001.

               "Default" shall mean any event which is or, after notice or lapse
          of time or both would become, an Event of Default.

               "Definitive Certificates" shall have the meaning specified in
          Section 3.9.

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               "Direction" shall have the meaning specified in Section 1.4(c).

               "Distribution Date" shall mean, with respect to distributions of
          Scheduled Payments, each May 30 and November 30 until payment of all
          the Scheduled Payments to be made under the Lessor Notes have been
          made, commencing on May 30, 2002.

               "DTC" shall mean The Depository Trust Company and any successor
          that is a Clearing Agency.

               "Escrow Account" shall have the meaning specified in Section
          2.1(b).

               "Escrowed Funds" shall have the meaning specified in Section
          2.1(b).

               "Euroclear" shall have the meaning specified in Section
          3.9.

               "Event of Default" shall have the meaning specified in Section
          6.1(a).

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

               "Facility Lessee" or "Facility Lessees" shall have the meaning
          specified in the preamble hereto.

               "Fractional Undivided Interest" shall mean the fractional
          undivided interest in the Pass Through Trust that is evidenced by a
          Certificate.

               "Holder" shall have the meaning set forth in the definition of
          "Certificateholder".

               "Indenture Trustee" shall mean a bank or trust company acting as
          indenture trustee under an applicable Collateral Trust Indenture, and
          any successor to such Indenture Trustee as such trustee. The term
          "Indenture Trustee" refers to any one or all of such Indenture
          Trustees, as the context requires.

               "Institutional Accredited Investor" shall mean an institutional
          "accredited investor", as such term is defined in Rule 501(a)(1),
          (2), (3) or (7) under the Securities Act.

               "Issuance Date" shall mean October 18, 2001.

               "Lease" shall mean a facility lease or sublease agreement between
          an Owner Lessor, as the lessor or sublessor (as applicable), and a
          Facility Lessee, as the lessee or sublessee (as applicable), entered
          into pursuant to the Participation Agreement, as such facility lease
          agreement may be amended or supplemented in accordance with its
          terms. The term "Lease" refers to any one or all of such facility
          lease or sublease agreements, as the context requires.

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               "Lease Event of Default" shall mean any Lease Event of Default
          (as such term is defined in a Lease).

               "Lease Indenture Default" shall mean any event which is, or after
          notice or lapse of time or both would become, a Lease Indenture Event
          of Default.

               "Lease Indenture Event of Default" shall mean any Lease Indenture
          Event of Default (as such term is defined in the applicable
          Collateral Trust Indenture).

               "Lease Transaction" shall mean a lease transaction in respect of
          an Undivided Interest between a Facility Lessee and an Owner Lessor
          that is financed in part by the issuance of Lessor Notes to the Pass
          Through Trust, as contemplated by the Participation Agreement and the
          agreements and instruments referred to therein.

               "Lessor Manager" shall mean Wells Fargo Bank Northwest, National
          Association, not in its individual capacity, but solely as Lessor
          Manager under the LLC Agreement, and each other Person which may from
          time to time be acting as Lessor Manager in accordance with the
          provisions of the LLC Agreement.

               "Lessor Note" shall mean any one of the Series B Lessor Notes (as
          defined in the Collateral Trust Indenture) issued under a Collateral
          Trust Indenture, including any Lessor Note (as so defined) issued
          under the Collateral Trust Indenture in replacement or substitution
          therefor, held by the Pass Through Trustee.

               "Letter of Representations" shall mean the letter of
          representations among the Facility Lessees, the Pass Through Trustee
          and the initial Clearing Agency.

               "Operative Documents" shall mean, as the context may require, the
          South Point Operative Documents, the Broad River Operative Documents
          and the RockGen Operative Documents.

               "Other Certificates" shall mean the pass through trust
          certificates issued pursuant to the Other Pass Through Trust
          Agreement.

               "Other Pass Through Trustee" shall mean the Pass Through Trustee
          pursuant to the Other Pass Through Trust Agreement.

               "Other Pass Through Trust Agreement" shall mean the Pass Through
          Trust Agreement A, dated as of date hereof.

               "Outstanding" shall mean, when used with respect to Certificates,
          as of the date of determination, and subject to Section 1.4(c), all
          Certificates theretofore authenticated and delivered under this Pass
          Through Trust Agreement, except:

               (i)   Certificates  theretofore  canceled by the  Registrar  or
          delivered to the Pass Through Trustee or the Registrar for
          cancellation;

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               (ii)   Certificates for which money in the full amount thereof
          has been theretofore deposited with the Pass Through Trustee or any
          Paying Agent in trust for the holders of such Certificates as
          provided in Section 4.1 pending distribution of such money to the
          Certificateholders pursuant to the final distribution payment to be
          made pursuant to Section 11.1; and

               (iii)   Certificates in exchange for or in lieu of which other
          Certificates have been authenticated and delivered pursuant to this
          Pass Through Trust Agreement.

               "Owner Lessor" shall mean one or more, as the context may
          require, of the South Point Owner Lessors, the Broad River Owner
          Lessors or the RockGen Owner Lessors.

               "Owner Participant" shall mean one or more, as the context may
          require, of the South Point Owner Participants, the Broad River Owner
          Participants or the RockGen Owner Participants.

               "Participation Agreement" shall mean one or more, as the context
          may require, of the Participation Agreements enumerated on Schedule I
          hereto among a Facility Lessee, an Owner Participant, an Owner
          Lessor, a Lessor Manager, an Indenture Trustee and the Pass Through
          Trustee, providing for the Lease Transaction.

               "Pass Through Trust" shall mean the trust created by this Pass
          Through Trust Agreement, the estate of which consists of the Trust
          Property.

               "Pass Through Trustee" shall mean the Pass Through Trustee
          referred to in the preamble hereto and the Other Pass Through
          Trustee, and each other Person that may be acting as a pass through
          trustee in accordance with the provisions provided herein or in the
          Other Pass Through Trust Agreement.

               "Paying Agent" shall mean the paying agent maintained and
          appointed pursuant to Section 7.12.

               "Permanent Regulation S Global Certificate" shall have the
          meaning specified in Section 3.9.

               "Permitted Government Investment" shall mean the direct
          obligations of the United States of America for the payment of which
          the full faith and credit of the United States of America is pledged,
          maturing in not more than 60 days or such lesser time as is necessary
          for payment of any Special Payments on a Special Distribution Date.

               "Postponement Notice" shall mean an Officer's Certificate of the
          Facility Lessees (1) requesting that the Pass Through Trustee
          temporarily postpone the purchase of the Lessor Notes to a date later
          than the Issuance Date, (2) identifying the amount of the purchase
          price of each Lessor Note and the aggregate purchase

                                      6

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          price of the Lessor Notes, (3) setting forth the reasons for such
          postponement, and (4) either (a) setting a Transfer Date (which shall
          be on or prior to the Cut-off Date) for payment by the Pass Through
          Trustee of such purchase price and the issuance of the Lessor Notes,
          or (b) indicating that the Transfer Date (which shall be on or prior
          to the Cut-off Date) will be set by subsequent written notice not
          less than one Business Day prior to such Transfer Date.

               "Record Date" shall mean (i) for Scheduled Payments to be
          distributed on any Distribution Date, other than the final
          distribution, the day (whether or not a Business Day) which is
          fifteen days preceding such Distribution Date, and (ii) for Special
          Payments to be distributed on any Special Distribution Date, other
          than the final distribution, the day (whether or not a Business Day)
          which is fifteen days preceding such Special Distribution Date.

               "Register" and "Registrar" shall mean the register maintained and
          the registrar appointed pursuant to Sections 3.4 and 7.12.

               "Regulation S Global Certificate" shall have the meaning
          specified in Section 3.9.

               "Request" shall mean a request by a Facility Lessee, an Owner
          Lessor, or any Indenture Trustee setting forth the subject matter of
          the request accompanied by an Officer's Certificate and an Opinion of
          Counsel as provided in Section 1.2.

               "Responsible Officer" shall mean, when used with respect to the
          initial Pass Through Trustee, any initial Indenture Trustee or any
          Lessor Manager, means any officer in the Corporate Trust Office
          having direct responsibility for the administration of the Operative
          Documents; when used with respect to any successor Pass Through
          Trustee, or successor Indenture Trustee, means the chairman or
          vice-chairman of the board of directors or trustees, the chairman or
          vice-chairman of the executive or standing committee of the board of
          directors or trustees, the president, the chairman of the committee
          on trust matters, any vice-president, any second vice-president, the
          secretary, any assistant secretary, the treasurer, any assistant
          treasurer, the cashier, any assistant cashier, any trust officer or
          assistant trust officer, the comptroller and any assistant
          comptroller, and, when used with respect to the Pass Through Trustee
          and any Indenture Trustee, also means any other officer of the Pass
          Through Trustee or any Indenture Trustee customarily performing
          functions similar to those performed by any of the above designated
          officers and also means, when used with respect to the Pass Through
          Trustee, any Indenture Trustee or any Lessor Manager with respect to
          a particular corporate trust matter, or any other officer to whom
          such matter is referred because of his knowledge of and familiarity
          with the particular subject.

               "Restricted Certificate" shall have the meaning specified in
          Section 3.1.

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               "Restricted Global Certificate" shall have the meaning specified
          in Section 3.9.

               "Scheduled Payment" shall mean, with respect to a Distribution
          Date, any payment (other than a Special Payment) of principal and
          interest on a Lessor Note, due from the applicable Owner Lessor,
          which payment represents the payment of a regularly scheduled
          installment of principal then due on such Lessor Note, or the payment
          of regularly scheduled interest accrued on such Lessor Note.

               "SEC" shall mean the Securities and Exchange Commission, as from
          time to time constituted, created under the Exchange Act.

               "Securities Act" shall mean the Securities Act of 1933, as
          amended.

               "Special Distribution Date" shall mean (i) with respect to the
          prepayment of any Lessor Notes, the day on which such prepayment is
          scheduled to occur pursuant to the terms of the applicable Collateral
          Trust Indenture and (ii) with respect to any Special Payment relating
          to a Lessor Note other than as described in clause (i) of the
          definition of Special Payment, the earliest second day of a month for
          which it is practicable for the Pass Through Trustee to give notice
          pursuant to Section 4.2(c).

               "Special Payment" shall mean (i) any payment of principal,
          premium, if any, and interest on a Lessor Note resulting from the
          prepayment or redemption of such Lessor Note pursuant to the
          applicable provisions of the applicable Collateral Trust Indenture,
          (ii) any payment of principal and interest (including any interest
          accruing upon default) on, or any other amount in respect of, such
          Lessor Note upon a Lease Indenture Event of Default in respect
          thereof or upon the exercise of remedies under the applicable
          Collateral Trust Indenture, (iii) any Special Payment referred to in
          clause (i) of this definition or any Scheduled Payment which is not
          in fact paid within five days of the Special Distribution Date or
          Distribution Date applicable thereto, or (iv) any proceeds from the
          sale of any Lessor Note by the Pass Through Trustee pursuant to
          Section 6 hereof.

               "Special Payments Account" shall mean the account or accounts
          created and maintained pursuant to Section 4.1(b).

               "Specified Investments" shall mean with respect to the Pass
          Through Trust (i) obligations of, or guaranteed by, the United States
          Government or agencies thereof, (ii) open market commercial paper of
          any corporation incorporated under the laws of the United States of
          America or any State thereof rated at least P-2 or its equivalent by
          Moody's or a least A-2 or its equivalent by S&P, (iii) certificates
          of deposit issued by commercial banks organized under the laws of the
          United States or of any political subdivision thereof having a
          combined capital and surplus in excess of $100,000,000 which banks or
          their holding companies have a rating of A or its equivalent by
          Moody's or S& P; provided, that the aggregate amount at any one time
          so invested in certificates of deposit issued by any one

                                      8

<PAGE>

          bank shall not exceed 5% of such bank's capital and surplus, (iv)
          U.S. dollar-denominated offshore certificates of deposit issued by,
          or offshore time deposits with, any commercial bank described in
          clause (iii) above or any subsidiary thereof and (v) repurchase
          agreements with any financial institution having combined capital and
          surplus of at least $100,000,000 with any of the obligations
          described in clauses (i) through (iv) above as collateral; provided,
          that if all of the above investments are unavailable, the entire
          amounts to be invested may be used to purchase federal funds from an
          entity described in clause (iii) above.

               "Temporary Regulation S Global Certificate" shall have the
          meaning specified in Section 3.9.

               "Transfer Date" shall have the meaning assigned to the term
          "Closing Date" in the Participation Agreement, and in any event
          refers to such date as it may be changed from time to time in
          accordance with the terms of the Participation Agreement.

               "Trust Indenture Act" shall mean the Trust Indenture Act of 1939,
          as amended and as in force on the date on which this Pass Through
          Trust Agreement was executed and delivered, except as provided in
          Section 9.7; provided, however, that in the event the Trust Indenture
          Act of 1939 is amended after such date, "Trust Indenture Act" shall
          mean, to the extent required by any such amendment, the Trust
          Indenture Act of 1939 as so amended.

               "Trust Property" shall mean the Lessor Notes held as the property
          of the Pass Through Trust created hereby and all monies at any time
          paid thereon and all monies due and to become due thereunder, funds
          from time to time deposited in the Escrow Account, the Certificate
          Account and the Special Payments Account and any proceeds from the
          sale by the Pass Through Trustee pursuant to Section 6 hereof of any
          Lessor Note.

               "Undivided Interest" shall mean, as the context may require, a
          South Point Undivided Interest, a Broad River Undivided Interest or a
          RockGen Undivided Interest.

     Section 1.2   Compliance Certificates and Opinions.

          (a)   Upon any application or request by a Facility Lessee, an Owner
Lessor or any Indenture Trustee to the Pass Through Trustee to take any action
under any provision of this Pass Through Trust Agreement, such Facility Lessee,
such Owner Lessor or such Indenture Trustee, as the case may be, shall furnish
to the Pass Through Trustee an Officer's Certificate stating that, in the
opinion of the signers, all conditions precedent, if any, provided for in this
Pass Through Trust Agreement relating to the proposed action have been complied
with and an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Pass

                                      9

<PAGE>

Through Trust Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.

          (b)   Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Pass Through Trust Agreement shall
include:

          (1)   a statement that each individual signing such certificate
     or opinion has read such covenant or condition and the definitions herein
     relating thereto;

          (2)   a brief statement as to the nature and scope of the
     examination or investigation upon which the statements or opinions
     contained in such certificate or opinion are based;

          (3)   a statement that, in the opinion of each such individual,
     he has made such examination or investigation as is necessary to enable
     him to express an informed opinion as to whether or not such covenant or
     condition has been complied with; and

          (4)   a statement as to whether, in the opinion of each such
     individual, such condition or covenant has been complied with.

     Section 1.3   Form of Documents Delivered to Pass Through Trustee.

          (a)   In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters and any such Person may certify
or give an opinion as to such matters in one or several documents.

          (b)   Any Officer's Certificate may be based, insofar as it relates
to legal matters, upon a certificate or opinion of, or representations by,
counsel, unless the signer of such Officer's Certificate knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate or opinion is based are erroneous. Any such certificate
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon an Officer's Certificate stating that the information with respect to such
factual matters is in the possession of the signer of such Officer's
Certificate, unless such counsel knows that the certificate or opinions or
representations with respect to such matters are erroneous.

          (c)   Any Opinion of Counsel stated to be based on the opinion of
other counsel shall be accompanied by a copy of such other opinion.

          (d)   Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Pass Through Trust Agreement, they may, but need
not, be consolidated and form one instrument.

                                      10

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  Section 1.4 Acts of Holders.

          (a)   Any direction, consent, waiver, demand, authorization, request,
approval or other action provided by this Pass Through Trust Agreement to be
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent or agents duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Pass Through Trustee and, where
it is hereby expressly required, to any Facility Lessee, any Owner Lessor or
any Indenture Trustee.  Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Pass Through Trust Agreement and (subject to Section
7.1) conclusive in favor of the Pass Through Trustee, the related Facility
Lessee, the related Owner Lessor and any related Indenture Trustee, if made in
the manner provided in this Section.

          (b)   The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Pass
Through Trustee deems sufficient.

          (c)   In determining whether the Holders of the requisite Fractional
Undivided Interests of Certificates Outstanding have given any direction,
consent, waiver or other action (a "Direction"), under this Pass Through Trust
Agreement, Certificates owned by any Facility Lessee, any Owner Lessor, any
Owner Participant or any Affiliate of any such Person shall be disregarded and
deemed not to be Outstanding under this Pass Through Trust Agreement for
purposes of any such determination. In determining whether the Pass Through
Trustee shall be protected in relying upon any such Direction, only
Certificates which the Pass Through Trustee knows to be so owned shall be so
disregarded. Notwithstanding the foregoing, (i) if any such Person owns 100% of
the Certificates Outstanding, such Certificates shall not be so disregarded as
aforesaid, and (ii) if any amount of Certificates so owned by any such Person
have been pledged in good faith, such Certificates shall not be disregarded as
aforesaid if the pledgee establishes to the satisfaction of the Pass Through
Trustee the pledgee's right so to act with respect to such Certificates and
that the pledgee is not one of the Facility Lessees, an Owner Lessor, an Owner
Participant or any Affiliate of any such Person.

          (d)   Any Act by the Holder of any Certificate shall bind the Holder
of every Certificate issued upon the transfer thereof or in exchange therefor
or in lieu thereof, whether or not notation of such Act is made upon such
Certificate.

          (e)   Except as otherwise provided in Section 1.4(c), Certificates
owned by or pledged to any Person shall have an equal and proportionate benefit
under the provisions of this Pass Through Trust Agreement, without preference,
priority or distinction as among all of the Certificates.

          (f)   Notwithstanding anything herein to the contrary, the
Certificates will vote and consent together on all matters as one class and
will not have the right to vote or consent as a separate class on any matter.

                                      11

<PAGE>

          (g)   The Pass Through Trustee may fix in advance a record date for
the determination of the Holders entitled to give any request, demand,
authorization, direction, notice, consent, waiver or other Act solicited by a
Facility Lessee, but the Pass Through Trustee shall not have any obligation to
do so.

     Section 1.5   Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with a provision of the Trust Indenture Act that
is required or deemed under such Act to be a part of and govern this Pass
Through Trust Agreement, such required or deemed provision shall, so long as
the Certificates shall be subject to the Trust Indenture Act, control. If any
provision of this Pass Through Trust Agreement modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
to be excluded, as the case may be.

SECTION 2.   ACQUISITION OF LESSOR NOTES; ORIGINAL ISSUANCE OF CERTIFICATES

  Section 2.1 Issuance of Certificates; Acquisition of Lessor Notes.

          (a)   Pass Through Trustee, at or promptly following the execution
and delivery of this Pass Through Trust Agreement, shall also execute and
deliver Participation Agreements, in the form delivered to the Pass Through
Trustee on or prior to the date of the execution and delivery hereof. Upon
delivery of an authentication order by each of the Facility Lessees and the
satisfaction of the closing conditions with respect to the Lessor Notes in
Section 4 of the Participation Agreement, the Pass Through Trustee shall
execute, deliver and authenticate, on behalf of the Pass Through Trust,
Certificates equaling in the aggregate the total principal amount of the Lessor
Notes deposited into the Pass Through Trust on the Issuance Date. The
Certificates so executed, delivered and authenticated on the Transfer Date
shall evidence the entire ownership of the Pass Through Trust. The Pass Through
Trust shall issue such Certificates on the Issuance Date, in authorized
denominations and in such Fractional Undivided Interests, so as to result in
the receipt of consideration (the "Consideration") in an amount equal to the
aggregate principal amount of such Lessor Notes referred to in the second
preceding sentence. The Pass Through Trust shall purchase Lessor Notes on the
Transfer Date at an aggregate purchase price equal to the amount of the
Consideration so received. Except as provided in Sections 3.4 and 3.5 hereof,
the Pass Through Trustee shall not execute or deliver Certificates in excess of
the aggregate amount specified in this paragraph. The aggregate Fractional
Undivided Interest of Certificates shall not at any time exceed $200,000,000

          (b)   If, on or prior to the Issuance Date, the Facility Lessees
shall deliver to the Pass Through Trustee a Postponement Notice relating to all
of the Lessor Notes related to any Facility, the Pass Through Trustee shall
postpone the purchase of all of the Lessor Notes related to such Facility and
shall deposit into an escrow account (the "Escrow Account") to be maintained as
part of the Pass Through Trust an amount equal to the purchase price of such
Lessor Notes (the "Escrowed Funds"). The Escrowed Funds so deposited shall be
invested by the Pass Through Trustee at the written direction and risk of, and
for the benefit of, the Facility Lessees in Specified Investments (i) maturing
no later than the scheduled Transfer Date or (ii) if no such Transfer Date has
been scheduled, maturing on the next Business Day, or (iii) if the Facility
Lessees have given notice to the Pass Through Trustee that the Lessor Notes
will not be

                                      12

<PAGE>

issued, maturing on the next Special Distribution Date but in no event later
than December 1, 2001, if such investments are reasonably available for
purchase. The Pass Through Trustee shall make a withdrawal from the Escrow
Account only as provided in this Pass Through Trust Agreement. Upon request of
the Facility Lessees on the satisfaction or waiver of the closing conditions
specified in the Participation Agreements on or prior to the Cut-off Date, the
Pass Through Trustee shall purchase all of the Lessor Notes related to any
Facility with the Escrowed Funds withdrawn from the Escrow Account. The
purchase price shall equal the principal amount of such Lessor Notes.

          The Pass Through Trustee shall hold all Specified Investments until
the maturity thereof and will not sell or otherwise transfer Specified
Investments. If Specified Investments held in the Escrow Account mature prior
to the Transfer Date, any proceeds received on the maturity of such Specified
Investments shall be reinvested by the Pass Through Trustee at the written
direction and risk of, and for the benefit of, the Facility Lessees in
Specified Investments maturing as provided in the preceding paragraph.

          Any earnings on Specified Investments received from time to time by
the Pass Through Trustee shall be promptly deposited and held in the Escrow
Account by the Pass Through Trustee. The Facility Lessees shall pay to the Pass
Through Trustee for deposit to the Escrow Account an amount equal to any losses
on such Specified Investments as incurred. On the initial regular Distribution
Date, the Facility Lessees will pay (in immediately available funds) to the
Pass Through Trustee an amount equal to the negative difference between the
amount of earnings received by the Pass Through Trustee on the Specified
Investments in the Escrow Account and the amount of interest that would have
accrued on the Lessor Notes, if any, purchased after the Issuance Date if the
Lessor Notes had been purchased on the Issuance Date to, from the Issuance Date
to, but not including, the date of the purchase of the Lessor Notes by the Pass
Through Trustee.

          If the Facility Lessees notify the Pass Through Trustee prior to the
Cut-off Date that the Lessor Notes or any portion thereof will not be issued on
or prior to the Cut-off Date for any reason (it being understood that if any
Lessor Notes related to one Facility are issued, then all Lessor Notes related
to such Facility shall be issued), on the next Special Distribution Date
occurring not less than 20 days following the date of such notice, (i) the
Facility Lessees shall pay to the Pass Through Trustee for deposit in the
Special Payments Account, in immediately available funds, an amount equal to
the sum of (x) the negative difference between the amount of earnings received
by the Pass Through Trustee on Specified Investments in the Escrow Account and
the amount of interest that would have accrued on the Lessor Notes at a rate
equal to the interest rate applicable to the Certificates from the Issuance
Date to, but not including, such Special Distribution Date and (y) the
Make-Whole Amount and (ii) the Pass Through Trustee shall transfer an amount
equal to that amount of Escrowed Funds that would have been used to purchase
the Lessor Notes designated in such notice and the amount paid by the Facility
Lessees pursuant to the immediately preceding clause (i) to the Special
Payments Account for distribution as a Special Payment in accordance with the
provisions hereof. Any earnings received by the Pass Through Trustee on
Specified Investments in the Escrow Account in excess of the amounts payable
pursuant to the preceding sentence shall be refunded to the Facility Lessee
following the payment of all amounts due hereunder.

                                      13

<PAGE>

          (c)   The Facility Lessees' Assumption of Lessor Notes. If a Facility
Lessee shall assume the obligations of the applicable Owner Lessor under its
Lessor Note pursuant to the Collateral Trust Indenture, the Pass Through
Trustee shall, upon its receipt of written instructions from such Facility
Lessee, surrender the applicable Lessor Notes issued pursuant to the Collateral
Trust Indenture to the Indenture Trustee in exchange for new Lessor Notes of
the same aggregate outstanding principal amount as the Lessor Notes so
surrendered, bearing interest at the same rate, and having the same maturity
and amortization schedule, and otherwise of similar tenor, issued under the
Collateral Trust Indenture and any new Collateral Trust Indenture entered into
by such Facility Lessee and the Indenture Trustee in connection with such
assumption, and thereafter each reference to such Lessor Notes in this Pass
Through Trust Agreement shall be deemed to mean a reference to such new Lessor
Notes or the existing Lessor Notes as assumed by such Facility Lessee.

          (d)   Authentication. Any authentication order delivered by any of
the Facility Lessees hereunder shall be signed by one of such Facility Lessee's
authorized signatories and shall specify the amount and maturity of the
Certificates to be authenticated and the date on which the original issue of
Certificates is to be authenticated. The Pass Through Trustee may appoint an
authenticating agent to authenticate the Certificates. Unless limited by the
terms of such appointment, an authenticating agent may authenticate the
Certificates whenever the Pass Through Trustee may do so. Each reference in
this Pass Through Trust Agreement to authentication by the Pass Through Trustee
includes authentication by such agent. An authenticating agent has the same
rights as any Registrar, Paying Agent or agent for service of notices and
demands.

  Section 2.2 Acceptance by Pass Through Trustee. The Pass Through Trustee, upon
the execution and delivery of this Pass Through Trust Agreement, acknowledges on
behalf of the Pass Through Trust its acceptance of all right, title, and
interest in and to the Lessor Notes acquired pursuant to Section 2.1 hereof and
declares that the Pass Through Trustee holds and will hold such right, title,
and interest, together with all other property constituting the Trust Property,
for the benefit of all present and future Certificateholders, upon the trusts
herein set forth. By its payment for and acceptance of each Certificate issued
to it hereunder, each initial Certificateholder as grantor of the Pass Through
Trust thereby joins in the creation and declaration of the Pass Through Trust.
The Pass Through Trustee shall be under no duty or obligation to inspect, review
or examine the Lessor Notes to determine that they are genuine, valid, binding,
enforceable or appropriate for the represented purpose or that they are other
than what they purport to be on their face.

  Section 2.3 Limitation of Powers. The Pass Through Trust is constituted solely
for the purpose of making the investment in the Lessor Notes, and, except as set
forth herein, the Pass Through Trustee is not authorized or empowered to acquire
any other investments or engage in any other activities and, in particular, the
Pass Through Trustee is not authorized or empowered to do anything that would
cause the Pass Through Trust to fail to qualify as a pass through entity for
federal income tax purposes (including, as subject to this restriction,
acquiring any Undivided Interest or any portion thereof by bidding the Lessor
Notes or otherwise, or taking any action with respect to any Undivided Interest
or any portion thereof once acquired).

                                       14

<PAGE>

SECTION 3.   THE CERTIFICATES

     Section 3.1   Form, Denomination and Execution of Certificates. The
Certificates shall be known as the "9.825% Pass Through Certificates, Series B"
of the Pass Through Trust and shall each represent a Fractional Undivided
Interest. The Certificates shall be issued in registered form without coupons
and shall be substantially in the form attached hereto as Exhibit A, with such
omissions, variations and insertions as are permitted by this Pass Through
Trust Agreement, and may have such letters, numbers or other marks of
identification and such legends or endorsements printed, lithographed or
engraved thereon, as may be required to comply with the rules of any securities
exchange on which such Certificates may be listed or to conform to any usage in
respect thereof, or as may, consistently herewith, be prescribed by the Pass
Through Trustee or by the officer executing such Certificates, such
determination by said officer to be evidenced by such officer signing the
Certificates. Except as provided in Section 3.9, definitive Certificates
shall be printed, lithographed or engraved or produced by any combination of
these methods, all as determined by the officer executing such Certificates, as
evidenced by such officer's execution of such Certificates.

          (c)   During the period beginning on the Issuance Date and ending on
the expiration of the applicable holding period in Rule 144(k) of the
Securities Act, all Certificates issued on the Issuance Date, and all
Certificates issued upon registration of transfer of, or in exchange for, such
Certificates, shall be "Restricted Certificates" and shall be subject to the
restrictions on transfer provided in the legend set forth on the face of the
form of certificate in Exhibit A; provided, however, that the term "Restricted
Certificates" shall not include Certificates as to which such restrictions on
transfer have been terminated in accordance with Section 3.4. All Restricted
Certificates shall bear the legend set forth on the face of the Certificate in
Exhibit A.  Certificates which are not Restricted Certificates shall not bear
such legend.

          (d)   The Certificates shall be issued in minimum denominations of
$100,000 or integral multiples of $1,000 in excess thereof.

          (e)   The Certificates shall be executed on behalf of the Pass
Through Trust by manual or facsimile signature of a Responsible Officer of the
Pass Through Trustee. Certificates bearing the manual or facsimile signature of
an individual who was, at the time when such signature was affixed, authorized
to sign on behalf of the Pass Through Trustee shall be valid and binding
obligations of the Pass Through Trust, notwithstanding that such individual has
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such office at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Pass Through Trust
Agreement, or be valid for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form set forth in Exhibit
B hereto executed by the Pass Through Trustee by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication.

  Section 3.2 Authentication of Certificates. Upon delivery of an authentication
order by the Facility Lessees, the Pass Through Trustee shall cause to be
delivered Certificates duly

                                      15

<PAGE>

authenticated by the Pass Through Trustee, in authorized denominations equaling
in the aggregate the aggregate principal amount set forth in the authentication
order evidencing the entire ownership of the Pass Through Trust.

  Section 3.3 Temporary Certificates. Pending the preparation of definitive
Certificates, the Pass Through Trustee may execute, authenticate and deliver
temporary Certificates which are printed, lithographed, typewritten, or
otherwise produced, in any denomination, containing substantially the same terms
and provisions as set forth in Exhibit A, except for such appropriate
insertions, omissions, substitutions and other variations relating to their
temporary nature as the officer executing such temporary Certificates may
determine, as evidenced by his or her execution of such temporary Certificates.

          If temporary Certificates are issued, the Facility Lessees will cause
definitive Certificates to be prepared without unreasonable delay.  After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office of the Pass Through Trustee, or at
the office or agency of the Pass Through Trustee maintained in accordance with
Section 7.12, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Certificates, the Pass Through Trustee shall execute,
authenticate and deliver in exchange therefor definitive Certificates of
authorized denominations of a like aggregate Fractional Undivided Interest.
Until so exchanged, such temporary Certificates shall in all respects be
entitled to the same benefits under this Pass Through Trust Agreement as
definitive Certificates.

  Section 3.4 Registration of Transfer and Exchange of Certificates.

          (a)   The Pass Through Trustee shall cause to be kept, at the office
or agency to be maintained by it in accordance with the provisions of Section
7.12, a register (the "Register") in which, subject to the provisions of this
Section 3.4, Section 3.9 and the Certificates, the Pass Through Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Pass Through Trustee shall initially be
the registrar (the "Registrar") for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided. The Facility
Lessees may, upon notice to the Pass Through Trustee, change the Registrar at
any time.

          (b)   Every Restricted Certificate shall be subject to the
restrictions on transfer provided in the legend required to be set forth on the
face of each Restricted Certificate pursuant to Section 3.1, and the Holder of
each Restricted Certificate, by such Holder's acceptance thereof, agrees to be
bound by such restrictions on transfer. Whenever any Restricted Certificate is
presented or surrendered for registration of transfer or for exchange for a
Certificate registered in a name other than that of the Holder, such Restricted
Certificate must be accompanied by a certificate in substantially the form set
forth in Exhibit C hereto, dated the date of such surrender and signed by the
Holder of such Restricted Certificate, or such Holder's attorney duly
authorized in writing, as to compliance with such restrictions on transfer.
Neither the Pass Through Trustee nor any Registrar shall be required to accept
for such registration of transfer or exchange any Restricted Certificate not so
accompanied by a properly completed certificate. Notwithstanding the preceding
two sentences, a properly completed certificate shall not be

                                      16

<PAGE>

required in connection with any transfer of any Restricted Certificate through
the facilities of DTC or any other United States securities clearance and
settlement organization; provided, that such transfer does not require a change
in the name (other than to another nominee of DTC or such other securities
clearance and settlement organization) in which such Restricted Certificate is
then registered.

          Whenever any Restricted Certificate is proposed to be transferred by
a Holder to an Institutional Accredited Investor, the Pass Through Trustee
shall have received from such Institutional Accredited Investor, prior to such
transfer, a signed letter substantially in the form of Exhibit D relating to
certain representations and agreements regarding restrictions on transfer of
such Restricted Certificate. In addition, the Holder of the Restricted
Certificate proposed to be transferred must, prior to such transfer, furnish to
the Registrar such certifications (as required by, and in the form set forth
in, this Pass Through Trust Agreement, opinions of counsel or other information
as the Registrar may reasonably request to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act.

          The restrictions imposed by this Section 3.4 and Section 3.1 upon the
transferability of any particular Restricted Certificate shall cease and
terminate if and when such Restricted Certificate has been (i) sold pursuant to
an effective registration statement under the Securities Act, or (ii)
transferred pursuant to Rule 144 under the Securities Act (or any successor
provision thereto), unless the Holder thereof is an affiliate of any Facility
Lessee within the meaning of Rule 144 (or such successor provision). Any
Restricted Certificate as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon
surrender of such Restricted Certificate for exchange to the Pass Through
Trustee or any Registrar in accordance with the provisions of this Section 3.4
(accompanied, in the event that such restrictions on transfer have terminated
by reason of a transfer pursuant to Rule 144 or any successor provision, by an
Opinion of Counsel having substantial experience in practice under the
Securities Act and otherwise reasonably acceptable to each of the Facility
Lessees, addressed to each of the Facility Lessees and the Pass Through Trustee
and in form acceptable to each of the Facility Lessees, to the effect that the
transfer of such Restricted Certificate has been made in compliance with Rule
144 or such successor provision), be exchanged for a new Certificate, of
authorized denominations of a like aggregate Fractional Undivided Interest,
which shall not bear the restrictive legend required by Section 3.1. The Pass
Through Trustee shall not be liable for any action taken or omitted to be taken
by it in good faith in accordance with the aforementioned Opinion of Counsel.

          (c)   Upon surrender for registration of transfer of any Certificate
that is not a Restricted Certificate at the Corporate Trust Office, or such
other office or agency, the Pass Through Trustee shall execute, authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Certificates, in authorized denominations of a like aggregate
Fractional Undivided Interest if its requirements for such transaction are met.

          (d)   At the option of a Certificateholder, Certificates may be
exchanged for other Certificates, in authorized denominations and of a like
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at any such office or agency; provided, that a Restricted
Certificate may only be exchanged for another Restricted Certificate,

                                      17

<PAGE>

until such restrictions on such Restricted Certificate shall cease and
terminate in accordance with the terms of this Section 3.4. Whenever any
Certificates are so surrendered for exchange, the Pass Through Trustee shall
execute, authenticate and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to each of
the Facility Lessees and the Pass Through Trustee and the Registrar duly
executed by the Certificateholder thereof or its attorney duly authorized in
writing.

          (e)   No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Certificates, but the Pass Through
Trustee shall require payment of a sum sufficient to cover any tax or charge
that may be imposed in connection with any transfer or exchange of Certificates.

          (f)   All Certificates surrendered for registration of transfer and
exchange shall be canceled and disposed of in accordance with the usual
practices of the Pass Through Trustee.

     Section 3.5   Mutilated, Destroyed, Lost or Stolen Certificates. If any
mutilated Certificate is surrendered to the Registrar, or the Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and in the case of such destruction, loss or theft, there is
delivered to the Registrar, the Pass Through Trustee, the Facility Lessees and
the applicable Owner Lessor such security, indemnity or bond as may be required
by them to protect each of them and the Pass Through Trust from any loss that
any of them may suffer if a Certificate is replaced, then, in the absence of
notice to the Registrar or the Pass Through Trustee that such Certificate has
been acquired by a bona fide purchaser, the Pass Through Trustee, on behalf of
the Pass Through Trust, shall execute, authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like Fractional Undivided Interest with the same final
Distribution Date. In connection with the issuance of any new Certificate under
this Section 3.5, the Pass Through Trustee shall require the payment of a sum
sufficient to cover any tax or other charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Pass
Through Trustee and the Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 3.5 shall constitute conclusive
evidence of the appropriate Fractional Undivided Interest in the Pass Through
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.

     Section 3.6   Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Pass Through Trustee, the
Facility Lessees, the applicable Owner Lessor, the Registrar and any Paying
Agent may treat the person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions pursuant
to Section 4.2 and for all other purposes whatsoever, and neither the Pass
Through Trustee, any Facility Lessee, the applicable Owner Lessor, the
Registrar nor any Paying Agent shall be affected by any notice to the contrary.

     Section 3.7   Cancellation. All Certificates surrendered for payment,
transfer or exchange shall, if surrendered to any Person a party hereto other
than the Registrar, be delivered by such Person to the Registrar for
cancellation. No Certificates shall be authenticated in lieu of

                                      18

<PAGE>

or in exchange for any Certificates canceled as provided in this Section 3.7,
except as expressly permitted by this Pass Through Trust Agreement. All
canceled Certificates held by the Registrar shall be disposed of in accordance
with the usual practice of the Pass Through Trustee and, if destroyed, a
certification of their destruction shall be delivered to the Pass Through
Trustee.

     Section 3.8   Limitation of Liability for Payments. All payments or
distributions made to Certificateholders under this Pass Through Trust
Agreement shall be made only from the Trust Property and only to the extent
that the Pass Through Trustee shall have received sufficient income or proceeds
from the Trust Property to make such payments in accordance with the terms of
Section 4 of this Pass Through Trust Agreement. Each Holder of a Certificate,
by its acceptance of such Certificate, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to the Holder thereof as provided in this Pass Through Trust
Agreement. Nothing in this Pass Through Trust Agreement shall be construed as
an agreement, or otherwise creating an obligation, of (a) any Facility Lessee,
the Pass Through Trust or the Pass Through Trustee to pay any of the principal,
premium, if any, or interest due from time to time under the Lessor Notes, or
(b) any Facility Lessee, the Pass Through Trust or the Pass Through Trustee to
pay any amount due from time to time in respect of the Certificates. The
liability of an Owner Lessor under the applicable Lessor Notes shall be limited
as set forth therein and in the applicable Collateral Trust Indenture.

  Section 3.9 Book-Entry and Definitive Certificates.

          (a)   Except for Certificates issued to Institutional Accredited
Investors which must be issued in the form of definitive, fully registered
Certificates ("Definitive Certificates"), the Certificates may be issued in the
form of one or more typewritten Certificates representing the Book-Entry
Certificates to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Pass Through Trustee. In such case, the Certificates delivered
to DTC shall initially be registered on the Register in the name of Cede & Co.,
the nominee of the initial Clearing Agency, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the Certificates, except as provided above and in subsection (d) below. As
to the Book-Entry Certificates, unless and until Definitive Certificates have
been issued pursuant to subsection (d) below:

               (i)   the provisions of this Section 3.9 shall be in full force
          and effect;

               (ii)  the Facility Lessees, any Owner Lessor, the Paying Agent,
          the Registrar and the Pass Through Trustee may deal with the Clearing
          Agency for all purposes (including the making of distributions on the
          Certificates) as the authorized representative of the Certificate
          Owners;

               (iii) to the extent that the provisions of this Section 3.9
          conflict with any other provisions of this Pass Through Trust
          Agreement (other than the provisions of any supplemental agreement
          amending this Section 3.9 as permitted by this Pass Through Trust
          Agreement), the provisions of this Section 3.9 shall control;

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<PAGE>

               (iv)  the rights of Certificate Owners shall be exercised only
          through the Clearing Agency and shall be limited to those established
          by law and agreements between such Certificate Owners and the
          Clearing Agency Participants; and until Definitive Certificates are
          issued pursuant to subsection (d) below, the Clearing Agency will
          make book-entry transfers among the Clearing Agency Participants and
          receive and transmit distributions of principal and interest and
          premium, if any, on the Certificates to such Clearing Agency
          Participants; and

               (v)   whenever  this  Pass  Through  Trust  Agreement  requires
          or permits actions to be taken based upon instructions or directions
          of Certificateholders holding Certificates evidencing a specified
          percentage of the Fractional Undivided Interests in the Pass Through
          Trust, the Clearing Agency shall be deemed to represent such
          percentage only to the extent that it has received instructions to
          such effect from Certificate Owners and/or Clearing Agency
          Participants owning or representing,respectively,such required
          percentage of the beneficial interest in Certificates and has
          delivered such instructions to the Pass Through Trustee.  The Pass
          Through Trustee shall have no obligation to determine (and shall
          incur no liability in connection with any determination of) whether
          the Clearing Agency has in fact received any such instructions.

          (b)   With respect to Book-Entry Certificates, whenever notice or
other communication to the Certificateholders is required under this Pass
Through Trust Agreement, unless and until Definitive Certificates shall have
been issued pursuant to subsection (d) below, the Pass Through Trustee shall
give all such notices and communications specified herein to be given to
Certificateholders to the Clearing Agency and/or the Clearing Agency
Participants (and, upon receipt of a valid Certificate Owner Request, to the
Certificateholder or Certificate Owner making such request), and shall make
available additional copies as reasonably requested by such Clearing Agency
Participants.

          (c)   Unless and until Definitive Certificates are issued pursuant to
subsection (d) below, on the Record Date prior to each applicable Distribution
Date and Special Distribution Date, the Pass Through Trustee will request from
the Clearing Agency a "Securities Position Listing" setting forth the names of
all Clearing Agency Participants reflected on the Clearing Agency's books as
holding interests in the Certificates on such Record Date. The Pass Through
Trustee shall mail to each such Clearing Agency Participant the statements
described in Section 4.3 hereof.

          (d)   If with respect to the Certificates (i) any Facility Lessee
advises the Pass Through Trustee in writing that the Clearing Agency is no
longer willing or able to properly discharge its responsibilities and the
Facility Lessees are unable to locate a qualified successor within 90 days,
(ii) the Facility Lessees (or, following the occurrence of a Lease Event of
Default, the applicable Owner Lessors) at their option, advise the Pass Through
Trustee in writing that they elect to terminate the book-entry system through
the Clearing Agency or (iii) after the occurrence of an Event of Default,
Certificate Owners of Book-Entry Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Pass Through
Trust, by Act of said Certificate Owners delivered to the Facility Lessees and
the

                                      20

<PAGE>

Pass Through Trustee, advise the Facility Lessees, the Owner Lessors, the Pass
Through Trustee and the Clearing Agency through the Clearing Agency
Participants in writing that the continuation of a book-entry system through
the Clearing Agency is no longer in the best interests of the Certificate
Owners, then the Pass Through Trustee shall notify all Certificate Owners,
through the Clearing Agency, of the occurrence of any such event and of the
availability of Definitive Certificates.  Upon surrender to the Pass Through
Trustee of all the Certificates held by the Clearing Agency, accompanied by
registration instructions from the Clearing Agency for registration of
Definitive Certificates in the names of Certificate Owners, the Pass Through
Trust shall issue and deliver the Definitive Certificates in accordance with
the instructions of the Clearing Agency. None of the Facility Lessees, the
Owner Lessors, the Registrar, the Paying Agent or the Pass Through Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such registration
instructions. Upon the issuance of Definitive Certificates, the Pass Through
Trustee shall recognize the Person in whose name the Definitive Certificates
are registered in the Register as Certificateholder hereunder. None of the
Facility Lessees nor the Pass Through Trustee shall be liable if the Facility
Lessees are unable to locate a qualified successor Clearing Agency.

          (e)   The Certificates sold in offshore transactions in reliance on
Regulation S under the Securities Act will be represented initially by one or
more temporary Book-Entry Certificates, in definitive, fully registered form
without interest coupons (collectively, the "Temporary Regulation S Global
Certificate") and will be deposited with the Pass Through Trustee as custodian
for DTC and registered in the name of a nominee of DTC for the accounts of the
Euroclear System ("Euroclear") and Clearstream Banking, S.A. ("Clearstream").
Each Temporary Regulation S Global Certificate will be exchangeable for one or
more permanent Book-Entry Certificate (collectively, the "Permanent Regulation
S Global Certificate," and together with the Temporary Regulation S Global
Certificate, the "Regulation S Global Certificate") on or after 40 days after
the later of the commencement of the offering of the Certificates and the
Issuance Date upon certification that the beneficial interests in such
Book-Entry Certificate are owned by persons who are not U.S. persons as defined
in Regulation S. Prior to the expiration of such 40-day period, beneficial
interests in the Temporary Regulation S Global Certificate may be held only
through Euroclear or Clearstream, and any resale or other transfer of such
interests to U.S. persons shall not be permitted during such period unless such
resale or transfer is made pursuant to Rule 144A or Regulation S under the
Securities Act and in accordance with the certification requirements specified
in Section 3.9(f) below. The aggregate original principal amount of the
Regulation S Global Certificate may from time to time be increased or decreased
by adjustments made on the records of the Pass Through Trustee, as custodian
for DTC, in connection with a corresponding decrease or increase in the
aggregate original principal amount of a Definitive Certificate or the
Restricted Global Certificate, as hereinafter provided.

          (f)   The Certificates sold in reliance on Rule 144A under the
Securities Act will be represented by a one or more permanent Book-Entry
Certificate, in definitive, fully registered form without interest coupons
(collectively, the "Restricted Global Certificate"), which will be deposited
with the Pass Through Trustee as custodian for DTC and registered in the name
of a nominee of DTC. Prior to the 40th day after the later of the commencement
of the offering of the Certificates and the Issuance Date, a beneficial
interest in the Temporary Regulation S Global Certificate may be transferred to
a person who takes delivery in the form of

                                      21

<PAGE>

an interest in the Restricted Global Certificate only upon receipt by the Pass
Through Trustee of a written certification from the transferor (in the form of
Exhibit C hereto) to the effect that such transfer is being made to a person
who the transferor reasonably believes is a "qualified institutional buyer"
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A and in accordance with any applicable securities laws of any state of
the United States or any other jurisdiction. Beneficial interests in the
Restricted Global Certificate may be transferred to a person who takes delivery
in the form of an interest in the Regulation S Global Certificate whether
before, on or after such 40th day, only upon receipt by the Pass Through
Trustee of a written certification (in the form of Exhibit C hereto) to the
effect that such transfer is being made in accordance with Regulation S under
the Securities Act and, if such transfer occurs prior to such 40th day, the
interest will be held immediately thereafter only through Euroclear or
Clearstream. The aggregate initial principal amount of the Restricted Global
Certificate may from time to time be increased or decreased by adjustments made
on the records of the Pass Through Trustee, as custodian for DTC, in connection
with a corresponding decrease or increase in the aggregate initial principal
amount of a Definitive Certificate or a Regulation S Global Certificate, as
hereinafter provided.

          (g)   Any beneficial interest in one of the Book-Entry Certificates
that is transferred to a person who takes delivery in the form of an interest
in another Book-Entry Certificate will, upon transfer, cease to be an interest
in such first Book-Entry Certificate and become an interest in such other
Book-Entry Certificate and, accordingly, will thereafter be subject to all
transfer restrictions, if any, and other procedures applicable to beneficial
interests in such other Book-Entry Certificate for so long as it remains such
an interest.  Upon the transfer of Definitive Certificates to a qualified
institutional buyer or in accordance with Regulation S, such Definitive
Certificates will be exchanged for an interest in a Book-Entry Certificate.

          (h)   The Facility Lessees and the Pass Through Trustee, if
necessary, shall each enter into the Letter of Representations with respect to
the Certificates and fulfill its responsibilities thereunder.

     Section 3.10   Form of Certification. In connection with any certification
contemplated by Section 3.4, relating to compliance with certain restrictions
relating to transfers of Restricted Certificates, such certification shall be
provided substantially in the form of Exhibit C hereto, with only such changes
as shall be reasonably approved by the Facility Lessees and reasonably
acceptable to the Pass Through Trustee.

SECTION 4.   DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS

  Section 4.1 Certificate Account and Special Payments Account.

          (a)   The Pass Through Trust shall establish and maintain on behalf
of the Certificateholders the Certificate Account with the Pass Through Trustee
as one or more non-interest bearing accounts. The Pass Through Trustee shall
hold the Certificate Account in trust for the benefit of the
Certificateholders, and shall make or permit withdrawals therefrom only as
provided in this Pass Through Trust Agreement. On each day when a Scheduled
Payment is made under a Lease to the Pass Through Trustee, as holder of the
Lessor Notes issued under the related Collateral Trust Indenture, the Pass
Through Trustee upon receipt of

                                      22

<PAGE>

such scheduled payment shall immediately deposit the aggregate amount of such
Scheduled Payment in the Certificate Account.

          (b)   The Pass Through Trust shall establish and maintain on behalf
of the Certificateholders the Special Payments Account with the Pass Through
Trustee as one or more accounts, which shall be non-interest bearing except as
provided in Section 4.4. The Pass Through Trustee shall hold the Special
Payments Account in trust for the benefit of the Certificateholders, and shall
make or permit withdrawals therefrom only as provided in this Pass Through
Trust Agreement. On each day when a Special Payment is made to the Pass Through
Trustee, as holder of the Lessor Notes issued under the applicable Collateral
Trust Indenture, the Pass Through Trustee upon receipt shall immediately
deposit the aggregate amounts of such Special Payments in the Special Payments
Account.

          (c)   The Pass Through Trustee shall present to the applicable
Indenture Trustee each Lessor Note on the date of its stated final maturity, or
in the case of any Lessor Note which is to be redeemed or otherwise prepaid in
whole pursuant to the Collateral Trust Indenture, on the applicable redemption
on or other prepayment date under the Collateral Trust Indenture.

  Section 4.2 Distributions from Certificate Account and Special Payments
              Account.

          (a)   On each Distribution Date if the Pass Through Trustee receives
payment of the Scheduled Payments due on any Lessor Notes on such date by 12:00
noon, New York time, on such date, the Pass Through Trustee shall distribute
out of the Certificate Account the entire amount deposited therein pursuant to
Section 4.1(a). If a Scheduled Payment is received by the Pass Through Trustee
after 12:00 noon, New York time, on a Distribution Date, such payment shall be
distributed on the next Business Day. If a Scheduled Payment is not received by
the Pass Through Trustee on a Distribution Date but is received prior to the
time such payment would become a Special Payment, such payment shall be
distributed (i) on the date received, if received by 12:00 noon, New York time,
on such date or (ii) on the next Business Day, if received after 12:00 noon,
New York time, on such date. There shall be so distributed to each
Certificateholder of record on the Record Date with respect to such
Distribution Date (other than as provided in Section 11.1 concerning the final
distribution) (i) if (A) DTC is the Certificateholder of record, or (B) a
Certificateholder holds a Certificate or Certificates in an aggregate amount
greater than $10,000,000 or (C) a Certificateholder holds a Certificate or
Certificates in an aggregate amount greater than $1,000,000 and so requests to
the Pass Through Trustee, by wire transfer in immediately available funds to an
account maintained by such Certificateholder with a bank, or (ii) if none of
the above apply, by check mailed to such Certificateholder at the address
appearing in the Register, such Certificateholder's pro rata share (based on
the aggregate Fractional Undivided Interest held by such Certificateholder) of
the aggregate amount in the Certificate Account.

          (b)   On each Special Distribution Date with respect to any Special
Payment, if the Pass Through Trustee receives the Special Payments due on the
required date by 12:00 noon, New York time, on such date, the Pass Through
Trustee shall distribute out of the Special Payments Account the entire amount
deposited therein with respect to such Special Payment pursuant to this Section
4.2(b).  The Pass Through Trustee shall make such distribution on a pro rata
basis among the Certificateholders. If a Special Payment is received by the
Pass Through

                                      23

<PAGE>

Trustee after 12:00 noon, New York time, on a Special Distribution Date, such
payment shall be distributed on the next Business Day. If a Special Payment is
not received by the Pass Through Trustee on a Special Distribution Date, such
payment shall be distributed (i) on the date received, if received by 12:00
noon, New York time, on such date or (ii) on the next Business Day, if received
after 12:00 noon, New York time, on such date. There shall be so distributed to
each Certificateholder of record on the Record Date with respect to such
Special Distribution Date (other than as provided in Section 11.1 concerning
the final distribution) (i) if (A) DTC is the Certificateholder of record, or
(B) a Certificateholder holds a Certificate or Certificates in an aggregate
amount greater than $10,000,000 or (C) a Certificateholder holds a Certificate
or Certificates in an aggregate amount greater than $1,000,000 and so requests
to the Pass Through Trustee, by wire transfer in immediately available funds to
an account maintained by the Certificateholder with a bank, or (ii) if none of
the above apply, by check mailed to such Certificateholder at the address
appearing in the Register, such Certificateholder's pro rata share (based on
the aggregate Fractional Undivided Interest held by such Certificateholder) of
the aggregate amount in the Special Payments Account on account of such Special
Payment.

          (c)   The Pass Through Trustee shall, at the expense of the Facility
Lessees, cause notice of each Special Payment to be mailed to (i) each
Certificateholder, at the address of such Certificateholder as it appears in
the Register and (ii) any Certificate Owner who has made a valid Certificate
Owner Request, at the address specified in such Certificate Owner Request. In
the event of prepayment of any Lessor Notes, such notice shall be mailed not
less than 20 days prior to the date any such Special Payment is scheduled to be
distributed. In the case of any other Special Payments, such notice shall be
mailed as soon as practicable after the Pass Through Trustee has confirmed that
it has received funds for such Special Payment. Notices mailed by the Pass
Through Trustee shall set forth:

               (i)   the  Special Distribution  Date  and  the  Record  Date
          therefor  (except  as  otherwise provided  in Section 11.1);

               (ii)  the  amount of the  Special  Payment  per $1,000 of face
          amount of  Certificates  and the amount  thereof constituting
          principal, premium, if any, and interest;

               (iii) the reason for the Special Payment; and

               (iv)  if the Special Distribution Date is the same date as a
          Distribution Date, the total amount to be received on such date per
          $1,000 of face amount of Certificates.

If the amount of premium payable upon the prepayment of a Lessor Note has not
been calculated at the time that the Pass Through Trustee mails notice of a
Special Payment, it shall be sufficient if the notice sets forth the other
amounts to be distributed and states that any premium received will also be
distributed. If a Distribution Date or Special Distribution Date is not a
Business Day, distribution shall be made on the immediately following Business
Day.

                                      24

<PAGE>

  Section 4.3 Statements to Certificateholders.

          (a)   On each Distribution Date and Special Distribution Date, the
Pass Through Trustee will include with each distribution to Certificateholders
and any Certificate Owner who has made a valid Certificate Owner Request a
statement, giving effect to such distribution to be made on such date, setting
forth the following information (per a $1,000 face amount Certificate):

               (i)   the amount of such distribution allocable to principal and
          the amount allocable to premium, if any; and

  (ii) the amount of such distribution allocable to interest. (b) Within a
reasonable period of time after the end of each calendar year but not later than
the latest date permitted by law, the Pass Through Trustee shall furnish (i) to
each Person who at any time during such calendar year was a Certificateholder of
record and (ii) to any Person who at any time during such calendar year was a
Certificate Owner who has made a valid Certificate Owner Request and provided
the Pass Through Trustee with such pertinent information as the Pass Through
Trustee shall reasonably request, a statement containing the sum of the amounts
determined pursuant to clauses (a)(i) and (a)(ii) with respect to the Pass
Through Trust for such calendar year or, in the event such Person was a
Certificateholder of record or Certificate Owner during a portion of such
calendar year, for the applicable portion of such year, and such other items as
are readily available to the Pass Through Trustee and which a Certificateholder
or Certificate Owner shall reasonably request as necessary for the purpose of
such Certificateholder's or Certificate Owner's preparation of its Federal
income tax returns.

          (c)   Based on information provided by the Facility Lessees, if there
shall occur any change in the principal amortization schedule of the Lessor
Notes resulting in a change in the schedule of expected distributions on the
Certificates from that set forth on page 31 of the Offering Circular, the Pass
Through Trustee shall promptly furnish to the Certificateholders a statement
setting forth the revised principal amortization schedule of the Lessor Notes
and the resulting revised schedule of expected distributions on the
Certificates.

  Section 4.4 Investment of Special Payment Moneys. Any money received by the
Pass Through Trustee pursuant to Section 4.1(b) representing a Special Payment
which is not to be promptly distributed shall, to the extent practicable, be
invested in Permitted Government Investments by the Pass Through Trustee pending
distribution of such Special Payment pursuant to Section 4.2. Any investment
made pursuant to this Section 4.4 shall be in such Permitted Government
Investments having maturities not later than the date that such moneys are
required to be paid to make the payment required under Section 4.2 on the
applicable Special Distribution Date and the Pass Through Trustee shall hold any
such Permitted Government Investments until maturity. The Pass Through Trustee
shall have no liability with respect to any investment made pursuant to this
Section 4.4, other than by reason of the willful misconduct or negligence of the
Pass Through Trustee. All income and earnings from such investments shall be
distributed on such Special Distribution Date as part of such Special Payment.

                                      25

<PAGE>

SECTION 5. FINANCIAL STATEMENTS AND OTHER REPORTS

     For so long as any Certificates remain Outstanding, the Facility Lessees
shall furnish:

          (a)   to Certificateholders, Certificate Owners and prospective
investors, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act so long as the
Certificates are not freely transferable under the Securities Act; and

          (b)   to the Pass Through Trustee, who in turn shall provide such
information, upon a Certificate Owner Request, to Certificateholders and
Certificate Owners:

               (i)   within 60 days following the end of each of the first three
          fiscal quarters of the Facility Lessees during each fiscal year, a
          copy of Form 10-Q (or any successor form) filed by the Facility
          Lessees with the SEC for such fiscal quarter, or if the Facility
          Lessees are not then subject to the reporting requirements of the
          Exchange Act, unaudited consolidated quarterly financial statements
          for the Facility Lessees for such fiscal quarter;

               (ii)  within 120 days following the end of the fiscal year of
          the Facility Lessees, a copy of the Form 10-K (or any successor form)
          filed by the Facility Lessees with the SEC for such fiscal year, or,
          if the Facility Lessees are not then subject to the reporting
          requirements of the Exchange Act, audited consolidated annual
          financial statements; and

               (iii) within  20 days  after  the  occurrence  thereof,  (A) a
          copy of any current report on Form 8-K (or any successor form) filed
          by the Facility Lessees with the SEC, if any, and (B) notice of the
          following events (1) a Change of Control; (2) any litigation or claim
          against the Facility Lessees, or the South Point, Broad River and
          RockGen which could reasonably be expected to have a Material Adverse
          Effect; (3) the appointment of a receiver over any of the Facility
          Lessees or the confirmation of a plan of reorganization or
          liquidation for any of the Facility Lessees; or (4) the resignation
          or dismissal of the independent accountants engaged by the Facility
          Lessees.

SECTION 6.   DEFAULT

  Section 6.1 Events of Default.

          (a)   With respect to any Lessor Note, if any Lease Indenture Event
of Default under the applicable Collateral Trust Indenture (an "Event of
Default") shall occur and be continuing, then, and in each and every case, so
long as such Lease Indenture Event of Default shall be continuing, the Pass
Through Trustee may vote all of the Lessor Notes issued under the Collateral
Trust Indenture held in the Pass Through Trust, and upon the Direction of the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than a majority in interest of the Fractional Undivided Interests
evidenced by all Certificates at the time Outstanding (determined as provided
in Section 1.4(c)), the Pass Through Trustee shall vote all of such Lessor
Notes, in favor of directing the applicable Indenture Trustee to declare the
unpaid principal amount of such Lessor Notes then outstanding and accrued
interest thereon to be due

                                      26

<PAGE>

and payable under, and to the extent permitted by and in accordance with, the
provisions of such Collateral Trust Indenture. In addition, with respect to any
Lessor Note, if a Lease Indenture Event of Default shall have occurred and be
continuing under the related Lease Indenture, the Pass Through Trustee may in
its discretion, and upon the Direction of the Holders of Certificates
evidencing Fractional Undivided Interest aggregating not less than a majority
in interest of the Fractional Undivided Interests evidenced by all Certificates
at the time Outstanding (determined as provided in Section 1.4(c)) as provided
in Section 6.4 shall, in accordance with such Collateral Trust Indenture vote
the applicable Lessor Notes issued thereunder held in the Pass Through Trust to
direct the applicable Indenture Trustee regarding the exercise of remedies
provided in such Collateral Trust Indenture and consistent with the terms
thereof. Notwithstanding the foregoing, no Lease Indenture Event of Default
under a given Collateral Trust Indenture shall give rise to a Lease Indenture
Event of Default under any other Collateral Trust Indenture.

          In addition, after an Event of Default shall have occurred and be
continuing, the Pass Through Trustee may in its discretion, and upon the
Direction of the Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest of the Fractional
Undivided Interests evidenced by all Certificates at the time Outstanding
(determined as provided in Section 1.4(c)) shall, by such officer or agent as
it may appoint, sell, convey, transfer and deliver all or a portion of such
Lessor Note or Lessor Notes issued under the Collateral Trust Indenture with
respect to which the Event of Default has occurred, without recourse to or
warranty by the Pass Through Trustee or any Certificateholders to any Person.
In any such case, the Pass Through Trustee shall sell, assign, contract to sell
or otherwise dispose of and deliver such Lessor Note or Lessor Notes in one or
more parcels at public or private sale or sales, at any location or locations
at the option of the Pass Through Trustee, all upon such terms and conditions
as it may reasonably deem advisable and at such prices as it may reasonably
deem advisable, for cash. The Pass Through Trustee shall give notice to the
applicable Facility Lessee and Owner Lessor promptly after any such sale.

          In the event that the Pass Through Trustee shall deem it advisable to
sell any or all of the Lessor Notes in accordance with the provisions of this
Section, the parties agree that if registration of any such Lessor Notes shall
be required, in the opinion of counsel for the Pass Through Trustee under the
Securities Act of 1933, as amended, or other applicable law, and regulations
promulgated thereunder, and if the Facility Lessees shall not effect, or cause
to be effected, such registration promptly, the Pass Through Trustee may sell
any such Lessor Notes at a private sale, and no Person shall attempt to
maintain that the prices at which such Lessor Notes are sold are inadequate by
reason of the failure to sell at public sale, or hold the Pass Through Trustee
liable thereafter.

     Section 6.2   Incidents of Sale of Lessor Notes. Upon any sale of all or
any part of the Lessor Notes made either under the power of sale given under
this Pass Through Trust Agreement or otherwise for the enforcement of this Pass
Through Trust Agreement, the following shall be applicable:

          (1)   Certificateholders and Pass Through Trustee May Purchase
     Lessor Notes.  Any Certificateholder, the Pass Through Trustee in its
     individual or any other capacity or any other Person may bid for and
     purchase any of the Lessor Notes and, upon compliance

                                      27

<PAGE>

     with the terms of sale, may hold, retain, possess and dispose of such
     Lessor Notes in their or its or his own absolute right without further
     accountability.

          (2)   Receipt of Pass Through Trustee Shall Discharge Purchaser.
     The receipt of immediately available funds by the Pass Through Trustee or
     the officer or agent appointed by the Pass Through Trustee shall be a
     sufficient discharge to any purchaser for his purchase money, and, after
     paying such purchase money and receiving such receipt, such purchaser or
     his personal representative or assigns shall not be obliged to see to the
     application of such purchase money, or be in any way answerable for any
     loss, misapplication or non-application thereof.

          (3)   Application of Moneys Received upon Sale. Any moneys
     collected by the Pass Through Trustee, upon any sale made either under the
     power of sale given by this Pass Through Trust Agreement or otherwise for
     the enforcement of this Pass Through Trust Agreement, shall be applied as
     provided in Section 4.2.

     Section 6.3   Judicial Proceedings Instituted by Pass Through Trustee.

          (a)   Pass Through Trustee May Bring Suit. If there shall be a
failure to make payment of the principal of, premium, if any, or interest on
any Lessor Note, or if there shall be any failure to pay Rent (as defined in a
Lease) under the Lease related to any Lessor Note when due and payable, then
the Pass Through Trustee, in its own name, and as trustee of an express trust,
as holder of such Lessor Notes shall be, to the extent permitted by and in
accordance with the terms of the Operative Documents, entitled and empowered
(but not obligated) to institute any suits, actions or proceedings at law, in
equity or otherwise, for the collection of the sums so due and unpaid on such
Lessor Notes or under such Lease and may prosecute any such claim or proceeding
to judgment or final decree with respect to the whole amount of any such sums
so due and unpaid; subject, however, to the limitations of liability set forth
in the Lessor Notes and the Operative Documents.

          (b)   Pass Through Trustee May File Proofs of Claim; Appointment of
Pass Through Trustee as Attorney-in-Fact in Judicial Proceedings. The Pass
Through Trustee in its own name, or as trustee of an express trust, or as
attorney-in-fact for the Certificateholders, or in any one or more of such
capacities (irrespective of whether distributions on the Certificates shall
then be due and payable, or the payment of the principal on any Lessor Notes
shall then be due and payable, as therein expressed or by declaration or
otherwise and irrespective of whether the Pass Through Trustee shall have made
any demand to the applicable Indenture Trustee for the payment of overdue
principal, premium (if any) or interest on any Lessor Notes), shall, subject to
the terms of the Operative Documents, be entitled and empowered to file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Pass Through Trustee and of the
Certificateholders allowed in any receivership, insolvency, bankruptcy,
liquidation, readjustment, reorganization or any other judicial proceedings
relative to any Facility Lessee, any Owner Lessor, any Lessor Manager or any
Owner Participant, or their respective creditors or property. Subject to the
terms of the Operative Documents, any receiver, assignee, trustee, liquidator
or sequestrator (or similar official) in any such judicial proceeding is hereby
authorized by each Certificateholder to make payments in respect of such claim
to the Pass Through Trustee, and in the event that the Pass Through Trustee
shall consent to the making

                                      28

<PAGE>

of such payments directly to the Certificateholders, to pay to the Pass Through
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Pass Through Trustee, its agents and counsel
and any other amounts due the Pass Through Trustee under Section 7.7. Subject
to Section 6.4, nothing contained in this Pass Through Trust Agreement shall be
deemed to give to the Pass Through Trustee any right to accept or consent to
any plan of reorganization or otherwise by action of any character in any such
proceeding to waive or change in any way any right of any Certificateholder.

     Section 6.4   Control by Certificateholders. The Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than a majority
in interest of the Fractional Undivided Interests evidenced by all Certificates
at the time Outstanding (determined as provided in Section 1.4(c)) shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Pass Through Trustee, or exercising any trust or
power conferred upon the Pass Through Trustee, under this Pass Through Trust
Agreement, including any right of the Pass Through Trustee as holder of the
Lessor Notes, provided that:

          (1)   such Direction shall not be in conflict with any rule of
     law or with this Pass Through Trust Agreement and would not involve the
     Pass Through Trustee in personal liability or expense;

          (2)   the Pass Through Trustee shall not determine that the
     action so directed would expose it to personal liability or be unjustly
     prejudicial to the Certificateholders not taking part in such Direction;

          (3)   the Pass Through Trustee may take any other action deemed
     proper by the Pass Through Trustee which is not inconsistent with such
     Direction;

          (4)   such Holders shall have offered to the Pass Through
     Trustee security or indemnity against the costs, expenses or liabilities
     which may be incurred thereby; and

          (5)   if a Lease Indenture Event of Default shall have occurred
     and be continuing, such Direction shall not obligate the Pass Through
     Trustee to vote more than a corresponding majority of the related Lessor
     Notes held by the Pass Through Trust in favor of directing any action by
     the applicable Indenture Trustee with respect to such Lease Indenture
     Event of Default.

     Section 6.5   Waiver of Defaults. The Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
of the Fractional Undivided Interests evidenced by all Certificates at the time
Outstanding (determined as provided in Section 1.4(c)) may on behalf of the
Certificateholders of all the Certificates waive any Default hereunder and its
consequences or may instruct the Pass Through Trustee to waive any default
under a Collateral Trust Indenture and its consequences, except:

          (1)   a default in the deposit of any Scheduled Payment or
     Special Payment under Section 4.1 or in the distribution of any payment
     under Section 4.2 on the Certificates; or

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          (2)   a default in the payment of the principal of, premium, if
     any, or interest on any Lessor Notes; or

          (3)   a default in respect of a covenant or provision hereof
     which under Section 9 hereof cannot be modified or amended without the
     consent of the Holder of each Outstanding Certificate affected.

          Upon any such waiver, such Default shall cease to exist with respect
to this Pass Through Trust Agreement, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this Pass
Through Trust Agreement and any direction given by the Pass Through Trustee on
behalf of such Holders to the applicable Indenture Trustee shall be annulled
with respect thereto; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon. Upon
any such waiver with respect to a Default under a Collateral Trust Indenture,
the Pass Through Trustee shall vote a corresponding majority of the Lessor
Notes issued under the applicable Collateral Trust Indenture to waive the
corresponding Lease Indenture Default or Lease Indenture Event of Default.

          With respect to consents, approvals, waivers and authorizations which
under the terms of Section 9 of a Collateral Trust Indenture may be given by
the applicable Indenture Trustee without the necessity of the consent of any of
the holders of Lessor Notes issued with respect to such Collateral Trust
Indenture, no consent, approval, waiver or authorization shall be required
hereunder on the part of the Pass Through Trustee or the Certificateholders.

     Section 6.6   Undertaking to Pay Court Costs. All parties to this Pass
Through Trust Agreement, and each Certificateholder by his acceptance of a
Certificate, shall be deemed to have agreed that any court may in its
discretion require, in any suit, action or proceeding for the enforcement of
any right or remedy under this Pass Through Trust Agreement, or in any suit,
action or proceeding against the Pass Through Trustee for any action taken or
omitted by it as Pass Through Trustee hereunder, the filing by any party
litigant in such suit, action or proceeding of an undertaking to pay the costs
of such suit, action or proceeding, and that such court may, in its discretion,
assess reasonable costs, including reasonable attorneys' fees, against any
party litigant in such suit, action or proceeding, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
provided, however, that the provisions of this Section 6.6 shall not apply to
(a) any suit, action or proceeding instituted by any Holder, or group of
Holders, holding in the aggregate Certificates evidencing Fractional Undivided
Interests aggregating more than 10% of the Pass Through Trust, (b) any suit,
action or proceeding instituted by any Certificateholder for the enforcement of
the distribution of payments pursuant to Section 4.2 hereof on or after the
respective due dates expressed herein or (c) any suit, action or proceeding
instituted by the Pass Through Trustee.

     Section 6.7   Right of Certificateholders to Receive Payments Not to Be
Impaired.  Anything in this Pass Through Trust Agreement to the contrary
notwithstanding, but subject to Section 3.8 hereof, the right of any
Certificateholder to receive distributions of payments required pursuant to
Section 4.2 hereof on the Certificates when due, or to institute suit for the
enforcement of any such payment on or after the applicable Distribution Date or
Special Distribution Date, shall not be impaired or affected without the
consent of such Certificateholder.

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     Section 6.8   Certificateholders May Not Bring Suit Except Under Certain
Conditions. A Certificateholder shall not have the right to institute any suit,
action or proceeding at law or in equity or otherwise with respect to this Pass
Through Trust Agreement, for the appointment of a receiver or for the
enforcement of any other remedy under this Pass Through Trust Agreement, unless:

          (1)   such Certificateholder previously shall have given written
     notice to the Pass Through Trustee of a continuing Event of Default;

          (2)   the Holders of Certificates evidencing Fractional
     Undivided Interests aggregating not less than a majority in interest of
     the Fractional Undivided Interests evidenced by all Certificates at the
     time Outstanding (determined as provided in Section 1.4(c)) shall have
     requested the Pass Through Trustee in writing to institute such suit,
     action or proceeding and shall have offered to the Pass Through Trustee
     indemnity as provided in Section 7.3(e);

          (3)   the Pass Through Trustee shall have refused or neglected
     to institute any such suit, action or proceeding for 60 days after receipt
     of such notice, request and offer of indemnity; and

          (4)   no Direction inconsistent with such written request has
     been given to the Pass Through Trustee during such 60-day period by the
     Holders of Certificates evidencing Fractional Undivided Interests
     aggregating not less than a majority in interest of the Fractional
     Undivided Interests evidenced by all Certificates at the time Outstanding
     (determined as provided in Section 1.4(c)).

          It is understood and intended that no one or more of the
Certificateholders shall have any right in any manner whatever hereunder or
under the Certificates to (i) surrender, impair, waive, affect, disturb or
prejudice any property in the Trust Property or the lien of any Collateral
Trust Indenture on any property subject thereto, or the rights of the
Certificateholders or the holders of the Lessor Notes, (ii) obtain or seek to
obtain priority over or preference to any other such Holder, or (iii) enforce
any right under this Pass Through Trust Agreement, except in the manner herein
provided and for the equal, ratable and common benefit of all the
Certificateholders subject to the provisions of this Pass Through Trust
Agreement.

     Section 6.9   Remedies Cumulative. Every remedy given hereunder to the
Pass Through Trustee or to any of the Certificateholders shall not be exclusive
of any other remedy or remedies, and every such remedy shall be cumulative and
in addition to every other remedy given hereunder or now or hereafter given by
statute, law, equity or otherwise.

SECTION 7.   THE PASS THROUGH TRUSTEE

  Section 7.1 Certain Duties and Responsibilities.

          (a)   Prior to an Event of Default of which a Responsible Officer of
the Pass Through Trustee has actual knowledge:

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          (1)   the Pass Through Trustee shall not be liable except for
     the performance of such duties as are specifically set out in this Pass
     Through Trust Agreement; and

          (2)   the Pass Through Trustee may conclusively rely, as to the
     truth of the statements and the correctness of the opinions expressed
     therein, in the absence of bad faith on the part of the Pass Through
     Trustee, upon Officer's Certificates or Opinions of Counsel conforming to
     the requirements of this Pass Through Trust Agreement;

but the Pass Through Trustee shall, at any time that the Certificates shall be
subject to the Trust Indenture Act, examine any evidence furnished to it
pursuant to this Pass Through Trust Agreement or Section 314 of the Trust
Indenture Act to determine whether or not such evidence conforms to the
requirements of this Pass Through Trust Agreement; provided, however, that the
Pass Through Trustee shall not be responsible for the accuracy or content of
such evidence.

          (b)   In case an Event of Default has occurred and is continuing, the
Pass Through Trustee shall exercise each of the rights and powers vested in it
by this Pass Through Trust Agreement and use the same degree of care and skill
in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.

          (c)   No provision of this Pass Through Trust Agreement shall be
construed to relieve the Pass Through Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

          (1)   this paragraph (c) shall not be construed to limit the effect
     of paragraph (a) of this Section 7.1;

          (2)   the Pass Through Trustee shall not be liable in its individual
     capacity for any error of judgment made in good faith by a Responsible
     Officer of the Pass Through Trustee, unless it shall be proved that the
     Pass Through Trustee was negligent in ascertaining the pertinent facts; and

          (3)   the Pass Through Trustee shall not be liable with respect to
     any action taken or omitted to be taken by it in good faith in accordance
     with the Direction of the Holders of Certificates evidencing Fractional
     Undivided Interests aggregating not less than a majority in interest of
     the Fractional Undivided Interests evidenced by all Certificates at the
     time Outstanding (determined as provided in Section 1.4(c)) (A) relating
     to the time, method and place of conducting any proceeding for any remedy
     available to the Pass Through Trustee, or (B) exercising any trust or
     power conferred upon the Pass Through Trustee, under this Pass Through
     Trust Agreement.

          (d)   Whether or not herein expressly so provided, every provision of
this Pass Through Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Pass Through Trustee shall be
subject to the provisions of this Section 7.1.

     Section 7.2   Notice of Defaults. The Pass Through Trustee shall give to
the Certificateholders, at any time that the Certificates shall be subject to
the Trust Indenture Act, in the manner and to the extent required by Section
313(c) of the Trust Indenture Act, and to each of the Facility Lessees, the
applicable Owner Lessor and the applicable Indenture Trustee in

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<PAGE>

accordance with Section 12.3, notice of all Defaults actually known to a
Responsible Officer of the Pass Through Trustee within 90 days after the
occurrence thereof; provided, however, that, except in the case of a Default in
the payment of the principal of, premium, if any, or interest on any Lessor
Note, the Pass Through Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee or a trust
committee of directors or Responsible Officers of the Pass Through Trustee in
good faith determine that the withholding of such notice is in the interests of
the Certificateholders.

     Section 7.3   Certain Rights of Pass Through Trustee.  Except as otherwise
provided in Section 7.1:

          (a)   the Pass Through Trustee may rely and shall be protected in
acting or refraining from acting in reliance upon any Act, Direction,
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;

          (b)   any request or direction of any of the Facility Lessees, an
Owner Lessor or any Indenture Trustee mentioned herein shall be sufficiently
evidenced by a Request;

          (c)   whenever in the administration of this Pass Through Trust
Agreement the Pass Through Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Pass Through Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely
upon an Officer's Certificate of any Facility Lessee, an Owner Lessor or the
applicable Indenture Trustee;

          (d)   the Pass Through Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;

          (e)   the Pass Through Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Pass Through Trust
Agreement at the request or direction of any of the Certificateholders pursuant
to this Pass Through Trust Agreement, unless such Certificateholders shall have
offered to the Pass Through Trustee reasonable security or indemnity against
the cost, expenses and liabilities which might be incurred by it in compliance
with such request or direction;

          (f)   the Pass Through Trustee shall not be bound to make any
investigation into the facts or matters stated in any Act, Direction,
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document;

          (g)   the Pass Through Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Pass Through Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it hereunder with due care;

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<PAGE>

          (h)   the Pass Through Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion of rights or powers conferred upon it by
this Pass Through Trust Agreement;

          (i)   the right of the Pass Through Trustee to perform any
discretionary act enumerated in this Pass Through Trust Agreement shall not be
construed as a duty, and the Pass Through Trustee shall not be answerable for
other than its negligence or willful misconduct in the performance of such act;

          (j)   the Pass Through Trustee shall not be required to give any bond
or surety in respect of the execution of the trust fund created hereby or the
powers granted hereunder; and

          (k)   the Pass Through Trustee shall have no responsibility for
filing any financing or continuation statement in any public office at any time
or to otherwise perfect or maintain the perfection of any security interest or
lien granted to it hereunder or to record this Pass Through Trust Agreement.

     Section 7.4   Not Responsible for Recitals; Issuance of Certificates. The
recitals contained herein and in the Certificates, except the certificates of
authentication, shall not be taken as the statements of the Pass Through
Trustee, and the Pass Through Trustee assumes no responsibility for their
correctness. The Pass Through Trustee makes no representations as to the
validity or sufficiency of this Pass Through Trust Agreement, the Lessor Notes,
the Operative Documents, or the Certificates, or the collateral securing the
Lessor Notes, except that the Pass Through Trustee hereby represents and
warrants that this Pass Through Trust Agreement has been, and each Certificate
will be, executed and delivered by one of its officers who is duly authorized
to execute and deliver such document on its behalf.

     Section 7.5   May Hold Certificates. The Pass Through Trustee, any Paying
Agent, Registrar or any other agent, in their respective individual or any
other capacity, may become the owner or pledgee of Certificates and may
otherwise deal with any Facility Lessee, any Owner Lessor, any Owner
Participant or any Indenture Trustee with the same rights it would have if it
were not the Pass Through Trustee, Paying Agent, Registrar or such other agent,
subject to Section 7.8 in the case of the Pass Through Trustee.  Section 7.6
Money Held in Pass Through Trust. Money held by the Pass Through Trustee or the
Paying Agent in trust hereunder need not be segregated from other funds except
to the extent required herein or by law and neither the Pass Through Trustee
nor the Paying Agent shall have any liability for interest upon any such moneys
except as provided for herein.

     Section 7.7   Compensation, Reimbursement and Indemnification.  The
Facility Lessees agree on a joint and severable basis:

          (1)   to pay, or cause to be paid, to the Pass Through Trustee
     from time to time the compensation separately agreed to by the Pass
     Through Trustee and any Facility Lessee for all services rendered by it
     hereunder (which compensation shall not be limited by any provision of law
     in regard to the compensation of a trustee of an express trust); and

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<PAGE>

          (2)   except as otherwise expressly provided herein, to
     reimburse, or cause to be reimbursed, the Pass Through Trustee upon its
     request for all reasonable out-of-pocket expenses, disbursements and
     advances incurred or made by the Pass Through Trustee in accordance with
     any provision of this Pass Through Trust Agreement (including the
     reasonable compensation and the expenses and disbursements of its agents
     and counsel), except any such expense, disbursement or advance as may be
     attributable to its negligence, willful misconduct or bad faith.

          In addition, the Pass Through Trustee shall be entitled to
reimbursement from, and shall have a lien prior to the Certificates upon, all
property and funds held or collected by the Pass Through Trustee in its
capacity as Pass Through Trustee for any tax incurred without negligence, bad
faith or willful misconduct, on its part, arising out of or in connection with
the acceptance or administration of this Pass Through Trust (other than any tax
attributable to the Pass Through Trustee's compensation for serving as such),
including any costs and expenses incurred in contesting the imposition of any
such tax. If the Pass Through Trustee reimburses itself for any such tax, it
will within 30 days mail a brief report setting forth the circumstances thereof
to all Certificateholders as their names and addresses appear in the Register.

     Section 7.8   Corporate Trustee Required; Eligibility. There shall at all
times be a Pass Through Trustee hereunder which (a) shall be, at any time that
the Certificates shall be subject to the Trust Indenture Act, a Person eligible
to act as a trustee under Section 310(a) of the Trust Indenture Act and (b)
shall be a corporation organized and doing business under the laws of the
United States of America or of any state, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $150,000,000, and subject to supervision or examination by Federal or
state authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section 7.8, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Pass Through Trustee shall cease to be eligible
in accordance with the provisions of clause (a) of this Section 7.8 at a time
when it is required to be so qualified, it shall resign immediately in the
manner and with the effect hereinafter specified in this Section 7.

     Section 7.9   Resignation and Removal: Appointment of Successor.

          (a)   No resignation or removal of the Pass Through Trustee and no
appointment of a successor Pass Through Trustee pursuant to this Section 7.9
shall become effective until the acceptance of appointment by the successor
Pass Through Trustee under Section 7.10.

          (b)   The Pass Through Trustee may resign at any time by giving
written notice thereof to the Facility Lessees, the Authorized Agents, the
Owner Lessors, the Owner Participants and each Indenture Trustee. If an
instrument of acceptance by a successor Pass Through Trustee shall not have
been delivered to the Facility Lessees, the Owner Lessors, the Owner
Participants and each Indenture Trustee within 30 days after the giving of such
notice of resignation, the resigning Pass Through Trustee may petition any
court of competent jurisdiction for the appointment of a successor Pass Through
Trustee.

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<PAGE>

          (c)   The Pass Through Trustee may be removed at any time by Act of
the Holders holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the Pass Through Trust
delivered to the Pass Through Trustee and to the Facility Lessees, the Owner
Lessors and each Indenture Trustee.

          (d)   If at any time:

               (1)    the Pass Through Trustee fails to, at any time that the
          Certificates shall be subject to the Trust Indenture Act, comply with
          the requirements of Section 310 of the Trust Indenture Act after
          written request for such compliance by a Certificateholder that has
          been a bona fide Certificateholder for at least six months; or

               (2)   the Pass Through Trustee shall cease to be eligible under
          Section 7.8 hereof and shall fail to resign after written request
          therefor by the Facility Lessees (or, following the occurrence and
          during the continuation of a Lease Event of Default, the applicable
          Owner Lessor) or by any such Certificateholder; or

               (3)   the Pass Through Trustee shall become incapable of acting
          or shall be adjudged bankrupt or insolvent or a receiver of the Pass
          Through Trustee or of its property shall be appointed or any public
          officer shall take charge or control of the Pass Through Trustee or
          of its property or affairs for the purpose of rehabilitation,
          conservation or liquidation;

then, in any case, (i) the Facility Lessees (or, following the occurrence and
during the continuation of a Lease Event of Default, the applicable Owner
Lessor) may remove the Pass Through Trustee or (ii) subject to Section 6.6
hereof, any Certificateholder who has been a bona fide Holder of a Certificate
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Pass Through Trustee and the appointment of a successor Pass Through Trustee.

          (e)   If a Responsible Officer of the Pass Through Trustee shall
obtain Actual Knowledge of an Avoidable Tax (as hereinafter defined) which has
been or is likely to be asserted, the Pass Through Trustee shall promptly
notify the Facility Lessees and the applicable Owner Lessor thereof and shall,
within 30 days of such notification, resign hereunder unless within such 30-day
period the Pass Through Trustee shall have received notice that the Facility
Lessees or the applicable Owner Lessor has agreed to pay such tax. The Facility
Lessees shall promptly appoint a successor Pass Through Trustee in a
jurisdiction where there are no Avoidable Taxes. As used herein an "Avoidable
Tax" means a state or local tax: (i) upon (w) the Pass Through Trust, (x) the
Trust Property, (y) Holders of the Certificates or (z) the Pass Through Trustee
for which the Pass Through Trustee is entitled to seek reimbursement from the
Trust Property, and (ii) that would be avoided if the Pass Through Trustee were
located in another state, or jurisdiction within a state, within the United
States. A tax shall not be an Avoidable Tax if the Facility Lessees or the
Owner Lessors shall agree to pay, and shall pay, such tax.

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<PAGE>

          (f)   If the Pass Through Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Pass
Through Trustee for any cause, the Facility Lessees (or, following the
occurrence of a Lease Event of Default, the applicable Owner Lessor) shall
promptly appoint a successor Pass Through Trustee. If, within one year after
such resignation, removal or incapability, or the occurrence of such vacancy, a
successor Pass Through Trustee shall be appointed by Act of the Holders holding
Certificates evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in the Pass Through Trust, delivered to the
Facility Lessees, the Owner Lessors, the Owner Participants, the Indenture
Trustees and the retiring Pass Through Trustee, the successor Pass Through
Trustee so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Pass Through Trustee and supersede the successor Pass
Through Trustee appointed as provided above. If no successor Pass Through
Trustee shall have been so appointed as provided above and accepted such
appointment in the manner hereinafter provided, any Certificateholder who has
been a bona fide Holder of a Certificate for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Pass Through Trustee.

          (g)   The successor Pass Through Trustee shall give notice of the
resignation and removal of the Pass Through Trustee and appointment of the
successor Pass Through Trustee by mailing written notice of such event by
first-class mail, postage prepaid, to the Holders of Certificates as their
names and addresses appear in the Register. Each notice shall include the name
of such successor trustee and the address of its Corporate Trust Office.

     Section 7.10   Acceptance of Appointment by Successor. Every successor
Pass Through Trustee appointed hereunder shall execute, acknowledge and deliver
to the Facility Lessees, the Owner Lessors and to the retiring Pass Through
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Pass Through Trustee shall become effective and such
successor Pass Through Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Pass Through Trustee; but, on request of any Facility Lessee (or,
following the occurrence of a Lease Event of Default, the applicable Owner
Lessor) to the successor Pass Through Trustee, such retiring Pass Through
Trustee shall execute and deliver an instrument transferring to such successor
Pass Through Trustee all the rights, powers and trusts of the retiring Pass
Through Trustee and shall duly assign, transfer and deliver to such successor
Pass Through Trustee all property and money held by such retiring Pass Through
Trustee hereunder, subject nevertheless to its lien, if any, provided for in
Section 7.7. Upon request of any such successor Pass Through Trustee, the
Facility Lessees, the Owner Lessors, the retiring Pass Through Trustee and such
successor Pass Through Trustee shall execute and deliver any and all
instruments containing such provisions as shall be necessary or desirable to
transfer and confirm to, and for more fully and certainly vesting in, such
successor Pass Through Trustee all such rights, powers and trusts.

          No successor Pass Through Trustee shall accept its appointment unless
at the time of such acceptance such successor Pass Through Trustee shall be
qualified and eligible under this Section 7.

     Section 7.11   Merger, Conversion, Consolidation or Succession to
Business. Any Person into which the Pass Through Trustee may be merged or
converted or with which it may

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<PAGE>

be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Pass Through Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Pass Through Trustee, shall be the successor of the Pass Through Trustee
hereunder, provided such Person shall be otherwise qualified and eligible under
this Section 7, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Certificates shall have
been authenticated, but not delivered, by the Pass Through Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Pass Through Trustee may adopt such authentication and deliver
the Certificates so authenticated with the same effect as if such successor
Pass Through Trustee had itself authenticated such Certificates.

     Section 7.12   Maintenance of Agencies.

          (a)   There shall at all times be maintained in the Borough of
Manhattan, The City of New York, an office or agency where Certificates may be
presented or surrendered for registration of transfer or for exchange, and for
payment thereof and where notices and demands to or upon the Pass Through
Trustee in respect of the Certificates or of this Pass Through Trust Agreement
may be served. Written notice of the location of each such other office or
agency and of any change of location thereof shall be given by the Pass Through
Trustee to the Facility Lessees, the Owner Lessors, the Owner Participants,
each Indenture Trustee and the Certificateholders. In the event that no such
office or agency shall be maintained or no such notice of location or of change
of location shall be given, presentations and demands may be made and notices
may be served at the Corporate Trust Office of the Pass Through Trustee.

          (b)   There shall at all times be a Registrar and a Paying Agent
hereunder. Each such Authorized Agent shall be a bank or trust company, shall
be a corporation organized and doing business under the laws of the United
States or any state, with a combined capital and surplus of at least
$150,000,000, and shall be authorized under such laws to exercise corporate
trust powers, subject to supervision by Federal or state authorities. The Pass
Through Trustee shall initially be the Paying Agent and, as provided in Section
3.4, Registrar hereunder. Each Registrar shall furnish to the Pass Through
Trustee (unless they are the same entity), at stated intervals of not more than
six months, and at such other times as the Pass Through Trustee may request in
writing, a copy of the Register.

          (c)   Any Person into which any Authorized Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, consolidation or conversion to which any Authorized Agent shall be
a party, or any Person succeeding to the corporate trust business of any
Authorized Agent, shall be the successor of such Authorized Agent hereunder, if
such successor Person is otherwise eligible under this Section 7.12, without
the execution or filing of any paper or any further act on the part of the
parties hereto or such Authorized Agent or such successor Person.

          (d)   Any Authorized Agent may at any time resign by giving written
notice of resignation to the Pass Through Trustee, the Facility Lessees, the
Owner Lessors, the Owner Participants and each Indenture Trustee. The Facility
Lessees (or, following the occurrence of a Lease Event of Default, the Owner
Lessor) may, and at the request of the Pass Through Trustee shall, at any time
terminate the agency of any Authorized Agent by giving written notice of

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<PAGE>

termination to such Authorized Agent and to the Pass Through Trustee. Upon the
resignation or termination of an Authorized Agent or in case at any time any
such Authorized Agent shall cease to be eligible under this Section 7.12 (when,
in either case, no other Authorized Agent performing the functions of such
Authorized Agent shall have been appointed), the Facility Lessees (or,
following the occurrence of a Lease Event of Default, the applicable Owner
Lessor) shall promptly appoint one or more qualified successor Authorized
Agents reasonably satisfactory to the Pass Through Trustee, to perform the
functions of the Authorized Agent which has resigned or whose agency has been
terminated or who shall have ceased to be eligible under this Section 7.12. The
Facility Lessees (or, following the occurrence of a Lease Event of Default, the
applicable Owner Lessor) shall give written notice of any such appointment made
by it to the Pass Through Trustee, the Facility Lessees, the Owner Lessors and
each Indenture Trustee; and in each case the Pass Through Trustee shall mail
notice of such appointment to all Holders as their names and addresses appear
on the Register.

          (e)   Each Facility Lessee agrees to pay, or cause to be paid, from
time to time to each Authorized Agent the compensation as set forth in the
schedule agreed to by each Authorized Agent and such Facility Lessee for its
services and to reimburse it for its reasonable expenses.

     Section 7.13   Money for Certificate Payments to Be Held in Trust. All
moneys deposited with any Paying Agent for the purpose of any payment on
Certificates shall be deposited in a non interest bearing account and held in
trust for the benefit of the Holders of the Certificates entitled to such
payment, subject to the provisions of this Section 7.13. Moneys so deposited
and held in trust shall constitute a separate trust fund for the benefit of the
Holders of the Certificates with respect to which such money was deposited.

          The Pass Through Trustee will cause each Paying Agent other than the
Pass Through Trustee to execute and deliver to it an instrument in which such
Paying Agent shall agree with the Pass Through Trustee, subject to the
provisions of this Section 7.13, that such Paying Agent will:

          (1)   hold all sums held by it for payments on Certificates in
     trust for the benefit of the Persons entitled thereto until such sums
     shall be paid to such Persons or otherwise disposed of as herein provided;

          (2)   give the Pass Through Trustee notice in writing of any
     default by any obligor upon the Certificates in the making of any such
     payment; and

          (3)   at any time during the continuance of any such default,
     upon the written request of the Pass Through Trustee, forthwith pay to the
     Pass Through Trustee all sums so held in trust by such Paying Agent.

          The Pass Through Trustee may at any time, for the purpose of
obtaining the satisfaction and discharge of this Pass Through Trust Agreement
or for any other purpose, direct any Paying Agent to pay to the Pass Through
Trustee all sums held in trust by such Paying Agent, such sums to be held by
the Pass Through Trustee upon the same trusts as those upon which such sums
were held by such Paying Agent; and, upon such payment by any Paying Agent

                                      39

<PAGE>

to the Pass Through Trustee, such Paying Agent shall be released from all
further liability with respect to such money.

     Section 7.14   Registration of Lessor Notes in Pass Through Trustee's
Name. The Pass Through Trustee agrees that all Lessor Notes and Permitted
Government Investments, if any, shall be issued in the name of the Pass Through
Trustee or its nominee and held by the Pass Through Trustee, or, if not so
held, the Pass Through Trustee or its nominee shall be reflected as the owner
of such Lessor Notes or Permitted Government Investments, as the case may be,
in the register of the issuer of such Lessor Notes or Permitted Government
Investments under the applicable provisions of the Uniform Commercial Code in
effect where the Pass Through Trustee holds such Lessor Notes or Permitted
Government Investments, or other applicable law then in effect.

     Section 7.15   Withholding Taxes; Information Reporting. The Pass Through
Trustee, as trustee, shall exclude and withhold from each distribution of
principal, premium, if any, and interest and other amounts due hereunder or
under the Certificates any and all withholding taxes applicable thereto as
required by law. The Pass Through Trustee agrees (i) to act as such withholding
agent and, in connection therewith, whenever any present or future taxes or
similar charges are required to be withheld with respect to any amounts payable
in respect of the Certificates, to withhold such amounts and timely pay the
same to the appropriate authority in the name of and on behalf of the Holders
of the Certificates, (ii) that it will file any necessary withholding tax
returns or statements when due, and (iii) that, as promptly as possible after
the payment thereof, it will deliver to each Holder of a Certificate
appropriate documentation showing the payment thereof, together with such
additional documentary evidence as such Holders may reasonably request from
time to time.  The Pass Through Trustee agrees to file any other information
reports as it may be required to file under United States law. Any amounts
withheld and paid to a relevant taxing authority pursuant to this Section 7.15
shall be deemed to have been paid to the related Certificateholders for all
purposes under the Operative Documents.

     Section 7.16   Pass Through Trustee's Liens. The Pass Through Trustee, in
its individual capacity, agrees that it will at its own cost and expense
promptly take any action as may be necessary to duly discharge and satisfy in
full any mortgage, pledge, lien, charge, encumbrance, security interest or
claim on or with respect to the Trust Property which is either (i) attributable
to the Pass Through Trustee in its individual capacity and which is unrelated
to the transactions contemplated by this Pass Through Trust Agreement or any
other applicable Operative Document, or (ii) which is attributable to the Pass
Through Trustee as trustee hereunder or in its individual capacity and which
arise out of acts or omissions which are prohibited by this Pass Through Trust
Agreement.

SECTION 8.   CERTIFICATEHOLDERS' LISTS AND REPORTS

  Section 8.1 The Facility Lessees to Furnish Pass Through Trustee with Names
and Addresses of Certificateholder. Each Facility Lessees will furnish to the
Pass Through Trustee within fifteen days after each Record Date with respect to
a Scheduled Payment, and at such other times as the Pass Through Trustee may
request in writing, a list, in such form as the Pass Through Trustee may
reasonably require, of all information in the possession or control of such
Facility Lessee as to the names and addresses of the Holders of Certificates, in
each case as of a

                                      40

<PAGE>

date not more than sixty days prior to the time such list is furnished;
provided, however, that so long as the Pass Through Trustee is the sole
Registrar, no such list need be furnished; and provided, further, however, that
no such list need be furnished for so long as a copy of the Register is being
furnished to the Pass Through Trustee pursuant to Section 7.12(b).

     Section 8.2   Preservation of Information. The Pass Through Trustee shall
preserve, in as current a form as is reasonably practicable, the names and
addresses of Holders of Certificates contained in the most recent list
furnished to the Pass Through Trustee as provided in Section 7.12(b) or Section
8.1, as the case may be, and the names and addresses of Holders of Certificates
received by the Pass Through Trustee in its capacity as Registrar, if so
acting. The Pass Through Trustee may destroy any list furnished to it as
provided in Section 7.12(b) or Section 8.1, as the case may be, upon receipt of
a new list so furnished.

     Section 8.3   Reports by the Facility Lessees. Each Facility Lessee shall,
at any time that the Certificates shall be subject to the Trust Indenture Act,
comply with Section 314 of the Trust Indenture Act and shall file, furnish and
deliver the reports, information, documents, certificates and opinions required
thereunder, and, at any time that the Certificates shall be subject to the
Trust Indenture Act, acknowledge and agree that, for purposes of Section 314 of
the Trust Indenture Act, each Facility Lessee shall be considered to be the
"obligor" upon the Certificates. Without limiting the generality of the
foregoing, at any time that the Certificates shall be subject to the Trust
Indenture Act, each Facility Lessee shall deliver to the Pass Through Trustee
the annual certificate required under clause (4) of Section 314(a) of the Trust
Indenture Act within 120 days following the end of each fiscal year of such
Facility Lessee (which ends on December 31) ending after the date hereof. The
provisions of this Section 8.3 shall not be construed to impose any obligation
or liability on the Facility Lessees to pay any of the principal, premium, if
any, or interest in respect of the Lessor Notes or the Certificates.

     Section 8.4   Reports by the Pass Through Trustee. At any time that the
Certificates shall be subject to the Trust Indenture Act, the Pass Through
Trustee shall transmit, on or before May 15 of each year, reports with respect
to events described in Section 313(a) of the Trust Indenture Act in accordance
with and to the extent required under Section 313(a) of the Trust Indenture
Act.  Additionally, the Pass Through Trustee shall comply with the reporting
requirements imposed under Treasury Regulation 1.67.

SECTION 9.   SUPPLEMENTAL TRUST AGREEMENTS

     Section 9.1   Supplemental Trust Agreement Without Consent of
Certificateholders.  Without the consent of the Holder of any Certificates, the
Facility Lessees may, and the Pass Through Trustee (subject to Section 9.3)
shall, at any time and from time to time enter into one or more agreements
supplemental hereto, in form satisfactory to the Pass Through Trustee, for any
of the following purposes:

          (1)   to evidence the succession of another Person to any
     Facility Lessee and the assumption by any such successor of the
     obligations of such Facility Lessee herein contained;

                                      41

<PAGE>

          (2)   to add to the covenants of the Facility Lessees, for the
     protection of the Holders of the Certificates;

          (3)   to surrender any right or power herein conferred upon the
     Facility Lessees;

          (4)   to cure any ambiguity, to correct or supplement any
     provision herein which may be defective or inconsistent with any other
     provision herein or to make any other provisions with respect to matters
     or questions arising under this Pass Through Trust Agreement; provided
     that any such action will not adversely affect in any material respect the
     interests of the Holders of the Certificates;

          (5)   to correct or amplify the description of property that
     constitutes Trust Property or the conveyance of such property to the Pass
     Through Trustee;

          (6)   to evidence and provide for a successor Pass Through
     Trustee;

          (7)   to comply with requirements of the SEC, any applicable
     law, rules or regulations of any exchange or quotation system on which the
     Certificates are listed, or any regulatory body;

          (8)   at any time that the Certificates shall be subject to the
     Trust Indenture Act, to modify, eliminate or add to the provisions of this
     Pass Through Trust Agreement to the extent as shall be necessary to
     qualify or continue the qualification of this Pass Through Trust Agreement
     (including any supplemental agreement) under the Trust Indenture Act (if
     such qualification is required) or under any similar Federal statute
     hereafter enacted, or to add to this Pass Through Trust Agreement such
     other provisions as may be expressly permitted by the Trust Indenture Act,
     excluding, however, the provisions referred to in Section 316(a)(2) of the
     Trust Indenture Act as in effect at the date as of which this instrument
     was executed or any corresponding provision in any similar Federal statute
     hereafter enacted;

          (9)   to modify, amend or supplement any provision herein to
     reflect changes relating to the assumption and substitution of any Lessor
     Note pursuant to Section 2.10(b) of the Collateral Trust Indenture; or

          (10)   to add, eliminate, or change any provision under this
     Pass Through Trust Agreement that will not adversely affect the interests
     of the Certificateholders in any material respect;

provided that in each case the Pass Through Trustee shall have received an
opinion of counsel, which may be counsel to the Facility Lessees, to the effect
that such supplemental agreement does not cause the Pass Through Trust to
become taxable as an "association" within the meaning of Treasury Regulation
Section 301.7701-4 or to be taxable as other than a pass through entity for
Federal income tax purposes.

     Section 9.2   Supplemental Trust Agreements with Consent of
Certificateholders.  With the consent of the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
of the Fractional Undivided Interests evidenced by all

                                      42

<PAGE>

Certificates at the time Outstanding (determined as provided in Section 1.4(c)
hereof), by Act of said Holders delivered to the Facility Lessees and the Pass
Through Trustee, the Facility Lessees may (with the consent of the Owner
Lessors, such consent not to be unreasonably withheld), and the Pass Through
Trustee (subject to Section 9.3 hereof) shall, enter into an agreement or
agreements supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Pass
Through Trust Agreement or of modifying in any manner the rights and
obligations of the Holders of the Certificates under this Pass Through Trust
Agreement; provided, however, that no such supplemental agreement shall,
without the consent of the Holder of each Outstanding Certificate affected
thereby:

          (1)   reduce in any manner the amount of, or delay the timing of, any
     receipt by the Pass Through Trustee of payments on the Lessor Notes held
     in the Pass Through Trust, or distributions that are required to be made
     herein on any Certificate of such Pass Through Trust, or change any date
     of payment on any such Certificate, or change the place of payment where,
     or the coin or currency in which, any such Certificate is payable, or
     impair the right of any Holder of any such Certificate to institute suit
     for the enforcement of any such payment or distribution on or after the
     Distribution Date or Special Distribution Date applicable thereto; or

          (2)   except as provided in this Pass Through Trust Agreement,
     permit the disposition of any Lessor Note in the Trust Property, or permit
     the creation of any lien on the Trust Property, or otherwise deprive any
     Certificateholder of the benefit of the ownership of the Lessor Notes held
     in the Pass Through Trust or the lien of the related Collateral Trust
     Indenture; or

          (3)   reduce the percentage of the aggregate Fractional
     Undivided Interests which is required to approve any such supplemental
     agreement, or reduce such percentage required for any waiver provided for
     in this Pass Through Trust Agreement.

Notwithstanding the foregoing, no such supplemental agreement shall be entered
into unless the Pass Through Trustee shall have received an opinion of counsel,
which may be counsel to the Facility Lessees or any of them, to the effect that
such supplemental agreement does not cause the Pass Through Trust to become
taxable as an "association", within the meaning of Treasury Regulation Section
301.7701-4 or to be taxable as other than a pass through entity for Federal
income tax purposes.

          It shall not be necessary for any Act of Certificateholders under
this Section 9.2 to approve the particular form of any proposed supplemental
agreement, but it shall be sufficient if such Act shall approve the substance
thereof.

     Section 9.3   Documents Affecting Immunity or Indemnity. If in the opinion
of the Pass Through Trustee any document required to be executed by it pursuant
to the terms of Section 9.1 or 9.2 affects any interest, right, duty, immunity
or indemnity in favor of the Pass Through Trustee under this Pass Through Trust
Agreement, the Pass Through Trustee may in its discretion decline to execute
such document.

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<PAGE>

     Section 9.4   Execution of Supplemental Trust Agreements. In executing, or
accepting the additional trusts created by, any supplemental agreement
permitted by this Section 9 or the modification thereby of the trusts created
by this Pass Through Trust Agreement, the Pass Through Trustee shall be
entitled to receive, and (subject to Section 7.1) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental agreement is authorized or permitted by this Pass Through Trust
Agreement.

     Section 9.5   Effect of Supplemental Trust Agreements. Upon the execution
of any supplemental agreement under this Section 9, this Pass Through Trust
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Pass Through Trust Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.

     Section 9.6   Reference in Certificates to Supplemental Trust Agreements.
Certificates authenticated and delivered after the execution of any
supplemental agreement pursuant to this Section 9 may bear a notation in form
approved by the Pass Through Trustee as to any matter provided for in such
supplemental agreement; and, in such case, suitable notation may be made upon
Outstanding Certificates after proper presentation and demand.

     Section 9.7   Conformity with Trust Indenture Act. Every supplemental
agreement under this Section 9 executed at a time that the Certificates shall
be subject to the Trust Indenture Act, shall conform to requirements of the
Trust Indenture Act as in effect on the date such supplemental agreement is
executed.

SECTION 10. AMENDMENTS AND CONSENTS TO COLLATERAL TRUST INDENTURE AND OTHER
            OPERATIVE DOCUMENTS

          (a)   In the event that the Pass Through Trustee, as holder of any
Lessor Note in trust for the benefit of the Certificateholders, receives a
request for a consent to any amendment, modification, waiver or supplement
under the Collateral Trust Indenture or other Operative Document that requires
the consent of the holder of such Lessor Note, the Pass Through Trustee shall
forthwith send a notice of such proposed amendment, modification, waiver or
supplement to each Certificateholder registered on the Register as of such
date. Any such notice shall describe the proposed amendment, modification,
waiver or supplement (or attach a copy thereof). The Pass Through Trustee shall
request from the Certificateholders Directions as to (i) whether or not to
direct the applicable Indenture Trustee to take or refrain from taking any
action which a holder of such Lessor Note has the option to direct, (ii)
whether or not to give or execute any waivers, consents, amendments,
modifications or supplements as a holder of such Lessor Note and (iii) how to
vote any Lessor Note if a vote has been called for with respect thereto. Any
such request shall specify a date by which Certificateholders are requested to
respond. Provided such a request for Certificateholder Direction shall have
been made, in directing any action or casting any vote or giving any consent as
the holder of any Lessor Note, the Pass Through Trustee shall vote or consent
with respect to such Lessor Note in the same proportion as the Certificates
were actually voted by Acts of Holders delivered to the Pass Through Trustee at
least two Business Days before the Pass Through Trustee directs such action or
casts such vote or gives such consent.  Notwithstanding the foregoing, but
subject to Section 6.4, in the case that an Event of Default hereunder shall
have occurred and be

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<PAGE>

continuing, the Pass Through Trustee may, in its own discretion and at its own
direction, consent and notify the applicable Indenture Trustee of such consent
to any amendment, modification, waiver or supplement under the applicable
Collateral Trust Indenture or other Operative Document.

          (b)   With respect to consents, approvals, waivers and authorizations
which under the terms of Section 8 of the applicable Collateral Trust Indenture
may be given by the applicable Indenture Trustee without the necessity of the
consent of any of the holders of Lessor Notes, no consent, approval, waiver or
authorization shall be required hereunder on the part of the Pass Through
Trustee or the Certificateholders.

SECTION 11.  TERMINATION OF PASS THROUGH TRUST

     Section 11.1   Termination of the Pass Through Trust. The respective
obligations and responsibilities of the Facility Lessees and the Pass Through
Trustee created hereby and the Pass Through Trust created hereby shall
terminate upon the distribution to all Certificateholders of all amounts
required to be distributed to them pursuant to this Pass Through Trust
Agreement and the disposition of all property held as part of the Trust
Property; provided, however, that if and to the extent that any of the options,
rights and privileges granted under this Pass Through Trust Agreement, would,
in the absence of the limitation imposed by this sentence, be invalid or
unenforceable as being in violation of the rule against perpetuities or any
other rule or law relating to the vesting of interest in property or the
suspension of the power of alienation of property, then it is agreed that
notwithstanding any other provision of this Pass Through Trust Agreement, such
options, rights and privileges, subject to the respective conditions hereof
governing the exercise of such options, rights and privileges, will be
exercisable only during (a) the longer of (i) a period which will end
twenty-one (21) years after the death of the last survivor of the descendants
living on the date of the execution of this Pass Through Trust Agreement of the
following Presidents of the United States: Franklin D. Roosevelt, Harry S.
Truman, Dwight D. Eisenhower, John F. Kennedy, Lyndon B. Johnson, Richard M.
Nixon, Gerald R. Ford, James E. Carter, Ronald W.  Reagan, George H.W. Bush,
William J. Clinton and George W. Bush or (ii) the period provided under the
Uniform Statutory Rule Against Perpetuities or (b) the specific applicable
period of time expressed in this Pass Through Trust Agreement, whichever of (a)
or (b) is shorter.

          Notice of any termination, specifying the Distribution Date (or
Special Distribution Date, as the case may be) upon which the
Certificateholders may surrender their Certificates to the Pass Through Trustee
for payment of the final distribution and cancellation (at maturity, redemption
or otherwise), shall be mailed promptly by the Pass Through Trustee to
Certificateholders not earlier than the 60th day and not later than the 20th
day next preceding such final distribution specifying (A) the Distribution Date
(or Special Distribution Date, as the case may be) upon which final payment of
the Certificates will be made upon presentation and surrender of Certificates
at the office or agency of the Pass Through Trustee therein specified, (B) the
amount of any such final payment, and (C) that the Record Date otherwise
applicable to such Distribution Date (or Special Distribution Date, as the case
may be) is not applicable, payments being made only upon presentation and
surrender of the Certificates at the office or agency of the Pass Through
Trustee therein specified. The Pass Through Trustee shall give such notice to
the Registrar at the time such notice is given to Certificateholders. Upon
presentation

                                      45

<PAGE>

and surrender of the Certificates, the Pass Through Trustee shall cause to be
distributed to Certificateholders amounts distributable on such Distribution
Date or Special Distribution Date, as the case may be, pursuant to Section 4.2
hereof.

          In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Pass Through Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. In the event that any money held by the Pass Through Trustee for the
payment of distributions on the Certificates shall remain unclaimed for two
years (or such lesser time as the Pass Through Trustee shall be satisfied,
after sixty days' written notice from the Facility Lessees, is one month prior
to the escheat period provided under applicable law) after the final
distribution date with respect thereto, the Pass Through Trustee shall pay to
each Indenture Trustee the appropriate amount of money relating to such
Indenture Trustee and shall give written notice thereof to the Owner Lessors,
the Owner Participants and the Facility Lessees.

SECTION 12.  MISCELLANEOUS PROVISIONS

     Section 12.1   Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this Pass
Through Trust Agreement or the Pass Through Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a partition or
winding up of the Pass Through Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.

     Section 12.2   Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of the Pass
Through Trust, the Fractional Undivided Interests represented by the
Certificates shall be nonassessable for any losses or expenses of the Pass
Through Trust or for any reason whatsoever, and Certificates (upon
authentication thereof by the Pass Through Trustee pursuant to Section 3.2
hereof) are and shall be deemed fully paid. No Certificateholder shall have any
right (except as expressly provided herein) to vote or in any manner otherwise
control the operation and management of the Trust Property, the Pass Through
Trust established hereunder, or the obligations of the parties hereto, nor
shall anything set forth herein, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association.

     Section 12.3   Notices. Unless otherwise expressly specified or permitted
by the terms hereof, all communications and notices provided for herein to a
party hereto shall be in writing or by a telecommunications device capable of
creating a written record, and any such notice shall become effective (a) upon
personal delivery thereof, including by overnight mail or courier service, (b)
in the case of notice by United States mail, certified or registered, postage
prepaid, return receipt requested, upon receipt thereof, or (c) in the case of
notice by such a telecommunications device, upon transmission thereof, provided
such transmission is promptly confirmed by either of the methods set forth in
clauses (a) or (b) above, in each case addressed to such party and copy party
at its address set forth below or at such other address as such party or copy
party may from time to time designate by written notice to the other party:

                                      46

<PAGE>

          If to South Point:

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

          If to Broad River:

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

          If to RockGen:

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

          If to the Pass Through Trustee:

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

                                      47

<PAGE>

     Section 12.4   Successors and Assigns.

          (a)   This Pass Through Trust Agreement shall be binding upon and
shall inure to the benefit of, and shall be enforceable by, the parties hereto
and their respective successors and assigns as permitted by and in accordance
with the terms hereof.

          (b)   Except as expressly provided herein or in the other Operative
Documents, no party hereto may assign its interests or transfer its obligations
herein without the consent of the other parties hereto.

     Section 12.5   Business Day. In any case where any Distribution Date or
Special Distribution Date relating to any Certificate is not a Business Day,
then (notwithstanding any other provision of this Pass Through Trust Agreement)
the payment otherwise payable on such date shall be payable on the next
succeeding Business Day with the same force and effect as if made on such
Distribution Date or Special Distribution Date and, provided that such payment
is made on such succeeding Business Day, no interest shall accrue on the amount
of such payment from and after such scheduled date to the time of such payment
on such next succeeding Business Day.

     Section 12.6   GOVERNING LAW. THIS PASS THROUGH TRUST AGREEMENT, THE
CERTIFICATES AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE IN ALL RESPECTS GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE (WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PROVISIONS THEREOF,
OTHER THAN NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401).

     Section 12.7   Severability. Any provision of this Pass Through Trust
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

     Section 12.8   Benefits of Pass Through Trust Agreement. Nothing in this
Pass Through Trust Agreement or in the Certificates, express or implied, shall
give to any person, other than the Facility Lessees, the Pass Through Trustee,
the Owner Lessors and each Indenture Trustee, and their respective successors,
and the Holders of Certificates as expressly provided herein, any benefit or
any legal or equitable right, remedy or claim under this Pass Through Trust
Agreement.

     Section 12.9   Counterparts. This Pass Through Trust Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.

     Section 12.10   Headings and Table of Contents. The headings of the
sections of this Pass Through Trust Agreement and the Table of Contents are
inserted for purposes of convenience

                                      48

<PAGE>

only and shall not be construed to affect the meaning or construction of any of
the provisions hereof.

     Section 12.11   Further Assurances. Each party hereto will promptly and
duly execute and deliver such further documents and assurances for and take
such further action reasonably requested by the other party, all as may be
reasonably necessary to carry out more effectively the intent and purpose of
this Pass Through Trust Agreement.

     Section 12.12   Statement of Intent. It is intended that, if the Pass
Through Trust were ever to be classified as a partnership for Federal income
tax purposes, that the Pass Through Trust be excluded from the application of
Subchapter K of the Internal Revenue Code, in accordance with Treasury
Regulation 1.761-2(b)(2)(ii).

     Section 12.13   RockGen. Notwithstanding anything herein to the contrary,
until such time as one or more of the RockGen Owner Lessors has issued Series B
Lessor Notes pursuant to a Collateral Trust Indenture, RockGen shall have no
obligations or responsibilities under this Pass Through Trust Agreement,
including, without limitation, any obligation to pay any amounts due hereunder.

                                      49

<PAGE>

          IN WITNESS WHEREOF, the Facility Lessees and the Pass Through Trustee
have caused this Pass Through Trust Agreement to be duly executed and delivered
by their respective officers thereunto duly authorized.

                                                SOUTH POINT ENERGY CENTER, LLC

                                                By: ___________________________
                                                    Name:
                                                    Title:

                                                BROAD RIVER ENERGY LLC

                                                By: ___________________________
                                                    Name:
                                                    Title:

                                                ROCKGEN ENERGY LLC

                                                By: ___________________________
                                                    Name:
                                                    Title:

                                                STATE  STREET  BANK  AND  TRUST
                                                COMPANY  OF CONNECTICUT,
                                                NATIONAL ASSOCIATION,
                                                as Pass Through Trustee

                                                By: ___________________________
                                                    Name:
                                                    Title:

<PAGE>

                                                                     SCHEDULE 1

                            Participation Agreements

          The Participation Agreement providing for Lease Transactions to be
financed by the purchase of Lessor Notes hereunder, and the parties thereto,
are as follows:

South Point

Participation Agreement, dated October 18, 2001, by and between South Point
Energy Center, LLC, as the Facility Lessee, South Point OL-1, LLC, as Owner
Lessor, Wells Fargo Bank Northwest, National Association, not in its individual
capacity, except as expressly provided, but solely as Lessor Manager, Calpine
Corporation, as Guarantor, SBR OP-1, LLC, as Owner Participant, State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as expressly provided, but solely as Indenture
Trustee, and State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as expressly provided, but
solely as Pass Through Trustee.

Participation Agreement, dated October 18, 2001, by and between South Point
Energy Center, LLC, as the Facility Lessee, South Point OL-2, LLC, as Owner
Lessor, Wells Fargo Bank Northwest, National Association, not in its individual
capacity, except as expressly provided, but solely as Lessor Manager, Calpine
Corporation, as Guarantor, SBR OP-2, LLC, as Owner Participant, State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as expressly provided, but solely as Indenture
Trustee, and State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as expressly provided, but
solely as Pass Through Trustee.

Participation Agreement, dated October 18, 2001, by and between South Point
Energy Center, LLC, as the Facility Lessee, South Point OL-3, LLC, as Owner
Lessor, Wells Fargo Bank Northwest, National Association, not in its individual
capacity, except as expressly provided, but solely as Lessor Manager, Calpine
Corporation, as Guarantor, SBR OP-3, LLC, as Owner Participant, State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as expressly provided, but solely as Indenture
Trustee, and State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as expressly provided, but
solely as Pass Through Trustee.

Participation Agreement, dated October 18, 2001, by and between South Point
Energy Center, LLC, as the Facility Lessee, South Point OL-4, LLC, as Owner
Lessor, Wells Fargo Bank Northwest, National Association, not in its individual
capacity, except as expressly provided, but solely as Lessor Manager, Calpine
Corporation, as Guarantor, SBR OP-4, LLC, as Owner Participant, State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as expressly provided, but solely as Indenture
Trustee, and State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as expressly provided, but
solely as Pass Through Trustee.

                                    SCH 1-1

<PAGE>

Broad River

Participation Agreement, dated October 18, 2001, by and between Broad River
Energy LLC, as the Facility Lessee, Broad River OL-1, LLC, as Owner Lessor,
Wells Fargo Bank Northwest, National Association, not in its individual
capacity, except as expressly provided, but solely as Lessor Manager, Calpine
Corporation, as Guarantor, SBR OP-1, LLC, as Owner Participant, State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as expressly provided, but solely as Indenture
Trustee, and State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as expressly provided, but
solely as Pass Through Trustee.

Participation Agreement, dated October 18, 2001, by and between Broad River
Energy LLC, as the Facility Lessee, Broad River OL-2, LLC, as Owner Lessor,
Wells Fargo Bank Northwest, National Association, not in its individual
capacity, except as expressly provided, but solely as Lessor Manager, Calpine
Corporation, as Guarantor, SBR OP-2, LLC, as Owner Participant, State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as expressly provided, but solely as Indenture
Trustee, and State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as expressly provided, but
solely as Pass Through Trustee.

Participation Agreement, dated October 18, 2001, by and between Broad River
Energy LLC, as the Facility Lessee, Broad River OL-3, LLC, as Owner Lessor,
Wells Fargo Bank Northwest, National Association, not in its individual
capacity, except as expressly provided, but solely as Lessor Manager, Calpine
Corporation, as Guarantor, SBR OP-3, LLC, as Owner Participant, State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as expressly provided, but solely as Indenture
Trustee, and State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as expressly provided, but
solely as Pass Through Trustee.

Participation Agreement, dated October 18, 2001, by and between Broad River
Energy LLC, as the Facility Lessee, Broad River OL-4, LLC, as Owner Lessor,
Wells Fargo Bank Northwest, National Association, not in its individual
capacity, except as expressly provided, but solely as Lessor Manager, Calpine
Corporation, as Guarantor, SBR OP-4, LLC, as Owner Participant, State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as expressly provided, but solely as Indenture
Trustee, and State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as expressly provided, but
solely as Pass Through Trustee.

RockGen

Participation Agreement, dated October 18, 2001, by and between RockGen Energy
LLC, as the Facility Lessee, RockGen OL-1, LLC, as Owner Lessor, Wells Fargo
Bank Northwest, National Association, not in its individual capacity, except as
expressly provided, but solely as Lessor Manager, Calpine Corporation, as
Guarantor, SBR OP-1, LLC, as Owner Participant, State Street Bank and Trust

                                    SCH. 1-2

<PAGE>

Company of Connecticut, National Association, not in its individual capacity,
except as expressly provided, but solely as Pass Through Trustee.

Participation Agreement, dated October 18, 2001, by and between RockGen Energy
LLC, as the Facility Lessee, RockGen OL-2 LLC, as Owner Lessor, Wells Fargo
Bank Northwest, National Association, not in its individual capacity, except as
expressly provided, but solely as Lessor Manager, Calpine Corporation, as
Guarantor, SBR OP-2 LLC, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual capacity,
except as expressly provided, but solely as Indenture Trustee, and State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as expressly provided, but solely as Pass Through
Trustee.

Participation Agreement, dated October 18, 2001, by and between RockGen Energy
LLC, as the Facility Lessee, RockGen OL-3 LLC, as Owner Lessor, Wells Fargo
Bank Northwest, National Association, not in its individual capacity, except as
expressly provided, but solely as Lessor Manager, Calpine Corporation, as
Guarantor, SBR OP-3 LLC, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual capacity,
except as expressly provided, but solely as Indenture Trustee, and State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as expressly provided, but solely as Pass Through
Trustee.

Participation Agreement, dated October 18, 2001, by and between RockGen Energy
LLC, as the Facility Lessee, RockGen OL-4 LLC, as Owner Lessor, Wells Fargo
Bank Northwest, National Association, not in its individual capacity, except as
expressly provided, but solely as Lessor Manager, Calpine Corporation, as
Guarantor, SBR OP-4 LLC, as Owner Participant, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual capacity,
except as expressly provided, but solely as Indenture Trustee, and State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as expressly provided, but solely as Pass Through
Trustee.

                                    SCH. 1-3

<PAGE>

                                                                      EXHIBIT A

                              FORM OF CERTIFICATE

              [LEGEND IF CERTIFICATE IS A RESTRICTED CERTIFICATE]

          THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S.  SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S.  PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTION WHICH IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS CERTIFICATE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE
TIME PERIOD REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT, RESELL OR
OTHERWISE TRANSFER THIS CERTIFICATE EXCEPT (A) TO THE FACILITY LESSEES OR ANY
OF THEM OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE PASS THROUGH TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
CERTIFICATE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE PASS THROUGH
TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO THE FACILITY LESSEES THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS CERTIFICATE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  IN CONNECTION WITH ANY TRANSFER OF
THIS CERTIFICATE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE PASS THROUGH
TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT. THE PASS THROUGH TRUST

                                    EXH A-1

<PAGE>

AGREEMENT CONTAINS A PROVISION REQUIRING THE PASS THROUGH TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE FOREGOING
RESTRICTIONS.

          BY ITS ACQUISITION OF ANY CERTIFICATE, THE HOLDER THEREOF WILL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED, ON EACH DAY FROM THE DATE ON WHICH
THE HOLDER ACQUIRES THE CERTIFICATE THROUGH AND INCLUDING THE DATE ON WHICH THE
HOLDER DISPOSES OF ITS INTEREST IN SUCH CERTIFICATE, EITHER THAT (A) IT IS NOT
A PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR OTHER PLAN, AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE
ASSETS OF ANY PLAN SUBJECT TO ERISA OR OTHER PLAN, OR A GOVERNMENTAL PLAN WHICH
IS SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW THAT IS SUBSTANTIALLY SIMILAR TO
THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR (B) ITS PURCHASE, HOLDING AND
DISPOSITION OF SUCH CERTIFICATE WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A
GOVERNMENTAL PLAN, ANY SUBSTANTIALLY SIMILAR FEDERAL, STATE OR LOCAL LAW) FOR
WHICH AN EXEMPTION IS NOT AVAILABLE, ALL THE CONDITIONS OF WHICH ARE SATISFIED.

                                    EXH A-2

<PAGE>

        SOUTH POINT, BROAD RIVER AND ROCKGEN SERIES B PASS THROUGH TRUST

                    9.825% Pass Through Certificate, Series B

                               CUSIP: 839521 AC 5

                               ISIN: US839521AC56

                      Final Distribution Date: May 30, 2019

              evidencing a fractional undivided interest in a
              trust, the property of which includes certain notes
              secured by certain property leased or subleased to
              South Point Energy Center, LLC, Broad River Energy
              LLC and RockGen Energy LLC

Certificate No._______                    $[    ] Fractional Undivided Interest

          THIS CERTIFIES THAT _________________, for value received, is the
registered owner of a $______________ (__________ dollars) Fractional Undivided
Interest in the South Point, Broad River and RockGen Series B Pass Through
Trust (the "Pass Through Trust") created pursuant to a Pass Through Trust
Agreement, dated as of October 18, 2001 (the "Agreement") among South Point
Energy Center, LLC, a Delaware limited liability company, Broad River Energy
LLC, a Delaware limited liability company, RockGen Energy LLC, a Wisconsin
limited liability company (individually, a "Facility Lessee" and collectively,
the "Facility Lessees") and State Street Bank and Trust Company of Connecticut,
National Association, as trustee (the "Pass Through Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. The initial
Fractional Undivided Interest evidenced hereby may change from time to time in
accordance with the terms of the Agreement, such changes as evidenced by the
records of the Pass Through Trustee, which shall be conclusive absent manifest
error. To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings assigned to them in the Agreement. This Certificate is
one of the duly authorized Certificates designated as "9.825% Pass Through
Certificates, Series B" (herein called the "Certificates"). This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.  The property of
the Pass Through Trust includes certain Lessor Notes (the "Trust Property").
Each Lessor Note is secured by a security interest and lien over the Undivided
Interest subject to the Lease relating to the Collateral Trust Indenture under
which such Lessor Note was issued and certain other related property described
in such Collateral Trust Indenture, and liability thereunder is limited to the
income and proceeds of such security.

          Subject to and in accordance with the terms of the Agreement, from
funds then available to the Pass Through Trustee, there will be distributed on
each May 30 and November 30 (a "Distribution Date"), commencing on May 30,
2002, to the person in whose name this

                                    EXH A-3

<PAGE>

Certificate is registered at the close of business on the day of the month
which is fifteen days preceding the Distribution Date, an amount in respect of
the Scheduled Payments on the Lessor Notes due on such Distribution Date, the
receipt of which has been confirmed by the Pass Through Trustee, equal to the
product of the percentage interest in the Pass Through Trust evidenced by this
Certificate and an amount equal to the sum of such Scheduled Payments. Subject
to and in accordance with the terms of the Agreement, in the event that Special
Payments on the Lessor Notes are received by the Pass Through Trustee, from
funds then available to the Pass Through Trustee, there shall be distributed on
the applicable Special Distribution Date, to the Person in whose name this
Certificate is registered at the close of business on the day of the month
which is fifteen days preceding the Special Distribution Date, an amount in
respect of such Special Payments on the Lessor Notes, the receipt of which has
been confirmed by the Pass Through Trustee, equal to the product of the
percentage interest in the Pass Through Trust evidenced by this Certificate and
an amount equal to the sum of such Special Payments so received. The Special
Distribution Date shall be determined as provided in the Agreement. If a
Distribution Date or Special Distribution Date is not a Business Day,
distribution shall be made on the immediately following Business Day with the
same effect as if made on the date on which such payment was due. The Pass
Through Trustee shall mail notice of each Special Payment and the Special
Distribution Date therefor to the Holders of the Certificates.

          Distributions on this Certificate will be made by the Pass Through
Trustee (i) if (A) The Depository Trust Company ("DTC") or its nominee is the
Certificateholder of record of this Certificate, or (B) a Certificateholder
holds a Certificate or Certificates in an aggregate amount greater than
$10,000,000, or (C) a Certificateholder holds a Certificate or Certificates in
an aggregate amount greater than $1,000,000 and so requests to the Pass Through
Trustee, by wire transfer in immediately available funds to an account
maintained by such Certificateholder with a bank, or (ii) if none of the above
apply, by check mailed to such Certificateholder at the address appearing in
the Register, without the presentation or surrender of this Certificate or the
making of any notation hereon. Except as otherwise provided in the Agreement
and notwithstanding the above, the final distribution on this Certificate will
be made after notice mailed by the Pass Through Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at
the office or agency of the Pass Through Trustee specified in such notice.

          [Unless this Certificate is presented by an authorized representative
of DTC to the Facility Lessees or its agent for registration of transfer,
exchange or payment, and any Certificate issued is registered in the name of
Cede & Co., or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co., or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest
herein.]*

          Each Person who acquires or accepts this Certificate or an interest
herein will be deemed by such acquisition or acceptance to have represented and
warranted that either: (i) no

-------------------------

* This legend to appear on Book-Entry Certificates to be deposited with The
Depository Trust Company.

                                    EXH A-4

<PAGE>

Plan assets have been used to purchase this Certificate or an interest herein
or (ii) the purchase and holding of this Certificate or interest herein are
either exempt from the prohibited transaction restrictions of ERISA and the
Code pursuant to one or more prohibited transaction statutory or administrative
exemptions or do not constitute a prohibited transaction under such
restrictions of ERISA and the Code.

          This Certificate shall be governed by and construed in accordance
with the law of the State of New York.

          Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

          Unless the certificate of authentication hereon has been executed by
the Pass Through Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

          IN WITNESS WHEREOF, the Pass Through Trustee has caused this
Certificate to be duly executed.

                                            SOUTH POINT, BROAD RIVER AND
                                            ROCKGEN SERIES B PASS THROUGH TRUST

                                            By: STATE  STREET  BANK AND  TRUST
                                                COMPANY  OF  CONNECTICUT,
                                                NATIONAL ASSOCIATION,
                                                as Pass Through Trustee

                                                By: ___________________________
                                                    Name:
                                                    Title:

                                    EXH A-5

<PAGE>

                            [Reverse Of Certificate]

          The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Facility Lessees, the Pass
Through Company or the Pass Through Trustee or any affiliate thereof. The
Certificates are limited in right of payment, all as more specifically set
forth in the Agreement. All payments or distributions made to
Certificateholders under the Agreement shall be made only from the Trust
Property and only to the extent that the Pass Through Trustee shall have
received sufficient income or proceeds from the Trust Property to make such
payments in accordance with the terms of the Agreement. Each Holder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Holder as provided in the Agreement. This Certificate does
not purport to summarize the Agreement and reference is made to the Agreement
for information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby.  A copy of the Agreement may be examined
during normal business hours at the principal office of the Pass Through
Trustee, and at such other places, if any, designated by the Pass Through
Trustee, by any Certificateholder upon request.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Facility Lessees and the rights of the Certificateholders under the Agreement
at any time by the Facility Lessees and the Pass Through Trustee with the
consent of the Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest of the Fractional
Undivided Interests evidenced by all Certificates at the time Outstanding. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Pass Through Trustee in its capacity as
Registrar, or by any successor Registrar, duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Pass Through Trustee
and the Registrar duly executed by the Holder hereof or such Holder's attorney
duly authorized in writing, and thereupon one or more new Certificates of
authorized denominations evidencing the same aggregate Fractional Undivided
Interest in the Pass Through Trust will be issued to the designated transferee
or transferees.

          The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $100,000 Fractional Undivided Interest and
any integral multiples of $1,000 in excess thereof. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of authorized denominations

                                    EXH A-6

<PAGE>

evidencing the same aggregate Fractional Undivided Interest in the Pass Through
Trust, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange, but the Pass Through Trustee shall require payment of an amount
sufficient to cover any tax or charge payable in connection therewith.

          The Pass Through Trustee, the Facility Lessees, the Owner Lessors,
the Registrar and any agent of the Pass Through Trustee or the Registrar may
treat the person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Pass Through Trustee, the Facility
Lessees, the Owner Lessors, the Registrar nor any such agent shall be affected
by any notice to the contrary.

          The obligations and responsibilities created by the Agreement and the
Pass Through Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant
to the Agreement and the disposition of all property held as part of the Trust
Property.

                                    EXH A-7

<PAGE>

                                                                      EXHIBIT B

FORM OF PASS THROUGH TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This is one of the Certificates referred to in the within-mentioned
Agreement.

                                            STATE STREET BANK AND TRUST
                                            COMPANY OF CONNECTICUT, NATIONAL
                                            ASSOCIATION
                                            as Pass Through Trustee

                                            By: _______________________________
                                                Name:
                                                Title:

                                    EXH B-1

<PAGE>

                                                                      EXHIBIT C

                          FORM OF TRANSFER CERTIFICATE

        SOUTH POINT, BROAD RIVER AND ROCKGEN SERIES B PASS THROUGH TRUST

                       PASS THROUGH CERTIFICATES SERIES B

          This is to certify that as of the date hereof with respect to
$__________ (__________ dollars) Fractional Undivided Interest of the
above-captioned securities presented or surrendered on the date hereof (the
"Surrendered Certificates") for registration of transfer, or for exchange where
the securities issuable upon such exchange are to be registered in a name other
than that of the undersigned Holder (each such transaction being a "transfer"),
the undersigned Holder (as defined in the Pass Through Trust Agreement)
certifies that the transfer of Surrendered Certificates associated with such
transfer complies with the restrictive legend set forth on the face of the
Surrendered Certificates for the reason checked below:

[ ]  Transfer to South Point, Broad River and RockGen Series B Pass Through
     Trust.

[ ]  Transfer inside the United States to a Qualified Institutional Buyer in
     compliance with Rule 144A under the Securities Act.

[ ]  Transfer pursuant to an exemption from, or in a transaction not subject
     to, the registration requirements of the Securities Act (if available).

[ ]  Transfer outside the United States in compliance with Rule 904 of the
     Securities Act.

[ ]  Transfer inside the United States (i) to an institutional Accredited
     Investor that has previously furnished to the Pass Through Trustee a
     signed letter containing certain representations and agreements relating
     to restrictions on transfer and (ii) by a Holder that has previously
     furnished to the Facility Lessees and the Registrar such certifications,
     legal opinions or other information requested to confirm that such
     transfer is in compliance with the Securities Act.

                                [Name of Holder]

                                ________________

Dated: _____________, _____*

*To be dated the date of presentation or surrender

                                    EXH C-1

<PAGE>

                                                                      EXHIBIT D

                          FORM OF PURCHASE LETTER FOR
                       INSTITUTIONAL ACCREDITED INVESTORS

_______________________

_______________________

_______________________
As Initial Purchasers in connection
with the Offering Memorandum referred
to below

c/o _____________
[Address]
[City, State, Zip]

Ladies and Gentlemen:

          In connection with our proposed purchase of Pass Through
Certificates, Series B (the "Certificates") evidencing a fractional undivided
interest in one of two pass through trusts, the property of which consists of
certain notes secured by certain property leased to South Point Energy Center,
LLC, Broad River Energy LLC and RockGen Energy LLC (collectively, the "Facility
Lessees"), we confirm that:

          1.   We have received a copy of the Offering Memorandum (the
"Offering Memorandum") relating to the Certificates and such other information
as we deem necessary in order to make our investment decision. We acknowledge
that we have read and agree to the matters stated under the captions "Notice to
Investors" and "Plan of Distribution" in such Offering Memorandum, and the
restrictions on duplication and circulation of such Offering Memorandum.

          2.   We understand that any subsequent transfer of the Certificates
is subject to certain restrictions and conditions set forth in the Pass Through
Trust Agreement (the "Pass Through Trust Agreement") relating to the
Certificates and conditions set forth under "Notice to Investors" and "Plan of
Distribution" and we agree to be bound by, and not to resell, pledge or
otherwise transfer the Certificates except in compliance with such restrictions
and conditions and the Securities Act of 1933, as amended (the "Securities
Act").

          3.   We understand that the offer and sale of the Certificates has
not been registered under the Securities Act, and that the Certificates may not
be offered or sold except as permitted in the following sentence. We agree, on
our own behalf and on behalf

                                    EXH D-1

<PAGE>

of any accounts for which we are acting as hereinafter stated, that if we
should sell any Certificates within the time period referred to in Rule 144(k)
of the Securities Act, we will do so only (A) to the Facility Lessees or any
subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act
to a "qualified institutional buyer" (as defined therein), (C) to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes to the Pass Through Trustee under the Pass Through Trust
Agreement, a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Certificates (the form of which
letter can be obtained from the Pass Through Trustee) and an opinion of counsel
acceptable to the Facility Lessees that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available), or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing any of the
Certificates from us a notice advising such purchaser that resales of the
Certificates are restricted as stated herein.

          4.   We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Certificates, and we and any accounts for which we are acting are each able to
bear the economic risk of our or its investment.

          5.   We are acquiring the Certificates purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.

          6.   We are not acquiring the Certificates with a view to
distribution thereof or with any present intention of offering or selling any
Certificates, except as permitted above; provided, that the disposition of our
property and property of any accounts for which we are acting as fiduciary will
remain at all times within our control.

                                    EXH D-2

<PAGE>

          You, the Facility Lessees and the Pass Through Trustee are entitled
to rely on this letter and are irrevocably authorized to produce this letter or
a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.

                                Very truly yours,

                                By: _______________________
                                     Name:
                                     Title:
                                     Date:

                                    EXH D-3<PAGE>
                                                                  Exhibit 4.22.3

                                                                  EXECUTED COPY

                         PARTICIPATION AGREEMENT (SP-1)

                          Dated as of October 18, 2001

                                      among

              SOUTH POINT ENERGY CENTER, LLC, as Facility Lessee,

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

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

                       CALPINE CORPORATION, as Guarantor,

                      SBR OP-1, LLC, as Owner Participant,

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

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

                              SOUTH POINT PROJECT

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

<PAGE>

                               TABLE OF CONTENTS

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

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

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

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

     Section 2.3    Transaction Costs .......................................................................             5

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

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

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

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

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

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

     Section 3.6.   Representations, Warranties and Covenants of the Pass Through Trustees and the Pass
                    Through Company .........................................................................             23

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

     Section 4.1 Completion of the Facility ................................................................             26

     Section 4.2 Operative Documents .......................................................................             26

     Section 4.3 Certificates and the Lessor Notes .........................................................             26

     Section 4.4 Equity Investment .........................................................................             26

     Section 4.5 Organizational Documents ..................................................................             26

     Section 4.6 Representations and Warranties ............................................................             26

     Section 4.7 Defaults, Events of Default, Events of Loss ...............................................             26

     Section 4.8 Regulatory Approvals ......................................................................             26

     Section 4.9 Consents ..................................................................................             27

     Section 4.10 Governmental Actions .....................................................................             28
</TABLE>

                                       i
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     Section 4.11 Insurance ................................................................................             28

     Section 4.12 Ratings ..................................................................................             28

     Section 4.13 Environmental Report .....................................................................             28

     Section 4.14 Surveys ..................................................................................             28

     Section 4.15 Appraisal; Condition of the Facility .....................................................             28

     Section 4.16 Letter from the Appraiser ................................................................             28

     Section 4.17 Other Reports ............................................................................             28

     Section 4.18 Opinion with Respect to Certain Tax Aspects ..............................................             29

     Section 4.19 Opinions of Counsel ......................................................................             29

     Section 4.20 Recordings and Filings ...................................................................             29

     Section 4.21 Conditions to Closing ....................................................................             29

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

     Section 4.23 No Changes in Applicable Law .............................................................             30

     Section 4.24 Registered Agent for the Facility Lessee and the Owner Lessor ............................             30

     Section 4.25 Operating Lease Treatment ................................................................             30

     Section 4.26 Rent Adjustments .........................................................................             30

     Section 4.27 Title Insurance ..........................................................................             30

     Section 4.28 Parent Guaranty ..........................................................................             30

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

     Section 4.30  Lien Search ..............................................................................            31

     Section 4.31  Litigation ...............................................................................            31

     Section 4.32  No Material Adverse Change ...............................................................            31

     Section 4.33  Private Placement Number .................................................................            31

     Section 4.34  Proceedings and Documents ................................................................            31
</TABLE>

                                       ii
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     Section 4.35  No Proposed Tax Law Change ...............................................................            31

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

SECTION 5 COVENANTS OF FACILITY LESSEE AND GUARANTOR .......................................................             32

     Section 5.1   Maintenance of Existence .................................................................            32

     Section 5.2   Merger, Consolidation, Sale of Substantially All Assets ..................................            32

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

     Section 5.4   Assignment of Rights .....................................................................            33

     Section 5.5   Lessor Manager Fees ......................................................................            33

     Section 5.6   Conduct of Business, Properties, Etc .....................................................            33

     Section 5.7   Obligations ..............................................................................            33

     Section 5.8   Books, Records, Access ...................................................................            33

     Section 5.9  Other Information .........................................................................            34

     Section 5.10  Intentionally Deleted ....................................................................            35

     Section 5.11  ERISA ....................................................................................            35

     Section 5.12  Certain Contracts and Agreements .........................................................            35

     Section 5.13  Certain Costs ............................................................................            35

     Section 5.14  Limitations on Liens .....................................................................            36

     Section 5.15  Investments ..............................................................................            36

     Section 5.16  Intentionally Deleted ....................................................................            36

     Section 5.17  Regulations ..............................................................................            36

     Section 5.18  Partnerships .............................................................................            36

     Section 5.19  Dissolution ..............................................................................            36

     Section 5.20  Termination of Operative Documents; Delegation of Authority ..............................            36

     Section 5.21  Name and Location ........................................................................            38
</TABLE>

                                       iii
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     Section 5.22  Use of Facility Site .....................................................................            38

     Section 5.23  Abandonment of Facility ..................................................................            38

     Section 5.24  Taxes, Other Government Charges and Utility Charges ......................................            38

     Section 5.25  Compliance with Laws, Instruments, Etc ...................................................            38

     Section 5.26  PUHCA ....................................................................................            39

     Section 5.27  Further Assurances .......................................................................            39

     Section 5.28  No Subsidiaries ..........................................................................            40

     Section 5.29  Permitted Business .......................................................................            40

     Section 5.30  Support Arrangements .....................................................................            40

     Section 5.31  Insurance ................................................................................            40

     Section 5.32  Tax Status ...............................................................................            40

SECTION 6 COVENANTS OF THE OWNER LESSOR, THE TRUST COMPANY AND THE LESSOR MANAGER ...........................            40

     Section 6.1.  Compliance with the LLC Agreement ........................................................            41

     Section 6.2.  Owner Lessor's Liens .....................................................................            42

     Section 6.3.  Amendments to Operative Documents ........................................................            42

     Section 6.4.  Transfer of the Owner Lessor's Interest ..................................................            42

     Section 6.5.  Owner Lessor; Lessor Estate ..............................................................            42

     Section 6.6.  Limitation on Indebtedness and Actions ...................................................            42

     Section 6.7.  Change of Location .......................................................................            42

     Section 6.8.  Bankruptcy of Owner Lessor ...............................................................            42

SECTION 7 COVENANTS OF THE OWNER PARTICIPANT ................................................................            43

     Section 7.1   Restrictions on Transfer of Member Interest ..............................................            43

     Section 7.2   Owner Participant's Liens ................................................................            45

     Section 7.3   Amendments or Revocation of LLC Agreement ................................................            45
</TABLE>

                                       iv
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                               TABLE OF CONTENTS  (continued)

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     Section 7.4   Bankruptcy Filings .......................................................................            45

     Section 7.5   Instructions .............................................................................            46

     Section 7.6   Right of First Refusal ...................................................................            46

     Section 7.7   Prohibition on Fundamental Changes .......................................................            46

     Section 7.8   Appointment of Successor Lessor Manager ..................................................            47

     Section 7.9   Cooperation ..............................................................................            47

SECTION 8 COVENANTS OF THE INDENTURE TRUSTEE AND THE PASS THROUGH TRUSTEES ..................................            47

     Section 8.1   Indenture Trustee's Liens ................................................................            48

     Section 8.2   Pass Through Trustees' Covenant Not to Transfer Lessor Notes .............................            48

SECTION 9 INDEMNIFICATION ...................................................................................            48

     Section 9.1   General Indemnity ........................................................................            48

     Section 9.2   General Tax Indemnity ....................................................................            55

SECTION 10 FACILITY LESSEE'S RIGHT OF QUIET ENJOYMENT .......................................................            64

SECTION 11 SUPPLEMENTAL FINANCING IMPROVEMENTS; OPTIONAL REFINANCINGS .......................................            65

     Section 11.1  Financing Improvements ...................................................................            65

     Section 11.2  Optional Refinancing of Lease Debt .......................................................            66

     Section 11.3  Cooperation ..............................................................................            67

SECTION 12 CERTAIN ADJUSTMENTS TO PERIODIC RENT, TERMINATION VALUE AND OTHER AMOUNTS ........................            68

SECTION 13 TRANSFER OF THE FACILITY LESSEE OWNERSHIP; SPECIAL LESSEE TRANSFERS; EXERCISE OF EXTENSION OF
           SOUTH POINT GROUND LEASE ........................................................................             69

     Section 13.1  Transfer of the Facility Lessee Ownership ................................................            69

     Section 13.2  Special Facility Lessee Transfers ........................................................            71

     Section 13.3  Exercise of Extension of South Point Ground Lease ........................................            71

SECTION 14 MISCELLANEOUS ...................................................................................             73
</TABLE>

                                       v
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     Section 14.1  Consents; Cooperation ....................................................................            73

     Section 14.2  Successor Owner Lessor ...................................................................            73

     Section 14.3  Bankruptcy of Lessor Estate ..............................................................            73

     Section 14.4  Amendments and Waivers ...................................................................            73

     Section 14.5  Notices .................................................................................             73

     Section 14.6  Survival ................................................................................             78

     Section 14.7  Successors and Assigns ..................................................................             78

     Section 14.8  Business Day ............................................................................             78

     Section 14.9  Governing Law ...........................................................................             78

     Section 14.10 Severability ............................................................................             78

     Section 14.11 Counterparts ............................................................................             78

     Section 14.12 Headings and Table of Contents ..........................................................             79

     Section 14.13 Limitation of Liability .................................................................             79

     Section 14.14 Consent to Jurisdiction; Waiver of Trial by Jury; Process Agent .........................             80

     Section 14.15 Further Assurances ......................................................................             81

     Section 14.16 Effectiveness ...........................................................................             81

     Section 14.17 Measuring Life ..........................................................................             81

     Section 14.18 No Partnership, Etc .....................................................................             81

     Section 14.19 Entire Agreement ........................................................................             81

     Section 14.20 Public Utility Regulation ...............................................................             82

     Section 14.21 Confidentiality of Information ..........................................................             82

     Section 14.22 Reliance ................................................................................             83

     Section 14.23 Amendments, Etc .........................................................................             83

     Section 14.24 South Point Ground Lease ................................................................             83

</TABLE>

                                          vi

<PAGE>

APPENDICES:

    Appendix A   Definitions and Rules of Interpretation

<TABLE>
<CAPTION>
<S>                      <C>
SCHEDULES:

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

EXHIBITS:

    Exhibit A            Description of Facility
    Exhibit B            Form of Assignment Agreement (SP-1)
    Exhibit C            Form of Facility Lease Agreement
    Exhibit D            Form of Facility Site Lease
    Exhibit E            Intentionally Omitted
    Exhibit F            Form of Pass Through Trust Agreement
    Exhibit G            Form of OP Parent Guaranty
    Exhibit H            Form of Calpine Guaranty
    Exhibit I            Form of Collateral Trust Indenture
    Exhibit J            Form of OP Assignment and Assumption Agreement
    Exhibit K            List of Competitors
    Exhibit L            Form of Guarantor Assignment and Assumption Agreement
    Exhibit M            Form of Consents
</TABLE>

                                      vii

<PAGE>

                             PARTICIPATION AGREEMENT

          This PARTICIPATION AGREEMENT, dated as of October 18, 2001 (as
     amended, supplemented or otherwise modified from time to time, in
     accordance with the provisions hereof, this "Participation Agreement" or
     this "Agreement"), among (i) SOUTH POINT ENERGY CENTER, LLC (herein,
     together with its successors and permitted assigns, called the "Facility
     Lessee"), a limited liability company organized under the laws of the
     State of Delaware, (ii) CALPINE CORPORATION, a Delaware corporation, as
     Guarantor (together with its successors and permitted assigns, the
     "Guarantor") under the Calpine Guaranty (SP-1), (the "Calpine Guaranty"),
     (iii) SOUTH POINT OL-1, LLC, a Delaware limited liability company (the
     "Owner Lessor"), (iv) SBR OP-1, LLC, a Delaware limited liability company
     (herein, together with its successors and permitted assigns, called the
     "Owner Participant"), (v) STATE STREET BANK AND TRUST COMPANY OF
     CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
     organized and existing under the laws of the United States, not in its
     individual capacity, except as expressly provided herein, but solely as
     trustee under the Collateral Trust Indenture (herein in its capacity as
     trustee under the Collateral Trust Indenture, together with its successors
     and permitted assigns, called the "Indenture Trustee", and herein in its
     individual capacity, together with its successors and permitted assigns,
     called the "Lease Indenture Company"), (vi) STATE STREET BANK AND TRUST
     COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
     association organized and existing under the laws of the United States,
     not in its individual capacity, except as expressly provided herein, but
     solely as trustee under each of the Pass Through Trust Agreements (herein
     in its capacity as trustee under the Pass Through Trust Agreements, the
     "Pass Through Trustees", and herein in its individual capacity, together
     with its successors and permitted assigns, the "Pass Through Company"),
     and (vii) WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national
     banking association organized and validly existing under the laws of the
     United States, not in its individual capacity except as expressly provided
     herein, but solely as independent manager under the LLC Agreement (herein
     in its capacity as independent manager under the LLC Agreement, together
     with its successors and permitted assigns, called the "Lessor Manager",
     and herein in its individual capacity, together with its successors and
     permitted assigns, called the "Trust Company").

                                   WITNESSETH:

          WHEREAS, (a) CCFC, an indirect, wholly-owned subsidiary of Calpine,
will, as of the Closing Date, own a 530 MW gas-fired combined cycle merchant
power plant located near Bullhead, Arizona and more fully described in Exhibit
A hereto ("Facility");

          WHEREAS, CCFC desires to assign and transfer to the Owner Lessor the
Undivided Interest and the Ground Interest pursuant to the Assignment Agreement;

<PAGE>

          WHEREAS, the Owner Participant desires to cause the Owner Lessor to
accept such assignment and transfer of the Undivided Interest and the Ground
Interest from CCFC pursuant to the Assignment Agreement, and to lease the
Undivided Interest and the Ground Interest to the Facility Lessee pursuant to
the Facility Lease and the Facility Site Lease, respectively;

          WHEREAS, the Facility Lessee desires to lease the Undivided Interest
and lease the Ground Interest from the Owner Lessor pursuant to the Facility
Lease and the Facility Site Lease, respectively;

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

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

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

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

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

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

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

                                       2

<PAGE>

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

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

DEFINITIONS; INTERPRETATION OF THIS PARTICIPATION AGREEMENT

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

PARTICIPATION; CLOSING DATE; TRANSACTION COSTS

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

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

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

the Owner Lessor agrees to lease the Undivided Interest and the Ground Interest
     to the Facility Lessee on the terms and conditions set forth in the
     Facility Lease and Facility Site Lease; the Facility Lessee agrees to
     lease the Undivided Interest and the Ground Interest from the Owner
     Lessor, and each agrees to execute and deliver the respective Facility
     Lease and the Facility Site Lease;

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

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

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

                                       3

<PAGE>

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

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

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

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

Closing Date; Procedure for Participation.

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

Procedures for Funding. Unless the Closing Date shall have been postponed
     pursuant to Section 2.2(c), subject to the terms and conditions of this
     Participation Agreement, the Owner Participant shall make the Owner
     Participant's Commitment available not later than 10:00 a.m., New York
     City time, on the Scheduled Closing Date, by transferring or delivering
     such amount, in funds immediately available on such Scheduled Closing
     Date, to the Owner Lessor in New York, New York.

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

                                       4

<PAGE>

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

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

Transaction Costs.

If the transactions contemplated by this Agreement are consummated, all
     Transaction Costs up to an amount equal to US$2,370,417, which shall be
     substantiated or otherwise supported in reasonable detail (provided that
     legal bills may be redacted to preserve attorney-client privilege), shall
     be paid within 10 days after the Closing Date by the Owner Lessor (with
     funds provided by the Owner Participant), assuming all invoices have been
     approved by Calpine and received by the Owner Lessor by 7 days after the
     Closing Date. All other

                                       5

<PAGE>

     Transaction Costs, fees, costs and expenses incurred by the Facility
     Lessee, the Owner Lessor and the Owner Participant shall be paid by
     Calpine. If the Overall Transaction is not consummated for any reason
     (including as a result of the Facility Lessee terminating this Agreement
     pursuant to Section 12(a)), then Calpine shall bear all Transaction Costs;
     provided, however, that Calpine shall not be obligated to pay Transaction
     Costs incurred by the Owner Participant if the Overall Transaction is not
     consummated on the basis of the provisions of this Agreement due to a
     failure of the Owner Participant to satisfy any condition to the Closing
     required to be satisfied by the Owner Participant.

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

REPRESENTATIONS AND WARRANTIES

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

Due Incorporation, etc. The Facility Lessee is a limited liability company duly
     organized, validly existing, and in good standing under the laws of the
     State of Delaware and CCFC is a limited partnership duly constituted,
     validly existing, and in good standing under the laws of the State of
     Delaware. Both the Facility Lessee and CCFC are duly licensed or
     qualified and in good standing in each jurisdiction where the character of
     their respective properties or the nature of their activities makes such
     qualification necessary, and each of the Facility Lessee and CCFC has the
     power and authority to (x) own or hold under lease the property it
     purports to own or hold under lease, (y) carry on its business as now
     being conducted and as presently proposed to be conducted and (z) take all
     actions as may be necessary to consummate the transactions contemplated
     hereunder and under the other Operative Documents to which each is a
     party. Each of the Facility Lessee and CCFC is an indirect wholly-owned
     subsidiary of Calpine.

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

          1.   Non-Contravention. (1)  The execution, delivery and performance
               by the Facility Lessee of this Agreement and each of the other
               Operative

                                       6

<PAGE>

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

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

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

Government Actions. (1) The Facility Lessee has all Permits with or from any
   Governmental Entity or under any Applicable Law required (x) for the due
   execution, delivery or performance by the Facility Lessee of this Agreement,
   and the other Operative Documents to which the Facility Lessee is or will be
   a party or (y) without regard to any other transactions or other actions of
   the Owner Participant, the Owner Lessor or any Affiliate of any of them or
   any assignee or transferee of any of the Owner Participant, the Owner Lessor
   (or any Affiliate of any transferee or assignee) and assuming that none of
   the Owner Participant, the Owner Lessor or any Affiliate of any of them or
   any assignee or transferee of any of the Owner Participant (or any Affiliate
   of any such transferee or assignee) is an "electric utility" or a "public
   utility" or a "public utility holding company" or any similar entity subject
   to public utility regulation under any Applicable Law immediately prior to
   the Closing, with respect to the participation by the Owner Participant, the
   Owner Lessor in the Overall Transaction, other than (i) any Permit where the
   failure to obtain or maintain such Permit

                                       7

<PAGE>

     would not be reasonably likely to result in a Material Adverse Effect,
     (ii) the FERC Orders, (iii) as may be required under Applicable Law
     providing for the supervision or regulation of the Owner Participant, the
     Owner Lessor or any Affiliate of any of them as a result of investing,
     lending or other commercial activity in which the Owner Participant, the
     Owner Lessor or any Affiliate of any of them is or may be engaged other
     than the transactions contemplated hereby or by any of the other Operative
     Documents, (iv) as may be required under existing Applicable Laws to be
     obtained, given, accomplished or renewed at any time, or from time to
     time, in each case, after the Closing Date and which the Facility Lessee
     has no reason to believe will not be timely obtained and the lack of which
     would not reasonably be expected to have a Material Adverse Effect or
     involve any danger of criminal or material civil liability being incurred
     by the Owner Participant, the Owner Lessor, the Indenture Trustee or the
     Pass Through Trustees, (v) in connection with any modification to or
     rebuilding or replacement of the Facility or any portion thereof that may
     occur in the future, (vi) as may be required in connection with any
     refinancing of the Lessor Notes or the Certificates or the issuance of
     Additional Lessor Notes or Additional Certificates, (vii) as may be
     required in consequence of any transfer of the Member Interest or any
     transfer of the Undivided Interest or the Owner Lessor's Interest, or any
     part thereof by the Owner Lessor or the exercise by any such party of
     dispossessory remedies under the Operative Documents or any relinquishment
     of the use or operation of the Facility by the Facility Lessee, (viii)
     appropriate filing and recording to perfect the Lien of the Collateral
     Trust Indenture, if required, and the ownership and leasehold interests
     conveyed pursuant to this Agreement, or (ix) as may be required under any
     Applicable Law enacted or adopted after the date hereof.

          (2)  CCFC has all Permits with, any Governmental Entity or under any
Applicable Law required for the due execution, delivery or performance by CCFC
of the Operative Documents to which CCFC is or will be a party.

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

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

Location of Chief Executive Office and Principal Place of Business, etc. (1)
     The chief executive office and principal place of business of the Facility
     Lessee and the office where the Facility Lessee keeps its company records
     concerning the Facility, the Undivided Interest, the Ground

                                       8

<PAGE>

     Interest, the Facility Site and the Operative Documents is located at: c/o
     Calpine Corporation, 50 West San Fernando Street, 5th Floor, San Jose, CA
     95113.

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

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

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

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

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

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

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

                                       9

<PAGE>

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

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

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

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

          (1)   Neither the Facility Lessee nor CCFC has received or has Actual
Knowledge of any written notice, letter, citation, order, warning, complaint,
inquiry, claim or demand from any Governmental Entity or any other Person that:
(i) there has been a Release, or there is a threat of Release, of Hazardous
Substances in, on, under or from the Facility or the Facility Site or any of
the Easement; (ii) the Facility Lessee or any other Calpine Party is or is
asserted to be liable, in whole or in part, for the costs of cleaning up,
remedying or responding at any location (including any location at which any
Hazardous Substances have been generated, stored, treated or disposed by or on
behalf of the Facility Lessee or such other Calpine Party) to a Release or
threatened Release of any Hazardous Substance generated, used or stored at or
Released in, on, under or from the Facility or the Facility Site or any of the
Easement; (iii) the Facility or the Facility Site is subject to a Lien in favor
of any Governmental Entity in response to a Release or threatened Release of
Hazardous Substances or (iv) the Facility or the Facility Site or any of the
Easement is or is asserted to be in violation of or not in compliance with any
Environmental Law, in any case with respect to clauses (ii), (iii) or (iv),
which could reasonably be expected to have a Material Adverse Effect;

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

          (3)   To the Facility Lessee's or CCFC's Actual Knowledge, there is
not and has not been any Environmental Condition (A) at, on, under or from the
Facility or the Facility Site or any of the Easement, or (B) at, on, under or
from any other location resulting from or arising in connection with the
operation by any Person of the Facility or the Facility Site or any of the
Easement, that in each case could reasonably be expected to have a Material
Adverse Effect or

                                       10

<PAGE>

involve any danger of (i) foreclosure, sale, forfeiture or loss of, or
imposition of a material lien on, such Facility or the Facility Site or any of
such Easement, (ii) the impairment of the ownership (or leasehold or easement
interest in), use, operation or, maintenance of the Facility or the Facility
Site or any of the Easement in any material respect, or (iii) any criminal or
material civil liability being incurred by the Owner Participant, the Owner
Lessor, the Lessor Manager, the Indenture Trustee or the Pass Through Trustees.

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

Operation and Use. Assuming the Facility will continue to be operated
     substantially as operated as of the Closing Date, the rights and interests
     to be possessed on the Closing Date by the Facility Lessee with respect to
     the Undivided Interest, the Ground Interest and the Easement and based
     upon the Facility Lessee's reasonable expectations and on Applicable Law
     in effect on and as of the Closing Date, the rights and interests made
     available to the Owner Lessor pursuant to the Operative Documents and the
     South Point Ground Lease and the rights contemplated by the Facility Lease
     to be made available under such Operative Documents and the South Point
     Ground Lease, permit on a commercially practicable basis during the
     Facility Lease Term and the period following the expiration or termination
     of the Facility Lease Term, as applicable, until the end of the Facility's
     useful life as set forth in the Closing Appraisal, (i) the location,
     occupation, interconnection, maintenance and repair of each Facility, (ii)
     the use, operation and possession of the Facility, (iii) as of the Closing
     Date, the use, operation, possession, maintenance, replacement, renewal
     and repair of all Improvements required to be made to the Facility, (iv)
     adequate ingress to and egress from the Facility in connection with the
     ownership, use, operation, possession, maintenance or repair of the
     Facility and (v) the transmission of electricity from the Facility
     substantially in the manner currently transmitted as of the Closing Date.

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

                                       11

<PAGE>

     either in any case or in the aggregate, would reasonably be expected to
     have a Material Adverse Effect.

Jurisdiction. In accordance with Section 14.14 hereof, the Facility Lessee has
     validly submitted to the jurisdiction of the Supreme Court of the State of
     New York, New York County and the United States District Court for the
     Southern District of New York.

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

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

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

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

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

                                       12

<PAGE>

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

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

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

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

Notices. To the Facility Lessee's Actual Knowledge, (i) there are no outstanding
     written notices from any Governmental Entity of any violation of, or that
     the Facility or Facility Site is not in compliance with, any and all
     Applicable Laws relating to the Facility and Facility Site or the
     ownership, use, occupancy and operation thereof and (ii) there are no
     outstanding written notices that any repairs or work or capital
     improvements are required to be done at or with respect to the Facility or
     Facility Site by any Governmental Entity or by any insurance company which
     currently issues any insurance to the Facility Lessee or by any board of
     fire underwriters or other body exercising similar functions, except, in
     either case with respect to (i) or (ii) above, where such violation,
     noncompliance or repairs could not reasonably be expected to have a
     Material Adverse Effect.

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

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

                                       13

<PAGE>

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

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

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

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

                                       14

<PAGE>

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

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

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

Fully Taxable. As of the Closing Date, each Person owning an Ownership Interest
     (i) is fully taxable at the highest federal tax rate and (ii) expects to be
     fully taxable at the highest federal tax rate throughout the Facility Lease
     Term; for the avoidance of doubt, this representation is not intended to be
     construed as nor shall it be deemed to be a guaranty as to any such
     Person's future taxation.

Commencement of Commercial Operations and Compliance. To the knowledge of the
     Facility Lessee or CCFC, the Facility has commenced commercial operations
     and is currently capable of producing at least 530 MW of capacity and
     complies in all material respects with the other specifications set forth
     in the purchase and construction contracts for the Facility.

South Point Ground Lease. The South Point Ground Lease is in full force and
     effect and neither CCFC nor, to the Actual Knowledge of the Facility Lessee
     or CCFC, the Tribe is in default thereunder; all of the rights, title and
     interest of CCFC in, to and under the South Point Ground Lease assigned
     pursuant to the Assignment Agreement have been transferred free and clear
     of any and all Liens other than Permitted Liens. Prior to the execution and
     delivery

                                       15

<PAGE>

     of the Assignment Agreement by CCFC and as of and after the time CCFC
     became a party to the South Point Ground Lease, the South Point Ground
     Lease was enforceable against CCFC in accordance with its respective
     terms, except as the same may be limited by applicable bankruptcy,
     insolvency, reorganization, moratorium or other similar laws affecting the
     rights of creditors generally and by general principles of equity; the
     execution, delivery and performance of the South Point Ground Lease by any
     past or present Calpine Party (including CCFC) party thereto (i) did not
     and does not contravene any Applicable Law binding on such Calpine Party
     or its property, (ii) does not constitute a default by such Calpine Party
     under, or result in the creation of any Lien upon the property of such
     Calpine Party (other than pursuant to any Operative Document) under any
     indenture, mortgage or other material contract, agreement or instrument to
     which such Calpine Party is a party or by which such Calpine Party or any
     of its property is bound, (iii) does not contravene any Organic Document
     of such Calpine Party, (iv) does not require the consent or approval of
     any Person which has not already been obtained, in each case with respect
     to clauses (i), (ii) and (iv) above, which would reasonably be expected to
     have a Material Adverse Effect, or (v) does not create a Lien on the South
     Point Ground Lease; the Facility Lessee has all Permits with or from any
     Governmental Entity or under Applicable Law required for the performance
     of the South Point Ground Lease by the Owner Lessor or the Facility
     Lessee, other than (i) any Permit where the failure to obtain or maintain
     such Permit would not be reasonably likely to result in a Material Adverse
     Effect, (ii) the FERC Orders, (iii) as may be required under Applicable
     Law providing for the supervision or regulation of the Owner Participant,
     the Owner Lessor or any Affiliate of any of them as a result of investing,
     lending or other commercial activity in which the Owner Participant, the
     Owner Lessor or any Affiliate of any of them is or may be engaged other
     than the transactions contemplated hereby or by performance of the South
     Point Ground Lease upon and after the assignment thereof to the Owner
     Lessor pursuant to the Assignment Agreement, (iv) as may be required under
     existing Applicable Laws to be obtained, given, accomplished or renewed at
     any time, or from time to time, in each case, after the Closing Date and
     which the Facility Lessee has no reason to believe will not be timely
     obtained and the lack of which would not reasonably be expected to have a
     Material Adverse Effect or involve any danger of criminal or material
     civil liability being incurred by the Owner Participant, the Owner Lessor,
     the Indenture Trustee or the Pass Through Trustees, (v) in connection with
     any modification to or rebuilding or replacement of the Facility or any
     portion thereof that may occur in the future, (vi) as may be required in
     connection with any refinancing of the Lessor Notes or the Certificates or
     the issuance of Additional Lessor Notes or Additional Certificates, (vii)
     as may be required in consequence of any transfer of the Member Interest
     or any transfer of the Undivided Interest or the Owner Lessor's Interest,
     or any part thereof by the Owner Lessor or the exercise by any such party
     of dispossessory remedies under the Operative Documents or any
     relinquishment of the use or operation of the Facility by the Facility
     Lessee, (viii) appropriate filing and recording to perfect the Lien of the
     Collateral Trust Indenture, if required, and the ownership and leasehold
     interests conveyed pursuant to this Agreement, or (ix) as may be required
     under any Applicable Law enacted or adopted after the date hereof.

                                       16

<PAGE>

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

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

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

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

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

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

                                       17

<PAGE>

     is or will be a party, other than any such authorization or approval or
     other action or notice or filing as has been duly obtained, taken or given.

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

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

Location of Registered Office; Location of Corporate Records. The registered
     office of the Owner Lessor is 1209 Orange Street, Wilmington, Delaware
     19801, and the Owner Lessor will keep its corporate records concerning the
     Facility, the Facility Site, the Operative Documents and the South Point
     Ground Lease with the Lessor Manager, at the Lessor Manager's address set
     forth in Section 14.5 hereof.

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

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

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

Due Authorization, Enforceability; etc. (1) (i) The LLC Agreement has been duly
     authorized, executed and delivered by the Trust Company, and (ii) assuming
     the due authorization, execution and delivery of the LLC Agreement by the
     Owner Participant, the LLC Agreement constitutes the legal, valid and
     binding obligation of the Trust Company, enforceable against

                                       18

<PAGE>

     it in its individual capacity or as Lessor Manager, as the case may be, in
     accordance with its terms, except as may be limited by bankruptcy,
     insolvency, fraudulent conveyance, reorganization, arrangement, moratorium
     or other laws relating to or affecting the rights of creditors generally
     and by general principals of equity.

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

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

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

Litigation. There is no pending or, to the Actual Knowledge of the Trust
     Company, threatened, action, suit, investigation or proceeding against the
     Trust Company either in its individual capacity or as Lessor Manager, as
     the case may be, before any Governmental Entity which (i) questions the
     validity of the Operative Documents or the ability of the Owner Lessor to

                                       19

<PAGE>

     perform its obligations under the Operative Documents to which it is or
     will be a party or (ii) if determined adversely to it, could reasonably be
     expected to materially adversely affect the ability of the Trust Company
     either in its individual capacity or as Lessor Manager, as the case may be,
     to perform its obligations under the LLC Agreement, this Agreement or any
     other Operative Document to which it is or will be a party or would
     materially adversely affect the Facility, the Facility Site or any interest
     therein or part thereof or the Lien of the Indenture Trustee on the
     Indenture Estate.

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

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

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

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

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

Non-Contravention. The execution and delivery by the Owner Participant of this
     Agreement, the LLC Agreement, the Tax Indemnity Agreement and any other
     Operative Document to which the Owner Participant is or will be a party,
     the consummation by the Owner Participant of the transactions contemplated
     hereby and thereby, and the compliance by the Owner Participant with the
     terms and provisions hereof and thereof, do not and will not contravene any
     Applicable Law binding on the Owner Participant, or its organizational
     documents, or contravene the provisions of, or constitute a default under
     any indenture, mortgage or other material contract, agreement or instrument
     to which the Owner Participant is a party or by

                                       20

<PAGE>

     which the Owner Participant or its property is bound or result in the
     creation of any Owner Participant's Lien (other than any Lien created
     under any Operative Document) upon the Lessor Estate, the Facility Site or
     any interest therein or part thereof (it being understood that no
     representation or warranty is being made as to (i) any Applicable Laws
     relating to the particular nature of the Facility or the Facility Site or
     (ii) other than its representations set forth in Section 3.4(g), ERISA or
     Section 4975 of the Code).

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

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

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

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

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

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

                                       21

<PAGE>

     same offering as the offering of the Member Interest, the Lessor Notes or
     the Certificates or any part thereof or solicited any offer to acquire any
     of the same in violation of the registration requirements of Section 5 of
     the Securities Act.

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

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

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

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

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

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

          (2)   (i) Each of the other Operative Documents to which the
Indenture Trustee is or will be a party has been or when executed and delivered
will be duly authorized, executed and delivered by the Indenture Trustee, and
(ii) assuming the due authorization, execution and delivery of each of the other
Operative Documents by each party thereto other than the Indenture Trustee, each
of the other Operative Documents to which the Indenture Trustee is or will be a
party constitutes or when executed and delivered will be a legal, valid and
binding obligation of the Indenture Trustee, enforceable against the Indenture
Trustee in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the rights of creditors generally and by general principles of
equity.

                                       22

<PAGE>

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

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

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

          D.   Representations, Warranties and Covenants of the Pass Through
               Trustees and the Pass Through Company. The Pass Through Company
               and the Pass Through

                                       23

<PAGE>

               Trustees hereby severally represent and warrant that as of the
               date of execution and delivery hereof and as of the Closing
               Date:

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

Due Authorization, Enforceability; etc.

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

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

Non-Contravention. The execution and delivery by the Pass Through Company, in
     its individual capacity or as Pass Through Trustee, as the case may be, of
     this Agreement and the other Operative Documents to which it is or will be
     a party, the consummation by the Pass Through Company, in its individual
     capacity or as Pass Through Trustee, as the case may be, of the
     transactions contemplated hereby and thereby, and the compliance by the
     Pass Through Company, in its individual capacity or as Pass Through
     Trustee, as the case may be, with the terms and provisions hereof and
     thereof, do not and will not contravene any Applicable Law of the United
     States of America or the State of Connecticut governing the Pass Through
     Company or the banking or trust powers of the Pass Through Company, or its
     organizational documents or by-laws, or contravene the provisions of, or
     constitute a default by the Pass Through Company under, or result in the
     creation of any Lien attributable to the

                                       24

<PAGE>

     Pass Through Company upon the Certificates or any indenture, mortgage or
     other material contract, agreement or instrument to which the Pass Through
     Company is a party or by which the Pass Through Company or its property is
     bound which would materially adversely affect the ability of the Pass
     Through Company, in its individual capacity or as Pass Through Trustee, as
     the case may be, to perform its obligations under this Agreement or the
     other Operative Documents to which it is a party or would materially
     adversely affect the Facility, the Facility Site or any interest therein
     or part thereof or the security interest of any Pass Through Trustee in
     the Indenture Estate; provided, however, that no representation is made
     with respect to the right, power or authority of the Pass Through Company
     or any Pass Through Trustee to act as operator of the Facility following a
     Lease Event of Default.

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

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

CLOSING CONDITIONS

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

                                       25

<PAGE>

Completion of the Facility. The Facility shall have commenced commercial
operations and shall currently be capable of producing at least 530 MW of
capacity and shall comply in all material respects with the other specifications
set forth in the purchase and construction contracts for the Facility.

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

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

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

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

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

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

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

                                       26

<PAGE>

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

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

                                       27

<PAGE>

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

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

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

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

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

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

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

Other Reports. The Owner Participant, the Indenture Trustee and the Pass
Through Trustees shall have received copies of the reports of the Engineering
Consultant, the Insurance

                                       28

<PAGE>

Consultant, and the Power Market Consultant, which reports shall be dated as of
the Closing Date and shall otherwise each be in form and substance reasonably
satisfactory to the recipients.

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

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

     H.   Recordings and Filings. All filings and recordings listed on Schedule
4.20 hereto shall have been duly made and all filing, recordation, transfer and
other fees payable in connection therewith shall have been paid; and the filing
of all precautionary financing statements under the (x) Uniform Commercial Code
of Arizona and Delaware and (y) Fort Mojave Indian Reservation Uniform
Commercial Code ("FMUCC") and FMUCC First Amendments 1994 Amendment, and any
other documents as may be reasonably requested by counsel to the Owner
Participant, the Indenture Trustee or the Pass Through Trustees to perfect (i)
the Owner Lessor's Interest and the Easement, or any part thereof or interest
therein and (ii) and the Lien of the Indenture Trustee on the Indenture Estate.

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

                                       29

<PAGE>

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

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

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

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

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

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

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

                                       30

<PAGE>

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

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

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

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

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

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

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

                                       31

<PAGE>

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

COVENANTS OF FACILITY LESSEE AND GUARANTOR

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

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

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

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

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

                                       32

<PAGE>

     Owner Lessor, the Lessor Manager, the Indenture Trustee, the Pass Through
     Trustees and the Certificateholders in connection with any transaction
     contemplated by this Section 5.2.

Guaranty and Contingent Obligations. The Facility Lessee will not create, incur,
assume or suffer to exist any Indebtedness (including without limitation any
guaranty or other contingent obligations) except (i) by reason of endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of the Facility Lessee's business, (ii) indemnities in respect
of unfiled mechanics' liens and other liens permitted by clause (d) of the
definition of "Permitted Liens", (iii) contingent obligations set forth in, or
incurred in connection with, or indemnities set forth in, the Operative
Documents and the South Point Ground Lease, (iv) unsecured indemnities provided
by, and other unsecured contingent obligations incurred by the Facility Lessee
in connection with either (x) Easement relating to its applicable interest in
the Facility or the Facility Site or (y) any contract, agreement or other
document or instrument relating to the South Point project which is entered into
in the ordinary course of the Facility Lessee's business, (v) customary
indemnities in favor of the title insurers providing the title policies covering
the Facility Site or any portion thereof or any easement or appurtenant right
relating thereto in respect of claims by the holder of mechanics' liens, (vi)
the indemnities referred to in Section 9.1 and 9.2 of the Participation
Agreement or pursuant to the Tax Indemnity Agreement and (vii) unsecured
Indebtedness incurred in accordance with Section 11.1 or 11.2 hereof.

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

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

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

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

     K.   Books, Records, Access. The Facility Lessee shall maintain or cause
to be maintained adequate books, accounts and records with respect to itself,
the Facility and Facility Site and prepare all financial statements required
hereunder in accordance with GAAP and in

                                       33

<PAGE>

compliance with the regulations of any Governmental Entity having jurisdiction
thereof, and permit employees, agents and representatives of the Owner Lessor,
the Owner Participant, and, so long as the Lien of the Collateral Trust
Indenture shall have not been terminated or discharged, the Indenture Trustee,
the Pass Through Trustees and the Certificateholders, and such parties'
independent consultants, at all reasonable times during normal business hours
and upon reasonable prior notice and at no risk or (except during the existence
of a Lease Default or Lease Event of Default) expense to the Facility Lessee to
inspect, the Facility and Facility Site, to examine or audit all of or any of
the Facility Lessee's books, accounts and records and make copies and memoranda
thereof and, together with such consultants, to observe the operation,
maintenance and repair of the Facility; provided, however, any such inspection
shall be conducted in accordance with Section 12 of the Facility Lease.

Other Information.

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

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

                                       34

<PAGE>

     L.   Intentionally Deleted.

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

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

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

                                       35

<PAGE>

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

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

     N.   Intentionally Deleted

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

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

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

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

                                       36

<PAGE>

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

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

                                       37

<PAGE>

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

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

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

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

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

                                       38

<PAGE>

Pass Through Company or any Certificateholder being subjected to any
unindemnified civil liability or of the Owner Participant or the Owner Lessor
being subject to regulation as a public utility under Applicable Law, or (v)
any Material Adverse Effect.

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

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

                                       39

<PAGE>

Lessee's reasonable expense, enforce, in its own name, or the Facility Lessee's
name, such rights of the Facility Lessee.

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

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

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

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

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

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

                                       40

<PAGE>

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

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

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

                                       41

<PAGE>

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

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

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

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

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

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

     B.   Bankruptcy of Owner Lessor.

          Each of the Trust Company, the Lessor Manager and the Owner Lessor
hereby agrees severally and as to itself only that it shall not voluntarily
take any action that shall, or cause any action to be taken that is intended
to, submit the Owner Lessor, as debtor, to any proceeding under any Applicable
Law involving bankruptcy, insolvency, reorganization or other

                                       42

<PAGE>

laws affecting the rights of creditors generally unless a Lease Event of
Default or a Significant Lease Default shall have occurred and be continuing
(in which case, if the Lien of the Collateral Trust Indenture shall not have
been discharged, the Trust Company or the Owner Lessor shall not take any such
action unless the Indenture Trustee shall have given its prior written consent
to such action in its sole discretion.

COVENANTS OF THE OWNER PARTICIPANT

Restrictions on Transfer of Member Interest.

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

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

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

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

                                       43

<PAGE>

     against the Facility Lessee or any Affiliate of the Facility Lessee
     without the consent of the Facility Lessee; and

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

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

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

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

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

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

                                       44

<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       46

<PAGE>

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

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

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

COVENANTS OF THE INDENTURE TRUSTEE AND THE PASS THROUGH TRUSTEES

                                       47

<PAGE>

Indenture Trustee's Liens. Neither the Lease Indenture Company, nor the
Indenture Trustee will directly or indirectly create, incur, assume or suffer to
exist any Indenture Trustee's Lien attributable to it and arising out of events
or conditions not related to its rights in the Indenture Estate or the
administration thereof, and will promptly notify the Owner Participant, the
Lessor Manager, the Owner Lessor and the Facility Lessee of the imposition of
any such Lien of which it has Actual Knowledge and shall promptly (and in any
event within 30 days of obtaining Actual Knowledge of such Lien), at its own
expense, take such action as may be necessary to duly discharge such Indenture
Trustee's Lien.

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

INDEMNIFICATION

General Indemnity.

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

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

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

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

                                       48

<PAGE>

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

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

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

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

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

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

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

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

the continuing fees (if any) and expenses of the Lease Indenture Company, the
     Indenture Trustee, the Pass Through Company, the Pass Through Trustees,
     (including the reasonable compensation and expenses of their respective
     counsel, accountants and other professional

                                       49

<PAGE>

     persons) arising out of the discharge of their respective duties as
     provided in the Operative Documents or the South Point Ground Lease; or

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

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

(A)  acts, omissions or events with respect to the Facility first occurring
     after expiration or early termination of the Facility Lease and, where
     required by the Facility Lease, surrender to the Owner Lessor or its
     successor of its interest in the Facility and Facility Site in compliance
     with the provisions of the Facility Lease and the Facility Site Lease
     respectively or (B) if the Closing Date does not occur, acts, omission or
     events occurring after the date set forth in Section 2.2(e);

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

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

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

                                       50

<PAGE>

                    breach by such Indemnitee or a Related Party of any
                    covenant contained in any Operative Document or any breach
                    by such Indemnitee or a Related Party of any covenant
                    contained in any Operative Document made by such Indemnitee
                    or Related Party except to the extent attributable to any
                    breach by the Facility Lessee or any other Calpine Party of
                    any covenant, representation or warranty contained in any
                    Operative Document;

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

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

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

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

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

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

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

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

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

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

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<PAGE>

Insured Claims. Subject to the provisions of paragraph (e) of this Section 9.1,
     in the case of any Claim indemnified by the Facility Lessee hereunder which
     is covered by a policy of insurance maintained by the Facility Lessee, each
     Indemnitee agrees, unless it and each other Indemnitee shall waive its
     rights to indemnification (for itself and each Related Party thereto) in a
     manner reasonably acceptable to the Facility Lessee, to cooperate, at the
     sole cost and expense of the Facility Lessee, with insurers in exercise of
     their rights to investigate, defend or compromise such Claim.

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

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

                                       52

<PAGE>

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

                                       53

<PAGE>

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

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

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

                                       54

<PAGE>

General Tax Indemnity.

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

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

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

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

the Facility Lease, or any other Operative Document, the execution or delivery
     thereof, any other documents contemplated thereby or the performance,
     enforcement or amendment of any terms thereof;
the payment or receipt of Periodic Rent and Supplemental Rent or any other
     payment, receipt or earning under the Facility Lease or the Facility Site
     Lease or arising from the Facility, the Undivided Interest, the Ground
     Interest, the Facility Site, the Easement or any portion or Component
     thereof or any interest therein;

any other amount paid or payable pursuant to the Operative Documents or the
     South Point Ground Lease;

the conveyance of title to the Undivided Interest; or

                                       55

<PAGE>

otherwise relating to the transactions contemplated by the Operative Documents
     or the performance of South Point Ground Lease.

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

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

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

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

                                       56

<PAGE>

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

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

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

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

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

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

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

                                       57

<PAGE>

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

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

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

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

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

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

Taxes imposed that would not have been imposed on a Tax Indemnitee but for the
     activities in the taxing jurisdiction of such Tax Indemnitee or any
     Affiliate thereof unrelated to the transactions contemplated by the
     Operative Documents other than Taxes that are or are in the nature of
     sales, transaction privilege taxes, use, rental or license taxes, value
     added taxes

                                       58

<PAGE>

     (except to the extent value added taxes are imposed in clear and direct
     substitution for income taxes) or property taxes.

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

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

                                       59

<PAGE>

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

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

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

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

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<PAGE>

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

Contest.

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

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

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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<PAGE>

               (9)   if such contest is controlled by the Facility Lessee,
prior to commencement of a judicial action with respect to the contest, the
Facility Lessee shall have admitted in writing its liability to pay an
indemnity pursuant to this Section 9.2 with respect to such Tax, which
admission shall be binding on the Facility Lessee unless and to the extent such
contest is determined in a manner that conclusively demonstrates that the
Facility Lessee is not so liable, and

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

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

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

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

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

Reports.

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

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     consequence for failure to file after compliance by the Facility Lessee
     with the requirements hereof shall be a loss of indemnification from the
     Facility Lessee in respect of any Tax to the extent resulting from such
     failure.

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

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

FACILITY LESSEE'S RIGHT OF QUIET ENJOYMENT

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

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SUPPLEMENTAL FINANCING IMPROVEMENTS; OPTIONAL REFINANCINGS

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

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

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

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

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

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

no Significant Lease Default or Lease Event of Default shall have occurred and
     be continuing unless the Improvements to be constructed with the proceeds
     of the Additional Lessor Notes shall cure such Significant Lease Default or
     Lease Event of Default and such Improvements

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<PAGE>

     shall be made in compliance with the Operative Documents and the South
     Point Ground Lease;

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

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

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

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

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

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

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

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

Optional Refinancing of Lease Debt. The Facility Lessee shall have the right,
exercisable at any time on no more than three occasions, to request the Owner
Lessor (and the Owner Lessor shall reasonably consider and not unreasonably
withhold its consent), to refund or refinance the Lease Debt, in whole but not
in part, through the issuance of Additional Lessor Notes; provided that all

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conditions to the issuance of such Additional Lessor Notes contained in Section
2.12 of the Collateral Trust Indenture shall have been satisfied and all
applicable Make-Whole Amounts shall have been paid. Any refinancing under this
Section 11.2 shall also be subject to satisfaction of the following additional
conditions:

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

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

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

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

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

the Facility Lessee shall have made or delivered such representations,
     warranties, covenants, opinions and certificates as the Owner Participant
     may reasonably request, which representations, warranties, covenants and
     agreements shall be of no greater scope than those provided by the Facility
     Lessee on the Closing Date under the Operative Documents to which it is a
     party (except to the extent necessitated by differences between existing
     Operative Documents and the terms and conditions of the proposed
     refinancing);

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

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

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

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

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

Cooperation. The Owner Participant will cooperate with and assist the Facility
Lessee in connection with any refinancing and/or assumption of the Lease Debt,
so long as such refinancing and/or assumption of the Lease Debt is in accordance
with the terms of the Operative

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<PAGE>

Documents and the South Point Ground Lease. The Owner Participant will execute
such agreements and documents as may be necessary with respect to any such
refinancing and will instruct the Owner Lessor to act accordingly.

CERTAIN ADJUSTMENTS TO PERIODIC RENT, TERMINATION VALUE AND OTHER AMOUNTS

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

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

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

at the request of the Facility Lessee or the Owner Participant to reflect any
     enactment, promulgation, release or adoption of, amendment to or change in
     the Code, Treasury Regulations, Revenue Rulings or Revenue Procedures ("Tax
     Law Change") enacted prior to the Closing;

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

After the Closing Date, Periodic Rent, Termination Value, Allocated Rent,
     Proportional Rent, Lessor 467 Loan Principal Balance, Lessee 467 Loan
     Principal Balance, Lessor 467 Loan Interest and Lessee 467 Loan Interest
     shall be adjusted at the request of the Facility Lessee or

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<PAGE>

     the Owner Participant in accordance with the terms of the Facility Lease
     to which it is a party.

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

TRANSFER OF THE FACILITY LESSEE OWNERSHIP; SPECIAL LESSEE TRANSFERS; EXERCISE
     OF EXTENSION OF SOUTH POINT GROUND LEASE

Transfer of the Facility Lessee Ownership.

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

Assignment under Section 13.1(a) above by the Facility Lessee shall be permitted
     if (A) after giving effect to such assignment or assignments, either (x)
     Calpine owns, directly or indirectly, at least a majority of the Ownership
     Interest of each assignee (as well as at least a majority of the Ownership
     Interest of any non-assigning Facility Lessee), the Calpine Guaranty
     remains in full force and effect (without a transferee of Calpine's
     obligations thereunder having succeeded thereto in accordance with Section
     8.4(b) thereof), and Calpine shall have reaffirmed in writing its
     obligations under the Calpine Guaranty or (y) Calpine's obligations under
     the Calpine Guaranty has been succeeded to in accordance with Section
     8.4(b) thereof, the transferee of Calpine shall own, directly or
     indirectly, at least a majority of the Ownership Interest of each assignee
     (as well as at least a majority of the Ownership Interest of any
     non-assigning Facility Lessee) and the Calpine Guaranty shall remain in
     full force and effect and (B) satisfaction of the following conditions:

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<PAGE>

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

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

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

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

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

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

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

               d)   the transfer shall not cause the Facility to cease being
                    treated as a "qualified Indian reservation or property"
                    within the meaning of Section 168(j)(4) of the Code or
                    cause the Facility to become "tax-exempt use property
                    within the meaning of Section 168(h) of the Code (unless
                    the Facility Lessee shall make a payment contemporaneously
                    with such transfer that in the reasonable

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                    judgment of the Owner Participant compensates the Owner
                    Participant for the adverse tax consequences therefrom).

     F.   Special Facility Lessee Transfers. Upon the occurrence and during the
continuance of a Special Lessee Transfer Event, the Facility Lessee (or its
designee as provided below) may (a) terminate the Facility Lease in accordance
with its terms, or (b) upon not less than 30 days' written notice to the Owner
Participant, the Indenture Trustee and the Pass Through Trustees, purchase
subject to the limitations set forth in Section 7.1, all of the Member Interest
(any purchase under clause (b) being referred to a the "Special Lessee
Transfer") on the applicable Termination Date at a price equal to the Special
Lessee Transfer Amount determined as of the date of such transfer and keep the
Facility Lease in effect. On the applicable Termination Date, the Facility
Lessee (or its designee) shall pay to the Owner Participant or the OP
Guarantor, the Special Lessee Transfer Amount determined as of such date, plus
all amounts due and payable to the Owner Participant on such date (including
all reasonable and documented costs and expenses of the Owner Participant or
the OP Guarantor and all sales, use, value added and other Taxes covered and
not excluded by Section 9.2 hereof associated with the Special Lessee Transfer
pursuant to this Section 13.2, to the extent such amounts have not otherwise
been reimbursed by the Facility Lessee pursuant to this Section 13.2, it being
understood that any transfer pursuant to this Section 13.2 shall not be
considered a voluntary transfer for purposes of Section 9.2). Concurrently with
the payment of all sums required to be paid pursuant to this Section 13.2 (or
on such later date of transfer of the Member Interest in accordance with clause
(ii) below) (i) the Facility Lessee shall cease to have any liability to the
Owner Participant or the OP Guarantor with respect to the Operative Documents
and the South Point Ground Lease, except for obligations (including Section 9.1
and 9.2 hereof and the Tax Indemnity Agreement) surviving pursuant to the
express terms of the Operative Documents or which have otherwise accrued but
not been paid as of such date and (ii) the Owner Participant or the OP
Guarantor will transfer (by an appropriate instrument of transfer) the Member
Interest to the Facility Lessee (or its designee); provided, however, that if
the Lien of the Collateral Trust Indenture has not been terminated or
discharged, such transfer shall not be made to the Facility Lessee, but shall
be made to the Facility Lessee's designee promptly upon the Facility Lessee's
designation of such designee and such designee will agree not to transfer the
Member Interest to the Facility Lessee until the Lien is terminated or
discharged. At the time of any transfer under this Section 13.2, the Owner
Participant or the OP Guarantor shall represent and warrant as to the absence
of Liens attributable to the Owner Participant on the Member Interest. It is
understood and agreed among the parties hereto that the transaction
contemplated by this Section 13.2 shall not effect a merger of the Facility
Lessee's interest in the Facility and the Facility Site with the Owner Lessor's
Interest. The Facility Lessee will pay, on an After-Tax Basis, all reasonable
and documented transaction costs and expenses of the parties (including
reasonable attorneys' fees and disbursements) in connection with any transfer
pursuant to this Section 13.2. Subsequent to such transfer, the Facility Lessee
and the Owner Lessor may, without the consent of the Indenture Trustee or the
Pass Through Trustees, waive the Regulatory Event of Loss or the Burdensome
Termination Event that gave rise to the Special Lessee Transfer Event and the
Facility Lease shall continue in full force and effect in accordance with its
terms.

     G.   Exercise of Extension of South Point Ground Lease. The rights of the
Owner Lessor delegated to the Facility Lessee, pursuant to Section 5.20(b)
hereof, and subject to the terms and conditions thereof, include the right to
negotiate and to exercise the Owner Lessor's

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rights (to the extent of the Owner Lessor's Percentage) to extend the term of
the South Point Ground Lease in accordance with Section 4.2 thereof; provided,
however, that (i) such right may not be exercised by the Facility Lessee during
the occurrence and continuation of a Lease Event of Default and following the
commencement of the exercise of the Owner Lessor's remedies under Section 17 of
the Facility Lease, nor following the termination of the Facility Lease
pursuant to Section 17 thereof or the Facility Site Lease pursuant to Article
XVI thereof; provided further that the Facility Lessee agrees that, except as
otherwise provided in the third paragraph of this Section 13.3, it shall not
decline to exercise such right to extend, and shall not cancel any such
election of such right without the consent of the Owner Lessor unless the Owner
Participant has disapproved of the terms of the extension pursuant to Section
5.20 hereof.

          Notwithstanding the foregoing, the Facility Lessee may elect to
extend the South Point Ground Lease pursuant to Section 4.2 thereof and
exercise the Owner Lessor's rights under such Section only if, concurrently
with such election, the Facility Lessee also elects to extend the South Point
Ground Lease with respect to the Other South Point Owner Lessors on the same
terms and conditions negotiated for the Owner Lessor giving effect to their
respective percentage interests in the South Point Ground Lease. Additionally,
the Owner Lessor shall not give the Facility Lessee consent to refrain from
exercising the extension of the South Point Ground Lease or to cancel any such
extension, unless concurrently with such consent, the Other South Point Owner
Lessors also give such consent to the Facility Lessee with respect to the
respective interests of the Other Owner Lessors in the South Point Ground Lease.

          Notwithstanding any provision to the contrary in this Agreement or in
any other Operative Document, the Facility Lessee shall have no obligation to
exercise the lease extension right as provided in Section 4.2 of the South
Point Ground Lease, as amended, if the Facility Lessee shall disagree with the
amount of the Annual Renewal Amount (as defined in the South Point Ground
Lease) as determined pursuant to the terms of Section 4.2 of the South Point
Ground Lease, as amended. If the Facility Lessee shall so disagree with such
determination of the amount of the Annual Renewal Amount, then the Facility
Lessee shall have the right, in its sole discretion and without consent from
any of the Owner Lessor, Owner Participant or Indenture Trustee or any other
Person, to reject, and not accept and exercise, the lease extension right
contained in Section 4.2 of the South Point Ground Lease, and, in connection
therewith, to permit the Facility Lease and the Facility Site Lease to
terminate after expiration of the then current lease term of each thereof;
provided that nothing in this third paragraph of Section 13.3 shall, or shall
be deemed to, limit or affect the right of the Owner Lessor to extend the term
of the South Point Ground Lease by exercising, for and on its own behalf, the
lease extension right for the amount of the Annual Renewal Amount so
determined, or as otherwise may be determined in subsequent negotiations by the
Owner Lessor, it being understood that (A) unless otherwise agreed by the Owner
Lessor, the Facility Lessee's rejection and non-acceptance referred to above
shall be irrevocable and (B) neither the Facility Lessee nor any Calpine Party
shall have any right, title or interest in, or (except as otherwise provided in
Section 14.6) obligation or liability under or in connection with, the South
Point Ground Lease in respect of any period commencing on or after the later of
the termination of the Facility Lease and the termination of the Facility Site
Lease as aforesaid.

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MISCELLANEOUS

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

Successor Owner Lessor. The parties hereto agree that the transfer or
assignment pursuant to the terms of the LLC Agreement by the Owner Lessor to a
successor Owner Lessor, will not violate the terms of any Operative Document or
the South Point Ground Lease.

Bankruptcy of Lessor Estate. If (i) all or any part of the Lessor Estate
becomes the property of a debtor subject to the reorganization provisions of
Title 11 of the United States Code, as amended from time to time, (ii) pursuant
to such reorganization provisions the Owner Participant is required, by reason
of the Owner Participant being held to have recourse liability to the debtor or
the trustee of the debtor directly or indirectly, to make payment on account of
any amount payable as principal or interest on the Lessor Notes, and (iii) the
Indenture Trustee actually receives any Excess Amount, as defined below, which
reflects any payment by the Owner Participant on account of clause (ii) above,
the Indenture Trustee shall promptly refund to the Owner Participant such
Excess Amount (and, to the extent so refunded, such amount owing under the
Lessor Notes shall be reinstated). For purposes of this Section 14.3, "Excess
Amount" means the amount by which such payment exceeds the amount which would
have been received by the Indenture Trustee if the Owner Participant had not
become subject to the recourse liability referred to in clause (ii) above.
Nothing contained in this Section 14.3 shall prevent the Indenture Trustee from
enforcing any personal recourse obligations (and retaining the proceeds
thereof) of the Owner Participant as contemplated by this Participation
Agreement (other than referred to in clause (ii)).

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

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

          If to the Facility Lessee:

          South Point Energy Center, LLC

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<PAGE>

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

          with a copy to:

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

     If to the Guarantor:

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

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

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

          If to the Owner Participant:

          SBR OP-1, LLC
          c/o Wells Fargo Bank Northwest, National Association
          MAC U1254-031
          79 South Main Street
          Salt Lake City, UT 84111
          Telephone: (801) 246-5630
          Facsimile:  (801) 246-5053
          Attention: Corporate Trust Services

                                       74

<PAGE>

          with a copy to:

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

                                       75

<PAGE>

          If to the Indenture Trustee:

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

               with a copy to:

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

          If to the Pass Through Trustees:

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

               with a copy to:

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

     If to the Manager:

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<PAGE>

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

          A copy of all notices provided for herein shall be sent by the
          party giving such notice to each of the other parties hereto.
          In addition, the Facility Lessee shall (unless otherwise
          directed by the applicable Rating Agency) provide to each
          Rating Agency a copy of any information, report or notice it
          gives to the Indenture Trustee hereunder or any other
          Operative Documents.

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<PAGE>

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

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

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

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

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

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

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<PAGE>

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

Limitation of Liability.

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

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

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

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

                                       79

<PAGE>

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

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

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

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

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

                                       80

<PAGE>

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

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

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

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

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

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

                                       81

<PAGE>

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

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

Confidentiality of Information. Each of the parties hereto agrees that any
information (x) contained herein or in the other Operative Documents (including
any terms, conditions, agreements, financial projections, and other financial
and operating information contained herein or therein, and the terms of any
insurance policies required or otherwise maintained pursuant hereto), (y)
disclosed or to be disclosed by one such party to another such party (for
purposes of this Section 14.21, each of the parties to this Agreement being
referred to herein as a "Receiving Party") in connection with this Agreement or
any other Operative Document, or (z) otherwise received in connection with this
Agreement or any other Operative Document (or the transactions contemplated
thereby) and designated by the disclosing party in writing as confidential,
shall, in each case, be kept confidential by the Receiving Party and shall not
be used otherwise than in connection with the business of the Parties
contemplated hereunder except:

to the extent such information is generally available to the public prior to
     the Receiving Party's receipt thereof, or which becomes public after such
     receipt, but through no violation by such Receiving Party of this Section
     14.21;

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

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

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

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

as may be disclosed to any transferee or proposed transferee of the Receiving
     Party; provided, however, that, prior to any such disclosure, any such
     transferee or proposed transferee, as the case may be, shall have agreed in
     writing to be bound by the terms of this Section 14.21; or

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

                                       82

<PAGE>

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

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

Amendments, Etc. No Operative Document nor any of the terms thereof (including
the terms of this Section 14.23) may be terminated, amended, supplemented,
waived or modified, except by an instrument in writing (a) signed in the case of
a waiver, by the party against which enforcement of such waiver is sought, and
no such waiver shall become effective unless signed copies thereof shall have
been delivered to each such party or (b) in the case of termination, amendments,
supplements or modifications, consented to by all parties hereto; provided,
however, that the consent of the Facility Lessee is not required in the case of
amendments to any Operative Document to which the Facility Lessee is not a party
and which would not increase or accelerate the Facility Lessee's or the
Guarantor's obligations under any of the Operative Documents nor impair the
Facility Lessee's or the Guarantor's rights under any of the Operative
Documents. Notwithstanding the foregoing, Section 5.6 of the Collateral Trust
Indenture shall not be amended without the Guarantor's consent.

     H.   South Point Ground Lease

     The parties hereto acknowledge and agree that, in accordance with Section
7.2 of the Facility Lease, the Facility Lease is subject and subordinate to all
the terms and conditions of the South Point Ground Lease.

                                       83

<PAGE>

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

                              SOUTH POINT ENERGY CENTER, LLC,
                              a Delaware limited liability company

                                   By: _________________________________
                                   Name:
                                   Title:
                                   Date:

<PAGE>

                                   SOUTH POINT OL-1, LLC, a Delaware limited
                                   liability company

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

                                   By: _________________________________
                                   Name:
                                   Title:
                                   Date:

                                   SBR OP-1, LLC, a Delaware limited liability
                                   company

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

                                   By: _________________________________
                                   Name:
                                   Title:
                                   Date:

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

                              By: _________________________________
                                   Name:
                                   Title:
                                   Date:

<PAGE>

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

                                   By: _________________________________
                                   Name:
                                   Title:
                                   Date:

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

                                   By: _________________________________
                                   Name:
                                   Title:
                                   Date:

<PAGE>

                                   CALPINE CORPORATION,
                                   a Delaware corporation
                                   By: _________________________________
                                   Name:
                                   Title:
                                   Date:

<PAGE>

              APPENDIX A - DEFINITIONS AND RULES OF INTERPRETATION

RULES OF INTERPRETATION

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

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

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

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

     (d)  words importing a gender include any gender;

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

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

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

     (h)  a reference to a particular section, paragraph or other part of a
     particular statute shall be deemed to be a reference to any other
     section, paragraph or other part substituted therefor from time to time;

<PAGE>

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

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

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

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

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

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

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

DEFINED TERMS

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

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

                                        2

<PAGE>

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

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

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

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

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

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

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

                                        3

<PAGE>

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

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

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

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

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

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

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

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

                                        4

<PAGE>

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

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

     "ASSIGNMENT AGREEMENT" shall mean the Assignment Agreement (SP-1) dated
     as of the Closing Date between CCFC and the Owner Lessor, substantially
     in the form of Exhibit B to the Participation Agreement duly completed,
     executed and delivered on the Closing Date pursuant to which the Owner
     Lessor will acquire the Undivided Interest and the Ground Interest from
     CCFC.

     "ASSUMPTION PRICE" with respect to the Undivided Interest, shall mean
     $17,187,500.

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

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

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

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

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

                                        5

<PAGE>

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

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

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

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

     "BROAD RIVER ASSIGNMENT AGREEMENTS" shall mean each of the assignment
     agreements executed and delivered pursuant to the Broad River
     Participation Agreements.

     "BROAD RIVER CALPINE GUARANTIES" shall mean the Calpine guaranty and
     payment agreements executed and delivered by Calpine pursuant to the
     Broad River Participation Agreements.

     "BROAD RIVER COLLATERAL TRUST INDENTURES" shall mean each of the
     collateral trust indentures executed and delivered pursuant to the Broad
     River Participation Agreements.

     "BROAD RIVER FACILITY LEASES" shall mean a collective reference to each
     of the four facility lease agreements, dated as of October 18, 2001, by
     and between the applicable Broad River Owner Lessor and the Broad River
     Facility Lessee, pursuant to which the applicable Broad River Owner
     Lessor will lease the applicable Broad River Ground Interests to Broad
     River Facility Lessee.

     "BROAD RIVER FACILITY LESSEE" shall mean Broad River Energy LLC.

     "BROAD RIVER FACILITY SITE" shall have the meaning set forth in the
     recitals to the Broad River Facility Site Leases.

     "BROAD RIVER FACILITY SITE LEASES" shall mean a collective reference to
     each of the four facility site leases, dated as of October 18, 2001, by
     and between the applicable Broad River Owner Lessor and the Broad River
     Facility Lessee, pursuant to which the applicable Broad River Owner
     Lessor will lease the applicable Broad River Ground Interest to the Broad
     River Facility Lessee.

     "BROAD RIVER GROUND INTERESTS" shall mean the undivided leasehold
     interests in the Broad River Facility Site conveyed to the Broad River
     Owner Lessors under the Broad River Assignment Agreements.

     "BROAD RIVER INDENTURE TRUSTEES" shall mean each of the indenture
     trustees relating to the Broad River Collateral Trust Indentures.

                                        6

<PAGE>

     "BROAD RIVER LESSOR MANAGERS" shall mean each of the lessor managers
     acting on behalf of the Broad River Owner Lessors pursuant to the Broad
     River Operative Documents.

     "BROAD RIVER OWNER LESSORS" shall mean Broad River OL-1, LLC, Broad
     River OL-2, LLC, Broad River OL-3, LLC and Broad River OL-4, LLC.

     "BROAD RIVER OWNER PARTICIPANTS" shall mean SBR OP-1, LLC, SBR OP-2,
     LLC, SBR OP-3, LLC and SBR OP-4, LLC.

     "BROAD RIVER LEASE TRANSACTIONS" shall mean the transactions involving
     the assignment and transfer of the Broad River Undivided Interests and
     the Broad River Ground Interests to the Broad River Owner Lessors, and
     the simultaneous lease of the Broad River Undivided Interests and Broad
     River Ground Interests to the Broad River Facility Lessee on
     substantially the same terms and conditions as under, and dated the same
     date as, the Broad River Overall Transaction.

     "BROAD RIVER OPERATIVE DOCUMENTS" shall mean the other "Operative
     Documents" for each of the Broad River Lease Transactions.

     "BROAD RIVER OVERALL TRANSACTION" shall mean all of the transactions
     contemplated by the Broad River Operative Documents.

     "BROAD RIVER PARTICIPATION AGREEMENTS" shall mean a collective reference
     to each of the other three separate participation agreements entered into
     by the Broad River Facility Lessee, the applicable Broad River Owner
     Lessor, the applicable Broad River Lessor Manager, the applicable Broad
     River Owner Participant, the applicable Broad River Indenture Trustee,
     the Pass Through Trustees and Calpine and designated Participation
     Agreement (BR-1), Participation Agreement (BR-2), Participation Agreement
     (BR-3) and Participation Agreement (BR-4), each dated as of the Closing
     Date, pursuant to which, among other things, the Broad River Facility
     Lessee has agreed to (a) assign and transfer to the applicable Broad
     River Owner Lessors certain undivided leasehold interests in the Broad
     River Facility, and (b) lease from the applicable Broad River Owner
     Lessors such undivided leasehold interest in the Broad River Facility
     pursuant to the Broad River Facility Leases.

     "BROAD RIVER UNDIVIDED INTERESTS" shall mean the undivided leasehold
     interests in the Broad River Facility conveyed to the Broad River Owner
     Lessors under the Broad River Assignment Agreement.

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

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

                                        7

<PAGE>

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

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

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

     "CALPINE GUARANTY" shall mean the Calpine Guaranty and Payment
     Agreement (SP-1) dated as of the Closing Date in favor of the
     Beneficiaries, substantially in the form of Exhibit H to the
     Participation Agreement.

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

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

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

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

     "CCFC" shall mean Calpine Construction Finance Company, L.P., a Delaware
     limited partnership.

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

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

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

     "CERTIFICATES" shall mean the 8.400% Pass Through Certificates Series A
     and the 9.825% Pass Through Certificates Series B issued on the Closing
     Date and any

                                        8

<PAGE>

     certificates issued in replacement therefor pursuant to Section 3.3, 3.4
     or 3.5 of the Pass Through Trust Agreement.

     "CES" shall mean Calpine Energy Services L.P., a Delaware limited
     partnership.

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

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

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

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

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

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

     "COLLATERAL TRUST INDENTURE" shall mean the Indenture of Trust, Deed of
     Trust, Assignment of Rent and Leases, Security Agreement and Financing
     Statement (SP-1), dated as of the Closing Date, between the Owner Lessor
     and the Indenture Trustee, in substantially the form of Exhibit I to the
     Participation Agreement.

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

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

     "CONSOLIDATED CURRENT LIABILITIES," as of the date of determination,
     means the aggregate amount of consolidated liabilities of the Guarantor
     and its consolidated Restricted Subsidiaries which may properly be
     classified as current liabilities (including taxes accrued as estimated),
     after eliminating (i) all inter-company items between the

                                        9

<PAGE>

     Guarantor and its Subsidiaries and (ii) all current maturities of
     long-term Indebtedness, all as determined in accordance with GAAP.

     "CONSOLIDATED NET TANGIBLE ASSETS" means, as of any date of
     determination, as applied to the Guarantor, the total amount of
     Consolidated assets (less accumulated depreciation or amortization,
     allowances for doubtful receivables, other applicable reserves and other
     properly deductible items) under GAAP which would appear on a
     Consolidated balance sheet of the Guarantor and its Subsidiaries,
     determined in accordance with GAAP, and after giving effect to purchase
     accounting and after deducting therefrom, to the extent otherwise
     included, the amounts of: (i) Consolidated Current Liabilities; (ii)
     minority interests in consolidated Restricted Subsidiaries held by
     Persons other than the Guarantor or a Restricted Subsidiary; (iii) excess
     of cost over fair value of assets of businesses acquired, as determined
     in good faith by the Board of Directors; (iv) any revaluation or other
     write-up in value of assets subsequent to December 31, 1993 as a result
     of a change in the method of valuation in accordance with GAAP; (v)
     unamortized debt discount and expenses and other unamortized deferred
     charges, goodwill, patents, trademarks, service marks, trade names,
     copyrights, licenses, organization or developmental expenses and other
     intangible items; (vi) treasury stock; and (vii) any cash set apart and
     held in a sinking or other analogous fund established for the purpose of
     redemption or other retirement of Capital Stock to the extent such
     obligation is not reflected in Consolidated Current Liabilities.

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

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

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

     "CSFB" shall mean Credit Suisse First Boston.

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

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

                                       10

<PAGE>

     minus (ii) the sum of (A) the Equity Portion of Termination Value and (B)
     if such date of determination is a Rent Payment Date, the Equity Portion
     of Periodic Rent due on that date.

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

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

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

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

     "EASEMENT" shall mean the easement defined in the recitals to the
     Facility Site Lease.

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

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

     "ENGINEERING REPORT" shall mean, with respect to the Facility, the
     report of the Engineering Consultant, dated October 12, 2001.

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

     "ENVIRONMENTAL CONSULTANT" shall mean Applied EnviroSolutions, Inc.

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

                                       11

<PAGE>

     "ENVIRONMENTAL REPORTS" shall mean the Phase 1 Environmental Site
     Assessment dated October 12, 2001 prepared by the Environmental
     Consultant for Calpine Corporation.

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

     "EQUITY INVESTOR" shall mean Newcourt Capital USA Inc.

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

          "EQUITY PORTION OF TERMINATION VALUE" in respect of any determination
of Termination Value or amount determined by reference to Termination Value
payable pursuant to the Operative Documents, shall mean an amount equal to the
excess, if any, of (i) the Termination Value set forth opposite the Termination
Date corresponding to such date of determination on Schedule 2 of the Facility
Lease, and, if such date of determination is a Rent Payment Date, Periodic Rent
due on that date (to the extent payable in arrears) over (ii) the balance,
including scheduled (in accordance with the payment terms of the Lessor Notes)
accrued interest, on the Lessor Notes scheduled (in accordance with the payment
terms of the Lessor Notes) to be outstanding on such date of determination
corresponding to the Facility Lease.

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

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

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

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

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

          (iii)  (a) seizure, condemnation, confiscation or taking of, or
     requisition (a "Requisition") of title to the Facility by any
     Governmental Entity that shall have resulted in loss by the Owner Lessor
     of the Undivided Interest or the Ground Interest, following exhaustion of
     all permitted appeals or an election by the Facility Lessee in its
     discretion not to pursue such appeals or rights; provided that no such
     contest (or exercise) shall

                                       12

<PAGE>

     extend beyond the earlier of the date which is (x) six months after the
     loss of such title, or (y) 48 months prior to the end of the Basic Lease
     Term or any Renewal Lease Term then in effect or elected by the Facility
     Lessee or (b) Requisition of use of, or leasehold in, the Undivided
     Interest or the Ground Interest by any Governmental Entity that shall
     have resulted in the loss of possession of the Undivided Interest or all
     or any part of the Ground Interest that is required for the use or
     operation of the Facility; provided that in any case involving
     Requisition of use of the Facility, or all or any part of the Facility
     Site that is required for the use or operation, of the Facility, but not
     of the Owner Lessor's Undivided Interest or the Ground Interest, such
     event shall be an Event of Loss only if loss of possession continues
     beyond the Basic Lease Term or any Renewal Lease Term then in effect or
     elected by the Facility Lessee; or

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

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

                                       13

<PAGE>

          (vi)   the South Point Ground Lease shall have been cancelled or
     terminated or shall otherwise cease to be in full force and effect other
     than by reason of events constituting a Lease Event of Default under
     Section 16(m) of the Facility Lease; or

          (vii)  if elected by the Owner Participant, in the event that the
     FERC Order set forth in clause (ii) of the definition of "FERC Orders"
     herein shall not have been obtained and become final within ninety (90)
     days of the Closing Date, such election to be conditioned upon receipt of
     a reasoned legal opinion of nationally recognized independent counsel
     (Owner Participant's outside counsel at Closing to be deemed to meet such
     qualifications) that any pending proceeding, if adversely determined,
     would reasonably be expected to have a material adverse effect on the
     Owner Participant or the Owner Lessor, it being acknowledged and agreed
     that for purposes of this clause (vii), in determining if a material
     adverse effect would reasonably be expected to occur, (x) the fact of
     Calpine's obligations under the Calpine Guaranty shall be taken into
     account, and (y) no such material adverse effect shall be found to be
     reasonably expected to occur if (1) an adverse determination in any such
     pending proceeding would be reasonably likely to result in a FERC order
     accepting Lessee's rate schedule, as amended, or establishing a just and
     reasonable rate, that in either case is sufficient to allow the Facility
     Lessee to satisfy its obligations to pay Periodic Rent under the Facility
     Lease, and (2) no material adverse effect would be reasonably likely to
     occur as a result of any other aspect of such FERC proceeding.

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

                                       14

<PAGE>

     (vi) above shall be ten (10) Business Days after any such cancellation,
     termination or failure to be in full force and effect as contemplated
     therein. The date of occurrence of an Event of Loss in clause (vii) above
     shall be the date on which the Facility Lessee receives the Owner
     Participant's election made in accordance with such clause (vii).

     "EXCEPTED PAYMENTS" shall mean and include (i)(A) any right, title or
     interest to any indemnity (whether or not constituting Supplemental Rent
     and whether or not a Lease Event of Default exists) payable to either the
     Owner Lessor, the Lessor Manager, the Trust Company, or the Owner
     Participant or to their respective Indemnitees and successors and
     permitted assigns (other than the Indenture Trustee) pursuant to Section
     2.3, 9.1, 9.2, 11.1 or 11.2 of the Participation Agreement, and any
     payments under any Tax Indemnity Agreement (provided that Excepted
     Payments shall not include any Periodic Rent) or (B) any amount payable
     by the Facility Lessee to the Owner Lessor or the Owner Participant to
     reimburse any such Person for its costs and expenses in exercising its
     rights under the Operative Documents or the South Point Ground Lease,
     (ii)(A) insurance proceeds, if any, payable to the Owner Lessor or the
     Owner Participant under insurance separately maintained by the Owner
     Lessor or the Owner Participant with respect to the Facility as permitted
     by Section 3(b) of Schedule 5.31 to the Participation Agreement or (B)
     proceeds of personal injury or property damage liability insurance
     maintained under any Operative Document or the South Point Ground Lease
     for the benefit of the Owner Lessor or the Owner Participant, (iii) any
     amount payable to the Owner Participant as the purchase price of the
     Owner Participant's right and interest in the Member Interest, (iv) all
     other fees expressly payable to the Owner Participant under the Operative
     Documents, (v) any payments in respect of interest, or any payments made
     on an After-Tax Basis, to the extent attributable to payments referred to
     in clause (i) through (vi) above; (vii) any amounts paid to the Owner
     Lessor as reimbursement for amounts expended pursuant to Section 20 of
     the Facility Lease; (viii) proceeds of the items referred to in clause
     (i) through (vii) above; and (ix) any rights to demand, collect, sue for,
     or otherwise receive and enforce payment of the foregoing amounts,
     including under the Calpine Guaranty, but without limiting clause (v) of
     this definition above.

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

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

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

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

     "FACILITY" shall mean a 530 MW nameplate capacity gas-fired combined
     cycle merchant power plant located near Bullhead, Arizona and more fully
     described in Exhibit A to the Participation Agreement. The Facility does
     not include the Facility Site.

                                       15

<PAGE>

     "FACILITY LEASE" shall mean, the Facility Lease Agreement (SP-1), dated
     as of October 18, 2001, between the Owner Lessor and the Facility Lessee,
     substantially in the form of Exhibit C to the Participation Agreement.

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

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

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

     "FACILITY SITE LEASE" shall mean the Facility Site Lease (SP-1), dated
     as of October 18, 2001, between Facility Lessee and the Owner Lessor,
     substantially in the form of Exhibit D to the Participation Agreement,
     pursuant to which Owner Lessor will lease the Ground Interest to the
     Facility Lessee.

     "FACILITY SITE LESSEE" shall mean South Point Energy Center, LLC.

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

     "FACILITY SITE LESSOR" shall mean Owner Lessor.

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

     "FAIR MARKET RENTAL VALUE" or "FAIR MARKET SALES VALUE" shall mean with
     respect to any property or service as of any date, the cash rent or cash
     price obtainable in an arm's-length lease, sale or supply, respectively,
     between an informed and willing lessee or purchaser under no compulsion
     to lease or purchase and an informed and willing lessor or seller or
     supplier under no compulsion to lease or sell or supply the property or
     service in question, and shall, in the case of the Undivided Interest or
     the Owner Lessor's Interest, be determined (except pursuant to Section 17
     of the Facility Lease or as otherwise provided below or in the Operative
     Documents) on the basis and assumption that (i) the conditions contained
     in Sections 7 and 8 of the Facility Lease shall have been complied with
     in all respects, (ii) the lessee or buyer shall have rights in, or an
     assignment of, the Operative Documents to which the Owner Lessor is a
     party and the South Point Ground Lease and the obligations relating
     thereto, (iii) the Undivided Interest or the Owner Lessor's Interest, as
     the case may be, is free and clear of all Liens (other than Owner
     Lessor's Liens, Owner Participant's Liens and Indenture Trustee Liens),
     (iv) taking into account the remaining term of the Facility Site Lease,
     and (v) in the case the Fair Market Rental Value, taking into account the
     terms of the Facility Lease and the other Operative Documents and the
     South Point Ground Lease. If the Fair Market Sales Value of the Owner
     Lessor's Interest is to be determined during the continuance of a Lease
     Event of Default or in connection with the exercise of remedies by the
     Owner Lessor pursuant to Section 17 of the Facility Lease, such value
     shall be determined by an Independent Appraiser appointed solely by the
     Owner Lessor on an "as-is", "where-is" and "with all

                                       16

<PAGE>

     faults" basis and shall take into account all Liens (other than Owner
     Lessor's Liens, Owner Participant's Liens and Indenture Trustee Liens);
     provided, however, in any such case where the Owner Lessor shall be
     unable to obtain constructive possession sufficient to realize the
     economic benefit of the Owner Lessor's Interest, Fair Market Sales Value
     of the Owner Lessor's Interest shall be deemed equal to $0 (zero). If in
     any case other than in the preceding sentence the parties are unable to
     agree upon a Fair Market Sales Value of the Owner Lessor's Interest
     within 30 days after a request therefor has been made, the Fair Market
     Sales Value of the Owner Lessor's Interest shall be determined by
     appraisal pursuant to the Appraisal Procedures. Any fair market value
     determination of a Severable Improvement shall take into consideration
     any liens or encumbrances to which the Severable Improvement being
     appraised is subject and which are being assumed by the transferee.

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

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

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

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

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

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

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

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

          (iv)   Intentionally Omitted; and

          (v)    an approval from FERC under Section 203 of the Federal Power
     Act for the transfer of jurisidictional facilities, including the Power
     Marketing Agreement between CCFC and CES from CCFC to CES under Section
     203 of the Federal Power Act in the sale/leaseback contemplated by the
     Operative Documents.

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

                                       17

<PAGE>

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

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

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

     "GAAP" shall mean generally accepted accounting principles.

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

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

     "GROUND LEASE" shall have the meaning set forth in recital A of the
     Facility Site Lease.

     "GROUND INTEREST" shall mean the Owner Lessor's 25% undivided leasehold
     interest in the Facility Site.

     "GUARANTOR" shall mean Calpine Corporation.

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

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

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

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

                                       18

<PAGE>

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

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

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

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

                                       19

<PAGE>

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

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

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

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

     "INDENTURE TRUSTEE OFFICE" shall mean the office to be used for notices
     to the Indenture Trustee from time to time pursuant to Section 9.5 of the
     Collateral Trust Indenture.

     "INDENTURE TRUSTEE'S ACCOUNT" shall mean the account specified with
     respect thereto on Schedule 1-B to the Participation Agreement or such
     other account of the Indenture Trustee, as the Indenture Trustee may from
     time to time specify in a notice to the other parties to the
     Participation Agreement.

     "INDENTURE TRUSTEE'S LIENS" shall mean any Lien on the Lessor Estate,
     the Facility, the Facility Site or any part thereof or any interest
     therein arising as a result of (i) Taxes against or affecting the Lease
     Indenture Company or the Indenture Trustee, or any Affiliate thereof that
     are not related to, or that are in violation of, any Operative Document
     or the South Point Ground Lease or the transactions contemplated thereby,
     (ii) Claims against or any act or omission of the Lease Indenture Company
     or the Indenture Trustee, or Affiliate thereof that is not related to, or
     that is in violation of, any of such Person's representations,
     warranties, covenants or agreements in an Operative Document or the
     transactions contemplated thereby or that is in breach of any covenant or
     agreement of the Lease Indenture Company or the Indenture Trustee
     specified therein, (iii) Taxes imposed upon the Lease Indenture Company
     or the Indenture Trustee, or any Affiliate thereof that are not
     indemnified against by the Facility Lessee pursuant to any Operative
     Document or (iv) Claims against or affecting the Lease Indenture Company
     or the Indenture Trustee, or any Affiliate thereof arising out of the
     voluntary or involuntary transfer by the Lease Indenture Company or the
     Indenture Trustee of any portion of the interest of the Lease Indenture
     Company or the Indenture Trustee in the Lessor Estate, other than
     pursuant to the Operative Documents.

     "INDEPENDENT APPRAISER" shall mean a disinterested, licensed industrial
     property appraiser who is a member of the Appraisal Institute having
     experience in the business of evaluating facilities similar to the
     Facility.

     "INITIAL LESSOR NOTES" shall have the meaning set forth in Section 2.2
     of the Collateral Trust Indenture.

                                       20

<PAGE>

     "INITIAL PURCHASERS" shall mean CSFB, Banc of America Securities LLC,
     Scotia Capital (USA) Inc. and TD Securities (USA) Inc.

     "INITIAL SUBLEASE TERM" with respect to the Facility Site Lease, shall
     have the meaning specified in Section 2.1(a) of the Facility Site Lease.

     "INSURANCE CONSULTANT" shall mean Summit Global Partners Insurance
     Services.

     "INVESTMENT BANKER" shall have the meaning set forth in Section 2.10(d)
     of the Collateral Trust Indenture.

     "INVESTMENT COMPANY ACT" shall mean the Investment Company Act of 1940.

     "INVESTMENT GRADE" with respect to a Rating Agency, shall mean, with
     respect to S&P, BBB- or higher, and with respect to Moody's, Baa3 or
     higher, or, if after the Closing Date a different system of ratings is
     established, the term shall mean a rating in one of such Rating Agency's
     generic rating categories that is comparable to such ratings.

     "IRS" shall mean the Internal Revenue Service of the United States
     Department of Treasury or any successor agency.

     "L/C BANK" shall mean the Acceptable Bank providing a letter of credit
     pursuant to Section 5.3 of the Facility Lease.

     "LEASE DEBT" shall mean the debt evidenced by the Lessor Notes.

     "LEASE DEBT RATE" shall mean the applicable interest rate accruing on
     Lessor Notes.

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

     "LEASE EVENT OF DEFAULT" with respect to the Facility Lease, shall have
     the meaning specified in Section 16 of the Facility Lease.

     "LEASE INDENTURE COMPANY" shall mean State Street Bank and Trust Company
     of Connecticut, National Association, in its individual capacity under
     the Operative Documents.

     "LEASE INDENTURE EVENT OF DEFAULT" shall have the meaning set forth in
     Section 4.2 of the Collateral Trust Indenture.

     "LEASE OBLIGATIONS" shall mean, without duplication, (i) indebtedness
     represented by obligations under a lease that is required to be
     capitalized for financial reporting purposes, (ii) with respect to
     operating leases of electric generating facilities, the termination value
     or similar amount payable by the lessee under such lease and (iii) the
     principal amount of financial obligations under any synthetic lease, tax
     retention operating lease, off-balance sheet loan or similar off-balance
     sheet financing product where such

                                       21

<PAGE>

     transaction is considered borrowed money indebtedness of the lessee for
     tax purposes but is classified as an operating lease under GAAP.

     "LEASEHOLD LIEN" with respect to the Facility Site Lease, shall have the
     meaning set forth in Section 15.3 of the Facility Site Lease.

     "LEASEHOLD MORTGAGEE" with respect to the Facility Site Lease, shall
     have the meaning set forth in Section 15.3 of the Facility Site Lease.

     "LESSEE 467 LOAN INTEREST" with respect to the Facility Lease, shall
     have the meaning specified in Section 3.2(d) of the Facility Lease.

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

     "LESSOR 467 LOAN INTEREST" with respect to the Facility Lease, shall
     have the meaning specified in Section 3.2(d) of the Facility Lease.

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

     "LESSOR ESTATE" shall mean all the estate, right, title and interest of
     the Owner Lessor in, to and under the Undivided Interest, the Ground
     Interest and the Operative Documents and the South Point Ground Lease,
     including all funds advanced to the Owner Lessor by the Owner
     Participant, all installments and other payments of Periodic Rent,
     Supplemental Rent or Termination Value under the Facility Lease,
     condemnation awards, purchase price, sale proceeds, insurance proceeds
     and all other proceeds, rights and interests of any kind for or with
     respect to the estate, right, title and interest of the Owner Lessor in,
     to and under the Undivided Interest, the Ground Interest and the
     Operative Documents and the South Point Ground Lease and any of the
     foregoing, but shall not include Excepted Payments.

     "LESSOR MANAGER" shall mean Wells Fargo Bank Northwest, National
     Association not in its individual capacity, but solely as an independent
     manager under the LLC Agreement and each other Person that may from time
     to time be acting as Independent Manager in accordance with the
     provisions of the LLC Agreement.

     "LESSOR NOTE(S)" shall mean, individually or collectively as the context
     may require, the Initial Lessor Notes and Additional Lessor Notes, each
     issued pursuant to the Collateral Trust Indenture.

     "LESSOR PUT RENEWAL LEASE TERM" with respect to the Facility Lease,
     shall have the meaning specified in Section 15.3 of the Facility Lease.

     "LIEN" shall mean any mortgage, security deed, security title, pledge,
     lien, charge, encumbrance, lease, and security interest or title
     retention arrangement.

                                       22

<PAGE>

     "LLC AGREEMENT" shall mean the Amended and Restated Limited Liability
     Company Agreement, dated as of October 1, 2001, between the Owner
     Participant and the Lessor Manager, pursuant to which the Owner Lessor
     shall be governed.

     "MAJORITY IN INTEREST OF NOTEHOLDERS" as of any date of determination,
     shall mean Noteholders holding in aggregate more than 50% of the total
     outstanding principal amount of the Lessor Notes; provided, however, that
     any Note held by the Facility Lessee, the Guarantor or any Affiliate of
     either such party shall not be considered outstanding for purposes of
     this definition.

     "MAKE-WHOLE AMOUNT" shall mean, with respect to any Lessor Note subject
     to redemption pursuant to the Lease Indenture, an amount equal to the
     Discounted Present Value calculated for such Lessor Note being redeemed
     less the unpaid principal amount of such Lessor Note; provided that the
     Make Whole Amount shall not be less than zero. For purposes of this
     definition, the "Discounted Present Value" of any Lessor Note subject to
     redemption pursuant to the Lease Indenture shall be equal to the
     discounted present value, as of the date of redemption, of all principal
     and interest payments scheduled to become due in respect of such Lessor
     Note, after the date of such redemption calculated using a discount rate
     equal to the sum of (i) the yield to maturity on the U.S. Treasury
     security having an average life equal to the remaining average life of
     such Lessor Note and trading in the secondary market at the price closest
     to par and (ii) 50 basis points; provided, however, that if there is no
     U.S. Treasury security having an average life equal to the remaining
     average life of such Lessor Note, such discount rate shall be calculated
     using a yield to maturity interpolated or extrapolated on a straight-line
     basis (rounding to the nearest calendar month, if necessary) from the
     yields to maturity for two U.S. Treasury securities having average lives
     most closely corresponding to the remaining life of such Lessor Note and
     trading in the secondary market at the price closest to par.

     "MANAGER" shall mean CSFB.

     "MATERIAL ADVERSE CHANGE" and "MATERIAL ADVERSE EFFECT" shall mean a
     material adverse effect on (a) the economic prospects, operations,
     assets, financial position, results of operation or business of the
     Guarantor, including a material adverse effect on (i) the Facility, the
     Undivided Interest, the Facility Site or the Ground Interest which
     adversely affects the ability of the Guarantor to perform its obligations
     under the Operative Documents or (ii) the validity or enforceability of
     the Operative Documents and the South Point Ground Lease (giving effect
     to its assignment to the Owner Lessor pursuant to the Assignment
     Agreement), (b) the Indenture Estate or the Lessor Estate, the security
     interests in the Lessor Estate, or (c) with respect to the Owner
     Participant's (but not the Certificateholders') interest in the Undivided
     Interest, the residual value or remaining useful life of the Facility.

     "MEMBER INTEREST" shall mean the interest of the Owner Participant in
     the Owner Lessor.

                                       23

<PAGE>

     "MEMORANDUM OF FACILITY SITE LEASE" shall mean the Memorandum of
     Facility Site Lease (SP-1), dated as of the Closing Date, between the
     Owner Lessor, as landlord, and the Facility Lessee, as tenant, and filed
     with the Recorder of Mohave County, Arizona and the Tribal Recorder of
     the Tribe.

     "MEMORANDUM OF LEASE" shall mean the Memorandum of Facility Lease
     (SP-1), dated as of the Closing Date, between the Owner Lessor and the
     Facility Lessee filed with the Recorder of Mohave County, Arizona and the
     Tribal Recorder of the Tribe.

     "MOODY'S" shall mean Moody's Investors Service, Inc. and any successor
     thereto.

     "MULTIEMPLOYER PLAN" shall mean any Plan that is a multiemployer plan (as
      defined in Section 4001(a)(3) of ERISA).

     "NOTE REGISTER" shall have the meaning specified in Section 2.8 of the
     Collateral Trust Indenture.

     "NOTEHOLDER(S)" shall mean any holder of record (as reflected on the
     Note Register) from time to time of a Lessor Note outstanding.

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

     "OBLIGATIONS" shall have the meaning set forth in Section 2.2 of the
     Calpine Guaranty.

     "OBSOLESCENCE TERMINATION DATE" shall have the meaning specified in
     Section 14.1 of the Facility Lease.

     "OFFERING CIRCULAR" shall mean the Offering Circular, dated October 11,
     2001, with respect to the Certificates.

     "OFFICER" shall mean, solely with respect to the Guarantor, the
     Chairman, the President, any Vice President, the Chief Operating Officer,
     the Chief Financial Officer, the Treasurer, the Secretary, any Assistant
     Treasurer, any Assistant Secretary or the Controller or Principal
     Accounting Officer of the Guarantor.

     "OFFICER'S CERTIFICATE" shall mean with respect to any Person, a
     certificate signed (i) in the case of a corporation, by the Chairman of
     the Board, the President, or a Vice President of such Person or any
     Person authorized by or pursuant to the organizational documents, the
     by-laws or any resolution of the Board of Directors or Executive
     Committee of such Person (whether general or specific) to execute,
     deliver and take actions on behalf of such Person in respect of any of
     the Operative Documents, (ii) in the case of a partnership, by the
     Chairman of the Board of Directors, the President or any Vice President,
     the Treasurer or an Assistant Treasurer of a corporate general partner
     and (iii) in the case of an Indenture Trustee, a certificate signed by a
     Responsible Officer of such Indenture Trustee.

                                       24

<PAGE>

     "OFFICIAL RECORDS" shall have the meaning specified in the recitals to
     the Facility Site Lease.

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

     "OP GUARANTOR" shall mean Newcourt Credit Group USA Inc., or any Person
     that shall guaranty the obligations of a Transferor under the Operative
     Documents in accordance with Section 7.1 of the Participation Agreement.

     "OP LLC AGREEMENT" shall mean the Amended and Restated Limited Liability
     Company Agreement, dated as of October 1, 2001, between Newcourt Capital
     USA Inc. and the Lessor Manager, pursuant to which the Owner Participant
     shall be governed.

     "OP PARENT GUARANTY" shall mean, as applicable, (i) that certain
     guaranty of Newcourt Credit Group USA Inc., dated as of the Closing Date
     in favor of the Facility Lessee, the Owner Lessor, the Lessor Manager,
     the Trust Company, the Indenture Trustee, the Pass Through Trustees and
     the Certificateholders, or (ii) any other guaranty agreement provided by
     an OP Guarantor in form and substance substantially in the form of
     Exhibit G to the Participation Agreement.

     "OPERATIVE DOCUMENTS" shall mean the Participation Agreement, the
     Assignment Agreement, the Facility Lease, the Certificates, the Facility
     Site Lease, the Collateral Trust Indenture, the Lessor Notes, the Pass
     Through Trust Agreements, the LLC Agreement, the Tax Indemnity Agreement,
     the Calpine Guaranty, the OP Parent Guaranty (if any), the Certificate
     Purchase Agreement, and the Ownership and Operation Agreement.

     "OPERATOR" shall mean Calpine or any replacement Operator appointed
     pursuant to the Operative Documents.

     "OPINION OF COUNSEL" shall mean, with respect to any Calpine Party, a
     written opinion (i) from Ronald W. Fischer or any other internal counsel
     of Calpine, as to matters contained in such opinions delivered at
     Closing, and as to all other matters, Thelen Reid & Priest LLP and/or
     Davis Wright & Tremaine LLP, or any other outside legal counsel
     reasonably acceptable to the Owner Participant, (ii) in form and
     substance (with respect to qualifications, exception, assumption and the
     like) substantially equivalent to the legal opinions delivered at
     Closing, with any material modification or supplements thereto to be
     reasonably acceptable to the Owner Participant, or in any such other form
     as may be reasonably acceptable to the Owner Participant, and (iii) the
     scope of which shall cover due authorization, execution, delivery and
     enforceability of the applicable agreement(s), and exemption from
     regulation, in each case, substantially in the form set forth in the
     opinions delivered at Closing with any material modifications thereto to
     be reasonably acceptable to the Owner Participant.

     "OPTIONAL IMPROVEMENT" with respect to the Facility Lease, shall have
     the meaning specified in Section 8.2 of the Facility Lease.

                                       25

<PAGE>

     "ORGANIC DOCUMENT" shall mean, with respect to any Person that is a
     corporation, its certificate of incorporation, its by-laws and all
     shareholder agreements, voting trusts and similar arrangements applicable
     to any of its authorized shares of capital stock; with respect to any
     Person that is a limited partnership, its certificate of limited
     partnership and partnership agreement; with respect to any Person that is
     a limited liability company, its certificate of formation and its limited
     liability company agreement, in each case, as from time to time amended,
     supplemented, amended and restated, or otherwise modified and in effect
     from time to time; and with respect to any Person that is a business
     trust, its certificate of business trust and its trust agreement, in each
     case, as from time to time amended, supplemented, amended and restated,
     or otherwise modified and in effect from time to time.

     "OTHER CALPINE GUARANTIES" shall mean collectively, the Other South
     Point Calpine Guaranties, the Broad River Calpine Guaranties and the
     RockGen Calpine Guaranties.

     "OTHER FACILITY LEASES" shall mean collectively, the Other South Point
     Facility Leases, the Broad River Facility Leases and the RockGen Facility
     Leases.

     "OTHER OWNER LESSORS" shall mean collectively, the Other South Point
     Owner Lessors, the Broad River Owner Lessors and the RockGen Owner
     Lessors.

     "OTHER SOUTH POINT ASSIGNMENT AGREEMENTS " shall mean each of the
     assignment agreements executed and delivered pursuant to the Other South
     Point Participation Agreements.

     "OTHER SOUTH POINT CALPINE GUARANTIES" shall mean the other Calpine
     guaranty and payment agreements executed and delivered by Calpine
     pursuant to the Other South Point Participation Agreements.

     "OTHER SOUTH POINT COLLATERAL TRUST INDENTURES" shall mean each of the
     collateral trust indentures executed and delivered pursuant to the Other
     South Point Participation Agreements.

     "OTHER SOUTH POINT FACILITY LEASES" shall mean the other South Point
     facility lease agreements, dated as of October 18, 2001, by and between
     the Other South Point Owner Lessors and the Facility Lessee, pursuant to
     which the Other South Point Owner Lessors will lease the Other South
     Point Undivided Interests to the Facility Lessee.

     "OTHER SOUTH POINT FACILITY SITE LEASES" shall mean the other facility
     site leases, dated as of October 18, 2001, by and between the Other South
     Point Owner Lessors and the Facility Lessee pursuant to which the Other
     South Point Owner Lessors will lease the Other South Point Ground
     Interests to the Facility Lessee.

     "OTHER SOUTH POINT GROUND INTERESTS" shall mean the undivided leasehold
     interests in the Facility Site not conveyed to the Owner Lessor under the
     Facility Site Lease.

     "OTHER SOUTH POINT INDENTURE TRUSTEES" shall mean each of the indenture
     trustees relating to the Other South Point Collateral Trust Indentures.

                                       26

<PAGE>

     "OTHER SOUTH POINT LEASE TRANSACTIONS" shall mean the transactions
     involving the assignment and transfer of the Other South Point Undivided
     Interests and the Other South Point Ground Interests to the Other South
     Point Owner Lessors, and the lease of the Other South Point Undivided
     Interests and the Other South Point Ground Interest to the Facility
     Lessee on substantially the same terms and conditions as under, and dated
     the same date as, the Overall Transaction.

     "OTHER SOUTH POINT LESSOR MANAGERS" shall mean each of the lessor
     managers acting on behalf of the Other South Point Owner Lessors pursuant
     to the Other South Point Operative Documents.

     "OTHER SOUTH POINT OWNER LESSORS" shall mean South Point OL-2, LLC,
     South Point OL-3, LLC and South Point OL-4, LLC.

     "OTHER SOUTH POINT OWNER PARTICIPANTS" shall mean SBR OP-2, LLC, SBR
     OP-3, LLC and SBR OP-4, LLC.

     "OTHER SOUTH POINT OPERATIVE DOCUMENTS" shall mean the other "Operative
     Documents" for each of the Other South Point Lease Transactions.

     "OTHER SOUTH POINT PARTICIPATION AGREEMENTS" shall mean a collective
     reference to each of the other three separate participation agreements
     entered into by the Facility Lessee, the applicable Other South Point
     Owner Lessor, the Other South Point Lessor Manager, Other South Point
     Owner Participant, Other South Point Indenture Trustee, Pass Through
     Trustees and Calpine and designated Participation Agreement (SP-2),
     Participation Agreement (SP-3) and Participation Agreement (SP-4), each
     dated as of the Closing Date, pursuant to which, among other things, the
     Facility Lessee has agreed to (a) cause CCFC to assign and transfer to
     the applicable Other South Point Owner Lessors certain undivided
     leasehold interests in the Facility and the Facility Site, and (b) lease
     from the applicable Other South Point Owner Lessors such undivided
     leasehold interest in the Facility and the Facility Site pursuant to the
     Other South Point Facility Leases.

     "OTHER SOUTH POINT UNDIVIDED INTERESTS" shall mean the undivided
     leasehold interest in the Facility not conveyed to the Owner Lessor under
     the Assignment Agreement.

     "OVERALL TRANSACTION" shall mean all of the transactions contemplated by
     the Operative Documents and the South Point Ground Lease (giving effect
     to its assignment to the Owner Lessor pursuant to the Assignment
     Agreement).

     "OVERDUE RATE" shall mean a rate per annum equal to the prime commercial
     lending rate of the Chase Manhattan Bank (as publicly announced to be
     effect from time to time, such rate to be adjusted automatically, without
     notice, on the effective date of any change in such rate) plus 1%.

     "OWNER LESSOR" shall mean South Point OL-1, LLC, a Delaware limited
     liability company created for the benefit of the Owner Participant.

                                       27

<PAGE>

     "OWNER LESSOR'S ACCOUNT" shall mean Wells Fargo Bank Northwest, National
     Association, Salt Lake City, Utah, ABA # 121-000-248, Account: Corporate
     Trust Services, Account # 051-0922115, Credit to: South Point OL-1, LLC.

     "OWNER LESSOR'S INTEREST" shall mean the Owner Lessor's right, title and
     interest in and to the Undivided Interest and the Ground Interest.

     "OWNER LESSOR'S LIEN(S)" individually or collectively as the context may
     require, shall mean any Lien on the Lessor Estate, the Facility Site or
     the Easement, or any part of any thereof or interest therein arising as a
     result of (i) Taxes against or affecting the Owner Lessor, the Trust
     Company or the Lessor Manager or any Affiliate thereof that are not
     related to, or that are in violation of, any Operative Document or the
     South Point Ground Lease (giving effect to its assignment to the Owner
     Lessor pursuant to the Assignment Agreement) or the transactions
     contemplated thereby, (ii) Claims against or any act or omission of the
     Owner Lessor, the Trust Company or the Lessor Manager or Affiliate
     thereof that is not related to, or that is in violation of, any Operative
     Document or the South Point Ground Lease (giving effect to its assignment
     to the Owner Lessor pursuant to the Assignment Agreement) or the
     transactions contemplated thereby or that is in breach of any covenant or
     agreement of the Owner Lessor, the Trust Company or the Lessor Manager
     specified therein, (iii) Taxes imposed upon the Owner Lessor, the Trust
     Company or the Lessor Manager or any Affiliate thereof that are not
     indemnified against by the Facility Lessee pursuant to any Operative
     Document or (iv) Claims against or affecting the Owner Lessor, the Trust
     Company or the Lessor Manager or any Affiliate thereof arising out of the
     voluntary or involuntary transfer by the Owner Lessor, the Trust Company
     or the Lessor Manager of any portion of the interest of the Owner Lessor
     in the Owner Lessor's Interest, other than pursuant to the Operative
     Documents and the South Point Ground Lease.

     "OWNER LESSOR'S PERCENTAGE" shall mean 25%.

     "OWNER PARTICIPANT" shall mean SBR OP-1, LLC, a Delaware limited
     liability company.

     "OWNER PARTICIPANT'S ACCOUNT" shall mean the account maintained by the
     Owner Participant at the bank specified with respect thereto on Schedule
     1-C to the Participation Agreement, or such other account of the Owner
     Participant, as the Owner Participant may from time to time specify in a
     notice to the Indenture Trustee pursuant to Section 9.5 of the Collateral
     Trust Indenture.

     "OWNER PARTICIPANT'S COMMITMENT" shall mean the Owner Participant's
     investment in the Owner Lessor contemplated by Section 2.1(a) of the
     Participation Agreement.

     "OWNER PARTICIPANT'S LIEN(S)" individually or collectively as the
     context may require, shall mean any Lien on the Lessor Estate, the
     Facility Site or the Easement, or any part of any thereof or interest
     therein arising as a result of (i) Claims against or any act or omission
     of the Owner Participant that is not related to, or that is in violation
     of, any Operative Document or the South Point Ground Lease or the
     transactions contemplated

                                       28

<PAGE>

     thereby or that is in breach of any covenant or agreement of the Owner
     Participant set forth therein, (ii) Taxes against the Owner Participant
     that are not indemnified against by the Facility Lessee pursuant to the
     Operative Documents or (iii) Claims against or affecting the Owner
     Participant arising out of the voluntary or involuntary transfer by the
     Owner Participant of any portion of the interest of the Owner Participant
     in the Member Interest, other than any transfer (x) pursuant to the
     exercise of any of the Facility Lessee's (or any Affiliate thereof)
     rights under the Operative Documents or (y) during the continuance of a
     Lease Event of Default.

     "OWNER PARTICIPANT'S NET ECONOMIC RETURN" shall mean the Owner
     Participant's anticipated (i) after-tax yield, calculated according to
     the multiple investment sinking fund method of analysis, and (ii)
     periodic GAAP income and aggregate after-tax cash flow.

     "OWNERSHIP AND OPERATION AGREEMENT" shall mean the Ownership and
     Operation Agreement, dated as of October 18, 2001, among the Facility
     Lessee, the Owner Lessor and the Other South Point Owner Lessors.

     "OWNERSHIP INTEREST" shall mean, with respect to the Facility Lessee (or
     any assigns of the Facility Lessee), any and all equity interest in the
     Facility Lessee (or such assignee of the Facility Lessee) howsoever
     designated (whether capital stock, partnership interest, member interest
     or any equivalent interest).

     "PARTICIPATION AGREEMENT" shall mean the Participation Agreement, dated
     as of October 18, 2001, among the Facility Lessee, the Guarantor, the
     Owner Lessor, the Owner Participant, Wells Fargo Bank Northwest, National
     Association, not in its individual capacity, except as expressly provided
     therein, but solely as Lessor Manager, State Street Bank and Trust
     Company of Connecticut, as Indenture Trustee, and State Street Bank and
     Trust Company of Connecticut, as Pass Through Trustees.

     "PASS THROUGH COMPANY" shall mean State Street Bank and Trust Company of
     Connecticut, National Association, in its individual capacity, together
     with its successors and permitted assigns.

     "PASS THROUGH TRUST AGREEMENT" shall mean one or more, as the context
     may require, of (i) the Pass Through Trust Agreement A, dated as of
     October 18, 2001, and (ii) the Pass Through Trust Agreement B, dated as
     of October 18, 2001, in each case between the Facility Lessee and a Pass
     Through Trustee.

     "PASS THROUGH TRUSTEES" shall mean State Street Bank and Trust Company
     of Connecticut, National Association, not in its individual capacity, but
     solely as Pass Through Trustees under each of the Pass Through Trust
     Agreements, and each other Person that may from time to time be acting as
     a Pass Through Trustee in accordance with the provisions of a Pass
     Through Trust Agreement.

     "PASS THROUGH TRUSTS" shall mean the pass through trusts created
     pursuant to the Pass Through Trust Agreements.

                                       29

<PAGE>

     "PAYING AGENT" shall have the meaning set forth in Section 2.6 of the
     Collateral Trust Indenture.

     "PERIODIC RENT" with respect to the Facility Lease, shall mean the sum
     of Basic Rent and Renewal Rent, if any, as specified in Schedule 1 to the
     Facility Lease.

     "PERMIT" shall mean any action, approval, certificate, consent, waiver,
     exemption, variance, franchise, order, permit, authorization, right or
     license of or from, and any filing with a Governmental Entity.

     "PERMITTED CLOSING DATE LIENS" shall mean Permitted Liens described in
     clause (a), (b), (d), (f), (g), (i), (j), (k), (l), (m), (n) and (o) of
     the definition thereof.

     "PERMITTED ENCUMBRANCES" shall mean with respect to the Facility Site,
     all matters shown as exceptions on Schedule B to each of the Title
     Policies as in effect on the Closing Date.

     "PERMITTED INVESTMENTS" shall mean investments in securities that are:
     (i) direct obligations of the United States or any agency thereof; (ii)
     obligations fully guaranteed by the United States or any agency thereof;
     (iii) certificates of deposit or bankers acceptances issued by commercial
     banks (or any of their affiliates) organized under the laws of the United
     States or of any political subdivision thereof or under the laws of
     Canada, Japan, Switzerland or any country that is a member of the
     European Economic Community having a combined capital and surplus of at
     least $250 million and having long-term unsecured debt securities then
     rated "A" or better by S&P or "A2" or better by Moody's (but at the time
     of investment not more than $25,000,000 may be invested in such
     certificates of deposit from any one bank); (iv) repurchase obligations
     with a term of not more than seven days for underlying securities of the
     types described in clauses (i) and (ii) above, entered into with any
     financial institution meeting the qualifications specified in clause
     (iii) above; (v) open market commercial paper of any corporation
     incorporated or doing business under the laws of the United States or of
     any political subdivision thereof having a rating of at least "A-1" from
     S&P and "P-1" from Moody's (but at the time of investment not more than
     $25,000,000 may be invested in such commercial paper from any one
     company); (vi) auction rate securities or money market preferred stock
     having one of the two highest ratings obtainable from either S&P or
     Moody's (or, if at any time neither S&P nor Moody's is rating such
     obligations, then from another nationally recognized rating service
     acceptable to the Depositary); and (vii) investments in money market
     funds or money market mutual funds sponsored by any securities broker
     dealer of recognized national standing (or an affiliate thereof), having
     an investment policy that requires substantially all the invested assets
     of such fund to be invested in investments described in any one or more
     of the foregoing clauses having a rating of "A" or better by S&P or "A2"
     or better by Moody's.

     "PERMITTED LIENS" shall mean (a) the rights and interests of the parties
     as provided in the Operative Documents and the South Point Ground Lease,
     as well as the rights of sublessees and/or assignees to the extent set
     forth in or expressly permitted pursuant to the Facility Lease or any
     other Operative Document, (b) as to the Facility Lessee, Owner

                                       30

<PAGE>

      Lessor's Liens, Owner Participant's Liens and Indenture Trustee's Liens,
     (c) Liens for any tax, assessment or other governmental charge, either
     secured by a bond reasonably acceptable to the Indenture Trustee and the
     Pass Through Trustees and, so long as no Lease Indenture Event of Default
     which is not a Lease Event of Default exists, the Owner Lessor, or not
     yet due or being contested in good faith and by appropriate proceedings,
     so long as (i) such proceedings shall not reasonably be expected to give
     rise to criminal liability or material civil liability on the part of the
     Owner Lessor, the Owner Participant, the Lessor Manager, the Trust
     Company, the Indenture Trustee, the Pass Through Trustees or any
     Certificateholders, and would not otherwise reasonably be expected to
     have a Material Adverse Effect, or (ii) adequate reserves consistent with
     GAAP requirements have been established and are maintained, so as to
     assure such Persons that any taxes, assessments or other charges
     determined to be due will be promptly paid in full when such contest is
     determined, (d) materialmen's, mechanics', workers', repairmen's,
     employees' or other like Liens arising in the ordinary course of business
     or in connection with the maintenance or repair of the Facility, for
     amounts not yet due or for amounts being contested in good faith and by
     appropriate proceedings, so long as (i) such proceedings shall not
     reasonably be expected to give rise to criminal liability or material
     civil liability on the part of the Owner Lessor, the Owner Participant,
     the Lessor Manager, the Trust Company, the Indenture Trustee, the Pass
     Through Trustees or any Certificateholders, and would not otherwise
     reasonably be expected to have a Material Adverse Effect, and (ii)
     adequate reserves consistent with GAAP requirements have been established
     and are maintained, so as to ensure that any amounts determined to be due
     will be promptly paid in full when such contest is determined, (e) Liens
     arising out of judgments or awards, but only so long as an appeal or
     proceeding for review is being prosecuted in good faith and so long as
     (i) such proceedings shall not reasonably be expected to give rise to
     criminal liability or material civil liability on the part of the Owner
     Lessor, the Owner Participant, the Lessor Manager, the Trust Company, the
     Indenture Trustee, the Pass Through Trustees or any Certificateholders,
     and would not otherwise reasonably be expected to have a Material Adverse
     Effect, and (ii) adequate reserves consistent with GAAP requirements have
     been established and are maintained, so as to ensure that any amounts
     determined to be due will be promptly paid in full when such contest is
     determined, or are fully covered by insurance, (f) mineral rights the use
     and enjoyment of which do not materially interfere with the use and
     enjoyment of the Facility, (g) Permitted Encumbrances, (h) Liens,
     deposits or pledges to secure statutory obligations or performance of
     bids, tenders, contracts (other than for the repayment of borrowed money)
     or leases, or for purposes of like general nature in the ordinary course
     of its business, (i) existing Liens that have been disclosed to the
     Transaction Parties prior to the Closing Date and which are reasonably
     acceptable to the Transaction Parties, (j) Liens incident to the ordinary
     course of business that are not incurred in connection with the obtaining
     of any loan, advance or credit in respect of borrowed money permitted to
     be incurred pursuant to the Operative Documents so long as such Liens (x)
     do not in the aggregate materially impair the use of the property or
     assets of the Facility Lessee or the value of such property or assets for
     the purposes of such business and (y) shall not reasonably be expected to
     give rise to criminal liability or unindemnified, material civil
     liability on the part of the Owner Lessor, the Owner Participant, the
     Lessor Manager, the Trust Company, the Indenture Trustee, the Pass
     Through Trustees or any

                                       31
<PAGE>

     Certificateholders, and would not otherwise reasonably be expected to
     have a Material Adverse Effect, (k) the interests of the Other Owner
     Lessors and the Other Indenture Trustees in the Facility, the Facility
     Site and the Ownership and Operation Agreement, (l) the interests of the
     Facility Lessee, the Other Owner Participants, the Other Owner Lessors,
     the Other Lessor Managers, the Other Indenture Trustees, and Pass Through
     Trustees under any of the Other Operative Documents, (m) the Ownership
     and Operation Agreement, (n) the interest of the co-owners of the
     Facility as tenants in common in the Facility and the rights of such
     owners under the Ownership and Operation Agreement and (o) any rights of
     the Tribe with respect to the Facility and Facility Site.

     "PERSON" shall mean any individual, corporation, cooperative,
     partnership, joint venture, association, joint-stock company, limited
     liability company, other entity, trust, unincorporated organization or
     government or any agency or political subdivision thereof or any other
     entity.

     "PLAN" shall mean any pension plan as defined in Section 3(2) of ERISA,
     which is maintained or contributed to by (or to which there is an
     obligation to contribute of) the Facility Lessee or a Subsidiary of the
     Facility Lessee or an ERISA Affiliate, and each such plan for the five
     year period immediately following the latest date on which Facility
     Lessee, or a Subsidiary of Facility Lessee or an ERISA Affiliate
     maintained, contributed to or had an obligation to contribute to such
     plan.

     "POWER MARKET CONSULTANT" shall mean Pace Energy Global Services, LLC.

     "POWER MARKETING AGREEMENT" shall mean the Power Marketing Agreement,
     dated as of October 20, 1999, by and between CES (as successor by merger
     to Calpine Power Services Company) and CCFC.

     "PREFERRED STOCK", as applied to the Capital Stock of any corporation,
     means Capital Stock of any class or classes (however designated) which is
     preferred as to the payment of dividends, or as to the distribution of
     assets upon any voluntary or involuntary liquidation or dissolution of
     such corporation, over shares of Capital Stock of any other class of such
     corporation.

     "PRICING ASSUMPTIONS" shall mean the "Pricing Assumptions" (attached as
     Schedule 2 to the Participation Agreement) for the Facility Lease.

     "PRIME RATE" shall mean the rate of interest publicly announced by
     Citibank, N.A. from time to time as its prime rate.

     "PROCEEDS" shall mean the proceeds from the sale of the Certificates by
     the Pass Through Trust to the Certificateholders on the Closing Date.

     "PROPORTIONAL RENTAL AMOUNT" shall have the meaning set forth in Section
     3.2(c) of the Facility Lease.

     "PROPOSED TAX LAW CHANGE" shall mean a Tax Law Change (a) that has been
     reported out of the Senate Finance Committee of the House Ways and Means
     Committee, (b) that

                                       32

<PAGE>

     has been included in the issuance or amendment of a proposed Treasury
     Regulation, (c) that is part of a bill that has been introduced into the
     House of Representatives or the Senate and which has been publicly
     endorsed by the Executive Branch or the Department of Treasury, or (d)
     with respect to which a notice of a specific proposed change in
     administrative guidance has been issued by the Internal Revenue Service
     or the Department of Treasury and which has been published in the Federal
     Register.

     "PRUDENT INDUSTRY PRACTICE" shall mean, at a particular time, (a) any of
     the practices, methods and acts engaged in or approved by a significant
     portion of the competitive electric generating industry at such time, or
     (b) with respect to any matter to which clause (a) does not apply, any of
     the practices, methods and acts which, in the exercise of reasonable
     judgment at the time the decision was made, could have been expected to
     accomplish the desired result at a reasonable cost consistent with good
     business practices, reliability, safety and expedition. "Prudent Industry
     Practice" is not intended to be limited to the optimum practice, method
     or act to the exclusion of all others, but rather to be a spectrum of
     possible practices, methods or acts having due regard for, among other
     things, manufacturers' warranties and the requirements of any
     Governmental Entity of competent jurisdiction.

     "PUHCA" shall mean the Public Utility Holding Company Act of 1935, as
     amended.

     "QUALIFYING CASH BIDS" with respect to the Facility Lease, shall have
     the meaning specified in Section 13.2 of the Facility Lease.

     "RATING AGENCIES" shall mean S&P and Moody's.

     "REASONABLE BASIS" for a position shall exist if tax counsel may
     properly advise reporting such position on a tax return in accordance
     with Formal Opinion 85-352 issued by the Standing Committee on Ethics and
     Professional Responsibility of the American Bar Association (or any
     successor to such opinion).

     "REBUILDING CLOSING DATE" with respect to the Facility Lease, shall have
     the meaning specified in Section 10.3(e) of the Facility Lease.

     "RECEIVING PARTY" shall have the meaning set forth in Section 14.21 of
     the Participation Agreement.

     "REDEMPTION DATE" shall mean, when used with respect to any Note to be
     redeemed, the date fixed for such redemption by or pursuant to the
     Collateral Trust Indenture or the respective Note, which date shall be a
     Termination Date.

     "REFINANCING INDEBTEDNESS" means Indebtedness that refunds, refinances,
     replaces, renews, repays or extends (including pursuant to any defeasance
     or discharge mechanism) (collectively, "refinances," and "refinanced"
     shall have a correlative meaning) any Indebtedness of the Guarantor or a
     Restricted Subsidiary existing on the date of the Guaranty or Incurred in
     compliance with the Indenture, dated as of August 10, 2000, between the
     Guarantor and Wilmington Trust Company, as Trustee (including
     Indebtedness of the Guarantor that refinances Indebtedness of any
     Restricted Subsidiary

                                       33

<PAGE>

     and Indebtedness of any Restricted Subsidiary that refinances
     Indebtedness of another Restricted Subsidiary) including Indebtedness
     that refinances Refinancing Indebtedness; provided, however, that (i) if
     the Indebtedness being refinanced is contractually subordinated in right
     of payment to the Obligations, the Refinancing Indebtedness shall be
     contractually subordinated in right of payment to such Obligations to at
     least the same extent as the Indebtedness being refinanced, (ii) the
     Refinancing Indebtedness is scheduled to mature either (a) no earlier
     than the Indebtedness being refinanced or (b) after the Stated Maturity
     of the Obligations, (iii) the Refinancing Indebtedness has an Average
     Life at the time such Refinancing Indebtedness is Incurred that is equal
     to or greater than the Average Life of the Indebtedness being refinanced
     and (iv) such Refinancing Indebtedness is in an aggregate principal
     amount (or if issued with original issue discount, an aggregate issue
     price) that is equal to or less than the aggregate principal amount (or
     if issued with original issue discount, the aggregate accreted value)
     then outstanding (plus fees and expenses, including any premium, swap
     breakage and defeasance costs) under the Indebtedness being refinanced;
     and provided, further, that Refinancing Indebtedness shall not include
     (x) Indebtedness of a Subsidiary of the Guarantor that refinances
     Indebtedness of the Guarantor or (y) Indebtedness of the Guarantor or a
     Restricted Subsidiary that refinances Indebtedness of an Unrestricted
     Subsidiary.

     "REGISTRAR" shall have the meaning set forth in Section 2.8 of the
     Collateral Trust Indenture.

     "REGULATORY EVENT OF LOSS" shall have meaning specified in clause (iv)
     of the definition of "Event of Loss".

     "RELATED PARTY" shall mean, with respect to any Person or its successors
     and assigns, an Affiliate of such Person or its successors and assigns
     and any director, officer, servant, employee or agent of that Person or
     any such Affiliate or their respective successors and assigns; provided
     that none of the Trust Company, the Lessor Manager or the Owner Lessor
     shall be treated as Related Parties to each other and none of the Trust
     Company, the Owner Lessor or the Lessor Manager shall be treated as a
     Related Party to any Owner Participant Equity Investor except that, for
     purposes of Section 9 of the Participation Agreement, the Owner Lessor
     will be treated as a Related Party to an Owner Participant to the extent
     that the Owner Lessor acts on the express direction or with the express
     consent of an Owner Participant.

     "RELEASE" shall mean any release, pumping, pouring, emptying, injecting,
     escaping, leaching, migrating, dumping, seepage, spill, flow, leak,
     discharge, disposal or emission.

     "RENEWAL RENT" with respect to the Facility Lease, shall mean the rent
     payable during any Renewal Lease Term, in each case as determined in
     accordance with Section 15.4 of the Facility Lease.

     "RENEWAL LEASE TERM" with respect to the Facility Lease, shall mean the
     First Renewal Lease Term, the Second Renewal Term, any FMV Renewal Lease
     Term or the Lessor Put Renewal Term.

                                       34

<PAGE>

     "RENEWAL SITE LEASE TERM(S)" individually or collectively as the context
     shall require, with respect to the Facility Site Lease, shall have the
     meaning set forth in Section 2.2(b) of the Facility Site Lease.

     "RENEWAL TERM" shall have the meaning set forth in Section 2.1(b) of the
     Facility Site Lease.

     "RENT" shall mean Basic Rent, Renewal Rent and Supplemental Rent.

     "RENT PAYMENT DATE" with respect to the Facility Lease, shall mean,
     January 18, 2002, each May 30 and November 30 occurring thereafter
     (through and including May 30, 2037) and October 18, 2037.

     "RENT PAYMENT PERIOD" with respect to the Facility Lease, shall mean (i)
     in the case of the first Rent Payment Period the period commencing on the
     Closing Date and ending on January 18, 2002 (ii) in the case of the
     second Rent Payment Period, the period commencing on January 19, 2002 and
     ending on May 30, 2002 and (iii) in all cases thereafter (except for the
     last Rent Payment Period which period shall commence on May 31, 2037 and
     end on, and include, October 18, 2001), each six-month period commencing
     on each Rent Payment Date through and including the following May 30 or
     November 30 as the case may be.

     "REPLACEMENT COMPONENT" shall have the meaning specified in Section 7.2
     of the Facility Lease.

     "REQUIRED IMPROVEMENT" with respect to the Facility Lease, shall have
     the meaning specified in Section 8.1 of the Facility Lease.

     "REQUISITION" shall have the meaning specified in clause (iii) of the
     definition of "Event of Loss".

     "RESPONSIBLE OFFICER" shall mean, with respect to any Person, (i) its
     Chairman of the Board, its President, any Senior Vice President, the
     Chief Financial Officer, any Vice President, the Treasurer or any other
     management employee (a) that has the power to take the action in question
     and has been authorized, directly or indirectly, by the Board of
     Directors or equivalent body of such Person, (b) working under the direct
     supervision of such Chairman of the Board, President, Senior Vice
     President, Chief Financial Officer, Vice President or Treasurer and (c)
     whose responsibilities include the administration of the Overall
     Transaction and (ii) with respect to the Pass Through Trustees and the
     Indenture Trustee an officer in their respective corporate trust
     departments.

     "RESTRICTED SUBSIDIARY" means any Subsidiary of the Guarantor that is
     not designated an Unrestricted Subsidiary by the Board of Directors.

     "REVENUES" shall have the meaning specified in clause (2) of the
     Granting Clause of the Collateral Trust Indenture.

                                       35

<PAGE>

     "ROCKGEN BILLS OF SALE" shall mean each of the bills of sale executed
     and delivered pursuant to the RockGen Participation Agreements.

     "ROCKGEN CALPINE GUARANTIES" shall mean the Calpine guaranty and payment
     agreements executed and delivered by Calpine pursuant to the RockGen
     Participation Agreements.

     "ROCKGEN COLLATERAL TRUST INDENTURES" shall mean each of the collateral
     trust indentures executed and delivered pursuant to the RockGen
     Participation Agreements.

     "ROCKGEN FACILITY LEASES" shall mean a collective reference to each of
     the four facility lease agreements, dated as of October 18, 2001, by and
     between the applicable RockGen Owner Lessor and the RockGen Facility
     Lessee, pursuant to which the RockGen Facility Lessee will lease the
     applicable RockGen Ground Interests to applicable RockGen Owner Lessor.

     "ROCKGEN FACILITY LESSEE" shall mean RockGen Energy LLC.

     "ROCKGEN FACILITY SITE" shall have the meaning set forth in the recitals
     to the RockGen Facility Site Leases.

     "ROCKGEN FACILITY SITE LEASES" shall mean a collective reference to each
     of the four facility site leases, dated as of October 18, 2001, by and
     between the applicable RockGen Owner Lessor and the RockGen Facility
     Lessee, pursuant to which RockGen Facility Lessee will lease the
     applicable RockGen Ground Interest to the applicable RockGen Owner Lessor.

     "ROCKGEN GROUND INTERESTS" shall mean the undivided leasehold interests
     in the RockGen Facility Site conveyed to the RockGen Owner Lessors under
     the RockGen Facility Site Leases.

     "ROCKGEN INDENTURE TRUSTEES" shall mean each of the indenture trustees
     relating to the RockGen Collateral Trust Indentures.

     "ROCKGEN LESSOR MANAGERS" shall mean each of the lessor managers acting
     on behalf of the RockGen Owner Lessors pursuant to the RockGen Operative
     Documents.

     "ROCKGEN OWNER LESSORS" shall mean RockGen OL-1, LLC RockGen OL-2, LLC,
     RockGen OL-3, LLC and RockGen OL-4, LLC.

     "ROCKGEN OWNER PARTICIPANTS" shall mean SBR OP-1, LLC, SBR OP-2, LLC,
     SBR OP-3, LLC and SBR OP-4, LLC.

     "ROCKGEN LEASE TRANSACTIONS" shall mean the transactions involving the
     transfer of the RockGen Undivided Interests and the lease of the RockGen
     Ground Interests to the RockGen Owner Lessors, and the simultaneous lease
     of the RockGen Undivided Interests to the RockGen Facility Lessee and the
     simultaneous sublease of the RockGen Ground

                                       36

<PAGE>

     Interest to the RockGen Facility Lessee on substantially the same terms
     and conditions as under, and dated the same date as, the RockGen Overall
     Transaction.

     "ROCKGEN OPERATIVE DOCUMENTS" shall mean the other "Operative Documents"
     for each of the RockGen Lease Transactions.

     "ROCKGEN OVERALL TRANSACTION" shall mean all of the transactions
     contemplated by the RockGen Operative Documents.

     "ROCKGEN PARTICIPATION AGREEMENTS" shall mean a collective reference to
     each of the other three separate participation agreements entered into by
     the RockGen Facility Lessee, the applicable RockGen Owner Lessor, the
     applicable RockGen Lessor Manager, the applicable RockGen Owner
     Participant, the applicable RockGen Indenture Trustee, the Pass Through
     Trustees and Calpine and designated Participation Agreement (RG-1),
     Participation Agreement (RG-2), Participation Agreement (RG-3) and
     Participation Agreement (RG-4), each dated as of the Closing Date,
     pursuant to which, among other things, the RockGen Facility Lessee has
     agreed to (a) sell to the applicable RockGen Owner Lessors certain
     undivided interests in the RockGen Facility, and (b) lease from the
     applicable RockGen Owner Lessors such undivided interest in the RockGen
     Facility pursuant to the RockGen Facility Leases.

     "ROCKGEN UNDIVIDED INTERESTS" shall mean the undivided ownership
     interests in the RockGen Facility conveyed to the RockGen Owner Lessors
     under the RockGen Bills of Sale.

     "SALE/LEASEBACK TRANSACTION" means an arrangement relating to property
     now owned or hereafter acquired whereby the Guarantor or a Subsidiary
     transfers such property to a Person and leases it back from such Person,
     other than leases for a term of not more than 36 months or between the
     Guarantor and a Wholly Owned Subsidiary or between Wholly Owned
     Subsidiaries.

     "SCHEDULED CLOSING DATE" shall mean October 18, 2001.

     "SEC" shall mean the Securities and Exchange Commission.

     "SECOND RENEWAL LEASE TERM" with respect to the Facility Lease, shall
     have the meaning specified in Section 15.1(b) of the Facility Lease.

     "SECOND WINTERGREEN RENEWAL LEASE OPTION" with respect to the Facility
     Site Lease, shall have the meaning set forth in Section 2.2(a)(ii) of the
     Facility Site Lease.

     "SECTION 467 INTEREST" with respect to the Facility Lease, shall have
     the meaning set forth in Section 3.2(d) of the Facility Lease.

     "SECTION 467 LOAN" with respect to the Facility Lease, shall have the
     meaning specified in Section 3.2(d) of the Facility Lease.

                                       37

<PAGE>

     "SECURED INDEBTEDNESS" shall have the meaning specified in Section 1(b)
     of the Collateral Trust Indenture.

     "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

     "SEVERABLE IMPROVEMENT" shall mean any Improvement that is readily
     removable without causing material damage to the Facility.

     "SIGNIFICANT LEASE DEFAULT" shall mean, with respect to the Facility
     Lease, (i) an event that is, or solely with the passage of time or the
     giving of notice (or both) would become, a "Lease Event of Default" under
     clauses (a), (b), (c), (g), (h) or (k) of Section 16 of the Facility
     Lease, (ii) the failure of the Facility Lessee to comply in any material
     respect with its obligations under Section 6 of the Facility Lease and
     (iii) the occurrence and continuation of a Significant Lease Default
     under any Other South Point Facility Lease.

     "SIGNIFICANT SUBSIDIARY" means any Subsidiary (other than an
     Unrestricted Subsidiary) that would be a "Significant Subsidiary" of the
     Guarantor within the meaning of Rule 1-02 under Regulation S-X
     promulgated by the SEC.

     "S&P" shall mean Standard & Poor's Ratings Services, a division of The
     McGraw-Hill Companies, Inc. or any successor thereto.

     "SOUTH POINT" shall mean South Point Energy Center, LLC.

     "SOUTH POINT ENERGY" shall have the meaning set forth in the first
     paragraph of the Facility Site Lease.

     "SOUTH POINT GROUND LEASE" shall mean the Amended and Restated Ground
     Lease Agreement dated as of August 4, 1999 and approved by the Bureau of
     Indian Affairs on August 19, 1999, as amended by Lease Modification No. 1
     executed by the Tribe as of May 3, 2001, and Lease Modification No. 2
     executed by the Tribe as of October 11, 2001, by and between the Tribe
     and CCFC (as successor in interest to Calpine South Point, LLC).

     "SPECIAL LESSEE TRANSFER" shall have the meaning specified in Section
     13.2 of the Participation Agreement.

     "SPECIAL LESSEE TRANSFER AMOUNT" shall mean for any date, the amount
     determined as follows (but without duplication):

     (a)  (i) if the determination shall be a Termination Date, the
     Termination Value under the Facility Lease on such date, or (ii) if such
     date shall not be a Termination Date, the Termination Value under the
     Facility Lease on the immediately succeeding Termination Date; plus

     (b)  (i) any unpaid Basic Rent or Renewal Rent due before the date of
     determination plus (ii) if the determination date is a Rent Payment Date,
     the Basic Rent or Renewal Rent due on that date (to the extent payable in
     arrears); minus

                                       38

<PAGE>

     (c)  the sum of all outstanding principal, premium, if any, and accrued
     interest on the Lessor Notes, if any, on such determination date (in each
     case, if such determination date is a Rent Payment Date, before taking
     into account any Basic Rent or Renewal Rent due on such determination
     date).

     "SPECIAL LESSEE TRANSFER EVENT" shall mean the occurrence of (i) a
     Regulatory Event of Loss, (ii) a Burdensome Buyout Event under Section
     13.1 of the Facility Lease, or (iii) if the Owner Lessor has agreed to
     sell and the Facility Lessee has agreed to buy the Undivided Interest, a
     Burdensome Buyout Event under Section 13.2 of the Facility Lease.

     "STATED MATURITY" means, with respect to any security, the date
     specified in such security as the fixed date on which the principal of
     such security is due and payable, including pursuant to any mandatory
     redemption provision (but excluding any provision providing for the
     repurchase of such security at the option of the holder thereof upon the
     happening of any contingency).

     "SUBSIDIARY" shall mean, with respect to any Person (the "parent"), any
     corporation or other entity of which sufficient securities or other
     ownership interests having ordinary voting power to elect a majority of
     the board of directors or other Persons performing similar functions are
     at the time directly or indirectly owned by such parent.

     "SUPPLEMENTAL FINANCING" shall have the meaning specified in Section
     11.1 of the Participation Agreement.

     "SUPPLEMENTAL RENT" shall mean any and all amounts, liabilities and
     obligations (other than Basic Rent and Renewal Rent) which the Facility
     Lessee assumes or agrees to pay under the Operative Documents (whether or
     not identified as "Supplemental Rent") to the Owner Lessor or any other
     Person, including, without limitation, Termination Value.

     "SURVEY" shall mean the ALTA/ACSM As-Built Land Title Survey of the
     Facility Site, to be dated July 24, 2001 which inter alia, will show the
     location of the Facility Site.

     "TAX" or "TAXEST" shall mean all fees (including license, documentation
     and registration fees), taxes (including, without limitation, income
     taxes, receipts, franchise, rental, turn over sales taxes, transaction
     privilege taxes, use taxes, stamp taxes, value-added taxes, excise taxes,
     ad valorem taxes and property taxes (personal and real, tangible and
     intangible)), licenses, exports, duties, recording charges, levies,
     assessments, withholdings , fees, assessments and other charges and
     impositions of any nature, plus all related interest, penalties, fines
     and additions to tax, now or hereafter imposed by any federal, state,
     local or foreign government, the Tribe or other taxing authority.

     "TAX ADVANCE" shall have the meaning specified in Section 9.2(g)(iii)(5)
     of the Participation Agreement.

     "TAX ASSUMPTIONS" shall mean the items described in Section 1 of the Tax
     Indemnity Agreement.

                                       39

<PAGE>

     "TAX BENEFIT" shall have the meaning set forth in Section 9.2(e) of the
     Participation Agreement.

     "TAX CLAIM" shall have the meaning set forth in Section 9.2(g)(i) of the
     Participation Agreement.

     "TAX EVENT" shall mean any event or transaction that will be a taxable
     transaction to the holders of the Lessor Notes (or any Certificateholder)
     or result in an adverse change in the tax characterization of the Pass
     Through Trust.

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

     "TAX INDEMNITY AGREEMENT" shall mean the Tax Indemnity Agreement (SP-1),
     dated as of the Closing Date, between the Facility Lessee and the Owner
     Participant.

     "TAX LAW CHANGE" shall have the meaning specified in Section 12(a) of
     the Participation Agreement.

     "TAX REPRESENTATION" shall mean each of the items described in Section 4
     of the Tax Indemnity Agreement.

     "TERM" with respect to the Facility Site Lease, shall have the meaning
     set forth in Section 2.1(b) of the Facility Site Lease.

     "TERMINATION DATE" with respect to the Facility Lease, shall mean each of
     the monthly dates during the Facility Lease Term identified as a
     "Termination Date" on Schedule 2 of the Facility Lease.

     "TERMINATION PAYMENT DATE" with respect to the Facility Lease, shall
     have the meaning specified in Section 10.2(a) of the Facility Lease.

     "TERMINATION VALUE" with respect to the Facility Lease and each
     Termination Date, shall mean the amount specified on Schedule 2 to the
     Facility Lease as the corresponding "Termination Value".

     "THIRD PARTY CONSENTS" shall mean the Consent Letter from the Tribe with
     respect to the Amended and Restated Ground Lease Agreement executed on or
     about August 4, 1999 between the Tribe, CCFC (as successor in interest to
     CPN South Point LLC, under that certain Assignment and Assumption
     Agreement of Amended and Restated Ground Lease Agreement by and between
     CPN South Point LLC as assignor and CCFC as assignee) (as amended by
     Lease Modification No. 1 dated May 3, 2001 between the Tribe and CCFC),
     the form of which is attached hereto as Exhibit M.

     "TIA" shall mean the Trust Indenture Act of 1939.

     "TITLE COMPANY" shall mean, First American Title Insurance Company.

                                       40

<PAGE>

     "TITLE POLICY" shall mean, the title insurance policy (#291-000-164004)
     dated as of October 18, 2001.

     "TRANSACTION COSTS" shall mean the following costs, to the extent
     substantiated or otherwise supported in reasonable detail:

     (i)      the reasonable costs of reproducing and printing the Operative
     Documents and the South Point Ground Lease (giving effect to its
     assignment to the Owner Lessor pursuant to the Assignment Agreement) and
     all costs and fees, including but not limited to filing and recording
     fees and recording, transfer, mortgage, intangible and similar taxes in
     connection with the execution, delivery, filing and recording of the
     Facility Lease, the Facility Site Lease, and any other Operative Document
     and the South Point Ground Lease (giving effect to its assignment to the
     Owner Lessor pursuant to the Assignment Agreement) and any other document
     required to be filed or recorded pursuant to the provisions hereof or of
     any other Operative Document and the South Point Ground Lease (giving
     effect to its assignment to the Owner Lessor pursuant to the Assignment
     Agreement) and any Uniform Commercial Code filing fees in respect of the
     perfection of any security interests created by any of the Operative
     Documents or as otherwise reasonably required by the Owner Lessor or the
     Indenture Trustee and surveyor fees;

     (ii)     the reasonable fees and expenses of Dewey Ballantine LLP, counsel
     to the Owner Participant and the Owner Lessor for their services
     rendered in connection with the negotiation, execution and delivery of
     the Participation Agreement and the other Operative Documents;

     (iii)    the reasonable fees and expenses of (a) Holland & Hart LLP Tribal
     counsel to the Facility Lessee, the Owner Lessor, the Owner Participant
     and the Initial Purchasers and (b) Fennemore Craig, Arizona counsel to
     the Facility Lessee, the Owner Lessor, the Owner Participant and the
     Initial Purchasers;

     (iv)     the reasonable fees and expenses of Thelen Reid & Priest LLP,
     counsel to the Facility Lessee and the Guarantor for their services
     rendered in connection with the negotiation, execution and delivery of
     the Participation Agreement and other Operative Documents;

     (v)      the reasonable fees and expenses of Davis Wright & Tremaine LLP,
     special regulatory counsel to the Facility Lessee;

     (vi)     the reasonable fees and expenses of Skadden, Arps, Slate, Meagher
     and Flom LLP, counsel to the Underwriter, for their services rendered in
     connection with the negotiation, execution and delivery of the
     Participation Agreement and the other Operative Documents;

     (vii)    the reasonable fees and expenses for services rendered in
     connection with the recording of the Memorandum of Lease, the Memorandum
     of Facility Site Lease and the other applicable Operative Documents and
     the South Point Ground Lease;

                                       41

<PAGE>

     (viii)   the reasonable fees and expenses of Bingham Dana LLP counsel for
     the Indenture Trustee and the Lease Indenture Company and the Pass
     Through Company and the Pass Through Trustees, for their services
     rendered in connection with the negotiation, execution and delivery of
     the Participation Agreement and the other Operative Documents;

     (ix)     the reasonable fees, expenses and disbursements of the Indenture
     Trustee and Pass Through Trustees in connection with the execution and
     delivery of the Participation Agreement and the other Operative Documents
     to which either one is or will be a party;

     (x)      the fees and expenses of the Engineering Consultant, for its
     services rendered in connection with delivering the Engineering Report
     required by Section 4.17 of the Participation Agreement;

     (xi)     the fees and expenses of the other consultants listed in Section
     4.17 of the Participation Agreement, for their respective services
     rendered in connection with delivering the reports required by such
     Section 4.17;

     (xii)    the fees and expenses of the Appraiser, for its services rendered
     in connection with delivering the Closing Appraisal required by Section
     4.15 of the Participation Agreement;

     (xiii)   the fees and expenses of the Environmental Consultant retained by
     the Owner Participant;

     (xiv)    the debt and equity arrangement fees set forth in the letter
     agreement dated July 24, 2001 between CSFB and Calpine, and its
     reasonable out-of-pocket costs and expenses payable to the Underwriter;

     (xv)     the reasonable underwriting fees, legal fees, expenses and
     disbursement of the Initial Purchasers and any discounts or commissions
     in connection with the sale of the Certificates;

     (xvi)    all reasonable costs and expenses incurred pursuant to the
     syndication and/or sale of the debt and equity;

     (xvii)   the fees and expenses of the Rating Agencies in connection with
     the rating of the Certificates;

     (xviii)  the out-of-pocket expenses of the Owner Participant, Indenture
     Trustee and the Pass Through Trustees incurred in connection with the
     Overall Transaction including cost of the title insurance and fees and
     expenses, if any, related to delivery of any non-consolidation opinions;
     and

     (xix)    the fees and expenses set forth in the letter agreement dated
     August 1, 2001 between Newcourt Capital Securities, Inc. and Calpine.

                                       42

<PAGE>

     Notwithstanding the foregoing, Transaction Costs shall not include
     internal costs and expenses such as salaries and overhead of whatsoever
     kind or nature nor costs incurred by the parties to the Participation
     Agreement pursuant to arrangements with third parties for services (other
     than those expressly referred to above), such as computer time
     procurement (other than out-of-pocket expenses of the Owner Participant),
     financial analysis and consulting, advisory services, and costs of a
     similar nature.

     "TRANSACTION PARTY" shall mean, individually or collectively, as the
     context shall require, all or any of the parties to the Operative
     Documents (including the Lease Indenture Company and the Pass Through
     Company).

     "TRANSACTIONS" shall mean, collectively, each of the transactions
     contemplated under the Participation Agreement and the other Operative
     Documents (including the assignment of the South Point Ground Lease
     pursuant to the Assignment Agreement).

     "TRANSFEREE" shall mean a transferee of the Owner Participant permitted
     by Section 7.1 of the Participation Agreement.

     "TRANSFEREE GUARANTOR" shall have the meaning set forth in Section
     7.1(a)(iii) of the Participation Agreement.

     "TREASURY REGULATIONS" shall mean regulations, including temporary
     regulations, promulgated under the Code.

     "TRIBE" shall mean the Fort Mojave Indian Tribe of the Fort Mojave
     Indian Reservation, a federally recognized Indian Tribe.

     "TRUST COMPANY" shall mean Wells Fargo Bank Northwest, National
     Association.

     "UNDERWRITER" shall mean CSFB.

     "UNDIVIDED INTEREST" shall mean the Owner Lessor's 25% undivided
     leasehold interest in the Facility.

     "UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if any,
     by which the value of the accumulated plan benefits under the Plan
     determined on a plan termination basis in accordance with actuarial
     assumptions at such time consistent with those prescribed by the PBGC for
     purposes of Section 4044 of ERISA, exceeds the fair market value of all
     plan assets allocable to such liabilities under Title IV of ERISA
     (excluding any accrued but unpaid contributions).

     "UNIFORM COMMERCIAL CODE" or "UCC" shall mean the Uniform Commercial
     Code as in effect in the applicable jurisdiction.

     "UNITED STATES PERSON" shall have the meaning specified in Section
     7701(a)(30) of the Code or any successor provision thereto.

                                       43

<PAGE>

     "UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary that at the time of
     determination shall be designated an Unrestricted Subsidiary by the Board
     of Directors in the manner provided by the Indenture, dated as of August
     10, 2000, between the Guarantor and Wilmington Trust Company, as Trustee
     and (ii) any Subsidiary of an Unrestricted Subsidiary.

     "VERIFIER" shall have the meaning specified in Section 3.4(c) of the
     Facility Lease.

     "WHOLLY OWNED SUBSIDIARY" means a Subsidiary (other than an Unrestricted
     Subsidiary) all the Capital Stock of which (other than directors'
     qualifying shares) is owned by the Guarantor or another Wholly Owned
     Subsidiary.

                                       44

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