Document:

<PAGE>
                                                                 Exhibit 4.22.14

                                                                 EXECUTION COPY

                         PARTICIPATION AGREEMENT (RG-4)

                          Dated as of October 18, 2001

                                      among

                     ROCKGEN ENERGY LLC, as Facility Lessee,

                       ROCKGEN OL-4, LLC, as Owner Lessor,

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

                       CALPINE CORPORATION, as Guarantor,

                      SBR OP-4, LLC, as Owner Participant,

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

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

                                 ROCKGEN PROJECT

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

<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

                                                                                                                      PAGE
<S>                                                                                                                   <C>
SECTION 1. DEFINITIONS; INTERPRETATION OF THIS PARTICIPATION AGREEMENT .............................................    3

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

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

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

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

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

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

   Section 3.2  Representations and Warranties of the Owner Lessor ................................................   15

   Section 3.3  Representations and Warranties of the Lessor Manager and the Trust Company ........................   16

   Section 3.4  Representations and Warranties of the Owner Participant ...........................................   18

   Section 3.5  Representations and Warranties of Indenture Trustee and the Lease Indenture Company ...............   20

   Section 3.6  Representations, Warranties and Covenants of the Pass Through Trustees and the Pass Through Company   22

SECTION 4.CLOSING CONDITIONS ......................................................................................   23

   Section 4.1  Completion of the Facility ........................................................................   25

   Section 4.2  Operative Documents ...............................................................................   25

   Section 4.3  Certificates and the Lessor Notes .................................................................   25

   Section 4.4  Equity Investment .................................................................................   25

   Section 4.5  Organizational Documents ..........................................................................   25

   Section 4.6  Representations and Warranties ....................................................................   25

   Section 4.7  Defaults, Events of Default, Events of Loss .......................................................   25

   Section 4.8  Regulatory Approvals ..............................................................................   25

   Section 4.9  Consents ..........................................................................................   26

   Section 4.10 Governmental Actions ..............................................................................   27

</TABLE>

                                        i

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<TABLE>
<CAPTION>
                                TABLE OF CONTENTS (continued)

                                                                                      PAGE
<S>                                                                                   <C>
Section 4.11 Insurance ...................................................              27

Section 4.12 Ratings .....................................................              27

Section 4.13 Environmental Report ........................................              27

Section 4.14 Surveys .....................................................              27

Section 4.15 Appraisal; Condition of the Facility ........................              27

Section 4.16 Letter from the Appraiser ...................................              27

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

Section 4.18 Opinion with Respect to Certain Tax Aspects .................              28

Section 4.19 Opinions of Counsel .........................................              28

Section 4.20 Recordings and Filings ......................................              28

Section 4.21 Conditions to Closing .......................................              28

Section 4.22 Taxes .......................................................              28

Section 4.23 No Changes in Applicable Law ................................              29

Section 4.24 Registered Agent for the Facility Lessee and the Owner Lessor              29

Section 4.25 Operating Lease Treatment ...................................              29

Section 4.26 Rent Adjustments ............................................              29

Section 4.27 Title Insurance .............................................              29

Section 4.28 Parent Guaranty .............................................              29

Section 4.29 Letter as to Number of Offerees .............................              29

Section 4.30 Lien Search .................................................              30

Section 4.31 Litigation ..................................................              30

Section 4.32 No Material Adverse Change ..................................              30

Section 4.33 Private Placement Number ....................................              30

Section 4.34 Proceedings and Documents ...................................              30

</TABLE>

                                       ii

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<TABLE>
<CAPTION>
                                TABLE OF CONTENTS (continued)
                                                                                    PAGE
<S>                                                                                 <C>
   Section 4.35 No Proposed Tax Law Change ............................              30

   Section 4.36 Payment of Fees and Expenses ..........................              30

SECTION 5.COVENANTS OF FACILITY LESSEE AND GUARANTOR ..................              30

   Section 5.1  Maintenance of Existence ..............................              31

   Section 5.2  Merger, Consolidation, Sale of Substantially All Assets              31

   Section 5.3  Guaranty and Contingent Obligations ...................              31

   Section 5.4  Assignment of Rights ..................................              32

   Section 5.5  Lessor Manager Fees ...................................              32

   Section 5.6  Conduct of Business, Properties, Etc ..................              32

   Section 5.7  Obligations ...........................................              32

   Section 5.8  Books, Records, Access ................................              32

   Section 5.9  Other Information .....................................              33

   Section 5.10 Warranty of Title to Facility Site ....................              33

   Section 5.11 ERISA .................................................              33

   Section 5.12 Certain Contracts and Agreements ......................              34

   Section 5.13 Certain Costs .........................................              34

   Section 5.14 Limitations on Liens ..................................              34

   Section 5.15 Investments ...........................................              34

   Section 5.16 Survey ................................................              35

   Section 5.17 Regulations ...........................................              35

   Section 5.18 Partnerships ..........................................              35

   Section 5.19 Dissolution ...........................................              35

   Section 5.20 Termination of Operative Documents ....................              35

   Section 5.21 Name and Location .....................................              35

</TABLE>

                                       iii

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<TABLE>
<CAPTION>
                                TABLE OF CONTENTS (continued)
                                                                                             PAGE
<S>                                                                                          <C>
   Section 5.22. Use of Facility Site ............................................              35

   Section 5.23. Abandonment of Facility .........................................              35

   Section 5.24. Taxes, Other Government Charges and Utility Charges .............              35

   Section 5.25. Compliance with Laws, Instruments, Etc ..........................              36

   Section 5.26. PUHCA ...........................................................              36

   Section 5.27. Further Assurances ..............................................              36

   Section 5.28. No Subsidiaries .................................................              37

   Section 5.29. Permitted Business ..............................................              37

   Section 5.30. Support Arrangements ............................................              37

   Section 5.3. 1Insurance .......................................................              38

   Section 5.32. Tax Status ......................................................              38

   Section 5.33 Transmission Assets .............................................              38

SECTION 6.COVENANTS OF THE OWNER LESSOR, THE TRUST COMPANY AND THE LESSOR MANAGER              39

   Section 6.1 Compliance with the LLC Agreement ................................              39

   Section 6.2 Owner Lessor's Liens .............................................              40

   Section 6.3 Amendments to Operative Documents ................................              40

   Section 6.4 Transfer of the Owner Lessor's Interest ..........................              40

   Section 6.5 Owner Lessor; Lessor Estate ......................................              40

   Section 6.6 Limitation on Indebtedness and Actions ...........................              40

   Section 6.7 Change of Location ...............................................              40

   Section 6.8 Bankruptcy of Owner Lessor .......................................              40

SECTION 7.COVENANTS OF THE OWNER PARTICIPANT ....................................              41

   Section 7.1 Restrictions on Transfer of Member Interest ......................              41

   Section 7.2 Owner Participant's Liens ........................................              44

</TABLE>

                        iv

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<TABLE>
<CAPTION>
                                TABLE OF CONTENTS (continued)
                                                                                                PAGE
<S>                                                                                             <C>
   Section 7.3.  Amendments or Revocation of LLC Agreement ..........................            44

   Section 7.4.  Bankruptcy Filings .................................................            44

   Section 7.5.  Instructions .......................................................            44

   Section 7.6.  Right of First Refusal .............................................            44

   Section 7.7  Prohibition on Fundamental Changes ..................................            45

   Section 7.8.  Appointment of Successor Lessor Manager ............................            45

   Section 7.9.  Cooperation ........................................................            45

SECTION 8.COVENANTS OF THE INDENTURE TRUSTEE AND THE PASS THROUGH TRUSTEES ..........            46

   Section 8.1.  Indenture Trustee's Liens ..........................................            46

   Section 8.2.  Pass Through Trustees' Covenant Not to Transfer Lessor Notes .......            46

SECTION 9 INDEMNIFICATION ...........................................................            46

   Section 9.1.  General Indemnity ..................................................            46

   Section 9.2.  General Tax Indemnity ..............................................            53

SECTION 10.FACILITY LESSEE'S RIGHT OF QUIET ENJOYMENT ...............................            62

SECTION 11. SUPPLEMENTAL FINANCING IMPROVEMENTS; OPTIONAL REFINANCINGS ..............            62

   Section 11.1. Financing Improvements .............................................            62

   Section 11.2. Optional Refinancing of Lease Debt .................................            64

   Section 11.3. Cooperation ........................................................            65

SECTION 12. CERTAIN ADJUSTMENTS TO PERIODIC RENT, TERMINATION VALUE AND OTHER AMOUNTS            66

SECTION 13. TRANSFER OF THE FACILITY LESSEE OWNERSHIP; SPECIAL LESSEE TRANSFERS .....            66

   Section 13.1. Transfer of the Facility Lessee Ownership ..........................            67

   Section 13.2. Special Facility Lessee Transfers ..................................            68

SECTION 14.MISCELLANEOUS ............................................................            69

   Section 14.1 Consents; Cooperation ...............................................            69
</TABLE>

                                        v
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<TABLE>
<CAPTION>
                                TABLE OF CONTENTS (continued)

                                                                                          PAGE
<S>                                                                                       <C>
Section 14.2  Successor Owner Lessor .........................................              69

Section 14.3  Bankruptcy of Lessor Estate ....................................              69

Section 14.4  Amendments and Waivers .........................................              69

Section 14.5  Notices ........................................................              70

Section 14.6  Survival .......................................................              74

Section 14.7  Successors and Assigns .........................................              74

Section 14.8  Business Day ...................................................              74

Section 14.9  Governing Law ..................................................              74

Section 14.10 Severability ...................................................              74

Section 14.11 Counterparts ...................................................              74

Section 14.12 Headings and Table of Contents .................................              75

Section 14.13 Limitation of Liability ........................................              75

Section 14.14 Consent to Jurisdiction; Waiver of Trial by Jury; Process Agent               76

Section 14.15 Further Assurances .............................................              77

Section 14.16 Effectiveness ..................................................              77

Section 14.17 Measuring Life .................................................              77

Section 14.18 No Partnership, Etc ............................................              77

Section 14.19 Entire Agreement ...............................................              77

Section 14.20 Public Utility Regulation ......................................              78

Section 14.21 Confidentiality of Information .................................              78

Section 14.22 Reliance .......................................................              79

Section 14.23 Amendments, Etc ................................................              79

</TABLE>

                         vi

<PAGE>

APPENDICES:

         Appendix A      Definitions and Rules of Interpretation
<TABLE>
<S>                       <C>
SCHEDULES:

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

EXHIBITS:

     Exhibit A         Description of Facility
     Exhibit B-1       Form of Bill of Sale
     Exhibit B-2       Form of Warranty Deed
     Exhibit C         Form of Facility Lease Agreement
     Exhibit D         Form of Facility Site Lease
     Exhibit E         Form of Facility Site Sublease
     Exhibit F         Form of Pass Through Trust Agreement
     Exhibit G         Form of OP Parent Guaranty
     Exhibit H         Form of Calpine Guaranty
     Exhibit I         Form of Collateral Trust Indenture
     Exhibit J         Form of OP Assignment and Assumption Agreement
     Exhibit K         List of Competitors
     Exhibit L         Form of Guarantor Assignment and Assumption Agreement
     Exhibit M         Forms of Consents
</TABLE>

                                       vii

<PAGE>

                                     PARTICIPATION AGREEMENT

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

                                  WITNESSETH:

          WHEREAS, (a) Facility Lessee, an indirect, wholly-owned
subsidiary of Calpine, will, as of the Closing Date, own a 520 MW gas-fired
combined cycle merchant power plant located near Christiana, Wisconsin and more
fully described in Exhibit A hereto ("Facility");

          WHEREAS, Facility Lessee desires to sell to the Owner Lessor
the Undivided Interest pursuant to the Bill of Sale and lease to the Owner
Lessor the Ground Interest pursuant to the Facility Site Lease, and to lease
the Undivided Interest and sublease the Ground Interest

<PAGE>

from the Owner Lessor pursuant to the Facility Lease and the Facility Site
Sublease, respectively;

          WHEREAS, the Owner Participant desires to cause the Owner
Lessor to purchase such Undivided Interest from the Facility Lessee pursuant to
the Bill of Sale, to lease the Ground Interest from the Facility Lessee
pursuant to the Facility Site Lease, and to lease the Undivided Interest and
sublease the Ground Interest to the Facility Lessee pursuant to the Facility
Lease and Facility Site Sublease, respectively;

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

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

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

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

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

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

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

                                      2

<PAGE>

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

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

DEFINITIONS; INTERPRETATION OF THIS PARTICIPATION AGREEMENT

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

PARTICIPATION; CLOSING DATE; TRANSACTION COSTS

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

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

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

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

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

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

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

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

                                      3

<PAGE>

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

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

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

Closing Date; Procedure for Participation.

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

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

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

Investment of Funds. If, on the Scheduled Closing Date, the Owner Participant
     has made the Owner Participant's Commitment available to the Owner
     Lessor in accordance with Section 2.2(b), the Closing does not occur on
     such date and the Owner Lessor is unable to return such funds to the
     Owner Participant on such date, the Owner Lessor shall, subject to
     Section 2.2(c)

                                      4

<PAGE>

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

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

Transaction Costs.

If the transactions contemplated by this Agreement are consummated, all
     Transaction Costs up to an amount equal to US$1,125,000, which shall be
     substantiated or otherwise supported in reasonable detail (provided that
     legal bills may be redacted to preserve attorney-client privilege), shall
     be paid within 10 days after the Closing Date by the Owner Lessor (with
     funds provided by the Owner Participant), assuming all invoices have been
     approved by Calpine and received by the Owner Lessor by 7 days after the
     Closing Date. All other Transaction Costs, fees, costs and expenses
     incurred by the Facility Lessee, the Owner Lessor and the Owner
     Participant shall be paid by Calpine. If the Overall Transaction is not
     consummated for any reason (including as a result of the Facility Lessee
     terminating this Agreement pursuant to Section 12(a)), then Calpine shall
     bear all Transaction Costs;

                                      5

<PAGE>

     provided, however, that Calpine shall not be obligated to pay
     Transaction Costs incurred by the Owner Participant if the Overall
     Transaction is not consummated on the basis of the provisions of this
     Agreement due to a failure of the Owner Participant to satisfy any
     condition to the Closing required to be satisfied by the Owner
     Participant.

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

REPRESENTATIONS AND WARRANTIES

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

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

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

Non-Contravention.  (1) The execution, delivery and performance by the Facility
     Lessee of this Agreement and each of the other Operative Documents to
     which it is or will be a party, the consummation by the Facility Lessee
     of the transactions contemplated hereby and thereby, and compliance by
     the Facility Lessee with the terms and provisions hereof and thereof, do
     not and will not (i) contravene any Applicable Law binding on the
     Facility Lessee or its property, or its organizational documents, (ii)
     constitute a default by the Facility Lessee under, or result in the
     creation of any Lien upon the property of the Facility Lessee (other than
     pursuant to any Operative Document) under any indenture, mortgage or
     other material

                                      6

<PAGE>

     contract, agreement or instrument to which the Facility Lessee is a
     party or by which the Facility Lessee or any of its property is bound,
     (iii) contravene any Organic Document of the Facility Lessee or (iv)
     require the consent or approval of any Person which has not already been
     obtained, in each case with respect to clauses (i), (ii) and (iv) above,
     which would reasonably be expected to have a Material Adverse Effect.

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

Government Actions. The Facility Lessee has all Permits with or from any
     Governmental Entity or under any Applicable Law required (x) for the due
     execution, delivery or performance by the Facility Lessee of this
     Agreement, and the other Operative Documents to which the Facility Lessee
     is or will be a party or (y) without regard to any other transactions or
     other actions of the Owner Participant, the Owner Lessor or any Affiliate
     of any of them or any assignee or transferee of any of the Owner
     Participant, the Owner Lessor (or any Affiliate of any transferee or
     assignee) and assuming that none of the Owner Participant, the Owner
     Lessor or any Affiliate of any of them or any assignee or transferee of
     any of the Owner Participant (or any Affiliate of any such transferee or
     assignee) is an "electric utility" or a "public utility" or a "public
     utility holding company" or any similar entity subject to public utility
     regulation under any Applicable Law immediately prior to the Closing,
     with respect to the participation by the Owner Participant, the Owner
     Lessor in the Overall Transaction, other than (i) any Permit where the
     failure to obtain or maintain such Permit would not be reasonably likely
     to result in a Material Adverse Effect, (ii) the FERC Orders, (iii) as
     may be required under Applicable Law providing for the supervision or
     regulation of the Owner Participant, the Owner Lessor or any Affiliate of
     any of them as a result of investing, lending or other commercial
     activity in which the Owner Participant, the Owner Lessor or any
     Affiliate of any of them is or may be engaged other than the transactions
     contemplated hereby or by any of the other Operative Documents, (iv) as
     may be required under existing Applicable Laws to be obtained, given,
     accomplished or renewed at any time, or from time to time, in each case,
     after the Closing Date and which the Facility Lessee has no reason to
     believe will not be timely obtained and the lack of which would not
     reasonably be expected to have a Material Adverse Effect or involve any
     danger of criminal or material civil liability being incurred by the
     Owner Participant, the Owner Lessor, the Indenture Trustee or the Pass
     Through Trustees, (v) in connection with any modification to or
     rebuilding or replacement of the Facility or any portion thereof that may
     occur in the future, (vi) as may be required in connection with any
     refinancing of the Lessor Notes or the Certificates or the issuance of
     Additional Lessor Notes or Additional Certificates, (vii) as may be
     required in consequence of any transfer of the Member Interest or any
     transfer of the Undivided Interest or the Owner Lessor's Interest, or any
     part thereof by the Owner Lessor or the exercise by any such party of
     dispossessory remedies under the Operative Documents or any
     relinquishment of the use or operation of the Facility by the Facility
     Lessee, (viii) appropriate filing and recording to perfect the Lien of
     the Collateral Trust Indenture, if required, and the ownership and

                                      7

<PAGE>

     leasehold interests conveyed pursuant to this Agreement, or (ix) as may
     be required under any Applicable Law enacted or adopted after the date
     hereof.

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

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

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

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

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

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

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

          (3)   When duly authorized, executed and delivered by each of
the parties thereto, the Collateral Trust Indenture will create a valid and,
when the filings and recordings to be made pursuant to Section 4.20 have been
made, first priority perfected Lien in favor of the Indenture Trustee in the
Indenture Estate and no filing, recording, registration or notice with, or

                                      8

<PAGE>

payment of any fees to, any federal or state Governmental Entity will be
necessary to establish or, except for such filings and recordings as will be
made pursuant to Section 4.20, to perfect, or give record notice of, the Lien
in favor of the Indenture Trustee in the Indenture Estate to the extent such
Lien may be perfected by filings or recordings.

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

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

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

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

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

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

          (1)   The Facility Lessee has not received or has Actual
Knowledge of any written notice, letter, citation, order, warning, complaint,
inquiry, claim or demand from any Governmental Entity or any other Person that:
(i) there has been a Release, or there is a threat of Release, of Hazardous
Substances in, on, under or from the Facility, or the Facility Site; (ii) the

                                      9

<PAGE>

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

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

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

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

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

                                      10

<PAGE>

     during the Facility Lease Term and the period following the expiration or
     termination of the Facility Lease Term, as applicable, until the end of
     the Facility's useful life as set forth in the Closing Appraisal, (i) the
     location, occupation, interconnection, maintenance and repair of each
     Facility, (ii) the use, operation and possession of the Facility, (iii)
     as of the Closing Date, the use, operation, possession, maintenance,
     replacement, renewal and repair of all Improvements required to be made
     to the Facility, (iv) adequate ingress to and egress from the Facility in
     connection with the ownership, use, operation, possession, maintenance or
     repair of the Facility and (v) the transmission of electricity from the
     Facility substantially in the manner currently transmitted as of the
     Closing Date.

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

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

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

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

                                      11

<PAGE>

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

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

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

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

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

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

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

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

                                      12

<PAGE>

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

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

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

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

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

No Additional Fees. Except for the fees referred to in clause (xiv) and (xv)
     of the definition of Transaction Costs, the Facility Lessee has not paid
     or become obligated to pay any fee or

                                      13

<PAGE>

     commission to any broker, finder or intermediary for or on account of
     arranging the financing of the transactions contemplated by the Operative
     Documents.

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

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

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

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

                                      14

<PAGE>

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

Commencement of Commercial Operations and Compliance. To the knowledge of the
     Facility Lessee, the Facility has commenced commercial operations and is
     currently capable of producing at least 520 MW of capacity and complies
     in all material respects with the other specifications set forth in the
     purchase and construction contracts for the Facility.

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

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

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

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

Non-Contravention. The execution and delivery by the Owner Lessor of this
     Agreement and the other Operative Documents to which it is or will be a
     party, the consummation by the Owner Lessor of the transactions
     contemplated hereby and thereby, and the compliance by the Owner Lessor
     with the terms and provisions hereof and thereof, do not and will not
     contravene any Applicable Law of the United States of America or the
     State of Delaware, or the LLC Agreement or the Owner Lessor's other
     organizational documents or contravene the provisions of, or constitute a
     default by the Owner Lessor under any indenture, mortgage or other
     material contract, agreement or instrument to which the Owner Lessor is a
     party or by which the Owner Lessor or its property is bound, or in the
     creation of any Owner Lessor's

                                      15

<PAGE>

     Lien; provided, however, that no representation is made with respect to
     the right, power or authority of the Owner Lessor to act as operator of
     the Facility following a Lease Event of Default or the expiration or
     termination of the Facility Lease.

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

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

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

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

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

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

Due Organization. The Trust Company is national banking association duly
     organized and validly existing and in good standing under the laws of
     the United States, has the corporate

                                      16

<PAGE>

     power and authority, as Lessor Manager and/or in its individual capacity
     to the extent expressly provided herein or in the LLC Agreement, to enter
     into and perform its obligations under the LLC Agreement, this Agreement
     and each of the other Operative Documents to which it is a party.

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

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

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

Governmental Actions. Assuming the representations and warranties of the
     Facility Lessee contained in paragraphs (j), (k), (l), (m), (q), (z),
     (ff) and (hh) of Section 3.1 are true, no authorization or approval or
     other action by, and no notice to or filing or registration with, any
     Governmental Entity is required for the due execution, delivery or
     performance by the

                                      17

<PAGE>

     Trust Company or the Lessor Manager, as the case may be, of the LLC
     Agreement, this Agreement or the other Operative Documents to which the
     Trust Company or the Lessor Manager is or will be a party, other than any
     such authorization or approval or other action or notice or filing as has
     been duly obtained, taken or given.

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

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

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

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

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

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

                                      18

<PAGE>

Non-Contravention. The execution and delivery by the Owner Participant of this
     Agreement, the LLC Agreement, the Tax Indemnity Agreement and any other
     Operative Document to which the Owner Participant is or will be a party,
     the consummation by the Owner Participant of the transactions
     contemplated hereby and thereby, and the compliance by the Owner
     Participant with the terms and provisions hereof and thereof, do not and
     will not contravene any Applicable Law binding on the Owner Participant,
     or its organizational documents, or contravene the provisions of, or
     constitute a default under any indenture, mortgage or other material
     contract, agreement or instrument to which the Owner Participant is a
     party or by which the Owner Participant or its property is bound or
     result in the creation of any Owner Participant's Lien (other than any
     Lien created under any Operative Document) upon the Lessor Estate, the
     Facility Site or any interest therein or part thereof (it being
     understood that no representation or warranty is being made as to (i) any
     Applicable Laws relating to the particular nature of the Facility or the
     Facility Site or (ii) other than its representations set forth in Section
     3.4(g), ERISA or Section 4975 of the Code).

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

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

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

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

Acquisition for Investment. The Owner Participant is purchasing the Member
     Interest to be acquired by it for its own account with no present
     intention of distributing such Member Interest or any part thereof in any
     manner which would require registration under or would

                                      19

<PAGE>

     violate the Securities Act, but without prejudice, however, to the right
     of the Owner Participant at all times to sell or otherwise dispose of all
     or any part of such Member Interest under an exemption from registration
     available under such Act.

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

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

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

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

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

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

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

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

                                      20

<PAGE>

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

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

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

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

                                      21

<PAGE>

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

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

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

Due Authorization, Enforceability; etc.

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

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

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

                                      22

<PAGE>

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

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

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

CLOSING CONDITIONS

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

                                      23

<PAGE>

such proof of satisfaction of these conditions as any other Transaction Party
shall reasonably request.

                                      24

<PAGE>

Completion of the Facility. The Facility shall have commenced commercial
operations and shall currently be capable of producing at least 520 MW of
capacity and shall comply in all material respects with the other
specifications set forth in the purchase and construction contracts for the
Facility.

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

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

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

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

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

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

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

                                      25

<PAGE>

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

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

                                      26

<PAGE>

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

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

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

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

Surveys. The Owner Participant shall have received a bringdown certificate
(which certificate shall be in form and substance satisfactory to the Owner
Participant) from the surveyor with respect to its survey of the Facility Site
dated February 22, 2000.

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

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

                                      27

<PAGE>

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

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

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

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

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

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

                                      28

<PAGE>

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

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

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

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

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

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

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

                                      29

<PAGE>

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

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

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

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

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

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

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

COVENANTS OF FACILITY LESSEE AND GUARANTOR

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

                                      30

<PAGE>

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

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

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

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

Guaranty and Contingent Obligations. The Facility Lessee will not create,
incur, assume or suffer to exist any Indebtedness (including without limitation
any guaranty or other contingent obligations) except (i) by reason of
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of the Facility Lessee's business, (ii)
indemnities in respect of unfiled mechanics' liens and other liens permitted by
clause (d) of the definition of "Permitted Liens", (iii) contingent obligations
set forth in, or incurred in connection with, or indemnities set forth in, the
Operative Documents, (iv) unsecured indemnities provided

                                      31

<PAGE>

by, and other unsecured contingent obligation incurred by, the Facility Lessee
in connection with either (x) easements relating to its applicable interest in
the Facility or the Facility Site or (y) any contract, agreement or other
document or instrument relating to the RockGen project which is entered into in
the ordinary course of the Facility Lessee's business, (v) customary
indemnities in favor of the title insurers providing the title policies
covering the Facility Site or any portion thereof or any easement or
appurtenant right relating thereto in respect of claims by the holder of
mechanics' liens, (vi) the indemnities referred to in Section 9.1 and 9.2 of
the Participation Agreement or pursuant to the Tax Indemnity Agreement and
(vii) unsecured Indebtedness incurred in accordance with Section 11.1 or 11.2
hereof.

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

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

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

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

Books, Records, Access. The Facility Lessee shall maintain or cause to be
maintained adequate books, accounts and records with respect to itself, the
Facility and Facility Site and prepare all financial statements required
hereunder in accordance with GAAP and in compliance with the regulations of any
Governmental Entity having jurisdiction thereof, and permit employees, agents
and representatives of the Owner Lessor, the Owner Participant, and, so long as
the Lien of the Collateral Trust Indenture shall have not been terminated or
discharged, the Indenture Trustee, the Pass Through Trustees and the
Certificateholders, and such parties' independent consultants, at all
reasonable times during normal business hours and upon reasonable prior notice
and at no risk or (except during the existence of a Lease Default or Lease
Event of Default) expense to the Facility Lessee to inspect, the Facility and
Facility Site, to examine or audit all of or any of the Facility Lessee's
books, accounts and records and make copies and memoranda thereof and, together
with such consultants, to observe the operation, maintenance and repair of the
Facility; provided, however, any such inspection shall be conducted in
accordance with Section 12 of the Facility Lease.

                                      32

<PAGE>

Other Information.

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

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

Warranty of Title to Facility Site.

Each Facility Lessee shall maintain good and valid fee, title to, or easement or
     other surface rights in, as applicable, its Facility Site, subject only
     to Permitted Liens.

Each Facility Lessee shall maintain good and valid title to all of its other
     properties and assets (other than properties and assets disposed of in
     the ordinary course of business including any sale, transfer or other
     disposition of any obsolete, surplus or worn out equipment, parts,
     supplies or other materials or assets to the extent permitted by the
     Operative Documents), subject only to Permitted Liens.

ERISA. The Facility Lessee shall not establish, maintain or contribute to, any
Plan. If any Plan is established, maintained or contributed to by either the
Facility Lessee or any ERISA Affiliate, or if the Facility Lessee or any ERISA
Affiliate becomes obligated to contribute to any Plan, (a) with respect to each
such Plan, the Facility Lessee or such ERISA Affiliate (i) shall have at all
times fulfilled in all material respects their obligations under the minimum
funding standards of ERISA and the Code, (ii) shall not allow any such Plan to
have an Unfunded Current Liability, (iii) shall, with respect to each Plan (and
each related trust, if any) which is intended to be qualified under Sections
401(a) and 501(a) of the Code, obtain a determination letter from the

                                      33

<PAGE>

Internal Revenue Service to the effect that such Plan (and trust, if any) meets
the requirements of Sections 401(a) and 501(a) of the Code, and (iv) shall at
all times be in compliance in all material respects with applicable provisions
of ERISA and the Code, and (b) within fifteen (15) days after (i) the
occurrence of any reportable event (as defined in Section 4043(c) of ERISA)
with respect to any Plan, (ii) the complete or partial withdrawal by the
Facility Lessee or any ERISA Affiliate from any Multiemployer Plan, (iii) to
the extent the Facility Lessee or any ERISA Affiliate is notified that any
Multiemployer Plan has entered reorganization status, has become insolvent, or
has terminated (or any Multiemployer Plan notifies the Facility Lessee or any
ERISA Affiliate of its intent to terminate) under Section 4041A of ERISA, (iv)
the institution of any action to terminate a Plan in a distress termination
under Section 4041(c) of ERISA, or (v) in the case of the breach of any other
covenant contained in this Section 5.11, the Facility Lessee shall report such
occurrence or breach to the Indenture Trustee, the Pass Through Trustees, the
Owner Lessor and the Owner Participant and furnish such information as such
Persons may reasonably request with respect thereto.

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

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

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

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

                                      34

<PAGE>

Survey. The Facility Lessee shall use diligent and commercially reasonable
efforts to deliver a copy of the Survey as soon as practicable, such survey to
be an ALTA survey or other survey in form and substance reasonably satisfactory
to the Owner Participant, provided that the failure to do so shall not
constitute, in whole or in part, the basis of any default under any Operative
Document.

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

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

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

Termination of Operative Documents. The Facility Lessee shall not without the
prior written consent of the Owner Participant and, except as otherwise
provided in Section 8 of the Collateral Trust Indenture and so long as the Lien
of the Collateral Trust Indenture has not been terminated or discharged, the
Indenture Trustee, (a) cause or consent to or (b) permit, any amendment,
modification, extension, termination, variance or waiver of timely compliance
with any terms or conditions of any Operative Document.

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

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

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

Taxes, Other Government Charges and Utility Charges. The Facility Lessee shall
pay, or cause to be paid, as and when due and prior to delinquency, all taxes,
assessments and governmental charges of any kind that may at any time be
lawfully assessed or levied against or with respect to the Facility Lessee, its
interests in the Facility Site and Facility, all utility and other charges
incurred in the operation, maintenance, use, occupancy and upkeep of the
Facility or the Facility Site, and all assessments and charges lawfully made by
any Governmental Entity for public improvements that may be secured by a Lien
on any part of the Facility; provided, that the Facility Lessee may contest in
good faith any such taxes, assessments and other charges and, in such event,
may permit the taxes, assessments or other charges so contested to remain
unpaid during any period, including appeals, when the Facility Lessee is in
good faith contesting the same, so long as (a) adequate reserves consistent
with GAAP requirements (or other security arrangements reasonably satisfactory
to the Indenture Trustee and the Owner Participant) are

                                      35

<PAGE>

established and maintained in an amount sufficient to pay any such taxes,
assessments or other charges, accrued interest thereon and potential penalties
or other costs relating thereto, or other adequate provision for the payment
thereof shall have been made, and (b) any tax, assessment or other charge
determined to be due, together with any interest or penalties thereon, is
immediately paid after resolution of such contest.

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

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

Further Assurances. The Facility Lessee, at its own cost, expense and
liability, will cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances as may be necessary
in order to carry out the intent and purposes of this Participation Agreement
and the other Operative Documents, and the transactions contemplated hereby and
thereby. The Facility Lessee, at its own cost, expense and liability, will
cause such financing statements and fixture filings (and continuation
statements with respect thereto) as may be necessary and such other documents
as the Owner Participant, the Owner Lessor and, so long as the Lien of the
Collateral Trust Indenture shall not have been terminated or discharged, the
Indenture Trustee and the Pass Through Trustees shall reasonably request to be
recorded or filed at such places and times in such manner, and will take all
such other actions or cause such actions to be taken, as may be necessary in
order to establish, preserve, protect and perfect the right, title and interest
of the Owner Lessor in and to the Undivided Interest, the Ground Interest, any
Component or any portion of any thereof or any interest therein and the first
priority Lien intended to be created by the Collateral Trust Indenture therein.
The Facility Lessee shall promptly from time to time furnish to the Owner
Participant, the Owner Lessor or, so long as the Lien of the Collateral Trust
Indenture shall not have been terminated or discharged, the Indenture Trustee
or the Pass Through Trustees such information with respect to the Facility or
the Facility Site or the transactions contemplated by the Operative Documents
to which the Facility Lessee is a party as may be required to enable the Owner
Participant, the Owner Lessor or, so long as the Lien of the Collateral Trust
Indenture shall not have been terminated or discharged, the Indenture

                                      36

<PAGE>

Trustee or the Pass Through Trustees, as the case may be, to timely file with
any Governmental Entity any reports and obtain any licenses or permits required
to be filed or obtained by the Owner Lessor under any Operative Document, the
Owner Participant as the owner of the Member Interest or the Indenture Trustee.
The Facility Lessee will preserve, protect, defend and enforce, or cause to be
preserved, protected, defended and enforced, the rights of itself, the Owner
Lessor and the Owner Participant under each and every Operative Document to
which it is a party (including by assignment and assumption of the rights
thereunder), including using commercially reasonable efforts to prosecute suits
to enforce any such rights and, at the request of Indenture Trustee, so long as
the Lien of the Collateral Trust Indenture has not been discharged or
terminated (and thereafter at the request of the Owner Participant), permit the
Indenture Trustee and the Owner Participant, at their respective cost and
expense, to participate in such capacity as it may choose in any such suit, any
defense thereof or in the preparation therefor; provided, however, that upon
the occurrence and during the continuance of any Lease Event of Default, if the
Indenture Trustee or the Owner Participant request that certain actions be
taken and the Facility Lessee fails to take the requested action, or to cause
the requested action to be taken within (5) Business Days, the Indenture
Trustee, so long as the Lien of the Collateral Trust Indenture has not been
discharged or terminated, and the Owner Lessor may, at the Facility Lessee's
reasonable expense, enforce, in its own name, or the Facility Lessee's name,
such rights of the Facility Lessee.

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

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

Support Arrangements. The Facility Lessee agrees that, to the extent that the
rights described in Section 3.1(n) which have already been made available to
the Owner Lessor prior to the expiration or termination of the Facility Lease
Term, and any rights assigned pursuant to the last sentence of this Section
5.30, are insufficient to permit on a commercially practicable basis during the
period following the expiration or termination of the Facility Lease Term,
until the end of the Facility's useful life as set forth in the Closing
Appraisal, (i) the location, occupation, interconnection (including with
respect to electricity, steam, gas and water), maintenance and repair of the
Facility, (ii) the use, operation and possession of the Facility, (iii) the
use, operation, possession, maintenance, replacement, renewal and repair of all
Improvements then required to be made to the Facility, (iv) adequate ingress to
and egress from the Facility in connection with the ownership, use, maintenance
or operation of the Facility, (v) adequate transmission of electricity from the
Facility to enable such Person to deliver the net electrical and steam output
of the Facility on a commercially reasonable basis and (vi) the interest of the
Owner Lessor (or any successor) in the Undivided Interest or the Ground
Interest, the Facility Lessee will cause Calpine to provide, and Calpine will
provide, the Owner Lessor with any additional services relating to the Owner
Lessor's Interest and operation of the Facility substantially in the same

                                      37

<PAGE>

manner as operated as of the Closing Date (to the extent Calpine or any
Affiliate thereof then owns or controls the physical assets and/or contractual
rights necessary to provide such services (or can enter into contracts on a
commercially reasonable basis for such ownership, control or other rights) and
remains in the business of providing such services) necessary to permit the
Owner Lessor to use the Facility as described in (i) through (vi) above. Such
arrangements will provide for fair market value compensation to Calpine
(payable periodically on no more frequently than a monthly and no less
frequently than on a quarterly basis) and will terminate upon the expiration or
termination of the Facility Site Lease, or earlier at the option of the Owner
Lessor. The Facility Lessee shall also, subject to obtaining any required third
party consents, assign to the Owner Lessor upon termination of the Facility
Lease any support or similar agreements to the extent relating to the Facility
it has with third parties.

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

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

Transmission Assets.

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

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

                                      38

<PAGE>

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

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

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

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

                                      39

<PAGE>

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

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

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

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

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

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

Bankruptcy of Owner Lessor. Each of the Trust Company, the Lessor Manager and
the Owner Lessor hereby agrees severally and as to itself only that it shall
not voluntarily take any action that shall, or cause any action to be taken
that is intended to, submit the Owner Lessor, as debtor, to any proceeding
under any Applicable Law involving bankruptcy, insolvency, reorganization or
other laws affecting the rights of creditors generally unless a Lease Event of
Default or a Significant Lease Default shall have occurred and be continuing
(in which case, if the Lien of the Collateral Trust Indenture shall not have
been discharged, the Trust Company or the Owner

                                      40

<PAGE>

Lessor shall not take any such action unless the Indenture Trustee shall have
given its prior written consent to such action in its sole discretion.

COVENANTS OF THE OWNER PARTICIPANT

Restrictions on Transfer of Member Interest.

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

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

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

the Transferee shall be either (A) an Affiliate of the transferor Owner
     Participant which does not otherwise qualify under clause (B) below (but
     in any event, such Affiliate shall not be a Competitor of Calpine);
     provided that all of the payment and performance obligations of the
     Transferee with respect to the interest being transferred under the
     Operative Documents shall be guaranteed by the transferor Owner
     Participant, or a Person then providing a guaranty of the transferor
     Owner Participant's obligations hereunder, pursuant to an OP Parent
     Guaranty or (B) a Person which meets, or the payment and performance
     obligations of which with respect to the interest being transferred under
     the Operative Documents are guaranteed (pursuant to a OP Parent Guaranty)
     by a Person (the transferor Owner Participant or such other guarantor,
     the "Transferee Guarantor") which meets, the following criteria: (1) the
     tangible net worth of the Transferee or Transferee Guarantor, is at least
     equal to $75 million calculated in accordance with GAAP; and (2) unless
     waived in writing by the Facility Lessee prior to such transfer, such
     Transferee is not a Competitor of Calpine or in material litigation
     against the Facility Lessee or any Affiliate of the Facility Lessee
     without the consent of the Facility Lessee; and

                                      41

<PAGE>

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

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

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

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

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

Upon any such transfer in compliance with this Section 7.1, (i) such Transferee
     shall (x) be deemed the "Owner Participant" for all purposes, and (y)
     enjoy the rights and privileges and perform the obligations of the Owner
     Participant hereunder and under each of the OP Assignment and Assumption
     Agreement, the Calpine Guaranty and each other Operative Document to
     which such Owner Participant is a party, and each reference in this
     Agreement,

                                      42

<PAGE>

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

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

                                      43

<PAGE>

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

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

Bankruptcy Filings. The Owner Participant agrees that it will not file a
petition, or join in the filing of a petition, seeking reorganization,
arrangement, adjustment or composition of, or in respect of, the Owner Lessor
under the Bankruptcy Code, or any other applicable federal or state law or the
law of the District of Columbia.

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

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

                                      44

<PAGE>

such terms are revised in any way that changes the agreement for sale, lease,
conveyance or transfer such that the terms of the sale are less favorable to
the Owner Participant (it being understood and agreed that any reduction in the
price or a change in the terms of payment thereof in a manner beneficial to the
potential purchaser shall be deemed to be less favorable to the Owner
Participant), the Owner Participant shall again comply with the notice and
right of first refusal provisions of this Section prior to entering into such
revised agreement; provided that, for such revised offer, the Notice Period
shall be 10 Business Days from the date of such new notice, and the Agreement
Period shall not exceed 45 days from the date of the Facility Lessee's notice
accepting such new terms.

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

Prohibition on Fundamental Changes. If the Owner Participant is an entity which
has as its sole (or substantially equivalent to sole) business activity, the
participation in the transactions contemplated by the Operative Documents, the
Owner Participant shall not change its form of organization and shall not enter
into or engage in any business other than as contemplated by the Operative
Documents and the activities related thereto.

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

Cooperation. The Owner Lessor agrees, and each of the Owner Participant and the
Lessor Manager agree to cause the Owner Lessor to, at the request of the
Facility Lessee and at the sole cost and expense of the Facility Lessee on an
After-Tax Basis, take such actions as may be necessary for the Owner Lessor to
take as the holder of the leasehold interest in the Facility for purposes of
obtaining the valid and effective issue, transfer or amendment, as the case may
be, of all Governmental Approvals to the extent the same are required for the
use, ownership, operation or maintenance of the Facility, the Facility Site,
the Undivided Interest, the Ground Interest or any Component by the Facility
Lessee or any permitted assignee of the Facility Lessee in the manner
contemplated by the Operative Documents, except to the extent the same involves
any (i) material risk of foreclosure, sale, forfeiture or loss of, or
imposition of a Lien (other than a Permitted Lien) on, the Facility, the
Undivided Interest or the Facility Site or the impairment of

                                      45

<PAGE>

the use, operation or maintenance of the Facility or the Facility Site in any
material respect, (ii) the risk of criminal liability being incurred by the
Owner Lessor, the Owner Participant, the Equity Investor or the OP Guarantor,
or (so long as the Lessor Notes are outstanding and the Lien of the Lease
Indenture has not been discharged) the Indenture Trustee or the Pass Through
Trustee or any of their respective Affiliates or (iii) material risk of any
material adverse effect on the interests of the Owner Lessor, the Owner
Participant, the Equity Investor or the OP Guarantor, or (so long as the Lessor
Notes are outstanding and the Lien of the Collateral Trust Indenture has not
been discharged) the Indenture Trustee or the Pass Through Trustee or any of
their respective Affiliates (including, without limitation, subjecting any such
Person to regulation as a public utility under any applicable law. The Facility
Lessee shall pay on an After-Tax Basis all reasonable costs and expenses
(including, without limitation, the reasonable fees and expenses of counsel) of
the Owner Lessor and each other Person party to an Operative Document incurred
in connection with any such action. It is understood and agreed that, with
respect to the action requested of it, and taken by it, under this Section 7.9,
the Owner Lessor, the Owner Participant and the Lessor Manager shall make no
representation or warranty as to, and shall have no responsibility for, the
effectiveness of such action to accomplish or promote the objective intended by
the Person making such request.

COVENANTS OF THE INDENTURE TRUSTEE AND THE PASS THROUGH TRUSTEES

Indenture Trustee's Liens. Neither the Lease Indenture Company, nor the
Indenture Trustee will directly or indirectly create, incur, assume or suffer
to exist any Indenture Trustee's Lien attributable to it and arising out of
events or conditions not related to its rights in the Indenture Estate or the
administration thereof, and will promptly notify the Owner Participant, the
Lessor Manager, the Owner Lessor and the Facility Lessee of the imposition of
any such Lien of which it has Actual Knowledge and shall promptly (and in any
event within 30 days of obtaining Actual Knowledge of such Lien), at its own
expense, take such action as may be necessary to duly discharge such Indenture
Trustee's Lien.

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

INDEMNIFICATION

General Indemnity.

Claims Indemnified. Subject to the exclusions stated in paragraph (b) below, the
     Facility Lessee agrees to indemnify, protect, defend and hold harmless,
     and do hereby indemnify the Owner Participant, the Owner Lessor, the
     Trust Company, in its individual capacity, the Lessor Manager, the Lease
     Indenture Company in its individual capacity, the Indenture Trustee, each
     Certificateholder, the Pass

                                      46

<PAGE>

     Through Trustees, and their respective Affiliates, successors, assigns,
     agents, directors, officers and employees (each an "Indemnitee") against
     any and all Claims (whether or not any of the transactions contemplated
     by the Operative Documents are consummated) imposed on, incurred or
     suffered by or asserted against any Indemnitee in any way relating to or
     resulting from or arising out of or attributable to:

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

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

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

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

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

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

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

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

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

                                      47

<PAGE>

     at, under or from the Facility or the Facility Site, including, for the
     avoidance of doubt, any of the foregoing existing or occurring prior to
     the Closing Date;

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

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

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

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

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

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

with respect to a particular Indemnitee and Related Parties, any offer, sale,
     assignment, transfer or other disposition (voluntary or involuntary) by
     or on behalf of (A) in the case of the Owner Participant, the Owner
     Participant of its Member Interest or with respect to any Related Party,
     its direct or indirect interest in the Owner Participant, (B) in the case
     of the Owner Lessor, and if such action is taken at the written direction
     of the Owner Participant, the Owner Participant, and Related Parties, the
     Owner Lessor of all or any of the Owner Lessor's Interest, (C) the
     Indenture Trustee of all or any of its interest in the Lessor Notes,
     unless, in any such case referred to in this paragraph (ii), such
     transfer is required by the terms of the Operative Documents or occurs
     during the continuance of a Lease Event of Default; (provided that this
     paragraph (ii) shall not serve to cap the indemnity to be received by a
     transferee Indemnitee for a Claim (other than a Claim relating solely to
     or arising solely out of any offer, transfer, sale, assignment or other
     disposition of any such rights or interests)

                                      48

<PAGE>

     based on what the relevant transferor Indemnitee would have received had
     no such transfer occurred);

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

as to any Indemnitee, any Claim to the extent attributable to the
     noncompliance of such Indemnitee or a Related Party, with any of the
     terms of, or any misrepresentation or breach of warranty by such
     Indemnitee or Related Party contained in any Operative Document made by
     such Indemnitee or Related Party or any breach by such Indemnitee or a
     Related Party of any covenant contained in any Operative Document or any
     breach by such Indemnitee or a Related Party of any covenant contained in
     any Operative Document made by such Indemnitee or Related Party except to
     the extent attributable to any breach by the Facility Lessee or any other
     Calpine Party of any covenant, representation or warranty contained in
     any Operative Document;

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

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

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

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

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

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

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

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

                                      49

<PAGE>

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

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

Insured Claims. Subject to the provisions of paragraph (e) of this Section 9.1,
     in the case of any Claim indemnified by the Facility Lessee hereunder
     which is covered by a policy of insurance maintained by the Facility
     Lessee, each Indemnitee agrees, unless it and each other Indemnitee shall
     waive its rights to indemnification (for itself and each Related Party
     thereto) in a manner reasonably acceptable to the Facility Lessee, to
     cooperate, at the sole cost and expense of the Facility Lessee, with
     insurers in exercise of their rights to investigate, defend or compromise
     such Claim.

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

Claims Procedure. Each Indemnitee shall promptly after such Indemnitee shall
     have Actual Knowledge thereof notify the Facility Lessee of any Claim as
     to which indemnification is sought; provided, that the failure so to
     notify the Facility Lessee shall not reduce or affect the Facility
     Lessee's liability which it may have to such Indemnitee under this
     Section 9.1, and no payment hereunder by the Facility Lessee to an
     Indemnitee shall be deemed to constitute a waiver or release of any right
     or remedy that the Facility Lessee may have against any such Indemnitee
     for actual damages resulting directly from the failure or delay of such
     Indemnitee to give the Facility Lessee such notice. Subject to the
     foregoing, any amount payable to any Indemnitee pursuant to this Section
     9.1 shall be paid within thirty (30) days after receipt of such written
     demand therefor from such Indemnitee, accompanied by a certificate of
     such Indemnitee stating in reasonable detail the basis for the
     indemnification thereby sought and (if such Indemnitee is not a party
     hereto) an agreement to be bound by the terms hereof as if such
     Indemnitee were such a party. The foregoing shall not, however,
     constitute an obligation to disclose confidential information of any kind
     without the execution of an appropriate confidentiality agreement.
     Promptly after the Facility Lessee receives notification of such Claim
     accompanied by a written statement describing in reasonable detail the
     Claims which are the subject of and basis for such indemnity and the
     computation of the amount so payable, the Facility Lessee shall, without
     affecting its obligations hereunder, notify such Indemnitee whether it
     intends to pay, object to, compromise or defend any matter involving the
     asserted liability of such Indemnitee. The Facility Lessee shall have the
     right to investigate and so long as no Significant Lease Default or Lease
     Event of Default

                                      50

<PAGE>

     shall have occurred and be continuing, the Facility Lessee shall have
     the right in its sole discretion, to defend or compromise any Claim for
     which indemnification is sought under this Section 9.1 which the Facility
     Lessee acknowledges is subject to indemnification hereunder; provided
     that no such defense or compromise shall involve any danger of (i)
     foreclosure, sale, forfeiture or loss of, or imposition of a Lien on any
     part of the Facility, the Undivided Interest, the Ground Interest, the
     Facility Site, the Lessor Estate or the Indenture Estate or the
     impairment of the Facility or the Facility Site, in any material respect
     or (ii) any criminal liability being incurred or any material adverse
     effect on such Indemnitee; provided, further, that no Claim shall be
     compromised by the Facility Lessee on a basis that admits any criminal
     violation or gross negligence or willful misconduct on the part of such
     Indemnitee without the express written consent of such Indemnitee; and
     provided, further, that to the extent that other Claims unrelated to the
     transactions contemplated by the Operative Documents are part of the same
     proceeding involving such Claim, the Facility Lessee may assume
     responsibility for the contest or compromise of such Claim only if the
     same may be and is severed from such other Claims (and each Indemnitee
     agrees to use reasonable efforts to obtain such a severance). In the
     event that in the course of the investigation or defense of a claim, the
     Facility Lessee shall in good faith reasonably determine that it is not
     liable for indemnification with respect thereto under this Section 9.1,
     it may give notice to the applicable Indemnitee of such fact; and, in
     such case, any acknowledgment, theretofore made by the Facility Lessee of
     liability with respect to such claim under this Section 9.1 shall be
     deemed revoked, and the Facility Lessee may thereupon cease to defend
     such claim; provided that (i) the Facility Lessee shall have given the
     Indemnitee reasonable prior notice of its intention to renounce such
     acknowledgment, (ii) the Facility Lessee's conduct regarding the defense
     of such claim or any decision to withdraw from such defense shall not
     prejudice or have prejudiced the Indemnitee's ability to contest such
     claim (taking into account, among other things, the timing of the
     Facility Lessee's withdrawal and the theory or theories upon which the
     Facility Lessee shall have based its defense), and (iii) the Facility
     Lessee shall have given such Indemnitee all materials, documents and
     records relating to its defense of such claim as such Indemnitee shall
     have reasonably requested in connection with the assumption by such
     Indemnitee of the defense of such claim at the cost and expense of the
     Facility Lessee. In the event that the Facility Lessee shall cease to
     defend any claim pursuant to the preceding sentence, the Facility Lessee
     shall indemnify each Indemnitee, without regard to any exclusion that
     might otherwise apply hereunder, to the extent that the actions of the
     Facility Lessee in defending such claim or the manner or time of the
     Facility Lessee's election to withdraw from the defense of such claim
     shall have caused such Indemnitee to incur any loss, cost, liability or
     expense which such Indemnitee would not have incurred had the Facility
     Lessee not ceased to defend such claim in such manner or such time. If
     the Facility Lessee elect, subject to the foregoing, to compromise or
     defend any such asserted liability, it may do so at its own expense and
     by counsel selected by it. Upon the Facility Lessee's election to
     compromise or defend such asserted liability and prompt notification to
     such Indemnitee of its intent to do so, such Indemnitee shall cooperate
     at the Facility Lessee's expense with all reasonable requests of the
     Facility Lessee in connection therewith and will provide the Facility
     Lessee with all information not within the control of the Facility Lessee
     as is reasonably available to such Indemnitee which the Facility Lessee
     may reasonably request; provided, however, that such Indemnitee shall
     not, unless otherwise required by Applicable Law, be obligated to
     disclose to the Facility Lessee or any other Person, or permit

                                      51

<PAGE>

     the Facility Lessee or any other Person to examine (i) any income tax
     returns of the Owner Participant or (ii) any confidential information or
     pricing information not generally accessible by the public possessed by
     the Owner Participant (and, in the event that any such information is
     made available, the Facility Lessee shall treat such information as
     confidential and shall take all actions reasonably requested by such
     Indemnitee for purposes of obtaining a stipulation from all parties to
     the related proceeding providing for the confidential treatment of such
     information from all such parties). Where the Facility Lessee, or the
     insurers under a policy of insurance maintained by the Facility Lessee
     undertakes the defense of such Indemnitee with respect to a Claim (with
     counsel reasonably satisfactory to such Indemnitee and without
     reservation of rights against such Indemnitee), no additional legal fees
     or expenses of such Indemnitee in connection with the defense of such
     Claim shall be indemnified hereunder unless such fees or expenses were
     incurred at the request of the Facility Lessee or such insurers.
     Notwithstanding the foregoing, an Indemnitee may participate at its own
     expense in any judicial proceeding controlled by the Facility Lessee
     pursuant to the preceding provisions, but only to the extent that such
     party's participation does not in the reasonable opinion of counsel to
     the Facility Lessee interfere with such control or defense of such claim;
     provided, however, that such party's participation does not constitute a
     waiver of the indemnification provided in this Section 9.1; provided,
     further, that if and to the extent that (i) such Indemnitee is advised by
     counsel that an actual or potential conflict of interest exists where it
     is advisable for such Indemnitee to be represented by separate counsel or
     (ii) there is a risk that such Indemnitee may be subject to criminal
     liability and such Indemnitee informs the Facility Lessee that such
     Indemnitee desires to be represented by separate counsel, such Indemnitee
     shall have the right to control its own defense of such Claim and the
     reasonable fees and expenses of such defense (including, without
     limitation, the reasonable fees and expenses of such separate counsel)
     shall be borne by the Facility Lessee. So long as no Lease Event of
     Default described in clause (a), (b), (g) or (h) of Section 16 of the
     Facility Lease has occurred and be continuing, no Indemnitee shall enter
     into any settlement or other compromise with respect to any Claim without
     the prior written consent of the Facility Lessee unless (i) the
     Indemnitee waives its rights to indemnification hereunder or (ii) the
     Facility Lessee has not acknowledged their indemnity obligation with
     respect thereto and there is a significant risk that a default judgment
     will be entered against such Indemnitee. Nothing contained in this
     Section 9.1(e) shall be deemed to require an Indemnitee to contest any
     Claim or to assume responsibility for or control of any judicial
     proceeding with respect thereto.

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

                                      52

<PAGE>

     their insurers has paid in respect of such Claim; provided that, so long
     as a Significant Lease Default or Lease Event of Default shall have
     occurred and is continuing such amount may be held by the Owner Lessor as
     security for the Facility Lessee's obligations under the Facility Lease
     and the other Operative Documents.

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

General Tax Indemnity.

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

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

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

                                      53

<PAGE>

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

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

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

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

the conveyance of title to the Undivided Interest; or

otherwise relating to the transactions contemplated by the Operative Documents.

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

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

Taxes imposed by the United States federal government or any state or local
     government, any political subdivision of any of the foregoing, imposed
     on, based on or measured by gross or net income, receipts, capital gain,
     capital or net worth, or conduct of business (other than, in each case,
     Taxes that are or are in the nature of sales, use, rental, license, value
     added (to the extent value added taxes are not imposed in clear and
     direct substitution for income taxes) or property taxes) ("Income
     Taxes"), including any such Taxes collected by way of

                                      54

<PAGE>

     withholding, minimum or alternative minimum taxes, and franchise taxes;
     provided that this exclusion (i) shall not affect any express requirement
     that payments be made on an "after-tax" basis;

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

Taxes imposed on a Tax Indemnitee that are attributable to the gross negligence
     or willful misconduct of such Tax Indemnitee, unless such negligence or
     misconduct is imputed to such Tax Indemnitee solely as a result of its
     participation in the transactions contemplated by the Operative Documents
     and not as a result of any action or inaction by such Tax Indemnitee;

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

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

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

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

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

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

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

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

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

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

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

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     any of its representations or warranties contained in Section 3.4(g) or
     Section 8.2 of the Participation Agreement;

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

Taxes imposed that would not have been imposed on a Tax Indemnitee but for the
     activities in the taxing jurisdiction of such Tax Indemnitee or any
     Affiliate thereof unrelated to the transactions contemplated by the
     Operative Documents other than Taxes that are or are in the nature of
     sales, use, rental or license taxes, value added taxes (except to the
     extent value added taxes are imposed in clear and direct substitution for
     income taxes) or property taxes.

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

Independent Examination. Within 10 days after the Facility Lessee receives any
     computation from the Tax Indemnitee, the Facility Lessee may request in
     writing that an independent public accounting firm selected by the Tax
     Indemnitee and reasonably acceptable to the Facility Lessee review and
     determine on a confidential basis the amount of any indemnity payment by
     the Facility Lessee to the Tax Indemnitee pursuant to this Section 9.2 or
     any

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<PAGE>

     payment by a Tax Indemnitee to the Facility Lessee pursuant to paragraph
     (e) or (f) below. The Tax Indemnitee shall cooperate with such accounting
     firm and supply it with all information reasonably necessary for the
     accounting firm to conduct such review and determination (but not tax
     returns and books); provided that such accounting firm shall agree in
     writing in a manner reasonably satisfactory to the Tax Indemnitee to
     maintain the confidentiality of such information. The parties hereto
     agree that the independent public accounting firm's sole responsibility
     shall be to verify the computation of any payment pursuant to this
     Section 9.2 and that matters of interpretation of this Participation
     Agreement or any other Operative Document are not within the scope of the
     independent accountant's responsibility. The fees and disbursements of
     such accounting firm will be paid by the Facility Lessee; provided that
     such fees and disbursements will be paid by the Tax Indemnitee if the
     verification results in an adjustment in the Facility Lessee's favor of 5
     percent or more of the indemnity payment or payments computed by the Tax
     Indemnitee.

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

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

Refund. If a Tax Indemnitee obtains a refund or credit of all or part of any
     Taxes paid, reimbursed or advanced by the Facility Lessee pursuant to
     this Section 9.2, the Tax Indemnitee promptly shall pay to the Facility
     Lessee (x) the amount of such refund or credit (net of any Tax payable by
     the Tax Indemnitee as a result of the receipt or accrual of such

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     refund or credit) plus (y) an amount equal to any United States federal,
     state or local income tax benefit realized by such Tax Indemnitee by
     reason of such payment to the Facility Lessee (determined using the same
     assumptions as set forth in the second sentence under the definition of
     After-Tax Basis); provided that (A) if at the time such payment is due to
     the Facility Lessee a Significant Lease Default or Lease Event of Default
     shall have occurred and be continuing, such amount shall not be payable
     until such Significant Lease Default or Lease Event of Default has been
     cured, and (B) the amount payable to the Facility Lessee pursuant to this
     sentence shall not exceed the amount of the indemnity payment in respect
     of such refunded or credited Taxes that was made by the Facility Lessee.
     Any excess of (x) and (y) over (B) in this Section 9.2(f) shall be
     carried forward and reduce the Facility Lessee's obligations to make
     subsequent payments to such Tax Indemnitee pursuant to this Section 9.2.
     If it is subsequently determined that the Tax Indemnitee was not entitled
     to such refund or credit, the portion of such refund or credit that is
     required to be repaid or recaptured will be treated as Taxes for which
     the Facility Lessee must indemnify the Tax Indemnitee pursuant to this
     Section 9.2 without regard to paragraph (b) hereof. If, in connection
     with a refund or credit of all or part of any Taxes paid, reimbursed or
     advanced by the Facility Lessee pursuant to this Section 9.2, a Tax
     Indemnitee receives an amount representing interest on such refund or
     credit, the Tax Indemnitee promptly shall pay to the Facility Lessee (1)
     the amount of such interest that shall be fairly attributable to such
     Taxes paid, reimbursed or advanced by the Facility Lessee prior to the
     receipt of such refund or credit (net of Taxes payable in respect of the
     receipt or accrual of such interest) and (2) any Tax savings resulting
     from payments made by the Tax Indemnitee under (1) and (2).

Contest.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          (9)   if such contest is controlled by the Facility Lessee, prior to
commencement of a judicial action with respect to the contest, the Facility
Lessee shall have admitted in writing its liability to pay an indemnity
pursuant to this Section 9.2 with respect to such Tax, which admission shall be
binding on the Facility Lessee unless and to the extent such contest is
determined in a manner that conclusively demonstrates that the Facility Lessee
is not so liable, and

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

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

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

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

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

Reports.

If any report, statement or return is required to be filed by a Tax Indemnitee
     with respect to any Tax that is subject to indemnification under this
     Section 9.2, the Facility Lessee will (1) notify the Tax Indemnitee in
     writing of such requirement not later than 30 days prior to the date such
     report, statement or return is required to be filed (determined without
     regard to extensions) and (2) either (y) unless directed by the Tax
     Indemnitee otherwise, if permitted by applicable law, prepare such
     report, statement or return for filing by the Facility Lessee in

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     such manner as will show the ownership of the Facility by the Owner
     Lessor for United States federal, state and local income tax purposes (if
     applicable), send a copy of such report, statement or return to the Tax
     Indemnitee and timely file such report, statement or return with the
     appropriate taxing authority, or (z) in all other cases, prepare and
     furnish to such Tax Indemnitee not later than 30 days prior to the date
     such report, statement or return is required to be filed (determined
     without regard to extensions) a proposed form of such report, statement
     or return for filing by the Tax Indemnitee; provided that the only
     consequence for failure to file after compliance by the Facility Lessee
     with the requirements hereof shall be a loss of indemnification from the
     Facility Lessee in respect of any Tax to the extent resulting from such
     failure.

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

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

FACILITY LESSEE'S RIGHT OF QUIET ENJOYMENT

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

SUPPLEMENTAL FINANCING IMPROVEMENTS; OPTIONAL REFINANCINGS

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

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obligation to accept such Additional Equity Investment; and (y) the conditions
set forth below and in Section 2.12 of the Collateral Trust Indenture shall
have been satisfied. The obligation to finance such Improvements through the
issuance of Additional Lessor Notes under Section 2.12 of the Collateral Trust
Indenture (any financing of Improvements through the issuance of such
Additional Lessor Notes under the Collateral Trust Indenture being called a
"Supplemental Financing") is subject to the following additional conditions:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

the Facility Lessee shall have made or delivered such representations,
     warranties, covenants, opinions and certificates as the Owner
     Participant may reasonably request, which representations, warranties,
     covenants and agreements shall be of no greater scope than those provided
     by the Facility Lessee on the Closing Date under the Operative Documents
     to which it is a party (except to the extent necessitated by differences
     between existing Operative Documents and the terms and conditions of the
     proposed refinancing);

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

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

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

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

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

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

CERTAIN ADJUSTMENTS TO PERIODIC RENT, TERMINATION VALUE AND OTHER AMOUNTS

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

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

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

at the request of the Facility Lessee or the Owner Participant to reflect any
     enactment, promulgation, release or adoption of, amendment to or change
     in the Code, Treasury Regulations, Revenue Rulings or Revenue Procedures
     ("Tax Law Change") enacted prior to the Closing;

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

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

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

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     Adjustments made pursuant to this Section 12 shall be subject to
     verification as provided in Section 3.4 of the Facility Lease.

TRANSFER OF THE FACILITY LESSEE OWNERSHIP; SPECIAL LESSEE TRANSFERS

Transfer of the Facility Lessee Ownership.

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

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

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

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

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

the transfer shall not subject any of the Facility Lessee, the Owner
     Participant, the Owner Lessor, the Lessor Manager, the Indenture
     Trustee, the Pass Through Trustees or any

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     Certificateholder to regulation under PUHCA or state laws and regulations
     regarding the rate and financial or organizational regulation of electric
     utilities in the affected party's reasonable opinion, nor result in a
     Regulatory Event of Loss;

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

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

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

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

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

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

MISCELLANEOUS

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

Successor Owner Lessor. The parties hereto agree that the transfer or
assignment pursuant to the terms of the LLC Agreement by the Owner Lessor to a
successor Owner Lessor, will not violate the terms of any Operative Document.

Bankruptcy of Lessor Estate. If (i) all or any part of the Lessor Estate
becomes the property of a debtor subject to the reorganization provisions of
Title 11 of the United States Code, as amended from time to time, (ii) pursuant
to such reorganization provisions the Owner Participant is required, by reason
of the Owner Participant being held to have recourse liability to the debtor or
the trustee of the debtor directly or indirectly, to make payment on account of
any amount payable as principal or interest on the Lessor Notes, and (iii) the
Indenture Trustee actually receives any Excess Amount, as defined below, which
reflects any payment by the Owner Participant on account of clause (ii) above,
the Indenture Trustee shall promptly refund to the Owner Participant such
Excess Amount (and, to the extent so refunded, such amount owing under the
Lessor Notes shall be reinstated). For purposes of this Section 14.3, "Excess
Amount" means the amount by which such payment exceeds the amount which would
have been received by the Indenture Trustee if the Owner Participant had not
become subject to the recourse liability referred to in clause (ii) above.
Nothing contained in this Section 14.3 shall prevent the Indenture Trustee from
enforcing any personal recourse obligations (and retaining the proceeds
thereof) of the Owner Participant as contemplated by this Participation
Agreement (other than referred to in clause (ii)).

Amendments and Waivers. No term, covenant, agreement or condition of this
Agreement may be terminated, amended or compliance therewith waived (either
generally or in a particular

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<PAGE>

instance, retroactively or prospectively) except by an instrument or
instruments in writing executed by each party hereto.

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

          If to the Facility Lessee:

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

          with a copy to:

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

     If to the Guarantor:

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

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

          c/o Wells Fargo Bank Northwest, National Association
          MAC U1254-031
          79 South Main Street

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          Salt Lake City, UT 84111
          Telephone: (801) 246-5630
          Facsimile:  (801) 246-5053
          Attention: Corporate Trust Services

          If to the Owner Participant:

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

          with a copy to:

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

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          If to the Indenture Trustee:

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

               with a copy to:

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

          If to the Pass Through Trustees:

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

               with a copy to:

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

     If to the Manager:

          Credit Suisse First Boston
          Eleven Madison Avenue
          New York, New York 10010-3629
          Telephone No.:  (212) 325-2000
          Attention: Richard O'Day

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

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

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

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

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

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

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

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

Limitation of Liability.

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

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

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

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

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<PAGE>

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

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

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

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

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

                                      76

<PAGE>

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

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

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

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

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

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

                                      77

<PAGE>

dated July 24, 2001 between Calpine and CSFB and the letter agreement dated
August 1, 2001 between Calpine and Newcourt Capital Securities, Inc. shall not
be superceded hereby and shall remain in full force and effect.

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

Confidentiality of Information. Each of the parties hereto agrees that any
information (x) contained herein or in the other Operative Documents (including
any terms, conditions, agreements, financial projections, and other financial
and operating information contained herein or therein, and the terms of any
insurance policies required or otherwise maintained pursuant hereto), (y)
disclosed or to be disclosed by one such party to another such party (for
purposes of this Section 14.21, each of the parties to this Agreement being
referred to herein as a "Receiving Party") in connection with this Agreement or
any other Operative Document, or (z) otherwise received in connection with this
Agreement or any other Operative Document (or the transactions contemplated
thereby) and designated by the disclosing party in writing as confidential,
shall, in each case, be kept confidential by the Receiving Party and shall not
be used otherwise than in connection with the business of the Parties
contemplated hereunder except:

to the extent such information is generally available to the public prior to
     the Receiving Party's receipt thereof, or which becomes public after
     such receipt, but through no violation by such Receiving Party of this
     Section 14.21;

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

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

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

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

as may be disclosed to any transferee or proposed transferee of the Receiving
     Party; provided, however, that, prior to any such disclosure, any such
     transferee or proposed transferee, as the case may be, shall have agreed
     in writing to be bound by the terms of this Section 14.21; or

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

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

                                      78

<PAGE>

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

Amendments, Etc. No Operative Document nor any of the terms thereof (including
the terms of this Section 14.23) may be terminated, amended, supplemented,
waived or modified, except by an instrument in writing (a) signed in the case of
a waiver, by the party against which enforcement of such waiver is sought, and
no such waiver shall become effective unless signed copies thereof shall have
been delivered to each such party or (b) in the case of termination, amendments,
supplements or modifications, consented to by all parties hereto; provided,
however, that the consent of the Facility Lessee is not required in the case of
amendments to any Operative Document to which the Facility Lessee is not a party
and which would not increase or accelerate the Facility Lessee's or the
Guarantor's obligations under any of the Operative Documents nor impair the
Facility Lessee's or the Guarantor's rights under any of the Operative
Documents. Notwithstanding the foregoing, Section 5.6 of the Collateral Trust
Indenture shall not be amended without the Guarantor's consent.

                                      79

<PAGE>

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

                   ROCKGEN ENERGY LLC,
                   a Wisconsin limited liability company

                        By:_________________________________
                        Name:
                        Title:
                        Date:

<PAGE>

                        ROCKGEN OL-4 LLC, a Delaware limited
                        liability company

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

                        By:_________________________________
                        Name:
                        Title:
                        Date:

                        SBR OP-4 LLC, a Delaware limited liability company

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

                        By:_________________________________
                        Name:
                        Title:
                        Date:

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

                        By:_________________________________
                        Name:
                        Title:
                        Date:

<PAGE>

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

                        By:_________________________________
                        Name:
                        Title:
                        Date:

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

                        By:_________________________________
                        Name:
                        Title:
                        Date:

<PAGE>

                        CALPINE CORPORATION
                                          a Delaware corporation

                        By:_________________________________
                        Name:
                        Title:
                        Date:

<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(a) of the Collateral Trust Indenture.

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

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

                                      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, 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.

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

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

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

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

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

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

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

     "BILL OF SALE" shall mean the Bill of Sale (RG-4) dated as of the
     Closing Date between the Facility Lessee and the Owner Lessor,
     substantially in the form of Exhibit B-1 to the

                                      5

<PAGE>

     Participation Agreement duly completed, executed and delivered on the
     Closing Date pursuant to which the Owner Lessor will purchase the
     Undivided Interest from the Facility Lessee.

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

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

     "BROAD RIVER ASSIGNMENT AGREEMENTS" shall mean each of the assignment
     agreements executed and delivered pursuant to the Broad River
     Participation Agreements.

     "BROAD RIVER CALPINE GUARANTIES" shall mean the Calpine guaranty and
     payment agreements executed and delivered by Calpine pursuant to the
     Broad River Participation Agreements.

     "BROAD RIVER COLLATERAL TRUST INDENTURES" shall mean each of the
     collateral trust indentures executed and delivered pursuant to the Broad
     River Participation Agreements.

     "BROAD RIVER FACILITY LEASES" shall mean a collective reference to each
     of the four facility lease agreements, dated as of October 18, 2001, by
     and between the applicable Broad River Owner Lessor and the Broad River
     Facility Lessee, pursuant to which the applicable Broad River Owner
     Lessor will lease the applicable Broad River Ground Interests to Broad
     River Facility Lessee.

     "BROAD RIVER FACILITY LESSEE" shall mean Broad River Energy LLC.

     "BROAD RIVER FACILITY SITE" shall have the meaning set forth in the
     recitals to the Broad River Facility Site Leases.

     "BROAD RIVER FACILITY SITE LEASES" shall mean a collective reference to
     each of the four facility site leases, dated as of October 18, 2001, by
     and between the applicable Broad River Owner Lessor and the Broad River
     Facility Lessee, pursuant to which the applicable Broad River Owner
     Lessor will lease the applicable Broad River Ground Interest to the Broad
     River Facility Lessee.

     "BROAD RIVER GROUND INTERESTS" shall mean the undivided leasehold
     interests in the Broad River Facility Site conveyed to the Broad River
     Owner Lessors under the Broad River Assignment Agreements.

     "BROAD RIVER INDENTURE TRUSTEES" shall mean each of the indenture
     trustees relating to the Broad River Collateral Trust Indentures.

                                      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.

     "BUYER(S)" shall mean, individually or collectively, (a) Wisconsin Power
     & Light Company, (b) IES Utilities and (c) Interstate Power Company.

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

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

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

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

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

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

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

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

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

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

                                      8

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

     "CONSOLIDATED CURRENT LIABILITIES," as of the date of determination,
     means the aggregate amount of consolidated liabilities of the Guarantor
     and its consolidated Restricted Subsidiaries which may properly be
     classified as current liabilities (including taxes accrued as estimated),
     after eliminating (i) all inter-company items between the

                                      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.

     "DEED" means that certain Warranty Deed (RG-4), dated as of October 18,
     2001, from Facility Lessee to Owner Lessor, substantially in the form of
     Exhibit B-2 to the Participation Agreement.

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

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

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

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

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

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

     "ENGINEERING REPORT" shall mean, with respect to the Facility, the
     report of the Engineering Consultant, dated September 12, 2001.

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

     "ENVIRONMENTAL CONSULTANT" shall mean Clayton Group Services, Inc..

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

                                      11

<PAGE>

     "ENVIRONMENTAL REPORTS" shall mean the Phase I Environmental Site
     Assessment Report, dated September 27, 2001, prepared by the
     Environmental Consultant.

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

     "EQUITY INVESTOR" shall mean Newcourt Capital USA Inc.

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

     "EQUITY PORTION OF TERMINATION VALUE" in respect of any determination of
     Termination Value or amount determined by reference to Termination Value
     payable pursuant to the Operative Documents, shall mean an amount equal to
     the excess, if any, of (i) the Termination Value set forth opposite the
     Termination Date corresponding to such date of determination on Schedule 2
     of the Facility Lease, and, if such date of determination is a Rent
     Payment Date, Periodic Rent due on that date (to the extent payable in
     arrears) over (ii) the balance, including scheduled (in accordance with
     the payment terms of the Lessor Notes) accrued interest, on the Lessor
     Notes scheduled (in accordance with the payment terms of the Lessor Notes)
     to be outstanding on such date of determination corresponding to the
     Facility Lease.

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

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

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

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

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

          (iii)   (a) seizure, condemnation, confiscation or taking of, or
     requisition (a "Requisition") of title to the Facility by any
     Governmental Entity that shall have resulted in loss by the Owner Lessor,
     of title to its Undivided Interest or leasehold interest of the Ground
     Interest, following exhaustion of all permitted appeals or an election by
     the Facility Lessee in its discretion not to pursue such appeals or
     rights; provided that no such contest (or exercise) shall extend beyond
     the earlier of the date which is (x) six

                                      12

<PAGE>

     months after the loss of such leasehold interest or title, or (y) 48
     months prior to the end of the Basic Lease Term or any Renewal Lease Term
     then in effect or elected by the Facility Lessee or (b) Requisition of
     use of, or leasehold in, the Undivided Interest or the Ground Interest by
     any Governmental Entity that shall have resulted in the loss of
     possession of the Undivided Interest or all or any part of the Ground
     Interest that is required for the use or operation of the Facility;
     provided that in any case involving Requisition of use of the Facility,
     or all or any part of the Facility Site that is required for the use or
     operation, of the Facility, such event shall be an Event of Loss only if
     loss of possession continues beyond the Basic Lease Term or any Renewal
     Lease Term then in effect or elected by the Facility Lessee; or

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

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

                                      13

<PAGE>

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

          (vii)   one or more of the Buyers under the RockGen PPA has
     exercised the purchase option to acquire the Facility pursuant to the
     RockGen PPA, such purchase option presently being set forth in Section
     3.05 thereof.

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

     "EXCEPTED PAYMENTS" shall mean and include (i)(A) any right, title or
     interest to any indemnity (whether or not constituting Supplemental Rent
     and whether or not a Lease Event of Default exists) payable to either the
     Owner Lessor, the Lessor Manager, the Trust Indenture Company, or the
     Owner Participant or to their respective Indemnitees and successors and
     permitted assigns (other than the Indenture Trustee) pursuant to

                                      14

<PAGE>

     Section 2.3, 9.1, 9.2, 11.1 or 11.2 of the Participation Agreement, and
     any payments under any Tax Indemnity Agreement (provided that Excepted
     Payments shall not include any Periodic Rent) or (B) any amount payable
     by the Facility Lessee to the Owner Lessor or the Owner Participant to
     reimburse any such Person for its costs and expenses in exercising its
     rights under the Operative Documents, (ii)(A) insurance proceeds, if any,
     payable to the Owner Lessor or the Owner Participant under insurance
     separately maintained by the Owner Lessor or the Owner Participant with
     respect to the Facility as permitted by Section 3(b) of Schedule 5.31 to
     the Participation Agreement or (B) proceeds of personal injury or
     property damage liability insurance maintained under any Operative
     Document for the benefit of the Owner Lessor or the Owner Participant,
     (iii) any amount payable to the Owner Participant as the purchase price
     of the Owner Participant's right and interest in the Member Interest,
     (iv) all other fees expressly payable to the Owner Participant under the
     Operative Documents, (v) any payments in respect of interest, or any
     payments made on an After-Tax Basis, to the extent attributable to
     payments referred to in clause (i) through (vi) above; (vii) any amounts
     paid to the Owner Lessor as reimbursement for amounts expended pursuant
     to Section 20 of the Facility Lease; (viii) proceeds of the items
     referred to in clause (i) through (vii) above; and (ix) any rights to
     demand, collect, sue for, or otherwise receive and enforce payment of the
     foregoing amounts, including under the Calpine Guaranty, but without
     limiting clause (v) of this definition above.

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

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

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

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

     "FACILITY" shall mean a 520 MW nameplate capacity gas-fired simple cycle
     merchant power plant located in Christiana, Wisconsin, and more fully
     described in Exhibit A to the Participation Agreement. The Facility does
     not include the Facility Site.

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

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

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

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

                                      15

<PAGE>

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

     "FACILITY SITE LESSEE" shall mean Owner Lessor

     "FACILITY SITE LESSOR" shall mean RockGen Energy LLC .

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

     "FACILITY SITE SUBLEASE" shall mean the Facility Site Sublease (RG-4),
     dated as of October 18, 2001, between the Facility Lessee and the Owner
     Lessor, substantially in the form of Exhibit E to the Participation
     Agreement, pursuant to which the Owner Lessor will sublease the Ground
     Interest to the Facility Lessee.

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

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

                                      16

<PAGE>

     has been made, the Fair Market Sales Value of the Owner Lessor's
     Interest shall be determined by appraisal pursuant to the Appraisal
     Procedures. Any fair market value determination of a Severable
     Improvement shall take into consideration any liens or encumbrances to
     which the Severable Improvement being appraised is subject and which are
     being assumed by the transferee.

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

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

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

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

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

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

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

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

          (iv)   Intentionally Omitted; and

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

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

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

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

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

                                      17

<PAGE>

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

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

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

     "GAAP" shall mean generally accepted accounting principles.

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

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

     "GROUND INTEREST" shall mean the Owner Lessor's 25% undivided leasehold
     interest in the Facility Site.

     "GUARANTOR" shall mean Calpine Corporation.

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

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

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

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

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

                                      18

<PAGE>

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

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

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

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

                                      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, N.A., not in its individual capacity, except as expressly
     provided herein, but solely as Indenture Trustee under the Operative
     Documents.

     "INDENTURE TRUSTEE OFFICE" shall mean the office to be used for notices
     to the Indenture Trustee from time to time pursuant to Section 9.5 of the
     Collateral Trust Indenture.

     "INDENTURE TRUSTEE'S ACCOUNT" shall mean the account specified with
     respect thereto on Schedule 1-B to the Participation Agreement or such
     other account of the Indenture Trustee, as the Indenture Trustee may from
     time to time specify in a notice to the other parties to the
     Participation Agreement.

     "INDENTURE TRUSTEE'S LIENS" shall mean any Lien on the Lessor Estate,
     the Facility, the Facility Site or any part thereof or any interest
     therein arising as a result of (i) Taxes against or affecting the Lease
     Indenture Company or the Indenture Trustee, or any Affiliate thereof that
     are not related to, or that are in violation of, any Operative Document
     or the transactions contemplated thereby, (ii) Claims against or any act
     or omission of the Lease Indenture Company or the Indenture Trustee, or
     Affiliate thereof that is not related to, or that is in violation of, any
     of such Person's representations, warranties, covenants or agreements in
     an Operative Document or the transactions contemplated thereby or that is
     in breach of any covenant or agreement of the Lease Indenture Company or
     the Indenture Trustee specified therein, (iii) Taxes imposed upon the
     Lease Indenture Company or the Indenture Trustee, or any Affiliate
     thereof that are not indemnified against by the Facility Lessee pursuant
     to any Operative Document or (iv) Claims against or affecting the Lease
     Indenture Company or the Indenture Trustee, or any Affiliate thereof
     arising out of the voluntary or involuntary transfer by the Lease
     Indenture Company or the Indenture Trustee of any portion of the interest
     of the Lease Indenture Company or the Indenture Trustee in the Lessor
     Estate, other than pursuant to the Operative Documents.

     "INDEPENDENT APPRAISER" shall mean a disinterested, licensed industrial
     property appraiser who is a member of the Appraisal Institute having
     experience in the business of evaluating facilities similar to the
     Facility.

     "INITIAL LESSOR NOTES" shall have the meaning set forth in Section 2.2
     of the Collateral Trust Indenture.

                                      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 a Facility Site Sublease, shall
     have the meaning set forth in Section 2.1(a) of such Facility Site
     Sublease.

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

     "INSURANCE CONSULTANT" shall mean Marsh USA, Inc.

     "INVESTMENT BANKER" shall have the meaning set forth in Section 2.10(d) of
      the Collateral Trust Indenture.

     "INVESTMENT COMPANY ACT" shall mean the Investment Company Act of 1940.

     "INVESTMENT GRADE" with respect to a Rating Agency, shall mean, with
     respect to S&P, BBB- or higher, and with respect to Moody's, Baa3 or
     higher, or, if after the Closing Date a different system of ratings is
     established, the term shall mean a rating in one of such Rating Agency's
     generic rating categories that is comparable to such ratings.

     "IRS" shall mean the Internal Revenue Service of the United States
     Department of Treasury or any successor agency.

     "L/C BANK" shall mean the Acceptable Bank providing a letter of credit
     pursuant to Section 5.3 of the Facility Lease.

     "LEASE DEBT" shall mean the debt evidenced by the Lessor Notes.

     "LEASE DEBT RATE" shall mean the applicable interest rate accruing on
     Lessor Notes.

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

     "LEASE EVENT OF DEFAULT" with respect to the Facility Lease, shall have
     the meaning specified in Section 16 of the Facility Lease.

     "LEASE INDENTURE COMPANY" shall mean State Street Bank and Trust Company
     of Connecticut, N.A., in its individual capacity under the Operative
     Documents.

     "LEASE INDENTURE EVENT OF DEFAULT" shall have the meaning set forth in
     Section 4.2 of the Collateral Trust Indenture.

     "LEASE OBLIGATIONS" shall mean, without duplication, (i) indebtedness
     represented by obligations under a lease that is required to be
     capitalized for financial reporting purposes, (ii) with respect to
     operating leases of electric generating facilities, the termination value
     or similar amount payable by the lessee under such lease and (iii) the
     principal amount of financial obligations under any synthetic lease, tax
     retention operating

                                      21

<PAGE>

     lease, off-balance sheet loan or similar off-balance sheet financing
     product where such transaction is considered borrowed money indebtedness
     of the lessee for tax purposes but is classified as an operating lease
     under GAAP.

     "LEASEHOLD LIEN" with respect to the Facility Site Lease or the Facility
     Site Sublease, shall have the meaning set forth in Section 16.4 of the
     Facility Site Lease or Section 15.3 of the Facility Site Sublease.

     "LEASEHOLD MORTGAGEE" with respect to the Facility Site Lease or the
     Facility Site Sublease, shall have the meaning set forth in Section 16.4
     of the Facility Site Lease or Section 15.3 of the Facility Site Sublease.

     "LESSEE 467 LOAN INTEREST" with respect to the Facility Lease, shall
     have the meaning specified in Section 3.2(d) of the Facility Lease.

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

     "LESSOR 467 LOAN INTEREST" with respect to the Facility Lease, shall
     have the meaning specified in Section 3.2(d) of the Facility Lease.

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

     "LESSOR ESTATE" shall mean all the estate, right, title and interest of
     the Owner Lessor in, to and under the Undivided Interest, the Ground
     Interest and the Operative Documents, including all funds advanced to the
     Owner Lessor by the Owner Participant, all installments and other
     payments of Periodic Rent, Supplemental Rent or Termination Value under
     the Facility Lease, condemnation awards, purchase price, sale proceeds,
     insurance proceeds and all other proceeds, rights and interests of any
     kind for or with respect to the estate, right, title and interest of the
     Owner Lessor in, to and under the Undivided Interest, the Ground Interest
     and the Operative Documents and any of the foregoing, but shall not
     include Excepted Payments.

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

     "LESSOR NOTE(S)" shall mean, individually or collectively as the context
     may require, the Initial Lessor Notes and Additional Lessor Notes, each
     issued pursuant to the Collateral Trust Indenture.

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

     "LIEN" shall mean any mortgage, security deed, security title, pledge,
     lien, charge, encumbrance, lease, and security interest or title
     retention arrangement.

                                      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 straightline
     basis (rounding to the nearest calendar month, if necessary) from the
     yields to maturity for two U.S. Treasury securities having average lives
     most closely corresponding to the remaining life of such Lessor Note and
     trading in the secondary market at the price closest to par.

     "MANAGER" shall mean CSFB.

     "MATERIAL ADVERSE CHANGE" and "MATERIAL ADVERSE EFFECT" shall mean a
     material adverse effect on (a) the economic prospects, operations,
     assets, financial position, results of operation or business of the
     Guarantor, including a material adverse effect on (i) the Facility, the
     Undivided Interest, the Facility Site or the Ground Interest which
     adversely affects the ability of the Guarantor to perform its obligations
     under the Operative Documents or (ii) the validity or enforceability of
     the Operative Documents, (b) the Indenture Estate or the Lessor Estate,
     the security interests in the Lessor Estate, or (c) with respect to the
     Owner Participant's (but not the Certificateholders') interest in the
     Undivided Interest, the residual value or remaining useful life of the
     Facility.

     "MEMBER INTEREST" shall mean the interest of the Owner Participant in
     the Owner Lessor.

     "MEMORANDUM OF FACILITY SITE LEASE" shall mean the Memorandum of
     Facility Site Lease (RG-4), dated as of the Closing Date, between the
     Facility Lessee, as landlord, and the Owner Lessor, as tenant, and filed
     with the Recorder of Dane County, Wisconsin.

                                      23

<PAGE>

     "MEMORANDUM OF FACILITY SITE SUBLEASE" shall mean the Memorandum of
     Facility Site Sublease (RG-4), dated as of the Closing Date, between the
     Owner Lessor, as sublandlord, and the Facility Lessee, as subtenant filed
     with the Recorder of Dane County, Wisconsin.

     "MEMORANDUM OF LEASE" shall mean the Memorandum of Facility Lease
     (RG-4), dated as of the Closing Date, between the Owner Lessor and the
     Facility Lessee filed with the Recorder of Dane County, Wisconsin.

     "MOODY'S" shall mean Moody's Investors Service, Inc. and any successor
     thereto.

     "MULTIEMPLOYER PLAN" shall mean any Plan that is a multiemployer plan
     (as defined in Section 4001(a)(3) of ERISA).

     "NOTE REGISTER" shall have the meaning specified in Section 2.8 of the
     Collateral Trust Indenture.

     "NOTEHOLDER(S)" shall mean any holder of record (as reflected on the
     Note Register) from time to time of a Lessor Note outstanding.

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

     "OBLIGATIONS" shall have the meaning set forth in Section 2.2 of the
     Calpine Guaranty.

     "OBSOLESCENCE TERMINATION DATE" shall have the meaning specified in
     Section 14.1 of the Facility Lease.

     "OFFERING CIRCULAR" shall mean the Offering Circular, dated October 11,
     2001, with respect to the Certificates.

     "OFFICER" shall mean, solely with respect to the Guarantor, the
     Chairman, the President, any Vice President, the Chief Operating Officer,
     the Chief Financial Officer, the Treasurer, the Secretary, any Assistant
     Treasurer, any Assistant Secretary or the Controller or Principal
     Accounting Officer of the Guarantor.

     "OFFICER'S CERTIFICATE" shall mean with respect to any Person, a
     certificate signed (i) in the case of a corporation, by the Chairman of
     the Board, the President, or a Vice President of such Person or any
     Person authorized by or pursuant to the organizational documents, the
     by-laws or any resolution of the Board of Directors or Executive
     Committee of such Person (whether general or specific) to execute,
     deliver and take actions on behalf of such Person in respect of any of
     the Operative Documents, (ii) in the case of a partnership, by the
     Chairman of the Board of Directors, the President or any Vice President,
     the Treasurer or an Assistant Treasurer of a corporate general partner
     and (iii) in the case of an Indenture Trustee, a certificate signed by a
     Responsible Officer of such Indenture Trustee.

                                      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 Bill of
     Sale, the Facility Lease, the Certificates, the Facility Site Lease, the
     Facility Site Sublease, the Collateral Trust Indenture, the Lessor Notes,
     the Pass Through Trust Agreements, the LLC Agreement, the Tax Indemnity
     Agreement, the Calpine Guaranty, the OP Parent Guaranty (if any), the
     Certificate Purchase Agreement, and the Ownership and Operation Agreement.

     "OPERATOR" shall mean Calpine Northbrook Services, LLC or any
     replacement Operator appointed pursuant to the Operative Documents.

     "OPINION OF COUNSEL" shall mean, with respect to any Calpine Party, a
     written opinion (i) from Ronald W. Fischer or any other internal counsel
     of Calpine, as to matters contained in such opinions delivered at
     Closing, and as to all other matters, Thelen Reid & Priest LLP and/or
     Davis Wright & Tremaine LLP, or any other outside legal counsel
     reasonably acceptable to the Owner Participant, (ii) in form and
     substance (with respect to qualifications, exception, assumption and the
     like) substantially equivalent to the legal opinions delivered at
     Closing, with any material modification or supplements thereto to be
     reasonably acceptable to the Owner Participant, or in any such other form
     as may be reasonably acceptable to the Owner Participant, and (iii) the
     scope of which shall cover due authorization, execution, delivery and
     enforceability of the applicable agreement(s), and exemption from
     regulation, in each case, substantially in the form set forth in the
     opinions delivered at Closing with any material modifications thereto to
     be reasonably acceptable to the Owner Participant.

     "OPTIONAL IMPROVEMENT" with respect to the Facility Lease, shall have
     the meaning specified in Section 8.2 of the Facility Lease.

                                      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 RockGen
     Calpine Guaranties, the Broad River Calpine Guaranties and the South
     Point Calpine Guaranties.

     "OTHER FACILITY LEASES" shall mean collectively, the Other RockGen
     Facility Leases, the Broad River Facility Leases and the South Point
     Facility Leases.

     "OTHER OWNER LESSORS" shall mean collectively, the Other RockGen Owner
     Lessors, the Broad River Owner Lessors and the South Point Owner Lessors.

     "OTHER ROCKGEN BILLS OF SALE" shall mean each of the bills of sale
     executed and delivered pursuant to the Other RockGen Participation
     Agreements.

     "OTHER ROCKGEN CALPINE GUARANTIES" shall mean the other Calpine guaranty
     and payment agreements executed and delivered by Calpine pursuant to the
     Other RockGen Participation Agreements.

     "OTHER ROCKGEN COLLATERAL TRUST INDENTURES" shall mean each of the
     collateral trust indentures executed and delivered pursuant to the Other
     RockGen Participation Agreements.

     "OTHER ROCKGEN FACILITY LEASES" shall mean the other RockGen facility
     lease agreements, dated as of October 18, 2001, by and between the Other
     RockGen Owner Lessors and the Facility Lessee, pursuant to which the
     Other RockGen Owner Lessors will lease the Other RockGen Undivided
     Interests to the Facility Lessee.

     "OTHER ROCKGEN FACILITY SITE LEASES" shall mean the other facility site
     leases, dated as of October 18, 2001, by and between the Other RockGen
     Owner Lessors and the Facility Lessee pursuant to which the Facility
     Lessee will lease the Other RockGen Ground Interests to the Other RockGen
     Owner Lessors.

     "OTHER ROCKGEN FACILITY SITE SUBLEASES" shall mean the other facility
     site subleases, dated as of October 18, 2001, by and between the Other
     RockGen Owner Lessors and the Facility Lessee pursuant to which the Other
     RockGen Owner Lessors will sublease the Ground Interest to the Facility
     Lessee.

                                      26

<PAGE>

     "OTHER ROCKGEN GROUND INTERESTS" shall mean the undivided interests in
     the Facility Site not conveyed to the Owner Lessor under the Facility
     Site Lease.

     "OTHER ROCKGEN INDENTURE TRUSTEES" shall mean each of the indenture
     trustees relating to the Other RockGen Collateral Trust Indentures.

     "OTHER ROCKGEN LEASE TRANSACTIONS" shall mean the transactions involving
     the sale of the Other RockGen Undivided Interests and the lease of the
     Other RockGen Ground Interests to the Other RockGen Owner Lessors, and
     the lease by the Other RockGen Owner Lessors of the Other RockGen
     Undivided Interests and sublease by the Other RockGen Owner Lessors of
     the Other RockGen Ground Interest to the Facility Lessee on substantially
     the same terms and conditions as under, and dated the same date as, the
     Overall Transaction.

     "OTHER ROCKGEN LESSOR MANAGERS" shall mean each of the lessor managers
     acting on behalf of the Other RockGen Owner Lessors pursuant to the Other
     RockGen Operative Documents.

     "OTHER ROCKGEN OWNER LESSORS" shall mean RockGen OL-1, LLC, RockGen
     OL-2, LLC and RockGen OL-3, LLC.

     "OTHER ROCKGEN OWNER PARTICIPANTS" shall mean SBR OP-1, LLC, SBR OP-2,
     LLC and SBR OP-3, LLC.

     "OTHER ROCKGEN OPERATIVE DOCUMENTS" shall mean the other "Operative
     Documents" for each of the Other RockGen Lease Transactions.

     "OTHER ROCKGEN PARTICIPATION AGREEMENTS" shall mean a collective
     reference to each of the other three separate participation agreements
     entered into by the Facility Lessee, the applicable Other RockGen Owner
     Lessor, the Other RockGen Lessor Manager, Other RockGen Owner
     Participant, Other RockGen Indenture Trustee, Pass Through Trustees and
     Calpine and designated Participation Agreement (RG-1), Participation
     Agreement (RG-2) and Participation Agreement (RG-3), each dated as of the
     Closing Date, pursuant to which, among other things, the Facility Lessee
     has agreed to (a) sell to the applicable Other RockGen Owner Lessors
     certain undivided interests in the Facility and lease certain undivided
     interests in the Facility Site, and (b) sublease from the applicable
     Other RockGen Owner Lessors such undivided interest in the Facility Site
     pursuant to the Other RockGen Facility Site Sublease.

     "OTHER ROCKGEN UNDIVIDED INTERESTS" shall mean the undivided interest in
     the Facility not conveyed to the Owner Lessor under the Bill of Sale.

     "OVERALL TRANSACTION" shall mean all of the transactions contemplated by
     the Operative Documents.

     "OVERDUE RATE" shall mean a rate per annum equal to the prime commercial
     lending rate of the Chase Manhattan Bank (as publicly announced to be
     effect from time to time,

                                      27

<PAGE>

     such rate to be adjusted automatically, without notice, on the effective
     date of any change in such rate) plus 1%.

     "OWNER LESSOR" shall mean RockGen OL-4, LLC, a Delaware limited
     liability company created for the benefit of the Owner Participant.

     "OWNER LESSOR'S ACCOUNT" shall mean Wells Fargo Bank Northwest, National
     Association, Salt Lake City, Utah, ABA # 121-000-248, Account: Corporate
     Trust Services, Account # 051-0922115, Credit to: RockGen OL-4, LLC.

     "OWNER LESSOR'S INTEREST" shall mean the Owner Lessor's right, title and
     interest in and to the Undivided Interest and the Ground Interest.

     "OWNER LESSOR'S LIEN(S)" individually or collectively as the context may
     require, shall mean any Lien on the Lessor Estate, the Facility Sites, or
     any part of any thereof or interest therein arising as a result of (i)
     Taxes against or affecting the Owner Lessor, the Trust Company or the
     Lessor Manager or any Affiliate thereof that are not related to, or that
     are in violation of, any Operative Document or the transactions
     contemplated thereby, (ii) Claims against or any act or omission of the
     Owner Lessor, the Trust Company or the Lessor Manager or Affiliate
     thereof that is not related to, or that is in violation of, any Operative
     Document or the transactions contemplated thereby or that is in breach of
     any covenant or agreement of the Owner Lessor, the Trust Company or the
     Lessor Manager specified therein, (iii) Taxes imposed upon the Owner
     Lessor, the Trust Company or the Lessor Manager or any Affiliate thereof
     that are not indemnified against by the Facility Lessee pursuant to any
     Operative Document or (iv) Claims against or affecting the Owner Lessor,
     the Trust Company or the Lessor Manager or any Affiliate thereof arising
     out of the voluntary or involuntary transfer by the Owner Lessor, the
     Trust Company or the Lessor Manager of any portion of the interest of the
     Owner Lessor in the Owner Lessor's Interest, other than pursuant to the
     Operative Documents.

     "OWNER LESSOR'S PERCENTAGE" shall mean 25%.

     "OWNER PARTICIPANT" shall mean SBR OP-4, LLC, a Delaware limited
     liability company.

     "OWNER PARTICIPANT'S ACCOUNT" shall mean the account maintained by the
     Owner Participant at the bank specified with respect thereto on Schedule
     1-C to the Participation Agreement, or such other account of the Owner
     Participant, as the Owner Participant may from time to time specify in a
     notice to the Indenture Trustee pursuant to Section 9.5 of the Collateral
     Trust Indenture.

     "OWNER PARTICIPANT'S COMMITMENT" shall mean the Owner Participant's
     investment in the Owner Lessor contemplated by Section 2.1(a) of the
     Participation Agreement.

     "OWNER PARTICIPANT'S LIEN(S)" individually or collectively as the
     context may require, shall mean any Lien on the Lessor Estate, the
     Facility Sites, or any part of any thereof or interest therein arising as
     a result of (i) Claims against or any act or omission of the Owner
     Participant that is not related to, or that is in violation of, any
     Operative Document

                                      28

<PAGE>

     or the transactions contemplated thereby or that is in breach of any
     covenant or agreement of the Owner Participant set forth therein, (ii)
     Taxes against the Owner Participant that are not indemnified against by
     the Facility Lessee pursuant to the Operative Documents or (iii) Claims
     against or affecting the Owner Participant arising out of the voluntary
     or involuntary transfer by the Owner Participant of any portion of the
     interest of the Owner Participant in the Member Interest, other than any
     transfer (x) pursuant to the exercise of any of the Facility Lessee's (or
     any Affiliate thereof) rights under the Operative Documents or (y) during
     the continuance of a Lease Event of Default.

     "OWNER PARTICIPANT'S NET ECONOMIC RETURN" shall mean the Owner
     Participant's anticipated (i) after-tax yield, calculated according to
     the multiple investment sinking fund method of analysis, and (ii)
     periodic GAAP income and aggregate after-tax cash flow.

     "OWNERSHIP AND OPERATION AGREEMENT" shall mean the Ownership and
     Operation Agreement, dated as of October 18, 2001, among the Facility
     Lessee, the Owner Lessor and the Other RockGen Owner Lessors.

     "OWNERSHIP INTEREST" shall mean, with respect to the Facility Lessee (or
     any assigns of the Facility Lessee), any and all equity interest in the
     Facility Lessee (or such assignee of the Facility Lessee) howsoever
     designated (whether capital stock, partnership interest, member interest
     or any equivalent interest).

     "PARTICIPATION AGREEMENT" shall mean the Participation Agreement, dated
     as of October 18, 2001, among the Facility Lessee, the Guarantor, the
     Owner Lessor, the Owner Participant, Wells Fargo Bank Northwest, National
     Association, not in its individual capacity, except as expressly provided
     therein, but solely as Lessor Manager, State Street Bank and Trust
     Company of Connecticut, as Indenture Trustee, and State Street Bank and
     Trust Company of Connecticut, as Pass Through Trustees.

     "PASS THROUGH COMPANY" shall mean State Street Bank and Trust Company of
     Connecticut, N.A., in its individual capacity, together with its
     successors and permitted assigns.

     "PASS THROUGH TRUST AGREEMENT" shall mean one or more, as the context
     may require, of (i) the Pass Through Trust Agreement A, dated as of
     October 18, 2001, and (ii) the Pass Through Trust Agreement B, dated as
     of October 18, 2001, in each case between the Facility Lessee and a Pass
     Through Trustee.

     "PASS THROUGH TRUSTEES" shall mean State Street Bank and Trust Company
     of Connecticut, N.A., not in its individual capacity, but solely as Pass
     Through Trustees under each of the Pass Through Trust Agreements, and
     each other Person that may from time to time be acting as a Pass Through
     Trustee in accordance with the provisions of a Pass Through Trust
     Agreement.

     "PASS THROUGH TRUSTS" shall mean the pass through trusts created
     pursuant to the Pass Through Trust Agreements.

                                      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, as well as the rights of
     sublessees and/or assignees to the extent set forth in or expressly
     permitted pursuant to the Facility Lease or any other Operative Document,
     (b) as to the Facility Lessee, Owner Lessor's Liens, Owner

                                      30

<PAGE>

     Participant's Liens and Indenture Trustee's Liens, (c) Liens for any tax,
     assessment or other governmental charge, either secured by a bond
     reasonably acceptable to the Indenture Trustee and the Pass Through
     Trustees and, so long as no Lease Indenture Event of Default which is not
     a Lease Event of Default exists, the Owner Lessor, or not yet due or
     being contested in good faith and by appropriate proceedings, so long as
     (i) such proceedings shall not reasonably be expected to give rise to
     criminal liability or material civil liability on the part of the Owner
     Lessor, the Owner Participant, the Lessor Manager, the Trust Company, the
     Indenture Trustee, the Pass Through Trustees or any Certificateholders,
     and would not otherwise reasonably be expected to have a Material Adverse
     Effect, or (ii) adequate reserves consistent with GAAP requirements have
     been established and are maintained, so as to assure such Persons that
     any taxes, assessments or other charges determined to be due will be
     promptly paid in full when such contest is determined, (d) materialmen's,
     mechanics', workers', repairmen's, employees' or other like Liens arising
     in the ordinary course of business or in connection with the maintenance
     or repair of the Facility, for amounts not yet due or for amounts being
     contested in good faith and by appropriate proceedings, so long as
     (i) such proceedings shall not reasonably be expected to give rise to
     criminal liability or material civil liability on the part of the Owner
     Lessor, the Owner Participant, the Lessor Manager, the Trust Company, the
     Indenture Trustee, the Pass Through Trustees or any Certificateholders,
     and would not otherwise reasonably be expected to have a Material Adverse
     Effect, and (ii) adequate reserves consistent with GAAP requirements have
     been established and are maintained, so as to ensure that any amounts
     determined to be due will be promptly paid in full when such contest is
     determined, (e) Liens arising out of judgments or awards, but only so
     long as an appeal or proceeding for review is being prosecuted in good
     faith and so long as (i) such proceedings shall not reasonably be
     expected to give rise to criminal liability or material civil liability
     on the part of the Owner Lessor, the Owner Participant, the Lessor
     Manager, the Trust Company, the Indenture Trustee, the Pass Through
     Trustees or any Certificateholders, and would not otherwise reasonably be
     expected to have a Material Adverse Effect, and (ii) adequate reserves
     consistent with GAAP requirements have been established and are
     maintained, so as to ensure that any amounts determined to be due will be
     promptly paid in full when such contest is determined, or are fully
     covered by insurance, (f) mineral rights the use and enjoyment of which
     do not materially interfere with the use and enjoyment of the Facility,
     (g) Permitted Encumbrances, (h) Liens, deposits or pledges to secure
     statutory obligations or performance of bids, tenders, contracts (other
     than for the repayment of borrowed money) or leases, or for purposes of
     like general nature in the ordinary course of its business, (i) existing
     Liens that have been disclosed to the Transaction Parties prior to the
     Closing Date and which are reasonably acceptable to the Transaction
     Parties, (j) Liens incident to the ordinary course of business that are
     not incurred in connection with the obtaining of any loan, advance or
     credit in respect of borrowed money permitted to be incurred pursuant to
     the Operative Documents so long as such Liens (x) do not in the aggregate
     materially impair the use of the property or assets of the Facility
     Lessee or the value of such property or assets for the purposes of such
     business and (y) shall not reasonably be expected to give rise to
     criminal liability or unindemnified, material civil liability on the part
     of the Owner Lessor, the Owner Participant, the Lessor Manager, the Trust
     Company, the Indenture Trustee, the Pass Through Trustees or any
     Certificateholders, and would not otherwise

                                      31

<PAGE>

     reasonably be expected to have a Material Adverse Effect, (k) the
     interests of the Other RockGen Owner Lessors and the Other RockGen
     Indenture Trustees in the Facility, the Facility Site and the Ownership
     and Operation Agreement, (l) the interests of the Facility Lessee, the
     Other RockGen Owner Participants, the Other RockGen Owner Lessors, the
     Other RockGen Lessor Managers, the Other RockGen Indenture Trustees, and
     Pass Through Trustees under any of the Other RockGen Operative Documents,
     (m) the Ownership and Operation Agreement and (n) the interest of the
     co-owners of the Facility as tenants in common in the Facility and the
     rights of such owners under the Ownership and Operation Agreement.

     "PERSON" shall mean any individual, corporation, cooperative,
     partnership, joint venture, association, joint-stock company, limited
     liability company, other entity, trust, unincorporated organization or
     government or any agency or political subdivision thereof or any other
     entity.

     "PLAN" shall mean any pension plan as defined in Section 3(2) of ERISA,
     which is maintained or contributed to by (or to which there is an
     obligation to contribute of) the Facility Lessee or a Subsidiary of the
     Facility Lessee or an ERISA Affiliate, and each such plan for the five
     year period immediately following the latest date on which Facility
     Lessee, or a Subsidiary of Facility Lessee or an ERISA Affiliate
     maintained, contributed to or had an obligation to contribute to such
     plan.

     "POWER MARKET CONSULTANT" shall mean Pace Energy Global Services, LLC.

     "PREFERRED STOCK", as applied to the Capital Stock of any corporation,
     means Capital Stock of any class or classes (however designated) which is
     preferred as to the payment of dividends, or as to the distribution of
     assets upon any voluntary or involuntary liquidation or dissolution of
     such corporation, over shares of Capital Stock of any other class of such
     corporation.

     "PRICING ASSUMPTIONS" shall mean the "Pricing Assumptions" (attached as
     Schedule 2 to the Participation Agreement) for the Facility Lease,.

     "PRIME RATE" shall mean the rate of interest publicly announced by
     Citibank, N.A. from time to time as its prime rate.

     "PROCEEDS" shall mean the proceeds from the sale of the Certificates by
     the Pass Through Trust to the Certificateholders on the Closing Date.

     "PROPORTIONAL RENTAL AMOUNT" shall have the meaning set forth in Section
     3.2(c) of the Facility Lease.

     "PROPOSED TAX LAW CHANGE" shall mean a Tax Law Change (a) that has been
     reported out of the Senate Finance Committee of the House Ways and Means
     Committee, (b) that has been included in the issuance or amendment of a
     proposed Treasury Regulation, (c) that is part of a bill that has been
     introduced into the House of Representatives or the Senate and which has
     been publicly endorsed by the Executive Branch or the Department of
     Treasury, or (d) with respect to which a notice of a specific proposed
     change in

                                      32

<PAGE>

     administrative guidance has been issued by the Internal Revenue Service
     or the Department of Treasury and which has been published in the Federal
     Register.

     "PRUDENT INDUSTRY PRACTICE" shall mean, at a particular time, (a) any of
     the practices, methods and acts engaged in or approved by a significant
     portion of the competitive electric generating industry at such time, or
     (b) with respect to any matter to which clause (a) does not apply, any of
     the practices, methods and acts which, in the exercise of reasonable
     judgment at the time the decision was made, could have been expected to
     accomplish the desired result at a reasonable cost consistent with good
     business practices, reliability, safety and expedition. "Prudent Industry
     Practice" is not intended to be limited to the optimum practice, method
     or act to the exclusion of all others, but rather to be a spectrum of
     possible practices, methods or acts having due regard for, among other
     things, manufacturers' warranties and the requirements of any
     Governmental Entity of competent jurisdiction.

     "PUHCA" shall mean the Public Utility Holding Company Act of 1935, as
     amended.

     "PURCHASE PRICE" with respect to the Undivided Interest, shall mean
     $56,250,000.

     "QUALIFYING CASH BIDS" with respect to the Facility Lease, shall have
     the meaning specified in Section 13.2 of the Facility Lease.

     "RATING AGENCIES" shall mean S&P and Moody's.

     "REASONABLE BASIS" for a position shall exist if tax counsel may
     properly advise reporting such position on a tax return in accordance
     with Formal Opinion 85-352 issued by the Standing Committee on Ethics and
     Professional Responsibility of the American Bar Association (or any
     successor to such opinion).

     "REBUILDING CLOSING DATE" with respect to the Facility Lease, shall have
     the meaning specified in Section 10.3(e) of the Facility Lease.

     "RECEIVING PARTY" shall have the meaning set forth in Section 14.21 of
     the Participation Agreement.

     "REDEMPTION DATE" shall mean, when used with respect to any Note to be
     redeemed, the date fixed for such redemption by or pursuant to the
     Collateral Trust Indenture or the respective Note, which date shall be a
     Termination Date.

     "REFINANCING INDEBTEDNESS" means Indebtedness that refunds, refinances,
     replaces, renews, repays or extends (including pursuant to any defeasance
     or discharge mechanism) (collectively, "refinances," and "refinanced"
     shall have a correlative meaning) any Indebtedness of the Guarantor or a
     Restricted Subsidiary existing on the date of the Guaranty or Incurred in
     compliance with the Indenture, dated as of August 10, 2000, between the
     Guarantor and Wilmington Trust Company, as Trustee (including
     Indebtedness of the Guarantor that refinances Indebtedness of any
     Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that
     refinances Indebtedness of another Restricted Subsidiary) including
     Indebtedness that refinances Refinancing Indebtedness;

                                      33

<PAGE>

     provided, however, that (i) if the Indebtedness being refinanced is
     contractually subordinated in right of payment to the Obligations, the
     Refinancing Indebtedness shall be contractually subordinated in right of
     payment to such Obligations to at least the same extent as the
     Indebtedness being refinanced, (ii) the Refinancing Indebtedness is
     scheduled to mature either (a) no earlier than the Indebtedness being
     refinanced or (b) after the Stated Maturity of the Obligations, (iii) the
     Refinancing Indebtedness has an Average Life at the time such Refinancing
     Indebtedness is Incurred that is equal to or greater than the Average
     Life of the Indebtedness being refinanced and (iv) such Refinancing
     Indebtedness is in an aggregate principal amount (or if issued with
     original issue discount, an aggregate issue price) that is equal to or
     less than the aggregate principal amount (or if issued with original
     issue discount, the aggregate accreted value) then outstanding (plus fees
     and expenses, including any premium, swap breakage and defeasance costs)
     under the Indebtedness being refinanced; and provided, further, that
     Refinancing Indebtedness shall not include (x) Indebtedness of a
     Subsidiary of the Guarantor that refinances Indebtedness of the Guarantor
     or (y) Indebtedness of the Guarantor or a Restricted Subsidiary that
     refinances Indebtedness of an Unrestricted Subsidiary.

     "REGISTRAR" shall have the meaning set forth in Section 2.8 of the
     Collateral Trust Indenture.

     "REGULATORY EVENT OF LOSS" shall have meaning specified in clause (iv)
     of the definition of "Event of Loss".

     "RELATED PARTY" shall mean, with respect to any Person or its successors
     and assigns, an Affiliate of such Person or its successors and assigns
     and any director, officer, servant, employee or agent of that Person or
     any such Affiliate or their respective successors and assigns; provided
     that none of the Trust Company, the Lessor Manager or the Owner Lessor
     shall be treated as Related Parties to each other and none of the Trust
     Company, the Owner Lessor or the Lessor Manager shall be treated as a
     Related Party to any Owner Participant Equity Investor except that, for
     purposes of Section 9 of the Participation Agreement, the Owner Lessor
     will be treated as a Related Party to an Owner Participant to the extent
     that the Owner Lessor acts on the express direction or with the express
     consent of an Owner Participant.

     "RELEASE" shall mean any release, pumping, pouring, emptying, injecting,
     escaping, leaching, migrating, dumping, seepage, spill, flow, leak,
     discharge, disposal or emission.

     "RENEWAL RENT" with respect to the Facility Lease, shall mean the rent
     payable during any Renewal Lease Term, in each case as determined in
     accordance with Section 15.4 of the Facility Lease.

     "RENEWAL LEASE TERM" with respect to the Facility Lease, shall mean the
     First Renewal Lease Term, the Second Renewal Term, any FMV Renewal Lease
     Term or the Lessor Put Renewal Term.

                                      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 Sublease.

     "RENT" shall mean Basic Rent, Renewal Rent and Supplemental Rent.

     "RENT PAYMENT DATE" with respect to the Facility Lease, shall mean,
     January 18, 2002 each May 30 and November 30 occurring thereafter
     (through and including May 30, 2031) and October 18, 2031.

     "RENT PAYMENT PERIOD" with respect to the Facility Lease, shall mean (i)
     in the case of the first Rent Payment Period the period commencing on the
     Closing Date and ending on January 18, 2002 (ii) in the case of the
     second Rent Payment Period, the period commencing on January 19, 2002 and
     ending on May 30, 2002 and (iii) in all cases thereafter (except for the
     last Rent Payment Period which period shall commence on May 31, 2031 and
     end on, and include, October 18, 2031) each six-month period commencing
     on each Rent Payment Date through and including the following May 30 or
     November 30 as the case may be.

     "REPLACEMENT COMPONENT" shall have the meaning specified in Section 7.2
     of the Facility Lease.

     "REQUIRED IMPROVEMENT" with respect to the Facility Lease, shall have
     the meaning specified in Section 8.1 of the Facility Lease.

     "REQUISITION" shall have the meaning specified in clause (iii) of the
     definition of "Event of Loss".

     "RESPONSIBLE OFFICER" shall mean, with respect to any Person, (i) its
     Chairman of the Board, its President, any Senior Vice President, the
     Chief Financial Officer, any Vice President, the Treasurer or any other
     management employee (a) that has the power to take the action in question
     and has been authorized, directly or indirectly, by the Board of
     Directors or equivalent body of such Person, (b) working under the direct
     supervision of such Chairman of the Board, President, Senior Vice
     President, Chief Financial Officer, Vice President or Treasurer and (c)
     whose responsibilities include the administration of the Overall
     Transaction and (ii) with respect to the Pass Through Trustees and the
     Indenture Trustee an officer in their respective corporate trust
     departments.

     "RESTRICTED SUBSIDIARY" means any Subsidiary of the Guarantor that is
     not designated an Unrestricted Subsidiary by the Board of Directors.

     "REVENUES" shall have the meaning specified in clause (2) of the
     Granting Clause of the Collateral Trust Indenture.

                                      35

<PAGE>

     "ROCKGEN PPA" shall mean the Power Purchase Agreement dated as of August
     10, 1998 (as amended by Amendment No. 1 dated December 22, 1998 and
     Amendment No. 2 dated December 16, 1999) by and between the Buyers and
     the Facility Lessee, as the same may hereafter be further amended
     (subject to Section 5.33 of the RockGen PPA).

     "SALE/LEASEBACK TRANSACTION" means an arrangement relating to property
     now owned or hereafter acquired whereby the Guarantor or a Subsidiary
     transfers such property to a Person and leases it back from such Person,
     other than leases for a term of not more than 36 months or between the
     Guarantor and a Wholly Owned Subsidiary or between Wholly Owned
     Subsidiaries.

     "SCHEDULED CLOSING DATE" shall mean October 18, 2001.

     "SEC" shall mean the Securities and Exchange Commission.

     "SECOND RENEWAL LEASE TERM" with respect to the Facility Lease, shall
     have the meaning specified in Section 15.1(b) of the Facility Lease.

     "SECOND WINTERGREEN RENEWAL LEASE OPTION" with respect to the Facility
     Site Lease, shall have the meaning set forth in Section 2.2(a)(ii) of the
     Facility Site Lease.

     "SECTION 467 INTEREST" with respect to the Facility Lease, shall have
     the meaning set forth in Section 3.2(d) of the Facility Lease.

     "SECTION 467 LOAN" with respect to the Facility Lease, shall have the
     meaning specified in Section 3.2(d) of the Facility Lease.

     "SECURED INDEBTEDNESS" shall have the meaning specified in Section 1(b)
     of the Collateral Trust Indenture.

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

     "SEVERABLE IMPROVEMENT" shall mean any Improvement that is readily
     removable without causing material damage to the Facility.

     "SIGNIFICANT LEASE DEFAULT" shall mean, with respect to the Facility
     Lease, (i) an event that is, or solely with the passage of time or the
     giving of notice (or both) would become, a "Lease Event of Default" under
     clauses (a), (b), (c), (g), (h) or (k) of Section 16 of the Facility
     Lease, (ii) the failure of the Facility Lessee to comply in any material
     respect with its obligations under Section 6 of the Facility Lease and
     (iii) the occurrence and continuation of a Significant Lease Default
     under any Other RockGen Facility Lease.

     "SIGNIFICANT SUBSIDIARY" means any Subsidiary (other than an
     Unrestricted Subsidiary) that would be a "Significant Subsidiary" of the
     Guarantor within the meaning of Rule 1-02 under Regulation S-X
     promulgated by the SEC.

     "SITE LEASE EVENT OF DEFAULT" with respect to the Facility Site Lease,
     shall have the meaning set forth in Section 14.1 of the Facility Site
     Lease.

                                      36

<PAGE>

     "S&P" shall mean Standard & Poor's Ratings Services, a division of The
     McGraw-Hill Companies, Inc. or any successor thereto.

     "SOUTH POINT ASSIGNMENT AGREEMENTS" shall mean each of the assignment
     agreements executed and delivered pursuant to the South Point
     Participation Agreements.

     "SOUTH POINT CALPINE GUARANTIES" shall mean the Calpine guaranty and
     payment agreements executed and delivered by Calpine pursuant to the
     South Point Participation Agreements.

     "SOUTH POINT COLLATERAL TRUST INDENTURES" shall mean each of the
     collateral trust indentures executed and delivered pursuant to the South
     Point Participation Agreements.

     "SOUTH POINT FACILITY LEASES" shall mean a collective reference to each
     of the four facility lease agreements, dated as of October 18, 2001, by
     and between the applicable South Point Owner Lessor and the South Point
     Facility Lessee, pursuant to which the South Point Owner Lessor will
     lease the applicable South Point Undivided Interests to the South Point
     Facility Lessee.

     "SOUTH POINT FACILITY LESSEE" shall mean South Point Energy Center, LLC.

     "SOUTH POINT FACILITY SITE" shall have the meaning set forth in the
     recitals to the South Point Facility Site Leases.

     "SOUTH POINT FACILITY SITE LEASES" shall mean a collective reference to
     each of the four facility site leases, dated as of October 18, 2001, by
     and between the applicable South Point Owner Lessor and the South Point
     Facility Lessee, pursuant to which South Point Owner Lessor will lease
     the applicable South Point Ground Interests to the South Point Facility
     Lessee.

     "SOUTH POINT GROUND INTERESTS" shall mean the undivided leasehold
     interests in the South Point Facility Site conveyed to the South Point
     Owner Lessors under the South Point Facility Site Leases.

     "SOUTH POINT INDENTURE TRUSTEES" shall mean each of the indenture
     trustees relating to the South Point Collateral Trust Indentures.

     "SOUTH POINT LEASE TRANSACTIONS" shall mean the transactions involving
     the assignment and transfer of the South Point Undivided Interests and
     the South Point Ground Interests to the South Point Owner Lessors, and
     the simultaneous lease of the South Point Undivided Interests and the
     South Point Ground Interests to the South Point Facility Lessee on
     substantially the same terms and conditions as under, and dated the same
     date as, the South Point Overall Transaction.

     "SOUTH POINT LESSOR MANAGERS" shall mean each of the lessor managers
     acting on behalf of the South Point Owner Lessors pursuant to the South
     Point Operative Documents.

                                      37

<PAGE>

     "SOUTH POINT OWNER LESSORS" shall mean South Point OL-1, LLC South Point
     OL-2, LLC, South Point OL-3, LLC and South Point OL-4, LLC.

     "SOUTH POINT OWNER PARTICIPANTS" shall mean SBR OP-1, LLC, SBR OP-2,
     LLC, SBR OP-3, LLC and SBR OP-4, LLC.

     "SOUTH POINT OPERATIVE DOCUMENTS" shall mean the other "Operative
     Documents" for each of the South Point Lease Transactions.

     "SOUTH POINT OVERALL TRANSACTION" shall mean all of the transactions
     contemplated by the South Point Operative Documents.

     "SOUTH POINT PARTICIPATION AGREEMENTS" shall mean a collective reference
     to each of the four separate participation agreements entered into by the
     South Point Facility Lessee, the applicable South Point Owner Lessor, the
     applicable South Point Lessor Manager, the applicable South Point Owner
     Participant, the applicable South Point Indenture Trustee, the Pass
     Through Trustees and Calpine and designated Participation Agreement
     (SP-1), Participation Agreement (SP-2), Participation Agreement (SP-3)
     and Participation Agreement (SP-4), each dated as of the Closing Date,
     pursuant to which, among other things, the South Point Facility Lessee
     has agreed to (a) sell to the applicable South Point Owner Lessors
     certain undivided interests in the South Point Facility, and (b) lease
     from the applicable South Point Owner Lessors such undivided interest in
     the South Point Facility pursuant to the South Point Facility Leases.

     "SOUTH POINT UNDIVIDED INTERESTS" shall mean the undivided ownership
     interests in the South Point Facility conveyed to the South Point Owner
     Lessors under the South Point Bills of Sale.

     "SPECIAL LESSEE TRANSFER" shall have the meaning specified in Section
     13.2 of the Participation Agreement.

     "SPECIAL LESSEE TRANSFER AMOUNT" shall mean for any date, the amount
     determined as follows (but without duplication):

     (a)   (i) if the determination shall be a Termination Date, the
     Termination Value under the Facility Lease on such date, or (ii) if such
     date shall not be a Termination Date, the Termination Value under the
     Facility Lease on the immediately succeeding Termination Date; plus

     (b)   (i) any unpaid Basic Rent or Renewal Rent due before the date of
     determination plus (ii) if the determination date is a Rent Payment Date,
     the Basic Rent or Renewal Rent due on that date (to the extent payable in
     arrears); minus

     (c)   the sum of all outstanding principal, premium, if any, and accrued
     interest on the Lessor Notes, if any, on such determination date (in each
     case, if such determination date is a Rent Payment Date, before taking
     into account any Basic Rent or Renewal Rent due on such determination
     date).

                                      38

<PAGE>

     "SPECIAL LESSEE TRANSFER EVENT" shall mean the occurrence of (i) a
     Regulatory Event of Loss, (ii) a Burdensome Buyout Event under Section
     13.1 of the Facility Lease, or (iii) if the Owner Lessor has agreed to
     sell and the Facility Lessee has agreed to buy the Undivided Interest, a
     Burdensome Buyout Event under Section 13.2 of the Facility Lease.

     "STATED MATURITY" means, with respect to any security, the date
     specified in such security as the fixed date on which the principal of
     such security is due and payable, including pursuant to any mandatory
     redemption provision (but excluding any provision providing for the
     repurchase of such security at the option of the holder thereof upon the
     happening of any contingency).

     "SUBSIDIARY" shall mean, with respect to any Person (the "parent"), any
     corporation or other entity of which sufficient securities or other
     ownership interests having ordinary voting power to elect a majority of
     the board of directors or other Persons performing similar functions are
     at the time directly or indirectly owned by such parent.

     "SUPPLEMENTAL FINANCING" shall have the meaning specified in Section
     11.1 of the Participation Agreement.

     "SUPPLEMENTAL RENT" shall mean any and all amounts, liabilities and
     obligations (other than Basic Rent and Renewal Rent) which the Facility
     Lessee assumes or agrees to pay under the Operative Documents (whether or
     not identified as "Supplemental Rent") to the Owner Lessor or any other
     Person, including, without limitation, Termination Value.

     "SURVEY" shall mean a survey of the Facility Site, to be delivered after
     the Closing Date pursuant to Section 5.16 of the Participation Agreement,
     which inter alia, will show the location of the Facility Site.

     "TAX" or "TAXES" shall mean all fees (including license, documentation
     and registration fees), taxes (including, without limitation, income
     taxes, receipts, franchise, rental, turn over sales taxes, use taxes,
     stamp taxes, value-added taxes, excise taxes, ad valorem taxes and
     property taxes (personal and real, tangible and intangible)), licenses,
     exports, duties, recording charges, levies, assessments, withholdings ,
     fees, assessments and other charges and impositions of any nature, plus
     all related interest, penalties, fines and additions to tax, now or
     hereafter imposed by any federal, state, local or foreign government or
     other taxing authority.

     "TAX ADVANCE" shall have the meaning specified in Section 9.2(g)(iii)(5)
     of the Participation Agreement.

     "TAX ASSUMPTIONS" shall mean the items described in Section 1 of the Tax
     Indemnity Agreement.

     "TAX BENEFIT" shall have the meaning set forth in Section 9.2(e) of the
     Participation Agreement.

     "TAX CLAIM" shall have the meaning set forth in Section 9.2(g)(i) of the
     Participation Agreement.

                                      39

<PAGE>

     "TAX EVENT" shall mean any event or transaction that will be a taxable
     transaction to the holders of the Lessor Notes (or any Certificateholder)
     or result in an adverse change in the tax characterization of the Pass
     Through Trust.

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

     "TAX INDEMNITY AGREEMENT" shall mean the Tax Indemnity Agreement (RG-4),
     dated as of the Closing Date, between the Facility Lessee and the Owner
     Participant.

     "TAX LAW CHANGE" shall have the meaning specified in Section 12(a) of
     the Participation Agreement.

     "TAX REPRESENTATION" shall mean each of the items described in Section 4
     of the Tax Indemnity Agreement.

     "TAXES AND ASSESSMENTS" with respect to the Facility Site Lease, shall
     have, collectively, the meaning set forth in Section 18.1 of the Facility
     Site Lease.

     "TERM" with respect to the Facility Site Lease or the Facility Site
     Sublease, shall have the meaning set forth in Section 2.2(b) of the
     Facility Site Lease or Section 2.1(b) of the Facility Site Sublease.

     "TERMINATION DATE" with respect to the Facility Lease, shall mean each
     of the monthly dates during the Facility Lease Term identified as a
     "Termination Date" on Schedule 2 of the Facility Lease.

     "TERMINATION PAYMENT DATE" with respect to the Facility Lease, shall
     have the meaning specified in Section 10.2(a) of the Facility Lease.

     "TERMINATION VALUE" with respect to the Facility Lease and each
     Termination Date, shall mean the amount specified on Schedule 2 to the
     Facility Lease as the corresponding "Termination Value".

     "THIRD PARTY CONSENTS" shall mean each of the following consents, the
     form of which is attached hereto as Exhibit M: (a) Clarification Letter
     from Duke Energy Trading and Marketing, L.L.C. ("DETM") with respect to
     the Tolling Agreement, dated as of January 8, 1999 (as amended), between
     DETM and the Facility Lessee; and (b) Consent and Agreement from ANR
     Pipeline Company ("ANR") with respect to the Interconnection Agreement,
     dated as of May 28, 1999 (as amended), between ANR and the Facility
     Lessee.

     "TIA" shall mean the Trust Indenture Act of 1939.

     "TITLE COMPANY" shall mean, First American Title Insurance Company.

     "TITLE POLICY" shall mean, the title insurance policy (#0303-7538-630)
     dated as of October 18, 2001.

                                      40

<PAGE>

     "TRANSACTION COSTS" shall mean the following costs, to the extent
     substantiated or otherwise supported in reasonable detail:

     (i)   the reasonable costs of reproducing and printing the Operative
     Documents and all costs and fees, including, but not limited to, filing
     and recording fees and recording, transfer, mortgage, intangible and
     similar taxes in connection with the execution, delivery, filing and
     recording of the Facility Lease, the Facility Site Lease, and any other
     Operative Document and any other document required to be filed or
     recorded pursuant to the provisions hereof or of any other Operative
     Document and any Uniform Commercial Code filing fees in respect of the
     perfection of any security interests created by any of the Operative
     Documents or as otherwise reasonably required by the Owner Lessor or the
     Indenture Trustee and surveyor fees;

     (ii)   the reasonable fees and expenses of Dewey Ballantine LLP, counsel
     to the Owner Participant and the Owner Lessor for their services rendered
     in connection with the negotiation, execution and delivery of the
     Participation Agreement and the other Operative Documents;

     (iii)   the reasonable fees and expenses of Reinhart, Boerner Van Deuren,
     Norris & Rieselbach, S.C.,Wisconsin counsel to the Facility Lessee;

     (iv)   the reasonable fees and expenses of Thelen Reid & Priest LLP,
     counsel to the Facility Lessee and the Guarantor for their services
     rendered in connection with the negotiation, execution and delivery of
     the Participation Agreement and other Operative Documents;

     (v)   the reasonable fees and expenses of Davis Wright & Tremaine LLP,
     special regulatory counsel to the Facility Lessee;

     (vi)   the reasonable fees and expenses of Skadden, Arps, Slate, Meagher
     and Flom LLP, counsel to the Underwriter, for their services rendered in
     connection with the negotiation, execution and delivery of the
     Participation Agreement and the other Operative Documents;

     (vii)   the reasonable fees and expenses for services rendered in
     connection with the recording of the Memorandum of Lease, the Memorandum
     of Facility Site Lease and the other applicable Operative Documents;

     (viii)   the reasonable fees and expenses of Bingham Dana LLP, counsel for
     the Indenture Trustee and the Lease Indenture Company and the Pass
     Through Company and the Pass Through Trustees, for their services
     rendered in connection with the negotiation, execution and delivery of
     the Participation Agreement and the other Operative Documents;

     (ix)   the reasonable fees, expenses and disbursements of the Indenture
     Trustee and Pass Through Trustees in connection with the execution and
     delivery of the Participation Agreement and the other Operative Documents
     to which either one is or will be a party;

                                      41

<PAGE>

     (x)  the fees and expenses of the Engineering Consultant, for its
     services rendered in connection with delivering the Engineering Report
     required by Section 4.17 of the Participation Agreement;

     (xi)   the fees and expenses of the other consultants listed in Section
     4.17 of the Participation Agreement, for their respective services
     rendered in connection with delivering the reports required by such
     Section 4.17;

     (xii)   the fees and expenses of the Appraiser, for its services rendered
     in connection with delivering the Closing Appraisal required by Section
     4.15 of the Participation Agreement;

     (xiii)   the fees and expenses of the Environmental Consultant retained by
     the Owner Participant;

     (xiv)   the debt and equity arrangement fees set forth in the letter
     agreement dated July 24, 2001 between CSFB and Calpine, and its
     reasonable out-of-pocket costs and expenses payable to the Underwriter;

     (xv)   the reasonable underwriting fees, legal fees, expenses and
     disbursement of the Initial Purchasers and any discounts or commissions
     in connection with the sale of the Certificates;

     (xvi)   all reasonable costs and expenses incurred pursuant to the
     syndication and/or sale of the debt and equity;

     (xvii)   the fees and expenses of the Rating Agencies in connection with
     the rating of the Certificates;

     (xviii)   the out-of-pocket expenses of the Owner Participant, Indenture
     Trustee and the Pass Through Trustees incurred in connection with the
     Overall Transaction including cost of the title insurance and fees and
     expenses, if any, related to delivery of any non-consolidation opinions;
     and

     (xix)   the fees and expenses set forth in the letter agreement dated
     August 1, 2001 between Newcourt Capital Securities, Inc. and Calpine.

     Notwithstanding the foregoing, Transaction Costs shall not include
     internal costs and expenses such as salaries and overhead of whatsoever
     kind or nature nor costs incurred by the parties to the Participation
     Agreement pursuant to arrangements with third parties for services (other
     than those expressly referred to above), such as computer time
     procurement (other than out-of-pocket expenses of the Owner Participant),
     financial analysis and consulting, advisory services, and costs of a
     similar nature.

     "TRANSACTION PARTY" shall mean, individually or collectively, as the
     context shall require, all or any of the parties to the Operative
     Documents (including the Lease Indenture Company and the Pass Through
     Company).

                                      42

<PAGE>

     "TRANSACTIONS" shall mean, collectively, each of the transactions
     contemplated under the Participation Agreement and the other Operative
     Documents.

     "TRANSFEREE" shall mean a transferee of the Owner Participant permitted
     by Section 7.1 of the Participation Agreement.

     "TRANSFEREE GUARANTOR" shall have the meaning set forth in Section
     7.1(a)(iii) of the Participation Agreement.

     "TREASURY REGULATIONS" shall mean regulations, including temporary
     regulations, promulgated under the Code.

     "TRUST COMPANY" shall mean Wells Fargo Bank Northwest, National
     Association.

     "UNDERWRITER" shall mean CSFB.

     "UNDIVIDED INTEREST" shall mean the Owner Lessor's 25% undivided
     interest in the Facility.

     "UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if any,
     by which the value of the accumulated plan benefits under the Plan
     determined on a plan termination basis in accordance with actuarial
     assumptions at such time consistent with those prescribed by the PBGC for
     purposes of Section 4044 of ERISA, exceeds the fair market value of all
     plan assets allocable to such liabilities under Title IV of ERISA
     (excluding any accrued but unpaid contributions).

     "UNIFORM COMMERCIAL CODE" or "UCC" shall mean the Uniform Commercial
     Code as in effect in the applicable jurisdiction.

     "UNITED STATES PERSON" shall have the meaning specified in Section
     7701(a)(30) of the Code or any successor provision thereto.

     "UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary that at the time of
     determination shall be designated an Unrestricted Subsidiary by the Board
     of Directors in the manner provided by the Indenture, dated as of August
     10, 2000, between the Guarantor and Wilmington Trust Company, as Trustee
     and (ii) any Subsidiary of an Unrestricted Subsidiary.

     "VERIFIER" shall have the meaning specified in Section 3.4(c) of the
     Facility Lease.

     "WHOLLY OWNED SUBSIDIARY" means a Subsidiary (other than an Unrestricted
     Subsidiary) all the Capital Stock of which (other than directors'
     qualifying shares) is owned by the Guarantor or another Wholly Owned
     Subsidiary.

                                      43<PAGE>
                                                                 Exhibit 4.22.15

RECORDING REQUESTED BY AND
WHEN RECORDED, RETURN TO:

SARAH M. WARD, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM, LLP
FOUR TIMES SQUARE
NEW YORK, NEW YORK  10036

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

                       INDENTURE OF TRUST, DEED OF TRUST,
                        ASSIGNMENT OF RENTS AND LEASES,
                   SECURITY AGREEMENT AND FINANCING STATEMENT

                          Dated as of October 18, 2001

                                    between

                              SOUTH POINT OL-1, LLC

                                      and

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

                    _________________________________________

                              SOUTH POINT FACILITY

===============================================================================
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                      Page

<S>                                                                                   <C>
SECTION 1.   DEFINITIONS............................................................. 10

SECTION 2.   THE LESSOR NOTES........................................................ 11
     Section 2.1.   Limitation on Lessor Notes....................................... 11
     Section 2.2.   Initial Lessor Notes............................................. 11
     Section 2.3.   Execution and Authentication of Lessor Notes..................... 12
     Section 2.4.   Issuance and Terms of the Initial Lessor Notes................... 12
     Section 2.5.   Payments from Indenture Estate Only; No Personal Liability of
                    the Owner Lessor, the Owner Participant or the Indenture
                    Trustee.......................................................... 13
     Section 2.6.   Method of Payment................................................ 14
     Section 2.7.   Application of Payments.......................................... 15
     Section 2.8.   Registration, Transfer and Exchange of Lessor Notes.............. 16
     Section 2.9.   Mutilated, Destroyed, Lost or Stolen Lessor Notes................ 17
     Section 2.10.  Redemptions; Assumption.......................................... 17
     Section 2.11.  Payment of Expenses on Transfer.................................. 22
     Section 2.12.  Additional Lessor Notes.......................................... 23
     Section 2.13.  Restrictions of Transfer Resulting from Federal Securities
                    Laws; Legend..................................................... 26
     Section 2.14.  Security for and Parity of Lessor Notes.......................... 26
     Section 2.15.  Acceptance of the Indenture Trustee.............................. 26

SECTION 3.   RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM INDENTURE ESTATE... 27
     Section 3.1.   Distribution of Periodic Rent.................................... 27
     Section 3.2.   Payments Following Event of Loss or Other Early Termination...... 29
     Section 3.3.   Payments After Lease Indenture Event of Default.................. 30
     Section 3.4.   Investment of Certain Payments Held by the Indenture Trustee..... 31
     Section 3.5.   Application of Certain Other Payments............................ 31
     Section 3.6.   Other Payments................................................... 32
     Section 3.7.   Excepted Payments................................................ 32
     Section 3.8.   Distributions to the Owner Lessor................................ 33
     Section 3.9.   Payments Under Assigned Documents................................ 33
     Section 3.10.  Disbursement of Amounts Received by the Indenture Trustee........ 33
</TABLE>

                                       i
<PAGE>
<TABLE>
<CAPTION>

<S>                                                                                   <C>
SECTION 4.   COVENANTS OF OWNER LESSOR; DEFAULTS; REMEDIES OF
             INDENTURE TRUSTEE....................................................... 37
     Section 4.1.   Covenants of Owner Lessor........................................ 37
     Section 4.2.   Lease Indenture Events of Default................................ 38
     Section 4.3.   Remedies of the Indenture Trustee................................ 40
     Section 4.4.   Right to Cure Certain Lease Events of Default.................... 43
     Section 4.5.   Rescission of Acceleration....................................... 46
     Section 4.6.   Return of Indenture Estate, Etc.................................. 47
     Section 4.7.   Power of Sale and Other Remedies................................. 48
     Section 4.8.   Appointment of Receiver.......................................... 50
     Section 4.9.   Remedies Cumulative.............................................. 51
     Section 4.10.  Waiver of Various Rights by the Owner Lessor..................... 51
     Section 4.11.  Discontinuance of Proceedings.................................... 52
     Section 4.12.  No Action Contrary to the Facility Lessee's Rights Under the
                    Facility Lease................................................... 52
     Section 4.13.  Right of the Indenture Trustee to Perform Covenants, Etc......... 53
     Section 4.14.  Further Assurances............................................... 53
     Section 4.15.  Waiver of Past Defaults.......................................... 53

SECTION 5.   DUTIES OF INDENTURE TRUSTEE; CERTAIN RIGHTS AND
             DUTIES OF OWNER LESSOR.................................................. 54
     Section 5.1.   Notice of Action Upon Lease Indenture Event of Default........... 54
     Section 5.2.   Actions Upon Instructions Generally.............................. 54
     Section 5.3.   Action Upon Payment of Lessor Notes or Termination of
                    Facility Lease................................................... 55
     Section 5.4.   Compensation of the Indenture Trustee; Indemnification........... 55
     Section 5.5.   No Duties Except as Specified; No Action Except Under
                    Facility Lease, Indenture or Instructions........................ 55
     Section 5.6.   Certain Rights of the Owner Lessor............................... 56
     Section 5.7.   Restrictions on Dealing with Indenture Estate.................... 59
     Section 5.8.   Filing of Financing Statements and Continuation Statements....... 59

SECTION 6.   INDENTURE TRUSTEE AND OWNER LESSOR...................................... 60
     Section 6.1.   Acceptance of Trusts and Duties.................................. 60
     Section 6.2.   Absence of Certain Duties........................................ 62
     Section 6.3.   Representations and Warranties................................... 63
     Section 6.4.   No Segregation of Moneys; No Interest............................ 63
     Section 6.5.   Reliance; Agents; Advice of Experts.............................. 64
</TABLE>

                                      ii
<PAGE>
<TABLE>
<CAPTION>

<S>                                                                                   <C>

SECTION 7.   SUCCESSOR INDENTURE TRUSTEES AND SEPARATE
             TRUSTEES................................................................ 65
     Section 7.1.   Resignation or Removal of the Indenture Trustee; Appoin-
                    tment of Successor............................................... 65
     Section 7.2.   Appointment of Additional and Separate Trustees.................. 67

SECTION 8.   SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
             AND OTHER DOCUMENTS..................................................... 69
     Section 8.1.   Supplemental Indenture and Other Amendment With Consent;
                    Conditions and Limitations....................................... 69
     Section 8.2.   Supplemental Indentures and other Amendments Without
                    Consent.......................................................... 70
     Section 8.3.   Conditions to Action by the Indenture Trustee.................... 72

SECTION 9.   MISCELLANEOUS........................................................... 72
     Section 9.1.   Surrender, Defeasance and Release................................ 72
     Section 9.2.   Conveyances Pursuant to the Site Lease........................... 73
     Section 9.3.   Appointment of the Indenture Trustee as Attorney; Further
                    Assurances....................................................... 73
     Section 9.4.   Indenture for Benefit of Certain Persons Only.................... 73
     Section 9.5.   Notices; Furnishing Documents, etc............................... 74
     Section 9.6.   Severability..................................................... 76
     Section 9.7.   Limitation of Liability.......................................... 76
     Section 9.8.   Written Changes Only............................................. 76
     Section 9.9.   Counterparts..................................................... 76
     Section 9.10.  Successors and Permitted Assigns................................. 77
     Section 9.11.  Headings and Table of Contents................................... 77
     Section 9.12.  Governing Law.................................................... 77
     Section 9.13.  Reorganization Proceedings with Respect to the Lessor Estate..... 77
     Section 9.14.  Withholding Taxes: Information Reporting......................... 78
     Section 9.15.  Fixture Financing Statement...................................... 80
</TABLE>

                                       iii
<PAGE>
EXHIBITS

Exhibit A            Description of Facility Site
Exhibit B            Form of Lessor Note
Exhibit C            Form of Certificate of Authentication
Exhibit D            Description of the Facility

APPENDIX A Definitions

                                      iv
<PAGE>
INDENTURE OF TRUST, DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES, SECURITY
AGREEMENT AND FINANCING STATEMENT

     This INDENTURE OF TRUST, DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES,
SECURITY AGREEMENT AND FINANCING STATEMENT (as amended, supplemented or
otherwise modified from time to time in accordance with the provisions hereof,
this "Indenture"), dated as of October 18, 2001, between SOUTH POINT OL-1, LLC,
a Delaware limited liability company created for the benefit of the Owner
Participant referred to below, as trustor (as such term is defined in Arizona
Revised Statutes, Section 33-801, et seq.) (the "Owner Lessor"), having an
address as set forth in Section 9.5 of this Indenture, STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION as beneficiary and trustee
(as such term is defined in Arizona Revised Statutes, Section 33-801, et seq.)
on behalf of the Noteholders (the "Indenture Trustee") and as the Account Bank,
having an address as set forth in Section 9.5 of this Indenture.

                                  WITNESSETH:

     WHEREAS, Calpine Construction Finance Company ("CCFC") has assigned the
Undivided Interest and the Ground Interest to the Owner Lessor pursuant to the
certain Assignment Agreement, a memorandum of which shall be recorded with this
Indenture in the appropriate registry of land records described in Exhibit A
attached hereto;

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

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

                                       1
<PAGE>
     WHEREAS, the Facility is more particularly described on Exhibit D
hereto and made a part hereof and the Facility Site is more particularly
described on Exhibit A hereto and made a part hereof;

     WHEREAS, in accordance with this Indenture, the Owner Lessor will (i)
execute and deliver the Lessor Notes, the proceeds of which will be used by the
Owner Lessor to finance a portion of the Assumption Price for the Undivided
Interest assumed from CCFC and (ii) grant to the Indenture Trustee the security
interests herein provided;

     WHEREAS, this Indenture is regarded as and shall constitute a deed of
trust under the laws of the State of Arizona, as an absolute and current
assignment of rents, leases, income, issues, royalties and profits pursuant to
the laws of the State of Arizona including, among other provisions, Arizona
Revised Statutes ("A.R.S.") Section(s) ("ss.") 33-702.B, 33-807(C) and 12-241,
et seq. as a security agreement and grant by the Owner Lessor, as debtor, to and
in favor of the Indenture Trustee, as the Secured Party, of a security interest
in the Indenture Estate (as such term is hereinafter defined) under the Uniform
Commercial Code as enacted and in effect from time to time in the State of
Arizona and under the Uniform Commercial Code as enacted and in effect from time
to time in the States of New York and Delaware, and as a fixture filing and a
financing statement under the laws of the Uniform Commercial Code as enacted and
in effect in the State of Arizona from time to time;

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

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

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

                                       2
<PAGE>
     NOW THEREFORE, in consideration of the foregoing premises, the mutual
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and in order to secure
(i) the prompt payment when and as due of the principal of and the Make-Whole
Amount, if any, and interest on the Lessor Notes and of all other amounts owing
with respect to all Lessor Notes from time to time outstanding hereunder, and
the prompt payment when and as due of any and all other amounts from time to
time owing in respect of the Secured Indebtedness and (ii) the performance and
observance by the Owner Lessor for the benefit of the holders of the Lessor
Notes and the Indenture Trustee of all other obligations, agreements, and
covenants of the Owner Lessor set forth hereinafter and in the Lessor Notes, the
Operative Documents and the other documents, certificates and agreements
delivered in connection therewith:

                            GRANTING CLAUSE:

     The Owner Lessor hereby irrevocably grants, conveys, assigns,
transfers, pledges, bargains, sells and confirms unto the Indenture Trustee as
trustee under ARS [sec] 33-801, et seq., in trust, with power of sale, for the
benefit of the holders of the Lessor Notes from time to time, a first priority
security interest in and deed of trust lien on all estate, right, title and
interest of the Owner Lessor in, to and under the following described real and
personal property, rights, interests and privileges, whether now held or
hereafter acquired and all easements, rights of way, access agreements,
leasehold interests, leasehold and other estates, ground leases, hereditaments
and other rights now or hereafter existing, covering all or part thereof, or
appurtenant or attaching thereto, together with all structures, buildings and
other improvements now or hereafter upon, constructed upon or located in whole
or in part upon the same; together with all fixtures, machinery, and all
articles and items of property now or hereafter attached to, or used or adapted
for use in the operation, maintenance or use thereof; together with all rents,
issues, royalties, income and profits thereof under present and future leases,
occupancy and use agreements (which collectively, including all property
hereafter specifically subjected to the security interest created by this
Indenture by any supplement hereto, exclusive of Excepted Payments) are included
within, and are hereafter referred to as, the "Indenture Estate"):

     (1)   the Undivided Interest, the Owner Lessor's interest in any
Components; the Owner Lessor's interest in any Improvements; the Ground
Interest; the Facility Lease and all payments of any kind by the Facility Lessee
thereunder (including Rent); any rights of the Owner Lessor as assignee of the
Facility Lessee under the Facility Lease; the Facility Site Lease and all
payments of any kind by the Facility Lessee thereunder; the Assignment Agreement
(and all rights with respect to the Ground Lease conveyed

                                       3
<PAGE>
thereby); the Owner Lessor's interest in all tangible property located on or at
or attached to the Facility Site as to which an interest in such tangible
property arises under applicable real estate law ("fixtures"); the Calpine
Guaranty, the South Point Ground Lease, the Ownership and Operation Agreement
and all and any interest in any property now or hereafter granted to the Owner
Lessor pursuant to any provision of the Facility Lease; and each other
Operative Document to which the Owner Lessor is a party other than the Tax
Indemnity Agreement and the LLC Agreement (the Undivided Interest, the Owner
Lessor's interest in any Components, the Owner Lessor's interest in any
fixtures, Improvements and the Ground Interest are collectively referred to as
the "Property Interest" and the documents specifically referred to above in
this paragraph (1) are collectively referred to as the "Assigned Documents"),
including, without limitation, (x) all rights of the Owner Lessor to receive
any payments or other amounts or, subject to Section 5.6 hereof, to exercise
any election or option or to make any decision or determination or to give or
receive any notice, consent, waiver or approval or to make any demand or to
take any other action under or in respect of any such document, to accept
surrender or redelivery of the Property Interest or any part thereof, as well
as all the rights, powers and remedies on the part of the Owner Lessor, whether
acting under any such document or by statute or at law or in equity or
otherwise, arising out of any Lease Default or Lease Event of Default and (y)
any right to restitution from the Facility Lessee, any sublessee or any other
person in respect of any determination of invalidity of any such document;

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

     (3)   any sublease of the Facility and any assignment thereof now or
hereafter in effect, including, without limitation, (i) all rents or other
amounts or payments of any kind paid or payable by the obligor(s) thereunder or
in respect thereof and all collateral security or credit support with respect
thereto (whether cash or in the nature of a guarantee, letter of credit, credit
insurance, lien on or security interest in property or otherwise) for the
obligations of the sublessee thereunder as well as all rights of the Owner
Lessor to enforce payment of any such rents, amounts or payments, (ii) all
rights of the Owner Lessor to exercise any election or option or to make any
decision or determination or to give or receive any notice, consent, waiver or
approval or to take any other action under or in respect of any sublease of the
Facility and any assignment thereof

                                       4
<PAGE>
or to accept surrender or redelivery of the Facility or any part thereof, as
well as all the rights, powers and remedies on the part of the Owner Lessor,
whether acting under any sublease of the Facility or any assignment thereof or
by statute or at law or in equity, or otherwise, arising out of any default
under such sublease or any assignment thereof, and (iii) any right to
restitution from the Facility Lessee, the applicable sublessee or any guarantor
of such sublessee in respect of any determination of invalidity of any sublease
of the Facility or any assignment thereof;

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

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

     (6)   all of Owner Lessor's right, title and interest conveyed to the
Indenture Trustee in and relating to the following :

          (i)   The real property that is described in and made subject to
     this Indenture (the "Real Property") the fee simple owner of which is
     the United States of America, in trust for the Fort Mojave Indian Tribe
     ("Owner"), as evidenced by patent of record in Mohave County, Arizona
     which is on file with the United States Department of Interior, Bureau
     of Indian Affairs, Albuquerque, New Mexico Regional Office (the "BIA");
     and

          (ii)   The leasehold estate interest in the Real Property which was
     created pursuant to the terms and conditions of that certain Amended and
     Restated Ground Lease Agreement, being BIA Lease No. B-1778-FM, approved as
     of August 19, 1999, by and between Owner and Calpine South Point, LLC, a
     Delaware limited liability company, as Lessee, and Fort Mojave Indian
     Tribe, a federally recognized Indian Tribe, as Lessor, a memorandum of
     which Ground Lease, as amended, was recorded on October 29, 1999 in Book
     3399 of Official Records, page 822, Records of Mohave County, Arizona and
     filed in the Land Titles and Records Office as document number 604-050-99
     and certificate of merger filed in the Land Titles and Records Office as
     document number 604-056-99 (collectively the "Ground Lease"). The Lessee's
     interests in and to the Ground Lease have been duly, properly and
     effectively assigned to the Owner Lessor, pursuant to that certain
     Assignment Agreement, dated as of the date

                                       5
<PAGE>
     hereof, which shall have been recorded in the records of Mohave County,
     Arizona and filed with the BIA; and

     (7)   all proceeds of the foregoing;

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

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

     TO HAVE AND TO HOLD to said Indenture Trustee, as Trustee under A.R.S.
Section 33-801, et seq., its successors, heirs or assigns, the Indenture Estate
and all of the Owner Lessor's interests therein, including, without limitation,
the leasehold interest pursuant to the South Point Ground Lease;

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

     Subject to the terms and conditions hereof, the Owner Lessor does
hereby irrevocably constitute and appoint the Indenture Trustee the true and
lawful attorney of the Owner Lessor (which appointment is coupled with an
interest) with full power (in the name of the Owner Lessor or otherwise) to ask,
require, demand and receive any and all moneys and claims for moneys (in each
case, including, without limitation, insurance and requisition proceeds to the
extent of the Owner Lessor's interest therein but excluding in all cases
Excepted Payments) due and to become due under or arising out of the Assigned
Documents and all other property which now or hereafter constitutes part of the
Indenture Estate and, to endorse any checks or other instruments or orders in
connection therewith and to file any claims or to take any action or to
institute any proceedings (other than in connection with the enforcement or
collection of Excepted Payments) which the Indenture Trustee may deem to be
necessary or advisable. Pursuant to the Facility Lease, the Facility Lessee is
directed to make all payments of Rent required to be paid or deposited with the
Owner Lessor (other than Excepted Payments) and all other amounts which are
required to be paid

                                       6
<PAGE>
to or deposited with the Owner Lessor pursuant to the Facility Lease (other
than Excepted Payments) directly to the Indenture Trustee at such address or
addresses as the Indenture Trustee shall specify, for application as provided
in this Indenture. Further, the Owner Lessor agrees that promptly on receipt
thereof, it will transfer to the Indenture Trustee any and all moneys from time
to time received by it constituting part of the Indenture Estate, whether or
not expressly referred to in the immediately preceding sentence, for
distribution pursuant to this Indenture.

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

     This Indenture is intended to and does hereby constitute and create a
security agreement as required under the Uniform Commercial Codes from time to
time enacted and effective under the laws of the States of New York, Delaware
and Arizona. Pursuant to such security agreement, Owner Lessor does hereby grant
to Indenture Trustee a security interest in all that portion of the Indenture
Estate that is now or shall or may be or become personal property and/or
fixtures and in or with respect to which a security interest may be granted
(collectively the "Personal Property") pursuant to the Uniform Commercial Code
as enacted and effective from time to time in all and each of the States of New
York, Delaware and Arizona. Such security interest shall be and is a first and
prior security interest in all such Personal Property and Indenture Trustee, its
successors and assigns, shall have and enjoy all rights, remedies and benefits
available to a secured party under the said Uniform Commercial Code as enacted
and effective from time to time in the aforementioned States, with respect to
the Indenture Estate.

     The Indenture Trustee, for itself and its successors and permitted
assigns, hereby agrees that it shall hold the Indenture Estate, in trust for the
benefit and security of (i) the holders from time to time of the Lessor Notes
from time to time outstanding, without any priority of any one Lessor Note over
any other except as herein otherwise expressly provided and (ii) the Indenture
Trustee, and for the uses and purposes and subject to the terms and provisions
set forth in this Indenture. It is expressly agreed that anything herein
contained to the contrary notwithstanding, the

                                       7
<PAGE>
Owner Lessor shall remain liable under the Assigned Documents to perform all of
the obligations assumed by it thereunder, all in accordance with and pursuant
to the terms and provisions thereof, and the Indenture Trustee and the
Noteholders shall have no obligation or liability under any Assigned Document
by reason of or arising out of the assignment hereunder, nor shall the
Indenture Trustee or the Noteholders be required or obligated in any manner,
except as herein expressly provided, to perform or fulfill any obligation of
the Owner Lessor under or pursuant to any such Assigned Document or, except as
herein expressly provided, to make any payment, or to make any inquiry as to
the nature or sufficiency of any payment received by it, or to present or file
any claim, or to take any action to collect or enforce the payment of any
amounts which may have been assigned to it or to which it may be entitled at
any time or times.

     The Owner Lessor does hereby warrant and represent that it has not
assigned, pledged, granted or permitted a lien, mortgage or deed of trust or
security interest in, to or under, and hereby covenants that, so long as this
Indenture shall remain in effect and the Lien hereof shall not have been
released pursuant to Section 9.1 hereof, it will not assign, pledge or grant a
lien or security interest in any of its estate, right, title or interest in, to
or under, the Indenture Estate to anyone other than the Indenture Trustee for
the benefit of the Noteholders. The Owner Lessor hereby further covenants that
with respect to its estate, right, title and interest in, to or under the
Indenture Estate, it will not, except as provided in this Indenture and except
as to Excepted Payments, (i) accept any payment from the Facility Lessee or any
sublessee or enter into any agreement amending, modifying or supplementing any
of the Assigned Documents, execute any waiver or modification of, or consent
under (other than pursuant to Section 4.2 of the South Point Ground Lease or
Sections 5.20 or 13.3 of the Participation Agreement (subject to the conditions
set forth in Sections 5.20 or 13.3, as applicable, of the Participation
Agreement)), the terms of any of the Assigned Documents or revoke or terminate
any of the Assigned Documents, (ii) settle or compromise any claim arising under
any of the Assigned Documents, or (iii) submit or consent to the submission of
any dispute, difference or other matter arising under or in respect of any of
the Assigned Documents to arbitration thereunder (except with respect to any
action pursuant to Section 4.2 of the South Point Ground Lease or Sections 5.20
or 13.3 of the Participation Agreement (subject to the conditions set forth in
Sections 5.20 or 13.3, as applicable, of the Participation Agreement)).

     Except as provided herein, the Owner Lessor hereby ratifies and
confirms its obligations under the Assigned Documents and does hereby agree that
it will not take or omit to take any action, the taking or omission of which
might result in an alteration or impairment of any of the Assigned Documents or
of any of the rights created

                                       8
<PAGE>
by any such Assigned Document or the assignment (subject to the previous)
paragraph hereunder.

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

     THIS INDENTURE AND CONVEYANCE IS MADE IN TRUST, however, with POWER OF
SALE for the benefit of the Indenture Trustee to secure the payment of the
Secured Indebtedness.

     This Indenture and conveyance is also made in trust to further secure:

     (a)   Payment and performance of the obligations, covenants and agreements
contained in the Lessor Notes and other documents and/or instruments referred
to, defined or described in the definition of Secured Indebtedness and any and
all modifications, extensions or renewals of any such documents or instruments;

     (b)   Payment and performance of the obligations, covenants and agreements
contained in that certain Participation Agreement, the terms and conditions of
which are incorporated herein by this reference; and

     (c)   Payment of all other sums becoming due or payable under, and the
performance of all other obligations, covenants and agreements contained in (i)
the Lessor Notes; (ii) any Additional Lessor Notes; (iii) any and all Assignment
Documents and Assumption Documents; and (iv) any other instrument given as
security for the Secured Indebtedness or entered into with respect to this
Indenture, including without limitation, the Participation Agreement and all
other documents and instruments (all the foregoing documents and instruments
being collectively referred to herein as the "Collateral Documents").

                               SECTION 1.
                              DEFINITIONS

                                       9
<PAGE>
     (a)   Unless the context hereof shall otherwise require, capitalized
terms used, including those in the recitals, and not otherwise defined herein
shall have the respective meanings set forth in Appendix A to the Participation
Agreement (a copy of which is attached hereto for reference), dated as of the
date hereof, among the Facility Lessee, the Owner Lessor the Lessor Manager, the
Guarantor, the Indenture Trustee and the Pass Through Trustee (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions thereof, the "Participation Agreement"). The general provisions of
such Appendix A to the Participation Agreement shall apply to the terms used in
this Indenture and specifically defined herein.

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

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

     "Facility" means the 530 MW nameplate capacity gas-fired combined cycle
merchant power plant located near Bullhead, Arizona and more fully described in
Exhibit D to this Indenture. The Facility does not include the Facility Site.

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

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

          (ii)   Any and all other indebtedness now owing or which may
     hereafter be owing by the Owner Lessor to or for the benefit of the
     Indenture Trustee under the Operative Documents including indemnities
     and other Supplemental Rent payable by the Facility Lessee under the
     Operative Documents, whether evidenced by Additional Lessor Notes
     issued pursuant to Section 2.12 hereof or otherwise, however and
     whenever incurred or evidenced, whether direct or indirect, absolute or
     contingent, due or to become due, together with interest thereon at the
     rate provided in each Additional

                                      10
<PAGE>
Lessor Note and the Make-Whole Amount thereon (if any) and together with any
and all renewals, modifications, consolidations and extensions of the
indebtedness evidenced by such Additional Lessor Notes, and principal of such
Additional Lessor Notes being due and payable as provided in each such
Additional Lessor Note.

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

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

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

                               SECTION 2.
                            THE LESSOR NOTES

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

     Section 2.2.   Initial Lessor Notes. There are hereby created and
established hereunder two series of Lessor Notes consisting of the Series A
Lessor Notes and the Series B Lessor Notes, each in substantially the form set
forth in Exhibit B to this Indenture and each such series in the aggregate
principal amount, having installments payable on the dates and in the amounts
and having the final maturity date and interest rate set forth in Schedule I to
this Indenture (respectively, the "Series A Lessor Notes" and the "Series B
Lessor Notes", collectively, the "Initial Lessor Notes"

                                      11
<PAGE>
or, individually, an "Initial Lessor Note".

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

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

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

     (b)   Principal and Interest. The principal amount of each series of
Initial Lessor Notes shall be due and payable in a series of installments having
final payment dates set forth in Schedule I hereto. The principal of each
Initial Lessor Note shall be due and payable in installments on the dates and in
the amounts set forth in Schedule I hereto. Schedule I hereto to the contrary
notwithstanding, the last payment made under such Initial Lessor Note shall be
equal to the then unpaid balance of the principal of such Lessor Note plus all
accrued and unpaid interest on, and any other amounts due under, such Initial
Lessor Note. Each Initial Lessor Note shall bear interest on the principal from
time to time outstanding from and including the date of

                                      12
<PAGE>
issuance thereof (computed on the basis of a 360-day year of twelve 30-day
months) until paid in full at the rate set forth in such Initial Lessor Note
and Schedule I hereto.  Each Initial Lessor Note shall accrue additional
interest under the circumstances and at the rate per annum set forth in the
third paragraph of each Initial Lessor Note. Interest on each Initial Lessor
Note shall be due and payable in arrears semi-annually commencing on May 30,
2002, and on each May 30 and November 30 thereafter until paid in full. If any
day on which principal, Make-Whole Amount, if any, or interest on the Initial
Lessor Notes are payable is not a Business Day, payment thereof shall be made
on the next succeeding Business Day with the same effect as if made on the date
on which such payment was due.

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

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

     Section 2.5.   Payments from Indenture Estate Only; No Personal Liability
of the Owner Lessor, the Owner Participant or the Indenture Trustee. Except as
otherwise specifically provided in this Indenture or the Participation
Agreement, all payments in respect of the Lessor Notes or under this Indenture
shall be made only from the Indenture Estate, and the Owner Lessor shall have no
obligation for the payment thereof except to the extent that there shall be
sufficient income or proceeds from the Indenture Estate to make such payments in
accordance with the terms of Section 3 hereof; and the Owner Participant shall
not have any obligation for payments in respect of the Lessor Notes or under
this Indenture. The Indenture Trustee and each Noteholder, by its acceptance
thereof, agrees that it will look solely to the income and proceeds from the
Indenture Estate to the extent available for distribution to the Indenture
Trustee or such Noteholder, as the case may be, as herein provided and that,
except as expressly provided in this Indenture, the Participation Agreement or
any other Operative Document, none of the Owner Participant, the Owner Lessor,
the Trust Company, the Lease Indenture Company, nor the Indenture Trustee, nor
any Affiliate of any thereof, shall be personally liable to such Noteholder or
the Indenture Trustee for any amounts payable hereunder, under such Lessor Note
or for any performance to be rendered under any Assigned Document or for any
liability under

                                      13
<PAGE>
any Assigned Document. Without prejudice to the foregoing, the Owner Lessor
will duly and punctually pay or cause to be paid the principal of, Make-Whole
Amount, if any, and interest on all Lessor Notes according to their terms and
the terms of this Indenture. Nothing contained in this Section 2.5 limiting the
liability of the Owner Lessor shall derogate from the right of the Indenture
Trustee and the Noteholders to proceed against the Indenture Estate and the
Calpine Guaranty to secure and enforce all payments and obligations due
hereunder and under the Assigned Documents and the Lessor Notes.

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

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

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

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

     (b)   The principal of and the Make-Whole Amount, if any, and interest on
each Lessor Note shall be paid by the Paying Agent from amounts available in the
Indenture Estate on the dates provided in the Lessor Notes by mailing a check
for such amount, payable in New York Clearing House funds, to each Noteholder at
the last address of each such Noteholder appearing on the Note Register, or by
whichever of the following methods shall be specified by notice from a
Noteholder to the Indenture Trustee: (i) by crediting the amount to be
distributed to such Noteholder to

                                      14
<PAGE>
an account maintained by such Noteholder with the Indenture Trustee, (ii) by
making such payment to such Noteholder in immediately available funds at the
Indenture Trustee Office, or (iii) in the case of the Initial Lessor Notes and
in the case of Additional Lessor Notes, if such Noteholder is the Pass Through
Trustee, or a bank or other institutional investor, by transferring such amount
in immediately available funds for the account of such Noteholder to the
banking institution having bank wire transfer facilities as shall be specified
by such Noteholder, such transfer to be subject to telephonic confirmation of
payment. Any payment made under any of the foregoing methods shall be made free
and clear of and without reduction for or on account of all wire and like
charges and without any presentment or surrender of such Lessor Note, unless
otherwise specified by the terms of the Lessor Note, except that, in the case
of the final payment in respect of any Lessor Note, such Lessor Note shall be
surrendered to the Indenture Trustee for cancellation after such payment. All
payments in respect of the Lessor Notes shall be made (1) as soon as
practicable prior to the close of business on the date the amounts to be
distributed by the Indenture Trustee are actually received by the Indenture
Trustee if such amounts are received by 12:00 noon New York City time, on a
Business Day, or (2) on the next succeeding Business Day if received after such
time or on any day other than a Business Day. One or more of the foregoing
methods of payment may be specified in a Lessor Note. Prior to due presentment
for registration of transfer of any Lessor Note, the Owner Lessor and the
Indenture Trustee may deem and treat the Person in whose name any Lessor Note
is registered on the Note Register as the absolute owner and holder of such
Lessor Note for the purpose of receiving payment of all amounts payable with
respect to such Lessor Note and for all other purposes, and neither the Owner
Lessor nor the Indenture Trustee shall be affected by any notice to the
contrary. All payments made on any Lessor Note in accordance with the
provisions of this Section 2.6 shall be valid and effective to satisfy and
discharge the liability on such Lessor Note to the extent of the sums so paid
and (except as provided herein) neither the Indenture Trustee nor the Owner
Lessor shall have any liability in respect of such payment.

     Section 2.7.   Application of Payments. Each payment on any outstanding
Lessor Note shall be applied as required under Arizona law; and thereafter in
the following order: first, to the payment of accrued interest (including
interest on overdue principal and the Make-Whole Amount, if any, and, to the
extent permitted by Applicable Law, overdue interest) on such Lessor Note to the
date of such payment, second, to the payment of the principal amount of, and the
Make-Whole Amount, if any, on such Lessor Note then due (including any overdue
installments of principal) thereunder and third, to the extent permitted by
Section 2.10 of this Indenture, the balance, if any, remaining thereafter, to
the payment of the principal amount of, and the Make-Whole Amount, if any, on
such Lessor Note. The order of

                                      15
<PAGE>
application of payments prescribed by this Section 2.7 shall not be deemed to
supersede any provision of Section 3 hereof regarding application of funds.

     Section 2.8.   Registration, Transfer and Exchange of Lessor Notes. The
Owner Lessor shall maintain an office or agency where Lessor Notes may be
presented for registration of transfer or for exchange (the "Registrar"). The
Registrar shall keep a register of the Lessor Notes and of their transfer and
exchange. The Owner Lessor may have one or more co-registrars. The Owner Lessor
initially appoints the Indenture Trustee as Registrar in connection with the
Lessor Notes. The Indenture Trustee shall maintain at the Indenture Trustee
Office a register in which it will provide for the registration, registration of
transfer and exchange of Lessor Notes (such register being referred to herein as
the "Note Register"). If any Lessor Note is surrendered at said office for
registration of transfer or exchange (accompanied by a written instrument of
transfer duly executed by or on behalf of the holder thereof, together with the
amount of any applicable transfer taxes), the Owner Lessor will execute and the
Indenture Trustee will authenticate and deliver, in the name of the designated
transferee or transferees, if any, one or more new Lessor Notes (subject to the
limitations specified in Sections 2.3 and 2.13 hereof) in any denomination or
denominations not prohibited by this Indenture, as requested by the Person
surrendering the Lessor Note, dated the same date as the Lessor Note so
surrendered and of like tenor and aggregate unpaid principal amount. Any Lessor
Note or Lessor Notes issued in a registration of transfer or exchange shall be
valid obligations of the Owner Lessor entitled to the same security and benefits
to which the Lessor Note or Lessor Notes so transferred or exchanged were
entitled, including rights as to interest accrued but unpaid and to accrue so
that there will not be any loss or gain of interest on the Lessor Note or Lessor
Notes surrendered. Every Lessor Note presented or surrendered for registration
of transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form reasonably satisfactory to the Indenture Trustee
duly executed by the holder thereof or his attorney duly authorized in writing,
and the Indenture Trustee may require an opinion of counsel as to compliance of
any such transfer with the Securities Act. The Indenture Trustee shall make a
notation on each new Lessor Note of the amount of all payments of principal
previously made on the old Lessor Note or Lessor Notes with respect to which
such new Lessor Note is issued and the date on which such new Lessor Note is
issued and the date to which interest on such old Lessor Note or Lessor Notes
shall have been paid. The Indenture Trustee shall not be required to register
the transfer or exchange of any Lessor Note during the 10 days preceding the due
date of any payment on such Lessor Note.

     Each Noteholder, by its acceptance of a Lessor Note, shall be deemed to
have

                                      16
<PAGE>
consented to, and agreed to be bound by, the terms and conditions hereof, of
such Lessor Note (and any instrument of assignment or transfer) and of the
other Operative Documents.

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

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

          (i)   if the Facility Lease is terminated pursuant to Section 10
     thereof as a result of the occurrence of an Event of Loss (other than a
     Regulatory Event of Loss or an Event of Loss described in clause (v) or
     (vii)   of the definition of "Event of Loss"), on the applicable
     Termination Date provided in Section 10.2(a) of the Facility Lease;

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

          (iii)   if the Facility Lease is terminated pursuant to Section 13.1

                                      17
<PAGE>
     thereof, unless the Facility Lessee purchases the Facility and effectuates
     an assumption of the applicable Lessor Notes in accordance with paragraph
     (b) of this Section 2.10, on the applicable Termination Date provided in
     Section 13.1 of the Facility Lease; and

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

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

     (b)   Unless a Significant Lease Default or a Lease Event of Default shall
have occurred and be continuing after giving effect to such assumption, the
obligations and liabilities of the Owner Lessor hereunder and under all of the
Lessor Notes may be assumed in whole (but not in part) by the Facility Lessee
in the event of the occurrence of (i) a Regulatory Event of Loss, or (ii) a
termination by the Facility Lessee pursuant to Section 13.1 or 13.2 of the
Facility Lease, where in connection with such termination the Facility Lessee
acquires the Undivided Interest pursuant to an assumption agreement (which
assumption agreement may be combined with the indenture supplemental to this
Indenture hereinafter referred to in this Section 2.10(b), and shall provide
for the assumption by the Facility Lessee of the obligations and liabilities of
the Owner Lessor and the Owner Participant under the Operative Documents
pertaining to the Undivided Interest) which shall make such obligations and
liabilities fully recourse to the Facility Lessee and shall otherwise be in
form and substance acceptable to the Indenture Trustee and the Owner Lessor.
The Facility Lessee will execute and deliver, and the Indenture Trustee will
authenticate, to each Noteholder in exchange for such old Lessor Note a new
Lessor Note, in a principal amount equal to the outstanding principal amount of
such old Lessor Note and otherwise in substantially similar form and tenor to
such old Lessor Note but indicating that the Facility Lessee is the issuer
thereof. When such assumption agreement becomes effective, the Owner Lessor
shall be released and discharged without further act from all obligations and
liabilities assumed by the Facility Lessee. All documentation in connection
with any such assumption (including an indenture supplemental to this Indenture
which shall, among other things, contain provisions appropriately amending
references to the Facility Lease in this Indenture and contain covenants by the
Facility Lessee similar to those contained in the Facility Lease (other than
any covenants which were solely for the benefit of the Owner Participant),
changed as appropriate, and amendments or supplements to the other Operative
Documents, officers' certificates, opinions of counsel and regulatory
approvals) shall be prepared by and at the expense of the Facility Lessee
acceptable in form and substance to the

                                      18
<PAGE>
Indenture Trustee.

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

          (i)   the Indenture Trustee shall have received an Opinion of Counsel
     of the Facility Lessee including, in the case of clause (5) below, a
     nationally recognized outside counsel selected by the Facility Lessee and
     reasonably acceptable to the Noteholders (it being acknowledged and agreed
     that the Facility Lessee's counsel on the Closing Date shall be deemed
     acceptable), addressed to the Indenture Trustee and the Noteholders, to the
     effect that (1) the assumption agreement and each other instrument,
     document or agreement executed and delivered by the Facility Lessee in
     connection with the assumption contemplated by the assumption agreement
     (collectively, the "Assumption Documents") have been duly authorized,
     executed and delivered by the Facility Lessee, (2) each Assumption Document
     and the assumptions contemplated thereby do not contravene (x) the Organic
     Documents of the Facility Lessee, (y) any provision of any security issued
     by the Facility Lessee or of any agreement, instrument or other undertaking
     to which the Facility Lessee is a party or by which it or any of its
     property is bound or (z) any Applicable Law, (3) no Governmental
     Approval is necessary or required in connection with any Assumption
     Document or the assumption contemplated thereby (or, if any such
     Governmental Approval is necessary or required, that the same has been
     duly obtained and is final and in full force and effect and any period
     for the filing of notice of rehearing or application for judicial
     review of the issuance of such Governmental Approval has expired
     without any such notice or application having been made), (4) each
     Assumption Document is a legal, valid and binding obligation of the
     Facility Lessee, enforceable in accordance with its terms, (5) such
     assumption agreement and the assumption of the Lessor Notes thereunder
     shall not cause a Tax Event to occur as to any holder of any Lessor
     Note or any Certificateholder and (6) the lien of this Indenture will
     continue to be a first priority perfected lien on the Indenture Estate;

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

                                      19
<PAGE>
          (iii)   Moody's and S&P shall have confirmed that such assumption
     will not result in a downgrading of the rating on the Certificates;

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

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

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

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

          (i)   All of the Lessor Notes outstanding under this Indenture shall
     be redeemed at such redemption price upon an optional refinancing pursuant
     to Section 11.2 of the Participation Agreement. The Owner Lessor's failure
     to consummate such redemption as a result of an event described in this
     clause (i) following delivery of such notice shall not constitute a Lease
     Indenture Event of Default or any other default under the Operative
     Documents.

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

                                      20
<PAGE>
     default under the Operative Documents.

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

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

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

     (f)   At least 20 days but not more than 60 days before a date of
redemption, the Indenture Trustee shall deliver notification of such redemption
by first-class mail to each Noteholder to be redeemed at such Noteholder's
registered address; provided, that no notice shall be required so long as the
Pass Through Trustee and the Indenture Trustee are the same entity. Each such
notice shall state:

          (i) the date of redemption;

          (ii) the redemption price;

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

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

          (v) that, unless the Owner Lessor defaults in making such redemp-

                                      21
<PAGE>
     tion payment, interest on Lessor Notes called for redemption ceases to
     accrue on and after the redemption date; and

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

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

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

     Section 2.11.   Payment of Expenses on Transfer. Upon the issuance of a
new Lessor Note or Lessor Notes pursuant to Section 2.8 or 2.9 hereof, the Owner
Lessor or the Indenture Trustee may require from the party requesting such new
Lessor Note or Lessor Notes payment of a sum to reimburse the Owner Lessor and
the Indenture Trustee for, or to provide funds for, the payment on an After-Tax
Basis to the Owner Lessor, the Indenture Trustee and the Owner Participant of
any tax or other governmental charge in connection therewith or any charges and
expenses connected with such tax or governmental charge paid or payable by the
Owner Lessor or the Indenture Trustee.

     Section 2.12.   Additional Lessor Notes.

     (a)   Additional Lessor Notes (each, an "Additional Lessor Note") of the
Owner Lessor may be issued under and secured by this Indenture, at any time or
from time to time, in addition to the Initial Lessor Notes and subject to the
conditions hereinafter provided in this Section 2.12, for cash in the amount
equal to the original principal amount of such Additional Lessor Notes, for the
purpose of (i) providing

                                      22
<PAGE>
funds in connection with Supplemental Financing pursuant to Section 11.1 of the
Participation Agreement for the payment of all or any portion of Modifications
to the Facility pursuant to Section 8 of the Facility Lease, or (ii) redeeming
any previously issued Lessor Notes pursuant to an optional refinancing pursuant
to Section 11.2 of the Participation Agreement and providing funds for the
payment of all reasonable costs and expenses in connection therewith.

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

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

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

                                      23
<PAGE>
     respect thereof);

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

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

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

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

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

          (vii)   an opinion of counsel to the Owner Lessor who shall be
     reasonably satisfactory to the Indenture Trustee, as to the
     authorization, validity and

                                      24
<PAGE>
     enforceability of the Additional Lessor Notes and that all conditions
     hereunder to the authentication and delivery of such Additional Lessor
     Notes have been complied with.

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

     (e)   This Indenture is an open-end deed of trust and mortgage which
secures existing indebtedness, "future advances", "protective advances,"
"authorized advances"and "contingent obligations" as such terms are under or
referred to under applicable Arizona law. The maximum principal indebtedness
secured by this Indenture, including future advances and contingent obligations
but excluding protective advances, shall not at any time exceed the total amount
of Two Hundred Twenty Million Five Hundred Thousand Dollars ($220,500,000);
provided, however, that nothing herein contained shall limit the amount secured
by this Indenture if the Secured Indebtedness is increased by protective
advances; and provided, further, such limitation as to such future advances and
contingent obligations shall only pertain to the record priority of the amount
thereof secured hereby pursuant to applicable law and does not otherwise limit
the amount of total indebtedness of Owner Lessor secured hereby or limit the
liability of Owner Lessor to Indenture Trustee for such total indebtedness,
including future advances and contingent obligations. The future advances
secured hereby shall be made to or for the account of Owner Lessor and may be
made under the Additional Lessor Notes, or pursuant to promissory notes or other
instruments evidencing such future advances which may be hereafter executed and
delivered by Owner Lessor to Indenture Trustee. In the event that any notice is
recorded or is received by Indenture Trustee, any commitment, agreement, or
obligation to make future advances to or for the benefit of Owner Lessor shall
immediately terminate.

     Section 2.13.   Restrictions of Transfer Resulting from Federal
Securities Laws; Legend. Each Lessor Note shall be delivered to the initial
Noteholder thereof without registration of such Lessor Note under the Securities
Act and without qualification of this Indenture under the Trust Indenture Act of
1939, as amended. Prior to any transfer of any such Lessor Note, in whole or in
part, to any Person, the Noteholder thereof shall furnish to the Facility
Lessee, the Indenture Trustee and the

                                      25
<PAGE>
Owner Lessor an opinion of counsel, which opinion and which counsel shall be
reasonably satisfactory to the Indenture Trustee, the Owner Lessor and the
Facility Lessee, to the effect that such transfer will not violate the
registration provisions of the Securities Act or require qualification of this
Indenture under the Trust Indenture Act of 1939, as amended, and all Lessor
Notes issued hereunder shall be endorsed with a legend which shall read
substantially as follows:

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

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

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

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

     Section 3.1.   Distribution of Periodic Rent.

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

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

                                      26
<PAGE>
     such Lessor Note bears to the aggregate amount of the payments then due
     and payable under all such Lessor Notes; and

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

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

     (c)   Retention of Amounts by the Indenture Trustee. If at the time of
receipt by the Indenture Trustee of an installment of Periodic Rent (whether or
not then overdue) or of payment of interest on any overdue installment of
Periodic Rent,

                                      27
<PAGE>
there shall have occurred and be continuing a Lease Indenture Event of Default,
the Indenture Trustee shall retain such installment of Periodic Rent or payment
of interest (to the extent not then required to be distributed pursuant to
clause "First" of Section 3.1(a)) as part of the Indenture Estate and shall not
distribute any such payment of Periodic Rent or interest pursuant to clause
"Second" of Section 3.1(a) until such time as such Lease Indenture Event of
Default shall be cured or waived or until such time as the Indenture Trustee
shall have received written instructions from a Majority in Interest of
Noteholders to make such a distribution; provided that such amounts must be
returned to the Owner Lessor within six (6) months from the receipt thereof by
the Indenture Trustee unless (i) the Indenture Trustee has declared the unpaid
principal of all Lessor Notes due and payable (or such amounts shall have
automatically become due and payable), pursuant to Section 4.2(a) and the
Indenture Trustee is diligently pursuing any dispossessary remedies available
under Section 4.3 hereof (unless such remedies are stayed or prevented by
operation of law) or (ii) any other Lease Indenture Event of Default shall have
occurred during the intervening period and be continuing, in which case, such
six-month period will be restarted from the date such other Lease Indenture
Event of Default shall have occurred. Upon the cure or waiver of such Lease
Indenture Event of Default, withheld Periodic Rent shall, subject to clause
(ii) of the immediately preceding sentence, be distributed to the Owner Lessor
(to the extent that all payments to be distributed pursuant to clause "First"
of Section 3.1(a) have been made), and no further withholding of Periodic Rent
on account of such Lease Indenture Event of Default shall be effected.

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

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

                                      28
<PAGE>
     Indenture Trustee and to the extent reimbursable and not previously
     reimbursed) shall be distributed to the Indenture Trustee for application
     to itself;

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

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

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

     Section 3.3.   Payments After Lease Indenture Event of Default. All
payments received and all amounts held or realized by the Indenture Trustee
after a Lease Indenture Event of Default shall have occurred and be continuing
(including any amounts realized by the Indenture Trustee from the exercise of
any remedies pursuant to Section 17 of the Facility Lease or from the
application of Section 4.3 hereof) and after either (a) the Indenture Trustee
has declared the Facility Lease to be in default pursuant to Section 17 thereof
or (b) the entire principal amount of Lessor Notes shall have been declared or
shall automatically have become due and payable, together with all payments or
amounts then held or thereafter received by the Indenture Trustee hereunder,
shall, so long as such declaration shall not have been rescinded, be distributed
forthwith by the Indenture Trustee in the following order of

                                      29
<PAGE>
priority:

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

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

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

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

     Section 3.4.   Investment of Certain Payments Held by the Indenture
Trustee. Upon the written direction and at the risk and expense of the Owner
Lessor, the

                                      31
<PAGE>
Indenture Trustee shall invest and reinvest any moneys held by the Indenture
Trustee pursuant to Section 3.1(c), 3.5 or 3.6 hereof in such Permitted
Investments as may be specified in such direction. The proceeds received upon
the sale or at maturity of any Permitted Investment and any interest received
on such Permitted Investment and any payment in respect of a deficiency
contemplated by the following sentence shall be held as part of the Indenture
Estate and applied by the Indenture Trustee in the same manner as the moneys
used to buy such Permitted Investment, and any Permitted Investment may be sold
(without regard to maturity date) by the Indenture Trustee whenever necessary
to make any payment or distribution required by this Section 3. If the proceeds
received upon the sale or at maturity of any Permitted Investment (including
interest received on such Permitted Investment) shall be less than the cost
thereof (including accrued interest), the Owner Lessor will pay or cause to be
paid to the Indenture Trustee an amount equal to such deficiency.

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

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

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

                                      32
<PAGE>
     (b)   all payments received and amounts realized by the Indenture Trustee
with respect to the Indenture Estate (including all amounts realized after the
termination of the Facility Lease), to the extent received or realized at any
time after payment in full of the principal of and, Make-Whole Amount, if any,
and interest on all Lessor Notes then outstanding and all other amounts due the
Indenture Trustee or the Noteholders, as well as any other amounts remaining as
part of the Indenture Estate after such payment in full of the principal of,
Make-Whole Amount, if any, and interest on all Lessor Notes outstanding;

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

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

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

     Section 3.9.   Payments Under Assigned Documents. Notwithstanding
anything to the contrary contained in this Indenture, until the discharge and
satisfaction of the Lien of this Indenture, all payments due or to become due
under any Assigned Document to the Owner Lessor (except so much of such payments
as constitute Excepted Payments) shall be made directly to the Indenture
Trustee's Account and the Owner Lessor shall give all notices as shall be
required under the Assigned Documents to direct payment of all such amounts to
the Indenture Trustee hereunder. The Owner Lessor agrees that if it should
receive any such payments directed to be made to the Indenture Trustee or any
proceeds for or with respect to the Indenture Estate or as the result of the
sale or other disposition thereof or otherwise constituting a part of the
Indenture Estate to which the Owner Lessor is not entitled hereunder, it will
promptly forward such payments to the Indenture Trustee or in accordance with
the Indenture Trustee's instructions. The Indenture Trustee agrees to apply
payments from time to time received by it (from the Facility Lessee, the Owner
Lessor or otherwise) with respect to the Facility Lease, any other Assigned
Document

                                      33
<PAGE>
or the Facility in the manner provided in Section 2.7 hereof, and this
Section 3.

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

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

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

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

     (c)   As collateral security for the prompt payment in full when due of
the Lessor Secured Obligations owed to the Indenture Trustee and each
Noteholder, the Owner Lessor hereby pledges, assigns, hypothecates and transfers
to the Indenture Trustee for the benefit of the Indenture Trustee and each of
the Noteholders, and hereby grants to the Indenture Trustee for the benefit of
the Indenture Trustee and each of the Noteholders, a lien on and security
interest in and to, (i) the Indenture

                                      34
<PAGE>
Trustee's Account and any successor account thereto and (ii) all cash,
investments, investment property, securities or other property at any time on
deposit in or credited to the Indenture Trustee's Account, including all income
or gain earned thereon and any proceeds thereof (the "Indenture Trustee Account
Collateral").

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

     (a)   The Account Bank.

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

          (ii)   Financial Assets Election. The Account Bank agrees that each

                                      35
<PAGE>
     item of property (including any security, instrument or obligation, share,
     participation, interest, cash or cash equivalent or other property
     whatsoever) credited to the Indenture Trustee's Account shall be treated
     as a "financial asset" within the meaning of Section 8-l02(a)(9) of the
     UCC.

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

          (iv)   Subordination of Lien; Waiver of Set-Off. In the event that the
     Account Bank has or subsequently obtains by agreement, operation of law or
     otherwise a lien or security interest in the Indenture Trustee's Account or
     any security entitlement credited thereto, the Account Bank agrees that
     such lien or security interest shall be subordinate to the lien and
     security interest of the Indenture Trustee for the benefit of the Indenture
     Trustee and each Noteholder. The financial assets standing to the credit
     of the Indenture Trustee's Account will not be subject to deduction,
     set-off, banker's lien, or any other right in favor of any Person other
     than the Indenture Trustee for the benefit of the Indenture Trustee and
     each Noteholder (except for the face amount of any checks which have been
     credited to the Indenture Trustee's Account but are subsequently returned
     unpaid because of uncollected or insufficient funds).

          (v)   No Other Agreements. The Account Bank and the Owner

                                      36
<PAGE>
     Lessor have not entered into any agreement governing or with respect to
     the Indenture Trustee's Account or any financial assets credited to the
     Indenture Trustee's Account other than this Indenture. The Account Bank
     has not entered into any agreement with the Owner Lessor or any other
     Person purporting to limit or condition the obligation of the Account Bank
     to comply with entitlement orders originated by the Indenture Trustee in
     accordance with Section 3.12(a)(iii) hereof. In the event of any conflict
     between this Section 3.12 or any other agreement now existing or hereafter
     entered into, the terms of this Section 3.12 shall prevail.

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

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

     (b)   Limited Rights of the Owner Lessor. The Owner Lessor shall not have
any rights against or to monies held in the Indenture Trustee's Account, as
third party beneficiary or otherwise, or any right to direct the Account Bank or
the Indenture Trustee to apply or transfer monies in the Indenture Trustee's
Account, except the right to receive or make requisitions of monies held in the
Indenture Trustee's Account, as expressly provided in this Indenture, and to
direct the investment of monies held in the Indenture Trustee's Account as
expressly provided in Section 3.7 hereof. Except as expressly provided in this
Indenture, in no event shall any amounts or Permitted Investments deposited in
or credited to the Indenture Trustee's Account be registered in the name of the
Owner Lessor, payable to the order of the Owner Lessor or specially indorsed to
the Owner Lessor except to the extent that the foregoing have been specially
indorsed to the Indenture Trustee or in blank.

                                      37
<PAGE>
                               SECTION 4.
                  COVENANTS OF OWNER LESSOR; DEFAULTS;
                      REMEDIES OF INDENTURE TRUSTEE

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

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

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

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

     (a)   any Lease Event of Default (other than the failure of the Facility
Lessee to pay any amount which shall constitute an Excepted Payment unless the
Facility Lessee has been declared in default pursuant to Section 17 thereof by
the Owner Lessor and the Indenture Trustee has consented to such event
constituting a Lease Indenture Event of Default pursuant to Section 4.3(e)
hereof) and other than a Lease Event of Default in consequence of the Facility
Lessee's failure to maintain the

                                      38
<PAGE>
insurance required by Section 11 of the Facility Lease if, and so long as, (i)
such Lease Event of Default is waived by the Owner Lessor and the Owner
Participant and (ii) the insurance maintained by the Facility Lessee still
constitutes Prudent Industry Practice); or

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

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

     (d)   any representation or warranty made by the Lessor Manager or the
Owner Lessor in Section 3.2 or 3.3 of the Participation Agreement or in the
certificate delivered by the Lessor Manager or the Owner Lessor at the Closing
pursuant to Section 4.6 of the Participation Agreement or any representation or
warranty made by the Owner Participant in Section 3.4 of the Participation
Agreement (other than Section 3.4(i)) or the certificate delivered by the Owner
Participant at the Closing pursuant to Section 4.6 of the Participation
Agreement, or any representation or warranty made by the OP Guarantor (provided
the OP Guaranty shall not have been terminated or released) under the OP
Guaranty or in the certificate delivered by such OP Guarantor at the Closing
pursuant to Section 4.6 of the Participation Agreement, shall prove to have been
incorrect in any material respect when made and continues to be material and
unremedied for a period of 30 days after receipt by such party of

                                      39
<PAGE>
written notice thereof; provided, however, that if such condition cannot be
remedied within such 30-day period, then the period within which to remedy such
condition shall be extended up to an additional 120 days, so long as such party
diligently pursues such remedy and such condition is reasonably capable of
being remedied within such extended period;

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

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

     Section 4.3.   Remedies of the Indenture Trustee.

     (a)   In the event that a Lease Indenture Event of Default shall have
occurred and be continuing, the Indenture Trustee in its discretion may, or upon
receipt of written instructions from a Majority in Interest of Noteholders shall
declare, by written notice to the Owner Lessor and the Owner Participant, the
unpaid principal amount of all Lessor Notes, with accrued interest thereon, to
be immediately due and payable, upon which declaration such principal amount and
such accrued interest shall immediately become due and payable (except in the
case of a Lease Indenture

                                      40
<PAGE>
Event of Default under Section 4.2(e) or (f), such principal and interest shall
automatically become due and payable immediately without any such declaration
or notice) without further act or notice of any kind. If any Make-Whole amount
is due and payable pursuant to Section 2.10(c) or (d) at the time of any such
acceleration, such Make-Whole Amount shall also be due and payable in
connection with such acceleration.

     (b)   If a Lease Indenture Event of Default shall have occurred and be
continuing, then and in every such case, the Indenture Trustee, as assignee
under the Facility Lease or hereunder or otherwise, may, and where required
pursuant to the provisions of Section 5 hereof shall, upon written notice to
the Owner Lessor, exercise any or all of the rights and powers and pursue any
or all of the remedies pursuant to this Section 4 and, in the event such Lease
Indenture Event of Default shall be a Lease Event of Default, any and all of
the remedies provided pursuant to this Section 4 and Section 17 of the Facility
Lease and, subject to Section 4.4, may thereupon or at any time thereafter, in
its own name or by or through an agent or receiver appointed by a court,
without regard to the adequacy of any security for the Secured Indebtedness,
enter into or upon the Indenture Estate and take possession of all or any part
of the Indenture Estate and may exclude therefrom the Owner Participant, the
Owner Lessor and, in the event such Lease Indenture Event of Default shall be a
Lease Event of Default, the Facility Lessee and all persons claiming under
them, and with or without any entry or taking of possession, may in its own
name or in the name of the Owner Lessor or any other Person, sue for or
otherwise collect all issues, rents, income, royalties and profits
(collectively, "Real Property Rents"), including those past due and unpaid as
well as those due, coming due or to be paid, and apply the Payments, less
costs, expenses, attorneys' fees and other expenses toward payment or partial
payment of the Secured Indebtedness in accordance with this Indenture and
Applicable Law. Further, the Indenture Trustee may exercise all remedies
available to a secured party under the Uniform Commercial Code or any other
provision of Applicable Law. The Indenture Trustee may proceed to enforce the
rights of the Indenture Trustee and of the Noteholders by directing payment to
it of all moneys payable under any agreement or undertaking constituting a part
of the Indenture Estate, by proceedings in any court of competent jurisdiction
to recover damages for the breach hereof or for the appointment of a receiver
or for sale of all or any part of the Property Interest or for foreclosure of
the Property Interest, together with the Owner Lessor's interest in the
Assigned Documents, and by any other action, suit, remedy or proceeding
authorized or permitted by this Indenture, at law or in equity, or whether for
the specific performance of any agreement contained herein, or for an
injunction against the violation of any of the terms hereof, or in aid of the
exercise of any power granted hereby or by law, and in addition may foreclose
upon,

                                      41
<PAGE>
sell, assign, transfer and deliver, from time to time to the extent permitted
by Applicable Law, all or any part of the Indenture Estate or any interest
therein, at any private sale or public auction with or without demand,
advertisement or notice (except as herein required or as may be required by
law) of the date, time and place of sale and any adjournment thereof, for cash
or credit or other property, for immediate or future delivery and for such
price or prices and on such terms as the Indenture Trustee, in its unfettered
discretion, may determine, or as may be required by Applicable Law, so long as
the Owner Participant and the Owner Lessor are afforded a commercially
reasonable opportunity to bid for all or such part of the Indenture Estate in
connection therewith unless Section 4.7 shall otherwise be applicable; provided
that 20 days shall be deemed to be a commercially reasonable opportunity to bid
for purposes of this Section 4.3(b).  The Indenture Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Indenture Trustee and of the Noteholders
asserted or upheld in any bankruptcy, receivership or other judicial
proceedings. The collection of such Real Property Rents, or the entering upon
and taking possession of the Indenture Estate, or the application of the Real
Property Rents as aforesaid, shall not cure or waive any default or notice of
default hereunder or invalidate any act done in response to such default or
pursuant to such notice of default. The Owner Lessor also hereby authorizes the
Indenture Trustee upon such entry, at its option, to take over and assume the
management, operation and maintenance of the Indenture Estate and to perform
all acts Indenture Trustee in its sole discretion deems necessary and proper
and to expend such sums out of Real Property Rents as may be needed in
connection therewith, in the same manner and to the same extent as the Owner
Lessor theretofore could do. It is not the intention of the parties hereto that
an entry by the Indenture Trustee upon the Indenture Estate under the terms of
this instrument shall make the Indenture Trustee a party in possession in
contemplation of the law, except at the option of the Indenture Trustee.

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

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

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

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

     (a)   If the Facility Lessee shall fail to make any payment of Periodic
Rent due on any Rent Payment Date when the same shall have become due, and if
such failure of the Facility Lessee to make such payment of Periodic Rent shall
not constitute the fourth consecutive such failure or the eighth cumulative
failure of the Facility Lessee, then the Owner Lessor may (but need not) pay to
the Indenture Trustee, at any time prior to the expiration of ten (10) Business
Days after the Owner Lessor and the Owner Participant shall have received notice
from the Indenture Trustee or have Actual Knowledge of the failure of the
Facility Lessee to make such

                                      43
<PAGE>
payment of Periodic Rent, an amount equal to the principal of, Make-Whole
Amount, if any, and interest on the Lessor Notes, then due (otherwise than by
declaration of acceleration) on such Rent Payment Date, together with any
interest due thereon on account of the delayed payment thereof, and such
payment by the Owner Lessor shall be deemed (for purposes of this Indenture) to
have cured any Lease Indenture Event of Default which arose or would have
arisen from such failure of the Facility Lessee.

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

     (c)   The Owner Lessor, upon exercising its rights under paragraph (a) or
(b) of this Section 4.4 to cure the Facility Lessee's failure to pay Periodic
Rent or Supplemental Rent or to perform any other obligation under the Facility
Lease or any other Operative Document, shall not obtain any Lien on any part of
the Indenture Estate on account of such payment or performance nor, except as
expressly provided in the next sentence, pursue any claims against the Facility
Lessee or any other party, for the repayment thereof if such claims would impair
the prior right and security interest of the Indenture Trustee in and to the
Indenture Estate. Upon such payment or performance by the Owner Lessor, the
Owner Lessor shall (to the extent of such payment made by it and the costs and
expenses incurred in connection with such payments and performance thereof
together with interest thereon and so long as no event which would, with the
passing of time or giving of notice or both, become a Lease Indenture Event of
Default under Section 4.2(b), (e) or (f), or any Lease Indenture Event of
Default hereunder shall have occurred and be continuing) be subrogated to the
rights of the Indenture Trustee and the Noteholders to receive the payment of
Periodic Rent or Supplemental Rent, as the case may be, with respect to which
the Owner Lessor made such payment and interest on account of such Periodic Rent
payment or Supplemental Rent payment being overdue in the manner set forth in
the next two sentences. If the Indenture Trustee shall thereafter receive such
payment of Periodic Rent, Supplemental Rent or such interest, the Indenture
Trustee shall, notwithstanding the requirements of Section 3.1 hereof,
forthwith, remit such

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<PAGE>
payment of Periodic Rent or Supplemental Rent, as the case may be (to the
extent of the payment made by the Owner Lessor pursuant to this Section 4.4)
and such interest to the Owner Lessor in reimbursement for the funds so
advanced by it, provided that if (A) any event which, with the passing of time
or giving of notice or both, would become a Lease Indenture Event of Default
under Section 4.2(b), (e) or (f) hereof, or any Lease Indenture Event of
Default hereunder shall have occurred and be continuing or (B) any payment of
principal, interest, or Make-Whole Amount, if any, on any Lessor Note then
shall be overdue, such payment shall not be remitted to the Owner Lessor but
shall be held by the Indenture Trustee as security for the obligations secured
hereby and distributed in accordance with Section 3.1 hereof. The Owner Lessor
shall not attempt to recover any amount paid by it on behalf of the Facility
Lessee pursuant to this Section 4.4 except by demanding of the Facility Lessee
payment of such amount or by commencing an action against the Facility Lessee
for the payment of such amount, and except where a Lease Indenture Event of
Default (other than a Lease Event of Default) has occurred and is continuing,
the Owner Lessor shall be entitled to receive the amount of such payment and
the costs and expenses incurred in connection with such payments and
performance thereof together with interest thereon from the Facility Lessee
(but neither the Owner Lessor nor the Owner Participant shall have any right to
collect such amounts by exercise of any of the remedies under Section 17 of the
Facility Lease) or, if paid by the Facility Lessee to the Indenture Trustee,
from the Indenture Trustee to the extent of funds actually received by the
Indenture Trustee.

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

     (e)   Each Noteholder agrees, by acceptance thereof, that if (i) (x) a
Lease Indenture Event of Default, which also constitutes a Lease Event of
Default, shall have occurred and be continuing for a period of at least 90 days
without the Lessor Notes having been accelerated or the Indenture Trustee having
exercised any remedy under the Facility Lease intended to dispossess the
Facility Lessee of the Facility, (y) the Lessor Notes have been accelerated
pursuant to Section 4.3(a) and such acceleration has not theretofore been
rescinded, or (z) an Enforcement Notice giving notice of the intent of the
Indenture Trustee to dispossess the Facility Lessee of the Facility under the
Facility Lease has been given pursuant to Section 5.1 within the

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<PAGE>
previous 30 days, (ii) no Lease Indenture Event of Default of the nature
described in any of clauses (b) through (f) of Section 4.2 hereof shall have
occurred and be continuing and (iii) the Owner Lessor shall give written notice
to the Indenture Trustee of the Owner Lessor's intention to purchase all of the
Lessor Notes in accordance with this paragraph, then, upon receipt within 10
Business Days after such notice from the Owner Lessor of an amount equal to the
sum of (x) the aggregate unpaid principal amount of any unpaid Lessor Notes
then held by the Noteholders, together with accrued but unpaid interest thereon
to the date of such receipt (as well as any interest on overdue principal and,
to the extent permitted by Applicable Law, overdue interest), plus (y) the
aggregate amount, if any, of all sums which, if Section 3.3 were then
applicable, such Noteholder would be entitled to be paid before any payments
were to be made to the Owner Lessor but excluding any Make-Whole Amount, such
Noteholder will forthwith (and upon its receipt of the payment referred to in
clause (1) below, will be deemed to) sell, assign, transfer and convey to the
Owner Lessor (without recourse or warranty of any kind other than of title to
the Lessor Notes so conveyed) all of the right, title and interest of such
Noteholder in and to the Indenture Estate, this Indenture, all Lessor Notes
held by such Noteholder and the Assigned Documents, and the Owner Lessor shall
thereupon assume all such Noteholder's rights and obligations in such
documents; provided, that no such holder shall be required to so convey unless
(1) the Owner Lessor shall have simultaneously tendered payment on all other
Lessor Notes issued by the Owner Lessor at the time outstanding pursuant to
this paragraph and (2) such conveyance is not in violation of any Applicable
Law. All charges and expenses required to be paid in connection with the
issuance of any new Lessor Note or Lessor Notes in connection with this
paragraph shall be borne by the Owner Lessor.  Notwithstanding the foregoing,
the Owner Lessor may exercise the right set forth in this clause (e) prior to
the end of the 90 day period set forth above but, in such case, the Make-Whole
Amount, if any, shall also be payable.

     Section 4.5.   Rescission of Acceleration. If at any time after the
outstanding principal amount of the Lessor Notes shall have become due and
payable by acceleration pursuant to Section 4.3 hereof, (a) all amounts of
principal, Make-Whole Amount, if any, and interest which are then due and
payable in respect of all the Lessor Notes other than pursuant to Section 4.3
hereof shall have been paid in full, together with interest on all such overdue
principal and (to the extent permitted by Applicable Law) overdue interest at
the rate or rates specified in the Lessor Notes, and an amount sufficient to
cover all costs and expenses of collection incurred by or on behalf of the
holders of the Lessor Notes (including counsel fees and expenses and all
expenses and reasonable compensation of the Indenture Trustee) and (b) every
other Lease Indenture Event of Default shall have been remedied, then a
Majority in

                                      46
<PAGE>
Interest of Noteholders may, by written notice or notices to the Owner Lessor,
the Indenture Trustee and the Facility Lessee, rescind and annul such
acceleration and any related declaration of default under the Facility Lease
and their respective consequences, but no such rescission and annulment shall
extend to or affect any subsequent Lease Indenture Event of Default or impair
any right consequent thereon, and no such rescission and annulment shall
require any Noteholder to repay any principal or interest actually paid as a
result of such acceleration.

     Section 4.6.   Return of Indenture Estate, Etc.

     (a)   If at any time the Indenture Trustee has the right to take
possession of the Indenture Estate pursuant to Section 4.3 hereof, at the
request of the Indenture Trustee, the Owner Lessor promptly shall (i) execute
and deliver to the Indenture Trustee such instruments of title and other
documents and (ii) make all such demands and give all such notices as are
permitted by the terms of the Facility Lease to be made or given by the Owner
Lessor upon the occurrence and continuance of a Lease Event of Default, in each
case as the Indenture Trustee may deem necessary or advisable to enable the
Indenture Trustee or an agent or representative designated by the Indenture
Trustee, at such time or times and place or places as the Indenture Trustee may
specify, to obtain possession of all or any part of the Indenture Estate the
possession of which the Indenture Trustee shall at the time be entitled to
hereunder. If the Owner Lessor shall for any reason fail to execute and deliver
such instruments and documents after such request by the Indenture Trustee, the
Indenture Trustee may (i) obtain a judgment conferring on the Indenture Trustee
the right to immediate possession and requiring the Owner Lessor to execute and
deliver such instruments and documents to the Indenture Trustee, to the entry of
which judgment the Owner Lessor hereby specifically consents, and (ii) pursue
all or any part of the Indenture Estate wherever it may be found and enter any
of the premises wherever all or part of the Indenture Estate may be or is
supposed to be and search for all or part of the Indenture Estate and take
possession of and remove all or part of the Indenture Estate.

     (b)   Upon every such taking of possession, the Indenture Trustee may,
from time to time, as a charge against proceeds of the Indenture Estate, make
all such expenditures with respect to the Indenture Estate as it may deem
proper. In each such case, the Indenture Trustee shall have the right to deal
with the Indenture Estate and to carry on the business and exercise all rights
and powers of the Owner Lessor relating to the Indenture Estate, as the
Indenture Trustee shall deem best, and, the Indenture Trustee shall be entitled
to collect and receive all rents (including Periodic Rent and Supplemental
Rent), revenues, issues, income, products and profits of the Indenture Estate
and every part thereof (without prejudice to the right of the Indenture Trustee
under any provision of this Indenture to collect and receive cash held by, or
required

                                      47
<PAGE>
to be deposited with, the Indenture Trustee hereunder) and to apply the same to
the management of or otherwise dealing with the Indenture Estate and of
conducting the business thereof, and of all expenditures with respect to the
Indenture Estate and the making of all payments which the Indenture Trustee may
be required or may elect to make, if any, for taxes, assessments, insurance or
other proper charges upon the Indenture Estate or any part thereof (including
the employment of engineers and accountants to examine, inspect and make
reports upon the properties and books and records of the Owner Lessor and the
Facility Lessee relating to the Indenture Estate and the Operative Documents),
or under any provision of, this Indenture, as well as just and reasonable
compensation for the services of the Indenture Trustee and of all Persons
properly engaged and employed by the Indenture Trustee.

     Section 4.7.   Power of Sale and Other Remedies.

     (a)   In addition to all other remedies provided for herein if a Lease
Indenture Event of Default shall have occurred and be continuing, the Indenture
Trustee shall, subject to Sections 4.3 and 4.4 and to provisions of Applicable
Law, have the right(s) to (i) sell the Indenture Estate or any part of the
Indenture Estate at one or more public sale or sales; or (ii) commence an action
or actions to foreclose the lien of this Indenture as a mortgage; and/or (iii)
specifically enforce any of the covenants and agreements hereof, in each case in
order to pay the Secured Indebtedness, and all impositions, if any, with accrued
interest thereon, and all expenses of the sale and of all proceedings in
connection therewith, including reasonable attorney's fees, if incurred, and do
any acts that it deems necessary or desirable to preserve the value,
marketability or rentability of the Indenture Estate, or any part thereof or
interest therein, increase the income therefrom or protect the security hereof.
If the Indenture Trustee elects to exercise the power of sale herein contained,
the Indenture Trustee shall cause to be recorded, published and delivered to the
Owner Lessor such notice of sale as then required by Applicable Law. The
Indenture Trustee shall, without demand on the Owner Lessor, after lapse of such
time as may then be required by law and after recordation of such notice of sale
and notice of sale having been given as required by Applicable Law, sell the
Indenture Estate at the time and place of sale fixed by it in said notice of
sale, either as a whole, or in separate lots or parcels or items as the
Indenture Trustee shall deem expedient, and in such order as it may determine,
at public auction to the highest bidder for cash in lawful money of the United
States payable at the time of sale. The Indenture Trustee shall deliver to such
purchaser or purchasers thereof its good and sufficient deed or deeds conveying
the property so sold, but without any covenant or warranty, express or implied.
The recitals in such deed of any matters or facts shall be conclusive proof of
the truthfulness thereof. Any person, including, without limitation, the Owner
Lessor,

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<PAGE>
may bid at and be a purchaser at any such sale. The Indenture Trustee shall
apply the proceeds of sale as required by Applicable Law and in accordance with
the terms of this Indenture. Subject to A.R.S. Section 33-810.B, the Indenture
Trustee may postpone sale of all or any portion of the Indenture Estate by
public announcement at such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement or subsequently
noticed sale, and without further notice make such sale at the time fixed by
the last postponement, or may, in its discretion, give a new notice of sale.
The Owner Lessor hereby requests that a copy of any notice of default and any
notice of sale hereunder be mailed to it at its address set forth in Section
9.5 of this Indenture. At any such public sale, the Indenture Trustee may
execute and deliver to the purchaser a conveyance of the Indenture Estate or
any part of the Indenture Estate, and to this end, the Owner Lessor hereby
constitutes and appoints the Indenture Trustee the agent(s) and attorney(s) in
fact of the Owner Lessor to make such sale and conveyance, and thereby to
divest the Owner Lessor of all right, title or equity that the Owner Lessor may
have in and to the Indenture Estate and to vest the same in the purchaser or
purchasers at such sale or sales, and all the acts and doings of said agent and
attorney in fact are hereby ratified and confirmed and any recitals in said
conveyance or conveyances as to facts essential to a valid sale shall be
binding upon the Owner Lessor. The aforesaid power of sale and agency hereby
granted are coupled with an interest and are irrevocable by death or otherwise,
are granted as cumulative of the other remedies provided hereby or by law for
collection of the Secured Indebtedness and shall not be exhausted by one
exercise thereof but may be exercised until full payment of the Secured
Indebtedness. Further, if a Lease Indenture Event of Default shall have
occurred and be continuing, the Indenture Trustee may, in addition to and not
in abrogation of other rights and remedies provided in this Section, either
with or without entry or taking possession as herein provided or otherwise,
proceed by a suit or suits in law or in equity or by any other appropriate
proceeding or remedy (i) to enforce payment of the Lessor Notes or the
performance of any term, covenant, condition or agreement of this Indenture or
any other right, and (ii) to pursue any other remedy available to it, all as
the Indenture Trustee shall determine most effectual for such purposes. Upon
any foreclosure sale, the Indenture Trustee may bid for and purchase the
Indenture Estate and shall be entitled to apply all or any part of the Secured
Indebtedness as a credit to the purchase price. In the event of a foreclosure
sale of the Indenture Estate, the proceeds of said sale shall be applied as
provided in Section 3.3 hereof. In the event of any such foreclosure sale by
the Indenture Trustee, the Owner Lessor shall be deemed a tenant holding over
and shall forthwith deliver possession to the purchaser or purchasers at such
sale or be summarily dispossessed according to provisions of law applicable to
tenants holding over. The Indenture Trustee, at the Indenture Trustee's option,
is authorized to foreclose this Indenture subject to the rights of any tenants
of the

                                      49
<PAGE>
Indenture Estate, and the failure to make any such tenants parties to any such
foreclosure proceedings and to foreclose their rights will not be, nor be
asserted to be by the Owner Lessor, a defense to any proceedings instituted by
the Indenture Trustee to collect the Secured Indebtedness.

     (b)   In amplification of, and not in limitation of paragraph (a) of this
Section 4.7, the Owner Lessor represents and warrants that this Indenture is
given primarily for a business, commercial or agricultural purpose. Owner
Lessor, therefore, agrees that the Indenture Trustee, its successors and
permitted assigns, shall have THE STATUTORY POWER OF SALE pursuant to the
applicable provisions of A.R.S. Sections 12-1241, et seq., 33-702.B; and 33-807,
et seq. as said statutes have been and shall be amended, which POWER is
expressly incorporated herein by reference. Such Statutory Power of Sale and
other rights, power, remedies and authorities shall be in addition to all rights
and remedies set forth herein or available under Applicable Law. In the exercise
of the Statutory Power of Sale, the Indenture Trustee, its successors and
assigns or its agents or attorneys, may sell the Indenture Estate or such
portion thereof as may remain subject to the Indenture in case of any partial
release thereof, either as a whole or in parcels, together with all improvements
that may be thereon, by a public sale on or near any part of the Indenture
Estate then subject to this Indenture or at the Indenture Trustee's principal
place of business or at any other office of the Indenture Trustee or any
attorney or agent thereof located in the same county in which any part of the
Indenture Estate is located, and the Indenture Trustee, its successors and
permitted assigns; and such sale shall forever bar the Owner Lessor and all
persons claiming under it from all right and interest in the Indenture Estate,
whether at law or in equity. In the exercise of THE STATUTORY POWER OF SALE
herein given, if the Indenture Trustee elects to sell in parts or parcels, such
sales may be held from time to time, and the POWER shall not be fully executed
until all of the Indenture Estate not previously sold shall have been sold.

     Section 4.8.   Appointment of Receiver and Assignment of Real Property
Rents. The Owner Lessor hereby assigns and transfers to the Indenture Trustee
all of the Real Property Rents, of the Indenture Estate, and hereby gives to and
confers upon the Indenture Trustee the right, power and authority to collect the
Real Property Rents. From and after any Lease Indenture Event of Default, the
Owner Lessor appoints the Indenture Trustee its true and lawful
attorney-in-fact, at the option of the Indenture Trustee at any time and from
time to time, to demand, receive and enforce payment, to give receipts, releases
and satisfactions. From and after any Lease Indenture Event of Default, the
Owner Lessor hereby authorizes and directs the lessees, tenants and occupants to
make all payments under any leases directly to the Indenture Trustee upon
written demand by the Indenture Trustee, without further

                                      50
<PAGE>
consent of the Owner Lessor. If the outstanding principal amount of the Lessor
Notes shall have been declared due and payable pursuant to Section 4.3 hereof,
as a matter of right, the Indenture Trustee shall be entitled to the
appointment of a receiver (who may be the Indenture Trustee or any successor or
nominee thereof) for all or any part of the Indenture Estate, whether such
receivership be incidental to a proposed sale of the Indenture Estate or the
taking of possession thereof or otherwise, and the Owner Lessor hereby consents
to the appointment of such a receiver and will not oppose any such appointment.
Any receiver appointed for all or any part of the Indenture Estate shall be
entitled to exercise all available rights and powers with respect to the
Indenture Estate to the extent instructed to do so by the Indenture Trustee.

     Section 4.9.   Remedies Cumulative. Each and every right, power and remedy
herein specifically given to the Indenture Trustee or otherwise in this
Indenture shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at law,
in equity or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by the Indenture
Trustee, and the exercise or the beginning of the exercise of any right, power
or remedy shall not be construed to be a waiver of the right to exercise at the
same time or thereafter any other right, power or remedy. No delay or omission
by the Indenture Trustee in the exercise of any right, remedy or power or in
the pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner Participant,
the Owner Lessor or the Facility Lessee or to be an acquiescence therein.

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

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

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

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

The Owner Lessor covenants not to hinder, delay or impede the exercise of any
right

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<PAGE>
or remedy under or in respect of this Lease Indenture, and agrees, to the
extent permitted by Applicable Law, to suffer and permit its exercise as though
no laws or rights of the character listed above were in effect; provided that
this shall not affect or reduce Owner Lessor's rights under Sections 4.3 and
4.4 hereof. Owner Lessor agrees for itself, its successors and assigns, that
the acceptance, before the expiration of the right of redemption and after the
commencement of foreclosure proceedings of this Indenture, of insurance
proceeds, eminent domain awards, rents or anything else of value to be applied
on or to the Secured Indebtedness by Indenture Trustee or any person or party
holding under it shall not constitute a waiver of such foreclosure or a waiver
or relinquishment of any right (s) to foreclose or to have a receiver appointed
for and take possession of the Indenture Estate or any part thereof. This
agreement by Owner Lessor is intended to apply to the acceptance and such
application of any such proceeds, awards, rents and other sums or anything else
of value whether the same shall be accepted from, or for the account of, Owner
Lessor or from any other source whatsoever by Indenture Trustee or by any
person or party holding under Indenture Trustee at any time or times in the
future while any of the obligations secured hereby shall remain outstanding.

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

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

     Section 4.13.   Right of the Indenture Trustee to Perform Covenants, Etc.
If the Owner Lessor shall fail to make any payment or perform any act required
to be made or performed by it hereunder or under the Assigned Documents, or if
the Owner

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

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

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

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

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

     Section 5.2.   Actions Upon Instructions Generally. Subject to the terms
of Sections 5.4, 5.5 and 5.6 hereof, upon written instructions at any time and
from time to time of a Majority in Interest of Noteholders, the Indenture
Trustee shall take such action, or refrain from taking such action, including
any of the following actions as may be specified in such instructions: (a) give
such notice, direction or consent or exercise such right, remedy or power or
take such action hereunder or under any Assigned Document, or in respect of any
part of or all the Indenture Estate, as it shall be entitled to take and as
shall be specified in such instructions; (b) take such action with respect to or
to preserve or protect the Indenture Estate (including the discharge of Liens)
as it shall be entitled to take and as shall be specified in such instructions;
and (c) waive, consent to, approve (as satisfactory to it) or disapprove all
matters required by the terms of any Operative Document to be satisfactory to
the Indenture Trustee. The Indenture Trustee may, and upon written instructions
from a Majority in Interest of Noteholders, the Indenture Trustee shall, execute
and file or cause to be executed and filed any financing statement (and any
continuation statement with respect to such financing statement) or any similar
instrument or document relating to the security interest or the assignment
created by this Indenture or granted by the Owner Lessor herein as may be
necessary to protect and preserve the security interest or assignment created by
or granted pursuant to this Indenture, to the extent otherwise entitled to do so
and as shall be specified in such instructions.

     Section 5.3.   Action Upon Payment of Lessor Notes or Termination of
Facility Lease. Subject to the terms of Section 5.4 hereof, upon payment in full
of the principal of and interest on all Lessor Notes then outstanding and all
other amounts then due all Noteholders hereunder, and all other sums secured
hereby or otherwise required to be paid hereunder, under the Participation
Agreement and under the Facility Lease, the Indenture Trustee shall execute and
deliver to, or as directed in writing by, the Owner Lessor and the Facility
Lessee an appropriate instrument in due form for recording, releasing the
Indenture Estate from the Lien of this Indenture.

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<PAGE>
Nothing in this Section 5.3 shall be deemed to expand the instances in which
the Owner Lessor is entitled to prepay the Lessor Notes.

     Section 5.4.   Compensation of the Indenture Trustee; Indemnification.

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

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

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

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

     (b)   The Indenture Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of the Indenture Estate except (a) as
required by the

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<PAGE>
terms of the Facility Lease, to the extent applicable to the Indenture Trustee
as assignee of the Owner Lessor, (b) in accordance with the powers granted to,
or the authority conferred upon, the Indenture Trustee pursuant to this
Indenture or in accordance with the express terms hereof or with written
instructions from a Majority in Interest of Noteholders in accordance with
Section 5.2 hereof.

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

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

     (b)   The Owner Lessor shall have the right, together with or
independently of the Indenture Trustee, (i) to receive from the Facility Lessee
and the Guarantor all notices, certificates, reports, filings, opinions of
counsel and other documents and all

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<PAGE>
information that the Facility Lessee is permitted or required to give or
furnish to the Owner Lessor or the Owner Participant, as the case may be,
pursuant to the Facility Lease or any other Operative Document; (ii) to inspect
the Facility and the records relating thereto pursuant to Section 12 of the
Facility Lease; (iii) to provide such insurance as may be permitted by Section
11 of the Facility Lease; (iv) to provide notices to the Facility Lessee or the
Guarantor to the extent otherwise permitted by the Operative Documents; and (v)
to perform for the Facility Lessee as provided in Section 20 of the Facility
Lease.

     (c)   So long as the Lessor Notes have not been accelerated pursuant to
Section 4.3(a) hereof (or, if accelerated, such acceleration has theretofore
been rescinded) or the Indenture Trustee shall not have exercised any of its
rights pursuant to Section 4 hereof to take possession of, foreclose, sell or
otherwise take control of all or any part of the Indenture Estate, the Owner
Lessor shall retain the right to the exclusion of the Indenture Trustee to
exercise the rights of the Owner Lessor under, and to determine compliance by
the Facility Lessee with, the provisions of Sections 10 (other than Section 10.3
thereof), 13, 14 and 15 of the Facility Lease; provided, however, that if a
Lease Indenture Event of Default shall have occurred and be continuing, the
Owner Lessor shall cease to retain such rights upon notice from the Indenture
Trustee stating that such rights shall no longer be retained by the Owner
Lessor;

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

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<PAGE>
that the Facility Lessee is in compliance with the provisions of any applicable
Assigned Document shall be binding upon or otherwise affect the rights
hereunder of the Indenture Trustee or any Noteholder on the one hand or the
Owner Lessor or the Owner Participant on the other hand;

     (e)   So long as the Lessor Notes have not been accelerated pursuant to
Section 4.3(a) hereof and the Indenture Trustee shall not have exercised any of
its rights pursuant to Section 4 hereof to take possession of, foreclose, sell
or otherwise take control of all or any part of the Indenture Estate, the Owner
Lessor shall have the right, together with the Indenture Trustee and to the
extent permitted by the Operative Documents and Applicable Law, to seek specific
performance of the covenants of the Facility Lessee under the Operative
Documents relating to the protection, insurance, maintenance, possession, use
and return of the Property Interest, the performance by the Facility Lessee of
the Owner Lessor's obligations under the South Point Ground Lease, the exercise
of any renewal or extension rights with respect to the South Point Ground Lease
and any action pursuant to Sections 5.20 or 13.3 of the Participation Agreement
(subject to the conditions set forth in Section 5.20 or 13.3, as applicable, of
the Participation Agreement); and

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

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

     Section 5.7.   Restrictions on Dealing with Indenture Estate. Except as

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<PAGE>
provided in the Operative Documents, but subject to the terms of this Indenture,
the Owner Lessor shall not use, operate, store, lease, control, manage, sell,
dispose of or otherwise deal with the Facility, the Facility Site, any part of
the Facility Site or any other part of the Indenture Estate.

     Section 5.8.   Filing of Financing Statements and Continuation Statements.
Pursuant to Section 5.10 of the Participation Agreement, the Facility Lessee
has covenanted to maintain the priority of the Lien of this Indenture on the
Indenture Estate. The Owner Lessor hereby expressly authorizes the Indenture
Trustee to prepare, file, record, obtain, execute and deliver, from time to
time, such financing statements, continuation statements, control agreements
and recognition agreements as Indenture Trustee shall deem appropriate. The
Owner Lessor hereby further authorizes any account holder or bank or financial
institution to execute and deliver from time to time such control agreements
and recognition agreements as shall be requested or required by Indenture
Trustee. The Indenture Trustee shall, at the written request and expense of the
Facility Lessee, as provided in the Participation Agreement, execute and
deliver to the Facility Lessee and the Facility Lessee will file or record, if
not already filed or recorded, such financing statements or other documents and
such continuation statements or other documents with respect to financing
statements or other documents previously filed relating to the Lien created by
this Indenture in the Indenture Estate as may be supplied to the Indenture
Trustee by the Facility Lessee. At any time and from time to time, upon the
request of the Facility Lessee or the Indenture Trustee, at the expense of the
Facility Lessee (and upon receipt of the form of document so to be executed),
the Owner Lessor shall promptly and duly execute and deliver any and all such
further instruments and documents as the Facility Lessee or the Indenture
Trustee may request in obtaining the full benefits of the security interest and
assignment created or intended to be created hereby and of the rights and
powers herein granted. Upon the reasonable instructions (which instructions
shall be accompanied by the form of document to be filed) at any time and from
time to time of the Facility Lessee or the Indenture Trustee, the Owner Lessor
shall authorize, execute, file or record any financing statement (and any
continuation statement with respect to any such financing statement), and any
other document relating to the security interest and assignment created by this
Indenture as may be specified in such instructions. In addition, the Indenture
Trustee and the Owner Lessor will authorize or execute such continuation
statements with respect to financing statements and other documents relating to
the Lien created by this Indenture in the Indenture Estate as may be specified
from time to time in written instructions of any Noteholder (which instructions
may, by their terms, be operative only at a future date and which shall be
accompanied by the form of such continuation statement or other document to be
filed). Neither the Indenture Trustee nor, except as

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<PAGE>
otherwise herein expressly provided, the Owner Lessor shall have responsibility
for the protection, perfection or preservation of the Lien created by this
Indenture.

                               SECTION 6.
                   INDENTURE TRUSTEE AND OWNER LESSOR

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

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

          (ii)   The Indenture Trustee shall not be liable in its individual
     capacity for an error of judgment made in good faith by a Responsible
     Officer or other

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<PAGE>
     officers of the Indenture Trustee, unless it shall be proven that the
     Indenture Trustee was negligent in ascertaining the pertinent facts;

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

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

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

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

     Section 6.2.   Absence of Certain Duties. Except in accordance with
written instructions furnished pursuant to Section 5.2 hereof and except as
provided in Section 5.5 and 5.8 hereof, the Indenture Trustee shall have no duty
(a) to see to any registration, recording or filing of any Operative Document
(or any financing or continuation statements in respect thereto) or to see to
the maintenance of any such

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<PAGE>
registration, recording or filing, (b) to see to any insurance on the
Facilities or the Facilities or to effect or maintain any such insurance, (c)
except as otherwise provided in Section 5.5 hereof or in Section 10 of the
Participation Agreement, to see to the payment or discharge of any Tax or any
Lien of any kind owing with respect to, or assessed or levied against, any part
of the Indenture Estate, (d) to confirm or verify the contents of any report,
notice, request, demand, certificate, financial statement or other instrument
of the Facility Lessee, (e) to inspect the Facility at any time or ascertain or
inquire as to the performance or observance of any of the Facility Lessee's
covenants with respect to the Facility or (f) to exercise any of the trusts or
powers vested in it by this Indenture or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request, order or direction
of any of the Noteholders, pursuant to the provisions of this Indenture, unless
such Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby (which in the case of the Majority in Interest of
Noteholders will be deemed to be satisfied by a letter agreement with respect
to such costs from such Majority in Interest of Noteholders).  Notwithstanding
the foregoing, the Indenture Trustee shall furnish to each Noteholder and to
the Owner Lessor and the Owner Participant promptly upon receipt thereof
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and other instruments furnished to the Indenture Trustee
hereunder or under any of the Operative Documents unless the Indenture Trustee
shall reasonably believe that each such Noteholder, the Owner Lessor and the
Owner Participant shall have received copies thereof.

     Section 6.3.   Representations and Warranties.

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

     (b)   NEITHER THE OWNER LESSOR NOR THE INDENTURE TRUSTEE MAKES, NOR SHALL
BE DEEMED TO HAVE MADE (i) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
AS TO THE TITLE, VALUE, COMPLIANCE WITH PLANS OR SPECIFICATIONS, QUALITY,
DURABILITY, SUITABILITY, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR
FITNESS FOR USE OR FOR ANY PARTICULAR PURPOSE OF THE FACILITY, OR ANY PART
THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED,
WITH RESPECT TO THE FACILITIES OR ANY OTHER PART OF THE INDENTURE ESTATE, except
that the Owner Lessor represents and warrants that on

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the Closing Date it shall have received whatever title or interest to the
Undivided Interests and the Facility Site as were conveyed to it by the
Facility Lessee and that on the Closing Date the Undivided Interests shall be
free of Owner Lessor's Liens and the Owner Participant's Liens; or (ii) any
representation or warranty as to the validity, legality or enforceability of
this Indenture, the Lessor Notes or any of the other Operative Documents, or as
to the correctness of any statement contained in any thereof, except that each
of the Owner Lessor and the Indenture Trustee represents and warrants that this
Indenture and the Participation Agreement have been, and, in the case of the
Owner Lessor, the other Operative Documents to which it is or is to become a
party have been or will be, executed and delivered by one of its officers who
is and will be duly authorized to execute and deliver such document on its
behalf.

     Section 6.4.   No Segregation of Moneys; No Interest. All moneys and
securities deposited with and held by the Indenture Trustee under this Indenture
for the purpose of paying, or securing the payment of, the principal of or
Make-Whole Amount or interest on the Lessor Notes shall be held in trust. Except
as specifically provided herein or in the Facility Lease, any moneys received by
the Indenture Trustee hereunder need not be segregated in any manner except to
the extent required by Applicable Law and may be deposited under such general
conditions as may be prescribed by Applicable Law, and neither the Owner Lessor
nor the Indenture Trustee shall be liable for any interest thereon; provided,
however, subject to Section 6.5 hereof, that any payments received or applied
hereunder by the Indenture Trustee shall be accounted for by the Indenture
Trustee so that any portion thereof paid or applied pursuant hereto shall be
identifiable as to the source thereof to the extent known to the Indenture
Trustee.

     Section 6.5.   Reliance; Agents; Advice of Experts. The Indenture Trustee
shall be authorized and protected and incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed to be
genuine and believed to be signed by the proper party or parties. The Indenture
Trustee may accept in good faith a certified copy of a resolution of the
managing member (or equivalent body) of the Facility Lessee as conclusive
evidence that such resolution has been duly adopted by such Board and that the
same is in full force and effect. As to the amount of any payment to which any
Noteholder is entitled pursuant to clause "Third" of Section 3.2 or clause
"Fourth" of Section 3.3 hereof, and as to the amount of any payment to which any
other Person is entitled pursuant to Section 3.5 or Section 3.7 hereof, the
Indenture Trustee for all purposes hereof may rely on and shall be authorized
and protected in acting or refraining from acting upon an Officer's Certificate
of such

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Noteholder or other Person, as the case may be. As to any fact or matter
the manner of ascertainment of which is not specifically described herein, the
Indenture Trustee for all purposes hereof may rely on an Officer's Certificate
of the Owner Lessor or the Facility Lessee or a Noteholder as to such fact or
matter, and such certificate shall constitute full protection to the Indenture
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon. The Indenture Trustee shall have the right to request
instructions from the Owner Lessor or the Majority in Interest of Noteholders
with respect to taking or refraining from taking any action in connection with
the Lease Indenture or any other Operative Document to which it is a party, and
shall be entitled to act or refrain from taking such action unless and until the
Indenture Trustee shall have received written instructions from the Owner Lessor
or the Majority in Interest of Noteholders, and the Indenture Trustee shall not
incur liability by reason of so acting (except as provided in Section 6.1) or
refraining from acting. In the administration of the trusts hereunder, the
Indenture Trustee may execute any of the trusts or powers hereof and perform its
powers and duties hereunder directly or through agents or attorneys and may, at
the expense of the Indenture Estate (but subject to the priorities of payment
set forth in Section 3 hereof), consult with independent skilled Persons to be
selected and retained by it (other than Persons regularly in its employ) as to
matters within their particular competence, and the Indenture Trustee shall not
be liable for anything done, suffered or omitted in good faith by it in
accordance with the advice or opinion, within such Person's area of competence,
of any such Person, so long as the Indenture Trustee shall have exercised
reasonable care in selecting such Person.

                                   SECTION 7.
                          SUCCESSOR INDENTURE TRUSTEES
                              AND SEPARATE TRUSTEES

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

     (a)   Resignation or Removal. Either of the Indenture Trustee or the
Account Bank or any successor thereto may resign at any time with or without
cause by giving at least thirty (30) days' prior written notice to the Owner
Lessor, the Owner Participant, the Facility Lessee and each Noteholder, such
resignation to be effective on the acceptance of appointment by the successor
Indenture Trustee or Account Bank pursuant to the provisions of subsection (b)
below. In addition, a Majority in Interest of Noteholders may at any time
remove the Indenture Trustee or the Account Bank with or without cause by an
instrument in writing delivered to the Owner Lessor, the Owner Participant, the
Indenture Trustee and the Account Bank, and the

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

     (b)   Acceptance of Appointment. Any successor Indenture Trustee or
Account Bank shall execute and deliver to the predecessor Indenture Trustee or
Account Bank, the Owner Participant, the Owner Lessor and all Noteholders an
instrument accepting such appointment and thereupon such successor Indenture
Trustee or Account Bank, without further act, shall become vested with all the
estates, properties, rights, powers and duties of the predecessor Indenture
Trustee or Account Bank hereunder in the trusts hereunder applicable to it with
like effect as if originally named the Indenture Trustee or Account Bank
herein; but nevertheless, upon the written request of such successor Indenture
Trustee or Account Bank or a Majority in Interest of Noteholders, such
predecessor Indenture Trustee or Account Bank shall execute and deliver an
instrument transferring to such successor Indenture Trustee or Account Bank,
upon the trusts herein expressed applicable to it, all the estates, properties,
rights and powers of such predecessor Indenture Trustee or Account Bank, and
such predecessor Indenture Trustee or Account Bank shall duly assign, transfer
deliver and pay over to such successor Indenture Trustee all moneys or other
property then held by such predecessor Indenture Trustee or Account Bank
hereunder. To the extent required by Applicable Law or upon request of the
successor Indenture Trustee or Account Bank, the Owner Lessor shall execute any
and all documents confirming the vesting of such estates, properties, rights
and powers in the successor Indenture Trustee or Account Bank.

     (c)   Qualifications. Any successor Indenture Trustee or Account Bank,
however appointed, shall be a trust company or bank with trust powers (i) which
(A) has a combined capital and surplus of at least $150,000,000, or (B) is a
direct or

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

     (d)   Appointment of Account Bank. The Indenture Trustee and each
Noteholder hereby irrevocably designate and appoint State Street Trust Bank and
Trust Company of Connecticut, National Association as the Account Bank under
this Indenture (the "Account Bank"). The Account Bank hereby agrees to act as
"securities
intermediary" (within the meaning of Section 8-102(a)(14) of the UCC) with
respect to the Indenture Trustee's Account. The Owner Lessor hereby
acknowledges that the Account Bank shall act as securities intermediary with
respect to the Indenture Trustee's Account pursuant to this Indenture. The
Account Bank shall not have duties or responsibilities except those expressly
set forth in Sections 3.11 and 3.12 of this Indenture. The Indenture Trustee,
at the written direction of a Majority in Interest of Noteholders, may remove
and replace the Account Bank pursuant to the terms of Section 7.1(a) and direct
such Account Bank according to the terms of this Indenture.

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

     Section 7.2.   Appointment of Additional and Separate Trustees.

     (a)   Appointment. Whenever (i) the Indenture Trustee shall deem it
necessary or prudent in order to conform to any law of any applicable
jurisdiction or to make any claim or bring any suit with respect to or in
connection with the

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<PAGE>
Indenture Estate, this Indenture, the Facility Lease, the Lessor Notes or any
of the transactions contemplated by the Operative Documents, (ii) the Indenture
Trustee shall be advised by counsel, satisfactory to it, that it is so
necessary or prudent in the interest of the Noteholders or (iii) a Majority in
Interest of Noteholders deems it so necessary or prudent and shall have
requested in writing the Indenture Trustee to do so, then in any such case the
Indenture Trustee shall execute and deliver from time to time all instruments
and agreements necessary or proper to constitute another bank or trust company
or one or more Persons approved by the Indenture Trustee either to act as
additional trustee or trustees of all or any part of the Indenture Estate,
jointly with the Indenture Trustee, or to act as separate trustee or trustees
of all or any part of the Indenture Estate, in any such case with such powers
as may be provided in such instruments or agreements, and to vest in such bank,
trust company or Person as such additional trustee or separate trustee, as the
case may be, any property, title, right or power of the Indenture Trustee
deemed necessary or advisable by the Indenture Trustee, subject to the
remaining provisions of this Section 7.2. The Owner Lessor hereby consents to
all actions taken by the Indenture Trustee under the provisions of this Section
7.2 and agrees, upon the Indenture Trustee's request, to join in and execute,
acknowledge and deliver any or all such instruments or agreements; and the
Owner Lessor hereby makes, constitutes and appoints the Indenture Trustee its
agent and attorney-in-fact for it and in its name, place and stead to execute,
acknowledge and deliver any such instrument or agreement in the event that the
Owner Lessor shall not itself execute and deliver the same within fifteen (15)
days after receipt by it of such request so to do; provided, however, that the
Indenture Trustee shall exercise due care in selecting any additional or
separate trustee if such additional or separate trustee shall not be a Person
possessing trust powers under Applicable Law. If at any time the Indenture
Trustee shall deem it no longer necessary or prudent in order to conform to any
such law or take any such action or shall be advised by such counsel that it is
no longer so necessary or prudent in the interest of the Noteholders or in the
event that the Indenture Trustee shall have been requested to do so in writing
by a Majority in Interest of Noteholders, the Indenture Trustee shall execute
and deliver all instruments and agreements necessary or proper to remove any
additional trustee or separate trustee. In such connection, the Indenture
Trustee may act on behalf of the Owner Lessor to the same extent as is provided
above. Notwithstanding anything contained to the contrary in this Section
7.2(a), to the extent the laws of any jurisdiction preclude the Indenture
Trustee from taking any action hereunder either alone, jointly or through a
separate trustee under the direction and control of the Indenture Trustee, the
Owner Lessor, at the instruction of the Indenture Trustee, shall appoint a
separate trustee for such jurisdiction, which separate trustee shall have full
power and authority to take all action hereunder as to matters relating to such
jurisdiction without the consent of the Indenture Trustee, but not subject to
the same limitations in

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any exercise of his power and authority as those to which the Indenture
Trustee is subject.

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

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

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

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

     Section 8.1.   Supplemental Indenture and Other Amendment With Consent;
Conditions and Limitations. At any time and from time to time, subject to
Sections

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8.2 and 8.3 hereof, but only upon the written direction of a Majority in
Interest of Noteholders and the written consent of the Owner Lessor, (a) the
Indenture Trustee shall execute an amendment or supplement hereto for the
purpose of adding provisions to, or changing or eliminating provisions of, this
Indenture as specified in such request, and (b) the Indenture Trustee, as the
case may be, shall enter into or consent to such written amendment of or
supplement to any Assigned Document as each other party thereto may agree to
and as may be specified in such request, or execute and deliver such written
waiver or modification of or consent to the terms of any such agreement or
document as may be specified in such request; provided, however, that without
the consent of the Noteholders representing one hundred percent (100%) of the
outstanding principal amount of the Lessor Notes, such percentage to be
determined in the same manner as provided in the definition of the term
"Majority in Interest of Noteholders," no such supplement to or amendment of
this Indenture or any Assigned Document, or waiver or modification of or
consent to the terms hereof or thereof, shall (i) modify the definition of the
terms "Majority in Interest of Noteholders" or reduce the percentage of
Noteholders required to take or approve any action hereunder, (ii) change the
amount or the time of payment of any amount owing or payable under any Lessor
Note or change the rate or manner of calculation of interest payable on any
Lessor Note, (iii) alter or modify the provisions of Section 3 hereof with
respect to the manner of payment or the order of priorities in which
distributions thereunder shall be made as between the Noteholders and the Owner
Lessor, (iv) reduce the amount (except to any amount as shall be sufficient to
pay the aggregate principal of, Make-Whole Amount, if any, and interest on all
outstanding Lessor Notes) or extend the time of payment of Periodic Rent or
Termination Value except as expressly provided in Section 3.5 of the Facility
Lease, or change any of the circumstances under which Periodic Rent or
Termination Value is payable, (v) consent to any assignment of the Facility
Lease if in connection therewith the Facility Lessee will be released from its
obligation to pay Periodic Rent and Termination Value, except as expressly
provided in Section 13 of the Participation Agreement, or release the Facility
Lessee of its obligation to pay Periodic Rent or Termination Value or change
the absolute and unconditional character of such obligations as set forth in
Section 9 of the Facility Lease; (vi) consent to any release of the Guarantor
under Section 8.4 of the Calpine Guaranty or (vii) deprive the Indenture
Trustee of the Lien on the Indenture Estate or permit the creation of any Lien
on the Indenture Estate ranking equally or prior to the Lien of the Indenture
Trustee, except for Permitted Liens.

     Section 8.2.   Supplemental Indentures and other Amendments Without
Consent. Without the consent of any Noteholders but subject to the provisions
of Section 8.3, and only after notice thereof shall have been sent to the
Noteholders and

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<PAGE>
with the consent of the Owner Lessor, the Indenture Trustee shall enter into
any indenture or indentures supplemental hereto or execute any amendment,
modification, supplement, waiver or consent with respect to any other Operative
Document (a) to evidence the succession of another Person as a Lessor Manager
or the appointment of a co-manager in accordance with the terms of the LLC
Agreement, or to evidence the succession of a successor as the Indenture
Trustee hereunder, the removal of the Indenture Trustee or the appointment of
any separate or additional trustee or trustees, in each case if done pursuant
to the provisions of Section 7 hereof and to define the rights, powers, duties
and obligations conferred upon any such separate trustee or trustees or
co-trustee or co-trustees, (b) to correct, confirm or amplify the description
of any property at any time subject to the Lien of this Indenture or to convey,
transfer, assign, mortgage or pledge any property to or with the Indenture
Trustee, (c) to provide for any evidence of the creation and issuance of any
Additional Lessor Notes pursuant to, and subject to the conditions of, Section
2.12 and to establish the form and the terms of such Additional Lessor Notes,
(d) to cure any ambiguity in, to correct or supplement any defective or
inconsistent provision of, or to add to or modify any other provisions and
agreements in, this Indenture or any other Operative Document in any manner
that will not in the judgment of the Indenture Trustee materially adversely
affect the interests of the Noteholders, (e) to grant or confer upon the
Indenture Trustee for the benefit of the Noteholders any additional rights,
remedies, powers, authority or security which may be lawfully granted or
conferred and which are not contrary or inconsistent with this Indenture, (f)
to add to the covenants or agreements to be observed by the Facility Lessee or
the Owner Lessor and which are not contrary to this Indenture, to add Indenture
Events of Defaults for the benefit of Noteholders or surrender any right or
power of the Owner Lessor, provided it has consented thereto, (g) to effect the
assumption of all or, to the extent otherwise provided hereunder, part of the
Lessor Notes by the Facility Lessee, provided that the supplemental indenture
will contain all of the covenants applicable to the Facility Lessee contained
in the Facility Lease and the Participation Agreement for the benefit of the
Indenture Trustees or the holders of such Lessor Notes, such that the Facility
Lessee's obligations contained therein, if applicable in the event that the
Facility Lease are terminated, will continue to be in full force and effect,
(h) to comply with requirements of the SEC, any applicable law, rules or
regulations of any exchange or quotation system on which the Certificates are
listed, or any regulatory body, (i) to modify, eliminate or add to the
provisions of any Operative Documents to such extent as shall be necessary to
qualify or continue the qualification of this Lease Indenture or the Pass
Through Trust Agreements (including any supplements thereto) under the Trust
Indenture Act, or similar federal statute enacted after the Closing Date, and
to add to this Indenture such other provisions as may be expressly required or
permitted by the Trust Indenture Act of 1939 (if such qualification is
required), and (j) to effect

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<PAGE>
any indenture or indentures supplemental hereto or any amendment, modification,
supplement, waiver or consent with respect to any other Operative Document,
provided such supplemental indenture, amendment, modification, supplement,
waiver or consent shall not reasonably be expected to materially and adversely
affect the interest of the Noteholders; provided, however, that no such
amendment, modification, supplement, waiver or consent contemplated by this
Section 8.2 shall, without the consent of the holder of each then outstanding
Lessor Note, cause any of the events specified in clauses (i) through (v) of
the first sentence of Section 8.1 hereof to occur; and provided, further, that
no such amendment, modification, supplement, waiver or consent contemplated by
this Section 8.2 shall, without the consent of the holder of a Majority in
Interest of Noteholders, modify the provisions of Sections 5.1, 5.2, 5.6, 5.14,
5.31, 6, or 13.1 of the Participation Agreement or Section 19 of the Lease, or
modify in any material respect the provisions of the Calpine Guaranty (other
than, in each case, any amendment, modification, supplement, waiver or consent
having no adverse affect on the interest of the Noteholders).

     Section 8.3.   Conditions to Action by the Indenture Trustee. If in the
opinion of the Indenture Trustee any document required to be executed pursuant
to the terms of Section 8.1 or 8.2 or the election referred to in Section 9.13
hereof adversely affects any immunity or indemnity in favor of the Indenture
Trustee under this Indenture or the Participation Agreement, or would
materially increase its administrative duties or responsibilities hereunder or
thereunder or may result in personal liability for it (unless it shall have
been provided an indemnity satisfactory to the Indenture Trustee), the
Indenture Trustee may in its discretion decline to execute such document or the
election. With every such document and election, the Indenture Trustee shall be
furnished with evidence that all necessary consents have been obtained and with
an opinion of counsel that such document complies with the provisions of this
Indenture, does not deprive the Indenture Trustee or the holders of the Lessor
Notes of the benefits of the Lien hereby created on any property subject hereto
or of the assignments contained herein (except as otherwise consented to in
accordance with Section 8.1 hereof) and that all consents required by the terms
hereof in connection with the execution of such document or the making of such
election have been obtained. The Indenture Trustee shall be fully authorized
and protected in relying on such opinion.

                                   SECTION 9.
                                 MISCELLANEOUS

     Section 9.1.   Surrender, Defeasance and Release.

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

     (b)   Release.

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

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

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

     Section 9.3.   Appointment of the Indenture Trustee as Attorney; Further

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

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

     Section 9.5.   Notices; Furnishing Documents, etc. Unless otherwise
expressly specified or permitted by the terms hereof, all communications and
notices provided for herein to a party hereto shall be in writing or by a
telecommunications device capable of creating a written record, and any such
notice shall become effective (a) upon personal delivery thereof, including by
overnight mail or courier service, (b) in the case of notice by United States
mail, certified or registered, postage prepaid, return receipt requested, upon
receipt thereof, or (c) in the case of notice by such a telecommunications
device, upon transmission thereof, provided such transmission is promptly
confirmed by either of the methods set forth in clauses (a) and (b) above, in
each case addressed to such party and copy party at its address set forth below
or at such other address as such party or copy party may from time to time
designate by written notice to the other party:

     If to the Owner Lessor:

          Wells Fargo Bank Northwest, National Association
          MAC U1254-031

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

     with a copy to the Owner Participant:

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

          and

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

     If to the Indenture Trustee:

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

          with a copy to:

          State Street Bank and Trust Company of California,
          National Association
          633 West 5th Street, 12th Floor

                                       74
<PAGE>
          Los Angeles, CA 90071
          Telephone: (213) 362-7373
          Facsimile:  (213) 362-7357
          Attention:  Corporate Trust Department

     If to the Facility Lessee:

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

          with a copy to:

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

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

     Section 9.7.   Limitation of Liability. It is expressly understood and
agreed by the parties hereto that (a) this Indenture is executed and delivered
by Wells Fargo Bank Northwest, National Association ("Wells Fargo"), not
individually or personally but solely as trustee of the Owner Lessor under the
LLC Agreement, in the exercise of the powers and authority conferred and vested
in it pursuant thereto, (b) each of the representations, undertakings and
agreements herein made on the part of the Owner Lessor is made and intended not
as personal representations, undertakings and agreements by Wells Fargo, but is
made and intended for the purpose for binding only the Owner Lessor, (c)
nothing herein contained shall be construed as creating any liability on Wells
Fargo, individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly

                                       75
<PAGE>
waived by the parties hereto or by any Person claiming by, through or under
the parties hereto and (d) under no circumstances shall Wells Fargo, be
personally liable for the payment of any indebtedness or expenses of the Owner
Lessor or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Owner Lessor
under this Indenture.

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

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

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

     Section 9.11.   Headings and Table of Contents. The headings of the
sections of this Indenture and the Table of Contents are inserted for purposes
of convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.

     Section 9.12.   Governing Law. Except for those provisions relating to the
creation, perfection, enforcement, interpretation and foreclosure of the deed
of trust lien and security agreement covering the real property described on
Exhibit A hereto (the "Real Property") and fixtures thereon, the appointment
and actions of a receiver and related provisions regarding enforcement of liens
and security agreements relating to the Real Property and fixtures thereon,
which provisions of this Indenture shall be governed by, enforced in accordance
with and interpreted according to Arizona law (excluding its choice of law
provisions), and except to the extent that the laws of the United States of
America (hereinafter "Federal Law") require the application of Federal Law (in
which limited case(s) Federal Law shall apply to those issues or matters as to
which Federal Law is required to apply), this Indenture and the Lessor Notes
shall be in all other respects governed by and construed in accordance with the
laws of the State of New York, including all matters of construction, validity
and

                                       76
<PAGE>
performance (without giving effect to the conflicts of laws provisions
thereof, other than New York General Obligation Law Section 5-1401), except to
the extent mandatory choice of law rules require the application of laws of
another jurisdiction. Regardless of any provision in any other agreement, for
purposes of the Uniform Commercial Code (as in effect from time to time in any
jurisdiction including the State of New York), the "Securities Intermediary's
Jurisdiction" of the Account Bank with respect to the Indenture Trustee's
Account is the State of New York.

     Section 9.13.   Reorganization Proceedings with Respect to the Lessor
Estate. If (a) the Lessor Estate becomes a debtor subject to the reorganization
provisions of Title 11 of the United States Code, or any successor provisions,
(b) pursuant to such reorganization provisions the Owner Participant is
required by reason of the Owner Participant's being held to have recourse
liability that it would not otherwise have had under Section 2.5 hereof to the
debtor or the trustee of the debtor, directly or indirectly, to make payment on
account of any amount payable as principal or interest on the Lessor Notes and
(c) any Noteholder or the Indenture Trustee actually receives any Excess Amount
(as hereinafter defined) which reflects any payment by the Owner Participant on
account of clause (b) above, then such Noteholder or the Indenture Trustee, as
the case may be, shall promptly refund such Excess Amount, without interest, to
the Owner Participant after receipt by such Noteholder or the Indenture
Trustee, as the case may be, of a written request for such refund by the Owner
Participant (which request shall specify the amount of such Excess Amount and
shall set forth in detail the calculation thereof). For purposes of this
Section 9.13, "Excess Amount" means the amount by which such payment exceeds
the amount which would have been received by such holder and the Indenture
Trustee in respect of such principal or interest if the Owner Participant had
not become subject to the recourse liability referred to in clause (b) above.
Nothing contained in this Section 9.13 shall prevent the Indenture Trustee or
any Noteholder from enforcing any personal recourse obligations (and retaining
the proceeds thereof) of the Owner Participant under the Participation
Agreement.

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

                                       77
<PAGE>
represented by the Lessor Notes in circumstance in which such Noteholders would
not have recourse under this Indenture if the Lessor Estate had not become a
debtor under the Bankruptcy Code.

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

     Any Noteholder which is organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date such Noteholder becomes a
Noteholder, (a) so notify the Indenture Trustee, (b) (i) provide the Indenture
Trustee with Internal Revenue Service form W-8 BEN, W-8 ECI or W-9, as
appropriate, or (ii) notify the Indenture Trustee that it is not entitled to an
exemption from United States withholding tax or a reduction in the rate thereof
on payments of interest. Any such Noteholder agrees by its acceptance of a
Lessor Note, on an ongoing basis, to provide like certification for each
taxable year and to notify the Indenture Trustee should subsequent
circumstances arise affecting the information provided the Indenture Trustee in
clauses (a) and (b) above. The Indenture Trustee shall be fully protected in
relying upon, and each Noteholder by its acceptance of a Lessor Note hereunder

                                       78
<PAGE>
agrees to indemnify and hold the Indenture Trustee harmless against all claims
or liability of any kind arising in connection with or related to the Indenture
Trustee's reliance upon any such documents, forms or information provided by
such Noteholder to the Indenture Trustee. In addition, if the Indenture Trustee
has not withheld taxes on any payment made to any Noteholder, and the Indenture
Trustee is subsequently required to remit to any taxing authority any such
amount not withheld, such Noteholder shall return such amount to the Indenture
Trustee upon written demand by the Indenture Trustee. The Indenture Trustee
shall be liable only for direct (but not consequential) damages to any
Noteholder due to the Indenture Trustee's violation of the Code and only to the
extent such liability is caused by the Indenture Trustee's violation of the
Code and only to the extent such liability is caused by the Indenture Trustee's
failure to act in accordance with its standard of care under this Lease
Indenture.

     Section 9.15.   Fixture Financing Statement. This Indenture also is
intended to serve as a fixture filing financing statement and as a financing
statement with respect to goods or items, or other personal property that is or
will be attached to the Real Property, as permitted under the Arizona Uniform
Commercial Code and the Owner Lessor hereby authorizes this Indenture to so
serve and to be filed and/or recorded as such. In addition, a photographic,
electronic or other copy of this Indenture and/or any financing statement
related hereto shall be sufficient for filing and/or recording as a financing
statement. In connection therewith, the following information is provided:

     (a)   Name and address of Debtor:

           South Point OL-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

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

           State Street Bank and Trust Company of Connecticut,
           National Association,
           as Indenture Trustee

                                       79
<PAGE>
           225 Asylum Street, Goodwin Square
           Hartford, CT 06103
           Telephone: (860) 244-1822
           Facsimile:  (860) 244-1889
           Attention:  Corporate Trust Department

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

     (d)   Recording: This Indenture is to be recorded and/or filed in the
official real estate or other records of the County of Mohave, State of
Arizona, and in the records of the Bureau of Indian Affairs in Albuquerque, New
Mexico.

                                       80
<PAGE>
     (e)   Type of Filing: This is a commercial filing and NOT a consumer
filing under the UCC as enacted and in effect in the State of Arizona.

              (Remainder of Page Intentionally Left Blank)

                                       81
<PAGE>
     IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed on the day and year first above written.

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

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

                    By: ________________________________________________________
                            Name:
                            Title:

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

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

     The foregoing instrument was acknowledged before me this ___ day of
October 2001, by _________________________, the _______________________of Wells
Fargo Bank Northwest, National Association, not in its individual capacity but
solely as the Lessor Manager of South Point OL-1, LLC, a Delaware limited
liability company, as the Owner Lessor/Trustor (the "Owner Lessor"), to be the
free act and deed on behalf of the national banking association as the Lessor
Manager of the Owner Lessor under the LLC Agreement dated as of __________,
2001.

                                Notary Public

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

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

                                Notary Public

My Commission Expires
<PAGE>
                                                                      EXHIBIT A
                                                             TO LEASE INDENTURE

                             DESCRIPTION OF FACILITY SITE

The East half (E1/2) of Section 8, Township 17 North, Range 21 West of the Gila
and Salt River Base and Meridian, Mohave County, Arizona.

Reserving therefrom, all mineral rights on, under or within said land, as
reserved by the Fort Mojave Indian Tribe.
<PAGE>
                                                                      EXHIBIT B
                                                             TO LEASE INDENTURE

                  FORM OF SOUTH POINT LESSOR NOTE SERIES [A][B]

                              SOUTH POINT OL-1, LLC
                NONRECOURSE PROMISSORY NOTE (SOUTH POINT) DUE IN
                      A SERIES OF INSTALLMENTS OF PRINCIPAL
                            WITH FINAL PAYMENT DATE
                            OF MAY 30, [2012][2019]

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

                                                 Issued at: New York, New York
                                                  Issue Date: October __, 2001

$[             ]

     SOUTH POINT OL-1, LLC, a Delaware limited liability company (herein called
the "Owner Lessor", which term includes any successor person under the
Collateral Trust Indenture hereinafter referred to), hereby promises to pay to
State Street Bank and Trust Company of Connecticut, National Association, in
its capacity as pass through trustee of [the South Point, Broad River and
RockGen Series A Trust] [the South Point, Broad River and RockGen Series B
Trust], (the "Pass Through Trustee") or its registered assigns, the principal
sum of $[_____], which is due and payable in a series of installments of
principal with a final payment date of May 30, [2012][2019], as provided below,
together with interest at the rate of [___]% per annum on the principal
remaining unpaid from time to time from and including the Issue Date until paid
in full. Interest on the outstanding principal amount under this Note shall be
due and payable in arrears semiannually at the rate specified above, commencing
on May 30, 2002, and on each May 30 and November 30 thereafter until the
principal of this Note is paid in full or made available for payment. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months.

     The principal of this Note shall be due and payable in installments on
each of the dates set forth on Schedule I hereto. The installment of principal
payable on any such date shall be in an aggregate amount equal to the product
of the Principal Portion set forth on Schedule I multiplied by the percentage
set forth on Schedule I under the column

                                       B-1-1
<PAGE>
headed "Percentage of Principal Amount Payable" for such date unless the
Principal Portion has been prepaid; provided, that the final installment of
principal shall be equal to the then unpaid principal balance of this Note.

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

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

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

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

     The principal of and premium, if any, and interest on this Note shall be
paid by the Indenture Trustee, without any presentment or surrender of this
Note, except that, in

                                       B-1-2
<PAGE>
the case of the final payment in respect of this Note, this Note shall be
surrendered to the Indenture Trustee, by mailing a check for the amount then
due and payable, in New York Clearing House funds, to the Noteholder, at the
last address of the Noteholder appearing on the Note Register, or by whichever
of the following methods specified by notice from the Noteholder to the
Indenture Trustee: (a) by crediting the amount to be distributed to the
Noteholder to an account maintained by the Noteholder with the Indenture
Trustee, (b) by making such payment to the Noteholder in immediately available
funds at the Indenture Trustee Office, or (c) by transferring such amount in
immediately available funds for the account of the Noteholder to the banking
institution having bank wire transfer facilities as shall be specified by the
Noteholder, such transfer to be subject to telephonic confirmation of payment.
All payments due with respect to this Note shall be made (i) as soon as
practicable prior to the close of business on the date the amounts to be
distributed by the Indenture Trustee are actually received by the Indenture
Trustee if such amounts are received by 12:00 noon, New York City time, on a
Business Day or (ii) on the next succeeding Business Day if received after such
time or if received on any day other than a Business Day. Prior to due
presentment for registration of transfer of this Note, the Owner Lessor and the
Indenture Trustee may deem and treat the Person in whose name this Note is
registered on the Note Register as the absolute owner and holder of this Note
for the purpose of receiving payment of all amounts payable with respect to
this Note and for all other purposes, and neither the Owner Lessor nor the
Indenture Trustee shall be affected by any notice to the contrary. All payments
made on this Note in accordance with the provisions of this paragraph shall be
valid and effective to satisfy and discharge the liability on this Note to the
extent of the sums so paid and neither the Indenture Trustee nor the Owner
Lessor shall have any liability in respect of such payment.

     The holder hereof, by its acceptance of this Note, agrees that each
payment received by it hereunder shall be applied in the manner set forth in
Section 2.7 of the Collateral Trust Indenture, which provides that each payment
on the Note shall be applied as follows: first, to the payment of accrued
interest (including interest on overdue principal and the Make Whole Amount, if
any, and, to the extent permitted by Applicable Law, overdue interest) on this
Note to the date of such payment; second, to the payment of the principal
amount of, and the Make Whole Amount, if any, on this Note then due (including
any overdue installments of principal) thereunder; and third, to the extent
permitted by Section 2.10 of the Collateral Trust Indenture, the balance, if
any, remaining thereafter, to the payment of the principal amount of, and the
Make Whole Amount, if any, on this Note.
     This Note is the Note referred to in the Collateral Trust Indenture as
the "Lessor Note". The Collateral Trust Indenture permits the issuance of
additional notes ("Additional Lessor Notes"), as provided in Section 2.12 of
the Collateral Trust

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

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

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

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

     In case a Collateral Trust Indenture Event of Default shall occur and be

                                       B-1-4
<PAGE>
continuing, the unpaid balance of the principal of this Note together with all
accrued but unpaid interest thereon may, subject to certain rights of the Owner
Lessor and the Owner Participant contained or referred to in the Collateral
Trust Indenture, be declared or may become due and payable in the manner and
with the effect provided in the Collateral Trust Indenture.

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

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

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

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

                                    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 the Lessor
                                         Manager

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

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

                                       _________________________________________
                                       Name:
                                       Title:
<PAGE>
                            FORM OF TRANSFER NOTICE

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

Insert Taxpayer Identification No.

___________________________

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

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

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

Date: ________________   ____________________________________________
                         (Signature of Transferor)

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

                       Schedule Of Principal Amortization

                             Series A Lessor Notes.

                         PRINCIPAL PORTION: $43,000,000

<TABLE>
<CAPTION>
                                                                 Percentage of Principal
                                                                 -----------------------
Regular Distribution Date                                                 Amount Payable
-------------------------                                                 --------------
<S>                                                              <C>
May 30, 2002..................................................              22.79069767%
November 30, 2002.............................................               5.40697674%
May 30, 2003..................................................               9.36046512%
November 30, 2003.............................................               9.76744186%
May 30, 2004..................................................               9.06976744%
November 30, 2004.............................................               0.00000000%
May 30, 2005..................................................               0.00000000%
November 30, 2005.............................................               0.00000000%
May 30, 2006..................................................               0.00000000%
November 30, 2006.............................................               0.00000000%
May 30, 2007..................................................               0.00000000%
November 30, 2007.............................................               0.00000000%
May 30, 2008..................................................               0.00000000%
November 30, 2008.............................................               0.00000000%
May 30, 2009..................................................               0.00000000%
November 30, 2009.............................................               0.00000000%
May 30, 2010..................................................               0.00000000%
November 30, 2010.............................................               0.00000000%
May 30, 2011..................................................               0.00000000%
November 30, 2011.............................................              33.60465117%
                                                                            ------------

Total.........................................................             100.00000000%
                                                                           =============
</TABLE>
<PAGE>
                           Series B Lessor Notes.

                      PRINCIPAL PORTION:  $12,125,000

<TABLE>
<CAPTION>
                                                                         Percentage of Initial
                                                                         ---------------------
Regular Distribution Date                                                     Principal Amount
-------------------------                                                     ----------------
<S>                                                                      <C>
May 30, 2002..................................................                     0.00000000%
November 30, 2002.............................................                     0.00000000%
May 30, 2003..................................................                     0.00000000%
November 30, 2003.............................................                     0.00000000%
May 30, 2004..................................................                     0.00000000%
November 30, 2004.............................................                     0.00000000%
May 30, 2005..................................................                     0.00000000%
November 30, 2005.............................................                     0.00000000%
May 30, 2006..................................................                     0.00000000%
November 30, 2006.............................................                     0.00000000%
May 30, 2007..................................................                     0.00000000%
November 30, 2007.............................................                     0.00000000%
May 30, 2008..................................................                     0.00000000%
November 30, 2008.............................................                     0.00000000%
May 30, 2009..................................................                     0.00000000%
November 30, 2009.............................................                     0.00000000%
May 30, 2010..................................................                     0.00000000%
November 30, 2010.............................................                     0.00000000%
May 30, 2011..................................................                     0.00000000%
November 30, 2011.............................................                     0.00000000%
May 30, 2012..................................................                     0.00000000%
November 30, 2012.............................................                     0.00000000%
May 30, 2013..................................................                     0.00000000%
November 30, 2013.............................................                     0.00000000%
May 30, 2014..................................................                     0.00000000%
November 30, 2014.............................................                     0.00000000%
May 30, 2015..................................................                     0.00000000%
November 30, 2015.............................................                     0.00000000%
May 30, 2016..................................................                     0.00000000%
November 30, 2016.............................................                     0.00000000%
May 30, 2017..................................................                     0.00000000%
November 30, 2017.............................................                     0.00000000%
May 30, 2018..................................................                     0.00000000%
November 30, 2018.............................................                     0.00000000%
May 30, 2019..................................................                   100.00000000%
                                                                                 -------------

Total.........................................................                   100.00000000%
                                                                                 =============
</TABLE>

                                                                      EXHIBIT C

                                      B-1-10
<PAGE>
                                                             TO LEASE INDENTURE

                      FORM OF CERTIFICATE OF AUTHENTICATION

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

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

                                        By:  _________________________
                                             Name:
                                             Title:

                                       C-2
<PAGE>
                                                                      EXHIBIT D
                                                             TO LEASE INDENTURE

                         DESCRIPTION OF THE FACILITY

     That certain approximately 530 megawatt net nameplate capacity gas-fired
combined cycle electric generating facility (known also as the "South Point
Facility") together with all structures or improvements, all alterations
thereto or replacements thereof, and all other fixtures, attachments,
appliances, equipment, machinery and other articles (including, but not limited
to, the property set forth below (the "Included Property")), in each case
located on the land, or on the easements appurtenant to the land, consisting of
320 acres of land leased from the Fort Mojave Indian Tribe near Mojave Valley,
Arizona approximately 15 miles south of Bullhead City, Arizona and 5 miles east
of Needles, California, described more particularly on Exhibit A.

     Included Property

     1.   Two Combustion Turbines & Generators - Siemens Westinghouse Turbines
          (Serial Nos. 37A8063, 37A8065), Generators (Serial Nos. 94P3215,
          94P0060).

     2.   Two Heat Recovery Steam Generators - Vogt-Nem Boiler (Serial Nos.
          17382 1A-1D and 17382 2A-2D).

     3.   One Steam Turbine & Generator- Siemens Westinghouse Steam Turbine
          (Serial No. 24A3191 ) / Generator (Serial Nos. 1S94P0086 ).

     4.   One Condenser - Alstrom Condenser (Order No. 99-5080).

     5.   Water Treatment Facility - Reverse Osmosis, Brine Concentrator, Mixed
          Bed Exchangers, Multi-media Filters and associated tanks.

     6.   Eleven cell Marley Cooling Tower- including Circulating Water Pumps.

     7.   Three Generator Step Up Transformers, all electrical switchyard
          equipment and other interconnection equipment associated with the
          South Point Facility.

                                       D-1
<PAGE>
                                                                     SCHEDULE I
                                                             TO LEASE INDENTURE

                             SERIES A LESSOR NOTE

<TABLE>
<CAPTION>
<S>                                         <C>
Initial Aggregate Principal Amount:         $43,000,000
Final Maturity Date:                        May 30, 2012
Interest Rate:                              8.400%
Amortization Schedule:
</TABLE>

<TABLE>
<CAPTION>
                                                                   Percentage of Principal
                                                                   -----------------------
Regular Distribution Date                                                   Amount Payable
-------------------------                                                   --------------
<S>                                                                <C>
May 30, 2002..................................................                22.79069767%
November 30, 2002.............................................                15.40697674%
May 30, 2003..................................................                 9.36046512%
November 30, 2003.............................................                 9.76744186%
May 30, 2004..................................................                 9.06976744%
November 30, 2004.............................................                 0.00000000%
May 30, 2005..................................................                 0.00000000%
November 30, 2005.............................................                 0.00000000%
May 30, 2006..................................................                 0.00000000%
November 30, 2006.............................................                 0.00000000%
May 30, 2007..................................................                 0.00000000%
November 30, 2007.............................................                 0.00000000%
May 30, 2008..................................................                 0.00000000%
November 30, 2008.............................................                 0.00000000%
May 30, 2009..................................................                 0.00000000%
November 30, 2009.............................................                 0.00000000%
May 30, 2010..................................................                 0.00000000%
November 30, 2010.............................................                 0.00000000%
May 30, 2011..................................................                 0.00000000%
November 30, 2011.............................................                33.60465117%
                                                                              ------------

Total.........................................................               100.00000000%
                                                                             =============
</TABLE>

                                  SCHEDULE 1-1
<PAGE>
                             SERIES B LESSOR NOTE

<TABLE>
<CAPTION>
<S>                                         <C>
Initial Aggregate Principal Amount:         $12,125,000
Final Maturity Date:                        May 30, 2019
Interest Rate:                              9.825%
Amortization Schedule:
</TABLE>

<TABLE>
<CAPTION>
                                                                       Percentage of Initial
                                                                       ---------------------
Regular Distribution Date                                                   Principal Amount
-------------------------                                                   ----------------
<S>                                                                    <C>
May 30, 2002..................................................                   0.00000000%
November 30, 2002.............................................                   0.00000000%
May 30, 2003..................................................                   0.00000000%
November 30, 2003.............................................                   0.00000000%
May 30, 2004..................................................                   0.00000000%
November 30, 2004.............................................                   0.00000000%
May 30, 2005..................................................                   0.00000000%
November 30, 2005.............................................                   0.00000000%
May 30, 2006..................................................                   0.00000000%
November 30, 2006.............................................                   0.00000000%
May 30, 2007..................................................                   0.00000000%
November 30, 2007.............................................                   0.00000000%
May 30, 2008..................................................                   0.00000000%
November 30, 2008.............................................                   0.00000000%
May 30, 2009..................................................                   0.00000000%
November 30, 2009.............................................                   0.00000000%
May 30, 2010..................................................                   0.00000000%
November 30, 2010.............................................                   0.00000000%
May 30, 2011..................................................                   0.00000000%
November 30, 2011.............................................                   0.00000000%
May 30, 2012..................................................                   0.00000000%
November 30, 2012.............................................                   0.00000000%
May 30, 2013..................................................                   0.00000000%
November 30, 2013.............................................                   0.00000000%
May 30, 2014..................................................                   0.00000000%
November 30, 2014.............................................                   0.00000000%
May 30, 2015..................................................                   0.00000000%
November 30, 2015.............................................                   0.00000000%
May 30, 2016..................................................                   0.00000000%
November 30, 2016.............................................                   0.00000000%
May 30, 2017..................................................                   0.00000000%
November 30, 2017.............................................                   0.00000000%
May 30, 2018..................................................                   0.00000000%
November 30, 2018.............................................                   0.00000000%
May 30, 2019..................................................                 100.00000000%
                                                                               -------------

Total.........................................................                 100.00000000%
                                                                               =============
</TABLE>

                                  SCHEDULE 1-2

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