Common use of Declaration of an Early Termination Date and Calculation of Settlement Amounts Clause in Contracts

Declaration of an Early Termination Date and Calculation of Settlement Amounts. Notwithstanding anything to the contrary in this Confirmation, the Parties shall determine the Settlement Amount for this Transaction in accordance with Section 5.2 of the Master Agreement using the defined terms contained in this Confirmation as applicable. Furthermore, with respect to this Transaction only, the following language is to be added at the end of Section 5.2 of the Master Agreement: “If Buyer is the Non-Defaulting Party and Buyer reasonably expects to incur penalties, fines or costs from the CPUC, the CAISO, or any other Governmental Body having jurisdiction, because Buyer is not able to include the Contract Quantity in any applicable Compliance Showings due to Seller’s Event of Default and Buyer has not purchased Replacement Capacity, then Buyer may, in good faith, estimate the amount of those penalties or fines on a $/kW-month basis, provided these do not duplicate Losses for that portion of the Contract Quantity not so replaced, subtracting the Contract Price (in $/kW-month) and include this estimate in its determination of the Settlement Amount, subject to accounting to Seller when those penalties or fines are finally ascertained. The rights and obligations with respect to determining and paying any Settlement Amount or Termination Payment, and any dispute resolution provisions with respect thereto, shall survive the termination of this Transaction and shall continue until after those penalties or fines are finally ascertained.” BUYER SELLER [INSERT COMPANY NAME] [INSERT COMPANY NAME] By: ________________________________ By:_______________________________ Name:______________________________ Name:_____________________________ Title:________________________________ Title:______________________________ Date:_______________________________ Date:______________________________ APPENDIX A (RA CONFIRMATION) Unit Information Name Location CAISO Resource ID Unit SCID Unit NQC Prorated Percentage of Unit Factor Unit Contract Quantity Resource Type Resource Top Down Category (1, 2, 3 or 4) Point of interconnection with the CAISO Controlled Grid ("Substation") Path 26 (North or South) Local Capacity Area (if any, as Of Confirmation Effective Date) Deliverability restrictions, if any, as described in most recent CAISO deliverability assessment Run Hour Restrictions APPENDIX B (RA CONFIRMATION) FORM OF LETTER OF CREDIT Issuing Bank Letterhead and Address STANDBY LETTER OF CREDIT NO. XXXXXXXX Date: [insert issue date] Beneficiary: [Insert name and address of Beneficiary] Applicant: [Insert name and address of Applicant] Letter of Credit Amount: [insert amount] Expiry Date: [insert date that is one (1) year from offer date] Ladies and Gentlemen: By order of [Insert name of Applicant] (“Applicant”), we hereby issue in favor of [Insert name of Beneficiary] (the “Beneficiary”) our irrevocable standby letter of credit No. [Insert number of letter of credit] (“Letter of Credit”), for the account of Applicant, for drawings up to but not to exceed the aggregate sum of U.S. $ [Insert amount in figures followed by (amount in words)] (“Letter of Credit Amount”). This Letter of Credit is available with [Insert name of issuing or paying bank, and the city and state in which it is located] by sight payment, at our offices located at the address stated below, effective immediately, and it will expire at our close of business on [Insert expiry date] (the “Expiry Date”). Funds under this Letter of Credit are available to the Beneficiary against presentation of the following documents:

Declaration of an Early Termination Date and Calculation of Settlement Amounts. Notwithstanding anything to the contrary in this Confirmation, the Parties shall determine the Settlement Amount for this Transaction in accordance with Section 5.2 of the Master Agreement using the defined terms contained in this Confirmation as applicable. Furthermore, with respect to this Transaction only, the following language is to be added at the end of Section 5.2 of the Master Agreement: “If Buyer is the Non-Defaulting Party and Buyer reasonably expects to incur penalties, fines or costs from the CPUC, the CAISO, or any other Governmental Body having jurisdiction, because Buyer is not able to include the Contract Quantity in any applicable Compliance Showings due to Seller’s Event of Default and Buyer has not purchased Replacement Capacity, then Buyer may, in good faith, estimate the amount of those penalties or fines on a $/kW-month basis, provided these do not duplicate Losses for that portion of the Contract Quantity not so replaced, subtracting the Contract Price (in $/kW-month) and include this estimate in its determination of the Settlement Amount, subject to accounting to Seller when those penalties or fines are finally ascertained. The rights and obligations with respect to determining and paying any Settlement Amount or Termination Payment, and any dispute resolution provisions with respect thereto, shall survive the termination of this Transaction and shall continue until after those penalties or fines are finally ascertained.” Signature Page BUYER SELLER [INSERT COMPANY NAME] [INSERT COMPANY NAME] By: ________________________________ By:_______________________________ Name:______________________________ Name:_____________________________ Title:________________________________ Title:______________________________ Date:_______________________________ Date:______________________________ APPENDIX A (RA CONFIRMATION) Unit Information [Sample data included] Contract Log Number: [33B123X01] Name ABC_Resource Location Sierra CAISO Resource ID POD_ABC Unit SCID PCG2 Unit NQC Prorated Percentage of 100 MW Unit Factor Unit Contract Quantity EFC 100 MW Resource Type Peaker Resource Top Down Category (1, 2, 3 or 4) Point of interconnection with the CAISO Controlled Grid ("Substation") 4 Path 26 (North or South) North Local Capacity Area (if any, as Of Confirmation Effective Date) Sierra Deliverability restrictions, if any, as described in most recent CAISO deliverability assessment N/A Run Hour Restrictions N/A Unit Contract Quantity (MW) 95 Prorated Percentage of Unit Factor 95% Flexible RA Quantity (MW) 95 Prorated Percentage of Unit Flexible Factor 95% APPENDIX B (RA CONFIRMATION) FORM OF LETTER OF CREDIT Issuing Bank Letterhead and Address STANDBY LETTER OF CREDIT NO. XXXXXXXX Date: [insert issue date] Beneficiary: [Insert name and address of Beneficiary] Applicant: [Insert name and address of Applicant] Letter of Credit Amount: [insert amount] Expiry Date: [insert date that is one (1) year from offer date] Ladies and Gentlemen: By order of [Insert name of Applicant] (“Applicant”), we hereby issue in favor of [Insert name of Beneficiary] (the “Beneficiary”) our irrevocable standby letter of credit No. [Insert number of letter of credit] (“Letter of Credit”), for the account of Applicant, for drawings up to but not to exceed the aggregate sum of U.S. $ [Insert amount in figures followed by (amount in words)] (“Letter of Credit Amount”). This Letter of Credit is available with [Insert name of issuing or paying bank, and the city and state in which it is located] by sight payment, at our offices located at the address stated below, effective immediately, and it will expire at our close of business on [Insert expiry date] (the “Expiry Date”). Funds under this Letter of Credit are available to the Beneficiary against presentation of the following documents:

Declaration of an Early Termination Date and Calculation of Settlement Amounts. Notwithstanding anything to the contrary in this Confirmationcontrary, the Parties shall determine the Settlement Amount for this Transaction in accordance with Section 5.2 of the Master Agreement using the defined terms contained in this Confirmation as applicable. Furthermore, with respect to this Transaction only, the following language is to be added at the end of Section 5.2 of the Master Agreement5.2: “"If Buyer is the Non-Defaulting Party and Buyer reasonably expects to incur penalties, penalties or fines or costs from the CPUC, the CAISO, or any other LRA or Governmental Body having jurisdiction, because Buyer is not able to include the Contract Quantity in any applicable Compliance Showings RAR Showing or LAR Showing due to Seller’s Event of Default and Buyer has not purchased Replacement CapacityDefault, then Buyer may, in good faith, estimate the amount of those penalties or fines on a $/kW-month basis, provided these do not duplicate Losses for that portion of the Contract Quantity not so replaced, subtracting the Contract Price (in $/kW-month) and include this estimate in its determination of the Settlement Amount, subject to accounting to Seller when those penalties or fines are finally ascertained. The rights and obligations with respect to determining and paying any Settlement Amount or Termination Payment, and any dispute resolution provisions with respect thereto, shall survive the termination of this Transaction and shall continue until after those penalties or fines are finally ascertained.” " BUYER SELLER PACIFIC GAS AND ELECTRIC COMPANY [INSERT COMPANY NAME] [INSERT COMPANY NAMEINSERT] By: ________________________________ By:_______________________________ Name:______________________________ Name:_____________________________ Title:________________________________ Title:______________________________ Date:_______________________________ Date:______________________________ APPENDIX A (RA CONFIRMATION) Unit Information Name Location CAISO Resource ID Unit SCID Unit NQC Prorated Percentage of Unit Factor Unit Contract Quantity Resource Type Resource Top Down Category (1, 2, 3 or 4) Point of interconnection with the CAISO Controlled Grid ("Substation") Path 26 (North or South) Local Capacity Area (if any, as Of Confirmation Effective Date) Deliverability restrictions, if any, as described in most recent CAISO deliverability assessment Run Hour Restrictions APPENDIX B I (RA CONFIRMATION) FORM OF LETTER OF CREDIT Issuing Bank Letterhead and Address STANDBY LETTER OF CREDIT NO. XXXXXXXX Date: [insert issue date] Beneficiary: [Insert name Pacific Gas and address of Beneficiary] Electric Company Applicant: [Insert name and address of Applicant] 00 Xxxxx Xxxxxx, Mail Code B28L San Francisco, CA 94105 Attention: Credit Risk Management Letter of Credit Amount: [insert amount] Expiry Date: [insert date that is one (1) year from offer date] Ladies and Gentlemen: By order of [Insert name of Applicant] (“Applicant”), we hereby issue in favor of [Insert name of Beneficiary] Pacific Gas and Electric Company (the “Beneficiary”) our irrevocable standby letter of credit No. [Insert number of letter of credit] (“Letter of Credit”), for the account of Applicant, for drawings up to but not to exceed the aggregate sum of U.S. $ [Insert amount in figures followed by (amount in words)] (“Letter of Credit Amount”). This Letter of Credit is available with [Insert name of issuing or paying bank, and the city and state in which it is located] by sight payment, at our offices located at the address stated below, effective immediately, and it will expire at our close of business on [Insert expiry date] (the “Expiry Date”). Funds under this Letter of Credit are available to the Beneficiary against presentation of the following documents:

Declaration of an Early Termination Date and Calculation of Settlement Amounts. Notwithstanding anything to the contrary in this Confirmation, the Parties shall determine the Settlement Amount for this Transaction in accordance with Section 5.2 of the Master Agreement using the defined terms contained in this Confirmation as applicable. Furthermore, with respect to this Transaction only, the following language is to be added at the end of Section 5.2 of the Master Agreement: “If Buyer is the Non-Defaulting Party and Buyer reasonably expects to incur penalties, fines or costs from the CPUC, the CAISO, or any other Governmental Body having jurisdiction, because Buyer is not able to include the Contract Quantity in any applicable Compliance Showings due to Seller’s Event of Default and Buyer has not purchased Replacement Capacity, then Buyer may, in good faith, estimate the amount of those penalties or fines on a $/kW-month basis, provided these do not duplicate Losses for that portion of the Contract Quantity not so replaced, subtracting the Contract Price (in $/kW-month) and include this estimate in its determination of the Settlement Amount, subject to accounting to Seller when those penalties or fines are finally ascertained. The rights and obligations with respect to determining and paying any Settlement Amount or Termination Payment, and any dispute resolution provisions with respect thereto, shall survive the termination of this Transaction and shall continue until after those penalties or fines are finally ascertained.” BUYER SELLER [INSERT COMPANY NAME] [INSERT COMPANY NAME] By: ________________________________ By:_______________________________ Name:______________________________ Name:_____________________________ Title:________________________________ Title:______________________________ Date:_______________________________ Date:______________________________ APPENDIX A (RA CONFIRMATION) Unit Import Resource(s) Information Name Example Location Palo Verde CAISO Import Resource ID Unit SCID Unit NQC Prorated Percentage of Unit Factor Unit ABCD_PVWEST_I_F_WXYZ Scheduling Coordinator ID (SCID) ABCD Import Contract Quantity 150 MW Resource Type Import Capacity Type System Resource Top Down Category (1, 2, 3 or 4) 4 Delivery Point of interconnection with the (Intertie’s Scheduling Point) PVWEST CAISO Controlled Grid ("Substation") Branch Group PALOVRDE_MSL Path 26 (North or South) Local Capacity Area (if any, as Of Confirmation Effective Date) South Deliverability restrictions, if any, as described in most recent CAISO deliverability assessment Run Hour Restrictions N/A APPENDIX B (RA CONFIRMATION) FORM OF LETTER OF CREDIT Issuing Bank Letterhead and Address STANDBY LETTER OF CREDIT NO. XXXXXXXX Date: [insert issue date] Beneficiary: [Insert name and address of Beneficiary] Applicant: [Insert name and address of Applicant] Letter of Credit Amount: [insert amount] Expiry Date: [insert date that is one (1) year from offer date] Ladies and Gentlemen: By order of [Insert name of Applicant] (“Applicant”), we hereby issue in favor of [Insert name of Beneficiary] (the “Beneficiary”) our irrevocable standby letter of credit No. [Insert number of letter of credit] (“Letter of Credit”), for the account of Applicant, for drawings up to but not to exceed the aggregate sum of U.S. $ [Insert amount in figures followed by (amount in words)] (“Letter of Credit Amount”). This Letter of Credit is available with [Insert name of issuing or paying bank, and the city and state in which it is located] by sight payment, at our offices located at the address stated below, effective immediately, and it will expire at our close of business on [Insert expiry date] (the “Expiry Date”). Funds under this Letter of Credit are available to the Beneficiary against presentation of the following documents:

Declaration of an Early Termination Date and Calculation of Settlement Amounts. Notwithstanding anything to the contrary in this Confirmation, the Parties shall determine the Settlement Amount for this Transaction in accordance with Section 5.2 of the Master Agreement using the defined terms contained in this Confirmation as applicable. Furthermore, with respect to this Transaction only, the following language is to be added at the end of Section 5.2 of the Master Agreement: “If Buyer is the Non-Defaulting Party and Buyer reasonably expects to incur penalties, fines or costs from the CPUC, the CAISO, or any other Governmental Body having jurisdiction, because Buyer is not able to include the Contract Quantity in any applicable Compliance Showings due to Seller’s Event of Default and Buyer has not purchased Replacement Capacity, then Buyer may, in good faith, estimate the amount of those penalties or fines on a $/kW-month basis, provided these do not duplicate Losses for that portion of the Contract Quantity not so replaced, subtracting the Contract Price (in $/kW-month) and include this estimate in its determination of the Settlement Amount, subject to accounting to Seller when those penalties or fines are finally ascertained. The rights and obligations with respect to determining and paying any Settlement Amount or Termination Payment, and any dispute resolution provisions with respect thereto, shall survive the termination of this Transaction and shall continue until after those penalties or fines are finally ascertained.” Signature Page BUYER SELLER [INSERT COMPANY NAME] [INSERT COMPANY NAME] By: ________________________________ By:_______________________________ Name:______________________________ Name:_____________________________ Title:________________________________ Title:______________________________ Date:_______________________________ Date:______________________________ APPENDIX A (RA CONFIRMATION) Unit Import Resource(s) Information Name [Sample data included] Contract Log Number: [33B123X01]Name Example Location Palo Verde CAISO Import Resource ID Unit SCID Unit NQC Prorated Percentage of Unit Factor Unit ABCD_PVWEST_I_F_WXYZ Scheduling Coordinator ID (SCID) ABCD Import Contract Quantity 150 MW Resource Type Import Capacity Type System Resource Top Down Category (1, 2, 3 or 4) 4 Delivery Point of interconnection with the (Intertie’s Scheduling Point) PVWEST CAISO Controlled Grid ("Substation") Branch Group PALOVRDE_MSL Path 26 (North or South) Local Capacity Area (if any, as Of Confirmation Effective Date) South Deliverability restrictions, if any, as described in most recent CAISO deliverability assessment Run Hour Restrictions N/A APPENDIX B (RA CONFIRMATION) FORM OF LETTER OF CREDIT Issuing Bank Letterhead and Address STANDBY LETTER OF CREDIT NO. XXXXXXXX Date: [insert issue date] Beneficiary: [Insert name and address of Beneficiary] Applicant: [Insert name and address of Applicant] Letter of Credit Amount: [insert amount] Expiry Date: [insert date that is one (1) year from offer date] Ladies and Gentlemen: By order of [Insert name of Applicant] (“Applicant”), we hereby issue in favor of [Insert name of Beneficiary] (the “Beneficiary”) our irrevocable standby letter of credit No. [Insert number of letter of credit] (“Letter of Credit”), for the account of Applicant, for drawings up to but not to exceed the aggregate sum of U.S. $ [Insert amount in figures followed by (amount in words)] (“Letter of Credit Amount”). This Letter of Credit is available with [Insert name of issuing or paying bank, and the city and state in which it is located] by sight payment, at our offices located at the address stated below, effective immediately, and it will expire at our close of business on [Insert expiry date] (the “Expiry Date”). Funds under this Letter of Credit are available to the Beneficiary against presentation of the following documents:B

Declaration of an Early Termination Date and Calculation of Settlement Amounts. Notwithstanding anything to the contrary in this Confirmation, the Parties shall determine the Settlement Amount for this Transaction in accordance with Section 5.2 of the Master Agreement using the defined terms contained in this Confirmation as applicable. Furthermore, with respect to this Transaction only, the following language is to be added at the end of Section 5.2 of the Master Agreement: BUYER “If Buyer is the Non-Defaulting Party and Buyer reasonably expects to incur penalties, fines or costs from the CPUC, the CAISO, or any other Governmental Body having jurisdiction, because Buyer is not able to include the Contract Quantity in any applicable Compliance Showings RAR Showing or Local RAR Showing due to Seller’s Event of Default and Buyer has not purchased Replacement Capacity, then Buyer may, in good faith, estimate the amount of those penalties or fines on a $/kW-month basis, provided these do not duplicate Losses for that portion of the Contract Quantity not so replaced, basis subtracting the Contract Price (in $/kW-month) and include this estimate in its determination of the Settlement Amount, subject to accounting to Seller and a true-up of payments when those penalties or fines are finally ascertained. The rights and obligations with respect to determining and paying any Settlement Amount or Termination Payment, and any dispute resolution provisions with respect thereto, shall survive the termination of this Transaction and shall continue until after those penalties or fines are finally ascertained.” BUYER SELLER [INSERT PACIFIC GAS AND ELECTRIC COMPANY NAME] [INSERT COMPANY NAME] CALPINE ENERGY SERVICES, L.P. By: ________________________________ By:_______________________________ : Name:______________________________ : Name:_____________________________ : Title:________________________________ : Title:______________________________ : Date:_______________________________ : Date:______________________________ : APPENDIX A (RA CONFIRMATION) Unit Information Name Xxxxxx Energy Center Location Yuba City, CA CAISO Resource SUTTER 2 PL1X3 ID Unit SCID CALJ Showing Month Net Qualifying Capacity June 2012 515 July 2012 505 August 2012 500 September 2012 515 October 2012 520 November 2012 525 December 2012 525 Unit NQC Prorated Percentage of Unit Factor Unit Contract Quantity [TBD] Resource Type l_Phys_Res Resource Top Down Category 4 (1, 21,2, 3 or 4) Point of 19 interconnection with the CAISO Controlled Grid ("Substation") Path 26 (North or South) Local Capacity Area (if any, as Of Confirmation Effective Date) Deliverability Deiiverability restrictions, if any, as described North CAISO System in most recent None CAISO deliverability deiiverability assessment Run Hour Restrictions None APPENDIX B (RA CONFIRMATION) FORM OF LETTER OF CREDIT PARTIES TO DISCUSS! fNote: Final draft of the Letter of Credit must be notarized by a public notary) Issuing Bank Letterhead and Address STANDBY LETTER OF CREDIT NO. XXXXXXXX DateISSUING BANK: [insert issue date] BeneficiaryUnion Bank, N.A. Trade Service Operations, 0000 Xxxxxx Xxxxxx V02-906 Monterey Park, California 91755-7417 BENEFICIARY Pacific Gas and Electric Company 00 Xxxxx Xxxxxx, Mail Code B28L San Francisco, CA 94105 Attention: [Insert name and address of Beneficiary] Applicant: [Insert name and address of Applicant] Credit Risk Management APPLICANT CALPINE Letter of Credit Amount: [insert amount] US$ Expiry Date: [insert date that is one (1) year from offer date] 201 Ladies and Gentlemen: By order of [Insert name of Applicant] (“Applicant”), we hereby issue in favor of [Insert name of Beneficiary] Pacific Gas and Electric Company (the “Beneficiary”) our irrevocable standby letter of credit No. [Insert insert number of letter of credit] (“Letter of Credit”), for the account of Applicant, for drawings up to but not to exceed the aggregate sum of U.S. $ [Insert amount in figures followed by (amount in words)] (“Letter of Credit Amount”). This Letter of Credit is available with [Insert name of issuing or paying bank, and the city and state in which it is located] by sight payment, at our offices located at the address stated below, effective immediately, and it will expire at our close of business on [Insert expiry date] (the “Expiry Date”). Funds under this Letter of Credit are available to the Beneficiary against presentation of the following documents:$