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<SEC-DOCUMENT>0000891618-01-500329.txt : 20010421
<SEC-HEADER>0000891618-01-500329.hdr.sgml : 20010421
ACCESSION NUMBER:		0000891618-01-500329
CONFORMED SUBMISSION TYPE:	S-3/A
PUBLIC DOCUMENT COUNT:		9
FILED AS OF DATE:		20010419

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CALPINE CORP
		CENTRAL INDEX KEY:			0000916457
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				770212977
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-3/A
		SEC ACT:		
		SEC FILE NUMBER:	333-57338
		FILM NUMBER:		1606037

	BUSINESS ADDRESS:	
		STREET 1:		50 WEST SAN FERNANDO ST
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95113
		BUSINESS PHONE:		4089955115

	MAIL ADDRESS:	
		STREET 1:		50 W SAN FERNANDO
		STREET 2:		SUITE 500
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95113

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CALPINE CANADA ENERGY FINANCE ULC
		CENTRAL INDEX KEY:			0001137032
		STANDARD INDUSTRIAL CLASSIFICATION:	 []
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A5
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-3/A
		SEC ACT:		
		SEC FILE NUMBER:	333-57338-01
		FILM NUMBER:		1606038

	BUSINESS ADDRESS:	
		STREET 1:		50 WEST SAN FERNANDO ST
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95113

	MAIL ADDRESS:	
		STREET 1:		50 WEST SAN FERNANDO ST
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95113
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-3/A
<SEQUENCE>1
<FILENAME>f70590a1s-3a.txt
<DESCRIPTION>AMENDMENT NO 1 TO FORM S-3
<TEXT>

<PAGE>   1


     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 19, 2001



                                                      REGISTRATION NO. 333-57338

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                AMENDMENT NO. 1


                                       TO


                                    FORM S-3
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------

                              CALPINE CORPORATION
                       CALPINE CANADA ENERGY FINANCE ULC
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                        <C>                                        <C>
                 DELAWARE                                     4911                                    77-0212977
               NOVA SCOTIA                                    4911                                  NOT APPLICABLE
      (STATES OR OTHER JURISDICTIONS              (PRIMARY STANDARD INDUSTRIAL                     (I.R.S. EMPLOYER
    OF INCORPORATION OR ORGANIZATION)             CLASSIFICATION CODE NUMBERS)                 IDENTIFICATION NUMBERS)
</TABLE>



<TABLE>
<S>                                                          <C>

                    CALPINE CORPORATION                                   CALPINE CANADA ENERGY FINANCE ULC
                50 WEST SAN FERNANDO STREET                               SUITE 800, PURDY'S WHARF, TOWER 1
                 SAN JOSE, CALIFORNIA 95113                                    1959 UPPER WATER STREET
                       (408) 995-5115                                                P.O. BOX 997
    (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,                      HALIFAX, NOVA SCOTIA B3J 3N2
                         INCLUDING                                                  (902) 420-3335
  AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)        (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                                                                                      INCLUDING
                                                               AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
</TABLE>


<TABLE>
<S>                                                          <C>
                  ------------------------                                     ------------------------
                         COPIES TO:                                                   COPIES TO:
                      PETER CARTWRIGHT                                              ANN B. CURTIS
      CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER,                  EXECUTIVE VICE PRESIDENT AND SECRETARY
                    CALPINE CORPORATION                                   CALPINE CANADA ENERGY FINANCE ULC
                50 WEST SAN FERNANDO STREET                                  50 WEST SAN FERNANDO STREET
                 SAN JOSE, CALIFORNIA 95113                                   SAN JOSE, CALIFORNIA 95113
                       (408) 995-5115                                               (408) 995-5115
 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,    (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                         INCLUDING                                                    INCLUDING
              AREA CODE, OF AGENT FOR SERVICE)                             AREA CODE, OF AGENT FOR SERVICE)
                      BRUCE C. BENNETT                                              JOSEPH A. COCO
                    COVINGTON & BURLING                                SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
                1330 AVENUE OF THE AMERICAS                                       FOUR TIMES SQUARE
                  NEW YORK, NEW YORK 10019                                     NEW YORK, NEW YORK 10036
                       (212) 841-1000                                               (212) 735-3000
</TABLE>

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

        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

  From time to time after the effective date of this Registration Statement as
                        determined by market conditions.

    If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box:  [ ]

    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box:  [X]

    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering:  [ ]

    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering:  [ ]

    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box:  [ ]
                            ------------------------


    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>   2

        THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
        WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
        WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
        PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
        SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
        OR SALE IS NOT PERMITTED.


                  SUBJECT TO COMPLETION, DATED APRIL 19, 2001


PROSPECTUS

CALPINE CORP. LOGO
                              CALPINE CORPORATION

                                  Common Stock
                                Preferred Stock
                                Debt Securities

                       CALPINE CANADA ENERGY FINANCE ULC

                   Debt Securities Fully and Unconditionally
                       Guaranteed by Calpine Corporation

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

     Calpine Corporation may periodically sell common stock, preferred stock and
debt securities to the public. We will provide specific terms of such securities
in supplements to this prospectus. You should read this prospectus and each
applicable supplement carefully before you invest.

     Calpine Canada Energy Finance ULC may periodically sell debt securities to
the public. Such debt securities will be fully and unconditionally guaranteed by
Calpine Corporation. Calpine Canada Energy Finance ULC will provide specific
terms of such debt securities in supplements to this prospectus. You should read
this prospectus and each applicable supplement carefully before you invest.

 INVESTING IN OUR SECURITIES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS" ON PAGE
                                       9.

     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

     This prospectus may not be used to sell our securities unless it is
accompanied by a prospectus supplement.


                   Prospectus dated                  , 2001.

<PAGE>   3

     No person is authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
prospectus or the accompanying prospectus supplement and, if given or made, such
information or representations must not be relied upon as having been
authorized. This prospectus and accompanying prospectus supplement do not
constitute an offer to sell or the solicitation of an offer to buy any
securities other than the securities described in this prospectus and the
accompanying prospectus supplement or an offer to sell or the solicitation of an
offer to buy such securities in any circumstance in which such offer or
solicitation is unlawful. Neither the delivery of this prospectus or the
accompanying prospectus supplement, nor any sale made under this prospectus or
accompanying prospectus supplement shall, under any circumstances, create any
implication that there has been no change in our affairs since the date of the
prospectus supplement accompanying this prospectus or that the information
contained or incorporated by reference in this prospectus or accompanying
prospectus supplement is correct as of any time subsequent to the date of such
information.

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                        PAGE
                                        ----
<S>                                     <C>
About This Prospectus.................    3
Calpine...............................    4
Calpine Canada Energy Finance.........    8
Risk Factors..........................    9
Where You Can Find More Information...    9
Forward-Looking Statements............   11
Consolidated Ratio of Earnings to
  Fixed Charges.......................   12
Use of Proceeds.......................   12
</TABLE>

<TABLE>
<CAPTION>
                                        PAGE
                                        ----
<S>                                     <C>
Plan of Distribution..................   12
Description of Capital Stock..........   14
Description of the Debt Securities....   19
Certain United States Federal Income
  Tax Consequences....................   33
Notice to Canadian Residents..........   43
Legal Matters.........................   44
Experts...............................   44
</TABLE>
<PAGE>   4

                             ABOUT THIS PROSPECTUS

     This document is called a prospectus and is part of a joint registration
statement that we filed with the SEC using a "shelf" registration or continuous
offering process. Under this shelf process, Calpine may from time to time sell
any combination of the common stock, the preferred stock and the debt securities
of Calpine described in this prospectus, and Calpine Canada Energy Finance may
from time to time sell the debt securities of Calpine Canada Energy Finance
fully and unconditionally guaranteed by Calpine Corporation described in this
prospectus, in one or more offerings which will aggregate up to a total dollar
amount of $2,500,000,000, which amount includes over-allotment options with
regard to certain securities.

     Pursuant to Rule 3-10 of Regulation S-X promulgated by the SEC, we are not
required to include separate financial statements of Calpine Canada Energy
Finance in this prospectus, because:

     - all of the voting rights of Calpine Canada Energy Finance will be owned
       by Calpine, either directly or through wholly-owned subsidiaries of
       Calpine, which files regular reports with the SEC,

     - Calpine Canada Energy Finance has no operations other than the transfer
       of funds to Calpine or its subsidiaries, and

     - Calpine will fully and unconditionally guarantee Calpine Canada Energy
       Finance's obligations and the rights of holders and no subsidiary of
       Calpine will guarantee the obligations of Calpine Canada Energy Finance.

     This prospectus provides you with a general description of the common
stock, the preferred stock and the debt securities we may offer. Each time we
sell such securities, whether by Calpine or Calpine Canada Energy Finance, we
will provide a prospectus supplement containing specific information about the
terms of the securities being offered, including any guarantees. That prospectus
supplement may include a discussion of any risk factors or other special
considerations applicable to those securities. The prospectus supplement may
also add, update or change information in this prospectus. If there is any
inconsistency between the information in this prospectus and any prospectus
supplement, you should rely on the information in that prospectus supplement.
You should read both this prospectus and any prospectus supplement together with
the additional information described under the heading "Where You Can Find More
Information."

     The registration statement containing this prospectus, including the
exhibits to the registration statement, provides additional information about us
and the securities offered under this prospectus. The registration statement,
including the exhibits, can be read at the SEC website or at the SEC offices
mentioned under the heading "Where You Can Find More Information."

     You should rely only on the information incorporated by reference or
provided in this prospectus and the accompanying prospectus supplement. We have
not authorized anyone to provide you with different information. We are not
making an offer or soliciting a purchase of these securities in any jurisdiction
in which the offer or solicitation is not authorized or in which the person
making the offer or solicitation is not qualified to do so or to anyone to whom
it is unlawful to make the offer or solicitation. You should not assume that the
information in this prospectus or the accompanying prospectus supplement is
accurate as of any date other than the date on the front of the document.

     The prospectus incorporates business and financial information about us
that is not included or delivered with this document. YOU MAY REQUEST AND OBTAIN
THIS INFORMATION FREE OF CHARGE BY WRITING OR TELEPHONING US AT THE FOLLOWING
ADDRESS: CALPINE CORPORATION, 50 WEST SAN FERNANDO STREET, SAN JOSE, CALIFORNIA
95113, ATTENTION: LISA M. BODENSTEINER, ASSISTANT SECRETARY, TELEPHONE (408)
995-5115.

     Unless we have indicated otherwise, in this prospectus references to
"Calpine" are to Calpine Corporation, references to "Calpine Canada Energy
Finance" are to Calpine Canada Energy Finance ULC and references to "we," "us"
and "our" or similar terms are, collectively, to Calpine Corporation and its
consolidated subsidiaries excluding Calpine Capital Trust III, Calpine Capital
Trust II and Calpine Capital Trust.

                                        3
<PAGE>   5

                                    CALPINE

     Calpine is a leading independent power company engaged in the development,
acquisition, ownership and operation of power generation facilities and the sale
of electricity predominantly in the United States. We have experienced
significant growth in all aspects of our business over the last five years.
Currently, we own interests in 50 power plants having a net capacity of 5,849
megawatts. We also have 25 gas-fired projects under construction having a net
capacity of 14,028 megawatts and have announced plans to develop 29 gas-fired
projects (power plants and expansions of current facilities) with a net capacity
of 15,478 megawatts. Upon completion of the projects under construction, we will
have interests in 74 power plants located in 21 states having a net capacity of
19,877 megawatts. Of this total generating capacity, 96% will be attributable to
gas-fired facilities and 4% will be attributable to geothermal facilities. As a
result of our expansion program, our revenues, cash flow, earnings and assets
have grown significantly over the last five years, as shown in the table below.

<TABLE>
<CAPTION>
                                                                                 COMPOUND ANNUAL
                                                           1996        2000        GROWTH RATE
                                                         --------    --------    ---------------
                                                            (IN MILLIONS)
<S>                                                      <C>         <C>         <C>
Total Revenue..........................................  $  214.6    $2,282.8           81%
EBITDA.................................................     110.7       825.9           65%
Net Income.............................................      18.7       323.5          104%
Total Assets...........................................   1,031.4     9,737.3           75%
</TABLE>

     Since our inception in 1984, we have developed substantial expertise in all
aspects of the development, acquisition and operation of power generation
facilities. We believe that the vertical integration of our extensive
engineering, construction management, operations, fuel management and financing
capabilities provides us with a competitive advantage to successfully implement
our acquisition and development program and has contributed to our significant
growth over the past five years.

CAPITALIZATION

     The following table sets forth, as of December 31, 2000 (1) the actual
consolidated capitalization of Calpine; and (2) the consolidated capitalization
of Calpine as adjusted to reflect the net effect of the sale of the 8 1/2%
Senior Notes due 2011. This table should be read in conjunction with the
consolidated financial statements and related notes thereto incorporated by
reference in this prospectus.

<TABLE>
<CAPTION>
                                                                  DECEMBER 31, 2000
                                                              -------------------------
                                                                ACTUAL      AS ADJUSTED
                                                              ----------    -----------
                                                                     (UNAUDITED)
                                                                   (IN THOUSANDS,
                                                                EXCEPT SHARE AMOUNTS)
<S>                                                           <C>           <C>
CASH:
  Cash and cash equivalents.................................  $  588,698    $1,720,955
                                                              ==========    ==========
LONG-TERM DEBT:
Notes payable, net of current portion.......................  $  195,862    $  195,862
Project financing, net of current portion...................   1,473,869     1,473,869
Senior notes................................................   2,551,750     3,701,750
Capital lease obligation, net of current portion............     208,876       208,876
                                                              ----------    ----------
  Total long-term debt......................................   4,430,357     5,580,357
                                                              ----------    ----------
Company-obligated mandatorily redeemable convertible
  preferred securities of subsidiary trusts.................   1,122,490     1,122,490
Minority interests..........................................      37,576        37,576
                                                              ----------    ----------
</TABLE>

                                        4
<PAGE>   6

<TABLE>
<CAPTION>
                                                                  DECEMBER 31, 2000
                                                              -------------------------
                                                                ACTUAL      AS ADJUSTED
                                                              ----------    -----------
                                                                     (UNAUDITED)
                                                                   (IN THOUSANDS,
                                                                EXCEPT SHARE AMOUNTS)
<S>                                                           <C>           <C>
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value:
  10,000,000 shares authorized; no shares outstanding,
     actual and as adjusted.................................          --            --
                                                              ----------    ----------
Common stock, $0.001 par value:
  500,000,000 shares authorized; 283,715,058 shares
     outstanding, actual and as adjusted....................         284           284
Additional paid-in capital..................................   1,700,505     1,700,505
Retained earnings...........................................     536,617       536,617
Accumulated other comprehensive loss........................        (632)         (632)
                                                              ----------    ----------
  Total stockholders' equity................................   2,236,774     2,236,774
                                                              ----------    ----------
  Total capitalization......................................  $7,827,197    $8,977,197
                                                              ==========    ==========
</TABLE>

THE MARKET

     The power industry represents the third largest industry in the United
States, with an estimated end-user market of over $215 billion of electricity
sales in 2000 produced by an aggregate base of power generation facilities with
a capacity of approximately 860,000 megawatts. In response to increasing
customer demand for access to low-cost electricity and enhanced services, new
regulatory initiatives have been and are continuing to be adopted at both the
state and federal level to increase competition in the domestic power generation
industry. The power generation industry historically has been largely
characterized by electric utility monopolies producing electricity from old,
inefficient, high-cost generating facilities selling to a captive customer base.
Industry trends and regulatory initiatives have transformed the existing market
into a more competitive market where end users purchase electricity from a
variety of suppliers, including non-utility generators, power marketers, public
utilities and others.

     There is a significant need for additional power generating capacity
throughout the United States, both to satisfy increasing demand and to replace
old and inefficient generating facilities. Due to environmental and economic
considerations, we believe this new capacity will be provided predominantly by
gas-fired facilities. We believe that these market trends will create
substantial opportunities for efficient, low-cost power producers that can
produce and sell energy to customers at competitive rates.

     In addition, as a result of a variety of factors, including deregulation of
the power generation market, utilities, independent power producers and
industrial companies are disposing of power generation facilities. To date,
numerous utilities have sold or announced their intentions to sell their power
generation facilities and have focused their resources on the transmission and
distribution business segments. Many independent producers operating a limited
number of power plants are also seeking to dispose of their plants in response
to competitive pressures and industrial companies are selling their power plants
to redeploy capital in their core businesses.

STRATEGY

     Our strategy is to continue our rapid growth by capitalizing on the
significant opportunities in the power market, primarily through our active
development and acquisition programs. In pursuing our growth strategy, we
utilize our management and technical knowledge to implement a fully integrated
approach to the acquisition, development and operation of power generation
facilities. This approach uses our expertise in design, engineering,
procurement, finance, construction management, fuel and resource production and
acquisition, operations and power marketing, which we believe provides us with a
competitive advantage. The key elements of our strategy are as follows:

     - Development of new and expansion of existing power plants.  We are
       actively pursuing the development of new and expansion of our existing
       highly efficient, low-cost, gas-fired power plants to replace old and
       inefficient generating facilities and meet the demand for new generation.

                                        5
<PAGE>   7

     - Acquisition of power plants.  Our strategy is to acquire power generating
       facilities that meet our stringent criteria, provide significant
       potential for revenue, cash flow and earnings growth and provide the
       opportunity to enhance the operating efficiencies of the plants.

     - Enhancement of existing power plants.  We continually seek to maximize
       the power generation and revenue potential of our operating assets and
       minimize our operating and maintenance expenses and fuel costs.

RECENT DEVELOPMENTS

     Project Development and Construction.  On February 12, 2001, we announced
that the Florida Public Service Commission approved a joint application filed by
Calpine and Seminole Electric Cooperative, Inc. ("Seminole"), under which we
will build the Osprey Energy Center to supply electric power to help meet
Seminole's members' power needs.

     On March 16, 2001, we announced that our wholly-owned subsidiary, Skygen
Energy LLC, has entered into a ten-year agreement to supply Xcel Energy,
formerly Public Service Co. of Colorado, with 336 megawatts of peaking capacity.
Power will be delivered to our proposed Colorado Energy Center, a $100 million
electric generating facility to be located in an industrial area east of Denver
in the city of Aurora.

     Issuance of Securities.  On February 15, 2001, we completed a public
offering of $1.15 billion of our 8 1/2% Senior Noes due 2011. The Senior Notes
due 2011 bear interest at 8 1/2% per year, payable semi-annually, and mature on
February 15, 2011.

     California Power Market.  The deregulation of the California power market
has produced significant unanticipated results in the past year. The
deregulation froze the rates that utilities can charge their retail and business
customers in California and prohibited the utilities from buying power on a
forward basis, while wholesale power prices were not subjected to limits.

     In the past year, a series of factors have reduced the supply of power to
California, which has resulted in wholesale power prices that have been
significantly higher than historical levels. Several factors contributed to this
increase. These included:

     - significantly increased volatility in prices and supplies of natural gas;

     - an unusually dry fall and winter in the Pacific Northwest, which reduced
       the amount of available hydroelectric power from that region (typically,
       California imports a portion of its power from this source);

     - the large number of power generating facilities in California nearing the
       end of their useful lives, resulting in increased downtime (either for
       repairs or because they have exhausted their air pollution credits and
       replacement credits have become too costly to acquire on the secondary
       market); and

     - continued obstacles to new power plant construction in California, which
       deprived the market of new power sources that could have, in part,
       ameliorated the adverse effects of the foregoing factors.


     As a result of this situation, two major California utilities that are
subject to the retail rate freeze, including Pacific Gas & Electric Company
("PG&E"), have faced wholesale prices that far exceed the retail prices they are
permitted to charge. This has led to significant underrecovery of costs by these
utilities; and they have been widely reported to be facing the prospect of
insolvency. As a consequence, these utilities have defaulted under a variety of
contractual obligations, including payment obligations to power generators. PG&E
has defaulted on payment obligations to Calpine. On April 6, 2001, PG&E filed
for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code.
As of March 31, 2001, Calpine recorded approximately $267 million in accounts
receivable with PG&E, plus a $68 million note receivable not yet due and
payable. Calpine is confident that PG&E, through a successful reorganization,
will be able to pay Calpine for all past due power sales, in addition to
electricity deliveries made on a going-forward basis. (For additional
information, including information on certain receivables, see Notes 15 and 19
of the Notes to Consolidated Financial Statements incorporated by reference
herein).



     Calpine has historically sold power to PG&E, which is one of the California
utilities that is subject to the rate freeze. Calpine is currently selling power
to PG&E pursuant to long-term qualifying facility ("QF") contracts, which are
subject to federal regulation under the Public Utility Regulatory Policies Act
of 1978, as


                                        6
<PAGE>   8


amended ("PURPA") (16 U.S.C. sec. 796 et seq.). The QF contracts, which are in
place at eleven facilities, representing nearly 600 megawatts of electricity for
Northern California customers, provide that the California Public Utilities
Commission ("CPUC") has the authority to determine the appropriate utility
"avoided cost" to be used to set energy payments for certain QF contracts,
including those for all of our QF plants in California which sell power to PG&E.
Section 390 of the California Public Utility Code provided QFs the option to
elect to receive energy payments based on the California Power Exchange ("PX")
market clearing price. In mid- 2000, our QF facilities elected this option and
were paid based upon the PX zonal day ahead clearing price ("PX Price") from
summer 2000 until January 19, 2001, when the PX ceased operating a day ahead
market. Since that time, the CPUC has ordered that the price to be paid for
energy deliveries by QFs electing the PX Price shall be based on a natural gas
cost-based "transition formula." The CPUC has conducted proceedings (R.
99-11-022) to determine whether the PX Price was the appropriate price for the
energy component upon which to base payments to QFs which had elected the PX
based pricing option. It is possible that the CPUC could order a payment
adjustment based on a different energy price determination. We believe that the
PX Price was the appropriate price for energy payments but there can be no
assurance that this will be the outcome of the CPUC proceedings. Legislation has
recently been introduced in the California legislature (SB 47X) that would
establish a fixed price for the QF contracts for a five year period and would
eliminate any PX Price adjustment prior to December 31, 2000. There can be no
assurances that this legislation will be enacted.


     We have continued to honor our contractual obligations to PG&E under our QF
contracts. To date, we have refrained from pursuing our collection remedies with
respect to PG&E's default, however, we have been actively involved with the
California utilities, the California legislature, and other interested parties
to develop legislation designed to stabilize energy prices through the
application of a long-term energy pricing methodology (for a five-year period)
in place of the short-term pricing methodology currently utilized under the QF
contracts, as discussed above. We also expect further legislation to enable the
California utilities to finance over a longer term the difference between the
wholesale prices that have been paid and the retail prices they received during
last fall and into this winter. We believe that this should enhance PG&E's
ability to make payment of all past due amounts. However, management cannot
predict the timing or ultimate outcome of the legislative process or the payment
of amounts due under our contracts.

     As this situation has deteriorated, California has taken steps to restore a
predictable and reliable power market to the State. Recently, California adopted
legislation permitting it to issue long-term revenue bonds to provide funding
for wholesale purchases of power. The bonds will be repaid with the proceeds of
payments by retail customers over time. The California Department of Water
Resources ("DWR") sought bids for long-term power supply contracts. We
successfully bid in that auction, and announced, as indicated below, that we
have signed three significant long-term power supply contracts with DWR.

     On February 7, 2001, we announced the signing of a 10-year, $4.6 billion
fixed-price contract with DWR to provide electricity to the State of California.
We committed to sell up to 1,000 megawatts of electricity, with initial
deliveries of 200 megawatts starting October 1, 2001, and increasing to 1,000
megawatts by January 1, 2004. This contract will continue through 2011. The
electricity will be sold directly to DWR on a 24-hour, 7-day-a-week basis.

     On February 28, 2001, we announced the signing of two long-term power sales
contracts with DWR. Under the terms of the first contract, a $5.2 billion,
10-year, fixed-price contract, we commit to sell up to 1,000 megawatts of
generation. Initial deliveries are scheduled to begin July 1, 2001 with 200
megawatts and increase to 1,000 megawatts by as early as July 2002. Under the
terms of the second contract, a 20-year contract totaling up to $3.1 billion, we
will supply DWR with up to 495 megawatts of peaking generation, beginning with
90 megawatts as early as August 2001, and increasing up to 495 megawatts as
early as August 2002.

     On March 31, 2001, we announced the signing of a two-month deal to provide
555 megawatts of electricity to DWR from our new South Point Energy Center
during plant testing, effective immediately through May 15, 2001.

     FERC Investigation into California Wholesale Markets.  Beginning in May
2000, wholesale energy prices in the California markets increased to levels well
above 1999 levels. In response, on June 28, 2000, the

                                        7
<PAGE>   9

ISO Board of Governors reduced the price cap applicable to the ISO's wholesale
energy and ancillary services markets from $750/MWh to $500/MWh. The ISO
subsequently reduced the price cap to $250/MWh on August 1, 2000. During this
period, however, the California Power Exchange Corporation ("PX") maintained a
separate price cap set at a much higher level applicable to the "day-ahead" and
"day-of" markets administered by the PX. On August 23, 2000, the Federal Energy
Regulatory Commission ("FERC") denied a complaint filed August 2, 2000 by San
Diego Gas & Electric Company ("SDG&E") that sought to extend the ISO's $250
price cap to all California energy and ancillary service markets, not just the
markets administered by the ISO. However, in its order denying the relief sought
by SDG&E, the FERC instructed its staff to initiate an investigation of the
California power markets and to report its findings to the FERC and held further
hearing procedures in abeyance pending the outcome of this investigation.

     On November 1, 2000, the FERC released a Staff Report detailing the results
of the Staff investigation, together with an "Order Proposing Remedies for
California Wholesale Markets" ("November 1 Order"). In the November 1 Order, the
FERC found that the California power market structure and market rules were
seriously flawed, and that these flaws, together with short supply relative to
demand, resulted in unusually high energy prices. The November 1 Order proposed
specific remedies to the identified market flaws, including: (a) imposition of a
so-called "soft" price cap at $150/MWh to be applied to both the PX and ISO
markets, which would allow bids above $150/MWh to be accepted, but will subject
such bids to certain reporting obligations requiring sellers to provide cost
data and/or identify applicable opportunity costs and specifying that such bids
may not set the overall market clearing price, (b) elimination of the
requirement that the California utilities sell into and buy from the PX, (c)
establishment of independent non-stakeholder governing boards for the ISO and
the PX, and (d) establishment of penalty charges for scheduling deviations
outside of a prescribed range. In the November 1 Order the FERC established
October 2, 2000, the date 60 days after the filing of the SDG&E complaint, as
the "refund effective date." Under the November 1 Order, rates charged for
service after that date through December 31, 2002 will remain subject to refund
if determined by the FERC not to be just and reasonable. While the FERC
concluded that the Federal Power Act and prior court decisions interpreting that
act strongly suggested that refunds would not be permissible for charges in the
period prior to October 2, 2000, it noted that it was willing to explore
proposals for equitable relief with respect to charges made in that period. All
of the Company's receivables from PG&E relate to energy generated by QF
facilities. Under FERC regulations, QF contracts are exempt from regulation
under the Federal Power Act, which is the legislation that provides the
authority for the FERC to compel refunds or frame other equitable relief with
respect to the California wholesale markets. Therefore, the Company believes
that any refund or other equitable remedy that the FERC may impose with respect
to the California wholesale markets will not affect the Company's ability to
pursue payment by PG&E of all past due amounts as described above.

     On December 15, 2000, the FERC issued a subsequent order that affirmed in
large measure the November 1 Order (the "December 15 Order"). Various parties
have filed requests for administrative rehearing and for judicial review of
aspects of the FERC's December 15 Order. The outcome of these proceedings, and
the extent to which the FERC or a reviewing court may revise aspects of the
December 15 Order or the extent to which these proceedings may result in a
refund of or reduction in the amounts charged by the Company's subsidiaries for
power sold in the ISO and PX markets, cannot be determined at this time.

                         CALPINE CANADA ENERGY FINANCE

     Calpine Canada Energy Finance ULC is an unlimited liability company
organized in March 2001 under the laws of Nova Scotia, Canada. Calpine Canada
Energy Finance is a wholly-owned special purpose finance subsidiary of Calpine
Corporation that engages in financing activities to raise funds for the business
operations of Calpine and its subsidiaries. Calpine Canada Energy Finance will
issue debt securities which will be fully and unconditionally guaranteed by
Calpine.


     The registered office of Calpine Canada Energy Finance ULC is Suite 800,
Purdy's Wharf, Tower 1, 1959 Upper Water Street, P.O. Box 997, Halifax, Nova
Scotia B3J 3N2, telephone (902) 420-3335.


                                        8
<PAGE>   10

                                  RISK FACTORS

     Investing in our securities involves risk. Please see the risk factors
described in our Annual Report on Form 10-K for the year ended December 31,
2000, which is incorporated by reference in this prospectus.

     Before making an investment decision, you should carefully consider these
risks as well as other information contained or incorporated by reference in
this prospectus. The risks and uncertainties described are not the only ones
facing our company. Additional risks and uncertainties not presently known to us
or that we currently deem immaterial may also impair our business operations.

                      WHERE YOU CAN FIND MORE INFORMATION

     Calpine files annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may obtain any document we file with the SEC at the SEC's public reference room
in Washington, D.C., Chicago, Illinois and New York, New York. You may obtain
information on the operation of the SEC's public reference facilities by calling
the SEC at 1-800-SEC-0330. You can request copies of these documents, upon
payment of a duplicating fee, by writing to the SEC at its principal office at
450 Fifth Street, N.W., Washington, D.C. 20549-1004. Our SEC filings are also
accessible through the Internet at the SEC's website at http://www.sec.gov.

     Calpine Canada Energy Finance is not currently subject to the information
reporting requirements of the Securities Exchange Act of 1934. Although Calpine
Canada Energy Finance will become subject to such requirements upon the
effectiveness of this Registration Statement, it is not expected that Calpine
Canada Energy Finance will be required to file separate reports under the
Securities Exchange Act of 1934 because, in reliance upon the applicable
exemption to such requirements:

     - all of the voting rights of Calpine Canada Energy Finance will be owned
       by Calpine, either directly or through wholly-owned subsidiaries of
       Calpine, which files regular reports with the SEC,

     - Calpine Canada Energy Finance has no operations other than transferring
       funds to Calpine or its subsidiaries, and

     - Calpine will fully and unconditionally guarantee Calpine Canada Energy
       Finance's obligations and the rights of holders and no subsidiary of
       Calpine will guarantee the obligations of Calpine Canada Energy Finance.

     The SEC permits us to "incorporate by reference" into this prospectus the
information in documents we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus and later information that we file with the SEC will update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended, until we sell all
of the securities being registered or until this offering is otherwise
terminated:

     - Calpine's Annual Report on Form 10-K for the year ended December 31,
       2000; and


     - Calpine's Current Reports on Form 8-K dated February 6, 2001 and April 9,
       2001.


     If you request a copy of any or all of the documents incorporated by
reference, then we will send to you the copies you requested at no charge.
However, we will not send exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents. You should direct
requests for such copies to Calpine Corporation, 50 West San Fernando Street,
San Jose, California 95113, attention: Lisa M. Bodensteiner, Assistant
Secretary, telephone: (408) 995-5115.

                                        9
<PAGE>   11

     We have filed with the SEC a joint registration statement on Form S-3 under
the Securities Act, covering the securities described in this prospectus. This
prospectus does not contain all of the information included in the registration
statement. Any statement made in this prospectus concerning the contents of any
contract, agreement or other document is only a summary of the actual contract,
agreement or other document. If we have filed any contract, agreement or other
document as an exhibit to the registration statement, you should read the
exhibit for a more complete understanding of the document or matter involved.
Each statement regarding a contract, agreement or other document is qualified in
its entirety by reference to the actual document.

                                        10
<PAGE>   12

                           FORWARD-LOOKING STATEMENTS

     Some of the statements contained in this prospectus or any prospectus
supplement and incorporated by reference into this prospectus or any prospectus
supplement are forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act and are
subject to the safe harbor created by the Private Securities Litigation Reform
Act of 1995. These statements include declarations regarding our or our
management's intents, beliefs or current expectations. In some cases, you can
identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," or "continue" or the negative of such terms or other
comparable terminology. Any forward-looking statements are not guarantees of
future performance and actual results could differ materially from those
indicated by the forward-looking statements. Forward-looking statements involve
known and unknown risks, uncertainties, and other factors that may cause our or
our industry's actual results, levels of activity, performance, or achievements
to be materially different from any future results, levels of activity,
performance, or achievements expressed or implied by such forward-looking
statements.

     Among the important factors that could cause actual results to differ
materially from those indicated by such forward-looking statements are:


     - changes in government regulations, including pending changes in
      California and anticipated deregulation of the electric energy industry;



     - commercial operations of new plants that may be delayed or prevented
      because of various development and construction risks, such as a failure
      to obtain financing and the necessary permits to operate or the failure of
      third-party contractors to perform their contractual obligations;



     - cost estimates are preliminary and actual costs may be higher than
      estimated;



     - the assurance that Calpine will develop additional plants;



     - a competitor's development of lower-cost generating gas-fired power
      plants;



     - the risks associated with marketing and selling power from power plants
      in the newly competitive energy market;



     - the risks associated with marketing and selling combustion turbine parts
      and components in the competitive combustion turbine parts market;



     - the risks associated with engineering, designing and manufacturing
      combustion turbine parts and components;



     - delivery and performance risks associated with combustion turbine parts
      and components attributable to production, quality control, suppliers and
      transportation;



     - the successful exploitation of an oil or gas resource that ultimately
      depends upon the geology of the resource, the total amount and costs to
      develop recoverable reserves and operations factors relating to the
      extraction of natural gas; and


     - other risks identified from time to time in our reports and registration
       statements filed with the SEC, including the risk factors identified in
       our Annual Report on Form 10-K for the year ended December 31, 2000,
       which is incorporated by reference in this prospectus.

Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of such statements. We
are under no duty to update any of the forward-looking statements after the date
of this prospectus to conform such statements to actual results.

                                        11
<PAGE>   13

                CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES

     The following table sets forth Calpine's consolidated ratios of earnings to
fixed charges for the indicated periods.

<TABLE>
<CAPTION>
      YEAR ENDED DECEMBER 31,
  --------------------------------
  1996   1997   1998   1999   2000
  ----   ----   ----   ----   ----
  <S>    <C>    <C>    <C>    <C>
  1.46x  1.72x  1.69x  1.77x  2.04x
</TABLE>


     For purposes of computing the consolidated ratio of earnings to fixed
charges, earnings consist of pretax income before adjustment for minority
interests in consolidated subsidiaries or income or loss from equity investees,
plus fixed charges, amortization of capitalized interest, and distributed income
of equity investees, reduced by interest capitalized, distributions on the
company-obligated mandatorily redeemable convertible preferred securities of its
subsidiary trusts ("HIGH TIDES(SM)") and the minority interest in pretax income
of subsidiaries that have not incurred fixed charges. Fixed charges consist of
interest expensed and capitalized (including amortized premiums, discounts and
capitalized expenses related to indebtedness), an estimate of the interest
within rental expense, and the distributions on the HIGH TIDES(SM).


                                USE OF PROCEEDS

     Unless otherwise specified in a prospectus supplement accompanying this
prospectus, we will add the net proceeds from the sale of the securities to
which this prospectus and the prospectus supplement relate to our general funds,
which we will use for financing power projects under development or
construction, working capital, general corporate purposes and any other purpose
specified in a prospectus supplement. We may conduct concurrent or additional
financings at any time. The net proceeds from the sale of debt securities by
Calpine Canada Energy Finance to which this prospectus relates will be lent to
Calpine and its affiliates by Calpine Canada Energy Finance pursuant to an
intercompany loan.

                              PLAN OF DISTRIBUTION

     We may sell our securities through agents, underwriters, dealers or
directly to purchasers.

     - Unless we indicate otherwise in our prospectus supplement, our agents
       will act on a best efforts basis for the period of their appointment.

     - Our agents may be deemed to be underwriters under the Securities Act of
       any of our securities that they offer or sell.

     We may use an underwriter or underwriters in the offer or sale of our
securities.

     - If we use an underwriter or underwriters, we will execute an underwriting
       agreement with the underwriter or underwriters at the time that we reach
       an agreement for the sale of our securities.

     - We will include the names of the specific managing underwriter or
       underwriters, as well as any other underwriters, and the terms of the
       transactions, including the compensation the underwriters and dealers
       will receive, in our prospectus supplement.

     - The underwriters will use our prospectus supplement to sell our
       securities.

     We may use a dealer to sell our securities.

     - If we use a dealer, we, as principal, will sell our securities to the
       dealer.

     - The dealer will then sell our securities to the public at varying prices
       that the dealer will determine at the time it sells our securities.

     - We will include the name of the dealer and the terms of our transactions
       with the dealer in our prospectus supplement.

                                        12
<PAGE>   14

     We may directly solicit offers to purchase our securities, and we may
directly sell our securities to institutional or other investors. We will
describe the terms of our direct sales in our prospectus supplement.

     Agents, underwriters, and dealers may be entitled, under agreements entered
into with us, to indemnification by Calpine and, if applicable, Calpine Canada
Energy Finance against certain liabilities, including liabilities under the
Securities Act. Our agents, underwriters, and dealers, or their affiliates, may
be customers of, engage in transactions with or perform services for us, in the
ordinary course of business.

     We may authorize our agents and underwriters to solicit offers by certain
institutions to purchase our securities at the public offering price under
delayed delivery contracts.

     - If we used delayed delivery contracts, we will disclose that we are using
       them in our prospectus supplement and will tell you when we will demand
       payment and delivery of the securities under the delayed delivery
       contracts.

     - These delayed delivery contracts will be subject only to the conditions
       that we set forth in our prospectus supplement.

     - We will indicate in our prospectus supplement the commission that
       underwriters and agents soliciting purchases of our securities under
       delayed contracts will be entitled to receive.

                                        13
<PAGE>   15

                          DESCRIPTION OF CAPITAL STOCK

     Calpine's authorized capital stock consists of 500,000,000 shares of common
stock, $.001 par value, and 10,000,000 shares of preferred stock, $.001 par
value. The following summary is qualified in its entirety by the provisions of
Calpine's certificate of incorporation and by-laws, which have been filed as
exhibits to the Registration Statement of which this prospectus constitutes a
part. The information provided below reflects the 2 for 1 split of Calpine's
common stock that became effective on October 7, 1999, the 2 for 1 split of
Calpine's common stock that became effective on June 8, 2000 and the 2 for 1
split of Calpine's common stock that became effective on November 14, 2000.

COMMON STOCK

     The holders of common stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Subject to preferences that may be
applicable to any outstanding preferred stock, the holders of common stock are
entitled to receive ratably such dividends, if any, as may be declared from time
to time by the board of directors out of legally available funds. See "Dividend
Policy." In the event of our liquidation, dissolution or winding up, the holders
of common stock are entitled to share ratably in all assets remaining after
payment of liabilities, subject to prior liquidation rights of preferred stock,
if any, then outstanding. The common stock has no preemptive or conversion
rights or other subscription rights. There are no redemption or sinking fund
provisions applicable to the common stock. All shares of common stock to be
outstanding upon the redemption or exchange of the exchangeable shares will be
fully paid and non-assessable. Pursuant to a rights agreement entered into in
June of 1997, Calpine's shares of common stock outstanding prior to the
occurrence of events specified in the rights agreement have certain preferred
share purchase rights, which are set forth in more detail in the rights
agreement incorporated by reference as an exhibit to the Registration Statement
of which this prospectus constitutes a part. See "-- Anti-Takeover Effects of
Provisions of the Certificate of Incorporation, Bylaws, Rights Plan and Delaware
Law -- Rights Plan."

PRICE RANGE OF COMMON STOCK

     Calpine's common stock is traded on the New York Stock Exchange under the
symbol "CPN." Public trading of the common stock commenced on September 20,
1996. Prior to that, there was no public market for the common stock. The
following table sets forth, for the periods indicated, the high and low sale
price per share of the common stock on the New York Stock Exchange.


<TABLE>
<CAPTION>
                                                               HIGH        LOW
                                                              -------    -------
<S>                                                           <C>        <C>
1999
First Quarter...............................................  $ 4.672    $     3.157
Second Quarter..............................................    7.375          4.391
Third Quarter...............................................   11.969          6.852
Fourth Quarter..............................................   16.375         10.633
2000
First Quarter...............................................  $30.750    $    16.094
Second Quarter..............................................   35.219         18.125
Third Quarter...............................................   52.250         32.250
Fourth Quarter..............................................   52.969         32.250
2001
First Quarter...............................................  $58.04     $    29.00
Second Quarter (through April 12, 2001).....................   56.25          45.00
</TABLE>



     As of April 12, 2001, there were approximately 667 holders of record of our
common stock. On April 12, 2001, the last sale price reported on the New York
Stock Exchange for our common stock was $51.38 per share.


                                        14
<PAGE>   16

DIVIDEND POLICY

     We do not anticipate paying any cash dividends on Calpine's common stock in
the foreseeable future because we intend to retain our earnings to finance the
expansion of our business and for general corporate purposes. In addition, our
ability to pay cash dividends is restricted under our indentures and our other
debt agreements. Future cash dividends, if any, will be at the discretion of our
board of directors and will depend upon, among other things, our future
operations and earnings, capital requirements, general financial condition,
contractual restrictions and such other factors as the board of directors may
deem relevant.

PREFERRED STOCK

     The following description of preferred stock and the description of the
terms of a particular series of preferred stock that will be set forth in the
related prospectus supplement are not complete. These descriptions are qualified
in their entirety by reference to the certificate of designation relating to
that series. The rights, preferences, privileges and restrictions of the
preferred stock of each series will be fixed by the certificate of designation
relating to that series that will be filed as an amendment to this registration
statement at the time such series of preferred stock is offered. The prospectus
supplement also will contain a description of certain United States federal
income tax consequences relating to the purchase and ownership of the series of
preferred stock that is described in the prospectus supplement.


     As of April 16, 2001, there were no shares of preferred stock outstanding.
The board of directors has the authority, without further vote or action by the
stockholders, to issue from time to time up to 10,000,000 shares of preferred
stock in one or more series, and to fix the rights, preferences, privileges,
qualifications, limitations and restrictions granted to or imposed upon any
wholly unissued shares of undesignated preferred stock, including without
limitation dividend rights, if any, voting rights, if any, and liquidation and
conversion rights, if any. The board of directors has the authority to fix the
number of shares constituting any series and the designations of such series
without any further vote or action by the stockholders. The board of directors,
without stockholder approval, can issue preferred stock with voting and
conversion rights which could adversely affect the voting power of the holders
of common stock. The issuance of preferred stock may have the effect of
delaying, deferring or preventing a change in control of Calpine's company, or
could delay or prevent a transaction that might otherwise give Calpine's
stockholders an opportunity to realize a premium over the then prevailing market
price of the common stock.



     Calpine's board of directors has authorized the issuance of up to 500,000
shares of Series A Participating Preferred Stock, par value $.001 per share,
pursuant to a rights plan adopted by Calpine's board of directors on June 5,
1997. On April 16, 2001, no shares of Calpine's participating preferred stock
were outstanding. A description of the rights plan and the participating
preferred stock is set forth under "-- Anti-Takeover Effects of Provisions of
the Certificate of Incorporation, Bylaws, Rights Plan and Delaware -- Rights
Plan," below.


     Upon consummation of the Encal acquisition, a series of preferred stock,
consisting of one share, will be designated as special voting preferred stock,
having a par value of $.001 per share and a liquidation preference of $.01.
Except as otherwise required by law or Calpine's certificate of incorporation,
the one share of special voting preferred stock will possess a number of votes
for the election of directors and on all other matters submitted to a vote of
Calpine's stockholders equal to the number of outstanding Calpine common stock
equivalent shares issued by Calpine's wholly-owned subsidiary from time to time
and not owned by Calpine or any entity controlled by Calpine. The holders of
Calpine common stock and the holder of the special voting preferred stock will
vote together as a single class on all matters on which holders of Calpine's
common stock are eligible to vote. In the event of Calpine's liquidation,
dissolution or winding-up, all outstanding Calpine common stock equivalent
shares will automatically be exchanged for shares of Calpine's common stock, and
the holder of the special voting preferred stock will not be entitled to receive
any assets available for distribution to Calpine's stockholders. The holder of
the special voting preferred stock will not be entitled to receive dividends.
The share of special voting preferred stock will be issued to a Canadian trust
company, as trustee under a voting and exchange trust agreement among Calpine,
Calpine Canada and the trustee. At such time as the one share of special voting
preferred stock has no votes attached to it because there are no Calpine

                                        15
<PAGE>   17

common stock equivalent shares outstanding not owned by Calpine or an entity
controlled by Calpine, the share of special voting preferred stock will be
canceled.

     A prospectus supplement with respect to the issuance of a series of
preferred stock will specify:

     - the maximum number of shares,

     - the designation of the shares,

     - the annual dividend rate, if any, whether the dividend rate is fixed or
       variable, whether the series of preferred stock will be issued with
       original issue discount and, if so, the computed dividend rate thereon,
       the date dividends will accrue, the dividend payment dates, and whether
       dividends will be cumulative,

     - the price and the terms and conditions for redemption, if any, including
       redemption at our option or at the option of the holders, including the
       time period for redemption, and any accumulated dividends or premiums,

     - the liquidation preference, if any, and any accumulated dividends upon
       the liquidation, dissolution or winding up Calpine's affairs,

     - any sinking fund or similar provision, and, if so, the terms and
       provisions relating to the purpose and operation of the fund,

     - the terms and conditions, if any, for conversion or exchange of shares of
       any other class or classes of our capital stock or any series of any
       other class or classes, or of any other series of the same class, or any
       other securities or assets, including the price or the rate of conversion
       or exchange and the method, if any, of adjustment,

     - the voting rights, if any, and

     - any or all other preferences and relative, participating, optional or
       other special rights, privileges or qualifications, limitations or
       restrictions.

     Preferred stock will be fully paid and nonassessable upon issuance. The
preferred stock or any series of preferred stock may be represented, in whole or
in part, by one or more global certificates, which will have an aggregate
liquidation preference equal to that of the preferred stock represented by the
global certificate.

     Each global certificate will:

     - be registered in the name of a depositary or a nominee of the depositary
       identified in the prospectus supplement,

     - be deposited with such depositary or nominee or a custodian for the
       depositary, and

     - bear a legend regarding the restrictions on exchanges and registration of
       transfer and any other matters as may be provided for under the
       certificate of designation.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE CERTIFICATE OF INCORPORATION, BYLAWS
AND DELAWARE LAW

CERTIFICATE OF INCORPORATION AND BYLAWS

     Calpine's certificate of incorporation provides that Calpine's board of
directors is classified into three classes of directors serving staggered,
three-year terms. The certificate of incorporation also provides that directors
may be removed only by the affirmative vote of the holders of two-thirds of the
shares of Calpine's capital stock entitled to vote, voting together as single
class. Any vacancy on the board of directors may be filled only by vote of the
majority of directors then in office. Further, the certificate of incorporation
provides that any business combination (as defined therein) requires the
affirmative vote of the holders of two-thirds of the shares of Calpine's capital
stock entitled to vote, voting together as a single class. The certificate of
incorporation also provides that all stockholder actions must be effected at a
duly called meeting and not by a consent in writing. The bylaws provide that
Calpine's stockholders may call a special meeting of stockholders

                                        16
<PAGE>   18

only upon a request of stockholders owning at least 50% of Calpine's capital
stock. These provisions of the certificate of incorporation and bylaws could
discourage potential acquisition proposals and could delay or prevent a change
in control of Calpine's company. These provisions are intended to enhance the
likelihood of continuity and stability in the composition of the board of
directors and in the policies formulated by the board of directors and to
discourage certain types of transactions that may involve an actual or
threatened change of control of Calpine's company. These provisions are designed
to reduce Calpine's vulnerability to an unsolicited acquisition proposal. The
provisions also are intended to discourage certain tactics that may be used in
proxy fights. However, such provisions could have the effect of discouraging
others from making tender offers for Calpine's shares and, as a consequence,
they also may inhibit fluctuations in the market price of Calpine's shares that
could result from actual or rumored takeover attempts. Such provisions also may
have the effect of preventing changes in Calpine's management.

     Rights Plan.  On June 5, 1997, Calpine adopted a stockholders' rights plan
to strengthen Calpine's ability to protect Calpine's stockholders. The rights
plan is designed to protect against abusive or coercive takeover tactics that
are not in the best interests of Calpine or its stockholders. To implement the
rights plan, Calpine declared a dividend of one preferred share purchase right
for each outstanding share of Calpine's common stock held on record as of June
18, 1997, and directed the issuance of one preferred share purchase right with
respect to each share of Calpine's common stock that shall become outstanding
thereafter until the rights become exercisable or they expire as described
below. Each right initially represents a contingent right to purchase, under
certain circumstances, one one-thousandth of a share, called a "unit," of
Calpine's Series A Participating Preferred Stock, par value $.001 per share, at
a price of $80.00 per unit, subject to adjustment. The rights become exercisable
and trade independently from Calpine's common stock upon the public announcement
of the acquisition by a person or group of 15% or more of Calpine's common
stock, or ten days after commencement of a tender or exchange offer that would
result in the acquisition of 15% or more of Calpine's common stock. Each unit
purchased upon exercise of the rights will be entitled to a dividend equal to
any dividend declared per share of common stock and will have one vote, voting
together with the common stock. In the event of Calpine's liquidation, each
share of the participating preferred stock will be entitled to any payment made
per share of common stock.

     If Calpine is acquired in a merger or other business combination
transaction after a person or group has acquired 15% or more of Calpine's common
stock, each right will entitle its holder to purchase at the right's exercise
price a number of the acquiring company's shares of common stock having a market
value of twice the right's exercise price. In addition, if a person or group
acquires 15% or more of Calpine's common stock, each right will entitle its
holder (other than the acquiring person or group) to purchase, at the right's
exercise price, a number of fractional shares of Calpine's participating
preferred stock or shares of Calpine's common stock having a market value of
twice the right's exercise price.

     The rights expire on June 18, 2007, unless redeemed earlier by Calpine.
Calpine can redeem the rights at a price of $0.01 per right at any time before
the rights become exercisable, and thereafter only in limited circumstances.

DELAWARE ANTI-TAKEOVER STATUTE

     Calpine is subject to Section 203 of the Delaware General Corporation Law
("Section 203"), which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the date that such stockholder
became an interested stockholder, unless: (1) prior to such date, the board of
directors of the corporation approved either the business combination or the
transaction that resulted in the stockholder becoming an interested stockholder;
(2) upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares owned (x) by persons who are directors and also
officers and (y) by employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer; or (3) on or subsequent to
such date, the business combination is approved by the board of directors and
authorized at an annual or special meeting

                                        17
<PAGE>   19

of stockholders, and not by written consent, by the affirmative vote of at least
66 2/3% of the outstanding voting stock that is not owned by the interested
stockholder.

     Section 203 defines the term business combination to include: (1) any
merger or consolidation involving the corporation or any of its direct of
indirect majority-owned subsidiaries and the interested stockholder; (2) any
sale, transfer, pledge or other disposition of 10% or more of the assets of the
corporation or any of its direct of indirect majority-owned subsidiaries
involving the interested stockholder; (3) subject to certain exceptions, any
transaction that results in the issuance or transfer by the corporation of any
stock of the corporation or any of its direct of indirect majority-owned
subsidiaries of any stock of the corporation or that subsidiary to the
interested stockholder; (4) any transaction involving the corporation or any of
its direct of indirect majority-owned subsidiaries that has the effect of
increasing the proportionate share of the stock of any class or series of the
corporation or that subsidiary beneficially owned by the interested stockholder;
or (5) the receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or through
the corporation or any of its direct of indirect majority-owned subsidiaries. In
general, Section 203 defines an interested stockholder as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.

                                        18
<PAGE>   20

                       DESCRIPTION OF THE DEBT SECURITIES

     The following is a general description of the debt securities to which this
prospectus and any prospectus supplement may relate. The particular terms
relating to each debt security will be set forth in a prospectus supplement.
Unless otherwise stated, the senior debt securities and the subordinated debt
securities are together referred to as the "debt securities."

GENERAL

     Calpine may issue from time to time one or more series of debt securities
under one or more separate indentures between Calpine and Wilmington Trust
Company, as trustee, and Calpine Canada Energy Finance may issue from time to
time one or more series of debt securities under an indenture between Calpine
Canada Energy Finance and Wilmington Trust Company, as trustee.

     For purposes of this section, references to the "issuer" are to Calpine, in
the case of debt securities issued by Calpine, and to Calpine Canada Energy
Finance, in the case of debt securities issued by Calpine Canada Energy Finance,
and references to the "guarantor" are to Calpine with respect to debt securities
issued by Calpine Canada Energy Finance. Additionally, in the case of debt
securities issued by Calpine Canada Energy Finance, the term "indenture"
includes the guarantee agreement pursuant to which the guarantor guarantees the
debt securities.

     The debt securities will be direct, unsecured obligations of the issuer.
The senior debt securities will rank equally with all other senior debt of the
issuer. The indentures will not limit the amount of debt securities which the
issuer may issue. The subordination provisions of any subordinated debt
securities will be described in an applicable prospectus supplement.

     Almost all of Calpine's operations are conducted through Calpine's
subsidiaries and other affiliates. As a result, Calpine depends almost entirely
upon their earnings and cash flow to service Calpine's indebtedness, including
Calpine's ability to pay the interest on and principal of Calpine's debt
securities. The non-recourse project financing agreements of certain of
Calpine's subsidiaries and other affiliates generally restrict their ability to
pay dividends, make distributions or otherwise transfer funds to Calpine prior
to the payment of other obligations, including operating expenses, debt service
and reserves. Calpine Canada Energy Finance is a special purpose financing
subsidiary formed solely as a financing vehicle for Calpine and its
subsidiaries. Therefore, the ability of Calpine Canada Energy Finance to pay its
obligations under the debt securities is dependent upon the receipt by it of
payments from Calpine and its subsidiaries. If Calpine were not to make such
payments for any reason, the holders of the debt securities would have to rely
on the enforcement of Calpine's guarantee described below.

     Calpine's subsidiaries and other affiliates are separate and distinct legal
entities and will have no obligation to pay any amounts due on the debt
securities issued by Calpine hereunder, and will not guarantee the payment of
interest on or principal of the debt securities issued by Calpine hereunder. The
right of Calpine's debt security holders to receive any assets of any of
Calpine's subsidiaries or other affiliates upon Calpine's liquidation or
reorganization will be subordinated to the claims of any subsidiaries' or other
affiliates' creditors (including trade creditors and holders of debt issued by
Calpine's subsidiaries or affiliates including Calpine Canada Energy Finance).
As of December 31, 2000, Calpine's subsidiaries had $1.5 billion of project
financing. Calpine intends to utilize non-recourse project financing when
appropriate in the future, and this financing will be effectively senior to
Calpine's debt securities.

     The following description is only a summary of the material provisions of
the proposed indentures for the debt securities. We urge you to read the forms
of indentures because they, and not this description, describe every detail of
the terms of the debt securities. A copy of each form of indenture is included
as an exhibit to this registration statement and is available upon request made
to us. The summary below of the general terms of the debt securities will be
supplemented by the more specific terms in a prospectus supplement. Unless
otherwise stated herein or in an applicable prospectus supplement, the following
indenture description will apply to both senior and subordinated debt
securities.

                                        19
<PAGE>   21

TERMS APPLICABLE TO DEBT SECURITIES

     The prospectus supplement for a particular series of debt securities will
specify the following terms of the series of debt securities:

     - the designation, the aggregate principal amount and the authorized
       denominations, if other than $1,000 and integral multiples of $1,000;

     - the percentage of the principal amount at which the debt securities will
       be issued;

     - the date or date on which the debt securities will mature;

     - the currency, currencies or currency units in which payments on the debt
       securities will be payable;

     - the rate or rates at which the debt securities will bear interest, if
       any, or the method of determination of such rate or rates;

     - the date or dates from which the interest, if any, shall accrue, the
       dates on which the interest, if any, will be payable and the method of
       determining holders to whom any of the interest shall be payable;

     - the prices, if any, at which, and the dates at or after which, the issuer
       may or must repay, repurchase or redeem the debt securities;

     - any right to covert the debt securities into, or exchange the debt
       securities for, shares of Calpine common stock or other securities or
       property;

     - any sinking fund obligation with respect to the debt securities;

     - any special United States federal income tax consequences;

     - the exchanges, if any, on which the debt securities may be listed; and

     - any other material terms of the debt securities consistent with the
       provisions of the indenture.

     Unless otherwise specified in the prospectus supplement, the issuer will
compute interest payments on the basis of a 360-day year consisting of twelve
30-day months.

     Some of the debt securities may be issued as discounted debt securities to
be sold at a substantial discount below their stated principal amount. The
prospectus supplement relating to any discounted series of debt securities will
describe any Federal income tax consequences and other special consequences
applicable to discounted debt securities.

     The indentures governing the senior debt does not contain any provisions
that:

     - limit the issuer's ability to incur indebtedness; or

     - provide protection in the event the issuer choose to engage in a highly
       leveraged transaction, reorganization, restructuring, merger or similar
       transaction.

REOPENING OF ISSUE

     The issuer may, from time to time, reopen an issue of debt securities and
issue additional debt securities with the same terms (including issue date,
maturity and interest rate) as debt securities issued on an earlier date. After
such additional debt securities are issued, they will be fungible with the debt
securities issued on the earlier date.

RANKING

     The senior debt securities issued by Calpine will be unsecured and will
rank equal in right of payment with all of Calpine's existing and future
unsecured and unsubordinated indebtedness, including, without limitation,
Calpine's obligations under the Amended and Restated Credit Agreement, dated as
of May 23, 2000, as amended, among Calpine, Bank of Nova Scotia, as Lead
Arranger and Administrative Agent, and Bayerische Landesbank, as Co-Arranger and
Syndication Agent, and the various commercial lending

                                        20
<PAGE>   22

institutions named therein as lenders (as it may be further amended, refinanced,
replaced, renewed or extended from time to time) and Calpine's other outstanding
senior debt securities, including Calpine's 7 5/8% Senior Notes due 2006,
Calpine's 7 3/4% Senior Notes due 2009, Calpine's 7 7/8% Senior Notes due 2008,
Calpine's 8 3/4% Senior Notes due 2007, Calpine's 9 1/4% Senior Notes due 2004,
Calpine's 10 1/2% Senior Notes due 2006, Calpine's 8 1/4% Senior Notes due 2005,
Calpine's 8 5/8% Senior Notes due 2010 and Calpine's 8 1/2% Senior Notes due
2011. At December 31, 2000, Calpine had approximately $2.6 billion of
indebtedness outstanding that would rank equally with the senior debt
securities.

     Unless otherwise provided in the prospectus supplement relating to such
securities, debt securities issued by Calpine Canada Energy Finance will be:

     - senior unsecured obligations of Calpine Canada Energy Finance and will
       rank equally and ratably with all other unsecured and unsubordinated
       indebtedness of Calpine Canada Energy Finance, and

     - guaranteed on a senior unsecured basis by Calpine, which guarantee will
       rank equally and ratably with all other unsecured and unsubordinated
       indebtedness of Calpine.

     The subordinated debt securities issued by Calpine will be subordinate and
junior in right of payment to all of Calpine's senior indebtedness, including
any guarantee by Calpine of Calpine Canada Energy Finance's senior debt
securities. The subordinated debt securities of Calpine Canada Energy Finance
will be subordinate and junior in right of payment to all of Calpine Canada
Energy Finance's senior indebtedness.

GUARANTEES

     Calpine will fully and unconditionally guarantee to each holder of a debt
security issued by Calpine Canada Energy Finance and authenticated and delivered
by the trustee the due and punctual payment of the principal of, and any premium
and interest on, the debt security, when and as it becomes due and payable,
whether at maturity, upon acceleration, by call for redemption, repayment or
otherwise in accordance with the terms of the debt securities and of the related
indenture. The claims of holders under the guarantee by Calpine will be
effectively subordinated to the claims of creditors of Calpine's subsidiaries
other than Calpine Canada Energy Finance.

     Under its guarantee agreement, Calpine will:

     - agree that, if an event of default occurs under the debt securities, its
       obligations under the guarantees will be absolute and unconditional and
       will be enforceable irrespective of any invalidity, irregularity or
       unenforceability of any series of the debt securities or the related
       indenture or any supplement thereto, and

     - waive its right to require the trustee or the holders to pursue or
       exhaust their legal or equitable remedies against Calpine Canada Energy
       Finance before exercising their rights under the guarantees.

COVENANTS

     The indentures shall provide that, except as otherwise set forth under "--
Defeasance," below, for so long as any debt securities remain outstanding or any
amount remains unpaid on any of the debt securities, the issuer and the
guarantor, if any, will comply with the applicable terms of the covenants
contained in the indentures including the following:


PAYMENT OF SECURITIES


     The issuer will duly and punctually pay the principal of and interest on
the debt securities in accordance with the terms of the debt securities and the
indenture.


MAINTENANCE OF OFFICE OR AGENCY


     The issuer will maintain in the Borough of Manhattan, the City of New York,
an office or agency where the debt securities may be paid and notices and
demands to or upon the issuer in respect of the debt securities

                                        21
<PAGE>   23

and the indentures may be served and an office or agency where debt securities
may be surrendered for registration of transfer or exchange. The issuer will
give prompt written notice to the trustee of the location, and any change in the
location, of any such office or agency. If at any time the issuer shall fail to
maintain any required office or agency or shall fail to furnish the trustee with
the address of any required office or agency, all presentations, surrenders,
notices and demands may be served at the office of the trustee.


FURTHER ASSURANCES


     The issuer, the guarantor, if any, and the trustee will execute and deliver
all documents, instruments and agreements, and do all other acts and things as
may be reasonably required, to enable the trustee to exercise and enforce its
rights under the indentures and under the documents, instruments and agreements
required under the indentures and to carry out the intent of the indentures.


LIMITATION ON SALE/LEASEBACK TRANSACTIONS


     Under the terms of the indentures, the issuer and the guarantor, if any,
shall not, and shall not permit any of their respective Restricted Subsidiaries
to, enter into any Sale/Leaseback Transaction unless:

          (a) the issuer or the guarantor, as the case may be, or the Restricted
     Subsidiary would be entitled to create a Lien on the property or asset
     subject to the Sale/Leaseback Transaction securing Indebtedness in an
     amount equal to the Attributable Debt with respect to that transaction
     without equally and ratably securing the debt securities pursuant to the
     covenant entitled "Limitation on Liens"; or

          (b) the net proceeds of the sale are at least equal to the fair value
     (as determined by board of directors of the issuer or the guarantor, as the
     case may be) of the property or asset subject to the Sale/ Leaseback
     Transaction and the issuer or the guarantor, as the case may be, or the
     Restricted Subsidiary applies or causes to be applied, within 180 days of
     the effective date of the Sale/Leaseback Transaction, an amount in cash
     equal to the net proceeds of the sale to the retirement of Indebtedness of
     the issuer or the guarantor, as the case may be, or of the Restricted
     Subsidiary.

In addition to the transactions permitted pursuant to the above clauses (a) and
(b), the issuer and the guarantor, if any, or any of their respective Restricted
Subsidiaries may enter into a Sale/Leaseback Transaction as long as the sum of:

     - the Attributable Debt with respect to that Sale/Leaseback Transaction and
       all other Sale/Leaseback Transactions entered into pursuant to this
       provision; plus

     - the amount of outstanding Indebtedness secured by Liens incurred pursuant
       to the final provision to the covenant described under "-- Limitation on
       Liens" below;

does not exceed 15% of Consolidated Net Tangible Assets as determined based on
Calpine's consolidated balance sheet as of the end of the most recent fiscal
quarter for which financial statements are available. In addition, any
Restricted Subsidiary of the issuer or the guarantor, if any, may enter into a
Sale/Leaseback Transaction with respect to property or assets owned by that
Restricted Subsidiary, so long as the proceeds of that Sale/Leaseback
Transaction are used to acquire, develop, construct, or repay (within 365 days
of the commencement of full commercial operation of any such property or assets)
Indebtedness incurred to acquire, develop or construct property or assets of any
Restricted Subsidiary.

     As used in the indentures, the following terms are defined as follows:

     "Attributable Debt" means, as at the time of determination, the present
value (discounted at the rate of interest set forth or implicit in terms of the
lease (or, if not practicable to determine that rate, the weighted average rate
of interest borne by the debt securities outstanding hereunder (calculated, in
the event of the issuance of any original issue discount debt securities, based
on the computed 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).

                                        22
<PAGE>   24

     "Capitalized Lease Obligations" of a 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 that person as lessee, in
conformity with generally accepted accounting principals, is required to be
capitalized on the balance sheet of that 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.

     "Consolidated Current Liabilities," as of the date of determination, means
the aggregate amount of consolidated liabilities of Calpine and Calpine's
consolidated Restricted Subsidiaries which may properly be classified as current
liabilities (including taxes accrued as estimated), after eliminating (i) all
inter-company items between Calpine and its subsidiaries and (ii) all current
maturities of long-term Indebtedness, all as determined in accordance with
generally accepted accounting principles.

     "Consolidated Net Tangible Assets" means, as of any date of determination,
the total amount of Calpine's consolidated assets (less accumulated depreciation
or amortization, allowances for doubtful receivables, other applicable reserves
and other properly deductible items) under generally accepted accounting
principles which would appear on Calpine's consolidated balance sheet,
determined in accordance with generally accepted accounting principles, and
after giving effect to purchase accounting and after deducting therefrom, to the
extent otherwise included, the amounts of:

          (a) Consolidated Current Liabilities;

          (b) minority interests in Calpine's consolidated subsidiaries held by
     persons other than Calpine or any of its Restricted Subsidiaries;

          (c) excess of cost over fair value of assets of businesses acquired,
     as determined in good faith by Calpine's board of directors;

          (d) 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 generally accepted accounting principles;

          (e) 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;

          (f) treasury stock; and

          (g) 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.

     "Indebtedness" of any person means, without duplication:

          (a) the principal of and premium (if any premium is then due and
     owing) in respect of indebtedness of that person for money borrowed;

          (b) all Capitalized Lease Obligations of that person;

          (c) all obligations of that person for the reimbursement of any
     obligor on any letter of credit, banker's acceptance or similar credit
     transaction, other than obligations with respect to letters of credit
     securing obligations (other than obligations described in clauses (a) and
     (b) above) entered into in the ordinary course of business of that person
     to the extent such letters of credit are not drawn upon or, if and to the
     extent drawn upon, that drawing is reimbursed no later than the tenth
     business day following receipt by that person of a demand for reimbursement
     following payment on the letter of credit;

          (d) all obligations of the type referred to in clauses (a) through (c)
     above of other persons and all dividends of other persons for the payment
     of which, in either case, that person is responsible or liable, directly or
     indirectly, as obligor, guarantor or otherwise; and

                                        23
<PAGE>   25

          (e) all obligations of the type referred to in clauses (a) through (d)
     above of other persons secured by any Lien on any property or asset of that
     person (whether or not such obligation is assumed by that person), the
     amount of the obligation on any date of determination being deemed to be
     the lesser of the value of the property or assets or the amount of the
     obligation so secured.

     The amount of Indebtedness of any person at any date shall be, with respect
to unconditional obligations, the outstanding balance at such date of all such
obligations as described above and, with respect to any contingent obligations
at such date, the maximum liability determined by that person's board of
directors, in good faith, as in light of the facts and circumstances existing at
the time, reasonably likely to be incurred upon the occurrence of the
contingency giving rise to such obligation.

     "Lien" means any mortgage, lien, pledge, charge, or other security interest
or encumbrance of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof).

     "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.

     "Restricted Subsidiary" means any subsidiary of a person that is not
designated an Unrestricted Subsidiary by that person's board of directors.

     "Sale/Leaseback Transaction" means an arrangement relating to property now
owned or later acquired whereby a person or one of such person's subsidiaries
transfers that property to another person and then leases it back from that
person, other than leases for a term of not more than 36 months or leases
between such person and a wholly owned subsidiary of such person or between such
person's wholly owned subsidiaries.

     "Senior Indebtedness" means all indebtedness incurred, assumed or
guaranteed by a person, whether or not represented by bonds, debentures notes or
other securities, for money borrowed, and any deferrals, renewals or extensions
or refunding of any such indebtedness, unless in the instrument creating or
evidencing any such indebtedness or pursuant to which the same is outstanding it
is specifically stated, at or prior to the time such person becomes liable in
respect thereof, that any such indebtedness or such deferral, renewal, extension
or refunding thereof is not Senior Indebtedness.

     "Subordinated Security" means any security issued under an Indenture which
is designated as a Subordinated Debt Security.

     "Unrestricted Subsidiary" means (i) any subsidiary that at the time of
determination shall be designated an Unrestricted Subsidiary by a person's board
of directors in the manner provided below and (ii) any subsidiary of an
Unrestricted Subsidiary. A person's board of directors may designate any
subsidiary (including any newly acquired or newly formed subsidiary) to be an
Unrestricted Subsidiary unless such subsidiary owns any capital stock of, or
owns or holds any Lien on any property of, that person or any other subsidiary
of that person that is not a subsidiary of the subsidiary to be so designated,
so long as the subsidiary to be designated an Unrestricted Subsidiary and all
other subsidiaries previously so designated at the time of any determination
hereunder shall, in the aggregate, have total assets not greater than 5% of
Consolidated Net Tangible Assets as determined based on Calpine's consolidated
balance sheet as of the end of the most recent financial quarter for which
financial statements are available. A person's board of directors may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however,
that immediately after giving effect to that designation no Default or Event of
Default under the indentures shall have occurred and be continuing. Any such
designation by a person's board of directors shall be evidenced to the trustee
by promptly filing with the trustee a copy of the board resolution giving effect
to the designation and a certificate signed by two of that person's officers
certifying that the designation complied with these provisions. However, the
failure to file the resolution and/or certificate with the trustee shall not
impair or affect the validity of the designation.

                                        24
<PAGE>   26


LIMITATION ON LIENS


     Under the terms of the indentures, the issuer and the guarantor, if any,
shall not, and shall not permit any of their respective Restricted Subsidiaries
to, incur any Lien upon any properties (including capital stock) without
effectively providing that the outstanding debt securities shall be secured
equally and ratably with (or prior to) that Indebtedness, so long as that
Indebtedness shall be so secured. The above restriction on Liens will not,
however, apply to:

          (a)(1) Liens securing Indebtedness incurred to finance the
     exploration, drilling, development, construction or purchase of or by, or
     repairs, improvements or additions to, property or assets, which Liens may
     include Liens on the capital stock of a Restricted Subsidiary or (2) Liens
     incurred by any Restricted Subsidiary that does not own, directly or
     indirectly, at the time of such original incurrence of such Lien under this
     clause (2) any operating properties or assets securing Indebtedness
     incurred to finance the exploration, drilling, development, construction or
     purchase of or by or repairs, improvements or additions to, property or
     assets of any Restricted Subsidiary that does not, directly or indirectly,
     own any operating properties or assets at the time of such original
     incurrence of such Lien, which Liens may include Liens on the capital stock
     of one or more Restricted Subsidiaries that do not, directly or indirectly,
     own any operating properties or assets at the time of such original
     incurrence of such Lien, provided, however, that the Indebtedness secured
     by any such Lien may not be issued more than 365 days after the later of
     the exploration, drilling, development, completion of construction,
     purchase, repair, improvement, addition or commencement of full commercial
     operation of the property or assets being so financed;

          (b) Liens existing on the date of issuance of a series of debt
     securities, other than Liens relating to Indebtedness or other obligations
     being repaid or Liens that are otherwise extinguished with the proceeds of
     any offering of debt securities pursuant to the indenture;

          (c) Liens on property, assets or shares of stock of a person at the
     time that person becomes a subsidiary of the issuer or the guarantor, as
     applicable; provided, however, that any such Lien may not extend to any
     other property or assets owned by such issuer or guarantor or any of its
     Restricted Subsidiaries;

          (d) Liens on property or assets existing at the time that the issuer
     or the guarantor, as the case may be, or one of its subsidiaries, acquires
     the property or asset, including any acquisition by means of a merger or
     consolidation with or into the issuer or the guarantor, as applicable, or
     one of its subsidiaries; provided, however, that such Liens are not
     incurred in connection with, or in contemplation of, that merger or
     consolidation and provided, further, that the Lien may not extend to any
     other property or asset owned by the issuer or the guarantor, as
     applicable, or any of its Restricted Subsidiaries;

          (e) Liens securing Indebtedness or other obligations of one of the
     subsidiaries of the issuer or the guarantor, as the case may be, that is
     owing to such issuer or guarantor or any of its Restricted Subsidiaries, or
     Liens securing Indebtedness of the issuer or the guarantor, as the case may
     be, or other obligations that are owing to one of the subsidiaries of such
     issuer or guarantor;

          (f) Liens incurred on assets that are the subject of a Capitalized
     Lease Obligation to which the issuer or the guarantor, as the case may be,
     or any of its subsidiaries is a party, which shall include Liens on the
     stock or other ownership interest in one or more Restricted Subsidiaries of
     such issuer or guarantor, leasing such assets;

          (g) Liens to secure any refinancing, refunding, extension, renewal or
     replacement (or successive refinancings, refundings, extensions, renewals
     or replacements) as a whole, or in part, of any Indebtedness secured by any
     Lien referred to in clauses (a), (b), (c), (d) and (f) above, provided,
     however, that (1) such new Lien shall be limited to all or part of the same
     property or assets that secured the original Lien (plus repairs,
     improvements or additions to that property or assets and Liens on the stock
     or other ownership interest in one or more Restricted Subsidiaries
     beneficially owning that property or assets) and (2) the amount of
     Indebtedness secured by such Lien is not increased, other than by an amount

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<PAGE>   27

     necessary to pay fees and expenses, including premiums, related to the
     refinancing, refunding, extension, renewal or replacement of the
     Indebtedness; and

          (h) Liens by which the debt securities are secured equally and ratably
     with other Indebtedness pursuant to this covenant.

     However, the issuer and the guarantor, if any, and any one or more of their
respective Restricted Subsidiaries may incur other Liens to secure Indebtedness
as long as the sum of:

     - the lesser of (1) the amount of outstanding Indebtedness secured by Liens
       incurred pursuant to this provision and (2) the fair market value of the
       property securing that item of Indebtedness; plus

     - the Attributable Debt with respect to all Sale/Leaseback Transactions
       entered into pursuant to clause (a) described under the covenant
       "Limitation on Sale/Leaseback Transactions";

does not exceed 15% of Consolidated Net Tangible Assets as determined based on
Calpine's consolidated balance sheet as of the end of the most recent fiscal
quarter for which financial statements are available.


MERGER, CONSOLIDATION, SALE OR LEASE


     Nothing in the indentures shall prevent the issuer and the guarantor, if
any, from consolidating with or merging into another corporation or conveying,
transferring or leasing their respective properties and assets substantially as
an entirety to any person, provided that (a) the successor entity assumes the
obligations of the issuer or the guarantor, as the case may be, on each series
of debt securities outstanding and (b) immediately after giving effect to the
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have occurred and be
continuing.


SEC REPORTS


     Calpine is subject to the informational reporting requirements of Sections
13 and 15(d) under the Securities Exchange Act and, in accordance with those
requirements, files certain reports and other information with the SEC. See
"Where You Can Find More Information." In addition, if Sections 13 and 15(d)
cease to apply to Calpine, Calpine will covenant in the indentures to file those
reports and information with the trustee, and to mail such reports and
information to holders of the debt securities at their registered addresses, for
so long as any debt securities remain outstanding.


COMPLIANCE CERTIFICATES


     The indentures will require that the issuer and the guarantor, if any, file
annually with the trustee a certificate describing any "Default," which is
defined in the indentures as any event which is, or after notice or passage of
time or both would be, an Event of Default, by the issuer or the guarantor, as
the case may be, in the performance of any conditions or covenants under the
indentures and the status of any such Default. The issuer and the guarantor, if
any, also must give the trustee written notice within 30 days of the occurrence
of certain Defaults under the indentures that could mature into Events of
Default, as described under the caption "-- Events of Default" below.

EVENTS OF DEFAULT

     "Events of Default" are defined in the indentures with respect to any
series of debt securities as any of the following:

          (a) default for 30 days in payment of any interest installment due and
     payable on any debt securities of such series;

          (b) default in payment of principal or premium, if any, when due on
     the debt securities of such series;

          (c) default in the making of any sinking fund payment or analogous
     obligation on the debt securities of such series;
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<PAGE>   28

          (d) material default in performance by the issuer or the guarantor, if
     any, of any other covenants or agreements in respect of the debt securities
     of such series contained in the applicable indenture or the debt securities
     for 60 days after written notice to the issuer and the guarantor, if any,
     or to the issuer, the guarantor, if any, and the trustee by the holders of
     at least 25% in aggregate principal amount of the debt securities of such
     series then outstanding;

          (e) there shall have occurred a default in the payment of the
     principal or premium, if any, of any bond, debenture, note or other
     evidence of indebtedness of the issuer or the guarantor, if any, in each
     case for money borrowed, or in the payment of principal or premium, if any,
     under any mortgage, indenture, agreement or instrument under which there
     may be issued or by which there may be secured or evidenced any
     indebtedness of the issuer or the guarantor, if any, for money borrowed
     (including any other series of debt securities issued under the indenture),
     which default for payment of principal or premium, if any, is in an
     aggregate principal amount exceeding $50,000,000 (or its equivalent in any
     other currency or currencies) when such indebtedness becomes due and
     payable (whether at maturity, upon redemption or acceleration or
     otherwise), if such default shall continue unremedied or unwaived for more
     than 30 business days after the expiration of any grace period or extension
     of the time for payment applicable thereto;

          (f) certain events of bankruptcy, insolvency and reorganization with
     respect to the issuer or guarantor, if any; and

          (g) the guarantee, if any, ceases to be in full force and effect
     (other than in accordance with terms of the guarantee agreement) or the
     guarantor denies or disaffirms its obligations under the guarantee.

     An Event of Default under one series of debt securities does not
necessarily constitute an Event of Default under any other series of debt
securities.

     The indentures provide that if an Event of Default occurs and is continuing
with respect to any series of debt securities, either the trustee or the
registered holders of at least 25% in aggregate principal amount of that series
of debt securities, may declare the principal amount of those debt securities
and any accrued and unpaid interest on those debt securities to be due and
payable immediately. At any time after a declaration of acceleration, but before
a judgment or decree for payment of money has been obtained, if all Events of
Default with respect to those debt securities have been cured (other than the
nonpayment of principal of such debt securities which has become due solely by
reason of the declaration of acceleration) then the declaration of acceleration
shall be automatically annulled and rescinded.

     The indentures will require that the issuer and the guarantor, if any, file
annually with the trustee a certificate describing any Default by the issuer or
the guarantor, as the case may be, in the performance of any conditions or
covenants that has occurred under the indentures and its status. See
"Covenants -- Compliance Reports." The issuer and the guarantor, if any, must
give the trustee written notice within 30 days of any Default under the
indentures that could mature into an Event of Default described in clause (d),
(e) or (f).

     The trustee will be entitled under the indentures, subject to the duty of
the trustee during a Default to act with the required standard of care, to be
indemnified before proceeding to exercise any right or power under the
indentures at the direction of the registered holders of the debt securities or
which requires the trustee to expend or risk its own funds or otherwise incur
any financial liability. The indentures will also provide that the registered
holders of a majority in principal amount of the outstanding debt securities of
any series issued under any indenture may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the trustee with respect to that series of debt
securities. The trustee, however, may refuse to follow any such direction that
conflicts with law or such indenture, is unduly prejudicial to the rights of
other registered holders of that series of debt securities, or would involve the
trustee in personal liability.

     The indentures will provide that while the trustee generally must mail
notice of a Default or Event of Default to the registered holders of the debt
securities of any series issued under any indenture within 90 days of
occurrence, the trustee may withhold notice of any Default or Event of Default
(except in payment on the debt securities) if the trustee in good faith
determines that the withholding of such notice is in the interest of the
registered holders of that series of debt securities.

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<PAGE>   29

MODIFICATION OF THE INDENTURES

     The issuer, the guarantor, if any, and the trustee may amend or supplement
the indentures, including any guarantee agreement, if the holders of a majority
in principal amount of the outstanding debt securities of each series of debt
securities affected by the amendment or supplement consent to it, except that no
amendment or supplement may, without the consent of each affected registered
holder of that series:

     - reduce the amount of principal the issuer has to repay or change the date
       of maturity,

     - reduce the rate or change the time of payment of interest,

     - change the currency of payment,

     - modify any redemption or repurchase right to the detriment of the holder,

     - reduce the percentage of the aggregate principal amount of debt
       securities needed to consent to an amendment or supplement,

     - change the provisions of the indentures relating to waiver of past
       defaults, rights of registered holders of the debt securities to receive
       payments or the provisions relating to amendments of the indentures that
       require the consent of registered holders of each affected series or

     - release the guarantee, if any, except in compliance with the terms of the
       guarantee agreement and related indenture.

ACTIONS BY HOLDERS

     A holder of any series of debt securities may not pursue any remedy with
respect to the indentures or the debt securities of such series (except a
registered holder of a series of debt securities may bring an action for payment
of overdue principal, premium, if any, or interest on that series), unless:

     - the registered holder has given notice to the trustee of such series of a
       continuing Event of Default,

     - registered holders of at least 25% in principal amount of that series of
       debt securities have made a written request to the trustee of such series
       to pursue such remedy,

     - such registered holder or holders have offered the trustee of such series
       security or indemnity reasonably satisfactory to the trustee against any
       loss, liability or expense,

     - the trustee of such series has not complied with such request within 60
       days of such request and offer, and

     - the registered holders of a majority in principal amount of that series
       of debt securities have not given the trustee of such series an
       inconsistent direction during that 60-day period.

DEFEASANCE, DISCHARGE AND TERMINATION

DEFEASANCE AND DISCHARGE.

     The indentures will provide that the issuer may discharge the issuer and
the guarantor, if any, from any and all obligations in respect of a series of
debt securities, and the provisions of the related indenture will no longer be
in effect with respect to that series of debt securities (except for, among
other matters, certain obligations to register the transfer or exchange of those
debt securities, to replace stolen, lost or mutilated debt securities, to
maintain paying agencies and to hold monies for payment in trust, and the rights
of holders of that series to receive payments of principal, premium, if any, and
interest), on the 123rd day after the date of the deposit with the trustee, in
trust, of money or U.S. Government Obligations that, through the payment of
interest, principal and premium, if any, in respect thereof in accordance with
their terms, will provide money, or a combination thereof, in an amount
sufficient to pay the principal, premium, if any, and interest on that series of
debt securities, when due in accordance with the terms of that indenture and
those debt securities. Such a trust may only be established if, among other
things,

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<PAGE>   30

       a. the issuer has delivered to the trustee either

     - an opinion of counsel (who may not be an employee of ours) to the effect
       that registered holders of that series will not recognize income, gain or
       loss for federal income tax purposes as a result of such deposit,
       defeasance and discharge and will be subject to federal income tax on the
       same amount and in the same manner and at the same times as would have
       been the case if such deposit, defeasance and discharge had not occurred,
       which opinion of counsel must refer to and be based upon a ruling of the
       Internal Revenue Service or a change in applicable federal income tax law
       occurring after the date of that indenture or

     - a ruling of the Internal Revenue Service to such effect, and

      b. no Default under the indenture with respect to that series shall have
      occurred and be continuing on the date of such deposit or during the
      period ending on the 123rd day after such date of deposit and such deposit
      shall not result in or constitute a Default or result in a breach or
      violation of, or constitute a default under, any other agreement or
      instrument to which the issuer or the guarantor, if any, is a party or by
      which the issuer or the guarantor, if any, is bound.

     "U.S. Government Obligations" are defined under the indentures as
securities that are (x) direct obligations of the United States for the payment
of which its full faith and credit is pledged or (y) obligations of a person
controlled or supervised by and acting as an agency or instrumentality of the
United States the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States and which, in either case, are not
callable or redeemable before their maturity.

DEFEASANCE OF COVENANTS AND CERTAIN EVENTS OF DEFAULT.

     The indentures will further provide that, with respect to a series of debt
securities issued under an indenture, the provisions of that indenture described
under "-- Covenants -- Limitations on Liens" will no longer be in effect,
clauses (d) (with respect to such covenant) and (d) under "-- Events of Default"
shall be deemed not to be Events of Default under that indenture, and the
provisions described herein under "-- Ranking" shall not apply, upon the deposit
with the trustee, in trust, of money or U.S. Government Obligations that through
the payment of interest and principal in respect thereof in accordance with
their terms will provide money in an amount sufficient to pay the principal,
premium, if any, and interest on that series of debt securities when due in
accordance with the terms of that indenture. Such a trust may only be
established if, among other things, the provisions described in clause (b) of
the immediately preceding paragraph have been satisfied and the issuer has
delivered to the trustee an opinion of counsel (who may not be an employee of
ours) to the effect that the registered holders of that series will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and defeasance, and will be subject to federal income tax on the
same amount and in the same manner and at the same times as would have been the
case if such deposit and defeasance had not occurred.

     In the event the issuer exercises its option not to comply, or to discharge
the guarantor, if any, from compliance, with the covenants and certain other
provisions of an indenture with respect to a series of debt securities as
described in the immediately preceding paragraph, and that series of debt
securities are declared due and payable because of the occurrence of an Event of
Default that remains applicable, while the amount of money or U.S. Government
Obligations on deposit with the trustee will be sufficient to pay principal of
and interest on that series on the respective dates on which such amounts are
due, they may not be sufficient to pay amounts due on that series at the time of
the acceleration resulting from such Event of Default. However, the issuer and
the guarantor, if any, shall remain liable for such payments.

TERMINATION OF OBLIGATIONS IN CERTAIN CIRCUMSTANCES.

     The indentures will further provide that the issuer may discharge the
issuer and the guarantor, if any, from any and all obligations in respect of a
series of debt securities and the provisions of the related indenture will no
longer be in effect with respect to that series of debt securities (except to
the extent provided under "--Defeasance and Discharge") if that series of debt
securities mature within one year and the issuer deposits

                                        29
<PAGE>   31

with the trustee, in trust, money or U.S. Government Obligations that, through
the payment of interest and principal in respect thereof in accordance with
their terms, will provide money in an amount sufficient to pay the principal of,
premium, if any, and accrued interest on that series of debt securities when due
in accordance with the terms of that indenture and the debt securities. Such a
trust may only be established if, among other things,

     - no Default under the indenture with respect to that series shall have
       occurred and be continuing on the date of such deposit,

     - such deposit will not result in or constitute a Default or result in a
       breach or violation of, or constitute a Default under, any other
       agreement or instrument to which the issuer or the guarantor, if any, is
       a party or by which the issuer or the guarantor, if any, is bound and

     - the issuer has delivered to the trustee an opinion of counsel stating
       that such conditions have been complied with.

     Pursuant to this provision, the issuer is not required to deliver an
opinion of counsel to the effect that registered holders of that series will not
recognize income, gain or loss for U.S. federal income tax purposes as a result
of such deposit and termination, and there is no assurance that registered
holders of that series would not recognize income, gain or loss for U.S. federal
income tax purposes as a result thereof or that they would be subject to U.S.
federal income tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit and termination had not
occurred.

UNCLAIMED MONEY

     Subject to any applicable abandoned property law, the indentures will
provide that the trustee will pay to the issuer upon request any money held by
the trustee for the payment of principal, premium, if any, or interest that
remains unclaimed for two years. After payment to the issuer, registered holders
of debt securities entitled to such money must look to the issuer for payment as
general creditors.

CONCERNING THE TRUSTEE AND PAYING AGENT

     Wilmington Trust Company will initially act as Trustee and paying agent for
the debt securities. Wilmington Trust Company currently acts as trustee under:

     - an indenture with Calpine and Calpine's subsidiary, Calpine Capital Trust
       III, dated as of August 9, 2000, and

     - an indenture with Calpine dated as of August 10, 2000.

     A number of Calpine's series of debt securities are presently outstanding
under each of the above indentures. We may have in the future other
relationships with Wilmington Trust Company.

     We will describe in the prospectus supplement any material business and
other relationships (including additional trusteeships), other than the
trusteeship under the indentures, between us and any of our affiliates, on the
one hand, and each trustee and paying agent under the indentures, on the other
hand.

GOVERNING LAW

     The laws of the State of New York will govern the indentures and each
series of debt securities.

BOOK-ENTRY SYSTEM

     Unless otherwise specified in the prospectus supplement, each series of
debt securities will be represented by one or more global notes registered in
the name of a nominee of The Depository Trust Company ("DTC"), as depositary.
Upon the issuance of the global notes, DTC or its custodian will credit, on its
internal system, the respective principal amount of the individual beneficial
interests represented by the global notes to the accounts of persons who have
accounts with DTC. Each account initially will be designated by or on behalf of
the underwriters, dealer or agents. Ownership of beneficial interests in a
global note will be limited to persons

                                        30
<PAGE>   32

who have accounts with DTC ("participants") or persons who hold interests
through participants. Ownership of beneficial interests in the global notes will
be shown on, and transfers of their ownership may be effected only through,
records maintained by DTC or its nominee (with respect to interests of
participants) and the records of participants (with respect to interests of
persons other than participants). DTC currently limits the maximum denomination
of any single global note to $400,000,000.

     So long as DTC or its nominee is the registered owner or holder of the
global notes, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the debt securities represented by such global notes for
all purposes under the applicable indenture and the debt securities. No
beneficial owner of an interest in the global notes will be able to transfer
that interest except in accordance with DTC's applicable procedures, in addition
to those provided for under the indenture.

     Payments of the principal of, and interest on, the global notes will be
made to DTC or its nominee, as the case may be, as the registered owner of the
global notes. Neither we, the trustee or any paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global notes
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.

     We expect that DTC or its nominee, upon receipt of any payment of principal
or interest in respect of the global notes will credit participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of the global notes as shown on the records of DTC or
its nominee. We also expect that payments by participants to owners of
beneficial interests in the global notes held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered in the names of
nominees for such customers. Such payments will be the responsibility of such
participants.

     Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds. If a holder
requires physical delivery of a certificated note for any reason, including to
sell debt securities to persons in states which require delivery of certificated
notes or to pledge their debt securities, such holder must transfer its interest
in the global notes in accordance with the normal procedures of DTC and the
procedures set forth in the indenture.

     DTC has advised us that it will take any action permitted to be taken by a
holder of a series of debt securities (including the presentation of debt
securities for exchange as described below) only at the direction of one or more
participants to whose account the DTC interests in the global notes relating to
such series is credited and only in respect of such portion of the aggregate
principal amount of debt securities as to which such participant or participants
has or have given such direction. However, if there is an Event of Default under
a series of debt securities, DTC will exchange the global notes relating to such
series for certificated notes which it will distribute to its participants.

     DTC has advised us as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial
Code and a "Clearing Agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934. DTC was created to hold securities
for its participants and facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry changes in
accounts of its participants, thereby eliminating the need for physical movement
of certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations and certain other organizations.
Indirect access to the DTC system is available to "indirect participants" such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.

     Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interest in the global notes among participants of DTC, it is under
no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither we nor the trustee will have
any responsibility for the performance by DTC or its respective participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.

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<PAGE>   33

CERTIFICATED NOTES

     If DTC is at any time unwilling or unable to continue as a depositary for
the global notes and a successor depositary is not appointed by us within 90
days, or if the issuer otherwise chooses to issue definitive debt securities,
the issuer will issue certificated notes in exchange for the global notes. In
either instance, an owner of a beneficial interest in a global note will be
entitled to have debt securities equal in principal amount to such beneficial
interest registered in its name and will be entitled to physical delivery of
debt securities in definitive form. Debt securities in definitive form will be
issued in denominations of $1,000 and integral multiples of $1,000 and will be
issued in registered form only, without coupons. The issuer will maintain in the
Borough of Manhattan, The City of New York, one or more offices or agencies
where debt securities may be presented for payment and may be transferred or
exchanged. You will not be charged a fee for any transfer or exchange of your
debt securities, but the issuer may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

SAME-DAY SETTLEMENT IN RESPECT OF GLOBAL NOTES

     Global notes held by DTC will trade in DTC's Same-Day Funds Settlement
System until maturity and secondary market trading activity in the debt
securities will settle in immediately available funds. No assurance can be given
as to the effect, if any, of settlement in immediately available funds on the
trading activity in the debt securities.

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             CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

     The following is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of the securities.
Unless otherwise stated, this summary deals only with the securities held as
capital assets by U.S. holders. As used herein, "U.S. holders" are any
beneficial owners of the securities, that are, for United States federal income
tax purposes, (1) citizens or residents of the United States, (2) corporations
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia (other than partnerships that are not
treated as a United States person under any applicable Treasury regulations),
(3) estates, the income of which is subject to United States federal income
taxation regardless of its source, or (4) trusts if (A) a court within the
United States is able to exercise primary supervision over the administration of
the trust and (B) one or more United States persons have the authority to
control all substantial decisions of the trust. As used herein, "non-U.S.
holders" are holders of the securities that are, for United States federal
income tax purposes (1) nonresident alien individuals; (2) foreign corporations;
or (3) foreign estates or trusts that are not subject to U.S. federal income
taxation on their worldwide income. If a partnership (including for this purpose
any entity treated as a partnership for U.S. tax purposes) is a beneficial owner
of the securities, the treatment of a partner in the partnership will generally
depend upon the status of the partner and upon the activities of the
partnership. A holder of securities that is a partnership and partners in such
partnership, should consult their tax advisers about the U.S. federal income tax
consequences of holding and disposing of the securities. This summary does not
deal with special classes of holders such as banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, or tax-exempt investors and does not discuss
securities held as part of a hedge, straddle, "synthetic security" or other
integrated transaction. This summary also does not address the tax consequences
to persons that have a functional currency other than the U.S. dollar or the tax
consequences to shareholders, partners or beneficiaries of a holder of the
securities. Further, it does not include any description of any alternative
minimum tax consequences or the tax laws of any state or local government or of
any foreign government that may be applicable to the securities. This summary is
based on the Internal Revenue Code of 1986, as amended, the Treasury regulations
promulgated thereunder and administrative and judicial interpretations thereof,
all as of the date hereof, and all of which are subject to change, possibly on a
retroactive basis.

     You should consult with your own tax advisor regarding the federal, state,
local and foreign income, franchise, personal property, and any other tax
consequences of the purchase, ownership and disposition of the securities.

TAXATION OF COMMON STOCK

     The subsection describes the material United States federal income tax
consequences of owning, selling and disposing of the common stock that Calpine
may offer.

U.S. HOLDERS OF COMMON STOCK

Dividends

     The amount of any distribution Calpine makes in respect of Calpine's common
stock will be equal to the amount of cash and the fair market value, on the date
of distribution, of any property distributed. Generally, distributions will be
treated as a dividend, subject to tax as ordinary income, to the extent of
Calpine's current or accumulated earnings and profits, then as a tax-free return
of capital to the extent of a holder's tax basis in the common stock and
thereafter as gain from the sale or exchange of such stock as described below.


     In general, a dividend distribution to a corporate holder will qualify for
the 70% dividends-received deduction if the holder owns less than 20% of the
voting power and value of our stock (other than any non-voting, non-convertible,
non-participating preferred stock). The dividends received deduction is subject
to certain holding period, taxable income, and other limitations (see "Taxation
of Preferred Stock -- U.S. Holders of Preferred Stock -- Dividends to Corporate
Holders", below). In addition, the benefit of a dividends-received deduction may
be reduced by the corporate alternative minimum tax.


                                        33
<PAGE>   35

Sale or Exchange of Common Stock

     Upon the sale or exchange of common stock, a holder generally will
recognize capital gain or loss equal to the difference between (1) the amount of
cash and the fair market value of any property received upon the sale or
exchange and (2) such holder's adjusted tax basis in the common stock. In the
case of a holder other than a corporation, the maximum marginal United States
federal income tax rate applicable to such gain is 20% if such holder's holding
period for such common stock exceeds one year. A holder's basis in the common
stock is generally equal to its initial purchase price.

Information Reporting and Backup Withholding Tax

     In general, information reporting requirements will apply to payments of
dividends on common stock and payments of the proceeds of the sale of common
stock, and a 31% backup withholding tax may apply to such payments if the holder
fails to comply with certain identification requirements. Any amounts withheld
under the backup withholding rules from a payment to a holder will be allowed as
a credit against such holder's United States federal income tax and may entitle
the holder to a refund, provided that the required information is furnished to
the Internal Revenue Service.


NON-U.S. HOLDERS OF COMMON STOCK


     The rules governing United States federal income taxation of a beneficial
owner of common stock that is a non-U.S. holder are complex and no attempt will
be made herein to provide more than a summary of such rules. Non-U.S. holders
should consult with their own tax advisors to determine the effect of federal,
state, local and foreign income tax laws, as well as treaties, with regard to an
investment in the common stock, including any reporting requirements.

Dividends

     Distributions by Calpine with respect to the common stock that are treated
as dividends paid (or deemed paid), as described above under "Dividends," to a
non-U.S. holder (excluding dividends that are effectively connected with the
conduct of a United States trade or business by such holder and are taxable as
described below) will be subject to United States federal withholding tax at a
30% rate (or a lower rate provided under any applicable income tax treaty).
Except to the extent that an applicable tax treaty otherwise provides, a non-
U.S. holder will be taxed in the same manner as a U.S. holder on dividends paid
(or deemed paid) that are effectively connected with the conduct of a United
States trade or business by the non-U.S. holder. If such non-U.S. holder is a
foreign corporation, it may also be subject to a United States branch profits
tax on such effectively connected income at a 30% rate (or such lower rate as
may be specified by an applicable tax treaty). Even though such effectively
connected dividends are subject to income tax and may be subject to the branch
profits tax, they will not be subject to U.S. withholding tax if the holder
delivers a properly executed Internal Revenue Service Form W-8EC1 (or successor
form) to the payor.

     A non-U.S. holder who wishes to claim the benefit of an applicable treaty
rate is required to satisfy applicable certification and other requirements. If
you are eligible for a reduced rate of United States withholding tax pursuant to
an income tax treaty, you may obtain a refund of any excess amounts withheld by
filing an appropriate claim for refund with the Internal Revenue Service.

Sale or Exchange of Common Stock

     Subject to the discussion below regarding "Foreign Investment in Real
Property Tax Act," a non-U.S. holder generally will not be subject to United
States federal income tax or withholding tax on the sale or exchange of common
stock unless (1) the gain is effectively connected with a United States trade or
business of the non-U.S. holder, (2) in the case of a non-U.S. holder who is an
individual, such holder is present in the United States for a period or periods
aggregating 183 days or more during the taxable year of the disposition, and
either (A) such holder has a "tax home" in the United States or (B) the
disposition is attributable to an office or other fixed place of business
maintained by such holder in the United States, (3) the non-U.S. holder is
subject to tax pursuant to the provisions of the Internal Revenue Code
applicable to certain United States expatriates or (4) in the event that Calpine
is characterized as a United States real property holding corporation (see
discussion below under "Foreign Investment in Real Property Tax Act"), the
non-U.S.

                                        34
<PAGE>   36

holders beneficial and/or constructive ownership of common stock exceeds 5% of
the total fair market value of the common stock.

Information Reporting and Backup Withholding Tax

     United States information reporting requirements and backup withholding tax
will not apply to any payment of the proceeds of the sale of common stock
effected outside the United States by a foreign office of a "broker" as defined
in applicable Treasury regulations, unless such broker (1) is a United States
person as defined in the Internal Revenue Code, (2) is a foreign person that
derives 50% or more of its gross income for certain periods from the conduct of
a trade or business in the United States, (3) is a controlled foreign
corporation for United States federal income tax purposes or (4) is a foreign
partnership with certain U.S. connections. Payment of the proceeds of any such
sale effected outside the United States by a foreign office of any broker that
is described in the preceding sentence may be subject to backup withholding tax
and information reporting requirements, unless such broker has documentary
evidence in its records that the beneficial owner is a non-U.S. holder and
certain other conditions are met, or the beneficial owner otherwise establishes
an exemption. If paid to an address outside the United States, dividends on
common stock held by a non-U.S. holder may be subject to the information
reporting and backup withholding requirements described in this section unless
certain certification requirements are satisfied.

Foreign Investment in Real Property Tax Act

     Under the Foreign Investment in Real Property Tax Act, any person who
acquires a "United States real property interest" (as described below) from a
foreign person must deduct and withhold a tax equal to 10% of the amount
realized by the foreign transferor. In addition, a foreign person who disposes
of a United States real property interest generally is required to recognize
gain or loss that is subject to United States federal income tax. A "United
States real property interest" generally includes any interest (other than an
interest solely as a creditor) in a United States corporation unless it is
established under specific procedures that the corporation is not (and was not
for the prior five-year period) a "United States real property holding
corporation." We can give no assurance as to whether we are, at any time within
the past five years have been, or will in the future become, a United States
real property holding corporation. If it is determined that we are, have been in
the past five years or in the future become, a United States real property
holding corporation, so long as our stock is regularly traded on an established
securities market, an exemption should apply to the common stock except with
respect to a non-U.S. holder whose beneficial and/or constructive ownership of
common stock exceeds 5% of the total fair market value of the common stock.

     Any investor that may approach or exceed the 5% ownership threshold
discussed above, either alone or in conjunction with related persons, should
consult its own tax advisor concerning the United States tax consequences that
may result. A non-U.S. holder who sells or otherwise disposes of common stock
may be required to inform its transferee whether such common stock constitutes a
United States real property interest.

     THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF
COMMON STOCK, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR
OTHER TAX LAWS.

TAXATION OF PREFERRED STOCK

     This subsection describes the material United States federal income tax
consequences of owning, selling and disposing of the preferred stock that
Calpine may offer.

U.S. HOLDERS OF PREFERRED STOCK

Dividends

     The amount of any distribution Calpine makes in respect of Calpine's
preferred stock will be equal to the amount of cash and the fair market value,
on the date of distribution, of any property (including common stock)
distributed. Generally, distributions will be treated as a dividend, subject to
tax as ordinary income, to the extent of Calpine's current or accumulated
earnings and profits, then as a tax-free return of capital to the

                                        35
<PAGE>   37

extent of a holder's tax basis in the preferred stock and thereafter as gain
from the sale or exchange of such stock as described below.

Dividends to Corporate Holders

     In general, a dividend distribution to a corporate holder will qualify for
the 70% dividends received deduction if the holder owns less than 20% of the
voting power and value of our preferred stock (other than any non-voting,
non-convertible, non-participating preferred stock). In addition, the benefit of
a dividends received deduction may be reduced by the corporate alternative
minimum tax.

     In determining entitlement to the dividends received deduction, corporate
holders of preferred stock should also consider the provisions of Sections
246(c), 246A and 1059 of the Internal Revenue Code and Treasury regulations
promulgated thereunder, and Internal Revenue Service rulings and administrative
pronouncements relating to such provisions. Under current law, Section 246(c) of
the Internal Revenue Code disallows the dividends received deduction in its
entirety if the holder does not satisfy the applicable holding period
requirement for the dividend-paying stock for a period immediately before or
immediately after such holder becomes entitled to receive each dividend on the
stock. Section 246(c)(4) of the Internal Revenue Code provides that a holder may
not count toward this minimum holding period any period in which the holder (1)
has, among other things, an option to sell preferred stock which it owns, (2) is
under a contractual obligation to sell preferred stock which it owns, (3) has
made (and not closed) a short sale of substantially identical stock or
securities, or (4) has diminished its risk of loss by holding one or more
positions with respect to substantially similar or related property. Under
certain circumstances, Section 1059 of the Internal Revenue Code (A) reduces the
tax basis of stock by a portion of any "extraordinary dividends" that are
eligible for the dividends received deduction and (B) to the extent that the
basis reduction would otherwise reduce the tax basis of the preferred stock
below zero, requires immediate recognition of gain, which is treated as gain
from the sale or exchange of the stock. In the case of preferred stock, an
"extraordinary dividend" would include any amount treated as a dividend with
respect to a redemption that is not pro rata to all stockholders (or meets
certain other requirements), without regard to either the relative amount of the
dividend or the holder's holding period for the preferred stock. Section 246A of
the Internal Revenue Code contains the "debt-financed" portfolio stock rules,
under which the dividends received deduction could be reduced to the extent that
a holder incurs indebtedness directly attributable to its investment in the
preferred stock.

Receipt of Common Stock Upon Conversion of the Preferred Stock

     If the preferred stock is convertible into common stock of Calpine, gain or
loss will not be recognized by a holder upon the conversion of such preferred
stock into common stock if no cash is received. A holder who receives cash in
lieu of a fractional share of common stock will in general be treated as having
received such fractional share and having exchanged it for cash in a redemption,
which would be treated in the manner described under "Sale, Exchange or
Redemption of Preferred stock" below. As discussed therein, a holder who cannot
qualify for sale or exchange treatment under the rules applicable to redemptions
will generally be taxable on the cash received in lieu of a fractional share as
a distribution described in "Dividends" above.

     Generally, a holder's tax basis in the common stock received upon
conversion will generally be equal to the holder's tax basis in the preferred
stock less the tax basis allocated to any fractional share for which cash is
received, and a holder's holding period in the common stock received upon
conversion generally will include the period during which the preferred stock
was held by such holder.

Adjustments of Conversion Price in Respect of Preferred Stock

     If the preferred stock is convertible into common stock of Calpine,
adjustments to the conversion price ratio of common stock to take into account a
stock dividend or stock split generally will not be taxable. However, an
adjustment to the conversion price ratio to reflect the issuance of certain
rights, warrants, evidences of indebtedness, securities or other assets to
holders of common stock (an "Adjustment") may result in constructive
distributions to the holders of the preferred stock. The amount of any such
constructive distribution would be the fair market value on the date of the
Adjustment of the number of shares of common stock which, if actually
distributed to holders of preferred stock, would produce the same increase in
the

                                        36
<PAGE>   38

proportionate interests of such holders in the assets or earnings and profits of
Calpine as that produced by the Adjustment. The distribution would be treated in
the manner described above under "Dividends."

Excessive Redemption Price of Preferred Stock

     Under Section 305 of the Internal Revenue Code and Treasury regulations, if
preferred stock with a mandatory redemption date or preferred stock subject to
certain redemption rights on the part of either Calpine or the holder of such
stock has a redemption price that exceeds its issue price (i.e., its fair market
value at its date of original issuance) by more than a de minimis amount, such
excess may be treated as a constructive distribution that will be treated in the
same manner as distribution described above under "Dividends." A holder of such
preferred stock would be required to treat such excess as a constructive
distribution received by the holder over the life of such stock under a constant
interest (economic yield) method that takes into account the compounding of
yield.

Accrual Dividends on the Preferred Stock

     The tax treatment of accrued dividends that are payable upon a redemption
of the preferred stock will be addressed in the applicable prospectus
supplement.

Sale, Exchange or Redemption of Preferred Stock

     Upon the sale or exchange of preferred stock, a holder generally will
recognize capital gain or loss equal to the difference between (1) the amount of
cash and the fair market value of any property received upon the sale or
exchange and (2) such holder's adjusted tax basis in the stock. In the case of a
holder other than a corporation, the maximum marginal United States federal
income tax rate applicable to such gain is 20% if such holder's holding period
for such stock exceeds one year. A holder's basis in the stock is generally
equal to its initial purchase price.

     Gain or loss recognized by a holder on a redemption of the preferred stock
should be treated as a sale or exchange and therefore qualify for the treatment
described above if, taking into account stock that is actually or constructively
owned under the constructive ownership rules of Section 318 of the Internal
Revenue Code by such holder, either (1) the holder's interest in the stock of
Calpine is completely terminated as a result of such redemption, (2) such
holder's percentage ownership of Calpine's voting stock immediately after the
redemption is less than 80% of such holder's percentage ownership immediately
before the redemption or (3) the redemption is "not essentially equivalent to a
dividend." Under Section 318 of the Internal Revenue Code, a person generally
will be treated as the owner of stock of Calpine owned by certain related
parties or certain entities in which the person owns an interest and stock that
a holder could acquire through exercise of an option. For this purpose, an
option would include the conversion right under the preferred stock. Whether a
redemption is not essentially equivalent to a dividend depends on each holder's
facts and circumstances, but in any event requires a "meaningful reduction" in
such holder's equity interest in Calpine. A holder of the preferred stock who
sells some or all of the stock of Calpine owned by it may be able to take such
sales into account to satisfy one of the foregoing conditions. Conversely, a
holder who purchases additional shares of stock of Calpine may be required to
take such shares into account in determining whether any of the foregoing
conditions are satisfied.

     If none of the above conditions is satisfied to qualify for sale or
exchange treatment, the entire amount of the cash (or property) received on a
redemption will be treated as a distribution (without offset by the holder's tax
basis in the redeemed shares), which will be treated in the same manner as
distributions described above under "Dividends." In such case, the holder's
basis in the redeemed preferred stock would be transferred to the holder's
remaining shares of Calpine stock (if any). If the holder does not retain any
shares of Calpine's stock but dividend treatment arises because of the
constructive ownership rules, such basis will be entirely lost to the holder.

Other Preferred Stock

     Special tax rules may apply to certain types of preferred stock including,
but not limited to, preferred stock issued at a discount. The applicable
prospectus supplement will discuss any such special United States federal income
tax rules with respect to such preferred stock.

                                        37
<PAGE>   39

Information Reporting and Backup Withholding Tax

     In general, information reporting requirements will apply to payments of
dividends on the preferred stock and payments of the proceeds of the sale of the
preferred stock, and a 31% backup withholding tax may apply to such payments if
the holder fails to comply with certain identification requirements. Any amounts
withheld under the backup withholding rules from a payment to a holder will be
allowed as a credit against such holder's United States federal income tax and
may entitle the holder to a refund, provided that the required information is
furnished to the Internal Revenue Service.

NON-U.S. HOLDERS OF PREFERRED STOCK

     The rules governing United States federal income taxation of a beneficial
owner of preferred stock that is a non-U.S. holder are complex and no attempt
will be made herein to provide more than a summary of such rules. Non-U.S.
holders should consult with their own tax advisors to determine the effect of
federal, state, local and foreign income tax laws, as well as treaties, with
regard to an investment in the preferred stock, including any reporting
requirements.

Dividends


     Distributions by Calpine with respect to the preferred stock that are
treated as dividends paid (or deemed paid), as described above under "Dividends"
and "Sale, Exchange or Redemption of Preferred Stock," to a non-U.S. holder
(excluding dividends that are effectively connected with the conduct of a United
States trade or business by such holder and are taxable as described below) will
be subject to United States federal withholding tax at a 30% rate (or a lower
rate provided under any applicable income tax treaty). Except to the extent that
an applicable tax treaty otherwise provides, a non-U.S. holder will be taxed in
the same manner as a holder who is a United States person on dividends paid (or
deemed paid) that are effectively connected with the conduct of a United States
trade or business by the non-U.S. holder. If such non-U.S. holder is a foreign
corporation, it may also be subject to a United States branch profits tax on
such effectively connected income at a 30% rate (or such lower rate as may be
specified by an applicable tax treaty). Even though such effectively connected
dividends are subject to income tax, and may be subject to the branch profits
tax, they will not be subject to U.S. withholding tax if the holder delivers a
properly executed Internal Revenue Service Form W-8ECI (or successor form) to
the payor.


     A non-U.S. holder who wishes to claim the benefit of an applicable treaty
rate is required to satisfy applicable certification and other requirements. If
you are eligible for a reduced rate of United States withholding tax pursuant to
an income tax treaty, you may obtain a refund of any excess amounts withheld by
filing an appropriate claim for refund with the Internal Revenue Service.

Receipt of Common Stock Upon Conversion of the Preferred Stock

     In general, no United States federal income tax or withholding tax will be
imposed upon the conversion of preferred stock into common stock by a non-U.S.
holder (except with respect to the non-U.S. holder's receipt of cash in lieu of
fractional shares where one of the conditions described below under "Sale or
Exchange of Preferred stock" is satisfied).

Sale or Exchange of Preferred Stock

     Subject to the discussion below regarding "Foreign Investment in Real
Property Tax Act," a non-U.S. holder generally will not be subject to United
States federal income tax or withholding tax on the sale or exchange of
preferred stock unless (1) the gain is effectively connected with a United
States trade or business of the non-U.S. holder, (2) in the case of a non-U.S.
holder who is an individual, such holder is present in the United States for a
period or periods aggregating 183 days or more during the taxable year of the
disposition, and either (A) such holder has a "tax home" in the United States or
(B) the disposition is attributable to an office or other fixed place of
business maintained by such holder in the United States, (3) the non-U.S. holder
is subject to tax pursuant to the provisions of the Internal Revenue Code
applicable to certain United States expatriates or (4) in the event that Calpine
is characterized as a United States real property holding corporation (see
discussion below under "Foreign Investment in Real Property Tax Act"), the
non-U.S.

                                        38
<PAGE>   40

holders beneficial and/or constructive ownership of preferred stock exceeds 5%
of the total fair market value of the preferred stock.

     If an individual non-U.S. holder falls under clause (1) above, such
individual generally will be taxed on the net gain derived from a sale under
regular graduated United States federal income tax rates. If an individual
non-U.S. holder falls under clause (2) above, such individual generally will be
subject to a flat 30% tax on the gain derived from a sale, which may be offset
by certain United States capital losses (notwithstanding the fact that such
individual is not considered a resident of the United States). Thus, individual
non-U.S. holders who have spent (or expect to spend) 183 days or more in the
United States in the taxable year in which they contemplate a sale of preferred
stock are urged to consult their tax advisors as to the tax consequences of such
sale.

     If a non-U.S. holder that is a foreign corporation falls under clause (1)
of the first sentence above, it generally be taxed on its net gain under regular
graduated United States federal income tax rates and, in addition, will be
subject to the branch profits tax equal to 30% of its "effectively connected
earnings and profits," as defined in the Internal Revenue Code, for the taxable
year, as adjusted for certain items, unless it qualifies for a lower rate under
an applicable income tax treaty.

Information Reporting and Backup Withholding Tax

     United States information reporting requirements and backup withholding tax
will not apply to any payment of the proceeds of the sale of preferred stock
effected outside the United States by a foreign office of a "broker" as defined
in applicable Treasury regulations, unless such broker (1) is a United States
person as defined in the Internal Revenue Code, (2) is a foreign person that
derives 50% or more of its gross income for certain periods from the conduct of
a trade or business in the United States, (3) is a controlled foreign
corporation for United States federal income tax purposes or (4) is a foreign
partnership with certain U.S. connections. Payment of the proceeds of any such
sale effected outside the United States by a foreign office of any broker that
is described in the preceding sentence may be subject to backup withholding tax
and information reporting requirements, unless such broker has documentary
evidence in its records that the beneficial owner is a non-U.S. holder and
certain other conditions are met, or the beneficial owner otherwise establishes
an exemption. If paid to an address outside the United States, dividends on
preferred stock held by a non-U.S. may be subject to the information reporting
and backup withholding requirements described in this section unless certain
certification requirements are satisfied.

Foreign Investment in Real Property Tax Act


     Under the Foreign Investment in Real Property Tax Act, any person who
acquires a "United States real property interest" (as described below) from a
foreign person must deduct and withhold a tax equal to 10% of the amount
realized by the foreign transferor. In addition, a foreign person who disposes
of a United States real property interest generally is required to recognize
gain or loss that is subject to United States federal income tax. A "United
States real property interest" generally includes any interest (other than an
interest solely as a creditor) in a United States corporation unless it is
established under specific procedures that the corporation is not (and was not
for the prior five-year period) a "United States real property holding
corporation." We can give no assurance as to whether we are, at any time within
the past 5 years have been, or will in the future become, a United States real
property holding corporation. If it is determined that we are, have been in the
past five years or in the future become, a United States real property holding
corporation, so long as our stock (including the preferred stock) is regularly
traded on an established securities market, an exemption should apply to the
preferred stock except with respect to a non-U.S. holder whose beneficial and/or
constructive ownership of preferred stock exceeds 5% of the total fair market
value of the preferred stock.


     Any investor that may approach or exceed the 5% ownership threshold
discussed above, either alone or in conjunction with related persons, should
consult its own tax advisor concerning the United States tax consequences that
may result. A non-U.S. holder who sells or otherwise disposes of preferred stock
may be required to inform its transferee whether such preferred stock
constitutes a United States real property interest.

                                        39
<PAGE>   41

     THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED STOCK, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR
OTHER TAX LAWS.

TAXATION OF DEBT SECURITIES

     This subsection describes the material United States federal income tax
consequences of owning, selling and disposing of the debt securities offered by
Calpine or Calpine Canada Energy Finance, as the case may be. It deals only with
debt securities that are due to mature 30 years or less from the date on which
they are issued. The United States federal income tax consequences of owning
debt securities that are due to mature more than 30 years from the date of issue
will be discussed in an applicable prospectus supplement. In addition, this
subsection assumes that the debt securities will not be offered at a discount.

U.S. HOLDERS OF DEBT SECURITIES

Interest Income

     Payments of interest on a debt security generally will be taxable to a U.S.
holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the holder's regular method of tax accounting).

Debt Securities Purchased at a Market Discount

     A holder who purchases a debt security will be considered to have purchased
the underlying debenture at a "market discount" if the holder's adjusted basis
in the debt security is less than its issue price, unless such market discount
is a de minimis amount (generally up to 1/4 of 1 percent of the adjusted issue
price of the debt security as of the purchase date multiplied by its weighted
average maturity as of such date). In general, any partial payment of principal
on, or gain recognized on the maturity or disposition of, the debt security will
be treated as ordinary income to the extent that such gain does not exceed the
accrued market discount on the underlying debenture. Alternatively, a holder of
a debt security may elect to include market discount in income currently over
the life of the debt security. Such an election applies to all debt instruments
with market discount acquired by the electing holder on or after the first day
of the first taxable year to which the election applies and may not be revoked
without the consent of the Internal Revenue Service.

     Market discount accrues on a straight-line basis unless the holder elects
to accrue such discount on a constant yield to maturity basis. Such an election
is applicable only to the debt security with respect to which it is made and is
irrevocable. A holder of a debt security that does not elect to include market
discount in income currently generally will be required to defer deductions for
interest on borrowings allocable to such debt security in an amount not
exceeding the accrued market discount on such debt security until the maturity
or disposition of such debt security.

Debt Securities Purchased at a Premium

     Under the Internal Revenue Code, a holder that purchases a debt security
will be considered to have purchased the debt security at a premium if the
holder's adjusted basis in the debt security immediately after the purchase is
greater than the issue price of such debt security. Such a holder may elect to
treat such premium as "amortizable bond premium," in which case the amount of
qualified stated interest required to be included in the holder's income each
year with respect to the interest on the debt security will be reduced by the
amount of the amortizable bond premium allocable (based on the debt security's
yield to maturity) to such year. Any election to amortize bond premium is
applicable to all bonds (other than bonds the interest on which is excludible
from gross income) held by the holder at the beginning of the first taxable year
to which the election applies or thereafter acquired by the holder, and may not
be revoked without the consent of the Internal Revenue Service.

                                        40
<PAGE>   42

Sale or Exchange of Debt Securities

     A holder will generally recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or other
disposition of the debt security and the holder's adjusted tax basis in such
debt security (subject to the discussion above regarding market discount, which
may be treated as ordinary income). A holder's adjusted tax basis in the debt
security generally will be the initial purchase price paid therefor. In the case
of a holder other than a corporation, the maximum marginal United States federal
income tax rate applicable to gain recognized on the sale of a debt security is
20% if such holder's holder period for such debt security exceeds one year.

     To the extent the selling price is less than the holder's adjusted tax
basis, the holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.

Other Debt Securities

     Special tax rules may apply to certain types of debt securities including,
but not limited to, debt securities issued at a discount, debt securities
subject to contingencies, variable rate debt securities and debt securities
convertible into equity of Calpine. The applicable prospectus supplement will
discuss any such special United States federal income tax rules with respect to
such debt securities.

Information Reporting and Backup Withholding Tax

     In general, information reporting requirements will apply to payments of
principal, premium, if any, and interest on the debt securities and payments of
the proceeds of the sale of the debt securities, and a 31% backup withholding
tax may apply to such payments if the holder fails to comply with certain
identification requirements. Any amounts withheld under the backup withholding
rules from a payment to a holder will be allowed as a credit against such
holder's United States federal income tax and may entitle the holder to a
refund, provided that the required information is furnished to the Internal
Revenue Service.

NON-U.S. HOLDERS OF DEBT SECURITIES

     The rules governing United States federal income taxation of a beneficial
owner of debt securities that is a non-U.S. holder are complex and no attempt
will be made herein to provide more than a summary of such rules. Non-U.S.
holders should consult with their own tax advisors to determine the effect of
federal, state, local and foreign income tax laws, as well as treaties, with
regard to an investment in the debt securities, including any reporting
requirements.


     This discussion assumes that the debt security or coupon is not subject to
the rules of Section 871(h)(4)(A) of the Internal Revenue Code, relating to
interest payments that are determined by reference to income, profits, changes
in value of property or other attributes of the issuer or a related party.


Interest Income

     Generally, interest income of a non-U.S. holder that is not effectively
connected with a United States trade or business will be subject to a
withholding tax at a 30% rate (or, if applicable, a lower tax rate specified by
a treaty). However, interest income earned on a debt security by a non-U.S.
holder will qualify for the "portfolio interest" exemption and therefore will
not be subject to United States federal income tax or withholding tax, provided
that such interest income is not effectively connected with a United States
trade or business of the non-U.S. holder and provided that (1) the non-U.S.
holder does not actually or constructively own 10% of more of the total combined
voting power of all classes of Calpine stock entitled to vote; (2) the non-U.S.
holder is not a controlled foreign corporation that is related to the issuer or
Calpine through stock ownership; (3) the non-U.S. holder is not a bank which
acquired the debt security in consideration for an extension of credit made
pursuant to a loan agreement entered into in the ordinary course of business;
and (4) either (A) the non-U.S. holder certifies to the issuer or the issuer's
agent, under penalties of perjury, that it is not a United States person and
provides its name, address, and certain other information on a properly executed
Internal Revenue Service Form W-8BEN or a suitable substitute form or (B) a
securities clearing organization, bank or other financial institution that holds
customer securities in the ordinary course of its trade or business and holds
the debt securities in such capacity, certifies to the issuer or the issuer's
agent,

                                        41
<PAGE>   43

under penalties of perjury, that such a statement has been received from the
beneficial owner by it or by a financial institution between it and the
beneficial owner and furnishes to the issuer or the issuer's agent with a copy
thereof. If a non-U.S. holder holds the debt security through certain foreign
intermediaries or partnerships, such holder and the foreign intermediary or
partnership may be required to satisfy certification requirements under
applicable United States Treasury regulations.

     Except to the extent that an applicable treaty otherwise provides, a
non-U.S. holder generally will be taxed with respect to interest in the same
manner as a holder that is a United States person if the interest is effectively
connected with a United States trade or business of the non-U.S. holder.
Effectively connected interest income received or accrued by a corporate
non-U.S. holder may also, under certain circumstances, be subject to an
additional "branch profits" tax at a 30% rate (or, if applicable, at a lower tax
rate specified by a treaty). Even though such effectively connected income is
subject to income tax, and may be subject to the branch profits tax, it is not
subject to withholding tax if the non-U.S. holder delivers a properly executed
Internal Revenue Service Form W-8ECI (or successor form) to the payor.

Sale or Exchange of Debt Securities

     A non-U.S. holder generally will not be subject to United States federal
income tax or withholding tax on any gain realized on the sale, exchange or
other disposition of a debt security unless (1) the gain is effectively
connected with a United States trade or business of the non-U.S. holder, (2) in
the case of a non-U.S. holder who is an individual, such holder is present in
the United States for a period or periods aggregating 183 days or more during
the taxable year of the disposition, and either such holder has a "tax home" in
the United States or the disposition is attributable to an office or other fixed
place of business maintained by such holder in the United States, or (3) the
non-U.S. holder is subject to tax pursuant to the provisions of the Internal
Revenue Code applicable to certain United States expatriates.

Information Reporting and Backup Withholding Tax

     United States information reporting requirements and backup withholding tax
will not apply to payments on the debt securities to a non-U.S. holder if the
statement described in "Interest Income" is duly provided by such holder,
provided that the payor does not have actual knowledge that the holder is a
United States person. Information reporting requirements and backup withholding
tax will not apply to any payment of the proceeds of the sale of debt securities
effected outside the United States by a foreign office of a "broker" as defined
in applicable Treasury regulations, unless such broker (1) is a United States
person as defined in the Internal Revenue Code, (2) is a foreign person that
derives 50% or more of its gross income for certain periods from the conduct of
a trade or business in the United States, (3) is a controlled foreign
corporation for United States federal income tax purposes or (4) is a foreign
partnership with certain U.S. connections. Payment of the proceeds of any such
sale effected outside the United States by a foreign office of any broker that
is described in the preceding sentence may be subject to backup withholding tax
and information reporting requirements, unless such broker has documentary
evidence in its records that the beneficial owner is a non-U.S. holder and
certain other conditions are met, or the beneficial owner otherwise establishes
an exemption. Payment of the proceeds of any such sale to or through the United
States office of a broker is subject to information reporting and backup
withholding requirements unless the beneficial owner of the debt securities
provides the statement described in "Interest Income" or otherwise establishes
an exemption.

     THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
DEBT SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR
OTHER TAX LAWS.

                                        42
<PAGE>   44

                          NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

     The distribution of the securities in Canada will be made only on a private
placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of the securities are made. Any resale of the securities in Canada must
be made under applicable securities laws which will vary depending on the
relevant jurisdiction, and which may require resales to be made under available
statutory exemptions or under a discretionary exemption granted by the
applicable Canadian securities regulatory authority. Purchasers are advised to
seek legal advice prior to any resale of the securities.

REPRESENTATIONS OF PURCHASERS

     By purchasing the securities in Canada and accepting a purchase
confirmation a purchaser is representing to the issuer and the dealer from whom
the purchase confirmation is received that

          (i) the purchaser is entitled under applicable provincial securities
     laws to purchase the securities without the benefit of a prospectus
     qualified under those securities laws,

          (ii) where required by law, that the purchaser is purchasing as
     principal and not as agent, and

          (iii) the purchaser has reviewed the text above under Resale
     Restrictions.

RIGHTS OF ACTION (ONTARIO PURCHASERS)

     The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.

ENFORCEMENT OF LEGAL RIGHTS

     All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

     A purchaser of the securities to whom the Securities Act (British Columbia)
applies is advised that the purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
securities acquired by the purchaser pursuant to this offering. The report must
be in the form attached to British Columbia Securities Commission Blanket Order
BOR #95/17, a copy of which may be obtained from us. Only one report must be
filed for the securities acquired on the same date and under the same prospectus
exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

     Canadian purchasers of the securities should consult their own legal and
tax advisors with respect to the tax consequences of an investment in the
securities in their particular circumstances and about the eligibility of the
securities for investment by the purchaser under relevant Canadian legislation.

                                        43
<PAGE>   45

                                 LEGAL MATTERS


     The validity of the debt and equity securities of Calpine offered hereby
will be passed upon for us by Covington & Burling, New York, New York. The
validity of the debt securities of Calpine Canada Energy Finance offered hereby
will be passed upon for us by Covington & Burling, New York, New York and by
Canadian counsel to be identified in the applicable Prospectus Supplement. Any
underwriters will be represented by Skadden, Arps, Slate, Meagher & Flom LLP,
New York, New York.


                                    EXPERTS

     The financial statements incorporated by reference in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto and are included herein in reliance upon the authority of said firm as
experts in giving said reports.

                                        44
<PAGE>   46

                                 [CALPINE LOGO]
<PAGE>   47

                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

     The following table sets forth the costs and expenses payable by Calpine
Corporation ("Calpine") in connection with sales of the securities being
registered. All amounts are estimates except the SEC registration statement
filing fee.

<TABLE>
<S>                                                           <C>
SEC Registration Statement filing fee.......................  $  625,000
Legal fees and expenses.....................................     500,000
Accounting fees and expenses................................     300,000
Trustee's fees and expenses (including counsel fees)........     200,000
Printing fees...............................................     600,000
Transfer agent fees.........................................      20,000
Miscellaneous...............................................      22,800
                                                              ----------
          Total.............................................  $2,267,800
</TABLE>

ITEM 15.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

CALPINE CORPORATION

     Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceedings, whether civil, criminal,
administrative or investigative (other than action by or in the right of such
corporation), by reason of the fact that such person was an officer or director
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such officer or
director acted in good faith and in a manner he reasonably believed to be in or
not opposed to the corporation's best interests, and, for criminal proceedings,
had no reasonable cause to believe his conduct was unlawful. A Delaware
corporation may indemnify officers and directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation in the performance of his duty. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses which
such officer or director actually and reasonably incurred.

     In accordance with the Delaware Law, the certificate of incorporation of
Calpine contains a provision to limit the personal liability of the directors of
Calpine for violations of their fiduciary duty. This provision eliminates each
director's liability to Calpine or its stockholders for monetary damages except
(i) for any breach of the director's duty of loyalty to Calpine or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware Law providing for liability of directors for unlawful payment of
dividends or unlawful stock purchases or redemptions, or (iv) for any
transaction from which a director derived an improper personal benefit. The
effect of this provision is to eliminate the personal liability of directors for
monetary damages for actions involving a breach of their fiduciary duty of care,
including any such actions involving gross negligence.

     Article Ten of the bylaws of Calpine provides for indemnification of the
officers and directors of Calpine to the fullest extent permitted by applicable
law.

     Calpine has entered into indemnification agreements with its directors and
officers. These agreements provide substantially broader indemnity rights than
those provided under the Delaware Law and the Calpine's bylaws. The
indemnification agreements are not intended to deny or otherwise limit
third-party or derivative suits against Calpine or its directors or officers,
but if a director or officer were entitled to indemnity or

                                       II-1
<PAGE>   48

contribution under the indemnification agreement, the financial burden of a
third-party suit would be borne by Calpine, and Calpine would not benefit from
derivative recoveries against the director or officer. Such recoveries would
accrue to the benefit of Calpine but would be offset by Calpine's obligations to
the director or officer under the indemnification agreement. In addition, the
directors of Calpine are insured under officers and directors liability
insurance policies.

CALPINE CANADA ENERGY FINANCE ULC

     Every director or officer, former director or officer, or person who acts
or acted at the request of Calpine Canada Energy Finance, as a director or
officer of Calpine Canada Energy Finance, a body corporate, partnership or other
association of which Calpine Canada Energy Finance is or was a shareholder,
partner, member or creditor, and the heirs and legal representatives of such
person, in the absence of any dishonesty on the part of such person, shall be
indemnified by Calpine Canada Energy Finance against all costs, losses and
expenses, including an amount paid to settle an action or claim or satisfy a
judgment, that such person may incur or become liable to pay in respect of any
claim made against such person or civil, criminal or administrative action or
proceeding to which such person is made a party by reason of being or having
been a director or officer of Calpine Canada Energy Finance.

ITEM 16.  EXHIBITS.


<TABLE>
<CAPTION>
EXHIBIT
NUMBER                            DESCRIPTION
- -------                           -----------
<C>       <S>
 (a)1.1   Form of Underwriting Agreement with respect to Common Stock,
          Preferred Stock and Debt Securities of Calpine
   *1.2   Form of Underwriting Agreement with respect to Debt
          Securities of Calpine Canada Energy Finance
 (b)3.1   Amended and Restated Certificate of Incorporation of Calpine
 (c)3.2   By-laws of Calpine
   +3.3   Memorandum of Association of Calpine Canada Energy Finance
   +3.4   Articles of Association of Calpine Canada Energy Finance
 (d)4.1   Form of Indenture between Calpine and Wilmington Trust
          Company, including form of Note
 (e)4.2   Rights Agreement, dated as of June 5, 1997, between Calpine
          and First Chicago Trust Company of New York, as Rights Agent
   *4.3   Form of Indenture between Calpine Canada Energy Finance and
          Wilmington Trust Company, including form of Note (the
          "Calpine Canada Energy Finance ULC Indenture")
   *4.4   Form of Guarantee Agreement of Calpine with respect to
          Senior Debt Securities of Calpine Canada Energy Finance (the
          "Calpine Guarantee")
   *5.1   Opinion of Covington & Burling
   *8.1   Opinion of Covington & Burling as to certain tax matters
   *8.2   Opinion of Bennett Jones as to certain Canadian federal tax
          matters
  +12.1   Statement Regarding Computation of Ratios
  *23.1   Consent of Arthur Andersen LLP, independent public
          accountants
  *23.2   Consent of Covington & Burling (included in Exhibits 5.1 and
          8.1)
  *23.3   Consent of Bennett Jones (included in Exhibit 8.2)
  +24.1   Power of Attorney of Officers and Directors of Calpine (see
          pages II-5 and II-6)
  +24.2   Power of Attorney of Officers and Directors of Calpine
          Canada Energy Finance (see page II-7)
</TABLE>


                                       II-2
<PAGE>   49


<TABLE>
<CAPTION>
EXHIBIT
NUMBER                            DESCRIPTION
- -------                           -----------
<C>       <S>
(d)25.1   Form T-1 Statement of Eligibility under the Trust Indenture
          Act of 1939, as amended, of Wilmington Trust Company, as
          Trustee under the Calpine Corporation Indenture
  *25.2   Form T-1 Statements of Eligibility under the Trust Indenture
          Act of 1939, as amended, of Wilmington Trust Company, as
          Trustee under each of (i) the Calpine Canada Energy Finance
          ULC Indenture, and (ii) the Calpine Guarantee
</TABLE>


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

  *  Filed herewith.



  +  Previously filed.


 (a) Incorporated by reference to Calpine's Registration Statement on Form S-3
     (Registration No. 333-48274).

 (b) Incorporated by reference to Calpine's Registration Statement on Form S-3
     (Registration No. 333-40652).

 (c) Incorporated by reference to Calpine's Registration Statement on Form S-1
     (Registration No. 333-07497).

 (d) Incorporated by reference to Amendment No. 1 to Calpine's Registration
     Statement on Form S-3 (Registration No. 333-40652).

 (e) Incorporated by reference to Calpine's Registration Statement on Form 8-A,
     as amended by Calpine's Registration Statement on Form 8-A/A (File No.
     001-12079).

ITEM 17.  UNDERTAKINGS

     The undersigned registrants hereby undertake:

          (1) To file, during any period in which offers or sales are being
     made, a post-effective amendment to this registration statement:

             (i) to include any prospectus required by Section 10(a)(3) of the
        Securities Act of 1933;

             (ii) to reflect in the prospectus any facts or events arising after
        the effective date of the registration statement (or the most recent
        post-effective amendment thereof) which, individually or in the
        aggregate, represent a fundamental change in the information set forth
        in the registration statement. Notwithstanding the foregoing, any
        increase or decrease in volume of securities offered (if the total
        dollar value of securities offered would not exceed that which was
        registered) and any deviation from the low or high end of the estimated
        maximum offering range may be reflected in the form of prospectus filed
        with the Commission pursuant to Rule 424(b) if, in the aggregate, the
        changes in volume and price represent no more than 20 percent change in
        the maximum aggregate offering price set forth in the "Calculation of
        Registration Fee" table in the effective registration statement;

             (iii) to include any material information with respect to the plan
        of distribution not previously disclosed in the registration statement
        or any material change to such information in the registration
        statement.

          (2) That, for the purpose of determining any liability under the
     Securities Act of 1933, each such post-effective amendment shall be deemed
     to be a new registration statement relating to the securities offered
     therein, and the offering of such securities at that time shall be deemed
     to be the initial bona fide offering thereof.

          (3) To remove from registration by means of a post-effective amendment
     any of the securities being registered which remain unsold at the
     termination of the offering.

          (4) If either of the registrants is a foreign private issuer, to file
     a post-effective amendment to the registration statement to include any
     financial statements required by Rule 3-19 of this chapter at the

                                       II-3
<PAGE>   50

     start of any delayed offering or throughout a continuous offering.
     Financial statements and information otherwise required by Section 10(a)(3)
     of the Act need not be furnished, provided, that the registrants include in
     the prospectus, by means of a post-effective amendment, financial
     statements required pursuant to this paragraph (a)(4) and other information
     necessary to ensure that all other information in the prospectus is at
     least as current as the date of those financial statements. Notwithstanding
     the foregoing, with respect to registration statements on Form F-3, a
     post-effective amendment need not be filed to include financial statements
     and information required by Section 10(a)(3) of the Act or Rule 3-19 of
     this chapter if such financial statements and information are contained in
     periodic reports filed with or furnished to the Commission by the
     registrant pursuant to Section 13 or Section 15(d) of the Securities
     Exchange Act of 1934 that are incorporated by reference in the Form F-3.

     The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Calpine Corporation's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrants of expenses incurred or
paid by a director, officer or controlling person of the registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.

     The undersigned registrants hereby undertake that:

     For purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

     For purposes of determining any liability under the Securities Act of 1933,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

                                       II-4
<PAGE>   51

                                   SIGNATURES


     Pursuant to the requirements of the Securities Act of 1933, Calpine
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of San Jose, State of
California, on this 17th day of April, 2001.


                                          CALPINE CORPORATION

                                          By      /s/ PETER CARTWRIGHT
                                            ------------------------------------
                                                      Peter Cartwright
                                                    Chairman, President,
                                            Chief Executive Officer and Director

                              CALPINE CORPORATION


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Amendment No. 1 to the Registration Statement on Form S-3 has been signed below
by the following persons on behalf of Calpine Corporation and in the capacities
and on the dates indicated.



<TABLE>
<CAPTION>
                     SIGNATURE                                      TITLE                      DATE
                     ---------                                      -----                      ----
<C>                                                  <C>                                  <S>
               /s/ PETER CARTWRIGHT                         Chairman, President,          April 17, 2001
- ---------------------------------------------------        Chief Executive Officer
                 Peter Cartwright                               and Director
                                                        (Principal Executive Officer)

                         *                                Executive Vice President        April 17, 2001
- ---------------------------------------------------             and Director
                   Ann B. Curtis                        (Principal Financial Officer)

                         *                                   Vice President and           April 17, 2001
- ---------------------------------------------------         Corporate Controller
               Charles B. Clark, Jr.                   (Principal Accounting Officer)

                         *                                        Director                April 17, 2001
- ---------------------------------------------------
                 Jeffrey E. Garten

                         *                                        Director                April 17, 2001
- ---------------------------------------------------
                 Michael P. Polsky

                                                                  Director
- ---------------------------------------------------
                  Susan C. Schwab

                         *                                        Director                April 17, 2001
- ---------------------------------------------------
                George J. Stathakis

                         *                                        Director                April 17, 2001
- ---------------------------------------------------
                  John O. Wilson
</TABLE>


                                       II-5
<PAGE>   52


<TABLE>
<CAPTION>
                     SIGNATURE                                      TITLE                      DATE
                     ---------                                      -----                      ----

<C>                                                  <C>                                  <S>
                                                                  Director
- ---------------------------------------------------
                 V. Orville Wright

               */s/ PETER CARTWRIGHT
- ---------------------------------------------------
                 Peter Cartwright
                 Attorney-in-fact
</TABLE>


                                       II-6
<PAGE>   53

                                   SIGNATURES


     Pursuant to the requirements of the Securities Act of 1933, Calpine Canada
Energy Finance ULC certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of San Jose, State of
California, on this 17th day of April, 2001.


                                          CALPINE CANADA ENERGY FINANCE ULC

                                          By        /s/ ANN B. CURTIS
                                            ------------------------------------
                                                Executive Vice President and
                                                          Secretary

                       CALPINE CANADA ENERGY FINANCE ULC


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Registration Statement on Form S-3 has been signed below by the following
persons on behalf of Calpine Canada Energy Finance ULC and in the capacities and
on the dates indicated.



<TABLE>
<CAPTION>
                     SIGNATURE                                      TITLE                      DATE
                     ---------                                      -----                      ----
<C>                                                  <C>                                  <S>
               /s/ PETER CARTWRIGHT                        President and Director         April 17, 2001
- ---------------------------------------------------     (Principal Executive Officer)
                 Peter Cartwright

                 /s/ ANN B. CURTIS                        Executive Vice President,       April 17, 2001
- ---------------------------------------------------        Secretary and Director
                   Ann B. Curtis                          (Principal Financial and
                                                             Accounting Officer)

           Authorized representative in
                 The United States

                 /s/ ANN B. CURTIS                                                        April 17, 2001
- ---------------------------------------------------
             Authorized Representative
</TABLE>


                                       II-7
<PAGE>   54

                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
EXHIBIT
NUMBER                           DESCRIPTION
- -------                          -----------
<C>      <S>
 (a)1.1  Form of Underwriting Agreement with respect to Common Stock,
         Preferred Stock and Debt Securities of Calpine
   *1.2  Form of Underwriting Agreement with respect to Debt
         Securities of Calpine Canada Energy Finance
 (b)3.1  Amended and Restated Certificate of Incorporation of Calpine
 (c)3.2  By-laws of Calpine
   +3.3  Memorandum of Association of Calpine Canada Energy Finance
   +3.4  Articles of Association of Calpine Canada Energy Finance
 (d)4.1  Form of Indenture between Calpine and Wilmington Trust
         Company, including form of Note
 (e)4.2  Rights Agreement, dated as of June 5, 1997, between Calpine
         and First Chicago Trust Company of New York, as Rights Agent
   *4.3  Form of Indenture between Calpine Canada Energy Finance and
         Wilmington Trust Company, including form of Note (the
         "Calpine Canada Energy Finance ULC Indenture")
   *4.4  Form of Guarantee Agreement of Calpine with respect to
         Senior Debt Securities of Calpine Canada Energy Finance (the
         "Calpine Guarantee")
   *5.1  Opinion of Covington & Burling
   *8.1  Opinion of Covington & Burling as to certain tax matters
   *8.2  Opinion of Bennett Jones as to certain Canadian federal tax
         matters
  +12.1  Statement Regarding Computation of Ratios
  *23.1  Consent of Arthur Andersen LLP, independent public
         accountants
  *23.2  Consent of Covington & Burling (included in Exhibits 5.1 and
         8.1)
  *23.3  Consent of Bennett Jones (included in Exhibit 8.2)
  +24.1  Power of Attorney of Officers and Directors of Calpine (see
         pages II-5 and II-6)
  +24.2  Power of Attorney of Officers and Directors of Calpine
         Canada Energy Finance (see page II-7)
(d)25.1  Form T-1 Statement of Eligibility under the Trust Indenture
         Act of 1939, as amended, of Wilmington Trust Company, as
         Trustee under the Calpine Corporation Indenture
  *25.2  Form T-1 Statements of Eligibility under the Trust Indenture
         Act of 1939, as amended, of Wilmington Trust Company, as
         Trustee under each of (i) the Calpine Canada Energy Finance
         Indenture, and (ii) the Calpine Guarantee
</TABLE>


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

  * Filed herewith.



  + Previously filed.


(a) Incorporated by reference to Calpine's Registration Statement on Form S-3
    (Registration No. 333-4827.

(b) Incorporated by reference to Calpine's Registration Statement on Form S-3
    (Registration No. 333-40652).

(c) Incorporated by reference to Calpine's Registration Statement on Form S-1
    (Registration No. 333-07497).

(d) Incorporated by reference to Amendment No. 1 to Calpine's Registration
    Statement on Form S-3 (Registration No. 333-40652).

(e) Incorporated by reference to Calpine's Registration Statement on Form 8-A,
    as amended by Calpine's Registration Statement on Form 8-A/A (File No.
    001-12079).
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.2
<SEQUENCE>2
<FILENAME>f70590a1ex1-2.txt
<DESCRIPTION>EXHIBIT 1.2
<TEXT>

<PAGE>   1
                                                                     EXHIBIT 1.2

                        CALPINE CANADA ENERGY FINANCE ULC

                             % Senior Notes due 2008

                     Fully and Unconditionally Guaranteed By

                               CALPINE CORPORATION



                             UNDERWRITING AGREEMENT
                             ----------------------


                                                                          , 2001


Credit Suisse First Boston Corporation,
  As Representative of the Several Underwriters,
   Eleven Madison Avenue
New York, NY  10010-3269

Dear Sirs:


     1.   Introductory. Calpine Canada Energy Finance ULC, a Nova Scotia
unlimited liability company (the "COMPANY"), proposes, subject to the terms and
conditions stated herein, to issue and sell $              principal amount of
its    % Notes due 2008 (the "SECURITIES"), which will be fully and
unconditionally guaranteed (the "Guarantees") by Calpine Corporation, a Delaware
corporation (the "PARENT"). The Securities will be issued under an indenture,
dated as of , 2001 (the "INDENTURE"), between the Company and Wilmington Trust
Company as Trustee. The Guarantee will be issued under a Guarantee Agreement,
dated as of , 2001 (the "Guarantee Agreement") made by the Parent. The Company
hereby agrees with the several underwriters named in Schedule A hereto (the
"UNDERWRITERS") as follows:

     2.   Representations and Warranties of the Company. Each of the Company and
the Parent represents and warrants to, and agrees with, the several Underwriters
that:

          (a)  A registration statement (No. 333-   ), including a form of
prospectus, relating to the debt and equity securities of the Parent, the
Guarantees of the Parent, and the debt securities of the Company to be issued
from time to time (the "REGISTERED SECURITIES") has been filed with the
Securities and Exchange Commission (the "COMMISSION"), such registration
statement, as it may have been amended prior to the date of this Agreement, has
become and has been declared effective under the Securities Act of 1933 (the
"SECURITIES ACT") on April    , 2001. Such registration statement, as amended at
the time of this Agreement, is hereinafter referred to as the "REGISTRATION
STATEMENT", and the prospectus included in such Registration Statement, as
supplemented by a prospectus supplement to reflect the terms of the Securities
and terms of offering thereof, as first filed with the Commission pursuant to
and in accordance with Rule 424(b) ("RULE 424(b)") under the Securities Act,
including all material incorporated by reference therein, is hereinafter
referred to as the "PROSPECTUS". No document has been or will be prepared or
distributed in reliance on Rule 434 under the Securities Act. No stop order
suspending the effectiveness of the Registration Statement is in effect and no
proceedings for such purpose are pending before or threatened by the Commission.


<PAGE>   2


          (b)  On the effective date of the Registration Statement relating to
the Registered Securities, such Registration Statement conformed in all respects
to the requirements of the Securities Act, the Trust Indenture Act of 1939
("TRUST INDENTURE ACT") and the rules and regulations of the Commission ("RULES
AND REGULATIONS") and did not include any untrue statement of material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and on the date of this Agreement,
the Registration Statement and Prospectus will conform in all respects to the
requirements of the Securities Act, the Trust Indenture Act and the Rules and
Regulations, and neither of such documents will include any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, except that the
foregoing does not apply to statements in or omissions from any of such
documents based upon written information furnished to the Company or the Parent
by any Underwriter through the Representative (as defined below), if any,
specifically for use therein, it being understood and agreed that the only such
information is that described as such in Section 7(b) hereof.

          (c)  The Company is an unlimited liability company duly organized and
validly subsisting under the laws of the Province of Nova Scotia with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires such
qualification.

          (d)  The Parent has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus; and the Company is duly qualified to do
business as a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires
such qualification.

          (e)  Each Subsidiary (x) other than the Company and (y) other than
those Subsidiaries specified in clause (z) of this subparagraph has been duly
incorporated and is an existing corporation in good standing under the laws of
the jurisdiction of its incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus; or (z) that is not a corporation is a limited partnership, a limited
liability company or business trust, has been duly formed and is validly
existing as a limited partnership, a limited liability company or a business
trust, as the case may be, in good standing under the laws of the jurisdiction
of its formation, and has full power and authority to own its properties and
conduct its business as described in the Prospectus; each Subsidiary is duly
qualified to do business as a foreign corporation, limited partnership, limited
liability company or business trust, as the case may be, in good standing in all
other jurisdictions in which its ownership or lease of property or the conduct
of its business requires such qualification; all of the issued and outstanding
capital stock of each Subsidiary has been duly authorized and validly issued and
is fully paid and nonassessable; except as set forth on Schedule B to this
Agreement, the capital stock of each Subsidiary owned by the Parent, directly or
through Subsidiaries, is owned free from liens, encumbrances and defects; and
the Parent is not a general partner in any partnership. For purposes of this
agreement, "SUBSIDIARY" means, as applied to the Parent, any corporation,
limited or general partnership, trust, association or other business entity of
which an aggregate of at least 50% of the outstanding Voting Shares or an
equivalent controlling interest herein, of such person is, at any time, directly
or indirectly, owned by the Parent and/or one or more subsidiaries of the
Parent, other than the Company. For purposes of the definition of "Subsidiary",
"VOTING SHARES" means, with respect to any corporation, the capital stock having
the general voting power under ordinary circumstances to elect at least a
majority of the board of

                                       2
<PAGE>   3

directors (irrespective of whether or not at the time stock of any other class
or classes shall have or might have voting power by reason of the happening of
any contingency).

          (f)  The Indenture has been duly authorized and has been duly
qualified under the Trust Indenture Act; the Securities have been duly
authorized; and when the Securities are delivered and paid for pursuant to this
Agreement on the Closing Date (as defined below), the Indenture will have been
duly executed and delivered and will conform to the description thereof
contained in the Prospectus, such Securities will have been duly executed,
authenticated, issued and delivered and will conform to the description thereof
contained in the Prospectus and the Indenture and such Securities will
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.

          (g)  Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company or the Parent and any person
that would give rise to a valid claim against any of the Company, the Parent or
any Underwriter for a brokerage commission, finder's fee or other like payment.

          (h)  Except as set forth on Schedule B to this Agreement, there are no
contracts, agreements or understandings between the Company, the Parent and any
person granting such person the right to require the Company or the Parent to
file a registration statement under the Securities Act with respect to any
securities of the Company or the Parent owned or to be owned by such person or
to require the Company or the Parent to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company or the Parent under the Securities Act.

          (i)  No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the consummation of
the transactions contemplated by this Agreement in connection with the issuance
and sale of the Securities by the Company or the issuance of the Guarantees by
the Parent, except such as have been obtained and made under the Securities Act,
the Trust Indenture Act and such as may be required under state securities laws.

          (j) The execution, delivery and performance of the Indenture, this
Agreement and the Guarantee Agreement, the issuance and sale of the Securities
and the Guarantees and compliance with the terms and provisions thereof, the
issuance of the Guarantees and the consummation by the Parent and the Company of
the transactions contemplated herein and therein will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any statute, any rule, regulation or order of any governmental agency or body or
any court, domestic or foreign, having jurisdiction over the Parent, the Company
or any Subsidiary or any of their properties, or any agreement or instrument to
which the Parent, the Company or any such Subsidiary is a party or by which the
Company, the Parent or any such Subsidiary is bound or to which any of the
properties of the Company, the Parent or any such Subsidiary is subject, or the
charter, by-laws, memorandum of association, articles of association or other
organizational document of the Company, the Parent or any such Subsidiary, and
each of the Company and the Parent has full power and authority to authorize,
issue and sell the Securities or the Guarantees, as the case may be, as
contemplated by this Agreement.

          (k)  This Agreement has been duly authorized, executed and delivered
by each of the Company and the Parent.


                                       3
<PAGE>   4


          (l)  Except as disclosed in the Prospectus, the Company, the Parent
and the Subsidiaries have good and marketable title to all real properties and
all other properties and assets owned by each of them, in each case free from
liens, encumbrances and defects that would materially affect the value thereof
or materially interfere with the use made or to be made thereof by them; and
except as disclosed in the Prospectus, the Company, the Parent and the
Subsidiaries hold any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with the
use made or to be made thereof by them.

          (m)  The Company, the Parent and the Subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental agencies
or bodies necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit that, if determined adversely to the
Company, the Parent or any of the Subsidiaries, would individually or in the
aggregate have a material adverse effect on the condition (financial or other),
business, properties or results of operations of the Parent, the Company and the
Subsidiaries taken as a whole ("MATERIAL ADVERSE EFFECT").

          (n)  No labor dispute with the employees of the Company, the Parent or
any Subsidiary exists or, to the knowledge of the Company and the Parent, is
imminent that might have a Material Adverse Effect.

          (o)  Each of the Company, the Parent and the Subsidiaries own, possess
or can acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential information
and other intellectual property (collectively, "INTELLECTUAL PROPERTY RIGHTS")
necessary to conduct the business now operated by them, or presently employed by
them, and have not received any notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property rights that,
if determined adversely to the Company, the Parent or any Subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.

          (p)  Except as disclosed in the Prospectus, neither the Company, the
Parent nor any of the Subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively, "ENVIRONMENTAL
LAWS"), owns or operates any real property contaminated with any substance that
is subject to any Environmental Laws, is liable for any off-site disposal or
contamination pursuant to any Environmental Laws, or is subject to any claim
relating to any Environmental Laws, which violation, contamination, liability or
claim would individually or in the aggregate have a Material Adverse Effect; and
neither the Company nor the Parent is aware of any pending investigation which
might lead to such a claim.

          (q)  Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, the Parent or
any of the Subsidiaries or any of their respective properties that, if
determined adversely to the Company, the Parent or any of the Subsidiaries,
would individually or in the aggregate have a Material Adverse Effect, or would
materially and adversely affect the ability of the Company or the Parent to
perform its respective obligations under, or as contemplated by, this Agreement,
or which are otherwise material in the context of the sale of the Securities;
and no such actions, suits or proceedings are threatened or, to the knowledge of
the Company or the Parent, contemplated.

                                       4
<PAGE>   5



          (r)  The financial statements included in the Registration Statement
and the Prospectus present fairly the financial position of the Parent and its
consolidated subsidiaries as of the dates shown and their results of operations
and cash flows for the periods shown, and except as otherwise disclosed in the
Prospectus, such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States applied on a
consistent basis; and the assumptions used in preparing the pro forma financial
statements included in the Registration Statement and the Prospectus provide a
reasonable basis for presenting the significant effects directly attributable to
the transactions or events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma columns therein
reflect the proper application of those adjustments to the corresponding
historical financial statement amounts.

          (s)  The statistical and market-related data (other than
market-related data and statistical data provided by the Company or the Parent)
included in the Registration Statement and Prospectus are based on or derived
from sources which the Company and the Parent believe to be reliable and
accurate, it being understood, however, that neither the Company nor the Parent
has conducted any independent investigation of the accuracy thereof.

          (t)  Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has been no
material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
properties or results of operations of the Company, the Parent and its
Subsidiaries taken as a whole, and, except as disclosed in or contemplated by
the Prospectus, there has been no dividend or distribution of any kind declared,
paid or made by the Company or the Parent on any class of its capital stock.

          (u)  Neither the Company or the Parent is, nor after giving effect to
the offering, the sale of the Securities, and the application of the proceeds
thereof as described in the Prospectus, will be an "INVESTMENT COMPANY" as
defined in the Investment Company Act of 1940.

          (v)  Neither the Company, the Parent nor any of the Subsidiaries is
(i) a "holding company" or a "subsidiary" of a holding company or a "public
utility company" under Section 2(a) of the Public Utility Holding Company Act of
1935 ("PUHCA") (except that certain Subsidiaries that are EWGs (as defined
herein) or QFs (as defined herein) and Cogeneration Corporation of America are
subsidiaries of a holding company), (ii) subject to regulation under the Federal
Power Act, as amended ("FPA"), other than as a power marketer or an "exempt
wholesale generator" ("EWG") that is a "public utility" under the FPA or as a
"qualifying facility" ("QF") under the Public Utility Regulatory Policies Act of
1978, as amended (16 U.S.C. ss. 796 et seq.) ("PURPA"), as contemplated by 18
C.F.R. ss.292.601(c) or (iii) with respect to each of the power generation
projects in which the Company or its Subsidiaries has an interest that is a QF,
subject to any state law or regulation with respect to rates or the financial or
organizational regulation of electric utilities, other than as contemplated by
18 C.F.R. ss.292.602(c).

          (w)  Each of the power generation projects in which the Company, the
Parent or the Subsidiaries has an interest (the "PROJECTS") which is subject to
the requirements under PURPA and the regulations of the Federal Energy
Regulatory Commission ("FERC") promulgated thereunder, as amended from time to
time, necessary to be a "QUALIFYING COGENERATION FACILITY" and/or a "QUALIFYING
SMALL POWER PRODUCTION FACILITY" meets such requirements.


                                       5
<PAGE>   6



          (x)  The Parent is subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT").

          (y)  The Guarantee Agreement and each Guarantee issued thereunder has
been duly and validly authorized and, upon its execution and delivery by the
Parent, will be a valid and binding agreement of the Parent, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.

     3.   Purchase, Sale and Delivery of Securities and Guarantees. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company (and, with respect to the Guarantees, from the Parent), at a
purchase price of    % of the principal amount thereof, the respective principal
amounts of Securities (and the accompanying Guarantees) set forth opposite the
names of the Underwriters in Schedule A hereto.

     The  Company will deliver against payment of the purchase price the
Securities in the form of one or more permanent global securities in definitive
form (the "GLOBAL SECURITIES") deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee for DTC. Interests in any permanent Global Securities will be held only
in book-entry form through DTC, except in the limited circumstances described in
the Prospectus. Payment for the Securities shall be made by the Underwriters in
Federal (same day) funds by official bank check or checks or wire transfer to an
account at a bank acceptable to Credit Suisse First Boston Corporation ("CSFBC")
drawn to the order of Calpine Canada Energy Finance ULC at the office of
Covington & Burling, 1330 Avenue of the Americas, New York, New York at 10:00
A.M., (New York time), on          , 2001 , or at such other time not later than
seven full business days thereafter as CSFBC and the Company determine, such
time being herein referred to as the "CLOSING DATE", against delivery to the
Trustee as custodian for DTC of the Global Securities representing all of the
Securities. The Global Securities will be made available for checking at the
office of Covington & Burling at least 24 hours prior to the Closing Date.

     4.   Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities and the accompanying Guarantees for
sale to the public as set forth in the Prospectus.

     5.   Certain Agreements of the Company and the Parent. The Company and the
Parent agree with the several Underwriters that they will furnish to counsel to
the Underwriters one signed copy of the registration statement relating to the
Registered Securities, including all exhibits, in the form it became effective
and of all amendments thereto and that, in connection with the offering of the
Securities:

          (a)  The Company and the Parent will file the Prospectus with the
Commission pursuant to and in accordance with Rule 424(b)(2) (or, if applicable
and if consented to by CSFBC, subparagraph (5)) not later than the second
business day following the execution and delivery of this Agreement.

          (b)  The Company and the Parent will advise CSFBC promptly of any
proposal to amend or supplement the Registration Statement or the Prospectus and
will afford CSFBC a reasonable opportunity to comment on any such proposed
amendment or supplement; and the Company and the Parent will also advise CSFBC
promptly of the effectiveness of any such amendment or supplement and of the
institution by the Commission of any stop order proceedings in respect of a
Registration Statement or of any part thereof

                                       6
<PAGE>   7

and will use its best efforts to prevent the issuance of any such stop order and
to obtain as soon as possible its lifting, if issued.

          (c)  If, at any time when a prospectus relating to the Securities is
required to be delivered under the Securities Act in connection with sales by
any Underwriter or dealer, any event occurs as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Securities Act, the Company and the Parent will promptly
notify CSFBC of such event and will promptly prepare and file with the
Commission, at their own expense, an amendment or supplement which will correct
such statement or omission or an amendment which will effect such compliance.
Neither CSFBC's consent to, nor the Underwriters' delivery to offerees or
investors of, any such amendment or supplement shall constitute a waiver of any
of the conditions set forth in Section 6 hereof.

          (d)  As soon as practicable, but not later than 16 months, after the
date of this Agreement, the Parent will make generally available to the holders
of the Securities and the accompanying Guarantees an earnings statement covering
a period of at least 12 months beginning after the latest of (i) the effective
date of the registration statement relating to the Registered Securities; (ii)
the effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of this Agreement;
and (iii) the date of the Company's most recent Annual Report on Form 10-K filed
with the Commission prior to date of this Agreement, which will satisfy the
provisions of Section 11(a) of the Act.

          (e)  The Company and the Parent will furnish to the Representative
copies of the Registration Statement (three of which will be signed and will
include all exhibits), any related preliminary prospectus, any related
preliminary prospectus supplement, the Prospectus and all amendments and
supplements to such documents, in each case in such quantities as CSFBC
requests, so long as a prospectus relating to the Securities is required to be
delivered under the Securities Act in connection with sales by any Underwriter
or dealer. The Prospectus shall be so furnished on or prior to 3:00 P.M., New
York time, on the business day following the execution of this Agreement. All
other documents shall be so furnished as soon as available. The Company and the
Parent will pay the expenses of printing and distributing to the Underwriters
all such documents.

          (f)  The Company and the Parent will arrange for the qualification of
the Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as CSFBC designates and will
continue such qualifications in effect so long as required for the distribution,
provided that neither the Company nor the Parent will be required to qualify as
a foreign corporation or to file a general consent to service of process in any
such state.

          (g)  During the period of five years after the date this Agreement,
the Parent will furnish to CSFBC and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a copy
of its annual report to stockholders for such year; the Parent will furnish to
CSFBC and, upon request, to each of the other Underwriters (i) as soon as
available, a copy of each report and any definitive proxy statement of the
Parent filed with the Commission under the Exchange Act or mailed to
stockholders, and (ii) from time to time, such other information concerning the
Company or the Parent as CSFBC may reasonably request.

          (h)  During the period of two years after the Closing Date, neither
the Company nor the Parent will be or become an "investment company" as defined
in the Investment Company Act of 1940.

                                       7
<PAGE>   8



          (i)  The Company and the Parent will pay all expenses incident to the
performance of their obligations under this Agreement, for any filing fees and
other expenses (including fees and disbursements of counsel) incurred in
connection with qualification of the Securities for sale and any determination
of their eligibility for investment, under the laws of such jurisdictions as
CSFBC designates and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Securities, for the
filing fee incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. of the Securities and related securities, for any
travel expenses of the Company's or the Parent's officers and employees and any
other expenses of the Company or the Parent in connection with attending or
hosting meetings with prospective purchasers of the Securities and for expenses
incurred in distributing the Prospectus, any preliminary prospectuses, any
preliminary prospectus supplements or any other amendments or supplements to the
Prospectus to the Underwriters. The Company and the Parent will reimburse the
Underwriters for all travel expenses of the Underwriters and any other expenses
of the Underwriters in connection with attending or hosting meetings with
prospective purchasers of the Securities.

          (j)  For a period of 30 days after the date hereof, neither the
Company nor the Parent will, and the Parent will not permit the Subsidiaries to,
offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under the
Securities Act relating to (A) any United States dollar-denominated debt
securities issued or guaranteed by the either of the Company or the Parent and
having a maturity of more than one year from date of issue (provided, that this
subsection (A) shall in no event apply to any debt securities convertible into
equity securities of either of Parent or Company), or (B) any other securities
which are convertible into, or exchangeable or exercisable for, any of (A), or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of CSFBC.

     6.   Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Securities on the Closing
Date will be subject to the accuracy of the representations and warranties on
the part of the Company and the Parent herein, to the accuracy of the statements
of officers of the Company and the Parent made pursuant to the provisions
hereof, to the performance by the Company and the Parent of their obligations
hereunder and to the following additional conditions precedent:

          (a)  The Representative shall have received a letter, dated the date
of delivery thereof (which shall be on the date of this Agreement), of Arthur
Andersen LLP confirming that they are independent public accountants within the
meaning of the Securities Act and the applicable published Rules and Regulations
and stating to the effect that:

               (i)  in their opinion the financial statements and schedules
     examined by them and included in the Prospectus comply as to form in all
     material respects with the applicable accounting requirements of the
     Securities Act and the related published Rules and Regulations;

               (ii) on the basis of their review of the unaudited pro forma
     financial statements, selected consolidated financial data and ratio of
     earnings to fixed charges included in the Registration Statement and
     inquiries of officials of the Parent who have responsibility for financial
     and accounting matters and other specified procedures, nothing came to
     their attention that caused them to believe that:

                                      8

<PAGE>   9


               (A)  the unaudited pro forma financial, selected consolidated
          financial data and ratio of earnings to fixed charges statements
          included in the Registration Statement do not each comply as to form
          in all material respects with the applicable accounting requirements
          under the Securities Act;

               (B)  at the date of the latest available balance sheet read by
          such accountants, or at a subsequent specified date not more than
          three business days prior to the date of this Agreement, there was any
          change in the capital stock or any increase in short-term indebtedness
          or long-term debt of the Parent and its consolidated subsidiaries or,
          at the date of the latest available balance sheet read by such
          accountants, there was any decrease in consolidated net current assets
          or net assets, as compared with amounts shown on the latest balance
          sheet included in the Exchange Act Reports; or

               (C)  for the period from the closing date of the latest income
          statement included in the Parent's Annual Report on Form 10-K most
          recently filed with the Commission and all subsequent reports (the
          "Exchange Act Reports") which have been filed by the Parent with the
          Commission or sent to stockholders pursuant to the Securities Exchange
          Act of 1934 to the closing date of the latest available income
          statement read by such accountants there were any decreases, as
          compared with the corresponding period of the previous year, in
          consolidated net revenues, or net operating income or in the total or
          per share amounts of consolidated net income or in the ratio of
          earnings to fixed charges and preferred stock dividends combined,
          except in all cases set forth in clause (B) above for changes,
          increases or decreases which the Prospectus discloses have occurred or
          may occur or which are described in such letter; and

               (iii) they have compared specified dollar amounts (or percentages
     derived from such dollar amounts) and other financial information contained
     in the Registration Statement (in each case to the extent that such dollar
     amounts, percentages and other financial information are derived from the
     general accounting records of the Parent and the Subsidiaries subject to
     the internal controls of the Parent's accounting system or are derived
     directly from such records by analysis or computation) with the results
     obtained from inquiries, a reading of such general accounting records and
     other procedures specified in such letter and have found such dollar
     amounts, percentages and other financial information to be in agreement
     with such results, except as otherwise specified in such letter.

All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus for
purposes of this subsection.

          (b)  The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this Agreement. No
stop order suspending the effectiveness of the Registration Statement or of any
part thereof shall have been issued and no proceedings for that purpose shall
have been instituted or, to the knowledge of the Company, the Parent or any
Underwriter, shall be contemplated by the Commission.

          (c)  Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Parent, the Company and the Subsidiaries taken
as one enterprise which, in the judgment of a majority in interest of the
Underwriters including CSFBC,

                                       9
<PAGE>   10

is material and adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the Securities;
(ii) any downgrading in the rating of any debt securities of the Company or the
Parent by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Securities Act), or any public
announcement that any such organization has under surveillance or review its
rating of any debt securities of the Company or the Parent (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any material
suspension or material limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Parent on any
exchange or in the over-the-counter market; (iv) any banking moratorium declared
by U.S. Federal or New York authorities; or (v) any outbreak or escalation of
major hostilities in which the United States is involved, any declaration of war
by Congress or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the Underwriters
including CSFBC, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the Securities.

          (d)  The Representative shall have received an opinion with respect to
matters of United Sates law only, dated the Closing Date, of Covington &
Burling, counsel for the Parent and the Company (with respect to certain
non-Canadian matters), to the effect that:

               (i)  The Parent is a corporation duly incorporated, validly
     existing and in good standing under the laws of the State of Delaware and
     has the corporate power and authority to own its properties and conduct its
     business as described in the Prospectus;

               (ii) (A) The Indenture has been duly qualified under the Trust
     Indenture Act, (B) the Securities and the Indenture delivered on the
     Closing Date each conform to the respective descriptions thereof contained
     in the Prospectus; (C) assuming due execution and delivery by the Company,
     the Indenture delivered on the Closing Date constitutes the valid and
     binding obligation of the Company, enforceable in accordance with its
     terms; and (D) assuming the Securities have been duly and validly
     authorized and executed by the Company, the Securities constitute the valid
     and binding obligations of the Company, enforceable in accordance with
     their respective terms; subject, in the case of clauses (C) and (D), to
     bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
     other laws of general applicability relating to or affecting creditors'
     rights and to general equity principles;

               (iii) (A) The Guarantee Agreement and each Guarantee issued
     thereunder has been duly authorized, executed and delivered by the Parent
     and constitute the valid and binding obligations of the Parent, enforceable
     in accordance with their terms, subject to bankruptcy, insolvency,
     fraudulent transfer, reorganization, moratorium and other laws of general
     applicability relating to or affecting creditors' rights and to general
     equity principles; and (B) the Guarantees conform to the description
     thereof contained in the Prospectus;

               (iv) Except as set forth on Schedule B to this Agreement, there
     are no contracts, agreements or understandings known to such counsel
     between the Company, the Parent and any person granting such person the
     right to require the Company or the Parent to file a registration statement
     under the Securities Act with respect to any securities of the Company or
     the Parent owned or to be owned by such person or to require the Company or
     the Parent to include such securities in the securities registered pursuant
     to the Registration Statement or in any securities being registered

                                       10
<PAGE>   11

     pursuant to any other registration statement filed by the Company or the
     Parent under the Securities Act;

               (v)  Neither the Company or the Parent is, nor after giving
     effect to the offering and sale of the Securities and the application of
     the proceeds thereof as described in the Prospectus, will not be an
     "investment company" within the meaning of the Investment Company Act of
     1940;

               (vi) No consent, approval, authorization or order of, or filing
     with, any governmental agency or body or any court is required for the
     consummation by the Company or the Parent of the transactions contemplated
     by this Agreement in connection with the issuance or sale of the Securities
     by the Company and the issuance of the Guarantees by the Parent, except
     such as have been obtained and made under the Securities Act, the Trust
     Indenture Act and the respective rules and regulations promulgated under
     the foregoing, and except for any of the foregoing as may be required under
     State securities or blue sky laws and the rules and regulations promulgated
     thereunder;

               (vii) Except as set forth in the Prospectus, to such counsel's
     knowledge, there are no pending or threatened actions, suits or proceedings
     against or affecting the Company, the Parent or any of the Subsidiaries or
     any of their respective properties that, if determined adversely to the
     Company, the Parent or any of the Subsidiaries, would individually or in
     the aggregate have a Material Adverse Effect or would materially and
     adversely affect the ability of the Company or the Parent to perform its
     obligations under this Agreement;

               (viii) The execution, delivery and performance of the Indenture,
     this Agreement, the Guarantees and the issuance and sale of the Securities
     and compliance with the terms and provisions thereof will not (A) violate
     any statute, rule, regulation or order of which such counsel is aware of
     any U.S. governmental agency or body or any court having jurisdiction over
     the Parent or any Subsidiary (other than the Company) or any of their
     respective properties, (B) to such counsel's knowledge, breach the
     provisions of, or cause a default under, any agreement or instrument to
     which the Parent or such Subsidiary (other than the Company) is a party or
     by which the Parent or any Subsidiary is bound or to which any of the
     properties of the Parent or any such Subsidiary is subject, or (C) violate
     any provision of the charter, by-laws or any other constitutive document of
     the Parent or any Subsidiary (other than the Company);

               (ix) The Registration Statement was declared effective under the
     Securities Act as of the date and time specified in such opinion, the
     Prospectus was filed with the Commission pursuant to the subparagraph of
     Rule 424(b) specified in such opinion on the date specified therein, and,
     to the best of the knowledge of such counsel, no stop order suspending the
     effectiveness of the Registration Statement or any part thereof has been
     issued and no proceedings for that purpose have been instituted or are
     pending or contemplated under the Securities Act, and the registration
     statement relating to the Registered Securities, as of its effective date,
     the Registration Statement and the Prospectus, as of the date of this
     Agreement, and each amendment or supplement thereto, as of their respective
     effective or issue dates, complied as to form in all material respects with
     the requirements of the Securities Act, the Trust Indenture Act and the
     Rules and Regulations; such counsel, while not passing upon and not
     assuming responsibility for the accuracy, completeness or fairness of the
     statements contained in the Registration Statement, any amendment thereto
     or the Prospectus except to the extent specifically set forth in this
     paragraph (ix), does not believe that any part of the Registration
     Statement or any amendment thereto, as of its date or as of the Closing
     Date,
                                       11
<PAGE>   12


     contained any untrue statement of a material fact or omitted to state any
     material fact necessary to make the statements therein not misleading or
     that any part of the Prospectus, as of the date of this Agreement or as of
     the Closing Date, or any amendment or supplement thereto, as of its date or
     as of the Closing Date, contained any untrue statement of a material fact
     or omitted to state any material fact necessary to make the statements
     therein, in the light of the circumstances under which they were made, not
     misleading; the statements in the Registration Statement and the Prospectus
     under the captions "Description of the Debt Securities," "Description of
     Senior Notes and Guarantees," "Certain United States Federal Income Tax
     Consequences," "Certain Income Tax Consequences", and "Description of
     Capital Stock," insofar as such statements constitute summaries of the
     laws, regulations, legal matters, agreements or other legal documents
     referred to therein, are accurate in all material respects and fairly
     summarize the matters referred to therein; and such counsel do not know of
     any legal or governmental proceedings required to be described in the
     Registration Statement or the Prospectus which are not described as
     required or of any contracts or documents of a character required to be
     described in the Registration Statement or the Prospectus or to be filed as
     exhibits to the Registration Statement which are not described and filed as
     required; it being understood that such counsel need express no opinion or
     belief as to the financial statements or other financial or statistical
     data derived therefrom contained in the Registration Statements or the
     Prospectus; and

                    (x)  This Agreement has been duly authorized executed and
     delivered by the Parent, and, insofar as execution and delivery are matters
     governed by New York law, duly executed and delivered by the Company.

     For  the purposes of this subsection (d) only, the term "Subsidiary" shall
have the meaning given to the term "significant subsidiary" in Rule 1-02(w) of
Regulation S-X under the Securities Act.

          (e)  The Representative shall have received an opinion, dated the
Closing Date, of Bennett Jones LLP, Canadian counsel for the Parent and the
Company, to the effect that:

                    (i)  The Company is an unlimited liability company duly
     organized and validly existing and in good standing under the laws of the
     province of Nova Scotia and has the corporate power and authority to own
     its properties and conduct its business as described in the Prospectus;

                    (ii) (A) The Indenture has been duly authorized, executed
     and delivered by the Company, (B) the Indenture and the obligations of the
     parties thereunder are not contrary to and do not violate any applicable
     laws of the province of Nova Scotia or the federal laws of Canada; (C) the
     Indenture delivered on the Closing Date constitutes the valid and binding
     obligation of the Company; (D) the Securities constitute the valid and
     binding obligations of the Company, enforceable in accordance with their
     respective terms; (E) the Securities and the obligations of the Company
     thereunder are not contrary to and do not violate any applicable laws of
     the province of Nova Scotia or the federal laws of Canada; (F) the
     Securities have been duly authorized, executed and delivered by the
     Company; and (G) the Securities delivered on the Closing Date conform to
     the descriptions thereof contained in the Prospectus subject, in the case
     of clauses (C) and (D), to bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and other laws of general applicability relating
     to or affecting creditors' rights and to general equity principles;

                                       12
<PAGE>   13


                    (iii) No consent, approval, authorization or order of, or
     filing with, any governmental agency or body or any court, in each case in
     the province of Nova Scotia or in Canada, is required for the consummation
     by the Company of the transactions contemplated by this Agreement in
     connection with the issuance or sale of the Securities by the Company;

                    (iv)  The execution, delivery and performance of the
     Indenture, this Agreement, and the issuance and sale of the Securities and
     compliance with the terms and provisions thereof will not (A) violate any
     statute, rule, regulation or order of which such counsel is aware of any
     governmental agency or body or any court having jurisdiction over the
     Company or any of its properties, (B) to such counsel's knowledge, breach
     the provisions of, or cause a default under, any agreement or instrument to
     which the Company is a party or by which the Company is bound or to which
     any of the properties of the Company is subject, or (C) violate any
     provision of the memorandum of association, articles of association,
     charter, by-laws or any other constitutive document of the Company;

                    (v) The statements in the Registration Statement and the
     Prospectus under the caption "Certain Canadian Federal Income Tax
     Considerations", insofar as such statements constitute summaries of the
     laws, regulations, legal matters, agreements or other legal documents
     referred to therein, are accurate in all material respects and fairly
     summarize the matters referred to therein;

                    (vi) This Agreement has been duly authorized, executed and
     delivered by the Company, and this Agreement and the obligations of the
     Company hereunder, are not contrary to and do not violate any applicable
     laws of the province of Nova Scotia or the federal laws of Canada; and

                    (vii) The Company's agreement to the choice of law
     provisions set forth in Section 14 hereof will be recognized by the courts
     of Nova Scotia and the Canadian federal courts; the agreement of the
     Company that this Agreement shall be governed by and construed in
     accordance with the laws of the State of New York and would be upheld by a
     Nova Scotian or Canadian federal court; and a final and conclusive judgment
     for a sum certain, in personam obtained in a New York court of competent
     jurisdiction which is not void or voidable under New York law arising out
     of or in relation to the obligations of the Company under this Agreement,
     would be enforceable against the Company in the courts of Nova Scotia and
     the Canadian federal courts. The opinion described in this paragraph (viii)
     may be given subject to limitations and qualifications regarding public
     policy, rules of evidence, principal in equity and the inherent
     jurisdiction of the Nova Scotia and Canadian federal courts.

     (f)  The Representative shall have received an opinion, dated such Closing
Date, of Lisa Bodensteiner, Senior Vice President and General Counsel of the
Company, to the effect that:

                                       13
<PAGE>   14


                    (i)  Each Subsidiary (x) other than those Subsidiaries
     specified in clause (y) of this Section 7(f)(i) has been duly incorporated,
     is validly existing as a corporation in good standing under the laws of the
     jurisdiction of its incorporation, and has corporate power and authority to
     own its property and to conduct its business as described in the Prospectus
     or (y) that is not a corporation is a limited partnership, a limited
     liability company or a business trust, has been duly formed and is validly
     existing as a limited partnership, a limited liability company or a
     business trust, as the case may be, in good standing under the laws of the
     jurisdiction of its formation, and has full power and authority to own its
     property and to conduct its business as described in the Prospectus; and,
     in each case, is duly qualified to transact business and is in good
     standing in each jurisdiction in which the conduct of its business or its
     ownership or leasing of property requires such qualification, except to the
     extent that the failure to be so qualified or be in good standing would not
     have a material adverse effect on the condition (financial or other),
     business, properties or results of operations of the Parent, the Company
     and the Subsidiaries taken as a whole; and neither the Company nor the
     Parent is a general partner in any partnership;

                    (ii) Each of the Parent, the Company and the Subsidiaries
     possess adequate certificates, authorities, licenses or permits issued by
     appropriate governmental agencies or bodies necessary to conduct the
     business as now operated by them as described in the Prospectus and such
     counsel is not aware of the receipt of any notice of proceedings relating
     to the revocation or modification of any such certificate, authority,
     license or permit that, if determined adversely to the Company, the Parent
     or any of the Subsidiaries, would individually or in the aggregate have a
     material adverse effect on the condition (financial or other), business,
     properties or results of operations of the Company, the Parent and the
     Subsidiaries taken as a whole;

                    (iii) The contracts and agreements of the Company, the
     Parent and the Subsidiaries and affiliates incorporated by reference in the
     Prospectus (including in the Exchange Act Reports incorporated by reference
     in the Prospectus) under the captions "Recent Developments" and "Business -
     Description of Facilities" conform in all material respects to the
     descriptions thereof contained in the Prospectus (or such Exchange Act
     Reports), and the statements under the captions "Executive Officers,
     Directors and Key Employees", "Executive Compensation", "Business - Project
     Development", "Legal Proceedings" and "Business - Governmental Regulation",
     insofar as such statements constitute summaries of the legal matters,
     documents and governmental proceedings referred to therein are accurate in
     all material respects and fairly summarize and present the information
     referred to therein.

                    (iv) To such counsel's knowledge, each of the Company and
     the Parent (i) is in compliance with any and all applicable Environmental
     Laws, (ii) has received all permits, licenses or other approvals required
     of it under applicable Environmental Laws to conduct its business and (iii)
     is in compliance with all terms and conditions of any such permit, license
     or approval, except where such noncompliance with Environmental Laws,
     failure to receive required permits, licenses or other approvals or failure
     to comply with the terms and conditions of such permits, licenses or
     approvals would not, singly or in the aggregate, have a material adverse
     effect on the condition (financial or other), business, properties or
     results of operations of the Company and the Parent; and

                    (v)  To such counsel's knowledge, based on the conduct of
     each of the Company's and the Parent's business as described in the
     Prospectus, neither the Company, the Parent nor any of the Subsidiaries is
     (i) a "HOLDING COMPANY" or a "SUBSIDIARY" of a holding company or a "PUBLIC
     UTILITY COMPANY" under Section 2(a) of the Public Utility Holding Company
     Act of 1935

                                       14
<PAGE>   15





     ("PUHCA") (except that certain Subsidiaries that are EWGs (as defined
     herein) or QFs (as defined herein) and Cogeneration Corporation of America
     are subsidiaries of a holding company), (ii) subject to regulation under
     the Federal Power Act, as amended ("FPA"), other than as a power marketer
     or an "exempt wholesale generator" ("EWG") that is a "public utility" under
     the FPA or as a "qualifying facility" ("QF") under the Public Utility
     Regulatory Policies Act of 1978 ("PURPA") contemplated by 18
     C.F.R.ss.292.601(c) or (iii) with respect to each of the power generation
     projects in which the Company or its Subsidiaries has an interest that is
     "qualifying facility" under PURPA, subject to any state law or regulation
     with respect to rates or the financial or organizational regulation of
     electric utilities, other than as contemplated by 18 C.F.R.ss. 292.602(c).

     In giving such opinion, such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the State of New York, the
federal law of the United States and the corporate law of the State of Delaware,
upon opinions of other counsel, who shall be counsel reasonably satisfactory to
counsel for the Underwriters, in which case the opinion of such other counsel
shall also be addressed to the Underwriters.

          (g)  The Representative shall have received from Skadden, Arps, Slate,
Meagher & Flom LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the incorporation of the Parent, the
validity of the Securities and the Guarantees delivered on the Closing Date, the
Registration Statement, the Prospectus and other related matters as the
Representative may require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass upon
such matters.

          (h)  The Representative shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal financial
or accounting officer of each of the Company and the Parent in which such
officers, to the best of their knowledge after reasonable investigation, shall
state that: the respective representations and warranties of the Company or the
Parent, as applicable, in this Agreement are true and correct; the Company or
the Parent, as applicable, has complied with all agreements and satisfied all
respective conditions on their part to be performed or satisfied hereunder at or
prior to the Closing Date; no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; and, subsequent to the
date of the most recent financial statements in the Prospectus, there has been
no material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
properties or results of operations of the Parent, the Company and the
Subsidiaries taken as a whole except as set forth in or contemplated by the
Prospectus or as described in such certificate.

          (i)  The Representative shall have received a letter, dated such
Closing Date, of Arthur Andersen LLP which meets the requirements of subsection
(a) of this Section, except that the specified date referred to in such
subsection will be a date not more than three days prior to such Closing Date
for the purposes of this subsection.

     The  Company and the Parent will furnish the Representative with such
conformed copies of such opinions, certificates, letters and documents as the
Representative reasonably request. CSFBC may in its sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters under this Agreement.

     7.   Indemnification and Contribution. (a) The Company and the Parent will
jointly and severally indemnify and hold harmless each Underwriter, its
partners, directors and officers and each person,

                                       15
<PAGE>   16

if any, who controls such Underwriter within the meaning of Section 15 of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Securities Act
or the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company and the Parent will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company and the Parent by any Underwriter
through the Representative specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in subsection (b) below.


     (b)  Each Underwriter will severally and not jointly indemnify and hold
harmless the Company and the Parent and their respective directors and officers
and trustees and each person, if any who controls the Company or the Parent
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities to which the Company or the Parent may become
subject, under the Securities Act or the Exchange Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company and the
Parent by such Underwriter through the Representative specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company or the Parent in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of .

     (c)  Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In case any such action
is brought against any indemnified party and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened

                                       16

<PAGE>   17

action in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party unless
such settlement (i) includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such action and
(ii) does not include a statement as to, or an admission of, fault, culpability
or a failure to act by or on behalf of an indemnified party.

          (d)  If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Parent on the one hand and the Underwriters on the other
from the offering of the Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Parent on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Parent on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the Parent bear
to the total underwriting discounts and commissions received by the Underwriters
from the Company and the Parent under this Agreement. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the Parent or
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.

          (e)  The obligations of the Company and the Parent under this Section
shall be in addition to any liability which the Company and the Parent may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the
Securities Act or the Exchange Act; and the obligations of the Underwriters
under this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company or the Parent, to each officer of
the Company or the Parent who has signed a Registration Statement and to each
person, if any, who controls the Company or the Parent within the meaning of the
Securities Act or the Exchange Act.

     8.   Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Securities under this Agreement and the aggregate
principal amount of Securities that such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10% of the total principal amount
of Securities that the Underwriters are obligated to purchase on such Closing
Date, CSFBC

                                       17
<PAGE>   18

may make arrangements satisfactory to the Company and the Parent for the
purchase of such Securities by other persons, including any of the Underwriters,
but if no such arrangements are made by the Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments under this Agreement, to purchase the Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate principal amount of
Securities with respect to which such default or defaults occur exceeds 10% of
the total principal amount of Securities that the Underwriters are obligated to
purchase on the Closing Date and arrangements satisfactory to CSFBC, the Company
and the Parent for the purchase of such Securities by other persons are not made
within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company or the
Parent, except as provided in Section 9. As used in this Agreement, the term
"UNDERWRITER" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.

     9.   Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company, the Parent or their officers and of the several Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any Underwriter and the Company, the Parent or any of their
respective representatives, officers or directors or any controlling person, and
will survive delivery of and payment for the Securities. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the
Securities by the Underwriters is not consummated, the Company and the Parent
shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 5 and the respective obligations of the Company and the
Underwriters pursuant to Section 7 shall remain in effect. If the purchase of
the Securities by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(c),
the Company and the Parent will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Securities.

     10.  Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered, telegraphed and confirmed or
faxed and confirmed to the Representative, c/o Credit Suisse First Boston
Corporation, Eleven Madison Avenue, New York, New York 10010-3269, Attention:
Investment Banking Department-Transactions Advisory Group, or, if sent to the
Company or the Parent, will be mailed, delivered, telegraphed and confirmed or
faxed and confirmed to it at Calpine Corporation, 50 West San Fernando Street,
San Jose, California 95113, Attention: General Counsel; provided, however, that
any notice to an Underwriter pursuant to Section 7 will be mailed, delivered,
telegraphed and confirmed or faxed and confirmed to such Underwriter.

     11.  Successors. This Agreement will inure to the benefit of and be binding
upon the Company, the Parent and such Underwriters as are identified in this
Agreement and their respective successors and the officers and directors and
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder.

     12.  Representation of Underwriters. The Representative will act for the
several Underwriters in connection with the financing described in the this
Agreement, and any action taken by the Representative will be binding upon all
the Underwriters.

                                       18
<PAGE>   19



     13.  Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.

     14.  APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.

     The  Company and the Parent hereby submit to the non-exclusive jurisdiction
of the Federal and state courts in the Borough of Manhattan in The City of New
York in any suit or proceeding arising out of or relating to the Terms Agreement
(including the provisions of this Agreement) or the transactions contemplated
hereby.

     The  obligation of the Company in respect of any sum due to any Underwriter
shall, notwithstanding any judgment in a currency other than United States
dollars, not be discharged until the first business day following receipt by
such Underwriter of any sum adjudged to be so due in such other currency, on
which (and only to the extent that) such Underwriter may in accordance with
normal banking procedures purchase United States dollars with such other
currency; if the United States dollars so purchased are less than the sum
originally due to such Underwriter hereunder, the Company agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Underwriter
against such loss. If the United States dollars so purchased are greater than
the sum originally due to such Underwriter hereunder, such Underwriter agrees to
pay to the Company an amount equal to the excess of the dollars so purchased
over the sum originally due to such Underwriter hereunder.


                            [Signature page follows.]

                                       19
<PAGE>   20


     If the foregoing is in accordance with the Representative's understanding
of our agreement, kindly sign and return to each of the Company and the Parent
one of the counterparts hereof, whereupon it will become a binding agreement
between the Company, the Parent and the Underwriters in accordance with its
terms.

                                          Very truly yours,


                                          CALPINE CANADA ENERGY
                                          FINANCE ULC



                                          By:..................................
                                          Name:
                                          Title:


                                          CALPINE CORPORATION



                                          By:..................................
                                          Name:
                                          Title:

                                       20
<PAGE>   21

The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.


Acting on behalf of itself and as the Representative
of the several Underwriters

CREDIT SUISSE FIRST BOSTON CORPORATION



By:.....................................
Name:
Title:




                                       21

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>3
<FILENAME>f70590a1ex4-3.txt
<DESCRIPTION>EXHIBIT 4.3
<TEXT>

<PAGE>   1


                                                                     Exhibit 4.3









                        CALPINE CANADA ENERGY FINANCE ULC


                                       and


                        WILMINGTON TRUST COMPANY, Trustee





                                    Indenture

                         Dated as of [__________], 2001





                                 Debt Securities

                      Fully and Unconditionally Guaranteed
                             by Calpine Corporation
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                          PAGE
                                                                                                                          ----
<S>                                                                                                                      <C>
                                                           ARTICLE I
                                           DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.1              Definitions...................................................................................   1
SECTION 1.2              Other Definitions.............................................................................   6
SECTION 1.3              Incorporation by Reference of TIA.............................................................   6
SECTION 1.4              Rules of Construction.........................................................................   7

                                                           ARTICLE II
                                                         THE SECURITIES

SECTION 2.1              Securities Issuable in Series.................................................................   7
SECTION 2.2              Form and Dating...............................................................................   9
SECTION 2.3              Execution and Authentication..................................................................  10
SECTION 2.4              Registrar and Paying Agent....................................................................  11
SECTION 2.5              Paying Agent To Hold Money in Trust...........................................................  11
SECTION 2.6              Securityholder Lists..........................................................................  11
SECTION 2.7              Transfer and Exchange.........................................................................  12
SECTION 2.8              Replacement Securities........................................................................  13
SECTION 2.9              Outstanding Securities........................................................................  14
SECTION 2.10             Determination of Holders' Action..............................................................  14
SECTION 2.11             Temporary Securities..........................................................................  14
SECTION 2.12             Cancellation..................................................................................  15
SECTION 2.13             Defaulted Interest............................................................................  15
SECTION 2.14             Interest Act (Canada) ........................................................................  15

                                                          ARTICLE III
                                                           COVENANTS

SECTION 3.1              Payment of Securities.........................................................................  15
SECTION 3.2              Maintenance of Office or Agency...............................................................  16
SECTION 3.3              Limitation on Sale/Leaseback Transactions.....................................................  16
SECTION 3.4              Limitation on Liens...........................................................................  16
SECTION 3.5              Compliance Certificate........................................................................  16
SECTION 3.6              Further Instruments and Acts..................................................................  16
SECTION 3.7              Waiver of Certain Covenants...................................................................  16

                                                           ARTICLE IV
                                             CONSOLIDATION, MERGER, SALE AND LEASE

SECTION 4.1              Merger and Consolidation of Company...........................................................  16
SECTION 4.2              Successor Substituted.........................................................................  17
SECTION 4.3              Assignment by the Company to the Guarantor
                           or its Significant Subsidiaries.............................................................  17
</TABLE>


                                       i
<PAGE>   3
<TABLE>
<CAPTION>
                                                                                                                          PAGE
                                                                                                                          ----
<S>                                                                                                                      <C>
                                                           ARTICLE V
                                                     DEFAULTS AND REMEDIES

SECTION 5.1              Events of Default.............................................................................  18
SECTION 5.2              Acceleration..................................................................................  19
SECTION 5.3              Other Remedies................................................................................  20
SECTION 5.4              Waiver of Past Defaults.......................................................................  20
SECTION 5.5              Control by Majority...........................................................................  20
SECTION 5.6              Limitation on Suits...........................................................................  21
SECTION 5.7              Rights of Holders To Receive Payment..........................................................  21
SECTION 5.8              Collection Suit by Trustee....................................................................  21
SECTION 5.9              Trustee May File Proofs of Claim..............................................................  21
SECTION 5.10             Priorities....................................................................................  22
SECTION 5.11             Undertaking for Costs.........................................................................  22
SECTION 5.12             Waiver of Stay or Extension Laws..............................................................  22

                                                           ARTICLE VI
                                                            TRUSTEE

SECTION 6.1              Duties of Trustee.............................................................................  23
SECTION 6.2              Rights of Trustee.............................................................................  24
SECTION 6.3              Individual Rights of Trustee..................................................................  24
SECTION 6.4              Trustee's Disclaimer..........................................................................  25
SECTION 6.5              Notice of Defaults............................................................................  25
SECTION 6.6              Reports by Trustee to Holders.................................................................  25
SECTION 6.7              Compensation and Indemnity....................................................................  25
SECTION 6.8              Replacement of Trustee........................................................................  26
SECTION 6.9              Successor Trustee by Merger, etc..............................................................  28
SECTION 6.10             Eligibility; Disqualification; Conflicting Interests..........................................  28
SECTION 6.11             Preferential Collection of Claims Against Company.............................................  28

                                                          ARTICLE VII
                                            SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 7.1              Discharge of Liability on Securities..........................................................  28
SECTION 7.2              Termination of Company's Obligations..........................................................  28
SECTION 7.3              Defeasance and Discharge of Indenture.........................................................  29
SECTION 7.4              Defeasance of Certain Obligations.............................................................  31
SECTION 7.5              Application of Trust Money....................................................................  32
SECTION 7.6              Repayment to Company..........................................................................  33
SECTION 7.7              Reinstatement.................................................................................  33
SECTION 7.8              Deposited Money and U.S. Government Obligations to be Held in Trust:
                           Miscellaneous Provisions....................................................................  33

                                                          ARTICLE VIII
                                                    AMENDMENTS AND SUPPLEMENTS

SECTION 8.1              Without Consent of Holders....................................................................  34
SECTION 8.2              With Consent of Holders.......................................................................  34
</TABLE>


                                       ii
<PAGE>   4
<TABLE>
<CAPTION>
                                                                                                                          PAGE
                                                                                                                          ----
<S>                                                                                                                      <C>
SECTION 8.3              Compliance with Trust Indenture Act...........................................................  35
SECTION 8.4              Revocation and Effect of Consents.............................................................  35
SECTION 8.5              Notation on or Exchange of Securities.........................................................  35
SECTION 8.6              Trustee To Sign Amendments....................................................................  36
SECTION 8.7              Fixing of Record Dates........................................................................  36

                                                           ARTICLE IX
                                                           REDEMPTION

SECTION 9.1              Applicability of Article......................................................................  36
SECTION 9.2              Election to Redeem; Notice to Trustee.........................................................  36
SECTION 9.3              Selection by Trustee of Securities to be Redeemed.............................................  37
SECTION 9.4              Notice of Redemption..........................................................................  37
SECTION 9.5              Deposit of Redemption Price...................................................................  38
SECTION 9.6              Securities Redeemed in Part...................................................................  38

                                                           ARTICLE X
                                                         MISCELLANEOUS

SECTION 10.1             Trust Indenture Act Controls..................................................................  38
SECTION 10.2             Notices.......................................................................................  38
SECTION 10.3             Communication by Holders with Other Holders...................................................  39
SECTION 10.4             Certificate and Opinion as to Conditions Precedent............................................  39
SECTION 10.5             Statements Required in Certificate or Opinion.................................................  39
SECTION 10.6             Rules by Trustee and Agents...................................................................  40
SECTION 10.7             Legal Holidays................................................................................  40
SECTION 10.8             Successors; No Recourse Against Others........................................................  40
SECTION 10.9             Duplicate Originals...........................................................................  40
SECTION 10.10            Other Provisions..............................................................................  40
SECTION 10.11            Governing Law.................................................................................  40
SECTION 10.12            Jurisdiction..................................................................................  40
SECTION 10.13            Judgement Currency............................................................................  40
SIGNATURES
EXHIBIT A -- Form of Security.......................................................................................       A-1
</TABLE>


                                       iii
<PAGE>   5
    INDENTURE, dated as of [__________], 2001, between Calpine Canada Energy
Finance ULC, an unlimited liability company organized under the laws of Nova
Scotia, Canada (the "Company"), and Wilmington Trust Company, a Delaware banking
corporation (the "Trustee").

    WHEREAS, the Company desires to issue debt securities in one or more series
from time to time hereunder in an unlimited aggregate principal amount;

    WHEREAS, Calpine Corporation, the parent corporation of the Company, has
agreed to fully and unconditionally guarantee the debt securities issued by the
Company hereunder; and

    WHEREAS, the Trustee desires to act as Trustee with respect to such
securities;

    NOW, THEREFORE, each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the holders of such securities
or of series thereof:

                                    ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.1  Definitions.

    "Affiliate" of any specified Person means any other Person, directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any Person, means 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.

    "Agent" means, with respect to any Series of Securities, any Registrar,
Paying Agent, authenticating agent, co-registrar or additional paying agent
appointed pursuant to this Indenture with respect to such Series.

    "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 Securities outstanding hereunder (calculated, in the event of the
issuance of any original lease discount Securities, 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.

    "Board of Directors" means the Board of Directors of the Company or any
authorized committee thereof.

    "Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company 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 Trustee.

    "Business Day" means each day which is not a Legal Holiday.

    "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).


                                       1
<PAGE>   6
    "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.

    "Code" means the Internal Revenue Code of 1986, as amended.

    "Common Stock" means the Common Stock, par value $.001 per share, of the
Guarantor.

    "Company" means the party named as such in this Indenture until a successor
replaces it pursuant to the terms and conditions of this Indenture and
thereafter means the successor.

    "Consolidated Current Liabilities," as of the date of determination, means
the aggregate amount of consolidated liabilities of the Company 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 Company 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 Company, 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 Company 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 Company 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.

    "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.

    "Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.

    "Defaulted Interest" means any interest on any Security which is payable,
but is not punctually paid or duly provided for on any Interest Payment Date,
such Defaulted Interest to accrue (except as otherwise provided in accordance
with Section 2.1) at the same rate per annum as interest accrued or accreted, as
the case may be, on the Business Day immediately preceding such Interest Payment
Date.

    "Depository" means The Depository Trust Company, its nominees, and their
respective successors until a successor Depository shall have become such
pursuant to the applicable provisions of this Indenture and thereafter
"Depository" shall mean or include each Person who is then a Depository
hereunder.

    "Directors' Certificate" means a certificate signed by two members of the
Board of Directors.

    "Exchange Act" means the Securities Exchange Act of 1934, as amended.

    "GAAP" means generally accepted accounting principles in the United States
of America as in effect and, to the extent optional, adopted by the Company, on
the date of the Indenture, consistently applied.

    "Guarantee" means, as applied to any obligation, contingent or otherwise, of
any Person, (i) a guarantee, direct or indirect, in any manner, of any part or
all of such obligation (other than by endorsement of negotiable instruments for
collection in the ordinary course of business) and (ii) an agreement, direct or
indirect, contingent or otherwise, the practical effect of which is to insure in
any way the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation, including the payment of
amounts drawn down under letters of credit. With respect to the Guarantor,
"Guarantee" shall include the guarantee by the Guarantor of the Securities
pursuant to the Guarantee Agreement.

    "Guarantee Agreement" means the guarantee agreement made by the Guarantor
and accepted and agreed to by the Trustee, in substantially the form annexed
hereto as Exhibit [ ].

    "Guarantor" means Calpine Corporation, a Delaware corporation until a
successor replaces it pursuant to the terms and conditions of the Guarantee
Agreement and thereafter means the successor.

    "Holder" or "Securityholder" means the Person in whose name a Security is
registered on the Registrar's books.

    "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


                                       2
<PAGE>   7
"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 Securities, modify or
affect, in any manner adverse to the Holders, such subordination or (D) if the
Company 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 means, without duplication, (i) the principal
in respect of indebtedness of such Person for money borrowed and; (ii) all
Capitalized Lease Obligations of such Person; (iii) all obligations of such
Person for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction (other than obligations with respect to
letters of credit securing obligations (other than obligations described in (i)
and (ii) above) entered into in the ordinary course of business of such Person
to the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth Business Day
following receipt by such Person of a demand for reimbursement following payment
on the letter of credit); (iv) all obligations of the type referred to in
clauses (i) through (iii) of other Persons and all dividends of other Persons
for the payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise; and (v) all
obligations of the type referred to in clauses (i) through (iv) of other Persons
secured by any Lien on any property or asset of such Person (whether or not such
obligation is assumed by such Person), the amount of such obligation on any date
of determination being deemed to be the lesser of the value of such property or
assets or the amount of the obligation so secured. The amount of Indebtedness of
any Person at any date shall be, with respect to unconditional obligations, the
outstanding balance at such date of all such obligations as described above and,
with respect to any contingent obligations at such date, the maximum liability
determined by such Person's board of directors, in good faith, as, in light of
the facts and circumstances existing at the time, reasonably likely to be
Incurred upon the occurrence of the contingency giving rise to such obligation.

    "Indenture" means, with respect to each Series of Securities, this Indenture
as originally executed or as it is amended or supplemented from time to time by
one or more indentures supplemental hereto entered into in accordance with the
applicable provisions hereof, and shall include the terms of each particular
Series of Securities established as contemplated by Section 2.1.

    "Interest Payment Date" means, with respect to any Series, the stated
maturity of an installment of interest on the Securities of such Series.

    "Lien" means any mortgage, lien, pledge, charge, or other security interest
or encumbrance of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof).

    "Officer" means 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 Company or the Guarantor, as the case may be.


                                       3
<PAGE>   8
    "Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the President, the Treasurer or a Vice President. Each Officers'
Certificate (other than certificates provided pursuant to TIA Section 314(a)(4))
shall include the statements provided for in TIA Section 314(e), if applicable.

    "Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel, if so acceptable, may be an employee of
or counsel to the Company, the Guarantor or the Trustee. Each such Opinion of
Counsel shall include the statements provided for in TIA Section 314(e), if
applicable.

    "Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.

    "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.

    "Principal" of a Security means the principal of the Security plus, if
applicable, the premium on the Security due on the Stated Maturity or on a
Redemption Date.

    "Redemption Date" means, when used with respect to any Security of any
Series to be redeemed, the date fixed for such redemption by or pursuant to this
Indenture.

    "Redemption Price" means, when used with respect to any Security of any
Series to be redeemed, the price specified in such Security at which it is to be
redeemed pursuant to this Indenture.

    "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 Company including Indebtedness that
refinances Refinancing Indebtedness; provided, however, that (i) if the
Indebtedness being refinanced is contractually subordinated in right of payment
to the Securities, the Refinancing Indebtedness shall be contractually
subordinated in right of payment to the Securities 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 Securities, (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 Company that refinances Indebtedness of the Company or (y)
Indebtedness of the Company or a Restricted Subsidiary that refinances
Indebtedness of an Unrestricted Subsidiary.

    "Restricted Subsidiary" means any Subsidiary of the Company that is not
designated an Unrestricted Subsidiary by the Board of Directors.

    "Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby the Company 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 Company and a Wholly Owned
Subsidiary or between Wholly Owned Subsidiaries.

    "SEC" means the Securities and Exchange Commission.

    "Securities" means unsecured debentures, notes or other evidence of
indebtedness of the Company that are issued under and pursuant to the terms of
this Indenture.


                                       4
<PAGE>   9
    "Securities Act" means the Securities Act of 1933, as amended.

    "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.

    "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" means, as applied to any Person, any corporation, partnership,
trust, association or other business entity of which an aggregate of at least
50% of the outstanding Voting Shares or an equivalent controlling interest
therein, of such Person is, at the time, directly or indirectly, owned by such
Person and/or one or more Subsidiaries of such Person.

    "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date first above written.

    "Trustee" means the party named as such above until a successor replaces it
and thereafter means the successor, and if at any time there is more than one
such Person, "Trustee" as used with respect to the Securities of any Series
shall mean the Trustee with respect to the Securities of that Series.

    "Trust Officer" means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters or to whom any corporate trust matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.

    "Uniform Commercial Code" means the New York Uniform Commercial Code as in
effect from time to time.

    "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 below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, the Company or any other Subsidiary that is not a
Subsidiary of the Subsidiary to be so designated; provided, that the Subsidiary
to be so designated and all other Subsidiaries previously so designated at the
time of any determination hereunder shall, in the aggregate, have total assets
not greater than 5% of Consolidated Net Tangible Assets as determined based on
the Consolidated balance sheet of the Company as of the end of the most recent
fiscal quarter for which financial statements are available. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary of the Company; provided, however, that immediately after giving
effect to such designation no Default or Event of Default shall have occurred
and be continuing. Any such designation by the Board of Directors shall be
evidenced to the Trustee by promptly filing with the Trustee a Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provision; provided, however, that
the failure to so file such resolution and/or Officers' Certificate with the
Trustee shall not impair or affect the validity of such designation.

    "U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) are not callable or redeemable before the Stated Maturity
thereof.

    "Voting Shares," with respect to any corporation, means the Capital Stock
having the general voting power under ordinary circumstances to elect at least a
majority of the board of directors (irrespective of whether or not at the time
stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).


                                       5
<PAGE>   10
    "Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock of which
(other than directors' qualifying shares) is owned by the Company or another
Wholly Owned Subsidiary.

SECTION 1.2 Other Definitions.

<TABLE>
<CAPTION>
                TERM                                                                         DEFINED IN
                                                                                              SECTION
                ----                                                                          -------
<S>                                                                                          <C>
                "Additional Securities"................................................          2.1
                "Affiliate Assignee" ..................................................          4.3
                "Bankruptcy Law".......................................................          5.1
                "Custodian"............................................................          5.1
                "Event of Default".....................................................          5.1
                "Global Securities"....................................................          2.2
                "Legal Holiday"........................................................         10.7
                "Notice of Default"....................................................          5.1
                "Paying Agent".........................................................          2.4
                "Registrar"............................................................          2.4
                "Series"...............................................................          2.1
                "Successor Corporation"................................................          4.1(i)
</TABLE>

SECTION 1.3 Incorporation by Reference of TIA.

    Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.

    The following TIA terms used in this Indenture have the following meanings:

        "Commission" means the SEC;

        "indenture securities" means the Securities;

        "indenture security holder" means a Holder or Securityholder;

        "indenture to be qualified" means this Indenture;

        "indenture trustee" or "institutional trustee" means the Trustee; and


                                       6
<PAGE>   11
        "obligor" on the indenture securities means the Company or any other
obligor on the indenture securities.

    All other terms used in this Indenture that are defined by the TIA, defined
 by TIA reference to another statute or defined by SEC rule under the TIA have
 the meanings assigned to them by the TIA.

SECTION 1.4 Rules of Construction.

    Unless the context otherwise requires:

         (a) a term has the meaning assigned to it;

         (b) "generally accepted accounting principles" means, and any
         accounting term not otherwise defined has the meaning assigned to it
         and shall be construed in accordance with, GAAP;

         (c) "or" is not exclusive;

         (d) words in the singular include the plural, and in the plural include
         the singular;

         (e) provisions apply to successive events and transactions;

         (f) "including" means "including, without limitation";

         (g) unsecured debt shall not be deemed to be subordinate or junior to
         secured debt merely by virtue of its nature as unsecured debt;

         (h) the principal amount of any non-interest bearing or other discount
         Security at any date shall be the principal amount thereof that would
         be shown on a balance sheet of the Company dated such date prepared in
         accordance with generally accepted accounting principles; and

         (i) the principal amount (if any) of any Preferred Stock shall be the
         greatest of (i) the stated value, (ii) the redemption price or (iii)
         the liquidation preference of such Preferred Stock.

                                   ARTICLE II

                                 THE SECURITIES

SECTION 2.1 Securities Issuable in Series.

    Securities may be issued hereunder in one or more series, the Securities of
each series (a "Series") having identical terms but for authentication date and
public offering price. Securities of any one Series need not be issued at the
same time and, unless specifically provided otherwise, a Series may be reopened,
without the consent of the Holders, for issuances of additional Securities of
such Series. All Securities shall be fully and unconditionally guaranteed by the
Guarantor pursuant to the Guarantee Agreement.

    Securities issued hereunder shall be issued pursuant to authority granted by
or pursuant to a Board Resolution and, prior to the issue hereunder of the first
Securities of a Series, the Company shall set forth in a Directors' Certificate,
or establish in one or more indentures supplemental hereto, the following terms
which shall be applicable to such Series:


                                       7
<PAGE>   12
        (1) the title, including CUSIP number, of the Series (which shall
    distinguish the Securities of such Series from all other Securities);

        (2) any limit upon the aggregate principal amount of the Securities of
    such Series which may be authenticated and delivered under this Agreement
    (except for Securities authenticated and delivered upon registration of
    transfer of, or in exchange for, or for replacement of, or in lieu of, other
    Securities of the Series pursuant to Sections 2.7, 2.8, 2.11, 8.5 or 9.6);

        (3) the date or dates on which the principal of the Securities of the
    Series are payable;

        (4) the rate or rates, or the method of determination thereof, at which
    the Securities of the Series shall bear interest, if any, the date or dates
    from which such interest shall accrue, the Interest Payment Dates on which
    such interest shall be payable and the record dates for the determination of
    Holders to whom interest is payable;

        (5) the place or places where the principal of, and interest on
    Securities of the Series shall be payable;

        (6) the obligation, if any, of the Company to redeem, purchase or repay
    the Securities of such Series pursuant to any right to do so contained in
    the Securities or pursuant to sinking fund or analogous provisions or at the
    option of a Holder thereof and the price or prices at which and the period
    or periods within which and the terms and conditions upon which the
    Securities of such Series shall be redeemed, purchased or repaid, in whole
    or in part, pursuant to such obligation;

        (7) the denominations in which the Securities of such Series shall be
    issuable, if other than integral multiples of $1,000;

        (8) if other than the principal amount thereof, the portion of the
    principal amount of the Securities of such Series which shall be payable
    upon the declaration of acceleration of the maturity thereof pursuant to
    Section 5.2;

        (9) any Events of Default or covenants with respect to the Securities of
    such Series, if not set forth in this Indenture;

        (10) if other than those named herein, any other depositaries,
    authenticating or paying agents, transfer agents or registrars or any other
    agents with respect to such Series;

        (11) the stock exchanges, if any, on which the Securities will be listed
    and related information;

        (12) any applicable restrictions on the transfer of any of the
    Securities of such Series;

        (13) if other than the currency of the United States of America, the
    currency, currencies or currency units in which the principal of or
    interest, if any, on any Securities of the Series shall be payable and the
    manner of determining the equivalent thereof in the currencies of the United
    States of America for any purpose;

        (14) if applicable, the terms of any right to convert Securities of the
    Series into, or to exchange Securities of the Series for, shares of Common
    Stock or other securities or property;


                                       8
<PAGE>   13
        (15) whether the Securities of the Series are subject to defeasance or
    covenant defeasance under Section 7.3 or 7.4, or such other means of
    satisfaction and discharge as may be specified for a Series in addition to
    or in lieu of the provisions of Section 7.1 or 7.2;

        (16) whether the Securities of the Series shall be issued in whole or in
    part in the form of one or more Global Securities, the Depository for the
    Series, if other than The Depository Trust Company or its successors, and
    any circumstances in addition to or in lieu of those set forth in Section
    2.7 in which any Global Security may be exchanged in whole or in part for
    Securities registered, and any transfer of such Global Security in whole or
    in part may be registered, in the name or names of Persons other than the
    Depository for such Global Security or a nominee thereof; and

        (17) any other terms of the Series (which terms shall not be
    inconsistent with the provisions of this Indenture).

    All Securities of any one Series shall be substantially identical except as
to denomination, except as provided in the first paragraph of this Section 2.1
and except as may otherwise be provided in or pursuant to such Directors'
Certificate.

    Additional Securities of the same Series may be issued subsequent to the
original issue date of any Securities of such Series (hereinafter called
"Additional Securities") following the receipt of the Trustee of a Directors'
Certificate pertaining to such Additional Securities, which Directors'
Certificate will identify the Series to which such Additional Securities belongs
and the issue date and aggregate principal amount of the Securities of such
Additional Securities. Any such Additional Securities shall be issued on
original issue as provided in Section 2.3.

    Additional Securities, together with each prior and subsequent Securities of
the same Series, shall constitute one and the same Series of Securities for all
purposes under this Indenture.

SECTION 2.2 Form and Dating.

    The Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A annexed hereto, which is part of this
Indenture, with such appropriate insertions, omissions and other variations as
are required or permitted by this Indenture, and may have such legends or
endorsements placed thereon as the Officers executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Security shall be dated the date of its authentication and shall
have endorsed thereon the guarantee of the Guarantor substantially in the form
set forth in Exhibit A, executed by the Guarantor in accordance with the
Guarantee Agreement.

    The terms and provisions contained in the form of Securities annexed hereto
as Exhibit A shall constitute, and are expressly made, a part of this Indenture.
To the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.

    Securities issued in the form of one or more permanent global Securities in
registered form, substantially in the form as above recited (the "Global
Securities"), shall be deposited with or on behalf of the Trustee, as custodian
for the Depository, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. Each Global Security shall bear such legend as
may be required or reasonably requested by the Depository.

    The definitive Securities shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on


                                       9
<PAGE>   14
which the Securities may be listed, all as determined by the officers executing
such Securities, as evidenced by their execution of such Securities.

SECTION 2.3 Execution and Authentication.

    Two Officers shall sign the Securities for the Company by manual or
facsimile signature.

    If an Officer whose signature is on a Security no longer holds that office
at the time the Security is authenticated, the Security shall nevertheless be
valid.

    A Security shall not be valid until authenticated by the manual signature of
an authorized officer of the Trustee. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.

    The Trustee shall authenticate Securities upon a written order of the
Company signed by two Officers. Such order shall specify the Series and the
amount of the Securities to be authenticated and the date on which such
Securities are to be authenticated. The aggregate principal amount of Securities
outstanding at any time is unlimited. In authenticating such Securities and in
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive and shall be fully
protected in relying upon, an Opinion of Counsel stating,

        (1) that the form or forms of such Securities have been established in
    conformity with the provisions of this Indenture;

        (2) that the terms of such Securities have been established in
    conformity with the provisions of this Indenture; and

        (3) that such Securities, when authenticated and delivered by the
    Trustee and issued by the Company in the manner and subject to any
    conditions specified in such Opinion of Counsel, and the guarantee of the
    Guarantor endorsed thereon will constitute valid and legally binding
    obligations of the Company or the Guarantor, as the case may be, enforceable
    in accordance with their terms, subject to bankruptcy, insolvency,
    fraudulent transfer, reorganization, moratorium and similar laws of general
    applicability relating to or affecting creditors' rights and to general
    equity principles.

    The Trustee shall initially act as authenticating agent and may subsequently
appoint another Person acceptable to the Company as authenticating agent to
authenticate Securities. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company. Provided that the
authentication agent has entered into an agreement with the Company concerning
the authentication agent's duties, the Trustee shall not be liable for any act
or any failure of the authenticating agent to perform any duty either required
herein or authorized herein to be performed by such Person in accordance with
this Indenture.

    The Trustee shall have the right to decline to authenticate and deliver any
Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in good
faith shall determine that such action would expose the Trustee to personal
liability to existing Holders or would affect the Trustee's own rights, duties
or immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.


                                       10
<PAGE>   15
    The Securities shall be issued only in registered form without coupons and
shall be dated the date of their authentication.

SECTION 2.4 Registrar and Paying Agent.

    The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Securities and the guarantee of the Guarantor endorsed
thereon may be presented for payment ("Paying Agent"). The Registrar shall keep
a register of the Securities and of their transfer and exchange. The Company may
appoint one or more co-registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent and the term
"Registrar" includes any co-registrar.

    The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall promptly notify the Trustee of the name and address of
any such agent and any change in the address of such agent. If the Company fails
to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall
be entitled to appropriate compensation therefor pursuant to Section 6.7. The
Company or any Subsidiary or Affiliate of the Company may act as Paying Agent,
Registrar, co-registrar or transfer agent.

    The Company initially appoints the Trustee as Registrar and Paying Agent in
connection with the Securities.

SECTION 2.5  Paying Agent To Hold Money in Trust.

    On or prior to 11:00 a.m., New York City time, on each due date of the
principal and interest on any Security, the Company shall deposit with the
Paying Agent a sum of money denominated in the currency of such payment, in
immediately available funds, sufficient to pay such principal and interest in
funds available when such becomes due. The Company shall require each Paying
Agent (other than the Trustee) to agree in writing that the Paying Agent shall
hold in trust for the benefit of Securityholders or the Trustee all money held
by the Paying Agent for the payment of principal of or interest on the
Securities (whether such money has been paid to it by the Company or any other
obligor on the Securities) and shall notify the Trustee of any default by the
Company (or any other obligor on the Securities) in making any such payment. If
the Company or a Subsidiary or an Affiliate of the Company acts as Paying Agent,
it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund for the benefit of the Securityholders. If the Company
defaults in its obligation to deposit funds for the payment of principal and
interest the Trustee may, during the continuation of such default, require a
Paying Agent to pay all money held by it to the Trustee. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed by it. Upon doing so, the Paying Agent (other
than the Company or a Subsidiary or Affiliate of the Company) shall have no
further liability for the money delivered to the Trustee.

SECTION 2.6 Securityholder Lists.

    The Trustee shall preserve in as current a form as reasonably practicable
the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least five Business Days before each Interest Payment Date and
at such other times as the Trustee may request in writing a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of the Securityholders, and the Company shall otherwise comply with
TIA Section 312(a).


                                       11
<PAGE>   16
SECTION 2.7 Transfer and Exchange.

    The Securities shall be transferable only upon the surrender of a Security
to the Registrar for registration of transfer. When a Security is presented to
the Registrar or a co-registrar with a request to register a transfer, the
Registrar shall register the transfer as requested if the requirements of
Section 8-401(a) of the Uniform Commercial Code are met (and the Registrar shall
be entitled to assume such requirements have been met unless it receives written
notice to the contrary) and, if so required by the Trustee or the Company, if
the Security presented is accompanied by a written instrument of transfer in
form satisfactory to the Trustee and the Company, duly executed by the
registered owner or by his or her attorney duly authorized in writing, in which
case, the Registrar shall deliver one or more new Securities of the same Series,
of any authorized denominations and of a like aggregate principal amount. When
Securities are presented to the Registrar or a co-registrar with a request to
exchange them for an equal principal amount of Securities of the same Series and
of other authorized denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's or co-registrar's request. The Depository shall,
by acceptance of a Global Security, agree that transfers of beneficial interests
in such Global Security may be effected only through a book-entry system
maintained by the Depository (or its agent), and that ownership of a beneficial
interest in the Global Security shall be required to be reflected in a book
entry.

    No service charge shall be made for any registration of transfer or exchange
of the Securities, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange pursuant to Section 2.11, 8.5 or 9.6).

    Prior to the due presentation for registration of transfer of any Security,
the Company, the Guarantor, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest (subject to the record date provisions
thereof) on such Security and for all other purposes whatsoever, whether or not
such Security is overdue, and none of the Company, the Guarantor, the Trustee,
the Paying Agent, the Registrar or any co-registrar shall be affected by notice
to the contrary.

    Notwithstanding any other provisions of this Section 2.7, unless and until
it is exchanged in whole or in part for Securities of any Series in definitive
registered form, a Global Security representing all or a portion of the
Securities of a Series may not be transferred except as a whole by the
Depository to a nominee of such Depository or by a nominee of such Depository to
such Depository or another nominee of such Depository or by such Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository.

    If the Depository notifies the Company that it is unwilling or unable to
continue as Depository for the Global Securities of any Series or if at any time
the Depository shall no longer be eligible under the next sentence of this
paragraph, the Company shall appoint a successor Depository with respect to such
Securities. Each Depository appointed pursuant to this Section 2.7 must, at the
time of its appointment and at all times while it serves as Depository, be a
clearing agency registered under the Exchange Act and any other applicable
statute or regulation. The Company will execute, and the Trustee will
authenticate and deliver upon a written order of the Company signed by two
Officers, Securities in definitive registered form in any authorized
denominations representing Securities of a Series in exchange for such Global
Security or Securities of such Series if (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for the Global
Securities of such Series or if at any time the Depository shall no longer be
eligible to serve as Depository and a


                                       12
<PAGE>   17
successor Depository for the Securities of such Series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such ineligibility or (ii) an Event of Default with respect to the Securities
of such Series has occurred and is continuing.

    The Company may at any time and in its sole discretion determine that the
Securities of a Series shall no longer be represented by a Global Security or
Securities. In such event the Company will execute, and the Trustee will
authenticate and deliver upon a written order of the Company signed by two
Officers, Securities of such Series in definitive registered form in any
authorized denominations representing such Securities in exchange for such
Global Security or Securities.

    Upon the exchange of a Global Security for Securities in definitive
registered form without coupons, in authorized denominations, such Global
Security shall be cancelled by the Trustee. Securities in definitive registered
form issued in exchange for a Global Security pursuant to this Section 2.7 shall
be registered in such names and in such authorized denominations as the
Depository for such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Securities to or as directed by the Persons in whose names
such Securities are so registered.

    No holder of a beneficial interest in any Global Security held on its behalf
by a Depository shall have any rights under this Indenture with respect to such
Global Security, and such Depository may be treated by the Company, the
Guarantor, the Trustee, and any agent of the Company, the Guarantor, or the
Trustee as the owner of such Global Security for all purposes whatsoever. None
of the Company, the Guarantor, the Trustee or any agent of the Company, the
Guarantor, or the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Guarantor, the Trustee or any agent of the Company, the Guarantor, or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by a Depository or impair, as between a Depository and
such holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depository (or its nominee) as
Holder of any Security.

    The Company shall not be required (A) to issue, register the transfer of or
exchange any Securities of a Series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption under Section 9.3 and ending at the
close of business on the day of such mailing or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.

    All Securities issued upon any transfer or exchange pursuant to the terms of
this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.

SECTION 2.8 Replacement Securities.

    If a mutilated Security is surrendered to the Registrar or if the Holder of
a Security claims that the Security has been lost, destroyed or wrongfully taken
and the Holder furnishes to the Company and the Trustee evidence to their
satisfaction of such loss, destruction or wrongful taking, the Company shall
issue and the Trustee shall, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser,
authenticate a replacement Security of the same Series if the requirements of
Section 8-405 of the Uniform Commercial Code are met (and the Registrar shall be
entitled to assume such requirements have been


                                       13
<PAGE>   18
met unless it receives written notice to the contrary) and if there is delivered
to the Company and the Trustee such security or indemnity as may be required to
save each of them harmless, satisfactory to the Company and the Trustee. The
Company and the Trustee may charge the Holder for their expenses in replacing a
Security.

    In case any such mutilated, lost, destroyed or wrongfully taken Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

    Every replacement Security of each Series is an additional obligation of the
Company and shall be entitled to the benefits of this Indenture.

    The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, lost, destroyed or wrongfully taken Securities.

SECTION 2.9 Outstanding Securities.

    The Securities of each Series outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, and those described in this Section as not outstanding.

    If a Security is replaced or paid pursuant to Section 2.8, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced or paid Security is held by a bona fide purchaser.

    If all the principal and interest on any Securities of any Series are
considered paid under Section 3.1, the Securities of such Series cease to be
outstanding under this Indenture and interest on the Securities of such Series
shall cease to accrue.

    If the Paying Agent (other than the Company or a Subsidiary or an Affiliate
of the Company) holds in accordance with this Indenture on a maturity or
redemption date money sufficient to pay all principal and interest due on that
date with respect to Securities of any Series then on and after that date such
Securities cease to be outstanding and interest on them ceases to accrue (unless
there shall be a default in such payment).

    Subject to Section 2.10, a Security does not cease to be outstanding because
the Company or an Affiliate thereof holds the Security.

SECTION 2.10 Determination of Holders' Action.

    In determining whether the Holders of the required principal amount of any
Series of Securities have concurred in any direction, amendment, waiver or
consent, Securities owned by or pledged to the Company, any other obligor upon
the Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned or pledged shall be so disregarded.

SECTION 2.11 Temporary Securities.

    Until definitive Securities of any Series are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities of
such Series. Temporary Securities shall be substantially in the form of


                                       14
<PAGE>   19
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee, upon the written order of the Company signed by
two Officers, shall authenticate definitive Securities in exchange for temporary
Securities. Until such exchange, temporary Securities of any Series shall be
entitled to the same rights, benefits and privileges as definitive Securities of
such Series.

SECTION 2.12  Cancellation.

    The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment or cancellation and shall deliver to the Company a
certificate of cancellation. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation.

SECTION 2.13 Defaulted Interest.

    If the Company defaults in a payment of interest on the Securities of any
Series, it shall pay Defaulted Interest, plus any interest payable on the
Defaulted Interest to the extent permitted by law, in any lawful manner. It may
pay the Defaulted Interest to the Persons who are Securityholders on a
subsequent special record date which date shall be at least five Business Days
prior to the payment date. The Company shall fix the special record date and
payment date. At least 15 days before the special record date, the Company (or
the Trustee, in the name of and at the expense of the Company) shall mail to
Securityholders a notice that states the special record date, payment date and
amount of interest to be paid.

SECTION 2.14  Interest Act (Canada).

    For the purposes only of the disclosure required by the Interest Act
(Canada), and without affecting the amount of interest payable to any Holder or
the calculation of interest on any Securities, if any rate of interest on any
Securities is calculated on the basis of a deemed year which contains fewer days
than the actual number of days in the calendar year of calculation, such rate of
interest shall be expressed as a yearly rate for the purposes of the Interest
Act (Canada) by multiplying such rate of interest by the actual number of days
in the calendar year of calculation and dividing it by the number of days in
such deemed year.

                                   ARTICLE III

                                    COVENANTS

SECTION 3.1 Payment of Securities.

    The Company shall pay the principal of, and interest on the Securities of
each Series on the dates and in the manner provided in such Securities. The
Company shall pay interest on overdue principal at the rate borne by or provided
for in such Securities; it shall pay interest on overdue installments of
interest at the rate borne by or provided for in such Securities to the extent
lawful. Principal and interest shall be considered paid on the date due if the
Trustee or the Paying Agent (other than the Company or a Subsidiary or an
Affiliate of the Company) has received from or on behalf of the Company money
sufficient to pay all principal and interest then due in accordance with Section
2.5.


                                       15
<PAGE>   20
SECTION 3.2 Maintenance of Office or Agency.

    The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency where Securities may be surrendered for registration
of transfer or exchange and where Securities and the guarantee of the Guarantor
endorsed thereon may be presented for payment and where notices and demands to
or upon the Company in respect of the Securities and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 10.2. The Company initially appoints the Trustee as its agency
for the foregoing purposes in the Borough of Manhattan, the City of New York.

    The Company may also from time to time designate one or more other offices
or agencies where the Securities and such guarantee may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, the City of New York, for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

SECTION 3.3 Limitation on Sale/Leaseback Transactions.

    The Company shall not, and shall not permit any Restricted Subsidiary to,
enter into any Sale/Leaseback Transaction unless (i) the Company or such
Restricted Subsidiary would be entitled to create a Lien on such property
securing Indebtedness in an amount equal to the Attributable Debt with respect
to such transaction without equally and ratably securing the Securities pursuant
to Section 3.4 or (ii) the net proceeds of such sale are at least equal to the
fair value (as determined by the Board of Directors) of such property or asset
and the Company or such Restricted Subsidiary shall apply or cause to be applied
an amount in cash equal to the net proceeds of such sale to the retirement,
within 180 days of the effective date of any such arrangement, of Indebtedness
of the Company or any Restricted Subsidiary; provided, however, that in addition
to the transactions permitted pursuant to the foregoing clauses (i) and (ii),
the Company or any Restricted Subsidiary may enter into a Sale/Leaseback
Transaction as long as the sum of (x) the Attributable Debt with respect to such
Sale/Leaseback Transaction and all other Sale/Leaseback Transactions entered
into pursuant to this proviso plus (y) the amount of outstanding Indebtedness
secured by Liens Incurred pursuant to the final proviso to Section 3.4 does not
exceed 15% of Consolidated Net Tangible Assets as determined based on the
consolidated balance sheet of the Company as of the end of the most recent
fiscal quarter for which financial statements are available; and provided,
further, that a Restricted Subsidiary may enter into a Sale/Leaseback
Transaction with respect to property or assets owned by such Restricted
Subsidiary, the proceeds of which are used to explore, drill, develop,
construct, purchase, repair, improve or add to property or assets of any
Restricted Subsidiary, or to repay (within 365 days of the commencement of full
commercial operation of any such property) Indebtedness Incurred to explore,
drill, develop, construct, purchase, repair, improve or add to property or
assets of any Restricted Subsidiary.

SECTION 3.4 Limitation on Liens.

    The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, incur any Lien on any of its properties or assets
(including Capital Stock), whether owned at the date of issuance of any series
of Securities pursuant to this Indenture or thereafter acquired, in each case to
secure Indebtedness of the Company or any Restricted Subsidiary, other than
(a)(1) Liens incurred by the Company or any Restricted Subsidiary securing
Indebtedness Incurred by the Company or such Restricted Subsidiary, as the case
may be, to finance the exploration, drilling, development, construction or
purchase of or by, or repairs, improvements or additions to, property or assets
of the Company or such Restricted Subsidiary, as the case may be, which Liens
may include Liens on the Capital Stock of such Restricted Subsidiary or (2)
Liens incurred by any Restricted Subsidiary that does not own, directly or
indirectly, at the time of such original incurrence of such Lien under this
clause (2) any operating properties or assets, securing Indebtedness Incurred to
finance the exploration, drilling, development, construction or purchase of or
by, or repairs, improvements or additions to, property or assets of any
Restricted Subsidiary that does not, directly or indirectly, own any operating
properties or assets at the time of such original incurrence of such Lien, which
Liens may include Liens on the Capital Stock of one or more Restricted
Subsidiaries that do not, directly or indirectly, own any operating properties
or assets at the time of such original incurrence of such Lien, provided,
however, that the Indebtedness secured by any such Lien may not be issued more
than 365 days after the later of the exploration, drilling, development,
completion of construction, purchase, repair, improvement, addition or
commencement of full commercial operation of the property or assets being so
financed; (b) Liens existing on the date of the issuance of such series of
Securities (other than Liens relating to Indebtedness or other obligations being
repaid or Liens that are otherwise extinguished with the proceeds of any
offering of Securities pursuant to this Indenture); (c) Liens on property,
assets or shares of stock of a Person at the time such Person becomes a
Subsidiary; provided, however, that any such Lien may not extend to any other
property or assets owned by the Company or any Restricted Subsidiary; (d) Liens
on property or assets at the time the Company or a Subsidiary acquires the
property or asset, including any acquisition by means of a merger or
consolidation with or into the Company or a Subsidiary; provided, however, that
such Liens are not incurred in connection with, or in contemplation of, such
merger or consolidation; and provided, further, that the Lien may not extend to
any other property or asset owned by the Company or any Restricted Subsidiary;
(e) Liens securing Indebtedness or other obligations of a Subsidiary owing to
the Company or a Restricted Subsidiary or of the Company owing to a Subsidiary;
(f) Liens incurred on assets that are the subject of a Capitalized Lease
Obligation to which the Company or a Subsidiary is a party, which shall include,
Liens on the stock or other ownership interest in one or more Restricted
Subsidiaries leasing such assets; (g) Liens to secure any refinancing,
refunding, extension, renewal or replacement (or successive refinancings,
refundings, extensions, renewals or replacements) as a whole, or in part, of any
Indebtedness secured by any Lien referred to in the foregoing clauses (a), (b),
(c), (d) and (f), provided, however, that (x) such new Lien shall be limited to
all or part of the same property or assets that secured the original Lien (plus
repairs, improvements or additions to such property or assets and Liens on the
stock or other ownership interest in one or more Restricted Subsidiaries
beneficially owning such property or assets) and (y) the amount of the
Indebtedness secured by such Lien at such time (or, if the amount that may be
realized in respect of such Lien is limited, by contract or otherwise, such
limited lesser amount) is not increased (other than by an amount necessary to
pay fees and expenses, including premiums, related to the refinancing,
refunding, extension, renewal or replacement of such Indebtedness); and (h)
Liens by which the Securities are secured equally and ratably with other
Indebtedness pursuant to this Section 3.4; in any such case without effectively
providing that the Securities shall be secured equally and ratably with (or
prior to) the obligations so secured for so long as such obligations are so
secured; provided, however, that the Company or a Restricted Subsidiary may
Incur other Liens to secure outstanding Indebtedness as long as the sum of (x)
the lesser of (A) the amount of outstanding Indebtedness secured by Liens
Incurred pursuant to this proviso (or, if the amount that may be realized in
respect of such Lien is limited, by contract or otherwise, such limited lesser
amount) and (B) the fair value (as determined by the Board of Directors) of the
property securing such item of Indebtedness, plus (y) the Attributable Debt with
respect to all Sale/Leaseback Transactions entered into pursuant to the first
proviso to Section 3.3 does not exceed 15% of Consolidated Net Tangible Assets
as determined based on the Consolidated balance sheet of the Company as of the
end of the most recent fiscal quarter for which financial statements are
available.

SECTION 3.5 Compliance Certificate.

    The Company shall, within 120 days after the close of each fiscal year in
which Securities are outstanding hereunder, file with the Trustee an Officer's
Certificate, provided that one Officer executing the same shall be the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company, covering the period from the date of issuance of
Securities hereunder to the end of the fiscal year in which the Securities were
first issued hereunder, in the case of the first such certificate, and covering
the preceding fiscal year in the case of each subsequent certificate, and
stating whether or not, to the knowledge of each such executing Officer, the
Company has complied with and performed and fulfilled all covenants on its part
contained in this Indenture and is not in Default in the performance or
observance of any of the terms or provisions contained in this Indenture, and,
if any such signer has obtained knowledge of any Default by the Company in the
performance, observance or fulfillment of any such covenant, term or provision
specifying each such Default and the nature thereof. For the purpose of this
Section 3.5, compliance shall be determined without regard to any grace period
or requirement of notice provided pursuant to the terms of this Indenture.

SECTION 3.6 Further Instruments and Acts.

    The Company (upon the reasonable request of the Trustee) will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to enable the Trustee to exercise and enforce its rights
under this Indenture and to carry out more effectively the purpose of this
Indenture.

SECTION 3.7 Waiver of Certain Covenants.

    The Company may omit in any particular instance to comply with any covenant
or condition set forth in Sections 3.3 to 3.4, inclusive, with respect to any
Series of Securities or any covenant established with respect to such Series
pursuant to Section 2.1(9), if before or after the time for such compliance the
Holders of at least 50% in principal amount of the Securities of such Series at
the time outstanding, shall either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect.


                                   ARTICLE IV

                      CONSOLIDATION, MERGER, SALE AND LEASE

SECTION 4.1 Merger and Consolidation of Company.

    The Company shall not in a single transaction or through a series of related
transactions consolidate with or merge or amalgamate with or into any other
corporation or sell, assign, convey, transfer or lease or otherwise dispose of
all or substantially all of its properties and assets to any Person or group of
affiliated Persons, unless:


                                       16
<PAGE>   21
        (i) either (A) the Company shall be the continuing Person, or (B) the
    Person (if other than the Company) formed by such consolidation or into
    which the Company is merged or amalgamated or to which the properties and
    assets of the Company are sold, assigned, conveyed, transferred, disposed of
    or leased as aforesaid (the "Successor Corporation") shall be a corporation
    organized and existing under the laws of the United States or any State
    thereof or the District of Columbia or under the laws of Canada or any
    province or territory thereof and shall expressly assume, by an indenture
    supplemental hereto, executed and delivered to the Trustee, in form
    reasonably satisfactory to the Trustee, all the obligations of the Company
    under this Indenture and each Series of Securities;

        (ii) immediately after giving effect to such transaction, no Default
    shall have occurred and be continuing;

        (iii) the Company shall have delivered, or caused to be delivered, to
    the Trustee an Officers' Certificate and, as to legal matters, an Opinion of
    Counsel, each in form reasonably satisfactory to the Trustee, each stating
    that such consolidation, merger, amalgamation, sale, assignment, conveyance,
    transfer, disposition or lease and such supplemental indenture comply with
    this Indenture and that all conditions precedent herein provided for
    relating to such transaction have been complied with;

    Notwithstanding the foregoing paragraph (ii), the Company or any Wholly
Owned Subsidiary or Wholly Owned Subsidiaries may consolidate with or merge or
amalgamate with or into the Company or any Wholly Owned Subsidiary and no
violation of this Section shall be deemed to have occurred as a consequence
thereof, as long as the requirements of paragraphs (i) and (iii) are satisfied
in connection therewith.

SECTION 4.2 Successor Substituted.

    (a) Upon any such consolidation, merger or amalgamation, or any sale,
assignment, conveyance, transfer, disposition or lease of all or substantially
all of the properties or assets of the Company in accordance with Section 4.1,
the Successor Corporation shall succeed to and be substituted for the Company
under this Indenture and each Series of Securities, and the Company shall
(except in the case of a lease) thereupon be released from all obligations
hereunder and under each Series of Securities and the Company, as the
predecessor corporation, may thereupon or at any time thereafter be dissolved,
wound up or liquidated.

    (b) In the case of any consolidation, merger or sale, assignment,
conveyance, transfer, disposition or lease described in Section 4.2(a) above,
such changes in form (but not in substance) may be made in the Securities
thereafter to be issued as may be appropriate.

SECTION 4.3 Assignment by the Company to the Guarantor or its Significant
Subsidiaries.

       (a) The Company may assign its obligations under any series of Securities
    to the Guarantor or any Significant Subsidiary of the Guarantor (the
    "Affiliate Assignee") and such Affiliate Assignee shall be treated as the
    successor to the Company with respect to such series of Securities; provided
    that: (i) the Affiliate Assignee expressly assumes in an assumption
    agreement or supplemental indenture hereto, executed and delivered to the
    Trustee, the due and punctual payment of the principal of and any premium
    and interest on such Securities and the performance or observance of every
    covenant of this Indenture on the part of the Company to be performed or
    observed with respect to such Series; (ii) immediately after giving effect
    to such assignment and assumption, no Event of Default with respect to such
    Series and no event with respect to such Series, which after notice or lapse
    of time or both, would become an Event of Default, shall have occurred and
    be continuing; (iii) the Affiliate Assignee shall deliver to the Trustee an
    opinion of an independent counsel or a tax consultant of recognized standing
    that the Holders will not recognize income, gain or loss for United States
    federal income tax purposes as a result of such assignment and assumption;


                                       17
<PAGE>   22
    and (iv) the Affiliate Assignee shall have delivered to the Trustee an
    Officers' Certificate and an Opinion of Counsel stating that such assignment
    and assumption and such assumption agreement comply with this Article and
    that all conditions precedent herein provided for relating to such
    assignment and assumption have been complied with.

       (b) Upon any assignment and assumption of Securities pursuant to Section
    4.3(a) above, the Affiliate Assignee shall succeed to, and be substituted
    for, and may exercise every right and power of, the Company under such
    Securities and this Indenture with respect to such Series with the same
    effect as if the Affiliate Assignee has been named as the Company herein,
    and the Company shall be released from its liability as obligor upon such
    Securities and under this Indenture with respect to such Securities and, if
    the Affiliate Assignee is the Guarantor and the Guarantor has assumed the
    obligations of the Company under an outstanding series of Securities and the
    Indenture with respect to such Securities in accordance with (a) above, all
    outstanding Guarantees of such series of Securities shall automatically
    terminate and be discharged.

                                    ARTICLE V

                              DEFAULTS AND REMEDIES

SECTION 5.1 Events of Default.

    An "Event of Default" means, with respect to any Series of Securities, any
of the following events:

        (a) default in the payment of interest on any Security of such Series
when the same becomes due and payable, and such default continues for a period
of 30 days;

        (b) default in the payment of the principal of any Security of such
Series when the same becomes due and payable at maturity or otherwise;

        (c) material default in performance of any other covenants or agreements
of the Company in the Securities of such Series or this Indenture or of the
Guarantor in the Guarantee Agreement with respect to such Series and the default
continues for 30 days after the date on which written notice of such default is
given to the Company or the Guarantor, as the case may be, by the Trustee or to
the Company or the Guarantor, as the case may be, and the Trustee by Holders of
at least 25% in principal amount of the Securities of such Series then
outstanding hereunder;

        (d) there shall have occurred either (i) a default by either of the
Company or the Guarantor under any instrument or instruments under which there
is or may be secured or evidenced any Indebtedness of the Company or the
Guarantor, as applicable (other than the Securities of such Series) having an
outstanding principal amount of $50,000,000 (or its foreign currency equivalent)
or more individually or in the aggregate that has caused the holders thereof to
declare such Indebtedness to be due and payable prior to its Stated Maturity,
unless such declaration has been rescinded within 30 days or (ii) a default by
either of the Company or the Guarantor in the payment when due of any portion of
the principal under any such instrument or instruments, and such unpaid portion
exceeds $50,000,000 (or its foreign currency equivalent) individually or in the
aggregate and is not paid, or such default is not cured or waived, within any
grace period applicable thereto, unless such Indebtedness is discharged within
30 days of the Company or the Guarantor, as applicable becoming aware of such
default;

        (e) the Guarantee shall be held in a judicial proceeding to be
unenforceable or ceases for any reason to be in full force and effect (other
than in accordance with the terms hereof or of the Guarantee) or the Guarantor
or denies or disaffirms in writing its obligations under the Guarantee with
respect to such Series.


                                       18
<PAGE>   23
        (f) the Company or the Guarantor or any Significant Subsidiary pursuant
to or within the meaning of any Bankruptcy Law:

           (i) commences a voluntary case;

           (ii) consents to the entry of an order for relief against it in an
    involuntary case;

           (iii) consents to the appointment of a Custodian of it or for all or
    substantially all of its property;

           (iv) makes a general assignment for the benefit of its creditors; or

           (v) admits in writing its inability to generally pay its debts as
    such debts become due;

        or takes any comparable action under any foreign laws relating to
    insolvency; or

        (g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:

           (i) is for relief against the Company or the Guarantor or any
    Significant Subsidiary in an involuntary case;

           (ii) appoints a Custodian of the Company or the Guarantor or any
    Significant Subsidiary or for all or substantially all of its property; or

           (iii) orders the winding up or liquidation of the Company or the
    Guarantor or any Significant Subsidiary;

        or any similar relief is granted under any foreign laws; and the order
    or decree remains unstayed and in effect for 60 days.

    The term "Bankruptcy Law" means Title 11 of the United States Code or any
similar Federal or State law or Canadian federal, provincial or territorial law
for the relief of debtors. The term "Custodian" means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.

    Any notice of Default given by the Trustee or Securityholders under this
Section must specify the Default, demand that it be remedied and state that the
notice is a "Notice of Default."

    The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice of any event which with the giving of notice
or the lapse of time or both would become an Event of Default under clause (d),
(e), (f) or (g) hereof.

    Subject to the provisions of Section 6.1 and 6.2, the Trustee shall not be
deemed to have notice or be charged with knowledge of any Default or Event of
Default unless written notice thereof shall have been given to the Trustee in
accordance with Section 10.2 by the Company, the Paying Agent, any Holder or an
agent of any Holder and such notice references the Securities and this
Indenture.

SECTION 5.2  Acceleration.

    If an Event of Default (other than an Event of Default specified in clause
(f) and (g) of Section 5.1 with respect to the Company) occurs and is continuing
with respect to the Securities of any Series, the Trustee by


                                       19
<PAGE>   24
notice to the Company, or the Holders of at least 25% in principal amount of the
Securities of such Series by notice to the Company and the Trustee, may declare
the principal of and accrued and unpaid interest on all the Securities of such
Series to be due and payable. Upon such declaration the principal and interest
shall be due and payable immediately. If an Event of Default specified in clause
(f) or (g) of Section 5.1 with respect to the Company occurs, the principal of
and interest on all the Securities of each Series shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholders. An acceleration and its consequences in
respect of a Series of Securities shall be automatically annulled and rescinded;
provided, however, that such annulment and rescission would not conflict with
any judgment or decree and if all existing Events of Default with respect to
such Series have been cured or waived except nonpayment of principal or interest
that has become due solely because of the acceleration. No such rescission shall
affect any subsequent or other Default or Event of Default or impair any
consequent right.

SECTION 5.3 Other Remedies.

    If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal or interest on the relevant
Securities or to enforce the performance of any provision of such Securities,
this Indenture or the Guarantee Agreement.

    The Trustee may maintain a proceeding even if it does not possess any of the
Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

SECTION 5.4 Waiver of Past Defaults.

    The Holders of a majority in principal amount of a Series of Securities by
notice to the Trustee may waive an existing Default and its consequences with
respect to such Series, except (a) a Default in the payment of the principal of
or interest on any Security of such Series or (b) a Default in respect of a
provision that under Section 8.2 cannot be amended without the consent of each
affected Securityholder of such Series. When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any consequent right.

SECTION 5.5 Control by Majority.

    The Holders of a majority in principal amount of the Securities of a Series
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on it
with respect to the Securities or Guarantee of such Series. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture or
the Guarantee Agreement, or, subject to Section 6.1, that the Trustee determines
is unduly prejudicial to the rights of other Securityholders, or would involve
the Trustee in personal liability; provided, however, that the Trustee may take
any other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification from Securityholders of such Series reasonably satisfactory
to it against all risk, losses and expenses caused by taking or not taking such
action. Subject to Section 6.1, the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of the Securityholders pursuant to this Indenture, unless
such Securityholders shall have provided to the Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities which
might be incurred in compliance with such request or direction.


                                       20
<PAGE>   25
SECTION 5.6 Limitation on Suits.

    A Securityholder of a Series may pursue a remedy with respect to this
Indenture, the Guarantee Agreement or the Securities of such Series only if:

        (a) the Holder gives to the Trustee written notice of a continuing Event
    of Default with respect to that Series;

        (b) the Holders of at least 25% in principal amount of the Securities of
    such Series make a written request to the Trustee to pursue the remedy;

        (c) such Holder or Holders offer to the Trustee security or indemnity
    reasonably satisfactory to it against any loss, liability or expense;

        (d) the Trustee does not comply with the request within 60 days after
    receipt of the notice, request and the offer of security or indemnity; and

        (e) the Holders of a majority in principal amount of the Securities of
    such Series do not give the Trustee a direction inconsistent with the
    request during such 60-day period.

    A Securityholder may not use this Indenture or the Guarantee Agreement to
prejudice the rights of another Securityholder or to obtain a preference or
priority over another Securityholder.

SECTION 5.7  Rights of Holders To Receive Payment.

    Notwithstanding any other provision of this Indenture or the Guarantee
Agreement, the right of any Holder of a Security to receive payment of principal
and interest on the Security, on or after the respective due dates expressed or
provided for in the Security, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of the Holder.

SECTION 5.8 Collection Suit by Trustee.

    If an Event of Default specified in Section 5.1(a) or (b) occurs and is
continuing with respect to a Security, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Company, the Guarantor
or any other obligor on such Security for the whole amount of principal and
interest remaining unpaid (together with interest on such unpaid interest to the
extent lawful) and the amounts provided for in Section 6.7.

SECTION 5.9  Trustee May File Proofs of Claim.

    The Trustee may file such proofs of claim and other papers or documents and
take such other actions including participating as a member or otherwise in any
committees of creditors appointed in the matter as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the amounts
provided in Section 6.7) and the Securityholders allowed in any judicial
proceedings relative to the Company, the Guarantor or the creditors or the
property of the Company or the Guarantor and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders of each Series in any
election of a trustee in bankruptcy or other Person performing similar
functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of


                                       21
<PAGE>   26
such payments directly to the Holders, to pay to the Trustee any amount due it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee under
Section 6.7. To the extent that the payment of any such amount due to the
Trustee under Section 6.7 out of the estate in any such proceeding shall be
denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties which the Holders of the Securities may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise.

    No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities,
the Guarantee or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.

SECTION 5.10  Priorities.

    If the Trustee collects any money or other consideration pursuant to this
Article, it shall pay out the money or other consideration in the following
order:

        First: to the Trustee for amounts due under Section 6.7;

        Second: to Securityholders for amounts due and unpaid on the Securities
    of the relevant Series for principal and interest, ratably, without
    preference or priority of any kind, according to the amounts due and payable
    on the Securities of such Series for principal and interest, respectively;
    and

        Third: to the Company.

    The Trustee may fix a record date and payment date for any payment to
Securityholders of such Series pursuant to this Section. At least 15 days before
such record date, the Company shall give written notice to each Securityholder
of such Series and the Trustee of the record date, the payment date and amount
to be paid.

SECTION 5.11 Undertaking for Costs.

    In any suit for the enforcement of any right or remedy under this Indenture
or the Guarantee Agreement or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 5.7, or a suit by Holders of more than 10% in
principal amount of the Securities of any Series.

SECTION 5.12 Waiver of Stay or Extension Laws.

    The Company shall not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company hereby expressly
waives all benefit or advantage of any such law, and shall not hinder, delay or
impede the execution of any power


                                       22
<PAGE>   27
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.

                                   ARTICLE VI

                                     TRUSTEE

SECTION 6.1 Duties of Trustee.

    (a) If an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and the
Guarantee Agreement, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.

    (b) Except during the continuance of an Event of Default:

        (i) The Trustee need perform only those duties that are specifically set
    forth in this Indenture or the Guarantee Agreement and no others and no
    implied covenants or obligations shall be read into this Indenture or the
    Guarantee Agreement against the Trustee.

        (ii) In the absence of bad faith on its part, the Trustee may
    conclusively rely, as to the truth of the statements and the correctness of
    the opinions expressed therein, upon certificates or opinions furnished to
    the Trustee and conforming to the requirements of this Indenture or the
    Guarantee Agreement. However, the Trustee shall examine the certificates and
    opinions to determine whether or not they conform to the requirements of
    this Indenture or the Guarantee Agreement, as the case may be (but need not
    confirm or investigate the accuracy of mathematical calculations or other
    facts stated therein).

    (c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:

        (i) This paragraph does not limit the effect of paragraph (b) of this
    Section.

        (ii) The Trustee shall not be liable for any error of judgment made in
    good faith by a Trust Officer, unless it is proved that the Trustee was
    negligent in ascertaining the pertinent facts.

        (iii) The Trustee shall not be liable with respect to any action it
    takes or omits to take in good faith in accordance with a direction received
    by it pursuant to Section 5.2, 5.4 or 5.5.

        (iv) No provision of this Indenture or the Guarantee Agreement shall
    require the Trustee to expend or risk its own funds or otherwise incur any
    financial liability in the performance of any of its duties hereunder, or in
    the exercise of any of its rights or powers, unless it receives indemnity
    satisfactory to it against any risk, loss, liability or expense.

    (d) Every provision of this Indenture that in any way relates to the Trustee
is subject to paragraphs (a), (b) and (c) of this Section.

    (e) The Trustee, in its capacity as Trustee and Registrar and Paying Agent,
shall not be liable to the Company, the Guarantor, the Securityholders or any
other Person for interest on any money received by it, including, but not


                                       23
<PAGE>   28
limited to, money with respect to principal of or interest on the Securities of
any Series, except as the Trustee may agree with the Company.

    (f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.

SECTION 6.2 Rights of Trustee.

    (a) The Trustee may rely on any document reasonably believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.

    (b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate, an Opinion of Counsel or both covering such matters as it
shall reasonably determine. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on any such Officers'
Certificate or Opinion of Counsel.

    (c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.

    (d) The Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or powers
provided, however, that the Trustee's conduct does not constitute willful
misconduct, negligence or bad faith.

    (e) The Trustee may consult with counsel of its selection, and the advice or
opinion of such counsel as to matters of law shall be full and complete
authorization and protection from liability in respect of any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice of such counsel.

    (f) The Trustee shall not be obligated to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
any other paper or document.

    (g) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture or the Guarantee Agreement at the
request or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee security or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.

    (h) The rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder.

SECTION 6.3 Individual Rights of Trustee.

    The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Guarantor or
an Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 6.10 and 6.11.


                                       24
<PAGE>   29
SECTION 6.4 Trustee's Disclaimer.

    The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Securities of any Series, it
shall not be accountable for the Company's use of the proceeds from the
Securities of any Series, and it shall not be responsible for any recital or
statement in this Indenture or the Securities of any Series other than its
authentication. The Trustee shall have no duty to ascertain or inquire as to the
performance of the Company's covenants in Article III hereof.

SECTION 6.5 Notice of Defaults.

    If a Default or an Event of Default occurs and is continuing and if it is
actually known to a Trust Officer of the Trustee, the Trustee shall mail to
Securityholders of the affected Series a notice of the Default or Event of
Default within 90 days after a Trust Officer of the Trustee has actual knowledge
of the occurrence thereof. Except in the case of a Default in any payment on any
Security, the Trustee may withhold the notice if and so long as a committee of
its Trust Officers in good faith determines that withholding the notice is in
the interests of Securityholders of the affected Series.

SECTION 6.6 Reports by Trustee to Holders.

    Within 60 days after the reporting date stated in Section 10.10, the Trustee
shall mail to Securityholders a brief report dated as of such date that complies
with TIA Section 313(a) if required by that Section. The Trustee also shall
comply with TIA Section 313(b)(2).

    A copy of each report at the time of its mailing to Securityholders shall be
filed with the SEC and each stock exchange on which Securities are listed. The
Company shall promptly notify the Trustee when Securities are listed on any
stock exchange and of any delisting thereof.

SECTION 6.7 Compensation and Indemnity.

    The Company shall pay to the Trustee from time to time such compensation for
its services as the parties shall agree. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable out-of-pocket
disbursements, expenses and advances incurred by it. Such expenses shall include
the reasonable compensation and out-of-pocket disbursements and expenses of the
Trustee's agents, counsel and other professionals.

    The Company shall indemnify the Trustee for, and hold it harmless against,
any loss, liability or expense, including reasonable attorneys' fees,
disbursements and expenses, incurred by it arising out of or in connection with
the administration of this trust and the performance of its duties hereunder
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.

    The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through negligence or bad faith.


                                       25
<PAGE>   30
    To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities of any Series.

    Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services after an
Event of Default specified in Section 5.1(f) or (g) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

    The Company's obligations under this Section 6.7 and any Lien arising
hereunder shall survive the resignation or removal of the Trustee, the discharge
of the Company's obligations pursuant to Article VII of this Indenture and the
termination of this Indenture.

SECTION 6.8 Replacement of Trustee.

    A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.

    The Trustee may resign at any time with respect to any Series of Securities
by so notifying the Company in writing. Provided that no Event of Default has
occurred and is continuing, the Company may remove the Trustee with respect to
any Series of Securities at any time by so notifying the Trustee of such Series
of Securities. The Holders of a majority in principal amount of the Securities
of any Series may, by written notice to the Trustee, remove the Trustee as
Trustee with respect to that Series of Securities by so notifying the Trustee
and the Company. The Company, by notice to such Trustee, shall remove such
Trustee if:

        (a) such Trustee fails to comply with Section 6.10;

        (b) such Trustee is adjudged a bankrupt or an insolvent;

        (c) a receiver or public officer takes charge of such Trustee or its
    property; or

        (d) such Trustee becomes incapable of acting.

    If the Trustee resigns or is removed or becomes incapable of acting or if a
vacancy exists in the office of Trustee for any reason with respect to one or
more Series of Securities, the Company by Board Resolution shall promptly
appoint a successor Trustee or Trustees with respect to such Series of
Securities (it being understood that any such successor Trustee may be appointed
with respect to one or more or all Series of Securities and at any time there
shall be only one Trustee with respect to any particular Series of Securities).
Within one year after the successor Trustee of a Series of Securities takes
office, the Holders of a majority in principal amount of such Securities of the
affected Series may appoint a successor Trustee of such Series to replace the
successor Trustee of such Series appointed by the Company.

    If a successor Trustee for a particular Series of Securities does not take
office within 60 days after the retiring Trustee of such Series resigns or is
removed, the retiring Trustee of such Series, the Company or the Holders of at
least 10% in principal amount of the Securities of the affected Series may
petition any court of competent jurisdiction for the appointment of a successor
Trustee for such Series.


                                       26
<PAGE>   31
    If the Trustee for a particular Series of Securities fails to comply with
Section 6.10, any Securityholder who has been a bonafide Holder of a Security
for at least six months may petition any court of competent jurisdiction for the
removal of the Trustee of such Series and the appointment of a successor Trustee
of such Series. The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any Series and each
appointment of a successor Trustee with respect to the Securities of any Series
by mailing written notice of such event by first-class mail, postage prepaid, to
all Holders of Securities of such Series as their names and addresses appear in
the Security Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such Series and the address of its
corporate trust office.

    A successor Trustee of all Securities shall execute, acknowledge and deliver
a written acceptance of its appointment to the retiring Trustee and to the
Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and such successor Trustee shall have all the rights, powers
and duties of the retiring Trustee under this Indenture. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, subject to the Lien provided for in Section 6.7.

    In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) Series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
Series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers and duties of the
retiring Trustee with respect to the Securities of that or those Series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers
and duties of the retiring Trustee with respect to the Securities of that or
those Series as to which the retiring Trustee is not retiring shall continue to
be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental Indenture shall
constitute such Trustee's co-trustees of the same trust and that each such
Trustee shall be trustee of a trust of trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further action, shall
become vested with all the rights, powers and duties of the retiring Trustee
with respect to the Securities of that or those Series to which the appointment
of such successor Trustee relates; but, on request of the Company or any
successor Trustee, such retiring Trustee shall transfer to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those Series to which the appointment of
such successor Trustee relates, subject to the Lien provided for in Section 6.7.

    Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the two
preceding paragraphs, as the case may be.

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


                                       27
<PAGE>   32
SECTION 6.9 Successor Trustee by Merger, etc.

    If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.

SECTION 6.10  Eligibility; Disqualification; Conflicting Interests.

    This Indenture shall always have a Trustee who satisfies the requirements of
TIA Section 310(a)(1) and (10). The Trustee shall always have a combined capital
and surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA Section 310(b).
Nothing herein shall prevent the Trustee from filing with the SEC the
application referred to in the second-to-last paragraph of TIA Section 310(b).
If the Trustee has or shall acquire any conflicting interest, with respect to
the Securities of a Series, it shall within 90 days after ascertaining that it
has such conflicting interest, either eliminate such conflicting interest or
resign with respect to the Securities of that Series in the manner prescribed in
the TIA. The Trustee shall not be deemed to have a conflicting interest under
the TIA by virtue of being a trustee under the Indenture dated as of August 10,
2000 between the Guarantor and the Trustee.

SECTION 6.11  Preferential Collection of Claims Against Company.

    The Trustee shall comply with TIA Section 311(a), except with respect to any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed is subject to TIA Section 311(a) to the extent indicated.

                                   ARTICLE VII

                     SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 7.1 Discharge of Liability on Securities.

    If (i) the Company delivers to the Trustee all outstanding Securities of a
Series (other than Securities replaced or paid pursuant to Section 2.8 or
Securities for whose payment money has theretofore been deposited in trust by
the Company with the Trustee or a Paying Agent and thereafter repaid to the
Company as provided in the second sentence of Section 7.6) for cancellation or
(ii) all outstanding Securities of such Series have become due and payable and
the Company irrevocably deposits with the Trustee as trust funds solely for the
benefit of the Holders for that purpose funds sufficient to pay at maturity or
on redemption the principal of and all accrued interest on all outstanding
Securities of such Series (other than Securities replaced or paid pursuant to
Section 2.8 or Securities for whose payment money has heretofore been deposited
in trust by the Company with the Trustee or Paying Agent and thereafter repaid
to the Company as provided in the second sentence of Section 7.6), and if in
either case the Company pays all other sums payable hereunder by the Company
with respect to such Series, then, subject to Sections 7.2 and 7.7, this
Indenture shall cease to be of further effect with respect to such Series. The
Trustee shall acknowledge satisfaction and discharge of this Indenture with
respect to such Series on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company.

SECTION 7.2 Termination of Company's Obligations.

    Except as otherwise provided in this Section 7.2, the Company may terminate
its obligations under the Securities of a Series and this Indenture with respect
to such Series if:


                                       28
<PAGE>   33
        (i) the Securities of such Series mature or are redeemable within one
    year, (ii) the Company irrevocably deposits in trust with the Trustee or
    Paying Agent (other than the Company or a Subsidiary or Affiliate of the
    Company) under the terms of an irrevocable trust agreement in form
    satisfactory to the Trustee, as trust funds solely for the benefit of the
    Holders of such Series for that purpose, money or U.S. Government
    Obligations that, through the payment of interest and principal in respect
    thereof in accordance with its terms, will provide, not later than one
    Business Day prior to the applicable payment date, money sufficient (in the
    opinion of a nationally recognized firm of independent public accountants
    expressed in a written certification thereof delivered to the Trustee),
    without consideration of any reinvestment of interest, to pay principal and
    interest on the Securities of such Series to maturity or redemption, and to
    pay all other sums payable by it hereunder, (iii) no Default with respect to
    such Series shall have occurred and be continuing on the date of such
    deposit, (iv) such deposit will not result in or constitute a Default or
    result in a breach or violation of, or constitute a default under, any other
    agreement or instrument to which the Company is a party or by which it is
    bound and (v) the Company has delivered to the Trustee an Officers'
    Certificate and an Opinion of Counsel, in each case stating that all
    conditions precedent provided for herein relating to the satisfaction and
    discharge of this Indenture with respect to such Series have been complied
    with; provided, however, that the Trustee or Paying Agent shall have been
    irrevocably instructed to apply such money or the proceeds of such U.S.
    Government Obligations to the payment of such principal and interest with
    respect to the Securities and if the Securities of the Series are to be
    redeemed, either the Securities have been called for redemption or are to be
    called for redemption within one year under arrangements satisfactory to the
    Trustee for the giving of the notice of redemption by the Trustee in the
    name, and at the expense, of the Company.

    With respect to the foregoing, the Company's obligations in Sections 2.2,
2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.12, 3.1, 3.2, 6.7, 6.8, 7.5, 7.6 and 7.7 shall
survive until the Securities of such Series are no longer outstanding.
Thereafter, only the Company's obligations in Sections 6.7, 6.8, 7.6 and 7.7
shall survive. After any such irrevocable deposit and fulfillment of the other
requirements of this Section 7.2, the Trustee upon request shall acknowledge in
writing the discharge of the Company's obligations under the Securities of such
Series and this Indenture with respect to such Series except for those surviving
obligations specified above.

SECTION 7.3 Defeasance and Discharge of Indenture.

    If so provided with respect to a Series of Securities in accordance with
Section 2.1, the Company will be deemed to have paid and will be discharged from
any and all obligations in respect of such Series on the 123rd day after the
date of the deposit referred to in clause (i) hereof, and the provisions of this
Indenture will no longer be in effect with respect to such Series, in each case
subject to the penultimate paragraph of this Section 7.3, and the Trustee, at
the reasonable request of and at the expense of the Company, shall execute
proper instruments acknowledging the same, except as to (a) rights of
registration of transfer and exchange, (b) substitution of apparently mutilated,
defaced, destroyed, lost or stolen Securities of such Series, (c) rights of
Holders of such Series to receive payments of principal thereof and interest
thereon, (d) the Company's obligations under Section 3.2, (e) the rights,
obligations and immunities of the Trustee hereunder including, without
limitation, those arising under Section 6.7 hereof, (f) the rights of the
Holders of such Series as beneficiaries of this Indenture with respect to the
property so deposited with the Trustee payable to all or any of them and (g) the
rights, obligations and immunities which survive as provided in the penultimate
paragraph of this Section 7.3; provided, however, that the following conditions
shall have been satisfied:

        (i) with reference to this Section 7.3, the Company has irrevocably
    deposited or caused to be irrevocably deposited with the Trustee or Paying
    Agent (other than the Company or a Subsidiary or Affiliate of the Company)
    and conveyed all right, title and interest for the benefit of the Holders of
    such Series, under the


                                       29
<PAGE>   34
    terms of an irrevocable trust agreement in form satisfactory to the Trustee
    as trust funds in trust, specifically pledged as security for, and dedicated
    solely to, the benefit of such Holders, in and to, (A) money in an amount,
    (B) U.S. Government Obligations that, through the payment of interest and
    principal in respect thereof in accordance with their terms, will provide,
    not later than one Business Day before the due date of any payment referred
    to in this clause (i), money in an amount or (C) a combination thereof in an
    amount sufficient, in the opinion of a nationally recognized firm of
    independent public accountants expressed in a written certification thereof
    delivered to the Trustee, to pay and discharge, without consideration of any
    reinvestment of interest and after payment of all federal, state and local
    taxes or other fees, charges and assessments in respect thereof payable by
    the Trustee or Paying Agent, the principal of and interest on the
    outstanding Securities of such Series when due; provided, however, that the
    Trustee or Paying Agent shall have been irrevocably instructed to apply such
    money or the proceeds of such U.S. Government Obligations to the payment of
    such principal and interest with respect to such Series;

        (ii) such deposit will not result in or constitute a Default or result
    in a breach or violation of, or constitute a default under, any other
    agreement or instrument to which the Company is a party or by which it is
    bound;

        (iii) no Default with respect to such Series shall have occurred and be
    continuing on the date of such deposit or during the period ending on the
    123rd day after such date of deposit;

        (iv) the Company shall have delivered to the Trustee (A) either (1) a
    ruling directed to the Trustee received from the Internal Revenue Service to
    the effect that the Holders will not recognize income, gain or loss for U.S.
    federal income tax purposes as a result of the Company's exercise of its
    option under this Section 7.3 and will be subject to U.S. federal income tax
    on the same amount and in the same manner and at the same times as would
    have been the case if such option had not been exercised or (2) an Opinion
    of Counsel (who may not be an employee of the Company) to the same effect as
    the ruling described in clause (1) accompanied by a ruling to that effect
    published by the Internal Revenue Service, unless there has been a change in
    the applicable U.S. federal income tax law since the date of this Indenture
    such that a ruling from the Internal Revenue Service is no longer required,
    (B) an Opinion of Counsel (who may not be an employee of the Company)
    stating that Holders of the Securities will not recognize income, gain or
    loss for Canadian income tax purposes as a result of the Company's exercise
    of its options under this Section 7.3 and will be subject to Canadian income
    tax on the same amount and in the same manner and at the same times as would
    have been the case if such option had not been exercised, and (C) an Opinion
    of Counsel to the effect that (1) the creation of the defeasance trust does
    not violate the Investment Company Act of 1940, (2) after the passage of 183
    days following the deposit (except, with respect to any trust funds for the
    account of any Holder of such Series who may be deemed to be an "insider"
    for purposes of Title 11 of the United States Code, after one year following
    the deposit), the trust funds will not be subject to the effect of Section
    547 of the United States Bankruptcy Code or Section 15 of the New York
    Debtor and Creditor Law in a case commenced by or against the Company under
    either such statute, and either (x) the trust funds will no longer remain
    the property of the Company (and therefore, will not be subject to the
    effect of any applicable bankruptcy, insolvency, reorganization or similar
    laws affecting creditors' rights generally) or (y) if a court were to rule
    under any such law in any case or proceeding that the trust funds remained
    property of the Company, (I) assuming such trust funds remained in the
    possession of the Trustee prior to such court ruling to the extent not paid
    to Holders of such Series, the Trustee will hold, for the benefit of such
    Holders, a valid and perfected security interest in such trust funds that is
    not avoidable in bankruptcy or otherwise except for the effect of Section
    552(b) of the United States Bankruptcy Code on interest on the trust funds
    accruing after the commencement of a case under such statute and (II) such
    Holders will be


                                       30
<PAGE>   35
    entitled to receive adequate protection of their interests in such trust
    funds if such trust funds are used in such case or proceeding; and

        (v) the Company has delivered to the Trustee an Officers' Certificate
    and an Opinion of Counsel, in each case stating that all conditions
    precedent provided for herein relating to the defeasance contemplated by
    this Section 7.3 have been complied with.

    Notwithstanding the foregoing clause (i), prior to the end of the 123-day
period referred to in clause (iv)(B)(2) above, none of the Company's obligations
under this Indenture with respect to such Series shall be discharged. Subsequent
to the end of such 123-day period with respect to this Section 7.3, the
Company's obligations in Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.12, 3.1,
3.2, 6.7, 6.8, 7.6 and 7.7 shall survive with respect to such Series until the
Series is no longer outstanding. Thereafter, only the Company's obligations in
Sections 6.7, 7.6 and 7.7 shall survive with respect to such Series. If and when
a ruling from the Internal Revenue Service or Opinion of Counsel referred to in
clause (iv)(A) above and an Opinion of Counsel referred to in clause (iv)(B)
above are able to be provided specifically without regard to, and not in
reliance upon, the continuance of the Company's obligations under Section 3.1,
then the Company's obligations under such Section 3.1 with respect to such
Series shall cease upon delivery to the Trustee of such ruling or Opinion of
Counsel and compliance with the other conditions precedent provided for herein
relating to the defeasance contemplated by this Section 7.3.

    After any such irrevocable deposit and the fulfillment of the other
requirements of this Section 7.3, the Trustee upon request shall acknowledge in
writing the discharge of the Company's obligations under the Securities of such
Series and this Indenture with respect to such Series except for those surviving
obligations in the immediately preceding paragraph.

    Before or after a deposit pursuant to this Section, the Company may make
arrangements satisfactory to the Trustee for the redemption of Securities at a
future date in accordance with Article IX.

SECTION 7.4 Defeasance of Certain Obligations.

    If so provided with respect to a Series of Securities in accordance with
Section 2.1, the Company may omit to comply with any term, provision or
condition set forth in Sections 3.3 and 3.4 or any covenant established with
respect to such Series pursuant to Section 2.1(9), and clause (c) of Section 5.1
with respect to Sections 3.3 and 3.4 or any such covenant, and clause (d) of
Section 5.1 shall be deemed not to be an Event of Default, in each case with
respect to the outstanding Securities of such Series, if:

        (i) with reference to this Section 7.4, the Company has irrevocably
    deposited or caused to be irrevocably deposited with the Trustee or Paying
    Agent (other than the Company or a Subsidiary or Affiliate of the Company)
    and conveyed all right, title and interest for the benefit of the Holders of
    such Series, under the terms of an irrevocable trust agreement in form
    satisfactory to the Trustee as trust funds in trust, specifically pledged as
    security for, and dedicated solely to, the benefit of the Holders of such
    Series, in and to, (A) money in an amount, (B) U.S. Government Obligations
    that, through the payment of interest and principal in respect thereof in
    accordance with their terms, will provide, not later than one Business Day
    before the due date of any payment referred to in this clause (i), money in
    an amount or (C) a combination thereof in an amount, sufficient, in the
    opinion of a nationally recognized firm of independent public accountants
    expressed in a written certification thereof delivered to the Trustee, to
    pay and discharge, without consideration of the reinvestment of such
    interest and after payment of all federal, state and local taxes or


                                       31
<PAGE>   36
    other fees, charges and assessments in respect thereof payable by the
    Trustee or Paying Agent, the principal of, premium, if any, and interest on
    the outstanding Securities of such Series when due; provided, however, that
    the Trustee or Paying Agent shall have been irrevocably instructed to apply
    such money or the proceeds of such U.S. Government Obligations to the
    payment of such principal and interest with respect to such Series;

        (ii) such deposit will not result in or constitute a Default or result
    in a breach or violation of, or constitute a default under, any other
    agreement or instrument to which the Company is a party or by which it is
    bound;

        (iii) no Default with respect to such Series shall have occurred and be
    continuing on the date of such deposit;

        (iv) the Company has delivered to the Trustee one or more Opinions of
    Counsel who are not employed by the Company to the effect that (A) the
    creation of the defeasance trust does not violate the Investment Company Act
    of 1940, (B) the Holders of such Series have a valid first-priority security
    interest in the trust funds, (C) such Holders will not recognize income,
    gain or loss for U.S. federal income tax purposes as a result of such
    deposit and defeasance of certain obligations and will be subject to U.S.
    federal income tax on the same amount and in the same manner and at the same
    times as would have been the case if such deposit and defeasance had not
    occurred and (D) after the passage of 123 days following the deposit
    (except, with respect to any trust funds for the account of any Holder who
    may be deemed to be an "insider" for purposes of the United States
    Bankruptcy Code, after one year following the deposit), the trust funds will
    not be subject to the effect of Section 547 of the United States Bankruptcy
    Code or Section 15 of the New York Debtor and Creditor Law in a case
    commenced by or against the Company under either such statute, and either
    (1) the trust funds will no longer remain the property of the Company (and
    therefore, will not be subject to the effect of any applicable bankruptcy,
    insolvency, reorganization or similar laws affecting creditors' rights
    generally) or (2) if a court were to rule under any such law in any case or
    proceeding that the trust funds remained property of the Company, (x)
    assuming such trust funds remained in the possession of the Trustee prior to
    such court ruling to the extent not paid to such Holders, the Trustee will
    hold, for the benefit of such Holders, a valid and perfected security
    interest in such trust funds that is not avoidable in bankruptcy or
    otherwise except for the effect of Section 552(b) of the United States
    Bankruptcy Code on interest on the trust funds accruing after the
    commencement of a case under such statute and (y) such Holders will be
    entitled to receive adequate protection of their interests in such trust
    funds if such trust funds are used in such case or proceeding; and

        (v) the Company has delivered to the Trustee an Officers' Certificate
    and an Opinion of Counsel, in each case stating that all conditions
    precedent provided for herein relating to the defeasance contemplated by
    this Section 7.4 have been complied with.

    Before or after a deposit pursuant to this Section, the Company may make
arrangements satisfactory to the Trustee for the redemption of Securities at a
future date in accordance with Article IX.

SECTION 7.5 Application of Trust Money.

    Subject to Section 7.7 of this Indenture, the Trustee or Paying Agent shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
Section 7.1, 7.2, 7.3 or 7.4 of this Indenture, as the case may be, and shall
apply the deposited money and the money from U.S. Government Obligations in
accordance with this Indenture to the payment of principal of and interest on
the Securities of the relevant Series. The


                                       32
<PAGE>   37
Trustee shall be under no obligation to invest such money or U.S. Government
Obligations and in no event shall the Trustee have any liability for, or in
respect of, any such investment made.

SECTION 7.6 Repayment to Company.

    Subject to Sections 6.7, 7.1, 7.2, 7.3 and 7.4 of this Indenture, the
Trustee and the Paying Agent shall promptly pay to the Company upon written
request any excess money or U.S. Government Obligations held by them at any time
pursuant to this Article, which in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee (which delivery shall only be required if U.S.
Government Obligations have been so provided), are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
discharge or defeasance in accordance with this Article VII, and thereupon shall
be relieved from all liability with respect to such money. The Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest of any Series that remains
unclaimed for two years; provided, however, that the Company shall if requested
by the Trustee or the Paying Agent, give the Trustee or such Paying Agent
indemnification reasonably satisfactory to it against any and all liability
which may be incurred by it by reason of such payment. After payment to the
Company, Holders entitled to such money must look to the Company for payment as
general creditors unless an applicable law designates another person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.

SECTION 7.7  Reinstatement.

    If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 7.1, 7.2, 7.3 or 7.4 of this
Indenture, as the case may be, by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Securities of the applicable Series shall be
revived and reinstated as though no deposit had occurred pursuant to Section
7.1, 7.2, 7.3 or 7.4 of this Indenture, as the case may be, until such time as
the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 7.1, 7.2, 7.3 or 7.4 of this
Indenture, as the case may be; provided, however, that, if the Company has made
any payment of principal of or interest on any Series of Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Series to receive such payment from the money or
U.S. Government Obligations held by the Trustee or Paying Agent.

SECTION 7.8 Deposited Money and U.S. Government Obligations to be Held in Trust:
Miscellaneous Provisions.

    The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited or the principal and interest received in respect thereof other than
any such tax, fee or other charge which by law is for the account of the Holders
of outstanding Securities.


                                       33
<PAGE>   38
                                  ARTICLE VIII

                           AMENDMENTS AND SUPPLEMENTS

SECTION 8.1 Without Consent of Holders.

    The Company, when authorized by a Board Resolution, and the Trustee may
amend this Indenture or a Series of Securities or enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) without notice to or the consent of any
Securityholder for one or more of the following purposes:

        (a) to cure any ambiguity, omission, defect or inconsistency;

        (b) to comply with Article IV;

        (c) to provide for uncertificated Securities of such Series in addition
    to certificated Securities of such Series; provided, however, that such
    uncertificated Securities are issued in registered form for purposes of
    Section 163(f) of the Code or in a manner such that such uncertificated
    Securities are described in Section 163(f)(2)(B) of the Code;

        (d) to add additional guarantees with respect to such Series or to
    secure such Series;

        (e) to add to the covenants of the Company for the benefit of the
    Holders of such Series or to surrender any right or power herein conferred
    upon the Company;

        (f) to comply with the requirements of the SEC in connection with
    qualification of the Indenture under the TIA;

        (g) to make any change that does not adversely affect the rights of any
    Securityholder of such Series; including, without limitation, changing any
    payment record dates as necessary to conform to then-current market
    practice; or

        (h) to provide for the issuance of Securities with terms not currently
    contemplated by Section 2.1.

    After an amendment or supplement pursuant this Section becomes effective,
the Company shall mail to Securityholders a notice briefly describing such
amendment or supplement. The failure to give such notice to all Securityholders,
or any defect therein, shall not impair or affect the validity of an amendment
or supplement under this Section.

SECTION 8.2 With Consent of Holders.

    The Company, when authorized by a Board Resolution, and the Trustee may
amend or supplement this Indenture or the Securities of a Series with the
written consent of the Holders of a majority in principal amount of the
Securities of each Series affected by such amendment or supplement. However,
without the consent of each Securityholder affected, an amendment or supplement
under this Section may not:

        (a) reduce the amount of Securities the Holders of which must consent to
    an amendment or supplement or waiver;

        (b) reduce the rate of or change the time for payment of interest on any
    Security;

        (c) reduce the principal of or change the Stated Maturity of any
    Security;


                                       34
<PAGE>   39
        (d) modify any redemption or repurchase right to the detriment of a
    Holder;

        (e) make any Security payable in currency or consideration other than
    that stated in the Security;

        (f) modify the Guarantee to the detriment of a Holder.

        (g) make any change in Section 5.4, Section 5.7 or this second sentence
    of this Section 8.2.

    An amendment or supplement which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular Series of Securities, or which modifies the
rights of the Holders of Securities of such Series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other Series.

    It shall not be necessary for the consent of the Holders under this Section
8.2 to approve the particular form of any proposed amendment or supplement, but
it shall be sufficient if such consent approves the substance thereof.

    After an amendment or supplement under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such amendment
or supplement. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment or
supplement under this Section.

SECTION 8.3  Compliance with Trust Indenture Act.

    Every amendment or supplement to this Indenture or the Securities shall be
set forth in a supplemental indenture that complies with the TIA as then in
effect.

SECTION 8.4 Revocation and Effect of Consents.

    Until an amendment or supplement under this Article becomes effective, a
consent to it by a Holder of any Security is a continuing consent by the Holder
and every subsequent Holder of Securities of that Series or portion thereof that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. However, any such Holder or subsequent
Holder may revoke the consent as to his Security or portion of a Security if the
Trustee receives the notice of revocation before the date the amendment or
supplement becomes effective.

    After an amendment or supplement becomes effective, it shall bind every
Securityholder of the affected Series.

SECTION 8.5 Notation on or Exchange of Securities.

    If an amendment changes the terms of a Security, the Trustee may require the
Holders of the Security to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Securities of such Series regarding the changed
terms and return it to the Holders. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Securities of such Series shall
issue and the Trustee shall authenticate new Securities of such Series that
reflect the changed terms. Failure to make the appropriate notation or to issue
a new Securities of such Series shall not affect the validity of such amendment.


                                       35
<PAGE>   40
SECTION 8.6  Trustee To Sign Amendments.

    The Trustee shall sign any supplemental indenture which sets forth an
amendment or supplement authorized pursuant to this Article if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee under this Indenture or otherwise. If it does, the
Trustee may but need not sign it. In signing such supplemental indenture the
Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that such supplemental indenture is authorized or permitted by
this Indenture and, with respect to an amendment or supplement pursuant to
Section 8.2, evidence of the consents of Holders required in connection
therewith.

SECTION 8.7 Fixing of Record Dates.

    The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to take any action under this
Indenture by vote or consent. Except as provided herein, such record date shall
be the later of 30 days prior to the first solicitation of such consent or vote
or the date of the most recent list of Securityholders furnished to the Trustee
pursuant to Section 2.6 prior to such solicitation. If a record date is fixed,
those Persons who were Securityholders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to take such
action by vote or consent or to revoke any vote or consent previously given,
whether or not such Persons continue to be Holders after such record date;
provided, however, that unless such vote or consent is obtained from the Holders
(or their duly designated proxies) of the requisite principal amount of
outstanding Securities prior to the date which is the 120th day after such
record date, any such vote or consent previously given shall automatically and
without further action by any Holder be canceled and of no further effect.

                                   ARTICLE IX

                                   REDEMPTION

SECTION 9.1 Applicability of Article.

    Securities of any Series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 2.1) in accordance with this Article.

SECTION 9.2 Election to Redeem; Notice to Trustee.

    The election of the Company to redeem Securities of any Series shall be
evidenced by a resolution of the Board of Directors. In case of any redemption
at the election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities of such Series to be redeemed. In the case of
any redemption of such Securities (i) prior to the expiration of any restriction
on such redemption provided in the terms of such Securities or elsewhere in this
Indenture or (ii) that is subject to compliance with any conditions provided for
in the terms of such Securities or elsewhere in this Indenture, the Company
shall furnish the Trustee with an Officers' Certificate evidencing compliance
with such restriction or conditions.


                                       36
<PAGE>   41
SECTION 9.3 Selection by Trustee of Securities to be Redeemed.

    If less than all the Securities of the Series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the outstanding Securities of
such Series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to authorized denominations for Securities of that
Series) of the principal amount of Securities of such Series.

    The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.

    For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities of any Series shall
relate, in the case of any Securities redeemed or to be redeemed only in part,
to the portion of the principal amount of such Securities which has been or is
to be redeemed.

SECTION 9.4 Notice of Redemption.

    Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at such Holder's registered address.

    All notices of redemption shall identify the Securities to be redeemed
(including CUSIP numbers) and shall state:

        (1) the Redemption Date,

        (2) the Redemption Price,

        (3) if less than all the outstanding Securities of such Series are to be
    redeemed, the identification (and, in the case of partial redemption, the
    principal amounts) of the particular Securities to be redeemed,

        (4) that on the Redemption Date, the Redemption Price will become due
    and payable upon each such Security to be redeemed and, if applicable, that
    interest thereon will cease to accrue on and after said date,

        (5) the place or places where such Securities are to be surrendered for
    payment of the Redemption Price, and

        (6) that the redemption is for a sinking fund, if such is the case.

    Notice of redemption of Securities of any Series to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company. The
notice if mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the Holder receives such notice. In any
case, a failure to give such notice by mail or any defect in the notice to the
Holder of any Security designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other Security.


                                       37
<PAGE>   42
SECTION 9.5 Deposit of Redemption Price.

    Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities registered as such at the close of business on the relevant
record dates according to their terms.

    If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear interest from the
Redemption Date at the rate prescribed therefor in the Security.

SECTION 9.6 Securities Redeemed in Part.

    Any Security which is to be redeemed only in part shall be surrendered at
the office of the Paying Agent (with, if the Company or the Trustee for such
Security so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities of the same
Series, of any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.

                                    ARTICLE X

                                  MISCELLANEOUS

SECTION 10.1  Trust Indenture Act Controls.

    If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of TIA Sections 310 to 317, inclusive, through operation
of TIA Section 318(c), such imposed duties shall control.

SECTION 10.2  Notices.

    Any notice or communication shall be in writing and delivered in person, or
mailed by first-class mail (certified, return receipt requested), addressed as
follows:

                  if to the Company:

                  Calpine Canada Energy Finance ULC
                  Suite 800, Purdy's Wharf, Tower 1
                  1952 Upper Water Street
                  P. O. Box 997
                  Halifax, Nova Scotia B3J 3N2

                  with a copy to:

                  Calpine Corporation
                  50 West San Fernando Street
                  San Jose, California 95113
                  Attn: General Counsel

                                       38
<PAGE>   43
                  if to the Trustee:

                  Wilmington Trust Company
                  Rodney Square North
                  1100 North Market Street
                  Wilmington, DE 19890
                  Attention: Corporate Trust Administration

    The Company or the Trustee by notice to the others may designate additional
or different addresses for subsequent notices or communications. Any notice to
the Trustee under this Indenture shall be deemed given only when received by the
Trustee at the address specified in this Section 10.2.

    Any notice or communication to a Securityholder shall be mailed by
first-class mail to the Securityholder's address shown on the register kept by
the Registrar. Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders.

    If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.

    If the Company mails a notice or communication to Securityholders, it shall
mail a copy to the Trustee and each Agent at the same time.

SECTION 10.3 Communication by Holders with Other Holders.

    Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).

SECTION 10.4 Certificate and Opinion as to Conditions Precedent.

    Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall, if requested by the Trustee,
furnish to the Trustee:

        (a) an Officers' Certificate in form reasonably satisfactory to the
    Trustee stating that, in the opinion of the signers, all conditions
    precedent (including any covenants compliance with which constitutes a
    condition precedent), if any, provided for in this Indenture relating to the
    proposed action have been complied with; and

        (b) an Opinion of Counsel in form reasonably satisfactory to the Trustee
    stating that, in the opinion of such counsel (which may rely upon an
    Officers' Certificate as to factual matters), all such conditions precedent
    have been complied with.

SECTION 10.5 Statements Required in Certificate or Opinion.

    Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture other than
certificates provided pursuant to Section 3.5 shall include:

        (a) a statement that the Person making such certificate or opinion has
    read such covenant or condition;


                                       39
<PAGE>   44
        (b) a brief statement as to the nature and scope of the examination or
    investigation upon which the statements or opinions contained in such
    certificate or opinion are based;

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

        (d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.

SECTION 10.6 Rules by Trustee and Agents.

    The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.

SECTION 10.7 Legal Holidays.

    A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York or the
State(s) in which the offices of the Trustee or the Paying Agent are located. If
a payment date is a Legal Holiday, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period. If a regular record date is a Legal Holiday, the regular
record date shall not be affected.

SECTION 10.8  Successors; No Recourse Against Others.

    (a) All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.

    (b) All liability of the Company described in the Securities insofar as it
relates to any director, officer, employee or stockholder, as such, of the
Company is waived and released by each Securityholder.

SECTION 10.9 Duplicate Originals.

    The parties may sign any number of copies of this Indenture. One signed copy
is enough to prove this Indenture.

SECTION 10.10 Other Provisions.

    The first certificate pursuant to Section 3.5 shall be for the fiscal year
ending on December 31, 2001.

    The reporting date for Section 6.6 is April 15 of each year. The first
reporting date is April 15, 2002.

SECTION 10.11 Governing Law.

    The laws of the State of New York govern this Indenture and the Securities,
without regard to the conflicts of laws rules thereof.

SECTION 10.12. Jurisdiction.

    The Company agrees that any suit, action or proceeding against the Company
brought by any Holder or the Trustee arising out of or based upon this Indenture
or the Securities may be instituted in a U.S. Federal or New York state court
located in New York City, and any appellate court from any thereof, and
irrevocably submits to the non-exclusive jurisdiction of such courts in any
suit, action or proceeding. The Company irrevocably waives, to the fullest
extent permitted by law, any objection to any suit, action or proceeding that
may be brought in connection with this Indenture or the Securities, including
such actions, suits or proceedings relating to securities laws of the United
States of America or any state thereof, in such courts whether on the grounds of
venue, residence or domicile or on the ground that any such suit, action or
proceeding has been brought in an inconvenient forum. The Company agrees that
final judgment in any such suit, action or proceeding brought in such court
shall be conclusive and binding upon the Company and may be enforced in any
court to the jurisdiction of which the Company, is subject by a suit upon such
judgment; provided that service of process is effected upon the Company, in the
manner provided by this Indenture. The Company has irrevocably appointed CT
Corporation Systems with offices on the date hereof at 111 Eighth Avenue, New
York, New York 10011, as its authorized agent (the "Authorized Agent"), upon
whom process may be served in any suit, action, or proceeding arising out of or
based upon this Indenture, the Securities or the transactions contemplated
herein which may be instituted in any U.S. Federal or state court located in New
York City by any Holder or the Trustee and expressly accepts the non-exclusive
jurisdiction of any such courts in respect of any such suit, action or
proceeding. The Company hereby represents and warrants that the Authorized Agent
has accepted such appointment and has agreed to act as said agent for service of
process, and the Company agrees to take any and all action, including the filing
of any and all documents that may be necessary to continue such respective
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent shall be deemed, in every respect, effective service of process
upon the Company. Notwithstanding the foregoing, any action involving the
Company arising out of or based upon this Indenture or the Securities may be
instituted by any Holder or the Trustee in any court of competent jurisdiction
in Canada.

    SECTION 10.13. Judgment Currency.

    The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the dollar sum due in respect of the principal
of or interest on the Securities (the "Required Currency") into a currency other
than dollars, in which a judgment will be rendered (the "Judgment Currency"),
the rate of exchange used shall be the rate at which in accordance with normal
banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the day on which final
unappealable judgment is entered, unless such day is not a New York Banking Day,
then, to the extent permitted by applicable law, the rate of exchange used shall
be the rate at which in accordance with normal banking procedures the Trustee
could purchase in The City of New York the Required Currency with the Judgment
Currency on the New York Banking Day preceding the day on which final
unappealable judgment is entered and (b) its obligations under this Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, or any recovery pursuant to any judgment (whether or not entered
in accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other
sum due under this Indenture. For purposes of the foregoing, "New York Banking
Day" means any day except a Saturday, Sunday or a legal holiday in The City of
New York or a day on which banking institutions in The City of New York are
authorized or required by law or executive order to close.


                                       40
<PAGE>   45
                                   SIGNATURES

                                         CALPINE CANADA ENERGY FINANCE ULC

                                         By
                                           -------------------------------------
                                         Name:
                                         Title:



                                         WILMINGTON TRUST COMPANY,
                                         as Trustee

                                         By
                                           -------------------------------------

                                         Name:
                                         Title:


Dated:  [__________], 2001


                                       41
<PAGE>   46
                                                                       EXHIBIT A

                           (Form of Face of Security)

     [THIS SECURITY IS ISSUED IN GLOBAL FORM AND REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") OR A NOMINEE THEREOF.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE REGISTERED FORM IN ACCORDANCE WITH THE TERMS HEREOF AND OF THE
INDENTURE (AS DEFINED BELOW), THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER
NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITORY.]*


                                      A-1
<PAGE>   47
                        CALPINE CANADA ENERGY FINANCE ULC

                              ___% SENIOR NOTE DUE

No.____                                                           $_____________
                                                                       CUSIP:
                                                                       ISIN:

     Calpine Canada Energy Finance ULC, an unlimited liability company organized
under the laws of Nova Scotia, Canada (the "Company"), promises to pay to [Cede
& Co.]*, or registered assigns, the principal sum of ____________ Dollars on
_______________.

                Interest Payment Dates: __________ and __________
                     Record Dates: __________ and __________

     This Security is fully and unconditionally guaranteed by Calpine
Corporation, a Delaware corporation, as set forth in the Guarantee Agreement,
dated [_________], 2001, made by Calpine Corporation and in the Guarantee
endorsed hereon.

     Additional provisions of this Security are set forth on the reverse hereof.

     IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.

Date: _______________

                                        CALPINE CANADA ENERGY FINANCE ULC

                                        By ____________________________________
                                              Name:
                                              Title:

                                        By ____________________________________
                                              Name:
                                              Title:

TRUSTEE'S CERTIFICATE
OF AUTHENTICATION:

Wilmington Trust Company, as
Trustee, certifies that this is
one of the Securities referred to
in the Indenture.

By: _______________________________  Dated: __________________________________
           Authorized Officer

* Insert in Global Security only.


                                      A-2
<PAGE>   48
                          (Form of Reverse of Security)

                        CALPINE CANADA ENERGY FINANCE ULC
                           ___% SENIOR NOTE DUE _____


         (1) Interest. Calpine Canada Energy Finance ULC, an unlimited liability
company organized under the laws of Nova Scotia, Canada (such company, and its
successors and assigns under the Indenture referred to below, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the interest rate per annum shown above. The Company will pay
interest semiannually on __________ and __________ of each year. Interest on the
Securities of this Series will accrue from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for, from ________________. Interest will be computed as set forth
in the Directors' Certificate or supplemental indenture delivered pursuant to
Section 2.1.

         (2) Method of Payment. The Company will pay interest on the Securities
of this Series (except Defaulted Interest) to the persons who are registered
Holders of Securities of this Series at the close of business on the record date
next preceding the interest payment date even though such Securities are
canceled after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.

         (3) Paying Agent, Registrar. Initially, The Wilmington Trust Company, a
Delaware banking corporation (the "Trustee"), will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-registrar
without notice. The Company may act as Paying Agent, Registrar or co-registrar.

         (4) Indenture. The Company issued the Securities of this Series under
an Indenture dated as of _______________ (the "Indenture") between the Company
and the Trustee. The Securities are unsecured general obligations of the Company
issued and to be issued in one or more Series under the Indenture and may be
issued in an unlimited principal amount. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the
"TIA"). Capitalized terms used herein but not defined herein are used as defined
in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
such terms.

         (5) Guarantee. The Securities of this Series are entitled to the
benefits under the Guarantee Agreement, dated [_________], 2001 (the "Guarantee
Agreement"), made by Calpine Corporation, a Delaware corporation.

         (6) Redemption. The Securities of this Series are redeemable, at the
option of the Company, at any time in whole or from time to time in part, on
not less than    nor more than    days' prior notice to the registered Holders
of Securities of this Series, on any date prior to its maturity (a "Redemption
Date") at a redemption price equal to: (i) 100% of the outstanding principal
amount of the Securities of this Series being redeemed; plus (ii) accrued and
unpaid interest on the Securities of this Series being redeemed to, but
excluding, the Redemption Date; plus (iii) a Make-Whole Premium. In no event
will the redemption price on the Securities of this Series be less than 100% of
the principal amount of the Securities of this Series being redeemed plus
accrued and unpaid interest thereon. "Make-Whole Premium" means an amount equal
to the Discounted Present Value calculated for any Security of this Series
subject to redemption less the unpaid principal amount of the Security of this
Series; provided, however, that no Make-Whole Premium shall be less than zero.
For purposes of the definition of "Make-Whole Premium," the "Discounted Present
Value" of any Securities of this Series subject to redemption shall be equal to
the discounted present value of all principal and interest payments scheduled
to become due in respect of the Securities of this Series after the Redemption
Date, calculated using a discount rate equal to the sum of (1) the yield to
maturity on the United States treasury security having a maturity date equal to
the maturity date of the Securities of this Series and trading in the secondary
market at the price closest to par and (2)    basis points, provided, however,
that if there is no United States Treasury security having a maturity date
equal to the maturity date of the Securities of this Series, such discount rate
shall be calculated using a yield to maturity interpolated or extrapolated on a
straight-line basis (rounding to the nearest month, if necessary) from the
yields to maturity for the two United States treasury securities having
maturity dates most closely corresponding to the maturity date of the
Securities of this Series and trading in the secondary market at the price
closest to par. Notwithstanding Section 9.4 of the Indenture, the notice of
redemption with respect to the foregoing redemption need not set forth the
redemption price but only the manner of calculation thereof. The Company shall
notify the Trustee of the redemption price with respect to the foregoing
redemption promptly after the calculation thereof. The Trustee shall not be
responsible for calculating said redemption price.

         (7) Denominations; Transfer; Exchange. The Securities of this Series
are in registered form without coupons in denominations of $1,000 and any
integral multiple thereof [or as otherwise set forth in the Security]. The
transfer of Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Company
shall not be required (A) to issue, register the transfer of or exchange any
Securities of a Series during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of any such
Securities


                                      A-3
<PAGE>   49
selected for redemption under Section 9.3 of the Indenture and ending at the
close of business on the day of such mailing or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.

         (8) Defeasance. Subject to certain conditions and unless otherwise
provided in the terms of the Securities of this Series, the Company at any time
may terminate some or all of its obligations under the Securities and the
Indenture if the Company deposits with the Trustee money and/or U.S. Government
Obligations for the payment of principal and interest on the Securities to
maturity.

         (9) Persons Deemed Owners. The registered Holder of a Security may be
treated as its owner for all purposes, except that interest (other than
Defaulted Interest) will be paid to the person that was the registered Holder on
the relevant record date for such payment of interest.

         (10) Amendments and Waivers. Subject to certain exceptions, (i) the
Indenture or the Securities may be amended or supplemented with the consent of
the Holders of a majority in principal amount of the Securities of each Series
affected; and (ii) any existing default with respect to the Securities of this
Series may be waived with the consent of the Holders of a majority in principal
amount of the Securities of such Series. Without the consent of any
Securityholder, the Indenture or the Securities may be amended or supplemented
to cure any ambiguity, omission, defect or inconsistency, to provide for
assumption of Company obligations to Securityholders or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
to provide for guarantees with respect to, or security for, the Securities, or
to comply with the TIA or to add additional covenants or surrender Company
rights, or to make any change that does not adversely affect the rights of any
Securityholder.

         (11) Remedies. If an Event of Default with respect to the Securities of
this Series occurs and is continuing, the Trustee or Holders of at least 25% in
principal amount of the Securities of this Series may declare all the Securities
of this Series to be due and payable immediately. Securityholders may not
enforce the Indenture, the Guarantee Agreement and the Guarantee or the
Securities of this Series except as provided in the Indenture. The Trustee may
require an indemnity before it enforces the Indenture, the Guarantee Agreement
or the Securities. Subject to certain limitations, Holders of a majority in
principal amount of the Securities of a Series may direct the Trustee in its
exercise of any trust or power with respect to such Series. The Trustee may
withhold from Securityholders notice of any continuing default (except a Default
in payment of principal or interest) if it determines that withholding notice is
in their interests. The Company must furnish an annual compliance certificate to
the Trustee.

         (12) Trustee Dealings with Company. Subject to the provisions of the
TIA, the Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from, and perform services for the Company or
its Affiliates, and may otherwise deal with the Company or its Affiliates, as if
it were not Trustee. The Trustee will initially be Wilmington Trust Company.

         (13) No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company or the Guarantor shall not have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.


                                      A-4
<PAGE>   50
         (14) Authentication. This Security shall not be valid until
authenticated by the manual signature of an authorized officer of the Trustee or
an authenticating agent.

         (15) Abbreviations. Customary abbreviations may be used in the name of
a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).

         Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities. No representation is made as to the accuracy of such
numbers as printed on the Securities and reliance may be placed only on the
other identification numbers placed thereon.

         THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE, WHICH HAS IN IT THE TEXT OF THIS
SECURITY IN TWELVE-POINT TYPE. REQUESTS MAY BE MADE TO: SECRETARY, CALPINE
CORPORATION, 50 WEST SAN FERNANDO STREET, SAN JOSE, CALIFORNIA 95113.

                                    GUARANTEE

         For value received, CALPINE CORPORATION, a Delaware corporation
(including any successor under the Guarantee Agreement referred to in the
Security upon which this Guarantee is endorsed, the "Guarantor") hereby
unconditionally guarantees to the Holder of the Security upon which this
Guarantee is endorsed, and to the Trustee and its successors and assigns on
behalf of such Holder, that: the principal of, premium thereon (if any) and
interest on such Security will be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise, and
interest on the overdue principal and interest on any overdue interest on such
Security and all other obligations of the Company to the Holder of such Security
or the Trustee or under the Indenture will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof.

         The Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Security upon which this Guarantee is endorsed or of the Indenture, the absence
of any action to enforce the same, any waiver or consent by the Holder of such
Security with respect to any provisions hereof or of the Indenture, the
Guarantee Agreement or the Securities, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of the Guarantor.

         The Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require proceeding first against the Company, protest,
notice and all demands whatsoever and covenants that this Guarantee will not be
discharged except by complete performance of the obligations contained in the
Indenture and the Security upon which this Guarantee is endorsed. This is a
guarantee of payment and not of collection.

         If the Holder of such Security or the Trustee is required by any court
or otherwise to return to the Company or the Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or the Guarantor, any amount paid by the Company or the Guarantor to the Trustee
or such Holder, the Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.


                                      A-5
<PAGE>   51
         The Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of the Guarantor's
obligations under the Guarantee or the Indenture, including, without limitation,
any right of subrogation, shall be subject and subordinate to, and no payment
with respect to any such claim of the Guarantor shall be made before, the
payment in full in cash of the Security upon which this Guarantee is endorsed in
accordance with the provisions provided therefor in the Indenture.

         All capitalized terms used without definition in this Guarantee shall
have the respective meanings assigned to such terms in the Guarantee Agreement.

         This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Security upon which this Guarantee is
endorsed shall have been executed by the Trustee under the Indenture by the
manual signature of one of its authorized officers.

                                                  CALPINE CORPORATION

                                                  By: __________________________
                                                      Name:
                                                      Title:


                                      A-6
<PAGE>   52
                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

     I  or we assign and transfer this Security to

                  (Insert assignee's soc. sec or tax I.D. no.)

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

              (Print or type assignee's name, address and zip code)


and irrevocably appoint ____________________ agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.

Dated: _______________________               Signed: __________________________
                                             (Sign exactly as your name appears
                                             on the other side of this Security)


Signature Guarantee: ___________________________________________________________

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.


                                      A-7
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>4
<FILENAME>f70590a1ex4-4.txt
<DESCRIPTION>EXHIBIT 4.4
<TEXT>

<PAGE>   1
                                                                     Exhibit 4.4



                               GUARANTEE AGREEMENT


                                     made by


                               CALPINE CORPORATION


                    as Guarantor of Debt Securities Issued by
                        CALPINE CANADA ENERGY FINANCE ULC

                                   dated as of


                               [__________], 2001
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                  Page
                                                                                  ----
<S>                                                                               <C>
ARTICLE ONE    DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...............1

            SECTION 1.01. Definitions................................................1

ARTICLE TWO    GUARANTEE.............................................................4

            SECTION 2.01. Unconditional Guarantee....................................4

            SECTION 2.02. Execution of Guarantee.....................................5

            SECTION 2.03. Subordination of Subrogation and Other Rights..............5

            SECTION 2.04. Termination of Guarantee with Respect to Series............5

ARTICLE THREE    CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE................5

            SECTION 3.01. Guarantor May Consolidate, Etc., Only on Certain Terms.....5

            SECTION 3.02. Successor Substituted......................................6

            SECTION 3.03. Assignment to the Guarantor of the Company's Obligations...6

ARTICLE FOUR    AMENDMENTS...........................................................7

            SECTION 4.01. Amendments Without Consent of Holders......................7

            SECTION 4.02. Amendments With Consent of Holders.........................7

            SECTION 4.03. Execution of Amendments....................................8

            SECTION 4.04. Effect of Amendments.......................................8

            SECTION 4.05. Conformity With Trust Indenture Act........................8

            SECTION 4.06. Reference in Guarantees to Amendments......................8

ARTICLE FIVE    COVENANTS............................................................8

            SECTION 5.01. Money for Security Payments To Be Held in Trust............8

            SECTION 5.02. Limitation on Sale/Leaseback Transactions..................9

            SECTION 5.03. Limitation on Liens........................................9

            SECTION 5.04. Waiver of Certain Covenants...............................10
</TABLE>
<PAGE>   3
<TABLE>
<S>                                                                                  <C>
            SECTION 5.05. Reports by Guarantor..................................... 11

ARTICLE SIX    MISCELLANEOUS....................................................... 11

            SECTION 6.01. Trust Indenture Act...................................... 11

            SECTION 6.02. Effect of Headings and Table of Contents................. 11

            SECTION 6.03. Successors and Assigns................................... 11

            SECTION 6.04. Separability Clause...................................... 12

            SECTION 6.05. Benefits of Agreement.................................... 12

            SECTION 6.06. Governing Law............................................ 12

            SECTION 6.07. Notices, Etc., to the Guarantor.......................... 12
</TABLE>

                                       ii
<PAGE>   4
            GUARANTEE AGREEMENT (this "Agreement"), dated as of [__________],
2001, made by Calpine Corporation, a Delaware corporation (the "Guarantor"),
whose principal place of business is 50 West San Fernando Street, San Jose, CA
95113, the parent of Calpine Canada Energy Finance ULC, an unlimited liability
company organized under the laws of Nova Scotia, Canada, (the "Company"), in
favor of the Holders (as defined in the Indenture referred to below) and the
Trustee (as defined below).

            Reference is made to the Indenture (as the same may be amended,
restated, supplemented or modified from time to time, the "Indenture") between
the Company and Wilmington Trust Company, as trustee (the "Trustee") dated as of
[__________], 2001, relating to the securities issued thereunder (the
"Securities").

                            RECITALS OF THE GUARANTOR

            The Guarantor has duly authorized the execution and delivery of this
Agreement and has agreed to guarantee the Securities pursuant to the terms of
the Indenture and this Agreement;

            All things necessary to make this Agreement a valid agreement of the
Guarantor, in accordance with its terms, have been done.

                   NOW, THEREFORE, THIS AGREEMENT WITNESSETH:

            That in order to declare the terms and conditions upon which the
guarantee of the securities (the "Guarantee") is made, executed, authenticated
and delivered, the Guarantor covenants and agrees, for the equal and
proportionate benefit of all Holders (as defined below) of the Securities or of
any Series thereof and for the benefit of the Trustee, as follows:

                                   ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

         SECTION 1.01. Definitions.

         For all purposes of this Agreement hereto, except as otherwise
expressly provided or unless the context otherwise requires:

         (1) the terms defined in this Article One have the meanings assigned to
them in this Article One and include the plural as well as the singular;

         (2) the capitalized terms not defined in this Agreement have the
meanings assigned to them in the Indenture;

         (3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted at the
date of this Agreement; and
<PAGE>   5
             (4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.

             "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 Securities outstanding under the Indenture (calculated, in the event of
the issuance of any original issue discount Securities, 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.

             "Board of Directors" means the Board of Directors of the Guarantor
or any authorized committee 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 Trustee.

             "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 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, 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 of the Guarantor held by Persons other than
the Guarantor or a Restricted Subsidiary of the Guarantor; (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


                                        2
<PAGE>   6
other retirement of Capital Stock to the extent such obligation is not reflected
in Consolidated Current Liabilities.

             "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.

             "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 (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; provided,
however, that (i) if the Indebtedness being refinanced is contractually
subordinated in right of payment to the Securities, the Refinancing Indebtedness
shall be contractually subordinated in right of payment to the Securities 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 Securities, (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.

            "Restricted Subsidiary" means any Subsidiary of the Guarantor that
is not designated an Unrestricted Subsidiary by the Board of Directors of the
Guarantor.

             "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.

            "Subsidiary" means, as applied to any Person, any corporation,
partnership, trust, association or other business entity of which an aggregate
of at least 50% of the outstanding Voting Shares or an equivalent controlling
interest therein, of such Person is, at the time, directly or indirectly, owned
by such Person and/or one or more Subsidiaries of such Person.

            "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 below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may


                                       3
<PAGE>   7
designate any Subsidiary (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Guarantor or
any other Subsidiary that is not a Subsidiary of the Subsidiary to be so
designated; provided, that the Subsidiary to be so designated and all other
Subsidiaries previously so designated at the time of any determination hereunder
shall, in the aggregate, have total assets not greater than 5% of Consolidated
Net Tangible Assets as determined based on the Consolidated balance sheet of the
Guarantor as of the end of the most recent fiscal quarter for which financial
statements are available. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary of the Guarantor; provided, however,
that immediately after giving effect to such designation no Default or Event of
Default shall have occurred and be continuing. Any such designation by the Board
of Directors shall be evidenced to the Trustee by promptly filing with the
Trustee a Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provision; provided, however, that the failure to so file such resolution and/or
Officers' Certificate with the Trustee shall not impair or affect the validity
of such designation.

            "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.

                                   ARTICLE TWO

                                    GUARANTEE

            SECTION 2.01. Unconditional Guarantee.

            The Guarantor hereby unconditionally guarantees to each Holder of a
Security authenticated by the Trustee and to the Trustee and its successors and
assigns that: the principal of, premium thereon (if any) and interest on the
Securities of each Series will be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise, and
interest on the overdue principal and interest on any overdue interest on the
Securities of each Series and all other obligations of the Company to the
Holders or the Trustee hereunder or under the Indenture or the Securities of
such Series will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof. The Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities of each Series or of the Indenture, the absence
of any action to enforce the same, any waiver or consent by any Holder of the
Securities or any Series with respect to any provisions hereof, of the Indenture
or of the Securities, the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of the Guarantor. The
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require proceeding first against the Company, protest, notice and all
demands whatsoever and covenants that the Guarantee will not be discharged
except by complete performance of the obligations contained in the Indenture and
the Securities of each Series. If any Holder or the Trustee is required by any
court or otherwise to return to the Company or the Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or the Guarantor, any amount paid by the


                                       4
<PAGE>   8
Company or the Guarantor to the Trustee or such Holder, the Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect. The
Guarantee constitutes a guarantee of payment and not of collection.

            SECTION 2.02. Execution of Guarantee.

            To further evidence the Guarantee to the Holders, the Guarantor
hereby agrees to execute a Guarantee substantially in the form of Exhibit A
hereto, to be endorsed on and made a part of each Security ordered to be
authenticated and delivered by the Trustee. The Guarantor hereby agrees that its
Guarantee set forth in Section 2.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a Guarantee. Each such
Guarantee shall be signed on behalf of the Guarantor by its Chairman of the
Board, its President or one of its Vice Presidents prior to the authentication
of the Security on which it is endorsed, and the delivery of such Security by
the Trustee, after the authentication thereof hereunder, shall constitute due
delivery of such Guarantee on behalf of the Guarantor. Such signature upon the
Guarantee may be a manual or facsimile signature of such officer and may be
imprinted or otherwise reproduced on the Guarantee, and in case such officer who
shall have signed the Guarantee shall cease to be such officer before the
Security on which Guarantee is endorsed shall have been authenticated and
delivered by the Trustee or disposed of by the Company, the Security
nevertheless may be authenticated and delivered or disposed of as though the
Person who signed the Guarantee had not ceased to be such officer of the
Guarantor.

            SECTION 2.03. Subordination of Subrogation and Other Rights.

            The Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of the Guarantor's
obligations under the Guarantee or the Indenture, including, without limitation,
any right of subrogation, shall be subject and subordinate to, and no payment
with respect to any such claim of the Guarantor shall be made before, the
payment in full in cash of all outstanding Securities of each Series in
accordance with the provisions provided therefor in the Indenture.

            SECTION 2.04. Termination of Guarantee with Respect to Series.

            If all outstanding Securities of a Series are paid or discharged by
the Company pursuant to the Indenture, or if the Company otherwise terminates
its obligations with respect to all Securities of such Series pursuant to the
Indenture (including by defeasance thereof), then the Guarantee with respect to
the Securities of such Series and this Guarantee Agreement insofar as it relates
to the Securities of such Series, shall also and concurrently terminate.

                                  ARTICLE THREE

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

             SECTION 3.01. Guarantor May Consolidate, Etc., Only on Certain
Terms.

     The Guarantor shall not in a single transaction or through a series of
related transactions consolidate with or merge with or into any other
corporation or sell, assign, convey, transfer or lease or otherwise dispose of
all or substantially all of its properties and assets to any Person or group of
affiliated Persons, unless:


                                       5
<PAGE>   9
             (i) either (A) the Guarantor shall be the continuing Person, or (B)
     the Person (if other than the Guarantor) formed by such consolidation or
     into which the Guarantor is merged or to which the properties and assets of
     the Guarantor are sold, assigned, conveyed, transferred, disposed of or
     leased as aforesaid (the "Successor Corporation") shall be a corporation
     organized and existing under the laws of the United States or any State
     thereof or the District of Columbia and shall expressly assume, by an
     agreement supplemental hereto, executed and delivered to the Trustee, in
     form reasonably satisfactory to the Trustee, all the obligations of the
     Guarantor under this Agreement;

             (ii) immediately after giving effect to such transaction, no
     Default shall have occurred and be continuing;

             (iii) the Guarantor shall have delivered, or caused to be
     delivered, to the Trustee an Officers' Certificate and, as to legal
     matters, an Opinion of Counsel, each in form reasonably satisfactory to the
     Trustee, each stating that such consolidation, merger, sale, assignment,
     conveyance, transfer, disposition or lease and such supplemental indenture
     comply with this Agreement and that all conditions precedent herein
     provided for relating to such transaction have been complied with;

            Notwithstanding the foregoing paragraph (ii), any Restricted
Subsidiary, the Guarantor or any Wholly Owned Subsidiary or Wholly Owned
Subsidiaries may consolidate with or merge with or into the Guarantor or any
Wholly Owned Subsidiary and no violation of this Section shall be deemed to have
occurred as a consequence thereof, as long as the requirements of paragraphs (i)
and (iii) are satisfied in connection therewith.

            SECTION 3.02. Successor Substituted.

             Upon any such consolidation or merger, or any sale, assignment,
conveyance, transfer, disposition or lease of all or substantially all of the
properties or assets of the Guarantor in accordance with Section 3.01, the
Successor Corporation shall succeed to and be substituted for the Guarantor
under this Agreement, and the Guarantor shall (except in the case of a lease)
thereupon be released from all obligations hereunder and under this Agreement
and the Guarantor, as the predecessor corporation, may thereupon or at any time
thereafter be dissolved, wound up or liquidated.

             SECTION 3.03. Assignment to the Guarantor of the Company's
Obligations.

            It is acknowledged that, pursuant to Section 4.3 of the Indenture,
the Company may assign its obligations under any Series of Securities and the
Indenture to the Guarantor or any Subsidiary of the Guarantor in accordance with
such Section 4.3 and, if the Company assigns its obligations to the Guarantor in
accordance with such Section 4.3 with respect to any Series of Securities, all
Guarantees of outstanding Securities of such Series shall automatically
terminate and be discharged.


                                       6
<PAGE>   10
                                  ARTICLE FOUR

                                   AMENDMENTS

            SECTION 4.01. Amendments Without Consent of Holders.

            The Guarantor, when authorized by a Board Resolution, and the
Trustee may enter into one or more agreements, in form satisfactory to the
Trustee, without notice to or the consent of any Securityholder for any of the
following purposes:

             (1) to evidence the succession of another corporation to the
Guarantor and the assumption by any such successor of the covenants of the
Guarantor herein; or

             (2) to add to the covenants of the Guarantor for the benefit of the
Holders of all or any Series of Securities, or to surrender any right or power
herein conferred upon the Guarantor; or

             (3) to comply with Article Three; or

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

            SECTION 4.02. Amendments With Consent of Holders.

            The Guarantor, when authorized by a Board Resolution, and the
Trustee may enter into an amendment to this Agreement for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Securities of any Series under this Agreement with the written consent of the
Holders of a majority in principal amount of the Securities of each Series
affected by such amendment. However, without the consent of each Securityholder
affected, an amendment under this Section may not:

            (1) modify Article Two or the definitions used in Article
Two in a manner which adversely affects the Holders of Outstanding Securities in
any material respect, or

            (2) modify any of the provisions of this Section 4.02,
except to increase any such percentage or to provide that certain other
provisions of this Agreement cannot be modified or waived without the consent of
the Holder of each Outstanding Security affected thereby.

            An amendment that changes or eliminates any covenant or other
provision of this Agreement which has expressly been included solely for the
benefit of one or more particular Series of Securities, or that modifies the
rights of the Holders of Securities of such Series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Agreement of the Holders of Securities of any other Series.


                                       7
<PAGE>   11
            It shall not be necessary for any Act of Holders under this Section
4.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.

            SECTION 4.03. Execution of Amendments.

            In executing any amendment permitted by this Article Four, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement or otherwise.

            SECTION 4.04. Effect of Amendments.

            Upon the execution of any amendment under this Article Four, this
Agreement shall be modified in accordance therewith, and such amendment shall
form a part of this Agreement for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

            SECTION 4.05. Conformity With Trust Indenture Act.

            Every amendment executed pursuant to this Article Four shall conform
to the requirements of the TIA as then in effect.

            SECTION 4.06. Reference in Guarantees to Amendments.

            The Guarantees endorsed on Securities authenticated and delivered
after the execution of any amendment pursuant to this Article Four may, and
shall, if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such amendment. If the Guarantor shall
so determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such amendment may be prepared and
executed by the Guarantor and authenticated and delivered by the Trustee in
exchange for outstanding Securities.

                                  ARTICLE FIVE

                                    COVENANTS

            SECTION 5.01. Money for Security Payments To Be Held in Trust.

            If the Guarantor shall at any time act as Paying Agent with respect
to any Series of Securities, it will, on or before each due date of the
principal of (or premium, if any) or interest, if any, on any of the securities
of that Series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (or premium, if any) or
interest, if any, so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.


                                       8
<PAGE>   12
             SECTION 5.02. Limitation on Sale/Leaseback Transactions.

             The Guarantor shall not, and shall not permit any Restricted
Subsidiary to, enter into any Sale/ Leaseback Transaction unless (i) the
Guarantor or such Restricted Subsidiary would be entitled to create a Lien on
such property securing Indebtedness in an amount equal to the Attributable Debt
with respect to such transaction without equally and ratably securing the
Securities pursuant to Section 5.03 or (ii) the net proceeds of such sale are at
least equal to the fair value (as determined by the Board of Directors) of such
property or asset and the Guarantor or such Restricted Subsidiary shall apply or
cause to be applied an amount in cash equal to the net proceeds of such sale to
the retirement, within 180 days of the effective date of any such arrangement,
of Indebtedness of the Guarantor or any Restricted Subsidiary; provided,
however, that in addition to the transactions permitted pursuant to the
foregoing clauses (i) and (ii), the Guarantor or any Restricted Subsidiary may
enter into a Sale/Leaseback Transaction as long as the sum of (x) the
Attributable Debt with respect to such Sale/Leaseback Transaction and all other
Sale/Leaseback Transactions entered into pursuant to this proviso plus (y) the
amount of outstanding Indebtedness secured by Liens Incurred pursuant to the
final proviso to Section 5.03 does not exceed 15% of Consolidated Net Tangible
Assets as determined based on the consolidated balance sheet of the Guarantor as
of the end of the most recent fiscal quarter for which financial statements are
available; and provided, further, that a Restricted Subsidiary may enter into a
Sale/Leaseback Transaction with respect to property or assets owned by such
Restricted Subsidiary, the proceeds of which are used to explore, drill,
develop, construct, purchase, repair, improve or add to property or assets of
any Restricted Subsidiary, or to repay (within 365 days of the commencement of
full commercial operation of any such property) Indebtedness Incurred to
explore, drill, develop, construct, purchase, repair, improve or add to property
or assets of any Restricted Subsidiary.

            SECTION 5.03. Limitation on Liens.

             The Guarantor shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, incur any Lien on any of its properties
or assets (including Capital Stock), whether owned at the date of issuance of
any Series of Securities pursuant to the Indenture or thereafter acquired, in
each case to secure Indebtedness of the Guarantor or any Restricted Subsidiary,
other than (a)(1) Liens incurred by the Guarantor or any Restricted Subsidiary
securing Indebtedness Incurred by the Guarantor or such Restricted Subsidiary,
as the case may be, to finance the exploration, drilling, development,
construction or purchase of or by, or repairs, improvements or additions to,
property or assets of the Guarantor or such Restricted Subsidiary, as the case
may be, which Liens may include Liens on the Capital Stock of such Restricted
Subsidiary or (2) Liens incurred by any Restricted Subsidiary that does not own,
directly or indirectly, at the time of such original incurrence of such Lien
under this clause (2) any operating properties or assets, securing Indebtedness
Incurred to finance the exploration, drilling, development, construction or
purchase of or by, or repairs, improvements or additions to, property or assets
of any Restricted Subsidiary that does not, directly or indirectly, own any
operating properties or assets at the time of such original incurrence of such
Lien, which Liens may include Liens on the Capital Stock of one or more
Restricted Subsidiaries that do not, directly or indirectly, own any operating
properties or assets at the time of such original incurrence of such Lien,
provided, however, that the Indebtedness secured by any such Lien may not be
issued more than 365 days after the later of the exploration, drilling,
development,


                                       9
<PAGE>   13
completion of construction, purchase, repair, improvement, addition or
commencement of full commercial operation of the property or assets being so
financed; (b) Liens existing on the date of the issuance of such series of
Securities (other than Liens relating to Indebtedness or other obligations being
repaid or Liens that are otherwise extinguished with the proceeds of any
offering of Securities pursuant to this Indenture); (c) Liens on property,
assets or shares of stock of a Person at the time such Person becomes a
Subsidiary; provided, however, that any such Lien may not extend to any other
property or assets owned by the Guarantor or any Restricted Subsidiary; (d)
Liens on property or assets at the time the Guarantor or a Subsidiary acquires
the property or asset, including any acquisition by means of a merger or
consolidation with or into the Guarantor or a Subsidiary; provided, however,
that such Liens are not incurred in connection with, or in contemplation of,
such merger or consolidation; and provided, further, that the Lien may not
extend to any other property or asset owned by the Guarantor or any Restricted
Subsidiary; (e) Liens securing Indebtedness or other obligations of a Subsidiary
owing to the Guarantor or a Restricted Subsidiary or of the Guarantor owing to a
Subsidiary; (f) Liens incurred on assets that are the subject of a Capitalized
Lease Obligation to which the Guarantor or a Subsidiary is a party, which shall
include, Liens on the stock or other ownership interest in one or more
Restricted Subsidiaries leasing such assets; (g) Liens to secure any
refinancing, refunding, extension, renewal or replacement (or successive
refinancings, refundings, extensions, renewals or replacements) as a whole, or
in part, of any Indebtedness secured by any Lien referred to in the foregoing
clauses (a), (b), (c), (d) and (f), provided, however, that (x) such new Lien
shall be limited to all or part of the same property or assets that secured the
original Lien (plus repairs, improvements or additions to such property or
assets and Liens on the stock or other ownership interest in one or more
Restricted Subsidiaries beneficially owning such property or assets) and (y) the
amount of the Indebtedness secured by such Lien at such time (or, if the amount
that may be realized in respect of such Lien is limited, by contract or
otherwise, such limited lesser amount) is not increased (other than by an amount
necessary to pay fees and expenses, including premiums, related to the
refinancing, refunding, extension, renewal or replacement of such Indebtedness);
and (h) Liens by which the Securities are secured equally and ratably with other
Indebtedness pursuant to this Section 5.03; in any such case without effectively
providing that the Securities shall be secured equally and ratably with (or
prior to) the obligations so secured for so long as such obligations are so
secured; provided, however, that the Guarantor or a Restricted Subsidiary may
Incur other Liens to secure outstanding Indebtedness as long as the sum of (x)
the lesser of (A) the amount of outstanding Indebtedness secured by Liens
Incurred pursuant to this proviso (or, if the amount that may be realized in
respect of such Lien is limited, by contract or otherwise, such limited lesser
amount) and (B) the fair value (as determined by the Board of Directors) of the
property securing such item of Indebtedness, plus (y) the Attributable Debt with
respect to all Sale/Leaseback Transactions entered into pursuant to the first
proviso to Section 5.02 does not exceed 15% of Consolidated Net Tangible Assets
as determined based on the Consolidated balance sheet of the Guarantor as of the
end of the most recent fiscal quarter for which financial statements are
available.

            SECTION 5.04. Waiver of Certain Covenants.

            The Guarantor may omit in any particular instance to comply with any
covenant or condition set forth in Sections 5.02 and 5.03, inclusive, if before
or after the time for such compliance the Holders of at least 50% in principal
amount of the Securities of each Series at the time outstanding, shall either
waive such compliance in such instance or generally waive


                                       10
<PAGE>   14
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Guarantor
and the duties of the Trustee in respect of any such covenant or condition shall
remain in full force and effect.

            SECTION 5.05. Reports by Guarantor.

            (a) The Guarantor shall file with the Trustee, within 15 days after
the Guarantor is required to file the same with the SEC, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may from time to time by rules and
regulations prescribe) which the Guarantor is required to file with the SEC
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended and shall otherwise comply with Section 314(a) of the Trust Indenture
Act.

            (b) The Guarantor shall furnish to the Trustee, within 120
days after the end of each fiscal year, a brief certificate from the principal
executive officer, principal financial officer or principal accounting officer
as to his or her knowledge of the Guarantor's compliance with all conditions and
covenants under this Agreement. For purposes of this paragraph (b), such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Agreement or the Indenture.

                                   ARTICLE SIX

                                  MISCELLANEOUS

            SECTION 6.01. Trust Indenture Act.

            The Guarantor understands that this Agreement is to be qualified
under the TIA and any provision of the Indenture required by the TIA is hereby
incorporated by reference. If any provision of this Agreement limits, qualifies
or conflicts with the duties imposed by any of TIA Sections 310 to 317,
inclusive, through operation of TIA Section 318(c), such imposed duties shall
control. If any provision of this Agreement modifies or excludes any provision
of the TIA that may be so modified or excluded, the latter provision shall be
deemed to apply to this Agreement as so modified or to be excluded, as the case
may be.

            SECTION 6.02. Effect of Headings and Table of Contents.

            The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.

            SECTION 6.03. Successors and Assigns.

            All covenants and agreements in this Agreement by the Guarantor
shall bind its successors and assigns, whether so expressed or not.


                                       11
<PAGE>   15
            SECTION 6.04. Separability Clause.

            In case any provision in this Agreement or in the Guarantee shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

            SECTION 6.05. Benefits of Agreement.

            Nothing in this Agreement or in the Guarantee, express or implied,
shall give to any Person, other the Guarantor and its successors hereunder and
the Holders of Securities, any benefit or any legal or equitable right, remedy
or claim under this Agreement.

            SECTION 6.06. Governing Law.

            This Agreement and the Guarantee shall be governed by and construed
in accordance with the laws of the State of New York.

            SECTION 6.07. Notices, Etc., to the Guarantor.

            Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Agreement to be made upon, given or furnished to, or filed with the Guarantor by
the Trustee or by any Holder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Guarantor addressed to it at the address of
its principal office specified in the first paragraph of this Agreement or at
any other address previously furnished in writing to the Trustee by the
Guarantor, Attention: Assistant Treasurer; provided, however, that any failure
to provide such notice to the Guarantor shall not release the Guarantor from its
guarantee obligations hereunder. Notices to the Trustee shall be given as
provided in the Indenture.


                                       12
<PAGE>   16
            IN WITNESS WHEREOF, the Guarantor has duly executed this Agreement
as of the date first above written.

                                             CALPINE CORPORATION, as Guarantor


                                             By:
                                                   Name:
                                                   Title:

Agreed and Accepted:

WILMINGTON TRUST COMPANY,
    as Trustee under the Indenture


By:
      Name:
      Title:


                                       13
<PAGE>   17
                                                                       EXHIBIT A

                                FORM OF GUARANTEE

            For value received, CALPINECORPORATION, a Delaware corporation
(including any successor under the Guarantee Agreement referred to in the
Security upon which this Guarantee is endorsed, the "Guarantor") hereby
unconditionally guarantees to the Holder of the Security upon which this
Guarantee is endorsed, and to the Trustee and its successors and assigns on
behalf of such Holder, that: the principal of, premium thereon (if any) and
interest on such Security will be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise, and
interest on the overdue principal and interest on any overdue interest on such
Security and all other obligations of the Company to the Holder of such Security
or the Trustee or under the Indenture will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof.

            The Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Security upon which this Guarantee is endorsed or of the Indenture, the absence
of any action to enforce the same, any waiver or consent by the Holder of such
Security or the Trustee with respect to any provisions hereof or of the
Indenture, the Guarantee Agreement or the Securities, the recovery of any
judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of the Guarantor.

            The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in the Indenture and the Security upon which this Guarantee is
endorsed. This is a guarantee of payment and not of collection.

            If the Holder of such Security or the Trustee is required by any
court or otherwise to return to the Company or the Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or the Guarantor, any amount paid by the Company or the Guarantor to the Trustee
or such Holder, the Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.

            The Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of the Guarantor's
obligations under the Guarantee or the Indenture, including, without limitation,
any right of subrogation, shall be subject and subordinate to, and no payment
with respect to any such claim of the Guarantor shall be made before, the
payment in full in cash of the Security upon which this Guarantee is endorsed in
accordance with the provisions provided therefor in the Indenture.

            All capitalized terms used without definition in this Guarantee
shall have the respective meanings assigned to such terms in the Guarantee
Agreement.


                                       A-1
<PAGE>   18
            This Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Security upon which this
Guarantee is endorsed shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.

                                             CALPINE CORPORATION

                                             By:
                                                   Name:
                                                   Title:

                                      A-2
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>5
<FILENAME>f70590a1ex5-1.txt
<DESCRIPTION>EXHIBIT 5.1
<TEXT>

<PAGE>   1

                                                                     Exhibit 5.1

                       [Letterhead of Covington & Burling]







                                                                  April 19, 2001



Calpine Corporation
50 West San Fernando Street
San Jose, California  95113


Calpine Canada Energy Finance ULC
Suite 800, Purdy's Wharf, Tower 1
1959 Upper Water Street
P.O. Box 997
Halifax, Nova Scotia B3J 3N2


Ladies and Gentlemen:

          In connection with the registration under the Securities Act of 1933,
as amended (the "Act"), pursuant to the Registration Statement on Form S-3 (File
No. 333-57338) (the "Registration Statement") filed with the Securities and
Exchange Commission on March 21, 2001, as amended on April 19, 2001, with
respect to (a) $1,500,000,000 in aggregate principal amount of the debt
securities (the "Securities") of Calpine Canada Energy Finance ULC (the
"Company"), and (b) the associated guarantees issued by Calpine Corporation
("Calpine") with respect to such Securities (the "Guarantees"), we have reviewed
such corporate records, certificates and other documents, and such questions of
law, as we have considered necessary or appropriate for the purposes of this
opinion.

          We have assumed that all signatures are genuine, that all documents
submitted to us as originals are authentic and that all copies of documents
submitted to us conform to the originals, and we have also assumed that the
Company is duly organized and has duly authorized, executed and delivered the
Securities under the laws of the jurisdiction of its organization.

<PAGE>   2


Calpine Corporation
Calpine Canada Energy Finance ULC
April 19, 2001
Page 2



     Based upon the foregoing, and subject to the qualifications set forth
below, we are of the opinion that the Guarantees have been duly authorized by
Calpine and, when the Securities and Guarantees are issued in accordance with
the terms of, respectively, (a) the Indenture to be dated as of April 25, 2001,
between Company and Wilmington Trust Company as Trustee, governing the
Securities and (b) the Guarantee Agreement to be made by Calpine as of April 25,
2001, governing the Guarantee and assuming compliance with the Act, the
Securities and the Guarantees will be valid and binding obligations of the
Company and the Guarantor, respectively, in accordance with their respective
terms.

     The  foregoing opinion is subject to the qualifications that we express no
opinion as to (a) waivers of defenses or statutory or constitutional rights or
waivers of unmatured claims or rights, (b) rights to indemnification,
contribution or exculpation to the extent that they purport to indemnify any
party against, or release or limit any party's liability for, its own breach or
failure to comply with statutory obligations, or to the extent such provisions
are contrary to public policy, or (c) rights to collection of liquidated damages
or penalties on overdue or defaulted obligations.

     We are members of the bar of the State of New York. We do not purport to
be experts in, and do not express any opinion on, any laws other than the law of
the State of New York, the Delaware General Corporation Law and the Federal law
of the United States of America.

     We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm under the heading "Legal
Matters" in the Prospectus contained in the Registration Statement. In giving
such consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Act.

                                  Very truly yours,



                                  /s/ COVINGTON & BURLING



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.1
<SEQUENCE>6
<FILENAME>f70590a1ex8-1.txt
<DESCRIPTION>EXHIBIT 8.1
<TEXT>

<PAGE>   1
                                                                     Exhibit 8.1

                      [Letterhead of Covington & Burling]







                                                                  April 19, 2001



Calpine Corporation
50 West San Fernando Street
San Jose, CA 95113

Calpine Canada Energy Finance ULC
Suite 800, Purdy's Wharf, Tower 1
1959 Upper Water Street
P.O. Box 997
Halifax, Nova Scotia B3J 3N2



Ladies and Gentlemen:

     We have acted as your United States tax counsel in connection with the
registration under the Securities Act of 1933, as amended (the "Act"), pursuant
to the Registration Statement on Form S-3 (File No. 333-57338) (the
"Registration Statement") filed with the Securities and Exchange Commission on
March 21, 2001, as amended on April 19, 2001, with respect to $1,500,000,000 in
aggregate principal amount of the debt securities (the "Securities") of Calpine
Canada Energy Finance ULC (the "Company"), and associated guarantees issued by
Calpine Corporation with respect to such Securities, to be issued pursuant to
the Prospectus Supplement to be dated April 19, 2001, and the related
Prospectus to be dated April 19, 2001, each to be filed with the Securities and
Exchange Commission pursuant to Rule 424(a) under the Act ("the Prospectus and
related Prospectus Supplement").

     We have reviewed such corporate records, certificates and other
documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion. We have assumed that all
signatures are genuine, that all documents submitted to us as originals are
authentic and that all copies of documents submitted to us conform to the
originals.

<PAGE>   2
Calpine Corporation
Calpine Canada Energy Finance ULC
April 19, 2001
Page 2


     Based upon and subject to the foregoing, the statements in, respectively,
the Prospectus and the related Prospectus Supplement under the captions "Certain
United States Federal Income Tax Consequences--Taxation of Debt Securities" and
"Certain United States Federal Income Tax Considerations--Taxation of Debt
Securities" represent our opinion of the United States federal income tax law
matters referred to therein and such statements are (subject to the
qualifications and other matters stated therein) accurate with respect to the
Securities in all material respects.

     The foregoing opinion is based on the Internal Revenue Code of 1986, as
amended, Treasury Regulations promulgated thereunder, Internal Revenue Service
rulings and pronouncements, and judicial decisions now in effect, any of which
may be changed at any time with retroactive effect.

     We are members of the bar of the State of New York. We do not express any
opinion on any matters other than the United States federal income tax law
matters specifically referred to herein.

     We hereby consent to the filing of this opinion as Exhibit 8.1 to the
Registration Statement. In giving such consent, we do not hereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act.

                                         Very truly yours,


                                         /s/ COVINGTON & BURLING
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.2
<SEQUENCE>7
<FILENAME>f70590a1ex8-2.txt
<DESCRIPTION>EXHIBIT 8.2
<TEXT>

<PAGE>   1
                                                                     Exhibit 8.2



                        [Letterhead of Bennett Jones LLP]


                                                                  April 19, 2001



Calpine Canada Energy Finance ULC
50 West San Fernando Street
San Jose, California 95113

Calpine Canada Energy Finance ULC
Suite 800, Purdy's Wharf, Tower 1
1959 Upper Water Street
P.O. Box 997
Halifax, Nova Scotia B3J 3N2



Dear Sirs:

     We have acted as special Canadian tax counsel to Calpine Corporation and
Calpine Canada Energy Finance ULC ("Calpine Finance") in connection with the
proposed issuance by Calpine Finance of US$1,500,000,000 of Senior Notes (the
"Notes"), which are to be irrevocably and unconditionally guaranteed by Calpine
Corporation. As requested, we are rendering our opinion with respect to certain
Canadian federal income tax consequences to original purchasers of the Notes.
For the purpose of providing our opinion, we have reviewed, and our opinion is
based upon, the following documents:

     (a) the Registration Statement on Form S-3 (the "Registration Statement"),
which was initially filed with the Securities and Exchange Commission (the
"SEC") on March 21, 2001;

     (b) the amended Registration Statement (the "Amended Registration
Statement"), which is to be filed with the SEC on April 19, 2001;

     (c) the preliminary Prospectus Supplement, which is to be dated April 19,
2001, and to be filed with the SEC on April 19, 2001; and

     (d) the forms of Indenture and Guarantee Agreement which are to be filed
as exhibits to the Amended Registration Statement.

     Our opinion is based on the current provisions of the Income Tax Act
(Canada) (the "ITA") and the regulations thereunder, our understanding of the
current assessing and administrative practices of the Canada Customs and Revenue
Agency (the "CCRA") and all specific proposals to amend the ITA and the
regulations thereunder which have been publicly announced by the Minister of
Finance (Canada) before the date hereof. Our opinion does not otherwise take
into account or anticipate changes in the law or in the assessment and
administrative practices of the CCRA, whether by judicial, governmental or
legislative decision or action, and does not take into account tax legislation
or considerations of any province or territory of Canada or any jurisdiction
other than Canada. We assume that the obligations contained in the operative
documents which pertain to the Notes, and which are contemplated by the
Registration Statement, will be performed in accordance with the terms described
therein.

<PAGE>   2
 Based on the foregoing and subject to the assumptions, qualifications and
limitations contained therein, we hereby confirm our opinion contained in the
preliminary Prospectus Supplement under the caption "Certain Canadian Federal
Income Tax Considerations."

     We have not considered, and render no opinion on, any aspect of law other
than as expressly set forth above.

     We hereby consent to the filing of this opinion as Exhibit 8.2 to the
Amended Registration Statement. In giving such consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended.



                                         Yours very truly,

                                         /s/ Bennett Jones LLP
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>8
<FILENAME>f70590a1ex23-1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 23.1

                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated March 14, 2001
included in Calpine Corporation's Form 10-K for the year ended December 31, 2000
and to all references to our Firm included in this Registration Statement.


San Jose, California
April 18, 2001
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.2
<SEQUENCE>9
<FILENAME>f70590a1ex25-2.txt
<DESCRIPTION>EXHIBIT 25.2
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 25.2



                                                                Registration No.
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM T-1

         STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
                  OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2)  [X]


                            WILMINGTON TRUST COMPANY
               (Exact name of trustee as specified in its charter)


        Delaware                                           51-0055023
(State of incorporation)                    (I.R.S. employer identification no.)

                               Rodney Square North
                            1100 North Market Street
                           Wilmington, Delaware 19890
                    (Address of principal executive offices)

                               Cynthia L. Corliss
                        Vice President and Trust Counsel
                            Wilmington Trust Company
                               Rodney Square North
                           Wilmington, Delaware 19890
                                 (302) 651-8516
            (Name, address and telephone number of agent for service)


                        CALPINE CANADA ENERGY FINANCE ULC
               (Exact name of obligor as specified in its charter)

        Nova Scotia                                      88-2274012
(State of incorporation)                    (I.R.S. employer identification no.)

    50 West San Fernando Street
         San Jose, California                             95113
(Address of principal executive offices)                (Zip Code)


              Debt Securities of Calpine Canada Energy Finance ULC
                       (Title of the indenture securities)

<PAGE>   2
ITEM 1.   GENERAL INFORMATION.

                Furnish the following information as to the trustee:

        (a)     Name and address of each examining or supervising authority to
                which it is subject.

                Federal Deposit Insurance Co.        State Bank Commissioner
                Five Penn Center                     Dover, Delaware
                Suite #2901
                Philadelphia, PA

          (b)   Whether it is authorized to exercise corporate trust powers.

                The trustee is authorized to exercise corporate trust powers.

ITEM 2.   AFFILIATIONS WITH THE OBLIGOR.

                If the obligor is an affiliate of the trustee, describe each
        affiliation:

                Based upon an examination of the books and records of the
          trustee and upon information furnished by the obligor, the obligor is
          not an affiliate of the trustee.

ITEM 3.  LIST OF EXHIBITS.

                List below all exhibits filed as part of this Statement of
        Eligibility and Qualification.

          A.    Copy of the Charter of Wilmington Trust Company, which includes
                the certificate of authority of Wilmington Trust Company to
                commence business and the authorization of Wilmington Trust
                Company to exercise corporate trust powers.
          B.    Copy of By-Laws of Wilmington Trust Company.
          C.    Consent of Wilmington Trust Company required by Section 321(b)
                of Trust Indenture Act.
          D.    Copy of most recent Report of Condition of Wilmington Trust
                Company.

          Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 17th day
of April, 2001.


                                       WILMINGTON TRUST COMPANY
[SEAL]

Attest: /s/ David C. Roulston          By: /s/ Michael A. DiGregorio
       ------------------------------     --------------------------------------
       Assistant Secretary             Name: Michael A. DiGregorio
                                       Title:  Vice President



                                        2

<PAGE>   3
                                    EXHIBIT A

                                 AMENDED CHARTER

                            WILMINGTON TRUST COMPANY

                              WILMINGTON, DELAWARE

                           AS EXISTING ON MAY 9, 1987


<PAGE>   4
                                 AMENDED CHARTER

                                       OR

                              ACT OF INCORPORATION

                                       OF

                            WILMINGTON TRUST COMPANY

          WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:

          FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.

          SECOND: - The location of its principal office in the State of
          Delaware is at Rodney Square North, in the City of Wilmington, County
          of New Castle; the name of its resident agent is WILMINGTON TRUST
          COMPANY whose address is Rodney Square North, in said City. In
          addition to such principal office, the said corporation maintains and
          operates branch offices in the City of Newark, New Castle County,
          Delaware, the Town of Newport, New Castle County, Delaware, at
          Claymont, New Castle County, Delaware, at Greenville, New Castle
          County Delaware, and at Milford Cross Roads, New Castle County,
          Delaware, and shall be empowered to open, maintain and operate branch
          offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
          Street, and 3605 Market Street, all in the City of Wilmington, New
          Castle County, Delaware, and such other branch offices or places of
          business as may be authorized from time to time by the agency or
          agencies of the government of the State of Delaware empowered to
          confer such authority.

          THIRD: - (a) The nature of the business and the objects and purposes
          proposed to be transacted, promoted or carried on by this Corporation
          are to do any or all of the things herein mentioned as fully and to
          the same extent as natural persons might or could do and in any part
          of the world, viz.:

                (1) To sue and be sued, complain and defend in any Court of law
                or equity and to make and use a common seal, and alter the seal
                at pleasure, to hold, purchase, convey, mortgage or otherwise
                deal in real and personal estate and property, and to appoint
                such officers and agents as the business of the Corporation
                shall require, to make by-laws not inconsistent with the
                Constitution or laws of the United States or of this State, to
                discount bills, notes or other evidences of debt,



                                       2
<PAGE>   5
                to receive deposits of money, or securities for money, to buy
                gold and silver bullion and foreign coins, to buy and sell bills
                of exchange, and generally to use, exercise and enjoy all the
                powers, rights, privileges and franchises incident to a
                corporation which are proper or necessary for the transaction of
                the business of the Corporation hereby created.

                (2) To insure titles to real and personal property, or any
                estate or interests therein, and to guarantee the holder of such
                property, real or personal, against any claim or claims, adverse
                to his interest therein, and to prepare and give certificates of
                title for any lands or premises in the State of Delaware, or
                elsewhere.

                (3) To act as factor, agent, broker or attorney in the receipt,
                collection, custody, investment and management of funds, and the
                purchase, sale, management and disposal of property of all
                descriptions, and to prepare and execute all papers which may be
                necessary or proper in such business.

                (4) To prepare and draw agreements, contracts, deeds, leases,
                conveyances, mortgages, bonds and legal papers of every
                description, and to carry on the business of conveyancing in all
                its branches.

                (5) To receive upon deposit for safekeeping money, jewelry,
                plate, deeds, bonds and any and all other personal property of
                every sort and kind, from executors, administrators, guardians,
                public officers, courts, receivers, assignees, trustees, and
                from all fiduciaries, and from all other persons and
                individuals, and from all corporations whether state, municipal,
                corporate or private, and to rent boxes, safes, vaults and other
                receptacles for such property.

                (6) To act as agent or otherwise for the purpose of registering,
                issuing, certificating, countersigning, transferring or
                underwriting the stock, bonds or other obligations of any
                corporation, association, state or municipality, and may receive
                and manage any sinking fund therefor on such terms as may be
                agreed upon between the two parties, and in like manner may act
                as Treasurer of any corporation or municipality.

                (7) To act as Trustee under any deed of trust, mortgage, bond or
                other instrument issued by any state, municipality, body
                politic, corporation, association or person, either alone or in
                conjunction with any other person or persons, corporation or
                corporations.

                (8) To guarantee the validity, performance or effect of any
                contract or agreement, and the fidelity of persons holding
                places of responsibility or trust; to become surety for any
                person, or persons, for the faithful performance of any trust,
                office, duty, contract or agreement, either by itself or in
                conjunction with any other person, or persons, corporation, or
                corporations, or in like manner



                                       2
<PAGE>   6

                become surety upon any bond, recognizance, obligation, judgment,
                suit, order, or decree to be entered in any court of record
                within the State of Delaware or elsewhere, or which may now or
                hereafter be required by any law, judge, officer or court in the
                State of Delaware or elsewhere.

                (9) To act by any and every method of appointment as trustee,
                trustee in bankruptcy, receiver, assignee, assignee in
                bankruptcy, executor, administrator, guardian, bailee, or in any
                other trust capacity in the receiving, holding, managing, and
                disposing of any and all estates and property, real, personal or
                mixed, and to be appointed as such trustee, trustee in
                bankruptcy, receiver, assignee, assignee in bankruptcy,
                executor, administrator, guardian or bailee by any persons,
                corporations, court, officer, or authority, in the State of
                Delaware or elsewhere; and whenever this Corporation is so
                appointed by any person, corporation, court, officer or
                authority such trustee, trustee in bankruptcy, receiver,
                assignee, assignee in bankruptcy, executor, administrator,
                guardian, bailee, or in any other trust capacity, it shall not
                be required to give bond with surety, but its capital stock
                shall be taken and held as security for the performance of the
                duties devolving upon it by such appointment.

                (10) And for its care, management and trouble, and the exercise
                of any of its powers hereby given, or for the performance of any
                of the duties which it may undertake or be called upon to
                perform, or for the assumption of any responsibility the said
                Corporation may be entitled to receive a proper compensation.

                (11) To purchase, receive, hold and own bonds, mortgages,
                debentures, shares of capital stock, and other securities,
                obligations, contracts and evidences of indebtedness, of any
                private, public or municipal corporation within and without the
                State of Delaware, or of the Government of the United States, or
                of any state, territory, colony, or possession thereof, or of
                any foreign government or country; to receive, collect, receipt
                for, and dispose of interest, dividends and income upon and from
                any of the bonds, mortgages, debentures, notes, shares of
                capital stock, securities, obligations, contracts, evidences of
                indebtedness and other property held and owned by it, and to
                exercise in respect of all such bonds, mortgages, debentures,
                notes, shares of capital stock, securities, obligations,
                contracts, evidences of indebtedness and other property, any and
                all the rights, powers and privileges of individual owners
                thereof, including the right to vote thereon; to invest and deal
                in and with any of the moneys of the Corporation upon such
                securities and in such manner as it may think fit and proper,
                and from time to time to vary or realize such investments; to
                issue bonds and secure the same by pledges or deeds of trust or
                mortgages of or upon the whole or any part of the property held
                or owned by the Corporation, and to sell and pledge such bonds,
                as and when the Board of Directors shall determine, and in the
                promotion of its said corporate business of investment and to
                the extent authorized by law, to lease, purchase, hold, sell,
                assign, transfer, pledge, mortgage and convey real



                                       3
<PAGE>   7

                and personal property of any name and nature and any estate or
                interest therein.

        (b) In furtherance of, and not in limitation, of the powers conferred by
        the laws of the State of Delaware, it is hereby expressly provided that
        the said Corporation shall also have the following powers:

                (1) To do any or all of the things herein set forth, to the same
                extent as natural persons might or could do, and in any part of
                the world.

                (2) To acquire the good will, rights, property and franchises
                and to undertake the whole or any part of the assets and
                liabilities of any person, firm, association or corporation, and
                to pay for the same in cash, stock of this Corporation, bonds or
                otherwise; to hold or in any manner to dispose of the whole or
                any part of the property so purchased; to conduct in any lawful
                manner the whole or any part of any business so acquired, and to
                exercise all the powers necessary or convenient in and about the
                conduct and management of such business.

                (3) To take, hold, own, deal in, mortgage or otherwise lien, and
                to lease, sell, exchange, transfer, or in any manner whatever
                dispose of property, real, personal or mixed, wherever situated.

                (4) To enter into, make, perform and carry out contracts of
                every kind with any person, firm, association or corporation,
                and, without limit as to amount, to draw, make, accept, endorse,
                discount, execute and issue promissory notes, drafts, bills of
                exchange, warrants, bonds, debentures, and other negotiable or
                transferable instruments.

                (5) To have one or more offices, to carry on all or any of its
                operations and businesses, without restriction to the same
                extent as natural persons might or could do, to purchase or
                otherwise acquire, to hold, own, to mortgage, sell, convey or
                otherwise dispose of, real and personal property, of every class
                and description, in any State, District, Territory or Colony of
                the United States, and in any foreign country or place.

                (6) It is the intention that the objects, purposes and powers
                specified and clauses contained in this paragraph shall (except
                where otherwise expressed in said paragraph) be nowise limited
                or restricted by reference to or inference from the terms of any
                other clause of this or any other paragraph in this charter, but
                that the objects, purposes and powers specified in each of the
                clauses of this paragraph shall be regarded as independent
                objects, purposes and powers.

        FOURTH: - (a) The total number of shares of all classes of stock which
        the Corporation shall have authority to issue is forty-one million
        (41,000,000) shares, consisting of:

                (1) One million (1,000,000) shares of Preferred stock, par value
                $10.00 per



                                       4
<PAGE>   8

                share (hereinafter referred to as "Preferred Stock"); and

                (2) Forty million (40,000,000) shares of Common Stock, par value
                $1.00 per share (hereinafter referred to as "Common Stock").

        (b) Shares of Preferred Stock may be issued from time to time in one or
        more series as may from time to time be determined by the Board of
        Directors each of said series to be distinctly designated. All shares of
        any one series of Preferred Stock shall be alike in every particular,
        except that there may be different dates from which dividends, if any,
        thereon shall be cumulative, if made cumulative. The voting powers and
        the preferences and relative, participating, optional and other special
        rights of each such series, and the qualifications, limitations or
        restrictions thereof, if any, may differ from those of any and all other
        series at any time outstanding; and, subject to the provisions of
        subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of
        Directors of the Corporation is hereby expressly granted authority to
        fix by resolution or resolutions adopted prior to the issuance of any
        shares of a particular series of Preferred Stock, the voting powers and
        the designations, preferences and relative, optional and other special
        rights, and the qualifications, limitations and restrictions of such
        series, including, but without limiting the generality of the foregoing,
        the following:

                (1) The distinctive designation of, and the number of shares of
                Preferred Stock which shall constitute such series, which number
                may be increased (except where otherwise provided by the Board
                of Directors) or decreased (but not below the number of shares
                thereof then outstanding) from time to time by like action of
                the Board of Directors;

                (2) The rate and times at which, and the terms and conditions on
                which, dividends, if any, on Preferred Stock of such series
                shall be paid, the extent of the preference or relation, if any,
                of such dividends to the dividends payable on any other class or
                classes, or series of the same or other class of stock and
                whether such dividends shall be cumulative or non-cumulative;

                (3) The right, if any, of the holders of Preferred Stock of such
                series to convert the same into or exchange the same for, shares
                of any other class or classes or of any series of the same or
                any other class or classes of stock of the Corporation and the
                terms and conditions of such conversion or exchange;

                (4) Whether or not Preferred Stock of such series shall be
                subject to redemption, and the redemption price or prices and
                the time or times at which, and the terms and conditions on
                which, Preferred Stock of such series may be redeemed.

                (5) The rights, if any, of the holders of Preferred Stock of
                such series upon the voluntary or involuntary liquidation,
                merger, consolidation, distribution or sale of assets,
                dissolution or winding-up, of the Corporation.



                                       5
<PAGE>   9

                (6) The terms of the sinking fund or redemption or purchase
                account, if any, to be provided for the Preferred Stock of such
                series; and

                (7) The voting powers, if any, of the holders of such series of
                Preferred Stock which may, without limiting the generality of
                the foregoing include the right, voting as a series or by itself
                or together with other series of Preferred Stock or all series
                of Preferred Stock as a class, to elect one or more directors of
                the Corporation if there shall have been a default in the
                payment of dividends on any one or more series of Preferred
                Stock or under such circumstances and on such conditions as the
                Board of Directors may determine.

        (c) (1) After the requirements with respect to preferential dividends on
        the Preferred Stock (fixed in accordance with the provisions of section
        (b) of this Article FOURTH), if any, shall have been met and after the
        Corporation shall have complied with all the requirements, if any, with
        respect to the setting aside of sums as sinking funds or redemption or
        purchase accounts (fixed in accordance with the provisions of section
        (b) of this Article FOURTH), and subject further to any conditions which
        may be fixed in accordance with the provisions of section (b) of this
        Article FOURTH, then and not otherwise the holders of Common Stock shall
        be entitled to receive such dividends as may be declared from time to
        time by the Board of Directors.

                (2) After distribution in full of the preferential amount, if
                any, (fixed in accordance with the provisions of section (b) of
                this Article FOURTH), to be distributed to the holders of
                Preferred Stock in the event of voluntary or involuntary
                liquidation, distribution or sale of assets, dissolution or
                winding- up, of the Corporation, the holders of the Common Stock
                shall be entitled to receive all of the remaining assets of the
                Corporation, tangible and intangible, of whatever kind available
                for distribution to stockholders ratably in proportion to the
                number of shares of Common Stock held by them respectively.

                (3) Except as may otherwise be required by law or by the
                provisions of such resolution or resolutions as may be adopted
                by the Board of Directors pursuant to section (b) of this
                Article FOURTH, each holder of Common Stock shall have one vote
                in respect of each share of Common Stock held on all matters
                voted upon by the stockholders.

        (d) No holder of any of the shares of any class or series of stock or of
        options, warrants or other rights to purchase shares of any class or
        series of stock or of other securities of the Corporation shall have any
        preemptive right to purchase or subscribe for any unissued stock of any
        class or series or any additional shares of any class or series to be
        issued by reason of any increase of the authorized capital stock of the
        Corporation of any class or series, or bonds, certificates of
        indebtedness, debentures or other securities convertible into or
        exchangeable for stock of the Corporation of any class or series, or
        carrying any right to purchase stock of any class or series, but any
        such unissued stock, additional authorized issue of shares of any class
        or series of stock



                                       6
<PAGE>   10

        or securities convertible into or exchangeable for stock, or carrying
        any right to purchase stock, may be issued and disposed of pursuant to
        resolution of the Board of Directors to such persons, firms,
        corporations or associations, whether such holders or others, and upon
        such terms as may be deemed advisable by the Board of Directors in the
        exercise of its sole discretion.

        (e) The relative powers, preferences and rights of each series of
        Preferred Stock in relation to the relative powers, preferences and
        rights of each other series of Preferred Stock shall, in each case, be
        as fixed from time to time by the Board of Directors in the resolution
        or resolutions adopted pursuant to authority granted in section (b) of
        this Article FOURTH and the consent, by class or series vote or
        otherwise, of the holders of such of the series of Preferred Stock as
        are from time to time outstanding shall not be required for the issuance
        by the Board of Directors of any other series of Preferred Stock whether
        or not the powers, preferences and rights of such other series shall be
        fixed by the Board of Directors as senior to, or on a parity with, the
        powers, preferences and rights of such outstanding series, or any of
        them; provided, however, that the Board of Directors may provide in the
        resolution or resolutions as to any series of Preferred Stock adopted
        pursuant to section (b) of this Article FOURTH that the consent of the
        holders of a majority (or such greater proportion as shall be therein
        fixed) of the outstanding shares of such series voting thereon shall be
        required for the issuance of any or all other series of Preferred Stock.

        (f) Subject to the provisions of section (e), shares of any series of
        Preferred Stock may be issued from time to time as the Board of
        Directors of the Corporation shall determine and on such terms and for
        such consideration as shall be fixed by the Board of Directors.

        (g) Shares of Common Stock may be issued from time to time as the Board
        of Directors of the Corporation shall determine and on such terms and
        for such consideration as shall be fixed by the Board of Directors.

        (h) The authorized amount of shares of Common Stock and of Preferred
        Stock may, without a class or series vote, be increased or decreased
        from time to time by the affirmative vote of the holders of a majority
        of the stock of the Corporation entitled to vote thereon.

        FIFTH: - (a) The business and affairs of the Corporation shall be
        conducted and managed by a Board of Directors. The number of directors
        constituting the entire Board shall be not less than five nor more than
        twenty-five as fixed from time to time by vote of a majority of the
        whole Board, provided, however, that the number of directors shall not
        be reduced so as to shorten the term of any director at the time in
        office, and provided further, that the number of directors constituting
        the whole Board shall be twenty-four until otherwise fixed by a majority
        of the whole Board.

        (b) The Board of Directors shall be divided into three classes, as
        nearly equal in



                                       7
<PAGE>   11

        number as the then total number of directors constituting the whole
        Board permits, with the term of office of one class expiring each year.
        At the annual meeting of stockholders in 1982, directors of the first
        class shall be elected to hold office for a term expiring at the next
        succeeding annual meeting, directors of the second class shall be
        elected to hold office for a term expiring at the second succeeding
        annual meeting and directors of the third class shall be elected to hold
        office for a term expiring at the third succeeding annual meeting. Any
        vacancies in the Board of Directors for any reason, and any newly
        created directorships resulting from any increase in the directors, may
        be filled by the Board of Directors, acting by a majority of the
        directors then in office, although less than a quorum, and any directors
        so chosen shall hold office until the next annual election of directors.
        At such election, the stockholders shall elect a successor to such
        director to hold office until the next election of the class for which
        such director shall have been chosen and until his successor shall be
        elected and qualified. No decrease in the number of directors shall
        shorten the term of any incumbent director.

        (c) Notwithstanding any other provisions of this Charter or Act of
        Incorporation or the By-Laws of the Corporation (and notwithstanding the
        fact that some lesser percentage may be specified by law, this Charter
        or Act of Incorporation or the By- Laws of the Corporation), any
        director or the entire Board of Directors of the Corporation may be
        removed at any time without cause, but only by the affirmative vote of
        the holders of two-thirds or more of the outstanding shares of capital
        stock of the Corporation entitled to vote generally in the election of
        directors (considered for this purpose as one class) cast at a meeting
        of the stockholders called for that purpose.

        (d) Nominations for the election of directors may be made by the Board
        of Directors or by any stockholder entitled to vote for the election of
        directors. Such nominations shall be made by notice in writing,
        delivered or mailed by first class United States mail, postage prepaid,
        to the Secretary of the Corporation not less than 14 days nor more than
        50 days prior to any meeting of the stockholders called for the election
        of directors; provided, however, that if less than 21 days' notice of
        the meeting is given to stockholders, such written notice shall be
        delivered or mailed, as prescribed, to the Secretary of the Corporation
        not later than the close of the seventh day following the day on which
        notice of the meeting was mailed to stockholders. Notice of nominations
        which are proposed by the Board of Directors shall be given by the
        Chairman on behalf of the Board.

        (e) Each notice under subsection (d) shall set forth (i) the name, age,
        business address and, if known, residence address of each nominee
        proposed in such notice, (ii) the principal occupation or employment of
        such nominee and (iii) the number of shares of stock of the Corporation
        which are beneficially owned by each such nominee.

        (f) The Chairman of the meeting may, if the facts warrant, determine and
        declare to the meeting that a nomination was not made in accordance with
        the foregoing procedure, and if he should so determine, he shall so
        declare to the meeting and the



                                       8
<PAGE>   12

        defective nomination shall be disregarded.

        (g) No action required to be taken or which may be taken at any annual
        or special meeting of stockholders of the Corporation may be taken
        without a meeting, and the power of stockholders to consent in writing,
        without a meeting, to the taking of any action is specifically denied.

        SIXTH: - The Directors shall choose such officers, agents and servants
        as may be provided in the By-Laws as they may from time to time find
        necessary or proper.

        SEVENTH: - The Corporation hereby created is hereby given the same
        powers, rights and privileges as may be conferred upon corporations
        organized under the Act entitled "An Act Providing a General Corporation
        Law", approved March 10, 1899, as from time to time amended.

        EIGHTH: - This Act shall be deemed and taken to be a private Act.

        NINTH: - This Corporation is to have perpetual existence.

        TENTH: - The Board of Directors, by resolution passed by a majority of
        the whole Board, may designate any of their number to constitute an
        Executive Committee, which Committee, to the extent provided in said
        resolution, or in the By-Laws of the Company, shall have and may
        exercise all of the powers of the Board of Directors in the management
        of the business and affairs of the Corporation, and shall have power to
        authorize the seal of the Corporation to be affixed to all papers which
        may require it.

        ELEVENTH: - The private property of the stockholders shall not be liable
        for the payment of corporate debts to any extent whatever.

        TWELFTH: - The Corporation may transact business in any part of the
        world.

        THIRTEENTH: - The Board of Directors of the Corporation is expressly
        authorized to make, alter or repeal the By-Laws of the Corporation by a
        vote of the majority of the entire Board. The stockholders may make,
        alter or repeal any By-Law whether or not adopted by them, provided
        however, that any such additional By-Laws, alterations or repeal may be
        adopted only by the affirmative vote of the holders of two-thirds or
        more of the outstanding shares of capital stock of the Corporation
        entitled to vote generally in the election of directors (considered for
        this purpose as one class).

        FOURTEENTH: - Meetings of the Directors may be held outside of the State
        of Delaware at such places as may be from time to time designated by the
        Board, and the Directors may keep the books of the Company outside of
        the State of Delaware at such places as may be from time to time
        designated by them.

        FIFTEENTH: - (a) (1) In addition to any affirmative vote required by
        law, and except as



                                       9
<PAGE>   13

        otherwise expressly provided in sections (b) and (c) of this Article
        FIFTEENTH:

                (A) any merger or consolidation of the Corporation or any
                Subsidiary (as hereinafter defined) with or into (i) any
                Interested Stockholder (as hereinafter defined) or (ii) any
                other corporation (whether or not itself an Interested
                Stockholder), which, after such merger or consolidation, would
                be an Affiliate (as hereinafter defined) of an Interested
                Stockholder, or

                (B) any sale, lease, exchange, mortgage, pledge, transfer or
                other disposition (in one transaction or a series of related
                transactions) to or with any Interested Stockholder or any
                Affiliate of any Interested Stockholder of any assets of the
                Corporation or any Subsidiary having an aggregate fair market
                value of $1,000,000 or more, or

                (C) the issuance or transfer by the Corporation or any
                Subsidiary (in one transaction or a series of related
                transactions) of any securities of the Corporation or any
                Subsidiary to any Interested Stockholder or any Affiliate of any
                Interested Stockholder in exchange for cash, securities or other
                property (or a combination thereof) having an aggregate fair
                market value of $1,000,000 or more, or

                (D) the adoption of any plan or proposal for the liquidation or
                dissolution of the Corporation, or

                (E) any reclassification of securities (including any reverse
                stock split), or recapitalization of the Corporation, or any
                merger or consolidation of the Corporation with any of its
                Subsidiaries or any similar transaction (whether or not with or
                into or otherwise involving an Interested Stockholder) which has
                the effect, directly or indirectly, of increasing the
                proportionate share of the outstanding shares of any class of
                equity or convertible securities of the Corporation or any
                Subsidiary which is directly or indirectly owned by any
                Interested Stockholder, or any Affiliate of any Interested
                Stockholder,

shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.

                  (2) The term "business combination" as used in this Article
                  FIFTEENTH shall mean any transaction which is referred to in
                  any one or more of clauses (A) through (E) of paragraph 1 of
                  the section (a).

        (b) The provisions of section (a) of this Article FIFTEENTH shall not be
        applicable to any particular business combination and such business
        combination shall



                                       10
<PAGE>   14

        require only such affirmative vote as is required by law and any other
        provisions of the Charter or Act of Incorporation or By-Laws if such
        business combination has been approved by a majority of the whole Board.

        (c) For the purposes of this Article FIFTEENTH:

                (1) A "person" shall mean any individual, firm, corporation or
                other entity.

                (2) "Interested Stockholder" shall mean, in respect of any
                business combination, any person (other than the Corporation or
                any Subsidiary) who or which as of the record date for the
                determination of stockholders entitled to notice of and to vote
                on such business combination, or immediately prior to the
                consummation of any such transaction:

                      (A) is the beneficial owner, directly or indirectly, of
                      more than 10% of the Voting Shares, or

                      (B) is an Affiliate of the Corporation and at any time
                      within two years prior thereto was the beneficial owner,
                      directly or indirectly, of not less than 10% of the then
                      outstanding voting Shares, or

                      (C) is an assignee of or has otherwise succeeded in any
                      share of capital stock of the Corporation which were at
                      any time within two years prior thereto beneficially owned
                      by any Interested Stockholder, and such assignment or
                      succession shall have occurred in the course of a
                      transaction or series of transactions not involving a
                      public offering within the meaning of the Securities Act
                      of 1933.

                (3) A person shall be the "beneficial owner" of any Voting
                Shares:

                      (A) which such person or any of its Affiliates and
                      Associates (as hereafter defined) beneficially own,
                      directly or indirectly, or

                      (B) which such person or any of its Affiliates or
                      Associates has (i) the right to acquire (whether such
                      right is exercisable immediately or only after the passage
                      of time), pursuant to any agreement, arrangement or
                      understanding or upon the exercise of conversion rights,
                      exchange rights, warrants or options, or otherwise, or
                      (ii) the right to vote pursuant to any agreement,
                      arrangement or understanding, or

                      (C) which are beneficially owned, directly or indirectly,
                      by any other person with which such first mentioned person
                      or any of its Affiliates or Associates has any agreement,
                      arrangement or understanding for the purpose of acquiring,
                      holding, voting or disposing of any shares of capital
                      stock of the Corporation.



                                       11
<PAGE>   15

                (4) The outstanding Voting Shares shall include shares deemed
                owned through application of paragraph (3) above but shall not
                include any other Voting Shares which may be issuable pursuant
                to any agreement, or upon exercise of conversion rights,
                warrants or options or otherwise.

                (5) "Affiliate" and "Associate" shall have the respective
                meanings given those terms in Rule 12b-2 of the General Rules
                and Regulations under the Securities Exchange Act of 1934, as in
                effect on December 31, 1981.

                (6) "Subsidiary" shall mean any corporation of which a majority
                of any class of equity security (as defined in Rule 3a11-1 of
                the General Rules and Regulations under the Securities Exchange
                Act of 1934, as in effect on December 31, 1981) is owned,
                directly or indirectly, by the Corporation; provided, however,
                that for the purposes of the definition of Investment
                Stockholder set forth in paragraph (2) of this section (c), the
                term "Subsidiary" shall mean only a corporation of which a
                majority of each class of equity security is owned, directly or
                indirectly, by the Corporation.

        (d) majority of the directors shall have the power and duty to determine
        for the purposes of this Article FIFTEENTH on the basis of information
        known to them, (1) the number of Voting Shares beneficially owned by any
        person (2) whether a person is an Affiliate or Associate of another, (3)
        whether a person has an agreement, arrangement or understanding with
        another as to the matters referred to in paragraph (3) of section (c),
        or (4) whether the assets subject to any business combination or the
        consideration received for the issuance or transfer of securities by the
        Corporation, or any Subsidiary has an aggregate fair market value of
        $1,000,000 or more.

        (e) Nothing contained in this Article FIFTEENTH shall be construed to
        relieve any Interested Stockholder from any fiduciary obligation imposed
        by law.

        SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
        Incorporation or the By-Laws of the Corporation (and in addition to any
        other vote that may be required by law, this Charter or Act of
        Incorporation by the By-Laws), the affirmative vote of the holders of at
        least two-thirds of the outstanding shares of the capital stock of the
        Corporation entitled to vote generally in the election of directors
        (considered for this purpose as one class) shall be required to amend,
        alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH
        or SIXTEENTH of this Charter or Act of Incorporation.

        SEVENTEENTH: (a) a Director of this Corporation shall not be liable to
        the Corporation or its stockholders for monetary damages for breach of
        fiduciary duty as a Director, except to the extent such exemption from
        liability or limitation thereof is not permitted under the Delaware
        General Corporation Laws as the same exists or may hereafter be amended.



                                       12
<PAGE>   16

        (b) Any repeal or modification of the foregoing paragraph shall not
        adversely affect any right or protection of a Director of the
        Corporation existing hereunder with respect to any act or omission
        occurring prior to the time of such repeal or modification."



                                       13
<PAGE>   17

                                    EXHIBIT B

                                     BY-LAWS


                            WILMINGTON TRUST COMPANY

                              WILMINGTON, DELAWARE

                        AS EXISTING ON FEBRUARY 20, 2000


<PAGE>   18
                       BY-LAWS OF WILMINGTON TRUST COMPANY


                                    ARTICLE I
                             STOCKHOLDERS' MEETINGS

          Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.

          Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.

          Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.

          Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.


                                   ARTICLE II
                                    DIRECTORS

          Section 1. The authorized number of directors that shall constitute
the Board of Directors shall be fixed from time to time by or pursuant to a
resolution passed by a majority of the Board within the parameters set by the
Charter of the Bank. No more than two directors may also be employees of the
Company or any affiliate thereof.

          Section 2. Except as provided in these Bylaws or as otherwise required
by law, there shall be no qualifications for election or service as directors of
the Company. In addition to any other provisions of these Bylaws, to be
qualified for nomination for Election or appointment to the Board of Directors
each person must have not attained the age of sixty-nine years at the time of
such election or appointment, provided however, the Nominating and Corporate
Governance Committee may waive such qualification as to a particular candidate
otherwise qualified to serve as a director upon a good faith determination by
such committee that such a waiver is in the best interests of the Company and
its stockholders. The Chairman of the Board of Directors shall not be qualified
to continue to serve as a director upon the termination of his or her services
in that office for any reason.

          Section 3. The class of Directors so elected shall hold office for
three years or until


<PAGE>   19

their successors are elected and qualified.

          Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.

          Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Board of
Directors or the President.

          Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.

          Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.

          Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.

          Section 9. In the event of the death, resignation, removal, inability
to act, or disqualification of any director, the Board of Directors, although
less than a quorum, shall have the right to elect the successor who shall hold
office for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.

          Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.

          Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.

        Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.


                                   ARTICLE III
                                   COMMITTEES


                                       2
<PAGE>   20
          Section 1.  Executive Committee

                    (A) The Executive Committee shall be composed of not more
than nine members who shall be selected by the Board of Directors from its own
members and who shall hold office during the pleasure of the Board.

                    (B) The Executive Committee shall have all the powers of the
Board of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.

                    (C) The Executive Committee shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of the
Executive Committee or at the call of the Chairman of the Board of Directors.
The majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be held
at any time when a quorum is present.

                    (D) Minutes of each meeting of the Executive Committee shall
be kept and submitted to the Board of Directors at its next meeting.

                    (E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.

                    (F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Company by its directors and officers as contemplated by these By-Laws any
two available members of the Executive Committee as constituted immediately
prior to such disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the provisions of Article III of these By-Laws; and if less than three
members of the Trust Committee is constituted immediately prior to such disaster
shall be available for the transaction of its business, such Executive Committee
shall also be empowered to exercise all of the powers reserved to the Trust
Committee under Article III Section 2 hereof. In the event of the
unavailability, at such time, of a minimum of two members of such Executive
Committee, any three available directors shall constitute the Executive
Committee for the full conduct and management of the affairs and business of the
Company in accordance with the foregoing provisions of this Section. This By-Law
shall be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose, and
any provisions of these By-Laws (other than this Section) and any resolutions
which are contrary to the provisions of this Section or to the provisions of any
such implementary Resolutions shall be suspended during such a disaster period
until it shall be determined by any interim Executive Committee acting under
this section that it shall be to the advantage of the Company to resume the
conduct and management of its affairs and business under all of the other
provisions of these By-Laws.



                                       3
<PAGE>   21
          Section 2.  Audit Committee

                    (A) The Audit Committee shall be composed of five members
who shall be selected by the Board of Directors from its own members, none of
whom shall be an officer of the Company, and shall hold office at the pleasure
of the Board.

                    (B) The Audit Committee shall have general supervision over
the Audit Division in all matters however subject to the approval of the Board
of Directors; it shall consider all matters brought to its attention by the
officer in charge of the Audit Division, review all reports of examination of
the Company made by any governmental agency or such independent auditor employed
for that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.

                    (C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.

          Section 3.  Compensation Committee

                    (A) The Compensation Committee shall be composed of not more
than five (5) members who shall be selected by the Board of Directors from its
own members who are not officers of the Company and who shall hold office during
the pleasure of the Board.

                    (B) The Compensation Committee shall in general advise upon
all matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.

                    (C) Meetings of the Compensation Committee may be called at
any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.



                                       4
<PAGE>   22
          Section 4.  Associate Directors

                    (A) Any person who has served as a director may be elected
by the Board of Directors as an associate director, to serve during the pleasure
of the Board.

                    (B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.

          Section 5.  Absence or Disqualification of Any Member of a Committee

                    (A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member.


                                   ARTICLE IV
                                    OFFICERS

          Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.

          Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.

          Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors. In the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.

        Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.




                                       5
<PAGE>   23
          Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.

          Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.

          Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.

          Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.

          There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.

          Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.

          There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.

          Section 10. There may be one or more officers, subordinate in rank to
all Vice Presidents with such functional titles as shall be determined from time
to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.



                                       6
<PAGE>   24

          Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.


                                    ARTICLE V
                          STOCK AND STOCK CERTIFICATES

          Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.

          Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.

          Section 3. The Board of Directors of the Company is authorized to fix
in advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.



                                       7
<PAGE>   25

                                   ARTICLE VI
                                      SEAL

          Section 1. The corporate seal of the Company shall be in the following
form:

                    Between two concentric circles the words "Wilmington Trust
                    Company" within the inner circle the words "Wilmington,
                    Delaware."


                                   ARTICLE VII
                                   FISCAL YEAR

          Section 1. The fiscal year of the Company shall be the calendar year.


                                  ARTICLE VIII
                     EXECUTION OF INSTRUMENTS OF THE COMPANY

          Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.


                                   ARTICLE IX
               COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES

          Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.



                                       8
<PAGE>   26
                                    ARTICLE X
                                 INDEMNIFICATION

          Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.

                    (B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
that the payment of expenses incurred by a Director or officer in his capacity
as a Director or officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the Director or officer to
repay all amounts advanced if it should be ultimately determined that the
Director or officer is not entitled to be indemnified under this Article or
otherwise.

                    (C) If a claim for indemnification or payment of expenses,
under this Article X is not paid in full within ninety days after a written
claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any
such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification of payment of expenses under
applicable law.

                    (D) The rights conferred on any person by this Article X
shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.

                    (E) Any repeal or modification of the foregoing provisions
of this Article X shall not adversely affect any right or protection hereunder
of any person in respect of any act or omission occurring prior to the time of
such repeal or modification.

                                   ARTICLE XI
                            AMENDMENTS TO THE BY-LAWS

          Section 1. These By-Laws may be altered, amended or repealed, in whole
or in part,



                                       9
<PAGE>   27

and any new By-Law or By-Laws adopted at any regular or special meeting of the
Board of Directors by a vote of the majority of all the members of the Board of
Directors then in office.



                                       10
<PAGE>   28
                                    EXHIBIT C




                             SECTION 321(b) CONSENT


          Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.



                                               WILMINGTON TRUST COMPANY


Dated: April 17, 2001                          By: /s/ Michael A. DiGregorio
                                                   ----------------------------
                                                   Name: Michael A. DiGregorio
                                                   Title: Vice President

<PAGE>   29
                                    EXHIBIT D

                                     NOTICE


This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.



REPORT OF CONDITION

Consolidating domestic subsidiaries of the

           WILMINGTON TRUST COMPANY                        of   WILMINGTON
- ----------------------------------------------------------    --------------
                 Name of Bank                                      City

in the State of DELAWARE , at the close of business on December 31, 2000.



ASSETS
<TABLE>
<CAPTION>
                                                                          Thousands of dollars
<S>                                                            <C>        <C>
Cash and balances due from depository institutions:
        Noninterest-bearing balances and currency and coins............................218,332
        Interest-bearing balances..........................................................  0
Held-to-maturity securities............................................................ 19,838
Available-for-sale securities........................................................1,378,378
Federal funds sold and securities purchased under agreements to resell.................463,241
Loans and lease financing receivables:
        Loans and leases, net of unearned income.............. 4,724,939
        LESS:  Allowance for loan and lease losses............    70,118
        LESS:  Allocated transfer risk reserve................         0
        Loans and leases, net of unearned income, allowance, and reserve.............4,654,821
Assets held in trading accounts..............................................................0
Premises and fixed assets (including capitalized leases)...............................124,599
Other real estate owned.................................................................   661
Investments in unconsolidated subsidiaries and associated companies......................1,697
Customers' liability to this bank on acceptances outstanding.................................0
Intangible assets....................................................................... 4,727
Other assets.......................................................................... 133,523
Total assets.........................................................................6,999,817
</TABLE>


                                                          CONTINUED ON NEXT PAGE

<PAGE>   30
LIABILITIES

<TABLE>
<CAPTION>
<S>                                                          <C>                     <C>
Deposits:
In domestic offices..................................................................5,238,186
        Noninterest-bearing.................................   988,834
        Interest-bearing.................................... 4,249,352
Federal funds purchased and Securities sold under agreements to repurchase............ 404,964
Demand notes issued to the U.S. Treasury................................................30,757
Trading liabilities (from Schedule RC-D).....................................................0
Other borrowed money:..................................................................///////
        With original maturity of one year or less.....................................662,000
        With original maturity of more than one year....................................43,000
Bank's liability on acceptances executed and outstanding.....................................0
Subordinated notes and debentures............................................................0
Other liabilities (from Schedule RC-G)............................................... 139, 606
Total liabilities....................................................................6,518,513


EQUITY CAPITAL

Perpetual preferred stock and related surplus................................................0
Common Stock...............................................................................500
Surplus (exclude all surplus related to preferred stock)................................62,118
Undivided profits and capital reserves.................................................423,463
Net unrealized holding gains (losses) on available-for-sale securities.................(4,777)
Total equity capital...................................................................481,304
Total liabilities, limited-life preferred stock, and equity capital..................6,999,817
</TABLE>



                                       2
<PAGE>   31

                                                                Registration No.
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM T-1

         STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
                  OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)  X
                 ------

                            WILMINGTON TRUST COMPANY
               (Exact name of trustee as specified in its charter)


<TABLE>
<S>                                      <C>
       Delaware                                       51-0055023
(State of incorporation)                 (I.R.S. employer identification no.)
</TABLE>

                               Rodney Square North
                            1100 North Market Street
                           Wilmington, Delaware 19890
                    (Address of principal executive offices)

                               Cynthia L. Corliss
                        Vice President and Trust Counsel
                            Wilmington Trust Company
                               Rodney Square North
                           Wilmington, Delaware 19890
                                 (302) 651-8516
            (Name, address and telephone number of agent for service)

                               CALPINE CORPORATION
               (Exact name of obligor as specified in its charter)

<TABLE>
<S>                                        <C>
              Delaware                                       77-0212977
      (State of incorporation)                   (I.R.S. employer identification no.)

       50 West San Fernando Street
         San Jose, California                                   95113
(Address of principal executive offices)                      (Zip Code)
</TABLE>


                Guarantees of Calpine Corporation with respect to
              Debt Securities of Calpine Canada Energy Finance ULC
                       (Title of the indenture securities)

================================================================================
<PAGE>   32

ITEM 1. GENERAL INFORMATION.

              Furnish the following information as to the trustee:

       (a)    Name and address of each examining or supervising authority to
              which it is subject.

              Federal Deposit Insurance Co.        State Bank Commissioner
              Five Penn Center                     Dover, Delaware
              Suite #2901
              Philadelphia, PA

       (b)    Whether it is authorized to exercise corporate trust powers.

              The trustee is authorized to exercise corporate trust powers.

ITEM 2. AFFILIATIONS WITH THE OBLIGOR.

              If the obligor is an affiliate of the trustee, describe each
       affiliation:

              Based upon an examination of the books and records of the trustee
       and upon information furnished by the obligor, the obligor is not an
       affiliate of the trustee.

ITEM 3. LIST OF EXHIBITS.

              List below all exhibits filed as part of this Statement of
       Eligibility and Qualification.

       A.     Copy of the Charter of Wilmington Trust Company, which includes
              the certificate of authority of Wilmington Trust Company to
              commence business and the authorization of Wilmington Trust
              Company to exercise corporate trust powers.

       B.     Copy of By-Laws of Wilmington Trust Company.

       C.     Consent of Wilmington Trust Company required by Section 321(b) of
              Trust Indenture Act.

       D.     Copy of most recent Report of Condition of Wilmington Trust
              Company.

       Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 17th day
of April, 2001.


                                        WILMINGTON TRUST COMPANY
[SEAL]

Attest:   /s/ David C. Roulston         By:   /s/ Michael A. DiGregorio
       --------------------------          ------------------------------
       Assistant Secretary              Name: Michael A. DiGregorio
                                        Title: Vice President


                                       2
<PAGE>   33

                                    EXHIBIT A

                                 AMENDED CHARTER

                            WILMINGTON TRUST COMPANY

                              WILMINGTON, DELAWARE

                           AS EXISTING ON MAY 9, 1987


<PAGE>   34

                                 AMENDED CHARTER

                                       OR

                              ACT OF INCORPORATION

                                       OF

                            WILMINGTON TRUST COMPANY

       WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:

       FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.

       SECOND: - The location of its principal office in the State of Delaware
       is at Rodney Square North, in the City of Wilmington, County of New
       Castle; the name of its resident agent is WILMINGTON TRUST COMPANY whose
       address is Rodney Square North, in said City. In addition to such
       principal office, the said corporation maintains and operates branch
       offices in the City of Newark, New Castle County, Delaware, the Town of
       Newport, New Castle County, Delaware, at Claymont, New Castle County,
       Delaware, at Greenville, New Castle County Delaware, and at Milford Cross
       Roads, New Castle County, Delaware, and shall be empowered to open,
       maintain and operate branch offices at Ninth and Shipley Streets, 418
       Delaware Avenue, 2120 Market Street, and 3605 Market Street, all in the
       City of Wilmington, New Castle County, Delaware, and such other branch
       offices or places of business as may be authorized from time to time by
       the agency or agencies of the government of the State of Delaware
       empowered to confer such authority.

       THIRD: - (a) The nature of the business and the objects and purposes
       proposed to be transacted, promoted or carried on by this Corporation are
       to do any or all of the things herein mentioned as fully and to the same
       extent as natural persons might or could do and in any part of the world,
       viz.:

              (1) To sue and be sued, complain and defend in any Court of law or
              equity and to make and use a common seal, and alter the seal at
              pleasure, to hold, purchase, convey, mortgage or otherwise deal in
              real and personal estate and property, and to appoint such
              officers and agents as the business of the Corporation shall
              require, to make by-laws not inconsistent with the Constitution or
              laws of the United States or of this State, to discount bills,
              notes or other evidences of debt,


<PAGE>   35

              to receive deposits of money, or securities for money, to buy gold
              and silver bullion and foreign coins, to buy and sell bills of
              exchange, and generally to use, exercise and enjoy all the powers,
              rights, privileges and franchises incident to a corporation which
              are proper or necessary for the transaction of the business of the
              Corporation hereby created.

              (2) To insure titles to real and personal property, or any estate
              or interests therein, and to guarantee the holder of such
              property, real or personal, against any claim or claims, adverse
              to his interest therein, and to prepare and give certificates of
              title for any lands or premises in the State of Delaware, or
              elsewhere.

              (3) To act as factor, agent, broker or attorney in the receipt,
              collection, custody, investment and management of funds, and the
              purchase, sale, management and disposal of property of all
              descriptions, and to prepare and execute all papers which may be
              necessary or proper in such business.

              (4) To prepare and draw agreements, contracts, deeds, leases,
              conveyances, mortgages, bonds and legal papers of every
              description, and to carry on the business of conveyancing in all
              its branches.

              (5) To receive upon deposit for safekeeping money, jewelry, plate,
              deeds, bonds and any and all other personal property of every sort
              and kind, from executors, administrators, guardians, public
              officers, courts, receivers, assignees, trustees, and from all
              fiduciaries, and from all other persons and individuals, and from
              all corporations whether state, municipal, corporate or private,
              and to rent boxes, safes, vaults and other receptacles for such
              property.

              (6) To act as agent or otherwise for the purpose of registering,
              issuing, certificating, countersigning, transferring or
              underwriting the stock, bonds or other obligations of any
              corporation, association, state or municipality, and may receive
              and manage any sinking fund therefor on such terms as may be
              agreed upon between the two parties, and in like manner may act as
              Treasurer of any corporation or municipality.

              (7) To act as Trustee under any deed of trust, mortgage, bond or
              other instrument issued by any state, municipality, body politic,
              corporation, association or person, either alone or in conjunction
              with any other person or persons, corporation or corporations.

              (8) To guarantee the validity, performance or effect of any
              contract or agreement, and the fidelity of persons holding places
              of responsibility or trust; to become surety for any person, or
              persons, for the faithful performance of any trust, office, duty,
              contract or agreement, either by itself or in conjunction with any
              other person, or persons, corporation, or corporations, or in like
              manner


                                       2
<PAGE>   36

              become surety upon any bond, recognizance, obligation, judgment,
              suit, order, or decree to be entered in any court of record within
              the State of Delaware or elsewhere, or which may now or hereafter
              be required by any law, judge, officer or court in the State of
              Delaware or elsewhere.

              (9) To act by any and every method of appointment as trustee,
              trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
              executor, administrator, guardian, bailee, or in any other trust
              capacity in the receiving, holding, managing, and disposing of any
              and all estates and property, real, personal or mixed, and to be
              appointed as such trustee, trustee in bankruptcy, receiver,
              assignee, assignee in bankruptcy, executor, administrator,
              guardian or bailee by any persons, corporations, court, officer,
              or authority, in the State of Delaware or elsewhere; and whenever
              this Corporation is so appointed by any person, corporation,
              court, officer or authority such trustee, trustee in bankruptcy,
              receiver, assignee, assignee in bankruptcy, executor,
              administrator, guardian, bailee, or in any other trust capacity,
              it shall not be required to give bond with surety, but its capital
              stock shall be taken and held as security for the performance of
              the duties devolving upon it by such appointment.

              (10) And for its care, management and trouble, and the exercise of
              any of its powers hereby given, or for the performance of any of
              the duties which it may undertake or be called upon to perform, or
              for the assumption of any responsibility the said Corporation may
              be entitled to receive a proper compensation.

              (11) To purchase, receive, hold and own bonds, mortgages,
              debentures, shares of capital stock, and other securities,
              obligations, contracts and evidences of indebtedness, of any
              private, public or municipal corporation within and without the
              State of Delaware, or of the Government of the United States, or
              of any state, territory, colony, or possession thereof, or of any
              foreign government or country; to receive, collect, receipt for,
              and dispose of interest, dividends and income upon and from any of
              the bonds, mortgages, debentures, notes, shares of capital stock,
              securities, obligations, contracts, evidences of indebtedness and
              other property held and owned by it, and to exercise in respect of
              all such bonds, mortgages, debentures, notes, shares of capital
              stock, securities, obligations, contracts, evidences of
              indebtedness and other property, any and all the rights, powers
              and privileges of individual owners thereof, including the right
              to vote thereon; to invest and deal in and with any of the moneys
              of the Corporation upon such securities and in such manner as it
              may think fit and proper, and from time to time to vary or realize
              such investments; to issue bonds and secure the same by pledges or
              deeds of trust or mortgages of or upon the whole or any part of
              the property held or owned by the Corporation, and to sell and
              pledge such bonds, as and when the Board of Directors shall
              determine, and in the promotion of its said corporate business of
              investment and to the extent authorized by law, to lease,
              purchase, hold, sell, assign, transfer, pledge, mortgage and
              convey real


                                       3
<PAGE>   37

              and personal property of any name and nature and any estate or
              interest therein.

       (b) In furtherance of, and not in limitation, of the powers conferred by
       the laws of the State of Delaware, it is hereby expressly provided that
       the said Corporation shall also have the following powers:

              (1) To do any or all of the things herein set forth, to the same
              extent as natural persons might or could do, and in any part of
              the world.

              (2) To acquire the good will, rights, property and franchises and
              to undertake the whole or any part of the assets and liabilities
              of any person, firm, association or corporation, and to pay for
              the same in cash, stock of this Corporation, bonds or otherwise;
              to hold or in any manner to dispose of the whole or any part of
              the property so purchased; to conduct in any lawful manner the
              whole or any part of any business so acquired, and to exercise all
              the powers necessary or convenient in and about the conduct and
              management of such business.

              (3) To take, hold, own, deal in, mortgage or otherwise lien, and
              to lease, sell, exchange, transfer, or in any manner whatever
              dispose of property, real, personal or mixed, wherever situated.

              (4) To enter into, make, perform and carry out contracts of every
              kind with any person, firm, association or corporation, and,
              without limit as to amount, to draw, make, accept, endorse,
              discount, execute and issue promissory notes, drafts, bills of
              exchange, warrants, bonds, debentures, and other negotiable or
              transferable instruments.

              (5) To have one or more offices, to carry on all or any of its
              operations and businesses, without restriction to the same extent
              as natural persons might or could do, to purchase or otherwise
              acquire, to hold, own, to mortgage, sell, convey or otherwise
              dispose of, real and personal property, of every class and
              description, in any State, District, Territory or Colony of the
              United States, and in any foreign country or place.

              (6) It is the intention that the objects, purposes and powers
              specified and clauses contained in this paragraph shall (except
              where otherwise expressed in said paragraph) be nowise limited or
              restricted by reference to or inference from the terms of any
              other clause of this or any other paragraph in this charter, but
              that the objects, purposes and powers specified in each of the
              clauses of this paragraph shall be regarded as independent
              objects, purposes and powers.

       FOURTH: - (a) The total number of shares of all classes of stock which
       the Corporation shall have authority to issue is forty-one million
       (41,000,000) shares, consisting of:

              (1) One million (1,000,000) shares of Preferred stock, par value
              $10.00 per


                                       4
<PAGE>   38

              share (hereinafter referred to as "Preferred Stock"); and

              (2) Forty million (40,000,000) shares of Common Stock, par value
              $1.00 per share (hereinafter referred to as "Common Stock").

       (b) Shares of Preferred Stock may be issued from time to time in one or
       more series as may from time to time be determined by the Board of
       Directors each of said series to be distinctly designated. All shares of
       any one series of Preferred Stock shall be alike in every particular,
       except that there may be different dates from which dividends, if any,
       thereon shall be cumulative, if made cumulative. The voting powers and
       the preferences and relative, participating, optional and other special
       rights of each such series, and the qualifications, limitations or
       restrictions thereof, if any, may differ from those of any and all other
       series at any time outstanding; and, subject to the provisions of
       subparagraph 1 of Paragraph (c) of this Article FOURTH, the Board of
       Directors of the Corporation is hereby expressly granted authority to fix
       by resolution or resolutions adopted prior to the issuance of any shares
       of a particular series of Preferred Stock, the voting powers and the
       designations, preferences and relative, optional and other special
       rights, and the qualifications, limitations and restrictions of such
       series, including, but without limiting the generality of the foregoing,
       the following:

              (1) The distinctive designation of, and the number of shares of
              Preferred Stock which shall constitute such series, which number
              may be increased (except where otherwise provided by the Board of
              Directors) or decreased (but not below the number of shares
              thereof then outstanding) from time to time by like action of the
              Board of Directors;

              (2) The rate and times at which, and the terms and conditions on
              which, dividends, if any, on Preferred Stock of such series shall
              be paid, the extent of the preference or relation, if any, of such
              dividends to the dividends payable on any other class or classes,
              or series of the same or other class of stock and whether such
              dividends shall be cumulative or non-cumulative;

              (3) The right, if any, of the holders of Preferred Stock of such
              series to convert the same into or exchange the same for, shares
              of any other class or classes or of any series of the same or any
              other class or classes of stock of the Corporation and the terms
              and conditions of such conversion or exchange;

              (4) Whether or not Preferred Stock of such series shall be subject
              to redemption, and the redemption price or prices and the time or
              times at which, and the terms and conditions on which, Preferred
              Stock of such series may be redeemed.

              (5) The rights, if any, of the holders of Preferred Stock of such
              series upon the voluntary or involuntary liquidation, merger,
              consolidation, distribution or sale of assets, dissolution or
              winding-up, of the Corporation.


                                       5
<PAGE>   39

              (6) The terms of the sinking fund or redemption or purchase
              account, if any, to be provided for the Preferred Stock of such
              series; and

              (7) The voting powers, if any, of the holders of such series of
              Preferred Stock which may, without limiting the generality of the
              foregoing include the right, voting as a series or by itself or
              together with other series of Preferred Stock or all series of
              Preferred Stock as a class, to elect one or more directors of the
              Corporation if there shall have been a default in the payment of
              dividends on any one or more series of Preferred Stock or under
              such circumstances and on such conditions as the Board of
              Directors may determine.

       (c) (1) After the requirements with respect to preferential dividends on
       the Preferred Stock (fixed in accordance with the provisions of section
       (b) of this Article FOURTH), if any, shall have been met and after the
       Corporation shall have complied with all the requirements, if any, with
       respect to the setting aside of sums as sinking funds or redemption or
       purchase accounts (fixed in accordance with the provisions of section (b)
       of this Article FOURTH), and subject further to any conditions which may
       be fixed in accordance with the provisions of section (b) of this Article
       FOURTH, then and not otherwise the holders of Common Stock shall be
       entitled to receive such dividends as may be declared from time to time
       by the Board of Directors.

              (2) After distribution in full of the preferential amount, if any,
              (fixed in accordance with the provisions of section (b) of this
              Article FOURTH), to be distributed to the holders of Preferred
              Stock in the event of voluntary or involuntary liquidation,
              distribution or sale of assets, dissolution or winding-up, of the
              Corporation, the holders of the Common Stock shall be entitled to
              receive all of the remaining assets of the Corporation, tangible
              and intangible, of whatever kind available for distribution to
              stockholders ratably in proportion to the number of shares of
              Common Stock held by them respectively.

              (3) Except as may otherwise be required by law or by the
              provisions of such resolution or resolutions as may be adopted by
              the Board of Directors pursuant to section (b) of this Article
              FOURTH, each holder of Common Stock shall have one vote in respect
              of each share of Common Stock held on all matters voted upon by
              the stockholders.

       (d) No holder of any of the shares of any class or series of stock or of
       options, warrants or other rights to purchase shares of any class or
       series of stock or of other securities of the Corporation shall have any
       preemptive right to purchase or subscribe for any unissued stock of any
       class or series or any additional shares of any class or series to be
       issued by reason of any increase of the authorized capital stock of the
       Corporation of any class or series, or bonds, certificates of
       indebtedness, debentures or other securities convertible into or
       exchangeable for stock of the Corporation of any class or series, or
       carrying any right to purchase stock of any class or series, but any such
       unissued stock, additional authorized issue of shares of any class or
       series of stock


                                       6
<PAGE>   40

       or securities convertible into or exchangeable for stock, or carrying any
       right to purchase stock, may be issued and disposed of pursuant to
       resolution of the Board of Directors to such persons, firms, corporations
       or associations, whether such holders or others, and upon such terms as
       may be deemed advisable by the Board of Directors in the exercise of its
       sole discretion.

       (e) The relative powers, preferences and rights of each series of
       Preferred Stock in relation to the relative powers, preferences and
       rights of each other series of Preferred Stock shall, in each case, be as
       fixed from time to time by the Board of Directors in the resolution or
       resolutions adopted pursuant to authority granted in section (b) of this
       Article FOURTH and the consent, by class or series vote or otherwise, of
       the holders of such of the series of Preferred Stock as are from time to
       time outstanding shall not be required for the issuance by the Board of
       Directors of any other series of Preferred Stock whether or not the
       powers, preferences and rights of such other series shall be fixed by the
       Board of Directors as senior to, or on a parity with, the powers,
       preferences and rights of such outstanding series, or any of them;
       provided, however, that the Board of Directors may provide in the
       resolution or resolutions as to any series of Preferred Stock adopted
       pursuant to section (b) of this Article FOURTH that the consent of the
       holders of a majority (or such greater proportion as shall be therein
       fixed) of the outstanding shares of such series voting thereon shall be
       required for the issuance of any or all other series of Preferred Stock.

       (f) Subject to the provisions of section (e), shares of any series of
       Preferred Stock may be issued from time to time as the Board of Directors
       of the Corporation shall determine and on such terms and for such
       consideration as shall be fixed by the Board of Directors.

       (g) Shares of Common Stock may be issued from time to time as the Board
       of Directors of the Corporation shall determine and on such terms and for
       such consideration as shall be fixed by the Board of Directors.

       (h) The authorized amount of shares of Common Stock and of Preferred
       Stock may, without a class or series vote, be increased or decreased from
       time to time by the affirmative vote of the holders of a majority of the
       stock of the Corporation entitled to vote thereon.

       FIFTH: - (a) The business and affairs of the Corporation shall be
       conducted and managed by a Board of Directors. The number of directors
       constituting the entire Board shall be not less than five nor more than
       twenty-five as fixed from time to time by vote of a majority of the whole
       Board, provided, however, that the number of directors shall not be
       reduced so as to shorten the term of any director at the time in office,
       and provided further, that the number of directors constituting the whole
       Board shall be twenty-four until otherwise fixed by a majority of the
       whole Board.

       (b) The Board of Directors shall be divided into three classes, as nearly
       equal in


                                       7
<PAGE>   41

       number as the then total number of directors constituting the whole Board
       permits, with the term of office of one class expiring each year. At the
       annual meeting of stockholders in 1982, directors of the first class
       shall be elected to hold office for a term expiring at the next
       succeeding annual meeting, directors of the second class shall be elected
       to hold office for a term expiring at the second succeeding annual
       meeting and directors of the third class shall be elected to hold office
       for a term expiring at the third succeeding annual meeting. Any vacancies
       in the Board of Directors for any reason, and any newly created
       directorships resulting from any increase in the directors, may be filled
       by the Board of Directors, acting by a majority of the directors then in
       office, although less than a quorum, and any directors so chosen shall
       hold office until the next annual election of directors. At such
       election, the stockholders shall elect a successor to such director to
       hold office until the next election of the class for which such director
       shall have been chosen and until his successor shall be elected and
       qualified. No decrease in the number of directors shall shorten the term
       of any incumbent director.

       (c) Notwithstanding any other provisions of this Charter or Act of
       Incorporation or the By-Laws of the Corporation (and notwithstanding the
       fact that some lesser percentage may be specified by law, this Charter or
       Act of Incorporation or the ByLaws of the Corporation), any director or
       the entire Board of Directors of the Corporation may be removed at any
       time without cause, but only by the affirmative vote of the holders of
       two-thirds or more of the outstanding shares of capital stock of the
       Corporation entitled to vote generally in the election of directors
       (considered for this purpose as one class) cast at a meeting of the
       stockholders called for that purpose.

       (d) Nominations for the election of directors may be made by the Board of
       Directors or by any stockholder entitled to vote for the election of
       directors. Such nominations shall be made by notice in writing, delivered
       or mailed by first class United States mail, postage prepaid, to the
       Secretary of the Corporation not less than 14 days nor more than 50 days
       prior to any meeting of the stockholders called for the election of
       directors; provided, however, that if less than 21 days' notice of the
       meeting is given to stockholders, such written notice shall be delivered
       or mailed, as prescribed, to the Secretary of the Corporation not later
       than the close of the seventh day following the day on which notice of
       the meeting was mailed to stockholders. Notice of nominations which are
       proposed by the Board of Directors shall be given by the Chairman on
       behalf of the Board.

       (e) Each notice under subsection (d) shall set forth (i) the name, age,
       business address and, if known, residence address of each nominee
       proposed in such notice, (ii) the principal occupation or employment of
       such nominee and (iii) the number of shares of stock of the Corporation
       which are beneficially owned by each such nominee.

       (f) The Chairman of the meeting may, if the facts warrant, determine and
       declare to the meeting that a nomination was not made in accordance with
       the foregoing procedure, and if he should so determine, he shall so
       declare to the meeting and the


                                       8
<PAGE>   42

       defective nomination shall be disregarded.

       (g) No action required to be taken or which may be taken at any annual or
       special meeting of stockholders of the Corporation may be taken without a
       meeting, and the power of stockholders to consent in writing, without a
       meeting, to the taking of any action is specifically denied.

       SIXTH: - The Directors shall choose such officers, agents and servants as
       may be provided in the By-Laws as they may from time to time find
       necessary or proper.

       SEVENTH: - The Corporation hereby created is hereby given the same
       powers, rights and privileges as may be conferred upon corporations
       organized under the Act entitled "An Act Providing a General Corporation
       Law", approved March 10, 1899, as from time to time amended.

       EIGHTH: - This Act shall be deemed and taken to be a private Act.

       NINTH: - This Corporation is to have perpetual existence.

       TENTH: - The Board of Directors, by resolution passed by a majority of
       the whole Board, may designate any of their number to constitute an
       Executive Committee, which Committee, to the extent provided in said
       resolution, or in the By-Laws of the Company, shall have and may exercise
       all of the powers of the Board of Directors in the management of the
       business and affairs of the Corporation, and shall have power to
       authorize the seal of the Corporation to be affixed to all papers which
       may require it.

       ELEVENTH: - The private property of the stockholders shall not be liable
       for the payment of corporate debts to any extent whatever.

       TWELFTH: - The Corporation may transact business in any part of the
       world.

       THIRTEENTH: - The Board of Directors of the Corporation is expressly
       authorized to make, alter or repeal the By-Laws of the Corporation by a
       vote of the majority of the entire Board. The stockholders may make,
       alter or repeal any By-Law whether or not adopted by them, provided
       however, that any such additional By-Laws, alterations or repeal may be
       adopted only by the affirmative vote of the holders of two-thirds or more
       of the outstanding shares of capital stock of the Corporation entitled to
       vote generally in the election of directors (considered for this purpose
       as one class).

       FOURTEENTH: - Meetings of the Directors may be held outside of the State
       of Delaware at such places as may be from time to time designated by the
       Board, and the Directors may keep the books of the Company outside of the
       State of Delaware at such places as may be from time to time designated
       by them.

       FIFTEENTH: - (a) (1) In addition to any affirmative vote required by law,
       and except as


                                       9
<PAGE>   43

       otherwise expressly provided in sections (b) and (c) of this Article
       FIFTEENTH:

              (A) any merger or consolidation of the Corporation or any
              Subsidiary (as hereinafter defined) with or into (i) any
              Interested Stockholder (as hereinafter defined) or (ii) any other
              corporation (whether or not itself an Interested Stockholder),
              which, after such merger or consolidation, would be an Affiliate
              (as hereinafter defined) of an Interested Stockholder, or

              (B) any sale, lease, exchange, mortgage, pledge, transfer or other
              disposition (in one transaction or a series of related
              transactions) to or with any Interested Stockholder or any
              Affiliate of any Interested Stockholder of any assets of the
              Corporation or any Subsidiary having an aggregate fair market
              value of $1,000,000 or more, or

              (C) the issuance or transfer by the Corporation or any Subsidiary
              (in one transaction or a series of related transactions) of any
              securities of the Corporation or any Subsidiary to any Interested
              Stockholder or any Affiliate of any Interested Stockholder in
              exchange for cash, securities or other property (or a combination
              thereof) having an aggregate fair market value of $1,000,000 or
              more, or

              (D) the adoption of any plan or proposal for the liquidation or
              dissolution of the Corporation, or

              (E) any reclassification of securities (including any reverse
              stock split), or recapitalization of the Corporation, or any
              merger or consolidation of the Corporation with any of its
              Subsidiaries or any similar transaction (whether or not with or
              into or otherwise involving an Interested Stockholder) which has
              the effect, directly or indirectly, of increasing the
              proportionate share of the outstanding shares of any class of
              equity or convertible securities of the Corporation or any
              Subsidiary which is directly or indirectly owned by any Interested
              Stockholder, or any Affiliate of any Interested Stockholder,

shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.

                     (2) The term "business combination" as used in this Article
                     FIFTEENTH shall mean any transaction which is referred to
                     in any one or more of clauses (A) through (E) of paragraph
                     1 of the section (a).

              (b) The provisions of section (a) of this Article FIFTEENTH shall
              not be applicable to any particular business combination and such
              business combination shall


                                       10
<PAGE>   44

              require only such affirmative vote as is required by law and any
              other provisions of the Charter or Act of Incorporation or By-Laws
              if such business combination has been approved by a majority of
              the whole Board.

              (c) For the purposes of this Article FIFTEENTH:

       (1) A "person" shall mean any individual, firm, corporation or other
       entity.

       (2) "Interested Stockholder" shall mean, in respect of any business
       combination, any person (other than the Corporation or any Subsidiary)
       who or which as of the record date for the determination of stockholders
       entitled to notice of and to vote on such business combination, or
       immediately prior to the consummation of any such transaction:

              (A) is the beneficial owner, directly or indirectly, of more than
              10% of the Voting Shares, or

              (B) is an Affiliate of the Corporation and at any time within two
              years prior thereto was the beneficial owner, directly or
              indirectly, of not less than 10% of the then outstanding voting
              Shares, or

              (C) is an assignee of or has otherwise succeeded in any share of
              capital stock of the Corporation which were at any time within two
              years prior thereto beneficially owned by any Interested
              Stockholder, and such assignment or succession shall have occurred
              in the course of a transaction or series of transactions not
              involving a public offering within the meaning of the Securities
              Act of 1933.

       (3) A person shall be the "beneficial owner" of any Voting Shares:

              (A) which such person or any of its Affiliates and Associates (as
              hereafter defined) beneficially own, directly or indirectly, or

              (B) which such person or any of its Affiliates or Associates has
              (i) the right to acquire (whether such right is exercisable
              immediately or only after the passage of time), pursuant to any
              agreement, arrangement or understanding or upon the exercise of
              conversion rights, exchange rights, warrants or options, or
              otherwise, or (ii) the right to vote pursuant to any agreement,
              arrangement or understanding, or

              (C) which are beneficially owned, directly or indirectly, by any
              other person with which such first mentioned person or any of its
              Affiliates or Associates has any agreement, arrangement or
              understanding for the purpose of acquiring, holding, voting or
              disposing of any shares of capital stock of the Corporation.


                                       11
<PAGE>   45

       (4) The outstanding Voting Shares shall include shares deemed owned
       through application of paragraph (3) above but shall not include any
       other Voting Shares which may be issuable pursuant to any agreement, or
       upon exercise of conversion rights, warrants or options or otherwise.

       (5) "Affiliate" and "Associate" shall have the respective meanings given
       those terms in Rule 12b-2 of the General Rules and Regulations under the
       Securities Exchange Act of 1934, as in effect on December 31, 1981.

       (6) "Subsidiary" shall mean any corporation of which a majority of any
       class of equity security (as defined in Rule 3a11-1 of the General Rules
       and Regulations under the Securities Exchange Act of 1934, as in effect
       on December 31, 1981) is owned, directly or indirectly, by the
       Corporation; provided, however, that for the purposes of the definition
       of Investment Stockholder set forth in paragraph (2) of this section (c),
       the term "Subsidiary" shall mean only a corporation of which a majority
       of each class of equity security is owned, directly or indirectly, by the
       Corporation.

              (d) majority of the directors shall have the power and duty to
              determine for the purposes of this Article FIFTEENTH on the basis
              of information known to them, (1) the number of Voting Shares
              beneficially owned by any person (2) whether a person is an
              Affiliate or Associate of another, (3) whether a person has an
              agreement, arrangement or understanding with another as to the
              matters referred to in paragraph (3) of section (c), or (4)
              whether the assets subject to any business combination or the
              consideration received for the issuance or transfer of securities
              by the Corporation, or any Subsidiary has an aggregate fair market
              value of $1,000,000 or more.

              (e) Nothing contained in this Article FIFTEENTH shall be construed
              to relieve any Interested Stockholder from any fiduciary
              obligation imposed by law.

       SIXTEENTH: Notwithstanding any other provision of this Charter or Act of
       Incorporation or the By-Laws of the Corporation (and in addition to any
       other vote that may be required by law, this Charter or Act of
       Incorporation by the By-Laws), the affirmative vote of the holders of at
       least two-thirds of the outstanding shares of the capital stock of the
       Corporation entitled to vote generally in the election of directors
       (considered for this purpose as one class) shall be required to amend,
       alter or repeal any provision of Articles FIFTH, THIRTEENTH, FIFTEENTH or
       SIXTEENTH of this Charter or Act of Incorporation.

       SEVENTEENTH: (a) a Director of this Corporation shall not be liable to
       the Corporation or its stockholders for monetary damages for breach of
       fiduciary duty as a Director, except to the extent such exemption from
       liability or limitation thereof is not permitted under the Delaware
       General Corporation Laws as the same exists or may hereafter be amended.


                                       12
<PAGE>   46

              (b) Any repeal or modification of the foregoing paragraph shall
              not adversely affect any right or protection of a Director of the
              Corporation existing hereunder with respect to any act or omission
              occurring prior to the time of such repeal or modification."


                                       13
<PAGE>   47

                                    EXHIBIT B

                                     BY-LAWS


                            WILMINGTON TRUST COMPANY

                              WILMINGTON, DELAWARE

                        AS EXISTING ON FEBRUARY 20, 2000


<PAGE>   48

                       BY-LAWS OF WILMINGTON TRUST COMPANY


                                    ARTICLE I
                             STOCKHOLDERS' MEETINGS

       Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.

       Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.

       Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.

       Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.


                                   ARTICLE II
                                    DIRECTORS

       Section 1. The authorized number of directors that shall constitute the
Board of Directors shall be fixed from time to time by or pursuant to a
resolution passed by a majority of the Board within the parameters set by the
Charter of the Bank. No more than two directors may also be employees of the
Company or any affiliate thereof.

       Section 2. Except as provided in these Bylaws or as otherwise required by
law, there shall be no qualifications for election or service as directors of
the Company. In addition to any other provisions of these Bylaws, to be
qualified for nomination for Election or appointment to the Board of Directors
each person must have not attained the age of sixty-nine years at the time of
such election or appointment, provided however, the Nominating and Corporate
Governance Committee may waive such qualification as to a particular candidate
otherwise qualified to serve as a director upon a good faith determination by
such committee that such a waiver is in the best interests of the Company and
its stockholders. The Chairman of the Board of Directors shall not be qualified
to continue to serve as a director upon the termination of his or her services
in that office for any reason.

       Section 3. The class of Directors so elected shall hold office for three
years or until


<PAGE>   49

their successors are elected and qualified.

       Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.

       Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.

       Section 6. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.

       Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.

       Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.

       Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.

       Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.

       Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.

       Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.


                                   ARTICLE III
                                   COMMITTEES


                                       2
<PAGE>   50

         Section 1.  Executive Committee

              (A) The Executive Committee shall be composed of not more than
nine members who shall be selected by the Board of Directors from its own
members and who shall hold office during the pleasure of the Board.

              (B) The Executive Committee shall have all the powers of the Board
of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.

              (C) The Executive Committee shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The majority
of its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.

              (D) Minutes of each meeting of the Executive Committee shall be
kept and submitted to the Board of Directors at its next meeting.

              (E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.

              (F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of these By-Laws.


                                       3
<PAGE>   51

       Section 2. Audit Committee

              (A) The Audit Committee shall be composed of five members who
shall be selected by the Board of Directors from its own members, none of whom
shall be an officer of the Company, and shall hold office at the pleasure of the
Board.

              (B) The Audit Committee shall have general supervision over the
Audit Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.

              (C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.

       Section 3. Compensation Committee

              (A) The Compensation Committee shall be composed of not more than
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.

              (B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.

              (C) Meetings of the Compensation Committee may be called at any
time by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.


                                        4
<PAGE>   52

       Section 4. Associate Directors

              (A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.

              (B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.

       Section 5. Absence or Disqualification of Any Member of a Committee

              (A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member.


                                   ARTICLE IV
                                    OFFICERS

       Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.

       Section 2. The Vice Chairman of the Board. The Vice Chairman of the Board
of Directors shall preside at all meetings of the Board of Directors at which
the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.

       Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors. In the absence of the Chairman of the Board
the President shall have the powers and duties of the Chairman of the Board.

       Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.


                                       5
<PAGE>   53

       Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.

       Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.

       Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for all
monies, funds and valuables of the Company and for the keeping of proper records
of the evidence of property or indebtedness and of all the transactions of the
Company. He shall have general supervision of the expenditures of the Company
and shall report to the Board of Directors at each regular meeting of the
condition of the Company, and perform such other duties as may be assigned to
him from time to time by the Board of Directors of the Executive Committee.

       Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.

       There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.

       Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.

       There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.

       Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.


                                       6
<PAGE>   54

       Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.


                                    ARTICLE V
                          STOCK AND STOCK CERTIFICATES

       Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.

       Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.

       Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.


                                       7
<PAGE>   55

                                   ARTICLE VI
                                      SEAL

       Section 1. The corporate seal of the Company shall be in the following
form:

                  Between two concentric circles the words
                  "Wilmington Trust Company" within the inner
                  circle the words "Wilmington, Delaware."


                                   ARTICLE VII
                                   FISCAL YEAR

       Section 1. The fiscal year of the Company shall be the calendar year.


                                  ARTICLE VIII
                     EXECUTION OF INSTRUMENTS OF THE COMPANY

       Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.


                                   ARTICLE IX
               COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES

       Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.


                                       8
<PAGE>   56

                                    ARTICLE X
                                 INDEMNIFICATION

       Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.

              (B) The Corporation shall pay the expenses incurred in defending
any proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a Director or officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.

              (C) If a claim for indemnification or payment of expenses, under
this Article X is not paid in full within ninety days after a written claim
therefor has been received by the Corporation the claimant may file suit to
recover the unpaid amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim. In any such
action the Corporation shall have the burden of proving that the claimant was
not entitled to the requested indemnification of payment of expenses under
applicable law.

              (D) The rights conferred on any person by this Article X shall not
be exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these
By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.

              (E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.

                                   ARTICLE XI
                            AMENDMENTS TO THE BY-LAWS

       Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part,


                                       9
<PAGE>   57

and any new By-Law or By-Laws adopted at any regular or special meeting of the
Board of Directors by a vote of the majority of all the members of the Board of
Directors then in office.


                                       10
<PAGE>   58

                                    EXHIBIT C




                             SECTION 321(b) CONSENT


       Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.



                                        WILMINGTON TRUST COMPANY


Dated: April 17, 2001                   By:   /s/ Michael A. DiGregorio
                                           -------------------------------------
                                        Name: Michael A. DiGregorio
                                        Title: Vice President


<PAGE>   59

                                    EXHIBIT D

                                     NOTICE


              This form is intended to assist state nonmember banks and savings
              banks with state publication requirements. It has not been
              approved by any state banking authorities. Refer to your
              appropriate state banking authorities for your state publication
              requirements.



REPORT OF CONDITION

Consolidating domestic subsidiaries of the

      WILMINGTON TRUST COMPANY            of     WILMINGTON
- -----------------------------------------    ------------------
         Name of Bank                            City

in the State of DELAWARE, at the close of business on December 31, 2000.



ASSETS
<TABLE>
<CAPTION>
                                                                                 Thousands of dollars
<S>                                                                              <C>
Cash and balances due from depository institutions:
         Noninterest-bearing balances and currency and coins ...................        218,332
         Interest-bearing balances .............................................              0
Held-to-maturity securities ....................................................         19,838
Available-for-sale securities ..................................................      1,378,378
Federal funds sold and securities purchased under agreements to resell .........        463,241
Loans and lease financing receivables:
         Loans and leases, net of unearned income ..............................      4,724,939
         LESS: Allowance for loan and lease losses .............................         70,118
         LESS: Allocated transfer risk reserve .................................              0
         Loans and leases, net of unearned income, allowance, and reserve ......      4,654,821
Assets held in trading accounts ................................................              0
Premises and fixed assets (including capitalized leases) .......................        124,599
Other real estate owned ........................................................            661
Investments in unconsolidated subsidiaries and associated companies ............          1,697
Customers' liability to this bank on acceptances outstanding ...................              0
Intangible assets ..............................................................          4,727
Other assets ...................................................................        133,523
Total assets ...................................................................      6,999,817
</TABLE>


                                                          CONTINUED ON NEXT PAGE


<PAGE>   60

LIABILITIES

<TABLE>
<S>                                                                                   <C>
Deposits:
In domestic offices ............................................................      5,238,186
         Noninterest-bearing ...................................................        988,834
         Interest-bearing ......................................................      4,249,352
Federal funds purchased and Securities sold under agreements to repurchase .....        404,964
Demand notes issued to the U.S. Treasury .......................................         30,757
Trading liabilities (from Schedule RC-D) .......................................              0
Other borrowed money: ..........................................................
         With original maturity of one year or less ............................        662,000
         With original maturity of more than one year ..........................         43,000
Bank's liability on acceptances executed and outstanding .......................              0
Subordinated notes and debentures ..............................................              0
Other liabilities (from Schedule RC-G) .........................................        139,606
Total liabilities ..............................................................      6,518,513
</TABLE>


EQUITY CAPITAL

<TABLE>
<S>                                                                                    <C>
Perpetual preferred stock and related surplus ..................................               0
Common Stock ...................................................................             500
Surplus (exclude all surplus related to preferred stock) .......................          62,118
Undivided profits and capital reserves .........................................         423,463
Net unrealized holding gains (losses) on available-for-sale securities .........          (4,777)
Total equity capital ...........................................................         481,304
Total liabilities, limited-life preferred stock, and equity capital ............       6,999,817
</TABLE>


                                        2
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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