<SUBMISSION>
<ACCESSION-NUMBER>0000891618-01-501730
<TYPE>S-3
<PUBLIC-DOCUMENT-COUNT>9
<FILING-DATE>20010814
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>CALPINE CORP
<CIK>0000916457
<ASSIGNED-SIC>4911
<IRS-NUMBER>770212977
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-3
<ACT>33
<FILE-NUMBER>333-67446
<FILM-NUMBER>1708179
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>50 WEST SAN FERNANDO ST
<CITY>SAN JOSE
<STATE>CA
<ZIP>95113
<PHONE>4089955115
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>50 W SAN FERNANDO
<STREET2>SUITE 500
<CITY>SAN JOSE
<STATE>CA
<ZIP>95113
</MAIL-ADDRESS>
</FILER>
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>CALPINE CANADA ENERGY FINANCE II ULC
<CIK>0001157373
<ASSIGNED-SIC>
<IRS-NUMBER>871031613
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-3
<ACT>33
<FILE-NUMBER>333-67446-01
<FILM-NUMBER>1708180
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>800, PURDY'S WHARF, TOWER 1
<STREET2>1959 UPPER WATER STREET, P.O. BOX 997
<CITY>HALIFAX
<STATE>A1
<ZIP>00000
<PHONE>4087921158
</BUSINESS-ADDRESS>
</FILER>
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>CALPINE CANADA ENERGY FINANCE ULC
<CIK>0001137032
<ASSIGNED-SIC>
<STATE-OF-INCORPORATION>A5
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-3
<ACT>33
<FILE-NUMBER>333-67446-02
<FILM-NUMBER>1708181
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>50 WEST SAN FERNANDO ST
<CITY>SAN JOSE
<STATE>CA
<ZIP>95113
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>50 WEST SAN FERNANDO ST
<CITY>SAN JOSE
<STATE>CA
<ZIP>95113
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>f74776ors-3.txt
<DESCRIPTION>FORM S-3
<TEXT>
<PAGE>   1

    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 14, 2001
                                                   REGISTRATION NO. 333-[      ]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

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

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

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

<Table>
<S>                                    <C>                                    <C>
               DELAWARE                                 4911                                77-0212977
             NOVA SCOTIA                                4911                              NOT APPLICABLE
             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 CANADA ENERGY FINANCE ULC
                                                                   CALPINE CANADA ENERGY FINANCE II ULC
                                                                    SUITE 800, PURDY'S WHARF, TOWER 1
                  CALPINE CORPORATION                                    1959 UPPER WATER STREET
              50 WEST SAN FERNANDO STREET                                      P.O. BOX 997
               SAN JOSE, CALIFORNIA 95113                              HALIFAX, NOVA SCOTIA B3J 3N2
                     (408) 995-5115                                           (902) 420-3335
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,      (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                       INCLUDING                                                INCLUDING
AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)  AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)

                                                                              ANN B. CURTIS
                                                                  EXECUTIVE VICE PRESIDENT AND SECRETARY
                    PETER CARTWRIGHT                                CALPINE CANADA ENERGY FINANCE ULC
    CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER,               CALPINE CANADA ENERGY FINANCE II ULC
                  CALPINE CORPORATION                                    C/O CALPINE CORPORATION
              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        (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
                        NUMBER,                                                  NUMBER,
       INCLUDING AREA CODE, OF AGENT FOR SERVICE)               INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</Table>

                                WITH COPIES TO:

<Table>
<S>                                                      <C>
                    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.

    PURSUANT TO RULE 429 UNDER THE SECURITIES ACT, THE PROSPECTUS IN THIS
REGISTRATION STATEMENT ALSO RELATES TO $275,000,000 OF UNSOLD COMMON STOCK,
PREFERRED STOCK AND DEBT SECURITIES OF CALPINE CORPORATION REGISTERED ON
REGISTRATION STATEMENT NO. 333-40652 PREVIOUSLY FILED BY CALPINE CORPORATION ON
FORM S-3 AND DECLARED EFFECTIVE ON AUGUST 3, 2001, AND $1,000,000,000 OF UNSOLD
COMMON STOCK, PREFERRED STOCK AND DEBT SECURITIES OF CALPINE CORPORATION AND
DEBT SECURITIES OF CALPINE CANADA ENERGY FINANCE ULC GUARANTEED BY CALPINE
CORPORATION REGISTERED ON REGISTRATION STATEMENT NO. 333-57338, PREVIOUSLY FILED
BY CALPINE CORPORATION AND CALPINE CANADA ENERGY FINANCE ULC ON FORM S-3 AND
DECLARED EFFECTIVE ON APRIL 19, 2001. PURSUANT TO RULE 457 UNDER THE SECURITIES
ACT, NO ADDITIONAL FILING FEE IS DUE ON SUCH SECURITIES IN CONNECTION WITH THIS
REGISTRATION STATEMENT. THIS REGISTRATION STATEMENT CONSTITUTES A POST-EFFECTIVE
AMENDMENT TO EACH OF REGISTRATION STATEMENTS NOS. 333-40652 AND 333-57338 AND
SUCH POST-EFFECTIVE AMENDMENTS SHALL BECOME EFFECTIVE CONCURRENTLY WITH THE
EFFECTIVENESS OF THIS REGISTRATION STATEMENT AND IN ACCORDANCE WITH SECTION 8(C)
OF THE SECURITIES ACT.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>   2

                        CALCULATION OF REGISTRATION FEE

<Table>
<S>                              <C>                    <C>                    <C>                    <C>
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
    TITLE OF EACH CLASS OF                                 PROPOSED MAXIMUM       PROPOSED MAXIMUM
          SECURITIES                  AMOUNT TO BE        OFFERING PRICE PER     AGGREGATE OFFERING        AMOUNT OF
       TO BE REGISTERED           REGISTERED(1)(2)(3)       UNIT(1)(2)(3)          PRICE(1)(2)(3)      REGISTRATION FEE
-------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.001
  per share, of Calpine
  Corporation(4)...............
-------------------------------------------------------------------------------------------------------------------------
Preferred Stock, par value
  $.001 per share, of Calpine
  Corporation(5)...............
-------------------------------------------------------------------------------------------------------------------------
Debt Securities of Calpine
  Corporation(5)...............
-------------------------------------------------------------------------------------------------------------------------
Debt Securities of Calpine
  Canada Energy Finance ULC....
-------------------------------------------------------------------------------------------------------------------------
Debt Securities of Calpine
  Canada Energy Finance II
  ULC..........................
-------------------------------------------------------------------------------------------------------------------------
Guarantees of Calpine
  Corporation(6)...............
-------------------------------------------------------------------------------------------------------------------------
          Total................      $1,500,000,000              100%              $1,500,000,000          $375,000
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
</Table>

(1) Includes such indeterminate number of shares of our common stock and
    preferred stock and principal amount of our debt securities as may be
    periodically issued at indeterminate prices or, if any debt securities are
    issued with original issue discount, such greater principal amount as shall
    be equal to the principal amount at maturity thereof.

(2) In United States dollars or the equivalent thereof in any other currency,
    currency unit or units, or composite currency or currencies.

(3) Estimated solely for the purposes of calculating the registration fee
    pursuant to Rule 457. The aggregate public offering price of our common
    stock, preferred stock and debt securities registered hereunder (or, in the
    case of debt securities issued with original issue discount, the principal
    amount at maturity thereof) will not exceed $1,500,000,000.

(4) Includes certain preferred stock purchase rights (the "Rights") associated
    with shares of the common stock of Calpine Corporation. Until the occurrence
    of certain prescribed events, none of which have occurred, the Rights are
    not exercisable, are evidenced by the certificate representing the common
    stock and will be transferred along with and only with the common stock.

(5) To the extent convertible preferred stock and/or convertible debt securities
    are issued hereunder, shares of common stock issuable upon conversion
    thereof will be issued without the payment of additional consideration.
    Pursuant to Rule 457(i) under the Securities Act, no registration fee is
    attributable to the common stock which may be issued upon conversion of such
    preferred stock or debt securities.

(6) The debt securities to be issued by Calpine Canada Energy Finance ULC and
    Calpine Canada Energy Finance II ULC will be irrevocably and unconditionally
    guaranteed on an unsecured senior basis by Calpine Corporation. No separate
    consideration will be received for the guarantees of Calpine Corporation
    and, therefore, no additional registration fee is payable in respect of the
    registration of such guarantees.
<PAGE>   3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

                  SUBJECT TO COMPLETION, DATED AUGUST 14, 2001

PROSPECTUS

<Table>
<S>                             <C>                                          <C>

                                            CALPINE CORPORATION
                                                Common Stock
                                              Preferred Stock
[CALPINE CORP. LOGO]                          Debt Securities
</Table>

                       CALPINE CANADA ENERGY FINANCE ULC

                   Debt Securities Fully and Unconditionally
                       Guaranteed by Calpine Corporation

                      CALPINE CANADA ENERGY FINANCE II 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.

     Calpine Canada Energy Finance ULC and Calpine Canada Energy Finance II ULC
may each periodically sell debt securities to the public. Such debt securities
will be fully and unconditionally guaranteed by Calpine Corporation. Calpine
Canada Energy Finance ULC or Calpine Canada Energy Finance II ULC, as the case
may be, 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 THESE SECURITIES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS" ON
PAGE 11.

     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 these securities unless it is
accompanied by a prospectus supplement.

                      Prospectus dated             , 2001.
<PAGE>   4

     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.................    1
Calpine Corporation...................    2
Calpine Canada Energy Finance ULC.....    9
Calpine Canada Energy Finance II
  ULC.................................   10
Risk Factors..........................   11
Where You Can Find More Information;
  Documents Incorporated by
  Reference...........................   11
Forward-Looking Statements............   13
Calpine Consolidated Ratio of Earnings
  to Fixed Charges....................   14
</Table>

<Table>
<Caption>
                                        PAGE
                                        ----
<S>                                     <C>
Use of Proceeds.......................   14
Plan of Distribution..................   14
Description of Capital Stock..........   16
Description of the Debt Securities....   21
Certain United States Federal Income
  Tax Consequences....................   36
Certain Canadian Federal Income Tax
  Considerations......................   50
Legal Matters.........................   50
Experts...............................   50
</Table>

                                        i
<PAGE>   5

                             ABOUT THIS PROSPECTUS

     This document is called a prospectus and is part of a joint registration
statement that Calpine Corporation, Calpine Canada Energy Finance ULC and
Calpine Canada Energy Finance II ULC, which we refer to as "Energy Finance" and
"Energy Finance II," respectively, 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 its common stock, preferred stock
and debt securities described in this prospectus, and Energy Finance and Energy
Finance II may from time to time sell their respective debt securities fully and
unconditionally guaranteed by Calpine described in this prospectus, in one or
more offerings which will aggregate up to a total dollar amount of
$2,775,000,000, 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 Energy Finance or Energy
Finance II in this prospectus, because:

     - all of the voting rights of each of Energy Finance and Energy Finance II
       are owned by Calpine, either directly or through wholly-owned
       subsidiaries of Calpine, which files periodic and other reports with the
       SEC pursuant to the Securities Exchange Act of 1934;

     - Neither Energy Finance nor Energy Finance II has operations other than
       the investment of funds in Calpine or its subsidiaries; and

     - Calpine will fully and unconditionally guarantee the obligations of
       Energy Finance and Energy Finance II, and the rights of holders of their
       debt securities, and no subsidiary of Calpine will guarantee the
       obligations of Energy Finance or Energy Finance II.

     This prospectus provides you with a general description of the common
stock, preferred stock and debt securities we may offer. Each time we sell such
securities, whether by Calpine, Energy Finance or Energy Finance II, 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; Documents Incorporated by Reference."

     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; Documents
Incorporated by Reference."

     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 "Energy Finance" are to
Calpine Canada Energy Finance ULC, references to "Energy Finance II" are to
Calpine Canada Energy Finance II 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.

                                        1
<PAGE>   6

                              CALPINE CORPORATION

     We are a leading independent power company engaged in the development,
acquisition, ownership and operation of power generation facilities and the sale
of electricity and steam in the United States and Canada. We have experienced
significant growth in all aspects of our business over the last five years.
Currently, we own interests in 58 power plants having a net capacity of 9,626
megawatts. We also have 27 gas-fired projects under construction having a net
capacity of 14,932 megawatts and have announced plans to develop 29 gas-fired
projects (power plants and expansions of current facilities) with a net capacity
of 16,618 megawatts. Upon completion of the projects under construction, we will
have interests in 81 power plants located in 22 states and Canada, having a net
capacity of 24,558 megawatts. Of this total generating capacity, 97% will be
attributable to gas-fired facilities and 3% 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. Except as otherwise noted herein, financial information in
this prospectus does not reflect any impact on our financial position or results
of operations that will result from our business combination under the
pooling-of-interests method of accounting consummated on April 19, 2001, with
Encal Energy Ltd.

<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, power
marketing 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.

     We are a corporation organized and existing under the laws of the State of
Delaware. Our principal executive office is located at 50 West San Fernando
Street, San Jose, California 95113. Our registered office is located at 9 East
Loockerman Street, Dover, Delaware 19901, c/o National Registered Agents, Inc.

                                        2
<PAGE>   7

CAPITALIZATION

     The following table sets forth, as of March 31, 2001 (1) Calpine's actual
consolidated capitalization; and (2) Calpine's consolidated capitalization as
adjusted to reflect the net effect of (a) the amendment on July 26, 2001 of
Calpine's Amended and Restated Certificate of Incorporation to increase from
500,000,000 to 1,000,000,000 the number of shares of common stock that Calpine
has the authority to issue, (b) our acquisition of WRMS Engineering, Inc. on
April 3, 2001, including the issuance of shares of Calpine common stock in
connection therewith, (c) Calpine's business combination with Encal, including
the issuance of shares of Calpine's common stock upon exchange of the
exchangeable securities offered thereby, (d) the sale of $1.5 billion in
aggregate principal amount of Energy Finance's 8 1/2% Senior Notes Due 2008
guaranteed by Calpine and the use of the proceeds thereof, (e) the sale of $1.0
billion in aggregate principal amount of Calpine's Zero-Coupon Convertible
Debentures Due 2021 and the use of the proceeds thereof, (f) the redemption of
$105 million in aggregate principal amount of Calpine 9 1/4% Senior Notes Due
2004 and (g) the second quarter 2001 borrowings under the Calpine Construction
Finance Company debt revolvers. The adjustments do not reflect normal day-to-day
operations or the potential issuance of securities offered hereby. This table
should be read in conjunction with the consolidated financial statements and
related notes thereto and the unaudited pro forma combined condensed financial
statements and related notes thereto incorporated by reference in this
prospectus.

<Table>
<Caption>
                                                                  MARCH 31, 2001
                                                             -------------------------
                                                               ACTUAL      AS ADJUSTED
                                                             ----------    -----------
                                                                    (UNAUDITED)
                                                               (IN THOUSANDS, EXCEPT
                                                                  SHARE AMOUNTS)
<S>                                                          <C>           <C>
SHORT-TERM DEBT:
Notes payable and borrowings under lines of credit, current
  portion..................................................  $      851    $       851
Project financing, current portion.........................      91,571          1,177
Capital lease obligation, current portion..................       2,050          2,050
Zero-Coupon Convertible Debentures Due 2021................          --      1,000,000
                                                             ----------    -----------
                                                                 94,472      1,004,078
LONG-TERM DEBT:
Notes payable and borrowings under lines of credit, net of
  current portion..........................................     133,955          7,713
Project financing, net of current portion..................   1,646,564      1,712,059
Senior notes...............................................   3,701,750      5,096,750
Capital lease obligation, net of current portion...........     208,840        209,065
                                                             ----------    -----------
     Total long-term debt..................................   5,691,109      7,025,587
                                                             ----------    -----------
Company-obligated mandatorily redeemable convertible
  preferred securities of subsidiary trusts................   1,122,686      1,122,686
Minority interests.........................................      41,180         41,180
                                                             ----------    -----------
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value:
  10,000,000 shares authorized; no shares outstanding,
     actual, and one share outstanding, as adjusted........          --             --
                                                             ----------    -----------
Common stock, $.001 par value:
  500,000,000 shares authorized, actual, and 1,000,000,000
     shares authorized, as adjusted; 285,113,768 shares
     outstanding, actual, and 301,868,577 shares
     outstanding, as adjusted..............................         285            302
Additional paid-in capital.................................   1,734,202      1,942,642
Retained earnings..........................................     631,394        632,302
Accumulated other comprehensive loss.......................     (56,694)       (87,073)
                                                             ----------    -----------
     Total stockholders' equity............................   2,309,187      2,488,173
                                                             ----------    -----------
     Total capitalization..................................  $9,258,634    $11,681,704
                                                             ==========    ===========
</Table>

                                        3
<PAGE>   8

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, as well as 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 this 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,
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.

     - 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

     In addition to the recent developments described below, please see the
recent developments described in our Annual Report on Form 10-K for the year
ended December 31, 2000, our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2001, and our Current Reports on Form 8-K dated April 19, 2001, June
26, 2001, July 6, 2001, July 12, 2001 and July 26, 2001, each of which are
incorporated by reference in this prospectus.

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<PAGE>   9

     Second Quarter 2001 Earnings. On July 26, 2001, we announced earnings for
the quarter ended June 30, 2001. Net income from recurring operations (before
deduction of nonrecurring merger costs incurred in connection with the Encal
pooling of interests transaction) was $132.2 million for the quarter ended June
30, 2001, representing a 122% increase over 2000 second quarter net income of
$59.5 million. Diluted earnings per share from recurring operations (before
deduction of nonrecurring merger costs of $0.07 per share) for the second
quarter rose 95% to $0.39 per share, from $0.20 per share for the same period
last year. After nonrecurring merger costs of $0.07 per share in connection with
the Encal merger, second quarter profit was $107.7 million or $0.32 per share.
Revenue for the quarter increased 284% to $1.6 billion, from $417 million a year
ago. Total assets at June 30, 2001 were approximately $16.0 billion as compared
to $10.3 billion at December 31, 2000. As a result of the completion of the
Encal pooling-of-interests transaction, the financial results for the quarter
and six months ended June 30, 2000, and for the quarter ended March 31, 2001,
have been restated to include Encal. Earnings for the quarter and six months
ended June 30, 2001, benefited primarily from the continued execution of our
program to own and operate low-cost generating facilities in key power markets
throughout the United States and Calpine Energy Services' successful power
systems program.

     Acquisitions. On April 19, 2001, we closed the acquisition of all of the
common shares of Encal Energy Ltd. (which was thereafter merged with and into
Calpine Canada Resources Ltd.), a Calgary, Alberta-based natural gas and
petroleum exploration and development company, through a stock-for-stock
exchange in which Encal shareholders received, in exchange for each share of
Encal common stock, .1493 shares of Calpine common equivalent shares (called
"exchangeable shares") of our subsidiary, Calpine Canada Holdings Ltd. A total
of 16,603,633 exchangeable shares were issued to Encal shareholders in exchange
for their Encal common stock. Each exchangeable share is exchangeable for one
share of our common stock. The aggregate value of the transaction is
approximately U.S.$1.1 billion, including the assumed indebtedness of Encal. The
transaction was accounted for under the pooling-of-interests method. With the
addition of Encal's assets, which currently produce approximately 230 million
cubic feet of gas equivalent ("mmcfe") per day, net of royalties, our net
production increased to 390 mmcfe per day in North America, enough to fuel
approximately 2,300 megawatts of our power fleet.

     On May 15, 2001, we announced that our wholly-owned subsidiary, Canada
Power Holdings Ltd., had entered into a letter of intent to acquire from British
Columbia-based Westcoast Energy, Inc., a 100% interest in Westcoast's
250-megawatt facility located on Vancouver Island and a 50% interest in its
50-megawatt facility located in Ontario. The acquisition is expected to close in
the third quarter of this year and is subject to final documentation and third
party and regulatory approvals.

     On July 5, 2001, we announced an agreement to acquire a 1,200-megawatt
natural gas-fired power plant at Saltend near Hull, Yorkshire, England from
Entergy Wholesale Operations for up to approximately L562.5 million
(approximately U.S.$800 million at current exchange rates). The Saltend
facility, a cogeneration facility, provides electricity and steam for BP
Chemical's Hull Works plant under a 15-year agreement. The balance of the
Saltend facility's electricity output is sold into the deregulated UK power
market. The Saltend transaction will be our first acquisition of a power
facility in Europe. The acquisition is expected to close in the third quarter of
this year and is subject to third party approvals.

     On July 10, 2001, we announced an agreement to acquire approximately 85% of
the voting stock of Michael Petroleum Corporation, a Houston, Texas-based
natural gas exploration and development company, for approximately $338.5
million and the assumption of $44.1 million of debt. The acquisition includes
204 billion cubic feet equivalent of proven natural gas reserves currently
producing 43 mmcfe per day and an inventory of high quality, low risk drilling
locations within a 94,000 acreage position in close proximity to our South Texas
Magic Valley and Hidalgo Energy Centers. The acquisition is expected to close in
the third quarter of this year.

     Turbine Contract. On April 19, 2001, we announced the purchase of 35 model
7FB and 11 model 7FA gas-fired turbines from GE Power Systems. We expect to take
delivery of five turbines in 2002, with the remainder of the contract to be
filled by the end of 2005. With this purchase, we have firm orders in

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place for the delivery of 203 turbines which, when operated in a combined-cycle
configuration, will produce approximately 50,000 megawatts of baseload capacity.

     Securities. On April 25, 2001, Energy Finance, our indirect wholly-owned
subsidiary, issued $1.5 billion in aggregate principal amount of its 8 1/2%
Senior Notes Due 2008. The Senior Notes Due 2008 are fully and unconditionally
guaranteed by us.

     On April 30, 2001, we completed the private placement in a Rule 144A
transaction of $1.0 billion aggregate principal amount of our Zero-Coupon
Convertible Debentures Due 2021. Each debenture is convertible into 13.2714
shares of our common stock (representing an initial conversion price of $75.35
per share of common stock). The debentures do not pay interest, except that
interest may become payable in certain circumstances if the trading price of the
debentures falls below a designated level.

     On June 7, 2001, we redeemed all $105 million in aggregate outstanding
principal amount of our 9 1/4% Senior Notes Due 2004 at a redemption price of
100% of the principal amount plus accrued interest to the redemption date.

     California Power Market. The deregulation of the California power market
has produced significant unanticipated results in the past year and a half. The
deregulation froze the rates that utilities can charge their retail and business
customers in California, until recent rate increases approved by the California
Public Utilities Commission ("CPUC"), and prohibited the utilities from buying
power on a forward basis, while wholesale power prices were not subjected to
limits.

     In the past year and a half, 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 under-recovery of costs by
these utilities. 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 under Calpine's
long-term qualifying facility ("QF") contracts, which are subject to federal
regulation under the Public Utility Regulatory Policies Act of 1978, as amended
("PURPA"). The PG&E QF contracts are in place at 11 of our facilities and
represent nearly 600 megawatts of electricity for Northern California customers.

     PG&E Bankruptcy Proceedings. On April 6, 2001, PG&E filed for bankruptcy
protection under Chapter 11 of the United States Bankruptcy Code. As of April 6,
2001, Calpine had recorded approximately $266 million in accounts receivable
with PG&E under its QF contracts, plus a $69 million note receivable not yet due
and payable. Calpine is currently selling power to PG&E pursuant to its long-
term QF contracts, and PG&E has been paying on a current basis for these
purchases since its bankruptcy filing. With respect to the receivables recorded
under these contracts on July 6, 2001, Calpine announced that it had entered
into a binding agreement with PG&E to modify all of Calpine's QF contracts with

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<PAGE>   11

PG&E and that, based upon such modification, PG&E had agreed to assume all of
the QF contracts. Under the terms of this agreement, Calpine will continue to
receive its contractual capacity payments under the QF contracts, plus a
five-year fixed energy component that averages 5.37 cents per kilowatt-hour. In
addition, all past due receivables under the QF contracts will be elevated to
administrative priority status in the PG&E bankruptcy proceeding and will be
paid to Calpine, with interest, upon the effective date of a confirmed plan of
reorganization. Administrative claims enjoy priority over payments made to the
general unsecured creditors in bankruptcy. The bankruptcy court approved the
agreement on July 12, 2001. Calpine cannot predict when the bankruptcy court
will confirm a plan of reorganization for PG&E.

     CPUC Proceedings Regarding QF Contract Pricing. Our QF contracts with PG&E
provide that the 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. The CPUC has issued a proposed decision to the effect that
the PX price was the appropriate price for energy payments under the California
Public Utility Code. However, a final decision has not been issued to date.
Therefore, 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.

     On March 28, 2001, the CPUC issued an order (Decision 01-03-067) (the
"March 2001 Decision") proposing to change, on a prospective basis, the
composition of the short run avoided cost ("SRAC") energy price formula, which
is reset monthly, used by the California utilities in QF contracts. Prior to the
March 2001 Decision, CPUC regulations calculated SRAC based on 50% Topock and
50% Malin border gas indices. In the March 2001 Decision, the CPUC changed this
formulation to eliminate the prices at Topock from the SRAC formula. The March
2001 Decision is subject to challenges at the CPUC and the Federal Regulatory
Energy Commission.

     On June 14, 2001, however, the CPUC issued an order (Decision 01-06-015)
(the "June 2001 Decision") that authorized the California utilities, including
PG&E, to amend QF contracts to elect a fixed energy price component that
averages 5.37 cents per kilowatt-hour for a five-year term under those contracts
in lieu of using the SRAC energy price formula. By this order, the CPUC
authorized the QF contract energy price amendments without further CPUC
concurrence. As part of the agreement we entered into with PG&E pursuant to
which PG&E agreed to assume its QF contracts with us in bankruptcy, PG&E agreed
with us to amend these contracts to adopt the fixed price component that
averages 5.37 cents pursuant to the June 2001 Decision. This election became
effective as of July 16, 2001. As a result of the June 2001 Decision and our
agreement with PG&E to amend the QF contracts to adopt the fixed price energy
component, the energy price component in our QF contracts is now fixed for five
years and we are no longer subject to any uncertainty that may have existed with
respect to this component of our QF contract pricing as a result of the March
2001 Decision. Further, the March 2001 Decision has no bearing on PG&E's
agreement with us to assume the QF contracts in bankruptcy or on the amount of
the receivable that was so assumed.

     California Long-Term Supply Contracts. California has 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 in a publicly announced
auction. Calpine successfully bid in that auction and signed several long-term
power supply contracts with DWR.

                                        7
<PAGE>   12

     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, which increases to 1,000
megawatts by January 1, 2004. The electricity will be sold directly to DWR on a
24-hour, 7-day-a-week basis. This contract is contingent upon our satisfaction,
in our sole discretion, that adequate provisions have been made by DWR to assure
us of full payment under the terms of that contract (including the terms and
conditions of any bonds issued by DWR to provide funds for payment of its
obligations under the contract).

     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, Calpine committed to sell up to 1,000 megawatts
of generation. Initial deliveries began 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, Calpine 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. Each of these contracts is also contingent upon our
satisfaction, in our sole discretion, that adequate provisions have been made by
DWR to assure us of full payment under the terms of that contract (including,
but not limited to, the terms and conditions of any bonds issued by DWR to
provide funds for payment of its obligations under that contract).

     FERC Investigation into California Wholesale Markets. In response to the
increase in wholesale energy prices in the California markets, on June 28, 2000,
the Board of Governors of the California Independent System Operator (the
"ISO"), which controls the long-distance high-voltage power lines that deliver
electricity throughout California and the adjoining states, 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
effective August 7, 2000. During this period, however, the 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, FERC instructed its staff to initiate an investigation of the
California power markets and to report its findings to FERC and held further
hearing procedures in abeyance pending the outcome of this investigation. Under
FERC regulations, QF contracts are exempt from regulation under the Federal
Power Act, which is the legislation that provides the authority for FERC to
investigate the California power markets and frame equitable relief with respect
to the California wholesale markets. Therefore, any such relief will only apply
to sales by Calpine in the short-term market. None of our receivables related to
power produced under our long-term QF contracts with PG&E should be affected by
any FERC findings pursuant to the proceedings described below. See "Government
Regulation -- Federal Energy Regulation -- Federal Power Act Regulation" set
forth in our Annual Report on Form 10-K for the year ended December 31, 2000,
which is incorporated by reference in this prospectus.

     On November 1, 2000, FERC released a Staff Report detailing the results of
the staff investigation, together with an "Order Proposing Remedies for
California Wholesale Markets" (the "November 1 Order"). In the November 1 Order,
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 would 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, FERC established

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<PAGE>   13

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 FERC not to be just and reasonable. While 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.

     On December 15, 2000, 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 FERC's December 15 Order. The outcome of these proceedings, and the extent to
which 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.

     On June 19, 2001, FERC ordered price mitigation in 11 states in the western
United States in an attempt to reduce the dependence of the California market on
the spot markets in favor of longer-term committed energy supplies. The order
provides for price mitigation in the spot market throughout the 11-state western
region during "reserve deficiency hours," which is when operating reserves in
California fall below 7%. This price will be a single market clearing price
based upon the marginal operating cost of the last unit dispatched by the
California ISO. In addition, FERC implemented price mitigation in non-reserve
deficiency hours, which will be set at 85% of the market clearing price during
the last reserve deficiency period. These price mitigation procedures went into
effect on June 20, 2001 and will remain in effect until September 30, 2002.

     The retention by FERC of a market-based, rather than a cost-of-service
based, rate structure will enable us to continue to realize benefits from our
efficient, modern power plants. We believe that Calpine's marginal costs will
continue to be below any price cap imposed by FERC, whether during reserve
deficiency hours or at other times. Therefore, we believe that FERC's mitigation
plan will not have a material adverse effect on Calpine's financial condition or
results of operations.

     FERC also ordered all sellers and buyers in wholesale power markets
administered by the California ISO, as well as representatives of the State of
California, to participate in a settlement conference before a FERC
administrative judge. The settlement discussions were intended to resolve all
issues that remain outstanding to resolve past accounts, including sellers'
claims for unpaid invoices, and buyers' claims for refunds of alleged
overcharges, for past periods. The settlement discussions began on June 25, 2001
and ended on July 9, 2001. The Chief Administrative Law Judge issued his report
and recommendation to FERC on July 12, 2001. On July 25, 2001, FERC ordered an
expedited fact-finding hearing to calculate refunds for spot market transactions
in California. The hearing must be completed within 45 days from the date the
California ISO provides certain critical data for the purpose of developing the
factual basis needed to implement the refund methodology and order refunds.
While it is not possible to predict the amount of any refunds until the hearings
take place, based upon the information available at this time, we do not believe
that this proceeding will result in a material adverse effect on Calpine's
financial condition or results of operations.

PRINCIPAL EXECUTIVE OFFICES

     Our principal executive offices are located at 50 West San Fernando Street,
San Jose, California 95113. Our telephone number is (408) 995-5115, and our home
page on the world wide web is at http://www.calpine.com. The contents of our
website are not part of this prospectus.

                       CALPINE CANADA ENERGY FINANCE ULC

     Energy Finance is an unlimited liability company organized in March 2001
under the laws of Nova Scotia, Canada. It is an indirect, wholly-owned special
purpose finance subsidiary of Calpine that engages

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<PAGE>   14

in financing activities to raise funds for the business operations of Calpine
and its subsidiaries. Its direct parent company is Quintana Canada Holdings,
LLC, a Delaware limited liability company. Energy Finance will issue debt
securities which will be fully and unconditionally guaranteed by Calpine.

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

     - all of the voting rights of Energy Finance are owned by Calpine, either
       directly or through its wholly-owned subsidiaries, and Calpine files
       periodic and other reports with the SEC pursuant to the Securities
       Exchange Act of 1934;

     - its sole operations are the investment of funds in Calpine and its
       subsidiaries; and

     - Calpine will fully and unconditionally guarantee its obligations and the
       rights of holders under its debt securities and no subsidiary of Calpine
       will guarantee its obligations.

     The registered office of Energy Finance 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.

                      CALPINE CANADA ENERGY FINANCE II ULC

     Energy Finance II is an unlimited liability company organized in July 2001
under the laws of Nova Scotia, Canada. It is an indirect, wholly-owned special
purpose finance subsidiary of Calpine that engages in financing activities to
raise funds for the business operations of Calpine and its subsidiaries. Its
direct parent company is Calpine Canada Resources Ltd., an Alberta, Canada
corporation. Energy Finance II will issue debt securities which will be fully
and unconditionally guaranteed by Calpine.

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

     - all of the voting rights of Energy Finance II are owned by Calpine,
       either directly or through its wholly-owned subsidiaries, and Calpine
       files periodic and other reports with the SEC pursuant to the Securities
       Exchange Act of 1934;

     - its sole operations are the investment of funds in Calpine and its
       subsidiaries; and

     - Calpine will fully and unconditionally guarantee its obligations and the
       rights of holders under its debt securities and no subsidiary of Calpine
       will guarantee its obligations.

     The registered office of Energy Finance II 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.

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<PAGE>   15

                                  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, and our Quarterly Report on Form 10-Q for the quarter ended March 30,
2001, each of which are 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 us.
Additional risks and uncertainties not presently known to either of us or that
we currently deem immaterial may also impair our respective business operations.

                      WHERE YOU CAN FIND MORE INFORMATION;
                      DOCUMENTS INCORPORATED BY REFERENCE

     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.

     Energy Finance II is not currently subject to the information reporting
requirements of the Securities Exchange Act of 1934, as amended. Although Energy
Finance is subject to such requirements, and Energy Finance II will become
subject to such requirements upon the effectiveness of this registration
statement, in reliance upon the applicable exemption to such requirements,
neither Energy Finance nor Energy Finance II will be required to file separate
reports under the Securities Exchange Act for the reasons set forth under the
captions "Calpine Canada Energy Finance LLC" and "Calpine Canada Energy Finance
II LLC" above.

     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 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;

     - Calpine's Quarterly Report on Form 10-Q for the quarter ended March 31,
       2001;

     - Calpine's Current Reports on Form 8-K dated February 6, 2001, April 9,
       2001, April 19, 2001, April 26, 2001, June 26, 2001, July 6, 2001, July
       12, 2001, July 16, 2001, and July 26, 2001; and

     - the description of Calpine's common stock contained in Calpine's
       Registration Statement on Form 8-A (File No. 001-12079), filed with the
       SEC on August 20, 1996, pursuant to Section 12 of the Securities Exchange
       Act.

     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.

     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

                                        11
<PAGE>   16

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. Copies of
documents described herein are available free of charge upon request as provided
in the preceding paragraph.

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<PAGE>   17

                           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 respective, or
our respective 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
respective, or our respective 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;

     - the uncertainty of the California power market. We are working closely
       with a number of parties to resolve the current uncertainty. This is an
       ongoing process and, therefore, the outcome cannot be predicted. It is
       possible that any such outcome will include changes in government
       regulations, business and contractual relationships or other factors that
       could materially affect us; however, we believe that a final resolution
       will not have a material adverse impact on us; 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, and
       Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, which
       are incorporated by reference in this prospectus.

                                        13
<PAGE>   18

     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.

            CALPINE CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES

     The following table sets forth Calpine's consolidated ratio of earnings to
fixed charges for the indicated periods. This information does not reflect any
impact on Calpine's financial position or results of operations that will result
from its business combination under the pooling-of-interests method of
accounting with Encal on April 19, 2001.

<Table>
<Caption>
       YEAR ENDED DECEMBER 31,           THREE MONTHS
-------------------------------------   ENDED MARCH 31,
1996    1997    1998    1999    2000         2001
-----   -----   -----   -----   -----   ---------------
<S>     <C>     <C>     <C>     <C>     <C>
1.46x.. 1.72x   1.69x   1.77x   2.04x        1.37x
</Table>

     For purposes of computing our consolidated ratio of earnings to fixed
charges, earnings consist of pretax income before adjustment for minority
interests in our 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 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
company-obligated mandatorily redeemable convertible preferred securities of
subsidiary trusts ("HIGH TIDES"(SM)). This information does not reflect any
impact on our financial position or results of operations that will result from
our business combination under the pooling-of-interests method of accounting
consummated on April 19, 2001 with Encal.

                                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, directly or indirectly, 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 Energy Finance or Energy Finance II to which this prospectus
relates will be lent to Calpine or its affiliates by Energy Finance or Energy
Finance II, as applicable, pursuant to one or more intercompany loans.

                              PLAN OF DISTRIBUTION

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

     - Unless we indicate otherwise in the 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.

     If we use an underwriter or underwriters in the offer or sale of our
securities:

     - 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.

                                        14
<PAGE>   19

     - 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.

     If we use a dealer to sell our securities:

     - 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.

     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, Energy Finance
or Energy Finance II, 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.

                                        15
<PAGE>   20

                          DESCRIPTION OF CAPITAL STOCK

     Calpine's authorized capital stock consists of 1,000,000,000 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
incorporated by reference 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 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 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. The
information in the following table reflects the 2 for 1 stock split that became
effective on October 7, 1999, the 2 for 1 stock split that became effective on
June 8, 2000, and the 2 for 1 stock split that became effective on November 14,
2000.

<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...........................................    57.35      36.20
Third Quarter (through August 10, 2001)..................    46.00      30.00
</Table>

                                        16
<PAGE>   21

     As of August 10, 2001, there were approximately 867 holders of record of
our common stock. On August 10, 2001, the last sale price reported on the New
York Stock Exchange for our common stock was $32.09 per share.

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 certain of 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 August 10, 2001, there was one share of our preferred stock
outstanding (see the discussion of Calpine's special voting preferred stock,
below). Our board of directors has the authority, without further vote or action
by the stockholders, to issue from time to time up to a total of 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 1,000,000
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. As of August 10, 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 business combination, a series of preferred
stock of Calpine, consisting of one share, was designated as Special Voting
Preferred Stock of Calpine, having a par value of $.001 per share and a
liquidation preference of $.001. Except as otherwise required by law or
Calpine's certificate of incorporation, the one share of special voting
preferred stock possesses 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, Calpine Canada Holdings Ltd., 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 vote together
as a single class on all matters on which holders of Calpine's common stock are

                                        17
<PAGE>   22

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 was issued to CIBC Mellon Trust Company, as
trustee under a voting and exchange trust agreement among Calpine, Calpine
Canada Holdings Ltd. 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
common stock equivalent shares outstanding not owned by Calpine or an entity
controlled by Calpine, the one 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.

                                        18
<PAGE>   23

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 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. 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.

                                        19
<PAGE>   24

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 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.

                                        20
<PAGE>   25

                       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; Energy Finance may issue from time to time one or more
series of debt securities under one or more indentures between Energy Finance
and Wilmington Trust Company, as trustee; and Energy Finance II may issue from
time to time one or more series of debt securities under one or more indentures
between Energy Finance II 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, to Energy Finance, in the case of
debt securities issued by Energy Finance and to Energy Finance II, in the case
of debt securities issued by Energy Finance II, and references to the
"guarantor" are to Calpine with respect to debt securities issued by Energy
Finance or Energy Finance II. Additionally, in the case of debt securities
issued by Energy Finance or Energy Finance II, the term "indenture" includes the
guarantee agreement pursuant to which Calpine 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, and on the debt securities of Energy Finance and Energy Finance II
under the guarantees, if the guarantees are enforced. 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. Each of Energy Finance
and Energy Finance II is a special purpose financing subsidiary formed solely as
a financing vehicle for Calpine and its subsidiaries. Therefore, the ability of
Energy Finance and Energy Finance II to pay their obligations under the debt
securities is dependent upon the receipt by them of payments from Calpine and
its subsidiaries to which they have made loans or otherwise under agreements
with them in connection with their respective financing activities. In addition,
under Canadian law, the respective direct parent companies of Energy Finance and
Energy Finance II will be liable for their subsidiary's indebtedness, including
any debt securities issued by such subsidiary, upon a winding-up of that
subsidiary. While each of Energy Finance and Energy Finance II believes that
payments made to it in connection with its financing activities will be
sufficient to pay the principal of, and interest on, any debt securities it
issues, if the responsible parties were not able to make such payments for any
reason, the holders of such 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.
Calpine's subsidiaries and other affiliates (other than Energy Finance (in the
case of debt securities issued by Energy Finance) and Energy Finance II (in the
case of debt securities issued by Energy Finance II) and their direct parent
companies, respectively, in the case of the winding-up of its subsidiary) will
not have any obligation to pay any amounts due on the debt securities issued by
Energy Finance or Energy Finance II hereunder and none of Calpine's subsidiaries
or other affiliates will guarantee the payment of
                                        21
<PAGE>   26

interest on or principal of the debt securities issued by Energy Finance or
Energy Finance II 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 Energy
Finance and Energy Finance II). Similarly, the right of holders of Energy
Finance's or Energy Finance II's debt securities 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). As of March 31, 2001, Calpine's
subsidiaries had approximately $1.7 billion of project financing. Calpine
intends to utilize project financing when appropriate in the future, and this
financing will be effectively senior to the debt securities and the guarantees.

     The following description of the debt securities is subject to the detailed
provisions of each indenture, a copy of each of which is filed as an exhibit to
the Registration Statement of which this prospectus is a part and is available
upon request made to us. Whenever particular provisions of any indenture or
terms defined therein are referred to, those provisions or definitions are
incorporated by reference herein and such descriptions are qualified in their
entirety by such reference. 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. 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.

TERMS APPLICABLE TO DEBT SECURITIES

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

     - 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, and, in the case of debt securities issued by
       Energy Finance or Energy Finance II, Canadian, 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.

                                        22
<PAGE>   27

     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 chooses 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 maturity date
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, the Bank of Nova Scotia, as Lead
Arranger and Administrative Agent, Bayerische Landesbank Girozentrale, as
Co-Arranger and Syndication Agent, and the various commercial lending
institutions named therein as lenders (as it may be further amended, refinanced,
replaced, renewed or extended from time to time), 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 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,
Calpine's 8 1/2% Senior Notes Due 2011 and Calpine's Zero-Coupon Convertible
Debentures Due 2021, and indebtedness of its subsidiaries guaranteed by Calpine,
including the 8 1/2% Senior Notes Due 2008 issued by Energy Finance, the Bridge
Credit Agreement, dated as of             , 2001, among Energy Finance, Credit
Suisse First Boston, as co-arranger and syndication agent, Bayerische Landesbank
Girozentrale, as lead arranger and documentation agent, Bank of Nova Scotia, as
lead arranger and administrative agent, and the various commercial lending
institutions named therein as lenders and the Bridge Credit Agreement, dated as
of             , 2001, among Energy Finance II, Credit Suisse First Boston, as
co-arranger and syndication agent, Bayerische Landesbank Girozentrale, as lead
arranger and documentation agent, Bank of Nova Scotia, as lead arranger and
administrative agent, and the various commercial lending institutions named
therein as lenders. At March 31, 2001, Calpine had approximately $4.7 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 Energy Finance or Energy Finance II will
be:

     - senior unsecured obligations of Energy Finance or Energy Finance II, as
       applicable, and will rank equally and ratably with all of its other
       unsecured and unsubordinated indebtedness, 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, including Calpine's indebtedness described above
       including the other indebtedness of its subsidiaries guaranteed by
       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 senior debt securities of

                                        23
<PAGE>   28

Energy Finance and Energy Finance II. The subordinated debt securities of Energy
Finance and Energy Finance II will be subordinate and junior in right of payment
to all of their respective senior indebtedness.

GUARANTEES

     Calpine will fully and unconditionally guarantee to each holder of a debt
security issued by Energy Finance or Energy Finance II 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 Energy Finance or Energy Finance II, as applicable.

     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 Energy Finance or
       Energy Finance II before exercising their rights under the guarantees.

COVENANTS

     The indentures and the guarantee 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 or the guarantee, as applicable,
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,
and such other locations as may be required or specified in any supplement, 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 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.

                                        24
<PAGE>   29

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).

     "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.

                                        25
<PAGE>   30

     "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

          (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.

                                        26
<PAGE>   31

     "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.

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
                                        27
<PAGE>   32

     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
     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

                                        28
<PAGE>   33

     - 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; Documents Incorporated by Reference." 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;

          (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
                                        29
<PAGE>   34

     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.

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
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<PAGE>   35

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

     Unless otherwise provided in the applicable indenture and described in the
applicable prospectus supplement, 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,

          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
                                        31
<PAGE>   36

          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

     In addition, unless otherwise provided in the applicable indenture and
described in the applicable prospectus supplement, with respect to a series of
debt securities issued under an indenture, the provisions of that indenture
described under "-- Covenants -- Limitation on Liens" and
"-- Covenants -- Limitation on Sale/Leaseback Transactions" will no longer be in
effect, clauses (c) (with respect to such covenants) 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

     Unless otherwise provided in the applicable indenture and described in the
applicable prospectus supplement, 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 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

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<PAGE>   37

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.

     - an indenture with Energy Finance, dated as of April 25, 2001.

     A number of Calpine's series of debt securities are presently outstanding
under the first two indentures above and additional securities of those series
and additional series may be issued under the second indenture above. A series
of Energy Finance's debt securities, guaranteed by Calpine, is currently
outstanding under the third indenture above and additional debt securities of
that series and other series, each guaranteed by Calpine, may be offered under
that indenture. 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.

     The holders of a majority in principal amount of the outstanding senior
notes will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the trustee, subject to
certain exceptions. If an event of default occurs (and is not cured), the
trustee will be required, in the exercise of its power, to use the degree of
care of a prudent man in the conduct of his own affairs. Subject to such
provisions, the trustee will be under no obligation to exercise any of its
rights or powers under the indenture at the request of any holder of senior
notes, unless such holder shall have offered to the trustee security and
indemnity satisfactory to the trustee against any loss, liability or expense and
then only to the extent required by the terms of the indenture.
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<PAGE>   38

     The registered office of the trustee is Rodney Square North, 1100 North
Market Street, Wilmington, Delaware.

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 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.

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<PAGE>   39

     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. 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.

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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<PAGE>   40

             CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

     The following is a summary of the material United States federal income tax
consequences of the ownership and disposition of the securities. Unless
otherwise stated, this summary deals only with 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, (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. In addition,
certain trusts in existence on August 20, 1996 and treated as a U.S. holder
prior to such date may also be treated as U.S. holders. As used herein,
"non-U.S. holders" are beneficial owners of the securities, other than
partnerships, that are not U.S. holders for United States federal income tax
purposes. If a partnership (including for this purpose any entity treated as a
partnership for United States federal 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.
Partnerships and partners in such partnerships should consult their tax advisers
about the United States federal income tax consequences of owning 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, U.S. holders who are resident or who carry
on a trade or business in Canada, 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 ownership and disposition of the securities.

TAXATION OF COMMON STOCK OF CALPINE

     This subsection describes the material United States federal income tax
consequences of owning 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 its 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. 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).

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<PAGE>   41

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, preferential tax rates may apply to
such gain if the holder's holding period for the 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 backup withholding tax (currently 30.5%) 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 non-U.S.
holder of common stock 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, 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 an applicable income tax treaty). Except to the extent that
an applicable income 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 income 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 United States federal 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
is required to satisfy certain 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

     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
                                        37
<PAGE>   42

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 and the non-U.S. holder does not qualify for certain exemptions (see
discussion below under "Foreign Investment in Real Property Tax Act").

     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 in the
same manner as a holder who is a United States person. 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). 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 common
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),
it generally will be taxed on the net gain derived from a sale in the same
manner as a holder who is a United States person and, in addition, may be
subject to the branch profits tax on such effectively connected income at a 30%
rate (or such lower rate as may be specified by 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 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. Dividends on common stock held by a non-U.S. holder will be
subject to information reporting and may be subject to backup withholding
requirements 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 specified procedures that the corporation is not (and was not
for the prior five-year period) a "United States real property holding
corporation." We believe it is likely that we are a United States real property
holding corporation and we can give no assurance that we will not continue to be
a United States real property holding corporation in the future. However, so
long as our stock is regularly traded on an established securities market, an
exemption applies with respect to any non-U.S. holder whose beneficial and/or
constructive ownership of common stock is 5% or less 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.

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     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 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 OF CALPINE

     This subsection describes the material United States federal income tax
consequences of owning 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 its 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 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

     A dividend distribution to a corporate holder will generally qualify for
the 70% dividends received deduction. In determining entitlement to the
dividends received deduction, corporate holders should also consider the
provisions of Sections 246(c), 246A and 1059 of the Internal Revenue Code, as
well as Treasury regulations 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 beginning before
and ending 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 an option to sell, is under a contractual obligation to sell, or has made
(and not closed) a short sale of, substantially identical stock or securities,
or (2) 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 stock below zero, requires
immediate recognition of gain, which is treated as gain from the sale or
exchange of the stock. An "extraordinary dividend" includes 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 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 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

                                        39
<PAGE>   44

redemptions will generally be taxable on the cash received in lieu of a
fractional share as a distribution described in "Dividends" above.

     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 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.

Accrued 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, preferential tax rates may apply to such gain
if the holder's holding period for the preferred stock exceeds one year. A
holder's basis in the preferred stock is generally equal to its initial purchase
price.

     Gain or loss recognized by a holder on a redemption of the preferred stock
will be treated as a sale or exchange and therefore qualify for the treatment
described above if certain requirements are satisfied. Generally, these
requirements are satisfied if 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
                                        40
<PAGE>   45

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 requirements for sale or exchange treatment is
satisfied, the entire amount of the cash (or property) received on a redemption
will generally 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 may be
entirely lost to the holder.

Other Preferred Stock

     Special tax rules may apply to certain types of preferred stock. The
applicable prospectus supplement will discuss any such special United States
federal income tax rules with respect to such preferred stock.

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 backup withholding tax (currently 30.5%) 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 non-U.S.
holder of preferred stock 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 an applicable income tax treaty). Except to the extent that
an applicable income 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 income 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 United States 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
is required to satisfy certain certification and other requirements. If you are
eligible for a reduced rate of United States withholding tax

                                        41
<PAGE>   46

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,
Exchange or Redemption of Preferred Stock" is satisfied).

Sale, Exchange or Redemption of Preferred Stock

     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 and the non-U.S. holder does not
qualify for certain exemptions (see discussion below under "Foreign Investment
in Real Property Tax Act").

     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 in the
same manner as a holder who is a United States person. 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). 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 will be taxed on the net gain derived
from a sale in the same manner as a holder who is a United States person and, in
addition, may be subject to the branch profits tax on such effectively connected
income at a 30% rate (or such lower rate as may be specified by an applicable
income tax treaty).

     Gain or loss realized by a non-U.S. holder on a redemption of the preferred
stock will be treated as a sale or exchange and qualify for the treatment
described in this section if certain requirements are satisfied. For a
description of these requirements, see "U.S. Holders -- Sale, Exchange or
Redemption of Preferred Stock," above.

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
                                        42
<PAGE>   47

beneficial owner otherwise establishes an exemption. Dividends on preferred
stock held by a non-U.S. holder will be subject to information reporting and may
be subject to backup withholding requirements 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 specified procedures that the corporation is not (and was not
for the prior five-year period) a "United States real property holding
corporation." We believe it is likely that we are a United States real property
holding corporation and we can give no assurance that we will not continue to be
a United States real property holding corporation in the future. However, so
long as the preferred stock is regularly traded on an established securities
market, an exemption applies with respect to any non-U.S. holder whose
beneficial and/or constructive ownership of preferred stock is 5% or less of the
total fair market value of the preferred stock. In addition, if the preferred
stock is to be regularly traded on an established securities market, but our
common stock continues to be so regularly traded, an exemption will apply if the
fair market value of the non-U.S. holder's interest in the preferred stock is 5%
or less 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 preferred stock
may be required to inform its transferee whether such preferred 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 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 OF CALPINE AND ENERGY FINANCE

     This subsection describes the material United States federal income tax
consequences of owning and disposing of the debt securities offered by Calpine
or 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 and disposing of debt
securities that are due to mature more than 30 years from the date of issue will
be discussed in an applicable prospectus supplement. The discussion regarding
U.S. income tax laws, including the statements regarding the U.S.-Canada double
taxation convention relating to income and capital gains (the "Tax Treaty"),
assumes that any debt securities will be issued, and transfers thereof and
payments thereon will be made, in accordance with the applicable indenture and
deposit agreement.

U.S. HOLDERS OF DEBT SECURITIES

Interest Income

     Subject to the original issue discount rules described below, payments of
interest on the debt securities (including, in the case of debt securities
issued by Energy Finance, the amount of Canadian tax withheld, if any) generally
will be taxable to a U.S. holder as ordinary interest income at the time such
payments are accrued or received (in accordance with the holder's regular method
of tax accounting).

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<PAGE>   48

     A debt security will be treated as issued with original issue discount
("OID") if its stated redemption price at maturity exceeds its issue price by
more than a de minimis amount. Generally, the issue price will be the first
price at which a substantial amount of the debt securities is sold to persons
other than bond houses, brokers or similar persons or organizations acting in
the capacity of underwriters, placement agents or wholesalers. A debt security's
stated redemption price at maturity is the total of all payments on the debt
security that are not payments of qualified stated interest. An interest payment
is qualified stated interest if it is one of a series of stated interest
payments that are unconditionally payable at least annually at a single fixed
rate.

     A debt security is not treated as issued with OID if the OID, i.e., if the
excess of the stated redemption price at maturity of a debt security over its
issue price, is de minimis. For this purpose the amount of OID is de minimis if
it does not exceed the product of 0.25 percent of the stated redemption price at
maturity multiplied by the number of complete years to maturity. If the debt
security has de minimis OID, a holder must generally include the de minimis
amount in income (as capital gain) when stated principal payments are made.

     If the debt securities are treated as issued with OID, a U.S. holder will
be required to include the amount of the OID in income periodically over the
term of the debt security before receipt of the cash or other payment
attributable to such income and irrespective of such holder's general method of
tax accounting. In particular, a U.S. holder of a debt security must include in
gross income, as interest for United States federal income tax purposes, the sum
of the daily portions of OID with respect to the debt security for each day
during the taxable year or portion of a taxable year in which such holder holds
the debt security ("accrued OID"). The daily portion is determined by allocating
to each day of an accrual period a pro rata portion of an amount equal to the
adjusted issue price of the debt security at the beginning of the accrual period
multiplied by the yield to maturity of the debt security and subtracting from
this product the amount of qualified stated interest allocable to the accrual
period. The adjusted issue price of the debt security at the start of any
accrual period is the issue price of the debt security increased by the accrued
OID for each prior accrual period and decreased by the amount of any payments
previously made with respect to the debt security (other than qualified stated
interest).

Source of Income and Foreign Tax Credits With Respect to Debt Securities of
Energy Finance

     If Canadian withholding taxes are imposed on payments on the debt
securities issued by Energy Finance, the eligibility of a U.S. holder for a
United States foreign tax credit with respect to such taxes may be limited if
such U.S. holder is not entitled to benefits under the Tax Treaty because, for
United States foreign tax credit purposes, such payments would constitute income
from sources within the United States. U.S. holders that are entitled to
benefits under the Tax Treaty may, subject to certain limitations, treat the
payments as foreign source income. Interest on the debt securities will
generally constitute "passive income" for United States foreign tax credit
purposes. Moreover, if such Canadian withholding taxes are imposed on interest
payments at a rate that equals or exceeds 5%, such interest income would
constitute "high withholding tax interest" for United States foreign tax credit
purposes. A U.S. holder that does not claim a foreign tax credit may be entitled
to a deduction for United States federal income tax purposes with respect to any
such Canadian withholding taxes. The calculation of foreign tax credits or
deductions involves the application of complex rules that depend on a holder's
particular circumstances. Accordingly, U.S. holders are urged to consult their
tax advisors regarding the creditability or deductibility of such taxes. For a
discussion of the Canadian income tax considerations, see "Certain Canadian
Federal Income Tax Considerations."

Debt Securities Purchased at a Market Discount

     A holder will be considered to have purchased a debt security at a "market
discount" if the holder's adjusted basis in the debt security is less than its
stated redemption price at maturity, or in the case of a debt security issued at
a discount, its adjusted issue price, unless such market discount is a de
minimis amount (generally up to 1/4 of 1 percent of the stated redemption price
or adjusted issue price, as the case may be, on the purchase date multiplied by
its weighted average maturity as of such date). In general, any
                                        44
<PAGE>   49

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

     A holder will be considered to have purchased a debt security at a premium
if the holder's adjusted basis in the debt security immediately after the
purchase is greater than the stated redemption price at maturity of the debt
security. A holder may elect to treat such premium as "amortizable bond
premium," in which case the amount of 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.

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 therefore, increased
by any OID or market discount previously included in income with respect to the
debt security and reduced by any amortizable bond premium. In the case of a
holder other than a corporation, preferential tax rates may apply to gain
recognized on the sale of a debt security if such holder's holding 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 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 backup withholding tax
(currently 30.5%) 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
                                        45
<PAGE>   50

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 non-U.S.
holder of debt securities 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, 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 the issuer or the issuer's agent with a copy
thereof. The applicable United States Treasury regulations also provide
alternative methods for satisfying the certification requirements of clause (4),
above. 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 an applicable income tax 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

                                        46
<PAGE>   51

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 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.

TAXATION OF DEBT SECURITIES OF ENERGY FINANCE II

     This subsection describes the material United States federal income tax
consequences of owning and disposing of the debt securities offered by Energy
Finance II. 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 and disposing of debt securities that are due to
mature more than 30 years from the date of issue will be discussed in an
applicable prospectus supplement. The discussion regarding U.S. income tax laws,
including the statements regarding the Tax Treaty, assumes that any debt
securities will be issued, and transfers thereof and payments thereon will be
made, in accordance with the applicable indenture and deposit agreement.

U.S. HOLDERS OF DEBT SECURITIES

Interest Income

     Subject to the original issue discount rules described below, payments of
interest on the debt securities (including the amount of Canadian tax withheld,
if any) generally will be taxable to a U.S. holder as ordinary interest income
at the time such payments are accrued or received (in accordance with the
holder's regular method of tax accounting).

     A debt security will be treated as issued with original issue discount
("OID") if its stated redemption price at maturity exceeds its issue price by
more than a de minimis amount. Generally, the issue price will be the first
price at which a substantial amount of the debt securities is sold to persons
other than bond houses, brokers or similar persons or organizations acting in
the capacity of underwriters, placement agents

                                        47
<PAGE>   52

or wholesalers. A debt security's stated redemption price at maturity is the
total of all payments on the debt security that are not payments of qualified
stated interest. An interest payment is qualified stated interest if it is one
of a series of stated interest payments that are unconditionally payable at
least annually at a single fixed rate.

     A debt security is not treated as issued with OID if the OID, i.e., if the
excess of the stated redemption price at maturity of a debt security over its
issue price, is de minimis. For this purpose the amount of OID is de minimis if
it does not exceed the product of 0.25 percent of the stated redemption price at
maturity multiplied by the number of complete years to maturity. If the debt
security has de minimis OID, a holder must generally include the de minimis
amount in income (as capital gain) when stated principal payments are made.

     If the debt securities are treated as issued with OID, a U.S. holder will
be required to include the amount of the OID in income periodically over the
term of the debt security before receipt of the cash or other payment
attributable to such income and irrespective of such holder's general method of
tax accounting. In particular, a U.S. holder of a debt security must include in
gross income, as interest for United States federal income tax purposes, the sum
of the daily portions of OID with respect to the debt security for each day
during the taxable year or portion of a taxable year in which such holder holds
the debt security ("accrued OID"). The daily portion is determined by allocating
to each day of an accrual period a pro rata portion of an amount equal to the
adjusted issue price of the debt security at the beginning of the accrual period
multiplied by the yield to maturity of the debt security and subtracting from
this product the amount of qualified stated interest allocable to the accrual
period. The adjusted issue price of the debt security at the start of any
accrual period is the issue price of the debt security increased by the accrued
OID for each prior accrual period and decreased by the amount of any payments
previously made with respect to the debt security (other than qualified stated
interest).

Source of Income and Foreign Tax Credits With Respect to Debt Securities of
Energy Finance II

     If Canadian withholding taxes are imposed on payments on the debt
securities issued by Energy Finance II, such payments will be foreign source
income and the interest payments will generally constitute "passive income" for
foreign tax credit purposes. Moreover, if Canadian withholding taxes are imposed
on the interest payments at a rate that equals or exceeds 5%, such interest
income would constitute "high withholding tax interest" for United States
foreign tax credit purposes. A U.S. holder who is entitled under the Tax Treaty
to a refund of Canadian tax, if any, withheld on interest on the debt securities
will not be entitled to claim a foreign tax credit with respect to such withheld
tax. A U.S. holder that does not claim a foreign tax credit may be entitled to a
deduction for United States federal income tax purposes with respect to any such
Canadian withholding taxes. The calculation of foreign tax credits or deductions
involves the application of complex rules that depend on a holder's particular
circumstances. Accordingly, U.S. holders are urged to consult their tax advisors
regarding the creditability or deductibility of such taxes. For a discussion of
the Canadian income tax considerations, see "Certain Canadian Federal Income Tax
Considerations."

Debt Securities Purchased at a Market Discount

     A holder will be considered to have purchased a debt security at a "market
discount" if the holder's adjusted basis in the debt security is less than its
stated redemption price at maturity, or in the case of a debt security issued at
a discount, its adjusted issue price, unless such market discount is a de
minimis amount (generally up to 1/4 of 1 percent of the stated redemption price
or adjusted issue price, as the case may be, on 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.
                                        48
<PAGE>   53

     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

     A holder 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 stated redemption price at maturity of the debt
security. A holder may elect to treat such premium as "amortizable bond
premium," in which case the amount of 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.

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 therefore, increased
by any OID or market discount previously included in income with respect to the
debt security and reduced by any amortizable bond premium. In the case of a
holder other than a corporation, preferential tax rates may apply to gain
recognized on the sale of a debt security if such holder's holding 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 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 backup withholding tax
(currently 30.5%) 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.

     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 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.
                                        49
<PAGE>   54

               CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

     In the opinion of McCarthy Tetrault LLP, Calgary, Alberta, Canada, Canadian
tax counsel to Energy Finance and Energy Finance II, the following summary
addresses the material Canadian federal income tax considerations to persons who
deal at arm's length with the issuer and are non-residents of Canada of
purchasing, owning and disposing of debt securities which constitute capital
property, for the purpose of the Income Tax Act (Canada) (the "ITA"), to such
persons. This summary is based on the current provisions of the ITA and the
regulations thereunder, the understanding of McCarthy Tetrault LLP of the
current assessing and administrative practices of Canada Customs and Revenue
Agency ("CCRA") and all specific proposals to amend the ITA and the regulations
thereunder publicly announced by the Minister of Finance (Canada) before the
date of this prospectus supplement. This summary does not otherwise take into
account or anticipate changes in the law or in the assessment and administrative
practices of CCRA, whether by judicial, governmental or legislative decision or
action, nor does it take into account tax legislation or considerations of any
province or territory of Canada or any jurisdiction other than Canada. This
summary is of a general nature only and is not intended to be, and should not be
interpreted as, legal or tax advice to any holder of debt securities. This
summary is not applicable to any holder other than an initial holder who
purchases debt securities pursuant to this offering.

     The payment of interest, premium, if any, and principal by Calpine Canada
Energy Finance on the debt securities of a particular series to initial holders
who are not resident or deemed to be resident in Canada with whom Energy Finance
or Energy Finance II is dealing at arms' length, within the meaning of the ITA,
at the time of making the payment will be exempt from non-resident withholding
tax under the ITA, provided that the terms of the debt securities of that
particular series do not require the issuer thereof to repay more than 25% of
the principal amount payable thereunder before the fifth anniversary of the date
of issue of that particular series of debt securities. For the purposes of the
ITA, related persons (as defined therein) are deemed not to deal at arm's length
and it is a question of fact whether persons not related to each other deal at
arm's length. If the terms of the debt securities of a particular series do
require the issuer to repay more than 25% of the principal amount thereof before
the fifth anniversary of the date of issue thereof, or if a holder thereof does
not deal at arm's length with the issuer, the payment of interest thereon will
be subject to non-resident withholding tax under the ITA at the rate of 25%
thereof (or, if applicable, a lower rate specified by a tax treaty between
Canada and the holder's country of residence). For the purposes of the ITA,
related persons (as defined therein) are deemed not to deal at arm's length and
it is a question of fact whether persons not related to each other deal at arm's
length.

     No other tax on income (including capital gains) will be payable under the
ITA in respect of the holding, repayment, redemption or disposition of the debt
securities, or the receipt of interest, premium, if any, or principal thereon by
holders who are not resident, or deemed to be resident, in Canada and who do not
use or hold, and are not deemed to use or hold, the senior notes in carrying on
business in Canada, for the purpose of the ITA, except that in certain
circumstances, holders who have made an election to have the senior notes
treated as taxable Canadian property or who are non-resident insurers carrying
on business in Canada, and elsewhere, may be subject to such taxes.

                                 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 Energy Finance and Energy Finance II offered
hereby will be passed upon for us by Covington & Burling, New York, New York and
by McCarthy Tetrault LLP, Calgary, Alberta, Canada. Any underwriters will be
represented by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York.

                                    EXPERTS

     The audited 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.

                                        50
<PAGE>   55

                                 [CALPINE LOGO]
<PAGE>   56

                                    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.......................  $  375,000
Legal fees and expenses.....................................     300,000
Accounting fees and expenses................................      75,000
Trustee's fees and expenses (including counsel fees)........     120,000
Printing fees...............................................     360,000
Transfer agent fees.........................................      12,000
Miscellaneous...............................................      13,000
                                                              ----------
  Total.....................................................  $1,255,000
                                                              ==========
</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

                                       II-1
<PAGE>   57

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
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 ULC, as a director or
officer of Calpine Canada Energy Finance ULC, a body corporate, partnership or
other association of which Calpine Canada Energy Finance ULC 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 ULC 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 ULC.

CALPINE CANADA ENERGY FINANCE II ULC

     Every director or officer, former director or officer, or person who acts
or acted at the request of Calpine Canada Energy Finance II ULC, as a director
or officer of Calpine Canada Energy Finance II ULC, a body corporate,
partnership or other association of which Calpine Canada Energy Finance II ULC
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 II ULC
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 II ULC.

ITEM 16. EXHIBITS.

<Table>
<Caption>
    EXHIBIT
    NUMBER                            DESCRIPTION
    -------                           -----------
    <C>       <S>
      1.1     Form of Underwriting Agreement with respect to Common Stock,
              Preferred Stock and Debt Securities of Calpine
              Corporation(a)
      1.2     Form of Underwriting Agreement with respect to Debt
              Securities of Calpine Canada Energy Finance ULC(f)
     *1.3     Form of Underwriting Agreement with respect to Debt
              Securities of Calpine Canada Energy Finance II ULC
      3.1     Amended and Restated Certificate of Incorporation of Calpine
              Corporation(b)
      3.2     Certificate of Correction of Calpine Corporation(a)
      3.3     Certificate of Amendment of Amended and Restated Certificate
              of Incorporation of Calpine Corporation (i)
      3.4     Certificate of Designation of Series A Participating
              Preferred Stock of Calpine Corporation(a)
      3.5     Amended Certificate of Designation of Series A Participating
              Preferred Stock of Calpine Corporation(a)
      3.6     Amended Certificate of Designation of Series A Participating
              Preferred Stock of Calpine Corporation(i)
</Table>

                                       II-2
<PAGE>   58

<Table>
<Caption>
    EXHIBIT
    NUMBER                            DESCRIPTION
    -------                           -----------
    <C>       <S>
      3.7     Certificate of Designation of Special Voting Preferred Stock
              of Calpine Corporation(g)
      3.8     Amended and Restated By-laws of Calpine Corporation(c)
      3.9     Memorandum of Association of Calpine Canada Energy Finance
              ULC(h)
      3.10    Articles of Association of Calpine Canada Energy Finance
              ULC(h)
     *3.11    Memorandum of Association of Calpine Canada Energy Finance
              II ULC
     *3.12    Articles of Association of Calpine Canada Energy Finance II
              ULC
      4.1     Form of Indenture between Calpine Corporation and Wilmington
              Trust Company, including form of Note(d)
      4.2     Rights Agreement, dated as of June 5, 1997, between Calpine
              Corporation and First Chicago Trust Company of New York, as
              Rights Agent(e)
      4.3     Form of Indenture between Calpine Canada Energy Finance ULC
              and Wilmington Trust Company, including form of Note (the
              "Energy Finance Indenture")(f)
      4.4     Form of Guarantee Agreement of Calpine Corporation with
              respect to Senior Debt Securities of Calpine Canada Energy
              Finance ULC (the "Calpine/Energy Finance Guarantee")(f)
     *4.5     Form of Indenture between Calpine Canada Energy Finance II
              ULC and Wilmington Trust Company, including form of Note
              (the "Energy Finance II Indenture")
     *4.6     Form of Guarantee Agreement of Calpine Corporation with
              respect to Senior Debt Securities of Calpine Canada Energy
              Finance II ULC (the "Calpine/Energy Finance II Guarantee")
     +5.1     Opinion of Covington & Burling
     +8.1     Opinion of Covington & Burling as to certain U.S. Federal
              tax matters
     +8.2     Opinion of McCarthy Tetrault LLP 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     Consents of Covington & Burling (included in Exhibits 5.1
              and 8.1)
    +23.3     Consent of McCarthy Tetrault LLP (included in Exhibit 8.2)
    *24.1     Power of Attorney of Officers and Directors of Calpine (see
              pages II-6 and II-7)
    *24.2     Power of Attorney of Officers and Directors of Calpine
              Canada Energy Finance ULC (see pages II-8 and II-9)
    *24.2     Power of Attorney of Officers and Directors of Calpine
              Canada Energy Finance II ULC (see pages II-10 and II-11)
     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(d)
     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 Energy Finance Indenture, and
              (ii) the Calpine/Energy Finance Guarantee(f)
    *25.3     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 Energy Finance II Indenture,
              and (ii) the Calpine/Energy Finance II Guarantee
</Table>

-------------------------
 *  Filed herewith.

 +  To be filed by amendment.

 (a) Incorporated by reference to Calpine Corporation's Annual Report on Form
     10-K for the year ended December 31, 2000, filed with the SEC on March 15,
     2001.

(b) Incorporated by reference to Calpine Corporation's Registration Statement on
    Form S-3 (Registration No. 333-40652) filed with the SEC on June 30, 2000.

 (c) Incorporated by reference to Calpine Corporation's Registration Statement
     on Form S-1 (Registration No. 333-07497) filed with the SEC on August 22,
     1996.

                                       II-3
<PAGE>   59

(d) Incorporated by reference to Amendment No. 1 to Calpine Corporation's
    Registration Statement on Form S-3 (Registration No. 333-40652) filed with
    the SEC on July 24, 2000.

 (e) Incorporated by reference to Calpine Corporation's Registration Statement
     on Form 8-A filed with the SEC on June 18, 1997 and amended by Calpine's
     Registration Statement on Form 8-A/A filed with the SEC on June 24, 1997
     (File No. 001-12079).

 (f) Incorporated by reference to Amendment No. 1 to the Registration Statement
     on Form S-3 of Calpine Corporation and Calpine Canada Energy Finance ULC
     (Registration No. 333-57338) filed with the SEC on April 19, 2001.

 (g) Incorporated by reference to Calpine Corporation's Quarterly Report on Form
     10-Q for the quarter ended March 31, 2001, filed with the SEC on May 15,
     2001.

(h) Incorporated by reference to the Registration Statement on Form S-3 of
    Calpine Corporation and Calpine Canada Energy Finance ULC (Registration No.
    333-57338) filed with the SEC on March 21, 2001.

 (i) Incorporated by reference to the Registration Statement on Form S-3 of
     Calpine Corporation (Registration Statement No. 333-66078) filed with the
     SEC on July 27, 2001.

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 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

                                       II-4
<PAGE>   60

     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-5
<PAGE>   61

                                   SIGNATURES

                              CALPINE CORPORATION

     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 this Registration Statement on Form S-3 and
has duly caused this 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 13th day of August, 2001.

                                          CALPINE CORPORATION

                                          By        /s/ ANN B. CURTIS
                                            ------------------------------------
                                                       Ann B. Curtis
                                                Executive Vice President and
                                                  Chief Financial Officer

                               POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

     That the undersigned officers and directors of Calpine Corporation do
hereby constitute and appoint Peter Cartwright and Ann B. Curtis, and each of
them, the lawful attorney and agent or attorneys and agents with power and
authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, determine may be
necessary or advisable or required to enable Calpine Corporation to comply with
the Securities and Exchange Act of 1934, as amended, and any rules or
regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement on Form S-3. Without limiting the
generality of the foregoing power and authority, the powers granted include the
power and authority to sign the names of the undersigned officers and directors
in the capacities indicated below to this Registration Statement or amendments
or supplements thereto, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.

     IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated opposite the name.

     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 Corporation and in the capacities and on the dates
indicated.

<Table>
<Caption>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
<C>                                                    <C>                              <S>
                /s/ PETER CARTWRIGHT                     Chairman, President, Chief     August 13, 2001
-----------------------------------------------------  Executive Officer and Director
                  Peter Cartwright                      (Principal Executive Officer)

                  /s/ ANN B. CURTIS                    Executive Vice President, Chief  August 13, 2001
-----------------------------------------------------  Financial Officer and Director
                    Ann B. Curtis                       (Principal Financial Officer)

              /s/ CHARLES B. CLARK, JR.                 Vice President and Corporate    August 13, 2001
-----------------------------------------------------       Controller (Principal
                Charles B. Clark, Jr.                        Accounting Officer)
</Table>

                                       II-6
<PAGE>   62

<Table>
<Caption>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
<C>                                                    <C>                              <S>
                 /s/ KENNETH T. DERR                              Director              August 13, 2001
-----------------------------------------------------
                   Kenneth T. Derr

                                                                  Director              August   , 2001
-----------------------------------------------------
                  Jeffrey E. Garten

                /s/ GERALD GREENWALD                              Director              August 13, 2001
-----------------------------------------------------
                  Gerald Greenwald

                 /s/ SUSAN C. SCHWAB                              Director              August 13, 2001
-----------------------------------------------------
                   Susan C. Schwab

               /s/ GEORGE J. STATHAKIS                            Director              August 13, 2001
-----------------------------------------------------
                 George J. Stathakis

                 /s/ JOHN O. WILSON                               Director              August 13, 2001
-----------------------------------------------------
                   John O. Wilson
</Table>

                                       II-7
<PAGE>   63

                                   SIGNATURES

                       CALPINE CANADA ENERGY FINANCE ULC

     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 this Registration Statement on Form S-3
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized in the City of Calgary, Province of
Alberta, on this 13th day of August, 2001.

                                      CALPINE CANADA ENERGY FINANCE ULC

                                      By        /s/ DAVID D. JOHNSON
                                        ----------------------------------------
                                                    David D. Johnson
                                                     Vice President

                               POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

     That the undersigned officers and directors of Calpine Canada Energy
Finance ULC do hereby constitute and appoint Peter Cartwright, Ann B. Curtis and
David D. Johnson, and each of them, the lawful attorney and agent or attorneys
and agents with power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, or either of
them, determine may be necessary or advisable or required to enable Calpine
Canada Energy Finance ULC to comply with the Securities and Exchange Act of
1934, as amended, and any rules or regulations or requirements of the Securities
and Exchange Commission in connection with this Registration Statement on Form
S-3. Without limiting the generality of the foregoing power and authority, the
powers granted include the power and authority to sign the names of the
undersigned officers and directors in the capacities indicated below to this
Registration Statement or amendments or supplements thereto, and each of the
undersigned hereby ratifies and confirms all that said attorneys and agents, or
either of them, shall do or cause to be done by virtue hereof. This Power of
Attorney may be signed in several counterparts.

     IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated opposite the name.

     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>
                                                         Vice President and Director    August   , 2001
-----------------------------------------------------
                  Steven A. Allaire
                  /s/ DANIEL ALLARD                               Director              August 13, 2001
-----------------------------------------------------
                    Daniel Allard
                /s/ PETER CARTWRIGHT                       President and Director       August 13, 2001
-----------------------------------------------------   (Principal Executive Officer)
                  Peter Cartwright
</Table>

                                       II-8
<PAGE>   64

<Table>
<Caption>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
<C>                                                    <C>                              <S>
                  /s/ ANN B. CURTIS                       Executive Vice President,     August 13, 2001
-----------------------------------------------------      Secretary and Director
                    Ann B. Curtis                         (Principal Financial and
                                                             Accounting Officer)

                /s/ DAVID D. JOHNSON                     Vice President and Director    August 13, 2001
-----------------------------------------------------
                  David D. Johnson

            Authorized Representative in                                                August 13, 2001
                  the United States
                  /s/ ANN B. CURTIS
-----------------------------------------------------
              Authorized Representative
</Table>

                                       II-9
<PAGE>   65

                                   SIGNATURES

                      CALPINE CANADA ENERGY FINANCE II ULC

     Pursuant to the requirements of the Securities Act of 1933, Calpine Canada
Energy Finance II ULC certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing this Registration Statement on Form
S-3 and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Calgary, Province
of Alberta, on this 13th day of August, 2001.

                                      CALPINE CANADA ENERGY FINANCE II ULC

                                      By        /s/ DAVID D. JOHNSON
                                        ----------------------------------------
                                                    David D. Johnson
                                                     Vice President

                               POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

     That the undersigned officers and directors of Calpine Canada Energy
Finance II ULC do hereby constitute and appoint Peter Cartwright, Ann B. Curtis
and David D. Johnson, and each of them, the lawful attorney and agent or
attorneys and agents with power and authority to do any and all acts and things
and to execute any and all instruments which said attorneys and agents, or
either of them, determine may be necessary or advisable or required to enable
Calpine Canada Energy Finance II ULC to comply with the Securities and Exchange
Act of 1934, as amended, and any rules or regulations or requirements of the
Securities and Exchange Commission in connection with this Registration
Statement on Form S-3. Without limiting the generality of the foregoing power
and authority, the powers granted include the power and authority to sign the
names of the undersigned officers and directors in the capacities indicated
below to this Registration Statement or amendments or supplements thereto, and
each of the undersigned hereby ratifies and confirms all that said attorneys and
agents, or either of them, shall do or cause to be done by virtue hereof. This
Power of Attorney may be signed in several counterparts.

     IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated opposite the name.

     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 II ULC and in the capacities
and on the dates indicated.

<Table>
<Caption>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
<C>                                                    <C>                              <S>
                                                         Vice President and Director    August   , 2001
-----------------------------------------------------
                  Steven A. Allaire

                  /s/ DANIEL ALLARD                               Director              August 13, 2001
-----------------------------------------------------
                    Daniel Allard

                /s/ PETER CARTWRIGHT                       President and Director       August 13, 2001
-----------------------------------------------------   (Principal Executive Officer)
                  Peter Cartwright
</Table>

                                      II-10
<PAGE>   66

<Table>
<Caption>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
<C>                                                    <C>                              <S>
                  /s/ ANN B. CURTIS                       Executive Vice President,     August 13, 2001
-----------------------------------------------------      Secretary and Director
                    Ann B. Curtis                         (Principal Financial and
                                                             Accounting Officer)

                /s/ DAVID D. JOHNSON                     Vice President and Director    August 13, 2001
-----------------------------------------------------
                  David D. Johnson
</Table>

<Table>
<Caption>
            Authorized Representative in                                                August 13, 2001
                  the United States
                  /s/ ANN B. CURTIS
-----------------------------------------------------
              Authorized Representative
<C>                                                    <C>                              <S>
</Table>

                                      II-11
<PAGE>   67

                               INDEX TO EXHIBITS

<Table>
<Caption>
    EXHIBIT
    NUMBER                            DESCRIPTION
    -------                           -----------
    <C>       <S>
      1.1     Form of Underwriting Agreement with respect to Common Stock,
              Preferred Stock and Debt Securities of Calpine
              Corporation(a)
      1.2     Form of Underwriting Agreement with respect to Debt
              Securities of Calpine Canada Energy Finance ULC(f)
     *1.3     Form of Underwriting Agreement with respect to Debt
              Securities of Calpine Canada Energy Finance II ULC
      3.1     Amended and Restated Certificate of Incorporation of Calpine
              Corporation(b)
      3.2     Certificate of Correction of Calpine Corporation(a)
      3.3     Certificate of Amendment of Amended and Restated Certificate
              of Incorporation of Calpine Corporation(i)
      3.4     Certificate of Designation of Series A Participating
              Preferred Stock of Calpine Corporation(a)
      3.5     Amended Certificate of Designation of Series A Participating
              Preferred Stock of Calpine Corporation(a)
      3.6     Amended Certificate of Designation of Series A Participating
              Preferred Stock of Calpine Corporation(i)
      3.7     Certificate of Designation of Special Voting Preferred Stock
              of Calpine Corporation(g)
      3.8     Amended and Restated By-laws of Calpine Corporation(c)
      3.9     Memorandum of Association of Calpine Canada Energy Finance
              ULC(h)
      3.10    Articles of Association of Calpine Canada Energy Finance
              ULC(h)
     *3.11    Memorandum of Association of Calpine Canada Energy Finance
              II ULC
     *3.12    Articles of Association of Calpine Canada Energy Finance II
              ULC
      4.1     Form of Indenture between Calpine Corporation and Wilmington
              Trust Company, including form of Note(d)
      4.2     Rights Agreement, dated as of June 5, 1997, between Calpine
              Corporation and First Chicago Trust Company of New York, as
              Rights Agent(e)
      4.3     Form of Indenture between Calpine Canada Energy Finance ULC
              and Wilmington Trust Company, including form of Note (the
              "Energy Finance Indenture")(f)
      4.4     Form of Guarantee Agreement of Calpine Corporation with
              respect to Senior Debt Securities of Calpine Canada Energy
              Finance ULC (the "Calpine/Energy Finance Guarantee")(f)
     *4.5     Form of Indenture between Calpine Canada Energy Finance II
              ULC and Wilmington Trust Company, including form of Note
              (the "Energy Finance II Indenture")
     *4.6     Form of Guarantee Agreement of Calpine Corporation with
              respect to Senior Debt Securities of Calpine Canada Energy
              Finance II ULC (the "Calpine/Energy Finance II Guarantee")
     +5.1     Opinion of Covington & Burling
     +8.1     Opinion of Covington & Burling as to certain U.S. Federal
              tax matters
     +8.2     Opinion of McCarthy Tetrault LLP 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     Consents of Covington & Burling (included in Exhibits 5.1
              and 8.1)
    +23.3     Consent of McCarthy Tetrault LLP (included in Exhibit 8.2)
    *24.1     Power of Attorney of Officers and Directors of Calpine (see
              pages II-6 and II-7)
    *24.2     Power of Attorney of Officers and Directors of Calpine
              Canada Energy Finance ULC (see pages II-8 and II-9)
    *24.2     Power of Attorney of Officers and Directors of Calpine
              Canada Energy Finance II ULC (see pages II-10 and II-11)
     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(d)
</Table>
<PAGE>   68

<Table>
<Caption>
    EXHIBIT
    NUMBER                            DESCRIPTION
    -------                           -----------
    <C>       <S>
     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 Energy Finance Indenture, and
              (ii) the Calpine/Energy Finance Guarantee (f)
    *25.3     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 Energy Finance II Indenture,
              and (ii) the Calpine/Energy Finance II Guarantee
</Table>

-------------------------
 *  Filed herewith.

 +  To be filed by amendment.

 (a) Incorporated by reference to Calpine Corporation's Annual Report on Form
     10-K for the year ended December 31, 2000, filed with the SEC on March 15,
     2001.

(b) Incorporated by reference to Calpine Corporation's Registration Statement on
    Form S-3 (Registration No. 333-40652) filed with the SEC on June 30, 2000.

 (c) Incorporated by reference to Calpine Corporation's Registration Statement
     on Form S-1 (Registration No. 333-07497) filed with the SEC on August 22,
     1996.

(d) Incorporated by reference to Amendment No. 1 to Calpine Corporation's
    Registration Statement on Form S-3 (Registration No. 333-40652) filed with
    the SEC on July 24, 2000.

 (e) Incorporated by reference to Calpine Corporation's Registration Statement
     on Form 8-A filed with the SEC on June 18, 1997 and amended by Calpine's
     Registration Statement on Form 8-A/A filed with the SEC on June 24, 1997
     (File No. 001-12079).

 (f) Incorporated by reference to Amendment No. 1 to the Registration Statement
     on Form S-3 of Calpine Corporation and Calpine Canada Energy Finance ULC
     (Registration No. 333-57338) filed with the SEC on April 19, 2001.

 (g) Incorporated by reference to Calpine Corporation's Quarterly Report on Form
     10-Q for the quarter ended March 31, 2001, filed with the SEC on May 15,
     2001.

(h) Incorporated by reference to the Registration Statement on Form S-3 of
    Calpine Corporation and Calpine Canada Energy Finance ULC (Registration No.
    333-57338) filed with the SEC on March 21, 2001.

 (i) Incorporated by reference to the Registration Statement on Form S-3 of
     Calpine Corporation (Registration Statement No. 333-66078) filed with the
     SEC on July 27, 2001.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.3
<SEQUENCE>3
<FILENAME>f74776orex1-3.txt
<DESCRIPTION>EXHIBIT 3.1
<TEXT>
<PAGE>   1
                                                                     EXHIBIT 1.3

                      CALPINE CANADA ENERGY FINANCE II ULC

                             % Senior Notes due 20-

                     Fully and Unconditionally Guaranteed By

                               CALPINE CORPORATION

                             UNDERWRITING AGREEMENT

                                                                          , 2001

Dear Sirs:

          1. Introductory. Calpine Canada Energy Finance II 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 20-- (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:

               (1) 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 , 2001. Such registration statement, as amended at the
time of this Agreement, is hereinafter referred to as the "REGISTRATION
STATEMENT", and the


<PAGE>   2

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.

               (2) 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.

               (3) 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.

               (4) 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 Parent 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.

<PAGE>   3

               (5) 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 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).

               (6) 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 constitutes, 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.


                                       3
<PAGE>   4

               (7) 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.

               (8) 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.

               (9) 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.

               (10) 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.

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

                                       4
<PAGE>   5

               (12) 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.

               (13) 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").

               (14) 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.

               (15) 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.

               (16) 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


                                       5
<PAGE>   6

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.

               (17) 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 their 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.

               (18) 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.

               (19) 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.

               (20) 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.


                                       6
<PAGE>   7

               (21) 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.

               (22) 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).

               (23) 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.

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

               (25) 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


                                       7
<PAGE>   8

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 [Underwriter] drawn to the order of Calpine
Canada Energy Finance II 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
[Underwriter] and the Parent 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:

                    (1) 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 [Underwriter], subparagraph (5)) not later
than the second business day following the execution and delivery of this
Agreement.

                    (2) The Company and the Parent will advise [Underwriter]
promptly of any proposal to amend or supplement the Registration Statement or
the Prospectus and will afford [Underwriter] a reasonable opportunity to comment
on any such proposed amendment or supplement; and the Company and the Parent
will also advise


                                       8
<PAGE>   9

[Underwriter] 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 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.

                    (3) 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 [Underwriter] 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 [Underwriter]'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.

                    (4) 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 later 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.

                    (5) 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 [Underwriter]
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.


                                       9
<PAGE>   10

                    (6) 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 [Underwriter]
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.

                    (7) During the period of five years after the date this
Agreement, the Parent will furnish to [Underwriter] 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 [Underwriter] 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 [Underwriter] may reasonably request.

                    (8) 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.

                    (9) 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 [Underwriter] 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.

                    (10) For a period of days after the date hereof, neither the
Company nor the Parent will, and the Parent will not permit the Subsidiaries to,
offer, sell,


                                       10
<PAGE>   11

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 [Underwriter].

               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:

                    (1) 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:

                         (1) 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;

                         (2) they have performed the procedures specified by the
     American Institute of Certified Public Accountants for a review of interim
     financial information as described in Statement of Auditing Standards No.
     71, Interim Financial Information, on the unaudited financial statements
     included in the Registration Statement and in the Exchange Act Reports;

                         (3) on the basis of the review referred to in clause
     (ii) above, a reading of the unaudited pro forma financial statements,
     selected consolidated financial data and ratio of earnings to fixed charges
     included in or incorporated by reference 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:


                                       11
<PAGE>   12
                    (A) the unaudited pro forma financial, selected consolidated
          financial data and ratio of earnings to fixed charges statements
          included in or incorporated by reference in the Registration Statement
          do not each comply as to form in all material respects with the
          applicable accounting requirements under the Securities Act and the
          related published Rules and Regulations or any material modifications
          should be made to the unaudited financial statements included in the
          Registration Statement and in the Exchange Act Reports for them to be
          in conformity with generally accepted accounting principles;

                    (B) the unaudited consolidated net revenue, net operating
          income and summary of earnings, net income and net income per share
          amounts for the quarter ended , 2001, included in or incorporated by
          reference in the Registration Statement do not agree with the amounts
          set forth in the unaudited consolidated financial statements for those
          same periods or were not determined on a basis substantially
          consistent with that of the corresponding amounts in the audited
          statements of income;

                    (C) 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

                    (D) 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 clauses (C) or (D) above for changes,
          increases or decreases which the Prospectus discloses have occurred or
          may occur or which are described in such letter; and

                         (4) 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


                                       12
<PAGE>   13

     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.

                    (2) 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.

                    (3) 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 [Underwriter], 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 [Underwriter],
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.


                                       13
<PAGE>   14

                    (4) 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:

                         (1) 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;

                         (2) (A) The Indenture has been duly qualified under the
     Trust Indenture Act, (B) the Indenture and the Securities 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 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;

                         (3) (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;

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


                                       14
<PAGE>   15

                         (5) 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 be
     an "investment company" within the meaning of the Investment Company Act of
     1940;

                         (6) 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;

                         (7) 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, 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;

                         (8) The execution, delivery and performance of the
     Indenture, this Agreement, the Guarantee Agreement and each Guarantee 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);

                         (9) 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


                                       15
<PAGE>   16

     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, 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

                         (10) 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.


                                       16
<PAGE>   17

         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.

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

                         (1) 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;

                         (2) (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 delivered on the Closing Date 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;

                         (3) 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;

                         (4) 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


                                       17
<PAGE>   18

     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;

                         (5) 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;

                         (6) 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

                         (7) 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 (vii)
     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.

                    (6) 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:

                         (1) 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


                                       18
<PAGE>   19

     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;

                         (2) 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;

                         (3) The contracts and agreements of the Parent, the
     Company 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.

                         (4) To such counsel's knowledge, each of the Parent and
     the Company (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


<PAGE>   20

     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
     Parent and the Company; and

                         (5) To such counsel's knowledge, based on the conduct
     of each of the Parent's and the Company's business as described in the
     Prospectus, neither the Parent, the Company 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 ("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 Parent 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.

                    (7) 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.

                    (8) The Representative shall have received a certificate,
dated the Closing Date, of the President or any Vice President and a principal
financial or accounting


                                       20
<PAGE>   21

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.

                    (9) 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 requests. [Underwriter] 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, 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


                                       21
<PAGE>   22

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.

                    (1) 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 .

                    (2) 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


                                       22
<PAGE>   23

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 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.

                    (3) 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


                                       23
<PAGE>   24

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.

                    (4) 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, [Underwriter] 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 [Underwriter], 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


<PAGE>   25

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 , 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.

                    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.

                                       25
<PAGE>   26


               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.]


<PAGE>   27

               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 a counterpart 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 II ULC

                                       By:
                                          --------------------------------------
                                       Name:
                                       Title:


                                       CALPINE CORPORATION


                                       By:
                                          --------------------------------------
                                       Name:
                                       Title:


<PAGE>   28

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





By:
   --------------------------------------

Name:
Title:





                                       28
<PAGE>   29

                                   SCHEDULE A

                             % SENIOR NOTES DUE 20-

<TABLE>
<CAPTION>
                                   UNDERWRITER         PRINCIPAL AMOUNT
<S>                                                     <C>
 ......................................................  $
 ......................................................
 ......................................................
 ......................................................

    Total.............................................
                                                        $
                                                         =============
</TABLE>



                                       29
<PAGE>   30

                                   SCHEDULE B

I.   Subsidiary Liens

     The Parent has pledged the capital stock of certain Subsidiaries owned by
the Parent in connection with the project financings related to such
Subsidiaries.

II.  Registration Rights

     CCNG Investment, L.P., a Texas limited partnership ("CCNG"), has demand
registration rights with respect to 50,000 shares of the Parent's Common Stock
pursuant to the Stock Purchase Agreement dated as of May 1, 1998 by and between
the Parent and CCNG.

     Pursuant to the Stock and Note Purchase Agreement, dated as of June 23,
2000 (the "Stock and Note Purchase Agreement"), by and among the Parent, Wisvest
Corporation, Michael P. Polsky ("Polsky"), the Alan S. Polsky and Gabriel S.
Polsky Trusts (the "Trusts"), Polsky Energy Corporation and SkyGen Energy
Holdings LLC, the Parent has executed a Stockholder's Rights Agreement, in
substantially the form of Exhibit 5.2 to the Stock and Note Purchase Agreement,
with respect to shares of the Parent's Common Stock to be issued to Polsky and
the Trusts at the closing under the Stock and Note Purchase Agreement. Pursuant
to such Stockholder Rights Agreement, Polsky and the Trusts will be granted both
demand and piggyback registration rights with respect to such shares of the
Parent's Common Stock.

     Pursuant to the Registration Rights Agreement, dated as of April [ ], 2001
(the "Registration Rights Agreement"), between Parent and WRMS Engineering Inc.
("WRMS") and the shareholders of WRMS, the Parent is obligated to file a
registration statement on Form S-3 with the Securities and Exchange Commission
relating to such shares of Common Stock issued to the WRMS shareholders named
thereon as part of the acquisition by the Parent of WRMS.







                                       30

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.11
<SEQUENCE>4
<FILENAME>f74776orex3-11.txt
<DESCRIPTION>EXHIBIT 3.11
<TEXT>
<PAGE>   1

                                                                    EXHIBIT 3.11


                            MEMORANDUM OF ASSOCIATION

                                       OF

                      CALPINE CANADA ENERGY FINANCE II ULC

1.       The name of the Company is CALPINE CANADA ENERGY FINANCE II ULC.

2.       There are no restrictions on the objects and powers of the Company and
         the Company shall expressly have the following powers:

         (1)      to sell or dispose of its undertaking, or a substantial part
                  thereof;

         (2)      to distribute any of its property in specie among its members;
                  and

         (3)      to amalgamate with any company or other body of persons.

3.       The liability of the members is unlimited.

         I, the undersigned, whose name, address and occupation are subscribed,
am desirous of being formed into a company in pursuance of this Memorandum of
Association, and I agree to take the number and kind of shares in the capital
stock of the Company written below my name.

                             __________________________________________________
                             Name of Subscriber:  Charles S. Reagh
                             800-1959 Upper Water Street, Halifax, NS  B3J 2X2
                             Occupation:  Solicitor
                             Number of shares subscribed:  One Common share

TOTAL SHARES TAKEN:  one common share
Dated this 11th day of July, 2001.


Witness to above signature: ________________________________________
                              Name of Witness:  Amy Smith
                              800-1959 Upper Water Street, Halifax, NS  B3J 2X2
                              Occupation:  Legal Assistant


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.12
<SEQUENCE>5
<FILENAME>f74776orex3-12.txt
<DESCRIPTION>EXHIBIT 3.12
<TEXT>
<PAGE>   1

                                                                    EXHIBIT 3.12


                             ARTICLES OF ASSOCIATION

                                       OF

                      CALPINE CANADA ENERGY FINANCE II ULC

                                 INTERPRETATION

1.       In these Articles, unless there be something in the subject or context
         inconsistent therewith:

         (1)      "Act" means the Companies Act (Nova Scotia);

         (2)      "Articles" means these Articles of Association of the Company
                  and all amendments hereto;

         (3)      "Company" means the company named above;

         (4)      "director" means a director of the Company;

         (5)      "Memorandum" means the Memorandum of Association of the
                  Company and all amendments thereto;

         (6)      "month" means calendar month;

         (7)      "Office" means the registered office of the Company;

         (8)      "person" includes a body corporate;

         (9)      "proxyholder" includes an alternate proxyholder;

         (10)     "Register" means the register of members kept pursuant to the
                  Act, and where the context permits includes a branch register
                  of members;

         (11)     "Registrar" means the Registrar as defined in the Act;

         (12)     "Secretary" includes any person appointed to perform the
                  duties of the Secretary temporarily;

         (13)     "shareholder" means member as that term is used in the Act in
                  connection with an unlimited company having share capital and
                  as that term is used in the Memorandum;

         (14)     "special resolution" has the meaning assigned by the Act;

         (15)     "in writing" and "written" includes printing, lithography and
                  other modes of representing or reproducing words in visible
                  form;

         (16)     words importing number or gender include all numbers and
                  genders unless the context otherwise requires.

<PAGE>   2
                                      -1-


2.       The regulations in Table A in the First Schedule to the Act shall not
         apply to the Company.

3.       The directors may enter into and carry into effect or adopt and carry
         into effect any agreement made by the promoters of the Company on
         behalf of the Company and may agree to any modification in the terms of
         any such agreement, either before or after its execution.

4.       The directors may, out of the funds of the Company, pay all expenses
         incurred for the incorporation and organization of the Company.

5.       The Company may commence business on the day following incorporation or
         so soon thereafter as the directors think fit, notwithstanding that
         part only of the shares has been allotted.

                                     SHARES

6.       The capital of the company shall consist of 500,000,000 common shares
         without nominal or par value, with the power to divide the shares in
         the capital for the time being into classes or series and to attach
         thereto respectively any preferred, deferred or qualified rights,
         privileges or conditions, including restrictions on voting rights and
         including redemption, purchase and other acquisition of such shares,
         subject, however, to the provisions of the Act.

7.       The directors shall control the shares and, subject to the provisions
         of these Articles, may allot or otherwise dispose of them to such
         person at such times, on such terms and conditions and, if the shares
         have a par value, either at a premium or at par, as they think fit.

8.       The directors may pay on behalf of the Company a reasonable commission
         to any person in consideration of subscribing or agreeing to subscribe
         (whether absolutely or conditionally) for any shares in the Company, or
         procuring or agreeing to procure subscriptions (whether absolute or
         conditional) for any shares in the Company. Subject to the Act, the
         commission may be paid or satisfied in shares of the Company.

9.       On the issue of shares the Company may arrange among the holders
         thereof differences in the calls to be paid and in the times for their
         payment.

10.      If the whole or part of the allotment price of any shares is, by the
         conditions of their allotment, payable in instalments, every such
         instalment shall, when due, be payable to the Company by the person who
         is at such time the registered holder of the shares.

11.      Shares may be registered in the names of joint holders not exceeding
         three in number.

12.      Joint holders of a share shall be jointly and severally liable for the
         payment of all instalments and calls due in respect of such share. On
         the death of one or more joint holders of shares

<PAGE>   3
                                      -2-


         the survivor or survivors of them shall alone be recognized by the
         Company as the registered holder or holders of the shares.

13.      Save as herein otherwise provided, the Company may treat the registered
         holder of any share as the absolute owner thereof and accordingly shall
         not, except as ordered by a court of competent jurisdiction or required
         by statute, be bound to recognize any equitable or other claim to or
         interest in such share on the part of any other person.

14.      The Company is a private company, and:

         (1)      no transfer of any share of the Company shall be effective
         unless or until approved by the directors;

         (2)      the number of holders of issued and outstanding shares of the
         Company, exclusive of persons who are in the employment of the Company
         or in the employment of an affiliate of the Company and exclusive of
         persons who, having been formerly in the employment of the Company or
         the employment of an affiliate of the Company, were, while in that
         employment, and have continued after termination of that employment, to
         own at least one share of the Company, shall not exceed 50 in number,
         two or more persons or companies who are the joint registered owners of
         one or more shares being counted as one holder; and

         (3)      the Company shall not invite the public to subscribe for any
         of its shares.

         In this Article, "private company" has the meaning ascribed to it in
         the Securities Act (Nova Scotia).

                                  CERTIFICATES

15.      Certificates of title to shares shall comply with the Act and may
         otherwise be in such form as the directors may from time to time
         determine. Unless the directors otherwise determine, every certificate
         of title to shares shall be signed manually by at least one of the
         Chairman, President, Secretary, Treasurer, a vice-president, an
         assistant secretary, any other officer of the Company or any director
         of the Company or by or on behalf of a share registrar transfer agent
         or branch transfer agent appointed by the Company or by any other
         person whom the directors may designate. When signatures of more than
         one person appear on a certificate all but one may be printed or
         otherwise mechanically reproduced. All such certificates when signed as
         provided in this Article shall be valid and binding upon the Company.
         If a certificate contains a printed or mechanically reproduced
         signature of a person, the Company may issue the certificate,
         notwithstanding that the person has ceased to be a director or an
         officer of the Company and the certificate is as valid as if such
         person were a director or an officer at the date of its issue.

16.      Except as the directors may determine, each shareholder's shares may be
         evidenced by any number of certificates so long as the aggregate of the
         shares stipulated in such certificates

<PAGE>   4
                                      -3-


         equals the aggregate registered in the name of the shareholder.

17.      Where shares are registered in the names of two or more persons, the
         Company shall not be bound to issue more than one certificate or set of
         certificates, and such certificate or set of certificates shall be
         delivered to the person first named on the Register.

18.      Any certificate that has become worn, damaged or defaced may, upon its
         surrender to the directors, be cancelled and replaced by a new
         certificate. Any certificate that has become lost or destroyed may be
         replaced by a new certificate upon proof of such loss or destruction to
         the satisfaction of the directors and the furnishing to the Company of
         such undertakings of indemnity as the directors deem adequate.

19.      The sum of one dollar or such other sum as the directors from time to
         time determine shall be paid to the Company for every certificate other
         than the first certificate issued to any holder in respect of any share
         or shares.

20.      The directors may cause one or more branch Registers of shareholders to
         be kept in any place or places, whether inside or outside of Nova
         Scotia.

                                      CALLS

21.      The directors may make such calls upon the shareholders in respect of
         all amounts unpaid on the shares held by them respectively and not made
         payable at fixed times by the conditions on which such shares were
         allotted, and each shareholder shall pay the amount of every call so
         made to the person and at the times and places appointed by the
         directors. A call may be made payable by instalments.

22.      A call shall be deemed to have been made at the time when the
         resolution of the directors authorizing such call was passed.

23.      At least 14 days' notice of any call shall be given, and such notice
         shall specify the time and place at which and the person to whom such
         call shall be paid.

24.      If the sum payable in respect of any call or instalment is not paid on
         or before the day appointed for the payment thereof, the holder for the
         time being of the share in respect of which the call has been made or
         the instalment is due shall pay interest on such call or instalment at
         the rate of 9% per year or such other rate of interest as the directors
         may determine from the day appointed for the payment thereof up to the
         time of actual payment.

25.      At the trial or hearing of any action for the recovery of any amount
         due for any call, it shall be sufficient to prove that the name of the
         shareholder sued is entered on the Register as the holder or one of the
         holders of the share or shares in respect of which such debt accrued,
         that

<PAGE>   5
                                      -4-


         the resolution making the call is duly recorded in the minute book and
         that such notice of such call was duly given to the shareholder sued in
         pursuance of these Articles. It shall not be necessary to prove the
         appointment of the directors who made such call or any other matters
         whatsoever and the proof of the matters stipulated shall be conclusive
         evidence of the debt.

                              FORFEITURE OF SHARES

26.      If any shareholder fails to pay any call or instalment on or before the
         day appointed for payment, the directors may at any time thereafter
         while the call or instalment remains unpaid serve a notice on such
         shareholder requiring payment thereof together with any interest that
         may have accrued and all expenses that may have been incurred by the
         Company by reason of such non-payment.

27.      The notice shall name a day (not being less than 14 days after the date
         of the notice) and a place or places on and at which such call or
         instalment and such interest and expenses are to be paid. The notice
         shall also state that, in the event of non-payment on or before the day
         and at the place or one of the places so named, the shares in respect
         of which the call was made or instalment is payable will be liable to
         be forfeited.

28.      If the requirements of any such notice are not complied with, any
         shares in respect of which such notice has been given may at any time
         thereafter, before payment of all calls or instalments, interest and
         expenses due in respect thereof, be forfeited by a resolution of the
         directors to that effect. Such forfeiture shall include all dividends
         declared in respect of the forfeited shares and not actually paid
         before the forfeiture.

29.      When any share has been so forfeited, notice of the resolution shall be
         given to the shareholder in whose name it stood immediately prior to
         the forfeiture and an entry of the forfeiture shall be made in the
         Register.

30.      Any share so forfeited shall be deemed the property of the Company and
         the directors may sell, re-allot or otherwise dispose of it in such
         manner as they think fit.

31.      The directors may at any time before any share so forfeited has been
         sold, re-allotted or otherwise disposed of, annul the forfeiture
         thereof upon such conditions as they think fit.

32.      Any shareholder whose shares have been forfeited shall nevertheless be
         liable to pay and shall forthwith pay to the Company all calls,
         instalments, interest and expenses owing upon or in respect of such
         shares at the time of the forfeiture together with interest thereon at
         the rate of 9% per year or such other rate of interest as the directors
         may determine from the time of forfeiture until payment. The directors
         may enforce such payment if they think fit, but are under no obligation
         to do so.

33.      A certificate signed by the Secretary stating that a share has been
         duly forfeited on a
<PAGE>   6
                                      -5-


         specified date in pursuance of these Articles and the time when it was
         forfeited shall be conclusive evidence of the facts therein stated as
         against any person who would have been entitled to the share but for
         such forfeiture.

                                 LIEN ON SHARES

34.      The Company shall have a first and paramount lien upon all shares
         (other than fully paid-up shares) registered in the name of a
         shareholder (whether solely or jointly with others) and upon the
         proceeds from the sale thereof for debts, liabilities and other
         engagements of the shareholder, solely or jointly with any other
         person, to or with the Company, whether or not the period for the
         payment, fulfilment or discharge thereof has actually arrived, and such
         lien shall extend to all dividends declared in respect of such shares.
         Unless otherwise agreed, the registration of a transfer of shares shall
         operate as a waiver of any lien of the Company on such shares.

35.      For the purpose of enforcing such lien the directors may sell the
         shares subject to it in such manner as they think fit, but no sale
         shall be made until the period for the payment, fulfilment or discharge
         of such debts, liabilities or other engagements has arrived, and until
         notice in writing of the intention to sell has been given to such
         shareholder or the shareholder's executors or administrators and
         default has been made by them in such payment, fulfilment or discharge
         for seven days after such notice.

36.      The net proceeds of any such sale after the payment of all costs shall
         be applied in or towards the satisfaction of such debts, liabilities or
         engagements and the residue, if any, paid to such shareholder.

                                VALIDITY OF SALES

37.      Upon any sale after forfeiture or to enforce a lien in purported
         exercise of the powers given by these Articles the directors may cause
         the purchaser's name to be entered in the Register in respect of the
         shares sold, and the purchaser shall not be bound to see to the
         regularity of the proceedings or to the application of the purchase
         money, and after the purchaser's name has been entered in the Register
         in respect of such shares the validity of the sale shall not be
         impeached by any person and the remedy of any person aggrieved by the
         sale shall be in damages only and against the Company exclusively.

                               TRANSFER OF SHARES

38.      The instrument of transfer of any share in the Company shall be signed
         by the transferor. The transferor shall be deemed to remain the holder
         of such share until the name of the transferee is entered in the
         Register in respect thereof and shall be entitled to receive any
         dividend declared thereon before the registration of the transfer.

39.      The instrument of transfer of any share shall be in writing in the
         following form or to the

<PAGE>   7
                                      -6-


         following effect:

                  For value received,      hereby sell, assign, and transfer
                  unto      ,      shares in the capital of the Company
                  represented by the within certificate, and do hereby
                  irrevocably constitute and appoint      attorney to transfer
                  such shares on the books of the Company with full power of
                  substitution in the premises.

                  Dated the _____ day of  ______________ , ____________

                  Witness:

40.      The directors may, without assigning any reason therefor, decline to
         register any transfer of shares

         (1)      not fully paid-up or upon which the Company has a lien, or

         (2)      the transfer of which is restricted by any agreement to which
                  the Company is a party.

41.      Every instrument of transfer shall be left for registration at the
         Office of the Company, or at any office of its transfer agent where a
         Register is maintained, together with the certificate of the shares to
         be transferred and such other evidence as the Company may require to
         prove title to or the right to transfer the shares.

42.      The directors may require that a fee determined by them be paid before
         or after registration of any transfer.

43.      Every instrument of transfer shall, after its registration, remain in
         the custody of the Company. Any instrument of transfer that the
         directors decline to register shall, except in case of fraud, be
         returned to the person who deposited it.

                             TRANSMISSION OF SHARES

44.      The executors or administrators of a deceased shareholder (not being
         one of several joint holders) shall be the only persons recognized by
         the Company as having any title to the shares registered in the name of
         such shareholder. When a share is registered in the names of two or
         more joint holders, the survivor or survivors or the executors or
         administrators of the deceased shareholder, shall be the only persons
         recognized by the Company as having any title to, or interest in, such
         share.

45.      Notwithstanding anything in these Articles, if the Company has only one
         shareholder (not being one of several joint holders) and that
         shareholder dies, the executors or administrators of the deceased
         shareholder shall be entitled to register themselves in the Register as
         the

<PAGE>   8
                                      -7-


         holders of the shares registered in the name of the deceased
         shareholder whereupon they shall have all the rights given by these
         Articles and by law to shareholders.

46.      Any person entitled to shares upon the death or bankruptcy of any
         shareholder or in any way other than by allotment or transfer, upon
         producing such evidence of entitlement as the directors require, may be
         registered as a shareholder in respect of such shares, or may, without
         being registered, transfer such shares subject to the provisions of
         these Articles respecting the transfer of shares. The directors shall
         have the same right to refuse registration as if the transferee were
         named in an ordinary transfer presented for registration.

                               SURRENDER OF SHARES

47.      The directors may accept the surrender of any share by way of
         compromise of any question as to the holder being properly registered
         in respect thereof. Any share so surrendered may be disposed of in the
         same manner as a forfeited share.

                        INCREASE AND REDUCTION OF CAPITAL

48.      Subject to the Act, the shareholders may by special resolution amend
         these Articles to increase or alter the share capital of the Company as
         they think expedient. Without prejudice to any special rights
         previously conferred on the holders of existing shares, any share may
         be issued with such preferred, deferred or other special rights, or
         with such restrictions, whether in regard to dividends, voting, return
         of share capital or otherwise, as the shareholders may from time to
         time determine by special resolution. Except as otherwise provided by
         the conditions of issue, or by these Articles, any capital raised by
         the creation of new shares shall be considered part of the original
         capital and shall be subject to the provisions herein contained with
         reference to payment of calls and instalments, transfer and
         transmission, forfeiture, lien and otherwise.

49.      The Company may, by special resolution where required, reduce its share
         capital in any way and with and subject to any incident authorized and
         consent required by law. Subject to the Act and any provisions attached
         to such shares, the Company may redeem, purchase or acquire any of its
         shares and the directors may determine the manner and the terms for
         redeeming, purchasing or acquiring such shares and may provide a
         sinking fund on such terms as they think fit for the redemption,
         purchase or acquisition of shares of any class or series.

                     MEETINGS AND VOTING BY CLASS OR SERIES

50.      Where the holders of shares of a class or series have, under the Act,
         the terms or conditions attaching to such shares or otherwise, the
         right to vote separately as a class in respect of any matter then,
         except as provided in the Act, these Articles or such terms or
         conditions, all the provisions in these Articles concerning general
         meetings (including, without limitation, provisions respecting notice,
         quorum and procedure) shall, mutatis mutandis, apply to every

<PAGE>   9
                                      -8-


         meeting of holders of such class or series of shares convened for the
         purpose of such vote.

51.      Unless the rights, privileges, terms or conditions attached to a class
         or series of shares provide otherwise, such class or series of shares
         shall not have the right to vote separately as a class or series upon
         an amendment to the Memorandum or Articles to:

         (1)      increase or decrease any maximum number of authorized shares
                  of such class or series, or increase any maximum number of
                  authorized shares of a class or series having rights or
                  privileges equal or superior to the shares of such class or
                  series;

         (2)      effect an exchange, reclassification or cancellation of all or
                  part of the shares of such class or series; or

         (3)      create a new class or series of shares equal or superior to
                  the shares of such class or series.

                                BORROWING POWERS

52.      The directors on behalf of the Company may:

         (1)      raise or borrow money for the purposes of the Company or any
                  of them;

         (2)      secure, subject to the sanction of a special resolution where
                  required by the Act, the repayment of funds so raised or
                  borrowed in such manner and upon such terms and conditions in
                  all respects as they think fit, and in particular by the
                  execution and delivery of mortgages of the Company's real or
                  personal property, or by the issue of bonds, debentures or
                  other securities of the Company secured by mortgage or other
                  charge upon all or any part of the property of the Company,
                  both present and future including its uncalled capital for the
                  time being;

         (3)      sign or endorse bills, notes, acceptances, cheques, contracts,
                  and other evidence of or securities for funds borrowed or to
                  be borrowed for the purposes aforesaid;

         (4)      pledge debentures as security for loans;

         (5)      guarantee obligations of any person.

53.      Bonds, debentures and other securities may be made assignable, free
         from any equities between the Company and the person to whom such
         securities were issued.

54.      Any bonds, debentures and other securities may be issued at a discount,
         premium or otherwise and with special privileges as to redemption,
         surrender, drawings, allotment of shares, attending and voting at
         general meetings of the Company, appointment of directors and other
         matters.

<PAGE>   10
                                      -9-


                                GENERAL MEETINGS

55.      Ordinary general meetings of the Company shall be held at least once in
         every calendar year at such time and place as may be determined by the
         directors and not later than 15 months after the preceding ordinary
         general meeting. All other meetings of the Company shall be called
         special general meetings. Ordinary or special general meetings may be
         held either within or without the Province of Nova Scotia.

56.      The President, a vice-president or the directors may at any time
         convene a special general meeting, and the directors, upon the
         requisition of shareholders in accordance with the Act shall forthwith
         proceed to convene such meeting or meetings to be held at such time and
         place or times and places as the directors determine.

57.      The requisition shall state the objects of the meeting requested, be
         signed by the requisitionists and deposited at the Office of the
         Company. It may consist of several documents in like form each signed
         by one or more of the requisitionists.

58.      At least seven clear days' notice, or such longer period of notice as
         may be required by the Act, of every general meeting, specifying the
         place, day and hour of the meeting and, when special business is to be
         considered, the general nature of such business, shall be given to the
         shareholders entitled to be present at such meeting by notice given as
         permitted by these Articles. With the consent in writing of all the
         shareholders entitled to vote at such meeting, a meeting may be
         convened by a shorter notice and in any manner they think fit, or
         notice of the time, place and purpose of the meeting may be waived by
         all of the shareholders.

59.      When it is proposed to pass a special resolution, the two meetings may
         be convened by the same notice, and it shall be no objection to such
         notice that it only convenes the second meeting contingently upon the
         resolution being passed by the requisite majority at the first meeting.

60.      The accidental omission to give notice to a shareholder, or non-receipt
         of notice by a shareholder, shall not invalidate any resolution passed
         at any general meeting.

                                  RECORD DATES

61.      (1)      The directors may fix in advance a date as the record date for
                  the determination of shareholders

                  (a)      entitled to receive payment of a dividend or entitled
                           to receive any distribution;

                  (b)      entitled to receive notice of a meeting; or

<PAGE>   11
                                      -10-


                  (c)      for any other purpose.

         (2)      If no record date is fixed, the record date for the
                  determination of shareholders

                  (a)      entitled to receive notice of a meeting shall be the
                           day immediately preceding the day on which the notice
                           is given, or, if no notice is given, the day on which
                           the meeting is held; and

                  (b)      for any other purpose shall be the day on which the
                           directors pass the resolution relating to the
                           particular purpose.

                         PROCEEDINGS AT GENERAL MEETINGS

62.      The business of an ordinary general meeting shall be to receive and
         consider the financial statements of the Company and the report of the
         directors and the report, if any, of the auditors, to elect directors
         in the place of those retiring and to transact any other business which
         under these Articles ought to be transacted at an ordinary general
         meeting.

63.      No business shall be transacted at any general meeting unless the
         requisite quorum is present at the commencement of the business. A
         corporate shareholder of the Company that has a duly authorized agent
         or representative present at any such meeting shall for the purpose of
         this Article be deemed to be personally present at such meeting.

64.      One person, being a shareholder, proxyholder or representative of a
         corporate shareholder, present and entitled to vote shall constitute a
         quorum for a general meeting, and may hold a meeting.

65.      The Chairman shall be entitled to take the chair at every general
         meeting or, if there be no Chairman, or if the Chairman is not present
         within fifteen 15 minutes after the time appointed for holding the
         meeting, the President or, failing the President, a vice-president
         shall be entitled to take the chair. If the Chairman, the President or
         a vice-president is not present within 15 minutes after the time
         appointed for holding the meeting or if all such persons present
         decline to take the chair, the shareholders present entitled to vote at
         the meeting shall choose another director as chairman and if no
         director is present or if all the directors present decline to take the
         chair, then such shareholders shall choose one of their number to be
         chairman.

66.      If within half an hour from the time appointed for a general meeting a
         quorum is not present, the meeting, if it was convened pursuant to a
         requisition of shareholders, shall be dissolved; if it was convened in
         any other way, it shall stand adjourned to the same day, in the next
         week, at the same time and place. If at the adjourned meeting a quorum
         is not present within half an hour from the time appointed for the
         meeting, the shareholders present shall be a quorum and may hold the
         meeting.

<PAGE>   12
                                      -11-


67.      Subject to the Act, at any general meeting a resolution put to the
         meeting shall be decided by a show of hands unless, either before or on
         the declaration of the result of the show of hands, a poll is demanded
         by the chairman, a shareholder or a proxyholder; and unless a poll is
         so demanded, a declaration by the chairman that the resolution has been
         carried, carried by a particular majority, lost or not carried by a
         particular majority and an entry to that effect in the Company's book
         of proceedings shall be conclusive evidence of the fact without proof
         of the number or proportion of the votes recorded in favour or against
         such resolution.

68.      When a poll is demanded, it shall be taken in such manner and at such
         time and place as the chairman directs, and either at once or after an
         interval or adjournment or otherwise. The result of the poll shall be
         the resolution of the meeting at which the poll was demanded. The
         demand of a poll may be withdrawn. When any dispute occurs over the
         admission or rejection of a vote, it shall be resolved by the chairman
         and such determination made in good faith shall be final and
         conclusive.

69.      The chairman shall not have a casting vote in addition to any vote or
         votes that the chairman has as a shareholder.

70.      The chairman of a general meeting may with the consent of the meeting
         adjourn the meeting from time to time and from place to place, but no
         business shall be transacted at any adjourned meeting other than the
         business left unfinished at the meeting that was adjourned.

71.      Any poll demanded on the election of a chairman or on a question of
         adjournment shall be taken forthwith without adjournment.

72.      The demand of a poll shall not prevent the continuance of a meeting for
         the transaction of any business other than the question on which a poll
         has been demanded.

                              VOTES OF SHAREHOLDERS

73.      Subject to the Act and to any provisions attached to any class or
         series of shares concerning or restricting voting rights:

         (1)      on a show of hands every shareholder entitled to vote present
                  in person, every duly authorized representative of a corporate
                  shareholder, and, if not prevented from voting by the Act,
                  every proxyholder, shall have one vote; and

         (2)      on a poll every shareholder present in person, every duly
                  authorized representative of a corporate shareholder, and
                  every proxyholder, shall have one vote for every share held;

<PAGE>   13
                                      -12-


         whether or not such representative or proxyholder is a shareholder.

74.      Any person entitled to transfer shares upon the death or bankruptcy of
         any shareholder or in any way other than by allotment or transfer may
         vote at any general meeting in respect thereof in the same manner as if
         such person were the registered holder of such shares so long as the
         directors are satisfied at least 48 hours before the time of holding
         the meeting of such person's right to transfer such shares.

75.      Where there are joint registered holders of any share, any of such
         holders may vote such share at any meeting, either personally or by
         proxy, as if solely entitled to it. If more than one joint holder is
         present at any meeting, personally or by proxy, the one whose name
         stands first on the Register in respect of such share shall alone be
         entitled to vote it. Several executors or administrators of a deceased
         shareholder in whose name any share stands shall for the purpose of
         this Article be deemed joint holders thereof.

76.      Votes may be cast either personally or by proxy or, in the case of a
         corporate shareholder by a representative duly authorized under the
         Act.

77.      A proxy shall be in writing and executed in the manner provided in the
         Act. A proxy or other authority of a corporate shareholder does not
         require its seal.

78.      A shareholder of unsound mind in respect of whom an order has been made
         by any court of competent jurisdiction may vote by guardian or other
         person in the nature of a guardian appointed by that court, and any
         such guardian or other person may vote by proxy.

79.      A proxy and the power of attorney or other authority, if any, under
         which it is signed or a notarially certified copy of that power or
         authority shall be deposited at the Office of the Company or at such
         other place as the directors may direct. The directors may, by
         resolution, fix a time not exceeding 48 hours excluding Saturdays and
         holidays preceding any meeting or adjourned meeting before which time
         proxies to be used at that meeting must be deposited with the Company
         at its Office or with an agent of the Company. Notice of the
         requirement for depositing proxies shall be given in the notice calling
         the meeting. The chairman of the meeting shall determine all questions
         as to validity of proxies and other instruments of authority.

80.      A vote given in accordance with the terms of a proxy shall be valid
         notwithstanding the previous death of the principal, the revocation of
         the proxy, or the transfer of the share in respect of which the vote is
         given, provided no intimation in writing of the death, revocation or
         transfer is received at the Office of the Company before the meeting or
         by the chairman of the meeting before the vote is given.

81.      Every form of proxy shall comply with the Act and its regulations and
         subject thereto may be in the following form:

                  I, ________________________ of _______________ being a
                  shareholder of _______________________ hereby

<PAGE>   14
                                      -13-


                  appoint __________________________ of ________________________
                  (or failing him/her ____________________ of __________________
                         ) as my proxyholder to attend and to vote for me and on
                  my behalf at the ordinary/special general meeting of the
                  Company, to be held on the    day    of and at any adjournment
                  thereof, or at any meeting of the Company which may be held
                  prior to [insert specified date or event]. [If the proxy is
                  solicited by or behalf of the management of the Company,
                  insert a statement to that effect.]

                  Dated this _____ day of ____________  _____ .


                  ________________________________
                           Shareholder

82.      Subject to the Act, no shareholder shall be entitled to be present or
         to vote on any question, either personally or by proxy, at any general
         meeting or be reckoned in a quorum while any call is due and payable to
         the Company in respect of any of the shares of such shareholder.

83.      Any resolution passed by the directors, notice of which has been given
         to the shareholders in the manner in which notices are hereinafter
         directed to be given and which is, within one month after it has been
         passed, ratified and confirmed in writing by shareholders entitled on a
         poll to three-fifths of the votes, shall be as valid and effectual as a
         resolution of a general meeting. This Article shall not apply to a
         resolution for winding up the Company or to a resolution dealing with
         any matter that by statute or these Articles ought to be dealt with by
         a special resolution or other method prescribed by statute.

84.      A resolution, including a special resolution, in writing and signed by
         every shareholder who would be entitled to vote on the resolution at a
         meeting is as valid as if it were passed by such shareholders at a
         meeting and satisfies all of the requirements of the Act respecting
         meetings of shareholders.

                                    DIRECTORS

85.      Unless otherwise determined by resolution of shareholders, the number
         of directors shall not be less than one or more than ten.

86.      Notwithstanding anything herein contained the subscribers to the
         Memorandum shall be the first directors of the Company.

87.      The directors may be paid out of the funds of the Company as
         remuneration for their service such sums, if any, as the Company may by
         resolution of its shareholders determine, and such remuneration shall
         be divided among them in such proportions and manner as the directors
         determine. The directors may also be paid their reasonable travelling,
         hotel and other expenses incurred in attending meetings of directors
         and otherwise in the execution of their duties as directors.

88.      The continuing directors may act notwithstanding any vacancy in their
         body, but if their

<PAGE>   15
                                      -14-


         number falls below the minimum permitted, the directors shall not,
         except in emergencies or for the purpose of filling vacancies, act so
         long as their number is below the minimum.

89.      A director may, in conjunction with the office of director, and on such
         terms as to remuneration and otherwise as the directors arrange or
         determine, hold any other office or place of profit under the Company
         or under any company in which the Company is a shareholder or is
         otherwise interested.

90.      The office of a director shall ipso facto be vacated, if the director:

         (1)      becomes bankrupt or makes an assignment for the benefit of
                  creditors;

         (2)      is, or is found by a court of competent jurisdiction to be, of
                  unsound mind;

         (3)      by notice in writing to the Company, resigns the office of
                  director; or

         (4)      is removed in the manner provided by these Articles.

91.      No director shall be disqualified by holding the office of director
         from contracting with the Company, either as vendor, purchaser, or
         otherwise, nor shall any such contract, or any contract or arrangement
         entered into or proposed to be entered into by or on behalf of the
         Company in which any director is in any way interested, either directly
         or indirectly, be avoided, nor shall any director so contracting or
         being so interested be liable to account to the Company for any profit
         realized by any such contract or arrangement by reason only of such
         director holding that office or of the fiduciary relations thereby
         established, provided the director makes a declaration or gives a
         general notice in accordance with the Act. No director shall, as a
         director, vote in respect of any contract or arrangement in which the
         director is so interested, and if the director does so vote, such vote
         shall not be counted. This prohibition may at any time or times be
         suspended or relaxed to any extent by a resolution of the shareholders
         and shall not apply to any contract by or on behalf of the Company to
         give to the directors or any of them any security for advances or by
         way of indemnity.

                              ELECTION OF DIRECTORS

92.      At the dissolution of every ordinary general meeting at which their
         successors are elected, all the directors shall retire from office and
         be succeeded by the directors elected at such meeting. Retiring
         directors shall be eligible for re-election.

93.      If at any ordinary general meeting at which an election of directors
         ought to take place no such election takes place, or if no ordinary
         general meeting is held in any year or period of years, the retiring
         directors shall continue in office until their successors are elected.

<PAGE>   16
                                      -15-


94.      The Company may by resolution of its shareholders elect any number of
         directors permitted by these Articles and may determine or alter their
         qualification.

95.      The Company may, by special resolution or in any other manner permitted
         by statute, remove any director before the expiration of such
         director's period of office and may, if desired, appoint a replacement
         to hold office during such time only as the director so removed would
         have held office.

96.      The directors may appoint any other person as a director so long as the
         total number of directors does not at any time exceed the maximum
         number permitted. No such appointment, except to fill a casual vacancy,
         shall be effective unless two-thirds of the directors concur in it. Any
         casual vacancy occurring among the directors may be filled by the
         directors, but any person so chosen shall retain office only so long as
         the vacating director would have retained it if the vacating director
         had continued as director.

                                MANAGING DIRECTOR

97.      The directors may appoint one or more of their body to be managing
         directors of the Company, either for a fixed term or otherwise, and
         may remove or dismiss them from office and appoint replacements.

98.      Subject to the provisions of any contract between a managing director
         and the Company, a managing director shall be subject to the same
         provisions as to resignation and removal as the other directors of the
         Company. A managing director who for any reason ceases to hold the
         office of director shall ipso facto immediately cease to be a managing
         director.

99.      The remuneration of a managing director shall from time to time be
         fixed by the directors and may be by way of any or all of salary,
         commission and participation in profits.

100.     The directors may from time to time entrust to and confer upon a
         managing director such of the powers exercisable under these Articles
         by the directors as they think fit, and may confer such powers for such
         time, and to be exercised for such objects and purposes and upon such
         terms and conditions, and with such restrictions as they think
         expedient; and they may confer such powers either collaterally with, or
         to the exclusion of, and in substitution for, all or any of the powers
         of the directors in that behalf; and may from time to time revoke,
         withdraw, alter or vary all or any of such powers.

                              CHAIRMAN OF THE BOARD

101.     The directors may elect one of their number to be Chairman and may
         determine the period during which the Chairman is to hold office. The
         Chairman shall perform such duties and receive such special
         remuneration as the directors may provide.

                          PRESIDENT AND VICE-PRESIDENTS

<PAGE>   17
                                      -16-


102.     The directors shall elect the President of the Company, who need not be
         a director, and may determine the period for which the President is to
         hold office. The President shall have general supervision of the
         business of the Company and shall perform such duties as may be
         assigned from time to time by the directors.

103.     The directors may also elect vice-presidents, who need not be
         directors, and may determine the periods for which they are to hold
         office. A vice-president shall, at the request of the President or the
         directors and subject to the directions of the directors, perform the
         duties of the President during the absence, illness or incapacity of
         the President, and shall also perform such duties as may be assigned by
         the President or the directors.

                             SECRETARY AND TREASURER

104.     The directors shall appoint a Secretary of the Company to keep minutes
         of shareholders' and directors' meetings and perform such other duties
         as may be assigned by the directors. The directors may also appoint a
         temporary substitute for the Secretary who shall, for the purposes of
         these Articles, be deemed to be the Secretary.

105.     The directors may appoint a treasurer of the Company to carry out such
         duties as the directors may assign.

                                    OFFICERS

106.     The directors may elect or appoint such other officers of the Company,
         having such powers and duties, as they think fit.

107.     If the directors so decide the same person may hold more than one of
         the offices provided for in these Articles.

                            PROCEEDINGS OF DIRECTORS

108.     The directors may meet together for the dispatch of business, adjourn
         and otherwise regulate their meetings and proceedings, as they think
         fit, and may determine the quorum necessary for the transaction of
         business. Until otherwise determined, one director shall constitute a
         quorum and may hold a meeting.

109.     If all directors of the Company entitled to attend a meeting either
         generally or specifically consent, a director may participate in a
         meeting of directors or of a committee of directors by means of such
         telephone or other communications facilities as permit all persons
         participating in the meeting to hear each other, and a director
         participating in such a meeting by such means is deemed to be present
         at that meeting for purposes of these Articles.

<PAGE>   18
                                      -17-


110.     Meetings of directors may be held either within or without the Province
         of Nova Scotia and the directors may from time to time make
         arrangements relating to the time and place of holding directors'
         meetings, the notices to be given for such meetings and what meetings
         may be held without notice. Unless otherwise provided by such
         arrangements:

         (1)      A meeting of directors may be held at the close of every
                  ordinary general meeting of the Company without notice.

         (2)      Notice of every other directors' meeting may be given as
                  permitted by these Articles to each director at least 48 hours
                  before the time fixed for the meeting.

         (3)      A meeting of directors may be held without formal notice if
                  all the directors are present or if those absent have
                  signified their assent to such meeting or their consent to the
                  business transacted at such meeting.

111.     The President or any director may at any time, and the Secretary, upon
         the request of the President or any director, shall summon a meeting of
         the directors to be held at the Office of the Company. The President,
         the Chairman or a majority of the directors may at any time, and the
         Secretary, upon the request of the President, the Chairman or a
         majority of the directors shall, summon a meeting to be held elsewhere.

112.     (1)      Questions arising at any meeting of directors shall be decided
                  by a majority of votes. The chairman of the meeting may vote
                  as a director but shall not have a second or casting vote.

         (2)      At any meeting of directors the chairman shall receive and
                  count the vote of any director not present in person at such
                  meeting on any question or matter arising at such meeting
                  whenever such absent director has indicated by telegram,
                  letter or other writing lodged with the chairman of such
                  meeting the manner in which the absent director desires to
                  vote on such question or matter and such question or matter
                  has been specifically mentioned in the notice calling the
                  meeting as a question or matter to be discussed or decided
                  thereat. In respect of any such question or matter so
                  mentioned in such notice any director may give to any other
                  director a proxy authorizing such other director to vote for
                  such first named director at such meeting, and the chairman of
                  such meeting, after such proxy has been so lodged, shall
                  receive and count any vote given in pursuance thereof
                  notwithstanding the absence of the director giving such proxy.

113.     If no Chairman is elected, or if at any meeting of directors the
         Chairman is not present within five minutes after the time appointed
         for holding the meeting, or declines to take the chair, the President,
         if a director, shall preside. If the President is not a director, is
         not present at such time or declines to take the chair, a
         vice-president who is also a director shall preside. If no person
         described above is present at such time and willing to take the chair,

<PAGE>   19
                                      -18-


         the directors present shall choose some one of their number to be
         chairman of the meeting.

114.     A meeting of the directors at which a quorum is present shall be
         competent to exercise all or any of the authorities, powers and
         discretions for the time being vested in or exercisable by the
         directors generally.

115.     The directors may delegate any of their powers to committees consisting
         of such number of directors as they think fit. Any committee so formed
         shall in the exercise of the powers so delegated conform to any
         regulations that may be imposed on them by the directors.

116.     The meetings and proceedings of any committee of directors shall be
         governed by the provisions contained in these Articles for regulating
         the meetings and proceedings of the directors insofar as they are
         applicable and are not superseded by any regulations made by the
         directors.

117.     All acts done at any meeting of the directors or of a committee of
         directors or by any person acting as a director shall, notwithstanding
         that it is afterwards discovered that there was some defect in the
         appointment of the director or person so acting, or that they or any of
         them were disqualified, be as valid as if every such person had been
         duly appointed and was qualified to be a director.

118.     A resolution in writing and signed by every director who would be
         entitled to vote on the resolution at a meeting is as valid as if it
         were passed by such directors at a meeting.

119.     If any one or more of the directors is called upon to perform extra
         services or to make any special exertions in going or residing abroad
         or otherwise for any of the purposes of the Company or the business
         thereof, the Company may remunerate the director or directors so doing,
         either by a fixed sum or by a percentage of profits or otherwise. Such
         remuneration shall be determined by the directors and may be either in
         addition to or in substitution for remuneration otherwise authorized by
         these Articles.

                                    REGISTERS

120.     The directors shall cause to be kept at the Company's Office in
         accordance with the provisions of the Act a Register of the
         shareholders of the Company, a register of the holders of bonds,
         debentures and other securities of the Company and a register of its
         directors. Branch registers of the shareholders and of the holders of
         bonds, debentures and other securities may be kept elsewhere, either
         within or without the Province of Nova Scotia, in accordance with the
         Act.

                                     MINUTES

<PAGE>   20
                                      -19-


121.     The directors shall cause minutes to be entered in books designated for
         the purpose:

         (1)      of all appointments of officers;

         (2)      of the names of directors present at each meeting of directors
                  and of any committees of directors;

         (3)      of all orders made by the directors and committees of
                  directors; and

         (4)      of all resolutions and proceedings of meetings of shareholders
                  and of directors.

         Any such minutes of any meeting of directors or of any committee of
         directors or of shareholders, if purporting to be signed by the
         chairman of such meeting or by the chairman of the next succeeding
         meeting, shall be receivable as prima facie evidence of the matters
         stated in such minutes.

                               POWERS OF DIRECTORS

122.     The management of the business of the Company is vested in the
         directors who, in addition to the powers and authorities by these
         Articles or otherwise expressly conferred upon them, may exercise all
         such powers and do all such acts and things as may be exercised or done
         by the Company and are not hereby or by statute expressly directed or
         required to be exercised or done by the shareholders, but subject
         nevertheless to the provisions of any statute, the Memorandum or these
         Articles. No modification of the Memorandum or these Articles shall
         invalidate any prior act of the directors that would have been valid if
         such modification had not been made.

123.     Without restricting the generality of the terms of any of these
         Articles and without prejudice to the powers conferred thereby, the
         directors may:

         (1)      take such steps as they think fit to carry out any agreement
                  or contract made by or on behalf of the Company;

         (2)      pay costs, charges and expenses preliminary and incidental to
                  the promotion, formation, establishment, and registration of
                  the Company;

         (3)      purchase or otherwise acquire for the Company any property,
                  rights or privileges that the Company is authorized to
                  acquire, at such price and generally on such terms and
                  conditions as they think fit;

         (4)      pay for any property, rights or privileges acquired by, or
                  services rendered to the Company either wholly or partially in
                  cash or in shares (fully paid-up or otherwise), bonds,
                  debentures or other securities of the Company;

         (5)      subject to the Act, secure the fulfilment of any contracts or
                  engagements entered into

<PAGE>   21
                                      -20-

                  by the Company by mortgaging or charging all or any of the
                  property of the Company and its unpaid capital for the time
                  being, or in such other manner as they think fit;

         (6)      appoint, remove or suspend at their discretion such experts,
                  managers, secretaries, treasurers, officers, clerks, agents
                  and servants for permanent, temporary or special services, as
                  they from time to time think fit, and determine their powers
                  and duties and fix their salaries or emoluments and require
                  security in such instances and to such amounts as they think
                  fit;

         (7)      accept a surrender of shares from any shareholder insofar as
                  the law permits and on such terms and conditions as may be
                  agreed;

         (8)      appoint any person or persons to accept and hold in trust for
                  the Company any property belonging to the Company, or in which
                  it is interested, execute and do all such deeds and things as
                  may be required in relation to such trust, and provide for the
                  remuneration of such trustee or trustees;

         (9)      institute, conduct, defend, compound or abandon any legal
                  proceedings by and against the Company, its directors or its
                  officers or otherwise concerning the affairs of the Company,
                  and also compound and allow time for payment or satisfaction
                  of any debts due and of any claims or demands by or against
                  the Company;

         (10)     refer any claims or demands by or against the Company to
                  arbitration and observe and perform the awards;

         (11)     make and give receipts, releases and other discharges for
                  amounts payable to the Company and for claims and demands of
                  the Company;

         (12)     determine who may exercise the borrowing powers of the Company
                  and sign on the Company's behalf bonds, debentures or other
                  securities, bills, notes, receipts, acceptances, assignments,
                  transfers, hypothecations, pledges, endorsements, cheques,
                  drafts, releases, contracts, agreements and all other
                  instruments and documents;

         (13)     provide for the management of the affairs of the Company
                  abroad in such manner as they think fit, and in particular
                  appoint any person to be the attorney or agent of the Company
                  with such powers (including power to sub-delegate) and upon
                  such terms as may be thought fit;

         (14)     invest and deal with any funds of the Company in such
                  securities and in such manner as they think fit; and vary or
                  realize such investments;

         (15)     subject to the Act, execute in the name and on behalf of the
                  Company in favour of any director or other person who may
                  incur or be about to incur any personal liability for the
                  benefit of the Company such mortgages of the Company's
                  property, present and future, as they think fit;

<PAGE>   22
                                      -21-


         (16)     give any officer or employee of the Company a commission on
                  the profits of any particular business or transaction or a
                  share in the general profits of the Company;

         (17)     set aside out of the profits of the Company before declaring
                  any dividend such amounts as they think proper as a reserve
                  fund to meet contingencies or provide for dividends,
                  depreciation, repairing, improving and maintaining any of the
                  property of the Company and such other purposes as the
                  directors may in their absolute discretion think in the
                  interests of the Company; and invest such amounts in such
                  investments as they think fit, and deal with and vary such
                  investments, and dispose of all or any part of them for the
                  benefit of the Company, and divide the reserve fund into such
                  special funds as they think fit, with full power to employ the
                  assets constituting the reserve fund in the business of the
                  Company without being bound to keep them separate from the
                  other assets;

         (18)     make, vary and repeal rules respecting the business of the
                  Company, its officers and employees, the shareholders of the
                  Company or any section or class of them;

         (19)     enter into all such negotiations and contracts, rescind and
                  vary all such contracts, and execute and do all such acts,
                  deeds and things in the name and on behalf of the Company as
                  they consider expedient for or in relation to any of the
                  matters aforesaid or otherwise for the purposes of the
                  Company;

         (20)     provide for the management of the affairs of the Company in
                  such manner as they think fit.

                                   SOLICITORS

124.     The Company may employ or retain solicitors any of whom may, at the
         request or on the instruction of the directors, the Chairman, the
         President or a managing director, attend meetings of the directors or
         shareholders, whether or not the solicitor is a shareholder or a
         director of the Company. A solicitor who is also a director may
         nevertheless charge for services rendered to the Company as a
         solicitor.

                                    THE SEAL

125.     The directors shall arrange for the safe custody of the common seal of
         the Company (the "Seal"). The Seal may be affixed to any instrument in
         the presence of and contemporaneously with the attesting signature of
         (i) any director or officer acting within such person's authority or
         (ii) any person under the authority of a resolution of the directors or
         a committee thereof. For the purpose of certifying documents or
         proceedings the Seal may be affixed by any director or the President, a
         vice-president, the Secretary, an assistant

<PAGE>   23
                                      -22-


         secretary or any other officer of the Company without the authorization
         of a resolution of the directors.

126.     The Company may have facsimiles of the Seal which may be used
         interchangeably with the Seal.

127.     The Company may have for use at any place outside the Province of Nova
         Scotia, as to all matters to which the corporate existence and capacity
         of the Company extends, an official seal that is a facsimile of the
         Seal of the Company with the addition on its face of the name of the
         place where it is to be used; and the Company may by writing under its
         Seal authorize any person to affix such official seal at such place to
         any document to which the Company is a party.

                                    DIVIDENDS

128.     The directors may from time to time declare such dividend as they deem
         proper upon shares of the Company according to the rights and
         restrictions attached to any class or series of shares, and may
         determine the date upon which such dividend will be payable and that it
         will be payable to the persons registered as the holders of the shares
         on which it is declared at the close of business upon a record date. No
         transfer of such shares registered after the record date shall pass any
         right to the dividend so declared.

129.     Dividends may be paid as permitted by law and, without limitation, may
         be paid out of the profits, retained earnings or contributed surplus of
         the Company. No interest shall be payable on any dividend except
         insofar as the rights attached to any class or series of shares provide
         otherwise.

130.     The declaration of the directors as to the amount of the profits,
         retained earnings or contributed surplus of the Company shall be
         conclusive.

131.     The directors may from time to time pay to the shareholders such
         interim dividends as in their judgment the position of the Company
         justifies.

132.     Subject to these Articles and the rights and restrictions attached to
         any class or series of shares, dividends may be declared and paid to
         the shareholders in proportion to the amount of capital paid-up on the
         shares (not including any capital paid-up bearing interest) held by
         them respectively.

133.     The directors may deduct from the dividends payable to any shareholder
         amounts due and payable by the shareholder to the Company on account of
         calls, instalments or otherwise, and may apply the same in or towards
         satisfaction of such amounts so due and payable.

134.     The directors may retain any dividends on which the Company has a lien,
         and may apply the same in or towards satisfaction of the debts,
         liabilities or engagements in respect of which

<PAGE>   24
                                      -23-


         the lien exists.

135.     The directors may retain the dividends payable upon shares to which a
         person is entitled or entitled to transfer upon the death or bankruptcy
         of a shareholder or in any way other than by allotment or transfer,
         until such person has become registered as the holder of such shares or
         has duly transferred such shares.

136.     When the directors declare a dividend on a class or series of shares
         and also make a call on such shares payable on or before the date on
         which the dividend is payable, the directors may retain all or part of
         the dividend and set off the amount retained against the call.

137.     The directors may declare that a dividend be paid by the distribution
         of cash, paid-up shares (at par or at a premium), debentures, bonds or
         other securities of the Company or of any other company or any other
         specific assets held or to be acquired by the Company or in any one or
         more of such ways.

138.     The directors may settle any difficulty that may arise in regard to the
         distribution of a dividend as they think expedient, and in particular
         without restricting the generality of the foregoing may issue
         fractional certificates, may fix the value for distribution of any
         specific assets, may determine that cash payments will be made to any
         shareholders upon the footing of the value so fixed or that fractions
         may be disregarded in order to adjust the rights of all parties, and
         may vest cash or specific assets in trustees upon such trusts for the
         persons entitled to the dividend as may seem expedient to the
         directors.

139.     Any person registered as a joint holder of any share may give effectual
         receipts for all dividends and payments on account of dividends in
         respect of such share.

140.     Unless otherwise determined by the directors, any dividend may be paid
         by a cheque or warrant delivered to or sent through the post to the
         registered address of the shareholder entitled, or, when there are
         joint holders, to the registered address of that one whose name stands
         first on the register for the shares jointly held. Every cheque or
         warrant so delivered or sent shall be made payable to the order of the
         person to whom it is delivered or sent. The mailing or other
         transmission to a shareholder at the shareholder's registered address
         (or, in the case of joint shareholders at the address of the holder
         whose name stands first on the register) of a cheque payable to the
         order of the person to whom it is addressed for the amount of any
         dividend payable in cash after the deduction of any tax which the
         Company has properly withheld, shall discharge the Company's liability
         for the dividend unless the cheque is not paid on due presentation. If
         any cheque for a dividend payable in cash is not received, the Company
         shall issue to the shareholder a replacement cheque for the same amount
         on such terms as to indemnity and evidence of non-receipt as the
         directors may impose. No shareholder may recover by action or other
         legal process against the Company any dividend represented by a cheque
         that has not been duly presented to a banker of the

<PAGE>   25
                                      -24-


         Company for payment or that otherwise remains unclaimed for 6 years
         from the date on which it was payable.

                                    ACCOUNTS

141.     The directors shall cause proper books of account to be kept of the
         amounts received and expended by the Company, the matters in respect of
         which such receipts and expenditures take place, all sales and
         purchases of goods by the Company, and the assets, credits and
         liabilities of the Company.

142.     The books of account shall be kept at the head office of the Company or
         at such other place or places as the directors may direct.

143.     The directors shall from time to time determine whether and to what
         extent and at what times and places and under what conditions the
         accounts and books of the Company or any of them shall be open to
         inspection of the shareholders, and no shareholder shall have any right
         to inspect any account or book or document of the Company except as
         conferred by statute or authorized by the directors or a resolution of
         the shareholders.

144.     At the ordinary general meeting in every year the directors shall lay
         before the Company such financial statements and reports in connection
         therewith as may be required by the Act or other applicable statute or
         regulation thereunder and shall distribute copies thereof at such times
         and to such persons as may be required by statute or regulation.

                               AUDITORS AND AUDIT

145.     Except in respect of a financial year for which the Company is exempt
         from audit requirements in the Act, the Company shall at each ordinary
         general meeting appoint an auditor or auditors to hold office until the
         next ordinary general meeting. If at any general meeting at which the
         appointment of an auditor or auditors is to take place and no such
         appointment takes place, or if no ordinary general meeting is held in
         any year or period of years, the directors shall appoint an auditor or
         auditors to hold office until the next ordinary general meeting.

146.     The first auditors of the Company may be appointed by the directors at
         any time before the first ordinary general meeting and the auditors so
         appointed shall hold office until such meeting unless previously
         removed by a resolution of the shareholders, in which event the
         shareholders may appoint auditors.

147.     The directors may fill any casual vacancy in the office of the auditor
         but while any such vacancy continues the surviving or continuing
         auditor or auditors, if any, may act.

148.     The Company may appoint as auditor any person, including a shareholder,
         not disqualified by statute.

<PAGE>   26
                                      -25-


149.     An auditor may be removed or replaced in the circumstances and in the
         manner specified in the Act.

150.     The remuneration of the auditors shall be fixed by the shareholders, or
         by the directors pursuant to authorization given by the shareholders,
         except that the remuneration of an auditor appointed to fill a casual
         vacancy may be fixed by the directors.

151.     The auditors shall conduct such audit as may be required by the Act and
         their report, if any, shall be dealt with by the Company as required by
         the Act.

                                     NOTICES

152.     A notice (including any communication or document) shall be
         sufficiently given, delivered or served by the Company upon a
         shareholder, director, officer or auditor by personal delivery at such
         person's registered address (or, in the case of a director, officer or
         auditor, last known address) or by prepaid mail, telegraph, telex,
         facsimile machine or other electronic means of communication addressed
         to such person at such address.

153.     Shareholders having no registered address shall not be entitled to
         receive notice.

154.     All notices with respect to registered shares to which persons are
         jointly entitled may be sufficiently given to all joint holders thereof
         by notice given to whichever of such persons is named first in the
         Register for such shares.

155.     Any notice sent by mail shall be deemed to be given, delivered or
         served on the earlier of actual receipt and the third business day
         following that upon which it is mailed, and in proving such service it
         shall be sufficient to prove that the notice was properly addressed and
         mailed with the postage prepaid thereon. Any notice given by electronic
         means of communication shall be deemed to be given when entered into
         the appropriate transmitting device for transmission. A certificate in
         writing signed on behalf of the Company that the notice was so
         addressed and mailed or transmitted shall be conclusive evidence
         thereof.

156.     Every person who by operation of law, transfer or other means
         whatsoever becomes entitled to any share shall be bound by every notice
         in respect of such share that prior to such person's name and address
         being entered on the Register was duly served in the manner
         hereinbefore provided upon the person from whom such person derived
         title to such share.

157.     Any notice delivered, sent or transmitted to the registered address of
         any shareholder pursuant to these Articles, shall, notwithstanding that
         such shareholder is then deceased and that the Company has notice
         thereof, be deemed to have been served in respect of any registered
         shares, whether held by such deceased shareholder solely or jointly
         with other persons, until some other person is registered as the holder
         or joint holder thereof, and such service shall for all purposes of
         these Articles be deemed a sufficient service of such notice

<PAGE>   27
                                      -26-


         on the heirs, executors or administrators of the deceased shareholder
         and all joint holders of such shares.

158.     Any notice may bear the name or signature, manual or reproduced, of the
         person giving the notice written or printed.

159.     When a given number of days' notice or notice extending over any other
         period is required to be given, the day of service and the day upon
         which such notice expires shall not, unless it is otherwise provided,
         be counted in such number of days or other period.

                                    INDEMNITY

160.     Every director or officer, former director or officer, or person who
         acts or acted at the Company's request, as a director or officer of the
         Company, a body corporate, partnership or other association of which
         the Company 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 the
         Company against, and it shall be the duty of the directors out of the
         funds of the Company to pay, all costs, losses and expenses, including
         an amount paid to settle an action or claim or satisfy a judgment, that
         such director, officer or 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 the
         Company or such body corporate, partnership or other association,
         whether the Company is a claimant or party to such action or proceeding
         or otherwise; and the amount for which such indemnity is proved shall
         immediately attach as a lien on the property of the Company and have
         priority as against the shareholders over all other claims.

161.     No director or officer, former director or officer, or person who acts
         or acted at the Company's request, as a director or officer of the
         Company, a body corporate, partnership or other association of which
         the Company is or was a shareholder, partner, member or creditor, in
         the absence of any dishonesty on such person's part, shall be liable
         for the acts, receipts, neglects or defaults of any other director,
         officer or such person, or for joining in any receipt or other act for
         conformity, or for any loss, damage or expense happening to the Company
         through the insufficiency or deficiency of title to any property
         acquired for or on behalf of the Company, or through the insufficiency
         or deficiency of any security in or upon which any of the funds of the
         Company are invested, or for any loss or damage arising from the
         bankruptcy, insolvency or tortious acts of any person with whom any
         funds, securities or effects are deposited, or for any loss occasioned
         by error of judgment or oversight on the part of such person, or for
         any other loss, damage or misfortune whatsoever which happens in the
         execution of the duties of such person or in relation thereto.

                                    REMINDERS

<PAGE>   28
                                      -27-


162.     The directors shall comply with the following provisions of the Act or
         the Corporations Registration Act (Nova Scotia) where indicated:

         (1)      Keep a current register of shareholders (Section 42).

         (2)      Keep a current register of directors, officers and managers,
                  send to the Registrar a copy thereof and notice of all changes
                  therein (Section 98).

         (3)      Keep a current register of holders of bonds, debentures and
                  other securities (Section 111 and Third Schedule).

         (4)      Call a general meeting every year within the proper time
                  (Section 83). Meetings must be held not later than 15 months
                  after the preceding general meeting.

         (5)      Send to the Registrar copies of all special resolutions
                  (Section 88).

         (6)      Send to the Registrar notice of the address of the Company's
                  Office and of all changes in such address (Section 79).

         (7)      Keep proper minutes of all shareholders' meetings and
                  directors' meetings in the Company's minute book kept at the
                  Company's Office (Sections 89 and 90).

         (8)      Obtain a certificate under the Corporations Registration Act
                  (Nova Scotia) as soon as business is commenced.

         (9)      Send notice of recognized agent to the Registrar under the
                  Corporations Registration Act (Nova Scotia).

NAME OF SUBSCRIBER



Dated at Halifax, Nova Scotia the 11th day of July, 2001.

Witness to above signature:


_________________________________

     Halifax, Nova Scotia

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.5
<SEQUENCE>6
<FILENAME>f74776orex4-5.txt
<DESCRIPTION>EXHIBIT 4.5
<TEXT>
<PAGE>   1
                                                                     Exhibit 4.5











                      CALPINE CANADA ENERGY FINANCE II 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
                                                                                                 ----
                                    ARTICLE I
                   DEFINITIONS AND INCORPORATION BY REFERENCE

<S>                                                                                               <C>
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 ......................................................  6

                                   ARTICLE II
                                 THE SECURITIES

SECTION 2.1         Securities Issuable in Series ..............................................  7
SECTION 2.2         Form and Dating ............................................................  8
SECTION 2.3         Execution and Authentication ...............................................  9
SECTION 2.4         Registrar and Paying Agent .................................................  9
SECTION 2.5         Paying Agent To Hold Money in Trust ........................................ 10
SECTION 2.6         Securityholder Lists ....................................................... 10
SECTION 2.7         Transfer and Exchange ...................................................... 10
SECTION 2.8         Replacement Securities ..................................................... 11
SECTION 2.9         Outstanding Securities ..................................................... 12
SECTION 2.10        Determination of Holders' Action ........................................... 12
SECTION 2.11        Temporary Securities ....................................................... 12
SECTION 2.12        Cancellation ............................................................... 12
SECTION 2.13        Defaulted Interest ......................................................... 13
SECTION 2.14        Interest Act (Canada) ...................................................... 13
SECTION 2.15        Securities Act Legend ...................................................... 13

                                   ARTICLE III
                                    COVENANTS

SECTION 3.1         Payment of Securities ...................................................... 13
SECTION 3.2         Maintenance of Office or Agency ............................................ 13
SECTION 3.3         Limitation on Sale/Leaseback Transactions .................................. 13
SECTION 3.4         Limitation on Liens ........................................................ 14
SECTION 3.5         Compliance Certificate ..................................................... 15
SECTION 3.6         Further Instruments and Acts ............................................... 15
SECTION 3.7         Waiver of Certain Covenants ................................................ 15
SECTION 3.8         Additional Amounts ......................................................... 15

                                   ARTICLE IV
                      CONSOLIDATION, MERGER, SALE AND LEASE

SECTION 4.1         Merger and Consolidation of Company ........................................ 15
SECTION 4.2         Successor Substituted ...................................................... 16
SECTION 4.3         Assignment by the Company to the Guarantor
                      or its Significant Subsidiaries .......................................... 16

                                    ARTICLE V
                              DEFAULTS AND REMEDIES

SECTION 5.1         Events of Default .......................................................... 16
SECTION 5.2         Acceleration ............................................................... 18
SECTION 5.3         Other Remedies ............................................................. 18
SECTION 5.4         Waiver of Past Defaults                                                      18
SECTION 5.5         Control by Majority ........................................................ 18
SECTION 5.6         Limitation on Suits ........................................................ 18
SECTION 5.7         Rights of Holders To Receive Payment ....................................... 19
</TABLE>

<PAGE>   3

<TABLE>
<CAPTION>
<S>                                                                                              <C>
SECTION 5.8         Collection Suit by Trustee ................................................. 19
SECTION 5.9         Trustee May File Proofs of Claim ........................................... 19
SECTION 5.10        Priorities ................................................................. 20
SECTION 5.11        Undertaking for Costs ...................................................... 20
SECTION 5.12        Waiver of Stay or Extension Laws ........................................... 20

                                   ARTICLE VI
                                    TRUSTEE

SECTION 6.1         Duties of Trustee .......................................................... 20
SECTION 6.2         Rights of Trustee .......................................................... 21
SECTION 6.3         Individual Rights of Trustee ............................................... 22
SECTION 6.4         Trustee's Disclaimer ....................................................... 22
SECTION 6.5         Notice of Defaults ......................................................... 22
SECTION 6.6         Reports by Trustee to Holders .............................................. 22
SECTION 6.7         Compensation and Indemnity ................................................. 22
SECTION 6.8         Replacement of Trustee ..................................................... 23
SECTION 6.9         Successor Trustee by Merger, etc ........................................... 24
SECTION 6.10        Eligibility; Disqualification; Conflicting Interests ....................... 24
SECTION 6.11        Preferential Collection of Claims Against Company .......................... 24

                                   ARTICLE VII
                     SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 7.1         Discharge of Liability on Securities ....................................... 24
SECTION 7.2         Termination of Company's Obligations ....................................... 25
SECTION 7.3         Defeasance and Discharge of Indenture ...................................... 25
SECTION 7.4         Defeasance of Certain Obligations .......................................... 27
SECTION 7.5         Application of Trust Money ................................................. 28
SECTION 7.6         Repayment to Company ....................................................... 28
SECTION 7.7         Reinstatement .............................................................. 28
SECTION 7.8         Deposited Money and U.S. Government Obligations to be Held in Trust:
                    Miscellaneous Provisions ................................................... 28

                                  ARTICLE VIII
                           AMENDMENTS AND SUPPLEMENTS

SECTION 8.1         Without Consent of Holders ................................................. 28
SECTION 8.2         With Consent of Holders .................................................... 29
SECTION 8.3         Compliance with Trust Indenture Act ........................................ 30
SECTION 8.4         Revocation and Effect of Consents .......................................... 30
SECTION 8.5         Notation on or Exchange of Securities ...................................... 30
SECTION 8.6         Trustee To Sign Amendments ................................................. 30
SECTION 8.7         Fixing of Record Dates ..................................................... 30

                                   ARTICLE IX
                                   REDEMPTION

SECTION 9.1         Applicability of Article ................................................... 30
SECTION 9.2         Election to Redeem; Notice to Trustee ...................................... 31
SECTION 9.3         Selection by Trustee of Securities to be Redeemed .......................... 31
SECTION 9.4         Notice of Redemption ....................................................... 31
SECTION 9.5         Deposit of Redemption Price ................................................ 31
SECTION 9.6         Securities Redeemed in Part ................................................ 32

                                    ARTICLE X
                                  MISCELLANEOUS

SECTION 10.1        Trust Indenture Act Controls ............................................... 32
</TABLE>

<PAGE>   4

<TABLE>
<CAPTION>
<S>                                                                                              <C>
SECTION 10.2        Notices.. .................................................................. 32
SECTION 10.3        Communication by Holders with Other Holders ................................ 33
SECTION 10.4        Certificate and Opinion as to Conditions Precedent ......................... 33
SECTION 10.5        Statements Required in Certificate or Opinion .............................. 33
SECTION 10.6        Rules by Trustee and Agents ................................................ 33
SECTION 10.7        Legal Holidays ............................................................. 33
SECTION 10.8        Successors; No Recourse Against Others ..................................... 34
SECTION 10.9        Duplicate Originals ........................................................ 34
SECTION 10.10       Other Provisions ........................................................... 34
SECTION 10.11       Governing Law .............................................................. 34
SECTION 10.12       Jurisdiction ............................................................... 34
SECTION 10.13       Judgment Currency .......................................................... 34
SIGNATURES
EXHIBIT A -- Form of Security ..................................................................A-1
</TABLE>

<PAGE>   5



    INDENTURE, dated as of ________ __, 2001, between Calpine Canada Energy II
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).

<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.

    "Clearstream" means Clearstream Banking, S.A., formerly Cedelbank.

    "Common Depository" means a common depositary of Securities, and its
successors and assigns, on behalf of Euroclear and Clearsteam, each in its
capacity as a Depository, and shall initially be Kredietbank S.A.
Luxembourgeoise.

    "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, as to Securities denominated in United States dollars,
The Depository Trust Company, its nominees, and their respective successors; and
as to Securities denominated other than in United States dollars, Euroclear and
Clearstream, their respective nominees, and the respective successors of each of
the foregoing, in each case until a successor Depository or Depositories 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.


                                       2
<PAGE>   7

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

    "Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear
System.

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

    "Exchange Securities" means the Securities to be issued pursuant to this
Indenture in connection with a Registered Exchange Offer pursuant to a
Registration Rights Agreement with respect to a specified Series of Initial
Securities.

    "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 D.

    "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
"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,

                                       3
<PAGE>   8
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.

    "Initial Securities" means a Series of Securities issued under this
Indenture pursuant to Rule 144A and/or Regulation S.

    "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).

     "Non-U.S. Person" means a person that is not a U.S. person, as defined in
Regulation S.

    "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.

    "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.

    "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

    "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

                                       4
<PAGE>   9
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.

    "Registered Exchange Offer" means an offer by the Company, pursuant to a
Registration Rights Agreement, to certain Holders of specified Initial
Securities, to issue and deliver to such Holders, in exchange for such Initial
Securities, a like aggregate principal amount of Exchange Securities registered
under the Securities Act.

    "Registration Rights Agreement" means an agreement by the Company and the
Guarantor for the benefit of Holders of specified series of Initial Securities
relating to a Registered Exchange Offer and, under certain circumstances, a
Shelf Registration Statement.

    "Regulation S" means Regulation S under the Securities Act (or any successor
provision), as it may be amended from time to time.

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

    "Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.

    "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, including, without limitation, Initial Securities and Exchange
Securities.

    "Securities Act" means the Securities Act of 1933, as amended.

    "Securities Custodian" means the custodian with respect to a Global Security
(as appointed by a Depository), or any successor person thereto and shall
initially be the Trustee, where the Depository is The Depository Trust Company,
and shall initially be the Common Depository, where the Depositories are
Euroclear and Clearstream.

    "Shelf Registration Statement" means a registration statement issued by the
Company, in connection with the offer and sale of specified Initial Securities,
pursuant to a Registration Rights Agreement.

    "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.

                                       5
<PAGE>   10

    "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.

    "Transfer Restricted Securities" means Securities that bear or are required
to bear the legend set forth in Section 2.15 hereof.

    "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.

    "U.S. Person" has the meaning ascribed to such term in Regulation S.

    "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).

                                       6
<PAGE>   11

    "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>

                                                                                          DEFINED IN
                           TERM                                                             SECTION
                           ----                                                           -----------
<S>                                                                                       <C>
                           "144A Certificated Security"...............................        2.2
                           "144A Global Security".....................................        2.2
                           "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
                           "Regulation S Certificated Security".......................        2.2
                           "Regulation S Global Security".............................        2.2
                           "Securities Act Legend"....................................        2.15
                           "Series"...................................................        2.1
                           "Successor Corporation"....................................        4.1(i)
                           "Transfer Agent"...........................................        2.4
</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

     "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;

                                       7
<PAGE>   12

       (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. Initial Securities of a Series
shall be treated as a single class and series with Exchange Securities issued in
exchange for such Initial Securities.

    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:

        (1) the title, including CUSIP number and, if applicable, ISIN and
    Common Code numbers, 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

                                       8
<PAGE>   13
     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, including the office or agency appointed by the
    Company pursuant to Sections 2.4 and 3.2 and any Paying Agent or Transfer
    Agent appointed pursuant to the requirements of such stock exchange;

         (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;

         (15) whether Securities of the Series are the subject of a Registration
     Rights Agreement;

        (16) whether the Securities of the Series are subject to defeasance or
    covenant defeasance under Section 7.3 or 7.4, including any modification of
    the provisions of Sections 7.3, 7.4, 7.5, 7.6, 7.7 or 7.8 pursuant to
    Section 7.9, 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;

        (17) 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, its nominees or their
    respective 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;

        (18) procedures for the transfer of beneficial interests in the
    Securities of that Series that are different from, or in addition to, the
    procedures set forth herein;

        (19) the circumstances, if any, and the terms and conditions, if any,
    upon which additional amounts may be owed pursuant to Section 3.8; and

        (20) 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.

                                       9
<PAGE>   14

    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 Securities Custodian,
as custodian for the Depository, duly executed by the Company and authenticated
by the Trustee as hereinafter provided. Each Global Security shall bear the
global securities legend set forth in Exhibit A hereto and such legend or
legends as may be required or reasonably requested by the Depository. In the
case of Initial Securities, each Global Security shall also bear the restricted
securities legend set forth in Exhibit A hereto.

    Unless otherwise provided as contemplated by Section 2.1, the following
paragraph shall be applicable to Initial Securities issued and sold to QIBs in
reliance on Rule 144A or sold in offshore transactions in reliance on Regulation
S. Initial Securities issued and sold to QIBs in reliance on Rule 144A shall be
represented by one or more Global Securities (the "144A Global Securities," and
definitive registered Securities issued in exchange therefor pursuant to Section
2.7, the "144A Certificated Securities"). Initial Securities sold in offshore
transactions in reliance on Regulation S shall be issued initially in the form
of one or more temporary Global Securities (a "Regulation S Temporary Global
Security"), which shall bear the temporary Regulation S legend set forth in
Exhibit A hereto. At any time on or after the 40th day following the latest of
the commencement of the offering of the Initial Securities sold in offshore
transactions in reliance on Regulation S and the issue date of such Initial
Securities (the identity of such 40th day to be certified to the Trustee by an
Officers' Certificate), upon receipt by Euroclear, Clearstream and the Company
of a certificate substantially in the form of Exhibit B hereto, one or more
permanent Global Securities (each a "Regulation S Permanent Global Security" and
together with the Regulation S Temporary Global Securities, the "Regulation S
Global Securities") duly executed by the Company and authenticated by the
Trustee shall be deposited with the Securities Custodian, as custodian for the
Depositary, in exchange for the principal amount of the beneficial interest in
the Regulation S Temporary Global Securities to be exchanged, and the Registrar
shall reflect on its books and records the date and a decrease in the principal
amount of the Regulation S Temporary Global Securities in an amount equal to the
principal amount of the beneficial interest in the Regulation S Temporary Global
Securities so exchanged. Prior to such 40th day, beneficial interests in a
Regulation S Temporary Global Security may be held only through Euroclear or
Clearstream. The Permanent Regulation S Global Security and any Regulation S
Certificated Security issued in exchange therefor shall not bear the temporary
Regulation S legend. One or more definitive registered Securities sold in
offshore transactions in reliance on Regulation S (each, a "Regulation S
Certificated Security") may be issued in exchange for an interest in a
Regulation S Permanent Global Security in accordance with the terms of this
Indenture and only in the circumstances set forth in the sixth or seventh
paragraphs of Section 2.7. Interests in a Regulation S Temporary Global Security
may not be exchanged for Regulation S Certificated Securities.

                                       10
<PAGE>   15

    The aggregate principal amount of the Global Securities may from time to
time be increased or decreased by adjustments made on the records of the
Securities Custodian and the Depository or its nominee at any time prior to
cancellation, if, in accordance with this Indenture and the Securities
(including any applicable restrictions on transfer) any beneficial interest in a
Global Security is (a) exchanged for definitive registered Securities, (b)
redeemed, (c) repurchased, (d) cancelled, or (e) exchanged for a beneficial
interest in another Global Security, in which case the principal amount of
Securities represented by such Global Security shall be reduced or increased, as
applicable, and an adjustment shall be made on the books and records of the
Securities Custodian with respect to such Global Security to reflect such
adjustment.

    The definitive registered 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 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; provided that the Trustee shall authenticate,
upon a written order of the Company signed by two Officers, Exchange Securities
for issue only in a Registered Exchange Offer pursuant to a Registration Rights
Agreement, for a like principal amount of Initial Securities. 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.

                                       11
<PAGE>   16

    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.

    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 (the "Transfer Agent" and
"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, one or more
co-transfer agents and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent, the term "Registrar" includes any
co-registrar and the term "Transfer Agent" includes any co-transfer agent,
provided that there shall only be one register for each Series of Securities. So
long as a Series of Securities is listed on a stock exchange, the Company shall
maintain a co-transfer agent and a co-paying agent in such locations as such
stock exchange shall require.

    The Company shall enter into an appropriate agency agreement with any
Registrar, Transfer Agent, Paying Agent or co-registrar or co-transfer agent 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, Transfer Agent 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, Transfer Agent 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 a 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

                                       12
<PAGE>   17
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).

SECTION 2.7       Transfer and Exchange.

    The Securities shall be transferable only upon the surrender of a Security
to the Registrar or a Transfer Agent for registration of transfer. When a
Security is presented to the Registrar (including by a Transfer Agent) 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
Transfer Agent with a request to exchange them for an equal principal amount of
Securities of the same Series and of other authorized denominations, the
Registrar or Transfer Agent, as applicable, 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 request.

    The Depository shall, by acceptance of a Global Security, agree that
transfers of beneficial interests in such Global Security may be effected only
(a) in accordance with this Indenture and the Securities represented by such
Global Security (including any applicable restrictions on transfer set forth
herein or therein and, as to Initial Securities, including any certification
requirements set forth on the reverse of the Initial Securities intended to
ensure that such transfers comply with Rule 144A or Regulation S, as the case
may be) and (b) through a book-entry system maintained by the Depository (or its
agent) or, where a Global Security is registered in the name of a Common
Depository, otherwise in accordance with such Depository's procedures for
book-entry transfers among the Depositories as to which such Common Depository
is acting as Common Depository, and, in each case, that ownership of a
beneficial interest in such Global Security shall be required to be reflected in
a book entry system.

    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 or a Common Depository to a nominee of such Depository or Common
Depository, or by a nominee of such Depository or Common Depository to such
Depository or Common Depository or another nominee of such Depository or Common
Depository, or by such Depository or Common Depository or any such nominee to a
successor Depository or Common Depository or a nominee of such successor
Depository or Common Depository, except that book-entry interests in a Global
Security registered in the name of the Common Depository may be transferred
among the Depositories as to which such Common Depository is acting as Common
Depository in accordance with the procedures of such Depositories for such
transfers.

    If a 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
a Depository of a Global Security held in the United States shall no longer be
eligible under the next sentence of this paragraph, the Company shall appoint a
successor Depository with respect to such Securities. In the case of a Global
Security held in the United States, each Depository appointed pursuant to

                                       13
<PAGE>   18
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
instructions contained in an Officers' Certificate, Securities in definitive
registered form without coupons in any authorized denominations representing
Securities of a Series in exchange for the Global Security or Securities of such
Series (i) if 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
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, (ii) if an Event of Default with respect to the
Securities of such Series has occurred and is continuing or (iii) as provided in
the penultimate paragraph of Section 2.15.

    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 instructions contained in an Officers'
Certificate, Securities of such Series in definitive registered form without
coupons 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 pursuant to either of the two preceeding
paragraphs, 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 and shall contain such legends, if any, as are
required by Section 2.15. 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, or the Common Depository, as applicable,
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.

    Unless otherwise provided as contemplated by Section 2.1, the following
paragraph shall be applicable to Initial Securities issued and sold to QIBs in
reliance on Rule 144A or sold in offshore transactions in reliance on Regulation
S. Unless and until an Initial Security is exchanged for an Exchange Security in
connection with an effective Registered Exchange Offer pursuant to a
Registration Rights Agreement or sold pursuant to a Shelf Registration Statement
pursuant to a Registration Rights Agreement, the following additional provisions
shall apply to transfers of interests in Initial Securities:

                                       14
<PAGE>   19

    (a)  Transfers of 144A Securities to QIBs. The following provisions shall
         apply with respect to the registration of any proposed transfer of a
         144A Certificated Security or an interest in a 144A Global Security or
         a QIB:

              (i) If the Initial Security to be transferred consists of (x) 144A
         Certificated Securities, the Registrar shall register the transfer, if
         such transfer is being made by a proposed transferor who has checked
         the box provided for on the form of Initial Security stating, or has
         otherwise advised the Company, the Guarantor (if applicable) and the
         Registrar in writing, that the sale has been made in compliance with
         the provisions of Rule 144A to a transferee who has signed the
         certification provided for on the form of Initial Security stating, or
         has otherwise advised the Company, the Guarantor (if applicable) and
         the Registrar, that it is purchasing the Initial Security for its own
         account or an account with respect to which it exercises sole
         investment discretion and that it and any such account is a QIB within
         the meaning of Rule 144A, and is aware that the sale to it is being
         made in reliance on Rule 144A and acknowledges that it has received
         such information regarding the Company and the Guarantor (if
         applicable) as it has requested pursuant to Rule 144A or has determined
         not to request such information and that it is aware that the
         transferor is relying upon its foregoing representation in order to
         claim the exemption from registration provided for by Rule 144A or (y)
         an interest in a 144A Global Security, the transfer of such interest
         may be effected only through the book-entry system maintained by the
         Depositary.

              (ii) If the proposed transferee is a member of, or participant in,
         the Depositary (an "Agent Member"), and the Initial Security to be
         transferred consists of 144A Certificated Securities, upon receipt by
         the Registrar of the documents referred to in clause (i) and
         instructions given in accordance with the Depositary's and the
         Registrar's procedures, the Registrar shall reflect on its books and
         records the date and an increase in the principal amount of the 144A
         Global Securities in an amount equal to the principal amount of the
         144A Certificated Securities to be transferred and the Trustee shall
         cancel the 144A Certificated Securities so transferred.

    (b)   Transfers of Interests in Regulation S Temporary Global Securities.
          The following provisions shall apply with respect to registration of
          any proposed transfer of interests in any Regulation S Temporary
          Global Security:

              (i) The Registrar shall register the transfer of any Regulation S
         Temporary Global Security (x) if the proposed transferee is a Non-U.S.
         Person and the proposed transferor has delivered to the Registrar a
         certificate substantially in the form of Exhibit C hereto or (y) if the
         proposed transferee is a QIB and the proposed transferor has advised
         the Company, the Guarantor (if applicable) and the Registrar in writing
         that the sale has been made in compliance with the provisions of Rule
         144A to a transferee who has signed the certification provided for on
         the form of Initial Security stating, or has otherwise advised the
         Company, the Guarantor (if applicable) and the Registrar in writing,
         that it is purchasing the Initial Security for its own account or an
         account with respect to which it exercises sole investment discretion
         and that it and any such account is a QIB within the meaning of Rule
         144A, and is aware that the sale to it is being made in reliance on
         Rule 144A and acknowledges that it has received such information
         regarding the Company and the Guarantor (if applicable) as it has
         requested pursuant to Rule 144A or has determined not to request such
         information and that it is aware that the transferor is relying upon
         its foregoing representations in order to claim the exemption from
         registration provided by Rule 144A.

              (ii) If the proposed transferee is an Agent Member, upon receipt
         by the Registrar of the documents referred to in clause (i)(y) above
         and instructions given in accordance with the Depositary's and the
         Registrar's procedures, the Registrar shall reflect on its books and
         records the date and an increase in the principal amount of the 144A
         Global Securities, in an amount equal to the principal amount of the
         Regulation S Temporary Global Securities to be transferred, and the
         Trustee shall decrease the amount of the Regulation S Temporary Global
         Securities.

    (c)   Transfers of Interests in Regulation S Permanent Global Securities or
          Regulation S Certificated Securities to U.S. Persons. The following
          provisions shall apply with respect to any transfer of interests in
          any Regulation S Permanent Global Security or Regulation S
          Certificated Securities to a U.S. Person (other than transfers to
          QIBs, which are governed by sub-paragraph (a) above:

                                       15
<PAGE>   20

              (i) prior to the removal of the temporary Regulation S legend from
         any Regulation S Temporary Global Security or Regulation S Certificated
         Security in accordance with Section 2.2, the Registrar shall refuse to
         register such transfer; and

              (ii) after such removal, the Registrar shall register the transfer
         of any such Security without requiring any additional certification
         pursuant to Regulation S (provided,, however, that the Registrar shall
         continue to require appropriate certification pursuant to the
         Securities Act Legend for so long as such Legend remains on such
         Security.

    (d)   Transfers of Interests in Regulation S Permanent Global Securities or
          Regulation S Certificated Securities to Non-U.S. Persons. The
          following provisions shall apply with respect to any transfer of
          Interests in Regulation S Permanent Global Securities or Regulation S
          Certificated Securities to a Non-U.S. Person:

              (i) The Registrar shall register the transfer of any Regulation S
         Permanent Global Security or Regulation S Certificated Security to a
         Non-U.S. Person if the proposed transferor has delivered to the
         Registrar a certificate substantially in the form of Exhibit C hereto.

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 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).

                                       16
<PAGE>   21

    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
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.

SECTION 2.15      Securities Act Legend.

    Except as permitted by this Section 2.15, each Global Security evidencing
Initial Securities (and all Securities issued in exchange therefor or in
substitution thereof (other than Exchange Securities as provided below)) shall
bear a legend (the "Securities Act Legend") in substantially the following form:

                                       17
<PAGE>   22

    THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
    EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
    "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
    TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
    THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
    SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
    OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

    THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A)
    THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
    (i) INSIDE THE U.S. TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
    "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
    SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii)
    OUTSIDE THE U.S. IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
    SECURITIES ACT, (iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
    SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (iv) PURSUANT
    TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (v) TO
    THE ISSUER, IN EACH OF CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY
    APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
    HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
    OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

    By its acceptance of any Security bearing the Securities Act Legend, each
Holder of such a Security acknowledges the restrictions on transfer of such
Security set forth in this Indenture and in the Securities Act Legend and agrees
that it will transfer such Security only as provided in this Indenture. The
Registrar shall not register a transfer of any Security unless such transfer
complies with the restrictions on transfer of such Security set forth in this
Indenture. In connection with any transfer of Securities bearing the Securities
Act Legend, each Holder agrees by its acceptance of the Securities to furnish
the Registrar or the Company such certifications, Opinions of Counsel or other
information as the Company may reasonably require to confirm that such transfer
is being made pursuant to an exemption from, or a transaction not subject to,
the registration requirements of the Securities Act; provided that the Registrar
shall not be required to determine (but may rely on a determination made by the
Company with respect to) the sufficiency of any such certifications, Opinions of
Counsel or other information.

    Upon the transfer, exchange or replacement of Securities not bearing the
Securities Act Legend, the Registrar shall deliver Securities that do not bear
the Securities Act Legend. Upon the transfer, exchange or replacement of
Securities bearing the Securities Act Legend, the Registrar shall deliver only
Securities that bear the Securities Act Legend unless there is delivered (i) to
the Registrar an Opinion of Counsel reasonably satisfactory to the Company to
the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act and (ii) such other letters, notices, certifications and other written
communications required by Section 2.7, this Section 2.15 and otherwise pursuant
to this Indenture or the Securities.

    After a transfer of any Initial Securities pursuant to an effective Shelf
Registration Statement with respect to such Initial Securities, all requirements
pertaining to legends on such Initial Security will cease to apply, the
requirements requiring any such Initial Security issued to certain Holders be
issued in global form will cease to apply, and a certificated Initial Security
without legends will be available to the transferee of the Holder of such
Initial Securities upon exchange of such transferring Holder's certificated
Initial Security or directions to transfer such Holder's interest in the Global
Security, as applicable.

    Upon the consummation of a Registered Exchange Offer with respect to Initial
Securities pursuant to which Holders of such Initial Securities are offered
Exchange Securities in exchange for their Initial Securities, all requirements
pertaining to such Initial Securities that Initial Securities issued to certain
Holders be issued in global form will cease to apply and certificated Initial
Securities with the Securities Act Legend will be made available to Holders of
such Initial Securities that do not exchange their Initial Securities, and
Exchange Securities in certificated or global form without the Securities Act
Legend will be available to Holders that exchange such Initial Securities in
such Registered Exchange Offer.

                                       18
<PAGE>   23

    The Registrar shall retain copies of all letters, notices, certifications,
Opinions of Counsel, and other written communications received pursuant to
Section 2.7, this Section 2.15 or otherwise pursuant to this Indenture or the
Securities. The Company shall have the right to inspect and make copies of all
such letters, notices, certifications, Opinions of Counsel, or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.

                                   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.

SECTION 3.2       Maintenance of Office or Agency.

    The Company shall maintain in the Borough of Manhattan, the City of New
York, and, in the case of Securities listed on a stock exchange, in such other
locations as shall be required by such stock exchange, 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



                                       19
<PAGE>   24
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


                                       20
<PAGE>   25

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.

SECTION 3.8       Additional Amounts.

    If the Securities of a Series provide for the payment of additional amounts,
at least 10 days prior to the first interest payment date with respect to that
Series of Securities and at least 10 days prior to each date of payment of
principal of, premium, if any, or interest on the Securities of that Series if
there has been a change with respect to the matters set forth in the
below-mentioned Officers' Certificate, the Company shall furnish to the Trustee
and the principal Paying Agent, if other than the Trustee, an Officers'
Certificate instructing the Trustee and such Paying Agent whether such payment
of principal of or interest on the Securities of that Series shall be made to
holders of the Securities of that Series without withholding or deduction for or
on account of any tax, assessment or other governmental charge described in the
Securities of that Series. If any such withholding or deduction shall be
required, then such Officers' Certificate shall specify by country the amount,
if any, required to be withheld or deducted on such payments to such holders and
shall certify the fact that additional amounts will be payable and the amounts
so payable to each holder, and the Company shall pay to the Trustee or such
Paying Agent the additional amounts required to be paid by this Section. The
Company covenants to indemnify the Trustee and any Paying Agent for, and to hold
them harmless against, any loss, liability or expense reasonably incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by any of them in reliance on any Officers'
Certificate furnished pursuant to this Section.

    Whenever in this Indenture there is mentioned, in any context, the payment
of the principal of or any premium, interest or any other amounts on, or in
respect of, any Security of any Series, such mention shall be deemed to include
mention of the payment of additional amounts provided by the terms of such
Series established hereby or

                                       21
<PAGE>   26
pursuant hereto to the extent that, in such context, additional amounts are,
were or would be payable in respect thereof pursuant to such terms, and express
mention of the payment of additional amounts (if applicable) in any provision
hereof shall not be construed as excluding the payment of additional amounts in
those provisions hereof where such express mention is not made.

                                   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:

         (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, amalgamation 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


                                       22
<PAGE>   27
    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 which, after notice or lapse of time or both, would
    become an Event of Default with respect to such Series, 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; 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
denies or disaffirms in writing its obligations under the Guarantee with respect
to such Series.

                                       23
<PAGE>   28

       (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) 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 United States 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 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

                                       24
<PAGE>   29
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.

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

                                       25
<PAGE>   30

        (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 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.

                                       26
<PAGE>   31
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 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


                                       27
<PAGE>   32
    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
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,


                                       28
<PAGE>   33
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.

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


                                       29
<PAGE>   34
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.

    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.

    If the Trustee for a particular Series of Securities fails to comply with
Section 6.10, any Securityholder who has been a bona fide 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


                                       30
<PAGE>   35
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.

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, the Indenture dated as of April 25,
2001 between Calpine


                                       31
<PAGE>   36
Canada Energy Finance ULC and the Trustee, the securities under which are
guaranteed by the Guarantor, and the Indenture dated as of April 30, 2001
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:

        (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.



                                       32
<PAGE>   37
    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 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 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 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,
    and (B) 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 123 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


                                       33
<PAGE>   38
    "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 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)(C)(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


                                       34
<PAGE>   39
    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, 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 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


                                       35
<PAGE>   40
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.

SECTION 7.9 Terms and Conditions of Defeasance Subject to Section 2.1.

    The terms and conditions of Sections 7.3, 7.4, 7.5, 7.6, 7.7 and 7.8 are
each subject to any modifications thereof effected pursuant to paragraph (16) of
the second paragraph of Section 2.1.

                                  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;



                                       36
<PAGE>   41
        (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;

        (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.



                                       37
<PAGE>   42
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.

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.



                                       38
<PAGE>   43
                                   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.

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 and, if applicable, ISIN and Common Code 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



                                       39
<PAGE>   44
        (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.

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 II ULC
                                Suite 800, Purdy's Wharf, Tower 1
                                1959 Upper Water Street
                                P.O. Box 997
                                Halifax, Nova Scotia B3J 3N2



                                       40
<PAGE>   45
                                with a copy to:

                                Calpine Corporation
                                50 West San Fernando Street
                                San Jose, California 95113
                                Attn: General Counsel

                                if to the Trustee:

                                Wilmington Trust Company
                                Rodney Square North
                                1100 North Market Street
                                Wilmington, DE 19890-0001
                                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;



                                       41
<PAGE>   46
        (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, the State(s)
(if in the United States) or cities (if outside of the United States) in which
the offices of the Trustee or any Paying Agent are located, or, if the
Securities are listed on a stock exchange, the jurisdiction in which such stock
exchange is 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


                                       42
<PAGE>   47
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 sum due in respect of the principal of or
interest on the Securities (the "Required Currency") into a currency other than
the currency in which the Securities are denominated, 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.




                                       43
<PAGE>   48
                                   SIGNATURES

                                          CALPINE CANADA ENERGY FINANCE II ULC


                                          By
                                             ----------------------------------
                                             Name: [Ann B.  Curtis]
                                             Title: [Executive Vice President]


                                          WILMINGTON TRUST COMPANY,
                                             as Trustee


                                          By
                                             ----------------------------------
                                             Name:
                                             Title:

Dated:  _______ __, 2001





                                       44
<PAGE>   49
                                                                       EXHIBIT A

                           (FORM OF FACE OF SECURITY)

                           [Global Securities Legend]

    [TO BE INSERTED ONLY IN UNITED STATES DOLLAR-DENOMINATED GLOBAL 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.


               [TO BE INSERTED ONLY IN GLOBAL SECURITY DENOMINATED
                 IN A CURRENCY OTHER THAN UNITED STATES DOLLARS]

    THIS SECURITY IS ISSUED IN GLOBAL FORM AND REGISTERED IN THE NAME OF A
COMMON DEPOSITORY FOR EUROCLEAR BANK S.A./N.V., AS OPERATOR OF THE EUROCLEAR
SYSTEM ("EUROCLEAR") AND CLEARSTREAM BANKING, S.A., FORMERLY CEDELBANK
("CLEARSTREAM") OR A NOMINEE THEREOF. UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF EUROCLEAR OR CLEARSTREAM, 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 KREDIETBANK S.A.
LUXEMBOURGEOISE, OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF EUROCLEAR AND CLEARSTREAM (AND ANY PAYMENT IS MADE TO
KREDIETBANK S.A. LUXEMBOURGEOISE, OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF EUROCLEAR OR CLEARSTREAM), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, KREDIETBANK S.A. LUXEMBOURGEOISE, 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 THE COMMON DEPOSITORY TO A NOMINEE OF THE COMMON DEPOSITORY OR BY A
NOMINEE OF THE COMMON DEPOSITORY TO THE COMMON DEPOSITORY OR ANOTHER NOMINEE OF
THE COMMON DEPOSITORY OR BY THE COMMON DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR COMMON DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR COMMON DEPOSITORY.
<PAGE>   50
                         [Restricted Securities Legend]

                    [TO BE INSERTED ONLY ON INITIAL SECURITY]

    THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

    THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A)
THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i)
INSIDE THE U.S. TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE U.S. IN A
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (iii) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (iv) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, OR (v) TO THE ISSUER, IN EACH OF CASES (i) THROUGH
(iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.

                         [Temporary Regulation S Legend]

            [TO BE INSERTED ONLY ON TEMPORARY REGULATION S SECURITY]

    THIS SECURITY IS A TEMPORARY GLOBAL SECURITY. PRIOR TO THE EXPIRATION OF THE
40-DAY DISTRIBUTION COMPLIANCE PERIOD SET FORTH IN RULE 903(b)(2)(ii) UNDER THE
U.S. SECURITIES ACT APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE
HELD BY ANY PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON WHO
PURCHASED SUCH INTEREST IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER
THE U.S. SECURITIES ACT. BENEFICIAL INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR
DEFINITIVE SECURITIES. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S
UNDER THE SECURITIES ACT.



                                      A-2
<PAGE>   51
                      CALPINE CANADA ENERGY FINANCE II ULC

                          _____% SENIOR NOTE DUE _____

No.____                                                         [$]_____________
                                                                CUSIP:
                                                                [ISIN: ]
                                                                [Common Code:]

    Calpine Canada Energy Finance II ULC, a public limited company organized
under the laws of Nova Scotia, Canada (the "Company"), promises to pay to [Cede
& Co.]* [Kredietbank S.A. Luxembourgeoise]**, or registered assigns, the
principal amount of ____________ [Dollars or Other Currency] [or such other
principal amount as is set forth in the Schedule of Increases and Decreases of
Global Security annexed hereto]***.

                     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 II 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 only in United States dollar-denominated Global Security.
**     Insert only in Global Security denominated in a currency other than
       United States dollars.
***    Insert only in Global Securities.


                                      A-3
<PAGE>   52
                          (Form of Reverse of Security)

                      CALPINE CANADA ENERGY FINANCE II ULC
                           ___% SENIOR NOTE DUE _____

    (1) Interest. (a) Calpine Canada Energy Finance II 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.

    [(b) The Holder of this Security is entitled to the benefits of a
Registration Rights Agreement, dated as of _________, __, _____, between the
Company and the Guarantor (if applicable) for the benefit of the Holders of
Securities specified therein (the "Registration Agreement"). Capitalized terms
used in this paragraph 1(a), but not defined herein have the meanings assigned
to them in the Registration Agreement. In the event that (i) neither the Offer
Registration Statement nor the Shelf Registration Statement has been filed with
the Commission on or prior to the [ ] day after the Issue Date, (ii) the
Commission Offer Registration Statement has not been declared effective by the
Commission on or prior to the [ ] day after the Issue Date, (iii) neither the
Exchange Offer has been consummated nor the Shelf Registration Statement has
been declared effective by the Commission on or prior Statement has been
declared effective by the Commission on or prior to the [ ] day after the Issue
Date, or (iv) after either the Offer Registration Statement or the Shelf
Registration Statement has been declared effective, such Registration Statement
thereafter ceases to be effective or usable (subject to certain exceptions
contained in the Registration Agreement) in connection with resales of the
Securities at any time that the Company and the Guarantor (if applicable) is
obligated to maintain effectiveness thereof pursuant to the Registration
Agreement (each such event referred to in clauses (i) through (iv) above being
referred to herein as a "Registration Default"), interest (the "Special
Interest") shall accrue (in addition to stated interest on the Securities) from
and including the date on which the first such Registration Default shall occur
to but excluding the date on which all Registration Defaults have been cured, at
a rate per annum (or a pro rata portion thereof for periods shorter than one
year) equal to ____% of the principal amount of the Securities. The Special
Interest will be payable in cash semiannually in arrears each _____ __ an _____
__ in the same manner as ordinary interest.

    Whenever in this Security there is mentioned, in any context, the payment of
principal, premium, if any, or interest or any other amount payable under or
with respect to any Security, such mention shall be deemed to include mention of
the payment of Special Interest to the extent that, in such context, Special
Interest is, was or would be payable in respect thereof.] [Modify to reflect
definitive Registration Agreement].

    (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. [Set forth any obligation to pay additional amounts in connection with
any tax gross up.]

    (3) Paying Agent, Registrar, Transfer. Initially, Wilmington Trust Company,
a Delaware banking corporation (the "Trustee"), will act as Paying Agent,
Transfer Agent and Registrar. [The initial Paying Agent and Transfer Agent in
_______________ is _____________________.](1) The Company may change any Paying
Agent, Transfer Agent or, Registrar or co-registrar without notice. The Company
may act as Paying Agent, Transfer Agent or Registrar. [Set forth in Initial
Security procedures for insuring compliance with the Securities Act in
connection



--------

(1) Include only in Global Security denominated in a currency other than United
    States dollars.

                                      A-4
<PAGE>   53
with transfers and exchanges, including procedures for transfers of beneficial
interests between Rule 144 Global Securities and Regulation S Global
Securities.]

    (4) Indenture. The Company issued the Securities of this Series under an
Indenture dated as of _______ __, 2001 (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.] [Must be modified or deleted as necessary pursuant to terms
of redemption, if any, of the Securities.]

    (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 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. [Must be modified or deleted as necessary pursuant to terms of
defeasance, if any, of the Securities.]



                                      A-5
<PAGE>   54
    (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.

    (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).

[(16) Holders' Compliance with Registration Rights Agreement. Each Holder of a
Security, by acceptance hereof, acknowledges and agrees to the provisions of the
Registration Rights Agreement, including, without limitation, the obligations of
the Holders with respect to a registration of their Securities and the
indemnification of the Company to the extent provided therein.] [Insert only in
Initial Security].


    Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused a CUSIP number, and,
if applicable, ISIN and Common Code 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.



                                      A-6
<PAGE>   55
    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 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.

        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-7
<PAGE>   56
          [TO BE ATTACHED TO SECURITIES OTHER THAN INITIAL SECURITIES]

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

    I or we assign and transfer this Security to

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
              (Print or type assignee's name, address and zip code)

________________________________________________________________________________
                  (Insert assignee's soc. sec or tax I.D. no.)

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-8
<PAGE>   57
                     [TO BE ATTACHED TO INITIAL SECURITIES]

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

    I or we assign and transfer this Security to


________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
              (Print or type assignee's name, address and zip code)

________________________________________________________________________________
                  (Insert assignee's soc. sec or tax I.D. no.)

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)

In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with their terms:

CHECK ONE BOX BELOW:

    (1)  [ ]  to the Company; or

    (2)  [ ]  pursuant to an effective registration statement under the
              Securities Act of 1933; or

    (3)  [ ]  inside the United States to a "qualified institutional buyer" (as
              defined in Rule 144A under the Securities Act of 1933) that
              purchases for its own account or for the account of another
              "qualified institutional buyer" to whom notice is given that such
              transfer is being made in reliance on Rule 144A, in each case
              pursuant to and in compliance with Rule 144A under the Securities
              Act of 1933; or

    (4)  [ ]  outside the United States in an offshore transaction within the
              meaning of Regulation S under the Securities Act of 1933 in
              compliance with Rule 904 under the Securities Act of 1933; or

    (5)  [ ]  pursuant to another available exemption from registration provided
              by Rule 144 under the Securities Act of 1933.

Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (4) or (5) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.


                                            _________________________________
                                            Signature
<PAGE>   58
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.

              TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED:

    The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.


Dated: ____________________________     Signed: ________________________________
                                                NOTICE: To be executed by an
                                                        executive officer


                                      A-2
<PAGE>   59
                      [TO BE ATTACHED TO GLOBAL SECURITIES]

              SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

  The following increases or decreases in this Global Security have been made:

<TABLE>
<CAPTION>
            Amount of decrease    Amount of increase    Principal amount of        Signature of
            in Principal          in Principal          this Global Security       authorized officer
Date of     Amount of this        Amount of this        following such decrease    of Trustee or
Exchange    Global Security       Global Security       or increase                Securities Custodian
--------    ------------------    ------------------    -----------------------    --------------------
<S>         <C>                   <C>                   <C>                        <C>


</TABLE>



                                      A-3
<PAGE>   60
                                                                       EXHIBIT B

                   Form of Certificate of Beneficial Ownership

                   [Complete Form I or Form II as Applicable]

                                    [Form I]

Euroclear Bank SA./N.V.,
   as Operator of the Euroclear System
Clearstream Banking, S.A.


Re:     Calpine Canada Energy Finance II ULC (the "Company")
        [ ]% Initial Securities] (the "Securities") issued under the Indenture
        (the "Indenture") dated as of _____ __, 2001, between the Company and
        Wilmington Trust Company


Dear Sirs:

        We are the beneficial owners of ________ principal amount of Securities
issued under the Indenture and represented by Regulation S Temporary Global
Securities (as defined in the Indenture).

        We hereby certify as follows:

        [CHECK A OR B AS APPLICABLE.]

        [ ]     A.  We are a non-U.S. person (within the meaning of Regulation S
                    under the Securities Act of 1933, as amended).

        [ ]     B.  We are a U.S. person (within the meaning of Regulation S
                    under the Securities Act of 1933, as amended) who purchased
                    the Securities in a transaction that did not require
                    registration under the Securities Act of 1933, as amended.

        Accordingly, you are hereby requested to exchange our beneficial
interest in the Regulation S Temporary Global Securities for an equivalent
beneficial interest in Regulation S Permanent Global Securities.

        You and the Company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.


                                     Very truly yours,

                                     [NAME OF BENEFICIAL OWNER]

                                     By:__________________________

                                     Name:
                                     Title:
                                     Address:

Date:________________



                                   [Form II]
                                      B-1
<PAGE>   61
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration

Re:     Calpine Canada Energy Finance II ULC (the "Company")
        [ ]% [Initial Securities] (the "Securities") issued under the Indenture
        (the "Indenture") dated as of _______ __, 2001, between the Company and
        Wilmington Trust Company


        This is to certify that based solely on certifications we have received
in writing, by tested telex or by electronic transmission from member
organizations ("Member Organizations") appearing in our records as persons being
entitled to a portion of the principal amount of Securities represented by
Regulation S Temporary Global Notes issued under the above-referenced Indenture,
that as of the date hereof, _________ principal amount of Securities represented
by the Regulation S Temporary Global Securities being submitted herewith for
exchange is beneficially owned by persons who are either (i) non-U.S. persons
(within the meaning of Regulation S under the Securities Act of 1933, as
amended) or (ii) U.S. persons who purchased the Securities in a transaction that
did not require registration under the Securities Act of 1933, as amended.

        We further certify that (i) we are not submitting herewith for exchange
any portion of such Regulation S Temporary Global Securities excepted in such
Member Organization certifications and (ii) as of the date hereof we have not
received any notification from any Member Organization to the effect that the
statements made by such Member Organization with respect to any portion of such
Regulation S Temporary Global Securities submitted herewith for exchange are no
longer true and cannot be relied upon as of the date hereof. Accordingly, you
are hereby requested to exchange such beneficial interest in the Regulation S
Temporary Global Securities for an equivalent beneficial interest in Regulation
S Permanent Global Securities.

        Capitalized terms used and not defined herein have the meanings given
such terms in the Indenture.

        You and the Company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.

                                    Yours faithfully,


[EUROCLEAR BANK S.A./N.V., as operator of the Euroclear System]

OR

[CLEARSTREAM BANKING, S.A.]


By: __________________________
    Name:
    Title:


Date: ________________________



                                      B-2
<PAGE>   62
                                                                       EXHIBIT C

                       Form of Certificate to be Delivered
                          in Connection with Transfers
                            Pursuant to Regulation S

                                                        _________, ____

Euroclear Bank S.A./N.V.,
   as operator of the Euroclear System
Clearstream Banking, S.A.


Re:     Calpine Canada Energy Finance II ULC (the "Company")
        [ ]% [Initial Securities] (the "Securities") issued under the Indenture
        (the "Indenture") dated as of ______ __, 2001, between the Company and
        Wilmington Trust Company


Dear Sirs:

In connection with our proposed sale of ________ aggregate principal amount of
the Securities, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the Securities Act of 1933, as amended, and,
accordingly, we represent that:

        (1) the offer of the Securities was not made to a person in the United
States;

        (2) at the time the buy order was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States;

        (3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and

        (4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act of 1933.

        You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S under the Securities Act of 1933.


                                    Very truly yours,

                                    [Name of Transferor]


                                    By: _________________________
                                          Authorized Signatory
<PAGE>   63
                                                                       EXHIBIT D

                           Form of Guarantee Agreement









                                      D-1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.6
<SEQUENCE>7
<FILENAME>f74776orex4-6.txt
<DESCRIPTION>EXHIBIT 4.6
<TEXT>
<PAGE>   1
                                                                    Exhibit 4.6



                               GUARANTEE AGREEMENT

                                     made by

                               CALPINE CORPORATION

                    as Guarantor of Debt Securities Issued by
                      CALPINE CANADA ENERGY FINANCE II 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.........................................................     3
SECTION 2.01.        Unconditional Guarantee................................................................................     3
SECTION 2.02.        Execution of Guarantee.................................................................................     3
SECTION 2.03.        Subordination of Subrogation and Other Rights..........................................................     4
SECTION 2.04.        Termination of Guarantee with Respect to Series........................................................     4

                                                       ARTICLE THREE
                                    CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE....................................     4
SECTION 3.01.        Guarantor May Consolidate, Etc., Only on Certain Terms.................................................     4
SECTION 3.02.        Successor Substituted..................................................................................     4
SECTION 3.03.        Assignment to the Guarantor of the Company's Obligations...............................................     4

                                                        ARTICLE FOUR
                                                         AMENDMENTS.........................................................     5
SECTION 4.01.        Amendments Without Consent of Holders..................................................................     5
SECTION 4.02.        Amendments With Consent of Holders.....................................................................     5
SECTION 4.03.        Execution of Amendments................................................................................     5
SECTION 4.04.        Effect of Amendments...................................................................................     6
SECTION 4.05.        Conformity With Trust Indenture Act....................................................................     6
SECTION 4.06.        Reference in Guarantees to Amendments..................................................................     6

                                                        ARTICLE FIVE
                                                          COVENANTS.........................................................     6
SECTION 5.01.        Money for Security Payments To Be Held in Trust........................................................     6
SECTION 5.02.        Limitation on Sale/Leaseback Transactions..............................................................     6
SECTION 5.03.        Limitation on Liens....................................................................................     6
SECTION 5.04.        Waiver of Certain Covenants............................................................................     7
SECTION 5.05.        Reports by Guarantor...................................................................................     7

                                                         ARTICLE SIX
                                                        MISCELLANEOUS.......................................................     8
SECTION 6.01.        Trust Indenture Act....................................................................................     8
SECTION 6.02.        Effect of Headings and Table of Contents...............................................................     8
SECTION 6.03.        Successors and Assigns.................................................................................     8
SECTION 6.04.        Separability Clause....................................................................................     8
SECTION 6.05.        Benefits of Agreement..................................................................................     8
SECTION 6.06.        Governing Law..........................................................................................     8
SECTION 6.07.        Notices, Etc., to the Guarantor........................................................................     8
</TABLE>
<PAGE>   3
     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 II 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 Securities issued under the Indenture
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

     (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).
<PAGE>   4
     "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 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.

                                       2
<PAGE>   5
     "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 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 of any Series or the Trustee 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 Company or the Guarantor to the Trustee
or such Holder, the

                                       3
<PAGE>   6
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:

         (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

                                       4
<PAGE>   7
     such consolidation, merger, sale, assignment, conveyance, transfer,
     disposition or lease and such supplemental agreement 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.

                                  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:

                                       5
<PAGE>   8
     (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.

     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.

                                       6
<PAGE>   9
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,
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,

                                       7
<PAGE>   10
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 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.

                                       8
<PAGE>   11
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.

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.

                                       9
<PAGE>   12
     IN WITNESS WHEREOF, the Guarantor has duly executed this Agreement as of
the date first above written.

                                CALPINE CORPORATION, as Guarantor


                                By:
                                    -------------------------------------------
                                     Name:  [Ann B. Curtis]
                                     Title:  [Executive Vice President, Chief
                                              Financial Officer and Secretary]


Agreed and Accepted:

WILMINGTON TRUST COMPANY,
  as Trustee under the Indenture


By:
      ----------------------------------------------
      Name:
      Title:

                                       10
<PAGE>   13
                                                                       EXHIBIT A

                                FORM OF 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 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.

     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:

                                       11


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>8
<FILENAME>f74776orex12-1.txt
<DESCRIPTION>EXHIBIT 12.1
<TEXT>
<PAGE>   1
                                                                    EXHIBIT 12.1

                          STATEMENT OF COMPUTATION OF
                       RATIO OF EARNINGS TO FIXED CHARGES

<Table>
<Caption>
                                                                                                             THREE MONTHS
                                                              YEAR ENDED DECEMBER 31,                       ENDED MARCH 31,
                                                   ------------------------------------------------------   ---------------
                                                     1996       1997       1998       1999        2000           2001
                                                     ----       ----       ----       ----        ----           ----
<S>                                                <C>        <C>         <C>        <C>        <C>         <C>
(in thousands)
COMPUTATION OF EARNINGS:
------------------------
Pretax income before adjustment for
  minority interests in consolidated
  subsidiaries and income or loss
  from equity investees........................    $21,219    $ 37,340    $ 48,133   $121,623    $521,683       $156,004
Fixed charges..................................     48,672      72,718     100,015    153,268     331,023        144,239
Amortization of capitalized interest...........         --          --         136        331         447             16
Distributed income of equity investees.........      1,274      21,042      27,717     43,318      29,979          1,213
Interest capitalized...........................         --      (6,200)     (7,000)   (47,300)   (206,973)      (104,022)
Minority interest in pretax income
  of subsidiaries that have not
  incurred fixed charges.......................         --          --          --        265        (895)            --
                                                   -------    --------    --------   --------   ---------       --------
Total earnings.................................    $71,165    $124,900    $169,001   $271,505   $ 675,264       $197,450
                                                   =======    ========    ========   ========   =========       ========

COMPUTATION OF FIXED CHARGES:
-----------------------------
Interest expensed and capitalized..............    $45,294    $ 67,666    $ 93,726   $138,462   $ 263,673        119,727
Estimate of interest within
  rental expense...............................      3,378       5,052       6,289     12,241      23,140          9,337
Distributions on HIGH TIDES....................         --          --          --      2,565      44,210         15,175
                                                   -------    --------    --------   --------   ---------       --------
Total fixed charges............................    $48,672    $ 72,718    $100,015   $153,268   $ 331,023       $144,239
                                                   =======    ========    ========   ========   =========       ========
Ratio of earnings to fixed charges.............      1.46x       1.72x       1.69x      1.77x       2.04x          1.37x
</Table>

This information does not reflect any impact on Calpine's financial position or
results of operations that will result from our business combination under the
pooling of interest method of accounting consummated April 19, 2001 with Encal
Energy Ltd.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>9
<FILENAME>f74776orex23-1.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 on Form S-3 (No. 333-_____) 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 on Form S-3.


/s/ Arthur Andersen LLP



San Jose, California
August 13, 2001

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.3
<SEQUENCE>10
<FILENAME>f74776orex25-3.txt
<DESCRIPTION>EXHIBIT 25.3
<TEXT>
<PAGE>   1

                                                                    EXHIBIT 25.3

                                                                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 CORPORATION
               (Exact name of obligor as specified in its charter)

          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)

                Guarantees of Calpine Corporation with respect to
             Debt Securities of Calpine Canada Energy Finance II 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 10th day
of August, 2001.


                                            WILMINGTON TRUST COMPANY
[SEAL]

Attest: /s/ Patricia A. Evans               By: /s/ W. Chris Sponenberg
       --------------------------              ---------------------------------
       Assistant Secretary                      Name: W. Chris Sponenberg
                                                Title: Vice President

<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

<PAGE>   5

                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, 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

<PAGE>   6

                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 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

<PAGE>   7

                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 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.
<PAGE>   8

        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 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;

<PAGE>   9

                (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.

                (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

<PAGE>   10

                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 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


<PAGE>   11

        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 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

<PAGE>   12

        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 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.

<PAGE>   13

        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 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

<PAGE>   14

                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 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:

<PAGE>   15

                (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.

        (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

<PAGE>   16

                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.

                (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."

<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.

<PAGE>   19

        Section 3. The class of Directors so elected shall hold office for three
years or until 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.

<PAGE>   20

                                   ARTICLE III
                                   COMMITTEES

        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


<PAGE>   21

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.

        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.

<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.

<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


<PAGE>   24

charge of the department or division to whom they are assigned.

        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.

<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.

<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

<PAGE>   27

        Section 1. These By-Laws may be altered, amended or repealed, in whole
or in part, 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.

<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: August 10, 2001                      By: /s/ W. Chris Sponenberg
                                               ---------------------------------
                                               Name: W. Chris Sponenberg
                                               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.



R E P O R T   O F   C O N D I T I O N

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 June 30, 2001.



<TABLE>
<CAPTION>
ASSETS
                                                                                        Thousands of dollars
<S>                                                                                     <C>
Cash and balances due from depository institutions:
         Noninterest-bearing balances and currency and coins.........................................258,287
         Interest-bearing balances.......................................................................  0
Held-to-maturity securities.......................................................................... 16,981
Available-for-sale securities......................................................................1,183,358
Federal funds sold and securities purchased under agreements to resell...............................538,676
Loans and lease financing receivables:
         Loans and leases, net of unearned income .................................................4,855,158
         LESS:  Allowance for loan and lease losses ..................................................71,965
         LESS:  Allocated transfer risk reserve ...........................................................0
         Loans and leases, net of unearned income, allowance, and reserve..........................4,783,193
Assets held in trading accounts............................................................................0
Premises and fixed assets (including capitalized leases).............................................129,816
Other real estate owned...............................................................................   435
Investments in unconsolidated subsidiaries and associated companies....................................1,746
Customers' liability to this bank on acceptances outstanding...............................................0
Intangible assets:
         a.  Goodwill................................................................................... 233
         b.  Other intangible assets.................................................................. 4,307
Other assets........................................................................................ 137,383
Total assets.......................................................................................7,054,415
</TABLE>

                                                          CONTINUED ON NEXT PAGE

<PAGE>   30

<TABLE>
<S>                                                                                               <C>
LIABILITIES

Deposits:
In domestic offices................................................................................5,029,222
         Noninterest-bearing ......................................................................1,123,260
         Interest-bearing .........................................................................3,905,962
Federal funds purchased and Securities sold under agreements to repurchase.......................... 793,638
Trading liabilities (from Schedule RC-D)...................................................................0
Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases):......606,082
Bank's liability on acceptances executed and outstanding...................................................0
Subordinated notes and debentures..........................................................................0
Other liabilities (from Schedule RC-G).............................................................. 105,784
Total liabilities..................................................................................6,534,726


EQUITY CAPITAL

Perpetual preferred stock and related surplus..............................................................0
Common Stock.............................................................................................500
Surplus (exclude all surplus related to preferred stock)..............................................62,118
a.  Retained earnings................................................................................449,102
b.  Accumulated other comprehensive income............................................................ 7,969
Total equity capital.................................................................................519,689
Total liabilities, limited-life preferred stock, and equity capital................................7,054,415
</TABLE>
<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)


        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 II ULC
               (Exact name of obligor as specified in its charter)

      Nova Scotia                                     Not Applicable
(State of incorporation)                    (I.R.S. employer identification no.)

   Suite 800, Purdy's Wharf, Tower 1
         1959 Upper Water Street
             P.O. Box 997
         Halifax, Nova Scotia                                 B3J 3N2
(Address of principal executive offices)                     (Zip Code)


             Debt Securities of Calpine Canada Energy Finance II 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 10th day
of August, 2001.


                                       WILMINGTON TRUST COMPANY

[SEAL]

Attest: /s/ Patricia A. Evans          By: /s/ W. Chris Sponenberg
       ---------------------------        -------------------------------------
       Assistant Secretary             Name: W. Chris Sponenberg
                                       Title: Vice President

<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


<PAGE>   35

                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, 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

<PAGE>   36

                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 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

<PAGE>   37


                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 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.


<PAGE>   38

        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 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;

<PAGE>   39

                (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.

                (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



<PAGE>   40

                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 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


<PAGE>   41

        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 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


<PAGE>   42

        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 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.


<PAGE>   43

        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 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


<PAGE>   44

                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 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:

<PAGE>   45

                (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.

        (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

<PAGE>   46

                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.

                (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."





<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.



<PAGE>   49

        Section 3. The class of Directors so elected shall hold office for three
years or until 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.


<PAGE>   50

                                   ARTICLE III
                                   COMMITTEES

        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

<PAGE>   51

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.

        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.


<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.


<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

<PAGE>   54

charge of the department or division to whom they are assigned.

        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.





<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.

<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


<PAGE>   57



        Section 1. These By-Laws may be altered, amended or repealed, in whole
or in part, 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.





<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: August 10, 2001                 By: /s/ W. Chris Sponenberg
                                          --------------------------------------
                                       Name: W. Chris Sponenberg
                                       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.



R E P O R T  O F  C O N D I T I O N

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 June 30, 2001.



ASSETS
<TABLE>
<CAPTION>
                                                                               THOUSANDS OF DOLLARS
                                                                                   ---------
<S>                                                                            <C>
Cash and balances due from depository institutions:
         Noninterest-bearing balances and currency and coins ................        258,287
         Interest-bearing balances ..........................................              0
Held-to-maturity securities .................................................         16,981
Available-for-sale securities ...............................................      1,183,358
Federal funds sold and securities purchased under agreements to resell ......        538,676
Loans and lease financing receivables:
         Loans and leases, net of unearned income ...........................      4,855,158
         LESS:  Allowance for loan and lease losses .........................         71,965
         LESS:  Allocated transfer risk reserve .............................              0
         Loans and leases, net of unearned income, allowance, and reserve ...      4,783,193
Assets held in trading accounts .............................................              0
Premises and fixed assets (including capitalized leases) ....................        129,816
Other real estate owned .....................................................            435
Investments in unconsolidated subsidiaries and associated companies .........          1,746
Customers' liability to this bank on acceptances outstanding ................              0
Intangible assets:
         a.  Goodwill .......................................................            233
         b.  Other intangible assets ........................................          4,307
Other assets ................................................................        137,383
Total assets ................................................................      7,054,415
</TABLE>



                                                          CONTINUED ON NEXT PAGE




<PAGE>   60

LIABILITIES

<TABLE>
<S>                                                                                                 <C>
Deposits:
In domestic offices ..........................................................................      5,029,222
         Noninterest-bearing .................................................................      1,123,260
         Interest-bearing ....................................................................      3,905,962
Federal funds purchased and Securities sold under agreements to repurchase ...................        793,638
Trading liabilities (from Schedule RC-D) .....................................................              0
Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases:        606,082
Bank's liability on acceptances executed and outstanding .....................................              0
Subordinated notes and debentures ............................................................              0
Other liabilities (from Schedule RC-G) .......................................................        105,784
Total liabilities ............................................................................      6,534,726


EQUITY CAPITAL

Perpetual preferred stock and related surplus ................................................              0
Common Stock .................................................................................            500
Surplus (exclude all surplus related to preferred stock) .....................................         62,118
a.  Retained earnings ........................................................................        449,102
b.  Accumulated other comprehensive income ...................................................          7,969
Total equity capital .........................................................................        519,689
Total liabilities, limited-life preferred stock, and equity capital ..........................      7,054,415
</TABLE>



</TEXT>
</DOCUMENT>
</SUBMISSION>
