<PAGE>

                          FIRST SUPPLEMENTAL INDENTURE

                          Dated as of October 18, 2001

                                     Between

                      CALPINE CANADA ENERGY FINANCE II ULC,

                                    AS ISSUER

                                       and

                            WILMINGTON TRUST COMPANY,

                                   AS TRUSTEE

                           Supplementing the Indenture
                          Dated as of October 18, 2001



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                This FIRST SUPPLEMENTAL INDENTURE, dated as of October 18, 2001
(the "First Supplemental Indenture"), is between Calpine Canada Energy Finance
II ULC, an unlimited liability company organized under the laws of Nova Scotia,
Canada (the "Company"), and Wilmington Trust Company, a Delaware banking
corporation, as trustee ("the Trustee").

                WHEREAS, the Company executed and delivered the Indenture dated
as of October 18, 2001 (the "Indenture") to the Trustee to provide for the
issuance by the Company from time to time of debt securities to be issued in one
or more series as provided in the Indenture;

                WHEREAS, simultaneously with the execution of this First
Supplemental Indenture, the Company is issuing Pound Sterling200,000,000 8-7/8%
Senior Notes Due October 15, 2011 (the "Sterling 8-7/8% Notes") and E175,000,000
8-3/8% Senior Notes Due October 15, 2008(the "Euro 8-3/8% Notes") pursuant to
the Indenture;

                WHEREAS, the Company and the Trustee desire to amend and
supplement the Indenture to add to the covenants of the Company solely for the
benefit of the Holders (as defined below) of Sterling 8-7/8% Notes and the
Holders of Euro 8-3/8% Notes and to make related changes to the Indenture;

                WHEREAS, Section 8.1 of the Indenture provides that the
Indenture may be amended or supplemented by the Company and the Trustee without
prior notice to or the consent of any Securityholder (as defined below) for such
purpose provided certain conditions are met;

                WHEREAS, all things necessary to make this First Supplemental
Indenture a valid agreement of the Company and the Trustee, in accordance with
its terms, and a valid amendment of, and supplement to, the Indenture have been
done.

                NOW THEREFORE, for and in consideration of the premises and
mutual covenants herein contained, the Company and the Trustee agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

                Section 1.1 Definition of Terms.

                Unless the context otherwise requires:

               (a) capitalized terms used herein that are not otherwise defined
herein shall have the meaning assigned to such terms in the Indenture;

               (b) the singular includes the plural and vice versa; and

               (c) headings are for convenience of reference only and do not
affect interpretation.



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                                   ARTICLE II
                           AMENDMENTS TO THE INDENTURE

                Section 2.1 Amendments.

                (a) Section 1.1 of the Indenture is amended to insert the
following definition between the definitions of " Directors' Certificate" and
"Euroclear":

                "Euro 8-3/8% Notes" means the Series of Securities denominated
                in euros and designated as the Company's 8-3/8% Senior Notes Due
                October 15, 2008.

                (b) Section 1.1 of the Indenture is amended to insert the
following definition between the definitions of "Stated Maturity" and
"Subsidiary":

                "Sterling 8-7/8% Notes" means the Series of Securities
                denominated in pounds sterling and designated as the Company's
                8-7/8% Senior Notes Due October 15, 2011.

                (c) Section 1.2 of the Indenture is amended to insert the
following reference between the references to "Successor Corporation" and
"Transfer Agent":

                "TARGET Day" ................................. 10.7

                (d) Article III of the Indenture is amended to insert the
following as new Section 3.9:

                SECTION 3.9 Performance by the Company of Certain Covenants
                Under Term Debenture.

                Solely for the benefit of the Holders of Sterling 8-7/8% Notes
                and the Holders of Euro 8-3/8% Notes, the Company shall comply
                in all respects with its obligations under Section 7.1 of the
                Term Debenture, dated August 23, 2001, between the Company and
                Calpine Canada Resources Ltd.

                (e) Section 5.1 of the Indenture is amended (i) to delete the
word "or" as the final word of sub-paragraph (f); (ii) to replace the period at
the end of sub-paragraph (g) with "; or"; and (iii) to insert the following as
new sub-paragraph (h):

                (h) solely with respect to the Sterling 8-7/8% Notes and the
                Euro 8-3/8% Notes, default in performance by the Company of the
                covenant set forth in Section 3.9 of this Indenture or default
                in performance by the Guarantor of the covenant set forth in
                Section 5.06 of the Guarantee Agreement, as the case may be, 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 Sterling 8-7/8% Notes
                or the Euro 8-3/8% Notes, as applicable, then outstanding
                hereunder.



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                (f) Section 10.2 of the Indenture is amended to add the
following to the first sentence of the Section, after "mailed by
first-class-mail(" and before "certified, return receipt requested)":

                and with respect solely to Securities other than the Sterling
                8-74/8% Notes and the Euro 8-3/8% Notes,

                (g) Section 10.7 of the Indenture is amended to add the
following to the end of the first sentence of the Section:

                or, with respect solely to the Euro 8-3/8% Notes, any day that
                is not a TARGET Day

                (h) Section 10.7 of the Indenture is further amended to add the
following as the final sentence of such Section:

                A "TARGET Day" is any day on which the Trans-European Automated
                Real-time Gross Settlement Express Transfer payment system is
                open for the settlement of payments in euros.

                                   ARTICLE III
                                  MISCELLANEOUS

                Section 3.1 Notification to Holders.

                The Company shall notify the Holders in accordance with Section
8.1 of the Indenture of the execution of this First Supplemental Indenture.

                Section 3.2 Ratification of Indenture.

                The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.

                Section 3.3 Governing Law.

                The laws of the State of New York govern this First Supplemental
Indenture, without regard to the conflicts of laws rules thereof.

                Section 3.4 Separability Clause.

                In case any provision in this First Supplemental Indenture 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 3.5 Duplicate Originals.

                The parties may sign any number of copies of this First
Supplemental Indenture. One signed copy is enough to prove this First
Supplemental Indenture.



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                Section 3.6 Effectiveness.

                This First Supplemental Indenture shall be effective and binding
when executed by the Company and the Trustee.

                Section 3.7 Trustee Not Responsible for Recitals.

               The recitals herein contained are made by the Company and not by
the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or sufficiency
of this First Supplemental Indenture.

                Section 3.8 Performance by Trustee.

                The Trustee, for itself and its successors accepts the trust of
the Indenture as amended by this First Supplemental Indenture and agrees to
perform the same, but only upon the terms and conditions set forth in the
Indenture, including the terms and provisions defining and limiting the
liability and responsibility of the Trustee.

                                      * * *



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                IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.

                                       CALPINE CANADA ENERGY
                                       FINANCE II ULC

                                       By:  /s/ ERIC PRYOR
                                           -------------------------------------
                                           Eric Pryor
                                           Vice President

                                       WILMINGTON TRUST COMPANY,
                                       as Trustee

                                       By: /s/ BRUCE L. BISSON
                                           -------------------------------------
                                       Name:
                                       Title: Vice President



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