<SUBMISSION>
<ACCESSION-NUMBER>0000891618-02-001675
<TYPE>S-3
<PUBLIC-DOCUMENT-COUNT>6
<REFERENCES-429>gov.sec.edgar.dataobjects.object.PDSubFN429Data@f4de12e6
<FILING-DATE>20020405
<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>333-85654
<FILM-NUMBER>02603285
</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>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>f80342s-3.txt
<DESCRIPTION>FORM S-3
<TEXT>
<PAGE>

     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 5, 2002

                                                     REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                            ------------------------

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

                              CALPINE CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<Table>
<S>                                                           <C>
                          DELAWARE                                                     77-0212977
                (STATE OR OTHER JURISDICTION                                        (I.R.S. EMPLOYER
             OF INCORPORATION OR ORGANIZATION)                                   IDENTIFICATION NUMBER)
</Table>

                          50 WEST SAN FERNANDO STREET
                           SAN JOSE, CALIFORNIA 95113
                                 (408) 995-5115
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

                                PETER CARTWRIGHT
      CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, CALPINE CORPORATION
                          50 WEST SAN FERNANDO STREET
                           SAN JOSE, CALIFORNIA 95113
                                 (408) 995-5115
 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                             OF AGENT FOR SERVICE)

                                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.  [ ]
                        CALCULATION OF REGISTRATION FEE

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
                                                                       PROPOSED MAXIMUM     PROPOSED MAXIMUM
                                                       AMOUNT TO BE     OFFERING PRICE         AGGREGATE            AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED    REGISTERED(1)       PER UNIT(1)      OFFERING PRICE(1)    REGISTRATION FEE
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>               <C>                <C>                   <C>
4% Convertible Senior Notes Due December 26, 2006
  of Calpine Corporation...........................   $1,200,000,000         100%            $1,200,000,000         $110,400
---------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.001 per share, of Calpine
  Corporation(2)...................................        (3)                --                   --                  (4)
---------------------------------------------------------------------------------------------------------------------------------
         Total.....................................         --                --           $1,200,000,000(5)       $110,400(6)
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
</Table>

(1) Estimated solely for the purpose of determining the registration fee in
    accordance with Rule 457(o) under the Securities Act and exclusive of
    accrued interest and dividends, if any.
(2) Includes preferred stock purchase rights (the "Rights") associated with
    shares of common stock. Until the occurrence of prescribed events, none of
    which have occurred, the Rights are not exercisable, are evidenced by the
    certificates representing the common stock and will be transferred along
    with and only with the common stock. No separate consideration is payable
    for the Rights.
(3) Such indeterminate number of shares of common stock that may be issued from
    time to time upon conversion of the 4% Convertible Senior Notes registered
    hereby. Also includes, pursuant to Rule 416, such number of shares as may be
    issued as a result of stock splits, stock dividends and similar
    transactions.
(4) Pursuant to Rule 457(i) under the Securities Act, no registration fee is
    required to be paid in connection with the common stock registered hereby.
(5) Includes $655,103,529 of unsold securities of Calpine Corporation previously
    registered on Registration Statement No. 333-56712, initially filed on March
    8, 2001.
(6) $163,775 was previously paid as a registration fee in respect of the
    $655,103,529 of unsold securities of Calpine Corporation being carried
    forward from Registration Statement No. 333-56712 pursuant to Rule 429 under
    the Securities Act. Pursuant to Rule 457(p) under the Securities Act, such
    previously paid registration fee is being offset against the total
    registration fee due hereunder. Accordingly, no registration fee is due in
    connection with the filing of this registration statement. However, as
    required by the SEC, we are paying one dollar in connection with this
    filing.

    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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 OF 1933 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(a) UNDER THE SECURITIES ACT, THE PROSPECTUS CONTAINED
IN THIS REGISTRATION STATEMENT RELATES TO SECURITIES REGISTERED UNDER THIS
REGISTRATION STATEMENT AND THE SECURITIES REGISTERED AND REMAINING UNSOLD UNDER
REGISTRATION STATEMENT NO. 333-56712 AND CONSTITUTES A POST-EFFECTIVE AMENDMENT
TO REGISTRATION STATEMENT NO. 333-56712 AND SUCH POST-EFFECTIVE AMENDMENT SHALL
HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE EFFECTIVENESS OF THIS
REGISTRATION STATEMENT AND IN ACCORDANCE WITH SECTION 8(c) OF THE SECURITIES
ACT. IF SECURITIES PREVIOUSLY REGISTERED UNDER REGISTRATION STATEMENT NO.
333-56712 ARE OFFERED AND SOLD PRIOR TO THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT, THE AMOUNT OF SUCH PREVIOUSLY REGISTERED SECURITIES SO SOLD WILL NOT
BE INCLUDED IN THE PROSPECTUS HEREUNDER.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission relating to these securities is effective.
This prospectus is not an offer to sell these securities and is not soliciting
an offer to buy these securities in any state where the offer or sale is not
permitted.

                   SUBJECT TO COMPLETION, DATED APRIL 5, 2002

PROSPECTUS

[CALPINE CORP. LOGO]
                                 $1,200,000,000

                              CALPINE CORPORATION

               4% CONVERTIBLE SENIOR NOTES DUE DECEMBER 26, 2006
    AND SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE SENIOR NOTES

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

     This prospectus covers resales by selling security holders of our 4%
convertible senior notes due December 26, 2006 and shares of our common stock
into which the notes are convertible.

     Our 4% convertible senior notes have the following provisions:

<Table>
<S>                    <C>
Interest Payments:     June 26 and December 26 of each year

Conversion Rate:       55.3403 shares per $1,000 principal amount,
                       equal to a conversion price of $18.07 per
                       share

Repurchase Options:    - by noteholders upon a change of control
                       - by noteholders on December 26, 2004
</Table>

     The notes are senior, unsecured obligations that rank equally with our
existing and future unsecured and unsubordinated indebtedness. See "Description
of Notes -- Ranking."

     Prior to this offering, the notes have been eligible for trading on the
PORTAL Market of the Nasdaq Stock Market. Notes sold by means of this prospectus
are not expected to remain eligible for trading on the PORTAL Market. We do not
intend to list the notes for trading on any national securities exchange or on
the Nasdaq Stock Market.

     Our common stock trades on The New York Stock Exchange under the symbol
"CPN." The last reported sales price on April 4, 2002 was $11.93 per share.

     SEE "RISK FACTORS" ON PAGE 6 OF THIS PROSPECTUS TO READ ABOUT FACTORS YOU
SHOULD CONSIDER BEFORE PURCHASING THE NOTES OR OUR COMMON STOCK.

     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                The date of this prospectus is           , 2002.
<PAGE>

                               TABLE OF CONTENTS

<Table>
<Caption>
                                        PAGE
                                        ----
<S>                                     <C>
About This Prospectus.................    1
Summary...............................    2
Risk Factors..........................    6
Consolidated Ratio of Earnings to
  Fixed Charges.......................    6
Where You Can Find More Information
  About Us and This Offering..........    7
Forward-Looking Statements............    8
Use of Proceeds.......................    8
</Table>

<Table>
<Caption>
                                        PAGE
                                        ----
<S>                                     <C>
Selling Holders.......................    9
Plan of Distribution..................    9
Description of Notes..................   11
Description of Capital Stock..........   28
Material United States Federal Income
  Tax Consequences....................   31
Legal Matters.........................   38
Independent Auditors..................   38
</Table>

                                        i
<PAGE>

                             ABOUT THIS PROSPECTUS

     This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or SEC, using a "shelf" registration or
continuous offering process. Under this shelf registration process, selling
holders may from time to time sell the securities described in this prospectus
in one or more offerings.

     This prospectus provides you with a general description of the securities
that the selling holders may offer. A selling holder may be required to provide
you with a prospectus supplement containing specific information about the
selling holder and the terms of the securities being offered. That prospectus
supplement may include additional risk factors or other special considerations
applicable to those securities. A 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
About Us and this Offering."

     Unless we have indicated otherwise, references hereafter in this prospectus
to "Calpine," "we," "us," and "our" or similar terms are to Calpine Corporation
and its consolidated subsidiaries, excluding Calpine Capital Trust III, Calpine
Capital Trust II and Calpine Capital Trust. Unless we have indicated otherwise,
references hereafter in this prospectus to "$" or "dollar" are to the lawful
currency of the United States.

     On April 19, 2001, we acquired Encal Energy Ltd. in a merger transaction
that was accounted for as a pooling-of-interests under United States generally
accepted accounting principles, or U.S. GAAP. All financial information
contained in this prospectus has been restated for all periods presented as if
Encal and Calpine had always been combined.

                                        1
<PAGE>

                                    SUMMARY

     This summary highlights information contained elsewhere or incorporated by
reference in this prospectus. This summary is not complete and does not contain
all of the information that you should consider before investing in our
securities. You should carefully read the entire prospectus, including the risk
factors, the financial statements and the documents incorporated by reference.
All information in this prospectus 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.

                                  OUR BUSINESS

     We are a leading independent power company engaged in the development,
acquisition, ownership and operation of power generation facilities and the sale
of electricity predominantly in the United States, but also in Canada and the
United Kingdom. We are also the world's largest producer of renewable geothermal
energy, and we own 1.3 trillion cubic feet equivalent of proved natural gas
reserves in Canada and the United States. We have experienced significant growth
in all aspects of our business over the last five years. Currently, we own
interests in 64 power plants having a net capacity of 12,090 megawatts. We also
have 24 gas-fired projects under construction having a net capacity of 14,142
megawatts and have 34 projects in advanced development with a net capacity of
15,100 megawatts. Construction of these advanced development projects will
proceed if and when market fundamentals are sound, our return on investment
criteria are expected to be met, and financing is available on attractive terms.

     The completion of the projects currently under construction would give us
interests in 86 power plants located in 21 states, three Canadian provinces and
the United Kingdom, having a net capacity of 26,232 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 net income, fully diluted earnings per share and assets have grown
significantly from 1997 to 2001, as shown in the table below, although we do not
anticipate our growth to continue at these rates in view of our revised
construction and advanced development activities.

<Table>
<Caption>
                                                                                 COMPOUND ANNUAL
                                                    1997            2001           GROWTH RATE
                                                ------------    -------------    ---------------
                                                (DOLLARS IN MILLIONS, EXCEPT
                                                     PER SHARE AMOUNTS)
<S>                                             <C>             <C>              <C>
Net income....................................    $   33.3        $   648.1            110%
Fully diluted earnings per share (1)..........        0.18             1.85             79%
Fully diluted earnings per share from
  recurring operations (2)....................        0.18             1.92             81%
Total assets..................................     1,643.2         21,309.3             90%
</Table>

---------------
     (1) Before extraordinary items and cumulative effect of a change in
         accounting principle.

     (2) Before deduction of merger expense in connection with the Encal Energy
         Ltd. pooling-of-interests transaction, and before extraordinary items
         and cumulative effect of a change in accounting principle.

                                   OUR MARKET

     The electric power industry represents one of the largest industries in the
United States and impacts nearly every aspect of our economy, with an estimated
end-user market of over $240 billion of electricity sales in 2001. 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

                                        2
<PAGE>

competitive market where end-users in certain power markets may purchase
electricity from a variety of suppliers, including independent power producers,
power marketers, regulated 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. We estimate that as much as
20%, or approximately 160,000 megawatts, of U.S. summer generating capacity is
vulnerable to environmental or economic replacement by new state-of-the-art
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.

                              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, 2001 which is incorporated by reference in this prospectus.

     Recent Rating Agency Actions.  In December 2001, Moody's Investors Service
downgraded our long-term debt from Baa3, its lowest investment grade rating, to
Ba1, its highest non-investment grade rating, and Fitch, Inc. downgraded our
long-term debt credit rating from BBB-, its lowest investment grade rating, to
BB+, its highest non-investment grade rating. In March 2002, each of Moody's and
Fitch further downgraded our long-term debt credit rating, including our senior
unsecured debt credit rating, to B1 (Moody's) and BB (Fitch), and Standard &
Poor's downgraded our corporate credit rating from BB+ to BB and our senior
unsecured debt credit rating from BB+ to B+. Moody's continues to report our
ratings outlook as negative. We cannot assure you that Moody's, Fitch and/or
Standard & Poor's will not further downgrade our credit ratings in the future.
If any of our credit ratings are further downgraded, we could be required to,
among other things, pay additional interest under our credit agreements, or
provide additional guarantees, collateral, letters of credit or cash for credit
support obligations and it could increase our cost of capital, make our efforts
to raise capital more difficult and have an adverse impact on us and our
subsidiaries.

                        OUR PRINCIPAL EXECUTIVE OFFICES

     We are a corporation organized and existing under the laws of the State of
Delaware. Our principal executive offices are located at 50 West San Fernando
Street, San Jose, California 95113. Our telephone number is (408) 995-5115.

                                   THE NOTES

INTEREST......................   We will pay interest on the principal amount of
                                 the notes on June 26 and December 26 of each
                                 year, commencing on June 26, 2002.

CONVERSION....................   You may convert the notes into shares of our
                                 common stock at any time before the close of
                                 business on December 24, 2006 unless we have
                                 repurchased the notes. The conversion rate is
                                 55.3403 shares of common stock per $1,000
                                 principal amount of notes. This is equivalent
                                 to a conversion price of $18.07 per share. We
                                 will adjust the conversion rate each time we
                                 take various corporate actions specified in the
                                 indenture governing the notes. See "Description
                                 of Notes -- Conversion Rights."

RANKING.......................   The notes are senior, unsecured obligations
                                 that rank equally with all of our existing and
                                 future unsecured and unsubordinated
                                 indebtedness. Holders of the notes will have a
                                 junior position to
                                        3
<PAGE>

                                 the claims of creditors of our subsidiaries on
                                 the assets of our subsidiaries and will be
                                 effectively subordinated to our secured
                                 indebtedness to the extent of the value of the
                                 assets pledged in support of our secured
                                 indebtedness. See "Description of Notes --
                                 Ranking."

GLOBAL NOTES; BOOK-ENTRY
SYSTEM........................   We issued the notes in registered form without
                                 interest coupons and in minimum denominations
                                 of $1,000. We have deposited global notes with,
                                 or on behalf of, The Depository Trust Company,
                                 which we refer to as DTC. DTC and its
                                 participants maintain records that show
                                 beneficial ownership in the notes, and those
                                 interests can be transferred only through those
                                 records. See "Description of
                                 Notes -- Book-Entry System and -- Form,
                                 Exchange Registration and Transfer."

REPURCHASE OF NOTES AT YOUR
OPTION ON DECEMBER 26, 2004...   You have the right to require us to repurchase
                                 all or a portion of your notes on December 26,
                                 2004 at 100% of their principal amount plus any
                                 accrued and unpaid interest to the repurchase
                                 date. We may choose to pay the repurchase price
                                 in cash or shares of our common stock, or a
                                 combination of cash and shares of our common
                                 stock. If we pay the repurchase price with
                                 shares of our common stock, the common stock
                                 will be valued at 100% of the average closing
                                 sales prices of our common stock for the five
                                 trading day period ending on the third business
                                 day prior to the repurchase date. See
                                 "Description of Notes -- Repurchase Right."

REPURCHASE OF NOTES AT YOUR
OPTION UPON A CHANGE IN
CONTROL.......................   If we undergo a change in control, you will
                                 have the right to require us to repurchase all
                                 or a portion of your notes at 100% of their
                                 principal amount plus any accrued and unpaid
                                 interest to the repurchase date. We may pay the
                                 purchase price either in cash or, if we satisfy
                                 the conditions set forth in the indenture, in
                                 shares of common stock. If we pay the
                                 repurchase price in common stock, the common
                                 stock will be valued at 95% of the average
                                 closing sales prices of our common stock for
                                 the five trading day period ending on the third
                                 business day prior to the repurchase date. See
                                 "Description of Notes -- Change in Control."

EVENTS OF DEFAULT.............   The following are events of default under the
                                 indenture for the notes:

                                      - we fail to pay any interest on any note
                                        when due and that non-payment continues
                                        for 30 days;

                                      - we fail to pay principal and accrued
                                        interest on any note when due;

                                      - we materially fail to perform any other
                                        covenant or agreement in the notes or
                                        the indenture for a period of 30 days
                                        after written notice to us;

                                      - we default on any of our other
                                        instruments of indebtedness with an
                                        outstanding principal amount of
                                        $50,000,000 or more, individually or in
                                        the aggregate, and our default

                                        4
<PAGE>

                                       causes the holders of the indebtedness to
                                       declare the indebtedness due and payable
                                       prior to its stated maturity, unless the
                                       holders of the indebtedness rescind their
                                       declaration within 30 days;

                                      - we fail to pay when due in excess of
                                        $50,000,000 of principal under any of
                                        our other instruments of indebtedness
                                        and that non-payment continues
                                        unremedied and unwaived for 30 days; and

                                      - events of bankruptcy, insolvency or
                                        reorganization specified in the
                                        indenture.

                                 See "Description of Notes -- Events of
                                 Default."

GOVERNING LAW.................   The laws of the State of New York govern the
                                 indenture and the notes.

                                        5
<PAGE>

                                  RISK FACTORS

     Investing in the notes involves risk. Before making an investment decision,
you should carefully consider the following 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 that we do not yet know of or that we currently think are
immaterial may also impair our business. You could lose all or part of your
investment if any of the risks and uncertainties described actually occur.

RISKS RELATING TO CALPINE

     Please see the risk factors described in our Annual Report on Form 10-K for
the year ended December 31, 2001 for a description of the risks relating to
Calpine.

RISKS RELATING TO THE NOTES

     BECAUSE THE NOTES ARE NOT LISTED ON AN EXCHANGE OR OTHER TRADING MARKET, IT
IS UNLIKELY THAT A MARKET WILL DEVELOP FOR THEM AND YOU SHOULD BE PREPARED TO
HOLD THEM TO MATURITY.

     There is no public market for the notes, which may significantly limit:

     - the liquidity of any market that may develop;

     - your ability to sell your notes; and

     - the price at which you will be able to sell your notes.

     If a market for the notes were to develop, the notes could trade at prices
that may be higher or lower than the principal amount or purchase price,
depending on many factors, including prevailing interest rates, the market for
similar notes and our financial performance. We do not intend to list the notes
for trading on any national securities exchange or on the Nasdaq National
Market, so you should be prepared to hold the notes to maturity unless you
convert them.

     Deutsche Bank Securities advised us at the time of the initial offering and
sale of the notes that it planned to make a market in the notes. Deutsche Bank
is not obligated, however, to make a market for the notes, and may discontinue
any market-making activity at any time at its sole discretion. In addition,
market-making activity will be subject to the limits imposed by the Securities
Act of 1933 and the Securities Exchange Act of 1934. Accordingly, no assurance
can be given as to the development or liquidity of any market for the notes.

                CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES

     The following table sets forth our consolidated ratio of earnings to fixed
charges for each of the last five years.

<Table>
<Caption>
       YEAR ENDED DECEMBER 31,
-------------------------------------
1997    1998    1999    2000    2001
-----   -----   -----   -----   -----
<S>     <C>     <C>     <C>     <C>
1.68x   1.52x   1.83x   2.26x   1.64x
</Table>

     For purposes of computing our consolidated ratio of earnings to fixed
charges, earnings consist of pre-tax 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 pre-tax 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 our
company-obligated mandatorily redeemable convertible preferred securities of
subsidiary trusts.

                                        6
<PAGE>

         WHERE YOU CAN FIND MORE INFORMATION ABOUT US AND THIS OFFERING

     We have filed with the SEC a registration statement on Form S-3 under the
Securities Act, to register the notes and common stock offered by this
prospectus. This prospectus does not contain all of the information included in
the registration statement and the exhibits and the schedules to the
registration statement. We strongly encourage you to read carefully the
registration statement and the exhibits and the schedules to the registration
statement.

     Any statement made in this prospectus concerning the contents of any
contract, agreement or other document is only a summary of the actual contract,
agreement or other document. If we have filed any contract, agreement or other
document as an exhibit to the registration statement, you should read the
exhibit for a more complete understanding of the document or matter involved.
Each statement regarding a contract, agreement or other document is qualified in
its entirety by reference to the actual document.

     We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may obtain any document we file with the SEC at
the SEC's public reference rooms 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.

     The SEC permits us to "incorporate by reference" into this prospectus the
information contained in documents that 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. Information in this prospectus supersedes information incorporated
by reference that we filed with the SEC prior to the date of this prospectus,
while information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we will make with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act until the offering is
completed:

     - our Annual Report on Form 10-K (File No. 001-12079) for the year ended
       December 31, 2001;

     - our Current Reports on Form 8-K filed with the SEC on January 16, 2002,
       January 17, 2002, February 8, 2002, March 13, 2002, March 13, 2002, March
       26, 2002;

     - the description of our common stock contained in our Registration
       Statement on Form 8-A (File No. 001-12079), filed with the SEC on August
       20, 1996; and

     - the description of rights relating to our common stock contained in our
       Registration Statement on Form 8-A (File No. 001-12079), filed with the
       SEC on June 17, 1997, and the amendments to that Registration Statement
       filed on June 18, 1997, June 24, 1997 and September 28, 2001.

     You may request a copy of these filings, at no cost to you, by writing or
telephoning us at: Calpine Corporation, 50 West San Fernando Street, San Jose,
California 95113, attention: Lisa M. Bodensteiner, Assistant Secretary,
telephone: (408) 995-5115. If you request a copy of any or all of the documents
incorporated by reference, we will send to you the copies you request. However,
we will not send exhibits to the documents, unless the exhibits are specifically
incorporated by reference in the documents.

     YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED IN THIS PROSPECTUS OR
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS AND ANY 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 PROSPECTUS SUPPLEMENT IS ACCURATE AS OF
ANY DATE OTHER THAN THE DATE ON THE FRONT OF THE DOCUMENT.

                                        7
<PAGE>

                           FORWARD-LOOKING STATEMENTS

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

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

     - unseasonable weather patterns that reduce demand for power and natural
       gas;

     - systemic economic slowdowns, which can adversely affect consumption of
       power by businesses and consumers;

     - the timing and extent of deregulation of energy markets and the rules and
       regulations adopted on a transitional basis with respect thereto;

     - the timing and extent of changes in commodity prices for energy,
       particularly natural gas and electricity;

     - 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;

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

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

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

     - other risks identified from time to time in our reports and registration
       statements filed with the SEC, including the risk factors identified in
       our Annual Report on Form 10-K for the year ended December 31, 2001,
       which is incorporated by reference in this prospectus.

     Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of such statements.

                                USE OF PROCEEDS

     The selling holders will receive all of the net proceeds of the resale of
the notes and our common stock issuable upon conversion of the notes. We will
not receive any of the proceeds from the resale of any of these securities.

                                        8
<PAGE>

                                SELLING HOLDERS

     We originally issued the notes to Deutsche Bank in a transaction exempt
from the registration requirements of the Securities Act. Deutsche Bank
immediately resold the notes in transactions exempt from the registration
requirements of the Securities Act to persons reasonably believed by them to be
qualified institutional buyers as defined in Rule 144A under the Securities Act.

     The selling holders, including their transferees, pledgees, donees or other
successors, may from time to time offer and sell pursuant to this prospectus any
or all of the notes and the common stock issuable upon conversion of the notes.
Any selling holder may also elect not to sell any notes or common stock issuable
upon conversion of the notes held by it. Only those notes and shares of common
stock issuable upon conversion of the notes listed below may be offered for
resale by the selling holders pursuant to this prospectus.

     The following table sets forth recent information with respect to the
selling holders of the notes and the respective number of notes beneficially
owned by each selling holder that may be offered for each selling holder's
account pursuant to this prospectus. We prepared this table based on information
supplied to us by or on behalf of the selling holders. The selling holders may
offer and sell all, some or none of the notes and the common stock issuable upon
conversion of the notes listed below by using this prospectus. Because the
selling holders may offer all or only some portion of the notes or the common
stock listed in the table, no estimate can be given as to the amount of those
securities that will be held by the selling holders upon termination of any
sales. In addition, the selling holders identified in the table below may have
sold, transferred or disposed of all or a portion of their notes or shares of
common stock issuable upon conversion of the notes since the date on which they
provided the information regarding their ownership of those securities included
in this prospectus.

<Table>
<Caption>
                                                                                               SHARES OF
                                                                                                 COMMON
                             AGGREGATE PRINCIPAL        SHARES OF                          STOCK BENEFICIALLY
                               AMOUNT OF NOTES            COMMON            SHARES OF            OWNED
                                BENEFICIALLY              STOCK              COMMON         AFTER COMPLETION
SELLING HOLDERS               OWNED AND OFFERED     BENEFICIALLY OWNED    STOCK OFFERED     OF THE OFFERING
---------------              -------------------    ------------------    -------------    ------------------
<S>                          <C>                    <C>                   <C>              <C>
[TO COME]..................       [TO COME]             [TO COME]           [TO COME]          [TO COME]
</Table>

     [To our knowledge, other than their ownership of the securities described
in the above table, none of the selling holders has, or has had within the past
three years, any position, office or other material relationship with us or any
of our predecessors or affiliates, except that Deutsche Bank acted as the
initial purchaser of the notes and acts as an adviser to us from time to time
with respect to other matters.]

                              PLAN OF DISTRIBUTION

     The notes and the common stock issuable upon conversion of the notes may be
offered and sold from time to time to purchasers directly by the selling
holders. Alternatively, the selling holders may from time to time offer those
securities to or through underwriters, broker-dealers or agents, who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the selling holders or the purchasers of the securities for whom they act
as agents. The selling holders and any underwriters, broker-dealers or agents
that participate in the distribution of the securities may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profit on the
sale of securities and any discounts, commissions, concessions or other
compensation received by any underwriter, broker-dealer or agent may be deemed
to be underwriting discounts and commissions under the Securities Act.

     The securities may be sold from time to time in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at varying prices
determined at the time of sale or at negotiated prices. The sale of the
securities may be effected in transactions, which may involve crosses or block
transactions:

     - on any national securities exchange or quotation service on which the
       securities may be listed or quoted at the time of sale;

                                        9
<PAGE>

     - in the over-the-counter market;

     - in transactions otherwise than on exchanges or in the over-the-counter
       market;

     - through the writing and exercise of options; or

     - through the settlement of short sales.

     At the time a particular offering of the securities is made, if required, a
prospectus supplement will be distributed, which will set forth the names of the
selling holders, the aggregate amount and type of securities being offered and
the terms of the offering, including the name or names of any underwriters,
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling holders and any discounts,
commissions or concessions allowed or reallowed to paid broker-dealers.

     To comply with the securities laws of some jurisdictions, if applicable,
the securities will be offered or sold in some jurisdictions only through
registered or licensed brokers or dealers. In addition, in some jurisdictions
the securities may not be offered or sold unless they have been registered or
qualified for sale in those jurisdictions or any exemption from registration or
qualification is available and is complied with.

     The selling holders and any other person participating in the distribution
of securities will be subject to applicable provisions of the Securities
Exchange Act and the rules and regulations under the Securities Exchange Act,
including, without limitation, Regulation M of the Securities Exchange Act,
which may limit the timing of purchases and sales of any of the offered
securities by the selling holders and any other person. Furthermore, Regulation
M may restrict the ability of any person engaged in the distribution of the
offered securities to engage in market-making activities with respect to the
particular offered securities being distributed. Compliance with the Securities
Exchange Act, as described in this paragraph, may affect the marketability of
the offered securities and the ability of any person or entity to engage with
respect to the offered securities.

     Pursuant to a registration rights agreement, we have borne all fees and
expenses incurred in connection with the registration of the notes and the
common stock issuable upon conversion of the notes, except that selling holders
will pay all broker's commissions and underwriting discounts and commissions, if
any, in connection with any sales effected pursuant to this prospectus. We will
indemnify the selling holders against some civil liabilities, including some
liabilities under the Securities Act or the Securities Exchange Act or
otherwise, or alternatively the selling holders will be entitled to contribution
in connection with those liabilities.

                                        10
<PAGE>

                              DESCRIPTION OF NOTES

     We issued the notes under a document called the "indenture". The indenture
is a contract between us and Wilmington Trust Company, who is serving as
trustee. The law of the State of New York governs both the indenture and the
notes. In this section, references to "Calpine," "we," "our" or "us" refer
solely to Calpine Corporation and not its subsidiaries.

THE NOTES

     The notes are our senior, unsecured obligations and rank equally in right
of payment with all of our existing and future unsecured and unsubordinated
indebtedness. The notes are limited to an aggregate initial principal amount of
$1,200,000,000, plus accrued and unpaid interest. The notes will mature on
December 26, 2006 unless earlier repurchased by us at a holder's option on
December 26, 2004 or upon a change of control of Calpine.

     We issued the notes at a price to investors of $1,000 per note. Interest on
the notes will accrue at the rate of 4% per annum on the principal amount of
each note. We will make interest payments on the notes semiannually on June 26
and December 26 of each year, commencing on June 26, 2002. Interest on the notes
will accrue from the date of original issuance, or if interest has already been
paid, from the date it was most recently paid. We will make each interest
payment to holders of record of the notes on the immediately preceding June 11
and December 11, whether or not this day is a business day. Interest on the
notes will be computed on the basis of a 360-day year comprised of twelve 30-day
months.

CONVERSION RIGHTS

     You may surrender your notes for conversion into shares of our common stock
at any time prior to 5:00 p.m., New York City time, on the date that is two
business days prior to maturity of the notes, unless previously repurchased. You
may convert each note into one share of our common stock at the initial
conversion price of $18.07 per share of common stock which is equivalent to an
initial conversion ratio of approximately 55.3403 shares of common stock per
note. The conversion price and the equivalent conversion ratio in effect at any
given time are referred to in this prospectus as the applicable conversion price
and the applicable conversion ratio, respectively, and will be subject to
adjustment as described below. You may convert fewer than all of your notes so
long as the notes converted are a multiple of $1,000 principal amount.

     Upon conversion of any notes on a date that is not an interest payment
date, you will not be entitled to receive any cash payment representing accrued
and unpaid interest for the period from the immediately preceding interest
payment date to the conversion date with respect to the converted notes.
However, if notes are converted after a regular record date and prior to the
opening of business on the next interest payment date, including the date of
maturity, holders of the notes at the close of business on the regular record
date will receive the interest payable on the notes on the corresponding
interest payment date notwithstanding the conversion. Upon conversion we will
deliver to you a fixed number of shares of common stock and any cash payment to
account for fractional shares. The cash payment for fractional shares will be
based on the closing price of our common stock on the New York Stock Exchange
trading day immediately prior to the conversion date. Delivery of shares of our
common stock will be deemed to satisfy our obligation to pay the principal
amount of the notes, including accrued interest, except if conversion occurs
after the regular record date. Accrued interest will be deemed paid in full
rather than canceled, extinguished or forfeited. We will not adjust the
conversion price to account for the accrued interest.

     If you wish to exercise your conversion right, you must deliver an
irrevocable conversion notice, together, if the notes are in certificated form,
with the certificated security, to the conversion agent who will, on your
behalf, convert the notes into shares of our common stock. You may obtain copies
of the required form of the conversion notice from the conversion agent.

                                        11
<PAGE>

     The conversion price will be subject to adjustment, without duplication,
upon the following events:

     - the payment of dividends and other distributions payable exclusively in
       shares of our common stock on our common stock;

     - the issuance to all holders of our common stock of rights or warrants
       that allow the holders to purchase shares of our common stock at less
       than the current market price; provided that no adjustment will be made
       if holders of the notes may participate in the transaction on a basis and
       with notice that our board of directors determines to be fair and
       appropriate or in some other cases;

     - subdivisions or combinations of our common stock;

     - the payment of dividends and other distributions to all holders of our
       common stock, consisting of evidences of our indebtedness, securities or
       capital stock, cash or assets, except for those rights or warrants
       referred to in the second bullet point above and dividends and other
       distributions paid exclusively in cash; provided that no adjustment will
       be made if all holders of the notes may participate in the transactions;

     - the payment to holders of our common stock in respect of a tender or
       exchange offer, other than an odd-lot offer, by us or any of our
       subsidiaries for our common stock to the extent that the offer involves
       aggregate consideration that, together with (1) any cash and the fair
       market value of any other consideration payable in respect of any tender
       offer by us or any of our subsidiaries for shares of our common stock
       consummated within the preceding 12 months not triggering a conversion
       price adjustment and (2) all-cash distributions to all or substantially
       all stockholders made within the preceding 12 months not triggering a
       conversion price adjustment, exceeds an amount equal to 12.5% of the
       market capitalization of our common stock on the expiration date of the
       tender offer; and

     - the distribution to all or substantially all holders of our common stock
       of all-cash distributions in an aggregate amount that, together with (1)
       any cash and the fair market value of any other consideration payable in
       respect of any tender offer by us or any of our subsidiaries for shares
       of our common stock consummated within the preceding 12 months not
       triggering a conversion price adjustment and (2) all other all-cash
       distributions to all or substantially all holders of our common stock
       made within the preceding 12 months not triggering a conversion price
       adjustment, exceeds an amount equal to 12.5% of the market capitalization
       of our common stock on the business day immediately preceding the day on
       which we declare the distribution.

     The applicable conversion price will not be adjusted:

     - upon the issuance of any shares of our common stock pursuant to any
       present or future plan providing for the reinvestment of dividends or
       interest payable on securities of Calpine and the investment of
       additional optional amounts in shares of our common stock under any plan;

     - upon the issuance of any shares of our common stock or options or rights
       to purchase those shares pursuant to any present or future employee,
       director or consultant benefit plan or program of Calpine;

     - upon the issuance of any shares of our common stock pursuant to any
       option, warrant, right, or exercisable, exchangeable or convertible
       security outstanding as of the date the notes were first issued; or

     - upon the issuance of any rights, any distribution of separate
       certificates representing the rights, any exercise or redemption of any
       rights or any termination or invalidation of the rights, pursuant to our
       stockholders rights plan.

     We may decrease the conversion price for at least 20 days, so long as the
decrease is irrevocable during that 20-day period. No adjustment in the
applicable conversion price will be required unless the adjustment would require
an increase or decrease of at least 1% of the applicable conversion price. If
the adjustment is not made because the adjustment does not change the applicable
conversion price by more
                                        12
<PAGE>

than 1%, then the adjustment that is not made will be carried forward and taken
into account in any future adjustment. Except as specifically described above,
the applicable conversion price will not be subject to adjustment in the case of
the issuance of any of our common stock, or securities convertible into or
exchangeable for our common stock.

REPURCHASE RIGHT

     You have the right to require us to repurchase all or a portion of your
notes on December 26, 2004. We will be required to repurchase any outstanding
notes for which you deliver a written repurchase notice to the paying agent.
This notice must be delivered during the period beginning at any time from the
opening of business on the date that is 20 business days prior to the repurchase
date until the close of business on the last business day prior to the
repurchase date. If the repurchase notice is given and withdrawn during the
period, we will not be obligated to repurchase the related notes. Our repurchase
obligation will be subject to some additional conditions set forth in the
indenture.

     The repurchase price payable will be equal to the issue price plus any
accrued and unpaid interest to the repurchase date.

     We may choose, in our sole discretion, to pay the repurchase price in cash
or shares of our common stock, or a combination of cash and shares of our common
stock. For a discussion of the tax treatment of a holder receiving cash, shares
of our common stock or any combination of cash and shares of common stock, see
"Material United States Federal Income Tax Consequences."

     If we choose to pay the repurchase price, in whole or in part, in shares of
our common stock or a combination of cash and shares of our common stock, we
will be required to give notice on a date not less than 20 business days prior
to the repurchase date to all holders at their addresses shown in the register
of the registrar, and to beneficial owners as required by applicable law stating
among other things:

     - whether we will pay the repurchase price of the notes in cash, in shares
       of our common stock, or any combination of cash and shares of common
       stock, and specifying the percentages of each;

     - if we elect to pay with shares of our common stock, the method of
       calculating the price of the common stock; and

     - the procedures that holders must follow to require us to repurchase their
       notes.

If we do not provide you with this notice, we will pay the repurchase price in
cash.

     Simultaneously with a notice of purchase, we will disseminate a press
release through Dow Jones & Company, Inc. or Bloomberg Business News containing
this information and publish the information on our web site or through other
public media as we may use at that time.

     If we pay with shares of our common stock, the shares will be valued at
100% of the market price for our common stock.

     The "market price" means the average of the sale prices of our common stock
for the five trading day period ending on the third business day, if the third
business day prior to the repurchase date is a trading day, or if not, then on
the last trading day prior to the third business day, prior to the repurchase
date, appropriately adjusted to take into account the occurrence, during the
period commencing on the first of the trading days during the five trading day
period and ending on the repurchase date, of events that would result in an
adjustment of the conversion rate with respect to our common stock.

     The "sale price" of our common stock on any date means the closing sale
price per share, or if no closing sale price is reported, the average of the bid
and ask prices or, if more than one in either case, the average of the average
bid and the average ask prices, on that date as reported in composite
transactions for the principal U.S. securities exchange on which our shares of
common stock are traded or, if our shares are not listed on a U.S. national or
regional securities exchange, as reported by The Nasdaq System.

                                        13
<PAGE>

     Your notice electing to require us to repurchase your notes must state:

     - if certificated notes have been issued, the certificate numbers of the
       notes, or if not certificated, your notice must comply with appropriate
       DTC procedures;

     - the portion of the principal amount of notes to be repurchased, in
       multiples of $1,000;

     - that the notes are to be repurchased by us pursuant to the applicable
       provisions of the notes; and

     - in the event we elect, pursuant to the notice that we are required to
       give, to pay the repurchase price in shares of common stock, in whole or
       in part, but the repurchase price is ultimately to be paid to the holder
       entirely in cash because any of the conditions to payment of the
       repurchase price or portion of the repurchase price in shares of common
       stock is not satisfied prior to the close of business on the last day
       prior to the repurchase date, as described below, whether the holder
       elects:

             (1) to withdraw the repurchase notice as to some or all of the
        notes to which it relates, or

             (2) to receive cash in respect of the entire repurchase price for
        all notes or portions of notes subject to the repurchase notice.

     If the holder fails to indicate the holder's choice with respect to the
election described in the final bullet point above, the holder will be deemed to
have elected to receive cash in respect of the entire repurchase price for all
notes subject to the repurchase notice in these circumstances. For a discussion
of the tax treatment of a holder receiving cash instead of shares of our common
stock, see "Material United States Federal Income Tax Consequences."

     You may withdraw any repurchase notice by a written notice of withdrawal
delivered to the paying agent prior to the close of business on the last day
prior to the repurchase date. The notice of withdrawal must state:

     - the principal amount of the withdrawn notes;

     - if certificated notes have been issued, the certificate numbers of the
       withdrawn notes, or if not certificated, your notice must comply with
       appropriate DTC procedures; and

     - the principal amount, if any, which remains subject to the repurchase
       notice.

     If we elect to pay the repurchase price, in whole or in part, in shares of
our common stock, the number of shares to be delivered by us will be equal to
the portion of the repurchase price to be paid in shares of our common stock
divided by the market price of one share of our common stock as determined by us
in our repurchase notice. We will pay cash based on the market price for all
fractional shares.

     Because the market price of our common stock is determined prior to the
repurchase date, holders of notes bear the market risk with respect to the value
of the common stock to be received from the date the market price is determined
to the repurchase date. We may pay the repurchase price or any portion of the
repurchase price in shares of common stock only if the information necessary to
calculate the market price is published in a daily newspaper of national
circulation, by dissemination on the World Wide Web or by other public means.

     Upon determination of the actual number of shares of common stock to be
paid upon repurchase of the notes, we will disseminate a press release not later
than three business days prior to the repurchase date through Dow Jones &
Company, Inc. or Bloomberg Business News containing this information and publish
the information on our Website on the World Wide Web or through other public
media as we may use at that time.

     A holder must either effect book-entry transfer or deliver the notes,
together with necessary endorsements, to the office of the paying agent after
delivery of the repurchase notice to receive payment of the repurchase price.
You will receive payment on the later of the repurchase date or the time of
book-

                                        14
<PAGE>

entry transfer or the delivery of the notes. If the paying agent holds money or
securities sufficient to pay the repurchase price of the notes on the business
day following the repurchase date, then:

     - the notes will cease to be outstanding;

     - interest will cease to accrue; and

     - all other rights of the holder of the notes will terminate.

     This will be the case whether or not book-entry transfer of the notes is
made or whether or not the notes are delivered to the paying agent.

     We will comply with the provisions of Rule 13e-4 under the Securities
Exchange Act and any other tender offer rules under the Securities Exchange Act
which may be applicable at the time of a repurchase of notes. We will file
Schedule TO or any other schedule required in connection with any offer by us to
repurchase the notes at your option.

RANKING

     The notes are unsecured and are effectively subordinated to all of our
existing and future secured indebtedness to the extent of the value of the
assets securing that indebtedness, including, without limitation, indebtedness
under (1) the Credit Agreement, dated as of March 8, 2002, among us, as
borrower, certain commercial lending institutions, as lenders, The Bank of Nova
Scotia and Bayerische Landesbank Girozentrale, as lead arrangers and bookrunners
on the revolving facility, Salomon Smith Barney Inc. and Deutsche Banc Alex.
Brown Inc., as lead arrangers and bookrunners on the Term B facility, The Bank
of Nova Scotia and Citicorp USA Inc., as joint administrative agents, The Bank
of Nova Scotia, as funding agent, Bank of America, National Association, and
Credit Suisse First Boston, Cayman Islands Branch, as lead arrangers and
syndication agents for the revolving facility, and TD Securities (USA) Inc., as
lead arranger for the revolving facility, and (2) the Amended and Restated
Credit Agreement, dated as of May 23, 2000, as amended, among us, as borrower,
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, in each case as such
credit agreement may be amended, refinanced, replaced, renewed or extended from
time to time. Indebtedness under the March 8, 2002 credit agreement and the May
23, 2000 credit agreement is secured by, among other things, our pledge of all
of the stock of our wholly-owned subsidiaries Calpine CCFC Holdings, Inc.,
Calpine Natural Gas GP, Inc. and Calpine Natural Gas Holdings, Inc., which
subsidiaries own, directly or indirectly, all of our U.S. and Canadian natural
gas resources. Holders of existing or future secured indebtedness, including
indebtedness under the March 8, 2002 credit agreement and the May 23, 2000
credit agreement, will have claims with respect to assets constituting
collateral that are prior to the claims of the holders of the notes.

     The notes rank equal in right of payment with all of our existing and
future unsecured and unsubordinated indebtedness, including, without limitation,
our obligations under (1) our other outstanding senior debt securities,
including our 7 5/8% Senior Notes Due 2006, our 7 3/4% Senior Notes Due 2009,
our 7 7/8% Senior Notes Due 2008, our 8 3/4% Senior Notes Due 2007, our 10 1/2%
Senior Notes Due 2006, our 8 1/4% Senior Notes Due 2005, our 8 5/8% Senior Notes
Due 2010, our 8 1/2% Senior Notes Due 2011, and our Zero-Coupon Convertible
Debentures Due 2021 and (2) indebtedness of our subsidiaries guaranteed by us,
including the 8 1/2% Senior notes Due 2008 and the 8 3/4% Senior Notes Due 2007
issued by Calpine Canada Energy Finance ULC and the 8 7/8% Senior Notes Due 2011
and 8 3/8% Senior Notes Due 2008 issued by Calpine Canada Energy Finance II ULC.
As of December 31, 2001, we had approximately $7.9 billion of indebtedness
outstanding, none of which was secured, that would rank equally with the notes.
In addition, we currently can borrow up to $1.4 billion under the revolving
credit facilities under the March 8, 2002 credit agreement and the May 23, 2000
credit agreement, and, assuming that we meet certain borrowing conditions, we
will be able to borrow up to an additional $0.6 billion in term loans under the
March 8, 2002 credit agreement, all of which will be secured. As of April 1,
2002, we had $250 million outstanding under the revolving credit facilities
under these credit agreements.

                                        15
<PAGE>

     We currently conduct substantially all our operations through our
subsidiaries, and our subsidiaries generate substantially all of our operating
income and cash flow. As a result, distributions or advances from our
subsidiaries are the principal source of funds necessary to meet our debt
service obligations. Contractual provisions or laws, as well as our
subsidiaries' financial condition and operating requirements, may limit our
ability to obtain cash from our subsidiaries that we require to pay our debt
service obligations, including payments on the notes. In addition, holders of
the notes will have a junior position to the claims of creditors of our
subsidiaries on their assets and earnings. As of December 31, 2001, our
subsidiaries had $3.4 billion of project finance debt, to which the notes are
structurally subordinated.

CHANGE IN CONTROL

     If a change in control occurs, a holder of notes will have the right, at
its option, to require us to repurchase all of its notes, or any portion of the
principal amount of the notes, that is equal to $1,000 or an integral multiple
of $1,000. The price we will be required to pay is equal to the issue price plus
any accrued and unpaid interest to the date of repurchase.

     At our option, instead of paying the repurchase price in cash, we may pay
the repurchase price in registered shares of our common stock valued at 95% of
the market price. We may only pay the repurchase price in shares of our common
stock if we satisfy conditions provided in the indenture.

     Within 30 days after the occurrence of a change in control, we are
obligated to give to the holders of notes notice of the change in control and of
the repurchase right arising as a result of the change in control. We must also
deliver a copy of this notice to the trustee. To exercise the repurchase right,
a holder of notes must deliver on or before the 30th day after the date of our
notice irrevocable written notice to the trustee of the holder's exercise of its
repurchase right, together with the notes with respect to which the right is
being exercised. We are required to repurchase the notes on the date that is 45
days after the date of our notice.

     Simultaneously with a notice of a change in control, we will disseminate a
press release through Dow Jones & Company, Inc. or Bloomberg Business News
containing this information and publish the information on our Web site or
through other public media as we may use at that time.

     A change in control will be deemed to have occurred at the time after the
notes are originally issued that any of the following occurs:

     - any person, including any syndicate or group deemed to be a "person"
       under Section 13(d)(3) of the Securities Exchange Act, acquires
       beneficial ownership, directly or indirectly, through a purchase, merger
       or other acquisition transaction or series of transactions, of shares of
       our capital stock entitling the person to exercise 50% or more of the
       total voting power of all shares of our capital stock that is entitled to
       vote generally in elections of directors, other than an acquisition by
       us, any of our subsidiaries or any of our employee benefit plans; or

     - we merge or consolidate with or into any other person, any merger of
       another person into us, or we convey, sell, transfer or lease all or
       substantially all of our assets to another person, other than any
       transaction:

             (1) that does not result in any reclassification, conversion,
        exchange or cancellation of outstanding shares of our capital stock, or

             (2) pursuant to which the holders of our common stock immediately
        prior to the transaction have the entitlement to exercise, directly or
        indirectly, 50% or more of the total voting power of all shares of
        capital stock entitled to vote generally in the election of directors of
        the continuing or surviving corporation immediately after the
        transaction, or

             (3) which is effected solely to change our jurisdiction of
        incorporation and results in a reclassification, conversion or exchange
        or outstanding shares of our common stock solely into shares of common
        stock of the surviving entity.

                                        16
<PAGE>

     However, a change in control will not be deemed to have occurred if either:

     - the closing price per share of our common stock on the New York Stock
       Exchange for any five New York Stock Exchange trading days within the
       period of 10 consecutive New York Stock Exchange trading days ending
       immediately after the later of the change in control or the public
       announcement of the change in control, in the case of a change in control
       relating to an acquisition of capital stock, or the period of 10
       consecutive New York Stock Exchange trading days ending immediately
       before the change in control, in the case of change in control relating
       to a merger, consolidation or asset sale, equals or exceeds 105% of the
       conversion price of the notes in effect on each of those New York Stock
       Exchange trading days; or

     - all of the consideration, excluding cash payments for fractional shares
       and cash payments made pursuant to dissenters' appraisal rights, in a
       merger or consolidation otherwise constituting a change in control under
       the two bullet points of the preceding sentence consists of shares of
       common stock traded on a national securities exchange or quoted on the
       Nasdaq National Market, or will be so traded or quoted immediately
       following the merger or consolidation, and as a result of the merger or
       consolidation the notes become convertible into that common stock.

     For purposes of these provisions:

     - the conversion price is equal to $1,000 divided by the conversion rate;

     - whether a person is a "beneficial owner" will be determined in accordance
       with Rule 13d-3 under the Securities Exchange Act; and

     - "person" includes any syndicate or group that would be deemed to be a
       "person" under Section 13(d)(3) of the Securities Exchange Act.

     Rule 13e-4 under the Securities Exchange Act requires the dissemination of
prescribed information to security holders in the event of an issuer tender
offer and may apply in the event that the repurchase option becomes available to
the holders of notes. We will comply with this rule to the extent it applies at
that time.

     The definition of change in control includes a phrase relating to the
conveyance, transfer, sale, lease or disposition of "all or substantially all"
of our assets. There is no precise, established definition of the phrase
"substantially all" under applicable law. Accordingly, the ability of a holder
of notes to require us to repurchase its notes as a result of the conveyance,
transfer, sale, lease or other disposition of less than all of our assets may be
uncertain.

     The foregoing provisions would not necessarily provide the holders of notes
with protection if we are involved in a highly leveraged or other transaction
that may adversely affect the holders.

     If a change in control were to occur, we may not have enough funds to pay
the repurchase price. We have previously incurred, and may in the future incur,
other indebtedness with similar change in control provisions permitting its
holders to accelerate or to require us to repurchase our indebtedness upon the
occurrence of similar events or on some specified dates. If we fail to
repurchase the notes when required following a change in control, we will be in
default under the indenture.

MERGER AND SALES OF ASSETS BY CALPINE

     We may not consolidate with or merge with or into any other person or sell,
assign, convey, transfer, or lease or otherwise dispose of all or substantially
all of our properties and assets as an entirety to any person unless:

     - we shall be the surviving corporation;

     - the person formed by the consolidation or into which we are merged or the
       person to which our properties and assets are so sold, assigned,
       conveyed, transferred, leased or otherwise disposed of, shall be a
       corporation organized and existing under the laws of the United States,
       any State within

                                        17
<PAGE>

       the United States or the District of Columbia and shall expressly assume,
       in a form reasonably satisfactory to the trustee, all of our obligations
       under the indenture and the notes; and

     - immediately after giving effect to the transaction, no event of default
       with respect to the notes will have occurred and be continuing.

EVENTS OF DEFAULT

     The following are events of default with respect to the notes:

     - default for 30 days in payment of any interest installment due and
       payable on the notes;

     - default in payment of principal of the notes and accrued interest at
       maturity, upon repurchase or following a change in control, when the same
       becomes due and payable;

     - material default in our performance of any other covenants or agreements
       in the notes or the indenture which default continues for 30 days after
       the date on which written notice of the material default is given to us
       by the trustee or to us and trustee by the holders of at least 25% in
       principal amount of the then outstanding notes;

     - default by us under any instrument or instruments under which there is or
       may be secured or evidenced any of our indebtedness other than the notes
       having an outstanding principal amount of $50,000,000, or its equivalent
       in any other currency or currencies, or more, individually or in the
       aggregate, that has caused the holders of the indebtedness to declare the
       indebtedness to be due and payable prior to its stated maturity, unless
       the declaration has been rescinded within 30 days;

     - default in the payment of the principal of any bond, debenture, note or
       other evidence of our indebtedness, in each case for money borrowed, or
       in the payment of principal under any mortgage, indenture, agreement or
       instrument under which there may be issued or by which there may be
       secured or evidenced any indebtedness of ours for money borrowed, which
       default for payment of principal is individually or in an aggregate
       principal amount exceeding $50,000,000, or its equivalent in any other
       currency or currencies, when the indebtedness becomes due and payable,
       whether at maturity, upon redemption or acceleration or otherwise, if the
       default shall continue unremedied or unwaived for more than 30 days after
       the expiration of any grace period or extension of the time for payment
       applicable thereto; and

     - some events of bankruptcy, insolvency and reorganization of Calpine.

     The indenture requires that we file annually with the trustee a certificate
describing any default by us in the performance of any conditions or covenants
that has occurred under the indenture and its status. We must give the trustee,
within 30 days after the occurrence of a default, written notice of any event
which with the giving of notice or lapse of time or both would become an event
of default described in the third, fourth or fifth bullet points above.

     The indenture provides that if an event of default, other than an event of
default relating to events of bankruptcy, insolvency and reorganization, occurs
and is continuing with respect to the notes, either the trustee or the
registered holders of at least 25% in aggregate principal amount of the notes,
may declare the issue price plus accrued and unpaid interest on the notes to be
due and payable immediately. If an event of default relating to events of
bankruptcy, insolvency or reorganization occurs, the issue price plus accrued
and unpaid interest on the notes will become immediately due and payable without
any action on the part of the trustee or any holder. 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 the notes have
been cured or waived, other than the nonpayment of the issue price or accrued
and unpaid interest on the notes which has become due solely by reason of the
declaration of acceleration, then the declaration of acceleration shall be
automatically annulled and rescinded.

                                        18
<PAGE>

     A holder of notes may pursue any remedy under the indenture only if:

     - the holder gives the trustee written notice of a continuing event of
       default for the notes;

     - the registered holders of at least 25% in principal amount of the
       outstanding notes make a written request to the trustee to pursue the
       remedy;

     - the registered holder offers to the trustee security and indemnity
       reasonably satisfactory to the trustee against any loss, liability or
       expense;

     - the trustee fails to act for a period of 60 days after receipt of notice,
       request and offer of security or indemnity; and

     - during that 60-day period, the holders of a majority in principal amount
       of the notes do not give the trustee a direction inconsistent with the
       request.

     This provision does not, however, affect the right of a holder of notes to
sue for enforcement of payment of the principal of or interest, including
liquidated damages on the holder's note on or after the respective due dates
expressed or provided for in its note or the holder's right to convert its note
in accordance with the indenture.

     The trustee is entitled under the indenture, 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 indenture
at the direction of the registered holders of the notes or which requires the
trustee to expend or risk its own funds or otherwise incur any financial
liability. The indenture also provides that the registered holders of a majority
in principal amount of the outstanding notes 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 the
notes. The trustee, however, may refuse to follow any direction that the trustee
determines is unduly prejudicial to the rights of other registered holders of
the notes, or would involve the trustee in personal liability; provided that the
trustee may take any other action deemed proper by it that is not inconsistent
with the direction.

     The indenture provides 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 the indenture within 90 days of the trustee's actual
knowledge of the 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 notice is in the interest of the
registered holders of that series of debt securities.

LIMITATION ON SALE/LEASEBACK TRANSACTIONS

     Under the terms of the indenture, we shall not, and shall not permit any of
our restricted subsidiaries to, enter into any sale/leaseback transaction
unless:

     - we 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

     - the net proceeds of the sale are at least equal to the fair value, as
       determined by the board of directors of Calpine, of the property or asset
       subject to the sale/leaseback transaction and Calpine, 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
       Calpine, or of the restricted subsidiary.

     In addition to the transactions permitted pursuant to the two bullet points
in the preceding sentence, we or any of our 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

                                        19
<PAGE>

     - 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 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 property or assets indebtedness incurred to acquire, develop or
construct property or assets of any restricted subsidiary.

     As used in the indenture, 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 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 a sale/leaseback transaction, including any period for
which a 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 principles, is required to be
capitalized on the balance sheet of that person; the stated maturity of any
lease shall be the date of the last payment of rent or any other amount due
under that lease prior to the first date upon which that lease may be terminated
by the lessee without payment of a penalty;

     "consolidated current liabilities," as of the date of determination, means
our aggregate amount of consolidated liabilities, and those of restricted
subsidiaries, which may properly be classified as current liabilities, including
taxes accrued as estimated, after eliminating (1) all inter-company items
between Calpine and its subsidiaries and (2) all current maturities of long-term
indebtedness, all as determined in accordance with generally accepted accounting
principles;

     "consolidated net tangible assets" means, as of any date of determination,
the total amount of 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 our consolidated balance sheet and that of our
subsidiaries, 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:

          (1) consolidated current liabilities;

          (2) minority interests in our restricted subsidiaries held by a third
     person or another restricted subsidiary;

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

          (4) 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;

          (5) 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;

          (6) treasury stock; and

                                        20
<PAGE>

          (7) 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 that obligation is not reflected in consolidated
     current liabilities;

     "indebtedness" of any person means, without duplication:

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

          (2) all capitalized lease obligations of that person;

          (3) 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 (1) and
     (2) above, entered into in the ordinary course of business of that person
     to the extent the 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;

          (4) all obligations of the type referred to in clauses (1) through (3)
     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

          (5) all obligations of the type referred to in clauses (1) through (4)
     above of other persons secured by any lien on any property or asset of that
     person whether or not the 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 that date of all
obligations described above and, with respect to any contingent obligations at
that 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 the obligation;

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

     "preferred stock," as applied to the capital stock of any corporation,
means capital stock of any class or classes, however designated, which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of the corporation,
over shares of capital stock of any other class of the 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 a person's subsidiary 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 a person and a
wholly-owned subsidiary of the person or between the 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 indebtedness, unless in the instrument creating
or evidencing the indebtedness or pursuant to which the indebtedness is
outstanding it is specifically stated, at or prior to the time the person
becomes liable in respect thereof, that any indebtedness or deferral, renewal,
extension or refunding of indebtedness is not senior indebtedness;

     "subordinated security" means any security issued under an indenture which
is designated as a subordinated debt security; and

                                        21
<PAGE>

     "unrestricted subsidiary" means (1) 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 (2) 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 the 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 the consolidated balance sheet of the
person 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 indenture shall have occurred and be continuing. Any
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 indenture, we shall not, and shall not permit any of
our 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:

          (1) (a) 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

          (b) liens incurred by any restricted subsidiary that does not own,
     directly or indirectly, at the time of the original incurrence of the lien
     under this clause (b) 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 the
     original incurrence of the 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 the
     original incurrence of the lien, provided, however, that the indebtedness
     secured by the 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;

          (2) 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;

          (3) liens on property, assets or shares of stock of a person at the
     time that person becomes a subsidiary of ours; provided, however, that the
     lien may not extend to any other property or assets owned by us or any of
     its restricted subsidiaries;

          (4) liens on property or assets existing at the time that we or one of
     our subsidiaries acquires the property or asset, including any acquisition
     by means of a merger or consolidation with or into we or one of our
     subsidiaries; provided, however, that the 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 us or any of our restricted subsidiaries;

                                        22
<PAGE>

          (5) liens securing indebtedness or other obligations of one of our
     subsidiaries that is owing to us or any of our restricted subsidiaries, or
     liens securing our indebtedness or other obligations that are owing to one
     of our subsidiaries;

          (6) liens incurred on assets that are the subject of a capitalized
     lease obligation to which we or any of our subsidiaries is a party, which
     shall include liens on the stock or other ownership interest in one or more
     of our restricted subsidiaries, leasing assets;

          (7) 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 (1), (2), (3), (4) or (6) above; provided,
     however, that (a) the 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 (b) the amount of
     indebtedness secured by the 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

          (8) liens by which the debt securities are secured equally and ratably
     with other indebtedness pursuant to this covenant.

     However, we and any of our restricted subsidiaries may incur other liens to
secure indebtedness as long as the sum of:

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

     - the attributable debt with respect to all sale/leaseback transactions
       entered into pursuant to clause (1) under the heading "Limitation on
       Liens" and described in the indenture under the covenant "Limitation on
       Sale/Leaseback Transactions";

does not exceed 15% of consolidated net tangible assets as determined based on
our consolidated balance sheet as of the end of the most recent fiscal quarter
for which financial statements are available.

MODIFICATION AND WAIVER

     We may amend or supplement the indenture if the holders of a majority in
principal amount of the notes consent to it. Without the consent of the holder
of each note affected, however, no modification may:

     - reduce the amount of notes whose holders must consent to an amendment,
       supplement or waiver;

     - reduce the rate of interest or change the time for payment of interest on
       the notes;

     - reduce the issue price of the notes or change its stated maturity;

     - make any change in any repurchase right to the detriment of the holder;

     - make payments on the notes payable in currency or consideration other
       than as originally stated in the notes;

     - impair the holder's right to receive payment of principal and interest on
       the notes or to institute suit for the enforcement of any payment on the
       notes;

     - make any change in the percentage of principal amount of notes necessary
       to waive compliance with some provisions of the indenture or to make any
       change in this provision for modification; or

     - waive a continuing default or event of default regarding any payment on
       the notes.

                                        23
<PAGE>

     We may amend or supplement the indenture or waive any provision of it
without the consent of any holders of notes in some circumstances, including:

     - to cure any ambiguity, omission, defect or inconsistency;

     - to provide for the assumption of our obligations under the indenture by a
       successor upon any merger, consolidation or asset transfer permitted
       under the indenture;

     - to provide for uncertificated notes in addition to or in place of
       certificated notes or to provide for bearer notes;

     - to provide any security for or guarantees of the notes;

     - to comply with any requirement to effect or maintain the qualification of
       the indenture under the Trust Indenture Act of 1939, as amended;

     - to add covenants that would benefit the holders of notes or to surrender
       any rights we have under the indenture; or

     - to make any change that does not adversely affect the rights of any
       holder of the notes, including, without limitation, changing any payment
       record dates as necessary to conform to the then current market practice.

     The holders of a majority in principal amount of the outstanding notes may
waive any existing or past default or event of default. Those holders may not,
however, waive any default or event of default in any payment of principal or
interest on any note or compliance with a provision that cannot be amended or
supplemented without the consent of each holder affected.

REGISTRATION RIGHTS

     We entered into a registration rights agreement with Deutsche Bank. In the
registration rights agreement, we agreed, for the benefit of the holders of the
notes and the shares of our common stock issuable upon conversion of the notes
(together, the "Registrable Securities") that we would, at our expense:

     - file with the SEC, within 100 days after the date the notes were
       originally issued, a shelf registration statement covering resales of the
       Registrable Securities;

     - use our best efforts to cause the shelf registration statement to be
       declared effective under the Securities Act within 180 days after the
       date the notes were originally issued, subject to our right to postpone
       having the shelf registration statement declared effective for an
       additional 90 days in limited circumstances; and

     - use our best efforts to keep effective the shelf registration statement
       until two years after the date the notes are issued or, if earlier, until
       there are no outstanding Registrable Securities (the "Effectiveness
       Period").

     The registration statement of which this prospectus is a part was filed by
us in satisfaction of our obligation to do so pursuant to the registration
rights agreement.

     However, we may suspend the use of the prospectus that is part of the shelf
registration statement in connection with the sales of Registrable Securities
for a period not to exceed 30 days in any 90-day period or 90 days in any
12-month period for reasons relating to the acquisition or divestiture of
assets, pending corporate developments, and similar events. We have provided to
each holder of Registrable Securities copies of the prospectus that is a part of
the shelf registration statement, have notified each holder when the shelf
registration statement became effective and have taken other actions required to
permit public resales of the Registrable Securities.

                                        24
<PAGE>

     Additional interest ("Liquidated Damages") will accrue on the notes, or on
the shares of our common stock into which any notes have been converted, if any
of the following events (each a "Registration Default") occur:

     - on or prior to 180 days following the date the notes were originally
       issued, a shelf registration statement filed with the SEC is not declared
       effective; or

     - following the effectiveness of the shelf registration statement, the
       shelf registration statement:

             (1) ceases to be effective before the earlier of two years from the
        effectiveness date, the sale of all securities registered under the
        shelf registration statement or the expiration of the applicable period
        under Rule 144(k) of the Securities Act; or

             (2) the shelf registration statement ceases to be reusable,
        including if the use of the prospectus is suspended for a period longer
        than the time permitted, in connection with the resale of the
        Registrable Securities due to specified circumstances, both subject to
        exceptions provided in the Registration rights agreement.

     In that case, Liquidated Damages will accrue on the Registrable Securities
from and including the day following the Registration Default to but excluding
the day on which the Registration Default has been cured. Liquidated Damages
will be paid semi-annually in arrears, with the first semi-annual payment due on
the first interest payment date following the date of a Registration Default.
Liquidated Damages will accrue on the principal amount of the notes at a rate of
0.50% per annum of the principal amount of the notes from and including the date
on which any Registration Default shall occur to but excluding the date on which
all Registration Defaults have been cured. If a holder has converted some or all
of its notes into shares of our common stock, the holder will be entitled to
receive equivalent amounts based on the principal amount of the notes converted.

     Pursuant to our obligations in the registration rights agreement, we have
caused the shares of our common stock issuable upon conversion of the notes to
be listed on the New York Stock Exchange.

     This summary of provisions of the registration rights agreement may not
contain all the information important to you. You may request from us a copy of
the registration rights agreement.

CALCULATIONS IN RESPECT OF NOTES

     We will be responsible for making all calculations called for under the
notes. These calculations include, but are not limited to, determinations of the
market prices of the notes and shares of our common stock and accrued interest
payable on the notes. We will make all these calculations in good faith and,
absent manifest error, our calculations will be final and binding on holders of
notes. We will provide a schedule of our calculations to the trustee, and the
trustee is entitled to rely upon the accuracy of our calculations without
independent verification. The trustee will forward our calculations to any
holder of notes upon the request of that holder.

TRUSTEE

     Wilmington Trust Company will initially act as trustee, paying agent and
conversion agent for the notes. 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,

     - the indenture with respect to other series of securities issued under it,
       as supplemented by a supplemental indenture dated as of September 28,
       2000, and

     - indentures with Calpine's subsidiaries, Calpine Canada Energy Finance ULC
       and Calpine Canada Energy Finance II ULC, pursuant to which Calpine has
       guaranteed senior notes issued by these subsidiaries.

                                        25
<PAGE>

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

     If an event of default occurs and is continuing, the trustee will be
required to use the degree of care and skill of a prudent man under the
circumstances in the conduct of his own affairs. The trustee will become
obligated to exercise any of its powers under the indenture at the request of
any of the holders of any notes only after those holders have offered the
trustee indemnity reasonably satisfactory to it.

     If the trustee becomes one of our creditors, it will be subject to
limitations in the indenture on its rights to obtain payment of claims or to
realize on some property received for any claim, as security or otherwise. The
trustee is permitted to engage in other transactions with us. If, however, it
acquires any conflicting interest, it must eliminate that conflict or resign.

FORM, EXCHANGE, REGISTRATION AND TRANSFER

     We issued the notes in registered form, without interest coupons. We will
not charge a service charge for any registration of transfer or exchange of the
notes. We may, however, require the payment of any tax or other governmental
charge payable for that registration.

     Notes are exchangeable for other notes, for the same total principal amount
and for the same terms but in different authorized denominations in accordance
with the indenture. Holders may present notes for registration of transfer at
the office of the security registrar or any transfer agent we designate. The
security registrar or transfer agent will effect the transfer or exchange when
it is satisfied with the documents of title and identity of the person making
the request.

     We have appointed the trustee as security registrar for the notes. We may
at any time rescind that designation or approve a change in the location through
which any registrar acts. We are required to maintain an office or agency for
transfers and exchanges in each place of payment. We may at any time designate
additional registrars for the notes.

PAYMENT AND PAYING AGENTS

     Payments on the notes will be made in U.S. dollars at the office of the
trustee. At our option, however, we may make payments by check mailed to the
holder's registered address or, with respect to global notes, by wire transfer.
We will make interest payments to the person in whose name the notes are
registered at the close of business on the regular record date for the interest
payment.

     The trustee will be designated as our paying agent for payments on notes.
We may at any time designate additional paying agents or rescind the designation
of any paying agent or approve a change in the office through which any paying
agent acts.

     Subject to the requirements of any applicable abandoned property laws, the
trustee and paying agent shall pay to us upon written request any money held by
them for payments on the notes that remain unclaimed for two years after the
date upon which that payment has become due. After payment to us, holders
entitled to the money must look to us for payment. In that case, all liability
of the trustee or paying agent with respect to that money will cease.

NOTICES

     Except as otherwise described in this prospectus, notice to registered
holders of the notes will be given by mail to the holders at the addresses as
they appear in the security register. Notices will be deemed to have been given
on the date of mailing.

REPLACEMENT OF NOTES

     We will replace any notes that become mutilated, destroyed, stolen or lost
at the expense of the holder upon delivery to the trustee of the mutilated notes
or evidence of the loss, theft or destruction satisfactory to us and the
trustee. In the case of lost, stolen or destroyed notes, indemnity satisfactory
to
                                        26
<PAGE>

the trustee and us may be required at the expense of the holder of the notes
before a replacement note will be issued.

PAYMENT OF STAMP AND OTHER TAXES

     We will pay all stamp and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or taxing authority thereof
or therein with respect to the issuance of the notes. We will not be required to
make any payment with respect to any other tax, assessment or governmental
charge imposed by any government or any political subdivision thereof or taxing
authority thereof or therein.

BOOK-ENTRY SYSTEM

     The notes are represented by several global securities. Each global
security is deposited with, or on behalf of, DTC and registered in the name of a
nominee of DTC. Except under circumstances described below, the notes will not
be issued in definitive form.

     Upon the issuance of a global security, DTC will credit on its book-entry
registration and transfer system the accounts of persons designated by the
underwriter with the respective principal amounts of the notes represented by
the global security. Ownership of beneficial interests in a global security will
be limited to persons that have accounts with DTC or its nominee, known as
participants, or persons that may hold interests through participants. Ownership
of beneficial interests in a global security will be shown on, and the transfer
of that ownership will be effected only through, records maintained by DTC or
its nominee with respect to interests of persons other than participants. The
laws of some states require that some purchasers of securities take physical
delivery of the securities in definitive form. These limits and laws may impair
the ability to transfer beneficial interests in a global security.

     So long as DTC or its nominee is the registered owner of a global security,
DTC or its nominee, as the case may be, will be considered the sole owner or
holder of the notes represented by that global security for all purposes under
the indenture. Except as provided below, owners of beneficial interests in a
global security will not be entitled to have notes represented by that global
security registered in their names, will not receive or be entitled to receive
physical delivery of notes in definitive form and will not be considered the
owners or holders thereof under the indenture. Principal and interest payments,
if any, on notes registered in the name of DTC or its nominee will be made to
DTC or its nominee, as the case may be, as the registered owner of the relevant
global security. Neither Calpine, the trustee, any paying agent nor the
registrar for the notes will have any responsibility or liability for any aspect
of the records relating to, or payments made on account of beneficial interests
in, a global security or for maintaining, supervising or reviewing any records
relating to beneficial interests.

     We expect that DTC or its nominee, upon receipt of any payment of principal
or interest, if any, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of the relevant global security as shown on the records of
DTC or its nominee. We also expect that payments by participants to owners of
beneficial interests in a global security held through these participants will
be governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of the participants.

     If DTC is at any time unwilling or unable to continue as a depositary and a
successor depositary is not appointed by us within 90 days, we will issue notes
in definitive form in exchange for each entire global security. In addition, we
may at any time and in our sole discretion determine not to have notes
represented by global securities, in which case we will issue notes in
definitive form in exchange for each entire global security relating to the
notes. If we make this determination, an owner of a beneficial interest in a
global security will be entitled to physical delivery in definitive form of
notes represented by the global security equal in principal amount to the
owner's beneficial interest and to have the notes registered in its name. Notes
so issued in definitive form will be issued as registered notes in denominations
of $1,000 and multiples thereof, unless otherwise specified by us.
                                        27
<PAGE>

                          DESCRIPTION OF CAPITAL STOCK

     Our 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
our amended and restated 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.

COMMON STOCK

     The holders of our common stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Subject to preferences that may be
applicable to any of our outstanding preferred stock, the holders of our common
stock are entitled to receive ratably 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 our common stock are entitled to share ratably in all assets
remaining after payment of liabilities, subject to prior liquidation rights of
our preferred stock, if any, then outstanding. Our common stock has no
preemptive or conversion rights or other subscription rights. There are no
redemption or sinking fund provisions applicable to our common stock. Pursuant
to a rights agreement entered into in June of 1997, our shares of common stock
outstanding prior to the occurrence of events specified in the rights agreement
have 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."

DIVIDEND POLICY

     We have not declared any cash dividends on our common stock during the past
two fiscal years. We do not anticipate paying any cash dividends on our 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 some 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 other factors as the board of
directors may deem relevant.

PREFERRED STOCK

     As of [          ], 2002, there was one share of our preferred stock
outstanding Our board of directors has the authority, without further vote or
action by the stockholders, to issue from time to time up to 10,000,000 shares
of our 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 our undesignated preferred stock,
including without limitation dividend rights, if any, voting rights, if any, and
liquidation and conversion rights, if any. Our board of directors has the
authority to fix the number of shares constituting any series and the
designations of those series without any further vote or action by the
stockholders. Our board of directors, without stockholder approval, can issue
our preferred stock with voting and conversion rights which could adversely
affect the voting power of the holders of our common stock. The issuance of our
preferred stock may have the effect of delaying, deferring or preventing a
change in control of our company, or could delay or prevent a transaction that
might otherwise give our stockholders an opportunity to realize a premium over
the then prevailing market price of our common stock.

     Our 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 our board of directors on June 5, 1997,
which we amended on September 19, 2001. As of [          ], 2002, no shares of
this 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 Law" below.

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<PAGE>

     In connection with the business combination with Encal Energy Ltd., a
series of our preferred stock, consisting of one share, was designated as
special voting preferred stock, having a par value of $.001 and a liquidation
preference of $.001. Except as otherwise required by law or our certificate of
incorporation, the one share of our 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
exchangeable shares issued by Calpine's wholly-owned subsidiary from time to
time and not owned by us or any entity controlled by us. The holders of our
common stock and the holder of the share of our special voting preferred stock
will vote together as a single class on all matters on which holders of our
common stock are eligible to vote. In the event of our liquidation, dissolution
or winding-up, all outstanding exchangeable shares will automatically be
exchanged for shares of our common stock, and the holder of our special voting
preferred stock will not be entitled to receive any assets available for
distribution to our stockholders. The holder of the share of special voting
preferred stock will not be entitled to receive dividends. The share of our
special voting preferred stock was issued to a Canadian trust company, as
trustee under a voting and exchange trust agreement among us, Calpine Canada
Holdings Ltd. and the trustee. In the event that the one share of our special
voting preferred stock has no votes attached to it because there are no
exchangeable shares outstanding not owned by us or an entity controlled by us,
the share of our special voting preferred stock will be canceled.

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

CERTIFICATE OF INCORPORATION AND BYLAWS

     Our amended and restated certificate of incorporation and bylaws provide
that our 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 our capital stock entitled to vote. 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 some business combinations require the affirmative vote of the holders of
two-thirds of the shares of our 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. Our certificate of incorporation provides that a special
meeting of stockholders may be called only by the chairman of our board of
directors or by the chairman or secretary upon the written request of a majority
of the total number of directors we would have if there were no vacancies on our
board of directors. These provisions of the certificate of incorporation and
bylaws could discourage potential acquisition proposals and could delay or
prevent a change in control of our company. These provisions are intended to
enhance the likelihood of continuity and stability in the composition of the
board of directors and in the policies formulated by the board of directors and
to discourage some types of transactions that may involve an actual or
threatened change of control of our company. These provisions are designed to
reduce our vulnerability to an unsolicited acquisition proposal. The provisions
also are intended to discourage tactics that may be used in proxy fights.
However, these provisions could have the effect of discouraging others from
making tender offers for our shares and, as a consequence, they also may inhibit
fluctuations in the market price of our shares that could result from actual or
rumored takeover attempts. These provisions also may have the effect of
preventing changes in our management.

RIGHTS PLAN

     On June 5, 1997, we adopted a stockholders' rights plan to strengthen our
ability to protect our stockholders. The rights plan was amended on September
19, 2001. 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, we declared a dividend of one
preferred share purchase right for each outstanding share of our 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 our common stock that shall
become outstanding thereafter until the rights become exercisable or they expire
as described below. Each right

                                        29
<PAGE>

initially represents a contingent right to purchase, under specific
circumstances, one one-thousandth of a share, called a "unit," of our Series A
Participating Preferred Stock, par value $.001 per share, at a price of $140.00
per unit, subject to adjustment. The rights will become exercisable and trade
independently from our common stock upon the public announcement of the
acquisition by a person or group of 15% or more of our common stock, or ten days
after commencement of a tender or exchange offer that would result in the
acquisition of 15% or more of our 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 our liquidation, each share of the
participating preferred stock will be entitled to any payment made per share of
common stock.

     If we are acquired in a merger or other business combination transaction
after a person or group has acquired 15% or more of our 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 our 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 our participating preferred stock or shares of our
common stock having a market value of twice the right's exercise price.

     The rights remain exercisable for up to 90 days following a triggering
event, such as a person acquiring 15% or more of our common stock. The rights
expire on June 18, 2007, unless redeemed earlier by us. We can redeem the rights
at a price of $.01 per right at any time before the rights become exercisable,
and thereafter only in limited circumstances.

DELAWARE ANTI-TAKEOVER STATUTE

     Calpine is subject to Section 203 of the Delaware General Corporation Law
("Section 203"), which, subject to 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 the stockholder became an
interested stockholder, unless: (1) prior to that 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 (a) by persons who are directors and also
officers and (b) 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
that 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 or
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 or indirect majority-owned subsidiaries
involving the interested stockholder; (3) subject to exceptions, any transaction
that results in the issuance or transfer by the corporation of any stock of the
corporation or any of its direct or 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 or 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 that entity or
person.

                                        30
<PAGE>

             MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

     The following is a summary of some of the material United States federal
income tax consequences of the ownership and disposition of the notes and shares
of common stock into which the notes are convertible (the "securities"). Unless
otherwise stated, this summary deals only with U.S. holders that hold the notes
and any shares of common stock into which the notes are converted as capital
assets.

     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, some
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 advisors 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 (1) persons that have a functional currency
other than the U.S. dollar, (2) some United States expatriates or (3)
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 or differing
interpretations, 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 U.S. HOLDERS

THE NOTES

     This subsection describes the material United States federal income tax
consequences of owning, converting and disposing of the notes. The discussion
regarding United States federal income tax laws assumes that transfers of the
notes and payments thereon will be made in accordance with the applicable
indenture and deposit agreement.

Interest Income

     Payments of interest on the notes 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).

Notes Purchased at a Market Discount

     A holder will be considered to have purchased a note at a "market discount"
if the holder's adjusted tax basis in the note is less than its stated
redemption price at maturity unless such market discount is a

                                        31
<PAGE>

de minimis amount (generally up to 1/4 of 1 percent of the stated redemption
price on the purchase date multiplied by the number of complete years to
maturity remaining as of such date). In general, any partial payment of
principal on, or gain recognized on the maturity or disposition of, the note
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 note may elect to include market discount in income currently over the life
of the note. 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 note 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 Note in an amount not exceeding the accrued
market discount on such Note until the maturity or disposition of the Note.

Notes Purchased at a Premium

     A holder will be considered to have purchased a note at a premium if the
holder's adjusted tax basis in the note immediately after the purchase is
greater than the amount payable at maturity. 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 note will be reduced by the amount of the amortizable bond
premium allocable (based on the note'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.

Conversion of Notes into Common Stock

     A U.S. holder will generally not recognize gain or loss upon the conversion
of a note into common stock (except with respect to cash received in lieu of a
fractional share). A U.S. holder's tax basis in the common stock received on
conversion of a note will be the same as the U.S. holder's adjusted tax basis in
the note at the time of conversion (exclusive of any tax basis allocable to a
fractional share). The holding period for the common stock received on
conversion will include the holding period of the converted note. Cash received
in lieu of a fractional share upon conversion of a note will be treated as a
payment in exchange for the fractional share. Accordingly, if the common stock
is a capital asset in the hands of the U.S. holder, the receipt of cash in lieu
of a fractional share will generally result in capital gain or loss, if any,
measured by the difference between the cash received for the fractional share
and the U.S. holder's tax basis in the fractional share.

Adjustment of Conversion Rate

     If at any time we make a distribution of property to shareholders that
would be taxable as a dividend for United States federal income tax purposes
(for example, distributions of evidences of indebtedness or assets, but
generally not stock dividends or rights to subscribe for common stock) and,
pursuant to the anti-dilution provisions of the indenture, the conversion rate
of the notes is increased, such increase may be deemed to be the payment of a
taxable dividend to a U.S. holder of the notes to the extent of our current and
accumulated earnings and profits. If the conversion rate is increased at our
discretion or in other circumstances, such increase also may be deemed to be the
payment of a taxable dividend to the U.S. holder.

                                        32
<PAGE>

Repurchase for Common Stock

     A U.S. holder of the notes generally should not recognize gain or loss upon
a repurchase of the notes for our common stock pursuant to the repurchase right
described in "Description of Notes -- Repurchase Right" and "Description of
Notes -- Change in Control," except that ordinary income will be recognized to
the extent that a portion of the common stock is determined to constitute a
payment in respect of interest on the notes. A U.S. holder's basis in the common
stock received on repurchase of a note will be the same as the U.S. holder's tax
basis in the note at the time of repurchase (exclusive of any tax basis
allocable to a fractional share) and the holding period for the common stock
received on conversion will include the holding period of the repurchased note,
except that the portion, if any, of common stock received that constitutes
payment in respect of interest will have a tax basis equal to its fair market
value at the time of the repurchase and a new holding period commencing at the
time of the repurchase. Cash received in lieu of a fractional share upon
repurchase of a note will be treated as a payment in exchange for the fractional
share. Accordingly, if the common stock is a capital asset in the hands of the
U.S. holder, the receipt of cash in lieu of a fractional share will generally
result in capital gain or loss, if any, measured by the difference between the
cash received for the fractional share and the U.S. holder's tax basis in the
fractional share.

Sale, Exchange or Cash Repurchase of Notes

     A U.S. holder will generally recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange, repurchase for
cash or other disposition of the note and the holder's adjusted tax basis in
such note, except that ordinary income will be recognized to the extent that a
portion of the amount realized is attributable to market discount or accrued
interest not previously included in income. A holder's adjusted tax basis in the
note generally will be the initial purchase price paid therefore. In the case of
a holder other than a corporation, preferential tax rates may apply to gain
recognized on the sale of a note if such holder's holding period for such note
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 limited exceptions,
capital losses cannot be applied to offset ordinary income for United States
federal income tax purposes.

Information Reporting and Backup Withholding Tax

     In general, information reporting requirements will apply to payments of
principal and interest on the notes and payments of the proceeds of the sale of
the notes, and a backup withholding tax may apply to such payments if the holder
fails to comply with identification requirements. Backup withholding is
currently imposed at a rate of 30%, which rate is scheduled to be reduced in
future years. 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 COMMON STOCK

Dividends

     The amount of any distribution we make in respect of the 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 our
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 common 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 a specific holding period, taxable income, and other limitations.

                                        33
<PAGE>

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.

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 may apply to such payments if the holder
fails to comply with identification requirements. Backup withholding is
currently imposed at a rate of 30%, which rate is scheduled to be reduced in
future years. 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.

TAXATION OF NON-U.S. HOLDERS

THE NOTES

     The rules governing United States federal income taxation of a non-U.S.
holder of notes 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 notes, including
any reporting requirements.

Interest Income

     Generally, interest income of a non-U.S. holder that is not effectively
connected with a United States trade or business is 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 note 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 our stock entitled to vote; (2) the non-U.S. holder is not a controlled
foreign corporation that is related to us through stock ownership; (3) the
non-U.S. holder is not a bank which acquired the note 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 payor or the payor's agent, under penalties of perjury, that it is not a
United States person and provides its name, address, and 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 notes in such capacity, certifies to the payor or the
payor'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 payor or the payor'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 note through 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 income tax treaty otherwise
provides, a non-U.S. holder generally will be taxed with respect to interest in
the same manner as a U.S. holder if the interest is effectively connected with a
United States trade or business of the non-U.S. holder. Effectively connected

                                        34
<PAGE>

interest income received or accrued by a corporate non-U.S. holder may also,
under some 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 or the payor's
agent.

Conversion of Notes into Common Stock

     A non-U.S. holder's conversion of a note into common stock will generally
not be a taxable event except with respect to cash received in lieu of a
fractional share, which will be taxed as described below under "Sale, Exchange
or Cash Repurchase of Notes."

Adjustment of Conversion Rate

     Some adjustments in the conversion rate of the notes may be treated as a
taxable dividend to a non-U.S. holder. See "Taxation of U.S. Holders -- The
Notes -- Adjustment of Conversion Rate" above and "Taxation of Non U.S.
Holders -- The Common Stock -- Dividends" below.

Repurchase for Common Stock

     A non-U.S. holder of the notes generally should not recognize gain or loss
upon a repurchase of the notes for our common stock, except that ordinary income
will be recognized to the extent that a portion of the common stock is
determined to constitute a payment in respect of interest on the notes. Such
ordinary income will be taxable as described under "Interest Income" above.

Sale, Exchange or Cash Repurchase of Notes

     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,
repurchase for cash or other disposition of a note 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 some United States expatriates, or (4)
in the event that we are characterized as a United States real property holding
corporation and the non-U.S. holder does not qualify for exemptions (see
discussion below under "Foreign Investment in Real Property Tax Act").

Information Reporting and Backup Withholding Tax

     United States backup withholding tax will not apply to payments on the
notes to a non-U.S. holder if the statement described in clause (4) of "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 may apply with respect to interest payments on the notes,
in which event the amount of interest paid and tax withheld (if any) with
respect to each non-U.S. holder will be reported annually to the Internal
Revenue Service. Information reporting requirements and backup withholding tax
will not apply to any payment of the proceeds of the sale of notes effected
outside the United States by a foreign office of a "broker" as defined in
applicable Treasury regulations (absent actual knowledge that the payee is a
United States person), 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 some 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
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

                                        35
<PAGE>

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 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 notes provides the statement
described in clause (4) of "Interest Income" or otherwise establishes an
exemption.

THE 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 we make with respect to the common stock that are treated as
dividends paid, as described above under "U.S. Holders of common stock --
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 or the payor's
agent.

     A non-U.S. holder who wishes to claim the benefit of an applicable income
tax treaty is required to satisfy 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 Revenue Code applicable to some United States
expatriates or (4) in the event that we are characterized as a United States
real property holding corporation and the non-U.S. holder does not qualify for
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 U.S. holder. 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 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

                                        36
<PAGE>

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 U.S. holder 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 some 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 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 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 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 common stock is regularly traded on an established securities
market, an exemption should apply to the notes and the common stock except (1)
in the case of notes, if the notes are or become regularly traded, with respect
to a non-U.S. holder that owns more than 5% of the notes, and (2) otherwise, and
in the case of the common stock, with respect to a non-U.S. holder whose
beneficial and/or constructive ownership of common stock exceeds 5% of the total
fair market value of the common stock.

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

     THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF THE 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.

                                        37
<PAGE>

                                 LEGAL MATTERS

     The validity of the notes and any shares of common stock issuable upon
conversion of the notes offered hereby will be passed upon for us by Covington &
Burling, New York, New York.

                              INDEPENDENT AUDITORS

     Our audited financial statements incorporated by reference in this
prospectus and elsewhere in the registration statement of which this prospectus
is a part have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included in this prospectus in reliance upon the authority of said firm as
experts in giving said reports. The report of Ernst and Young LLP, independent
public accountants, with respect to the audited financial statements of Encal
Energy, Ltd., which is incorporated in this prospectus by reference to our
Annual Report on Form 10-K for the year ended December 31, 2001, is included
herein in reliance upon the authority of said firm as experts in giving said
report.

                                        38
<PAGE>

                                    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 in
connection with resales of the securities being registered. All amounts are
estimates subject to future contingencies except the SEC registration statement
filing fee.

<Table>
<S>                                                           <C>
SEC Registration Statement Filing Fee.......................  $110,400
Legal Fees and Expenses.....................................  $ 50,000
Accounting Fees and Expenses................................  $ 10,000
Printing Fees...............................................  $ 40,000
Miscellaneous...............................................  $  4,600
                                                              --------
  Total.....................................................  $215,000
                                                              ========
</Table>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     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 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
(1) for any breach of the director's duty of loyalty to Calpine or its
stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) under Section 174 of
the Delaware Law providing for liability of directors for unlawful payment of
dividends or unlawful stock purchases or redemptions, or (4) 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 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

                                       II-1
<PAGE>

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.

     Reference is made to Section 5 of the registration rights agreement
incorporated by reference as Exhibit 4.2 hereto for a description of the
indemnification arrangements in connection with the registration of the notes
under the Securities Act.

ITEM 16. EXHIBITS

<Table>
<Caption>
    EXHIBIT
    NUMBER                             DESCRIPTION
    -------                            -----------
    <C>        <S>
      4.1      Amended and Restated Rights Agreement, dated as of September
               19, 2001, between Calpine Corporation and Equiserve Trust
               Company, N.A., as Rights Agent(a)
     *4.2      Registration Rights Agreement, dated December 26, 2001,
               between Calpine Corporation and the Initial Purchaser
      4.3      Indenture between the Company and Wilmington Trust Company,
               including form of Senior Note(b)
     *4.4      Certificate of Calpine Directors to Trustee under the Trust
               Indenture
     +5.1      Opinion of Covington & Burling
     12.1      Statement Regarding Computation of Ratios(c)
    *23.1      Consent of Arthur Andersen LLP, independent public
               accountants
    *23.2      Consent of Ernst & Young LLP, independent chartered
               accountants
    +23.3      Consent of Covington & Burling (included in opinion filed as
               exhibit 5.1)
     24.1      Power of Attorney (as set forth on the signature pages of
               this Registration Statement)
    *25.1      Statement of Eligibility of Trustee on Form T-1
</Table>

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

 +  To be filed.

(a) Incorporated by reference to our Registration Statement on Form 8-A/A filed
    with the SEC on September 28, 2001.

(b) Incorporated by reference to our Registration Statement on Form S-3 filed
    with the SEC on January 17, 2002.

(c) Incorporated by reference to our Annual Report on Form 10-K filed with the
    SEC on March 29, 2002.

ITEM 17. UNDERTAKINGS

     The undersigned registrant hereby undertakes:

          (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 the volume of the securities offered (if the
        total dollar value of securities offered would not exceed that which

                                       II-2
<PAGE>

        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; and

             (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;

     provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
     registration statement is on Form S-3, Form S-8 or Form F-3, and the
     information required to be included in a post-effective amendment by those
     paragraphs is contained in periodic reports filed with or furnished to the
     Commission by the registrant pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934 that are incorporated by reference 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.

     The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant'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
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has 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 registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant 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 registrant 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 them is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.

                                       II-3
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the registrant
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 on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of San Jose, State of
California, on this fourth day of April, 2002.

                                          CALPINE CORPORATION

                                          By:      /s/ ROBERT D. KELLY
                                            ------------------------------------
                                                      Robert D. Kelly
                                                  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, Ann B. Curtis and Robert D.
Kelly, 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 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 (including registration statements filed
pursuant to Rule 462(b)), 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 Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities and on the dates indicated.

<Table>
<Caption>
                      SIGNATURE                                      TITLE                    DATE
                      ---------                                      -----                    ----
<S>                                                    <C>                                <C>
                /s/ PETER CARTWRIGHT                      Chairman, President, Chief      April 4, 2002
-----------------------------------------------------   Executive Officer and Director
                  Peter Cartwright

                  /s/ ANN B. CURTIS                     Executive Vice President, Vice    April 4, 2002
-----------------------------------------------------        Chairman and Director
                    Ann B. Curtis

                 /s/ ROBERT D. KELLY                     Executive Vice President and     April 4, 2002
-----------------------------------------------------       Chief Financial Officer
                   Robert D. Kelly                       (Principal Financial Officer)

              /s/ CHARLES B. CLARK, JR.                    Senior Vice President and      April 4, 2002
-----------------------------------------------------   Corporate Controller (Principal
                Charles B. Clark, Jr.                         Accounting Officer)
</Table>

                                       II-4
<PAGE>

<Table>
<Caption>
                      SIGNATURE                                      TITLE                    DATE
                      ---------                                      -----                    ----
<S>                                                    <C>                                <C>
                 /s/ KENNETH T. DERR                               Director               April 4, 2002
-----------------------------------------------------
                   Kenneth T. Derr

                /s/ JEFFREY E. GARTEN                              Director               April 4, 2002
-----------------------------------------------------
                  Jeffrey E. Garten

                /s/ GERALD GREENWALD                               Director               April 4, 2002
-----------------------------------------------------
                  Gerald Greenwald

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

                                                                   Director
-----------------------------------------------------
                 George J. Stathakis

                                                                   Director
-----------------------------------------------------
                   John O. Wilson
</Table>

                                       II-5
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT
NUMBER                            DESCRIPTION
-------                           -----------
<C>       <S>
   4.2    Registration Rights Agreement, dated December 26, 2001,
          between Calpine Corporation and the Initial Purchaser
   4.4    Certificate of Calpine Directors to Trustee under the Trust
          Indenture.
  23.1    Consent of Arthur Andersen LLP, independent public
          accountants
  23.2    Consent of Ernst & Young LLP, independent chartered
          accountants
  24.1    Power of Attorney (as set forth on the signature pages of
          this Registration Statement)
  25.1    Statement of Eligibility of Trustee on Form T-1
</Table>

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

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>3
<FILENAME>f80342ex4-2.txt
<DESCRIPTION>EXHIBIT 4.2
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.2



                              Calpine Corporation

                      4% Convertible Senior Notes due 2006



                         REGISTRATION RIGHTS AGREEMENT
                         -----------------------------



                                                             December 26, 2001



Deutsche Bank Alex. Brown Inc.
31 West 52nd Street
New York, New York, 10019

Dear Sirs:

     Calpine Corporation, a Delaware corporation (the "Company"), proposes to
issue and sell (the "Initial Placement") to Deutsche Bank Alex. Brown Inc. (the
"Purchaser") upon the terms set forth in the Purchase Agreement dated December
20, 2001 (the "Purchase Agreement"), among the Purchaser and the Company, up to
$1,000,000,000 (or up to $1,200,000,000 to the extent the option granted to
purchase additional Securities (as defined below) by the Company to the
Purchaser pursuant to the Purchase Agreement is exercised in full) of its 4%
Convertible Senior Notes Due 2006 (the "Securities"). As an inducement to the
Purchaser to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Purchaser thereunder, the Company agrees
with the Purchaser for the benefit of the Holders (as defined herein), as
follows:

     1.   DEFINITIONS. Capitalized terms used herein without definition shall
have the meanings ascribed to them in the Purchase Agreement or, if not defined
therein, in the Offering Circular dated December 20, 2001. As used in this
Agreement, the following capitalized defined terms shall have the following
meanings:

          "Act" or "Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
<PAGE>
          "Affiliate" of any specified person means any other person which,
directly or indirectly, is control of, controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; the terms "controlling" and "controlled" have meanings correlative
to the foregoing.

          "Applicable Rate" means the rate at which the Securities accrue
interest.

          "Business Day" means any day other than (i) a Saturday or Sunday,
(ii) a day on which banking institutions in The City of New York are authorized
or required by law to close or (iii) a day on which the corporate trust office
of the Trustee is closed for business.

          "Closing Date" has the meaning given such term in the Purchase
Agreement.

          "Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.

          "Common Stock" means the company's common stock, par value $.001 per
share.

          "Company" has the meaning set forth in the first paragraph of this
Agreement.

          "Effectiveness Deadline" means the 180th day following  the Closing
Date.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

          "Filing Deadline" means the 100th day following the Closing Date.

          "Holder" and "Holders" each mean any person that is the record owner
of Registrable securities (and includes any person that has a beneficial
interest in any Registrable Security in book-entry form).

          "Indenture" means the Indenture, dated August 10, 2000, between the
Company and the Trustee, as amended and supplemented from time to time in
accordance with its terms.



                                       2
<PAGE>

          "Initial Placement" has the meaning set forth in the first paragraph
to this Agreement.

          "Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, as set forth in Section 6 hereof.

          "Notice and Questionnaire" means a Notice of Registration Statement
and Selling Securityholder Questionnaire in a form reasonably agreed to by the
Company and the Purchaser.

          "Person" means any individual, partnership, corporation, trust, or
unincorporated organization, or a governmental agency or political subdivision
thereof.

          "Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), with respect
to the terms of the offering of any portion of the Securities covered by such
Shelf Registration Statement, as amended or supplemented by all amendments
(including post-effective amendments) and supplements to the Prospectus.

          "Purchase Agreement" has the meaning set forth in the first paragraph
to this Agreement.

          "Purchaser" has the meaning set forth in the first paragraph to this
Agreement.

          "Registrable Securities" has the meaning specified in the Indenture.

          "Registration Default" has the meaning given to such term in Section
7(a) hereof.

          "Securities" has the meaning set forth in the first paragraph to this
Agreement.

          "Shelf Registration" means a registration effected pursuant to
Section 2 hereof.

          "Shelf Registration Period" has the meaning set forth in Section 2(b)
hereof.

          "Shelf Registration Statement" shall mean a "shelf" registration
statement filed under the Securities Act on an appropriate form providing for
the registration of, and the sale on a continuous or delayed basis by the
Holders of, all of the Registrable Securities.



                                       3
<PAGE>
pursuant to Rule 415 under the Securities Act and/or any similar rule that may
be adopted by the Commission, filed by the Company pursuant to the provisions of
Section 2 of this Agreement, including the Prospectus contained therein, any
amendments and supplements to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statements.

           "Suspension Period" has the meaning set forth in Section 7(b) hereof.

           "Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as the same shall be amended from time to time.

           "Trustee" means Wilmington Trust Company, in its capacity as trustee
pursuant to the Indenture.

            "Underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.

      2.    SHELF REGISTRATION. (a) The Company shall as promptly as
practicable prepare and not later than the Filing Deadline, shall file with the
Commission a Shelf Registration Statement relating to the offer and sale of
the Registrable Securities by the Holders from time to time in accordance with
the methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement and, thereafter shall use its best efforts to cause such
Shelf Registration Statement to be declared effective under the Act as soon as
practicable, but in no event later than the Effectiveness Deadline; provided,
however, that the Company may, upon written notice to all Holders, postpone
having the Shelf Registration Statement declared effective for a reasonable
period not to exceed 90 days if the Company possesses material non-public
information, the disclosure of which would have a material adverse effect on
the Company and its subsidiaries taken as a whole provided, further, however,
that no Holder (other than the Purchaser) shall be entitled to have its
Registrable Securities held by it covered by such Shelf Registration Statement
unless such Holder agrees in writing to be bound by all the provisions of this
Agreement applicable to such Holder.

            (b)  The Company shall each use its best efforts:

                 (i) to keep the Shelf Registration Statements continuously
            effective in order to permit the Prospectus forming a part thereof
            to be lawfully delivered to the Holders until the earliest of (a)
            the sale of all Registrable Securities registered under the Shelf
            Registration Statement and (b) two years from the date (the
            "Effective Date") such Shelf Registration Statement is declared
            effective (or for such other period as shall be


                                       4


<PAGE>
           required by Rule 144(k) of the Act or any successor provision
           thereto), in any such case, such period being called the "Shelf
           Registration Period;" and

                     (ii)   during the Shelf Registration Period, promptly upon
           the request of any Holder of Registrable Securities, to take any
           action reasonably necessary to enable such Holder to use the
           Prospectus forming a part thereof for resales of Registrable
           Securities, and to identify such Holder as a selling securityholder;
           provided, however, that nothing in this subparagraph shall relieve
           such Holder of the obligation to return a completed and signed Notice
           and Questionnaire to the Company in accordance with Section 3(a)
           hereof.

           The Company shall be deemed not to have used its best efforts to keep
the Shelf Registration Statement effective during the Shelf Registration Period
if it voluntarily takes any action that would result in Holders of Registrable
Securities covered thereby not being able to offer and sell such Registrable
Securities during such period, unless such action is required by applicable law.

           (c)       The Company may suspend the use of the Prospectus for a
period not to exceed 30 days in any 90-day period or an aggregate of 90 days in
any 12-month period of the Board of Directors of the Company shall have
determined in good faith that because of valid business reasons (not including
the avoidance of the Company's obligations hereunder), including the acquisition
of divestiture of assets, pending corporate developments and similar events, it
is in the best interests of the Company to suspend such use, and prior to
suspending such use, the Company provides the Holders with written notice of
such suspension, which notice need not specify the nature of the event giving
rise to such suspension.

          (d)        Notwithstanding any provisions of this Agreement to the
contrary, the Company shall cause the Shelf Registration Statement and the
related Prospectus and any amendment or supplement thereto, as of the effective
date of the Shelf Registration Statement, amendment or supplement, (i) to comply
in all material respects with the applicable requirements of the Securities Act
and the rules and regulations of the Commission and (ii) not to contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.

     3.   REGISTRATION PROCEDURES. In connection with any Shelf Registration
Statement, the following provisions shall apply:

          (a)      (1) Not less than 30 calendar days prior to the Effective
Date of the Shelf Registration Statement, the Company shall mail the Notice and
Questionnaire to the Holders of Registrable Securities. No Holder shall be
entitled to be named as a selling

                                       5

<PAGE>
securityholder in the Shelf Registration Statement or have its Registrable
Securities included therein, and no Holder shall be entitled to use the
Prospectus forming a part thereof for resales of Registrable Securities at any
time, unless such Holder is an Electing Holder; provided, however, Holders of
Registrable Securities shall have at least 28 calendar days from the date on
which the Notice and Questionnaire is first mailed to such Holders to return a
completed and signed Notice and Questionnaire to the Company.

                     (ii)   After the Effective Date of the Shelf Registration
Statement and during the Shelf Registration Period, the Company shall, upon the
request of any Holder of Registrable Securities that is not then an Electing
Holder, promptly send a Notice and Questionnaire to such Holder. The Company
shall not be required to take any action to name such Holder as a selling
securityholder in the Shelf Registration Statement or to enable such Holder to
use the Prospectus forming a part thereof for resales of Registrable Securities
until such Holder has returned a completed and signed Notice and Questionnaire
to the Company.

                     (iii)  The term "Electing Holder" shall mean any Holder of
Registrable Securities that has returned a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a)(i) or 3(a)(ii)
hereof and has otherwise agreed to be bound by all the provisions of this
Agreement applicable to such Holder.

           (b)        The Company shall furnish to (i) the Purchaser and (ii)
any other Holders who so request, and its counsel and accountants, prior to the
filing thereof with the Commission, a copy of any shelf Registration Statement,
and each amendment thereof and each amendment or supplement, if any, to the
Prospectus included therein and shall each use its best efforts to reflect in
each such document, when so filed with the Commission, such comments as the
Purchaser and such other Holders reasonably may propose.

           (c)        The Company shall give written notice to the Purchaser
and the Holders:

                      (i)   when the Shelf Registration Statement and any
           amendment thereto has been filed with the Commission and when
           the Shelf Registration Statement or any post-effective amendment
           thereto has become effective.

                      (ii)  of any written request by the Commission for
           amendments or supplements to the Shelf Registration Statement
           or the Prospectus included therein or for additional information;

                      (iii) of the issuance by the Commission of any stop
           order suspending the effectiveness of the Shelf Registration
           Statement or the initiation of any proceeding for that purpose;


                                       6

<PAGE>
                (iv)   of the receipt by the Company of any notification with
           respect to the suspension of the qualification of the Securities
           included therein for sale in any state or the initiation or
           threatening of any proceeding for such purpose; and

                (v)    of the happening, during the Shelf Registration Period
           of any event that requires the making of any changes in the Shelf
           Registration Statement or the Prospectus so that, as of such date,
           the Registration Statement and the Prospectus do not contain an
           untrue statement of a material fact and do not omit to state a
           material fact required to be stated therein or necessary to make the
           statements therein (in the case of the Prospectus, in light of the
           circumstances under which they were made) not misleading (which
           advice shall be accompanied by an instruction to suspend the use of
           the Prospectus until the requisite changes have been made).

           (d)  The Company shall use its best efforts to prevent the issuance,
and if issued to obtain the withdrawal, of any order suspending the
effectiveness of any Shelf Registration Statement at the earliest possible time.

           (e)  The Company shall furnish to the Purchaser and each requesting
Holder included within the coverage of any Shelf Registration Statement, without
charge, at least one copy of such Shelf Registration Statement and any
post-effective amendment thereto (including, to the Purchaser or any such Holder
who so requests, any reports or other documents incorporated therein by
reference), including financial statements and schedules included therein, and,
if such Holder so requests, all exhibits (including those incorporated by
reference).

           (f)  The Company shall, during the Shelf Registration Period,
deliver to each Holder included within the coverage of any Shelf Registration
Statement, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) included in such Shelf Registration Statement and any
amendment or supplement thereto as such Holder may reasonably request; and the
Company consents to the use, in accordance with the terms of this Agreement of
the Prospectus or any amendment or supplement thereto by each of the selling
Holders of Registrable Securities in connection with the offering and sale of
the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto during the Shelf Registration Period.


           (g)  Prior to any offering of Registrable Securities pursuant to any
Shelf Registration Statement, the Company shall register or qualify, or shall
cooperate with the Holders of Registrable Securities included therein and their
respective counsel in connection with the registration or qualification of,
such Registrable Securities for offer and sale under the securities or blue sky
laws of such states as any such Holders reasonably request in writing and do
any and all other acts or things necessary or advisable to enable the offer and


                                       7

<PAGE>
sale in such states of the Registrable Securities covered by such Shelf
Registration Statement; provided, however, that the Company will not be required
to qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process or to taxation in any such jurisdiction where it is not then so subject.

           (h)    Unless the applicable Registrable Securities shall be in
book-entry form, the Company shall cooperate with the Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to any Shelf
Registration Statement free of any restrictive legends and in such permitted
denominations and registered in such names as Holders may request in connection
with the sale of Registrable Securities pursuant to such Shelf Registration
Statement.

           (i)    Upon the occurrence of any event contemplated by paragraphs
(ii) through (v) of Section 3(b) above (other than a request by the Commission
solely for additional information as referred to in Section 3(b)(ii) and unless
directed otherwise by the Commission), the Company shall promptly prepare and
file a post-effective amendment to any Shelf Registration Statement or an
amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to Holders or purchasers of the
Registrable Securities included therein, the Prospectus will not contain an
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, in the light
of the circumstances under which they were made, not misleading. If the Company
notifies the Purchaser or the Holders of the Securities in accordance with
paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the
Prospectus until the requisite changes to the Prospectus have been made, then
the Purchaser and the Holders of the Registrable Securities shall suspend use of
the Prospectus for such time.

           (j)    Not later than the effective date of any Shelf Registration
Statement hereunder, the Company shall provide a CUSIP number for the
Registrable Securities registered under such Shelf Registration Statement, and
provide the applicable Trustee with certificates for such Registrable
Securities, in a form eligible for deposit with The Depository Trust Company.

           (k)    The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its security holders (or otherwise provide in accordance with
Section 11(a) of the Securities Act) as soon as practicable after the
effective date of the applicable Shelf Registration Statement an earning
statement satisfying the provisions of Section 11(a) of the Securities Act,
but in no event later than 45 days after the end of a 12-month period (or 90
days, if such period is a fiscal year) beginning with the first month of the
Company's first fiscal quarter commencing


                                       8
<PAGE>
after the effective date of Registration Statement, which statement shall cover
such 12-month period.

           (l)    The Company shall cause the Indenture to be qualified under
the Trust Indenture Act in a timely manner and containing such changes, if any,
as shall be necessary for such qualification.  In the event that such
qualification would require the appointment of a new trustee under the
Indenture, the Company shall appoint a new trustee thereunder pursuant to the
applicable provisions of such agreement.

           (m)    The Company may require each Holder of Registrable Securities
to be sold pursuant to any Shelf Registration Statement as a condition to the
registration of such Holder's Registrable Securities thereunder to furnish to
the Company such information regarding the Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably require
for inclusion in such Shelf Registration Statement. Each Holder who offers and
sells Registrable Securities by means of the Shelf Registration Statement shall
do so in accordance with the terms thereof and the requirements of the
Securities Act.

           (n)    The Company shall, if requested, promptly incorporate in a
Prospectus supplement or post-effective amendment to a Shelf Registration
Statement, such information as the Managing Underwriters, if any, reasonably
agree should be included therein and to which the Company does not reasonably
object and shall make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after they are notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment.

           (o)    The Company shall enter into such customary agreements
(including underwriting agreements in customary form) to take all other
appropriate actions in order to expedite or facilitate the registration or the
disposition of the Registerable Securities, and connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures substantially identical to those set
forth in Section 5 hereof (or such other customary provisions and procedures
acceptable to the Managing Underwriters, if any) with respect to all parties to
be indemnified pursuant to Section 5 hereof.

           (p)    The Company shall (i) make reasonably available for inspection
by the Holders of Securities to be registered thereunder, any underwriter
participating in any disposition pursuant to such Shelf Registration Statement,
and any attorney, accountant or other agent retained by such Holders or any such
underwriter, all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries as shall be
requested in connection with the discharge of their due diligence obligations;
(ii) cause the Company's officers, directors, employees and independent public
accountants and the Trustee to supply at the Company's expense all relevant
information


                                       9
<PAGE>
reasonably requested by such Holders or any such underwriter, attorney,
accountant or agent in connection with any such Shelf Registration Statement as
is customary for similar due diligence examinations; provided, however, that any
information that is designated in writing by the Company in good faith as
confidential at the time of delivery of such information shall be kept
confidential by such Holders or any such underwriter, attorney, accountant or
agent, unless such disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the public generally
or through a third party without an accompanying obligation of confidentiality;
and provided further that the foregoing inspection and information gathering
shall be coordinated on behalf of the Holders and the other parties entitled
thereto by one counsel, who shall be Skadden Arps, Slate, Meagher & Flom LLP
unless another nationally-recognized law firm with specialization in securities
laws shall be chosen by the Company; (iii) make such representations and
warranties to the Holders of Securities registered thereunder and the
underwriters, if any, in form, substance and scope as are customarily made by
the issuers to underwriters in primary underwritten offerings and covering
matters as are customarily covered in representations and warranties requested
in primary underwritten offering including, but not limited to, those set forth
in the Purchase Agreement; (iv) obtain options of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the Managing Underwriters, if any) addressed to
each selling Holder and the underwriters, if any, thereof and dated, in the case
of the initial opinion, the effective date of such Shelf Registration Statement
(it being agreed that the matters to be covered by such Shelf Registration
Statement (it being agreed that the matters to be covered by such opinion shall
include, without limitation, the due incorporation and good standing of the
Company and its Subsidiaries; the due authorization, execution and delivery of
the relevant agreement of the type referred to in Section 3(n) hereof; the due
authorization, execution, authentication and issuance, and the validity and
enforceability, of the applicable Securities; absence of material legal or
governmental proceedings involving the Company and its Subsidiaries; the absence
of governmental approvals required to be obtained in connection with the Shelf
Registration Statement, the offering and sale of the applicable Securities, or
any agreement of the type referred to in Section 3(n) hereof; the compliance as
to form of such Shelf Registration Statement and any documents incorporated by
reference therein and of the Indenture, with the requirements of the Securities
Act and the Trust Indenture Act; and, as of the date of the opinion and as of
the effective date of the Shelf Registration Statement or most recent
post-effective amendment hereto, as the case may be, that such counsel do not
believe that such Shelf Registration Statement and the prospectus included
therein, as then amended or supplemented, and any documents incorporated by
reference therein contain an untrue statement of a material fact or omit to
state therein a material fact required to be stated therein or necessary to the
statements therein not misleading (in the case of any such documents, in the
light of the circumstances existing at the time that such documents were filed
with the Commission under the Exchange Act); (v) cause its officers to execute
and deliver all customary documents and certificates and updates thereof
requested by such Holders and any underwriters of the applicable Securities and
(vi) cause its independent public accountants and the independent public
accountants with respect to any other entity for which financial information is


                                       10
<PAGE>
provided in the Shelf Registration Statement to provide to the Holders of the
applicable Securities and any underwriter therefor a comfort letter in customary
form and covering matters of the type customarily covered in comfort letters in
connection with primary underwritten offerings, subject to receipt of
appropriate documentation as contemplated, and only if permitted, by Statement
of Auditing Standards No. 72. The foregoing actions set forth in clauses (iii),
(iv), (v), and (vi) of this Section 3(o) shall be performed at (A) the
effectiveness of such Shelf Registration Statement and each post-effective
amendment thereto and (B) each closing under any underwritten offering of the
Securities to the extent required under any related underwriting or similar
agreement.

           (q)   The Company will use its best efforts to cause the Common Stock
issuable upon conversion of the Securities to be listed on each securities
exchange, over-the-counter market, or respective counterpart if any, on which
any shares of Common Stock are then listed.

           (r)   The Company shall, in the event that any broker-dealer
registered under the Exchange Act shall underwrite any Registerable Securities
or participate as a member of an underwriting syndicate or selling group or
"assist in the distribution" (within the meaning of the Rules of Fair Practice
and By-Laws of the National Association of Securities Dealers, Inc. ("NASD"))
thereof, whether as a Holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, assist such broker-dealer in complying with the
requirements of such Rules and By-Laws, including, without limitation, by (A) if
such Rules or By-Laws, including Rule 2720, shall so require, engaging  a
"qualified independent underwriter" (as defined in Rule 2720) to participate in
the preparation of the Shelf Registration Statement relating to such Registrable
Securities, to exercise usual standards of due diligence in respect thereto and,
if any portion of the offering contemplated by such Shelf Registration Statement
is an underwritten offering or is made through a placement or sales agent, to
recommend the yield of such Registrable Securities, (B) indemnifying any such
qualified independent underwriter to the extent of the indemnification of
underwriters provided in Section 5 hereof and (C) providing such information to
such broker-dealer as may be required in order for such broker-dealer to comply
with the requirements of the Rules of Fair Practice of the NASD.

           (s)   The Company shall use its best efforts to take all other steps
necessary to effect the registration, offering and sale of the Registrable
Securities covered by the Shelf Registration Statement contemplated hereby.

   4.      REGISTRATION EXPENSES. (a) All expenses incident to the Company's
performance of and compliance with this Agreement will be borne by the
Company, regardless of whether a Shelf Registration Statement is ever filed or
becomes effective, including without limitation:


                                       11
<PAGE>
                     (i)   all registration and filing fees and expenses;

                     (ii)  all fees and expenses of compliance with federal
              securities and state "blue sky" or securities laws;

                     (iii) all expenses of printing (including, printing
              certificates for the Securities without the restrictive legend to
              be issued and printing of Prospectuses), messenger and delivery
              services and telephone.

                     (iv)  all fees and disbursements of counsel for the
              Company;

                     (v)   all application and filing fees in connection with
              listing the Securities on a national securities exchange or
              automated quotation system pursuant to the requirements hereof;
              and

                    (vi)   all fees and disbursements of independent certified
              public accountants of the Company (including the expenses of any
              special audit and comfort letters required by or incident to such
              performance).

              The Company will bear its internal expenses (including, without
limitation all salaries and expenses of its officers and employees performing
legal or accounting duties), the expenses of any annual audit and the fees and
expenses of any person, including special experts, retained by the Company.

              (b)    In connection with any Shelf Registration Statement
required by this Agreement, the Company will reimburse the Purchasers and the
Holders who are selling or reselling Registrable Securities pursuant to the
Shelf Registration Statement for the reasonable fees and disbursements of not
more than one counsel, who shall be Skadden, Arps, Slate, Meagher & Flom LLP
unless another nationally-recognized law firm with specialization in securities
laws shall be chosen by the Company.

     5.       INDEMNIFICATION AND CONTRIBUTION. (a) In connection with any Shelf
Registration Statement, the Company agrees to indemnify and hold harmless the
Purchaser, each Holder of Securities covered thereby (including the Purchaser),
their respective partners, directors, and officers and each person, if any, who
controls the Purchaser or any such Holder within the meaning of Section 15 of
the Securities Act (the Purchaser, Holder and such controlling persons are
referred to collectively as the ("Indemnified Parties") against any losses,
claims, damages or liabilities, joint or several, or any actions in respect
thereof (including, but not limited to, any losses, claims, damages, liabilities
or actions relating to purchases and sales of the Securities) to which each
Indemnified Party may become subject under the Securities Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any


                                       12
<PAGE>
untrue statement or alleged untrue statement of a material fact contained in the
Shelf Registration Statement as originally filed or in any amendment or
supplement thereof, or in any preliminary Prospectus or Prospectus, or in any
amendment thereof or supplement thereto, 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 to make the statements therein not misleading, in
the light of the circumstances under which they were made, and shall reimburse
each such Indemnified Party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i) the
Company will not be liable in any case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Purchaser or any such Holder specifically for
inclusion therein and (ii) the foregoing indemnity, with respect to any untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary Prospectus relating to a Shelf Registration Statement, shall not
inure to the benefit of any Holder (or any person controlling such Holder) from
whom the person asserting any such losses, claims, damages or liabilities
purchased the Securities concerned, to the extent that a Prospectus relating to
such Securities was required to be delivered by such Holder under the Securities
Act in connection with such purchase and any such loss, claim, damage or
liability of such Holder results from the fact that there was not sent or given
to such person, at or prior to the written confirmation of the sale of such
Securities to such person, a copy of the final Prospectus if the Company had
previously furnished copies thereof to such Holder at or prior to the written
confirmation of the sale of such Securities to such person and the untrue
statement or alleged untrue statement or omission or alleged omission contained
in the preliminary prospectus was corrected in the final prospectus (or the
final prospectus as supplemented). This indemnity agreement will be in addition
to any liability which the Company may otherwise have.


           The Company shall also indemnify underwriters, their officers,
directors and each person who controls such underwriters within the meaning of
the Securities Act or the Exchange Act to the same extent as provided above with
respect to the indemnification of the Holders of the Securities and shall, if
requested by any Holder, enter into an underwriting agreement reflecting such
agreement, as provided in Section 3(n) and Section 6 hereof.

           (b)    Each Holder of Securities covered by a Shelf Registration
Statement (including the Purchaser)  severally, and not jointly, agrees to
indemnify and hold harmless (i) the Company, (ii) each of the directors of the
Company, (iii) each of its officers who signs such Shelf Registration Statement
and (iv) each person who controls the Company within the meaning of either the
Securities Act or the Exchange Act to the same extent as the foregoing indemnity
from the Company, but only in respect of written information relating to such
Holder furnished to the Company by or on behalf of such Holder specifi-


                                       13
<PAGE>
cally for inclusion in the documents referred to in the foregoing indemnity.
This indemnity agreement will be in addition to any liability which any such
Holder may otherwise have.

            (c)   Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 5,
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 it may have to any indemnified party otherwise than under
paragraph (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 reasonably satisfactory to
such indemnified party (who shall not, except with the consent of such
indemnified party, be counsel to the indemnifying party), and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 5 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 includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action and does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.

            (d)   If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (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 (or actions in respect thereof) referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the Initial Placement and the
Shelf Registration Statement, or (ii) if the allocation provided by the
foregoing clause (i) 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 indemnifying party or parties on
the one hand and the indemnified party on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties 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 on the one hand or


                                       14

<PAGE>
such Holder or such other indemnified party, as the case may be, on the other,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such 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 any other provision of this
Section 5(d), the Holders of the Securities shall not be required to contribute
any amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Securities pursuant to the Shelf Registration
Statement exceeds the amount of damages which such Holders have otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if any, who
controls such indemnified party within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as such indemnified
party and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act shall have the same rights to
contribution as the Company.

            (e)   The agreements contained in this Section 5 shall survive the
sale of the Securities pursuant to a Registration Statement and shall remain in
full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.

      6.    UNDERWRITTEN OFFERING. If, pursuant to written notice delivered to
the Company by the Holders of a majority of aggregate principal amount of
Registrable Securities then registered pursuant to a Shelf Registration, such
Holders so elect, the offer and sale of any such Common Stock may be effected in
the form of an underwritten offering. In any such underwritten offering, the
investment banker or bankers and manager or managers that will administer the
offering will be selected by, and the underwriting arrangements with respect
thereto will be approved by, the Company; provided, however, that such
investment bankers and managers and underwriting arrangements must be reasonably
satisfactory to the Holders of a majority of the Registrable Securities to be
included in such offering. No Holder may participate in any underwritten
offering contemplated hereby unless such Holder (a) agrees to sell such Holder's
Registrable Securities in accordance with any approved underwriting
arrangements, and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such approved underwriting
arrangements.

      7.    CHANGES TO THE APPLICABLE RATE UNDER CERTAIN CIRCUMSTANCES. (a)
Pursuant to Section 2(a) hereof, the Company, may, upon written notice to all
the Holders,


                                       15
<PAGE>
postpone having the Shelf Registration Statement declared effective for a
reasonable period not to exceed 90 days if the Company possesses material
non-public information, the disclosure of which would have a material adverse
effect on the Company and its subsidiaries taken as a whole. Notwithstanding any
such postponement, the Applicable Rate shall be adjusted as follows, if any of
the following events occur (each such event in clauses (i) through (iii) below,
a "Registration Default"):

                  (i)     if a Shelf Registration Statement has not been filed
            with the Commission on or prior to the Filing Deadline;

                  (ii)    if the Shelf Registration Statement has not been
            declared effective by the Commission on or prior to the
            Effectiveness Deadline;

                  (iii)   if (A) after the Shelf Registration Statement is
            declared effective, such Shelf Registration Statement ceases to be
            effective prior to the earlier of (1) the end of the Shelf
            Registration Period, (2) the sale of all Registrable Securities
            registered under the Shelf Registration Statement or (3) the
            expiration of the applicable period under Rule 144(k) of the
            Securities Act or (B) such Shelf Registration Statement or the
            related Prospectus ceases to be usable (including if the use of the
            Prospectus is suspended by the Company for more than 30 days in any
            90-day period or an aggregate of 90 days in any 12-month period, as
            set forth in Section 2(c) hereof) in connection with resales of
            Securities covered by such Shelf Registration Statement prior to the
            end of the Shelf Registration Period because either (1) any event
            occurs as a result of which the related Prospectus forming part of
            such Shelf Registration Statement would include any untrue statement
            of a material fact or omit to state any material fact necessary to
            make the statements therein in the light of the circumstances in
            which they were made not misleading or (2) it shall be necessary to
            amend such Shelf Registration Statement, or supplement the related
            Prospectus, to comply with the Securities Act or the Exchange Act or
            the respective rules thereunder.

            Each of the foregoing will constitute a Registration Default
whatever the reason for any such event and whether it is voluntary or
involuntary or is beyond the control of the Company or pursuant to operation of
law or as a result of any action or inaction by the Commission.

            Additional interest shall accrue on the Registrable Securities over
and above the interest set forth in the title of the Registrable Securities from
and including the date on which any such Registration Default shall occur to but
excluding the date on which all such Registration Defaults have been cured, at a
rate of 0.50% per annum (the "Additional Interest Rate"). The increase in the
Applicable Rate attributable to any Registration Default shall cease to be
effective from the date such Registration Default is cured, and the Applica-


                                       16
<PAGE>
ble Rate shall be reduced at such time to the Applicable Rate in effect
immediately prior to such Registration Default.

            (b)   A Registration Default referred to in Section 7(a)(iii) shall
be deemed not to have occurred and be continuing in relation to the Shelf
Registration Statement or the related Prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a post-effective
amendment to such Shelf Registration Statement to incorporate annual audited
financial information with respect to the Company where such post-effective
amendment is not yet effective and needs to be declared effective to permit
Holders to use the related Prospectus or (y) the occurrence of other material
events or developments with respect to the Company that would need to be
described in such Registration Statement or the related Prospectus and (ii) in
the case of clause (y) the Company is proceeding promptly and in good faith to
amend or supplement such Registration Statement and related Prospectus to
describe such events; provided, however, that in any case if such Registration
Default occurs for a continuous period in excess of 30 days in any 90-day period
or an aggregate of 90 days in any 12-month period, Additional Interest shall be
payable in accordance with the above paragraph from the day such Registration
Default occurred until such Registration Default is cured.

            (c)   Any amounts of Additional Interest due pursuant to Section
7(a) will be payable in cash on the regular interest payment dates (or such
other time as provided in the Indenture for the payment of interest or
distributions) with respect to the Securities. The amount of Additional Interest
will be determined by multiplying the applicable Additional Interest Rate by the
principal amount of the Registrable Securities and further multiplied by a
fraction, the numerator of which is the number of days such Additional Interest
Rate was applicable during such period (determined on the basis of a 360-day
year comprised of twelve 30-day months), and the denominator of which is 360.

      8.    RULES 144 AND 144A. The Company shall use its best efforts to file
the reports required to be filed by it under the Securities Act and the Exchange
Act in a timely manner and, if at any time the Company is not required to file
such reports, it will, upon the request of any Holder of Registrable Securities,
make publicly available other information so long as necessary to permit sales
of their securities pursuant to Rules 144 and 144A of the Securities Act, or any
successor regulation or stature thereto. The Company covenants that it will take
such further action as any Holder may reasonably request, all to the extent
required from time to time to enable such Holder to sell Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)).
The Company will provide a copy of this Agreement to prospective purchasers of
Securities identified to the Company by the Purchasers upon request. Upon the
request of any Holder of Securities, the Company shall deliver to such Holder a
written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.


                                       17
<PAGE>
      9.    MISCELLANEOUS.

            (a)   Remedies. The Company acknowledges and agrees that any failure
by it to comply with its obligations under Section 2 hereof may result in
material irreparable injury to the Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company's obligations under Section 2 hereof. The
Company further agrees to waive the defense in any action for specific
performance of Section 2 hereof that a remedy at law would be adequate.

            (b)   No Inconsistent Agreements. The Company has not, as of the
date hereof, entered into, nor shall it on or after the date hereof, enter into,
any agreement with respect to its securities or otherwise that is inconsistent
with the rights granted to the Holders herein or otherwise conflicts with the
provisions hereof.

            (c)   Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of a majority in principal amount of the Registrable Securities affected
by such amendment, qualification, modification, supplement, waiver or consent.

            (d)   Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing and shall be mailed, delivered,
telegraphed and confirmed or faxed and confirmed:

            (1)   if to a Holder, at the most current address given by such
      Holder to the Company in accordance with the provisions of this Section
      9(d), which address initially is, with respect to each Holder, the address
      of such Holder maintained by the Registrar under the Indenture; with a
      copy in a like manner to Deutsche Bank Alex. Brown Inc.;

            (2)   if to the Purchaser, initially at the address set forth in the
      Purchase Agreement; and

            (3)   if to the Company, initially at its address set forth in the
      Purchase Agreement.

            The Purchaser, any Holder or the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.


                                       18
<PAGE>
            (e)   Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Purchaser, on the other hand, and shall have the right to enforce
such agreements directly to the extent they may deem such enforcement necessary
or advisable to protect their rights or the rights of Holders hereunder.

            (f)   Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
and the Holders, including, without the need for an express assignment or any
consent by the Company thereto, subsequent Holders of Securities. The Company
hereby agrees to extend the benefits of this Agreement to any Holder of
Registrable Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.

            (g)   Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

            (h)  Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

            (i)   Governing 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.

            (j)   Securities Held by the Company. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Securities
is required hereunder, Securities held by the Company or its affiliates (other
than subsequent Holders of Securities if such subsequent Holders are deemed to
be affiliates solely by reason of their holdings of such Securities) shall not
be considered to be outstanding and shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage.

            (k)   Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.

                           (Signature page follows.)


                                       19
<PAGE>


                     Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Purchaser.



                                     Very truly yours,


                                     CALPINE CORPORATION


                                     By: /s/ ROBERT D. KELLY
                                        ----------------------------------
                                     Name:   Robert D. Kelly
                                     Title:  Senior Vice President-Finance



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


DEUTSCHE BANC ALEX. BROWN INC.


By:
   ---------------------------
Name:
Title:
<PAGE>
                     Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Purchaser.


                                  Very truly yours,


                                  CALPINE CORPORATION


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



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


DEUTSCHE BANC ALEX. BROWNE INC.


By: /s/ ANTONY T F LUNDY
   ----------------------------
Name:   Antony T F Lundy
Title:  Managing Director


By: /s/ GEORGE ORDONEZ
   ----------------------------
Name:   George Ordonez
TITLE:  Director


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>4
<FILENAME>f80342ex4-4.txt
<DESCRIPTION>EXHIBIT 4.4
<TEXT>
<PAGE>
                                                                     Exhibit 4.4



                               CALPINE CORPORATION

                        Directors' Certificate to Trustee
     pursuant to Section 2.1 of the Indenture, establishing the terms of the
                4% Convertible Senior Notes Due December 26, 2006


         We, Peter Cartwright and Ann B. Curtis, as members of the Board of
Directors of Calpine Corporation, a Delaware corporation (the "Company"), are
delivering this Certificate pursuant to Section 2.1 of the Indenture, dated as
of August 10, 2000, as supplemented by the First Supplemental Indenture, dated
as of September 28, 2000 (the "Indenture"), between the Company and Wilmington
Trust Company, as Trustee (the "Trustee"), with respect to the Company's 4%
Convertible Senior Notes Due December 26, 2006. Unless otherwise defined herein,
all capitalized terms used herein shall have the meanings given thereto in the
Indenture. We hereby certify as follows:

                        ARTICLE 1 - TITLE OF SECURITIES

         Section 1.1. Title of Senior Notes. The Senior Notes shall be entitled
"4% Convertible Senior Notes Due December 26, 2006" (the "Senior Notes") and
shall bear CUSIP No. 131347 AZ9. A form of Senior Note is attached hereto as
Exhibit A, the terms of which are incorporated by reference and approved hereby.

                     ARTICLE 2 - AUTHORIZED PRINCIPAL AMOUNT

         Section 2.1. Authorized Principal Amount. The aggregate principal
amount of the Senior Notes that may be authenticated and delivered under the
Indenture shall be limited to $1,200,000,000 (except for Senior Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or for replacement of, or in lieu of, other Senior Notes pursuant to
Sections 2.7, 2.8, 2.11, 8.5 or 9.6 of the Indenture and subject to the
provisions of Section 2.1 of the Indenture).

                              ARTICLE 3 - MATURITY

         Section 3.1. Stated Maturity. The unpaid principal amount of the Senior
Notes shall mature on December 26, 2006, subject to the provisions of Section
5.2 of the Indenture regarding acceleration unless repurchased as set forth in
Section 7.1 below.

                              ARTICLE 4 - INTEREST

         Section 4.1. Interest. The Senior Notes shall bear interest from
December 26, 2001 (the "Issue Date") at the rate of 4% per annum, payable on
each December 26 and June 26 (each, an "Interest Payment Date"), commencing June
26, 2002, for payment to the Holders of record at the close of business on the
immediately preceding December 11 and June 11 (each, a "Regular Record Date"),
respectively, whether or not a Business Day.
<PAGE>
                    ARTICLE 5 - CONVERSION INTO COMMON STOCK

         Section 5.1. Conversion into Common Stock. A Holder may convert the
Senior Notes into shares of common stock of the Company, par value $.001 per
share (the "Common Stock"), at any time prior to 5:00 p.m., New York City time,
on that date that is two Business Days prior to maturity, unless previously
repurchased, if the principal amount of such Senior Notes are $1,000 or an
integral multiple portion of $1,000. Each Senior Note may initially be converted
into shares of Common Stock at the initial conversion price of $18.07 per share
of Common Stock (the "Conversion Price"), which represents an initial conversion
rate of approximately 55.3403 shares of Common Stock per each $1,000 principal
amount of Senior Notes (the "Conversion Rate"). To convert a Senior Note, a
Holder must satisfy the requirements set forth below. From and after conversion
of a Senior Note into shares of Common Stock on a Conversion Date (defined
below) with respect to any Senior Note, such Senior Note shall cease to be
outstanding and the Trustee shall be authorized to cancel each such Senior Note
following conversion thereof.

         Section 5.2. Conversion Procedure. To convert a Senior Note a Holder
must satisfy the requirements in Paragraph 6 of the Senior Notes. The first
Business Day on which the Holder satisfies all those requirements is the
conversion date (the "Conversion Date").

         As soon as practicable after the Conversion Date, the Company shall
deliver to the Holder, through the Conversion Agent, a certificate for the
number of full shares of Common Stock issuable upon the conversion or exchange
and cash in lieu of any fractional share determined pursuant to Section 5.3. The
person in whose name the certificate is registered shall be treated as a
shareholder of record as of the close of business on the Conversion Date. Upon
conversion of a Senior Note, such person shall no longer be a Holder of such
Senior Note.

         No payment or adjustment will be made for dividends on, or other
distributions with respect to, any Common Stock upon conversion hereunder except
as provided in this Article 5. On conversion of a Senior Note, that portion of
accrued interest, if any, attributable to the period from the Issue Date or most
recent Interest Payment Date, as applicable, of the Senior Note through the
Conversion Date with respect to the converted Senior Note shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through delivery of the shares of Common Stock
(together with the cash payment, if any, in lieu of fractional shares) for the
Senior Note being converted pursuant to the provisions hereof; and the fair
market value of such shares of Common Stock (together with any such cash payment
in lieu of fractional shares) shall be treated as issued, to the extent thereof,
first in exchange for interest, if any, accrued through the Conversion Date, and
the balance, if any, of such fair market value of such shares of Common Stock
(and any such cash payment) shall be treated as issued for the Issue Price of
the Senior Note being converted pursuant to the provisions hereof. If the Holder
converts more than one Senior Note at the same time, the number of shares of
Common Stock issuable upon the conversion shall be based on the total principal
amount of the Senior Notes converted.

         Upon conversion of any Senior Note on a date that is not an Interest
Payment Date, Holders will not be entitled to receive any cash payment
representing accrued and unpaid interest for the period from the immediately
preceding Interest Payment Date or the Issue Date,

                                       2
<PAGE>
as the case may be, to the Conversion Date with respect to a converted Senior
Note. However, if Senior Notes are converted after a Regular Record Date and
prior to the opening of business on the next Interest Payment Date, including
the date of maturity, Holders of such Senior Notes at the close of business on
the Regular Record Date will receive the interest payable on such Senior Notes
on the corresponding Interest Payment Date notwithstanding the conversion.

         If the last day on which a Senior Note may be converted is a Legal
Holiday, the Senior Note may be surrendered on the next succeeding day that is
not a Legal Holiday. Upon surrender of a Senior Note that is converted in part,
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder, a new Senior Note in an authorized denomination equal in principal
amount to the unconverted portion of the Senior Note surrendered.

         Section 5.3. Fractional Shares. Holders of Senior Notes will not
receive a fractional share upon conversion of a Senior Note. Instead, the Holder
will receive cash for the current market value of the fractional share. The
current market value of a fractional share shall be determined, to the nearest
1/1,000th of a share, by multiplying the Sale Price, on the last trading day
immediately prior to the Conversion Date, of a full share by the fractional
amount and rounding the product to the nearest whole cent, with one-half cent
being rounded upward.

         Section 5.4. Taxes on Conversion. If a Holder submits a Senior Note for
conversion, the Company shall pay any documentary, stamp or similar issue or
transfer tax due on the issue of shares of Common Stock upon the conversion.
However, the Holder shall pay any such tax which is due because the Holder
requests the shares to be issued in a name other than the Holder's name. The
Conversion Agent may refuse to deliver the certificates representing the shares
of Common Stock being issued in a name other than the Holder's name until the
Conversion Agent receives a sum sufficient to pay any tax which will be due
because the shares are to be issued in a name other than the Holder's name.
Nothing herein shall preclude any income tax withholding required by law or
regulations.

         Section 5.5. Company to Provide Stock. The Company has reserved, and
from time to time as may be necessary shall, reserve out of its authorized but
unissued shares of Common Stock a sufficient number of shares of Common Stock to
permit the conversion of the Senior Notes in full.

                  All shares of Common Stock delivered upon conversion of the
Senior Notes shall be newly issued shares or treasury shares, shall be duly and
validly issued and fully paid and nonassessable, and shall be free from
preemptive rights and free of any lien or adverse claim. The Company will
endeavor promptly to comply with all federal and state securities laws
regulating the offer and delivery of shares of Common Stock upon conversion of
Senior Notes, if any, and will list or cause to have quoted such shares of
Common Stock on each national securities exchange or in the over-the-counter
market or such other market on which the shares of Common Stock are then listed
or quoted.

         Section 5.6. Conversion Price Adjustments. The Conversion Price shall
be subject to adjustment (without duplication) from time to time as follows:

                                       3
<PAGE>
         (a) In case the Company shall pay a dividend or make a distribution on
the Common Stock payable exclusively in Common Stock, the Conversion Rate in
effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by multiplying such Conversion Rate by a
fraction of which the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
and the numerator shall be the sum of (i) such number of shares and (ii) the
total number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business on the
day following the date fixed for such determination. For the purposes of this
paragraph (a), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company. In the event that
such dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not occurred.

         (b) In case the Company shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall otherwise
issue to all holders of its Common Stock, rights or warrants, in each case
entitling the holders thereof to subscribe for or purchase shares of Common
Stock at a price per share less than the current market value per share
(determined as provided in paragraph (g) below) of the Common Stock on the date
fixed for the determination of stockholders entitled to receive such rights or
warrants, the Conversion Rate in effect at the opening of business on the day
following the date fixed for such determination shall be increased by
multiplying such Conversion Rate by a fraction of which the denominator shall be
the sum of (i) the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus (ii) the number of shares
of Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase at
such current market value and the numerator shall be the sum of (i) the number
of shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus (ii) the number of shares of Common Stock so offered
for subscription or purchase, such increase to become effective immediately
after the opening of business on the day following the date fixed for such
determination, provided, however, that no adjustment shall be made if Holders of
the Senior Notes may participate in the transaction on a basis and with notice
that the Company's Board of Directors deems to be fair and appropriate. To the
extent that rights are not so issued or shares of Common Stock are not so
delivered after the expiration of such rights or warrants, the Conversion Rate
shall be readjusted to the Conversion Rate which would then be in effect if such
date fixed for the determination of stockholders entitled to receive such rights
or warrants had not been fixed. For the purposes of this paragraph (b), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company.

         (c) In case outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the Business Day following the day upon which such
subdivision becomes effective shall be proportionately increased and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may

                                       4
<PAGE>
be, to become effective immediately after the opening of business on the
Business Day following the day upon which such subdivision or combination
becomes effective.

         (d) Subject to the last sentence of this paragraph (d), in case the
Company shall, by dividend or otherwise, distribute to all holders of its Common
Stock evidences of its indebtedness, shares of any class or series of Capital
Stock, cash or assets (including securities, but excluding any rights or
warrants referred to in paragraph (b) of this Section 5.6, any dividend or
distribution paid exclusively in cash and any dividend or distribution referred
to in paragraph (a) of this Section 5.6), the Conversion Rate shall be increased
so that the same shall equal the price determined by multiplying the Conversion
Rate in effect immediately prior to the effectiveness of the Conversion Rate
increase contemplated by this paragraph (d) by a fraction of which the
denominator shall be the current market value per share (determined as provided
in paragraph (g) of this Section 5.6) of the Common Stock on the date fixed for
the determination of stockholders entitled to receive such distribution (the
"Reference Date") less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors), on the Reference Date, of the portion of
the evidences of indebtedness, shares of capital stock, cash and/or assets so
distributed applicable to one share of Common Stock and the numerator shall be
such current market value per share of the Common Stock, such increase to become
effective immediately prior to the opening of business on the day following the
Reference Date, provided, however, that if the fair market value of the portion
of the evidences of indebtedness, shares of capital stock, cash and/or assets so
distributed applicable to one share of Common Stock shall be less than the
current market value per share of Common Stock, no adjustment shall be made, and
provided, further, that no adjustment shall be made if all Holders of Senior
Notes are entitled to participate in such transactions. In the event that such
dividend or distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate which would then be in effect if such
dividend or distribution had not occurred. For purposes of this paragraph (d),
any dividend or distribution that includes shares of Common Stock or rights or
warrants to subscribe for or purchase shares of Common Stock shall be deemed
instead to be (1) a dividend or distribution of the evidences of indebtedness,
shares of Capital Stock, cash and/or assets other than such shares of Common
Stock or such rights or warrants (making any Conversion Rate increase required
by this paragraph (d)) immediately followed by (2) a dividend or distribution of
such shares of Common Stock or such rights or warrants (making any further
Conversion Rate increase required by paragraph (a) or (b) of this Section 5.6),
except any shares of Common Stock included in such dividend or distribution
shall not be deemed "outstanding at the close of business on the date fixed for
such determination" within the meaning of paragraph (a) of this Section 5.6.

         (e) In case the Company pays to holders of Common Stock in respect of a
tender or exchange offer, other than an odd-lot offer, by the Company or any of
its Subsidiaries for Common Stock to the extent that the offer involves
aggregate consideration that, together with (1) any cash and the fair market
value of any other consideration payable in respect of any tender offer by the
Company or any of its Subsidiaries for shares of Common Stock consummated within
the preceding 12 months not triggering a Conversion Rate adjustment and (2)
all-cash distributions to all or substantially all holders of the Company's
Common Stock made within the preceding 12 months not triggering a Conversion
Rate adjustment, exceeds an amount equal to 12.5% of the market capitalization
of Common Stock on the expiration date of the tender offer,

                                       5
<PAGE>
the Conversion Rate shall be increased so that the same shall equal the price
determined by multiplying the Conversion Rate in effect immediately prior to the
effectiveness of the Conversion Rate increase contemplated by this paragraph (e)
by a fraction of which the denominator shall be the number of shares of Common
Stock outstanding (including any tendered or exchanged shares) at the last time
tenders of exchanges may be made pursuant to such tender or exchange offer (the
"Expiration Time") multiplied by the current market value per share (determined
as provided in paragraph (g) of this Section 5.6) of the Common Stock on the
trading day on the NYSE next succeeding the Expiration Time and the numerator
shall be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) at the Expiration Time and the current
market value per share (determined as provided in paragraph (g) of this Section
5.6) of the Common Stock on the trading day on the NYSE next succeeding the
Expiration Time, such increase to become effective immediately prior to the
opening of business on the Business Day following the Expiration Time.

         (f) In case the Company distributes to all or substantially all holders
of Common Stock all-cash distributions in an aggregate amount that, together
with (1) any cash and the fair market value of any other consideration payable
in respect of any tender offer by the Company or any of its Subsidiaries for
shares of the Company's Common Stock consummated within the preceding 12 months
not triggering a Conversion Rate adjustment and (2) all other all-cash
distributions to all or substantially all holders of Common Stock made within
the preceding 12 months not triggering a Conversion Rate adjustment, exceeds an
amount equal to 12.5% of the market capitalization of the Common Stock on the
Business Day immediately preceding the day on which the Company declares the
distribution, the Conversion Rate shall be increased so that the same shall
equal the price determined by multiplying the Conversion Rate in effect
immediately prior to the effectiveness of the Conversion Rate increase
contemplated by this paragraph (f) by a fraction of which the denominator shall
be the current market value per share (determined as provided in paragraph (g)
of this Section 5.6) of the Common Stock on the date fixed for the payment of
such distribution less the amount of cash so distributed and not excluded as
provided below applicable to one share of Common Stock and the numerator shall
be such current market value per share of the Common Stock, such increase to
become effective immediately prior to the opening of business on the day
following the date fixed for the payment of such distribution; provided,
however, that in the event the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the current market value
per share (as defined in paragraph (g) of this Section 5.6) of the Common Stock
on the record date mentioned above, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder of Senior Notes shall have
the right to receive upon conversion the amount of cash such Holder would have
received had such Holder converted each Senior Note immediately prior to the
record date for the distribution of the cash. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such record
date had not been fixed.

                                       6
<PAGE>
         (g) For the purpose of any computation under paragraphs (b), (d), (e)
and (f) of this Section 5.6, the current market value per share of Common Stock
on any date in question shall be deemed to be the average of the daily closing
prices on the NYSE for the ten consecutive trading days prior to the earlier of
the day in question and, if applicable, the day before the "ex" date (as
hereinafter defined) with respect to the issuance or distribution requiring such
computation; provided, however, that if the day in question or the "ex" date for
any event (other than the issuance or distribution requiring such computation)
that requires an adjustment to the Conversion Rate pursuant to Section 5.6 (b),
(d), (e) or (f) occurs during such 10 consecutive NYSE trading days, the closing
price on the NYSE for each trading day prior to such date for such other event
shall be adjusted by dividing such closing price by the same fraction by which
the Conversion Rate is so required to be adjusted as a result of such other
event. For purposes of this paragraph (g), the term "ex" date (I) when used with
respect to any issuance or distribution, means the first date on which the
Common Stock trades regular way on the relevant exchange or in the relevant
market from which the closing price was obtained without the right to receive
such issuance or distribution, (II) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which the Common
Stock trades regular way on such exchange or in such market after the time at
which such subdivision or combination becomes effective and (III) when used with
respect to any tender or exchange offer means the first date on which the Common
Stock trades regular way on such exchange or in such market after the Expiration
Time of such offer. Notwithstanding the foregoing, whenever successive
adjustments to the Conversion Rate are called for pursuant to this Section 5.6,
such adjustments shall be made to the current market price as may be necessary
or appropriate to effectuate the intent of this Section 5.6 and to avoid unjust
or inequitable results, as determined in good faith by the Board of Directors.
In the event that the Common Stock shall cease to be listed on the NYSE, this
Section 5.6(g) shall be deemed amended so as to replace any reference to the
"NYSE" with the applicable securities exchange, over-the-counter market or other
market which represents the primary market for the trading of the Common Stock.

         (h) No adjustment of the Conversion Price shall be made (i) upon the
issuance of any shares of Common Stock pursuant to any present or future plan
providing for the reinvestment of dividends or interest payable on securities of
the Company and the investment of additional optional amounts in shares of
Common Stock under any plan, (ii) upon the issuance of any shares of Common
Stock or options or rights to purchase those shares pursuant to any present or
future employee, director or consultant benefit plan or program of the Company,
(iii) upon the issuance of any shares of Common Stock pursuant to any option,
warrant, right or exercisable, exchangeable or convertible security outstanding
as of the date hereof or (iv) upon the issuance of any rights, any distribution
of separate certificates representing the rights, any exercise or redemption of
any rights or any termination or invalidation of the rights, pursuant to the
Company's stockholders rights plan. There shall also be no adjustment of the
Conversion Rate in case of the issuance of any Common Stock (or securities
convertible into or exchangeable for Common Stock), except as specifically
described above.

         Section 5.7. When Adjustment May Be Deferred. No adjustment in the
Conversion Price need be made unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Price. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.

                                       7
<PAGE>
         All calculations under this Article 5 shall be made to the nearest
cent, with one-half cent rounded up, or to the nearest 1/1,000th of a share,
with 1/500th of a share being rounded up, as the case may be.

         Section 5.8. When No Adjustment Required. No adjustment need be made
for a transaction referred to in Section 5.6(b) or (d) if Holders of Senior
Notes are to participate in the transaction without conversion on a basis and
with notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of shares of Common Stock
participate in the transaction.

         No adjustment need be made for a change in the par value or no par
value of the shares of Common Stock.

         To the extent the Senior Notes become convertible pursuant to this
Article 5 in whole or in part into cash, no adjustment need be made thereafter
as to the cash. Interest will not accrue on the cash.

         Section 5.9. Notice of Adjustment. Whenever the Conversion Price is
adjusted, the Company shall promptly mail to Holders of Senior Notes a notice of
the adjustment. The Company shall file with the Trustee and the Conversion Agent
such notice and a certificate from the Company's independent public accountants
briefly stating the facts requiring the adjustment and the manner of computing
it. The certificate shall be conclusive evidence that the adjustment is correct.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate except to exhibit the same
to any Holder desiring inspection thereof.

         Section 5.10. Voluntary Decrease. The Company from time to time may
decrease the Conversion Price by any amount at any time for at least 20 days, so
long as the decrease is irrevocable during such 20-day period. Whenever the
Conversion Price is decreased, the Company shall mail to Holders of Senior Notes
and file with the Trustee and the Conversion Agent a notice of the decrease. The
Company shall mail the notice at least 15 days before the date the decreased
Conversion Price takes effect. The notice shall state the decreased Conversion
Price and the period it will be in effect. A voluntary decrease of the
Conversion Price does not change or adjust the Conversion Price otherwise in
effect for purposes of Section 5.10.

         Section 5.11. Notice of Certain Transactions. If:

                  a)       the Company takes any action that would require an
                           adjustment in the Conversion Rate pursuant to Section
                           5.6 (unless no adjustment is to occur pursuant to
                           Section 5.8); or

                  b)       the Company takes any action that would require a
                           supplemental indenture pursuant to Section 5.12; or

                  c)       there is a liquidation or dissolution of the Company;

then the Company shall mail to Holders of Senior Notes and file with the Trustee
and the Conversion Agent a notice stating the proposed record date for a
dividend or distribution or the

                                       8
<PAGE>
proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, binding share exchange, transfer, liquidation or
dissolution. The Company shall file and mail the notice at least 15 days before
such date. Failure to file or mail the notice or any defect in it shall not
affect the validity of the transaction.

         Section 5.12. Reorganization of Company; Special Distributions. If the
Company is a party to a transaction subject to Article IV of the Indenture
(other than a sale of all or substantially all of the assets of the Company in a
transaction in which the holders of shares of Common Stock immediately prior to
such transaction do not receive securities, cash or other assets of the Company
or any other person) or a merger or binding share exchange which reclassifies or
changes its outstanding shares of Common Stock, the person obligated to deliver
securities, cash or other assets upon conversion of Senior Notes shall enter
into a supplemental indenture. If the issuer of securities deliverable upon
conversion of Senior Notes is an Affiliate of the successor Company, that issuer
shall join in the supplemental indenture.

         The supplemental indenture shall provide that the Holder of a Senior
Note may convert it into the kind and amount of securities, cash or other assets
which such Holder would have received immediately after the consolidation,
merger, binding share exchange or transfer if such Holder had converted the
Senior Note immediately before the effective date of the transaction, assuming
(to the extent applicable) that such Holder (i) was not a constituent person or
an Affiliate of a constituent person to such transaction; (ii) made no election
with respect thereto; and (iii) was treated alike with the plurality of
non-electing Holders. The supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practical to the adjustments
provided for in this Article 5. The successor Company shall mail to Holders of
Senior Notes a notice briefly describing the supplemental indenture.

         If this Section applies, Section 5.6 does not apply.

         Section 5.13. Company Determination Final. Any determination that the
Company or the Board of Directors must make pursuant to Section 5.3, 5.6, 5.7,
5.8, 5.12 or 5.15 is conclusive, absent manifest error.

         Section 5.14. Trustee's Adjustment Disclaimer. The Trustee has no duty
to determine when an adjustment under this Article 5 should be made, how it
should be made or what it should be. The Trustee has no duty to determine
whether a supplemental indenture under Section 5.12 need be entered into or
whether any provisions of any supplemental indenture are correct. The Trustee
shall not be accountable for and makes no representation as to the validity or
value of any securities or assets issued upon conversion of Senior Notes. The
Trustee shall not be responsible for the Company's failure to comply with this
Article 5. Each Conversion Agent shall have the same protection under this
Section 5.14 as the Trustee.

         Section 5.15. Successive Adjustments. After an adjustment to the
Conversion Price under this Article 5, any subsequent event requiring an
adjustment under this Article 5 shall cause an adjustment to the Conversion Rate
as so adjusted.

                                       9
<PAGE>
                          ARTICLE 6 - EVENTS OF DEFAULT

         Section 6.1. Events of Default. Section 5.1 of the Indenture is hereby
amended to add each of the following as an Event of Default solely with respect
to the Senior Notes (as defined in this Certificate):

         (a) default in the payment of the Purchase Price (as defined in this
Certificate) when the same becomes due and payable; and

         (b) default in the payment of the Change in Control Purchase Price (as
defined in this Certificate) when the same becomes due and payable.

                    ARTICLE 7 - COMPANY'S REPURCHASE OF NOTES

         Section 7.1. Purchase of Senior Notes at Option of the Holder. (a)
General. All or any portion of the Senior Notes held by any Holder shall be
purchased by the Company pursuant to Paragraph 5 of the Senior Notes at the
option of the Holder on December 26, 2004 (the "Purchase Date"), at the Issue
Price plus accrued and unpaid interest, if any, to the Purchase Date (the
"Purchase Price"). Purchases of Senior Notes hereunder shall be made, at the
option of the Holder thereof, upon:

(1) delivery to the Paying Agent by the Holder of a written notice of purchase
(a "Purchase Notice") at any time from the opening of business on the date that
is 20 Business Days prior to a Purchase Date until the close of business on the
last Business Day prior to such Purchase Date stating:

         (A)      the certificate number of the Senior Note which the Holder
                  will deliver to be purchased,

         (B)      the portion of the principal amount of the Senior Note which
                  the Holder will deliver to be purchased, which portion must be
                  in principal amounts of $1,000 or an integral multiple
                  thereof,

         (C)      that such Senior Note shall be purchased as of the Purchase
                  Date pursuant to the terms and conditions specified in
                  Paragraph 5 of the Senior Notes, this Certificate and the
                  Indenture, and

         (D)      in the event the Company elects, pursuant to Section 7.1(b),
                  to pay the Purchase Price, in whole or in part, in shares of
                  Common Stock but such portion of the Purchase Price shall
                  ultimately be payable to such Holder entirely in cash because
                  any of the conditions to payment of the Purchase Price in
                  shares of Common Stock is not satisfied prior to the close of
                  business on the Purchase Date, as set forth below, whether
                  such Holder elects (x) to withdraw such Purchase Notice as to
                  some or all of the Senior Notes to which such Purchase Notice
                  relates (stating the principal amount and certificate numbers,
                  if any, of the Senior Notes as to which such withdrawal shall
                  relate), or (y) to receive cash in respect of the entire
                  Purchase Price for all Senior Notes (or portions thereof) to
                  which such Purchase Notice relates; and

         (2) delivery of such Senior Note to the Paying Agent prior to, on or
after the Purchase Date (together with all necessary endorsements) at the
offices of the Paying Agent, such delivery being a condition to receipt by the
Holder of the Purchase Price therefor; provided,

                                       10
<PAGE>
however, that such Purchase Price shall be so paid pursuant to this Section 7.1
only if the Senior Note so delivered to the Paying Agent shall conform in all
respects to the description thereof in the related Purchase Notice, as
determined by the Company. If Global Senior Notes are outstanding, such notice
must also comply with Applicable Procedures. "Applicable Procedures" means, with
respect to any transfer or transaction involving a Global Senior Note or
beneficial interest therein, the rules and procedures of the Depositary for such
Global Senior Note, in each case to the extent applicable to such transaction
and as in effect from time to time.

         If a Holder, in such Holder's Purchase Notice and in any written notice
of withdrawal delivered by such Holder pursuant to the terms of Section 7.3,
fails to indicate such Holder's choice with respect to the election set forth in
clause (D) of Section 7.1(a)(1), such Holder shall be deemed to have elected to
receive cash in respect of the entire Purchase Price for all Senior Notes
subject to such Purchase Notice in the circumstances set forth in such clause
(D).

         The Company shall purchase from the Holder thereof, pursuant to this
Section 7.1, a portion of a Senior Note if the principal amount of such portion
is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Senior Note also apply to the purchase of such
portion of such Senior Note.

         Any purchase by the Company contemplated pursuant to the provisions of
this Section 7.1 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Purchase Date and the
time of delivery of the Senior Note.

         Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this Section 7.1(a)
shall have the right to withdraw such Purchase Notice at any time prior to the
close of business on the Business Day preceding the Purchase Date by delivery of
a written notice of withdrawal to the Paying Agent in accordance with Section
7.3.

         The Paying Agent shall promptly notify the Company of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.

         (b) Company's Right to Elect Manner of Payment of Purchase Price for
Payment. The Senior Notes to be purchased on any Purchase Date pursuant to
Section 7.1(a) may be paid for, at the election of the Company, in U.S. legal
tender ("cash") or shares of Common Stock, or in any combination of cash and
shares of Common Stock, subject to the conditions set forth in Section 7.1(c).
The Company shall designate, in the Company Notice delivered pursuant to Section
7.1(d), which shall be sent to Holders (and to beneficial owners as required by
applicable law) not less than 20 Business Days prior to the Purchase Date (the
"Company Notice Date"), whether the Company will purchase the Senior Notes for
cash or shares of Common Stock, or, if a combination thereof, the percentages of
the Purchase Price of Senior Notes in respect of which it will pay in cash and
shares of Common Stock; provided, however, that the Company will pay cash for
fractional shares of Common Stock. For purposes of determining the existence of
potential fractional shares, all Senior Notes subject to purchase by the Company
held by a Holder shall be considered together (no matter how many separate

                                       11
<PAGE>
certificates are to be presented). Each Holder whose Senior Notes are purchased
pursuant to this Section 7.1 shall receive the same percentage of cash or shares
of Common Stock in payment of the Purchase Price for such Senior Notes, except
(i) as provided in paragraph 7.1(c) with regard to the payment of cash in lieu
of fractional shares of Common Stock and (ii) in the event that the Company is
unable to purchase the Senior Notes of a Holder or Holders for shares of Common
Stock because any necessary qualifications or registrations of the shares of
Common Stock under applicable state securities laws cannot be obtained, the
Company may purchase the Senior Notes of such Holder or Holders for cash. The
Company may not change its election with respect to the consideration (or
components or percentages of components thereof) to be paid once the Company has
given its Company Notice to Holders of Senior Notes except pursuant to this
paragraph 7.1(b) or pursuant to Section 7.1(c) in the event of a failure to
satisfy, prior to the close of business on the Purchase Date, any condition to
the payment of the Purchase Price, in whole or in part, in Common Stock.

         At least three Business Days before the Company Notice Date, the
Company shall deliver an Officers' Certificate to the Trustee specifying:

         (1)      the manner of payment selected by the Company;

         (2)      the information required by paragraph 7.1(d);

         (3)      if the Company elects to pay the Purchase Price, or a
                  specified percentage thereof, in Common Stock, that the
                  conditions to such manner of payment set forth in Section
                  7.1(c) have been or will be complied with; and

         (4)      whether the Company desires the Trustee to give the Company
                  Notice required by Section 7.1(d).

         (c) Payment by Issuance of Shares of Common Stock. At the option of the
Company, the Purchase Price of Senior Notes in respect of which a Purchase
Notice pursuant to Section 7.1(a) has been given, or a specified percentage
thereof, may be paid by the Company by the issuance of a number of shares of
Common Stock equal to the quotient obtained by dividing (i) the amount of cash
to which the Holders of Senior Notes would have been entitled had the Company
elected to pay all or such specified percentage, as the case may be, of the
Purchase Price of such Senior Notes in cash by (ii) the Market Price of shares
of Common Stock, subject to the next succeeding paragraph.

         The Company will not issue a fractional shares of Common Stock in
payment of the Purchase Price. Instead the Company will pay cash for the current
Market Price of the fractional share. The current Market Price of a fraction of
a share shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent with one-half cent being rounded
upward. It is understood that if a Holder elects to have more than one Senior
Note purchased, the number of shares of Common Stock shall be based on the
aggregate amount of Senior Notes to be purchased.

         If the Company elects to purchase the Senior Notes by the issuance of
shares of Common Stock, the Company Notice, as provided in Section 7.1(d), shall
be sent to the Holders (and to beneficial owners as required by applicable law)
not later than the Company Notice Date.

                                       12
<PAGE>
         The Company's right to exercise its election to purchase Senior Notes
through the issuance of shares of Common Stock shall be conditioned upon:

         (1)      the Company's not having given its Company Notice of an
                  election to pay entirely in cash and its giving of timely
                  Company Notice of election to purchase all or a specified
                  percentage of the Senior Notes with shares of Common Stock as
                  provided herein;

         (2)      the registration of such shares of Common Stock under the
                  Securities Act of 1933, as amended (the "Securities Act"), or
                  the Securities Exchange Act of 1934, as amended (the "Exchange
                  Act"), in each case, if required;

         (3)      such shares of Common Stock shall have been listed on the
                  principal national securities exchange (currently the NYSE) on
                  which the Common Stock is listed;

         (4)      any necessary qualification or registration under applicable
                  state securities laws or the availability of an exemption from
                  such qualification and registration; and

         (5)      the receipt by the Trustee of an Officers' Certificate and an
                  Opinion of Counsel each stating that (A) the terms of the
                  issuance of the shares of Common Stock are in conformity with
                  this Certificate and the Indenture and (B) the shares of
                  Common Stock to be issued by the Company in payment of the
                  Purchase Price in respect of Senior Notes have been duly
                  authorized and, when issued and delivered pursuant to the
                  terms of this Certificate and the Indenture in payment of the
                  Purchase Price in respect of the Senior Notes, will be validly
                  issued, fully paid and non-assessable and, to the best of such
                  counsel's knowledge, free from preemptive rights, and, in the
                  case of such Officers' Certificate, stating that the
                  conditions above and the condition set forth in the second
                  succeeding sentence have been satisfied and, in the case of
                  such Opinion of Counsel, stating that the conditions above
                  have been satisfied.

         Such Officers' Certificate shall also set forth (i) the number of
shares of Common Stock to be issued for each $1,000 principal amount of Senior
Notes, (ii) the Sale Price of a share of Common Stock on each trading day during
the period commencing on the first trading day of the period during which the
Market Price is calculated and ending on the third Business Day prior to the
applicable Purchase Date and (iii) the Market Price of the Common Stock. The
Company may pay the Purchase Price (or any portion thereof) in shares of Common
Stock only if the information necessary to calculate the Market Price is
published in a daily newspaper of national circulation or is otherwise publicly
available (e.g., by dissemination on the World Wide Web or by other public
means). If the foregoing conditions are not satisfied with respect to a Holder
or Holders prior to the close of business on the Purchase Date and the Company
has elected to purchase the Senior Notes pursuant to this Section 7.1 through
the issuance of shares of Common Stock, the Company shall pay the entire
Purchase Price of the Senior Notes of such Holder or Holders in cash.

                                       13
<PAGE>
         The "Market Price" means the average of the Sale Price of the shares of
Common Stock for the five NYSE trading day period ending on the third Business
Day prior to the applicable Purchase Date or Change in Control Purchase Date, as
the case may be (if the third Business Day prior to the Purchase Date or Change
in Control Purchase Date, as the case may be, is a NYSE trading day, or if not,
then on the last NYSE trading day prior to such third Business Day),
appropriately adjusted to take into account the occurrence, during the period
commencing on the first of the NYSE trading days during such five NYSE trading
day period and ending on such Purchase Date or Change in Control Purchase Date,
as the case may be, of any event described in Section 5.6; subject, however, to
the conditions set forth in Sections 5.7 and 5.8 hereof. If the shares of Common
Stock are not listed on the NYSE, then the Market Price shall be determined by
reference to the Sale Price as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"). In the absence of such
quotations, the Company shall be entitled to determine the Market Price by
reference to the Sales Price on any date on the basis of such quotations as it
considers appropriate.

         The "Sale Price" of the shares of Common Stock on any date means the
closing per share sale price on the NYSE (or, if no closing sale price is
reported, the average of the bid and ask prices or, if more than one in either
case, the average of the average bid and average ask prices) on such date as
reported on the NYSE or, if the shares of Common Stock are not listed on the
NYSE, as reported by the NASDAQ. In the absence of such quotations, the Company
shall be entitled to determine the Sales Price on any date on the basis of such
quotations as it considers appropriate.

         Upon determination of the actual number of shares of Common Stock to be
issued for each $1,000 principal amount of Senior Notes, the Company will
publish such determination on the Company's Web site on the World Wide Web or
through such other public medium as the Company may use at such time and through
a press release on Dow Jones & Company, Inc. or Bloomberg Business News not
later than the third Business Day prior to the relevant Purchase Date.

         (d) Notice of Election. In connection with any purchase of Senior Notes
pursuant to the first paragraph of Paragraph 5 of the Senior Notes, the Company
shall give notice to Holders setting forth information specified in this Section
7.1(d) (the "Company Notice").

         In the event the Company has elected to pay the Purchase Price (or a
specified percentage thereof) with shares of Common Stock, the Company Notice
shall:

                  (a) state that each Holder will receive shares of Common Stock
         with a Market Price determined as of a specified date prior to the
         Purchase Date equal to such specified percentage of the Purchase Price
         of the Senior Notes held by such Holder (except any cash amount to be
         paid in lieu of fractional shares);

                  (b) set forth the method of calculating the Market Price of
         the shares of Common Stock; and

                  (c) state that because the Market Price of shares of Common
         Stock will be determined prior to the Purchase Date, Holders will bear
         the market risk with

                                       14
<PAGE>
         respect to the value of the shares of Common Stock to be received from
         the date such Market Price is determined to the Purchase Date.

         In any case, each Company Notice shall include a form of Purchase
Notice to be completed by a Holder of Senior Notes and shall state:

         (1)      the Purchase Price and the Conversion Price;

         (2)      the name and address of the Paying Agent and the Conversion
                  Agent;

         (3)      that Senior Notes as to which a Purchase Notice has been given
                  may be converted if they are otherwise convertible only in
                  accordance with Article 5 hereof and Paragraph 6 of the Senior
                  Notes if the applicable Purchase Notice has been withdrawn in
                  accordance with the terms of this Indenture;

         (4)      that Senior Notes must be surrendered to the Paying Agent to
                  collect payment;

         (5)      that the Purchase Price for any security as to which a
                  Purchase Notice has been given and not withdrawn will be paid
                  promptly following the later of the Purchase Date and the time
                  of surrender of such Senior Note as described in (4);

         (6)      the procedures the Holder must follow to exercise its put
                  rights under Section 7.1 and a brief description of those
                  rights;

         (7)      briefly, the conversion rights of the Senior Notes;

         (8)      the procedures for withdrawing a Purchase Notice (including,
                  without limitation, for a conditional withdrawal pursuant to
                  the terms of Section 7.1(a)(1)(D) or Section 7.3);

         (9)      that, unless the Company defaults in making payment on Senior
                  Notes for which a Purchase Notice has been submitted, interest
                  on such Senior Notes will cease to accrue on the Purchase
                  Date; and

         (10)     the CUSIP number of the Senior Notes.

         At the Company's request, the Trustee shall give such Company Notice in
the Company's name and at the Company's expense; provided, however, that, in all
cases, the text of such Company Notice shall be prepared by the Company.

         (e) Covenants of the Company. All shares of Common Stock delivered upon
purchase of the Senior Notes shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and nonassessable, and
shall be free from preemptive rights and free of any lien or adverse claim.

                                       15
<PAGE>
         (f) Procedure upon Purchase. The Company shall deposit cash (in respect
of cash purchases under Section 7.1 or for fractional shares, as applicable) or
shares of Common Stock in respect of payment by issuance of shares of Common
Stock under Section 7.1(c), except for fractional shares, or a combination
thereof, as applicable, at the time and in the manner as provided in Section
7.4, sufficient to pay the aggregate Purchase Price of all Senior Notes to be
purchased pursuant to this Section 7.1. As soon as practicable after the
Purchase Date, the Company shall deliver to each Holder entitled to receive
shares of Common Stock through the Paying Agent a certificate for the number of
full shares of Common Stock issuable in payment of the Purchase Price and cash
in lieu of any fractional shares. The person in whose name the certificate for
shares of Common Stock is registered shall be treated as a holder of record of
Common Stock on the Business Day following the Purchase Date. No payment or
adjustment will be made for dividends on the shares of Common Stock the record
date for which occurred on or prior to the Purchase Date.

         (g) Taxes. If a Holder of a purchased Senior Note (pursuant to this
Section 7.1 or Section 7.2) is paid in shares of Common Stock, the Company shall
pay any documentary, stamp or similar issue or transfer tax due on such issue of
Common Stock. However, the Holder shall pay any such tax which is due because
the Holder requests the Common Stock to be issued in a name other than the
Holder's name. The Paying Agent may refuse to deliver the certificates
representing the shares of Common Stock being issued in a name other than the
Holder's name until the Paying Agent receives a sum sufficient to pay any tax
which will be due because the shares of Common Stock are to be issued in a name
other than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.

         Section 7.2 Purchase of Senior Notes at Option of the Holder upon
Change in Control. (a) If a Change in Control occurs, all but not less than all
of the Senior Notes held by any Holder shall be purchased by the Company, at the
option of the Holder thereof, at a purchase price specified in Paragraph 5 of
the Senior Notes (the "Change in Control Purchase Price"), as of the date that
is 45 days after the date of the Change in Control Notice delivered by the
Company (the "Change in Control Purchase Date"), subject to satisfaction by or
on behalf of the Holder of the requirements set forth in Section 7.2(c).

         A "Change in Control" shall be deemed to have occurred at such time as
either of the following events shall occur:

         (i) any person, including any syndicate or group deemed to be a
"person" under Section 13(d)(3) of the Exchange Act, acquires beneficial
ownership, directly or indirectly, through a purchase, merger or other
acquisition transaction or series of transactions, of shares of the Company's
Capital Stock entitling the person to exercise 50% or more of the total voting
power of all shares of the Company's Capital Stock that are entitled to vote
generally in elections of directors, other than an acquisition by the Company,
any of its Subsidiaries or any of its employee benefit plans; or

         (ii) the Company merges or consolidates with or into any other person,
any merger of another person into the Company, or the Company conveys, sells,
transfers or leases all or substantially all of its assets to another person,
other than any transaction: (A) that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of the

                                       16
<PAGE>
Company's Capital Stock, or (B) pursuant to which the holders of Common Stock
immediately prior to the transaction have the entitlement to exercise, directly
or indirectly, 50% or more of the total voting power of all shares of Capital
Stock entitled to vote generally in the election of directors of the continuing
or surviving corporation immediately after the transaction, or (C) which is
effected solely to change the Company's jurisdiction of incorporation and
results in a reclassification, conversion or exchange of outstanding shares of
the Company's Common Stock solely into shares of Common Stock of the surviving
entity.

         Notwithstanding the foregoing provisions of this Section 7.2, a Change
in Control shall not be deemed to have occurred if (A) the closing price per
share of Common Stock on the NYSE for any five NYSE trading days within the
period of 10 consecutive NYSE trading days ending immediately after the later of
the Change in Control or the public announcement of the Change in Control, in
the case of a Change in Control relating to an acquisition of Capital Stock, or
the period of 10 consecutive NYSE trading days ending immediately before the
Change in Control, in the case of Change in Control relating to a merger,
consolidation or asset sale, equals or exceeds 105% of the Conversion Price of
the Senior Notes in effect on each of those NYSE trading days or (B) all of the
consideration (excluding cash payments for fractional shares and cash payments
made pursuant to dissenters' appraisal rights) in a merger or consolidation
otherwise constituting a Change in Control under clause (i) and/or clause (ii)
above consists of shares of common stock traded on a national securities
exchange or quoted on the Nasdaq National Market (or will be so traded or quoted
immediately following the merger or consolidation) and as a result of the merger
or consolidation the Senior Notes become convertible into such common stock. For
purposes of this Section 7.2, (x) the Conversion Price is equal to $1,000
divided by the Conversion Rate, (y) whether a person is a "beneficial owner"
shall be determined in accordance with Rule 13d-3 under the Exchange Act and (z)
"person" includes any syndicate or group that would be deemed to be a "person"
under Section 13(d)(3) of the Exchange Act. If the shares of Common Stock are
not listed on the NYSE at the relevant time, closing prices and trading days
shall be calculated as reported by the NASDAQ.

         At the option of the Company, the Change in Control Purchase Price of
Senior Notes in respect of which a Change in Control Purchase Notice pursuant to
Section 7.2(b) has been given may be paid by the Company by the issuance of a
number of shares of Common Stock equal to the quotient obtained by dividing (i)
the product of (A) the amount of cash to which the Holders of Senior Notes would
have been entitled had the Company elected to pay all of the Change in Control
Purchase Price of such Senior Notes in cash and (B) 0.95, by (ii) the Market
Price of shares of Common Stock, subject to the next succeeding paragraph.

         The Company will not issue fractional shares of Common Stock in payment
of the Change in Control Purchase Price. Instead the Company will pay cash for
the current Market Price of the fractional share. The current Market Price of a
fraction of a share shall be determined by multiplying the Market Price by such
fraction and rounding the product to the nearest whole cent, with one-half cent
being rounded upward. It is understood that if a Holder elects to have more than
one Senior Note purchased, the number of shares of Common Stock shall be based
on the aggregate amount of Senior Notes to be purchased.

         In the event that the Company is unable to purchase the Senior Notes of
a Holder or Holders for shares of Common Stock because any necessary
qualifications or registrations of the

                                       17
<PAGE>
shares of Common Stock under applicable state securities laws cannot be
obtained, the Company may purchase the Senior Notes of such Holder or Holders
for cash. The Company may not change its election with respect to the
consideration to be paid once the Company has given its Change in Control Notice
to Holders of Senior Notes except pursuant to this Section 7.2(a) or pursuant to
Section 7.2(b) in the event of a failure to satisfy, prior to the close of
business on the Change in Control Purchase Date, any condition to the payment of
the Change in Control Purchase Price in Common Stock.

         At least three Business Days before the Change in Control Notice Date
(as defined below), the Company shall deliver an Officers' Certificate to the
Trustee specifying:

         (i) the manner of payment selected by the Company;

         (ii) the information required by Section 7.2(b);

         (iii) if the Company elects to pay the Change in Control Purchase Price
in Common Stock, that the conditions to such manner of payment set forth in
Section 7.2(a) have been or will be complied with; and

         (iv) whether the Company desires the Trustee to give the Change in
Control Notice required by Section 7.2(b).

         The Company's right to exercise its election to purchase Senior Notes
through the issuance of shares of Common Stock shall be conditioned upon:

         (i) the Company's giving of timely Change in Control Notice to purchase
all of the Senior Notes with shares of Common Stock as provided herein;

         (ii) the registration of such shares of Common Stock under the
Securities Act or the Exchange Act, in each case, if required;

         (iii) such shares of Common Stock shall have been listed on the
principal national securities exchange (currently the NYSE) on which the Common
Stock is listed;

         (iv) any necessary qualification or registration under applicable state
securities laws or the availability of an exemption from such qualification and
registration; and

         (v) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the shares
of Common Stock are in conformity with this Certificate and the Indenture and
(B) the shares of Common Stock to be issued by the Company in payment of the
Change in Control Purchase Price in respect of Senior Notes have been duly
authorized and, when issued and delivered pursuant to the terms of this
Certificate and the Indenture in payment of the Change in Control Purchase Price
in respect of the Senior Notes, will be validly issued, fully paid and
non-assessable and, to the best of such counsel's knowledge, free from
preemptive rights, and, in the case of such Officers' Certificate, stating that
the conditions above and the condition set forth in the second succeeding
sentence have been satisfied and, in the case of such Opinion of Counsel,
stating that the conditions above have been satisfied.

                                       18
<PAGE>
         Such Officers' Certificate shall also set forth (i) the number of
shares of Common Stock to be issued for each $1,000 principal amount of Senior
Notes, (ii) the Sale Price of a share of Common Stock on each trading day during
the period commencing on the first trading day of the period during which the
Market Price is calculated and ending on the third Business Day prior to the
Change in Control Purchase Date and (iii) the Market Price of the Common Stock.
The Company may pay the Change in Control Purchase Price in shares of Common
Stock only if the information necessary to calculate the Market Price is
published in a daily newspaper of national circulation or is otherwise publicly
available (e.g., by dissemination on the World Wide Web or by other public
means). If the foregoing conditions are not satisfied with respect to a Holder
or Holders prior to the close of business on the Change in Control Purchase Date
and the Company has elected to purchase the Senior Notes pursuant to this
Section 7.2 through the issuance of shares of Common Stock, the Company shall
pay the entire Purchase Price of the Senior Notes of such Holder or Holders in
cash.

         Upon determination of the actual number of shares of Common Stock to be
issued for each $1,000 principal amount of Senior Notes (not later than the
third Business Day prior to the Change in Control Purchase Date), the Company
will publish such determination on the Company's Web site on the World Wide Web
or through such other public medium as the Company may use at such time and
through a press release on Dow Jones & Company, Inc. or Bloomberg Business News
not later than the third Business Day prior to the Change in Control Purchase
Date.

         (b) No later than 30 days after the occurrence of a Change in Control,
the Company shall mail a written notice of the Change in Control (the "Change in
Control Notice", the date of such mailing, the "Change in Control Notice Date")
by first-class mail to the Trustee and to each Holder (and to beneficial owners
to the extent required by applicable law). The notice shall include a form of
Change in Control Purchase Notice to be completed by the Holder that wishes to
exercise rights under this Section 7.2 and shall state:

             (1)          briefly, the events causing a Change in Control and
                          the date of such Change in Control;

             (2)          the date by which the Change in Control Purchase
                          Notice pursuant to this Section 7.2 must be given;

             (3)          the Change in Control Purchase Date;

             (4)          the Change in Control Purchase Price;

             (5)          the name and address of the Paying Agent and the
                          Conversion Agent;

             (6)          the Conversion Rate and any adjustments thereto;

             (7)          that Senior Notes as to which a Change in Control
                          Purchase Notice has been given may be converted if
                          they are otherwise convertible pursuant to Article 5
                          hereof and paragraph 6 of the Notes only if

                                       19
<PAGE>
                          the Change in Control Purchase Notice has been
                          withdrawn in accordance with the terms of this
                          Indenture;

             (8)          that Senior Notes must be surrendered to the Paying
                          Agent to collect payment;

             (9)          that the Change in Control Purchase Price for any
                          Senior Note as to which a Change in Control Purchase
                          Notice has been duly given and not withdrawn will be
                          paid promptly following the later of the Change in
                          Control Purchase Date and the time of surrender of
                          such Senior Note as described in (8);

             (10)         briefly, the procedures the Holder must follow to
                          exercise rights under this Section 7.2;

             (11)         briefly, the conversion rights, if any, of the Senior
                          Notes;

             (12)         the procedures for withdrawing a Change in Control
                          Purchase Notice;

             (13)         that, unless the Company defaults in making payment of
                          such Change in Control Purchase Price, interest on
                          Senior Notes surrendered for purchase by the Company
                          will cease to accrue on and after the Change in
                          Control Purchase Date; and

             (14)         the CUSIP numbers of the Senior Notes.

In the event the Company has elected to pay the Change in Control Purchase Price
with shares of Common Stock, the Change in Control Notice shall:

             (1)          state that the Company will pay the Change in Control
                          Purchase Price with shares of Common Stock;

             (2)          set forth the method of calculating the number of
                          shares of Common Stock to be paid; and

             (3)          state that because the Market Price of shares of
                          Common Stock will be determined prior to the Change in
                          Control Purchase Date, Holders will bear the market
                          risk with respect to the value of the shares of Common
                          Stock to be received from the date such Market Price
                          is determined to the Change in Control Purchase Date.

         (c) A Holder may exercise its rights specified in Section 7.2(a) upon
delivery of a written notice of purchase (a "Change in Control Purchase Notice")
to the Paying Agent at any time on or prior to the 30th day after the Company
delivers its Change in Control Purchase Notice, stating:

                                       20
<PAGE>
         (1)      the certificate number of the Senior Note which the Holder
                  will deliver to be purchased;

         (2)      the portion of the principal amount of the Senior Note which
                  the Holder will deliver to be purchased, which portion must be
                  $1,000 or an integral multiple thereof;

         (3)      that such Senior Note shall be purchased pursuant to the terms
                  and conditions specified in Paragraph 5 of the Senior Notes;
                  and

         (4)      in the event the Company elects, pursuant to Section 7.2(b),
                  to pay the Change in Control Purchase Price in shares of
                  Common Stock but the Change in Control Purchase Price shall
                  ultimately be payable to such Holder in cash because any of
                  the conditions to payment of the Change in Control Purchase
                  Price in shares of Common Stock are not satisfied prior to the
                  close of business on the Change in Control Purchase Date,
                  whether such Holder elects (i) to withdraw such Change in
                  Control Purchase Notice as to some or all of the Senior Notes
                  to which such Change in Control Purchase Notice relates
                  (stating the principal amount and certificate numbers, if any,
                  of the Senior Notes as to which such withdrawal shall relate),
                  or (ii) to receive cash in respect of the entire Change in
                  Control Purchase Price for all Senior Notes (or portions
                  thereof) to which such Change in Control Purchase Notice
                  relates.

         If a Holder, in such Holder's Change in Control Purchase Notice and in
any written notice of withdrawal delivered by such Holder pursuant to the terms
of Section 7.3, fails to indicate such Holder's choice with respect to the
election set forth in clause (4) above, such Holder shall be deemed to have
elected to receive cash in respect of the Change in Control Purchase Price for
all Senior Notes subject to such Change in Control Purchase Notice in the
circumstances set forth in such clause (4).

         The delivery of such Senior Note to the Paying Agent with the Change in
Control Purchase Notice (together with all necessary endorsements) at the
offices of the Paying Agent shall be a condition to the receipt by the Holder of
the Change in Control Purchase Price therefor; provided, however, that such
Change in Control Purchase Price shall be so paid pursuant to this Section 7.2
only if the Senior Note so delivered to the Paying Agent shall conform in all
respects to the description thereof set forth in the related Change in Control
Purchase Notice.

         The Company shall purchase from the Holder thereof, pursuant to this
Section 7.2, a portion of a Senior Note if the principal amount of such portion
is $1,000 or an integral multiple of $1,000. Provisions of this Certificate and
the Indenture that apply to the purchase of all of a Senior Note also apply to
the purchase of such portion of such Senior Note.

         Any purchase by the Company contemplated pursuant to the provisions of
this Section 7.2 shall be consummated by the delivery of the consideration to be
received by the Holder on the Change in Control Purchase Date.

                                       21
<PAGE>
         (d) Covenants of the Company. All shares of Common Stock delivered upon
purchase of the Senior Notes shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and nonassessable, and
shall be free from preemptive rights and free of any lien or adverse claim.

         (e) Procedure upon Purchase. The Company shall deposit cash (in respect
of a cash purchases under Section 7.2 or for fractional shares of Common Stock,
as applicable) or shares of Common Stock, or a combination thereof, as
applicable, at the time and in the manner as provided in Section 7.4, sufficient
to pay the aggregate Change in Control Purchase Price of all Senior Notes to be
purchased pursuant to this Section 7.2. As soon as practicable after the Change
in Control Purchase Date, the Company shall deliver to each Holder entitled to
receive shares of Common Stock through the Paying Agent a certificate for the
number of full shares of Common Stock issuable in payment of the Change in
Control Purchase Price and cash in lieu of any fractional shares. The person in
whose name the certificate for shares of Common Stock is registered shall be
treated as a holder of record of Common Stock on the Business Day following the
Change in Control Purchase Date. No payment or adjustment will be made for
dividends on the shares of Common Stock the record date for which occurred on or
prior to the Change in Control Purchase Date.

         Section 7.3. Effect of Purchase Notice or Change in Control Purchase
Notice. Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 7.1(a) or Section 7.2(c), as
applicable, the Holder of the Senior Note in respect of which such Purchase
Notice or Change in Control Purchase Notice, as the case may be, was given shall
(unless such Purchase Notice or Change in Control Purchase Notice, as the case
may be, is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Purchase Price or Change in Control Purchase
Price, as the case may be, with respect to such Senior Note. Such Purchase Price
or Change in Control Purchase Price shall be paid to such Holder, subject to
receipts of funds and/or securities by the Paying Agent, promptly following the
later of (x) the Purchase Date or the Change in Control Purchase Date, as the
case may be, with respect to such Senior Note (provided the conditions in
Section 7.1(a) or Section 7.2(c), as applicable, have been satisfied) and (y)
the time of delivery of such Senior Note to the Paying Agent by the Holder
thereof in the manner required by Section 7.1(a) or Section 7.2(c), as
applicable. Senior Notes in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given by the Holder thereof may not be
converted pursuant to the provisions hereof on or after the date of the delivery
of such Purchase Notice or Change in Control Purchase Notice, unless such
Purchase Notice or Change in Control Purchase Notice has first been validly
withdrawn as specified in the following two paragraphs.

         A Purchase Notice or Change in Control Purchase Notice may be withdrawn
by means of a written notice of withdrawal delivered to the office of the Paying
Agent in accordance with the Purchase Notice or Change in Control Purchase
Notice, as the case may be, at any time prior to the close of business on the
last Business Day prior to the Purchase Date or Change in Control Purchase Date,
as the case may be, specifying:

         (1)      the certificate number, if any, of the Senior Note in respect
                  of which such notice of withdrawal is being submitted,

                                       22


<PAGE>



         (2)      the principal amount of the Senior Note with respect to which
                  such notice of withdrawal is being submitted, and

         (3)      the principal amount, if any, of such Senior Note which
                  remains subject to the original Purchase Notice or Change in
                  Control Purchase Notice, as the case may be, and which has
                  been or will be delivered for purchase by the Company.

         A written notice of withdrawal of a Purchase Notice or Change in
Control Purchase Notice, as the case may be, may be in the form set forth in the
preceding paragraph or may be in the form of (i) a conditional withdrawal
contained in a Purchase Notice pursuant to the terms of Section 7.1(a)(1)(D) or
a Change in Control Purchase Notice pursuant to the terms of Section 7.2(c)(4),
as the case may be, or (ii) a conditional withdrawal containing the information
set forth in Section 7.1(a)(1)(D) or 7.2(c)(4), as the case may be, and the
preceding paragraph and contained in a written notice of withdrawal delivered to
the Paying Agent as set forth in the preceding paragraph.

         There shall be no purchase of any Senior Notes pursuant to Section 7.1
or 7.2 if there has occurred (prior to, on or after, as the case may be, the
giving, by the Holders of such Senior Notes, of the required Purchase Notice or
Change in Control Purchase Notice, as the case may be) and is continuing an
Event of Default (other than a default in the payment of the Purchase Price or
Change in Control Purchase Price, as the case may be, with respect to such
Senior Notes). The Paying Agent will promptly return to the respective Holders
thereof any Senior Notes (x) with respect to which a Purchase Notice or Change
in Control Purchase Notice, as the case may be, has been withdrawn in compliance
with this Certificate or the Indenture, or (y) held by it during the continuance
of an Event of Default (other than a default in the payment of the Purchase
Price or Change in Control Purchase Price, as the case may be, with respect to
such Senior Notes) in which case, upon such return, the Purchase Notice or
Change in Control Purchase Notice with respect thereto shall be deemed to have
been withdrawn.

         Section 7.4. Deposit of Purchase Price or Change in Control Purchase
Price. Prior to 10:00 a.m. (local time in the City of New York) on the Purchase
Date or the Change in Control Purchase Date, as the case may be, the Company
shall deposit with the Trustee or with the Paying Agent (or, if the Company or a
Subsidiary or an Affiliate of either of them is acting as the Paying Agent,
shall segregate and hold in trust as provided in the Indenture) an amount of
cash (in immediately available funds if deposited on such Business Day) or
Common Stock, if permitted hereunder, sufficient to pay the aggregate Purchase
Price or Change in Control Purchase Price, as the case may be, of all the Senior
Notes or portions thereof which are to be purchased as of the Purchase Date or
Change in Control Purchase Date, as the case may be.

         Section 7.5 Senior Notes Purchased in Part. Any certificated Senior
Note which is to be purchased only in part shall be surrendered at the office of
the Paying Agent (with, if the Company or the Trustee 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 such Holder's
attorney duly authorized in writing) and the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Senior Note,
without service charge, a new Senior Note or Senior Notes, of any authorized
denomination as requested by such

                                       23
<PAGE>
Holder in aggregate principal amount equal to, and in exchange for, the portion
of the principal amount of the Senior Note so surrendered which is not
purchased.

         Section 7.6 Covenant to Comply With Securities Laws Upon Purchase of
Senior Notes. When complying with the provisions of Section 7.1 or 7.2 hereof
(provided that such offer or purchase constitutes an "issuer tender offer" for
purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or
purchase), the Company shall (i) comply with Rule 13e-4 and Rule 14e-1 (or any
successor provision) under the Exchange Act, (ii) file the related Schedule TO
(or any successor schedule, form or report) under the Exchange Act, and (iii)
otherwise comply with all Federal and state securities laws so as to permit the
rights and obligations under Sections 7.1 and 7.2 to be exercised in the time
and in the manner specified in Sections 7.1 and 7.2.

         Section 7.7. Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company any cash or shares of Common Stock that remain
unclaimed as provided in Paragraph 9 of the Senior Notes, together with interest
or dividends, if any, thereon held by them for the payment of the Purchase Price
or Change in Control Purchase Price, as the case may be; provided, however, that
to the extent that the aggregate amount of cash or shares of Common Stock
deposited by the Company pursuant to Section 7.4 exceeds the aggregate Purchase
Price or Change in Control Purchase Price, as the case may be, of the Senior
Notes or portions thereof which the Company is obligated to purchase as of the
Purchase Date or Change in Control Purchase Date, as the case may be, then,
unless otherwise agreed in writing with the Company, promptly after the Business
Day following the Purchase Date or Change in Control Purchase Date, as the case
may be, the Trustee shall return any such excess to the Company together with
interest or dividends, if any, thereon.

                  ARTICLE 8 - RESTRICTIONS ON TRANSFER; LEGENDS

         Section 8.1. Global Senior Notes. The Senior Notes shall be issued in
the form of one or more Global Senior Notes and shall bear the following legends
concerning restrictions on transfer:

THIS SENIOR NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS
SENIOR NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS SENIOR NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS SENIOR
NOTE 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 SENIOR NOTE AGREES FOR THE BENEFIT OF CALPINE CORPORATION
THAT THIS SENIOR NOTE AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
SENIOR NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(A) (1)TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL

                                       24
<PAGE>
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO
THE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.

THIS SENIOR NOTE, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND
ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO
MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS SENIOR NOTE AND
ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR
INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF
RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SENIOR NOTE AND SUCH SHARES
SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SENIOR NOTE AND ANY SUCH SHARES TO
HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.

         Section 8.2. Transfer of Global Senior Note. (a) A Global Senior Note
may not be transferred, in whole or in part, to any person other than the
Depositary or a nominee or any successor thereof, and no such transfer to any
such other person may be registered; provided that this Section 8.2(a) shall not
prohibit any transfer of a Senior Note that is issued in exchange for a Global
Senior Note but is not itself a Global Senior Note. No transfer of a Global
Senior Note to any person shall be effective under this Certificate, the
Indenture or the Global Senior Notes unless and until such Global Senior Note
has been registered in the name of such person. Nothing in this Section 8.2
shall prohibit or render ineffective any transfer of a beneficial interest in a
Global Senior Note effected in accordance with the other provisions of this
Article 8.

         (b) Restrictions on Transfer of a Beneficial Interest in a Global
Senior Note for a Certificated Senior Note. A beneficial interest in a Global
Senior Note may not be exchanged for a certificated Senior Note except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a transfer of a beneficial interest in a Global Senior Note in accordance with
Applicable Procedures for a certificated Senior Note in the form satisfactory to
the Trustee, together with:

                  (i) so long as the Global Notes are "Restricted Securities"
         (as such term is used in accordance with the restrictions on transfer
         and resale set out in the Securities Act), certification in the form
         set forth in Exhibit A-1;

                  (ii) written instructions to the Trustee to make, or direct
         the Registrar to make, an adjustment on its books and records with
         respect to such Global Senior Note to reflect a decrease in the
         aggregate principal amount of the Senior Notes represented by the
         Global Senior Notes, such instructions to contain information regarding
         the Depositary account to be credited with such decrease; and

                                       25
<PAGE>
                  (iii) if the Company so requests, an opinion of counsel or
         other evidence reasonably satisfactory to it as to the compliance with
         the restrictions set forth in the Legend, then the Trustee shall cause,
         or direct the Registrar to cause, in accordance with the standing
         instructions and procedures existing between the Depositary and the
         Registrar, the aggregate principal amount of Senior Notes represented
         by the Global Senior Note to be decreased by the aggregate principal
         amount of the certificated Senior Note to be issued, shall issue such
         certificated Senior Note and shall debit or cause to be debited to the
         account of the person specified in such instructions a beneficial
         interest in the Global Senior Note equal to the principal amount of the
         certificated Senior Note so issued.

         (c) Transfer and Exchange of Certificated Senior Notes. When
certificated Senior Notes are presented to the Registrar with a request:

         (i) to register the transfer of such certificated Senior Notes; or

         (ii) to exchange such Certificated Securities for an equal principal
amount of certificated Senior Notes of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Certificated Senior Notes surrendered for transfer or exchange:

         (4) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing; and

         (5) so long as such Senior Notes are Restricted Securities, such Senior
Notes are being transferred or exchanged pursuant to an effective registration
statement under the Securities Act or pursuant to clause (A), (B) or (C) below,
and are accompanied by the following additional information and documents, as
applicable:

         (A)      if such certificated Senior Note are being delivered to the
                  Registrar by a Holder for registration in the name of such
                  Holder, without transfer, a certification from such Holder to
                  that effect; or

         (B)      if such certificated Senior Note are being transferred to the
                  Company, a certification to that effect; or

         (C)      if such certificated Senior Note are being transferred
                  pursuant to an exemption from registration, (i) a
                  certification to that effect (in the form set forth in Exhibit
                  A-1, if applicable) and (ii) if the Company so requests, an
                  opinion of counsel or other evidence reasonably satisfactory
                  to it as to the compliance with the restrictions set forth in
                  the Legend.

                                       26
<PAGE>
         (d) Restrictions on Transfer of a Certificated Senior Note for a
Beneficial Interest in a Global Senior Note. A certificated Senior Note may not
be exchanged for a beneficial interest in a Global Senior Note except upon
satisfaction of the requirements set forth below.

         Upon receipt by the Trustee of a certificated Senior Note, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:

                  (i) so long as the Senior Notes are Restricted Securities,
         certification, in the form set forth in Exhibit A-2, that such
         certificated Senior Note is being transferred to a "Qualified
         Institutional Buyer" (as defined in the Securities Act) in accordance
         with Rule 144A; and

                  (ii) written instructions directing the Trustee to make, or to
         direct the Registrar to make, an adjustment on its books and records
         with respect to such Global Senior Note to reflect an increase in the
         aggregate principal amount of the Senior Notes represented by the
         Global Senior Note, such instructions to contain information regarding
         the Depositary account to be credited with such increase, then the
         Trustee shall cancel such certificated Senior Note and cause, or direct
         the Registrar to cause, in accordance with the standing instructions
         and procedures existing between the Depositary and the Registrar, the
         aggregate principal amount of Senior Notes represented by the Global
         Senior Notes to be increased by the aggregate principal amount of the
         certificated Senior Note to be exchanged, and shall credit or cause to
         be credited to the account of the person specified in such instructions
         a beneficial interest in the Global Senior Note equal to the principal
         amount of the certificated Senior Note so cancelled. If no Global
         Senior Notes are then outstanding, the Company shall issue and the
         Trustee shall authenticate, upon written order of the Company in the
         form of an Officers' Certificate, a new Global Senior Note in the
         appropriate principal amount.

         Subject to the succeeding paragraph, every Senior Note shall be subject
to the restrictions on transfer provided in the Legend including the delivery of
an opinion of counsel, if so provided. Whenever any Restricted Security is
presented or surrendered for registration of transfer or for exchange for a
Senior Note registered in a name other than that of the Holder, such Security
must be accompanied by a certificate in substantially the form set forth in
Exhibit A-1, dated the date of such surrender and signed by the Holder of such
Senior Note, as to compliance with such restrictions on transfer. The Registrar
shall not be required to accept for such registration of transfer or exchange
any Senior Note not so accompanied by a properly completed certificate.

         The restrictions imposed by the Legend upon the transferability of any
Senior Note shall terminate at such times described in and in accordance with
the provisions hereof.

         As used in the preceding two paragraphs of this Section 8.2(d), the
term "transfer" encompasses any sale, pledge, transfer, loan, hypothecation,
hedge or other disposition of any Senior Note.

                                       27




                                       1
<PAGE>
         The provisions of clauses (1), (2), (3), (4) and (5) below shall apply
only to Global Senior Notes:

         (1) Notwithstanding any other provisions of this Indenture or the
Senior Notes, except as provided in Section 8.2 hereof, a Global Senior Note
shall not be exchanged in whole or in part for a Senior Note registered in the
name of any person other than the Depositary or one or more nominees thereof,
provided that a Global Security may be exchanged for Senior Notes registered in
the names of any person designated by the Depositary in the event that (i) the
Depositary has notified the Company that it is unwilling or unable to continue
as Depositary for such Global Security or such Depositary has ceased to be a
"clearing agency" registered under the Exchange Act, and a successor Depositary
is not appointed by the Company within 90 days or (ii) an Event of Default has
occurred and is continuing with respect to the Senior Notes. Any Global Senior
Note exchanged pursuant to clause (i) above shall be so exchanged in whole and
not in part, and any Global Senior Note exchanged pursuant to clause (ii) above
may be exchanged in whole or from time to time in part as directed by the
Depositary. Any Senior Note issued in exchange for a Global Senior Note or any
portion thereof shall be a Global Senior Note; provided that any such Senior
Note so issued that is registered in the name of a person other than the
Depositary or a nominee thereof shall not be a Global Senior Note. The Company
may, in its sole discretion, determine not to have Senior Notes represented by
Global Senior Notes, in which case the Company shall issue Senior Notes in
exchange for each Global Senior Note.

         (2) Senior Notes issued in exchange for a Global Senior Note or any
portion thereof shall be issued in definitive, fully registered form, without
interest coupons, shall have an aggregate principal amount equal to that of such
Global Senior Note or portion thereof to be so exchanged, shall be registered in
such names and be in such authorized denominations as the Depositary shall
designate and shall bear the applicable legends provided for herein. Any Global
Senior Note to be exchanged in whole shall be surrendered by the Depositary to
the Trustee, as Registrar. With regard to any Global Senior Note to be exchanged
in part, either such Global Senior Note shall be so surrendered for exchange or,
if the Trustee is acting as custodian for the Depositary or its nominee with
respect to such Global Senior Note, the principal amount thereof shall be
reduced by an amount equal to the portion thereof to be so exchanged, by means
of an appropriate adjustment made on the records of the Trustee. Upon any such
surrender or adjustment, the Trustee shall authenticate and deliver the Senior
Note issuable on such exchange to or upon the order of the Depositary or an
authorized representative thereof.

         (3) Subject to the provisions of clause (5) below, the registered
Holder may grant proxies and otherwise authorize any person, including Agent
Members (as defined below) and persons that may hold interests through Agent
Members, to take any action which a holder is entitled to take under this
Certificate or the Senior Notes.

         (4) In the event of the occurrence of any of the events specified in
clause (1) above, the Company will promptly make available to the Trustee a
reasonable supply of certificated Senior Notes in definitive, fully registered
form, without interest coupons.

         (5) Neither any members of, or participants in, the Depositary
(collectively, the "Agent Members") nor any other persons on whose behalf Agent
Members may act shall

                                       28



                                       2
<PAGE>
have any rights under this Certificate with respect to any Global Senior Note
registered in the name of the Depositary or any nominee thereof, or under any
such Global Senior Note, and the Depositary or such nominee, as the case may be,
may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner and holder of such Global Senior Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or such nominee, as the case may be, or impair, as between the
Depositary, its Agent Members and any other person on whose behalf an Agent
Member may act, the operation of customary practices of such persons governing
the exercise of the rights of a holder of any Senior Note.

                            ARTICLE 9 - MISCELLANEOUS

         Section 9.1. Place of Payment. The principal of and interest on the
Senior Notes shall be payable and the Senior Notes shall be converted and
purchased at the office or agency of the Company maintained for that purpose,
pursuant to the Indenture, in The City and State of New York; provided, however,
that at the option of the Company such payment of interest may be made by wire
transfer to an account at a financial institution located in the United States
designated by the Person entitled thereto at least ten days prior to the payment
thereof or by check mailed to the Person entitled thereto at the address of such
Person as shall appear in the register for such Senior Notes.

         Section 9.2. Transfer and Exchange. (a) Subject to the provisions
below, upon surrender for registration of transfer of any Senior Note, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by the Holder or such Holder's attorney duly authorized in writing, at
the office or agency of the Company designated as Registrar or co-registrar
pursuant to Section 2.3 of the Original Indenture, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Senior Notes of any authorized
denomination or denominations, of a like aggregate principal amount. The Company
shall not charge a service charge for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges that may be imposed in connection with
the transfer or exchange of the Senior Notes from the Holder requesting such
transfer or exchange.

         At the option of the Holder, Senior Notes may be exchanged for other
Senior Notes of any authorized denomination or denominations, of a like
aggregate principal amount, upon surrender of the Senior Notes to be exchanged,
together with a written instrument of transfer satisfactory to the Registrar
duly executed by the Holder or such Holder's attorney duly authorized in
writing, at such office or agency. Whenever any Senior Notes are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Senior Notes which the Holder making the exchange is entitled to
receive.

         The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Senior Notes in respect of which a Purchase
Notice or Change in Control Purchase Notice has been given and not withdrawn by
the Holder thereof in accordance with the terms of this Certificate and the
Indenture (except, in the case of Senior Notes to be purchased in part, the
portion thereof not to be purchased).

                                       29



                                       3
<PAGE>
         (b) Notwithstanding any provision to the contrary herein, so long as a
Global Senior Note remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Senior Note, in whole or in part, shall be
made only in accordance with Sections 8.2 9.2(b) of this Certificate. Transfers
of a Global Senior Note shall be limited to transfers of such Global Senior Note
in whole or in part to the Depositary, to nominees of the Depositary or to a
successor of the Depositary or such successor's nominee.

         (c) Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Senior Notes.

         (d) Any Registrar appointed pursuant to Section 2.4 of the Original
Indenture shall provide to the Trustee such information as the Trustee may
reasonably require in connection with the delivery by such Registrar of Senior
Notes upon transfer or exchange of Senior Notes.

         (e) If Senior Notes are issued upon the transfer, exchange or
replacement of Senior Notes subject to restrictions on transfer and bearing the
legends set forth on the form of Senior Note attached hereto as Exhibit A
setting forth such restrictions (collectively, the "Legend"), or if a request is
made to remove the Legend on a Senior Note, the Senior Notes so issued shall
bear the Legend, or the Legend shall not be removed, as the case may be, unless
there is delivered to the Company and the Registrar such satisfactory evidence,
which shall include an Opinion of Counsel, as may be reasonably required by the
Company that neither the Legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions
of Rule 144A or Rule 144 under the Securities Act or that such Senior Notes are
not "restricted" within the meaning of Rule 144 under the Securities Act. Upon
(i) provision of such satisfactory evidence, or (ii) notification to the Trustee
and Registrar of the sale of such Senior Note pursuant to a registration
statement that is effective at the time of such sale, the Trustee, at the
written direction of the Company, shall authenticate and deliver a Senior Note
that does not bear the Legend. If the Legend is removed from the face of a
Senior Note and the Senior Note is subsequently held by the Company or an
Affiliate of the Company, the Legend shall be reinstated. The Company shall
inform the Trustee of the effectiveness of any registration statement
registering the Senior Notes under the Securities Act. The Trustee shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned Opinion of Counsel or registration statement.

         (f) All Senior Notes purchased by the Company from any Holder or
converted by any Holder are to be presented to the Trustee for cancellation and
shall promptly thereafter be cancelled

         Section 9.3. No Sinking Fund. The Senior Notes will not be subject to
the operation of any sinking fund or an analogous provision.

                                       30



                                       4
<PAGE>
         Section 9.4. Appointment of Conversion Agent. If the Company shall fail
to appoint a Conversion Agent for purposes of this Certificate and the
Indenture, the Trustee shall automatically be designated as the Conversion Agent
for purposes hereunder and under the Indenture.

                            [CONTINUED ON NEXT PAGE]

                                       31
<PAGE>
         IN WITNESS WHEREOF, we have hereunto signed our names on behalf of the
Company in our capacities as specified below as of the 26th day of December,
2001.



                                                 By:  /s/ Peter Cartwright
                                                      _________________________
                                                      Name:    Peter Cartwright
                                                      Title:   Director



                                                 By:   /s/ Ann B. Curtis
                                                      _________________________
                                                      Name:    Ann B. Curtis
                                                      Title:   Director



                                       32
<PAGE>
                                   EXHIBIT A-1

                               CALPINE CORPORATION

                4% Convertible Senior Notes Due December 26, 2006

                              Transfer Certificate

         In connection with any transfer of any of the Securities within the
period prior to the expiration of the holding period applicable to the sales
thereof under Rule 144(k) under the Securities Act of 1933, as amended (the
"Securities Act") (or any successor provision), the undersigned registered owner
of this Security hereby certifies with respect to $____________ principal amount
of the above-captioned Securities presented or surrendered on the date hereof
(the "Surrendered Securities") for registration of transfer, or for exchange or
conversion where the securities issuable upon such exchange or conversion are to
be registered in a name other than that of the undersigned registered owner
(each such transaction being a "transfer"), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Securities for the
reason checked below:


         [_]      A transfer of the Surrendered Securities is made to the
                  Company or any subsidiaries; or

         [_]      The transfer of the Surrendered Securities complies with Rule
                  144A under the Securities Act; or

         [_]      The transfer of the Surrendered Securities is pursuant to an
                  effective registration statement under the Securities Act, or

         [_]      The transfer of the Surrendered Securities is pursuant to
                  another available exemption from the registration requirement
                  of the Securities Act.

         and unless the box below is checked, the undersigned confirms that, to
the undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").


         [_]      The transferee is an Affiliate of the Company.

DATE:                       __________________________________

                                         Signature(s)

         (If the registered owner is a corporation, partnership or fiduciary,
the title of the person signing on behalf of such registered owner must be
stated.)

                                       33


<PAGE>
Signature Guaranteed

_____________________________________
Participant in a Recognized Signature

Guarantee Medallion Program

By: _________________________________
             Authorized Signatory

                                       34




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>5
<FILENAME>f80342ex23-1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<PAGE>
                                                                 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 February 6, 2002 (except for Note 24 as to which the date is March
22, 2002) included in Calpine Corporation's Form 10-K for the year ended
December 31, 2001 and to all references to our Firm included in this
registration statement.


/s/ Arthur Andersen LLP
San Jose, California
   April 4, 2002

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>6
<FILENAME>f80342ex23-2.txt
<DESCRIPTION>EXHIBIT 23.2
<TEXT>
<PAGE>
                                                                    Exhibit 23.2


                 CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS

We consent to the reference to our firm under the caption "Independent Auditors"
in the registration statement (Form S-3 No. 333-   ) and related prospectus of
Calpine Corporation for the registration of US$1,200,000,000 4% Convertible
Senior Notes Due December 26, 2006 and shares of common stock issuable upon
conversion of the Senior Notes and to the incorporation be reference therein of
our report dated February 16, 2001, with respect to the consolidated financial
statements of Encal Energy Ltd. included as an appendix to Calpine Corporation's
Annual Report (Form 10-K) for the year ended December 31, 2001, filed with the
Securities and Exchange Commission.

/s/ Ernst & Young LLP

Calgary, Alberta
April 5, 2002


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.1
<SEQUENCE>7
<FILENAME>f80342ex25-1.txt
<DESCRIPTION>EXHIBIT 25.1
<TEXT>
<PAGE>

                                                                    EXHIBIT 25.1

                                                                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)

                            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)

    4% Convertible Senior Notes Due December 26, 2006 of Calpine Corporation
                       (Title of the indenture securities)


<PAGE>

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 16. 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 28th day
of March, 2002.


                                        WILMINGTON TRUST COMPANY

[SEAL]

Attest: /s/ Ann E. Roberts              By: /s/ Bruce L. Bisson
       -----------------------------       -------------------------------------
       Assistant Secretary                 Name:  Bruce L. Bisson
                                           Title: Vice President



                                       2
<PAGE>

                                    EXHIBIT A

                                 AMENDED CHARTER

                            WILMINGTON TRUST COMPANY

                              WILMINGTON, DELAWARE

                           AS EXISTING ON MAY 9, 1987


<PAGE>

                                 AMENDED CHARTER

                                       OR

                              ACT OF INCORPORATION

                                       OF

                            WILMINGTON TRUST COMPANY

        WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:

        FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.

        SECOND: - The location of its principal office in the State of Delaware
        is at Rodney Square North, in the City of Wilmington, County of New
        Castle; the name of its resident agent is WILMINGTON TRUST COMPANY whose
        address is Rodney Square North, in said City. In addition to such
        principal office, the said corporation maintains and operates branch
        offices in the City of Newark, New Castle County, Delaware, the Town of
        Newport, New Castle County, Delaware, at Claymont, New Castle County,
        Delaware, at Greenville, New Castle County Delaware, and at Milford
        Cross Roads, New Castle County, Delaware, and shall be empowered to
        open, maintain and operate branch offices at Ninth and Shipley Streets,
        418 Delaware Avenue, 2120 Market Street, and 3605 Market Street, all in
        the City of Wilmington, New Castle County, Delaware, and such other
        branch offices or places of business as may be authorized from time to
        time by the agency or agencies of the government of the State of
        Delaware empowered to confer such authority.

        THIRD: - (a) The nature of the business and the objects and purposes
        proposed to be transacted, promoted or carried on by this Corporation
        are to do any or all of the things herein mentioned as fully and to the
        same extent as natural persons might or could do and in any part of the
        world, viz.:

                (1) To sue and be sued, complain and defend in any Court of law
                or equity and to make and use a common seal, and alter the seal
                at pleasure, to hold, purchase, convey, mortgage or otherwise
                deal in real and personal estate and property, and to appoint
                such officers and agents as the business of the Corporation
                shall require, to make by-laws not inconsistent with the
                Constitution or laws of the United States or of this State, to
                discount bills, notes or other evidences of debt, 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,



<PAGE>

                exercise and enjoy all the powers, rights, privileges and
                franchises incident to a corporation which are proper or
                necessary for the transaction of the business of the Corporation
                hereby created.

                (2) To insure titles to real and personal property, or any
                estate or interests therein, and to guarantee the holder of such
                property, real or personal, against any claim or claims, adverse
                to his interest therein, and to prepare and give certificates of
                title for any lands or premises in the State of Delaware, or
                elsewhere.

                (3) To act as factor, agent, broker or attorney in the receipt,
                collection, custody, investment and management of funds, and the
                purchase, sale, management and disposal of property of all
                descriptions, and to prepare and execute all papers which may be
                necessary or proper in such business.

                (4) To prepare and draw agreements, contracts, deeds, leases,
                conveyances, mortgages, bonds and legal papers of every
                description, and to carry on the business of conveyancing in all
                its branches.

                (5) To receive upon deposit for safekeeping money, jewelry,
                plate, deeds, bonds and any and all other personal property of
                every sort and kind, from executors, administrators, guardians,
                public officers, courts, receivers, assignees, trustees, and
                from all fiduciaries, and from all other persons and
                individuals, and from all corporations whether state, municipal,
                corporate or private, and to rent boxes, safes, vaults and other
                receptacles for such property.

                (6) To act as agent or otherwise for the purpose of registering,
                issuing, certificating, countersigning, transferring or
                underwriting the stock, bonds or other obligations of any
                corporation, association, state or municipality, and may receive
                and manage any sinking fund therefor on such terms as may be
                agreed upon between the two parties, and in like manner may act
                as Treasurer of any corporation or municipality.

                (7) To act as Trustee under any deed of trust, mortgage, bond or
                other instrument issued by any state, municipality, body
                politic, corporation, association or person, either alone or in
                conjunction with any other person or persons, corporation or
                corporations.

                (8) To guarantee the validity, performance or effect of any
                contract or agreement, and the fidelity of persons holding
                places of responsibility or trust; to become surety for any
                person, or persons, for the faithful performance of any trust,
                office, duty, contract or agreement, either by itself or in
                conjunction with any other person, or persons, corporation, or
                corporations, or in like manner become surety upon any bond,
                recognizance, obligation, judgment, suit, order, or



                                       2
<PAGE>

                decree to be entered in any court of record within the State of
                Delaware or elsewhere, or which may now or hereafter be required
                by any law, judge, officer or court in the State of Delaware or
                elsewhere.

                (9) To act by any and every method of appointment as trustee,
                trustee in bankruptcy, receiver, assignee, assignee in
                bankruptcy, executor, administrator, guardian, bailee, or in any
                other trust capacity in the receiving, holding, managing, and
                disposing of any and all estates and property, real, personal or
                mixed, and to be appointed as such trustee, trustee in
                bankruptcy, receiver, assignee, assignee in bankruptcy,
                executor, administrator, guardian or bailee by any persons,
                corporations, court, officer, or authority, in the State of
                Delaware or elsewhere; and whenever this Corporation is so
                appointed by any person, corporation, court, officer or
                authority such trustee, trustee in bankruptcy, receiver,
                assignee, assignee in bankruptcy, executor, administrator,
                guardian, bailee, or in any other trust capacity, it shall not
                be required to give bond with surety, but its capital stock
                shall be taken and held as security for the performance of the
                duties devolving upon it by such appointment.

                (10) And for its care, management and trouble, and the exercise
                of any of its powers hereby given, or for the performance of any
                of the duties which it may undertake or be called upon to
                perform, or for the assumption of any responsibility the said
                Corporation may be entitled to receive a proper compensation.

                (11) To purchase, receive, hold and own bonds, mortgages,
                debentures, shares of capital stock, and other securities,
                obligations, contracts and evidences of indebtedness, of any
                private, public or municipal corporation within and without the
                State of Delaware, or of the Government of the United States, or
                of any state, territory, colony, or possession thereof, or of
                any foreign government or country; to receive, collect, receipt
                for, and dispose of interest, dividends and income upon and from
                any of the bonds, mortgages, debentures, notes, shares of
                capital stock, securities, obligations, contracts, evidences of
                indebtedness and other property held and owned by it, and to
                exercise in respect of all such bonds, mortgages, debentures,
                notes, shares of capital stock, securities, obligations,
                contracts, evidences of indebtedness and other property, any and
                all the rights, powers and privileges of individual owners
                thereof, including the right to vote thereon; to invest and deal
                in and with any of the moneys of the Corporation upon such
                securities and in such manner as it may think fit and proper,
                and from time to time to vary or realize such investments; to
                issue bonds and secure the same by pledges or deeds of trust or
                mortgages of or upon the whole or any part of the property held
                or owned by the Corporation, and to sell and pledge such bonds,
                as and when the Board of Directors shall determine, and in the
                promotion of its said corporate business of investment and to
                the extent authorized by law, to lease, purchase, hold, sell,
                assign, transfer, pledge, mortgage and convey real



                                       3
<PAGE>

                and personal property of any name and nature and any estate or
                interest therein.

        (b) In furtherance of, and not in limitation, of the powers conferred by
        the laws of the State of Delaware, it is hereby expressly provided that
        the said Corporation shall also have the following powers:

                (1) To do any or all of the things herein set forth, to the same
                extent as natural persons might or could do, and in any part of
                the world.

                (2) To acquire the good will, rights, property and franchises
                and to undertake the whole or any part of the assets and
                liabilities of any person, firm, association or corporation, and
                to pay for the same in cash, stock of this Corporation, bonds or
                otherwise; to hold or in any manner to dispose of the whole or
                any part of the property so purchased; to conduct in any lawful
                manner the whole or any part of any business so acquired, and to
                exercise all the powers necessary or convenient in and about the
                conduct and management of such business.

                (3) To take, hold, own, deal in, mortgage or otherwise lien, and
                to lease, sell, exchange, transfer, or in any manner whatever
                dispose of property, real, personal or mixed, wherever situated.

                (4) To enter into, make, perform and carry out contracts of
                every kind with any person, firm, association or corporation,
                and, without limit as to amount, to draw, make, accept, endorse,
                discount, execute and issue promissory notes, drafts, bills of
                exchange, warrants, bonds, debentures, and other negotiable or
                transferable instruments.

                (5) To have one or more offices, to carry on all or any of its
                operations and businesses, without restriction to the same
                extent as natural persons might or could do, to purchase or
                otherwise acquire, to hold, own, to mortgage, sell, convey or
                otherwise dispose of, real and personal property, of every class
                and description, in any State, District, Territory or Colony of
                the United States, and in any foreign country or place.

                (6) It is the intention that the objects, purposes and powers
                specified and clauses contained in this paragraph shall (except
                where otherwise expressed in said paragraph) be nowise limited
                or restricted by reference to or inference from the terms of any
                other clause of this or any other paragraph in this charter, but
                that the objects, purposes and powers specified in each of the
                clauses of this paragraph shall be regarded as independent
                objects, purposes and powers.

        FOURTH: - (a) The total number of shares of all classes of stock which
        the Corporation shall have authority to issue is forty-one million
        (41,000,000) shares, consisting of:



                                       4
<PAGE>

                (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;

                (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



                                       5
<PAGE>

                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 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



                                       6
<PAGE>

        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 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



                                       7
<PAGE>

        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 By-Laws of the Corporation), any director
        or the entire Board of Directors of the Corporation may be removed at
        any time without cause, but only by the affirmative vote of the holders
        of two-thirds or more of the outstanding shares of capital stock of the
        Corporation entitled to vote generally in the election of directors
        (considered for this purpose as one class) cast at a meeting of the
        stockholders called for that purpose.

        (d) Nominations for the election of directors may be made by the Board
        of Directors or by any stockholder entitled to vote for the election of
        directors. Such nominations shall be made by notice in writing,
        delivered or mailed by first class United States mail, postage prepaid,
        to the Secretary of the Corporation not less than 14 days nor more than
        50 days prior to any meeting of the stockholders called for the election
        of directors; provided, however, that if less than 21 days' notice of
        the meeting is given to stockholders, such written notice shall be
        delivered or mailed, as prescribed, to the Secretary of the Corporation
        not later than the close of the seventh day following the day on which
        notice of the meeting was mailed to stockholders. Notice of nominations
        which are proposed by the Board of Directors shall be given by the
        Chairman on behalf of the Board.

        (e) Each notice under subsection (d) shall set forth (i) the name, age,
        business address and, if known, residence address of each nominee
        proposed in such notice, (ii) the principal occupation or employment of
        such nominee and (iii) the number of shares of



                                       8
<PAGE>

        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.

        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).



                                       9
<PAGE>

        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 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.



                                       10
<PAGE>

                (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:

                (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,



                                       11
<PAGE>

                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 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



                                       12
<PAGE>

        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."




                                       13
<PAGE>

                                    EXHIBIT B

                                     BY-LAWS

                            WILMINGTON TRUST COMPANY

                              WILMINGTON, DELAWARE

                        AS EXISTING ON FEBRUARY 20, 2000


<PAGE>

                       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 service in
that


<PAGE>

office for any reason.

        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



                                       2
<PAGE>

the departments or divisions of the Company as it may deem advisable.

                                  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



                                       3
<PAGE>

Board of Directors presently existing or hereafter passed from time to time for
that purpose, and any provisions of these By-Laws (other than this Section) and
any resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during such a
disaster period until it shall be determined by any interim Executive Committee
acting under this section that it shall be to the advantage of the Company to
resume the conduct and management of its affairs and business under all of the
other provisions of these By-Laws.

        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.

        Section 4. Associate Directors



                                       4
<PAGE>

                (A) Any person who has served as a director may be elected by
the Board of Directors as an associate director, to serve during the pleasure of
the Board.

                (B) An associate director shall be entitled to attend all
directors meetings and participate in the discussion of all matters brought to
the Board, with the exception that he would have no right to vote. An associate
director will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.

        Section 5. Absence or Disqualification of Any Member of a Committee

                (A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member.

                                   ARTICLE IV
                                    OFFICERS

        Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.

        Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.

        Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors. In the absence of the Chairman of the Board
the President shall have the powers and duties of the Chairman of the Board.

        Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.



                                       5
<PAGE>

        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



                                       6
<PAGE>

Directors, who shall ex officio hold the office Assistant Secretary of this
Company and who may perform such duties as may be prescribed by the officer in
charge of the department or division to whom they are assigned.

        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.

                                   ARTICLE VI
                                      SEAL

        Section 1. The corporate seal of the Company shall be in the following
form:

                Between two concentric circles the words



                                       7
<PAGE>
                  "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.

                                    ARTICLE X
                                 INDEMNIFICATION



                                       8
<PAGE>

        Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.

                (B) The Corporation shall pay the expenses incurred in defending
any proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a Director or officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.

                (C) If a claim for indemnification or payment of expenses, under
this Article X is not paid in full within ninety days after a written claim
therefor has been received by the Corporation the claimant may file suit to
recover the unpaid amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim. In any such
action the Corporation shall have the burden of proving that the claimant was
not entitled to the requested indemnification of payment of expenses under
applicable law.

                (D) The rights conferred on any person by this Article X shall
not be exclusive of any other rights which such person may have or hereafter
acquire under any statute, provision of the Charter or Act of Incorporation,
these By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.

                (E) Any repeal or modification of the foregoing provisions of
this Article X shall not adversely affect any right or protection hereunder of
any person in respect of any act or omission occurring prior to the time of such
repeal or modification.

                                   ARTICLE XI
                            AMENDMENTS TO THE BY-LAWS

        Section 1. These By-Laws may be altered, amended or repealed, in whole
or in part, and any new By-Law or By-Laws adopted at any regular or special
meeting of the Board of



                                       9
<PAGE>

Directors by a vote of the majority of all the members of the Board of Directors
then in office.




                                       10
<PAGE>

                                    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: March 28, 2002                   By: /s/ Bruce L. Bisson
                                           -------------------------------------
                                           Name:  Bruce L. Bisson
                                           Title: Vice President



<PAGE>

                                    EXHIBIT D

                                     NOTICE

                This form is intended to assist state nonmember banks and
                savings banks with state publication requirements. It has not
                been approved by any state banking authorities. Refer to your
                appropriate state banking authorities for your state publication
                requirements.

REPORT OF CONDITION

Consolidating domestic subsidiaries of the

     WILMINGTON TRUST COMPANY           of      WILMINGTON
------------------------------------         ----------------
          Name of Bank                             City

in the State of DELAWARE , at the close of business on December 31, 2001.



ASSETS

<TABLE>
<CAPTION>
                                                                          Thousands of dollars
                                                                          --------------------
<S>                                                                       <C>
Cash and balances due from depository institutions:
        Noninterest-bearing balances and currency and coins .................     196,974
        Interest-bearing balances ...........................................           0
Held-to-maturity securities .................................................      15,552
Available-for-sale securities ...............................................   1,164,399
Federal funds sold and securities purchased under agreements to resell ......     355,893
Loans and lease financing receivables:
        Loans and leases, net of unearned income............ 5,099,672
        LESS:  Allowance for loan and lease losses .........    73,484
        LESS:  Allocated transfer risk reserve .............         0
        Loans and leases, net of unearned income, allowance, and reserve ....   5,026,188
Assets held in trading accounts .............................................           0
Premises and fixed assets (including capitalized leases) ....................     132,613
Other real estate owned .....................................................         383
Investments in unconsolidated subsidiaries and associated companies .........       1,592
Customers' liability to this bank on acceptances outstanding ................           0
Intangible assets:
        a.  Goodwill ........................................................         201
        b.  Other intangible assets .........................................       4,154
Other assets ................................................................     142,841
Total assets ................................................................   7,040,790
</TABLE>



                                                          CONTINUED ON NEXT PAGE



<PAGE>

LIABILITIES

<TABLE>
Deposits:
<S>                                                                                           <C>
In domestic offices .......................................................................   5,503,674
        Noninterest-bearing ....................   1,246,624
        Interest-bearing .......................   4,257,050
Federal funds purchased and Securities sold under agreements to repurchase ................     298,977
Trading liabilities (from Schedule RC-D) ..................................................           0
Other borrowed money (includes mortgage indebtedness and obligations under capitalized
   leases: ................................................................................     602,820
Bank's liability on acceptances executed and outstanding ..................................           0
Subordinated notes and debentures .........................................................           0
Other liabilities (from Schedule RC-G) ....................................................     100,806
Total liabilities .........................................................................   6,506,277
</TABLE>


EQUITY CAPITAL

<TABLE>
<S>                                                                                           <C>
Perpetual preferred stock and related surplus .............................................           0
Common Stock ..............................................................................         500
Surplus (exclude all surplus related to preferred stock) ..................................      62,118
a.  Retained earnings .....................................................................     462,722
b.  Accumulated other comprehensive income ................................................       9,173
Total equity capital ......................................................................     534,513
Total liabilities, limited-life preferred stock, and equity capital .......................   7,040,790
</TABLE>



                                       2




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