<SUBMISSION>
<ACCESSION-NUMBER>0000950134-05-010706
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20050524
<ITEMS>7.01
<ITEMS>9.01
<FILING-DATE>20050524
<DATE-OF-FILING-DATE-CHANGE>20050524
<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>8-K
<ACT>34
<FILE-NUMBER>001-12079
<FILM-NUMBER>05852955
</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>8-K
<SEQUENCE>1
<FILENAME>f09421e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>e8vk</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<P align="center" style="font-size: 14pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<P align="center" style="font-size: 18pt"><B>FORM 8-K</B>


<P align="center" style="font-size: 18pt"><B>CURRENT REPORT</B>


<P align="center" style="font-size: 12pt"><B>Pursuant to Section&nbsp;13 or 15(d) of<BR>
the Securities Exchange Act of 1934</B>


<P align="center" style="font-size: 10pt">Date of Report (Date of
earliest event reported): May&nbsp;24, 2005


<P align="center" style="font-size: 24pt"><B>CALPINE CORPORATION</B>


<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>



<P align="center" style="font-size: 10pt"><B>Delaware</B><BR>
(State or Other Jurisdiction of Incorporation)



<P align="center" style="font-size: 10pt">Commission File Number: <B>001-12079</B>



<P align="center" style="font-size: 10pt">I.R.S. Employer Identification Number: <B>77-0212977</B>



<P align="center" style="font-size: 10pt"><B>50 West San Fernando Street<BR>
San Jose, California 95113<BR>
Telephone: (408)&nbsp;995-5115</B><BR>
(Address of principal executive offices and telephone number)



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;</TD>
    <TD>Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;</TD>
    <TD>Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))</TD>
</TR>

</TABLE>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">








<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
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	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">ITEM 7.01 &#151; Regulation&nbsp;FD Disclosure.</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">ITEM 9.01 Financial Statements and Exhibits.</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">EXHIBIT INDEX</A></TD></TR>
<TR><TD colspan="9"><A HREF="f09421exv99w1.htm">EXHIBIT 99.1</A></TD></TR>
</TABLE>
</CENTER>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<!-- link1 "ITEM 7.01 &#151; Regulation&nbsp;FD Disclosure." -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 7.01 &#151; Regulation&nbsp;FD Disclosure.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
May&nbsp;24, 2005, Calpine Corporation (the &#147;Company&#148;) initiated a tender offer to purchase,
upon the terms and subject to the conditions set forth in the Offer to Purchase attached hereto as
Exhibit&nbsp;99.1, for aggregate cash consideration not to exceed $160,000,000 (or its equivalent in
applicable currencies) (the &#147;Maximum Tender Amount&#148;), (a)&nbsp;all or such portion of the outstanding
euro-denominated
8<SUP style="font-size: 70%">3</SUP>/<FONT style="font-size: 60%">8</FONT>%
Senior Notes Due 2008 and British
pound-denominated 8<SUP style="font-size: 70%">7</SUP>/<FONT style="font-size: 60%">8</FONT>%
Senior Notes Due 2011, in each case issued by Calpine Canada Energy Finance II
ULC, a Nova Scotia unlimited liability company and an indirect, wholly owned subsidiary of the
Company, as are validly tendered and not withdrawn, up to the Maximum Tender Amount and (b)&nbsp;all or
such portion of the outstanding U.S. dollar-denominated
8<FONT style="font-size: 70%"><SUP>1</SUP></FONT>/<FONT style="font-size: 60%">2</FONT>% Senior Notes Due 2008 issued by Calpine Canada
Energy Finance ULC, a Nova Scotia unlimited liability company and an indirect, wholly owned
subsidiary of the Company, as are validly issued and not withdrawn, up to the remaining Maximum
Tender Amount (if any).

<!-- link1 "ITEM 9.01 Financial Statements and Exhibits." -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 9.01 Financial Statements and Exhibits.</B>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(a)&nbsp;&nbsp;</TD>
    <TD><I>Financial Statements of Businesses Acquired</I>.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">&nbsp;&nbsp;&nbsp;</TD>
    <TD>Not Applicable</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(b)&nbsp;&nbsp;</TD>
    <TD><I>Pro Forma Financial Information</I>.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">&nbsp;&nbsp;&nbsp;</TD>
    <TD>Not Applicable</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" nowrap align="left">(c)&nbsp;&nbsp;</TD>
    <TD><I>Exhibits</I>.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">99.1&nbsp;&nbsp;</TD>
    <TD>Offer to Purchase, dated May&nbsp;24, 2005.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>

<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>


<P align="left" style="font-size: 10pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.



<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>CALPINE CORPORATION</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left"><I>/s/ Charles B. Clark, Jr.</I>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left"><I>Charles B. Clark, Jr.</I>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left"><I>Senior Vice President and Controller,
Chief Accounting Officer</I>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt">Date: May&nbsp;24, 2005



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<!-- link1 "EXHIBIT INDEX" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center" style="font-size: 10pt"><B>EXHIBIT INDEX</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Exhibit No.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">Description</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Offer to Purchase, dated May&nbsp;24, 2005.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>f09421exv99w1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w1</TITLE>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="right" style="font-size: 10pt"><b>Exhibit&nbsp;99.1</b>



<P align="center" style="font-size: 10pt"><FONT style="font-variant: SMALL-CAPS"><B>CALPINE CORPORATION</B></FONT>



<P align="center" style="font-size: 10pt">OFFER TO PURCHASE FOR CASH<BR>
THE OUTSTANDING NOTES LISTED BELOW<BR>
FOR AGGREGATE CONSIDERATION NOT TO EXCEED $160,000,000<BR>
(OR ITS EQUIVALENT IN APPLICABLE CURRENCIES)


<P>
<DIV style="width: 100%; border: 1px solid black; padding: 11px;">

<P style="font-size: 10pt; text-align: justify"><B>THIS OFFER (AS DEFINED BELOW) WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME ON JUNE 22, 2005, UNLESS EXTENDED BY CALPINE CORPORATION IN ITS SOLE
DISCRETION (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED, THE &#147;EXPIRATION
DATE&#148;) OR EARLIER TERMINATED BY CALPINE CORPORATION IN ITS SOLE DISCRETION.
HOLDERS (AS DEFINED BELOW) MUST VALIDLY TENDER THEIR NOTES BY 5:00 P.M., NEW
YORK CITY TIME ON JUNE 8, 2005, UNLESS EXTENDED BY CALPINE CORPORATION IN ITS
SOLE DISCRETION (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED, THE &#147;EARLY
TENDER DATE&#148;) OR EARLIER TERMINATED BY CALPINE CORPORATION IN ITS SOLE
DISCRETION, AND NOT WITHDRAW THEIR NOTES, IN ORDER TO BE ELIGIBLE TO RECEIVE
THE EARLY TENDER PAYMENT (AS DEFINED HEREIN). HOLDERS MUST VALIDLY TENDER, AND
NOT WITHDRAW, THEIR NOTES ON OR PRIOR TO THE EXPIRATION DATE IN ORDER TO BE
ELIGIBLE TO RECEIVE THE PURCHASE PRICE (AS DEFINED HEREIN).</B>

</DIV>

<P style="font-size: 10pt; text-align: justify">Calpine Corporation, a Delaware corporation (&#147;<B>Calpine</B>&#148; or the &#147;<B>Company</B>&#148;), hereby offers (the
&#147;<B>Offer</B>&#148;) to purchase, upon the terms and subject to the conditions in this Offer to Purchase (the
&#147;<B>Offer to Purchase</B>&#148;) and the accompanying letter of transmittal (the &#147;<B>Letter of Transmittal</B>&#148; and,
together with the Offer to Purchase, the &#147;<B>Offer Documents</B>&#148;) for aggregate cash consideration not to
exceed $160,000,000 (or its equivalent in applicable currencies) (the &#147;<B>Maximum Tender Amount</B>&#148;) (1)
all or such portion of the outstanding euro-denominated 8<FONT style="font-size: 70%"><SUP>3</SUP></FONT>/<FONT style="font-size: 60%">8</FONT>% Senior Notes Due 2008 (the &#147;<B>Euro
Notes</B>&#148;), and British pound-denominated 8<FONT style="font-size: 70%"><SUP>7</SUP></FONT>/<FONT style="font-size: 60%">8</FONT>% Senior Notes Due 2011 (the &#147;<B>Pound Notes</B>&#148; and, together
with the Euro Notes, the &#147;<B>Finance II Notes</B>&#148;), issued by its indirect, wholly-owned subsidiary
Calpine Canada Energy Finance II ULC, a Nova Scotia unlimited liability company (&#147;<B>Finance II</B>&#148;), as
are validly tendered and not withdrawn, up to the Maximum Tender Amount and (2)&nbsp;all or such portion
of the outstanding U.S. dollar-denominated 8<FONT style="font-size: 70%"><SUP>1</SUP></FONT>/<FONT style="font-size: 60%">2</FONT>% Senior Notes Due 2008 (the &#147;<B>Dollar Notes</B>&#148;) issued by
its indirect, wholly-owned subsidiary Calpine Canada Energy Finance ULC, a Nova Scotia unlimited
liability company (&#147;<B>Finance I</B>&#148;) as are validly tendered and not withdrawn, up to the remaining
Maximum Tender Amount (if any). The Euro Notes, the Pound Notes and the Dollar Notes are
collectively referred to herein as the &#147;<B>Notes</B>.&#148; Payment of the Notes is fully and unconditionally
guaranteed by Calpine. Tendered Finance II Notes will be accepted for purchase before any tendered
Dollar Notes are accepted, and each series of tendered Finance II Notes will be accepted for
purchase <I>pro rata </I>in proportion to the aggregate principal amount of each such series validly
tendered and not withdrawn. The Offer is made only to holders of Notes who are not Calpine or a
subsidiary or affiliate of Calpine (&#147;<B>Holders</B>&#148;).


<P style="font-size: 10pt; text-align: justify">The following table contains important descriptive information about each series of Notes,
including the outstanding principal amount of each series held by Holders as of the date hereof:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="80%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>CUSIP, ISIN and/or</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Outstanding Principal Amount</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Common Code Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Title of Notes</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Currency of Denomination</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Held by Holders</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:15px; text-indent:-15px">ISIN XS0137441654 Common</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">8<FONT style="font-size: 70%"><SUP>3</SUP></FONT>/<FONT style="font-size: 60%">8</FONT>% Senior Notes Due 2008</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Euro</TD>
    <TD>&nbsp;</TD>
    <TD align="center"><FONT face="'Times New Roman',times,serif">&nbsp;</FONT></TD>
    <TD align="center">&#128;117,360,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">Code 013744165</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ISIN XS0137441142 Common</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">8<FONT style="font-size: 70%"><SUP>7</SUP></FONT>/<FONT style="font-size: 60%">8</FONT>% Senior Notes Due 2011</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">British Pound</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD align="center">&#163;121,409,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">Code 013744114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">CUSIP13134V AA 1</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">8<FONT style="font-size: 70%"><SUP>1</SUP></FONT>/<FONT style="font-size: 60%">2</FONT>% Senior Notes Due 2008</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">U.S. Dollar</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD align="center">$1,582,448,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>

<P style="font-size: 10pt; text-align: justify">The consideration for the Notes shall be paid in the currency in which the Notes are
denominated. The amount payable for purchased Notes that are validly tendered and not withdrawn on
or prior to the Early Tender Date (the &#147;<B>Tender Payment</B>&#148;) shall be 52.5% of the face value of such
Notes, which amount includes the Early Tender Payment (as defined herein), plus Interest (as
defined herein). Holders who validly tender purchased Notes after the Early Tender Date and who do
not withdraw them on or prior to the Expiration Date will receive an amount (the &#147;<B>Purchase Price</B>&#148;)
equal to the Tender Payment for such Notes minus the early tender payment of 2% of the face value
of such Notes (the &#147;<B>Early Tender Payment</B>&#148;). Holders will receive accrued but unpaid interest due on
the purchased Notes (the &#147;<B>Interest</B>&#148;) up to, but not including, the date (the &#147;<B>Settlement Date</B>&#148;)
that Calpine transfers the Tender Payment or the Purchase Price, as applicable, to the Tender Agent
(as defined herein) pursuant to the Offer. Holders of Notes who tender their Notes and do not
withdraw them on or prior to the Early Tender Date may not withdraw their Notes after the Early
Tender Date, except as provided below under &#147;Procedures for Tendering Notes.&#148; Tendering Holders
whose Notes are purchased by Calpine will receive payment for purchased Notes tendered on or prior
to the Expiration Date upon the terms and subject to the Conditions (as defined herein) contained
in the Offer Documents.


<P style="font-size: 10pt; text-align: justify">Calpine&#146;s obligation to accept for payment, and pay for, Notes validly tendered pursuant to the
Offer is conditioned upon the satisfaction of the Conditions. The Offer is not conditioned on any
minimum amount of Notes being tendered. Calpine has the right in its sole discretion to extend,
amend or terminate the Offer (subject to Rule&nbsp;14e-1 under the Securities Exchange Act of 1934, as
amended (the &#147;<B>Exchange Act</B>&#148;), at any time prior to the Expiration Date.


<P style="font-size: 10pt; text-align: justify"><B>The Offer Documents contain or incorporate by reference important information that you should read
before any decision is made with respect to the Offer. See &#147;Incorporation of Certain Information by
Reference.&#148; Neither Calpine nor Credit Suisse First Boston LLC, as the Dealer Manager for the Offer
(the &#147;Dealer Manager&#148;</B>), <B>makes any recommendation as to whether or not Holders should tender their
Notes pursuant to the Offer. Each Holder must make its own decision as to whether to tender Notes
and, if so, how many Notes to tender.</B>


<P style="font-size: 10pt; text-align: justify">Any questions or requests for assistance may be directed to the Dealer Manager at the address and
telephone number set forth on the back cover of this Offer to Purchase. All actions necessary in
connection with the Offer can be carried out during normal business hours on any business day at,
and copies of the Offer Documents are available from, MacKenzie Partners, Inc. (the &#147;<B>Information
Agent</B>&#148;) in New York and London, as well as The Bank of New York (the &#147;<B>Tender Agent</B>&#148;) in New York,
London and Luxembourg, in each case at the addresses and telephone numbers set forth on the back
cover of this Offer to Purchase.



<P align="center" style="font-size: 10pt"><I>The Dealer Manager for the Offer is:</I>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="1%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
</TR>
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<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>CREDIT<BR>
SUISSE</B>
</DIV></TD>
    <TD style="border-right:1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">FIRST<BR>
BOSTON</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
</DIV>

<P align="center" style="font-size: 10pt">May&nbsp;24, 2005



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P align="center" style="font-size: 10pt"><B>CERTAIN OFFER MATTERS</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Euro Notes and the Pound Notes are listed on the Luxembourg Stock Exchange. The Dollar
Notes are not listed on any securities exchange nor are they included in any automated quotation
system.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Holder that validly tenders (and does not withdraw) Notes on or prior to the Early
Tender Date shall, upon purchase of such Notes by Calpine, receive the Tender Payment for such
Notes. Notes so tendered may not be withdrawn after the Early Tender Date, unless the Offer is
terminated or such Notes are not purchased pursuant to the Offer. Each Holder that validly tenders
(and does not withdraw) Notes after the Early Tender Date but on or prior to the Expiration Date
shall, upon purchase of such Notes by Calpine, receive the Purchase Price for such Notes. No
tender will be valid if submitted after 5:00 p.m. New York City time on the Expiration Date.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Maximum Tender Amount pursuant to the Offer is $160,000,000 (or its equivalent in
applicable currencies). Notes that are validly tendered (and not withdrawn) on or prior to the
Expiration Date may be subject to proration if the Maximum Tender Amount is exceeded. Tendered
Finance II Notes will be accepted for purchase before any tendered Dollar Notes are accepted; each
series of tendered Finance II Notes will be accepted for purchase <I>pro rata </I>in proportion to the
aggregate principal amount of each such series validly tendered and not withdrawn. Calpine has the
right to increase or decrease the Maximum Tender Amount in its sole discretion at any time
(provided it complies with Rule&nbsp;14e-1 under the Exchange Act in connection with any increase or
decrease). The Offer is not conditioned on any minimum amount of Notes being tendered.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes that are not validly tendered (or are withdrawn and not thereafter validly re-tendered)
on or prior to the Expiration Date or are not accepted for purchase pursuant to the Offer will not
be eligible for purchase by Calpine pursuant to the Offer and will remain outstanding after
consummation of the Offer.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any other provision of the Offer, Calpine&#146;s obligation to accept for purchase
and to pay for any Notes validly tendered pursuant to the Offer is conditioned upon, among other
things, the satisfaction of all of the Conditions, as more fully described in &#147;Conditions to the
Offer.&#148; Calpine, in its sole discretion, may waive any of the Conditions in whole or in part, at
any time or from time to time. In addition, Calpine may, in its sole discretion, consummate the
Offer itself or though a direct or indirect wholly-owned subsidiary, in which case such subsidiary
would acquire and pay for Notes accepted for purchase. References herein to Calpine should be read
to include any such subsidiary, to the extent applicable.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any other provision of the Offer, Calpine reserves the right, in its sole
discretion, to extend the Expiration Date or to amend in any respect (subject to Rule&nbsp;14e-1 under
the Exchange Act), or withdraw the Offer in its entirety or with respect to any one or more series
of Notes, at any time prior to the Expiration Date. Notwithstanding any other provision of the
Offer, Calpine will not be required to accept or pay for any Notes tendered pursuant to the Offer,
may terminate, extend or amend the Offer and may, subject to Rule&nbsp;14e-1 under the Exchange Act,
postpone the acceptance of Notes so tendered, if any of the Conditions shall not have been
satisfied. The Conditions to the Offer are for the sole benefit of Calpine and may be asserted by
Calpine in its sole discretion regardless of the circumstances giving rise to such Conditions or
may be waived by Calpine, in whole or in part, at any time and from time to time, in its sole
discretion, whether or not any other Condition to the Offer is also waived. See &#147;Conditions to the
Offer.&#148; In the event that the Offer is withdrawn or otherwise not completed, neither the Tender
Payment nor the Purchase Price will be paid or become payable to any Holder who has tendered Notes
in connection with the Offer and any tendered Notes will be promptly returned to the tendering
Holder.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of the Tender Payment or Purchase Price, as applicable, shall be made promptly
following the date that Calpine accepts for purchase, pursuant to the terms and conditions of the
Offer, Notes validly tendered in the Offer (and not withdrawn), up to the Maximum Tender Amount,
on or prior to the Expiration Date. The date of such acceptance is referred to herein as the
&#147;<B>Acceptance Date</B>.&#148; Under no circumstances will any additional interest be payable because of any
delay by or on behalf of the Tender Agent in the transmission of funds to Holders or otherwise.
Although it has no obligation to do so, Calpine may, after the consummation, termination or
withdrawal of the Offer, (i)&nbsp;from time to time seek to acquire Notes not purchased in the Offer by
means of open market transactions or privately negotiated transactions, subsequent exchange
offers, tender offers, redemptions or otherwise, at prices or on terms, for cash or other
consideration, which may be higher or lower or more or less favorable to Holders than those in the
Offer, or (ii)&nbsp;seek to defease or satisfy and discharge the indentures governing


<P align="center" style="font-size: 10pt">ii
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<DIV style="font-family: 'Times New Roman',Times,serif">



<P style="font-size: 10pt; text-align: justify">the Notes. There can be no assurance as to which, if any, of these
alternatives (or combinations thereof) Calpine may pursue.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See &#147;Certain Significant Consequences,&#148; &#147;Material U.S. Federal Income Tax Consequences&#148; and
&#147;Material Canadian Federal Income Tax Consequences&#148; for discussions of certain factors that should
be considered in evaluating the Offer.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Notes tendered pursuant to the Offer cannot be withdrawn at any time subsequent to the
Expiration Date unless the Offer is terminated by Calpine with respect to such Notes. Any tendered
Notes that are not purchased by Calpine pursuant to the Offer will be returned to the tendering
Holder promptly following consummation of the Offer.</B>


<P align="center" style="font-size: 10pt"><B>IMPORTANT INFORMATION</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to validly tender the Notes, a Holder should, in the case of a beneficial owner
whose Notes are held in book-entry form, request such beneficial owner&#146;s custodian to effect the
transaction for such beneficial owner under the procedures for book-entry delivery set out in this
Offer to Purchase. Only registered holders of Notes are entitled to tender Notes<B>. A beneficial
owner whose Notes are registered in the name of a custodian must contact such custodian if such
beneficial owner desires to tender those Notes. </B>See &#147;Procedures for Tendering Notes.&#148;


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Depository Trust Company (&#147;<B>DTC</B>&#148;) has authorized DTC participants that hold Notes on
behalf of beneficial owners of Notes through DTC to tender their Notes as if they were Holders. To
effect such a tender, DTC participants should either (i)&nbsp;complete and sign the Letter of
Transmittal (or a facsimile), have the signature guaranteed if required by the terms of the Letter
of Transmittal, and send or deliver the Letter of Transmittal (or a facsimile) and follow the
procedure for book-entry transfer set forth in &#147;Procedures for Tendering Notes&#148; or (ii)&nbsp;transmit
their acceptance to DTC through the DTC Automated Tender Offer Program (&#147;<B>ATOP</B>&#148;), for which the
transaction will be eligible, and follow the procedure for book-entry transfer set forth in
&#147;Procedures for Tendering Notes.&#148; A beneficial owner of Notes that are held of record by a
broker, dealer, commercial bank, trust company or other nominee must instruct such broker, dealer,
commercial bank, trust company or other nominee to tender the Notes on the beneficial owner&#146;s
behalf. See &#147;Procedures for Tendering Notes.&#148;


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you are a beneficial owner and hold Notes through Euroclear Bank S.A./N.V., as operator of
the Euroclear System (&#147;<B>Euroclear</B>&#148;), or Clearstream Banking, <I>soci&#233;t&#233; anonyme </I>(&#147;<B>Clearstream,
Luxembourg</B>&#148; and, together with Euroclear, the &#147;<B>Clearing Systems</B>&#148; and each a &#147;<B>Clearing System</B>&#148;) and
wish to tender Notes you must instruct Euroclear or Clearstream, Luxembourg to block the account
in respect of the tendered Notes in accordance with the procedures established by Euroclear or
Clearstream, Luxembourg. The submission to the relevant Clearing System of a valid electronic
acceptance instruction by a Holder in accordance with the procedures described in &#147;Procedures for
Tendering Notes &#151; Tender of Notes Held Through Euroclear and Clearstream, Luxembourg,&#148; resulting
in the blocking of Notes in the relevant Clearing System upon receipt, will be deemed to
constitute the tender of Notes by such Holder. The receipt of such electronic acceptance
instruction by the relevant Clearing System will be acknowledged in accordance with the standard
practices of such Clearing System.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no guaranteed delivery provisions provided by Calpine in conjunction with the Offer
under the terms of this Offer or any of the other Offer Documents. Holders must tender their Notes
in accordance with the procedures set forth under &#147;Procedures for Tendering Notes.&#148;


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>This Offer does not constitute an offer to purchase Notes in any jurisdiction in which, or to
or from any person to or from whom, it is unlawful to make such offer under applicable securities
or &#147;blue sky&#148; laws. The delivery of this Offer to Purchase shall not under any circumstances
create any implication that the information contained herein or incorporated herein by reference
is correct as of any time subsequent to the date hereof or, in the case of information
incorporated herein by reference, subsequent to the date thereof, or that there has been no change
in the information set forth herein or incorporated herein by reference or in any attachments
hereto or in the affairs of Calpine or any of its respective subsidiaries or affiliates since the
date hereof.</B>


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Offer to Purchase has been issued by and is the sole responsibility of Calpine and is
only for circulation to Holders and other persons in the United Kingdom to whom it may lawfully be
communicated in accordance with the


<P align="center" style="font-size: 10pt">iii
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<DIV style="font-family: 'Times New Roman',Times,serif">



<P style="font-size: 10pt; text-align: justify">Financial Services and Markets Act 2000 (Financial Promotion)
Order 2001, any person satisfying this criteria being referred to as a &#147;relevant person.&#148; This
communication may not be acted upon in the United Kingdom by anyone who is not a relevant person.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calpine is an &#147;accredited investor&#148; for purposes of Canadian provincial securities
legislation and will be purchasing the Notes as principal. If a Holder determines that it needs to
rely upon the prospectus exemption applicable to a trade to an accredited investor (or another
applicable prospectus exemption) in order to sell its Notes pursuant to the Offer, it is the
responsibility of the Holder to effect filings required under Canadian provincial securities laws.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>This Offer to Purchase, the documents incorporated by reference herein and the accompanying
Letter of Transmittal contain important information which should be read before a decision is made
with respect to the Offer.</B>


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>No dealer, salesperson or other person has been authorized to give any information or to make
any representation not contained in the Offer Documents and, if given or made, such information or
representation may not be relied upon as having been authorized by Calpine or the Dealer Manager.</B>


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Offer is not subject to </B><B>Section 13(e)</B><B> of, or Rules&nbsp;13e-3 or 13e-4 or Regulation&nbsp;14D
promulgated under, the Exchange Act. The Offer is being made in compliance with Regulation&nbsp;14E
under the Exchange Act. This Offer to Purchase has not been filed with or reviewed by any Federal
or State Securities Commission or Regulatory Authority of any jurisdiction, nor has any such
Commission or Authority passed upon the accuracy or adequacy of this Offer to Purchase. Any
representation to the contrary is unlawful and may be a criminal offense.</B>


<P align="center" style="font-size: 10pt"><B>AVAILABLE INFORMATION</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calpine is subject to the information and reporting requirements of the Exchange Act, and, in
accordance therewith, Calpine files with the Securities and Exchange Commission (the &#147;<B>Commission</B>&#148;)
periodic reports and other information relating to Calpine&#146;s business, financial condition and
other matters. Calpine is required to disclose in such reports certain information as of
particular dates, concerning operating results and financial condition, its officers and
directors, the principal holders of its securities, any material interests of such persons in
transactions with the Company and other matters. These reports and other informational filings
required by the Exchange Act may be inspected and copied at the pubic reference facilities
maintained by the Commission at 100 F Street, N.E., Room&nbsp;1580, Washington, D.C. 20549. The
Commission maintains a website (http://www.sec.gov) that makes available reports, proxy and
information statements and other information regarding registrants that file electronically with
the Commission. Copies of such material may be obtained by mail, upon payment of the Commission&#146;s
customary fees, from the Commission&#146;s Headquarters Office at 100 F Street, N.E., Room&nbsp;1580,
Washington, D.C. 20549.


<P align="center" style="font-size: 10pt"><B>INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Incorporated by reference herein are certain of the documents Calpine files with the
Commission. Accordingly, important information may be disclosed to you by referring you to those
documents. The information in the documents incorporated by reference is considered to be part of
this Offer to Purchase. Calpine incorporates by reference the following documents, which it has
filed with the Commission:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">Calpine&#146;s Annual Report on Form 10-K for the year ended December&nbsp;31, 2004;</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">Calpine&#146;s Quarterly Report on Form 10-Q for the quarter ended March&nbsp;31, 2005;</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">Calpine&#146;s Current Reports on Form 8-K filed with the Commission on January&nbsp;18, 2005,
February&nbsp;3, 2005, March&nbsp;10, 2005, March&nbsp;17, 2005, March&nbsp;23, 2005, May&nbsp;16, 2005, and May
18, 2005;</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">the information contained in Item&nbsp;4.02 of Calpine&#146;s Current Report on Form 8-K filed
with the Commission on March&nbsp;1, 2005; and</DIV></TD>
</TR>

</TABLE>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">the information contained in Item&nbsp;8.01 of Calpine&#146;s Current Reports on Form 8-K filed
with the Commission on January&nbsp;24, 2005, April&nbsp;14, 2005, and April&nbsp;29, 2005.</DIV></TD>
</TR>

</TABLE>


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may request a copy of these filings, at no cost to you, by writing or telephoning Calpine
at: Calpine Corporation, 50 West San Fernando Street, San Jose, California 95113, attention: Lisa
M. Bodensteiner, Assistant Secretary, telephone: (408)&nbsp;995-5115. If you request a copy of any or
all of the documents incorporated by reference, Calpine will send to you the copies you request.
However, Calpine will not send exhibits to the documents, unless the exhibits are specifically
incorporated by reference in the documents. These documents are also available from the
Commission&#146;s public reference room and Internet site referred to in the section above titled
&#147;Available Information.&#148;


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The reports of Calpine listed above and all reports that Calpine files with the Commission
pursuant to Section&nbsp;13 and 15(d) of the Exchange Act after the date of this Offer to Purchase and
before the Expiration Date or such earlier date as the Offer is terminated or withdrawn shall be
deemed incorporated by reference into this Offer to Purchase and to be a part of this Offer to
Purchase from the respective dates of filing such documents.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any statement contained in a document incorporated or deemed to be incorporated by reference
in the Offer to Purchase shall be deemed modified, superseded or replaced for purposes of this
Offer to Purchase to the extent that a statement contained in this Offer to Purchase or in any
subsequently filed document that also is or is deemed to be incorporated by reference in this
Offer to Purchase modifies, supersedes or replaces such statement. Any statement so modified,
superseded or replaced shall not be deemed, except as so modified, superseded or replaced, to
constitute a part of this Offer to Purchase.


<P align="center" style="font-size: 10pt"><B>FORWARD-LOOKING STATEMENTS</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some of the statements contained in this Offer to Purchase and the documents that are
incorporated by reference are &#147;forward-looking&#148; statements. Calpine uses words such as &#147;believe,&#148;
&#147;intend,&#148; &#147;expect,&#148; &#147;anticipate,&#148; &#147;plan,&#148; &#147;may,&#148; &#147;will&#148; and similar expressions to identify
forward-looking statements. Such statements include, among other things, declarations concerning
Calpine&#146;s expected financial performance and strategic and operational plans, as well as all
assumptions, expectations, predictions, intentions or beliefs about future events. Holders are
cautioned that any such 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 Calpine&#146;s or its industry&#146;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.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Among the important factors that could cause actual results to differ materially from those
indicated by such forward-looking statements are the following: (i)&nbsp;the timing and extent of
deregulation of energy markets and the rules and regulations adopted with respect thereto, (ii)
the timing and extent of changes in commodity prices for energy, particularly natural gas and
electricity, and the impact of related derivatives transactions, (iii)&nbsp;unscheduled outages of
operating plants, (iv)&nbsp;unseasonable weather patterns that reduce demand for power, (v)&nbsp;economic
slowdowns that can adversely affect consumption of power by businesses and consumers, (vi)&nbsp;various
development and construction risks that may delay or prevent commercial operations of new plants,
such as failure to obtain the necessary permits to operate, failure of third-party contractors to
perform their contractual obligations or failure to obtain project financing on acceptable terms,
(vii)&nbsp;uncertainties associated with cost estimates, that actual costs may be higher than
estimated, (viii)&nbsp;development of lower-cost power plants or of a lower cost means of operating a
fleet of power plants by Calpine&#146;s competitors, (ix)&nbsp;risks associated with marketing and selling
power from power plants in the evolving energy market, (x)&nbsp;factors that impact exploitation of oil
or gas resources, such as the geology of a resource, the total amount and costs to develop
recoverable reserves and legal title, regulatory, gas administration, marketing and operational
factors relating to the extraction of natural gas, (xi)&nbsp;uncertainties associated with estimates of
oil and gas reserves, (xii)&nbsp;the effects on Calpine&#146;s business resulting from reduced liquidity in
the trading and power generation industry, (xiii)&nbsp;Calpine&#146;s ability to access the capital markets
on attractive terms or at all, (xiv)&nbsp;uncertainties associated with sources and uses of cash, that
actual sources may be lower and actual uses may be higher than estimated, (xv)&nbsp;the direct or
indirect effects on Calpine&#146;s business of a lowering of its credit
rating (or actions Calpine may take in response to changing credit rating criteria),
including increased collateral requirements, refusal by its current or potential counterparties to
enter into transactions with it and its inability to obtain credit or capital in desired amounts
or on favorable terms, (xvi)&nbsp;present and possible future claims, litigation


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<P style="font-size: 10pt; text-align: justify">and enforcement
actions, (xvii)&nbsp;effects of the application of regulations, including changes in regulations or the
interpretation thereof, (xviii)&nbsp;other risks identified in this Offer to Purchase, and (xix)&nbsp;other
risks identified from time to time in Calpine&#146;s reports and registration statements filed with the
Commission, including the risk factors identified in Calpine&#146;s Annual Report on Form 10-K for the
year ended December&nbsp;31, 2004, which is incorporated by reference in this Offer to Purchase.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although Calpine believes that the expectations reflected in the forward-looking statements
are reasonable, it cannot guarantee future results, levels of activity, performance or
achievements.


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<P align="center" style="font-size: 10pt"><B>TABLE OF CONTENTS</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="92%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">CERTAIN OFFER MATTERS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">ii</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">IMPORTANT INFORMATION</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">iii</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AVAILABLE INFORMATION</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">iv</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">iv</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">FORWARD-LOOKING STATEMENTS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">v</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">SUMMARY OF THE OFFER</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">PURPOSE OF THE OFFER</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">CERTAIN SIGNIFICANT CONSEQUENCES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Risks to Non-Tendering Holders of Notes and Holders of Notes Tendered
but not Accepted for Payment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Risks to Holders of Notes Tendered in the Offer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">PRINCIPAL TERMS OF THE OFFER</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Introduction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tender Payment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">EXPIRATION DATE; EXTENSION; AMENDMENT AND TERMINATION</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ACCEPTANCE OF NOTES FOR PURCHASE AND PAYMENT OF THE NOTES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">PROCEDURES FOR TENDERING NOTES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tender of Notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tender of Notes Held in Physical Form</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tender of Notes Held Through a Custodian</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tender of Notes Held Through DTC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Book-Entry Delivery Procedures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Signature Guarantees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tender of Notes Held Through Euroclear and Clearstream, Luxembourg</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Lost or Missing Certificates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Special Payment and Delivery Instructions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Backup Withholding Tax</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other Matters</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">WITHDRAWAL OF TENDERS AND ABSENCE OF APPRAISAL RIGHTS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">CONDITIONS TO THE OFFER</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">MARKET AND TRADING INFORMATION</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Consequences to Tendering U.S. Holders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Consequences to Tendering Non-U.S. Holders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">MATERIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DEALER MANAGER; INFORMATION AGENT AND TENDER AGENT</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">MISCELLANEOUS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">APPENDIX A: INDEX OF DEFINED TERMS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">A-1</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">vii
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>SUMMARY OF THE OFFER</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The Offer Documents contain important information that you should read carefully before making
any decision with respect to the Offer. The following summary is qualified in its entirety by the
more detailed information appearing elsewhere or incorporated by reference in this Offer to
Purchase.</I>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">The Notes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Euro-denominated 8<FONT style="font-size: 70%"><SUP>3</SUP></FONT>/<FONT style="font-size: 60%">8</FONT>% Senior Notes due 2008;
British pound-denominated 8<FONT style="font-size: 70%"><SUP>7</SUP></FONT>/<FONT style="font-size: 60%">8</FONT>% Senior Notes due 2011; and
U.S. dollar-denominated 8<FONT style="font-size: 70%"><SUP>1</SUP></FONT>/<FONT style="font-size: 60%">2</FONT>% Senior Notes due 2008.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">The Issuers
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Calpine Canada Energy Finance ULC, a Nova Scotia unlimited
liability company (Issuer of the Dollar Notes); and
Calpine Canada Energy Finance II ULC, a Nova Scotia
unlimited liability company (Issuer of the Euro Notes and
the Pound Notes).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">The Offeror
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Calpine Corporation, a Delaware corporation, indirect
parent company of Finance I and Finance II. Calpine has
fully and unconditionally guaranteed the payment of the
Notes.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Purpose of the Offer
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The purpose of the Offer is to acquire, for aggregate cash
consideration not to exceed the Maximum Tender Amount,
some or all of the Notes tendered.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">The Offer
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Calpine is offering to purchase, for aggregate cash
consideration not to exceed the Maximum Tender Amount, on
the terms and subject to the conditions set forth in the
Offer Documents, all or such portion of the outstanding
Notes as are validly tendered and not withdrawn on or
prior to the Expiration Date, up to the Maximum Tender
Amount.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Tender Payment; Purchase Price
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Tender Payment for Notes purchased pursuant to the
Offer shall equal 52.5% of the face value of the Notes
purchased, plus the Interest. Each Holder that validly
tenders (and does not withdraw) its Notes on or prior to
the Early Tender Date shall receive the Tender Payment for
any of its Notes so tendered that are purchased in
connection with the Offer. Each Holder that validly
tenders its Notes after the Early Tender Date and does not
withdraw them on or prior to the Expiration Date shall
receive the Purchase Price, which equals the Tender
Payment minus the Early Tender Payment of 2% of the face
value of the Notes purchased in connection with the Offer.
Notes validly tendered and not withdrawn on or prior to
the Early Tender Date may not be withdrawn after the Early
Tender Date, except as may be required by law.
The Tender Payment or Purchase Price, as applicable, shall
be paid in the currency in which the applicable Notes are
denominated. The aggregate amount of Notes repurchased
hereunder shall be determined using the foreign exchange
rate in effect as of 5:00 p.m., New York City time, on the
business day prior to the Acceptance Date.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Acceptance Priority; Prorating
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Tendered Finance II Notes will be accepted for purchase
before any tendered Dollar Notes are accepted. Each series
of tendered Finance II Notes will be accepted for purchase
<I>pro rata </I>in proportion to the aggregate principal amount
of each such series validly tendered and not withdrawn. In
the event of any prorating with respect to Notes accepted
for repurchase hereunder, the aggregate principal amount
of such Notes shall be rounded to the nearest whole
<FONT face="'Times New Roman',times,serif">&#128;</FONT>1,000, &#163;1,000 or $1,000, as applicable.</TD>
</TR>
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</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">1
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Expiration Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Offer will expire at 5:00 p.m., New York City time on
June&nbsp;22, 2005, unless extended or earlier terminated by
Calpine in its sole discretion. The term &#147;Expiration Date&#148;
means such time and date or, if the Offer is extended, the
latest time and date to which the Offer is so extended.
See &#147;Expiration Date; Extension; Amendment and
Termination.&#148;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Early Tender Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Early Tender Date is 5:00 p.m., New York City time on
June&nbsp;8, 2005, unless extended or earlier terminated by
Calpine in its sole discretion. The term &#147;Early Tender
Date&#148; means such time and date or, if such date is
extended, the latest time and date to which the date is so
extended. See &#147;Expiration Date; Extension; Amendment and
Termination.&#148;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Conditions to the Offer
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consummation of the Offer is conditioned upon satisfaction
of the Conditions set forth in &#147;Conditions to the Offer.&#148;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Withdrawal Rights
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Notes tendered before 5:00 p.m. New York City time on the
Early Tender Date may be withdrawn at any time up until
such time on the Early Tender Date but may not thereafter
be withdrawn, except as may be required by law. Notes
withdrawn and not validly re-tendered prior to the Early
Tender Date will not be eligible to receive the Early
Tender Payment. Notes tendered after the Early Tender Date
and before 5:00 p.m. New York City time on the Expiration
Date may be withdrawn at any time up until 5:00 p.m. New
York City time on the Expiration Date. Notes withdrawn and
not validly re-tendered prior to the Expiration Date will
not be eligible to receive any portion of the Tender
Payment or Purchase Price, as applicable. See &#147;Withdrawal
of Tenders and Absence of Appraisal Rights.&#148; In the event
of a termination of the Offer prior to the Expiration
Date, the Notes tendered pursuant to the Offer will be
promptly returned to the tendering Holders.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Procedures for Tendering Notes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">See &#147;Procedures for Tendering Notes.&#148; For further
information, call the Dealer Manager or the Information
Agent at the telephone numbers set forth on the back cover
of this Offer to Purchase or consult your broker, dealer,
commercial bank, trust company or other nominee for
assistance.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Untendered Notes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Notes not tendered and purchased pursuant to the Offer
will remain outstanding. As a result of the consummation
of the Offer, the aggregate principal amount of one or
more series of Notes outstanding would be reduced, which
may adversely affect the liquidity of and, consequently,
the market price for, the Notes of such series that remain
outstanding after consummation of the Offer.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Acceptance for Payment and</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Payment for Notes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Upon the terms of the Offer and upon satisfaction or
waiver of the Conditions thereto, Calpine will accept for
purchase Notes validly tendered (and not withdrawn) on or
prior to the Expiration Date, pursuant to the Offer. Only
Holders who validly tender Notes on or prior to the Early
Tender Date (and do not withdraw such tender on or prior
to such date) will receive the Tender Payment. Holders who
validly tender their Notes after the Early Tender Date but
on or prior to the Expiration Date will receive the
Purchase Price but will not receive the Early Tender
Payment. Payment of the Tender Payment or Purchase Price, as
applicable, for each series of
Notes validly tendered and accepted for purchase, will be
made by deposit of such amounts with the Tender Agent,
who, in each case, will act as agent for the tendering
Holders for the purpose of receiving payments from Calpine
and transmitting such payments to the tendering Holders.
Such payments are</TD>
</TR>
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</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">2
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">expected to be made promptly following
the acceptance of the Notes by the Company pursuant to the
Offer.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Settlement Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Settlement Date is the date of payment by Calpine to
the Tender Agent of the applicable Tender Payment or
Purchase Price in respect of any Notes accepted by Calpine
for payment that are validly tendered and not validly
withdrawn prior to 5:00 p.m., New York City time, on the
Expiration Date. The Settlement Date will be promptly
following the Expiration Date. Upon the terms and subject
to the conditions of the Offer, delivery by the Tender
Agent of the applicable Tender Payment or Purchase Price
shall be made on the Settlement Date for Notes that have
been validly delivered and not validly withdrawn or prior
to the Early Tender Date or the Expiration Date, as the
case may be. Calpine reserves the right to accept for
purchase and pay for all Notes validly tendered on or
prior to the Expiration Date and to keep the Offer open or
extend the Early Tender Date or Expiration Date to a later
date and time announced by Calpine. Calpine may waive all
Conditions to the Offer (other than proper tender) for
Notes tendered on or prior to the Expiration Date. See
&#147;Expiration Date; Extension; Amendment and Termination.&#148;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Material Tax Considerations
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">For a discussion of material United States tax
consequences for you of the Offer, see &#147;Material U.S.
Federal Income Tax Consequences.&#148; For a discussion of
material Canadian tax consequences for you of the Offer,
see &#147;Material Canadian Federal Income Tax Consequences.&#148;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Certain Significant Consequences
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">For a discussion of certain consequences of participating
in the Offer, see &#147;Certain Significant Consequences.&#148;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dealer Manager
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Credit Suisse First Boston LLC.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Information Agent
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">MacKenzie Partners, Inc. and MacKenzie Partners UK Limited.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Tender Agent; Tender Agent in</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Luxembourg
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Bank of New York, London Branch and The Bank of New
York, New York will act as Tender Agents; The Bank of New
York (Luxembourg) S.A. will act as Tender Agent in
Luxembourg.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Trustee for the Notes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wilmington Trust Company is the Trustee with respect to
each series of Notes.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Additional Documentation; Further</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Information; Assistance
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Any questions or requests for assistance concerning the
Offer may be directed to the Dealer Manager at the address
and telephone number set forth on the back cover of this
Offer to Purchase. Requests for additional copies of this
Offer to Purchase and the Letter of Transmittal may be
directed to the Information Agent at the addresses and
telephone numbers set forth on the back cover of this
Offer to Purchase. Beneficial owners may also contact
their custodian for assistance concerning the Offer.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><B>PURPOSE OF THE OFFER</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The principal purpose in making this Offer is to reduce Calpine&#146;s outstanding indebtedness by
acquiring all or such portion of the Notes as are validly tendered and not withdrawn for aggregate
cash consideration not to exceed the Maximum Tender Amount. Calpine expects to retire the Notes
purchased pursuant to the Offer.


<P align="center" style="font-size: 10pt">3
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<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of Calpine (the &#147;<B>Board</B>&#148;) has authorized the making of this Offer.
However, the Board is not making any recommendation to the Holders as to whether to tender or
refrain from tendering all or any portion of the Notes. Each Holder must make its own decision as
to whether to tender its Notes, and if tendering, the principal amount of Notes to tender. Holders
are urged to review carefully all of the information contained or incorporated by reference in
this Offer to Purchase.


<P align="center" style="font-size: 10pt"><B>CERTAIN SIGNIFICANT CONSEQUENCES</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>In deciding whether to participate in the Offer, each Holder should consider carefully, in
addition to the other information contained or incorporated by reference in this Offer to Purchase,
the following risks and consequences.</I>


<P style="font-size: 10pt; text-align: justify"><B>Risks to Non-Tendering Holders of Notes and Holders of Notes Tendered but not Accepted for Payment</B>



<P style="font-size: 10pt; text-align: justify"><B><I>Limited Trading Market</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that Notes are traded, prices for the Notes may fluctuate greatly depending on
the trading volume and the balance between buy and sell orders. In addition, quotations for
securities that are not widely traded, such as the Notes, may differ from actual trading prices
and should be viewed as approximations. Holders of Notes are urged to contact their brokers to
obtain the best available information as to current market prices.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that Notes are tendered and accepted in the Offer, the trading market for the
Notes would become more limited. A debt security with a smaller outstanding principal amount
available for trading (a smaller &#147;float&#148;) may command a lower price than would a comparable debt
security with a greater float. Therefore, the market price for Notes not tendered or not purchased
may be affected adversely to the extent that the principal amount of Notes tendered pursuant to
the Offer reduces the float. The reduced float may also tend to make the trading price more
volatile. Holders of Notes not tendered or not purchased may attempt to obtain quotations for
their Notes from their brokers; however, there can be no assurance that any trading market will
exist for the Notes following consummation of the Offer. The extent of the public market for the
Notes following consummation of the Offer will depend upon, among other things, the remaining
outstanding principal amount of Notes after the Offer, the number of Holders of such Notes
remaining at such time, the interest in maintaining a market in the Notes on the part of
securities firms and other factors. Calpine does not intend to create or sustain a market for any
Notes that remain outstanding following consummation of the Offer.


<P style="font-size: 10pt; text-align: justify"><B><I>Subsequent Repurchase of the Notes</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calpine expressly reserves the absolute right, in its sole discretion, from time to time to
purchase any Notes that remain outstanding after the Expiration Date through open market or
privately negotiated transactions, one or more additional tender or exchange offers or otherwise,
on terms that may or may not be equal to the Tender Payment or the Purchase Price, or to exercise
any of its rights under the indentures governing the Notes. Calpine has stated in its reports
filed with the Commission that it is required to use the proceeds of certain preferred stock
offerings to make capital expenditures or to repay or repurchase certain types of subsidiary
indebtedness, and that it currently expects to apply up to approximately $430&nbsp;million from two
such offerings by January&nbsp;2006 to make such repayments or repurchases. The subsidiary indebtedness
that may be repaid or repurchased includes, but is not limited to, the Notes and, accordingly,
all, none or some portion of such $430&nbsp;million may be used to repay or repurchase Notes. In
addition, Calpine has announced that it is considering the sale of its Saltend Energy Centre and
that proceeds from a sale, if any, of its Saltend Energy Centre in excess of approximately $630
million must also be used for capital expenditures or to repay or repurchase such subsidiary
indebtedness. There can be no assurance that Calpine will purchase any Notes in connection with
such preferred stock offerings or a sale of its Saltend Energy Centre or otherwise or that, if
Calpine were to repurchase any Notes in connection therewith, that any such repurchases would not
be at higher or different prices than those reflected for each series of Notes in this Offer to
Purchase.


<P style="font-size: 10pt; text-align: justify"><B><I>Investment Risk</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes that remain outstanding upon consummation of the Offer will remain subject to risks
relating to Calpine and its subsidiaries, including without limitation, risks of liquidity,
creditworthiness, results of operation, legal proceedings, bankruptcy, liquidation and
reorganization, as well as risks related to the Notes. Holders should


<P align="center" style="font-size: 10pt">4
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<DIV style="font-family: 'Times New Roman',Times,serif">



<P style="font-size: 10pt; text-align: justify">consider those risks related
to the Company and/or the Notes that are described in Calpine&#146;s Annual Report on Form 10-K for the
year ended December&nbsp;31, 2004, and its Quarterly Report on Form 10-Q for the quarter ended March
31, 2005, which are incorporated by reference in this Offer to Purchase, and the other documents
that are incorporated by reference in this Offer to Purchase.


<P style="font-size: 10pt; text-align: justify"><B><I>Limited Rights Under the Indentures Governing the Notes; the Notes May Be Assumed by Calpine</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The indentures governing the Notes, and the related payment guarantees by Calpine, place few
operating or financial restrictions on Finance I, Finance II (together, the &#147;<B>Issuers</B>&#148;), Calpine or
any of their subsidiaries or affiliates. For example, the indentures do not place restrictions on
the ability of the Issuers, Calpine, or any of their respective subsidiaries or affiliates to,
among other things, sell assets, incur additional indebtedness, enter into affiliate transactions,
make dividends or distributions, or limit dividends and other payments by restricted subsidiaries
to Calpine. While the indentures and the guarantees place limited restrictions on the ability of
the Issuers, Calpine or their affiliates to merge or consolidate, incur certain liens or enter
into sale/leaseback transactions, there are significant exceptions to such restrictions. In
addition, the indentures governing the Notes permit, subject to certain conditions, the Issuers,
without the consent of the Holders, to assign their rights and obligations under the Notes to
Calpine or certain subsidiaries of Calpine and to release the Issuers from any further obligation
with respect to the Notes. The Issuers and Calpine are currently considering the assignment to,
and assumption by, Calpine of the Issuers&#146; rights and obligations under one or more series of
Notes following the consummation of the Offer. Accordingly, some or all of the remaining
outstanding Notes may in the future become the obligations solely of Calpine, and not of Finance I
or Finance II.


<P style="font-size: 10pt; text-align: justify"><B>Risks to Holders of Notes Tendered in the Offer</B>



<P style="font-size: 10pt; text-align: justify"><B><I>Effects of prorating</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Offer is not conditioned upon any minimum level of participation. Calpine will not be
able to definitively determine whether the Offer is oversubscribed or what the effects of
prorating may be with respect to any particular series until after the Expiration Date has passed,
and the proration will be determined, in part, by the foreign exchange rates in effect at 5:00
p.m., New York City time, on the day prior to the Acceptance Date. You will not be able to
withdraw tenders of your Notes at the time Calpine establishes the amount of Notes of any
particular series to be purchased.


<P style="font-size: 10pt; text-align: justify"><B><I>Valuation risk</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consideration offered to purchase the Notes does not reflect any independent valuation of
the Notes and does not take into account events or changes in financial markets (including
interest rates) after the commencement of the Offer. Calpine has not obtained or requested a
fairness opinion from any banking or other firm as to the fairness of the consideration offered
for the Notes. If you tender your Notes, you may or may not receive more or as much value than if
you choose to keep them.


<P style="font-size: 10pt; text-align: justify"><B><I>The consummation of the Offer is subject to the satisfaction of certain conditions that may not be
satisfied</I></B>


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consummation of the Offer is subject to the satisfaction of several Conditions, including
the absence of the occurrence or likely occurrence of (i)&nbsp;any event affecting the business or financial affairs
of Calpine that, in Calpine&#146;s sole judgment, would or might prohibit, prevent, restrict or delay consummation of
the Offer, or otherwise make it inadvisable to
proceed with the purchase of Notes pursuant to the Offer and
(ii)&nbsp;any event that, in
Calpine&#146;s sole judgment, materially adversely affects any of its
current financing activities, asset sales or liquidity generating or
enhancing activities or its operational cash flow. See &#147;Conditions to the Offer.&#148; There can
be no assurance that such Conditions will be satisfied prior to the Expiration Date or at all, or
that, in the event the Offer is not consummated, the market value and liquidity of the applicable
Notes will not be materially adversely affected.


<P align="center" style="font-size: 10pt">5
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<P align="center" style="font-size: 10pt"><B>PRINCIPAL TERMS OF THE OFFER</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The Offer Documents contain important information that should be read carefully before any
decision is made with respect to the Offer</I>.


<P style="font-size: 10pt; text-align: justify"><B>Introduction</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calpine hereby offers, upon the terms and subject to the conditions set forth in the Offer
Documents, to purchase for aggregate cash consideration not to exceed the Maximum Tender Amount,
all or such portion of the outstanding Notes that are validly tendered (and not withdrawn) to the
Tender Agent on or prior to the Expiration Date for the consideration as described below. Calpine
will accept tenders of Notes in principal amounts of <FONT face="'Times New Roman',times,serif">&#128;</FONT>1,000, &#163;1,000 or $1,000, as applicable, or
integral multiples thereof. On the Acceptance Date, Calpine will accept such Notes for purchase
upon the terms and subject to the conditions set forth herein, including the terms and conditions
of any extension or amendment hereto. Payment for Notes purchased pursuant to the Offer will be
made on the Settlement Date.


<P style="font-size: 10pt; text-align: justify"><B>Tender Payment</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the date hereof, the following principal amounts of each series of Notes are
outstanding and held by Holders:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="80%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Outstanding</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>CUSIP, ISIN and/or</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Currency of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Principal Amount</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Common Code Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Title of Notes</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Denomination</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Held by Holders</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ISIN XS0137441654<br>
Common Code 013744165</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" valign="top">8<FONT style="font-size: 70%"><SUP>3</SUP></FONT>/<FONT style="font-size: 60%">8</FONT>% Senior Notes Due 2008</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" valign="top">Euro</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><FONT face="'Times New Roman',times,serif">&nbsp;</FONT></TD>
    <TD align="center" valign="top">&#128;117,360,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">ISIN XS0137441142<br>
Common Code 013744114</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" valign="top">8<FONT style="font-size: 70%"><SUP>7</SUP></FONT>/<FONT style="font-size: 60%">8</FONT>% Senior Notes Due 2011</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" valign="top">British Pound</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD align="center" valign="top">&#163;121,409,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center">CUSIP13134V AA 1</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">8<FONT style="font-size: 70%"><SUP>1</SUP></FONT>/<FONT style="font-size: 60%">2</FONT>% Senior Notes Due 2008</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">U.S. Dollar</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD align="center">$1,582,448,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Tender Payment, including the Early Tender Payment, and the Purchase Price for each
<FONT face="'Times New Roman',times,serif">&#128;</FONT>1,000, &#163;1,000 or $1,000, as applicable, principal amount of Notes validly tendered and accepted
for payment pursuant to the Offer shall be payable in cash in the currency in which the Notes are
denominated. The Tender Payment for the Notes will be equal to 52.5% of the face value of the
Notes, including the Early Tender Payment equal to 2% of the face value of the Notes. As part of
the Tender Payment or Purchase Price, as applicable, Calpine will also make the Interest payment
in an amount equal to accrued and unpaid interest up to, but not including, the Settlement Date.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Maximum Tender Amount pursuant to the Offer is $160,000,000 (or its equivalent in
applicable currencies). Notes that are validly tendered (and not withdrawn) on or prior to the
Expiration Date may be subject to prorating if the Maximum Tender Amount is exceeded. Tendered
Finance II Notes will be accepted for purchase before any tendered Dollar Notes are accepted. Each
series of tendered Finance II Notes will be accepted for purchase <I>pro rata </I>in proportion to the
aggregate principal amount of each such series validly tendered and not withdrawn. Calpine has the
right to increase the Maximum Tender Amount in its sole discretion at any time (provided that it
complies with Rule&nbsp;14e-1 under the Exchange Act). The Offer is not conditioned on any minimum
amount of Notes being tendered. The aggregate amount of Notes repurchased shall be determined
using the foreign exchange rate in effect as of 5:00 p.m., New York City time, on the day prior to
the Acceptance Date. In the event of any prorating with respect to Notes accepted for repurchase
hereunder, the aggregate principal amount of such Notes shall be rounded to the nearest whole
<FONT face="'Times New Roman',times,serif">&#128;</FONT>1,000, &#163;1,000 or $1,000, as applicable.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders who tender their Notes on or prior to 5:00 p.m., New York City time, on the Early
Tender Date will receive the Tender Payment on the Settlement Date, subject to the terms and
conditions set forth in this Offer to Purchase. Holders who tender their Notes after 5:00 p.m.,
New York City time, on the Early Tender Date and on or prior to 5:00 p.m., New York City time, on
the Expiration Date will receive the Purchase Price on the Settlement Date, subject to the terms
and conditions set forth in this Offer to Purchase.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Notes tendered on or prior to the Early Tender Date may be withdrawn at any time on or prior
to the Early Tender Date, but not thereafter, except as may be required by law</B>.


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<DIV style="font-family: 'Times New Roman',Times,serif">

<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any tendered Notes are not purchased pursuant to the Offer for any reason (including as a
result of rounding to the nearest whole <FONT face="'Times New Roman',times,serif">&#128;</FONT>1,000, &#163;1,000 or $1,000, as applicable due to prorating),
or certificates are submitted evidencing more Notes than are tendered, such Notes not purchased
will be returned, without expense, to the tendering Holder (or, in the case of Notes tendered by
book-entry transfer, such Notes will be credited to the account maintained at DTC or the relevant
Clearing System from which such Notes were delivered) unless otherwise requested by such Holder
under &#147;Special Delivery Instructions&#148; in the Letter of Transmittal, promptly following the
Expiration Date or termination of the Offer.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Notes are validly tendered and not withdrawn such that the principal amount tendered in
the Offer exceeds the Maximum Tender Amount for the Offer, Calpine will accept for payment only
the Maximum Tender Amount and will purchase Finance II Notes prior to purchasing any Dollar Notes.
Accordingly, Calpine will only accept Dollar Notes tendered if, after it has accepted all Finance
II Notes tendered, the aggregate of all Tender Payments and payments of the Purchase Price with
respect to the Finance II Notes is less than the Maximum Tender Amount. The remaining portion of
the Maximum Tender Amount after purchase of the Finance II Notes will be used to purchase Dollar
Notes. If such remaining amount is sufficient to purchase some but not all of the Dollar Notes
tendered, the amount of Dollar Notes that Calpine will purchase will be prorated based on the
aggregate principal amount tendered. In the event that the Maximum Tender Amount is not sufficient
to purchase all of the Finance II Notes, Calpine will prorate the amount of each series of Finance
II Notes that it will purchase based on the aggregate principal amount of each such series
tendered. In addition, in that event, no Dollar Notes will be accepted for payment. To the extent
practicable, Calpine intends to determine after the Early Tender Date whether, based on the amount
of Finance II Notes tendered, it is likely that no Dollar Notes will be accepted, given the
Maximum Tender Amount. If Calpine determines in its sole discretion that the Dollar Notes will
under no circumstances be accepted due to the amount of Finance II Notes tendered, Calpine intends
to promptly return tendered Dollar Notes to the Holders thereof.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Maximum Tender Amount may be increased by the Company at any time, in its sole discretion
(subject to Rule&nbsp;14e-1 under the Exchange Act).


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Dealer Manager will be responsible for making all calculations called for by the Offer.
These calculations include, but are not limited to, applying the relevant foreign exchange rate to
determine the amount of Notes of each series to be accepted and the proration among the Finance II
Notes, and determining Interest payable on the Notes. The Dealer Manager will make all these
calculations in good faith, and, absent manifest error, its calculations will be final and binding
on holders of Notes. The Dealer Manager will provide a schedule of its calculations to the Tender
Agent, and the Tender Agent is entitled to rely upon the accuracy of such calculations without
independent verification. The Tender Agent will forward such calculations to any Holder of Notes
tendered pursuant to the Offer upon the request of that Holder.


<P align="center" style="font-size: 10pt"><B>EXPIRATION DATE; EXTENSION; AMENDMENT AND TERMINATION</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Offer will expire at 5:00 p.m., New York City time, on June&nbsp;22, 2005, unless extended by
Calpine in its sole discretion. In the event the Offer is extended, the term &#147;Expiration Date&#148;
with respect to such extended Offer shall mean the time and date on which the Offer, as so
extended, shall expire. Calpine expressly reserves the right to extend the Offer from time to time
or for such period or periods as it may determine in Calpine&#146;s sole discretion by giving oral (to
be promptly confirmed in writing) or written notice of such extension to the Tender Agent and by
making a public announcement by press release at or prior to 9:00 a.m., New York City time, on the
next business day following the Expiration Date, as the case may be. During any extension of the
Offer, all Notes previously tendered and not accepted for purchase will remain subject to the
Offer and may, subject to the terms and conditions of the Offer, be accepted for purchase by
Calpine.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent Calpine is legally permitted to do so, it expressly reserves the absolute
right, in its sole discretion, to at any time (i)&nbsp;waive any Condition to the Offer, (ii)&nbsp;amend any
of the terms of the Offer (subject to the requirement to extend the Offer, as required by law),
(iii)&nbsp;modify the Maximum Tender Amount or (iv)&nbsp;modify the Tender Payment, including the Early
Tender Payment, or the Purchase Price, provided that in the case of each of (iii)&nbsp;and (iv), the
Offer will remain open for at least 10 business days following such modification. Any waiver,
amendment, modification or extension of the Offer will apply solely to the applicable series of
Notes to which such waiver, amendment, modification or extension expressly relates, and not to any
other series of Notes. If Calpine
makes a material change in the terms of the Offer or waives a material Condition of the
Offer, it will give oral (to be


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<P style="font-size: 10pt; text-align: justify">promptly confirmed in writing) or written notice of such amendment
or such waiver to the Tender Agent and will disseminate additional Offer Documents and will extend
the Offer to the extent required by law. Calpine expressly reserves the right, in its sole
discretion, to terminate the Offer with respect to each series of Notes at any time prior to the
payment of the Tender Payment or Purchase Price, as applicable, with respect to that series. In
the event that Calpine terminates the Offer, it shall give immediate notice thereof to the Tender
Agent, and all Notes theretofore tendered and not accepted for payment shall be returned promptly
to the tendering Holders thereof. In the event that the Offer is withdrawn or otherwise not
completed, no part of the Tender Payment or Purchase Price, as applicable, will be paid or become
payable. See &#147;Withdrawal of Tenders and Absence of Appraisal Rights&#148; and &#147;Conditions to the
Offer.&#148;


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Calpine extends the Offer, or if, for any reason (whether before or after any Notes have
been accepted for purchase), the acceptance for payment of, or the payment for, Notes is delayed
or if Calpine is unable to accept for payment or pay for Notes pursuant to the Offer, then,
without prejudice to Calpine&#146;s rights under the Offer, the Tender Agent may retain tendered Notes
on behalf of Calpine, and such Notes may not be withdrawn except to the extent tendering Holders
are entitled to withdrawal rights as described in &#147;Withdrawal of Tenders and Absence of Appraisal
Rights.&#148; However, the ability of Calpine to delay the payment for Notes that Calpine has accepted
for purchase is limited by Rule&nbsp;14e-1(c) under the Exchange Act, which requires that a bidder pay
the consideration offered or return the securities deposited by or on behalf of holders of
securities promptly after the termination or withdrawal of a tender offer.


<P align="center" style="font-size: 10pt"><B>ACCEPTANCE OF NOTES FOR PURCHASE AND PAYMENT OF THE NOTES</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the terms and subject to the conditions of the Offer, Calpine will accept for purchase,
promptly after the Expiration Date, Notes (up to the Maximum Tender Amount) validly tendered
pursuant to the Offer (or defectively tendered, if such defect has been waived by Calpine) and not
validly withdrawn upon the satisfaction or waiver of the conditions to the Offer specified herein
under &#147;Conditions to the Offer.&#148; Calpine expressly reserves the right, in its sole discretion, to
delay acceptance for purchase of Notes tendered under the Offer or the payment for Notes accepted
for purchase (subject to Rule&nbsp;14e-1(c) under the Exchange Act, which requires that an offeror pay
the consideration offered or return the securities deposited by or on behalf of the Holders
thereof promptly after the termination or withdrawal of a tender offer), or to terminate the Offer
and not accept for purchase any Notes not theretofore accepted for purchase, if any of the
Conditions set forth under &#147;Conditions to the Offer&#148; shall not have been satisfied or waived by
Calpine or in order to comply in whole or in part with any applicable law. In all cases, payment
for Notes accepted for purchase pursuant to the Offer will be made only after timely receipt by
the Tender Agent of certificates representing the Notes (or confirmation of book-entry transfer
thereof), a properly completed and duly executed Letter of Transmittal related thereto (or a
facsimile thereof or satisfaction of DTC&#146;s ATOP procedures or the procedures of Euroclear and
Clearstream, Luxembourg) and any other documents required thereby.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of the Offer, Calpine will be deemed to have accepted for purchase validly
tendered Notes (or defectively tendered Notes, if such defect has been waived by Calpine) if, as
and when Calpine gives oral (confirmed in writing) or written notice thereof to the Tender Agent.
Payment for Notes accepted for purchase in the Offer on or prior to the Settlement Date will be
made by Calpine by depositing such payment with the Tender Agent, which will act as agent for the
tendering Holders for the purpose of receiving the Tender Payment or the Purchase Price, as
applicable, and transmitting the Tender Payment or the Purchase Price, as applicable, to such
Holders. Upon the terms and subject to the conditions of the Offer, delivery by the Tender Agent
of the applicable Tender Payment or Purchase Price shall be made on the Settlement Date for Notes
that have been validly delivered and not validly withdrawn on or prior to the Early Tender Date or
the Expiration Date, as the case may be.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tenders of Notes pursuant to the Offer will be accepted only in principal amounts equal to
<FONT face="'Times New Roman',times,serif">&#128;</FONT>1,000, &#163;1,000 or $1,000, as applicable, or any integral multiple thereof. If, for any reason,
acceptance for purchase of, or payment for, validly tendered Notes pursuant to the Offer is
delayed or Calpine is unable to accept for purchase, or to pay for, validly tendered Notes
pursuant to the Offer, then the Tender Agent may, nevertheless, on Calpine&#146;s behalf, retain
tendered Notes, without prejudice to Calpine&#146;s rights described under &#147;Expiration Date; Extension;
Amendment and Termination,&#148; &#147;Conditions to the Offer&#148; and &#147;Withdrawal of Tenders and Absence of
Appraisal Rights&#148; (subject to Rule&nbsp;14e-1(c) under the Exchange Act, which requires that an offeror
pay the consideration offered or return the
securities deposited by or on behalf of the Holders thereof promptly after the termination or
withdrawal of a tender offer). If any tendered Notes are not accepted for purchase for any reason
pursuant to the terms and conditions of the


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<P style="font-size: 10pt; text-align: justify">Offer, or if certificates are submitted evidencing
more Notes than those which are tendered, certificates evidencing unpurchased Notes will be
returned, without expense, to the tendering Holder, unless otherwise requested by such Holder
under &#147;Special Delivery Instructions&#148; in the Letter of Transmittal (or, in the case of any Notes
tendered by book-entry transfer into the Tender Agent&#146;s account at the book-entry transfer
facility pursuant to the procedures set forth under the caption &#147;Procedures for Tendering Notes &#151;
Book-Entry Delivery Procedures,&#148; such Notes will be credited to the account maintained at the
book-entry transfer facility from which such Notes were delivered), promptly following the
Expiration Date or the termination of the Offer.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calpine reserves the right to transfer or assign, in whole or from time to time in part, to
one or more of its respective affiliates, the right to purchase all or any portion of the Notes
tendered pursuant to the Offer, but any such transfer or assignment will not relieve Calpine of
its obligations under the Offer and will in no way prejudice the rights of tendering Holders to
receive payment for their Notes validly tendered and not validly withdrawn and accepted for
payment pursuant to the Offer. Holders whose Notes are tendered and accepted for purchase pursuant
to the Offer will be entitled to Interest on their Notes up to, but not including, the Settlement
Date. <B>Under no circumstances will any additional interest be payable because of any delay by or on
behalf of the Tender Agent in the transmission of funds to the Holders of purchased Notes or
otherwise</B>.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tendering Holders of Notes purchased in the Offer will not be obligated to pay brokerage
commissions or fees, or, subject to the instructions in the Letter of Transmittal, transfer taxes
with respect to the purchase of their Notes. Holders who tender their Notes through their broker
or other nominee may be required to pay a fee or service charge. Such Holders should inquire of
their broker or other nominee if such charges will be applicable. Calpine will pay all other
charges and expenses in connection with the Offer. See &#147;Dealer Manager; Information Agent and
Tender Agent&#148; and &#147;Miscellaneous.&#148;


<P align="center" style="font-size: 10pt"><B>PROCEDURES FOR TENDERING NOTES</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes must be tendered pursuant to the Offer in accordance with the procedures described
below. The method of tendering Notes and delivering the Letter of Transmittal, any required
signature guarantees and all other required documents, including delivery through DTC and any
acceptance of an Agent&#146;s Message (as defined herein) transmitted through ATOP or electronic
acceptance transmitted through any Clearing System, is at the election and risk of the person
tendering Notes and delivering the Letter of Transmittal and, except as otherwise provided in the
Letter of Transmittal, delivery will be deemed made only when actually received by the Tender
Agent. If delivery is by mail, it is suggested that the Holder use properly insured, registered
mail with return receipt requested and that the mailing be made sufficiently in advance of the
Early Tender Date or the Expiration Date, as applicable, to permit delivery to the Tender Agent on
or prior to such date.


<P style="font-size: 10pt; text-align: justify"><B>Tender of Notes</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The tender by a Holder of Notes (and subsequent acceptance of such tender by the Company)
pursuant to one of the procedures set forth below will constitute a binding agreement between such
Holder and the Company in accordance with the terms and subject to the conditions set forth herein
and in the Letter of Transmittal.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The procedures by which Notes may be tendered by beneficial owners who are not registered
Holders will depend upon the manner in which the Notes are held.


<P style="font-size: 10pt; text-align: justify"><B>Tender of Notes Held in Physical Form</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The trustee with respect to the Notes has informed Calpine that all Holders hold the Notes
through DTC or Clearing System accounts and there are no Notes in physical form. If you believe
that you are holding a Note in physical form, please contact the Dealer Manager for the
appropriate procedures with regard to tendering such Notes. If any Notes are held in physical
form, such Notes could be tendered to the Tender Agent at the addresses identified on the back
cover of this Offer to Purchase.


<P style="font-size: 10pt; text-align: justify"><B>Tender of Notes Held Through a Custodian</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any beneficial owner whose Notes are registered in the name of a broker, dealer, commercial
bank, trust company or other nominee and who wishes to tender Notes should contact the registered
Holder promptly and


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<P style="font-size: 10pt; text-align: justify">instruct such Holder to tender Notes on such beneficial owner&#146;s behalf. A
Letter of Instructions is enclosed in the materials provided along with this Offer to Purchase,
which may be used by a beneficial owner in this process to instruct the registered Holder to
tender Notes. Any beneficial owner of Notes held through DTC or its nominee, through authority
granted by DTC, may direct the DTC participant through which that beneficial owner&#146;s Notes are
held in DTC to tender on that beneficial owner&#146;s behalf. If such beneficial owner wishes to tender
such Notes personally, such beneficial owner must, prior to completing and executing the Letter of
Transmittal and delivering such Notes, either make appropriate arrangements to register ownership
of the Notes in such beneficial owner&#146;s name (if permitted) or otherwise follow the procedures
described below. The transfer of record ownership (if permitted) may take considerable time.


<P style="font-size: 10pt; text-align: justify"><B>Tender of Notes Held Through DTC</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To effectively tender Notes that are held through DTC, DTC participants should either (i)
properly complete and duly execute the Letter of Transmittal (or a manually signed facsimile
thereof), together with any other documents required by the Letter of Transmittal, and mail or
deliver the Letter of Transmittal and such other documents to the Tender Agent or (ii)
electronically transmit their acceptance through ATOP (and thereby tender Notes), for which the
transaction will be eligible. Upon receipt of such Holder&#146;s acceptance through ATOP, DTC will edit
and verify the acceptance and send an Agent&#146;s Message to the Tender Agent for its acceptance.
Delivery of tendered Notes must be made to the Tender Agent pursuant to the book-entry delivery
procedures set forth below.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The method of delivery of Notes and Letters of Transmittal, any required signature guarantees
and all other required documents, including delivery through DTC and any acceptance of an Agent&#146;s
Message transmitted through ATOP, is at the election and risk of the person tendering the Notes
and delivering the Letters of Transmittal and, except as otherwise provided in the Letter of
Transmittal, delivery will be deemed made only when actually received by the Tender Agent.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as provided below, unless the Notes being tendered are deposited with the Tender Agent
on or prior to the Early Tender Date or the Expiration Date, as the case may be (accompanied by a
properly completed and duly executed Letter of Transmittal or a properly transmitted Agent&#146;s
Message), Calpine may, at its option, treat such tender as defective for purposes of the right to
receive the applicable Tender Payment or Purchase Price. Payment for the Notes will be made only
against deposit of the tendered Notes and delivery of any other required documents.


<P style="font-size: 10pt; text-align: justify"><B>Book-Entry Delivery Procedures</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Tender Agent will establish accounts with respect to the Notes at DTC for purposes of the
Offer within two business days after the date of this Offer to Purchase, and any financial
institution that is a participant in DTC may make book-entry delivery of the Notes by causing DTC
to transfer such Notes into the Tender Agent&#146;s account in accordance with DTC&#146;s ATOP. However,
although delivery of Notes may be effected through book-entry transfer into the Tender Agent&#146;s
account at DTC, the Letter of Transmittal (or a manually signed facsimile thereof) with any
required signature guarantees, or an Agent&#146;s Message in connection with a book-entry transfer, and
any other required documents, must, in any case, be transmitted to and received by the Tender
Agent at one or more of its addresses set forth on the back cover of this Offer to Purchase on or
prior to the Early Tender Date or the Expiration Date, as applicable, in connection with the
tender of such Notes. Delivery of documents to DTC does not constitute delivery to the Tender
Agent. The confirmation of a book-entry transfer into the Tender Agent&#146;s account at DTC as
described above is referred to herein as a &#147;<B>Book-Entry Confirmation</B>.&#148;


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The term &#147;<B>Agent&#146;s Message</B>&#148; means a message transmitted by DTC to, and received by, the Tender
Agent and forming a part of the Book-Entry Confirmation, which states that DTC has received an
express acknowledgment from the participants in DTC described in that Agent&#146;s Message, stating
that the aggregate principal amount of Notes that have been tendered by those participants under
the Offer have thereby been delivered and that those participants have received this Offer to
Purchase and the Letter of Transmittal and agree to be bound by the terms of this Offer to
Purchase and the Letter of Transmittal and Calpine may enforce that agreement against those
participants.


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<P style="font-size: 10pt; text-align: justify"><B>Signature Guarantees</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Signatures on all Letters of Transmittal must be guaranteed by a recognized participant in
the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature
Program or the Stock Exchange Medallion Program (each a &#147;<B>Medallion Signature Guarantor</B>&#148;), unless
the Notes tendered are tendered and delivered (i)&nbsp;by a registered Holder of Notes (or by a
participant in DTC whose name appears on a security position listing as the owner of such Notes)
who has not completed any of the boxes entitled &#147;Special Payment Instructions&#148; or &#147;Special
Delivery Instructions&#148; in the Letter of Transmittal or (ii)&nbsp;for the account of a member firm of a
registered national securities exchange, a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the
United States (each of the foregoing being referred to as an &#147;<B>Eligible Institution</B>&#148;). If the Notes
are registered in the name of a person other than the signer of the Letter of Transmittal or if
Notes not accepted for purchase or not tendered are to be returned to a person other than the
registered Holder, then the signature on the Letter of Transmittal accompanying the tendered Notes
must be guaranteed by a Medallion Signature Guarantor as described above.


<P style="font-size: 10pt; text-align: justify"><B>Tender of Notes Held Through Euroclear and Clearstream, Luxembourg</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The submission to a Clearing System of a valid electronic acceptance instruction by a Holder
in accordance with the procedures described below, resulting in the blocking of Notes in the
relevant Clearing System upon receipt, will be deemed to constitute the tender of Notes by such
Holder. A defective electronic acceptance instruction (which defect is not waived by Calpine) will
not constitute a valid tender of Notes and will not entitle the Holder to the applicable Tender
Payment or Purchase Price.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The tender of Notes by a Holder will be deemed to have occurred upon receipt by the relevant
Clearing System of a valid electronic acceptance instruction in accordance with the requirements
of such Clearing System. The receipt of such electronic acceptance instruction by the relevant
Clearing System will be acknowledged in accordance with the standard practices of such Clearing
System. Notwithstanding a Holder&#146;s valid tender of Notes, Calpine will not be obliged to accept
the Notes for payment unless the Conditions to the Offer are satisfied or waived. No Letter of
Transmittal need be executed in relation to this Offer.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders should ensure that the relevant Clearing System has received instructions (with which
that Clearing System has complied) to block such Notes in the securities account to which they are
credited from and including the day on which the electronic acceptance is submitted so that no
transfers may be effected in relation to such Notes at any time after such date. Notes should be
blocked in accordance with the procedures of the relevant Clearing System and the deadlines
required by the relevant Clearing System. Calpine and the Tender Agent shall be entitled to accept
the submission of the electronic acceptance as deemed confirmation that such Notes have been so
blocked. The Tender Agent shall require the relevant Clearing System to confirm in writing that
such Notes have been blocked from the date of the submission of the electronic acceptance. In the
event that the relevant Clearing System fails to do so, the Tender Agent shall inform Calpine and
Calpine shall be entitled, but not obligated, to reject the relevant electronic acceptance.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beneficial owners of Notes who are not direct participants in Euroclear or Clearstream,
Luxembourg must contact their custodian to arrange for their direct participant in Euroclear or
Clearstream, Luxembourg, as the case may be, through which they hold Notes to submit the
electronic acceptance and to give instruction to the relevant Clearing System to block the
relevant Notes in accordance with the procedures of the relevant Clearing System and the deadlines
required by the relevant Clearing System. The beneficial owners of Notes that are held in the name
of a custodian should contact such entity sufficiently in advance of the Expiration Date, if they
wish to accept the Offer, and ensure that the Notes are blocked in accordance with the normal
procedures of the relevant Clearing System and the deadlines imposed by such Clearing System.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Delivery of documents to Euroclear or Clearstream, Luxembourg in accordance with the relevant
Clearing System&#146;s procedures does not constitute delivery to the Tender Agent. Direct participants
in Euroclear or Clearstream, Luxembourg accepting the Offer must give authority to Euroclear or
Clearstream, Luxembourg to disclose their identity to the Tender Agent.


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<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders accepting the Offer with respect to Notes should ensure that the relevant blocking
instructions to Euroclear or Clearstream, Luxembourg can be allocated to the relevant electronic
acceptance. For the avoidance of doubt, each electronic acceptance must have an individual,
matching blocking instruction.


<P style="font-size: 10pt; text-align: justify"><B>Lost or Missing Certificates</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a Holder desires to tender Notes pursuant to the Offer, but the certificates evidencing
such Notes have been mutilated, lost, stolen or destroyed, such Holder should write to the Trustee
for the Notes at the address or facsimile number listed below concerning the procedures for
obtaining replacement certificates for such Notes or arranging for indemnification or any other
matter that requires handling by the Trustee:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">TRUSTEE:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wilmington Trust Company</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Rodney Square North</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1100 North Market Street</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wilmington, Delaware 19890-0001</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attn: Kristin Long</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Facsimile No.: (302)&nbsp;636-4140</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telephone No.: (302)&nbsp;636-6016</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(for confirmation of receipt or to request</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">information)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither Calpine nor the Trustee can assure you that any mutilated, lost, stolen or destroyed
certificate can be replaced prior to the Early Tender Date or the Expiration Date, as applicable.
In addition, neither Calpine nor the Trustee shall have any liability for failing to replace any
such certificate.


<P style="font-size: 10pt; text-align: justify"><B>Special Payment and Delivery Instructions</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tendering Holders should indicate in the applicable box in the Letter of Transmittal the name
and address to which payment of the Tender Payment or the Purchase Price and/or certificates
evidencing Notes for amounts not accepted for tender, each as appropriate, are to be issued or
sent, if different from the name and address of the person signing the Letter of Transmittal. In
the case of issuance in a different name, the employer identification or Social Security number of
the person named must also be indicated and a substitute Form W-9 for such recipient must be
completed. If no such instructions are given, payment of the Tender Payment or the Purchase Price,
or Notes not accepted for purchase, as the case may be, will be made or returned, as the case may
be, to the Holder of Notes tendered.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Notes are held of record in the name of a person other than the signer of the Letter
of Transmittal, or if certificates for unpurchased Notes are to be issued to a person other than
the registered Holder, the certificates must be endorsed or accompanied by appropriate bond
powers, in either case signed exactly as the name of the registered Holder appears in the
certificates, with the signature on the certificates or bond powers guaranteed as described below.


<P style="font-size: 10pt; text-align: justify"><B>Backup Withholding Tax</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under U.S. federal tax laws, the Tender Agent may be required to withhold 28% of the amount
of any payments made to certain Holders pursuant to the Offer. To avoid such backup withholding
with respect to any payment received in respect of the Offer, a tendering U.S. Holder (as defined
herein) must provide the Tender Agent with its correct taxpayer identification number and certify
that such Holder is not subject to backup withholding by completing the substitute Form W-9
included in the Letter of Transmittal. A Non-U.S. Holder (as defined herein) can generally avoid
such backup withholding by certifying its non-U.S. status on Form W-8BEN, a copy of which may be
obtained upon request from the Tender Agent or from the Internal Revenue Service at its website at
www.irs.gov. For a discussion of certain other U.S. federal income tax consequences to U.S.
Holders, see &#147;Material U.S. Federal Income Tax Consequences&#148; below and for a discussion of certain
Canadian federal income tax consequences to Holders, see &#147;Material Canadian Federal Income Tax
Consequences&#148; below.


<P align="center" style="font-size: 10pt">12
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P style="font-size: 10pt; text-align: justify"><B>Other Matters</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tenders of Notes pursuant to any of the procedures described above, and acceptance thereof by
Calpine for purchase, will constitute a binding agreement between Calpine and the tendering Holder
of such Notes, upon the terms and subject to the conditions of the Offer in effect on the date the
Notes are accepted for payment.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no guaranteed delivery provisions provided by Calpine in conjunction with the Offer
under the terms of this Offer or any of the Offer Documents. Holders must tender their Notes in
accordance with the procedures set forth under &#147;Procedures for Tendering Notes.&#148;


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By tendering a Letter of Transmittal (or by tendering Notes through book-entry transfer) as
set forth above, and subject to and effective upon acceptance for purchase of, and payment for,
the Notes tendered therewith, a tendering Holder (i)&nbsp;irrevocably sells, assigns and transfers to
or upon the order of Calpine all right, title and interest in and to all the Notes tendered
thereby, (ii)&nbsp;waives any and all other rights with respect to the Notes (including, without
limitation, the tendering Holder&#146;s waiver of any existing or past defaults and their consequences
in respect of the Notes, the indenture under which the Notes were issued, and the guarantee
thereof by Calpine), (iii)&nbsp;releases and discharges Calpine and its subsidiaries and affiliates
from any and all claims such Holder may have now, or may have in the future, arising out of, or
related to, the Notes, including, without limitation, any claims that such Holder is entitled to
receive additional principal or interest payments with respect to the Notes or to participate in
any redemption or defeasance of the Notes and (iv)&nbsp;irrevocably constitutes and appoints the Tender
Agent as the true and lawful agent and attorney-in-fact of such Holder with respect to any such
tendered Notes, with full power of substitution and resubstitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest) to (a)&nbsp;deliver certificates
representing such Notes, or transfer ownership of such Notes on the account books maintained by
DTC or other relevant Clearing System, together, in any such case, with all accompanying evidences
of transfer and authenticity, to Calpine, (b)&nbsp;present such Notes for transfer on the relevant
security register, and (c)&nbsp;receive all benefits or otherwise exercise all rights of beneficial
ownership of such Notes (except that the Tender Agent will have no rights to, or control over,
funds from Calpine, except as agent for the tendering Holders, for the Tender Payment or the
Purchase Price for any tendered Notes that are purchased by us).


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All questions as to the form of all documents and the validity (including time of receipt)
and acceptance of all tenders of Notes will be determined by Calpine, in its sole discretion, the
determination of which shall be final and binding. Alternative, conditional or contingent tenders
of Notes will not be considered valid. Calpine reserves the absolute right, in its sole
discretion, to reject any or all tenders of Notes that are not in proper form or the acceptance of
which, in its opinion, would be unlawful. Calpine also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Notes.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calpine&#146;s interpretation of the terms and conditions of the Offer (including the instructions
in the Letter of Transmittal) will be final and binding. Any defect or irregularity in connection
with tenders of Notes must be cured within such time as Calpine determines, unless waived by
Calpine. Tenders of Notes shall not be deemed to have been made until all defects and
irregularities have been waived by Calpine or cured. A defective tender (which defect is not
waived by us) will not constitute a valid tender of the Notes. None of Calpine, the Tender Agent,
the Trustee, the Information Agent, the Dealer Manager or any other person will be under any duty
to give notice of any defects or irregularities in tenders of Notes, or will incur any liability
to Holders for failure to give any such notice.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Letters of Transmittal, Notes and any other required documents should be sent to the Tender
Agent only and not to Calpine, the Information Agent or the Dealer Manager.</B>


<P align="center" style="font-size: 10pt"><B>WITHDRAWAL OF TENDERS AND ABSENCE OF APPRAISAL RIGHTS</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes tendered on or prior to the Early Tender Date may be withdrawn at any time on or prior
to the Early Tender Date, but not thereafter, except as may be required by law. Notes tendered
subsequent to the Early Tender Date and on or prior to the Expiration Date may be withdrawn at any
time on or prior to the Expiration Date but not thereafter. However, if a tender is withdrawn, the
Holder will not be eligible to receive the applicable Tender Payment or Purchase Price for those
Notes.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event the Offer is terminated by the Company, the Notes tendered pursuant to the Offer
will be promptly returned to the tendering Holder (or, in the case of Notes tendered by book-entry
transfer, such Notes will be


<P align="center" style="font-size: 10pt">13
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<DIV style="font-family: 'Times New Roman',Times,serif">



<P style="font-size: 10pt; text-align: justify">credited to the account maintained at DTC or other relevant Clearing
System from which such Notes were delivered). If the Offer is amended on or prior to the Early
Tender Date in a manner determined by Calpine, in its sole discretion, to constitute a material
adverse change to the Holders, Calpine promptly will disclose such amendment and, if necessary,
extend the Early Tender Date for a period deemed by Calpine to be adequate to permit Holders of
the Notes to tender or withdraw their Notes. In addition, Calpine may, if it deems appropriate,
extend the Early Tender Date for any other reason. If Calpine makes a material change in the terms
of the Offer or the information concerning the Offer or waives a material Condition of the Offer,
Calpine will disseminate additional Offer materials and extend the Offer to the extent required by
law. If the consideration to be paid in the Offer is increased or decreased or the principal
amount of Notes subject to the Offer is decreased, the Offer will remain open at least 10 business
days from the date Calpine first gives notice to Holders, by public announcement or otherwise, of
such increase or decrease. In addition, Calpine may, if it deems appropriate, extend the Offer for
any other reason.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a withdrawal of Notes tendered to be effective, (a)&nbsp;a written or facsimile transmission
notice of withdrawal or revocation must be received by the Tender Agent at its address set forth
on the back cover of this Offer to Purchase on or prior to the Early Tender Date or the Expiration
Date, as applicable, or (b)&nbsp;a properly transmitted &#147;Request Message&#148; through ATOP (or through the
applicable procedures of the relevant Clearing System) must be delivered on or prior to the Early
Tender Date or Expiration Date, as applicable. Any such notice of withdrawal for Notes must (i)
specify the name of the person who tendered the Notes to be withdrawn, (ii)&nbsp;contain a description
of the Notes to be withdrawn and the aggregate principal amount represented by such Notes and
(iii)&nbsp;be signed by the Holder of such Notes in the same manner as the original signature on the
Letter of Transmittal by which such Notes were tendered (including any required signature
guarantees), or be accompanied by (x)&nbsp;documents of transfer sufficient to have the Trustee
register the transfer of the Notes into the name of the person withdrawing such Notes and (y)&nbsp;a
properly completed irrevocable proxy authorizing such person to effect such withdrawal on behalf
of such Holder. If the Notes to be withdrawn have been delivered or otherwise identified to the
Tender Agent, a signed notice of withdrawal is effective immediately upon written or facsimile
notice of such withdrawal even if physical release is not yet effected.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any Notes properly withdrawn will be deemed to be not validly tendered for purposes of the
Offer. Any permitted withdrawal of Notes may not be rescinded, and any Notes properly withdrawn
will thereafter be deemed not validly tendered for purposes of the Offer; <I>provided, however</I>, that
validly withdrawn Notes may be re-tendered by again following one of the appropriate procedures
described herein at any time on or prior to the Early Tender Date or the Expiration Date, as
applicable.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All questions as to the validity, form and eligibility (including time of receipt) of notices
of withdrawal of Notes will be determined by Calpine, in its sole discretion (and Calpine&#146;s
determination shall be final and binding). None of Calpine, the Tender Agent, the Dealer Manager,
the Information Agent, the Trustee or any other person will be under any duty to give notification
of any defects or irregularities in any notice of withdrawal, or incur any liability for failure
to give any such notification.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes are debt obligations of Finance I and Finance II, are fully and unconditionally
guaranteed by Calpine, and are governed by the indentures with respect to such Notes. There are no
appraisal or other similar statutory rights available to Holders in connection with the Offer.


<P align="center" style="font-size: 10pt"><B>CONDITIONS TO THE OFFER</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any other provision of the Offer, Calpine will not be required to accept for
purchase, or to pay for, any Notes tendered pursuant to the Offer and may terminate, extend or
amend the Offer and may (subject to Rule&nbsp;14e-1(c) under the Exchange Act, which requires that an
offeror pay the consideration offered or return the securities deposited by or on behalf of the
Holders thereof promptly after the termination or withdrawal of a tender offer) postpone the
acceptance for purchase of, and payment for, Notes so tendered if any of the Conditions have not
been satisfied on or prior to the Expiration Date. Calpine will not be required to pay the
applicable Tender Payment or Purchase Price in connection with the Offer unless it shall have
accepted the Notes for purchase pursuant to the Offer.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All the Conditions shall be deemed to be satisfied on the Settlement Date, unless any of the
following conditions shall occur on or after the date of this Offer and on or prior to the
Settlement Date.


<P align="center" style="font-size: 10pt">14
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P style="font-size: 10pt; text-align: justify">The conditions (the &#147;<B>Conditions</B>&#148;) shall mean the absence of:



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(i)&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">in the sole judgment of Calpine, any actual or threatened legal impediment to the
purchase of Notes pursuant to the Offer,</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(ii)&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">any change or development, including a prospective change or development, in the
general economic, financial, currency exchange or market conditions in the United States
or elsewhere that (1)&nbsp;in the sole judgment of Calpine, has or may have a material adverse
effect on the market price of the Notes or upon trading in or upon the value of the Notes
to Calpine or (2)&nbsp;in the sole judgment of Calpine, could have a material adverse effect
on the business, financial condition, income, operations or prospects of Calpine and its
subsidiaries, taken as a whole (a &#147;<B>Material Adverse Effect</B>&#148;),</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(iii)&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">the institution, threat or pendency of any action or proceeding before any court,
governmental, regulatory or administrative agency or authority or instrumentality, or by
any person, in connection with the Offer that challenges the making of the Offer or that
could, in the sole judgment of Calpine, have a Material Adverse Effect,</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(iv)&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">the occurrence or likely occurrence of any event affecting the business or financial
affairs of Calpine that, in Calpine&#146;s sole judgment, would or might have a Material
Adverse Effect or prohibit, prevent, restrict or delay consummation
of the Offer, or otherwise make it inadvisable to proceed
with the purchase of Notes pursuant to the Offer,</DIV></TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(v)&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">the occurrence or likely occurrence if any event that, in
Calpine&#146;s sole judgment, materially adversely affects any of its
current financing activities, asset sales or liquidity generating or
enhancing activities or its operational cash flow,</DIV></TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(vi)&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">the occurrence of any material adverse development, in the sole judgment of Calpine,
with respect to any action, proceeding or investigation concerning the Company existing
on the date hereof,</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(vii)&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">the occurrence of any of the following:</DIV></TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">any general suspension of, shortening of hours for, or limitation on prices for,
trading in securities in the United States securities or financial markets,</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">any significant change in the trading prices for the Notes that is adverse to
Calpine or any of its affiliates,</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">a significant impairment in the trading market for debt securities,</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">a declaration of a banking moratorium or any suspension of payments in respect
of banks in the United States,</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">there is (i)&nbsp;an outbreak or escalation of hostilities or acts of terrorism
involving the United States or declaration of a national emergency or war by the
United States or (ii)&nbsp;any other calamity or crisis or any change in political,
financial or economic conditions, if the effect of any such event in (i)&nbsp;or (ii),
in Calpine&#146;s sole judgment, makes it impracticable or inadvisable to proceed with
the Offer;</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">any limitation (whether or not mandatory) by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, on, or other
event that, in the reasonable judgment of Calpine, might affect the extension of
credit by banks or other lending institutions,</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">any significant change in the United States currency exchange rates or a
suspension of, or limitations on, the markets therefor (whether or not mandatory),
or</DIV></TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD><DIV style="text-align: justify">in the case of any of the foregoing existing on the date hereof, in the sole
judgment of Calpine, a material acceleration or worsening thereof.</DIV></TD>
</TR>

</TABLE>


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Conditions to the Offer are for the sole benefit of Calpine and may be asserted by
Calpine in its sole discretion regardless of the circumstances giving rise to such Conditions or
may be waived by Calpine, in whole or


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<DIV style="font-family: 'Times New Roman',Times,serif">



<P style="font-size: 10pt; text-align: justify">in part, at any time and from time to time, in its sole
discretion, whether or not any other Condition of the Offer is also waived. Any determination by
Calpine concerning the events described in this section shall be final and binding upon all
Holders and other persons. The failure by Calpine at any time to exercise any of the foregoing
rights will not be deemed a waiver of any other right and each right will be deemed an ongoing
right which may be asserted at any time and from time to time. Calpine has not made a decision as
to what circumstances would lead it to waive any of the Conditions. Any such waiver would depend
on circumstances prevailing at the time of such waiver.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Although Calpine has no present plans or arrangements to do so, Calpine reserves the right to
amend, at any time (subject to Rule&nbsp;14e-1 under the Exchange Act), the terms of the Offer. Calpine
will give Holders notice of such amendments as may be required by applicable law</B>.


<P align="center" style="font-size: 10pt"><B>MARKET AND TRADING INFORMATION</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Finance II Notes are listed for trading on the Luxembourg Stock Exchange. The Dollar
Notes are not listed on any securities exchange nor are they included in any automated quotation
system. To the extent that any of the Notes are traded, prices of the Notes may fluctuate greatly
depending on the trading volume and the balance between buy and sell orders. Holders are urged to
obtain current information with respect to the market prices for the Notes.


<P align="center" style="font-size: 10pt"><B>MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of the material U.S. federal income tax consequences relating to
the sale of Notes by Holders pursuant to the Offer. This summary is based on the Internal Revenue
Code of 1986, as amended to the date hereof (the &#147;<B>Code</B>&#148;), administrative pronouncements, judicial
decisions and existing and proposed United States Treasury regulations under the Code (&#147;<B>Treasury
Regulations</B>&#148;), changes to any of which subsequent to the date hereof may affect the tax
consequences described herein. Such changes could be applied retroactively in a manner that could
adversely affect the Holders. This summary discusses only Notes held as capital assets within the
meaning of Section&nbsp;1221 of the Code. It does not discuss all of the tax consequences that may be
relevant to a Holder in light of such Holder&#146;s particular circumstances or to Holders subject to
special rules, such as certain financial institutions, certain former citizens or residents of the
United States, tax exempt organizations, insurance companies, dealers or traders in securities or
currencies, U.S. Holders (as defined herein) who hold the Notes as a position in a &#147;straddle&#148; or
as part of a &#147;synthetic security&#148; or &#147;hedge,&#148; &#147;conversion transaction&#148; or other integrated
investment, Holders that have a &#147;functional currency&#148; other than the United States dollar, and
investors in certain pass-through entities (such as partnerships), all of whom may be subject to
tax rules that differ significantly from those summarized below. Holders of Notes should consult
their tax advisors with regard to the application of the United States federal income tax laws to
their particular situation and the sale of the Notes, as well as the applicability of state, local
or foreign income or other tax laws.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used herein, the term &#147;<B>U.S. Holder</B>&#148; means an owner of a Note that, for U.S. federal income
tax purposes is (a)&nbsp;a citizen or resident of the United States, (b)&nbsp;a corporation or other entity
taxable as a corporation organized under the laws of the United States or of any political
subdivision thereof (including the States and the District of Columbia), (c)&nbsp;estates, the income
of which is subject to United States federal income taxation regardless of its source, or (d)
trusts if (i)&nbsp;a court within the United States is able to exercise primary supervision over the
administration of the trust and (ii)&nbsp;one or more United States persons have the authority to
control all substantial decisions of the trust. In addition, certain trusts in existence on August
20, 1996 and treated as U.S. Holders prior to such date may also be treated as U.S. Holders. As
used herein, the term &#147;<B>Non-U.S. Holder</B>&#148; means an owner of a Note (other than a partnership) that
is not a U.S. Holder. If a partnership (including for this purpose any entity treated as a
partnership for U.S. federal tax purposes) is a beneficial owner of the Notes, the treatment of a
partner in the partnership will generally depend upon the status of
the partner and the activities of the partnership. Partnerships and partners in such
partnerships should consult their tax advisors about the U.S. federal income tax consequences of
the sale of Notes pursuant to the Offer.


<P align="center" style="font-size: 10pt">16
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P style="font-size: 10pt; text-align: justify"><B>Consequences to Tendering U.S. Holders</B>



<P style="font-size: 10pt; text-align: justify"><B><I>Gain or Loss Upon Sale</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The sale of a Note by a U.S. Holder pursuant to the Offer will be a taxable transaction for
U.S. federal income tax purposes. A U.S. Holder will recognize gain or loss in an amount equal to
the difference between the sales price (which amount will not include any amount attributable to
Interest, which will be taxed as defined as below) and the U.S. Holder&#146;s adjusted tax basis in the
Notes sold. Except with respect to any foreign currency gain or loss or market discount described
below, gain or loss on the sale of a Note pursuant to the Offer will generally be U.S. source
capital gain or loss. 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&#146;s holding period for the Note
exceeds one year. Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes.


<P style="font-size: 10pt; text-align: justify"><B><I>Foreign Currency Exchange Gain or Loss</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain or loss on the sale of a Note denominated in Euros or Sterling that is attributable to
changes in currency exchange rates will be ordinary income or loss and will be characterized as
exchange gain or loss. Gain or loss attributable to changes in exchange rates will equal the
difference between (i)&nbsp;the U.S. dollar value of the foreign currency principal amount of the Note,
determined on the date the Note is accepted for tender in the offer and (ii)&nbsp;the U.S. dollar value
of the foreign currency principal amount of the Note, determined on the date the U.S. Holder
acquired the Note. Payments received attributable to accrued interest will be treated in
accordance with the rules described below. The foreign currency gain or loss will be recognized
only to the extent of the total gain or loss realized by a U.S. Holder on the sale of the Note.
Foreign currency gain or loss will generally be treated as U.S. source gain or loss.


<P style="font-size: 10pt; text-align: justify"><B><I>Market Discount</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Note has &#147;market discount&#148; if its stated principal amount exceeds its tax basis in the
hands of a U.S. Holder immediately after its acquisition, unless a statutorily defined de minimis
exception applies. Gain recognized by a U.S. Holder with respect to a Note acquired with market
discount will generally be subject to tax as ordinary income to the extent of the market discount
accrued during the period the Note was held by such U.S. Holder. This rule will not apply to a
U.S. Holder who previously had elected to include market discount in income as it accrued for U.S.
federal income tax purposes.


<P style="font-size: 10pt; text-align: justify"><B><I>Treatment of Early Tender Payment to Tendering U.S. Holders.</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no authority directly addressing the U.S. federal income tax consequences of the
receipt of the Early Tender Payment. The Early Tender Payment will be treated for U.S. federal
income tax purposes as either (i)&nbsp;additional consideration in exchange for the tendered Notes, in
which case such amounts would be taken into account in determining the amount of gain or loss on
the exchange (see &#147;&#151; Gain or Loss upon Sale&#148;) or (ii)&nbsp;separate consideration for validly tendering
before the Early Tender Date. Calpine intends to treat the Early Tender Payment as additional
consideration received in exchange for tendered Notes. There can be no assurance, however, that
the Internal Revenue Service (the &#147;<B>IRS</B>&#148;) will not attempt to treat the receipt of the Early Tender
Payment as the receipt of separate consideration for validly tendering before the Expiration Date.
Holders are encouraged to consult their own tax advisors as to the proper treatment of the Early
Tender Payment.


<P style="font-size: 10pt; text-align: justify"><B><I>Accrued but Unpaid Interest</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Where a Holder receives amounts attributable to any Interest on the Notes, such amounts will
be ordinary income to the Holder unless such Holder has previously included such amounts in income
under its regular method of accounting, or otherwise has a tax basis in such interest. In the case
of the Dollar Notes, any amount received attributable to Interest not previously included in
income will be treated as U.S. source income. In the case of the Finance II Notes, any amount
received attributable to Interest not previously included in income will generally be
treated as foreign source income. In the case of a U.S. Holder of Finance II Notes that uses
a cash method of accounting, the amount of this foreign source income will equal the U.S. dollar
value of the foreign currency payment attributable to Interest (determined based on the spot rate
on the date the payment is received) regardless of


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<P style="font-size: 10pt; text-align: justify">whether the payment is in fact converted to
U.S. dollars at that time. In the case of a U.S. Holder of Finance II Notes that uses an accrual
method of accounting, the U.S. Holder will recognize exchange gain or loss (treated as ordinary
income or loss) on the date the proceeds attributable to Interest is actually received. The amount
of this ordinary exchange gain or loss will equal the difference between the U.S. dollar value of
the foreign currency payment received (determined based on the spot rate on the date the payment
is received) in respect of the accrual period during which the Notes are sold in the Offer and the
U.S. dollar value of interest income that has accrued during such accrual period determined using
the average exchange rate for such accrual period (or, if elected by the U.S. Holder, the spot
rate on the last day of the accrual period, or if the last day of the accrual period is within
five days of receipt of the payment, the spot rate on the date of receipt). If a U.S. Holder makes
one of the elections referred to above, such U.S. Holder must apply it consistently to all debt
instruments from year to year and cannot change the election without the consent of the IRS.


<P style="font-size: 10pt; text-align: justify"><B><I>Information Reporting and Backup Withholding</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, information reporting will apply to payments made to U.S. Holders in the Offer.
Under U.S. federal income tax law, backup withholding in respect of the Offer may apply if a
Holder who tenders Notes is not exempt from backup withholding and (i)&nbsp;fails to furnish such
Holder&#146;s taxpayer identification number (which, for an individual is his or her Social Security
number) to the Tender Agent (as payer) in the manner required, (ii)&nbsp;furnishes a taxpayer
identification number and the payer is notified by the IRS that such taxpayer identification
number is incorrect, (iii)&nbsp;is notified by the IRS that such Holder has failed to report payments
of interest and dividends or (iv)&nbsp;in certain circumstances, fails to certify, under penalties of
perjury, that such Holder has not been notified by the IRS that such Holder is subject to backup
withholding. Information reporting and backup withholding do not apply to payments made to certain
exempt recipients, such as most corporations. To prevent backup withholding, a Holder or other
payee that is not an exempt recipient should complete the substitute Form W-9 that is included in
the Letter of Transmittal certifying that the taxpayer identification number provided on such form
is correct and that such Holder or other payee is not subject to backup withholding. Backup
withholding is not an additional tax. Rather, any amounts withheld from a payment to a Holder
under the backup withholding rules are allowed as a refund or credit against such Holder&#146;s U.S.
federal income tax liability, provided that the required information is furnished to the IRS. If
the payer is not provided with the correct taxpayer identification number, the Holder may be
subject to a penalty imposed by the IRS.


<P style="font-size: 10pt; text-align: justify"><B>Consequences to Tendering Non-U.S. Holders</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as described below with respect to the Early Tender Payment and payments attributable
to Interest, gain or loss recognized by a tendering Non-U.S. Holder of the Notes will generally
not be subject to U.S. federal income tax unless (1)&nbsp;any gain is effectively connected with the
conduct of a trade or business within the United States by such Non-U.S. Holder or (2)&nbsp;in the case
of a Non-U.S. Holder who is an alien individual, such Non-U.S. Holder is present in the United
States for 183 or more days during the taxable year of the disposition in the Offer, and either
(A)&nbsp;such Non-U.S. Holder has a &#147;tax home&#148; in the United States or (B)&nbsp;the disposition is
attributable to an office or other fixed place of business maintained by the Non-U.S. Holder in
the United States. Individual Non-U.S. Holders who have spent (or expect to spend) 183&nbsp;days or
more in the United States in the taxable year of the Offer are urged to consult their tax advisors
as to the tax consequences of such sale.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-U.S. Holders of Finance II Notes generally will not be subject to United States federal
income tax or withholding tax on amounts received in the Offer that are attributable to Interest
unless such amounts are effectively connected with the conduct of a United States trade or
business of the Non-U.S. Holder. Amounts received by a Non-U.S. Holder in the Offer that are
attributable to Interest on the Dollar Notes will not be subject to United States federal income
tax or a 30% withholding tax, provided that such amounts are not effectively connected with the
conduct of a trade or business within the United States by such Non-U.S. Holder and provided that
(1)&nbsp;the Non-U.S. Holder does not actually or constructively own 10% or more of the total combined
voting power of all classes of stock entitled to vote; (2)&nbsp;the Non-U.S. Holder is not a controlled
foreign corporation that is related to Calpine through stock ownership; (3)&nbsp;the Non-U.S. Holder is
not a bank which acquired the Dollar Notes 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)&nbsp;the Non-U.S. Holder certifies to the payor or the payor&#146;s agent, under penalties
of perjury, that it is not a United States person and provides its name, address and certain other
information on a properly executed IRS Form W-8BEN or a suitable substitute form or (B)&nbsp;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 Dollar Notes in such


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<P style="font-size: 10pt; text-align: justify">capacity, certifies to the payor or the payor&#146;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 payor&#146;s agent with a copy thereof. The
applicable Treasury Regulations also provide alternative methods for satisfying the certification
requirements of clause (4)&nbsp;above. If a Non-U.S. Holder holds the Dollar Notes through certain
foreign intermediaries or partnerships, such holder and the foreign intermediary or partnership
may be required to satisfy certification requirements under applicable Treasury Regulations.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except to the extent that an applicable income tax treaty otherwise provides, a Non-U.S.
Holder will be taxed with respect to gain realized on the sale of Notes and amounts attributable
to accrued interest on the Notes in the same manner as a U.S. Holder if such amounts are
effectively connected with a United States trade or business of the Non-U.S. Holder. Effectively
connected income received or accrued by a corporate Non-U.S. Holder may also, under certain
circumstances, be subject to an additional &#147;branch profits&#148; tax at a 30% rate (or, if applicable,
at a lower tax rate specified by an applicable income tax treaty). Although effectively connected
interest 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 Form W-8ECI (or
successor form) to the payor or the payor&#146;s agent.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The U.S. federal income tax consequences of the Early Tender Payment are unclear. See
&#147;&#151;Consequences to Tendering U.S. Holders&#151;Treatment of Early Tender Payment to Tendering U.S.
Holders.&#148; If the Early Tender Payment were treated as separate consideration for validly
tendering Notes before the Early Tender Date, the Early Tender Payment could be subject to 30%
U.S. federal withholding tax, unless an applicable income tax treaty provided otherwise. Calpine
intends, however, to treat the Early Tender Payment as additional consideration received in
exchange for tendered Notes treated in the same manner as described above.


<P style="font-size: 10pt; text-align: justify"><B><I>Information Reporting and Backup Withholding</I></B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information reporting and backup withholding 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 &#147;broker&#148; as defined
in the applicable Treasury Regulations (absent actual knowledge that the payee is a United States
person), unless such broker (i)&nbsp;is a United States person as defined in the Code, (ii)&nbsp;is a
foreign person that derives 50% of more of its gross income for certain periods from the conduct
of a trade or business within the United States, (iii)&nbsp;is a controlled foreign corporation for
U.S. federal income tax purposes or (iv)&nbsp;is a foreign partnership with certain U.S. connections.
Payment of the proceeds of any such sale effected outside the United States by a foreign office of
any broker that is described in the preceding sentence may be subject to backup withholding tax
and information reporting requirements unless such broker has documentary evidence in its records
that the beneficial owner of the Notes is a Non-U.S. Holder and certain other requirements are met
or the beneficial owner otherwise establishes an exemption. Payments of the proceeds of any sale
of Notes to or through the United States office of a broker are subject to backup withholding tax
and information reporting requirements unless the beneficial owner of the Notes provides a Form
W-8BEN (or a suitable substitute form) certifying, under penalties of perjury, that it is not a
United States person and provides certain other information.


<P align="center" style="font-size: 10pt"><B>MATERIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The discussion below is intended to be a general description only of certain material
Canadian federal income tax considerations applicable to the sale of Notes by Holders pursuant to
the Offer, and is not intended to be, nor should it be construed to be, legal or tax advice to any
particular Holder. Accordingly, Holders are urged to consult their own tax advisors with respect
to the Canadian federal and provincial tax consequences of a sale of Notes pursuant to the Offer.</B>


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of the principal Canadian federal income tax considerations
generally applicable under the <I>Income Tax Act </I>(Canada) (the <B>&#147;Tax Act&#148;</B>) to a Holder who sells Notes
pursuant to the Offer, and who for purposes of the Tax Act, and at all relevant times, is not
resident or deemed to be resident
in Canada, deals at arm&#146;s length with the relevant issuer of the Notes, and does not use or
hold, and is not deemed to use or hold, the Notes in carrying on business in Canada. For purposes
of the Tax Act, related persons (as defined therein) are deemed not to deal at arm&#146;s length, and
it is a question of fact whether persons not related to each other deal at arm&#146;s length.


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<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This summary is based on the current provisions of the Tax Act and the Regulations thereunder
(the <B>&#147;Regulations&#148;</B>) in force on the date hereof, specific proposals (the <B>&#147;Tax Proposals&#148;</B>) to amend
the Tax Act or the Regulations publicly announced by the Minister of Finance prior to the date
hereof, and our understanding of the current published administrative and assessing practices of
the Canada Customs and Revenue Agency (the <B>&#147;CCRA&#148;</B>). This summary is not exhaustive of all possible
Canadian income tax consequences and, except for the Tax Proposals, does not take into account or
anticipate any changes in law or changes in the administrative and assessing practices of the
CCRA, whether by legislative, governmental or judicial action, nor does it take into account
income tax laws or considerations of any province or territory of Canada or any jurisdiction other
than Canada. No assurance can be given that the Tax Proposals will become law in their present
form or at all.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Canadian non-resident withholding tax or any other tax on income or capital gain will be
payable by a Holder who is not resident in Canada for purposes of the Tax Act and who sells the
Notes pursuant to the Offer.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THE PRECEDING DISCUSSION OF CERTAIN U.S. AND CANADIAN FEDERAL INCOME TAX CONSEQUENCES IS FOR
GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE AND DOES NOT CONSIDER THE PARTICULAR FACTS AND
CIRCUMSTANCES OF ANY HOLDER&#146;S SITUATION OR STATUS. ACCORDINGLY, HOLDERS (INCLUDING NON-TENDERING
HOLDERS) SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM,
INCLUDING THE APPLICABILITY AND EFFECT OF ANY FEDERAL, STATE, LOCAL OR FOREIGN INCOME AND OTHER
TAX LAWS, AND OF ANY PROPOSED CHANGES IN SUCH APPLICABLE LAWS.</B>


<P align="center" style="font-size: 10pt"><B>DEALER MANAGER; INFORMATION AGENT AND TENDER AGENT</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calpine has retained Credit Suisse First Boston LLC to act as Dealer Manager in connection
with the Offer. In its capacity as Dealer Manager, Credit Suisse First Boston LLC may contact
Holders regarding the Offer and may request brokers, dealers, commercial banks, trust companies
and other nominees to forward the Offer Documents and related materials to beneficial owners of
Notes.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At any given time, the Dealer Manager may trade the Notes and other of Calpine&#146;s or its
subsidiaries&#146; securities for its own accounts, or for the accounts of its customers, and
accordingly, may hold a long or short position in the Notes or those other securities. The Dealer
Manager is not obligated to make a market in the Notes.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Dealer Manager will be paid customary fees for its services as Dealer Manager in
connection with the Offer. Calpine has agreed to reimburse the Dealer Manager for its reasonable
out-of-pocket expenses for its services as Dealer Manager in connection with the Offer. Calpine
also has agreed to indemnify the Dealer Manager and its affiliates against certain liabilities
under federal or state law or otherwise caused by, relating to or arising out of the Offer.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Dealer Manager and its affiliates have in the past engaged, and may in the future engage,
in transactions with and perform services, including commercial banking, financial advisory,
underwriting and other investment banking services, for Calpine and its affiliates in the ordinary
course of business. Credit Suisse First Boston LLC is acting as financial advisor to Calpine in
connection with the sale of Calpine&#146;s Saltend Energy Centre. In addition, Credit Suisse First
Boston LLC is currently acting as placement agent in connection with a financing for a subsidiary
of Calpine.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bank of New York has been appointed Tender Agent for the Offer. Its affiliate, The Bank
of New York (Luxembourg) S.A., will act as Tender Agent in Luxembourg. All deliveries and
correspondence sent to the Tender Agent should be directed to one of its addresses set forth on
the last page of this Offer to Purchase. Calpine will pay the Tender Agent reasonable and
customary fees for its services and reimburse the Tender Agent for its reasonable
out-of-pocket expenses in connection therewith. Calpine has also agreed to indemnify the
Tender Agent for certain liabilities, including liabilities under the federal securities laws.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MacKenzie Partners, Inc. has been appointed Information Agent with respect to the Offer.
Calpine will pay the Information Agent reasonable and customary fees for its services and
reimburse the Information Agent for its reasonable out-of-pocket expenses in connection therewith.
Requests for assistance or additional copies of this Offer to Purchase and the Letter of
Transmittal may be directed to the Information Agent at its address and telephone


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<P style="font-size: 10pt; text-align: justify">number set forth
on the last page of this Offer to Purchase. Calpine has also agreed to indemnify the Information
Agent for certain liabilities, including liabilities under the federal securities laws.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Offer, directors and officers of Calpine and its respective affiliates
may solicit tenders by use of the mails, personally or by telephone, facsimile, telegram,
electronic communication or other similar methods. Directors and officers of Calpine will not be
specifically compensated for these services.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the fees and expenses payable to the Dealer Manager, the Tender Agent and the
Information Agent, Calpine will pay brokerage houses and other custodians, nominees and
fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this
Offer to Purchase and related documents to the beneficial owners of the Notes and in handling or
forwarding tenders for purchase.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calpine will pay all transfer taxes, if any, applicable to the purchase of Notes pursuant to
the Offer. If, however, Notes for principal amounts not accepted for tender are to be delivered
to, or are to be registered or issued in the name of, any person other than the registered Holder
of the Notes, or if tendered Notes are to be registered in the name of any person other than the
person signing the Letter of Transmittal, or if a transfer tax is imposed for any reason other
than the purchase of Notes pursuant to the Offer, then the amount of any such transfer tax
(whether imposed on the registered Holder or any other person) will be payable by the tendering
Holder. If satisfactory evidence of payment of such tax or exemption therefrom is not submitted,
then the amount of such transfer tax will be deducted from the Tender Payment or Purchase Price,
as applicable, otherwise payable to such tendering Holder.


<P align="center" style="font-size: 10pt"><B>MISCELLANEOUS</B>



<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Offer is not being made to (nor will tenders of Notes be accepted from or on behalf of)
Holders in any jurisdiction in which the making or acceptance of the Offer would not be in
compliance with the laws of such jurisdiction. However, Calpine, in its sole discretion, may take
such action as Calpine may deem necessary to make or extend the Offer in any such jurisdiction.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Offer is not subject to Section 13(e) of, or Rules&nbsp;13e-3 or 13e-4 or Regulation&nbsp;14D
promulgated under, the Exchange Act. The Offer is being made in compliance with Regulation&nbsp;14E
under the Exchange Act. This Offer to Purchase has not been filed with or reviewed by any Federal
or State Securities Commission or Regulatory Authority of any jurisdiction, nor has any such
Commission or Authority passed upon the accuracy or adequacy of this Offer to Purchase. Any
representation to the contrary is unlawful and may be a criminal offense. In connection with the
Offer, directors, officers and regular employees of Calpine (who will not be specifically
compensated for such services) may solicit tenders by use of the mails, personally or by
telephone, telegram or facsimile transmissions.


<P style="font-size: 10pt; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other than with respect to the Tender Agent, the Information Agent and the Dealer Manager,
neither Calpine nor any of its affiliates has engaged, or made any arrangements for, and has no
contract, arrangement or understanding with, any broker, dealer, agent or other person regarding
the Offer hereunder. <B>No person has been authorized to provide any information or to make any
representations on behalf of Calpine or its affiliates in connection with the Offer, other than
those expressly set forth in this Offer to Purchase or in the Letter of Transmittal, and, if so
provided or made, such other information or representations must not be relied upon as having been
authorized by Calpine or any of its affiliates. </B>The delivery of this Offer to Purchase shall not,
under any circumstances, create any implication that the information set forth herein or in the
documents incorporated by reference herein is correct as of any time subsequent to the date hereof
or thereof.


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<P style="font-size: 10pt; text-align: justify"><B>APPENDIX A</B><BR>
<B>INDEX OF DEFINED TERMS</B>


<P><DIV style="position: relative; float: left; width: 48%">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="82%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Acceptance Date</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">ii</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Agent&#146;s Message</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ATOP</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">iv</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Board</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Book-Entry Confirmation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Calpine</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">CCRA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clearing System</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">iv</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clearing Systems</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clearstream, Luxembourg</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">iv</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Code</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commission</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">v</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Company</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Conditions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dealer Manager</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dollar Notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DTC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">iv</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Early Tender Date</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Early Tender Payment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Eligible Institution</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Euro Notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Euroclear</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">iv</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exchange Act</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expiration Date</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Finance I</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Finance II</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

</DIV>
<DIV style="position: relative; float: right; width: 48%">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="84%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Finance II Notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Holders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Information Agent</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">IRS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Issuers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Letter of Transmittal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Material Adverse Effect</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Maximum Tender Amount</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Medallion Signature Guarantor</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-U.S. Holder</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Offer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Offer Documents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Offer to Purchase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pound Notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Purchase Price</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Regulations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Settlement Date</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax Act</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax Proposals</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tender Agent</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tender Payment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right">Cover</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Treasury Regulations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">U.S. Holder</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

</DIV>
<BR clear="all"><BR>


<P align="center" style="font-size: 10pt">A-1
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><I>The Tender Agent for the Offer is:</I>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:15px; text-indent:-15px"><B>The Bank of New York, London Branch</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>The Bank of New York, New York</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Corporate Trust Operations
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Corporate Trust Operations</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">One Canada Square
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Reorganization Unit</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">London E14 5AL
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">101 Barclay Street &#151; 7 East</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">England
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">New York, New York 10286</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Attention: Ms.&nbsp;Julie Levy or Ms.&nbsp;Amanda Smith
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Attn: Mr.&nbsp;David Mauer</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Phone: &#043;44 (0)20 7964 6513
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Phone: (212)&nbsp;815-3687</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Fax: &#043;44 (0)20 7964 7294
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Fax: (212)&nbsp;298-1915</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><I>The Tender Agent in Luxembourg for the Offer is:</I>



<P align="center" style="font-size: 10pt"><B>The Bank of New York (Luxembourg) S.A.</B><BR>
Corporate Trust Operations<BR>
Aerogolf Center<BR>
1A Hoehenhof<BR>
L-1736 Senningerberg<BR>
Luxembourg


<P style="font-size: 10pt; text-align: justify"><B>Questions and requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective addresses and telephone numbers set forth below. Requests for
additional copies of the Offer Documents may be directed to the Information Agent. Holders may also
contact their broker, dealer, commercial bank, trust company, or other nominee through which they
hold the Notes with questions and requests for assistance.</B>



<P align="center" style="font-size: 10pt"><I>The Information Agent for the Offer is:</I>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>MacKenzie Partners, Inc.</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>MacKenzie Partners UK Limited</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">105 Madison Avenue
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Winchester House</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">New York, New York 10016
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">259-269 Old Marylebone Road</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Call Collect: (212)&nbsp;929-5500
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">London NW1 5RA</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">or
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">020 7170 4155</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Call Toll-Free: (800)&nbsp;322-2885</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Email: proxy@mackenziepartners.com</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><I>The Dealer Manager for the Offer is:</I>



<P align="center" style="font-size: 10pt"><B>Credit Suisse First Boston LLC</B><BR>
Eleven Madison Avenue<BR>
New York, New York 10010-3629<BR>
Call Toll Free: (800)&nbsp;820-1653<BR>
or<BR>
Call Collect: (212)&nbsp;325-7596<BR>
Attention: Liability Management Desk




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


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</HTML>
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</SUBMISSION>
