<PAGE>

                                                                     EXHIBIT 4.3


                                                                  EXECUTION COPY





                               Calpine Corporation



              Zero-Coupon Convertible Debentures due April 30, 2021

                                    INDENTURE

                           Dated as of April 30, 2001


                            Wilmington Trust Company

                                     TRUSTEE



<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                     Page
                                                                                                                     ----

<S>                                                                                                                <C>
         Section 1.1   Definitions...............................................................................     1
         Section 1.2   Other Definitions.........................................................................     4
         Section 1.3   Incorporation by Reference of Trust Indenture Act.........................................     5
         Section 1.4   Rules of Construction.....................................................................     6
         Section 1.5   Acts of Holders...........................................................................     6

                            ARTICLE II THE SECURITIES

         Section 2.1   Form and Dating...........................................................................     7
         Section 2.2   Execution and Authentication..............................................................     8
         Section 2.3   Registrar, Paying Agent and Conversion Agent..............................................     9
         Section 2.4   Paying Agent to Hold Money and Securities in Trust........................................     9
         Section 2.5   Securityholder Lists......................................................................    10
         Section 2.6   Transfer and Exchange.....................................................................    10
         Section 2.7   Replacement Securities....................................................................    11
         Section 2.8   Outstanding Securities; Determinations of Holders' Action.................................    12
         Section 2.9   Temporary Securities......................................................................    12
         Section 2.10  Cancellation..............................................................................    13
         Section 2.11  Persons Deemed Owners.....................................................................    13
         Section 2.12  Global Securities.........................................................................    13
         Section 2.13  CUSIP Numbers.............................................................................    17
         Section 2.14  Ranking...................................................................................    17

                            ARTICLE III REDEMPTION AND PURCHASES

         Section 3.1   Company's Right to Redeem; Notices to Trustee.............................................    18
         Section 3.2   Selection of Securities to Be Redeemed....................................................    18
         Section 3.3   Notice of Redemption......................................................................    18
         Section 3.4   Effect of Notice of Redemption............................................................    19
         Section 3.5   Deposit of Redemption Price...............................................................    19
         Section 3.6   Securities Redeemed in Part...............................................................    19
         Section 3.7   Purchase of Securities at Option of the Holder............................................    19
         Section 3.8   Purchase of Securities at Option of the Holder upon Change in Control.....................    25
         Section 3.9   Effect of Purchase Notice or Change in Control Purchase Notice............................    31
         Section 3.10  Deposit of Purchase Price or Change in Control Purchase Price.............................    32
         Section 3.11  Securities Purchased in Part..............................................................    32
         Section 3.12  Covenant to Comply With Securities Laws Upon Purchase of Securities.......................    32
         Section 3.13  Repayment to the Company..................................................................    32

                              ARTICLE IV COVENANTS

         Section 4.1   Payment of Securities.....................................................................    33
         Section 4.2   SEC and Other Reports.....................................................................    33
         Section 4.3   Compliance Certificate....................................................................    33
         Section 4.4   Further Instruments and Acts..............................................................    34
</TABLE>
<PAGE>

<TABLE>
<S>                                                                                                                  <C>
         Section 4.5   Maintenance of Office or Agency...........................................................    34
         Section 4.6   Calculation of Original Issue Discount....................................................    34

                         ARTICLE V SUCCESSOR CORPORATION

         Section 5.1   When Company May Merge or Transfer Assets.................................................    34

                        ARTICLE VI DEFAULTS AND REMEDIES

         Section 6.1   Events of Default.........................................................................    35
         Section 6.2   Acceleration..............................................................................    36
         Section 6.3   Other Remedies............................................................................    37
         Section 6.4   Waiver of Past Defaults...................................................................    37
         Section 6.5   Control by Majority.......................................................................    37
         Section 6.6   Limitation on Suits.......................................................................    38
         Section 6.7   Rights of Holders to Receive Payment......................................................    38
         Section 6.8   Collection Suit by Trustee................................................................    38
         Section 6.9   Trustee May File Proofs of Claim..........................................................    38
         Section 6.10  Priorities................................................................................    39
         Section 6.11  Undertaking for Costs.....................................................................    39
         Section 6.12  Waiver of Stay, Extension or Usury Laws...................................................    40

                               ARTICLE VII TRUSTEE

         Section 7.1   Duties of Trustee.........................................................................    40
         Section 7.2   Rights of Trustee.........................................................................    41
         Section 7.3   Individual Rights of Trustee..............................................................    42
         Section 7.4   Trustee's Disclaimer......................................................................    42
         Section 7.5   Notice of Defaults........................................................................    42
         Section 7.6   Reports by Trustee to Holders.............................................................    43
         Section 7.7   Compensation and Indemnity................................................................    43
         Section 7.8   Replacement of Trustee....................................................................    44
         Section 7.9   Successor Trustee by Merger...............................................................    44
         Section 7.10  Eligibility; Disqualification.............................................................    44
         Section 7.11  Preferential Collection of Claims Against Company.........................................    45

                       ARTICLE VIII DISCHARGE OF INDENTURE

         Section 8.1   Discharge of Liability on Securities......................................................    45

                              ARTICLE IX AMENDMENTS

         Section 9.1   Without Consent of Holders................................................................    45
         Section 9.2   With Consent of Holders...................................................................    46
         Section 9.3   Compliance with Trust Indenture Act.......................................................    47
         Section 9.4   Revocation and Effect of Consents, Waivers and Actions....................................    47
         Section 9.5   Notation on or Exchange of Securities.....................................................    47
         Section 9.6   Trustee to Sign Supplemental Indentures...................................................    47
         Section 9.7   Effect of Supplemental Indentures.........................................................    47

                              ARTICLE X CONVERSIONS
</TABLE>


                                       ii
<PAGE>

<TABLE>
<S>                                                                                                                  <C>
         Section 10.1   Conversion Privilege.....................................................................    47
         Section 10.2   Conversion Procedure.....................................................................    48
         Section 10.3   Fractional Shares........................................................................    48
         Section 10.4   Taxes on Conversion......................................................................    48
         Section 10.5   Company to Provide Stock.................................................................    49
         Section 10.6   Conversion Price Adjustments.............................................................    49
         Section 10.7   When Adjustment May Be Deferred..........................................................    52
         Section 10.8   When No Adjustment Required..............................................................    52
         Section 10.9   Notice of Adjustment.....................................................................    53
         Section 10.10  Voluntary Increase.......................................................................    53
         Section 10.11  Notice of Certain Transactions...........................................................    53
         Section 10.12  Reorganization of Company; Special Distributions.........................................    53
         Section 10.13  Company Determination Final..............................................................    54
         Section 10.14  Trustee's Adjustment Disclaimer..........................................................    54
         Section 10.15  Successive Adjustments...................................................................    54

                            ARTICLE XI MISCELLANEOUS

         Section 11.1   Trust Indenture Act Controls.............................................................    54
         Section 11.2   Notices..................................................................................    54
         Section 11.3   Communication by Holders with Other Holders..............................................    55
         Section 11.4   Certificate and Opinion as to Conditions Precedent.......................................    55
         Section 11.5   Statements Required in Certificate or Opinion............................................    56
         Section 11.6   Separability Clause......................................................................    56
         Section 11.7   Rules by Trustee, Paying Agent, Conversion Agent and  Registrar..........................    56
         Section 11.8   Legal Holidays...........................................................................    56
         Section 11.9   GOVERNING LAW............................................................................    56
         Section 11.10  No Recourse Against Others...............................................................    56
         Section 11.11  Successors...............................................................................    56
         Section 11.12  Multiple Originals.......................................................................    56
</TABLE>


                                      iii
<PAGE>

                  INDENTURE dated as of April 30, 2001 between CALPINE
CORPORATION, a Delaware corporation ("Company"), and WILMINGTON TRUST COMPANY, a
Delaware banking corporation ("Trustee").

                  Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's
Zero-Coupon Convertible Debentures due April 30, 2021:


                   DEFINITIONS AND INCORPORATION BY REFERENCE

                  Section 1.1 Definitions.

                  "144A Global Security" means a permanent Global Security in
the form of the Security attached hereto as Exhibit A-1, and that is deposited
with and registered in the name of the Depositary, representing Securities sold
in reliance on Rule 144A under the Securities Act.

                  "Affiliate" of any specified person means any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.

                  "Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.

                  "Board of Directors" means either the board of directors of
the Company or any duly authorized committee of such board.

                  "Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

                  "Business Day" means, with respect to any Security, a day that
in the State of New York or in the states in which the principal corporate trust
offices of the Trustee or the Paying Agent are located, is not a Saturday, a
Sunday or a day on which banking institutions are not required to be open.

                  "Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation or any and all equivalent ownership interests in a person (other
than a corporation).

                  "Certificated Securities" means Securities that are in the
form of the Securities attached hereto as Exhibit A-2.

<PAGE>

                  "Common Stock" shall mean the common stock, $.001 par value
per share, of the Company as in existence on the date of this Indenture or any
other shares of Capital Stock of the Company into which such common stock shall
be reclassified or changed.

                  "Company" means the party named as the "Company" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.

                  "Company Request" or "Company Order" means a written request
or order signed in the name of the Company by any two Officers.

                  "Corporate Trust Office" means the principal office of the
Trustee at which at any time its corporate trust business shall be administered,
which office at the date hereof is located at Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration, or such other address as the Trustee may designate from time to
time by notice to the Holders and the Company, or the principal corporate trust
office of any successor Trustee (or such other address as a successor Trustee
may designate from time to time by notice to the Holders and the Company).

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

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

                  "Global Securities" means Securities that are in the form of
the Securities attached hereto as Exhibit A-1 and that are issued to a
Depositary, and to the extent that such Securities are required to bear the
Legend required by Section 2.6, such Securities will be in the form of a 144A
Global Security.

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

                  "Indebtedness" means, without duplication, the principal or
face amount of (i) all obligations for borrowed money, (ii) all obligations
evidenced by debentures, notes or other similar instruments, (iii) all
obligations in respect of letters of credit or bankers acceptances or similar
instruments (or reimbursement obligations with respect thereto), (iv) all
obligations to pay the deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of business, (v) all
obligations as lessee which are capitalized in accordance with GAAP, and (vi)
all Indebtedness of others guaranteed by the Company or any of its Subsidiaries
or for which the Company or any of its Subsidiaries is legally responsible or
liable (whether by agreement to purchase indebtedness of, or to supply funds or
to invest in, others).

                  "Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof, including the provisions
of the TIA that are deemed to be a part hereof.

                  "Issue Date" of any Security means the date on which the
Security was originally issued or deemed issued as set forth on the face of the
Security.


                                       2
<PAGE>

                  "Issue Price" of any Security means, in connection with the
original issuance of such Security, the initial issue price at which the
Security is sold as set forth on the face of the Security.

                  "NYSE" means The New York Stock Exchange.

                  "Officer" means the Chairman of the Board, the President, any
Vice President, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, the Secretary, any Assistant Treasurer, any Assistant Secretary or
the Controller or Principal Accounting Officer of the Company.

                  "Officers' Certificate" means a written certificate containing
the information specified in Sections 11.4 and 11.5, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.3 shall be signed by the principal
executive, financial or accounting Officer of the Company but need not contain
the information specified in Sections 11.4 and 11.5.

                  "Opinion of Counsel" means a written opinion containing the
information specified in Sections 11.4 and 11.5, from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.

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

                  "Principal Amount at Maturity" of a Security means the
principal amount of a Security (other than the Restated Principal Amount thereof
) due at the Stated Maturity of the principal thereof.

                  "Redemption Date" shall mean the date specified in a notice of
redemption on which the Securities may be redeemed in accordance with the terms
of the Securities and this Indenture.

                  "Redemption Price" shall have the meaning set forth in
Paragraph 5 of the Securities.

                  "Responsible Officer" shall mean, when used with respect to
the Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.

                  "Restricted Security" means a Security required to bear the
restrictive legend set forth in the form of Security set forth in Exhibits A-1
and A-2 of this Indenture.

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

                  "SEC" means the Securities and Exchange Commission.


                                       3
<PAGE>

                  "Securities" means any of the Company's Zero-Coupon
Convertible Debentures due April 30, 2021, as amended or supplemented from time
to time, issued under this Indenture.

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

                  "Stated Maturity", when used with respect to any Security,
means April 30, 2021.

                  "Subsidiary" means any person of which at least a majority of
the outstanding Voting Stock shall at the time directly or indirectly be owned
or controlled by the Company or by one or more Subsidiaries or by the Company
and one or more Subsidiaries.

                  "TIA" means the Trust Indenture Act of 1939 as in effect on
the date of this Indenture, provided, however, that in the event the TIA is
amended after such date, TIA means, to the extent required by any such
amendment, the TIA as so amended.

                  "trading day" means a day during which trading in securities
generally occurs on the NYSE or, if the Common Stock is not listed on the NYSE,
on the principal other national or regional securities exchange on which the
Common Stock then is listed or, if the Common Stock is not listed on a national
or regional securities exchange, on the National Association of Securities
Dealers Automated Quotation System or, if the Common Stock is not quoted on the
National Association of Securities Dealers Automated Quotation System, on the
principal other market on which the Common Stock is then traded.

                  "Trustee" means the party named as the "Trustee" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.

                  "Voting Stock" of a person means Capital Stock of such person
of the class or classes pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of such person (irrespective of whether
or not at the time Capital Stock of any other class or classes shall have or
might have voting power by reason of the happening of any contingency).

                  Section 1.2 Other Definitions.


<TABLE>
<CAPTION>
Term Section:                                                    Defined in:

<S>                                                              <C>
"Accreted Value"..............................................   Exhibit A-1
"Administrative Action........................................   Exhibit A-1
"Agent Members"...............................................   2.12(e)
"beneficial owner"............................................   3.8(a)
"Bid Solicitation Agent"......................................   Exhibit A-1
"cash"........................................................   3.7(b)
"Change in Control"...........................................   3.8(a)
"Change in Control Notice"....................................   3.8(b)
"Change in Control Notice Date"...............................   3.8(b)
"Change in Control Purchase Date".............................   3.8(a)
"Change in Control Purchase Notice"...........................   3.8(c)
</TABLE>


                                       4

<PAGE>

<TABLE>
<S>                                                              <C>
"Change in Control Purchase Price"............................   3.8(a)
"Code"........................................................   4.6
"Company Notice"..............................................   3.7(d)
"Company Notice Date".........................................   3.7(b)
"Conversion Agent"............................................   2.3
"Conversion Date".............................................   10.2
"Conversion Rate".............................................   10.1
"Depositary"..................................................   2.1(a)
"Downward Interest Adjustment"................................   Exhibit A-1
"Event of Default"............................................   6.1
"Exchange Act"................................................   3.7(c)
"ex" date.....................................................   10.6(g)
"Expiration Time".............................................   10.6(e)
"interest payment date".......................................   Exhibit A-1
"Legal Holiday"...............................................   11.8
"Legend"......................................................   2.6(e)
"Market Price"................................................   3.7(c)
"Notice of Default"...........................................   6.1
"Option Exercise Date"........................................   Exhibit A-1
"Paying Agent"................................................   2.3
"Purchase Date"...............................................   3.7(a)
"Purchased Shares"............................................   10.6(e)
"Purchase Notice".............................................   3.7(a)
"Purchase Price"..............................................   3.7(a)
"QIB".........................................................   2.1(a)
"Redemption Price"............................................   Exhibit A-1
"Reference Date"..............................................   10.6(d)
"Registrar"...................................................   2.3
"Restated Principal Amount"...................................   Exhibit A-1
"Sale Price"..................................................   3.7(c)
"Securities Act"..............................................   3.7(c)
"semi-annual period"..........................................   Exhibit A-1
"Tax Event"...................................................   Exhibit A-1
"Trading Price"...............................................   Exhibit A-1
"Upward Interest Adjustment"..................................   Exhibit A-1
"Upward Interest Adjustment Date".............................   Exhibit A-1
</TABLE>

                  Section 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:

                  "Commission" means the SEC.

                  "indenture securities" means the Securities.

                  "indenture security holder" means a Securityholder.

                  "indenture to be qualified" means this Indenture.


                                       5
<PAGE>

                  "indenture trustee" or "institutional trustee" means the
Trustee.

                  "obligor" on the indenture securities means the Company or any
other obligor on the indenture securities.

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

                  Section 1.4 Rules of Construction. Unless the context
otherwise requires:

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

         (2) an accounting term not otherwise defined has the meaning assigned
to it and shall be construed in accordance with GAAP;

         (3) "or" is not exclusive;

         (4) "including" means including, without limitation; and

         (5) words in the singular include the plural, and words in the plural
include the singular.

                  Section 1.5 Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of Holders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.

                  (b) The fact and date of the execution by any person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such officer the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority. The fact and date of the
execution of any such instrument or writing, or the authority of the person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.

                  (c) The ownership of Securities shall be proved by the
register for the Securities.

                  (d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the holder of every Security issued upon
the registration of transfer thereof or in exchange


                                       6
<PAGE>

therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.

                  (e) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.

                                   ARTICLE II

                                 THE SECURITIES

                  Section 2.1 Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibits A-1
and A-2, which are a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage (provided
that any such notation, legend or endorsement required by usage is in a form
acceptable to the Company). The Company shall provide any such notations,
legends or endorsements to the Trustee in writing. Each Security shall be dated
the date of its authentication.

                  (a) 144A Global Securities. Securities offered and sold within
the United States to qualified institutional buyers as defined in Rule 144A
("QIBs") in reliance on Rule 144A shall be issued initially in the form of a
144A Global Security, which shall be deposited with the Trustee at its Corporate
Trust Office, as custodian for the Depositary (as defined below) and registered
in the name of The Depository Trust Company ("DTC") or the nominee thereof (DTC,
or any successor thereto, and any such nominee being hereinafter referred to as
the "Depositary"), duly executed by the Company and authenticated by the Trustee
as hereinafter provided. The aggregate principal amount of the 144A Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary as hereinafter provided.

                  (b) Global Securities in General. Each Global Security shall
represent such of the outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding
Securities from time to time endorsed thereon and that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions and conversions.

                  Any adjustment of the aggregate principal amount of a Global
Security to reflect the amount of any increase or decrease in the amount of
outstanding Securities represented


                                       7
<PAGE>

thereby shall be made by the Trustee in accordance with instructions given by
the Holder thereof as required by Section 2.12 hereof and shall be made on the
records of the Trustee and the Depositary.

                  (c) Book-Entry Provisions. This Section 2.1(c) shall apply
only to Global Securities deposited with or on behalf of the Depositary.

                  The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(c), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary, (b) shall
be delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall bear legends substantially to the following effect:

"THIS SECURITY IS ISSUED IN GLOBAL FORM AND REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") OR A NOMINEE THEREOF.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE REGISTERED FORM IN ACCORDANCE WITH THE TERMS OF THE INDENTURE (AS
DEFINED BELOW), THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO
A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY
DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY."

                  (d) Certificated Securities. Securities not issued as
interests in the Global Securities will be issued in certificated form
substantially in the form of Exhibit A-2 attached hereto. No Securities are
being issued in certificated form on the date hereof.

                  Section 2.2 Execution and Authentication. The Securities shall
be executed on behalf of the Company by any Officer. The signature of the
Officer on the Securities may be manual or facsimile.

                  Securities bearing the manual or facsimile signatures of
individuals who were at the time of the execution of the Securities Officers of
the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of
authentication of such Securities.

                  No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein duly executed by the Trustee by manual signature of an authorized
officer, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder.


                                       8
<PAGE>

                  The Trustee shall authenticate and deliver Securities for
original issue in an aggregate Principal Amount at Maturity of up to
$1,000,000,000 upon one or more Company Orders without any further action by the
Company. The aggregate principal amount of the Securities due at the Stated
Maturity thereof outstanding at any time may not exceed the amount set forth in
the foregoing sentence, except as provided in Section 2.7 and upon the
occurrence of an Upward Interest Adjustment or Tax Event as contemplated in the
form of Security attached hereto as Exhibit A-1.

                  The Securities shall be issued only in registered form without
coupons and only in denominations of $1,000 of Principal Amount at Maturity and
any integral multiple thereof.

                  Section 2.3 Registrar, Paying Agent and Conversion Agent. The
Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency
where Securities may be presented for purchase or payment ("Paying Agent") and
an office or agency where Securities may be presented for conversion
("Conversion Agent"). The Registrar shall keep a register of the Securities and
of their transfer and exchange. The Company may have one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents. The term Paying Agent includes any additional paying agent, including
any named pursuant to Section 4.5. The term Conversion Agent includes any
additional conversion agent, including any named pursuant to Section 4.5.

                  The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent, Bid Solicitation Agent, Conversion Agent or
co-registrar (other than the Trustee). The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar, Paying Agent or Conversion Agent, the Trustee shall act as
such and shall be entitled to appropriate compensation therefor pursuant to
Section 7.7. Any agency agreement entered into with the Bid Solicitation Agent
shall provide that any resignation or removal of such agent shall not be
effective unless a successor to such agent has been appointed. The Company or
any Subsidiary or an Affiliate of either of them may act as Paying Agent,
Registrar, Conversion Agent or co-registrar.

                  The Company initially appoints the Trustee as Registrar,
Conversion Agent and Paying Agent in connection with the Securities. The Company
initially appoints The Bank of New York as Bid Solicitation Agent.

                  Section 2.4 Paying Agent to Hold Money and Securities in
Trust. Except as otherwise provided herein, on or prior to each due date of
payments in respect of any Security, the Company shall deposit with the Paying
Agent a sum of money (in immediately available funds if deposited on the due
date) or shares of Common Stock (if so permitted herein) sufficient to make such
payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money and Common
Stock held by the Paying Agent for the making of payments in respect of the
Securities and shall notify the Trustee of any default by the Company in making
any such payment. At any time during the continuance of any such default, the
Paying Agent shall, upon the written request of the Trustee, forthwith pay to
the Trustee all money and Common Stock so held in trust. If the Company, a
Subsidiary or an Affiliate of either of them acts as Paying Agent, it shall
segregate the money and Common Stock held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may


                                       9
<PAGE>

require a Paying Agent to pay all money and Common Stock held by it to the
Trustee and to account for any funds and Common Stock disbursed by it. Upon
doing so, the Paying Agent shall have no further liability for the money or
Common Stock.

                  Section 2.5 Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall cause to be furnished to the Trustee at least
semiannually on May 1 and November 1 a listing of Securityholders dated within
15 days of the date on which the list is furnished and at such other times as
the Trustee may request in writing a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.

                  Section 2.6 Transfer and Exchange. (a) Subject to Section
2.12, (a) upon surrender for registration of transfer of any Security, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by the Securityholder or such Securityholder's attorney duly authorized
in writing, at the office or agency of the Company designated as Registrar or
co-registrar pursuant to Section 2.3, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denomination or
denominations, of a like aggregate Principal Amount at Maturity (or Restated
Principal Amount, in the event the Company has exercised its option to pay cash
interest after a Tax Event). The Company shall not charge a service charge for
any registration of transfer or exchange, but the Company may require payment of
a sum sufficient to pay all taxes, assessments or other governmental charges
that may be imposed in connection with the transfer or exchange of the
Securities from the Securityholder requesting such transfer or exchange.

                  At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denomination or denominations, of a like
aggregate Principal Amount at Maturity (or Restated Principal Amount, in the
event the Company has exercised its option to pay cash interest after a Tax
Event), upon surrender of the Securities to be exchanged, together with a
written instrument of transfer satisfactory to the Registrar duly executed by
the Securityholder or such Securityholder's attorney duly authorized in writing,
at such office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.

                  The Company shall not be required to make, and the Registrar
need not register, transfers or exchanges of Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion thereof
not to be redeemed) or any Securities in respect of which a Purchase Notice or
Change in Control Purchase Notice has been given and not withdrawn by the Holder
thereof in accordance with the terms of this Indenture (except, in the case of
Securities to be purchased in part, the portion thereof not to be purchased) or
any Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed.

                  (b) Notwithstanding any provision to the contrary herein, so
long as a Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.12 and this Section 2.6(b). Transfers of a
Global Security shall be limited to transfers of such Global Security in whole
or in part to the Depositary, to nominees of the Depositary or to a successor of
the Depositary or such successor's nominee.


                                       10
<PAGE>

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

                  (d) Any Registrar appointed pursuant to Section 2.3 shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.

                  (e) If Securities are issued upon the transfer, exchange or
replacement of Securities subject to restrictions on transfer and bearing the
legends set forth on the form of Security attached hereto as Exhibits A-1 and A-
2 setting forth such restrictions (collectively, the "Legend"), or if a request
is made to remove the Legend on a Security, the Securities so issued shall bear
the Legend, or the Legend shall not be removed, as the case may be, unless there
is delivered to the Company and the Registrar such satisfactory evidence, which
shall include an Opinion of Counsel, as may be reasonably required by the
Company that neither the Legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions
of Rule 144A or Rule 144 under the Securities Act or that such Securities are
not "restricted" within the meaning of Rule 144 under the Securities Act. Upon
(i) provision of such satisfactory evidence, or (ii) notification to the Trustee
and Registrar of the sale of such Security pursuant to a registration statement
that is effective at the time of such sale, the Trustee, at the written
direction of the Company, shall authenticate and deliver a Security that does
not bear the Legend. If the Legend is removed from the face of a Security and
the Security is subsequently held by the Company or an Affiliate of the Company,
the Legend shall be reinstated. The Company shall inform the Trustee of the
effectiveness of any registration statement registering the Securities under the
Securities Act. The Trustee shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the aforementioned Opinion of
Counsel or registration statement.

                  Section 2.7 Replacement Securities. If (a) any mutilated
Security is surrendered to the Trustee, or (b) the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
written request the Trustee shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and Principal Amount at Maturity, bearing
a certificate number not contemporaneously outstanding.

                  In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, or is about to be purchased by
the Company pursuant to Article 3 hereof, the Company in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.

                  Upon the issuance of any new Securities under this Section
2.7, the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

                  Every new Security issued pursuant to this Section 2.7 in lieu
of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of


                                       11
<PAGE>

the Company, whether or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone, and shall be entitled to all benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.

                  The provisions of this Section 2.7 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.

                  Section 2.8 Outstanding Securities; Determinations of Holders'
Action. Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those cancelled by it, those paid pursuant to Section
2.7, delivered to it for cancellation and those described in this Section 2.8 as
not outstanding. A Security does not cease to be outstanding because the Company
or an Affiliate thereof holds the Security; provided, however, that in
determining whether the Holders of the requisite Principal Amount at Maturity of
Securities have given or concurred in any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or such
other obligor shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any such
determination (including, without limitation, determinations pursuant to
Articles 6 and 9).

                  If a Security is replaced pursuant to Section 2.7, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

                  If the Paying Agent holds, in accordance with this Indenture,
on a Redemption Date, or on the Business Day following a Purchase Date or a
Change in Control Purchase Date, or on Stated Maturity, money or securities, if
permitted hereunder, sufficient to pay Securities payable on that date, then
immediately after such Redemption Date, Purchase Date, Change in Control
Purchase Date or Stated Maturity, as the case may be, such Securities shall
cease to be outstanding and interest, if any, on such Securities shall cease to
accrue; provided, that if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made.

                  If a Security is converted in accordance with Article 10, then
from and after the time of conversion on the Conversion Date, such Security
shall cease to be outstanding and interest, if any, shall cease to accrue on
such Security.

                  Section 2.9 Temporary Securities. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.

                  If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the


                                       12
<PAGE>

temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at the office or agency of the Company
designated for such purpose pursuant to Section 2.3, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like Principal Amount at Maturity of definitive Securities
of authorized denominations. Until so exchanged the temporary Securities shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities.

                  Section 2.10 Cancellation. All Securities surrendered for
payment, purchase by the Company pursuant to Article 3, conversion, redemption
or registration of transfer or exchange shall, if surrendered to any person
other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. The Company may not
issue new Securities to replace Securities it has paid or delivered to the
Trustee for cancellation or that any Holder has converted pursuant to Article
10. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities held by the Trustee shall be
disposed of by the Trustee in accordance with the Trustee's customary procedure.

                  Section 2.11 Persons Deemed Owners. Prior to due presentment
of a Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of the Security or the payment of any Redemption
Price, Purchase Price or Change in Control Purchase Price in respect thereof,
and interest thereon (subject to the record date provisions herein), for the
purpose of conversion and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.

                  Section 2.12 Global Securities. (a) Notwithstanding any other
provisions of this Indenture or the Securities, (A) transfers of a Global
Security, in whole or in part, shall be made only in accordance with Section 2.6
and Section 2.12(a)(i), (B) transfers of a beneficial interest in a Global
Security for a Certificated Security shall comply with Section 2.6 and Section
2.12(a)(ii) below, and (C) transfers of a Certificated Security shall comply
with Section 2.6 and Sections 2.12(a)(iii) and (iv) below.

                           (i) Transfer of Global Security. A Global Security
         may not be transferred, in whole or in part, to any person other than
         the Depositary or a nominee or any successor thereof, and no such
         transfer to any such other person may be registered; provided that this
         clause (i) shall not prohibit any transfer of a Security that is issued
         in exchange for a Global Security but is not itself a Global Security.
         No transfer of a Security to any person shall be effective under this
         Indenture or the Securities unless and until such Security has been
         registered in the name of such person. Nothing in this Section
         2.12(a)(i) shall prohibit or render ineffective any transfer of a
         beneficial interest in a Global Security effected in accordance with
         the other provisions of this Section 2.12(a).


                                       13
<PAGE>

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

                           (A) so long as the Securities are Restricted
                           Securities, certification in the form set forth in
                           Exhibit B-1;

                           (B) written instructions to the Trustee to make, or
                           direct the Registrar to make, an adjustment on its
                           books and records with respect to such Global
                           Security to reflect a decrease in the aggregate
                           Principal Amount at Maturity of the Securities
                           represented by the Global Security, such instructions
                           to contain information regarding the Depositary
                           account to be credited with such decrease; and

                           (C) if the Company so requests, an opinion of counsel
                           or other evidence reasonably satisfactory to it as to
                           the compliance with the restrictions set forth in the
                           Legend, then the Trustee shall cause, or direct the
                           Registrar to cause, in accordance with the standing
                           instructions and procedures existing between the
                           Depositary and the Registrar, the aggregate Principal
                           Amount at Maturity of Securities represented by the
                           Global Security to be decreased by the aggregate
                           Principal Amount at Maturity of the Certificated
                           Security to be issued, shall issue such Certificated
                           Security and shall debit or cause to be debited to
                           the account of the person specified in such
                           instructions a beneficial interest in the Global
                           Security equal to the Principal Amount at Maturity of
                           the Certificated Security so issued.

                           (iii) Transfer and Exchange of Certificated
         Securities. When Certificated Securities are presented to the Registrar
         with a request:

                  (y) to register the transfer of such Certificated Securities;
or

                  (z) to exchange such Certificated Securities for an equal
Principal Amount at Maturity of Certificated Securities of other authorized
denominations,

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

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

                  (2)      so long as such Securities are Restricted Securities,
                           such Securities are being transferred or exchanged
                           pursuant to an effective registration statement under
                           the Securities Act or pursuant to clause (A), (B) or
                           (C)


                                       14
<PAGE>

                           below, and are accompanied by the following
                           additional information and documents, as applicable:

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

                           (B) if such Certificated Securities are being
                           transferred to the Company, a certification to that
                           effect; or

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

                  (iv) Restrictions on Transfer of a Certificated Security for a
Beneficial Interest in a Global Security. A Certificated Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below.

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

         (I) so long as the Securities are Restricted Securities, certification,
         in the form set forth in Exhibit B-1, that such Certificated Security
         is being transferred to a QIB in accordance with Rule 144A; and

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


                                       15
<PAGE>

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

                  (c) The restrictions imposed by the Legend upon the
transferability of any Security shall terminate at such times described in and
in accordance with the provisions of Section 2.6(d).

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

                  (e) The provisions of clauses (1), (2), (3) and (4) below
shall apply only to Global Securities:

                  (1)      Notwithstanding any other provisions of this
                           Indenture or the Securities, except as provided in
                           Section 2.12(a)(ii), a Global Security shall not be
                           exchanged in whole or in part for a Security
                           registered in the name of any person other than the
                           Depositary or one or more nominees thereof, provided
                           that a Global Security may be exchanged for
                           Securities registered in the names of any person
                           designated by the Depositary in the event that (i)
                           the Depositary has notified the Company that it is
                           unwilling or unable to continue as Depositary for
                           such Global Security or such Depositary has ceased to
                           be a "clearing agency" registered under the Exchange
                           Act, and a successor Depositary is not appointed by
                           the Company within 90 days or (ii) an Event of
                           Default has occurred and is continuing with respect
                           to the Securities. Any Global Security exchanged
                           pursuant to clause (i) above shall be so exchanged in
                           whole and not in part, and any Global Security
                           exchanged pursuant to clause (ii) above may be
                           exchanged in whole or from time to time in part as
                           directed by the Depositary. Any Security issued in
                           exchange for a Global Security or any portion thereof
                           shall be a Global Security; provided that any such
                           Security so issued that is registered in the name of
                           a person other than the Depositary or a nominee
                           thereof shall not be a Global Security. The Company
                           may, in its sole discretion, determine not to have
                           Securities represented by Global Securities, in which
                           case the Company shall issue Securities in exchange
                           for each Global Security.

                  (2)      Securities issued in exchange for a Global Security
                           or any portion thereof shall be issued in definitive,
                           fully registered form, without interest coupons,
                           shall have an aggregate Principal Amount at Maturity
                           equal to that of such Global Security or portion
                           thereof to be so exchanged, shall be registered in
                           such names and be in such authorized denominations as
                           the Depositary shall designate and shall bear the
                           applicable legends provided for herein. Any Global
                           Security to be exchanged in whole shall be
                           surrendered by the


                                       16
<PAGE>

                           Depositary to the Trustee, as Registrar. With regard
                           to any Global Security to be exchanged in part,
                           either such Global Security shall be so surrendered
                           for exchange or, if the Trustee is acting as
                           custodian for the Depositary or its nominee with
                           respect to such Global Security, the Principal Amount
                           at Maturity thereof shall be reduced by an amount
                           equal to the portion thereof to be so exchanged, by
                           means of an appropriate adjustment made on the
                           records of the Trustee. Upon any such surrender or
                           adjustment, the Trustee shall authenticate and
                           deliver the Security issuable on such exchange to or
                           upon the order of the Depositary or an authorized
                           representative thereof.

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

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

                  (5)      Neither any members of, or participants in, the
                           Depositary (collectively, the "Agent Members") nor
                           any other persons on whose behalf Agent Members may
                           act shall have any rights under this Indenture with
                           respect to any Global Security registered in the name
                           of the Depositary or any nominee thereof, or under
                           any such Global Security, and the Depositary or such
                           nominee, as the case may be, may be treated by the
                           Company, the Trustee and any agent of the Company or
                           the Trustee as the absolute owner and holder of such
                           Global Security for all purposes whatsoever.
                           Notwithstanding the foregoing, nothing herein shall
                           prevent the Company, the Trustee or any agent of the
                           Company or the Trustee from giving effect to any
                           written certification, proxy or other authorization
                           furnished by the Depositary or such nominee, as the
                           case may be, or impair, as between the Depositary,
                           its Agent Members and any other person on whose
                           behalf an Agent Member may act, the operation of
                           customary practices of such persons governing the
                           exercise of the rights of a holder of any Security.

                  Section 2.13 CUSIP Numbers. The Company may issue the
Securities with one or more "CUSIP" numbers (if then generally in use), and, if
so, the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP numbers. The initial CUSIP number for the Securities is
131347 AX4.

                  Section 2.14 Ranking. The Indebtedness of the Company arising
under or in connection with this Indenture and every outstanding Security issued
under this Indenture from


                                       17
<PAGE>

time to time constitutes and will constitute a senior unsecured general
obligation of the Company, ranking equally with other senior unsecured
Indebtedness of the Company.

                                  ARTICLE III

                            REDEMPTION AND PURCHASES

                  Section 3.1 Company's Right to Redeem; Notices to Trustee. The
Company, at its option, may redeem the Securities in accordance with the
provisions of Paragraph 5 of the Securities. If the Company elects to redeem
Securities pursuant to Paragraph 5 of the Securities, it shall notify the
Trustee in writing of the Redemption Date, the Principal Amount at Maturity of
Securities to be redeemed and the Redemption Price.

                  The Company shall give the notice to the Trustee provided for
in this Section 3.1 by a Company Order, at least 40 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee).

                  Section 3.2 Selection of Securities to Be Redeemed. If less
than all the Securities are to be redeemed, unless the procedures of the
Depositary provide otherwise, the Trustee shall select the Securities to be
redeemed by lot or on a pro rata basis (so long as either such method is not
prohibited by the rules of any stock exchange on which the Securities are then
listed). The Trustee shall make the selection at least 30 days but not more than
60 days before the Redemption Date from outstanding Securities not previously
called for redemption. The Trustee may select for redemption portions of the
Principal Amount at Maturity of Securities that have denominations larger than
$1,000.

                  Securities and portions of them the Trustee selects shall be
in Principal Amounts at Maturity of $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.

                  If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed may be
treated by the Trustee as outstanding for the purpose of such selection.

                  Section 3.3 Notice of Redemption. At least 30 days but
not more than 60 days before a Redemption Date, the Company shall mail a notice
of redemption by first-class mail, postage prepaid, to each Holder of Securities
to be redeemed.

                  The notice shall identify the Securities to be redeemed and
shall state:

                  (1)      the Redemption Date;

                  (2)      the Redemption Price and the amount of accrued and
                           unpaid interest, if any, payable on the Redemption
                           Date;

                  (3)      the Conversion Rate;


                                       18
<PAGE>

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

                  (5)      that Securities called for redemption may be
                           converted at any time before the close of business on
                           the date that is the Business Day prior to the
                           Redemption Date;

                  (6)      that Holders who want to convert Securities must
                           satisfy the requirements set forth in Paragraph 8 of
                           the Securities;

                  (7)      that Securities called for redemption must be
                           surrendered to the Paying Agent to collect the
                           Redemption Price;

                  (8)      if fewer than all the outstanding Securities are to
                           be redeemed, the certificate numbers, if any, and
                           Principal Amounts at Maturity of the particular
                           Securities to be redeemed;

                  (9)      that, unless the Company defaults in making payment
                           of such Redemption Price, interest, if any, on
                           Securities called for redemption will cease to accrue
                           on and after the Redemption Date; and

                  (10)     the CUSIP number(s) of the Securities.

                  At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense, provided that the
Company makes such request at least five Business Days prior to the date by
which such notice of redemption must be given to Holders in accordance with this
Section 3.3.

                  Section 3.4 Effect of Notice of Redemption. Once notice of
redemption is given, Securities called for redemption become due and payable on
the Redemption Date and at the Redemption Price stated in the notice except for
Securities which are converted in accordance with the terms of this Indenture.
Upon surrender to the Paying Agent, such Securities shall be paid at the
Redemption Price stated in the notice.

                  Section 3.5 Deposit of Redemption Price. Prior to 10:00 a.m.
(New York City time), on the Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or a Subsidiary or an Affiliate of either of
them is the Paying Agent, shall segregate and hold in trust) money sufficient to
pay the Redemption Price of all Securities to be redeemed on that date other
than Securities or portions of Securities called for redemption which on or
prior thereto have been delivered by the Company to the Trustee for cancellation
or have been converted. The Paying Agent shall as promptly as practicable return
to the Company any money not required for that purpose because of conversion of
Securities pursuant to Article 10. If such money is then held by the Company or
a Subsidiary or Affiliate of the Company in trust and is not required for such
purpose it shall be discharged from such trust.

                  Section 3.6 Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder a new Security in an authorized
denomination equal in Principal Amount at Maturity to the unredeemed portion of
the Security surrendered.

                  Section 3.7 Purchase of Securities at Option of the Holder.
(a) General. Securities shall be purchased by the Company pursuant to Paragraph
6 of the Securities at the


                                       19
<PAGE>

option of the Holder as of April 30, 2002, 2004, 2006, 2008, 2011 and 2016
(each, a "Purchase Date"), at the Issue Price plus accrued and unpaid interest,
if any, to the Purchase Date (the "Purchase Price"). If, prior to a Purchase
Date, the Company has exercised its option to pay cash interest instead of
accruing interest on the Securities following a Tax Event, the Purchase Price
will be equal to the Restated Principal Amount (as defined in Exhibit A-1
hereto) plus accrued and unpaid cash interest from the date the Company
exercised such option to the Purchase Date. Purchases of Securities hereunder
shall be made, at the option of the Holder thereof, upon:

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

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

                           (B) the portion of the Principal Amount at Maturity
                           of the Security which the Holder will deliver to be
                           purchased, which portion must be in principal amounts
                           of maturity of $1,000 or an integral multiple
                           thereof,

                           (C) that such Security shall be purchased as of the
                           Purchase Date pursuant to the terms and conditions
                           specified in Paragraph 6 of the Securities and in
                           this Indenture, and

                           (D) in the event the Company elects, pursuant to
                           Section 3.7(b), to pay the Purchase Price in whole or
                           in part, in shares of Common Stock but such portion
                           of the Purchase Price shall ultimately be payable to
                           such Holder entirely in cash because any of the
                           conditions to payment of the Purchase Price in shares
                           of Common Stock is not satisfied prior to the close
                           of business on the Purchase Date, as set forth in
                           Section 3.7(c), whether such Holder elects (i) to
                           withdraw such Purchase Notice as to some or all of
                           the Securities to which such Purchase Notice relates
                           (stating the Principal Amount at Maturity and
                           certificate numbers, if any, of the Securities as to
                           which such withdrawal shall relate), or (ii) to
                           receive cash in respect of the entire Purchase Price
                           for all Securities (or portions thereof) to which
                           such Purchase Notice relates; and

                  (2)      delivery of such Security to the Paying Agent prior
                           to, on or after the Purchase Date (together with all
                           necessary endorsements) at the offices of the Paying
                           Agent, such delivery being a condition to receipt by
                           the Holder of the Purchase Price therefor; provided,
                           however, that such Purchase Price shall be so paid
                           pursuant to this Section 3.7 only if the Security so
                           delivered to the Paying Agent shall conform in all
                           respects to the description thereof in the related
                           Purchase Notice, as determined by the Company. If
                           Global Securities are outstanding, such notice must
                           also comply with Applicable Procedures.

                  If a Holder, in such Holder's Purchase Notice and in any
written notice of withdrawal delivered by such Holder pursuant to the terms of
Section 3.9, fails to indicate such Holder's choice with respect to the election
set forth in clause (D) of Section 3.7(a)(1), such


                                       20
<PAGE>

Holder shall be deemed to have elected to receive cash in respect of the
Purchase Price for all Securities subject to such Purchase Notice in the
circumstances set forth in such clause (D).

                  The Company shall purchase from the Holder thereof, pursuant
to this Section 3.7, a portion of a Security if the Principal Amount at Maturity
of such portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Security also apply to the
purchase of such portion of such Security.

                  Any purchase by the Company contemplated pursuant to the
provisions of this Section 3.7 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of the
Purchase Date and the time of delivery of the Security.

                  Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Purchase Notice contemplated by this Section
3.7(a) shall have the right to withdraw such Purchase Notice at any time prior
to the close of business on the Business Day preceding the Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 3.9.

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

                  (b) Company's Right to Elect Manner of Payment of Purchase
Price for Payment. The Securities to be purchased on any Purchase Date pursuant
to Section 3.7(a) may be paid for, at the election of the Company, in U.S. legal
tender ("cash") or shares of Common Stock, or in any combination of cash and
shares of Common Stock, subject to the conditions set forth in Sections 3.7(c);
provided that on April 30, 2016 the Company may only pay cash. The Company shall
designate, in the Company Notice delivered pursuant to Section 3.7(d), which
shall be sent to Holders (and to beneficial owners as required by applicable
law) not less than 20 Business Days prior to such Purchase Date (the "Company
Notice Date"), whether the Company will purchase the Securities for cash or
shares of Common Stock, or, if a combination thereof, the percentages of the
Purchase Price of Securities in respect of which it will pay in cash or shares
of Common Stock; provided that the Company will pay cash for fractional shares
of Common Stock. For purposes of determining the existence of potential
fractional shares, all Securities subject to purchase by the Company held by a
Holder shall be considered together (no matter how many separate certificates
are to be presented). Each Holder whose Securities are purchased pursuant to
this Section 3.7 shall receive the same percentage of cash or shares of Common
Stock in payment of the Purchase Price for such Securities, except (i) as
provided in Section 3.7(c) with regard to the payment of cash in lieu of
fractional shares of Common Stock and (ii) in the event that the Company is
unable to purchase the Securities of a Holder or Holders for shares of Common
Stock because any necessary qualifications or registrations of the shares of
Common Stock under applicable state securities laws cannot be obtained, the
Company may purchase the Securities of such Holder or Holders for cash. The
Company may not change its election with respect to the consideration (or
components or percentages of components thereof) to be paid once the Company has
given its Company Notice to Securityholders except pursuant to this Section
3.7(b) or pursuant to Section 3.7(c) in the event of a failure to satisfy, prior
to the close of business on the Purchase Date, any condition to the payment of
the Purchase Price, in whole or in part, in Common Stock.


                                       21
<PAGE>

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

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

                           (ii) the information required by Section 3.7(d);

                           (iii) if the Company elects to pay the Purchase
         Price, or a specified percentage thereof, in Common Stock, that the
         conditions to such manner of payment set forth in Section 3.7(c) have
         been or will be complied with; and

                           (iv) whether the Company desires the Trustee to give
         the Company Notice required by Section 3.7(d).

                  (c) Payment by Issuance of Shares of Common Stock. At the
option of the Company, the Purchase Price of Securities in respect of which a
Purchase Notice pursuant to Section 3.7(a) has been given, or a specified
percentage thereof, may be paid by the Company by the issuance of a number of
shares of Common Stock equal to the quotient obtained by dividing (i) the amount
of cash to which the Securityholders would have been entitled had the Company
elected to pay all or such specified percentage, as the case may be, of the
Purchase Price of such Securities in cash by (ii) the Market Price of shares of
Common Stock, subject to the next succeeding paragraph; provided that the
Purchase Price of Securities purchased on April 30, 2016 shall be paid only in
cash.

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

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

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

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

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

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


                                       22
<PAGE>

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

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

                  Such Officers' Certificate shall also set forth (i) the number
of shares of Common Stock to be issued for each $1,000 Principal Amount at
Maturity of Securities, (ii) the Sale Price of a share of Common Stock on each
trading day during the period commencing on the first trading day of the period
during which the Market Price is calculated and ending on the third Business Day
prior to the applicable Purchase Date and (iii) the Market Price of the Common
Stock. The Company may pay the Purchase Price (or any portion thereof) in shares
of Common Stock only if the information necessary to calculate the Market Price
is published in a daily newspaper of national circulation or is otherwise
publicly available (e.g., by dissemination on the World Wide Web or by other
public means). If the foregoing conditions are not satisfied with respect to a
Holder or Holders prior to the close of business on the Purchase Date and the
Company has elected to purchase the Securities pursuant to this Section 3.7
through the issuance of shares of Common Stock, the Company shall pay the entire
Purchase Price of the Securities of such Holder or Holders in cash.

                  The "Market Price" means the average of the Sale Prices of the
shares of Common Stock for the five NYSE trading day period ending on the third
Business Day prior to the applicable Purchase Date or Change in Control Purchase
Date, as the case may be (if the third Business Day prior to the applicable
Purchase Date or Change in Control Purchase Date, as the case may be, is a NYSE
trading day, or if not, then on the last NYSE trading day prior to such third
Business Day), appropriately adjusted to take into account the occurrence,
during the period commencing on the first of the NYSE trading days during such
five NYSE trading day period and ending on such Purchase Date or Change in
Control Purchase Date, as the case may be, of any event described in Section
10.6; subject, however, to the conditions set forth in Sections 10.7 and 10.8.

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


                                       23
<PAGE>

                  Upon determination of the actual number of shares of Common
Stock to be issued for each $1,000 Principal Amount at Maturity of Securities,
the Company will publish such determination on the Company's Web site on the
World Wide Web and through a press release on Dow Jones & Company, Inc. or
Bloomberg Business News not later than the third Business Day prior to the
relevant Purchase Date.

                  (d) Notice of Election. In connection with any purchase of
Securities pursuant to the first paragraph of Paragraph 6 of the Securities, the
Company shall give notice to Holders setting forth information specified in this
Section 3.7(d) (the "Company Notice").

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

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

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

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

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

                           (i) the Purchase Price and the Conversion Rate;

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

                           (iii) that Securities as to which a Purchase Notice
         has been given may be converted if they are otherwise convertible only
         in accordance with Article 10 hereof and Paragraph 8 of the Securities
         if the applicable Purchase Notice has been withdrawn in accordance with
         the terms of this Indenture;

                           (iv) that Securities must be surrendered to the
         Paying Agent to collect payment;

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

                           (vi) the procedures the Holder must follow to
         exercise its put rights under Section 3.7 and a brief description of
         those rights;

                           (vii) briefly, the conversion rights of the
         Securities;


                                       24
<PAGE>

                           (viii) the procedures for withdrawing a Purchase
         Notice (including, without limitation, for a conditional withdrawal
         pursuant to the terms of Section 3.7(a)(1)(D) or Section 3.9);

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

                           (x) the CUSIP number of the Securities.

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

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

                  (f) Procedure upon Purchase. The Company shall deposit cash
(in respect of cash purchases under Section 3.7 or for fractional shares, as
applicable) or shares of Common Stock in respect of payment by issuance of
shares of Common Stock under Section 3.8(c), except for fractional shares, or a
combination thereof, as applicable, at the time and in the manner as provided in
Section 3.10, sufficient to pay the aggregate Purchase Price of all Securities
to be purchased pursuant to this Section 3.7. As soon as practicable after the
Purchase Date, the Company shall deliver to each Holder entitled to receive
shares of Common Stock through the Paying Agent a certificate for the number of
full shares of Common Stock issuable in payment of the Purchase Price and cash
in lieu of any fractional shares. The person in whose name the certificate for
shares of Common Stock is registered shall be treated as a holder of record of
Common Stock on the Business Day following the Purchase Date. No payment or
adjustment will be made for dividends on the shares of Common Stock the record
date for which occurred on or prior to the Purchase Date.

                  (g) Taxes. If a Holder of a purchased Security (pursuant to
this Section 3.7 or Section 3.8) is paid in shares of Common Stock, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on such
issue of Common Stock. However, the Holder shall pay any such tax which is due
because the Holder requests the Common Stock to be issued in a name other than
the Holder's name. The Paying Agent may refuse to deliver the certificates
representing the shares of Common Stock being issued in a name other than the
Holder's name until the Paying Agent receives a sum sufficient to pay any tax
which will be due because the shares of Common Stock are to be issued in a name
other than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.

                  Section 3.8 Purchase of Securities at Option of the Holder
upon Change in Control. (a) If a Change in Control occurs, Securities shall be
purchased by the Company, at the option of the Holder thereof, at a purchase
price specified in Paragraph 6 of the Securities (the "Change in Control
Purchase Price"), as of the date that is 45 days after the date of the Change in
Control Notice delivered by the Company (the "Change in Control Purchase Date"),
subject to satisfaction by or on behalf of the Holder of the requirements set
forth in Section 3.8(c).


                                       25
<PAGE>

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

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

                           (ii) the Company merges or consolidates with or into
         any other person, any merger of another person into the Company, or the
         Company conveys, sells, transfers or leases all or substantially all of
         its assets to another person, other than any transaction: (A) that does
         not result in any reclassification, conversion, exchange or
         cancellation of outstanding shares of the Company's Capital Stock, or
         (B) pursuant to which the holders of Common Stock immediately prior to
         the transaction have the entitlement to exercise, directly or
         indirectly, 50% or more of the total voting power of all shares of
         Capital Stock entitled to vote generally in the election of directors
         of the continuing or surviving corporation immediately after the
         transaction, or (C) which is effected solely to change the Company's
         jurisdiction of incorporation and results in a reclassification,
         conversion or exchange of outstanding shares of the Company's Common
         Stock solely into shares of Common Stock of the surviving entity.

Notwithstanding the foregoing provisions of this Section 3.8, a Change in
Control shall not be deemed to have occurred if (A) the closing price per share
of Common Stock on the NYSE for any five NYSE trading days within the period of
10 consecutive NYSE trading days ending immediately after the later of the
Change in Control or the public announcement of the Change in Control, in the
case of a Change in Control relating to an acquisition of Capital Stock, or the
period of 10 consecutive NYSE trading days ending immediately before the Change
in Control, in the case of Change in Control relating to a merger, consolidation
or asset sale, equals or exceeds 105% of the conversion price of the Securities
in effect on each of those NYSE trading days or (B) all of the consideration
(excluding cash payments for fractional shares and cash payments made pursuant
to dissenters' appraisal rights) in a merger or consolidation otherwise
constituting a Change in Control under clause (i) and/or clause (ii) above
consists of shares of common stock traded on a national securities exchange or
quoted on the Nasdaq National Market (or will be so traded or quoted immediately
following the merger or consolidation) and as a result of the merger or
consolidation the Securities become convertible into such common stock. For
purposes of this Section 3.8, (x) the conversion price is equal to $1,000
divided by the Conversion Rate, (y) whether a person is a "beneficial owner"
shall be determined in accordance with Rule 13d-3 under the Exchange Act and (z)
"person" includes any syndicate or group that would be deemed to be a "person"
under Section 13(d)(3) of the Exchange Act.

                  At the option of the Company, the Change in Control Purchase
Price of Securities in respect of which a Change in Control Purchase Notice
pursuant to Section 3.8(b) has been given may be paid by the Company by the
issuance of a number of shares of Common Stock equal to the quotient obtained by
dividing (i) the product of (A) the amount of cash to which the Securityholders
would have been entitled had the Company elected to pay all of the Change in
Control Purchase Price of such Securities in cash and (B) 0.95, by (ii) the
Market Price of shares of Common Stock, subject to the next succeeding
paragraph.


                                       26
<PAGE>

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

                  In the event that the Company is unable to purchase the
Securities of a Holder or Holders for shares of Common Stock because any
necessary qualifications or registrations of the shares of Common Stock under
applicable state securities laws cannot be obtained, the Company may purchase
the Securities of such Holder or Holders for cash. The Company may not change
its election with respect to the consideration to be paid once the Company has
given its Change in Control Notice to Securityholders except pursuant to this
Section 3.8(a) or pursuant to Section 3.8(b) in the event of a failure to
satisfy, prior to the close of business on the Change in Control Purchase Date,
any condition to the payment of the Change in Control Purchase Price in Common
Stock.

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

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

                  (ii) the information required by Section 3.8(b);

                  (iii) if the Company elects to pay the Change in Control
Purchase Price in Common Stock, that the conditions to such manner of payment
set forth in Section 3.8(a) have been or will be complied with; and

                  (iv) whether the Company desires the Trustee to give the
Change in Control Notice required by Section 3.8(b).

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

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

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

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

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

                  (v) the receipt by the Trustee of an Officers' Certificate and
an Opinion of Counsel each stating that (A) the terms of the issuance of the
shares of Common Stock are in conformity with this Indenture and (B) the shares
of Common Stock to be issued by the Company in payment of the Change in Control
Purchase Price in respect of Securities have been


                                       27
<PAGE>

duly authorized and, when issued and delivered pursuant to the terms of this
Indenture in payment of the Change in Control Purchase Price in respect of the
Securities, will be validly issued, fully paid and non-assessable and, to the
best of such counsel's knowledge, free from preemptive rights, and, in the case
of such Officers' Certificate, stating that the conditions above and the
condition set forth in the second succeeding sentence have been satisfied and,
in the case of such Opinion of Counsel, stating that the conditions above have
been satisfied.

                  Such Officers' Certificate shall also set forth (i) the number
of shares of Common Stock to be issued for each $1,000 Principal Amount at
Maturity of Securities, (ii) the Sale Price of a share of Common Stock on each
trading day during the period commencing on the first trading day of the period
during which the Market Price is calculated and ending on the third Business Day
prior to the Change in Control Purchase Date and (iii) the Market Price of the
Common Stock. The Company may pay the Change in Control Purchase Price in shares
of Common Stock only if the information necessary to calculate the Market Price
is published in a daily newspaper of national circulation or is otherwise
publicly available (e.g., by dissemination on the World Wide Web or by other
public means). If the foregoing conditions are not satisfied with respect to a
Holder or Holders prior to the close of business on the Change in Control
Purchase Date and the Company has elected to purchase the Securities pursuant to
this Section 3.8 through the issuance of shares of Common Stock, the Company
shall pay the entire Purchase Price of the Securities of such Holder or Holders
in cash.

                  Upon determination of the actual number of shares of Common
Stock to be issued for each $1,000 Principal Amount at Maturity of Securities
(not later than the third Business Day prior to the Change in Control Purchase
Date), the Company will publish such determination on the Company's Web site on
the World Wide Web and through Dow Jones & Company, Inc. or Bloomberg Business
News

                  (b) No later than 30 days after the occurrence of a Change in
Control, the Company shall mail a written notice of the Change in Control (the
"Change in Control Notice", the date of such mailing, the "Change in Control
Notice Date") by first-class mail to the Trustee and to each Holder (and to
beneficial owners to the extent required by applicable law). The notice shall
include a form of Change in Control Purchase Notice to be completed by the
Holder that wishes to exercise rights under this Section 3.9 and shall state:

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

                  (2)      the date by which the Change in Control Purchase
                           Notice pursuant to this Section 3.8 must be given;

                  (3)      the Change in Control Purchase Date;

                  (4)      the Change in Control Purchase Price;

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

                  (6)      the Conversion Rate and any adjustments thereto;

                  (7)      that Securities as to which a Change in Control
                           Purchase Notice has been given may be converted if
                           they are otherwise convertible pursuant to Article


                                       28
<PAGE>

                           10 hereof only if the Change in Control Purchase
                           Notice has been withdrawn in accordance with the
                           terms of this Indenture;

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

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

                  (10)     briefly, the procedures the Holder must follow to
                           exercise rights under this Section 3.8;

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

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

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

                  (14)     the CUSIP numbers of the Securities.

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

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

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

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

(c) A Holder may exercise its rights specified in Section 3.8(a) upon delivery
of a written notice of purchase (a "Change in Control Purchase Notice") to the
Paying Agent at any time on or prior to the 30th day after the Company delivers
its Change in Control Purchase Notice, stating:

                  (1)      the certificate number of the Security which the
                           Holder will deliver to be purchased;

                  (2)      the portion of the Principal Amount at Maturity of
                           the Security which the Holder will deliver to be
                           purchased, which portion must be $1,000 or an
                           integral multiple thereof;


                                       29
<PAGE>

                  (3)      that such Security shall be purchased pursuant to the
                           terms and conditions specified in Paragraph 6 of the
                           Securities; and

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

                  If a Holder, in such Holder's Change in Control Purchase
Notice and in any written notice of withdrawal delivered by such Holder pursuant
to the terms of Section 3.9, fails to indicate such Holder's choice with respect
to the election set forth in clause (4) above, such Holder shall be deemed to
have elected to receive cash in respect of the Change in Control Purchase Price
for all Securities subject to such Change in Control Purchase Notice in the
circumstances set forth in such clause (4).

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

                  The Company shall purchase from the Holder thereof, pursuant
to this Section 3.8, a portion of a Security if the Principal Amount at Maturity
of such portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Security also apply to the
purchase of such portion of such Security.

                  Any purchase by the Company contemplated pursuant to the
provisions of this Section 3.8 shall be consummated by the delivery of the
consideration to be received by the Holder on the Change in Control Purchase
Date.

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

                  (e) Procedure upon Purchase. The Company shall deposit cash
(in respect of a cash purchases under Section 3.8 or for fractional shares of
Common Stock, as applicable) or shares of Common Stock, or a combination
thereof, as applicable, at the time and in the manner as provided in Section
3.10, sufficient to pay the aggregate Change in Control Purchase Price of all
Securities to be purchased pursuant to this Section 3.8. As soon as practicable
after the Purchase Date, the Company shall deliver to each Holder entitled to
receive shares of Common


                                       30
<PAGE>

Stock through the Paying Agent, a certificate for the number of full shares of
Common Stock issuable in payment of the Change in Control Purchase Price and
cash in lieu of any fractional shares. The person in whose name the certificate
for shares of Common Stock is registered shall be treated as a holder of record
of Common Stock on the Business Day following the Change in Control Purchase
Date. No payment or adjustment will be made for dividends on the shares of
Common Stock the record date for which occurred on or prior to the Change in
Control Purchase Date.

                  Section 3.9 Effect of Purchase Notice or Change in Control
Purchase Notice. Upon receipt by the Paying Agent of the Purchase Notice or
Change in Control Purchase Notice specified in Section 3.7(a) or Section 3.8(c),
as applicable, the Holder of the Security in respect of which such Purchase
Notice or Change in Control Purchase Notice, as the case may be, was given shall
(unless such Purchase Notice or Change in Control Purchase Notice, as the case
may be) is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Purchase Price or Change in Control Purchase
Price, as the case may be, with respect to such Security. Such Purchase Price or
Change in Control Purchase Price shall be paid to such Holder, subject to
receipts of funds and/or securities by the Paying Agent, promptly following the
later of (x) the Purchase Date or the Change in Control Purchase Date, as the
case may be, with respect to such Security (provided the conditions in Section
3.7(a) or Section 3.8(c), as applicable, have been satisfied) and (y) the time
of delivery of such Security to the Paying Agent by the Holder thereof in the
manner required by Section 3.7(a) or Section 3.8(c), as applicable. Securities
in respect of which a Purchase Notice or Change in Control Purchase Notice has
been given by the Holder thereof may not be converted pursuant to Article 10
hereof on or after the date of the delivery of such Purchase Notice or Change in
Control Purchase Notice. unless such Purchase Notice or Change in Control
Purchase Notice has first been validly withdrawn as specified in the following
two paragraphs.

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

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

                  (2)      the Principal Amount at Maturity of the Security with
                           respect to which such notice of withdrawal is being
                           submitted, and

                  (3)      the Principal Amount at Maturity, if any, of such
                           Security which remains subject to the original
                           Purchase Notice or Change in Control Purchase Notice,
                           as the case may be, and which has been or will be
                           delivered for purchase by the Company.

                  A written notice of withdrawal of a Purchase Notice or Change
in Control Purchase Notice, as the case may be, may be in the form set forth in
the preceding paragraph or may be in the form of (i) a conditional withdrawal
contained in a Purchase Notice pursuant to the terms of Section 3.7(a)(1)(D) or
a Change in Control Purchase Notice pursuant to the terms of Section 3.8(c)(4),
as the case may be, or (ii) a conditional withdrawal containing the information
set forth in Section 3.7(a)(1)(D) or 3.8(c)(4), as the case may be, and the
preceding paragraph


                                       31
<PAGE>

and contained in a written notice of withdrawal delivered to the Paying Agent as
set forth in the preceding paragraph.

                  There shall be no purchase of any Securities pursuant to
Section 3.7 or 3.8 if there has occurred (prior to, on or after, as the case may
be, the giving, by the Holders of such Securities, of the required Purchase
Notice or Change in Control Purchase Notice, as the case may be) and is
continuing an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, with
respect to such Securities). The Paying Agent will promptly return to the
respective Holders thereof any Securities (x) with respect to which a Purchase
Notice or Change in Control Purchase Notice, as the case may be, has been
withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, with
respect to such Securities) in which case, upon such return, the Purchase Notice
or Change in Control Purchase Notice with respect thereto shall be deemed to
have been withdrawn.

                  Section 3.10 Deposit of Purchase Price or Change in Control
Purchase Price. Prior to 10:00 a.m. (local time in the City of New York) on the
Purchase Date or the Change in Control Purchase Date, as the case may be, the
Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company or a Subsidiary or an Affiliate of either of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 2.4) an
amount of cash (in immediately available funds if deposited on such Business
Day) or Common Stock, if permitted hereunder, sufficient to pay the aggregate
Purchase Price or Change in Control Purchase Price, as the case may be, of all
the Securities or portions thereof which are to be purchased as of the Purchase
Date or Change in Control Purchase Date, as the case may be.

                  Section 3.11 Securities Purchased in Part. Any Certificated
Security which is to be purchased only in part shall be surrendered at the
office of the Paying Agent (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing) and the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate Principal Amount at Maturity equal to, and
in exchange for, the portion of the Principal Amount at Maturity of the Security
so surrendered which is not purchased.

                  Section 3.12 Covenant to Comply With Securities Laws Upon
Purchase of Securities. When complying with the provisions of Section 3.7 or 3.8
hereof (provided that such offer or purchase constitutes an "issuer tender
offer" for purposes of Rule 13e-4 (which term, as used herein, includes any
successor provision thereto) under the Exchange Act at the time of such offer or
purchase), the Company shall (i) comply with Rule 13e- 4 and Rule 14e-1 (or any
successor provision) under the Exchange Act, (ii) file the related Schedule TO
(or any successor schedule, form or report) under the Exchange Act, and (iii)
otherwise comply with all Federal and state securities laws so as to permit the
rights and obligations under Sections 3.7 and 3.8 to be exercised in the time
and in the manner specified in Sections 3.7 and 3.8.

                  Section 3.13 Repayment to the Company. The Trustee and the
Paying Agent shall return to the Company any cash or shares of Common Stock that
remain unclaimed as provided in Paragraph 11 of the Securities, together with
interest or dividends, if any, thereon (subject to the provisions of Section
7.1(f)), held by them for the payment of the Purchase Price


                                       32
<PAGE>

or Change in Control Purchase Price, as the case may be; provided, however, that
to the extent that the aggregate amount of cash or shares of Common Stock
deposited by the Company pursuant to Section 3.10 exceeds the aggregate Purchase
Price or Change in Control Purchase Price, as the case may be, of the Securities
or portions thereof which the Company is obligated to purchase as of the
Purchase Date or Change in Control Purchase Date, as the case may be, then,
unless otherwise agreed in writing with the Company, promptly after the Business
Day following the Purchase Date or Change in Control Purchase Date, as the case
may be, the Trustee shall return any such excess to the Company together with
interest or dividends, if any, thereon (subject to the provisions of Section
7.1(f)).

                                   ARTICLE IV

                                    COVENANTS

                  Section 4.1 Payment of Securities. The Company shall promptly
make all payments in respect of the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture. Any amounts of cash or
shares of Common Stock to be given to the Trustee or Paying Agent, shall be
deposited with the Trustee or Paying Agent by 10:00 a.m. New York City time by
the Company. Principal Amount at Maturity, Restated Principal Amount, Issue
Price plus accrued interest, Redemption Price, Purchase Price, Change in Control
Purchase Price and cash interest, if any, shall be considered paid on the
applicable date due if on such date the Trustee or the Paying Agent holds, in
accordance with this Indenture, cash or securities, if permitted hereunder,
sufficient to pay all such amounts then due.

                  Section 4.2 SEC and Other Reports. The Company shall file with
the Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual
report and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. In the event the Company is at any time
no longer subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, it shall continue to provide the Trustee with reports containing
substantially the same information as would have been required to be filed with
the SEC had the Company continued to have been subject to such reporting
requirements. In such event, such reports shall be provided at the times the
Company would have been required to provide reports had it continued to have
been subject to such reporting requirements. The Company also shall comply with
the other provisions of TIA Section 314(a). Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely conclusively on Officers'
Certificates).

                  Section 4.3 Compliance Certificate. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on December 31, 2001) an Officers'
Certificate stating whether or not, to the best knowledge of the signers
thereof, the Company is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture (without regard to any
period of grace or requirement of notice provided hereunder) and if the Company
shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.


                                       33
<PAGE>

                  Section 4.4 Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.

                  Section 4.5 Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, the City of New York, an office or agency
of the Trustee, Registrar, Paying Agent and Conversion Agent where Securities
may be presented or surrendered for payment, where Securities may be surrendered
for registration of transfer, exchange, purchase, redemption or conversion and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The office of Wilmington Trust Company, c/o
Computershare Trust Company, 88 Pine Street, Wall Street Plaza, 19th Floor, New
York, NY 10005 (Attention: Corporate Trust Administration), shall initially be
such office or agency for all of the aforesaid purposes. The Company shall give
prompt written notice to the Trustee of the location, and of any change in the
location, of any such office or agency (other than a change in the location of
the office of the Trustee). If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 11.2.

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

                  Section 4.6 Calculation of Original Issue Discount. The
Company and the Trustee on behalf of the Holders agree (i) that for United
States federal income tax purposes the Securities will be treated as
indebtedness subject to the Treasury regulations governing contingent payment
debt instruments, (ii) that the Holders will report original issue discount and
interest on the Securities in accordance with the Company's determination of the
"comparable yield" and the "projected payment schedule" as determined by the
Company and (iii) to be bound by the Company's application of the Treasury
regulations that govern contingent payment debt instruments. For this purpose,
the "comparable yield" for the Securities is 9.44% compounded semiannually and
the "projected payment schedule" is attached hereto as Exhibit C and may be
obtained by submitting a written request for it to Rick Barraza, Senior
Vice-President, Investor Relations, Calpine Corporation, 50 West San Fernando
Street, San Jose, CA 95113. The Company shall file with the Trustee no later
than the end of each calendar year (i) a written notice specifying the amount of
original issue discount (including daily rates and accrual periods) accrued on
outstanding Securities as of the end of such year and (ii) such other specific
information relating to such original issue discount as may then be relevant
under the Internal Revenue Code of 1986, as amended from time to time (the
"Code").

                                   ARTICLE V

                              SUCCESSOR CORPORATION

                  Section 5.1 When Company May Merge or Transfer Assets. The
Company shall not consolidate with or merge with or into any other person or
convey, transfer or lease its properties and assets substantially as an entirety
to any person, unless:


                                       34
<PAGE>

                  (a) either (1) the Company shall be the continuing corporation
or (2) the person (if other than the Company) formed by such consolidation or
into which the Company is merged or the person which acquires by conveyance,
transfer or lease the properties and assets of the Company substantially as an
entirety (i) shall be organized and validly existing under the laws of the
United States or any State thereof or the District of Columbia and (ii) shall
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form reasonably satisfactory to the Trustee, all of the
obligations of the Company under the Securities and this Indenture;

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

                  (c) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture, comply with this Article 5 and that all conditions precedent herein
provided for relating to such transaction have been satisfied.

                  For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise) of the properties and assets of one or more
Subsidiaries (other than to the Company or another Subsidiary), which, if such
assets were owned by the Company, would constitute all or substantially all of
the properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.

                  The successor person formed by such consolidation or into
which the Company is merged or the successor person to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor had been named as the Company herein; and
thereafter, except in the case of a lease and obligations the Company may have
under a supplemental indenture pursuant to Section 10.12, the Company shall be
discharged from all obligations and covenants under this Indenture and the
Securities. Subject to Section 9.6, the Company, the Trustee and the successor
person shall enter into a supplemental indenture to evidence the succession and
substitution of such successor person and such discharge and release of the
Company.

                                   ARTICLE VI

                              DEFAULTS AND REMEDIES

                  Section 6.1 Events of Default. An "Event of Default" occurs
if:

         (1) the Company defaults in the payment of the Issue Price (or, if the
Company has elected to pay cash interest on the Securities following a Tax
Event, the Restated Principal Amount) plus accrued interest (including any
interest payable pursuant to an Upward Interest Adjustment, other than the
portion of such interest payable as cash interest), if any, Redemption Price,
Purchase Price or Change in Control Purchase Price on any Security when the same
becomes due and payable at its Stated Maturity, upon redemption, upon
declaration, when due for purchase by the Company or otherwise;

         (2) the Company defaults in the payment of any cash interest (after any
Upward Interest Adjustment or any election by the Company to pay cash interest
on the Securities


                                       35
<PAGE>

following a Tax Event) when due and payable, and such default continues for a
period of 30 days;

         (3) the Company materially fails to comply with any of its agreements
in the Securities or this Indenture (other than those referred to in clause (1)
or (2) above) and such failure continues for 30 days after receipt by the
Company of a Notice of Default;

         (4) there shall have occurred either (i) a default by the Company under
any instrument or instruments under which there is or may be secured or
evidenced any Indebtedness of the Company (other than the Securities) having an
outstanding principal amount of $50,000,000 (or its foreign currency equivalent)
or more, individually or in the aggregate, that has caused the holders thereof
to declare such Indebtedness to be due and payable prior to its Stated Maturity,
unless such declaration has been rescinded within 30 days or (ii) a default by
the Company in the payment when due of the principal of any bond, debenture,
note or other evidence of the Company's Indebtedness, in each case for money
borrowed, or in the payment of principal under any mortgage, indenture,
agreement or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness of the Company for money borrowed, which
default for payment of principal is individually or in an aggregate principal
amount exceeding $50,000,000 (or its foreign currency equivalent) when such
Indebtedness becomes due and payable (whether at maturity, upon redemption or
acceleration or otherwise), if such default shall continue unremedied or
unwaived for more than 30 days after the expiration of any grace period or
extension of the time for payment applicable thereto;

         (5) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Company in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Company or for any substantial part of
its property or ordering the winding up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or

         (6) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar official)
of the Company or for any substantial part of its property or make any general
assignment for the benefit of creditors.

                  A Default under clause (3) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate Principal Amount at Maturity of the Securities at the time outstanding
notify the Company and the Trustee, of the Default and the Company does not cure
such Default (and such Default is not waived) within the time specified in
clause (3) above after actual receipt of such notice. Any such notice must
specify the Default, demand that it be remedied and state that such notice is a
"Notice of Default".

                  The Company shall deliver to the Trustee, within 30 days after
it becomes aware of the occurrence thereof, written notice of any event which
with the giving of notice or the lapse of time, or both, would become an Event
of Default under clauses (4), (5) or (6) above, its status and what action the
Company is taking or proposes to take with respect thereto.

                  Section 6.2 Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.1(5) or (6)) occurs and is
continuing, the Trustee by notice to the


                                       36
<PAGE>

Company, or the Holders of at least 25% in aggregate Principal Amount at
Maturity of the Securities at the time outstanding by notice to the Company and
the Trustee, may declare the Issue Price plus accrued and unpaid interest, if
any, on all the Securities to be immediately due and payable. Upon such a
declaration, such Issue Price plus accrued and unpaid interest, if any, shall be
due and payable immediately. If an Event of Default specified in Section 6.1(5)
or (6) occurs and is continuing, the Issue Price plus accrued and unpaid
interest, if any, on all the Securities shall become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Securityholders. The Holders of a majority in aggregate Principal Amount at
Maturity of the Securities at the time outstanding, by notice to the Trustee
(and without notice to any other Securityholder) may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of the Issue Price plus accrued and unpaid interest, if any, that
have become due solely as a result of acceleration and if all amounts due to the
Trustee under Section 7.7 have been paid. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.

                  If the Company has elected to pay cash interest on the
Securities after a Tax Event as provided in Paragraph 1 of the Securities, the
amount due upon any acceleration will be the Restated Principal Amount thereof
together with accrued and unpaid cash interest, if any, thereon.

                  Section 6.3 Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of the Issue Price plus accrued and unpaid interest, if any, on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.

                  The Trustee may maintain a proceeding even if the Trustee does
not possess any of the Securities or does not produce any of the Securities in
the proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.

                  Section 6.4 Waiver of Past Defaults. The Holders of a majority
in aggregate Principal Amount at Maturity of the Securities at the time
outstanding, by notice to the Trustee (and without notice to any other
Securityholder), may waive an existing Default and its consequences except (1)
an Event of Default described in Section 6.1(1) or (2), (2) a Default in respect
of a provision that under Section 9.2 cannot be amended without the consent of
each Securityholder affected or (3) a Default which constitutes a failure to
convert any Security in accordance with the terms of Article 10. When a Default
is waived, it is deemed cured, but no such waiver shall extend to any subsequent
or other Default or impair any consequent right. This Section 6.4 shall be in
lieu of Section 316(a)1(B) of the TIA and such Section 316(a)1(B) is hereby
expressly excluded from this Indenture, as permitted by the TIA.

                  Section 6.5 Control by Majority. The Holders of a majority in
aggregate Principal Amount at Maturity of the Securities at the time outstanding
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust or power conferred on
the Trustee. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee determines in good
faith is unduly prejudicial to the rights of other Securityholders or would
involve the


                                       37
<PAGE>

Trustee in personal liability unless the Trustee is offered indemnity
satisfactory to it, provided that the Trustee may take any other action deemed
proper by it that is not inconsistent with such direction. This Section 6.5
shall be in lieu of Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is
hereby expressly excluded from this Indenture, as permitted by the TIA.

                  Section 6.6 Limitation on Suits. A Securityholder may not
pursue any remedy with respect to this Indenture or the Securities unless:

         (1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;

         (2) the Holders of at least 25% in aggregate Principal Amount at
Maturity of the Securities at the time outstanding make a written request to the
Trustee to pursue the remedy;

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

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

         (5) the Holders of a majority in aggregate Principal Amount at Maturity
of the Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.

                  A Securityholder may not use this Indenture to prejudice the
rights of any other Securityholder or to obtain a preference or priority over
any other Securityholder.

                  Section 6.7 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of the Principal Amount at Maturity, Restated Principal
Amount, Redemption Price, Purchase Price, Change in Control Purchase Price or
interest, if any, in respect of the Securities held by such Holder, on or after
the respective due dates expressed in the Securities or any Redemption Date, and
to convert the Securities in accordance with Article 10, or to bring suit for
the enforcement of any such payment on or after such respective dates or the
right to convert, shall not be impaired or affected adversely without the
consent of such Holder.

                  Section 6.8 Collection Suit by Trustee. If an Event of Default
described in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount owing with respect to the Securities and the
amounts provided for in Section 7.7.

                  Section 6.9 Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the Principal Amount at Maturity, Restated
Principal Amount, Redemption Price, Purchase Price, Change in Control Purchase
Price or interest, if any, in respect of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
any such amount) shall be entitled and empowered, by intervention in such
proceeding or otherwise,


                                       38
<PAGE>

                  (a) to file and prove a claim for the whole amount of the
Principal Amount at Maturity, Restated Principal Amount, Redemption Price,
Purchase Price, Change in Control Purchase Price, or interest, if any, and to
file such other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel or any other amounts due the Trustee under Section 7.7) and of the
Holders allowed in such judicial proceeding, and

                  (b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or similar
official in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.

                  Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.

                  Section 6.10 Priorities. If the Trustee collects any money
pursuant to this Article 6, it shall pay out the money in the following order:

                  FIRST: to the Trustee for amounts due under Section 7.7;

                  SECOND: to Securityholders for amounts due and unpaid on the
Securities for the Principal Amount at Maturity, Restated Principal Amount,
Redemption Price, Purchase Price, Change in Control Purchase Price or interest,
if any, as the case may be, ratably, without preference or priority of any kind,
according to such amounts due and payable on the Securities; and

                  THIRD: the balance, if any, to the Company.

                  The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 6.10. At least 15 days
before such record date, the Trustee shall mail to each Securityholder and the
Company a notice that states the record date, the payment date and the amount to
be paid.

                  Section 6.11 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant (other than the Trustee)
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7 or a suit by Holders of more than 10% in aggregate
Principal Amount at Maturity of the Securities at the time outstanding. This
Section 6.11 shall be in lieu of Section 315(e) of the TIA and such Section
315(e) is hereby expressly excluded from this Indenture, as permitted by the
TIA.


                                       39


<PAGE>

                  Section 6.12 Waiver of Stay, Extension or Usury Laws. The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit or
forgive the Company from paying all or any portion of the Principal Amount at
Maturity, Restated Principal Amount, Redemption Price, Purchase Price or Change
in Control Purchase Price in respect of Securities, or any interest on such
amounts, as contemplated herein, or which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                                   ARTICLE VII

                                     TRUSTEE

                  Section 7.1 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.

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

                  (1)      the Trustee need perform only those duties that are
                           specifically set forth in this Indenture and no
                           others; and

                  (2)      in the absence of bad faith on its part, the Trustee
                           may conclusively rely, as to the truth of the
                           statements and the correctness of the opinions
                           expressed therein, upon certificates or opinions
                           furnished to the Trustee and conforming to the
                           requirements of this Indenture, but in case of any
                           such certificates or opinions which by any provision
                           hereof are specifically required to be furnished to
                           the Trustee, the Trustee shall examine the
                           certificates and opinions to determine whether or not
                           they conform to the requirements of this Indenture,
                           but need not confirm or investigate the accuracy of
                           mathematical calculations or other facts stated
                           therein. This Section 7.1(b) shall be in lieu of
                           Section 3.15(a) of the TIA and such Section 315(a) is
                           hereby expressly excluded from this Indenture, as
                           permitted by the TIA.

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

                  (1)      this paragraph (c) does not limit the effect of
                           paragraph (b) of this Section 7.1;

                  (2)      the Trustee shall not be liable for any error of
                           judgment made in good faith by a Responsible Officer
                           unless it is proved that the Trustee was negligent in
                           ascertaining the pertinent facts; and


                                       40
<PAGE>
                  (3)      the Trustee shall not be liable with respect to any
                           action it takes or omits to take in good faith in
                           accordance with a direction received by it pursuant
                           to Section 6.5.

Subparagraphs (c)(1), (2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.

                  (d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section
7.1.

                  (e) The Trustee may refuse to perform any duty or exercise any
right or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.

                  (f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
(acting in any capacity hereunder) shall be under no liability for interest on
any money received by it hereunder unless otherwise agreed in writing with the
Company.

                  Section 7.2 Rights of Trustee. Subject to its duties and
responsibilities under the TIA,

                  (a) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;

                  (b) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, conclusively rely upon an Officers' Certificate;

                  (c) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder;

                  (d) The Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith which it believes to be
authorized or within its rights or powers conferred under this Indenture;

                  (e) The Trustee may consult with counsel selected by it and
any advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel.

                  (f) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee


                                       41
<PAGE>
security or indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby.

                  (g) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;

                  (h) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation;

                  (i) the Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture;

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

                  (k) the Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers' Certificate may be signed by any person authorized to
sign an Officers' Certificate, including any person specified as so authorized
in any such certificate previously delivered and not superseded.

                  Section 7.3 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, Conversion
Agent or co-registrar may do the same with like rights. However, the Trustee
must comply with Sections 7.10 and 7.11.

                  Section 7.4 Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use or application of
the proceeds from the Securities, it shall not be responsible for any statement
in the registration statement for the Securities under the Securities Act or in
any offering document for the Securities, the Indenture or the Securities (other
than its certificate of authentication), or the determination as to which
beneficial owners are entitled to receive any notices hereunder.

                  Section 7.5 Notice of Defaults. If a Default occurs and if it
is known to the Trustee, the Trustee shall give to each Securityholder notice of
the Default within 90 days after it occurs or, if later, within 15 days after it
is known to the Trustee, unless such Default shall have


                                       42
<PAGE>
been cured or waived before the giving of such notice. Notwithstanding the
preceding sentence, except in the case of a Default described in Section 6.1(1)
or (2), the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Securityholders. The second sentence of this Section 7.5 shall
be in lieu of the proviso to Section 315(b) of the TIA and such proviso is
hereby expressly excluded from this Indenture, as permitted by the TIA. The
Trustee shall not be deemed to have knowledge of a Default unless a Responsible
Officer of the Trustee has received written notice of such Default.

                  Section 7.6 Reports by Trustee to Holders. Within 60 days
after each April 15 beginning with the April 15 following the date of this
Indenture, the Trustee shall mail to each Securityholder a brief report dated as
of such April 15 that complies with TIA Section 313(a), if required by such
Section 313(a). The Trustee also shall comply with TIA Section 313(b).

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

                  Section 7.7 Compensation and Indemnity. The Company agrees:

                  (a) to pay to the Trustee from time to time such compensation
as the Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited (to
the extent permitted by law) by any provision of law in regard to the
compensation of a trustee of an express trust);

                  (b) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, advances and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and

                  (c) to indemnify the Trustee or any predecessor, Trustee and
their agents for, and to hold them harmless against, any loss, damage, claim,
liability, cost or expense (including attorney's fees and expenses, and taxes
(other than taxes based upon, measured by or determined by the income of the
Trustee)) incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim (whether asserted
by the Company or any Holder or any other person) or liability in connection
with the exercise or performance of any of its powers or duties hereunder.

                  To secure the Company's payment obligations in this Section
7.7, the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay the
Principal Amount at Maturity, Restated Principal Amount, Redemption Price,
Purchase Price, Change in Control Purchase Price or interest, if any, as the
case may be, on particular Securities.

                  The Company's payment obligations pursuant to this Section 7.7
shall survive the discharge of this Indenture and the resignation or removal of
the Trustee. Without prejudice to any other rights available to the Trustee
under applicable law, when the Trustee incurs expenses after the occurrence of a
Default specified in Section 6.1(5) or (6), the expenses including the


                                       43
<PAGE>
reasonable charges and expenses of its counsel, are intended to constitute
expenses of administration under any Bankruptcy Law.

                  Section 7.8 Replacement of Trustee. The Trustee may resign by
so notifying the Company; provided, however, no such resignation shall be
effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.8. The Holders of a majority in aggregate Principal Amount at
Maturity of the Securities at the time outstanding may remove the Trustee by so
notifying the Trustee and the Company. The Company shall remove the Trustee if:

         (1)      the Trustee fails to comply with Section 7.10;

         (2)      the Trustee is adjudged bankrupt or insolvent;

         (3)      a receiver or public officer takes charge of the Trustee or
                  its property; or

         (4)      the Trustee otherwise becomes incapable of acting.

                  If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.

                  A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.7.

                  If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in aggregate Principal Amount at Maturity
of the Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.

                  If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.

                  Section 7.9 Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee.

                  Section 7.10 Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The
Trustee (or its parent holding company) shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. Nothing herein contained shall prevent the Trustee from
filing with the Commission the application referred to in the penultimate
paragraph of TIA Section 310(b). The Trustee shall not be deemed to have a
conflicting interest under the TIA by virtue of being a trustee under the
Indenture dated as of August 10, 2000 between the


                                       44
<PAGE>
Company and the Trustee and the Indenture dated as of April 25, 2001 between
Calpine Canada Energy Finance ULC and the Trustee, with respect to which the
Company is the guarantor.

                  Section 7.11 Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.

                                  ARTICLE VIII

                             DISCHARGE OF INDENTURE

                  Section 8.1 Discharge of Liability on Securities. When (i) the
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced or paid pursuant to Section 2.7 or Securities for whose
payment money has theretofore been deposited in trust by the Company with the
Trustee or a Paying Agent and thereafter repaid to the Company as provided in
Paragraph 11 of the Securities) for cancellation or (ii) all outstanding
Securities have become due and payable and the Company deposits with the Trustee
cash and/or, if permitted by the terms of this Indenture, shares of Common
Stock, sufficient to pay all amounts due and owing on all outstanding Securities
(other than Securities replaced pursuant to Section 2.7 or Securities for whose
payment money has theretofore been deposited in trust by the Company with the
Trustee or a Paying Agent and thereafter repaid to the Company as provided in
Paragraph 11 of the Securities), and if in either case the Company pays all
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 7.7, cease to be of further effect. The Trustee shall join in the
execution of a document prepared by the Company acknowledging satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers'
Certificate and Opinion of Counsel and at the cost and expense of the Company.

                                   ARTICLE IX

                                   AMENDMENTS

                  Section 9.1 Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without the consent of any
Securityholder, so long as such changes, other than those in clause (2), do not
materially and adversely affect the interests of the Securityholder:

         (1) to cure any ambiguity, omission, defect or inconsistency provided
that such modification or amendment does not, in the good faith opinion of the
Board of Directors and the Trustee, adversely affect the interests of the
holders of the Securities in any material respect;

         (2) to comply with Article 5 or Section 10.12;

         (3) to secure the Company's obligations or add any guarantee under the
Securities and this Indenture;

         (4) to add to the Company's covenants for the benefit of the
Securityholders or to surrender any right or power conferred upon the Company;

         (5) to make any change necessary for the registration of the Securities
under the Securities Act or to comply with the TIA, or any amendment thereto, or
to comply with any


                                       45
<PAGE>
requirement of the SEC in connection with the qualification of the Indenture
under the TIA, provided that such modification or amendment does not, in the
good faith opinion of the Board of Directors and the Trustee, adversely affect
the interests of the holders of the Securities in any material respect;

         (6) to provide for uncertificated Securities in addition to or in place
of certificated Securities or to provide for bearer securities; provided,
however, that such uncertificated Securities are issued in registered form for
purposes of Section 163(f) of the Code or in a manner such that such
uncertificated Securities are described in Section 163(f)(2)(B) of the Code;

         (7) to modify the restrictions on resales and other transfers of the
Securities and any shares of Common Stock issuable upon conversion of the
Securities to reflect any change in applicable law or regulation (or
interpretation thereof) or in practices relating to the resale or transfer of
restricted securities generally; or

         (8) to make any change that does not adversely affect the rights of any
Securityholder.

                  Section 9.2 With Consent of Holders. With the written consent
of the Holders of at least a majority in aggregate Principal Amount at Maturity
of the Securities at the time outstanding, the Company and the Trustee may amend
this Indenture or the Securities. However, without the consent of each
Securityholder affected, an amendment to this Indenture or the Securities may
not:

         (1) reduce the amount of Securities the Holders of which must consent
to an amendment or supplement or waiver pursuant to Section 6.4, 6.7 or this
Section 9.2

         (2) reduce the rate of interest or change the time for payment of
interest on the Securities;

         (3) make any change in the method of determining whether an Upward
Interest Adjustment shall be made for a semi-annual period;

         (4) reduce the Principal Amount at Maturity or the Issue Price of or
change the Stated Maturity of any Security;

         (5) make any change in any redemption or repurchase right to the
detriment of a Holder;

         (6) make the Securities payable in currency or consideration other than
that stated in the Security;

         (7) impair the Holder's right to receive payment of principal and
interest on the Securities or to institute suit for the enforcement of any
payment on the Securities; or

         (8) waive a continuing Event of Default regarding any payment on the
Securities.

                  It shall not be necessary for the consent of the Holders under
this Section 9.2 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.


                                       46
<PAGE>
                  After an amendment under this Section 9.2 becomes effective,
the Company shall mail to each Holder a notice briefly describing the amendment.

                  Section 9.3 Compliance with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall comply with the
TIA.

                  Section 9.4 Revocation and Effect of Consents, Waivers and
Actions. Until an amendment, waiver or other action by Holders becomes
effective, a consent thereto by a Holder of a Security hereunder is a continuing
consent by the Holder and every subsequent Holder of that Security or portion of
the Security that evidences the same obligation as the consenting Holder's
Security, even if notation of the consent, waiver or action is not made on the
Security. However, any such Holder or subsequent Holder may revoke the consent,
waiver or action as to such Holder's Security or portion of the Security if the
Trustee receives the notice of revocation before the date the amendment, waiver
or action becomes effective. After an amendment, waiver or action becomes
effective, it shall bind every Securityholder.

                  Section 9.5 Notation on or Exchange of Securities. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.

                  Section 9.6 Trustee to Sign Supplemental Indentures. The
Trustee shall sign any supplemental indenture authorized pursuant to this
Article 9 if the amendment contained therein does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign such supplemental indenture. In signing such
supplemental indenture the Trustee shall receive, and (subject to the provisions
of Section 7.1) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that such amendment is authorized
or permitted by this Indenture.

                  Section 9.7 Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

                                    ARTICLE X

                                   CONVERSIONS

                  Section 10.1 Conversion Privilege. A Holder of a Security may
convert such Security into shares of Common Stock at any time during the period
stated in Paragraph 8 of the Securities. The number of shares of Common Stock
issuable upon conversion of a Security per $1,000 Principal Amount at Maturity
thereof (the "Conversion Rate") shall be that set forth in Paragraph 8 in the
Securities, subject to adjustment as herein set forth.

                  A Holder may convert a portion of the Principal Amount at
Maturity of a Security if the portion is $1,000 or an integral multiple of
$1,000. Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of a Security.


                                       47
<PAGE>
                  Section 10.2 Conversion Procedure. To convert a Security a
Holder must satisfy the requirements in Paragraph 8 of the Securities. The first
Business Day on which the Holder satisfies all those requirements is the
conversion date (the "Conversion Date").

                  As soon as practicable after the Conversion Date, the Company
shall deliver to the Holder, through the Conversion Agent, a certificate for the
number of full shares of Common Stock issuable upon the conversion or exchange
and cash in lieu of any fractional share determined pursuant to Section 10.3.
The person in whose name the certificate is registered shall be treated as a
shareholder of record as of the close of business on the Conversion Date. Upon
conversion of a Security, such person shall no longer be a Holder of such
Security.

                  No payment or adjustment will be made for dividends on, or
other distributions with respect to, any Common Stock except as provided in this
Article 10. On conversion of a Security, that portion of accrued interest, if
any, attributable to the period from the Issue Date of the Security through the
Conversion Date with respect to the converted Security shall not be cancelled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
Holder thereof through delivery of the shares of Common Stock (together with the
cash payment, if any, in lieu of fractional shares) for the Security being
converted pursuant to the provisions hereof; and the fair market value of such
shares of Common Stock (together with any such cash payment in lieu of
fractional shares) shall be treated as issued, to the extent thereof, first in
exchange for interest, if any, accrued through the Conversion Date, and the
balance, if any, of such fair market value of such shares of Common Stock (and
any such cash payment) shall be treated as issued for the Issue Price of the
Security being converted pursuant to the provisions hereof. If the Holder
converts more than one Security at the same time, the number of shares of Common
Stock issuable upon the conversion shall be based on the total Principal Amount
at Maturity of the Securities converted.

                  If the last day on which a Security may be converted is a
Legal Holiday, the Security may be surrendered on the next succeeding day that
is not a Legal Holiday.

                  Upon surrender of a Security that is converted in part, the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder, a new Security in an authorized denomination equal in Principal Amount
at Maturity to the unconverted portion of the Security surrendered.

                  Section 10.3 Fractional Shares. Securityholders will not
receive a fractional share upon conversion of a Security. Instead, the Holder
will receive cash for the current market value of the fractional share. The
current market value of a fractional share shall be determined, to the nearest
1/1,000th of a share, by multiplying the Sale Price, on the last trading day
prior to the Conversion Date, of a full share by the fractional amount and
rounding the product to the nearest whole cent, with one-half cent being rounded
upward.

                  Section 10.4 Taxes on Conversion. If a Holder submits a
Security for conversion, the Company shall pay any documentary, stamp or similar
issue or transfer tax due on the issue of shares of Common Stock upon the
conversion. However, the Holder shall pay any such tax which is due because the
Holder requests the shares to be issued in a name other than the Holder's name.
The Conversion Agent may refuse to deliver the certificates representing the
shares of Common Stock being issued in a name other than the Holder's name until
the Conversion Agent receives a sum sufficient to pay any tax which will be due
because


                                       48
<PAGE>
the shares are to be issued in a name other than the Holder's name. Nothing
herein shall preclude any income tax withholding required by law or regulations.

                  Section 10.5 Company to Provide Stock. The Company has, and
from time to time as may be necessary shall, reserve out of its authorized but
unissued shares of Common Stock a sufficient number of shares of Common Stock to
permit the conversion of the Securities in full.

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

                  Section 10.6 Conversion Price Adjustments. The Conversion Rate
shall be subject to adjustment (without duplication) from time to time as
follows:

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

                  (b) In case the Company shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall otherwise
issue to all holders of its Common Stock, rights or warrants, in each case
entitling the holders thereof to subscribe for or purchase shares of Common
Stock at a price per share less than the current market value per share
(determined as provided in paragraph (g)) of the Common Stock on the date fixed
for the determination of stockholders entitled to receive such rights or
warrants, the Conversion Rate in effect at the opening of business on the day
following the date fixed for such determination shall be increased by
multiplying such Conversion Rate by a fraction of which the denominator shall be
the sum of (i) the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus (ii) the number of shares
of Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase at
such current market value and the numerator shall be the sum of (i) the number
of shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus (ii) the number of shares of Common Stock so offered
for subscription or purchase, such increase to become effective immediately
after the opening of business on the day following the date fixed for such
determination. To the extent that rights are


                                       49
<PAGE>
not so issued or shares of Common Stock are not so delivered after the
expiration of such rights or warrants, the Conversion Rate shall be readjusted
to the Conversion Rate which would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants had
not been fixed. For the purposes of this paragraph (b), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company.

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

                  (d) Subject to the last sentence of this paragraph (d), in
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness, shares of any class or series of
Capital Stock, cash or assets (including securities, but excluding any rights or
warrants referred to in paragraph (b) of this Section 10.6, any dividend or
distribution paid exclusively in cash and any dividend or distribution referred
to in paragraph (a) of this Section 10.6), the Conversion Rate shall be
increased so that the same shall equal the price determined by multiplying the
Conversion Rate in effect immediately prior to the effectiveness of the
Conversion Rate increase contemplated by this paragraph (d) by a fraction of
which the denominator shall be the current market value per share (determined as
provided in paragraph (g) of this Section 10.6) of the Common Stock on the date
fixed for the determination of stockholders entitled to receive such
distribution (the "Reference Date") less the fair market value (as determined in
good faith by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors), on the Reference Date,
of the portion of the evidences of indebtedness, shares of capital stock, cash
and/or assets so distributed applicable to one share of Common Stock and the
numerator shall be such current market value per share of the Common Stock, such
increase to become effective immediately prior to the opening of business on the
day following the Reference Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted
to be the Conversion Rate which would then be in effect if such dividend or
distribution had not occurred. For purposes of this paragraph (d), any dividend
or distribution that includes shares of Common Stock or rights or warrants to
subscribe for or purchase shares of Common Stock shall be deemed instead to be
(1) a dividend or distribution of the evidences of indebtedness, shares of
Capital Stock, cash and/or assets other than such shares of Common Stock or such
rights or warrants (making any Conversion Rate increase required by this
paragraph (d)) immediately followed by (2) a dividend or distribution of such
shares of Common Stock or such rights or warrants (making any further Conversion
Rate increase required by paragraph (a) or (b) of this Section 10.6), except any
shares of Common Stock included in such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of paragraph (a) of this Section 10.6.

                  (e) In case the Company pays to holders of Common Stock in
respect of a tender or exchange offer, other than an odd-lot offer, by the
Company or any of its Subsidiaries for Common Stock to the extent that the offer
involves aggregate consideration that, together with


                                       50
<PAGE>
(1) any cash and the fair market value of any other consideration payable in
respect of any tender offer by the Company or any of its Subsidiaries for shares
of Common Stock consummated within the preceding 12 months not triggering a
Conversion Rate adjustment and (2) all-cash distributions to all or
substantially all holders of Common Stock made within the preceding 12 months
not triggering a Conversion Rate adjustment, exceeds an amount equal to 12.5% of
the market capitalization of Common Stock on the expiration date of the tender
offer, the Conversion Rate shall be increased so that the same shall equal the
price determined by multiplying the Conversion Rate in effect immediately prior
to the effectiveness of the Conversion Rate increase contemplated by this
paragraph (e) by a fraction of which the denominator shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged shares)
at the last time tenders of exchanges may be made pursuant to such tender or
exchange offer (the "Expiration Time") multiplied by the current market value
per share (determined as provided in paragraph (g) of this Section 10.6) of the
Common Stock on the trading day on the NYSE next succeeding the Expiration Time
and the numerator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the current market value per share (determined as provided in paragraph
(g) of this Section 10.6) of the Common Stock on the trading day on the NYSE
next succeeding the Expiration Time, such increase to become effective
immediately prior to the opening of business on the day following the Expiration
Time.

                  (f) In case the Company distributes to all or substantially
all holders of Common Stock all-cash distributions in an aggregate amount that,
together with (1) any cash and the fair market value of any other consideration
payable in respect of any tender offer by the Company or any of its Subsidiaries
for shares of Common Stock consummated within the preceding 12 months not
triggering a Conversion Rate adjustment and (2) all other all-cash distributions
to all or substantially all holders of Common Stock made within the preceding 12
months not triggering a Conversion Rate adjustment, exceeds an amount equal to
12.5% of the market capitalization of the Common Stock on the Business Day
immediately preceding the day on which the Company declares the distribution,
the Conversion Rate shall be increased so that the same shall equal the price
determined by multiplying the Conversion Rate in effect immediately prior to the
effectiveness of the Conversion Rate increase contemplated by this paragraph (f)
by a fraction of which the denominator shall be the current market value per
share (determined as provided in paragraph (g) of this Section 10.6) of the
Common Stock on the date fixed for the payment of such distribution less the
amount of cash so distributed and not excluded as provided below applicable to
one share of Common Stock and the numerator shall be such current market value
per share of the Common Stock, such increase to become effective immediately
prior to the opening of business on the day following the date fixed for the
payment of such distribution; provided, however, that in the event the portion
of the cash so distributed applicable to one share of Common Stock is equal to
or greater than the current market value per share (as defined in paragraph (g)
of this Section 10.6) of the Common Stock on the record date mentioned above, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder of Securities shall have the right to receive upon conversion the amount
of cash such Holder would have received had such Holder converted each Security
immediately prior to the record date for the distribution of the cash. In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect if such record date had not been fixed.


                                       51
<PAGE>
                  (g) For the purpose of any computation under paragraphs (b),
(d), (e) and (f) of this Section 10.6, the current market value per share of
Common Stock on any date in question shall be deemed to be the average of the
daily closing prices on the NYSE for the ten consecutive trading days prior to
the earlier of the day in question and, if applicable, the day before the "ex"
date (as hereinafter defined) with respect to the issuance or distribution
requiring such computation; provided, however, that if the day in question or
the "ex" date for any event (other than the issuance or distribution requiring
such computation) that requires an adjustment to the Conversion Rate pursuant to
Section 10.6 (b), (d), (e) or (f) occurs during such 10 consecutive NYSE trading
days, the closing price on the NYSE for each trading day prior to such date for
such other event shall be adjusted by dividing such closing price by the same
fraction by which the Conversion Rate is so required to be adjusted as a result
of such other event. For purposes of this paragraph (g), the term "ex" date (I)
when used with respect to any issuance or distribution, means the first date on
which the Common Stock trades regular way on the relevant exchange or in the
relevant market from which the closing price was obtained without the right to
receive such issuance or distribution, (II) when used with respect to any
subdivision or combination of shares of Common Stock, means the first date on
which the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes effective and
(III) when used with respect to any tender or exchange offer means the first
date on which the Common Stock trades regular way on such exchange or in such
market after the Expiration Time of such offer. Notwithstanding the foregoing,
whenever successive adjustments to the Conversion Rate are called for pursuant
to this Section 10.6, such adjustments shall be made to the current market price
as may be necessary or appropriate to effectuate the intent of this Section 10.6
and to avoid unjust or inequitable results, as determined in good faith by the
Board of Directors.

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

                  Section 10.7 When Adjustment May Be Deferred. No adjustment in
the Conversion Rate need be made unless the adjustment would require an increase
or decrease of at least 1% in the Conversion Rate. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.

                  All calculations under this Article 10 shall be made to the
nearest cent, with one-half cent rounded up, or to the nearest 1/1,000th of a
share, as the case may be.

                  Section 10.8 When No Adjustment Required. No adjustment need
be made for a transaction referred to in Section 10.6(b) or (d) if
Securityholders are to participate in the transaction without conversion on a
basis and with notice that the Board of Directors determines


                                       52
<PAGE>
to be fair and appropriate in light of the basis and notice on which holders of
shares of Common Stock participate in the transaction.

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

                  To the extent the Securities become convertible pursuant to
this Article 10 in whole or in part into cash, no adjustment need be made
thereafter as to the cash. Interest will not accrue on the cash.

                  Section 10.9 Notice of Adjustment. Whenever the Conversion
Rate is adjusted, the Company shall promptly mail to Securityholders a notice of
the adjustment. The Company shall file with the Trustee and the Conversion Agent
such notice and a certificate from the Company's independent public accountants
briefly stating the facts requiring the adjustment and the manner of computing
it. The certificate shall be conclusive evidence that the adjustment is correct.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate except to exhibit the same
to any Holder desiring inspection thereof.

                  Section 10.10 Voluntary Increase. The Company from time to
time may increase the Conversion Rate by any amount at any time for at least 20
days, so long as the increase is irrevocable during such period. Whenever the
Conversion Rate is increased, the Company shall mail to Securityholders and file
with the Trustee and the Conversion Agent a notice of the increase. The Company
shall mail the notice at least 15 days before the date the increased Conversion
Rate takes effect. The notice shall state the increased Conversion Rate and the
period it will be in effect. A voluntary increase of the Conversion Rate does
not change or adjust the Conversion Rate otherwise in effect for purposes of
Section 10.6.

                  Section 10.11 Notice of Certain Transactions. If:

         (1) the Company takes any action that would require an adjustment in
the Conversion Rate pursuant to Section 10.6 (unless no adjustment is to occur
pursuant to Section 10.8); or

         (2) the Company takes any action that would require a supplemental
indenture pursuant to Section 10.12; or

         (3) there is a liquidation or dissolution of the Company;

then the Company shall mail to Securityholders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, binding share exchange, transfer,
liquidation or dissolution. The Company shall file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in it
shall not affect the validity of the transaction.

                  Section 10.12 Reorganization of Company; Special
Distributions. If the Company is a party to a transaction subject to Section 5.1
(other than a sale of all or substantially all of the assets of the Company in a
transaction in which the holders of shares of Common Stock immediately prior to
such transaction do not receive securities, cash


                                       53
<PAGE>
or other assets of the Company or any other person) or a merger or binding share
exchange which reclassifies or changes its outstanding shares of Common Stock,
the person obligated to deliver securities, cash or other assets upon conversion
of Securities shall enter into a supplemental indenture. If the issuer of
securities deliverable upon conversion of Securities is an Affiliate of the
successor Company, that issuer shall join in the supplemental indenture.

                  The supplemental indenture shall provide that the Holder of a
Security may convert it into the kind and amount of securities, cash or other
assets which such Holder would have received immediately after the
consolidation, merger, binding share exchange or transfer if such Holder had
converted the Security immediately before the effective date of the transaction,
assuming (to the extent applicable) that such Holder (i) was not a constituent
person or an Affiliate of a constituent person to such transaction; (ii) made no
election with respect thereto; and (iii) was treated alike with the plurality of
non- electing Holders. The supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practical to the adjustments
provided for in this Article 10. The successor Company shall mail to
Securityholders a notice briefly describing the supplemental indenture.

                  If this Section applies, Section 10.6 does not apply.

                  Section 10.13 Company Determination Final. Any determination
that the Company or the Board of Directors must make pursuant to Section 10.3,
10.6, 10.7, 10.8, 10.12 or 10.15 is conclusive, absent manifest error.

                  Section 10.14 Trustee's Adjustment Disclaimer. The Trustee has
no duty to determine when an adjustment under this Article 10 should be made,
how it should be made or what it should be. The Trustee has no duty to determine
whether a supplemental indenture under Section 10.12 need be entered into or
whether any provisions of any supplemental indenture are correct. The Trustee
shall not be accountable for and makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities. The
Trustee shall not be responsible for the Company's failure to comply with this
Article 10. Each Conversion Agent shall have the same protection under this
Section 10.14 as the Trustee.

                  Section 10.15 Successive Adjustments. After an adjustment to
the Conversion Rate under this Article 10, any subsequent event requiring an
adjustment under this Article 10 shall cause an adjustment to the Conversion
Rate as so adjusted.

                                   ARTICLE XI

                                  MISCELLANEOUS

                  Section 11.1 Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control, except any TIA provision expressly overridden by any provision
hereunder.

                  Section 11.2 Notices. Any request, demand, authorization,
notice, waiver, consent or communication shall be in writing and delivered in
person or mailed by first-class mail, postage prepaid, addressed as follows or
transmitted by facsimile transmission (confirmed by guaranteed overnight
courier) to the following facsimile numbers:

         if to the Company:


                                       54
<PAGE>
         Calpine Corporation
         50 West San Fernando Street
         San Jose, California  95113
         Attn: Corporate Secretary
         Facsimile No. 408-975-4648

         if to the Trustee:

         Wilmington Trust Company
         Rodney Square North
         1100 North Market Street
         Wilmington, Delaware  19890

         Telephone No. 302-651-8584
         Facsimile No. 302-651-8882
         Attention:  Corporate Trust Administration

                  The Company or the Trustee by notice given to the other in the
manner provided above may designate additional or different addresses for
subsequent notices or communications.

                  Any notice or communication given to a Securityholder shall be
mailed to the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.

                  Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.

                  If the Company mails a notice or communication to the
Securityholders, it shall mail a copy to the Trustee and each Registrar, Paying
Agent, Conversion Agent or co-registrar.

                  Section 11.3 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).

                  Section 11.4 Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:

         (1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and

         (2) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.


                                       55
<PAGE>
                  Section 11.5 Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to compliance with
a covenant or condition provided for in this Indenture (other than Officers'
Certificates provided pursuant to Section 4.3) shall include:

         (1) a statement that each person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;

         (2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers'
Certificate or Opinion of Counsel are based;

         (3) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and

         (4) a statement that, in the opinion of such person, such covenant or
condition has been complied with.

                  Section 11.6 Separability Clause. In case any provision in
this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

                  Section 11.7 Rules by Trustee, Paying Agent, Conversion Agent
and Registrar. The Trustee may make reasonable rules for action by or a meeting
of Securityholders. The Registrar, the Conversion Agent and the Paying Agent may
make reasonable rules for their functions.

                  Section 11.8 Legal Holidays. A "Legal Holiday" is any day
other than a Business Day. If any specified date (including a date for giving
notice) is a Legal Holiday, the action shall be taken on the next succeeding day
that is not a Legal Holiday, and, if the action to be taken on such date is a
payment in respect of the Securities, no interest, if any, shall accrue for the
intervening period.

                  Section 11.9 GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK
SHALL GOVERN THIS INDENTURE AND THE SECURITIES.

                  Section 11.10 No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.

                  Section 11.11 Successors. All agreements of the Company in
this Indenture and the Securities shall bind its successor. All agreements of
the Trustee in this Indenture shall bind its successor.

                  Section 11.12 Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.


                                       56
<PAGE>
         IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first above written.

                                         CALPINE CORPORATION


                                         By: ___________________________________
                                           Name:
                                           Title:


                                         WILMINGTON TRUST COMPANY


                                         By: ___________________________________
                                           Name:
                                           Title:


                                       57
<PAGE>
                                   EXHIBIT A-1

                        [FORM OF FACE OF GLOBAL SECURITY]

THIS SECURITY IS ISSUED WITH AN INDETERMINATE AMOUNT OF ORIGINAL ISSUE DISCOUNT
AND WILL BE SUBJECT TO THE REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT
INSTRUMENTS FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. AS REQUIRED UNDER
APPLICABLE TREASURY REGULATIONS, THE COMPANY HAS SET FORTH THE "COMPARABLE
YIELD" IN SECTION 4.6 OF THE INDENTURE PURSUANT TO WHICH THIS SECURITY IS BEING
ISSUED.

THIS SECURITY IS ISSUED IN GLOBAL FORM AND REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") OR A NOMINEE THEREOF.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
IS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE REGISTERED FORM IN ACCORDANCE WITH THE TERMS OF THE INDENTURE (AS
DEFINED BELOW), THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO
A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY
DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY.

THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS SECURITY
HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF CALPINE CORPORATION THAT
THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1)TO A PERSON
WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT
OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO
<PAGE>
THE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.

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

The foregoing legend may be removed from this Security on satisfaction of the
conditions specified in the Indenture.

                                       2
<PAGE>
                               CALPINE CORPORATION

              Zero-Coupon Convertible Debenture Due April 30, 2021

No.                                                   CUSIP:  131347 AX4

Issue Date:  April 30, 2001

Issue Price: $1,000

                  CALPINE CORPORATION, a Delaware corporation, promises to pay
to Cede & Co. or registered assigns, the Principal Amount at Maturity indicated
on the Schedule of Increases and Decreases of Global Security attached hereto on
April 30, 2021.

                  This Security shall not bear interest except as specified on
the other side of this Security. This Security is convertible as specified on
the other side of this Security.

                  Additional provisions of this Security are set forth on the
other side of this Security.

Dated:                                    CALPINE CORPORATION


                                          By: __________________________________
                                          Title: _______________________________


TRUSTEE'S CERTIFICATE OF  AUTHENTICATION

WILMINGTON TRUST COMPANY, as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned Indenture.

By     __________________________________
            Authorized Signatory

Dated:


                                       3
<PAGE>
                       [FORM OF REVERSE SIDE OF SECURITY]

                             Zero-Coupon Convertible

                          Debenture Due April 30, 2021

1.  Interest.

         Except as provided below, this Security shall not bear interest.

         Interest Adjustment. An upward interest adjustment to the yield to
maturity on this Security equivalent to 7.25% per annum (an "Upward Interest
Adjustment") will be made on April 30, 2004, 2006, 2008, 2011 or 2016 (each, an
"Upward Interest Adjustment Date") if the following conditions are met. An
Upward Interest Adjustment shall be effective for the semi-annual period from
and including any such Upward Interest Adjustment Date to and excluding the
following interest payment date (as defined below) (a "semi-annual period") and
for each subsequent semi-annual period until the semi-annual period with respect
to which a Downward Interest Adjustment (as defined below) occurs. An Upward
Interest Adjustment will be made on each Upward Interest Adjustment Date if the
Trading Price (as defined below) of the Securities is less than 98% of the
Accreted Value (as defined below) as of such Upward Interest Adjustment Date for
20 out of the last 30 NYSE trading days ending 90 days prior to such Upward
Interest Adjustment Date. If an Upward Interest Adjustment is in effect for a
particular semi-annual period, the Company will pay a portion of the Upward
Interest Adjustment as cash interest at a rate of 0.25% per annum (0.125% per
semi-annual period) of the Accreted Value as of the beginning of the applicable
semi-annual period and the remaining interest (7.0% per annum) (based on the
Accreted Value as of the beginning of the applicable semi-annual period) will be
accrued and payable at the earlier of maturity or the redemption or the
repurchase of the Securities.

         If an Upward Interest Adjustment is in effect during a semi-annual
period (other than a semi-annual period immediately preceding an Upward Interest
Adjustment Date) and the Trading Price of the Securities is greater than or
equal to 98% of the Accreted Value as of the next following interest payment
date for 20 out of the last 30 NYSE trading days ending on such interest payment
date, the Upward Interest Adjustment will adjusted downward on such interest
payment date (such adjustment, a "Downward Interest Adjustment"), such that from
and including such date the Securities will cease to accrue interest unless and
until there is a subsequent Upward Interest Adjustment. If an Upward Interest
Adjustment is in effect during a semi-annual period immediately preceding an
Upward Interest Adjustment Date, a Downward Interest Adjustment will be made on
such Upward Interest Adjustment Date if the Trading Price of the Securities is
greater than or equal to 98% of the Accreted Value as of such Upward Interest
Adjustment Date for 20 out of the last 30 NYSE trading days ending 90 days prior
to such Upward Interest Adjustment Date. If a Downward Interest Adjustment is
made, no Upward Interest Adjustment may be made until the next Upward Interest
Adjustment Date.

         "Accreted Value" means, as of any date, the sum of the Issue Price of
the Securities and the accrued and unpaid interest as of such date (excluding
any accrued and unpaid interest which will be paid as cash interest).
<PAGE>
         The "Trading Price" of the Securities on any date of determination
means the average of the secondary market bid quotations per Security obtained
by the bid solicitation agent selected by the Company (the "Bid Solicitation
Agent") for $10,000,000 Principal Amount at Maturity of the Securities at
approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers selected by the
Company, provided that if at least three such bids are not obtained by the Bid
Solicitation Agent, but two such bids are obtained, then the average of the two
bids shall be used, and if only one such bid is obtained by the Bid Solicitation
Agent, this one bid shall be used. If the Bid Solicitation Agent cannot obtain
at least one bid for $10,000,000 Principal Amount at Maturity of the Securities
from a nationally recognized securities dealer or in the Company's reasonable
judgment, the bid quotations are not indicative of the secondary market value of
the Securities, then the Trading Price of the Securities will equal, as
determined by the Bid Solicitation Agent, (a) the then-applicable Conversion
Rate of the Securities multiplied by (b) the closing price on the NYSE of the
Company's Common Stock on such determination date.

         The Bid Solicitation Agent will initially be The Bank of New York. The
Company may change the Bid Solicitation Agent, but the Bid Solicitation Agent
will not be an Affiliate of the Company. The Bid Solicitation Agent will solicit
bids from securities dealers that are believed by the Company to be willing to
bid for the Securities.

         In the event of any Upward Interest Adjustment, the Company will give
notice thereof by disseminating a press release not later than three Business
Days prior to the relevant Upward Interest Adjustment Date through Dow Jones &
Company, Inc. or Bloomberg Business News and will publish such information on
the Company's Website on the World Wide Web or through such other public medium
as the Company may use at that time. Not later than three Business Days prior to
any Upward Interest Adjustment and promptly after a Downward Interest Adjustment
occurs or is determined to occur, whichever is earlier, the Company shall give
the Trustee notice thereof. The Trustee shall have no responsibility for
determining whether any facts exist that would cause an Upward Interest
Adjustment or a Downward Interest Adjustment to occur.

         Tax Event. From and after the date of the occurrence of a Tax Event,
the Company will have the option to elect (by notice to the Trustee) to pay cash
interest at a rate of 7.25% per annum on the Securities instead of accruing
interest pursuant to an Upward Interest Adjustment. Such cash interest would
only accrue and be payable during periods in which an Upward Interest Adjustment
is in effect. If the Company makes such an election, the principal amount on
which the Company pays interest will be restated (the "Restated Principal
Amount") and will be equal to the Issue Price plus accrued and unpaid interest
(other than cash interest payable on the interest payment date immediately
following the Option Exercise Date) payable pursuant to an Upward Interest
Adjustment to the date on which the Company exercises its option to commence
paying cash interest (the "Option Exercise Date"). Following the Company's
election to pay cash interest following a Tax Event, interest will be payable on
the Restated Principal Amount of the Securities.

         Such interest shall accrue from the Option Exercise Date and will be
payable semiannually on interest payment dates of April 30 and October 30 of
each year to Holders of record at the close of business on April 15 or October
15 (whether or not a Business Day) immediately preceding the interest payment
date.

         A "Tax Event" means that the Company shall have received an opinion
from a nationally


                                       2
<PAGE>
recognized independent tax counsel experienced in such matters to the effect
that as a result of:

         (i) any amendment to or change (including any announced prospective
change (which will not include a proposed change), provided that a Tax Event
will not occur more than 90 days before the effective date of any prospective
change) in the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority of the United States or any political
subdivision; or

         (ii) any judicial decision or official administrative pronouncement,
ruling, regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations (an
"Administrative Action"); or

         (iii) any amendment to or change in the administrative position or
interpretation of any Administrative Action or judicial decision that differs
from the theretofore generally accepted position, in each case, by any
legislative body, court, governmental agency or regulatory body, irrespective of
the manner in which such amendment or change is made known, which amendment or
change is effective or such Administrative Action or decision is announced, in
each case, on or after the Issue Date;

there is more than an insubstantial risk that interest, including original issue
discount, payable on the Securities either:

         (i) would not be deductible on a current accrual basis; or

         (ii) would not be deductible under any other method, in either case in
whole or in part, by the Company for United States federal income tax purposes.

         General. If this Security is redeemed on a date that is after the
record date and prior to the corresponding interest payment date, interest, if
any, accrued and unpaid hereon to but not including the applicable Redemption
Date will be paid to the same Holder to whom the Company pays the principal of
this Security.

         Cash interest on Securities converted after a record date but prior to
the corresponding interest payment date will be paid to the Holder of the
Securities on the record date but, upon conversion the Holder must pay the
Company the interest which has accrued and will be paid on such interest payment
date. No such payment need be made with respect to Securities which will be
redeemed after a record date and prior to the corresponding interest payment
date.

         Except as provided below, interest will be paid (i) on the Global
Securities to DTC in immediately available funds, (ii) on the definitive
Securities having an aggregate Principal Amount at Maturity of $5,000,000 or
less, by check mailed to the Holders of such Securities; and (iii) on the
definitive Securities having an aggregate Principal Amount at Maturity of more
than $5,000,000, by wire transfer in immediately available funds at the election
of the Holders of these Securities, which election shall be provided to the
Paying Agent in writing at least ten days prior to the applicable payment date.

         Any Interest payable hereunder will be computed based on a 360-day year
of twelve 30-day months, and will be payable semi-annually in arrears on each
April 30 and October 30 (each an "interest payment date"). The record date for
the payment of cash interest to Holders will be the close of business on April
15 and October 15 of each year (whether or not a Business Day);


                                       3
<PAGE>
provided, that interest payable at Stated Maturity or upon redemption or
repurchase will be payable to the person to whom principal is payable. The
Company will give notice to the Holders, no later than 30 days prior to each
record date, of the amount of cash interest to be paid as of the next interest
payment date.

2.  Method of Payment.

         Subject to the terms and conditions of the Indenture, the Company will
make payments in cash and/or Common Stock, as the case may be, in respect of
Redemption Prices, Purchase Prices, Change in Control Purchase Prices and at
Stated Maturity to Holders who surrender Securities to a Paying Agent to collect
such payments in respect of the Securities. The Company will pay cash amounts in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may make such cash
payments by check payable in such money, except as otherwise provided herein.

3.  Paying Agent, Conversion Agent and Registrar.

         Initially, Wilmington Trust Company (the "Trustee") will act as Paying
Agent, Conversion Agent and Registrar. The Company may appoint and change any
Paying Agent, Conversion Agent or Registrar without notice, other than notice to
the Trustee; provided that the Company will maintain at least one Paying Agent
in the State of New York, City of New York, Borough of Manhattan, which shall
initially be an office or agency of the Trustee. The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent or Registrar.

4.  Indenture.

         The Company issued the Securities under an Indenture, dated as of April
30, 2001 (the "Indenture"), between the Company and the Trustee. The terms of
the Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as in effect from
time to time (the "TIA"). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the TIA
for a statement of those terms.

         The Securities are general unsecured obligations of the Company limited
to $1,000,000,000 aggregate Principal Amount at Maturity (subject to Section 2.7
of the Indenture, Upward Interest Adjustments and the Company exercising is
option to pay cash interest upon a Tax Event). The Indenture does not limit
other Indebtedness of the Company, secured or unsecured.

5.  Redemption at the Option of the Company.

         No sinking fund is provided for the Securities. The Securities are
redeemable at the option of the Company in whole, or in part, at any time or
from time to time, on or after April 30, 2004 upon not less than 30 nor more
than 60 days' notice for a cash price equal to the Issue Price plus any accrued
and unpaid interest to, but excluding, the Redemption Date (the "Redemption
Price").

         If the Company has previously exercised its option to pay cash interest
instead of


                                       4
<PAGE>
accruing interest on the Securities following a Tax Event, the Redemption Price
will be equal to the Restated Principal Amount plus any accrued and unpaid cash
interest from the Option Exercise Date to the Redemption Date.

6.  Purchase By the Company at the Option of the Holder.

         Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, all or any portion of
the Securities held by such Holder on April 30, 2002, 2004, 2006, 2008, 2011 and
2016 in integral multiples of $1,000 Principal Amount at Maturity at the Issue
Price plus any accrued and unpaid interest to the Purchase Date upon delivery of
a Purchase Notice containing the information set forth in the Indenture, at any
time from the opening of business on the date that is 20 Business Days prior to
such Purchase Date until the close of business on the last Business Day prior to
such Purchase Date, and upon delivery of the Securities to the Paying Agent by
the Holder as set forth in the Indenture.

         If the Company has previously exercised its option to pay cash interest
instead of accruing interest on the Securities following a Tax Event, the
Purchase Price will be equal to the Restated Principal Amount plus accrued and
unpaid cash interest from the Option Exercise Date to the Purchase Date.

         The Purchase Price may be paid, at the option of the Company, in cash
or by the issuance and delivery of shares of Common Stock, or in any combination
thereof, provided that on April 30, 2016, the Company may only pay cash.

         At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to offer to purchase the
Securities held by such Holder within 30 days (which purchase shall occur 45
days after the date of such offer) after the occurrence of a Change in Control
of the Company for a Change in Control Purchase Price equal to the Issue Price
plus accrued and unpaid interest to the Change in Control Purchase Date, which
Change in Control Purchase Price shall be paid in cash (or Common Stock, subject
to the terms of the Indenture); provided that if the Company previously
exercised its option to pay cash interest on the Securities following a Tax
Event, the Change in Control Purchase Price shall equal the Restated Principal
Amount plus any accrued and unpaid cash interest from the Option Exercise Date
to the Change in Control Purchase Date.

         At the Company's option, subject to the terms of the Indenture, instead
of paying the Change in Control Purchase Price in cash, the Company may pay the
Change in Control Purchase Price in registered shares of Common Stock valued at
95% of the average of the closing prices on the NYSE of the Company's Common
Stock for the five NYSE trading days immediately preceding and including the
third NYSE trading day prior to the Change in Control Purchase Date.

         If cash (and/or securities if permitted under the Indenture) sufficient
to pay the Purchase Price or Change in Control Purchase Price, as the case may
be, of all Securities or portions thereof to be purchased as of the Purchase
Date or the Change in Control Purchase Date, as the case may be, is deposited
with the Paying Agent on the Business Day following the Purchase Date or the
Change in Control Purchase Date, interest ceases to accrue on such Securities
(or portions thereof) immediately after such Purchase Date or Change in Control
Purchase Date, and


                                       5
<PAGE>
the Holder thereof shall have no other rights as such other than the right to
receive the Purchase Price or Change in Control Purchase Price upon surrender of
such Security.

         Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice by delivering to the Paying Agent a written notice of
withdrawal in accordance with the provisions of the Indenture.

7.  Notice of Redemption.

         Notice of redemption pursuant to Paragraph 5 of this Security will be
mailed at least 30 days but not more than 60 days before the Redemption Date to
each Holder of Securities to be redeemed at the Holder's registered address. If
money sufficient to pay the Redemption Price of all Securities (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent prior to or on the Redemption Date, immediately after such Redemption Date
interest ceases to accrue on such Securities or portions thereof. Securities in
denominations larger than $1,000 of Principal Amount at Maturity may be redeemed
in part but only in integral multiples of $1,000 of Principal Amount at
Maturity.

8.  Conversion.

         Holders may surrender Securities for conversion into shares of Common
Stock at any time prior to 5:00 p.m., New York City time, on April 29, 2021. A
Holder may also surrender for conversion a Security or portion of a Security
which has been called for redemption pursuant to Paragraph 5 hereof and such
Securities may be surrendered for conversion until the close of business on the
day that is one Business Day prior to the Redemption Date.

         A Security in respect of which a Holder has delivered a Purchase Notice
or Change in Control Purchase Notice exercising the option of such Holder to
require the Company to purchase such Security may be converted only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture.

         The initial Conversion Rate is 13.2714 shares of Common Stock per
$1,000 Principal Amount at Maturity, subject to adjustment in certain events
described in the Indenture. A Holder which surrenders Securities for conversion
will receive cash or a check in lieu of any fractional share of Common Stock.

         To surrender a Security for conversion, a Holder must (1) complete and
manually sign the irrevocable conversion notice below (or complete and manually
sign a facsimile of such notice) and deliver such notice to the Conversion
Agent, (2) surrender the Security to the Conversion Agent, (3) furnish
appropriate endorsements and transfer documents and (4) pay any transfer or
similar tax, if required.

         A Holder may convert a portion of a Security if the Principal Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. No payment
or adjustment will be made for dividends on the shares of Common Stock except as
provided in the Indenture. On conversion of a Security, the Holder will not
receive any cash payment representing accrued interest with respect to the
converted Securities. Instead, upon conversion the Company will deliver to the
Holder a fixed number of shares of Common Stock and any cash payment to account
for fractional shares. Accrued interest will be deemed paid in full rather than
canceled, extinguished or forfeited. The Company will not adjust the Conversion
Rate to account for accrued interest.


                                       6
<PAGE>
         The Conversion Rate will be adjusted as provided in Article 10 of the
Indenture. The Company may increase the Conversion Rate for at least 20 days, so
long as the increase is irrevocable during such period.

         If the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a
Security into shares of Common Stock may be changed into a right to convert it
into securities, cash or other assets of the Company or another person.

9.  Denominations; Transfer; Exchange.

         The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount at Maturity and integral multiples
of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not transfer
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities in respect of which a Purchase Notice or Change in Control
Purchase Notice has been given and not withdrawn (except, in the case of a
Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.

10.  Persons Deemed Owners.

         The registered Holder of this Security may be treated as the owner of
this Security for all purposes.

11.  Unclaimed Money or Securities.

         The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property law. After return to the Company,
Holders entitled to the money or securities must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another person and the Trustee and the Paying Agent shall have no further
liability to the Securityholders with respect to such money or securities for
that period commencing after the return thereof.

12.  Amendment; Waiver.

         Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding and (ii) certain Defaults may be waived with
the written consent of the Holders of a majority in aggregate Principal Amount
at Maturity of the Securities at the time outstanding. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities so long as such changes, other that those in clause (ii) below, do
not materially and adversely affect the interest of Securityholders, among other
things, (i) to cure any ambiguity, omission, defect or inconsistency, (ii) to
comply with Article 5 or


                                       7
<PAGE>
Section 10.12 of the Indenture, (iii) to secure the Company's obligations or to
add any guarantee under the Securities and the Indenture; (iv) to add to the
covenants of the Company for the benefit of Securityholders or to surrender any
right or power conferred upon the Company, (v) to comply with any requirement of
the SEC in connection with the qualification of the Indenture under the TIA ,
(vi) to provide for uncertificated Securities, (vii) to modify the restrictions
on resales and other transfers of the Securities and any shares of Common Stock
issuable upon conversion thereof, or (viii) to make any change that does not
adversely affect the rights of any Securityholder.

13.  Defaults and Remedies.

         Under the Indenture, Events of Default include (i) default in payment
of the Issue Price (or Restated Principal Amount) plus accrued interest,
Redemption Price, Purchase Price or Change in Control Purchase Price, as the
case may be, in respect of the Securities when the same becomes due and payable,
(ii) default in the payment of interest, if any, when due and payable, subject
to lapse of time, (iii) material failure by the Company to comply with other
agreements in the Indenture or the Securities, subject to notice and lapse of
time; (iv) default by the Company under any instrument or instruments under
which there is or may be secured or evidenced any Indebtedness of the Company
(other than the Securities) having an outstanding principal amount of
$50,000,000 (or its foreign currency equivalent) or more, individually or in the
aggregate, that has caused the holders thereof to declare such Indebtedness to
be due and payable prior to its Stated Maturity, unless such declaration has
been rescinded within 30 days, (v) a default by the Company in the payment when
due of the principal of any bond, debenture, note or other evidence of the
Company's Indebtedness, in each case for money borrowed, or in the payment of
principal under any mortgage, indenture, agreement or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness of the Company for money borrowed, which default for payment of
principal is, individually or in an aggregate principal amount exceeding
$50,000,000 (or its foreign currency equivalent) when such Indebtedness becomes
due and payable (whether at maturity, upon redemption or acceleration or
otherwise), if such default shall continue unremedied or unwaived for more than
30 days after the expiration of any grace period or extension of the time for
payment applicable thereto; and (vi) certain events of bankruptcy, insolvency
and reorganization.

         Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Principal Amount at
Maturity of the Securities at the time outstanding may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Default (except a Default in payment of amounts
specified in clause (ii) above) if it determines that withholding notice is in
their interests.

14.  Trustee Dealings with the Company.

         Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

15.  Calculations in Respect of Securities.


                                       8
<PAGE>
         The Company will be responsible for making all calculations called for
under the Securities including, but not limited to, determination of the market
prices for the Securities and of the Common Stock and the amounts of interest
payments, if any. Any calculations made in good faith and without manifest error
will be final and binding on Holders of the Securities. The Company will be
required to deliver to the Trustee a schedule of its calculations and the
Trustee will be entitled to rely upon the accuracy of such calculations without
independent verification.

16.  No Recourse Against Others.

         A director, officer, employee or shareholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.

17.  Authentication.

         This Security shall not be valid until an authorize signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.

18.  Abbreviations.

         Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

19.  GOVERNING LAW.

         THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.

         The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:

         Calpine Corporation
         50 West San Fernando Street
         San Jose, CA  95113
         Attn: Secretary

20.  Registration Rights.

         The Holders of the Securities are entitled to the benefits of a
Registration Rights Agreement, dated as of April 30, 2001, between the Company
and Goldman, Sachs & Co., including the receipt of liquidated damages upon a
registration default.


                                       9
<PAGE>
<TABLE>
<CAPTION>
                ASSIGNMENT FORM                                        CONVERSION NOTICE
                ---------------                                        -----------------
<S>                                                       <C>
To assign this Security, fill in the form below:          To convert this Security into Common Stock
                                                          of the Company, check the box [   ]

I or we assign and transfer this Security to              To convert only part of this Security,
_______________________________________________           state the Principal Amount at Maturity to
_______________________________________________           be converted (which must be $1,000 or an
(Insert assignee's soc. sec. or tax ID no.)               integral multiple of $1,000):
_______________________________________________
_______________________________________________           If you want the stock certificate made out
_______________________________________________           in another person's name fill in the form
(Print or type assignee's name, address and zip           below:
code)                                                     ____________________________________________
                                                          ____________________________________________
and irrevocably appoint                                   (Insert the other person's soc. sec. tax
                                                          ID no.
____________________ agent to transfer this
Security on the books of the Company.  The                ____________________________________________
agent may substitute another to act for him.              ____________________________________________
                                                          ____________________________________________
                                                          ____________________________________________
                                                          ____________________________________________
                                                          (Print or type other person's name,
                                                          address and zip code)
</TABLE>


Date:  __________ Your Signature:  _____________________________________________

________________________________________________________________________________
    (Sign exactly as your name appears on the other side of this Security)

Signature Guaranteed


_____________________________________
Participant in a Recognized Signature
Guarantee Medallion Program


By: _________________________________
         Authorized Signatory


                                       10
<PAGE>
             SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY

Initial Principal Amount at Maturity of Global Security: __________($_________).

<TABLE>
<CAPTION>
          Date             Amount of Increase    Amount of Decrease in    Principal Amount at        Notation by
                           in Principal Amount    Principal Amount at     Maturity of Global        Registrar or
                             at Maturity of        Maturity of Global       Security After       Security Custodian
                             Global Security            Security         Increase or Decrease
-------------------------------------------------------------------------------------------------------------------
<S>                        <C>                   <C>                     <C>                     <C>
-------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

-------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       11
<PAGE>
                                   EXHIBIT A-2

                         [Form of Certificated Security]

THIS SECURITY IS ISSUED WITH AN INDETERMINATE AMOUNT OF ORIGINAL ISSUE DISCOUNT
AND WILL BE SUBJECT TO THE REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT
INSTRUMENTS FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. AS REQUIRED UNDER
APPLICABLE TREASURY REGULATIONS, THE COMPANY HAS SET FORTH THE "COMPARABLE
YIELD" IN SECTION 4.6 OF THE INDENTURE PURSUANT TO WHICH THIS SECURITY IS BEING
ISSUED.

THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS SECURITY
HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF CALPINE CORPORATION THAT
THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1)TO A PERSON
WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT
OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (3) TO AN
INSTITUTIONAL INVESTOR THAT IS AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND ANY
RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY
THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS SECURITY AND ANY SUCH
SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR INTERPRETATION
THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED
SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY AND SUCH SHARES SHALL BE
DEEMED BY THE ACCEPTANCE OF THIS SECURITY AND ANY SUCH SHARES TO HAVE AGREED TO
ANY SUCH AMENDMENT OR SUPPLEMENT.
<PAGE>
The foregoing legend may be removed from this Security on satisfaction of the
conditions specified in the indenture.



                                       2
<PAGE>
                               CALPINE CORPORATION

              Zero-Coupon Convertible Debenture Due April 30, 2021

No.                                    CUSIP:

Issue Date:  April 30, 2001

Issue Price: $1,000

                  CALPINE CORPORATION, a Delaware corporation, promises to pay
to _________ or registered assigns, the Principal Amount at Maturity of
_________ ($__________) on April 30, 2021.

                  This Security shall not bear interest except as specified on
the other side of this Security. This Security is convertible as specified on
the other side of this Security.

                  Additional provisions of this Security are set forth on the
other side of this Security.

<TABLE>
<S>                                       <C>
Dated:                                    CALPINE CORPORATION


                                          By: __________________________________
                                          Title: _______________________________
</TABLE>

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

WILMINGTON TRUST COMPANY, as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned Indenture.

By  __________________________________
           Authorized Signatory

Dated:


                                       3
<PAGE>
                   [FORM OF REVERSE SIDE IS IDENTICAL TO A-1]
<PAGE>
                                   EXHIBIT B-1

                               CALPINE CORPORATION

              Zero-Coupon Convertible Debenture Due April 30, 2021

                              Transfer Certificate

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

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

                  [_]      The transfer of the Surrendered Securities complies
                           with Rule 144A under the U.S. Securities Act of 1933,
                           as amended (the "Securities Act"); or

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

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

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

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

DATE:                       __________________________________

                                        Signature(s)

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



_____________________________________
Participant in a Recognized Signature

Guarantee Medallion Program

By: _____________________________
             Authorized Signatory



                                       2
<PAGE>
                                    EXHIBIT C

                           Projected Payment Schedule





                                       3