Document:

<PAGE>   1
                                                                     EXHIBIT 4.2
                                                                          PAGE 1

                               STATE OF DELAWARE

                        OFFICE OF THE SECRETARY OF STATE

                                   ----------

         I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED
CERTIFICATE OF "CALPINE CAPITAL TRUST III", FILED IN THIS OFFICE ON THE
NINETEENTH DAY OF JULY, A.D. 2000, AT 8:30 O'CLOCK A.M.

                                        /s/ EDWARD J. FREEL
                                       -----------------------------------------
                                       Edward J. Freel, Secretary of State
                          [SEAL]
3252483 8100                           AUTHENTICATION:  0569440

001363891                                        DATE:  07-20-00
<PAGE>   2
                              AMENDED AND RESTATED
                              CERTIFICATE OF TRUST
                                       OF
                            CALPINE CAPITAL TRUST III

         This Amended and Restated Certificate of Trust of Calpine Capital Trust
III (the "Trust"), dated as of July 19, 2000, is being duly executed and filed
by the undersigned, as trustees of the Trust, to amend and restate the
Certificate of Trust of the Trust, which was filed with the Secretary of State
of the State of Delaware on June 28, 2000, under the Delaware Business Trust Act
(12 Del. C. Section 3801, et seq.) (the "Act").

         The original Certificate of Trust is hereby amended and restated in its
entirety, pursuant to Section 3810(c)(1) of the Act, to read as follows:

         1.       Name. The name of the business trust formed hereby is Calpine
                  Capital Trust III.

         2.       Delaware Trustee. The name and business address of the trustee
                  of the Trust with its principal place of business in the State
                  of Delaware are Wilmington Trust Company, 1100 North Market
                  Street, Wilmington, Delaware 19890-0001, Attention: Corporate
                  Trust Administration.

         3.       Effective Date. This Certificate of Trust shall be effective
                  upon the date and time of filing.

         4.       Counterparts. This Certificate of Trust may be executed in one
                  or more counterparts.

                            [SIGNATURE PAGES FOLLOW]

                                                         STATE OF DELAWARE
                                                         SECRETARY OF STATE
                                                      DIVISION OF CORPORATIONS
                                                      FILED 08:30 AM 07/19/2000
                                                         001363891 -- 3252483
<PAGE>   3
         IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Trust in accordance with Section 3811(a)(2) of the Act.

                                        /s/ PETER CARTWRIGHT
                                       -----------------------------------------
                                       Peter Cartwright
                                       Administrative Trustee

                                        /s/ ANN B. CURTIS
                                       -----------------------------------------
                                       Ann B. Curtis
                                       Administrative Trustee

                                       -----------------------------------------
                                       Thomas R. Mason
                                       Administrative Trustee

                                       2
<PAGE>   4
         IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Trust in accordance with Section 3811(a)(2) of the Act.

                                       -----------------------------------------
                                       Peter Cartwright
                                       Administrative Trustee

                                       -----------------------------------------
                                       Ann B. Curtis
                                       Administrative Trustee

                                        /s/ THOMAS R. MASON
                                       -----------------------------------------
                                       Thomas R. Mason
                                       Administrative Trustee

                                       2
<PAGE>   5
                                       WILMINGTON TRUST COMPANY, as Delaware
                                       Trustee

                                       By: /s/ DENISE M. GERAN
                                           -------------------------------------
                                           Name: Denise M. Geran
                                           Senior Financial Services Officer
                                           Authorized Signatory

                                       WILMINGTON TRUST COMPANY, as Property
                                       Trustee

                                       By: /s/ DENISE M. GERAN
                                           -------------------------------------
                                           Name: Denise M. Geran
                                           Senior Financial Services Officer
                                           Authorized Signatory

                                       3<PAGE>   1
                                                                     EXHIBIT 4.3

                        ================================

                              DECLARATION OF TRUST

                            CALPINE CAPITAL TRUST III

                            Dated as of June 28, 2000

                        ================================
<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                         Page
                                                                         ----
<S>                                                                      <C>
                                   ARTICLE I
                                   DEFINITIONS

SECTION 1.1     Definitions.............................................  1

                                   ARTICLE II
                                  ORGANIZATION

SECTION 2.1   Name......................................................  4
SECTION 2.2   Office....................................................  4
SECTION 2.3   Purpose...................................................  4
SECTION 2.4   Authority.................................................  5
SECTION 2.5   Title to Property of the Trust............................  5
SECTION 2.6   Powers of the Trustees....................................  5
SECTION 2.7   Filing of Certificate of Trust............................  7
SECTION 2.8   Duration of Trust.........................................  7
SECTION 2.9   Responsibilities of the Depositor.........................  7
SECTION 2.10 Declaration Binding on Securities Holders..................  8

                                  ARTICLE III
                                    TRUSTEES

SECTION 3.1   Trustees..................................................  9
SECTION 3.2   Administrative Trustees...................................  9
SECTION 3.3   Delaware Trustee..........................................  9
SECTION 3.4   Property Trustee.......................................... 10
SECTION 3.5   Not Responsible for Recitals or Sufficiency of
              Declaration .............................................  10

                                   ARTICLE IV
                           LIMITATION OF LIABILITY OF
                    HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

SECTION 4.1   Exculpation..............................................  11
SECTION 4.2   Fiduciary Duty............................................ 11
SECTION 4.3   Indemnification........................................... 12
SECTION 4.4   Outside Businesses........................................ 16
</TABLE>

                                       i
<PAGE>   3

<TABLE>
<S>                                                                      <C>
                                    ARTICLE V
                     AMENDMENTS, TERMINATION, MISCELLANEOUS

SECTION 5.1   Amendments................................................ 16
SECTION 5.2   Termination of Trust...................................... 16
SECTION 5.3   Governing Law............................................. 17
SECTION 5.4   Headings.................................................. 17
SECTION 5.5   Successors and Assigns.................................... 17
SECTION 5.6   Partial Enforceability.................................... 17
SECTION 5.7   Counterparts.............................................. 18
</TABLE>

                                       ii
<PAGE>   4
                              DECLARATION OF TRUST
                                       OF
                            Calpine Capital Trust III

                                  June 28, 2000

               DECLARATION OF TRUST ("Declaration") dated and effective as of
June 28, 2000 by the Trustees (as defined herein), the Depositor (as defined
herein), and by the holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to this Declaration;

               WHEREAS, the parties hereto desire to establish a trust (the
"Trust") pursuant to the Delaware Business Trust Act for the purpose of issuing
and selling from time to time certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer;

               NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the exclusive benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.

                                    ARTICLE I
                                   DEFINITIONS

SECTION 1.1  Definitions.

             Unless the context otherwise requires:

        (a)  Capitalized terms used in this Declaration but not defined in the
             preamble above have the respective meanings assigned to them in
             this Section 1.1;

        (b)  a term defined anywhere in this Declaration has the same meaning
             throughout;

<PAGE>   5
        (c)  all references to "the Declaration" or "this Declaration" are to
             this Declaration of Trust as modified, supplemented or amended from
             time to time;

        (d)  all references in this Declaration to Articles and Sections are to
             Articles and Sections of this Declaration unless otherwise
             specified; and

        (e)  a reference to the singular includes the plural and vice versa.

               "Administrative Trustee" means any Trustee other than the
Delaware Trustee and the Property Trustee (as hereinafter defined).

               "Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.

               "Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.

               "Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. Section 3801 et seq., as it may be amended from time to time,
or any successor legislation.

               "Commission" means the Securities and Exchange Commission.

               "Common Securities" means securities representing undivided
beneficial ownership interests in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.

               "Covered Person" means (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates and (b) any holder of Securities.

               "Debenture Issuer" means the Parent in its capacity as the issuer
of the Debentures under the Indenture.

               "Debentures" means the series of Debentures to be issued by the
Debenture Issuer and acquired by the Trust.

               "Debenture Trustee" means the trustee under the Indenture until a
successor is appointed thereunder, and thereafter means such successor trustee.

                                       2
<PAGE>   6

               "Delaware Trustee" has the meaning set forth in Section 3.3.

               "Depositor" means the Parent in its capacity as Depositor of the
Trust.

               "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.

               "Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).

               "Indemnified Person" means a Parent Indemnified Person or a
Fiduciary Indemnified Person.

               "Indenture" means the indenture to be entered into between the
Parent and the Debenture Trustee and any indenture supplemental thereto pursuant
to which the Debentures are to be issued.

               "Parent" means Calpine Corporation, a Delaware corporation or any
successor entity in a merger.

               "Parent Indemnified Person" means (a) any Administrative Trustee;
(b) any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any employee or agent of the Trust or its
Affiliates.

               "Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.

               "Preferred Securities" means securities representing undivided
beneficial ownership interests in the assets of the Trust with such terms as may
be set out in any amendment to this Declaration.

               "Property Trustee" has the meaning set forth in Section 3.4.

               "Securities" means the Common Securities and the Preferred
Securities.

               "Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.

                                       3
<PAGE>   7

               "Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.

                                   ARTICLE II
                                  ORGANIZATION

SECTION 2.1 Name.

               The Trust created by this Declaration is named "Calpine Capital
Trust III." The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Administrative Trustees.

SECTION 2.2  Office.

               The address of the principal office of the Trust is c/o Calpine
Corporation, 50 West San Fernando Street, San Jose, California 95113. At any
time, the Administrative Trustees may designate another principal office.

SECTION 2.3  Purpose.

               The Depositor hereby assigns, transfers, conveys and sets over to
the Trustees the sum of $10. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustees hereby declare that they will hold the trust estate
in trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under the Business Trust Act,
and that this Declaration constitute the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate of
trust in the office of the Secretary of State of the State of Delaware in the
form attached hereto. The Trust is hereby established by the Depositor and the
Trustees for the purposes of (i) issuing from time to time Preferred Securities
representing undivided beneficial interests in the assets of the Trust in
exchange for cash and investing the proceeds thereof in Debentures, (ii) issuing
and selling from time to time Common Securities to the Depositor representing
undivided beneficial interests in the assets of the Trust in exchange for cash
and investing the proceeds thereof in additional Debentures and (iii) engaging
in such

                                       4
<PAGE>   8
other activities as are necessary, convenient or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust.

               Concurrent with the first issuance of any Securities by the
Trust, the Depositor and the Trustees intend to enter into an amended and
restated Declaration of Trust, satisfactory to each such party to provide for
the contemplated operation of the Trust created hereby and the issuances of the
Preferred Securities and the Common Securities referred to therein. Prior to the
execution and delivery of such amended and restated Declaration of Trust, the
Trustees shall not have any duty or obligation hereunder or with respect to the
trust estate, except as otherwise required by applicable law or as may be
necessary to obtain, prior to such execution and delivery, any licenses,
consents or approvals required by applicable law or otherwise.

SECTION 2.4  Authority.

               Subject to the limitations provided in this Declaration, the
Administrative Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Administrative Trustees in
accordance with their powers shall constitute the act of and serve to bind the
Trust. In dealing with the Administrative Trustees acting on behalf of the
Trust, no Person shall be required to inquire into the authority of the
Administrative Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Administrative
Trustees as set forth in this Declaration.

SECTION 2.5 Title to Property of the Trust.

               Subject to Section 2.6(c), legal title to all assets of the Trust
shall be vested in the Trust.

SECTION 2.6 Powers of the Trustees.

               The Administrative Trustees shall have the exclusive power and
authority to cause the Trust to engage in the following activities:

               (a) to issue and sell from time to time the Preferred Securities
and the Common Securities in accordance with this Declaration and, provided
however, that there shall be no interests in the Trust other than the
Securities;

                                       5
<PAGE>   9

               (b) in connection with any issuances and sales of the Preferred
Securities to:

                      (i) execute and file with the Commission a shelf
               registration statement on Form S-3 prepared by the Depositor (the
               "Registration Statement"), including any amendments thereto in
               relation to the registration of the Preferred Securities under
               the Securities Act;

                      (ii) execute and file with the Commission a registration
               statement on Form 8-A, including any amendments thereto, prepared
               by the Depositor relating to the registration of any series of
               the Preferred Securities under Section 12(b) or 12(g) of the
               Exchange Act;

                      (iii) execute and file any documents prepared by the
               Depositor, or take any acts as determined by the Depositor to be
               necessary in order to qualify or register all or part of any
               series of the Preferred Securities in any state or foreign
               jurisdiction in which the Depositor has determined to qualify or
               register such Preferred Securities for sale;

                      (iv) execute and file on behalf of the Trust, with the New
               York Stock Exchange or any other national stock exchange or the
               Nasdaq National Market for listing upon notice of issuance of any
               Preferred Securities a listing application and all other
               applications, statements, certificates, agreements and other
               instruments as shall be necessary or desirable to cause any
               series of Preferred Securities to be listed on such exchange or
               national market, as the case may be;

                      (v) execute and deliver letters, documents, or instruments
               with The Depository Trust Company relating the Preferred
               Securities;

                      (vi) execute and enter into, on behalf of the Trust,
               underwriting agreements, pricing agreements providing for the
               sale of any series of Preferred Securities substantially in the
               form included as an exhibit to the Registration Statement at the
               time it becomes effective under the Securities Act, remarketing
               agreements relating to any remarketing of the Preferred
               Securities, and other related agreements providing for the sale
               and registration of the Preferred

                                       6
<PAGE>   10

               Securities; and

                      (vii) execute and file any agreement, certificate or other
               document which such Administrative Trustee deems necessary or
               appropriate in connection with any issuances and sales of the
               Preferred Securities;

               (c) to acquire Debentures with the proceeds of any sales of the
Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders of Common Securities;

               (d) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors, advisors and
consultants and provide for reasonable compensation for such services;

               (e) to incur expenses that are necessary or incidental to carry
out any of the purposes of this Declaration; and

               (f) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.

SECTION 2.7 Filing of Certificate of Trust.

               On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in the
form attached hereto as Exhibit A with the Secretary of State of the State of
Delaware.

SECTION 2.8 Duration of Trust.

               The Trust, absent dissolution pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.

SECTION 2.9 Responsibilities of the Depositor.

               In connection with any issuance and sale of any series of
Preferred Securities, the Depositor shall have the exclusive right and
responsibility to engage in the following activities:

                                       7
<PAGE>   11

               (a) to prepare for filing by the Trust with the Commission a
shelf registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;

               (b) to determine the states and foreign jurisdictions in which to
take appropriate action to qualify or register for sale all or part of any
series of the Preferred Securities and to do any and all such acts, other than
actions which must be taken by the Trust, and advise the Trust of actions it
must take, and prepare for execution and filing any documents to be executed and
filed by the Trust, as the Depositor deems necessary or advisable in order to
comply with the applicable laws of any such States and foreign jurisdictions;

               (c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing or quotation of any series of the Preferred Securities
(including at the time of any Remarketing);

               (d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of any series of
Preferred Securities under Section 12(b) or 12(g) of the Exchange Act, including
any amendments thereto; and

               (e) to negotiate the terms of pricing agreements, underwriting
agreements, remarketing agreements relating to any remarketing of any Preferred
Securities, and any other related agreements providing for the sale of the
Preferred Securities.

SECTION 2.10 Declaration Binding on Securities Holders.

               Every Person by virtue of having become a holder of a Security or
any interest therein in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by, this Declaration.

                                       8
<PAGE>   12
                                   ARTICLE III
                                    TRUSTEES

SECTION 3.1  Trustees.

               The number of Trustees initially shall be five (5), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Depositor. The Depositor is
entitled to appoint or remove without cause any Trustee at any time; provided,
however that the number of Trustees shall in no event be less than two (2);
provided further that one Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or that, if not a natural
person, is an entity that has its principal place of business in the State of
Delaware (the "Delaware Trustee"); provided further that there shall be at least
one trustee who is an employee or officer of, or is affiliated with the Parent
(an "Administrative Trustee").

SECTION 3.2 Administrative Trustees.

               The initial Administrative Trustees shall be:

                              Peter Cartwright
                              Ann B. Curtis
                              Thomas R. Mason

               (a) Except as expressly set forth in this Declaration, any power
of the Administrative Trustees may be exercised by, or with the consent of, any
one such Administrative Trustee;

               (b) Any Administrative Trustee is authorized to execute on behalf
of the Trust any documents that the Administrative Trustees have the power and
authority to cause the Trust to execute pursuant to Section 2.6; and

               (c) an Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents that the
Administrative Trustees have power and authority to cause the Trust to execute
pursuant to Section 2.6.

SECTION 3.3 Delaware Trustee.

               The initial Delaware Trustee shall be:

                                       9
<PAGE>   13

                      The Bank of New York (Delaware)

               Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor shall
the Delaware Trustee have any of the duties and responsibilities of the Trustees
(except as required by the Business Trust Act) described in this Declaration.
The Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
Notwithstanding anything herein to the contrary, the Delaware Trustee shall not
be liable for the acts or omissions to act of the Trust or of the Administrative
Trustees except such acts as the Delaware Trustee is expressly obligated or
authorized to undertake under this Declaration or the Business Trust Act and
except for the negligence or willful misconduct of the Delaware Trustee.

SECTION 3.4 Property Trustee.

               The Depositor hereby appoints The Bank of New York as the
Property Trustee, as the trustee meeting the requirements of an eligible trustee
of the Trust Indenture Act of 1939, as amended.

               Notwithstanding any other provision of this Declaration, the
Property Trustee shall not be entitled to exercise any of the powers, nor shall
the Property Trustee have any of the duties and responsibilities of the Trustees
(except as required by the Business Trust Act) described in this Declaration.
Notwithstanding anything herein to the contrary, the Property Trustee shall not
be liable for the acts or omissions to act of the Trust or of the Administrative
Trustees except such acts as the Property Trustee is expressly obligated or
authorized to undertake under this Declaration or the Business Trust Act and
except for the negligence or willful misconduct of the Property Trustee.

SECTION 3.5 Not Responsible for Recitals or Sufficiency of Declaration.

               The recitals contained in this Declaration shall be taken as the
statements of the Depositor, and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration.

                                       10
<PAGE>   14
                                   ARTICLE IV
                           LIMITATION OF LIABILITY OF
                    HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

SECTION 4.1  Exculpation.

               (a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions; and

               (b) an Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which distributions to holders of Securities might properly be paid.

SECTION 4.2 Fiduciary Duty.

               (a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity, are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person;

               (b) unless otherwise expressly provided herein:

                      (i) whenever a conflict of interest exists or arises
               between

                                       11
<PAGE>   15

               a Covered Person and an Indemnified Person; or

                      (ii) whenever this Declaration or any other agreement
               contemplated herein or therein provides that an Indemnified
               Person shall act in a manner that is, or provides terms that are,
               fair and reasonable to the Trust or any holder of Securities,

the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise; and

               (c) whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:

                      (i) in its "discretion" or under a grant of similar
               authority, the Indemnified Person shall be entitled to consider
               such interests and factors as it desires, including its own
               interests, and shall have no duty or obligation to give any
               consideration to any interest of or factors affecting the Trust
               or any other Person; or

                      (ii) in its "good faith" or under another express
               standard, the Indemnified Person shall act under such express
               standard and shall not be subject to any other or different
               standard imposed by this Declaration or by applicable law.

SECTION 4.3  Indemnification.

               (a) (i) The Debenture Issuer shall indemnify, to the full extent
        permitted by law, any Parent Indemnified Person who was or is a party or
        is threatened to be made a party to any threatened, pending or completed
        action, suit or proceeding, whether civil, criminal, administrative or
        investigative (other than an action by or in the right of the Trust) by
        reason of the fact that he is or was a Parent Indemnified Person against
        expenses (including attorneys' fees), judgments, fines and amounts paid
        in settlement actually and reasonably incurred by him in connection with
        such action, suit or proceeding

                                       12
<PAGE>   16

        if he acted in good faith and in a manner he reasonably believed to be
        in or not opposed to the best interests of the Trust, and, with respect
        to any criminal action or proceeding, had no reasonable cause to believe
        his conduct was unlawful. The termination of any action, suit or
        proceeding by judgment, order, settlement, conviction, or upon a plea of
        nolo contendere or its equivalent, shall not, of itself, create a
        presumption that the Parent Indemnified Person did not act in good faith
        and in a manner which he reasonably believed to be in or not opposed to
        the best interests of the Trust, and, with respect to any criminal
        action or proceeding, had reasonable cause to believe that his conduct
        was unlawful.

                      (ii) The Debenture Issuer shall indemnify, to the full
        extent permitted by law, any Parent Indemnified Person who was or is a
        party or is threatened to be made a party to any threatened, pending or
        completed action or suit by or in the right of the Trust to procure a
        judgment in its favor by reason of the fact that he is or was a Parent
        Indemnified Person against expenses (including attorneys' fees) actually
        and reasonably incurred by him in connection with the defense or
        settlement of such action or suit if he acted in good faith and in a
        manner he reasonably believed to be in or not opposed to the best
        interests of the Trust and except that no such indemnification shall be
        made in respect of any claim, issue or matter as to which such Parent
        Indemnified Person shall have been adjudged to be liable to the Trust
        unless and only to the extent that the Court of Chancery of Delaware or
        the court in which such action or suit was brought shall determine upon
        application that, despite the adjudication of liability but in view of
        all the circumstances of the case, such person is fairly and reasonably
        entitled to indemnity for such expenses that such Court of Chancery or
        such other court shall deem proper.

                      (iii) To the extent that a Parent Indemnified Person shall
        be successful on the merits or otherwise (including dismissal of an
        action without prejudice or the settlement of an action without
        admission of liability) in defense of any action, suit or proceeding
        referred to in paragraphs (i) and (ii) of this Section 4.3(a), or in
        defense of any claim, issue or matter therein, he shall be indemnified,
        to the full extent permitted by law, against expenses (including
        attorneys' fees) actually and reasonably incurred by him in connection
        therewith.

                      (iv) Any indemnification under paragraphs (i) and (ii) of
        this Section 4.3(a) (unless ordered by a court) shall be made by the
        Debenture Issuer only as authorized in the specific case upon a
        determination that indemnification of the Parent Indemnified Person is
        proper in the circum-

                                       13
<PAGE>   17

        stances because he has met the applicable standard of conduct set forth
        in paragraphs (i) and (ii). Such determination shall be made (1) by the
        Administrative Trustees by a majority vote of a quorum consisting of
        such Administrative Trustees who were not parties to such action, suit
        or proceeding, (2) if such a quorum is not obtainable, or, even if
        obtainable, if a quorum of disinterested Administrative Trustees so
        directs, by independent legal counsel in a written opinion, or (3) by
        the holder(s) of the Common Securities of the Trust.

                      (v) Expenses (including attorneys' fees) incurred by a
        Parent Indemnified Person in defending a civil, criminal, administrative
        or investigative action, suit or proceeding referred to in paragraphs
        (i) and (ii) of this Section 4.3(a) shall be paid by the Debenture
        Issuer in advance of the final disposition of such action, suit or
        proceeding upon receipt of an undertaking by or on behalf of such Parent
        Indemnified Person to repay such amount if it shall ultimately be
        determined that he is not entitled to be indemnified by the Debenture
        Issuer as authorized in this Section 4.3(a). Notwithstanding the
        foregoing, no advance shall be made by the Debenture Issuer if a
        determination is reasonably and promptly made (i) by the Administrative
        Trustees by a majority vote of a quorum of disinterested Administrative
        Trustees, (ii) if such a quorum is not obtainable, or, even if
        obtainable, if a quorum of disinterested Administrative Trustees so
        directs, by independent legal counsel in a written opinion or (iii) the
        holder(s) of the Common Securities of the Trust, that, based upon the
        facts known to the Administrative Trustees, counsel or the holder(s) of
        the Common Securities of the Trust at the time such determination is
        made, such Parent Indemnified Person acted in bad faith or in a manner
        that such person did not believe to be in or not opposed to the best
        interests of the Trust, or, with respect to any criminal proceeding,
        that such Parent Indemnified Person believed or had reasonable cause to
        believe his conduct was unlawful. In no event shall any advance be made
        in instances where the Administrative Trustees, independent legal
        counsel or the holder(s) of the Common Securities of the Trust
        reasonably determine that such person deliberately breached his duty to
        the Trust or to the holder(s) of its Common Securities or Preferred
        Securities.

                      (vi) The indemnification and advancement of expenses
        provided by, or granted pursuant to, the other paragraphs of this
        Section 4.3(a) shall not be deemed exclusive of any other rights to
        which those seeking indemnification and advancement of expenses may be
        entitled under any agreement, vote of shareholders or disinterested
        directors of the Debenture Issuer or of the holder(s) of the Preferred
        Securities of the Trust or other-

                                       14
<PAGE>   18

        wise, both as to action in his official capacity and as to action in
        another capacity while holding such office. All rights to
        indemnification under this Section 4.3(a) shall be deemed to be provided
        by a contract between the Debenture Issuer and each Parent Indemnified
        Person who serves in such capacity at any time while this Section 4.3(a)
        is in effect. Any repeal or modification of this Section 4.3(a) shall
        not affect any rights or obligations then existing.

                      (vii) The Debenture Issuer or the Trust may purchase and
        maintain insurance on behalf of any person who is or was a Parent
        Indemnified Person against any liability asserted against him and
        incurred by him in any such capacity, or arising out of his status as
        such, whether or not the Debenture Issuer would have the power to
        indemnify him against such liability under the provisions of this
        Section 4.3(a).

                      (viii) For purposes of this Section 4.3(a), references to
        "the Trust" shall include, in addition to the resulting or surviving
        entity, any constituent entity (including any constituent of a
        constituent) absorbed in a consolidation or merger, so that any person
        who is or was a director, trustee, officer or employee of such
        constituent entity, or is or was serving at the request of such
        constituent entity as a director, trustee, officer, employee or agent of
        another entity, shall stand in the same position under the provisions of
        this Section 4.3(a) with respect to the resulting or surviving entity as
        he would have with respect to such constituent entity if its separate
        existence had continued.

                      (ix) The indemnification and advancement of expenses
        provided by, or granted pursuant to, this Section 4.3(a) shall, unless
        otherwise provided when authorized or ratified, continue as to a person
        who has ceased to be a Parent Indemnified Person and shall inure to the
        benefit of the heirs, executors and administrators of such a person.

               (b) The Debenture Issuer agrees to indemnify (i) the Delaware
        Trustee and the Property Trustee, (ii) any Affiliate of the Delaware
        Trustee or the Property Trustee, and (iii) any officers, directors,
        stockholders, members, partners, employees, representatives, nominees,
        custodians or agents of the Delaware Trustee or the Property Trustee
        (each of the Persons in (i) through (iii) being referred to as a
        "Fiduciary Indemnified Person") for, and to hold each Fiduciary
        Indemnified Person harmless against, any loss, liability or expense
        incurred without negligence or bad faith on its part, arising out of or
        in connection with the acceptance or administration of the trust or
        trusts

                                       15
<PAGE>   19

        hereunder, including the costs and expenses (including reasonable legal
        fees and expenses) of defending itself against, or investigating, any
        claim or liability in connection with the exercise or performance of any
        of its powers or duties hereunder. The provisions of this Section 4.3(b)
        shall survive the termination of this Declaration or the resignation or
        removal of the Delaware Trustee or Property Trustee.

SECTION 4.4 Outside Businesses.

               Any Covered Person, the Depositor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. None of any Covered Person, the Depositor,
the Delaware Trustee or the Property Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Depositor, the Delaware Trustee and the Property
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Covered Person, the Delaware Trustee and the Property
Trustee may engage or be interested in any financial or other transaction with
the Depositor or any Affiliate of the Depositor, or may act as depositary,
trustee or agent for, or may act on any committee or body of holders of,
securities or other obligations of the Depositor or its Affiliates.

                                    ARTICLE V
                     AMENDMENTS, TERMINATION, MISCELLANEOUS

SECTION 5.1 Amendments.

               At any time before the issue of any Securities, this Declaration
may be amended by, and only by, a written instrument executed by all of the
Administrative Trustees and the Depositor.

SECTION 5.2 Termination of Trust.

               (a) The Trust shall dissolve and be of no further force or
effect:

                                       16
<PAGE>   20

                      (i) upon the bankruptcy of the Depositor;

                      (ii) upon the filing of a certificate of dissolution or
               its equivalent with respect to the Depositor or the revocation of
               the Depositor's charter or of the Trust's certificate of trust;

                      (iii) upon the entry of a decree of judicial dissolution
               of the Depositor, or the Trust; and

                      (iv) before the issue of any Securities, with the consent
               of all of the Administrative Trustees and the Depositor.

               (b) As soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file, after satisfaction of
all liabilities of the Trust in accordance with applicable law, a certificate of
cancellation with the Secretary of State of the State of Delaware and the Trust
shall terminate.

SECTION 5.3 Governing Law.

               This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.

SECTION 5.4  Headings.

               Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.

SECTION 5.5 Successors and Assigns.

               Whenever in this Declaration any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Depositor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.

SECTION 5.6 Partial Enforceability.

                                       17
<PAGE>   21

               If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.

SECTION 5.7  Counterparts.

               This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.

                                       18
<PAGE>   22
               IN WITNESS WHEREOF, the undersigned have caused these presents to
be executed as of the day and year first above written.

                                            /s/ PETER CARTWRIGHT
                                            ------------------------------------
                                            Peter Cartwright
                                            Administrative Trustee

                                            /s/ ANN B. CURTIS
                                            ------------------------------------
                                            Ann B. Curtis
                                            Administrative Trustee

                                            /s/ THOMAS R. MASON
                                            ------------------------------------
                                            Thomas R. Mason
                                            Administrative Trustee

                                            THE BANK OF NEW YORK (DELAWARE), as
                                            Delaware Trustee

                                            By: /s/ WILLIAM T JARRE
                                               ---------------------------------
                                                Authorized Signatory

                                            THE BANK OF NEW YORK, as
                                            Property Trustee

                                            By: /s/ MICHELE RUSSO
                                               ---------------------------------
                                                Authorized Signatory

                                       19
<PAGE>   23
                                            CALPINE CORPORATION, as Depositor
                                            and Debenture Issuer

                                            By: /s/ ANN B. CURTIS
                                               ---------------------------------
                                            Name: Ann B. Curtis
                                            Title: Executive Vice President

                                       20

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}]]