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[Brobeck, Phleger & Harrison LLP Letterhead]
EXHIBIT 8.1
October 25, 1999
Calpine Corporation
Calpine Capital Trust
50 West San Fernando Street
San Jose, CA 95113
Ladies and Gentlemen:
We have acted as counsel to Calpine Corporation (the "Company")
and Calpine Capital Trust (the "Trust") in connection with the issuance of (i)
the Convertible Subordinated Debentures due 2029 (the "Subordinated Debentures")
of the Company pursuant to the terms of an indenture between the Company and The
Bank of New York (the "Indenture"); and (ii) the Remarketable Term Income
Deferrable Equity Securities (the "HIGH TIDES") to be issued by the Trust. The
Subordinated Debentures and the HIGH TIDES are described in the registration
statement on Form S-3 (Registration No. 333-87427) filed by the Company and the
Trust with the Securities and Exchange Commission on September 20, 1999 (as
amended, the "Registration Statement"). (Capitalized terms used herein that are
not otherwise defined herein have the meaning assigned to such terms in the
Registration Statement.)
In rendering the opinion set forth below, we have examined
copies, certified or otherwise identified to our satisfaction, of the following
executed documents and are relying upon the truth and accuracy of the
statements, covenants, representations and warranties set forth therein:
1. The Registration Statement;
2. The Indenture;
3. The Subordinated Debentures;
4. The Amended and Restated Declaration of Trust among the
Company, The Bank of New York, Peter Cartwright, Ann B.
Curtis and Thomas R. Mason (the "Declaration");
5. The HIGH TIDES;
6. The Remarketing Agreement among the Company, the Trust,
The Bank of New York, Peter Cartwright, Ann B. Curtis,
Thomas R. Mason and Credit Suisse First Boston Corporation
(the "Remarketing Agreement");
7. The Guarantee Agreement, executed and delivered by the
Company and The Bank of New York for the benefit of the
holders of the HIGH TIDES (the "Preferred Securities
Guarantee Agreement");
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8. The Common Securities Guarantee Agreement, executed and
delivered by the Company for the benefit of the holders of
the Common Securities (the "Common Securities Guarantee
Agreement");
9. Certain statements and representations contained in the
Company's Representation Certificate attached hereto; and
10. Such other agreements and documents as we have considered
necessary or appropriate for the purpose of rendering the
opinion set forth below.
In addition, we have assumed that (i) each of the Indenture, the
Subordinated Debentures, the Declaration, the HIGH TIDES, the Remarketing
Agreement, the Preferred Securities Guarantee Agreement and the Common
Securities Guarantee Agreement has been validly executed, will be binding and
enforceable in accordance with its terms and will not be amended in any material
respect; and (ii) the Trust will at all times be operated in accordance with the
terms of the Declaration.
Based on and subject to the foregoing, we are of the opinion
that:
(1) the Trust will not be classified as an association taxable
as a corporation for United States federal income tax
purposes and, instead, under Subpart E, Part I of
Subchapter J of the Internal Revenue Code of 1986, as
amended (the "Code"), will be treated as a grantor trust,
and the beneficial owners of the HIGH TIDES will be
treated as owning undivided pro rata interests in the
income and corpus of the Trust;
(2) the Subordinated Debentures will be classified for United
States federal income tax purposes as indebtedness of
Calpine; and
(3) the statements of law and legal conclusions set forth in
the Prospectus constituting part of the Registration
Statement under the caption "Certain United States Federal
Income Tax Consequences" have been reviewed by us and were
accurate in all material respects.
We express no opinion as to other tax issues affecting the
holders of the HIGH TIDES or the other parties to the transactions described in
the Registration Statement, nor does our opinion address state, local or foreign
tax consequences that may result from such transactions.
Our opinion represents only our best judgment regarding the
application of United States federal income tax laws under the Code, existing
judicial decisions, administrative regulations and published rulings and
procedures. We note that there is no authority directly on point dealing with
securities such as the Subordinated Debentures or the HIGH TIDES or transactions
of the type described herein. Our opinion is not binding upon the Internal
Revenue Service or the courts, and there is no assurance that the Internal
Revenue Service will not
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successfully assert contrary positions. Furthermore, no assurance can be given
that future legislation, judicial decisions or administrative changes,
applicable either on a prospective or retroactive basis, might not materially
alter our opinion.
We consent to the use of this opinion for filing as an exhibit to
the Registration Statement and further consent to all references to us in the
Registration Statement. Subject to the foregoing sentence, this opinion is given
as of the date hereof solely for your benefit and may not be relied upon,
circulated, quoted or otherwise referred to for any purpose without our prior
written consent.
Respectfully,
/s/ Brobeck, Phleger & Harrison LLP