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Exhibit 5.1
September 19, 2001
Calpine Corporation
50 West San Fernando Street
San Jose, CA 95113
Calpine Canada Energy Finance ULC
Suite 800, Purdy's Wharf, Tower 1
1959 Upper Water Street
P.O. Box 997
Halifax, Nova Scotia B3J 3N2
Calpine Canada Energy Finance II ULC
Suite 800, Purdy's Wharf, Tower 1
1959 Upper Water Street
P.O. Box 997
Halifax, Nova Scotia B3J 3N2
Ladies and Gentlemen:
We are acting as counsel to Calpine Corporation, a Delaware
corporation (the "Company"), Calpine Canada Energy Finance ULC, an unlimited
liability company organized under the laws of Nova Scotia, Canada ("Energy
Finance"), and Calpine Canada Energy Finance II ULC, an unlimited liability
company organized under the laws of Nova Scotia, Canada ("Energy Finance II"),
in connection with the shelf registration under the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to the Registration Statement on Form
S-3 (File No. 333-67446) initially filed with the Securities and Exchange
Commission (the "Commission") on August 14, 2001 and amended on September 19,
2001 (such Registration Statement, which includes, pursuant to Rule 429 under
the Securities Act, $275,000,000 of unsold common stock, preferred stock and
debt securities of the Company registered on Registration Statement No.
333-40652 previously filed by the Company on Form S-3 and declared effective on
August 3, 2000 and $1,000,000,000 of unsold common stock, preferred stock and
debt securities of the Company and debt securities of Energy Finance guaranteed
by the Company registered on Registration Statement No. 333-57338 previously
filed by the Company and Energy Finance on Form S-3 and declared effective on
April 19, 2001, as the same may be amended or supplemented from time to time, is
herein referred to as the "Registration Statement") with respect to (i) the
Company's common stock, par value $.001 per share (the "Common Securities"),
preferred stock, par value $.001 per share (the "Preferred Securities"), and
unsecured debt securities (the "Debt Securities"), (ii) unsecured debt
securities of Energy Finance (the "Energy Finance Debt Securities") fully and
unconditionally guaranteed by the Company, (iii) unsecured debt securities of
Energy Finance II (the "Energy Finance II Debt Securities") fully and
unconditionally guaranteed by the Company and (iv) the associated
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guarantees issued by the Company with respect to the Energy Finance Debt
Securities (the "Energy Finance Guarantees") and the Energy Finance II Debt
Securities (the "Energy Finance II Guarantees" and, together with the Energy
Finance Guarantees, the "Guarantees"). The Debt Securities are to be issued
pursuant to an indenture (the "Indenture" and, together with the Energy Finance
Indenture, the "Subsidiary Indentures"), dated as of August 10, 2000, between
the Company and Wilmington Trust Company, as Trustee (the "Trustee"), which is
incorporated by reference as an exhibit to the Registration Statement. The
Energy Finance Debt Securities are to be issued pursuant to an indenture (the
"Energy Finance Indenture"), dated as of April 25, 2001, between Energy Finance
and the Trustee, which is incorporated by reference as an exhibit to the
Registration Statement. The Energy Finance II Debt Securities are to be issued
pursuant to an indenture (the "Energy Finance II Indenture" and, together with
the Energy Finance I Indenture, the "Subsidiary Indentures") in the form set
forth as an exhibit to Amendment No.1 to the Registration Statement, to be
entered into by Energy Finance II and the Trustee. The Energy Finance Guarantees
are to be issued by the Company pursuant to a Guarantee Agreement (the "Energy
Finance Guarantee Agreement"), dated as of April 25, 2001, between the Company
and the Trustee, which is incorporated by reference as an exhibit to the
Registration Statement. The Energy Finance II Guarantees are to be issued by the
Company pursuant to a Guarantee Agreement (the "Energy Finance II Guarantee
Agreement" and, together with the Energy Finance Guarantee Agreement, the
"Guarantee Agreements") in the form set forth as an exhibit to the Registration
Statement, to be entered into by the Company and the Trustee.
We have reviewed such corporate records, certificates and other
documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion. We have assumed that each of the
parties (other than the Company) has duly authorized, executed and delivered the
documents to which it is a party. We have further assumed that each of Energy
Finance and Energy Finance II is an unlimited liability company duly organized,
validly existing and in good standing under the laws of the Province of Nova
Scotia and has all requisite power, authority and legal right to execute,
deliver and perform the applicable Subsidiary Indenture and Energy Finance Debt
Securities or Energy Finance II Debt Securities, as applicable, and that,
insofar as the law of the Province of Nova Scotia is concerned, each of the
Subsidiary Indentures, the Energy Finance Debt Securities and the Energy Finance
II Debt Securities constitutes the valid and binding obligation of Energy
Finance or Energy Finance II, as applicable, enforceable in accordance with its
terms.
We have relied as to certain matters on information obtained from
public officials, officers of the Company, Energy Finance and Energy Finance II
and other sources believed by us to be responsible.
Based upon the foregoing, and subject to the qualifications set
forth below, we are of the opinion that:
(1) The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware.
(2) When, as and if: (i) the Registration Statement shall have become
effective pursuant to the Securities Act, (ii) the appropriate corporate
action has been taken by the Company to authorize the issuance of the
Common Securities and fix or otherwise determine the consideration to be
received for such Common Securities, (iii) any legally required
consents, approvals, authorizations and other orders of the Commission
and other regulatory authorities are obtained, (iv) such Common
Securities with terms so fixed
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shall have been duly sold, issued and delivered by the Company against
payment therefor in accordance with such corporate action and as
contemplated by the Registration Statement and assuming compliance with
the Securities Act, and (v) certificates evidencing shares of the Common
Securities have been duly executed by the duly authorized officers of
the Company in accordance with applicable law, then, upon the happening
of such events, such Common Securities will be validly issued, fully
paid and nonassessable.
(3) When, as and if: (i) the Registration Statement shall have become
effective pursuant to the provisions of the Securities Act, (ii)
appropriate corporate action has been taken by the Company to authorize
the issuance of Preferred Securities, to fix the terms thereof and to
authorize the execution and filing of a Certificate of Designations
relating thereto with the Secretary of State of the State of Delaware,
(iii) such Certificate of Designations shall have been executed by duly
authorized officers of the Company and so filed by the Company, all in
accordance with the laws of the State of Delaware, (iv) any legally
required consents, approvals, authorizations and other orders of the
Commission and any other regulatory authorities are obtained, (v) such
Preferred Securities with terms so fixed shall have been duly sold,
issued and delivered by the Company against payment therefor in
accordance with such corporate action and as contemplated by the
Registration Statement and assuming compliance with the Securities Act,
and (vi) certificates evidencing shares of Preferred Securities have
been duly executed by the duly authorized officers of the Company in
accordance with applicable law, then, upon the happening of such events,
such Preferred Securities will be validly issued, fully paid and
nonassessable.
(4) When, as and if: (i) the Registration Statement shall have become
effective pursuant to the provisions of the Securities Act, (ii) the
appropriate corporate action has been taken by the Company to authorize
the form, terms, execution and delivery of the Indenture and the terms
of any series of Debt Securities, (iii) such series of Debt Securities
shall have been sold and issued in substantially the form and containing
the terms described in the Indenture and such corporate action and as
contemplated by the Registration Statement and assuming compliance with
the Securities Act, (iv) any legally required consents, approvals,
authorizations and other orders of the Commission and any other
regulatory authorities with respect to such series of Debt Securities
are obtained and (v) certificates evidencing such series of Debt
Securities have been authenticated by the Trustee, then, upon the
happening of such events, such series of Debt Securities, when issued,
will be binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(5) When, as and if: (i) the Registration Statement shall have become
effective pursuant to the provisions of the Securities Act, (ii) the
appropriate corporate action has been taken by Energy Finance to
authorize the form, terms, execution and delivery of the Energy Finance
Indenture and the terms of any series of Energy Finance Debt Securities,
(iii) such series of Energy Finance Debt Securities shall have been sold
and issued in substantially the form and containing the terms described
in the Energy Finance Indenture and such corporate action and as
contemplated by the Registration Statement and assuming compliance with
the Securities Act, (iv) any legally required consents, approvals,
authorizations and other orders of the Commission and any other
regulatory
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authorities with respect to such series of Energy Finance Debt
Securities are obtained and (v) certificates evidencing such series of
Energy Finance Debt Securities have been duly authenticated by the
Trustee, then, upon the happening of such events, such series of Energy
Finance Debt Securities, when issued, will be valid and binding
obligations of Energy Finance, enforceable against Energy Finance in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles.
(6) When, as and if: (i) the Registration Statement shall have become
effective pursuant to the provisions of the Securities Act, (ii) the
appropriate corporate action has been taken by Energy Finance II to
authorize the form, terms, execution and delivery of the Energy Finance
II Indenture and the terms of any series of Energy Finance II Debt
Securities, (iii) such series of Energy Finance II Debt Securities shall
have been sold and issued in substantially the form and containing the
terms described in the Energy Finance II Indenture and such corporate
action and as contemplated by the Registration Statement and assuming
compliance with the Securities Act, (iv) any legally required consents,
approvals, authorizations and other orders of the Commission and any
other regulatory authorities with respect to such series of Energy
Finance II Debt Securities are obtained and (v) certificates evidencing
such series of Energy Finance II Debt Securities have been duly
authenticated by the Trustee, then, upon the happening of such events,
such series of Energy Finance II Debt Securities, when issued, will be
valid and binding obligations of Energy Finance II, enforceable against
Energy Finance II in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(7) When, as and if: (i) the Registration Statement shall have become
effective pursuant to the provisions of the Securities Act, (ii) the
appropriate corporate action has been taken by the Company to authorize
the form, terms, execution and delivery of the Guarantee Agreements and
the terms of the Guarantees, (iii) the Guarantees shall have been issued
in substantially the form and containing the terms described in the
Guarantee Agreements and such corporate action and as contemplated by
the Registration Statement and assuming compliance with the Securities
Act, and (iv) any legally required consents, approvals, authorizations
and other orders of the Commission and any other regulatory authorities
with respect to the Guarantees are obtained, then, upon the happening of
such events, the Guarantees, when issued, will be valid and binding
obligations of the Company in accordance with their respective terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
The foregoing opinion is subject to the qualifications that we
express no opinion as to (i) waivers of defenses or statutory or constitutional
rights or waivers of unmatured claims or rights, (ii) rights to indemnification,
contribution or exculpation to the extent that they purport to indemnify any
party against, or release or limit any party's liability for, its own breach or
failure to comply with statutory obligations, or to the extent such provisions
are contrary to public policy, or (iii) rights to collection of liquidated
damages or penalties.
We are members of the bar of the State of New York. We do not
purport to be experts in, and do not express any opinion on, any laws other than
the law of the State of New
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York, the Delaware General Corporation Law and the Federal law of the United
States of America.
We hereby consent to the filing of this opinion as Exhibit 5.1 to
the Registration Statement and to the reference to our firm under the heading
"Legal Matters" in the Prospectus contained in the Registration Statement. In
giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ COVINGTON & BURLING