Opinion 11.22.05

Vice Chancellor Strine

Introduction +

Background I

• The Notes I.A.
• Designated Assets I.B.
• Use of the Rosetta Proceeds I.C.

Analysis II.

• Calpines Use Of The Rosetta Proceeds To Acquire Already-Extracted Natural Gas For Burning In Its Power Plants Did Not Involve The Purchase Of Designated Assets II.A.
• The Parol Evidence Does Not Support Calpines Reading of the Exclusion II.B.

Remedy for Calpines Improper Use of Proceeds III.

• First Lien Trustee Lacks Standing To Request A Remedy III.A.
• Second Lien Trustees Tardiness Warrants Deferral of the Restorative Remedy Determination III.B.

Indemnification Rights IV.

Conclusion V.