Exhibit 10.2

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TRUST INDENTURE

BETWEEN

GULF COAST INDUSTRIAL DEVELOPMENT AUTHORITY

AND

WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE

DATED AS OF OCTOBER 1, 2006

$60,000,000

GULF COAST INDUSTRIAL DEVELOPMENT AUTHORITY

ENVIRONMENTAL FACILITIES REVENUE BONDS

(MICROGY HOLDINGS PROJECT) SERIES 2006

 

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TRUST INDENTURE

TABLE OF CONTENTS

 

PREAMBLE

      1 ARTICLE I DEFINITIONS

SECTION 1.1.

   Definitions    3 ARTICLE II THE BONDS

SECTION 2.1.

   Amount, Terms, and Issuance of Bonds    8

SECTION 2.2.

   Designation, Denominations, Maturity and Form    8

SECTION 2.3.

   Registered Bonds Required; Bond Registrar and Bond Register    9

SECTION 2.4.

   Transfer and Exchange    9

SECTION 2.5.

   Execution    10

SECTION 2.6.

   Authentication; Authenticating Agent    10

SECTION 2.7.

   Payment of Principal and Interest; Interest Rights Preserved    11

SECTION 2.8.

   Persons Deemed Owners    12

SECTION 2.9.

   Mutilated, Destroyed, Lost or Stolen Bonds    12

SECTION 2.10.

   Temporary Bonds    13

SECTION 2.11.

   Cancellation of Surrendered Bonds    13

SECTION 2.12.

   Limited Obligation    13

SECTION 2.13.

   Book Entry System    14

SECTION 2.14.

   Payments to Securities Depository    15

SECTION 2.15.

   CUSIP Numbers    15 ARTICLE III APPLICATION OF BOND PROCEEDS

SECTION 3.1

   Application of Original Bond Proceeds    16 ARTICLE IV DEBT SERVICE RESERVE
FUND

SECTION 4.1

   Creation of Debt Service Reserve Fund    17

SECTION 4.2

   Replenishment of Debt Service Reserve Fund    17 ARTICLE V CONSTRUCTION FUND

SECTION 5.1.

   Creation of Construction Fund    17

SECTION 5.2.

   Disbursements from Construction Fund    17

SECTION 5.3.

   Balance in Construction Fund    17

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SECTION 5.4.

   Acceleration of Bonds    17 ARTICLE VI BOND FUND

SECTION 6.1.

   Revenues to be Paid Over to the Trustee    18

SECTION 6.2.

   Bond Fund    18

SECTION 6.3.

   Revenues to Be Held for All Bondholders; Certain Exceptions    18

SECTION 6.4.

   Amounts Remaining in Bond Fund    18 ARTICLE VII [RESERVED] ARTICLE VIII
INVESTMENT OR DEPOSIT OF MONEYS

SECTION 8.1.

   Deposits    19

SECTION 8.2.

   Investment or Deposit of Bond Fund    19

SECTION 8.3.

   Investment of Moneys in the Construction Fund    19

SECTION 8.4.

   No Liability for Investments    20

SECTION 8.5.

   Covenants Regarding Rebate.    21 ARTICLE IX REDEMPTION OF BONDS

SECTION 9.1.

   Bonds Subject to Redemption    22

SECTION 9.2.

   Company Direction of Optional Redemption    24

SECTION 9.3.

   Selection of Bonds to be Called for Redemption; Partial Redemption    24

SECTION 9.4.

   Notice of Redemption    24 ARTICLE X COVENANTS OF THE ISSUER

SECTION 10.1.

   Payment of Principal of, Redemption premium, if any, and Interest on Bonds;
Appointment of Paying Agent    26

SECTION 10.2.

   Compliance with Laws    26

SECTION 10.3.

   Enforcement of Agreement; Prohibition Against Amendments of Agreement; Notice
of Default    27

SECTION 10.4.

   Further Assurances    27

SECTION 10.5.

   Administration Expenses    27

SECTION 10.6.

   Moneys to be Held in Trust    27

SECTION 10.7.

   Rights of Company Under Loan Agreement    27

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ARTICLE XI EVENTS OF DEFAULT AND REMEDIES

SECTION 11.1.

   Events of Default Defined    28

SECTION 11.2.

   Acceleration and Annulment Thereof    28

SECTION 11.3.

   Other Remedies    29

SECTION 11.4.

   Legal Proceedings by Trustee    29

SECTION 11.5.

   Discontinuance of Proceedings by Trustee    29

SECTION 11.6.

   Majority Holders May Direct Proceedings    29

SECTION 11.7.

   Limitations on Actions by Bondholders    30

SECTION 11.8.

   Trustee May Enforce Rights Without Possession of Bonds    30

SECTION 11.9.

   Remedies Not Exclusive    30

SECTION 11.10.

   Delays and Omissions Not to Impair Rights    30

SECTION 11.11.

   Application of Moneys in Event of Default    30

SECTION 11.12.

   Trustee and Bondholders Entitled to All Remedies Under the Act    31 ARTICLE
XII THE TRUSTEE

SECTION 12.1.

   Acceptance of Trust    32

SECTION 12.2.

   No Responsibility for Recitals, etc    32

SECTION 12.3.

   Trustee May Act Through Agents; Answerable Only for Willful Misconduct or
Negligence    32

SECTION 12.4.

   Compensation    32

SECTION 12.5.

   Notice of Default; Right to Investigate    33

SECTION 12.6.

   Obligation to Act    33

SECTION 12.7.

   Reliance    33

SECTION 12.8.

   Trustee May Deal in Bonds    33

SECTION 12.9.

   Resignation of Trustee    33

SECTION 12.10.

   Removal of Trustee    33

SECTION 12.11.

   Appointment of Successor Trustee    34

SECTION 12.12.

   Qualification of Successor    34

SECTION 12.13.

   Instruments of Succession    34

SECTION 12.14.

   Merger of Trustee    34

SECTION 12.15.

   Trustee Not Required to Expend or Risk Own Funds    34

SECTION 12.16.

   Right of Trustee to Pay Taxes and Other Charges    34

SECTION 12.17.

   Trust Estate may be Vested in Separate or Co-Trustee    35

SECTION 12.18.

   Reliance Upon Counsel    35

SECTION 12.19.

   No Implied Duties    35

SECTION 12.20.

   No Responsibility for Securities Laws    35

SECTION 12.21.

   No Responsibility for Yield Covenants    35

SECTION 12.22.

   No Responsibility for Filings    36 ARTICLE XIII THE PAYING AGENT

SECTION 13.1.

   The Paying Agent    36

SECTION 13.2.

   Notices    36

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ARTICLE XIV ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP

SECTION 14.1.

   Acts of Bondholders; Evidence of Ownership    37 ARTICLE XV AMENDMENTS AND
SUPPLEMENTS

SECTION 15.1.

   Amendments and Supplements Without Bondholders’ Consent    37

SECTION 15.2.

   Amendments With Bondholders’ Consent    38

SECTION 15.3.

   Amendment of Agreement    38

SECTION 15.4.

   Amendment of Guarantee    38

SECTION 15.5.

   Trustee Authorized to Join in Amendments and Supplements; Reliance on Counsel
   38

SECTION 15.6.

   Consent of Company    39 ARTICLE XVI DEFEASANCE

SECTION 16.1.

   Defeasance    39 ARTICLE XVII MISCELLANEOUS

SECTION 17.1.

   No Personal Recourse    40

SECTION 17.2.

   Deposit of Funds for Payment of Bonds    40

SECTION 17.3.

   No Rights Conferred on Others    40

SECTION 17.4.

   Severability    40

SECTION 17.5.

   Notices    40

SECTION 17.6.

   Successors and Assigns    42

SECTION 17.7.

   Headings for Convenience Only    42

SECTION 17.8.

   Counterparts    42

SECTION 17.9.

   Applicable Law    42

SECTION 17.10.

   Notice of Change    42

SECTION 17.11.

   Payments Due on non-Business Days    42

EXHIBIT A Form of Bond

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TRUST INDENTURE

This TRUST INDENTURE dated as of October 1, 2006, is by and between the GULF
COAST INDUSTRIAL DEVELOPMENT AUTHORITY, a nonstock, nonprofit industrial
development corporation existing under the laws of the State of Texas (herein
called the “Issuer”) including particularly the Development Corporation Act of
1979, as amended, Article 5190.6, V.A.T.C.S. (the “Act”), and WELLS FARGO BANK,
NATIONAL ASSOCIATION, a national banking association (in its capacity herein,
together with any successors in such capacity, called the “Trustee”),

WITNESSETH :

WHEREAS, pursuant to law, and particularly the Act, the Issuer is authorized to
acquire, construct, and improve certain solid waste disposal facilities and to
issue its revenue bonds for such purpose;

WHEREAS, a Loan Agreement, dated as of October 1, 2006 (the “Agreement”),
relating to the Bonds (hereinafter defined) which has been duly executed between
the Issuer and Microgy Holdings, LLC, a limited liability company organized and
existing under and by virtue of the laws of the State of Delaware (the
“Company”);

WHEREAS, the recitals and provisions of the Agreement are incorporated herein as
if set forth in their entirety, and the capitalized terms of this Indenture not
otherwise defined herein shall have the same meanings, and shall be defined, as
set forth in the Agreement and the Bond Resolution (hereinafter defined);

WHEREAS, pursuant to the Agreement, the Board of Directors of the Issuer duly
adopted a Resolution Authorizing Gulf Coast Industrial Development Authority
Environmental Facilities Revenue Bonds (Microgy Holdings, LLC Project) Series
2006; the execution of a Trust Indenture, a Loan Agreement, and an Bond Purchase
Agreement; approval of a Limited Offering Memorandum; and other matters in
connection therewith (together with any amendment or supplement to such
resolution as authorized therein, hereinafter called the “Bond Resolution”);

WHEREAS, the Bond Resolution authorized the issuance of Gulf Coast Industrial
Development Authority Environmental Facilities Revenue Bonds (Microgy Holdings
Project) Series 2006 (the “Bonds”) for the purpose of making a loan to the
Company to pay the costs of acquiring, constructing, and improving certain solid
waste disposal facilities described in Exhibit A to the Agreement;

WHEREAS, the Bonds, and the interest thereon, are and shall be payable from and
secured by a first and superior lien on and pledge of the payments designated as
“Loan Payments” to be made by the Company pursuant to the Agreement in amounts
sufficient to pay and redeem, and provide for the payment of the principal of,
premium, if any, and interest on the Bonds, when due, and the fees and expenses
of and other amounts due to the Trustee and any paying agent for the Bonds, all
as required by the Bond Resolution;

WHEREAS, pursuant to a Guarantee Agreement, dated as of October 1, 2006 (the
“Guarantee”‘) the Company, MST Production Ltd., MST GP, LLC, MST Estates, LLC,
Rio Leche Estates, L.L.C., Mission Biogas, L.L.C., and Hereford Biogas, L.L.C.
(the “Subsidiary Guarantors”) have, jointly and severally, unconditionally
guaranteed to the Trustee the payment, when due, of the principal of, redemption
premium, if any, and interest on the Bonds.

WHEREAS, the Trustee has agreed to accept the trusts herein created upon the
terms herein set forth; and

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WHEREAS, all other things necessary to make the Bonds, when issued, executed and
delivered by the Issuer and authenticated pursuant to this Indenture, the valid,
legal and binding obligations of the Issuer, and to constitute this Indenture a
valid pledge of the Revenues (as hereinafter defined) and other amounts pledged
hereunder as security for the payment of the principal of, redemption premium,
if any, and interest on the Bonds authenticated and delivered under this
Indenture, have been performed, and the creation, execution and delivery of this
Indenture and the creation, execution and issuance of the Bonds, subject to the
terms hereof, have in all respects been duly authorized;

NOW, THEREFORE, THIS INDENTURE WITNESSETH that to provide for the payment of
principal of, redemption premium, if any, and interest on all Bonds issued and
outstanding under this Indenture, and in order to secure the rights of the
Bondholders and the performance of the covenants contained in the Bonds, the
Agreement, and herein, the Issuer does hereby pledge, transfer and assign unto
the Trustee, its successors in the trust and its assigns forever (i) all of the
right, title and interest of the Issuer in and to the Revenues, (ii) the
Agreement and all right, title and interest of the Issuer under and pursuant to
the Agreement, insofar as they relate to all Bonds issued and outstanding under
this Indenture (except for the Unassigned Rights (as defined herein)),
including, without limitation, all of the right, title, and interest of the
Issuer in and to payments to be received under and pursuant to and subject to
the provisions of the Agreement, and (iii) all amounts on deposit in the Bond
Fund, the Construction Fund, the Debt Service Reserve Fund or other funds
created under this Indenture other than the Rebate Fund which are not pledged
hereunder and do not constitute security for the Bonds (collectively, the “Trust
Estate”); provided, however, that nothing in the Bonds or in this Indenture
shall be construed as pledging the general credit of the Issuer or the State of
Texas, nor shall this Indenture or the Bonds give rise to a pecuniary liability
of the Issuer.

TO HAVE AND TO HOLD all of the same hereby conveyed and assigned, or agreed or
intended so to be, to the Trustee and its successors in said trust and to it and
its assigns forever.

IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal
and proportionate benefit, security and protection of all holders and owners of
the Bonds issued under and secured by this Indenture without privilege,
preference, priority or distinction as to the lien or otherwise of any of the
Bonds over any of the other Bonds.

PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall well and
truly pay, or cause to be paid, the principal of, redemption premium, if any,
and interest on the Bonds due or to become due thereon, at the times and in the
manner mentioned in the Bonds, according to the true intent and meaning thereof,
and shall cause the payments to be made into the Bond Fund as required under
Article VI hereof, or shall provide, as permitted hereby, for the payment
thereof by depositing with the Trustee the entire amount due or to become due
thereon, and shall well and truly keep, perform and observe all the covenants
and conditions pursuant to the terms of this Indenture to be kept, performed and
observed by it, and shall pay or cause to be paid to the Trustee all sums of
money due or to become due in accordance with the terms and provisions hereof,
then upon such final payments this Indenture and the rights hereby granted shall
cease, terminate and be void; otherwise this Indenture to be and remain in full
force and effect.

THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all Bonds
issued and secured hereunder are to be issued, authenticated and delivered, and
all said Revenues and receipts hereby pledged and assigned are to be dealt with
and disposed of under, upon and subject to the terms, conditions, stipulations,
covenants, agreements, trusts, uses and purposes hereinafter expressed, and the
Issuer has agreed and covenanted, and does hereby agree and covenant, with the
Trustee and with the respective holders and owners, from time to time, of the
Bonds, as follows (provided that, in the performance of the agreements of the
Issuer herein contained, any obligation it may thereby incur for the payment of

 

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money shall not be a general debt on its part or a charge against its general
credit but shall be payable solely from the Trust Estate, including the
Revenues):

ARTICLE I

DEFINITIONS

SECTION 1.1. Definitions. Unless otherwise defined herein, all words and phrases
defined in the preamble hereto or in Article I of the Agreement shall have the
same meaning in this Indenture. In this Indenture and any indenture supplemental
hereto (except as otherwise expressly provided for or unless the context
otherwise requires) the singular includes the plural, the masculine includes the
feminine, and each of the following terms shall have the following meanings:

“Act” means the Development Corporation Act of 1979, Article 5190.6, Vernon’s
Texas Civil Statutes, as amended.

“Administration Expenses” means amounts payable pursuant to Sections 5.04 and
5.07 of the Agreement.

“Affiliate” of any Person means any other Person who, directly or indirectly,
controls or is controlled by or is under common control with such other Person.

“Agreement” means the Loan Agreement, dated as of October 1, 2006, between the
Company and the Issuer which relates to the Bonds, as amended from time to time.

“Approval Certificate” means the certificate of the President or Secretary of
the Issuer approving certain terms of the Bonds, which certificate is
incorporated by reference herein for all purposes.

“Authenticating Agent” means the Trustee and any agent so designated in and
appointed pursuant to Section 2.6 hereof.

“Authorized Company Representative” means the Company’s Chief Executive Officer,
its President, its Chief Financial Officer, its Treasurer, or any Assistant
Treasurer or persons at any time designated to act on behalf of the Company,
such designation in each case, to be evidenced by a certificate furnished to the
Issuer and the Trustee containing the specimen signature of such person or
persons and signed on behalf of the Company by its Chief Executive Officer, its
President, its Chief Financial Officer, its Treasurer, or any Assistant
Treasurer authorized to act on behalf of the Company. Such certificate may
designate an alternate or alternates.

“Authorized Denominations” means the denominations for the Bonds set forth in
Section 2.2 hereof.

“Bond” means any bond or bonds authenticated and delivered under this Indenture.

“Bond Counsel” means McCall, Parkhurst & Horton L.L.P. or such other firm of
attorneys of nationally recognized standing in the field of law relating to
municipal bond law and the excludability of interest on state or local bonds
from gross income of the owners of the Bonds for purposes of federal income
taxation, selected by the Issuer and acceptable to the Trustee and the Company.

 

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“Bond Fund” means the trust fund so designated which is established pursuant to
Section 6.2 hereof.

“Bond Owner,” “Bondowner,” “Owner,” “owner,” “Bondholder,” “bondholder, “
“holder,” “Registered Owner,” “registered owner,” or “owner of Bonds” means the
person listed on the Bond Register as the registered owner of any Bond.

“Bond Register” and “Bond Registrar” shall have the respective meanings
specified in Section 2.3 hereof.

“Business Day” or “business day” means any day other than (i) a Saturday or
Sunday or legal holiday or a day on which banking institutions in the City of
New York, New York or in the cities in which the Principal Offices of the
Trustee or the Paying Agent are located are authorized or required by law or
executive order to close or (ii) a day on which the New York Stock Exchange is
closed.

“Code” means the Internal Revenue Code of 1986, as amended, and the rulings and
regulations (including temporary and proposed regulations) promulgated
thereunder or, to the extent applicable, under the Internal Revenue Code of
1954, as amended.

“Collateral Trust Agreement” means the Collateral Trust Agreement, dated as of
October 1, 2006, among the Collateral Trustee, the Company, and the Subsidiary
Guarantors, as amended from time to time.

“Collateral Trustee” means Wells Fargo Bank, National Association, as collateral
trustee under the Collateral Trust Agreement, and any successor trustee or
co-trustee thereunder.

“Company” means Microgy Holdings, LLC, a Delaware limited liability company, and
its successors and assigns as permitted under the Agreement.

“Counsel” means an attorney at law or law firm (who may be counsel for the
Issuer or the Company).

“Debt Service Reserve Fund” means the fund by that name created and established
in Section 4.1 of this Indenture.

“Debt Service Reserve Requirement” means $5,151,500.

“Default” means any event which with the giving of notice or the lapse of time
or both would constitute an Event of Default.

“Division” means the Texas Economic Development and Tourism Office, an office
within the Offices of the Governor of the State and any successor to its
functions and duties.

“DTC” means The Depository Trust Company, New York, New York.

“DTC Letter of Representations” means the blanket letter of representations from
the Issuer to DTC.

“DTC Participant” means (i) any person for which, from time to time, DTC, or, in
the event that a successor Securities Depository to DTC is acting as such under
Section 2.13 hereof, such successor

 

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Securities Depository effectuates book-entry transfers and pledges of securities
pursuant to the book-entry system referred to in Section 2.13 hereof or (ii) any
securities broker or dealer, bank, trust company or other person that clears
through or maintains a custodial relationship with the person referred to in
(i).

“Electronic Notice” means notice transmitted through a time-sharing terminal
(promptly confirmed in writing) or facsimile machine, if operative as between
any two parties, or if not operative, in writing or by telephone (promptly
confirmed in writing).

“Event of Default” means any of the events specified in Section 11.1 hereof to
be an Event of Default.

“Facility” or “Facilities” means one or more, as the case may be, of the solid
waste disposal facilities identified on Exhibit A to the Agreement.

“Favorable Opinion” means an opinion of Bond Counsel addressed to the Issuer,
the Company and the Trustee and stating, unless otherwise specified herein, that
the action proposed to be taken is authorized or permitted by the Act and this
Indenture and will not, in and of itself, adversely affect the excludability
from gross income for federal income tax purposes of interest on the Bonds
(other than as held by a “substantial user” of the Project or a “related person”
within the meaning of the Code).

“Governmental Obligations” means (i) direct obligations of the United States of
America, (ii) obligations the timely payment of the principal of and interest on
which is fully and unconditionally guaranteed by the United States of America,
and (iii) certificates, depositary receipts or other instruments which evidence
a direct ownership interest in obligations described in clause (i) and
(ii) above or in any specific interest or principal payments due in respect
thereof; provided, however, that the custodian of such obligations or specific
interest or principal payments shall be a bank or trust company organized under
the laws of the United States of America or of any state or territory thereof or
of the District of Columbia, with a combined capital stock, surplus and
undivided profits of at least $50,000,000; and provided, further, that except as
may be otherwise required by law, such custodian shall be obligated to pay to
the holders of such certificates, depositary receipts or other instruments the
full amount received by such custodian in respect of such obligations or
specific payments and shall not be permitted to make any deduction therefrom.

“Governmental Unit” means the Gulf Coast Waste Disposal Authority and any
successor to its functions and duties.

“Guarantee” means the Guarantee Agreement, dated as of October 1, 2006, among
the Company, the Subsidiary Guarantors, and the Trustee.

“Indenture” means this Trust Indenture as amended or supplemented.

“Interest Payment Date” means each June 1 and December 1, commencing June 1,
2007.

“Issue Date” means the date on which the Bonds are first authenticated and
delivered to the Underwriter against payment therefor.

“Issuer” means the Gulf Coast Industrial Development Authority, a nonstock,
nonprofit industrial development corporation existing under the laws of the
State of Texas, including particularly, the Act.

“Majority Holders” means the owners of a majority in principal amount of the
Bonds Outstanding.

 

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“Maturity Date” or “Maturity Dates” means the date or dates specified as such in
the Approval Certificate.

“Moody’s” means Moody’s Investors Service, Inc. or any successor thereto
maintaining a rating on the Bonds.

“Outstanding” or “outstanding”, in connection with Bonds means, as of the time
in question, all Bonds authenticated and delivered under this Indenture, except:

(i) Bonds theretofore cancelled or required to be cancelled under Section 2.11
hereof;

(ii) Bonds which are deemed to have been paid in accordance with Article XVI
hereof;

(iii) Bonds in substitution for which other Bonds have been authenticated and
delivered pursuant to Article II hereof and Bonds paid pursuant to
Section 2.9(a) hereof;

(iv) Bonds registered in the name of the Issuer;

(v) For purposes of any consent, request, demand, authorization, direction,
notice, waiver or other action to be taken by the holders of a specified
percentage of outstanding Bonds hereunder, all Bonds held by or for the account
of the Issuer or the Company, except that for purposes of any such consent,
request, demand, authorization, direction, notice, waiver or action the Trustee
shall be obligated to consider as not being outstanding only Bonds known by a
Responsible Officer of the Trustee by actual notice thereof to be so held.

In determining whether the owners of a requisite aggregate principal amount of
Bonds outstanding have concurred in any request, demand, authorization,
direction, notice, consent or waiver under the provisions hereof, Bonds owned by
the Company (unless all of the outstanding Bonds are then owned by the Company)
shall be disregarded for the purpose of any such determination. Notwithstanding
the foregoing, Bonds so owned which have been pledged in good faith shall not be
disregarded as aforesaid if the pledgee has established to the satisfaction of
the Bond Registrar the pledgee’s right so to act with respect to such Bonds and
that the pledgee is not the Company or an Affiliate thereof.

“Paying Agent” or “paying agent” means any national banking association, bank
and trust company or trust company appointed pursuant to Section 10.1 hereof.

“Person” means an individual, a corporation, a partnership, an association, a
joint stock company, a trust, an unincorporated organization, a governmental
body or a political subdivision, a municipal corporation, a public corporation
or any other group or organization of individuals.

“Principal Office of the Paying Agent” means the office thereof designated in
Section 17.5 or such other office as may be designated in writing to the
Trustee.

“Principal Office of the Trustee” means the business address designated in
writing to the Issuer and the Company as its principal office for its duties
hereunder, and which initially shall be as specified in Section 17.5 hereof.

“Project” means all of the Facilities to the extent financed with proceeds of
the Bonds.

 

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“Rating Service” means S&P and/or Moody’s, according to which of such rating
agencies then rates the Bonds; and provided that if neither of such rating
agencies then rates the Bonds, the term “Rating Service” shall refer to any
national rating service (if any) which provides such rating

“Rebate Fund” means the fund by that name created and established in Section 8.5
of this Indenture.

“Record Date” means, as the case may be, the applicable Regular or Special
Record Date.

“Regular Record Date” means the close of business on the fifteenth day (whether
or not a Business Day) of the calendar month immediately preceding the Interest
Payment Date.

“Responsible Officer” means an officer of the Trustee who customarily handles
corporate trusts and is assigned to supervise this Indenture, and any other
officer of the Trustee to whom a matter is referred because of his knowledge of
and familiarity with the particular subject.

“Revenues” means (i) all amounts payable to the Trustee with respect to the
principal of, redemption price, if any, and interest on the Bonds (A) on deposit
in the Bond Fund, the Construction Fund, and the Debt Service Reserve Fund from
the proceeds of the Bonds or obligations of the Issuer issued to refund the
Bonds or from any other source and (B) paid by the Company as Loan Payments
under the Agreement or to replenish any deficiency in the Debt Service Reserve
Fund, (ii) all receipts of the Trustee credited under the provisions of this
Indenture against amounts described in clause (i); (iii) investment income with
respect to any moneys held by the Trustee in the Bond Fund, the Construction
Fund, and the Debt Service Reserve Fund; (iv) amounts paid to the Trustee by the
Company or the Subsidiary Guarantors pursuant to the Guarantee; and (v) amounts
paid to the Trustee by the Collateral Trustee pursuant to the Collateral Trust
Agreement.

“S&P” means Standard & Poor’s Credit Market Services, a division of The
McGraw-Hill Companies, Inc. or any successor thereto maintaining a rating on the
Bonds.

“Securities Depository” means any “clearing agency” registered under Section 17A
of the Securities Exchange Act of 1934, as amended.

“Special Record Date” means such date as may be fixed for the payment of
defaulted interest in accordance with Section 2.7 hereof.

“State” means the State of Texas.

“Subsidiary” means any corporation, partnership, association or other business
entity of which 50% or more of the Voting Stock or other equity interests, as
appropriate, is at the time directly or indirectly owned by the Company, by the
Company and one or more other Subsidiaries, or by one or more other
Subsidiaries.

“Subsidiary Guarantors” mean each of MST Production Ltd., MST GP, LLC, MST
Estates, LLC, Rio Leche Estates, L.L.C., Mission Biogas, L.L.C., and Hereford
Biogas, L.L.C.

“Tax Letter of Representation” means the letter of representation regarding the
use of the proceeds of the Bonds and other facts that are within the Company’s
knowledge, furnished by the Company to the Issuer and Bond Counsel in connection
with the issuance of the Bonds.

 

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“Trustee” means Wells Fargo Bank, National Association, and any successor
trustee or co-trustee serving as such hereunder.

“Unassigned Rights” means the rights of the Issuer under Sections 5.04, 6.03 and
7.03(a) of the Agreement and the right to receive notices thereunder.

“Underwriter” means the initial underwriter of the Bonds, Ziegler Capital
Markets Group.

“Voting Stock” means, with respect to any corporation, any class of shares of
stock of such corporation having general voting power under ordinary
circumstances to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency).

The words “hereof”, “herein”, “hereto”, “hereby” and “hereunder” (except in the
form of Bond) refer to the entire Indenture. Unless otherwise noted, all Section
and Article references are to sections and articles in this Indenture.

ARTICLE II

THE BONDS

SECTION 2.1. Amount, Terms, and Issuance of Bonds. The Bonds shall, except as
provided in Section 2.9 hereof, be in the aggregate principal amount set forth
in the Approval Certificate, but in no event to exceed $60,000,000 and shall
contain substantially the terms recited in the form of bond attached hereto as
Exhibit A with such changes and variations as may be necessary to conform to the
provisions thereof. The Bonds shall be issued for the purpose of providing a
portion of the funds necessary to pay the costs of acquiring, constructing, and
improving the Project, as provided herein and in the Agreement. The Bonds may
have such additional legends thereon as shall be customary in the industry. No
bonds other than the Bonds may be issued under this Indenture. No Bonds may be
issued under this Indenture except in accordance with this Article.

Pursuant to recommendations promulgated by the Committee on Uniform Security
Identification Procedures, “CUSIP” numbers may be printed on the Bonds. The
Bonds may bear such endorsement or legend satisfactory to the Trustee as may be
required to conform to usage or law with respect thereto.

The Issuer may issue the Bonds upon the execution of this Indenture, and the
Trustee shall, at the Issuer’s written direction, authenticate the Bonds and
deliver them as specified in the direction.

SECTION 2.2. Designation, Denominations, Maturity and Form. The Bonds shall be
designated “Gulf Coast Industrial Development Authority Environmental Facilities
Revenue Bonds (Microgy Holdings Project) Series 2006”.

Unless otherwise directed by the Issuer, the Bonds shall be numbered from R-1
upward, unless otherwise determined by the Trustee. Temporary Bonds issued
pursuant to Section 2.10 hereof shall be numbered from TR-1 upward, unless
otherwise determined by the Trustee.

All Bonds shall be dated as of October 1, 2006, but shall initially bear
interest from the Issue Date.

 

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The Bonds shall mature on their respective Maturity Dates.

All Bonds shall be issued in denominations of $100,000 and integral multiples of
$5,000 in excess thereof.

SECTION 2.3. Registered Bonds Required; Bond Registrar and Bond Register. All
Bonds shall be issued in fully registered form. The Bonds shall be registered
upon original issuance and upon subsequent transfer or exchange as provided in
this Indenture.

The Issuer shall designate, at the direction of the Company, one or more persons
to act as “Bond Registrar” for the Bonds provided that the Bond Registrar
appointed for the Bonds shall be either the Trustee, the Paying Agent or a
person which would meet the requirements for qualification as a successor
trustee imposed by Section 12.13. The Issuer hereby appoints the Trustee as the
initial Bond Registrar. Any Person other than the Trustee undertaking to act as
Bond Registrar shall first execute a written agreement, in form satisfactory to
the Trustee and the Company, to perform the duties of a Bond Registrar under
this Indenture, which agreement shall be filed with the Trustee and the Company.
The Paying Agent and Bond Registrar, in performing their respective duties
hereunder, shall be entitled to the same protective provisions in the
performance of their respective duties as are specified in Article XII of this
Indenture with respect to the Trustee hereunder to the same extent and as fully
for all intents and purposes as though the Paying Agent and Bond Registrar had
been expressly named therein in place of such Trustee and as though the
applicable provisions of Article XII of this Indenture had been set forth herein
at length.

The Bond Registrar shall act as registrar and transfer agent for the Bonds. The
Issuer shall cause to be kept at an office of the Bond Registrar a register
(herein sometimes referred to as the “Bond Register”) in which, subject to such
reasonable regulations as it, the Trustee or the Bond Registrar may prescribe,
the Issuer shall provide for the registration of the Bonds and for the
registration of transfers of the Bonds. The Issuer shall cause the Bond
Registrar to designate, by a written notification to the Trustee, a specific
office location (which may be changed from time to time, upon similar
notification) at which the Bond Register is kept.

The Bond Registrar shall at any time as reasonably requested by the Trustee, the
Paying Agent, or the Company certify and furnish to the Trustee, the Paying
Agent, the Company and any Paying Agent as the Trustee shall specify, the names,
addresses, and holdings of Bondholders and any other relevant information
reflected in the Bond Register, and the Trustee, the Remarketing Agent and any
such Paying Agent shall for all purposes be fully entitled to rely upon the
information so furnished to them and shall have no liability or responsibility
in connection with the preparation thereof.

SECTION 2.4. Transfer and Exchange. Upon surrender for registration of transfer
of any Bond at the designated office of the Bond Registrar, the Issuer shall
execute and the Trustee or its Authenticating Agent shall authenticate and
deliver in the name of the transferee or transferees, one or more new fully
registered Bonds of authorized denomination for the aggregate principal amount
which the Registered Owner is entitled to receive.

At the option of the owner, Bonds may be exchanged for other Bonds of any other
authorized denomination, of a like aggregate principal amount and accruing
interest at the same Interest Rate, upon surrender of the Bonds to be exchanged
at the designated office of the Bond Registrar. Whenever any Bonds are so
surrendered for exchange, the Issuer shall execute, and the Trustee or the
Authenticating Agent shall authenticate and deliver, the Bonds which the
Bondholder making the exchange is entitled to receive.

 

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All Bonds presented for registration of transfer or exchange shall be
accompanied by a written instrument or instruments of transfer or authorization
for exchange, in form and with guaranty of signature satisfactory to the Bond
Registrar, duly executed by the owner or by his attorney duly authorized in
writing, and such documentation as the Bond Registrar shall reasonably require.

No service charge shall be made to a Bondholder for any exchange or registration
of transfer of Bonds, but the Issuer or the Bond Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.

New Bonds delivered upon any registration of transfer or exchange shall be valid
obligations of the Issuer, evidencing the same debt as the Bonds surrendered,
shall be secured by this Indenture and shall be entitled to all of the security
and benefits hereof to the same extent as the Bonds surrendered.

Except as provided above, the Trustee shall not be required to effect any
transfer or exchange during the 15 days immediately preceding the date of
mailing of any notice of redemption or at any time following the mailing of any
such notice in the case of Bonds selected for such redemption.

SECTION 2.5. Execution. All the Bonds shall, from time to time, be executed on
behalf of the Issuer by the manual or facsimile signature of the President of
the Issuer, its seal (which may be in facsimile) shall be thereunto affixed (or
printed or engraved or otherwise reproduced thereon if in facsimile), and
attested by the manual or facsimile signature of the Secretary of the Issuer.

If any of the officers whose manual or facsimile signatures shall be upon the
Bonds shall cease to be such officers of the Issuer before such Bonds shall have
been actually authenticated by the Trustee or delivered by the Issuer, such
Bonds nevertheless may be authenticated, issued and delivered with the same
force and effect as though the person or persons whose signature shall be upon
such Bonds had not ceased to be such officer or officers of the Issuer; and also
any such Bonds may be signed and sealed on behalf of the Issuer by those persons
who, at the actual date of the execution of such Bond, shall be the proper
officers of the Issuer, although at the nominal date of such Bonds any such
person shall not have been such officer of the Issuer.

SECTION 2.6. Authentication; Authenticating Agent. No Bond shall be valid for
any purpose until either (i) the Certificate of Authentication substantially in
the form set forth in Exhibit A attached hereto has been duly executed in
accordance herewith by the Trustee or (ii) in the case of Bonds initially
delivered to the Underwriter, a Comptroller’s Registration Certificate attached
to or endorsed on such Bond has been duly executed. Such executed Certificate of
Authentication or Comptroller’s Registration Certificate, as the case may be,
shall be conclusive proof that such Bond has been duly authenticated and
delivered under this Indenture and that the owner thereof is entitled to the
benefit of the trust hereby created.

If the Bond Registrar is other than the Trustee, the Trustee may appoint the
Bond Registrar as an Authenticating Agent with the power to act on the Trustee’s
behalf and subject to its direction in the authentication and delivery of Bonds
in connection with the registration of transfers and exchanges under Section 2.4
hereof, and the authentication and delivery of Bonds by an Authenticating Agent
pursuant to this Section shall, for all purposes of this Indenture, be deemed to
be the authentication and delivery “by the Trustee”.

Any corporation into which any Authenticating Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, consolidation or conversion to which any Authenticating Agent shall be a
party, or any corporation succeeding to all or substantially all of the

 

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corporate trust business of any Authenticating Agent, shall be the successor of
the Authenticating Agent hereunder, if such successor corporation is otherwise
eligible as a Bond Registrar under Section 2.3, without the execution or filing
or any further act on the part of the parties hereto or the Authenticating Agent
or such successor corporation.

Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee, the Issuer and the Company. The Trustee may at any
time terminate the agency of any Authenticating Agent by giving written notice
of termination to such Authenticating Agent, the Issuer and the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time any Authenticating Agent shall cease to be eligible under this Section,
the Trustee may, with the consent of the Company (which shall not be
unreasonably withheld) appoint a successor Authenticating Agent, shall give
written notice of such appointment to the Issuer, and shall mail notice of such
appointment to all owners of Bonds as the names and addresses of such owners
appear on the Bond Register.

SECTION 2.7. Payment of Principal and Interest; Interest Rights Preserved.
(a) Subject to the provisions relating to book-entry only set forth in
Section 2.13 hereof, the principal or redemption price of any Bond shall be
payable upon presentation and surrender of such Bond to the Principal Office of
the Paying Agent. The principal or redemption price of the Bonds shall be
payable in immediately available funds. Such payments shall be made to the
Registered Owner of the Bond so delivered, as shown in the Bond Register
maintained by the Bond Registrar.

(b) Each Bond shall accrue interest and be payable as to interest as follows:

(i) The Bonds shall accrue interest until their respective Maturity Dates or
prior redemption at the rate or rates set forth in the Approval Certificate
initially from the Issue Date, and thereafter (A) from the date of
authentication, if authenticated on an Interest Payment Date to which interest
has been paid or duly provided for, or (B) from the last preceding Interest
Payment Date to which interest has been paid in full or duly provided for (or
the Issue Date if no interest thereon has been paid or duly provided for) in all
other cases.

(ii) Subject to the provisions of paragraph (c) below, the interest due on any
Bond on any Interest Payment Date shall be paid to the Registered Owner of such
Bond as shown on the Bond Register as of the Regular Record Date. The amount of
interest so payable on any Interest Payment Date shall be computed on the basis
of a 360-day year of twelve 30-day months.

(iii) All payments of interest on the Bonds shall be paid to the Registered
Owners entitled thereto in immediately available funds by wire transfer to a
bank within the continental United States or deposited to a designated account
if such account is maintained with the Paying Agent as directed by the
Registered Owner in writing or as otherwise directed in writing by the
Registered Owner at least five Business Days prior to each Interest Payment
Date.

(iv) Interest due at the maturity or redemption of a Bond shall be paid only
upon presentation and surrender of each Bond.

(v) Interest on any Bond which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the person in whose
name that Bond is registered on the Regular Record Date for such interest.

 

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(c) Any interest on any Bond which is payable, but is not punctually paid or
provided for, on any Interest Payment Date and within any applicable grace
period (herein called “Defaulted Interest”) shall forthwith cease to be payable
to the owner of such Bond on the relevant Regular Record Date by virtue of
having been such owner, and such Defaulted Interest shall be paid to the person
in whose name the Bond is registered at the close of business on a Special
Record Date to be fixed by the Trustee, such date to be no more than 15 nor
fewer than 10 days prior to the date of proposed payment. The Trustee shall
cause notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first class postage prepaid, to each
Bondholder at his address as it appears in the Bond Register, not fewer than 10
days prior to such Special Record Date.

(d) Subject to the foregoing provisions of this Section, each Bond delivered
under this Indenture upon registration of transfer of or exchange for or in lieu
of any other Bond shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Bond.

SECTION 2.8. Persons Deemed Owners. The Issuer, the Trustee, any Paying Agent,
the Bond Registrar and any Authenticating Agent may deem and treat the person in
whose name any Bond is registered in the Bond Register as the absolute owner
thereof (whether or not such Bond shall be overdue and notwithstanding any
notation of ownership or other writing thereon made by anyone other than the
Issuer, the Trustee, any Paying Agent, the Bond Registrar or the Authenticating
Agent) for the purpose of receiving payment of or on account of the principal
of, redemption premium, if any, and (subject to Section 2.7) interest on, such
Bond, and for all other purposes, and neither the Issuer, the Trustee, any
Paying Agent, the Bond Registrar, nor the Authenticating Agent shall be affected
by any notice to the contrary. All such payments so made to any such Registered
Owner, or upon his order, shall be valid and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Bond.

SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Bonds. (a) If any Bond shall
become mutilated, lost, stolen or destroyed, the affected Bondholder shall be
entitled to the issuance of a substitute Bond only as follows:

(i) in the case of a lost, stolen or destroyed Bond, the Bondholder shall
(A) provide written notice of the loss, theft or destruction to the Trustee
within a reasonable time after the Bondholder becomes aware of the loss, theft
or destruction, (B) request the issuance of a substitute Bond and (C) provide
evidence, satisfactory to the Trustee, of the ownership and the loss, theft or
destruction of the affected Bond;

(ii) in the case of a mutilated Bond, the Bondholder shall surrender the Bond to
the Trustee for cancellation;

(iii) in all cases, the Bondholder shall provide indemnity against any and all
claims arising out of or otherwise related to the issuance of substitute Bonds
pursuant to this Section 2.9 satisfactory to the Issuer, the Trustee and the
Company; and

(iv) in all cases, upon payment by the affected Bondholder of the fees and
expenses of the Trustee and the Issuer in connection with the issuance of any
such substitute Bond.

Upon compliance with the foregoing, a substitute Bond of like tenor and
denomination, executed by the Issuer, shall be authenticated by the Trustee or
Authenticating Agent and delivered to the Bondholder.

 

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Notwithstanding the foregoing, the Trustee or Authenticating Agent shall not be
required to authenticate and deliver any substitute Bond for a Bond which has
been called for redemption or which has matured or is about to mature and, in
any such case, the principal, redemption price or Purchase Price and interest
then due or becoming due shall be paid by the Trustee or a Paying Agent in
accordance with the terms of the mutilated, lost, stolen or destroyed Bond
without substitution therefor.

(b) Every substituted Bond issued pursuant to this Section shall constitute an
additional contractual obligation of the Issuer and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Bonds duly issued hereunder.

(c) All Bonds shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Bonds, and shall preclude any and all other
rights or remedies, notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of negotiable
instruments or investment or other securities without their surrender.

SECTION 2.10. Temporary Bonds. Pending preparation of definitive Bonds, or by
agreement with the purchasers of all Bonds, the Issuer may issue, and, upon its
request, the Trustee or Authenticating Agent shall authenticate, in lieu of
definitive Bonds one or more temporary printed or typewritten Bonds of
substantially the tenor recited above in any Authorized Denomination. Upon
written request of the Issuer, the Trustee shall authenticate definitive Bonds
in exchange for and upon surrender of an equal principal amount of temporary
Bonds. Until so exchanged, temporary Bonds shall have the same rights, remedies
and security hereunder as definitive Bonds.

SECTION 2.11. Cancellation of Surrendered Bonds. Bonds surrendered for payment,
redemption, transfer or exchange and Bonds surrendered to the Trustee by the
Issuer or by the Company for cancellation shall be cancelled by the Trustee and
such cancelled Bonds shall be delivered to the Company.

SECTION 2.12. Limited Obligation. The Bonds are not and never shall become
general obligations of the Issuer, but are limited obligations payable by the
Issuer solely and only from the payments received under or with respect to the
documents executed by the Company (except to the extent paid out of moneys
attributable to the proceeds derived from the sale of the Bonds or income from
the temporary investment of such funds or other funds held hereunder), which
amounts, together with any other security provided herein, are hereby
specifically assigned and pledged to such purposes, in the manner and to the
extent provided herein. The Bonds shall be deemed not to constitute a debt of
the State, the Governmental Unit, or of any other political corporation,
subdivision, or agency of the State or a pledge of the faith and credit of any
of them. No recourse shall be had for any claim based on the Agreement, the
Indenture, or the Bonds against any member, officer or employee, past, present
or future, of the Issuer, or of any successor body thereto, either directly or
through the Issuer, or any such successor body, under any constitutional
provision, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise. Neither the State, the Governmental Unit nor any political
corporation, subdivision, or agent of the State shall be obligated to pay the
Bonds and neither the faith and credit nor the taxing power of the State, the
Governmental Unit, or any other political corporation, subdivision, or agency is
pledged to the payment of the principal of, redemption premium, if any, or
interest on the Bonds. The Bonds are special revenue obligations of the Issuer
payable solely from the sources described herein and therein and the holder
thereof shall never have the right to demand payment from moneys derived by
taxation or any revenues of the Issuer except the funds pledged to the payment
thereof.

 

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SECTION 2.13. Book Entry System. (a) DTC will act as the initial Securities
Depository for the Bonds. The Bonds shall be initially issued in the form of a
single fully registered Bond registered in the name of Cede & Co. (DTC’s
nominee). So long as Cede & Co. is the Registered Owner of the Bonds, as nominee
of DTC, references herein to Registered Owners, Bondholders or holders of the
Bonds shall mean Cede & Co. and shall not mean the beneficial owners of the
Bonds.

(b) While DTC is the Securities Depository, the ownership interest of each of
the beneficial owners of the Bonds will be recorded through the records of a DTC
Participant. Transfers of beneficial ownership interests in the Bonds which are
registered in the name of Cede & Co. will be accompanied by book entries made by
DTC and, in turn, by the DTC Participants who act on behalf of the beneficial
owners of the Bonds.

(c) With respect to Bonds registered in the name of the Securities Depository,
the Issuer, the Company, the Bond Registrar, the Paying Agent, and the Trustee
shall have no responsibility or obligation to any person on behalf of whom such
Securities Depository holds an interest in the Bonds, except as provided in this
Indenture. Without limiting the immediately preceding sentence, the Issuer, the
Bond Registrar, the Paying Agent, and the Trustee shall have no responsibility
or obligation with respect to (i) the accuracy of the records of the Securities
Depository with respect to any ownership interest in the Bonds, (ii) the
delivery to any person, other than a Bondholder, as shown on the Bond Register,
of any notice with respect to the Bonds, including any notice of redemption, or
(iii) the payment to any person, other than a Registered Owner, as shown in the
Bond Register of any amount with respect to principal of, redemption premium, if
any, or interest on, the Bonds.

(d) Notwithstanding any other provisions of this Indenture to the contrary, the
Issuer, the Bond Registrar, the Paying Agent, and the Trustee shall be entitled
to treat and consider the person in whose name each Bond is registered in the
Bond Register as the absolute owner of such Bond for the purpose of payment of
principal, redemption premium, if any, and interest with respect to such Bond,
for the purpose of giving notices of redemption and other matters with respect
to such Bond, for the purpose of registering transfers with respect to such
Bond, and for all other purposes whatsoever. The Paying Agent shall pay all
principal of, redemption premium, if any, and interest on the Bonds only to or
upon the order of the respective owners, as shown in the Bond Register as
provided in this Indenture, or their respective attorneys duly authorized in
writing, and all such payments shall be valid and effective to fully satisfy and
discharge the Issuer’s obligations with respect to payment of principal of,
redemption premium, if any, and interest on, the Bonds to the extent of the sum
or sums so paid.

(e) No person other than a Registered Owner, as shown in the registration books,
shall receive a Bond certificate evidencing the obligation of the Issuer to make
payments of principal, redemption premium, if any, and interest, pursuant to
this Indenture.

(f) Any provision of this Indenture permitting or requiring the delivery of
Bonds shall, while the book-entry system is in effect, be satisfied by the
notation on the books of the Securities Depository, of the transfer of the
beneficial owner’s interest in such Bond.

(g) So long as the book-entry system is in effect, the Trustee, the Paying Agent
and the Bond Registrar shall comply with the terms of the Letter of
Representations.

(h) The Securities Depository may determine to discontinue providing its service
with respect to the Bonds at any time by giving reasonable notice and all
relevant information on the beneficial owners of the Bonds to the Issuer or the
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Issuer, the Trustee shall authenticate and deliver Bonds to the beneficial
owners thereof. In the event that the Company determines that the Securities
Depository is incapable of discharging its responsibilities described herein or
in any agreement among the Issuer, the Trustee and the Securities Depository and
that it is in the best interest of the beneficial owners of the Bonds that they
be able to obtain certificated Bonds, the Issuer, at the direction of the
Company, shall (i) appoint a successor securities depository, qualified to act
as such under Section 17(a) of the securities and Exchange Act of 1934, as
amended, notify the Securities Depository of the appointment of such successor
securities depository and transfer one or more separate Bonds to such successor
securities depository or (ii) notify the Securities Depository and owners,
identified by the Securities Depository, of the availability through the
Securities Depository of Bonds and transfer one or more separate Bonds to
owners, identified by the Securities Depository, having Bonds credited to their
accounts. In such event, the Bonds shall no longer be restricted to being
registered in the Bond Register in the name of the Securities Depository, but
may be registered in the name of the successor securities depository, or its
nominee, or in whatever name or names Bondholders transferring or exchanging
Bonds shall designate, in accordance with the provisions of this Indenture.

Upon the written consent of 100% of the beneficial owners of the Bonds, the
Trustee, in accordance with any agreement among the Issuer, the Trustee, and the
Securities Depository, shall withdraw the Bonds from the Securities Depository,
and authenticate and deliver Bonds fully registered to the assignees of the
Securities Depository or its nominee. If the request for such withdrawal is not
the result of any Issuer action or inaction, such withdrawal, authentication and
delivery shall be at the cost and expense (including costs of printing,
preparing and delivering such Bonds) of the persons requesting such withdrawal,
authentication and delivery.

SECTION 2.14. Payments to Securities Depository; Payments to Beneficial Owners.
(a) Notwithstanding any other provision of this Indenture to the contrary, so
long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of, redemption premium, if any, Purchase
Price, and interest on, such Bond and all notices with respect to such Bond
shall be made and given, respectively, pursuant to DTC’s rules and procedures,
or in the case of a successor Securities Depository, pursuant to any agreement
among the Issuer, the Trustee, the Bond Registrar, and the Securities
Depository.

(b) With respect to Bonds registered in the name of a Securities Depository (or
its nominee) neither the Trustee, the Issuer nor the Company shall have any
obligation to any of its members or participants or to any person on behalf of
whom an interest is held in the Bonds.

SECTION 2.15. CUSIP Numbers. The Issuer in issuing the Bonds may use “CUSIP”
numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP”
numbers in notices of redemption as a convenience to Bondholders; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Bonds or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Bonds, 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.

 

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ARTICLE III

APPLICATION OF BOND PROCEEDS

SECTION 3.1. Application of Original Proceeds of Bonds. Proceeds received from
the issuance and sale of the Bonds shall, on the Issue Date, be deposited by the
Trustee as follows:

(a) an amount equal to the Debt Service Reserve Requirement to the Debt Service
Reserve Fund; and

(b) the balance of such proceeds to the Construction Fund.

 

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ARTICLE IV

DEBT SERVICE RESERVE FUND

SECTION 4.1 Creation of Debt Service Reserve Fund. There is hereby created by
the Issuer and ordered to be established with the Trustee a Debt Service Reserve
Fund. The Debt Service Reserve Fund shall be used, and the Trustee is hereby
authorized to use the Debt Service Reserve Fund, solely for the purposes of
(i) finally retiring the last of the outstanding Bonds or (ii) paying principal
of and interest on any outstanding Bonds when and to the extent the amount in
the Bond Fund is insufficient for such purpose on the date such payment is due.
In the event that on the Business Day prior to the due date thereof, amounts on
deposit in the Bond Fund are insufficient to pay the principal and/or interest
due on the Bonds, the Trustee shall draw upon the Debt Service Reserve Fund to
the extent necessary to make such payments.

SECTION 4.2. Replenishment of Debt Service Reserve Fund. Out of proceeds of the
Bonds, there shall be deposited to the credit of the Debt Service Reserve Fund
an amount sufficient, together with other monies provided therefor, to result in
there being on deposit in the Debt Service Reserve Fund money and/or investments
at least equal in market value to the Debt Service Reserve Requirement. No
deposits shall be made into the Debt Service Reserve Fund as long as the money
and investments in the Debt Service Reserve Fund are at least equal in market
value to the Debt Service Reserve Requirements; but if and whenever the market
value of money and investments in the Debt Service Reserve Fund is reduced below
the Debt Service Reserve Requirements for any reason, the Company shall pay, in
accordance with the Agreement, to the Trustee for deposit into the Debt Service
Reserve Fund amounts sufficient to replenish any such deficiency.

ARTICLE V

CONSTRUCTION FUND

SECTION 5.1. Creation of Construction Fund. There is hereby created and ordered
to be established with the Trustee a Construction Fund.

SECTION 5.2. Disbursements from Construction Fund. Moneys in the Construction
Fund shall be disbursed by the Trustee to pay Project Costs or to reimburse the
Company for Project Costs paid by it, all in accordance with and pursuant to the
provisions of the Agreement. The Trustee shall keep and maintain adequate
records pertaining to the Construction Fund and all disbursements therefrom and
shall file an accounting thereof if and when requested by the Issuer or the
Company.

SECTION 5.3. Balance in Construction Fund. Any amounts remaining in the
Construction Fund after delivery of the Completion Certificate (as defined in
the Agreement) for the Project shall be used by the Trustee as provided in
Section 3.03(e) of the Agreement.

SECTION 5.4. Acceleration of Bonds. In the event that the principal of the Bonds
shall have become due and payable pursuant to Section 11.2 hereof, subject to
Section 8.5(e) hereof, any amounts held in or on deposit in the Construction
Fund shall be transferred by the Trustee to the Bond Fund.

 

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ARTICLE VI

BOND FUND

SECTION 6.1. Revenues to be Paid Over to the Trustee. The Issuer has caused the
Revenues to be paid directly to the Trustee.

SECTION 6.2. Bond Fund. (a) There is hereby created and ordered to be
established with the Trustee a Bond Fund.

(b) The Trustee shall maintain the Bond Fund as follows:

(i) The Trustee shall deposit into the Bond Fund (A) all Loan Payments;
(B) amounts received from the Collateral Trustee under the Collateral Trust
Agreement; (C) amounts paid by the Guarantors pursuant to the Guarantee; and
(D) and, when accompanied by directions from the Person depositing such moneys
that such moneys are to be paid into the Bond Fund, all other amounts received
by the Trustee from the Company or for the account of the Company pursuant to
the Agreement and all payments under and pursuant to the provisions of this
Indenture or any of the provisions of the Agreement.

(ii) Moneys in the Bond Fund shall be applied solely to the payment when due of
principal of, redemption premium, if any, and interest on the Bonds.

(iii) In the event of an annulment pursuant to Section 11.2 hereof, any amounts
transferred by the Trustee from the Construction Fund to the Bond Fund pursuant
to Section 5.4 hereof shall be transferred by the Trustee back to the
Construction Fund.

SECTION 6.3. Revenues to Be Held for All Bondholders; Certain Exceptions. Until
applied as provided in this Indenture to the payment of Bonds or transferred to
the Company pursuant to Section 6.4 or Section 17.2, Revenues shall be held by
the Trustee in trust in the Bond Fund for the benefit of the owners of all
Outstanding Bonds, except that any portion of the Revenues representing
principal or redemption price, and interest on any Bonds previously matured or
called for redemption in accordance with Article IX of this Indenture, shall be
held for the benefit of the owners or the former owners of such Bonds only.

SECTION 6.4. Amounts Remaining in Bond Fund. Any amounts remaining in the Bond
Fund after payment in full of (i) the Bonds (or the provision for payment
thereof having been made in accordance with the provisions hereof), (ii) all
Administration Expenses, and (iii) all other amounts required to be paid under
the Agreement and this Indenture, subject to any applicable provisions of Texas
law, including Title 6 of the Texas Property Code, shall be paid to the Company
pursuant to its written instructions.

ARTICLE VII

[RESERVED]

 

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ARTICLE VIII

INVESTMENT OR DEPOSIT OF MONEYS

SECTION 8.1. Deposits. (a) All moneys received by the Trustee under this
Indenture shall be deposited with the Trustee, until or unless invested or
deposited as provided in Sections 8.2 or 8.3, as applicable, or as otherwise
provided herein. All deposits with the Trustee shall be secured as required by
applicable law for such trust deposits. The Trustee may deposit such moneys with
any other depository which is authorized to receive them and is subject to
supervision by public banking authorities.

(b) Obligations purchased as an investment of moneys in any fund or account
shall be deemed at all times a part of such fund or account. Any profit and
income realized from such investments shall be credited to such fund or account
and any loss shall be charged to such fund or account.

SECTION 8.2. Investment of Bond Fund and Debt Service Reserve Fund. At the
written direction of the Authorized Company Representative, the Trustee shall
invest moneys held in the Bond Fund and the Debt Service Reserve Fund, in
Governmental Obligations, specified by the Authorized Company Representative in
such direction, maturing not later than the date or dates when the payments for
which such moneys are held are to become due. Any such investments shall be held
by or under the control of the Trustee and shall be deemed at all times a part
of the Bond Fund or the Debt Service Reserve Fund, as the case may be. Upon the
occurrence of, and during the continuation of, an Event of Default, the Trustee
shall no longer take investment instructions from the Company, but from a
representative of the Majority Holders.

The interest and income received upon such investments of the Bond Fund and any
interest paid by the Trustee or any other depository and any profit or loss
resulting from the sale of any investment shall be added or charged to the
extent received or paid and available for payment of amounts due on the Bonds,
to the payment of the next-succeeding payment due on account of the Bonds and to
the extent so applied, shall constitute payment in respect of the Agreement
(notice of which payment shall be given by the Trustee to the Company), and any
realized loss shall be made up by the Company (the direction of the Company to
make investments as aforesaid to include an agreement so to do). The interest
and income received upon such investments of the Debt Service Reserve Fund shall
be credited to the Debt Service Reserve Fund.

SECTION 8.3. Investment of Moneys in the Construction Fund. (a) Moneys held for
the credit of the Construction Fund shall, upon written direction by the
Authorized Company Representative, be invested and reinvested by the Trustee as
specified by the Authorized Company Representative in any one or more of the
following obligations or securities, to the extent permitted by State law, on
which neither the Company nor any of its Affiliates is the obligor:
(i) Governmental Obligations; (ii) debt obligations which are (a) issued by any
state or political subdivision thereof or any agency or instrumentality of such
state or political subdivision, and (b) at the time of purchase, rated “AAA” by
S&P and rated “Aaa” by Moody’s; (iii) any bond, debenture, note, participation
certificate or other similar obligation which is either (a) issued or guaranteed
by the Federal National Mortgage Association, the Federal Home Loan Bank System,
the Federal Home Loan Mortgage Corporation, the federal Farm Credit Bank or the
Student Loan Marketing Association, or (b) backed by the full faith and credit
of the United States of America; (iv) U.S. denominated deposit account,
certificates of deposit and banker’s acceptances with domestic commercial banks,
which have a rating on their short-term certificates of deposit on the date of
purchase of “A-1” by S&P or “P-1” by Moody’s, without regard to gradation, and
which matures not more than 360 days after the date of purchase; (v) commercial
paper which is rated at the time of purchase within the classification or
higher, “A-1” by S&P or “P-1” by Moody’s, without regard to gradation, and which
matures not more than 270 days after the date of purchase; (vi) investment
agreements with banks that at the time such agreement is executed are rated by
S&P or Moody’s in one of the two highest rating categories assigned by S&P or
Moody’s (without regard to

 

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any refinement or gradation of rating category by numerical modifier or
otherwise) or investment agreements with non-bank financial institutions which,
(1) all of the unsecured, direct long-term debt of either the non-banking
financial institution or the related guarantor of such non-bank financial
institution is rated by S&P or Moody’s at the time such agreement is executed in
one of the two highest rating categories (without regard to any refinement or
gradation of rating category by numerical modifier or otherwise) for obligations
of that nature; or (2) if such non-bank financial institutions have no
outstanding long-term debt that is rated, all of the short-term debt of either
the non-banking financial institution or the related guarantor of such non-bank
financial institution is rated by S&P or Moody’s in the highest rating category
(without regard to any refinement or gradation fo the rating category by
numerical modifier or otherwise) assigned to short term indebtedness by S&P or
Moody’s, provided that if at any time after purchase the provider of the
investment agreement drops below the two highest rating categories assigned by
S&P or Moody’s, the investment agreement must, within 30 days, either (1) be
assigned to a provider rated in one of the two highest rating categories or
(2) be secured by the provider with collateral securities the fair market value
of which, in relation to the amount of the investment agreement including
principal and interest, is equal to at least 102%; investment agreements with
banks or non-bank financial institutions shall not be permitted if no rating is
available with respect to debt of the investment agreement provider or the
related guarantor of such provider; (vii) repurchase agreements with respect to
and secured by Government Obligations or by obligations described in clause
(ii) and (iii) above, which agreements may be entered into with a bank
(including without limitation the Trustee), a trust company, financial services
firm or a broker dealer which is a member of the Securities Investors Protection
Corporation, provided that (a) the Trustee or a custodial agent of the Trustee
has possession of the collateral and that the collateral is free and clear of
third-party claims, (b) a master repurchase agreement or specific written
repurchase agreement governs the transaction, (c) the collateral securities are
valued no less frequently than monthly, and (d) the fair market value of the
collateral securities in relation to the amount of the repurchase obligation,
including principal and interest, is equal to at least 103%, and (e) such
obligations must be held in the custody of the Trustee or the Trustee’s agent;
and (ix) shares of a fixed income mutual fund, Exchange Traded Fund or other
collective investment fund registered under the federal Investment Company Act
of 1940 whose shares are registered under the Securities Act of 1933, and whose
investments consist solely of Investments described in paragraphs (i) through
(viii) above, including money market mutual funds from which the Trustee or its
affiliates derive a fee for investment advisory or other services to the fund.
Such investments shall have maturity dates, or shall be subject to redemption by
the holder at the option of the holder, on or prior to the dates the moneys
invested therein will be needed as reflected by a statement of the Authorized
Company Representative, which statement must be on file with the Trustee prior
to any investment.

The Trustee shall be entitled to assume that any investment which at the time of
purchase is a permitted investment hereunder remains a permitted investment
thereafter, absent receipt of written notice or actual knowledge of information
to the contrary.

(b) All interest, income, or other gain from the investment of moneys in the
Construction Fund shall be retained therein and any loss resulting from the sale
of any investment shall be charged to such Fund.

SECTION 8.4. No Liability for Investments. (a) The Trustee may make any and all
investments under this Article VIII through its own investment department or
that of its affiliates or subsidiaries.

(b) The Trustee shall have no responsibility with respect to the compliance by
the Company with respect to any covenant herein regarding investments made in
accordance with this Article VIII, other than to use its best reasonable efforts
to comply with instructions from the Company regarding such investments. Since
the making of such investments will be subject to the Company’s direction, the
Trustee specifically disclaims any obligation to the Company for any loss, fee,
or other charge arising from, or tax consequences of, investments,
reinvestments, and liquidation of investments pursuant to the provisions of this
Section.

 

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SECTION 8.5. Covenants Regarding Rebate.

(a) A special Rebate Fund is hereby established by the Issuer with the Trustee.
The Rebate Fund shall be for the sole benefit of the United States of America
and shall not be subject to the claim of any other person, including without
limitation the Bondholders. The Rebate Fund is established for the purpose of
complying with section 148 of the Code and the Treasury Regulations promulgated
pursuant thereto. The money deposited in the Rebate Fund, together with all
investments thereof and investment income therefrom, shall be held in trust and
applied solely as provided in this section. The Rebate Fund is not a portion of
the Trust Estate and is not subject to the lien of this Indenture.
Notwithstanding the foregoing, the Trustee with respect to the Rebate Fund is
afforded all the rights, protections and immunities otherwise accorded to it
hereunder.

(b) Unless the Bonds qualify for an exception to rebate under Section 148 of the
Code, within ten days after the close of each “Bond Year,” the Trustee shall
receive from the Company a computation in the form of a certificate of an
Authorized Company Representative of the amount of “Excess Earnings,” if any,
for the period beginning on the date of delivery of the Bonds and ending at the
close of such “Bond Year” and the Company shall pay to the Trustee for deposit
into the Rebate Fund an amount equal to the difference, if any, between the
amount then in the Rebate Fund and the Excess Earnings so computed. The term
“Bond Year” means with respect to the Bonds each one-year period ending on the
anniversary of the date of delivery of the Bonds or such other period as may be
elected by the Issuer in accordance with the Regulations and notice of which
election has been given to the Trustee. If, at the close of any Bond Year, the
amount in the Rebate Fund exceeds the amount that would be required to be paid
to the United States of America under paragraph (d) below if the Bonds had been
paid in full, such excess may be transferred from the Rebate Fund and paid to
the Company, and the Company shall use such excess for such purposes for which,
or to be redeposited to such fund from which, such amounts were originally
derived.

(c) In general, “Excess Earnings” for any period of time means the sum of

(i) the excess of —

(A) the aggregate amount earned during such period of time on all “Nonpurpose
Investments” (including gains on the disposition of such obligations) in which
“Gross Proceeds” of the issue are invested (other than amounts attributable to
an excess described in this subparagraph (c)(i)), over

(B) the amount that would have been earned during such period of time if the
“Yield” on such Nonpurpose Investments (other than amounts attributable to an
excess described in this subparagraph (c)(i)) had been equal to the yield on the
issue, plus

(ii) any income during such period of time attributable to the excess described
in subparagraph (c)(i) above.

The terms Nonpurpose Investments, Gross Proceeds, and Yield shall have the
meanings given to such terms in section 148 of the Code and the Regulations
promulgated pursuant to such section.

(d) The Trustee shall pay to the United States of America at least once every
five years, to the extent that funds are available in the Rebate Fund or
otherwise provided by the Company, an amount that ensures that at least 90
percent of the Excess Earnings from the date of delivery of the Bonds to the
close of the period for which the payment is being made will have been paid. The
Trustee shall pay to the United States of America not later than 60 days after
the Bonds have been paid in full, to the extent that funds are

 

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available in the Rebate Fund or otherwise provided by the Company, 100 percent
of the amount then required to be paid under section 148(f) of the Code as a
result of Excess Earnings, unless the Bonds qualify for the exception to rebate
set forth in Section 148(f)(4)(B) of the Code or the Regulations thereunder.

(e) The amounts to be computed, paid, deposited or disbursed under this section
shall be determined by the Company acting on behalf of the Issuer within ten
days after (i) each Bond Year after the date of issuance of each issue or series
of Bonds and (ii) the date on which the Bonds have been paid in full, unless the
Trustee shall have been provided a Favorable Opinion with respect to the
noncompliance with such requirements. By such date, the Company shall also
notify, in writing, the Trustee and the Issuer of the determinations the Company
has made and the payment to be made pursuant to the provisions of this section.
All such determinations shall be conclusive and binding on the Trustee and the
Issuer. Upon written request of any registered owner of Bonds, the Company shall
furnish to such registered owner of Bonds a certificate (supported by reasonable
documentation, which may include calculation by Bond Counsel or by some other
service organization) showing compliance with this section and other applicable
provisions of section 148 of the Code.

(f) The Trustee shall maintain a record of the periodic determinations by the
Company of the Excess Earnings for a period beginning on the first anniversary
date of the issuance of the Bonds and ending on the date of the final retirement
of the Bonds. Such records shall state each such anniversary date and contain a
summary prepared by the Company of the manner in which the Excess Earnings, if
any, was determined. The Trustee shall provide to the Company periodic
statements of transactions and investments with respect to the various funds and
accounts created pursuant to this Indenture. Such statements shall be provided
as part of the ordinary services contemplated herein. In the event that the
Company requests the Trustee to provide copies of the statements to a rebate
consultant or other person for the purpose of performing analysis or
calculations relating to arbitrage rebate as required under this Indenture (or
other financing agreement) or for any other reason, then the Trustee shall be
entitled to additional compensation for its services with respect to providing
such additional statements.

(g) If the Trustee shall declare the principal of the Bonds and the interest
accrued thereon immediately due and payable as the result of an Event of Default
specified in the Indenture, or if the Bonds are optionally or mandatorily
prepaid or redeemed prior to maturity as a whole in accordance with their terms,
any amount remaining in any of the funds shall be transferred to the Rebate Fund
to the extent that the amount therein is less than the Excess Earnings computed
by the Company as of the date of such acceleration or redemption, and the
balance of such amount shall be used immediately by the Trustee for the purpose
of paying principal of, redemption premium, if any, and interest on the Bonds
when due. In furtherance of such intention, the Issuer hereby authorizes and
directs its President to execute any documents, certificates or reports required
by the Code and to make such elections, on behalf of the Issuer, which may be
permitted by the Code as are consistent with the purpose for the issuance of the
Bonds.

ARTICLE IX

REDEMPTION OF BONDS

SECTION 9.1. Bonds Subject to Redemption. The Bonds shall be subject to
redemption prior to maturity as set forth below:

(a) Optional Redemption. The Bonds shall be subject to redemption at the option
of the Issuer, at the direction of the Company, in whole or in part, and if in
part, in Authorized Denominations from funds available for such purpose in the
Bond Fund, on December 1, 2016, and on any date thereafter, at a redemption
price equal to the principal amount of the Bonds to be redeemed and accrued
interest, if any, to the date of redemption.

 

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(b) Mandatory Redemption. The outstanding Bonds are subject to mandatory
redemption and shall be redeemed by the Issuer, in part, prior to their
scheduled maturity, with money from the Bond Fund, at a redemption price equal
to the principal amount thereof and accrued interest, if any, to the date of
redemption, on December 1 of each of the following years, in the principal
amounts, respectively, as shown in the following schedule:

 

Redemption
Year   Principal
Amount 2012   $ 950,000 2013     1,015,000 2014     1,085,000 2015     1,165,000
2016     1,245,000 2017     1,330,000 2018     1,425,000 2019     1,525,000 2020
    1,630,000 2021     1,745,000 2022     1,865,000 2023     1,995,000 2024    
2,135,000 2025     2,285,000 2026     2,445,000 2027     2,620,000 2028    
2,800,000 2029     2,995,000 2030     3,205,000 2031     3,430,000 2032    
3,670,000 2033     3,930,000 2034     4,205,000 2035     4,495,000 2036    
4,810,000

The principal amount of the Bonds so required to be redeemed on any such
mandatory redemption date shall be reduced by the principal amount of any Bonds
which, at least 45 days prior such redemption date, (1) shall have been acquired
by the Trustee at the direction of the Company, at a price not exceeding the
principal amount of such Bonds plus accrued interest to the date of purchase
thereof and delivered to the Trustee for cancellation, or (2) shall have been
redeemed pursuant to any other redemption provision herein and not previously so
credited.

(c) Extraordinary Mandatory Redemption.

(i) Taxability. The Bonds shall be subject to mandatory redemption, at a
redemption price equal to 106% the principal amount being redeemed plus accrued
interest to the redemption date on the one hundred eightieth day (or such
earlier date as may be designated by the Company) after a final determination by
a court of competent jurisdiction or an administrative agency (including the
Internal Revenue Service), or receipt by the Company of an opinion of Bond
Counsel obtained by the Company, to the effect the interest payable on the Bonds
is or will be included in the gross income of the owners thereof for federal
income tax purposes, other than any Owner who is a “substantial user” of the
Project or a “related person” within the meaning of Section 147(a) of the Code.
Subject to the foregoing provisions of this Section 9.1(c)(i), the Bonds shall
be redeemed in whole unless, in the opinion of Bond Counsel mutually acceptable
to the Issuer, the Trustee and the Company, the redemption of a portion of such
Bonds would have the result that interest payable on the Bonds remaining
outstanding after such redemption would not be includable in the gross income
for federal income tax purposes of any owner of any such Bonds. Any such partial
redemption shall be in such amount as is necessary to accomplish such result;
and

 

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(ii) Excess Proceeds. The Bonds are subject to mandatory redemption, in part, on
any date, to the extent that proceeds of the Bonds are transferred to the Bond
Fund pursuant to Section 5.3 hereof, at a redemption price equal to the
principal amount being redeemed plus accrued interest to the redemption date.

(d) Extraordinary Optional Redemption.

The Bonds shall be subject to optional redemption by the Issuer, at the written
direction of the Company, in part, in each case in an amount not to exceed
twenty-five percent (25%) of the original principal amount of the Bonds, at any
time and from time to time, at a redemption price equal to the principal amount
being redeemed plus accrued interest to the redemption date, if:

(i) the Company shall have determined that the continued construction or
operation of a Facility is impracticable, uneconomical or undesirable due to
(A) the imposition of taxes, other than ad valorem taxes currently levied upon
privately owned property used for the same general purpose as such Facility, or
other liabilities or burdens with respect to such Facility or the operation
thereof, (B) changes in technology, in environmental standards or legal
requirements or in the economic availability of materials, supplies, equipment
or labor or (C) destruction of or damage to all or part of such Facility;

(ii) all or substantially all of a Facility shall have been condemned or taken
by eminent domain;

(iii) the construction or operation of a Facility shall have been enjoined or
shall have otherwise been prohibited by any order, decree, rule or regulation of
any court or of any federal, state or local regulatory body, administrative
agency or other governmental body; or

(iv) a Facility or portion thereof shall have been sold and the proceeds of sale
shall not have been reinvested as provided in the Guarantee.

SECTION 9.2. Company Direction of Optional Redemption. The Trustee shall call
Bonds for optional redemption when and only when it shall have been notified by
the Company to do so. The Company will give written notice of any optional
redemption to the Trustee and the Issuer as provided in Section 9.4 of this
Indenture.

SECTION 9.3. Selection of Bonds to be Called for Redemption; Partial Redemption.
Except as otherwise provided herein or in the Bonds, the particular Bonds to be
called for redemption shall be selected by the Trustee by lot or any other
customary random method determined by the Trustee to be fair and reasonable
provided that a portion of a Bond may be redeemed only in Authorized
Denominations. If less than all the Bonds are to be redeemed, such redemption
must be in an amount which will result in the Bonds that remain outstanding
being in Authorized Denominations.

SECTION 9.4. Notice of Redemption. (a) The Company shall deliver notice to the
Trustee and the Issuer of its intention to prepay the principal of, redemption
premium, if any, and interest on the Bonds and cause the Bonds to be called for
optional redemption at least ten (10) Business Days prior to the date the
Trustee gives notice to the Registered Owners of the Bonds of the proposed
redemption of the Bonds. The Trustee shall cause notice of any redemption of
Bonds hereunder, which notice shall be prepared by the Company, to be mailed by
first class mail, postage prepaid (except when DTC or a Securities Depository is
the Registered Owner of all of the Bonds and except for any person or entity
owning or providing evidence of ownership satisfactory to the Trustee of a legal
or beneficial ownership in at least $1,000,000 of principal

 

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amount of Bonds who so requests, in which cases, by certified mail, return
receipt requested), to the Registered Owners of all Bonds to be redeemed at the
registered addresses appearing in the Bond Register kept for such purpose
pursuant to Article II hereof. Each such notice shall (i) be mailed at least 30
days prior to the redemption date for Bonds, (ii) identify the Bonds to be
redeemed if less than all Bonds are to be redeemed (specifying the CUSIP
numbers, if any, assigned to the Bonds), (iii) specify the redemption date and
the redemption price, (iv) state whether the notice is conditional or not as
permitted by paragraph (b) hereof, and (v) state that on the redemption date the
Bonds called for redemption will be payable at the office of the Trustee
designated in such notice, that from that date, provided funds have been
deposited with the Trustee sufficient for redemption, interest will cease to
accrue and that no representation is made as to the accuracy or correctness of
the CUSIP numbers printed therein or on the Bonds; provided, however, that the
Bonds are registered with DTC or a successor Securities Depository, redemption
notices will be sent to Cede & Co. pursuant to the procedures set forth in the
DTC Letter of Representations or the procedures of such successor Securities
Depository. Any failure on the part of DTC or a successor Securities Depository
, a direct participant or indirect participant to give such notice to the Owner
or any defect therein shall not affect the sufficiency or validity of any
proceedings for the redemption of the Bonds. No defect affecting any Bond,
whether in the notice of redemption or mailing thereof (including any failure to
mail such notice), shall affect the validity of the redemption proceedings for
any other Bonds.

(b) Conditional Notice. If at the time of mailing of notice of an optional
redemption there shall not have been deposited with the Trustee moneys
sufficient to redeem all the Bonds called for redemption, such notice may state
that it is conditional, that is, subject to the deposit of the redemption moneys
with the Trustee on or prior to the redemption date, and such notice shall be of
no effect unless such moneys are so deposited on or prior to the redemption
date. If such redemption is not effectuated, the Trustee shall, at the expense
of the Company, within five days thereafter, give notice in the manner in which
the notice of redemption was given that such moneys were not so received and
shall rescind the redemption.

(c) Additional Notice of Redemption. In addition to the redemption notice
required above, if there is more than one Registered Owner of the Bonds, further
notice (the “Additional Notice”) shall be given by the Trustee as set out below.
No defect in the Additional Notice nor any failure to give all or any portion of
the Additional Notice shall in any manner defeat the effectiveness of a call for
redemption if notice is given as prescribed in paragraph (a) above.

(i) Each Additional Notice shall contain the information required in paragraph
(a) above for an official notice of redemption plus (A) the date of the Bonds as
originally issued; (B) the interest rate borne by each Bond being redeemed;
(C) the maturity date of each Bond being redeemed; and (D) any other descriptive
information needed to identify accurately the Bonds being redeemed.

(ii) Each Additional Notice shall be published one time in a financial newspaper
or journal which regularly carries notices of redemption of other obligations
similar to the Bonds, such publication to be made at least 30 days prior to the
date fixed for redemption.

(iii) Upon the payment of the redemption price of the Bonds being redeemed, each
check or other transfer of funds issued for such purpose shall bear the CUSIP
number identifying, by issue and maturity, the Bonds being redeemed with the
proceeds of such check or other transfer, provided that neither the Issuer, the
Company, nor the Trustee shall be deemed to have made any representation as to
the correctness of such CUSIP number.

(iv) Each Additional Notice shall be sent at least 30 days before the redemption
date by registered or certified mail, facsimile, or overnight delivery service
to the following registered

 

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securities depositories: The Depository Trust Company of New York, New York and
Philadelphia Depository Trust Company of Philadelphia, Pennsylvania and to such
other registered securities depositories as may be specified by the Company to
the Trustee in writing and to one or more national information services that
disseminate notices of redemption of obligations such as the Bonds as shall be
specified by the Company to the Trustee in writing.

(v) The Trustee’s agreement to give the additional notices specified in this
subsection (c) is made as a matter of courtesy and accommodation only and the
Trustee shall incur no liability to any person for its failure to give such
additional notices.

ARTICLE X

COVENANTS OF THE ISSUER

SECTION 10.1. Payment of Principal of, Redemption Premium, if any, and Interest
on Bonds; Appointment of Paying Agent. The Issuer covenants that it will
promptly pay or cause to be paid, the principal of, redemption premium, if any,
and interest on every Bond issued under this Indenture at the place, on the
dates and in the manner provided herein and in the Bond according to the true
intent and meaning thereof; provided, however, that the obligation of the Issuer
hereunder to make or cause to be made any payment to the Trustee in respect of
the principal of, redemption premium, if any, or interest on the Bonds shall be
reduced by the amount of moneys, if any, on deposit in the Bond Fund and
available to be applied by the Trustee toward the payment of the principal of,
redemption premium, if any, or interest on the Bonds. The principal of,
redemption premium, if any, and interest (except interest paid from the proceeds
from the sale of the Bonds) are payable solely from the Trust Estate, including
Revenues, which Revenues are specifically pledged and assigned for the payment
thereof in the manner and to the extent herein specified, and nothing in the
Bonds or this Indenture should be considered as assigning or pledging any funds
or assets of the Issuer other than the Trust Estate in the manner and to the
extent herein specified. Anything in this Indenture to the contrary
notwithstanding, it is understood that whenever the Issuer makes any covenant
involving financial commitments, it pledges no funds or assets other than the
Trust Estate in the manner and to the extent herein specified, but nothing
herein shall be construed as prohibiting the Issuer from using any other funds
or assets.

The Issuer shall, with the approval of the Company, appoint one or more Paying
Agents for such purpose, each such agent to be a national banking association, a
bank and trust company or a trust company. The Issuer hereby appoints the
Trustee as Paying Agent, such appointment and designation to remain in effect
until notice of change is filed with the Trustee. The Issuer shall give prompt
written notice to the Trustee of the designation of each such Paying Agent and
of its designated office location for purposes of such agency, and of any change
in the Paying Agent or of its designated office location. Any Paying Agent other
than the Trustee shall be a person which meets the requirements for
qualifications of a paying agent imposed by Section 13.2 hereof.

SECTION 10.2. Compliance with Laws. The Issuer covenants that it will faithfully
perform at all times any and all covenants, undertakings, stipulations and
provisions contained in this Indenture, in any and every Bond executed,
authenticated and delivered hereunder and in all resolutions pertaining thereto.
The Issuer covenants that it is duly authorized under the Constitution and laws
of the State, including particularly and without limitation the Act, to issue
Bonds authorized hereby and to execute this Indenture and to make the pledge and
covenants in the manner and to the extent herein set forth; that all action on
its part for the issuance of the Bonds and the execution and delivery of this
Indenture has been duly and effectively taken; and that the Bonds in the hands
of the holders and owners thereof are and will be valid and enforceable
obligations of the Issuer according to the import thereof.

 

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SECTION 10.3. Enforcement of Agreement; Prohibition Against Amendments of
Agreement; Notice of Default. The Issuer shall cooperate with the Trustee in
enforcing the payment of all amounts under the Agreement and shall require the
Company to perform its obligations under the Agreement. So long as no Event of
Default hereunder shall have occurred and be continuing, the Issuer may exercise
all its rights under the Agreement as amended or supplemented from time to time,
including the right to amend the Agreement; provided that it shall not amend the
Agreement without the consent of the Trustee pursuant to Section 15.3. The
Issuer shall give prompt notice to the Trustee of any default known to the
Issuer under the Agreement.

SECTION 10.4. Further Assurances. Except to the extent otherwise provided in
this Indenture, the Issuer shall not enter into any contract or take any action
by which the rights of the Trustee, the Bondholders or the Company may be
impaired and shall, from time to time, execute and deliver such further
instruments and take such further action as may be required to carry out the
purposes of this Indenture.

SECTION 10.5. Administration Expenses. It is understood and agreed that pursuant
to the provisions of Sections 5.04 and 5.07 of the Agreement, the Company agrees
to pay the Administration Expenses. All such payments under the Agreement which
are received by the Trustee shall not be paid into the Bond Fund, but shall be
segregated by the Trustee and expended solely for the purpose for which such
payments are received.

SECTION 10.6. Moneys to be Held in Trust. All moneys required to be deposited
with or paid to the Trustee or any Paying Agent for deposit into the Bond Fund,
the Construction Fund, or the Debt Service Reserve Fund under any provision of
this Indenture and all moneys withdrawn from the Bond Fund, the Construction
Fund, or the Debt Service Reserve Fund and held by any Paying Agent, shall be
held by the Trustee or such Paying Agent in trust, or deposited with or paid to
the Trustee for the redemption of Bonds, notice of which redemption has been
duly given, and for moneys deposited with or paid to the Trustee pursuant to
Article XVI hereof, shall, while held by the Trustee or any Paying Agent,
constitute part of the Trust Estate and be subject to the lien hereof. Any
moneys received by or paid to the Trustee pursuant to any provision of the
Agreement calling for the Trustee to hold, administer and disburse the same in
accordance with the specific provisions of the Agreement shall be held,
administered and disbursed pursuant to such provisions. The Issuer agrees that
if it shall receive any moneys pursuant to applicable provisions of the
Agreement, it will forthwith upon receipt thereof pay the same over to the
Trustee to be held, administered and disbursed by the Trustee in accordance with
the provisions of the Agreement pursuant to which the Issuer may have received
the same. Furthermore, if for any reason the Agreement ceases to be in force and
effect while any Bonds are outstanding, the Issuer agrees that if it shall
receive any moneys derived from the Project, it will forthwith upon receipt
thereof pay the same over to the Trustee to be held, administered and disbursed
by the Trustee in accordance with provisions of the Agreement that would be
applicable if the Agreement were then in force and effect, and if there be no
such provisions which would be so applicable, then the Trustee shall hold,
administer and disburse such moneys solely for the discharge of the Issuer’s
obligations under this Indenture.

SECTION 10.7. Rights of Company Under Agreement. Nothing herein contained shall
be deemed to impair the rights and privileges of the Company set forth in the
Agreement. The Issuer and the Trustee agree that the Company in its own name or
in the name of the Issuer may enforce all of the rights of the Issuer, all
obligations of the Trustee, and all of the Company’s rights provided for in this
Indenture.

 

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ARTICLE XI

EVENTS OF DEFAULT AND REMEDIES

SECTION 11.1. Events of Default Defined. Each of the following shall be an
“Event of Default” hereunder:

(a) Payment of the principal or redemption price of any Bond is not made when it
becomes due and payable at maturity or upon call for redemption; or

(b) Payment of any interest on any Bond is not made when it becomes due and
payable; or

(c) The occurrence and continuance of any “Event of Default” under the
Agreement; or

(d) Default in the payment of any other amount required to be paid under this
Indenture or in the performance or observance of any other of the covenants,
agreements or conditions contained in this Indenture, or in the Bonds issued
under this Indenture, and continuance thereof for a period of 90 days after
written notice specifying such failure and requesting that it be remedied shall
have been given to the Issuer and the Company by the Trustee, which may give
such notice in its discretion and shall give such notice at the written request
of the holders of not less than 25% in principal amount of the Bonds then
outstanding, unless the Trustee, or the Trustee and holders of a principal
amount of Bonds not less than the principal amount of Bonds the holders of which
requested such notice, as the case may be, shall agree in writing to an
extension of such period prior to its expiration; provided, however, that the
Trustee, or the Trustee and the holders of such principal amount of Bonds, as
the case may be, shall be deemed to have agreed to an extension of such period
if corrective action is instituted by the Issuer, or the Company on behalf of
the Issuer, within such period and is being diligently pursued; or

(e) The occurrence and continuance of any “Event of Default” under, and as
defined in, the Guarantee.

SECTION 11.2. Acceleration and Annulment Thereof. If any Event of Default occurs
and is continuing, the Trustee may, and upon written request of the owners of at
least 25% in principal amount of all Bonds then Outstanding shall, by notice in
writing to the Issuer and the Company, declare the principal of and accrued
interest on all Bonds then Outstanding to be immediately due and payable; and
upon such declaration the said principal, together with interest accrued thereon
to the date of acceleration, shall become due and payable immediately at the
place of payment provided therein, anything in the Indenture or in the Bonds to
the contrary notwithstanding. Upon the occurrence of any acceleration hereunder,
the Trustee shall immediately declare all payments under the Agreement pursuant
to Section 5.03 thereof to be due and payable immediately.

Immediately after any acceleration hereunder, the Trustee, to the extent it has
not already done so, shall notify in writing the Issuer, the Company, and the
Paying Agent of the occurrence of such acceleration. Upon the occurrence of any
acceleration hereunder, the Trustee shall notify by first class mail, postage
prepaid, the owners of all Bonds Outstanding of the occurrence of such
acceleration.

If, after the principal of the Bonds has become due and payable, all arrears of
interest upon the Bonds are paid by the Issuer, and the Issuer also performs all
other things in respect to which it may have been in default hereunder and pays
the reasonable charges of the Trustee and the Bondholders, including reasonable
and necessary attorneys’ fees and expenses, then, and in every such case, the
owners of a majority in principal

 

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amount of the Bonds then Outstanding, by written notice to the Issuer and to the
Trustee, may annul such acceleration and its consequences, and such annulment
shall be binding upon the Trustee and upon all owners of Bonds issued hereunder.
No such annulment shall extend to or affect any subsequent default or impair any
right or remedy consequent thereon. The Trustee shall forward a copy of any
notice from Bondholders received by it pursuant to this paragraph to the
Company. Immediately upon such annulment, the Trustee shall cancel, by notice to
the Company, any demand for prepayment of all amounts due under the Agreement
made by the Trustee pursuant to this Section. The Trustee shall promptly give
written notice of such annulment to the Issuer, the Company, the Collateral
Trustee, the Paying Agent, and, if notice of the acceleration of the Bonds shall
have been given to the Bondholders, shall give notice thereof to the
Bondholders.

SECTION 11.3. Other Remedies. If any Event of Default occurs and is continuing,
the Trustee, before or after the principal of the Bonds becomes immediately due
and payable, may enforce each and every right granted to it under the Agreement
and any supplements or amendments thereto. In exercising such rights and the
rights given the Trustee under this Article, the Trustee shall take such action
as, in the judgment of the Trustee applying the standards described in
Section 12.6, would best serve the interests of the Bondholders.

SECTION 11.4. Legal Proceedings by Trustee. If any Event of Default has occurred
and is continuing, the Trustee in its discretion may, and upon the written
request of the owners of a majority in principal amount of all Bonds then
Outstanding and receipt of indemnity to its satisfaction shall, subject to the
provisions of Article XII hereof, in its own name:

(i) By mandamus, or other suit, action or proceeding at law or in equity,
enforce all rights of the Bondholders, including the right to require the Issuer
to enforce any rights under the Agreement and to require the Issuer to carry out
any other provisions of this Indenture for the benefit of the Bank and the
Bondholders and to perform its duties under the Act;

(ii) Bring suit to enforce the Bonds;

(iii) By action or suit in equity require the Issuer to account as if it were
the trustee of an express trust for the Bondholders; and

(iv) By action or suit in equity enjoin any acts or things which may be unlawful
or in violation of the rights of the Bondholders.

SECTION 11.5. Discontinuance of Proceedings by Trustee. If any proceeding
commenced by the Trustee on account of any Event of Default is discontinued or
is determined adversely to the Trustee, then the Company, the Issuer, the
Trustee and the Bondholders shall be restored to their former positions and
rights hereunder as though no such proceedings had been commenced.

SECTION 11.6. Majority Holders May Direct Proceedings. The owners of a majority
in principal amount of the Bonds then Outstanding shall have the right, after
furnishing indemnity satisfactory to the Trustee, to direct the method and place
of conducting all remedial proceedings by the Trustee hereunder, provided that
(i) such directions shall not be otherwise than in accordance with law or the
provisions of this Indenture and (ii) the Trustee shall have the right to
decline to follow any such direction which in the reasonable opinion of the
Trustee conflicts with law or with the Indenture or would be unjustly
prejudicial to Bondholders not parties to such direction.

 

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SECTION 11.7. Limitations on Actions by Bondholders. No Bondholder shall have
any right to pursue any remedy hereunder unless:

(i) the Trustee shall have been given written notice of an Event of Default,

(ii) the owners of at least a majority in principal amount of all Bonds then
Outstanding shall have requested the Trustee, in writing, to exercise the powers
hereinabove granted or to pursue such remedy in its or their name or names,

(iii) the Trustee shall have been offered indemnity satisfactory to it against
reasonable costs, expenses and liabilities, including, without limitation,
reasonable costs and expenses of its counsel, except that no offer of
indemnification shall be required solely for a declaration of acceleration under
Section 11.2, and

(iv) the Trustee shall have failed to comply with such request within a
reasonable time.

Notwithstanding the foregoing provisions of this Section or any other provision
of this Indenture, the obligation of the Issuer shall be absolute and
unconditional to pay hereunder, but solely from the Revenues and other funds
pledged under this Indenture, the principal or redemption price of, and interest
on, the Bonds to the respective owners thereof on the respective due dates
thereof, and nothing herein shall affect or impair the right of action, which is
absolute and unconditional, of such owners to enforce such payment.

SECTION 11.8. Trustee May Enforce Rights Without Possession of Bonds. All rights
under the Indenture and the Bonds may be enforced by the Trustee without the
possession of any Bonds or the production thereof at the trial or other
proceedings relative thereto, and any proceeding instituted by the Trustee shall
be brought in its name for the ratable benefit of the owners of the Bonds.

SECTION 11.9. Remedies Not Exclusive. No remedy herein conferred is intended to
be exclusive of any other remedy or remedies, and each remedy is in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute.

SECTION 11.10. Delays and Omissions Not to Impair Rights. No delays or omission
in respect of exercising any right or power accruing upon any default shall
impair such right or power or be a waiver of such default, and every remedy
given by this Article may be exercised from time to time and as often as may be
deemed expedient.

SECTION 11.11. Application of Moneys in Event of Default. Any moneys received by
the Trustee under this Article shall be applied in the following order:

(i) To the payment of the reasonable costs and expenses of the Trustee,
including reasonable counsel fees and expenses, any disbursements of the Trustee
with interest thereon at the prime rate of the Trustee and its reasonable
compensation; and

(ii) To the payment of principal or redemption price (as the case may be) and
interest then owing on the Bonds, and in case such moneys shall be insufficient
to pay the same in full, then to the payment of principal or redemption price
and interest ratably, without preference or priority of one over another or of
any installment of interest over any other installment of interest; and

(iii) To the payment of reasonable costs and expenses of the Issuer, including
reasonable counsel fees, incurred in connection with the Event of Default.

 

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The surplus, if any, shall be paid to the Company.

SECTION 11.12. Trustee and Bondholders Entitled to All Remedies Under the Act.
It is the purpose of this Article to provide such remedies to the Trustee and
the Bondholders as may be lawfully granted under the provisions of the Act, but
should any remedy herein granted be held unlawful, the Trustee and the
Bondholders shall nevertheless be entitled to every other remedy granted
hereunder and every remedy provided by the Act. It is further intended that,
insofar as lawfully possible, the provisions of this Article shall apply to and
be binding upon any trustee or receiver appointed under applicable law.

 

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ARTICLE XII

THE TRUSTEE

SECTION 12.1. Acceptance of Trust. The Trustee accepts and agrees to execute the
trusts hereby created, but only upon the additional terms set forth in this
Article XII, to all of which the Issuer, the Trustee (as Trustee, Paying Agent,
and Bond Registrar), the Company and the Bondholders agree.

SECTION 12.2. No Responsibility for Recitals, etc. The recitals, statements and
representations in this Indenture or in the Bonds, save only the Trustee’s
Certificate of Authentication upon the Bonds, have been made by the Issuer and
not by the Trustee; and the Trustee shall be under no responsibility for the
correctness thereof, or for the validity, priority, recording or re-recording,
filing or re-filing of this Indenture or the Agreement or any financing
statements or amendments thereto, other than continuation statements and
amendments necessitated by factual changes of which the Trustee has actual
knowledge (e.g. name changes or changes in place of incorporation), or for
insuring the Project or collecting any insurance moneys, or for the validity of
the execution by the Issuer of this Indenture or of any supplements thereto or
instruments of further assurance, or for the validity or sufficiency of the
security afforded by this Indenture or the Bonds issued hereunder or intended to
be secured hereby, or as to the maintenance of the security hereof. The Trustee
shall not be bound to ascertain or inquire as to the performance or observance
of any covenants, conditions or agreements on the part of the Issuer or on the
part of the Company hereunder or under the Agreement, except as expressly
provided herein or in the Agreement.

The Trustee shall not be accountable for the application of the proceeds of any
Bonds authenticated or delivered hereunder which has been made by or on behalf
of the Company or the Issuer.

SECTION 12.3. Trustee May Act Through Agents; Answerable Only for Willful
Misconduct or Negligence. The Trustee may exercise any powers hereunder and
perform any duties required of it through attorneys, agents, officers or
employees, and shall be entitled to rely on the advice of Counsel concerning all
questions hereunder or under the Agreement. The Trustee shall not be answerable
for the default, negligence or misconduct of any attorney or agent selected by
it with reasonable care. Except as otherwise provided herein, the Trustee shall
not be answerable for the exercise of any discretion or power under the
Indenture nor for anything whatsoever in connection with the trust hereunder,
except only its own willful misconduct or negligence.

SECTION 12.4. Compensation. The Company shall pay to the Trustee such
compensation for its services hereunder as is specified in the Agreement or such
other written agreement between the Company and the Trustee, and also all its
reasonable expenses and disbursements, including the reasonable fees, costs and
expenses of its counsel (including in-house counsel and legal staff). If the
Company shall have failed to make any such payment within a reasonable time, the
Trustee shall have, in addition to any other rights hereunder, a claim, prior to
the Bondholders, for the payment of its compensation and the reimbursement of
its expenses (both ordinary and extraordinary) and any advances made by it upon
the moneys and obligations in the Bond Fund, except for moneys or obligations
held by the Trustee for the payment of particular Bonds. When the Trustee incurs
expenses or renders services in connection with an Event of Default specified in
Section 6.01(c) of the Agreement, the expenses (including the reasonable charges
and expenses of its counsel) and the compensation for the services are intended
to constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.

The provisions of this Section shall survive the termination of this Indenture.

 

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SECTION 12.5. Notice of Default; Right to Investigate. The Trustee shall, within
the later of (i) 30 days after the occurrence thereof, or (ii) 15 days after it
obtains actual knowledge thereof, give written notice by first class mail to
registered owners of Bonds of all Events of Default known to the Trustee, unless
such Events of Default have been remedied. The Trustee shall not be deemed to
have notice of any Event of Default under Section 11.1(c), (d), or (e) (other
than payment defaults under Sections 6.01(a) of the Agreement) unless notified
in writing of such default by the owners of at least 25% in principal amount of
all Bonds then Outstanding or if it has actual notice thereof. The Trustee may,
however, at any time require of the Issuer full information as to the
performance of any covenant hereunder; and, if information satisfactory to it is
not forthcoming, the Trustee may make or cause to be made, at the expense of the
Company, an investigation into the affairs of the Issuer related to this
Indenture. Copies of any notice required by this Section 12.5 shall also be sent
to each Paying Agent.

SECTION 12.6. Obligation to Act. Except during the continuance of an Event of
Default, the Trustee shall undertake to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee. If any Event
of Default shall have occurred and be continuing, the Trustee shall exercise
such of the rights and remedies vested in it by this Indenture and shall use the
same degree of care in their exercise as a prudent person would exercise or use
in the circumstances in the conduct of his own affairs. The Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Bondholders pursuant to this
Indenture unless such Bondholders shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities which
might be incurred in compliance with such request or direction. Wherever, in
this Indenture provision is made for indemnity by the owners of the Bonds, if
the owner providing such indemnity has an aggregate net worth or net asset value
of at least $50,000,000, as set forth in its most recent audited financial
statements or as otherwise satisfactorily demonstrated to the Trustee, the
Trustee may not require any indemnity bond or other security for such indemnity.
In any case where more than one owner is providing indemnity, such indemnity
shall be several and not joint and, as to each owner, such indemnity obligations
shall not exceed its percentage interest of outstanding Bonds.

SECTION 12.7. Reliance. The Trustee may act on any requisition, resolution,
notice, telegram, request, consent, direction, waiver, certificate, statement,
affidavit, voucher, bond, or other paper or document which it in good faith
believes to be genuine and to have been passed or signed by the proper persons
or to have been prepared and furnished pursuant to any of the provisions of the
Indenture, and the Trustee shall be under no duty to make any investigation as
to any statement contained in any such instrument, but may accept the same as
conclusive evidence of the accuracy of such statement.

SECTION 12.8. Trustee May Deal in Bonds. The Trustee may in good faith buy,
sell, own, hold and deal in any of the Bonds and may join in any action which
any Bondholders may be entitled to take with like effect as if the Trustee were
not a party to this Indenture. The Trustee may also engage in or be interested
in any financial or other transaction with the Issuer or the Company.

SECTION 12.9. Resignation of Trustee. The Trustee may resign and be discharged
of the trusts created by the Indenture by written resignation filed with the
Issuer and the Company not fewer than 60 days before the date when it is to take
effect. Such resignation shall take effect only upon the appointment and
acceptance of a successor trustee.

SECTION 12.10. Removal of Trustee. Any Trustee hereunder may be removed at any
time by an instrument appointing a successor to the Trustee so removed, executed
by the Majority Holders and filed with the Trustee and the Issuer. A successor
Trustee may be appointed by the Majority Holders in the same instrument. Subject
to Section 12.11 hereof, if a successor Trustee does not take office within 60
days after

 

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the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
the Issuer, or the holders of at least 25% in principal amount of the
outstanding Bonds may petition, at the expense of the Company, a court of
competent jurisdiction for the appointment of a successor Trustee. Such removal
shall take effect only upon the appointment and acceptance of a successor
Trustee.

SECTION 12.11. Appointment of Successor Trustee. If the Trustee or any successor
trustee resigns or is removed or dissolved, or if its property or business is
taken under the control of any state or federal court or administrative body, a
vacancy shall forthwith exist in the office of the Trustee, and the Issuer, at
the direction of the Company, shall appoint a successor and shall mail notice of
such appointment to registered owners of the Bonds. If the Issuer fails to make
such appointment promptly, the owners of a majority in principal amount of the
Bonds then Outstanding may do so.

SECTION 12.12. Qualification of Successor. A successor trustee shall be a
national banking association with trust powers or a bank and trust company or a
trust company having capital and surplus of at least $50,000,000 and rated
Baa3/P-3 or better by Moody’s or be otherwise acceptable to Moody’s if the Bonds
are then rated by Moody’s or BBB- or better by S&P or be otherwise acceptable by
S&P if the Bonds are then rated by S&P, if there be one able and willing to
accept the trust on reasonable and customary terms.

SECTION 12.13. Instruments of Succession. Any successor trustee shall execute,
acknowledge and deliver to the Issuer an instrument accepting such appointment
hereunder; and thereupon such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the estates, properties,
rights, powers, trusts, duties and obligations of its predecessor in the trust
hereunder, with like effect as if originally named Trustee herein. The Trustee
ceasing to act hereunder shall pay over to the successor trustee all moneys held
by it hereunder; and, upon request of the successor trustee, the Trustee ceasing
to act and the Issuer shall execute and deliver an instrument transferring to
the successor trustee all the estates, properties, rights, powers and trusts
hereunder of the Trustee ceasing to act.

SECTION 12.14. Merger of Trustee. Any corporation or association into which any
Trustee hereunder may be merged or with which it may be consolidated, or any
corporation or association resulting from any merger or consolidation to which
any Trustee hereunder shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor trustee under the Indenture, without the execution or filing of any
paper or any further act on the part of the parties hereto, anything herein to
the contrary notwithstanding.

SECTION 12.15. Trustee Not Required to Expend or Risk Own Funds. No provision of
this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers.

SECTION 12.16. Right of Trustee to Pay Taxes and Other Charges. In case any tax,
assessment or governmental or other charge upon any part of the trust estate is
not paid as required herein, the Trustee may, but shall not be required to, pay
such tax, assessment or governmental or other charge, without prejudice,
however, to any rights of the Trustee or the Bondholders hereunder arising in
consequence of such failure; and any amount at any time so paid under this
Section 12.16, with interest thereon from the date of payment at the prime rate
of the Trustee, shall become so much additional indebtedness secured by this
Indenture, and the same shall be paid out of the proceeds of Revenues collected
from the property herein conveyed, if not otherwise caused to be paid; but the
Trustee shall be under no obligation to make any such payment unless it shall
have been requested to do so by the owners of at least 25% in aggregate
principal amount of all Bonds then Outstanding and shall have been provided with
adequate funds for the purpose of such payment.

 

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SECTION 12.17. Trust Estate may be Vested in Separate or Co-Trustee. It is the
purpose of this Indenture that there shall be no violation of any law of any
jurisdiction (including particularly the law of the State) denying or
restricting the right of banking corporations or associations to transact
business as trustee in such jurisdiction. It is recognized that in case of
litigation under this Indenture or the Agreement, and in particular in case of
the enforcement of either on default, or in case the Trustee deems that by
reason of any present or future law of any jurisdiction it may not exercise any
of the powers, rights or remedies herein granted to the Trustee or hold title to
the trust estate, in trust, as herein granted, or take any other action which
may be desirable or necessary in connection therewith, it may be necessary that
the Trustee appoint an additional individual or institution as a separate or
co-trustee. The expense of any separate or co-trustee shall be borne by the
Company. The following provisions of this Section 12.17 are adapted to these
ends.

In the event that the Trustee appoints an additional individual or institution
as a separate or co-trustee, each and every remedy, power, right, claim, demand,
cause of action, immunity, estate, title, interest and lien expressed or
intended by this Indenture to be exercised by or vested in or conveyed to the
Trustee with respect thereto shall be exercisable by and vested in such separate
or co-trustee but only to the extent necessary to enable such separate or
co-trustee to exercise such powers, rights and remedies, and every covenant and
obligation necessary to the exercise thereof by such separate or co-trustee
shall run to and be enforceable by either of them.

Should any deed, conveyance or instrument in writing from the Issuer be required
by the separate trustee or co-trustee so appointed by the Trustee for more fully
and certainly vesting in and confirming to him such properties, rights, powers,
trusts, duties and obligations, any and all such deeds, conveyances and
instruments in writing shall, on request, be executed, acknowledged and
delivered by the Issuer. In case any separate trustee or co-trustee, or a
successor to either, shall become incapable of acting, resign or be removed, all
the estate properties, rights, powers, trusts, duties and obligations of such
separate trustee or co-trustee, so far as permitted by law, shall vest in and be
exercised by the Trustee until the appointment of a new trustee or successor to
such separate trustee or co-trustee.

No trustee hereunder shall be personally liable by reason of any act or omission
of any other trustee hereunder.

SECTION 12.18. Reliance Upon Counsel. The Trustee may consult with Counsel
satisfactory to it, and the opinion of such Counsel selected by the Trustee
shall be full and complete authorization and protection in respect of any action
taken or suffered by such Trustee hereunder in good faith and in reliance
thereon.

SECTION 12.19. No Implied Duties. The Trustee shall be obligated to perform such
duties and only such duties as are herein and in the Bonds specifically set
forth and as are required by applicable law and no implied duties or obligations
of the Trustee shall be read into this Indenture or the Bonds. The permissive
rights of the Trustee to do things enumerated in this Indenture shall not be
construed as a duty.

SECTION 12.20. No Responsibility for Securities Laws. The Trustee shall have no
responsibility with respect to any information in any offering memorandum or
other disclosure material distributed with respect to the Bonds or for
compliance with securities laws in connection with the issuance and sale of the
Bonds.

SECTION 12.21. No Responsibility for Yield Covenants. Except as specified in
Section 8.5 hereof, the Trustee shall have no responsibility with respect to
compliance by the Issuer or the Company with Section 148 of the Code or any
covenant in this Indenture or in the Agreement regarding yields on investments.

 

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SECTION.12.22. No Responsibility for Filings. The Trustee shall not be
responsible for (i) the validity, priority, recording, rerecording, filing, or
refiling of this Indenture or any supplemental indenture; (ii) any instrument or
document of further assurance or collateral assignment; (iii) any financing
statements or amendments or modifications thereto, other than continuation
statements and amendments necessitated by factual changes of which the Trustee
has actual knowledge (e.g. name changes or changes in place of incorporation);
(iv) the validity of the execution of the Issuer of this Indenture or any
supplemental indenture or documents of further assurance; (v) the sufficiency of
the security of the Bonds issued hereunder; and (vi) the value of or title to
the Project.

ARTICLE XIII

THE PAYING AGENT

SECTION 13.1. The Paying Agent. (a) The Paying Agent shall agree to

(i) hold all sums held by it for the payment of the principal or redemption
price of, or interest on, Bonds in trust for the benefit of the owners of such
Bonds until such sums shall be paid to such owners or otherwise disposed of as
herein provided;

(ii) at any time during the continuance of any default in the payment of
principal or redemption price of or interest on the Bonds, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in trust
by such Paying Agent; and

(iii) keep such books and records as shall be consistent with prudent industry
practice and to make such books and records available for inspection by the
Issuer, the Trustee, the Bank, and the Company at all reasonable times.

(b) The Paying Agent shall be a corporation duly organized under the laws of the
United States of America or any state or territory thereof, or a bank with trust
powers or a trust company having a combined capital stock, surplus and undivided
profits of at least $50,000,000 and authorized by law to perform all the duties
imposed upon it by this Indenture. The Paying Agent may at any time resign and
be discharged of the duties and obligations created by this Indenture by giving
at least 60 days’ notice to the Issuer, the Trustee, and the Company. In the
event that the Issuer, at the request of the Company, shall fail to appoint a
successor Paying Agent, upon the resignation or removal of the Paying Agent, the
Trustee shall either appoint a Paying Agent or itself act as Paying Agent until
the appointment of a successor Paying Agent. Any successor Paying Agent shall
either be rated Baa/P-3 or better by Moody’s or be otherwise acceptable to
Moody’s if the Bonds are then rated by Moody’s. The Paying Agent may be removed
at any time by an instrument signed by the Company, filed with the Issuer and
the Trustee.

In the event of the resignation or removal of the Paying Agent, the Paying Agent
shall deliver any Bonds and moneys held by it in such capacity to its successor
or, if there is no successor, to the Trustee.

(c) The Paying Agent in performing its duties hereunder shall be entitled to the
same protective provisions in the performance of its duties as are specified in
Article XII of this Indenture with respect to the Trustee hereunder to the same
extent and as fully for all intents and purposes as though the Paying Agent had
been expressly named therein in place of such Trustee and as though the
applicable provisions of Article XII of this Indenture had been set forth herein
at length.

SECTION 13.2. Notices. The Trustee shall, within 30 days of the resignation or
removal of the Paying Agent or the appointment of a successor Paying Agent, give
notice thereof by first class mail, postage prepaid, to the owners of the Bonds.

 

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ARTICLE XIV

ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP

SECTION 14.1. Acts of Bondholders; Evidence of Ownership. Except as otherwise
stated herein, any action to be taken by Bondholders may be evidenced by one or
more concurrent written instruments of similar tenor signed or executed by such
Bondholders (or their beneficial owners) in person or by an agent appointed in
writing. The initial purchasers of the Bonds from the Underwriter are hereby
acknowledged by the Trustee as the beneficial owners thereof. The fact and date
of the execution by any person of any such instrument may be proved by
acknowledgment before a notary public or other officer empowered to take
acknowledgments or by an affidavit of a witness to such execution. Where such
execution is by an officer of a corporation or a member of a partnership, on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his 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. The ownership of the Bonds shall be proved by the Bond
Register. Any action by the owner of any Bond shall bind all future owners of
the same Bond in respect of anything done or suffered by the Issuer or the
Trustee in pursuance thereof.

ARTICLE XV

AMENDMENTS AND SUPPLEMENTS

SECTION 15.1. Amendments and Supplements Without Bondholders’ Consent. This
Indenture may be amended or supplemented at any time and from time to time,
without the consent of the Bondholders, but with the consent of the Paying
Agent, if the amendment or supplement would materially adversely affect or alter
the duties or obligations of the Paying Agent under this Indenture, by a
supplemental indenture authorized by a resolution of the Issuer and filed with
the Trustee, for one or more of the following purposes:

(i) to add additional covenants of the Issuer or to surrender any right or power
herein conferred upon the Issuer;

(ii) for any purpose not inconsistent with the terms of this Indenture or to
cure any ambiguity or to correct or supplement any provision contained herein or
in any supplemental indenture which may be defective or inconsistent with any
other provision contained herein or in any supplemental indenture, or to make
such other provisions in regard to matters or questions arising under this
Indenture which shall not adversely affect the interests of the owners of the
Bonds;

(iii) to permit the Bonds to be converted to certificateless securities or vice
versa or securities represented by a master certificate held in trust, ownership
of which, in either case, is evidenced by book entries on the books of the Bond
Registrar, for any period of time, or to conform to the procedures of the
Securities Depository to effect the book-entry system set forth in Section 2.13
hereof;

(iv) to permit the appointment of a co-trustee under this Indenture;

(v) to authorize different authorized denominations of the Bonds and to make
correlative amendments and modifications to this Indenture regarding
exchangeability of Bonds of different authorized denominations, redemptions of
portions of Bonds of particular authorized denominations and similar amendments
and modifications of a technical nature;

 

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(vi) to modify, alter, supplement or amend this Indenture in such manner as
shall permit the qualification hereof under the Trust Indenture Act of 1939, as
from time to time amended;

(vii) to modify, alter, amend or supplement this Indenture in any other respect
which is not materially adverse to the Bondholders; and

(viii) to conform to the requirements of any Rating Service.

Before the Issuer and the Trustee shall enter into any supplemental indenture
pursuant to this Section, there shall have been delivered to the Trustee a
Favorable Opinion stating the requirements of such opinion and also stating that
such supplemental indenture will, upon the execution and delivery thereof, be
valid and binding upon the Issuer in accordance with its terms.

SECTION 15.2. Amendments With Bondholders’ Consent. This Indenture may be
amended or supplemented at any time or from time to time, except with respect to
(i) the principal, redemption price , and interest payable upon any Bonds,
(ii) the Interest Payment Dates, the dates of maturity or the redemption
provisions of any Bonds, and (iii) this Article, by a supplemental indenture
consented to by the Company, and if the amendment or supplement would materially
adversely affect or alter the duties or obligations of the Paying Agent under
this Indenture, with the consent of the Paying Agent, and approved by the
Majority Holders which would be affected by the action proposed to be taken.
This Indenture may be amended with respect to the matters enumerated in clauses
(i) through (iii) of the preceding sentence with the unanimous consent of all
Bondholders, the Company and the Paying Agent and the Trustee, if required by
the preceding sentence of this Section.

Before the Issuer and the Trustee shall enter into any supplemental indenture
pursuant to this Section, there shall have been delivered to the Trustee a
Favorable Opinion stating the requirements of such opinion and also stating that
such supplemental indenture will, upon the execution and delivery thereof, be
valid and binding upon the Issuer in accordance with its terms.

SECTION 15.3. Amendment of Agreement. The Issuer and the Company may enter into,
with the consent of the Trustee but without the consent of the holders of the
Bonds, any amendment, change, addition to, consent, waiver, or modification of
the Agreement (i) to cure any ambiguity, formal defect, omission or inconsistent
provisions , (ii) to conform to the requirements of the Indenture or the Rating
Service, or (iii) to make any other change that does not adversely affect the
interest of the Bondholders. If the Issuer and the Company propose to amend the
Agreement in such a manner as would adversely affect the interests of the
Bondholders, the Trustee shall notify Bondholders of the proposed amendment and
may consent thereto with the consent of at least a majority in aggregate
principal amount of the Bonds then Outstanding which would be affected by the
action proposed to be taken; provided, that the Trustee shall not, without the
unanimous consent of the owners of all Bonds then Outstanding, consent to any
amendment which would (i) decrease the payments payable, or change the date
payments are so payable, under Section 5.03 of the Agreement, (ii) reduce the
stated term of the Agreement, (iii) reduce the Company’s obligations under
Section 5.03 of the Agreement, or (iv) reduce the aforesaid aggregate principal
amount of the Bonds, the owners of which are required to consent to such an
amendment.

SECTION 15.4. Amendment of Guarantee. The Guarantee may be amended only in
accordance with the provisions thereof.

SECTION 15.5. Trustee Authorized to Join in Amendments and Supplements; Reliance
on Counsel. The Trustee is authorized to join with the Issuer in the execution
and delivery of any supplemental indenture or amendment permitted by this
Article and in so doing shall be fully protected by a Favorable Opinion that
such supplemental indenture or amendment is so permitted and has been duly
authorized by the Issuer and that all things necessary to make it a valid and
binding agreement have been done.

 

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SECTION 15.6. Consent of Company. Anything herein to the contrary
notwithstanding, so long as the Company is not in default under the Agreement, a
supplemental indenture under this Article which affects any right of the Company
shall not become effective unless and until the Company shall have consented in
writing to the execution and delivery of such supplemental indenture.

ARTICLE XVI

DEFEASANCE

SECTION 16.1. Defeasance. (a) If the Issuer shall pay or cause to be paid to the
holders and owners of the Bonds the principal of and interest to become due
thereon at the times and in the manner stipulated therein, and if the Issuer
shall keep, perform and observe all and singular the covenants and promises in
the Bonds and in this Indenture expressed as to be kept, performed and observed
by it on its part and shall pay or cause to be paid all other sums payable
hereunder by the Issuer, then these presents and the estate and rights hereby
granted shall cease, terminate and be void, and thereupon the Trustee shall
cancel and discharge the lien of this Indenture, and execute and deliver to the
Issuer such instruments in writing as shall be requisite to satisfy the lien
hereof, and reconvey to the Issuer the estate hereby conveyed, and assign and
deliver to the Issuer any property at the time subject to the lien of this
Indenture which may then be in its possession, except moneys or Governmental
Obligations held by it for the payment of the principal of and interest on the
Bonds.

(b) Provision for the payment of Bonds shall be deemed to have been made when
the Trustee holds in the Bond Fund, in trust and irrevocably set aside
exclusively for such payment, (i) moneys sufficient to make such payment of
principal, redemption premium, if any, and interest on the Bonds; and/or
(ii) noncallable, nonprepayable Governmental Obligations (provided that in
either case the Trustee shall have received a Favorable Opinion) maturing as to
principal and interest in such amounts and at such times as will provide
sufficient moneys (without consideration of any reinvestment thereof) to make
such payment of principal, redemption premium, if any, and interest on the
Bonds.

No Bonds in respect of which a deposit under clause (i) or (ii) above has been
made shall be deemed paid within the meaning of this Article unless the Trustee
is satisfied that the amounts deposited are sufficient to make all payments that
might become due on the Bonds, with respect to which the Trustee may rely on a
verification certificate or report of independent certified public accountants,
a copy of which certificate or report shall also be furnished to Moody’s, if the
Bonds are then rated by Moody’s and/or S&P, if the Bonds are then rated by S&P.
Neither the obligations nor moneys deposited with the Trustee pursuant to this
Section shall be withdrawn or used for any purpose other than, and shall be
segregated and held in trust for, the payment of the principal, redemption price
and interest on the Bonds with respect to which such deposit has been made. In
the event that such moneys or obligations are to be applied to the payment of
principal or redemption price of any Bonds more than 60 days following the
deposit thereof with the Trustee, the Trustee shall mail a notice to the owners
of the Bonds to be redeemed or deemed paid or redeemed, stating that such moneys
or obligations have been deposited and identifying the Bonds for the payment of
which such moneys or obligations are being held to all owners of Bonds for the
payment of which such moneys or obligations are being held at their registered
addresses and to S&P, if the Bonds are then rated by S&P, and Moody’s, if the
Bonds are then rated by Moody’s.

 

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(c) Anything in Article XVI to the contrary notwithstanding, if moneys or
Governmental Obligations have been deposited or set aside with the Trustee
pursuant to this Article for the payment of the principal, or redemption price
of the Bonds and the interest thereon and the principal or redemption price of
such Bonds and the interest thereon shall not have in fact been actually paid in
full, no amendment to the provisions of this Article shall be made without the
consent of the owner of each of the Bonds affected thereby.

The Issuer or the Company may at any time surrender to the Trustee for
cancellation by it any Bonds previously authenticated and delivered hereunder,
which the Issuer or the Company may have acquired in any manner whatsoever, and
such Bonds, upon such surrender and cancellation, shall be deemed to be paid and
retired.

ARTICLE XVII

MISCELLANEOUS

SECTION 17.1. No Personal Recourse. No recourse shall be had for any claim based
on the Agreement, the Indenture or the Bonds against any member, officer or
employee, past, present or future, of the Issuer or of any successor body as
such, either directly or through the Issuer or any such successor body, under
any constitutional provision, statute or rule of law, or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise.

SECTION 17.2. Deposit of Funds for Payment of Bonds. If the principal or
redemption price of any Bonds becoming due, either at maturity or by call for
redemption or otherwise, together with all interest accruing thereon to the due
date, has been paid or provision therefor made in accordance with Section 16.1,
all interest on such Bonds shall cease to accrue on the due date and all
liability of the Issuer with respect to such Bonds shall likewise cease, except
as hereinafter provided. Thereafter the owners of such Bonds shall be restricted
exclusively to the funds so deposited for any claim of whatsoever nature with
respect to such Bonds, and the Trustee shall hold such funds in trust for such
owners.

Moneys which remain unclaimed two years after the due date shall, subject to any
applicable provisions of Title 6 of the Texas Property Code, at the written
request of the Company, and if the Company is not, at the time, to the knowledge
of the Trustee, in default with respect to any covenant in the Agreement or the
Bonds, be paid to the Company pursuant to its payment instructions, and the
owners of the Bonds for which the deposit was made shall thereafter be limited
to a claim against the Company. Such moneys shall be held in trust uninvested or
invested in Governmental Obligations maturing the next day.

SECTION 17.3. No Rights Conferred on Others. Nothing herein contained shall
confer any right upon any person other than the parties hereto, the Company, the
Bank and the owners of the Bonds.

SECTION 17.4. Severability. If any term or provision of this Indenture or the
Bonds or the application thereof for any reason or circumstance shall to any
extent be held invalid or unenforceable, the remaining provisions or the
application of such term or provision to persons and situations other than those
as to which it is held invalid or unenforceable, shall not be affected thereby,
and each term and provision hereof and thereof shall be valid and enforced to
the fullest extent permitted by law.

SECTION 17.5. Notices. Unless otherwise provided hereunder or in the Agreement,
all notices, certificates or other communications hereunder to be given by any
of the following parties to any of the other following parties shall be deemed
to have been sufficiently given and received by such parties only upon

 

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actual receipt and delivery thereof by mail, overnight delivery, by Electronic
Notice, or by telephone, confirmed in writing, to the relevant party as follows:

 

Company:    Microgy Holdings, LLC    One Cate Street, 4th Floor    Portsmouth,
New Hampshire 03801    Attention: Richard E. Kessel    Fax #: (603)431-2650   
With a copy to:    General Counsel    Fax #: (603)433-6372 Issuer:    Gulf Coast
Industrial Development Authority    910 Bay Area Boulevard    Houston, Texas
77058    Fax #: (281)488-3331    Attention: President Trustee; Paying Agent;
Bond Registrar:   

Wells Fargo Bank, National Association

4 Penn Center, Suite 810

1600 JFK Boulevard

Philadelphia, Pennsylvania 19103

Fax#: (215)861-9460

Attention: Corporate Trust Services Group

               Any Paying Agent other than the Trustee:    At the address
designated to the Issuer and the Trustee

All notices or other communications by the Trustee to any Bondholder hereunder
shall be deemed to have been sufficiently given and received by such Bondholder
upon the mailing thereof by first class mail.

The Issuer, the Company, the Trustee, the Paying Agent, and the Bond Registrar
may, by notice given hereunder, designate any further or different addresses to
which subsequent notices, certificates or other communications shall be sent.

If the Company fails to timely make or pay any payment hereunder or under the
Agreement or upon notification by the Internal Revenue Service that the interest
on the Bonds is, or may be, subject to federal income taxation, the Trustee
promptly shall inform the Division of such an occurrence, by sending written
notice to the following address:

Office of the Governor of the State of Texas

Texas Economic Development and Tourism Office

P.O. Box 12428

Austin, Texas 78711

Attention: Executive Director

or the latest address specified by the Division in writing

 

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SECTION 17.6. Successors and Assigns. All the covenants, promises and agreements
in this Indenture contained by or on behalf of the Issuer, or by or on behalf of
the Trustee, shall bind and inure to the benefit of their respective successors
and assigns, whether so expressed or not.

SECTION 17.7. Headings for Convenience Only. The descriptive headings in this
Indenture are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.

SECTION 17.8. Counterparts. The Indenture may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original;
but such counterparts shall together constitute but one and the same instrument.

SECTION 17.9. Applicable Law. This Indenture shall be governed by and construed
in accordance with the laws of the State; provided, however, that the rights,
duties, immunities and standards of care relating to the Trustee shall be
governed by the law of the jurisdiction in which its Principal Office is
located.

SECTION 17.10. Notice of Change. The Trustee shall give notice to Moody’s (if
the Bonds are then rated by Moody’s) at 99 Church Street, New York, NY 10007,
Attention: Structured Transactions Group, Corporate Department, and S&P (if the
Bonds are then rated by S&P) at 55 Water Street, New York, New York 10041, of
any of the following events:

(i) a change in the Trustee or Paying Agent;

(ii) an amendment to the Indenture or the Agreement; or

(iii) payment or provision therefor of all the Bonds.

The Trustee makes this covenant as a matter of courtesy and accommodation only
and shall not be liable to any Person for any failure to comply therewith.

SECTION 17.11. Payments Due on non-Business Days. In any case where the date of
payment of interest on or principal of any Bonds or the date fixed for
redemption of any Bonds or any Purchase Date shall not be a Business Day, then
payment of such interest or principal and any redemption premium or Purchase
Price need not be made by such Paying Agent on such date but may be made on the
next succeeding Business Day with the same force and effect as if made on the
date of maturity or the date fixed for redemption or the Purchase Date, and no
interest shall accrue for the period after such date.

 

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IN WITNESS WHEREOF, the Issuer has caused these presents to be signed in its
name and behalf by the President and its corporate seal to be hereunto affixed
and attested by the Secretary, and, to evidence its acceptance of the trust
hereby created, the Trustee has caused these presents to be signed in its behalf
by its duly authorized officers.

 

      GULF COAST INDUSTRIAL DEVELOPMENT AUTHORITY       By:  

/s/ Ron Crowder

ATTEST:       President By:  

/s/ [illegible]

        Secretary       [SEAL]      

 

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WELLS FARGO BANK, NATIONAL ASSOCIATION,     as Trustee By:  

/s/ Marvin Kierstead

Title:   Vice President

 

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EXHIBIT A TO THE

TRUST INDENTURE

FORM OF BOND

 

No. R-      $             

THE FOLLOWING TWO BRACKETED PARAGRAPHS ARE TO BE DELETED IF BOND IS NOT BOOK
ENTRY ONLY:

[Unless this Bond is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”) to the Issuer or its agent for
registration of transfer, exchange, or payment, and any Bond issued is
registered in the name of Cede & Co. or in such other name as is requested 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.

As provided in the Indenture referred to herein, until the termination of the
system of book-entry-only transfers through DTC, and notwithstanding any other
provision of the Indenture to the contrary, this Bond may be transferred, in
whole but not in part, only to a nominee of DTC, or by a nominee of DTC to DTC
or a nominee of DTC, or by DTC or a nominee of DTC to any successor securities
depository or any nominee thereof.]*

UNITED STATES OF AMERICA

STATE OF TEXAS

GULF COAST INDUSTRIAL DEVELOPMENT AUTHORITY

ENVIRONMENTAL FACILITIES REVENUE BONDS

(MICROGY HOLDINGS PROJECT) SERIES 2006

 

Maturity Date:                                 CUSIP                      Dated
Date: October 1, 2006    Issue Date:                     , 2006    Registered
Owner:    Principal Amount: $                Interest Rate:             %   

 

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* To be printed only on definitive Bonds

The GULF COAST INDUSTRIAL DEVELOPMENT AUTHORITY (the “Issuer”), a nonstock,
nonprofit industrial development corporation existing under the laws of the
State of Texas particularly the Development Corporation Act of 1979, as amended,
Article 5190.6, Vernon’s Texas Civil Statutes (the “Act”), and acting on behalf
of the Gulf Coast Waste Disposal Authority (the “Governmental Unit”), for

 

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value received, hereby promises to pay (but only out of the sources hereinafter
mentioned) to the Registered Owner set forth above, or registered assigns, on
the Maturity Date, unless this Bond shall have been called for redemption in
whole or in part, upon surrender hereof, the Principal Amount set forth above
and to pay (but only out of the sources hereinafter mentioned) to the Registered
Owner, or registered assigns, interest thereon at the rate set forth above
calculated on the basis of a 360-day year of twelve 30-day months from the most
recent Interest Payment Date (hereinafter defined) to which interest has been
paid or duly provided for, or from the date of authentication hereof if such
date is on an Interest Payment Date to which interest has been paid or duly
provided for, or from the Issue Date specified above if no interest has been
paid or duly provided for, such payments of interest to be made on each Interest
Payment Date until the principal or redemption price hereof has been paid or
duly provided for as aforesaid. The principal or redemption price of this Bond
(or of a portion of this Bond, in the case of a partial redemption) is payable
to the Registered Owner hereof in immediately available funds upon presentation
and surrender hereof at the principal corporate trust office of the Trustee
(hereinafter defined) or its successor, as paying agent (the “Paying Agent”),
under the Trust Indenture dated as of October 1, 2006 (the “Indenture”) by and
between the Issuer and Wells Fargo Bank, National Association, or its successor,
as trustee (the “Trustee”) securing the series of Bonds of which this Bond is
one. CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS
SPECIFIED THEREFOR IN THE INDENTURE. All payments of interest on Bonds shall be
paid to the Registered Owner hereof whose name appears in the Bond Register kept
by the Bond Registrar as of the close of business on the applicable Regular or
Special Record Dates in immediately available funds by wire transfer to a bank
within the continental United States or deposited to a designated account if
such account is maintained with the Paying Agent as directed by the Registered
Owner in writing or as otherwise directed in writing by the Registered Owner at
least five Business Days prior to each Interest Payment Date. The Regular Record
Date for any Interest Payment Date shall be the close of business on the 15th
day (whether or not a Business Day) of the calendar month immediately preceding
such Interest Payment Date. Any interest on any Bond which is payable, but is
not punctually paid or provided for, on any Interest Payment Date and within any
applicable grace period (herein called “Defaulted Interest”) shall forthwith
cease to be payable to the Registered Owner hereof on the relevant Regular
Record Date by virtue of having been such Registered Owner, and such Defaulted
Interest shall be paid to the person in whose name this Bond is registered at
the close of business on a Special Record Date to be fixed by the Trustee, such
date to be no more than 15 nor fewer than 10 days prior to the date of proposed
payment. This Bond is registered as to both principal and interest in the Bond
Register kept by the Bond Registrar and may be transferred or exchanged, subject
to the further conditions specified in the Indenture, only upon surrender hereof
at the office of the Bond Registrar. This Bond is payable solely from the
sources hereinafter mentioned.

THE BONDS SHALL BE DEEMED NOT TO CONSTITUTE A DEBT OF THE STATE OF TEXAS, THE
GOVERNMENTAL UNIT, OR OF ANY OTHER POLITICAL CORPORATION, SUBDIVISION, OR AGENCY
OF THE STATE OR A PLEDGE OF THE FAITH AND CREDIT OF ANY OF THEM. NO RECOURSE
SHALL BE HAD FOR ANY CLAIM BASED ON THE AGREEMENT, THE INDENTURE, OR THE BONDS
AGAINST ANY MEMBER, OFFICER OR EMPLOYEE, PAST, PRESENT OR FUTURE, OF THE ISSUER,
OR OF ANY SUCCESSOR BODY THERETO, EITHER DIRECTLY OR THROUGH THE ISSUER, OR ANY
SUCH SUCCESSOR BODY, UNDER ANY CONSTITUTIONAL PROVISION, STATUTE OR RULE OF LAW
OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR OTHERWISE. NEITHER THE
STATE OF TEXAS, THE GOVERNMENTAL UNIT, NOR ANY POLITICAL CORPORATION,
SUBDIVISION, OR AGENCY OF THE STATE OF TEXAS SHALL BE OBLIGATED TO PAY PRINCIPAL
OF, REDEMPTION PREMIUM, IF ANY, OR INTEREST ON THE BONDS AND NEITHER THE FAITH
AND CREDIT NOR THE TAXING POWER OF THE STATE OF TEXAS, THE GOVERNMENTAL UNIT, OR
ANY OTHER POLITICAL CORPORATION, SUBDIVISION, OR AGENCY IS PLEDGED TO THE
PAYMENT OF THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, OR INTEREST ON THE
BONDS. THIS BOND IS A SPECIAL REVENUE OBLIGATION OF THE ISSUER PAYABLE SOLELY
FROM THE SOURCES DESCRIBED HEREIN AND IN THE INDENTURE AND THE HOLDER HEREOF
SHALL NEVER HAVE THE RIGHT TO DEMAND PAYMENT FROM MONEYS DERIVED BY TAXATION OR
ANY REVENUES OF THE ISSUER EXCEPT THE FUNDS PLEDGED TO THE PAYMENT HEREOF.

 

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This Bond is one of a duly authorized issue of revenue bonds of the Issuer
issued in the aggregate principal amount of $             designated “Gulf Coast
Industrial Development Authority Environmental Facilities Revenue Bonds (Microgy
Holdings Project) Series 2006” (the “Bonds”) issued under the Indenture. The
Bonds are being issued by the Issuer for the purpose of financing a portion of
the costs of acquiring, constructing and improving certain solid waste disposal
facilities (each a “Facility,” and, collectively, the “Project”). The Issuer
will loan the proceeds of the Bonds to Microgy Holdings, LLC (the “Company”)
pursuant to the provisions of a Loan Agreement, dated as of October 1, 2006 (the
“Agreement”), between the Issuer and the Company.

The Bonds are payable solely from and secured by a pledge of the Trust Estate,
which includes, among other things, (i) all of the right, title and interest of
the Issuer in and to the Revenues, including, without limitation, “Loan
Payments” made by the Company pursuant to the Agreement, payments received by
the Trustee pursuant to a Guarantee Agreement, dated as of October 1, 2006 (the
“Guarantee”), from the Company and MST Production Ltd., MST GP, LLC, MST
Estates, LLC, Rio Leche Estates, L.L.C., Mission Biogas, L.L.C., and Hereford
Biogas, L.L.C. (the “Subsidiary Guarantors”) to the Trustee, and from payments
received by the Trustee pursuant to a Collateral Trust Agreement, dated as of
October 1, 2006, among Wells Fargo Bank, National Association, as collateral
trustee, the Company, and the Subsidiary Guarantors, (ii) the Agreement and all
right, title and interest of the Issuer under and pursuant to the Agreement,
insofar as they relate to all the Bonds issued and outstanding under the
Indenture (except for the indemnification and expense reimbursement rights and
other rights contained in the Agreement and any rights of the Issuer to receive
notices, certificates, requests, requisitions, directions and other
communications under the Agreement), including, without limitation, all payments
to be received under and pursuant to and subject to the provisions of the
Agreement, and (iii) all amounts on deposit in the Bond Fund, the Construction
Fund, the Debt Service Reserve Fund, or other funds created under the Indenture
(other than the Rebate Fund). Except as otherwise specified in the Indenture,
this Bond is entitled to the benefits of the Indenture equally and ratably both
as to principal (redemption price, including redemption premium) and interest
with all other Bonds issued under the Indenture, to which reference is made for
a description of the rights of the owners of the Bonds; the rights and
obligations of the Issuer; the rights, duties and obligations of the Trustee;
and the provisions relating to amendments to and modifications of the Indenture,
to all of which the Registered Owner of this Bond assents by acceptance of this
Bond. Reference is also hereby made to the Agreement for the provisions, among
others, with respect to the nature and extent of the rights, duties and
obligations thereunder of the Issuer, the Trustee and the Company and the
modification or amendment of the Agreement.

FOR SO LONG AS THIS BOND IS HELD IN BOOK-ENTRY FORM REGISTERED IN THE NAME OF
CEDE & CO. ON THE REGISTRATION BOOKS OF THE ISSUER KEPT BY THE TRUSTEE, AS BOND
REGISTRAR, THIS BOND, IF CALLED FOR PARTIAL REDEMPTION IN ACCORDANCE WITH THE
INDENTURE, SHALL BECOME DUE AND PAYABLE ON THE REDEMPTION DATE DESIGNATED IN THE
NOTICE OF REDEMPTION GIVEN IN ACCORDANCE WITH THE INDENTURE AT, AND ONLY TO THE
EXTENT OF, THE REDEMPTION PRICE, PLUS ACCRUED INTEREST TO THE SPECIFIED
REDEMPTION DATE; AND THIS BOND SHALL BE PAID, TO THE EXTENT SO REDEEMED,
(i) UPON PRESENTATION AND SURRENDER THEREOF AT THE OFFICE SPECIFIED IN SUCH
NOTICE OR (ii) AT THE WRITTEN REQUEST OF CEDE & CO., BY CHECK OR DRAFT MAILED TO
CEDE & CO. BY THE TRUSTEE OR BY WIRE TRANSFER TO CEDE & CO. BY THE TRUSTEE IF
CEDE & CO. AS BONDOWNER SO ELECTS. IF, ON THE REDEMPTION DATE, MONEYS FOR THE
REDEMPTION OF BONDS TO BE REDEEMED, TOGETHER WITH INTEREST TO THE REDEMPTION
DATE, SHALL BE HELD BY THE TRUSTEE SO AS TO BE AVAILABLE THEREFOR ON SUCH DATE,
AND AFTER NOTICE OF REDEMPTION SHALL HAVE BEEN GIVEN IN ACCORDANCE WITH THE
INDENTURE, THEN, FROM AND

 

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AFTER THE REDEMPTION DATE, THE AGGREGATE PRINCIPAL AMOUNT OF THIS BOND SHALL BE
IMMEDIATELY REDUCED BY AN AMOUNT EQUAL TO THE AGGREGATE PRINCIPAL AMOUNT THEREOF
SO REDEEMED, NOTWITHSTANDING WHETHER THIS BOND HAS BEEN SURRENDERED TO THE
TRUSTEE FOR CANCELLATION.

If an Event of Default occurs, the principal of all Bonds issued under the
Indenture may become due and payable upon the conditions and in the manner and
with the effect provided in the Indenture.

No recourse shall be had for the payment of the principal of, redemption
premium, if any, or interest on this Bond, or for any claim based hereon or on
the Indenture, against any member, officer or employee, past, present or future,
of the Issuer or of any successor body, as such, either directly or through the
Issuer or any such successor body, under any constitutional provision, statute
or rule of law, or by the enforcement of any assessment or by any legal or
equitable proceeding or otherwise.

Authorized Denominations

Bonds will be issued in the denominations of $100,000 and integral multiples of
$5,000 in excess thereof.

Interest Payment Dates

Interest is payable semiannually on each June 1 and December 1, commencing
June 1, 2007, until maturity or prior redemption.

Optional Redemption

The Bonds shall be subject to redemption at the option of the Issuer, at the
direction of the Company, in whole or in part, and if in part , in authorized
denominations, from funds available for such purpose in the Bond Fund, on
December 1, 2016, and on any date thereafter, at a redemption price equal to the
principal amount of the Bonds to be redeemed and accrued interest, if any, to
the date of redemption.

Mandatory Redemption

The outstanding Bonds are subject to mandatory redemption and shall be redeemed
by the Issuer, in part, prior to their scheduled maturity, with money from the
Bond Fund, at a redemption price equal to the principal amount thereof and
accrued interest, if any, to the date of redemption, on December 1 of each of
the following years, in the principal amounts, respectively, as shown in the
following schedule:

 

Redemption
Year   Principal
Amount 2012   $ 950,000 2013     1,015,000 2014     1,085,000 2015     1,165,000
2016     1,245,000 2017     1,330,000 2018     1,425,000 2019     1,525,000 2020
    1,630,000 2021     1,745,000 2022     1,865,000 2023     1,995,000 2024    
2,135,000 2025     2,285,000 2026     2,445,000 2027     2,620,000 2028    
2,800,000 2029     2,995,000 2030     3,205,000 2031     3,430,000 2032    
3,670,000 2033     3,930,000 2034     4,205,000 2035     4,495,000 2036    
4,810,000

 

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The principal amount of the Bonds so required to be redeemed on any such
mandatory redemption date shall be reduced by the principal amount of any Bonds
which, at least 45 days prior such redemption date, (1) shall have been acquired
by the Trustee at the direction of the Company, at a price not exceeding the
principal amount of such Bonds plus accrued interest to the date of purchase
thereof and delivered to the Trustee for cancellation, or (2) shall have been
redeemed pursuant to any other redemption provision herein and not previously so
credited.

Extraordinary Mandatory Redemption

(i) Taxability. The Bonds shall be subject to mandatory redemption, at a
redemption price equal to 106% of the principal amount being redeemed plus
accrued interest to the redemption date on the one hundred eightieth day (or
such earlier date as may be designated by the Company) after a final
determination by a court of competent jurisdiction or an administrative agency
(including the Internal Revenue Service), or receipt by the Company of an
opinion of Bond Counsel obtained by the Company, to the effect that the interest
payable on the Bonds is or will be included in the gross income of the owners
thereof for federal income tax purposes, other than any Owner who is a
“substantial user” of the Project or a “related person” within the meaning of
Section 147(a) of the Code. Subject to the foregoing provisions, the Bonds shall
be redeemed in whole unless, in the opinion of Bond Counsel mutually acceptable
to the Issuer, the Trustee and the Company, the redemption of a portion of such
Bonds would have the result that interest payable on the Bonds remaining
outstanding after such redemption would not be includable in the gross income
for federal income tax purposes of any owner of any such Bonds. Any such partial
redemption shall be in such amount as is necessary to accomplish such result;
and

(ii) Excess Proceeds. The Bonds shall be subject to mandatory redemption, in
part, on any date, to the extent that proceeds of the Bonds are transferred to
the Bond Fund pursuant to Section 5.3 of the Indenture, at a redemption price
equal to the principal amount being redeemed plus accrued interest to the
redemption date.

Extraordinary Optional Redemption

The Bonds are also subject to optional redemption by the Issuer, at the written
direction of the Company, in part, in each case in an amount not to exceed
twenty-five percent (25%) of the original principal amount of the Bonds, at any
time, at a redemption price equal to the principal amount being redeemed plus
accrued interest to the redemption date, if:

(i) the Company shall have determined that the continued construction or
operation of a Facility is impracticable, uneconomical or undesirable due to
(A) the imposition of taxes, other than ad valorem taxes currently levied upon
privately owned property used for the same general purpose as such Facility, or
other liabilities or burdens with respect to such Facility or the operation
thereof, (B) changes in technology, in environmental standards or legal
requirements or in the economic availability of materials, supplies, equipment
or labor or (C) destruction of or damage to all or part of such Facility;

(ii) all or substantially all of a Facility shall have been condemned or taken
by eminent domain; or

 

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(iii) the construction or operation of a Facility shall have been enjoined or
shall have otherwise been prohibited by any order, decree, rule or regulation of
any court or of any federal, state or local regulatory body, administrative
agency or other governmental body.

(iv) a Facility or a portion thereof shall have been sold and the proceeds of
sale shall not have been reinvested as provided in the Guarantee.

The Company shall deliver notice to the Trustee of its intention to prepay the
principal of, redemption premium, if any, and interest on the Bonds and cause
the Bonds to be called for optional redemption at least ten (10) Business Days
prior to the date the Trustee gives notice to the Registered Owners of the Bonds
of the proposed redemption of the Bonds. The Trustee shall cause notice of any
redemption of Bonds under the Indenture, which notice shall be prepared by the
Company, to be mailed by first class mail, postage prepaid (except when DTC is
the Registered Owner of all of the Bonds and except for any person or entity
owning or providing evidence of ownership satisfactory to the Trustee of a legal
or beneficial ownership in at least $1,000,000 of principal amount of Bonds who
so requests, in which cases, by certified mail, return receipt requested), to
the Registered Owners of all Bonds to be redeemed at the registered addresses
appearing in the Bond Register kept for such purpose pursuant to Article II of
the Indenture. Each such notice shall (i) be mailed at least 30 days prior to
the redemption date for the Bonds, (ii) identify the Bonds to be redeemed if
less than all Bonds are to be redeemed (specifying the CUSIP numbers, if any,
assigned to the Bonds), (iii) specify the redemption date and the redemption
price, (iv) state whether the notice is conditional or not as permitted by the
Indenture, and (v) state that on the redemption date the Bonds called for
redemption will be payable at the office of the Trustee designated in such
notice, that from that date interest will cease to accrue and that no
representation is made as to the accuracy or correctness of the CUSIP numbers
printed therein or on the Bonds; provided, however, that so long as DTC or its
nominee is the sole Registered Owner of the Bonds under the Book-Entry Only
System, redemption notices will be sent to Cede & Co. Any failure on the part of
DTC, a direct participant or indirect participant to give such notice to the
Owner or any defect therein shall not affect the sufficiency or validity of any
proceedings for the redemption of the Bonds. No defect affecting any Bond,
whether in the notice of redemption or mailing thereof (including any failure to
mail such notice), shall affect the validity of the redemption proceedings for
any other Bonds.

Selection of Bonds for Redemption

Except as otherwise provided in the Indenture, the particular Bonds to be called
for redemption shall be selected by the Trustee by lot or any other customary
random method determined by the Trustee to be fair and reasonable provided that
a portion of a Bond may be redeemed only in authorized denominations.

Transfer of Bonds

This Bond is transferable by the Registered Owner hereof at the designated
office of the Bond Registrar, upon surrender of this Bond, accompanied by a duly
executed instrument of transfer in form and with guaranty of signature
satisfactory to the Bond Registrar, subject to such reasonable regulations as
the Issuer or the Bond Registrar may prescribe, and upon payment of any tax or
other governmental charge incident to such transfer. Upon any such transfer, a
new Bond or Bonds in the same aggregate principal amount will be issued to the
transferee. Except as set forth in this Bond and as otherwise provided in the
Indenture, the person in whose name this Bond is registered shall be deemed the
owner hereof for all purposes, and the Issuer, any Paying Agent, the Bond
Registrar, the Authenticating Agent and the Trustee shall not be affected by any
notice to the contrary.

 

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This Bond shall not be valid or become obligatory for any purpose or be entitled
to any security or benefit under the Indenture until either (i) the Certificate
of Authentication hereon shall have been signed by the Trustee as Bond
Registrar, or any successor, or (ii) a manually signed Comptroller’s
Registration Certificate has been attached hereto or endorsed hereon.

It is hereby certified, recited and declared that all acts, conditions and
things required to exist, happen and be performed precedent to and in the
execution and delivery of the Indenture and the issuance of this Bond do exist,
have happened and have been performed in due time, form and manner as required
by law; and that the issuance of this Bond and the issue of which it forms a
part, together with all other obligations of the Issuer, does not exceed or
violate any constitutional or statutory limitation.

IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed in its name
by the manual or facsimile signature of its President and attested by the manual
or facsimile signature of the Secretary, all as of the date first above written.

 

     

GULF COAST INDUSTRIAL DEVELOPMENT AUTHORITY

      By:  

 

ATTEST:       President By:  

 

        Secretary       [SEAL]

(FORM OF CERTIFICATE OF AUTHENTICATION)

CERTIFICATE OF AUTHENTICATION

This Bond is one of the Bonds referred to in the within mentioned Indenture.

 

 

as Trustee By:  

 

  Authorized Signatory

 

Date of Authentication:

 

 

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(FORM OF ASSIGNMENT)

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

 

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Please Insert Social Security

or other Identifying Number of Assignee

              

 

the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints              attorney or agent to transfer the within Bond on the
books kept

for registration thereof, with full power of substitution in the premises.

Dated:                             

NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Bond in every particular, without alteration
or enlargement or any change whatever.

[FORM OF COMPTROLLER’S REGISTRATION CERTIFICATE

(to be attached to Initial Bonds only)]

COMPTROLLER’S REGISTRATION CERTIFICATE:             REGISTER NO.

I hereby certify that this Bond has been examined, certified as to validity, and
approved by the Attorney General of the State of Texas, and that this Bond has
been registered by the Comptroller of Public Accounts of the State of Texas.

Witness my signature and seal this

 

 

Comptroller of Public Accounts
of the State of Texas

 

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