**Exhibit4.2**

 

EXECUTION COPY

 

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MIRANT NORTHAMERICA ESCROW, LLC 

MIRANT NORTHAMERICA, LLC

MNA FINANCECORP.

 

AS ISSUERS 

 

AND

 

LAW DEBENTURETRUST COMPANY OF NEW YORK,AS TRUSTEE

 

7.375% SeniorNotes due 2013

 

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INDENTURE

 

Dated as ofDecember 23, 2005

 

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**Table of Contents**

 
| ** **                                                                                                                | **Page**   |
|---------------------------------------------------------------------------------------------------------------------------|------------|
| ** **                                                                                                                | ** ** |
| **ARTICLE I**                                                                                                             | ** ** |
| **DEFINITIONS AND INCORPORATION BY REFERENCE**                                                                            | ** ** |
| ** **                                                                                                                | ** ** |
| SECTION  1.1.   Definitions                                                                                     | 1          |
| SECTION  1.2.   Other Definitions                                                                               | 34         |
| SECTION  1.3.   Incorporation by Reference of Trust Indenture Act                                               | 36         |
| SECTION  1.4.   Rules of Construction                                                                           | 37         |
|                                                                                                                      |       |
| **ARTICLE II**                                                                                                            | ** ** |
| **THE SECURITIES**                                                                                                        | ** ** |
| ** **                                                                                                                | ** ** |
| SECTION  2.1.   Form, Dating and Terms                                                                          | 37         |
| SECTION  2.2.   Execution and Authentication                                                                    | 45         |
| SECTION  2.3.   Registrar and Paying Agent                                                                      | 46         |
| SECTION  2.4.   Paying Agent to Hold Money in Trust                                                             | 47         |
| SECTION  2.5.   Holder Lists                                                                                    | 47         |
| SECTION  2.6.   Transfer and Exchange                                                                           | 47         |
| SECTION  2.7.   Form of Certificate to be Delivered in Connection with  Transfers to IAIs                       | 51         |
| SECTION  2.8.   Form of Certificate to be Delivered in Connection with  Transfers Pursuant to Regulation S | 53         |
| SECTION  2.9.   Mutilated, Destroyed, Lost or Stolen Securities                                                 | 54         |
| SECTION  2.10.   Outstanding Securities                                                                         | 55         |
| SECTION  2.11.   Temporary Securities                                                                           | 55         |
| SECTION  2.12.   Cancellation                                                                                   | 56         |
| SECTION  2.13.   Payment of Interest; Defaulted Interest                                                        | 56         |
| SECTION 2.14.    Computation of Interest                                                                        | 57         |
| SECTION  2.15.   CUSIP, Common Code and ISIN Numbers                                                            | 57         |
|                                                                                                                      |       |
| **ARTICLE III**                                                                                                           | ** ** |
| **COVENANTS**                                                                                                             | ** ** |
| ** **                                                                                                                | ** ** |
| SECTION  3.1.   Payment of Securities                                                                           | 58         |
| SECTION  3.2.   Limitation on Indebtedness                                                                      | 58         |
| SECTION  3.3.   Limitation on Restricted Payments                                                               | 63         |
| SECTION  3.4.   Limitation on Restrictions on Distributions from Restricted  Subsidiaries                       | 69         |
| SECTION  3.5.   Limitation on Sales of Assets and Subsidiary Stock                                              | 72         |
| SECTION  3.6.   Limitation on Liens                                                                             | 75         |
| SECTION  3.7.   Limitation on Sale/Leaseback Transactions                                                       | 76         |
| SECTION  3.8.   Limitation on Affiliate Transactions                                                            | 76         |
| SECTION  3.9.   Restrictions on Activities of MNA Finance Corp.                                                 | 79         |
| SECTION  3.10.   Limitation on Lines of Business                                                                | 79         |

 

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| SECTION  3.11.   Change of Control                                                  | 79         |
|-----------------------------------------------------------------------------------------------|------------|
| SECTION  3.12.   SEC Reports                                                        | 80         |
| SECTION  3.13.   Future Subsidiary Guarantors                                       | 81         |
| SECTION  3.14.   Maintenance of Office or Agency                                    | 82         |
| SECTION  3.15.   Corporate Existence                                                | 82         |
| SECTION  3.16.   Payment of Taxes and Other Claims                                  | 82         |
| SECTION  3.17.   Payments for Consent                                               | 82         |
| SECTION  3.18.   Compliance Certificate                                             | 83         |
| SECTION  3.19.   [Intentionally omitted]                                            | 83         |
| SECTION  3.20.   Statement by Officers as to Default                                | 83         |
| SECTION  3.21.   Activities prior to Emergence Date                                 | 83         |
| SECTION  3.22.   Effectiveness of Covenants                                         | 83         |
| SECTION  3.23.   Limitation on Ability of the Issuers to Release Funds from  Escrow | 84         |
|                                                                                          |       |
| **ARTICLE IV**                                                                                | ** ** |
| **SUCCESSOR COMPANY**                                                                         | ** ** |
| ** **                                                                                    | ** ** |
| SECTION  4.1.   Merger and Consolidation                                            | 85         |
|                                                                                          |       |
| **ARTICLE V**                                                                                 | ** ** |
| **REDEMPTION OF SECURITIES**                                                                  | ** ** |
| ** **                                                                                    | ** ** |
| SECTION  5.1.   Redemption                                                          | 87         |
| SECTION  5.2.   Applicability of Article                                            | 87         |
| SECTION  5.3.   Election to Redeem; Notice to Trustee                               | 87         |
| SECTION  5.4.   Selection by Trustee of Securities to Be Redeemed                   | 87         |
| SECTION  5.5.   Notice of Redemption                                                | 88         |
| SECTION  5.6.   Deposit of Redemption Price                                         | 89         |
| SECTION  5.7.   Securities Payable on Redemption Date                               | 89         |
| SECTION  5.8.   Securities Redeemed in Part                                         | 89         |
| SECTION  5.9.   Special Mandatory Redemption                                        | 89         |
|                                                                                          |       |
| **ARTICLE VI**                                                                                | ** ** |
| **DEFAULTS AND REMEDIES**                                                                     | ** ** |
| ** **                                                                                    | ** ** |
| SECTION  6.1.   Events of Default                                                   | 90         |
| SECTION 6.2.    Acceleration                                                        | 94         |
| SECTION  6.3.   Other Remedies                                                      | 94         |
| SECTION  6.4.   Waiver of Past Defaults                                             | 94         |
| SECTION  6.5.   Control by Majority                                                 | 95         |
| SECTION  6.6.   Limitation on Suits                                                 | 95         |
| SECTION  6.7.   Rights of Holders to Receive Payment                                | 95         |
| SECTION  6.8.   Collection Suit by Trustee                                          | 96         |
| SECTION  6.9.   Trustee May File Proofs of Claim                                    | 96         |
| SECTION  6.10.   Priorities                                                         | 96         |
| SECTION  6.11.   Undertaking for Costs                                              | 96         |

 

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| **ARTICLE VII**                                                                        | ** ** |
|----------------------------------------------------------------------------------------|------------|
| **TRUSTEE**                                                                            | ** ** |
| ** **                                                                             | ** ** |
| SECTION  7.1.   Duties of Trustee                                            | 97         |
| SECTION  7.2.   Rights of Trustee                                            | 98         |
| SECTION  7.3.   Individual Rights of Trustee                                 | 99         |
| SECTION  7.4.   Trustee’s Disclaimer                                    | 99         |
| SECTION  7.5.   Notice of Defaults                                           | 99         |
| SECTION  7.6.   Reports by Trustee to Holders                                | 100        |
| SECTION  7.7.   Compensation and Indemnity                                   | 101        |
| SECTION  7.8.   Replacement of Trustee                                       | 101        |
| SECTION  7.9.   Successor Trustee by Merger                                  | 102        |
| SECTION  7.10.   Eligibility; Disqualification                               | 103        |
| SECTION  7.11.   Preferential Collection of Claims Against the Issuers       | 103        |
| SECTION  7.12.   Trustee’s Application for Instruction from the Issuers | 103        |
| SECTION  7.13.   Paying Agents                                               | 103        |
|                                                                                   |       |
| **ARTICLE VIII**                                                                       | ** ** |
| **DISCHARGE OF INDENTURE; DEFEASANCE**                                                 | ** ** |
| ** **                                                                             | ** ** |
| SECTION  8.1.   Discharge of Liability on Securities; Defeasance             | 104        |
| SECTION  8.2.   Conditions to Defeasance                                     | 105        |
| SECTION  8.3.   Application of Trust Money                                   | 107        |
| SECTION  8.4.   Repayment to the Issuers                                     | 107        |
| SECTION  8.5.   Indemnity for U.S. Government Obligations                    | 107        |
| SECTION  8.6.   Reinstatement                                                | 107        |
|                                                                                   |       |
| **ARTICLE IX**                                                                         | ** ** |
| **AMENDMENTS**                                                                         | ** ** |
| ** **                                                                             | ** ** |
| SECTION  9.1.   Without Consent of Holders                                   | 108        |
| SECTION  9.2.   With Consent of Holders                                      | 109        |
| SECTION  9.3.   Compliance with Trust Indenture Act                          | 110        |
| SECTION  9.4.   Revocation and Effect of Consents and Waivers                | 110        |
| SECTION  9.5.   Notation on or Exchange of Securities                        | 111        |
| SECTION  9.6.   Trustee To Sign Amendments                                   | 111        |
|                                                                                   |       |
| **ARTICLE X**                                                                          | ** ** |
| **SECURITIES GUARANTEE**                                                               | ** ** |
| ** **                                                                             | ** ** |
| SECTION  10.1.   Subsidiary Guarantee                                        | 111        |
| SECTION  10.2.   Limitation on Liability; Termination, Release and Discharge | 113        |
| SECTION  10.3.   Right of Contribution                                       | 114        |
| SECTION  10.4.   No Subrogation                                              | 114        |

 

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| **ARTICLE XI**                                                                                 | ** **                                                 |
|------------------------------------------------------------------------------------------------|------------------------------------------------------------|
| **MISCELLANEOUS**                                                                              | ** **                                                 |
| ** **                                                                                     | ** **                                                 |
| SECTION  11.1.   Trust Indenture Act Controls                                        | 115                                                        |
| SECTION  11.2.   Notices                                                             | 115                                                        |
| SECTION  11.3.   Communication by Holders with other Holders                         | 116                                                        |
| SECTION  11.4.   Certificate and Opinion as to Conditions Precedent                  | 116                                                        |
| SECTION  11.5.   Statements Required in Certificate or Opinion                       | 116                                                        |
| SECTION  11.6.   When Securities Disregarded                                         | 117                                                        |
| SECTION  11.7.   Rules by Trustee, Paying Agent and Registrar                        | 117                                                        |
| SECTION  11.8.   Legal Holidays                                                      | 117                                                        |
| SECTION  11.9.   Governing Law                                                       | 117                                                        |
| SECTION  11.10.   No Recourse Against Others                                         | 117                                                        |
| SECTION  11.11.   Successors                                                         | 118                                                        |
| SECTION  11.12.   Multiple Originals                                                 | 118                                                        |
| SECTION  11.13.   Qualification of Indenture                                         | 118                                                        |
| SECTION  11.14.   Table of Contents; Headings                                        | 118                                                        |
| SECTION  11.15.   Force Majeure                                                      | 118                                                        |
| SECTION  11.16.   Effectiveness of Provisions for MNA and the Subsidiary  Guarantors | 118                                                        |
|                                                                                           |                                                       |
| SCHEDULE 3.2                                                                                   | Existing Indebtedness                                      |   |
| SCHEDULE 3.4                                                                                   | Permitted Restrictions on Distributions                    |   |
| SCHEDULE 3.6                                                                                   | Existing Liens                                             |   |
| SCHEDULE 3.8                                                                                   | Affiliate Transactions                                     |   |
| SCHEDULE I                                                                                     | Existing Investments                                       |   |
|                                                                                           |                                                       |   |
| EXHIBIT A                                                                                      | Form of the Series A Note                                  |   |
| EXHIBIT B                                                                                      | Form of the Series B Note                                  |   |
| EXHIBIT C                                                                                      | Form of Indenture Supplement to Add  Subsidiary Guarantors |   |
|                                                                                                |                                                            |  |  |

 

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CROSS-REFERENCETABLE

 
| **TIA  Section** | ** **          | **Indenture  Section** |
|------------------|---------------------|------------------------|
|             |                |                   |
| 310              | (a)(1)              |                   | N.A. |
|             | (a)(2)              |                   | N.A. |
|             | (a)(3)              |                   | N.A. |
|             | (a)(4)              |                   | N.A. |
|             | (a)(5)              |                   | N.A. |
|             | (b)                 |                   | 7.3;  7.8; 7.10 |
|             | (c)                 |                   | N.A. |
| 311              | (a)                 |                   | 7.11 |
|             | (b)                 |                   | 7.11 |
|             | (c)                 |                   | N.A. |
| 312              | (a)                 |                   | 2.5 |
|             | (b)                 |                   | 11.3 |
|             | (c)                 |                   | 11.3 |
| 313              | (a)                 |                   | 7.6 |
|             | (b)(1)              |                   | N.A. |
|             | (b)(2)              |                   | N.A. |
|             | (c)                 |                   | 7.6 |
|             | (d)                 |                   | 7.6 |
| 314              | (a)                 |                   | 3.18 |
|             | (b)                 |                   | N.A. |
|             | (c)(1)              |                   | N.A. |
|             | (c)(2)              |                   | N.A. |
|             | (c)(3)              |                   | N.A. |
|             | (d)                 |                   | N.A. |
|             | (e)                 |                   | N.A. |
| 315              | (a)                 |                   | N.A. |
|             | (b)                 |                   | N.A. |
|             | (c)                 |                   | N.A. |
|             | (d)                 |                   | N.A. |
|             | (e)                 |                   | N.A. |
| 316              | (a)(last  sentence) |                   | N.A. |
|             | (a)(1)(A)           |                   | N.A. |
|             | (a)(1)(B)           |                   | N.A. |
|             | (a)(2)              |                   | N.A. |
|             | (b)                 |                   | N.A. |
|             | (c)                 |                   | N.A. |
| 317              | (a)(1)              |                   | N.A. |
|             | (a)(2)              |                   | N.A. |
|             | (b)                 |                   | N.A. |
| 318              | (a)                 |                   | N.A. |

 

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N.A. means NotApplicable.

 

Note:  This Cross-Reference Table shall not, for anypurpose, be deemed to be part of this Indenture.

 

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INDENTURE dated as of December23, 2005, among MIRANT NORTH AMERICA ESCROW, LLC, a Delaware limited liabilitycompany (“Escrow LLC”), MIRANT NORTH AMERICA, LLC, a Delaware limitedliability company (“MNA” and together with the Escrow LLC, the “Company”),MNA FINANCE CORP., a Delaware corporation (“MNA Finance Corp.” and,together with the Company, the “Issuers”), the Subsidiary Guarantors (ashereinafter defined) from time to time parties hereto and LAW DEBENTURE TRUSTCOMPANY OF NEW YORK, a national banking association (the “Trustee”), asTrustee.

 

For and in consideration of the premises andthe purchase of the Securities by the Holders thereof, each party heretocovenants and agrees as follows for the benefit of the other parties and forthe equal and ratable benefit of all Holders of (i) the Issuers’ 7.375%Senior Notes due 2013 issued on the date hereof (the “Initial Securities”),(ii) if and when issued, an unlimited principal amount of additional7.375% Senior Notes, Series A, due 2013 in a non-registered offering or 7.375%Senior Notes, Series B, due 2013 in a registered offering of the Issuers, thatmay be offered from time to time subsequent to the Issue Date (the “AdditionalSecurities”) and (iii) if and when issued, the Issuers’ 7.375% SeniorNotes, Series B, due 2013, that may be issued from time to time in exchange forInitial Securities or any Additional Securities in an offer registered underthe Securities Act as provided in a Registration Rights Agreement (ashereinafter defined) (the “Exchange Securities,” and together with theInitial Securities and Additional Securities, the “Securities”).

 

# ARTICLEIDEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION1.1.   Definitions.

 

“AcquiredIndebtedness” means Indebtedness (i) of a Person or any of its Subsidiariesexisting at the time such Person becomes a Restricted Subsidiary or (ii)assumed in connection with the acquisition of assets from such Person, in eachcase whether or not Incurred by such Person in connection with, or inanticipation or contemplation of, such Person becoming a Restricted Subsidiaryor such acquisition.  AcquiredIndebtedness shall be deemed to have been Incurred, with respect to clause (i)of the preceding sentence, on the date such Person becomes a RestrictedSubsidiary and, with respect to clause (ii) of the preceding sentence, on thedate of consummation of such acquisition of assets.

 

“Additional Assets” means:

 

(1)                                  anyproperty, plant or equipment to be used by the Company or a RestrictedSubsidiary in a Permitted Business or capital expenditures by the Company or aRestricted Subsidiary which are related to a Permitted Business;

 

(2)                                  the CapitalStock of a Person that becomes a Restricted Subsidiary as a result of theacquisition of such Capital Stock by the Company or a Restricted Subsidiary; or

 

(3)                                  CapitalStock constituting a minority interest in any Person that at such time is aRestricted Subsidiary;

 

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*provided, however,* that, in the case ofclauses (2) and (3), such Restricted Subsidiary is primarily engaged in aPermitted Business.

 

“Additional Securities”has the meaning ascribed to it in the second introductory paragraph of thisIndenture.

 

“Affiliate”of any specified Person means any other Person, directly or indirectly,controlling or controlled by or under direct or indirect common control withsuch specified Person. For the purposes of this definition, “control” when usedwith respect to any Person means the power to direct the management andpolicies of such Person, directly or indirectly, whether through the ownershipof voting securities, by contract or otherwise; and the terms “controlling” and“controlled” have meanings correlative to the foregoing; *provided* that exclusively for purposes of Section3.8, beneficial ownership of 10% or more of the Voting Stock of a Personshall be deemed to be control.

 

“Applicable Premium” means, with respect toany Security on any applicable redemption date, the greater of:

 

(1)                                  1.0% of thethen outstanding principal amount of the Security; and

 

(2)                                  the excessof:

 

(a)                                   the presentvalue at such redemption date of (i) the redemption price of the Security atDecember 31, 2009 (such redemption price being set forth in the table appearingin Section 5 of the Security) plus (ii) all required interest payments due onthe Security, through December 31, 2009 (excluding accrued but unpaidinterest), computed using a discount rate equal to the Treasury Rate as of suchredemption date plus 50 basis points; over

 

(b)                                  the thenoutstanding principal amount of the Security.

 

“AssetDisposition” means any direct or indirect sale, lease (other than an operatinglease entered into in the ordinary course of business), transfer, issuance orother disposition, or a series of related sales, leases, transfers, issuancesor dispositions that are part of a common plan, of shares of Capital Stock of aRestricted Subsidiary (other than directors’ qualifying shares), property orother assets (each referred to for the purposes of this definition as a “disposition”)by the Company or any of its Restricted Subsidiaries, including any dispositionby means of a merger, consolidation or similar transaction.

 

Notwithstanding the preceding, the followingitems shall not be deemed to be Asset Dispositions:

 

(1)                                  adisposition of assets (x) by a Restricted Subsidiary to the Company or (y) bythe Company or a Restricted Subsidiary to a Restricted Subsidiary; *provided*that in the case of a sale by a RestrictedSubsidiary to another Restricted Subsidiary, the Company directly or indirectlyowns an equal or greater percentage of the Common Stock of the transferee thanof the transferor;

 

(2)                                  the sale ofCash Equivalents;

 

2

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(3)                                  a dispositionof inventory in the ordinary course of business;

 

(4)                                  adisposition of obsolete, uneconomic or worn out equipment, vehicles or similarassets or equipment, vehicles or similar assets that in the good faith judgmentof the Board of Directors of the Company is no longer useful or desirable inthe conduct of the business of the Company and its Restricted Subsidiaries andthat is disposed of in each case in the ordinary course of business;

 

(5)                                  transactionspermitted under Section 4.1;

 

(6)                                  an issuanceof Capital Stock by a Restricted Subsidiary to the Company or to a RestrictedSubsidiary;

 

(7)                                  for purposesof Section 3.5 only, the making of a Permitted Investment (other than aPermitted Investment to the extent such transaction results in the receipt ofcash or Cash Equivalents by the Company or its Restricted Subsidiaries) or adisposition subject to Section 3.3; 

 

(8)                                  dispositionsof assets in a single transaction or series of related transactions with anaggregate fair market value of less than $25.0 million; 

 

(9)                                  the creationof a Permitted Lien and dispositions in connection with Permitted Liens;

 

(10)                            dispositionsof receivables in connection with the compromise, settlement or collectionthereof in the ordinary course of business or in bankruptcy or similarproceedings and exclusive of factoring or similar arrangements;

 

(11)                            the issuanceby a Restricted Subsidiary of Preferred Stock that is permitted by Section3.2;

 

(12)                            thelicensing or sublicensing of intellectual property or other general intangiblesand licenses, leases or subleases of other property in the ordinary course ofbusiness which do not materially interfere with the business of the Company andits Restricted Subsidiaries; 

 

(13)                            foreclosureon assets; 

 

(14)                            thedisposition by the Company or any Subsidiary of power, capacity, fuel, emissioncredits and other products or services, in each case in the ordinary course ofbusiness (it being understood that a disposition of a quantity of power,capacity, fuel or emission credits or other products or services that ismaterial to the Company or such Restricted Subsidiary, as the case may be,shall not alone cause such disposition not to be in the ordinary course ofbusiness); 

 

(15)                            compromisesand settlements of claims against third parties and, in an amount not to exceed$10.0 million since the Emergence Date, dispositions in connection with thesettlement of claims and litigation; 

 

(16)                            dispositionsmade pursuant to the Plan of Reorganization;

 

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(17)                            to theextent allowable under Section 1031 of the Code, any exchange of like property(excluding any boot thereon) for use in a Permitted Business;

 

(18)                            any sale ofCapital Stock in, or Indebtedness or other securities of, an Unrestricted Subsidiary(with the exception of Investments acquired pursuant to the definition ofPermitted Investments);

 

(19)                            any CasualtyEvent; and

 

(20)                            theunwinding of any Hedging Obligation.

 

“AttributableIndebtedness” in respect of a Sale/Leaseback Transaction means, as at the timeof determination, the present value (discounted at the interest rate implicitin the transaction) of the total obligations of the lessee for rental paymentsduring the remaining term of the lease included in such Sale/Leaseback Transaction(including any period for which such lease has been extended), determined inaccordance with GAAP; *provided, however,*thatif such Sale/Leaseback Transaction results in a Capitalized Lease Obligation,the amount of Indebtedness represented thereby will be determined in accordancewith the definition of “Capitalized Lease Obligations.” 

 

“AverageLife” means, as of the date of determination, with respect to any Indebtednessor Preferred Stock, the quotient obtained by dividing (1) the sum of theproducts of the numbers of years from the date of determination to the dates ofeach successive scheduled principal payment of such Indebtedness or redemptionor similar payment with respect to such Preferred Stock multiplied by theamount of such payment by (2) the sum of all such payments. 

 

“BankruptcyLaw” means Title 11 of the United States Code or any similar federal orstate law for the relief of debtors.

 

“BankruptcyCourt” means the United States Bankruptcy Court for the Northern District ofTexas (Fort Worth Division) presiding over the Chapter 11 cases of MirantCorporation and its affiliates, Case No. 03-46590 (DML).

 

“Boardof Directors” means as to any Person, the board of directors or managers, asapplicable, of such Person (or, if such Person is a partnership, the board ofdirectors or other governing body of the general partner of such Person) or anyduly authorized committee thereof.

 

“BoardResolution” means a copy of a resolution certified by the Secretary or anAssistant Secretary of a Person to have been duly adopted by the Board ofDirectors of such Person and to be in full force and effect on the date of suchcertification, and delivered to the Trustee.

 

“BusinessDay” means each day that is not a Saturday, Sunday or other day on whichbanking institutions in New York, New York are authorized or required by law toclose.

 

“CapitalStock” of any Person means any and all shares, interests, rights to purchase,warrants, options, participation or other equivalents of or interests in(however designated) equity of such Person, including any Preferred Stock andlimited liability or partnership interests (whether general or limited), butexcluding any debt securities convertible into such equity.

 

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“CapitalizedLease Obligations” means an obligation that is required to be classified andaccounted for as a capitalized lease for financial reporting purposes inaccordance with GAAP, and the amount of Indebtedness represented by suchobligation will be the capitalized amount of such obligation at the time anydetermination thereof is to be made as determined in accordance with GAAP, andthe Stated Maturity thereof will be the date of the last payment of rent or anyother amount due under such lease prior to the first date such lease may beterminated without penalty; *provided*,*however,* that in no event shallthe obligations of MIRMA under the Facility Lease Documents (without givingeffect to any amendment, supplement or modification thereto) be treated asCapitalized Lease Obligations.

 

“Cash Equivalents” means:

 

(1)                                  securitiesissued or directly and fully guaranteed or insured by the United StatesGovernment or any agency or instrumentality of the United States (*provided* that the full faith and credit of the United Statesis pledged in support thereof), and, other than any such securities used todefease Indebtedness, having maturities of not more than one year from the dateof acquisition;

 

(2)                                  marketablegeneral obligations issued by any state of the United States of America or anypolitical subdivision of any such state or any public instrumentality thereofmaturing within one year from the date of acquisition and, at the time ofacquisition, having a credit rating of “A” or better from either Standard &Poor’s Ratings Group, Inc. or Moody’s Investors Service, Inc.;

 

(3)                                  certificatesof deposit, time deposits, eurodollar time deposits, overnight bank deposits orbankers’ acceptances having maturities of not more than one year from the dateof acquisition thereof issued by any commercial bank the long term debt ofwhich is rated at the time of acquisition thereof at least “A” or theequivalent thereof by Standard & Poor’s Ratings Group, Inc., or “A” or theequivalent thereof by Moody’s Investors Service, Inc., and having combinedcapital and surplus in excess of $500.0 million;

 

(4)                                  repurchaseobligations with a term of not more than seven days for underlying securitiesof the types described in clauses (1), (2) and (3) entered into with any bankmeeting the qualifications specified in clause (3) above;

 

(5)                                  commercialpaper rated at the time of acquisition thereof at least “A2” or the equivalentthereof by Standard & Poor’s Ratings Group, Inc. or “P2” or the equivalentthereof by Moody’s Investors Service, Inc., or carrying an equivalent rating bya nationally recognized rating agency, if both of the two named rating agenciescease publishing ratings of investments, and in any case maturing within oneyear after the date of acquisition thereof; 

 

(6)                                  interests inany investment company or money market fund which invests 95% or more of itsassets in instruments of the type specified in clauses (1) through (5) above;and

 

(7)                                  money marketfunds that (i) (x) comply with the criteria set forth in SEC Rule 2a-7 underthe Investment Company Act of 1940, as amended and are rated at least “A” byStandard & Poor’s Ratings Group, Inc. and “A” by Moody’s Investors 

 

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Service, Inc. or (y) are rated “AAA” by Standard & Poor’s RatingsGroup, Inc. and “Aaa” by Moody’s Investors Service, Inc. and (ii) haveportfolio assets of at least $2,500,000,000. 

 

“Casualty Event” means anytaking under power of eminent domain or similar proceeding and any insuredloss; *provided* that any such taking or insuredloss that results in Net Available Cash of less than $25.0 million shall not bedeemed a Casualty Event.

 

“Change of Control” means:  

 

(1)                                  any “person”or “group” of related persons (as such terms are used in Sections 13(d) and14(d) of the Exchange Act) is or becomes the beneficial owner (as defined inRules 13d-3 and 13d-5 under the Exchange Act, except that such person or groupshall be deemed to have “beneficial ownership” of all shares that any suchperson or group has the right to acquire, whether such right is exercisableimmediately or only after the passage of time), directly or indirectly, of morethan 50% of the total voting power of the Voting Stock of the Company (otherthan a Wholly-Owned Subsidiary of New Mirant) or Parent (or its successor bymerger, consolidation or purchase of all or substantially all of its assets)(for the purposes of this clause, such person or group shall be deemed tobeneficially own any Voting Stock of the Company or Parent held by a parententity, if such person or group “beneficially owns” (as defined above),directly or indirectly, more than 50% of the voting power of the Voting Stockof such parent entity); or

 

(2)                                  the firstday on which a majority of the members of the Board of Directors of the Companyor Parent are not Continuing Directors; or

 

(3)                                  the sale,lease, transfer, conveyance or other disposition (other than by way of mergeror consolidation), in one or a series of related transactions, of all orsubstantially all of the assets of Parent or, other than to New Mirant or aWholly-Owned Subsidiary of New Mirant, the Company and its RestrictedSubsidiaries taken as a whole to any “person” (as such term is used in Sections13(d) and 14(d) of the Exchange Act); or

 

(4)                                  the adoptionby the stockholders of the Company or Parent of a plan or proposal for theliquidation or dissolution of the Company or Parent.

 

“Code”means the Internal Revenue Code of 1986, as amended.

 

“CommodityAgreement” means any commodity futures contract, commodity option or othersimilar agreement or arrangement entered into by the Company or any RestrictedSubsidiary designed to protect the Company or any of its RestrictedSubsidiaries against fluctuations in the price of any commodity, includingwithout limitation, fuel, emissions and electric energy or capacity, actuallysold or used in the ordinary course of business of the Company and itsRestricted Subsidiaries.

 

“Common Stock”means with respect to any Person, any and all shares, interest or otherparticipations in, and other equivalents (however designated and whether votingor nonvoting) of

 

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such Person’s common stockwhether or not outstanding on the Issue Date, and includes, without limitation,all series and classes of such common stock.

 

“Company” has the meaning set forth in thefirst paragraph of the recitals of this Indenture, and the successors andassigns thereto.  

 

“Consolidated Coverage Ratio” means as of anydate of determination, with respect to any Person, the ratio of (x) theaggregate amount of Consolidated EBITDA of such Person for the period of themost recent four consecutive fiscal quarters ending prior to the date of suchdetermination for which financial statements are in existence (the “Reference Period”)to (y) Consolidated Interest Expense for such four fiscal quarters, *provided*, *however*,that: 

 

(1)                                  if theCompany or any Restricted Subsidiary: 

 

(a)                                  has Incurredany Indebtedness since the beginning of such period that remains outstanding onsuch date of determination or if the transaction giving rise to the need tocalculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness,Consolidated EBITDA and Consolidated Interest Expense for such period will becalculated after giving effect on a pro forma basis to such Indebtedness as ifsuch Indebtedness had been Incurred on the first day of such period (exceptthat in making such computation, the amount of Indebtedness under any revolvingcredit facility outstanding on the date of such calculation will be deemed tobe (i)  the average daily balance of suchIndebtedness during such four fiscal quarters or such shorter period for whichsuch facility was outstanding or (ii) if such facility was created after theend of such four fiscal quarters, the average daily balance of suchIndebtedness during the period from the date of creation of such facility tothe date of such calculation) and the discharge of any other Indebtednessrepaid, repurchased, defeased or otherwise discharged with the proceeds of suchnew Indebtedness as if such discharge had occurred on the first day of suchperiod; or 

 

(b)                                 has repaid,repurchased, defeased or otherwise discharged any Indebtedness since thebeginning of the period that is no longer outstanding on such date ofdetermination or if the transaction giving rise to the need to calculate theConsolidated Coverage Ratio involves a discharge of Indebtedness (in each caseother than Indebtedness Incurred under any revolving credit facility unlesssuch Indebtedness has been permanently repaid and the related commitmentterminated), Consolidated EBITDA and Consolidated Interest Expense for suchperiod will be calculated after giving effect on a pro forma basis to suchdischarge of such Indebtedness, including with the proceeds of such newIndebtedness, as if such discharge had occurred on the first day of suchperiod; 

 

(2)                                  if since thebeginning of such period the Company or any Restricted Subsidiary will havemade any Asset Disposition or disposed of any company, division, operatingunit, segment, business, group of related assets or line of business or if thetransaction giving rise to the need to calculate the Consolidated CoverageRatio is such an Asset Disposition:

 

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(a)                                  theConsolidated EBITDA for such period will be reduced by an amount equal to theConsolidated EBITDA (if positive) directly attributable to the assets which arethe subject of such Asset Disposition for such period or increased by an amountequal to the Consolidated EBITDA (if negative) directly attributable theretofor such period; and

 

(b)                                 ConsolidatedInterest Expense for such period will be reduced by an amount equal to theConsolidated Interest Expense directly attributable to any Indebtedness of theCompany or any Restricted Subsidiary repaid, repurchased, defeased or otherwisedischarged with respect to the Company and its Restricted Subsidiaries inconnection with such Asset Disposition for such period (or, if the CapitalStock of any Restricted Subsidiary is sold, the Consolidated Interest Expensefor such period directly attributable to the Indebtedness of such RestrictedSubsidiary to the extent the Company and its Restricted Subsidiaries are nolonger liable for such Indebtedness after such sale); 

 

(3)                                  if since thebeginning of such period the Company or any Restricted Subsidiary (by merger orotherwise) will have made an Investment in any Restricted Subsidiary (or anyPerson which becomes a Restricted Subsidiary or is merged with or into theCompany) or an acquisition of assets, including any acquisition of assetsoccurring in connection with a transaction causing a calculation to be madehereunder, which constitutes all or substantially all of a company, division,operating unit, segment, business, group of related assets or line of business,Consolidated EBITDA and Consolidated Interest Expense for such period will becalculated after giving pro forma effect thereto (including the Incurrence ofany Indebtedness) as if such Investment or acquisition occurred on the firstday of such period;

 

(4)                                  if since thebeginning of such period any Person (that subsequently became a RestrictedSubsidiary or was merged with or into the Company or any Restricted Subsidiarysince the beginning of such period) will have Incurred any Indebtedness ordischarged any Indebtedness, made any Asset Disposition or any Investment oracquisition of assets that would have required an adjustment pursuant to clause(2) or (3) above if made by the Company or a Restricted Subsidiary during suchperiod, Consolidated EBITDA and Consolidated Interest Expense for such periodwill be calculated after giving pro forma effect thereto as if such transactionoccurred on the first day of such period; and

 

(5)                                  with respectto any portion of a Reference Period that occurs prior to January 3, 2006,Consolidated EBITDA and Consolidated Interest Expense for such period will becalculated after giving pro forma effect to adjustments consistent with thepresentation of Unaudited Pro Forma Condensed Combined Financial Informationfor the twelve months ended September 30, 2005 set forth in the OfferingMemorandum.

 

For purposesof this definition, whenever pro forma effect is to be given to any calculationunder this definition, the pro forma calculations will be determined in goodfaith by a responsible financial or accounting officer of the Company; *provided* that (x) whenever pro formaeffect is to

 

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be given to anInvestment, merger, acquisition or Asset Disposition, the pro formacalculations shall be determined in good faith by a responsible financial oraccounting Officer of the Company and shall comply with the requirements ofRule 11-02 of Regulation S-X promulgated by the SEC, except that such *pro forma* calculations may includeoperating expense reductions for such period resulting from the transactionwhich is being given *pro forma*effect that have been realized or for which substantially all the stepsnecessary for realization have been taken or are reasonably expected to betaken within six months following any such transaction, including, but notlimited to, the execution or termination of any contracts, reduction of costsrelated to administrative functions, the termination of any personnel or theclosing (or approval by the Board of Directors of the Company of any closing)of any facility, as applicable, *provided*that, in either case, such adjustments are set forth in an Officers’Certificate signed by the Company’s chief financial officer and another Officerwhich states (i) the amount of such adjustment or adjustments, (ii) that suchadjustment or adjustments are based on the reasonable good faith beliefs of theOfficers executing such Officers’ Certificate at the time of such execution and(iii) that any related Incurrence of Indebtedness is permitted pursuant to theIndenture and (y) pro forma calculations pursuant to clause (5) above shall beset forth in an Officers’ Certificate signed by the Company’s chief financialofficer and another Officer which states that such calculations are based onthe reasonable good faith beliefs of the Officers executing such Officers’Certificate at the time of such execution. If any Indebtedness bears a floating rate of interest and is being givenpro forma effect, the interest expense on such Indebtedness will be calculatedas if the rate in effect on the date of determination had been the applicablerate for the entire period (taking into account any Interest Rate Agreementapplicable to such Indebtedness if such Interest Rate Agreement has a remainingterm in excess of 12 months).  If anyIndebtedness that is being given pro forma effect bears an interest rate at theoption of the Company, the interest rate shall be calculated by applying suchoptional rate chosen by the Company.

 

“Consolidated EBITDA” for any period means,without duplication, the Consolidated Net Income for such period plus (to theextent deducted from Consolidated Net Income), without duplication: 

 

(1)                                  ConsolidatedInterest Expense; plus

 

(2)                                  ConsolidatedIncome Taxes plus franchise and similar taxes; plus

 

(3)                                  consolidateddepreciation expense; plus or minus, as the case may be

 

(4)                                  allnon-recurring costs and expenses of the Company and its Restricted Subsidiariesincurred in connection with (x) the Emergence Transactions and (y) litigationattributable to the Company’s Chapter 11 cases (so long as such costs andexpenses have been approved and allowed by the Bankruptcy Court), including butnot limited to non-recurring costs and expenses incurred in the relatedfinancing transactions and as a result of operating changes implemented within18 months of the completion of the Emergence Transactions; plus

 

(5)                                  the amountof any restructuring charges (including, without limitation, retention,severance, facility closure costs and benefit charges); plus

 

(6)                                  realizedlosses on transition power agreements, in the amounts set forth in and asfurther described in the Offering Memorandum, but only to the extent such

 

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realized loss was incurred in the consecutive four quarter periodreferred to in the definition of Consolidated Coverage Ratio; plus

 

(7)                                  other non-cashexpenses and losses reducing Consolidated Net Income (including the effects offresh start accounting under SOP 90-7, but excluding any such non-cash chargeto the extent it represents an accrual of or reserve for cash charges in anyfuture period or amortization of a prepaid cash expense that was paid in aprior period not included in the calculation and Mark-to-Market Adjustments);minus

 

(8)                                  noncashitems increasing Consolidated Net Income of such Person for such period(including the effects of fresh start accounting under SOP 90-7, but excludingany items which represent the reversal of any accrual of, or reserve for,anticipated cash charges made in any prior period and Mark-to-MarketAdjustments).

 

Notwithstandingthe preceding sentence, amounts under clauses (2) through (8) of a RestrictedSubsidiary of a Person (other than a Wholly-Owned Subsidiary) will be added toor subtracted from, as the case may be, Consolidated Net Income to computeConsolidated EBITDA of such Person only to the extent (and in the sameproportion) that the net income (loss) of such Restricted Subsidiary wasincluded in calculating the Consolidated Net Income of such Person and, to theextent the amounts set forth in clauses (2) through (8) are in excess of thosenecessary to offset a net loss of such Restricted Subsidiary or if suchRestricted Subsidiary has net income for such period included in ConsolidatedNet Income, only if a corresponding amount would be permitted at the date ofdetermination to be dividended to the Company by such Restricted Subsidiarywithout prior approval (that has not been obtained), pursuant to the terms ofits charter and all agreements, instruments, judgments, decrees, orders,statutes, rules and governmental regulations applicable to that RestrictedSubsidiary or its stockholders.

 

“ConsolidatedIncome Taxes” means, with respect to any Person for any period, taxes imposedupon such Person or other payments required to be made by such Person by anygovernmental authority which taxes or other payments are calculated byreference to the income or profits of such Person or such Person and itsRestricted Subsidiaries (to the extent such income or profits were included incomputing Consolidated Net Income for such period), regardless of whether suchtaxes or payments are required to be remitted to any governmental authority.

 

“Consolidated Interest Expense” means, withrespect to any Person for any period, the sum, without duplication, of:

 

(1)                                  consolidatedinterest expense of such Person and its Restricted Subsidiaries for suchperiod, to the extent such expense was deducted in computing Consolidated NetIncome (including amortization of original issue discount resulting from theissuance of Indebtedness at less than par, noncash interest payments (butexcluding any noncash interest expense attributable to the movement in the mark-to-marketvaluation of Hedging Obligations or other derivative instruments pursuant toFinancial Accounting Standards Board Statement No. 133—”Accounting forDerivative Instruments and Hedging Activities”), the interest component ofCapitalized Lease Obligations and net payments, if any, pursuant to interestrate Hedging Obligations with respect to Indebtedness, and excluding

 

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amortization of deferred financing fees, debt issuance costs,commissions, fees and expenses and any expensing of bridge or other financingfees, commitments, administration and transaction fees and charges);

 

(2)                                  commissions,discounts and other fees and charges owed with respect to letters of credit andbankers’ acceptance financing; 

 

(3)                                  the interestexpense on Indebtedness of another Person that is Guaranteed by such Person orone of its Restricted Subsidiaries or secured by a Lien on assets of suchPerson or one of its Restricted Subsidiaries;

 

(4)                                  the productof (a) all dividends paid or payable, in cash, Cash Equivalents or Indebtednessor accrued during such period on any series of Disqualified Stock of suchPerson or on Preferred Stock of its Restricted Subsidiaries that are notSubsidiary Guarantors payable to a party other than the Company or a Wholly-OwnedSubsidiary, times (b) a fraction, the numerator of which is one and thedenominator of which is one minus the then current combined federal, state,provincial and local statutory tax rate of such Person, expressed as a decimal,in each case, on a consolidated basis and in accordance with GAAP; and

 

(5)                                  consolidatedcapitalized interest of such Person and its Restricted Subsidiaries for suchperiod, whether paid or accrued; less

 

(6)                                  interestincome with respect to accounts deposited to secure the synthetic letter ofcredit tranche of the Senior Secured Credit Agreement in existence on theEmergence Date.

 

“Consolidated Net Income” means, for anyperiod, the Net Income of the Company and its consolidated Restricted Subsidiaries;*provided, however*, that therewill not be included in such Consolidated Net Income:

 

(1)                                  any netincome (loss) of any Person if such Person is not a Restricted Subsidiary,except that, subject to the limitations contained in clauses (3) through (9) belowand to the extent not already included in this definition or pursuant to clause(iv) of the first paragraph of “Certain covenants—Limitation on restrictedpayments”, Consolidated Net Income of the Company and its consolidatedRestricted Subsidiaries shall be increased by the aggregate amount of cashactually distributed by such Person during such period to the Company or aRestricted Subsidiary as a dividend or other distribution (subject, in the caseof a dividend or other distribution to a Restricted Subsidiary, to thelimitations contained in clause (2) below);

 

(2)                                  for purposesof the covenant described under “Certain covenants—Limitation on restrictedpayments” only, any net income (but not loss) of any Restricted Subsidiary tothe extent such Subsidiary is not permitted at the date of determination todeclare or pay dividends or similar distributions without any priorgovernmental approval (which approval has not been obtained) or, directly orindirectly, by the operation of the terms of its charter or any agreement,instrument, judgment decree, order, statute, rule or governmental regulationapplicable to that Restricted Subsidiary or its stockholders, (unless such

 

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restriction has been waived or arises solely from the requirement underthe Facility Lease Documents with respect to MIRMA and its Subsidiaries thatMIRMA and its Subsidiaries deliver financial statements for the most recentlycompleted fiscal year or fiscal quarter, as the case may be, and the date ofdetermination is less than 90 or 60 days, as the case may be, from the end ofsuch fiscal year or fiscal quarter), except that:

 

(a)                                  subject tothe limitations contained in clauses (3) through (9) below, the Company’sequity in the net income of any such Restricted Subsidiary for such period willbe included in such Consolidated Net Income up to the aggregate amount of cashthat could have been distributed by such Restricted Subsidiary during suchperiod to the Company or another Restricted Subsidiary as a dividend (subject,in the case of a dividend to another Restricted Subsidiary, to the limitationcontained in this clause); and

 

(b)                                 the Company’sequity in a net loss of any such Restricted Subsidiary for such period will beincluded in determining such Consolidated Net Income; 

 

(3)                                  any gain(loss) realized upon the sale or other disposition of any property, plant orequipment of the Company or its consolidated Restricted Subsidiaries (includingpursuant to any Sale/Leaseback Transaction) which is not sold or otherwisedisposed of in the ordinary course of business (determined in good faith by theBoard of Directors of the Company) and any gain (loss) realized upon the saleor other disposition of any Capital Stock of any Person;

 

(4)                                  any extraordinarygain or loss; 

 

(5)                                  thecumulative effect of a change in accounting principles;

 

(6)                                  any increasein amortization or depreciation or other non-cash charges resulting from theapplication of SOP 90-7 in relation to the Emergence Transactions or frompurchase accounting due to any acquisition that is consummated after the IssueDate; and

 

(7)                                  any income(loss) from the early extinguishment of Indebtedness; 

 

(8)                                  consolidatedamortization expense or impairment charges recorded in connection with theapplication of Financial Accounting Standard No. 142 “Goodwill and OtherIntangibles” and Financial Accounting Standard No. 144 “Accounting for theImpairment or Disposal of Long Lived Assets;” and

 

(9)                                  Mark-to-MarketAdjustments.

 

Forpurposes of calculating the amount of Restricted Payments permitted pursuant toclause (c)(i) of Section 3.3, the amount of Consolidated Net Incomeshall be reduced, without duplication, by amounts dividended to Parent fortaxes pursuant to clause (10) of the second paragraph of Section 3.3(such calculation to be made on a quarterly basis).

 

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Notwithstandingthe foregoing, for the purpose of Section 3.3 only, there shall beexcluded from Consolidated Net Income any income arising from any sale or otherdisposition of Restricted Investments made by the Company and its RestrictedSubsidiaries, any repurchases and redemptions from the Company and itsRestricted Subsidiaries, any repayments on loans and advances which constituteRestricted Investments by the Company or any Restricted Subsidiary, any sale ofthe stock of an Unrestricted Subsidiary or any distribution or dividend from anUnrestricted Subsidiary, in each case only to the extent such amounts increasethe amount of Restricted Payments permitted under such covenant pursuant toclause (c)(iv) of Section 3.3. 

 

“ContinuingDirectors” means, as of any date of determination, any member of the Board ofDirectors of the Company or Parent, as the case may be, who: (1) was a memberof such Board of Directors on the date of the Indenture; or (2) was nominatedfor election or elected to such Board of Directors with the approval of amajority of the Continuing Directors who were members of the relevant Board atthe time of such nomination or election. 

 

“CreditFacility” means, with respect to the Company or any Subsidiary Guarantor, oneor more debt facilities (including, without limitation, the Senior SecuredCredit Agreement or commercial paper facilities with banks or other institutionallenders providing for revolving credit loans, term loans, receivables financing(including through the sale of receivables to such lenders or to specialpurpose entities formed to borrow from such lenders against such receivables)or letters of credit, in each case, as amended, restated, modified, renewed,refunded, replaced or refinanced (including by means of sales of debtsecurities to institutional investors) in whole or in part from time to time(and whether or not with the original administrative agent and lenders oranother administrative agent or agents or other lenders and whether providedunder the original Senior Secured Credit Agreement or any other credit or otheragreement, commercial paper facilities with banks or other institutionalinvestors or one or more indentures).

 

“CurrencyAgreement” means, in respect of a Person, any foreign exchange contract,currency swap agreement, futures contract, option contract or other similaragreement as to which such Person is a party or a beneficiary.

 

“Custodian”means any receiver, trustee, assignee, liquidator, custodian or similarofficial under any Bankruptcy Law.

 

“Default”means any event which is, or after notice or passage of time or both would be,an Event of Default.

 

“DefinitiveSecurities” means certificated Securities.

 

“Disqualified Stock” means, with respect toany Person, any Capital Stock of such Person which by its terms (or by theterms of any security into which it is convertible or for which it isexchangeable) or upon the happening of any event: 

 

(1)                                  matures oris mandatorily redeemable pursuant to a sinking fund obligation or otherwise; 

 

(2)                                  isconvertible or exchangeable for Indebtedness or Disqualified Stock (excludingCapital Stock which is convertible or exchangeable solely at the option of theCompany or a Restricted Subsidiary); or 

 

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(3)                                  isredeemable at the option of the holder of the Capital Stock in whole or inpart, in each case on or prior to the date that is 91 days after the earlier ofthe date (a) of the Stated Maturity of the Securities or (b) on which there areno Securities outstanding, *provided*that only the portion of Capital Stock which so matures or is mandatorilyredeemable, is so convertible or exchangeable or is so redeemable at the optionof the holder thereof prior to such date will be deemed to be DisqualifiedStock; *provided, further*that anyCapital Stock that would constitute Disqualified Stock solely because theholders thereof have the right to require the Company to repurchase suchCapital Stock upon the occurrence of a change of control or asset sale (eachdefined in a substantially identical manner to the corresponding definitions inthe Indenture) shall not constitute Disqualified Stock if the terms of suchCapital Stock (and all such securities into which it is convertible or forwhich it is ratable or exchangeable) provide that the Company may notrepurchase or redeem any such Capital Stock (and all such securities into whichit is convertible or for which it is ratable or exchangeable) pursuant to suchprovision prior to compliance by the Company with Section 3.5 and Section3.11 of this Indenture and such repurchase or redemption complies with Section3.3.  

 

“DTC”means The Depository Trust Company, its nominees and their respectivesuccessors and assigns, or such other depository institution hereinafterappointed by the Company.

 

“EmergenceDate” means the date on which Section 12.2 of the Plan of Reorganization(Conditions Precedent to the Occurrence of the Effective Date) shall have beensatisfied, the Emergence Transactions shall have occurred and the Plan ofReorganization shall have been substantially consummated.

 

“EmergenceTransactions” means the various transactions set forth in the Plan ofReorganization entered into by the Company and its affiliates in connectionwith the Emergence Date and substantial consummation of the Plan ofReorganization, including without limitation, the various corporaterestructuring transactions outlined in the Plan of Reorganization (other thanthe contribution of MET to the Company which shall occur no later than 60 daysafter the Emergence Date), the issuance of the Securities, borrowing made underthe Senior Secured Credit Agreement on the Emergence Date and the applicationof a portion of the proceeds of such financings in accordance with such Plan ofReorganization.

 

“EquityOffering” means (a) a public offering for cash by the Company or Parent, as thecase may be, of its Common Stock, or options, warrants or rights with respectto its Common Stock, other than (x) public offerings with respect to options,warrants or rights, registered on Form S-4 or S-8, (y) an issuance to anySubsidiary or (z) any offering of Common Stock issued in connection with atransaction that constitutes a Change of Control and (b) contributions of cashor Cash Equivalents to the common equity capital of the Company by Personsother than the Company and its Subsidiaries (except in connection with atransaction that constitutes a Change of Control).  For the avoidance of doubt, any paymentsreceived by the Company in respect of MAI Series A Preferred Shares and MAISeries B Preferred Shares shall not constitute Equity Offerings. 

 

“EscrowAgreement” means that certain escrow agreement dated as of the date of thisIndenture by and among the Issuers, the Trustee, Deutsche Bank Trust CompanyAmericas, as

 

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securitiesintermediary and escrow agent, and the other parties thereto, as the same maybe amended, supplemented or otherwise modified from time to time.

 

“ExchangeAct” means the Securities Exchange Act of 1934, as amended, and the rules andregulations of the SEC promulgated thereunder.

 

“ExchangeOffer” shall have the meaning set forth in the Registration Rights Agreement.

 

“ExchangeSecurities” has the meaning ascribed to it in the second introductory paragraphof this Indenture.

 

“ExcludedContribution” means net cash proceeds, marketable securities or QualifiedProperty, in each case received by the Company and its Restricted Subsidiariesfrom:

 

(1)                                  contributions to its common equitycapital; and

 

(2)                                  the sale (other than to a Subsidiary orto any management equity plan or stock option plan or any other management oremployee benefit plan or agreement of the Company or any Subsidiary) of CapitalStock (other than Disqualified Stock),

 

in each case designated as ExcludedContributions pursuant to an Officers’ Certificate on the date such capitalcontributions are made or the date such Capital Stock is sold, as the case maybe, which are excluded from the calculation set forth in clause (c)(ii) of thefirst paragraph of Section 3.3.

 

“Facilities”means the electric generating facilities (including any electric generating facilitiesunder construction) owned by the Company or any of its Restricted Subsidiaries.

 

“FacilityLease Documents” means the eleven Facility Lease Agreements, dated December 19,2000, the related Participation Agreements and all other agreements entered intoin connection therewith and related thereto, in each case as amended, modified,or supplemented from time to time.

 

“GAAP”means generally accepted accounting principles in the United States of Americaas in effect as of the date of this Indenture, including those set forth in theopinions and pronouncements of the Accounting Principles Board of the AmericanInstitute of Certified Public Accountants and statements and pronouncements ofthe Financial Accounting Standards Board or in such other statements by suchother entity as approved by a significant segment of the accounting profession.All ratios and computations based on GAAP contained in this Indenture will becomputed in conformity with GAAP.

 

“GovernmentalAuthority” means any nation or government, any state or other politicalsubdivision thereof, any agency, authority, instrumentality, regulatory body,court, central bank or other entity exercising executive, legislative,judicial, taxing, regulatory or administrative functions of or pertaining togovernment.

 

“Guarantee” means any obligation, contingentor otherwise, of any Person directly or indirectly guaranteeing anyIndebtedness of any other Person and any obligation, direct or indirect,contingent or otherwise, of such Person:

 

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(1)                                  to purchaseor pay (or advance or supply funds for the purchase or payment of) suchIndebtedness of such other Person (whether arising by virtue of partnershiparrangements, or by agreement to keep-well, or to maintain financial statementconditions or otherwise); or 

 

(2)                                  entered intofor purposes of assuring in any other manner the obligee of such Indebtednessof the payment thereof or to protect such obligee against loss in respectthereof (in whole or in part); *provided,however,* that the term “Guarantee” will not include endorsements forcollection or deposit in the ordinary course of business. The term “Guarantee”used as a verb has a corresponding meaning.

 

“GuarantorSubordinated Obligation” means, with respect to a Subsidiary Guarantor, anyIndebtedness of such Subsidiary Guarantor (whether outstanding on the IssueDate or thereafter Incurred) which is expressly subordinate in right of paymentto the obligations of such Subsidiary Guarantor under its Subsidiary Guaranteepursuant to a written agreement.

 

“HedgingObligations” of any Person means the obligations of such Person pursuant to anyInterest Rate Agreement, Currency Agreement or Commodity Agreement.

 

“Holder”or “holder” means a Person in whose name a Security is registered on the Registrar’s books.

 

“IAI”means an institutional “accredited investor” as described in Rule 501(a)(1),(2), (3) or (7) under the Securities Act.

 

“Incur”means issue, create, assume, Guarantee, incur or otherwise become liable for; *provided, however,* that any Indebtedness or Capital Stockof a Person existing at the time such person becomes a Restricted Subsidiary(whether by merger, consolidation, acquisition or otherwise) will be deemed tobe Incurred by such Restricted Subsidiary at the time it becomes a RestrictedSubsidiary; and the terms “Incurred” and “Incurrence” have meanings correlativeto the foregoing.

 

“Indebtedness” means, with respect to anyPerson on any date of determination (without duplication):

 

(1)                                  the principalof and premium (if any) in respect of indebtedness of such Person for borrowedmoney (other than except as provided in clause (3) below, in respect of lettersof credit);

 

(2)                                  theprincipal of and premium (if any) in respect of obligations of such Personevidenced by bonds, debentures, notes or other similar instruments (other thanexcept as provided in clause (3) below, in respect of letters of credit);

 

(3)                                  reimbursementobligations in respect of drawn letters of credit, except to the extent such reimbursementobligation relates to a trade payable and such obligation is satisfied within30 days of Incurrence;

 

(4)                                  theprincipal component of all obligations of such Person to pay the deferred andunpaid purchase price of property (except trade payables), which purchase priceis due more than six months after the date of placing such property in serviceor taking delivery and title thereto; 

 

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(5)                                  CapitalizedLease Obligations and all Attributable Indebtedness of such Person; 

 

(6)                                  theprincipal component or liquidation preference of all obligations of such Personwith respect to the redemption, repayment or other repurchase of anyDisqualified Stock or, with respect to any Subsidiary that is not a SubsidiaryGuarantor, any Preferred Stock (but excluding, in each case, any accrueddividends);

 

(7)                                  theprincipal component of all Indebtedness of other Persons secured by a Lien onany asset of such Person, whether or not such Indebtedness is assumed by such Person;*provided*, *however*,that the amount of such Indebtedness will be the lesser of (a) the fair marketvalue of such asset at such date of determination and (b) the amount of suchIndebtedness of such other Persons;

 

(8)                                  theprincipal component of Indebtedness of other Persons to the extent Guaranteedby such Person;  and

 

(9)                                  to theextent not otherwise included in this definition, net obligations of suchPerson under Hedging Obligations with respect to Interest Rate Agreements andCurrency Agreements (the amount of any such obligations to be equal at any timeto the termination value of such agreement or arrangement giving rise to suchobligation that would be payable by such Person at such time).

 

The amount ofIndebtedness of any Person at any date will be the outstanding balance at suchdate of all unconditional obligations as described above (except earnoutprovisions contained in acquisition or similar agreements that may be deemedIndebtedness pursuant to clause (4) above) and the maximum liability, upon theoccurrence of the contingency giving rise to the obligation, of any contingentobligations at such date. Notwithstanding the foregoing, money borrowed and set aside at the timeof the Incurrence of any Indebtedness in order to pre-fund the payment ofinterest on such Indebtedness shall not be deemed to be “Indebtedness” *provided* that such money is held to secure the payment ofsuch interest.

 

In addition, “Indebtedness” of any Personshall include Indebtedness described in the preceding paragraph that would notappear as a liability on the balance sheet of such Person if:

 

(1)                                  suchIndebtedness is the obligation of a partnership or joint venture that is not aRestricted Subsidiary (a “Joint Venture”);

 

(2)                                  such Personor a Restricted Subsidiary of such Person is a general partner of the JointVenture (a “General Partner”); and

 

(3)                                  there isrecourse, by contract or operation of law, with respect to the payment of suchIndebtedness to property or assets of such Person or a Restricted Subsidiary ofsuch Person; and then such Indebtedness shall be included in an amount not toexceed:

 

(a)                                  the lesserof (i) the net assets of the General Partner and (ii) the amount of suchobligations to the extent that there is recourse, by contract or operation oflaw, to the property or assets of such Person or a Restricted Subsidiary ofsuch Person; or

 

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(b)                                 if less thanthe amount determined pursuant toclause (a) immediately above, the actual amount of such Indebtedness that isrecourse to such Person or a Restricted Subsidiary of such Person, if theIndebtedness is evidenced by a writing and is for a determinable amount. 

 

“Indenture”means this Indenture as amended or supplemented from time to time.

 

“InitialPurchasers” means, together, J.P. Morgan Securities Inc., Deutsche BankSecurities Inc., Goldman, Sachs & Co., Credit Suisse First Boston LLC,Lehman Brothers Inc. and Greenwich Capital Markets, Inc.

 

“InitialSecurities” has the meaning ascribed to it in the second introductory paragraphof this Indenture.

 

“InterestRate Agreement” means with respect to any Person any interest rate protectionagreement, interest rate future agreement, interest rate option agreement,interest rate swap agreement, interest rate cap agreement, interest rate collaragreement, interest rate hedge agreement or other similar agreement orarrangement as to which such Person is party or a beneficiary.

 

“Investment” means, with respect to anyPerson, all investments by such Person in other Persons (including Affiliates)in the form of any direct or indirect advance, loan (other than advances orextensions of credit to customers and counterparties in the ordinary course ofbusiness) or other extensions of credit (including by way of Guarantee orsimilar arrangement, but excluding any debt or extension of credit representedby a bank deposit other than a time deposit) or capital contribution to (bymeans of any transfer of cash or other property to others or any payment forproperty or services for the account or use of others), or any purchase oracquisition of Capital Stock, Indebtedness or other similar instruments issuedby, such Person and all other items that are or would be classified asinvestments on a balance sheet prepared in accordance with GAAP; *provided* that none of the following willbe deemed to be an Investment:

 

(1)                                  HedgingObligations in compliance with this Indenture;

 

(2)                                  endorsementsof negotiable instruments and documents in the ordinary course of business; and

 

(3)                                  an acquisitionof assets, Capital Stock or other securities by the Company or a Subsidiary forconsideration to the extent such consideration consists of Common Stock of theCompany.

 

For purposes of Section 3.3,

 

(1)                                  “Investment”will include the portion (proportionate to the Company’ equity interest in aRestricted Subsidiary to be designated as an Unrestricted Subsidiary) of thefair market value of the net assets of such Restricted Subsidiary at the timethat such Restricted Subsidiary is designated an Unrestricted Subsidiary; *provided, however,* that upon aredesignation of such Subsidiary as a Restricted Subsidiary, the Company willbe deemed to continue to have a permanent “Investment” in an UnrestrictedSubsidiary in an amount (if positive) equal to (a) the Company’s “Investment”in such Subsidiary at the time of such redesignation less (b) the portion(proportionate to the Company’ equity interest in such

 

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Subsidiary) of the fair market value of the net assets (as conclusivelydetermined by the Board of Directors of the Company in good faith) of suchSubsidiary at the time that such Subsidiary is so re-designated a RestrictedSubsidiary; and 

 

(2)                                  any propertytransferred to or from an Unrestricted Subsidiary will be valued at its fairmarket value at the time of such transfer, in each case as determined in good faith by the Board of Directors of theCompany.  If the Company or anyRestricted Subsidiary sells or otherwise disposes of any Voting Stock of anyRestricted Subsidiary such that, after giving effect to any such sale ordisposition, such entity is no longer a Subsidiary of the Company, the Companyshall be deemed to have made an Investment on the date of any such sale ordisposition equal to the fair market value (as conclusively determined by theBoard of Directors of the Company in good faith) of the Capital Stock of suchSubsidiary not sold or disposed of. 

 

“InvestmentGrade Rating” means a rating equal to or higher than Baa3 (or the equivalent)by Moody’s Investors Service, Inc. and BBB- (or the equivalent) by Standard& Poor’s Ratings Group, Inc., in each case with a stable or better outlook.

 

“IssueDate” means December 23, 2005.

 

“Issuers” has themeaning ascribed to it in the first introductory paragraph of this Indenture.

 

“LegalHoliday” has the meaning ascribed to it under Section 11.8.

 

“Law”means, as to any Person, the Certificate of Incorporation and By-Laws or otherorganizational or governing documents of such Person, and any law, treaty, ruleor regulation or determination of an arbitrator or a court or otherGovernmental Authority, in each case applicable to or binding upon such Personor any of its property or to which such Person or any of its property issubject. 

 

“Lien”means any mortgage, pledge, security interest, encumbrance, lien or charge ofany kind (including any conditional sale or other title retention agreement orlease in the nature thereof).

 

“MAG”means Mirant Americas Generation, LLC, a Delaware limited liability company.

 

“MAGSenior Notes” means the following series of MAG senior notes: the $850,000,000of Senior Notes due 2011, the $450,000,000 of Senior Notes due 2021, and the$400,000,000 of Senior Notes due 2031.

 

 “MAI Series A Preferred Shares” has the meaningset forth in the Plan of Reorganization.

 

“MAISeries B Preferred Shares” has the meaning set forth in the Plan ofReorganization.

 

“ManagementAgreement” means the Service Agreement, dated as of January 3, 2006, pursuantto which Mirant Services performs the administrative functions described in “Certainrelationship and related party transactions — Related party arrangements afteremergence from

 

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bankruptcy — Administration servicesagreements with Mirant Services” section of the Offering Memorandum, asamended, supplemented or otherwise modified from time to time.

 

“Mark-to-Market Adjustments” means the net of: (1) any unrealized or non-cash loss attributable to changes in the fair value ofHedging Obligations (to the extent the cash impact resulting from such loss hasnot been realized) or other derivative instruments pursuant to FinancialAccounting Standards Board Statement No. 133, “Accounting for DerivativeInstruments and Hedging Activities” and (2) any unrealized or non-cashgain attributable to changes in the fair value of Hedging Obligations (to theextent the cash impact resulting from such gain has not been realized) or otherderivative instruments pursuant to Financial Accounting Standards BoardStatement No. 133, “Accounting for Derivative Instruments and HedgingActivities.”

 

“MET” means Mirant Energy Trading LLC, aDelaware limited liability company.

 

 “MIRMA”means Mirant Mid-Atlantic, LLC, a Delaware limited liability company.

 

 “Net Available Cash” from an Asset Dispositionor Casualty Event means cash payments or Cash Equivalents received (includingany cash payments received by way of deferred payment of principal pursuant toa note or installment receivable or otherwise and proceeds from the sale orother disposition of any securities or other assets received as consideration,but only as and when received, but excluding any other consideration receivedin the form of assumption by the acquiring person of Indebtedness or otherobligations relating to the properties or assets that are the subject of suchAsset Disposition or Casualty Event or received in any other non-cash form thatis not converted into cash or Cash Equivalents) therefrom, in each case net of:

 

(1)                                  all legal,accounting, investment banking, title and recording tax expenses, commissionsand other fees and expenses Incurred, and all Federal, state, provincial,foreign and local taxes required to be paid or accrued as a liability underGAAP (after taking into account any available tax credits or deductions and anytax sharing agreements), as a consequence of such Asset Disposition or CasualtyEvent;

 

(2)                                  all paymentsmade on any Indebtedness which is secured by any assets subject to such AssetDisposition or Casualty Event, in accordance with the terms of any Lien uponsuch assets, or which must by its terms, or in order to obtain a necessaryconsent to the Asset Disposition, or by applicable law be repaid out of the proceedsfrom such Asset Disposition or Casualty Event; 

 

(3)                                  alldistributions and other payments required to be made to minority interestholders in Subsidiaries or joint ventures as a result of such Asset Dispositionor Casualty Event; and

 

(4)                                  the deductionof appropriate amounts to be provided by the seller as a reserve, in accordancewith GAAP, against any liabilities associated with the assets disposed of insuch Asset Disposition or Casualty Event and retained by the Company or anyRestricted Subsidiary after such Asset Disposition or Casualty Event.

 

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“Net Cash Proceeds” with respect to any issuanceor sale of Capital Stock, means the cash proceeds of such issuance or sale netof attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees,listing fees, discounts or commissions and brokerage, consultant and other feesand charges actually Incurred in connection with such issuance or sale and netof taxes paid or payable as a result of such issuance or sale (after takinginto account any available tax credit or deductions and any tax sharingarrangements) ); *provided* thatthe cash proceeds of an Equity Offering by Parent shall not be deemed Net CashProceeds, except to the extent such cash proceeds are contributed to theCompany.

 

“Net Income” means, with respect to anyspecified Person, the net income (loss) of such Person, determined inaccordance with GAAP and before any reduction in respect of preferred stockdividends.

 

“New Mirant” has the meaning set forth in thePlan of Reorganization.

 

“New York Unrestricted Subsidiary” means any ofMirant New York, Inc., Mirant Lovett, LLC, Mirant NY-Gen, LLC, MirantBowline, LLC or Hudson Valley Gas Corporation.

 

“Non-Guarantor Restricted Subsidiary” means anyRestricted Subsidiary that is not a Subsidiary Guarantor.

 

“Non-Recourse Debt” meansIndebtedness of a Person:

 

(1)                                  as to which(x) neither the Company nor any Restricted Subsidiary (a) provides anyGuarantee or credit support of any kind (including any undertaking, guarantee,indemnity, agreement or instrument that would constitute Indebtedness) or (b) isdirectly or indirectly liable (as a guarantor or otherwise) and (y) no lenderhas recourse to any of the assets of the Company or any Restricted Subsidiary; *provided* that recourse shall not be deemed to exist byreason of normal and customary sponsor support arrangements; and 

 

(2)                                  no defaultwith respect to which (including any rights that the holders thereof may haveto take enforcement action against an Unrestricted Subsidiary) would permit(upon notice, lapse of time or both) any holder of any other Indebtedness ofthe Company or any Restricted Subsidiary to declare a default under such otherIndebtedness or cause the payment thereof to be accelerated or payable prior toits stated maturity.

 

“Non-U.S. Person” means a Person who is not aU.S. Person (as defined in Regulation S).

 

“Offering Memorandum” means the offeringmemorandum relating to the offering of the Securities dated December 20,2005.

 

“Officer” means the Chairman of the Board, theChief Executive Officer, the President, the Chief Financial Officer, any VicePresident, the Treasurer or the Secretary of the Issuers or, in the event thatthe Issuer is a partnership or a limited liability company that has no suchofficers, a person duly authorized under applicable law by the general partner,managers, members or a similar body to act on behalf of such Issuer. Officer ofany Subsidiary Guarantor has a correlative meaning.

 

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“Officers’ Certificate” means a certificatesigned on behalf of (i) the Issuers by two Officers or by an Officer andeither an Assistant Treasurer or an Assistant Secretary of each of Escrow LLC,MNA and MNA Finance Corp. or (ii) the Company by two Officers or by anOfficer and either an Assistant Treasurer or an Assistant Secretary, as thecase may be.

 

 “Opinionof Counsel” means a written opinion from legal counsel who is reasonablyacceptable to the Trustee. The counsel may be an employee of or counsel tothe Issuers or the Trustee.

 

“Parent” means any of New Mirant or any director indirect Wholly-Owned Subsidiary of New Mirant or any successor thereto thatis a direct or indirect parent entity of the Company.

 

“Pari PassuIndebtedness” means Indebtedness that ranks equally in right of payment to theSecurities.

 

“PermittedBusiness” means the business of acquiring, constructing, managing, developing,improving, owning and operating Facilities, as well as trading and any otheractivities reasonably related to the foregoing activities (including acquiringand holding reserves), including investing in Facilities or other activitiesengaged into by the Company and its Restricted Subsidiaries on the Emergence Dateand described in the Offering Memorandum.

 

“Permitted Counterparty Lien”means a Lien in favor of a counterparty under a PPA, *provided*that the following conditions are satisfied:

 

(a)                                 except as contemplated by (1)(b) of thedefinition of “PPA”, the counterparty is not an Affiliate of the Company; 

 

(b)                                the Lien does not secure any Indebtedness and(i) is granted solely to secure the performance obligations of the Companyor the applicable Restricted Subsidiary under the PPA and/or any obligation ofthe Company or the applicable Restricted Subsidiary to make a terminationpayment under the PPA upon the occurrence of the event described in clause(c)(ii)(A) below or the termination by the counterparty upon theoccurrence of any of the events described in clause (c)(ii)(B) below, or (ii) createsrights designed to enable the counterparty to assume operational control of therelevant Facility or Facilities (e.g., step-in rights) or otherwise continueperformance of the Company’s or the applicable Restricted Subsidiary’sobligations under the PPA;

 

(c)                                 the counterparty can exercise its rights withrespect to the Lien only (i) for so long as the counterparty remainscurrent with respect to all of its payment obligations under the PPA and is nototherwise in a continuing default under the PPA, and (ii) if either (A) theCompany or the applicable Restricted Subsidiary has terminated, rejected orrepudiated the PPA (including any rejection or similar act by or on behalf ofthe Company or the applicable Restricted Subsidiary in connection with anybankruptcy proceeding) or (B) the Company or the applicable RestrictedSubsidiary has breached its obligations under the PPA; *provided*,that the following actions will be considered a breach by the Company or theapplicable Restricted Subsidiary under the PPA: (1) the Company or theapplicable Restricted Subsidiary provides or delivers capacity or energy to athird party if the

 

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Company or the applicableRestricted Subsidiary is required under the PPA to provide or deliver suchcapacity or energy to the counterparty; (2) the Company or the applicableRestricted Subsidiary of the Company fails to perform its materialobligations under the PPA, and such failure continues beyond any cure or graceperiod under the PPA, and its performance is not prevented by force majeure,forced outage or other events or circumstances outside the reasonable controlof the Person responsible therefor; (3) any failure by the Company or theapplicable Restricted Subsidiary to comply with any provisions of the PPAdesigned to enable the counterparty to assume operational control of therelevant Facility or Facilities (e.g., step-in rights) or otherwise takeactions necessary to continue performance of the Company’s or the applicableRestricted Subsidiary’s obligations under the PPA, in each case to the extentthe Company or the applicable Restricted Subsidiary is then capable ofcomplying with such provisions; or (4) any failure by the Company or theapplicable Restricted Subsidiary to pay to the counterparty any amount due andpayable in accordance with the terms and conditions of the PPA; 

 

(d)                                the counterparty’s exercise of its rightswith respect to the Lien is limited to (i) the taking of actions pursuantto any provisions of the PPA designed to enable the counterparty to assumeoperational control of the relevant Facility or Facilities (e.g., step-inrights) or otherwise necessary to continue performance of the Company’s or theapplicable Restricted Subsidiary’s obligations under the PPA or (i) therecovery of any termination payment due under the PPA upon the occurrence ofthe event described in clause (c)(ii)(A) above or the termination by thecounterparty upon the occurrence of any of the events described in clause(c)(ii)(B) above;

 

(e)                                 the Lien is limited to the assets of theCompany or Restricted Subsidiary specific to its performance under such PPA;and

 

(f)                                   the obligations secured by each such Lien isstructured so that the counterparty’s credit exposure and actual or projectedmark-to market exposure to the Company or Restricted Subsidiary, as the case may be,is positively correlated with power prices.

 

“Permitted Investment” means anInvestment by the Company or any Restricted Subsidiary in:

 

(1)                                  the Company,a Restricted Subsidiary or a Person which will, upon the making of suchInvestment, become a Restricted Subsidiary; *provided,however*, that Investments in Non-Guarantor Restricted Subsidiariesshall not be in the form of a contribution or transfer of materialproperty, plant and equipment or Capital Stock of any Person;

 

(2)                                  anotherPerson if as a result of such Investment such other Person is merged orconsolidated with or into, or transfers or conveys all or substantially all itsassets to, the Company or a Restricted Subsidiary; *provided, however*, that if such Person becomes aNon-Guarantor Restricted Subsidiary, such Investment shall

 

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not be in the form of a contribution or transfer or assets (otherthan cash) or Capital Stock of any Person;

 

(3)                                  cash andCash Equivalents; 

 

(4)                                  receivablesowing to the Company or any Restricted Subsidiary created or acquired in thecourse of commercial activities; 

 

(5)                                  payroll,travel and similar advances to cover matters that are expected at the time ofsuch advances ultimately to be treated as expenses for accounting purposes andthat are made in the ordinary course of business; 

 

(6)                                  loans oradvances to employees (other than executive officers) of the Company and itsRestricted Subsidiaries made in the ordinary course of business of the Companyor such Restricted Subsidiary in an aggregate amount at any one timeoutstanding not to exceed $2.0 million (loans or advances that are forgivenshall continue to be deemed outstanding); 

 

(7)                                  CapitalStock, obligations or securities received in settlement of debts created in theordinary course of business and owing to the Company or any RestrictedSubsidiary or in satisfaction of judgments or pursuant to any plan ofreorganization or similar arrangement upon the bankruptcy or insolvency of adebtor;

 

(8)                                  Investmentsmade as a result of the receipt of non-cash consideration from an AssetDisposition that was made pursuant to and in compliance with Section 3.5;

 

(9)                                  Investmentsin existence, or committed to (and identified on Schedule I to thisIndenture on the Issue Date), on the Emergence Date; 

 

(10)                            CurrencyAgreements, Interest Rate Agreements, Commodity Agreements and related HedgingObligations, which transactions or obligations are not prohibited by Section 3.2;

 

(11)                            Guaranteesissued in accordance with Section 3.2;

 

(12)                            Investmentsin the form of, or pursuant to, working interests, royalty interests,mineral leases, processing agreements, farm-out agreements, contracts for thesale, transportation or exchange of oil and natural gas, unitizationagreements, pooling agreements, area of mutual interest agreements, productionsharing agreements or other similar or customary agreements, transactions, properties,interests or arrangements, and Investments and expenditures in connectiontherewith or pursuant thereto, in each case, made or entered into in theordinary course of business; and

 

(13)                            Investmentsby the Company or any of its Restricted Subsidiaries, together with all otherInvestments pursuant to this clause (13), in an aggregate amount at the time ofsuch Investment not to exceed the greater of $200.0 million and 5% of TotalAssets outstanding at any one time (without giving effect to the sale of anUnrestricted Subsidiary to the extent the proceeds of such sale do not consistof cash and/or marketable securities) (with the fair market value of suchInvestment

 

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being measured at the time made and without giving effect to subsequentchanges in value); *provided, however*,that if any Investment pursuant to this clause (13) is made in any Person thatis not a Restricted Subsidiary at the date of the making of the Investment andsuch Person becomes a Restricted Subsidiary after such date, such Investmentshall thereafter be deemed to have been made pursuant to clause (1) aboveand shall cease to have been made pursuant to this clause (13).

 

“Permitted Liens” means, withrespect to any Person:

 

(1)                                  Liens securingIndebtedness and other obligations and related Hedging Obligations of theCompany and Subsidiary Guarantors Incurred under the provisions described inclause (b)(1) of Section 3.2;

 

(2)                                  pledges ordeposits by such Person under workmen’s compensation laws, unemploymentinsurance laws or similar legislation, or good faith deposits in connectionwith bids, tenders, contracts (other than for the payment of Indebtedness) orleases to which such Person is a party, or deposits to secure public or statutoryobligations of such Person or deposits of cash or United States governmentbonds to secure surety or appeal bonds to which such Person is a party, ordeposits as security for contested taxes or import or customs duties or for thepayment of rent, in each case Incurred in the ordinary course of business;

 

(3)                                  Liensarising by operation of law or by order of a court or tribunal or otherGovernmental Authority (or by an agreement of similar effect), includingcarriers’, warehousemen’s, mechanics’, materialmen’s and repairmen’s Liens, ineach case for sums not yet due or being contested in good faith by appropriateproceedings; 

 

(4)                                  Liens fortaxes, assessments or other governmental charges not yet subject to penaltiesfor non-payment or which are being contested in good faith by appropriateproceedings provided appropriate reserves required pursuant to GAAP have beenmade in respect thereof; 

 

(5)                                  Liens infavor of issuers of surety or performance bonds or letters of credit or bankers’acceptances issued pursuant to the request of and for the account of suchPerson in the ordinary course of its business; *provided*,*however*, that the reimbursementobligations with respect to such letters of credit do not constituteIndebtedness;

 

(6)                                  encumbrances,ground leases, easements or reservations of, or rights of others for, licenses,rights of way, sewers, electric lines, telegraph and telephone lines and othersimilar purposes, or zoning, building codes or other restrictions (including,without limitation, defects or irregularities in title and similar encumbrancesthat are not material to the operations of the Company and its RestrictedSubsidiaries taken as a whole) as to the use of real properties or Liensincidental to the conduct of the business of such Person or to the ownership ofits properties which do not in the aggregate materially adversely affect thevalue of said properties or materially impair their use in the operation of thebusiness of such Person;

 

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(7)                                  Lienssecuring Hedging Obligations so long as the related Indebtedness is, and ispermitted to be under this Indenture, secured by a Lien on the same propertysecuring such Hedging Obligation; 

 

(8)                                  leases,licenses, subleases and sublicenses of assets (including, without limitation,real property and intellectual property rights) which do not materiallyinterfere with the ordinary conduct of the business of the Company or any ofits Restricted Subsidiaries;

 

(9)                                  judgmentLiens not giving rise to an Event of Default so long as such Lien is adequatelybonded and any appropriate legal proceedings which may have been dulyinitiated for the review of such judgment have not been finally terminated orthe period within which such proceedings may be initiated has not expired;

 

(10)                            Liens forthe purpose of securing Indebtedness Incurred pursuant to clauses (7), (8) and(9) of the second paragraph of Section 3.2; *provided* that;

 

(a)                                  theaggregate principal amount of Indebtedness secured by such Liens is otherwisepermitted to be Incurred under this Indenture and does not exceed the cost ofthe assets or property so acquired or constructed; and

 

(b)                                 such Liensare created within 180 days of construction or acquisition of such assets orproperty and do not encumber any other assets or property of the Company or anyRestricted Subsidiary other than (i) such assets or property and assetsaffixed or appurtenant thereto and (ii) the Capital Stock of the obligorof the Project Finance Indebtedness; *provided* thatsuch obligor does not own any assets other than the assets financed by suchProject Finance Indebtedness;

 

(11)                            Liensarising solely by virtue of any statutory or common law provisions relating tobanker’s Liens, rights of set-off or similar rights and remedies as to depositaccounts or other funds maintained with a depositary institution; 

 

(12)                            Liensarising from Uniform Commercial Code financing statement filings filed ona precautionary basis in respect of operating leases entered into by theCompany and its Restricted Subsidiaries that do not constitute Indebtedness;

 

(13)                            Liensexisting on the Issue Date or the Emergence Date as set forth on Schedule 3.6to this Indenture on the Issue Date (other than Liens Incurred pursuant toclause (1));

 

(14)                            Liens onproperty or shares of stock of a Person at the time such Person becomes aRestricted Subsidiary; *provided*, *however*, that such Liens are not created, Incurred orassumed in connection with, or in contemplation of, such other Person becominga Restricted Subsidiary; *provided**further*, *however*, thatany such Lien may not extend to any other property owned by the Company orany Restricted Subsidiary;

 

(15)                            Liens onproperty at the time the Company or a Restricted Subsidiary acquired theproperty, including any acquisition by means of a merger or consolidation withor into the Company or any Restricted Subsidiary; *provided*,*however*, that such

 

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Liens are not created, Incurred or assumed in connection with, or incontemplation of, such acquisition; *provided further*,*however*, that such Liens may notextend to any other property owned by the Company or any Restricted Subsidiary;

 

(16)                            Lienssecuring Indebtedness or other obligations of a Restricted Subsidiary owing tothe Company or another Restricted Subsidiary;

 

(17)                            Lienssecuring the Securities and Subsidiary Guarantees; 

 

(18)                            Lienssecuring Refinancing Indebtedness Incurred to refinance, refund, replace,amend, extend or modify, as a whole or in part, Indebtedness that waspreviously so secured pursuant to clauses (10), (13), (14), (15) and (17), *provided* that (x) any such Lien is limited to all or part ofthe same property or assets (plus improvements, accessions, proceeds ordividends or distributions in respect thereof) that secured (or, under thewritten arrangements under which the original Lien arose, could secure) theIndebtedness being refinanced or is in respect of property that is the securityfor a Permitted Lien hereunder; and (y) the Indebtedness secured by such Lienat such time is not increased to any amount greater than the sum of (A) theoutstanding principal amount or, if greater, committed amount of theIndebtedness described under clauses (10), (13), (14), (15) and (17) at thetime the original Lien became a Permitted Lien hereunder, and (B) anamount necessary to pay any fees and expenses, including premiums, related tosuch refinancing, refunding, replacement, amendment, extension, ormodification;

 

(19)                            any interestor title of a lessor under any Capitalized Lease Obligation or operating lease;

 

(20)                            Liens underindustrial revenue, municipal or similar bonds; 

 

(21)                            Lienssecuring Indebtedness (other than Subordinated Obligations and GuarantorSubordinated Obligations) in an aggregate principal amount outstanding at anyone time not to exceed $250.0 million;

 

(22)                            Lienssecuring obligations with respect to contracts (other than for Indebtedness)for commercial and trading activities for the purchase, distribution, sale,lease or hedge of any energy-related commodity or service including contractsand derivative financial instruments entered into with respect to electricenergy or capacity, emissions allowances, fuel and other commodities); 

 

(23)                            PermittedCounterparty Liens; and

 

(24)                            Lienssecuring obligations under the Escrow Agreement.

 

“Person” means any individual, corporation,partnership, joint venture, association, joint-stock company, trust,unincorporated organization, limited liability company, government or anyagency or political subdivision hereof or any other entity.

 

“Plan of Reorganization” means the Amended andRestated Second Amended Joint Chapter 11 Plan of Reorganization for MirantCorporation and its Affiliated Debtors, dated as of

 

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December 9, 2005, Case No. 03-46590filed in the United States Bankruptcy Court for the Northern District of Texas,Fort Worth Division, as amended, supplemented or otherwise modified.

 

“Preferred Stock” as applied to the CapitalStock of any corporation, means Capital Stock of any class or classes(however designated) which is preferred as to the payment of dividends, or asto the distribution of assets upon any voluntary or involuntary liquidation ordissolution of such corporation, over shares of Capital Stock of any other class ofsuch corporation.

 

 “PPA” means:

 

(1)                            anarms-length, executed, valid and binding agreement (including, withoutlimitation, a tolling agreement) that is then in full force and effect and notin default in any material respect and which is not terminable without causebetween the Company or any Restricted Subsidiary and either:

 

(a)                                   a thirdparty purchaser whose long-term senior unsecured debt is rated no less thanBaa3 by Moody’s Investors Service, Inc. and BBB- by Standard & Poor’sRatings Group, Inc. on the date the relevant transaction is entered intoby the Company or such Restricted Subsidiary; or

 

(b)                                  an Affiliateof the Company, so long as such Affiliate has executed a valid and bindingagreement with a third party purchaser whose long-term senior unsecured debt israted no less than Baa3 by Moody’s Investors Service, Inc. and BBB- byStandard & Poor’s Ratings Group, Inc. on the date the relevanttransaction is entered into by the Company or such Restricted Subsidiary with substantiallythe same terms (other than any pricing spread) as the Affiliate’s agreementwith the Company or such Restricted Subsidiary;

 

in each case, for the sale of electric energy orcapacity (in the case of both energy and capacity, on a take or pay, take andpay, or take, if tendered basis) at prices established at a formula, index orother price risk management methodology not based on spot market prices by theCompany or such Subsidiary to the third party or Affiliate; or

 

(2)                                financialhedge agreements relating to energy or capacity pricing that are:

 

(a)                                   fullysupported by available energy or capacity of the Company and its RestrictedSubsidiaries; and 

 

(b)                                  withcounterparties having long-term senior unsecured debt that is rated no lessthan Baa2 by Moody’s Investors Service, Inc. and BBB by Standard &Poor’s Ratings Group, Inc.

 

“Project Finance Indebtedness” meansIndebtedness (not exceeding the cost of the design, development, acquisition,construction or creation of the relevant asset or project) of any RestrictedSubsidiary incurred or existing in connection with the financing or refinancingof any asset or project, the repayment of which Indebtedness is to be made fromthe revenues arising out of, or other proceeds or realization from, the acquiredor created asset or project, with recourse to those revenues and proceeds andassets forming the subject matter of such asset or

 

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project (including, without limitation,insurance, contracts and shares or other rights of ownership in the entity(ies)which own the relevant assets or project) and other assets ancillary theretobut without recourse to any other asset or otherwise to the Company or aRestricted Subsidiary; *provided*that recourse shall not be deemed to exist by reason of normal and customarysponsor support arrangements, including the pledge of the Capital Stock of suchperson. 

 

“QIB” means any “qualified institutional buyer”as such term is defined in Rule 144A.

 

“Qualified Property” means assets that are usedor useful in, or Capital Stock of any Person engaged in, a Permitted Business; *provided* that the fair market value of anysuch assets or Capital Stock shall be determined in good faith by the Board ofDirectors of the Company.

 

“Rating Agency” means Standard & Poor’sRatings Group, Inc. and Moody’s Investors Service, Inc. or ifStandard & Poor’s Ratings Group, Inc. or Moody’s InvestorsService, Inc. or both shall not make a rating on the Securities publicly available, a nationally recognizedstatistical rating agency or agencies, as the case may be, selected by theCompany (as certified by a resolution of the Board of Directors) which shall besubstituted for Standard & Poor’s Ratings Group, Inc. or Moody’sInvestors Service, Inc. or both, as the case may be.

 

“Redemption Date” means, with respect to anyredemption of Securities, the date of redemption with respect thereto.

 

 “Refinancing Indebtedness” means Indebtednessthat is Incurred to refund, refinance, replace, exchange, renew, repay orextend (including pursuant to any defeasance or discharge mechanism)(collectively, “refinance,” “refinances,” and “refinanced” shall have acorrelative meaning) any Indebtedness existing on the date of this Indenture orIncurred in compliance with this Indenture (including Indebtedness of theCompany that refinances Indebtedness of any Restricted Subsidiary andIndebtedness of any Restricted Subsidiary that refinances Indebtedness ofanother Restricted Subsidiary) including Indebtedness that refinancesRefinancing Indebtedness, *provided, however,*that:

 

(1)                                if theStated Maturity of the Indebtedness being refinanced is earlier than the StatedMaturity of the Securities, the Refinancing Indebtedness has a Stated Maturityno earlier than the Stated Maturity of the Indebtedness being refinanced or (b) ifthe Stated Maturity of the Indebtedness being refinanced is later than theStated Maturity of the Securities, the Refinancing Indebtedness has a StatedMaturity at least 91 days later than the Stated Maturity of the Securities; 

 

(2)                                theRefinancing Indebtedness has an Average Life at the time such RefinancingIndebtedness is Incurred that is equal to or greater than the Average Life ofthe Indebtedness being refinanced;

 

(3)                                suchRefinancing Indebtedness is Incurred in an aggregate principal amount (or ifissued with original issue discount, an aggregate issue price) that is equal toor less than the sum of the aggregate principal amount (or if issued withoriginal issue discount, the aggregate accreted value) then outstanding of theIndebtedness being refinanced (plus, without duplication, any additionalIndebtedness Incurred to pay interest or premiums and fees Incurred inconnection therewith); 

 

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(4)                                if theIndebtedness being refinanced is subordinated in right of payment to theSecurities or the Subsidiary Guarantee, such Refinancing Indebtedness issubordinated in right of payment to the Securities or the Subsidiary Guaranteeon terms at least as favorable to the holders as those contained in thedocumentation governing the Indebtedness being extended, refinanced, renewed,replaced, defeased or refunded; and 

 

(5)                                RefinancingIndebtedness shall not include (x) Indebtedness of a Restricted Subsidiary(other than a Subsidiary Guarantor) that refinances Indebtedness of one of theIssuers, (y) Indebtedness of a Non-Guarantor Restricted Subsidiary thatrefinances Indebtedness of a Subsidiary Guarantor, or (z) Indebtedness eitherof one of the Issuers or a Restricted Subsidiary that refinances Indebtednessof an Unrestricted Subsidiary.

 

“Registration Rights Agreement” means thatcertain registration rights agreement dated as of the date of this Indenture byand among the Company, the Subsidiary Guarantors and the initial purchasers setforth therein and, with respect to any Additional Securities, one or more substantially similar registrationrights agreements among the Company and the other parties thereto, as suchagreements may be amended from time to time.

 

“Regulation S” means Regulation S under theSecurities Act.

 

“Restoration Certification” means an Officers’Certificate provided to the Trustee prior to the end of 365 days from the datethat a Casualty Event has occurred certifying (a) that the Company or therelevant Restricted Subsidiary intends to use the proceeds received inconnection with such Casualty Event to repair, restore or replace the propertyor assets in respect of such Casualty Event, (b) the approximate costs ofcompletion of such repair, restoration or replacement and (c) that suchrepair, restoration or replacement is expected to be completed within 36 monthsfrom the date of such Casualty Event. 

 

“Restricted Investment” means any Investmentother than a Permitted Investment.

 

“Restricted Period”, with respect to anySecurities, means the period of 40 consecutive days beginning on andincluding the later of (A) the day on which the Securities are firstoffered to Persons other than distributors (as defined in Regulation S),notice of which day shall be promptly given by the Company to the Trustee, and (B) theissue date with respect to such Securities.

 

“Restricted Securities Legend” means the PrivatePlacement Legend set forth in Section 2.1(d)(A) or theRegulation S Legend set forth in Section 2.1(d)(B), asapplicable.

 

“Restricted Subsidiary” means any Subsidiary ofthe Company other than an Unrestricted Subsidiary and MNA Finance Corp.

 

“Rule 144A” means Rule 144A under theSecurities Act. 

 

“Sale/Leaseback Transaction” means an arrangementrelating to property now owned or hereafter acquired whereby the Company or aRestricted Subsidiary transfers such property to a Person and the Company or aRestricted Subsidiary leases it from such Person.

 

“SEC” means the United States Securities andExchange Commission.

 

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“Securities” has the meaning ascribed to it inthe second introductory paragraph of this Indenture.

 

“Securities Act” means the Securities Act of1933, as amended, and the rules and regulations of the SEC promulgatedthereunder.

 

“Securities Custodian” means the custodian withrespect to the Global Securities (as appointed by DTC), or any successor Personthereto and shall initially be the Trustee.

 

“Securities Register” means the register ofSecurities, maintained by the Registrar, pursuant to Section 2.3.

 

“Senior Secured Credit Agreement” means theCredit Agreement, dated as of January 3, 2006, among the Company, JPMorganChase Bank, N.A, as Administrative Agent, and the lenders parties thereto fromtime to time, as the same may be amended, restated, modified, renewed,refunded, replaced or refinanced in whole or in part from time to time(including increasing the amount loaned thereunder *provided* that such additional Indebtedness is Incurred inaccordance with Section 3.2). 

 

“Significant Subsidiary” means any RestrictedSubsidiary that would be a “Significant Subsidiary” of the Company within themeaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

 

“Special Redemption Price” shall have themeaning set forth in the Escrow Agreement.

 

“Stated Maturity” means, with respect to anysecurity, the date specified in such security as the fixed date on which thepayment of principal of such security is due and payable, including pursuant toany mandatory redemption provision, but shall not include any contingentobligations to repay, redeem or repurchase any such principal prior to the dateoriginally scheduled for the payment thereof.

 

“Subordinated Obligation” means any Indebtednessof the Company (whether outstanding on the Issue Date or thereafter Incurred)which is subordinate or junior in right of payment to amounts due under the Securities pursuant to a written agreement.

 

“Subsidiary” of any Person means (a) anycorporation, association or other business entity (other than a partnership,joint venture, limited liability company or similar entity) of which more than50% of the total ordinary voting power of shares of Capital Stock entitled(without regard to the occurrence of any contingency) to vote in the electionof directors, managers or trustees thereof (or persons performing similarfunctions) or (b) any partnership, joint venture limited liability companyor similar entity of which more than 50% of the capital accounts, distributionrights, total equity and voting interests or general or limited partnershipinterests, as applicable, is, in the case of clauses (a) and (b), at thetime owned or controlled, directly or indirectly, by (1) such Person, (2) suchPerson and one or more Subsidiaries of such Person or (3) one or moreSubsidiaries of such Person. Unless otherwise specified herein, each referenceto a Subsidiary will refer to a Subsidiary of the Company.

 

“Subsidiary Guarantee” means, individually, anyGuarantee of payment of the Securities and Exchange Securities issued in anExchange Offer by a Subsidiary Guarantor pursuant to the terms of thisIndenture and any supplemental indenture thereto (which shall be substantiallyin

 

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the form of Exhibit C), and,collectively, all such Guarantees. Each such Subsidiary Guarantee will be inthe form prescribed by this Indenture.

 

“Subsidiary Guarantor” means each RestrictedSubsidiary in existence on the Emergence Date that provides a SubsidiaryGuarantee on the Emergence Date and any other Restricted Subsidiary thatprovides a Subsidiary Guarantee in accordance with this Indenture; *provided*that upon release or discharge ofsuch Person from its Guarantee in accordance with this Indenture, such Personceases to be a Subsidiary Guarantor; *provided*,*however*, that none of MET, MIRMAnor any subsidiary of MIRMA shall be a Subsidiary Guarantor.

 

“Total Assets” means the total amount of allassets of the Company and the Restricted Subsidiaries, determined on aconsolidated basis in accordance with GAAP as shown on the most recent balancesheet of the Company.

 

“Trust Officer” shall mean, when used withrespect to the Trustee, any officer within the corporate trust department ofthe Trustee, including any vice president, assistant vice president, assistanttreasurer, trust officer or any other officer of the Trustee who customarilyperforms functions similar to those performed by the Persons who at the timeshall be such officers or to whom any corporate trust matter is referredbecause of such person’s knowledge of and familiarity with the particularsubject and who shall have direct responsibility for the administration of thisIndenture.

 

“Trustee” means the party named as such in thisIndenture until a successor replaces it and, thereafter, means the successor.

 

“Treasury Rate” means, as of the applicableredemption date, the yield to maturity as of such redemption date of UnitedStates Treasury securities with a constant maturity (as compiled and publishedin the most recent Federal Reserve Statistical Release H.15 (519) that hasbecome publicly available at least two business days prior to such redemptiondate (or, if such Statistical Release is no longer published, any publiclyavailable source of similar market data)) most nearly equal to the period fromsuch redemption date to December 31, 2009; *provided*, *however*,that if the period from such redemption date to December 31, 2009 is lessthan one year, the weekly average yield on actually traded United StatesTreasury securities adjusted to a constant maturity of one year will be used.

 

“Unrestricted Subsidiary”means:

 

(1)                                until suchtime as such entities emerge from Chapter 11, Mirant New York, Inc.,Mirant Lovett, LLC, Mirant NY-Gen, LLC, Mirant Bowline, LLC and Hudson ValleyGas Corporation; 

 

(2)                                anySubsidiary of the Company that at the time of determination shall be designatedan Unrestricted Subsidiary by the Board of Directors of the Company in themanner provided below; and

 

(3)                                anySubsidiary of an Unrestricted Subsidiary.

 

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The Board of Directors of theCompany may designate any Subsidiary of the Company (including any newlyacquired or newly formed Subsidiary or a Person becoming a Subsidiary throughmerger or consolidation or Investment therein) to be an Unrestricted Subsidiaryonly if: 

 

(1)                                suchSubsidiary or any of its Subsidiaries does not own any Capital Stock orIndebtedness of or have any Investment in, or own or hold any Lien on anyproperty of, any other Subsidiary of the Company which is not a Subsidiary ofthe Subsidiary to be so designated or otherwise an Unrestricted Subsidiary; 

 

(2)                                all theIndebtedness of such Subsidiary and its Subsidiaries shall, at the date ofdesignation, and will at all times thereafter, consist of Non-Recourse Debt;

 

(3)                                suchdesignation and the Investment of the Company in such Subsidiary complies with Section 3.3;  *provided* thaton the Emergence Date, the New York Unrestricted Subsidiaries shallautomatically be deemed Unrestricted Subsidiaries without complying with thisclause (3) so long as no further Investments in such Persons are madeafter the Issue Date other than in compliance with Section 3.3;

 

(4)                                suchSubsidiary is a Person with respect to which neither the Company nor any of itsRestricted Subsidiaries has any direct or indirect obligation: 

 

(a)                                   to subscribefor additional Capital Stock of such Person; or

 

(b)                                  to maintainor preserve such Person’s financial condition or to cause such Person toachieve any specified levels of operating results; and 

 

(5)                                on the datesuch Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary isnot a party to any agreement, contract, arrangement or understanding with theCompany or any Restricted Subsidiary with terms substantially less favorable tothe Company than those that might have been obtained from Persons who are notAffiliates of the Company.

 

Any such designation by the Board of Directorsof the Company shall be evidenced to the Trustee by filing with the Trustee aresolution of the Board of Directors of the Company giving effect to suchdesignation and an Officers’ Certificate certifying that such designationcomplies with the foregoing conditions. If, at any time, any UnrestrictedSubsidiary would fail to meet the foregoing requirements as an UnrestrictedSubsidiary, it shall thereafter cease to be an Unrestricted Subsidiary forpurposes of this Indenture and any Indebtedness of such Subsidiary shall bedeemed to be Incurred as of such date. 

 

The Board of Directors of the Company may designateany Unrestricted Subsidiary to be a Restricted Subsidiary; *provided* that immediately after giving effect tosuch designation, no Default or Event of Default shall have occurred and becontinuing or would occur as a consequence thereof and the Company could Incurat least $1.00 of additional Indebtedness under the first paragraph of Section 3.2on a pro forma basis taking into account such designation. 

 

“U.S. Government Obligations” means securitiesthat are (a) direct obligations of the United States of America for thetimely payment of which its full faith and credit is pledged or (b) obligationsof a Person controlled or supervised by and acting as an agency or instrumentalityof the United States of America the timely payment of which is unconditionallyguaranteed as a

 

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full faith and credit obligation of theUnited States of America, which, in either case, are not callable or redeemableat the option of the issuer thereof, and shall also include a depositaryreceipt issued by a bank (as defined in Section 3(a)(2) of theSecurities Act), as custodian with respect to any such U.S. GovernmentObligations or a specific payment of principal of or interest on any such U.S.Government Obligations held by such custodian for the account of the holder ofsuch depositary receipt; *provided*that (except as required by law) such custodian is not authorized to make anydeduction from the amount payable to the holder of such depositary receipt fromany amount received by the custodian in respect of the U.S. GovernmentObligations or the specific payment of principal of or interest on the U.S.Government Obligations evidenced by such depositary receipt.

 

“Voting Stock” of a Person means all classes ofCapital Stock of such Person then outstanding and normally entitled to vote inthe election of directors, managers or trustees, as applicable.

 

“Wholly-Owned Subsidiary” means a Restricted Subsidiary,all of the Capital Stock of which (other than directors’ qualifying shares) isowned by the Company or another Wholly-Owned Subsidiary.

 

SECTION 1.2.  Other Definitions.

 
| **Term**                                     | ** ** | **Defined in  Section** |
|----------------------------------------------|------------|-------------------------|
|                                         |       |                    |
| “Acceptable Commitment”            |       | 3.5(3)(b)               |
| “Additional Restricted Securities” |       | 2.1(b)                  |
| “Adjusted Net Income”              |       | 3.3(c)(i)               |
| “Affiliate Transaction”            |       | 3.8                     |
| “Agent”                            |       | 3.14                    |
| “Agent Members”                    |       | 2.1(e)(iii)             |
| “Asset Disposition Offer”          |       | 3.5                     |
| “Asset Disposition Offer Amount”   |       | 3.5                     |
| “Asset Disposition Offer Period”   |       | 3.5                     |
| “Asset Disposition Purchase Date”  |       | 3.5                     |
| “Authenticating Agent”             |       | 2.2                     |
| “Change of Control Offer”          |       | 3.11                    |
| “Change of Control Payment”        |       | 3.11                    |

 

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| **Term**                                                  | ** ** | **Defined in  Section** |
|-----------------------------------------------------------|------------|-------------------------|
|                                                      |       |                    |
| “Change of Control Payment Date”                |       | 3.11                    |
| “covenant defeasance option”                    |       | 8.1(a)                  |
| “Covenant Suspension Event”                     |       | 3.22                    |
| “cross acceleration provision”                  |       | 6.1(6)(b)               |
| “Defaulted Interest”                            |       | 2.13                    |
| “Event of Default”                              |       | 6.1                     |
| “Excess Proceeds”                               |       | 3.5                     |
| “Exchange Global Note”                          |       | 2.1(b)                  |
| “Global Securities”                             |       | 2.1(b)                  |
| “Guarantor Obligations”                         |       | 10.1                    |
| “Institutional Accredited Investor Global Note” |       | 2.1(b)                  |
| “Institutional Accredited Investor Notes”       |       | 2.1(b)                  |
| “Issuers’ Order”                           |       | 2.2                     |
| “judgment default provision”                    |       | 6.1(8)                  |
| “legal defeasance option”                       |       | 8.1(a)                  |
| “Merger”                                        |       | 2.2                     |
| “Pari Passu Notes”                              |       | 3.5                     |
| “payment default”                               |       | 6.1(6)(a)               |
| “Paying Agent”                                  |       | 2.3                     |
| “Private Placement Legend”                      |       | 2.1(d)(A)               |
| “protected purchaser”                           |       | 2.9                     |
| “Registrar”                                     |       | 2.3                     |
| “Regulation S Global Note”                 |       | 2.1(b)                  |

 

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| **Term**                                        | ** ** | **Defined in  Section** |
|-------------------------------------------------|------------|-------------------------|
|                                            |       |                    |
| “Regulation S Legend”            |       | 2.1(d)(B)               |
| “Regulation S Notes”             |       | 2.1(b)                  |
| “Resale Restriction Termination Date” |       | 2.6(a)                  |
| “Restricted Payment”                  |       | 3.3                     |
| “Restricted Securities”               |       | 2.1(a)                  |
| “Reversion Date”                      |       | 3.22                    |
| “Rule 144A Global Note”          |       | 2.1(b)                  |
| “Rule 144A Notes”                |       | 2.1(b)                  |
| “Shelf Registration Statement”        |       | Exhibit A          |
| “Special Interest Payment Date”       |       | 2.13(a)                 |
| “Special Record Date”                 |       | 2.13(a)                 |
| “Special Redemption”                  |       | 5.9                     |
| “Special Redemption Date”             |       | 5.9                     |
| “Successor Company”                   |       | 4.1                     |
| “Suspended Covenants”                 |       | 3.22                    |
| “Suspension Period”                   |       | 3.22                    |

 

SECTION 1.3.  Incorporation by Reference of TrustIndenture Act. This Indenture is subject to the mandatory provisions of theTIA, which are incorporated by reference in and made a part of thisIndenture. The following TIA terms have the following meanings:

 

“Commission” means the SEC.

 

“indenturesecurities” means the Securities.

 

“indenturesecurity holder” means a Holder.

 

“indenture tobe qualified” means this Indenture.

 

“indenturetrustee” or “institutional trustee” means the Trustee.

 

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“obligor” onthe indenture securities means the Issuers, any Subsidiary Guarantors and anyother obligor on the indenture securities.

 

All other TIAterms used in this Indenture that are defined by the TIA, defined in the TIA byreference to another statute or defined by SEC rule have the meaningsassigned to them by such definitions.

 

SECTION 1.4.  Rules of Construction. Unless thecontext otherwise requires:

 

#### (1)                  a term has themeaning assigned to it;

####  

#### (2)                  an accountingterm not otherwise defined has the meaning assigned to it in accordance withGAAP;

####  

#### (3)                  “including”means including without limitation;

####  

#### (4)                  words in thesingular include the plural and words in the plural include the singular;

####  

#### (5)                  the principalamount of any non-interest bearing or other discount security at any date shallbe the principal amount thereof that would be shown on a balance sheet of theissuer dated such date prepared in accordance with GAAP;

####  

#### (6)                  the principalamount of any Preferred Stock shall be (i) the maximum liquidation valueof such Preferred Stock or (ii) the maximum mandatory redemption ormandatory repurchase price with respect to such Preferred Stock, whichever isgreater; 

####  

#### (7)                  all amountsexpressed in this Indenture or in any of the Securities in terms of money referto the lawful currency of the United States of America; and

####  

#### (8)                  the words “herein,”“hereof” and “hereunder” and other words of similar import refer to thisIndenture as a whole and not to any particular Article, Section or othersubdivision.

 

ARTICLE II

 

# THE SECURITIES

 

SECTION 2.1.  Form, Dating and Terms.

 

(a)  The aggregate principal amount of Securities that may beauthenticated and delivered under this Indenture is unlimited. The Initial Securitiesissued on the date hereof will be in an aggregate principal amount of$850,000,000. In addition, the Issuers may issue, from time to time inaccordance with the provisions of this Indenture,****Additional Securities and Exchange Securities. Furthermore,Securities may be authenticated and delivered upon registration ortransfer, or in lieu of, other Securities pursuant to Section 2.6, 2.9,2.11, 5.8 or 9.5 or in connection with a Change

 

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of Control Offerpursuant to Section 3.11 or an Asset Disposition Offer under Section 3.5.

###  

TheInitial Securities shall be known and designated as “7.375% Senior Notes, Series A,due 2013” of the Issuers. Additional Securities issued as securities bearingone of the restrictive legends described under Section 2.1(d) (“RestrictedSecurities”) shall be known and designated as “7.375% Senior Notes, Series A,due 2013” of the Issuers. Additional Securities issued other than as RestrictedSecurities shall be known and designated as “7.375% Senior Notes, Series B,due 2013” of the Issuers, and Exchange Securities shall be known and designatedas “7.375% Senior Notes, Series B, due 2013” of the Issuers.

 

Withrespect to any Additional Securities, the Issuers shall set forth in (a) BoardResolutions of the Issuers and (b) (i) an Officers’ Certificate or (ii) oneor more indentures supplemental hereto, the following information:

 

#### (1)                the aggregateprincipal amount of such Additional Securities to be authenticated anddelivered pursuant to this Indenture which may be in an unlimitedaggregate principal amount;

####  

#### (2)                the issue priceand the issue date of such Additional Securities, including the date from whichinterest shall accrue; and

####  

#### (3)                whether suchAdditional Securities shall be Restricted Securities issued in the form ofExhibit A hereto and/or shall be issued in the form of Exhibit Bhereto.

####  

TheInitial Securities, the Additional Securities and the Exchange Securities shallbe considered collectively as a single class for all purposes of thisIndenture. Holders of the Initial Securities, the Additional Securities and theExchange Securities will vote and consent together on all matters to which suchHolders are entitled to vote or consent as one class, and none of the Holdersof the Initial Securities, the Additional Securities or the Exchange Securitiesshall have the right to vote or consent as a separate class on any matterto which such Holders are entitled to vote or consent.

 

If anyof the terms of any Additional Securities are established by action takenpursuant to Board Resolutions of the Issuers, a copies of appropriate recordsof such actions shall be certified by the Secretary or any Assistant Secretaryof the applicable Issuer and delivered to the Trustee at or prior to thedelivery of the Officers’ Certificate or the indenture supplemental heretosetting forth the terms of the Additional Securities.

 

### (b)  TheInitial Securities are being offered and sold by the Issuers pursuant to aPurchase Agreement, dated December 20, 2005, among the Issuers, theSubsidiary Guarantors and the Initial Purchasers. The Initial Securities andany Additional Securities (if issued as Restricted Securities) (the “AdditionalRestricted Securities”) will be resold initially only to (A) QIBs inreliance on Rule 144A and (B) Non-U.S. Persons in reliance onRegulation S. Such Initial Securities and Additional Restricted Securitiesmay thereafter be transferred to, among others, QIBs, purchasers inreliance on Regulation S and IAIs in accordance with Rule 501 of theSecurities Act, in each case, in accordance with the procedures describedherein.

 

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### Additional Securities offered after the datehereof may be offered and sold by the Issuers from time to time pursuantto one or more purchase agreements in accordance with applicable law.

###  

InitialSecurities and Additional Restricted Securities offered and sold to QIBs in theUnited States of America in reliance on Rule 144A (the “Rule 144ANotes”) shall be issued in the form of a permanent global Security,without interest coupons, substantially in the form of Exhibit A,which is hereby incorporated by reference and made a part of thisIndenture, including appropriate legends as set forth under Section 2.1(d) (the“Rule 144A Global Note”), deposited with the Trustee, as custodianfor DTC, duly executed by the Issuers and, upon receipt by Trustee of theIssuers’ Order, authenticated by the Trustee as hereinafter provided. The Rule 144AGlobal Note may be represented by more than one certificate, if sorequired by DTC’s rules regarding the maximum principal amount to berepresented by a single certificate. The aggregate principal amount of the Rule 144AGlobal Note may from time to time be increased or decreased by adjustmentsmade on the Rule 144A Global Note and on the records of the Trustee, ascustodian for DTC or its nominee, as hereinafter provided.

 

InitialSecurities and Additional Securities offered and sold outside the United Statesof America (the “Regulation S Notes”) in reliance onRegulation S shall be issued in the form of a permanent globalSecurity, without interest coupons, substantially in the form of Exhibit Aincluding appropriate legends as set forth under Section 2.1(d) (the“Regulation S Global Note”). The Regulation S Global Note willbe deposited upon issuance with the Trustee, as custodian for DTC, dulyexecuted by the Issuers and, upon receipt by Trustee of the Issuers’ Order,authenticated by the Trustee as hereinafter provided. During the RestrictedPeriod, interests in the Regulation S Global Note may be transferredto Non-U.S. Persons pursuant to Regulation S or to QIBs and IAIs in accordancewith this Indenture. The Regulation S Global Note may be representedby more than one certificate, if so required by DTC’s rules regarding themaximum principal amount to be represented by a single certificate. Theaggregate principal amount of the Regulation S Global Note may fromtime to time be increased or decreased by adjustments made on the Regulation SGlobal Note and on the records of the Trustee, as custodian for DTC or itsnominee, as hereinafter provided.

 

InitialSecurities and Additional Securities resold to IAIs (the “InstitutionalAccredited Investor Notes”) in the United States of America shall be issuedin the form of a permanent global Security, without interest coupons,substantially in the form of Exhibit A including appropriatelegends as set forth under Section 2.1(d) (the “InstitutionalAccredited Investor Global Note”) deposited with the Trustee, as custodianfor DTC, duly executed by the Issuers and, upon receipt by Trustee of theIssuers’ Order, authenticated by the Trustee as hereinafter provided. TheInstitutional Accredited Investor Global Note may be represented by morethan one certificate, if so required by DTC’s rules regarding the maximumprincipal amount to be represented by a single certificate. The aggregateprincipal amount of the Institutional Accredited Investor Global Note may fromtime to time be increased or decreased by adjustments made on the InstitutionalAccredited Investor Note and on the records of the Trustee, as custodian forDTC or its nominee, as hereinafter provided.

 

ExchangeSecurities exchanged for interests in the Rule 144A Notes, the Regulation SNotes and the Institutional Accredited Investor Notes will be issued in the form ofa

 

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permanentglobal Security, without interest coupons, substantially in the form of Exhibit B,which is hereby incorporated by reference and made a part of thisIndenture, deposited with the Trustee as hereinafter provided, including theappropriate legend set forth under Section 2.1(d) (the “ExchangeGlobal Note”). The Exchange Global Note will be deposited upon issuancewith, or on behalf of, the Trustee as custodian for DTC, duly executed by theIssuers and, upon receipt by Trustee of the Issuers’ Order, authenticated bythe Trustee as hereinafter provided. The Exchange Global Note may berepresented by more than one certificate, if so required by DTC’s rules regardingthe maximum principal amount to be represented by a single certificate.

 

The Rule 144AGlobal Note, the Regulation S Global Note, the Institutional AccreditedInvestor Global Note and the Exchange Global Note are sometimes collectivelyherein referred to as the “Global Securities.”

 

The principalof (and premium, if any) and interest on the Securities shall be payable at theoffice or agency of the Issuers maintained for such purpose in the Borough ofManhattan, The City of New York, State****of****New****York,or at such other office or agency of the Issuers as may be maintained forsuch purpose pursuant to Section 2.3; *provided, however,* that, at the option of the Issuers, eachinstallment of interest may be paid by (i) check mailed to addressesof the Persons entitled thereto as such addresses shall appear on theSecurities Register or (ii) wire transfer to an account located in theUnited States maintained by the payee. Payments in respect of Securities representedby a Global Security (including principal, premium, if any, and interest) willbe made by wire transfer of immediately available funds to the accountsspecified by DTC. Payments in respect of Securities represented by DefinitiveSecurities (including principal, premium, if any, and interest) held by aHolder of at least $1,000,000 aggregate principal amount of Securitiesrepresented by Definitive Securities will be made by wire transfer to a U.S.dollar account maintained by the payee with a bank in the United States if suchHolder elects payment by wire transfer by giving written notice to the Trusteeor the Paying Agent to such effect designating such account no later than15 days immediately preceding the relevant due date for payment (or suchother date as the Trustee may accept in its discretion).

 

The Securitiesmay have notations, legends or endorsements required by law, stockexchange rule or usage, in addition to those set forth on Exhibit Aand Exhibit B and under Section 2.1(d). The Issuers andthe Trustee shall approve the forms of the Securities and any notation,endorsement or legend on them. Each Security shall be dated the date of itsauthentication. The terms of the Securities set forth in Exhibit Aand Exhibit B are part of the terms of this Indenture and, tothe extent applicable, the Issuers and the Trustee by their execution anddelivery of this Indenture, expressly agree to be bound by such terms.

 

### (c)  Denominations.The Securities shall be issuable only in fully registered form, withoutinterest coupons, and only in denominations of $1,000 and integral multiples inexcess thereof.

###  

### (d)  RestrictiveLegends. Unless and until (i) an Initial Security is sold under aneffective registration statement or (ii) an Initial Security is exchangedfor an Exchange Security in connection with an effective registrationstatement, in each case pursuant to the Registration Rights Agreement or asimilar agreement,

 

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###### (A)  the Rule 144AGlobal Note and the Institutional Accredited Investor Global Note shall bearthe following legend (the “Private Placement Legend”) on the facethereof:

######  

THIS SECURITYHAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIESACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THISSECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THEABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOTSUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCEHEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FORWHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCHSECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT ISTWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATEON WHICH ANY OF THE ISSUERS OR ANY AFFILIATE OF ANY OF THE ISSUERS WAS THEOWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TOANY OF THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEENDECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THESECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THESECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIEDINSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THATPURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONALBUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,(D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATESWITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TOAN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1),(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONALACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THEACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUMPRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOTWITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION INVIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLEEXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TOTHE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFERPURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OFAN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TOEACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTERTHE RESALE RESTRICTION TERMINATION DATE.

 

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###### (B)  theRegulation S Global Note shall bear the following legend (the “Regulation SLegend”) on the face thereof:

######  

THIS SECURITYHAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIESACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THISSECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THEABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOTSUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCEHEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FORWHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCHSECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LASTDATE ON WHICH ANY OF THE ISSUERS OR ANY AFFILIATE OF ANY OF THE ISSUERS WAS THEOWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TOANY OF THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEENDECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THESECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THESECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIEDINSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THATPURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONALBUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,(D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATESWITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TOAN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1),(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONALACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THEACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUMPRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOTWITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION INVIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLEEXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TOTHE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFERPURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OFAN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TOEACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTERTHE RESALE RESTRICTION TERMINATION DATE. BY ITS ACQUISITION HEREOF, THE HOLDERHEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THEACCOUNT OF A U.S. PERSON AND IS ACQUIRING

 

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THIS SECURITYIN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THESECURITIES ACT.

 

###### (C)  EachGlobal Security, whether or not an Initial Security, shall bear the followinglegend on the face thereof:

######  

UNLESS THISCERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORYTRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THEISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANYCERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCHOTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANYPAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTEDBY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USEHEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THEREGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OFTHIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE,AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERSMADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TOON THE REVERSE HEREOF.

 

### (e)  Book-EntryProvisions.

###  

(i)  This Section 2.1(e) shall apply only toGlobal Securities deposited with the Trustee, as custodian for DTC.

 

(ii)  Each Global Security initially shall (x) be registeredin the name of DTC or the nominee of DTC, (y) be delivered to the Trusteeas custodian for DTC and (z) bear legends as set forth under Section 2.1(d).

 

(iii)  Members of, or participants in, DTC (“Agent Members”)shall have no rights under this Indenture with respect to any Global Securityheld on their behalf by DTC or by the Trustee as the custodian of DTC or undersuch Global Security, and DTC may be treated by the Issuers, the Trusteeand any agent of the Issuers or the Trustee as the absolute owner of suchGlobal Security for all purposes whatsoever. Notwithstanding the foregoing,nothing herein shall prevent the Issuers, the Trustee or any agent of theIssuers or the Trustee from giving effect to any written certification, proxyor other authorization furnished by DTC or impair, as between DTC and its AgentMembers, the operation of customary practices of DTC governing the exercise ofthe rights of a Holder of a beneficial interest in any Global Security.

 

(iv)  In connection with any transfer of a portion of thebeneficial interest in a Global Security pursuant to subsection (f) ofthis Section 2.1 to beneficial owners who are required to holdDefinitive Securities, the Securities Custodian shall reflect on its books and

 

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records thedate and a decrease in the principal amount of such Global Security in anamount equal to the principal amount of the beneficial interest in the GlobalSecurity to be transferred, and the Issuers shall execute, and the Trusteeshall, upon receipt by Trustee of the Issuers’ Order, authenticate and makeavailable for delivery, one or more Definitive Securities of like tenor andamount.

 

(v)  In connection with the transfer of an entire Global Securityto beneficial owners pursuant to subsection (f) of this Section 2.1,such Global Security shall be deemed to be surrendered to the Trustee forcancellation, and the Issuers shall execute, and the Trustee shall, uponreceipt by Trustee of the Issuers’ Order, authenticate and make available fordelivery, to each beneficial owner identified by DTC in exchange for itsbeneficial interest in such Global Security, an equal aggregate principalamount of Definitive Securities of authorized denominations.

 

(vi)  The registered Holder of a Global Security may grantproxies and otherwise authorize any person, including Agent Members and personsthat may hold interests through Agent Members, to take any action which aHolder is entitled to take under this Indenture or the Securities.

 

(vii)  Any Holder of a Global Security shall, by acceptance ofsuch Global Security, agree that transfers of beneficial interests in suchGlobal Security may be effected only through a book-entry systemmaintained by (a) the Holder of such Global Security (or its agent) or (b) anyHolder of a beneficial interest in such Global Security, and that ownership ofa beneficial interest in such Global Security shall be required to be reflectedin a book entry.

 

### (f)  DefinitiveSecurities. Except as provided below, owners of beneficial interests inGlobal Securities will not be entitled to receive Definitive Securities. Ifrequired to do so pursuant to any applicable law or regulation, beneficialowners may obtain Definitive Securities in exchange for their beneficialinterests in a Global Security upon written request in accordance with DTC’sand the Registrar’s procedures. In addition, Definitive Securities shall betransferred to all beneficial owners in exchange for their beneficial interestsin a Global Security if (A) DTC notifies the Issuers at any time that itis unwilling or unable to continue as depositary for such Global Security orDTC ceases to be a clearing agency registered under the Exchange Act, at a timewhen DTC is required to be so registered in order to act as depositary, and ineach case a successor depositary is not appointed by the Issuers within90 days of such notice or (B) the Issuers in its sole discretionexecutes and delivers to the Trustee and Registrar an Officers’ Certificatestating that such Global Security shall be so exchangeable or (C) an Eventof Default has occurred and is continuing and the Registrar has received arequest from DTC. In the event of the occurrence of any of the events specifiedin clause (A), (B) or (C) of the preceding sentence, the Issuersshall promptly make available to the Trustee a reasonable supply of DefinitiveSecurities in fully registered form without interest coupons.

###  

(i)  Any Definitive Security delivered in exchange for an interestin a Global Security pursuant to Section 2.1(e)(iv) or (v) shall,except as otherwise provided by

 

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Section 2.6(c),bear the applicable legend regarding transfer restrictions applicable to theDefinitive Security set forth under Section 2.1(d).

 

(ii)  In connection with the exchange of a portion of a DefinitiveSecurity for a beneficial interest in a Global Security, the Trustee shallcancel such Definitive Security, and the Issuers shall execute, and the Trusteeshall, upon receipt by Trustee of the Issuers’ Order, authenticate and makeavailable for delivery, to the transferring Holder a new Definitive Securityrepresenting the principal amount not so transferred.

 

SECTION 2.2.  Execution and Authentication. OneOfficer of each of Escrow LLC, MNA and MNA Finance Corp. shall sign theSecurities for the Issuers by manual or facsimile signature. If an Officerwhose signature is on a Security no longer holds that office at the time theTrustee authenticates the Security, the Security shall be valid nevertheless.

 

A Securityshall not be valid until an authorized signatory of the Trustee manuallyauthenticates the Security. The signature of the Trustee on a Security shall beconclusive evidence that such Security has been duly and validly authenticatedand issued under this Indenture. A Security shall be dated the date of itsauthentication.

 

At any timeand from time to time after the execution and delivery of this Indenture, theTrustee shall authenticate and make available for delivery:  (1) Initial Securities for originalissue on the Issue Date in an aggregate principal amount of $850,000,000, (2) subjectto the terms of this Indenture, Additional Securities for original issue in anunlimited principal amount and (3) Exchange Securities for issue only inan Exchange Offer or upon resale under an effective Shelf RegistrationStatement, and only in exchange for Initial Securities or Additional Securitiesof an equal principal amount, in each case upon a written order of the Issuerssigned by one Officer of each of Escrow LLC, MNA and MNA Finance Corp. (the “Issuers’Order”). Such Issuers’ Order shall specify whether the Securities will bein the form of Definitive Securities or Global Securities, the amount ofthe Securities to be authenticated and the date on which the original issue ofSecurities is to be authenticated and whether the Securities are to be InitialSecurities, Additional Securities or Exchange Securities.

 

The Trustee may appointan agent (the “Authenticating Agent”) reasonably acceptable to theIssuers to authenticate the Securities. Any such appointment shall be evidencedby an instrument signed by a Trust Officer, a copy of which shall be furnishedto the Issuers. Unless limited by the terms of such appointment, any suchAuthenticating Agent may authenticate Securities whenever the Trustee may doso. Each reference in this Indenture to authentication by the Trustee includesauthentication by the Authenticating Agent. An Authenticating Agent has thesame rights as any Registrar, Paying Agent or agent for service of notices anddemands.

 

In case theCompany, pursuant to Article IV, shall be consolidated or mergedwith or into any other Person (which, for the avoidance of doubt, shall notinclude the merger of Mirant North America Escrow, LLC with and into MirantNorth America, LLC (the “Merger”)) or shall convey, transfer, lease orotherwise dispose of its properties and assets substantially as an entirety toany Person, and the successor Person resulting from such consolidation, orsurviving such merger, or into which the Company shall have been merged, or thePerson which

 

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shall havereceived a conveyance, transfer, lease or other disposition as aforesaid, shallhave executed an indenture supplemental hereto with the Trustee pursuant to Article IV,any of the Securities authenticated or delivered prior to such consolidation,merger, conveyance, transfer, lease or other disposition may, from time totime, at the request of the successor Person, be exchanged for other Securitiesexecuted in the name of the successor Person with such changes in phraseologyand form as may be appropriate, but otherwise in substance of liketenor as the Securities surrendered for such exchange and of like principalamount; and the Trustee, upon Issuers’ Order of the successor Person, shallauthenticate and make available for delivery Securities as specified in suchorder for the purpose of such exchange. If Securities shall at any time beauthenticated and delivered in any new name of a successor Person pursuant tothis Section 2.2 in exchange or substitution for or uponregistration of transfer of any Securities, such successor Person, at theoption of the Holders but without expense to them, shall provide for theexchange of all Securities at the time outstanding for Securities authenticatedand delivered in such new name.

 

SECTION 2.3.  Registrar and Paying Agent. The Issuersshall maintain an office or agency where Securities may be presented forregistration of transfer or for exchange (the “Registrar”) and an officeor agency where Securities may be presented for payment (the “PayingAgent”). The Issuers shall cause each of the Registrar and the Paying Agentto maintain an office or agency in New York, New York. The Registrar shall keepa register of the Securities and of their transfer and exchange. The Issuers may haveone or more co-registrars and one or more additional paying agents. The term “PayingAgent” includes any additional paying agent, and the term “Registrar” includesany co-registrar.

 

The Issuersshall enter into an appropriate agency agreement with any Registrar or PayingAgent not a party to this Indenture, which shall incorporate the terms of theTIA. The agreement shall implement the provisions of this Indenture that relateto such agent. The Issuers shall notify the Trustee of the name and address ofeach such agent. If the Issuers fail to maintain a Registrar or Paying Agent,the Trustee shall act as such and shall be entitled to appropriate compensationtherefor pursuant to Section 7.7. Any of the Company’s RestrictedSubsidiaries organized in the United States may act as Paying Agent,Registrar or transfer agent.

 

The Issuersinitially appoint Deutsche Bank Trust Company Americas as Registrar and PayingAgent for the Securities. The Issuers may remove any Registrar or PayingAgent without notice to any Holder upon written notice to such Registrar orPaying Agent and to the Trustee; *provided,however,* that no such removal shall become effective until (i) acceptanceof any appointment by a successor as evidenced by an appropriate agreemententered into by the Issuers and such successor Registrar or Paying Agent, asthe case may be, and delivered to the Trustee or (ii) writtennotification to the Trustee that the Trustee shall serve as Registrar or PayingAgent until the appointment of a successor in accordance with clause (i) above.The Registrar or Paying Agent may resign at any time upon written noticeto the Issuers and the Trustee.

 

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SECTION 2.4.  Paying Agent to Hold Money in Trust. Byno later than 10:00 a.m. (New York City time) on the date on which anyprincipal of, premium, if any, or interest on any Security is due and payable,the Issuers shall deposit with the Paying Agent a sum sufficient in immediatelyavailable funds to pay such principal, premium, if any, or interest when due. TheIssuers shall require each Paying Agent (other than the Trustee) to agree inwriting that such Paying Agent shall hold in trust for the benefit of theHolders or the Trustee all money held by such Paying Agent for the payment ofprincipal, premium, if any, of or interest on the Securities (whether suchassets have been distributed to it by the Issuers or other obligors on theSecurities) and shall notify the Trustee in writing of any default by theIssuers or any Subsidiary Guarantor in making any such payment. If anySubsidiary Guarantor acts as Paying Agent, it shall segregate the money held byit as Paying Agent and hold it as a separate trust fund. The Issuers at anytime may require a Paying Agent (other than the Trustee) to pay all moneyheld by it to the Trustee and to account for any funds or assets disbursed bysuch Paying Agent. Upon complying with this Section 2.4, the PayingAgent (if other than a Subsidiary Guarantor) shall have no further liabilityfor the money delivered to the Trustee. Upon any bankruptcy, reorganization orsimilar proceeding with respect to the Issuers, the Trustee shall serve asPaying Agent for the Securities.

 

SECTION 2.5.  Holder Lists. The Registrar or theTrustee (if the Trustee is also acting as the Registrar) shall preserve in ascurrent a form as is reasonably practicable the most recent list availableto it of the names and addresses of Holders and shall otherwise comply with TIA§ 312(a). If the Trustee is not the Registrar, or to the extent otherwiserequired under the TIA, the Issuers, on their own behalf and on behalf of eachof the Subsidiary Guarantors, if any, shall furnish or cause the Registrar tofurnish to the Trustee, in writing at least five Business Days before eachinterest payment date and at such other times as the Trustee may requestin writing, a list in such form and as of such date as the Trustee may reasonablyrequire of the names and addresses of the Holders, and the Issuers and theSubsidiary Guarantors shall otherwise comply with TIA § 312(a).

 

SECTION 2.6.  Transfer and Exchange.

 

### (a)  Thefollowing provisions shall apply with respect to any proposed transfer of a Rule 144ANote or an Institutional Accredited Investor Note prior to the date which istwo years after the later of the date of its original issue and the last dateon which any of the Issuers or any Affiliate of any of the Issuers was theowner of such Securities (or any predecessor thereto) (the “ResaleRestriction Termination Date”):

###  

(i)  atransfer of a Rule 144A Note or an Institutional Accredited Investor Noteor a beneficial interest therein to a QIB shall be made upon the representationof the transferee, in the form of assignment as set forth on the reverseof the Security, that it is purchasing the Security for its own account or anaccount with respect to which it exercises sole investment discretion and thatit and any such account is a “qualified institutional buyer” within the meaningof Rule 144A, and is aware that the sale to it is being made in relianceon Rule 144A and acknowledges that it has received such informationregarding the Issuers as the undersigned has requested pursuant to Rule 144Aor has determined not to request such information and that it is aware that the

 

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transferor is relying upon its foregoingrepresentations in order to claim the exemption from registration provided by Rule 144A;

 

(ii)  atransfer of a Rule 144A Note or an Institutional Accredited Investor Noteor a beneficial interest therein to an IAI shall be made upon receipt by theTrustee or its agent of a certificate substantially in the form set forthunder Section 2.7 from the proposed transferee and, if requested bythe Issuers or the Trustee, the receipt by the Trustee or its agent of anopinion of counsel, certification and/or other information satisfactory to eachof them; and

 

(iii)  atransfer of a Rule 144A Note or an Institutional Accredited Investor Noteor a beneficial interest therein to a Non-U.S. Person shall be made uponreceipt by the Trustee or its agent of a certificate substantially in the form set forth under Section 2.8from the proposed transferor and, if requested by the Issuers or the Trustee,the delivery of an opinion of counsel, certification and/or other informationsatisfactory to each of them.

 

After the Resale Restriction TerminationDate, interests in a Rule 144A Note or an Institutional AccreditedInvestor Note may be transferred in accordance with applicable law withoutrequiring the certifications set forth under Section 2.7 or 2.8or any additional certification.

 

### (b)  Thefollowing provisions shall apply with respect to any proposed transfer of aRegulation S Note prior to the expiration of the Restricted Period:

###  

(i)  atransfer of a Regulation S Note or a beneficial interest therein to a QIBshall be made upon the representation of the transferee, in the form ofassignment as set forth on the reverse of the Security, that it is purchasingthe Security for its own account or an account with respect to which itexercises sole investment discretion and that it and any such account is a “qualifiedinstitutional buyer” within the meaning of Rule 144A, and is aware thatthe sale to it is being made in reliance on Rule 144A and acknowledgesthat it has received such information regarding the Issuers as the undersignedhas requested pursuant to Rule 144A or has determined not to request suchinformation and that it is aware that the transferor is relying upon itsforegoing representations in order to claim the exemption from registrationprovided by Rule 144A;

 

(ii)  atransfer of a Regulation S Note or a beneficial interest therein to an IAIshall be made upon receipt by the Trustee or its agent of a certificatesubstantially in the form set forth under Section 2.7 from theproposed transferee and, if requested by the Issuers or the Trustee, thedelivery of an opinion of counsel, certification and/or other informationsatisfactory to each of them; and

 

(iii)  atransfer of a Regulation S Note or a beneficial interest therein to aNon-U.S. Person shall be made upon receipt by the Trustee or its agent of acertificate substantially in the form set forth under Section 2.8hereof from the proposed transferor and, if requested by the Issuers or theTrustee, receipt by the Trustee or its agent of an opinion of counsel,certification and/or other information satisfactory to each of them.

 

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After theexpiration of the Restricted Period, interests in the Regulation S Note may betransferred in accordance with applicable law without requiring thecertifications set forth under Section 2.7 or 2.8 or anyadditional certification.

 

### (c)  RestrictedSecurities Legend. Upon the transfer, exchange or replacement of Securitiesnot bearing a Restricted Securities Legend, the Registrar shall deliverSecurities that do not bear a Restricted Securities Legend. Upon the transfer,exchange or replacement of Securities bearing a Restricted Securities Legend,the Registrar shall deliver only Securities that bear a Restricted SecuritiesLegend unless (i) Initial Securities are being exchanged for ExchangeSecurities in an Exchange Offer, in which case the Exchange Securities shallnot bear a Restricted Securities Legend, (ii) an Initial Security is beingtransferred pursuant to the Shelf Registration Statement or other effectiveregistration statement or (iii) there is delivered to the Registrar anOpinion of Counsel reasonably satisfactory to the Issuers and the Trustee tothe effect that neither such legend nor the related restrictions on transferare required in order to maintain compliance with the provisions of theSecurities Act. Any Additional Securities sold in a registered offering shallnot be required to bear the Restricted Securities Legend.

###  

### (d)  TheRegistrar shall retain copies of all letters, notices and other writtencommunications received pursuant to Section 2.1 or this Section 2.6.The Issuers shall have the right to inspect and make copies of all suchletters, notices or other written communications at any reasonable time uponthe giving of reasonable prior written notice to the Registrar.

###  

### (e)  Obligationswith Respect to Transfers and Exchanges of Securities.

###  

(i)  Topermit registrations of transfers and exchanges, the Issuers shall, subject tothe other terms and conditions of this Article II, execute, and theTrustee shall, upon receipt by Trustee of the Issuers’ Order, authenticate,Definitive Securities and Global Securities at the Registrar’s request.

 

(ii)  Noservice charge shall be made to a Holder for any registration of transfer orexchange, but the Issuers may require the Holder to pay a sum sufficientto cover any transfer tax, assessment or similar governmental charge payable inconnection therewith (other than any such transfer taxes, assessments orsimilar governmental charges payable upon exchange or transfer pursuant to Section 9.5).

 

(iii)  TheIssuers (and the Registrar) shall not be required to register the transfer ofor exchange of any Security for a period beginning 15 days before themailing of a notice of an offer to repurchase or redeem Securities and endingat the close of business on the day of such mailing. The Issuers (and theRegistrar) shall not be required to register the transfer of or exchange of anySecurity selected for redemption.

 

(iv)  Priorto the due presentation for registration of transfer of any Security, theIssuers, the Trustee, the Paying Agent or the Registrar may deem and treatthe person in whose name a Security is registered as the absolute owner of suchSecurity for the

 

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purpose of receiving payment of principal of,premium, if any, and interest on such Security and for all other purposeswhatsoever, including the transfer or exchange of such Security, whether or notsuch Security is overdue, and none of the Issuers, the Trustee, the PayingAgent or the Registrar shall be affected by notice to the contrary.

 

(v)  AllSecurities issued upon any transfer or exchange pursuant to the terms of thisIndenture shall evidence the same debt and shall be entitled to the samebenefits under this Indenture as the Securities surrendered upon such transferor exchange.

 

### (f)  NoObligation of the Trustee.

###  

(i)  The Trustee shall have no responsibility or obligation to anybeneficial owner of a Global Security, a member of, or a participant in, DTC orother Person with respect to the accuracy of the records of DTC or its nomineeor of any participant or member thereof, with respect to any ownership interestin the Securities or with respect to the delivery to any participant, member,beneficial owner or other Person (other than DTC) of any notice (including anynotice of redemption) or the payment of any amount or delivery of anySecurities (or other security or property) under or with respect to suchSecurities. All notices and communications to be given to the Holders and allpayments to be made to Holders in respect of the Securities shall be given ormade only to or upon the order of the registered Holders (which shall be DTC orits nominee in the case of a Global Security). The rights of beneficial ownersin any Global Security shall be exercised only through DTC subject to theapplicable rules and procedures of DTC. The Trustee may rely andshall be fully protected in relying upon information furnished by DTC withrespect to its members, participants and any beneficial owners.

 

(ii)  The Trustee shall have no obligation or duty to monitor,determine or inquire as to compliance with any restrictions on transfer imposedunder this Indenture or under applicable law with respect to any transfer ofany interest in any Security (including any transfers between or among DTCparticipants, members or beneficial owners in any Global Security) other thanto require delivery of such certificates and other documentation or evidence asare expressly required by, and to do so if and when expressly required by, theterms of this Indenture, and to examine the same to determine substantialcompliance as to form with the express requirements hereof.

 

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SECTION 2.7.  Form of Certificate to be Delivered inConnection with Transfers to IAIs.

 

[Date]

 

Law Debenture Trust Company of New York

767 Third Avenue, 31st Floor

New York, NY 10017

 

Attention:       [Corporate Trust Administration]

 

Re:                                         MirantNorth America Escrow, LLC

Mirant NorthAmerica, LLC

MNA Finance Corp.

 

7.375% Senior Notes, Series A, due 2013

 

Ladies andGentlemen:

 

This certificateis delivered to request a transfer of $                        principal amount of the 7.375% Senior Notes, Series A, due 2013 (the “Securities”)of Mirant North America Escrow, LLC, Mirant North America, LLC and MNA FinanceCorp. (together, the “Issuers”). 

 

Upon transfer,the Securities would be registered in the name of the new beneficial owner asfollows:

 
| Name:               |   |   |
|---------------------|--------|--------|
|                |
| Address:            |   |   |
|                |
| Taxpayer ID Number: |   |   |
|                     |        |        |  |  |

 

Theundersigned represents and warrants to you that:

 

1.                                       Weare an institutional “accredited investor” (as defined in Rule 501(a)(1),(2), (3) or (7) under the Securities Act of 1933, as amended (the “SecuritiesAct”)), purchasing for our own account or for the account of such aninstitutional “accredited investor” at least $250,000 principal amount of theSecurities, and we are acquiring the Securities not with a view to, or foroffer or sale in connection with, any distribution in violation of theSecurities Act. We have such knowledge and experience in financial and businessmatters as to be capable of evaluating the merits and risk of our investment inthe Securities, and we invest in or purchase securities similar to theSecurities in the normal course of our business. We and any accounts for whichwe are acting are each able to bear the economic risk of our or its investment.

 

2.                                       Weunderstand that the Securities have not been registered under the SecuritiesAct and, unless so registered, may not be sold except as permitted in thefollowing sentence. We agree on our own behalf and on behalf of any investoraccount for which we are

 

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purchasingSecurities to offer, sell or otherwise transfer such Securities prior to thedate that is two years after the later of the date of original issue and thelast date on which any of the Issuers or any affiliate of any of the Issuerswas the owner of such Securities (or any predecessor thereto) (the “ResaleRestriction Termination Date”) only (a) to any of the Issuers, (b) pursuantto a registration statement that has been declared effective under theSecurities Act, (c) in a transaction complying with the requirements of Rule 144Aunder the Securities Act, to a person we reasonably believe is a “qualifiedinstitutional buyer” under Rule 144A under the Securities Act (a “QIB”)that is purchasing for its own account or for the account of a QIB and to whomnotice is given that the transfer is being made in reliance on Rule 144A, (d) pursuantto offers and sales that occur outside the United States within the meaning ofRegulation S under the Securities Act, (e) to an institutional “accreditedinvestor” within the meaning of Rule 501(a)(1), (2), (3) or (7) underthe Securities Act that is purchasing for its own account or for the account ofsuch an institutional “accredited investor,” in each case in a minimumprincipal amount of Securities of $250,000, for investment purposes and notwith a view to or for offer or sale in connection with any distribution inviolation of the Securities Act or (f) pursuant to any other availableexemption from the registration requirements of the Securities Act, subject ineach of the foregoing cases to any requirement of law that the disposition ofour property or the property of such investor account or accounts be at all timeswithin our or their control and in compliance with any applicable statesecurities laws. The foregoing restrictions on resale will not apply subsequentto the Resale Restriction Termination Date. If any resale or other transfer ofthe Securities is proposed to be made pursuant to clause (e) aboveprior to the Resale Restriction Termination Date, the transferor shall delivera letter from the transferee substantially in the form of this letter tothe Issuers and Law Debenture Trust Company of New York, as Trustee (the “Trustee”),which shall provide, among other things, that the transferee is aninstitutional “accredited investor” (within the meaning of Rule 501(a)(1),(2), (3) or (7) under the Securities Act) and that it is acquiringsuch Securities for investment purposes and not for distribution in violationof the Securities Act. Each purchaser acknowledges that the Issuers and theTrustee reserve the right prior to any offer, sale or other transfer prior tothe Resale Termination Date of the Securities pursuant to clause (d), (e) or(f) above to require the delivery of an opinion of counsel, certificationsand/or other information satisfactory to the Issuers and the Trustee.

 

The Trusteeand the Issuers are entitled to rely upon this letter and are irrevocablyauthorized to produce this letter or a copy hereof to any interested party inany administrative or legal proceedings or official inquiry with respect to thematters covered hereby.

 
|   | TRANSFEREE: |   |   |
|--------|-------------|--------|--------|
|   |        |
|   | BY:         |   |   |
|        |             |        |        |  |

 

cc:                                 MirantNorth America Escrow, LLC

Mirant North America, LLC

MNA Finance Corp.

 

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SECTION 2.8.  Form of Certificate to be Delivered inConnection with Transfers Pursuant to Regulation S.

 

[Date]

 

Law Debenture Trust Company of New York

767 Third Avenue, 31st Floor

New York, NY 10017

 

Attention:       [Corporate Trust Administration]

 

Re:                                         MirantNorth America Escrow, LLC

Mirant North America, LLC

MNA Finance Corp.

 

7.375% SeniorNotes, Series A, due 2013

 

Ladies andGentlemen:

 

In connectionwith our proposed sale of $                             aggregateprincipal amount of the 7.375% Senior Notes, Series A, due 2013 (the “Securities”)of of Mirant North America Escrow, LLC, Mirant North America, LLC and MNAFinance Corp. (together, the “Issuers”), we confirm that such sale hasbeen effected pursuant to and in accordance with Regulation S under theUnited States Securities Act of 1933, as amended (the “Securities Act”),and, accordingly, we represent that:

 

(a)                                  theoffer of the Securities was not made to a person in the United States;

 

(b)                                 either(i) at the time the buy order was originated, the transferee was outsidethe United States or we and any person acting on our behalf reasonably believedthat the transferee was outside the United States or (ii) the transactionwas executed in, on or through the facilities of a designated off-shoresecurities market and neither we nor any person acting on our behalf knows thatthe transaction has been pre-arranged with a buyer in the United States;

 

(c)                                  nodirected selling efforts have been made in the United States in contraventionof the requirements of Rule 903(a)(2) or Rule 904(a)(2) ofRegulation S, as applicable; and

 

(d)                                 thetransaction is not part of a plan or scheme to evade the registrationrequirements of the Securities Act.

 

In addition,if the sale is made during a restricted period and the provisions of Rule 903(b)(2) orRule 904(b)(1) of Regulation S are applicable thereto, weconfirm that such sale has been made in accordance with the applicable provisionsof Rule 903(b)(2) or Rule 904(b)(1), as the case may be.

 

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Law DebentureTrust Company of New York, as Trustee, and the Issuers are entitled to relyupon this letter and are irrevocably authorized to produce this letter or acopy hereof to any interested party in any administrative or legal proceedingsor official inquiry with respect to the matters covered hereby. Terms used inthis certificate have the meanings set forth in Regulation S.

 
| Very truly yours,    |
|----------------------|
|                 |
| [Name of Transferor] |
|                 |
| By:                  |   |   |
|                 |
|                 |   |
| Authorized Signature |   |

 

cc:                                 MirantNorth America Escrow, LLC

Mirant North America, LLC

MNA Finance Corp.

 

SECTION 2.9.  Mutilated, Destroyed, Lost or StolenSecurities. If a mutilated Security is surrendered to the Registrar or ifthe Holder of a Security claims that the Security has been lost, destroyed orwrongfully taken, the Issuers shall issue and the Trustee shall, upon receiptby Trustee of the Issuers’ Order, authenticate a replacement Security if therequirements of Section 8-405 of the Uniform Commercial Code are met,such that the Holder (a) notifies the Issuers or the Trustee within areasonable time after such Holder has notice of such loss, destruction orwrongful taking and the Registrar has not registered a transfer prior toreceiving such notification, (b) makes such request to the Issuers or theTrustee prior to the Security being acquired by a protected purchaser asdefined in Section 8-303 of the Uniform Commercial Code (a “protectedpurchaser”) and (c) satisfies any other reasonable requirements of theTrustee. If required by the Trustee or the Issuers, such Holder shall furnishan indemnity bond sufficient in the judgment of the Issuers and the Trustee toprotect the Issuers, the Trustee, the Paying Agent and the Registrar from anyloss which any of them may suffer if a Security is replaced, and, in theabsence of notice to the Issuers, any Subsidiary Guarantor or the Trustee thatsuch Security has been acquired by a bona fide purchaser, the Issuers shallexecute and, upon receipt of a Issuers’ Order, the Trustee shall authenticateand make available for delivery, in exchange for any such mutilated Security orin lieu of any such destroyed, lost or stolen Security, a new Security of liketenor and principal amount, bearing a number not contemporaneously outstanding.

 

In case anysuch mutilated, destroyed, lost or stolen Security has become or is about tobecome due and payable, the Issuers in their discretion may, instead of issuinga new Security, pay such Security.

 

Upon theissuance of any new Security under this Section, the Issuers may requirethat such Holder pay a sum sufficient to cover any tax or other governmentalcharge that may be imposed in relation thereto and any other expenses (includingthe fees and expenses of counsel and of the Trustee) in connection therewith.

 

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Every newSecurity issued pursuant to this Section in lieu of any mutilated,destroyed, lost or stolen Security shall constitute an original additionalcontractual obligation of the Issuers, any Subsidiary Guarantor (if applicable)and any other obligor upon the Securities, whether or not the mutilated,destroyed, lost or stolen Security shall be at any time enforceable by anyone,and shall be entitled to all benefits of this Indenture equally andproportionately with any and all other Securities duly issued hereunder.

 

The provisionsof this Section are exclusive and shall preclude (to the extent lawful)all other rights and remedies with respect to the replacement or payment ofmutilated, destroyed, lost or stolen Securities.

 

SECTION 2.10.  Outstanding Securities. Securitiesoutstanding at any time are all Securities authenticated by the Trustee exceptfor those cancelled by it, those delivered to it for cancellation and thosedescribed in this Section as not outstanding. A Security does not cease tobe outstanding in the event either of any of the Issuers or an Affiliate of anyof the Issuers holds the Security; *provided,however,* that (i) for purposes of determining which areoutstanding for consent or voting purposes hereunder, the provisions of Section 11.6shall apply and (ii) in determining whether the Trustee shall be protectedin making a determination whether the Holders of the requisite principal amountof outstanding Securities are present at a meeting of Holders of Securities forquorum purposes or have consented to or voted in favor of any request, demand,authorization, direction, notice, consent, waiver, amendment or modificationhereunder, or relying upon any such quorum, consent or vote, only Securitieswhich a Trust Officer of the Trustee has actual knowledge are being held by anyof the Issuers or an Affiliate of any of the Issuers shall not be consideredoutstanding. 

 

If a Securityis replaced pursuant to Section 2.9 (other than a mutilatedSecurity surrendered for replacement), it ceases to be outstanding and intereston it ceases to accrue unless the Trustee and the Issuers receive written proofsatisfactory to them that the replaced Security is held by a protectedpurchaser. A mutilated Security ceases to be outstanding upon surrender of suchSecurity and replacement pursuant to Section 2.9.

 

If the PayingAgent segregates and holds in trust, in accordance with this Indenture, on aRedemption Date or maturity date money sufficient to pay all principal,premium, if any, and accrued interest payable on that date with respect to theSecurities (or portions thereof) to be redeemed or maturing, as the case may be,and the Paying Agent is not prohibited from paying such money to the Holders onthat date pursuant to the terms of this Indenture, then on and after that datesuch Securities (or portions thereof) cease to be outstanding and interest onthem ceases to accrue.

 

SECTION 2.11.  Temporary Securities. In the event thatDefinitive Securities are to be issued under the terms of this Indenture, untilsuch Definitive Securities are ready for delivery, the Issuers may prepareand the Trustee shall, upon receipt by Trustee of the Issuers’ Order,authenticate temporary Securities. Temporary Securities shall be substantiallyin the form, and shall carry all rights, of Definitive Securities but may havevariations that the Issuers consider appropriate for temporary Securities. Withoutunreasonable delay, the Issuers shall prepare and the Trustee shall, uponreceipt by Trustee of the Issuers’ Order, authenticate Definitive Securities. Afterthe preparation of Definitive Securities, the temporary Securities

 

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shall be exchangeable for Definitive Securities upon surrender of thetemporary Securities at any office or agency maintained by the Issuers for thatpurpose and such exchange shall be without charge to the Holder. Upon surrenderfor cancellation of any one or more temporary Securities, the Issuers shallexecute, and the Trustee shall, upon receipt by Trustee of the Issuers’ Order,authenticate and make available for delivery in exchange therefor, one or moreDefinitive Securities representing an equal principal amount of Securities. Untilso exchanged, the Holder of temporary Securities shall in all respects beentitled to the same benefits under this Indenture as a Holder of DefinitiveSecurities.

 

SECTION 2.12.  Cancellation. The Issuers at any time may deliverSecurities to the Trustee for cancellation. The Registrar and the Paying Agentshall forward to the Trustee any Securities surrendered to them forregistration of transfer, exchange or payment. The Trustee and no one elseshall cancel all Securities surrendered for registration of transfer, exchange,payment or cancellation and dispose of such Securities in accordance with itsinternal policies and customary procedures and shall deliver canceled Securitiesto the Issuers pursuant to written direction by an Officer of each of EscrowLLC, MNA and MNA Finance Corp. If the Issuers or any Subsidiary Guarantoracquires any of the Securities, such acquisition shall not operate as aredemption or satisfaction of the Indebtedness represented by such Securitiesunless and until the same are surrendered to the Trustee for cancellationpursuant to this Section 2.12. The Issuers may not issue newSecurities to replace Securities they have paid or delivered to the Trustee forcancellation for any reason other than in connection with a transfer orexchange.

 

Atsuch time as all beneficial interests in a Global Security have either beenexchanged for Definitive Securities, transferred, redeemed, repurchased orcanceled, such Global Security shall be returned by DTC to the Trustee forcancellation or retained and canceled by the Trustee. At any time prior to suchcancellation, if any beneficial interest in a Global Security is exchanged forDefinitive Securities, transferred in exchange for an interest in anotherGlobal Security, redeemed, repurchased or canceled, the principal amount ofSecurities represented by such Global Security shall be reduced and anadjustment shall be made on the books and records of the Trustee (if it is thenthe Securities Custodian for such Global Security) with respect to such GlobalSecurity, by the Trustee or the Securities Custodian, to reflect suchreduction.

 

SECTION 2.13.  Payment of Interest; Defaulted Interest.Interest on any Security which is payable, and is punctually paid or dulyprovided for, on any interest payment date shall be paid to the Person in whosename such Security (or one or more predecessor Securities) is registered at theclose of business on the regular record date for such payment at the office oragency of the Issuers maintained for such purpose pursuant to Section 2.3.

 

Any intereston any Security which is payable, but is not paid when the same becomes due andpayable and such nonpayment continues for a period of 30 days shallforthwith cease to be payable to the Holder on the regular record date, andsuch defaulted interest and (to the extent lawful) interest on such defaultedinterest at the rate borne by the Securities (such defaulted interest andinterest thereon herein collectively called “Defaulted Interest”) shallbe paid by the Issuers, at their election in each case, as provided inclause (a) or (b) below:

 

### (a) The Issuers may elect to make payment of any Defaulted Interest to thePersons in whose names the Securities (or their respective predecessorSecurities) are

 

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### registered at the close of business on aSpecial Record Date (as defined below) for the payment of such DefaultedInterest, which shall be fixed in the following manner. The Issuers shallnotify the Trustee in writing of the amount of Defaulted Interest proposed tobe paid on each Security and the date (not less than 30 days after suchnotice) of the proposed payment (the “Special Interest Payment Date”),and at the same time the Issuers shall deposit with the Paying Agent (withnotice to the Trustee) an amount of money equal to the aggregate amountproposed to be paid in respect of such Defaulted Interest or shall makearrangements satisfactory to the Trustee for such deposit prior to the date ofthe proposed payment, such money when deposited to be held in trust for thebenefit of the Persons entitled to such Defaulted Interest as in this clauseprovided. Thereupon the Trustee shall fix a record date (the “Special RecordDate”) for the payment of such Defaulted Interest, which date shall be notmore than 15 days and not less than 10 days prior to the SpecialInterest Payment Date and not less than 10 days after the receipt by theTrustee of the notice of the proposed payment. The Trustee shall promptlynotify the Issuers of such Special Record Date and, in the name and at theexpense of the Issuers, shall cause notice of the proposed payment of suchDefaulted Interest and the Special Record Date and Special Interest PaymentDate therefor to be given in the manner provided for under Section 11.2not less than 10 days prior to such Special Record Date. Notice of theproposed payment of such Defaulted Interest and the Special Record Date andSpecial Interest Payment Date therefor having been so given, such DefaultedInterest shall be paid on the Special Interest Payment Date to the Persons inwhose names the Securities (or their respective predecessor Securities) areregistered at the close of business on such Special Record Date and shall nolonger be payable pursuant to the following clause (b).

###  

### (b) The Issuers may make payment of any Defaulted Interest in any other lawfulmanner not inconsistent with the requirements of any securities exchange onwhich the Securities may be listed, and upon such notice as may berequired by such exchange, if, after notice given by the Issuers to the Trusteeof the proposed payment pursuant to this clause, such manner of payment shallbe deemed practicable by the Trustee.

###  

Subject to theforegoing provisions of this Section, each Security delivered under thisIndenture upon registration of, transfer of or in exchange for or in lieu ofany other Security shall carry the rights to interest accrued and unpaid, andto accrue, which were carried by such other Security.

 

SECTION 2.14.  Computation of Interest. Interest onthe Securities shall be computed on the basis of a 360-day year comprised oftwelve 30-day months.

 

SECTION 2.15.  CUSIP, Common Code and ISIN Numbers. TheIssuers in issuing the Securities may use “CUSIP,” “Common Code” or “ISIN”numbers and, if so, the Trustee shall use “CUSIP,” “Common Code” or “ISIN”numbers in notices of redemption or purchase as a convenience to Holders; *provided, however,* that any such notice may statethat no representation is made as to the correctness of such numbers either asprinted on the Securities or as contained in any notice of a redemption orpurchase and that reliance may be placed only on the other identificationnumbers printed on the Securities, and any such redemption or purchase shallnot be affected by any defect in or omission of such CUSIP, Common Code or ISIN

 

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number. The Issuers shall promptly notify the Trustee in writing of anychange in any CUSIP, Common Code or ISIN number.

 

ARTICLE III

 

COVENANTS

 

SECTION 3.1.  Payment of Securities. The Issuersshall promptly pay the principal of, premium, if any, and interest on theSecurities on the dates and in the manner provided in the Securities and inthis Indenture. Principal, premium, if any, and interest shall be consideredpaid on the date due if on such date the Trustee or the Paying Agent holds inaccordance with this Indenture immediately available funds sufficient to payall principal, premium, if any, and interest then due and the Trustee or thePaying Agent, as the case may be, is not prohibited from paying such moneyto the Holders on that date pursuant to the terms of this Indenture.

 

The Issuersshall pay interest on overdue principal at the rate specified therefor in theSecurities, and they shall pay interest on overdue installments of interest atthe same rate to the extent lawful.

 

The Issuersand any Subsidiary Guarantors will pay any present or future stamp, court ordocumentary taxes or any other excise or property taxes, charges or similarlevies that arise in any jurisdiction from the execution, delivery, enforcementor registration of the Securities, the Subsidiary Guarantees (if any), thisIndenture or any other document or instrument in relation thereof, or thereceipt of any payments with respect to the Securities or any SubsidiaryGuarantees, excluding such taxes, charges or similar levies imposed by anyjurisdiction outside of the United States, the jurisdiction of incorporation ofany successor of any of the Issuers or any Subsidiary Guarantor or anyjurisdiction in which a Paying Agent is located, other than those resultingfrom, or required to be paid in connection with, the enforcement of the Securities,the Subsidiary Guarantees or any other such document or instrument followingthe occurrence of any Event of Default with respect to the Securities. TheIssuers or the Subsidiary Guarantors, if any, will agree to indemnify theHolders for any such taxes paid by such Holders.

 

Notwithstandinganything to the contrary contained in this Indenture, the Company or anySubsidiary Guarantor may, to the extent it is required to do so by law, deductor withhold income or other similar taxes imposed by the United States ofAmerica from principal, premium or interest payments hereunder.

 

SECTION 3.2.  Limitation on Indebtedness. The Companywill not, and will not permit any of its Restricted Subsidiaries to, Incur anyIndebtedness (including Acquired Indebtedness); *provided, however,* that the Company and the SubsidiaryGuarantors may Incur Indebtedness if on the date thereof the ConsolidatedCoverage Ratio for the Company and its Restricted Subsidiaries is at least 2.00to 1.00.

 

The first paragraph of this Section 3.2will not prohibit the Incurrence of the following Indebtedness: 

 

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(1)                                  Indebtednessof the Company and/or the Subsidiary Guarantors Incurred pursuant to a CreditFacility in an aggregate amount up to $1,500.0 million less the aggregateprincipal amount of all principal repayments with the proceeds from AssetDispositions utilized in accordance with Section 3.5(a) thatpermanently reduce the commitments thereunder and Guarantees of SubsidiaryGuarantors in respect of the Indebtedness Incurred pursuant to a CreditFacility;

 

(2)                                  Guaranteesby (x) the Company or Subsidiary Guarantors of Indebtedness Incurred by theCompany or a Subsidiary Guarantor in accordance with the provisions of thisIndenture and (y) Non-Guarantor Restricted Subsidiaries of IndebtednessIncurred by Non-Guarantor Restricted Subsidiaries in accordance with theprovisions of this Indenture; *provided* thatin the event such Indebtedness that is being Guaranteed is a SubordinatedObligation or a Guarantor Subordinated Obligation, then the related Guaranteeshall be subordinated in right of payment to the Securities or the SubsidiaryGuarantee, as the case may be;

 

(3)                                  Indebtednessof the Company owing to and held by any Restricted Subsidiary or Indebtednessof a Restricted Subsidiary owing to and held by the Company or any otherRestricted Subsidiary; *provided*, *however*,

 

(a)                                    ifthe Company is the obligor on such Indebtedness, such Indebtedness is expresslysubordinated in right of payment to the Securities; 

 

(b)                                   ifa Subsidiary Guarantor is the obligor on such Indebtedness and neither of theCompany nor a Subsidiary Guarantor is the obligee, such Indebtedness issubordinated in right of payment to the Subsidiary Guarantees of such SubsidiaryGuarantor; and

 

(c)                                    (i) anysubsequent issuance or transfer of Capital Stock or any other event whichresults in any such Indebtedness being beneficially held by a Person other thanthe Company or a Restricted Subsidiary of the Company; and

 

(ii) any sale or othertransfer of any such Indebtedness to a Person other than the Company or aRestricted Subsidiary of the Company

 

shall be deemed, in each case,to constitute an Incurrence of such Indebtedness by the Company or suchSubsidiary, as the case may be. 

 

(4)                                  Indebtednessof the Company or its Restricted Subsidiaries represented by (a) theSecurities issued on the Issue Date, the Subsidiary Guarantees and the relatedExchange Securities and exchange guarantees issued in an Exchange Offer, (b) anyIndebtedness (other than the Indebtedness described in clauses (1), (2), (3),(6), (8), (9), (10), (11), (12) and (13))

 

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outstanding on the Issue Dateor on the Emergence Date to the extent set forth on a Schedule 3.2to this Indenture on the Issue Date and (c) any Refinancing IndebtednessIncurred in respect of any Indebtedness described in this clause (4) orclause (5) or Incurred pursuant to the first paragraph of this Section 3.2;

 

(5)                                  Indebtednessof a Restricted Subsidiary Incurred and outstanding on the date on which suchRestricted Subsidiary was acquired by, or merged into, the Company or anyRestricted Subsidiary; *provided*, thatsuch Indebtedness is not Incurred in contemplation of such acquisition ormerger; *provided**further*,that at the time such Restricted Subsidiary is acquired by the Company or aRestricted Subsidiary after giving effect to the Incurrence of suchIndebtedness pursuant to this clause (5), either (x) the Consolidated CoverageRatio for the Company and its Restricted Subsidiaries will be greater than suchratio as calculated immediately prior to such Incurrence or (y) the Companywould have been able to Incur $1.00 of additional Indebtedness pursuant to thefirst paragraph of this Section 3.2;

 

(6)                                  Indebtednessunder Hedging Obligations;

 

(7)                                  theIncurrence by the Company or any of its Restricted Subsidiaries of Indebtednessrepresented by Capitalized Lease Obligations, mortgage financings or purchasemoney obligations with respect to assets other than Capital Stock or otherInvestments (other than Capital Stock of a Person being acquired for theprimary purpose of acquiring assets owned by such Person), in each caseIncurred for the purpose of financing all or any part of the purchaseprice or cost of construction or improvements of property used in the businessof the Company or such Restricted Subsidiary, and Attributable Indebtedness, inan aggregate principal amount, including all Refinancing Indebtedness Incurredto refund, defease, renew, extend, refinance or replace any IndebtednessIncurred pursuant to this clause (7), not to exceed at any time outstanding thegreater of (x) $200.0 million and (y) 5% of Total Assets;  

 

(8)                                  ProjectFinance Indebtedness;

 

(9)                                  IndebtednessIncurred to finance environmental capital expenditures and other capitalexpenditures made to comply with Law and, with respect to MIRMA and itsRestricted Subsidiaries, to finance Required Improvements (as such term is usedin the Facility Lease Documents in effect on the Emergence Date);

 

(10)                            IndebtednessIncurred in respect of workers’ compensation claims, self-insuranceobligations, performance, surety and similar bonds and completion guaranteesprovided by the Company or a Restricted Subsidiary in the ordinary course ofbusiness;

 

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(11)                            Indebtednessarising from agreements of the Company or a Restricted Subsidiary providing forindemnification, adjustment of purchase price or similar obligations, in eachcase, Incurred or assumed in connection with the disposition or acquisition ofany business, assets or Capital Stock of a Restricted Subsidiary, *provided* that the maximum aggregate liability in respect ofall such Indebtedness in respect of a disposition shall at no time exceed thegross proceeds (including the fair market value of non-cash proceeds determinedas set forth in the last paragraph of this covenant at the time such non-cashproceeds are received) actually received by the Company and its Restricted Subsidiariesin connection with such disposition; 

 

(12)                            Indebtednessarising from the honoring by a bank or other financial institution of a check,draft or similar instrument (except in the case of daylight overdrafts) drawnagainst insufficient funds in the ordinary course of business, *provided*, *however*, thatsuch Indebtedness is extinguished within five business days of Incurrence; 

 

(13)                            Indebtednessrepresented by guarantees of Indebtedness or other similar obligations to theextent such instruments are cash collateralized; *provided*that the Company or such Restricted Subsidiary would have been permitted toexpend the funds used to cash collateralize such instrument directly under theterms of this Indenture; and

 

(14)                            inaddition to the items referred to in clauses (1) through (13) above,Indebtedness of the Company and its Restricted Subsidiaries in an aggregateoutstanding principal amount which, when taken together with the principalamount of all other Indebtedness Incurred pursuant to this clause (14) and thenoutstanding, will not exceed $250.0 million at any time outstanding.

 

For purposes of determiningcompliance with, and the outstanding principal amount of any particularIndebtedness Incurred pursuant to and in compliance with, this Section 3.2:

 

(1)                                  inthe event that Indebtedness meets the criteria of more than one of the types ofIndebtedness described in the first and second paragraphs of this Section 3.2,the Company, in its sole discretion, will classify such item of Indebtedness onthe date of Incurrence****and, with theexception of clause (1) of the second paragraph, may later classifysuch item of Indebtedness in any manner that complies with this Section 3.2and only be required to include the amount and type of such Indebtedness in oneof such clauses; 

 

(2)                                  allIndebtedness outstanding on the Emergence Date under the Senior Secured CreditAgreement shall be deemed Incurred under clause (1) of the secondparagraph of this Section 3.2 and not the first paragraph or clause(4) of the second paragraph of this Section 3.2;

 

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(3)                                  theprincipal amount of any Disqualified Stock of the Company or a RestrictedSubsidiary, or Preferred Stock of a Restricted Subsidiary that is not aSubsidiary Guarantor, will be equal to the greater of the maximum mandatoryredemption or repurchase price (not including, in either case, any redemptionor repurchase premium) or the liquidation preference thereof;

 

(4)                                  Indebtednesspermitted by this Section 3.2 need not be permitted solely byreference to one provision permitting such Indebtedness but may bepermitted in part by one such provision and in part by one or moreother provisions of this Section 3.2 permitting such Indebtedness;and

 

(5)                                  theamount of Indebtedness issued at a price that is less than the principal amountthereof will be equal to the amount of the liability in respect thereofdetermined in accordance with GAAP. 

 

Accrual of interest, accrual of dividends, theaccretion of accreted value, the payment of interest in the form ofadditional Indebtedness and the payment of dividends in the form ofadditional shares of Preferred Stock or Disqualified Stock will not be deemedto be an Incurrence of Indebtedness for purposes of this Section 3.2.The amount of any Indebtedness outstanding as of any date shall be (i) theaccreted value thereof in the case of any Indebtedness issued with originalissue discount and (ii) the principal amount or liquidation preferencethereof in the case of any other Indebtedness.

 

In addition, the Company will not permit any ofits Unrestricted Subsidiaries to Incur any Indebtedness or issue any shares ofDisqualified Stock, other than Non-Recourse Debt. If at any time anUnrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness ofsuch Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as ofsuch date (and, if such Indebtedness is not permitted to be Incurred as of suchdate under this Section 3.2, the Company shall be in Default ofthis Section 3.2). 

 

In addition, the Company will not Incur, andwill not permit any Subsidiary Guarantor to Incur, any Indebtedness (includingIndebtedness under the second paragraph of this Section 3.2) thatis contractually subordinated in right of payment to any other Indebtedness ofthe Company or such Subsidiary Guarantor unless such Indebtedness is alsocontractually subordinated in right of payment to the Securities and theapplicable Subsidiary Guarantee on substantially identical terms; *provided, however*, that no Indebtednesswill be deemed to be contractually subordinated in right of payment to anyother Indebtedness of the Company solely by virtue of being unsecured or byvirtue of being secured on a first or junior Lien basis.

 

For purposes of determining compliance with anyU.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S.dollar-equivalent principal amount of Indebtedness denominated in a foreigncurrency shall be calculated based on the relevant currency exchange rate in effecton the date such Indebtedness was Incurred, in the case of term Indebtedness,or first committed, in the case of revolving credit Indebtedness; *provided* that if such Indebtedness is Incurred torefinance other Indebtedness denominated in a foreign currency, and suchrefinancing would cause the applicable U.S. dollar-dominated restriction to beexceeded if calculated at the relevant currency exchange rate in effect on thedate of such refinancing, such

 

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U.S. dollar-dominated restriction shallbe deemed not to have been exceeded so long as the principal amount of suchrefinancing Indebtedness does not exceed the principal amount of suchIndebtedness being refinanced. Notwithstanding any other provision of this Section 3.2,the maximum amount of Indebtedness that the Company may Incur pursuant tothis Section 3.2 shall not be deemed to be exceeded solely as aresult of fluctuations in the exchange rate of currencies. 

 

The principal amount of any IndebtednessIncurred to refinance other Indebtedness, if Incurred in a different currencyfrom the Indebtedness being refinanced, shall be calculated based on thecurrency exchange rate applicable to the currencies in which such RefinancingIndebtedness is denominated that is in effect on the date of such refinancing.

 

SECTION 3.3.  Limitation on Restricted Payments. TheCompany will not, and will not permit any of its Restricted Subsidiaries,directly or indirectly, to:

 

(1)                                  declareor pay any dividend or make any distribution (whether made in cash, securitiesor other property) on or in respect of its Capital Stock (including any paymentin connection with any merger or consolidation involving the Company or any ofits Restricted Subsidiaries) except:

 

(a)         dividends ordistributions payable in Capital Stock of the Company (other than DisqualifiedStock); and

 

(b)        dividends or distributionspayable to the Company or a Restricted Subsidiary (and if such RestrictedSubsidiary is not a Wholly-Owned Subsidiary, to its other holders of commonCapital Stock on a pro rata basis); 

 

(2)                               purchase,redeem, retire or otherwise acquire for value any Capital Stock of the Companyor any direct or indirect parent of the Company (including in connection withany merger or consolidation) held by Persons other than the Company or aRestricted Subsidiary (other than in exchange for Capital Stock of the Company(other than Disqualified Stock));

 

(3)                               purchase,repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduledmaturity, scheduled repayment or scheduled sinking fund payment, anySubordinated Obligations or Guarantor Subordinated Obligations (other than (x)Indebtedness of the Company owing to and held by any Restricted Subsidiary orIndebtedness of a Restricted Subsidiary owing to and held by the Company or anyother Restricted Subsidiary permitted under clause (3) of the secondparagraph of Section 3.2 or (y) the purchase, repurchase,redemption, defeasance or other acquisition or retirement of SubordinatedObligations or Guarantor Subordinated Obligations purchased in anticipation ofsatisfying a sinking fund obligation, principal installment or final maturity,in each case due within one year of the date of purchase, repurchase,redemption, defeasance or other acquisition or retirement); or

 

(4)                               makeany Restricted Investment in any Person;

 

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(any such payments or actions referred to in clauses (1) through (4) shallbe referred to herein as a “Restricted Payment”), if at the time theCompany or such Restricted Subsidiary makes such Restricted Payment: 

 

(a)                        a Defaultshall have occurred and be continuing (or would result therefrom); or

 

(b)                       the Companyis not able to Incur an additional $1.00 of Indebtedness pursuant to the firstparagraph of Section 3.2 after giving effect, on a pro forma basis,to such Restricted Payment; or

 

(c)                        theaggregate amount of such Restricted Payment and all other Restricted Paymentsdeclared or made subsequent to the Issue Date (excluding Restricted Paymentspermitted by clauses (1), (2), (3), (4), (7), (8), (9), (10), (11), (12), (13)and (14)) would exceed the sum of:

 

(i)                                     50%of the difference, if any, between (A) Consolidated Net Income less (B) interestin respect of the MAG Senior Notes to the extent funded with the proceeds ofRestricted Payments to MAG made pursuant to clause (9) of the nextsucceeding paragraph, for the period (treated as one accounting period)commencing one day after the Emergence Date to the end of the most recentfiscal quarter ending prior to the date of such Restricted Payment for whichfinancial statements are in existence (“Adjusted Net Income”) (or, in caseAdjusted Net Income is a deficit, minus 100% of such deficit); 

 

(ii)                                  100%of the aggregate Net Cash Proceeds and the fair market value (as determined ingood faith by the Board of Directors of the Company) of Qualified Propertyreceived by the Company from the issue or sale of its Capital Stock (other thanDisqualified Stock) or other capital contributions subsequent to the EmergenceDate (other than (i) Excluded Contributions, (ii) Net Cash Proceedsreceived from an issuance or sale of such Capital Stock to a Subsidiary of theCompany or an employee stock ownership plan, option plan or similar trust tothe extent such sale to an employee stock ownership plan or similar trust isfinanced by loans from or Guaranteed by the Company or any RestrictedSubsidiary unless such loans have been repaid with cash on or prior to the dateof determination and (iii) contributions to the Company and its RestrictedSubsidiaries in connection with the Plan of Reorganization) excluding in anyevent Net Cash Proceeds received by the Company from the issue and sale of itsCapital Stock or capital contributions to the extent applied to redeemSecurities in compliance with the provisions of

 

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Article V as it relates to the secondparagraph of Section 5 of the Securities;

 

(iii)                               100%of the amount by which Indebtedness of the Company or its RestrictedSubsidiaries is reduced on the Company’s balance sheet upon the conversion orexchange (other than by a Subsidiary of the Company) subsequent to theEmergence Date of any Indebtedness of the Company or its Restricted Subsidiariesconvertible or exchangeable for Capital Stock (other than Disqualified Stock)of the Company (less the amount of any cash, or the fair market value of anyother property, distributed by the Company upon such conversion or exchange);and

 

(iv)                              100%of the aggregate amount received in cash and fair market value, as determinedin good faith by the Board of Directors of the Company, of marketablesecurities or other property received after the Emergence Date by means of:

 

(A)                              thesale or other disposition (other than to the Company or a Restricted Subsidiaryor to an employee stock ownership plan, option plan or similar trustestablished by the Company or any of its Subsidiaries) of RestrictedInvestments made by the Company or its Restricted Subsidiaries and repurchasesand redemptions of such Restricted Investments from the Company or itsRestricted Subsidiaries and repayments of loans or advances which constituteRestricted Investments by the Company or its Restricted Subsidiaries, or 

 

(B)                                thesale (other than to the Company or a Restricted Subsidiary or to an employeestock ownership plan, option plan or similar trust established by the Companyor any of its Subsidiaries) of the Capital Stock of an Unrestricted Subsidiaryor a distribution from an Unrestricted Subsidiary (other than in each case tothe extent the Investment in such Unrestricted Subsidiary was made pursuant toclause (13) of the next succeeding paragraph or to the extent such Investmentconstituted a Permitted Investment) or a dividend from an UnrestrictedSubsidiary *plus*;

 

(v)                                 inthe case of the redesignation of an Unrestricted Subsidiary (other than a NewYork Unrestricted Subsidiary) as a Restricted Subsidiary, or the merger orconsolidation of an

 

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Unrestricted Subsidiary into the Company or aRestricted Subsidiary or the transfer of assets of an Unrestricted Subsidiaryto the Company or a Restricted Subsidiary, the fair market value of theInvestment in such Unrestricted Subsidiary or such transferred assets (otherthan a New York Unrestricted Subsidiary), as determined by the Board ofDirectors of the Company in good faith at the time of the redesignation of suchUnrestricted Subsidiary (other than a New York Unrestricted Subsidiary) as aRestricted Subsidiary or at the time of such merger, consolidation or transferof assets, other than an Unrestricted Subsidiary to the extent that theInvestment in such Unrestricted Subsidiary was made pursuant to clause (13) ofthe next succeeding paragraph or to the extent such Investment constituted aPermitted Investment.

 

The provisionsof the preceding paragraph will not prohibit:

 

(1)                                  anypurchase, repurchase, redemption, defeasance or other acquisition or retirementof Capital Stock, Disqualified Stock or Subordinated Obligations of the Companyor Guarantor Subordinated Obligations of any Subsidiary Guarantor made byexchange for, or out of the proceeds of the substantially concurrent sale of,Capital Stock of the Company (other than Disqualified Stock and other thanCapital Stock issued or sold to, or a capital contribution by, a Subsidiary oran employee stock ownership plan or similar trust to the extent such sale to,or contribution by, an employee stock ownership plan or similar trust is financedby loans from or Guaranteed by the Company or any Restricted Subsidiary unlesssuch loans have been repaid with cash on or prior to the date of determination)or a cash capital contribution to the Company; *provided,however,* that the Net Cash Proceeds from such sale of Capital Stockor capital contributions will be excluded from clause (c)(ii) of thepreceding paragraph; 

 

(2)                                  anypurchase, repurchase, redemption, defeasance or other acquisition or retirementof Subordinated Obligations of the Company or Guarantor SubordinatedObligations of any Subsidiary Guarantor made by exchange for, or out of theproceeds of the substantially concurrent sale of, Subordinated Obligations ofthe Company or any purchase, repurchase, redemption, defeasance or otheracquisition or retirement of Guarantor Subordinated Obligations made byexchange for or out of the proceeds of the substantially concurrent sale ofGuarantor Subordinated Obligations that, in each case, is permitted to beIncurred pursuant to Section 3.2 and that in each case constitutesRefinancing Indebtedness;

 

(3)                                  anypurchase, repurchase, redemption, defeasance or other acquisition or retirementof Disqualified Stock of the Company or a Restricted Subsidiary made byexchange for or out of the proceeds of the

 

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substantially concurrent saleof Disqualified Stock of the Company or such Restricted Subsidiary, as the casemay be, that, in each case, is permitted to be Incurred pursuant to Section 3.2and that in each case constitutes Refinancing Indebtedness;

 

(4)                                  solong as no Default or Event of Default has occurred and is continuing, anypurchase or redemption of Subordinated Obligations or Guarantor SubordinatedObligations of a Subsidiary Guarantor from Net Available Cash to the extentpermitted under Section 3.5;

 

(5)                                  dividendspaid within 60 days after the date of declaration if at such date ofdeclaration such dividend would have complied with this provision; 

 

(6)                                  solong as no Default or Event of Default has occurred and is continuing, 

 

(a)                                (i) therepurchase, redemption or other acquisition or retirement for value of anyCapital Stock of the Company or any Parent or any Restricted Subsidiary of theCompany held by any current or former officer, director or employee (or anyestate, heir or assigns of any such person) of the Parent or of the Company orany of its Subsidiaries pursuant to any equity subscription agreement, stockoption agreement, severance agreement, shareholders’ agreement or similaragreement or employee benefit plan or (ii) the cancellation ofIndebtedness owing to the Company or any of its Restricted Subsidiaries fromany current or former officer, director or employee (or any estate, heir orassigns of any such person) of the Parent or of the Company or any of itsSubsidiaries in connection with a repurchase of Capital Stock of the Company orany Parent or any Restricted Subsidiary of the Company; *provided*that the aggregate price paid for the actions in clause (i) may notexceed $1.0 million in any twelve-month period and $5.0 million in theaggregate since the Issue Date; *provided*, *further* that (A) such amount in any calendar year may beincreased by the cash proceeds of “key man” life insurance policies receivedby, or contributed to, the Company and its Restricted Subsidiaries after theIssue Date less any amount previously applied to the making of RestrictedPayments pursuant to this clause (A) and (B) cancellation ofIndebtedness owing to the Company or any of its Restricted Subsidiaries fromemployees, officers, directors and consultants (or any estate, heir or assignsof any such person) of any Parent or the Company or any of its Subsidiaries inconnection with a repurchase of Capital Stock of the Company or any Parent orany Restricted Subsidiary of the Company from such Persons shall be permittedunder this clause (a) as if it were a repurchase, redemption, acquisitionor retirement for value subject hereto; and

 

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(b)                               loansor advances to employees or directors of the Company or any Subsidiary of theCompany the proceeds of which are used to purchase Capital Stock of the Companyor any Parent, in an aggregate amount not in excess of $2.0 million at any onetime outstanding (loans or advances that are forgiven shall continue to bedeemed outstanding); 

 

(7)                                  solong as no Default or Event of Default has occurred and is continuing, thedeclaration and payment of dividends to holders of any class or series ofDisqualified Stock of the Company or any Restricted Subsidiary or PreferredStock of any Non-Guarantor Restricted Subsidiary issued in accordance with theterms of this Indenture to the extent such dividends are included in thedefinition of “Consolidated Interest Expense”; 

 

(8)                                  repurchasesof Capital Stock deemed to occur upon the exercise of stock options, warrantsor other convertible securities if such Capital Stock represents a portion ofthe exercise price thereof; 

 

(9)                                  (x)so long as (a) no Default or Event of Default shall have occurred and becontinuing and (b) immediately before and immediately after giving effectthereto, the Company would have been permitted to Incur at least $1.00 ofadditional Indebtedness pursuant to the first paragraph of Section 3.2,payments of cash dividends to MAG in an amount sufficient to enable MAG to makepayments of cash interest required to be made in respect of the MAG****Senior Notes in accordance with the terms thereof in effecton the Emergence Date (after giving effect to the amendment thereto made on theEmergence Date as contemplated by the Plan of Reorganization) and (y) so longas no Default or Event of Default shall have occurred and be continuing,payments of cash dividends to MAG in an amount not to exceed $150.0 million inthe aggregate to enable MAG to make payments of cash interest required to bemade in respect of the MAG Senior Notes in accordance with the terms thereof ineffect on the Emergence Date; *provided*thatin the case of clauses (x) and (y), such dividends are applied within five (5) BusinessDays of such distribution or dividend to the payment of such interest;

 

(10)                            cashdividends or loans to Parent in amounts equal to the (x) amounts required forParent to pay any Federal, state or local taxes to the extent that such taxesare directly attributable to the income, assets or operations of the Companyand its Restricted Subsidiaries and, to the extent of amounts actually receivedfrom Unrestricted Subsidiaries, in amounts required to pay such taxes to theextent attributable to the income, assets or operations of the UnrestrictedSubsidiaries and (y) amounts required under the Management Agreement toreimburse the Parent for (A) customary salary, bonus and other benefitspayable to officers and employees of the Parent to the extent such salaries,bonuses, and benefits are directly attributable to ownership of the Company andits Restricted

 

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Subsidiaries and (B) generalcorporate overhead expenses of the Parent to the extent such expenses aredirectly attributable to the ownership or operation of the Company and itsRestricted Subsidiaries;

 

(11)                            thepurchase, repurchase, redemption, defeasance or other acquisition or retirementfor value of any Subordinated Obligation (i) at a purchase price notgreater than 101% of the principal amount of such Subordinated Obligation inthe event of a Change of Control in accordance with provisions similar to Section 3.11or (ii) at a purchase price not greater than 100% of the principal amountthereof in accordance with provisions similar to Section 3.5 ; *provided**that*, prior toor simultaneously with such purchase, repurchase, redemption, defeasance orother acquisition or retirement, the Issuers have made the Change of ControlOffer or Asset Disposition Offer, as applicable, as provided in such covenantwith respect to the Securities and has completed the repurchase or redemptionof all Securities validly tendered for payment in connection with such Changeof Control Offer or Asset Disposition Offer; 

 

(12)                            Investmentsthat are made with Excluded Contributions;

 

(13)                            solong as no Default or Event of Default has occurred and is continuing,Restricted Payments in an amount not to exceed $75.0 million since the IssueDate; and

 

(14)                            the paymentof dividends and other distributions contemplated by the Plan of Reorganizationas in effect on the Issue Date in an amount not to exceed $250.0 million.

 

The amount of all Restricted Payments (otherthan cash) shall be the fair market value on the date of such RestrictedPayment of the asset(s) or securities proposed to be paid, transferred orissued by the Company or such Restricted Subsidiary, as the case may be,pursuant to such Restricted Payment. The fair market value of any cashRestricted Payment shall be its face amount. The fair market value of (i) anynon-cash Restricted Payment and (ii) Qualified Property received by theCompany from the issue or sale of its Capital Stock or capital contributionsshall be determined conclusively by the Board of Directors of the Companyacting in good faith whose resolution with respect thereto shall be deliveredto the Trustee, such determination to be based upon an opinion or appraisalissued by an accounting, appraisal or investment banking firm of nationalstanding if such fair market value is estimated in good faith by the Board ofDirectors of the Company to exceed $50.0 million. Not later than the date ofmaking any non-cash Restricted Payment or including the fair market value ofQualified Property in a calculation pursuant to clause (c)(ii) of thefirst paragraph of this Section 3.3, as the case may be, theCompany shall deliver to the Trustee an Officers’ Certificate stating that suchRestricted Payment is permitted and setting forth the basis upon which thecalculations required by this Section 3.3 were computed, togetherwith a copy of any fairness opinion or appraisal required by this Indenture.

 

SECTION 3.4.  Limitation on Restrictions on Distributionsfrom Restricted Subsidiaries. The Company will not, and will not permit anyRestricted Subsidiary to, create or 

 

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otherwisecause or permit to exist or become effective any consensual encumbrance orconsensual restriction on the ability of any Restricted Subsidiary to:

 

(1)                                  pay dividends or make any other distributionson its Capital Stock or pay any Indebtedness or other obligations owed to theCompany or any Restricted Subsidiary (it being understood that the priority ofany Preferred Stock in receiving dividends or liquidating distributions priorto dividends or liquidating distributions being paid on Common Stock shall notbe deemed a restriction on the ability to make distributions on Capital Stock);

 

(2)                                  make any loans or advances to the Company orany Restricted Subsidiary (it being understood that the subordination of loansor advances made to the Company or any Restricted Subsidiary to otherIndebtedness Incurred by the Company or any Restricted Subsidiary shall not bedeemed a restriction on the ability to make loans or advances); or 

 

(3)                                  transfer any of its property or assets to theCompany or any Restricted Subsidiary (it being understood that such transfersshall not include any type of transfer described in clause (1) or (2) above).

 

The provisions of the preceding paragraph will notprohibit:

 

(i)                                     any encumbrance or restriction pursuant tothis Indenture, the Securities, the Exchange Securities, the SubsidiaryGuarantees, the Senior Secured Credit Agreement (and related documentation) andthe leveraged leases relating to Facilities owned by MIRMA, in each case ineffect on the Issue Date or in the case of the Facility Lease Documents and theSenior Secured Credit Agreement, the Emergence Date, and other encumbrances orrestrictions in effect on the Emergence Date that are scheduled in an annex tothis Indenture on the Issue Date;

 

(ii)                                  any encumbrance or restriction with respectto a Restricted Subsidiary pursuant to an agreement of a Restricted Subsidiaryin effect on or before the date on which such Restricted Subsidiary wasacquired by the Company or a Restricted Subsidiary (other than agreements relatingto any Capital Stock or Indebtedness Incurred as consideration in, or toprovide all or any portion of the funds utilized to consummate, the transactionor series of related transactions pursuant to which such RestrictedSubsidiary became a Restricted Subsidiary or was acquired by the Company or incontemplation of the transaction) and outstanding on such date *provided,* that any such encumbrance orrestriction shall not extend to any assets or property of the Company or anyother Restricted Subsidiary other than the assets and property so acquired; 

 

(iii)                               any encumbrance or restriction with respectto a Restricted Subsidiary pursuant to an agreement effecting a refunding,replacement or refinancing of Indebtedness or other obligations Incurredpursuant to an

 

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agreement referred to in clause (i) or (ii) ofthis paragraph or this clause (iii) or contained in any amendment,restatement, modification, renewal, supplement, refunding, replacement orrefinancing of an agreement referred to in clause (i) or (ii) of thisparagraph or this clause (iii); *provided,however,*that the encumbrances and restrictions with respect to suchRestricted Subsidiary contained in any such agreement are, in the good faithjudgment of the Board of Directors of the Company, no more restrictive in anymaterial respect, taken as a whole, than the encumbrances and restrictionscontained in such agreements referred to in clauses (i) or (ii) ofthis paragraph on the Emergence Date or the date such Restricted Subsidiarybecame a Restricted Subsidiary or was merged into a Restricted Subsidiary,whichever is applicable;

 

(iv)                           in the case of clause (3) of the firstparagraph of this Section 3.4, any encumbrance or restriction: 

 

(a)                                that restricts in a customary manner thesubletting, assignment or transfer of any property or asset that is subject toa permit, lease, license or similar contract, or the assignment or transfer ofany such lease, license or other similar contract; 

 

(b)                               contained in any Permitted Lien to the extentsuch encumbrances or restrictions restrict the transfer of the property subjectto such Permitted Lien; or 

 

(c)                                pursuant to customary provisions restrictingdispositions of real property interests set forth in any reciprocal easementagreements of the Company or any Restricted Subsidiary;  

 

(v)                              (a) purchase money obligations and (b) CapitalizedLease Obligations permitted under this Indenture, in each case, that imposeencumbrances or restrictions of the nature described in clause (3) of thefirst paragraph of this covenant on the property so acquired;

 

(vi)                           any restriction with respect to a RestrictedSubsidiary (or any of its property or assets) imposed pursuant to an agreemententered into for the direct or indirect sale or disposition of the CapitalStock or assets of such Restricted Subsidiary (or the property or assets thatare subject to such restriction) pending the closing of such sale ordisposition; 

 

(vii)                        any encumbrance or restriction pursuant toprovisions limiting the disposition or distribution of assets or property injoint venture agreements and other similar agreements (in each case, relatingto joint ventures and other Persons which are not Restricted Subsidiaries),which limitation is applicable only to the assets that are the subject of suchagreements;

 

(viii)                     restrictions on cash or other depositsimposed by customers under contracts entered into in the ordinary course ofbusiness;

 

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(ix)                             net worth provisions in leases and otheragreements entered into by the Company or any Restricted Subsidiary in theordinary course of business; 

 

(x)                                encumbrances or restrictions arising orexisting by reason of applicable law or any applicable rule, regulation ororder; 

 

(xi)                             restrictions or conditions contained in anyPPA, trading, netting, operating, construction, service, supply, purchase, saleor similar agreement to which the Company or any Restricted Subsidiary of theCompany is a party entered into in the ordinary course of business; *provided* that such encumbrances orrestrictions contained in any agreement referred to in this clause (xi) willnot materially affect the Company’s ability to make anticipated principal orinterest payments on the Securities (as determined in good faith by the Boardof Directors or senior management of the Company); *provided* further that any encumbrances or restrictions withrespect to any such agreement of MIRMA shall be no more restrictive in anymaterial respect, taken as a whole, than the encumbrances and restrictions setforth in the Facility Lease Documents on the Emergence Date; and

 

(xii)                          encumbrances or restrictions contained inindentures or debt instruments or other debt arrangements Incurred or PreferredStock issued by Restricted Subsidiaries in accordance with Section 3.2,that are not more restrictive, taken as a whole, than those applicable to theCompany in either this Indenture on the Issue Date or the Senior Secured CreditAgreement on the Emergence Date (which results in encumbrances or restrictionscomparable to those applicable to the Company at a Restricted Subsidiarylevel).

 

SECTION 3.5.  Limitation on Sales of Assets andSubsidiary Stock. The Company will not, and will not permit any ofits Restricted Subsidiaries to, make any Asset Disposition *unless*:

 

(1)                                  the Company or such Restricted Subsidiary, asthe case may be, receives consideration at least equal to the fair marketvalue (such fair market value to be determined on the date of contractuallyagreeing to such Asset Disposition), as determined in good faith by the Boardof Directors (including as to the value of all non-cash consideration), of theshares and assets subject to such Asset Disposition; 

 

(2)                                  at least 75% of the consideration from such AssetDisposition received by the Company or such Restricted Subsidiary, as the case may be,is in the form of cash or Cash Equivalents; and 

 

(3)                                  an amount equal to 100% of the Net AvailableCash from such Asset Disposition is applied by the Company or such RestrictedSubsidiary, as the case may be: 

 

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(a)                                  *first*, to the extent the Company or any RestrictedSubsidiary, as the case may be, elects (or is required by the terms of anyIndebtedness), to prepay, repay or purchase Indebtedness of the Company (otherthan any Disqualified Stock or Subordinated Obligations) or Indebtedness of aRestricted Subsidiary (other than any Disqualified Stock or GuarantorSubordinated Obligations of a Subsidiary Guarantor) (in each case other thanIndebtedness owed to the Company or a Subsidiary of the Company) within 365days from the later of the date of such Asset Disposition or the receipt ofsuch Net Available Cash; *provided, however,*that, in connection with any prepayment, repayment or purchase of Indebtednesspursuant to this clause (a), the Company or such Restricted Subsidiary willretire such Indebtedness and will cause the related commitment (if any) to bepermanently reduced in an amount equal to the principal amount so prepaid,repaid or purchased; and 

 

(b)                                 *second*, to the extent of the balance of such NetAvailable Cash after application in accordance with clause (a), to the extentthe Company or such Restricted Subsidiary elects, within 365 days from thelater of the date of such Asset Disposition or the receipt of such NetAvailable Cash, to (i) invest in Additional Assets, (ii) enter into abinding commitment to invest in Additional Assets and reinvest within 24 monthsfrom the later of the date of such Asset Disposition or the receipt of such NetAvailable Cash (an “Acceptable Commitment”), or (iii) in the caseof a Casualty Event, either enter into an Acceptable Commitment or deliver tothe Trustee a Restoration Certification with respect to plans to invest (and reinvestwithin 36 months from the date of such Casualty Event);

 

*provided* that pending the final application of anysuch Net Available Cash in accordance with clause (a) or clause (b) above,the Company and its Restricted Subsidiaries may temporarily reduceIndebtedness or otherwise invest such Net Available Cash in any manner notprohibited by this Indenture.

 

Notwithstanding the preceding paragraph, in theevent that regulatory approval is necessary for an asset or investment, orconstruction, repair or restoration on any asset or investment has commenced,then the Company or any Restricted Subsidiary shall have an additional 180 daysto apply the Net Available Cash from such Asset Disposition in accordance withthe preceding paragraph. 

 

Any Acceptable Commitment that is later canceled orterminated for any reason before Net Available Cash from such Asset Dispositionor Casualty Event is so applied shall be treated as a permitted application ofsuch Net Available Cash if (x) the Company or any Restricted Subsidiary appliesthe Net Available Cash to prepay, repay or purchase Indebtedness described inclause (3)(a) above or (y) the Company or any Restricted Subsidiary entersinto another

 

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AcceptableCommitment, in each case, within the later of (a) six (6) months ofsuch cancellation or termination or (b) the initial 365-day period. 

 

Any Net Available Cash from Asset Dispositions orCasualty Events that are not applied or invested as provided and within thetime periods set forth in the preceding paragraph will be deemed to constitute “ExcessProceeds.”  If the aggregate amountof Excess Proceeds exceeds $50.0 million, the Company will be required to makean offer (“Asset Disposition Offer”) to all Holders of Securities and tothe extent required by the terms of other Pari Passu Indebtedness, to allholders of other Pari Passu Indebtedness outstanding with similar provisionsrequiring the Company to make an offer to purchase such Pari Passu Indebtednesswith the proceeds from any Asset Disposition (“Pari Passu Notes”), topurchase the maximum principal amount of Securities and any such Pari PassuNotes to which the Asset Disposition Offer applies that may be purchasedout of the Excess Proceeds, at an offer price in cash in an amount equal to100% of the principal amount of the Securities and Pari Passu Notes plusaccrued and unpaid interest to the date of purchase, in accordance with theprocedures set forth in this Indenture or the agreements governing the PariPassu Notes, as applicable, in each case in integral multiples of $1,000. Tothe extent that the aggregate amount of Securities and Pari Passu Notes sovalidly tendered and not properly withdrawn pursuant to an Asset DispositionOffer is less than the Excess Proceeds, the Company may use any remainingExcess Proceeds for general corporate purposes, subject to other covenantscontained in this Indenture. If the aggregate principal amount of Securitiessurrendered by Holders thereof and other Pari Passu Notes surrendered byholders or lenders, collectively, exceeds the amount of Excess Proceeds, theTrustee shall select the Securities and Pari Passu Notes to be purchased on apro rata basis on the basis of the aggregate principal amount of tenderedSecurities and Pari Passu Notes. Upon completion of such Asset DispositionOffer, the amount of Excess Proceeds shall be reset at zero.

 

The Asset Disposition Offer will remain open for aperiod of not more than 60 nor less than 20 Business Days following its commencement,except to the extent that a longer period is required by applicable law (the “AssetDisposition Offer Period”). No later than five Business Days after thetermination of the Asset Disposition Offer Period (the “Asset DispositionPurchase Date”), the Company will purchase the principal amount ofSecurities and Pari Passu Notes required to be purchased pursuant to this Section 3.5(the “Asset Disposition Offer Amount”) or, if less than the AssetDisposition Offer Amount has been so validly tendered, all Securities and PariPassu Notes validly tendered in response to the Asset Disposition Offer.

 

If the Asset Disposition Purchase Date is on orafter an interest record date and on or before the related interest paymentdate, any accrued and unpaid interest will be paid to the Person in whose namea Security is registered at the close of business on such record date, and noadditional interest will be payable to Holders who tender Securities pursuantto the Asset Disposition Offer.

 

On or before the Asset Disposition Purchase Date,the Company will, to the extent lawful, accept for payment, on a pro rata basisto the extent necessary, the Asset Disposition Offer Amount of Securities andPari Passu Notes or portions of Securities and Pari Passu Notes so validlytendered and not properly withdrawn pursuant to the Asset Disposition Offer, orif less than the Asset Disposition Offer Amount has been validly tendered andnot properly withdrawn, all Securities and Pari Passu Notes so validly tenderedand not properly withdrawn, in each case

 

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inintegral multiples of $1,000. The Company will deliver to the Trustee anOfficers’ Certificate stating that such Securities or portions thereof wereaccepted for payment by the Company in accordance with the terms of this Section 3.5and, in addition, the Company will deliver all certificates and notes required,if any, by the agreements governing the Pari Passu Notes. The Company or thePaying Agent, as the case may be, will promptly (but in any case not laterthan five Business Days after termination of the Asset Disposition OfferPeriod) mail or deliver to each tendering Holder of Securities or holder orlender of Pari Passu Notes, as the case may be, an amount equal to thepurchase price of the Securities or Pari Passu Notes so validly tendered andnot properly withdrawn by such holder or lender, as the case may be, andaccepted by the Company for purchase, and the Company will promptly issue a newSecurity, and the Trustee, upon receipt by the Issuers’ Order, willauthenticate and mail or deliver such new Security to such Holder, in aprincipal amount equal to any unpurchased portion of the Security surrendered; *provided* that each such new Security willbe in a principal amount of $1,000 or an integral multiple of $1,000. AnySecurity not so accepted will be promptly mailed or delivered by the Company tothe Holder thereof. The Company will publicly announce the results of the AssetDisposition Offer on the Asset Disposition Purchase Date.

 

For the purposes of clause (2) of the firstparagraph of this Section 3.5, the following will be deemed to becash: 

 

(1)                                  the assumption by the transferee ofIndebtedness (other than Subordinated Obligations or Disqualified Stock) of theCompany or Indebtedness of a Restricted Subsidiary (other than GuarantorSubordinated Obligations or Disqualified Stock of any Wholly-Owned Subsidiarythat is a Subsidiary Guarantor) and the release of the Company or suchRestricted Subsidiary from all liability on such Indebtedness in connectionwith such Asset Disposition (in which case the Company will, without furtheraction, be deemed to have applied such deemed cash to Indebtedness inaccordance with clause (3)(a) of the first paragraph of this Section 3.5);

 

(2)                                  Additional Assets received as considerationfor Asset Dispositions; and

 

(3)                                  securities, notes or other obligationsreceived by the Company or any Restricted Subsidiary from the transferee thatare converted by the Company or such Restricted Subsidiary into cash within 180days of such Asset Disposition. 

 

The Company will comply, to the extent applicable,with the requirements of Rule 14e-1 under the Exchange Act and any othersecurities laws or regulations in connection with the repurchase of Securitiespursuant to this Indenture. To the extent that the provisions of any securitieslaws or regulations conflict with provisions of this Section 3.5,the Company will comply with the applicable securities laws and regulations andwill not be deemed to have breached its obligations under this Indenture byvirtue of any conflict.

 

SECTION 3.6.  Limitation on Liens. The Companywill not, and will not permit any of its Restricted Subsidiaries to, directlyor indirectly, create, Incur or suffer to exist any Lien (other than PermittedLiens) upon any of its property or assets (including Capital Stock ofRestricted Subsidiaries), whether owned on the date of this Indenture oracquired after that date,

 

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whichLien is securing any Indebtedness, unless contemporaneously with the Incurrenceof such Liens effective provision is made to secure the Indebtedness due underthis Indenture and the Securities or, in respect of Liens on any RestrictedSubsidiary’s property or assets, any Subsidiary Guarantee of such RestrictedSubsidiary, equally and ratably with (or senior in priority to in the case ofLiens with respect to Subordinated Obligations or Guarantor SubordinatedObligations, as the case may be) the Indebtedness secured by such Lien forso long as such Indebtedness is so secured.

 

SECTION 3.7.  Limitation on Sale/Leaseback Transactions.The Company will not, and will not permit any of its Restricted Subsidiariesto, enter into any Sale/Leaseback Transaction *unless*:

 

(1)                                  the Company or such Restricted Subsidiary, asthe case may be, receives gross consideration at the time of suchSale/Leaseback Transaction at least equal to the fair market value (asdetermined in good faith by the Board of Directors of the Company) of theproperty subject to such transaction;

 

(2)                                  the Company or such Restricted Subsidiarycould have Incurred Indebtedness in an amount equal to the AttributableIndebtedness in respect of such Sale/Leaseback Transaction pursuant to Section 3.2;

 

(3)                                  the Company or such Restricted Subsidiarywould be permitted to create a Lien on the property subject to suchSale/Leaseback Transaction without securing the Securities by Section 3.6;and

 

(4)                                  the Sale/Leaseback Transaction is treated asan Asset Disposition and all of the conditions of Section 3.5 ofthis Indenture (including the provisions concerning the application of NetAvailable Cash) are satisfied with respect to such Sale/Leaseback Transaction.

 

SECTION 3.8.  Limitation on Affiliate Transactions.The Company will not, and will not permit any of its Restricted Subsidiariesto, directly or indirectly, enter into or conduct any transaction (includingthe purchase, sale, lease or exchange of any property or the rendering of anyservice) with any Affiliate of the Company (an “Affiliate Transaction”) *unless*:

 

(1)                                  the terms of such Affiliate Transaction areno less favorable to the Company or such Restricted Subsidiary, as the case may be,than those that could be obtained in a comparable transaction at the time ofsuch transaction in arm’s-length dealings with a Person who is not such anAffiliate; 

 

(2)                                  in the event such Affiliate Transactioninvolves an aggregate consideration in excess of $25.0 million, the terms ofsuch transaction have been approved by the Board of Directors of the Companyand by a majority of the members of such Board having no personal stake in suchtransaction (it being understood that serving as a director, officer oremployee of the Parent or any of its Subsidiaries shall not be deemed apersonal stake for this purpose), if any (and such majority or majorities, asthe case may be,

 

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determines that such Affiliate Transaction satisfiesthe criteria in clause (1) above); and

 

(3)                                  in the event such Affiliate Transactioninvolves an aggregate consideration in excess of $50.0 million, the Company hasreceived a written opinion from an independent investment banking, accountingor appraisal firm of nationally recognized standing that such AffiliateTransaction is not materially less favorable than those that might reasonablyhave been obtained in a comparable transaction at such time on an arm’s-lengthbasis from a Person that is not an Affiliate.

 

The preceding paragraph will not apply to: 

 

(1)                                  any Restricted Payment permitted to be madepursuant to Section 3.3; 

 

(2)                                  any issuance of securities, or otherpayments, awards or grants in cash, securities or otherwise pursuant to, or thefunding of, employment agreements and other compensation arrangements, optionsto purchase Capital Stock of the Company, restricted stock plans, long-termincentive plans, stock appreciation rights plans, participation plans orsimilar employee benefits plans and/or indemnity provided on behalf of officersand employees approved by the Board of Directors of the Company; 

 

(3)                                  loans or advances to employees, officers ordirectors in the ordinary course of business of the Company or any of itsRestricted Subsidiaries but in any event not to exceed $2.0 million in theaggregate outstanding at any one time (without giving effect to the forgivenessof any such loan) with respect to all loans or advances made since the IssueDate;

 

(4)                                  any transaction between the Company and aRestricted Subsidiary or between Restricted Subsidiaries and Guarantees issuedby the Company or a Restricted Subsidiary for the benefit of the Company or aRestricted Subsidiary, as the case may be, in accordance with Section 3.2;

 

(5)                                  the payment of reasonable and customary feespaid to, and indemnity provided on behalf of, directors of the Company or anyRestricted Subsidiary;

 

(6)                                  the existence of, and the performance ofobligations of the Company or any of its Restricted Subsidiaries under theterms of any agreement to which the Company or any of its RestrictedSubsidiaries is a party as of or on the Emergence Date and identified on Schedule 3.8to this Indenture on the Issue Date, as these agreements may be amended,modified, supplemented, extended or renewed from time to time; *provided, however,* that any futureamendment, modification, supplement, extension or renewal entered into afterthe Emergence Date will be permitted to the extent that its terms are not moredisadvantageous in any material respect

 

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to the Holders of the Securities than the terms ofthe agreements in effect on the Emergence Date; 

 

(7)                                  transactions with customers, clients,suppliers or purchasers or sellers of goods or services, in each case, in theordinary course of the business of the Company and its Restricted Subsidiariesand otherwise in compliance with the terms of this Indenture; *provided* that in the reasonabledetermination of the members of the Board of Directors or senior management ofthe Company, such transactions are on terms that are no less favorable to theCompany or the relevant Restricted Subsidiary than those that would have beenobtained in a comparable transaction by the Company or such RestrictedSubsidiary with an unrelated Person;

 

(8)                                  any issuance or sale of Capital Stock (otherthan Disqualified Stock) to Affiliates of the Company and the granting ofregistration and other customary rights in connection therewith; 

 

(9)                                  payments made or performance under theManagement Agreement and any amendment thereto; *provided*, *however*,that the existence of, or the performance by the Company or any of itsRestricted Subsidiaries of its obligations under, any future amendment to anysuch existing agreement shall only be permitted by this clause (9) to theextent that the terms of the Management Agreement, together with all amendmentsthereto, taken as a whole, are not more disadvantageous in any material respectto the holders of the Securities than the original Management Agreement;

 

(10)                            Investments in the New York UnrestrictedSubsidiaries (other than Mirant NY-Gen, LLC) through the extension of credit asdescribed in the Offering Memorandum; 

 

(11)                            services provided by Mirant Americas EnergyMarketing, LP or MET to Subsidiaries of New Mirant of the nature described inthe “Certain relationships and related party transactions — Related partyarrangements after emergence from bankruptcy — Services agreement with MirantPower Purchase, LLC,” “ — Power sale, fuel supply and services agreements”sections of the Offering Memorandum; *provided*that in the reasonable determination of the members of the Board of Directorsor senior management of the Company, such transactions are on terms that are noless favorable to the Company or the relevant Restricted Subsidiary than thosethat would have been obtained in a comparable transaction by the Company orsuch Restricted Subsidiary with an unrelated Person (with the exception thatthe failure to require collateral in connection with sales to affiliates shallnot be deemed less favorable to the Company or the relevant RestrictedSubsidiary); and

 

(12)                            transactions contemplated by the Plan ofReorganization and the related confirmation order.

 

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SECTION 3.9.  Restrictions on Activities of MNA FinanceCorp.. Other than in connection with or incident to its obligationsof the Securities under this Indenture and its existence, MNA Finance Corp.will not hold any assets, become liable for any obligations or engage in anybusiness activities other than issuing a Guarantee of the Senior Secured CreditAgreement. At any time when the Company or a Successor Company is acorporation, MNA Finance Corp. may consolidate or merge with or into theCompany or any Restricted Subsidiary.

 

SECTION 3.10.  Limitation on Lines of Business.The Company will not, and will not permit any Restricted Subsidiary to, engagein any business other than a Permitted Business.

 

SECTION 3.11.  Change of Control. If a Changeof Control occurs, unless the Issuers have exercised their right to redeem allof the Securities as described in Section 5 of the Securities, eachHolder shall have the right to require the Issuers to repurchase all or any part (equalto $1,000 or an integral multiple in excess thereof) of such Holder’sSecurities at a purchase price in cash equal to 101% of the principal amount ofthe Securities plus accrued and unpaid interest, if any, to the date ofpurchase (subject to the right of Holders of record on the relevant record dateto receive interest due on the relevant interest payment date).

 

Within 30 days following any Change of Control,unless the Issuers have exercised their right to redeem all of the Securitiesas described in Section 5 of the Securities, the Issuers shall mail anotice (the “Change of Control Offer”) to each Holder, with a copy tothe Trustee, stating:

 

(1)                                  that a Change of Control has occurred andthat such Holder has the right to require the Issuers to purchase such Holder’sSecurities at a purchase price in cash equal to 101% of the principal amount ofsuch Securities plus accrued and unpaid interest, if any, to the date ofpurchase (subject to the right of Holders of record on a record date to receiveinterest on the relevant interest payment date) (the “Change of ControlPayment”);

 

(2)                                  the repurchase date (which shall be noearlier than 30 days nor later than 60 days from the date such notice ismailed) (the “Change of Control Payment Date”); and

 

(3)                                  the procedures determined by the Issuers,consistent with this Indenture, that a Holder must follow in order to have itsSecurities repurchased.

 

On the Change of Control Payment Date, the Issuersshall, to the extent lawful:

 

(1)                                  accept for payment all Securities or portionsof Securities (in integral multiples of $1,000) properly tendered pursuant tothe Change of Control Offer;

 

(2)                                  deposit with the Paying Agent an amount equalto the Change of Control Payment in respect of all Securities or portions ofSecurities so tendered; and 

 

(3)                                  deliver or cause to be delivered to theTrustee the Securities so accepted together with an Officers’ Certificatestating the aggregate principal

 

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amount of Securities or portions of Securities beingpurchased by the Issuers. 

 

The Paying Agent shall promptly mail to each Holderof Securities so tendered the Change of Control Payment for such Securities,and the Trustee shall, upon receipt by Trustee of the Issuers’ Order, promptlyauthenticate and mail (or cause to be transferred by book entry) to each Holdera new Security equal in principal amount to any unpurchased portion of theSecurities surrendered, if any; *provided*that each such new Security shall be in a principal amount of $1,000 or anintegral multiple thereof.

 

If the Change of Control Payment Date is on or afteran interest record date and on or before the related interest payment date, anyaccrued and unpaid interest, if any, will be paid to the Person in whose name aSecurity is registered at the close of business on such record date, and noadditional interest shall be payable to Holders who tender pursuant to theChange of Control Offer.

 

Prior to mailing a Change of Control Offer, and as acondition to such mailing (i) the requisite holders of each issue ofIndebtedness issued under an indenture or other agreement that may beviolated by such payment shall have consented to such Change of Control Offerbeing made and waived the event of default, if any, caused by the Change ofControl or (ii) the Issuers will repay all outstanding Indebtedness issuedunder an indenture or other agreement that may be violated by a payment tothe holders of Securities under a Change of Control Offer or the Issuers mustoffer to repay all such Indebtedness, and make payment to the holders of suchIndebtedness that accept such offer, and obtain waivers of any event of defaultfrom the remaining holders of such Indebtedness. The Issuers covenant to effectsuch repayment or obtain such consent within 30 days following any Changeof Control, it being a default of this Section 3.11 if the Issuersfail to comply with this provision. A payment default or acceleration underthis Indenture will result in a cross-default under the Senior Secured CreditAgreement.

 

The Issuers will not be required to make a Change ofControl Offer upon a Change of Control if a third party makes the Change ofControl Offer in the manner, at the times and otherwise in compliance with therequirements set forth in this Indenture applicable to a Change of ControlOffer made by the Issuers and purchases all Securities validly tendered and notwithdrawn under such Change of Control Offer.

 

The Issuers will be subject, to the extentapplicable, to the requirements of Rule 14e-1 under the Exchange Act andany other securities laws or regulations in connection with the repurchase ofSecurities pursuant to this Section 3.11. To the extent that theprovisions of any securities laws or regulations conflict with provisions ofthis Indenture, the Issuers shall comply with the applicable securities lawsand regulations and shall not be deemed to have breached its obligationsdescribed in this Indenture by virtue of the conflict.

 

SECTION 3.12.  SEC Reports. Notwithstandingthat the Issuers may not be subject to the reporting requirements of Section 13or 15(d) of the Exchange Act, to the extent permitted by the Exchange Act,the Issuers will file with the SEC, and make available to the Trustee and theregistered holders of the Securities, the annual reports and the information,documents and other reports (or copies of such portions of any of the foregoingas the SEC may by rules and regulations prescribe) that are specifiedin Sections 13 and 15(d) of the Exchange

 

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Actwithin the time periods specified therein. In the event that the Issuers arenot permitted to file such reports, documents and information with the SECpursuant to the Exchange Act, the Issuers will nevertheless make available suchExchange Act information to the Trustee and the holders of the Securities as ifthe Issuers were subject to the reporting requirements of Section 13 or 15(d) ofthe Exchange Act within the time periods specified therein or in the relevantforms.

 

If the Issuers have designated any of theirSubsidiaries as Unrestricted Subsidiaries, then the quarterly and annualfinancial information required by the preceding paragraph shall include areasonably detailed presentation, either on the face of the financialstatements or in the footnotes to the financial statements and in Management’sDiscussion and Analysis of Results of Operations and Financial Condition, ofthe financial condition and results of operations of the Issuers and theirRestricted Subsidiaries. 

 

In addition, the Issuers and the Subsidiary Guarantorshave agreed that they will make available to the Holders and to prospectiveinvestors, upon the request of such Holders, the information required to bedelivered pursuant to Rule 144A(d)(4) under the Securities Act solong as the Securities are not freely transferable under the Securities Act. Forpurposes of this Section 3.12, the Issuers and the SubsidiaryGuarantors will be deemed to have furnished the reports to the Trustee and theHolders of Securities as required by this Section 3.12 if the Issuershave filed such reports with the SEC via the EDGAR filing system and suchreports are publicly available.

 

The filing requirements set forth above for theapplicable period shall be deemed satisfied by the Issuers prior to thecommencement of the Exchange Offer or the effectiveness of the ShelfRegistration Statement by the filing with the SEC of the exchange offerregistration statement and/or Shelf Registration Statement, and any amendmentsthereto, with such financial information that satisfies Regulation S-X of theSecurities Act; *provided* thatthis paragraph shall not supersede or in any manner suspend or delay theIssuers’ reporting obligations set forth in the first three paragraphs of this Section 3.12.

 

SECTION 3.13.  Future Subsidiary Guarantors. TheCompany will cause each Restricted Subsidiary that Guarantees, on the EmergenceDate or any time thereafter, any Indebtedness of the Company or any SubsidiaryGuarantor (excluding a Guarantee by a Non-Guarantor Restricted Subsidiary ofIndebtedness issued by a Non-Guarantor Restricted Subsidiary) to execute anddeliver to the Trustee a supplemental indenture pursuant to which suchRestricted Subsidiary will unconditionally Guarantee, on a joint and severalbasis, the full and prompt payment of the principal of, premium, if any, andinterest (including additional interest, if any) in respect of the Securitieson a senior unsecured basis and all other obligations under this Indenture. Notwithstandingthe foregoing, in the event any Subsidiary Guarantor is released and dischargedin full from all of its obligations under its Guarantees of (1) the SeniorSecured Credit Agreement and (2) all other Indebtedness of the Company andits Restricted Subsidiaries, then the Subsidiary Guarantee of such SubsidiaryGuarantor shall be automatically and unconditionally released or discharged; *provided* that such Restricted Subsidiaryhas not Incurred any Indebtedness in reliance on its status as a SubsidiaryGuarantor under Section 3.2 unless such Subsidiary Guarantor’s obligationsunder such Indebtedness are satisfied in full and discharged or are otherwisepermitted under the second paragraph of Section 3.2.

 

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SECTION 3.14.  Maintenance of Office or Agency.The Company shall maintain an office or agency where the Securities may bepresented or surrendered for payment, where, if applicable, the Securities may besurrendered for registration of transfer or exchange and where notices anddemands to or upon the Company in respect of the Securities and this Indenture may beserved. The agency of Deutsche Bank Trust Company Americas (the “Agent”),currently located at 60 Wall Street, 27th Floor, New York, New York10005, Attention:  Trust and SecurityServices (or at such address in the Borough of Manhattan, The City of New Yorkas the Agent shall designate upon request therefor from the Company or anyHolder), shall be such office or agency of the Company, unless the Companyshall designate and maintain some other office or agency for one or more ofsuch purposes. The Company shall give prompt written notice to the Trustee ofany change in the location of any such office or agency. If at any time theCompany shall fail to maintain any such required office or agency or shall failto furnish the Trustee with the address thereof, such presentations,surrenders, notices and demands may be made or served at the Agent of theTrustee, and the Company hereby appoints the Trustee as its agent to receiveall such presentations, surrenders, notices and demands.

 

The Company may also from time to timedesignate one or more other offices or agencies where the Securities may bepresented or surrendered for any or all such purposes and may from time totime rescind any such designation. The Company shall give prompt written noticeto the Trustee of any such designation or rescission and any change in thelocation of any such other office or agency.

 

SECTION 3.15.  Corporate Existence. Except asotherwise provided in Article III, Article IV and Section 10.2(b),the Company shall do or cause to be done all things necessary to preserve andkeep in full force and effect its corporate existence and the corporate,partnership, limited liability company or other existence of each SubsidiaryGuarantor, if any, in accordance with their respective organizational documents(as the same may be amended from time to time) and the rights (charter andstatutory) licenses and franchises of the Company and each such SubsidiaryGuarantor; *provided, however,*that the Company shall not be required to preserve any such right, license orfranchise or the corporate, partnership, limited liability company or otherexistence of any Subsidiary Guarantor if the Board of Directors of the Companyshall determine that the preservation thereof is no longer desirable in theconduct of the business of the Company and each of its Restricted Subsidiaries,taken as a whole, and that the loss thereof is not, and will not be,disadvantageous in any material respect to the Holders; *provided, further,* that the foregoingshall not prohibit a sale, transfer, or conveyance of a Restricted Subsidiaryor any of its assets in compliance with the terms of this Indenture.

 

SECTION 3.16.  Payment of Taxes and Other Claims.The Issuers will pay, and will cause each of the Company’s Subsidiaries to pay,prior to delinquency, all material taxes, assessments, and governmental leviesexcept such as are contested in good faith and by appropriate proceedings orwhere the failure to effect such payment is not adverse in any material respectto the Holders of the Notes.

 

SECTION 3.17.  Payments for Consent. NeitherMNA Finance Corp., the Company nor any of its Restricted Subsidiaries will,directly or indirectly, pay or cause to be paid any consideration, whether byway of interest, fees or otherwise, to any Holder of any Securities for or asan inducement to any consent, waiver or amendment of any of the terms or

 

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provisionsof this Indenture or the Securities unless such consideration is offered to bepaid or is paid to all Holders of the Securities that consent, waive or agreeto amend in the time frame set forth in the solicitation documents relating tosuch consent, waiver or amendment.

 

SECTION 3.18.  Compliance Certificate. TheCompany shall deliver to the Trustee within 120 days after the end of eachfiscal year of the Company an Officers’ Certificate stating that in the courseof the performance by the signers of their duties as Officers of the Company theywould normally have knowledge of any Default or Event of Default and whether ornot the signers know of any Default or Event of Default that occurred duringthe previous fiscal year. If they do, the certificate shall describe theDefault or Event of Default, its status and the action the Company is taking orproposes to take with respect thereto. The Company also shall comply with TIA § 314(a)(4).

 

SECTION 3.19.  [Intentionally omitted]. 

 

SECTION 3.20.  Statement by Officers as to Default.The Issuers shall deliver to the Trustee, as soon as possible and in any eventwithin 30 days after the occurrence of any Event of Default or an eventwhich, with notice or the lapse of time or both, would constitute an Event ofDefault, an Officers’ Certificate setting forth the details of such Event ofDefault or Default, its status and the actions which the Issuers are taking orproposes to take with respect thereto.

 

SECTION 3.21.  Activities prior to Emergence Date.Prior to the Emergence Date, the Company and its Restricted Subsidiaries shallnot engage in any activity or enter into any transaction or agreement(including, without limitation, making any restricted payment, incurring anyIndebtedness, incurring any Liens except in favor of the holders of the Securities,entering into any merger, consolidation or sale of all or substantially all ofits assets or engaging in any transaction with its Affiliates) except in theordinary course of business or necessary to effectuate the Plan ofReorganization substantially in accordance with the description of the Plan ofReorganization set forth in the Offering Memorandum, the disclosure statementrelating to the Plan of Reorganization and the confirmation order relating tothe Plan of Reorganization.

 

SECTION 3.22.  Effectiveness of Covenants. Followingthe first day:

 

a)                                   the Securities have an Investment GradeRating from both of the Ratings Agencies; and

 

b)                                  no Default or Event of Default has occurredand is continuing under this Indenture (the occurrence of the events describedin foregoing clauses (a) and (b) being collectively referred to as a “CovenantSuspension Event”);

 

theCompany and its Restricted Subsidiaries will not be subject to the provisionsdescribed in Sections 3.2, 3.3, 3.4, 3.5, 3.8and 3.10 and clause (3) of Section 4.1 (collectivelythe “Suspended Covenants”). 

 

Upon the occurrence of a Covenant Suspension Event,the amount of Excess Proceeds from Net Available Cash shall be set at zero. Inthe event that the Company and its Restricted Subsidiaries are not subject tothe Suspended Covenants for any period of time as a result of the foregoing,and on any subsequent date (the “Reversion Date”) one or both of theRating

 

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Agencieswithdraws its Investment Grade Rating or downgrades the rating assigned to theSecurities below an Investment Grade Rating or a Default or Event of Defaultoccurs and is continuing, then the Company and its Restricted Subsidiaries willthereafter again be subject to the Suspended Covenants with respect to futureevents. The period of time between the date of the Covenant Suspension Eventand the Reversion Date is referred to in this description as the “SuspensionPeriod.” Notwithstanding that the Suspended Covenants may be reinstated,no Default or Event of Default will be deemed to have occurred as a result of afailure to comply with the Suspended Covenants during the Suspension Period (orupon termination of the Suspension Period or after that time based solely onevents that occurred during the Suspension Period). 

 

On the Reversion Date, all Indebtedness Incurredduring the Suspension Period will be classified to have been Incurred pursuantto the first paragraph of Section 3.2 or one of the clauses setforth in the second paragraph of Section 3.2 (to the extent suchIndebtedness would be permitted to be Incurred thereunder as of the ReversionDate and after giving effect to Indebtedness Incurred prior to the SuspensionPeriod and outstanding on the Reversion Date). To the extent such Indebtednesswould not be so permitted to be Incurred pursuant to the first or secondparagraph of Section 3.2, such Indebtedness will be deemed to havebeen outstanding on the Emergence Date, so that it is classified as permittedunder clause (4) of the second paragraph of Section 3.2.Calculations made after the Reversion Date of the amount available to be madeas Restricted Payments under Section 3.3 will be made as though thecovenant described under Section 3.3 had been in effect since theEmergence Date and throughout the Suspension Period. Accordingly, RestrictedPayments made during the Suspension Period will reduce the amount available tobe made as Restricted Payments under the first paragraph of Section 3.3.

 

SECTION 3.23.  Limitation on Ability of the Issuers toRelease Funds from Escrow.

 

The Issuers agree that (i) the terms of theEscrow Agreement shall exclusively control the conditions under which andprocedures pursuant to which Escrowed Funds (as defined in the EscrowAgreement) can be released and (ii) it will not attempt to have EscrowedFunds released from escrow except in accordance with the Escrow Agreement.

 

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ARTICLE IV

SUCCESSOR COMPANY

 

SECTION 4.1.  Merger and Consolidation. TheCompany will not consolidate with or merge with or into, or convey, transfer orlease all or substantially all its assets to, any Person, *unless*: 

 

(1)                                  the resulting, surviving or transferee Person(the “Successor Company”) will be a corporation, partnership or limitedliability company organized and existing under the laws of the United States ofAmerica, any State of the United States or the District of Columbia and theSuccessor Company (if not the Company) will expressly assume, by supplementalindenture, executed and delivered to the Trustee, in form satisfactory tothe Trustee, all the obligations of the Company under the Securities, thisIndenture and the Registration Rights Agreement; *provided* that if the Successor Company is not organized as acorporation after such transaction, MNA Finance Corp. or a successor U.S.corporation which is a Restricted Subsidiary of the Successor Company shallcontinue to be co-obligor of the Securities and shall have by supplementalindenture confirmed its obligations under this Indenture, the Securities andthe Registration Rights Agreement;

 

(2)                                  immediately after giving effect to suchtransaction (and treating any Indebtedness that becomes an obligation of theSuccessor Company or any Subsidiary of the Successor Company as a result ofsuch transaction as having been Incurred by the Successor Company or suchSubsidiary at the time of such transaction), no Default or Event of Defaultshall have occurred and be continuing;

 

(3)                                  immediately after giving effect to such transaction,(a) the Successor Company would be able to Incur at least an additional$1.00 of Indebtedness pursuant to the first paragraph of Section 3.2or (b) the Consolidated Coverage Ratio for the Successor Company and itsRestricted Subsidiaries would be greater than such ratio for the Company andits Restricted Subsidiaries immediately prior to such transaction; 

 

(4)                                  each Subsidiary Guarantor (unless it is theother party to the transactions above, in which case clause (1) shallapply) shall have by supplemental indenture confirmed that its SubsidiaryGuarantee shall apply to such Person’s obligations in respect of this Indentureand the Securities and its obligations under the Registration Rights Agreementshall continue to be in effect; and 

 

(5)                                  the Company shall have delivered to theTrustee an Officers’ Certificate and an Opinion of Counsel, each stating thatsuch consolidation, merger or

 

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transfer and such supplemental indenture (if any)comply with this Indenture;

 

*provided*, that the provisions of this Section 4.1shall not apply to the Merger.

 

For purposes of this Section 4.1, thesale, lease, conveyance, assignment, transfer, or other disposition of all orsubstantially all of the properties and assets of one or more Subsidiaries ofthe Company, which properties and assets, if held by the Company instead ofsuch Subsidiaries, would constitute all or substantially all of the propertiesand assets of the Company on a consolidated basis, shall be deemed to be thetransfer of all or substantially all of the properties and assets of theCompany.

 

The predecessor Company will be released from itsobligations under this Indenture and the Successor Company will succeed to, andbe substituted for, and may exercise every right and power of, the Issuersunder this Indenture, but, in the case of a lease of all or substantially allits assets, the predecessor Company will not be released from the obligation topay the principal of and interest on the Securities.

 

Notwithstanding the preceding clause (3), anyRestricted Subsidiary may consolidate with, merge into or transfer all or part ofits properties and assets to the Company, (y) the Company may merge withan Affiliate incorporated solely for the purpose of reincorporating the Companyin another jurisdiction to realize tax benefits; *provided* that, in the case of a Restricted Subsidiary thatmerges into the Company, the Issuers will not be required to comply with thepreceding clause (5).

 

In addition, the Company will not permit anySubsidiary Guarantor to consolidate with, merge with or into any Person (otherthan the Company or another Subsidiary Guarantor) and will not permit theconveyance, transfer or lease of all or substantially all of the assets of anySubsidiary Guarantor (except to the Company or another Subsidiary Guarantor) *unless*:

 

(1)                                  (a) if such entity remains a SubsidiaryGuarantor, the resulting, surviving or transferee Person will be a corporation,partnership, trust or limited liability company organized and existing underthe laws of the United States of America, any State of the United States or theDistrict of Columbia; (b) immediately after giving effect to suchtransaction (and treating any Indebtedness that becomes an obligation of theresulting, surviving or transferee Person or any Restricted Subsidiary as aresult of such transaction as having been Incurred by such Person or suchRestricted Subsidiary at the time of such transaction), no Default of Event ofDefault shall have occurred and be continuing; and (c) the Company willhave delivered to the Trustee an Officers’ Certificate and an Opinion ofCounsel, each stating that such consolidation, merger or transfer and suchsupplemental indenture (if any) comply with this Indenture; and

 

(2)                                  the transaction is made in compliance with Section 3.5and this Section 4.1.

 

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ARTICLE V

REDEMPTION OFSECURITIES

 

SECTION 5.1.  Redemption. The Securities may beredeemed, as a whole or from time to time in part, subject to the conditionsand at the redemption prices specified in paragraph 5 of the form ofSecurities set forth in Exhibit A and Exhibit B hereto,which are hereby incorporated by reference and made a part of thisIndenture, together with accrued and unpaid interest, if any, to the RedemptionDate. 

 

SECTION 5.2.  Applicability of Article. Redemptionof Securities at the election of the Issuers or otherwise, as permitted orrequired by any provision of this Indenture, shall be made in accordance withsuch provision and this Article.

 

SECTION 5.3.  Election to Redeem; Notice to Trustee.The election of the Issuers to redeem any Securities pursuant to Section 5.1shall be evidenced by Board Resolutions of the Issuers. In case of any redemptionat the election of the Issuers, the Issuers shall, upon not later than theearlier of the date that is 45 days prior to the Redemption Date fixed bythe Issuers or the date on which notice is given to the Holders (except asprovided under Section 5.5 or unless a shorter notice shall besatisfactory to the Trustee), notify the Trustee in writing of such RedemptionDate and of the principal amount of Securities to be redeemed and shall deliverto the Trustee such documentation and records as shall enable the Trustee toselect the Securities to be redeemed pursuant to Section 5.4. Anysuch notice may be cancelled at any time prior to notice of suchredemption being mailed to any Holder and shall thereby be void and of noeffect.

 

SECTION 5.4.  Selection by Trustee of Securities to BeRedeemed. If less than all the Securities are to be redeemed at anytime pursuant to an optional redemption, the particular Securities to beredeemed shall be selected not more than 60 days prior to the RedemptionDate by the Trustee, from the outstanding Securities not previously called forredemption, in compliance with the requirements of the principal nationalsecurities exchange, if any, on which such Securities are listed, or, if suchSecurities are not so listed, on a *pro**rata* basis, by lot or by suchother method as the Trustee in its sole discretion shall deem fair andappropriate (and in such manner as complies with applicable legal requirements)and which may provide for the selection for redemption of portions of theprincipal of the Securities; *provided,however,* that no such partial redemption shall reduce the portion ofthe principal amount of a Security not redeemed to less than $1,000.

 

The Trustee shall promptly notify the Issuers inwriting of the Securities selected for redemption and, in the case of anySecurities selected for partial redemption, the method it has chosen for theselection of Securities and the principal amount thereof to be redeemed.

 

For all purposes of this Indenture, unless thecontext otherwise requires, all provisions relating to redemption of Securitiesshall relate, in the case of any Security redeemed or to be redeemed only inpart, to the portion of the principal amount of such Security which has been oris to be redeemed.

 

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SECTION 5.5.  Notice of Redemption. Notice ofredemption shall be given in the manner provided for under Section 11.2not less than 30 nor more than 60 days prior to the Redemption Date, toeach Holder of Securities to be redeemed. At the Issuers’ written request, theTrustee shall give written notice of redemption in the Issuers’ name and at theIssuers’ expense; *provided, however,*that the Issuers shall deliver to the Trustee (with a copy to the Registrar andPaying Agent), at least 45 days (or such shorter period as the Trustee may agree)prior to the Redemption Date, an Officers’ Certificate requesting that theTrustee give such notice at the Issuers’ expense and the form of noticethat shall include the following items.

 

All notices of redemption shall state:

 

(1)                                  theRedemption Date,

 

(2)                                  theredemption price and the amount of accrued interest to the Redemption Datepayable as provided under Section 5.7, if any,

 

(3)                                  ifless than all outstanding Securities are to be redeemed, the identification ofthe particular Securities (or portion thereof) to be redeemed, as well as theaggregate principal amount of Securities to be redeemed and the aggregateprincipal amount of Securities to be outstanding after such partial redemption,

 

(4)                                  incase any Security is to be redeemed in part only, the notice which relatesto such Security shall state that on and after the Redemption Date, uponsurrender of such Security, the Holder will receive, without charge, a newSecurity or Securities of authorized denominations for the principal amountthereof remaining unredeemed,

 

(5)                                  thaton the Redemption Date the redemption price (and accrued interest, if any, tothe Redemption Date payable as provided under Section 5.7) willbecome due and payable upon each such Security, or the portion thereof, to beredeemed, and, unless the Issuers default in making the redemption payment,that interest on Securities called for redemption (or the portion thereof) willcease to accrue on and after said date,

 

(6)                                  theplace or places where such Securities are to be surrendered for payment of theredemption price and accrued interest, if any,

 

(7)                                  thename and address of the Paying Agent,

 

(8)                                  thatSecurities called for redemption must be surrendered to the Paying Agent tocollect the redemption price,

 

(9)                                  theCUSIP, Common Code and ISIN numbers, if applicable, and that no representationis made as to the accuracy or correctness of the CUSIP, Common Code and ISINnumbers, if applicable, if any, listed in such notice or printed on theSecurities, and 

 

(10)                            theparagraph of the Securities pursuant to which the Securities are to beredeemed.

 

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SECTION 5.6.  Deposit of Redemption Price. Priorto 10:00 a.m., New York City time, on any Redemption Date, the Issuersshall deposit with the Trustee or with a Paying Agent (or, if any of theIssuers or any of the Issuers’ Subsidiaries is acting as its own Paying Agent,segregate and hold in trust as provided under Section 2.4) anamount of money sufficient to pay the redemption price of, and accrued intereston, all the Securities which are to be redeemed on that date, other thanSecurities or portions of Securities called for redemption that arebeneficially owned by the Issuers and have been delivered by the Issuers to theTrustee for cancellation.

 

SECTION 5.7.  Securities Payable on Redemption Date.Notice of redemption having been given as aforesaid, the Securities or portionsof Securities so to be redeemed shall, on the Redemption Date, become due andpayable at the redemption price therein specified (together with accruedinterest, if any, to the Redemption Date), and on and after such date (unlessthe Issuers shall default in the payment of the redemption price and accruedinterest) such Securities shall cease to bear interest and the only right ofthe Holders thereof will be to receive payment of the redemption price and,subject to the next sentence, unpaid interest on such Securities to theRedemption Date. Upon surrender of any such Security for redemption inaccordance with said notice, such Security shall be paid by the Issuers at theredemption price, together with accrued interest, if any, to the RedemptionDate (subject to the rights of Holders of record on the relevant record date toreceive interest due on the relevant interest payment date).

 

If any Security called for redemption shall not beso paid upon surrender thereof for redemption, the unpaid principal (andpremium, if any) shall, until paid, bear interest from the Redemption Date atthe rate borne by the Securities.

 

SECTION 5.8.  Securities Redeemed in Part. AnySecurity which is to be redeemed only in part (pursuant to the provisionsof this Article) shall be surrendered at the office or agency of the Issuersmaintained for such purpose pursuant to Section 3.14 (with, if theIssuers or the Trustee so require, due endorsement by, or a written instrumentof transfer in form satisfactory to the Issuers and the Trustee dulyexecuted by the Holder thereof or such Holder’s attorney duly authorized inwriting), and the Issuers shall execute, and the Trustee shall , upon receiptby Trustee of the Issuers’ Order, authenticate and make available for deliveryto the Holder of such Security at the expense of the Issuers, a new Security orSecurities, of any authorized denomination as requested by such Holder, in anaggregate principal amount equal to and in exchange for the unredeemed portionof the principal of the Security so surrendered, *provided,* that each such new Security will be in a principalamount of $1,000 or an integral multiple thereof.

 

SECTION 5.9.  Special Mandatory Redemption. Ifthe Escrow Release Conditions (as defined in the Escrow Agreement) shall nothave been fulfilled, or the escrow agent shall not have received the Officers’Certificate described in Section 7(a) of the Escrow Agreement by January 6,2006, or the Plan of Reorganization shall have been amended and such amendmentsare materially adverse to the holders of the Securities or the Plan ofReorganization shall have been terminated prior to such date, the escrow agent,pursuant to the Escrow Agreement, shall, without the requirement of notice toor action by the Issuers, the Trustee or any other Person, notify the Trusteein writing that all of the Securities shall be subject to a special redemption(the “Special Redemption”) in accordance with this Section 5.9on the second

 

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BusinessDay after delivery of such notice but in any event on or prior to January 10,2006 (the “Special Redemption Date”). In the case of a SpecialRedemption, the Issuers shall, not later than 11:00 A.M. New York Citytime (or such other time of day acceptable to the Trustee which will permit itto give the notice referred to in the last paragraph of Section 5.5)at least two Business Days prior to the Special Redemption Date deliver anOfficers’ Certificate to the Trustee setting forth (i) that a SpecialRedemption will occur, (ii) the Special Redemption Date, (iii) theSpecial Redemption Price and (iv) the other information specified in Section 5.5.The Trustee shall deliver to each Holder a written notice (specifying theinformation set forth in such Officers’ Certificate) of the Special Redemptionat least two Business Days prior to the Special Redemption Date. On the SpecialRedemption Date, the Issuers shall instruct the escrow agent to release cash tothe Paying Agent for the purposes of the Special Redemption. On the SpecialRedemption Date, the Securities shall be redeemed, in whole but not in part, ata redemption price equal to 100% of the principal amount of the Securities,plus accrued and unpaid interest, from, and including, the Issue Date to, butexcluding, the Special Redemption Date, notwithstanding the noncompliance bythe Issuers with the requirements of the second sentence of this Section 5.9.

 

ARTICLE VI

 

DEFAULTS ANDREMEDIES

 

SECTION 6.1.  Events of Default. Each of thefollowing is an event of default (an “Event of Default”):

 

(1)                                  default in any payment of interest oradditional interest (as required by the Registration Rights Agreement) on anySecurity when due, continued for 30 days;

 

(2)                                  default in the payment of principal of orpremium, if any, on any Security when due at its Stated Maturity, upon optionalredemption, upon required repurchase, upon declaration or otherwise;

 

(3)                                  failure by the Issuers or any SubsidiaryGuarantor to comply with their obligations under Section 4.1;

 

(4)                                  failure by the Issuers or any SubsidiaryGuarantor to comply for 30 days after notice as provided below with any oftheir obligations under Article III (other than (x) a failure topurchase Securities which will constitute an Event of Default under clause (2) ofthis Section 6.1 and other than a failure to comply with Section 4.1,which will constitute an Event of Default under clause (3) of this Section 6.1and (y) Sections3.14, 3.15, 3.16, 3.17, 3.18and 3.20, which will constitute an Event of Default under clause (5) ofthis Section 6.1); 

 

(5)                                  failure by the Issuers or any SubsidiaryGuarantor to comply for 60 days after notice as provided below with their otheragreements contained in this Indenture;  

 

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(6)                                  default under any mortgage, indenture or instrumentunder which there may be issued or by which there may be secured orevidenced any Indebtedness for money borrowed by the Issuers, any of theirRestricted Subsidiaries or New Mirant (subject, solely in the case of NewMirant, to there being outstanding more than $100.0 million of unfunded MAI Series APreferred Shares and MAI Series B Preferred Shares in the aggregate) orthe payment of which is guaranteed by the Issuers, any of their RestrictedSubsidiaries or New Mirant, other than Indebtedness owed to the Issuers or aRestricted Subsidiary, whether such Indebtedness or guarantee now exists, or iscreated after the date of this Indenture, which default:

 

(a)                                  is caused by a failure to pay principal ofsuch Indebtedness at its final stated maturity (“payment default”); or

 

(b)                                 results in the acceleration of suchIndebtedness prior to its maturity (the “cross acceleration provision”);

 

and, in each case, the principal amount of any suchIndebtedness, together with the principal amount of any other such Indebtednessunder which there has been a payment default or the maturity of which has beenso accelerated, aggregates $50.0 million or more; *provided* that this clause (6) shall not apply toIndebtedness that becomes due as a result of the voluntary sale or transfer ofthe property or assets securing such Indebtedness to a Person that is not anAffiliate of the Issuers so long as such Indebtedness is retired upon such saleor transfer;

 

(7)          (a)                                     either of the Issuers, New Mirant (subject,solely in the case of New Mirant, to there being outstanding more than $100.0million of unfunded MAI Series A Preferred Shares and MAI Series BPreferred Shares in the aggregate) or a Significant Subsidiary of the Issuersor group of Restricted Subsidiaries of the Issuers that, taken together (as ofthe latest audited consolidated financial statements for the Company and itsRestricted Subsidiaries), would constitute a Significant Subsidiary, pursuantto or within the meaning of any Bankruptcy Law:

 

(i)                                           commences a voluntary case or proceeding;

 

(ii)                                           consents to the entry of judgment, decree ororder for relief against it in an involuntary case or proceeding;

 

(iii)                                        consents to the appointment of a Custodian ofit or for any substantial part of its property;

 

(iv)                                       makes a general assignment for the benefit ofits creditors;

 

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(v)                                          consents to or acquiesces in the institutionof a bankruptcy or an insolvency proceeding against it;

 

(vi)                                       takes any corporate action to authorize oreffect any of the foregoing; or

 

(vii)                                    takes any comparable action under any foreignlaws relating to insolvency; or

 

(b)                                 a court of competent jurisdiction enters anorder or decree under any Bankruptcy Law that:

 

(i)                                     is for relief in an involuntary case againsteither of the Issuers, New Mirant (subject, solely in the case of New Mirant,to there being outstanding more than $100.0 million of unfunded MAI Series APreferred Shares and MAI Series B Preferred Shares in the aggregate) or aSignificant Subsidiary of the Issuers or group of Restricted Subsidiaries ofthe Issuers that, taken together (as of the latest audited consolidatedfinancial statements for the Issuers and their Restricted Subsidiaries), wouldconstitute a Significant Subsidiary, pursuant to or within the meaning of anyBankruptcy Law;

 

(ii)                                  appoints a Custodian for all or substantiallyall of the property of either of the Issuers, New Mirant (subject, solely inthe case of New Mirant, to there being outstanding more than $100.0 million ofunfunded MAI Series A Preferred Shares and MAI Series B PreferredShares in the aggregate) or a Significant Subsidiary of the Issuers or group ofRestricted Subsidiaries of the Issuers that, taken together (as of the latestaudited consolidated financial statements for the Issuers and their RestrictedSubsidiaries), would constitute a Significant Subsidiary, pursuant to or withinthe meaning of any Bankruptcy Law; or

 

(iii)                               orders the winding up or liquidation ofeither of the Issuers, New Mirant (subject, solely in the case of New Mirant,to there being outstanding more than $100.0 million of unfunded MAI Series APreferred Shares and MAI Series B Preferred Shares in the aggregate) or aSignificant Subsidiary of the Issuers or group of Restricted Subsidiaries ofthe Issuers that, taken together (as of the latest audited consolidatedfinancial statements for the Company and its Restricted Subsidiaries), wouldconstitute a Significant Subsidiary, pursuant to or within the meaning of anyBankruptcy Law; and

 

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(iv)                              in each case the order, decree or reliefremains unstayed and in effect for 60 days;

 

(8)                                   failure by the Company or any SignificantSubsidiary or group of Restricted Subsidiaries that, taken together (as of thelatest audited consolidated financial statements for the Company and itsRestricted Subsidiaries), would constitute a Significant Subsidiary to payfinal judgments aggregating in excess of $50.0 million (net of any amounts thata reputable and creditworthy insurance company has acknowledged liability forin writing), which judgments are not paid, discharged or stayed for a period of60 days (the “judgment default provision”); or

 

(9)                                   any Subsidiary Guarantee of a SignificantSubsidiary or group of Restricted Subsidiaries that taken together as of thelatest audited consolidated financial statements for the Company and itsRestricted Subsidiaries would constitute a Significant Subsidiary ceases to bein full force and effect (except as contemplated by the terms of thisIndenture) or is declared null and void in a judicial proceeding or anySubsidiary Guarantor that is a Significant Subsidiary or group of SubsidiaryGuarantors that taken together as of the latest audited consolidated financialstatements of the Company and its Restricted Subsidiaries would constitute aSignificant Subsidiary expressly denies or disaffirms its obligations underthis Indenture or its Subsidiary Guarantee.

 

However,a default under clauses (4) and (5) of this paragraph will notconstitute an Event of Default until the Trustee or the Holders of 25% inprincipal amount of the outstanding Securities notify the Issuers of thedefault and the Issuers do not cure such default within the time specified inclauses (4) and (5) of this paragraph after receipt of such notice.

 

The foregoing shall constitute Events of Defaultwhatever the reason for any such Event of Default and whether it is voluntaryor is effected by operation of law or pursuant to any judgment, decree or orderof any court or any order, rule or regulation of any administrative orgovernmental body.

 

In the case of any Event of Default occurring byreason of any willful action (or inaction) taken (or not taken) by or on behalfof the Issuers with the intention of avoiding payment of the premium that theIssuers would have had to pay if the Issuers then had elected to redeem theSecurities pursuant to the optional redemption provisions of this Indenture orwas required to repurchase the Securities, an equivalent premium shall alsobecome and be immediately due and payable to the extent permitted by law uponthe acceleration of the Securities. If an Event of Default occurs prior to December 31,2009 by reason of any willful action (or inaction) taken (or not taken) by oron behalf of the Issuers with the intention of avoiding the prohibition onredemption of the Securities prior to December 31, 2009, the premiumspecified in this Indenture shall also become immediately due and payable tothe extent permitted by law upon the acceleration of the Securities.

 

 

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SECTION 6.2.  Acceleration.  If an Event of Default (other than an Eventof Default described in clause (7) of Section 6.1) occurs and iscontinuing, the Trustee by notice to the Issuers, or the Holders of at least25% in principal amount of the outstanding Securities by notice to the Issuersand the Trustee, may, and the Trustee at the request of such Holders shall,declare the principal of, premium, if any, and accrued and unpaid interest, ifany, on all the Securities to be due and payable. Upon such a declaration, suchprincipal, premium and accrued and unpaid interest will be due and payableimmediately.

In the event of adeclaration of acceleration of the Securities because an Event of Defaultdescribed in clause (6) of Section 6.1 has occurred and is continuing,the declaration of acceleration of the Securities shall be automaticallyannulled if the event of default or payment default triggering such Event ofDefault pursuant to clause (6) of Section 6.1 shall be remedied or curedby the Issuers or a Restricted Subsidiary or waived by the holders of therelevant Indebtedness within 30 days after the declaration of acceleration withrespect thereto and if (1) the annulment of the acceleration of the Securitieswould not conflict with any judgment or decree of a court of competentjurisdiction, (2) all existing Events of Default, except nonpayment ofprincipal, premium or interest on the Securities that became due solely becauseof the acceleration of the Securities, have been cured or waived and (3) to the extent the payment of suchinterest is lawful, interest on overdue installments of interest and overdueprincipal, which has become due otherwise than by such declaration oracceleration, has been paid.

If an Event ofDefault described in clause (7) of Section 6.1 occurs and is continuing,the principal of, premium, if any, and accrued and unpaid interest on all theSecurities will become and be immediately due and payable without anydeclaration or other act on the part of the Trustee or any Holders.

SECTION 6.3.  Other Remedies.  If an Event of Default occurs and iscontinuing, the Trustee may pursue any available remedy by proceeding at law orin equity to collect the payment of principal of (or premium, if any) orinterest on the Securities or to enforce the performance of any provision ofthe Securities or this Indenture.

The Trusteemay maintain a proceeding even if it does not possess any of the Securities ordoes not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any rightor remedy accruing upon an Event of Default shall not impair the right orremedy or constitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any otherremedy.  All available remedies arecumulative.

SECTION 6.4.  Waiver of Past Defaults.  The Holders of a majority in principal amountof the outstanding Securities by notice to the Trustee may (a) waive, bytheir consent (including consents obtained in connection with a purchase of, ortender offer or exchange offer for, Securities), an existing Default or Eventof Default and its consequences, except a Default or Event of Default in thepayment of the principal of, or premium, if any, or interest on a Security, and(b) rescind any such acceleration with respect to the Securities and itsconsequences if (1) rescission would not conflict with any judgment ordecree of a court of competent jurisdiction and (2) all existing Events ofDefault, other than the nonpayment of the principal of, premium, if any, andinterest on the Securities that have become due solely by such declaration ofacceleration, have been cured or waived. When a Default or Event of Default is waived, it is

 

 

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deemed cured, but no suchwaiver shall extend to any subsequent or other Default or Event of Default orimpair any consequent right.

 

SECTION6.5.   Control by Majority.  The Holders of amajority in principal amount of the outstanding Securities may direct inwriting the time, method and place of conducting any proceeding for any remedyavailable to the Trustee or of exercising any trust or power conferred on theTrustee. However, the Trustee may refuse to follow any direction that conflictswith law or this Indenture or, subject to Sections 7.1 and 7.2,that the Trustee determines is unduly prejudicial to the rights of any otherHolder or would involve the Trustee in personal liability; *provided, however,* that the Trustee maytake any other action deemed proper by the Trustee that is not inconsistentwith such direction. Prior to taking any action hereunder, the Trustee shall beentitled to indemnification satisfactory to it in its sole discretion againstall losses and expenses caused by taking or not taking such action.

 

SECTION6.6.   Limitation on Suits.  Subject to theprovisions of this Indenture relating to the duties of the Trustee, if an Eventof Default occurs and is continuing, the Trustee will be under no obligation toexercise any of the rights or powers under this Indenture at the request ordirection of any of the Holders unless such Holders have offered to the Trusteereasonable indemnity or security against any loss, liability or expense. Exceptto enforce the right to receive payment of principal, premium, if any, orinterest when due, no Holder may pursue any remedy with respect to thisIndenture or the Securities *unless*:

 

(1)           suchHolder has previously given the Trustee notice that an Event of Default iscontinuing;

 

(2)           Holdersof at least 25% in principal amount of the outstanding Securities haverequested the Trustee to pursue the remedy;

 

(3)           suchHolders have offered the Trustee security or indemnity reasonably satisfactoryto it against any loss, liability or expense;

 

(4)           theTrustee has not complied with such request within 60 days after the receipt ofthe request and the offer of security or indemnity; and

 

(5)           theHolders of a majority in principal amount of the outstanding Securities havenot given the Trustee a direction that, in the opinion of the Trustee, isinconsistent with such request within such 60-day period.

####  

A Holder may not use this Indenture toprejudice the rights of another Holder or to obtain a preference or priorityover another Holder.

 

SECTION6.7.   Rights of Holders to Receive Payment.  Notwithstandingany other provision of this Indenture (including Section 6.6), theright of any Holder to receive payment of principal of, premium, if any, orinterest on the Securities held by such Holder, on or after the respective duedates expressed in the Securities, or to bring suit for the enforcement of anysuch payment on or after such respective dates, shall not be impaired oraffected without the consent of such Holder.

 

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SECTION6.8.   Collection Suit by Trustee.  If an Eventof Default specified in clauses (1) or (2) of Section 6.1occurs and is continuing, the Trustee may recover judgment in its own name andas trustee of an express trust against the Issuers for the whole amount thendue and owing (together with interest on any unpaid interest to the extentlawful) and the amounts provided for under Section 7.7.

 

SECTION6.9.   Trustee May File Proofs of Claim.  TheTrustee may file such proofs of claim and other papers or documents as may benecessary or advisable in order to have the claims of the Trustee (includingany claim for the reasonable compensation, expenses, disbursements and advancesof the Trustee, its agents and counsel) and the Holders allowed in any judicialproceedings relative to the Issuers, their Subsidiaries or the Issuers’ ortheir Subsidiaries’ respective creditors or properties and, unless prohibitedby law or applicable regulations, may be entitled and empowered to participateas a member of any official committee of creditors appointed in such matter andmay vote on behalf of the Holders in any election of a trustee in bankruptcy orother Person performing similar functions, and any Custodian in any suchjudicial proceeding is hereby authorized by each Holder to make payments to theTrustee and, in the event that the Trustee shall consent to the making of suchpayments directly to the Holders, to pay to the Trustee any amount due it forthe reasonable compensation, expenses, disbursements and advances of theTrustee, its agents and its counsel, and any other amounts due the Trusteeunder Section 7.7.

 

SECTION6.10.   Priorities.  If the Trustee collectsany money or property pursuant to this Article VI, it shall pay outthe money or property in the following order:

 

FIRST:  tothe Trustee for amounts due under Section 7.7;

 

SECOND:  toHolders for amounts due and unpaid on the Securities for principal, premium, ifany, and interest, ratably, without preference or priority of any kind,according to the amounts due and payable on the Securities for principal andinterest, respectively; and

 

THIRD:  tothe Issuers.

 

The Trustee may fix a record date and paymentdate for any payment to Holders pursuant to this Section 6.10.

 

SECTION6.11.   Undertaking for Costs.  In any suit forthe enforcement of any right or remedy under this Indenture or in any suitagainst the Trustee for any action taken or omitted by it as Trustee, a courtin its discretion may require the filing by any party litigant in the suit ofan undertaking to pay the costs of the suit, and the court in its discretionmay assess reasonable costs, including reasonable attorneys’ fees and expenses,against any party litigant in the suit, having due regard to the merits andgood faith of the claims or defenses made by the party litigant. This Section6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuantto Section 6.7 or a suit by Holders of more than 10% in outstandingprincipal amount of the Securities.

 

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ARTICLE VII

 

TRUSTEE

 

SECTION7.1.   Duties of Trustee.  (a)  If anEvent of Default has occurred and is continuing, the Trustee will exercise therights and powers vested in it by this Indenture and use the same degree ofcare and skill in their exercise as a prudent Person would exercise or useunder the circumstances in the conduct of such Person’s own affairs.

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### (b)  Except during the continuanceof an Event of Default:

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#### (1)  theTrustee undertakes to perform such duties and only such duties as arespecifically set forth in this Indenture and no implied covenants orobligations shall be read into this Indenture against the Trustee; and

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#### (2)  inthe absence of bad faith on its part, the Trustee may conclusively rely, as tothe truth of the statements and the correctness of the opinions expressedtherein, upon certificates, opinions or orders furnished to the Trustee andconforming to the requirements of this Indenture. However, in the case of anysuch certificates or opinions which by any provisions hereof are specificallyrequired to be furnished to the Trustee, the Trustee shall examine suchcertificates and opinions to determine whether or not they conform to therequirements of this Indenture (but need not confirm or investigate theaccuracy of mathematical calculations or other facts stated therein).

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### (c)  The Trustee may not berelieved from liability for its own negligent action, its own negligent failureto act or its own willful misconduct, except that:

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#### (1)  this paragraph does not limit the effect ofparagraph (b) of this Section 7.1;

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#### (2)  the Trustee shall not be liable for any error ofjudgment made in good faith by a Trust Officer unless it is proved that theTrustee was negligent in ascertaining the pertinent facts; and

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#### (3)  theTrustee shall not be liable with respect to any action it takes or omits totake in good faith in accordance with a direction received by it pursuant to Section 6.5.

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### (a)  The Trustee shall not beliable for interest on any money received by it except as the Trustee may agreein writing with the Issuers.

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### (b)  Money held in trust by theTrustee need not be segregated from other funds except to the extent requiredby law.

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### (c)  No provision of this Indentureshall require the Trustee to expend or risk its own funds or otherwise incurfinancial liability in the performance of any of its duties hereunder or in theexercise of any of its rights or powers, if it shall have reasonable grounds tobelieve that repayment of such funds or adequate indemnity against such risk orliability is not reasonably assured to it.

 

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### (d)  Every provision of thisIndenture relating to the conduct or affecting the liability of or affordingprotection to the Trustee shall be subject to the provisions of this Section7.1 and to the provisions of the TIA.

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### (e)  Unless otherwise specificallyprovided in this Indenture, any demand, request, direction or notice from theIssuers shall be sufficient if signed by an Officer of eachof Escrow LLC, MNA and MNA Finance Corp.

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### (f)  The Trustee shall be under noobligation to exercise any of the rights or powers vested in it by thisIndenture at the request or direction of any of the Holders unless such Holdersshall have offered to the Trustee indemnity or security reasonably satisfactoryto it against the costs, expenses (including reasonable attorneys’ fees andexpenses) and liabilities that might be incurred by it in compliance with suchrequest or direction.

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SECTION 7.2.   Rightsof Trustee.  Subject to Section 7.1:

 

### (a)  The Trustee may conclusivelyrely on any document (whether in its original or facsimile form) reasonablybelieved by it to be genuine and to have been signed or presented by the properperson. The Trustee need not investigate any fact or matter stated in thedocument. The Trustee shall receive and retain financial reports and statementsof the Company as provided herein, but shall have no duty to review or analyzesuch reports or statements to determine compliance under covenants or otherobligations of the Issuers.

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### (b)  Before the Trustee acts or refrainsfrom acting, it may require an Officers’ Certificate and/or an Opinion ofCounsel. The Trustee shall not be liable for any action it takes or omits to takein good faith in reliance on an Officers’ Certificate or Opinion of Counsel.

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### (c)  The Trustee may act throughits attorneys and agents and shall not be responsible for the misconduct ornegligence of any agent appointed with due care.

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### (d)  The Trustee shall not beliable for any action it takes or omits to take in good faith which it believesto be authorized or within its rights or powers, unless the Trustee’s conductconstitutes willful misconduct or negligence.

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### (e)  The Trustee may consult with counselof its selection, and the advice or opinion of counsel with respect to legalmatters relating to this Indenture and the Securities shall be full andcomplete authorization and protection from liability in respect of any actiontaken, omitted or suffered by it hereunder in good faith and in accordance withthe advice or opinion of such counsel.

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### (f)  The Trustee shall not bedeemed to have notice of any Default or Event of Default unless a Trust Officerof the Trustee has actual knowledge thereof or unless written notice of anyevent which is in fact such a default is received by the Trustee at thecorporate trust office of the Trustee specified under Section 11.2,and such notice references the Securities and this Indenture.

 

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### (g)  The rights, privileges,protections, immunities and benefits given to the Trustee, including its rightto be indemnified, are extended to, and shall be enforceable by, the Trustee ineach of its capacities hereunder, and to each agent, custodian and other Personemployed to act hereunder.

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### (h)  The Trustee shall not bedeemed to have knowledge of any fact or matter unless a Trust Officer of theTrustee has actual knowledge of such fact or matter.

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### (i)  Whenever in the administrationof this Indenture the Trustee shall deem it desirable that a matter be provedor established prior to taking, suffering or omitting any action hereunder, theTrustee (unless other evidence be herein specifically prescribed) may request,and in the absence of bad faith or willful misconduct on its part, rely upon anOfficers’ Certificate and an Opinion of Counsel.

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### (j)  The Trustee may request thatthe Issuers deliver an Officers’ Certificate setting forth the names ofindividuals and/or titles of officers authorized at such time to take specifiedactions pursuant to this Indenture, which Officers’ Certificate may be signedby any person specified as so authorized in any such certificate previouslydelivered and not superseded.

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### (k)  In no event shall the Trusteebe responsible or liable for special, indirect, or consequential loss or damageof any kind whatsoever (including, but not limited to, loss of profit)irrespective of whether the Trustee has been advised of the likelihood of suchloss or damage and regardless of the form of action.

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SECTION7.3.   Individual Rights of Trustee.  TheTrustee in its individual or any other capacity may become the owner or pledgeeof Securities and may otherwise deal with the Issuers, the SubsidiaryGuarantors or their Affiliates with the same rights it would have if it werenot Trustee. However, the Trustee must comply with Sections 7.10and 7.11. In addition, the Trustee shall be permitted to engage intransactions with the Issuers; *provided,however,* that if the Trustee acquires any conflicting interest, asdefined in TIA § 310(b), the Trustee must (i) eliminate such conflictwithin 90 days of acquiring such conflicting interest, (ii) apply tothe SEC for permission to continue acting as Trustee or (iii) resign. AnyPaying Agent, Registrar, co-registrar or co-paying agent may do the same withlike rights.

 

SECTION7.4.   Trustee’s Disclaimer.  The Trustee shallnot be responsible for and makes no representation as to the validity oradequacy of this Indenture or the Securities, shall not be accountable for theIssuers’ use of the proceeds from the sale of the Securities, shall not beresponsible for the use or application of any money received by any PayingAgent other than the Trustee or any money paid to the Issuers pursuant to theterms of this Indenture and shall not be responsible for any statement of theIssuers in this Indenture or in any document issued in connection with the saleof the Securities or in the Securities other than the Trustee’s certificate of authentication.

 

SECTION7.5.   Notice of Defaults.  If a Default occursand is continuing and the Trustee has actual knowledge of such Default, theTrustee must mail to each holder notice of the

 

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Default within 90 days after itoccurs. Except in the case of a Default in the payment of principal of,premium, if any, or interest on any Security, the Trustee may withhold noticeif and so long as a committee of Trust Officers of the Trustee in good faith determinesthat withholding notice is in the interests of the holders.

 

SECTION7.6.   Reports by Trustee to Holders.  Aspromptly as practicable after each June 1 following the date of this Indenturebeginning June 1, 2006, and in any event prior to July 1 in each year, theTrustee shall mail to each Holder a brief report dated as of such mail datethat complies with TIA § 313(a) if and to the extent required thereby. TheTrustee also shall comply with TIA § 313(b) and TIA § 313(c).

 

A copy of each report at the time of itsmailing to Holders shall be filed with the SEC and each stock exchange (if any)on which the Securities are listed. The Issuers agree to notify promptly theTrustee whenever the Securities become listed on any stock exchange and of anydelisting thereof and the Trustee shall comply with TIA § 313(d).

 

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SECTION7.7.   Compensation and Indemnity.  The Issuersand each Subsidiary Guarantor, if any, shall be joint and severally liable forpaying to the Trustee from time to time reasonable compensation for itsacceptance of this Indenture and services hereunder as the Issuers and theTrustee shall from time to time agree in writing. The Trustee’s compensationshall not be limited by any law on compensation of a trustee of an expresstrust. The Issuers and each Subsidiary Guarantor, if any, shall be jointly andseverally liable for reimbursing the Trustee upon request for all reasonableout-of-pocket expenses incurred or made by it, including costs of collection,costs of preparing and reviewing reports, certificates and other documents,costs of preparation and mailing of notices to Holders and reasonable fees andexpenses of counsel retained by the Trustee, in addition to the compensationfor its services. Such expenses shall include the reasonable compensation andexpenses, disbursements and advances of the Trustee’s agents, counsel,accountants and experts. The Issuers and each Subsidiary Guarantor (if any),jointly and severally, shall indemnify each of the Trustee, its officers andthe Agent against any and all loss, liability, damages, claims or expense(including reasonable attorneys’ fees and expenses) incurred by it withoutnegligence, bad faith or willful misconduct on its part in connection with theadministration of this trust and the performance of its duties hereunder,including the costs and expenses of enforcing this Indenture (including this Section 7.7)and of defending itself against any claims (whether asserted by any Holder, theIssuers or otherwise). The Trustee shall notify the Issuers promptly of anyclaim for which it may seek indemnity. Failure by the Trustee to so notify theIssuers shall not relieve the Issuers or any Subsidiary Guarantor of itsobligations hereunder, except to the extent that they were prejudiced by suchfailure to notify. The Issuers shall defend the claim and the Trustee shallprovide reasonable cooperation at the Issuers’ expense in the defense. TheTrustee may have separate counsel and the Issuers and the SubsidiaryGuarantors, if any, shall pay the fees and expenses of such counsel; *provided* that the Issuers shall not berequired to pay such fees and expenses if they assume the Trustee’s defense,and, in the reasonable judgment of outside counsel to the Trustee, there is noconflict of interest between the Issuers and the Trustee in connection withsuch defense. Notwithstanding the foregoing, the Issuers and the SubsidiaryGuarantors, if any, need not reimburse any expense or indemnify against anyloss, liability or expense which is finally determined by a court of competentjurisdiction to have been caused by the Trustee’s own willful misconduct,negligence or bad faith.

 

To secure the Issuers’ and the SubsidiaryGuarantors’ payment obligations in this Section 7.7, the Trustee shallhave a lien prior to the Securities on all money or property held or collectedby the Trustee other than money or property held in trust to pay principal ofand interest on particular Securities. Such lien shall survive the satisfactionand discharge of this Indenture. The Trustee’s right to receive payment of anyamounts due under this Section 7.7 shall not be subordinate to anyother liability or Indebtedness of the Issuers or the Subsidiary Guarantors (ifany).

 

The Issuers’ and the Subsidiary Guarantors’payment obligations pursuant to this Section 7.7 shall survive thedischarge of this Indenture. When the Trustee incurs expenses after theoccurrence of a Default specified in clause (7) of Section 6.1with respect to the Issuers the expenses are intended to constitute expenses ofadministration under any Bankruptcy Law.

 

SECTION7.8.   Replacement of Trustee.  The Trustee mayresign at any time by so notifying the Issuers in writing. The Holders of amajority in principal amount of the

 

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Securities may remove theTrustee by so notifying the removed Trustee and the Issuers in writing and mayappoint a successor Trustee with the Issuers’ written consent, which consentwill not be unreasonably withheld. The Issuers shall remove the Trustee if:

 

#### (1)          the Trustee fails to comply with Section 7.10;

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#### (2)          the Trustee is adjudged bankrupt orinsolvent;

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#### (3)          a receiver or other public officer takescharge of the Trustee or its property; or

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#### (4)          the Trustee otherwise becomes incapable ofacting as trustee hereunder.

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If the Trustee resigns or is removed by theIssuers or by the Holders of a majority in principal amount of the Securitiesand such Holders do not reasonably promptly appoint a successor Trustee asdescribed in the preceding paragraph, or if a vacancy exists in the office ofthe Trustee for any reason (the Trustee in such event being referred to hereinas the retiring Trustee), the Issuers shall promptly appoint a successor Trustee.

 

A successor Trustee shall deliver a writtenacceptance of its appointment to the retiring Trustee and to the Issuers. Thereuponthe resignation or removal of the retiring Trustee shall become effective, andthe successor Trustee shall have all the rights, powers and duties of theTrustee under this Indenture. The successor Trustee shall mail a notice of itssuccession to Holders. The retiring Trustee, upon payment of its chargeshereunder, shall promptly transfer all property held by it as Trustee to thesuccessor Trustee, subject to the lien provided for under Section 7.7.

 

If a successor Trustee does not take officewithin 60 days after the retiring Trustee resigns or is removed, theretiring Trustee or the Holders of at least 10% in principal amount of theSecurities may petition, at the Issuers’ expense, any court of competentjurisdiction for the appointment of a successor Trustee.

 

If the Trustee fails to comply with Section 7.10,unless the Trustee’s duty to resign is stayed as provided in TIA § 310(b),any Holder, who has been a bona fide holder of a Security for at least sixmonths, may petition any court of competent jurisdiction for the removal of theTrustee and the appointment of a successor Trustee.

 

Notwithstanding the replacement of the Trusteepursuant to this Section 7.8, the Issuers’ obligations under Section 7.7shall continue for the benefit of the retiring Trustee.

 

SECTION7.9.   Successor Trustee by Merger.  If theTrustee consolidates with, merges or converts into, or transfers all orsubstantially all its corporate trust business or assets to, anothercorporation or banking association, the resulting, surviving or transfereecorporation without any further act shall be the successor Trustee.

 

In case at the time such successor or successorsby merger, conversion or consolidation to the Trustee shall succeed to thetrusts created by this Indenture, any of the Securities shall have beenauthenticated but not delivered, any such successor to the Trustee may adoptthe certificate of authentication of any predecessor trustee, and deliver suchSecurities so

 

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authenticated; and in case at that time anyof the Securities shall not have been authenticated, any successor to theTrustee may authenticate such Securities either in the name of any predecessorhereunder or in the name of the successor to the Trustee; *provided* that the right to adopt thecertificate of authentication of any predecessor Trustee or authenticateSecurities in the name of any predecessor Trustee shall only apply to itssuccessor or successors by merger, consolidation or conversion.

 

SECTION7.10.   Eligibility; Disqualification.  ThisIndenture shall always have a Trustee that satisfies the requirements of TIA§ 310 in every respect. The Trustee shall have a combined capital andsurplus of at least $50 million as set forth in its most recent publishedannual report of condition. The Trustee shall comply with TIA § 310(b); *provided, however,* that there shall beexcluded from the operation of TIA § 310(b)(1) any indenture or indenturesunder which other securities or certificates of interest or participation inother securities of the Issuers are outstanding if the requirements for suchexclusion set forth in TIA § 310(b)(1) are met.

 

SECTION7.11.   Preferential Collection of Claims Against the Issuers.  TheTrustee shall comply with TIA § 311(a), excluding any creditorrelationship listed in TIA § 311(b). A Trustee who has resigned or beenremoved shall be subject to TIA § 311(a) to the extent indicated.

 

SECTION7.12.   Trustee’s Application for Instruction from theIssuers.  Any application by the Trustee for written instructionsfrom the Issuers may, at the option of the Trustee, set forth in writing anyaction proposed to be taken or omitted by the Trustee under this Indenture andthe date on and/or after which such action shall be taken or such omissionshall be effective. The Trustee shall not be liable for any action taken by, oromission of, the Trustee in accordance with a proposal included in suchapplication on or after the date specified in such application (which dateshall not be less than three Business Days after the date any officer of theIssuers actually receives such application, unless any such officer shall haveconsented in writing to any earlier date) unless prior to taking any suchaction (or the effective date in the case of an omission), the Trustee shallhave received written instructions in response to such application specifyingthe action to be taken or omitted.

 

SECTION7.13.   Paying Agents.  The Issuers shall causeeach Paying Agent other than the Trustee to execute and deliver to them and theTrustee an instrument in which such agent shall agree with the Trustee, subjectto the provisions of this Section 7.13:

 

#### (1)  thatit will hold all sums held by it as agent for the payment of principal of, orpremium, if any, or interest on, the Securities (whether such sums have beenpaid to it by the Issuers or by any obligor on the Securities) in trust for thebenefit of Holders of the Securities or the Trustee;

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#### (2)  that it will at any time during the continuance of anyEvent of Default, upon written request from the Trustee, deliver to the Trusteeall sums so held in trust by it together with a full accounting thereof; and

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#### (3)  that it will give the Trustee written notice withinthree Business Days of any failure of the Issuers (or by any obligor on theSecurities) in the payment of any

 

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#### installment ofthe principal of, premium, if any, or interest on, the Securities when the sameshall be due and payable.

 

ARTICLE VIII

 

DISCHARGE OF INDENTURE; DEFEASANCE

 

SECTION 8.1.   Discharge of Liability on Securities;Defeasance.  Subject to Section 8.1(c), when(i)(x) the Issuers deliver to the Trustee all outstanding Securities(other than Securities replaced pursuant to Section 2.9) forcancellation or (y) all outstanding Securities not theretofore deliveredfor cancellation have become due and payable, whether at maturity or uponredemption, or will become due and payable within one year or are to be calledfor redemption within one year under arrangements satisfactory to the Trusteefor the giving of notice of redemption pursuant to Article V hereofand the Issuers or any Subsidiary Guarantor irrevocably deposits or causes tobe deposited with the Trustee as trust funds in trust solely for the benefit ofthe Holders money in U.S. dollars, U.S. Government Obligations, or acombination thereof, in such amounts as will be sufficient withoutconsideration of any reinvestment of interest to pay and discharge the entireindebtedness on such Securities not theretofore delivered to the Trustee forcancellation for principal, premium, if any, and accrued interest to the dateof maturity or redemption; (ii) no Default or Event of Default shall haveoccurred and be continuing on the date of such deposit or shall occur as aresult of such deposit (other than a default resulting from borrowing of fundsto be applied to such deposit and the grant of any Lien securing suchborrowing) and such deposit will not result in a breach or violation of, orconstitute a default under, the Senior Secured Credit Agreement or any othermaterial instrument to which the Issuers or any Significant Subsidiary is aparty or by which the Issuers or any Significant Subsidiary are bound;(iii) the Issuers or any Subsidiary Guarantor have paid or caused to bepaid all sums payable under this Indenture and the Securities; and(iv) the Issuers have delivered irrevocable written instructions to theTrustee under this Indenture to apply the deposited money toward the payment ofsuch Securities at maturity or the Redemption Date, as the case may be, thenupon demand of the Issuers (accompanied by an Officers’ Certificate and anOpinion of Counsel stating that all conditions precedent specified hereinrelating to the satisfaction and discharge of this Indenture have been compliedwith) this Indenture shall cease to be of further effect with respect to the Securitiesand the Trustee shall acknowledge satisfaction and discharge of this Indenture,at the cost and expense of the Issuers.

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### (b)  Subject to Sections 8.1(c)and 8.2, the Issuers and the Subsidiary Guarantors at any time mayterminate (i) all their obligations under the Securities and this Indenture (“legaldefeasance option”), and after giving effect to such legal defeasance, anyomission to comply with such obligations shall no longer constitute a Defaultor Event of Default or (ii) their obligations under Sections 3.2, 3.3,3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10,3.11, 3.12, 3.13, 3.17, 3.21 and 4.1(3),and the Issuers may omit to comply with and shall have no liability in respectof any term, condition or limitation set forth in any such covenant, whetherdirectly or indirectly, by reason of

 

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### any reference elsewhere herein to any suchcovenant or by reason of any reference in any such covenant to any otherprovision herein or in any other document and such omission to comply with suchcovenants shall no longer constitute a Default or an Event of Default under Sections6.1(3) (only with respect to Section 4.1(3)), 6.1(4) (onlywith respect to such covenants), 6.1(5) (only with respect to suchcovenants), 6.1(6), 6.1(7) (with respect only to SignificantSubsidiaries), 6.1(8) or 6.1(9), and the events specified in suchSections shall no longer constitute an Event of Default (clause (ii) beingreferred to as the “covenant defeasance option”), but except as specifiedabove, the remainder of this Indenture and the Securities shall be unaffectedthereby. The Issuers may exercise their legal defeasance option notwithstandingtheir prior exercise of its covenant defeasance option.

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### If the Issuers exercise their legaldefeasance option, payment of the Securities may not be accelerated because ofan Event of Default and the Subsidiary Guarantees in effect at such time shallterminate. If the Issuers exercise their covenant defeasance option, payment ofthe Securities may not be accelerated because of an Event of Default specifiedunder Sections 6.1(3) (only with respect to Section 4.1(3)), 6.1(4)(only with respect to such covenants), 6.1(5) (only with respect to suchcovenants), 6.1(6), 6.1(7) (with respect only to SignificantSubsidiaries), 6.1(8) or 6.1(9).

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### Upon satisfaction of the conditions set forthherein and upon request of the Issuers, the Trustee shall acknowledge inwriting the discharge of those obligations that the Issuers terminate.

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### (c)  Notwithstanding the provisions of Sections 8.1(a)and (b), the Issuers’ obligations under Sections 2.2, 2.3,2.4, 2.5, 2.6, 2.9, 2.10, 2.11, 2.12,3.1, 3.14, 3.15, 3.16, 3.18, 3.20, 3.23,6.7, 7.7 and 7.8 and in this Article VIIIshall survive until the Securities have been paid in full. After the Securitieshave been paid in full, the Issuers’ obligations under Sections 7.7,8.5 and 8.6 shall survive such satisfaction and discharge ordefeasance.

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SECTION8.2.   Conditions to Defeasance.  The Issuersmay exercise their legal defeasance option or their covenant defeasance optiononly if:

 

(1)                                  theIssuers irrevocably deposit in trust with the Trustee for the benefit of theHolders money in U.S. dollars or U.S. Government Obligations or a combinationthereof, the principal of and interest (without reinvestment) on which will besufficient, or a combination thereof sufficient, for the payment of principalof, premium, if any, and interest on the Securities to maturity or redemption,as the case may be;

 

(2)                                  theIssuers deliver to the Trustee a certificate from a nationally recognized firmof independent accountants, investment bank or appraisal firm expressing theiropinion that the payments of principal and interest when due and withoutreinvestment of the deposited U.S. Government Obligations plus any depositedmoney without investment will provide cash at such times and in such amounts aswill be sufficient to pay

 

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principal andinterest when due on all the Securities to maturity or redemption, as the casemay be;

 

(3)                                  noDefault or Event of Default shall have occurred and be continuing on the dateof such deposit (other than a Default or Event of Default resulting from theborrowing of funds to be applied to such deposit and the grant of any Liensecuring such borrowings) or insofar as Events of Default specified in Section6.1(7) are concerned, at any time in the period ending on the 91st dayafter such date of deposit;

 

(4)                                  suchlegal defeasance or covenant defeasance shall not result in a breach orviolation of, or constitute a Default under, this Indenture or any othermaterial agreement or instrument to which the Issuers or any of theirSignificant Subsidiaries is a party or by which the Issuers or any of theirSignificant Subsidiaries is bound;

 

(5)                                  theIssuers shall have delivered to the Trustee an Opinion of Counsel to the effectthat (A) the Securities and (B) assuming no intervening bankruptcy of theIssuers between the date of deposit and the 91st day following the deposit andthat no Holder of the Securities is an insider of the Issuers, after the 91stday following the deposit, the trust funds will not be subject to the effect ofany applicable bankruptcy, insolvency, reorganization or similar laws affectingcreditors’ rights generally;

 

(6)                                  theIssuers deliver to the Trustee an Opinion of Counsel to the effect that thetrust resulting from the deposit does not constitute, and does not qualify as,a regulated investment company under the Investment Company Act of 1940;

 

(7)                                  inthe case of the legal defeasance option, the Issuers shall have delivered tothe Trustee an Opinion of Counsel (subject to customary assumptions andexclusions) in the United States stating that (i) the Issuers have receivedfrom, or there has been published by, the Internal Revenue Service a ruling, or(ii) since the date of this Indenture there has been a change in the applicablefederal income tax law, in either case to the effect that, and based thereonsuch Opinion of Counsel shall confirm that, the Holders will not recognizeincome, gain or loss for federal income tax purposes as a result of suchdeposit and legal defeasance and will be subject to federal income tax on thesame amount, in the same manner and at the same times as would have been thecase if such deposit and legal defeasance had not occurred;

 

(8)                                  inthe case of the covenant defeasance option, the Issuers shall have delivered tothe Trustee an Opinion of Counsel (subject to customary assumptions andexclusions) in the United States to the effect that the Holders will notrecognize income, gain or loss for federal income tax purposes as a result ofsuch deposit and covenant defeasance and will be

 

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subject to federal income tax on the same amount, in the same mannerand at the same times as would have been the case if such deposit and covenantdefeasance had not occurred; and

 

(9)                                  theIssuers deliver to the Trustee an Officers’ Certificate and an Opinion ofCounsel, each stating that all conditions precedent to either the legaldefeasance or covenant defeasance, as the case may be, as contemplated by this ArticleVIII have been complied with.

 

SECTION8.3.   Application of Trust Money.  The Trusteeshall hold in trust all money or U.S. Government Obligations (includingproceeds thereof) deposited with it pursuant to this Article VIII. Itshall apply the deposited money and the money from U.S. Government Obligationsthrough the Paying Agent and in accordance with this Indenture and theSecurities to the Holders of the Securities of all sums due in respect of thepayment of principal of, premium, if any, and accrued interest on theSecurities.

 

SECTION8.4.   Repayment to the Issuers.  The Trusteeand the Paying Agent shall promptly turn over to the Issuers upon request anyexcess money, U.S. Government Obligations or securities held by them uponpayment of all the obligations under this Indenture.

 

Subject to any applicable abandoned propertylaw, the Trustee and the Paying Agent shall pay to the Issuers upon request anymoney held by them for the payment of principal of or premium, if any, orinterest on the Securities that remains unclaimed by the Holders thereof fortwo years, and, thereafter, Holders entitled to the money must look to theIssuers for payment as unsecured general creditors.

 

SECTION8.5.   Indemnity for U.S. Government Obligations.  TheIssuers shall pay and shall indemnify the Trustee against any tax, fee or othercharge imposed on or assessed against deposited U.S. Government Obligations orthe principal and interest received on such U.S. Government Obligations otherthan any such tax, fee or other charge that is for the account of the Holder ofthe Securities.

 

SECTION8.6.   Reinstatement.  If the Trustee or PayingAgent is unable to apply any money or U.S. Government Obligations in accordancewith this Article VIII by reason of any legal proceeding or by reason ofany order or judgment of any court or governmental authority enjoining,restraining or otherwise prohibiting such application, the obligations of theIssuers and each Subsidiary Guarantor, if any, under this Indenture and theSecurities shall be revived and reinstated as though no deposit had occurredpursuant to this Article VIII until such time as the Trustee or PayingAgent is permitted to apply all such money or U.S. Government Obligations inaccordance with this Article VIII; *provided,however,* that, if the Issuers or the Subsidiary Guarantors have madeany payment of principal, premium, if any, interest on or principal of anySecurities because of the reinstatement of its obligations, the Issuers orSubsidiary Guarantors, as the case may be, shall be subrogated to the rights ofthe Holders of such Securities to receive such payment from the money or U.S.Government Obligations held by the Trustee or Paying Agent.

 

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The Trustee’s rights under this ArticleVIII shall survive termination of this Indenture.

 

ARTICLE IX

 

AMENDMENTS

 

SECTION9.1.   Without Consent of Holders.  TheIssuers, the Subsidiary Guarantors and the Trustee may amend or supplement thisIndenture, the Securities or any Subsidiary Guarantees without the consent ofany Holder to:

 

(1)                                  cureany ambiguity, omission, defect or inconsistency;

 

(2)                                  providefor the assumption by a successor Person of the obligations of the Issuers orany Subsidiary Guarantor under this Indenture;

 

(3)                                  providefor uncertificated Securities in addition to or in place of certificatedSecurities (*provided* that theuncertificated Securities are issued in registered form for purposes of Section163(f) of the Code, or in a manner such that the uncertificated Securities aredescribed in Section 163(f) (2) (B) of the Code);

 

(4)                                  addGuarantees with respect to the Securities or release a Subsidiary Guarantorupon its designation as an Unrestricted Subsidiary; *provided, however,*that the designation is in accordancewith the applicable provisions of this Indenture;

 

(5)                                  securethe Securities;

 

(6)                                  addto the covenants of the Issuers and the Restricted Subsidiaries for the benefitof the Holders or surrender any right or power conferred upon the Issuers orany Restricted Subsidiary;

 

(7)                                  makeany change that does not adversely affect the rights of any Holder;

 

(8)                                  complywith any requirement of the SEC in connection with the qualification of thisIndenture under the TIA;

 

(9)                                  releasea Subsidiary Guarantor from its obligations under its Subsidiary Guarantee orthis Indenture in accordance with the applicable provisions of this Indenture;

 

(10)                            providefor the appointment of a successor trustee; *provided* thatthe successor trustee is otherwise qualified and eligible to act as such underthe terms of this Indenture;

 

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(11)                            providefor the issuance of Exchange Securities which shall have terms substantiallyidentical in all respects to the Initial Securities (except that the transferrestrictions contained in the Initial Securities or Additional Securities, asthe case may be, shall be modified or eliminated as appropriate) and whichshall be treated, together with any outstanding Initial Securities orAdditional Securities, as a single class of securities;

 

(12)                            makeany change necessary to conform this Indenture to the description of theSecurities in the Offering Memorandum; or

 

(13)                            providefor the issuance of Additional Securities in accordance with the provisions ofthis Indenture.

 

It shall notbe necessary for the consent of the Holders under this Section 9.1 toapprove the particular form of any proposed amendment, supplement or waiver,but it shall be sufficient if such consent approves the substance thereof. Aconsent to any amendment, supplement or waiver under this Indenture by anyHolder of Securities given in connection with a tender or exchange of suchHolder’s Securities will not be rendered invalid by such tender or exchange.

 

Afteran amendment or supplement under this Section becomes effective, the Issuersshall mail to Holders a notice briefly describing such amendment or supplement.The failure to give such notice to all Holders, or any defect therein, shallnot impair or affect the validity of an amendment or supplement under this Section9.1.

 

SECTION9.2.   With Consent of Holders.  The Issuers,the Subsidiary Guarantors and the Trustee may amend or supplement thisIndenture, the Securities or any Subsidiary Guarantee with the consent of theHolders of at least a majority in principal amount of the Securities thenoutstanding (including consents obtained in connection with a purchase of, ortender offer or exchange offer for, Securities). Any past default or compliancewith any provision of this Indenture, the Securities or any SubsidiaryGuarantee (other than a Default or an Event of Default in the payment of theprincipal of, or premium, if any, or interest on a Security (except inaccordance with Section 6.4)) may be waived with the consent of theHolders of a majority in principal amount of the Securities then outstanding(including consents obtained in connection with a purchase of, or tender offeror exchange offer for, Securities). However, without the consent of each Holderaffected, an amendment, supplement or waiver may not (with respect to anySecurities held by a non-consenting Holder of Securities):

 

#### (1)  reducethe amount of Securities whose Holders must consent to an amendment;

####  

#### (2)  reduce the stated rate of or extend thestated time for payment of interest on any Security;

####  

#### (3)  reduce the principal of or extend the StatedMaturity of any Security;

 

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#### (4)  reduce the premium payable upon theredemption of any Security or change the time at which any Security may beredeemed pursuant to Article V, whether through an amendment or waiverof provisions in the covenants, definitions or otherwise;

####  

#### (5)  makeany Security payable in money other than that stated in the Security;

####  

#### (6)  impairthe right of any Holder to receive payment of principal, premium, if any, andinterest on such Holder’s Securities on or after the due dates therefor or toinstitute suit for the enforcement of any payment on or with respect to suchHolder’s Securities;

####  

#### (7)  makeany change in the amendment provisions which require each Holder’s consent orto the waiver provisions; or

####  

#### (8)  modifythe Subsidiary Guarantees in any manner adverse to the Holders of theSecurities.

####  

It shall not be necessary for the consent ofthe Holders under this Section 9.2 to approve the particular form of anyproposed amendment, supplement or waiver, but it shall be sufficient if suchconsent approves the substance thereof. A consent to any amendment, supplementor waiver under this Indenture by any Holder of the Securities given inconnection with a tender or exchange of such Holder’s Securities will not berendered invalid by such tender or exchange.

 

After an amendment or supplement under thisSection becomes effective, the Issuers shall mail to Holders a notice brieflydescribing such amendment or supplement. The failure to give such notice to allHolders, or any defect therein, shall not impair or affect the validity of anamendment or supplement under this Section 9.2.

 

SECTION9.3.   Compliance with Trust Indenture Act.  Everyamendment or supplement to this Indenture or the Securities shall comply withthe TIA as then in effect.

 

SECTION9.4.   Revocation and Effect of Consents and Waivers.  Aconsent to an amendment, supplement or a waiver by a Holder of a Security shallbind the Holder and every subsequent Holder of that Security or portion of theSecurity that evidences the same debt as the consenting Holder’s Security, evenif notation of the consent or waiver is not made on the Security. Any suchHolder or subsequent Holder may revoke the consent or waiver as to such Holder’sSecurity or portion of the Security if the Trustee receives the written noticeof revocation before the date the amendment, supplement or waiver becomeseffective or otherwise in accordance with any related solicitation documents. Afteran amendment, supplement or waiver becomes effective, it shall bind everyHolder unless it makes a change described in any of clauses (1) through(8) of Section 9.2, in which case the amendment, supplement, waiveror other action shall bind each Holder who has consented to it and every subsequentHolder that evidences the same debt as the consenting Holder’s Securities. Anamendment, supplement or waiver shall become effective upon receipt by theTrustee of the requisite number of written consents under Section 9.1or 9.2 as applicable.

 

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The Issuers may, but shall not be obligatedto, fix a record date for the purpose of determining the Holders entitled togive their consent or take any other action described above or required orpermitted to be taken pursuant to this Indenture. If a record date is fixed,then notwithstanding the immediately preceding paragraph, those Persons whowere Holders at such record date (or their duly designated proxies), and onlythose Persons, shall be entitled to give such consent or to revoke any consentpreviously given or to take any such action, whether or not such Personscontinue to be Holders after such record date. No such consent shall becomevalid or effective more than 120 days after such record date.

 

SECTION9.5.   Notation on or Exchange of Securities.  Ifan amendment, supplement or waiver changes the terms of a Security, the Trusteemay require the Holder of the Security to deliver it to the Trustee. TheTrustee may place an appropriate notation on the Security regarding the changedterms and return it to the Holder. Alternatively, if the Issuers or the Trusteeso determine, the Issuers in exchange for the Security shall issue and theTrustee shall authenticate a new Security that reflects the changed terms. Failureto make the appropriate notation or to issue a new Security shall not affectthe validity of such amendment.

 

SECTION9.6.   Trustee To Sign Amendments.  The Trusteeshall sign any amendment, supplement or waiver authorized pursuant to this Article IXif the amendment, supplement or waiver does not adversely affect the rights,duties, liabilities or immunities of the Trustee. If it does, the Trustee maybut need not sign it. In signing such amendment, supplement or waiver theTrustee shall be entitled to receive indemnity reasonably satisfactory to itand shall be provided with, and (subject to Sections 7.1 and 7.2)shall be fully protected in relying upon an Officers’ Certificate and anOpinion of Counsel stating that such amendment, supplement or waiver isauthorized or permitted by this Indenture and that such amendment, supplementor waiver is the legal, valid and binding obligation of the Issuers and anySubsidiary Guarantors, enforceable against them in accordance with its terms,subject to customary exceptions, and complies with the provisions hereof(including Section 9.3).

 

ARTICLE X

 

SECURITIES GUARANTEE

 

SECTION10.1.   Subsidiary Guarantee.  Each SubsidiaryGuarantor hereby fully, unconditionally and irrevocably guarantees, as primaryobligor and not merely as surety, jointly and severally with each otherSubsidiary Guarantor, to each Holder of the Securities and the Trustee the fulland punctual payment when due, whether at maturity, by acceleration, byredemption or otherwise, of the principal of, premium, if any, and interest onthe Securities and all other monetary obligations of the Issuers under thisIndenture (including interest accruing after the filing of any petition inbankruptcy, or the commencement of any insolvency, reorganization or likeproceeding, relating to the Issuers or any Subsidiary Guarantor whether or nota claim for post-filing or post-petition interest is allowed in suchproceeding) (all the foregoing being hereinafter collectively called the “GuarantorObligations”). Each Subsidiary Guarantor further agrees (to the extentpermitted by law) that the Guarantor Obligations may be extended or renewed, inwhole or in part, without notice or further assent from it, and that it will

 

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remain bound under this Article Xnotwithstanding any extension or renewal of any Guarantor Obligation.

 

Each Subsidiary Guarantor waives presentationto, demand of payment from and protest to the Issuers of any of the GuarantorObligations and also waives notice of protest for nonpayment. Each SubsidiaryGuarantor waives notice of any default under the Securities or the GuarantorObligations.

 

Each Subsidiary Guarantor further agrees thatits Subsidiary Guarantee herein constitutes a Guarantee of payment when due(and not a Guarantee of collection) and waives any right to require that anyresort be had by any Holder to any security held for payment of the GuarantorObligations.

 

Except as set forth under Section 10.2,the obligations of each Subsidiary Guarantor hereunder shall not be subject toany reduction, limitation, impairment or termination for any reason (other thanpayment of the Guarantor Obligations in full), including any claim of waiver,release, surrender, alteration or compromise, and shall not be subject to anydefense of setoff, counterclaim, recoupment or termination whatsoever or byreason of the invalidity, illegality or unenforceability of the GuarantorObligations or otherwise. Without limiting the generality of the foregoing, theGuarantor Obligations of each Subsidiary Guarantor herein shall not bedischarged or impaired or otherwise affected by (a) the failure of any Holderto assert any claim or demand or to enforce any right or remedy against theIssuers or any other person under this Indenture, the Securities or any otheragreement or otherwise; (b) any extension or renewal of any thereof; (c) anyrescission, waiver, amendment or modification of any of the terms or provisionsof this Indenture, the Securities or any other agreement; (d) the release ofany security held by any Holder or the Trustee for the Guarantor Obligations orany of them; (e) the failure of any Holder to exercise any right or remedyagainst any other Subsidiary Guarantor, or (f) any change in the ownership ofthe Issuers; (g) by any default, failure or delay, willful or otherwise,in the performance of the Guarantor Obligations, or (h) by any other actor thing or omission or delay to do any other act or thing which may or mightin any manner or to any extent vary the risk of any Subsidiary Guarantor orwould otherwise operate as a discharge of such Subsidiary Guarantor as a matterof law or equity.

 

Subject to the provisions of Section 3.13,each Subsidiary Guarantor agrees that its Subsidiary Guarantee herein shallremain in full force and effect until payment in full of all the GuarantorObligations or such Subsidiary Guarantor is released from its SubsidiaryGuarantee pursuant to Section 10.2. Each Subsidiary Guarantorfurther agrees that its Subsidiary Guarantee herein shall continue to beeffective or be reinstated, as the case may be, if at any time payment, or anypart thereof, of principal of, premium, if any, or interest on any of theGuarantor Obligations is rescinded or must otherwise be restored by any Holderupon the bankruptcy or reorganization of the Issuers or otherwise.

 

In furtherance of the foregoing and not inlimitation of any other right which any Holder has at law or in equity againstany Subsidiary Guarantor by virtue hereof, upon the failure of the Issuers topay any of the Guarantor Obligations when and as the same shall become due,whether at maturity, by acceleration, by redemption or otherwise, eachSubsidiary Guarantor hereby promises to and will, upon receipt of writtendemand by the Trustee, forthwith pay, or

 

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cause to be paid, in cash, to the Holders anamount equal to the sum of (i) the unpaid amount of such Guarantor Obligationsthen due and owing and (ii) accrued and unpaid interest on such GuarantorObligations then due and owing (but only to the extent not prohibited by law)(including interest accruing after the filing of any petition in bankruptcy orthe commencement of any insolvency, reorganization or like proceeding relatingto the Issuers or any Subsidiary Guarantor whether or not a claim forpost-filing or post-petition interest is allowed in such proceeding).

 

Each Subsidiary Guarantor further agreesthat, as between such Subsidiary Guarantor, on the one hand, and the Holders,on the other hand, (x) the maturity of the Guarantor Obligations guaranteedhereby may be accelerated as provided in this Indenture for the purposes of itsSubsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibitionpreventing such acceleration in respect of the Guarantor Obligations guaranteedhereby and (y) in the event of any such declaration of acceleration of suchGuarantor Obligations, such Guarantor Obligations (whether or not due andpayable) shall forthwith become due and payable by the Subsidiary Guarantor forthe purposes of this Subsidiary Guarantee.

 

Each Subsidiary Guarantor also agrees to payany and all costs and expenses (including reasonable attorneys’ fees andexpenses) incurred by the Trustee or the Holders in enforcing any rights underthis Section.

 

SECTION10.2.   Limitation on Liability; Termination, Release andDischarge.  Any term or provision of this Indenture to thecontrary notwithstanding, the obligations of each Subsidiary Guarantorhereunder will be limited to the maximum amount as will, after giving effect toall other contingent and fixed liabilities of such Subsidiary Guarantor(including any guarantees under the Senior Secured Credit Agreement) and aftergiving effect to any collections from or payments made by or on behalf of anyother Subsidiary Guarantor in respect of the obligations of such otherSubsidiary Guarantor under its Subsidiary Guarantee or pursuant to itscontribution obligations under this Indenture, result in the obligations ofsuch Subsidiary Guarantor under its Subsidiary Guarantee not constituting afraudulent conveyance or fraudulent transfer under federal or state law and nototherwise being void or voidable under any similar laws affecting the rights ofcreditors generally.

 

### (b)  Upon the sale or dispositionof a Subsidiary Guarantor (by merger, consolidation, the sale of its CapitalStock or the sale of all or substantially all of its assets (other than bylease)), and whether or not the Subsidiary Guarantor is the survivingcorporation in such transaction, to a Person which is not the Issuers or aRestricted Subsidiary of the Issuers, such Subsidiary Guarantor will beautomatically released from all its obligations under this Indenture and itsSubsidiary Guarantee and the Registration Rights Agreement and such SubsidiaryGuarantee will terminate; *provided, however,*that (x) the sale or other disposition is in compliance with this Indenture,including Sections 3.5 and 4.1 and (y) all the obligations ofsuch Subsidiary Guarantor under all Credit Facilities and related documentationand any other agreements relating to any other Indebtedness of the Issuers ortheir Restricted Subsidiaries terminate upon consummation of such transaction.

 

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### (c)  Each Subsidiary Guarantorshall be deemed released from all its obligations under this Indenture and theRegistration Rights Agreement and such Subsidiary Guarantee shall terminate (x)upon the legal defeasance of the Securities pursuant to the provisions of ArticleVIII hereof or (y) in accordance with Section 3.13 of thisIndenture.

###  

### (d)  Each Subsidiary Guarantorshall be released from its obligations under this Indenture, its SubsidiaryGuarantee and the Registration Rights Agreement if the Issuers designate suchSubsidiary Guarantor as an Unrestricted Subsidiary and such designationcomplies with the other applicable provisions of this Indenture.

###  

### (e)  Each Subsidiary Guarantorshall be released from its obligations under this Indenture, its SubsidiaryGuarantee and the Registration Rights Agreement upon satisfaction and dischargeof this Indenture pursuant to Section 8.1(a).

###  

### (f)  The Trustee shall promptlyexecute and deliver an appropriate instrument prepared and delivered to it atthe expense of the Issuers evidencing any such release upon receipt of arequest by the Issuers accompanied by an Officers’ Certificate certifying as tothe compliance with this Section 10.2.

###  

SECTION10.3.   Right of Contribution.  Each SubsidiaryGuarantor hereby agrees that to the extent that any Subsidiary Guarantor shallhave paid more than its proportionate share of any payment made on theobligations under the Subsidiary Guarantees, such Subsidiary Guarantor shall beentitled to seek and receive contribution from and against the Issuers, or anyother Subsidiary Guarantor who has not paid its proportionate share of suchpayment. The provisions of this Section 10.3 shall in no respectlimit the obligations and liabilities of each Subsidiary Guarantor to theTrustee and the Holders and each Subsidiary Guarantor shall remain liable tothe Trustee and the Holders for the full amount guaranteed by such SubsidiaryGuarantor hereunder.

 

SECTION10.4.   No Subrogation.  Notwithstanding anypayment or payments made by each Subsidiary Guarantor hereunder, no SubsidiaryGuarantor shall be entitled to be subrogated to any of the rights of theTrustee or any Holder against the Issuers or any other Subsidiary Guarantor orany collateral security or guarantee or right of offset held by the Trustee orany Holder for the payment of the Guarantor Obligations, nor shall anySubsidiary Guarantor seek or be entitled to seek any contribution orreimbursement from the Issuers or any other Subsidiary Guarantor in respect ofpayments made by such Subsidiary Guarantor hereunder, until all amounts owingto the Trustee and the Holders by the Issuers on account of the GuarantorObligations are paid in full. If any amount shall be paid to any SubsidiaryGuarantor on account of such subrogation rights at any time when all of theGuarantor Obligations shall not have been paid in full, such amount shall beheld by such Subsidiary Guarantor in trust for the Trustee and the Holders,segregated from other funds of such Subsidiary Guarantor, and shall, forthwithupon receipt by such Subsidiary Guarantor, be turned over to the Trustee in theexact form received by such Subsidiary Guarantor (duly indorsed by suchSubsidiary Guarantor to the Trustee, if required), to be applied against theGuarantor Obligations.

 

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ARTICLE XI

 

MISCELLANEOUS

 

SECTION11.1.   Trust Indenture Act Controls.  If andto the extent that any provision of this Indenture limits, qualifies orconflicts with another provision which is required to be included in thisIndenture by the TIA, the provision required by the TIA shall control. EachSubsidiary Guarantor in addition to performing its obligations under itsSubsidiary Guarantee shall perform such other obligations as may be imposedupon it with respect to this Indenture under the TIA.

 

SECTION11.2.   Notices.  Any notice or communicationshall be in writing and delivered in person, sent by facsimile, delivered bycommercial courier service or mailed by first-class mail, postage prepaid,addressed as follows:

 
| if to the Issuers or any Subsidiary Guarantor:                                                                                                                                                                                                                     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                               |
| Mirant North America Escrow, LLC  Mirant North America, LLC  MNA Finance Corp.  c/o Mirant Corp.  1155 Perimeter Center West, Suite 100  Atlanta, GA 30338  Attn: J. William Holden III           Steven B. Nickerson |
|                                                                                                                                                                                                                                                               |
| if to the Registrar or Paying Agent:                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                               |
| Deutsche Bank Trust Company Americas  60 Wall Street – 27th Floor  New York, New York 10005  Attn: Irina Golovashchuk                                                                                                                                         |
|                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                               |
| if to the Trustee:                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                               |
| Law Debenture Trust Company of New York  767 Third Avenue, 31st Floor  New York, NY 10017  Attn: Boris Treyger                                                                                                                                                     |

 

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| with copies to:                                                                               |
|-----------------------------------------------------------------------------------------------|
|                                                                                          |
| Moses & Singer LLP  405 Lexington Avenue  New York, NY 10174-1299  Attn: Alan Kolod, Esq. |

 

The Issuers or the Trustee by written noticeto the other may designate additional or different addresses for subsequentnotices or communications.

 

Any notice or communication to the Issuers orthe Subsidiary Guarantors shall be deemed to have been given or made as of thedate so delivered if personally delivered; when receipt is acknowledged, iftelecopied; and five calendar days after mailing if sent by registered orcertified mail, postage prepaid (except that a notice of change of addressshall not be deemed to have been given until actually received by theaddressee).

 

Any notice or communication mailed to aregistered Holder shall be mailed to the Holder at the Holder’s address as itappears on the registration books of the Registrar and shall be sufficientlygiven if so mailed within the time prescribed.

 

Failure to mail a notice or communication toa Holder or any defect in it shall not affect its sufficiency with respect toother Holders. If a notice or communication is mailed in the manner providedabove, it is duly given, whether or not the addressee receives it, except thatnotices to the Trustee shall be effective only upon receipt.

 

SECTION11.3.   Communication by Holders with other Holders.  Holdersmay communicate pursuant to TIA § 312(b) with other Holders with respectto their rights under this Indenture or the Securities. The Issuers, theTrustee, the Registrar and anyone else shall have the protection of TIA §312(c).

 

SECTION11.4.   Certificate and Opinion as to Conditions Precedent.  Uponany request or application by the Issuers to the Trustee to take or refrainfrom taking any action under this Indenture, the Issuers shall furnish to theTrustee:

 

#### (1)  anOfficers’ Certificate in form and substance reasonably satisfactory to the Trusteestating that, in the opinion of the signers, all conditions precedent, if any,provided for in this Indenture relating to the proposed action have beencomplied with; and

####  

#### (2)  anOpinion of Counsel in form and substance reasonably satisfactory to the Trusteestating that, in the opinion of such counsel, all such conditions precedent, ifany, provided for in this Indenture relating to the proposed action have beencomplied with.

####  

SECTION11.5.   Statements Required in Certificate or Opinion.  Eachcertificate or opinion with respect to compliance with a covenant or conditionprovided for in this Indenture (other than pursuant to Section 3.18)shall include:

 

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#### (1)  astatement that the individual making such certificate or opinion has read suchcovenant or condition;

####  

#### (2)  abrief statement as to the nature and scope of the examination or investigationupon which the statements or opinions contained in such certificate or opinionare based;

####  

#### (3)  astatement that, in the opinion of such individual, he has made such examinationor investigation as is necessary to enable him to express an informed opinionas to whether or not such covenant or condition has been complied with; and

####  

#### (4)  astatement as to whether or not, in the opinion of such individual, suchcovenant or condition has been complied with.

####  

In giving such Opinion of Counsel, counselmay rely as to factual matters on an Officers’ Certificate or on certificatesof public officials.

 

SECTION11.6.   When Securities Disregarded.  Indetermining whether the Holders of the required aggregate principal amount ofSecurities have concurred in any direction, waiver or consent, Securities ownedby the Issuers, any Subsidiary Guarantor or any Affiliate of them shall bedisregarded and deemed not to be outstanding, except that, for the purpose ofdetermining whether the Trustee shall be protected in relying on any suchdirection, waiver or consent, only Securities which the Trustee actually knowsare so owned shall be so disregarded. Also, subject to the foregoing, onlySecurities outstanding at the time shall be considered in any suchdetermination.

 

SECTION11.7.   Rules by Trustee, Paying Agent and Registrar.  TheTrustee may make reasonable rules for action by, or at meetings of, Holders. TheRegistrar and the Paying Agent may make reasonable rules for their functions.

 

SECTION11.8.   Legal Holidays.  A “Legal Holiday”is a Saturday, a Sunday or other day on which commercial banking institutionsare authorized or required to be closed in New York, New York. If a paymentdate is a Legal Holiday, payment shall be made on the next succeeding day thatis not a Legal Holiday, and no interest shall accrue for the interveningperiod. If a regular record date is a Legal Holiday, the record date shall notbe affected.

 

SECTION11.9.   Governing Law.  THIS INDENTURE AND THESECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OFTHE STATE OF NEW YORK. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THEJURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDINGARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE SUBSIDIARYGUARANTEES.

 

SECTION11.10.   No Recourse Against Others.  Nodirector, officer, employee, incorporator or stockholder of the Issuers or aSubsidiary Guarantor, as such, shall have any liability for any obligations ofthe Issuers or such Subsidiary Guarantor under the Securities, this Indentureor a Subsidiary Guarantee or for any claim based on, in respect of, or byreason of, such obligations or their creation. Each Holder of Securities byaccepting a Security waives and releases all such liability to the extentpermitted by applicable law. The waiver and release are

 

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part of the consideration forissuance of the Securities. Such waiver may not be effective to waiveliabilities under the federal securities laws, and it is the view of the SECthat such a waiver is against public policy.

 

SECTION11.11.   Successors.  All agreements of each ofthe Issuers and each Subsidiary Guarantor in this Indenture and the Securitiesshall bind their respective successors. All agreements of the Trustee in thisIndenture shall bind its successors.

 

SECTION 11.12.   MultipleOriginals.  The parties may sign any number of copies of thisIndenture. Each signed copy shall be an original, but all of them togetherrepresent the same agreement. One signed copy is enough to prove thisIndenture.

 

SECTION11.13.   Qualification of Indenture.  TheIssuers shall qualify this Indenture under the TIA in accordance with the termsand conditions of the Registration Rights Agreement. The Trustee shall beentitled to receive from the Issuers any such Officers’ Certificates, Opinionsof Counsel or other documentation as it may reasonably request in connectionwith any such qualification of this Indenture under the TIA.

 

SECTION11.14.   Table of Contents; Headings.  Thetable of contents, cross-reference sheet and headings of the Articles andSections of this Indenture have been inserted for convenience of referenceonly, are not intended to be considered a part hereof and shall not modify orrestrict any of the terms or provisions hereof.

 

SECTION11.15.   Force Majeure.  In no event shall theTrustee be responsible or liable for any failure or delay in the performance ofits obligations hereunder arising out of or caused by, directly or indirectly,forces beyond its control, including strikes, work stoppages, accidents, actsof war or terrorism, civil or military disturbances, nuclear or naturalcatastrophes or acts of God, and interruptions, loss or malfunctions ofutilities, communications or computer (software and hardware) services; itbeing understood that the Trustee shall use reasonable efforts which areconsistent with accepted practices in the banking industry to resumeperformance as soon as practicable under the circumstances.

 

SECTION11.16.   Effectiveness of Provisions for MNA and theSubsidiary Guarantors.  The provisions of this Indenture shallnot be effective for MNA and the Subsidiary Guarantors, with the exception of Section3.21, until the Emergence Date. On the Emergence Date, Escrow LLC willmerge with and into MNA with MNA as the surviving entity and MNA will assumeall the obligations of Escrow LLC hereunder. The Merger will be permittednotwithstanding anything to the contrary in this Indenture.

 

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IN WITNESS WHEREOF, the parties hereto havecaused this Indenture to be duly executed as of the date first above written.

 

 
|   | MIRANT NORTH  AMERICA, LLC        |
|--------|-----------------------------------|
|   |                              |
|   |                              |
|   | By                                |   |
|   |                              |  Name: |
|   |                              |  Title: |
|   |                              |
|   |                              |
|   | MIRANT NORTH  AMERICA ESCROW, LLC |
|   |                              |
|   |                              |
|   | By                                |   |
|   |                              |  Name: |
|   |                              |  Title: |
|   |                              |
|   |                              |
|   | MNA FINANCE  CORP.                |
|   |                              |
|   |                              |
|   | By                                |   |
|   |                              |  Name: |
|   |                              |  Title: |
|   |                              |
|   |                              |
|   | MIRANT TEXAS  MANAGEMENT, LLC     |
|   |                              |
|   |                              |
|   | By                                |   |
|   |                              |  Name: |
|   |                              |  Title: |
|   |                              |
|   |                              |
|   | MIRANT  TEXAS, LP                 |
|   |                              |
|   |                              |
|   | By                                |   |
|   |                              |  Name: |
|   |                              |  Title: |
|   |                              |
|   |                              |
|   | MIRANT  CALIFORNIA, LLC           |
|   |                              |
|   |                              |
|   | By                                |   |
|   |                              |  Name: |
|   |                              |  Title: |

 

----

 
|   | MIRANT POTRERO, LLC              |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | By                               |   |   |
|   |                             | Name: |
|   |                             | Title: |
|   |                             |
|   | MIRANT DELTA, LLC                |
|   |                             |
|   |                             |
|   | By                               |   |   |
|   |                             | Name: |
|   |                             | Title: |
|   |                             |
|   | MIRANT CANAL, LLC                |
|   |                             |
|   |                             |
|   | By                               |   |   |
|   |                             | Name: |
|   |                             | Title: |
|   |                             |
|   | MIRANT KENDALL, LLC              |
|   |                             |
|   |                             |
|   | By                               |   |   |
|   |                             | Name: |
|   |                             | Title: |
|   |                             |
|   | MIRANT ZEELAND, LLC              |
|   |                             |
|   |                             |
|   | By                               |   |   |
|   |                             | Name: |
|   |                             | Title: |
|   |                             |
|   | MIRANT SPECIAL PROCUREMENT, INC. |
|   |                             |
|   |                             |
|   | By                               |   |   |
|   |                             | Name: |
|   |                             | Title: |

 

----

 
|   | MLW DEVELOPMENT, LLC |
|--------|----------------------|
|   |                 |
|   |                 |
|   | By                   |   |   |
|   |                 | Name: |
|   |                 | Title: |
|   |                 |

 

----

 
|   | LAW DEBENTURE TRUST COMPANY OF NEW YORK, |
|--------|------------------------------------------|
|   | as Trustee                               |
|   |                                     |
|   |                                     |
|   | By                                       |   |   |
|   |                                     | Name: |
|   |                                     | Title: |
|   |                                     |

 

----

 

SCHEDULE 3.2

 

EXISTINGINDEBTEDNESS

 

1.             Approximately$12.5 million of capitalized lease obligations of Mirant Zeeland, LLC arisingfrom the Transportation Services Contract, dated December 17, 1999, betweenMirant Zeeland, LLC (f/k/a SEI Michigan, L.L.C.) and SEMCO Energy Gas Company,as amended, supplemented and/or modified from time to time, and any otheragreements related thereto.

 

2.             Approximately$36.5 million of capitalized lease obligations of Mirant Chalk Point, LLC(1)arising from (i) the Site Lease Agreement, dated March 21, 1989, betweenPotomac Electric Power Company (“PEPCO”) and Southern Maryland ElectricCooperative, Inc. (“SMECO”) (as assigned by PEPCO to Mirant Chalk Point, LLC)and (ii) the Facility and Capacity Credit Agreement, dated as of March 21,1989, between PEPCO and SMECO (as assigned by PEPCO to Mirant Peaker, LLC), ineach case as amended, supplemented and/or modified from time to time, and anyother agreements related thereto.

 

----

(1)Mirant Peaker, LLC wasmerged into Mirant Chalk Point, LLC on December 16, 2005.

 

----

 

SCHEDULE 3.4

 

PERMITTEDRESTRICTIONS ON DISTRIBUTIONS

 

None.

 

----

 

SCHEDULE 3.6

 

EXISTING LIENS

 

1.                                       Lienssecuring capitalized lease obligations of Mirant Zeeland, LLC referred to inparagraph 1 of Schedule 3.2.

 

2.                                       Lienssecuring capitalized lease obligations of Mirant Chalk Point, LLC referred toin paragraph 2 of Schedule 3.2.

 

3.                                       Inorder to secure its obligations under the eleven Conditional IndemnityAgreements executed by Mirant Mid-Atlantic, LLC (“MIRMA”) in favor of each ofthe eleven Owner Lessors, MIRMA (f/k/a Southern Energy Mid-Atlantic, LLC) as“mortgagor” executed in favor of the applicable Owner Lessor (identified below)an Indemnity Mortgage (identified below) which encumbered, among other assets,the above-ground improvements defined as the “Dickerson Facility” and the“Morgantown Facility.” Each of the Indemnity Mortgages is described in greaterdetail below:

 
| **Indemnity  Mortgage** | ** **                                                       | **Owner Lessor** | ** **         | **Date Executed** | ** ** |
|-------------------------|------------------------------------------------------------------|------------------|--------------------|-------------------|------------|
| 1.                      | Indemnity Mortgage, Security  Agreement and Fixture Filing (L1)  |             | Dickerson OL1 LLC  |              | 12/19/00   |   |
| 2.                      | Indemnity  Mortgage, Security  Agreement and Fixture Filing (L2) |             | Dickerson  OL2 LLC |              | 12/19/00   |   |
| 3.                      | Indemnity  Mortgage, Security  Agreement and Fixture Filing (L3) |             | Dickerson  OL3 LLC |              | 12/19/00   |   |
| 4.                      | Indemnity  Mortgage, Security  Agreement and Fixture Filing (L4) |             | Dickerson  OL4 LLC |              | 12/19/00   |   |
| 5.                      | Indemnity Mortgage, Security  Agreement and Fixture Filing (L1)  |             | Morgantown OL1 LLC |              | 12/19/00   |   |
| 6.                      | Indemnity Mortgage, Security  Agreement and Fixture Filing (L2)  |             | Morgantown OL2 LLC |              | 12/19/00   |   |
| 7.                      | Indemnity Mortgage, Security  Agreement and Fixture Filing (L3)  |             | Morgantown OL3 LLC |              | 12/19/00   |   |

 

4.             Deed ofTrust, Security Agreement and Fixture Filing, to be recorded in MontgomeryCounty, Maryland, among MIRMA as trustor, a trustee to be determined, andDickerson OL1, LLC as beneficiary, granting a security interest in an undividedinterest in the “SEMA Shared Facilities” (as defined in Shared FacilitiesAgreement, dated as of December 18, 2000, among Southern Energy Mid-Atlantic,LLC, Dickerson OL1, LLC, Dickerson OL2, LLC, Dickerson OL3, LLC and DickersonOL4, LLC (the “Shared Facilities Agreement”)) and a contingent lien on anundivided interest in the “Owner Lessor Shared Facilities” (as defined in theShared Facilities Agreement).

 

5.             Deed ofTrust, Security Agreement and Fixture Filing, to be recorded in MontgomeryCounty, Maryland, among MIRMA as trustor, a trustee to be determined, andDickerson OL2, 

 

----

 

LLC as beneficiary, granting a securityinterest in an undivided interest in the “SEMA Shared Facilities” (asdefined in the Shared Facilities Agreement) and a contingent lien on anundivided interest in the “Owner Lessor Shared Facilities” (as defined in theShared Facilities Agreement).

 

6.             Deed ofTrust, Security Agreement and Fixture Filing, to be recorded in MontgomeryCounty, Maryland, among MIRMA as trustor, a trustee to be determined, andDickerson OL3, LLC as beneficiary, granting a security interest in an undividedinterest in the “SEMA Shared Facilities” (as defined in the SharedFacilities Agreement) and a contingent lien on an undivided interest in the“Owner Lessor Shared Facilities” (as defined in the Shared FacilitiesAgreement).

 

7.             Deed ofTrust, Security Agreement and Fixture Filing, to be recorded in MontgomeryCounty, Maryland, among MIRMA as trustor, a trustee to be determined, andDickerson OL4, LLC as beneficiary, granting a security interest in an undividedinterest in the “SEMA Shared Facilities” (as defined in the SharedFacilities Agreement) and a contingent lien on an undivided interest in the“Owner Lessor Shared Facilities” (as defined in the Shared FacilitiesAgreement).

 

8.

 
| **Jurisdiction**                               | ** ** | **Debtor Name**           | ** ** | **Secured Party**         | ** ** | **Collateral**                                                                                                                        | ** ** |
|------------------------------------------------|------------|---------------------------|------------|---------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------|------------|
| DE-SOS                                         |       | Mirant  California, LLC   |       | United  Rentals, Inc.     |       | Equipment  #662391 Sullair 375H Compressor s/n 004-145869.                                                                            |       |
| DE-SOS                                         |       | Mirant  Canal, LLC        |       | Toyota  Motor Credit Corp |       | One  (1) New Toyota Pneumatic Tire Forklift Model 7FGU25 s/n: 68242 with New  Rightline Fork Positioner Model E5D1019-16 s/n: 025842. |       |
| DE-SOS    MD-Dept. of Assessments and Taxation |       | Mirant  Mid-Atlantic, LLC |       | Dickerson  OL2 LLC        |       | Indemnity  finance statement covering collateral including assets relating to Dickerson  facility.                                    |       |
| DE-SOS    MD-Dept. of Assessments and Taxation |       | Mirant  Mid-Atlantic, LLC |       | Morgantown  OL1 LLC       |       | Indemnity  finance statement covering collateral including assets relating to Morgantown  facility.                                   |       |
| DE-SOS    MD-Dept. of Assessments and Taxation |       | Mirant  Mid-Atlantic, LLC |       | Dickerson  OL1 LLC        |       | Indemnity  finance statement covering collateral including assets relating to Dickerson  facility.                                    |       |

 

----

 
| DE-SOS    MD-Dept. of Assessments and Taxation |   | Mirant  Mid-Atlantic, LLC |   | Dickerson  OL4 LLC  |   | Indemnity  finance statement covering collateral including assets relating to Dickerson  facility.  |   |
|------------------------------------------------|--------|---------------------------|--------|---------------------|--------|-----------------------------------------------------------------------------------------------------|--------|
| DE-SOS    MD-Dept. of Assessments and Taxation |   | Mirant  Mid-Atlantic, LLC |   | Dickerson  OL3 LLC  |   | Indemnity  finance statement covering collateral including assets relating to Dickerson  facility.  |   |
| DE-SOS    MD-Dept. of Assessments and Taxation |   | Mirant  Mid-Atlantic, LLC |   | Morgantown  OL3 LLC |   | Indemnity  finance statement covering collateral including assets relating to Morgantown  facility. |   |
| DE-SOS    MD-Dept. of Assessments and Taxation |   | Mirant  Mid-Atlantic, LLC |   | Morgantown  OL2 LLC |   | Indemnity  finance statement covering collateral including assets relating to Morgantown  facility. |   |
| DE-SOS    MD-Dept. of Assessments and Taxation |   | Mirant  Mid-Atlantic, LLC |   | Morgantown  OL5 LLC |   | Indemnity  finance statement covering collateral including assets relating to Morgantown  facility. |   |
| DE-SOS    MD-Dept. of Assessments and Taxation |   | Mirant  Mid-Atlantic, LLC |   | Morgantown  OL4 LLC |   | Indemnity  finance statement covering collateral including assets relating to Morgantown  facility. |   |
| DE-SOS    MD-Dept. of Assessments and Taxation |   | Mirant  Mid-Atlantic, LLC |   | Morgantown  OL7 LLC |   | Indemnity  finance statement covering collateral including assets relating to Morgantown  facility. |   |
| DE-SOS    MD-Dept. of Assessments and Taxation |   | Mirant  Mid-Atlantic, LLC |   | Morgantown  OL6 LLC |   | Indemnity  finance statement covering collateral including assets relating to Morgantown  facility. |   |

 

----

 

SCHEDULE 3.8

 

EXISTINGAFFILIATE TRANSACTIONS

 

1.                                       MAEMwill be party to Power Sale, Fuel, Supply and Services Agreements, dated as ofJanuary 3, 2005 with each subsidiary of Mirant North America, LLC and certainaffiliated entities that are subsidiaries of Mirant Americas, Inc. insubstantially the form provided to the Initial Purchasers prior to the IssueDate, which agreements MAEM will assign to MET.

 

2.                                       AdministrativeServices Agreements, dated as of January 3, 2005 between Mirant Services, LLCand each of Mirant North America, LLC and its subsidiaries in substantially theform provided to the Initial Purchasers prior to the Issue Date.

 

----

 

SCHEDULE I

 

EXISTINGINVESTMENTS

 

1.                                       Investmentsin Mirant New York, Inc., Mirant Bowline, LLC, Mirant Lovett, LLC, MirantNY-Gen, LLC and Hudson Valley Gas Corporation on the Emergence Date.

 

2.                                       Investmentsconsisting of advances not exceeding $20 million to the extent not backed bycash collateral made pursuant to the Intercompany DIP facility (the “IntercompanyDIP”) made available by Mirant Americas Energy Marketing, LP (“MAEM”)and Mirant North America, LLC to Mirant New York, Inc., Mirant Bowline, LLC,Mirant Lovett, LLC and Hudson Valley Gas Corporation on terms described in theOffering Memorandum, which agreement MAEM will assign to Mirant Energy TradingLLC (“MET”).

 

3.                                       Balancesowed to Mirant North America, LLC and its subsidiaries owed under intercompanyarrangements described in the Offering Memorandum.

 

4.                                       Investmentsmade pursuant to the Plan of Reorganization. (i) in connection with the restructuring of MEAM and MET as described inthe Offering Memorandum in furtherance of the MAEM/MET Effective Date (asdefined in the Plan of Reorganization) and (ii) consisting of investments byMIRMA in MAI Series A Preferred Shares.

 

----

 

EXHIBIT A

 

[FORM OF FACEOF SERIES A NOTE]

 

[ApplicableRestricted Securities Legend][Depository Legend, if applicable]

 
| No.              |   | Principal Amount  $              ,  as                                                                                                                                                                                                                                                                                            |
|-------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                    |   | revised by the Schedule of Increases and                                                                                                                                                                                                                                                                                                                                                                |
|                                                                    |   | Decreases in Global Security attached hereto                                                                                                                                                                                                                                                                                                                                                            |
|                                                                    |   | CUSIP NO.                                                                                                                      |
|                                                                    |   | ISIN:                                                                   |

 

MIRANT NORTHAMERICA ESCROW, LLC

MIRANT NORTHAMERICA, LLCMNA FINANCE CORP.

 

7.375% SeniorNote, Series A, due 2013

 

The Issuers promise to pay to Cede & Co.,or its registered assigns, the principal sum of [                         ]DOLLARS, as revised by the Schedule of Increases and Decreases in GlobalSecurity attached hereto, on December 31, 2013.

 

InterestPayment Dates:  June 30 and December 31,commencing on June 30, 2006

 

Record Dates:June 15 and December 15

 

Additional provisions of this Security areset forth on the other side of this Security.

 

A-1

----

 
|   | MIRANT NORTH AMERICA ESCROW, LLC |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | By                               |   |   |
|   |                             | Name: |
|   |                             | Title: |
|   |                             |
|   |                             |
|   | MIRANT NORTH AMERICA, LLC        |
|   |                             |
|   |                             |
|   | By                               |   |   |
|   |                             | Name: |
|   |                             | Title: |
|   |                             |
|   |                             |
|   | MNA FINANCE CORP.                |
|   |                             |
|   |                             |
|   | By                               |   |   |
|   |                             | Name: |
|   |                             | Title: |

 

Date:

 

A-2

----

 

TRUSTEE’SCERTIFICATE OF  AUTHENTICATION

 

LAW DEBENTURETRUST COMPANY OF NEW YORK,

as Trustee,certifiesthat this is one ofthe Securities referredto in the Indenture.

 
| By:    |                 |   |
|--------|----------------------|--------|
|   | Authorized Signatory |

 

Date:

 

A-3

----

 

[FORM OFREVERSE SIDE OF SERIES A NOTE]

 

MIRANT NORTHAMERICA ESCROW, LLC

MIRANT NORTHAMERICA, LLC

 MNA FINANCE CORP.

 

7.375% SeniorNote, Series A, due 2013

 

1.   Interest

 

Mirant North America Escrow, LLC, a Delawarelimited liability company (“Escrow LLC”), Mirant North America, LLC, aDelaware limited liability company (“MNA” and together with the EscrowLLC, the “Company”), and MNA Finance Corp., a Delaware corporation (the“MNA Finance Corp.” and, together with the Company, the “Issuers”)promise to pay interest on the principal amount of this Security at the rateper annum shown above. The obligations of MNA under this Security shall notbecome effective until the Emergence Date.

 

The Issuers will pay interest semi-annuallyon June 30 and December 31, commencing on June 30, 2006. Interest on theSecurities will accrue from the most recent date to which interest has beenpaid on the Securities or, if no interest has been paid, from December 23, 2005.The Issuers shall pay interest on overdue principal, and on overdue premium, ifany (plus interest on such interest to the extent lawful), at the rate borne bythe Securities to the extent lawful. Interest will be computed on the basis ofa 360-day year of twelve 30-day months.

 

In the event that either the Exchange Offer is not completed or theshelf registration statement (the “Shelf Registration Statement”), ifrequired by the Registration Rights Agreement, is not declared effective on orprior to September 19, 2006, the interest rate on the Securities will beincreased by 1.00% per annum until the Exchange Offer is completed or the ShelfRegistration Statement, if required by the Registration Rights Agreement, isdeclared effective by the SEC or the Securities become freely tradable underthe Securities Act.

 

If the Shelf Registration Statement, if required by the RegistrationRights Agreement, has been declared effective and thereafter either ceases tobe effective or the Prospectus contained therein ceases to be usable at anytime during the Shelf Effectiveness Period (as defined in the RegistrationRights Agreement), and such failure to remain effective or usable exists formore than 30 days (whether or not consecutive) in any 12-month period, then theinterest rate on the Securities will be increased by 1.00% per annum commencingon the 31st day in such 12-month period and ending on such date that the ShelfRegistration Statement has again been declared effective or the Prospectusagain becomes usable.

 

The Holder of this Security is entitled to the benefits of theRegistration Rights Agreement.

 

A-1

----

 

2.   Method of Payment

 

By no later than 10:00 a.m. (New York Citytime) on the date on which any principal of, premium, if any, or interest onany Security is due and payable, the Issuers shall irrevocably deposit with theTrustee or the Paying Agent money sufficient to pay such principal, premium, ifany, and/or interest. The Issuers will pay interest (except Defaulted Interest)to the Persons who are registered Holders of Securities at the close ofbusiness on the June 15 or December 15 next preceding the interest payment dateeven if Securities are cancelled, repurchased or redeemed after the record dateand on or before the interest payment date. Holders must surrender Securitiesto a Paying Agent to collect principal payments. The Issuers will payprincipal, premium, if any, and interest in money of the United States that atthe time of payment is legal tender for payment of public and private debts.Payments in respect of Securities represented by a Global Security (includingprincipal, premium, if any, and interest) will be made by the transfer ofimmediately available funds to the accounts specified by The Depository TrustCompany or any successor depository. The Issuers will make all payments inrespect of a Definitive Security (including principal, premium, if any, andinterest) by mailing a check to the registered address of each Holder thereof; *provided, however,* that payments on theSecurities may also be made, in the case of a Holder of at least $1,000,000aggregate principal amount of Securities, by wire transfer to a U.S. dollaraccount maintained by the payee with a bank in the United States if such Holderelects payment by wire transfer by giving written notice to the Trustee or thePaying Agent to such effect designating such account no later than 15 daysimmediately preceding the relevant due date for payment (or such other date asthe Trustee may accept in its discretion).

 

3.   PayingAgent and Registrar

 

Initially, Law Debenture Trust Company of NewYork (the “Trustee”) will act as Trustee and Deutsche Bank Trust CompanyAmericas will act as Paying Agent and Registrar. The Issuers may appoint andchange any Paying Agent, Registrar or co-registrar without notice to any Holder.Any of the domestically organized Restricted Subsidiaries may act as PayingAgent, Registrar or co-registrar.

 

4.   Indenture

 

The Issuers issued the Securities under anIndenture dated as of December 23, 2005 (as it may be amended or supplementedfrom time to time in accordance with the terms thereof, the “Indenture”),among the Issuers, the Subsidiary Guarantors and the Trustee. The terms of theSecurities include those stated in the Indenture and those made part of theIndenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”).Capitalized terms used herein and not defined herein have the meanings ascribedthereto in the Indenture. The Securities are subject to all terms andprovisions of the Indenture, and Holders are referred to the Indenture and theAct for a statement of those terms.

 

The Securities are general unsecured, seniorobligations of the Issuers. The aggregate principal amount of securities thatmay be authenticated and delivered under the Indenture is unlimited. ThisSecurity is one of the 7.375% Senior Notes, Series A, due 2013 

 

A-2

----

 

referred to inthe Indenture. The Securities include (i) $850,000,000 aggregate principalamount of the Issuers’ 7.375% Senior Notes, Series A, due 2013 issued under theIndenture on December 23, 2005 (herein called “Initial Securities”),(ii) if and when issued, additional 7.375% Senior Notes, Series A, due2013 or 7.375% Senior Notes, Series B, due 2013 of the Issuers that may beissued from time to time under the Indenture subsequent to December 23, 2005(herein called “Additional Securities”) and (iii) if and whenissued, the Issuers’ 7.375% Senior Notes, Series B, due 2013 that may be issuedfrom time to time under the Indenture in exchange for Initial Securities orAdditional Securities in an offer registered under the Securities Act asprovided in the Registration Rights Agreement (herein called “ExchangeSecurities”). The Initial Securities, Additional Securities and ExchangeSecurities are treated as a single class of securities under the Indenture. TheIndenture imposes, among other things, certain limitations on the incurrence ofindebtedness, the making of restricted payments, the sale of assets andsubsidiary stock, the incurrence of certain liens, affiliate transactions, themaking of payments for consents, the entering into of agreements that restrictdistributions from restricted subsidiaries, the consummation of mergers andconsolidations, entering new lines of business, restrictions on the activitiesof the Corp. Co-Issuer and activities prior to the Emergence Date. TheIndenture also imposes requirements with respect to the provision of financialinformation and the provision of guarantees of the Securities by certainsubsidiaries.

 

To guarantee the due and punctual payment ofthe principal, premium, if any, and interest (including post-filing orpost-petition interest) on the Securities and all other amounts payable by theIssuers under the Indenture and the Securities when and as the same shall bedue and payable, whether at maturity, by acceleration or otherwise, accordingto the terms of the Securities and the Indenture, the Subsidiary Guarantorshave fully, unconditionally and irrevocably Guaranteed (and future guarantors,together with the Subsidiary Guarantors, will fully, unconditionally and irrevocablyGuarantee), jointly and severally, to each Holder of the Securities and theTrustee the Guarantor Obligations pursuant to Article X of the Indentureon a senior unsecured basis.

 

5.   Redemption

 

Except as set forth below, the Securitieswill not be redeemable at the option of the Issuers prior to December 31, 2009.On and after such date, the Securities will be redeemable, at the Issuers’option, in whole or in part, at any time from time to time, upon not less than30 nor more than 60 days’ prior notice, at the following redemption prices(expressed in percentages of principal amount), plus accrued and unpaidinterest, if any, to the applicable redemption date (subject to the right ofHolders of record on the relevant record date to receive interest due on therelevant interest payment date), if redeemed during the 12-month periodcommencing on December 31st of the years set forth below:

 
| **Period**          | ** ** | **Percentage** | ** ** |
|---------------------|------------|----------------|------------|
| 2009                |       | 103.688        | %          |
| 2010                |       | 101.844        | %          |
| 2011 and thereafter |       | 100.000        | %          |

 

A-3

----

 

In addition, at any time and from time totime prior to December 31, 2008, the Issuers may redeem in the aggregate up to35% of the original principal amount of the Securities (including AdditionalSecurities) with the Net Cash Proceeds of one or more Equity Offerings at aredemption price (expressed as a percentage of principal amount) of 107.375% ofthe principal amount thereof, plus accrued and unpaid interest, if any, to theredemption date (subject to the right of Holders of record on the relevantrecord date to receive interest due on the relevant interest payment date); *provided, however,*that at least 65% ofthe original principal amount of the Securities (including AdditionalSecurities) must remain outstanding after each such redemption; *provided further*, that each suchredemption occurs within 90 days of the date of closing of such EquityOffering.

 

The Securities may beredeemed, in whole or in part, at any time prior to December 31, 2009 at theoption of the Issuers upon not less than 30 nor more than 60 days’ prior noticemailed by first class mail to each Holder’s registered address, at a redemptionprice equal to 100% of the principal amount of the Securities redeemed plus theApplicable Premium as of, and accrued and unpaid interest, to, the applicableredemption date (subject to the right of holders of record on the relevantrecord date to receive interest due on the relevant interest payment date).

 

If the optional redemption date is on orafter an interest record date and on or before the related interest paymentdate, the accrued and unpaid interest, if any, will be paid to the Person inwhose name the Security is registered at the close of business on such recorddate, and no additional interest will be payable to Holders whose Securitieswill be subject to redemption by the Issuers.

 

In the case of any partial redemption,selection of the Securities for redemption will be made by the Trustee incompliance with the requirements of the principal national securities exchange,if any, on which the Securities are listed or, if the Securities are notlisted, then on a pro rata basis, by lot or by such other method as the Trusteein its sole discretion shall deem to be fair and appropriate, although noSecurities of $1,000 in original principal amount or less will be redeemed inpart. Any such notice to the Trustee may be cancelled at any time prior tonotice of such redemption being mailed to any Holder and shall thereby be voidand of no effect. If any Security is to be redeemed in part only, the notice ofredemption relating to such Security shall state the portion of the principalamount thereof to be redeemed. A new Security in principal amount equal to theunredeemed portion thereof will be issued in the name of the Holder thereofupon cancellation of the original Security. On and after the redemption date,interest will cease to accrue on Securities or portions thereof called forredemption as long as the Issuers have deposited with the Paying Agent funds insatisfaction of the applicable redemption price pursuant to the Indenture.

 

If the Escrow Release Conditions (as definedin the Escrow Agreement) shall not have been fulfilled, or the escrow agentshall not have received the Officers’ Certificate described in Section 7(a) ofthe Escrow Agreement, by January 6, 2006 or the Plan of Reorganization shallhave been amended and such amendments are materially adverse to the holders ofthe Securities or the Plan of Reorganization shall have been terminated priorto such date, the escrow agent, pursuant to the Escrow Agreement, shall,without the requirement of notice to or action by the Issuers, the Trustee orany other Person, notify the Trustee that all of 

 

A-4

----

 

the Securitiesshall be subject to a special redemption (the “Special Redemption”) inaccordance with Section 5.9 of the Indenture on the second Business Dayafter delivery of such notice but in any event on or prior to January 10, 2006(the “Special Redemption Date”). In the case of a Special Redemption,the Issuers shall, not later than 11:00 A.M. New York City time (or such othertime of day acceptable to the Trustee which will permit it to give the noticereferred to in the last paragraph of Section 5.5 of the Indenture) atleast two Business Days prior to the Special Redemption Date deliver anOfficers’ Certificate to the Trustee setting forth (i) that a SpecialRedemption will occur, (ii) the Special Redemption Date, (iii) the SpecialRedemption Price and (iv) the other information specified in Section 5.5of the Indenture. The Trustee shall deliver to each Holder a written notice(specifying the information set forth in such Officers’ Certificate) of theSpecial Redemption at least two Business Days prior to the Special RedemptionDate. On the Special Redemption Date, the Issuers shall instruct the escrowagent to release cash to the Paying Agent for the purposes of the SpecialRedemption. On the Special Redemption Date, the Securities shall be redeemed,in whole but not in part, at a redemption price equal to 100% of the principalamount of the Securities, plus accrued and unpaid interest, from, andincluding, the Issue Date to, but excluding, the Special Redemption Date,notwithstanding the noncompliance by the Issuers with the requirements of thesecond sentence of Section 5.9 of the Indenture.

 

6.   RepurchaseProvisions

 

If a Change of Control occurs, unless theIssuers have exercised their right to redeem all of the Securities as describedunder paragraph 5 of the Securities, then such Change of Control shallconstitute a triggering event which shall trigger the obligation of the Issuersto offer to repurchase from each Holder all or any part (equal to $1,000 or anintegral multiple thereof) of such Holder’s Securities at a purchase price incash equal to 101% of the principal amount thereof, plus accrued and unpaidinterest, if any, to the date of repurchase (subject to the right of Holders ofrecord on the relevant record date to receive interest due on the relevantinterest payment date) as provided in, and subject to the terms of, theIndenture.

 

7.   Denominations;Transfer; Exchange

 

The Securities are in registered form withoutcoupons in denominations of principal amount of $1,000 and integral multiplesof $1,000. A Holder may transfer or exchange Securities in accordance with theIndenture. The Registrar may require a Holder, among other things, to furnishappropriate endorsements or transfer documents and to pay a sum sufficient tocover any transfer tax or other governmental taxes and fees required by law orpermitted by the Indenture. The Registrar need not register the transfer of orexchange of any Security for a period beginning 15 days before the mailingof a notice of an offer to repurchase or redeem Securities and ending at theclose of business on the day of such mailing. The Registrar shall not berequired to register the transfer of or exchange of any Security selected forredemption.

 

8.   PersonsDeemed Owners

 

The registered Holder of this Security may betreated as the owner of it for all purposes.

 

A-5

----

 

9.   UnclaimedMoney

 

Subject to any applicable abandoned propertylaw, the Trustee and the Paying Agent shall pay to the Issuers upon request anymoney held by them for the payment of principal of or premium, if any, orinterest on the Securities that remains unclaimed by the Holders thereof fortwo years, and, thereafter, Holders entitled to the money must look to theIssuers for payment as unsecured general creditors.

 

10.   Defeasance

 

Subject to certain exceptions and conditionsset forth in the Indenture, the Issuers at any time may terminate some or allof their obligations under the Securities and the Indenture if the Issuersdeposit with the Trustee money or U.S. Government Obligations for the paymentof principal, premium, if any, and interest on the Securities to redemption ormaturity, as the case may be.

 

11.   Amendment,Supplement, Waiver

 

Subject tocertain exceptions set forth in the Indenture, (i) the Indenture and theSecurities may be amended or supplemented by the Issuers, the SubsidiaryGuarantors and the Trustee with the written consent of the Holders of at leasta majority in principal amount of the then outstanding Securities and (ii) anydefault (other than with respect to nonpayment (except in accordance with Section6.4 of the Indenture)) or noncompliance with any provision may be waivedwith the written consent of the Holders of a majority in principal amount ofthe then outstanding Securities, in each case other than in respect of aprovision that cannot be amended without the written consent of each Holderaffected. Subject to certain exceptions set forth in the Indenture, without theconsent of any Holder, the Issuers, the Subsidiary Guarantors and the Trusteemay amend or supplement the Indenture or the Securities to cure any ambiguity,omission, defect or inconsistency; provide for the assumption by a successorcorporation of the obligations of the Issuers or any Subsidiary Guarantor underthe Indenture; provide for uncertificated Securities in addition to or in placeof certificated Securities (*provided*that the uncertificated Securities are issued in registered form for purposesof Section 163(f) of the Code, or in a manner such that the uncertificatedSecurities are described in Section 163(f) (2) (B) of the Code); add Guaranteeswith respect to the Securities or release a Subsidiary Guarantor upon itsdesignation as an Unrestricted Subsidiary (*provided,however,*that the designation is in accordance with the applicableprovisions of the Indenture); secure the Securities; add to the covenants ofthe Issuers and the Restricted Subsidiaries for the benefit of the Holders orsurrender any right or power conferred upon the Issuers or any RestrictedSubsidiary; make any change that does not adversely affect the rights of anyHolder; comply with any requirement of the SEC in connection with thequalification of the Indenture under the TIA; provide for the issuance of theExchange Securities which shall have terms substantially identical in allrespects to the Initial Securities or the Additional Securities, as the casemay be (except that the transfer restrictions contained in the InitialSecurities or the Additional Securities, as the case may be, shall be modifiedor eliminated as appropriate), and which shall be treated, together with anyoutstanding Initial Securities or Additional Securities, as a single class ofsecurities; release a Subsidiary Guarantor from its obligations under itsSubsidiary Guarantee or the Indenture in accordance with the applicableprovisions of the Indenture; provide for the appointment of a 

 

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successortrustee (*provided* that the successor trustee isotherwise qualified and eligible to act as such under the terms of theIndenture); make any change necessary to conform the Indenture to theDescription of the Notes in the Offering Memorandum; or provide for theissuance of Additional Securities in accordance with the provisions of theIndenture.

 

12.   Defaultsand Remedies

 

Under theIndenture, Events of Default include (each of which are more specificallydescribed in the Indenture) (i) default in any payment of interest oradditional interest (as required by the Registration Rights Agreement) on anySecurity when due, continued for 30 days; (ii) default in the payment ofprincipal of or premium, if any, on any Security when due at its StatedMaturity, upon optional redemption, upon required repurchase, upon declarationor otherwise; (iii) failure by the Issuers or any Subsidiary Guarantor tocomply with their obligations under Section 4.1 of the Indenture; (iv)failure by the Issuers or any Subsidiary Guarantor to comply for 30 days afternotice with any of their obligations under Article III of the Indenture(other than (x) a failure to purchase Securities which will constitute an Eventof Default under clause (ii) and other than a failure to comply with Section4.1 of the Indenture, which will constitute an Event of Default underclause (iii) and (y) Sections3.14, 3.15, 3.16, 3.17,3.18 and 3.20 of the Indenture, which will constitute an Event ofDefault under clause (v) below); (v) failure by the Issuers or any SubsidiaryGuarantor to comply for 60 days after notice as provided below with their otheragreements contained in the Indenture; (vi) default under any mortgage,indenture or instrument under which there may be issued or by which there maybe secured or evidenced any Indebtedness for money borrowed by the Issuers orany of its Restricted Subsidiaries or New Mirant (subject, solely in the caseof New Mirant, to there being outstanding more than $100.0 million of unfundedMAI Series A Preferred Shares and MAI Series B Preferred Shares in the aggregate)or the payment of which is guaranteed by the Issuers, any of their RestrictedSubsidiaries or New Mirant, other than Indebtedness owed to the Issuers or aRestricted Subsidiary, whether such Indebtedness or guarantee now exists, or iscreated after the date of the Indenture, which default (1) is caused by afailure to pay principal of such Indebtedness at its final stated maturity or(2) results in the acceleration of such Indebtedness prior to its maturity,and, in each case, the principal amount of any such Indebtedness, together withthe principal amount of any other such Indebtedness under which there has beena payment default or the maturity of which has been so accelerated, aggregates$50.0 million or more; *provided* that this clause (vi) shall not apply toIndebtedness that becomes due as a result of the voluntary sale or transfer ofthe property or assets securing such Indebtedness to a Person that is not anAffiliate of the Issuers so long as such Indebtedness is retired upon such saleor transfer; (vii) certain events set forth in Section 6.1(7) ofthe Indenture of bankruptcy, insolvency or reorganization of either of theIssuers or New Mirant (subject, solely in the case of New Mirant, to therebeing outstanding more than $100.0 million of unfunded MAI Series A PreferredShares and MAI Series B Preferred Shares in the aggregate) or a SignificantSubsidiary of the Issuers or group of Restricted Subsidiaries of the Issuersthat, taken together (as of the latest audited consolidated financial statementsfor the Company and its Restricted Subsidiaries), would constitute aSignificant Subsidiary; (viii) failure by the Company or any SignificantSubsidiary or group of Restricted Subsidiaries that, taken together (as of thelatest audited consolidated financial statements for the Company and itsRestricted Subsidiaries), would constitute a Significant Subsidiary to payfinal judgments aggregating in excess of $50.0 million (net of any amounts thata reputable and creditworthy insurance company has acknowledged liability forin 

 

A-7

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writing),which judgments are not paid, discharged or stayed for a period of 60 days; or(ix) any Subsidiary Guarantee of a Significant Subsidiary or group ofRestricted Subsidiaries that taken together as of the latest auditedconsolidated financial statements for the Company and its RestrictedSubsidiaries would constitute a Significant Subsidiary ceases to be in fullforce and effect (except as contemplated by the terms of the Indenture) or isdeclared null and void in a judicial proceeding or any Subsidiary Guarantorthat is a Significant Subsidiary or group of Subsidiary Guarantors that takentogether as of the latest audited consolidated financial statements of the Companyand its Restricted Subsidiaries would constitute a Significant Subsidiaryexpressly denies or disaffirms its obligations under the Indenture or itsSubsidiary Guarantee. However, a default under clauses (iv) and(v) will not constitute an Event of Default until the Trustee or theHolders of 25% in principal amount of the outstanding Securities notify theIssuers of the default and the Issuers do not cure such default within the timespecified in clauses (iv) and (v) hereof after receipt of such notice.

 

If an Event of Default (other than an Eventof Default described in (vii) hereof) occurs and is continuing, the Trustee bynotice to the Issuers, or the Holders of at least 25% in principal amount ofthe outstanding Securities by notice to the Issuers and the Trustee, may, andthe Trustee at the request of such Holders shall, declare the principal of,premium, if any, and accrued and unpaid interest, if any, on all the Securitiesto be due and payable. If an Event of Default described in (vii) hereof occursand is continuing, the principal of, premium, if any, and accrued and unpaidinterest on all the Securities will become and be immediately due and payablewithout any declaration or other act on the part of the Trustee or any Holders.

 

Holders may not enforce the Indenture or theSecurities except as provided in the Indenture. The Trustee may refuse toenforce the Indenture or the Securities unless it receives indemnity orsecurity reasonably satisfactory to it. Subject to certain limitations, Holdersof a majority in principal amount of the Securities may direct the Trustee inits exercise of any trust or power. The Trustee may withhold from Holdersnotice of any continuing Default or Event of Default (except a Default or Eventof Default in payment of principal, premium, if any, or interest) if itdetermines in good faith that withholding notice is in their interest.

 

13.   TrusteeDealings with the Issuers

 

Subject to certain limitations set forth inthe Indenture, the Trustee under the Indenture, in its individual or any othercapacity, may become the owner or pledgee of Securities and may otherwise dealwith and collect obligations owed to it by the Issuers, the SubsidiaryGuarantors or their Affiliates and may otherwise deal with the Issuers, theSubsidiary Guarantors or their Affiliates with the same rights it would have ifit were not Trustee.

 

14.   NoRecourse Against Others

 

No director, officer, employee, incorporatoror stockholder of the Issuers or a Subsidiary Guarantor, as such, shall haveany liability for any obligations of the Issuers or such Subsidiary Guarantorunder the Securities, the Indenture or any Subsidiary Guarantee or for anyclaim based on, in respect of, or by reason of, such obligations or theircreation. Each Holder of Securities by accepting a Security waives and releasesall such liability to the extent permitted by applicable law. The waiver andrelease are part of the consideration for issuance of the 

 

A-8

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Securities.Such waiver may not be effective to waive liabilities under the federalsecurities laws, and it is the view of the SEC that such a waiver is againstpublic policy.

 

15.   Authentication

 

This Security shall not be valid until anauthorized signatory of the Trustee (or an authenticating agent acting on itsbehalf) manually signs the certificate of authentication on the other side ofthis Security.

 

16.   Abbreviations

 

Customary abbreviations may be used in thename of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT(= tenants by the entirety), JT TEN (= joint tenants with rights ofsurvivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (=Uniform Gift to Minors Act).

 

17.   CUSIP,Common Code and ISIN Numbers

 

The Issuers have caused CUSIP, Common Code orISIN numbers, if applicable, to be printed on the Securities and has directedthe Trustee to use CUSIP, Common Code or ISIN numbers, if applicable, innotices of redemption as a convenience to Holders. No representation is made asto the accuracy of such numbers either as printed on the Securities or ascontained in any notice of redemption, and reliance may be placed only on theother identification numbers placed thereon.

 

18.   GoverningLaw

 

This Security shall be governed by, andconstrued in accordance with, the laws of the State of New York.

 

19.   Effectivenessof Provisions of the Indenture for MNA and the Subsidiary Guarantors

 

The provisions of the Indenture shall not beeffective for MNA and the Subsidiary Guarantors, with the exception of Section3.21, until the Emergence Date. On the Emergence Date, Escrow LLC will mergewith and into MNA with MNA as the surviving entity and MNA will assume all theobligations of Escrow LLC hereunder.

 

The Issuers will furnish to any Holder uponwritten request and without charge to the Holder a copy of the Indenture. Requestsmay be made to:

 

Mirant North America Escrow, LLC

Mirant North America, LLC

MNA Finance Corp.

 

1155 Perimeter Center West, Suite 100

Atlanta, GA 30338

Attention:  Treasurer

 

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ASSIGNMENT FORM

 

To assign this Security, fill in the formbelow:

 

I or we assign and transfer this Security to:

 
|                                                                                                                                                                                                                                                                                            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Print or  type assignee’s name, address and zip code)                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                            |
| (Insert assignee’s  social security or tax I.D. No.)                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                            |
| and  irrevocably appoint                            agent to transfer this Security on the books of the Issuers. The agent may  substitute another to act for him. |
|                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                            |
| Date:                                                                                                                                                                                                                                                                                           |   |   |   | Your  Signature: |   |
|                                                                                                                                                                                                                                                                                            |   |   |
| Signature  Guarantee:                                                                                                                                                                                                                                                                           |   |
| (Signature  must be guaranteed)                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                            |
| Sign exactly  as your name appears on the other side of this Security.                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                 |  |  |  |  |  |  |

 

Thesignature(s) should be guaranteed by an eligible guarantor institution (banks,stockbrokers, savings and loan associations and credit unions with membershipin an approved signature guarantee medallion program), pursuant to SEC Rule17Ad-15.

 

In connectionwith any transfer or exchange of any of the Securities evidenced by thiscertificate occurring prior to the date that is two years after the later ofthe date of original issuance of such Securities and the last date, if any, onwhich such Securities were owned by any of the Issuers, or any Affiliate of anyof the Issuers, the undersigned confirms that such Securities are being:

 

CHECK ONE BOXBELOW:

 

1o                             acquiredfor the undersigned’s own account, without transfer; or

 

2o                             transferredto the Issuers; or

 

3o                             transferredpursuant to and in compliance with Rule 144A under the Securities Act of1933, as amended (the “Securities Act”); or

 

4o                             transferredpursuant to an effective registration statement under the Securities Act; or

 

5o                             transferredpursuant to and in compliance with Regulation S under the Securities Act;or

 

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6o                             transferredto an institutional “accredited investor” (within the meaning of Rule501(a)(1), (2), (3) or (7) under the Securities Act), that has furnished to theTrustee a signed letter containing certain representations and agreements (theform of which letter appears as Section 2.7 of the Indenture); or

 

7o                             transferredpursuant to another available exemption from the registration requirements ofthe Securities Act.

 

Unless one ofthe boxes is checked, the Trustee will refuse to register any of the Securitiesevidenced by this certificate in the name of any person other than theregistered Holder thereof; *provided,however,* that if box (5), (6) or (7) is checked, the Trustee or theIssuers may require, prior to registering any such transfer of the Securities,the delivery of an opinion of counsel, certification and/or other informationsatisfactory to each of them to confirm that such transfer is being madepursuant to an exemption from, or in a transaction not subject to, theregistration requirements of the Securities Act, such as the exemption providedby Rule 144 under such Act.

 
|                           |      |   |
|--------------------------------|-----------|--------|
|                           | Signature |   |
| Signature Guarantee:           |      |   |
|                           |      |   |
|                           |      |   |   |
| (Signature must be guaranteed) | Signature |   |
|                                |           |        |  |

 

Thesignature(s) should be guaranteed by an eligible guarantor institution (banks,stockbrokers, savings and loan associations and credit unions with membershipin an approved signature guarantee medallion program), pursuant to SEC Rule17Ad-15.

 

TO BECOMPLETED BY PURCHASER IF (1) OR (3) ABOVE IS CHECKED.

 

Theundersigned represents and warrants that it is purchasing this Security for itsown account or an account with respect to which it exercises sole investmentdiscretion and that it and any such account is a “qualified institutionalbuyer” within the meaning of Rule 144A under the Securities Act of 1933,as amended, and is aware that the sale to it is being made in reliance onRule 144A and acknowledges that it has received such information regardingthe Issuers as the undersigned has requested pursuant to Rule 144A or hasdetermined not to request such information and that it is aware that thetransferor is relying upon the undersigned’s foregoing representations in orderto claim the exemption from registration provided by Rule 144A.

 
|   |   |   |
|--------|--------|--------|
|   | Dated: |

 

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[TO BEATTACHED TO GLOBAL SECURITIES]

 

SCHEDULE OFINCREASES AND DECREASES IN GLOBAL SECURITY

 

The followingincreases and decreases in this Global Security have been made:

 
| **Date of   Decrease   or   Increase** | ** ** | **Amount of   decrease in   Principal Amount   of this Global   Security** | ** ** | **Amount of   increase in   Principal Amount   of this Global   Security** | ** ** | **Principal Amount   of this Global   Security following   such decrease or   increase** | ** ** | **Signature of   authorized   signatory of   Trustee or   Securities   Custodian** | ** ** |
|------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------|------------|
|                                                       |       |                                                                                                                    |       |                                                                                                                    |       |                                                                                                                                       |       |                                                                                                                       |       |
|                                                       |       |                                                                                                                    |       |                                                                                                                    |       |                                                                                                                                       |       |                                                                                                                       |       |
|                                                       |       |                                                                                                                    |       |                                                                                                                    |       |                                                                                                                                       |       |                                                                                                                       |       |

 

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OPTION OFHOLDER TO ELECT PURCHASE

 

If you elect to have this Security purchasedby the Issuers pursuant to Section 3.5 or 3.11 of theIndenture, check either box:

 

| o   |   | o    |
|-----|--------|------|
| 3.5 |   | 3.11 |

 

If you want to elect to have only part ofthis Security purchased by the Issuers pursuant to Section 3.5 or Section 3.11of the Indenture, state the amount in principal amount (must be integralmultiple of $1,000):  $                                                                                                              

 
| Date:                                                                       |   | Your  Signature: |   |
|-----------------------------------------------------------------------------|--------|------------------|--------|
| (Sign exactly as your name appears on the  other side of the Security) |
|                                                                        |   |
| Signature  Guarantee:                                                       |   |
| (Signature  must be guaranteed)                                             |
|                                                                             |        |                  |        |  |

 

Thesignature(s) should be guaranteed by an eligible guarantor institution (banks,stockbrokers, savings and loan associations and credit unions with membershipin an approved signature guarantee medallion program), pursuant to SEC Rule17Ad-15.

 

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EXHIBIT B

 

[FORM OF FACEOF SERIES B NOTE]

 

[DepositoryLegend, if applicable]

 
| No.  [            ] |   | Principal Amount $[                      ],  as                                                                                                                  |
|---------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                            |   | revised by the Schedule of Increases and                                                                                                                                                                                                                                       |
|                                                                            |   | Decreases in Global Security attached hereto                                                                                                                                                                                                                                   |
|                                                                            |   | CUSIP NO.                                                                                                                                                                                                                                                                      |
|                                                                            |   | ISIN:                                              |

 

MIRANT NORTHAMERICA ESCROW, LLC

MIRANT NORTHAMERICA, LLC MNA FINANCE CORP.

7.375% SeniorNote, Series B, due 2013

 

The Issuers promise to pay to Cede & Co.,or its registered assigns, the principal sum of [                                 ]DOLLARS, as revised by the Schedule of Increases and Decreases in GlobalSecurity attached hereto, on December 31, 2013.

 

InterestPayment Dates:  June 30 and December 31,commencing on June 30, 2006

 

RecordDates:  June 15 and December 15

 

Additional provisions of this Security areset forth on the other side of this Security.

 

B-1

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|   | MIRANT NORTH AMERICA ESCROW, LLC |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | By:                              |   |   |
|   |                             | Name: |
|   |                             | Title: |
|   |                             |
|   |                             |
|   | MIRANT NORTH AMERICA, LLC        |
|   |                             |
|   |                             |
|   | By:                              |   |   |
|   |                             | Name: |
|   |                             | Title: |
|   |                             |
|   |                             |
|   | MNA FINANCE CORP.                |
|   |                             |
|   |                             |
|   | By:                              |   |   |
|   |                             | Name: |
|   |                             | Title: |

 

Date:

 

B-2

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TRUSTEE’SCERTIFICATE OF  AUTHENTICATION

 

LAW DEBENTURETRUST COMPANY OF NEW YORK,as Trustee, certifiesthat this is one ofthe Securities referredto in the Indenture.

 
| By:                                                                                                                               |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|                   Authorized  Signatory |   |

 

Date:

 

B-3

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[FORM OFREVERSE SIDE OF SERIES B NOTE]

 

MIRANT NORTHAMERICA ESCROW, LLC

MIRANT NORTHAMERICA, LLCMNA FINANCE CORP.

 

 7.375% Senior Note, Series B, due 2013

 

1.   Interest

 

Mirant North America Escrow, LLC, a Delawarelimited liability company (“Escrow LLC”), Mirant North America, LLC, aDelaware limited liability company (“MNA” and together with the EscrowLLC, the “Company”), and MNA Finance Corp., a Delaware corporation (the“MNA Finance Corp.” and, together with the Company, the “Issuers”)promise to pay interest on the principal amount of this Security at the rateper annum shown above. The obligations of MNA under this Security shall notbecome effective until the Emergence Date.

 

The Issuers will pay interest semi-annuallyon June 30 and December 31, commencing on June 30, 2006. Interest on theSecurities will accrue from the most recent date to which interest has beenpaid on the Securities or, if no interest has been paid, from December 23, 2005.The Issuers shall pay interest on overdue principal, and on overdue premium, ifany (plus interest on such interest to the extent lawful), at the rate borne bythe Securities to the extent lawful. Interest will be computed on the basis ofa 360-day year of twelve 30-day months.

 

2.   Methodof Payment

 

By no later than 10:00 a.m. (New York Citytime) on the date on which any principal of, premium, if any, or interest onany Security is due and payable, the Issuers shall irrevocably deposit with theTrustee or the Paying Agent money sufficient to pay such principal, premium, ifany, and/or interest. The Issuers will pay interest (except Defaulted Interest)to the Persons who are registered Holders of Securities at the close ofbusiness on the June 15 or December 15 next preceding the interest payment dateeven if Securities are cancelled, repurchased or redeemed after the record dateand on or before the interest payment date. Holders must surrender Securitiesto a Paying Agent to collect principal payments. The Issuers will payprincipal, premium, if any, and interest in money of the United States that atthe time of payment is legal tender for payment of public and private debts.Payments in respect of Securities represented by a Global Security (includingprincipal, premium, if any, and interest) will be made by the transfer ofimmediately available funds to the accounts specified by The Depository TrustCompany or any successor depository. The Issuers will make all payments inrespect of a Definitive Security (including principal, premium, if any, andinterest) by mailing a check to the registered address of each Holder thereof; *provided, however,* that payments on theSecurities may also be made, in the case of a Holder of at least $1,000,000aggregate principal amount of Securities, by wire transfer to a U.S. dollaraccount maintained by the payee with a bank in the United States if such Holderelects payment by wire transfer by giving written notice to the Trustee or thePaying Agent to such effect designating such account no later than 15 days

 

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immediatelypreceding the relevant due date for payment (or such other date as the Trusteemay accept in its discretion).

 

3.   PayingAgent and Registrar

 

Initially, Law Debenture Trust Company of NewYork (the “Trustee”) will act as Trustee and Deutsche Bank Trust CompanyAmericas will act as Paying Agent and Registrar. The Issuers may appoint andchange any Paying Agent, Registrar or co-registrar without notice to any Holder.Any of the domestically organized Restricted Subsidiaries may act as PayingAgent, Registrar or co-registrar.

 

4.   Indenture

 

The Issuers issued the Securities under anIndenture dated as of December 23, 2005 (as it may be amended or supplementedfrom time to time in accordance with the terms thereof, the “Indenture”),among the Issuers, the Subsidiary Guarantors and the Trustee. The terms of theSecurities include those stated in the Indenture and those made part of theIndenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”).Capitalized terms used herein and not defined herein have the meanings ascribedthereto in the Indenture. The Securities are subject to all terms andprovisions of the Indenture, and Holders are referred to the Indenture and theAct for a statement of those terms.

 

The Securities are general unsecured, seniorobligations of the Issuers. The aggregate principal amount of securities thatmay be authenticated and delivered under the Indenture is unlimited. ThisSecurity is one of the 7.375% Senior Notes, Series A, due 2013 referred to inthe Indenture. The Securities include (i) $850,000,000 aggregate principalamount of the Issuers’ 7.375% Senior Notes, Series A, due 2013 issued under theIndenture on December 23, 2005 (herein called “Initial Securities”),(ii) if and when issued, additional 7.375% Senior Notes, Series A, due2013 or 7.375% Senior Notes, Series B, due 2013 of the Issuers that may beissued from time to time under the Indenture subsequent to December 23, 2005(herein called “Additional Securities”) and (iii) if and whenissued, the Issuers’ 7.375% Senior Notes, Series B, due 2013 that may be issuedfrom time to time under the Indenture in exchange for Initial Securities orAdditional Securities in an offer registered under the Securities Act asprovided in the Registration Rights Agreement (herein called “ExchangeSecurities”). The Initial Securities, Additional Securities and ExchangeSecurities are treated as a single class of securities under the Indenture. TheIndenture imposes, among other things, certain limitations on the incurrence ofindebtedness, the making of restricted payments, the sale of assets andsubsidiary stock, the incurrence of certain liens, affiliate transactions, themaking of payments for consents, the entering into of agreements that restrictdistributions from restricted subsidiaries, the consummation of mergers andconsolidations, entering new lines of business, restrictions on the activitiesof the Corp. Co-Issuer and activities prior to the Emergence Date. TheIndenture also imposes requirements with respect to the provision of financialinformation and the provision of guarantees of the Securities by certainsubsidiaries.

 

To guarantee the due and punctual payment ofthe principal, premium, if any, and interest (including post-filing orpost-petition interest) on the Securities and all other amounts 

 

B-5

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payable by theIssuers under the Indenture and the Securities when and as the same shall bedue and payable, whether at maturity, by acceleration or otherwise, accordingto the terms of the Securities and the Indenture, the Subsidiary Guarantorshave fully, unconditionally and irrevocably Guaranteed (and future guarantors,together with the Subsidiary Guarantors, will fully, unconditionally andirrevocably Guarantee), jointly and severally, to each Holder of the Securitiesand the Trustee the Guarantor Obligations pursuant to Article X of theIndenture on a senior unsecured basis.

 

5.   Redemption

 

Except as set forth below, the Securitieswill not be redeemable at the option of the Issuers prior to December 31, 2009.On and after such date, the Securities will be redeemable, at the Issuers’option, in whole or in part, at any time from time to time, upon not less than30 nor more than 60 days’ prior notice, at the following redemption prices(expressed in percentages of principal amount), plus accrued and unpaidinterest, if any, to the applicable redemption date (subject to the right ofHolders of record on the relevant record date to receive interest due on the relevantinterest payment date), if redeemed during the 12-month period commencing onDecember 31st of the years set forth below:

 
| **Period**          | ** ** | **Percentage** | ** ** |
|---------------------|------------|----------------|------------|
|                |       |           |       |
| 2009                |       | 103.688        | %          |
| 2010                |       | 101.844        | %          |
| 2011 and thereafter |       | 100.000        | %          |

 

In addition, at any time and from time totime prior to December 31, 2008, the Issuers may redeem in the aggregate up to35% of the original principal amount of the Securities (including AdditionalSecurities) with the Net Cash Proceeds of one or more Equity Offerings at aredemption price (expressed as a percentage of principal amount) of 107.375% ofthe principal amount thereof, plus accrued and unpaid interest, if any, to theredemption date (subject to the right of Holders of record on the relevantrecord date to receive interest due on the relevant interest payment date); *provided, however,*that at least 65% ofthe original principal amount of the Securities (including AdditionalSecurities) must remain outstanding after each such redemption; *provided further*, that each suchredemption occurs within 90 days of the date of closing of such EquityOffering.

 

The Securities may beredeemed, in whole or in part, at any time prior to December 31, 2009 at theoption of the Issuers upon not less than 30 nor more than 60 days’ prior noticemailed by first class mail to each Holder’s registered address, at a redemptionprice equal to 100% of the principal amount of the Securities redeemed plus theApplicable Premium as of, and accrued and unpaid interest, to, the applicableredemption date (subject to the right of holders of record on the relevantrecord date to receive interest due on the relevant interest payment date).

 

If the optional redemption date is on orafter an interest record date and on or before the related interest paymentdate, the accrued and unpaid interest, if any, will be paid to the Person inwhose name the Security is registered at the close of business on such recorddate, 

 

B-6

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and noadditional interest will be payable to Holders whose Securities will be subjectto redemption by the Issuers.

 

In the case of any partial redemption,selection of the Securities for redemption will be made by the Trustee incompliance with the requirements of the principal national securities exchange,if any, on which the Securities are listed or, if the Securities are notlisted, then on a pro rata basis, by lot or by such other method as the Trusteein its sole discretion shall deem to be fair and appropriate, although noSecurities of $1,000 in original principal amount or less will be redeemed inpart. Any such notice to the Trustee may be cancelled at any time prior tonotice of such redemption being mailed to any Holder and shall thereby be voidand of no effect. If any Security is to be redeemed in part only, the notice ofredemption relating to such Security shall state the portion of the principalamount thereof to be redeemed. A new Security in principal amount equal to theunredeemed portion thereof will be issued in the name of the Holder thereofupon cancellation of the original Security. On and after the redemption date,interest will cease to accrue on Securities or portions thereof called forredemption as long as the Issuers have deposited with the Paying Agent funds insatisfaction of the applicable redemption price pursuant to the Indenture.

 

If the Escrow Release Conditions (as definedin the Escrow Agreement) shall not have been fulfilled, or the escrow agentshall not have received the Officers’ Certificate described in Section 7(a) ofthe Escrow Agreement, by January 6, 2006 or the Plan of Reorganization shallhave been amended and such amendments are materially adverse to the holders ofthe Securities or the Plan of Reorganization shall have been terminated priorto such date, the escrow agent, pursuant to the Escrow Agreement, shall,without the requirement of notice to or action by the Issuers, the Trustee orany other Person, notify the Trustee that all of the Securities shall besubject to a special redemption (the “Special Redemption”) in accordancewith Section 5.9 of the Indenture on the second Business Day afterdelivery of such notice but in any event on or prior to January 10, 2006 (the “SpecialRedemption Date”). In the case of a Special Redemption, the Issuers shall,not later than 11:00 A.M. New York City time (or such other time of dayacceptable to the Trustee which will permit it to give the notice referred toin the last paragraph of Section 5.5 of the Indenture) at least twoBusiness Days prior to the Special Redemption Date deliver an Officers’Certificate to the Trustee setting forth (i) that a Special Redemption willoccur, (ii) the Special Redemption Date, (iii) the Special Redemption Price and(iv) the other information specified in Section 5.5 of the Indenture. TheTrustee shall deliver to each Holder a written notice (specifying theinformation set forth in such Officers’ Certificate) of the Special Redemptionat least two Business Days prior to the Special Redemption Date. On the SpecialRedemption Date, the Issuers shall instruct the escrow agent to release cash tothe Paying Agent for the purposes of the Special Redemption. On the SpecialRedemption Date, the Securities shall be redeemed, in whole but not in part, ata redemption price equal to 100% of the principal amount of the Securities,plus accrued and unpaid interest, from, and including, the Issue Date to, butexcluding, the Special Redemption Date, notwithstanding the noncompliance bythe Issuers with the requirements of the second sentence of Section 5.9of the Indenture.

 

6.   RepurchaseProvisions

 

If a Change of Control occurs, unless theIssuers have exercised their right to redeem all of the Securities as describedunder paragraph 5 of the Securities, then such Change 

 

B-7

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of Controlshall constitute a triggering event which shall trigger the obligation of theIssuers to offer to repurchase from each Holder all or any part (equal to$1,000 or an integral multiple thereof) of such Holder’s Securities at apurchase price in cash equal to 101% of the principal amount thereof, plusaccrued and unpaid interest, if any, to the date of repurchase (subject to theright of Holders of record on the relevant record date to receive interest dueon the relevant interest payment date) as provided in, and subject to the termsof, the Indenture.

 

7.   Denominations;Transfer; Exchange

 

The Securities are in registered form withoutcoupons in denominations of principal amount of $1,000 and integral multiplesof $1,000. A Holder may transfer or exchange Securities in accordance with theIndenture. The Registrar may require a Holder, among other things, to furnishappropriate endorsements or transfer documents and to pay a sum sufficient tocover any transfer tax or other governmental taxes and fees required by law orpermitted by the Indenture. The Registrar need not register the transfer of orexchange of any Security for a period beginning 15 days before the mailingof a notice of an offer to repurchase or redeem Securities and ending at theclose of business on the day of such mailing. The Registrar shall not berequired to register the transfer of or exchange of any Security selected forredemption.

 

8.   PersonsDeemed Owners

 

The registered Holder of this Security may betreated as the owner of it for all purposes.

 

9.   UnclaimedMoney

 

Subject to any applicable abandoned propertylaw, the Trustee and the Paying Agent shall pay to the Issuers upon request anymoney held by them for the payment of principal of or premium, if any, orinterest on the Securities that remains unclaimed by the Holders thereof fortwo years, and, thereafter, Holders entitled to the money must look to theIssuers for payment as unsecured general creditors.

 

10.   Defeasance

 

Subject to certain exceptions and conditionsset forth in the Indenture, the Issuers at any time may terminate some or allof their obligations under the Securities and the Indenture if the Issuersdeposit with the Trustee money or U.S. Government Obligations for the paymentof principal, premium, if any, and interest on the Securities to redemption ormaturity, as the case may be.

 

11.   Amendment,Supplement, Waiver

 

Subject tocertain exceptions set forth in the Indenture, (i) the Indenture and theSecurities may be amended or supplemented by the Issuers, the SubsidiaryGuarantors and the Trustee with the written consent of the Holders of at leasta majority in principal amount of the then outstanding Securities and (ii) anydefault (other than with respect to nonpayment (except in accordance with Section6.4 of the Indenture)) or noncompliance with any provision may be waivedwith the written consent of the Holders of a majority in principal amount ofthe then 

 

B-8

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outstandingSecurities, in each case other than in respect of a provision that cannot beamended without the written consent of each Holder affected. Subject to certainexceptions set forth in the Indenture, without the consent of any Holder, theIssuers, the Subsidiary Guarantors and the Trustee may amend or supplement theIndenture or the Securities to cure any ambiguity, omission, defect orinconsistency; provide for the assumption by a successor corporation of theobligations of the Issuers or any Subsidiary Guarantor under the Indenture;provide for uncertificated Securities in addition to or in place ofcertificated Securities (*provided*that the uncertificated Securities are issued in registered form for purposesof Section 163(f) of the Code, or in a manner such that the uncertificatedSecurities are described in Section 163(f) (2) (B) of the Code); add Guaranteeswith respect to the Securities or release a Subsidiary Guarantor upon itsdesignation as an Unrestricted Subsidiary (*provided,however,*that the designation is in accordance with the applicableprovisions of the Indenture); secure the Securities; add to the covenants ofthe Issuers and the Restricted Subsidiaries for the benefit of the Holders orsurrender any right or power conferred upon the Issuers or any RestrictedSubsidiary; make any change that does not adversely affect the rights of anyHolder; comply with any requirement of the SEC in connection with thequalification of the Indenture under the TIA; provide for the issuance of theExchange Securities which shall have terms substantially identical in allrespects to the Initial Securities or the Additional Securities, as the casemay be (except that the transfer restrictions contained in the InitialSecurities or the Additional Securities, as the case may be, shall be modifiedor eliminated as appropriate), and which shall be treated, together with anyoutstanding Initial Securities or Additional Securities, as a single class ofsecurities; release a Subsidiary Guarantor from its obligations under itsSubsidiary Guarantee or the Indenture in accordance with the applicableprovisions of the Indenture; provide for the appointment of a successor trustee(*provided* that the successor trustee isotherwise qualified and eligible to act as such under the terms of theIndenture); make any change necessary to conform the Indenture to theDescription of the Notes in the Offering Memorandum; or provide for theissuance of Additional Securities in accordance with the provisions of theIndenture.

 

12.   Defaultsand Remedies

 

Under theIndenture, Events of Default include (each of which are more specificallydescribed in the Indenture) (i) default in any payment of interest oradditional interest (as required by the Registration Rights Agreement) on anySecurity when due, continued for 30 days; (ii) default in the payment ofprincipal of or premium, if any, on any Security when due at its StatedMaturity, upon optional redemption, upon required repurchase, upon declarationor otherwise; (iii) failure by the Issuers or any Subsidiary Guarantor tocomply with their obligations under Section 4.1 of the Indenture; (iv)failure by the Issuers or any Subsidiary Guarantor to comply for 30 days afternotice with any of their obligations under Article III of the Indenture(other than (x) a failure to purchase Securities which will constitute an Eventof Default under clause (ii) and other than a failure to comply with Section4.1 of the Indenture, which will constitute an Event of Default underclause (iii) and (y) Sections3.14, 3.15, 3.16, 3.17,3.18 and 3.20 of the Indenture, which will constitute an Event ofDefault under clause (v) below); (v) failure by the Issuers or any SubsidiaryGuarantor to comply for 60 days after notice as provided below with their otheragreements contained in the Indenture; (vi) default under any mortgage,indenture or instrument under which there may be issued or by which there maybe secured or evidenced any Indebtedness for money borrowed by the Issuers orany of its Restricted Subsidiaries or New Mirant (subject, solely in the caseof New Mirant, to there being 

 

B-9

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outstandingmore than $100.0 million of unfunded MAI Series A Preferred Shares and MAISeries B Preferred Shares in the aggregate) or the payment of which isguaranteed by the Issuers, any of their Restricted Subsidiaries or New Mirant,other than Indebtedness owed to the Issuers or a Restricted Subsidiary, whethersuch Indebtedness or guarantee now exists, or is created after the date of theIndenture, which default (1) is caused by a failure to pay principal of suchIndebtedness at its final stated maturity or (2) results in the acceleration ofsuch Indebtedness prior to its maturity, and, in each case, the principalamount of any such Indebtedness, together with the principal amount of anyother such Indebtedness under which there has been a payment default or thematurity of which has been so accelerated, aggregates $50.0 million or more; *provided* that this clause (vi) shall not apply toIndebtedness that becomes due as a result of the voluntary sale or transfer ofthe property or assets securing such Indebtedness to a Person that is not anAffiliate of the Issuers so long as such Indebtedness is retired upon such saleor transfer; (vii) certain events set forth in Section 6.1(7) ofthe Indenture of bankruptcy, insolvency or reorganization of either of theIssuers or New Mirant (subject, solely in the case of New Mirant, to therebeing outstanding more than $100.0 million of unfunded MAI Series A PreferredShares and MAI Series B Preferred Shares in the aggregate) or a SignificantSubsidiary of the Issuers or group of Restricted Subsidiaries of the Issuersthat, taken together (as of the latest audited consolidated financial statementsfor the Company and its Restricted Subsidiaries), would constitute aSignificant Subsidiary; (viii) failure by the Company or any SignificantSubsidiary or group of Restricted Subsidiaries that, taken together (as of thelatest audited consolidated financial statements for the Company and itsRestricted Subsidiaries), would constitute a Significant Subsidiary to payfinal judgments aggregating in excess of $50.0 million (net of any amounts thata reputable and creditworthy insurance company has acknowledged liability forin writing), which judgments are not paid, discharged or stayed for a period of60 days; or (ix) any Subsidiary Guarantee of a Significant Subsidiary or groupof Restricted Subsidiaries that taken together as of the latest audited consolidatedfinancial statements for the Company and its Restricted Subsidiaries wouldconstitute a Significant Subsidiary ceases to be in full force and effect(except as contemplated by the terms of the Indenture) or is declared null andvoid in a judicial proceeding or any Subsidiary Guarantor that is a SignificantSubsidiary or group of Subsidiary Guarantors that taken together as of thelatest audited consolidated financial statements of the Company and itsRestricted Subsidiaries would constitute a Significant Subsidiary expresslydenies or disaffirms its obligations under the Indenture or its SubsidiaryGuarantee. However, a default under clauses (iv) and (v) will notconstitute an Event of Default until the Trustee or the Holders of 25% inprincipal amount of the outstanding Securities notify the Issuers of thedefault and the Issuers do not cure such default within the time specified inclauses (iv) and (v) hereof after receipt of such notice.

 

If an Event of Default (other than an Eventof Default described in (vii) hereof) occurs and is continuing, the Trustee bynotice to the Issuers, or the Holders of at least 25% in principal amount ofthe outstanding Securities by notice to the Issuers and the Trustee, may, andthe Trustee at the request of such Holders shall, declare the principal of,premium, if any, and accrued and unpaid interest, if any, on all the Securitiesto be due and payable. If an Event of Default described in (vii) hereof occursand is continuing, the principal of, premium, if any, and accrued and unpaidinterest on all the Securities will become and be immediately due and payablewithout any declaration or other act on the part of the Trustee or any Holders.

 

B-10

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Holders may not enforce the Indenture or theSecurities except as provided in the Indenture. The Trustee may refuse toenforce the Indenture or the Securities unless it receives indemnity orsecurity reasonably satisfactory to it. Subject to certain limitations, Holdersof a majority in principal amount of the Securities may direct the Trustee inits exercise of any trust or power. The Trustee may withhold from Holdersnotice of any continuing Default or Event of Default (except a Default or Eventof Default in payment of principal, premium, if any, or interest) if itdetermines in good faith that withholding notice is in their interest.

 

13.   TrusteeDealings with the Issuers

 

Subject to certain limitations set forth inthe Indenture, the Trustee under the Indenture, in its individual or any othercapacity, may become the owner or pledgee of Securities and may otherwise dealwith and collect obligations owed to it by the Issuers, the SubsidiaryGuarantors or their Affiliates and may otherwise deal with the Issuers, theSubsidiary Guarantors or their Affiliates with the same rights it would have ifit were not Trustee.

 

14.   NoRecourse Against Others

 

No director, officer, employee, incorporatoror stockholder of the Issuers or a Subsidiary Guarantor, as such, shall haveany liability for any obligations of the Issuers or such Subsidiary Guarantorunder the Securities, the Indenture or any Subsidiary Guarantee or for anyclaim based on, in respect of, or by reason of, such obligations or theircreation. Each Holder of Securities by accepting a Security waives and releasesall such liability to the extent permitted by applicable law. The waiver andrelease are part of the consideration for issuance of the Securities. Suchwaiver may not be effective to waive liabilities under the federal securitieslaws, and it is the view of the SEC that such a waiver is against publicpolicy.

 

15.   Authentication

 

This Security shall not be valid until anauthorized signatory of the Trustee (or an authenticating agent acting on itsbehalf) manually signs the certificate of authentication on the other side ofthis Security.

 

16.   Abbreviations

 

Customary abbreviations may be used in thename of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT(= tenants by the entirety), JT TEN (= joint tenants with rights ofsurvivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (=Uniform Gift to Minors Act).

 

17.   CUSIP,Common Code and ISIN Numbers

 

The Issuers have caused CUSIP, Common Code orISIN numbers, if applicable, to be printed on the Securities and has directedthe Trustee to use CUSIP, Common Code or ISIN numbers, if applicable, innotices of redemption as a convenience to Holders. No representation is made asto the accuracy of such numbers either as printed on the Securities or ascontained in any notice of redemption, and reliance may be placed only on theother identification numbers placed thereon.

 

B-11

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18.   GoverningLaw

 

This Security shall be governed by, andconstrued in accordance with, the laws of the State of New York.

 

19.   Effectivenessof Provisions of the Indenture for MNA and the Subsidiary Guarantors

 

The provisions of the Indenture shall not beeffective for MNA and the Subsidiary Guarantors, with the exception of Section3.21, until the Emergence Date. On the Emergence Date, Escrow LLC will mergewith and into MNA with MNA as the surviving entity and MNA will assume all theobligations of Escrow LLC hereunder.

 

The Issuers will furnish to any Holder uponwritten request and without charge to the Holder a copy of the Indenture. Requestsmay be made to:

 

Mirant North America Escrow, LLC

Mirant North America, LLC

MNA Finance Corp.

 

1155 Perimeter Center West, Suite 100

Atlanta, GA 30338

Attention:  Treasurer

 

B-12

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ASSIGNMENT FORM

 

To assign thisSecurity, fill in the form below:

 

I or we assignand transfer this Security to:

 
|                                                                                                                                                                                                                                                                                                                                      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Print or type assignee’s name, address and  zip code)                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                      |
| (Insert  assignee’s social security or tax I.D. No.)                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                      |
| and  irrevocably appoint                                   agent to transfer this Security on the books of the Issuers. The agent may  substitute another to act for him. |
|                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                      |
| Date:                                                                                                                                                                                                                                                                                                                                     |   | Your  Signature: |   |
|                                                                                                                                                                                                                                                                                                                                      |   |
| Signature  Guarantee:                                                                                                                                                                                                                                                                                                                     |   |
| (Signature  must be guaranteed)                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                      |
| Sign exactly  as your name appears on the other side of this Security.                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                           |  |  |  |  |

 

Thesignature(s) should be guaranteed by an eligible guarantor institution (banks,stockbrokers, savings and loan associations and credit unions with membershipin an approved signature guarantee medallion program), pursuant to SEC Rule17Ad-15.

 

B-13

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[TO BEATTACHED TO GLOBAL SECURITIES]

 

SCHEDULE OFINCREASES AND DECREASES IN GLOBAL SECURITY

 

The following increases and decreases in thisGlobal Security have been made:

 
| **Date of    Decrease   or    Increase** | ** ** | **Amount of   decrease in   Principal Amount   of this Global   Security** | ** ** | **Amount of   increase in   Principal Amount   of this Global   Security** | ** ** | **Principal Amount   of this Global   Security following   such decrease or   increase** | ** ** | **Signature of   authorized   signatory of   Trustee or   Securities   Custodian** | ** ** |
|--------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------|------------|
|                                                         |       |                                                                                                                    |       |                                                                                                                    |       |                                                                                                                                       |       |                                                                                                                       |       |
|                                                         |       |                                                                                                                    |       |                                                                                                                    |       |                                                                                                                                       |       |                                                                                                                       |       |
|                                                         |       |                                                                                                                    |       |                                                                                                                    |       |                                                                                                                                       |       |                                                                                                                       |       |

 

B-14

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OPTION OFHOLDER TO ELECT PURCHASE

 

If you elect to have this Security purchasedby the Issuers pursuant to Section 3.5 or 3.11 of theIndenture, check either box:

| o   |   | o    |
|-----|--------|------|
| 3.5 |   | 3.11 |

 

If you want to elect to have only part ofthis Security purchased by the Issuers pursuant to Section 3.5 or Section 3.11of the Indenture, state the amount in principal amount (must be integralmultiple of $1,000): $                                                                                             

 
| Date:                                                                  |   |   | Your  Signature: |   |
|------------------------------------------------------------------------|--------|--------|------------------|--------|
| (Sign exactly as your name appears on the  other side of the Security) |
|                                                                   |
| Signature  Guarantee:                                                  |   |
| (Signature  must be guaranteed)                                        |
|                                                                        |        |        |                  |        |  |

 

Thesignature(s) should be guaranteed by an eligible guarantor institution (banks,stockbrokers, savings and loan associations and credit unions with membershipin an approved signature guarantee medallion program), pursuant to SEC Rule17Ad-15.

 

B-15

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EXHIBIT C

 

FORM OF INDENTURE SUPPLEMENT TO ADDSUBSIDIARY GUARANTORS

 

This Supplemental Indenture, dated as ofDecember          , 2005 (this “SupplementalIndenture” or “Guarantee”), among [*name offuture Subsidiary Guarantor*] (the “Guarantor”), Mirant NorthAmerica Escrow, LLC, a Delaware limited liability company (“Escrow LLC”),Mirant North America, LLC, a Delaware limited liability company (the “Company”and together with the Escrow LLC, the “LLC Issuer”), MNA Finance Corp.,a Delaware corporation (the “Corp. Co-Issuer” and, together with the LLCIssuer, the “Issuers”), the Subsidiary Guarantors (as hereinafterdefined) from time to time parties hereto and Law Debenture Trust Company ofNew York, a national banking association (the “Trustee”), as Trustee.

 

W I T N E S SE T H:

 

WHEREAS, the Issuers, the SubsidiaryGuarantors and the Trustee have heretofore executed and delivered an Indenture,dated as of December 23, 2005 (as amended, supplemented, waived or otherwisemodified, the “Indenture”), providing for the issuance of 7.375% SeniorNotes due 2013 of the Issuers (the “Securities”);

 

WHEREAS, Section 3.13 of theIndenture provides that under certain circumstances the Issuers are required tocause each Restricted Subsidiary that Guarantees, on the Emergence Date or anytime thereafter, any Indebtedness of the Company or any Subsidiary Guarantor(excluding a Guarantee by a Non-Guarantor Restricted Subsidiary of Indebtednessissued by a Non-Guarantor Restricted Subsidiary) to execute and deliver to theTrustee a supplemental indenture pursuant to which such Restricted Subsidiarywill unconditionally Guarantee, on a joint and several basis with the otherSubsidiary Guarantors, the full and prompt payment of the principal of,premium, if any, and interest (including Additional Interest, if any) on theSecurities on a senior unsecured basis; and

 

WHEREAS, pursuant to Section 10.1of the Indenture, the Trustee, the Issuers and the Subsidiary Guarantors areauthorized to execute and deliver this Supplemental Indenture to amend orsupplement the Indenture, without the consent of any Holder;

 

NOW, THEREFORE, in consideration of theforegoing and for other good and valuable consideration, the receipt of whichis hereby acknowledged, the Guarantor, the Issuers, the other SubsidiaryGuarantors and the Trustee mutually covenant and agree for the equal and ratablebenefit of the Holders of the Securities as follows:

 

ARTICLE IDefinitions

 

SECTION1.1  Defined Terms. As used in this Supplemental Indenture, termsdefined in the Indenture or in the preamble or recital hereto are used hereinas therein defined, 

 

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except thatthe term “Holders” in this Guarantee shall refer to the term “Holders”as defined in the Indenture and the Trustee acting on behalf or for the benefitof such Holders. The words “herein,” “hereof” and “hereby” and other words ofsimilar import used in this Supplemental Indenture refer to this SupplementalIndenture as a whole and not to any particular section hereof.

 

ARTICLE IIAgreement to be Bound; Guarantee

 

SECTION2.1  Agreement to be Bound. The Guarantor hereby becomes a party tothe Indenture as a Subsidiary Guarantor and as such will have all of the rightsand be subject to all of the obligations and agreements of a SubsidiaryGuarantor under the Indenture. The Guarantor agrees to be bound by all of theprovisions of the Indenture applicable to a Subsidiary Guarantor and to performall of the obligations and agreements of a Subsidiary Guarantor under theIndenture.

 

SECTION2.2   Guarantee. TheGuarantor agrees, on a joint and several basis with all the existing SubsidiaryGuarantors, to fully, unconditionally and irrevocably Guarantee to each Holderof the Securities and the Trustee the Guarantor Obligations pursuant to ArticleXI of the Indenture on a senior unsecured basis.

 

ARTICLE IIIMiscellaneous

 

SECTION3.1   Notices. All noticesand other communications to the Guarantor shall be given as provided in theIndenture to the Guarantor, at its address set forth below, with a copy to theIssuers as provided in the Indenture for notices to the Issuers.

 

SECTION3.2   Parties. Nothingexpressed or mentioned herein is intended or shall be construed to give anyPerson, firm or corporation, other than the Holders and the Trustee, any legalor equitable right, remedy or claim under or in respect of this SupplementalIndenture or the Indenture or any provision herein or therein contained.

 

SECTION3.3   Governing Law. ThisSupplemental Indenture shall be governed by, and construed in accordance with,the laws of the State of New York.

 

SECTION3.4  Ratification of Indenture; Supplemental Indentures Part ofIndenture. Except as expressly amended hereby, the Indenture is in allrespects ratified and confirmed and all the terms, conditions and provisionsthereof shall remain in full force and effect. This Supplemental Indentureshall form a part of the Indenture for all purposes, and every Holder ofSecurities heretofore or hereafter authenticated and delivered shall be boundhereby. The Trustee makes no representation or warranty as to the validity orsufficiency of this Supplemental Indenture.

 

C-2

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SECTION3.5   Counterparts. Theparties hereto may sign one or more copies of this Supplemental Indenture incounterparts, all of which together shall constitute one and the sameagreement.

 

SECTION3.6   Headings. The headingsof the Articles and the Sections in this Guarantee are for convenience ofreference only and shall not be deemed to alter or affect the meaning orinterpretation of any provisions hereof.

 

SECTION 3.7   Trustee. The Trustee makes norepresentation as to the validity or sufficiency of this Supplemental Indenture.The recitals and statements herein are deemed to be those of the Guarantor andnot of the Trustee.

 

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IN WITNESS WHEREOF, the parties hereto havecaused the Supplemental Indenture to be duly executed as of the date firstabove written.

 
|   | [*SECURITIES GUARANTOR*],                             |
|--------|-------------------------------------------------------|
|   | as a Guarantor                                        |
|   |                                                  |
|   |                                                  |
|   | By:                                                   |   |   |
|   |                                                  | Name: |
|   |                                                  | Title: |
|   |                                                  | [*Address*] |
|   |                                                  |   |
|   |                                                  |   |
|   | LAW DEBENTURE TRUST COMPANY OF NEW   YORK, as Trustee |
|   |                                                  |
|   |                                                  |
|   | By:                                                   |   |   |
|   |                                                  | Name: |
|   |                                                  | Title: |
|   |                                                  |   |
|   |                                                  |   |
|   | MIRANT NORTH AMERICA, LLC                             |
|   |                                                  |
|   |                                                  |
|   | By:                                                   |   |   |
|   |                                                  | Name: |
|   |                                                  | Title: |
|   |                                                  |   |
|   |                                                  |   |
|   | MNA FINANCE CORP.                                     |
|   |                                                  |
|   |                                                  |
|   | By:                                                   |   |   |
|   |                                                  | Name: |
|   |                                                  | Title: |
|   |                                                  |   |
|   |                                                  |   |
|   | MIRANT TEXAS MANAGEMENT, LLC                          |
|   |                                                  |
|   |                                                  |
|   | By                                                    |   |   |
|   |                                                  | Name: |
|   |                                                  | Title: |

 

----

 
|   | MIRANT TEXAS, LP       |
|--------|------------------------|
|   |                   |
|   |                   |
|   | By                     |   |   |
|   |                   | Name: |
|   |                   | Title: |
|   |                   |   |
|   |                   |   |
|   | MIRANT CALIFORNIA, LLC |
|   |                   |
|   |                   |
|   | By                     |   |   |
|   |                   | Name: |
|   |                   | Title: |
|   |                   |   |
|   |                   |   |
|   | MIRANT POTRERO, LLC    |
|   |                   |
|   |                   |
|   | By                     |   |   |
|   |                   | Name: |
|   |                   | Title: |
|   |                   |   |
|   |                   |   |
|   | MIRANT DELTA, LLC      |
|   |                   |
|   |                   |
|   | By                     |   |   |
|   |                   | Name: |
|   |                   | Title: |
|   |                   |   |
|   |                   |   |
|   | MIRANT CANAL, LLC      |
|   |                   |
|   |                   |
|   | By                     |   |   |
|   |                   | Name: |
|   |                   | Title: |
|   |                   |   |
|   |                   |   |
|   | MIRANT KENDALL, LLC    |
|   |                   |
|   |                   |
|   | By                     |   |   |
|   |                   | Name: |
|   |                   | Title: |

 

C-2

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|   | MIRANT ZEELAND, LLC              |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | By:                              |   |   |
|   |                             | Name: |
|   |                             | Title: |
|   |                             |   |
|   |                             |   |
|   | MIRANT SPECIAL PROCUREMENT, INC. |
|   |                             |
|   |                             |
|   | By:                              |   |   |
|   |                             | Name: |
|   |                             | Title: |
|   |                             |   |
|   |                             |   |
|   | MLW DEVELOPMENT, LLC             |
|   |                             |
|   |                             |
|   | By:                              |   |   |
|   |                             | Name: |
|   |                             | Title: |

 

C-3

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