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                                                               EXHIBIT 10.43

                       Confidential Materials omitted and
                          filed separately with the
                       Securities and Exchange Commission.
                          Asterisks denote omissions.

THIS AGREEMENT is made on the 20TH day of____December _____ 2001

(Effective Date).

BETWEEN

(1)   Minnesota Mining and Manufacture Company ("3M") and 3M Innovative
      Properties Company ("3M IPC"), both having a principal office at 3M
      Center, Building 275-3E-10, St. Paul, MN 55144-1000, USA).

(2)   Sepracor Inc. ("SEPRACOR"), having a principal office at 111 Locke Drive,
      Marlborough, MA 01752.

WHEREAS

A.    3M has experience and technology in the formulation, scale-up, and
      manufacture of pharmaceutical products in aerosols for inhalation therapy.

B.    SEPRACOR wishes 3M to scale-up an aerosol product that SEPRACOR has
      developed containing non-CFC propellants and a SEPRACOR proprietary
      compound known as levalbuterol tartrate which SEPRACOR wishes to market
      for inhalation therapy.

C.    If the scale-up is successful and SEPRACOR decides to market the resulting
      aerosol product or aerosol products, SEPRACOR shall purchase its
      requirements of the product or products from 3M subject to the terms and
      conditions of this Agreement and a Supply Agreement (as defined below), or
      if 3M is unable to, or chooses not to, supply, 3M shall provide SEPRACOR
      with reasonable assistance and licenses as set out in this Agreement to
      manufacture or have manufactured the product.

D.    3M is willing to conduct the scale-up subject to the terms of this
      Agreement, with the understanding that there is no guarantee that the
      program will be successful or that 3M will ultimately supply marketable
      product.

1.   INTERPRETATION AND DEFINITIONS

1.1   The terms defined in this Article 1 shall for all purposes in this
      Agreement have the meanings specified in this Article 1.

      1.1:1 The headings in this Agreement shall not affect its interpretation.

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      1.1:2 Throughout this Agreement, whenever required by the context, the
      singular includes the plural and vice versa and any gender includes any
      other gender.

1.1:3 The recitals and schedules to this Agreement constitute an integral part
      of this Agreement. In the event of conflict or inconsistency between any
      of the terms and conditions of this Agreement, the conflict or
      inconsistency shall be resolved according to the following order of
      priority: the clauses of the Agreement, the schedules, the recitals.

1.2   "Affiliate" shall mean:

      1.2:1 any individual who or Entity ("Entity" shall mean any
      corporation, firm, partnership, proprietorship, other form of business
      organization) that, in whatever country organized or resident, directly
      or indirectly through one or more intermediaries, is controlled by, or
      is under common control with, or controls, a Party; or

      1.2:2 any Entity in which any Party or any individual or Entity recited
      in the preceding Section (1) directly or indirectly through one or more
      intermediaries collectively has at least a forty percent (40%)
      ownership or voting rights interest (whether through stock ownership,
      stock power, voting proxy, or otherwise) or has the maximum ownership
      interest it is permitted to have in the Entity in the country where
      such Entity exists.

1.3   "Product" means a press-and-breathe inhaler containing a pressurized
      aerosol canister with a metered dose valve filled with a formulation of
      the Compound (as defined below) that SEPRACOR has selected having the
      formulation, and meeting the Specifications, set forth in Schedule 1.12.
      The term "Licensed Product" means Product containing the Compound
      levalbuterol tartrate. "Tartrate" shall mean any tartaric acid salt,
      [**].

1.4   "Authority" means a governmental agency, in a country or territory in
      which SEPRACOR proposes to sell Product, responsible for granting licences
      and/or approvals permitting the sale of the Product, in such country or
      territory.

1.5   "Compound" means the compound known as levalbuterol, including any salt,
      ester, solvate, clathrate, or polymorph thereof.

1.6   "SEPRACOR Components" means all components and ingredients, other than
      Compound, supplied by or on behalf of SEPRACOR for manufacturing Licensed
      Product.

1.7   "Scale-up Program" means the development work conducted pursuant to the
      protocol and the work schedule indicating milestones and activities
      annexed hereto as Schedule 1.7 as amended in writing from time to time in
      accordance with the terms of this Agreement.

1.8   "3M Confidential Information" means confidential information disclosed by
      3M to SEPRACOR in the course of and pursuant to this Agreement relating to
      aerosol

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      inhalation, or aerosol compositions, including: the specifications and
      chemistry of aerosol formulations of Compound developed by 3M or its
      Affiliates; metered dose inhaler devices and their specifications; the
      methods and techniques used by 3M to manufacture aerosol inhalers and
      metered dose devices; and confidential information directly or
      indirectly provided by 3M to assist SEPRACOR to obtain a licence or
      approval permitting the sale of Licensed Product, including clinical
      results for metered dose devices

1.9   "SEPRACOR Confidential Information" means confidential information
      disclosed by SEPRACOR to 3M in the course of and pursuant to this
      Agreement relating to Compound, aerosol inhalation, or aerosol
      compositions, including: the specifications and chemistry of formulations
      of the Compound developed by SEPRACOR or its Affiliates; metered dose
      inhaler devices and their specifications for delivery of Compound;
      SEPRACOR's clinical and non-clinical development plans; SEPRACOR's
      clinical data; and forecasts of requirements of Licensed Product.

1.10  "Parties" mean 3M, 3M IPC and SEPRACOR and their permitted assigns, and "a
      Party" means 3M, 3M IPC or SEPRACOR and their permitted assigns.

1.11  "Supply Agreement" means the supply agreement referred to in Article 8
      below.

1.12  "Specifications" means those specifications for Licensed Product,
      Compound, or SEPRACOR Components as established in writing by SEPRACOR,
      and subject to approval by 3M, which approval shall not unreasonably be
      withheld or delayed, and as may be amended from time to time in writing by
      SEPRACOR, subject to approval by 3M, which approval shall not unreasonably
      be withheld or delayed. Initial Specifications, once approved by both
      parties, will be set forth in Schedule 1.12.

1.13  "Test Methods" means those methods used for testing and releasing
      Compound, SEPRACOR Components, or Licensed Product, agreed upon in writing
      by the Parties and as amended from time to time, subject to approval by
      the Parties, which approval shall not unreasonably be withheld or delayed,
      provided that no Party shall have the obligation to provide to the other
      Party direct access to Test Methods that are provided by way of a DMF.

1.14  "3M Patent Rights" means all patents and patent applications that are
      owned or controlled by 3M or an Affiliate thereof and that cover
      manufacture, use, or sale of Licensed Product, including but not limited
      to certain of those patents claiming benefit of priority to, or having a
      substantially identical disclosure as, Great Britain application
      GB8828477, filed December 6, 1988, U.S. application 442,119, filed
      November 28, 1989, U.S. application 92,001, filed July 15, 1993, and all
      applicable continuations, continuations-inpart, divisionals, extensions,
      supplemental protection certificates, utility models, reissues, and
      reexaminations thereof.

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1.15  "3M Know-How" means 3M Confidential Information and any other information
      or data of 3M or 3M IPC useful in developing, optimizing, manufacturing,
      or gaining regulatory approval of Licensed Product, including any
      toxicological data, provided by 3M.

1.16  "Net Sales Price" shall mean the price received by SEPRACOR, their
      Affiliates, or permitted sublicensees for Licensed Product from
      wholesalers, distributors, managed healthcare organizations, or similar
      entities at the same level of distribution in arms length transactions
      involving cash as the sole consideration, which shall not include
      transfers within or between SEPRACOR, their Affiliates or sublicensees,
      after deduction of freight and insurance, rebates and chargebacks granted
      to managed health care organizations or to federal, state and local
      governments, their agencies, and purchasers and reimbursers or to trade
      customers, including but not limited to, wholesalers and chain and
      pharmacy buying groups, other trade and quantity discounts actually given,
      sales or value added taxes, and credits and allowances for returns.
      SEPRACOR's customers shall include purchasers in the chain of commerce who
      enter into agreements with SEPRACOR as to price, even though legal title
      to Licensed Product does not pass directly from SEPRACOR to such customer,
      and even though payment for Licensed Product is not made by such customer
      directly to SEPRACOR. Licensed Product sold in transactions involving
      consideration other than or in addition to cash shall be deemed to have
      been sold at the average price charged by SEPRACOR in an arm's length cash
      transaction to the applicable class of trade in the relevant annual period
      (or, if all transactions in the applicable class of trade involve
      consideration other than or in addition to cash, the average price charged
      by SEPRACOR in an arm's length cash transaction in the relevant annual
      period irrespective of class of trade). The preceding sentence shall not
      apply to Licensed Product samples provided free of charge to physicians in
      the course of promoting Licensed Product, nor shall it apply to Licensed
      Product provided free of charge as part of a contract involving Licensed
      Product only.

2.    TERM

2.1   This Agreement shall commence on the effective date set forth above and
      (subject to earlier termination according to the terms set out in this
      Agreement) shall expire on the first to occur of the date (i) Licensed
      Product is approved for sale in the U.S. or Europe, or (ii) five years
      from the Effective Date. However, this agreement may be extended upon
      written agreement of the parties.

3.    CONDUCT OF THE SCALE-UP PROGRAM

3.1   During the Scale-up Program, each Party shall be licensed free-of-charge
      under those rights of the other Party as are required for the sole purpose
      of conducting the Scale-up Program of Licensed Product. Further, for the
      avoidance of doubt and notwithstanding anything in this Agreement to the
      contrary, SEPRACOR shall have no right or license to 3M Patent Rights or
      3M Know-How, including the right to reference regulatory data, and

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      3M shall have no obligation to develop, supply, license, or provide
      access to 3M Know-How, including any regulatory data, for any Product
      other than Licensed Product

3.2   3M and SEPRACOR shall each identify the contact person at their respective
      offices to serve as the recipient of communications concerning the
      Scale-up Program.

3.3   Each Party shall use good faith reasonable efforts to perform those duties
      assigned to it in the Scale-up Program.

3.4   The Parties may by written agreement amend the Scale-up Program. Consent
      to amend the Scale-up Program shall not be unreasonably withheld or
      delayed, provided that an appropriate adjustment shall be made in the
      timetable, man-hours or other matters affected thereby to allow for any
      variation in the time required to complete the Scale-up Program as a
      consequence of an amendment.

3.5   3M shall notify SEPRACOR without undue delay if it becomes aware that the
      time estimated for a task or tasks set out in the Scale-up Program will be
      insufficient to perform such task or tasks. If the new time estimate
      exceeds the original estimate by more than 20%, the Parties shall discuss
      how to minimize the additional time.

4.    MEETINGS AND REPORTS RELATING TO THE SCALE-UP PROGRAM

4.1   A Joint Coordinating Committee (JCC), with a minimum of 2 persons each
      from 3M and SEPRACOR, shall coordinate and monitor conduct of the
      Development Program. JCC shall meet quarterly. 3M shall provide quarterly
      reports to SEPRACOR on the progress of the Scale-up Program and shall
      promptly notify SEPRACOR of any event that requires a decision by SEPRACOR
      or will have a serious effect on the progress of the Scale-up Program.

4.2   3M recognizes that SEPRACOR may elect to make changes to the Scale-up
      Program or Product definition during the course of development and scale
      up. If SEPRACOR elects to make such changes, 3M will upon request propose
      a revised Scale-up Program and budget.

5.    SUPPLY OF COMPOUND AND COMPONENTS

5.1   SEPRACOR shall supply 3M (i) [**] with sufficient quantities of the
      Compound and SEPRACOR Components as determined by the Scale-up Program
      to enable 3M to conduct the Scale-up Program and (ii) a certificate of
      analysis for the Compound and SEPRACOR Components. Any Compound and
      SEPRACOR Components unused by 3M at the termination of the Scale-up
      Program shall be returned upon request to SEPRACOR.

5.2   SEPRACOR shall promptly provide 3M with all information in or coming into
      its possession concerning the Compound that 3M will reasonably require for
      the safe handling, storage, testing, use and transport of the Compound.

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6.    CLINICAL STUDIES AND TOXICOLOGY STUDIES

6.1   SEPRACOR shall [**] be responsible for any clinical studies and,
      except as provided in Sections 6.2 and 6.3 below, any toxicology
      studies and all contact with any Authority concerning Licensed Product,
      provided that 3M shall have the right to require SEPRACOR to use a right
      of reference or analogous means to meet any Authority's disclosure
      requirements concerning 3M Confidential Information to the extent
      permitted by the Authorities. 3M shall, if requested, consult with and
      provide reasonable assistance to SEPRACOR in clinical trials as
      appropriate, provided that 3M's time for such consulting and assistance
      shall be paid by SEPRACOR and SEPRACOR shall ultimately bear all
      responsibility for any use of information provided by 3M (including use in
      regulatory filings and any third party liability for all such clinical
      trials).

6.2   3M will establish a Drug Master File (DMF) with appropriate information
      for the CMC section of the regulatory submissions for Licensed Product,
      and will provide a letter of authorization to FDA or health authorities to
      access the DMF for regulatory submissions for Licensed Product. In
      submissions where a right of reference is demonstrated to be inadequate,
      3M shall prepare a proprietary dossier including information which is
      necessary or required by law to obtain regulatory approval of Licensed
      Product. 3M shall respond promptly to all inquiries by any Authority
      concerning the proprietary dossier or the DMF and share the general
      substance of the inquiry and the response with SEPRACOR. The 3M
      proprietary dossier will be provided to (a) the applicable regulatory
      agency or (b) SEPRACOR, at 3M's election. Provided, however, that neither
      the forgoing, the information provided pursuant to Section 6.3 nor
      anything else in this Agreement shall be construed as a warranty by 3M
      that any DMF or other regulatory dossier will be approved by any
      Authority.

6.3   3M agrees to provide SEPRACOR as of the Effective Date, with:

          (a)  a right of reference to (i) data held by the International
               Pharmaceutical Aerosol Consortium for Toxicology Testing
               of}IFA-134a ("IPACT I") consistent with 3M's obligations to IPACT
               I, and (ii) any additional 3M data for which 3M has the right to
               grant a right of reference relating specifically to [**]
               that has previously been required by FDA in connection with
               approval of an [**]; and

          (b)  a right of reference that would authorize FDA to access all
               studies conducted by 3M or contracted by 3M in [**],
               including but not limited to toxicological and chronic human
               safety data and all pertinent cross-referenced information, (as
               approved on August 15, 1996) expressly for the purpose of review
               to substantiate the pre-clinical and clinical safety of albuterol
               in a formulation containing [**]. 3M agrees to provide a right
               to reference such information only for purposes of facilitating
               regulatory approval of Licensed Product and SEPRACOR shall not

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               use or disclose such information for any other purpose, including
               clinical comparisons between levalbuterol and albuterol apart
               from those comparisons that facilitate evaluation of the safety
               of levalbuterol in a formulation containing [**].

      3M shall respond promptly to all inquiries by any Authority concerning
      the information referenced by SEPRACOR pursuant to Sections 6.3 (a) and
      6.3(b), and shall share the general substance of the inquiry and the
      response with SEPRACOR. For the avoidance of doubt, the Parties
      expressly agree that 3M does not grant to SEPRACOR, and this Agreement
      creates no obligation on 3M to grant to SEPRACOR, any right of
      reference to safety data concerning the drug substance albuterol
      (including salts such as the sulfate) alone or to data not generated by
      or on behalf of 3M.

6.4   If requested by SEPRACOR and in accordance with the Scale-up Program, 3M
      shall manufacture and supply SEPRACOR with Licensed Product, including
      Licensed Product for use in clinical studies or toxicology studies, at
      prices calculated in the manner set out in Schedule 6.4 using reasonable
      endeavors to supply SEPRACOR in time to meet its needs. SEPRACOR shall
      pay 3M's invoices for such Licensed Products within [**] days of the
      date of 3M's invoice. Licensed Product that is to be used in clinical
      trials shall be manufactured and tested under cGMPs and the applicable
      Investigational New Drug Application. 3M will perform release testing of
      all batches to agreed upon Specifications. SEPRACOR shall have the right
      within 45 days to test batches on an audit basis prior to accepting the
      batch, however SEPRACOR shall have no right to delay payment. SEPRACOR
      will have a right to credit for Licensed Product, only in the event
      Licensed Product is found not to meet the warranty set forth in Section
      10.6.

6.5   3M shall allow SEPRACOR to perform a cGMP compliance audit promptly after
      signing of this Agreement on a date as agreed to by the parties.

6.6   3M and SEPRACOR shall discuss and agree to quality assurance and quality
      control responsibilities, to be set forth as Schedule 6.6 and signed by
      the Parties, including a batch release and record review process utilizing
      certificates of compliance and analysis and other reporting documents as
      appropriate between 3M and SEPRACOR. 3M shall, unless otherwise agreed, be
      responsible for testing raw materials and components, other than Compound
      and SEPRACOR Components, in accordance with 3M written specifications.
      SEPRACOR shall provide to 3M all methods currently in use at a time during
      development to be agreed upon by the parties, and 3M shall be responsible
      for development of any methods used for process measurements and any
      additional raw material test methods.

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6.7   If either party performs stability storage and stability testing of
      supplies, that Party will provide stability reports to the other Party
      corresponding to industry accepted pull points. Reports to include
      individual data points if deemed necessary by the receiving Party.

6.8   3M acknowledges that SEPRACOR has filed an IND under which Licensed
      Product will be tested and developed, and that SEPRACOR will be required
      to make regulatory commitments to FDA with respect to the development of
      Licensed Product. SEPRACOR shall use good faith reasonable efforts to
      inform 3M of such commitments and to consult 3M in connection with any
      such commitments that raise CMC issues and shall reimburse 3M for
      additional costs reasonably incurred as a result of such commitments, and
      3M shall use good faith reasonable efforts in order to operate in a manner
      that facilitates compliance with such commitments.

6.9   For the avoidance of doubt, the parties expressly agree that nothing in
      this Agreement shall be construed to limit SEPRACOR's right to conduct
      studies, including but not limited to preclinical and clinical studies,
      involving comparisons between albuterol and levalbuterol, or SEPRACOR's
      right to use or disclose the results of such studies.

7.    PAYMENT FOR ACCESS TO 3M CLINICAL INFORMATION AND THE SCALE-UP PROGRAM

7.1   In consideration for the rights of reference granted by 3M to SEPRACOR
      pursuant to Section 6.3 hereof, within [**] days of the Effective
      Date SEPRACOR shall pay to 3M a data access fee of [**] Dollars [**].

7.2   SEPRACOR shall pay 3M a service fee of [**] dollars $[**] per hour spent
      on the Scale-up Program, including time spent in writing reports,
      attending meetings, and managing the project; provided, however, that for
      the first [**] hours of work invoiced by 3M in 2002, which is the minimum
      amount of work SEPRACOR shall authorize 3M to conduct in 2002, under this
      Agreement in connection with the Scale-up Program, the service fee shall
      be [**] dollars $[**] per hour. Any other provision of this Agreement
      notwithstanding, SEPRACOR shall not have the right to terminate this
      Agreement, except for cause under section 12.1, until after the first
      [**] hours of work for 2002 are invoiced by 3M and paid by SEPRACOR under
      this Agreement in connection with the Scale-up Program. Units
      manufactured at 3M's production site will be charged as set forth in
      Schedule 6.4 based on theoretical batch size. Invoices for hourly work
      shall be submitted by 3M monthly and payment shall be made to 3M by
      SEPRACOR within [**] days of the date of 3M's invoice.

7.3   In addition to the payments in Section 7.2 above, SEPRACOR shall reimburse
      3M the reasonable cost of travel, subsistence and accommodation for travel
      in connection with the Scale-up Program at SEPRACOR's request or with
      SEPRACOR's written approval, such reimbursement to be consistent with 3M's
      internal travel policy.

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7.4   The hourly rate of [**] dollars $[**] shall remain unchanged until the
      31st December 2001, after which it may be increased [**] period to take
      into account reasonable increases in 3M's costs since the last increase
      in the hourly rate, provided that such adjustments shall not exceed the
      annual increase in the PPI (producer price index) from the prior calendar
      year.

8.    SUPPLY AGREEMENT

8.1   3M may exercise any right or fulfill any obligation in this Article 8
      itself or may procure an Affiliate to exercise such right or fulfill such
      obligation.

8.2   If SEPRACOR decides to market Licensed Product in any country or countries
      of SEPRACOR's choice, no later than the initiation of Phase III clinical
      studies SEPRACOR shall give prompt written notice to 3M following which
      the Parties shall, negotiate in good faith an exclusive Manufacture and
      Supply Agreement consistent with all relevant licensing and commercial
      supply terms contained in this Agreement and including reasonable annual
      minimum purchase requirements to be agreed upon no later than the NDA
      filing.

8.3   The Parties agree to negotiate in good faith a volume based supply price,
      to include minimums, for Licensed Product worldwide. The supply price of
      Licensed Product to SEPR.ACOR shall be a combination of unit price and
      royalty. Unit price of product will be no greater than $[**] per unit for
      the first [**] million units annually, and $[**] per unit for those units
      in excess of [**] million units annually. The royalty for the license
      granted under Section 9.3 shall be [**] percent ([**]%) of SEPRACOR's Net
      Sales Price (such royalty to be [**] when and in such countries where
      there are no issued or granted 3M Patent Rights). A supply price for
      sample Licensed Product will be negotiated by the Parties in the Supply
      Agreement. The following factors have been assumed for purposes of
      determining the above supply price:

               -   [**] actuation product
               -   SEPRACOR provides Levalbuterol tartrate at no cost
               -   3M purchase actuator, aluminum can, valve, propellant
                   and other formulation components and finished packaging
                   material
               -   3M's [**] manufacturing process is typical of other
                   3M manufactured products.
               -   3M's testing of raw materials and finished product is
                   typical of other 3M manufactured products.

      The above unit prices may be adjusted at any time prior to launch and
      thereafter annually and proportionally for any increase in 3M's Full
      Factory Cost (defined as 3M's costs for overhead, labor, raw material,
      and/or component costs directly allocable to the manufacture, labeling
      and/or packaging of Licensed Product and the cost of services supplied to
      3M by third parties which are directly allocable to the manufacture,
      labeling

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      and/or packaging of Licensed Product) including such amount as is
      necessary to allow 3M to maintain its factory cost ratio of Licensed
      Product. Such increase shall normally be no greater than PPI +1% from the
      prior calendar year. In the event of an extraordinary increase in price
      due to such factors as a shortage of raw material or change in product
      specifications or manufacturing mandated by regulatory authorities, 3M may
      increase the supply price for Licensed Product at the time it incurs such
      increase. In addition, 3M reserves the right prior to commencement of the
      Manufacture and Supply Agreement to increase the maximum price quoted
      herein for any change in the assumptions stated above or any increase in
      the cost of manufacturing Licensed Product due to an increase in the cost
      of acquiring SEPRACOR Components above the cost on the Effective date
      including any additional cost necessary to maintain 3M's factory cost
      ratio.

8.4   3M shall exclusively supply, using reasonable commercial efforts to do so,
      Licensed Product to SEPRACOR, Affiliates, and permitted sublicensees only
      and 3M shall not supply Product (not limited to Licensed Product) to any
      third party. Except as provided in Section 8.5 below, 3M shall have the
      exclusive right and license to supply SEPRACOR, its Affiliates and
      permitted sublicensee' s requirements of Licensed Product, and SEPRACOR,
      Affiliates, and permitted sublicensees shall not purchase Product (not
      limited to Licensed Product) other than from 3M, during the term of this
      Agreement.

8.5   Anything else in this Agreement to the contrary notwithstanding, SEPRACOR
      shall have the limited contractual right to procure Licensed Product for
      use in clinical trials only from a third party for such time as 3M is
      unable to provide SEPRACOR with such supply, provided, however, that (i)
      SEPRACOR shall diligently pursue obtaining regulatory approval for
      Licensed Product manufactured by 3M, (ii) neither SEPRACOR nor the third
      party supplier shall have any right to use any 3M Know-How in the
      manufacture of such Licensed Product, and (iii) from and after the time
      that 3M is able to supply Licensed Product pursuant to this Agreement or
      the Supply Agreement, 3M shall have the exclusive right and license to
      supply SEPRACOR, its Affiliates, and permitted sublicensee's requirements
      of Licensed Product during the term of this Agreement and any future
      Supply Agreement.

9.    OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS; LICENSES

9.1   Ownership of all right, title, and interest in intellectual property,
      including inventions, know-how, trade secrets and copyright, including but
      not limited to patent applications and patents, arising out of the
      Scale-up Program ("Rights") shall be allocated as follows:

      9.1:1   3M 1PC (or an Affiliate nominated by 3M IPC) shall own all
              Rights conceived solely by 3M and/or 3M Affiliate employees;

      9.1:2   SEPRACOR shall own all Rights conceived solely by SEPRACOR's
              and/or SEPRACOR Affiliate employees;

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      9.1:3   Rights jointly conceived by 3M (or a 3M Affiliate) and
              SEPRACOR (or a SEPRACOR Affiliate) shall be owned jointly by
              3M IPC (or an Affiliate nominated by 3M IPC) and SEPRACOR (or
              an Affiliate nominated by SEPRACOR). Each of the Parties shall
              have a royalty-free right to use the Rights which are jointly
              owned without the consent of and without accounting to the
              other Party independently of the other Party (with the right
              to sub-license) except as otherwise expressly provided herein.
              3M and 3M IPC shall share equally with SEPRACOR in the costs,
              fees and expenses of preparing, filing and prosecuting any
              patent application claiming jointly owned Rights and of
              maintaining and defending the Rights, provided that if either
              Party fails to pay its share, it shall assign its entire
              interest to the other Party. Unless otherwise agreed, patent
              applications shall be prepared and prosecuted by 3M IPC or, at
              3M IPC's election, an Affiliate of 3M IPC or independent
              counsel mutually acceptable to 3M IPC and SEPRACOR.

9.2   The Parties shall upon request cooperate with one another so far as
      necessary in connection with the filing of applications for patents for
      their respective inventions.

9.3   3M IPC hereby grants SEPRACOR a worldwide, royalty-bearing, non-exclusive
      license under the 3M Patent Rights and 3M Know-How to use, sell, offer for
      sale, and import Licensed Product manufactured by or for 3M under this
      Agreement or a subsequent Supply Agreement. SEPRACOR shall have the right
      to submit for listing on the FDA "Orange Book" patents under 3M Patent
      Rights that cover Licensed Product, provided that 3M and 3M IPC shall have
      no obligation to enforce any such patents and may grant licenses under the
      3M Patent Rights at 3M/3M IPC's sole discretion

9.4   If this Agreement is terminated by SEPRACOR pursuant to Section 12.2
      below, SEPRACOR will cease use of any 3M Confidential Information which
      has been disclosed to it by 3M and which is subject to the non-disclosure
      provisions of Article 11 below, and the license to 3M Know-How and 3M
      Patent Rights shall terminate.

9.5   If this Agreement is terminated by SEPRACOR pursuant to Section 12.1 or by
      3M pursuant to Section 12.3 below, the rights and obligations set forth in
      Section 6.3 shall remain in effect, and 3M and SEPRACOR shall cooperate
      diligently in the transfer, at SEPRACOR's expense, of 3M Know-How to
      SEPRACOR or an alternative manufacturer selected by SEPRACOR (subject to
      the last sentence of this Section 9.5). 3M shall continue to develop and
      supply Licensed Product to SEPRACOR under the terms of this Agreement or
      the Supply Agreement (as applicable) for up to 24 months after notice of
      termination and 3M IPC shall grant SEPRACOR such world-wide, non-exclusive
      licenses under 3M Patents and 3M Know-How to make, have made for it, use
      and sell Licensed Product at a royalty rate of 4% of Net Sales Price (such
      royalty to be reduced by one-half when and in such countries where there
      are no issued or granted 3M Patent Rights), PROVIDED, HOWEVER, that
      SEPRACOR shall indemnify 3M and 3M 1PC for any liability arising out of
      3M's continued activity after the date of notice of termination or arising
      out of use, manufacture, sale, promotion or transfer of Licensed Product
      by SEPRACOR or any third party working on behalf of SEPRACOR, from the
      date 3M provided written notice of termination. The disclosure of 3M
      Know-how to SEPRACOR or its

                                      -11-
<Page>

      third party manufacturer shall be subject to undertakings that protect the
      3M Know-How from disclosure to others or use by SEPRACOR or its third
      party manufacturer beyond the scope of the license, including but not
      limited to use with products other than Licensed Product. 3M agrees to
      provide 3M employees for consultation in connection with the transfer of
      3M Know-How to be provided hereunder for a reasonable period and at a
      reasonable rate. 3M shall have the right to deny disclosure of 3M
      Confidential Information to a third party manufacturer for reasons
      relating to the ability of the third party to manufacture Licensed Product
      according to the then prevailing product standards or the lack of
      assurance the that the undertakings relating to protection and restricted
      use of 3M's Confidential Information and 3M's intellectual property rights
      will be complied with, provided that such denial would not be unreasonable
      in the reasonable judgment of a pharmaceutical manufacturer in the
      position of 3M.

10.   WARRANTIES, DISCLAIMERS, INDEMNIFICATION AND LIMITATION OF LIABILITIES

10.1  SEPRACOR warrants that to the best of its knowledge, through in-house
      patent counsel, that as of the effective date of this Agreement, Compound,
      SEPRACOR Components, and Licensed Product, and the processes used to make
      Compound, SEPRACOR Components, and Licensed Product, except for particular
      processes and components used by 3M that are not specified by SEPRACOR,
      will not inflinge any third party patent or other intellectual property
      rights. 3M warrants that to the best of its knowledge, through in-house
      patent counsel, that as of the effective date of this Agreement, its
      manufacturing processes, not specified by SEPRACOR or based upon Compound
      or SEPRACOR Components used for manufacturing Licensed Product will not
      infringe any third party patent or other intellectual property rights
      (i.e., there would be no infringement but for some attribute of Compound,
      SEPRACOR Component, or an attribute of Licensed Product specified by
      SEPRACOR). Each Party will notify the other Party promptly in the event a
      Party receives an accusation of infringement pertaining to Licensed
      Product.

10.2  Neither of the Parties is the agent of the other nor are the Parties
      partners or joint venturers.

10.3  Neither of the Parties warrants that the Scale-up Program will result in a
      commercially, technically, or regulatorily successful Product, although
      each of the Parties shall use reasonable commercial efforts to develop
      such Product.

10.4  Although 3M and SEPRACOR will use their reasonable efforts to conduct the
      Scale-up Program, no expenditures by either Party hereunder will be
      reimbursed because the development of any products or processes has been
      unsuccessful.

10.5  SEPRACOR represents and warrants that it will supply 3M Compound and
      SEPRACOR Components meeting the agreed upon written specifications.

                                      -12-
<Page>

10.6  3M hereby represents and warrants that all Licensed Product at the time of
      shipment shall meet the agreed upon written Specifications for Licensed
      Product and be manufactured in accordance with the IND or NDA, as
      applicable, and cGMPs, provided, however, that 3M shall not be responsible
      for Licensed Product that does not meet Specifications as a result of
      SEPRACOR' s failure to supply Compound or SEPRACOR Components meeting
      specifications.

10.7  SEPRACOR warrants that it will conduct any clinical work relating to
      Licensed Product in accordance with all applicable laws.

10.8  EXCEPT AS OTHERWISE EXPLICITLY SET FORTH HEREIN, EACH PARTY EXPRESSLY
      DISCLAIMS TO THE OTHER PARTY ANY EXPRESS OR IMPLIED WARRANTY, INCLUDING
      WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
      NON1NFRINGEMENT, ARISING OUT OF ITS PERFORMANCE OR ATTEMPTED DEVELOPMENT
      OF A PRODUCT OR PROCESS PURSUANT TO THIS AGREEMENT.

10.9  3M Indemnification -- 3M shall indemnify SEPRACOR against and hold it
      harmless from any and all loss or liability payable to third parties for
      any and all judgments, claims, causes of action, suits, proceedings,
      losses, damages, demands, fees, expenses, fines, penalties or costs
      (including without limitation reasonable attorney's fees, costs and
      disbursements) arising from any personal injury or alleged personal injury
      to any person made against SEPRACOR or 3M with respect to use of Licensed
      Product in clinical trials to the extent that it results from 3M's breach
      of the warranty set forth in Section 10.6 or for any claim that the
      manufacturing processes or components used by 3M, not specified by
      SEPRACOR or based upon Compound or SEPRACOR Components used for
      manufacturing Licensed Product are alleged to infringe any third party
      patent or other intellectual property rights (i.e., there would be no
      infringement but for some attribute of Compound, SEPRACOR Component, or
      some attribute of Licensed Product specified by SEPRACOR), provided,
      however, 3M shall be liable to the extent and only to the extent such
      breach resulted in the harm or injury for which SEPRACOR seeks
      indemnification.

10.10 SEPRACOR Indemnification - Except as set forth in Section 10.9, SEPRACOR
      shall indemnify and hold 3M harmless from any and all loss or liability
      payable to third parties for any and all judgments, claims, causes of
      action, suits, proceedings, damages, demands, fees, expenses, fines,
      penalties and costs (including without limitation reasonable attorney's
      fees, costs and disbursements) arising from any personal injury or alleged
      personal injury to any person made against SEPRACOR or 3M which result
      from (i) use or clinical study of Licensed Product by or on behalf of
      SEPRACOR, (ii) breach of SEPRACOR's warranty in Section 10.5, or a third
      party claim that Compound, SEPRACOR Components, Licensed Product, or the
      processes used to make Compound, SEPRACOR Components, and Licensed
      Product, except for particular processes or components used by 3M that are
      not specified by SEPRACOR, infringe any third party patent or other
      intellectual property rights.

                                      -13-
<Page>

10.11 Except as set forth in Section 10.9, SEPRACOR's sole and exclusive remedy
      against 3M for failure to supply Licensed Product meeting Specifications
      shall be, at SEPRACOR's option, replacement of Licensed Product or a
      credit for the amount charged by 3M for such Licensed Product.

10.12 EXCEPT AS SET FORTH IN SECTIONS 10.9 AND 10.10 NEITHER PARTY SHALL UNDER
      ANY CIRCUMSTANCES BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES FOR ANY
      INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES IN ANY WAY RELATED
      TO LICENSED PRODUCT, OR THIS AGREEMENT UNDER ANY THEORY OF LAW, INCLUDING
      BUT NOT LIMITED TO, CONTRACT, NEGLIGENCE OR ANY OTHER LEGAL THEORY.

10.13 Any obligations regarding a duty to devote resources and efforts to the
      development and scale-up of products are contained in this Agreement.
      There is no implied obligation to devote any other level of resources or
      effort.

11.   CONFIDENTIALITY

11.1  In relation to the 3M, 3M IPC, and SEPRACOR Confidential Information, as
      the case may be, disclosed by one Party to the other, each Party agrees:

      11.1:1  not to provide or make available any of the other Party's
              Confidential Information in any form to any person other than
              those of its employees and agents who have a need to know
              consistent with the receiving Party's authorized use of such
              Confidential Information;

      11.1:2  not to use or reproduce any of the other Party's Confidential
              Information except for use reasonably necessary for its
              performance of this Agreement;

      11.1:3  not to publish or disclose any of the other Party's
              Confidential Information to third parties other than as
              expressly permitted in this Agreement, without disclosing
              Party's prior written consent.

11.2  The obligations of confidentiality and non-use in Section 11.1 above shall
      not apply to any part of such Confidential Information which:

      11.2:1  is disclosed only to Authorities or used only for the purposes
              of obtaining or maintaining regulatory approvals from
              Authorities concerning Licensed Products supplied by 3M; or

      11.2:2  is disclosed to or used by its Affiliates, its licensees and
              its Affiliates' licensees in the normal course of their
              business solely for the purposes set out in Section 11.2:1
              above, in which events recipients of such information shall be
              bound by

                                      -14-
<Page>

              obligations of confidentiality no less onerous then those
              contained in this Article 11; or

      11.2:3  is disclosed to Affiliates of the Parties in order reasonably to
              perform this Agreement, in which events recipients of such
              information shall be bound by obligations of confidentiality no
              less onerous than those contained in this Article 11; or

      11.2:4  subject to Section 11.3 below, is in or comes into the public
              domain in any way without breach of this Agreement by the
              receiving Party; or

      11.2:5  subject to Section 11.3 below, the receiving Party can show was in
              its possession or known to it by being in its use or being
              recorded in its files or computers or other recording media prior
              to receipt from the disclosing Party and was not previously
              acquired by the receiving Party from the discloser under an
              obligation of confidence; or

      11.2:6  subject to Section 11.3 below, the receiving Party obtains or has
              available from a source other than the disclosing Party without
              breach by the receiving Party or such source of any obligation of
              confidentiality or non-use towards the disclosing Party; or

      11.2:7  is disclosed or used to comply with the disclosure obligations of
              the patent laws of any jurisdiction in connection with any patent
              application relating to Licensed Products or any component thereof
              or

      11.2:8  is disclosed by the receiving Party (a) with the prior written
              approval of the other Party or (b) without such approval, after a
              period often (10) years from the date of this Agreement or five
              (5) years from the date of termination of this Agreement, or if
              executed, five (5) years from the date of termination of the
              Supply Agreement whichever shall be the longer period.

11.3  If the receiving Party contends any one or more of the provisions to which
      Sections 11.2:4 to 11.2:6 apply, such Party shall give written notice to
      the disclosing Party together with evidence to support such contention
      prior to being relieved of the obligations of confidentiality and non-use,
      and furnish the disclosing Party with all facts upon which the receiving
      Party's contention is based. If the disclosing Party disagrees with the
      receiving Party's contention and so notifies the receiving Party within
      thirty (30) days of receipt of notification by the receiving Party, the
      Parties shall seek to resolve the dispute among themselves within twenty
      (20) days of notification of a dispute. If not so resolved, the Parties
      shall submit the dispute to binding arbitration by a mutually acceptable
      U.S. lawyer with experience in trade secret law of the U.S. The Party
      whose contention is denied shall pay the lawyer's fees incurred on
      resolving the dispute.

                                      -15-
<Page>

11.4  Both 3M and SEPRACOR shall protect Confidential Information by using the
      same degree of care, but not less than a reasonable degree of care, to
      prevent the unauthorized disclosure or use of Confidential Information, as
      that Party uses to protect its own confidential information of like
      nature.

11.5  At such time as the Scale-up Program is terminated, and unless there is a
      Supply Agreement, each Party shall upon request return to the other in a
      secure manner all extant recorded information in its possession
      constituting the other Party's Confidential Information.

11.6  Notwithstanding the foregoing, the receiving Party shall be entitled to
      make any disclosure required by law or by any governmental or other
      regulatory authority of the other Party's Confidential Information
      provided that it gives the other Party not less than two (2) working days
      notice of such disclosure.

11.7  Each Party reserves all rights in its Confidential Information and no
      rights or obligations other than those expressly recited herein are
      granted or to be implied from this Agreement. In particular, no license is
      hereby granted directly or indirectly under any patent, invention,
      discovery, copyright or other intellectual property right now or in the
      future held, made, obtained or licensable by either Party. Nothing in this
      Agreement or its operation shall preclude or in any way impair or restrict
      either Party from continuing to engage in its business otherwise than in
      breach of the terms of this Agreement.

11.8  Nothing in this Agreement shall be construed as requiring a Party to
      disclose Confidential Information or to grant rights under licenses, or to
      render any technical assistance, which would violate any confidentiality
      undertakings or other obligations, or which would violate any present or
      future law or decree of any government or governmental officer or agency.

11.9  The Parties agree not to disclose the terms of this Agreement to third
      parties, other than Affiliates except to the extent required by law,
      without the prior written approval of the other. It is understood,
      however, that the existence of this Agreement between 3M and SEPRACOR
      itself is not confidential.

12.   TERMINATION

12.1  If one of the Parties:

      12.1:1  commits or allows to be committed a material incurable breach of
              any of its obligations in this Agreement or a breach capable of
              remedy which it shall fail to remedy within ninety (90) days (or
              thirty (30) days in the case of default in payment, except in the
              event SEPRACOR has defaulted on payment on two or more previous
              occasions in which case such required notice shall be 10 days)
              after written notice has been given to it by the Party not in
              default (specifically referring to this Section) requiring such
              remedy; or

                                      -16-
<Page>

      12.1:2  shall pass a regulation for winding-up (otherwise than for the
              purpose of a solvent amalgamation or reconstruction where the
              resulting entity assumes all of the obligations of that Party) or
              a court makes an order to that effect, or ceases to carry on its
              business or substantially the whole of its business, or becomes or
              is declared insolvent or convenes a meeting of or makes or
              proposes to make any arrangement or composition with its creditors
              or if a liquidator receiver, administrator, trustee, manager or
              similar officer is appointed of any of its assets;

      then in any such events the Party not in default nor subject to an action
      under Section 12.1:2 above may by written notice terminate this Agreement
      at such future date (being no more than six (6) months after the date of
      such notice) as it may designate, but without prejudice to any right of
      either Party to sue for any antecedent breach of this Agreement.

12.2  SEPRACOR may terminate this Agreement without cause upon thirty (30) days
      prior written notice to 3M. All charges and expenses owed to 3M prior to
      delivery of SEPRACOR's notice shall become due and payable as well as all
      charges and expenses reasonably incurred by 3M in winding down the
      Scale-up Program over the ninety (90) day period following receipt of the
      notice of termination. Such charges and expenses shall not exceed the cost
      estimated for such period by reference to the Scale-up Program.

12.3  3M may terminate this Agreement or a subsequent Manufacturing and Supply
      Agreement upon thirty (30) days prior written notice if: (i) it can
      reasonably demonstrate to SEPRACOR that Licensed Product cannot be
      scaled-up by 3M; (ii) 3M transfers, or makes a business decision to
      discontinue, substantially all of its medicinal aerosol manufacturing
      business; (iii) Licensed Product develops a clinical profile involving an
      unusually high number or frequency of serious adverse clinical events that
      threatens to seriously damage 3M's corporate reputation and/or expose 3M
      to large potential liability and/or fines; (iv) 3M receives a third party
      claim for patent infringement involving Product that threatens to
      seriously damage 3M1's corporate reputation and/or expose 3M to large
      potential liability and/or fines; or (v) if 3M reasonably believes that
      the manufacture, use, sale, or importation of Product will infringe the
      valid intellectual property rights of a third party.

13.   FORCE MAJEURE

13.1  Neither 3M nor SEPRACOR shall be liable for any delay or for the
      consequences of any delay in performing any of its obligations under this
      Agreement if such delay is due to any cause whatsoever beyond its
      reasonable control, and each shall be entitled to a reasonable extension
      of the time for performing such obligations.

14.   CONTINTJTNG RESPONSIBILITIES AND WAIVER

14.1  Any termination of this Agreement shall not affect any rights or
      liabilities, including without limitation any rights accrued pursuant to
      Article 9 above, which expressly or by implication have accrued prior to
      the date of termination, and failure by either Party in any

                                      -17-
<Page>

      one or more instances to terminate this Agreement on account of any
      default or breach by the other shall not be taken to constitute a
      condonation or waiver of the same or of any other default or breach by the
      other.

15.   NOTICES

15.1  Any notice or other document which may be given by either Party under this
      Agreement shall be deemed to have been duly given if left at or sent by
      post (whether by letter or, where the Parties agree, by magnetic tape or
      other form), facsimile transmission (confirmed by letter sent by post) or
      where the Parties expressly agree by electronic mail, in each case
      addressed as follows:

              3M:        Minnesota Mining and Manufacturing Co.
                         3M Center, Building 275-3E-10
                         St. Paul, MN 55 144-1000 USA
                         Attention: General Manager, Drug Delivery Systems
                         Fax: (651) 737-5265

              SEPRACOR:  Sepracor Inc.
                         111 Locke Drive
                         Marlborough, MA, 01752
                         Attention: President
                         Fax: (508) 357-7492

      or any other address notified to each other in writing in accordance with
      this Section as an address to which notices and other documents may be
      sent.

15.2  Any such communication shall be deemed to have been received by the other
      Party (if by post) five (5) days after the date of posting and if by
      facsimile transmission on the working day following transmission. Any
      communication by electronic mail shall be deemed to have been received on
      the working day following the day on which the communication is first
      stored in the other Party's electronic mailbox.

16.   WHOLE AGREEMENT AND VARIATION

16.1  This Agreement shall take affect in substitution for all or any previous
      agreements relating to its subject matter, whether formal agreements or
      agreements that would be inferred from the Parties' correspondence and/or
      oral statements and/or conduct, and all or any such agreements shall be
      deemed to have been terminated by mutual consent with effect from the date
      upon which this Agreement commences.

16.2  This Agreement embodies the entire understanding of the Parties and there
      are no other arrangements or understandings between the Parties relating
      to its subject matter. No amendment or modification of this Agreement
      shall be valid or binding upon either of the Parties unless made in
      writing and signed by an authorized representative.

                                      -18-
<Page>

17.1  This Agreement and the rights granted in it and obligations undertaken may
      not be assigned by either of the Parties without the express written
      consent of the other, except:

      17.1:1  in the case of 3M on the sale or other transfer of substantially
              its entire business in aerosol propelled drugs, or

      17.1:2  3M may assign temporarily or permanently this Agreement or any
              rights granted or obligations undertaken to any Affiliate. 3M
              shall be responsible for the compliance by its Affiliates with the
              terms and conditions of this Agreement.

      17.1:3  SEPRACOR may assign this Agreement and its rights and obligations
              hereunder in connection with the transfer or sale of all or
              substantially all of its assets related to pharmaceutical
              business, or in the event of its merger or consolidation or change
              in control or similar transaction, provided that 3M may terminate
              unless the assignee covenants to continue with development and
              commercialization of Licensed Product at least the same or greater
              level as SEPRACOR immediately prior to the assignment.

18.   SEVERANCE

18.1  The provisions of this Agreement shall be deemed to be severable and thus
      if any part or parts of this Agreement are rendered void, invalid or
      unenforceable, such rendering shall not affect the validity or
      enforceability of the remainder unless the part or parts which are so
      rendered substantially impair the value of the whole Agreement to either
      Party. Subject to this, such part or parts of this Agreement so rendered
      shall be renegotiated between the Parties in such a way as to render the
      same valid and enforceable, and to achieve (to the extent possible) the
      economic, business and other purposes of the lawful provisions.

19.   INSURANCE

      SEPRACOR shall at its own expense obtain and maintain insurance of a type
      and amount as may be necessary to protect its interests and obligations
      connected with performance under this Agreement. SEPRACOR shall not do or
      omit to do any act, matter or thing which could prejudice or render
      voidable any such insurance. SEPRACOR shall, upon request by 3M, provide a
      certification evidencing the insurance or any renewal. SEPRACOR shall
      notify 3M of any material change in any such insurance arrangements, if
      possible, prior to such material change, but in any event, as soon as
      possible.

                                      -19-
<Page>

20.   DISPUTE RESOLUTION

20.1  NON-BINDING MEDIATION. Disputes arising between the Parties relating to
      the making or performance of this Agreement (including ownership of
      intellectual property rights, breach of confidentiality, inventorship,
      etc.) shall be resolved in the following order of preference: (i) by good
      faith negotiation between executives of 3M and SEPRACOR who have authority
      to fully and finally resolve the dispute; (ii) if necessary, by
      non-binding mediation at a location acceptable to both Parties using a
      neutral mediator having experience with the industry under the Center for
      Public Resources Model Procedure for Mediation of Business Disputes (with
      the costs therefor shared equally); or (iii) as a last resort only, by
      arbitration of inventorship disputes as provided in Section 20.2 of this
      Article, or by litigation of any other disputes.

20.2  INVENTORSHIP DISPUTES. If the parties are unable to resolve any dispute
      regarding inventorship by negotiation or mediation under Section 20.1 of
      this Article, they agree to submit such dispute to binding arbitration
      under the Center for Public Resources Rules for Non-Administered
      Arbitration of Patent and Trade Secret Disputes. The arbitrator shall be
      an independent patent attorney residing in the United States and
      registered to practice before the United States Patent and Trademark
      Office. The arbitrator shall resolve the inventorship dispute in
      accordance with the laws of the United States within three (3) months of
      his or her appointment. The parties agree to supply to the arbitrator such
      documentary evidence of inventorship as they wish to rely upon together
      with a written statement of their position not to exceed twenty (20) pages
      in length within twenty (20) days of the appointment of the arbitrator.
      Unless the Parties agree to rely on affidavits, the arbitrator shall set a
      hearing at which each Party shall have up to eight (8) hours to present
      witnesses and to cross examine the witnesses for the other Party. If there
      is a hearing, each Party shall provide a statement summarizing the
      testimony of each of its witnesses to the other Party and the arbitrator
      at least fifteen (15) days in advance of the hearing. The arbitrator's
      award shall be in writing not to exceed twenty (20) pages in length and
      shall include reasoning in support of the award. The resolution of the
      arbitrator shall be final and binding on the Parties, without right of
      appeal.

20.3  CONFIDENTIALITY. All negotiations and proceedings under Sections 20.1 and
      20.2 of this Article 20 shall be treated as Confidential Information in
      accordance with the provisions of Article 11 (Confidentiality) of this
      Agreement, and shall also be treated as compromise and settlement
      negotiations for purposes of Rule 408 of the Federal Rules of Evidence and
      comparable state rules of evidence. Any mediator or arbitrator shall be
      bound by an agreement containing confidentiality provisions at least as
      restrictive as those contained in Article 11 (Confidentiality) of this
      Agreement.

20.4  EQUITABLE RELIEF. Nothing herein shall preclude either party from taking
      whatever actions are necessary to prevent immediate, irreparable harm to
      its interests. Otherwise, these procedures are exclusive and shall be
      fully exhausted prior to the initiation of any litigation.

20.5  GOVERNING LAW; PERSONAL JURISDICTION: WAIVER OF JURY. Any questions,
      claims, disputes, remedies or procedural matters arising out of or related
      to this Agreement shall be

                                      -20-
<Page>

      governed exclusively by the laws of the State of Delaware, without regard
      to the principles of conflicts of law. The Parties agree that Minnesota
      and Massachusetts have a substantial relationship to this transaction, and
      each Party consents to personal jurisdiction in the courts of Minnesota
      and Massachusetts and agree that if a suit is commenced by SEPRACOR it
      shall be brought in Minnesota and if a suit is commenced by 3M or 3M IPC
      it shall be brought in Massachusetts. THE PARTIES FURTHER HEREBY CONSENT
      TO WAIVER OF ANY CONSTITUTIONAL, STATUTORY OR COMMON LAW RIGHT OF TRIAL BY
      JURY.

IN WITNESS WHEREOF, the Parties, through their respective duly authorized
officers, have executed this Agreement to be effective as of the Effective Date
first above written.

Signed: John Sampson           Title:                          Date: 12/20/01
       -------------------           ---------------------          ---------
For and on behalf of 3M

Signed: Gary L. Griswold       Title:                          Date: 12/20/01
       -------------------           ---------------------          ---------
For and on behalf of 3M IPC

Signed: James O'Shea           Title: President                Date: 12/20/01
       -------------------           ---------------------          ---------
For and on behalf of SEPRACOR

                                      -21-
<Page>

Schedule 1.12 -- Specifications (to be determined)
Schedule 1.7  -- Scale-up Program
Schedule 6.4  -- Pricing of Product for Clinical Supplies and Scale-Up batches
Schedule 6.6  -- Quality Assurance and Quality Control Responsibilities (to be
                 determined)

                                   Page 1 of 3
<Page>

               Schedule 1.12 -- Specifications (to be determined)

                                   Page 1 of 3
<Page>

                                                                    Confidential

                        Schedule 1.7 -- Scale-up Program

                                   Page 1 of 3
<Page>

              SEPRACOR XOPENEX(R) HFA MDI PROCESS SCALE-UP PROJECT
                                December 12, 2001

GENERAL ASSUMPTIONS

-    Project initiation is December 1, 2001.
-    The plan is designed to develop a process that supplies nominal [**]-dose
     product per US requirements.
-    The plan assumes that the optimization runs will meet required
     process/product acceptance criteria for a US product.
-    Only 1 container/closure system is to be developed for the product assuming
     use of Sepracor components. [**].
-    The dates stated are all estimates. However, the earliest commercialization
     date is a primary objective goal of both companies.
-    The project is taken to the point that 3M provides the [**] manufacturing
     process, DMF references and stability data portions of the NDA. The cost
     estimates exclude additional time for 3M review and comments on the NDA
     package, responses to FDA and responding to NDA deficiencies.
-    No critical issues develop during the course of the project.
-    OUS clinical supplies will not be needed from the registration batches.
-    Process validation will not be performed until commercialization batches.
-    NDA submission will occur after completion of the Sepracor generated
     stability report covering the testing interval identified as required to
     support the NDA submission. The NDA submission date will not necessarily be
     contingent upon the availability of 12 months stability data. The NDA will
     be amended with additional stability data as available.
-    Product costs are in addition to development costs.

LAB PROCESS INVESTIGATIONS

-    The Sepracor data package contains sufficient information on crimp
     optimization to minimize 3M's investigation time.
-    Sepracor will perform pharmaceutical performance testing on lab scale
     samples to confirm equivalent product performance to the current process
     prior to full scale batch manufacture.
-    Appropriate clean testing studies and methods currently exist.

PROCESS OPTIMIZATION

-    At least [**] lots (preferably more) of all raw materials provided by
     Sepracor ([**]) are available to manufacture all [**] initial batches of
     product.
-    The manufacturing dates are not yet reserved. Availability of the
     production facility will be based on the production schedule at the time
     the development agreement is finalized. Delays in the plan may occur if
     manufacturing conflicts are found.

                                   Page 1 of 3
<Page>
                                                                    Confidential

              SEPRACOR XOPENEX(R) HFA MDI PROCESS SCALE-UP PROJECT
                                December 12, 2001

-    For initial process optimization purposes, [**] batches will be run at full
     scale capacity ([**] units) with [**] at the edge of process tolerances
     (high and low) and [**] at the nominal setpoints.
-    In-process testing will be performed on the [**] nominal process batch
     prior to manufacture of the [**] batches at nominal settings.
-    The optimization batches will be filled in the following sequence: [**].
-    The plan assumes that the first [**] lots of product manufactured at the
     nominal process settings meet specifications. If the [**] batches are
     found to be acceptable, they will be utilized for NDA clinical trials and
     NDA stability testing.
-    If the [**] batches at nominal process settings are placed on NDA stability
     then batches #[**] and [**] will only be manufactured to provide
     information for the process performance requirements for the CMC section of
     the NDA.
-    Batches [**] and [**] are not to be placed on NDA stability. This places a
     higher risk on the stability performance of the first [**] batches.
-    If the optimization runs are not successful in meeting acceptable
     product/process criteria, additional optimizations will be required.
-    Process maintenance runs are only listed through 2005, but will be
     necessary on an annual basis until approval of the product.

REGISTRATION STABILITY/CLINICAL SUPPLIES

-    Stability testing will be performed on nominal [**]-dose product only to
     US requirements. Additional raw material or finished product testing for
     OUS markets is not included in this plan.
-    3M will perform pivotal stability, according to a pie-defined protocoL
     Responsibility for the testing of these samples will be shared between 3M
     and Sepracor until analytical methods have been fully transferred to 3M.
     Samples will be stored in stability ovens at both 3M and Sepracor during
     this period.
-    All stability protocols will be developed jointly by both Sepracor and 3M
     prior to study initiation. 3M DDS will be responsible for developing all
     manufacturing protocols which will be subject to Sepracor QA review. All
     summary reports will he jointly reviewed by both Sepracor and 3M DDS.
-    No lot will be placed into a clinical study until full review of the
     resulting batch clearance testing and protocol sample testing and agreement
     between Sepracor and 3M Drug Delivery. Testing, review and approval of data
     should be targeted for completion within [**] weeks from availability of
     samples.
-    Release of the [**] batches at the nominal process settings for use in
     clinical studies is to be contingent on review and consideration of the
     test data from the [**] optimization batches at the extreme process
     conditions.
-    For interim stability testing intervals, Sepracor will accept and 3M may
     provide QA data sheets within [**] weeks of the testing interval per agreed
     upon format.

                                   Page 2 of 3
<Page>

              SEPRACOR XOPENEX(R) HFA MDI PROCESS SCALE-UP PROJECT
                                December 12, 2001

+    Method crossovers will initially be between Sepracor and 3M St. Paul.
     Analysts from St. Paul will perform the in-process testing for the
     optimization batches. Method crossovers between 3M St. Paul and the
     Northridge QC lab have been added as a separate set of tasks and will occur
     at a later date to expedite method training and crossovers.

DEVELOPMENT COSTS

The following cost estimates assume full stability testing by 3M. Depending on
the timing of analytical method transfer from Sepracor to 3M, the actual 3M
Development Costs may be lower.

<Table>
<Caption>
                                          2001         2002         2003         2004         2005      2006
                                    ------------------------------------------------------------------------
<S>                                 <C>         <C>          <C>           <C>          <C>          <C>
   @ $[**]/hour                     $   [**]        $ [**]       $ [**]       $  [**]      $  [**]   $  [**]
                                    ----------  -----------  -----------   ----------   ----------   -------
   Incremental increase for [**]    $   [**]        $ [**]       $ [**]       $  [**]      $  [**]   $  [**]
   hours charged at $[**]/hour
   (Section 7.2) not reflected
   in subsequent Cost Summary
   document
                                    ----------  -----------  -----------   ----------   ----------   -------
   Total                            $   [**]        $ [**]       $ [**]       $  [**]      $  [**]   $ 2,800
                                    ----------  -----------  -----------   ----------   ----------   -------
</Table>

PRODUCT COSTS

+    [**] batches at full scale ([**] units/each) = [**] units.
-    This does not include process maintenance lots (estimated at [**]
     per year until product approval).

                                   Page 3 of 3
<Page>

             Schedule 6.4 - Pricing of Product for Clinical Supplies

Pricing of Product will be $[**] per unit based on theoretical batch size.
Pricing assumes:

-     SEPRACOR provides Compound.
-     SEPRACOR Components are canister, valve, actuator.
-     3M provides Samples to SEPRACOR in a bulk packaged unlabelled format.
-     Batch size minimums are defined by 3M process.
-     FOB 3M's manufacturing location.

                                      -26-
<Page>

Schedule 6.6 - Quality Assurance and Quality Control Responsibilities (to be
               determined)

                                      -26-QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 4.1.1    
  

Execution Copy  

HOMER CITY FUNDING LLC  

        
$300,000,000 8.137% SENIOR SECURED BONDS DUE 2019

$530,000,000 8.734% SENIOR SECURED BONDS DUE 2026 

FIRST
AMENDED AND RESTATED INDENTURE 

Dated
as of December 7, 2001 

THE
BANK OF NEW YORK,

as successor Trustee 

 
 
 

TABLE OF CONTENTS    
  

	 
	 	 
	 	Page

	ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE	 	3
	

SECTION 1.1	
 	

DEFINITIONS	
 	

3
	SECTION 1.2	 	OTHER DEFINITIONS	 	11
	SECTION 1.3	 	INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT	 	12
	SECTION 1.4	 	RULES OF CONSTRUCTION	 	12
	SECTION 1.5	 	ONE CLASS OF SECURITIES	 	12
	
ARTICLE 2. THE BONDS	
 	

12
	

SECTION 2.1	
 	

FORM AND DATING	
 	

12
	SECTION 2.2	 	EXECUTION AND AUTHENTICATION	 	14
	SECTION 2.3	 	REGISTRAR AND PAYING AGENT	 	14
	SECTION 2.4	 	PAYING AGENT TO HOLD MONEY IN TRUST	 	14
	SECTION 2.5	 	HOLDER LISTS	 	15
	SECTION 2.6	 	TRANSFER AND EXCHANGE	 	15
	SECTION 2.7	 	REPLACEMENT BONDS	 	26
	SECTION 2.8	 	OUTSTANDING BONDS	 	26
	SECTION 2.9	 	TREASURY BONDS	 	26
	SECTION 2.10	 	TEMPORARY BONDS	 	26
	SECTION 2.11	 	CANCELLATION	 	27
	SECTION 2.12	 	DEFAULTED INTEREST	 	27
	SECTION 2.13	 	CUSIP NUMBERS	 	27
	
ARTICLE 3. REDEMPTION AND PREPAYMENT	
 	

27
	

SECTION 3.1	
 	

NOTICES TO TRUSTEE	
 	

27
	SECTION 3.2	 	SELECTION OF BONDS TO BE REDEEMED	 	27
	SECTION 3.3	 	NOTICE OF REDEMPTION	 	28
	SECTION 3.4	 	EFFECT OF NOTICE OF REDEMPTION	 	28
	SECTION 3.5	 	DEPOSIT OF REDEMPTION PRICE	 	28
	SECTION 3.6	 	BONDS REDEEMED IN PART	 	29
	SECTION 3.7	 	OPTIONAL REDEMPTION	 	29
	SECTION 3.8	 	MANDATORY REDEMPTION	 	29
	SECTION 3.9	 	NOTICES TO BONDHOLDERS BY LEASE INDENTURE TRUSTEE	 	29
	
ARTICLE 4. COVENANTS	
 	

29
	

SECTION 4.1	
 	

PAYMENT OF BONDS	
 	

29
	SECTION 4.2	 	MAINTENANCE OF OFFICE OR AGENCY	 	30
	SECTION 4.3	 	INFORMATION REQUIREMENTS	 	30
	SECTION 4.4	 	STAY, EXTENSION AND USURY LAWS	 	30
	SECTION 4.5	 	LIMITATION ON SUBSIDIARIES AND INVESTMENTS	 	30
	SECTION 4.6	 	LIMITATION ON INCURRENCE OF INDEBTEDNESS	 	30
	SECTION 4.7	 	LIMITATION OF SALE OF ASSETS	 	31
	SECTION 4.8	 	LIMITATION ON TRANSACTIONS WITH AFFILIATES	 	31
	SECTION 4.9	 	LIMITATION ON LIENS	 	31
	SECTION 4.10	 	LIMITATION ON BUSINESS ACTIVITIES	 	31
	SECTION 4.11	 	MAINTENANCE OF EXISTENCE	 	31
	SECTION 4.12	 	PAYMENTS FOR CONSENT	 	31
	SECTION 4.13	 	COMPLIANCE WITH LAWS	 	31

i

 

	SECTION 4.14	 	PERFECTION OF SECURITY INTERESTS	 	32
	SECTION 4.15	 	CONSENT PAYMENT	 	32
	
ARTICLE 5. SUCCESSORS	
 	

32
	

SECTION 5.1	
 	

LIMITATION ON MERGER, CONSOLIDATION AND SALE OF SUBSTANTIALLY ALL ASSETS	
 	

32
	
ARTICLE 6. EVENTS OF DEFAULT	
 	

32
	

SECTION 6.1	
 	

EVENTS OF DEFAULT	
 	

32
	SECTION 6.2	 	ACCELERATION	 	33
	SECTION 6.3	 	OTHER REMEDIES	 	33
	SECTION 6.4	 	WAIVER OF PAST DEFAULTS	 	34
	SECTION 6.5	 	CONTROL BY MAJORITY	 	34
	SECTION 6.6	 	LIMITATION ON SUITS	 	34
	SECTION 6.7	 	RIGHTS OF HOLDERS OF BONDS TO RECEIVE PAYMENT	 	35
	SECTION 6.8	 	COLLECTION SUIT BY TRUSTEE	 	35
	SECTION 6.9	 	TRUSTEE MAY FILE PROOFS OF CLAIM	 	35
	SECTION 6.10	 	PRIORITIES	 	35
	SECTION 6.11	 	FOR COSTS	 	36
	
ARTICLE 7. TRUSTEE	
 	

36
	

SECTION 7.1	
 	

DUTIES OF TRUSTEE	
 	

36
	SECTION 7.2	 	RIGHTS OF TRUSTEE	 	37
	SECTION 7.3	 	INDIVIDUAL RIGHTS OF TRUSTEE	 	37
	SECTION 7.4	 	TRUSTEE'S DISCLAIMER	 	37
	SECTION 7.5	 	NOTICE OF DEFAULTS	 	38
	SECTION 7.6	 	REPORTS BY TRUSTEE TO HOLDERS OF THE BONDS	 	38
	SECTION 7.7	 	COMPENSATION AND INDEMNITY	 	38
	SECTION 7.8	 	REPLACEMENT OF TRUSTEE	 	39
	SECTION 7.9	 	SUCCESSOR TRUSTEE BY MERGER, ETC.	 	39
	SECTION 7.10	 	ELIGIBILITY; DISQUALIFICATION	 	39
	SECTION 7.11	 	PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY	 	40
	SECTION 7.12	 	OTHER CAPACITIES	 	40
	
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE	
 	

40
	

SECTION 8.1	
 	

OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE	
 	

40
	SECTION 8.2	 	LEGAL DEFEASANCE AND DISCHARGE	 	40
	SECTION 8.3	 	COVENANT DEFEASANCE	 	40
	SECTION 8.4	 	CONDITIONS TO LEGAL OR COVENANT DEFEASANCE	 	41
	SECTION 8.5	 	DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS	 	42
	SECTION 8.6	 	REPAYMENT TO COMPANY	 	42
	SECTION 8.7	 	REINSTATEMENT	 	43
	
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER	
 	

43
	

SECTION 9.1	
 	

WITHOUT CONSENT OF HOLDERS OF BONDS	
 	

43
	SECTION 9.2	 	WITH CONSENT OF HOLDERS OF BONDS	 	43
	SECTION 9.3	 	COMPLIANCE WITH TRUST INDENTURE ACT	 	44
	SECTION 9.4	 	REVOCATION AND EFFECT OF CONSENTS	 	44

ii

 

	SECTION 9.5	 	NOTATION ON OR EXCHANGE OF BONDS	 	45
	SECTION 9.6	 	TRUSTEE TO SIGN AMENDMENTS, ETC.	 	45
	SECTION 9.7	 	ACTIONS WITH RESPECT TO PLEDGED NOTES	 	45
	
ARTICLE 10. MISCELLANEOUS	
 	

45
	

SECTION 10.1	
 	

TRUST INDENTURE ACT CONTROLS	
 	

45
	SECTION 10.2	 	NOTICES	 	45
	SECTION 10.3	 	COMMUNICATION BY HOLDERS OF BONDS WITH OTHER HOLDERS OF BONDS	 	46
	SECTION 10.4	 	CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT	 	46
	SECTION 10.5	 	STATEMENTS REQUIRED IN CERTIFICATE OR OPINION	 	47
	SECTION 10.6	 	RULES BY TRUSTEE AND AGENTS	 	47
	SECTION 10.7	 	NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS	 	47
	SECTION 10.8	 	GOVERNING LAW	 	47
	SECTION 10.9	 	NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS	 	47
	SECTION 10.10	 	SUCCESSORS	 	47
	SECTION 10.11	 	SEVERABILITY	 	48
	SECTION 10.12	 	COUNTERPART ORIGINALS	 	48
	SECTION 10.13	 	TABLE OF CONTENTS, HEADINGS, ETC.	 	48
	SECTION 10.14	 	EFFECTIVENESS OF THIS INDENTURE	 	48

	EXHIBITS:	 	 
	

A-1	
 	

Form of Bond
	A-2	 	Form of Regulation S Temporary Global Bond
	B	 	Form of Certificate of Transfer
	C	 	Form of Certificate of Exchange
	

SCHEDULE I List of Pledged Notes

iii

        FIRST AMENDED AND RESTATED INDENTURE dated as of December 7, 2001 among Homer City Funding LLC, a Delaware limited liability company (the
"Company") and The Bank of New York, as successor trustee to United States Trust Company of New York (the
"Trustee"). 

        WHEREAS,
Edison Mission Holdings Co. ("Holdings") heretofore executed and delivered an Indenture, dated as of May 27, 1999, between
Holdings and the United States Trust Company of New York (as amended from time to time, the "Initial Indenture") pursuant to which Holdings issued the
8.137% Senior Secured Bonds due 2019 and the 8.734% Senior Secured Bonds due 2026 (collectively, the "Initial Bonds"); 

        WHEREAS,
Holdings subsequently exchanged in the Exchange Offer the Initial Bonds for a like amount of substantially similar 8.137% Senior Secured Bonds due 2019 (the
"New Series A Bonds") and 8.734% Senior Secured Bonds due 2026 (the "New Series B Bonds"
and, together with the New Series A Bonds, the "New Bonds") which had been registered under the Securities Act of 1933; 

        WHEREAS,
Section 9.2 of the Initial Indenture provides that (i) Holdings and the Trustee may amend or supplement the Initial Indenture and the New Bonds may be amended or
supplemented and (ii) compliance with any provision of the Initial Indenture or the New Bonds may be waived, with the consent of the Holders of a majority in principal amount of the then
outstanding New Bonds voting as a single class, subject to certain exceptions (none of which is applicable to the Proposals (as defined below)); 

        WHEREAS,
pursuant to its Consent Solicitation Statement, dated November [    ], 2001, as may be amended and supplemented prior to the expiration of the
Consent Solicitation described therein (the "Consent Solicitation Statement"), Holdings solicited consents of the holders of all New Bonds then
outstanding to certain amendments of and waivers to the Initial Indenture and the New Bonds (as described in the Consent Solicitation Statement, the
"Proposals"); 

        WHEREAS,
the Holders of a majority in principal amount of the then outstanding New Bonds voting as a single class have duly consented to the Proposals and to the exchange of all New
Bonds for the Bonds issued hereunder; 

        WHEREAS,
pursuant to this Indenture, each New Bond shall be exchanged for a Bond of like denomination; 

        WHEREAS,
Holdings has heretofore delivered or is delivering contemporaneously herewith to the Trustee (i) a copy of a Board Resolution of Holdings relating to this Indenture,
(ii) evidence of the consent of a majority in principal amount of the then outstanding New Bonds as set forth in the immediately preceding paragraph and (iii) such other documentation as
may be required by the Trustee under Section 7.2, 9.6 and 10.4 of the Initial Indenture; 

        WHEREAS,
all conditions necessary to authorize the execution and delivery of this Indenture and to make this Indenture valid and binding have been complied with or have been done or
performed; 

        WHEREAS,
subject to the terms and conditions of this Indenture, the parties hereto desire to amend and restate the Initial Indenture in its entirety as provided herein; 

        NOW,
THEREFORE, in consideration of the foregoing premises, the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows. 

        The
Company and the Trustee agree as follows for the benefit of the parties and for the equal and ratable benefit of the Holders of the Bonds: 

 
 
 

GRANTING CLAUSE    
  

As
collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all Obligations on the Bonds from time to time
outstanding hereunder, and all other amounts owing or obligations hereunder by the Company to the Bondholders under this Indenture (the "Company Secured
Obligations"), the Company hereby pledges and grants to the Trustee for the benefit of the Bondholders a pledge of and a first priority continuing security interest in, all of
the Company's right, title and interest in, to and under the following
property, whether now owned by the Company or hereafter acquired and whether now existing or hereafter coming into existence (all being collectively referred to herein as the
"Collateral"): 

        (a)  all
lessor notes issued under each Lease Indenture (the "Pledged Notes"), the certificates representing the Pledged
Notes, and all cash dividends, stock dividends, cash, instruments, chattel paper, warrants, options and other rights, property or proceeds and products from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged Notes now or hereafter owned by the Company; 

        (b)  all
other claims of any kind or nature, and any instruments, certificates, chattel paper or other writings evidencing such claims, whether in contract or tort and
whether arising by operation of law, consensual agreement or otherwise, at any time acquired by the Company in respect of any or all of the Pledged Notes; 

        (c)  all
books and records relating to any of the foregoing; 

        (d)  all
interests in substitution for or in addition to any of the foregoing, any certificates representing or evidencing such interests, and all cash, securities,
distributions and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing; and 

        (e)  all
proceeds of and to any of the property described in the preceding clauses of this Section. 

        PROVIDED,
HOWEVER, subject to the terms and conditions hereof, the Company does hereby irrevocably constitute and appoint the Trustee as its true and lawful attorney (which appointment
is coupled with an interest) with full power to ask, require, demand and receive any and all moneys and claims for moneys due and to become due under or arising out of this Indenture and all other
property which now or hereafter constitutes part of the Collateral and, to endorse any checks or other instruments or orders in connection herewith and to file any claims or to take any action or to
institute any proceedings which the Trustee may deem to be necessary or advisable, and to take any action with respect to and exercise any rights or remedies of the Company under the Pledged Notes,
the Lease Indenture and the other Collateral. In addition, the Company hereby assigns to the Trustee, for the benefit of the Holders, its rights to receive any and all payments on and in respect of
the Pledged Notes and the Lease Indentures, for as long as the estate created by this Indenture remains in existence. The Company hereby agrees that all amounts to be paid to it under the Pledged
Notes and the Lease Indentures shall be paid to or deposited with the Trustee for the benefit of the Holders directly. Further, the Company agrees that promptly upon receipt thereof, it will transfer
to the Trustee for the benefit of the Holders, any and all moneys received by it on the Pledged Notes or under the Lease Indentures. 

        It
is expressly agreed that anything herein contained to the contrary notwithstanding, the Company shall remain liable under this Indenture to perform all of the obligations assumed by
it hereunder, all in accordance with and pursuant to the terms and provisions hereof, and the Holders of the Bonds shall have no obligation or liability under any term or provision hereof by reason of
or arising out of the assignment hereunder, nor shall the Holders of the Bonds be required or obligated in any manner, except as herein expressly provided, to perform or fulfill any obligations of the
Company under or pursuant to this Indenture to make any payment, or to make any inquiry as to the nature or sufficiency 

2

 

of any payment received by it, or present or file any claim or take any action to collect or enforce the payment of any amounts which may have been assigned to it or to which it may be entitled at
any time or times. 

        The
Company agrees that at any time and from time to time, upon the written request of the Trustee (acting on the instruction of any Holder of the Bonds) or any Holder of the Bonds, the
Company will promptly and duly execute and deliver or cause to be duly executed and delivered any and all such further instruments and documents necessary to obtain the full benefits of the assignment
hereunder and of the rights and powers herein granted; provided, however, that the Company shall have no obligation to execute or deliver or to cause to
be executed or delivered any further instruments or documents that would give the Holders of the Bonds greater rights and powers than the rights and powers of the Company which have been granted
herein or intended to be granted herein. 

        The
Company does hereby warrant and represent that it has not assigned, pledged or granted a lien or security interest in, to or under, and hereby covenants that, so long as this
Indenture shall remain in effect and the lien hereof shall not have been released, it will not assign, pledge or grant a lien or security interest in any of its estate, right, title or interest in, to
or under, the Collateral to anyone other than the Trustee for the benefit of the Holders of the Bonds. The Company hereby further covenants that with respect to its estate, right, title and interest
in, to or under the Collateral, it will not, except as provided in this Indenture (i) accept any payment from the Lease Indenture Trustee or enter into any agreement amending, modifying or
supplementing this Indenture, execute any waiver or modification of, or consent under, the terms of this Indenture or revoke or terminate this Indenture, (ii) settle or compromise any claim
arising under this Indenture, or (iii) submit or consent to the submission of any dispute, difference or other matter arising under or in respect of this Indenture to arbitration hereunder. 

        Except
as provided herein, the Company hereby ratifies and confirms its obligations under this Indenture and does hereby agree that it will not take or omit to take any action, the
taking or omission of which might result in an alteration or impairment of this Indenture or the assignment (subject to the previous paragraph) hereunder. 

        The
Trustee, for itself and its successors and permitted assigns, hereby agrees that it shall hold the Collateral, in trust for the benefit and security of the Holders of the Bonds
outstanding, without any priority of any one Bond over any other except as herein otherwise expressly provided. 

        Accordingly,
the Company agrees that all Bonds are to be issued and delivered and that all property subject or to become subject hereto is to be held subject to the further covenants,
conditions, uses and trusts hereinafter set forth, and the Company, for itself and its successors and permitted assigns, hereby covenants and agrees with the Trustee, for the benefit and security of
the Holders of the Bonds from time to time to protect the security of this Indenture, and the Trustee agrees to accept the trusts and duties hereinafter set forth, as follows: 

 
 

ARTICLE 1.
  DEFINITIONS AND INCORPORATION BY REFERENCE    
  

        SECTION 1.1 DEFINITIONS  

        "Acceptable Credit Provider" means a U.S. or U.S. branch of a foreign bank or trust company that (i) has a
combined capital and surplus of at least $1 billion whose long term unsecured debt is rated "A2" or higher by Moody's or "A" or higher by S&P and (ii) is exempt from SEC registration
under 3(a)(2) of the Securities Act. 

        "Affiliate" of any particular Person, shall mean any other Person which, directly or indirectly, controls, is controlled by or is under
common control with such Person. A Person shall be deemed to 

3

 

be "controlled by" any other Person if such other Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of such Person whether by contract or
otherwise. 

        "Agent" means any Registrar, Paying Agent, co-registrar, authenticating agent or securities custodian. 

        "Applicable Procedures" means, with respect to any transfer or exchange of or for beneficial interests in any Global Bond, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such transfer or exchange. 

        "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. 

        "Beneficial Owner" means any person who holds a beneficial ownership interest in a Bond. 

        "Board Resolution" means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such
Person or the general partner, in the case of a limited partnership, of such Person (or, if such Person is a partnership, one of its general partners) to have been duly adopted by the member(s) of
such Person (if such Person is a limited liability company), board of directors of such Person or the general partner, in the case of a limited partnership, of such Person (or, if such Person is a
partnership, one of its general partners) and to be in full force and effect on the date of such certification, and delivered to the Trustee. 

        "Bonds" means the Series A Bonds and Series B Bonds issued by the Company pursuant to this Indenture. 

        "Business Day" means a day other than a Saturday, Sunday or other day on which commercial banking institutions are authorized or required
by law, regulation or executive order to be closed in New York, New York, Wilmington, Delaware, or the cities and states in which the offices of the Trustee or Paying Agent are located. 

        "Capital Lease Obligation" means, as to any Person, all monetary obligations of such Person under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of the Indenture, the amount of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP. 

        "Capital Stock" means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a
corporation, and any and all equivalent ownership interests in a Person (other than a corporation). 

        "Cash Equivalents" means, at any time: (i) any evidence of Indebtedness, maturing not more than one year after such time, issued or
guaranteed by the United States Government or an agency thereof; (ii) other investments in securities or bank instruments rated at least "A" by S&P and "A2" by Moody's or "A-1" by
S&P and "P-1" by Moody's and with maturities of less than 366 days; or (iii) other securities as to which the Company has demonstrated, to the satisfaction of the Trustee,
adequate liquidity through secondary markets or deposit agreements. 

        "Cedel" means Cedelbank and its successors and assigns. 

        "Closing Date" means the date of issuance and delivery of the Initial Bonds. 

        "Collateral Agent" has the meaning set forth in the Security Deposit Agreement. 

        "Collateral" has the meaning set forth in the Granting Clause. 

        "Commission" means the United States Securities and Exchange Commission or any other federal agency at the time administering the
Securities Act. 

4

 

        "Company" has the meaning set forth in the preamble to this Indenture. 

        "Consent Date" has the meaning set forth in the Consent Solicitation Statement. 

        "Consent Payment" has the meaning set forth in the Consent Solicitation Statement. 

        "Consent Payment Account" has the meaning set forth in the Consent Solicitation Statement. 

        "Consent Solicitation Statement" has the meaning set forth in the preamble hereto. 

        "Corporate Trust Office of the Trustee" shall be at the address of the Trustee specified in Section 10.2 hereof or such other
address as to which the Trustee may give notice to the Company. 

        "Custodian" means the Trustee, as custodian with respect to the Bonds in global form, or any successor entity thereto. 

        "Debt Service Reserve Accounts" means the Debt Service Reserve Accounts established by the Collateral Agent for the benefit of the Holders
pursuant to each Lease Indenture. 

        "Default" means an event or condition that, with the giving of notice or the lapse of time, or both, would become an Event of Default. 

        "Definitive Bond" means a certificated Bond registered in the name of the Holder thereof and issued in accordance with Section 2
hereof, in the form of Exhibit A-1 hereto except that such Bond shall not bear the Global Bond Legend and shall not have the "Schedule of Exchanges of Interests in the Global Bond"
attached thereto. 

        "Depositary" means, with respect to the Bonds issuable or issued in whole or in part in global form, the Person specified in
Section 2.3 hereof as the Depositary with respect to the Bonds, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision
of this Indenture. 

        "Duff & Phelps" means Duff & Phelps Credit Rating Co. and its successors and assigns. 

        "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security
that is convertible into, or exchangeable for, Capital Stock). 

        "Euroclear" means Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear system. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended and the rules and regulations of the Commission promulgated
thereunder. 

        "Exchange Offer" has the meaning set forth in the Registration Rights Agreement. 

        "Exchange Offer Registration Statement" has the meaning set forth in the Registration Rights Agreement. 

        "Expiration Date" has the meaning set forth in the Consent Solicitation Statement. 

        "Facilities" means the Homer City Electric Generating Station and certain facilities and other assets associated therewith and ancillary
thereto. 

        "Facility Lease" means each Facility Lease between Homer City, as Facility Lessee and each respective Owner Lessor, dated as of
December 7, 2001 entered into pursuant to each Participation Agreement listed in Schedule 1. 

        "Facility Lessee" means Homer City. 

        "GAAP" means generally accepted accounting principles as in effect in the United States from time to time consistently applied. 

5

 

        "Global Bonds" means, individually and collectively, each of the Restricted Global Bonds and the Unrestricted Global Bonds, in the form of
Exhibit A hereto issued in accordance with Section 2.1, 2.6(b)(iv), 2.6(d)(ii) or 2.6(f) hereof. 

        "Global Bond Legend" means the legend set forth in Section 2.6(g)(ii), which is required to be placed on all Global Bonds issued
under this Indenture. 

        "Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America, and the payment for which
the United States pledges its full faith and credit. 

        "Governmental Authority" means any nation or government or any political subdivision thereof, any state, province or other political
subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. 

        "Hedging Obligations" means, with respect to any Person, the net payment Obligations of such Person under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements and (ii) other agreements or arrangements in the ordinary course of business and pursuant to past practices designed
to protect such Person against fluctuations in commodity prices, interest rates or currency exchange rates. 

        "Holder" or "Bondholder" means a Person in whose name a Bond is registered. 

        "Homer City" means EME Homer City Generation L.P., a Pennsylvania limited partnership. 

        "Indebtedness" of any Person means, without duplication: (i) all indebtedness of such Person for borrowed money; (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services
(other than trade payables and accrued liabilities arising in the ordinary course of business); (iv) all reimbursement obligations with respect to surety bonds, letters of credit (to the extent
not collateralized with cash or Cash Equivalents), bankers' acceptances and similar instruments (in each case, whether or not matured); (v) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property); (vi) all Capital Lease Obligations; (vii) all Interest Rate Hedging Obligations; (viii) all indebtedness referred to
in clauses (i) through (vii) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property
(including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness; and (ix) all contingent
liabilities. 

        "Indenture" means this First Amended and Restated Indenture as amended and restated, dated as of December 7, 2001, between the
Company and the Trustee. 

        "Independent Engineer" means Stone and Webster Management Consultants, Inc. or another nationally recognized independent
engineering and consulting firm which, as Independent Engineer, will independently review the technical aspects of the project, analyze the contractual structure and create financial projections for
the benefit of the Holders. 

        "Indirect Participant" means a Person who holds a beneficial interest in a Global Bond through a Participant. 

        "Initial Bonds" has the meaning specified in the preamble hereto. 

        "Initial Indenture" has the meaning specified in the preamble hereto. 

        "Initial Purchaser" has the meaning set forth in the Registration Rights Agreement. 

6

 

        "Interest Rate Hedging Obligations" means, as to any Person, the net payment Obligations of all interest rate swaps, caps or collar
agreements or similar arrangements entered into by such Person in order to protect against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under
specific contingencies, and, in any event, not for speculative purposes. 

        "Lease Indenture" means each Indenture of Trust and Security Agreement among an Owner Lessor, as Issuer, The Bank of New York, as Security
Agent and The Bank of New York, as Lease Indenture Trustee, dated December 7, 2001 entered into pursuant to each Participation Agreement. 

        "Lease Indenture Event of Default" means a default under any of the Lease Indentures. 

        "Lease Indenture Trustee"    has the meaning set forth in the Lease Indenture. 

        "Letter of Transmittal" means the letter of transmittal to be prepared by the Company and sent to all Holders of the Bonds for use by such
Holders in connection with the Exchange Offer. 

        "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option
or other agreement to sell or give a security interest in any asset and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction). 

        "Make-Whole Premium" means, with respect to any Bond to be redeemed on any Redemption Date, an amount calculated by the
Company as of such date equal to the excess, if any, of (i) the net present value of the then remaining scheduled installments of principal and payments of interest (but excluding that portion
of any scheduled installment of principal or payment of interest that is actually due and paid on the Redemption Date) in respect of such Bond calculated using a discount factor equal to the sum of
the Treasury Yield plus 50 basis points, over (ii) the unpaid principal amount of such Bond. Such Yield Maintenance Premium shall be determined in accordance with the following provisions: 

        (a)  the
average life of the remaining scheduled installments of principal in respect of such Bond (the "Remaining Average Life") shall be calculated as of such Redemption
Date; and 

        (b)  the
"Treasury Yield" shall be calculated for the United States Treasury security having an average life equal to the Remaining Average Life and trading in the secondary
market at the price closest to par (the "Primary Issue"); provided, however, that, if no United States Treasury security has an average life equal to
the Remaining Average Life, the yields (the "Other Yields") for maturities of the two United States Treasury securities having average lives most closely corresponding to such Remaining Average Life
and trading in the secondary market at the price closest to par shall be calculated, and the yield to maturity for the Primary Issue shall be the yield interpolated or extrapolated from such Other
Yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. 

        "Moody's" means Moody's Investors Service, Inc., a division of Moody's Corporation, and its successors and assigns. 

        "New Bonds" has the meaning set forth in the preamble to this Indenture. 

        "New Series A Bonds" has the meaning set forth in the preamble to this Indenture. 

        "New Series B Bonds" has the meaning set forth in the preamble to this Indenture. 

        "Non-U.S. Person" means a Person who is not a U.S. Person. 

        "Obligations" means any principal, premium, if any, interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a 

7

 

claim for post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement obligations, damages, guarantees and other liabilities
or amounts payable under the documentation governing any Indebtedness or in respect thereof. 

        "Offering" means the offering of the Initial Bonds by the Company. 

        "Officer" means, with respect to any Person, any Chairman of the Board, President, Chief Executive Officer, Chief Operating Officer, Chief
Financial Officer, Senior Vice President, Vice President, Treasurer or Secretary of such Person. 

        "Officer's Certificate" means a certificate signed by an Officer of the Company. 

        "Owner Lessor" means each of Homer City OL1 LLC, Homer City OL2 LLC, Homer City OL3 LLC, Homer City OL4 LLC, Homer City OL5 LLC, Homer
City OL6 LLC, Homer City OL7 LLC and Homer City OL8 LLC. 

8

  

        "144A Global Bond" means one or more global notes in the form of Exhibit A-1 hereto bearing the Global Bond Legend and
the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in an aggregate denomination equal to the outstanding
principal amount of the Bonds sold in reliance on Rule 144A. 

        "Opinion of Counsel" means a written opinion of counsel for any Person either expressly referred to in the Indenture or otherwise
reasonably satisfactory to the Trustee which may include, without limitation, counsel for the Company, whether or not such counsel is an employee of the Company. 

        "Participant" means, with respect to the Depositary, Euroclear or Cedel, a Person who has an account with the Depositary, Euroclear or
Cedel, respectively (and, with respect to The Depository Trust Company, shall include Euroclear and Cedel). 

        "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, Governmental Authority or any other entity whether acting in an individual, fiduciary or other capacity. 

        "Power Market Consultant" means PHB Hagler Bailly, Inc. or another nationally recognized power market consulting firm which, as
Power Market Consultant, will perform a market study of certain markets relating to the Facilities and develop independent electricity price forecasts for the benefit of the Holders. 

        "Private Placement Legend" means the legend set forth in Section 2.6(g)(i) to be placed on all Bonds issued under this
Indenture except where otherwise permitted by the provisions of this Indenture. 

        "Proposals" has the meaning set forth in the preamble hereto. 

        "Prudent Industry Practice" means any of the practices, methods, standards and acts (including but not limited to the practices, methods,
standards and acts engaged in or approved by a significant portion of the electric power generation industry in the United States) that, at a particular time, in the exercise of
reasonable judgment in light of the facts known or that should reasonably have been known at the time a decision was made, could have been expected to accomplish the desired result consistent with
good business practices, reliability, economy, safety and expedition, and which practices generally conform to applicable law and governmental approvals. 

        "QIB" means a "qualified institutional buyer" as defined in Rule 144A. 

        "Rating Agencies" means each of Moody's, S&P and Duff & Phelps. 

        "Recovery Event" means any settlement of or payment of $5,000,000 or more in respect of (i) any property or casualty insurance
claim relating to the Facility or (ii) any seizure, condemnation, confiscation or taking of, or requisition of title or use of, the Facility or any part thereof by any Governmental Authority. 

        "Redemption Date" means a date set forth for redemption of Bonds pursuant to the Indenture. 

        "Redemption Price" means the price to be paid by the Company for the Bonds that are redeemed pursuant to the Indenture. 

        "Registration Rights Agreement" means the Exchange and Registration Rights Agreement, dated as of May 27, 1999, by and among Homer
City, Edison Mission Holdings Co., Edison Mission Finance Co., Homer City Property Holdings Inc., Chestnut Ridge Energy Co., Mission Energy Westside Inc. and the other parties named on
the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time. 

        "Regulation S" means Regulation S promulgated under the Securities Act. 

9

 

        "Regulation S Global Bond" means a Regulation S Temporary Global Bond or Regulation S Permanent Global Bond, as
appropriate. 

        "Regulation S Permanent Global Bond" means a permanent Global Bond in the form of Exhibit A-1 hereto bearing the
Global Bond Legend and the Private Placement Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued in an aggregate denomination equal to the outstanding principal amount of the Regulation S Temporary Global Bond
upon expiration of the Restricted Period. 

        "Regulation S Temporary Global Bond" means a temporary Global Bond in the form of Exhibit A-2 hereto bearing the
Global Bond Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in an aggregate denomination equal to the
outstanding principal amount of the Bonds initially sold in reliance on Rule 903 of Regulation S. 

        "Reinvestment Notice" means a notice executed by an Authorized Officer of Homer City to the Collateral Agent and the Trustee relating to a
Recovery Event (i) setting forth in reasonable detail the nature of the proposed restoration or replacement relating to such Recovery Event and the estimated cost and time to complete such
restoration or replacement and (ii) stating that (a) no Default or Event of Default has occurred and is continuing, (b) such restoration or replacement is technologically and
economically feasible, (c) the net cash proceeds of such Recovery Event, together with other resources available to the Facility Lessee, are sufficient to pay the estimated cost of completing
such restoration or replacement and (d) the Facility Lessee has sufficient resources (through business interruption insurance or otherwise) to pay all principal, interest and other fixed
charges projected to become due and payable with respect to the Bonds prior to the completion of such restoration or replacement. 

        "Responsible Officer," when used with respect to the Trustee, means any officer within the Corporate Trust Office of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to
a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. 

        "Restricted Global Bond" means a Global Bond bearing the Private Placement Legend. 

        "Restricted Period" means the 40-day restricted period as defined in Regulation S. 

        "Rule 144" means Rule 144 promulgated under the Securities Act. 

        "Rule 144A" means Rule 144A promulgated under the Securities Act. 

        "Rule 903" means Rule 903 promulgated under the Securities Act. 

        "Rule 904" means Rule 904 promulgated under the Securities Act. 

        "S&P" means Standard & Poor's Rating Services. 

        "Sale-Leaseback Transaction" means the lease financing involving the assets of Homer City as described in the Consent
Solicitation Statement. 

        "Security Agent" has the meaning set forth in the Lease Indenture. 

        "Security Deposit Agreement" means the Amended Security Deposit Agreement, dated as of December 7, 2001, as amended, by and among
Homer City and the Collateral Agent. 

        "Security Documents" has the meaning set forth in the Security Deposit Agreement. 

        "Securities Act" means the Securities Act of 1933, as amended. 

        "Senior Debt" has the meaning set forth in the Security Deposit Agreement. 

10

 

        "Series A Bonds" means the Series A Bonds issued by the Company pursuant to this Indenture. 

        "Series B Bonds" means the Series B Bonds issued by the Company pursuant to this Indenture. 

        "Shelf Registration Statement" means the Shelf Registration Statement as defined in the Registration Rights Agreement. 

        "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the
credit agreement or other original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to
the date originally scheduled for the payment thereof. 

        "Subsidiary" means, with respect to any Person, any corporation, partnership, limited liability company or other entity of which more than
50% of the outstanding capital stock, partnership interests or other equity interests having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) or to control the management of such
partnership, limited liability company or other entity is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person. 

        "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date on
which this Indenture is qualified under the TIA. 

        "Trustee" means The Bank of New York, as successor trustee for the benefit of the Holders under the Indenture, together with its
successors and assigns. 

        "Unrestricted Definitive Bond" means one or more Definitive Bonds that do not bear and are not required to bear the Private Placement
Legend. 

        "Unrestricted Global Bond" means a permanent Global Bond in the form of Exhibit A-1 attached hereto that bears the
Global Bond Legend and that has the "Schedule of Exchanges of Interests in the Global Bond" attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary,
representing a series of Bonds that do not bear the Private Placement Legend. 

        "U.S. Person" means a U.S. person as defined in Rule 902(o) under the Securities Act. 

SECTION 1.2    OTHER DEFINITIONS    

	Term
 
	 	Defined in

Section

	"Authentication Order"	 	2.2
	"Company Secured Obligations"	 	Granting Clause
	"Covenant Defeasance"	 	8.3
	"DTC"	 	2.3
	"Effective Date"	 	10.14
	"Event of Default"	 	6.1
	"Holdings"	 	preamble
	"Legal Defeasance"	 	8.2
	"Paying Agent"	 	2.3
	"Permitted Indebtedness"	 	4.6
	"Permitted Liens"	 	4.9
	"Pledged Note"	 	Granting Clause
	"Registrar"	 	2.3

11

 

SECTION 1.3    INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT    

        Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. 

        The
following TIA terms used in this Indenture have the following meanings: 

        "indenture securities" means the Bonds; 

        "indenture security holder" means a Holder of a Bond; 

        "indenture to be qualified" means this Indenture; 

        "indenture trustee" or "institutional trustee" means the Trustee; and 

        "Obligor" on the indenture securities means the Company and any successor obligor upon the indenture securities. 

        All
other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule under the TIA have the meanings so assigned
to them. 

SECTION 1.4    RULES OF CONSTRUCTION    

        Unless
the context otherwise requires: 

        (1)  a
term has the meaning assigned to it; 

        (2)  an
accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; 

        (3)  or
is not exclusive; 

        (4)  words
in the singular include the plural, and in the plural include the singular; 

        (5)  provisions
apply to successive events and transactions; and 

        (6)  references
to sections of or rules under the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the Commission
from time to time. 

SECTION 1.5    ONE CLASS OF SECURITIES    

        The
Series A Bonds and Series B Bonds shall vote and consent together on all matters as one class and none of the Series A Bonds and Series B Bonds shall have
the right to vote or consent as a separate class on any matter. 

 
 

ARTICLE 2.
  THE BONDS    
  

SECTION 2.1    FORM AND DATING    

        (a)    General.    

        The
Bonds and the Trustee's certificate of authentication shall be substantially in the form of Exhibits A-1 and A-2 hereto. The Bonds may have notations, legends
or endorsements required by law, stock exchange rule or usage. Each Bond shall be dated the date of its authentication. The Bonds shall be in denominations of $100,000 and integral multiples of $1,000
in excess thereof. 

        The
terms and provisions contained in the Bonds shall constitute, and are hereby expressly made, a part of this Indenture and the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, 

12

 

to the extent any provision of any Bond conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. 

        (b)    Global Bonds.    

        Bonds
issued in global form shall be substantially in the form of Exhibits A-1 or A-2 attached hereto (including the Global Bond Legend thereon and the
"Schedule of Exchanges of Interests in the Global Bond" attached thereto). Bonds issued in definitive form shall be substantially in the form of
Exhibit A-l attached hereto (but without the Global Bond Legend thereon and without the "Schedule of Exchanges
of interests in the Global Bond" attached thereto). Each Global Bond shall represent such of the outstanding Bonds as shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Bonds from time to time endorsed thereon and that the aggregate principal amount of outstanding Bonds represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Bond to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding
Bonds represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with written instructions given by the Holder thereof as required by
Section 2.6 hereof. 

        (c)    Temporary Global Bonds    

        Bonds
offered and sold in reliance on Regulation S shall be issued initially in the form of a Regulation S Temporary Global Bond, which shall be deposited on behalf of the
purchasers of the Bonds represented thereby with the Trustee, at its New York office, as custodian for the Depositary, and registered in the name of the Depositary or the nominee of the Depositary for
the accounts of designated agents holding on behalf of Euroclear or Cedel, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Restricted Period shall be
terminated upon the receipt by the Trustee of (i) a written certificate from the Depositary, together with copies of certificates from Euroclear and Cedel certifying that they have received
certification of Non-United States beneficial ownership of 100% of the aggregate principal amount of a Regulation S Temporary Global Bond (except to the extent of any beneficial
owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who will take delivery of a beneficial
ownership interest in a 144A Global Bond bearing a Private Placement Legend, all as contemplated by Section 2.6(a)(ii) hereof), and (ii) an Officer's Certificate from the Company.
Following the termination of the Restricted Period, beneficial interests in a Regulation S Temporary Global Bond shall be exchanged for beneficial interests in Regulation S Permanent
Global Bonds pursuant to the Applicable Procedures. Simultaneously with the authentication of Regulation S Permanent Global Bonds, the Trustee shall cancel the Regulation S Temporary
Global Bond. The aggregate principal amount of a Regulation S Temporary Global Bond and the Regulation S Permanent Global Bonds may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided. 

        (d)    Euroclear and Cedel Procedures Applicable.    

        The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of
Euroclear" and the "General Terms and Conditions of Cedelbank" and "Customer
Handbook" of Cedel shall be applicable to transfers of beneficial interests in a Regulation S Temporary Global Bond and the Regulation S Global Bonds that are
held by Participants through Euroclear or Cedel. 

13

 

        SECTION 2.2    EXECUTION AND AUTHENTICATION    

        Upon
surrender of, and in exchange for New Bonds, two Officers of the Company shall sign the Bonds for the Company by manual or facsimile signature and the Bonds shall be delivered to
the Trustee as custodian for the Depositary. The Company's seals, if any, shall be reproduced on the Bonds and may be in facsimile form. 

        If
an Officer of the Company whose signature is on a Bond no longer holds that office at the time a Bond is authenticated, the Bond shall nevertheless be valid. 

        A
Bond shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Bond has been authenticated under this
indenture. 

        The
Trustee shall, upon a written order of the Company signed by two Officers of the Company (an "Authentication Order"), authenticate
Series A Bonds for original issue up to the aggregate principal amount of $300,000,000 and Series B Bonds for original issue up to the aggregate principal amount of $530,000,000. The
aggregate principal amount of Series A Bonds or Series B Bonds outstanding at any time may not exceed such amounts except as provided in Section 2.7 hereof. 

        The
Trustee may (at the expense of the Company) appoint an authenticating agent acceptable to the Company to authenticate Bonds. An authenticating agent may authenticate Bonds whenever
the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with
Holders or an Affiliate of the Company and has the same protections under Article 7 herein. 

        SECTION 2.3    REGISTRAR AND PAYING AGENT    

        The
Company shall maintain an office or agency where Bonds may be presented for registration of transfer or for exchange ("Registrar") and
an office or agency where Bonds may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Bonds and of their transfer
and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any
co-registrar and the term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain a Registrar or
Paying Agent, the Trustee shall act as such. The Company may act as Paying Agent or Registrar. 

        The
Company initially appoints The Depository Trust Company ("DTC") to act as Depositary with respect to the Global Bonds. 

        The
Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Bonds. 

        SECTION 2.4    PAYING AGENT TO HOLD MONEY IN TRUST    

        (a)  The
Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee
all money held by the Paying Agent for the payment of principal of, premium, if any, or interest on the Bonds, and will notify the Trustee in writing of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company) shall have no further liability for the money. If the Company acts as Paying Agent, it shall
segregate and hold as separate trust funds for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee
shall serve as Paying Agent for the Bonds. 

14

 

        (b)  Prior
to the Effective Date of this Indenture, the Company shall cause to be deposited with the Paying Agent and the Paying Agent shall hold in trust all amounts accrued
and unpaid on the New Bonds from the Payment Date immediate prior to the Effective Date up to the Effective Date. The Paying Agent shall pay such amounts together with all other funds received for
such purpose to the Holders on the Payment Date following the Effective Date of this Indenture. 

        SECTION 2.5    HOLDER LISTS    

        The
Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply
with TIA § 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Bonds and the Company shall otherwise
comply with TIA § 312(a). 

        SECTION 2.6    TRANSFER AND EXCHANGE    

        (a)    Transfer and Exchange of Global Bonds.    

        A
Global Bond may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Bonds will be exchanged by the Company for Definitive Bonds if
(i) the Company delivers to the Trustee written notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered
under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary or (ii) the Company
in its sole discretion determines that the Global Bonds (in whole but not in part) should be exchanged for Definitive Bonds and delivers a written notice to such effect to the Trustee;  provided that in
no event shall a Regulation S Temporary Global Bond be exchanged by the Company for Definitive Bonds prior to (x) the
expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act. Upon the occurrence of
either of the preceding events in (i) or (ii) above, Definitive Bonds shall be issued in such names as the Depositary shall instruct the Trustee in writing. Global Bonds also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.7 and 2.10 hereof. Every Bond authenticated and delivered in exchange for, or in lieu of, a Global Bond or any portion thereof,
pursuant to this Section 2.6 or Section 2.7 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Bond. A Global Bond may not be exchanged for
another Bond other than as provided in this Section 2.6(a), however, beneficial interests in a Global Bond may be transferred and exchanged as provided in Section 2.6(b), (c) or
(f) hereof. 

        (b)    Transfer and Exchange of Beneficial Interests in the Global Bonds.    

        The
transfer and exchange of beneficial interests in the Global Bonds shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable
Procedures. Beneficial interests in the Restricted Global Bonds shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Bonds also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other
following subparagraphs, as applicable: 

          (i)  Transfer of Beneficial Interests in the Same Global Bond. Beneficial interests in any Restricted Global Bond may be
transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Bond in accordance with the transfer 

15

 

restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Temporary Regulation S Global Bond may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial
interests in any Unrestricted Global Bond may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in an Unrestricted Global Bond. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers
described in this Section 2.6(b)(i). 

        (ii)  All Other Transfers and Exchanges of Beneficial Interests in Global Bonds. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section 2.6(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial
interest in another Global Bond in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Bond in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Bond shall be registered to effect the transfer or exchange referred to in
(1) above; provided that in no event shall Definitive Bonds be issued upon the transfer or exchange of beneficial interests in a
Regulation S Temporary Global Bond prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to
Rule 903 under the Securities Act. Upon consummation of an Exchange Offer by the Company in accordance with Section 2.6(f) hereof, the requirements of this
Section 2.6(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such
beneficial interests in the Restricted Global Bonds. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Bonds contained in this Indenture and the
Bonds or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Bond(s) pursuant to Section 2.6(h) hereof. 

        (iii)  Transfer of Beneficial interests to Another Restricted Global Bond. A beneficial interest in any Restricted Global Bond
may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Bond if the transfer complies with the requirements of
Section 2.6(b)(ii) above and the Registrar receives the following: 

        (A)  if
the transferee will take delivery in the form of a beneficial interest in the 144A Global Bond, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1) thereof; and 

        (B)  if
the transferee will take delivery in the form of a beneficial interest in the Regulation S Temporary Global Bond or the Regulation S Permanent Global
Bond, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof. 

        (iv)  Transfer and Exchange of Beneficial interests in a Restricted Global Bond for Beneficial Interests in the Unrestricted Global
Bond. A beneficial interest in any Restricted Global Bond may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Bond or transferred to a Person who takes delivery thereof in the form of a beneficial interest 

16

 

in an Unrestricted Global Bond if the exchange or transfer complies with the requirements of Section 2.6(b)(ii) above and: 

        (A)  such
exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be
exchanged, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the New Bonds or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; 

        (B)  such
transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 

        (C)  such
transfer is effected by an Initial Purchaser pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 

        (D)  the
Registrar receives the following: 

        (1)  if
the holder of such beneficial interest in a Restricted Global Bond proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global
Bond, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (i)(a) thereof; or 

        (2)  if
the holder of such beneficial interest in a Restricted Global Bond proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Bond, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; 

and,
in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required
in order to maintain compliance with the Securities Act. 

        If
any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Bond has not yet been issued, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.2 hereof, the Trustee shall authenticate one or more Unrestricted Global Bonds in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above. 

        Beneficial
interests in an Unrestricted Global Bond cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted
Global Bond. 

        (c)    Transfer or Exchange of Beneficial Interests for Definitive Bonds.    

          (i)  Beneficial Interests in Restricted Global Bonds to Restricted Definitive Bonds. If any holder of a beneficial interest
in a Restricted Global Bond proposes to exchange such beneficial interest for a Restricted Definitive Bond or to transfer such beneficial interest to a Person who takes delivery thereof in the form of
a Restricted Definitive Bond, then, upon receipt by the Registrar of the following documentation: 

        (A)  if
the holder of such beneficial interest in a Restricted Global Bond proposes to exchange such beneficial interest for a Restricted Definitive Bond, a certificate from
such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof; 

17

  

        (B)  if
such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof; 

        (C)  if
such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under
the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; 

        (D)  if
such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; 

        (E)  if
such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(b) thereof; 

        (F)  if
such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c) thereof; or 

        (G)  if
such beneficial interest is being transferred to an institutional Accredited Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904 thereunder, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(d)
thereof, 

the
Trustee shall cause the aggregate principal amount of the applicable Global Bond to be reduced accordingly pursuant to Section 2.6(h) hereof, and the Company shall execute and the Trustee
shall upon receipt of an Authentication Order authenticate and deliver to the Person designated in the instructions a Definitive Bond in the appropriate principal amount. Any Definitive Bond issued in
exchange for a beneficial interest in a Restricted Global Bond pursuant to this Section 2.6(c) shall be registered in such name or names and in such authorized denomination or denominations as
the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the applicable Participant or Indirect Participant. The Trustee shall (at the expense
of the Company)
deliver such Definitive Bonds to the Persons in whose names such Bonds are so registered. Any Definitive Bond issued in exchange for a beneficial interest in a Restricted Global Bond pursuant to this
Section 2.6(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. 

        (ii)  Notwithstanding
Sections 2.6(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Bond may not be exchanged for a
Definitive Bond or transferred to a Person who takes delivery thereof in the form of a Definitive Bond prior to (x) the expiration of the Restricted Period and (y) the receipt by the
Registrar of any certificates required pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements
of the Securities Act other than Rule 903 or Rule 904. 

        (iii)  Beneficial Interests in Restricted Global Bonds to Unrestricted Definitive Bonds. A holder of a beneficial interest in
a Restricted Global Bond may exchange such beneficial 

18

 

interest for an Unrestricted Definitive Bond or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Bond only if: 

        (A)  such
exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in
the case of an exchange, or the transferee, in the case of a transfer, certifies in the Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the New Bonds or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; 

        (B)  such
transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 

        (C)  such
transfer is effected by an Initial Purchaser pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 

        (D)  the
Registrar receives the following: 

        (1)  if
the holder of such beneficial interest in a Restricted Global Bond proposes to exchange such beneficial interest for a Definitive Bond that does not bear the Private
Placement Legend, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or 

        (2)  if
the holder of such beneficial interest in a Restricted Global Bond proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the
form of a Definitive Bond that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item
(4) thereof, and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the Securities Act. 

        (iv)  Beneficial Interests in Unrestricted Global Bonds to Unrestricted Definitive Bonds. If any holder of a beneficial
interest in an Unrestricted Global Bond proposes to exchange such beneficial interest for a Definitive Bond or to transfer such beneficial interest to a Person who takes delivery thereof in the form
of a Definitive Bond, then, upon satisfaction of the conditions set forth in Section 2.6(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global
Bond to be reduced accordingly pursuant to Section 2.6(h) hereof, and the Company shall execute and the Trustee shall upon receipt of an Authentication Order authenticate and (at the expense of
the Company) deliver to the Person designated in the instructions a Definitive Bond in the appropriate principal amount. Any Definitive Bond issued in exchange for a beneficial interest pursuant to
this Section 2.6(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the applicable Participant or Indirect Participant. The Trustee shall (at the expense of the Company) deliver such Definitive Bonds to the
Persons in whose names such Bonds are so registered. Any Definitive Bond issued in exchange for a beneficial interest pursuant to this Section 2.6(c)(iv) shall not bear the Private
Placement Legend. 

19

 

        (d)    Transfer and Exchange of Definitive Bonds for Beneficial Interests.    

          (i)  Restricted Definitive Bonds to Beneficial Interests in Restricted Global Bonds. If any Holder of a Restricted Definitive
Bond proposes to exchange such Bond for a beneficial interest in a Restricted Global Bond or to transfer such Restricted Definitive Bond to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Bond, then, upon receipt by the Registrar of the following documentation: 

        (A)  if
the Holder of such Restricted Definitive Bond proposes to exchange such Bond for a beneficial interest in a Restricted Global Bond, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in item (2)(b) thereof; 

        (B)  if
such Restricted Definitive Bond is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof; 

        (C)  if
such Restricted Definitive Bond is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; 

        (D)  if
such Restricted Definitive Bond is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with
Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; 

        (E)  if
such Restricted Definitive Bond is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or 

        (F)  if
such Restricted Definitive Bond is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cancel the Restricted Definitive Bond, increase or cause to be increased the aggregate principal
amount of, in the case of clause (A) above, the appropriate Restricted Global Bond, in the case of clause (B) above, the 144A Global Bond, and in the case of clause (C) above, the
Regulation S Global Bond. 

        (ii)  Restricted Definitive Bonds to Beneficial Interests in Unrestricted Global Bonds. A Holder of a Restricted Definitive
Bond may exchange such Bond for a beneficial interest in an Unrestricted Global Bond or transfer such Restricted Definitive Bond to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Bond only if: 

        (A)  such
exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange or
the transferee, in the case of a transfer, certifies in the Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the New Bonds or
(3) a Person who is an affiliate (as defined in Rule 144) of the Company; 

        (B)  such
transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 

        (C)  such
transfer is effected by an Initial Purchaser pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 

20

 

        (D)  the
Registrar receives the following: 

        (1)  if
the Holder of such Restricted Definitive Bond proposes to exchange such Bond for a beneficial interest in the Unrestricted Global Bond, a certificate from such Holder
in the form of Exhibit C hereto, including the certifications in item (l)(c) thereof; or 

        (2)  if
the Holder of such Restricted Definitive Bond proposes to transfer such Bond to a Person who shall take delivery thereof in the form of a beneficial interest in the
Unrestricted Global Bond, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; 

and,
in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act. 

Upon
satisfaction of the conditions of any of the subparagraphs in this Section 2.6(d)(ii), the Trustee shall cancel the Definitive Bonds and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Bond. 

        (iii)  Unrestricted Definitive Bonds to Beneficial Interests in Unrestricted Global Bonds. A Holder of an Unrestricted
Definitive Bond may exchange such Bond for a beneficial interest in an Unrestricted Global Bond or transfer such Unrestricted Definitive Bond to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Bond at any time. Upon receipt of a written request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Bond
and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Bonds. 

        If
any such exchange or transfer from a Definitive Bond to a beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an
Unrestricted Global Bond has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.2 hereof, the Trustee shall authenticate, one or more Unrestricted Global Bonds in an aggregate principal amount equal to the principal amount of Definitive Bonds so transferred. 

        (e)    Transfer and Exchange of Definitive Bonds for Definitive Bonds.    

        Upon
request by a Holder of Definitive Bonds and such Holder's compliance with the provisions of this Section 2.6(e), the Registrar shall register the transfer or exchange of
Definitive Bonds. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Bonds duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by his attorney, duly authorized in writing. In addition, the requesting Holder shall provide any
additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.6(e). 

          (i)  Restricted Definitive Bonds to Restricted Definitive Bonds. Any Restricted Definitive Bond may be transferred to and
registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Bond if the Registrar receives the following: 

        (A)  if
the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; 

21

 

        (B)  if
the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and 

        (C)  if
the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable. 

        (ii)  Restricted Definitive Bonds to Unrestricted Definitive Bonds. Any Restricted Definitive Bond may be exchanged by the
Holder thereof for an Unrestricted Definitive Bond or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Bond if: 

        (A)  such
exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or
the transferee, in the
case of a transfer, certifies in the Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the New Bonds or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company; 

        (B)  any
such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 

        (C)  any
such transfer is effected by an Initial Purchaser pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 

        (D)  the
Registrar receives the following: 

        (1)  if
the Holder of such Restricted Definitive Bonds proposes to exchange such Bonds for an Unrestricted Definitive Bond, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (I)(d) thereof; or 

        (2)  if
the Holder of such Restricted Definitive Bonds proposes to transfer such Bonds to a Person who shall take delivery thereof in the form of an Unrestricted Definitive
Bond, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; 

and,
in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with
the Securities Act. 

        (iii)  Unrestricted Definitive Bonds to Unrestricted Definitive Bonds. A Holder of Unrestricted Definitive Bonds may transfer
such Bonds to a Person who takes delivery thereof in the form of an Unrestricted Definitive Bond. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted
Definitive Bonds pursuant to the instructions from the Holder thereof. 

        (f)    Intentionally Omitted.    

        (g)    Legends.    

        The
following legends shall appear on the face of all Global Bonds and Definitive Bonds issued under this Indenture unless specifically stated otherwise in the applicable provisions of
this Indenture. 

          (i)  Private Placement Legend. 

22

 

        (A)  Except
as permitted by subparagraph (B) below, each Global Bond and each Definitive Bond (and all Bonds issued in exchange therefor or substitution thereof) shall
bear the legend in substantially the following form: 

"THE
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERRED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT
FROM OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACQUISITION HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 904
OF REGULATION 5, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT
OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR ANY PREDECESSOR OF THIS SECURITY) OR THE LAST DAY ON WHICH THE COMPANY OR AN AFFILIATE OF THE COMPANY WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAWS (THE "RESALE RESTRICTION TERMINATION DATE") OFFER, SELL
OR OTHERWISE TRANSFER THIS SECURITY, EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT IS PURCHASING THE CERTIFICATES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT 

23

 

THE COMPANY AND THE TRUSTEE SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OR TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE
OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT." 

        (B)  Notwithstanding
the foregoing, any Global Bond or Definitive Bond issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii),
(e)(iii) or (f) to this Section 2.6 (and all Bonds issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. 

        (ii)  Global
Bond Legend. Each Global Bond shall bear a legend in substantially the following form: 

"THIS
GLOBAL BOND IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS BOND) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.7 OF THE INDENTURE, (II) THIS GLOBAL BOND MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS GLOBAL BOND MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL BOND MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY." 

        (iii)  Regulation S Temporary Global Bond Legend. The Regulation S Temporary Global Bond shall bear a legend in
substantially the following form: 

"THE
RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL BOND, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED BONDS, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN). NEITHER THE
HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL BOND SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON." 

        (h)    Cancellation and/or Adjustment of Global Bonds.    

        At
such time as all beneficial interests in a particular Global Bond have been exchanged for Definitive Bonds or a particular Global Bond has been redeemed, repurchased or canceled in
whole and not in part, each such Global Bond shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Bond is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Bond or for Definitive Bonds, the
principal amount of Bonds represented by such Global Bond shall be reduced 

24

 

accordingly and an endorsement shall be made on such Global Bond by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Bond, such other Global Bond shall be increased accordingly and an
endorsement shall be made on such Global Bond by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. 

        (i)    General Provisions Relating to Transfers and Exchanges.    

          (i)  To
permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Bonds and Definitive Bonds upon receipt of an
Authentication Order in accordance with Section 2.2 hereof or upon receipt of a written request of the Registrar in accordance with the terms hereof. 

        (ii)  No
service charge shall be made to a holder of a beneficial interest in a Global Bond or to a Holder of a Definitive Bond for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.6, 3.7, 3.8 and 9.5 hereof). 

        (iii)  The
Registrar shall not be required to register the transfer of or exchange any Bond selected for redemption in whole or in part, except the unredeemed portion of any
Bond being redeemed in part. 

        (iv)  All
Global Bonds and Definitive Bonds issued upon any registration of transfer or exchange of Global Bonds or Definitive Bonds shall be the valid obligations of the
Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Global Bonds or Definitive Bonds surrendered upon such registration of transfer or exchange. 

        (v)  The
Company shall not be required (A) to issue, to register the transfer of or to exchange any Bonds during a period beginning at the opening of business
15 days before the day of any selection of Bonds for redemption under Section 3.2 hereof and ending at the close of business on the day of selection, (B) to register the transfer
of or to exchange any Bond so selected for redemption in whole or in part, except the unredeemed portion of any Bond being redeemed in part or (C) to register the transfer of or to exchange a
Bond between a record date and the next succeeding interest payment date. 

        (vi)  Prior
to due presentment for the registration of a transfer of any Bond, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Bond is
registered as the absolute owner of such Bond for the purpose of receiving payment of principal of and interest on such Bond and for all other purposes, and none of the Trustee, any Agent or the
Company shall be affected by notice to the contrary. 

      (vii)  The
Trustee shall authenticate Global Bonds and Definitive Bonds in accordance with the provisions of Section 2.2 hereof. 

      (viii)  All
certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.6 to effect a registration of
transfer or exchange may be submitted by facsimile. 

25

  

SECTION 2.7    REPLACEMENT BONDS    

        If
any mutilated Bond is surrendered to the Trustee or the Company and the Trustee and the Company receives evidence to its satisfaction of the destruction, loss or theft of any Bond,
the Company shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Bond if the Company's and the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity Bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Bond is replaced. The Company and the Trustee may charge for their expenses in replacing a Bond. 

        Every
replacement Bond is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Bonds duly
issued hereunder. 

SECTION 2.8    OUTSTANDING BONDS    

        The
Bonds outstanding at any time are all the Bonds authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest
in a Global Bond effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.9 hereof, a Bond does
not cease to be outstanding because the Company or an Affiliate of the Company holds the Bond. 

        If
a Bond is replaced pursuant to Section 2.7 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Bond is held by a bona
fide purchaser. 

        If
the principal amount of any Bond is considered paid under Section 4.1 hereof, it ceases to be outstanding and interest on it ceases to accrue. 

        If
the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Bonds payable on that
date, then on and
after that date such Bonds shall be deemed to be no longer outstanding and shall cease to accrue interest. 

SECTION 2.9    TREASURY BONDS    

        In
determining whether the Holders of the required principal amount of Bonds have concurred in any direction, waiver or consent, Bonds owned by the Company, or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common control with the Company shall be considered as though not outstanding, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, waiver or consent, only Bonds that the Trustee knows are so owned shall be so disregarded. 

SECTION 2.10    TEMPORARY BONDS    

        Until
certificates representing Bonds are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Bonds.
Temporary Bonds shall be substantially in the form of certificated Bonds but may have variations that the Company considers appropriate for temporary Bonds and as shall be reasonably acceptable to the
Trustee. 

        Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Bonds in exchange for temporary Bonds. 

        Holders
of temporary Bonds shall be entitled to all of the benefits of this Indenture. 

26

 

SECTION 2.11    CANCELLATION    

        The
Company at any time may deliver Bonds to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Bonds surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all Bonds surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy canceled
Bonds (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all canceled Bonds shall be delivered (at the expense of the Company) to the Company. The
Company may not issue new Bonds to replace Bonds that it has paid or that have been delivered to the Trustee for cancellation. 

SECTION 2.12    DEFAULTED INTEREST    

        If
the Company defaults in a payment of interest on the Bonds, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Bonds and in Section 4.1 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Bond and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment
date, provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At
least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be
mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. 

SECTION 2.13    CUSIP NUMBERS    

        The
Company in issuing the Bonds may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders, provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the
Bonds or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Bonds, and any such redemption shall not be affected by any
defect in or omission of such numbers. 

 
 

ARTICLE 3.
  REDEMPTION AND PREPAYMENT    
  

SECTION 3.1    NOTICES TO TRUSTEE    

        If
the Company elects to redeem Bonds pursuant to the redemption provisions of Section 3.7 or 3.8 hereof, it shall furnish to the Trustee, at least 30 days but not more
than 60 days before a redemption date, an Officer's Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption
date, (iii) the principal amount of Bonds to be redeemed and (iv) the redemption price. 

SECTION 3.2    SELECTION OF BONDS TO BE REDEEMED    

        If
less than all of the Bonds are to be redeemed at any time, the Trustee shall select the Bonds to be redeemed among the Holders of the Bonds in compliance with the requirements of the
principal national securities exchange, if any, on which the Bonds are listed or, if the Bonds are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In the event of partial redemption by lot, the particular Bonds to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Bonds not previously called for redemption. 

27

 

        The
Trustee shall promptly notify the Company of the Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be
redeemed. Bonds and portions of Bonds selected shall be in amounts of $100,000 or whole multiples of $1,000 in excess thereof; except that if all of the Bonds of a Holder are to be redeemed, the
entire outstanding amount of Bonds held by such Holder, even if not in the amount of $100,000 or a multiple of $1,000 in excess thereof, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Bonds called for redemption also apply to portions of Bonds called for redemption. 

SECTION 3.3    NOTICE OF REDEMPTION    

        At
least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Bonds are to be redeemed at its registered address. 

        The
notice shall identify the Bonds to be redeemed and shall state: 

        (a)  the
redemption date; 

        (b)  the
redemption price; 

        (c)  if
any Bond is being redeemed in part, the portion of the principal amount of such Bond to be redeemed and that, after the redemption date upon surrender of such Bond, a
new Bond or Bonds in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Bond; 

        (d)  the
name and address of the Paying Agent; 

        (e)  that
Bonds called for redemption must be surrendered to the Paying Agent to collect the redemption price; 

        (f)    that,
unless the Company defaults in making such redemption payment, interest on Bonds called for redemption ceases to accrue on and after the redemption date; 

        (g)  the
paragraph of the Bonds and/or Section of this Indenture pursuant to which the Bonds called for redemption are being redeemed; and 

        (h)  that
no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Bonds. 

        At
the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; provided,  however, that the Company shall
have delivered to the Trustee, at least 45 days prior to the redemption date (or such shorter time period
acceptable to the Trustee), an Officer's Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. 

SECTION 3.4    EFFECT OF NOTICE OF REDEMPTION    

        Once
notice of redemption is mailed in accordance with Section 3.3 hereof, Bonds called for redemption become irrevocably due and payable on the redemption date at the redemption
price. A notice of redemption may not be conditional. 

SECTION 3.5    DEPOSIT OF REDEMPTION PRICE    

        One
Business Day prior to the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued interest on
all Bonds to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all Bonds to be redeemed. 

28

 

        If
the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Bonds or the portions of Bonds called for
redemption. If a Bond is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose
name such Bond was registered at the close of business on such record date. If any Bond called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company
to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such
unpaid principal, in each case at the rate provided in the Bonds and in Section 4.1 hereof. 

SECTION 3.6    BONDS REDEEMED IN PART    

        Upon
surrender of a Bond that is redeemed in part, the Company shall issue and, upon receipt of an Authentication Order, the Trustee shall authenticate for the Holder at the expense of
the Company a new Bond equal in principal amount to the unredeemed portion of the Bond surrendered. 

SECTION 3.7    OPTIONAL REDEMPTION    

        The
Bonds shall be subject to optional redemption at any time at a Redemption Price equal to the outstanding principal amount of the Bonds to be redeemed plus all accrued and unpaid
interest thereon to the Redemption Date, plus the Make-Whole Premium, if any. 

SECTION 3.8    MANDATORY REDEMPTION    

        The
Bonds will be subject to mandatory redemption upon the occurrence of a Recovery Event with respect to the Facilities, other than with respect to amounts received by the Owner Lessor
in connection with a Recovery Event for which the Facility Lessee elects to restore or replace the asset or assets in respect of which such Recovery Event occurred and a Reinvestment Notice is
provided to the Collateral Agent and the Trustee within 45 days of such Recovery Event (provided that, with respect to any Recovery Event of $50 million or more, the Independent Engineer
shall have certified as to the reasonableness, in light of Prudent Industry Practice, of the Facility Lessee's repair and replacement plans as set forth in the Facility Lessee's Reinvestment Notice
relating to such Recovery Event). Any mandatory redemption of the Bonds will be without premium or penalty at a Redemption Price equal to the unpaid principal amount thereof plus accrued and unpaid
interest thereon to the Redemption Date. 

SECTION 3.9    NOTICES TO BONDHOLDERS BY LEASE INDENTURE TRUSTEE    

        All
provisions with respect to notices to the Bondholders will be deemed to have been satisfied by delivery of such notice to the Bondholders by the Lease Indenture Trustee or the Owner
Lessor in compliance with the provisions of this Article III. In addition, all notices provided to the Company under this Indenture must also be provided by the Trustee to the Owner Lessor,
Security Agent, Facility Lessee and Lease Indenture Trustee. 

 
 

ARTICLE 4.
  COVENANTS    
  

SECTION 4.1    PAYMENT OF BONDS    

        The
Company shall pay or cause to be paid the principal of, premium, if any, and interest on the Bonds on the dates and in the manner provided in the Bonds. Principal, premium, if any,
and interest shall be considered paid on the date due if the Paying Agent, if other than the Company, holds as of 10:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. 

29

 

        The
Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess
of the then applicable interest rate on the Bonds to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful. 

SECTION 4.2    MAINTENANCE OF OFFICE OR AGENCY    

        The
Company shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Bonds may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Bonds and this Indenture
may be served. The Company shall
give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. 

        The
Company may also from time to time designate one or more other offices or agencies where the Bonds may be presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location of any such other office or agency. 

        The
Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with this Section and Section 2.3. 

SECTION 4.3    INFORMATION REQUIREMENTS    

        (a)  The
Company shall furnish or cause to be furnished to the Trustee, all information that it receives pursuant to Section 5.1 of the Participation Agreement,  provided, however that the Company is not
obligated to provide such information if it has been provided to the Trustee directly by Homer City.
 

SECTION 4.4    STAY, EXTENSION AND USURY LAWS    

        The
Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. 

SECTION 4.5    LIMITATION ON SUBSIDIARIES AND INVESTMENTS    

        The
Company shall not create or acquire any Subsidiary. 

SECTION 4.6    LIMITATION ON INCURRENCE OF INDEBTEDNESS    

        The
Company shall not, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any indebtedness other than Permitted Indebtedness. 

        "Permitted Indebtedness" shall mean Indebtedness incurred in respect of the Bonds. 

30

 

        Accrual
of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for
purposes of this Section 4.6. 

SECTION 4.7    LIMITATION OF SALE OF ASSETS    

        The
Company shall not sell, transfer, convey, lease or otherwise dispose of any assets. 

SECTION 4.8    LIMITATION ON TRANSACTIONS WITH AFFILIATES    

        The
Company shall not enter into any transaction or arrangement, whether or not in the ordinary course of business, with any Affiliates of the Company; provided
however that any transaction between the Company and Wilmington Trust Company as the sole member of the Company consistent with the terms of the limited liability company
agreement as in effect on the date hereof of the Company will not be deemed to be an affiliate transaction for purposes of this Section 4.8. 

SECTION 4.9    LIMITATION ON LIENS    

        The
Company shall not create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind upon any of its property or assets, now owned or hereafter
acquired, other than Permitted Liens. 

        The
provisions of the first paragraph of this Section 4.9 shall not apply to the incurrence of any of the following types of Liens (collectively,
"Permitted Liens"): 

        (a)  Liens
created in this Indenture; and 

        (b)  Liens
for taxes, assessments or governmental charges or levies that are not yet delinquent and remain payable without penalty or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently prosecuted; provided that any reserve or other appropriate provision as shall be required
to conform with GAAP shall have been made therefor. 

SECTION 4.10    LIMITATION ON BUSINESS ACTIVITIES    

        The
Company shall not engage in any business or conduct any activities other than payment on and other obligations in respect of the Bonds as set forth in Section 4.1. 

SECTION 4.11    MAINTENANCE OF EXISTENCE    

        The
Company shall at all times (i) maintain its respective existence in good standing under the laws of Delaware and (ii) maintain and renew all of its respective rights,
powers, privileges and franchises in all material respects. 

SECTION 4.12    PAYMENTS FOR CONSENT    

        The
Company shall not directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder of any Bonds for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Bonds unless such consideration is offered to be paid or is paid to all Holders of the Bonds that
consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. 

SECTION 4.13    COMPLIANCE WITH LAWS    

        The
Company shall comply with all applicable laws, acts, rules, regulations, permits, orders and requirements of any legislative, executive, administrative or judicial body relating to
the Company in all material respects. 

31

 

SECTION 4.14    PERFECTION OF SECURITY INTERESTS    

        Upon
receipt of written instructions from the Trustee, the Company shall undertake, or shall cause to be undertaken, such specified actions as may be necessary or appropriate in the
reasonable judgement of the Trustee to (a) maintain the security interest in the Collateral in full force and effect (including the priority thereof) and (b) preserve and protect the
Collateral and protect and enforce the Company's rights and title to the Collateral including, without limitation, the making or delivery of all filings and recordations, the payment of fees and other
charges and the issuance of supplemental documentation for such purposes. The Trustee shall undertake to provide the Company with the written instructions required herein, however, failure by the
Trustee, for any reason, to provide such written instructions shall not, in any way, negate or override the Company's covenant to preserve, or cause to be preserved,the security interests granted
under this Indenture. 

SECTION 4.15    CONSENT PAYMENT    

        Until
the Consent Payment is paid in accordance with this Section 4.15, the Company shall maintain with the Trustee the Consent Payment Account. On the Expiration Date, the
Trustee shall deposit the Consent Payment it has received pursuant to Section 2.3(d) of each Participation Agreement into the Consent Payment Account. The Trustee shall pay the aggregate amount
of the Consent Payment to each Holder of the Bonds who had consented to the Proposals as described in the Consent Solicitation Statement on or prior to the Expiration Date its portion of the Consent
Payment within five (5) Business Days of the Expiration Date. 

 
 

ARTICLE 5.
  SUCCESSORS    
  

SECTION 5.1    LIMITATION ON MERGER, CONSOLIDATION AND SALE OF SUBSTANTIALLY ALL ASSETS    

        The
Company shall not, directly or indirectly, consolidate or merge with or into any other person (whether or not the Company is the surviving corporation), or sell, assign, convey,
lease, transfer or otherwise dispose of, all or substantially all of its properties or assets in one or a series of transactions, to any Person or Persons. 

 
 

ARTICLE 6.
  EVENTS OF DEFAULT    
  

SECTION 6.1    EVENTS OF DEFAULT    

        Each
of the following shall constitute an Event of Default hereunder: 

        (a)  default
for 5 Business Days in the payment when due of any principal of, premium, if any, or interest on the Bonds; or 

        (b)  failure
by the Company to comply with the provisions described above under Sections 4.6, 4.7, 4.9, 4.10, 4.11, or 5.1, and such failure shall continue uncured for 30 or
more days from the date an authorized officer of the Company receives actual notice thereof; 

        (c)  the
Company pursuant to or within the meaning of Bankruptcy Law: 

          (i)  commences
a voluntary case, 

        (ii)  consents
to the entry of an order for relief against it in an involuntary case, 

        (iii)  consents
to the appointment of a custodian of it or for all or substantially all of its property, 

        (iv)  make
a general assignment for the benefit of its creditors, or 

32

 

        (v)  generally
is not paying its debts as they become due; 

        (d)  a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: 

          (i)  is
for relief against the Company in an involuntary case; 

        (ii)  appoints
a custodian of the Company or for all or substantially all of the property of the Company; or 

        (iii)  orders
the liquidation of the Company; and, in which case, the order or decree remains unstayed and in effect for 60 consecutive days; 

        (e)  any
Lease Indenture Event of Default; or 

        (f)    failure
by the Company to comply with any of its agreements in this Indenture and such failure shall continue uncured for 60 or more days from the date an authorized
officer of the Company receives actual notice thereof (or to the extent the Default is curable but cannot be cured) within such 60 day period, so long as the Company provides an Officer's
Certificate to the Trustee stating that it is diligently pursuing a cure, such longer period of time which may be necessary in good faith to cure the same, but in no event to exceed 90 days. 

SECTION 6.2    ACCELERATION    

        If
any Event of Default (other than an Event of Default specified in clause (c) or (d) of Section 6.1 hereof with respect to the Company) occurs and is continuing,
the Trustee may, and upon written direction of the Holders of at least 331/3% (in the case of any Event of Default specified in clause (a) of Section 6.1 hereof) or 50%
(in the case of any other Event of Default) in principal amount of the then outstanding Bonds shall, declare, by written notice to the Company, all the Bonds to be due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (c) or (d) of Section 6.1 hereof occurs with respect to the Company, all outstanding Bonds shall be due
and payable without further action or notice. Holders of the Bonds may not enforce this Indenture or the
Bonds except as provided in this Indenture. The Trustee may withhold from Holders of the Bonds notice of any continuing Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest) if it determines that withholding notice is in their best interest. The Holders of at least 662/3% in aggregate principal amount of the then
outstanding Bonds by notice to the Trustee may on behalf of the Holders of all of the Bonds rescind an acceleration and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal, interest or premium that has become due solely because of the acceleration) have been cured or waived. 

        The
Holders of a majority in aggregate principal amount of the Bonds then outstanding by notice to the Trustee may on behalf of the Holders of all of the Bonds waive any existing Default
or Event of Default and its consequences under this Indenture except (i) a continuing Default or Event of Default in the payment of principal of, premium, if any, or interest on, the Bonds
(including in connection with an offer to purchase) and (ii) an Event of Default specified in clause (c) or (d) of Section 6.1 hereof. 

SECTION 6.3    OTHER REMEDIES    

        If
an Event of Default occurs and is continuing, the Trustee, in its sole discretion, may pursue any available remedy to collect the payment of principal, premium, if any, or interest on
the Bonds or to enforce the performance of any provision of the Bonds or this Indenture. 

        The
Trustee may maintain a proceeding even if it does not possess any of the Bonds or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of
a Bond in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy 

33

 

or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. 

SECTION 6.4    WAIVER OF PAST DEFAULTS    

        Upon
any waiver of any existing Default or Event of Default pursuant to the second paragraph of Section 6.2, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. 

SECTION 6.5    CONTROL BY MAJORITY    

        Holders
of a majority in principal amount of the then outstanding Bonds may direct the time, method and place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Bonds or that may involve the Trustee in personal liability. The Trustee may take any other action consistent with this Indenture relating to any such
direction. 

SECTION 6.6    LIMITATION ON SUITS    

        A
Holder of a Bond may pursue a remedy with respect to this Indenture or the Bonds only if: 

        (a)  the
Holder of a Bond gives to the Trustee written notice of a continuing Event of Default; 

        (b)  the
Holders of a majority in principal amount of the then outstanding Bonds make a written request to the Trustee to pursue the remedy; 

        (c)  such
Holder of a Bond or Holders of Bonds offer and, if requested, provide to the Trustee security and indemnity satisfactory to the Trustee against any loss, liability
or expense; 

        (d)  the
Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of security and indemnity;
and 

        (e)  during
such 60-day period the Holders of a majority in principal amount of the then outstanding Bonds do not give the Trustee a direction inconsistent with
the request. 

        A
Holder of a Bond may not use this Indenture to prejudice the rights of another Holder of a Bond or to obtain a preference or priority over another Holder of a Bond. 

34

  

SECTION 6.7    RIGHTS OF HOLDERS OF BONDS TO RECEIVE PAYMENT    

        Notwithstanding
any other provision of this Indenture, the right of any Holder of a Bond, which is absolute and unconditional, to receive payment of principal, premium, if any, and
interest on the Bond, on or after the respective due dates expressed in the Bond (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or
after such respective dates, or the obligation of the Company, which is also absolute and unconditional, to pay the principal of, premium, if any, and interest on the Bond to such Holder at the time
and place set forth in the Bond, shall not be impaired or affected without the consent of such Holder. 

SECTION 6.8    COLLECTION SUIT BY TRUSTEE    

        If
an Event of Default specified in Section 6.1(a) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount of principal of, premium, if any, and interest remaining unpaid on the Bonds and interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, fees, expenses, disbursements and advances of the Trustee, its agents and
counsel. 

SECTION 6.9    TRUSTEE MAY FILE PROOFS OF CLAIM    

        The
Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, fees, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Bonds allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Bonds), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any
such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to it for the compensation, fees, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under or in connection with this Indenture. To the extent that the payment of any such compensation, fees, expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under or in connection with this Indenture out of the
estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a perfected, first priority Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise,
and such Lien in favor of a predecessor Trustee shall be senior to the Lien in favor of the current Trustee. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent
to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Bonds or the rights of any Holder, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding. 

SECTION 6.10    PRIORITIES    

        If
the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: 

        First: to the Trustee (including any predecessor Trustee), its agents and attorneys for amounts due under Section 7.7 hereof,
including payment of all compensation, fees, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; 

        Second: to Holders of Bonds for amounts due and unpaid on the Bonds for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the 

35

 

amounts due and payable on the Bonds for principal, premium, if any, and interest, respectively; and 

        Third: to the Company or to such party as a court of competent jurisdiction shall direct. 

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

SECTION 6.11    FOR COSTS    

        In
any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Bond pursuant to Section 6.7 hereof, or a suit by Holders of more than 10% in principal amount of the
then outstanding Bonds. 

 
 

ARTICLE 7.
  TRUSTEE    
  

SECTION 7.1    DUTIES OF TRUSTEE    

        (a)  If
an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in its exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. 

        (b)  Except
during the continuance of an Event of Default: 

          (i)  the
duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and 

        (ii)  in
the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture. 

        (c)  The
Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: 

          (i)  this
paragraph does not limit the effect of paragraph (b) of this Section; 

        (ii)  the
Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and 

        (iii)  the
Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to
Section 6.5 hereof. 

        (d)  Whether
or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c),
(e) and (f) of this Section. 

        (e)  No
provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any
of its rights and powers 

36

 

under this Indenture at the request or direction of any Holders, unless such Holder shall have offered and, if requested, provided to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense. 

        (f)    The
Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held or deposited with the
Trustee for the benefit of the Holders shall be held in a segregated account maintained or controlled by the Trustee. 

SECTION 7.2    RIGHTS OF TRUSTEE    

        (a)  The
Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and if the
Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company personally or by agent or attorney. 

        (b)  Before
the Trustee acts or refrains from acting, it may require an Officer's Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such Officer's Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. 

        (c)  The
Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. 

        (d)  The
Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it
by this Indenture. 

        (e)  Unless
otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the
Company. 

        (f)    The
Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless
such Holders shall have offered and, if requested, provided to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with
such request or direction. 

        (g)  No
permissive right of the Trustee to act hereunder shall be construed as a duty. 

        (h)  Whenever
in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers Certificate, an Opinion of Counsel, or both. 

SECTION 7.3    INDIVIDUAL RIGHTS OF TRUSTEE    

        The
Trustee in its individual or any other capacity may become the owner or pledgee of Bonds and may otherwise deal with the Company or any Affiliate of the Company with the same rights
it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for
permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof. 

SECTION 7.4    TRUSTEE'S DISCLAIMER    

        The
Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Bonds or the Registration Rights Agreement; it shall not be 

37

 

accountable for the Company's use of the proceeds from the Bonds or any money paid to the Company or upon the Company's direction under any provision of this Indenture; it shall not be responsible
for the use or application of any money received by any Paying Agent other than the
Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Bonds or any other document in connection with the sale of the Bonds or pursuant to this Indenture
other than its certificate of authentication. 

SECTION 7.5    NOTICE OF DEFAULTS    

        If
a Default or an Event of Default occurs and is continuing and if the Trustee receives written notice thereof, the Trustee shall (at the expense of the Company) mail to Holders of
Bonds a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or an Event of Default in payment of principal of, premium, if any, or interest
on any Bond or Lessor Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of
the Holders of the Bonds. 

SECTION 7.6    REPORTS BY TRUSTEE TO HOLDERS OF THE BONDS    

        Within
60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Bonds remain outstanding, the Trustee shall (at
the expense of the Company) mail to the Holders of the Bonds a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA §
313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA § 313(b). The Trustee shall transmit by
mail all reports as required by TIA § 313(c). 

        A
copy of each report at the time of its mailing to the Holders of Bonds shall be mailed to the Company and filed with the Commission and each stock exchange on which the Bonds are
listed in accordance with TIA § 313(d). The Company shall promptly notify the Trustee when the Bonds are listed on any stock exchange. 

SECTION 7.7    COMPENSATION AND INDEMNITY    

        The
Company agrees to pay to the Trustee from time to time compensation as agreed upon by the Trustee and the Company, and, in the absence of any such agreement, reasonable compensation
for its acceptance of this Indenture and services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee promptly upon request for all disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the compensation,
disbursements and reasonable expenses of the Trustee's agents and counsel. 

        The
obligations of the Company to the Trustee under this Indenture shall survive the satisfaction and discharge of this Indenture. 

        To
secure the Company's payment obligations in this Section, the Trustee shall have a Lien prior to the Bonds on all money or property held or collected by the Trustee, except that held
in trust to pay principal and interest on particular Bonds. Such Lien shall survive the satisfaction and discharge of this Indenture. 

        When
the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.1(c) or (d) hereof occurs, the expenses and the compensation for the
services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. 

        The
Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable. 

38

 

SECTION 7.8    REPLACEMENT OF TRUSTEE    

        A
resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this
Section. 

        The
Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Bonds of a majority in principal amount of the
then outstanding Bonds may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may by a Board Resolution remove the Trustee if: 

        (a)  the
Trustee fails to comply with Section 7.10 hereof; 

        (b)  the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; 

        (c)  a
custodian or public officer takes charge of the Trustee or its property; or 

        (d)  the
Trustee becomes incapable of acting as trustee hereunder. 

        If
the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Bonds may appoint a successor Trustee to replace the successor Trustee appointed by the Company. 

        If
a successor Trustee does not take office within 60 days after a vacancy exists in the office of Trustee, the Company, or the Holders of Bonds of at least 10% in principal
amount of the then outstanding Bonds may petition any court of competent jurisdiction for the appointment of a successor Trustee. 

        If
the Trustee, after receiving a written request by any Holder of a Bond who has been a bona fide Holder of a Bond for at least six
months, fails to comply with Section 7.10, such Holder of a Bond may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. 

        A
successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of
the Bonds. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the Company's
obligations under Section 7.7 hereof shall continue for the benefit of the retiring Trustee. 

SECTION 7.9    SUCCESSOR TRUSTEE BY MERGER, ETC    

        If
the Trustee or any Agent consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor
corporation without any further act shall be the successor Trustee or Agent, as the case may be. 

SECTION 7.10    ELIGIBILITY; DISQUALIFICATION    

        There
shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or
state authorities and that together with its direct parent, if any, or in the case of a corporation included in a bank holding company system, its related bank holding company, has a combined capital
and surplus of at least $50 million as set forth in its most recent published annual report of condition. 

39

 

        This
Indenture shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b). 

SECTION 7.11    PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY    

        The
Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to
TIA § 311(a) to the extent indicated therein. 

SECTION 7.12    OTHER CAPACITIES    

        All
references in this Indenture to the Trustee shall be deemed to refer to the Trustee in its capacity as Trustee and in its capacities as any Agent, to the extent acting in such
capacities, and every provision of this Indenture relating to the conduct or affecting the liability or offering protection, immunity or indemnity to the Trustee shall be deemed to apply with the same
force and effect to the Trustee acting in its capacities as any Agent. 

 
 

ARTICLE 8.
  LEGAL DEFEASANCE AND COVENANT DEFEASANCE    
  

SECTION 8.1    OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE    

        The
Company may, at its option and at any time, elect to have either Section 8.2 or 8.3 hereof be applied to all outstanding Bonds upon compliance with the conditions set forth
below in this Article 8. 

SECTION 8.2    LEGAL DEFEASANCE AND DISCHARGE    

        Upon
the Company's exercise under Section 8.1 hereof of the option applicable to this Section 8.2, the Company shall, subject to the satisfaction of the conditions set
forth in Section 8.4 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Bonds on the date the conditions set forth below are satisfied (hereinafter,
"Legal Defeasance"). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Bonds, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.5 hereof and the
other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Bonds and this Indenture (and the Trustee, on demand of and
at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:
(a) the rights of Holders of outstanding Bonds to receive solely from the trust fund described in Section 8.4 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest on such Bonds when such payments are due, (b) the Company's obligations with respect to such Bonds under Article 2 and Section 4.1
hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee and any Agent hereunder and the Company's obligations in connection therewith, including, without limitation,
Article 7 and Section 8.5 and 8.7 hereunder, and (d) this Article 8. Subject to compliance with this Article 8, the Company may exercise its option under this
Section 8.2 notwithstanding the prior exercise of its option under Section 8.3 hereof. 

SECTION 8.3    COVENANT DEFEASANCE    

        Upon
the Company's exercise under Section 8.1 hereof of the option applicable to this Section 8.3, the Company shall, subject to the satisfaction of the conditions set
forth in Section 8.4 hereof, be released from its obligations under the covenants contained in Sections 4.3, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.13 and 5.1 hereof with respect to the outstanding
Bonds on and after the date the conditions set forth in Section 8.4 are satisfied (hereinafter, "Covenant Defeasance"), and the Bonds shall
thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but
shall continue to 

40

 

be deemed "outstanding" for all other purposes hereunder (it being understood that such Bonds shall not be deemed outstanding for accounting purposes).
For this purpose, Covenant Defeasance means that, with respect to the outstanding Bonds, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation
set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.1 hereof, but, except as specified above, the
remainder of this Indenture and such Bonds shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.1 hereof of the option applicable to this Section 8.3
hereof, subject to the satisfaction of the conditions set forth in Section 8.4 hereof, Sections 6.1(d) through 6.1(f) hereof shall not constitute Events of Default. 

SECTION 8.4    CONDITIONS TO LEGAL OR COVENANT DEFEASANCE    

        The
following shall be the conditions to the application of either Section 8.2 or 8.3 hereof to the outstanding Bonds: 

        In
order to exercise either Legal Defeasance or Covenant Defeasance: 

        (a)  the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Bonds, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of,
premium, if any, and interest on the outstanding Bonds on the stated maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Bonds are being
defeased to maturity or to a particular redemption date; 

        (b)  in
the case of an election under Section 8.2 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Bonds will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; 

        (c)  in
the case of an election under Section 8.3 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders of the outstanding Bonds will not recognize income, gain or loss for federal income tax purposes
as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance
had not occurred; 

        (d)  no
Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or an Event of Default resulting from the
borrowing of funds to be applied to such deposit) or insofar as Sections 6.1(c) or 6.1(d) hereof are concerned, at any time in the period ending on the 91st day after the date of deposit; 

        (e)  such
Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other
than this Indenture or any other Transaction Document) to which the Company is a party or by which the Company is bound; 

41

 

        (f)    the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect that (subject to customary qualifications and assumptions) after the 91st day
following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; 

        (g)  the
Company shall have delivered to the Trustee an Officer's Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders
of Bonds over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and 

        (h)  the
Company shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that, subject to customary assumptions and exclusions,
all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with. 

SECTION 8.5    DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS    

        Subject
to Section 8.6 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.5, the "Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Bonds
shall be held in trust and applied by the Trustee, in accordance with the provisions of such Bonds and this Indenture, to the payment, either directly or through any Paying Agent (including the
Company acting as Paying Agent), to the Holders of such Bonds of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law. 

        The
Company agrees to pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities
deposited pursuant to Section 8.4 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of
the outstanding Bonds. 

        Anything
in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or
non-callable Government Securities held by it as provided in Section 8.4 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.4(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance. 

SECTION 8.6    REPAYMENT TO COMPANY    

        Any
money deposited with the Trustee or any Paying Agent, or then held by the Company in trust for the payment of the principal of, premium, if any, or interest on any Bond and remaining
unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Bond shall thereafter, as a secured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent
with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided,  however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be
published once, in The New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. 

42

 

SECTION 8.7    REINSTATEMENT    

        If
the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.2 or 8.3 hereof, as the
case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this
Indenture and the Bonds shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is permitted by
such court or governmental authority to apply all such money in accordance with Section 8.2 or 8.3 hereof, as the case may be; provided,  however, that,
 if the Company makes any payment of principal of, premium, if any, or interest on any Bond following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of such Bonds to receive such payment from the money held by the Trustee or Paying Agent. 

 
 

ARTICLE 9.
  AMENDMENT, SUPPLEMENT AND WAIVER    
  

SECTION 9.1    WITHOUT CONSENT OF HOLDERS OF BONDS    

        Notwithstanding
Section 9.2 of this Indenture, the Company and the Trustee may amend or supplement this Indenture, the Bonds or any Financing Document without the consent of any
Holder of a Bond: 

        (a)  to
cure any ambiguity, omission, defect or inconsistency; 

        (b)  to
provide for uncertificated Bonds in addition to or in place of certificated Bonds or to alter the provisions of Article 2 hereof (including the related
definitions) in a manner that does not adversely affect any Holder; 

        (c)  to
make any change that would provide any additional rights or benefits to the Holders of the Bonds or that does not adversely affect the legal rights hereunder of any
Holder of the Bonds; or 

        (d)  to
comply with requirements of the Commission in order to effect or maintain the qualification of this Indenture or any Security Document under the TIA. 

        Upon
the request of the Company accompanied by a Board Resolution authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the
documents described in Section 7.2 hereof, the Trustee shall join with the Company in the execution of any amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture
that affects its own rights, duties or immunities under this Indenture or otherwise. 

SECTION 9.2    WITH CONSENT OF HOLDERS OF BONDS    

        Except
as provided below in this Section 9.2, the Company and the Trustee may amend or supplement this Indenture and the Bonds may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the Bonds then outstanding voting as a single class (including, without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, the Bonds), and, subject to Sections 6.4 and 6.7 hereof, any existing Default or Event of Default (other than a Default or an Event of Default in the payment of the
principal of, premium, if any, or interest on the Bonds, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the
Bonds may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Bonds voting as a single class (including consents obtained in connection with a tender
offer or exchange offer for, or
purchase of, the Bonds). Section 2.8 hereof shall determine which Bonds are considered to be "outstanding" for purposes of this Section 9.2. 

43

  

        Upon the request of the Company accompanied by a Board Resolution authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Bonds as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.2 hereof, the Trustee shall join with
the Company in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture directly affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. 

        It
shall not be necessary for the consent of the Holders of Bonds under this Section 9.2 to approve the particular form of any proposed amendment or waiver, but it shall be
sufficient if such consent approves the substance thereof. 

        After
an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Bonds affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture
or waiver. Subject to Sections 6.4 and 6.7 hereof, the Holders of a majority in aggregate principal amount of the Bonds then outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Bonds. However, without the consent of each Holder affected, an amendment or waiver under this Section 9.2 may not (with
respect to any Bonds held by a non-consenting Holder): 

        (a)  reduce
the principal amount of Bonds whose Holders must consent to an amendment, supplement or waiver; 

        (b)  reduce
the principal of or change the fixed maturity of any Bond or alter or waive any of the provisions with respect to the redemption of the Bonds; 

        (c)  reduce
the rate of or change the time for payment of interest, including default interest, on any Bond; 

        (d)  waive
a Default or an Event of Default in the payment of principal of, premium, if any, or interest on the Bonds (except a rescission of acceleration of the Bonds by the
Holders of at least 662/3% in aggregate principal amount of the then outstanding Bonds and a waiver of the payment Default that resulted from such acceleration); 

        (e)  make
any Bond payable in money other than that stated in the Bonds; 

        (f)    make
any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Bonds to receive payments of principal of, premium,
if any, or interest on the Bonds; 

        (g)  waive
a redemption payment with respect to any Bond; or 

        (h)  make
any change in the foregoing amendment and waiver provisions. 

SECTION 9.3    COMPLIANCE WITH TRUST INDENTURE ACT    

        Every
amendment or supplement to this Indenture or the Bonds shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in effect. 

SECTION 9.4    REVOCATION AND EFFECT OF CONSENTS    

        Until
an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Bond is a continuing consent by the Holder of a Bond and every subsequent Holder of a Bond or
portion of a Bond that evidences the same debt as the consenting Holder's Bond, even if notation of the consent is not made on any Bond. However, any such Holder of a Bond or subsequent Holder of a 

44

 

Bond may revoke the consent as to its Bond if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds every Holder. 

SECTION 9.5    NOTATION ON OR EXCHANGE OF BONDS    

        The
Trustee may place an appropriate notation about an amendment, supplement or waiver on any Bond thereafter authenticated. The Company in exchange for a Bond may issue and the Trustee
shall, upon receipt of an Authentication Order, authenticate new Bonds that reflect the amendment, supplement or waiver. 

        Failure
to make the appropriate notation or issue a new Bond shall not affect the validity and effect of such amendment, supplement or waiver. 

SECTION 9.6    TRUSTEE TO SIGN AMENDMENTS, ETC    

        The
Trustee shall sign any amended or supplemental Indenture authorized pursuant to this Article Nine if the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental Indenture until the sole member of the Company approves it. In executing any amended or supplemental
indenture, the Trustee shall be entitled to receive and (subject to Section 7.1 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 10.4
hereof, an Officer's Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture. 

SECTION 9.7    ACTIONS WITH RESPECT TO PLEDGED NOTES    

        The
Company shall take action and give consents, waivers and otherwise vote with respect to the Pledged Notes and the Lease Indentures in accordance with the direction of the Holders.
The principal amount of Pledged Notes that the Company shall vote on pursuant to which the Company shall direct any action shall be in proportion to the principal amount of Bonds, voting as a single
class, so voting or directing the Company and taking the corresponding position. 

 
 

ARTICLE 10.
  MISCELLANEOUS    
  

SECTION 10.1    TRUST INDENTURE ACT CONTROLS    

        If
any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA § 318(c), the imposed duties shall control. 

SECTION 10.2    NOTICES    

        Any
notice or communication by the Company or the Trustee to the others is duly given if in writing and delivered in person or mailed by first class mail (registered or certified, return
receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others' address 

If
to the Company:

Homer City Funding LLC

c/o Wilmington Trust Company

1100 North Market Street

Wilmington, DE 19890

Attention: Corporate Trust Administration

Facsimile: 302-651-8915

 

45

 

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036-6522

Attention: Harold F. Moore, Esq.

Facsimile: 212-735-2000

If to the Trustee:

The Bank of New York

114 West 47th Street

25th Floor

New York, New York 10036

Attention: Corporate Trust Division

Facsimile: 212-852-1625 

        The
Company or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications. 

        All
notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days
after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery. 

        Any
notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery
to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. 

        If
a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it, except for notices or
communications to the Trustee, which shall be effective only upon actual receipt thereof. 

        If
the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. 

SECTION 10.3    COMMUNICATION BY HOLDERS OF BONDS WITH OTHER HOLDERS OF BONDS    

        The
Trustee will comply with TIA § 312(b) and the Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this
Indenture or the Bonds. The Company, the Trustee, the Registrar and anyone else, as applicable, shall have the protection of TIA § 312(c). 

SECTION 10.4    CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT    

        Upon
any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee, if so requested by the Trustee: 

        (a)  an
Officer's Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.5 hereof)
stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and 

46

 

        (b)  an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.5 hereof) stating
that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. 

SECTION 10.5    STATEMENTS REQUIRED IN CERTIFICATE OR OPINION    

        Each
certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA §
314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include: 

        (a)  a
statement that the Person making such certificate or opinion has read such covenant or condition; 

        (b)  a
brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are
based; 

        (c)  a
statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion
as to whether or not such covenant or condition has been satisfied; and 

        (d)  a
statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. 

SECTION 10.6    RULES BY TRUSTEE AND AGENTS    

        The
Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. 

SECTION 10.7    NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS    

        No
director, officer, employee, incorporator, shareholder, member, manager, agent or Affiliate of the Company, as such, shall have any liability for any obligations of the Company under
the Bonds, this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Bonds by accepting a Bond waives and releases all such liability
and agrees that all
recourse against the Company shall be limited solely to the Collateral. The waiver and release are part of the consideration for issuance of the Bonds. Such waiver may not be effective to waive
liabilities under the federal securities laws and it is the view of the Commission that such a waiver is against public policy. 

SECTION 10.8    GOVERNING LAW    

        THE
INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE BONDS. 

SECTION 10.9    NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS    

        This
Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture. 

SECTION 10.10    SUCCESSORS    

        All
agreements of the Company in this Indenture and the Bonds shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. 

47

 

SECTION 10.11    SEVERABILITY    

        In
case any provision in this Indenture or in the Bonds shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby. 

SECTION 10.12    COUNTERPART ORIGINALS    

        The
parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 

SECTION 10.13    TABLE OF CONTENTS, HEADINGS, ETC    

        The
Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a
part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. 

SECTION 10.14    EFFECTIVENESS OF THIS INDENTURE    

        Notwithstanding
the execution and delivery of this Indenture by the Company and the Trustee, this Indenture shall become effective only upon the consummation of the
Sale-Leaseback Transaction (the "Effective Date"). The Initial Indenture will remain in effect until the Sale-Leaseback Transaction is consummated. Upon the effectiveness of
this Indenture, the Initial Indenture shall be terminated and all obligations of Holdings or the Trustee thereunder shall be discharged and the Initial Indenture shall be replaced by this Indenture,
and every Holder of Bonds heretofore or hereafter authenticated and delivered under the Initial Indenture or this Indenture shall be bound hereby. Notwithstanding the foregoing provisions of this
Section 10.14, if the Sale-Leaseback Transaction is not consummated and the Consent Payment is not made within five Business Days after the Expiration Date, this Indenture will
become null and void. 

[Signatures
on following page] 

48

 
 

SIGNATURES    
  

Dated
as of December 7, 2001 

	 	 	HOMER CITY FUNDING LLC
	

 	
 	

By:	
 	

/s/ Mary St. Amand

	 	 	Name:	 	Mary St. Amand
	 	 	Title:	 	Secretary
	

 	
 	

THE BANK OF NEW YORK, as Trustee
	

 	
 	

By:	
 	

/s/ Christopher J. Grell

	 	 	Name:	 	Christopher J. Grell
	 	 	Title:	 	Authorized Signer

 
 

CROSS-REFERENCE TABLE*    
  

	Trust Indenture Act Section
 
	 	 
	 	Indenture Section

	310(a	)(1)	 	 	7.10
	(a	)(2)	 	 	7.10
	(a	)(3)	 	 	N.A.
	(a	)(4)	 	 	N.A.
	(a	)(5)	 	 	7.10
	(b	)	 	 	7.3, 7.10
	(c	)	 	 	N.A.
	311(a	)	 	 	7.11
	(b	)	 	 	7.11
	(c	)	 	 	N.A.
	312(a	)	 	 	2.5
	(b	)	 	 	10.3
	(c	)	 	 	10.3
	313(a	)	 	 	7.6
	(b	)(1)	 	 	7.6, 7.7
	(b	)(2)	 	 	7.6, 7.7
	(c	)	 	 	7.6, 10.2
	(d	)	 	 	7.6
	314(a	)	 	 	4.3; 10.2
	(b	)	 	 	N.A.
	(c	)(1)	 	 	10.4
	(c	)(2)	 	 	10.4
	(c	)(3)	 	 	N.A.
	(e	)	 	 	10.5
	(f	)	 	 	N.A.
	315(a	)	 	 	7.1
	(b	)	 	 	7.5

10.2
	(c	)	 	 	7.1
	(d	)	 	 	7.1
	(e	)	 	 	6.11
	316(a	)(last sentence)	 	 	2.9
	(a	)(1)(A)	 	 	6.5
	(a	)(1)(B)	 	 	6.4
	(a	)(2)	 	 	NA.
	(b	)	 	 	6.7
	(c	)	 	 	2.12
	317(a	)(1)	 	 	6.8
	(a	)(2)	 	 	6.9
	(b	)	 	 	2.4
	318(a	)	 	 	10.1
	(b	)	 	 	N.A.
	(c	)	 	 	10.1

N.A.
means not applicable. 

*This
Cross-Reference Table is not part of the Indenture. 

  

 
 
 

EXHIBIT A-1
  
    (Face of Bond)    
  

[Insert the Global Bond Legend, if applicable pursuant to the provisions of the Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert DTC Legend]

CUSIP/CINS            

[8.137] [8.734]% Senior Secured Bond due [2019] [2026]

	No.	 	$            

Homer City Funding LLC  

promises to pay to
                                         
                                          
                                          
         
 

or
registered assigns, 

the
principal sum of
                                         
                                          
                                          
         

Dollars in a series of installments as specified below with a final payment date of                        

Payment
Dates: April 1 and October 1 

Record
Dates: March 15 and September 15 

	Homer City Funding LLC
	

BY:	
 	

	 	 	Name:
	 	 	Title:
	

BY:	
 	

	 	 	Name:
	 	 	Title:

This is one of the Global

Bonds referred to in the

within-mentioned Indenture: 

	THE BANK OF NEW YORK,

as successor Trustee	 	 
	

By:	
 	

	
 	

Dated: December    , 2001
	Name:	 	 	 	 
	Title:	 	 	 	 

A-1-1

 
(Back of Bond)  

[8.137] [8.734]% Senior Secured Bond due [2019] [2026] 

        Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 

        1.    INTEREST.    Homer City Funding LLC (the "Company"), a Delaware
limited liability company, promises to pay interest on the principal amount of this Bond at [8.137] [8.734]% per annum from December    ,
2001 until maturity, as adjusted pursuant to Section 4 of the Registration Rights Agreement referred to below. The Company shall pay interest semi-annually on April 1 and
October 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each a "Payment Date"). Interest on the
Bonds will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that
if there is no existing Default in the payment of interest, and if this Bond is authenticated between a record date referred to on the face hereof and the next succeeding Payment Date, interest shall
accrue from such next succeeding Payment Date; provided, further, that the first Payment Date shall be
April 1, 2002. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate that is 1% per annum in excess of the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months. 

        2.    PRINCIPAL.    The principal of this Bond shall be due and payable in consecutive semi-annual
installments on each Payment Date, commencing on April 1, 2004, and ending on the Payment Date for the final installment of principal set forth above, and each such installment of principal
shall be in the amount, if any, set forth in Schedule 1 attached hereto in the column headed "Scheduled Principal Amount Payable" with respect to the date of such installment,  provided that the
final installment of principal shall be equal to the then unpaid principal balance of the Bond.
 

        3.    METHOD OF PAYMENT.    The Company will pay interest or principal due on the Bonds (except defaulted interest) to
the Persons who are registered Holders of Bonds at the close of business on the March 15 or September 15 next preceding the Payment Date, even if such Bonds are canceled after such
record date and on or before such Payment Date, except as provided in Section 2. 12 of the Indenture (as herein defined) with respect to defaulted interest. The Bonds will be payable as to
principal, premium, if any, and interest at the office or agency of the Company maintained for such purpose within the City and State of New York, or, at the option of the Company, payment of interest
may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that all payments of principal, premium, if any, and interest with respect to Bonds the
Holders of which have given wire transfer instructions to the Company at least ten business days prior to the applicable payment date will be required to be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment
of public and private debts. 

        4.    PAYING AGENT AND REGISTRAR.    Initially, The Bank of New York, the successor Trustee under the Indenture, will
act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company may act in any such capacity. 

        5.    INDENTURE.    The Company issued the Bonds under an Indenture dated as of May 27, 1999, as amended or
supplemented from time to time ("Indenture"), between the Company and the Trustee. The terms of the Bonds include those stated in the Indenture and
those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Bonds are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement 

A-1-2

 

of such terms. To the extent any provision of this Bond conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Series
[8.137] [8.734]% Senior Secured Bonds due [2019] [2026] are obligations of the Company limited to
[$    ] million in aggregate principal amount. 

        6.    OPTIONAL REDEMPTION.    The Bonds shall be subject to optional redemption at any time at a Redemption Price
equal to the outstanding principal amount of the Bonds to be redeemed plus all accrued and unpaid interest thereon to the Redemption Date, plus the Make-Whole Premium, if any. 

        7.    MANDATORY REDEMPTION.    The Bonds will be subject to mandatory redemption upon the occurrence of a Recovery
Event with respect to the Facilities, other than with respect to amounts received by the Owner Lessor in connection with a Recovery Event for which the Facility Lessee elects to restore or replace the
asset or assets in respect of which such Recovery Event occurred and a Reinvestment Notice is provided to the Collateral Agent and the Trustee within 45 days of such Recovery Event (provided
that, with respect to any Recovery Event of $50 million or more, the Independent Engineer shall have certified as to the reasonableness of the Facility Lessee's repair and replacement plans as
set forth in the Facility Lessee's Reinvestment Notice relating to such Recovery Event). Any mandatory redemption of the Bonds will be without premium or penalty at a Redemption Price equal to the
unpaid principal amount thereof plus accrued and unpaid interest thereon to the Redemption Date. 

        8.    NOTICE OF REDEMPTION.    Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder whose Bonds are to be redeemed at its registered address. Bonds in denominations larger than $100,000 may be redeemed in part but only in whole
multiples of $l,000 in excess thereof, unless all of the Bonds held by a Holder are to be redeemed. On and after the redemption date, interest ceases to accrue on Bonds or portions thereof called for
redemption. 

        9.    DENOMINATIONS, TRANSFER, EXCHANGE.    The Bonds are in registered form without coupons in denominations of
$100,000 and integral multiples of $1,000 in excess thereof. The transfer of Bonds may be registered and Bonds may be exchanged as provided in the Indenture. The Registrar and the Trustee may require
a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Bond or portion of a Bond selected for redemption, except for the unredeemed portion of any Bond being redeemed in part. Also, the Company
need not exchange or register the transfer of any Bonds for a period of 15 days before a selection of bonds to be redeemed or during the period between a record date and the next succeeding
Payment Date. 

        10.    PERSONS DEEMED OWNERS.    The registered Holder of a Bond may be treated as its owner for all purposes. 

        11.    AMENDMENT, SUPPLEMENT AND WAIVER.    Subject to certain exceptions, the Indenture or the Bonds may be amended
or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Bonds voting as a single class, and any existing default or compliance with any
provision of the Indenture or the Bonds may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Bonds voting as a single class. Without the consent of
any Holder of a Bond, the Indenture, the Bonds or any Financing Document may be amended or supplemented to cure any ambiguity, omission, defect or inconsistency, to provide for uncertificated Bonds in
addition to or in place of certificated Bonds or to alter the provisions of Article 2 of the Indenture (including the related definitions) in a manner that does not affect any Holder, to
provide for the assumption of the Company's obligations to Holders of the Bonds in case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the
Holders of the Bonds or that does not adversely affect the legal rights under the Indenture of any 

A-1-3

 

such Holder or to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture or any Security Document under the Trust Indenture Act. 

        12.    DEFAULTS AND REMEDIES.    An "Event of Default" occurs if there is the occurrence of any of the following:
(i) default for 5 business days in the payment when due of any principal of, premium, if any, or interest on the Bonds; (ii) failure by the Company to comply with the provisions
described under Sections 4.6, 4.7, 4.9 4.10, 4.11 or 5.1 of the Indenture, and such failure shall continue uncured for 30 or more days from the date an authorized officer of the Company receives
actual notice thereof; (iii) the failure by the Company to comply with any of its agreements in this Indenture and such failure shall continue uncured for 60 or more days from the date an
authorized officer of the Company receives actual notice thereof (or to the extent the Default is curable but cannot be cured within such 60 day period, so long as the Company provides an
Officer's Certificate to the Trustee stating that it is diligently pursuing a cure, such longer period of time which may be necessary in good faith to cure the same, but in no event to exceed
90 days), (iv) certain events of bankruptcy or insolvency with respect to the Company; and (v) any Lease Indenture Event of Default. If any Event of Default (other than an Event
of Default specified in clause (c) or (d) of Section 6.1 of the Indenture with respect to the Company) occurs and is continuing, the Trustee may, and upon the written direction of
the Holders of at least 331/3% (in the case of any Event of Default specified in clause (i) above) or 50% (in the case of any other Event of Default) in principal amount of the
then outstanding Bonds shall, declare, by written notice to the Company all the Bonds to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain
events of bankruptcy or insolvency, with respect to the Company, all outstanding Bonds shall be due and payable without further action or notice. Holders may not enforce the Indenture or the Bonds
except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Bonds may in writing direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders of the Bonds notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Bonds then outstanding by written notice to the Trustee may on
behalf of the Holders of all of the Bonds waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of the
principal of, premium, if any, or interest on, the Bonds. 

        13.    TRUSTEE DEALINGS WITH COMPANY.    The Trustee, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 

        14.    NO RECOURSE AGAINST OTHERS.    No director, officer, employee, incorporator or shareholder, member, manager,
agent or Affiliate of the Company, as such, shall have any liability for any obligations of the Company under the Bonds, the Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Bond waives and releases all such liability and agrees that all recourse against the Company shall be limited solely to the Collateral. The
waiver and release are part of the consideration for the issuance of the Bonds. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy. 

        15.    AUTHENTICATION.    This Bond shall not be valid until authenticated by the manual signature of the Trustee or
an authenticating agent. 

        16.    ABBREVIATIONS.    Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT(= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to
Minors Act). 

A-1-4

 

        17.    CUSIP NUMBERS.    Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Bonds and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to
the accuracy of such numbers either as printed on the Bonds or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. 

        18.    GUARANTEES AND SECURITY.    This Bond will be entitled to the benefits of certain security interests created
for the benefit of the Holders and holders of other senior indebtedness of the Company. Reference is hereby made to the Security Documents for a statement of the security interests granted therein. 

        The
Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: 

Homer
City Funding LLC

18101 Von Karman Avenue

Suite 1700

Irvine, CA 92612-1046

Attention: Treasurer

Facsimile: 949-752-5624 

        19.    COUNTERPARTS.    This Bond may be executed by one or more of the parties to this Bond on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 

        20.    GOVERNING LAW.    THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE
AND THIS BOND. 

A-1-5

 
 
 

SCHEDULE OF SCHEDULED PAYMENTS OF PRINCIPAL    
  

[Attach
the following table for Series A Bonds] 

	PRINCIPAL PAYMENT DATES
	 	PERCENTAGE OF PRINCIPAL AMOUNT

PAYABLE ON EACH PRINCIPAL PAYMENT DATE

	April 1 and October 1, 2004	 	1.000%
	April 1 and October 1, 2005	 	2.000%
	April 1 and October 1, 2006	 	2.000%
	April 1 and October 1, 2007	 	2.500%
	April 1 and October 1, 2008	 	3.000%
	April 1 and October 1, 2009	 	3.000%
	April 1 and October 1, 2010	 	3.000%
	April 1 and October 1, 2011	 	3.000%
	April 1 and October 1, 2012	 	3.000%
	April 1 and October 1, 2013	 	3.000%
	April 1 and October 1, 2014	 	3.000%
	April 1 and October 1, 2015	 	4.000%
	April 1 and October 1, 2016	 	4.000%
	April 1 and October 1, 2017	 	5.000%
	April 1 and October 1, 2018	 	5.000%
	April 1 and October 1, 2019	 	3.500%

[Attach
the following table for Series B Bonds] 

	PRINCIPAL PAYMENT DATES
	 	PERCENTAGE OF PRINCIPAL AMOUNT

PAYABLE ON EACH PRINCIPAL PAYMENT DATE

	April 1 and October 1, 2004	 	0.055%
	April 1 and October 1, 2005	 	0.480%
	April 1 and October 1, 2006	 	0.590%
	April 1 and October 1, 2007	 	0.375%
	April 1 and October 1, 2008	 	0.375%
	April 1 and October 1, 2009	 	0.415%
	April 1 and October 1, 2010	 	1.000%
	April 1 and October 1, 2011	 	1.750%
	April 1 and October 1, 2012	 	2.000%
	April 1 and October 1, 2013	 	1.250%
	April 1 and October 1, 2014	 	1.500%
	April 1 and October 1, 2015	 	2.000%
	April 1 and October 1, 2016	 	2.000%
	April 1 and October 1, 2017	 	2.000%
	April 1 and October 1, 2018	 	2.000%
	April 1 and October 1, 2019	 	2.500%
	April 1 and October 1, 2020	 	3.500%
	April 1 and October 1, 2021	 	3.500%
	April 1 and October 1, 2022	 	3.500%
	April 1 and October 1, 2023	 	4.000%
	April 1 and October 1, 2024	 	4.000%
	April 1 and October 1, 2025	 	5.000%
	April 1 and October 1, 2026	 	6.210%

A-1-6

 
 
 

ASSIGNMENT FORM    
  

To
assign this Bond, fill in the form below: (I) or (we) assign and transfer this Bond to 

	 

	

	(Insert assignee's soc. sec. or tax I.D. no.)
	

	

	

	

	(Print or type assignee's name, address and zip code)
	

and irrevocably appoint
                                         
                                          
             

to transfer this Bond on the books of the Company. The agent may substitute another to act for him.
	

Date:
                                         
                

	 	Your signature:
                                         
               
	 	(Sign exactly as your name appears on the face of this Bond)
	

 	

Tax Identification No.:
                                         
               
	

 	

SIGNATURE GUARANTEE:
	

 	

	 	Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities
	 Exchange Act of 1934, as amended.

	 

A-1-7

 

 
 

SCHEDULE  OF EXCHANGES OF INTERESTS IN THE GLOBAL  BOND(1)
 

        The
following exchanges of apart of this Global
Bond for an interest in another Global Bond or
for a Definitive Bond, or exchanges of a part
of another Global Bond or Definitive Bond for
an interest in this Global Bond, have been
made: 

	Date of Exchange
 
	 	Amount of

decrease in

Principal Amount

Of this Global Bond
	 	Amount of increase

in Principal

Amount of this

Global Bond
	 	Principal Amount

of this Global Bond

following such

decrease (or increase
	 	Signature of

authorized officer

of Trustee or

Custodian

	
	
 	

 	
 	

 	
 	

 	
 	

 
	

 	
 	

 	
 	

 	
 	

 	
 	

 

	(1)
	This should be included only if the Bond is issued in global form.  

A-1-8

  

 
 

EXHIBIT A-2    
  

(Face of Regulation S Temporary Global Bond)  

        THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL BOND, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED BONDS, ARE AS SPECIFIED
IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL BOND SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON. 

        UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR BONDS IN DEFINITIVE FORM, THIS BOND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR
BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC") TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 

        THE
BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1)
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (4) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES 

A-2-1

 

ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. 

CUSIP/CINS 

[8.137] [8.734]% Senior Secured Bond due [2019] [2026]

	No.	 	$                  

Homer City Funding LLC  

promises to pay to
                                         
                                          
                                          
          

or
registered assigns, 

        the
principal sum of
                                         
                                          
                                          
         

Dollars in a series of installments as specified below with a final payment date of                        

Payment
Dates: April 1 and October 1 

Record
Dates: March 15 and September 15 

	Homer City Funding LLC
	

BY:	
 	

	 	 	Name:
	 	 	Title:
	

BY:	
 	

	 	 	Name:
	 	 	Title:

This is one of the Global

Bonds referred to in the

within-mentioned Indenture: 

	THE BANK OF NEW YORK,

as successor Trustee	 	 
	

By:	
 	

	
 	

Dated: December    , 2001
	Name:	 	 	 	 
	Title:	 	 	 	 

A-2-2

 
(Back of Regulation S Temporary Global Bond)  

[8.137] [8.734%] Senior Secured Bond due [2019] [2026] 

        Capitalized
terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 

        1.    INTEREST.    Homer City Funding LLC (the "Company"), a Delaware limited liability company, promises to pay
interest on the principal amount of this Bond at [8.137] [8.734]% per annum from December    , 2001 until maturity, as adjusted pursuant to
Section 4 of the Registration Rights Agreement referred to below. The Company shall pay interest semi-annually on April 1 and October 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each a "Payment Date"). Interest on the Bonds will accrue from the most recent date to which interest has been paid or, if no interest
has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Bond is authenticated between a record date referred to on the face
hereof and the next succeeding Payment Date, interest shall accrue from such next succeeding Payment
Date; provided, further, that the first Payment Date shall be April 1, 2002. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the
same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 

        Until
this Regulation S Temporary Global Bond is exchanged for one or more Regulation S Permanent Global Bonds, the Holder hereof shall not be entitled to receive payments
of interest hereon; until so exchanged in full, this Regulation S Temporary Global Bond shall in all other respects be entitled to the same benefits as other Bonds under the Indenture. 

        2.    PRINCIPAL.    The principal of this Bond shall be due and payable in consecutive semi-annual
installments on each Payment Date, commencing on April 1, 2004, and ending on the Payment Date for the final installment of principal set forth above, and each such installment of principal
shall be in the amount, if any, set forth in Schedule 1 attached hereto in the column headed "Scheduled Principal Amount Payable" with respect to the date of such installment, provided that the
final installment of principal shall be equal to the then unpaid principal balance of the Bond. 

        3.    METHOD OF PAYMENT.    The Company will pay interest or principal due on the Bonds (except defaulted interest) to
the Persons who are registered Holders of Bonds at the close of business on the March 15 or September 15 next preceding the Payment Date, even if such Bonds are canceled after such
record date and on or before such Payment Date, except as provided in Section 2.12 of the Indenture (as herein defined) with respect to defaulted interest. The Bonds will be payable as to
principal, premium, if any, and interest at the office or agency of the Company maintained for such purpose within the City and State of New York, or, at the option of the Company, payment of interest
may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that all payments of principal, premium, if any, and interest with respect to Bonds the
Holders of which have given wire transfer instructions to the Company at least ten business days prior to the applicable payment date will be required to be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment
of public and private debts. 

        4.    PAYING AGENT AND REGISTRAR.    Initially, The Bank of New York, as successor Trustee under the Indenture, will
act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company may act in any such capacity. 

A-2-3

 

        5.    INDENTURE.    The Company issued the Bonds under an Indenture dated as of May 27, 1999, as amended or
supplemented from time to time ("Indenture"), between the Company and the Trustee. The terms of the Bonds include those stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Bonds are subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. To the extent any provision of this Bond conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The
Series [8.137] [8.734]% Senior Secured Bonds due [2019] [2026] are obligations of the Company limited to
[$            ] million in aggregate principal amount. 

        6.    OPTIONAL REDEMPTION.    The Bonds shall be subject to optional redemption at any time at a Redemption Price
equal to the outstanding principal amount of the Bonds to be redeemed plus all accrued and unpaid interest thereon to the Redemption Date, plus the Make-Whole Premium, if any. 

        7.    MANDATORY REDEMPTION.    The Bonds will be subject to mandatory redemption, upon the occurrence of a Recovery
Event with respect to the Facilities, other than with respect to amounts received by the Owner Lessor in connection with a Recovery Event for which the Facility Lessee elects to restore or replace the
asset or assets in respect of which such Recovery Event occurred and a Reinvestment Notice is provided to the Collateral Agent and the Trustee within 45 days of such Recovery Event (provided
that, with respect to any Recovery Event of $50 million or more, the Independent Engineer shall have certified as to the reasonableness of the Facility Lessee's repair and replacement plans as
set forth in the Facility Lessee's Reinvestment Notice relating to such Recovery Event). Any mandatory redemption of the Bonds will be without premium or penalty at a Redemption Price equal to the
unpaid principal amount thereof plus accrued and unpaid interest thereon to the Redemption Date. 

        8.    NOTICE OF REDEMPTION.    Notice of Redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder whose Bonds are to be redeemed at its registered address. Bonds in denominations larger than $100,000 may be redeemed in part but only in whole
multiples of $l,000 in excess thereof, unless all of the Bonds held by a Holder are to be redeemed. On and after the redemption date, interest ceases to accrue on Bonds or portions thereof called for
redemption. 

        9.    DENOMINATIONS, TRANSFER, EXCHANGE.    The Bonds are in registered form without coupons in denominations of
$100,000 and integral multiples of $1,000 in excess thereof. The transfer of Bonds may be registered and Bonds may be exchanged as provided in the Indenture. The Registrar and the Trustee may require
a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Bond or portion of a Bond selected for redemption, except for the unredeemed portion of any Bond being redeemed in part. Also, the Company
need not exchange or register the transfer of any Bonds for a period of 15 days before a selection of bonds to be redeemed or during the period between a record date and the next succeeding
Payment Date. 

        This
Regulation S Temporary Global Bond is exchangeable in whole or in part for one or more Global Bonds only (i) on or after the termination of the 40-day
restricted period (as defined in Regulation S) and (ii) upon presentation of certificates (accompanied by an Opinion of Counsel, if applicable) required by Article 2 of the
Indenture. Upon exchange of this Regulation S Temporary Global Bond for one or more Global Bonds, the Trustee shall cancel this Regulation S Temporary Global Bond. 

        10.    PERSONS DEEMED OWNERS.    The registered Holder of a Bond may be treated as its owner for all purposes. 

A-2-4

 

        11.    AMENDMENT, SUPPLEMENT AND WAIVER.    Subject to certain exceptions, the Indenture or the Bonds may be amended
or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Bonds voting as a single class, and any existing default or compliance with any
provision of the indenture or the Bonds may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Bonds voting as a single class. Without the consent of
any Holder of a Bond, the Indenture, the Bonds or any Financing Document may be amended or supplemented to cure any ambiguity, omission, defect or inconsistency, to provide for uncertificated Bonds in
addition to or in place of certificated Bonds or to alter the provisions of Article 2 of the Indenture (including the related definitions) in a manner that does not affect any Holder, to
provide for the assumption of the Company's obligations to Holders of the Bonds in case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the
Holders of the Bonds or that does not adversely affect the legal rights under the Indenture of any such Holder or to comply with the requirements of the Commission in order to effect or maintain the
qualification of the Indenture or any Security Document under the Trust indenture Act. 

        12.    DEFAULTS AND REMEDIES.    An "Event of Default" occurs if there is the occurrence of any of the following:
(i) default for 5 business days in the payment when due of any principal of, premium, if any, or interest on the Bonds, (ii) failure by the Company to comply with the provisions
described under Sections 4.6, 4.7, 4.9, 4.10, 4.11 or 5.1 of the Indenture, and such failure shall continue uncured for 30 or more days from the date an authorized officer of the Company receives
actual notice thereof, (iii) the failure by the Company to comply with any of its agreements in this Indenture and such failure shall continue uncured for 60 or more days from the date an
authorized officer of the Company receives actual notice thereof (or to the extent the Default is curable but cannot be cured within such 60 day period, so long as the Company provides an
Officer's Certificate to the Trustee stating that it is diligently pursuing a cure, such longer period of time which may be necessary in good faith to cure the same, but in no event to exceed
90 days); (iv) certain events of bankruptcy or insolvency with respect to the Company; and (v) any Lease Indenture Event of Default. If any Event of Default (other than an Event
of Default specified in clause (c) or (d) of Section 6.1 of the Indenture with respect to the Company occurs and is continuing, the Trustee may, and upon the written direction of
the Holders of at least 331/3% (in the case of any Event of Default specified in clause (i) above) or 50% (in the case of any other Event of Default) in principal amount of the
then outstanding Bonds shall, declare all the Bonds to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency,
with respect to the Company all outstanding Bonds shall be due and payable without further action or notice. Holders may not enforce the Indenture or the Bonds except as provided in the indenture.
Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Bonds may in writing direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Bonds notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Bonds then outstanding by written notice to the Trustee may on behalf of the Holders of all of the Bonds waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or Event of Default in the payment of the principal of, premium, if any, or interest on, the Bonds. 

        13.    TRUSTEE DEALINGS WITH COMPANY    The Trustee, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 

        14.    NO RECOURSE AGAINST OTHERS.    No director, officer, employee, incorporator or shareholder, member, manager,
agent or Affiliate of the Company, as such, shall have any liability for any obligations of the Company under the Bonds, the Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Bond waives and 

A-2-5

 

releases all such liability and agrees that all recourse against the Company shall be limited solely to the Collateral. The waiver and release are part of the consideration for the issuance of the
Bonds. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the Commission that such a waiver is against public policy. 

        15.    AUTHENTICATION.    This Bond shall not be valid until authenticated by the manual signature of the Trustee or
an authenticating agent. 

        16.    ABBREVIATIONS.    Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (joint tenants with right of survivorship and not as tenants in common), CUST (= custodian), and U/GIM/A (Uniform Gifts to Minors
Act). 

        17.    CUSIP NUMBERS.    Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Bonds and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to
the accuracy of such numbers either as printed on the Bonds or as contained in any notice of Redemption and reliance may be placed only on the other identification numbers placed thereon. 

        18.    GUARANTEES AND SECURITY.    This Bond will be entitled to the benefits of certain security interests created
for the benefit of the Holders and holders of other senior indebtedness of the
Company. Reference is hereby made to the Security Documents for a statement of the security interests granted therein. 

        The
Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: 

Homer
City Funding LLC

18101 Von Karman Avenue

Suited 1700

Irvine, CA 92612-1046

Attention: Treasurer

Facsimile: 949-752-5624 

        19.    COUNTERPARTS.    This Bond may be executed by one or more of the parties to this Bond on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 

        20.    GOVERNING LAW.    THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE
AND THIS BOND. 

A-2-6

 

 
 

SCHEDULE OF SCHEDULED PAYMENTS OF PRINCIPAL    
  

[Attach
the following table for Series A Bonds] 

	PRINCIPAL PAYMENT DATES
	 	PERCENTAGE OF PRINCIPAL AMOUNT

PAYABLE ON EACH PRINCIPAL PAYMENT DATE

	April 1 and October 1, 2004	 	1.000%
	April 1 and October 1, 2005	 	2.000%
	April 1 and October 1, 2006	 	2.000%
	April 1 and October 1, 2007	 	2.500%
	April 1 and October 1, 2008	 	3.000%
	April 1 and October 1, 2009	 	3.000%
	April 1 and October 1, 2010	 	3.000%
	April 1 and October 1, 2011	 	3.000%
	April 1 and October 1, 2012	 	3.000%
	April 1 and October 1, 2013	 	3.000%
	April 1 and October 1, 2014	 	3.000%
	April 1 and October 1, 2015	 	4.000%
	April 1 and October 1, 2016	 	4.000%
	April 1 and October 1, 2017	 	5.000%
	April 1 and October 1, 2018	 	5.000%
	April 1 and October 1, 2019	 	3.500%

[Attach
the following table for Series B Bonds] 

	PRINCIPAL PAYMENT DATES
	 	PERCENTAGE OF PRINCIPAL AMOUNT

PAYABLE ON EACH PRINCIPAL PAYMENT DATE

	April 1 and October 1, 2004	 	0.055%
	April 1 and October 1, 2005	 	0.480%
	April 1 and October 1, 2006	 	0.590%
	April 1 and October 1, 2007	 	0.375%
	April 1 and October 1, 2008	 	0.375%
	April 1 and October 1, 2009	 	0.415%
	April 1 and October 1, 2010	 	1.000%
	April 1 and October 1, 2011	 	1.750%
	April 1 and October 1, 2012	 	2.000%
	April 1 and October 1, 2013	 	1.250%
	April 1 and October 1, 2014	 	1.500%
	April 1 and October 1, 2015	 	2.000%
	April 1 and October 1, 2016	 	2.000%
	April 1 and October 1, 2017	 	2.000%
	April 1 and October 1, 2018	 	2.000%
	April 1 and October 1, 2019	 	2.500%
	April 1 and October 1, 2020	 	3.500%
	April 1 and October 1, 2021	 	3.500%
	April 1 and October 1, 2022	 	3.500%
	April 1 and October 1, 2023	 	4.000%
	April 1 and October 1, 2024	 	4.000%
	April 1 and October 1, 2025	 	5.000%
	April 1 and October 1, 2026	 	6.210%

A-2-7

 
 
 

ASSIGNMENT FORM    
  

To
assign this Bond, fill in the form below: (I) or (we) assign and transfer this Bond to 

	 

	

	(Insert assignee's soc. sec. or tax I.D. no.)
	

	

	

	

	(Print or type assignee's name, address and zip code)
	

and irrevocably appoint
                                         
                                          
             

to transfer this Bond on the books of the Company. The agent may substitute another to act for him.
	

Date:
                                         
                

	 	Your signature:
                                         
               
	 	(Sign exactly as your name appears on the face of this Bond)
	

 	

Tax Identification No.:
                                         
               
	

 	

SIGNATURE GUARANTEE:
	

 	

	 	Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities
	 Exchange Act of 1934, as amended.	 

A-2-8

 

 
 

SCHEDULE  OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL  BOND
 

        The
following exchanges of a part of this
Regulation S Temporary Global Bond for
an interest in another Global Bond, or of
other Restricted Global Bonds for an interest
in this Regulation S Temporary Global
Bond, have been
made: 

	Date of Exchange
	 	Amount of

decrease in

Principal Amount

of this Global Bond
	 	Amount of increase

in Principal

Amount of this

Global Bond
	 	Principal Amount

of this Global Bond

following such

decrease (or increase
	 	Signature of

authorized officer

of Trustee or

Custodian

	    	 	 	 	 	 	 	 	 

A-2-9

  

 
 

EXHIBIT B
  FORM OF CERTIFICATE OF TRANSFER    
  

Homer
City Funding LLC

18101 Von Karman Avenue

Suite 1700

Irvine, CA 92612-1046

Attention: Treasurer

Facsimile: 949-752-5624 

The
Bank of New York

114 West 47th Street

25th Floor

New York, New York 10036

Attention: Corporate Trust Division 

        Re:    [8.137] [8.734]% Senior Secured Bonds due [2019]
[2026]

        Reference
is hereby made to the First Amended and Restated Indenture, dated as of December    , 2001, as amended and supplemented from time to time (the
"Indenture"), between Homer City Funding LLC (the "Company"), and The Bank of New York, as successor
trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. 

                                (the
"Transferor") owns and proposes to transfer the Bond[s] or interest in such
Bond[s] specified in Annex A hereto, in the principal amount of $            in such Bond[s] or interests (the
"Transfer"), to            (the
"Transferee"), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that: 

[CHECK
ALL THAT APPLY] 

        1.    Check if Transferee will take delivery of a beneficial interest in the 144A Global Bond or a Definitive Bond Pursuant to
Rule 144A.    The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Bond is being transferred
to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Bond for its own account, or for one or more accounts with respect to which such
Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements
of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Bond will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global
Bond and/or the Definitive Bond and in the Indenture and the Securities Act. 

        2.    Check if Transferee will take delivery of a beneficial interest in the Temporary Regulation S Global Bond the
Regulation S Global Bond or a Definitive Bond pursuant to Regulation S.    The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States
and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting
on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of
Rule 903(b) or 

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Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and
(iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Bond will be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed on the Regulation S Global Bond, the Temporary Regulation S Global Bond and/or the Definitive Bond and in
the Indenture and the Securities Act. 

        3.    Check and complete if Transferee will take delivery of a Definitive Bond pursuant to any provision of the Securities Act
other than Rule 144A or Regulation S.    The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests
in Restricted Global Bonds and Restricted Definitive Bonds and pursuant to and in accordance with the Securities Act and any applicable blue sky
securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one): 

        (a)  such
Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; 

or

        (b)  such
Transfer is being effected to the Company or a subsidiary thereof; 

or

        (c)  such
Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of
the Securities Act; 

or

        (d)  such
Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than
Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under
the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Bond or Restricted Definitive Bonds and the requirements of the
exemption claimed, which certification is supported by (1) a certificate executed by the Transferee and (2) if such Transfer is in respect of a principal amount of Bonds at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer
is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Bond will be
subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Definitive Bonds and in the Indenture and the Securities Act. 

        4.    Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Bond or of an Unrestricted
Definitive Bond.    

        (a)    Check if Transfer is Pursuant to Rule 144.    (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Bond will no longer be subject to the
restrictions on 

B-2

 

transfer enumerated in the Private Placement Legend printed on the Restricted Global Bonds and the Restricted Definitive Bonds and in the Indenture. 

        (b)    Check if Transfer is Pursuant to Regulation S.    (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any
applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order
to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Bond will no
longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Bonds and the Restricted Definitive Bonds and in the Indenture. 

        (c)    Check if Transfer is Pursuant to Other Exemption.    (1) The Transfer is being effected
pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the
transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Bond will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Bonds and the
Restricted Definitive Bonds and in the Indenture. 

        This
certificate and the statements contained herein are made for your benefit and the benefit of the Company. 

	 	 	 	 	
 [Insert Name of Transferor]
	

 	
 	

 	
 	

By:	
 	

	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:
	

Dated:	
 	

	
 	

 	
 	

 

B-3

 
 
 

ANNEX A TO CERTIFICATE OF TRANSFER    
  

1.    The
Transferor owns and proposes to transfer the following: 

[CHECK
ONE OF (a) OR (b)] 

        (a)  a
beneficial interest in the: 

          (i)  144A
Global Bond (CUSIP            ), or 

        (ii)  Regulation S
Global Bond (CUSIP            ), or 

        (b)  a
Restricted Definitive Bond. 

2.    After
the Transfer the Transferee will hold: 

[CHECK
ONE] 

        (a)  a
beneficial interest in the: 

          (i)  144A
Global Bond (CUSIP            ), or 

        (ii)  Regulation S
Global Bond (CUSIP            ), or 

        (iii)  Unrestricted
Global Bond (CUSIP            ); or 

        (b)  a
Restricted Definitive Bond; or 

        (c)  an
Unrestricted Definitive Bond, 

in
accordance with the terms of the Indenture. 

B-4

  

 
 

EXHIBIT C
  
    FORM OF CERTIFICATE OF EXCHANGE    
  

Homer
City Funding LLC

18101 Von Karman Avenue

Suite 1700

Irvine, CA 92612-1046

Attention: Treasurer 

The
Bank of New York

114 West 47th Street

25th Floor

New York, New York 10036

Attention: Corporate Trust Division 

        Re:    [8.137]
[8.734]% Senior Secured Bonds due [2019] [2026] 

        Reference
is hereby made to the Indenture, dated as of May 27, 1999, as amended and supplemented form time to time (the
"Indenture"), between Edison Mission Holdings Co. (the "Company") and United States Trust Company of New
York, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. 

                                (the
"Owner") owns and proposes to exchange the Bond[s] or interest in such
Bond[s] specified herein, in the principal amount of $            in such Bond[s] or interests (the
"Exchange"). In connection with the Exchange, the Owner hereby certifies that: 

        1.    Exchange of Restricted Definitive Bonds or Beneficial Interests in a Restricted Global Bond for Unrestricted Definitive
Bonds or Beneficial Interests in an Unrestricted Global Bond    

        (a)    Check if Exchange is from beneficial interest in a Restricted Global Bond to beneficial interest in an Unrestricted
Global Bond.    In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Bond for a beneficial interest in an Unrestricted Global
Bond in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global Bonds and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the
"Securities Act"), (iii) the restrictions on transfer contained in the indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Bond is being acquired in compliance with any applicable blue sky securities laws of any
state of the United States. 

        (b)    Check if Exchange is from beneficial interest in a Restricted Global Bond to Unrestricted Definitive
Bond.    In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Bond for an Unrestricted Definitive Bond, the Owner hereby
certifies (i) the Definitive Bond is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Bonds and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Bond is being acquired in compliance with any applicable blue sky securities laws of any
state of the United States. 

        (c)    Check if Exchange is from Restricted Definitive Bond to beneficial interest in an Unrestricted Global
Bond.    In connection with the Owner's Exchange of a Restricted Definitive Bond for a 

C-1

 

beneficial interest in an Unrestricted Global Bond, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Bonds and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 

        (d)    Check if Exchange is from Restricted Definitive Bond to Unrestricted Definitive
Bond.    In connection with the Owner's Exchange of a Restricted Definitive Bond for an Unrestricted Definitive Bond, the Owner hereby certifies (i) the
Unrestricted Definitive Bond is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Bonds and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive
Bond is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 

        2.    Exchange of Restricted Definitive Bonds or Beneficial Interests in Restricted Global Bonds for Restricted Definitive Bonds
or Beneficial Interests in Restricted Global Bonds    

        (a)    Check if Exchange is from beneficial interest in a Restricted Global Bond to Restricted Definitive
Bond.    In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Bond for a Restricted Definitive Bond with an equal principal
amount, the Owner hereby certifies that the Restricted Definitive Bond is being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in accordance with the
terms of the Indenture, the Restricted Definitive Bond issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted
Definitive Bond and in the Indenture and the Securities Act. 

        (b)    Check if Exchange is from Restricted Definitive Bond to beneficial interest in a Restricted Global
Bond.    In connection with the Exchange of the Owner's Restricted Definitive Bond for a beneficial interest in the [CHECK ONE] 144A Global
Bond, Regulation S Global Bond with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer and
(ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Bonds and pursuant to and in accordance with the Securities Act, and in
compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial
interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Bond and in the Indenture and the Securities Act. 

        This
certificate and the statements contained herein are made for your benefit and the benefit of the Company. 

	 	 	 	 	
 [Insert Name of Owner]
	

 	
 	

 	
 	

By:	
 	

	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:
	

Dated:	
 	

	
 	

 	
 	

 

C-2

QuickLinks

Exhibit 4.1.1

TABLE OF CONTENTS

GRANTING CLAUSE

ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE

ARTICLE 2. THE BONDS

ARTICLE 3. REDEMPTION AND PREPAYMENT

ARTICLE 4. COVENANTS

ARTICLE 5. SUCCESSORS

ARTICLE 6. EVENTS OF DEFAULT

ARTICLE 7. TRUSTEE

ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE

ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER

ARTICLE 10. MISCELLANEOUS

SIGNATURES

CROSS-REFERENCE TABLE

Exhibit A–1

SCHEDULE OF SCHEDULED PAYMENTS OF PRINCIPAL

ASSIGNMENT FORM

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL BOND(1)

EXHIBIT A-2

SCHEDULE OF SCHEDULED PAYMENTS OF PRINCIPAL

ASSIGNMENT FORM

SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL BOND

EXHIBIT B FORM OF CERTIFICATE OF TRANSFER

ANNEX A TO CERTIFICATE OF TRANSFER

EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE

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