Document:

EXHIBIT
10.130(u)

 

EXECUTION
COPY

 

 

 

FIRST
INVESTORS FINANCIAL SERVICES, INC.,

as
Seller

 

and

 

FIRST
INVESTORS AUTO FUNDING CORPORATION,

as
Depositor

 

 

CONTRIBUTION
AGREEMENT

 

Dated
as of January 26, 2006

 

 

 

 

TABLE OF CONTENTS

 

	
  Article I

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.1.

  	
   

  	
  Definitional Provisions

  	
   

  	
  1

  
	
  Article II

  	
  Contribution of Contracts

  	
   

  	
  2

  
	
  Section 2.1.

  	
   

  	
  Contribution of Contracts

  	
   

  	
  2

  
	
  Section 2.2.

  	
   

  	
  Representations and Warranties of the Seller as to the Contracts.

  	
   

  	
  5

  
	
  Section 2.3.

  	
   

  	
  Repurchase by the Seller upon Breach

  	
   

  	
  9

  
	
  Article III

  	
  The Seller

  	
   

  	
  9

  
	
  Section 3.1.

  	
   

  	
  Representations and Warranties of the Seller

  	
   

  	
  9

  
	
  Section 3.2.

  	
   

  	
  Liability of the Seller; Indemnities

  	
   

  	
  11

  
	
  Section 3.3.

  	
   

  	
  Limitation on Liability of the Seller and Others

  	
   

  	
  11

  
	
  Article IV

  	
  Miscellaneous

  	
   

  	
  12

  
	
  Section 4.1.

  	
   

  	
  Amendment

  	
   

  	
  12

  
	
  Section 4.2.

  	
   

  	
  Protection of Title of Depositor

  	
   

  	
  13

  
	
  Section 4.3.

  	
   

  	
  Governing Law

  	
   

  	
  13

  
	
  Section 4.4.

  	
   

  	
  Notices

  	
   

  	
  14

  
	
  Section 4.5.

  	
   

  	
  Severability of Provisions

  	
   

  	
  14

  
	
  Section 4.6.

  	
   

  	
  Assignment

  	
   

  	
  14

  
	
  Section 4.7.

  	
   

  	
  Further Assurances

  	
   

  	
  14

  
	
  Section 4.8.

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  	
  15

  
	
  Section 4.9.

  	
   

  	
  Third-Party Beneficiaries

  	
   

  	
  15

  
	
  Section 4.10.

  	
   

  	
  Actions by Noteholders

  	
   

  	
  15

  
	
  Section 4.11.

  	
   

  	
  Counterparts

  	
   

  	
  15

  
	
  Section 4.12.

  	
   

  	
  [Reserved]

  	
   

  	
  15

  
	
  Section 4.13.

  	
   

  	
  No Bankruptcy

  	
   

  	
  16

  
	
  Section 4.14.

  	
   

  	
  Certain Rights of the Insurer

  	
   

  	
  16

  
	
  Section 4.15.

  	
   

  	
  Non-Confidential

  	
   

  	
  16

  
						

 

i

 

Exhibits

 

Exhibit A                Form
of Additional Contract Assignment

 

Schedules

 

Schedule 1             Schedule
of Initial Contracts

Schedule 2             Perfection
Representations, Warranties and Covenants

 

ii

 

CONTRIBUTION AGREEMENT,
dated as of January 26, 2006 (as amended, supplemented or otherwise modified
and in effect from time to time, this “Agreement”),
between FIRST INVESTORS FINANCIAL SERVICES, INC., a Texas corporation, as
seller (the “Seller”) and
FIRST INVESTORS AUTO FUNDING CORPORATION, a Delaware corporation, as depositor
(the “Depositor”).

 

WHEREAS, in the regular
course of its business, the Seller originates, refinances and purchases from
Originators, certain motor vehicle installment sales contracts secured by new
and used automobiles and light duty trucks; and

 

WHEREAS, the Seller and the
Depositor wish to set forth the terms pursuant to which the Seller’s right,
title and interest in and to the Contracts and related security is to be
conveyed, transferred, contributed and assigned by Seller to the Depositor,
which Contracts and related security will then be sold by the Depositor,
pursuant to the Sale and Allocation Agreement, to the Trust, which Trust will
issue the Notes.

 

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

 

Article
I

 

Definitions

 

Section
1.1.               Definitional Provisions.

 

(a)           Capitalized
terms used herein and not otherwise defined herein have the meanings assigned
to them in the Sale and Allocation Agreement (the “Sale and Allocation Agreement”), dated
as of the date hereof, among the Seller, the Depositor, First Investors
Servicing Corporation, as servicer (the “Servicer”),
First Investors Auto Owner Trust 2006-A (the “Trust”)
and Wells Fargo Bank, National Association, as Indenture Trustee (in such
capacity, the “Indenture Trustee”)
and Securities Intermediary (in such capacity, the “Securities Intermediary”).

 

(b)           All
terms defined in this Agreement shall have the defined meanings when used in
any certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.

 

(c)           As
used in this Agreement and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document
to the extent not defined, shall have the respective meanings assigned to them
under generally accepted accounting principles. 
To the extent that the definitions of accounting terms in this Agreement
or in any such certificate or other document are inconsistent with the meanings
of such terms under generally accepted accounting 

 

1

 

principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.

 

(d)           The
words “hereof,” “herein,” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. 
Article, Section, Schedule and Exhibit references contained in this
Agreement are references to Articles, Sections, Schedules and Exhibits in or to
this Agreement unless otherwise specified. 
The term “including” shall mean “including without limitation.”

 

(e)           The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.

 

(f)            Any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein.  References to a Person are also to its
permitted successors and assigns.

 

Article
II

 

Contribution
of Contracts

 

Section
2.1.               Contribution of Contracts.

 

(a)           On
the Closing Date, the Seller hereby agrees to convey, transfer and absolutely
contribute, without recourse (except as specifically set forth herein), subject
to the obligations herein, to the Depositor, and the Depositor agrees to accept
from the Seller, all of the right, title and interest of the Seller, whether
now owned or hereafter acquired, in, to and under the following (collectively,
the “Initial Contributed Property”):

 

(i)            the Initial Contracts;

 

(ii)           all amounts received on or in respect
of the Contracts after the applicable Cutoff Date (except that interest accrued
on the Contracts prior to the applicable Cutoff Date and received after such
Cutoff Date will be remitted by the Depositor to the Seller);

 

(iii)          the security interests in the Financed
Vehicles;

 

(iv)          any proceeds from claims on or refunds
of premiums with respect to extended warranties or physical damage, theft,
credit life and credit disability insurance policies relating to the Financed
Vehicles or the related Obligors;

 

(v)           any Liquidation Proceeds;

 

2

 

(vi)          the Contract Files; and

 

(vii)         all present and future claims, demands,
causes of action and choses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds of
the conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing.

 

(b)           On
each Additional Contract Purchase Date, subject to the terms and conditions of
this Agreement, the Seller will convey, transfer and absolutely contribute,
without recourse (except as specifically provided herein), to the Depositor,
and  the Depositor agrees to accept from
the Seller, such Additional Contracts and additional contributed property of
the type described in clauses (ii) through (vii) of Section 2.1(a)
herein (the “Additional Contributed
Property” and, together with the Initial Contributed Property,
the “Contributed Property”)
as the Seller may specify by written notice to the Indenture Trustee, the Owner
Trustee, the Trust and the Depositor.

 

(c)           The
Seller and the Depositor intend that each transfer of Contributed Property
contemplated by Section 2.1(a) and Section 2.1(b) constitutes a
contribution of the Contributed Property, conveying good title to the related
Contributed Property, from the Seller to the Depositor.  Notwithstanding the foregoing, in the event
that the Contracts are held to be property of the Seller, or if for any reason
this Agreement is held or deemed to create indebtedness or a security interest
in the Contracts and the other Contributed Property, then it is intended that:

 

(i)            This Agreement shall be deemed to be
a security agreement within the meaning of Articles 8 and 9 of the Relevant
UCC;

 

(ii)           The transfers provided for in this Section
2.1 shall be deemed to be a grant by the Seller, and the Seller hereby
grants to the Depositor, a security interest in all of its right (including the
power to convey title thereto), title and interest, whether now owned or
hereafter acquired, in and to the Contracts and the other Contributed Property,
to secure such indebtedness and the performance of the obligations of the
Seller hereunder;

 

(iii)          The possession by the Seller of the
Contract Files and any other property as constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be “possession by the
secured party” or possession by the purchaser or a person designated by such
purchaser, for purposes of perfecting the security interest pursuant to the
Relevant UCC; and

 

(iv)          Notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed to be

 

3

 

notifications to, or acknowledgments, receipts or
confirmations from, bailees or agents (as applicable) of, the Depositor for the
purpose of perfecting such security interest under the Relevant UCC.

 

(d)           The
conveyance, transfer and absolute contribution of the Contributed Property made
under and pursuant to this Section 2.1 shall not constitute and is not
intended to result in an assumption by the Depositor of any obligation of the
Seller to the Obligors or any other Person in connection with the Contracts and
the other Contributed Property or any agreement, document or instrument related
thereto.

 

(e)           Upon
each of the transfers of the Contributed Property pursuant to this Section
2.1, the Seller shall clearly mark its files, documents, books and any
other records (including computer records) in the Seller’s control pertaining
to the Contributed Property, in order to indicate that the Contributed Property
has been conveyed, transferred and absolutely contributed to the Depositor.

 

(f)            The
Depositor’s obligation to accept as a contribution the Additional Contributed
Property pursuant to Section 2.1(b) is subject to satisfaction on or
before the related Additional Contract Purchase Date of the following
conditions precedent:

 

(i)            each of the representations and
warranties of the Seller made pursuant to Section 2.2 with respect to
the Contributed Contracts shall be true and correct as of the Additional
Contract Purchase Date;

 

(ii)           the Seller shall have executed and
delivered to the Depositor written assignments in the form of Exhibit A
hereto conveying such Additional Contracts and Additional Contributed Property
to the Depositor;

 

(iii)          release letters and related UCC-3
termination statements and/or amendment statements (for each appropriate
jurisdiction), to release all security interests or similar rights of any
Person in the Additional Contributed Property, including the security interests
in the Financed Vehicles securing the Contracts and any proceeds of the
foregoing;

 

(iv)          the Depositor shall have received the
prior written consent of the Insurer; and

 

(v)           the Depositor and the Insurer shall
have received such other documents as the Depositor or the Insurer may
reasonably request.

 

(g)           It
is explicitly agreed by the Seller and the Depositor that the Purchase Price
delivered to the Seller by the Depositor pursuant to this Contribution Agreement
shall (i) consist of the net proceeds from the sale of the Initial Contributed
Property and Additional Contributed Property by Depositor to the Trust and (ii)
be deemed to constitute a return on capital, and that

 

4

 

the
portion of the Purchase Price not conveyed by the Depositor to the Seller shall
be deemed to constitute a capital contribution by the Seller to the Depositor.

 

Section
2.2.               Representations and Warranties of the Seller as to the Contracts.

 

The Seller makes the
following representations and warranties as to the Contracts on which the
Depositor shall be deemed to have relied in accepting the Contracts.  The representations and warranties speak as
of the execution and delivery of this Agreement and, with respect to any
Additional Contracts, as of the related Additional Contract Purchase Date,
except to the extent otherwise provided, but shall survive the conveyance,
transfer and absolute contribution of the Contracts to the Depositor pursuant
to this Agreement,  the sale of the
Contracts by the Depositor to the Trust, and the pledge of the Contracts to the
Indenture Trustee pursuant to the Indenture.

 

(a)           Characteristics
of Contracts.  Each Contract (i) has
either (A) been purchased in a bona fide sale by the Seller from a dealer,
bank, finance company or similar entity in the ordinary course of the Seller’s
business and was originated by such Person in connection with an advance made
for the sale or refinancing of a new or used automobile or light-duty truck and
has been fully and properly executed by the parties thereto or (B) has been
originated by the Seller through direct marketing to consumers who wish to
refinance loans obtained by a different lender and, in the case of each of (A)
and (B) above, is validly contributed by the Seller to the Depositor pursuant
to, and in accordance with the terms of, this Agreement, (ii) has created a
valid, binding and enforceable security interest in favor of the Seller in the
related Financed Vehicle, which security interest has been validly assigned by
the Seller to the Depositor, will be validly assigned by the Depositor to the
Trust pursuant to the Sale and Allocation Agreement and will be validly
assigned by the Trust to the Indenture Trustee pursuant to the Indenture, (iii)
contains customary and enforceable provisions such that the rights and remedies
of the holder thereof are adequate for realization against the collateral of
the benefits of the security, (iv) provides for level monthly payments that
fully amortize the Amount Financed by maturity (except that the period between
the date of such Contract and the date of the first Scheduled Payment may be
less than or greater than one month and the amount of the first and last
Scheduled Payments may be less than or greater than the level payments, but not
by a material amount) and yield interest at the related APR, (v) provides for,
in the event that such Contract is prepaid, a prepayment that fully pays the
Principal Balance of such Contract with interest at the related APR through the
date of payment, (vi) was selected by selection procedures believed by the
Seller not to be adverse to the Depositor and with respect to which information
provided to the Depositor and its assigns pursuant to the Transaction Documents
is true and correct in all material respects, (vii) is secured by a new or used
automobile or light-duty truck, (viii) relates to an Obligor who has made a
down payment under such Contract as of the applicable Cutoff Date, if required,
(ix) satisfies in all material respects the requirements under the Credit
Policy, and (x) requires the Obligor thereunder to obtain and maintain physical
damage insurance covering the related Financed Vehicle in accordance with the
Seller’s normal requirements.

 

5

 

(b)           Contract
Schedule.  The information set forth
in the Contract Schedule set forth on Schedule 1 hereto was true and correct in
all material respects as of the opening of business on the applicable Cutoff
Date, and no selection procedures believed to be adverse to the Trust or the
Noteholders were utilized in selecting the Contracts from those retail
installment sale contracts or security agreements and promissory notes which
met the criteria contained herein.  The
information set forth in the compact disk or other listing regarding the
Contracts made available to the Trust and its assigns (which compact disk or
other listing is required to be delivered as specified herein) is true and
correct in all material respects.

 

(c)           Compliance
with Law.  Each Contract and the sale
of the related Financed Vehicle complied, at the time such Contract was
originated and complies, as of the related Purchase Date, in all material
respects with all requirements of applicable federal, state and local laws, and
regulations thereunder, including, without limitation, usury laws, the
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Credit Billing Act, the Fair Debt Collection Practices
Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the
Federal Reserve Board’s Regulations B and Z, the Servicemembers Civil Relief
Act and state adoptions of the National Consumer Act and the Uniform Consumer
Credit Code.

 

(d)           Binding
Obligation.  Each Contract represents
the genuine, legal, valid and binding payment obligation in writing of the
related Obligor, enforceable by the holder thereof in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity.

 

(e)           No
Government or Incorporated Obligor. 
No Contract is due from the United States of America or any state thereof
or from any agency, department or instrumentality of the United States of
America or any state thereof or from any incorporated entity.

 

(f)            Security
Interest in Financed Vehicles. 
Immediately prior to the conveyance, transfer and absolute contribution
of the Contracts by the Seller to the Depositor, each Contract was secured by a
valid, binding and enforceable first priority perfected security interest in
favor of the Seller in the related Financed Vehicle and, at such time as
enforcement of such security interest is sought, there shall exist a valid,
binding and enforceable first priority perfected security interest in such
Financed Vehicle for the benefit of the Seller which is subject to regulatory
registration with a clear legal right of repossession in favor of the Seller.

 

(g)           Contracts
in Force.  No Contract has been
satisfied, subordinated or rescinded, nor has any Financed Vehicle been
released in whole or in part from the Lien granted by the related Contract.

 

(h)           No
Waiver.  No provision of a Contract
has been waived in such a manner that such Contract fails to meet all of the
representations and warranties made by the Seller in this Section 2.2
with respect thereto and no provision of any Contract has been waived except as
noted in the Contract Files.

 

6

 

(i)            No
Defenses.  No Contract is subject to
any right of rescission, setoff, counterclaim or defense, including the defense
of usury, and the operation of any of the terms of any Contract, or the
exercise of any right thereunder, will not render such Contract unenforceable
in whole or in part or subject to any right of rescission, setoff, counterclaim
or defense, including the defense of usury, and the Seller has not received
written notice of the assertion of any such right of rescission, setoff,
counterclaim or defense asserted with respect thereto.

 

(j)            No
Liens.  No liens or claims exist or
have been filed for work, labor or materials or unpaid state or federal taxes
relating to any Financed Vehicle that are prior to, or equal or coordinate
with, the security interest in such Financed Vehicle created by the related
Contract.

 

(k)           No
Default; Repossession.  No default,
breach, violation or event permitting acceleration under the terms of any Contract
has occurred (other than payments that are not more than 30 days past due), no
continuing condition that with notice or the lapse of time or both would
constitute a default, breach, violation or event permitting acceleration under
the terms of any Contract has arisen and no Financed Vehicle has been
repossessed as of the applicable Cutoff Date.

 

(l)            Contribution.        The Seller intends that the conveyance,
transfer and absolute contribution of the Contracts contemplated by Section
2.1 constitute an absolute contribution of the Contracts from the Seller to
the Depositor and that the beneficial interest in, and title to, the Contracts
not be part of the Seller’s estate in the event of the filing of a bankruptcy
petition by or against the Seller under any bankruptcy law.  The Seller has not sold, transferred,
assigned or pledged any Contract to any Person other than the Depositor and
such Contract has not been released.

 

(m)          Valid
Assignment.  No Contract has been
originated in, or is subject to the laws of, any jurisdiction under which the
contribution sale, transfer, assignment and conveyance of such Contract under
this Agreement or the sale under the Sale and Allocation Agreement or the
pledge of such Contract under the Indenture is unlawful, void or voidable.  No Contract is subject to any agreement with
any account debtor that prohibits, restricts or conditions the assignment of
the Contracts.

 

(n)           [Reserved]

 

(o)           [Reserved]

 

(p)           One
Original.  There is only one original
executed copy of each Contract.

 

(q)           Principal
Balance.  Each Contract acquired by
the Trust on the Closing Date had a Principal Balance as of the Initial Cutoff
Date of not more than $50,000 and each Contract acquired by the Trust during
the Prefunding Period had a Principal Balance as of the applicable Cutoff Date
of not more than $50,000.

 

7

 

(r)            No
Bankrupt Obligors.  As of the
applicable Cutoff Date, no Contract was due from an Obligor that was the
subject of a proceeding under the Bankruptcy Code of the United States or was
bankrupt.

 

(s)           Term
to Maturity.  Each Contract had an
original term to maturity of not more than 72 payments; provided, however,
that as of the Prefunding Account Ending Date the weighted average remaining
term of all contracts shall not exceed 65 payments.

 

(t)            Annual
Percentage Rate.  Each Contract has
an APR of at least 5.0%; provided, however, that as of the
Prefunding Account Ending Date, the weighted average APR of all Contracts shall
not be less than 13.60%.

 

(u)           Location
of Contract Files.  The Contract
Files have been delivered to the Depositor prior to the applicable Purchase
Date; provided, however, that the Seller shall have 180 days
after the date that the applicable Contract is transferred to the Trust to deliver
to the Depositor any certificate of title or other evidence in lieu of a
certificate of title contained in such Contract File.

 

(v)           No
Delinquent Contracts or Defaulted Contracts.  As of the applicable Cutoff Date, no Contract
was a Delinquent Contract or a Defaulted Contract.

 

(w)          Offering
Memorandum Data.  The tabular and
numerical data contained in the Offering Memorandum relating to the
characteristics of the Contracts is true and correct in all material respects
as of the Initial Cutoff Date.

 

(x)            No
Defaults.  No Contract is due from an
Obligor that has previously defaulted on a retail installment sales contract or
promissory note and security agreement purchased by the Seller.

 

(y)           Final
Scheduled Payment Date.  As of the
applicable Cutoff Date, each Contract had a final scheduled payment on or
before March 31, 2012.

 

(z)            Originator
Agreement.  Each Contract is subject
to an Originator Agreement with the Seller and which if acquired by the Seller
pursuant to a “bulk purchase” from another Originator has been approved by the
Insurer.

 

(aa)         Lockbox.  The Obligor with respect to each contract has
been instructed to make payments under the Contract to a Lockbox which is under
the control of the Servicer.

 

(bb)         United
States Obligor.  Each Contract is due
from an Obligor which has provided as its most recent billing address an
address located in the United States of America.

 

(cc)         U.S.
Dollars.  Each Contract is payable in
the lawful money of the United States of America.

 

8

 

(dd)         No
Waiver or Modification.  No Contract
has been waived or modified as of the applicable Cutoff Date except as
permitted by the Servicing Agreement.

 

(ee)         Perfection
Representations.  The perfection
representations, warranties and covenants made by the Depositor and set forth
on Schedule 2 hereto shall be a part of this Agreement for all purposes.

 

(ff)           Direct
Program Origination.  Not less than
65.0% of the total portfolio of Contracts, after giving effect to the
Prefunding Period, shall have been originated through the Seller’s direct
origination program.

 

Section
2.3.               Repurchase by the Seller upon Breach.

 

The Depositor shall inform
the Seller promptly, in writing, upon the discovery of any breach or failure to
be true of the representations and warranties made by the Seller pursuant to Section
2.2 hereof.  If such breach or
failure shall not have been cured by the close of business on the last day of
the Collection Period which includes the thirtieth (30th) day after the date on
which the Seller becomes aware of, or receives written notice of such breach or
failure, and such breach or failure materially and adversely affects the
interest of the Trust in a Contract, the Seller shall purchase such Contract
from the Depositor for such contract’s Purchase Price on the Business Day
preceding the Payment Date immediately following such Collection Period.  The sole remedy of the Depositor with respect
to a breach or failure to be true of the representations and warranties made by
the Seller pursuant to Section 2.2 shall be to require the Seller to
repurchase Contracts pursuant to this Section 2.3.

 

Article
III

 

The
Seller

 

Section
3.1.               Representations and Warranties of the Seller.

 

The Seller makes the
following representations and warranties on which the Depositor shall be deemed
to have relied in accepting the Contributed Property.  The representations and warranties speak as
of the execution and delivery of this Agreement and as of each Additional
Contract Purchase Date and shall survive the conveyance, transfer and absolute
contribution of the Contributed Property to the Depositor pursuant to this
Agreement, the sale of the Trust Property pursuant to the Sale and Allocation
Agreement and the pledge of the Trust Property to the Indenture Trustee
pursuant to the Indenture:

 

(a)           Organization
and Good Standing.  The Seller has
been duly organized and is validly existing as a corporation in good standing
under the laws of the State of Texas, has the power, authority and legal right
to own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and has the power,
authority and legal right to acquire, own and sell the Contracts.

 

9

 

(b)           Due
Qualification.  The Seller is duly
qualified to do business as a foreign corporation in good standing and has
obtained all necessary licenses and approvals in each jurisdiction in which the
failure to so qualify or to obtain such licenses and approvals would, in the
reasonable judgment of the Seller, materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, any of the other Transaction Documents, the
Contracts or the Notes.

 

(c)           Power
and Authority.  The Seller has the
power and authority to execute, deliver and perform its obligations under this
Agreement and the other Transaction Documents to which it is a party.  The Seller has the power and authority to
sell, assign, transfer and convey the property to be contributed to and
deposited with the Depositor and has duly authorized such transfer and deposit
by all necessary corporate action, and the execution, delivery and performance
of this Agreement and the other Transaction Documents to which the Seller is a
party have been duly authorized by the Seller by all necessary corporate
action.

 

(d)           Valid
Transfer; Binding Obligation.  This
Agreement effects a valid conveyance, transfer and absolute contribution to the
Depositor of the Contracts and the other Contributed Property enforceable
against creditors of and purchasers from the Seller.  This Agreement and the other Transaction
Documents to which the Seller is a party constitute legal, valid and binding
obligations of the Seller, enforceable against the Seller in accordance with
their terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and
other similar laws and to general equitable principles.

 

(e)           No
Violation.  The execution, delivery
and performance by the Seller of this Agreement and the other Transaction
Documents to which the Seller is a party, the consummation of the transactions
contemplated hereby and thereby and the fulfillment of the terms hereof and
thereof will not conflict with, result in a breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or both)
a default under the certificate of incorporation or by-laws of the Seller or
any material indenture, agreement, mortgage, deed of trust or other instrument
to which the Seller is a party or by which the Seller is bound or to which any
of its properties are subject, or result in the creation or imposition of any
lien upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument (other than pursuant to
this Agreement), or violate any law, order, rule or regulation applicable to
the Seller or its properties of any federal or state regulatory body, court,
administrative agency or other governmental instrumentality having jurisdiction
over the Seller or any of its properties.

 

(f)            No
Proceedings.  There are no
proceedings or investigations pending, or, to the knowledge of the Seller,
threatened against the Seller before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having jurisdiction
over the Seller or its properties (i) asserting the invalidity of this
Agreement or any of the other Transaction Documents to which the Seller is a
party (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or any of the other Transaction Documents to
which the Seller is a party, (iii) seeking any determination or ruling that, in
the

 

10

 

reasonable judgment of the
Seller, would materially and adversely affect the performance by the Seller of
its obligations under, or the validity or enforceability of, this Agreement,
any of the other Transaction Documents to which the Seller is a party, or (iv)
that, in the reasonable judgment of the Seller, would adversely affect the
federal or Applicable Tax State income, excise, franchise or similar tax
attributes of the Notes or the Trust.

 

Section
3.2.               Liability of the Seller; Indemnities.

 

(a)           The
Seller shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Seller under this Agreement.

 

(b)           Notwithstanding
any other provision in any Transaction Document, the Seller shall indemnify,
defend and hold harmless the Depositor from and against any taxes that may at
any time be asserted against any such Person with respect to, and as of the
date of, the transfer of the Contracts and Additional Contracts to the
Depositor or the issuance and original sale of the Notes, including any sales,
gross receipts, general corporation, tangible personal property, privilege or
license taxes (but, in the case of the Depositor, not including any taxes
asserted with respect to ownership of the Contracts and Additional Contracts or
federal or other Applicable Tax State income taxes arising out of the
transactions contemplated by this Agreement and the other Transaction
Documents), and all costs and expenses in defending against such taxes.

 

(c)           The
Seller shall pay any and all taxes levied or assessed upon all or any part of
the Depositor.

 

Indemnification under this Section
3.2 shall survive the termination of this Agreement and shall include
reasonable fees and expenses of counsel and expenses of litigation.  If the Seller shall have made any indemnity
payments pursuant to this Section 3.2 and the Person to or on behalf of
whom such payments are made thereafter shall collect any of such amounts from
others, such Person shall promptly repay such amounts to the Seller, without
interest.

 

Section
3.3.               Limitation on Liability of the Seller and Others.

 

(a)           Neither
the Seller nor any of the directors, officers, employees or agents of the Seller
shall be under any liability to the Depositor or any other Person for any
action taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; provided, however, that this
provision shall not protect the Seller or any such Person against any liability
that would otherwise be imposed by reason of willful misfeasance or bad faith
in the performance of duties or by reason of reckless disregard of obligations
and duties under this Agreement, or by reason of negligence in the performance
of duties under this Agreement (except for errors in judgment).  The Seller, and its directors, officers,
employees and agents, may rely in good faith on the advice of counsel or on any
document of any kind prima  facie properly executed and submitted
by any Person in respect of any matters arising under this Agreement.

 

11

 

(b)           The
Seller shall not be under any obligation to appear in, prosecute or defend any
legal action that shall not be incidental to its obligations under this
Agreement and that in its opinion may involve it in any expense or liability.

 

Article
IV

 

Miscellaneous

 

Section
4.1.               Amendment.

 

(a)           This
Agreement may be amended from time to time by the Seller and the Depositor,
with the consent of the Insurer (provided that no Insurer Default shall have
occurred and be continuing), but without the consent of any of the Noteholders;
provided, however, that any such amendment that materially
adversely affects the rights of the Noteholders, as evidenced by an Opinion of
Counsel delivered to the Depositor, the Owner Trustee, the Indenture Trustee
and the Insurer, must be consented to by Noteholders evidencing not less than
51% of the Class A Note Balance.  Any
such amendment shall be deemed not to materially and adversely affect the
interests of any Noteholder if the Rating Agency Condition is satisfied or the
Person requesting the amendment obtains an Opinion of Counsel satisfactory to
the Depositor, the Owner Trustee, the Indenture Trustee and the Insurer to that
effect.

 

(b)           [Reserved]

 

(c)           Prior
to the execution of any amendment or consent pursuant to Section 4.1(a),
the Seller and the Depositor shall provide, or shall cause to be provided,
written notification of the substance of such amendment or consent to each
Rating Agency and the Insurer.

 

(d)           Promptly
after the execution of any amendment or consent pursuant to Section 4.1(a),
the Depositor shall furnish written notification of the substance of such
amendment or consent to the Indenture Trustee and each of the Rating
Agencies.  It shall not be necessary for
the consent of the Noteholders pursuant to Section 4.1(a) to approve the
particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consents (and
any other consents of the Noteholders provided for in this Agreement) and of
evidencing the authorization of the execution thereof by the Noteholders shall
be subject to such reasonable requirements as the Owner Trustee and the
Indenture Trustee may prescribe.

 

(e)           Prior
to the execution of any amendment pursuant to this Section 4.1, the
Owner Trustee and the Indenture Trustee shall be entitled to receive and rely
upon (i) an Opinion of Counsel stating that the execution of such amendment (A)
is authorized or permitted by this Agreement, (B) will not materially adversely
affect the federal or any Applicable Tax State income or franchise taxation of
any Outstanding Note or any Holder thereof and (C) will not cause the Trust to
be taxable as a corporation for federal or any Applicable Tax State income or
franchise tax purposes and (ii) an Officer’s Certificate of the Seller that all
conditions precedent provided for in this Agreement to the execution of such
amendment have been complied with.

 

12

 

The Owner Trustee or the
Indenture Trustee may, but shall not be obligated to, enter into any such
amendment which affects such Owner Trustee’s or Indenture Trustee’s own rights,
duties or immunities under this Agreement or otherwise.

 

Section
4.2.               Protection of Title of Depositor.

 

(a)           The
Seller shall authorize and file, or shall cause to be authorized and filed,
such financing statements and shall authorize and file, or shall cause to be
authorized and filed, such continuation statements, all in such manner and in
such places as may be required by law fully to preserve, maintain and protect
the interest of the Depositor in the Contracts and the proceeds thereof.  The Seller shall deliver, or shall cause to
be delivered, to the Depositor, the Owner Trustee, the Insurer and the
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above as soon as available following such filing.

 

(b)           The
Seller shall not change (i) its name, identity or corporate structure in any
manner that would make any financing statement or continuation statement filed
by the Seller in accordance with Section 4.2(a) seriously misleading
within the meaning of Section 9-507 of the Relevant UCC or (ii) its
jurisdiction of organization, unless, in each case it shall have given the
Owner Trustee, the Insurer and the Indenture Trustee at least sixty (60) days’
prior written notice thereof and shall have promptly filed such amendments to
previously filed financing statements or continuation statements or such new
financing statements as may be necessary to continue the perfection of the
interest of the Depositor in the Contracts and the proceeds thereof.

 

(c)           The
Seller shall give the Depositor, Owner Trustee, the Insurer and the Indenture
Trustee at least sixty (60) days’ prior written notice of any relocation of its
principal executive office or change of its jurisdiction of formation and shall
promptly file any such amendment, continuation statement or any new financing
statement.

 

(d)           If
at any time the Seller shall propose to sell, grant a security interest in, or
otherwise transfer any interest in any motor vehicle retail installment sale
contract or security interest and promissory note to any prospective purchaser,
lender or other transferee, the Seller shall give (or shall cause to be given)
to such prospective purchaser, lender or other transferee computer tapes,
compact disks, records or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Contract,
shall indicate clearly that such Contract has been Transferred to the
Depositor.

 

Section
4.3.               Governing Law.

 

This Agreement shall be
construed in accordance with the laws of the State of New York, without
reference to its conflict of law provisions, and the obligations, rights and
remedies of the parties under this Agreement shall be determined in accordance
with such laws.

 

13

 

Section
4.4.               Notices.

 

All demands, notices and
other communications under this Agreement shall be in writing, personally
delivered, sent by telecopier, overnight courier or mailed by certified mail, return
receipt requested, and shall be deemed to have been duly given upon receipt (a)
in the case of the Seller, at the following address: 675 Bering Drive, Suite
710, Houston, Texas 77057 Attention: Bennie Duck, (b) in the case of the
Depositor, at the following address: 675 Bering Drive, Suite 710, Houston,
Texas 77057 Attention: Bennie Duck, (c) in the case of the Owner Trustee, at
the related Corporate Trust Office, with a copy to Wells Fargo Delaware Trust
Company, 919 North Market Street, Suite 700, Wilmington, DE 19801
Attention:  Corporate Trust
Administration, (d) in the case of the Indenture Trustee, at the related
Corporate Trust Office, (e) in the case of Moody’s, at the following address:
Moody’s Investors Service, Inc., 99 Church Street, 4th Floor, New York, New
York 10007, ServicerReports@moodys.com, Attn: Yan Yan, with an additional copy
to Moody’s Investors Service, Inc., 99 Church Street, 4th Floor, New York, New
York 10007, Attn: ABS Monitoring Department, (f) in the case of S&P, if available
electronically, at Servicer_reports@sandp.com, and if not available
electronically, at the following address: Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc., 55 Water Street, 43rd
Floor, New York, New York 10041, Attention: ABS Surveillance Group, and (g) in
the case of the Insurer, at the following address:  MBIA Insurance Corporation, 113 King Street,
Armonk, New York 10504, Attention: Insured Portfolio Management, Structured Finance.

 

Section
4.5.               Severability of Provisions.

 

If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.

 

Section
4.6.               Assignment.

 

Notwithstanding anything to
the contrary contained herein to the contrary, this Agreement may not be
assigned by the Seller without the prior written consent of the Depositor.

 

Section
4.7.               Further Assurances.

 

The Seller agrees to do and
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the Depositor to effect more
fully the purposes of this Agreement, including, without limitation, the
execution of any financing statements or continuation statements relating to
the Contracts for filing under the provisions of the Relevant UCC of any
applicable jurisdiction.

 

14

 

Section
4.8.               No Waiver; Cumulative Remedies.

 

No failure to exercise and
no delay in exercising, on the part of any Person, of any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.  The rights,
remedies, powers and privileges provided in this Agreement are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.

 

Section
4.9.               Third-Party Beneficiaries.

 

This Agreement shall inure
to the benefit of and be binding upon the parties hereto, the Noteholders, the
Owner Trustee, the Indenture Trustee and their respective successors and
permitted assigns.  Except as otherwise
provided in Section 3.2 and this Article IV, no other Person
shall have any right or obligation hereunder. 
The parties hereto hereby acknowledge and consent to the pledge of this
Agreement by the Trust to the Indenture Trustee for the benefit of the
Noteholders and the Insurer pursuant to the Indenture.  The Insurer is an express third party
beneficiary of this Agreement and is entitled to enforce the provisions hereof
as if a party hereto.

 

Section
4.10.            Actions
by Noteholders.

 

(a)           Wherever
in this Agreement a provision is made that an action may be taken or a notice,
demand or instruction given by the Noteholders, such action, notice or
instruction may be taken or given by any Noteholder, as applicable, unless such
provision requires a specific percentage of the Noteholders.

 

(b)           Any
request, demand, authorization, direction, notice, consent, waiver or other act
by a Noteholder shall bind such Noteholder and every subsequent Holder of such
Note issued upon the registration of transfer thereof or in exchange therefor
or in lieu thereof in respect of anything done or omitted to be done by the
Depositor, Owner Trustee, the Indenture Trustee or the Servicer in reliance
thereon, whether or not notation of such action is made upon such Note.

 

Section
4.11.            Counterparts.

 

For the purpose of
facilitating the execution of this Agreement and for other purposes, this
Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.

 

Section
4.12.            [Reserved].

 

15

 

Section
4.13.            No
Bankruptcy.

 

The Trust and the Depositor
each covenants and agrees that, prior to the date which is one year and one day
after the payment in full of all securities issued by the Trust, which
securities were rated by any nationally recognized statistical rating
organization, it will not institute against, or join any other Person in
instituting against, or knowingly or intentionally cooperate or encourage any
other Person in instituting against, the Trust or the Depositor any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any federal or state bankruptcy or similar law.  This Section 4.13 shall survive the
resignation or removal of the Owner Trustee under the Trust Agreement and the
Indenture Trustee under the Indenture and shall survive the termination of the
Trust Agreement and the Indenture.

 

Section
4.14.            Certain
Rights of the Insurer.

 

So long as no Insurer Default
shall have occurred and be continuing, the Insurer shall have the right to
exercise all rights, including voting rights, which the Class A Noteholders are
entitled to exercise pursuant to this Contribution Agreement, without any
consent of such Class A Noteholders; provided, however, that the
foregoing shall not apply to the rights of the Class A Noteholders set forth in
the proviso to paragraph (a) of Section 4.1 of this Agreement.

 

Section
4.15.            Non-Confidential.

 

Notwithstanding anything
herein or in any express or implied agreement or understanding to the contrary,
any party to this Agreement (and any employee, representative or other agent of
any party to this Agreement) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement and all materials of any kind (including
opinions or other tax analyses) that are provided to it relating to such tax
treatment and tax structure; provided, however, that such disclosure
may not be made to the extent required to be kept confidential to comply with
any applicable federal or state securities laws; and provided  further
that (to the extent not inconsistent with the foregoing) such disclosure shall
be made without disclosing the names or other identifying information of any
party.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

16

 

IN WITNESS WHEREOF, the
parties hereto have caused this Contribution Agreement to be duly executed by
their respective officers, thereunto duly authorized, all as of the day and
year first above written.

 

 

	
   

  	
  FIRST INVESTORS FINANCIAL
  SERVICES,

  INC., as Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIRST INVESTORS AUTO
  FUNDING

  CORPORATION, as Depositor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

17

 

Schedule 1

 

Contract Schedule

 

Schedule
1

 

Schedule 2

 

Perfection Representations, Warranties and Covenants

 

In addition to the
representations, warranties and covenants contained in this Agreement, the
Seller hereby represents, warrants, and covenants to the Depositor as follows
on the Closing Date and on each Additional Contract Purchase Date on which the
Depositor purchases Contracts, in each case only with respect to the
Contributed Property conveyed, transferred and absolutely contributed to the
Depositor on the Closing Date or the relevant Additional Contract Purchase
Date:

 

General

 

1.             The
Agreement creates a valid and continuing security interest (as defined in the
Relevant UCC Section 9-102) in the Contributed Property in favor of the
Depositor, which security interest is prior to all other Liens, except as set
forth below and is enforceable as such against creditors of and purchasers from
and assignees of the Depositor.

 

2.             Each
Contract constitutes “tangible chattel paper” and not “electronic chattel
paper”, within the meaning of the Relevant UCC Section 9-102.

 

3.             The
Seller has taken or will take all steps necessary actions with respect to the
Contracts to perfect the security interest of the Depositor in the Contracts .

 

Creation

 

1.             The
Seller owns and has good and marketable title to the Contributed Property, free
and clear of any Lien, claim or encumbrance of any Person, excepting only tax
liens, some mechanics’ liens and other liens that arise by the operation of
law, in each case on any of the Financed Vehicles and arising solely as a
result of an action or omission of the related Obligor.

 

Perfection

 

1.             The
Seller has caused the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in the Contributed Property absolutely
contributed to the Depositor under this Agreement.

 

2.             With
respect to Contributed Property that constitutes tangible chattel paper, such
tangible chattel paper is in the possession of the Depositor (it being
understood that the Depositor will deliver such tangible chattel paper to the
Custodian and that the Depositor will receive a written acknowledgment from the
Custodian that it is holding such tangible chattel paper solely on its behalf
and for the benefit of the Depositor). 
All financing statements filed or to be filed against the Seller in
favor of the Depositor in connection with this Agreement describing the
Contributed Property contain a statement to the following effect: “A purchase
of or security interest in any collateral described in this financing statement
will violate the rights of the Secured Party.”

 

Schedule 2-1

 

Priority

 

1.             Other
than the security interest granted to the Depositor pursuant to this Agreement,
the Seller has not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Contributed Property.  The Seller has not authorized the filing of,
or is not aware of any financing statements against the Seller that includes a
description of the Contributed Property and proceeds related thereto other than
any financing statement (i) relating to the transfer of the Contracts by the
Seller to the Depositor under this Agreement; or (ii) that has been terminated
or amended to reflect a release of the Contributed Property.

 

2.             The
Seller is not aware of any judgment, ERISA or tax lien filings against the
Seller.

 

3.             None
of the tangible chattel paper that constitutes or evidences the Contracts has
any marks or notations indicating that it has been pledged, assigned or
otherwise conveyed to any Person other than the Depositor.

 

Survival of Perfection Representations

 

1.             Notwithstanding
any other provision of this Agreement, the Sale and Allocation Agreement, the
Indenture or any other Transaction Document, the Perfection Representations,
Warranties and Covenants contained in this Schedule shall be continuing, and
remain in full force and effect until such time as all obligations under this
Agreement, the Sale and Allocation Agreement and the Indenture have been
finally and fully paid and performed.

 

No Waiver

 

1.             The
parties hereto: (i) shall not, without obtaining a confirmation of the
then-current ratings of each Class of the Class A Notes (without giving effect
to the Policy), waive any of the Perfection Representations, Warranties or
Covenants; (ii) shall provide the Rating Agencies with prompt written notice of
any breach of the Perfection Representations, Warranties or Covenants, and
shall not, without obtaining a confirmation of the then-current ratings of each
Class of the Class A Notes (without giving effect to the Policy) (as determined
after any adjustment or withdrawal of the ratings following notice of such
breach) waive a breach of any of the Perfection Representations, Warranties or
Covenants.

 

Schedule
2-2

 

Exhibit
A

 

Form
Of Subsequent Contribution Agreement

 

For value received, in
accordance with the Contribution Agreement (the “Contribution Agreement”), dated as of January 26, 2006,
by and between First Investors Financial Services, Inc. and First Investors
Auto Funding Corporation, the undersigned does hereby convey, transfer and
absolutely contribute unto the Depositor, without recourse (subject to the
obligations in the Contribution Agreement) all right, title and interest of the
Seller in and to (i) the Additional Contracts listed on Schedule 1
hereto, (ii) all amounts received on or in respect of such Additional Contracts
after the Additional Cutoff Date related thereto; (iii) the security interests
in the Financed Vehicles related thereto; (iv) any proceeds from claims on or
refunds of premiums with respect to extended warranties or physical damage,
theft, credit life and credit disability insurance policies relating to the
Financed Vehicles or the related Obligors with respect to such Additional
Contracts; (v) any Liquidation Proceeds with respect to such Additional
Contracts; (vi) the Contract Files with respect to such  Additional Contracts; and (vii) and all
present and future claims, demands, causes of action and choses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing.

 

All provisions of the
Contribution Agreement are incorporated herein by reference.  All capitalized terms not defined herein
shall have the meanings set forth in the Contribution Agreement.

 

It is explicitly agreed by
the Seller and the Depositor that the Purchase Price delivered to the Seller by
the Depositor pursuant to this Subsequent Contribution Agreement shall consist
of the proceeds from the sale of the Additional Conveyed Property by the
Depositor to the Trust and that the remaining portion of the Purchase Price
shall be deemed to constitute a capital contribution by the Seller to the Depositor
(it being understood that the Seller has a 100% ownership interest in the
Depositor).

 

The Seller does hereby make
each of the representations and warranties referred to in Section 2.2 of
the Contribution Agreement with respect to this Subsequent Contribution
Agreement with full force and effect as if fully set forth herein.  The Seller does hereby certify that each of
the conditions precedent set forth in Section 2.1(f) of the Contribution
Agreement has been satisfied.

 

Exhibit A-1

 

This Subsequent Contribution
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York, without giving effect to the conflicts of laws
principles thereof.

 

IN WITNESS WHEREOF, the undersigned
has caused this Subsequent Contribution Agreement to be executed by its officer
thereunto duly authorized, as of              ,
200[    ].

 

	
   

  	
  FIRST INVESTORS FINANCIAL
  SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

Exhibit A-2

 

Schedule
1

to

Additional
Contract Assignment

Dated

        ,
2006

 

List
of Additional Contracts

 

Schedule-1Exhibit
4.2

 

EXECUTION COPY

 

 

MIRANT NORTH
AMERICA ESCROW, LLC 

MIRANT NORTH
AMERICA, LLC

MNA FINANCE
CORP.

 

AS ISSUERS 

 

AND

 

LAW DEBENTURE
TRUST COMPANY OF NEW YORK,

AS TRUSTEE

 

7.375% Senior
Notes due 2013

 

 

INDENTURE

 

Dated as of
December 23, 2005

 

 

Table of Contents

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  
	
  SECTION
  1.1.   Definitions

  	
  1

  
	
  SECTION
  1.2.   Other Definitions

  	
  34

  
	
  SECTION
  1.3.   Incorporation by Reference of Trust Indenture Act

  	
  36

  
	
  SECTION
  1.4.   Rules of Construction

  	
  37

  
	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
  THE SECURITIES

  	
   

  
	
   

  	
   

  
	
  SECTION
  2.1.   Form, Dating and Terms

  	
  37

  
	
  SECTION
  2.2.   Execution and Authentication

  	
  45

  
	
  SECTION
  2.3.   Registrar and Paying Agent

  	
  46

  
	
  SECTION
  2.4.   Paying Agent to Hold Money in Trust

  	
  47

  
	
  SECTION
  2.5.   Holder Lists

  	
  47

  
	
  SECTION
  2.6.   Transfer and Exchange

  	
  47

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

  	
  51

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

  	
  53

  
	
  SECTION
  2.9.   Mutilated, Destroyed, Lost or Stolen Securities

  	
  54

  
	
  SECTION
  2.10.   Outstanding Securities

  	
  55

  
	
  SECTION
  2.11.   Temporary Securities

  	
  55

  
	
  SECTION
  2.12.   Cancellation

  	
  56

  
	
  SECTION
  2.13.   Payment of Interest; Defaulted Interest

  	
  56

  
	
  SECTION 2.14.  
  Computation of Interest

  	
  57

  
	
  SECTION
  2.15.   CUSIP, Common Code and ISIN Numbers

  	
  57

  
	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION
  3.1.   Payment of Securities

  	
  58

  
	
  SECTION
  3.2.   Limitation on Indebtedness

  	
  58

  
	
  SECTION
  3.3.   Limitation on Restricted Payments

  	
  63

  
	
  SECTION
  3.4.   Limitation on Restrictions on Distributions from Restricted
  Subsidiaries

  	
  69

  
	
  SECTION
  3.5.   Limitation on Sales of Assets and Subsidiary Stock

  	
  72

  
	
  SECTION
  3.6.   Limitation on Liens

  	
  75

  
	
  SECTION
  3.7.   Limitation on Sale/Leaseback Transactions

  	
  76

  
	
  SECTION
  3.8.   Limitation on Affiliate Transactions

  	
  76

  
	
  SECTION
  3.9.   Restrictions on Activities of MNA Finance Corp.

  	
  79

  
	
  SECTION
  3.10.   Limitation on Lines of Business

  	
  79

  

 

ii

 

	
  SECTION
  3.11.   Change of Control

  	
  79

  
	
  SECTION
  3.12.   SEC Reports

  	
  80

  
	
  SECTION
  3.13.   Future Subsidiary Guarantors

  	
  81

  
	
  SECTION
  3.14.   Maintenance of Office or Agency

  	
  82

  
	
  SECTION
  3.15.   Corporate Existence

  	
  82

  
	
  SECTION
  3.16.   Payment of Taxes and Other Claims

  	
  82

  
	
  SECTION
  3.17.   Payments for Consent

  	
  82

  
	
  SECTION
  3.18.   Compliance Certificate

  	
  83

  
	
  SECTION
  3.19.   [Intentionally omitted]

  	
  83

  
	
  SECTION
  3.20.   Statement by Officers as to Default

  	
  83

  
	
  SECTION
  3.21.   Activities prior to Emergence Date

  	
  83

  
	
  SECTION
  3.22.   Effectiveness of Covenants

  	
  83

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

  	
  84

  
	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
  SUCCESSOR COMPANY

  	
   

  
	
   

  	
   

  
	
  SECTION
  4.1.   Merger and Consolidation

  	
  85

  
	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
  REDEMPTION OF SECURITIES

  	
   

  
	
   

  	
   

  
	
  SECTION
  5.1.   Redemption

  	
  87

  
	
  SECTION
  5.2.   Applicability of Article

  	
  87

  
	
  SECTION
  5.3.   Election to Redeem; Notice to Trustee

  	
  87

  
	
  SECTION
  5.4.   Selection by Trustee of Securities to Be Redeemed

  	
  87

  
	
  SECTION
  5.5.   Notice of Redemption

  	
  88

  
	
  SECTION
  5.6.   Deposit of Redemption Price

  	
  89

  
	
  SECTION
  5.7.   Securities Payable on Redemption Date

  	
  89

  
	
  SECTION
  5.8.   Securities Redeemed in Part

  	
  89

  
	
  SECTION
  5.9.   Special Mandatory Redemption

  	
  89

  
	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  
	
  SECTION
  6.1.   Events of Default

  	
  90

  
	
  SECTION 6.2.  
  Acceleration

  	
  94

  
	
  SECTION
  6.3.   Other Remedies

  	
  94

  
	
  SECTION
  6.4.   Waiver of Past Defaults

  	
  94

  
	
  SECTION
  6.5.   Control by Majority

  	
  95

  
	
  SECTION
  6.6.   Limitation on Suits

  	
  95

  
	
  SECTION
  6.7.   Rights of Holders to Receive Payment

  	
  95

  
	
  SECTION
  6.8.   Collection Suit by Trustee

  	
  96

  
	
  SECTION
  6.9.   Trustee May File Proofs of Claim

  	
  96

  
	
  SECTION
  6.10.   Priorities

  	
  96

  
	
  SECTION
  6.11.   Undertaking for Costs

  	
  96

  

 

iii

 

	
  ARTICLE VII

  	
   

  
	
  TRUSTEE

  	
   

  
	
   

  	
   

  
	
  SECTION
  7.1.   Duties of Trustee

  	
  97

  
	
  SECTION
  7.2.   Rights of Trustee

  	
  98

  
	
  SECTION
  7.3.   Individual Rights of Trustee

  	
  99

  
	
  SECTION
  7.4.   Trustee’s Disclaimer

  	
  99

  
	
  SECTION
  7.5.   Notice of Defaults

  	
  99

  
	
  SECTION
  7.6.   Reports by Trustee to Holders

  	
  100

  
	
  SECTION
  7.7.   Compensation and Indemnity

  	
  101

  
	
  SECTION
  7.8.   Replacement of Trustee

  	
  101

  
	
  SECTION
  7.9.   Successor Trustee by Merger

  	
  102

  
	
  SECTION
  7.10.   Eligibility; Disqualification

  	
  103

  
	
  SECTION
  7.11.   Preferential Collection of Claims Against the Issuers

  	
  103

  
	
  SECTION
  7.12.   Trustee’s Application for Instruction from the Issuers

  	
  103

  
	
  SECTION
  7.13.   Paying Agents

  	
  103

  
	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
  DISCHARGE OF INDENTURE; DEFEASANCE

  	
   

  
	
   

  	
   

  
	
  SECTION
  8.1.   Discharge of Liability on Securities; Defeasance

  	
  104

  
	
  SECTION
  8.2.   Conditions to Defeasance

  	
  105

  
	
  SECTION
  8.3.   Application of Trust Money

  	
  107

  
	
  SECTION
  8.4.   Repayment to the Issuers

  	
  107

  
	
  SECTION
  8.5.   Indemnity for U.S. Government Obligations

  	
  107

  
	
  SECTION
  8.6.   Reinstatement

  	
  107

  
	
   

  	
   

  
	
  ARTICLE IX

  	
   

  
	
  AMENDMENTS

  	
   

  
	
   

  	
   

  
	
  SECTION
  9.1.   Without Consent of Holders

  	
  108

  
	
  SECTION
  9.2.   With Consent of Holders

  	
  109

  
	
  SECTION
  9.3.   Compliance with Trust Indenture Act

  	
  110

  
	
  SECTION
  9.4.   Revocation and Effect of Consents and Waivers

  	
  110

  
	
  SECTION
  9.5.   Notation on or Exchange of Securities

  	
  111

  
	
  SECTION
  9.6.   Trustee To Sign Amendments

  	
  111

  
	
   

  	
   

  
	
  ARTICLE X

  	
   

  
	
  SECURITIES GUARANTEE

  	
   

  
	
   

  	
   

  
	
  SECTION
  10.1.   Subsidiary Guarantee

  	
  111

  
	
  SECTION
  10.2.   Limitation on Liability; Termination, Release and Discharge

  	
  113

  
	
  SECTION
  10.3.   Right of Contribution

  	
  114

  
	
  SECTION
  10.4.   No Subrogation

  	
  114

  

 

iv

 

	
  ARTICLE XI

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION
  11.1.   Trust Indenture Act Controls

  	
  115

  
	
  SECTION
  11.2.   Notices

  	
  115

  
	
  SECTION
  11.3.   Communication by Holders with other Holders

  	
  116

  
	
  SECTION
  11.4.   Certificate and Opinion as to Conditions Precedent

  	
  116

  
	
  SECTION
  11.5.   Statements Required in Certificate or Opinion

  	
  116

  
	
  SECTION
  11.6.   When Securities Disregarded

  	
  117

  
	
  SECTION
  11.7.   Rules by Trustee, Paying Agent and Registrar

  	
  117

  
	
  SECTION
  11.8.   Legal Holidays

  	
  117

  
	
  SECTION
  11.9.   Governing Law

  	
  117

  
	
  SECTION
  11.10.   No Recourse Against Others

  	
  117

  
	
  SECTION
  11.11.   Successors

  	
  118

  
	
  SECTION
  11.12.   Multiple Originals

  	
  118

  
	
  SECTION
  11.13.   Qualification of Indenture

  	
  118

  
	
  SECTION
  11.14.   Table of Contents; Headings

  	
  118

  
	
  SECTION
  11.15.   Force Majeure

  	
  118

  
	
  SECTION
  11.16.   Effectiveness of Provisions for MNA and the Subsidiary
  Guarantors

  	
  118

  
	
   

  	
   

  
	
  SCHEDULE 3.2

  	
  Existing Indebtedness

  	
   

  
	
  SCHEDULE 3.4

  	
  Permitted Restrictions on Distributions

  	
   

  
	
  SCHEDULE 3.6

  	
  Existing Liens

  	
   

  
	
  SCHEDULE 3.8

  	
  Affiliate Transactions

  	
   

  
	
  SCHEDULE I

  	
  Existing Investments

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Form of the Series A Note

  	
   

  
	
  EXHIBIT B

  	
  Form of the Series B Note

  	
   

  
	
  EXHIBIT C

  	
  Form of Indenture Supplement to Add
  Subsidiary Guarantors

  	
   

  
				

 

v

 

CROSS-REFERENCE
TABLE

 

	
  TIA

  Section

  	
   

  	
  Indenture

  Section

  
	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  7.3;
  7.8; 7.10

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312

  	
  (a)

  	
   

  	
  2.5

  
	
   

  	
  (b)

  	
   

  	
  11.3

  
	
   

  	
  (c)

  	
   

  	
  11.3

  
	
  313

  	
  (a)

  	
   

  	
  7.6

  
	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  
	
   

  	
  (b)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (c)

  	
   

  	
  7.6

  
	
   

  	
  (d)

  	
   

  	
  7.6

  
	
  314

  	
  (a)

  	
   

  	
  3.18

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
   

  	
  N.A.

  
	
   

  	
  (c)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
  (e)

  	
   

  	
  N.A.

  
	
  315

  	
  (a)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
  (e)

  	
   

  	
  N.A.

  
	
  316

  	
  (a)(last
  sentence)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  317

  	
  (a)(1)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
  318

  	
  (a)

  	
   

  	
  N.A.

  

 

N.A. means Not
Applicable.

 

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

 

vi

 

INDENTURE dated as of December
23, 2005, among MIRANT NORTH AMERICA ESCROW, LLC, a Delaware limited liability
company (“Escrow LLC”), MIRANT NORTH AMERICA, LLC, a Delaware limited
liability company (“MNA” and together with the Escrow LLC, the “Company”),
MNA FINANCE CORP., a Delaware corporation (“MNA Finance Corp.” and,
together with the Company, the “Issuers”), the Subsidiary Guarantors (as
hereinafter defined) from time to time parties hereto and LAW DEBENTURE TRUST
COMPANY OF NEW YORK, a national banking association (the “Trustee”), as
Trustee.

 

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

 

ARTICLE
I

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION
1.1.   Definitions.

 

“Acquired
Indebtedness” means Indebtedness (i) of a Person or any of its Subsidiaries
existing at the time such Person becomes a Restricted Subsidiary or (ii)
assumed in connection with the acquisition of assets from such Person, in each
case whether or not Incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary
or such acquisition.  Acquired
Indebtedness shall be deemed to have been Incurred, with respect to clause (i)
of the preceding sentence, on the date such Person becomes a Restricted
Subsidiary and, with respect to clause (ii) of the preceding sentence, on the
date of consummation of such acquisition of assets.

 

“Additional Assets” means:

 

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

 

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

 

(3)                                  Capital
Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary;

 

 

provided, however, that, in the case of
clauses (2) and (3), such Restricted Subsidiary is primarily engaged in a
Permitted Business.

 

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

 

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

 

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

 

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

 

(2)                                  the excess
of:

 

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

 

(b)                                  the then
outstanding principal amount of the Security.

 

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

 

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

 

(1)                                  a
disposition of assets (x) by a Restricted Subsidiary to the Company or (y) by
the Company or a Restricted Subsidiary to a Restricted Subsidiary; provided that in the case of a sale by a Restricted
Subsidiary to another Restricted Subsidiary, the Company directly or indirectly
owns an equal or greater percentage of the Common Stock of the transferee than
of the transferor;

 

(2)                                  the sale of
Cash Equivalents;

 

2

 

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

 

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

 

(5)                                  transactions
permitted under Section 4.1;

 

(6)                                  an issuance
of Capital Stock by a Restricted Subsidiary to the Company or to a Restricted
Subsidiary;

 

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

 

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

 

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

 

(10)                            dispositions
of receivables in connection with the compromise, settlement or collection
thereof in the ordinary course of business or in bankruptcy or similar
proceedings and exclusive of factoring or similar arrangements;

 

(11)                            the issuance
by a Restricted Subsidiary of Preferred Stock that is permitted by Section
3.2;

 

(12)                            the
licensing or sublicensing of intellectual property or other general intangibles
and licenses, leases or subleases of other property in the ordinary course of
business which do not materially interfere with the business of the Company and
its Restricted Subsidiaries; 

 

(13)                            foreclosure
on assets; 

 

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

 

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

 

(16)                            dispositions
made pursuant to the Plan of Reorganization;

 

3

 

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

 

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

 

(19)                            any Casualty
Event; and

 

(20)                            the
unwinding of any Hedging Obligation.

 

“Attributable
Indebtedness” in respect of a Sale/Leaseback Transaction means, as at the time
of determination, the present value (discounted at the interest rate implicit
in the transaction) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in such Sale/Leaseback Transaction
(including any period for which such lease has been extended), determined in
accordance with GAAP; provided, however, that
if such Sale/Leaseback Transaction results in a Capitalized Lease Obligation,
the amount of Indebtedness represented thereby will be determined in accordance
with the definition of “Capitalized Lease Obligations.” 

 

“Average
Life” means, as of the date of determination, with respect to any Indebtedness
or Preferred Stock, the quotient obtained by dividing (1) the sum of the
products of the numbers of years from the date of determination to the dates of
each successive scheduled principal payment of such Indebtedness or redemption
or similar payment with respect to such Preferred Stock multiplied by the
amount of such payment by (2) the sum of all such payments. 

 

“Bankruptcy
Law” means Title 11 of the United States Code or any similar federal or
state law for the relief of debtors.

 

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

 

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

 

“Board
Resolution” means a copy of a resolution certified by the Secretary or an
Assistant Secretary of a Person to have been duly adopted by the Board of
Directors of such Person and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

 

“Business
Day” means each day that is not a Saturday, Sunday or other day on which
banking institutions in New York, New York are authorized or required by law to
close.

 

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

 

4

 

“Capitalized
Lease Obligations” means an obligation that is required to be classified and
accounted for as a capitalized lease for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented by such
obligation will be the capitalized amount of such obligation at the time any
determination thereof is to be made as determined in accordance with GAAP, and
the Stated Maturity thereof will be the date of the last payment of rent or any
other amount due under such lease prior to the first date such lease may be
terminated without penalty; provided,
however, that in no event shall
the obligations of MIRMA under the Facility Lease Documents (without giving
effect to any amendment, supplement or modification thereto) be treated as
Capitalized Lease Obligations.

 

“Cash Equivalents” means:

 

(1)                                  securities
issued or directly and fully guaranteed or insured by the United States
Government or any agency or instrumentality of the United States (provided that the full faith and credit of the United States
is pledged in support thereof), and, other than any such securities used to
defease Indebtedness, having maturities of not more than one year from the date
of acquisition;

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

“Change of Control” means:  

 

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

 

(2)                                  the first
day on which a majority of the members of the Board of Directors of the Company
or Parent are not Continuing Directors; or

 

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

 

(4)                                  the adoption
by the stockholders of the Company or Parent of a plan or proposal for the
liquidation or dissolution of the Company or Parent.

 

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

 

“Commodity
Agreement” means any commodity futures contract, commodity option or other
similar agreement or arrangement entered into by the Company or any Restricted
Subsidiary designed to protect the Company or any of its Restricted
Subsidiaries against fluctuations in the price of any commodity, including
without limitation, fuel, emissions and electric energy or capacity, actually
sold or used in the ordinary course of business of the Company and its
Restricted Subsidiaries.

 

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

 

6

 

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

 

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

 

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

 

(1)                                  if the
Company or any Restricted Subsidiary: 

 

(a)                                  has Incurred
any Indebtedness since the beginning of such period that remains outstanding on
such date of determination or if the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness,
Consolidated EBITDA and Consolidated Interest Expense for such period will be
calculated after giving effect on a pro forma basis to such Indebtedness as if
such Indebtedness had been Incurred on the first day of such period (except
that in making such computation, the amount of Indebtedness under any revolving
credit facility outstanding on the date of such calculation will be deemed to
be (i)  the average daily balance of such
Indebtedness during such four fiscal quarters or such shorter period for which
such facility was outstanding or (ii) if such facility was created after the
end of such four fiscal quarters, the average daily balance of such
Indebtedness during the period from the date of creation of such facility to
the date of such calculation) and the discharge of any other Indebtedness
repaid, repurchased, defeased or otherwise discharged with the proceeds of such
new Indebtedness as if such discharge had occurred on the first day of such
period; or 

 

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

 

(2)                                  if since the
beginning of such period the Company or any Restricted Subsidiary will have
made any Asset Disposition or disposed of any company, division, operating
unit, segment, business, group of related assets or line of business or if the
transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is such an Asset Disposition:

 

7

 

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

 

(b)                                 Consolidated
Interest Expense for such period will be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of the
Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its Restricted Subsidiaries in
connection with such Asset Disposition for such period (or, if the Capital
Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense
for such period directly attributable to the Indebtedness of such Restricted
Subsidiary to the extent the Company and its Restricted Subsidiaries are no
longer liable for such Indebtedness after such sale); 

 

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

 

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

 

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

 

For purposes
of this definition, whenever pro forma effect is to be given to any calculation
under this definition, the pro forma calculations will be determined in good
faith by a responsible financial or accounting officer of the Company; provided that (x) whenever pro forma
effect is to

 

8

 

be given to an
Investment, merger, acquisition or Asset Disposition, the pro forma
calculations shall be determined in good faith by a responsible financial or
accounting Officer of the Company and shall comply with the requirements of
Rule 11-02 of Regulation S-X promulgated by the SEC, except that such pro forma calculations may include
operating expense reductions for such period resulting from the transaction
which is being given pro forma
effect that have been realized or for which substantially all the steps
necessary for realization have been taken or are reasonably expected to be
taken within six months following any such transaction, including, but not
limited to, the execution or termination of any contracts, reduction of costs
related to administrative functions, the termination of any personnel or the
closing (or approval by the Board of Directors of the Company of any closing)
of any facility, as applicable, provided
that, in either case, such adjustments are set forth in an Officers’
Certificate signed by the Company’s chief financial officer and another Officer
which states (i) the amount of such adjustment or adjustments, (ii) that such
adjustment or adjustments are based on the reasonable good faith beliefs of the
Officers executing such Officers’ Certificate at the time of such execution and
(iii) that any related Incurrence of Indebtedness is permitted pursuant to the
Indenture and (y) pro forma calculations pursuant to clause (5) above shall be
set forth in an Officers’ Certificate signed by the Company’s chief financial
officer and another Officer which states that such calculations are based on
the reasonable good faith beliefs of the Officers executing such Officers’
Certificate at the time of such execution. 
If any Indebtedness bears a floating rate of interest and is being given
pro forma effect, the interest expense on such Indebtedness will be calculated
as if the rate in effect on the date of determination had been the applicable
rate for the entire period (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months).  If any
Indebtedness that is being given pro forma effect bears an interest rate at the
option of the Company, the interest rate shall be calculated by applying such
optional rate chosen by the Company.

 

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

 

(1)                                  Consolidated
Interest Expense; plus

 

(2)                                  Consolidated
Income Taxes plus franchise and similar taxes; plus

 

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

 

(4)                                  all
non-recurring costs and expenses of the Company and its Restricted Subsidiaries
incurred in connection with (x) the Emergence Transactions and (y) litigation
attributable to the Company’s Chapter 11 cases (so long as such costs and
expenses have been approved and allowed by the Bankruptcy Court), including but
not limited to non-recurring costs and expenses incurred in the related
financing transactions and as a result of operating changes implemented within
18 months of the completion of the Emergence Transactions; plus

 

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

 

(6)                                  realized
losses on transition power agreements, in the amounts set forth in and as
further described in the Offering Memorandum, but only to the extent such

 

9

 

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

 

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

 

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

 

Notwithstanding
the preceding sentence, amounts under clauses (2) through (8) of a Restricted
Subsidiary of a Person (other than a Wholly-Owned Subsidiary) will be added to
or subtracted from, as the case may be, Consolidated Net Income to compute
Consolidated EBITDA of such Person only to the extent (and in the same
proportion) that the net income (loss) of such Restricted Subsidiary was
included in calculating the Consolidated Net Income of such Person and, to the
extent the amounts set forth in clauses (2) through (8) are in excess of those
necessary to offset a net loss of such Restricted Subsidiary or if such
Restricted Subsidiary has net income for such period included in Consolidated
Net Income, only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Restricted
Subsidiary or its stockholders.

 

“Consolidated
Income Taxes” means, with respect to any Person for any period, taxes imposed
upon such Person or other payments required to be made by such Person by any
governmental authority which taxes or other payments are calculated by
reference to the income or profits of such Person or such Person and its
Restricted Subsidiaries (to the extent such income or profits were included in
computing Consolidated Net Income for such period), regardless of whether such
taxes or payments are required to be remitted to any governmental authority.

 

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

 

(1)                                  consolidated
interest expense of such Person and its Restricted Subsidiaries for such
period, to the extent such expense was deducted in computing Consolidated Net
Income (including amortization of original issue discount resulting from the
issuance of Indebtedness at less than par, noncash interest payments (but
excluding any noncash interest expense attributable to the movement in the mark-to-market
valuation of Hedging Obligations or other derivative instruments pursuant to
Financial Accounting Standards Board Statement No. 133—”Accounting for
Derivative Instruments and Hedging Activities”), the interest component of
Capitalized Lease Obligations and net payments, if any, pursuant to interest
rate Hedging Obligations with respect to Indebtedness, and excluding

 

10

 

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

 

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

 

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

 

(4)                                  the product
of (a) all dividends paid or payable, in cash, Cash Equivalents or Indebtedness
or accrued during such period on any series of Disqualified Stock of such
Person or on Preferred Stock of its Restricted Subsidiaries that are not
Subsidiary Guarantors payable to a party other than the Company or a Wholly-Owned
Subsidiary, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state,
provincial and local statutory tax rate of such Person, expressed as a decimal,
in each case, on a consolidated basis and in accordance with GAAP; and

 

(5)                                  consolidated
capitalized interest of such Person and its Restricted Subsidiaries for such
period, whether paid or accrued; less

 

(6)                                  interest
income with respect to accounts deposited to secure the synthetic letter of
credit tranche of the Senior Secured Credit Agreement in existence on the
Emergence Date.

 

“Consolidated Net Income” means, for any
period, the Net Income of the Company and its consolidated Restricted Subsidiaries;
provided, however, that there
will not be included in such Consolidated Net Income:

 

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

 

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

 

11

 

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

 

(a)                                  subject to
the limitations contained in clauses (3) through (9) below, the Company’s
equity in the net income of any such Restricted Subsidiary for such period will
be included in such Consolidated Net Income up to the aggregate amount of cash
that could have been distributed by such Restricted Subsidiary during such
period to the Company or another Restricted Subsidiary as a dividend (subject,
in the case of a dividend to another Restricted Subsidiary, to the limitation
contained in this clause); and

 

(b)                                 the Company’s
equity in a net loss of any such Restricted Subsidiary for such period will be
included in determining such Consolidated Net Income; 

 

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

 

(4)                                  any extraordinary
gain or loss; 

 

(5)                                  the
cumulative effect of a change in accounting principles;

 

(6)                                  any increase
in amortization or depreciation or other non-cash charges resulting from the
application of SOP 90-7 in relation to the Emergence Transactions or from
purchase accounting due to any acquisition that is consummated after the Issue
Date; and

 

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

 

(8)                                  consolidated
amortization expense or impairment charges recorded in connection with the
application of Financial Accounting Standard No. 142 “Goodwill and Other
Intangibles” and Financial Accounting Standard No. 144 “Accounting for the
Impairment or Disposal of Long Lived Assets;” and

 

(9)                                  Mark-to-Market
Adjustments.

 

For
purposes of calculating the amount of Restricted Payments permitted pursuant to
clause (c)(i) of Section 3.3, the amount of Consolidated Net Income
shall be reduced, without duplication, by amounts dividended to Parent for
taxes pursuant to clause (10) of the second paragraph of Section 3.3
(such calculation to be made on a quarterly basis).

 

12

 

Notwithstanding
the foregoing, for the purpose of Section 3.3 only, there shall be
excluded from Consolidated Net Income any income arising from any sale or other
disposition of Restricted Investments made by the Company and its Restricted
Subsidiaries, any repurchases and redemptions from the Company and its
Restricted Subsidiaries, any repayments on loans and advances which constitute
Restricted Investments by the Company or any Restricted Subsidiary, any sale of
the stock of an Unrestricted Subsidiary or any distribution or dividend from an
Unrestricted Subsidiary, in each case only to the extent such amounts increase
the amount of Restricted Payments permitted under such covenant pursuant to
clause (c)(iv) of Section 3.3. 

 

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

 

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

 

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

 

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

 

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

 

“Definitive
Securities” means certificated Securities.

 

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

 

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

 

(2)                                  is
convertible or exchangeable for Indebtedness or Disqualified Stock (excluding
Capital Stock which is convertible or exchangeable solely at the option of the
Company or a Restricted Subsidiary); or 

 

13

 

(3)                                  is
redeemable at the option of the holder of the Capital Stock in whole or in
part, in each case on or prior to the date that is 91 days after the earlier of
the date (a) of the Stated Maturity of the Securities or (b) on which there are
no Securities outstanding, provided
that only the portion of Capital Stock which so matures or is mandatorily
redeemable, is so convertible or exchangeable or is so redeemable at the option
of the holder thereof prior to such date will be deemed to be Disqualified
Stock; provided, further that any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase such
Capital Stock upon the occurrence of a change of control or asset sale (each
defined in a substantially identical manner to the corresponding definitions in
the Indenture) shall not constitute Disqualified Stock if the terms of such
Capital Stock (and all such securities into which it is convertible or for
which it is ratable or exchangeable) provide that the Company may not
repurchase or redeem any such Capital Stock (and all such securities into which
it is convertible or for which it is ratable or exchangeable) pursuant to such
provision prior to compliance by the Company with Section 3.5 and Section
3.11 of this Indenture and such repurchase or redemption complies with Section
3.3.  

 

“DTC”
means The Depository Trust Company, its nominees and their respective
successors and assigns, or such other depository institution hereinafter
appointed by the Company.

 

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

 

“Emergence
Transactions” means the various transactions set forth in the Plan of
Reorganization entered into by the Company and its affiliates in connection
with the Emergence Date and substantial consummation of the Plan of
Reorganization, including without limitation, the various corporate
restructuring transactions outlined in the Plan of Reorganization (other than
the contribution of MET to the Company which shall occur no later than 60 days
after the Emergence Date), the issuance of the Securities, borrowing made under
the Senior Secured Credit Agreement on the Emergence Date and the application
of a portion of the proceeds of such financings in accordance with such Plan of
Reorganization.

 

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

 

“Escrow
Agreement” means that certain escrow agreement dated as of the date of this
Indenture by and among the Issuers, the Trustee, Deutsche Bank Trust Company
Americas, as

 

14

 

securities
intermediary and escrow agent, and the other parties thereto, as the same may
be amended, supplemented or otherwise modified from time to time.

 

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

 

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

 

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

 

“Excluded
Contribution” means net cash proceeds, marketable securities or Qualified
Property, in each case received by the Company and its Restricted Subsidiaries
from:

 

(1)                                  contributions to its common equity
capital; and

 

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

 

in each case designated as Excluded
Contributions pursuant to an Officers’ Certificate on the date such capital
contributions are made or the date such Capital Stock is sold, as the case may
be, which are excluded from the calculation set forth in clause (c)(ii) of the
first paragraph of Section 3.3.

 

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

 

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

 

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

 

“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative functions of or pertaining to
government.

 

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

 

15

 

(1)                                  to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, or to maintain financial statement
conditions or otherwise); or 

 

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

 

“Guarantor
Subordinated Obligation” means, with respect to a Subsidiary Guarantor, any
Indebtedness of such Subsidiary Guarantor (whether outstanding on the Issue
Date or thereafter Incurred) which is expressly subordinate in right of payment
to the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee
pursuant to a written agreement.

 

“Hedging
Obligations” of any Person means the obligations of such Person pursuant to any
Interest Rate Agreement, Currency Agreement or Commodity Agreement.

 

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

 

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

 

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

 

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

 

(1)                                  the principal
of and premium (if any) in respect of indebtedness of such Person for borrowed
money (other than except as provided in clause (3) below, in respect of letters
of credit);

 

(2)                                  the
principal of and premium (if any) in respect of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments (other than
except as provided in clause (3) below, in respect of letters of credit);

 

(3)                                  reimbursement
obligations in respect of drawn letters of credit, except to the extent such reimbursement
obligation relates to a trade payable and such obligation is satisfied within
30 days of Incurrence;

 

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

 

16

 

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

 

(6)                                  the
principal component or liquidation preference of all obligations of such Person
with respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary that is not a Subsidiary
Guarantor, any Preferred Stock (but excluding, in each case, any accrued
dividends);

 

(7)                                  the
principal component of all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such Person;
provided, however,
that the amount of such Indebtedness will be the lesser of (a) the fair market
value of such asset at such date of determination and (b) the amount of such
Indebtedness of such other Persons;

 

(8)                                  the
principal component of Indebtedness of other Persons to the extent Guaranteed
by such Person;  and

 

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

 

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

 

In addition, “Indebtedness” of any Person
shall include Indebtedness described in the preceding paragraph that would not
appear as a liability on the balance sheet of such Person if:

 

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

 

(2)                                  such Person
or a Restricted Subsidiary of such Person is a general partner of the Joint
Venture (a “General Partner”); and

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

“Interest
Rate Agreement” means with respect to any Person any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement or other similar agreement or
arrangement as to which such Person is party or a beneficiary.

 

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

 

(1)                                  Hedging
Obligations in compliance with this Indenture;

 

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

 

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

 

For purposes of Section 3.3,

 

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

 

18

 

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

 

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

 

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

 

“Issue
Date” means December 23, 2005.

 

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

 

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

 

“Law”
means, as to any Person, the Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person, and any law, treaty, rule
or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject. 

 

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

 

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

 

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

 

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

 

“MAI
Series B Preferred Shares” has the meaning set forth in the Plan of
Reorganization.

 

“Management
Agreement” means the Service Agreement, dated as of January 3, 2006, pursuant
to which Mirant Services performs the administrative functions described in “Certain
relationship and related party transactions — Related party arrangements after
emergence from

 

19

 

bankruptcy — Administration services
agreements with Mirant Services” section of the Offering Memorandum, as
amended, supplemented or otherwise modified from time to time.

 

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

 

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

 

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

 

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

 

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

 

(2)                                  all payments
made on any Indebtedness which is secured by any assets subject to such Asset
Disposition or Casualty Event, in accordance with the terms of any Lien upon
such assets, or which must by its terms, or in order to obtain a necessary
consent to the Asset Disposition, or by applicable law be repaid out of the proceeds
from such Asset Disposition or Casualty Event; 

 

(3)                                  all
distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Disposition
or Casualty Event; and

 

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

 

20

 

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

 

“Net Income” means, with respect to any
specified Person, the net income (loss) of such Person, determined in
accordance with GAAP and before any reduction in respect of preferred stock
dividends.

 

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

 

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

 

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

 

“Non-Recourse Debt” means
Indebtedness of a Person:

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

“Pari Passu
Indebtedness” means Indebtedness that ranks equally in right of payment to the
Securities.

 

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

 

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

 

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

 

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

 

(c)                                 the counterparty can exercise its rights with
respect to the Lien only (i) for so long as the counterparty remains
current with respect to all of its payment obligations under the PPA and is not
otherwise in a continuing default under the PPA, and (ii) if either (A) the
Company or the applicable Restricted Subsidiary has terminated, rejected or
repudiated the PPA (including any rejection or similar act by or on behalf of
the Company or the applicable Restricted Subsidiary in connection with any
bankruptcy proceeding) or (B) the Company or the applicable Restricted
Subsidiary has breached its obligations under the PPA; provided,
that the following actions will be considered a breach by the Company or the
applicable Restricted Subsidiary under the PPA: (1) the Company or the
applicable Restricted Subsidiary provides or delivers capacity or energy to a
third party if the

 

22

 

Company or the applicable
Restricted Subsidiary is required under the PPA to provide or deliver such
capacity or energy to the counterparty; (2) the Company or the applicable
Restricted Subsidiary of the Company fails to perform its material
obligations under the PPA, and such failure continues beyond any cure or grace
period under the PPA, and its performance is not prevented by force majeure,
forced outage or other events or circumstances outside the reasonable control
of the Person responsible therefor; (3) any failure by the Company or the
applicable Restricted Subsidiary to comply with any provisions of the PPA
designed to enable the counterparty to assume operational control of the
relevant Facility or Facilities (e.g., step-in rights) or otherwise take
actions necessary to continue performance of the Company’s or the applicable
Restricted Subsidiary’s obligations under the PPA, in each case to the extent
the Company or the applicable Restricted Subsidiary is then capable of
complying with such provisions; or (4) any failure by the Company or the
applicable Restricted Subsidiary to pay to the counterparty any amount due and
payable in accordance with the terms and conditions of the PPA; 

 

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

 

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

 

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

 

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

 

(1)                                  the Company,
a Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary; provided,
however, that Investments in Non-Guarantor Restricted Subsidiaries
shall not be in the form of a contribution or transfer of material
property, plant and equipment or Capital Stock of any Person;

 

(2)                                  another
Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, the Company or a Restricted Subsidiary; provided, however, that if such Person becomes a
Non-Guarantor Restricted Subsidiary, such Investment shall

 

23

 

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

 

(3)                                  cash and
Cash Equivalents; 

 

(4)                                  receivables
owing to the Company or any Restricted Subsidiary created or acquired in the
course of commercial activities; 

 

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

 

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

 

(7)                                  Capital
Stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments or pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of a
debtor;

 

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

 

(9)                                  Investments
in existence, or committed to (and identified on Schedule I to this
Indenture on the Issue Date), on the Emergence Date; 

 

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

 

(11)                            Guarantees
issued in accordance with Section 3.2;

 

(12)                            Investments
in the form of, or pursuant to, working interests, royalty interests,
mineral leases, processing agreements, farm-out agreements, contracts for the
sale, transportation or exchange of oil and natural gas, unitization
agreements, pooling agreements, area of mutual interest agreements, production
sharing agreements or other similar or customary agreements, transactions, properties,
interests or arrangements, and Investments and expenditures in connection
therewith or pursuant thereto, in each case, made or entered into in the
ordinary course of business; and

 

(13)                            Investments
by the Company or any of its Restricted Subsidiaries, together with all other
Investments pursuant to this clause (13), in an aggregate amount at the time of
such Investment not to exceed the greater of $200.0 million and 5% of Total
Assets outstanding at any one time (without giving effect to the sale of an
Unrestricted Subsidiary to the extent the proceeds of such sale do not consist
of cash and/or marketable securities) (with the fair market value of such
Investment

 

24

 

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

 

“Permitted Liens” means, with
respect to any Person:

 

(1)                                  Liens securing
Indebtedness and other obligations and related Hedging Obligations of the
Company and Subsidiary Guarantors Incurred under the provisions described in
clause (b)(1) of Section 3.2;

 

(2)                                  pledges or
deposits by such Person under workmen’s compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with bids, tenders, contracts (other than for the payment of Indebtedness) or
leases to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States government
bonds to secure surety or appeal bonds to which such Person is a party, or
deposits as security for contested taxes or import or customs duties or for the
payment of rent, in each case Incurred in the ordinary course of business;

 

(3)                                  Liens
arising by operation of law or by order of a court or tribunal or other
Governmental Authority (or by an agreement of similar effect), including
carriers’, warehousemen’s, mechanics’, materialmen’s and repairmen’s Liens, in
each case for sums not yet due or being contested in good faith by appropriate
proceedings; 

 

(4)                                  Liens for
taxes, assessments or other governmental charges not yet subject to penalties
for non-payment or which are being contested in good faith by appropriate
proceedings provided appropriate reserves required pursuant to GAAP have been
made in respect thereof; 

 

(5)                                  Liens in
favor of issuers of surety or performance bonds or letters of credit or bankers’
acceptances issued pursuant to the request of and for the account of such
Person in the ordinary course of its business; provided,
however, that the reimbursement
obligations with respect to such letters of credit do not constitute
Indebtedness;

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

(b)                                 such Liens
are created within 180 days of construction or acquisition of such assets or
property and do not encumber any other assets or property of the Company or any
Restricted Subsidiary other than (i) such assets or property and assets
affixed or appurtenant thereto and (ii) the Capital Stock of the obligor
of the Project Finance Indebtedness; provided that
such obligor does not own any assets other than the assets financed by such
Project Finance Indebtedness;

 

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

 

(12)                            Liens
arising from Uniform Commercial Code financing statement filings filed on
a precautionary basis in respect of operating leases entered into by the
Company and its Restricted Subsidiaries that do not constitute Indebtedness;

 

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

 

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

 

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

 

26

 

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

 

(16)                            Liens
securing Indebtedness or other obligations of a Restricted Subsidiary owing to
the Company or another Restricted Subsidiary;

 

(17)                            Liens
securing the Securities and Subsidiary Guarantees; 

 

(18)                            Liens
securing Refinancing Indebtedness Incurred to refinance, refund, replace,
amend, extend or modify, as a whole or in part, Indebtedness that was
previously so secured pursuant to clauses (10), (13), (14), (15) and (17), provided that (x) any such Lien is limited to all or part of
the same property or assets (plus improvements, accessions, proceeds or
dividends or distributions in respect thereof) that secured (or, under the
written arrangements under which the original Lien arose, could secure) the
Indebtedness being refinanced or is in respect of property that is the security
for a Permitted Lien hereunder; and (y) the Indebtedness secured by such Lien
at such time is not increased to any amount greater than the sum of (A) the
outstanding principal amount or, if greater, committed amount of the
Indebtedness described under clauses (10), (13), (14), (15) and (17) at the
time the original Lien became a Permitted Lien hereunder, and (B) an
amount necessary to pay any fees and expenses, including premiums, related to
such refinancing, refunding, replacement, amendment, extension, or
modification;

 

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

 

(20)                            Liens under
industrial revenue, municipal or similar bonds; 

 

(21)                            Liens
securing Indebtedness (other than Subordinated Obligations and Guarantor
Subordinated Obligations) in an aggregate principal amount outstanding at any
one time not to exceed $250.0 million;

 

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

 

(23)                            Permitted
Counterparty Liens; and

 

(24)                            Liens
securing obligations under the Escrow Agreement.

 

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

 

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

 

27

 

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

 

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

 

 “PPA” means:

 

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

 

(a)                                   a third
party purchaser whose long-term senior unsecured debt is rated no less than
Baa3 by Moody’s Investors Service, Inc. and BBB- by Standard & Poor’s
Ratings Group, Inc. on the date the relevant transaction is entered into
by the Company or such Restricted Subsidiary; or

 

(b)                                  an Affiliate
of the Company, so long as such Affiliate has executed a valid and binding
agreement with a third party purchaser whose long-term senior unsecured debt is
rated no less than Baa3 by Moody’s Investors Service, Inc. and BBB- by
Standard & Poor’s Ratings Group, Inc. on the date the relevant
transaction is entered into by the Company or such Restricted Subsidiary with substantially
the same terms (other than any pricing spread) as the Affiliate’s agreement
with the Company or such Restricted Subsidiary;

 

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

 

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

 

(a)                                   fully
supported by available energy or capacity of the Company and its Restricted
Subsidiaries; and 

 

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

 

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

 

28

 

project (including, without limitation,
insurance, contracts and shares or other rights of ownership in the entity(ies)
which own the relevant assets or project) and other assets ancillary thereto
but without recourse to any other asset or otherwise to the Company or a
Restricted Subsidiary; provided
that recourse shall not be deemed to exist by reason of normal and customary
sponsor support arrangements, including the pledge of the Capital Stock of such
person. 

 

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

 

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

 

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

 

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

 

 “Refinancing Indebtedness” means Indebtedness
that is Incurred to refund, refinance, replace, exchange, renew, repay or
extend (including pursuant to any defeasance or discharge mechanism)
(collectively, “refinance,” “refinances,” and “refinanced” shall have a
correlative meaning) any Indebtedness existing on the date of this Indenture or
Incurred in compliance with this Indenture (including Indebtedness of the
Company that refinances Indebtedness of any Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary that refinances Indebtedness of
another Restricted Subsidiary) including Indebtedness that refinances
Refinancing Indebtedness, provided, however,
that:

 

(1)                                if the
Stated Maturity of the Indebtedness being refinanced is earlier than the Stated
Maturity of the Securities, the Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness being refinanced or (b) if
the Stated Maturity of the Indebtedness being refinanced is later than the
Stated Maturity of the Securities, the Refinancing Indebtedness has a Stated
Maturity at least 91 days later than the Stated Maturity of the Securities; 

 

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

 

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

 

29

 

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

 

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

 

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

 

“Regulation S” means Regulation S under the
Securities Act.

 

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

 

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

 

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

 

“Restricted Securities Legend” means the Private
Placement Legend set forth in Section 2.1(d)(A) or the
Regulation S Legend set forth in Section 2.1(d)(B), as
applicable.

 

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

 

“Rule 144A” means Rule 144A under the
Securities Act. 

 

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

 

“SEC” means the United States Securities and
Exchange Commission.

 

30

 

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

 

“Securities Act” means the Securities Act of
1933, as amended, and the rules and regulations of the SEC promulgated
thereunder.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Subsidiary Guarantee” means, individually, any
Guarantee of payment of the Securities and Exchange Securities issued in an
Exchange Offer by a Subsidiary Guarantor pursuant to the terms of this
Indenture and any supplemental indenture thereto (which shall be substantially
in

 

31

 

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

 

“Subsidiary Guarantor” means each Restricted
Subsidiary in existence on the Emergence Date that provides a Subsidiary
Guarantee on the Emergence Date and any other Restricted Subsidiary that
provides a Subsidiary Guarantee in accordance with this Indenture; provided that upon release or discharge of
such Person from its Guarantee in accordance with this Indenture, such Person
ceases to be a Subsidiary Guarantor; provided,
however, that none of MET, MIRMA
nor any subsidiary of MIRMA shall be a Subsidiary Guarantor.

 

“Total Assets” means the total amount of all
assets of the Company and the Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP as shown on the most recent balance
sheet of the Company.

 

“Trust Officer” shall mean, when used with
respect to the Trustee, any officer within the corporate trust department of
the Trustee, including any vice president, assistant vice president, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers or to whom any corporate trust matter is referred
because of such person’s knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.

 

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

 

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

 

“Unrestricted Subsidiary”
means:

 

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

 

(2)                                any
Subsidiary of the Company that at the time of determination shall be designated
an Unrestricted Subsidiary by the Board of Directors of the Company in the
manner provided below; and

 

(3)                                any
Subsidiary of an Unrestricted Subsidiary.

 

32

 

The Board of Directors of the
Company may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary or a Person becoming a Subsidiary through
merger or consolidation or Investment therein) to be an Unrestricted Subsidiary
only if: 

 

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

 

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

 

(3)                                such
designation and the Investment of the Company in such Subsidiary complies with Section 3.3;  provided that
on the Emergence Date, the New York Unrestricted Subsidiaries shall
automatically be deemed Unrestricted Subsidiaries without complying with this
clause (3) so long as no further Investments in such Persons are made
after the Issue Date other than in compliance with Section 3.3;

 

(4)                                such
Subsidiary is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation: 

 

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

 

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

 

(5)                                on the date
such Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary is
not a party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary with terms substantially less favorable to
the Company than those that might have been obtained from Persons who are not
Affiliates of the Company.

 

Any such designation by the Board of Directors
of the Company shall be evidenced to the Trustee by filing with the Trustee a
resolution of the Board of Directors of the Company giving effect to such
designation and an Officers’ Certificate certifying that such designation
complies with the foregoing conditions. If, at any time, any Unrestricted
Subsidiary would fail to meet the foregoing requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this Indenture and any Indebtedness of such Subsidiary shall be
deemed to be Incurred as of such date. 

 

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

 

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

 

33

 

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

 

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

 

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

 

SECTION 1.2.  Other Definitions.

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  “Acceptable Commitment”

  	
   

  	
  3.5(3)(b)

  
	
  “Additional Restricted Securities”

  	
   

  	
  2.1(b)

  
	
  “Adjusted Net Income”

  	
   

  	
  3.3(c)(i)

  
	
  “Affiliate Transaction”

  	
   

  	
  3.8

  
	
  “Agent”

  	
   

  	
  3.14

  
	
  “Agent Members”

  	
   

  	
  2.1(e)(iii)

  
	
  “Asset Disposition Offer”

  	
   

  	
  3.5

  
	
  “Asset Disposition Offer Amount”

  	
   

  	
  3.5

  
	
  “Asset Disposition Offer Period”

  	
   

  	
  3.5

  
	
  “Asset Disposition Purchase Date”

  	
   

  	
  3.5

  
	
  “Authenticating Agent”

  	
   

  	
  2.2

  
	
  “Change of Control Offer”

  	
   

  	
  3.11

  
	
  “Change of Control Payment”

  	
   

  	
  3.11

  

 

34

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  “Change of Control Payment Date”

  	
   

  	
  3.11

  
	
  “covenant defeasance option”

  	
   

  	
  8.1(a)

  
	
  “Covenant Suspension Event”

  	
   

  	
  3.22

  
	
  “cross acceleration provision”

  	
   

  	
  6.1(6)(b)

  
	
  “Defaulted Interest”

  	
   

  	
  2.13

  
	
  “Event of Default”

  	
   

  	
  6.1

  
	
  “Excess Proceeds”

  	
   

  	
  3.5

  
	
  “Exchange Global Note”

  	
   

  	
  2.1(b)

  
	
  “Global Securities”

  	
   

  	
  2.1(b)

  
	
  “Guarantor Obligations”

  	
   

  	
  10.1

  
	
  “Institutional Accredited Investor Global Note”

  	
   

  	
  2.1(b)

  
	
  “Institutional Accredited Investor Notes”

  	
   

  	
  2.1(b)

  
	
  “Issuers’ Order”

  	
   

  	
  2.2

  
	
  “judgment default provision”

  	
   

  	
  6.1(8)

  
	
  “legal defeasance option”

  	
   

  	
  8.1(a)

  
	
  “Merger”

  	
   

  	
  2.2

  
	
  “Pari Passu Notes”

  	
   

  	
  3.5

  
	
  “payment default”

  	
   

  	
  6.1(6)(a)

  
	
  “Paying Agent”

  	
   

  	
  2.3

  
	
  “Private Placement Legend”

  	
   

  	
  2.1(d)(A)

  
	
  “protected purchaser”

  	
   

  	
  2.9

  
	
  “Registrar”

  	
   

  	
  2.3

  
	
  “Regulation S Global Note”

  	
   

  	
  2.1(b)

  

 

35

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  “Regulation S Legend”

  	
   

  	
  2.1(d)(B)

  
	
  “Regulation S Notes”

  	
   

  	
  2.1(b)

  
	
  “Resale Restriction Termination Date”

  	
   

  	
  2.6(a)

  
	
  “Restricted Payment”

  	
   

  	
  3.3

  
	
  “Restricted Securities”

  	
   

  	
  2.1(a)

  
	
  “Reversion Date”

  	
   

  	
  3.22

  
	
  “Rule 144A Global Note”

  	
   

  	
  2.1(b)

  
	
  “Rule 144A Notes”

  	
   

  	
  2.1(b)

  
	
  “Shelf Registration Statement”

  	
   

  	
  Exhibit A

  
	
  “Special Interest Payment Date”

  	
   

  	
  2.13(a)

  
	
  “Special Record Date”

  	
   

  	
  2.13(a)

  
	
  “Special Redemption”

  	
   

  	
  5.9

  
	
  “Special Redemption Date”

  	
   

  	
  5.9

  
	
  “Successor Company”

  	
   

  	
  4.1

  
	
  “Suspended Covenants”

  	
   

  	
  3.22

  
	
  “Suspension Period”

  	
   

  	
  3.22

  

 

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

 

“Commission” means the SEC.

 

“indenture
securities” means the Securities.

 

“indenture
security holder” means a Holder.

 

“indenture to
be qualified” means this Indenture.

 

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

 

36

 

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

 

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

 

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)                  “including”
means including without limitation;

 

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

 

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

 

(6)                  the principal
amount of any Preferred Stock shall be (i) the maximum liquidation value
of such Preferred Stock or (ii) the maximum mandatory redemption or
mandatory repurchase price with respect to such Preferred Stock, whichever is
greater; 

 

(7)                  all amounts
expressed in this Indenture or in any of the Securities in terms of money refer
to the lawful currency of the United States of America; and

 

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

 

ARTICLE II

 

THE SECURITIES

 

SECTION 2.1.  Form, Dating and Terms.

 

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

 

37

 

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

 

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

 

With
respect to any Additional Securities, the Issuers shall set forth in (a) Board
Resolutions of the Issuers and (b) (i) an Officers’ Certificate or (ii) one
or more indentures supplemental hereto, the following information:

 

(1)                the aggregate
principal amount of such Additional Securities to be authenticated and
delivered pursuant to this Indenture which may be in an unlimited
aggregate principal amount;

 

(2)                the issue price
and the issue date of such Additional Securities, including the date from which
interest shall accrue; and

 

(3)                whether such
Additional Securities shall be Restricted Securities issued in the form of
Exhibit A hereto and/or shall be issued in the form of Exhibit B
hereto.

 

The
Initial Securities, the Additional Securities and the Exchange Securities shall
be considered collectively as a single class for all purposes of this
Indenture. Holders of the Initial Securities, the Additional Securities and the
Exchange Securities will vote and consent together on all matters to which such
Holders are entitled to vote or consent as one class, and none of the Holders
of the Initial Securities, the Additional Securities or the Exchange Securities
shall have the right to vote or consent as a separate class on any matter
to which such Holders are entitled to vote or consent.

 

If any
of the terms of any Additional Securities are established by action taken
pursuant to Board Resolutions of the Issuers, a copies of appropriate records
of such actions shall be certified by the Secretary or any Assistant Secretary
of the applicable Issuer and delivered to the Trustee at or prior to the
delivery of the Officers’ Certificate or the indenture supplemental hereto
setting forth the terms of the Additional Securities.

 

(b)  The
Initial Securities are being offered and sold by the Issuers pursuant to a
Purchase Agreement, dated December 20, 2005, among the Issuers, the
Subsidiary Guarantors and the Initial Purchasers. The Initial Securities and
any Additional Securities (if issued as Restricted Securities) (the “Additional
Restricted Securities”) will be resold initially only to (A) QIBs in
reliance on Rule 144A and (B) Non-U.S. Persons in reliance on
Regulation S. Such Initial Securities and Additional Restricted Securities
may thereafter be transferred to, among others, QIBs, purchasers in
reliance on Regulation S and IAIs in accordance with Rule 501 of the
Securities Act, in each case, in accordance with the procedures described
herein.

 

38

 

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

 

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

 

Initial
Securities and Additional Securities offered and sold outside the United States
of America (the “Regulation S Notes”) in reliance on
Regulation S shall be issued in the form of a permanent global
Security, without interest coupons, substantially in the form of Exhibit A
including appropriate legends as set forth under Section 2.1(d) (the
“Regulation S Global Note”). The Regulation S Global Note will
be deposited upon issuance with the Trustee, as custodian for DTC, duly
executed by the Issuers and, upon receipt by Trustee of the Issuers’ Order,
authenticated by the Trustee as hereinafter provided. During the Restricted
Period, interests in the Regulation S Global Note may be transferred
to Non-U.S. Persons pursuant to Regulation S or to QIBs and IAIs in accordance
with this Indenture. The Regulation S Global Note may be represented
by more than one certificate, if so required by DTC’s rules regarding the
maximum principal amount to be represented by a single certificate. The
aggregate principal amount of the Regulation S Global Note may from
time to time be increased or decreased by adjustments made on the Regulation S
Global Note and on the records of the Trustee, as custodian for DTC or its
nominee, as hereinafter provided.

 

Initial
Securities and Additional Securities resold to IAIs (the “Institutional
Accredited Investor Notes”) in the United States of America shall be issued
in the form of a permanent global Security, without interest coupons,
substantially in the form of Exhibit A including appropriate
legends as set forth under Section 2.1(d) (the “Institutional
Accredited Investor Global Note”) deposited with the Trustee, as custodian
for DTC, duly executed by the Issuers and, upon receipt by Trustee of the
Issuers’ Order, authenticated by the Trustee as hereinafter provided. The
Institutional Accredited Investor Global Note may be represented by more
than one certificate, if so required by DTC’s rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal amount of the Institutional Accredited Investor Global Note may from
time to time be increased or decreased by adjustments made on the Institutional
Accredited Investor Note and on the records of the Trustee, as custodian for
DTC or its nominee, as hereinafter provided.

 

Exchange
Securities exchanged for interests in the Rule 144A Notes, the Regulation S
Notes and the Institutional Accredited Investor Notes will be issued in the form of
a

 

39

 

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

 

The Rule 144A
Global Note, the Regulation S Global Note, the Institutional Accredited
Investor Global Note and the Exchange Global Note are sometimes collectively
herein referred to as the “Global Securities.”

 

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

 

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

 

(c)  Denominations.
The Securities shall be issuable only in fully registered form, without
interest coupons, and only in denominations of $1,000 and integral multiples in
excess thereof.

 

(d)  Restrictive
Legends. Unless and until (i) an Initial Security is sold under an
effective registration statement or (ii) an Initial Security is exchanged
for an Exchange Security in connection with an effective registration
statement, in each case pursuant to the Registration Rights Agreement or a
similar agreement,

 

40

 

(A)  the Rule 144A
Global Note and the Institutional Accredited Investor Global Note shall bear
the following legend (the “Private Placement Legend”) on the face
thereof:

 

THIS SECURITY
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE
HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR
WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS
TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON WHICH ANY OF THE ISSUERS OR ANY AFFILIATE OF ANY OF THE ISSUERS WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO
ANY OF THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT 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 THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO
AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL
ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, 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 ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE.

 

41

 

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

 

THIS SECURITY
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE
HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR
WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS
40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH ANY OF THE ISSUERS OR ANY AFFILIATE OF ANY OF THE ISSUERS WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO
ANY OF THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT 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 THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO
AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL
ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, 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 ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE. BY ITS ACQUISITION HEREOF, THE HOLDER
HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE
ACCOUNT OF A U.S. PERSON AND IS ACQUIRING

 

42

 

THIS SECURITY
IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT.

 

(C)  Each
Global Security, whether or not an Initial Security, shall bear the following
legend on the face thereof:

 

UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

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

 

(e)  Book-Entry
Provisions.

 

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

 

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

 

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

 

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

 

43

 

records the
date and a decrease in the principal amount of such Global Security in an
amount equal to the principal amount of the beneficial interest in the Global
Security to be transferred, and the Issuers shall execute, and the Trustee
shall, upon receipt by Trustee of the Issuers’ Order, authenticate and make
available for delivery, one or more Definitive Securities of like tenor and
amount.

 

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

 

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

 

(vii)  Any Holder of a Global Security shall, by acceptance of
such Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system
maintained by (a) the Holder of such Global Security (or its agent) or (b) any
Holder of a beneficial interest in such Global Security, and that ownership of
a beneficial interest in such Global Security shall be required to be reflected
in a book entry.

 

(f)  Definitive
Securities. Except as provided below, owners of beneficial interests in
Global Securities will not be entitled to receive Definitive Securities. If
required to do so pursuant to any applicable law or regulation, beneficial
owners may obtain Definitive Securities in exchange for their beneficial
interests in a Global Security upon written request in accordance with DTC’s
and the Registrar’s procedures. In addition, Definitive Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a Global Security if (A) DTC notifies the Issuers at any time that it
is unwilling or unable to continue as depositary for such Global Security or
DTC ceases to be a clearing agency registered under the Exchange Act, at a time
when DTC is required to be so registered in order to act as depositary, and in
each case a successor depositary is not appointed by the Issuers within
90 days of such notice or (B) the Issuers in its sole discretion
executes and delivers to the Trustee and Registrar an Officers’ Certificate
stating that such Global Security shall be so exchangeable or (C) an Event
of Default has occurred and is continuing and the Registrar has received a
request from DTC. In the event of the occurrence of any of the events specified
in clause (A), (B) or (C) of the preceding sentence, the Issuers
shall promptly make available to the Trustee a reasonable supply of Definitive
Securities in fully registered form without interest coupons.

 

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

 

44

 

 

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

 

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

 

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

 

A Security
shall not be valid until an authorized signatory of the Trustee manually
authenticates the Security. The signature of the Trustee on a Security shall be
conclusive evidence that such Security has been duly and validly authenticated
and issued under this Indenture. A Security shall be dated the date of its
authentication.

 

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

 

The Trustee may appoint
an agent (the “Authenticating Agent”) reasonably acceptable to the
Issuers to authenticate the Securities. Any such appointment shall be evidenced
by an instrument signed by a Trust Officer, a copy of which shall be furnished
to the Issuers. Unless limited by the terms of such appointment, any such
Authenticating Agent may authenticate Securities whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee includes
authentication by the Authenticating Agent. An Authenticating Agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.

 

In case the
Company, pursuant to Article IV, shall be consolidated or merged
with or into any other Person (which, for the avoidance of doubt, shall not
include the merger of Mirant North America Escrow, LLC with and into Mirant
North America, LLC (the “Merger”)) or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which

 

45

 

shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to Article IV,
any of the Securities authenticated or delivered prior to such consolidation,
merger, conveyance, transfer, lease or other disposition may, from time to
time, at the request of the successor Person, be exchanged for other Securities
executed in the name of the successor Person with such changes in phraseology
and form as may be appropriate, but otherwise in substance of like
tenor as the Securities surrendered for such exchange and of like principal
amount; and the Trustee, upon Issuers’ Order of the successor Person, shall
authenticate and make available for delivery Securities as specified in such
order for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section 2.2 in exchange or substitution for or upon
registration of transfer of any Securities, such successor Person, at the
option of the Holders but without expense to them, shall provide for the
exchange of all Securities at the time outstanding for Securities authenticated
and delivered in such new name.

 

SECTION 2.3.  Registrar and Paying Agent. The Issuers
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the “Registrar”) and an office
or agency where Securities may be presented for payment (the “Paying
Agent”). The Issuers shall cause each of the Registrar and the Paying Agent
to maintain an office or agency in New York, New York. The Registrar shall keep
a register of the Securities and of their transfer and exchange. The Issuers may have
one or more co-registrars and one or more additional paying agents. The term “Paying
Agent” includes any additional paying agent, and the term “Registrar” includes
any co-registrar.

 

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

 

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

 

46

 

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

 

SECTION 2.5.  Holder Lists. The Registrar or the
Trustee (if the Trustee is also acting as the Registrar) shall preserve in as
current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Holders and shall otherwise comply with TIA
§ 312(a). If the Trustee is not the Registrar, or to the extent otherwise
required under the TIA, the Issuers, on their own behalf and on behalf of each
of the Subsidiary Guarantors, if any, shall furnish or cause the Registrar to
furnish to the Trustee, in writing at least five 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, and the Issuers and the
Subsidiary Guarantors shall otherwise comply with TIA § 312(a).

 

SECTION 2.6.  Transfer and Exchange.

 

(a)  The
following provisions shall apply with respect to any proposed transfer of a Rule 144A
Note or an Institutional Accredited Investor Note prior to the date which is
two years after the later of the date of its original issue and the last date
on which any of the Issuers or any Affiliate of any of the Issuers was the
owner of such Securities (or any predecessor thereto) (the “Resale
Restriction Termination Date”):

 

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

 

47

 

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

 

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

 

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

 

After the Resale Restriction Termination
Date, interests in a Rule 144A Note or an Institutional Accredited
Investor Note may be transferred in accordance with applicable law without
requiring the certifications set forth under Section 2.7 or 2.8
or any additional certification.

 

(b)  The
following provisions shall apply with respect to any proposed transfer of a
Regulation S Note prior to the expiration of the Restricted Period:

 

(i)  a
transfer of a Regulation S Note or a beneficial interest therein to a QIB
shall be made upon the representation of the transferee, in the form of
assignment as set forth on the reverse of the Security, that it is purchasing
the Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a “qualified
institutional buyer” within the meaning of Rule 144A, and is aware that
the sale to it is being made in reliance on Rule 144A and acknowledges
that it has received such information regarding the Issuers as the undersigned
has requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A;

 

(ii)  a
transfer of a Regulation S Note or a beneficial interest therein to an IAI
shall be made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth under Section 2.7 from the
proposed transferee and, if requested by the Issuers or the Trustee, the
delivery of an opinion of counsel, certification and/or other information
satisfactory to each of them; and

 

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

 

48

 

After the
expiration of the Restricted Period, interests in the Regulation S Note may be
transferred in accordance with applicable law without requiring the
certifications set forth under Section 2.7 or 2.8 or any
additional certification.

 

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

 

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

 

(e)  Obligations
with Respect to Transfers and Exchanges of Securities.

 

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

 

(ii)  No
service charge shall be made to a Holder for any registration of transfer or
exchange, but the Issuers may require the Holder to pay a sum sufficient
to cover any transfer tax, assessment or similar governmental charge payable in
connection therewith (other than any such transfer taxes, assessments or
similar governmental charges payable upon exchange or transfer pursuant to Section 9.5).

 

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

 

(iv)  Prior
to the due presentation for registration of transfer of any Security, the
Issuers, the Trustee, the Paying Agent or the Registrar may deem and treat
the person in whose name a Security is registered as the absolute owner of such
Security for the

 

49

 

purpose of receiving payment of principal of,
premium, if any, and interest on such Security and for all other purposes
whatsoever, including the transfer or exchange of such Security, whether or not
such Security is overdue, and none of the Issuers, the Trustee, the Paying
Agent or the Registrar shall be affected by notice to the contrary.

 

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

 

(f)  No
Obligation of the Trustee.

 

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

 

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

 

50

 

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

 

[Date]

 

Law Debenture Trust Company of New York

767 Third Avenue, 31st Floor

New York, NY 10017

 

Attention:       [Corporate Trust Administration]

 

Re:                                         Mirant
North America Escrow, LLC

Mirant North
America, LLC

MNA Finance Corp.

 

7.375% Senior Notes, Series A, due 2013

 

Ladies and
Gentlemen:

 

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

 

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

 

	
  Name:

  	
   

  	
   

  
	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  
	
  Taxpayer ID Number:

  	
   

  	
   

  
					

 

The
undersigned represents and warrants to you that:

 

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

 

2.                                       We
understand that the Securities have not been registered under the Securities
Act and, unless so registered, may not be sold except as permitted in the
following sentence. We agree on our own behalf and on behalf of any investor
account for which we are

 

51

 

purchasing
Securities to offer, sell or otherwise transfer such Securities prior to the
date that is two years after the later of the date of original issue and the
last date on which any of the Issuers or any affiliate of any of the Issuers
was the owner of such Securities (or any predecessor thereto) (the “Resale
Restriction Termination Date”) only (a) to any of the Issuers, (b) pursuant
to a registration statement that has been declared effective under the
Securities Act, (c) in a transaction complying with the requirements of Rule 144A
under the Securities Act, to a person we reasonably believe is a “qualified
institutional buyer” under Rule 144A under the Securities Act (a “QIB”)
that is purchasing for its own account or for the account of a QIB and to whom
notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant
to offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional “accredited
investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under
the Securities Act that is purchasing for its own account or for the account of
such an institutional “accredited investor,” in each case in a minimum
principal amount of Securities of $250,000, 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, subject in
each of the foregoing cases to any requirement of law that the disposition of
our property or the property of such investor account or accounts be at all times
within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (e) above
prior to the Resale Restriction Termination Date, the transferor shall deliver
a letter from the transferee substantially in the form of this letter to
the Issuers and Law Debenture Trust Company of New York, as Trustee (the “Trustee”),
which shall provide, among other things, that the transferee is an
institutional “accredited investor” (within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act) and that it is acquiring
such Securities for investment purposes and not for distribution in violation
of the Securities Act. Each purchaser acknowledges that the Issuers and the
Trustee reserve the right prior to any offer, sale or other transfer prior to
the Resale Termination Date of the Securities pursuant to clause (d), (e) or
(f) above to require the delivery of an opinion of counsel, certifications
and/or other information satisfactory to the Issuers and the Trustee.

 

The Trustee
and the Issuers are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

 

	
   

  	
  TRANSFEREE:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   

  
					

 

cc:                                 Mirant
North America Escrow, LLC

Mirant North America, LLC

MNA Finance Corp.

 

52

 

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

 

[Date]

 

Law Debenture Trust Company of New York

767 Third Avenue, 31st Floor

New York, NY 10017

 

Attention:       [Corporate Trust Administration]

 

Re:                                         Mirant
North America Escrow, LLC

Mirant North America, LLC

MNA Finance Corp.

 

7.375% Senior
Notes, Series A, due 2013

 

Ladies and
Gentlemen:

 

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

 

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

 

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

 

(c)                                  no
directed selling efforts have been made in the United States in contravention
of the requirements of Rule 903(a)(2) or Rule 904(a)(2) of
Regulation S, as applicable; and

 

(d)                                 the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act.

 

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

 

53

 

Law Debenture
Trust Company of New York, as Trustee, and the Issuers are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal proceedings
or official inquiry with respect to the matters covered hereby. Terms used in
this certificate have the meanings set forth in Regulation S.

 

	
  Very truly yours,

  
	
   

  
	
  [Name of Transferor]

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
  Authorized Signature

  	
   

  

 

cc:                                 Mirant
North America Escrow, LLC

Mirant North America, LLC

MNA Finance Corp.

 

SECTION 2.9.  Mutilated, Destroyed, Lost or Stolen
Securities. If a mutilated Security is surrendered to the Registrar or if
the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Issuers shall issue and the Trustee shall, upon receipt
by Trustee of the Issuers’ Order, authenticate a replacement Security if the
requirements of Section 8-405 of the Uniform Commercial Code are met,
such that the Holder (a) notifies the Issuers or the Trustee within a
reasonable time after such Holder has notice of such loss, destruction or
wrongful taking and the Registrar has not registered a transfer prior to
receiving such notification, (b) makes such request to the Issuers or the
Trustee prior to the Security being acquired by a protected purchaser as
defined in Section 8-303 of the Uniform Commercial Code (a “protected
purchaser”) and (c) satisfies any other reasonable requirements of the
Trustee. If required by the Trustee or the Issuers, such Holder shall furnish
an indemnity bond sufficient in the judgment of the Issuers and the Trustee to
protect the Issuers, the Trustee, the Paying Agent and the Registrar from any
loss which any of them may suffer if a Security is replaced, and, in the
absence of notice to the Issuers, any Subsidiary Guarantor or the Trustee that
such Security has been acquired by a bona fide purchaser, the Issuers shall
execute and, upon receipt of a Issuers’ Order, the Trustee shall authenticate
and make available for delivery, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.

 

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

 

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

 

54

 

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

 

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

 

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

 

If a Security
is replaced pursuant to Section 2.9 (other than a mutilated
Security surrendered for replacement), it ceases to be outstanding and interest
on it ceases to accrue unless the Trustee and the Issuers receive written proof
satisfactory to them that the replaced Security is held by a protected
purchaser. A mutilated Security ceases to be outstanding upon surrender of such
Security and replacement pursuant to Section 2.9.

 

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

 

SECTION 2.11.  Temporary Securities. In the event that
Definitive Securities are to be issued under the terms of this Indenture, until
such Definitive Securities are ready for delivery, the Issuers may prepare
and the Trustee shall, upon receipt by Trustee of the Issuers’ Order,
authenticate temporary Securities. Temporary Securities shall be substantially
in the form, and shall carry all rights, of Definitive Securities but may have
variations that the Issuers consider appropriate for temporary Securities. Without
unreasonable delay, the Issuers shall prepare and the Trustee shall, upon
receipt by Trustee of the Issuers’ Order, authenticate Definitive Securities. After
the preparation of Definitive Securities, the temporary Securities

 

55

 

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

 

SECTION 2.12.  Cancellation. The Issuers at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else
shall cancel all Securities surrendered for registration of transfer, exchange,
payment or cancellation and dispose of such Securities in accordance with its
internal policies and customary procedures and shall deliver canceled Securities
to the Issuers pursuant to written direction by an Officer of each of Escrow
LLC, MNA and MNA Finance Corp. If the Issuers or any Subsidiary Guarantor
acquires any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.12. The Issuers may not issue new
Securities to replace Securities they have paid or delivered to the Trustee for
cancellation for any reason other than in connection with a transfer or
exchange.

 

At
such time as all beneficial interests in a Global Security have either been
exchanged for Definitive Securities, transferred, redeemed, repurchased or
canceled, such Global Security shall be returned by DTC to the Trustee for
cancellation or retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for
Definitive Securities, transferred in exchange for an interest in another
Global Security, redeemed, repurchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such
reduction.

 

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

 

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

 

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

 

56

 

registered at the close of business on a
Special Record Date (as defined below) for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Issuers shall
notify the Trustee in writing of the amount of Defaulted Interest proposed to
be paid on each Security and the date (not less than 30 days after such
notice) of the proposed payment (the “Special Interest Payment Date”),
and at the same time the Issuers shall deposit with the Paying Agent (with
notice to the Trustee) an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a record date (the “Special Record
Date”) for the payment of such Defaulted Interest, which date shall be not
more than 15 days and not less than 10 days prior to the Special
Interest Payment Date and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Issuers of such Special Record Date and, in the name and at the
expense of the Issuers, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date and Special Interest Payment
Date therefor to be given in the manner provided for under Section 11.2
not less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date and
Special Interest Payment Date therefor having been so given, such Defaulted
Interest shall be paid on the Special Interest Payment Date to the Persons in
whose names the Securities (or their respective predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (b).

 

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

 

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

 

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

 

SECTION 2.15.  CUSIP, Common Code and ISIN Numbers. The
Issuers in issuing the Securities may use “CUSIP,” “Common Code” or “ISIN”
numbers and, if so, the Trustee shall use “CUSIP,” “Common Code” or “ISIN”
numbers in notices of redemption or purchase as a convenience to Holders; provided, however, that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption or
purchase and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption or purchase shall
not be affected by any defect in or omission of such CUSIP, Common Code or ISIN

 

57

 

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

 

ARTICLE III

 

COVENANTS

 

SECTION 3.1.  Payment of Securities. The Issuers
shall promptly pay the principal of, premium, if any, and interest on the
Securities on the dates and in the manner provided in the Securities and in
this Indenture. Principal, premium, if any, and interest shall be considered
paid on the date due if on such date the Trustee or the Paying Agent holds in
accordance with this Indenture immediately available funds sufficient to pay
all principal, premium, if any, and interest then due and the Trustee or the
Paying Agent, as the case may be, is not prohibited from paying such money
to the Holders on that date pursuant to the terms of this Indenture.

 

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

 

The Issuers
and any Subsidiary Guarantors will pay any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise in any jurisdiction from the execution, delivery, enforcement
or registration of the Securities, the Subsidiary Guarantees (if any), this
Indenture or any other document or instrument in relation thereof, or the
receipt of any payments with respect to the Securities or any Subsidiary
Guarantees, excluding such taxes, charges or similar levies imposed by any
jurisdiction outside of the United States, the jurisdiction of incorporation of
any successor of any of the Issuers or any Subsidiary Guarantor or any
jurisdiction in which a Paying Agent is located, other than those resulting
from, or required to be paid in connection with, the enforcement of the Securities,
the Subsidiary Guarantees or any other such document or instrument following
the occurrence of any Event of Default with respect to the Securities. The
Issuers or the Subsidiary Guarantors, if any, will agree to indemnify the
Holders for any such taxes paid by such Holders.

 

Notwithstanding
anything to the contrary contained in this Indenture, the Company or any
Subsidiary Guarantor may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal, premium or interest payments hereunder.

 

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

 

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

 

58

 

(1)                                  Indebtedness
of the Company and/or the Subsidiary Guarantors Incurred pursuant to a Credit
Facility in an aggregate amount up to $1,500.0 million less the aggregate
principal amount of all principal repayments with the proceeds from Asset
Dispositions utilized in accordance with Section 3.5(a) that
permanently reduce the commitments thereunder and Guarantees of Subsidiary
Guarantors in respect of the Indebtedness Incurred pursuant to a Credit
Facility;

 

(2)                                  Guarantees
by (x) the Company or Subsidiary Guarantors of Indebtedness Incurred by the
Company or a Subsidiary Guarantor in accordance with the provisions of this
Indenture and (y) Non-Guarantor Restricted Subsidiaries of Indebtedness
Incurred by Non-Guarantor Restricted Subsidiaries in accordance with the
provisions of this Indenture; provided that
in the event such Indebtedness that is being Guaranteed is a Subordinated
Obligation or a Guarantor Subordinated Obligation, then the related Guarantee
shall be subordinated in right of payment to the Securities or the Subsidiary
Guarantee, as the case may be;

 

(3)                                  Indebtedness
of the Company owing to and held by any Restricted Subsidiary or Indebtedness
of a Restricted Subsidiary owing to and held by the Company or any other
Restricted Subsidiary; provided, however,

 

(a)                                    if
the Company is the obligor on such Indebtedness, such Indebtedness is expressly
subordinated in right of payment to the Securities; 

 

(b)                                   if
a Subsidiary Guarantor is the obligor on such Indebtedness and neither of the
Company nor a Subsidiary Guarantor is the obligee, such Indebtedness is
subordinated in right of payment to the Subsidiary Guarantees of such Subsidiary
Guarantor; and

 

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

 

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

 

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

 

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

 

59

 

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

 

(5)                                  Indebtedness
of a Restricted Subsidiary Incurred and outstanding on the date on which such
Restricted Subsidiary was acquired by, or merged into, the Company or any
Restricted Subsidiary; provided, that
such Indebtedness is not Incurred in contemplation of such acquisition or
merger; provided  further,
that at the time such Restricted Subsidiary is acquired by the Company or a
Restricted Subsidiary after giving effect to the Incurrence of such
Indebtedness pursuant to this clause (5), either (x) the Consolidated Coverage
Ratio for the Company and its Restricted Subsidiaries will be greater than such
ratio as calculated immediately prior to such Incurrence or (y) the Company
would have been able to Incur $1.00 of additional Indebtedness pursuant to the
first paragraph of this Section 3.2;

 

(6)                                  Indebtedness
under Hedging Obligations;

 

(7)                                  the
Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
represented by Capitalized Lease Obligations, mortgage financings or purchase
money obligations with respect to assets other than Capital Stock or other
Investments (other than Capital Stock of a Person being acquired for the
primary purpose of acquiring assets owned by such Person), in each case
Incurred for the purpose of financing all or any part of the purchase
price or cost of construction or improvements of property used in the business
of the Company or such Restricted Subsidiary, and Attributable Indebtedness, in
an aggregate principal amount, including all Refinancing Indebtedness Incurred
to refund, defease, renew, extend, refinance or replace any Indebtedness
Incurred pursuant to this clause (7), not to exceed at any time outstanding the
greater of (x) $200.0 million and (y) 5% of Total Assets;  

 

(8)                                  Project
Finance Indebtedness;

 

(9)                                  Indebtedness
Incurred to finance environmental capital expenditures and other capital
expenditures made to comply with Law and, with respect to MIRMA and its
Restricted Subsidiaries, to finance Required Improvements (as such term is used
in the Facility Lease Documents in effect on the Emergence Date);

 

(10)                            Indebtedness
Incurred in respect of workers’ compensation claims, self-insurance
obligations, performance, surety and similar bonds and completion guarantees
provided by the Company or a Restricted Subsidiary in the ordinary course of
business;

 

60

 

(11)                            Indebtedness
arising from agreements of the Company or a Restricted Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations, in each
case, Incurred or assumed in connection with the disposition or acquisition of
any business, assets or Capital Stock of a Restricted Subsidiary, provided that the maximum aggregate liability in respect of
all such Indebtedness in respect of a disposition shall at no time exceed the
gross proceeds (including the fair market value of non-cash proceeds determined
as set forth in the last paragraph of this covenant at the time such non-cash
proceeds are received) actually received by the Company and its Restricted Subsidiaries
in connection with such disposition; 

 

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

 

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

 

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

 

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

 

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

 

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

 

61

 

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

 

(4)                                  Indebtedness
permitted by this Section 3.2 need not be permitted solely by
reference to one provision permitting such Indebtedness but may be
permitted in part by one such provision and in part by one or more
other provisions of this Section 3.2 permitting such Indebtedness;
and

 

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

 

Accrual of interest, accrual of dividends, the
accretion of accreted value, the payment of interest in the form of
additional Indebtedness and the payment of dividends in the form of
additional shares of Preferred Stock or Disqualified Stock will not be deemed
to be an Incurrence of Indebtedness for purposes of this Section 3.2.
The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof in the case of any Indebtedness issued with original
issue discount and (ii) the principal amount or liquidation preference
thereof in the case of any other Indebtedness.

 

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

 

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

 

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

 

62

 

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

 

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

 

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

 

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

 

(a)         dividends or
distributions payable in Capital Stock of the Company (other than Disqualified
Stock); and

 

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

 

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

 

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

 

(4)                               make
any Restricted Investment in any Person;

 

63

 

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

 

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

 

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

 

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

 

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

 

(ii)                                  100%
of the aggregate Net Cash Proceeds and the fair market value (as determined in
good faith by the Board of Directors of the Company) of Qualified Property
received by the Company from the issue or sale of its Capital Stock (other than
Disqualified Stock) or other capital contributions subsequent to the Emergence
Date (other than (i) Excluded Contributions, (ii) Net Cash Proceeds
received from an issuance or sale of such Capital Stock to a Subsidiary of the
Company or an employee stock ownership plan, option plan or similar trust to
the extent such sale to an employee stock ownership plan or similar trust is
financed by loans from or Guaranteed by the Company or any Restricted
Subsidiary unless such loans have been repaid with cash on or prior to the date
of determination and (iii) contributions to the Company and its Restricted
Subsidiaries in connection with the Plan of Reorganization) excluding in any
event Net Cash Proceeds received by the Company from the issue and sale of its
Capital Stock or capital contributions to the extent applied to redeem
Securities in compliance with the provisions of

 

64

 

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

 

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

 

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

 

(A)                              the
sale or other disposition (other than to the Company or a Restricted Subsidiary
or to an employee stock ownership plan, option plan or similar trust
established by the Company or any of its Subsidiaries) of Restricted
Investments made by the Company or its Restricted Subsidiaries and repurchases
and redemptions of such Restricted Investments from the Company or its
Restricted Subsidiaries and repayments of loans or advances which constitute
Restricted Investments by the Company or its Restricted Subsidiaries, or 

 

(B)                                the
sale (other than to the Company or a Restricted Subsidiary or to an employee
stock ownership plan, option plan or similar trust established by the Company
or any of its Subsidiaries) of the Capital Stock of an Unrestricted Subsidiary
or a distribution from an Unrestricted Subsidiary (other than in each case to
the extent the Investment in such Unrestricted Subsidiary was made pursuant to
clause (13) of the next succeeding paragraph or to the extent such Investment
constituted a Permitted Investment) or a dividend from an Unrestricted
Subsidiary plus;

 

(v)                                 in
the case of the redesignation of an Unrestricted Subsidiary (other than a New
York Unrestricted Subsidiary) as a Restricted Subsidiary, or the merger or
consolidation of an

 

65

 

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

 

The provisions
of the preceding paragraph will not prohibit:

 

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

 

(2)                                  any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
of Subordinated Obligations of the Company or Guarantor Subordinated
Obligations of any Subsidiary Guarantor made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Subordinated Obligations of
the Company or any purchase, repurchase, redemption, defeasance or other
acquisition or retirement of Guarantor Subordinated Obligations made by
exchange for or out of the proceeds of the substantially concurrent sale of
Guarantor Subordinated Obligations that, in each case, is permitted to be
Incurred pursuant to Section 3.2 and that in each case constitutes
Refinancing Indebtedness;

 

(3)                                  any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
of Disqualified Stock of the Company or a Restricted Subsidiary made by
exchange for or out of the proceeds of the

 

66

 

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

 

(4)                                  so
long as no Default or Event of Default has occurred and is continuing, any
purchase or redemption of Subordinated Obligations or Guarantor Subordinated
Obligations of a Subsidiary Guarantor from Net Available Cash to the extent
permitted under Section 3.5;

 

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

 

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

 

(a)                                (i) the
repurchase, redemption or other acquisition or retirement for value of any
Capital Stock of the Company or any Parent or any Restricted Subsidiary of the
Company held by any current or former officer, director or employee (or any
estate, heir or assigns of any such person) of the Parent or of the Company or
any of its Subsidiaries pursuant to any equity subscription agreement, stock
option agreement, severance agreement, shareholders’ agreement or similar
agreement or employee benefit plan or (ii) the cancellation of
Indebtedness owing to the Company or any of its Restricted Subsidiaries from
any current or former officer, director or employee (or any estate, heir or
assigns of any such person) of the Parent or of the Company or any of its
Subsidiaries in connection with a repurchase of Capital Stock of the Company or
any Parent or any Restricted Subsidiary of the Company; provided
that the aggregate price paid for the actions in clause (i) may not
exceed $1.0 million in any twelve-month period and $5.0 million in the
aggregate since the Issue Date; provided, further that (A) such amount in any calendar year may be
increased by the cash proceeds of “key man” life insurance policies received
by, or contributed to, the Company and its Restricted Subsidiaries after the
Issue Date less any amount previously applied to the making of Restricted
Payments pursuant to this clause (A) and (B) cancellation of
Indebtedness owing to the Company or any of its Restricted Subsidiaries from
employees, officers, directors and consultants (or any estate, heir or assigns
of any such person) of any Parent or the Company or any of its Subsidiaries in
connection with a repurchase of Capital Stock of the Company or any Parent or
any Restricted Subsidiary of the Company from such Persons shall be permitted
under this clause (a) as if it were a repurchase, redemption, acquisition
or retirement for value subject hereto; and

 

67

 

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

 

(7)                                  so
long as no Default or Event of Default has occurred and is continuing, the
declaration and payment of dividends to holders of any class or series of
Disqualified Stock of the Company or any Restricted Subsidiary or Preferred
Stock of any Non-Guarantor Restricted Subsidiary issued in accordance with the
terms of this Indenture to the extent such dividends are included in the
definition of “Consolidated Interest Expense”; 

 

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

 

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

 

(10)                            cash
dividends or loans to Parent in amounts equal to the (x) amounts required for
Parent to pay any Federal, state or local taxes to the extent that such taxes
are directly attributable to the income, assets or operations of the Company
and its Restricted Subsidiaries and, to the extent of amounts actually received
from Unrestricted Subsidiaries, in amounts required to pay such taxes to the
extent attributable to the income, assets or operations of the Unrestricted
Subsidiaries and (y) amounts required under the Management Agreement to
reimburse the Parent for (A) customary salary, bonus and other benefits
payable to officers and employees of the Parent to the extent such salaries,
bonuses, and benefits are directly attributable to ownership of the Company and
its Restricted

 

68

 

Subsidiaries and (B) general
corporate overhead expenses of the Parent to the extent such expenses are
directly attributable to the ownership or operation of the Company and its
Restricted Subsidiaries;

 

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

 

(12)                            Investments
that are made with Excluded Contributions;

 

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

 

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

 

The amount of all Restricted Payments (other
than cash) shall be the fair market value on the date of such Restricted
Payment of the asset(s) or securities proposed to be paid, transferred or
issued by the Company or such Restricted Subsidiary, as the case may be,
pursuant to such Restricted Payment. The fair market value of any cash
Restricted Payment shall be its face amount. The fair market value of (i) any
non-cash Restricted Payment and (ii) Qualified Property received by the
Company from the issue or sale of its Capital Stock or capital contributions
shall be determined conclusively by the Board of Directors of the Company
acting in good faith whose resolution with respect thereto shall be delivered
to the Trustee, such determination to be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if such fair market value is estimated in good faith by the Board of
Directors of the Company to exceed $50.0 million. Not later than the date of
making any non-cash Restricted Payment or including the fair market value of
Qualified Property in a calculation pursuant to clause (c)(ii) of the
first paragraph of this Section 3.3, as the case may be, the
Company shall deliver to the Trustee an Officers’ Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 3.3 were computed, together
with a copy of any fairness opinion or appraisal required by this Indenture.

 

SECTION 3.4.  Limitation on Restrictions on Distributions
from Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create or 

 

69

 

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

 

(1)                                  pay dividends or make any other distributions
on its Capital Stock or pay any Indebtedness or other obligations owed to the
Company or any Restricted Subsidiary (it being understood that the priority of
any Preferred Stock in receiving dividends or liquidating distributions prior
to dividends or liquidating distributions being paid on Common Stock shall not
be deemed a restriction on the ability to make distributions on Capital Stock);

 

(2)                                  make any loans or advances to the Company or
any Restricted Subsidiary (it being understood that the subordination of loans
or advances made to the Company or any Restricted Subsidiary to other
Indebtedness Incurred by the Company or any Restricted Subsidiary shall not be
deemed a restriction on the ability to make loans or advances); or 

 

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

 

The provisions of the preceding paragraph will not
prohibit:

 

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

 

(ii)                                  any encumbrance or restriction with respect
to a Restricted Subsidiary pursuant to an agreement of a Restricted Subsidiary
in effect on or before the date on which such Restricted Subsidiary was
acquired by the Company or a Restricted Subsidiary (other than agreements relating
to any Capital Stock or Indebtedness Incurred as consideration in, or to
provide all or any portion of the funds utilized to consummate, the transaction
or series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the Company or in
contemplation of the transaction) and outstanding on such date provided, that any such encumbrance or
restriction shall not extend to any assets or property of the Company or any
other Restricted Subsidiary other than the assets and property so acquired; 

 

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

 

70

 

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

 

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

 

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

 

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

 

(c)                                pursuant to customary provisions restricting
dispositions of real property interests set forth in any reciprocal easement
agreements of the Company or any Restricted Subsidiary;  

 

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

 

(vi)                           any restriction with respect to a Restricted
Subsidiary (or any of its property or assets) imposed pursuant to an agreement
entered into for the direct or indirect sale or disposition of the Capital
Stock or assets of such Restricted Subsidiary (or the property or assets that
are subject to such restriction) pending the closing of such sale or
disposition; 

 

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

 

(viii)                     restrictions on cash or other deposits
imposed by customers under contracts entered into in the ordinary course of
business;

 

71

 

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

 

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

 

(xi)                             restrictions or conditions contained in any
PPA, trading, netting, operating, construction, service, supply, purchase, sale
or similar agreement to which the Company or any Restricted Subsidiary of the
Company is a party entered into in the ordinary course of business; provided that such encumbrances or
restrictions contained in any agreement referred to in this clause (xi) will
not materially affect the Company’s ability to make anticipated principal or
interest payments on the Securities (as determined in good faith by the Board
of Directors or senior management of the Company); provided further that any encumbrances or restrictions with
respect to any such agreement of MIRMA shall be no more restrictive in any
material respect, taken as a whole, than the encumbrances and restrictions set
forth in the Facility Lease Documents on the Emergence Date; and

 

(xii)                          encumbrances or restrictions contained in
indentures or debt instruments or other debt arrangements Incurred or Preferred
Stock issued by Restricted Subsidiaries in accordance with Section 3.2,
that are not more restrictive, taken as a whole, than those applicable to the
Company in either this Indenture on the Issue Date or the Senior Secured Credit
Agreement on the Emergence Date (which results in encumbrances or restrictions
comparable to those applicable to the Company at a Restricted Subsidiary
level).

 

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

 

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

 

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

 

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

 

72

 

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

 

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

 

provided that pending the final application of any
such Net Available Cash in accordance with clause (a) or clause (b) above,
the Company and its Restricted Subsidiaries may temporarily reduce
Indebtedness or otherwise invest such Net Available Cash in any manner not
prohibited by this Indenture.

 

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

 

Any Acceptable Commitment that is later canceled or
terminated for any reason before Net Available Cash from such Asset Disposition
or Casualty Event is so applied shall be treated as a permitted application of
such Net Available Cash if (x) the Company or any Restricted Subsidiary applies
the Net Available Cash to prepay, repay or purchase Indebtedness described in
clause (3)(a) above or (y) the Company or any Restricted Subsidiary enters
into another

 

73

 

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

 

Any Net Available Cash from Asset Dispositions or
Casualty Events that are not applied or invested as provided and within the
time periods set forth in the preceding paragraph will be deemed to constitute “Excess
Proceeds.”  If the aggregate amount
of Excess Proceeds exceeds $50.0 million, the Company will be required to make
an offer (“Asset Disposition Offer”) to all Holders of Securities and to
the extent required by the terms of other Pari Passu Indebtedness, to all
holders of other Pari Passu Indebtedness outstanding with similar provisions
requiring the Company to make an offer to purchase such Pari Passu Indebtedness
with the proceeds from any Asset Disposition (“Pari Passu Notes”), to
purchase the maximum principal amount of Securities and any such Pari Passu
Notes to which the Asset Disposition Offer applies that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to
100% of the principal amount of the Securities and Pari Passu Notes plus
accrued and unpaid interest to the date of purchase, in accordance with the
procedures set forth in this Indenture or the agreements governing the Pari
Passu Notes, as applicable, in each case in integral multiples of $1,000. To
the extent that the aggregate amount of Securities and Pari Passu Notes so
validly tendered and not properly withdrawn pursuant to an Asset Disposition
Offer is less than the Excess Proceeds, the Company may use any remaining
Excess Proceeds for general corporate purposes, subject to other covenants
contained in this Indenture. If the aggregate principal amount of Securities
surrendered by Holders thereof and other Pari Passu Notes surrendered by
holders or lenders, collectively, exceeds the amount of Excess Proceeds, the
Trustee shall select the Securities and Pari Passu Notes to be purchased on a
pro rata basis on the basis of the aggregate principal amount of tendered
Securities and Pari Passu Notes. Upon completion of such Asset Disposition
Offer, the amount of Excess Proceeds shall be reset at zero.

 

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

 

If the Asset Disposition Purchase Date is on or
after an interest record date and on or before the related interest payment
date, any accrued and unpaid interest will be paid to the Person in whose name
a Security is registered at the close of business on such record date, and no
additional interest will be payable to Holders who tender Securities pursuant
to the Asset Disposition Offer.

 

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

 

74

 

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

 

For the purposes of clause (2) of the first
paragraph of this Section 3.5, the following will be deemed to be
cash: 

 

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

 

(2)                                  Additional Assets received as consideration
for Asset Dispositions; and

 

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

 

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

 

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

 

75

 

which
Lien is securing any Indebtedness, unless contemporaneously with the Incurrence
of such Liens effective provision is made to secure the Indebtedness due under
this Indenture and the Securities or, in respect of Liens on any Restricted
Subsidiary’s property or assets, any Subsidiary Guarantee of such Restricted
Subsidiary, equally and ratably with (or senior in priority to in the case of
Liens with respect to Subordinated Obligations or Guarantor Subordinated
Obligations, as the case may be) the Indebtedness secured by such Lien for
so long as such Indebtedness is so secured.

 

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

 

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

 

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

 

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

 

(4)                                  the Sale/Leaseback Transaction is treated as
an Asset Disposition and all of the conditions of Section 3.5 of
this Indenture (including the provisions concerning the application of Net
Available Cash) are satisfied with respect to such Sale/Leaseback Transaction.

 

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

 

(1)                                  the terms of such Affiliate Transaction are
no less favorable to the Company or such Restricted Subsidiary, as the case may be,
than those that could be obtained in a comparable transaction at the time of
such transaction in arm’s-length dealings with a Person who is not such an
Affiliate; 

 

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

 

76

 

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

 

(3)                                  in the event such Affiliate Transaction
involves an aggregate consideration in excess of $50.0 million, the Company has
received a written opinion from an independent investment banking, accounting
or appraisal firm of nationally recognized standing that such Affiliate
Transaction is not materially less favorable than those that might reasonably
have been obtained in a comparable transaction at such time on an arm’s-length
basis from a Person that is not an Affiliate.

 

The preceding paragraph will not apply to: 

 

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

 

(2)                                  any issuance of securities, or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment agreements and other compensation arrangements, options
to purchase Capital Stock of the Company, restricted stock plans, long-term
incentive plans, stock appreciation rights plans, participation plans or
similar employee benefits plans and/or indemnity provided on behalf of officers
and employees approved by the Board of Directors of the Company; 

 

(3)                                  loans or advances to employees, officers or
directors in the ordinary course of business of the Company or any of its
Restricted Subsidiaries but in any event not to exceed $2.0 million in the
aggregate outstanding at any one time (without giving effect to the forgiveness
of any such loan) with respect to all loans or advances made since the Issue
Date;

 

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

 

(5)                                  the payment of reasonable and customary fees
paid to, and indemnity provided on behalf of, directors of the Company or any
Restricted Subsidiary;

 

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

 

77

 

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

 

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

 

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

 

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

 

(10)                            Investments in the New York Unrestricted
Subsidiaries (other than Mirant NY-Gen, LLC) through the extension of credit as
described in the Offering Memorandum; 

 

(11)                            services provided by Mirant Americas Energy
Marketing, LP or MET to Subsidiaries of New Mirant of the nature described in
the “Certain relationships and related party transactions — Related party
arrangements after emergence from bankruptcy — Services agreement with Mirant
Power Purchase, LLC,” “ — Power sale, fuel supply and services agreements”
sections of the Offering Memorandum; provided
that in the reasonable determination of the members of the Board of Directors
or senior management of the Company, such transactions are on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company or
such Restricted Subsidiary with an unrelated Person (with the exception that
the failure to require collateral in connection with sales to affiliates shall
not be deemed less favorable to the Company or the relevant Restricted
Subsidiary); and

 

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

 

78

 

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

 

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

 

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

 

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

 

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

 

(2)                                  the repurchase date (which shall be no
earlier than 30 days nor later than 60 days from the date such notice is
mailed) (the “Change of Control Payment Date”); and

 

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

 

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

 

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

 

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

 

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

 

79

 

amount of Securities or portions of Securities being
purchased by the Issuers. 

 

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

 

If the Change of Control Payment Date is on or after
an interest record date and on or before the related interest payment date, any
accrued and unpaid interest, if any, will be paid to the Person in whose name a
Security is registered at the close of business on such record date, and no
additional interest shall be payable to Holders who tender pursuant to the
Change of Control Offer.

 

Prior to mailing a Change of Control Offer, and as a
condition to such mailing (i) the requisite holders of each issue of
Indebtedness issued under an indenture or other agreement that may be
violated by such payment shall have consented to such Change of Control Offer
being made and waived the event of default, if any, caused by the Change of
Control or (ii) the Issuers will repay all outstanding Indebtedness issued
under an indenture or other agreement that may be violated by a payment to
the holders of Securities under a Change of Control Offer or the Issuers must
offer to repay all such Indebtedness, and make payment to the holders of such
Indebtedness that accept such offer, and obtain waivers of any event of default
from the remaining holders of such Indebtedness. The Issuers covenant to effect
such repayment or obtain such consent within 30 days following any Change
of Control, it being a default of this Section 3.11 if the Issuers
fail to comply with this provision. A payment default or acceleration under
this Indenture will result in a cross-default under the Senior Secured Credit
Agreement.

 

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

 

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

 

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

 

80

 

Act
within the time periods specified therein. In the event that the Issuers are
not permitted to file such reports, documents and information with the SEC
pursuant to the Exchange Act, the Issuers will nevertheless make available such
Exchange Act information to the Trustee and the holders of the Securities as if
the Issuers were subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act within the time periods specified therein or in the relevant
forms.

 

If the Issuers have designated any of their
Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual
financial information required by the preceding paragraph shall include a
reasonably detailed presentation, either on the face of the financial
statements or in the footnotes to the financial statements and in Management’s
Discussion and Analysis of Results of Operations and Financial Condition, of
the financial condition and results of operations of the Issuers and their
Restricted Subsidiaries. 

 

In addition, the Issuers and the Subsidiary Guarantors
have agreed that they will make available to the Holders and to prospective
investors, upon the request of such Holders, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act so
long as the Securities are not freely transferable under the Securities Act. For
purposes of this Section 3.12, the Issuers and the Subsidiary
Guarantors will be deemed to have furnished the reports to the Trustee and the
Holders of Securities as required by this Section 3.12 if the Issuers
have filed such reports with the SEC via the EDGAR filing system and such
reports are publicly available.

 

The filing requirements set forth above for the
applicable period shall be deemed satisfied by the Issuers prior to the
commencement of the Exchange Offer or the effectiveness of the Shelf
Registration Statement by the filing with the SEC of the exchange offer
registration statement and/or Shelf Registration Statement, and any amendments
thereto, with such financial information that satisfies Regulation S-X of the
Securities Act; provided that
this paragraph shall not supersede or in any manner suspend or delay the
Issuers’ reporting obligations set forth in the first three paragraphs of this Section 3.12.

 

SECTION 3.13.  Future Subsidiary Guarantors. The
Company will cause each Restricted Subsidiary that Guarantees, on the Emergence
Date or any time thereafter, any Indebtedness of the Company or any Subsidiary
Guarantor (excluding a Guarantee by a Non-Guarantor Restricted Subsidiary of
Indebtedness issued by a Non-Guarantor Restricted Subsidiary) to execute and
deliver to the Trustee a supplemental indenture pursuant to which such
Restricted Subsidiary will unconditionally Guarantee, on a joint and several
basis, the full and prompt payment of the principal of, premium, if any, and
interest (including additional interest, if any) in respect of the Securities
on a senior unsecured basis and all other obligations under this Indenture. Notwithstanding
the foregoing, in the event any Subsidiary Guarantor is released and discharged
in full from all of its obligations under its Guarantees of (1) the Senior
Secured Credit Agreement and (2) all other Indebtedness of the Company and
its Restricted Subsidiaries, then the Subsidiary Guarantee of such Subsidiary
Guarantor shall be automatically and unconditionally released or discharged; provided that such Restricted Subsidiary
has not Incurred any Indebtedness in reliance on its status as a Subsidiary
Guarantor under Section 3.2 unless such Subsidiary Guarantor’s obligations
under such Indebtedness are satisfied in full and discharged or are otherwise
permitted under the second paragraph of Section 3.2.

 

81

 

SECTION 3.14.  Maintenance of Office or Agency.
The Company shall maintain an office or agency where the Securities may be
presented or surrendered for payment, where, if applicable, the Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities and this Indenture may be
served. The agency of Deutsche Bank Trust Company Americas (the “Agent”),
currently located at 60 Wall Street, 27th Floor, New York, New York
10005, Attention:  Trust and Security
Services (or at such address in the Borough of Manhattan, The City of New York
as the Agent shall designate upon request therefor from the Company or any
Holder), shall be such office or agency of the Company, unless the Company
shall designate and maintain some other office or agency for one or more of
such purposes. The Company shall give prompt written notice to the Trustee of
any change in the location of any 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 Agent of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive
all such presentations, surrenders, notices and demands.

 

The Company may also from time to time
designate one or more other offices or agencies where the Securities may be
presented or surrendered for any or all such purposes and may from time to
time rescind any such designation. The Company shall give prompt written notice
to the Trustee of any such designation or rescission and any change in the
location of any such other office or agency.

 

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

 

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

 

SECTION 3.17.  Payments for Consent. Neither
MNA Finance Corp., the Company nor any of its Restricted Subsidiaries will,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fees or otherwise, to any Holder of any Securities for or as
an inducement to any consent, waiver or amendment of any of the terms or

 

82

 

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

 

SECTION 3.18.  Compliance Certificate. The
Company shall deliver to the Trustee within 120 days after the end of each
fiscal year of the Company an Officers’ Certificate stating that in the course
of the performance by the signers of their duties as Officers of the Company they
would normally have knowledge of any Default or Event of Default and whether or
not the signers know of any Default or Event of Default that occurred during
the previous fiscal year. If they do, the certificate shall describe the
Default or Event of Default, its status and the action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with TIA § 314(a)(4).

 

SECTION 3.19.  [Intentionally omitted]. 

 

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

 

SECTION 3.21.  Activities prior to Emergence Date.
Prior to the Emergence Date, the Company and its Restricted Subsidiaries shall
not engage in any activity or enter into any transaction or agreement
(including, without limitation, making any restricted payment, incurring any
Indebtedness, incurring any Liens except in favor of the holders of the Securities,
entering into any merger, consolidation or sale of all or substantially all of
its assets or engaging in any transaction with its Affiliates) except in the
ordinary course of business or necessary to effectuate the Plan of
Reorganization substantially in accordance with the description of the Plan of
Reorganization set forth in the Offering Memorandum, the disclosure statement
relating to the Plan of Reorganization and the confirmation order relating to
the Plan of Reorganization.

 

SECTION 3.22.  Effectiveness of Covenants. Following
the first day:

 

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

 

b)                                  no Default or Event of Default has occurred
and is continuing under this Indenture (the occurrence of the events described
in foregoing clauses (a) and (b) being collectively referred to as a “Covenant
Suspension Event”);

 

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

 

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

 

83

 

Agencies
withdraws its Investment Grade Rating or downgrades the rating assigned to the
Securities below an Investment Grade Rating or a Default or Event of Default
occurs and is continuing, then the Company and its Restricted Subsidiaries will
thereafter again be subject to the Suspended Covenants with respect to future
events. The period of time between the date of the Covenant Suspension Event
and the Reversion Date is referred to in this description as the “Suspension
Period.” Notwithstanding that the Suspended Covenants may be reinstated,
no Default or Event of Default will be deemed to have occurred as a result of a
failure to comply with the Suspended Covenants during the Suspension Period (or
upon termination of the Suspension Period or after that time based solely on
events that occurred during the Suspension Period). 

 

On the Reversion Date, all Indebtedness Incurred
during the Suspension Period will be classified to have been Incurred pursuant
to the first paragraph of Section 3.2 or one of the clauses set
forth in the second paragraph of Section 3.2 (to the extent such
Indebtedness would be permitted to be Incurred thereunder as of the Reversion
Date and after giving effect to Indebtedness Incurred prior to the Suspension
Period and outstanding on the Reversion Date). To the extent such Indebtedness
would not be so permitted to be Incurred pursuant to the first or second
paragraph of Section 3.2, such Indebtedness will be deemed to have
been outstanding on the Emergence Date, so that it is classified as permitted
under clause (4) of the second paragraph of Section 3.2.
Calculations made after the Reversion Date of the amount available to be made
as Restricted Payments under Section 3.3 will be made as though the
covenant described under Section 3.3 had been in effect since the
Emergence Date and throughout the Suspension Period. Accordingly, Restricted
Payments made during the Suspension Period will reduce the amount available to
be made as Restricted Payments under the first paragraph of Section 3.3.

 

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

 

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

 

84

 

ARTICLE IV

SUCCESSOR COMPANY

 

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

 

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

 

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

 

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

 

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

 

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

 

85

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

86

 

ARTICLE V

REDEMPTION OF
SECURITIES

 

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

 

SECTION 5.2.  Applicability of Article. Redemption
of Securities at the election of the Issuers or otherwise, as permitted or
required by any provision of this Indenture, shall be made in accordance with
such provision and this Article.

 

SECTION 5.3.  Election to Redeem; Notice to Trustee.
The election of the Issuers to redeem any Securities pursuant to Section 5.1
shall be evidenced by Board Resolutions of the Issuers. In case of any redemption
at the election of the Issuers, the Issuers shall, upon not later than the
earlier of the date that is 45 days prior to the Redemption Date fixed by
the Issuers or the date on which notice is given to the Holders (except as
provided under Section 5.5 or unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date and of the principal amount of Securities to be redeemed and shall deliver
to the Trustee such documentation and records as shall enable the Trustee to
select the Securities to be redeemed pursuant to Section 5.4. Any
such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.

 

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

 

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

 

For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security which has been or
is to be redeemed.

 

87

 

 

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

 

All notices of redemption shall state:

 

(1)                                  the
Redemption Date,

 

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

 

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

 

(4)                                  in
case any Security is to be redeemed in part only, the notice which relates
to such Security shall state that on and after the Redemption Date, upon
surrender of such Security, the Holder will receive, without charge, a new
Security or Securities of authorized denominations for the principal amount
thereof remaining unredeemed,

 

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

 

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

 

(7)                                  the
name and address of the Paying Agent,

 

(8)                                  that
Securities called for redemption must be surrendered to the Paying Agent to
collect the redemption price,

 

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

 

(10)                            the
paragraph of the Securities pursuant to which the Securities are to be
redeemed.

 

88

 

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

 

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

 

If any Security called for redemption shall not be
so paid upon surrender thereof for redemption, the unpaid principal (and
premium, if any) shall, until paid, bear interest from the Redemption Date at
the rate borne by the Securities.

 

SECTION 5.8.  Securities Redeemed in Part. Any
Security which is to be redeemed only in part (pursuant to the provisions
of this Article) shall be surrendered at the office or agency of the Issuers
maintained for such purpose pursuant to Section 3.14 (with, if the
Issuers or the Trustee so require, due endorsement by, or a written instrument
of transfer in form satisfactory to the Issuers and the Trustee duly
executed by the Holder thereof or such Holder’s attorney duly authorized in
writing), and the Issuers shall execute, and the Trustee shall , upon receipt
by Trustee of the Issuers’ Order, authenticate and make available for delivery
to the Holder of such Security at the expense of the Issuers, a new Security or
Securities, of any authorized denomination as requested by such Holder, in an
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered, provided, that each such new Security will be in a principal
amount of $1,000 or an integral multiple thereof.

 

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

 

89

 

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

 

ARTICLE VI

 

DEFAULTS AND
REMEDIES

 

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

 

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

 

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

 

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

 

(4)                                  failure by the Issuers or any Subsidiary
Guarantor to comply for 30 days after notice as provided below with any of
their obligations under Article III (other than (x) a failure to
purchase Securities which will constitute an Event of Default under clause (2) of
this Section 6.1 and other than a failure to comply with Section 4.1,
which will constitute an Event of Default under clause (3) of this Section 6.1
and (y) Sections  3.14, 3.15, 3.16, 3.17, 3.18
and 3.20, which will constitute an Event of Default under clause (5) of
this Section 6.1); 

 

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

 

90

 

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

 

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

 

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

 

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

 

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

 

(i)                                           commences a voluntary case or proceeding;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)                                     is for relief in an involuntary case against
either of the Issuers, New Mirant (subject, solely in the case of New Mirant,
to there being outstanding more than $100.0 million of unfunded MAI Series A
Preferred Shares and MAI Series B Preferred Shares in the aggregate) or a
Significant Subsidiary of the Issuers or group of Restricted Subsidiaries of
the Issuers that, taken together (as of the latest audited consolidated
financial statements for the Issuers and their Restricted Subsidiaries), would
constitute a Significant Subsidiary, pursuant to or within the meaning of any
Bankruptcy Law;

 

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

 

(iii)                               orders the winding up or liquidation of
either of the Issuers, New Mirant (subject, solely in the case of New Mirant,
to there being outstanding more than $100.0 million of unfunded MAI Series A
Preferred Shares and MAI Series B Preferred Shares in the aggregate) or a
Significant Subsidiary of the Issuers or group of Restricted Subsidiaries of
the Issuers that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries), would
constitute a Significant Subsidiary, pursuant to or within the meaning of any
Bankruptcy Law; and

 

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

 

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

 

(9)                                   any Subsidiary Guarantee of a Significant
Subsidiary or group of Restricted Subsidiaries that taken together as of the
latest audited consolidated financial statements for the Company and its
Restricted Subsidiaries would constitute a Significant Subsidiary ceases to be
in full force and effect (except as contemplated by the terms of this
Indenture) or is declared null and void in a judicial proceeding or any
Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary
Guarantors that taken together as of the latest audited consolidated financial
statements of the Company and its Restricted Subsidiaries would constitute a
Significant Subsidiary expressly denies or disaffirms its obligations under
this Indenture or its Subsidiary Guarantee.

 

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

 

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

 

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

 

 

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SECTION 6.2.  Acceleration.  If an Event of Default (other than an Event
of Default described in clause (7) of Section 6.1) occurs and is
continuing, the Trustee by notice to the Issuers, or the Holders of at least
25% in principal amount of the outstanding Securities by notice to the Issuers
and the Trustee, may, and the Trustee at the request of such Holders shall,
declare the principal of, premium, if any, and accrued and unpaid interest, if
any, on all the Securities to be due and payable. Upon such a declaration, such
principal, premium and accrued and unpaid interest will be due and payable
immediately.

In the event of a
declaration of acceleration of the Securities because an Event of Default
described in clause (6) of Section 6.1 has occurred and is continuing,
the declaration of acceleration of the Securities shall be automatically
annulled if the event of default or payment default triggering such Event of
Default pursuant to clause (6) of Section 6.1 shall be remedied or cured
by the Issuers or a Restricted Subsidiary or waived by the holders of the
relevant Indebtedness within 30 days after the declaration of acceleration with
respect thereto and if (1) the annulment of the acceleration of the Securities
would not conflict with any judgment or decree of a court of competent
jurisdiction, (2) all existing Events of Default, except nonpayment of
principal, premium or interest on the Securities that became due solely because
of the acceleration of the Securities, have been cured or waived and (3) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration or
acceleration, has been paid.

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

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

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

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

 

 

94

 

deemed cured, but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any consequent right.

 

SECTION
6.5.   Control by Majority.  The Holders of a
majority in principal amount of the outstanding Securities may direct in
writing the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or, subject to Sections 7.1 and 7.2,
that the Trustee determines is unduly prejudicial to the rights of any other
Holder or would involve the Trustee in personal liability; provided, however, that the Trustee may
take any other action deemed proper by the Trustee that is not inconsistent
with such direction. Prior to taking any action hereunder, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.

 

SECTION
6.6.   Limitation on Suits.  Subject to the
provisions of this Indenture relating to the duties of the Trustee, if an Event
of Default occurs and is continuing, the Trustee will be under no obligation to
exercise any of the rights or powers under this Indenture at the request or
direction of any of the Holders unless such Holders have offered to the Trustee
reasonable indemnity or security against any loss, liability or expense. Except
to enforce the right to receive payment of principal, premium, if any, or
interest when due, no Holder may pursue any remedy with respect to this
Indenture or the Securities unless:

 

(1)           such
Holder has previously given the Trustee notice that an Event of Default is
continuing;

 

(2)           Holders
of at least 25% in principal amount of the outstanding Securities have
requested the Trustee to pursue the remedy;

 

(3)           such
Holders have offered the Trustee security or indemnity reasonably satisfactory
to it against any loss, liability or expense;

 

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

 

(5)           the
Holders of a majority in principal amount of the outstanding Securities have
not given the Trustee a direction that, in the opinion of the Trustee, is
inconsistent with such request within such 60-day period.

 

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

 

SECTION
6.7.   Rights of Holders to Receive Payment.  Notwithstanding
any other provision of this Indenture (including Section 6.6), the
right of any Holder to receive payment of principal of, premium, if any, or
interest on the Securities held by such Holder, on or after the respective due
dates expressed in the Securities, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.

 

95

 

SECTION
6.8.   Collection Suit by Trustee.  If an Event
of Default specified in clauses (1) or (2) of Section 6.1
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Issuers for the whole amount then
due and owing (together with interest on any unpaid interest to the extent
lawful) and the amounts provided for under Section 7.7.

 

SECTION
6.9.   Trustee May File Proofs of Claim.  The
Trustee may 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, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Issuers, their Subsidiaries or the Issuers’ or
their Subsidiaries’ respective creditors or properties and, unless prohibited
by law or applicable regulations, may be entitled and empowered to participate
as a member of any official committee of creditors appointed in such matter and
may vote on behalf of the Holders in any election of a trustee in bankruptcy or
other Person performing similar functions, and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make 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 it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee
under Section 7.7.

 

SECTION
6.10.   Priorities.  If the Trustee collects
any money or property pursuant to this Article VI, it shall pay out
the money or property in the following order:

 

FIRST:  to
the Trustee for amounts due under Section 7.7;

 

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

 

THIRD:  to
the Issuers.

 

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

 

SECTION
6.11.   Undertaking 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 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 and expenses,
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
6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant
to Section 6.7 or a suit by Holders of more than 10% in outstanding
principal amount of the Securities.

 

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ARTICLE VII

 

TRUSTEE

 

SECTION
7.1.   Duties of Trustee.  (a)  If an
Event of Default has occurred and is continuing, the Trustee will exercise the
rights and powers vested in it by this Indenture and use the same degree of
care and skill in their exercise as a prudent Person would exercise or use
under the circumstances in the conduct of such Person’s own affairs.

 

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

 

(1)  the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and

 

(2)  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, opinions or orders furnished to the Trustee and
conforming to the requirements of this Indenture. However, in the case of any
such certificates or opinions which by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine such
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).

 

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

 

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

 

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

 

(3)  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.

 

(a)  The Trustee shall not be
liable for interest on any money received by it except as the Trustee may agree
in writing with the Issuers.

 

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

 

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

 

97

 

(d)  Every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
7.1 and to the provisions of the TIA.

 

(e)  Unless otherwise specifically
provided in this Indenture, any demand, request, direction or notice from the
Issuers shall be sufficient if signed by an Officer of each
of Escrow LLC, MNA and MNA Finance Corp.

 

(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 to the Trustee indemnity or security reasonably satisfactory
to it against the costs, expenses (including reasonable attorneys’ fees and
expenses) and liabilities that might be incurred by it in compliance with such
request or direction.

 

SECTION 7.2.   Rights
of Trustee.  Subject to Section 7.1:

 

(a)  The Trustee may conclusively
rely on any document (whether in its original or facsimile form) reasonably
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. The Trustee shall receive and retain financial reports and statements
of the Company as provided herein, but shall have no duty to review or analyze
such reports or statements to determine compliance under covenants or other
obligations of the Issuers.

 

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

 

(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 which it believes
to be authorized or within its rights or powers, unless the Trustee’s conduct
constitutes willful misconduct or negligence.

 

(e)  The Trustee may consult with counsel
of its selection, and the advice or opinion of counsel with respect to legal
matters relating to this Indenture and the Securities shall be full and
complete authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.

 

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

 

98

 

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

 

(h)  The Trustee shall not be
deemed to have knowledge of any fact or matter unless a Trust Officer of the
Trustee has actual knowledge of such fact or matter.

 

(i)  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 request,
and in the absence of bad faith or willful misconduct on its part, rely upon an
Officers’ Certificate and an Opinion of Counsel.

 

(j)  The Trustee may request that
the Issuers deliver an Officers’ Certificate setting forth the names of
individuals and/or titles of officers authorized at such time to take specified
actions pursuant to this Indenture, which Officers’ Certificate may be signed
by any person specified as so authorized in any such certificate previously
delivered and not superseded.

 

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

 

SECTION
7.3.   Individual Rights of Trustee.  The
Trustee in its individual or any other capacity may become the owner or pledgee
of Securities and may otherwise deal with the Issuers, the Subsidiary
Guarantors or their Affiliates with the same rights it would have if it were
not Trustee. However, the Trustee must comply with Sections 7.10
and 7.11. In addition, the Trustee shall be permitted to engage in
transactions with the Issuers; provided,
however, that if the Trustee acquires any conflicting interest, as
defined in TIA § 310(b), the Trustee must (i) eliminate such conflict
within 90 days of acquiring such conflicting interest, (ii) apply to
the SEC for permission to continue acting as Trustee or (iii) resign. Any
Paying Agent, Registrar, co-registrar or co-paying agent may do the same with
like rights.

 

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 or the Securities, shall not be accountable for the
Issuers’ use of the proceeds from the sale of the Securities, shall not be
responsible for the use or application of any money received by any Paying
Agent other than the Trustee or any money paid to the Issuers pursuant to the
terms of this Indenture and shall not be responsible for any statement of the
Issuers in this Indenture or in any document issued in connection with the sale
of the Securities or in the Securities other than the Trustee’s certificate of authentication.

 

SECTION
7.5.   Notice of Defaults.  If a Default occurs
and is continuing and the Trustee has actual knowledge of such Default, the
Trustee must mail to each holder notice of the

 

99

 

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

 

SECTION
7.6.   Reports by Trustee to Holders.  As
promptly as practicable after each June 1 following the date of this Indenture
beginning June 1, 2006, and in any event prior to July 1 in each year, the
Trustee shall mail to each Holder a brief report dated as of such mail date
that complies with TIA § 313(a) if and to the extent required thereby. The
Trustee also shall comply with TIA § 313(b) and TIA § 313(c).

 

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

 

100

 

SECTION
7.7.   Compensation and Indemnity.  The Issuers
and each Subsidiary Guarantor, if any, shall be joint and severally liable for
paying to the Trustee from time to time reasonable compensation for its
acceptance of this Indenture and services hereunder as the Issuers and the
Trustee shall from time to time agree in writing. The Trustee’s compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuers and each Subsidiary Guarantor, if any, shall be jointly and
severally liable for reimbursing the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
costs of preparing and reviewing reports, certificates and other documents,
costs of preparation and mailing of notices to Holders and reasonable fees and
expenses of counsel retained by the Trustee, in addition to the compensation
for its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee’s agents, counsel,
accountants and experts. The Issuers and each Subsidiary Guarantor (if any),
jointly and severally, shall indemnify each of the Trustee, its officers and
the Agent against any and all loss, liability, damages, claims or expense
(including reasonable attorneys’ fees and expenses) incurred by it without
negligence, bad faith or willful misconduct on its part in connection with the
administration of this trust and the performance of its duties hereunder,
including the costs and expenses of enforcing this Indenture (including this Section 7.7)
and of defending itself against any claims (whether asserted by any Holder, the
Issuers or otherwise). The Trustee shall notify the Issuers promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Issuers shall not relieve the Issuers or any Subsidiary Guarantor of its
obligations hereunder, except to the extent that they were prejudiced by such
failure to notify. The Issuers shall defend the claim and the Trustee shall
provide reasonable cooperation at the Issuers’ expense in the defense. The
Trustee may have separate counsel and the Issuers and the Subsidiary
Guarantors, if any, shall pay the fees and expenses of such counsel; provided that the Issuers shall not be
required to pay such fees and expenses if they assume the Trustee’s defense,
and, in the reasonable judgment of outside counsel to the Trustee, there is no
conflict of interest between the Issuers and the Trustee in connection with
such defense. Notwithstanding the foregoing, the Issuers and the Subsidiary
Guarantors, if any, need not reimburse any expense or indemnify against any
loss, liability or expense which is finally determined by a court of competent
jurisdiction to have been caused by the Trustee’s own willful misconduct,
negligence or bad faith.

 

To secure the Issuers’ and the Subsidiary
Guarantors’ payment obligations in this Section 7.7, the Trustee shall
have a lien prior to the Securities on all money or property held or collected
by the Trustee other than money or property held in trust to pay principal of
and interest on particular Securities. Such lien shall survive the satisfaction
and discharge of this Indenture. The Trustee’s right to receive payment of any
amounts due under this Section 7.7 shall not be subordinate to any
other liability or Indebtedness of the Issuers or the Subsidiary Guarantors (if
any).

 

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

 

SECTION
7.8.   Replacement of Trustee.  The Trustee may
resign at any time by so notifying the Issuers in writing. The Holders of a
majority in principal amount of the

 

101

 

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

 

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

 

(2)          the Trustee is adjudged bankrupt or
insolvent;

 

(3)          a receiver or other public officer takes
charge of the Trustee or its property; or

 

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

 

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

 

A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the Issuers. 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. The retiring Trustee, upon payment of its charges
hereunder, shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for under Section 7.7.

 

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

 

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

 

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

 

SECTION
7.9.   Successor Trustee by Merger.  If the
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee.

 

In case at the time such successor or successors
by merger, conversion or consolidation to the Trustee shall succeed to the
trusts created by this Indenture, any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt
the certificate of authentication of any predecessor trustee, and deliver such
Securities so

 

102

 

authenticated; and in case at that time any
of the Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; provided that the right to adopt the
certificate of authentication of any predecessor Trustee or authenticate
Securities in the name of any predecessor Trustee shall only apply to its
successor or successors by merger, consolidation or conversion.

 

SECTION
7.10.   Eligibility; Disqualification.  This
Indenture shall always have a Trustee that satisfies the requirements of TIA
§ 310 in every respect. The Trustee shall have a combined capital and
surplus of at least $50 million as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA § 310(b); provided, however, that there shall be
excluded from the operation of TIA § 310(b)(1) any indenture or indentures
under which other securities or certificates of interest or participation in
other securities of the Issuers are outstanding if the requirements for such
exclusion set forth in TIA § 310(b)(1) are met.

 

SECTION
7.11.   Preferential Collection of Claims Against the Issuers.  The
Trustee shall comply with 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.

 

SECTION
7.12.   Trustee’s Application for Instruction from the
Issuers.  Any application by the Trustee for written instructions
from the Issuers may, at the option of the Trustee, set forth in writing any
action proposed to be taken or omitted by the Trustee under this Indenture and
the date on and/or after which such action shall be taken or such omission
shall be effective. The Trustee shall not be liable for any action taken by, or
omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date
shall not be less than three Business Days after the date any officer of the
Issuers actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such
action (or the effective date in the case of an omission), the Trustee shall
have received written instructions in response to such application specifying
the action to be taken or omitted.

 

SECTION
7.13.   Paying Agents.  The Issuers shall cause
each Paying Agent other than the Trustee to execute and deliver to them and the
Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section 7.13:

 

(1)  that
it will hold all sums held by it as agent for the payment of principal of, or
premium, if any, or interest on, the Securities (whether such sums have been
paid to it by the Issuers or by any obligor on the Securities) in trust for the
benefit of Holders of the Securities or the Trustee;

 

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

 

(3)  that it will give the Trustee written notice within
three Business Days of any failure of the Issuers (or by any obligor on the
Securities) in the payment of any

 

103

 

installment of
the principal of, premium, if any, or interest on, the Securities when the same
shall be due and payable.

 

ARTICLE VIII

 

DISCHARGE OF INDENTURE; DEFEASANCE

 

SECTION 8.1.   Discharge of Liability on Securities;
Defeasance.  Subject to Section 8.1(c), when
(i)(x) the Issuers deliver to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.9) for
cancellation or (y) all outstanding Securities not theretofore delivered
for cancellation have become due and payable, whether at maturity or upon
redemption, or will become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption pursuant to Article V hereof
and the Issuers or any Subsidiary Guarantor irrevocably deposits or causes to
be deposited with the Trustee as trust funds in trust solely for the benefit of
the Holders money in U.S. dollars, U.S. Government Obligations, or a
combination thereof, in such amounts as will be sufficient without
consideration of any reinvestment of interest to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation for principal, premium, if any, and accrued interest to the date
of maturity or redemption; (ii) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or shall occur as a
result of such deposit (other than a default resulting from borrowing of funds
to be applied to such deposit and the grant of any Lien securing such
borrowing) and such deposit will not result in a breach or violation of, or
constitute a default under, the Senior Secured Credit Agreement or any other
material instrument to which the Issuers or any Significant Subsidiary is a
party or by which the Issuers or any Significant Subsidiary are bound;
(iii) the Issuers or any Subsidiary Guarantor have paid or caused to be
paid all sums payable under this Indenture and the Securities; and
(iv) the Issuers have delivered irrevocable written instructions to the
Trustee under this Indenture to apply the deposited money toward the payment of
such Securities at maturity or the Redemption Date, as the case may be, then
upon demand of the Issuers (accompanied by an Officers’ Certificate and an
Opinion of Counsel stating that all conditions precedent specified herein
relating to the satisfaction and discharge of this Indenture have been complied
with) this Indenture shall cease to be of further effect with respect to the Securities
and the Trustee shall acknowledge satisfaction and discharge of this Indenture,
at the cost and expense of the Issuers.

 

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

 

104

 

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 with such
covenants shall no longer constitute a Default or an Event of Default under Sections
6.1(3) (only with respect to Section 4.1(3)), 6.1(4) (only
with respect to such covenants), 6.1(5) (only with respect to such
covenants), 6.1(6), 6.1(7) (with respect only to Significant
Subsidiaries), 6.1(8) or 6.1(9), and the events specified in such
Sections shall no longer constitute an Event of Default (clause (ii) being
referred to as the “covenant defeasance option”), but except as specified
above, the remainder of this Indenture and the Securities shall be unaffected
thereby. The Issuers may exercise their legal defeasance option notwithstanding
their prior exercise of its covenant defeasance option.

 

If the Issuers exercise their legal
defeasance option, payment of the Securities may not be accelerated because of
an Event of Default and the Subsidiary Guarantees in effect at such time shall
terminate. If the Issuers exercise their covenant defeasance option, payment of
the Securities may not be accelerated because of an Event of Default specified
under Sections 6.1(3) (only with respect to Section 4.1(3)), 6.1(4)
(only with respect to such covenants), 6.1(5) (only with respect to such
covenants), 6.1(6), 6.1(7) (with respect only to Significant
Subsidiaries), 6.1(8) or 6.1(9).

 

Upon satisfaction of the conditions set forth
herein and upon request of the Issuers, the Trustee shall acknowledge in
writing the discharge of those obligations that the Issuers terminate.

 

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

 

SECTION
8.2.   Conditions to Defeasance.  The Issuers
may exercise their legal defeasance option or their covenant defeasance option
only if:

 

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

 

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

 

105

 

principal and
interest when due on all the Securities to maturity or redemption, as the case
may be;

 

(3)                                  no
Default or Event of Default shall have occurred and be continuing on the date
of such deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit and the grant of any Lien
securing such borrowings) or insofar as Events of Default specified in Section
6.1(7) are concerned, at any time in the period ending on the 91st day
after such date of deposit;

 

(4)                                  such
legal defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a Default under, this Indenture or any other
material agreement or instrument to which the Issuers or any of their
Significant Subsidiaries is a party or by which the Issuers or any of their
Significant Subsidiaries is bound;

 

(5)                                  the
Issuers shall have delivered to the Trustee an Opinion of Counsel to the effect
that (A) the Securities and (B) assuming no intervening bankruptcy of the
Issuers between the date of deposit and the 91st day following the deposit and
that no Holder of the Securities is an insider of the Issuers, 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;

 

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

 

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

 

(8)                                  in
the case of the covenant defeasance option, the Issuers shall have delivered to
the Trustee an Opinion of Counsel (subject to customary assumptions and
exclusions) in the United States to the effect that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and covenant defeasance and will be

 

106

 

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

 

(9)                                  the
Issuers deliver to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent to either the legal
defeasance or covenant defeasance, as the case may be, as contemplated by this Article
VIII have been complied with.

 

SECTION
8.3.   Application of Trust Money.  The Trustee
shall hold in trust all money or U.S. Government Obligations (including
proceeds thereof) deposited with it pursuant to this Article VIII. It
shall apply the deposited money and the money from U.S. Government Obligations
through the Paying Agent and in accordance with this Indenture and the
Securities to the Holders of the Securities of all sums due in respect of the
payment of principal of, premium, if any, and accrued interest on the
Securities.

 

SECTION
8.4.   Repayment to the Issuers.  The Trustee
and the Paying Agent shall promptly turn over to the Issuers upon request any
excess money, U.S. Government Obligations or securities held by them upon
payment of all the obligations under this Indenture.

 

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

 

SECTION
8.5.   Indemnity for U.S. Government Obligations.  The
Issuers shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations other
than any such tax, fee or other charge that is for the account of the Holder of
the Securities.

 

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

 

107

 

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

 

ARTICLE IX

 

AMENDMENTS

 

SECTION
9.1.   Without Consent of Holders.  The
Issuers, the Subsidiary Guarantors and the Trustee may amend or supplement this
Indenture, the Securities or any Subsidiary Guarantees without the consent of
any Holder to:

 

(1)                                  cure
any ambiguity, omission, defect or inconsistency;

 

(2)                                  provide
for the assumption by a successor Person of the obligations of the Issuers or
any Subsidiary Guarantor under this Indenture;

 

(3)                                  provide
for uncertificated Securities in addition to or in place of certificated
Securities (provided that the
uncertificated Securities are issued in registered form for purposes of Section
163(f) of the Code, or in a manner such that the uncertificated Securities are
described in Section 163(f) (2) (B) of the Code);

 

(4)                                  add
Guarantees with respect to the Securities or release a Subsidiary Guarantor
upon its designation as an Unrestricted Subsidiary; provided, however, that the designation is in accordance
with the applicable provisions of this Indenture;

 

(5)                                  secure
the Securities;

 

(6)                                  add
to the covenants of the Issuers and the Restricted Subsidiaries for the benefit
of the Holders or surrender any right or power conferred upon the Issuers or
any Restricted Subsidiary;

 

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

 

(8)                                  comply
with any requirement of the SEC in connection with the qualification of this
Indenture under the TIA;

 

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

 

(10)                            provide
for the appointment of a successor trustee; provided that
the successor trustee is otherwise qualified and eligible to act as such under
the terms of this Indenture;

 

108

 

(11)                            provide
for the issuance of Exchange Securities which shall have terms substantially
identical in all respects to the Initial Securities (except that the transfer
restrictions contained in the Initial Securities or Additional Securities, as
the case may be, shall be modified or eliminated as appropriate) and which
shall be treated, together with any outstanding Initial Securities or
Additional Securities, as a single class of securities;

 

(12)                            make
any change necessary to conform this Indenture to the description of the
Securities in the Offering Memorandum; or

 

(13)                            provide
for the issuance of Additional Securities in accordance with the provisions of
this Indenture.

 

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

 

After
an amendment or supplement under this Section becomes effective, the Issuers
shall mail to Holders a notice briefly describing such amendment or supplement.
The failure to give such notice to all Holders, or any defect therein, shall
not impair or affect the validity of an amendment or supplement under this Section
9.1.

 

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

 

(1)  reduce
the amount of Securities whose Holders must consent to an amendment;

 

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

 

(3)  reduce the principal of or extend the Stated
Maturity of any Security;

 

109

 

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

 

(5)  make
any Security payable in money other than that stated in the Security;

 

(6)  impair
the right of any Holder to receive payment of principal, premium, if any, and
interest on such Holder’s Securities on or after the due dates therefor or to
institute suit for the enforcement of any payment on or with respect to such
Holder’s Securities;

 

(7)  make
any change in the amendment provisions which require each Holder’s consent or
to the waiver provisions; or

 

(8)  modify
the Subsidiary Guarantees in any manner adverse to the Holders of the
Securities.

 

It shall not be necessary for the consent of
the Holders under this Section 9.2 to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof. A consent to any amendment, supplement
or waiver under this Indenture by any Holder of the Securities given in
connection with a tender or exchange of such Holder’s Securities will not be
rendered invalid by such tender or exchange.

 

After an amendment or supplement under this
Section becomes effective, the Issuers shall mail to Holders a notice briefly
describing such amendment or supplement. The failure to give such notice to all
Holders, or any defect therein, shall not impair or affect the validity of an
amendment or supplement under this Section 9.2.

 

SECTION
9.3.   Compliance with Trust Indenture Act.  Every
amendment or supplement to this Indenture or the Securities shall comply with
the TIA as then in effect.

 

SECTION
9.4.   Revocation and Effect of Consents and Waivers.  A
consent to an amendment, supplement or a waiver by a Holder of a Security shall
bind the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same debt as the consenting Holder’s Security, even
if notation of the consent or waiver is not made on the Security. Any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s
Security or portion of the Security if the Trustee receives the written notice
of revocation before the date the amendment, supplement or waiver becomes
effective or otherwise in accordance with any related solicitation documents. After
an amendment, supplement or waiver becomes effective, it shall bind every
Holder unless it makes a change described in any of clauses (1) through
(8) of Section 9.2, in which case the amendment, supplement, waiver
or other action shall bind each Holder who has consented to it and every subsequent
Holder that evidences the same debt as the consenting Holder’s Securities. An
amendment, supplement or waiver shall become effective upon receipt by the
Trustee of the requisite number of written consents under Section 9.1
or 9.2 as applicable.

 

110

 

The Issuers may, but shall not be obligated
to, fix a record date for the purpose of determining the Holders entitled to
give their consent or take any other action described above or required or
permitted to be taken pursuant to this Indenture. If a record date is fixed,
then notwithstanding the immediately preceding paragraph, those Persons who
were Holders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall become
valid or effective more than 120 days after such record date.

 

SECTION
9.5.   Notation on or Exchange of Securities.  If
an amendment, supplement or waiver changes the terms of a Security, the Trustee
may require the Holder of the Security to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Security regarding the changed
terms and return it to the Holder. Alternatively, if the Issuers or the Trustee
so determine, the Issuers in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms. Failure
to make the appropriate notation or to issue a new Security shall not affect
the validity of such amendment.

 

SECTION
9.6.   Trustee To Sign Amendments.  The Trustee
shall sign any amendment, supplement or waiver authorized pursuant to this Article IX
if the amendment, supplement or waiver does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may
but need not sign it. In signing such amendment, supplement or waiver the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it
and shall be provided with, and (subject to Sections 7.1 and 7.2)
shall be fully protected in relying upon an Officers’ Certificate and an
Opinion of Counsel stating that such amendment, supplement or waiver is
authorized or permitted by this Indenture and that such amendment, supplement
or waiver is the legal, valid and binding obligation of the Issuers and any
Subsidiary Guarantors, enforceable against them in accordance with its terms,
subject to customary exceptions, and complies with the provisions hereof
(including Section 9.3).

 

ARTICLE X

 

SECURITIES GUARANTEE

 

SECTION
10.1.   Subsidiary Guarantee.  Each Subsidiary
Guarantor hereby fully, unconditionally and irrevocably guarantees, as primary
obligor and not merely as surety, jointly and severally with each other
Subsidiary Guarantor, to each Holder of the Securities and the Trustee the full
and punctual payment when due, whether at maturity, by acceleration, by
redemption or otherwise, of the principal of, premium, if any, and interest on
the Securities and all other monetary obligations of the Issuers under this
Indenture (including interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Issuers or any Subsidiary Guarantor whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding) (all the foregoing being hereinafter collectively called the “Guarantor
Obligations”). Each Subsidiary Guarantor further agrees (to the extent
permitted by law) that the Guarantor Obligations may be extended or renewed, in
whole or in part, without notice or further assent from it, and that it will

 

111

 

remain bound under this Article X
notwithstanding any extension or renewal of any Guarantor Obligation.

 

Each Subsidiary Guarantor waives presentation
to, demand of payment from and protest to the Issuers of any of the Guarantor
Obligations and also waives notice of protest for nonpayment. Each Subsidiary
Guarantor waives notice of any default under the Securities or the Guarantor
Obligations.

 

Each Subsidiary Guarantor further agrees that
its Subsidiary Guarantee herein constitutes a Guarantee of payment when due
(and not a Guarantee of collection) and waives any right to require that any
resort be had by any Holder to any security held for payment of the Guarantor
Obligations.

 

Except as set forth under Section 10.2,
the obligations of each Subsidiary Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason (other than
payment of the Guarantor Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Guarantor
Obligations or otherwise. Without limiting the generality of the foregoing, the
Guarantor Obligations of each Subsidiary Guarantor herein shall not be
discharged or impaired or otherwise affected by (a) the failure of any Holder
to assert any claim or demand or to enforce any right or remedy against the
Issuers or any other person under this Indenture, the Securities or any other
agreement or otherwise; (b) any extension or renewal of any thereof; (c) any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Indenture, the Securities or any other agreement; (d) the release of
any security held by any Holder or the Trustee for the Guarantor Obligations or
any of them; (e) the failure of any Holder to exercise any right or remedy
against any other Subsidiary Guarantor, or (f) any change in the ownership of
the Issuers; (g) by any default, failure or delay, willful or otherwise,
in the performance of the Guarantor Obligations, or (h) by any other act
or thing or omission or delay to do any other act or thing which may or might
in any manner or to any extent vary the risk of any Subsidiary Guarantor or
would otherwise operate as a discharge of such Subsidiary Guarantor as a matter
of law or equity.

 

Subject to the provisions of Section 3.13,
each Subsidiary Guarantor agrees that its Subsidiary Guarantee herein shall
remain in full force and effect until payment in full of all the Guarantor
Obligations or such Subsidiary Guarantor is released from its Subsidiary
Guarantee pursuant to Section 10.2. Each Subsidiary Guarantor
further agrees that its Subsidiary Guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of, premium, if any, or interest on any of the
Guarantor Obligations is rescinded or must otherwise be restored by any Holder
upon the bankruptcy or reorganization of the Issuers or otherwise.

 

In furtherance of the foregoing and not in
limitation of any other right which any Holder has at law or in equity against
any Subsidiary Guarantor by virtue hereof, upon the failure of the Issuers to
pay any of the Guarantor Obligations when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise, each
Subsidiary Guarantor hereby promises to and will, upon receipt of written
demand by the Trustee, forthwith pay, or

 

112

 

cause to be paid, in cash, to the Holders an
amount equal to the sum of (i) the unpaid amount of such Guarantor Obligations
then due and owing and (ii) accrued and unpaid interest on such Guarantor
Obligations then due and owing (but only to the extent not prohibited by law)
(including interest accruing after the filing of any petition in bankruptcy or
the commencement of any insolvency, reorganization or like proceeding relating
to the Issuers or any Subsidiary Guarantor whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding).

 

Each Subsidiary Guarantor further agrees
that, as between such Subsidiary Guarantor, on the one hand, and the Holders,
on the other hand, (x) the maturity of the Guarantor Obligations guaranteed
hereby may be accelerated as provided in this Indenture for the purposes of its
Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Guarantor Obligations guaranteed
hereby and (y) in the event of any such declaration of acceleration of such
Guarantor Obligations, such Guarantor Obligations (whether or not due and
payable) shall forthwith become due and payable by the Subsidiary Guarantor for
the purposes of this Subsidiary Guarantee.

 

Each Subsidiary Guarantor also agrees to pay
any and all costs and expenses (including reasonable attorneys’ fees and
expenses) incurred by the Trustee or the Holders in enforcing any rights under
this Section.

 

SECTION
10.2.   Limitation on Liability; Termination, Release and
Discharge.  Any term or provision of this Indenture to the
contrary notwithstanding, the obligations of each Subsidiary Guarantor
hereunder will be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such Subsidiary Guarantor
(including any guarantees under the Senior Secured Credit Agreement) and after
giving effect to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its
contribution obligations under this Indenture, result in the obligations of
such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law and not
otherwise being void or voidable under any similar laws affecting the rights of
creditors generally.

 

(b)  Upon the sale or disposition
of a Subsidiary Guarantor (by merger, consolidation, the sale of its Capital
Stock or the sale of all or substantially all of its assets (other than by
lease)), and whether or not the Subsidiary Guarantor is the surviving
corporation in such transaction, to a Person which is not the Issuers or a
Restricted Subsidiary of the Issuers, such Subsidiary Guarantor will be
automatically released from all its obligations under this Indenture and its
Subsidiary Guarantee and the Registration Rights Agreement and such Subsidiary
Guarantee will terminate; provided, however,
that (x) the sale or other disposition is in compliance with this Indenture,
including Sections 3.5 and 4.1 and (y) all the obligations of
such Subsidiary Guarantor under all Credit Facilities and related documentation
and any other agreements relating to any other Indebtedness of the Issuers or
their Restricted Subsidiaries terminate upon consummation of such transaction.

 

113

 

(c)  Each Subsidiary Guarantor
shall be deemed released from all its obligations under this Indenture and the
Registration Rights Agreement and such Subsidiary Guarantee shall terminate (x)
upon the legal defeasance of the Securities pursuant to the provisions of Article
VIII hereof or (y) in accordance with Section 3.13 of this
Indenture.

 

(d)  Each Subsidiary Guarantor
shall be released from its obligations under this Indenture, its Subsidiary
Guarantee and the Registration Rights Agreement if the Issuers designate such
Subsidiary Guarantor as an Unrestricted Subsidiary and such designation
complies with the other applicable provisions of this Indenture.

 

(e)  Each Subsidiary Guarantor
shall be released from its obligations under this Indenture, its Subsidiary
Guarantee and the Registration Rights Agreement upon satisfaction and discharge
of this Indenture pursuant to Section 8.1(a).

 

(f)  The Trustee shall promptly
execute and deliver an appropriate instrument prepared and delivered to it at
the expense of the Issuers evidencing any such release upon receipt of a
request by the Issuers accompanied by an Officers’ Certificate certifying as to
the compliance with this Section 10.2.

 

SECTION
10.3.   Right of Contribution.  Each Subsidiary
Guarantor hereby agrees that to the extent that any Subsidiary Guarantor shall
have paid more than its proportionate share of any payment made on the
obligations under the Subsidiary Guarantees, such Subsidiary Guarantor shall be
entitled to seek and receive contribution from and against the Issuers, or any
other Subsidiary Guarantor who has not paid its proportionate share of such
payment. The provisions of this Section 10.3 shall in no respect
limit the obligations and liabilities of each Subsidiary Guarantor to the
Trustee and the Holders and each Subsidiary Guarantor shall remain liable to
the Trustee and the Holders for the full amount guaranteed by such Subsidiary
Guarantor hereunder.

 

SECTION
10.4.   No Subrogation.  Notwithstanding any
payment or payments made by each Subsidiary Guarantor hereunder, no Subsidiary
Guarantor shall be entitled to be subrogated to any of the rights of the
Trustee or any Holder against the Issuers or any other Subsidiary Guarantor or
any collateral security or guarantee or right of offset held by the Trustee or
any Holder for the payment of the Guarantor Obligations, nor shall any
Subsidiary Guarantor seek or be entitled to seek any contribution or
reimbursement from the Issuers or any other Subsidiary Guarantor in respect of
payments made by such Subsidiary Guarantor hereunder, until all amounts owing
to the Trustee and the Holders by the Issuers on account of the Guarantor
Obligations are paid in full. If any amount shall be paid to any Subsidiary
Guarantor on account of such subrogation rights at any time when all of the
Guarantor Obligations shall not have been paid in full, such amount shall be
held by such Subsidiary Guarantor in trust for the Trustee and the Holders,
segregated from other funds of such Subsidiary Guarantor, and shall, forthwith
upon receipt by such Subsidiary Guarantor, be turned over to the Trustee in the
exact form received by such Subsidiary Guarantor (duly indorsed by such
Subsidiary Guarantor to the Trustee, if required), to be applied against the
Guarantor Obligations.

 

114

 

ARTICLE XI

 

MISCELLANEOUS

 

SECTION
11.1.   Trust Indenture Act Controls.  If and
to the extent that any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the provision required by the TIA shall control. Each
Subsidiary Guarantor in addition to performing its obligations under its
Subsidiary Guarantee shall perform such other obligations as may be imposed
upon it with respect to this Indenture under the TIA.

 

SECTION
11.2.   Notices.  Any notice or communication
shall be in writing and delivered in person, sent by facsimile, delivered by
commercial courier service or mailed by first-class mail, postage prepaid,
addressed as follows:

 

	
  if to the Issuers or any Subsidiary Guarantor:

  
	
   

  
	
  Mirant North America Escrow, LLC

  Mirant North America, LLC

  MNA Finance Corp.

  c/o Mirant Corp.

  1155 Perimeter Center West, Suite 100

  Atlanta, GA 30338

  Attn: J. William Holden III

           Steven B. Nickerson

  
	
   

  
	
  if to the Registrar or Paying Agent:

  
	
   

  
	
   

  
	
  Deutsche Bank Trust Company Americas

  60 Wall Street – 27th Floor

  New York, New York 10005

  Attn: Irina Golovashchuk

  
	
   

  
	
   

  
	
  if to the Trustee:

  
	
   

  
	
  Law Debenture Trust Company of New York

  767 Third Avenue, 31st Floor

  New York, NY 10017

  Attn: Boris Treyger

  

 

115

 

	
  with copies to:

  
	
   

  
	
  Moses & Singer LLP

  405 Lexington Avenue

  New York, NY 10174-1299

  Attn: Alan Kolod, Esq.

  

 

The Issuers or the Trustee by written notice
to the other may designate additional or different addresses for subsequent
notices or communications.

 

Any notice or communication to the Issuers or
the Subsidiary Guarantors shall be deemed to have been given or made as of the
date so delivered if personally delivered; when receipt is acknowledged, if
telecopied; and five calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address
shall not be deemed to have been given until actually received by the
addressee).

 

Any notice or communication mailed to a
registered Holder shall be mailed to the Holder at the Holder’s address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.

 

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, it is duly given, whether or not the addressee receives it, except that
notices to the Trustee shall be effective only upon receipt.

 

SECTION
11.3.   Communication by Holders with other Holders.  Holders
may communicate pursuant to TIA § 312(b) with other Holders with respect
to their rights under this Indenture or the Securities. The Issuers, the
Trustee, the Registrar and anyone else shall have the protection of TIA §
312(c).

 

SECTION
11.4.   Certificate and Opinion as to Conditions Precedent.  Upon
any request or application by the Issuers to the Trustee to take or refrain
from taking any action under this Indenture, the Issuers shall furnish to the
Trustee:

 

(1)  an
Officers’ Certificate in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with; and

 

(2)  an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of such counsel, all such conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with.

 

SECTION
11.5.   Statements Required in Certificate or Opinion.  Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture (other than pursuant to Section 3.18)
shall include:

 

116

 

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

 

(2)  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;

 

(3)  a
statement that, in the opinion of such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has been complied with; and

 

(4)  a
statement as to whether or not, in the opinion of such individual, such
covenant or condition has been complied with.

 

In giving such Opinion of Counsel, counsel
may rely as to factual matters on an Officers’ Certificate or on certificates
of public officials.

 

SECTION
11.6.   When Securities Disregarded.  In
determining whether the Holders of the required aggregate principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Issuers, any Subsidiary Guarantor or any Affiliate of them shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.

 

SECTION
11.7.   Rules by Trustee, Paying Agent and Registrar.  The
Trustee may make reasonable rules for action by, or at meetings of, Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.

 

SECTION
11.8.   Legal Holidays.  A “Legal Holiday”
is a Saturday, a Sunday or other day on which commercial banking institutions
are authorized or required to be closed in New York, New York. If a payment
date is a Legal Holiday, payment shall be made on the next succeeding day that
is not a Legal Holiday, and no interest shall accrue for the intervening
period. If a regular record date is a Legal Holiday, the record date shall not
be affected.

 

SECTION
11.9.   Governing Law.  THIS INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE SUBSIDIARY
GUARANTEES.

 

SECTION
11.10.   No Recourse Against Others.  No
director, officer, employee, incorporator or stockholder of the Issuers or a
Subsidiary Guarantor, as such, shall have any liability for any obligations of
the Issuers or such Subsidiary Guarantor under the Securities, this Indenture
or a Subsidiary Guarantee or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Securities by
accepting a Security waives and releases all such liability to the extent
permitted by applicable law. The waiver and release are

 

117

 

part of the consideration for
issuance of the Securities. Such waiver may not be effective to waive
liabilities under the federal securities laws, and it is the view of the SEC
that such a waiver is against public policy.

 

SECTION
11.11.   Successors.  All agreements of each of
the Issuers and each Subsidiary Guarantor in this Indenture and the Securities
shall bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successors.

 

SECTION 11.12.   Multiple
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. One signed copy is enough to prove this
Indenture.

 

SECTION
11.13.   Qualification of Indenture.  The
Issuers shall qualify this Indenture under the TIA in accordance with the terms
and conditions of the Registration Rights Agreement. The Trustee shall be
entitled to receive from the Issuers any such Officers’ Certificates, Opinions
of Counsel or other documentation as it may reasonably request in connection
with any such qualification of this Indenture under the TIA.

 

SECTION
11.14.   Table of Contents; Headings.  The
table of contents, cross-reference sheet and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference
only, are not intended to be considered a part hereof and shall not modify or
restrict any of the terms or provisions hereof.

 

SECTION
11.15.   Force Majeure.  In no event shall the
Trustee be responsible or liable for any failure or delay in the performance of
its obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including strikes, work stoppages, accidents, acts
of war or terrorism, civil or military disturbances, nuclear or natural
catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services; it
being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.

 

SECTION
11.16.   Effectiveness of Provisions for MNA and the
Subsidiary Guarantors.  The provisions of this Indenture shall
not be effective for MNA and the Subsidiary Guarantors, with the exception of Section
3.21, until the Emergence Date. On the Emergence Date, Escrow LLC will
merge with and into MNA with MNA as the surviving entity and MNA will assume
all the obligations of Escrow LLC hereunder. The Merger will be permitted
notwithstanding anything to the contrary in this Indenture.

 

118

 

IN WITNESS WHEREOF, the parties hereto have
caused this Indenture to be duly executed as of the date first above written.

 

 

	
   

  	
  MIRANT NORTH
  AMERICA, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MIRANT NORTH
  AMERICA ESCROW, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MNA FINANCE
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MIRANT TEXAS
  MANAGEMENT, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MIRANT
  TEXAS, LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MIRANT
  CALIFORNIA, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  

 

 

	
   

  	
  MIRANT POTRERO, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  MIRANT DELTA, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  MIRANT CANAL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  MIRANT KENDALL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  MIRANT ZEELAND, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  MIRANT SPECIAL PROCUREMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  MLW DEVELOPMENT, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  

 

 

	
   

  	
  LAW DEBENTURE TRUST COMPANY OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  

 

 

SCHEDULE 3.2

 

EXISTING
INDEBTEDNESS

 

1.             Approximately
$12.5 million of capitalized lease obligations of Mirant Zeeland, LLC arising
from the Transportation Services Contract, dated December 17, 1999, between
Mirant Zeeland, LLC (f/k/a SEI Michigan, L.L.C.) and SEMCO Energy Gas Company,
as amended, supplemented and/or modified from time to time, and any other
agreements related thereto.

 

2.             Approximately
$36.5 million of capitalized lease obligations of Mirant Chalk Point, LLC(1)
arising from (i) the Site Lease Agreement, dated March 21, 1989, between
Potomac Electric Power Company (“PEPCO”) and Southern Maryland Electric
Cooperative, Inc. (“SMECO”) (as assigned by PEPCO to Mirant Chalk Point, LLC)
and (ii) the Facility and Capacity Credit Agreement, dated as of March 21,
1989, between PEPCO and SMECO (as assigned by PEPCO to Mirant Peaker, LLC), in
each case as amended, supplemented and/or modified from time to time, and any
other agreements related thereto.

 

(1)Mirant Peaker, LLC was
merged into Mirant Chalk Point, LLC on December 16, 2005.

 

 

SCHEDULE 3.4

 

PERMITTED
RESTRICTIONS ON DISTRIBUTIONS

 

None.

 

 

SCHEDULE 3.6

 

EXISTING LIENS

 

1.                                       Liens
securing capitalized lease obligations of Mirant Zeeland, LLC referred to in
paragraph 1 of Schedule 3.2.

 

2.                                       Liens
securing capitalized lease obligations of Mirant Chalk Point, LLC referred to
in paragraph 2 of Schedule 3.2.

 

3.                                       In
order to secure its obligations under the eleven Conditional Indemnity
Agreements executed by Mirant Mid-Atlantic, LLC (“MIRMA”) in favor of each of
the eleven Owner Lessors, MIRMA (f/k/a Southern Energy Mid-Atlantic, LLC) as
“mortgagor” executed in favor of the applicable Owner Lessor (identified below)
an Indemnity Mortgage (identified below) which encumbered, among other assets,
the above-ground improvements defined as the “Dickerson Facility” and the
“Morgantown Facility.” Each of the Indemnity Mortgages is described in greater
detail below:

 

	
  Indemnity
  Mortgage

  	
   

  	
  Owner Lessor

  	
   

  	
  Date Executed

  	
   

  
	
  1.

  	
  Indemnity Mortgage, Security

  Agreement and Fixture Filing (L1)

  	
   

  	
  Dickerson OL1 LLC

  	
   

  	
  12/19/00

  	
   

  
	
  2.

  	
  Indemnity
  Mortgage, Security

  Agreement and Fixture Filing (L2)

  	
   

  	
  Dickerson
  OL2 LLC

  	
   

  	
  12/19/00

  	
   

  
	
  3.

  	
  Indemnity
  Mortgage, Security

  Agreement and Fixture Filing (L3)

  	
   

  	
  Dickerson
  OL3 LLC

  	
   

  	
  12/19/00

  	
   

  
	
  4.

  	
  Indemnity
  Mortgage, Security

  Agreement and Fixture Filing (L4)

  	
   

  	
  Dickerson
  OL4 LLC

  	
   

  	
  12/19/00

  	
   

  
	
  5.

  	
  Indemnity Mortgage, Security

  Agreement and Fixture Filing (L1)

  	
   

  	
  Morgantown OL1 LLC

  	
   

  	
  12/19/00

  	
   

  
	
  6.

  	
  Indemnity Mortgage, Security

  Agreement and Fixture Filing (L2)

  	
   

  	
  Morgantown OL2 LLC

  	
   

  	
  12/19/00

  	
   

  
	
  7.

  	
  Indemnity Mortgage, Security

  Agreement and Fixture Filing (L3)

  	
   

  	
  Morgantown OL3 LLC

  	
   

  	
  12/19/00

  	
   

  

 

4.             Deed of
Trust, Security Agreement and Fixture Filing, to be recorded in Montgomery
County, Maryland, among MIRMA as trustor, a trustee to be determined, and
Dickerson OL1, LLC as beneficiary, granting a security interest in an undivided
interest in the “SEMA Shared Facilities” (as defined in Shared Facilities
Agreement, dated as of December 18, 2000, among Southern Energy Mid-Atlantic,
LLC, Dickerson OL1, LLC, Dickerson OL2, LLC, Dickerson OL3, LLC and Dickerson
OL4, LLC (the “Shared Facilities Agreement”)) and a contingent lien on an
undivided interest in the “Owner Lessor Shared Facilities” (as defined in the
Shared Facilities Agreement).

 

5.             Deed of
Trust, Security Agreement and Fixture Filing, to be recorded in Montgomery
County, Maryland, among MIRMA as trustor, a trustee to be determined, and
Dickerson OL2, 

 

 

LLC as beneficiary, granting a security
interest in an undivided interest in the “SEMA Shared Facilities” (as
defined in the Shared Facilities Agreement) and a contingent lien on an
undivided interest in the “Owner Lessor Shared Facilities” (as defined in the
Shared Facilities Agreement).

 

6.             Deed of
Trust, Security Agreement and Fixture Filing, to be recorded in Montgomery
County, Maryland, among MIRMA as trustor, a trustee to be determined, and
Dickerson OL3, LLC as beneficiary, granting a security interest in an undivided
interest in the “SEMA Shared Facilities” (as defined in the Shared
Facilities Agreement) and a contingent lien on an undivided interest in the
“Owner Lessor Shared Facilities” (as defined in the Shared Facilities
Agreement).

 

7.             Deed of
Trust, Security Agreement and Fixture Filing, to be recorded in Montgomery
County, Maryland, among MIRMA as trustor, a trustee to be determined, and
Dickerson OL4, LLC as beneficiary, granting a security interest in an undivided
interest in the “SEMA Shared Facilities” (as defined in the Shared
Facilities Agreement) and a contingent lien on an undivided interest in the
“Owner Lessor Shared Facilities” (as defined in the Shared Facilities
Agreement).

 

8.

 

	
  Jurisdiction

  	
   

  	
  Debtor Name

  	
   

  	
  Secured Party

  	
   

  	
  Collateral

  	
   

  
	
  DE-SOS

  	
   

  	
  Mirant
  California, LLC

  	
   

  	
  United
  Rentals, Inc.

  	
   

  	
  Equipment
  #662391 Sullair 375H Compressor s/n 004-145869.

  	
   

  
	
  DE-SOS

  	
   

  	
  Mirant
  Canal, LLC

  	
   

  	
  Toyota
  Motor Credit Corp

  	
   

  	
  One
  (1) New Toyota Pneumatic Tire Forklift Model 7FGU25 s/n: 68242 with New
  Rightline Fork Positioner Model E5D1019-16 s/n: 025842.

  	
   

  
	
  DE-SOS
  

  

  MD-Dept. of Assessments and Taxation

  	
   

  	
  Mirant
  Mid-Atlantic, LLC

  	
   

  	
  Dickerson
  OL2 LLC

  	
   

  	
  Indemnity
  finance statement covering collateral including assets relating to Dickerson
  facility.

  	
   

  
	
  DE-SOS
  

  

  MD-Dept. of Assessments and Taxation

  	
   

  	
  Mirant
  Mid-Atlantic, LLC

  	
   

  	
  Morgantown
  OL1 LLC

  	
   

  	
  Indemnity
  finance statement covering collateral including assets relating to Morgantown
  facility.

  	
   

  
	
  DE-SOS
  

  

  MD-Dept. of Assessments and Taxation

  	
   

  	
  Mirant
  Mid-Atlantic, LLC

  	
   

  	
  Dickerson
  OL1 LLC

  	
   

  	
  Indemnity
  finance statement covering collateral including assets relating to Dickerson
  facility.

  	
   

  

 

 

	
  DE-SOS
  

  

  MD-Dept. of Assessments and Taxation

  	
   

  	
  Mirant
  Mid-Atlantic, LLC

  	
   

  	
  Dickerson
  OL4 LLC

  	
   

  	
  Indemnity
  finance statement covering collateral including assets relating to Dickerson
  facility.

  	
   

  
	
  DE-SOS
  

  

  MD-Dept. of Assessments and Taxation

  	
   

  	
  Mirant
  Mid-Atlantic, LLC

  	
   

  	
  Dickerson
  OL3 LLC

  	
   

  	
  Indemnity
  finance statement covering collateral including assets relating to Dickerson
  facility.

  	
   

  
	
  DE-SOS
  

  

  MD-Dept. of Assessments and Taxation

  	
   

  	
  Mirant
  Mid-Atlantic, LLC

  	
   

  	
  Morgantown
  OL3 LLC

  	
   

  	
  Indemnity
  finance statement covering collateral including assets relating to Morgantown
  facility.

  	
   

  
	
  DE-SOS
  

  

  MD-Dept. of Assessments and Taxation

  	
   

  	
  Mirant
  Mid-Atlantic, LLC

  	
   

  	
  Morgantown
  OL2 LLC

  	
   

  	
  Indemnity
  finance statement covering collateral including assets relating to Morgantown
  facility.

  	
   

  
	
  DE-SOS
  

  

  MD-Dept. of Assessments and Taxation

  	
   

  	
  Mirant
  Mid-Atlantic, LLC

  	
   

  	
  Morgantown
  OL5 LLC

  	
   

  	
  Indemnity
  finance statement covering collateral including assets relating to Morgantown
  facility.

  	
   

  
	
  DE-SOS
  

  

  MD-Dept. of Assessments and Taxation

  	
   

  	
  Mirant
  Mid-Atlantic, LLC

  	
   

  	
  Morgantown
  OL4 LLC

  	
   

  	
  Indemnity
  finance statement covering collateral including assets relating to Morgantown
  facility.

  	
   

  
	
  DE-SOS
  

  

  MD-Dept. of Assessments and Taxation

  	
   

  	
  Mirant
  Mid-Atlantic, LLC

  	
   

  	
  Morgantown
  OL7 LLC

  	
   

  	
  Indemnity
  finance statement covering collateral including assets relating to Morgantown
  facility.

  	
   

  
	
  DE-SOS
  

  

  MD-Dept. of Assessments and Taxation

  	
   

  	
  Mirant
  Mid-Atlantic, LLC

  	
   

  	
  Morgantown
  OL6 LLC

  	
   

  	
  Indemnity
  finance statement covering collateral including assets relating to Morgantown
  facility.

  	
   

  

 

 

SCHEDULE 3.8

 

EXISTING
AFFILIATE TRANSACTIONS

 

1.                                       MAEM
will be party to Power Sale, Fuel, Supply and Services Agreements, dated as of
January 3, 2005 with each subsidiary of Mirant North America, LLC and certain
affiliated entities that are subsidiaries of Mirant Americas, Inc. in
substantially the form provided to the Initial Purchasers prior to the Issue
Date, which agreements MAEM will assign to MET.

 

2.                                       Administrative
Services Agreements, dated as of January 3, 2005 between Mirant Services, LLC
and each of Mirant North America, LLC and its subsidiaries in substantially the
form provided to the Initial Purchasers prior to the Issue Date.

 

 

SCHEDULE I

 

EXISTING
INVESTMENTS

 

1.                                       Investments
in Mirant New York, Inc., Mirant Bowline, LLC, Mirant Lovett, LLC, Mirant
NY-Gen, LLC and Hudson Valley Gas Corporation on the Emergence Date.

 

2.                                       Investments
consisting of advances not exceeding $20 million to the extent not backed by
cash collateral made pursuant to the Intercompany DIP facility (the “Intercompany
DIP”) made available by Mirant Americas Energy Marketing, LP (“MAEM”)
and Mirant North America, LLC to Mirant New York, Inc., Mirant Bowline, LLC,
Mirant Lovett, LLC and Hudson Valley Gas Corporation on terms described in the
Offering Memorandum, which agreement MAEM will assign to Mirant Energy Trading
LLC (“MET”).

 

3.                                       Balances
owed to Mirant North America, LLC and its subsidiaries owed under intercompany
arrangements described in the Offering Memorandum.

 

4.                                       Investments
made pursuant to the Plan of Reorganization. (i) in connection with the restructuring of MEAM and MET as described in
the Offering Memorandum in furtherance of the MAEM/MET Effective Date (as
defined in the Plan of Reorganization) and (ii) consisting of investments by
MIRMA in MAI Series A Preferred Shares.

 

 

EXHIBIT A

 

[FORM OF FACE
OF SERIES A NOTE]

 

[Applicable
Restricted Securities Legend]

[Depository Legend, if applicable]

 

	
  No.
             

  	
   

  	
  Principal Amount
  $              ,
  as

  
	
   

  	
   

  	
  revised by the Schedule of Increases and

  
	
   

  	
   

  	
  Decreases in Global Security attached hereto

  
	
   

  	
   

  	
  CUSIP NO.
                                                       

  
	
   

  	
   

  	
  ISIN:
                                                                  

  

 

MIRANT NORTH
AMERICA ESCROW, LLC

MIRANT NORTH
AMERICA, LLC

MNA FINANCE CORP.

 

7.375% Senior
Note, Series A, due 2013

 

The Issuers promise to pay to Cede & Co.,
or its registered assigns, the principal sum of [                         ]
DOLLARS, as revised by the Schedule of Increases and Decreases in Global
Security attached hereto, on December 31, 2013.

 

Interest
Payment Dates:  June 30 and December 31,
commencing on June 30, 2006

 

Record Dates:
June 15 and December 15

 

Additional provisions of this Security are
set forth on the other side of this Security.

 

A-1

 

	
   

  	
  MIRANT NORTH AMERICA ESCROW, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MIRANT NORTH AMERICA, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MNA FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Date:

 

A-2

 

TRUSTEE’S
CERTIFICATE OF
  AUTHENTICATION

 

LAW DEBENTURE
TRUST COMPANY OF NEW YORK,

as Trustee,
certifies

that this is one of

the Securities referred

to in the Indenture.

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

Date:

 

A-3

 

[FORM OF
REVERSE SIDE OF SERIES A NOTE]

 

MIRANT NORTH
AMERICA ESCROW, LLC

MIRANT NORTH
AMERICA, LLC

 MNA FINANCE CORP.

 

7.375% Senior
Note, Series A, due 2013

 

1.   Interest

 

Mirant North America Escrow, LLC, a Delaware
limited liability company (“Escrow LLC”), Mirant North America, LLC, a
Delaware limited liability company (“MNA” and together with the Escrow
LLC, the “Company”), and MNA Finance Corp., a Delaware corporation (the
“MNA Finance Corp.” and, together with the Company, the “Issuers”)
promise to pay interest on the principal amount of this Security at the rate
per annum shown above. The obligations of MNA under this Security shall not
become effective until the Emergence Date.

 

The Issuers will pay interest semi-annually
on June 30 and December 31, commencing on June 30, 2006. Interest on the
Securities will accrue from the most recent date to which interest has been
paid on the Securities or, if no interest has been paid, from December 23, 2005.
The Issuers shall pay interest on overdue principal, and on overdue premium, if
any (plus interest on such interest to the extent lawful), at the rate borne by
the Securities to the extent lawful. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.

 

In the event that either the Exchange Offer is not completed or the
shelf registration statement (the “Shelf Registration Statement”), if
required by the Registration Rights Agreement, is not declared effective on or
prior to September 19, 2006, the interest rate on the Securities will be
increased by 1.00% per annum until the Exchange Offer is completed or the Shelf
Registration Statement, if required by the Registration Rights Agreement, is
declared effective by the SEC or the Securities become freely tradable under
the Securities Act.

 

If the Shelf Registration Statement, if required by the Registration
Rights Agreement, has been declared effective and thereafter either ceases to
be effective or the Prospectus contained therein ceases to be usable at any
time during the Shelf Effectiveness Period (as defined in the Registration
Rights Agreement), and such failure to remain effective or usable exists for
more than 30 days (whether or not consecutive) in any 12-month period, then the
interest rate on the Securities will be increased by 1.00% per annum commencing
on the 31st day in such 12-month period and ending on such date that the Shelf
Registration Statement has again been declared effective or the Prospectus
again becomes usable.

 

The Holder of this Security is entitled to the benefits of the
Registration Rights Agreement.

 

A-1

 

2.   Method of Payment

 

By no later than 10:00 a.m. (New York City
time) on the date on which any principal of, premium, if any, or interest on
any Security is due and payable, the Issuers shall irrevocably deposit with the
Trustee or the Paying Agent money sufficient to pay such principal, premium, if
any, and/or interest. The Issuers will pay interest (except Defaulted Interest)
to the Persons who are registered Holders of Securities at the close of
business on the June 15 or December 15 next preceding the interest payment date
even if Securities are cancelled, repurchased or redeemed after the record date
and on or before the interest payment date. Holders must surrender Securities
to a Paying Agent to collect principal payments. The Issuers will pay
principal, premium, if any, and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
Payments in respect of Securities represented by a Global Security (including
principal, premium, if any, and interest) will be made by the transfer of
immediately available funds to the accounts specified by The Depository Trust
Company or any successor depository. The Issuers will make all payments in
respect of a Definitive Security (including principal, premium, if any, and
interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the
Securities may also be made, in the case of a Holder of at least $1,000,000
aggregate principal amount of Securities, by wire transfer to a U.S. dollar
account maintained by the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to the Trustee or the
Paying Agent to such effect designating such account no later than 15 days
immediately preceding the relevant due date for payment (or such other date as
the Trustee may accept in its discretion).

 

3.   Paying
Agent and Registrar

 

Initially, Law Debenture Trust Company of New
York (the “Trustee”) will act as Trustee and Deutsche Bank Trust Company
Americas will act as Paying Agent and Registrar. The Issuers may appoint and
change any Paying Agent, Registrar or co-registrar without notice to any Holder.
Any of the domestically organized Restricted Subsidiaries may act as Paying
Agent, Registrar or co-registrar.

 

4.   Indenture

 

The Issuers issued the Securities under an
Indenture dated as of December 23, 2005 (as it may be amended or supplemented
from time to time in accordance with the terms thereof, the “Indenture”),
among the Issuers, the Subsidiary Guarantors and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”).
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all terms and
provisions of the Indenture, and Holders are referred to the Indenture and the
Act for a statement of those terms.

 

The Securities are general unsecured, senior
obligations of the Issuers. The aggregate principal amount of securities that
may be authenticated and delivered under the Indenture is unlimited. This
Security is one of the 7.375% Senior Notes, Series A, due 2013 

 

A-2

 

referred to in
the Indenture. The Securities include (i) $850,000,000 aggregate principal
amount of the Issuers’ 7.375% Senior Notes, Series A, due 2013 issued under the
Indenture on December 23, 2005 (herein called “Initial Securities”),
(ii) if and when issued, additional 7.375% Senior Notes, Series A, due
2013 or 7.375% Senior Notes, Series B, due 2013 of the Issuers that may be
issued from time to time under the Indenture subsequent to December 23, 2005
(herein called “Additional Securities”) and (iii) if and when
issued, the Issuers’ 7.375% Senior Notes, Series B, due 2013 that may be issued
from time to time under the Indenture in exchange for Initial Securities or
Additional Securities in an offer registered under the Securities Act as
provided in the Registration Rights Agreement (herein called “Exchange
Securities”). The Initial Securities, Additional Securities and Exchange
Securities are treated as a single class of securities under the Indenture. The
Indenture imposes, among other things, certain limitations on the incurrence of
indebtedness, the making of restricted payments, the sale of assets and
subsidiary stock, the incurrence of certain liens, affiliate transactions, the
making of payments for consents, the entering into of agreements that restrict
distributions from restricted subsidiaries, the consummation of mergers and
consolidations, entering new lines of business, restrictions on the activities
of the Corp. Co-Issuer and activities prior to the Emergence Date. The
Indenture also imposes requirements with respect to the provision of financial
information and the provision of guarantees of the Securities by certain
subsidiaries.

 

To guarantee the due and punctual payment of
the principal, premium, if any, and interest (including post-filing or
post-petition interest) on the Securities and all other amounts payable by the
Issuers under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, the Subsidiary Guarantors
have fully, unconditionally and irrevocably Guaranteed (and future guarantors,
together with the Subsidiary Guarantors, will fully, unconditionally and irrevocably
Guarantee), jointly and severally, to each Holder of the Securities and the
Trustee the Guarantor Obligations pursuant to Article X of the Indenture
on a senior unsecured basis.

 

5.   Redemption

 

Except as set forth below, the Securities
will not be redeemable at the option of the Issuers prior to December 31, 2009.
On and after such date, the Securities will be redeemable, at the Issuers’
option, in whole or in part, at any time from time to time, upon not less than
30 nor more than 60 days’ prior notice, at the following redemption prices
(expressed in percentages of principal amount), plus accrued and unpaid
interest, if any, to the applicable redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12-month period
commencing on December 31st of the years set forth below:

 

	
  Period

  	
   

  	
  Percentage

  	
   

  
	
  2009

  	
   

  	
  103.688

  	
  %

  
	
  2010

  	
   

  	
  101.844

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

A-3

 

In addition, at any time and from time to
time prior to December 31, 2008, the Issuers may redeem in the aggregate up to
35% of the original principal amount of the Securities (including Additional
Securities) with the Net Cash Proceeds of one or more Equity Offerings at a
redemption price (expressed as a percentage of principal amount) of 107.375% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date); provided, however, that at least 65% of
the original principal amount of the Securities (including Additional
Securities) must remain outstanding after each such redemption; provided further, that each such
redemption occurs within 90 days of the date of closing of such Equity
Offering.

 

The Securities may be
redeemed, in whole or in part, at any time prior to December 31, 2009 at the
option of the Issuers upon not less than 30 nor more than 60 days’ prior notice
mailed by first class mail to each Holder’s registered address, at a redemption
price equal to 100% of the principal amount of the Securities redeemed plus the
Applicable Premium as of, and accrued and unpaid interest, to, the applicable
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date).

 

If the optional redemption date is on or
after an interest record date and on or before the related interest payment
date, the accrued and unpaid interest, if any, will be paid to the Person in
whose name the Security is registered at the close of business on such record
date, and no additional interest will be payable to Holders whose Securities
will be subject to redemption by the Issuers.

 

In the case of any partial redemption,
selection of the Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are listed or, if the Securities are not
listed, then on a pro rata basis, by lot or by such other method as the Trustee
in its sole discretion shall deem to be fair and appropriate, although no
Securities of $1,000 in original principal amount or less will be redeemed in
part. Any such notice to the Trustee may be cancelled at any time prior to
notice of such redemption being mailed to any Holder and shall thereby be void
and of no effect. If any Security is to be redeemed in part only, the notice of
redemption relating to such Security shall state the portion of the principal
amount thereof to be redeemed. A new Security in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof
upon cancellation of the original Security. On and after the redemption date,
interest will cease to accrue on Securities or portions thereof called for
redemption as long as the Issuers have deposited with the Paying Agent funds in
satisfaction of the applicable redemption price pursuant to the Indenture.

 

If the Escrow Release Conditions (as defined
in the Escrow Agreement) shall not have been fulfilled, or the escrow agent
shall not have received the Officers’ Certificate described in Section 7(a) of
the Escrow Agreement, by January 6, 2006 or the Plan of Reorganization shall
have been amended and such amendments are materially adverse to the holders of
the Securities or the Plan of Reorganization shall have been terminated prior
to such date, the escrow agent, pursuant to the Escrow Agreement, shall,
without the requirement of notice to or action by the Issuers, the Trustee or
any other Person, notify the Trustee that all of 

 

A-4

 

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

 

6.   Repurchase
Provisions

 

If a Change of Control occurs, unless the
Issuers have exercised their right to redeem all of the Securities as described
under paragraph 5 of the Securities, then such Change of Control shall
constitute a triggering event which shall trigger the obligation of the Issuers
to offer to repurchase from each Holder all or any part (equal to $1,000 or an
integral multiple thereof) of such Holder’s Securities at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date) as provided in, and subject to the terms of, the
Indenture.

 

7.   Denominations;
Transfer; Exchange

 

The Securities are in registered form without
coupons in denominations of principal amount of $1,000 and integral multiples
of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay a sum sufficient to
cover any transfer tax or other governmental taxes and fees required by law or
permitted by the Indenture. The Registrar need not register the transfer of or
exchange of any Security for a period beginning 15 days before the mailing
of a notice of an offer to repurchase or redeem Securities and ending at the
close of business on the day of such mailing. The Registrar shall not be
required to register the transfer of or exchange of any Security selected for
redemption.

 

8.   Persons
Deemed Owners

 

The registered Holder of this Security may be
treated as the owner of it for all purposes.

 

A-5

 

9.   Unclaimed
Money

 

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

 

10.   Defeasance

 

Subject to certain exceptions and conditions
set forth in the Indenture, the Issuers at any time may terminate some or all
of their obligations under the Securities and the Indenture if the Issuers
deposit with the Trustee money or U.S. Government Obligations for the payment
of principal, premium, if any, and interest on the Securities to redemption or
maturity, as the case may be.

 

11.   Amendment,
Supplement, Waiver

 

Subject to
certain exceptions set forth in the Indenture, (i) the Indenture and the
Securities may be amended or supplemented by the Issuers, the Subsidiary
Guarantors and the Trustee with the written consent of the Holders of at least
a majority in principal amount of the then outstanding Securities and (ii) any
default (other than with respect to nonpayment (except in accordance with Section
6.4 of the Indenture)) or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount of
the then outstanding Securities, in each case other than in respect of a
provision that cannot be amended without the written consent of each Holder
affected. Subject to certain exceptions set forth in the Indenture, without the
consent of any Holder, the Issuers, the Subsidiary Guarantors and the Trustee
may amend or supplement the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency; provide for the assumption by a successor
corporation of the obligations of the Issuers or any Subsidiary Guarantor under
the Indenture; provide for uncertificated Securities in addition to or in place
of certificated Securities (provided
that the uncertificated Securities are issued in registered form for purposes
of Section 163(f) of the Code, or in a manner such that the uncertificated
Securities are described in Section 163(f) (2) (B) of the Code); add Guarantees
with respect to the Securities or release a Subsidiary Guarantor upon its
designation as an Unrestricted Subsidiary (provided,
however, that the designation is in accordance with the applicable
provisions of the Indenture); secure the Securities; add to the covenants of
the Issuers and the Restricted Subsidiaries for the benefit of the Holders or
surrender any right or power conferred upon the Issuers or any Restricted
Subsidiary; make any change that does not adversely affect the rights of any
Holder; comply with any requirement of the SEC in connection with the
qualification of the Indenture under the TIA; provide for the issuance of the
Exchange Securities which shall have terms substantially identical in all
respects to the Initial Securities or the Additional Securities, as the case
may be (except that the transfer restrictions contained in the Initial
Securities or the Additional Securities, as the case may be, shall be modified
or eliminated as appropriate), and which shall be treated, together with any
outstanding Initial Securities or Additional Securities, as a single class of
securities; release a Subsidiary Guarantor from its obligations under its
Subsidiary Guarantee or the Indenture in accordance with the applicable
provisions of the Indenture; provide for the appointment of a 

 

A-6

 

successor
trustee (provided that the successor trustee is
otherwise qualified and eligible to act as such under the terms of the
Indenture); make any change necessary to conform the Indenture to the
Description of the Notes in the Offering Memorandum; or provide for the
issuance of Additional Securities in accordance with the provisions of the
Indenture.

 

12.   Defaults
and Remedies

 

Under the
Indenture, Events of Default include (each of which are more specifically
described in the Indenture) (i) default in any payment of interest or
additional interest (as required by the Registration Rights Agreement) on any
Security when due, continued for 30 days; (ii) default in the payment of
principal of or premium, if any, on any Security when due at its Stated
Maturity, upon optional redemption, upon required repurchase, upon declaration
or otherwise; (iii) failure by the Issuers or any Subsidiary Guarantor to
comply with their obligations under Section 4.1 of the Indenture; (iv)
failure by the Issuers or any Subsidiary Guarantor to comply for 30 days after
notice with any of their obligations under Article III of the Indenture
(other than (x) a failure to purchase Securities which will constitute an Event
of Default under clause (ii) and other than a failure to comply with Section
4.1 of the Indenture, which will constitute an Event of Default under
clause (iii) and (y) Sections  3.14, 3.15, 3.16, 3.17,
3.18 and 3.20 of the Indenture, which will constitute an Event of
Default under clause (v) below); (v) failure by the Issuers or any Subsidiary
Guarantor to comply for 60 days after notice as provided below with their other
agreements contained in the Indenture; (vi) default under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money borrowed by the Issuers or
any of its Restricted Subsidiaries or New Mirant (subject, solely in the case
of New Mirant, to there being outstanding more than $100.0 million of unfunded
MAI Series A Preferred Shares and MAI Series B Preferred Shares in the aggregate)
or the payment of which is guaranteed by the Issuers, any of their Restricted
Subsidiaries or New Mirant, other than Indebtedness owed to the Issuers or a
Restricted Subsidiary, whether such Indebtedness or guarantee now exists, or is
created after the date of the Indenture, which default (1) is caused by a
failure to pay principal of such Indebtedness at its final stated maturity or
(2) results in the acceleration of such Indebtedness prior to its maturity,
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been
a payment default or the maturity of which has been so accelerated, aggregates
$50.0 million or more; provided that this clause (vi) shall not apply to
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness to a Person that is not an
Affiliate of the Issuers so long as such Indebtedness is retired upon such sale
or transfer; (vii) certain events set forth in Section 6.1(7) of
the Indenture of bankruptcy, insolvency or reorganization of either of the
Issuers or New Mirant (subject, solely in the case of New Mirant, to there
being outstanding more than $100.0 million of unfunded MAI Series A Preferred
Shares and MAI Series B Preferred Shares in the aggregate) or a Significant
Subsidiary of the Issuers or group of Restricted Subsidiaries of the Issuers
that, taken together (as of the latest audited consolidated financial statements
for the Company and its Restricted Subsidiaries), would constitute a
Significant Subsidiary; (viii) failure by the Company or any Significant
Subsidiary or group of Restricted Subsidiaries that, taken together (as of the
latest audited consolidated financial statements for the Company and its
Restricted Subsidiaries), would constitute a Significant Subsidiary to pay
final judgments aggregating in excess of $50.0 million (net of any amounts that
a reputable and creditworthy insurance company has acknowledged liability for
in 

 

A-7

 

writing),
which judgments are not paid, discharged or stayed for a period of 60 days; or
(ix) any Subsidiary Guarantee of a Significant Subsidiary or group of
Restricted Subsidiaries that taken together as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries would constitute a Significant Subsidiary ceases to be in full
force and effect (except as contemplated by the terms of the Indenture) or is
declared null and void in a judicial proceeding or any Subsidiary Guarantor
that is a Significant Subsidiary or group of Subsidiary Guarantors that taken
together as of the latest audited consolidated financial statements of the Company
and its Restricted Subsidiaries would constitute a Significant Subsidiary
expressly denies or disaffirms its obligations under the Indenture or its
Subsidiary Guarantee. However, a default under clauses (iv) and
(v) will not constitute an Event of Default until the Trustee or the
Holders of 25% in principal amount of the outstanding Securities notify the
Issuers of the default and the Issuers do not cure such default within the time
specified in clauses (iv) and (v) hereof after receipt of such notice.

 

If an Event of Default (other than an Event
of Default described in (vii) hereof) occurs and is continuing, the Trustee by
notice to the Issuers, or the Holders of at least 25% in principal amount of
the outstanding Securities by notice to the Issuers and the Trustee, may, and
the Trustee at the request of such Holders shall, declare the principal of,
premium, if any, and accrued and unpaid interest, if any, on all the Securities
to be due and payable. If an Event of Default described in (vii) hereof occurs
and is continuing, the principal of, premium, if any, and accrued and unpaid
interest on all the Securities will become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holders.

 

Holders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or
security reasonably satisfactory to it. Subject to certain limitations, Holders
of a majority in principal amount of the Securities may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders
notice of any continuing Default or Event of Default (except a Default or Event
of Default in payment of principal, premium, if any, or interest) if it
determines in good faith that withholding notice is in their interest.

 

13.   Trustee
Dealings with the Issuers

 

Subject to certain limitations set forth in
the Indenture, the Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with and collect obligations owed to it by the Issuers, the Subsidiary
Guarantors or their Affiliates and may otherwise deal with the Issuers, the
Subsidiary Guarantors or their Affiliates with the same rights it would have if
it were not Trustee.

 

14.   No
Recourse Against Others

 

No director, officer, employee, incorporator
or stockholder of the Issuers or a Subsidiary Guarantor, as such, shall have
any liability for any obligations of the Issuers or such Subsidiary Guarantor
under the Securities, the Indenture or any Subsidiary Guarantee or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Securities by accepting a Security waives and releases
all such liability to the extent permitted by applicable law. The waiver and
release are part of the consideration for issuance of the 

 

A-8

 

Securities.
Such waiver may not be effective to waive liabilities under the federal
securities laws, and it is the view of the SEC that such a waiver is against
public policy.

 

15.   Authentication

 

This Security shall not be valid until an
authorized signatory of the Trustee (or an authenticating agent acting on its
behalf) manually signs the certificate of authentication on the other side of
this Security.

 

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 entirety), JT TEN (= joint tenants with rights of
survivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (=
Uniform Gift to Minors Act).

 

17.   CUSIP,
Common Code and ISIN Numbers

 

The Issuers have caused CUSIP, Common Code or
ISIN numbers, if applicable, to be printed on the Securities and has directed
the Trustee to use CUSIP, Common Code or ISIN numbers, if applicable, 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 Securities or as
contained in any notice of redemption, and reliance may be placed only on the
other identification numbers placed thereon.

 

18.   Governing
Law

 

This Security shall be governed by, and
construed in accordance with, the laws of the State of New York.

 

19.   Effectiveness
of Provisions of the Indenture for MNA and the Subsidiary Guarantors

 

The provisions of the Indenture shall not be
effective for MNA and the Subsidiary Guarantors, with the exception of Section
3.21, until the Emergence Date. On the Emergence Date, Escrow LLC will merge
with and into MNA with MNA as the surviving entity and MNA will assume all the
obligations of Escrow LLC hereunder.

 

The Issuers will furnish to any Holder upon
written request and without charge to the Holder a copy of the Indenture. Requests
may be made to:

 

Mirant North America Escrow, LLC

Mirant North America, LLC

MNA Finance Corp.

 

1155 Perimeter Center West, Suite 100

Atlanta, GA 30338

Attention:  Treasurer

 

A-9

 

ASSIGNMENT FORM

 

To assign this Security, fill in the form
below:

 

I or we assign and transfer this Security to:

 

	
   

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

  
	
   

  
	
  (Insert assignee’s
  social security or tax I.D. No.)

  
	
   

  
	
  and
  irrevocably appoint                          
  agent to transfer this Security on the books of the Issuers. The agent may
  substitute another to act for him.

  
	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  
	
  (Signature
  must be guaranteed)

  
	
   

  
	
  Sign exactly
  as your name appears on the other side of this Security.

  
							

 

The
signature(s) should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in an approved signature guarantee medallion program), pursuant to SEC Rule
17Ad-15.

 

In connection
with any transfer or exchange of any of the Securities evidenced by this
certificate occurring prior to the date that is two years after the later of
the date of original issuance of such Securities and the last date, if any, on
which such Securities were owned by any of the Issuers, or any Affiliate of any
of the Issuers, the undersigned confirms that such Securities are being:

 

CHECK ONE BOX
BELOW:

 

1o                             acquired
for the undersigned’s own account, without transfer; or

 

2o                             transferred
to the Issuers; or

 

3o                             transferred
pursuant to and in compliance with Rule 144A under the Securities Act of
1933, as amended (the “Securities Act”); or

 

4o                             transferred
pursuant to an effective registration statement under the Securities Act; or

 

5o                             transferred
pursuant to and in compliance with Regulation S under the Securities Act;
or

 

A-10

 

6o                             transferred
to an institutional “accredited investor” (within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act), that has furnished to the
Trustee a signed letter containing certain representations and agreements (the
form of which letter appears as Section 2.7 of the Indenture); or

 

7o                             transferred
pursuant to another available exemption from the registration requirements of
the Securities Act.

 

Unless one of
the boxes is checked, the Trustee will refuse to register any of the Securities
evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided,
however, that if box (5), (6) or (7) is checked, the Trustee or the
Issuers may require, prior to registering any such transfer of the Securities,
the delivery of an opinion of counsel, certification and/or other information
satisfactory to each of them to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, such as the exemption provided
by Rule 144 under such Act.

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Signature must be guaranteed)

  	
  Signature

  	
   

  
				

 

The
signature(s) should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in an approved signature guarantee medallion program), pursuant to SEC Rule
17Ad-15.

 

TO BE
COMPLETED BY PURCHASER IF (1) OR (3) ABOVE IS CHECKED.

 

The
undersigned represents and warrants that it is purchasing this Security for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act of 1933,
as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding
the Issuers as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned’s foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

 

	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  

 

A-11

 

[TO BE
ATTACHED TO GLOBAL SECURITIES]

 

SCHEDULE OF
INCREASES AND DECREASES IN GLOBAL SECURITY

 

The following
increases and decreases in this Global Security have been made:

 

	
  Date of 

  Decrease 

  or 

  Increase

  	
   

  	
  Amount of 

  decrease in 

  Principal Amount 

  of this Global 

  Security

  	
   

  	
  Amount of 

  increase in 

  Principal Amount 

  of this Global 

  Security

  	
   

  	
  Principal Amount 

  of this Global 

  Security following 

  such decrease or 

  increase

  	
   

  	
  Signature of 

  authorized 

  signatory of 

  Trustee or 

  Securities 

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-12

 

OPTION OF
HOLDER TO ELECT PURCHASE

 

If you elect to have this Security purchased
by the Issuers pursuant to Section 3.5 or 3.11 of the
Indenture, check either box:

 

	
  o

  	
   

  	
  o

  
	
  3.5

  	
   

  	
  3.11

  

 

If you want to elect to have only part of
this Security purchased by the Issuers pursuant to Section 3.5 or Section 3.11
of the Indenture, state the amount in principal amount (must be integral
multiple of $1,000):  $                                                                                                              

 

	
  Date:

  	
   

  	
  Your
  Signature:

  	
   

  
	
  (Sign exactly as your name appears on the
  other side of the Security)

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  
	
  (Signature
  must be guaranteed)

  
					

 

The
signature(s) should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in an approved signature guarantee medallion program), pursuant to SEC Rule
17Ad-15.

 

A-13

 

EXHIBIT B

 

[FORM OF FACE
OF SERIES B NOTE]

 

[Depository
Legend, if applicable]

 

	
  No.
  [            ]

  	
   

  	
  Principal Amount $[                      ],
  as

  
	
   

  	
   

  	
  revised by the Schedule of Increases and

  
	
   

  	
   

  	
  Decreases in Global Security attached hereto

  
	
   

  	
   

  	
  CUSIP NO. 

  
	
   

  	
   

  	
  ISIN:                                             

  

 

MIRANT NORTH
AMERICA ESCROW, LLC

MIRANT NORTH
AMERICA, LLC 

MNA FINANCE CORP.

7.375% Senior
Note, Series B, due 2013

 

The Issuers promise to pay to Cede & Co.,
or its registered assigns, the principal sum of [                                 ]
DOLLARS, as revised by the Schedule of Increases and Decreases in Global
Security attached hereto, on December 31, 2013.

 

Interest
Payment Dates:  June 30 and December 31,
commencing on June 30, 2006

 

Record
Dates:  June 15 and December 15

 

Additional provisions of this Security are
set forth on the other side of this Security.

 

B-1

 

	
   

  	
  MIRANT NORTH AMERICA ESCROW, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MIRANT NORTH AMERICA, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MNA FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Date:

 

B-2

 

TRUSTEE’S
CERTIFICATE OF
  AUTHENTICATION

 

LAW DEBENTURE
TRUST COMPANY OF NEW YORK,

as Trustee, certifies

that this is one of

the Securities referred

to in the Indenture.

 

	
  By:

  	
   

  	
   

  	
   

  
	
                    Authorized
  Signatory

  	
   

  

 

Date:

 

B-3

 

[FORM OF
REVERSE SIDE OF SERIES B NOTE]

 

MIRANT NORTH
AMERICA ESCROW, LLC

MIRANT NORTH
AMERICA, LLC

MNA FINANCE CORP.

 

 7.375% Senior Note, Series B, due 2013

 

1.   Interest

 

Mirant North America Escrow, LLC, a Delaware
limited liability company (“Escrow LLC”), Mirant North America, LLC, a
Delaware limited liability company (“MNA” and together with the Escrow
LLC, the “Company”), and MNA Finance Corp., a Delaware corporation (the
“MNA Finance Corp.” and, together with the Company, the “Issuers”)
promise to pay interest on the principal amount of this Security at the rate
per annum shown above. The obligations of MNA under this Security shall not
become effective until the Emergence Date.

 

The Issuers will pay interest semi-annually
on June 30 and December 31, commencing on June 30, 2006. Interest on the
Securities will accrue from the most recent date to which interest has been
paid on the Securities or, if no interest has been paid, from December 23, 2005.
The Issuers shall pay interest on overdue principal, and on overdue premium, if
any (plus interest on such interest to the extent lawful), at the rate borne by
the Securities to the extent lawful. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.

 

2.   Method
of Payment

 

By no later than 10:00 a.m. (New York City
time) on the date on which any principal of, premium, if any, or interest on
any Security is due and payable, the Issuers shall irrevocably deposit with the
Trustee or the Paying Agent money sufficient to pay such principal, premium, if
any, and/or interest. The Issuers will pay interest (except Defaulted Interest)
to the Persons who are registered Holders of Securities at the close of
business on the June 15 or December 15 next preceding the interest payment date
even if Securities are cancelled, repurchased or redeemed after the record date
and on or before the interest payment date. Holders must surrender Securities
to a Paying Agent to collect principal payments. The Issuers will pay
principal, premium, if any, and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
Payments in respect of Securities represented by a Global Security (including
principal, premium, if any, and interest) will be made by the transfer of
immediately available funds to the accounts specified by The Depository Trust
Company or any successor depository. The Issuers will make all payments in
respect of a Definitive Security (including principal, premium, if any, and
interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the
Securities may also be made, in the case of a Holder of at least $1,000,000
aggregate principal amount of Securities, by wire transfer to a U.S. dollar
account maintained by the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to the Trustee or the
Paying Agent to such effect designating such account no later than 15 days

 

B-4

 

immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).

 

3.   Paying
Agent and Registrar

 

Initially, Law Debenture Trust Company of New
York (the “Trustee”) will act as Trustee and Deutsche Bank Trust Company
Americas will act as Paying Agent and Registrar. The Issuers may appoint and
change any Paying Agent, Registrar or co-registrar without notice to any Holder.
Any of the domestically organized Restricted Subsidiaries may act as Paying
Agent, Registrar or co-registrar.

 

4.   Indenture

 

The Issuers issued the Securities under an
Indenture dated as of December 23, 2005 (as it may be amended or supplemented
from time to time in accordance with the terms thereof, the “Indenture”),
among the Issuers, the Subsidiary Guarantors and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”).
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all terms and
provisions of the Indenture, and Holders are referred to the Indenture and the
Act for a statement of those terms.

 

The Securities are general unsecured, senior
obligations of the Issuers. The aggregate principal amount of securities that
may be authenticated and delivered under the Indenture is unlimited. This
Security is one of the 7.375% Senior Notes, Series A, due 2013 referred to in
the Indenture. The Securities include (i) $850,000,000 aggregate principal
amount of the Issuers’ 7.375% Senior Notes, Series A, due 2013 issued under the
Indenture on December 23, 2005 (herein called “Initial Securities”),
(ii) if and when issued, additional 7.375% Senior Notes, Series A, due
2013 or 7.375% Senior Notes, Series B, due 2013 of the Issuers that may be
issued from time to time under the Indenture subsequent to December 23, 2005
(herein called “Additional Securities”) and (iii) if and when
issued, the Issuers’ 7.375% Senior Notes, Series B, due 2013 that may be issued
from time to time under the Indenture in exchange for Initial Securities or
Additional Securities in an offer registered under the Securities Act as
provided in the Registration Rights Agreement (herein called “Exchange
Securities”). The Initial Securities, Additional Securities and Exchange
Securities are treated as a single class of securities under the Indenture. The
Indenture imposes, among other things, certain limitations on the incurrence of
indebtedness, the making of restricted payments, the sale of assets and
subsidiary stock, the incurrence of certain liens, affiliate transactions, the
making of payments for consents, the entering into of agreements that restrict
distributions from restricted subsidiaries, the consummation of mergers and
consolidations, entering new lines of business, restrictions on the activities
of the Corp. Co-Issuer and activities prior to the Emergence Date. The
Indenture also imposes requirements with respect to the provision of financial
information and the provision of guarantees of the Securities by certain
subsidiaries.

 

To guarantee the due and punctual payment of
the principal, premium, if any, and interest (including post-filing or
post-petition interest) on the Securities and all other amounts 

 

B-5

 

payable by the
Issuers under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, the Subsidiary Guarantors
have fully, unconditionally and irrevocably Guaranteed (and future guarantors,
together with the Subsidiary Guarantors, will fully, unconditionally and
irrevocably Guarantee), jointly and severally, to each Holder of the Securities
and the Trustee the Guarantor Obligations pursuant to Article X of the
Indenture on a senior unsecured basis.

 

5.   Redemption

 

Except as set forth below, the Securities
will not be redeemable at the option of the Issuers prior to December 31, 2009.
On and after such date, the Securities will be redeemable, at the Issuers’
option, in whole or in part, at any time from time to time, upon not less than
30 nor more than 60 days’ prior notice, at the following redemption prices
(expressed in percentages of principal amount), plus accrued and unpaid
interest, if any, to the applicable redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing on
December 31st of the years set forth below:

 

	
  Period

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  103.688

  	
  %

  
	
  2010

  	
   

  	
  101.844

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, at any time and from time to
time prior to December 31, 2008, the Issuers may redeem in the aggregate up to
35% of the original principal amount of the Securities (including Additional
Securities) with the Net Cash Proceeds of one or more Equity Offerings at a
redemption price (expressed as a percentage of principal amount) of 107.375% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date); provided, however, that at least 65% of
the original principal amount of the Securities (including Additional
Securities) must remain outstanding after each such redemption; provided further, that each such
redemption occurs within 90 days of the date of closing of such Equity
Offering.

 

The Securities may be
redeemed, in whole or in part, at any time prior to December 31, 2009 at the
option of the Issuers upon not less than 30 nor more than 60 days’ prior notice
mailed by first class mail to each Holder’s registered address, at a redemption
price equal to 100% of the principal amount of the Securities redeemed plus the
Applicable Premium as of, and accrued and unpaid interest, to, the applicable
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date).

 

If the optional redemption date is on or
after an interest record date and on or before the related interest payment
date, the accrued and unpaid interest, if any, will be paid to the Person in
whose name the Security is registered at the close of business on such record
date, 

 

B-6

 

and no
additional interest will be payable to Holders whose Securities will be subject
to redemption by the Issuers.

 

In the case of any partial redemption,
selection of the Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are listed or, if the Securities are not
listed, then on a pro rata basis, by lot or by such other method as the Trustee
in its sole discretion shall deem to be fair and appropriate, although no
Securities of $1,000 in original principal amount or less will be redeemed in
part. Any such notice to the Trustee may be cancelled at any time prior to
notice of such redemption being mailed to any Holder and shall thereby be void
and of no effect. If any Security is to be redeemed in part only, the notice of
redemption relating to such Security shall state the portion of the principal
amount thereof to be redeemed. A new Security in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof
upon cancellation of the original Security. On and after the redemption date,
interest will cease to accrue on Securities or portions thereof called for
redemption as long as the Issuers have deposited with the Paying Agent funds in
satisfaction of the applicable redemption price pursuant to the Indenture.

 

If the Escrow Release Conditions (as defined
in the Escrow Agreement) shall not have been fulfilled, or the escrow agent
shall not have received the Officers’ Certificate described in Section 7(a) of
the Escrow Agreement, by January 6, 2006 or the Plan of Reorganization shall
have been amended and such amendments are materially adverse to the holders of
the Securities or the Plan of Reorganization shall have been terminated prior
to such date, the escrow agent, pursuant to the Escrow Agreement, shall,
without the requirement of notice to or action by the Issuers, the Trustee or
any other Person, notify the Trustee that all of the Securities shall be
subject to a special redemption (the “Special Redemption”) in accordance
with Section 5.9 of the Indenture on the second Business Day after
delivery of such notice but in any event on or prior to January 10, 2006 (the “Special
Redemption Date”). In the case of a Special Redemption, the Issuers shall,
not later than 11:00 A.M. New York City time (or such other time of day
acceptable to the Trustee which will permit it to give the notice referred to
in the last paragraph of Section 5.5 of the Indenture) at least two
Business Days prior to the Special Redemption Date deliver an Officers’
Certificate to the Trustee setting forth (i) that a Special Redemption will
occur, (ii) the Special Redemption Date, (iii) the Special Redemption Price and
(iv) the other information specified in Section 5.5 of the Indenture. The
Trustee shall deliver to each Holder a written notice (specifying the
information set forth in such Officers’ Certificate) of the Special Redemption
at least two Business Days prior to the Special Redemption Date. On the Special
Redemption Date, the Issuers shall instruct the escrow agent to release cash to
the Paying Agent for the purposes of the Special Redemption. On the Special
Redemption Date, the Securities shall be redeemed, in whole but not in part, at
a redemption price equal to 100% of the principal amount of the Securities,
plus accrued and unpaid interest, from, and including, the Issue Date to, but
excluding, the Special Redemption Date, notwithstanding the noncompliance by
the Issuers with the requirements of the second sentence of Section 5.9
of the Indenture.

 

6.   Repurchase
Provisions

 

If a Change of Control occurs, unless the
Issuers have exercised their right to redeem all of the Securities as described
under paragraph 5 of the Securities, then such Change 

 

B-7

 

of Control
shall constitute a triggering event which shall trigger the obligation of the
Issuers to offer to repurchase from each Holder all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder’s Securities at a
purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the date of repurchase (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date) as provided in, and subject to the terms
of, the Indenture.

 

7.   Denominations;
Transfer; Exchange

 

The Securities are in registered form without
coupons in denominations of principal amount of $1,000 and integral multiples
of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay a sum sufficient to
cover any transfer tax or other governmental taxes and fees required by law or
permitted by the Indenture. The Registrar need not register the transfer of or
exchange of any Security for a period beginning 15 days before the mailing
of a notice of an offer to repurchase or redeem Securities and ending at the
close of business on the day of such mailing. The Registrar shall not be
required to register the transfer of or exchange of any Security selected for
redemption.

 

8.   Persons
Deemed Owners

 

The registered Holder of this Security may be
treated as the owner of it for all purposes.

 

9.   Unclaimed
Money

 

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

 

10.   Defeasance

 

Subject to certain exceptions and conditions
set forth in the Indenture, the Issuers at any time may terminate some or all
of their obligations under the Securities and the Indenture if the Issuers
deposit with the Trustee money or U.S. Government Obligations for the payment
of principal, premium, if any, and interest on the Securities to redemption or
maturity, as the case may be.

 

11.   Amendment,
Supplement, Waiver

 

Subject to
certain exceptions set forth in the Indenture, (i) the Indenture and the
Securities may be amended or supplemented by the Issuers, the Subsidiary
Guarantors and the Trustee with the written consent of the Holders of at least
a majority in principal amount of the then outstanding Securities and (ii) any
default (other than with respect to nonpayment (except in accordance with Section
6.4 of the Indenture)) or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount of
the then 

 

B-8

 

outstanding
Securities, in each case other than in respect of a provision that cannot be
amended without the written consent of each Holder affected. Subject to certain
exceptions set forth in the Indenture, without the consent of any Holder, the
Issuers, the Subsidiary Guarantors and the Trustee may amend or supplement the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency; provide for the assumption by a successor corporation of the
obligations of the Issuers or any Subsidiary Guarantor under the Indenture;
provide for uncertificated Securities in addition to or in place of
certificated Securities (provided
that the uncertificated Securities are issued in registered form for purposes
of Section 163(f) of the Code, or in a manner such that the uncertificated
Securities are described in Section 163(f) (2) (B) of the Code); add Guarantees
with respect to the Securities or release a Subsidiary Guarantor upon its
designation as an Unrestricted Subsidiary (provided,
however, that the designation is in accordance with the applicable
provisions of the Indenture); secure the Securities; add to the covenants of
the Issuers and the Restricted Subsidiaries for the benefit of the Holders or
surrender any right or power conferred upon the Issuers or any Restricted
Subsidiary; make any change that does not adversely affect the rights of any
Holder; comply with any requirement of the SEC in connection with the
qualification of the Indenture under the TIA; provide for the issuance of the
Exchange Securities which shall have terms substantially identical in all
respects to the Initial Securities or the Additional Securities, as the case
may be (except that the transfer restrictions contained in the Initial
Securities or the Additional Securities, as the case may be, shall be modified
or eliminated as appropriate), and which shall be treated, together with any
outstanding Initial Securities or Additional Securities, as a single class of
securities; release a Subsidiary Guarantor from its obligations under its
Subsidiary Guarantee or the Indenture in accordance with the applicable
provisions of the Indenture; provide for the appointment of a successor trustee
(provided that the successor trustee is
otherwise qualified and eligible to act as such under the terms of the
Indenture); make any change necessary to conform the Indenture to the
Description of the Notes in the Offering Memorandum; or provide for the
issuance of Additional Securities in accordance with the provisions of the
Indenture.

 

12.   Defaults
and Remedies

 

Under the
Indenture, Events of Default include (each of which are more specifically
described in the Indenture) (i) default in any payment of interest or
additional interest (as required by the Registration Rights Agreement) on any
Security when due, continued for 30 days; (ii) default in the payment of
principal of or premium, if any, on any Security when due at its Stated
Maturity, upon optional redemption, upon required repurchase, upon declaration
or otherwise; (iii) failure by the Issuers or any Subsidiary Guarantor to
comply with their obligations under Section 4.1 of the Indenture; (iv)
failure by the Issuers or any Subsidiary Guarantor to comply for 30 days after
notice with any of their obligations under Article III of the Indenture
(other than (x) a failure to purchase Securities which will constitute an Event
of Default under clause (ii) and other than a failure to comply with Section
4.1 of the Indenture, which will constitute an Event of Default under
clause (iii) and (y) Sections  3.14, 3.15, 3.16, 3.17,
3.18 and 3.20 of the Indenture, which will constitute an Event of
Default under clause (v) below); (v) failure by the Issuers or any Subsidiary
Guarantor to comply for 60 days after notice as provided below with their other
agreements contained in the Indenture; (vi) default under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money borrowed by the Issuers or
any of its Restricted Subsidiaries or New Mirant (subject, solely in the case
of New Mirant, to there being 

 

B-9

 

outstanding
more than $100.0 million of unfunded MAI Series A Preferred Shares and MAI
Series B Preferred Shares in the aggregate) or the payment of which is
guaranteed by the Issuers, any of their Restricted Subsidiaries or New Mirant,
other than Indebtedness owed to the Issuers or a Restricted Subsidiary, whether
such Indebtedness or guarantee now exists, or is created after the date of the
Indenture, which default (1) is caused by a failure to pay principal of such
Indebtedness at its final stated maturity or (2) results in the acceleration of
such Indebtedness prior to its maturity, and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a payment default or the
maturity of which has been so accelerated, aggregates $50.0 million or more; provided that this clause (vi) shall not apply to
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness to a Person that is not an
Affiliate of the Issuers so long as such Indebtedness is retired upon such sale
or transfer; (vii) certain events set forth in Section 6.1(7) of
the Indenture of bankruptcy, insolvency or reorganization of either of the
Issuers or New Mirant (subject, solely in the case of New Mirant, to there
being outstanding more than $100.0 million of unfunded MAI Series A Preferred
Shares and MAI Series B Preferred Shares in the aggregate) or a Significant
Subsidiary of the Issuers or group of Restricted Subsidiaries of the Issuers
that, taken together (as of the latest audited consolidated financial statements
for the Company and its Restricted Subsidiaries), would constitute a
Significant Subsidiary; (viii) failure by the Company or any Significant
Subsidiary or group of Restricted Subsidiaries that, taken together (as of the
latest audited consolidated financial statements for the Company and its
Restricted Subsidiaries), would constitute a Significant Subsidiary to pay
final judgments aggregating in excess of $50.0 million (net of any amounts that
a reputable and creditworthy insurance company has acknowledged liability for
in writing), which judgments are not paid, discharged or stayed for a period of
60 days; or (ix) any Subsidiary Guarantee of a Significant Subsidiary or group
of Restricted Subsidiaries that taken together as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries would
constitute a Significant Subsidiary ceases to be in full force and effect
(except as contemplated by the terms of the Indenture) or is declared null and
void in a judicial proceeding or any Subsidiary Guarantor that is a Significant
Subsidiary or group of Subsidiary Guarantors that taken together as of the
latest audited consolidated financial statements of the Company and its
Restricted Subsidiaries would constitute a Significant Subsidiary expressly
denies or disaffirms its obligations under the Indenture or its Subsidiary
Guarantee. However, a default under clauses (iv) and (v) will not
constitute an Event of Default until the Trustee or the Holders of 25% in
principal amount of the outstanding Securities notify the Issuers of the
default and the Issuers do not cure such default within the time specified in
clauses (iv) and (v) hereof after receipt of such notice.

 

If an Event of Default (other than an Event
of Default described in (vii) hereof) occurs and is continuing, the Trustee by
notice to the Issuers, or the Holders of at least 25% in principal amount of
the outstanding Securities by notice to the Issuers and the Trustee, may, and
the Trustee at the request of such Holders shall, declare the principal of,
premium, if any, and accrued and unpaid interest, if any, on all the Securities
to be due and payable. If an Event of Default described in (vii) hereof occurs
and is continuing, the principal of, premium, if any, and accrued and unpaid
interest on all the Securities will become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holders.

 

B-10

 

Holders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or
security reasonably satisfactory to it. Subject to certain limitations, Holders
of a majority in principal amount of the Securities may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders
notice of any continuing Default or Event of Default (except a Default or Event
of Default in payment of principal, premium, if any, or interest) if it
determines in good faith that withholding notice is in their interest.

 

13.   Trustee
Dealings with the Issuers

 

Subject to certain limitations set forth in
the Indenture, the Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with and collect obligations owed to it by the Issuers, the Subsidiary
Guarantors or their Affiliates and may otherwise deal with the Issuers, the
Subsidiary Guarantors or their Affiliates with the same rights it would have if
it were not Trustee.

 

14.   No
Recourse Against Others

 

No director, officer, employee, incorporator
or stockholder of the Issuers or a Subsidiary Guarantor, as such, shall have
any liability for any obligations of the Issuers or such Subsidiary Guarantor
under the Securities, the Indenture or any Subsidiary Guarantee or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Securities by accepting a Security waives and releases
all such liability to the extent permitted by applicable law. The waiver and
release are part of the consideration for issuance of the Securities. Such
waiver may not be effective to waive liabilities under the federal securities
laws, and it is the view of the SEC that such a waiver is against public
policy.

 

15.   Authentication

 

This Security shall not be valid until an
authorized signatory of the Trustee (or an authenticating agent acting on its
behalf) manually signs the certificate of authentication on the other side of
this Security.

 

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 entirety), JT TEN (= joint tenants with rights of
survivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (=
Uniform Gift to Minors Act).

 

17.   CUSIP,
Common Code and ISIN Numbers

 

The Issuers have caused CUSIP, Common Code or
ISIN numbers, if applicable, to be printed on the Securities and has directed
the Trustee to use CUSIP, Common Code or ISIN numbers, if applicable, 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 Securities or as
contained in any notice of redemption, and reliance may be placed only on the
other identification numbers placed thereon.

 

B-11

 

18.   Governing
Law

 

This Security shall be governed by, and
construed in accordance with, the laws of the State of New York.

 

19.   Effectiveness
of Provisions of the Indenture for MNA and the Subsidiary Guarantors

 

The provisions of the Indenture shall not be
effective for MNA and the Subsidiary Guarantors, with the exception of Section
3.21, until the Emergence Date. On the Emergence Date, Escrow LLC will merge
with and into MNA with MNA as the surviving entity and MNA will assume all the
obligations of Escrow LLC hereunder.

 

The Issuers will furnish to any Holder upon
written request and without charge to the Holder a copy of the Indenture. Requests
may be made to:

 

Mirant North America Escrow, LLC

Mirant North America, LLC

MNA Finance Corp.

 

1155 Perimeter Center West, Suite 100

Atlanta, GA 30338

Attention:  Treasurer

 

B-12

 

ASSIGNMENT FORM

 

To assign this
Security, fill in the form below:

 

I or we assign
and transfer this Security to:

 

	
   

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

  
	
   

  
	
  (Insert
  assignee’s social security or tax I.D. No.)

  
	
   

  
	
  and
  irrevocably appoint                                 
  agent to transfer this Security on the books of the Issuers. The agent may
  substitute another to act for him.

  
	
   

  
	
   

  
	
  Date:

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  
	
  Signature
  Guarantee: 

  	
   

  
	
  (Signature
  must be guaranteed)

  
	
   

  
	
  Sign exactly
  as your name appears on the other side of this Security.

  
					

 

The
signature(s) should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in an approved signature guarantee medallion program), pursuant to SEC Rule
17Ad-15.

 

B-13

 

[TO BE
ATTACHED TO GLOBAL SECURITIES]

 

SCHEDULE OF
INCREASES AND DECREASES IN GLOBAL SECURITY

 

The following increases and decreases in this
Global Security have been made:

 

	
  Date of  

  Decrease 

  or  

  Increase

  	
   

  	
  Amount of 

  decrease in 

  Principal Amount 

  of this Global 

  Security

  	
   

  	
  Amount of 

  increase in 

  Principal Amount 

  of this Global 

  Security

  	
   

  	
  Principal Amount 

  of this Global 

  Security following 

  such decrease or 

  increase

  	
   

  	
  Signature of 

  authorized 

  signatory of 

  Trustee or 

  Securities 

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

B-14

 

OPTION OF
HOLDER TO ELECT PURCHASE

 

If you elect to have this Security purchased
by the Issuers pursuant to Section 3.5 or 3.11 of the
Indenture, check either box:

	
  o

  	
   

  	
  o

  
	
  3.5

  	
   

  	
  3.11

  

 

If you want to elect to have only part of
this Security purchased by the Issuers pursuant to Section 3.5 or Section 3.11
of the Indenture, state the amount in principal amount (must be integral
multiple of $1,000): $                                                                                             

 

	
  Date: 

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
  (Sign exactly as your name appears on the
  other side of the Security)

  
	
   

  
	
  Signature
  Guarantee:

  	
   

  
	
  (Signature
  must be guaranteed)

  
						

 

The
signature(s) should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in an approved signature guarantee medallion program), pursuant to SEC Rule
17Ad-15.

 

B-15

 

EXHIBIT C

 

FORM OF INDENTURE SUPPLEMENT TO ADD
SUBSIDIARY GUARANTORS

 

This Supplemental Indenture, dated as of
December          , 2005 (this “Supplemental
Indenture” or “Guarantee”), among [name of
future Subsidiary Guarantor] (the “Guarantor”), Mirant North
America Escrow, LLC, a Delaware limited liability company (“Escrow LLC”),
Mirant North America, LLC, a Delaware limited liability company (the “Company”
and together with the Escrow LLC, the “LLC Issuer”), MNA Finance Corp.,
a Delaware corporation (the “Corp. Co-Issuer” and, together with the LLC
Issuer, the “Issuers”), the Subsidiary Guarantors (as hereinafter
defined) from time to time parties hereto and Law Debenture Trust Company of
New York, a national banking association (the “Trustee”), as Trustee.

 

W I T N E S S
E T H:

 

WHEREAS, the Issuers, the Subsidiary
Guarantors and the Trustee have heretofore executed and delivered an Indenture,
dated as of December 23, 2005 (as amended, supplemented, waived or otherwise
modified, the “Indenture”), providing for the issuance of 7.375% Senior
Notes due 2013 of the Issuers (the “Securities”);

 

WHEREAS, Section 3.13 of the
Indenture provides that under certain circumstances the Issuers are required to
cause each Restricted Subsidiary that Guarantees, on the Emergence Date or any
time thereafter, any Indebtedness of the Company or any Subsidiary Guarantor
(excluding a Guarantee by a Non-Guarantor Restricted Subsidiary of Indebtedness
issued by a Non-Guarantor Restricted Subsidiary) to execute and deliver to the
Trustee a supplemental indenture pursuant to which such Restricted Subsidiary
will unconditionally Guarantee, on a joint and several basis with the other
Subsidiary Guarantors, the full and prompt payment of the principal of,
premium, if any, and interest (including Additional Interest, if any) on the
Securities on a senior unsecured basis; and

 

WHEREAS, pursuant to Section 10.1
of the Indenture, the Trustee, the Issuers and the Subsidiary Guarantors are
authorized to execute and deliver this Supplemental Indenture to amend or
supplement the Indenture, without the consent of any Holder;

 

NOW, THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the Guarantor, the Issuers, the other Subsidiary
Guarantors and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Securities as follows:

 

ARTICLE I

Definitions

 

SECTION
1.1  Defined Terms. As used in this Supplemental Indenture, terms
defined in the Indenture or in the preamble or recital hereto are used herein
as therein defined, 

 

 

except that
the term “Holders” in this Guarantee shall refer to the term “Holders”
as defined in the Indenture and the Trustee acting on behalf or for the benefit
of such Holders. The words “herein,” “hereof” and “hereby” and other words of
similar import used in this Supplemental Indenture refer to this Supplemental
Indenture as a whole and not to any particular section hereof.

 

ARTICLE II

Agreement to be Bound; Guarantee

 

SECTION
2.1  Agreement to be Bound. The Guarantor hereby becomes a party to
the Indenture as a Subsidiary Guarantor and as such will have all of the rights
and be subject to all of the obligations and agreements of a Subsidiary
Guarantor under the Indenture. The Guarantor agrees to be bound by all of the
provisions of the Indenture applicable to a Subsidiary Guarantor and to perform
all of the obligations and agreements of a Subsidiary Guarantor under the
Indenture.

 

SECTION
2.2   Guarantee. The
Guarantor agrees, on a joint and several basis with all the existing Subsidiary
Guarantors, to fully, unconditionally and irrevocably Guarantee to each Holder
of the Securities and the Trustee the Guarantor Obligations pursuant to Article
XI of the Indenture on a senior unsecured basis.

 

ARTICLE III

Miscellaneous

 

SECTION
3.1   Notices. All notices
and other communications to the Guarantor shall be given as provided in the
Indenture to the Guarantor, at its address set forth below, with a copy to the
Issuers as provided in the Indenture for notices to the Issuers.

 

SECTION
3.2   Parties. Nothing
expressed or mentioned herein is intended or shall be construed to give any
Person, firm or corporation, other than the Holders and the Trustee, any legal
or equitable right, remedy or claim under or in respect of this Supplemental
Indenture or the Indenture or any provision herein or therein contained.

 

SECTION
3.3   Governing Law. This
Supplemental Indenture shall be governed by, and construed in accordance with,
the laws of the State of New York.

 

SECTION
3.4  Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This Supplemental Indenture
shall form a part of the Indenture for all purposes, and every Holder of
Securities heretofore or hereafter authenticated and delivered shall be bound
hereby. The Trustee makes no representation or warranty as to the validity or
sufficiency of this Supplemental Indenture.

 

C-2

 

SECTION
3.5   Counterparts. The
parties hereto may sign one or more copies of this Supplemental Indenture in
counterparts, all of which together shall constitute one and the same
agreement.

 

SECTION
3.6   Headings. The headings
of the Articles and the Sections in this Guarantee are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.

 

SECTION 3.7   Trustee. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
The recitals and statements herein are deemed to be those of the Guarantor and
not of the Trustee.

 

C-3

 

IN WITNESS WHEREOF, the parties hereto have
caused the Supplemental Indenture to be duly executed as of the date first
above written.

 

	
   

  	
  [SECURITIES GUARANTOR],

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  [Address]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LAW DEBENTURE TRUST COMPANY OF NEW 

  YORK, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIRANT NORTH AMERICA, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MNA FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIRANT TEXAS MANAGEMENT, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
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  MIRANT TEXAS, LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIRANT CALIFORNIA, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
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  MIRANT POTRERO, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
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  MIRANT DELTA, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIRANT CANAL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIRANT KENDALL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

C-2

 

	
   

  	
  MIRANT ZEELAND, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIRANT SPECIAL PROCUREMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MLW DEVELOPMENT, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

C-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]