Document:

exv4w3

Exhibit 4.3

EXECUTION VERSION

PLEDGE AGREEMENT

          This PLEDGE AGREEMENT dated as of May 19, 2009, is made by Mirage Resorts Incorporated, a
Nevada corporation, as Grantor (the “Grantor”) and U.S. Bank National Association, as the
trustee and collateral agent for the benefit of the Secured Parties (as defined below) (in such
capacity, together with its successors in such capacity, “Collateral Agent”), with
reference to the following facts:

RECITALS

          A. MGM MIRAGE, a Delaware corporation (in such capacity, the “Issuer”) concurrently
entered into that certain Indenture dated as of May 19, 2009 (as amended, supplemented or otherwise
modified from time to time, the “Indenture”), among Issuer, the guarantors party thereto
(including the Grantor, Bellagio, LLC, a Nevada limited liability company (“Bellagio”) and
The Mirage Casino-Hotel, a Nevada corporation (“TMCH”)) and the Collateral Agent, pursuant
to which Issuer issued those certain 10.375 % senior secured notes due 2014 and those certain
11.125 % senior secured notes due 2017 (collectively, the “Notes”).

          B. The holders of the Notes (collectively, the “Noteholders”) are willing to purchase
the Notes for the purposes of, among other things, providing Issuer and its subsidiaries funds to
repay existing indebtedness and provide working capital.

          C. The Grantor will derive substantial benefit from the purchase of the Notes by the
Noteholders.

          D. As a condition precedent to purchasing the Notes, the Noteholders require that the Grantor
enter into this Agreement and grant the Security Interest to Collateral Agent as herein provided as
security for Issuer’s obligations under the Indenture.

          E. Pursuant to the 13% Secured Notes Indenture, the holders of the 13% Secured Notes issued
under the 13% Secured Notes Indenture (the “13% Secured Notes Secured Parties”) purchased
the 13% Secured Notes of the Issuer upon the terms and subject to the conditions set forth therein.

          F. The 13% Secured Notes Indenture restricts the ability of the Grantor to grant a security
interest in the Pledged Collateral to secure the Notes Obligations, unless the Grantor grant an
equal and ratable security interest in the Pledged Collateral to secure the Obligations under the
13% Secured Notes and 13% Secured Notes Indenture (the “13% Secured Notes Obligations”).

AGREEMENT

          NOW, THEREFORE, for other good and valuable consideration, the receipt and adequacy of which
hereby are acknowledged, the Grantor represents, warrants, covenants, agrees, assigns and grants as
follows:

 

 

          1. Definitions. This Agreement is the “Pledge Agreement” referred to in the Indenture.
Terms defined in the Indenture and not otherwise defined in this Agreement shall have the meanings
given those terms in the Indenture as though set forth herein in full. Terms defined in the Nevada
Uniform Commercial Code and not otherwise defined in this Agreement or in the Indenture shall have
the meanings defined for those terms in the Nevada Uniform Commercial Code. The following terms
shall have the meanings respectively set forth after each:

          “13% Secured Notes Obligations” shall have the meaning assigned to such term in
Recital F.

          “13% Secured Notes Secured Parties” shall have the meaning assigned to such term in
Recital E.

          “Agreement” means this Pledge Agreement, and any extensions, modifications, renewals,
restatements, supplements or amendments hereof, including, without limitation, any documents or
agreements by which additional Grantors become party hereto.

          “Bellagio” shall have the meaning assigned to such term in Recital A.

          “Certificates” means all certificates, instruments or other documents now or hereafter
representing or evidencing any Pledged Securities.

          “Gaming Authority” means the Nevada Gaming Commission, the Nevada State Gaming Control
Board or any similar commission or agency which has, or may at any time after the date of this
Indenture have, jurisdiction over the gaming activities of the Grantor or a Restricted Subsidiary
of the Grantor or any successor thereto.

          “Gaming Laws” means all Laws pursuant to which any Gaming Authority possesses
regulatory, licensing or permit authority over gambling, gaming or casino activities conducted by
Issuer and its Subsidiaries within its jurisdiction.

          “Indenture” shall have the meaning assigned to such term in Recital A.

          “Issuer” shall have the meaning assigned to such term in Recital A.

          “Intercompany Notes” means, collectively, any intercompany promissory note executed by
Bellagio, TMCH, any Subsidiary of Bellagio or TMCH or any Affiliate of Bellagio or TMCH evidencing
any Indebtedness of such party to the Grantor and any indebtedness of any such party to the Grantor
that the Grantor acquires in substitution for any of the foregoing, together with all instruments
and other agreements evidencing, securing, guaranteeing or otherwise supporting such indebtedness.

          “Interest Issuer” means each corporation, partnership, limited liability company or
limited liability partnership that issued the Pledged Securities.

          “Law” means, collectively, all international, foreign, United States federal and state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative
or judicial precedents or authorities, including the interpretation or administration thereof by

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any Governmental Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority.

          “Note Documents” means this Agreement, the Indenture, the Notes, the Subsidiary
Guarantees, the Registration Rights Agreement, the Security Agreement, and the Trademark Security
Agreement dated as of the date hereto between the grantors party thereto and the Collateral Agent,
or any other document, instrument or agreement arising out of or relating to any of the foregoing,
in each case as amended, supplemented or otherwise modified from time to time.

          “Note Obligations” means any and all present and future Obligations of any type or
nature of the Grantor arising under or relating to the Indenture, the Notes, the Subsidiary
Guarantees and the other Note Documents to which the Grantor is a party.

          “Noteholders” shall have the meaning assigned to such term in Recital B.

          “Notes” shall have the meaning assigned to such term in Recital A.

          “Pledged Collateral” means (a) the Pledged Securities, and any Certificates or other
written evidences representing the Pledged Securities and any interest of the Grantor in the
entries on the books of any securities intermediary or financial intermediary pertaining to the
Pledged Securities, (b) any and all existing and future Intercompany Notes, (c) the by-laws,
partnership or operating agreement(s) and other charter documents of each Interest Issuer, in each
case as amended from time to time (each, a “Governing Agreement”), (d) any and all rights,
powers, remedies and privileges of the Grantor as a general or limited partner or member of the
Interest Issuer, including all rights under the Governing Agreement and applicable Law (i) to
receive its share of profits, income, capital distributions and surplus from each Interest Issuer,
whether in the form of cash, properties or other assets, and whether upon a sale or refinancing of
any of the Interest Issuer’s assets, in the ordinary course of business, upon dissolution and
liquidation or otherwise, and (ii) to vote the Pledged Securities or manage the Interest Issuer,
and (e) any and all proceeds and products of any of the foregoing, whether now held and existing or
hereafter acquired or arising, including any and all cash, securities, instruments and other
property from time to time paid, payable or otherwise distributed in respect of or in exchange for
any or all of the foregoing (collectively, the “Proceeds”).

          “Pledged Securities” means (a) the equity, partnership, limited liability company or
limited liability partnership interests described in Schedule 1 (the “Pledged
Interests”), (b) any and all securities, security entitlements and, equity, limited liability
company, partnership, limited liability partnership or other interests issued by an Interest Issuer
or any successor to any such issuer, in each case that the Grantor acquires or has the right to
acquire from time to time in any manner in substitution for or in addition to any of the foregoing
and any and all certificates, instruments or other documents representing or evidencing such
securities or interests and (c) any and all warrants, options or other rights to subscribe to or
acquire any of the Pledged Interests or any of the foregoing.

          “Secured Obligations” means (i) the Note Obligations and (ii) the 13% Secured Notes
Obligations.

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          “Secured Parties” means, collectively, Collateral Agent, the Trustee, the Noteholders,
the 13% Secured Notes Secured Parties and the trustee under the 13% Secured Notes Indenture.

          “TMCH” shall have the meaning assigned to such term in Recital A.

          2. Representations and Warranties. The Grantor represents and warrants to Collateral
Agent as follows:

     (a) The Grantor has good and marketable title to the Pledged Collateral in which the
Grantor is purporting to grant a security interest to Collateral Agent, and the Pledged
Collateral is not subject to any Lien;

     (b) Subject to applicable Gaming Laws, the Grantor has the right and power to pledge
the Pledged Collateral owned by the Grantor to Collateral Agent without the consent,
approval or authorization of, or notice to, any Person (other than such consents, approvals,
authorization or notices which have been obtained or given prior to the date hereof) and
upon the receipt of approval of the Nevada Gaming Commission of the pledge described herein,
such pledge will constitute the valid, binding and enforceable obligation of the Grantor,
enforceable against the Grantor in accordance with the terms hereof and the other Note
Documents, except as enforcement may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting the enforcement of creditors’
rights or by equitable principles relating to the granting of specific performance and other
equitable remedies as a matter of judicial discretion;

     (c) Upon delivery to the Collateral Agent of the Certificates evidencing the Pledged
Interests, Collateral Agent will have a valid and first priority perfected security interest
in the Pledged Collateral securing the Secured Obligations for the benefit of Collateral
Agent on behalf of the Secured Parties;

     (d) All member or other equity interests that constitute a portion of the Pledged
Collateral are duly authorized, validly issued in accordance with all applicable laws, fully
paid and non-assessable, and represent one hundred percent (100%) of the issued and
outstanding shares of member or other equity interest of Bellagio, LLC and The Mirage
Casino-Hotel. There are no outstanding options, warrants, convertible securities or other
rights, contingent or absolute, to acquire any member or other equity interest of any
Interest Issuer, except as set forth in Schedule 1.

          3. Creation of Security Interest.

               3.1 Pledge of Pledged Collateral. To secure the payment and performance of the Secured
Obligations of the Grantor as and when due, effective upon receipt of the approval of the Nevada
Gaming Commission, the Grantor hereby conveys, pledges, assigns and transfers to the Collateral
Agent, and grants to the Collateral Agent, as agent and representative for the benefit of the
Secured Parties, a security interest (the “Security Interest”) in, all right, title, claim
and interest of the Grantor in and to the Pledged Collateral. Subject to Section 3.3 of
this Agreement, the Security Interest created by this Section 3.1 shall continue in effect
so long
as any Note Obligation is owed to Collateral Agent or any of the Notes remain outstanding.

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Upon receipt of the approval of the Nevada Gaming Commission, the Secured Obligations will be
secured by a valid and enforceable Security Interest in the Pledged Interests, and upon the
delivery to Collateral Agent or its agent of Certificates representing the Pledged Interests, the
Security Interest and the related Lien will be perfected and superior to and prior to the Liens of
all third persons.

               3.2 Delivery of Certain Pledged Collateral. Subject to compliance with applicable
Gaming Laws, Grantor shall cause to be delivered to Collateral Agent or its agent for the benefit
of the Secured Parties (a) the Certificates evidencing the Pledged Interests, (b) the Intercompany
Notes listed on Schedule 2 hereto and (c) any other certificates, instruments or other
agreements now or hereafter representing or evidencing any of the Pledged Collateral. To the extent
required by applicable Gaming Laws, all such Certificates shall be held in the State of Nevada at a
location approved by the Nevada State Gaming Control Board and shall be made available for
inspection by agents or employees of the Nevada State Gaming Control Board immediately upon request
during normal business hours. All Certificates at any time delivered to Collateral Agent for the
benefit of the Secured Parties shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed and undated instruments of transfer or assignment in blank, all in
form and substance reasonably satisfactory to Collateral Agent. Collateral Agent or its agent shall
hold all Certificates and the Intercompany Notes pledged hereunder pursuant to this Agreement
unless and until released in accordance with Section 3.3 of this Agreement.

               3.3 Release of Pledged Collateral. The Security Interest shall be released upon the
terms and conditions of Sections 11.04 and 11.05 of the Indenture. Any release of the Pledged
Collateral shall comply with Section 11.08 of the Indenture. Collateral Agent, at the expense of
Grantor, promptly shall redeliver all Certificates and Intercompany Notes and shall execute and
deliver to Grantor all documents requested by Grantor that are reasonably necessary to release
Pledged Collateral of record whenever Grantor shall be entitled to the release thereof in
accordance with this Section 3.3. The Security Interest shall be released with respect to
the 13% Secured Notes Secured Parties in the event the 13% Secured Notes Obligations are no longer
required to be secured hereby as a result of the release of the Lien on the Pledged Collateral
under the 13% Secured Notes Indenture.

          4. Further Assurances.

               4.1 Subject to compliance with applicable Gaming Laws, the Grantor agrees that at any time,
and from time to time, at its own expense the Grantor will promptly execute, deliver and file (or
authorize Collateral Agent to file) or record all further financing statements, instruments and
documents, and will take all further actions, including, without limitation, causing the issuers
of, or obligors on, any of the Pledged Collateral to so execute, deliver, file or take other
actions, that may be necessary or desirable, or that Collateral Agent reasonably may request, in
order to perfect and protect any pledge or security interest granted hereby or to enable Collateral
Agent to exercise and enforce its rights and remedies hereunder with respect to any Pledged
Collateral and to preserve, protect and maintain the Pledged Collateral and the value thereof,
including, without limitation, payment of all taxes, assessments and other charges imposed on or
relating to the Pledged Collateral other than claims being contested in good faith by
appropriate proceedings diligently conducted. Subject to compliance with applicable Gaming

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Laws, Grantor hereby (a) irrevocably directs the issuers of or obligors on any such Pledged
Collateral, or each securities intermediary, registrar, transfer agent or trustee for any such
Pledged Collateral, to accept the provisions of this Agreement as conclusive evidence of the right
of Collateral Agent to effect any transfer or exercise any right hereunder or with respect to any
such Pledged Collateral, notwithstanding any other notice or direction to the contrary heretofore
or hereafter given by the Grantor or any other Person to any of such parties; and (b) covenants and
agrees to transfer or reinvest any such Pledged Collateral, promptly upon Collateral Agent’s
written request, in such manner as may be deemed necessary or desirable by Collateral Agent to
create and perfect, and to continue and preserve, a security interest in such Pledged Collateral in
favor of Collateral Agent, or the priority, control and exclusivity thereof, free of all other
Liens and claims except as may be permitted by the terms hereof or of the Indenture.

               4.2 The Grantor agrees to use commercially reasonable efforts to obtain all approvals of the
Nevada Gaming Commission or any other Gaming Authority that are required by law for or in
connection with any action or transaction contemplated by this Agreement or by Article 8 or Article
9 of the Uniform Commercial Code as in effect in the State of Nevada and, at Collateral Agent’s
written request after and during the continuance of an Event of Default, to prepare, sign and file
with the appropriate Gaming Authority the transferor’s portion of any application or applications
for consent to the transfer of control thereof necessary or appropriate under applicable Gaming
Laws for approval of any sale or transfer of the Pledged Collateral pursuant to the exercise of
Collateral Agent’s remedies hereunder and under the Note Documents.

          5. Voting Rights; Dividends; etc. So long as no Event of Default shall have occurred
and be continuing, and until Collateral Agent suspends such rights, Grantor will be entitled to
receive the benefit of all distributions and other Proceeds made upon or with respect to the
Collateral by them and to exercise any voting and other consensual rights pertaining to the
Collateral pledged by them; provided, however, that any and all such distributions
and other Proceeds received in the form of capital stock (or other equity interest) shall be, and
the Certificates representing such capital stock (or other equity interest) forthwith shall be
delivered subject to compliance with Gaming Laws to Collateral Agent or its agent to hold as
Pledged Collateral and shall, if received by the Grantor, be received in trust for the benefit of
the Secured Parties, be segregated from the other property of the Grantor, and forthwith be
delivered to Collateral Agent or its agent for the benefit of the Secured Parties as Pledged
Collateral in the same form as so received (with any necessary endorsements) in suitable form for
transfer by delivery or accompanied by executed and undated instruments of transfer or assignment
in blank, all in form and substance reasonably satisfactory to Collateral Agent.

          Upon the occurrence and during the continuance of an Event of Default, at the election of
Collateral Agent or the Noteholders holding a majority in aggregate principal amount of the
Outstanding Notes pursuant to Section 6.12 of the Indenture to suspend such rights:

     (a) Voting Rights. Upon the receipt of all required approvals from any
applicable Gaming Authority, all rights of Grantor to exercise such voting or other
consensual rights shall cease, and all such rights shall become vested in the Collateral
Agent which, to the extent permitted by law, will have the sole right to exercise such
rights.

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     (b) Interest and Distribution Rights. All rights of Grantor to receive all
distributions and other Proceeds made upon or with respect to the Collateral will cease, and
upon the receipt of all required approvals from any applicable Gaming Authority, such cash
dividends, interest and other payments will be paid to Collateral Agent.

          6. Rights During Event of Default. When an Event of Default has occurred and is
continuing, subject to receipt of all required approvals from any applicable Gaming Authority:

               6.1 Proceeds Held in Trust. All distributions and other Proceeds which are received by
the Grantor contrary to the provisions of this Agreement shall be received in trust for the benefit
of the Secured Parties, shall be segregated from other funds of the Grantor, and forthwith shall be
paid over to Collateral Agent for the account of Collateral Agent as Pledged Collateral in the same
form as so received (with any necessary endorsements).

               6.2 Irrevocable Proxy. The Grantor hereby revokes all previous proxies with regard to
the Pledged Securities and, to the extent allowable under applicable Gaming Laws, appoints
Collateral Agent for the benefit of the Secured Parties as its proxyholder to attend and vote at
any and all meetings of the members (or other equity holders, as applicable) of the limited
liability companies (or other entities, as applicable) which issued the Pledged Securities, and any
adjournments thereof, held on or after the date of the giving of this proxy and prior to the
termination of this proxy and to execute any and all written consents of members (or other equity
holders, as applicable) of such limited liability companies (or other entities, as applicable)
executed on or after the date of the giving of this proxy and prior to the termination of this
proxy, with the same effect as if the Grantor had personally attended the meetings or had
personally voted its interests (or other equity interests, as applicable) or had personally signed
the written consents; provided, however, that the proxyholder shall have rights
hereunder only upon the occurrence and during the continuance of an Event of Default under the
Indenture and subject to compliance with Gaming Laws. The Grantor hereby authorizes Collateral
Agent to, subject to compliance with Gaming Laws, substitute another Person as the proxyholder and,
upon the occurrence or during the continuance of any Event of Default, hereby authorizes and
directs the proxyholder to file this proxy and the substitution instrument with the secretary or
other appropriate officer of the appropriate limited liability company or other entity as
applicable. This proxy is coupled with an interest and is irrevocable until such time as the
Security Interest is released pursuant to Section 3.3.

          7. Transfers and Other Liens. The Grantor agrees that, except as permitted under the
Note Documents, it will not (i) sell, assign, exchange, transfer or otherwise dispose of, or
contract to sell, assign, exchange, transfer or otherwise dispose of, or grant any option with
respect to, any of the Pledged Collateral, (ii) create or permit to exist any Lien upon or with
respect to any of the Pledged Collateral, except for Permitted Liens and other encumbrances
permitted pursuant to the Indenture, or (iii) take any action with respect to the Pledged
Collateral which is inconsistent with the provisions or purposes of this Agreement or any other
Note Document.

          8. Collateral Agent Appointed Attorney-in-Fact. The Grantor hereby irrevocably
appoints Collateral Agent for the benefit of the Secured Parties as the Grantor’s attorney-

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in-fact for the following purposes: (a) to do all acts and things and to execute all documents
which Collateral Agent may deem necessary or advisable to perfect and continue perfected the
Security Interest created by this Agreement, and, upon the occurrence and during the continuance of
an Event of Default, to preserve, process, develop, maintain and protect the Pledged Collateral;
(b) upon the occurrence and during the continuance of an Event of Default, to do any and every act
which the Grantor is obligated to do under this Agreement; (c) to prepare, sign, file and record,
in the Grantor’s name, any financing statement covering the Pledged Collateral; and (d) to endorse
and transfer the Pledged Collateral upon foreclosure by Collateral Agent; provided,
however, that Collateral Agent shall be under no obligation whatsoever to take any of the
foregoing actions, and, absent bad faith or actual malice, Collateral Agent shall have no liability
or responsibility for any act taken or omission with respect thereto. The foregoing power of
attorney is coupled with an interest and is irrevocable. The Grantor hereby agrees to repay
promptly upon demand all reasonable costs and expenses incurred or expended by Collateral Agent in
exercising any right or taking any action under this Agreement.

          9. Collateral Agent May Perform Obligations. If the Grantor fails to perform any
Obligation contained herein, Collateral Agent for the benefit of the Secured Parties may, but
without any obligation to do so and without further notice to or demand upon Grantor, perform the
same and take such other action as Collateral Agent may deem necessary or desirable to protect the
Pledged Collateral or Collateral Agent’s Security Interest therein, Collateral Agent being hereby
authorized (without limiting the general nature of the authority hereinabove conferred) to pay,
purchase, contest and compromise any Lien which in the reasonable judgment of Collateral Agent
appears to be prior or superior to Collateral Agent’s Security Interest, and in exercising any such
powers and authority to pay necessary expenses, employ counsel and pay reasonable attorneys’ fees.
The Grantor hereby agrees to repay promptly following demand all sums so expended by Collateral
Agent, together with interest from the date of expenditure at the rates provided for in the
Indenture. Collateral Agent shall not be under any duty or obligation to preserve, maintain or
protect the Pledged Collateral or any of the Grantor’s rights or interest therein, exercise any
voting rights with respect to the Pledged Collateral, whether or not a Default or Event of Default
has occurred or is continuing, or make or give any notices of default, presentments, demands for
performance, notices of non-performance or dishonor, protests, notices of protest or notice of any
other nature whatsoever in connection with the Pledged Collateral on behalf of the Grantor or any
other Person having any interest therein; and neither Collateral Agent nor any noteholder assumes
and none shall be obligated to perform the Secured Obligations of the Grantor, if any, with respect
to the Pledged Collateral.

          10. Reasonable Care. Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially similar to that which Collateral Agent accords its
own property, it being understood that Collateral Agent shall not have any responsibility for
ascertaining or taking action with respect to maturities, calls, conversions, exchanges, tenders or
other matters relative to any Pledged Collateral, whether or not Collateral Agent has or is deemed
to have knowledge of such matters, or taking any necessary steps to preserve rights against any
Person with respect to any Pledged Collateral. The Collateral Agent shall comply with the
conditions, if any, imposed by the Gaming Authority in connection with the approvals of the
Security Interest granted hereunder by the Grantor, including, without limitation, any conditions requiring Collateral Agent to permit representatives of the Gaming Authority to
inspect

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such securities and Certificates. Collateral Agent shall not surrender possession of any
Pledged Collateral to any party other than Grantor without the prior approval of the Gaming
Authority or as otherwise permitted by applicable Gaming Laws.

          11. Events of Default and Remedies.

               11.1 Rights Upon Event of Default. Upon the occurrence and during the continuance of
an Event of Default under the Indenture, Grantor shall be in default hereunder and Collateral Agent
shall have in any jurisdiction where enforcement is sought, in addition to all other rights and
remedies that Collateral Agent may have under this Agreement, under any other Note Document, the
13% Secured Notes, the 13% Secured Notes Indenture and under applicable Law or in equity, all of
its rights and remedies as a secured party under the Uniform Commercial Code as enacted in any such
jurisdiction, and in addition the following rights and remedies, all of which may be exercised with
or without further notice to the Grantor, subject to receipt of all required approvals from any
applicable Gaming Authority:

     (a) to notify any Interest Issuer of any Pledged Securities and any and all other
obligors on any Pledged Collateral that the same has been pledged to Collateral Agent for
the benefit of the Secured Parties and that all distributions and other Proceeds thereon are
to be made directly and exclusively to Collateral Agent for the account of Collateral Agent;
to renew, extend, modify, amend, accelerate, accept partial payments on, make allowances and
adjustments and issue credits with respect to, release, settle, compromise, compound,
collect or otherwise liquidate, on terms acceptable to Collateral Agent, in whole or in
part, the Pledged Collateral and any amounts owing thereon or any guaranty or security
therefor; to enter into any other agreement relating to or affecting the Pledged Collateral;
and to give all consents, waivers and ratifications with respect to the Pledged Collateral
and exercise all other rights (including voting rights), powers and remedies and otherwise
act with respect thereto as if Collateral Agent were the owner thereof;

     (b) to enforce payment and prosecute any action or proceeding with respect to any and
all of the Pledged Collateral and take or bring, in Collateral Agent’s name(s) or in the
name of the Grantor, all steps, actions, suits or proceedings deemed by Collateral Agent
necessary or desirable to effect collection of or to realize upon the Pledged Collateral;

     (c) in accordance with applicable Law, to take possession of the Pledged Collateral
with or without judicial process;

     (d) to endorse, in the name of the Grantor, all checks, notes, drafts, money orders,
instruments and other evidences of payment relating to the Pledged Collateral;

     (e) to transfer any or all of the Pledged Collateral into the name of Collateral Agent
or its nominee or nominees; and

     (f) in accordance with applicable Law (including applicable Gaming Laws), to foreclose
the Liens and Security Interest created under this Agreement or under any other agreement
relating to the Pledged Collateral by any available judicial procedure or

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without judicial
process, and to sell, assign or otherwise dispose of the Pledged Collateral or any part
thereof, either at public or private sale or at any broker’s board or securities exchange,
in lots or in bulk, for cash, on credit or on future delivery, or otherwise, with or without
representations or warranties, and upon such terms as shall be acceptable to Collateral
Agent; all at the sole option of and in the sole discretion of Collateral Agent.

               11.2 Notice of Sale. Collateral Agent shall give Grantor at least 10 days’ written
notice of sale of all or any part of the Pledged Collateral. Subject to compliance with Gaming
Laws, any sale of the Pledged Collateral shall be held at such time or times and at such place or
places as Collateral Agent may determine in the exercise of its sole and absolute discretion.
Collateral Agent may bid (which bid may be, in whole or in part, in the form of cancellation of
Secured Obligations) for and purchase for the account of Collateral Agent or any nominee of
Collateral Agent the whole or any part of the Pledged Collateral. Collateral Agent shall not be
obligated to make any sale of the Pledged Collateral if it shall determine not to do so regardless
of the fact that notice of sale of the Pledged Collateral may have been given. Collateral Agent
may, without notice or publication, adjourn the sale from time to time by announcement at the time
and place fixed for sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned.

               11.3 Private Sales. Subject to compliance with Gaming Laws, upon the occurrence and
during the continuance of an Event of Default under the Indenture, whether or not any of the
Pledged Collateral has been effectively registered under the Securities Act of 1933, as amended, or
other applicable Laws, Collateral Agent may, in its sole and absolute discretion, sell all or any
part of the Pledged Collateral at private sale in such manner and under such circumstances as
Collateral Agent may deem necessary or advisable in order that the sale may be lawfully conducted.
Without limiting the foregoing, Collateral Agent may (i) approach and negotiate with a limited
number of potential purchasers, and (ii) restrict the prospective bidders or purchasers to Persons
who will represent and agree that they are purchasing the Pledged Collateral for their own account
for investment and not with a view to the distribution or resale thereof. In the event that any of
the Pledged Collateral is sold at private sale, the Grantor agrees that if the Pledged Collateral
is sold for a price which Collateral Agent in good faith believes to be reasonable, then, (A) the
sale shall be deemed to be commercially reasonable in all respects, (B) the Grantor shall not be
entitled to a credit against the Secured Obligations in an amount in excess of the purchase price,
and (C) Collateral Agent shall not incur any liability or responsibility to the Grantor in
connection therewith, notwithstanding the possibility that a substantially higher price might have
been realized at a public sale. The Grantor recognizes that a ready market may not exist for
Pledged Collateral which is not regularly traded on a recognized securities exchange or in another
recognized market, and that a sale by Collateral Agent of any such Pledged Collateral for an amount
substantially less than a pro rata share of the fair market value of such Interest Issuer’s assets
minus liabilities may be commercially reasonable in view of the difficulties that may be
encountered in attempting to sell a large amount of Pledged Collateral or Pledged Collateral that
is privately traded.

               11.4 Title of Purchasers. Subject to compliance with Gaming Laws, upon consummation of
any sale of Pledged Collateral pursuant to this Section 11, Collateral Agent shall have the
right to assign, transfer and deliver to the purchaser or purchasers thereof the Pledged Collateral
so sold. Each such purchaser at any such sale shall hold the Pledged

-10-

 

Collateral sold absolutely
free from any claim or right on the part of Grantor or any other Person, and the Grantor hereby
waives (to the extent permitted by applicable Laws) all rights of redemption, stay and appraisal
which it now has or may at any time in the future have under any rule of Law or statute now
existing or hereafter enacted. If the sale of all or any part of the Pledged Collateral is made on
credit or for future delivery, Collateral Agent shall not be required to apply any portion of the
sale price to the Secured Obligations until such amount actually is received by Collateral Agent,
and any Pledged Collateral so sold may be retained by Collateral Agent until the sale price is paid
in full by the purchaser or purchasers thereof. Collateral Agent shall not incur any liability in
case any such purchaser or purchasers shall fail to pay for the Pledged Collateral so sold, and, in
case of any such failure, the Pledged Collateral may be sold again upon like notice.

               11.5 Disposition of Proceeds of Sale. The net cash proceeds resulting from the
collection, liquidation, sale or other disposition of the Pledged Collateral shall be applied,
first, to the costs and expenses (including attorneys’ fees) of retaking, holding, storing,
processing and preparing for sale, selling, collecting and liquidating the Pledged Collateral, and
the like; and thereafter pro rata to the satisfaction of the Secured Obligations (i) as among the
Noteholders, pursuant to Section 6.06 of the Indenture and (ii) as among the 13% Secured Notes
Secured Parties, as set forth in the 13% Secured Notes Indenture. In making the determination and
allocations required by this Section 11.5, the Collateral Agent may conclusively rely upon
information supplied by the 13% Secured Notes Secured Parties or the trustee for the 13% Secured
Notes as to the amounts of unpaid principal and interest and other amounts outstanding with respect
to the 13% Secured Notes Obligations and the Collateral Agent shall have no liability to any of the
Secured Parties for actions taken in reliance on such information. All distributions made by the
Collateral Agent pursuant to this Section 11.5 shall be final, and the Collateral Agent shall have
no duty to inquire as to the application by the 13% Secured Notes Secured Parties or trustee for
the 13% Secured Notes of any amounts distributed to the 13% Secured Notes Secured Parties.

          12. Continuing Effect. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Grantor for liquidation or
reorganization, should the Grantor become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or any significant part of the
Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at
any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to
applicable Law, rescinded or reduced in amount, or must otherwise be restored or returned by
Collateral Agent or any Secured Party, whether as a “voidable preference,” “fraudulent conveyance”
or otherwise (and whether by litigation, settlement, demand or otherwise), all as though such
payment or performance had not been made. In the event that any payment or any part thereof is
rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored or returned.

          13. Regulatory Matters. Collateral Agent, on behalf of Secured Parties, acknowledges
and agrees that:

     (a) In the event that Collateral Agent exercises one or more of the remedies set forth
in Section 11 of this Agreement, including but not limited to re-registration of

-11-

 

the
Pledged Collateral pursuant to applicable Gaming Laws, such exercise of remedies would be
deemed a separate transfer of the Pledged Collateral and would require the separate and
prior approval of the Gaming Authority pursuant to applicable Gaming Laws as in effect on
the date hereof.

     (b) The approval by the Gaming Authority of this Agreement shall not act or be
construed as the approval, either express or implied, for the Collateral Agent to take any
actions or steps provided for in this Agreement for which prior approval of the Gaming
Authority is required, without first obtaining such prior and separate approval of the
Gaming Authority to the extent then required by this Agreement.

          14. Covenant Not To Issue Uncertificated Securities. The Grantor represents and
warrants to Collateral Agent that all of the capital stock (or other equity interests) of Bellagio
and TMCH are securities in certificated form (in each case as contemplated by Article 8 of the
Uniform Commercial Code as in effect in the State of Nevada), and covenants to Collateral Agent
that, subject to the receipt of all required approvals from the applicable Gaming Authority, it
will not cause or permit Bellagio or TMCH (or any other Interest Issuer) to issue any member
interests (or other equity interest) in a form that is not a security, or in any uncertificated
form, or seek to convert all or any part of its existing member interests (or other equity
interest) into instruments or other documents that are not securities, or into securities in
uncertificated form (in each case as contemplated by Article 8 of the Uniform Commercial Code as in
effect in the State of Nevada). The foregoing representations, warranties and covenants shall
survive the execution and delivery of this Agreement.

          15. Covenant Not To Dilute Interests of Collateral Agent in Pledged Securities. The
Grantor represents, warrants and covenants to Collateral Agent that it will not at any time cause
or permit Bellagio or TMCH to issue any additional member interests (or other equity interest), or
any warrants, options or other rights to acquire any additional capital stock (or other equity
interest), if the effect thereof would be to dilute in any way the interests of Collateral Agent in
any Pledged Securities or in any Interest Issuer.

          16. Indemnity. The Grantor agrees to indemnify and hold harmless Collateral Agent, and
each of them, from and against any and all claims, demands, losses, judgments and liabilities
(including without limitation liabilities for penalties) of whatsoever kind or nature, and to
reimburse Collateral Agent for (a) all costs and expenses including, without limitation, attorneys’
fees and expenses and/or costs and expenses associated with, arising out of or in connection with
this Agreement, or any waiver, supplementation, extension, renewal or amendment of any term or
provision hereof, and (b) all costs and expenses including, without limitation, attorneys’ fees and
expenses and/or costs and expenses associated with, arising out of or in connection with the
exercise by Collateral Agent of any right or remedy Granted to it hereunder or under the other Note
Documents (including in connection with any workout, restructuring or bankruptcy, insolvency or
other similar proceeding) or the 13% Secured Notes Indenture; except, in
each case, to the extent arising from the gross negligence or willful misconduct of Collateral
Agent as determined by a court of competent jurisdiction by final and nonappealable judgment. In no
event shall Collateral Agent be liable for any matter or thing in connection with this Agreement
other than to account for monies actually received by Collateral Agent in accordance with the terms
hereof. If and to the extent that the agreements of the Grantor under this Section 16

-12-

 

 are
unenforceable for any reason, the Grantor hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under applicable Law.

          17. Waivers and Consents. The Grantor acknowledges that the Liens created or granted
herein will or may secure obligations of Persons other than the Grantor and, in full recognition of
that fact, the Grantor consents and agrees that Collateral Agent may, but is not obligated to as
determined in its sole discretion, and shall upon the direction of the Noteholders in accordance
with Section 6.12 of the Indenture, at any time and from time to time, without notice or demand,
and without affecting the enforceability or security hereof:

     (a) supplement, modify, amend, extend, renew, accelerate, or otherwise change the time
for payment or the terms of the Notes Obligations or any part thereof, including any
increase or decrease of the rate(s) of interest thereon;

     (b) supplement, modify, amend or waive, or enter into or give any agreement, approval
or consent with respect to, the Notes Obligations or any part thereof or any of the Note
Documents or any additional security or guaranties, or any condition, covenant, default,
remedy, right, representation or term thereof or thereunder;

     (c) accept new or additional instruments, documents or agreements in exchange for or
relative to any of the Note Documents or the Notes Obligations or any part thereof;

     (d) accept partial payments on the Notes Obligations;

     (e) receive and hold additional security or guaranties for the Notes Obligations or any
part thereof;

     (f) release, reconvey, terminate, waive, abandon, subordinate, exchange, substitute,
transfer and enforce any security or guaranties, and apply any security and direct the order
or manner of sale thereof as Collateral Agent in its sole and absolute discretion may
determine;

     (g) release any Person or any guarantor from any personal liability with respect to the
Notes Obligations or any part thereof;

     (h) settle, release on terms satisfactory to Collateral Agent or by operation of
applicable laws or otherwise liquidate or enforce any Notes Obligations and any security or
guaranty therefor in any manner, consent to the transfer of any security and bid and
purchase at any sale; and

     (i) consent to the merger, change or any other restructuring or termination of the
corporate or other existence of Issuer or any other Person, and correspondingly restructure
the Notes Obligations, and any such merger, change, restructuring or termination shall not
affect the liability of the Grantor or the continuing existence of any Lien hereunder, under
any other Loan Document to which the Grantor is a party or the enforceability hereof or
thereof with respect to all or any part of the Notes Obligations;

-13-

 

provided, however, that the requisite written consent of the 13% Secured Notes Secured Parties
pursuant to the 13% Secured Notes Indenture shall be required with respect to any release, waiver,
amendment or other modification of this Agreement that would materially and adversely affect the
rights of the 13% Secured Notes Secured Parties to equally and ratably share in the security
provided for herein with respect to the Pledged Collateral. Except as set forth in this
Section 17, the 13% Secured Notes Secured Parties shall not have any rights to approve any
release, waiver, amendment, modification, charge, discharge or termination with respect to this
Agreement.

          Upon the occurrence of and during the continuance of any Event of Default, Collateral Agent
may enforce this Agreement independently as to the Grantor and independently of any other remedy or
security Collateral Agent at any time may have or hold in connection with the Secured Obligations,
and it shall not be necessary for Collateral Agent to marshal assets in favor of the Grantor or any
other Person or to proceed upon or against and/or exhaust any other security or remedy before
proceeding to enforce this Agreement. The Grantor expressly waives any right to require Collateral
Agent to marshal assets in favor of the Grantor, or any other Person or to proceed against any
other Person or any collateral provided by any other Person, and agrees that Collateral Agent may
proceed against any Person and/or collateral in such order as it shall determine in its sole and
absolute discretion. Collateral Agent may file a separate action or actions against the Grantor,
whether or not action is brought or prosecuted with respect to any other security or against any
other Grantor, Issuer or any other Person, or whether or not any other Person is joined in any such
action or actions. The Grantor agrees that Collateral Agent and Issuer and any Person may deal with
each other in connection with the Secured Obligations or otherwise, or alter any contracts or
agreements now or hereafter existing between any of them, in any manner whatsoever, all without in
any way altering or affecting the validity of, or the pledge or Security Interest granted or
created by, this Agreement. Collateral Agent’s rights hereunder shall be reinstated and revived,
and the enforceability of this Agreement shall continue, with respect to any amount at any time
paid on account of the Secured Obligations which thereafter shall be required to be restored or
returned by Collateral Agent upon the bankruptcy, insolvency or reorganization of the Grantor or
any other Person or otherwise (and whether by litigation, settlement, demand or otherwise), all as
though such amount had not been paid. The Grantor agrees that the Liens created or granted herein
and the enforceability of this Agreement at all times shall remain effective to secure the full
amount of all the Secured Obligations including, without limitation, the amount of all loans and
interest thereon at the rates provided for in the Indenture, the 13% Secured Notes Indenture and
the note(s) thereunder, even though the Secured Obligations, including any part thereof or
any other security or guaranty therefor, maybe or hereafter may become invalid or otherwise
unenforceable as against Issuer or any other Person and whether or not Issuer or any other Person
shall have any personal liability with respect thereto. The Grantor expressly waives any and all
defenses now or hereafter arising or asserted by reason of (a) any disability or other defense of Issuer or any other Person with respect to the Secured
Obligations, (b) the unenforceability or invalidity of any security or guaranty for the Secured
Obligations or the lack of perfection or continuing perfection or failure or subordination of
priority of any security for the Secured Obligations, (c) the cessation for any cause whatsoever of
the liability of Issuer or any other Grantor (other than by reason of the full payment and
performance of all Secured Obligations), (d) any failure of Collateral Agent to marshal assets in
favor of the Grantor or any other Person, (e) except as otherwise provided in this Agreement, any
failure of Collateral Agent to give notice of sale or other disposition of collateral to the
Grantor or any other Person or any

-14-

 

defect in any notice that may be given in connection with any
sale or disposition of collateral, (f) except as otherwise provided in this Agreement, any failure
of Collateral Agent to comply with applicable Laws in connection with the sale or other disposition
of any Pledged Collateral or other security for any Secured Obligation, including, without
limitation, any failure of Collateral Agent to conduct a commercially reasonable sale or other
disposition of any Pledged Collateral or other security for any Secured Obligation, (g) any act or
omission of Collateral Agent or others that directly or indirectly results in or aids the discharge
or release of Issuer or any other Person or the Secured Obligations or any other security or
guaranty therefor by operation of Law or otherwise, (h) any Law which provides that the obligation
of a surety or guarantor must neither be larger in amount nor in other respects more burdensome
than that of the principal or which reduces a surety’s or guarantor’s obligation in proportion to
the principal obligation, (i) any failure of Collateral Agent to file or enforce a claim in any
bankruptcy or other proceeding with respect to any Person, (j) the election by Collateral Agent, in
any bankruptcy proceeding of any Person, of the application or non-application of Section
1111(b)(2) of the United States Bankruptcy Code, (k) any extension of credit or the grant of any
Lien under Section 364 of the United States Bankruptcy Code, (l) any use of cash collateral under
Section 363 of the United States Bankruptcy Code, (m) any agreement or stipulation with respect to
the provision of adequate protection in any bankruptcy proceeding of any Person, (n) the avoidance
of any Lien in favor of Collateral Agent for any reason, (o) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, liquidation or dissolution proceeding commenced
by or against any Person, including any discharge of, or bar or stay against collecting,
all or any of the Secured Obligations (or any interest thereon) in or as a result of any such
proceeding, (p) to the extent permitted by applicable Law, the benefits of any form of one-action
rule under any applicable Law, or (q) any action taken by Collateral Agent that is authorized by
this Section 1 or any other provision of any Loan Document. Until no part of any commitment to lend
remains outstanding and all of the Secured Obligations have been paid and performed in full,
Grantor shall have no right of subrogation, contribution, reimbursement or indemnity, and the
Grantor expressly waives any right to enforce any remedy that Collateral Agent now has or hereafter
may have against any other Person and waives the benefit of, or any right to participate in, any
other security now or hereafter held by Collateral Agent. The Grantor waives all rights and
defenses arising out of an election of remedies by Collateral Agent, even though that election of
remedies, such as a non-judicial foreclosure with respect to security for the Secured Obligations
has destroyed the Grantor’s rights of subrogation and reimbursement against the principal. The
Grantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or
performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of
dishonor and all other notices or demands of any kind or nature whatsoever with respect to the
Secured Obligations, and all notices of acceptance of this Agreement or of the existence, creation
or incurring of new or additional Secured Obligations.

          Notwithstanding anything contained herein to the contrary, the right of the Collateral Agent
to perform any discretionary act enumerated herein or in any other Collateral Documents to which it
is a party (including the right to consent to or approve of any action or document which requires
their consent or approval and the right to waive any provision of, or consent to any change or
amendment to, any of the Collateral Documents) shall not be construed as giving rise to any
expressed or implied duty owed by the Collateral Agent, and the Collateral Agent shall not be
answerable in connection with any of the foregoing for, or have any liability whatsoever as a
result of, (i) its refusal to perform, consent or approve of such discretionary acts without

-15-

 

 the
prior consent or direction of the applicable percentage of the Noteholders that would be required
if such consent or direction was obtained under the Indenture or Collateral documents, as the case
may be, or (ii) its performance of any such discretionary act (except for any gross negligence or
willful misconduct in the performance of such acts). In connection with any such discretionary
acts, the Collateral Agent may in its sole discretion (but shall not, except as otherwise provided
in the Indenture or as otherwise required by applicable Law, have any obligation to) request the
approval of the Noteholders.

          The obligations of the Collateral Agent to the 13% Secured Notes Secured Parties hereunder and
under the other Collateral Documents shall be limited solely to (i) holding the Pledged Collateral
for the benefit of the 13% Secured Notes Secured Parties for so long as (A) any Notes Obligations
remain outstanding and (B) any 13% Secured Notes Obligations are secured by such Pledged Collateral
and (ii) distributing any proceeds received by the Collateral Agent from the sale, collection or
realization of the Pledged Collateral to the 13% Secured Notes Secured Parties in respect of the
13% Secured Notes Obligations in accordance with the terms of this Agreement. The 13% Secured
Notes Secured Parties shall not be entitled to exercise (or direct the Collateral Agent to
exercise) any rights or remedies hereunder with respect to the 13% Secured Notes Obligations,
including without limitation the right to enforce the security interest in the Pledged Collateral,
request any action, institute proceedings, give any instructions, make any election, give any
notice to account debtors, make collections, sell or otherwise foreclose on any portion of the
Pledged Collateral or execute any amendment, supplement, or acknowledgment hereof or of any other
Collateral Document. This Agreement shall not create any liability of the Collateral Agent or the
Noteholders to any of the 13% Secured Notes Secured Parties by reason of actions taken with respect
to the creation, perfection or continuation of the security interest on the Collateral, actions
with respect to the occurrence of an Event of Default, actions with respect to the foreclosure
upon, sale, release, or depreciation of, or failure to realize upon, any of the Collateral or
action with respect to the collection of any claim for all or any part of the Secured Obligations
from any account debtor, guarantor or any other party or the valuation, use or protection of the
Pledged Collateral. By acceptance of the benefits under this Agreement and the other Collateral
Documents, the 13% Secured Notes Secured Parties will be deemed to have acknowledged and agreed
that the provisions of the preceding sentence are intended to induce the Noteholders to permit such
persons to be Secured Parties under this Agreement and certain of the other Collateral Documents
and are being relied upon by the Noteholders as consideration therefor. The Collateral Agent shall
not be required to ascertain or inquire as to the performance by the Issuer or any other obligor of
the 13% Secured Notes Obligations.

          Notwithstanding anything to the contrary herein, nothing in this Agreement shall or shall be
construed to (i) result in the security interest in the Pledged Collateral securing the
13% Secured Notes Obligations less than equally and ratably with the Notes Obligations
pursuant to the 13% Secured Notes Indenture to the extent required or (ii) modify or affect the
rights of the 13% Secured Notes Secured Parties to receive the pro rata share specified in Section
11.5 of any proceeds of any collection or sale of Collateral.

          The parties hereto agree that the 13% Secured Notes Obligations and the Notes Obligations are,
and will be, equally and ratably secured with each other by the Liens on the Pledged Collateral,
and that it is their intention to give full effect to the equal and ratable provisions of the 13%
Secured Notes Indenture, as in effect on the date hereof. To the extent that the

-16-

 

rights and
benefits herein or in any other Collateral Document conferred on the 13% Secured Notes Secured
Parties shall be held to exceed the rights and benefits required so to be conferred by such
provisions, such rights and benefits shall be limited so as to provide such 13% Secured Notes
Secured Parties only those rights and benefits that are required by such provisions. Any and all
rights not herein expressly given to the 13% Secured Notes Secured Parties are expressly reserved
to the Collateral Agent and the Noteholders.

          18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEVADA.

          19. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which, taken together, shall constitute one and the
same agreement.

          20. Additional Powers and Authorization. The Collateral Agent has been appointed as
the Collateral Agent hereunder pursuant to the Indenture and shall be entitled to the benefits of
the Indenture and the other Note Documents. By accepting the benefits of this Agreement and the
other Collateral Documents, each 13% Secured Notes Secured Party hereby appoints the Collateral
Agent, to serve as collateral agent of the 13% Secured Notes Secured Parties under each of this
Agreement and the other Collateral Documents on the terms set forth herein and in the other
Collateral Documents. Notwithstanding anything contained herein to the contrary, the Collateral
Agent may employ agents, trustees, or attorneys-in-fact and may vest any of them with any property
(including, without limitation, the Pledged Collateral), title, right or power deemed necessary for
the purposes of such appointment.

          21. Notices. The Grantor hereby irrevocably appoints Issuer as its agent for the
purpose of receiving notices hereunder, and agrees that the Grantor conclusively shall be deemed to
have received any notice when such notice has been given to Issuer in the manner provided for in
the Indenture.

          22. Consent To Transfer of Pledged Collateral. Notwithstanding any restrictions or
prohibitions on assignment, transfer or other hypothecation of the Pledged Collateral contained in
any articles of organization, articles or certificate of incorporation, operating agreement,
by-laws, shareholder agreement or any similar instrument (a) with respect to Grantor or any
Subsidiary of the Grantor or (b) otherwise entered into by the Grantor or any other party which may
from time to time become a Grantor hereunder, the Grantor hereby consents to (i) the pledge of the
Pledged Collateral hereunder, (ii) the assignment, pledge, transfer or other hypothecation of the Pledged Collateral in connection with this Agreement or (iii) the exercise
of any rights or remedies hereunder, including transfers to the Collateral Agent or third parties
pursuant to foreclosure or other exercise of remedies.

          23. WAIVER OF JURY TRIAL. THE GRANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER NOTE DOCUMENT OR
THE TRANSACTIONS

-17-

 

CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). THE GRANTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER NOTE DOCUMENTS BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          24. Rights, Privileges and Protections. The rights, privileges, protections,
immunities and benefits given to the Trustee by the terms of the Indenture, including, without
limitation, its rights to be reimbursed or indemnified, are extended to, and shall be enforceable
by, the Trustee in its capacity as Collateral Agent hereunder, and each agent, custodian and other
Person employed to act hereunder.

[The remainder of this page is intentionally left blank — signature page follows]

-18-

 

          IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly executed as of the date
first above written.

	 	 	 	 	 
	 	“Grantor”

MIRAGE RESORTS INCORPORATED,

a Nevada corporation

 	 
	 	By:  	/s/
John M. McManus
 	 
	 	 	Name:  	John M. McManus 	 
	 	 	Title:  	Assistant Secretary 	 
	 

ACCEPTED AND AGREED

AS OF THE DATE FIRST

ABOVE WRITTEN:

“Collateral Agent”

U.S. Bank National Association

	 	 	 	 	 
	 	 	 
	 	By:  	/s/
Raymond S. Haverstock
 	 
	 	 	Name:  	Raymond S. Haverstock 	 
	 	 	Title:  	Vice President 	 
	 

-19-ex4-1.htm

     

    EXHIBIT
4.1

     

     

     

    
      
        

      

    
      

       

      

    

    INDENTURE

     

    Dated as
of May 19, 2009

     

    Among

     

    CALPINE
CONSTRUCTION FINANCE COMPANY, L.P.,

    CCFC
FINANCE CORP.,

     

    as
Issuers

     

    THE
GUARANTORS NAMED HEREIN

     

    and

     

    WILMINGTON
TRUST COMPANY,

     

    as
Trustee

    

     

    8.00%
SENIOR SECURED NOTES DUE 2016

     

    
      

       

      

    

     

      
        

      

    

     

     

    
      
        
          
            
              	
                       

                    

            

            

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    CROSS-REFERENCE
TABLE*

     

    
      	
              Trust
      Indenture Act Section

            	 
      	
              Indenture
      Section

            
	 
      	 
      	 
      
	
              310(a)(1)

            	 
      	
              7.10

            
	
              (a)(2)

            	 
      	
              7.10

            
	
              (a)(3)

            	 
      	
              N.A.

            
	
              (a)(4)

            	 
      	
              N.A.

            
	
              (a)(5)

            	 
      	
              7.10

            
	
              (b)

            	 
      	
              7.10

            
	
              (c)

            	 
      	
              N.A.

            
	
              311(a)

            	 
      	
              7.11

            
	
              (b)

            	 
      	
              7.11

            
	
              (c)

            	 
      	
              N.A.

            
	
              312(a)

            	 
      	
              2.05

            
	
              (b)

            	 
      	
              14.03

            
	
              (c)

            	 
      	
              14.03

            
	
              313(a)

            	 
      	
              7.06

            
	
              (b)(1)

            	 
      	
              N.A.

            
	
              (b)(2)

            	 
      	
              7.06;
      7.07

            
	
              (c)

            	 
      	
              7.06;
      14.02

            
	
              (d)

            	 
      	
              7.06

            
	
              314(a)

            	 
      	
              4.03;14.02;
      14.05

            
	
              (b)

            	 
      	
              N.A.

            
	
              (c)(1)

            	 
      	
              14.04

            
	
              (c)(2)

            	 
      	
              14.04

            
	
              (c)(3)

            	 
      	
              N.A.

            
	
              (d)

            	 
      	
              N.A.

            
	
              (e)

            	 
      	
              14.05

            
	
              (f)

            	 
      	
              N.A.

            
	
              315(a)

            	 
      	
              7.01

            
	
              (b)

            	 
      	
              7.05;
      14.02

            
	
              (c)

            	 
      	
              7.01

            
	
              (d)

            	 
      	
              7.01

            
	
              (e)

            	 
      	
              6.14

            
	
              316(a)(last
      sentence)

            	 
      	
              2.09

            
	
              (a)(1)(A)

            	 
      	
              6.05

            
	
              (a)(1)(B)

            	 
      	
              6.04

            
	
              (a)(2)

            	 
      	
              N.A.

            
	
              (b)

            	 
      	
              6.07

            
	
              (c)

            	 
      	
              2.12;
      9.04

            
	
              317(a)(1)

            	 
      	
              6.08

            
	
              (a)(2)

            	 
      	
              6.12

            
	
              (b)

            	 
      	
              2.04

            
	
              318(a)

            	 
      	
              14.01

            
	
              (b)

            	 
      	
              N.A.

            
	
              (c)

            	 
      	
              14.01

            

    

    

    N.A.
means not applicable.

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

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    TABLE OF
CONTENTS

    

    

    
      	 
      	
              Page

            
	 
      	 
      
	
              ARTICLE
      1

            	 
      
	 
      	 
      
	
              DEFINITIONS
      AND INCORPORATION BY REFERENCE

            	 
      

    

    

    
      	
              Section
      1.01

            	
              Definitions

            	
              1

            
	
              Section
      1.02

            	
              Other
      Definitions

            	
              29

            
	
              Section
      1.03

            	
              Incorporation
      by Reference of Trust Indenture Act

            	
              29

            
	
              Section
      1.04

            	
              Rules
      of Construction.

            	
              30

            
	
              Section
      1.05

            	
              Acts
      of Holders

            	
              30

            

    

    

    
      	
              ARTICLE
      2

            	 
      
	 
      	 
      
	
              THE
      NOTES

            	 
      

    

    

    
      	
              Section
      2.01

            	
              Form
      and Dating; Terms

            	
              32

            
	
              Section
      2.02

            	
              Execution
      and Authentication

            	
              33

            
	
              Section
      2.03

            	
              Registrar
      and Paying Agent

            	
              34

            
	
              Section
      2.04

            	
              Paying
      Agent to Hold Money in Trust

            	
              34

            
	
              Section
      2.05

            	
              Holder
      Lists

            	
              34

            
	
              Section
      2.06

            	
              Transfer
      and Exchange

            	
              34

            
	
              Section
      2.07

            	
              Replacement
      Notes

            	
              43

            
	
              Section
      2.08

            	
              Outstanding
      Notes

            	
              43

            
	
              Section
      2.09

            	
              Treasury
      Notes

            	
              43

            
	
              Section
      2.10

            	
              Temporary
      Notes

            	
              44

            
	
              Section
      2.11

            	
              Cancellation

            	
              44

            
	
              Section
      2.12

            	
              Defaulted
      Interest

            	
              44

            
	
              Section
      2.13

            	
              CUSIP
      Numbers; ISIN Numbers

            	
              45

            

    

    

    
      	
              ARTICLE
      3

            	 
      
	 
      	 
      
	
              REDEMPTION

            	 
      

    

    

    
      	
              Section
      3.01

            	
              Notices
      to Trustee

            	
              45

            
	
              Section
      3.02

            	
              Selection
      of Notes to Be Redeemed or Purchased

            	
              45

            
	
              Section
      3.03

            	
              Notice
      of Redemption

            	
              46

            
	
              Section
      3.04

            	
              Effect
      of Notice of Redemption

            	
              46

            
	
              Section
      3.05

            	
              Deposit
      of Redemption or Purchase Price

            	
              47

            
	
              Section
      3.06

            	
              Notes
      Redeemed or Purchased in Part

            	
              47

            
	
              Section
      3.07

            	
              Optional
      Redemption

            	
              47

            
	
              Section
      3.08

            	
              Mandatory
      Redemption

            	
              48

            
	
              Section
      3.09

            	
              Offers
      to Repurchase by Application of Excess Proceeds

            	
              49

            

    

    

    

    
      
        
           

        

        
          -i-

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
              Page

            
	 
      	 
      
	
              ARTICLE
      4

            	 
      
	 
      	 
      
	
              COVENANTS

            	 
      

    

    

    
      	
              Section
      4.01

            	
              Payment
      of Notes

            	
              50

            
	
              Section
      4.02

            	
              Maintenance
      of Office or Agency

            	
              51

            
	
              Section
      4.03

            	
              Reports

            	
              51

            
	
              Section
      4.04

            	
              Compliance
      Certificate

            	
              51

            
	
              Section
      4.05

            	
              Taxes

            	
              52

            
	
              Section
      4.06

            	
              Stay,
      Extension and Usury Laws

            	
              52

            
	
              Section
      4.07

            	
              Limitation
      on Restricted Payments

            	
              52

            
	
              Section
      4.08

            	
              Dividend
      and Other Payment Restrictions Affecting Restricted
      Subsidiaries

            	
              56

            
	
              Section
      4.09

            	
              Limitation
      on Incurrence of Indebtedness and Issuance of Preferred
    Stock

            	
              58

            
	
              Section
      4.10

            	
              Asset
      Sales

            	
              61

            
	
              Section
      4.11

            	
              Transactions
      with Affiliates

            	
              63

            
	
              Section
      4.12

            	
              Liens

            	
              65

            
	
              Section
      4.13

            	
              Corporate
      Existence

            	
              65

            
	
              Section
      4.14

            	
              Offer
      to Repurchase upon Change of Control

            	
              66

            
	
              Section
      4.15

            	
              Changes
      in Covenants When Notes Rated Investment Grade

            	
              67

            
	
              Section
      4.16

            	
              Sale
      and Leaseback

            	
              67

            
	
              Section
      4.17

            	
              Business
      Activities

            	
              68

            
	
              Section
      4.18

            	
              Maintenance
      of Properties; Insurance

            	
              68

            
	
              Section
      4.19

            	
              Additional
      Subsidiary Guarantees; Further Assurances; Insurance

            	
              68

            
	
              Section
      4.20

            	
              Restriction
      on Activities of CCFC Finance

            	
              69

            
	
              Section
      4.21

            	
              Designation
      of Restricted and Unrestricted Subsidiaries

            	
              69

            
	
              Section
      4.22

            	
              Payments
      for Consents

            	
              69

            

    

    

    
      	
              ARTICLE
      5

            	 
      
	 
      	 
      
	
              SUCCESSORS

            	 
      

    

    

    
      	
              Section
      5.01

            	
              Merger,
      Consolidation or Sale of Assets

            	
              69

            
	
              Section
      5.02

            	
              Successor
      Corporation Substituted

            	
              71

            

    

    

    
      	
              ARTICLE
      6

            	 
      
	 
      	 
      
	
              DEFAULTS
      AND REMEDIES

            	 
      

    

    

    
      	
              Section
      6.01

            	
              Events
      of Default

            	
              71

            
	
              Section
      6.02

            	
              Acceleration

            	
              73

            
	
              Section
      6.03

            	
              Other
      Remedies

            	
              73

            
	
              Section
      6.04

            	
              Waiver
      of Past Defaults

            	
              73

            
	
              Section
      6.05

            	
              Control
      by Majority

            	
              73

            
	
              Section
      6.06

            	
              Limitation
      on Suits

            	
              74

            
	
              Section
      6.07

            	
              Rights
      of Holders of Notes to Receive Payment

            	
              74

            
	
              Section
      6.08

            	
              Collection
      Suit by Trustee

            	
              74

            
	
              Section
      6.09

            	
              Restoration
      of Rights and Remedies

            	
              74

            
	
              Section
      6.10

            	
              Rights
      and Remedies Cumulative

            	
              75

            
	
              Section
      6.11

            	
              Delay
      or Omission Not Waiver

            	
              75

            
	
              Section
      6.12

            	
              Trustee
      May File Proofs of Claim

            	
              75

            

    

    

    

    
      
        
           

        

        
          -ii-

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	 
      	
              Page

            
	 
      	 
      	 
      
	
              Section
      6.13

            	
              Priorities

            	
              76

            
	
              Section
      6.14

            	
              Undertaking
      for Costs

            	
              76

            
	
              Section
      6.15

            	
              Appointment
      and Authorization of Trustee as Collateral Trustee.

            	
              76

            

    

    

    
      	
              ARTICLE
      7

            	 
      
	 
      	 
      
	
              TRUSTEE

            	 
      

    

    

    
      	
              Section
      7.01

            	
              Duties
      of Trustee

            	
              77

            
	
              Section
      7.02

            	
              Rights
      of Trustee

            	
              78

            
	
              Section
      7.03

            	
              Individual
      Rights of Trustee

            	
              79

            
	
              Section
      7.04

            	
              Trustee’s
      Disclaimer

            	
              79

            
	
              Section
      7.05

            	
              Notice
      of Defaults

            	
              79

            
	
              Section
      7.06

            	
              Reports
      by Trustee to Holders of the Notes

            	
              79

            
	
              Section
      7.07

            	
              Compensation
      and Indemnity

            	
              80

            
	
              Section
      7.08

            	
              Replacement
      of Trustee

            	
              80

            
	
              Section
      7.09

            	
              Successor
      Trustee by Merger, etc

            	
              81

            
	
              Section
      7.10

            	
              Eligibility;
      Disqualification

            	
              81

            
	
              Section
      7.11

            	
              Preferential
      Collection of Claims Against Issuers

            	
              82

            
	
              Section
      7.12

            	
              Collateral
      Trustee

            	
              82

            
	
              Section
      7.13

            	
              Co-Trustees;
      Separate Trustee; Collateral Trustee

            	
              82

            

    

    

    
      	
              ARTICLE
      8

            	 
      
	 
      	 
      
	
              LEGAL
      DEFEASANCE AND COVENANT DEFEASANCE

            	 
      

    

    

    
      	
              Section
      8.01

            	
              Option
      to Effect Legal Defeasance or Covenant Defeasance

            	
              83

            
	
              Section
      8.02

            	
              Legal
      Defeasance and Discharge

            	
              84

            
	
              Section
      8.03

            	
              Covenant
      Defeasance

            	
              84

            
	
              Section
      8.04

            	
              Conditions
      to Legal or Covenant Defeasance

            	
              85

            
	
              Section
      8.05

            	
              Deposited
      Money and Government Securities to Be Held in Trust; Other

                   Miscellaneous
      Provisions

            	
              86

            
	
              Section
      8.06

            	
              Repayment
      to Issuers

            	
              86

            
	
              Section
      8.07

            	
              Reinstatement

            	
              86

            

    

    

    
      	
              ARTICLE
      9

            	 
      
	 
      	 
      
	
              AMENDMENT,
      SUPPLEMENT AND WAIVER

            	 
      

    

    

    
      	
              Section
      9.01

            	
              Without
      Consent of Holders of Notes

            	
              87

            
	
              Section
      9.02

            	
              With
      Consent of Holders of Notes

            	
              88

            
	
              Section
      9.03

            	
              Compliance
      with Trust Indenture Act

            	
              89

            
	
              Section
      9.04

            	
              Revocation
      and Effect of Consents

            	
              90

            
	
              Section
      9.05

            	
              Notation
      on or Exchange of Notes

            	
              90

            
	
              Section
      9.06

            	
              Trustee
      to Sign Amendments, etc

            	
              90

            

    

    

    

    
      
        
           

        

        
          -iii-

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
              Page

            
	 
      	 
      
	
              ARTICLE
      10

            	 
      
	 
      	 
      
	
              SECURITY

            	 
      

    

    

    
      	
              Section
      10.01

            	
              Security

            	
              91

            
	
              Section
      10.02

            	
              Further
      Assurances

            	
              91

            
	
              Section
      10.03

            	
              Collateral
      Trustee

            	
              92

            
	
              Section
      10.04

            	
              Security
      Documents and Guarantee

            	
              92

            
	
              Section
      10.05

            	
              Release
      of Security Interests

            	
              92

            

    

    

    
      	
              ARTICLE
      11

            	 
      
	 
      	 
      
	
              COLLATERAL
      SHARING

            	 
      

    

    

    
      	
              Section
      11.01

            	
              Equal
      and Ratable Lien Sharing by Holders of Notes and Holders of Other Parity
      Secured Debt

            	
              94

            
	
              Section
      11.02

            	
              Enforcement
      of Security Interests

            	
              94

            
	
              Section
      11.03

            	
              Amendment
      and Supplement

            	
              95

            

    

    

    
      	
              ARTICLE
      12

            	 
      
	 
      	 
      
	
              GUARANTEES

            	 
      

    

    

    
      	
              Section
      12.01

            	
              Guarantee

            	
              95

            
	
              Section
      12.02

            	
              Limitation
      on Guarantor Liability

            	
              96

            
	
              Section
      12.03

            	
              Execution
      and Delivery

            	
              96

            
	
              Section
      12.04

            	
              Subrogation

            	
              97

            
	
              Section
      12.05

            	
              Benefits
      Acknowledged

            	
              97

            
	
              Section
      12.06

            	
              Release
      of Guarantees

            	
              97

            
	
              Section
      12.07

            	
              Guarantors
      May Consolidate, etc. on Certain Terms

            	
              98

            

    

    

    
      	
              ARTICLE
      13

            	 
      
	 
      	 
      
	
              SATISFACTION
      AND DISCHARGE

            	 
      

    

    

    
      	
              Section
      13.01

            	
              Satisfaction
      and Discharge

            	
              99

            
	
              Section
      13.02

            	
              Application
      of Trust Money

            	
              100

            

    

    

    
      	
              ARTICLE
      14

            	 
      
	 
      	 
      
	
              MISCELLANEOUS

            	 
      

    

    

    
      	
              Section
      14.01

            	
              Trust
      Indenture Act Controls

            	
              100

            
	
              Section
      14.02

            	
              Notices

            	
              100

            
	
              Section
      14.03

            	
              Communication
      by Holders of Notes with Other Holders of Notes

            	
              101

            
	
              Section
      14.04

            	
              Certificate
      and Opinion as to Conditions Precedent

            	
              101

            
	
              Section
      14.05

            	
              Statements
      Required in Certificate or Opinion

            	
              101

            
	
              Section
      14.06

            	
              Rules
      by Trustee and Agents

            	
              102

            
	
              Section
      14.07

            	
              No
      Personal Liability of Directors, Officers, Employees and
      Stockholders

            	
              102

            
	
              Section
      14.08

            	
              Governing
      Law

            	
              102

            

    

    

    

    
      
        
           

        

        
          -iv-

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	 
      	
              Page

            
	 
      	 
      	 
      
	
              Section
      14.09

            	
              Waiver
      of Jury Trial

            	
              102

            
	
              Section
      14.10

            	
              Force
      Majeure

            	
              102

            
	
              Section
      14.11

            	
              No
      Adverse Interpretation of Other Agreements

            	
              103

            
	
              Section
      14.12

            	
              Successors

            	
              103

            
	
              Section
      14.13

            	
              Severability

            	
              103

            
	
              Section
      14.14

            	
              Counterpart
      Originals

            	
              103

            
	
              Section
      14.15

            	
              Table
      of Contents, Headings, etc.

            	
              103

            

    

    

    

    EXHIBITS

     

    
      	
              Exhibit A

            	
              Form
      of Note

            	 
      
	
              Exhibit B

            	
              Form
      of Certificate of Transfer

            	 
      
	
              Exhibit C

            	
              Form
      of Certificate of Exchange

            	 
      
	
              Exhibit D

            	
              Form
      of Supplemental Indenture to Be Delivered by Subsequent
      Guarantors

            	 
      

    

    

    

    
      
        
           

        

        
          -v-

          
            

          

        

        
           

        

      

    

    

    INDENTURE,
dated as of May 19, 2009, among Calpine Construction Finance Company, L.P.
(“CCFC”), a
Delaware limited partnership, CCFC Finance Corp. (“CCFC Finance Corp.”),
a Delaware corporation (each an “Issuer” and,
collectively, the “Issuers”), the
Guarantors (as defined below), Wilmington Trust Company, as Trustee and
Wilmington Trust Company, as Collateral Trustee.

     

    W I T N E S S E T H

     

    WHEREAS,
the Issuers have duly authorized the creation of an issue of $1,000,000,000
aggregate principal amount of 8.00% Senior Secured Notes due 2016 (the “Initial
Notes”);

     

    WHEREAS,
the Issuers and the Guarantors have duly authorized the execution and delivery
of this Indenture.

     

    NOW,
THEREFORE, the Issuers, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the Notes.

     

    ARTICLE
1

     

    DEFINITIONS
AND INCORPORATION BY REFERENCE

     

    
      	
              Section
      1.01  

            	
              Definitions.

            

    

     

    “144A Global Note”
means a Global Note substantially in the form of Exhibit A
hereto, bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.

     

    “Acquired Debt” means,
with respect to any specified Person:

     

    (1)           Indebtedness
of any other Person existing at the time such other Person is merged with or
into or became a Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of, such other
Person merging with or into, or becoming a Restricted Subsidiary of, such
specified Person; and

     

    (2)           Indebtedness
secured by a Lien encumbering any asset acquired by such specified
Person.

     

    “Act of Secured
Debtholders” has the meaning given to it in the Security
Documents.

     

    “Actionable Default”
has the meaning given to it in the Security Documents.

     

    “Actionable Default
Period” has the meaning given to it in the Security
Documents.

     

    “Additional Notes”
means additional Notes (other than the Initial Notes) issued from time to time
under this Indenture in accordance with the terms hereof.

     

    “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 purposes of this definition, “control,” as used with
respect to any Person, means the possession, directly or indi-

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    rectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise; provided that a
Person will be deemed to be an Affiliate if the Issuers have knowledge that such
Person beneficially owns 10% or more of the Voting Stock of any
Issuer.  For purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” have correlative
meanings.

     

    “Agent” means any
Registrar or Paying Agent.

     

    “Applicable
Procedures” means, with respect to any transfer or exchange of or for
beneficial interests in any Global Note, the rules and procedures of the
Depositary that apply to such transfer or exchange.

     

    “Asset Sale”
means:

     

    (1)           the
sale, lease, conveyance or other disposition of any assets; provided that the
sale, conveyance or other disposition of all or substantially all of the assets
of the Issuers and their Restricted Subsidiaries taken as a whole will be
governed by the provisions of Section 4.14 and/or
Section 5.01
and not Section
4.10; and

     

    (2)           the
issuance of Equity Interests in any of the Issuers’ Restricted
Subsidiaries.

     

    Notwithstanding
the preceding, none of the following items will be deemed to be an Asset
Sale:

     

    (1)           any
single transaction or series of related transactions that involves assets having
a Fair Market Value (calculated at the time of the relevant transaction) of less
than the greater of (x) $40.0 million and (y) 2.0% of Total
Assets;

     

    (2)           a
transfer of assets between or among the Issuers and any of their Restricted
Subsidiaries;

     

    (3)           an
issuance of Equity Interests by a Restricted Subsidiary to the Issuers and any
of their Restricted Subsidiaries;

     

    (4)           the
sale or lease of products, services or accounts receivable (including power,
capacity, fuel or emission credits) 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, services or accounts receivable that is material to
the Issuers and their Restricted Subsidiaries, as the case may be, shall not
alone cause such disposition not to be in the ordinary course of business) and
any sale or other disposition of damaged, worn out or obsolete assets or assets
no longer used or useful or desirable in the Issuers or any of their Restricted
Subsidiaries’ business;

     

    (5)           the
sale or other disposition of cash or Cash Equivalents;

     

    (6)           a
Restricted Payment that does not violate Section 4.07 or a
Permitted Investment;

     

    (7)           a
disposition resulting from any condemnation or other taking, or temporary or
permanent requisition, of any property, any interest therein or right
appurtenant thereto, or any change of grade affecting any property, in each
case, as the result of the exercise of any right of condemnation or eminent
domain, including any sale or other transfer to a Governmental
Author-

     

    

    
      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

    

    

    ity in
lieu of, or in anticipation of, any of the foregoing events; provided that if such
disposition involves assets having a Fair Market Value in excess of $40.0
million, any cash proceeds received in connection therewith are treated as Net
Proceeds of an Asset Sale;

     

    (8)           any
exchange of like property for use in a Permitted Business;

     

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

     

    (10)         a
disposition of assets (other than any assets securing Parity Secured Debt) in
connection with a foreclosure, transfer or deed in lieu of foreclosure or other
exercise of remedial action;

     

    (11)         any
disposition of products, services or accounts receivable (including power,
capacity, fuel or emission credits) or other obligation pursuant to the Power
Purchase and Sale Agreement with South Texas Electric Cooperative, Inc., dated
May 22, 1998, as in effect on the Issue Date;

     

    (12)         the
transfer of an undivided interest in the Magic Valley Generating Center in
Edinburg, Texas pursuant to the purchase option set forth in Article XIV of the
Power Purchase and Sale Agreement with South Texas Electric Cooperative, Inc.,
dated May 22, 1998, as in effect on the Issue Date;

     

    (13)         any
disposition of that certain portion of the transmission service under the
Service Agreement for Point to Point Transmission between Bonneville Power
Administration and Hermiston Power LLC, successor in interest to Hermiston Power
Partnership, for Transmission from the John Day Substation and Big Eddy POI to
COB and NOB;

     

    (14)         any
disposition of the transportation capacity owned by CCFC on Gulfstream Natural
Gas System, L.L.C.;

     

    (15)         any
disposition of the rights to the Purchase Option for the pipeline system more
fully described in the Agreement to Construct, Lease, and Operate Natural Gas
Pipeline Facilities between Tejas Gas Pipeline, L.P. and Brazos Valley Energy
LLC, successor in interest to Brazos Valley Energy LP, dated June 26,
2001;

     

    (16)         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;

     

    (17)         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 CCFC and its
Restricted Subsidiaries; and

     

    (18)         the
trading and sharing of parts and components for equipment, tools and
non-material equipment, among CCFC and its Affiliates, in the ordinary course of
business and consistent with past practices of the relevant Persons, including
for purposes of spare or replacement parts.

     

    “Attributable Debt” in
respect of a sale and leaseback transaction means, at the time of determination,
the present value of the obligation of the lessee for net rental payments during
the remain-

     

    

    
      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

    

    

    ing term
of the lease included in such sale and leaseback transaction including any
period for which such lease has been extended or may, at the option of the
lessor, be extended.  Such present value shall be calculated using a
discount rate equal to the rate of interest implicit in such transaction,
determined in accordance with GAAP; provided, however, that if such
sale and leaseback transaction results in a Capital Lease Obligation, the amount
of Indebtedness represented thereby will be determined in accordance with the
definition of “Capital Lease Obligation.”

     

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

     

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

     

    “Beneficial Owner” has
the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the
Exchange Act.  The terms “Beneficially Owns” and “Beneficially Owned”
have a corresponding meaning.

     

    “Board of Directors”
means:

     

    (1)           with
respect to a corporation, the board of directors of the corporation or any
committee thereof duly authorized to act on behalf of such board;

     

    (2)           with
respect to a partnership, the Board of Directors of the general partner of the
partnership;

     

    (3)           with
respect to a limited liability company, the managing member or members or any
controlling committee of managing members or Board of Directors thereof;
and

     

    (4)           with
respect to any other Person, the board or committee of such Person serving a
similar function.

     

    “Board Resolution”
means a resolution duly adopted by the Board of Directors of CCFC.

     

    “Business Day” means
any day other than a Legal Holiday.

     

    “Capital Lease
Obligation” means, at the time any determination is to be made, the
amount of the liability in respect of a capital lease that would at that time be
required to be capitalized on a balance sheet in accordance with GAAP, and the
Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be prepaid by the lessee without payment of a penalty.

     

    “Capital Stock”
means:

     

    (1)           in
the case of a corporation, corporate stock;

     

    (2)           in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;

     

    (3)           in
the case of a partnership or limited liability company, partnership interests
(whether general or limited) or membership interests; and

     

    

    
      
        
           

        

        
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    (4)           any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person, but excluding from all of the foregoing any debt securities convertible
into Capital Stock, whether or not such debt securities include any right of
participation with Capital Stock.

     

    “Cash Collateral
Account” means a deposit account at all times under the sole dominion and
control of the Collateral Trustee (acting on its own or through its agent or a
successor collateral agent) that is being held by the Collateral Trustee or such
agent for the benefit of the holders of Parity Secured Debt.

     

    “Cash Equivalents”
means:

     

    (1)           United
States dollars;

     

    (2)           securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality of the United States government
(provided that
the full faith and credit of the United States is pledged in support of those
securities) having maturities of not more than one year from the date of
acquisition;

     

    (3)           deposit
accounts with any bank that has a long-term debt rating of A+ or better by
S&P and A1 or better by Moody’s (an “Approved
Bank”);

     

    (4)           time
deposits, certificates of deposit, acceptances or prime commercial paper issued
by an Approved Bank at the time acquired or issued (as applicable and whichever
is latest), in each case, having a maturity of not more than one year from the
date of acquisition;

     

    (5)           repurchase
obligations for underlying securities of the types described in clause
(1) entered into with an Approved Bank at the time acquired, issued or
entered into (as applicable and whichever is latest), in each case, having a
maturity of not more than one year from the date of acquisition and secured by
securities of the type described in clause (1), the market value of which
(including accrued interest) is not less than the amount of the applicable
repurchase agreement;

     

    (6)           commercial
paper with a rating of A-1 by S&P and P-1 by Moody’s and, in each case,
maturing within one year after the date of acquisition; and

     

    (7)           money
market funds which invest primarily in Cash Equivalents of the kinds described
in clauses (1) through (6) of this definition.

     

    “CCFCP Preferred
Shares” means the redeemable preferred shares of CCFC Preferred Holdings,
LLC due 2011.

     

    “CES” means Calpine
Energy Services, L.P.

     

    “Change of Control”
means the occurrence of any of the following:

     

    (1)           the
direct or indirect sale, 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 properties or assets of the Issuers and their
Subsidiaries taken as a whole to any “person” (as that term is used in
Section 13(d) of the Exchange Act, but excluding any employee benefit plan
of the Issuers or any of their Restricted Subsidiaries, and any person or entity
acting

     

    

    
      
        
           

        

        
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    in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
other than Calpine Corporation or any subsidiary of Calpine
Corporation;

     

    (2)           the
adoption of a plan relating to the liquidation or dissolution of the Issuers
other than (A) the consolidation with, merger into or transfer of all or
part of the properties and assets of any Restricted Subsidiary of the Issuers to
any Issuer or any other Restricted Subsidiary of the Issuers and (B) the
merger of an Issuer with an Affiliate solely for the purpose of reincorporating
such Issuer or reforming such Issuer in another jurisdiction; or

     

    (3)           the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” (as defined above)
becomes the Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of CCFC, measured by voting power rather than number of shares,
other than Calpine Corporation or a subsidiary of Calpine Corporation or a
Beneficial Owner of 50% of the Voting Stock of Calpine Corporation.

     

    “Clearstream” means
Clearstream Banking, Société Anonyme.

     

    “Closing Date
Facilities” means the Hermiston facility, the Magic Valley facility, the
Osprey facility, the Sutter facility, the Westbrook facility and the Brazos
Valley facility.

     

    “Collateral”
means:

     

    (1)           all
real and personal property of CCFC and the Guarantors, including:

     

    (a)           each
Facility’s equipment and other assets,

     

    (b)           each
Facility’s site and related easements and other real estate rights,

     

    (c)           the
revenues received from the operation of the Facilities,

     

    (d)           any
insurance and condemnation proceeds and other compensation received in
connection with any casualty or other loss incurred by the
Facilities,

     

    (e)           rights
under permits associated with the Facilities, to the extent assignable,
and

     

    (f)           rights
under contracts entered into in connection with the Facilities;

     

    (2)           the
equity interests in CCFC and the Guarantors and all intercompany notes owed to
the Issuers or any of the Guarantors by the Issuers or any of their
Subsidiaries; and

     

    (3)           all
proceeds of the foregoing;

     

    provided that
Collateral shall not include any Excluded Asset.

     

    “Collateral Trust
Agreement” means the Collateral Trust Agreement dated the Issue Date,
executed and delivered by the Issuers, the Guarantors and the Collateral
Trustee, as amended, modified, renewed, restated or replaced, in whole or in
part, from time to time.

     

    

    
      
        
           

        

        
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    “Collateral Trustee”
means Wilmington Trust Company, or one of its affiliates, in its capacity as
Collateral Trustee under the Collateral Trust Agreement, together with its
successors and assigns in such capacity.

     

    “Commission” means the
U.S. Securities and Exchange Commission.

     

    “Consolidated Cash
Flow” means, with respect to any specified Person for any period, the
Consolidated Net Income of such Person for such period plus, without
duplication:

     

    (1)           an
amount equal to any extraordinary loss plus any net loss realized by such Person
or any of its Restricted Subsidiaries in connection with an Asset Sale or the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries, to the extent such losses were deducted in
computing such Consolidated Net Income; plus

     

    (2)           provision
for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was
deducted in computing such Consolidated Net Income; plus

     

    (3)           the
Fixed Charges of such Person and its Restricted Subsidiaries for such period, to
the extent that such Fixed Charges were deducted in computing such Consolidated
Net Income; plus

     

    (4)           depreciation,
depletion, amortization (including amortization of intangibles) and other
non-cash expenses (excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future period) of
such Person and its Restricted Subsidiaries for such period to the extent that
such depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; plus

     

    (5)           major
maintenance expense as reflected in Consolidated Net Income and consistent with
the descriptions thereof contained in the Offering Memorandum; plus

     

    (6)           charges
associated with fees and expenses, including professional fees, incurred on or
prior to the Issue Date in connection with the issuance of the Notes on the
Issue Date or the modification of or preparation in connection therewith of
Indebtedness of the Issuers that occurred prior to the Issue Date, to the extent
such charges were deducted in computing such Consolidated Net Income, and
charges or expenses recognized as a result of repayment of Indebtedness existing
on the Issue Date; plus

     

    (7)           the
upfront costs of any Hedging Obligations paid prior to the Issue Date, to the
extent such costs were deducted in computing Consolidated Net Income; plus

     

    (8)           cash
received during such period related to mark-to-market activities; less

     

    (9)           cash
paid during such period related to mark-to-market activities;

     

    provided, however, that for
purposes of this definition, any mark-to-market earnings or losses shall be
excluded from the calculation of Consolidated Cash Flow to the extent taken into
account in calculating Consolidated Net Income for such period.

     

    

    
      
        
           

        

        
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    “Consolidated Interest
Expense” means, for any period, total cash interest expense (including
that attributable to Capital Lease Obligations) of CCFC and its Restricted
Subsidiaries for such period with respect to all outstanding Indebtedness of
CCFC and its Restricted Subsidiaries, operating lease expense of CCFC and its
Restricted Subsidiaries, and dividends paid in cash in respect of any preferred
Capital Stock of CCFC and its Restricted Subsidiaries (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and net costs under Hedging
Obligations in respect of interest rates to the extent such net costs are
allocable to such period in accordance with GAAP), net of interest income during
such period, in each case determined on a consolidated basis in accordance with
GAAP.

     

    “Consolidated Net
Income” means, with respect to any specified Person for any period, the
aggregate of the Net Income of such Person and its Restricted Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP; provided
that:

     

    (1)           the
Net Income of any Person that is not a Restricted Subsidiary or that is
accounted for by the equity method of accounting will be included only to the
extent of the amount of dividends or similar distributions (including pursuant
to other intercompany payments) paid in cash to the specified Person or a
Restricted Subsidiary of the Person;

     

    (2)           for
purposes of Section 4.07 only, the Net Income of any Restricted Subsidiary will
be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by 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; and

     

    (3)           any
non-cash impairment charges incurred subsequent to the Issue Date will be
excluded.

     

    “Consolidated Senior Secured
Leverage Ratio” means, as of any date, the ratio of (i) total
consolidated senior secured Indebtedness of such Person or Persons and their
respective Restricted Subsidiaries as of the date of such transaction, after
giving effect to all incurrences and repayments of Indebtedness on or about such
date, to (ii) Consolidated Cash Flow of such Person or Persons for the most
recent four consecutive full fiscal quarters for which financial statements are
available ending prior to such date, with such pro forma and other
adjustments as are consistent with the pro forma and other
adjustment provisions set forth in the definition of Fixed Charge Coverage
Ratio.

     

    “Consolidated Total Leverage
Ratio” means, as of any date of determination, the ratio of (1) the
Total Debt as of such date to (2) Consolidated Cash Flow of the Issuers and
their Restricted Subsidiaries for the period of the most recent four consecutive
fiscal quarters for which internal financial statements are available ending
prior to such date, with such pro forma and other
adjustments as are consistent with the pro forma and other
adjustment provisions set forth in the definition of Fixed Charge Coverage
Ratio.

     

    “Corporate Trust Office of
the Trustee” shall be at the address of the Trustee specified in Section 14.02 hereof
or such other address as to which the Trustee may give notice to the Holders and
the Issuers.

     

    

    
      
        
           

        

        
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    “Credit Facility” or
“Credit
Facilities” means one or more debt facilities, indentures or commercial
paper facilities, in each case, with banks or other lenders or holders providing
for revolving credit loans, term loans, receivables financing (including through
the sale of receivables to such lenders or holders or others or to special
purpose entities formed to borrow from such lenders or holders or others against
such receivables), letters of credit or debt securities, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced, in each
case, in whole or in part from time to time.

     

    “Custodian” means the
Trustee, as custodian with respect to the Notes in global form, or any successor
entity thereto.

     

    “Default” means any
event that is, or with the passage of time or the giving of notice or both would
be, an Event of Default.

     

    “Definitive Note”
means a certificated Note registered in the name of the Holder thereof and
issued in accordance with Section 2.06(c)
hereof, substantially in the form of Exhibit A
hereto, except that such Note shall not bear the Global Note Legend and shall
not have the “Schedule of Exchanges of Interests in the Global Note” attached
thereto.

     

    “Depositary” means,
with respect to the Notes issuable or issued in whole or in part in global form,
the Person specified in Section 2.03 hereof
as the Depositary with respect to the Notes, and any and all successors thereto
appointed as Depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

     

    “Disqualified Stock”
means any Capital Stock that, by its terms (or by the terms of any security into
which it is convertible, or for which it is exchangeable, in each case, at the
option of the holder of the Capital Stock), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder of the Capital Stock, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature.  Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders of the Capital Stock have the right to require the Issuers to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale
will not constitute Disqualified Stock if the terms of such Capital Stock
provide that the Issuers may not repurchase or redeem any such Capital Stock
pursuant to such provisions unless such repurchase or redemption complies with
Section
4.07.  The amount of Disqualified Stock deemed to be
outstanding at any time for purposes of this Indenture shall be equal to the
maximum amount that the Issuers and their Restricted Subsidiaries may become
obligated to pay upon the maturity of, or pursuant to any mandatory redemption
provisions of, such Disqualified Stock, exclusive of accrued
dividends.

     

    “Domestic Subsidiary”
means any Restricted Subsidiary of the Issuers that was formed under the laws of
the United States or any state of the United States or the District of Columbia
or that guarantees or otherwise provides direct credit support for any
Indebtedness of the Issuers.

     

    “Environmental CapEx
Debt” means Indebtedness of CCFC or its Restricted Subsidiaries incurred
for the purpose of financing Environmental Capital Expenditures.

     

    “Environmental Capital
Expenditures” means capital expenditures deemed necessary by CCFC or its
Restricted Subsidiaries to comply with Environmental Laws.

     

    “Environmental Law”
means any applicable federal, state, foreign or local statute, law, rule,
regulation, ordinance, code and rule of common law now or hereafter in effect
and in each case as

     

    

    
      
        
           

        

        
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    amended,
and any binding judicial or administrative interpretation thereof, including any
binding judicial or administrative order, consent decree or judgment, relating
to the environment, human health or safety or Hazardous Materials.

     

    “Equally and Ratably”
has the meaning given to it in the Security Documents.

     

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

     

    “Equity Offering”
means a public or private sale for cash of Capital Stock (other than
Disqualified Stock) in a new money offering of (x) the Issuers or
(y) Parent, and in the case of clause (y), to the extent the net proceeds
from such Equity Offering are contributed as cash to the Issuers.

     

    “Euroclear” means
Euroclear S.A./N.V., as operator of the Euroclear system.

     

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

     

    “Excluded Assets”
shall have the meaning given to such term in the Security
Documents.

     

    “Facilities” means the
Closing Date Facilities and any other power or energy generating facilities
acquired or constructed after the Issue Date described in the definition of
Permitted Business.

     

    “Fair Market Value”
means the value that would be paid by a willing buyer to a willing seller in a
transaction, determined in good faith by the chief financial officer or Board of
Directors of CCFC (unless otherwise provided in this Indenture).

     

    “Fixed Charge Coverage
Ratio” means with respect to any specified Person for any period, the
ratio of the Consolidated Cash Flow of such Person and its Restricted
Subsidiaries for such period to the Fixed Charges of such Person for such
period.  In the event that the specified Person or any of its
Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases,
redeems, defeases or otherwise discharges any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”),
then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such
incurrence, assumption, guarantee, repayment, repurchase, redemption, defeasance
or other discharge of Indebtedness, or such issuance, repurchase or redemption
of preferred stock, and the use of the proceeds therefrom as if the same had
occurred at the beginning of the applicable four-quarter reference
period.

     

    In
addition, for purposes of calculating the Fixed Charge Coverage
Ratio:

     

    (1)           acquisitions
that have been made by the specified Person or any of its Restricted
Subsidiaries, including through mergers or consolidations, or any Person or any
of its Restricted Subsidiaries acquired by the specified Person or any of its
Restricted Subsidiaries, and including any related financing transactions and
including increases in ownership of Restricted Subsidiaries, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date will be given pro forma effect to any
expense and cost reduction that (x) has occurred or (y) in the
reasonable judgment of the principal financial officer of CCFC, is

     

    

    
      
        
           

        

        
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    reasonably
expected to occur; provided that in the
case of this clause (y), the principal financial officer of CCFC shall have
delivered to the Trustee an Officer’s Certificate certifying that such principal
financial officer believes in good faith that such expenses or cost reductions
are reasonably expected to occur within six months from the date of any such
acquisition, in each case, as if they had occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for such reference
period will be calculated on a pro forma basis;

     

    (2)           the
Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses (and ownership interests
therein) disposed of prior to the Calculation Date, will be
excluded;

     

    (3)           the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses (and ownership interests
therein) disposed of prior to the Calculation Date, will be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date; and

     

    (4)           if
any Indebtedness that is being incurred on the Calculation Date bears a floating
rate of interest, the interest expense on such Indebtedness will be calculated
as if the rate in effect on the Calculation Date had been the applicable rate
for the entire period (taking into account any Hedging Obligations applicable to
such Indebtedness, but only for such period of time as equals the then remaining
term of such Hedging Obligations as of the Calculation Date).

     

    “Fixed Charges” means,
with respect to any specified Person for any period, the sum, without
duplication, of:

     

    (1)           Consolidated
Interest Expense; plus

     

    (2)           the
consolidated interest of such Person and its Restricted Subsidiaries that was
capitalized during such period; plus

     

    (3)           any
interest accruing on Indebtedness of a Person other than the Issuers and their
Restricted Subsidiaries 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, whether or not such Guarantee or Lien is called
upon; plus

     

    (4)           the
product of (A) all dividends, whether paid or accrued and whether or not in
cash, on any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable solely in Equity
Interests of the Issuers (other than Disqualified Stock) or to the Issuers or a
Restricted Subsidiary of the Issuers, times (B) a fraction, the numerator
of which is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such Person, expressed
as a decimal, in each case, on a consolidated basis and in accordance with
GAAP.

     

    “GAAP” means generally
accepted accounting principles 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 have been
approved by a significant segment of the accounting profession, which are in
effect from time to time.

     

    

    
      
        
           

        

        
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    “Global Note Legend”
means the legend set forth in Section 2.06(f)(ii)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.

     

    “Global Notes” means,
individually and collectively, each of the Restricted Global Notes and the
Unrestricted Global Notes, substantially in the form of Exhibit A
hereto, issued in accordance with Section 2.01, 2.06(b) or 2.06(d) hereof,
including the Global Note Legend.

     

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

     

    “Government
Securities” means securities that are:

     

    (1)           direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged; or

     

    (2)           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 full faith and credit obligation by the United
States of America,

     

    which, in
either case, are not callable or redeemable at the option of the issuers
thereof, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect
to any such Government Securities or a specific payment of principal of or
interest on any such Government Securities held by such custodian for the
account of the holder of such depository 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 depository receipt from any amount
received by the custodian in respect of the Government Securities or the
specific payment of principal of or interest on the Government Securities
evidenced by such depository receipt.

     

    “Guarantee” means a
guarantee other than by endorsement of negotiable instruments for collection in
the ordinary course of business, direct or indirect, in any manner including,
without limitation, by way of a pledge of assets or through letters of credit or
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services, to
take or pay or to maintain financial statement conditions or
otherwise).

     

    “Guarantor” means each
of (1) Hermiston Power LLC and Brazos Valley Energy LLC and (2) any
Restricted Subsidiary of the Issuers that executes a subsidiary guarantee in
accordance with the provisions of this Indenture, and their respective
successors and assigns, in each case, until the Guarantee of such Person has
been released in accordance with the provisions of this Indenture.

     

    “Hazardous Material”
means any substance, material or waste that is regulated by, or forms the basis
of liability now or hereafter under, any Environmental Laws, including any
material or substance that is (a) defined as a “solid waste,” “hazardous
waste,” “hazardous material,” “hazardous substance,” “extremely hazardous
waste,” “restricted hazardous waste,” “pollutant,” “contaminant,” “hazardous
constituent,” “special waste,” “toxic substance” or other similar term or phrase
under any Environmental Laws, or (b) petroleum or any fraction or
by-product thereof, asbestos, polychlorinated biphenyls (PCBs), or any
radioactive substance.

     

    

    
      
        
           

        

        
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    “Hedging Obligations”
means, with respect to any specified Person, the net obligations of such Person
under:

     

    (1)           interest
rate swap agreements (whether from fixed to floating or from floating to fixed),
interest rate cap agreements and interest rate collar agreements;

     

    (2)           other
agreements or arrangements designed to manage interest rate risk;
and

     

    (3)           other
agreements or arrangements designed to protect such Person against fluctuations
in currency exchange rates or commodity prices.

     

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

     

    “Indebtedness” means,
with respect to any specified Person, any indebtedness of such Person (excluding
accrued expenses or trade payables), whether or not contingent (without
duplication):

     

    (1)           in
respect of borrowed money;

     

    (2)           evidenced
by bonds, notes, debentures or similar instruments or letters of credit or
reimbursement agreements in respect thereof;

     

    (3)           in
respect of bankers’ acceptances;

     

    (4)           representing
Capital Lease Obligations or Attributable Debt in respect of sale and leaseback
transactions;

     

    (5)           representing
the balance deferred and unpaid of the purchase price of any property or
services due more than six months after such property is acquired or such
services are completed; or

     

    (6)           representing
any Hedging Obligations (except as expressly set forth below),

     

    if and to
the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with
GAAP.  In addition, the term “Indebtedness” includes all Indebtedness
of others secured by a Lien on any asset of the specified Person (whether or not
such Indebtedness is assumed by the specified Person) and, to the extent not
otherwise included, the Guarantee by the specified Person of any Indebtedness of
any other Person.

     

    The
amount of any Indebtedness outstanding as of any date will be:

     

    (1)           the
accreted value of the Indebtedness, in the case of any Indebtedness issued with
original issue discount;

     

    (2)           the
principal amount of and premium (if any) on the Indebtedness, in the case of any
other Indebtedness; and

     

    (3)           in
respect of Indebtedness of other Persons secured by a Lien on the assets of the
specified Person, the lesser of:

     

    (A)           the
Fair Market Value of such asset at such date of determination, and

     

    

    
      
        
           

        

        
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    (B)           the
amount of such Indebtedness of such other Persons.

     

    Notwithstanding
the foregoing, “Indebtedness” shall not include:

     

    (1)           any
Hedging Obligations that are entered into for bona fide hedging purposes of the
Issuers or their Restricted Subsidiaries (as determined in good faith by the
Board of Directors or senior management of CCFC, whether or not accounted for as
a hedge in accordance with GAAP); and

     

    (2)           in-kind
obligations relating to energy balancing positions arising in the ordinary
course of business and consistent with past practice.

     

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

     

    “Indirect Participant”
means a Person who holds a beneficial interest in a Global Note through a
Participant.

     

    “Initial Notes” as
defined in the recitals hereto.

     

    “Interest Payment
Date” means June 1 and December 1 of each year to stated
maturity.

     

    “Investment Grade
Rating” means a rating equal to or higher than Baa3 (or the equivalent)
by Moody’s or BBB- (or the equivalent) by S&P.

     

    “Investments” means,
with respect to any Person, all direct or indirect investments by such Person in
other Persons (including Affiliates) in the forms of loans (including Guarantees
or similar obligations), advances or capital contributions (excluding payroll,
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.  “Investment” shall exclude extensions of trade
credit by the Issuers and their Restricted Subsidiaries in the ordinary course
of business.  If any Issuer or any Subsidiary of the Issuers sells or
otherwise disposes of any Equity Interests of any direct or indirect Subsidiary
of such Issuer such that, after giving effect to any such sale or disposition,
such Person is no longer a Subsidiary of such Issuer, such Issuer will be deemed
to have made an Investment on the date of any such sale or disposition equal to
the Fair Market Value of such Issuer’s Investments in such Subsidiary that were
not sold or disposed of.  The acquisition by the Issuers or any
Subsidiary of the Issuers of a Person that holds an Investment in a third Person
will be deemed to be an Investment by such Issuer or such Subsidiary in such
third Person in an amount equal to the Fair Market Value of the Investments held
by the acquired Person in such third Person.  Except as otherwise
provided in this Indenture, the amount of an Investment shall be its Fair Market
Value at the time the Investment is made and without giving effect to subsequent
changes in value.

     

    “Issue Date” means May
19, 2009.

     

    “Issuer Order” means a
written request or order signed on behalf of the Issuers by an Officer of the
Issuers, and delivered to the Trustee.

     

    “Issuers” as defined
in the recitals hereto.

     

    

    
      
        
           

        

        
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    “Legal Holiday” means
a Saturday, a Sunday or a day on which banking institutions in the City of
New York, New York and Wilmington, Delaware are authorized by law,
regulation or executive order to remain closed.

     

    “Lien” means, with
respect to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset, whether or not filed, recorded
or otherwise perfected under applicable law, including any conditional sale or
other title retention agreement and any lease that constitutes a security
interest.

     

    “Material Domestic
Subsidiary” means any Domestic Subsidiary having Total Assets that
constitute more than 5% of Total Assets.

     

    “Moody’s” means
Moody’s Investors Service, Inc.

     

    “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, excluding, however:

     

    (1)           any
gain (or loss), together with any related provision for taxes on such gain (or
loss), realized in connection with: (A) any Asset Sale; or (B) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and

     

    (2)           any
extraordinary gain (or loss), together with any related provision for taxes on
such extraordinary gain (or loss).

     

    “Net Proceeds” means
the aggregate cash proceeds received by the Issuers or any of their Restricted
Subsidiaries in respect of any Asset Sale (including, without limitation, any
cash received upon the sale or other disposition of any non-cash consideration
received in any Asset Sale), net of the direct costs relating to such Asset
Sale, including, without limitation, legal, accounting and investment banking
fees, and sales commissions, and any relocation expenses incurred as a result of
the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each
case, after taking into account any available tax credits or deductions and any
tax sharing arrangements, and amounts reserved for adjustment in respect of the
sale price of such asset or assets established in accordance with
GAAP.

     

    “Non-Recourse” means,
with respect to any specified Person and the Indebtedness of such
Person:

     

    (1)           neither
the Issuers nor any of their Restricted Subsidiaries (A) provides credit
support of any kind (including any undertaking, agreement or instrument that
would constitute Indebtedness) for the Indebtedness of such Person other than a
pledge of the Equity Interests of such Person, (B) is directly or
indirectly liable as a guarantor or otherwise of the Indebtedness of such
Person, or (C) constitutes the lender with respect to the Indebtedness of
such Person; and

     

    (2)           in
the case of an Unrestricted Subsidiary, no default on the Indebtedness of such
Person (including any rights that the holders of the Indebtedness may have to
take enforcement action against an Unrestricted Subsidiary) would permit upon
notice, lapse of time or both any holder of Indebtedness of the Issuers or any
of their Restricted Subsidiaries to declare a default on such Indebtedness of
the Issuers or any of their Restricted Subsidiaries or cause the payment
of

     

    

    
      
        
           

        

        
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    such
Indebtedness of the Issuers or any of their Restricted Subsidiaries to be
accelerated or payable prior to its stated maturity.

     

    “Non-U.S. Person”
means a Person who is not a U.S. Person.

     

    “Note Documents” means
the Notes, this Indenture, the guarantees and the Security
Documents.

     

    “Note Obligations”
means (1) Notes issued on Issue Date and (2) Notes issued by the
Issuers after the Issue Date that constitute Parity Secured Debt; together with
the guarantees and all other Obligations (including all Obligations owing to the
Trustees) of any Obligor under the Note Documents.

     

    “Notes” means the
Initial Notes and more particularly means any Note authenticated and delivered
under this Indenture.  For all purposes of this Indenture, the term
“Notes” shall also include any Additional Notes that may be issued under a
supplemental indenture.  For purposes of this Indenture, all
references to Notes to be issued or authenticated upon transfer, replacement or
exchange shall be deemed to refer to Notes of the applicable
series.

     

    “Notice of Actionable
Default” means a written notice given to the Collateral Trustee by the
Required Secured Debtholders or any Secured Debt Representative, stating that an
Actionable Default has occurred and is continuing.

     

    “Obligations” means
any principal, interest, premium, fees (including reasonable fees and expenses
of attorneys and other experts), indemnifications, reimbursements, damages and
other liabilities payable under the documentation governing any Indebtedness,
including any interest accruing after commencement of any bankruptcy or
insolvency proceeding against any Obligor whether or not allowed in such
proceeding.

     

    “Obligor” means the
Issuers, the Guarantors and each other Subsidiary of the Issuers that has
granted the Collateral Trustee a Lien upon any property as security for any Note
Obligation.

     

    “Offering Memorandum”
means the Offering Memorandum, dated May 12, 2009, relating to the sale of
the Initial Notes.

     

    “Officer” means, with
respect to any Person, the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person.

     

    “Officer’s
Certificate” means a certificate signed on behalf of the Issuers by an
Officer of the applicable Issuer, who must be the principal executive officer,
the principal financial officer, the treasurer or the principal accounting
officer of such Issuer, that meets the requirements set forth in this Indenture,
including but not limited to Section 14.05
hereof.

     

    “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.

     

    “Order of Application”
shall have the meaning assigned to such term in the Collateral Trust
Agreement.

     

    

    
      
        
           

        

        
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    “Original Issue Discount
Legend” means the legend set forth in Section 2.06(f)(iv)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.

     

    “Parent” means any
direct or indirect parent company of CCFC.

     

    “Parity Secured Debt”
means:

     

    (1)           Indebtedness
incurred pursuant to clause (1) of the definition of Permitted
Debt;

     

    (2)           Indebtedness
incurred pursuant to clause (15) of the definition of Permitted Debt; provided that after
giving effect to such incurrence and the application of the proceeds from, and
the creation of Liens to secure, such Indebtedness, the Consolidated Senior
Secured Leverage Ratio of the Issuers was not greater than 4.75 to
1.0;

     

    (3)           [Intentionally
Omitted];

     

    (4)           Indebtedness
incurred pursuant to clause (17) of the definition of Permitted
Debt;

     

    (5)           the
Notes issued on the Issue Date;

     

    (6)           Permitted
Refinancing Indebtedness incurred by the Issuers;

     

    (7)           Permitted
Refinancing Indebtedness, the net proceeds of which are used to refinance Parity
Secured Debt; and

     

    (8)           any
other Indebtedness incurred by the Issuers if (A) when it was incurred, the
incurrence of such Indebtedness by the Issuers was permitted by this Indenture
and (B) on the day such Indebtedness was incurred, after giving effect to
such incurrence and the application of the proceeds from, and the creation of
Liens to secure, such Indebtedness, the Consolidated Senior Secured Leverage
Ratio of the Issuers was not greater than 4.75 to 1.0;

     

    provided, in each
case (except in the case of Notes or Additional Notes), that the Secured Debt
Representative on behalf of the holders of any such Indebtedness shall have
executed a joinder to the Collateral Trust Agreement in the form provided
therein.

     

    “Parity Secured
Obligations” means, collectively, all Obligations in respect of Parity
Secured Debt.

     

    “Participant” means,
with respect to the Depositary, Euroclear or Clearstream, a Person who has an
account with the Depositary, Euroclear or Clearstream, respectively (and, with
respect to DTC, shall include Euroclear and Clearstream).

     

    “Perfection
Certificate” has the meaning assigned to such term in the Security
Agreement.

     

    “Permitted Business”
means the ownership, construction, operation and maintenance of the Closing Date
Facilities and any other power and energy generating facilities located in the
United States, together with any related assets or facilities, including gas
pipelines supplying natural gas to such generating facilities, electric
transmission lines carrying energy generated from such generating facilities,
and any related gas or electric interconnection facilities, as well as the
engagement in commodity transact-

    

    
      
        
           

        

        
          -17-

          
            

          

        

        
           

        

      

    

    

    tions in
connection with such business operations, or any business that is similar,
reasonably related, incidental or ancillary to any of the
foregoing.

     

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

     

    (1)           the
counterparty is not an Affiliate of CCFC;

     

    (2)           the
Lien does not secure any Indebtedness and (a) is granted solely to secure
the performance obligations of CCFC or the applicable Restricted Subsidiary
under the PPA and/or any obligation of CCFC or the applicable Restricted
Subsidiary to make a termination payment under the PPA upon the occurrence of
the event described in clause (3)(c)(i) below or the termination by the
counterparty upon the occurrence of any of the events described in clause
(3)(c)(ii) below, or (b) 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 CCFC’s or the applicable
Restricted Subsidiary’s obligations under the PPA;

     

    (3)           the
counterparty can exercise its rights with respect to the Lien only (a) 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, (b) if the counterparty continues to acknowledge the existence of the
Liens securing the Parity Secured Obligations (unless and until Liens securing
the Parity Secured Obligations are eliminated in connection with a foreclosure
of the Permitted Counterparty Liens as contemplated by clause (4) of this
definition) and (c) if either (i) CCFC or the applicable Restricted
Subsidiary has terminated, rejected or repudiated the PPA (including, without
limitation, any rejection or similar act by or on behalf of CCFC or the
applicable Restricted Subsidiary in connection with any bankruptcy proceeding)
or (ii) CCFC or the applicable Restricted Subsidiary has intentionally
breached its obligations under the PPA; provided that the
following actions will be considered an intentional breach by CCFC or the
applicable Restricted Subsidiary under the PPA:

     

    (A)           CCFC
or the applicable Restricted Subsidiary provides or delivers capacity or energy
to a third party if CCFC or the applicable Restricted Subsidiary is required
under the PPA to provide or deliver such capacity or energy to the
counterparty;

     

    (B)           CCFC
or the applicable Restricted Subsidiary fails to operate or attempt to operate
one or more of the relevant Facilities at a time when CCFC or the applicable
Restricted Subsidiary was required under the PPA to operate or attempt to
operate such Facility or Facilities and such operation or attempted operation is
not prevented by force majeure, forced outage or other events or circumstances
outside the reasonable control of the Person responsible therefor;

     

    (C)           any
failure by CCFC 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 CCFC’s or the
applicable Restricted Subsidiary’s obligations under the PPA, in each case to
the extent CCFC or the applicable Restricted Subsidiary is then capable of
complying with such provisions; or

     

    

    
      
        
           

        

        
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    (D)           any
failure by CCFC 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; and

     

    (4)           the
counterparty’s exercise of its rights with respect to the Lien is limited to
(a) 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 CCFC’s or the
applicable Restricted Subsidiary’s obligations under the PPA or (b) the
recovery of any termination payment due under the PPA upon the occurrence of the
event described in clause (3)(c)(i) above or the termination by the
counterparty upon the occurrence of any of the events described in clause
(3)(c)(ii) above.

     

    “Permitted Holder”
means Calpine Corporation and its wholly owned subsidiaries.

     

    “Permitted
Investments” means:

     

    (1)           any
Investment in the Issuers or in a Restricted Subsidiary of the
Issuers;

     

    (2)           any
Investment in Cash Equivalents;

     

    (3)           any
Investment by the Issuers or any Restricted Subsidiary of the Issuers in a
Person, if as a result of such Investment:

     

    (A)           such
Person becomes a Restricted Subsidiary of the applicable Issuer; or

     

    (B)           such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the
applicable Issuer or a Restricted Subsidiary of the Issuers;

     

    (4)           any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section
4.10;

     

    (5)           Investments
made as a result of the sale of Equity Interests of any Person that is a
Subsidiary of CCFC such that, after giving effect to any such sale, such Person
is no longer a Subsidiary of CCFC, if the sale of such Equity Interests
constitutes an Asset Sale and the Net Proceeds received from such Asset Sale are
applied as set forth in Section
4.10;

     

    (6)           any
acquisition of assets or Capital Stock solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of an Issuer or
Parent;

     

    (7)           any
Investments received in compromise or resolution of (A) obligations of
trade creditors or customers that were incurred in the ordinary course of
business of the Issuers or any of their Restricted Subsidiaries, including
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer; or
(B) litigation, arbitration or other disputes with Persons who are not
Affiliates;

     

    (8)           Investments
represented by Hedging Obligations;

     

    (9)           loans
or advances to employees made in the ordinary course of business up to an
aggregate principal amount not to exceed $10.0 million at any one
time;

     

    

    
      
        
           

        

        
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    (10)         any
Investment acquired by the Issuers or any of their Restricted Subsidiaries on
account of any claim against, or interest in, any other Person (A) acquired
in good faith in connection with or as a result of a bankruptcy, workout,
reorganization or recapitalization of such other Person or (B) as a result
of a bona fide foreclosure by the Issuers or any of their Restricted
Subsidiaries with respect to any claim against any other Person;

     

    (11)         repurchases
of the Notes or pari
passu Indebtedness;

     

    (12)         receivables
owing to the Issuers or a Restricted Subsidiary, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such
trade terms may include such concessionary trade terms as the Issuers or such
Restricted Subsidiary deems reasonable under the circumstances;

     

    (13)         any
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

     

    (14)         other
Investments so long as, at the time thereof, the aggregate Fair Market Value
(measured on the date each such Investment was made and without giving effect to
subsequent changes in value) of such Investments, taken together with all other
Investments made pursuant to this clause (14), does not to exceed the greater of
(x) $20.0 million and (y) 1.0% of Total Assets.

     

    “Permitted Liens”
means:

     

    (1)           Liens
held by the Collateral Trustee Equally and Ratably securing all Parity Secured
Obligations;

     

    (2)           Liens
securing an aggregate principal amount of Indebtedness under Credit Facilities
not to exceed the greater of (x) amount permitted to be incurred pursuant
to Section
4.09(b)(1) and (y) an amount that would not cause the Consolidated
Senior Secured Leverage Ratio, after giving effect to such incurrence, to exceed
4.75 to 1.0;

     

    (3)           Liens
(x) on property of a Person existing at the time such Person is merged with
or into or consolidated with CCFC or any Subsidiary of CCFC or (y) on
property (including Capital Stock) existing at the time of acquisition of such
property by CCFC or any Subsidiary of CCFC; provided that such
Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with CCFC or the Subsidiary or the property
acquired; provided
further that on the date on which such Person becomes a Restricted
Subsidiary or such property is acquired, after giving effect to the incurrence
of such Liens, the Consolidated Senior Secured Leverage Ratio would not exceed
4.75 to 1.0;

     

    (4)           Liens
securing Indebtedness (including Capital Lease Obligations) permitted to be
incurred pursuant to Section 4.09(b)(3)
covering only the assets acquired with or financed by such
Indebtedness;

     

    

    
      
        
           

        

        
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    (5)           Liens
securing obligations under sale leaseback transactions permitted by Section 4.16 covering
only the assets subject to such transaction;

     

    (6)           Liens
in favor of the Issuers or the Guarantors;

     

    (7)           Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded; provided that any
reserve or other appropriate provision as is required in conformity with GAAP
has been made therefor;

     

    (8)           Liens
imposed by law, such as carriers’, warehousemen’s, landlord’s and mechanics’
Liens, in each case, incurred in the ordinary course of business;

     

    (9)           survey
exceptions, encumbrances, easements or reservations, including those for
licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines,
mineral reservations and rights and leases, zoning restrictions and other
restrictions (including defects or irregularities in title and similar
encumbrances that are not material to the operations of the Issuers and their
Restricted Subsidiaries taken as a whole) as to the use of real property that
were not incurred in connection with Indebtedness and that (A) exist on the
Issue Date and are recorded on such date, (B) are permitted under the terms
of the Security Documents or (C) 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;

     

    (10)         Liens
to secure any Permitted Refinancing Indebtedness permitted to be incurred under
this Indenture if such Permitted Refinancing Indebtedness is incurred by the
same obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; provided, however,
that:

     

    (A)           the
new Lien shall be limited to all or part of the same categories of property and
assets that secured or, under the written agreements pursuant to which the
original Lien arose, could secure the original Lien (plus repairs, improvements,
additions and accessions to such property or proceeds or distributions thereof);
and

     

    (B)           the
Indebtedness secured by the new Lien is not increased to any amount greater than
the sum of (i) the outstanding principal amount or, if greater, committed
amount of the Permitted Refinancing Indebtedness, (ii) an amount necessary
to pay any fees and expenses, including premiums, related to such refinancings,
refunding, extension, renewal or replacement and (iii) any protective
advances with respect to the property and assets that secure such Permitted
Refinancing Indebtedness;

     

    (11)         financing
statements (including precautionary statements) filed in connection with a
Capital Lease Obligation or an operating lease, in each case, not prohibited
hereunder; provided that no such
financing statement extends to, covers or refers to as collateral any property
or assets of the Issuers or a Restricted Subsidiary, other than the property or
assets which are subject to such Capital Lease Obligation or such operating
lease;

     

    (12)         Liens
arising out of or in connection with any judgment that does not constitute an
Event of Default or in connection with any litigation or other legal proceeding
as to which an appeal to contest or review is timely commenced in good faith by
appropriate proceedings and as to which adequate reserves have been established
in accordance with GAAP; provided that
any

     

    

    
      
        
           

        

        
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    right to
levy, seizure, attachment, sequestration, foreclosure or garnishment of any
property and assets of the Issuers or a Restricted Subsidiary thereof arising
out of or in connection with any such Lien has been and continues to be enjoined
or effectively stayed;

     

    (13)         inchoate
statutory Liens arising under ERISA;

     

    (14)         Liens
(A) on cash and short-term investments (i) deposited by the Issuers or
any of their Subsidiaries in margin accounts with or on behalf of futures
contract brokers or paid over to other counterparties or (ii) pledged or
deposited as collateral to a contract counterparty or issuer of surety bonds or
letters of credit by the Issuers or any of their Subsidiaries, in the case of
clause (i) or (ii), to secure obligations with respect to
(a) contracts for commercial and trading activities in the ordinary course
of business and contracts (including without limitation, physical delivery,
option (whether cash or financial), exchange, swap and futures contracts) for
the purchase, transmission, distribution, sale, lease or hedge of any
energy-related commodity or service or (b) interest rate, commodity price,
or currency rate management contracts or derivatives and (B) encumbering
assets other than accounts or receivables arising out of contracts or agreements
relating to the generation, distribution or transmission of energy; provided that all
such agreements or contracts are entered into in the ordinary course of
business;

     

    (15)         Liens
arising by virtue of any statutory or common law provision relating to banker’s
liens, rights of setoff or similar rights, contractual rights of setoff or
netting arrangements entered into in the ordinary course of business and similar
rights with respect to deposit accounts, commodity accounts and/or securities
accounts;

     

    (16)         pledges
and deposits to secure the payment of worker’s compensation, unemployment
insurance, social security benefits or obligations under similar laws, or to
secure the payment or performance of statutory or public obligations (including
environmental, municipal and public utility commission obligations and
requirements), reimbursement or indemnity obligations arising out of surety,
performance, or other similar bonds, and other obligations of a like nature, in
each case incurred in the ordinary course of business;

     

    (17)         Liens
existing on the Issue Date (but excluding Liens securing Indebtedness to be
repaid with the proceeds of the Notes issued on the Issue Date as described in
the Offering Memorandum after such Indebtedness has been repaid); provided that CCFC
shall use commercially reasonable efforts to enter into a subordination
agreement having terms not materially less favorable, taken as a whole, to the
Secured Parties than the liens subordination agreement in effect immediately
prior to the Issue Date pursuant to which the Lien granted by CCFC in favor of
Magic Valley Electric Cooperative, Inc. (as subsequently assigned to South Texas
Electric Cooperative, Inc.) pursuant to the Power Purchase and Sale Agreement
dated as of May 22, 1998 securing certain obligations thereunder shall be
subordinated to the Liens granted in favor of the Collateral
Trustee;

     

    (18)         Liens
not in respect of Indebtedness consisting of the interest of the lessor under
any operating lease entered into in the ordinary course of business and not
otherwise prohibited by this Indenture;

     

    (19)         Liens
securing Hedging Obligations permitted under this Indenture;

     

    (20)         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 en-

     

    

    
      
        
           

        

        
          -22-

          
            

          

        

        
           

        

      

    

    

    tered
into with respect to electric energy or capacity, emissions allowances, fuel and
other commodities);

     

    (21)         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 CCFC or any of its
Restricted Subsidiaries;

     

    (22)         any
restrictions on any Equity Interest or undivided interests, as the case may be,
of a Person providing for a breach, termination or default under any joint
venture, stockholder, membership, limited liability company, partnership,
owners’, participation or other similar agreement between such Person and one or
more other holders of Equity Interests or undivided interests of such Person, as
the case may be, if a security interest or Lien is created on such Equity
Interest or undivided interest, as the case may be, as a result
thereof;

     

    (23)         any
customary provisions limiting the disposition or distribution of assets or
property (including without limitation Equity Interests) or any related
restrictions thereon in joint venture, partnership, membership, stockholder and
limited liability company agreements, asset sale agreements, sale-leaseback
agreements, stock sale agreements and other similar agreements, including
owners’, participation or similar agreements governing projects owned through an
undivided interest; provided, however, that any
such limitation is applicable only to the assets that are the subjects of such
agreements;

     

    (24)         Liens
granted by a Person in favor of a commercial trading counterparty pursuant to a
netting agreement, which Liens encumber rights under agreements that are subject
to such netting agreement and which Liens secure such Person’s obligations to
such counterparty under such netting agreement; provided that any
such agreements and netting agreements are entered into in the ordinary course
of business; and provided, further, that the
Liens are incurred in the ordinary course of business and when granted, do not
secure obligations which are past due;

     

    (25)         Liens
arising out of or in connection with the transfer of an undivided interest in
the Magic Valley Generating Center in Edinburg, Texas pursuant to the purchase
option set forth in Article XIV of the Power Purchase and Sale Agreement with
South Texas Electric Cooperative, Inc., dated May 22, 1998, as in effect on
the Issue Date;

     

    (26)         Permitted
Counterparty Liens, which Liens shall rank pari passu to the Liens
securing Parity Secured Obligations (although the Obligations securing such
Permitted Counterparty Liens shall not constitute Parity Secured Obligations
under this Indenture); and

     

    (27)         Liens
incurred in the ordinary course of business of the Issuers or any Restricted
Subsidiary of the Issuers securing obligations that at the time of incurrence of
any such Lien do not in the aggregate with any of Liens created pursuant to this
clause (27) exceed the greater of (x) $20.0 million and (y) 1.0%
of Total Assets.

     

    “Permitted Refinancing
Indebtedness” means any Indebtedness of the Issuers or any their
Restricted Subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund, other Indebtedness
of the Issuers or any of their Restricted Subsidiaries (other than intercompany
Indebtedness); provided
that:

     

    (1)           the
principal amount (or accreted value, if higher) of such Permitted Refinancing
Indebtedness does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness extended, refinanced, renewed, replaced,
defeased or refunded (plus all accrued inter-

    

    
      
        
           

        

        
          -23-

          
            

          

        

        
           

        

      

    

    

    est on
the Indebtedness and the amount of all expenses, costs and fees and premiums
incurred in connection therewith);

     

    (2)           such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded;

     

    (3)           if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness is subordinated in right of payment to the Notes 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, as reasonably determined by the applicable
Issuer or such Restricted Subsidiary;

     

    (4)           such
Indebtedness is incurred either by the Issuers or any of their Restricted
Subsidiaries who is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and

     

    (5)           if
incurred by an Issuer, such Indebtedness may be guaranteed by the
Guarantors.

     

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

     

    “Post-Closing
Collateral” means the portion of the Collateral for which a valid and
perfected security interest in favor of the Collateral Trustee has not been
created on or prior to the Issue Date.

     

    “PPA” means an
agreement (including a tolling agreement, fuel conversion services agreement or
other similar agreement) entered into by the Issuers or any of their Restricted
Subsidiaries for the sale of capacity or energy (and services ancillary or
related thereto) from one or more of the Facilities.

     

    “Private Placement
Legend” means the legend set forth in Section 2.06(f)(1)(A)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.

     

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

     

    “Record Date” for the
interest payable on any applicable Interest Payment Date
means  May 15 or November 15 (whether or not a Business Day)
next preceding such Interest Payment Date.

     

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

     

    “Regulation S Global
Note” means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as applicable.

     

    “Regulation S Permanent
Global Note” means a permanent Global Note in the form of Exhibit A
hereto, bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination

     

    

    
      
        
           

        

        
          -24-

          
            

          

        

        
           

        

      

    

    

    equal to
the outstanding principal amount of the Regulation S Temporary Global Note
upon expiration of the Restricted Period.

     

    “Regulation S Temporary
Global Note” means a temporary Global Note in the form of Exhibit A
hereto, bearing the Global Note Legend, the Private Placement Legend and the
Regulation S Temporary Global Note Legend and deposited with or on behalf
of and registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903.

     

    “Regulation S Temporary
Global Note Legend” means the legend set forth in Section 2.06(f)(iii)
hereof.

     

    “Required Secured
Debtholders” has the meaning given to it in the Security
Documents.

     

    “Required Supermajority
Debtholders” has the meaning given to it in the Security
Documents.

     

    “Responsible Officer”
means, 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 secretary, 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, respectively,
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.

     

    “Restricted Definitive
Note” means a Definitive Note bearing the Private Placement
Legend.

     

    “Restricted Global
Note” means a Global Note bearing the Private Placement
Legend.

     

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

     

    “Restricted Period”
means the 40-day distribution compliance period as defined in
Regulation S.

     

    “Restricted
Subsidiary” of a Person means any Subsidiary of the referent Person that
is not an Unrestricted Subsidiary.

     

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

     

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

     

    “Rule 903” means Rule
903 promulgated under the Securities Act.

     

    “Rule 904” means Rule
904 promulgated under the Securities Act.

     

    “S&P” means
Standard & Poor’s Ratings Group.

     

    

    
      
        
           

        

        
          -25-

          
            

          

        

        
           

        

      

    

    

    “Secured Debt
Documents” means, collectively, the Note Documents, and any indenture,
Credit Facility or other agreement governing each other Series of Parity Secured
Debt and all agreements binding on any Obligor related thereto.

     

    “Secured Debt
Representative” means (1) in the case of the Notes, the Trustee, and
(2) in the case of any other Series of Parity Secured Debt, the trustee,
agent or representative of the holders of such Series of Parity Secured Debt who
maintains, or on whose behalf is maintained, the transfer register for or who
acts as trustee or administrative agent for such Series of Parity Secured Debt
and is appointed as Secured Debt Representative (for purposes related to the
administration of the Security Documents) or acts in such capacity pursuant to
this indenture or agreement governing such Series of Parity Secured
Debt.

     

    “Secured Parties”
means the Trustee, Collateral Trustee and the holders of any Parity Secured
Obligations at any time outstanding.

     

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

     

    “Security Documents”
means the Collateral Trust Agreement, and all security agreements, pledge
agreements, control agreements, collateral assignments, mortgages, deed of trust
or other grants or transfers for security or agreements related thereto executed
and delivered by the Issuers or any Guarantor creating (or purporting to create)
a Lien upon Collateral in favor of the Collateral Trustee to secure Parity
Secured Obligations, in each case, as amended, modified, renewed, restated or
replaced, in whole or in part, from time to time.

     

    “Series of Parity Secured
Debt” means, severally, the Notes and each other issue or series of
Parity Secured Debt.

     

    “Significant
Subsidiary” means any Subsidiary that would be a “significant subsidiary”
as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant
to the Securities Act, as such Regulation was in effect on the Issue
Date.

     

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

     

    “Subsidiary” means,
with respect to any specified Person:

     

    (1)           any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency and after giving effect to any voting agreement or
stockholders’ agreement that effectively transfers voting power) to vote in the
election of directors, managers or trustees of the corporation, association or
other business entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and

     

    

    
      
        
           

        

        
          -26-

          
            

          

        

        
           

        

      

    

    

    (2)           any
partnership (A) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (B) the only general
partners of which are that Person or one or more Subsidiaries of that Person (or
any combination thereof).

     

    “TIA” means the Trust
Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).

     

    “Total Assets” means
the total assets of CCFC and its Restricted Subsidiaries on a consolidated
basis, as shown on CCFC’s most recent internally available balance sheet of the
Issuers, as may be expressly stated.

     

    “Total Debt” means, as
of any date of determination, the aggregate principal amount of Indebtedness of
the Issuers and their Restricted Subsidiaries outstanding on such date,
determined on a consolidated basis, but only to the extent required to be
recorded on a balance sheet, in accordance with GAAP, consisting of Indebtedness
for borrowed money, Capital Lease Obligations and debt obligations evidenced by
promissory notes or similar instruments.

     

    “Treasury Rate” means,
as of any 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 the 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 the redemption date to June 1, 2013; provided, however, that if the
period from the redemption date to June 1, 2013 is not equal to the
constant maturity of the United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to one-twelfth of a year) from the weekly average
yields of United States Treasury securities for which such yields are given,
except that if the period from the redemption date to June 1, 2013 is less than
one year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be
used.

     

    “Trustee” means
Wilmington Trust Company, or one of its affiliates, in its capacity as Trustee
under the Collateral Trust Agreement and this Indenture, together with its
successors and assigns in such capacities.

     

    “Unrestricted Definitive
Note” means one or more Definitive Notes that do not bear and are not
required to bear the Private Placement Legend.

     

    “Unrestricted Global
Note” means a permanent Global Note, substantially in the form of Exhibit A
attached hereto, that bears the Global Note Legend and that has the “Schedule of
Exchanges of Interests in the Global Note” attached thereto, and that is
deposited with or on behalf of and registered in the name of the Depositary,
representing Notes that do not bear the Private Placement Legend.

     

    “Unrestricted
Subsidiary” means any Subsidiary of the Issuers or any successor to any
of them that is designated by the Board of Directors of CCFC as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only to the extent that such
Subsidiary:

     

    (1)           has
no Indebtedness other than Indebtedness that is Non-Recourse to the Issuers and
their Restricted Subsidiaries;

     

    (2)           is
not party to any agreement, contract, arrangement or understanding with the
Issuers or any Restricted Subsidiary of the Issuers unless the terms of any such
agreement, contract,

     

    

    
      
        
           

        

        
          -27-

          
            

          

        

        
           

        

      

    

    

    arrangement
or understanding are no less favorable to the Issuers or such Restricted
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Issuers; and

     

    (3)           is
a Person with respect to which neither the Issuers nor any of their Restricted
Subsidiaries has any direct or indirect obligation (A) to subscribe for
additional Equity Interests or (B) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results.

     

    Any
designation of a Subsidiary of the Issuers as an Unrestricted Subsidiary will be
evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution giving effect to such designation and an Officer’s Certificate
certifying that such designation complied with the preceding conditions and was
permitted by Section
4.07.  If, at any time, any Unrestricted Subsidiary would fail
to meet the preceding requirements as an Unrestricted Subsidiary, it will
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary will be deemed to be incurred by a
Restricted Subsidiary of the Issuers as of such date and, if such Indebtedness
is not permitted to be incurred as of such date in Section 4.09 the
Issuers will be in default of such covenant.  The Board of Directors
of the Issuers may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Issuers of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will only be permitted if (1) such
Indebtedness is permitted under Section 4.09,
calculated on a pro
forma basis as if such designation had occurred at the beginning of the
four-quarter reference period; and (2) no Default or Event of Default would
be in existence following such designation.

     

    “Upgrades” means the
development and implementation of the FD 3 upgrade to the combustion turbines of
any Facility and all activities directly related thereto.

     

    “U.S. Person” means a
U.S. person as defined in Rule 902(k) under the Securities
Act.

     

    “Voting Stock” of any
Person as of any date means the Capital Stock of such Person that is at the time
entitled to vote in the election of the Board of Directors of such
Person.

     

    “Weighted Average Life to
Maturity” means, when applied to any Indebtedness at any date, the number
of years obtained by dividing:

     

    (1)           the
sum of the products obtained by multiplying (A) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect of the
Indebtedness, by (B) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment;
by

     

    (2)           the
then outstanding principal amount of such Indebtedness.

     

     “Wholly Owned
Subsidiary” of any Person means a Restricted Subsidiary of such Person,
100% of the outstanding Equity Interests of which (other than directors’
qualifying shares) shall at the time be owned by such Person or by one or more
Wholly Owned Subsidiaries of such Person.

     

    

    
      
        
           

        

        
          -28-

          
            

          

        

        
           

        

      

    

    

    
      	
              Section
      1.02  

            	
              Other
      Definitions.

            

    

     

    
      
        	 
      	 
      	
                Defined
      in

              
	
                Term

              	 
      	
                Section

              
	 
      	 
      	 
      
	
                “Agent
      Members”

              	 
      	
                2.06

              
	
                “Affiliate
      Transaction”

              	 
      	
                4.11

              
	
                “Asset
      Sale Offer”

              	 
      	
                4.10

              
	
                “Authentication
      Order”

              	 
      	
                2.02

              
	
                “Change
      of Control Offer”

              	 
      	
                4.14

              
	
                “Change
      of Control Payment”

              	 
      	
                4.14

              
	
                “Change
      of Control Payment Date”

              	 
      	
                4.14

              
	
                “Covenant
      Defeasance”

              	 
      	
                8.03

              
	
                “DTC”

              	 
      	
                2.03

              
	
                “Event
      of Default”

              	 
      	
                6.01

              
	
                “Excess
      Proceeds”

              	 
      	
                4.10

              
	
                “incur”

              	 
      	
                4.09

              
	
                “Legal
      Defeasance”

              	 
      	
                8.02

              
	
                “Note
      Register”

              	 
      	
                2.03

              
	
                “Offer
      Amount”

              	 
      	
                3.09

              
	
                “Offer
      Period”

              	 
      	
                3.09

              
	
                “Paying
      Agent”

              	 
      	
                2.03

              
	
                “Permitted
      Debt”

              	 
      	
                4.08

              
	
                “Purchase
      Date”

              	 
      	
                3.09

              
	
                “Redemption
      Date”

              	 
      	
                3.01

              
	
                “Refinancing
      Indebtedness”

              	 
      	
                4.09

              
	
                “Registrar”

              	 
      	
                2.03

              
	
                “Restricted
      Payments”

              	 
      	
                4.07

              
	
                “Subject
      Property”

              	 
      	
                4.16

              
	
                “Successor
      Person”

              	 
      	
                5.01

              
	 
      	 
      	 
      

      

    

    

    
      	
              Section
      1.03  

            	
              Incorporation by
      Reference of Trust Indenture Act.

            

    

     

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

     

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

     

    “indenture
securities” means the Notes;

     

    “indenture
security holder” means a Holder of a Note;

     

    “indenture
to be qualified” means this Indenture;

     

    “indenture
trustee” or “institutional trustee” means the Trustee; and

     

    “obligor”
on the Notes and the Guarantees means the Issuers and the Guarantors,
respectively, and any successor obligor upon the Notes and the Guarantees,
respectively.

     

    

    
      
        
           

        

        
          -29-

          
            

          

        

        
           

        

      

    

    

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

     

    
      	
              Section
      1.04  

            	
              Rules of
      Construction.

            

    

     

    Unless
the context otherwise requires:

     

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

     

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

     

    (c)           “or”
is not exclusive;

     

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

     

    (e)           “will”
shall be interpreted to express a command;

     

    (f)           provisions
apply to successive events and transactions;

     

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

     

    (h)           unless
the context otherwise requires, any reference to an “Article,” “Section” or
“clause” refers to an Article, Section or clause, as the case may be, of this
Indenture;

     

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

     

    (j)           for
purposes of all provisions of this Indenture referring to or requiring the
reasonable satisfaction or determination of the Trustee and/or the Collateral
Trustee, the Trustee and/or the Collateral Trustee shall be entitled to rely
upon a certificate of any of the Issuers or an Opinion of Counsel as may be
necessary for the Trustee to make a required determination or take or omit to
take a particular action.  The determination of whether a certificate
of either of (x) the Issuers or (y) an Opinion of Counsel is selected shall be
in the sole discretion of the Trustee or the Collateral Trustee.

     

    
      	
              Section
      1.05  

            	
              Acts of
      Holders

            

    

     

    (a)          Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in
writing.  Except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments or record or both are
delivered to the Trustee and, where it is hereby expressly required, to the
Issuers.  Proof of execution of any such instrument or of a writing
appointing any such agent, or the holding by any Person of a Note, shall be
sufficient for any purpose of this Indenture and (subject to Section 7.01)
conclusive in favor of the Trustee and the Issuers, if made in the manner
provided in this Section
1.05.

     

    

    
      
        
           

        

        
          -30-

          
            

          

        

        
           

        

      

    

    

    (b)          The
fact and date of the execution by any Person of any such instrument or writing
may be proved by the affidavit of a witness of such execution or by the
certificate of any notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof.  Where such
execution is by or on behalf of any legal entity other than an individual, such
certificate or affidavit shall also constitute proof of the authority of the
Person executing the same.  The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner that the Trustee deems
sufficient.

     

    (c)          The
ownership of Notes shall be proved by the Note Register.

     

    (d)          Any
request, demand, authorization, direction, notice, consent, waiver or other
action by the Holder of any Note shall bind every future Holder of the same Note
and the Holder of every Note issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof, in respect of any action taken,
suffered or omitted by the Trustee or the Issuers in reliance thereon, whether
or not notation of such action is made upon such Note.

     

    (e)          The
Issuers may, in the circumstances permitted by the TIA, set a record date for
purposes of determining the identity of Holders entitled to give any request,
demand, authorization, direction, notice, consent, waiver or take any other act,
or to vote or consent to any action by vote or consent authorized or permitted
to be given or taken by Holders.  Unless otherwise specified, if not
set by the Issuers prior to the first solicitation of a Holder made by any
Person in respect of any such action, or in the case of any such vote, prior to
such vote, any such record date shall be the later of 30 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Trustee prior to such solicitation.

     

    (f)          Without
limiting the foregoing, a Holder entitled to take any action hereunder with
regard to any particular Note may do so with regard to all or any part of the
principal amount of such Note or by one or more duly appointed agents, each of
which may do so pursuant to such appointment with regard to all or any part of
such principal amount.  Any notice given or action taken by a Holder
or its agents with regard to different parts of such principal amount pursuant
to this paragraph shall have the same effect as if given or taken by separate
Holders of each such different part.

     

    (g)          Without
limiting the generality of the foregoing, a Holder, including DTC that is the
Holder of a Global Note, may make, give or take, by a proxy or proxies duly
appointed in writing, any request, demand, authorization, direction, notice,
consent, waiver or other action provided in this Indenture to be made, given or
taken by Holders, and DTC that is the Holder of a Global Note may provide its
proxy or proxies to the beneficial owners of interests in any such Global Note
through such Depositary’s standing instructions and customary
practices.

     

    (h)          The
Issuers may fix a record date for the purpose of determining the Persons who are
beneficial owners of interests in any Global Note held by DTC entitled under the
procedures of such Depositary to make, give or take, by a proxy or proxies duly
appointed in writing, any request, demand, authorization, direction, notice,
consent, waiver or other action provided in this Indenture to be made, given or
taken by Holders.  If such a record date is fixed, the Holders on such
record date or their duly appointed proxy or proxies, and only such Persons,
shall be entitled to make, give or take such request, demand, authorization,
direction, notice, consent, waiver or other action, whether or not such Holders
remain Holders after such record date.  No such request, demand,
authorization, direction, notice, consent, waiver or other action shall be valid
or effective if made, given or taken more than 90 days after such record
date.

    

    
      
        
           

        

        
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    ARTICLE
2

     

    THE
NOTES

     

    
      	
              Section
      2.01  

            	
              Form and Dating;
      Terms.

            

    

     

    (a)          General.  The
Notes and the Trustee’s certificate of authentication shall be substantially in
the form of Exhibit A
hereto.  The Notes may have notations, legends or endorsements
required by law, stock exchange rules or usage.  Each Note shall be
dated the date of its authentication.  The Notes shall be in minimum
denominations of $2,000 and integral multiples of $1,000 in excess
thereof.

     

    (b)          Global
Notes.  Notes issued in global form shall be substantially in
the form of Exhibit A
attached hereto (including the Global Note Legend thereon and the “Schedule of
Exchanges of Interests in the Global Note” attached thereto).  Notes
issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the
“Schedule of Exchanges of Interests in the Global Note” attached
thereto).  Each Global Note shall represent such of the outstanding
Notes as shall be specified in the “Schedule of Exchanges of Interests in the
Global Note” attached thereto and each shall provide that it shall represent up
to the aggregate principal amount of Notes from time to time endorsed thereon
and that the aggregate principal amount of outstanding Notes represented thereby
may from time to time be reduced or increased, as applicable, to reflect
exchanges and redemptions.  Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the aggregate principal amount
of outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06
hereof.

     

    (c)          Temporary Global
Notes.  Notes offered and sold in reliance on Regulation S
shall be issued initially in the form of the Regulation S Temporary Global
Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, as Custodian for the Depositary, and
registered in the name of the Depositary or the nominee of the Depositary for
the accounts of designated agents holding on behalf of Euroclear or Clearstream,
duly executed by the Issuers and authenticated by the Trustee as hereinafter
provided.  Early termination of the Restricted Period may be
effectuated upon receipt by the Trustee of:

     

    (i)          a
written certificate from the Depositary, together with copies of certificates
from Euroclear and Clearstream certifying that they have received certification
of non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Note (except to the extent of
any beneficial owners thereof who acquired an interest therein during the
Restricted Period pursuant to another exemption from registration under the
Securities Act and who shall take delivery of a beneficial ownership interest in
a 144A Global Note bearing a Private Placement Legend, all as contemplated by
Section 2.06(b)
hereof); and

     

    (ii)          an
Officer’s Certificate from the Issuers.

     

    Following
the termination of the Restricted Period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for beneficial
interests in the Regulation S Permanent Global Note pursuant to the
Applicable Procedures.  Simultaneously with the authentication of the
Regulation S Permanent Global Note, the Trustee shall cancel the
Regulation S Temporary Global Note.  The aggregate principal
amount of the Regulation S Temporary Global Note and the Regulation S
Permanent Global Note may from time to time be increased or decreased by
adjustments made on the records of the

     

    

    
      
        
           

        

        
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    Trustee
and the Depositary or its nominee, as the case may be, in connection with
transfers of interest as hereinafter provided.

     

    (d)          Terms.  The
aggregate principal amount of Notes that may be authenticated and delivered
under this Indenture is unlimited.

     

    The terms
and provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture, and the Issuers, the Guarantors and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.  However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.

     

    The Notes
shall be subject to repurchase by the Issuers pursuant to an Asset Sale Offer as
provided in Section
4.10 hereof or a Change of Control Offer as provided in Section 4.14
hereof.  The Notes shall not be redeemable, other than as provided in
Article
3.

     

    Additional
Notes ranking pari
passu with the Initial
Notes may be created and issued from time to time by the Issuers without notice
to or consent of the Holders and shall be consolidated with and form a single
class with the Initial Notes and shall have the same terms as to status,
redemption or otherwise as the Initial Notes; provided that the
Issuers’ ability to issue Additional Notes shall be subject to the Issuers’
compliance with Section 4.09 and
Section 4.12
hereof.

     

    (e)          Euroclear and Clearstream
Procedures Applicable.  The provisions of the “Operating
Procedures of the Euroclear System” and “Terms and Conditions Governing Use of
Euroclear” and the “General Terms and Conditions of Clearstream Banking” and
“Customer Handbook” of Clearstream shall be applicable to transfers of
beneficial interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Clearstream.

     

    
      	
              Section
      2.02  

            	
              Execution and
      Authentication.

            

    

     

    At least
one Officer shall execute the Notes on behalf of each Issuer by manual or
facsimile signature.

     

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

     

    A Note
shall not be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose until authenticated substantially in the form of
Exhibit A
attached hereto by the manual or facsimile signature of the
Trustee.  The signature shall be conclusive evidence that the Note has
been duly authenticated and delivered under this Indenture.

     

    On the
Issue Date, the Trustee shall, upon receipt of an Issuer Order (an “Authentication
Order”), authenticate and deliver the Initial Notes.  In
addition, at any time, from time to time, the Trustee shall upon receipt of an
Authentication Order authenticate and deliver any Additional Notes for an
aggregate principal amount specified in such Authentication Order for such
Additional Notes issued hereunder.

     

    The
Trustee may appoint an authenticating agent acceptable to the Issuers to
authenticate Notes.  An authenticating agent may authenticate Notes
whenever the Trustee may do so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such
agent.  An authenticating agent has the same rights as an Agent to
deal with Holders or an Affiliate of the Issuers.

    

    
      
        
           

        

        
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              Section
      2.03  

            	
              Registrar and Paying
      Agent.

            

    

     

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

     

    The
Issuers initially appoint The Depository Trust Company (“DTC”) to act as
Depositary with respect to the Global Notes.

     

    The
Issuers initially appoint the Trustee to act as the Paying Agent and Registrar
for the Notes and to act as Custodian with respect to the Global
Notes.

     

    
      	
              Section
      2.04  

            	
              Paying Agent to Hold
      Money in Trust.

            

    

     

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

     

    
      	
              Section
      2.05  

            	
              Holder
      Lists

            

    

     

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

     

    
      	
              Section
      2.06  

            	
              Transfer and
      Exchange.

            

    

     

    (a)          Transfer and Exchange of
Global Notes.  Except as otherwise set forth in this Section 2.06, a
Global Note may be transferred, in whole and not in part, only to another
nominee of the Depositary or to a successor Depositary or a nominee of such
successor Depositary.  A beneficial interest in a Global Note may not
be exchanged for a Definitive Note unless (i) the Depositary (x) notifies the
Issuers that it is unwilling or unable to continue as Depositary for such Global
Note or (y) has ceased to be a clearing agency registered under the Exchange Act
and, in either case, a successor Depositary is not appointed by the Issuers
within 120 days or (ii) there shall have occurred and be continuing an
Event of

     

    

    
      
        
           

        

        
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    Default
with respect to the Notes.  Upon the occurrence of any of the
preceding events in (i) or (ii) above, Definitive Notes delivered in exchange
for any Global Note or beneficial interests therein will be registered in the
names, and issued in any denominations authorized pursuant to Section 2.01(a)
hereof, requested by or on behalf of the Depositary (in accordance with its
customary procedures).  Global Notes also may be exchanged or
replaced, in whole or in part, as provided in Sections 2.07 and
2.10
hereof.  Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note, except
for Definitive Notes issued subsequent to any of the preceding events in (i) or
(ii) above and pursuant to Section 2.06(c)
hereof.  A Global Note may not be exchanged for another Note other
than as provided in this Section 2.06(a);
provided, however, beneficial
interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b) or
(c)
hereof.

     

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

     

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

     

    (ii)          All Other Transfers and
Exchanges of Beneficial Interests in Global Notes.  In
connection with all transfers and exchanges of beneficial interests that are not
subject to Section
2.06(b)(i) hereof, the transferor of such beneficial interest must
deliver to the Registrar either (A) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given in
accordance with the Applicable Procedures containing information regarding the
Participant account to be credited with such increase or (B) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the Depositary
to cause to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in whose
name such Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above; provided that in no
event shall Definitive Notes be issued upon the transfer or exchange of
beneficial interests in the Regulation S Temporary Global Note prior to (A)
the expiration of the Restricted Period and (B) the receipt by the Registrar of
any certificates required pursuant to Rule 903.  Upon satisfaction of
all of the requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Indenture and the Notes or otherwise
applicable

     

    

    
      
        
           

        

        
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    under the
Securities Act, the Trustee shall adjust the principal amount of the relevant
Global Note(s) pursuant to Section 2.06(g)
hereof.

     

    (iii)        Transfer of Beneficial
Interests to Another Restricted Global Note.  A beneficial
interest in any Restricted Global Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in another Restricted
Global Note if the transfer complies with the requirements of Section 2.06(b)(ii)
hereof and the Registrar receives the following:

     

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

     

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

     

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

     

    (i)          Beneficial Interests in
Restricted Global Notes to Restricted Definitive Notes.  If any
holder of a beneficial interest in a Restricted Global Note proposes to exchange
such beneficial interest for a Restricted Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon the occurrence of any of the events in
paragraph (i) or (ii) of Section 2.06(a)
hereof and receipt by the Registrar of the following documentation:

     

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

     

    (B)           if
such beneficial interest is being transferred to a QIB in accordance with Rule
144A, a certificate substantially in the form of Exhibit B
hereto, including the certifications in item (1) thereof;

     

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

     

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

     

    (E)           if
such beneficial interest is being transferred to the Issuers or any of their
Restricted Subsidiaries, a certificate substantially in the form of Exhibit B
hereto, including the certifications in item (3)(b) thereof; or

     

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

     

    the
Trustee shall cause the aggregate principal amount of the applicable Global Note
to be reduced accordingly pursuant to Section 2.06(g)
hereof, and the Issuers shall execute and the Trustee shall, upon receipt of an
Authentication Order, authenticate and mail to the Person designated in the
instructions a

     

    

    
      
        
           

        

        
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    Definitive
Note in the applicable principal amount.  Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section
2.06(c) shall be registered in such name or names and in such authorized
denomination or denominations (as permitted by Section 2.01(a)
hereof) as the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or Indirect
Participant.  The Trustee shall mail such Definitive Notes to the
Persons in whose names such Notes are so registered.  Any Definitive
Note issued in exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c)(i)
shall bear the Private Placement Legend and shall be subject to all restrictions
on transfer contained therein.

     

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

     

    (iii)         Beneficial Interests in
Unrestricted Global Notes to Unrestricted Definitive Notes.  If
any holder of a beneficial interest in an Unrestricted Global Note proposes to
exchange such beneficial interest for a Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a
Definitive Note, then, upon the occurrence of any of the events in subsection
(i) or (ii) of Section
2.06(a) hereof and satisfaction of the conditions set forth in Section 2.06(b)(ii)
hereof, the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(g)
hereof, and the Issuers shall execute and the Trustee shall, upon receipt of an
Authentication Order, authenticate and mail to the Person designated in the
instructions a Definitive Note in the applicable principal
amount.  Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(iii)
shall be registered in such name or names and in such authorized denomination or
denominations (as permitted by Section 2.01(a)
hereof) as the holder of such beneficial interest shall instruct the Registrar
through instructions from or through the Depositary and the Participant or
Indirect Participant.  The Trustee shall mail such Definitive Notes to
the Persons in whose names such Notes are so registered.  Any
Definitive Note issued in exchange for a beneficial interest pursuant to this
Section
2.06(c)(iii) shall not bear the Private Placement Legend.

     

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

     

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

     

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

     

    (B)           if
such Restricted Definitive Note is being transferred to a QIB in accordance with
Rule 144A, a certificate substantially in the form of Exhibit B
hereto, including the certifications in item (1) thereof;

     

    

    
      
        
           

        

        
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    (C)           if
such Restricted Definitive Note is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904, a certificate
substantially in the form of Exhibit B
hereto, including the certifications in item (2) thereof;

     

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

     

    (E)           if
such Restricted Definitive Note is being transferred to the Issuers or any of
their Restricted Subsidiaries, a certificate substantially in the form of Exhibit B
hereto, including the certifications in item (3)(b) thereof; or

     

    (F)           if
such Restricted Definitive Note is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate substantially in
the form of Exhibit B
hereto, including the certifications in item (3)(c) thereof,

     

    the
Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the applicable Restricted Global Note, in the case of clause (B) above, the
applicable 144A Global Note, and in the case of clause (C) above, the applicable
Regulation S Global Note.

     

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

     

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

     

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

     

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

     

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

     

    (C)          if
the transfer will be made pursuant to any other exemption from the registration
requirements of the Securities Act, then the transferor must deliver a
certifi-

     

    

    
      
        
           

        

        
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    cate in
the form of Exhibit B
hereto, including the certifications required by item (3) thereof, if
applicable.

     

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

     

       
(f)           Legends.  The
following legends shall appear on the face of all Global Notes and Definitive
Notes issued under this Indenture unless specifically stated otherwise in the
applicable provisions of this Indenture:

     

      
(i)           Private Placement
Legend.

     

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

     

    “THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
BELOW.  BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT (IF AVAILABLE), (D) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),
(E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO
REQUESTS), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS
USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON”
HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.”

     

    

    
      
        
           

        

        
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    (B)           Notwithstanding
the foregoing, any Global Note or Definitive Note issued pursuant to
subparagraph (c)(iii), (d)(ii) or (e)(ii) of this Section 2.06 (and all
Notes issued in exchange therefor or substitution thereof) shall not bear the
Private Placement Legend.

     

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

     

    “THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
TO SECTION 2.06(g) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
ISSUERS.  UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) (“DTC”) TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.”

     

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

     

    “THE
RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS
AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED
IN THE INDENTURE (AS DEFINED HEREIN).”

     

    

    
      
        
           

        

        
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    (iv)           Original Issue Discount
Legend.  Each Note shall bear a legend in substantially the
following form:

     

    “THIS
NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (WITHIN THE MEANING OF SECTION
1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED). UPON WRITTEN REQUEST TO
SHONNIE L. DANIEL, VICE PRESIDENT AND MANAGING COUNSEL AT: CALPINE CONSTRUCTION
FINANCE COMPANY, L.P., 717 TEXAS AVENUE, SUITE 1000, HOUSTON, TEXAS 77002, THE
ISSUER WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE THE FOLLOWING
INFORMATION: (1) THE ISSUE PRICE AND ISSUE DATE OF THE NOTE, (2) THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT ON THE NOTE AND (3) THE YIELD TO MATURITY OF THE
NOTE.”

     

    (g)           Cancellation and/or
Adjustment of Global Notes.  At such time as all beneficial
interests in a particular Global Note have been exchanged for Definitive Notes
or a particular Global Note has been redeemed, repurchased or canceled in whole
and not in part, each such Global Note shall be returned to or retained and
canceled by the Trustee in accordance with Section 2.11
hereof.  At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Note or for Definitive Notes, the principal amount of Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be made on
such Global Note by the Trustee or by the Depositary at the direction of the
Trustee to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note, such other Global Note
shall be increased accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to
reflect such increase.

     

    (h)           General Provisions Relating
to Transfers and Exchanges.

     

    (i)           To
permit registrations of transfers and exchanges, the Issuers shall execute and
the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of
an Authentication Order in accordance with Section 2.02 hereof
or at the Registrar’s request.

     

    (ii)          No
service charge shall be made to a holder of a beneficial interest in a Global
Note or to a Holder of a Definitive Note for any registration of transfer or
exchange, but the Issuers may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05
hereof).

     

    (iii)         Neither
the Registrar nor the Issuers shall be required to register the transfer of or
exchange any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.

     

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

     

    

    
      
        
           

        

        
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    (v)           Neither
the Issuers nor the registrar shall be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for redemption under
Section 3.02
hereof and ending at the close of business on the day of selection, (B) to
register the transfer of or to exchange any Note so selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part or (C) to register the transfer of or to exchange a Note between a Record
Date and the next succeeding Interest Payment Date.

     

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

     

    (vii)         Upon
surrender for registration of transfer of any Note at the office or agency of
the Issuers designated pursuant to Section 4.02 hereof,
the Issuers shall execute, and the Trustee shall authenticate and mail, in the
name of the designated transferee or transferees, one or more replacement Notes
of any authorized denomination or denominations of a like aggregate principal
amount.

     

    (viii)        At
the option of the Holder, Notes may be exchanged for other Notes of any
authorized denomination or denominations of a like aggregate principal amount
upon surrender of the Notes to be exchanged at such office or
agency.  Whenever any Global Notes or Definitive Notes are so
surrendered for exchange, the Issuers shall execute, and the Trustee shall, upon
receipt of an Authentication Order, authenticate and mail, the replacement
Global Notes and Definitive Notes which the Holder making the exchange is
entitled to in accordance with the provisions of Section 2.02
hereof.

     

    (ix)          All
certifications, certificates and Opinions of Counsel required to be submitted to
the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.

     

    (x)           Each
Holder of a Note agrees to indemnify the Issuers and the Trustee against any
liability that may result from the transfer, exchange or assignment of such
Holder’s Note in violation of any provision of this Indenture and/or applicable
United States federal or state securities laws.

     

    (xi)          Neither
the Trustee nor any agent of the Trustee shall have any responsibility for any
actions taken or not taken by the Depositary.

     

    (xii)         The
Trustee shall have no responsibility or obligation to any members of, or
participants in, the Depositary (“Agent Members”) or any other Person with
respect to the accuracy of the books or records, or the acts or omissions, of
the Depositary or its nominee or of any participant or member thereof, with
respect to any ownership interest in the Notes or with respect to the delivery
to any Agent Members or other Person (other than the Depositary) of any notice
(including any notice of redemption) or the payment of any amount, under or with
respect to such Notes. All notices and communications to be given to the Holders
and all payments to be made to Holders under the Notes shall be given or made
only to or upon the order of the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Note). The rights of
beneficial owners in any Global Security shall be exercised only through the
Depositary subject to the customary procedures of the Depositary. The Trustee
may rely and shall be fully protected in relying upon information furnished by
the Depositary with respect to its Agent Members.

     

    

    
      
        
           

        

        
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    (xiii)        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 Note
(including any transfers between or among Agent Members in any Global Note)
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.

     

    
      	
              Section
      2.07  

            	
              Replacement
      Notes,

            

    

     

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

     

    Every
replacement Note is a contractual obligation of the Issuers and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.

     

    
      	
              Section
      2.08  

            	
              Outstanding
      Notes.

            

    

     

    The Notes
outstanding at any time are all the Notes authenticated by the Trustee except
for those canceled by it, those delivered to it for cancellation, those
reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.08 as not
outstanding.  Except as set forth in Section 2.09 hereof,
a Note does not cease to be outstanding because the Issuers or an Affiliate of
the Issuers holds the Note.

     

    If a Note
is replaced pursuant to Section 2.07 hereof,
it ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.

     

    If the
principal amount of any Note is considered paid under Section 4.01 hereof,
it ceases to be outstanding and interest on it ceases to accrue.

     

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

     

    
      	
              Section
      2.09  

            	
              Treasury
      Notes.

            

    

     

    In
determining whether the Holders of the required principal amount of Notes have
concurred in any direction, waiver or consent, Notes owned by the Issuers, or by
any Affiliate of the Issuers, shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes that a
Responsible Officer of the Trustee knows are so owned shall be so
disregarded.  Notes so owned which have been pledged in good faith
shall not be disregarded if the pledgee establishes to the satisfaction of the
Trustee the pledgee’s right to deliver any such direction, waiver or consent
with respect to the Notes and

     

    

    
      
        
           

        

        
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    that the
pledgee is not an Issuer or any obligor upon the Notes or any Affiliate of the
Issuers or of such other obligor.

     

    
      	
              Section
      2.10  

            	
              Temporary
      Notes.

            

    

     

    Until
certificates representing Notes are ready for delivery, the Issuers may prepare
and the Trustee, upon receipt of an Authentication Order, shall authenticate
temporary Notes.  Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Issuers consider
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee.  Without unreasonable delay, the Issuers shall prepare and
the Trustee shall, upon receipt of an Authentication Order, authenticate
definitive Notes in exchange for temporary Notes.

     

    Holders
and beneficial holders, as the case may be, of temporary Notes shall be entitled
to all of the benefits accorded to Holders, or beneficial holders, respectively,
of Notes under this Indenture.

     

    
      	
              Section
      2.11  

            	
              Cancellation.

            

    

     

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

     

    
      	
              Section
      2.12  

            	
              Defaulted
      Interest.

            

    

     

    If the
Issuers default in a payment of interest on the Notes, they shall pay the
defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, in each case at the rate provided in the Notes and in Section 4.01
hereof.  The Issuers shall notify the Trustee in writing of the amount
of defaulted interest proposed to be paid on each Note and the date of the
proposed payment, and at the same time the Issuers shall deposit with 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 provided in this Section
2.12.  The Trustee shall fix or cause to be fixed each such
special record date and payment date; provided that no such
special record date shall be less than 10 days prior to the related payment date
for such defaulted interest.  The Trustee shall promptly notify the
Issuers of such special record date.  At least 15 days before the
special record date, the Issuers (or, upon the written request of the Issuers,
the Trustee in the name and at the expense of the Issuers) shall mail or cause
to be mailed, first-class postage prepaid, to each Holder a notice at his or her
address as it appears in the Note Register that states the special record date,
the related payment date and the amount of such interest to be
paid.

     

    Subject
to the foregoing provisions of this Section 2.12 and for
greater certainty, each Note delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any

     

    

    
      
        
           

        

        
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    other
Note shall carry the rights to interest accrued and unpaid, and to accrue, which
were carried by such other Note.

     

    
      	
              Section
      2.13  

            	
              CUSIP Numbers; ISIN
      Numbers.

            

    

     

    The
Issuers in issuing the Notes may use CUSIP numbers and/or ISIN numbers (if then
generally in use) and, if so, the Trustee shall use CUSIP numbers and/or ISIN
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers.  The Issuers will as
promptly as practicable notify the Trustee of any change in the CUSIP numbers
and/or ISIN numbers.

     

    ARTICLE
3

     

    REDEMPTION

     

    
      	
              Section
      3.01  

            	
              Notices to
      Trustee.

            

    

     

    If the
Issuers elect to redeem Notes pursuant to Section 3.07 hereof,
they shall furnish to the Trustee, at least fifteen (15) Business Days (unless
shorter notice shall be agreed to by the Trustee) before notice of redemption is
required to be mailed or caused to be mailed to Holders pursuant to Section 3.03 but not
more than 60 days before a redemption date, an Officer’s Certificate setting
forth (i) the paragraph or subparagraph of such Note and/or Section of this
Indenture pursuant to which the redemption shall occur, (ii) the redemption
date, (iii) the principal amount of the Notes to be redeemed and (iv) the
redemption price.

     

    
      	
              Section
      3.02  

            	
              Selection of Notes to
      Be Redeemed or Purchased.

            

    

     

    If less
than all of the Notes are to be redeemed or purchased in an offer to purchase at
any time, the Trustee shall select the Notes to be redeemed or purchased
(a) if the Notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities exchange
on which the Notes are listed or (b) on a pro rata basis, by lot or by
such other method as the Trustee shall deem fair and appropriate.  In
the event of partial redemption or purchase by lot, the particular Notes to be
redeemed or purchased shall be selected, unless otherwise provided herein, not
less than 30 nor more than 60 days prior to the redemption date by the Trustee
from the outstanding Notes not previously called for redemption or
purchase.

     

    The
Trustee shall promptly notify the Issuers in writing of the Notes selected for
redemption or purchase and, in the case of any Note selected for partial
redemption or purchase, the principal amount thereof to be redeemed or
purchased.  Notes and portions of Notes selected shall be in minimum
amounts of $2,000 or integral multiples of $1,000 in excess thereof; no Notes of
$2,000 or less can be redeemed in part, except that if all of the Notes of a
Holder are to be redeemed or purchased, the entire outstanding amount of Notes
held by such Holder, even if not equal to $2,000 or an integral multiple of
$1,000 in excess thereof, shall be redeemed or purchased.  Except as
provided in the preceding sentence, provisions of this Indenture that apply to
Notes called for redemption or purchase also apply to portions of Notes called
for redemption or purchase.

     

    

    
      
        
           

        

        
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              Section
      3.03  

            	
              Notice of
      Redemption.

            

    

     

    Subject
to Section 3.09
hereof, the Issuers shall mail or cause to be mailed by first-class mail,
postage prepaid, notices of redemption at least 30 days but not more than 60
days before the purchase or redemption date to each Holder of Notes to be
redeemed at such Holder’s registered address or otherwise delivered in
accordance with the procedures of DTC, except that redemption notices may be
mailed more than 60 days prior to a redemption date if the notice is issued in
connection with Article 8 or Article 13
hereof.  Except as set forth herein, notices of redemption may be
conditional.

     

    The
notice shall identify the Notes to be redeemed (including the CUSIP number and
ISIN) and shall state:

     

    (a)           the
redemption date;

     

    (b)           the
redemption price;

     

    (c)           if
any Note is to be redeemed in part only, the portion of the principal amount of
that Note that is to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion will be issued in the name of the Holder upon cancellation of
the original Note;

     

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

     

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

     

    (f)           that,
unless the Issuers default in making such redemption payment, interest on Notes
called for redemption ceases to accrue on and after the redemption
date;

     

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

     

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

     

    (i)           if
in connection with a redemption pursuant to Section 3.07(b)
hereof, any condition to such redemption.

     

    At the
Issuers’ request, the Trustee shall give the notice of redemption in the
Issuers’ names and at their expense; provided that the
Issuers shall have delivered to the Trustee, at least fifteen (15) Business Days
before notice of redemption is required to be mailed or caused to be mailed to
Holders pursuant to this Section 3.03 (unless
a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in the preceding paragraph.

     

    
      	
              Section
      3.04  

            	
              Effect of Notice of
      Redemption.

            

    

     

    Once
notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price (except as provided for in Section 3.07(b)
hereof).  The notice, if mailed in a manner herein provided,
shall

     

    

    
      
        
           

        

        
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    be
conclusively presumed to have been given, whether or not the Holder receives
such notice.  In any case, failure to give such notice by mail or any
defect in the notice to the Holder of any Note designated for redemption in
whole or in part shall not affect the validity of the proceedings for the
redemption of any other Note.  Subject to Section 3.05 hereof,
on and after the redemption date, interest ceases to accrue on Notes or portions
of Notes called for redemption.

     

    
      	
              Section
      3.05  

            	
              Deposit of Redemption
      or Purchase Price.

            

    

     

    Prior to
12:00 p.m. (New York City time) on the redemption or purchase date, the Issuers
shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption or purchase price of and accrued and unpaid interest on all Notes
to be redeemed or purchased on that date.  The Trustee or the Paying
Agent shall promptly return to the Issuers any money deposited with the Trustee
or the Paying Agent by the Issuers in excess of the amounts necessary to pay the
redemption price of, and accrued and unpaid interest on, all Notes to be
redeemed or purchased.

     

    If the
Issuers comply with the provisions of the preceding paragraph, on and after the
redemption date, interest shall cease to accrue on the Notes or the portions of
Notes called for redemption.  Notes accepted for purchase pursuant to
Section 4.10 or
4.14 hereof
will cease to accrue interest on the purchase date or Change of Control Payment
Date, as applicable.  If a Note is redeemed or purchased on or after a
Record Date but on or prior to the related Interest Payment Date, then any
accrued and unpaid interest to the redemption or purchase date shall be paid to
the Person in whose name such Note was registered at the close of business on
such Record Date.  If any Note called for redemption or purchase shall
not be so paid upon surrender for redemption or purchase because of the failure
of the Issuers to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest accrued to the redemption or
purchase date not paid on such unpaid principal, in each case at the rate
provided in the Notes and in Section 4.01
hereof.

     

    
      	
              Section
      3.06  

            	
              Notes Redeemed or
      Purchased in Part.

            

    

     

    Upon
surrender of a Global Note that is redeemed or purchased in part, the Trustee
shall make a notation on the “Schedule of Exchanges of Interests in the Global
Note” attached thereto to reduce the principal amount of such Global Note to an
amount equal to the unredeemed portion of the Global Note surrendered; provided that each
such Global Note will be in a principal amount of $2,000 or an integral multiple
of $1,000 in excess thereof.  Upon surrender of a Note that is
redeemed or purchased in part, the Issuers shall issue and the Trustee shall,
upon receipt of an Authentication Order, authenticate for the Holder at the
expense of the Issuers a new Note equal in principal amount to the unredeemed or
unpurchased portion of the Note surrendered representing the same indebtedness
to the extent not redeemed or purchased; provided that each
new Note will be in a principal amount of $2,000 or an integral multiple of
$1,000 in excess thereof.  It is understood that, notwithstanding
anything in this Indenture to the contrary, only an Authentication Order and not
an Opinion of Counsel or Officer’s Certificate is required for the Trustee to
authenticate such new Note.

     

    
      	
              Section
      3.07  

            	
              Optional
      Redemption.

            

    

     

    (a)           At
any time prior to June 1, 2012, the Issuers may on any one or more occasions
redeem up to 35% of the aggregate principal amount of the Notes issued under
this Indenture at a redemption price of 108.0% of the principal amount, plus
accrued and unpaid interest to the redemption date, with the net cash proceeds
of one or more Equity Offerings; provided
that:

    

    
      
        
           

        

        
          -47-

          
            

          

        

        
           

        

      

    

    

    (1) at
least 65% of the aggregate principal amount of the Notes issued under this
Indenture on the Issue Date remains outstanding immediately after the occurrence
of such redemption (excluding Notes held by CCFC and its Subsidiaries);
and

    

    (2) the
redemption occurs within 90 days of the date of the closing of such Equity
Offering.

    

    (b)           On
or after June 1, 2013, the Issuers may redeem all or a part of the Notes upon
not less than 30 nor more than 60 days’ notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest on the Notes redeemed, to the applicable redemption date, if
redeemed during the twelve-month period beginning on June 1 of the years
indicated below, subject to the rights of Holders on the relevant record date to
receive interest on the relevant interest payment date:

    
       

      
        
          	 
      	
                  Year

                	 
      	
                  Percentage

                	 
      
	 
      	
                  2013

                	 
      	
                  104.000%

                	 
      
	 
      	
                  2014

                	 
      	
                  102.000%

                	 
      
	 
      	
                  2015
      and thereafter

                	 
      	
                  100.000%

                	 
      

        

      

       

    

    (c)           At
any time and from time to time prior to June 1, 2013, upon notice as described
in Section 3.03
hereof, the Issuers may elect to redeem all or any portion of the Notes at a
redemption price equal to the sum of :

     

    (1) 100%
of the principal amount of Notes to be redeemed; and

    

    (2) the
excess of

    

    (a) the
sum of the present values of (1) the redemption price of the Notes to be
redeemed at June 1, 2013 (as set forth in Section 3.07(b)), and (2) the
remaining scheduled payments of interest from the redemption date to June 1,
2013, but excluding accrued and unpaid interest to the redemption date,
discounted to the date of redemption on a semi-annual basis (assuming a 360 day
year consisting of twelve 30 day months) at the Treasury Rate plus 50 basis
points, over

     

    (b) 100%
of the principal amount of the Notes to be redeemed,

     

    plus
accrued and unpaid interest to, but excluding 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).

     

    (d)           Any
redemption pursuant to this Section 3.07 shall be
made pursuant to the provisions of Sections 3.01 through
3.06
hereof.

     

    
      	
              Section
      3.08  

            	
              Mandatory
      Redemption.

            

    

     

    The
Issuers shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.

     

    

    
      
        
           

        

        
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              Section
      3.09  

            	
              Offers to Repurchase
      by Application of Excess
Proceeds.

            

    

     

    (a)           In
the event that, pursuant to Section 4.10 hereof,
the Issuers shall be required to commence an Asset Sale Offer, they shall follow
the procedures specified below.

     

    (b)           The
Asset Sale Offer shall remain open for a period of 20 Business Days following
its commencement and no longer, except to the extent that a longer period is
required by applicable law (the “Offer
Period”).  No later than five Business Days after the
termination of the Offer Period (the “Purchase Date”), the
Issuers shall apply all Excess Proceeds (the “Offer Amount”) to the
purchase of Notes and, if required, pari passu Indebtedness (on a pro rata basis, if
applicable), or, if less than the Offer Amount has been tendered, all Notes and
pari passu Indebtedness tendered in response to the Asset Sale
Offer.  Payment for any Notes so purchased shall be made in the same
manner as interest payments are made.

     

    (c)           If
the Purchase Date is on or after a Record Date and on or before the related
Interest Payment Date, any accrued and unpaid interest up to but excluding the
Purchase Date, shall be paid to the Person in whose name a Note is registered at
the close of business on such Record Date.

     

    (d)           Upon
the commencement of an Asset Sale Offer, the Issuers shall send, by first-class
mail, a notice to each of the Holders, with a copy to the
Trustee.  The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer.  The Asset Sale Offer shall be made to all Holders and holders
of pari passu Indebtedness.  The notice, which shall govern the terms
of the Asset Sale Offer, shall state:

     

    (i)           that
the Asset Sale Offer is being made pursuant to this Section 3.09 and
Section 4.10
hereof and the length of time the Asset Sale Offer shall remain
open;

     

    (ii)          the
Offer Amount, the purchase price and the Purchase Date;

     

    (iii)         that
any Note not tendered or accepted for payment shall continue to accrue
interest;

     

    (iv)          that,
unless the Issuers default in making such payment, any Note accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue interest after the
Purchase Date;

     

    (v)           that
Holders electing to have a Note purchased pursuant to an Asset Sale Offer may
elect to have Notes purchased in a minimum amount of $2,000 and integral
multiples of $1,000 in excess thereof only;

     

    (vi)          that
Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall
be required to surrender the Note, with the form entitled “Option of Holder to
Elect Purchase” attached to the Note completed, or transfer by book-entry
transfer, to the Issuers, the Depositary, if appointed by the Issuers, or a
Paying Agent at the address specified in the notice at least three days before
the Purchase Date;

     

    (vii)         that
Holders shall be entitled to withdraw their election if the Issuers, the
Depositary or the Paying Agent, as the case may be, receives, not later than the
expiration of the Offer Period, a telegram, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Note the
Holder delivered for purchase and a statement that such Holder is withdrawing
his election to have such Note purchased and such previously surrendered Note
shall be returned to the Holder;

     

    

    
      
        
           

        

        
          -49-

          
            

          

        

        
           

        

      

    

    

    (viii)        that,
if the aggregate principal amount of Notes and pari passu Indebtedness
surrendered by the holders thereof exceeds the Offer Amount, the Issuers shall
select the Notes and such pari passu Indebtedness to be purchased on a pro rata basis based on the
accreted value or principal amount of the Notes or such pari passu Indebtedness
tendered (with such adjustments as may be deemed appropriate by the Trustee so
that only Notes in denominations of $2,000, or integral multiples of $1,000 in
excess thereof, shall be purchased); and

     

    (ix)          that
Holders whose Notes were purchased only in part shall be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer) representing the same indebtedness to the
extent not repurchased.

     

    (e)           On
or before the Purchase Date, the Issuers shall, to the extent lawful, (1) accept
for payment, on a pro
rata basis to the extent necessary, the Offer Amount of Notes or portions
thereof validly tendered pursuant to the Asset Sale Offer, or if less than the
Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to
be delivered to the Trustee the Notes properly accepted together with an
Officer’s Certificate stating the aggregate principal amount of Notes or
portions thereof so tendered.

     

    (f)           The
Issuers, the Depositary or the Paying Agent, as the case may be, shall promptly
mail or deliver to each tendering Holder an amount equal to the purchase price
of the Notes properly tendered by such Holder and accepted by the Issuers for
purchase, and if the Notes were purchased in part, the Issuers shall promptly
issue a new Note, and the Trustee, upon receipt of an Authentication Order,
shall authenticate and mail or deliver (or cause to be transferred by
book-entry) such new Note to such Holder (it being understood that,
notwithstanding anything in this Indenture to the contrary, no Opinion of
Counsel or Officer’s Certificate is required for the Trustee to authenticate and
mail or deliver such new Note) in a principal amount equal to any unpurchased
portion of the Note surrendered representing the same indebtedness to the extent
not repurchased; provided, that each
such new Note shall be in a principal amount of $2,000 or an integral multiple
of $1,000 in excess thereof.  Any Note not so accepted shall be
promptly mailed or delivered by the Issuers to the Holder
thereof.  The Issuers shall publicly announce the results of the Asset
Sale Offer on or as soon as practicable after the Purchase Date.

     

    (g)           Other
than as specifically provided in this Section 3.09 or Section 4.10 hereof,
any purchase pursuant to this Section 3.09 shall be
made pursuant to the applicable provisions of Sections 3.01 through
3.06
hereof.

     

    ARTICLE
4

     

    COVENANTS

     

    
      	
              Section
      4.01  

            	
              Payment of
      Notes.

            

    

     

    The
Issuers shall pay or cause to be paid the principal of, premium, if any, and
interest on the Notes on the dates and in the manner provided in the
Notes.  Principal, premium, if any, and interest shall be considered
paid on the date due if the Paying Agent, if other than the Issuers or a
Subsidiary, holds as of 12:00 p.m. (New York City time) on the due date money
deposited by the Issuers in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then
due.

     

    

    
      
        
           

        

        
          -50-

          
            

          

        

        
           

        

      

    

    

    The
Issuers shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal at the rate equal to the then
applicable interest rate on the Notes to the extent lawful; they shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.

     

    
      	
              Section
      4.02  

            	
              Maintenance of Office
      or Agency.

            

    

     

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

     

    The
Issuers may also from time to time designate one or more other offices or
agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided that no such
designation or rescission shall in any manner relieve the Issuers of their
obligation to maintain an office or agency in the continental United States for
such purposes.  The Issuers shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.

     

    The
Issuers hereby designate the Corporate Trust Office of the Trustee as one such
office or agency of the Issuers in accordance with Section 2.03
hereof.

     

    
      	
              Section
      4.03  

            	
              Reports.

            

    

     

    Whether
or not required by the Commission’s rules and regulations, so long as any Notes
are outstanding, the Issuers will furnish to the Holders unaudited quarterly
financial statements of CCFC (which statements have been reviewed by CCFC’s
certified independent accountants and certified by an Officer of CCFC) beginning
with the fiscal quarter ended March 31, 2009, and audited annual financial
statements of CCFC (which annual financial statements shall include a report
thereon from CCFC’s certified independent accountants), in each case prepared in
accordance with GAAP and accompanied by management’s discussion and analysis of
the results of operations, within 30 days after Calpine Corporation is required
to file its quarterly and annual reports, respectively, with the
Commission.

     

    The
Issuers will make available such information by posting such information on a
publicly accessible page on CCFC’s website (or that of any of its
Parents).

     

    All such
reports will be prepared in all material respects in accordance with all of the
rules and regulations applicable to such reports.

     

    
      	
              Section
      4.04  

            	
              Compliance
      Certificate.

            

    

     

    (a)           The
Issuers and each Guarantor (to the extent that such Guarantor is so required
under the TIA) shall deliver to the Trustee, within 90 days after the end of
each fiscal year ending after the Issue Date, a certificate from the principal
executive officer, principal financial officer or principal accounting officer
stating that a review of the activities of the Issuers and their Restricted
Subsidiaries

     

    

    
      
        
           

        

        
          -51-

          
            

          

        

        
           

        

      

    

    

    during
the preceding fiscal year has been made under the supervision of the signing
Officer with a view to determining whether the Issuers have complied with all
conditions and covenants under this Indenture, and further stating, as to such
Officer signing such certificate, that to his or her knowledge the Issuers have
complied with all conditions and covenants under this Indenture and are not in
default in the performance or observance of any of the covenants and conditions
under this Indenture (or, if a Default shall have occurred, describing all such
Defaults of which he or she may have knowledge and what action the Issuers are
taking or proposes to take with respect thereto).

     

    (b)           When
any Default has occurred and is continuing under this Indenture, or if the
Trustee or the holder of any other evidence of Indebtedness of the Issuers or
any Guarantor gives any notice or takes any other action with respect to a
claimed Default, the Issuers shall promptly (which shall be no more than five
(5) Business Days) deliver to the Trustee by registered or certified mail or by
facsimile transmission an Officer’s Certificate specifying such event and what
action the Issuers propose to take with respect thereto.

     

    
      	
              Section
      4.05  

            	
              Taxes.

            

    

     

    The
Issuers shall pay, and shall cause each of their Restricted Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate negotiations or
proceedings or where the failure to effect such payment is not adverse in any
material respect to the Holders of the Notes.

     

    
      	
              Section
      4.06  

            	
              Stay, Extension and
      Usury Laws.

            

    

     

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

     

    
      	
              Section
      4.07  

            	
              Limitation on
      Restricted Payments.

            

    

     

    (a)           The
Issuers shall not, and shall not permit any of their Restricted Subsidiaries to,
directly or indirectly:

     

    (1)           declare
or pay any dividend or make any other payment or distribution on account of the
Issuers or any of their Restricted Subsidiaries’ Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving any Issuer or any of its Restricted Subsidiaries) or to the direct or
indirect holders of any Issuer’s or any of its Restricted Subsidiaries’ Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of any Issuer or any
of its Restricted Subsidiaries);

     

    (2)           purchase,
redeem or otherwise acquire or retire for value (including, without limitation,
in connection with any merger or consolidation involving any Issuer) any Equity
Interests of any Issuer or Parent;

    

    
      
        
           

        

        
          -52-

          
            

          

        

        
           

        

      

    

    

    (3)           make
any payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness of any Issuer or of any Guarantor
that is subordinated to the Notes or any guarantee thereof (excluding any
intercompany Indebtedness, intercompany receivables or intercompany advances
between or among any of the Issuers and any of their Restricted Subsidiaries),
except a payment of interest or principal at the Stated Maturity thereof;
or

     

    (4)           make
any Restricted Investment

     

    (all such
payments and other actions set forth in these clauses (1) through
(4) above being collectively referred to as “Restricted
Payments”), unless, at the time of and after giving effect to such
Restricted Payment:

     

    (1)           no
Default or Event of Default has occurred and is continuing or would occur as a
consequence of such Restricted Payment;

     

    (2)           on
a pro forma basis after
giving effect to such Restricted Payment and any transaction related thereto,
the Consolidated Total Leverage Ratio of the Issuers and their Restricted
Subsidiaries would not have exceeded 5.75 to 1.0; and

     

    (3)           such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Issuers and their Restricted Subsidiaries after the Issue
Date (excluding Restricted Payments permitted by clauses (2) through
(13)(A), (14) and (15)) of Section 4.07(b)),
without duplication, of such Restricted Payment, together with the aggregate of
all other Restricted Payments made after the Issue Date, is less than the sum
of:

     

    (A)           the
sum of:

     

    (x)           Consolidated
Cash Flow; minus

     

    (y)           140%
of the Consolidated Interest Expense of the Issuers and their Restricted
Subsidiaries,

     

    each as
determined for the period (taken as one accounting period) from the beginning of
the fiscal quarter during which the Issue Date occurs to the end of the Issuers’
most recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment; plus

     

    (B)           100%
of the fair market value of any property or assets received by the Issuers and
their Restricted Subsidiaries and the aggregate net cash proceeds received by
any Issuer since the Issue Date as a contribution to its common equity capital
or surplus or from the issue or sale of Equity Interests of such Issuer (other
than Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt securities
of such Issuer that have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or Disqualified Stock or debt
securities) sold to a Subsidiary of such Issuer), plus

     

    (C)           to
the extent that any Restricted Investment that was made after the Issue Date is
sold for cash or otherwise liquidated or repaid for cash, the lesser of
(i) the cash

     

    

    
      
        
           

        

        
          -53-

          
            

          

        

        
           

        

      

    

    

    return
with respect to such Restricted Investment (less the cost of disposition, if
any) and (ii) the initial amount of such Restricted Investment, plus

     

    (D)           50%
of any cash received by the Issuers or a Restricted Subsidiary of the Issuers
after the Issue Date from an Unrestricted Subsidiary of the Issuers, to the
extent that such cash was not otherwise included in Consolidated Net Income of
the Issuers for such period, plus

     

    (E)           to
the extent that any Unrestricted Subsidiary of the Issuers is redesignated as a
Restricted Subsidiary the Issue Date, the Fair Market Value of the Issuers’
Investment in such Subsidiary as of the date of such redesignation.

     

    (b)           The
foregoing provisions of Section 4.07(a)
hereof shall not prohibit:

     

    (1)            the
payment of any dividend or distribution or the consummation of any irrevocable
redemption within 60 days after the date of declaration of the dividend or
distribution or giving of the redemption notice, as the case may be, if at the
date of declaration or notice, the dividend, distribution or redemption payment
would have complied with the provisions of this Indenture;

     

    (2)            the
making of any Restricted Payment in exchange for Equity Interests of CCFC, or
out of the net cash proceeds of the substantially concurrent sale (other than to
a Subsidiary of any Issuer) of Equity Interests of CCFC (other than Disqualified
Stock) and, to the extent contributed to CCFC, Equity Interests of Parent, or
out of the cash proceeds of the substantially concurrent contribution of common
equity capital or surplus to CCFC, provided that the
amount of any such net cash proceeds that are utilized for any such Restricted
Payment will be excluded from clause (3)(B) of Section
4.07(a);

     

    (3)            the
defeasance, redemption, repurchase or other acquisition or retirement for value
of Indebtedness or Disqualified Stock of the Issuers or any Guarantor that is
subordinated to the Notes or to any guarantee thereof with the net cash proceeds
from a substantially concurrent incurrence of Permitted Refinancing
Indebtedness;

     

    (4)            the
payment of any dividend (or, in the case of any partnership or limited liability
company, any similar distribution) by a Restricted Subsidiary of the Issuers to
the holders of any series of its Equity Interests on a pro rata basis;

     

    (5)            so
long as no Default has occurred and is continuing or would be caused thereby,
(A) the repurchase, redemption or other acquisition or retirement for value
of any Equity Interests of Parent, the Issuers or any Restricted Subsidiaries of
the Issuers in connection with any management equity subscription agreement,
stock option agreement, shareholders’ agreement, severance agreement, employee
benefit plan or agreement or similar agreement, (B) the repurchase for
value of any Equity Interests of Parent, the Issuers or any Restricted
Subsidiaries of the Issuers in the open market to satisfy stock options issued
by Parent, the Issuers or any Restricted Subsidiaries of the Issuers that are
outstanding; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests after the Issue Date may not exceed (x) $10.0 million in
any calendar year (or the pro rata portion thereof for the calendar year 2009)
or (y) $40.0 million in the aggregate since the Issue Date; provided, however, that if the
aggregate amount applied pursuant to this Section 4.07(b)(5)
shall be less than $10.0 million in any calendar year or the pro rata portion thereof for
the cal-

     

    

    
      
        
           

        

        
          -54-

          
            

          

        

        
           

        

      

    

    

    endar
year 2009 (before giving effect to any carryover), then the amount of such
shortfall may be added to the amount that may be applied under this Section
4.07(b)(5) in any subsequent calendar year, subject at all times to
the preceding clause (y);

     

    (6)            the
repurchase of Equity Interests deemed to occur upon the exercise of stock
options to the extent such Equity Interests represent a portion of the exercise
price of those stock options and repurchases of Equity Interests in connection
with the withholding of a portion of the Equity Interests granted or awarded to
a director or an employee to pay for the taxes payable by such director or
employee upon such grant or award;

     

    (7)            the
purchase by the Issuers of fractional shares upon conversion of any securities
of the Issuers into Equity Interests of the Issuers;

     

    (8)            the
declaration and payment of dividends to holders of any class or series of
Disqualified Stock of the Issuers or any preferred stock of their Restricted
Subsidiaries issued on or after the Issue Date in accordance with the Fixed
Charge Coverage Ratio test contained in Section
4.09;

     

    (9)            upon
the occurrence of (i) a Change of Control and after the completion of the
Change of Control Offer pursuant to Section 4.14 or
(ii) an Asset Sale to the extent an Asset Sale Offer is required in
accordance with this Indenture and after the completion of the Asset Sale Offer
pursuant to Section
3.09 (including, in each case, the purchase of all Notes tendered), any
purchase, defeasance, retirement, redemption or other acquisition of Capital
Stock or Indebtedness that is contractually subordinated to the Notes or any
guarantee thereof required under the terms of such Capital Stock or Indebtedness
as a result of such Change of Control or Asset Sale, as applicable;

     

    (10)          the
distribution to Parent of an amount sufficient to purchase, redeem, acquire,
cancel or otherwise retire the CCFCP Preferred Shares;

     

    (11)          the
transactions with any Person (including any Affiliate of the Issuers) set forth
in clauses (1) and (4) of Section 4.11 and the
funding of any obligations in connection therewith;

     

    (12)          the
issuance of Equity Interests of any Issuer (other than Disqualified Stock) for
other Equity Interests of such Issuer in connection with any rights offering and
payments for the redemption of fractional shares in connection with any rights
offering;

     

    (13)          the
declaration and payment of dividends or distributions to, or the making of loans
to Parent:

     

    (A)           in
amounts required for Parent to pay federal, state and local income taxes to the
extent such income taxes are attributable to the income of the Issuers and their
Restricted Subsidiaries and, to the extent of the amount actually received from
Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent
attributable to the income of the Unrestricted Subsidiaries; provided, however, that in each
case the amount of such payments in any fiscal year does not exceed the amount
that the Issuers and their Restricted Subsidiaries would be required to pay in
respect of federal, state and local income taxes for such fiscal year were the
Issuers and their Restricted Subsidiaries

     

    

    
      
        
           

        

        
          -55-

          
            

          

        

        
           

        

      

    

    

    to pay
such taxes as a stand-alone taxpayer, less any federal, state and/or local
income taxes actually payable directly by the Issuers and/or their Restricted
Subsidiaries; and

     

    (B)           in
an aggregate amount not to exceed $1.0 million per annum (such amount to be
adjusted upwards annually, beginning on January 1, 2010, by 5% on a
compounded basis) to pay reasonable accounting, legal and administrative
expenses of Parent when due;

     

    (14)          Investments
in Unrestricted Subsidiaries not to exceed the greater of (x) $20.0 million
and (y) 1.0% of Total Assets since the Issue Date;

     

    (15)          the
making of any Restricted Payment with the proceeds from the transfer of an
undivided interest in the Magic Valley Generating Center in Edinburg, Texas
pursuant to the purchase option set forth in Article XIV of the Power Purchase
and Sale Agreement with South Texas Electric Cooperative, Inc., dated
May 22, 1998, as in effect on the Issue Date;

     

    (16)          additional
Restricted Payments in an aggregate amount not to exceed $10.0 million in any
calendar year (or the pro
rata portion thereof for the calendar year 2009); provided, however, that if the
aggregate amount applied pursuant to this Section
4.07(b)(16) shall be less than $10.0 million in any calendar year or
the pro rata portion
thereof for the calendar year 2009 (before giving effect to any carryover), then
the amount of such shortfall may be added to the amount that may be applied
under this Section
4.07(b)(16) in any subsequent calendar year; and

     

    (17)          additional
Restricted Payments so long as at the time of such Restricted Payment, the
amount of such Restricted Payments together with all other Restricted Payments
made pursuant to Section
4.07(b)(17) does not to exceed the greater of (x) $75.0 million
and (y) 3.5% of Total Assets.

     

    The
amount of all Restricted Payments (other than cash) will be the Fair Market
Value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Issuers or their Restricted
Subsidiaries, as the case may be, pursuant to the Restricted
Payment.  The Fair Market Value of any assets or securities that are
required to be valued by this Section 4.07 will be
determined by the Board of Directors of CCFC; provided that if the
Fair Market Value of such assets or securities involves an aggregate amount in
excess of $25.0 million, the Issuers shall deliver to the Trustee a resolution
of the Board of Directors of CCFC set forth in an Officer’s Certificate
certifying that such valuation has been approved by a majority of the
disinterested members of the Board of Directors of CCFC.

     

    For
purposes of determining compliance with this Section 4.07, in the
event that a Restricted Payment meets the criteria of more than one of the types
of Restricted Payments described in the above clauses, the Issuers, in their
sole discretion, may order and classify, and from time to time may reorder and
reclassify, such Restricted Payment if it would be permitted at the time of any
such reclassification.

     

    
      	
              Section
      4.08  

            	
              Dividend and Other
      Payment Restrictions Affecting Restricted
    Subsidiaries.

            

    

     

    (a)           The
Issuers shall not, and shall not permit any of their Restricted Subsidiaries to,
directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to:

     

    

    
      
        
           

        

        
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    (1)           pay
dividends or make any other distributions on its Capital Stock to the Issuers or
any of their Restricted Subsidiaries, or with respect to any other interest or
participation in, or measured by, its profits, or pay any indebtedness owed to
the Issuers or any of their Restricted Subsidiaries;

     

    (2)           make
loans or advances to the Issuers or any of their Restricted Subsidiaries;
or

     

    (3)           transfer
any of their properties or assets to the Issuers or any of their Restricted
Subsidiaries.

     

    (b)           The
restrictions in Section 4.08(a)
hereof shall not apply to encumbrances or restrictions existing under or by
reason of:

     

    (1)           agreements
as in effect on the Issue Date and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings of
those agreements, provided that the
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are not materially more restrictive,
taken as a whole, with respect to such dividend and other payment restrictions
than those contained in those agreements on the Issue Date as determined by the
applicable Issuer or such Restricted Subsidiary;

     

    (2)           this
Indenture, the Notes, the related the guarantees and the Security
Documents;

     

    (3)           applicable
law, rule, regulation or order;

     

    (4)           customary
non-assignment provisions in contracts, agreements, leases, permits and licenses
entered into or issued in the ordinary course of business;

     

    (5)           purchase
money obligations for property acquired in the ordinary course of business and
Capital Lease Obligations that impose restrictions on the property purchased or
leased of the nature described in clause (1) and (3) of Section
4.08(a);

     

    (6)           any
agreement for the sale or other disposition of the stock or assets of a
Restricted Subsidiary that restricts distributions by that Restricted Subsidiary
pending the sale or other disposition;

     

    (7)           Permitted
Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are not materially more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced, as
reasonably determined by the applicable Issuer or such Restricted
Subsidiary;

     

    (8)           Liens
permitted to be incurred pursuant to Section 4.12 and
associated agreements that limit the right of the debtor to dispose of the
assets subject to such Liens;

     

    (9)           provisions
limiting or prohibiting the disposition or distribution of assets or property in
joint venture agreements, partnership and membership agreements, asset sale
agreements, sale-leaseback agreements, stock sale agreements and other similar
agreements entered into (i) in the ordinary course of business or
(ii) with the approval of the applicable Is-

     

    

    
      
        
           

        

        
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    suer’s or
the Restricted Subsidiary’s Board of Directors or chief financial officer, which
limitation or prohibition is applicable only to the assets that are the subject
of such agreements;

     

    (10)         provisions
restricting cash or other deposits or net worth imposed by customers or
suppliers under contracts entered into in the ordinary course of
business;

     

    (11)         restrictions
or conditions contained in any trading, netting, operating, construction,
service, supply, purchase, sale or similar agreement to which the Issuers or any
of their Restricted Subsidiaries is a party entered into in the ordinary course
of business; provided that such
agreement prohibits the encumbrance of solely the property or assets of the
applicable Issuer or such Restricted Subsidiary that are the subject of such
agreement, the payment rights arising thereunder and/or the proceeds thereof and
not to any other asset or property of the applicable Issuer or such Restricted
Subsidiary or the assets or property of any other Restricted
Subsidiary;

     

    (12)         any
instrument governing Indebtedness or Capital Stock of a Person acquired by the
Issuers or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness or Capital Stock was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired; provided that, in the
case of Indebtedness, such Indebtedness was permitted by the terms of this
Indenture to be incurred;

     

    (13)         the
transfer of an undivided interest in the Magic Valley Generating Center in
Edinburg, Texas pursuant to the purchase option set forth in Article XIV of the
Power Purchase and Sale Agreement with South Texas Electric Cooperative, Inc.,
dated May 22, 1998, as in effect on the Issue Date; and

     

    (14)         with
respect to clause (3) of Section 4.08(a) only,
restrictions encumbering property at the time such property was acquired by the
Issuers or any of their Restricted Subsidiaries, so long as such restriction
relates solely to the property so acquired and was not created in connection
with or in anticipation of such acquisition.

     

    
      	
              Section
      4.09  

            	
              Limitation on
      Incurrence of Indebtedness and Issuance of Preferred
      Stock.

            

    

     

    (a)           The
Issuers shall not, and shall not permit any of their Restricted Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, “incur”) any
Indebtedness (including Acquired Debt), and the Issuers will not issue any
Disqualified Stock and will not permit any of their Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the
Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified
Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or
issue preferred stock, if the Fixed Charge Coverage Ratio for the Issuers’ most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or preferred stock is issued
would have been at least 2.0 to 1.0, determined on a pro forma basis (including a
pro forma application
of the net proceeds therefrom), as if the additional Indebtedness had been
incurred or the Disqualified Stock or preferred stock had been issued, as the
case may be, at the beginning of such four-quarter period.

     

    (b)           The
provisions of Section
4.09(a) will not prohibit the incurrence of any of the following items of
Indebtedness (collectively, “Permitted
Debt”):

     

    

    
      
        
           

        

        
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    (1)           the
incurrence by the Issuers and their Restricted Subsidiaries and the guarantee by
the Guarantors of Indebtedness and letters of credit under Credit Facilities in
an aggregate principal amount at any one time outstanding under this Section
4.09(b)(1) (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Issuers and their
Restricted Subsidiaries thereunder) not to exceed $50.0 million;

     

    (2)           the
incurrence by the Issuers and their Restricted Subsidiaries of Indebtedness
represented by the Notes and the related guarantees to be issued on the Issue
Date and the incurrence by any Restricted Subsidiary of the Issuers of any other
guarantee of the Notes;

     

    (3)           the
incurrence by the Issuers or any of their Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case, incurred for the purpose of financing
all or any part of the purchase price or cost of design, construction,
installation or improvement of property, plant or equipment used or useful in
the business of the Issuers or any of their Restricted Subsidiaries or within
180 days thereafter; provided that at the
time of incurrence of any such Indebtedness, the aggregate amount of
Indebtedness outstanding under this Section 4.09(b)(3),
including all Permitted Refinancing Indebtedness incurred to refund, refinance
or replace any Indebtedness incurred pursuant to this Section 4.09(b)(3),
does not exceed the greater of (x) $100.0 million and (y) 5.0% of
Total Assets;

     

    (4)           Indebtedness,
Disqualified Stock or preferred stock of Persons or assets that are acquired by
the Issuers or any of their Restricted Subsidiaries or merged into the Issuers
or any of their Restricted Subsidiaries in accordance with the terms of this
Indenture; provided that such Indebtedness,
Disqualified Stock or preferred stock is not incurred in contemplation of such
acquisition or merger; and provided further that after
giving effect to such acquisition or merger, either (a) the Issuers would
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 4.09(a) or
(b) the Fixed Charge Coverage Ratio would be no less than that immediately
prior to such acquisition or merger;

     

    (5)           the
incurrence by the Issuers or any of their Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used
to refund, refinance or replace, Indebtedness (other than intercompany
Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a) or
clauses (2), (3), (4), (5), (13), (14), (15) or (17) of Section
4.09(b);

     

    (6)           the
incurrence by the Issuers or any of their Restricted Subsidiaries of
intercompany Indebtedness between or among the Issuers or any of their
Restricted Subsidiaries; provided, however,
that:

     

    (A)           if
the Issuers or any Guarantor is the obligor on such Indebtedness and the payee
is not an Issuer or a Guarantor, such Indebtedness must be expressly
subordinated to the prior payment in full in cash of all Obligations then due
with respect to the Notes, in the case of the Issuers, or the guarantee, in the
case of a Guarantor; and

     

    (B)           (i)
any subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Issuers or any of their
Restricted Subsidiaries and (ii) any sale or other transfer of any such
Indebtedness to a Person that is not either an Issuer or a Restricted Subsidiary
of the Issuers (except transfers

     

    

    
      
        
           

        

        
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    to the
Collateral Trustee to secure Parity Secured Obligations) will be deemed, in each
case, to constitute an incurrence of such Indebtedness by such Issuer or such
Restricted Subsidiary, as the case may be, that was not permitted by this Section
4.09(b)(6);

     

    (7)           the
Guarantee by the Issuers or any Guarantor of Indebtedness that was permitted by
this Indenture to be incurred by another provision of this Section
4.09(b);

     

    (8)           the
issuance by any of the Issuers’ Restricted Subsidiaries to an Issuer or to any
of its Restricted Subsidiaries of shares of preferred stock; provided, however,
that:

     

    (A)           any
subsequent issuance or transfer of Equity Interests that results in any such
preferred stock being held by a Person other than an Issuer or its Restricted
Subsidiary; and

     

    (B)           any
sale or other transfer of any such preferred stock to a Person that is not
either an Issuer or a Restricted Subsidiary of an Issuer

     

    will be
deemed, in each case, to constitute an issuance of such preferred stock by such
Issuer or such Restricted Subsidiary, as the case may be, that was not permitted
by this Section
4.09(b)(8);

     

    (9)           the
incurrence by the Issuers or any of their Restricted Subsidiaries of Hedging
Obligations in the ordinary course of business or consistent with past
practice;

     

    (10)         the
incurrence by the Issuers or any of their Restricted Subsidiaries of
Indebtedness in respect of workers’ compensation claims, self-insurance
obligations, bankers’ acceptances, performance, surety and similar bonds
provided by the Issuers or any of their Restricted Subsidiaries in the ordinary
course of business;

     

    (11)         the
incurrence by the Issuers or any of their Restricted Subsidiaries of
Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument inadvertently drawn against insufficient
funds, so long as such Indebtedness is covered within five Business
Days;

     

    (12)         the
incurrence of Indebtedness arising from agreements of the Issuers or any of
their Restricted Subsidiaries 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 Equity
Interests of a 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) actually received by such Issuer and/or such
Restricted Subsidiary in connection with such disposition;

     

    (13)         Indebtedness
of CCFC or any Restricted Subsidiary consisting of (i) the financing of
insurance premiums or (ii) take-or-pay obligations contained in supply
arrangements, in each case, in the ordinary course of business and consistent
with past practice;

     

    (14)         Indebtedness
of the Issuers and their Restricted Subsidiaries existing on the Issue Date (but
excluding Indebtedness to be repaid with the proceeds of the Notes issued on the
Issue Date as described in the Offering Memorandum when so repaid);

     

    

    
      
        
           

        

        
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    (15)         (a)
Environmental CapEx Debt or (b) Indebtedness in respect of Upgrades; provided, in each
case, that prior to the incurrence of any such Indebtedness, CCFC shall deliver
to the Trustee an Officer’s Certificate designating such Indebtedness as
Environmental CapEx Debt or Indebtedness in respect of Upgrades, as
applicable;

     

    (16)         [Intentionally
Omitted]; and

     

    (17)         the
incurrence by the Issuers or any of their Restricted Subsidiaries of additional
Indebtedness in an aggregate principal amount (or accreted value, as applicable)
at any time outstanding pursuant to this Section
4.09(b)(17), including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred pursuant to
this clause (17), not to exceed the greater of (x) $100.0 million and
(y) 5.0% of Total Assets (which may, but need not, be incurred under a
Credit Facility).

     

    (c)           The
Issuers shall not, and shall not permit any Guarantor to, incur any Indebtedness
(including Permitted Debt) that is contractually subordinated in right of
payment to any other Indebtedness of the Issuers or that Guarantor unless such
Indebtedness is also contractually subordinated in right of payment to the Notes
or the applicable guarantee on substantially identical terms; provided, however, that no
Indebtedness of the Issuers will be deemed to be contractually subordinated in
right of payment to any other Indebtedness of the Issuers solely by virtue of
being unsecured or by virtue of being secured on a junior basis.

     

    (d)           For
purposes of determining compliance with this Section 4.09, in the event that an
item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (17) of
this Section
4.09(b), or is entitled to be incurred pursuant to Section 4.09(a), the
Issuers will be permitted to classify such item of Indebtedness on the date of
its incurrence, or later reclassify from time to time all or a portion of such
item of Indebtedness, in any manner that complies with this Section
4.09.  The accrual of interest, the accretion or amortization
of original issue discount, the payment of interest on any Indebtedness in the
form of additional Indebtedness with the same terms, and the payment of
dividends on Disqualified Stock or preferred stock in the form of additional
shares of the same class of Disqualified Stock or preferred stock will not be
deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock
or preferred stock for purposes of this Section 4.09; provided, in each
such case, that the amount thereof is included in Fixed Charges of the Issuers
as accrued.  Notwithstanding any other provision of this Section 4.09, the
maximum amount of Indebtedness that the Issuers or any of their Restricted
Subsidiaries may incur pursuant to this Section 4.09 shall
not be deemed to be exceeded solely as a result of fluctuations in exchange
rates or currency values.

     

    
      	
              Section
      4.10  

            	
              Asset
      Sales.

            

    

     

    (a)           The
Issuers shall not, and shall not permit any of their Restricted Subsidiaries to,
consummate an Asset Sale unless:

     

    (1)           the
Issuers (or their Restricted Subsidiary, as the case may be) receive
consideration at the time of the Asset Sale at least equal to the Fair Market
Value of the assets or Equity Interests issued or sold or otherwise disposed of;
and

     

    (2)           at
least 75% of the consideration received in the Asset Sale by the Issuers or such
Restricted Subsidiary is in the form of cash or Cash Equivalents.  For
purposes of this provision, each of the following will be deemed to be
cash:

     

    

    
      
        
           

        

        
          -61-

          
            

          

        

        
           

        

      

    

    

    (A)           any
liabilities, as shown on the Issuers’ most recent consolidated balance sheet, of
the Issuers or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any guarantee
thereof) and assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Issuers or such Restricted
Subsidiary from further liability;

     

    (B)           any
securities, notes or other obligations received by the Issuers or any such
Restricted Subsidiary from such transferee that are converted (by sale or other
disposition) by the Issuers or such Restricted Subsidiary into cash, to the
extent of the cash received in that conversion within 60 days; and

     

    (C)           reasonable
reserves for indemnity obligations and purchase price adjustments funded in cash
or held back by the purchaser.

     

    (b)           Within
365 days after the receipt of any Net Proceeds from an Asset Sale or, if CCFC or
any of its Restricted Subsidiaries has entered into a binding commitment or
commitments with respect to any of the actions described in Section
4.10(b)(3)(A) through (3)(C) below,
within the later of (x) 365 days after the receipt of any Net Proceeds from
an Asset Sale or (y) 365 days after the entering into such commitment or
commitments, CCFC (or the applicable Restricted Subsidiary, as the case may be)
may apply such Net Proceeds:

     

    (1)           in
the case of a sale of assets of a Restricted Subsidiary of the Issuers that is
not a Guarantor, to repay Indebtedness of that Restricted Subsidiary and
correspondingly reduce commitments with respect thereto;

     

    (2)           in
the case of a sale of assets pledged to secure Indebtedness (including Capital
Lease Obligations), other than Parity Secured Debt, to repay the Indebtedness
secured by those assets;

     

    (3)           in
the case of any Asset Sale:

     

    (A)                  to
acquire all or substantially all of the assets of, or all or a majority of the
Voting Stock of, a Person engaged in a Permitted Business, provided that such
Person becomes a Restricted Subsidiary;

     

    (B)                  to
make a capital expenditure (including, without limitation, a maintenance capital
expenditure or expense); or

     

    (C)                  to
acquire other assets that are not classified as current assets under GAAP and
that are used or useful in a Permitted Business;

     

    (4)           to
collateralize the reimbursement obligations of CCFC or any of its Restricted
Subsidiaries in connection with surety or performance bonds or letters of credit
or bankers’ acceptances issued in the ordinary course of business;
or

     

    (5)           any
combination of the foregoing.

     

    (c)           The
Net Proceeds from any sale of Collateral or from any issuance of Equity
Interests that constitute an Asset Sale are required pursuant to the terms of
the Secured Debt Documents to be deposited into a Cash Collateral Account as
part of the Collateral.  As to any other Net Proceeds,

     

    

    
      
        
           

        

        
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    pending
final application of such Net Proceeds in accordance with this Section 4.10, the
Issuers may temporarily reduce revolving credit borrowings or otherwise invest
the Net Proceeds in any manner that is not prohibited by this
Indenture.

     

    (d)           Any
Net Proceeds from Asset Sales that are not applied or invested as provided in
Section 4.10(b)
will constitute “Excess Proceeds,”
except that if any portion of any Net Proceeds from an Asset Sale is required at
any time pursuant to any Secured Debt Document to be applied to the mandatory
prepayment, redemption, repurchase or purchase of Parity Secured Debt or to
provide cash collateral for letters of credit issued under Parity Secured Debt,
then all of the Net Proceeds from that Asset Sale will be deemed to be “Excess
Proceeds” at that time.  When the aggregate amount of Excess Proceeds
exceeds $40.0 million, the Issuers shall make an offer to all Holders and all
other holders of other Indebtedness that is pari passu with the Notes
(and, so long as the Notes are secured, Equally and Ratably secured with the
Notes) containing provisions similar to those set forth in this Indenture with
respect to offers to purchase or redeem with the proceeds of sales of assets, to
purchase (or repay, prepay or redeem, as applicable) an aggregate principal
amount of Notes and such other pari passu Indebtedness that
may be purchased (or repaid, prepaid or redeemed) equal to the aggregate Excess
Proceeds (an “Asset
Sale Offer”).  The offer price for the Notes in any Asset Sale
Offer will be equal to 100% of the principal amount plus accrued and unpaid
interest to the date of purchase, and will be payable in cash.  If any
Excess Proceeds remain after consummation of an Asset Sale Offer, the Issuers
may use those Excess Proceeds for any purpose not otherwise prohibited by this
Indenture.  If the aggregate principal amount of Notes and other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Issuers will select the Notes and such other pari passu Indebtedness to be
purchased on a pro rata
basis.  Upon completion of each Asset Sale Offer, the amount of Excess
Proceeds will be reset at zero.

     

    (e)           The
Issuers shall comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent those
laws and regulations are applicable in connection with each repurchase of Notes
pursuant to an Asset Sale Offer.  To the extent that the provisions of
any securities laws or regulations conflict with the Asset Sale provisions of
this Indenture, the Issuers shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached their obligations under the
Asset Sale provisions of this Indenture by virtue of such conflict.

     

    
      	
              Section
      4.11  

            	
              Transactions with
      Affiliates.

            

    

     

    (a)           The
Issuers shall not, and shall not permit any of their Restricted Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate of the Issuers
(each, an “Affiliate
Transaction”) involving aggregate payments in excess of $10.0 million,
unless:

     

    (1)           the
Affiliate Transaction is on terms that are no less favorable (as reasonably
determined by the Issuers) to the Issuers or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable transaction by such
Issuer or such Restricted Subsidiary with an unrelated Person; and

     

    (2)           the
Issuers deliver to the Trustee:

     

    (A)           with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $25.0 million, a resolution
of

    

    
      
        
           

        

        
          -63-

          
            

          

        

        
           

        

      

    

    

    the Board
of Directors of CCFC set forth in an Officer’s Certificate certifying that such
Affiliate Transaction complies with this Section 4.11 and that
such Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors of CCFC; and

     

    (B)           with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $50.0 million, an opinion as to
the fairness to the Issuers or such Restricted Subsidiary of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.

     

    (b)           The
following items will not be deemed to be Affiliate Transactions and, therefore,
will not be subject to the provisions of Section
4.11(a):

     

    (1)           any
employment agreement or director’s engagement agreement, employee benefit plan,
officer and director indemnification agreement or any similar arrangement
entered into by the Issuers or any of their Restricted Subsidiaries in the
ordinary course of business or approved by the relevant Board of
Directors;

     

    (2)           transactions
between or among the Issuers and/or their Restricted Subsidiaries;

     

    (3)           transactions
with a Person that is an Affiliate of an Issuer solely because such Issuer owns,
directly or through a Restricted Subsidiary, an Equity Interest in, or controls,
such Person;

     

    (4)           payment
of reasonable directors’ fees and indemnities to Persons who are not otherwise
Affiliates of the Issuers;

     

    (5)           any
issuance of Equity Interests (other than Disqualified Stock) of the Issuers to
Affiliates of the Issuers;

     

    (6)           Restricted
Payments that do not violate the provisions of Section 4.07 or a
Permitted Investment;

     

    (7)           loans
or advances to employees in the ordinary course of business not to exceed $10.0
million in the aggregate outstanding at any one time;

     

    (8)           any
agreement, instrument or arrangement as in effect as of the Issue Date and any
transactions contemplated thereby and any amendment thereto or replacement
thereof, so long as any such amendment or replacement agreement that at the time
such amendment or agreement is executed is no less favorable than those that
would have been obtained in a comparable transaction by the relevant Issuer or
such Restricted Subsidiary with an unrelated Person;

     

    (9)           any
pro rata distribution
(including a rights offering) to all holders of a class of Equity Interests or
Indebtedness of the Issuers or any of their Restricted Subsidiaries, including
Persons who are Affiliates of the Issuers or any of their Restricted
Subsidiaries;

     

    (10)         any
transaction involving sales of electric capacity, energy, ancillary services,
transmission services and products, steam, emissions credits, fuel, fuel
transportation and fuel

     

    

    
      
        
           

        

        
          -64-

          
            

          

        

        
           

        

      

    

    

    storage
in the ordinary course of business on terms that are no less favorable (as
reasonably determined by the Issuers) to the Issuers or the relevant Restricted
Subsidiary of the Issuers than those that would have been obtained in a
comparable transaction by the Issuers or such Restricted Subsidiary with an
unrelated Person;

     

    (11)         if
the Issuers or any of their Restricted Subsidiaries enter into a transaction
involving sales of electric capacity, energy, ancillary services, transmission
services and products, steam, emissions credits, fuel, fuel transportation and
fuel storage with any Person that is not an Affiliate, any amendment to any
agreement with an Affiliate with respect thereto that modifies such agreement
solely with respect to the subject matter of the transaction with such
non-Affiliate;

     

    (12)         the
trading and sharing of parts and components for equipment, tools and
non-material equipment, among CCFC and its Affiliates, in the ordinary course of
business and consistent with past practices of the relevant Persons, including
for purposes of spare or replacement;

     

    (13)         transactions
with customers, clients, suppliers, joint venture partners or purchasers or
sellers of goods or services (including pursuant to joint venture agreements)
otherwise in compliance with the terms of this Indenture that are fair to the
Issuers and its Restricted Subsidiaries, in the determination of a senior
financial officer of the Issuers, or are on terms not materially less favorable
taken as a whole would reasonably have been obtained at such time from an
unaffiliated party; and

     

    (14)         transactions
in which the Issuers or any Restricted Subsidiary of the Issuers, as the case
may be, delivers to the Trustee a letter from an accounting, appraisal or
investment banking firm of national standing stating that such transaction is
fair to the Issuers or such Restricted Subsidiary from a financial point of view
or meets the requirements of Section
4.11(a)(1).

     

    
      	
              Section
      4.12  

            	
              Liens.

            

    

     

    The
Issuers will not and will not permit any of their Restricted Subsidiaries to,
directly or indirectly, create, incur, assume or otherwise cause or suffer to
exist or become effective any Lien of any kind on any asset now owned or
hereafter acquired, except Permitted Liens.

     

    
      	
              Section
      4.13  

            	
              Corporate
      Existence.

            

    

     

    Subject
to Article 5
hereof, the Issuers shall do or cause to be done all things necessary to
preserve and keep in full force and effect (i) their corporate existence, and
the corporate, partnership or other existence of each of the Guarantors, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Issuers or any such Guarantor and (ii) the
rights (charter and statutory), licenses and franchises of the Issuers and the
Guarantors; provided that the
Issuers shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of the Guarantors, if
the Issuers in good faith shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Issuers and their
Restricted Subsidiaries, taken as a whole.

     

    

    
      
        
           

        

        
          -65-

          
            

          

        

        
           

        

      

    

    

    
      	
              Section
      4.14  

            	
              Offer to Repurchase
      upon Change of Control.

            

    

     

    (a)           If
a Change of Control occurs, each Holder will have the right to require the
Issuers to repurchase all or any part (equal to $2,000 or an integral multiple
of $1,000) of that Holder’s Notes pursuant to a change of control offer (the
“Change of Control
Offer”) on the terms set forth in this Indenture. In the Change of
Control Offer, the Issuers will offer a payment (the “Change of Control
Payment”) in cash equal to 101% of the aggregate principal amount of
Notes repurchased plus accrued and unpaid interest on the Notes repurchased, to
the date of purchase. Within 30 days following any Change of Control, the
Issuers will mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Notes on the date for payment specified in the notice (the “Change of Control Payment
Date”), which date will be no earlier than 30 days and no later than 60
days from the date such notice is mailed, pursuant to the procedures required by
this Indenture and described in such notice. The Issuers will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of this Indenture,
the Issuers will comply with the applicable securities laws and regulations and
will not be deemed to have breached their obligations under the Change of
Control provisions of this Indenture by virtue of such compliance.

     

    (b)           On
the Change of Control Payment Date, the Issuers will, to the extent
lawful:

     

    (1)          accept
for payment all Notes or portions of Notes 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 Notes or portions of Notes properly tendered; and

     

    (3)          deliver
or cause to be delivered to the Trustee the Notes properly accepted together
with an Officer’s Certificate stating the aggregate principal amount of Notes or
portions of Notes being purchased by the Issuers.

     

    (c)           The
Paying Agent will promptly mail to each Holder properly tendered the Change of
Control Payment for such Notes, and the Trustee will, upon receipt of an
Authentication Order, promptly authenticate and mail (or cause to be transferred
by book entry) to each holder a new note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each new note
will be in a principal amount of $2,000 or an integral multiple of
$1,000.

     

    (d)           The
Issuers will not be required to make a Change of Control Offer upon a Change of
Control if (1) 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 Notes properly tendered and not withdrawn under the Change of
Control Offer, or (2) notice of redemption has been given pursuant to
Section 3.07 unless and until there is a default in payment of the applicable
redemption price.

     

    (e)           Notwithstanding
anything to the contrary herein, a Change of Control Offer may be made in
advance of a Change of Control, conditional upon consummation of such Change of
Control, if a definitive agreement is in place for the Change of Control at the
time of making of the Change of Control Offer.

    

    
      
        
           

        

        
          -66-

          
            

          

        

        
           

        

      

    

    

    (f)           Other
than as specifically provided in this Section 4.14, any
purchase pursuant to this Section 4.14 shall be
made pursuant to the provisions of Sections 3.02, 3.05 and 3.06
hereof.

     

    
      	
              Section
      4.15  

            	
              Changes in Covenants
      When Notes Rated Investment
Grade.

            

    

     

    (a)           If
on any date following the Issue Date:

     

    (1)          the
rating assigned to the Notes by either S&P or Moody’s is an Investment Grade
Rating and

     

    (2)          no
Default or Event of Default shall have occurred and be continuing,

     

    then,
beginning on that day and subject to the provisions of the following paragraph,
the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.16(a)(1),
4.16(a)(3), 4.17, 4.22 and 5.01(a)(4) of this Indenture will be
suspended.

     

    (b)           Notwithstanding
the provisions of Section 4.15(a), if
the ratings assigned by both such rating agencies with respect to the Notes
should subsequently decline to below an Investment Grade Rating, the foregoing
covenants will be reinstituted as of and from the date that both such ratings
are below Investment Grade, unless and until such Notes subsequently attain an
Investment Grade Rating from either S&P or Moody’s (in which event the
suspended covenants will again be suspended for such time that the Notes
maintain an Investment Grade Rating from either S&P or Moody’s); provided, however, that no
Default, Event of Default or breach of any kind will be deemed to exist under
this Indenture, the Security Documents, the Notes or the related Guarantees with
respect to the suspended covenants, and none of CCFC or any of its Subsidiaries
will bear any liability for any actions taken or events occurring after such
Notes attain an Investment Grade Rating from either S&P or Moody’s and
before any reinstatement of the suspended covenants as provided above, or any
actions taken at any time pursuant to any contractual obligation arising prior
to the reinstatement, regardless of whether those actions or events would have
been permitted if the applicable suspended covenant had remained in effect
during such period.

     

    
      	
              Section
      4.16  

            	
              Sale and
      Leaseback.

            

    

     

    (a)           The
Issuers will not, and will not permit any of their Restricted Subsidiaries to,
enter into any sale and leaseback transaction; provided that the
Issuers or any of their Restricted Subsidiaries may enter into a sale and
leaseback transaction if:

     

    (1)           the
Issuers or the Restricted Subsidiary, as applicable, could have incurred
Indebtedness in an amount equal to the Attributable Debt relating to such sale
and leaseback transaction under Section
4.09;

     

    (2)           the
gross cash proceeds of that sale and leaseback transaction are at least equal to
the Fair Market Value of the property that is the subject of that sale and
leaseback transaction; and

     

    (3)           if
such sale and leaseback transaction constitutes an Asset Sale, the transfer of
assets in that sale and leaseback transaction is permitted by, and the Issuers
apply the proceeds of such transaction in compliance with Section
4.10.

     

    

    
      
        
           

        

        
          -67-

          
            

          

        

        
           

        

      

    

    

    (b)           Section 4.16(a) shall
not apply to a sale and leaseback transaction entered into between an Issuer and
a Restricted Subsidiary or between Restricted Subsidiaries of the
Issuers.

     

    
      	
              Section
      4.17  

            	
              Business
      Activities.

            

    

     

    The
Issuers shall not, and shall not permit any of their Restricted Subsidiaries to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Issuers and their Subsidiaries taken as a
whole.

     

    
      	
              Section
      4.18  

            	
              Maintenance of
      Properties; Insurance.

            

    

     

    (a)           Subject
to, and in compliance with, the provisions of Article 10 and the
provisions of the applicable Security Documents, the Issuers shall cause all
material properties used or useful in the conduct of their business or the
business of any of the Guarantors to be maintained and kept in good operating
condition, repair and working order (ordinary wear and tear and casualty loss
excepted) and supplied with all necessary equipment and shall cause to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereto; provided, that the
Issuers shall not be obligated to make such repairs, renewals, replacements,
betterments and improvements that would not result in a material adverse effect
on the ability of the Issuers and the Guarantors to satisfy their obligations
under the Notes, the Guarantees, this Indenture and the Security
Documents.

     

    (b)           The
Issuers shall, and shall cause their Subsidiaries to, maintain with financially
sound and reputable insurance companies, insurance on their property and assets
(including the Collateral), in at least such amounts, with such deductibles and
against at least such risks as is customary for companies of the same or similar
size engaged in the same or similar businesses as those of the Issuers and their
Subsidiaries and furnish to the Collateral Trustee, upon written request, full
information as to such Persons’ property and liability insurance
carriers.  The Issuers shall, and shall cause their Subsidiaries to,
cause all their liability insurance policies to name the Secured Parties, as a
class, as additional insureds and shall cause all its property and casualty
policies to name the Collateral Trustee as sole loss payee.

     

    
      	
              Section
      4.19  

            	
              Additional Subsidiary
      Guarantees; Further Assurances;
  Insurance.

            

    

     

    (a)           If
after the Issue Date the Issuers or any of their Restricted Subsidiaries
acquires or creates another Material Domestic Subsidiary, then that Domestic
Subsidiary will become a Guarantor and (A) execute a supplemental indenture
and a joinder agreement to the Security Documents (or any additional security
documents) in form and substance reasonably satisfactory to the Trustee
providing that such Subsidiary shall become a Guarantor under this Indenture and
a party as grantor to the Security Documents, (B) deliver an Opinion of
Counsel satisfactory to the Trustee, in each case, within 10 Business Days of
the date on which it was acquired or created and (C) take all actions
required by the Security Documents to perfect the Liens created
thereunder.

     

    (b)           The
Issuers and each Guarantor will do or cause to be done all acts and things which
may be required, or which the Collateral Trustee from time to time may
reasonably request, to assure and confirm that the Collateral Trustee holds, for
the benefit of the Holders duly created, enforceable and perfected first
priority Liens (subject to Permitted Liens) upon all Collateral.

     

    (c)           Upon
request of the Collateral Trustee at any time and from time to time, the Issuers
and each Guarantor will promptly execute, acknowledge and deliver such security
documents, instruments, certificates, notices and other documents and take such
other actions as shall be required or

    

    
      
        
           

        

        
          -68-

          
            

          

        

        
           

        

      

    

    

    which the
Collateral Trustee may reasonably request to grant, perfect or maintain the
priority of (subject to Permitted Liens) the Liens and benefits intended to be
conferred as contemplated by the Secured Debt Documents and the Security
Documents for the benefit of the holders of the Parity Secured
Obligations.

     

    (d)           The
Issuers and the Guarantors will maintain with financially sound and reputable
insurance companies, insurance on their property and assets (including the
Collateral) in at least such amounts, with such deductibles and against at least
such risks as is customary for companies of the same or similar size engaged in
the same or similar businesses as those of the Issuers and the Guarantors and
furnish to the Collateral Trustee, upon written request, full information as to
its property and liability insurance carriers.  The Collateral Trustee
will be named as an additional insured on all liability insurance policies of
the Issuers and their Restricted Subsidiaries and the Collateral Trustee will be
named as loss payee on all property and casualty insurance policies of each such
Person.

     

    
      	
              Section
      4.20  

            	
              Restriction on
      Activities of CCFC Finance.

            

    

     

    CCFC
Finance will not hold any material assets, become liable for any material
obligations or engage in any significant business activities; provided that CCFC
Finance may be a co-obligor or guarantor with respect to Indebtedness if CCFC is
an obligor on such Indebtedness and the net proceeds of such Indebtedness are
received by CCFC, CCFC Finance or one or more of their Restricted
Subsidiaries.

     

    
      	
              Section
      4.21  

            	
              Designation of
      Restricted and Unrestricted
Subsidiaries.

            

    

     

    The Board
of Directors of CCFC may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a
Default.  If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned
by the Issuers and their Restricted Subsidiaries in the Subsidiary properly
designated will be deemed to be an Investment made as of the time of the
designation and will reduce the amount available for Restricted Payments under
Section 4.07(a)
or Permitted Investments, as determined by the Issuers.  That
designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary.  The Board of Directors of CCFC may
redesignate any Unrestricted Subsidiary to be a Restricted
Subsidiary.

     

    
      	
              Section
      4.22  

            	
              Payments for
      Consents.

            

    

     

    The
Issuers will not, and will not permit any of their Restricted Subsidiaries to,
directly or indirectly, pay or cause to be paid any monetary consideration to or
for the benefit of any Holder for or as an inducement to any consent under or
waiver or amendment of any of the terms or provisions of this Indenture, the
Notes or the guarantees unless such consideration is offered to be paid and is
paid to all Holders that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.

     

    ARTICLE
5

     

    SUCCESSORS

     

    
      	
              Section
      5.01  

            	
              Merger, Consolidation
      or Sale of Assets.

            

    

     

    (a)           The
Issuers shall not, directly or indirectly, (1) consolidate or merge with or
into another Person (whether or not an Issuer is the surviving corporation); or
(2) sell, assign, transfer, convey

     

    

    
      
        
           

        

        
          -69-

          
            

          

        

        
           

        

      

    

    

    or
otherwise dispose of all or substantially all of the properties or assets of the
Issuers and their Restricted Subsidiaries taken as a whole, in one or more
related transactions, to another Person, unless:

     

    (1)           either:

     

    (A)           an
Issuer is the surviving corporation; or

     

    (B)           the
Person formed by or surviving any such consolidation or merger (if other than an
Issuer) or to which such sale, assignment, transfer, conveyance or other
disposition has been made is either (i) a corporation organized or existing
under the laws of the United States, any state of the United States or the
District of Columbia or (ii)  a partnership or limited liability company
organized or existing under the laws of the United States, any state of the
United States or the District of Columbia that has at least one Restricted
Subsidiary that is a corporation organized or existing under the laws of the
United States, any state of the United States or the District of Columbia, which
corporation becomes a co-issuer of the Notes pursuant to a supplemental
indenture duly and validly executed by the Trustee;

     

    (2)           the
Person formed by or surviving any such consolidation or merger (if other than an
Issuer) or the Person to which such sale, assignment, transfer, conveyance or
other disposition has been made assumes all the obligations of the Issuers under
the Notes, this Indenture and the Security Documents pursuant to a supplemental
indenture reasonably satisfactory to the Trustee;

     

    (3)           immediately
after such transaction, no Default or Event of Default exists; and

     

    (4)           the
applicable Issuer or the Person formed by or surviving any such consolidation or
merger (if other than an Issuer) or to which such sale, assignment, transfer,
conveyance or other disposition has been made will, on the date of such
transaction after giving pro
forma effect thereto and to any related financing transactions as if the
same had occurred at the beginning of the applicable four-quarter period, either
(i) have a pro
forma Fixed Charge Coverage Ratio that is at least equal to the actual
Fixed Charge Coverage Ratio of the Issuers as of such date or (ii) be
permitted to incur at least $1.00 of additional Indebtedness pursuant to Section
4.09(a).

     

    (b)           In
addition, the Issuers may not, directly or indirectly, lease all or
substantially all of their properties or assets, in one or more related
transactions, to any other Person.

     

    (c)           Notwithstanding
the foregoing:

     

    (1)           any
Restricted Subsidiary of the Issuers may consolidate with, merge into or
transfer all or part of its properties and assets to any Issuer or any other
Restricted Subsidiary of any Issuer; and

     

    (2)           any
Issuer may merge with an Affiliate solely for the purpose of reincorporating
such Issuer or reforming in another jurisdiction.

     

    

    
      
        
           

        

        
          -70-

          
            

          

        

        
           

        

      

    

    

    
      	
              Section
      5.02  

            	
              Successor Corporation
      Substituted.

            

    

     

    Upon any
consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the assets of either Issuer in
accordance with Section 5.01 hereof,
the successor corporation formed by such consolidation or into or with which
such Issuer is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted for
(so that from and after the date of such consolidation, merger, sale, lease,
conveyance or other disposition, the provisions of this Indenture referring to
such Issuer shall refer instead to the successor corporation and not to such
Issuer), and may exercise every right and power of such Issuer under this
Indenture with the same effect as if such successor Person had been named as an
Issuer herein; provided that the
predecessor Issuer shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale, assignment,
transfer, conveyance or other disposition of all of the Issuers’ assets that
meets the requirements of Section 5.01
hereof.

     

    ARTICLE
6

     

    DEFAULTS
AND REMEDIES

     

    
      	
              Section
      6.01  

            	
              Events of
      Default.

            

    

     

    An “Event of Default”
wherever used herein, means any one of the following events:

     

    (1)           default
for 30 days in the payment when due of interest on the Notes;

     

    (2)           default
in payment when due of the principal of, or premium, if any, on the
Notes;

     

    (3)           failure
by the Issuers or any of their Restricted Subsidiaries to comply with the
provisions of Section
4.10, 4.14 or 5.01 for 30 days
after notice from the Trustee or the holders of at least 25% in aggregate
principal amount of the Notes then outstanding to comply with such
provisions;

     

    (4)           failure
by the Issuers or any of their Restricted Subsidiaries for 60 days after notice
from the Trustee or the holders of at least 25% in aggregate principal amount of
the Notes then outstanding to comply with any of the other agreements in this
Indenture or the Security Documents;

     

    (5)           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 their Restricted Subsidiaries (or the payment of which
is guaranteed by the Issuers or any of their Restricted Subsidiaries) whether
such Indebtedness or guarantee now exists, or is created after the Issue Date,
if that default:

     

    (A)           is
caused by a failure to pay principal of, or interest or premium, if any, on such
Indebtedness after the expiration of the grace period provided in such
Indebtedness on the date of such default (a “Payment Default”);
or

     

    (B)           results
in the acceleration of such Indebtedness prior to its express
maturity,

     

    

    
      
        
           

        

        
          -71-

          
            

          

        

        
           

        

      

    

    

    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;

     

    (6)           failure
by the Issuers or any of their Restricted Subsidiaries to pay final and
non-appealable judgments aggregating in excess of $50.0 million which are not
covered by indemnities or third-party insurance, which judgments are not paid,
discharged, vacated or stayed for a period of 60 days;

     

    (7)           the
repudiation by the Issuers or any of their Restricted Subsidiaries of any of its
obligations under any of the Security Documents or the unenforceability of any
of the Security Documents against the Issuers or any of their Restricted
Subsidiaries for any reason if such unenforceability shall be applicable to
Collateral having an aggregate Fair Market Value of $50.0 million or
more;

     

    (8)           any
Security Document or any Lien purported to be granted thereby on assets having a
Fair Market Value in excess of $50.0 million is held in any judicial proceeding
to be unenforceable or invalid, in whole or in part, or ceases for any reason
within the control of the Issuers or any of their Restricted Subsidiaries (other
than pursuant to a release that is delivered or becomes effective as set forth
in this Indenture) to be fully enforceable and perfected;

     

    (9)           except
as permitted by this Indenture, any guarantee of a Significant Subsidiary shall
be held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any Guarantor that is a
Significant Subsidiary, or any Person acting on behalf of any Guarantor that is
a Significant Subsidiary, shall deny or disaffirm its obligations under its
subsidiary guarantee;

     

    (10)         the
Issuers or any Significant Subsidiary (or any group of Restricted Subsidiaries
which, taken together, would constitute a Significant
Subsidiary):  (A) commences a voluntary insolvency proceeding or gives
notice of intention to make a proposal under any Bankruptcy Law; (B) consents to
the entry of an order for relief against it in an involuntary insolvency
proceeding or consents to its dissolution or winding-up in an insolvency
proceeding; (C) consents to the appointment of a Bankruptcy Custodian of it or
for substantially all of its property; or (D) makes a general assignment for the
benefit of its creditors; or takes any comparable action under any foreign laws
relating to insolvency; and

     

    (11)         a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:  (A) is for relief against any of the Issuers or any
Significant Subsidiary (or any group of Restricted Subsidiaries which, taken
together, would constitute a Significant Subsidiary) in an involuntary
insolvency proceeding;  (B) appoints a Bankruptcy Custodian of any of
the Issuers or any Significant Subsidiary (or any group of Restricted
Subsidiaries which, taken together, would constitute a significant Subsidiary)
or for substantially all of its property; (C) orders the winding up, liquidation
or dissolution of any of the Issuers or any Significant Subsidiary (or any group
of Restricted Subsidiaries which, taken together, would constitute a Significant
Subsidiary); (D) orders the presentation of any plan of reorganization or
similar arrangement of any of the Issuers or any Significant Subsidiary (or any
group of Restricted Subsidiaries which, taken together, would constitute a
Significant Subsidiary); or (E) grants any similar relief under any Bankruptcy
Law or foreign laws; and in each such case the order or decree remains unstayed
and in effect for 60 days; and

     

    

    
      
        
           

        

        
          -72-

          
            

          

        

        
           

        

      

    

    

    (12)         failure
by the Issuers to use commercially reasonable efforts to create and perfect a
first-priority security interest (subject to Permitted Liens) on substantially
all of the Post-Closing Collateral constituting real property within 180 days of
the Issue Date, but only if notice of such failure has been received from or on
behalf of holders of at least 75% in aggregate principal amount of the Notes
then outstanding or from the Trustee on behalf of holders of at least 75% in
aggregate principal amount of the Notes then outstanding.

     

    
      	
              Section
      6.02  

            	
              Acceleration.

            

    

     

    In the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, with respect to the Issuers, any Restricted Subsidiary that is a
Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes will
become due and payable immediately without further action or
notice.  If any other Event of Default occurs and is continuing, the
Trustee or the holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable
immediately.

     

    
      	
              Section
      6.03  

            	
              Other
      Remedies.

            

    

     

    If an
Event of Default occurs and is continuing, the Trustee may (i) pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture and (ii) instruct the Collateral Trustee to exercise any
available remedies under the Security Documents.

     

    The
Trustee may maintain a proceeding even if it does not possess any of the Notes
or does not produce any of them in the proceeding.  A delay or
omission by the Trustee or any Holder of a Note 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.  All
remedies are cumulative to the extent permitted by law.

     

    
      	
              Section
      6.04  

            	
              Waiver of Past
      Defaults.

            

    

     

    Holders
of not less than a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of the
principal of, premium, if any, or interest on, any Note held by a non-consenting
Holder (including in connection with an Asset Sale Offer or a Change of Control
Offer); provided, that the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration.  Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.

     

    
      	
              Section
      6.05  

            	
              Control by
      Majority.

            

    

     

    Holders
of a majority in principal amount of the then total outstanding Notes may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, and, subject to the terms of the Security Documents, the
Collateral Trustee or of exercising any trust or power conferred on the Trustee,
and, subject to the terms of the Security Documents, the Collateral
Trustee.  The Trustee, however, may refuse to follow any direction
that conflicts with law or this Indenture or that the

     

    

    
      
        
           

        

        
          -73-

          
            

          

        

        
           

        

      

    

    

    Trustee
determines is unduly prejudicial to the rights of any other Holder of a Note or
that would involve the Trustee in personal liability.

     

    
      	
              Section
      6.06  

            	
              Limitation on
      Suits.

            

    

     

    Except to
enforce the right to receive payment of principal, premium (if any) or interest
when due, no Holder of a Note may pursue any remedy with respect to this
Indenture or the Notes unless:

     

    (1)           such
Holder has previously given the Trustee notice that an Event of Default is
continuing;

     

    (2)           Holders
of at least 25% in aggregate principal amount of the outstanding Notes have
requested the Trustee to pursue the remedy;

     

    (3)           such
Holders have offered the Trustee security or indemnity satisfactory to it
against any loss, liability or expense;

     

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

     

    (5)           Holders
of a majority in aggregate principal amount of the outstanding Notes have not
given the Trustee a direction inconsistent with such request within such 60-day
period.

     

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

     

    
      	
              Section
      6.07  

            	
              Rights of Holders of
      Notes to Receive Payment.

            

    

     

    Notwithstanding
any other provision of this Indenture, the right of any Holder of a Note to
receive payment of principal, premium, if any, and interest on the Note, on or
after the respective due dates expressed in the Note (including in connection
with an Asset Sale Offer or a Change of Control Offer), 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.

     

    
      	
              Section
      6.08  

            	
              Collection Suit by
      Trustee.

            

    

     

    If an
Event of Default specified in Section 6.01(a)(1) or
(2) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Issuers for the whole
amount of principal of, premium, if any, and interest remaining unpaid on the
Notes and interest on overdue principal and, to the extent lawful, interest and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

     

    
      	
              Section
      6.09  

            	
              Restoration of Rights
      and Remedies.

            

    

     

    If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any deter-

     

    

    
      
        
           

        

        
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    mination
in such proceedings, the Issuers, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding has been instituted.

     

    
      	
              Section
      6.10  

            	
              Rights and Remedies
      Cumulative.

            

    

     

    Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Notes in Section 2.07 hereof,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise.  The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or
remedy.

     

    
      	
              Section
      6.11  

            	
              Delay or Omission Not
      Waiver.

            

    

     

    No delay
or omission of the Trustee or of any Holder of any Note to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence
therein.  Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.

     

    
      	
              Section
      6.12  

            	
              Trustee May File
      Proofs of Claim.

            

    

     

    The
Trustee is authorized to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders of the
Notes allowed in any judicial proceedings relative to the Issuers (or any other
obligor upon the Notes including the Guarantors), its creditors or its property
and shall be entitled and empowered to participate as a member in any official
committee of creditors appointed in such matter and to collect, receive and
distribute any money or other property payable or deliverable on any such claims
or pursuant to the Security Documents and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07
hereof.  To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof
out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of, any
and all distributions, dividends, money, securities and other properties that
the Holders may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or
otherwise.  Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

     

    

    
      
        
           

        

        
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              Section
      6.13  

            	
              Priorities.

            

    

     

    Subject
to the terms of the Security Documents with respect to any proceeds of
Collateral, if the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:

     

    (i)          to
the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof,
including payment of all compensation, expenses and liabilities incurred, and
all advances made, by the Trustee and the costs and expenses of
collection;

     

    (ii)         equally
and ratably to (A) Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
principal, premium, if any, and interest, respectively; and (B) holders of
additional Parity Secured Debt; and

     

    (iii)        to
the Issuers or to such party as a court of competent jurisdiction shall direct
including a Guarantor, if applicable.

     

    The
Trustee may fix a record date and payment date for any payment to Holders of
Notes pursuant to this Section
6.13.

     

    
      	
              Section
      6.14  

            	
              Undertaking for
      Costs.

            

    

     

    In any
suit for the enforcement of any right or remedy under this Indenture or the
Security Documents or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant.  This Section 6.14 does not
apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof,
or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.

     

    
      	
              Section
      6.15  

            	
              Appointment and
      Authorization of Trustee as Collateral
  Trustee.

            

    

     

    (a)           The
Trustee is hereby designated and appointed as the Collateral Trustee of the
Holders under the Security Documents, and is authorized as the Collateral
Trustee for such Holders to execute and enter into each of the Security
Documents and all other instruments relating to the Security Documents and (i)
to take action and exercise such powers and use such discretion as are expressly
required or permitted hereunder and under the Security Documents and all
instruments relating hereto and thereto and (ii) to exercise such powers and
perform such duties as are in each case, expressly delegated to the Trustee as
Collateral Trustee by the terms hereof and thereof together with such other
powers and discretion as are reasonably incidental hereto and
thereto.

     

    (b)           Notwithstanding
any provision to the contrary elsewhere in this Indenture or the Security
Documents, the Trustee shall not have any duties or responsibilities except
those expressly set forth herein or therein or any fiduciary relationship with
any Holder, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Indenture or any Security
Document or otherwise exist against the Trustee.

     

    

    
      
        
           

        

        
          -76-

          
            

          

        

        
           

        

      

    

    

    (c)           The
Trustee may consult with counsel of its selection and the advice or opinion of
such counsel as to matters of law shall be full and complete authorization and
protection from liability in respect of any action taken, omitted or suffered by
it hereunder or under the Security Documents in good faith and in accordance
with the advice or opinion of such counsel.

     

    ARTICLE
7

     

    TRUSTEE

     

    
      	
              Section
      7.01  

            	
              Duties of
      Trustee.

            

    

     

    (a)           If
an Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture and the Security
Documents, and use the same degree of care and skill in its 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:

     

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

     

    (ii)          in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture or the Security
Documents.  However, in the case of any such certificates or opinions
which by any provision hereof or the Security Documents are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture or the Security Documents (but need not confirm
or investigate the accuracy of any calculations or other facts stated
therein).

     

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

     

    (i)           this
paragraph does not limit the effect of paragraph (b) of this Section
7.01;

     

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

     

    (iii)         the
Trustee shall not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section 6.05
hereof.

     

    (d)           Whether
or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section
7.01.

     

    (e)           The
Trustee shall be under no obligation to exercise any of its rights or powers
under this Indenture or the Security Documents at the request or direction of
any of the Holders of the Notes unless the Holders have offered to the Trustee
reasonable indemnity or security against any loss, liability or
expense.

     

    

    
      
        
           

        

        
          -77-

          
            

          

        

        
           

        

      

    

    

    (f)           The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Issuers.  Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.

     

    
      	
              Section
      7.02  

            	
              Rights of
      Trustee.

            

    

     

    (a)           The
Trustee may conclusively rely upon any document believed by it to be genuine and
to have been signed or presented by the proper Person.  The Trustee
need not investigate any fact or matter stated in the document, but the Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Issuers, personally or by agent or attorney
at the sole cost of the Issuers and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.

     

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

     

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

     

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

     

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

     

    (f)           None
of the provisions of this Indenture or the Security Documents shall require the
Trustee to expend or risk its own funds or otherwise to incur any liability,
financial or otherwise, 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
for believing that repayment of such funds or indemnity satisfactory to it
against such risk or liability is not assured to it.

     

    (g)           The
Trustee shall not be deemed to have notice of any Default or Event of Default
(other than a default in the payment of principal or interest pursuant to
Section 4.01 hereof) 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,
and such notice references the Notes and this Indenture.

     

    (h)           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.

     

    (i)           The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and
shall be enforceable by, the Trustee in each of its capacities hereunder
(including, without limitation, as Collateral Trustee, Custodian, Registrar and
Paying Agent), and each agent, custodian and other Person employed to act
hereunder.

     

    

    
      
        
           

        

        
          -78-

          
            

          

        

        
           

        

      

    

    

    (j)           The
Trustee may request that the Issuers deliver a certificate setting forth the
names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture.

     

    (k)           The
Trustee shall have no duty to inquire as to the performance of the Issuers with
respect to the covenants contained in Article 4.

     

    (l)           Any
permissive right or authority granted to the Trustee shall not be construed as a
mandatory duty.

     

    (m)          Each
of the Issuers and Guarantors shall provide prompt written notice to the Trustee
of any change to its respective fiscal year.

     

    
      	
              Section
      7.03  

            	
              Individual Rights of
      Trustee.

            

    

     

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

     

    
      	
              Section
      7.04  

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

     

    
      	
              Section
      7.05  

            	
              Notice of
      Defaults.

            

    

     

    If a
Default occurs and is continuing and notice thereof has been delivered to the
Trustee, the Trustee shall mail to Holders of Notes a notice of the Default
within 90 days after it occurs.  Except in the case of a Default
relating to the payment of principal, premium, if any, or interest on any Note,
the Trustee may withhold from the Holders notice of any continuing Default if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the
Notes.  The Trustee shall not be deemed to know of any Default unless
written notice of any event which is such a Default is received by the Trustee
at the Corporate Trust Office of the Trustee.

     

    
      	
              Section
      7.06  

            	
              Reports by Trustee to
      Holders of the Notes.

            

    

     

    Within 60
days after each May 15, beginning with the May 15 following the date
of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with Section 313(a) of the TIA (but if no event described in
Section 313(a) of the TIA has occurred within the twelve months preceding the
reporting date, no report need be transmitted).  The Trustee also
shall comply with Section 313(b)(2) of the TIA.  The Trustee
shall also transmit by mail all reports as required by Section 313(c) of the
TIA.

     

    

    
      
        
           

        

        
          -79-

          
            

          

        

        
           

        

      

    

    

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

     

    
      	
              Section
      7.07  

            	
              Compensation and
      Indemnity.

            

    

     

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

     

    The
Issuers and each Guarantor, jointly and severally, shall indemnify the Trustee
for, and hold the Trustee harmless against, any and all loss, damage, claims,
liability or expense (including reasonable attorneys’ fees) incurred by it in
connection with the acceptance or administration of this trust and the
performance of its duties hereunder (including the costs and expenses of
enforcing this Indenture and the Security Documents against the Issuers or any
Guarantor (including this Section 7.07) or
defending itself against any claim whether asserted by any Holder, the Issuers
or any Guarantor, or liability in connective with the acceptance, exercise or
performance of any of its powers or duties hereunder).  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 of their obligations hereunder.  The Issuers shall
defend the claim and the Trustee may have separate counsel and the Issuers shall
pay the fees and expenses of such counsel.  The Issuers need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee’s own willful misconduct, negligence
or bad faith.

     

    The
obligations of the Issuers under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture or the earlier
resignation or removal of the Trustee.

     

    To secure
the payment obligations of the Issuers and each Guarantor in this Section 7.07, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes.  Such Lien shall survive the
satisfaction and discharge of this Indenture.

     

    When the
Trustee incurs expenses or renders services after an Event of Default specified
in Section
6.01(a)(10) or (11) hereof occurs,
the expenses and the compensation for the services (including the fees and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.

     

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

     

    
      	
              Section
      7.08  

            	
              Replacement of
      Trustee.

            

    

     

    A
resignation or removal of the Trustee and appointment of a successor Trustee
shall become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section
7.08.  The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the
Issuers.  The Holders of a majority in principal amount of the then
outstanding Notes may

     

    

    
      
        
           

        

        
          -80-

          
            

          

        

        
           

        

      

    

    

    remove
the Trustee by so notifying the Trustee and the Issuers in
writing.  The Issuers may remove the Trustee if:

     

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

     

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

     

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

     

    (d)           the
Trustee becomes incapable of acting.

     

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

     

    If a
successor Trustee does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee (at the Issuers’ expense), the
Issuers or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

     

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

     

    A
successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the 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 shall promptly transfer
all property held by it as Trustee to the successor Trustee; provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section
7.07 hereof.  Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the
Issuers’ obligations under Section 7.07 hereof
shall continue for the benefit of the retiring Trustee.

     

    A
successor Trustee or its Affiliates shall also act as a successor Collateral
Trustee.

     

    
      	
              Section
      7.09  

            	
              Successor Trustee by
      Merger, etc.

            

    

     

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

     

    
      	
              Section
      7.10  

            	
              Eligibility;
      Disqualification.

            

    

     

    There
shall at all times be a Trustee hereunder that is a corporation organized and
doing business under the laws of the United States of America or of any state
thereof that is authorized under such laws to exercise corporate trustee power,
that is subject to supervision or examination by federal or state authorities
and that has a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition.

     

    

    
      
        
           

        

        
          -81-

          
            

          

        

        
           

        

      

    

    

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

     

    
      	
              Section
      7.11  

            	
              Preferential
      Collection of Claims Against
Issuers.

            

    

     

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

     

    
      	
              Section
      7.12  

            	
              Collateral
      Trustee.

            

    

     

    The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and
shall be enforceable by, the Collateral Trustee as if the Collateral Trustee
were named as the Trustee herein and the Security Documents were named as this
Indenture herein.  For the avoidance of doubt, neither the Trustee nor
the Collateral Trustee shall be responsible for the perfection of the Liens
granted pursuant to the Security Documents or for the filing, form, content or
renewal of any financing statements, mortgages or other
instruments.

     

    
      	
              Section
      7.13  

            	
              Co-Trustees; Separate
      Trustee; Collateral Trustee.

            

    

     

    At any
time or times, for the purpose of meeting the Legal Requirements of any
jurisdiction in which any of the Collateral may at the time be located, the
Issuers, the Collateral Trustee and the Trustee shall have power to appoint,
and, upon the written request of (i) the Trustee or the Collateral Trustee
or (ii) the holders of at least 25% of the outstanding principal amount at
maturity of the Notes, the Issuers shall for such purpose join with the Trustee
in the execution, delivery and performance of all instruments and agreements
necessary or proper to appoint, one or more Persons approved with the consent of
the Issuers by the Trustee either to act as co-trustee, jointly with the
Trustee, or to act as separate trustee, co-collateral agent, sub-collateral
agent or separate collateral agent of any such property, in either case with
such powers as may be provided in the instrument of appointment, and to vest in
such Person or Persons in the capacity aforesaid, any property, title, right or
power deemed necessary or desirable, subject to the other provisions of this
Section
7.13.  If an Event of Default has occurred and is continuing,
the Trustee or the Collateral Trustee alone shall have power to make such
appointment.

     

    Should
any written instrument from the Issuers be requested by any co-trustee or
separate trustee or co-collateral trustee, sub-collateral trustee or separate
collateral trustee so appointed for more fully confirming to such co-trustee or
separate trustee such property, title, right or power, any and all such
instruments shall, on request of such co-trustee or separate trustee or separate
collateral trustee, be executed, acknowledged and delivered by the
Issuers.

     

    Any
co-trustee, separate trustee or co-collateral trustee, sub-collateral trustee or
separate collateral trustee shall agree in writing to be and shall be subject to
the provisions of the applicable Security Documents as if it were the Trustee
thereunder (and the Trustee shall continue to be so subject).

     

    Every
co-trustee or separate trustee or co-collateral trustee, sub-collateral trustee
or separate collateral trustee shall, to the extent permitted by law, but to
such extent only, be appointed subject to the following terms,
namely:

     

    (a)           The
Notes shall be authenticated and delivered, and all rights, powers, duties and
obligations hereunder in respect of the custody of securities, cash and other
personal property

     

    

    
      
        
           

        

        
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    held by,
or required to be deposited or pledged with, the Trustee hereunder, shall be
exercised solely, by the Trustee.

     

    (b)           The
rights, powers, duties and obligations hereby conferred or imposed upon the
Trustee in respect of any property covered by such appointment shall be
conferred or imposed upon and exercised or performed by the Trustee or by the
Trustee and such co-trustee or separate trustee jointly, or by the Trustee and
such co-collateral trustee, sub-collateral trustee or separate collateral
trustee jointly as shall be provided in the instrument appointing such
co-trustee, separate trustee or separate collateral trustee, except to the
extent that under any law of any jurisdiction in which any particular act is to
be performed, the Trustee shall be incompetent or unqualified to perform such
act, in which event such rights, powers, duties and obligations shall be
exercised and performed by such co-trustee, separate trustee or co-collateral
trustee, sub-collateral trustee or separate collateral trustee.

     

    (c)           The
Trustee at any time, by an instrument in writing executed by it, with the
concurrence of the Issuers evidenced by a Board Resolution, may accept the
resignation of or remove any co-trustee, separate trustee or co-collateral
trustee, sub-collateral trustee or separate collateral trustee appointed under
this Section
7.13, and, in case an Event of Default has occurred and is continuing,
the Trustee shall have power to accept the resignation of, or remove, any such
co-trustee, separate trustee or co-collateral trustee, sub-collateral trustee or
separate collateral trustee without the concurrence of the
Issuers.  Upon the written request of the Trustee, the Issuers shall
join with the Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such resignation or
removal.  A successor to any co-trustee, separate trustee or
co-collateral trustee, sub-collateral trustee or separate collateral trustee so
resigned or removed may be appointed in the manner provided in this Section
7.13.

     

    (d)           No
co-trustee, separate trustee or co-collateral trustee, sub-collateral trustee or
separate collateral trustee hereunder shall be liable by reason of any act or
omission of the Trustee, or any other such trustee, co-trustee, separate
trustee, co-collateral trustee, sub-collateral trustee or separate collateral
trustee hereunder.

     

    (e)           The
Trustee shall not be liable by reason of any act or omission of any co-trustee,
separate trustee, co-collateral trustee, sub-collateral trustee or separate
collateral trustee.

     

    (f)           Any
act of holders delivered to the Trustee shall be deemed to have been delivered
to each such co-trustee, separate trustee or co-collateral trustee,
sub-collateral trustee or separate collateral trustee, as the case may
be.

     

    ARTICLE
8

     

    LEGAL
DEFEASANCE AND COVENANT DEFEASANCE

     

    
      	
              Section
      8.01  

            	
              Option to Effect Legal
      Defeasance or Covenant
Defeasance.

            

    

     

    The
Issuers may, at their option and at any time, elect to have either Section 8.02 or 8.03 hereof applied
to all outstanding Notes upon compliance with the conditions set forth below in
this Article
8.

     

    

    
      
        
           

        

        
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              Section
      8.02  

            	
              Legal Defeasance and
      Discharge.

            

    

     

    Upon the
Issuers’ exercise under Section 8.01 hereof
of the option applicable to this Section 8.02, the
Issuers and each Guarantor shall, subject to the satisfaction of the conditions
set forth in Section
8.04 hereof, be deemed to have been discharged from their obligations
with respect to this Indenture and all outstanding Notes and Guarantees on the
date the conditions set forth below are satisfied (“Legal
Defeasance”).  For this purpose, Legal Defeasance means that
the Issuers shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
“outstanding” only for the purposes of Section 8.05 hereof
and the other Sections of this Indenture referred to in (a) and (b) below, cured
all then existing Events of Default and to have satisfied all its other
obligations under such Notes and this Indenture including that of each Guarantor
(and the Trustee, on demand of and at the expense of the Issuers, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged
hereunder:

     

    (a)           the
rights of holders of outstanding Notes to receive payments in respect of the
principal of, or interest or premium on the Notes when such payments are due
from the trust referred to in Section 8.04
hereof;

     

    (b)           the
Issuers’ obligations with respect to the Notes concerning issuing temporary
Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an
office or agency for payment and money for security payments held in
trust;

     

    (c)           the
rights, powers, trusts, duties and immunities of the Trustee, and the Issuers’
and the Guarantors’ obligations in connection therewith; and

     

    (d)           this
Section 8.02.

     

    Subject
to compliance with this Article 8, the
Issuers may exercise their option under this Section 8.02
notwithstanding the prior exercise of their option under Section 8.03
hereof.

     

    
      	
              Section
      8.03  

            	
              Covenant
      Defeasance.

            

    

     

    Upon the
Issuers’ exercise under Section 8.01 hereof
of the option applicable to this Section 8.03, the
Issuers and each Restricted Subsidiary shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof,
be released from their obligations under the covenants contained in Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20 and 4.21 hereof and
clause (4) of Sections
5.01(a) hereof with respect to the outstanding Notes on and after the
date the conditions set forth in Section 8.04 hereof
are satisfied (“Covenant
Defeasance”), and the Notes shall thereafter be deemed not “outstanding”
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed “outstanding” for all other purposes hereunder
(it being understood that such Notes shall not be deemed outstanding for
accounting purposes).  For this purpose, Covenant Defeasance means
that, with respect to the outstanding Notes, 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 any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section
6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby.  In addition,
upon the Issuers’ exercise under Section 8.01 hereof
of the option applicable to this Section 8.03 hereof,
subject to

     

    

    
      
        
           

        

        
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    the
satisfaction of the conditions set forth in Section 8.04 hereof,
Sections
6.01(3), 6.01(4), 6.01(5) 6.01(6), 6.01(7), 6.01(8), 6.01(9), 6.01(10), and 6.01(11) hereof shall
not constitute Events of Default.

     

    
      	
              Section
      8.04  

            	
              Conditions to Legal or
      Covenant Defeasance.

            

    

     

    The
following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the
outstanding Notes:

     

    (1)           the
Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders, cash in U.S. dollars, non-callable Government Securities, or a
combination of cash in U.S. dollars and non-callable Government Securities, in
amounts as will be sufficient, in the opinion of a nationally recognized
investment bank, appraisal firm or firm of independent public accountants to pay
the principal of, or interest and premium on the outstanding Notes on the Stated
Maturity or on the applicable redemption date, as the case may be, and the
Issuers must specify whether the Notes are being defeased to maturity or to a
particular redemption date;

     

    (2)           in
the case of Legal Defeasance, the Issuers has delivered to the Trustee an
Opinion of Counsel reasonably acceptable to the Trustee confirming that
(A) the Issuers have received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the Issue Date, 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 will confirm that, the
holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred. Notwithstanding the foregoing, the Opinion of Counsel required by the
immediately preceding sentence with respect to a Legal Defeasance need not be
delivered if all Notes not theretofore delivered to the Trustee for cancellation
(x) have become due and payable or (y) will become due and payable at
their Stated Maturity within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Issuers;

     

    (3)           in
the case of Covenant Defeasance, the Issuers have delivered to the Trustee an
Opinion of Counsel reasonably acceptable to the Trustee confirming that the
holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not
occurred;

     

    (4)           no
Default or Event of Default has occurred and is 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);

     

    (5)           such
Legal Defeasance or Covenant Defeasance will not result in a breach or violation
of, or constitute a default under any material agreement or instrument (other
than this Indenture) to which the Issuers or any of their Subsidiaries is a
party or by which the Issuers or any of their Subsidiaries is
bound;

     

    (6)           the
Issuers must deliver to the Trustee an Officer’s Certificate stating that the
deposit was not made by the Issuers with the intent of preferring the Holders
over the other

    

    
      
        
           

        

        
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    creditors
of the Issuers with the intent of defeating, hindering, delaying or defrauding
creditors of the Issuers; and

     

    (7)           the
Issuers must deliver to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.

     

    
      	
              Section
      8.05  

            	
              Deposited Money and
      Government Securities to Be Held in Trust; Other Miscellaneous
      Provisions.

            

    

     

    Subject
to Section 8.06
hereof, all money and Government Securities (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the
“Trustee”)
pursuant to Section
8.04 hereof in respect of the outstanding Notes shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Issuers or a Guarantor acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium and interest, but such money need not
be segregated from other funds except to the extent required by
law.

     

    The
Issuers shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the cash or Government Securities deposited
pursuant to Section
8.04 hereof or the principal and interest received in respect thereof
other than any such tax, fee or other charge which by law is for the account of
the Holders of the outstanding Notes.

     

    Anything
in this Article
8 to the contrary notwithstanding, the Trustee shall deliver or pay to
the Issuers from time to time upon the request of the Issuers any money or
Government Securities held by it as provided in Section 8.04 hereof
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(a)
hereof), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.

     

    
      	
              Section
      8.06  

            	
              Repayment to
      Issuers.

            

    

     

    Any money
deposited with the Trustee or any Paying Agent, or then held by the Issuers, in
trust for the payment of the principal of, premium or interest on any Note and
remaining unclaimed for two years after such principal, and premium or interest
has become due and payable shall be paid to the Issuers on their request or (if
then held by the Issuers) shall be discharged from such trust; and the Holder of
such Note shall thereafter look only to the Issuers for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Issuers as trustee thereof, shall thereupon
cease.

     

    
      	
              Section
      8.07  

            	
              Reinstatement.

            

    

     

    If the
Trustee or Paying Agent is unable to apply any United States dollars or
Government Securities in accordance with Section 8.02 or 8.03 hereof, as the
case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Issuers’ obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the
case may be; provided that, if the
Issuers make any payment of principal of, premium or

     

    

    
      
        
           

        

        
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    interest
on any Note following the reinstatement of their obligations, the Issuers shall
be subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.

     

    ARTICLE
9

     

    AMENDMENT,
SUPPLEMENT AND WAIVER

     

    
      	
              Section
      9.01  

            	
              Without Consent of
      Holders of Notes.

            

    

     

    Notwithstanding
Section 9.02
hereof, the Issuers, the Guarantors and the Trustee may amend or supplement this
Indenture, the Notes, the Guarantees or the Security Documents without the
consent of any Holder:

     

    (1)           to
cure any ambiguity, defect or inconsistency;

     

    (2)           to
provide for uncertificated Notes in addition to or in place of certificated
Notes;

     

    (3)           to
provide for the assumption of the Issuers’ obligations to Holders in the case of
a merger or consolidation or sale of all or substantially all of the Issuers’
assets;

     

    (4)           to
make any change that would provide any additional rights or benefits to the
Holders, or that does not adversely affect the legal rights under this Indenture
of any such Holder;

     

    (5)           to
evidence and provide for the acceptance and appointment under any indenture of a
successor Trustee pursuant to the requirements thereof;

     

    (6)           to
provide for the issuance of Additional Notes in accordance with the limitations
set forth in this Indenture as of the date hereof;

     

    (7)           to
allow any Guarantor to execute a supplemental indenture and/or a subsidiary
guarantee with respect to the Notes;

     

    (8)           to
comply with requirements of the Commission in order to effect or maintain the
qualification of this Indenture under the TIA;

     

    (9)           to
make, complete or confirm any grant of Collateral permitted or required by the
Security Documents, the Collateral Trust Agreement or this Indenture or any
release of Collateral that becomes effective as set forth in the Security
Documents, the Collateral Trust Agreement or this Indenture;

     

    (10)         to
conform the text of this Indenture, the Notes, the guarantees or the Security
Documents to any provision of a description of such securities or security
interest appearing in a prospectus or prospectus supplement or an offering
memorandum or offering circular pursuant to which such securities were offered
or security interest created to the extent that such provision was intended to
be a verbatim recitation of a provision of this Indenture, the Notes, the
guarantees or the Security Documents;

     

    (11)         to
secure any additional Parity Secured Obligations; and

     

    

    
      
        
           

        

        
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    (12)         to
reflect any waiver or termination of any right arising under Section 11.01 hereof
that otherwise would be enforceable by any holder of any Series of Parity
Secured Debt other than the Notes, if such waiver or termination is set forth or
provided in this indenture or agreement governing or giving rise to such Series
of Parity Secured Debt, but no waiver or amendment pursuant to this Section
9.01(12) shall adversely affect the rights of any
Holder.

     

    Upon the
request of the Issuers accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental indenture, and
upon receipt by the Trustee of the documents described in Section 7.02 hereof,
the Trustee shall join with the Issuers and each Guarantor in the execution of
any amended or supplemental indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to enter
into such amended or supplemental indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.  Notwithstanding the
foregoing, no Opinion of Counsel shall be required in connection with the
addition of a Guarantor under this Indenture upon execution and delivery by such
Guarantor and the Trustee of a supplemental indenture to this Indenture, the
form of which is attached as Exhibit D
hereto, and delivery of an Officer’s Certificate.

     

    
      	
              Section
      9.02  

            	
              With Consent of
      Holders of Notes.

            

    

     

    (a)           Except
as provided below in this Section 9.02 (or, in
the case of the Security Documents, as is expressly set forth in the Security
Documents), and subject to Section 9.02(b), the
Issuers and the Trustee may amend or supplement this Indenture, the Notes, the
Guarantees and the Security Documents with the consent of the Holders of at
least a majority in principal amount of the Notes (including Additional Notes,
if any) then outstanding voting as a single class (including, without
limitation, consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes), and, subject to Sections 6.04 and
6.07 hereof,
any existing Default or Event of Default (other than a Default or Event of
Default in the payment of the principal of, premium and or interest on the
Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture, the Guarantees,
the Notes or Security Documents may be waived with the consent of the Holders of
a majority in principal amount of the then outstanding Notes (including
Additional Notes, if any) voting as a single class (including consents obtained
in connection with a tender offer or exchange offer for, or purchase of, the
Notes).  Sections 2.08 and
2.09 hereof
shall determine which Notes are considered to be “outstanding” for the purposes
of this Section
9.02.

     

    Upon the
request of the Issuers accompanied by a resolution of their Board of Directors
authorizing the execution of any such amended or supplemental indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of
the documents described in Section 7.02
hereof, the Trustee shall join with the Issuers in the execution of such amended
or supplemental indenture unless such amended or supplemental indenture directly
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental indenture.

     

    It shall
not be necessary for the consent of the Holders of Notes under this Section 9.02 to
approve the particular form of any proposed amendment or waiver, but it shall be
sufficient if such consent approves the substance thereof.

     

    After an
amendment, supplement or waiver under this Section 9.02 becomes
effective, the Issuers shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver.  Any
failure of the Issuers to mail such notice, or any defect therein, shall
not,

    

    
      
        
           

        

        
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    however,
in any way impair or affect the validity of any such amended or supplemental
indenture or waiver.

     

    (b)           Without
the consent of each affected Holder of Notes, an amendment or waiver under this
Section 9.02 may
not (with respect to any Notes held by a non-consenting Holder):

     

    (1)           reduce
the principal amount of Notes whose holders must consent to an amendment,
supplement or waiver;

     

    (2)           reduce
the principal of or change the fixed maturity of any Note or alter the
provisions with respect to the redemption of the Notes (other than pursuant to
Section 4.10 or 4.14 hereof);

     

    (3)           reduce
the rate of or change the time for payment of interest on any Note;

     

    (4)           waive
a Default or Event of Default in the payment of principal of, or interest or
premium on the Notes (except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount of the Notes and a
waiver of the payment default that resulted from such
acceleration);

     

    (5)           make
any Note payable in money other than that stated in the Notes;

     

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

     

    (7)           waive
a redemption payment with respect to any note (other than a payment required by
Section 4.10 or
Section
4.14);

     

    (8)           make
any change to the ranking of the Notes; or

     

    (9)           make
any change in the preceding amendment and waiver provisions.

     

    (c)           No
amendment or supplement to the provisions of the Section 11.01 will:
 

     

    (1)           be
effective unless set forth in a writing signed by the Trustee with the consent
of the Holders of at least a majority in principal amount of each affected
Series of Parity Secured Debt then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, any Series of Parity Secured Debt), voting as a separate class; or
 

     

    (2)           be
effective without the written consent of the Issuers.

     

    (d)           Any
such amendment or supplement that imposes any obligation upon the Trustee or
Collateral Trustee or adversely affect the rights of the Trustee or Collateral
Trustee will become effective only with the consent of the Trustee or Collateral
Trustee, as applicable.

     

    
      	
              Section
      9.03  

            	
              Compliance with Trust
      Indenture Act.

            

    

     

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

     

    

    
      
        
           

        

        
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              Section
      9.04  

            	
              Revocation and Effect
      of Consents.

            

    

     

    Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
of a Note is a continuing consent by the Holder of a Note and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note, even if notation of the consent is not made on any
Note.  However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective.  An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.

     

    The
Issuers may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement, or
waiver.  If a record date is fixed, then, notwithstanding the
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only such Persons, shall be entitled to
consent to such amendment, supplement, or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date.  No such consent shall be valid or effective for more
than 120 days after such record date unless the consent of the requisite number
of Holders has been obtained.

     

    
      	
              Section
      9.05  

            	
              Notation on or
      Exchange of Notes.

            

    

     

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

     

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

     

    
      	
              Section
      9.06  

            	
              Trustee to Sign
      Amendments, etc.

            

    

     

    The
Trustee shall sign any amendment, supplement or waiver authorized pursuant to
this Article 9
if the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee.  The Issuers may not sign an
amendment, supplement or waiver until each Board of Directors approves
it.  In executing any amendment, supplement or waiver, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon, in addition to the documents required
by Section
14.04 hereof, an Officer’s Certificate and an Opinion of Counsel stating
that the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture and that such amendment, supplement or waiver is the
legal, valid and binding obligation of the Issuers and any Guarantor party
thereto, enforceable against them in accordance with its terms, subject to
customary exceptions, and complies with the provisions hereof (including Section
9.03).  Notwithstanding the foregoing, no Opinion of Counsel
will be required for the Trustee to execute any amendment or supplement adding a
new Guarantor under this Indenture.

     

    

    
      
        
           

        

        
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    ARTICLE
10

     

    SECURITY

     

    
      	
              Section
      10.01  

            	
              Security.

            

    

     

    The
punctual payment of (i) the principal of, premium, if any, and interest on the
Notes and all other Parity Secured Obligations, when due, whether on an interest
payment date, at maturity, by acceleration, repurchase, redemption or otherwise,
(ii) interest on overdue principal of, premium, if any, and interest on, the
Notes and all other Parity Secured Obligations, (iii) the performance of all
other obligations of the Company to the Holders or the Trustee under this
Indenture and the Notes, according to the terms hereunder or thereunder, and
(iv) the performance of all other obligations of the Company under the Secured
Debt Documents are secured Equally and Ratably by Liens upon the Issuers’ rights
in the Collateral.  The payment of the Guarantees and all other Parity
Secured Obligations of such Guarantor are secured Equally and Ratably by Liens
upon such Guarantor’s rights in the Collateral.

     

    
      	
              Section
      10.02  

            	
              Further
      Assurances.

            

    

     

    (a)           The
Issuers and each Guarantor shall do or cause to be done all acts and things
which may be required (including filing of any amendments or continuations of
UCC-1 financing statements), or which the Collateral Trustee from time to time
may reasonably request, to assure and confirm that the Collateral Trustee holds
Equally and Ratably, for its benefit and the benefit of the Trustee and the
Holders of the Notes and holders of the other Parity Secured Debt duly created,
enforceable and perfected Liens upon all Collateral, whether consisting of real,
personal (including after-acquired personal property) or mixed property subject
to no Liens except Permitted Liens.

     

    (b)           If
the Issuers or any of the Guarantors at any time owns or acquires any Collateral
that is not subject to a valid, enforceable perfected Lien in favor of the
Collateral Trustee as security Equally and Ratably for all of the Parity Secured
Obligations, then the Issuers shall concurrently:

     

    (i)           execute
and deliver to the Collateral Trustee a security document upon substantially the
same terms as the Security Documents delivered in connection with the issuance
of the Notes or other terms reasonably satisfactory to the Issuers or such
Guarantor and the Collateral Trustee, granting a Lien upon such Collateral to
the Collateral Trustee for its benefit and the benefit of the Trustee and
holders of Parity Secured Obligations, Equally and Ratably;

     

    (ii)          cause
the Lien granted in such security document to be duly perfected in any manner
permitted by law and cause each other Lien that secures Indebtedness upon such
property to be released, unless it is a Permitted Lien; and

     

    (iii)         deliver
to the Trustee and the Collateral Trustee an Opinion of Counsel relating to such
Security Document or the Lien granted therein.

     

    (c)           Upon
the written request of the Collateral Trustee at any time and from time to time,
the Issuers and each Guarantor shall promptly execute, acknowledge and deliver
such Security Documents, instruments, certificates, notices and other documents
and take such other actions as shall be required or which the Collateral Trustee
may reasonably request to grant, perfect or maintain the priority of (subject to
Permitted Liens) the Liens and benefits intended to be conferred as contemplated
by the Secured Debt Documents and the Security Documents for the benefit of the
holders of the Parity Secured Obligations.

     

    

    
      
        
           

        

        
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              Section
      10.03  

            	
              Collateral
      Trustee.

            

    

     

    (a)           The
Issuers have appointed Wilmington Trust Company or one of its affiliates to
serve as the Collateral Trustee its benefit and the benefit of the Trustee and
holders of:

     

    (i)        the
Notes; and

     

    (ii)       any
and all future Parity Secured Debt.

     

    (b)           The
Collateral Trustee (directly or through co-trustees, agents or sub-agents)
holds, and is entitled to enforce, all Liens on the Collateral.

     

    (c)           Except
as provided in the Collateral Trust Agreement or the Security Documents or as
directed by the Required Secured Debtholders, the Collateral Trustee is not
obligated:

     

    (i)        to
act upon directions purported to be delivered to it by any other
Person;

     

    (ii)       to
foreclose upon or otherwise enforce any Lien; or

     

    (iii)      to
take any other action whatsoever with regard to any or all of the Security
Documents, the Liens created thereby or the Collateral.

     

    
      	
              Section
      10.04  

            	
              Security Documents and
      Guarantee.

            

    

     

    (a)           Each
Holder of the Notes, by acceptance of the Notes, hereby authorizes the Trustee
and the Collateral Trustee, as applicable, on behalf of and for the benefit of
the Holders, to enter into and to be the agent for and representative of the
Holders with respect to the Guarantees, the Collateral and the Security
Documents.

     

    (b)           Anything
contained in any of the Note Documents to the contrary notwithstanding, each
Holder hereby agrees that no Holder or the Trustee shall have any right
individually to realize upon any of the Collateral, it being understood and
agreed that all powers, rights and remedies of the Trustee hereunder may be
exercised solely by the Trustee in accordance with the terms hereof and all
powers, rights and remedies in respect of the Collateral under the Security
Documents may be exercised solely by the Collateral Trustee.

     

    
      	
              Section
      10.05  

            	
              Release of Security
      Interests.

            

    

     

    (a)           The
Collateral will be released from the Collateral Trustee’s Liens in accordance
with Section
4.1 of the Collateral Trust Agreement.

     

    (b)           The
Collateral Trustee’s Liens upon Collateral will no longer secure the Note
Obligations with respect to Notes and the right of the holders of Note
Obligations to the benefits and proceeds of the Collateral Trustee’s Liens on
Collateral will terminate and be discharged at the Company’s written
request:

     

    (i)        upon
satisfaction and discharge of this Indenture pursuant to Article 13
hereof;

     

    (ii)       upon
Legal Defeasance or Covenant Defeasance; or

     

    

    
      
        
           

        

        
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    (iii)      upon
payment in full in cash of the Notes and all other Note Obligations that are
outstanding, due and payable at the time the Notes are paid in full in
cash.

     

    (c)           The
Issuers shall otherwise comply with the provisions of TIA Section
314(b).

     

    (d)           To
the extent applicable, the Issuers will cause TIA § 313(b), relating to
reports, and TIA § 314(d), relating to the release of property or
securities or relating to the substitution therefor of any property or
securities to be subjected to the Lien of the Security Documents, to be complied
with. Any certificate or opinion required by TIA § 314(d) may be made
by an officer of CCFC except in cases where TIA § 314(d) requires that such
certificate or opinion be made by an independent Person, which Person will be an
independent engineer, appraiser or other expert selected or reasonably
satisfactory to the Trustee. Notwithstanding anything to the contrary in this
paragraph, the Issuers will not be required to comply with all or any portion of
TIA § 314(d) (1) with respect to certain ordinary course of business
releases of Collateral as described in this Indenture and (2) if the
Issuers determine, in good faith based on advice of counsel, that under the
terms of TIA § 314(d) and/or any interpretation or guidance as to the
meaning thereof of the Commission and its staff, including “no action” letters
or exemptive orders, all or any portion of TIA § 314(d) is inapplicable to
one or a series of released Collateral.

     

    (e)           To
the extent applicable, the Issuers shall furnish to the Trustee, prior to each
proposed release of Collateral pursuant to the Security Documents:

     

    (i)        all
documents required by TIA § 314(d); and

     

    (ii)       an
Opinion of Counsel to the effect that such accompanying documents constitute all
documents required by TIA § 314(d).

     

    (f)           
If any Collateral is released in accordance with this Indenture or any Security
Document and if the Issuers have delivered the certificates and documents
required by the Security Documents and this Section 10.05, the Trustee, upon
receipt of such certificates and Opinion of Counsel, shall notify the Collateral
Trustee of the receipt of such documents; provided, however, that if the Trustee
is also the Collateral Trustee, the requirement that the Trustee deliver a
notice to the Collateral Trustee shall not be applicable.

     

    (g)           Notwithstanding
anything herein to the contrary, so long as no Event of Default shall have
occurred and be continuing:

     

    (i)         the
Issuers may, without any prior release or consent by the Trustee, conduct the
following ordinary course activities in respect of the Collateral subject to the
lien of the Security Documents which do not individually or in the aggregate
adversely affect the value of such Collateral and do not violate this
Indenture:

     

     (A)            cash
payments (including for the scheduled repayment of Indebtedness) in the ordinary
course of business;

     

     (B)            sales
or other dispositions of inventory in the ordinary course of
business;

     

     (C)            collections,
sales or other dispositions of accounts receivable in the ordinary course of
business; and

     

    

    
      
        
           

        

        
          -93-

          
            

          

        

        
           

        

      

    

    

     (D)            sales
or other dispositions in the ordinary course of business of any property the use
of which is no longer necessary or desirable in the proper conduct of the
business of the Company and its Subsidiaries and is not material to the conduct
of the business of the Company and its Subsidiaries; and

     

    (ii)       the
fair value of any Collateral released in accordance with clause (i) of this
Section 10.05(g) need not be considered in determining whether the aggregate
fair value of Collateral released in any calendar year meets or exceeds the 10%
threshold specified in TIA Section 314(d);

     

    provided,
however, that the Company’s right to rely on this Section 10.05(g) will be
conditioned upon the Company’s delivering to the Trustee, within 30 calendar
days following the end of each six-month period beginning on January 1 and July
1 of any year during which any such release occurred, an Officer’s Certificate
to the effect that all releases during such six-month period in respect of which
the Company did not comply with TIA Section 314(d) in reliance on this Section
10.05(g) were made in the ordinary course of business.

     

    ARTICLE
11

     

    COLLATERAL
SHARING

     

    
      	
              Section
      11.01  

            	
              Equal and Ratable Lien
      Sharing by Holders of Notes and Holders of Other Parity Secured
      Debt.

            

    

     

    (a)           Notwithstanding
(1) anything to the contrary contained in the Secured Debt Documents, (2) the
time of incurrence of any Series of Parity Secured Debt, (3) the order or method
of attachment or perfection of any Liens securing any Series of Parity Secured
Debt, (4) the time or order of filing or recording of financing statements,
mortgages or other documents filed or recorded to perfect any Lien upon any
Collateral, (5) the time of taking possession or control over any Collateral or
(6) the rules for determining priority under any law governing relative
priorities of Liens:

     

    (i)           all
Liens at any time granted by the Issuers or any of their respective Subsidiaries
in the Collateral to secure any of the Parity Secured Debt shall secure, Equally
and Ratably, all liabilities of the Issuers or such Subsidiary under or in
respect of the Parity Secured Debt and other Parity Secured Obligations;
and

     

    (ii)          all
proceeds of all Liens at any time granted by the Issuers or any of their
Subsidiaries in the Collateral to secure any of the Parity Secured Debt shall be
allocated and distributed Equally and Ratably on account of all liabilities of
the Issuers or such Subsidiary under or in respect of the Parity Secured Debt
and other Parity Secured Obligations.

     

    (b)           The
provisions of Section 11.01(a) hereof are intended for the benefit of, and will
be enforceable as a third party beneficiary by, each present and future holder
of Secured Obligations and each present and future Secured Debt
Representative.

     

    
      	
              Section
      11.02  

            	
              Enforcement of
      Security Interests.

            

    

     

    The
enforcement of the Collateral Trustee’s Liens in the Collateral shall be
governed by the Security Documents.

     

    

    
      
        
           

        

        
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              Section
      11.03  

            	
              Amendment and
      Supplement.

            

    

     

    Any
amendment or supplement to the provisions of the Security Documents will be
effective only in accordance with the provisions of Section 7.1 of the
Collateral Trust Agreement.

     

    ARTICLE
12

     

    GUARANTEES

     

    
      	
              Section
      12.01  

            	
              Guarantee.

            

    

     

    Subject
to this Article
12, each Guarantor hereby, jointly and severally, unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes or the obligations of the
Issuers hereunder or thereunder, that: (a) the principal of, interest, premium
on the Notes shall be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of
and interest on the Notes, if any, if lawful, and all other obligations of the
Issuers to the Holders or the Trustee hereunder or thereunder shall be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any Notes or
any of such other obligations, that same shall be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise.  Failing payment
when due of any amount so guaranteed or any performance so guaranteed for
whatever reason, each Guarantor shall be jointly and severally obligated to pay
the same immediately.  Each Guarantor agrees that this is a guarantee
of payment and not a guarantee of collection.

     

    Each
Guarantor hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against either Issuer, any action to enforce the same
or any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor.  Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of either Issuer, any right to require a
proceeding first against the Issuers, protest, notice and all demands whatsoever
and covenants that this Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and this
Indenture.

     

    Each
Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing
any rights under this Section
12.01.

     

    If any
Holder or the Trustee is required by any court or otherwise to return to the
Issuers, a Guarantor or any custodian, trustee, liquidator or other similar
official acting in relation to either the Issuers or a Guarantor, any amount
paid either to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and
effect.

     

    Each
Guarantor further agrees that, as between such Guarantor, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for
the purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article
6

     

    

    
      
        
           

        

        
          -95-

          
            

          

        

        
           

        

      

    

    

    hereof,
such obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of this Guarantee.  Each
Guarantor shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Guarantees.

     

    Each
Guarantee shall remain in full force and effect and continue to be effective
should any petition be filed by or against either Issuer for liquidation,
reorganization, should such Issuer become insolvent or make an assignment for
the benefit of creditors or should a receiver or trustee be appointed for all or
any significant part of the Issuers’ assets, and shall, to the fullest extent
permitted by law, continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Notes are, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee on the Notes or Guarantees, whether as a “voidable preference,”
“fraudulent transfer” or otherwise, all as though such payment or performance
had not been made.  In the event that any payment or any part thereof,
is rescinded, reduced, restored or returned, the Notes shall, to the fullest
extent permitted by law, be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

     

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

     

    Each
payment to be made by a Guarantor in respect of its Guarantee shall be made
without set-off, counterclaim, reduction or diminution of any kind or
nature.

     

    
      	
              Section
      12.02  

            	
              Limitation on
      Guarantor Liability.

            

    

     

    Each
Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it
is the intention of all such parties that the Guarantee of such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any
Guarantee.  To effectuate the foregoing intention, the Trustee, the
Holders and each Guarantor hereby irrevocably agree that the obligations of each
Guarantor shall be limited to the maximum amount as will, after giving effect to
such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 12, result in
the obligations of such Guarantor under its Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under applicable
law.  Each Guarantor that makes a payment under its Guarantee shall be
entitled upon payment in full of all guaranteed obligations under this Indenture
to a contribution from each other Guarantor in an amount equal to such other
Guarantor’s pro rata
portion of such payment based on the respective net assets of all the Guarantors
at the time of such payment determined in accordance with GAAP.

     

    
      	
              Section
      12.03  

            	
              Execution and
      Delivery.

            

    

     

    To
evidence its Guarantee set forth in Section 12.01 hereof,
each Guarantor hereby agrees that this Indenture (or a supplemental indenture,
as the case may be) shall be executed on behalf of such Guarantor by its
President, its Chief Financial Officer, its Corporate Secretary and Chief Legal
Officer or one of its Vice Presidents.

     

    

    
      
        
           

        

        
          -96-

          
            

          

        

        
           

        

      

    

    

    Each
Guarantor hereby agrees that its Guarantee set forth in Section 12.01 hereof
shall remain in full force and effect notwithstanding the absence of the
endorsement of any notation of such Guarantee on the Notes.

     

    If an
Officer whose signature is on this Indenture (or a supplemental indenture, as
the case may be) no longer holds that office at the time the Trustee
authenticates the Note, the Guarantee shall be valid nevertheless.

     

    The
delivery of any Note by the Trustee, after the authentication thereof hereunder,
shall constitute due delivery of the Guarantee set forth in this Indenture on
behalf of each Guarantor.

     

    If
required by Section
4.19 hereof, the Issuers shall cause any newly created or acquired
Restricted Subsidiary to comply with the provisions of Section 4.19 hereof
and this Article
12, to the extent applicable.

     

    
      	
              Section
      12.04  

            	
              Subrogation.

            

    

     

    Each
Guarantor shall be subrogated to all rights of Holders of Notes against the
Issuers in respect of any amounts paid by any Guarantor pursuant to the
provisions of Section
12.01 hereof; provided that, if an
Event of Default has occurred and is continuing, no Guarantor shall be entitled
to enforce or receive any payments arising out of, or based upon, such right of
subrogation until all amounts then due and payable by the Issuers under this
Indenture or the Notes shall have been paid in full.

     

    
      	
              Section
      12.05  

            	
              Benefits
      Acknowledged.

            

    

     

    Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by this Indenture and that the guarantee
and waivers made by it pursuant to its Guarantee are knowingly made in
contemplation of such benefits.

     

    
      	
              Section
      12.06  

            	
              Release of
      Guarantees.

            

    

     

    A
Guarantee (including any Liens in support thereof) by a Guarantor shall be
automatically and unconditionally released and discharged, and no further action
by such Guarantor, the Issuers or the Trustee is required for the release of
such Guarantor’s Guarantee:

     

     

    (1)           in
connection with any sale or other disposition of all or substantially all of the
assets or any sale or other disposition of all of the Capital Stock of that
Guarantor (including by way of merger or consolidation), directly or indirectly,
to a Person that is not (either before or after giving effect to such
transaction) CCFC or a Restricted Subsidiary of CCFC, if the sale or other
disposition does not violate Section 4.10;

     

    (2)           in
connection with the merger or consolidation of that Guarantor with CCFC or any
other Guarantor;

     

    (3)           if
the Issuers designate any Restricted Subsidiary that is a Guarantor to be an
Unrestricted Subsidiary in accordance with the applicable provisions of this
Indenture;

     

    (4)           upon
a liquidation or dissolution of a Guarantor so long as no Default or Event of
Default occurs as a result thereof;

     

    

    
      
        
           

        

        
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    (5)           at
such time such Guarantor is no longer required to be a Guarantor pursuant
to  Section
4.19; or

     

    (6)           upon
legal defeasance or satisfaction and discharge of the Notes as provided in
Articles 8 and 13.

     

    
      	
              Section
      12.07  

            	
              Guarantors May
      Consolidate, etc. on Certain
Terms.

            

    

     

    Except as
otherwise provided in Section 12.06, no Guarantor may sell or otherwise dispose
of all or substantially all of its assets to, or consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person) another Person,
other than CCFC or another Guarantor, unless:

     

    (1)           immediately
after giving effect to that transaction, no Default or Event of Default exists;
and

     

    (2)           either:

     

    (a)           (i)
such Guarantor is the surviving Person or (ii) the Person acquiring the property
in any such sale or disposition or the Person formed by or surviving any such
consolidation or merger assumes all the obligations of that Guarantor under this
Indenture, its Guarantee and all Security Documents delivered by that Guarantor
pursuant to a supplemental indenture or any other documents satisfactory to the
Trustee; or

     

    (b)           the
Net Proceeds of such sale or other disposition are applied in accordance with
the applicable provisions of this Indenture and the Collateral Trust
Agreement.

     

    In case
of any such consolidation, merger, sale or conveyance and upon the assumption by
the successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Guarantee endorsed upon
the Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Guarantor, such successor
Person shall succeed to and be substituted for the Guarantor with the same
effect as if it had been named herein as a Guarantor.  Such successor
Person thereupon may cause to be signed any or all of the Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Issuers and delivered to the Trustee.  All the
Guarantees so issued will in all respects have the same legal rank and benefit
under this Indenture as the Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Guarantees had
been issued on the Issue Date.

     

    Except as
set forth in Articles 4 and 5 hereof, and notwithstanding clauses (a) and (b)
above, nothing contained in this Indenture or in any of the Notes will prevent
any consolidation or merger of a Guarantor with or into the CCFC or another
Guarantor, or will prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to CCFC or another
Guarantor.

     

    

    
      
        
           

        

        
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    ARTICLE
13

     

    SATISFACTION
AND DISCHARGE

     

    
      	
              Section
      13.01  

            	
              Satisfaction and
      Discharge.

            

    

     

    This
Indenture will be discharged and will cease to be of further effect as to all
Notes issued there under Notes, when

     

    (1)           either:

     

    (A)    all Notes
that have been authenticated, except lost, stolen or destroyed Notes that have
been replaced or paid and Notes for whose payment money has been deposited in
trust and thereafter repaid to the Issuers, have been delivered to the Trustee
for cancellation; or

     

    (B)    all Notes
that have not been delivered to the Trustee for cancellation have become due and
payable by reason of the mailing of a notice of redemption or otherwise or shall
become due and payable within one year and the Issuers or any Guarantor has
irrevocably deposited or caused to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient without
consideration of any reinvestment of interest to pay and discharge the entire
indebtedness on the Notes not delivered to the Trustee for cancellation for
principal, premium and accrued interest to the date of maturity or
redemption;

     

    (2)           no
Default or Event of Default has occurred and is continuing on the date of the
deposit or will occur as a result of the deposit and the deposit will not result
in a breach or violation of, or constitute a default under, any other instrument
to which the Issuers or any Guarantor is a party or by which the Issuers or any
Guarantor is bound;

     

    (3)           the
Issuers or any Guarantor has paid or caused to be paid all sums payable by them
under this Indenture; and

     

    (4)           the
Issuers have delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes at
maturity or the redemption date, as the case may be.

     

    In
addition, the Issuers must deliver an Officer’s Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.

     

    The
Collateral will be released with respect to the Note Obligations, as provided in
Section 10.05 upon a discharge of this Indenture in accordance with the
provisions of this Section
13.01.

     

    Notwithstanding
the satisfaction and discharge of this Indenture, if money shall have been
deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section 13.01, the
provisions of Section
13.02, Section
8.06 and Section 7.07 hereof
shall survive.

     

    

    
      
        
           

        

        
          -99-

          
            

          

        

        
           

        

      

    

    

    
      	
              Section
      13.02  

            	
              Application of Trust
      Money.

            

    

     

    Subject
to the provisions of Section 8.06 hereof,
all money deposited with the Trustee pursuant to Section 13.01 hereof
shall be held in trust and applied by it, in accordance with the provisions of
the Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Issuers acting as their own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with the Trustee; but such money need not be segregated from other funds except
to the extent required by law.

     

    If the
Trustee or Paying Agent is unable to apply any money or Government Securities in
accordance with Section 13.01 hereof
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 Issuers’ and any Guarantor’s obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 13.01 hereof;
provided that
if the Issuers have made any payment of principal of or interest on any Notes
because of the reinstatement of their obligations, the Issuers shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or Government Securities held by the Trustee or Paying
Agent.

     

    ARTICLE
14

     

    MISCELLANEOUS

     

    
      	
              Section
      14.01  

            	
              Trust Indenture Act
      Controls.

            

    

     

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

     

    
      	
              Section
      14.02  

            	
              Notices.

            

    

     

    Any
notice or communication by the Issuers, any Guarantor or the Trustee to the
others is duly given if in writing and delivered in person or mailed by
first-class mail (registered or certified, return receipt requested), fax or
overnight air courier guaranteeing next day delivery, to the others’
address:

     

    
      	
               
      

            	
              If
      to the Issuers and/or any
Guarantor:

            

    

    
      	
               
      

            	
              Calpine
      Construction Finance Company, L.P.

            

    

    
      	
               
      

            	
              717
      Texas Avenue

            

    

    
      	
               
      

            	
              Suite
      1000

            

    

    
      	
               
      

            	
              Houston,
      Texas 77002

            

    

    
      	
               
      

            	
              Fax
      No.  832-325-5066

            

    

    
      	
               
      

            	
              Attention:  Chief
      Legal Officer

            

    

    

    
      	
               
      

            	
              If
      to the Trustee:

            

    

    

    
      	
               
      

            	
              Wilmington
      Trust Company

            

    

    
      	
               
      

            	
              Rodney
      Square North

            

    

    
      	
               
      

            	
              1100
      North Market Street

            

    

    
      	
               
      

            	
              Wilmington,
      Delaware 19890

            

    

    
      	
               
      

            	
              Fax
      No.:  302-636-4145

            

    

    
      	
               
      

            	
              Attention:  Christopher
      Slaybaugh

            

    

     

    

    
      
        
           

        

        
          -100-

          
            

          

        

        
           

        

      

    

    

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

     

    All
notices and communications (other than those sent to Holders) shall be deemed to
have been duly given: at the time delivered by hand, if personally delivered; on
the first date on which publication is made, if by publication; five calendar
days after being deposited in the mail, postage prepaid, if mailed by
first-class mail; when receipt acknowledged, if faxed; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery; provided that any
notice or communication delivered to the Trustee shall be deemed effective upon
actual receipt thereof.

     

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

     

    If a
notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives
it.

     

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

     

    
      	
              Section
      14.03  

            	
              Communication by
      Holders of Notes with Other Holders of
  Notes.

            

    

     

    Holders
may communicate pursuant to Section 312(b) of the TIA with other Holders with
respect to their rights under this Indenture or the Notes.  The
Issuers, the Trustee, the Registrar and anyone else shall have the protection of
Section 312(c) of the TIA.

     

    
      	
              Section
      14.04  

            	
              Certificate and
      Opinion as to Conditions
Precedent.

            

    

     

    Upon any
request or application by the Issuers or any Guarantor to the Trustee to take
any action under this Indenture, the Issuers or such Guarantor, as the case may
be, shall furnish to the Trustee:

     

    (a)           An
Officer’s Certificate in form and substance reasonably satisfactory to the
Trustee (which shall include the statements set forth in Section 14.05 hereof)
stating that, in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and

     

    (b)           An
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
(which shall include the statements set forth in Section 14.05 hereof)
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.

     

    
      	
              Section
      14.05  

            	
              Statements Required in
      Certificate or Opinion.

            

    

     

    Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
Section 4.04
hereof or Section

     

    

    
      
        
           

        

        
          -101-

          
            

          

        

        
           

        

      

    

    

    314(a)(4)
of the TIA) shall comply with the provisions of Section 314(e) of the TIA
Section and shall include:

     

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

     

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

     

    (c)           a
statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with (and, in the case of an Opinion of Counsel, may be limited to
reliance on an Officer’s Certificate as to matters of fact); and

     

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

     

    
      	
              Section
      14.06  

            	
              Rules by Trustee and
      Agents.

            

    

     

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

     

    
      	
              Section
      14.07  

            	
              No Personal Liability
      of Directors, Officers, Employees and
  Stockholders.

            

    

     

    No
director, officer, employee, incorporator or equityholder of any Issuer or any
Guarantor, as such, will have any liability for any obligations of the Issuers
or the Guarantors under the Notes, this Indenture, the guarantees, the Security
Documents or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of Notes by accepting a note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.

    

    
      	
              Section
      14.08  

            	
              Governing
      Law.

            

    

     

    THIS
INDENTURE, THE NOTES AND EACH GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     

    
      	
              Section
      14.09  

            	
              Waiver of Jury
      Trial.

            

    

     

    EACH OF
THE ISSUERS, EACH GUARANTOR AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     

    
      	
              Section
      14.10  

            	
              Force
      Majeure.

            

    

     

    In no
event shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations under this Indenture arising out of or caused by,
directly or indirectly, forces beyond its reasonable control, including without
limitation strikes, work stoppages, accidents, acts of war

     

    

    
      
        
           

        

        
          -102-

          
            

          

        

        
           

        

      

    

    

    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 or hardware) services.

     

    
      	
              Section
      14.11  

            	
              No Adverse
      Interpretation of Other
Agreements.

            

    

     

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

     

    
      	
              Section
      14.12  

            	
              Successors.

            

    

     

    All
agreements of each Issuer in this Indenture and the Notes shall bind its
respective successors.  All agreements of the Trustee in this
Indenture shall bind its successors.  All agreements of each Guarantor
in this Indenture shall bind its successors, except as otherwise provided in
Section 12.02
hereof.

     

    
      	
              Section
      14.13  

            	
              Severability.

            

    

     

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

     

    
      	
              Section
      14.14  

            	
              Counterpart
      Originals.

            

    

     

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

     

    
      	
              Section
      14.15  

            	
              Table of Contents,
      Headings, etc..

            

    

     

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

     

    [Signatures
on following page]

    

    

    

    
      
        
           

        

        
          -103-

          
            

          

        

        
           

        

      

    

    

    
      	 
      	
              CALPINE
      CONSTRUCTION FINANCE COMPANY,

            
	 
      	
                   L.P.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                /s/
      Zamir Rauf

            
	 
      	 
      	
              Name:  Zamir
      Rauf

            
	 
      	 
      	
              Title:  Chief
      Financial Officer

            

    

    

    

    

    
      	 
      	
              CCFC
      FINANCE CORP.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                /s/
      Zamir Rauf

            
	 
      	 
      	
              Name:  Zamir
      Rauf

            
	 
      	 
      	
              Title:  Chief
      Financial Officer

            

    

    

    

    

    
      	 
      	
              HERMISTON
      POWER LLC,

            
	 
      	
                   as
      a Guarantor

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                /s/
      Zamir Rauf

            
	 
      	 
      	
              Name:  Zamir
      Rauf

            
	 
      	 
      	
              Title:  Chief
      Financial Officer

            

    

    

    

    

    
      	 
      	
              BRAZOS
      VALLEY ENERGY LLC,

            
	 
      	
                   as
      a Guarantor

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                /s/
      Zamir Rauf

            
	 
      	 
      	
              Name:  Zamir
      Rauf

            
	 
      	 
      	
              Title:  Chief
      Financial Officer

            

    

    

     

    

     

    

    
      
        
          
            Signature
Page to Indenture

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	 
      	
              WILMINGTON
      TRUST COMPANY,

            
	 
      	
                   as
      Trustee

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                /s/
      Christopher J. Slaybaugh

            
	 
      	 
      	
              Name:  Christopher
      J. Slaybaugh

            
	 
      	 
      	
              Title:  Assistant
      Vice President

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              With
      respect to Article 11 hereof:

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              WILMINGTON
      TRUST COMPANY,

            
	 
      	
                   as
      Collateral Trustee

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	  /s/ Christopher J. Slaybaugh
	 
      	 
      	
              Name:  Christopher
      J. Slaybaugh

            
	 
      	 
      	
              Title:  Assistant
      Vice President

            

    

    

    
      
        
          
            Signature
Page to Indenture

          

           

        

        
           

          
            

          

        

        
           

        

      

    

     

     

    

    EXHIBIT
A

     

    [Face of
Note]

     

    [Insert
the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]

     

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

     

    [Insert
the Regulation S Temporary Global Note Legend, if applicable pursuant to
the provisions of the Indenture]

     

    [Insert
the Original Issue Discount Legend pursuant to the provisions of the
Indenture]

     

    

    
      
        
           

        

        
          A-1

          
            

          

        

        
           

        

      

    

    

    CUSIP
[           ]

    ISIN
[         ]1

     

    [[RULE
144A][REGULATION S] GLOBAL NOTE

    representing
up to

    $______________]

    8.0% Senior Secured Notes
due 2016

     

     

    
      
        
          
            
              
                
                  	
                          No.

                        	 
      	 
      	
                          [$

                        	
                          ]

                        

                

              

            

          

        

      

       

    

     

    CALPINE CONSTRUCTION FINANCE
COMPANY, L.P.

    CCFC FINANCE
CORP.

     

    promise
to pay to CEDE & CO. or registered assigns, the principal sum [set forth on
the Schedule of Exchanges of Interests in the Global Note attached hereto] [of
_____________________ United States Dollars] on June 1, 2016.

     

    Interest
Payment Dates:  June 1 and December 1.

     

    Record
Dates:  May 15 and November 15

     

    

      

    

      
      
        	
                1

              	
                Rule
      144A Note CUSIP:  13134Y
AD9

              

      

      
        	
                 
      

              	
                Rule
      144A Note
ISIN:  US13134YAD94

              

      

      
        	
                 
      

              	
                Regulation S
      Note CUSIP:  U13051 AB0

              

      

      
        	
                 
      

              	
                Regulation S
      Note ISIN:  USU13051AB01

              

      

       

    

    

    
      
        
           

        

        
          A-2

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS HEREOF, the Issuers have caused this instrument to be duly
executed.

     

    Dated:  [                     ]

     

    
      	 
      	
              CALPINE
      CONSTRUCTION FINANCE COMPANY,

            
	 
      	
                   L.P.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                

            
	 
      	 
      	
              Name:  

            
	 
      	 
      	
              Title:  

            

    

    

    

    

    
      	 
      	
              CCFC
      FINANCE CORP.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                

            
	 
      	 
      	
              Name:  

            
	 
      	 
      	
              Title:  

            

    

    

    

     

    

    
      
        
           

        

        
          A-3

          
            

          

        

        
           

        

      

    

    

    This is
one of the Notes referred to in the within-mentioned Indenture:

     

    
      	 
      	
              WILMINGTON
      TRUST COMPANY,

            
	 
      	
                   as
      Trustee

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                

            
	 
      	 
      	
              Name:  

            
	 
      	 
      	
              Title:  

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              Date:

            	 
      

    

    

     

    

    
      
        
           

        

        
          A-4

          
            

          

        

        
           

        

      

    

    

    [Back of
Note]

     

    

     

    8.00%
Senior Secured Notes due 2016

     

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

     

    1.           INTEREST.  Calpine
Construction Finance Company, L.P., a Delaware limited partnership, and CCFC
Finance Corp., a Delaware corporation (collectively, the “Issuers”), promise to
pay interest on the principal amount of this Note at a rate per annum of
8.00%.  The Issuers will pay interest severally in arrears on each
June 1 and December 1 (each, an “Interest Payment
Date”); provided, that if any
such day is not a Business Day, such interest shall be paid on the next
succeeding Business Day (it being understood that the interest due on any
Interest Payment Date shall not be affected by virtue of the foregoing
proviso).  Interest on the Notes will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from the date
of issuance; provided that the first Interest Payment Date shall be
December 1, 2009.  The Issuers will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at the interest rate
on the Notes; they shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods), from time to time on demand at
the interest rate on the Notes.  Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months.

     

    2.           METHOD
OF PAYMENT.  The Issuers will pay interest on the Notes to the Persons
who are registered Holders of Notes at the close of business on the May 15
and November 15 (whether or not a Business Day), as the case may be,
immediately preceding the applicable Interest Payment Date, even if such Notes
are canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the
Indenture with respect to defaulted interest.  Principal of, premium,
if any, and interest on the Notes will be payable by wire transfer of
immediately available funds to each Holder; provided that payments of interest
may be made at the office of the Paying Agent maintained for such purpose or, at
the option of the Issuers, by check mailed to the Holders at their respective
addresses set forth in the register of Holders.  Such payment shall be
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.

     

    3.           PAYING
AGENT AND REGISTRAR.  Initially, Wilmington Trust Company, the Trustee
under the Indenture, will act as Paying Agent and Registrar.  The
Issuers may change any Paying Agent or Registrar without notice to the
Holders.  The Issuers or any of their Subsidiaries may act in any such
capacity.

     

    4.           INDENTURE.  The
Issuers issued the Notes under an Indenture, dated as of May 19, 2009 (the
“Indenture”),
among the Issuers, the guarantors named therein, the Trustee and the Collateral
Trustee.  This Note is one of a duly authorized issue of notes of the
Issuers designated as their 8.00% Senior Secured Notes due 2016.  The
Issuers shall be entitled to issue Additional Notes pursuant to Sections 2.01,
4.09 and 4.12 of the
Indenture.  The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (the “TIA”).  The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms.  To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling.

     

    

    
      
        
           

        

        
          A-5

          
            

          

        

        
           

        

      

    

    

    5.           OPTIONAL
REDEMPTION.

     

    (a)          At
any time prior to June 1, 2012, the Issuers may on any one or more occasions
redeem up to 35% of the aggregate principal amount of the Notes issued under
this Indenture at a redemption price of 108% of the principal amount, plus
accrued and unpaid interest to the redemption date, with the net cash proceeds
of one or more Equity Offerings; provided that:

     

    (1) at
least 65% of the aggregate principal amount of the Notes issued under this
Indenture on the Issue Date remains outstanding immediately after the occurrence
of such redemption (excluding Notes held by CCFC and its Subsidiaries);
and

    

    (2) the
redemption occurs within 90 days of the date of the closing of such Equity
Offering.

    

    (b)          On
or after June 1, 2013, the Issuers may redeem all or a part of the Notes upon
not less than 30 nor more than 60 days’ notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest on the Notes redeemed, to the applicable redemption date, if
redeemed during the twelve-month period beginning on of the years indicated
below, subject to the rights of holders on the relevant record date to receive
interest on the relevant Interest Payment Date:

     

    
      
        	 
      	
                Year

              	 
      	
                Percentage

              	 
      
	 
      	
                2013

              	 
      	
                104.000%

              	 
      
	 
      	
                2014

              	 
      	
                102.000%

              	 
      
	 
      	
                2015
      and thereafter

              	 
      	
                100.000%

              	 
      

      

    

    

    (c)          At
any time and from time to time prior to June 1, 2013, upon notice as described
in Section 3.03
hereof, the Issuers may elect to redeem all or any portion of the Notes at a
redemption price equal to the sum of :

     

    (1) 100%
of the principal amount of Notes to be redeemed; and

    

    (2) the
excess of

    

    (a) the
sum of the present values of (1) the redemption price of the Notes to be
redeemed at June 1, 2013 (as set forth in the prior paragraph), and (2) the
remaining scheduled payments of interest from the redemption date to  June
1, 2013, but excluding accrued and unpaid interest to the redemption date,
discounted to the date of redemption on a semi-annual basis (assuming a 360 day
year consisting of twelve 30 day months) at the Treasury Rate plus 50 basis
points, over

     

    (b) 100%
of the principal amount of the Notes to be redeemed,

     

    plus
accrued and unpaid interest to, but excluding 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).

    

    (d)           Any
redemption pursuant to this paragraph 5 shall be made pursuant to the
provisions of Sections 3.01
through 3.06 of
the Indenture.

     

    

    
      
        
           

        

        
          A-6

          
            

          

        

        
           

        

      

    

    

    6.           MANDATORY
REDEMPTION.  The Issuers shall not be required to make mandatory
redemption or sinking fund payments with respect to the Notes.

     

    7.           NOTICE
OF REDEMPTION.  Subject to Section 3.03 of the
Indenture, notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date (except that
redemption notices may be mailed more than 60 days prior to a redemption date if
the notice is issued in connection with Article 8 or Article 13 of the
Indenture) to each Holder whose Notes are to be redeemed at its registered
address.  Notes in denominations larger than $2,000 may be redeemed in
part but only in integral multiples of $1,000 in excess thereof, unless all of
the Notes held by a Holder are to be redeemed.  On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.

     

    8.           OFFERS
TO REPURCHASE.

     

    (a)           Upon
the occurrence of a Change of Control, the Issuers shall make an offer (a “Change of Control
Offer”) to each Holder to repurchase all or any part (equal to $2,000 or
an integral multiple of $1,000 in excess thereof) of each Holder’s Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest to the date of purchase (the “Change of Control
Payment”).  The Change of Control Offer shall be made in
accordance with Section 4.14 of the
Indenture.

     

    (b)           If
the Issuers or any of their Restricted Subsidiaries consummates an Asset Sale,
within 10 Business Days of each date that Excess Proceeds exceed $40.0 million,
the Issuers shall commence an offer to all Holders of the Notes and, if required
by the terms of any Indebtedness that is pari passu with the Notes, to
the holders of such pari passu Indebtedness (an “Asset Sale Offer”),
to purchase the maximum principal amount of Notes (including any Additional
Notes) and such other pari passu Indebtedness 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 thereof plus accrued and unpaid interest to the date fixed for
the closing of such offer, in accordance with the procedures set forth in the
Indenture.  To the extent that the aggregate amount of Notes
(including any Additional Notes) and such pari passu Indebtedness tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuers
may use any remaining Excess Proceeds for general corporate purposes, subject to
other covenants contained in the Indenture.  If the aggregate
principal amount of Notes or the pari passu Indebtedness surrendered by such
holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes and such pari passu Indebtedness to be purchased on a pro rata basis based on the
accreted value or principal amount of the Notes or such pari passu Indebtedness
tendered.  Upon completion of any such Asset Sale Offer, the amount of
Excess Proceeds with respect to which such Asset Sale Offer was made shall be
reset at zero.  Holders of Notes that are the subject of an offer to
purchase will receive an Asset Sale Offer from the Issuers prior to any related
purchase date and may elect to have such Notes purchased by completing the form
entitled “Option of Holder to Elect Purchase” attached to the
Notes.

     

    9.           DENOMINATIONS,
TRANSFER, EXCHANGE.  The Notes are in registered form without coupons
in denominations of $2,000 and integral multiples of $1,000 in excess
thereof.  The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture.  The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and the Issuers may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture.  The Issuers need
not exchange or register the transfer of any Note or portion of a Note selected
for redemption, except for the unredeemed portion of any Note being redeemed in
part.

     

    

    
      
        
           

        

        
          A-7

          
            

          

        

        
           

        

      

    

    

    Also, the
Issuers need not exchange or register the transfer of any Notes for a period of
15 days before a selection of Notes to be redeemed.

     

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

     

    11.           AMENDMENT,
SUPPLEMENT AND WAIVER.  The Indenture, the Guarantees or the Notes may
be amended or supplemented as provided in the Indenture.

     

    12.           DEFAULTS
AND REMEDIES.  The Events of Default relating to the Notes are defined
in Section 6.01
of the Indenture.  If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare the principal, premium, if any, interest and any
other monetary obligations on all the then outstanding Notes to be due and
payable immediately.  Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency with
respect to the Issuers, all outstanding Notes will become due and payable
immediately without further action or notice.  Holders may not enforce
the Indenture, the Notes or the Guarantees except as provided in the
Indenture.  Subject to certain limitations, Holders of a majority in
aggregate principal amount of the then outstanding Notes may direct the Trustee
in its exercise of any trust or power.  The Trustee may withhold from
Holders of the Notes notice of any continuing Default (except a Default relating
to the payment of principal, premium, if any, or interest) if it determines that
withholding notice is in their interest.  The Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or and its consequences under the Indenture except a continuing Default
in payment of the principal of, premium, if any, or interest on, any of the
Notes held by a non-consenting Holder.  The Issuers and each Guarantor
(to the extent that such Guarantor is so required under the TIA) is required to
deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Issuers are required within five (5) Business Days after
becoming aware of any Default, to deliver to the Trustee a statement specifying
such Default and what action the Issuers propose to take with respect
thereto.

     

    13.           AUTHENTICATION.  This
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose until authenticated by the manual signature of the
Trustee.

     

    14.           GOVERNING
LAW.  THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.

     

    15.           ISINS
AND CUSIP NUMBERS.  The Issuers have caused ISINs and (pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures) CUSIP numbers to be printed on the Notes and the Trustee may use
ISINs and CUSIP numbers in notices of redemption as a convenience to
Holders.  No representation is made as to the accuracy of such numbers
either as printed on the Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed
thereon.

     

    

    
      
        
           

        

        
          A-8

          
            

          

        

        
           

        

      

    

    

    The
Issuers will furnish to any Holder upon written request and without charge a
copy of the Indenture and/or the Security Documents.  Requests may be
made to the Issuers at the following address:

     

    
      	
               
      

            	
              Calpine
      Construction Finance Company, L.P.

            

    

    
      	
               
      

            	
              717
      Texas Avenue

            

    

    
      	
               
      

            	
              Suite
      1000

            

    

    
      	
               
      

            	
              Houston,
      Texas 77002

            

    

    
      	
               
      

            	
              Fax
      No.  832-325-5066

            

    

    
      	
               
      

            	
              Attention:  Chief
      Legal Officer

            

    

    

    16.           COLLATERAL
AND SECURITY.  In order to secure the due and punctual payment of the
principal of and interest on the Notes when and as the same shall be due and
payable, whether at maturity, by acceleration, purchase, repurchase, redemption
or otherwise, and interest on the overdue principal of and interest (to the
extent permitted by law), if any, on this Note and the performance of all other
obligations of the Issuers to the Holder of Notes, the Issuers, the Guarantors
and the Collateral Trustee have entered into Security Documents pursuant to
which the Issuers and the Guarantors have granted a first priority security
interest in the collateral described therein (the “Collateral”).

     

    

    
      
        
           

        

        
          A-9

          
            

          

        

        
           

        

      

    

    

    ASSIGNMENT
FORM

     

    To assign
this Note, fill in the form below:

     

    
      	
              (I)
      or (we) assign and transfer this Note to:

            	
               

            
	
               

            	
              (Insert
      assignee’ legal name)

            
	
               

            	
               

            

    

    

    
      	
               

            
	
              (Insert
      assignee’s soc. Sec. or tax I.D. no.)

            
	
               

            
	
               

            
	
               

            
	
               

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

            

    

    

    
      	
              and
      irrevocably appoint

            	
               

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

            

    

    

    
      	
              Date:

            	
               

            	 
      

    

    

    

    
      
        	
                 

              	
                Your
      Signature:

              	
                 

              
	
                 

              	
                 

              	
                (Sign
      exactly as your name appears on

              
	
                 

              	
                 

              	
                the
      face of this Note)

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                Signature
      Guarantee*:

              	
                 

              	
                 

              

      

    

    

    *
Participant in a recognized Signature Guarantee Medallion Program (or
other

    signature
guarantor acceptable to the Trustee).

    

    
      
        
           

        

        
          A-10

          
            

          

        

        
           

        

      

    

    

    OPTION OF
HOLDER TO ELECT PURCHASE

     

    If you
want to elect to have this Note purchased by the Issuers pursuant to
Section 4.10 or 4.14 of the Indenture, check the appropriate box
below:

     

    [   ]
Section
4.10                                           [   ]
Section 4.14

     

    If you
want to elect to have only part of this Note purchased by the Issuers pursuant
to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to
have purchased:

     

    $_______________

     

    
      	
              Date:

            	
               

            	 
      

    

    

    
      	
               

            	
              Your
      Signature:

            	
               

            
	
               

            	
               

            	
              (Sign
      exactly as your name appears on

            
	
               

            	
               

            	
              the
      face of this Note)

            
	
               

            	
               

            	
               

            
	
               

            	
              Tax
      Identification No.:

            	
               

            
	
               

            	
               

            	
               

            
	
              Signature
      Guarantee*:

            	
               

            	
               

            

    

    

    *
Participant in a recognized Signature Guarantee Medallion Program (or
other

    signature
guarantor acceptable to the Trustee).

    

    
      
        
           

        

        
          A-11

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

     

    The
initial outstanding principal amount of this Global Note is
$__________.  The following exchanges of a part of this Global Note
for an interest in another Global Note or for a Definitive Note, or exchanges of
a part of another Global or Definitive Note for an interest in this Global Note,
have been made:

     

    
      
        
          	 
      	 
      	 
      	 
      	 
      	 
      	
                  Principal
      Amount

                	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	
                  of

                	 
      	 
      
	 
      	 
      	
                  Amount
      of

                	 
      	
                  Amount
      of increase

                	 
      	
                  this
      Global Note

                	 
      	
                  Signature
      of

                
	 
      	 
      	
                  decrease

                	 
      	
                  in
      Principal

                	 
      	
                  following
      such

                	 
      	
                  authorized
      officer

                
	
                  Date
      of

                	 
      	
                  in
      Principal

                	 
      	
                  Amount
      of this

                	 
      	
                  decrease
      or

                	 
      	
                  of
      Trustee or

                
	
                  Exchange

                	 
      	
                  Amount

                	 
      	
                  Global
      Note

                	 
      	
                  increase

                	 
      	
                  Note
      Custodian

                
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

        

      

       

    

    __________________

    *This
schedule should be included only if the Note is issued in global
form.

    

    
      
        
           

        

        
          A-12

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
B

     

    FORM OF
CERTIFICATE OF TRANSFER

     

    Calpine
Construction Finance Company, L.P.

    CCFC
Finance Corp.

    717 Texas
Avenue

    Suite
1000

    Houston,
Texas 77002

    Fax
No.  832-325-5066

    Attention:  Chief
Legal Officer

    

    Wilmington
Trust Company

    Rodney
Square North

    1100
North Market Street

    Wilmington,
Delaware 19890

    Fax
No.:  302-636-4145

    Attention:  Christopher
Slaybaugh

     

    Re:  8.00%
Senior Secured Notes due 2016

     

    Reference
is hereby made to the Indenture, dated as of May 19, 2009 (the “Indenture”), among
Calpine Construction Finance Company, L.P., CCFC Finance Corp., the guarantors
party thereto, the Trustee and Collateral Trustee.  Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.

     

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

     

    [CHECK
ALL THAT APPLY]

     

    1.           [  ]
CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A
GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A.  The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the “Securities Act”),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believes is purchasing the beneficial interest or Definitive Note for
its own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
“qualified institutional buyer” within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United
States.

     

    2.           [  ]
CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION
S.  The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer

     

    

    
      
        
           

        

        
          B-1

          
            

          

        

        
           

        

      

    

    

    is not
being made to a person in the United States and (x) at the time the buy order
was originated, the Transferee was outside the United States or such Transferor
and any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in,
on or through the facilities of a designated offshore securities market and
neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser).  Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will be subject to the restrictions on Transfer enumerated in
the Indenture and the Securities Act.

     

    3.           [  ]
CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN
RULE 144A OR REGULATION S.  The Transfer is being effected in
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Notes and Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further
certifies that (check one):

     

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

     

    or

     

    (b)          [  ]
such Transfer is being effected to the Issuers or a subsidiary
thereof;

     

    or

     

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

     

    4.           
[  ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE
NOTE.

     

    (a)           [  ]
CHECK IF TRANSFER IS PURSUANT TO RULE 144.  (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act.  Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.

     

    (b)          [  ]
CHECK IF TRANSFER IS PURSUANT TO REGULATION S.  (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities

     

    

    
      
        
           

        

        
          B-2

          
            

          

        

        
           

        

      

    

    

    Act and
in compliance with the transfer restrictions contained in the Indenture and any
applicable blue sky securities laws of any state of the United States and (ii)
the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act.  Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.

     

    (c)          [  ]
CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION.  (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act.  Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will not be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes or Restricted Definitive Notes and in the Indenture.

     

    

    
      
        
           

        

        
          B-3

          
            

          

        

        
           

        

      

    

    

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

     

    
      	 
      	
              [Insert
      Name of Transferor]

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                

            
	 
      	 
      	
              Name:  

            
	 
      	 
      	
              Title:  

            

    

    

    

    
      	
              Dated:

            	
               

            	 
      

    

    

     

    

    
      
        
           

        

        
          B-4

          
            

          

        

        
           

        

      

    

    

    ANNEX A
TO CERTIFICATE OF TRANSFER

     

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

     

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

     

    (a)           [  ]
a beneficial interest in the:

     

                    (i)         
[  ] 144A
Global Note (CUSIP 13134Y AD9), or

     

                    (ii)        
[  ] Regulation S Global Note (CUSIP U13051 AB0), or

     

    (b)           [  ]
a Restricted Definitive Note.

     

    2.           After
the Transfer the Transferee will hold:

     

    [CHECK
ONE]

     

    (a)           [  ]
a beneficial interest in the:

     

                    (i)         
[  ] 144A Global Note (CUSIP 13134Y AD9), or

     

                    (ii)        
[  ] Regulation S Global Note (CUSIP U13051 AB0), or

     

    (b)           [  ]
a Restricted Definitive Note; or

     

    (c)          
[  ] an Unrestricted Definitive Note,

                   
in accordance with the terms of the Indenture. 

     

     

    

    
      
        
           

        

        
          B-5

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
C

     

    FORM OF
CERTIFICATE OF EXCHANGE

     

    Calpine
Construction Finance Company, L.P.

    CCFC
Finance Corp.

    717 Texas
Avenue

    Suite
1000

    Houston,
Texas 77002

    Fax
No.  832-325-5066

    Attention:  Chief
Legal Officer

    

     

    Wilmington
Trust Company

    Rodney
Square North

    1100
North Market Street

    Wilmington,
Delaware 19890

    Fax
No.:  302-636-4145

    Attention:  Christopher
Slaybaugh

     

    Re:  8.00%
Senior Secured Notes due 2016

     

    Reference
is hereby made to the Indenture, dated as of May 19, 2009 (the “Indenture”), among
Calpine Construction Finance Company, L.P., CCFC Finance Corp., the guarantors
party thereto, the Trustee and the Collateral Trustee.  Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.

     

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

     

    1)           EXCHANGE
OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL
NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN
UNRESTRICTED GLOBAL NOTE

     

    a)           [  ]
CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE.  In connection
with the Exchange of the Owner’s beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the “Securities Act”),
(iii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest in an Unrestricted Global Note
is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.

     

    

    
      
        
           

        

        
          C-1

          
            

          

        

        
           

        

      

    

    

    b)           [  ]
CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO
UNRESTRICTED DEFINITIVE NOTE.  In connection with the Exchange of the
Owner’s beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United
States.

     

    c)           [  ]
CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN
AN UNRESTRICTED GLOBAL NOTE.  In connection with the Owner’s Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

     

    d)           [  ]
CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE
NOTE.  In connection with the Owner’s Exchange of a Restricted
Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies
(i) the Unrestricted Definitive Note is being acquired for the Owner’s own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

     

    2)           EXCHANGE
OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL
NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED
GLOBAL NOTES

     

    a)           [  ]
CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO
RESTRICTED DEFINITIVE NOTE.  In connection with the Exchange of the
Owner’s beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner’s own account
without transfer.  Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.

     

    b)           [  ]
CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE.  In connection with the Exchange of the
Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK
ONE]

     

    

    
      
        
           

        

        
          C-2

          
            

          

        

        
           

        

      

    

    

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

     

    This
certificate and the statements contained herein are made for your benefit and
the benefit of the Issuers and are dated ______________________.

     

    
      	 
      	
              [Insert
      Name of Transferor]

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                

            
	 
      	 
      	
              Name:  

            
	 
      	 
      	
              Title:  

            

    

    

    

    
      	
              Dated:

            	
               

            	 
      

    

    

    
      
        
           

        

        
          C-3

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
D

     

    [FORM OF
SUPPLEMENTAL INDENTURE

    TO BE
DELIVERED BY SUBSEQUENT GUARANTORS]

     

    Supplemental
Indenture (this “Supplemental
Indenture”), dated as of __________, among __________________ (the “Guaranteeing
Subsidiary”), a subsidiary of Calpine Construction Finance Company, L.P.,
a Delaware limited partnership (“CCFC”), CCFC Finance
Corp., a Delaware corporation (“CCFC Finance”),
Wilmington Trust Company, as trustee (the “Trustee”) and
Wilmington Trust Company, as collateral trustee (the “Collateral
Trustee”).

     

    W I T N E
S S E T H

     

    WHEREAS,
CCFC and CCFC Finance (collectively, the “Issuers”) have
heretofore executed and delivered to the Trustee and Collateral Trustee an
indenture (the “Indenture”), dated as
of May 19, 2009, providing for the issuance of $1,000,000,000 aggregate
principal amount of 8.00% Senior Secured Notes due 2016 (the “Notes”);

     

    WHEREAS,
the Indenture provides that under certain circumstances the Guaranteeing
Subsidiary shall execute and deliver to the Trustee a supplemental indenture
pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee
all of the Issuers’ Obligations under the Notes and the Indenture on the terms
and conditions set forth herein and under the Indenture (the “Guarantee”);
and

     

    WHEREAS,
pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute
and deliver this Supplemental Indenture.

     

    NOW
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties mutually
covenant and agree for the equal and ratable benefit of the Holders of the Notes
as follows:

     

    (1)           Capitalized
Terms.  Capitalized terms used herein without definition shall
have the meanings assigned to them in the Indenture.

     

    (2)           Agreement to
Guarantee.  The Guaranteeing Subsidiary hereby agrees as
follows:

     

    (a)           Along
with each Guarantor named in the Indenture, to jointly and severally
unconditionally guarantee to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of the Indenture, the Notes or the
obligations of the Issuers hereunder or thereunder, that:

     

    (i)          the
principal of and interest and premium on the Notes will be promptly paid in full
when due, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Issuers to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and

     

    

    
      
        
           

        

        
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    (ii)          in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations, that same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise.  Failing payment when due of
any amount so guaranteed or any performance so guaranteed for whatever reason,
the Guarantors and the Guaranteeing Subsidiary shall be jointly and severally
obligated to pay the same immediately.  This is a guarantee of payment
and not a guarantee of collection.

     

    (b)           The
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or the Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the Notes
with respect to any provisions hereof or thereof, the recovery of any judgment
against the Issuers, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor.

     

    (c)           The
following is hereby waived:  diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Issuers, any right to require a proceeding first against the Issuers,
protest, notice and all demands whatsoever.

     

    (d)           This
Guarantee shall not be discharged except by complete performance of the
obligations contained in the Notes, the Indenture and this Supplemental
Indenture, and the Guaranteeing Subsidiary accepts all obligations of a
Guarantor under the Indenture.

     

    (e)           If
any Holder or the Trustee is required by any court or otherwise to return to the
Issuers, the Guarantors (including the Guaranteeing Subsidiary), or any
custodian, trustee, liquidator or other similar official acting in relation to
either the Issuers or the Guarantors, any amount paid either to the Trustee or
such Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.

     

    (f)           The
Guaranteeing Subsidiary shall not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby.

     

    (g)           As
between the Guaranteeing Subsidiary, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 of the Indenture for the
purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guaranteeing Subsidiary for the purpose of this Guarantee.

     

    (h)           The
Guaranteeing Subsidiary shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under this Guarantee.

     

    (i)           Pursuant
to Section 12.02 of the Indenture, after giving effect to all other contingent
and fixed liabilities that are relevant under any applicable Bankruptcy or
fraudulent conveyance laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under
Article 12 of the Indenture, this new Guarantee shall be limited to the
maximum

     

    

    
      
        
           

        

        
          D-2

          
            

          

        

        
           

        

      

    

    

    amount
permissible such that the obligations of such Guaranteeing Subsidiary under this
Guarantee will not constitute a fraudulent transfer or conveyance.

     

    (j)           This
Guarantee shall remain in full force and effect and continue to be effective
should any petition be filed by or against the Issuers for liquidation,
reorganization, should the Issuers become insolvent or make an assignment for
the benefit of creditors or should a receiver or trustee be appointed for all or
any significant part of the Issuers’ assets, and shall, to the fullest extent
permitted by law, continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Notes are, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee on the Notes and Guarantee, whether as a “voidable preference”,
“fraudulent transfer” or otherwise, all as though such payment or performance
had not been made.  In the event that any payment or any part thereof,
is rescinded, reduced, restored or returned, the Note shall, to the fullest
extent permitted by law, be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

     

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

     

    (l)           This
Guarantee shall be a senior secured obligation of such Guaranteeing Subsidiary,
ranking pari passu with
all existing and future senior Indebtedness of the Guaranteeing Subsidiary, if
any, and will be senior in right of payment to all existing and future
subordinated indebtedness of the Guaranteeing Subsidiary.

     

    (m)           Each
payment to be made by the Guaranteeing Subsidiary in respect of this Guarantee
shall be made without set-off, counterclaim, reduction or diminution of any kind
or nature.

     

    (3)           Execution and
Delivery.  The Guaranteeing Subsidiary agrees that the
Guarantee shall remain in full force and effect notwithstanding the absence of
the endorsement of any notation of such Guarantee on the Notes.

     

    (4)           Merger, Consolidation or
Sale of All or Substantially All Assets.

     

    (a)           Except
as otherwise provided in Section 12.07, of the Indenture, no Guarantor may sell
or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person, other than the CCFC or another Guarantor,
unless:

     

    (1)           immediately
after giving effect to that transaction, no Default or Event of Default exists;
and

     

    (2)           either:

     

    (d)           (i)
such Guarantor is the surviving Person or (ii) the Person acquiring the property
in any such sale or disposition or the Person formed by or surviving any such
consolidation or merger assumes all the obligations of that Guarantor under this
Indenture, its Guarantee and all Security Documents delivered by that Guarantor
pursuant to a supplemental indenture or any other documents satisfactory to the
Trustee; or

     

    

    
      
        
           

        

        
          D-3

          
            

          

        

        
           

        

      

    

    

    (e)           the
Net Proceeds of such sale or other disposition are applied in accordance with
the applicable provisions of this Indenture and the Collateral Trust
Agreement.

     

    In case
of any such consolidation, merger, sale or conveyance and upon the assumption by
the successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Guarantee endorsed upon
the Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Guarantor, such successor
Person shall succeed to and be substituted for the Guarantor with the same
effect as if it had been named herein as a Guarantor.  Such successor
Person thereupon may cause to be signed any or all of the Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Issuers and delivered to the Trustee.  All the
Guarantees so issued will in all respects have the same legal rank and benefit
under this Indenture as the Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Guarantees had
been issued on the Issue Date.

     

    Except as
set forth in Articles 4 and 5 hereof, and notwithstanding clauses (a) and (b)
above, nothing contained in this Indenture or in any of the Notes will prevent
any consolidation or merger of a Guarantor with or into the CCFC or another
Guarantor, or will prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to CCFC or another
Guarantor.

     

    (5)           Releases.

     

    (a)           A
Guarantee (including any Liens in support thereof) by a Guarantor shall be
automatically and unconditionally released and discharged, and no further action
by such Guarantor, the Issuers or the Trustee is required for the release of
such Guarantor’s Guarantee, upon:

     

    (1)           in
connection with any sale or other disposition of all or substantially all of the
assets or any sale or other disposition of all of the Capital Stock of that
Guarantor (including by way of merger or consolidation), directly or indirectly,
to a Person that is not (either before or after giving effect to such
transaction) CCFC or a Restricted Subsidiary of CCFC, if the sale or other
disposition does not violate Section 4.10 of the Indenture;

     

    (2)           in
connection with the merger or consolidation of that Guarantor with CCFC or any
other Guarantor;

     

    (3)           if
the Issuers designate any Restricted Subsidiary that is a Guarantor to be an
Unrestricted Subsidiary in accordance with the applicable provisions of the
Indenture;

     

    (4)           upon
a liquidation or dissolution of a Guarantor so long as no Default or Event of
Default occurs as a result thereof;

     

    (5)           at
such time such Guarantor is no longer required to be a Guarantor pursuant
to  Section
4.19 of the Indenture; or

     

    (6)           upon
legal defeasance or satisfaction and discharge of the Notes as provided in
Articles 8 and 13 of the Indenture.

     

    (6)           No Recourse Against
Others.  No director, officer, employee, incorporator or
stockholder of the Guaranteeing Subsidiary shall have any liability for any
obligations of the Issuers or

     

    

    
      
        
           

        

        
          D-4

          
            

          

        

        
           

        

      

    

    

    the
Guarantors (including the Guaranteeing Subsidiary) under the Notes, any
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their
creation.  Each Holder by accepting Notes waives and releases all such
liability.  The waiver and release are part of the consideration for
issuance of the Notes.

     

    (7)           Governing
Law.  THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     

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

     

    (9)           Effect of
Headings.  The Section headings herein are for convenience only
and shall not affect the construction hereof.

     

    (10)         The
Trustee.  The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary.

     

    (11)         Subrogation.  The
Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes
against the Issuers in respect of any amounts paid by the Guaranteeing
Subsidiary pursuant to the provisions of Section 2 hereof and Section 12.01 of
the Indenture; provided that, if an
Event of Default has occurred and is continuing, the Guaranteeing Subsidiary
shall not be entitled to enforce or receive any payments arising out of, or
based upon, such right of subrogation until all amounts then due and payable by
the Issuers under the Indenture or the Notes shall have been paid in
full.

     

    (12)         Benefits
Acknowledged.  The Guaranteeing Subsidiary’s Guarantee is
subject to the terms and conditions set forth in the Indenture.  The
Guaranteeing Subsidiary acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Indenture and this
Supplemental Indenture and that the guarantee and waivers made by it pursuant to
this Guarantee are knowingly made in contemplation of such
benefits.

     

    (13)         Successors.  All
agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall
bind its Successors, except as otherwise provided in Section 2(k) hereof or
elsewhere in this Supplemental Indenture.  All agreements of the
Trustee in this Supplemental Indenture shall bind its successors.

     

    

    
      
        
           

        

        
          D-5

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to
be duly executed, all as of the date first above written.

     

    
      	 
      	
              [GUARANTEEING
      SUBSIDIARY]

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
                

            
	 
      	 
      	
              Name:  

            
	 
      	 
      	
              Title:  

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              WILMINGTON
      TRUST COMPANY,

            
	 
      	
                   as
      Trustee

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:  

            
	 
      	 
      	
              Title:  

            

    

    

     

    D-6

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