Document:

<PAGE>

                                                                     Exhibit 4.7

     THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME
TAX PURPOSES. FOR PURPOSES OF SECTIONS 1272, 1273, AND 1275 OF THE UNITED STATES
INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE ISSUE PRICE OF EACH NOTE IS
$1,000 PER $1,000 OF PRINCIPAL AMOUNT, THE ISSUE DATE IS AUGUST 11, 2003, THE
YIELD TO MATURITY IS 9% COMPOUNDED SEMI-ANNUALLY, AND THE AMOUNT OF ORIGINAL
ISSUE DISCOUNT IS $192.52 PER $1,000 OF PRINCIPAL AMOUNT. IN THE EVENT THAT THE
NOTE REMAINS OUTSTANDING AFTER AUGUST 10, 2005, FOR THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE, THE ISSUE PRICE AND THE YIELD TO MATURITY FOR THIS
NOTE, YOU SHOULD SUBMIT A WRITTEN REQUEST TO THE COMPANY AT THE FOLLOWING
ADDRESS: 1000 LOUISIANA STREET, HOUSTON, TEXAS 77002, ATTENTION: LAYNE J.
ALBERT.

     THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.

     THE HOLDER OF THIS NOTE IS ENTITLED TO THE BENEFITS OF AN EXCHANGE AND
REGISTRATION RIGHTS AGREEMENT (NOTES) DATED AUGUST 11, 2003 AND, BY ITS
ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF
SUCH EXCHANGE AND REGISTRATION RIGHTS AGREEMENT.

     BECAUSE OF THE FOREGOING RESTRICTIONS, PURCHASERS ARE ADVISED TO CONSULT
LEGAL COUNSEL PRIOR TO MAKING ANY RESALE, PLEDGE OR TRANSFER OF ANY OF THE
NOTES. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL
RISKS OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

--------------------------------------------------------------------------------

                                  $225,000,000

                   Junior Unsecured Subordinated Note due 2016

                                       of

                                   DYNEGY INC.

--------------------------------------------------------------------------------

                                  Page 1 of 12

<PAGE>

--------------------------------------------------------------------------------
                   Junior Unsecured Subordinated Note due 2016

No. R-One                                                           $225,000,000

                                   DYNEGY INC.

promises to pay to CHEVRON U.S.A. INC. or registered assigns,

the principal sum of TWO HUNDRED AND TWENTY-FIVE MILLION DOLLARS ($225,000,000)

on February 1, 2016.

Interest Payment Dates: February 1 and August 1

Record Dates: January 15 and July 15

Dated: August 11, 2003

                                             DYNEGY INC.

                                             By: /s/ Carol F. Graebner
                                                 -------------------------------
                                                 Name:
                                                 Title:

                                             By: /s/ J. Kevin Blodgett
                                                 -------------------------------
                                                 Name: J. Kevin Blodgett
                                                 Title: Secretary

                                  Page 2 of 12

<PAGE>

This is one of the Notes referred to
in the within-mentioned Indenture, which
was authenticated on August 11, 2003.

Wilmington Trust Company          ,
                         ---------
Trustee

By: /s/ Sandra R. Ortiz
    -----------------------------
             Authorized Signatory

--------------------------------------------------------------------------------

                                  Page 3 of 12

<PAGE>

                             FORM OF REVERSE OF NOTE
                                   DYNEGY INC.

                  JUNIOR UNSECURED SUBORDINATED 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. Dynegy Inc., an Illinois corporation (the "Company"), promises
to pay interest on the principal amount of this Note at 9.00% per annum from the
Date of Issuance set forth below to, but excluding August 11, 2005, and at
13.75% per annum thereafter until maturity and shall pay any Liquidated Damages
payable pursuant to Section 3(e) of the Exchange and Registration Rights
Agreement (Notes) referred to below; provided that if at any time redemption or
repurchase of the Notes pursuant to Section 3.02 or 3.05 of the Indenture is
restricted by a Redemption Restriction, then the Subject Percentage of the Notes
shall bear interest at 13.75% per annum from the Payment Blockage Date to but
excluding the date that the Blockage Amount is paid pursuant to Section 3.02 of
the Indenture, payable pro rata to the Holders on each Interest Payment Date.
The Company will pay interest and any Liquidated Damages semi-annually in
arrears on February 1 and August 1 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"); provided that such Interest and any Liquidated Damages shall accrue and
an amount equal to such accrued and unpaid Interest and any Liquidated Damages
shall be added to the principal amount of the Notes as Additional Amounts on
each Interest Payment Date (such Additional Amounts to constitute principal for
all purposes of the Indenture and this Note) unless (i) the Company at its sole
option elects to pay all or a portion of such Interest in cash or (ii) an Event
of Default has occurred and payment of the Note has been accelerated pursuant to
Section 7.02 of the Indenture, in which case accrued and unpaid Interest to the
date of such Event of Default shall be due and payable in cash at such time; and
provided further that any Interest paid on the Notes shall be paid net of any
applicable withholding required by law. 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 if there is no existing Default
in the payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be February 1,
2004. The Company shall pay interest (including post-petition interest in any
proceeding under Bankruptcy Law) on overdue principal and premium, if any, from
time to time at a rate that is 1.00% per annum in excess of the rate then in
effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and any
Liquidated Damages (without regard to any applicable grace periods) from time to
time at the same rate to the extent lawful; provided that any Notes that are the
subject of a Blocked Redemption shall bear interest only as provided in Section
2.04 of the Indenture. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.

     2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) and any Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the January 15 or July 15 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date,

                                  Page 4 of 12

<PAGE>

except as provided in Section 2.03 of the Indenture with respect to Defaulted
Interest. The Notes will be payable as to principal, premium and any Liquidated
Damages and interest payable in cash at the office or agency of the Paying Agent
maintained for such purpose within or without the City and State of New York,
or, at the option of the Company, payment of interest and any Liquidated Damages
may be made by check mailed to the Holders at their addresses set forth in the
register of Holders, and provided that if a Holder of more than $2.0 million in
principal amount of Notes has given wire transfer instructions to the Company at
least ten Business Days prior to the applicable Interest Payment Date, the
Company shall pay all interest and premium and any Liquidated Damages on that
Holder's Notes in accordance with those instructions. 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 Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company or any of its Subsidiaries may act in any such capacity.

     4. Indenture. The Company issued the Notes under an Indenture dated as of
August 11, 2003 ("Indenture") between the Company and the Trustee. 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 (15 U.S.
Code ss.ss. 77aaa-77bbbb). The Notes are subject to all such terms, and Holders
are referred to the Indenture and the TIA 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. The
Notes are obligations of the Company limited to $225.0 million in aggregate
principal amount plus any Additional Amounts.

     5. Optional Redemption. At any time and from time to time until the
Transition Date shall have occurred, the Company, at its option, may redeem the
Notes, in whole or in part, upon the notice provided in Section 3.03 of the
Indenture in accordance with the provisions of Sections 3.03 and 3.04 of the
Indenture on the Redemption Date for cash at a redemption price equal to 100% of
the principal amount (including Additional Amounts) of the Notes to be redeemed
together in each case with accrued and unpaid Interest on the Notes to be
redeemed to (but excluding) the Redemption Date, but without premium, subject to
the rights of Holders on the relevant Record Date to receive interest on the
relevant Interest Payment Date. If the Transition Date has occurred, the Company
may not redeem the Notes pursuant to Section 3.01 of the Indenture from the
Transition Date through August 10, 2010. If the Transition Date has occurred,
from and after August 11, 2010, the Company at any time and from time to time
may redeem the Notes, in whole or in part, upon the notice provided in Section
3.03 of the Indenture in accordance with the provisions of Sections 3.03 and
3.04 of the Indenture, on the Redemption Date for cash at the redemption prices
(expressed as percentages of principal amount of the Notes, which shall include
Additional Amounts) set forth below plus accrued and unpaid Interest on the
Notes to be redeemed, to (but excluding) the applicable Redemption Date, if
redeemed during the twelve-month period beginning on August 11 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:

                                  Page 5 of 12

<PAGE>

Year                                                                  Percentage
----                                                                  ----------
2010...............................................................    106.875%
2011...............................................................    104.579%
2012...............................................................    102.292%
2013 and thereafter................................................    100.000%

     Any optional redemption shall be made pursuant to the provisions of Section
3.03 and 3.04 of the Indenture. The Notes are not redeemable at the Company's
option notwithstanding anything in the Indenture or this Note to the contrary,
except pursuant to the foregoing provisions; provided that the Company may pay
any Additional Amounts at any time at par (including through a redemption
pursuant to Section 3.01 of the Indenture) whether or not a Mandatory Redemption
Termination Notice has become effective pursuant to Section 3.02(c). Prior to
the Transition Date any optional redemption described in this paragraph and any
mandatory redemption described in paragraph 6 below may be made by the Company
by providing written notice to the Holder or Holders (with a copy to the
Trustee) not less than two days in advance of such prepayment specifying the
Redemption Date and the principal amount of the Notes to be redeemed. Any such
redemption which is a partial redemption shall be made on a pro rata basis.

     6. Mandatory Redemption. Until the Mandatory Redemption Termination Notice
becomes effective, upon receipt of Take-Out Proceeds after the date of this
Indenture in an amount equal to or greater than $5.0 million, and on the day
preceding the Transition Date, the Company shall redeem the maximum principal
amount of Notes that may be redeemed with Take-Out Proceeds on deposit with the
Trustee at a redemption price in cash equal to 100% of the principal amount of
the Notes to be purchased plus accrued and unpaid Interest to the Redemption
Date but without premium, subject to the rights of Holders on the relevant
Record Date to receive interest on the relevant Interest Payment Date, in
accordance with the procedures set forth in Sections 3.03 and 3.04 of the
Indenture; provided that the Company shall not be required to redeem Notes
pursuant to this provision if, and only for so long as, and to the extent
restricted by a Redemption Restriction or after the day preceding the Transition
Date.

     At any time on or after May 13, 2005, the holders of not less than a
majority in aggregate principal amount of the Notes then outstanding may, by
delivery of a Mandatory Redemption Termination Notice elect to terminate the
Company's mandatory redemption obligations effective as of the Transition Date
(which date shall not be fewer than ninety (90) days nor more than one hundred
twenty (120) days from the date of delivery of such notice to the Company)
specified in such notice; provided, however, that (i) the right to deliver the
Mandatory Redemption Termination Notice shall terminate and cease to be of any
further force or effect in the event that the Initial Holder and its Affiliates
shall cease to hold at least a majority in aggregate principal amount of the
Notes then outstanding and (ii) a Mandatory Redemption Termination Notice may be
revoked at any time prior to the day immediately preceding the specified
Transition Date by further written notice to the Company (with a copy to the
Trustee) from the Holders that delivered the Mandatory Redemption Termination
Notice. A revoked Mandatory Redemption Termination Notice shall have no force or
effect and, upon revocation, the right to deliver the Mandatory Redemption
Termination Notice shall be reinstated on the 91st day following such revocation
(subject, nevertheless, to clause (i) of the foregoing proviso).

                                  Page 6 of 12

<PAGE>

     7. Notice of Redemption. Except as set forth in the final sentence of
paragraph 5, notice of redemption will be mailed at least 20 days but not more
than 40 days before the redemption date to each Holder whose Notes are to be
redeemed at its registered address. No Notes of $1,000 or less will be redeemed
in part; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if less than
$1,000, shall be redeemed. On and after the redemption date interest ceases to
accrue on Notes or portions thereof called for redemption, unless the Company
defaults in payment on the redemption date.

     8. Change of Control. If a Change of Control occurs at any time prior to
maturity of the Notes, this Note will be repurchased at the option of the holder
on the Repurchase Date specified by the Company in accordance with the Indenture
at a Repurchase Price equal to 100% of the principal amount thereof, together
with accrued and unpaid Interest to but excluding the Repurchase Date, subject
to the rights of Holders on the relevant Record Date to receive interest on the
relevant Interest Payment Date; provided that the Company shall not be required
to repurchase Notes if and for so long as such repurchase is restricted by a
Redemption Restriction. The Notes will be repurchased in multiples of $1,000
principal amount. The Company shall mail to all holders of record of the Notes a
notice of the occurrence of a Change of Control and of the repurchase right
arising as a result thereof on or before the 30th day after the occurrence of
such Change of Control. For a Note to be so repurchased at the option of the
holder, the Company must receive at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, such
Note with the form entitled "OPTION TO ELECT REPURCHASE UPON A CHANGE OF
CONTROL" on the reverse thereof duly completed, together with such Note, duly
endorsed for transfer, on or before the Repurchase Date. Holders have the right
to withdraw any such repurchase election by delivering to the Trustee (or other
Paying Agent appointed by the Company) a written notice of withdrawal up to the
close of business on the Business Day preceding the Repurchase Date, all as
provided in the Indenture. If cash sufficient to pay the Repurchase Price with
respect to all Notes or portions thereof to be repurchased as of the Repurchase
Date is deposited with the Trustee (or other Paying Agent appointed by the
Company) on the Business Day following the Repurchase Date, Interest will cease
to accrue on such Notes (or portions thereof) on and after the Repurchase Date
and the holder thereof shall have no other rights as such other than the right
to receive the Repurchase Price upon surrender of such Note.

     9. Subordination. The indebtedness evidenced by the Notes is, to the extent
and in the manner provided in the Indenture, expressly subordinated and subject
in right of payment to the prior payment in full in cash or Cash Equivalents of
all Senior and Senior Subordinated Indebtedness of the Company, whether
outstanding at the date of the Indenture or thereafter incurred, and this Note
is issued subject to the provisions of the Indenture with respect to such
subordination. Each holder of this Note, by accepting the same, agrees to and
shall be bound by such provisions and authorizes the Trustee on its behalf to
take such action as may be necessary or appropriate to effectuate the
subordination so provided and appoints the Trustee his attorney-in-fact for such
purpose.

     No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay

                                  Page 7 of 12

<PAGE>

the principal of and any premium and Interest on this Note at the place, at the
respective times, at the rate and in the coin or currency herein prescribed.

     10. Defaults and Remedies. Events of default include: (i) default in the
payment of any installment of Interest upon any of the Notes as and when the
same shall become due and payable within the periods specified; (ii) default in
the payment of the principal of or premium, if any, on any of the Notes as and
when the same shall become due and payable either at maturity or in connection
with any redemption, repurchase by acceleration or otherwise (other than due to
a Redemption Restriction); (iii) default in the Company's obligation to provide
notice of a Change of Control continued for a period of ten (10) days after the
date on which written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company; (iv) failure on the part of the
Company duly to observe or perform any other of the covenants or agreements on
the part of the Company in the Notes or in the Indenture continued for a period
of sixty (60) days after the date on which written notice of such failure,
requiring the Company to remedy the same, shall have been given to the Company;
or (v) certain events of bankruptcy or insolvency. In case an Event of Default
shall have occurred and be continuing other than under clause (v) above, the
principal of, premium, if any, and accrued interest on all Notes may be declared
by either the Trustee or the holders of not less than 25% in aggregate principal
amount of the Notes then outstanding, and upon said declaration shall become,
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture. In case an Event of Default shall have occurred and
be continuing under clause (v) above, the principal of, premium, if any, and
accrued interest on all Notes shall immediately become due and payable.

     11. Amendment, Supplement and Waiver. The Indenture contains provisions
permitting the Company and the Trustee, with the consent of the holders of at
least a majority in aggregate principal amount of the Notes at the time
outstanding, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
holders of the Notes; provided that no such supplemental indenture shall (i)
extend the fixed maturity of any Note, or reduce the rate or extend the time of
payment of Interest, or reduce the principal amount thereof or premium, if any,
thereon, or reduce any amount payable upon redemption or repurchase thereof, or
impair the right of any Noteholder to institute suit for the payment thereof, or
make the principal thereof or Interest or premium, if any, thereon payable in
any coin or currency other than that provided in the Notes, or change the
obligation of the Company to redeem any Note on a Redemption Date in a manner
adverse to the holders of Notes, or change the obligation of the Company to
repurchase any Note upon a Change of Control in a manner adverse to the holders
of the Notes, in each case without the consent of the holder of each Note so
affected, or modify any of the provisions of Section 11.02 or Section 7.07
thereof, except to increase any such percentage or to provide that certain other
provisions of the Indenture cannot be modified or waived without the consent of
the holder of each Note so affected, or reduce the quorum or voting requirements
set forth in Article 10 or (ii) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Notes then outstanding. Subject to the
provisions of the Indenture, the holders of a majority in aggregate principal
amount of the Notes at the time outstanding may on behalf of the holders of all
of the Notes waive any past default or Event of Default under the Indenture and
its consequences except (A) a default in the payment of Interest,

                                  Page 8 of 12

<PAGE>

or any premium on, or the principal of, any of the Notes, (B) a default in the
payment of the applicable redemption price pursuant to Article 3 of the
Indenture, (C) a default in the payment of the Repurchase Price pursuant to
Article 3 of the Indenture, or (D) a default in respect of a covenant or
provisions of the Indenture which under Article 11 of the Indenture cannot be
modified or amended without the consent of the holders of each or all Notes then
outstanding or affected thereby. Any such consent or waiver by the holder of
this Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of this Note and
any Notes which may be issued in exchange or substitution hereof, irrespective
of whether or not any notation thereof is made upon this Note or such other
Notes.

     12. Denomination, Transfer, Exchange. The Notes are issuable in fully
registered form, without coupons, in denominations of $1,000 principal amount
and any multiple of $1,000. Upon due presentment and surrender for registration
of transfer of this Note at the office or agency of the Company maintained for
that purpose in accordance with the terms of the Indenture, a new Note or Notes
of authorized denominations for an equal aggregate principal amount will be
issued to the transferee in exchange thereof, subject to the limitations
provided in the Indenture, without charge except for any tax, assessment or
other governmental charge imposed in connection therewith. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a Record
Date and the corresponding Interest Payment Date.

     13. Persons Deemed Owners. The Company, the Trustee, any authenticating
agent, any Paying Agent and any Registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Registrar) for the purpose of
receiving payment hereof, or on account hereof and for all other purposes, and
neither the Company nor the Trustee nor any other authenticating agent nor any
Paying Agent nor any Registrar shall be affected by any notice to the contrary.
All payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, satisfy and discharge liability for monies
payable on this Note.

     14. No Recourse Against Others. No recourse for the payment of the
principal of or any premium or Interest on this Note, or for any claim based
hereon or otherwise in respect hereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in the Indenture or any
supplemental indenture or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, officer or director or subsidiary, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released. This Note shall be deemed to be a contract made under the laws of
New York, and for all purposes shall be construed in accordance with the laws of
New York (including Section 5-1401 of the New York General Obligations Law or
any successor to such statute) without giving effect to the conflicts of laws
principles thereof (other than such Section 5-1401 or successor Statute).

                                  Page 9 of 12

<PAGE>

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

     16. Authentication. This Note will not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.

     17. Additional Rights of Holders of Restricted Notes. In addition to the
rights provided to Holders of Notes under the Indenture, Holders of Restricted
Notes will have all the rights set forth in the Exchange and Registration Rights
Agreement (Notes).

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

     19. Definitions. Terms used in this Note and defined in the Indenture are
used herein as therein defined.

                                  ABBREVIATIONS

     The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations.

     TEN COM - as tenants in common

     UNIF GIFT MIN ACT -     Custodian
                         ---           ---

     TEN ENT - as tenant by the entireties (Cust) (Minor)

     JT TEN - as joint tenants with right of under Uniform Gifts to Minors Act
survivorship and not as tenants                                    in common
                                ----------------------------------
(State)

     Additional abbreviations may also be used although not in the above list.

                                  Page 10 of 12

<PAGE>

                                 Assignment Form

     To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:
                                              ----------------------------------
                                                (Insert assignee's 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 Company. 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).

                                  Page 11 of 12

<PAGE>

                       Option of Holder to Elect Purchase

     If you want to elect to have this Note purchased by the Company pursuant to
Section 3.05 of the Indenture, check the appropriate box below:

                                 [ ]Section 3.05

     If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 3.05 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).

                                  Page 12 of 12<PAGE>

                                                                     Exhibit 4.8
                                                                  EXECUTION COPY
================================================================================

                              DYNEGY HOLDINGS INC.

                     and each of the Guarantors named herein

           SECOND PRIORITY SENIOR SECURED FLOATING RATE NOTES DUE 2008

              9.875% SECOND PRIORITY SENIOR SECURED NOTES DUE 2010

              10.125% SECOND PRIORITY SENIOR SECURED NOTES DUE 2013

                                    INDENTURE

                           Dated as of August 11, 2003

                                   ----------

                            Wilmington Trust Company,
                                   as Trustee

                                   ----------

                        Wells Fargo Bank Minnesota, N.A.,
                              as Collateral Trustee

                                   ----------

================================================================================

<PAGE>

                             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)(2).....................................................    7.06; 7.07
   (c)........................................................    7.06; 12.02
   (d)........................................................       7.06
314(a)........................................................  4.03;4.04; 14.05
   (c)(1).....................................................      14.04
   (c)(2).....................................................      14.04
   (c)(3).....................................................       N.A.
   (e)........................................................      14.05
   (f)........................................................       N.A.
315(a)........................................................       7.01
   (b)........................................................    7.05,14.02
   (c)........................................................       7.01
   (d)........................................................       7.01
   (e)........................................................       6.11
316(a) (last sentence)........................................       2.09
   (a)(1)(A)..................................................       6.05
   (a)(1)(B)..................................................       6.04
   (a)(2).....................................................       N.A.
   (b)........................................................       6.07
   (c)........................................................    6.10, 9.06
317(a)(1).....................................................       6.08
   (a)(2).....................................................       6.09
   (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.

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

                                   ARTICLE 1.
                          DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

Section 1.01   Definitions.....................................................1
Section 1.02   Other Definitions..............................................35
Section 1.03   Incorporation by Reference of Trust Indenture Act..............36
Section 1.04   Rules of Construction..........................................36

                                   ARTICLE 2.
                                   THE NOTES

Section 2.01   Form and Dating................................................37
Section 2.02   Execution and Authentication...................................38
Section 2.03   Registrar, Paying Agent and Calculation Agent..................38
Section 2.04   Paying Agent to Hold Money in Trust............................39
Section 2.05   Holder Lists...................................................39
Section 2.06   Transfer and Exchange..........................................39
Section 2.07   Replacement Notes..............................................49
Section 2.08   Outstanding Notes..............................................49
Section 2.09   Treasury Notes.................................................50
Section 2.10   Temporary Notes................................................50
Section 2.11   Cancellation...................................................50
Section 2.12   Defaulted Interest.............................................50
Section 2.13   CUSIP Numbers..................................................50

                                   ARTICLE 3.
                            REDEMPTION AND PREPAYMENT

Section 3.01   Notices to Trustee.............................................51
Section 3.02   Selection of Notes to Be Redeemed or Purchased.................51
Section 3.03   Notice of Redemption...........................................51
Section 3.04   Effect of Notice of Redemption.................................52
Section 3.05   Deposit of Redemption or Purchase Price........................52
Section 3.06   Notes Redeemed or Purchased in Part............................53
Section 3.07   Optional Redemption............................................53
Section 3.08   Mandatory Redemption...........................................55
Section 3.09   Offer to Purchase by Application of Excess Proceeds............55

                                   ARTICLE 4.
                                   COVENANTS

Section 4.01   Payment of Notes...............................................57
Section 4.02   Maintenance of Office or Agency................................57
Section 4.03   Reports........................................................58
Section 4.04   Compliance Certificate.........................................59
Section 4.05   Taxes..........................................................59
Section 4.06   Stay, Extension and Usury Laws.................................59
Section 4.07   Restricted Payments............................................60

                                       i

<PAGE>

Section 4.08   Dividend and Other Payment Restrictions Affecting
               Subsidiaries...................................................64
Section 4.09   Incurrence of Indebtedness and Issuance of Preferred
               Stock..........................................................66
Section 4.10   Asset Sales....................................................70
Section 4.11   Transactions with Affiliates...................................72
Section 4.12   Liens..........................................................74
Section 4.13   Business Activities............................................74
Section 4.14   Corporate Existence............................................74
Section 4.15   Offer to Repurchase Upon Change of Control.....................74
Section 4.16   Limitation on Sale and Leaseback Transactions..................76
Section 4.17   Additional Note Guarantees.....................................76
Section 4.18   Designation of Restricted and Unrestricted
               Subsidiaries...................................................76
Section 4.19   No Amendment to Subordination Provisions.......................76
Section 4.20   Payments for Consent...........................................77
Section 4.21   Changes in Covenants when Notes Rated Investment Grade.........77
Section 4.22   Further Assurances; Collateral Inspections and Reports;
               Costs and Indemnification......................................78

                                   ARTICLE 5.
                                   SUCCESSORS

Section 5.01   Merger, Consolidation, or Sale of Assets.......................79
Section 5.02   Successor Corporation Substituted..............................80

                                   ARTICLE 6.
                              DEFAULTS AND REMEDIES

Section 6.01   Events of Default..............................................81
Section 6.02   Acceleration...................................................82
Section 6.03   Other Remedies.................................................83
Section 6.04   Waiver of Past Defaults........................................83
Section 6.05   Control by Majority............................................83
Section 6.06   Limitation on Suits............................................83
Section 6.07   Rights of Holders of Notes to Receive Payment..................84
Section 6.08   Collection Suit by Trustee.....................................84
Section 6.09   Trustee May File Proofs of Claim...............................84
Section 6.10   Priorities.....................................................85
Section 6.11   Undertaking for Costs..........................................85

                                   ARTICLE 7.
                                    TRUSTEE

Section 7.01   Duties of Trustee..............................................85
Section 7.02   Rights of Trustee..............................................86
Section 7.03   Individual Rights of Trustee...................................87
Section 7.04   Trustee's Disclaimer...........................................87
Section 7.05   Notice of Defaults.............................................87
Section 7.06   Reports by Trustee to Holders of the Notes.....................87
Section 7.07   Compensation and Indemnity.....................................88
Section 7.08   Replacement of Trustee.........................................88
Section 7.09   Successor Trustee by Merger, etc...............................89
Section 7.10   Eligibility; Disqualification..................................89
Section 7.11   Preferential Collection of Claims Against Company..............90

                                       ii

<PAGE>

                                   ARTICLE 8.
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01   Option to Effect Legal Defeasance or Covenant Defeasance.......90
Section 8.02   Legal Defeasance and Discharge.................................90
Section 8.03   Covenant Defeasance............................................91
Section 8.04   Conditions to Legal or Covenant Defeasance.....................91
Section 8.05   Deposited Money and Government Securities to be Held
               in Trust; Other Miscellaneous Provisions.......................92
Section 8.06   Repayment to the Company.......................................93
Section 8.07   Reinstatement..................................................93

                                   ARTICLE 9.
                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01   Without Consent of Holders of Notes............................93
Section 9.02   With Consent of Holders of Notes...............................94
Section 9.03   Compliance with Trust Indenture Act............................96
Section 9.04   Revocation and Effect of Consents..............................96
Section 9.05   Notation on or Exchange of Notes...............................96
Section 9.06   Trustee to Sign Amendments, etc................................97

                                   ARTICLE 10.
                                 NOTE GUARANTEES

Section 10.01  Guarantee......................................................97
Section 10.02  Limitation on Guarantor Liability..............................98
Section 10.03  Execution and Delivery of Note Guarantee.......................98
Section 10.04  Guarantors May Consolidate, etc., on Certain Terms.............99
Section 10.05  Releases of Guarantees.........................................99

                                   ARTICLE 11.
                              RANKING OF NOTE LIENS

Section 11.01  Agreement for the Benefit of Holders of Priority
               and Parity Liens..............................................100
Section 11.02  Lien Sharing with Parity Liens................................101
Section 11.03  Amendment; Waiver.............................................103
Section 11.04  Notes, Note Guarantees and other Note Obligations
               not Subordinated..............................................103
Section 11.05  NGL Assets....................................................103

                                   ARTICLE 12.
                             COLLATERAL AND SECURITY

Section 12.01  Security Documents............................................104
Section 12.02  Collateral Trustee............................................104
Section 12.03  Authorization of Actions to Be Taken..........................105
Section 12.04  Release of Note Liens.........................................106
Section 12.05  Filing, Recording and Opinions................................107
Section 12.06  Compensation and Indemnity....................................108

                                   ARTICLE 13.
                           SATISFACTION AND DISCHARGE

Section 13.01  Satisfaction and Discharge....................................109

                                      iii

<PAGE>

Section 13.02  Application of Trust Money....................................110

                                   ARTICLE 14.
                                  MISCELLANEOUS

Section 14.01  Trust Indenture Act Controls..................................110
Section 14.02  Notices.......................................................110
Section 14.03  Communication by Holders of Notes with Other Holders
               of Notes......................................................111
Section 14.04  Certificate and Opinion as to Conditions Precedent............112
Section 14.05  Statements Required in Certificate or Opinion.................112
Section 14.06  Rules by Trustee and Agents...................................112
Section 14.07  No Personal Liability of Directors, Officers, Employees
               and Stockholders..............................................112
Section 14.08  Governing Law.................................................113
Section 14.09  No Adverse Interpretation of Other Agreements.................113
Section 14.10  Successors....................................................113
Section 14.11  Severability..................................................113
Section 14.12  Counterpart Originals.........................................113
Section 14.13  Table of Contents, Headings, etc..............................113

                                    SCHEDULES

Schedule I   Guarantors
Schedule II  Mortgages
                                    EXHIBITS

Exhibit A1   FORM OF SERIES A NOTE
Exhibit A2   FORM OF SERIES B NOTE
Exhibit A3   FORM OF SERIES C NOTE
Exhibit B    FORM OF CERTIFICATE OF TRANSFER
Exhibit C    FORM OF CERTIFICATE OF EXCHANGE
Exhibit D    FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E    FORM OF NOTE GUARANTEE
Exhibit F    FORM OF SUPPLEMENTAL INDENTURE

                                       iv

<PAGE>

     INDENTURE dated as of August 11, 2003 among Dynegy Holdings Inc., a
Delaware corporation, the Guarantors (as defined), Wilmington Trust Company, as
trustee (the "Trustee") and Wells Fargo Bank Minnesota, N.A., as collateral
trustee (the "Collateral Trustee").

     The Company , the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the Second Priority Senior Secured Floating Rate Notes due 2008 (the
"Series A Notes"), the 9.875% Second Priority Senior Secured Notes due 2010 (the
"Series B Notes") and the 10.125% Second Priority Senior Secured Notes due 2013
(the "Series C Notes" and, together with the Series A Notes and the Series B
Notes, 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 the
applicable 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 shall be issued in a denomination equal
to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

     "ACH Obligations" means any and all obligations of the Company or any of
its Subsidiaries owing to any lender under the Credit Agreement or any Affiliate
of any lender under the Credit Agreement under any treasury management services
agreement, any service terms or any service agreements, including electronic
payments service terms and/or automated clearing house agreements, and all
overdrafts on any account which the Company or any of its Subsidiaries maintains
with any lender under the Credit Agreement or any Affiliate of any lender under
the Credit Agreement.

     "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.

     "Additional Notes" means an unlimited aggregate principal amount of Notes
(other than the Initial Notes) of any series issued under this Indenture in
accordance with Sections 2.02 and 4.09 hereof, as part of the same series, as
the case may be, as the Initial Notes.

     "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
indirectly, 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 beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.

     "Affiliate Guarantors" means:

                                        1

<PAGE>

          (1)  Dynegy and BG Holdings, Inc., as the direct parent entities of
     the Company; and

          (2)  Illinova and the following of its Restricted Subsidiaries:
     Illinova Energy Partners, Inc.; Illinova Generating Company; IGC Grimes
     County, Inc.; IGC Grimes Frontier, Inc.; IPG Ferndale, Inc.; IPG Paris,
     Inc.; and Charter Oak (Paris), Inc., in each case, as Affiliates of the
     Company, and their respective successors and assigns.

     "Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.

     "Alpha Facility" means that certain Amended and Restated Performance
Agreement, effective as of March 27, 2001 (as amended and in effect from time to
time, the "Alpha Guaranty"), entered into by the Company in favor of ABG Gas
Supply, L.L.C. pursuant to which the Company guaranteed the obligations of (1)
DMT Supply LP under that certain Amended and Restated Natural Gas Purchase
Agreement dated as of March 27, 2001 and (2) Dynegy Marketing & Trade under that
certain Nomination Agreement dated as of March 27, 2001 each as amended,
related, modified, renewed, refunded, replaced (whether upon or after
termination or otherwise) or refinanced (including by means of sales of debt
securities to investors) in whole or in part from time to time (the Alpha
Guaranty and the documents referred to in clauses (1) and (2) are collectively
referred to as the "Alpha Facility").

     "Applicable Eurodollar Rate" means, for each quarterly period during which
any Series A Note is outstanding subsequent to the initial quarterly period, 650
basis points over the rate determined by the Company (notice of such rate to be
sent to the Trustee by the Company on the date of determination thereof), equal
to the British Bankers' Association LIBOR rate for deposits in U.S. dollars for
a period of three months as reported by any generally recognized financial
information services as of 11:00 a.m. (London time) two Business Days
immediately prior to the first day of such quarterly period; provided that, if
no British Bankers' Association LIBOR rate is available to the Company, the
Applicable Eurodollar Rate for the relevant quarterly period shall instead be
the rate at which Credit Suisse First Boston LLC or one of its affiliate banks
offers to place deposits in U.S. dollars with first-class banks in the London
interbank market for a period of three months at approximately 11:00 a.m.
(London time) two Business Days immediately prior to the first day of such
quarterly period, in amounts equal to $1.0 million. The quarterly periods
referred to in this definition shall commence on January 15, April 15, July 15
and October 15 of each year; provided that the Applicable Eurodollar Rate for
the initial quarterly period commencing upon original issuance of the Series A
Notes shall be determined pursuant to this definition on the date that is two
Business Days immediately prior to the date of this Indenture. Notwithstanding
the foregoing, the Company may delegate the determination of the Applicable
Eurodollar Rate to any Calculation Agent pursuant to Section 2.03 hereof.

     "Applicable Premium for Series A Notes" means, with respect to any Series A
Note on any redemption date, the greater of:

          (1)  1.0% of the principal amount of the Note; or

          (2)  the excess of:

     (a)  the present value at such redemption date of (i) the redemption price
of the Note at July 15, 2006 set forth in Section 3.07(a)(3) plus (ii) all
required interest payments due on the Note through July 15, 2006 based on the
Applicable Eurodollar Rate then in effect, (excluding accrued but unpaid
interest to the redemption date) computed using a discount rate equal to the
Treasury Rate as of such redemption date plus 50 basis points; over

     (b)  the principal amount of the Note, if greater.

                                        2

<PAGE>

     "Applicable Premium for Series B Notes" means, with respect to any Series B
Note on any redemption date, the greater of:

          (1)  1.0% of the principal amount of the Note; or

          (2)  the excess of:

     (a)  the present value at such redemption date of (i) the redemption price
of the Note at July 15, 2007 set forth in Section 3.07(b)(3) plus (ii) all
required interest payments due on the Note through July 15, 2007 (excluding
accrued but unpaid interest to the redemption date) computed using a discount
rate equal to the Treasury Rate as of such redemption date plus 50 basis points;
over

     (b)  the principal amount of the note, if greater.

     "Applicable Premium for Series C Notes" means, with respect to any Series C
Note on any redemption date, the greater of:

          (1)  1.0% of the principal amount of the Note; or

          (2)  the excess of:

     (a)  the present value at such redemption date of (i) the redemption price
of the Note at July 15, 2008 set forth in Section 3.07 (c)(3) plus (ii) all
required interest payments due on the Note through July 15, 2008 (excluding
accrued but unpaid interest to the redemption date) computed using a discount
rate equal to the Treasury Rate as of such redemption date plus 50 basis points;
over

     (b)  the principal amount of the Note, if greater.

     "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, Euroclear and Clearstream that apply to such transfer or exchange.

     "Asset Sale" means:

          (1)  the sale, lease, conveyance or other disposition of any assets or
     rights; provided that the sale, conveyance or other disposition of all or
     substantially all of the assets of the Company and its Restricted
     Subsidiaries taken as a whole shall be governed by Section 4.15 and/or
     Section 5.01 hereof; and

          (2)  the issuance of Equity Interests in any of the Company's
     Restricted Subsidiaries or the sale of Equity Interests in any of its
     Subsidiaries.

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

          (1)  any single transaction or series of related transactions that
     involves assets having a Fair Market Value of less than $20.0 million;

          (2)  a transfer of assets between or among the Company and any of its
     Restricted Subsidiaries,

                                        3

<PAGE>

          (3)  an issuance of Equity Interests by a Restricted Subsidiary of the
     Company to the Company or to a Restricted Subsidiary of the Company
     (including any Person that becomes a Restricted Subsidiary of the Company
     in connection with such transaction);

          (4)  (a) the sale or lease of products, services or accounts
     receivable in the ordinary course of business, (b) any sale or other
     disposition of surplus, damaged, worn-out or obsolete assets or property
     (including, without limitation, inventory, immaterial assets and property
     no longer commercially viable to maintain and operate) in the ordinary
     course of business and (c) the granting of any option or other right to
     purchase, or otherwise acquire property in the ordinary course of business;

          (5)  the sale or disposition by Dynegy and its Restricted Subsidiaries
     of assets in connection with (a) the termination, amendment or
     restructuring of any tolling agreement and (b) dispositions of property in
     connection with settlement of any Litigation, in the case of both clause
     (a) and (b), for reasonably equivalent value, as determined by Dynegy or
     such Restricted Subsidiary;

          (6)  the sale or disposition by Dynegy and its Restricted Subsidiaries
     of assets in connection with any Discontinued Business Operations of Dynegy
     and its Restricted Subsidiaries so long as such disposition is for
     reasonably equivalent value, as determined by Dynegy or such Restricted
     Subsidiary;

          (7)  sales or dispositions resulting from the bona fide exercise by a
     governmental authority of its claimed or actual power of eminent domain or
     dispositions otherwise required by applicable law that would not materially
     adversely effect Dynegy and its Restricted Subsidiaries, taken as a whole;

          (8)  dispositions of property subject to a Permitted Lien that is
     transferred to the lienholder or its designee in satisfaction or settlement
     of such lienholder's claim or a realization upon any Lien permitted
     pursuant to this Indenture;

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

          (10) a Restricted Payment that does not violate Section 4.07 hereof or
     a Permitted Investment.

     "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 remaining 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 shall be determined
in accordance with the definition of "Capital Lease Obligation."

     "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, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial

                                        4

<PAGE>

ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only after the passage of time. 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 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 Company's Board
of Directors, a copy of which, certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Company's Board of
Directors and to be in full force and effect on the date of such certification,
shall have been delivered to the Trustee.

     "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

          (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) that is being held by the Collateral Trustee or such agent
for the benefit of the holders of Secured Debt.

     "Cash Equivalents" means:

                                        5

<PAGE>

          (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)  certificates of deposit, demand deposits, and eurodollar time
     deposits with maturities of one year or less from the date of acquisition,
     bankers' acceptances with maturities not exceeding one year and overnight
     bank deposits, in each case, with any lender party to the Credit Agreement
     or with any domestic commercial bank having capital and surplus in excess
     of $500.0 million and a Thomson Bank Watch Rating of "B" or better;

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

          (5)  commercial paper having one of the two highest ratings obtainable
     from Moody's Investors Service, Inc. or Standard & Poor's Rating Services
     and in each case maturing within one year after the date of acquisition;
     and

          (6)  money market funds at least 95% of the assets of which constitute
     Cash Equivalents of the kinds described in clauses (1) through (5) of this
     definition.

     "Clearstream" means Clearstream Banking, S.A.

     "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 Dynegy and its Restricted Subsidiaries, taken as a
     whole, to any "person" (as that term is used in Section 13(d) of the
     Exchange Act) other than Chevron or a Related Party of Chevron;

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

          (3)  the consummation of any transaction (including, without
     limitation, any merger or consolidation) the result of which is that any
     "person" (as defined above), other than Chevron and its Related Parties,
     becomes the Beneficial Owner, directly or indirectly, of more than 50% of
     the Voting Stock of Dynegy, measured by voting power rather than number of
     shares;

          (4)  Dynegy consolidates with, or merges with or into, any Person
     other than Chevron or a Related Party of Chevron, or any Person other than
     Chevron or a Related Party of Chevron consolidates with, or merges with or
     into, Dynegy, in any such event pursuant to a transaction in

                                        6

<PAGE>

     which any of the outstanding Voting Stock of Dynegy or such other Person
     other than Chevron or a Related Party of Chevron is converted into or
     exchanged for cash, securities or other property, other than any such
     transaction where the Voting Stock of Dynegy outstanding immediately prior
     to such transaction is converted into or exchanged for Voting Stock (other
     than Disqualified Stock) of the surviving or transferee Person constituting
     a majority of the outstanding shares of such Voting Stock of such surviving
     or transferee Person (immediately after giving effect to such issuance); or

          (5)  the first day on which Dynegy ceases to own, directly or
     indirectly, 100% of the outstanding Equity Interests of the Company.

     "Chevron" means Chevron U.S.A., Inc., a Pennsylvania corporation.

     "CoGen Lyondell Facility" means that certain Participation Agreement, dated
August 7, 2000, among CoGen Lyondell, Inc. as the lessee, the Company, as
guarantor, Operating Lessor Limited Company, as the lessor, Four Winds Funding
Corp., as tranche A lender, tranche B lender and conduit, the certificate
holders and the liquidity banks party thereto, and Commerzbank AG, New York
Branch, as administrative agent and lease arranger, together with the operative
documents referred to therein, as amended, restated, modified, renewed,
refunded, replaced (whether upon or after termination or otherwise) or
refinanced (including by means of sales of debt securities to investors) in
whole or in part from time to time.

     "Collateral" has the meaning assigned to it in the Security Documents.

     "Collateral Trustee" means (i) the party named as such in the preamble to
this Indenture until a successor replaces it in accordance with Article 12 of
this Indenture and thereafter means the successor serving hereunder, in such
Person's capacity as the holder of Liens granted to it pursuant to the Security
Documents and any successor in such capacity and (ii) after transfer of the Note
Liens to the Joint Collateral Agent pursuant to Section 12.02, the Joint
Collateral Agent.

     "Company" means Dynegy Holdings Inc. and any and all successors thereto.

     "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 (a) an Asset Sale, (b) the disposition of any securities by such
     Person or any of its Restricted Subsidiaries or (c) the extinguishment of
     any Indebtedness of such Person or any of its Restricted Subsidiaries, in
     each case 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, amortization (including amortization of intangibles
     but excluding amortization of prepaid cash expenses that were paid in a
     prior period) and other non-cash

                                       7

<PAGE>

     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
     or amortization of a prepaid cash expense that was paid in a prior 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)  charges associated with fees and expenses, including professional
     fees, incurred prior to the date of this Indenture in connection with the
     modification or preparation in connection therewith of Indebtedness of the
     Company that occurred prior to the date of this Indenture, to the extent
     such charges were deducted in computing Consolidated Net Income; plus

          (6)  the upfront costs of any Hedging Obligations paid prior to the
     date of this Indenture, to the extent such costs were deducted in computing
     Consolidated Net Income; minus

          (7)  non-cash items (including, without limitation, the gains realized
     upon the repurchase and retirement of any Indebtedness of such Person or
     any of its Restricted Subsidiaries), increasing such Consolidated Net
     Income for such period, other than an accrual of revenue or the reversal of
     an accrued expense, in each case in the ordinary course of business;

in each case, on a consolidated basis and determined in accordance with GAAP.

     "Consolidated Net Assets" means total assets minus total liabilities, in
each case as reported on the consolidated balance sheet of the Company prepared
in accordance with GAAP for the most recent fiscal quarter for which financial
statements are publicly available.

     "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 (but not loss) of any Person that is not a
     Restricted Subsidiary or that is accounted for by the equity method of
     accounting shall be included only to the extent of the amount of dividends
     or similar distributions (including intercompany payments) paid in cash to
     the specified Person or a Restricted Subsidiary of the Person;

          (2)  the Net Income of any Restricted Subsidiary shall 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; provided that Net Income shall
     not be excluded pursuant to this clause (2) solely by reason of a
     restriction contained in any of the Subsidiary Facilities as the same are
     in effect on the date of this Indenture;

          (3)  the cumulative effect of a change in accounting principles shall
     be excluded;

          (4)  cash received or paid during such period related to
     mark-to-market activities shall be included, but all non-cash
     mark-to-market earnings or losses shall be excluded; and

          (5)  any losses realized by the Company or any of its Restricted
     Subsidiaries resulting from the settlement of any tolling and related
     agreements to which the Company or any of its Restricted Subsidiaries is a
     party as of the date of this Indenture shall be excluded, and the losses

                                        8

<PAGE>

     or gains recognized with respect to settled tolling and related agreements
     during the twelve-month period immediately preceding the settlement of such
     tolling and related agreements also shall be excluded; provided that with
     respect to any tolling and related agreements accounted for by using
     mark-to-market, losses and gains shall be measured in terms of cash paid or
     received pursuant to clause (4) of this definition.

     "Convertible Debentures" means up to $225.0 million in aggregate principal
amount of the 4.75% Convertible Subordinated Debentures due 2023 of Dynegy that
may be issued concurrently with, or within 30 days following, the issuance of
the Initial Notes.

     "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 Company.

     "Credit Agreement" means that certain Credit Agreement, dated as of April
1, 2003, by and among the Company, as Borrower, Dynegy, as Parent Guarantor, the
other guarantors thereunder and Citibank, N.A. and Bank of America, N.A., as
Administrative Agents and the other lenders thereunder, providing for up to
$1,100.0 million of revolving credit, $200.0 million of Term A Loan borrowings
(all of which shall be repaid with the net proceeds of the Initial Notes), and
$360.0 million of Term B Loan borrowings (all or a portion of which may be
repaid with the net proceeds of the Initial Notes), including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, restated, modified, renewed,
refunded, replaced (whether upon or after termination or otherwise) or
refinanced (including by means of sales of debt securities to investors) in
whole or in part from time to time.

     "Credit Agreement Agent" means at any time, the Person serving at such time
as the "Agent" or "Administrative Agent" under the Credit Agreement or any other
representative of the lenders then most recently designated by a majority of the
lenders, in a written notice delivered to the Trustee and the Collateral
Trustee, as the Credit Agreement Agent for the purposes of this Indenture.

     "Credit Facilities" means one or more debt facilities (including, without
limitation, the Credit Agreement), commercial paper facilities, margin account
facilities or overdraft facilities, in each case with banks or other lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables), lines of
credit, margin accounts, overdraft lines or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced, restructured or
refinanced (including increasing the amount of available borrowings thereunder
and also including by means of sales of debt securities to investors) in whole
or in part from time to time.

     "CUSIP" means a security identification number applicable to any of the
Global Notes (or beneficial interests therein) that identifies the series of
such Notes (including any subdivisions thereof in recognition of restrictions
that may be applicable to such Notes), determined in accordance with numbering
system established by the Committee on Uniform Security Identification
Procedures and as administered by S&P.

     "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.

                                        9

<PAGE>

     "Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, substantially
in the form of the applicable 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.

     "Discharge of Parity Lien Debt" means termination of all commitments to
extend credit or purchase debt securities that would constitute Parity Lien Debt
and payment in full in cash of the principal of and interest and premium (if
any) on all Parity Lien Debt and all other Parity Lien Obligations that are due
and payable at the time the Parity Lien Debt is paid in full in cash.

     "Discontinued Business Operations" means, with respect to any Person, the
results of operations and any charges, fees, penalties, costs or impairments
associated with (a) lines of business or assets that were wound down,
discontinued or disposed of, or were under contract to be disposed of by such
Person or any of its Subsidiaries, including (to the extent applicable to such
Person) those associated with Dynegy Global Liquids, Inc., Northern Natural Gas
Company, NNGC Holding Company, Inc., MCTJ Holding Co. LLC, Dynegy Onshore
Processing UK Limited, Dynegy Storage Limited, Dynegy Offshore UK Limited,
Dynegy Canada Gas Marketing Ltd. and Dynegy Global Communications, Inc. and
their respective Subsidiaries, (b) lines of business or assets that are wound
down, discontinued or disposed of in connection with the customer risk
management business segment, third party risk management transactions or those
(to the extent applicable to such Person) associated with Dynegy Global
Communications and its respective Subsidiaries or (c) any tolling agreement,
including the termination, disposal or restructuring thereof.

     "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
issuer thereof to repurchase such Capital Stock upon the occurrence of a change
of control or an asset sale shall not constitute Disqualified Stock if the terms
of such Capital Stock provide that the issuer thereof may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless either (1) such
repurchase or redemption complies with Section 4.07 hereof or (2) the issuer of
such Capital Stock, to the extent required, has first complied with Section 4.10
hereof or Section 4.15 hereof. The amount of Disqualified Stock deemed to be
outstanding at any time for purposes of this Indenture shall be the maximum
amount that the Company and its 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.

     "DNE Guarantees" means (a) the Guaranty dated as of May 1, 2001 made by the
Company in respect of certain obligations of Dynegy Danskammer, L.L.C. and (b)
the Guaranty dated as of May 1, 2001 made by the Company in respect of certain
obligations of Dynegy Roseton, L.L.C.

                                       10

<PAGE>

     "Domestic Subsidiary" means any Subsidiary of any Person 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 other Indebtedness of such Person.

     "DYN Notes" means $225.0 million in aggregate principal amount of Dynegy's
Junior Subordinated Notes due 2016 together with any additional DYN Notes issued
from time to time as payable-in-kind interest thereon.

     "DYN Preferred" means Dynegy's Series C Convertible Preferred Stock issued
in connection with the Series B Restructuring Transaction, substantially on the
terms set forth in the Exchange Agreement dated July 28, 2003 between Dynegy and
Chevron, as amended, modified or replaced on terms no less favorable to the
Holders of the Notes.

     "Dynegy" means Dynegy Inc., an Illinois corporation, together with its
successors and permitted assigns hereunder, which owns, directly or indirectly,
100% of the Capital Stock of each of the Company and Illinova.

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

     "Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear
system.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Excluded Assets" means:

          (1)  any Collateral constituting property that is the subject of or
     relating to any contract, agreement or other document to which any
     Guarantor is a party on the date of this Indenture or any similar contract,
     agreement or other document entered into by such Guarantor after the date
     of this Indenture shall, in each case, be excluded from the Lien created by
     such Guarantor under the Security Documents to the extent (but only to the
     extent) that the assignment thereof, or the creation of a Lien thereon,
     would constitute a breach of the terms of such contract, agreement or other
     document, or would cause a default or event of default under the terms of
     such contract, agreement or other document, or would permit any party to
     such contract, agreement or other document to terminate any material
     contract right arising under any such contract agreement or other document
     or to exercise any put, call, right of refusal, purchase option or other
     similar right, or would permit any party to such contract, agreement or
     other document to terminate such contract, agreement or other document;
     provided, however, that any such Collateral shall automatically cease to be
     excluded at such time as (x) the prohibition of assignment or of the
     creation of a Lien with respect to such Collateral is no longer in effect
     or is rendered ineffective as a matter of law or (y) the applicable
     Guarantor has obtained the consent of the other parties to such agreement
     to the assignment of, or creation of a Lien with respect to, such
     Collateral (which consent such Guarantor shall not be required to obtain
     hereunder, except upon a request of the Collateral Trustee after the
     occurrence and during the continuance of an event of default under this
     Indenture) or (z) the breach, default, event of default or any other
     conditions otherwise giving rise to the exclusion of such property under
     this clause (1) shall cease to exist;

          (2)  any contract, agreement or other document (and any contract
     rights arising thereunder) to which any of the Guarantors is a party on the
     date of this Indenture and any similar contract or agreement entered into
     by any Guarantor after the date of this Indenture, in each case, shall be
     excluded from the Lien granted by such Guarantor under the Security
     Documents to the

                                       11

<PAGE>

     extent (but only to the extent) that the assignment thereof, or the
     creation of a Lien thereon, would constitute a breach of the terms of such
     contract, agreement or other document to which any of the Guarantors may
     now or hereafter be a party or to which any Guarantor may now or hereafter
     be subject, or would cause a default or event of default under the terms of
     such contract, agreement or other document, or would permit any party to
     such contract, agreement or other document to terminate any material
     contract right arising under any such contract agreement or other document
     or to exercise any put, call, right of refusal, purchase option or other
     similar right, or would permit any party to such contract, agreement or
     other document to terminate such contract, agreement or other document (all
     such contracts, agreements and other documents being the "Excluded
     Agreements"); provided, however, that (x) except as set forth in clause (4)
     below, the exclusion from the Lien granted by such Guarantor hereunder of
     any contract rights of any of the Guarantors under one or more of the
     Excluded Agreements shall not limit, restrict or impair the grant by such
     Guarantor of the Lien on any accounts or receivables arising under any such
     Excluded Agreement or any payments due or to become due thereunder, and (y)
     any of the Excluded Agreements shall automatically cease to be excluded at
     such time as, (A) the prohibition of assignment or of the creation of a
     Lien with respect to such agreement is no longer in effect or is rendered
     ineffective as a matter of law or (B) the applicable Guarantor has obtained
     the consent of the other parties to such agreement to the assignment of, or
     creation of a Lien with respect to, the contract rights of such Guarantor
     thereunder (which consent such Guarantor shall not be required to obtain
     hereunder, except upon a request of the Collateral Trustee after the
     occurrence and during the continuance of an event of default under this
     Indenture);

          (3)  any license, permit or authorization from any governmental
     authority in favor of any Guarantor shall be excluded from the Lien granted
     by such Guarantor under the Security Documents to the extent (but only to
     the extent) that the assignment thereof or the creation of a Lien thereon
     would constitute a breach of or a default or event of default under the
     terms of such license, permit or authorization or would require any
     separate license, permit or authorization or would otherwise terminate such
     license, permit or authorization (all of the licenses, permits and
     authorizations referred to herein being the "Excluded Authorizations");
     provided, however, that any of the Excluded Authorizations shall cease to
     be excluded at such time as (x) the prohibition of assignment or of the
     creation of a Lien with respect to such license, permit or authorization is
     no longer in effect or is rendered ineffective as a matter of law or (y)
     the applicable Guarantor has obtained the consent of the applicable
     governmental authority to the assignment of, or creation of a Lien with
     respect to, such license, permit or authorization of such Guarantor (which
     consent such Guarantor shall not be required to obtain hereunder, except
     upon a request of the Collateral Trustee after the occurrence and during
     the continuance of an Event of Default under this Indenture);

          (4)  any Permitted Collateral of any Guarantor from time to time
     pledged, assigned, conveyed or transferred, or against which any right of
     set-off is granted or in which a Lien is granted, by such Guarantor under
     any Permitted Contracts or Netting Agreements shall be excluded from the
     Lien granted by such Guarantor under the Security Documents; to the extent
     any such Lien is deemed to be granted pursuant to this Agreement in such
     Permitted Collateral hereunder notwithstanding the exclusion contemplated
     hereby, such Lien shall ipso facto immediately and automatically terminate,
     without any further action by any Person, upon any such pledge, assignment,
     conveyance, transfer, grant of such right of set-off or grant of such Lien,
     provided, however, that any such Permitted Collateral shall cease to be
     excluded at such time as (x) the Permitted Contracts or Netting Agreements,
     as the case may be, related thereto is terminated and the setoff rights,
     Lien granted in such Permitted Collateral are terminated or (y) the
     applicable Guarantor has obtained the consent of the applicable
     counterparty to such Permitted Contracts or Netting Agreements to the
     assignment of, or creation of a Lien in such

                                       12

<PAGE>

     Permitted Collateral hereunder (which consent such Guarantor shall not be
     required to obtain hereunder, except upon a request of the Collateral
     Trustees after the occurrence and during the continuance of an Event of
     Default under this Indenture);

          (5)  as to each Guarantor, any outstanding voting stock of any entity
     that is a controlled foreign corporation under Section 957 of the Internal
     Revenue Code (or any successor provision thereto), except for voting stock
     consisting of no more than 66% of the outstanding voting stock of such
     entity ("Excluded Equity");

          (6)  any property or accounts (including without limitation, coal,
     power, energy, other energy related products, natural gas, natural gas
     liquids, condensate, and sulfur, and including any other products resulting
     from generating, gas gathering, processing, fractionating and refining,
     marketed by any Guarantor on behalf of third parties and the proceeds
     derived therefrom pursuant to processing agreements and/or marketing
     arrangements), to the extent (but only to the extent) that any Guarantor
     manages, maintains or markets such property on behalf of a third party,
     including, without limitation, any Collateral maintained, managed or
     marketed by any Guarantor for a joint venture in which third parties
     participate or on behalf of third parties;

          (7)  any policy of insurance, provided, however, that proceeds of
     insurance shall be included as Collateral to the extent the Lien granted
     hereby in the goods covered by such insurance would continue in accordance
     with Section 9-315 of the UCC; and

          (8)  the shares of Capital Stock or such other Equity Interests of (a)
     Illinois Power and Dynegy Global Communications, Inc. and their respective
     subsidiaries, (b) non-Domestic Subsidiaries and Immaterial Subsidiaries and
     (c) Subsidiaries whose ownership interests may not be pledged due to
     existing contractual or legal restrictions;

provided, however, that any proceeds received by any Guarantor from the sale,
transfer or other disposition of Excluded Assets, Excluded Authorizations,
Excluded Agreements, Excluded Equity and any other property excluded under
clauses (1) through (8) above shall constitute Collateral unless any assets or
property constituting such proceeds are themselves subject to the exclusions set
forth in clauses (1) through (8) above.

     "Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement and the
Subsidiary Facilities) in existence on the date of this Indenture, until such
amounts are repaid (other than repayment in connection with the incurrence of
Permitted Refinancing Indebtedness with respect thereto).

     "Fair Market Value" means the value that would be paid by a willing buyer
to an unaffiliated willing seller in a transaction not involving distress or
necessity of either party, determined in good faith by the chief financial
officer or Board of Directors of the Person required to make such determination
(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

                                       13

<PAGE>

Coverage Ratio shall 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 shall be given pro forma effect (in accordance with
     Regulation S-X under the Securities Act) as if they had occurred on the
     first day of the four-quarter reference period and Consolidated Cash Flow
     for such reference period shall 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, shall 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,
     shall be excluded, but only to the extent that the obligations giving rise
     to such Fixed Charges shall not be obligations of the specified Person or
     any of its Restricted Subsidiaries following the Calculation Date;

          (4)  any Person that is a Restricted Subsidiary on the Calculation
     Date shall be deemed to have been a Restricted Subsidiary at all times
     during such four-quarter period;

          (5)  any Person that is not a Restricted Subsidiary on the Calculation
     Date shall be deemed not to have been a Restricted Subsidiary at any time
     during such four-quarter period; and

          (6)  if any Indebtedness bears a floating rate of interest, the
     interest expense on such Indebtedness shall 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 Obligation applicable to such
     Indebtedness if such Hedging Obligation has a remaining term as at the
     Calculation Date in excess of 12 months).

For purposes of this definition, whenever pro forma effect is to be given to an
acquisition or investment, the amount of income or earnings relating thereto and
the amount of Fixed Charges associated with any Indebtedness incurred in
connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting Officer of the Company. Any such
pro forma calculations may include operating expense reductions for such period
resulting from the acquisition which is being given pro forma effect that would
be permitted pursuant to Article 11 of Regulation S-X under the Securities Act.

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

          (1)  the consolidated interest expense of such Person and its
     Restricted Subsidiaries for such period, whether paid or accrued,
     including, without limitation, amortization of debt issuance

                                       14

<PAGE>

     costs (but excluding (a) amortization of debt issuance costs related to
     Indebtedness and (b) charges associated with fees and expenses, including
     professional fees, in connection with the modification of any Indebtedness
     of the Company or any of its Restricted Subsidiaries, in each case incurred
     on or prior to the date of this Indenture) and original issue discount,
     non-cash interest payments, the interest component of any deferred payment
     obligations, the interest component of all payments associated with Capital
     Lease Obligations, commissions, discounts and other fees and charges
     incurred in respect of letter of credit or bankers' acceptance financings,
     and net of the effect of all payments made or received pursuant to Hedging
     Obligations in respect of interest rates; 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 another Person that is
     Guaranteed by such Person or one of its Restricted Subsidiaries or secured
     by a Lien on assets of such Person or one of its Restricted Subsidiaries,
     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 Company (other than
     Disqualified Stock) or to the Company or a Restricted Subsidiary of the
     Company, times (B) (x) in the case of trust preferred dividend payments,
     one and (y) in the case of all other preferred dividend payments, 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; minus

          (5)  the upfront costs of any Hedging Obligations paid prior to the
     date of this Indenture.

     "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.

     "Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, substantially in the form of the
applicable Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4) or 2.06(d)(2) hereof.

     "Global Note Legend" means the legend set forth in Section 2.06(g)(2),
which is required to be placed on all Global Notes issued under this Indenture.

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

     "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).

                                       15

<PAGE>

     "Guarantors" means the Subsidiary Guarantors and the Affiliate Guarantors.

     "Hedging Obligations" means, with respect to any specified Person, the
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
     rates or 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 a Person in whose name a Note is registered.

     "IAI Global Note" means a Global Note substantially in the form of the
applicable 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 shall be issued in a denomination equal to
the outstanding principal amount of the Notes sold or resold to Institutional
Accredited Investors.

     "Illinois Power" means Illinois Power Company, an Illinois corporation and
wholly-owned Subsidiary of Illinova, together with its successors and permitted
assigns hereunder.

     "Illinova" means Illinova Corporation, an Illinois corporation and
wholly-owned Subsidiary of Dynegy, together with its successors and permitted
assigns hereunder.

     "Illinova Asset Sale" means an Asset Sale of the Capital Stock of, or all
or substantially all of the assets of, Illinova or Illinois Power.

     "Illinova Senior Notes" means the 7 1/8% senior notes due 2004 issued by
Illinova under that certain indenture dated as of February 1, 1997 between
Illinova and the First National Bank of Chicago, as trustee, issued in an
aggregate principal amount of $100 million.

     "Immaterial Subsidiary" means, as of any date, any Restricted Subsidiary
whose total assets, as of that date, are less than $100,000 and whose total
revenues for the most recent 12-month period do not exceed $100,000; provided,
that a Restricted Subsidiary will not be considered to be an Immaterial
Subsidiary if it, directly or indirectly, guarantees or otherwise provides
direct credit support for any other Indebtedness of the Company.

     "Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:

          (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 banker's acceptances;

          (4)  representing Capital Lease Obligations or Attributable Debt in
     respect of Sale and Leaseback Transactions;

                                       16

<PAGE>

          (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,

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.

     "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" means the first $225.0 million in aggregate principal
amount of Series A Notes, first $525.0 million in aggregate principal amount of
Series B Notes and first $700.0 million in aggregate principal amount of Series
C Notes, in each case issued under this Indenture on the date hereof.

     "Initial Purchasers" means Credit Suisse First Boston LLC, Banc of America
Securities LLC, Citigroup Global Markets Inc., Lehman Brothers Inc., J.P.Morgan
Securities Inc., Morgan Stanley & Co. Incorporated, ABN AMRO Incorporated, Banc
One Capital Markets, Inc., Credit Lyonnais Securities (USA) Inc., Deutsche Bank
Securities Inc., SG Cowen Securities Corporation and TD Securities (USA) Inc.

     "Insolvency or Liquidation Proceeding" means:

          (1)  any case commenced by or against the Company or any other Obligor
     under any Bankruptcy Law, any other proceeding for the reorganization,
     recapitalization or adjustment or marshalling of the assets or liabilities
     of the Company or any other Obligor, any receivership or assignment for the
     benefit of creditors relating to the Company or any other Obligor or any
     similar case or proceeding relative to the Company or any other Obligor or
     its creditors, as such, in each case whether or not voluntary;

          (2)  any liquidation, dissolution, marshalling of assets or
     liabilities or other winding up of or relating to the Company or any other
     Obligor, in each case whether or not voluntary and whether or not involving
     bankruptcy or insolvency; or

          (3)  any other proceeding of any type or nature in which substantially
     all claims of creditors of the Company or any other Obligor are determined
     and any payment or distribution is or may be made on account of such
     claims.

     "Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.

     "Intercreditor Agreement" means that certain agreement dated as of August
11, 2003 among Wilmington Trust Company, as First Priority Corporate Trustee,
John M. Beeson, Jr., as First Priority Individual Trustee, Bank One, NA (Main
Office Chicago), as First Priority Collateral Agent, Wells Fargo

                                       17

<PAGE>

Bank Minnesota, N.A., as Second Priority Collateral Trustee, Dynegy Holdings
Inc. as a Grantor and other parties referred to therein as Grantors.

     "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 other 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. If the Company
or Illinova or any of their respective Subsidiaries sells or otherwise disposes
of any Equity Interests of any direct or indirect Subsidiary of the Company or
Illinova, such that, after giving effect to any such sale or disposition, such
Person is no longer a Subsidiary of the Company or Illinova, as the case may be,
then the Company or Illinova shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the Fair Market Value of the
Company's or Illinova's Investments in such Subsidiary that were not sold or
disposed of in an amount determined as provided in the final paragraph of
Section 4.07(b) hereof. The acquisition by the Company or Illinova or any of
their respective Subsidiaries of a Person that holds an Investment in a third
Person shall be deemed to be an Investment by the Company, Illinova 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 in an amount
determined as provided in the final paragraph of Section 4.07(b) hereof. 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.

     "IP Intercompany Note" means that certain promissory note, of approximately
$2,262.1 million in principal amount, dated as of September 30, 2000, made by
Dynegy to Illinova, as payee, as in effect on the date of this Indenture as
renewed, refunded, replaced, restructured or refinanced; provided that such note
is between Dynegy and Illinova at all times.

     "Joint Collateral Agent" means a bank or trust company that:

          (1)  is authorized to exercise corporate trust powers;

          (2)  is reasonably satisfactory to the Trustee; and

          (3)  has been appointed by the Company and has agreed, pursuant to a
     Joint Collateral Agent Undertaking, to act as collateral agent for the
     equal and ratable benefit of all present and future holders of Notes and
     Parity Lien Debt, whenever incurred, and also for the benefit of the
     present and future holders of all other Note Obligations and Parity Lien
     Obligations, in its capacity as such collateral agent, and any successor in
     such capacity.

     "Joint Collateral Agent Undertaking" means a declaration of trust for a
collateral trust, a collateral trust agreement or a collateral agency agreement
executed and delivered by the Company and the Joint Collateral Agent on
customary terms reasonably satisfactory to the Trustee.

     "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of Wilmington, Delaware (for so long as the Company
maintains an office or agency in such location, or alternatively, in the City of
New York, if at such time the Company maintains an office or agency in the
Borough of Manhattan, the City of New York) or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period.

                                   18

<PAGE>

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

     "Litigation" means any litigation (1) disclosed in the Offering Circular
dated August 1, 2003 prepared in connection with the offering of the Initial
Notes including the financial statements included therein, or (2) relating or
ancillary to or arising from the same subject matter.

     "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 (but not loss), together with any related provision for
     taxes on such gain (but not 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 (but not loss), together with any related
     provision for taxes on such extraordinary gain (but not loss);

provided that with respect to the Company, Net Income shall be calculated to
include the aggregate amount of all distributions made pursuant to clauses (11)
and (12) of Section 4.07(b) hereof as if such distributions were interest
expense of the Company recorded as of the dates that each such distribution was
made.

     "Net Proceeds" means the aggregate cash proceeds received by Dynegy or any
Restricted Subsidiary 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,
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. In
the case of any non-wholly owned Restricted Subsidiary of the Company, "Net
Proceeds" shall be net of any payments required to be made to any minority
interest holder in such Restricted Subsidiary that is not a Restricted
Subsidiary of the Company from the proceeds of any Asset Sales by such
Restricted Subsidiary.

     "Netting Agreement" means a Netting Agreement, master Netting Agreement or
other similar document having the same effect as a Netting Agreement or master
Netting Agreement and, as applicable, any collateral annex, security agreement,
or other similar document related to any master Netting Agreement (in each case
entered into in the ordinary course of business) or any Permitted Contract.

     "NGL Assets" means, in accordance with the definition of "Principal
Property" contained in the 1996 Indenture and the DNE Guarantees, any natural
gas, natural gas liquids or crude oil pipeline, distribution system, gathering
system, storage facility or processing plant (excluding any such property that
in the good faith opinion of the Company's Board of Directors is not of material
importance to the

                                    19

<PAGE>

business conducted by the Company and its consolidated Subsidiaries taken as a
whole) and any equity interests or indebtedness of any Person which owns any of
the foregoing.

     "Non-Recourse Debt" means Indebtedness:

          (1)  as to which neither the Company nor any of its Restricted
     Subsidiaries (A) provides credit support of any kind (including any
     undertaking, agreement or instrument that would constitute Indebtedness),
     (B) is directly or indirectly liable as a guarantor or otherwise, or (C)
     constitutes the lender;

          (2)  no default with respect to which (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 any other Indebtedness of the Company or any of its
     Restricted Subsidiaries to declare a default on such other Indebtedness or
     cause the payment of the Indebtedness to be accelerated or payable prior to
     its Stated Maturity; and

          (3)  as to which the lenders have been notified in writing that they
     will not have any recourse to the stock or assets of the Company or any of
     its Restricted Subsidiaries.

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

     "Note Documents" means this Indenture, each Sharing Confirmation, the
Notes, the Note Guarantees and the Security Documents.

     "Note Guarantee" means the Guarantee by each Guarantor of the Company's
payment obligations under this Indenture and on the Notes, executed pursuant to
the provisions of this Indenture.

     "Note Lien" means, to the extent securing Note Obligations, a Lien granted
by a Security Document as security for Note Obligations or, if held by the Joint
Collateral Agent, as security for Note Obligations and Parity Lien Obligations.

     "Note Lien Assignment" means an instrument reasonably satisfactory to the
Trustee assigning to the Joint Collateral Agent, without recourse and without
any representation, warranty or liability whatsoever, the Note Liens and all
rights, interests, powers and benefits of the Collateral Trustee under the
Security Documents.

     "Note Obligations" means the Notes, the Note Guarantees and all other
Obligations of any Obligor under the Note Documents.

     "Notes" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes of any series and the Additional Notes of the same series
shall be treated as a single class for all purposes under this Indenture, and
unless the context otherwise requires, all references to the Notes shall include
the Initial Notes and any Additional Notes.

     "Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

     "Obligor" means the Company, each of the Subsidiary Guarantors, each of the
Affiliate Guarantors and any other Person that at any time guarantees or
provides collateral security or credit support for any of the Notes (including
any Additional Notes issued hereunder) and all other Obligations

                                   20

<PAGE>

of the Company and any Guarantor under this Indenture, the Notes (including any
Additional Notes issued hereunder) and the Security Documents.

     "Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer, assistant treasurer or
the principal accounting officer of the Company, that meets the requirements of
Section 14.05 hereof.

     "Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 14.05 hereof.
The counsel may be an employee of or counsel to the Company, any Guarantor or
the Trustee.

     "Parents" means Dynegy and BG Holdings, Inc. and their successors and
assigns.

     "Parity Lien" means a Lien granted by a Security Document to the Collateral
Trustee upon any property of the Company or any other Obligor to secure Parity
Lien Obligations.

     "Parity Lien Debt" means:

     (1)  the Notes; and

     (2)  any other Indebtedness (including Additional Notes) that (A) is
permitted to be incurred pursuant to Section 4.09 hereof; or (B) is permitted to
be secured by Parity Liens by clauses (2) or (3) of the definition of Permitted
Liens; provided, in the case of each issue or series of Indebtedness referred to
in this clause (2), that:

          (A)  on or before the date on which such Indebtedness was incurred by
     the Company such Indebtedness is designated by the Company, in an Officers'
     Certificate delivered to each Parity Debt Representative and the Collateral
     Trustee on or before such date, as Parity Lien Debt for the purposes of
     this Indenture and the Intercreditor Agreement;

          (B)  such Indebtedness is governed by an indenture or other agreement
     that includes a Sharing Confirmation; and

          (C)  all requirements set forth in the Intercreditor Agreement as to
     the confirmation, grant or perfection of the Collateral Trustee's Liens to
     secure such Indebtedness or Obligations in respect thereof are satisfied,

(and the satisfaction of such requirements and the other provisions of this
clause (2) shall be conclusively established, for purposes of entitling the
holders of such Indebtedness to share equally and ratably with the other holders
of Parity Lien Debt in the benefits and proceeds of the Collateral Trustee's
Liens on the Collateral, if the Company delivers to the Collateral Trustee an
Officers' Certificate stating that such requirements and other provisions have
been satisfied and that such Indebtedness is Parity Lien Debt, together with an
Opinion of Counsel stating that such Officers' Certificate has been duly
authorized by the Board of Directors of the Company and has been duly executed
and delivered, and the holders of such Indebtedness and Obligations in respect
thereof shall be entitled to rely conclusively thereon).

     "Parity Lien Obligations" means Parity Lien Debt and all other Obligations
in respect thereof.

     "Parity Debt Representative" means:

                                       21

<PAGE>

          (1)  in the case of the Notes, the Trustee; or

          (2)  in the case of any other Series of Parity Lien Debt, the Trustee,
     agent or representative of the holders of such Series of Parity Lien Debt
     who maintains the transfer register for such Series of Parity Lien Debt and
     is appointed as a Parity Debt Representative (for purposes related to the
     administration of the Security Documents) pursuant to this Indenture or
     other agreement governing such Series of Parity Lien 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).

     "Permitted Business" means the business substantially similar to the lines
of business conducted by the Company and its Restricted Subsidiaries as of the
date of this Indenture or any business or activity that is reasonably related,
ancillary or complementary thereto or a reasonable extension, development or
expansion thereof.

     "Permitted Collateral" means any of the following property: (1) receivables
(together with general intangibles, and payment intangibles related thereto or
arising therefrom and all proceeds and products of any of the foregoing), (2)
cash and short-term investments, and (3) all dividends, interest, distributions,
and other proceeds from time to time received, receivable or otherwise
distributed in respect of, or in exchange for, any or all of the foregoing.

     "Permitted Contract" means (1) any contracts and transactions for the
purchase, sale, exchange of, or the option (whether physical or financial) to
purchase, sell or exchange (a) natural gas, (b) electricity, (c) coal, (d)
petroleum-based liquids, (e) oil, (f) emissions, (g) waste byproducts, (h)
weather, or (i) any other energy-related commodity or derivative; (2) any
contracts or transactions for the processing, transmission, transportation, or
storage of, or any other services related to any commodity identified in
subparts (1)(a) through (i) above, including any capacity agreement; (3) any
financial derivative agreement (including but not limited to swaps, options or
swaptions) related to any commodity identified in subparts (1)(a) through (i)
above, or to any interest rate or currency rate management activities; (4) any
agreement for membership or participation in an organization that facilitates or
permits the entering into or clearing of any Netting Agreement or any agreement
described in this definition; (5) any agreement combining part or all of a
Netting Agreement or part or all of any of the agreements described in this
definition; or (6) any document relating to any agreement described in this
definition that is filed with a governmental body and any related service
agreements.

     "Permitted Investments" means:

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

          (2)  any Investment in Cash Equivalents;

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

               (a)  such Person becomes a Restricted Subsidiary of the Company;
          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 Company or a Restricted Subsidiary of the
          Company;

                                       22

<PAGE>

          (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 hereof;

          (5)  any Investment in any Person solely in exchange for the issuance
     of Equity Interests (other than Disqualified Stock) of the Company;

          (6)  any Investments received (a) in compromise or resolution of
     obligations of trade creditors or customers that were incurred in the
     ordinary course of business of the Company or any of its Restricted
     Subsidiaries, including (i) obligations of financially troubled account
     debtors to the extent reasonably necessary in order to prevent or limit
     loss and (ii) pursuant to any plan of reorganization or similar arrangement
     upon the bankruptcy or insolvency of any trade creditor or customer, (b) in
     compromise or resolution of litigation, arbitration or other disputes, or
     (c) on account of any claim against, or an interest in, any other Person
     (i) acquired in good faith in connection with or as a result of a
     bankruptcy, workout, reorganization or recapitalization of such other
     Person or (ii) as a result of a bona fide foreclosure by the Company or any
     of its Restricted Subsidiaries with respect to any claim against any other
     Person;

          (7)  Investments represented by Hedging Obligations;

          (8)  any Investment consisting of extensions of credit including,
     without limitation, accounts receivables or notes receivables owing to the
     Company or any of its Restricted Subsidiaries arising from the grant of
     trade credit or prepayments or similar transactions, if created or acquired
     in the ordinary course of business;

          (9)  any Investment existing on the date of this Indenture;

          (10) Investments in the form of, or pursuant to, operating agreements,
     joint ventures, partnership agreements, 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;

          (11) Investments in Affiliates of the Company resulting from the
     drawings under, or renewals or extensions of, letters of credit, surety
     bonds, guarantees, or performance bonds supporting obligations of such
     Affiliates, and Investments in Subsidiaries of the Company to cash
     collateralize obligations supported by such letters of credit, bonds or
     guarantees if they expire or are cancelled undrawn to be made by the
     Company or any of its Subsidiaries in order to avoid a default pursuant to
     contracts or agreements;

          (12) Investments made in connection with any Discontinued Business
     Operations or Litigation so long as (a) in the case of any Discontinued
     Business Operations other than as described in clause (b) below, the
     aggregate amount of such Investments shall not exceed $30.0 million since
     the date of this Indenture and (b) in the case of tolling agreements,
     Litigation or the wind-down, settlement or disposition of third party risk
     management transactions, (i) the Company or its Subsidiaries shall have
     received reasonably equivalent value for such Investment, or (ii) (in the
     case of tolling agreements) the liabilities, if any, in respect of such
     Investment shall not be any greater than the liabilities associated with
     the applicable tolling agreement;

                                       23

<PAGE>

          (13) Investments in any (a) Person in which the Company or any of its
     Subsidiaries, directly or indirectly, owns Equity Interests, to provide for
     the operation, maintenance or working capital of such Person or pursuant to
     contractually required capital commitments, or (b) Proportionally
     Consolidated Interests resulting from variances from prior periods in the
     volume of natural gas processed or the volumes of natural gas liquids
     produced pursuant to applicable construction and operation agreements, in
     the case of clauses (a) and (b) above on a combined basis in an aggregate
     amount not to exceed $20.0 million in any calendar year;

          (14) Investments in Proportionally Consolidated Interests consisting
     of the payment of the proportional share of operating expenses through
     joint interest billings pursuant to applicable construction and operating
     agreements;

          (15) any Guarantees permitted to be incurred under this Indenture;

          (16) Investments in CoGen Lyondell, Inc. or DGPI Inc. consisting of
     loans or advances in the ordinary course of business consistent with past
     practices relating to CoGen Lyondell, Inc. and DGPI Inc.;

          (17) Investments (or distributions to allow Illinois Power to make
     such payments) made by the Company or any or its Restricted Subsidiaries in
     satisfaction of the obligations of Illinois Power pursuant to the Tilton
     Lease, in an aggregate amount, in the case of the Purchase Amount, not to
     exceed $81 million (a) plus accrued rent, break costs (if applicable) and
     similar amounts and (b) less any amounts outstanding pursuant to clause
     (16) of Section 4.09(b) hereof; and

          (18) other Investments in any Person having an aggregate Fair Market
     Value (measured on the date each such Investment was made and without
     giving effect to subsequent changes in value) not to exceed $20.0 million
     incurred in any calendar year.

     "Permitted Liens" means:

          (1)  Priority Liens securing Indebtedness under one or more Credit
     Facilities that was permitted by the terms of this Indenture to be incurred
     and/or securing Hedging Obligations related thereto and/or ACH Obligations,
     in an aggregate principal amount at any time outstanding not to exceed the
     Priority Lien Cap as of the date of incurrence thereof;

          (2)  Parity Liens and other Liens securing Indebtedness and related
     Obligations (but excluding Priority Liens) not otherwise permitted by this
     definition having an aggregate principal amount not to exceed:

               (a)  the greater of (x) $1.5 billion or (y) the gross proceeds
          from the Initial Notes, plus

               (b)  10% of Consolidated Net Assets of the Company as of the date
          of incurrence thereof; plus

               (c)  an amount equal to the aggregate amount of additional
          Indebtedness that could be secured by Priority Liens under the
          Priority Lien Cap as of the date of determination; provided that any
          Parity Liens securing Indebtedness in an aggregate amount in excess of
          the amount permitted by clauses (a) and (b) above shall be deemed to
          be Priority Liens for purposes of calculating total Priority Liens at
          any time outstanding under the Priority Lien Cap.

                                       24

<PAGE>

          (3)  Liens in favor of the Company or the Guarantors;

          (4)  Liens on property of a Person existing at the time such Person is
     merged with or into or consolidated with the Company or any Subsidiary of
     the Company; 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 the
     Company or the Subsidiary;

          (5)  Liens on property (including Capital Stock) existing at the time
     of acquisition of the property by the Company or any Subsidiary of the
     Company, provided that any Indebtedness secured by such Lien was not
     incurred in contemplation of such acquisition;

          (6)  Liens to secure the performance of bids, trade contracts, leases
     (other than Indebtedness), public or statutory obligations, surety or
     appeal bonds, performance bonds or other obligations of a like nature
     incurred in the ordinary course of business;

          (7)  Liens securing judgments for the payment of money not
     constituting an Event of Default or securing appeal or other surety bonds
     related to such judgments;

          (8)  Liens to secure Indebtedness (including in the Capital Lease
     Obligations) permitted by clause (5) of Section 4.09(b) hereof covering
     only the assets acquired, designed, constructed, installed or improved with
     or financed by such Indebtedness;

          (9)  Liens existing on the date of this Indenture;

          (10) 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;

          (11) Liens imposed by law, such as carriers', warehousemen's,
     landlord's, mechanics' materialmen's, repairmen's, employee's, lessor's,
     contractor's, operator's or other like Liens, in each case, incurred in the
     ordinary course of business;

          (12) survey exceptions, servitudes, permits, encroachments,
     exceptions, conditions, covenants, easements or reservations of, or
     restrictions or rights of others for, including, without limitation,
     licenses, rights-of-way, sewers, electric lines, telegraph and telephone
     lines and other similar purposes, or zoning or other restrictions as to the
     use of real property that were not incurred in connection with Indebtedness
     and that 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;

          (13) Liens created for the benefit of (or to secure) the Notes (or
     Note Guarantees);

          (14) Pledges or deposits made under workers' compensation,
     unemployment insurance, other social security benefits, insurance laws or
     similar legislation, or good faith deposits in connection with bids,
     tenders, contracts (other than for payment of Indebtedness) or leases to
     which such Person is a party;

                                       25

<PAGE>

          (15) Liens in respect of "true leases", and not in respect of
     Indebtedness, arising from Uniform Commercial Code financing statements for
     information purposes with respect to leases incurred in the ordinary course
     of business and not otherwise prohibited by this Indenture;

          (16) Liens arising under Section 9.343 of the Texas Uniform Commercial
     Code or similar statutes of states other than Texas;

          (17) Liens arising under obligations or duties affecting any of the
     property of any Person to any municipality or public authority with respect
     to any franchise, grant, license or permit which do not materially impair
     the use of such property for the purposes for which it is held;

          (18) inchoate statutory Liens arising under ERISA;

          (19) Liens (a) to secure obligations with respect to (i) 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 future contracts) for the
     purchase, transmission, distribution, sale, lease or hedge of any
     energy-related commodity or service, (ii) interest rate, commodity price or
     currency rate management contracts or derivatives, and (iii) customary oil,
     gas and/or mineral leases for bonus or rental payments and for compliance
     with the terms of such leases, and (b) encumbering accounts or receivables
     arising out of Netting Agreements and contracts or agreements relating to
     the generation, distribution or transmission of energy;

          (20) Liens on cash and short-term investments deposited by the Company
     or any of its Restricted Subsidiaries with or on behalf of brokers,
     credit-clearing organizations, independent system operators, regional
     transmission organizations, pipelines, futures contract brokers, customers,
     trading counterparties or any other parties, or pledged by the Company or
     any of its Restricted Subsidiaries to secure the Obligations of the Company
     or any of its Restricted Subsidiaries with respect to or arising under
     Permitted Contracts, Netting Agreements and letters of credit supporting
     Permitted Contracts and Netting Agreements;

          (21) Liens granted by Dynegy or any of its Restricted Subsidiaries on
     its or their rights under any insurance policy, but only to the extent that
     such Lien is granted to the insurers under such insurance policies or any
     insurance premium finance company to secure payment of the premiums and
     other amounts owed to the insurers or such premium finance company with
     respect to such insurance policy;

          (22) Liens securing reimbursement obligations with respect to letters
     of credit that encumber documents and other property relating to such
     letters of credit and the proceeds and products thereof;

          (23) Liens on cash deposits in the nature of a right of setoff,
     banker's lien, counterclaim or netting of cash amounts owed arising in the
     ordinary course of business on deposit accounts;

          (24) Liens arising out of property presently existing and future
     division and transfer orders, advance payment agreements, processing
     contracts, gas processing plant agreements, operating agreements, gas
     balancing agreements, pooling, unitization or communitization agreements,
     pipeline, gathering or transportation agreements, platform agreements,
     drilling contracts, injection or repressuring agreements, cycling
     agreements, construction agreements, salt water or other disposal
     agreements, leases or rental agreements, farm-out or farm-in agreements,
     exploration and development agreements, and any and all other contracts or
     agreement (including

                                       26

<PAGE>

     agreements related to Proportionally Consolidated Interests) covering,
     arising out of, used or useful in connection with or pertaining to the
     exploration, development, operation, production, sale, use, purchase,
     exchange, storage, separation, dehydration, treatment, compression,
     gathering, transportation, processing, improvement, marketing, disposal or
     handling of any property of a Person, provided such agreements are entered
     into in the ordinary course of business and are consistent with past
     practices and contain terms customary for such agreements in the industry;

          (25) Liens to secure any refinancing, refunding, extension, renewal or
     replacement (or successive refinancings, refundings, extensions, renewals
     or replacements) as a whole, or in part, of any Indebtedness secured by a
     Lien referred to in the foregoing clauses (1), (2), (3), (8), (9), (13) and
     (26); provided that (A) such new Lien shall be limited to all or part of
     the same property or assets that secured the original Lien (plus repairs,
     improvements and additions to such property or assets and Liens on the
     stock or other ownership interest in one or more Restricted Subsidiaries
     beneficially owning such property or assets) and (B) the amount of the
     Indebtedness secured by such Lien at such time is no greater than the
     principal amount or, if greater, the maximum commitment of such
     Indebtedness at the time such Lien was permitted hereunder (other than
     increases in an amount necessary to pay fees and expenses, including
     premiums, related to the refinancing, refunding, extension, renewal or
     replacement of such Indebtedness); and

          (26) other Liens to secure Indebtedness in an aggregate amount not to
     exceed $50.0 million at any time outstanding.

     "Permitted Payments to Parents" means, without duplication as to amounts:

          (1)  payments to the Parents to permit the Parents to pay their
     operating costs and expenses in the ordinary course consistent as to scope,
     character and amount with past practices and otherwise maintain their
     existence, including, without limitation, all reasonable accounting,
     general corporate overhead, legal and administrative expenses, directors'
     fees and expenses and SEC filing fees, of the Parents when due;

          (2)  for so long as the Company is a member of a group filing a
     consolidated or combined tax return with the Parents, payments to the
     Parents in respect of an allocable portion of the tax liabilities of such
     group that is attributable to the Company and its Subsidiaries ("Tax
     Payments"). The Tax Payments shall not exceed the lesser of (a) the amount
     of the relevant tax (including any penalties and interest) that the Company
     would owe if the Company were filing a separate tax return (or a separate
     consolidated or combined return with its Subsidiaries that are members of
     the consolidated or combined group), taking into account any carryovers and
     carrybacks of tax attributes (such as net operating losses) of the Company
     and its Subsidiaries from other taxable years and (b) the net amount of the
     relevant tax that the Parents actually owe to the appropriate taxing
     authority. Any Tax Payments received from the Company shall be paid over to
     the appropriate taxing authority within 30 days of the Parents' receipt of
     such Tax Payments or refunded to the Company; and

          (3)  payments by Illinova or Illinois Power, directly or indirectly,
     to the Parents pursuant to that certain Services & Facilities Agreement,
     dated as of June 27, 2000, among Dynegy, Illinois Power and the other
     parties thereto, providing for central management of certain services,
     facilities and properties, as in effect on the date of this Indenture, as
     amended, modified or replaced on terms no less favorable to the Holders of
     the Notes.

                                       27

<PAGE>

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

          (1)  the principal amount (or accreted value, if applicable) 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 interest on the
     Indebtedness and the amount of all expenses 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 has a final maturity date
     equal to or later than the final maturity date of, and is subordinated in
     right of payment to, the Notes on terms at least as favorable to the
     Holders of Notes as those contained in the documentation governing the
     Indebtedness being extended, refinanced, renewed, replaced, defeased or
     refunded, as reasonably determined by the Company and its Restricted
     Subsidiaries;

          (4)  such Indebtedness is incurred either by the Company or by the
     Restricted Subsidiary who is the obligor on the Indebtedness being
     extended, refinanced, renewed, replaced, defeased or refunded; and

          (5)  if incurred by the Company, 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 agency.

     "Priority Collateral Documents" means the "Collateral Documents" (as
defined in the Credit Agreement) and any other collateral documents executed in
connection with the granting of security pursuant to the Credit Agreement or the
other "Loan Documents" (as defined in the Credit Agreement).

     "Priority Collateral Trustees" means Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity but solely as corporate
trustee (together with any successor corporate trustee), and John M. Beeson,
Jr., an individual residing in the State of Minnesota, not in his individual
capacity but solely as individual trustee (together with any successor
individual trustee), together being trustees for the holders of Priority Lien
Debt.

     "Priority Debt Agent" means the Credit Agreement Agent or any other agent
for holders of Priority Lien Debt.

     "Priority Lien" means a Lien on the Collateral that secures Indebtedness on
a first priority basis effectively senior to the comparable Lien securing the
Notes.

     "Priority Lien Cap" means an amount equal to the Indebtedness outstanding
under the Credit Agreement or any other Credit Facility in an aggregate
principal amount not to exceed $2,078 million,

                                       28

<PAGE>

which amount shall be permanently reduced from time to time by (1) an amount
equal to the aggregate amount of all Net Proceeds from Asset Sales in excess of
the first $250.0 million of such Net Proceeds that are applied by the Company or
any Restricted Subsidiary since the date of this Indenture to repay any Priority
Lien Debt and, if to repay any revolving credit Indebtedness thereunder, to
effect a corresponding commitment reduction thereunder, in each case pursuant to
clause (1) of Section 4.10 hereof; and (2) an amount equal to the aggregate
amount of all repayments of principal of the Term B Loan made within 30 days
from the date of this Indenture. For purposes of this definition of Priority
Lien Cap, (A) any interest, penalties, premiums, fees, costs, expenses or other
Obligations in respect of any Priority Lien Debt shall not be subject to the
cap, (B) all letters of credit shall be valued at face amount, whether or not
drawn and (C) any Indebtedness outstanding under Hedging Obligations and ACH
Obligations shall be disregarded in calculating the total Priority Liens at any
time outstanding. In addition, Parity Liens incurred and existing in reliance on
clause (2)(c) of the definition of Permitted Liens shall be deemed to be
Priority Liens for purposes of calculating the total Priority Liens at any time
outstanding.

     "Priority Lien Debt" means Indebtedness under (1) the Credit Agreement, (2)
the Subsidiary Facilities or (3) any other Credit Facility that is secured by a
Priority Lien that was permitted to be incurred under clause (1) of the
definition of "Permitted Liens" but only if on or before the day on which such
Indebtedness is incurred by the Company or any of its Restricted Subsidiaries
such Indebtedness is designated by the Company, in an Officer's Certificate
delivered to each Parity Debt Representative and the Collateral Trustee on or
before such date, as Priority Lien Debt for the purposes of this Indenture and
the Intercreditor Agreement.

     "Priority Lien Obligations" means Priority Lien Debt and all other
Obligations in respect thereof.

     "Private Placement Legend" means the legend set forth in Section 2.06(g)(1)
to be placed on all Notes issued under this Indenture except where otherwise
permitted by the provisions of this Indenture.

     "Proportionally Consolidated Interest" means undivided ownership interests
in plants and gathering systems that are (1) co-owned by the Company (or its
Subsidiaries) and third parties and (2) consolidated on a proportional basis in
the financial statements of Dynegy.

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

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

     "Regulation S Global Note" means a Global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes of any
series initially sold in reliance on Rule 903 of Regulation S.

     "Related Party" means:

          (1)  any controlling stockholder or 80% (or more) owned Subsidiary of
     Chevron; or

          (2)  any trust, corporation, partnership or other entity, the
     beneficiaries, stockholders, partners, owners or Persons beneficially
     holding an 80% or more controlling interest of which consist of Chevron
     and/or such other Persons referred to in the immediately preceding clause
     (1).

     "Replacement Assets" means (1) any property or capital assets (other than
Indebtedness and Capital Stock) to be used by Dynegy or any of its Restricted
Subsidiaries in a Permitted Business or any improvement to any property or
capital assets that are used by Dynegy or any of its Restricted

                                       29

<PAGE>

Subsidiaries in a Permitted Business; (2) Capital Stock of a Person that is a
Restricted Subsidiary of Dynegy or that becomes a Restricted Subsidiary of
Dynegy as a result of the acquisition of such Capital Stock by Dynegy or another
Restricted Subsidiary (including by means of merger, consolidation or other
business combination permitted under this Indenture); or (3) Capital Stock
constituting a minority interest in any Person that at such time is a Restricted
Subsidiary of Dynegy; provided, however, that any such Restricted Subsidiary
described in clauses (2) or (3) above is primarily engaged in a Permitted
Business.

     "Required Parity Debtholders" means, at any time in respect of any action
or matter, holders of a majority in aggregate outstanding principal amount of
all Parity Lien Debt then outstanding, voting together as a single class. For
this purpose, Parity Lien Debt registered in the name of, or beneficially owned
by, the Company or any of its Affiliates will be deemed not to be outstanding.

     "Required Priority Debtholders" means, at any time in respect of any action
or matter, (1) holders of the outstanding principal amount of the applicable
Priority Lien Debt then outstanding required pursuant to the terms of the
applicable Credit Agreement, voting as a single class, to approve such action or
matter or (2) the Priority Debt Agent acting upon the authorization or consent
of the holders referred to in the immediately preceding clause (1). For this
purpose, Priority Lien Debt registered in the name of, or beneficially owned by,
the Company or any of its Affiliates will be deemed not to be outstanding.

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

     "Restricted 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. All of the Company's Subsidiaries
as of the date of this Indenture shall be deemed to be Restricted Subsidiaries
of the Company. As of the date of this Indenture, the Restricted Subsidiaries of
Dynegy shall be deemed to be (1) the Company and its Restricted Subsidiaries,
(2) Illinova and its Restricted Subsidiaries and (3) BG Holdings, Inc, a
Delaware corporation. As of the date of this Indenture, the Restricted
Subsidiaries of Illinova shall be deemed to be all Subsidiaries of Illinova
other than Illinois Power Company and its Subsidiaries.

     "Riverside Facility" means that certain Participation Agreement, dated
March 10, 2000, among Riverside Generating Company, L.L.C., as the lessee and
construction agent, the Company, as guarantor, Lawrence County Riverside Trust
2000, as the lessor, Atlantic Asset Securitization Corp., as tranche A lender,
the Liquidity Purchasers, the tranche B lenders and the certificate holder party
thereto, Commerzbank AG, New York and Grand Cayman Branches, as syndication
agent, Credit Agricole Indosuez, as documentation agent, and Canadian Imperial
Bank of Commerce, Bayerische Landesbank Girozentrale and KBC Bank N.V., as
co-agents, and Credit Lyonnais New York Branch, as administrative agent and lead
arranger and the operative documents referred to therein, as amended, restated,
modified, renewed, refunded, replaced (whether upon or after termination or
otherwise) or refinanced (including by means of sales of debt securities to
investors) in whole or in part from time to time.

                                       30

<PAGE>

     "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 the Securities Act.

     "S&P" means Standard & Poor's Ratings Group.

     "Sale and Leaseback Transaction" means any arrangement relating to any
asset now owned or hereafter acquired by the Company or any of its Restricted
Subsidiaries whereby the Company or a Restricted Subsidiary of the Company
transfers such asset to a Person who is not an Affiliate of the Company and the
Company or such Restricted Subsidiary leases it from such Person, other than
leases between the Company and any of its Restricted Subsidiaries or between
Restricted Subsidiaries.

     "SEC" means the Securities and Exchange Commission.

     "Secured Debt" means any and all Priority Lien Debt and Parity Lien Debt.

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

     "Security Documents" means:

     (1)  that certain Second-Lien Shared Security Agreement dated as of August
11, 2003, among the Company, the additional grantors party thereto and Wells
Fargo Bank Minnesota, N.A. as Collateral Trustee;

     (2)  that certain Second-Lien Non-Shared Security Agreement dated as of
August 11, 2003, among the Company, the additional grantors party thereto and
Wells Fargo Bank Minnesota, N.A. as Collateral Trustee;

     (3)  those certain mortgages dated as of August 11, 2003, listed on
Schedule II to this Indenture.

     (4)  one or more other security agreements, pledge agreements, collateral
assignments, mortgages, deed of trust or other grants or transfers for security
executed and delivered by the Company or any other Obligor creating a Lien upon
property owned or to be acquired by the Company or such other Obligor in favor
of the Collateral Trustee for the benefit of the holders of Note Obligations or,
if held by the Joint Collateral Agent, for the equal and ratable benefit of all
present and future holders of Notes and Parity Lien Debt, whenever incurred, and
also for the benefit of the present and future holders of all other Note
Obligations and Parity Lien Obligations.

     "Series B Restructuring Transaction" means the exchange of the Series B
Mandatorily Redeemable Preferred Stock of Dynegy held by Chevron and the other
transactions contemplated thereby, pursuant to the Exchange Agreement dated July
28, 2003 between Dynegy and Chevron, as amended, modified or replaced on terms
no less favorable to the Holders of Notes.

     "Series of Parity Lien Debt" means, severally, the Notes and each other
issue or series of Parity Lien Debt for which a single transfer register is
maintained.

                                       31

<PAGE>

     "Series of Secured Debt" means, severally, the Notes, each other issue or
series of Parity Lien Debt for which a single transfer register is maintained
and each issue or series of Priority Lien Debt for which a single transfer
register is maintained.

     "Sharing Confirmation" means, as to any Series of Parity Lien Debt, the
written agreement of the holders of such Series of Parity Lien Debt, as set
forth in the indenture or agreement governing such Series of Parity Lien Debt,
for the enforceable benefit of all holders of each other existing and future
Series of Parity Lien Debt and each existing and future Parity Debt
Representative, that all Parity Lien Obligations shall be and are secured
equally and ratably by all Liens (or will share proceeds in respect of their
Liens on NGL Assets on an equal and ratable basis) at any time granted by the
Company or any other Obligor to secure any Obligations in respect of such Series
of Parity Lien Debt, whether or not upon property otherwise constituting
Collateral, that all such Liens shall be enforceable by the Collateral Trustee
for the benefit of all holders of Parity Lien Obligations equally and ratably,
and that the holders of Obligations in respect of such Series of Parity Lien
Debt are bound by the provisions in the Intercreditor Agreement relating to the
order of application of proceeds from enforcement of the Collateral Trustee's
Liens upon the Collateral, and consent to and direct the Collateral Trustee to
perform its obligations under the Intercreditor Agreement.

     "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 is in effect on the date of
this Indenture.

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

     "Subordinated Debenture Indenture" means the Subordinated Debenture
Indenture for Subordinated Deferrable Interest Debentures dated May 28, 1997
between NGC Corporation (as predecessor of the Company), The First National Bank
of Chicago, as trustee, and the other parties thereto, with respect to the
Subordinated Debentures.

     "Subordinated Debentures" means the $200.0 million in aggregate principal
amount of the Company's 8.316% Subordinated Debentures due 2027.

     "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) 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

          (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).

     "Subsidiary Facilities" means any of the Alpha Facility, the CoGen Lyondell
Facility and the Riverside Facility.

                                       32

<PAGE>

     "Subsidiary Guarantees" means the Guarantees of the Notes by the Subsidiary
Guarantors.

     "Subsidiary Guarantors" means:

          (1)  the following Restricted Subsidiaries of the Company (subject to
     Section 10.05 hereof): Dynegy Power Corp.; DPC II Inc.; Black Mountain
     CoGen, Inc.; Bluegrass Generation, Inc.; Bluegrass Generation Company,
     L.L.C.; Calcasieu Power, Inc.; Parish Power, Inc.; Calcasieu Power, LLC;
     Delta Cogen, Inc.; Chesapeake Power, Inc.; James River Energy Corp.; DPC
     Power Resources Holding Company; Dry Creek Power, Inc.; Rockingham Power,
     L.L.C.; Dynegy Power Development Company; Dynegy Power Holdings, Inc.;
     CoGen Power, Inc.; CoGen Power, L.P.; Dynegy Engineering, Inc.; Dynegy
     Management, Inc.; Dynegy Services, Inc.; Dynegy Power Management Services,
     L.P.; Dynegy Operating Company; Dynegy Parts and Technical Services, Inc.;
     Dynegy Power Management Services, Inc.; HEP CoGen, Inc.; Northway CoGen,
     Inc.; Dynegy Power Investments, Inc.; Dynegy Power Services, Inc.; Dynegy
     Power Nevada, Inc.; Dynegy Cabrillo II LLC; Blue Ridge Generation Inc.;
     Blue Ridge Generation LLC; Chickahominy Generating Company; Chickahominy
     Power, LLC; Florida Mercantile Power, Inc.; Palmetto Power, L.L.C.;
     Gasification Services, Inc.; Georgia Mercantile Power, Inc.; Heard County
     Power, L.L.C.; Hart County IPP, Inc.; Hartwell Independent Power Partners,
     Inc.; Hartwell Power Company; Michigan CoGen, Inc.; Michigan Power, Inc.;
     Michigan Power Holdings, Inc.; OCG CoGen, Inc.; Oyster Creek CoGen, Inc.;
     RRP Company; DPC Colombia-Opon Power Resources Company; Termo Santander
     Holding, LLC; Riverside Generation, Inc.; Riverside Generating Company,
     L.L.C.; Rolling Hills Generation, Inc.; Dynegy Renaissance Power, Inc.;
     Dynegy Northeast Generation, Inc.; Hudson Power, L.L.C.; Dynegy Danskammer,
     L.L.C.; Dynegy Roseton, L.L.C.; Dynegy Hudson Power Retail, L.L.C.; DMS LP,
     Inc.; Dynegy Midstream G.P., Inc.; Dynegy Midstream Services, Limited
     Partnership; Midstream Barge Company, L.L.C.; Dynegy Liquids G.P., L.L.C.;
     Dynegy Liquids Marketing and Trade; Dynegy Regulated Holdings, LLC; Dynegy
     OPI, LLC; Dynegy NGL Pipeline Company, LLC; Dynegy Intrastate Pipeline,
     LLC; Dynegy Energy Pipeline Company LLC; Dynegy Global Energy, Inc.; Dynegy
     Upper Holdings, L.L.C.; Dynegy Holding Company, L.L.C.; DMG Enterprises,
     Inc.; Havana Dock Enterprises, LLC; DMT Holdings, Inc.; DMT L.P. L.L.C.;
     DMT G.P., L.L.C.; DMT Holdings, L.P.; Dynegy Broadband Marketing and Trade;
     Dynegy GP Inc.; Dynegy Marketing and Trade; Dynegy Coal Trading and
     Transportation, L.L.C.; NGC Storage, Inc.; Dynegy Technology Capital Corp.;
     Dynegy Strategic Investments LP, Inc.; Dynegy Strategic Investments, LP;
     Dynegy Strategic Investments GP, L.L.C.; Dynegy Energy Services, Inc.;
     Illinois Power Energy, Inc.; DES Northeast, Inc.; DEM GP, LLC; DEM LP LLC;
     Dynegy Energy Marketing, LP; Dynegy Administrative Services Company; NIPC,
     Inc.; Dynegy I.T., Inc.; DFS LP, LLC; DFS General Partner, LLC; Dynegy
     Financial Services, LP; Dynegy Catlin Member, Inc.; Dynegy Midwest
     Generation, Inc.; Dynegy Power Marketing, Inc.; Renaissance Power, L.L.C.;
     Rolling Hills Generating, L.L.C.; and Black Thunder Member, Inc.; and

          (2)  any other Subsidiary of the Company that executes a Subsidiary
     Guarantee in accordance with the provisions of this Indenture,

and their respective successors and assigns.

     "Term B Loan" means the $360 million in aggregate principal amount of the
term B loan under the Credit Agreement.

     "Termination Date" means the earlier to occur of (a) the date on which the
notice from the holder of the DYN Notes to terminate the mandatory prepayment
obligations thereunder has become effective in

                                       33

<PAGE>

accordance with and pursuant to the terms and procedures set forth in the DYN
Notes or (b) the third anniversary of the date of this Indenture.

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

     "Tilton Lease" means that certain Amended and Restated Participation
Agreement, dated October 30, 2002, among Illinois Power and the other parties
thereto.

     "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 (1) July 15, 2006, in the
case of the Series A Notes, (2) July 15, 2007, in the case of the Series B
Notes, or (3) July 15, 2008, in the case of the Series C Notes; provided,
however, that if the period from the redemption date to (1) July 15, 2006, in
the case of the Series A Notes, (2) July 15, 2007, in the case of the Series B
Notes, or (3) July 15, 2008, in the case of the Series C Notes, in each case is
less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year will be used.

     "Trustee" means the party named as such in the preamble to this Indenture
until a successor replaces it in accordance with the applicable provisions of
this Indenture and thereafter means the successor serving hereunder.

     "Unasserted Contingent Obligations" means, at any time, Obligations for
taxes, costs, indemnifications, reimbursements, damages and other liabilities
(except (i) the principal of and interest and premium (if any) on, and fees
relating to, any Indebtedness and (ii) contingent obligations to reimburse the
issuer of an outstanding letter of credit for amounts that may be drawn or paid
thereunder) in respect of which no claim or demand for payment has been made at
such time.

     "Unrestricted Global Note" means a permanent global Note substantially in
the form of the applicable 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 a series of Notes that do not bear the
Private Placement Legend.

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

     "Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:

     (1)  has no Indebtedness other than Non-Recourse Debt;

     (2)  except as permitted pursuant to Section 4.11, is not party to any
agreement, contract, arrangement or understanding with the Company or any
Restricted Subsidiary of the Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Company or
such Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company;

                                       34

<PAGE>

     (3)  is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe
for additional 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; and

     (4)  has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of its Restricted
Subsidiaries.

     Any designation of a Subsidiary of the Company 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
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof. 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
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date pursuant to Section 4.09 hereof, the Company will be in
default of such covenant. The Board of Directors of the Company 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 Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation will only be permitted if (1) such
Indebtedness is permitted pursuant to Section 4.09 hereof 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. Upon any such designation of an
Unrestricted Subsidiary as a Restricted Subsidiary, the redesignated Subsidiary
will: (a) become a Guarantor and execute a supplemental indenture and deliver an
opinion of counsel satisfactory to the Trustee within 10 Business Days of the
date on which it was acquired or created; provided, that any redesignated
Restricted Subsidiary that constitutes an Immaterial Subsidiary need not become
a Guarantor until such time as it ceases to be an Immaterial Subsidiary, and (b)
become a party to the Security Documents.

     "U.S. Person" means a U.S. Person as defined in Rule 902(o) 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 shall elapse between such date and the making of
     such payment; by

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

Section 1.02  Other Definitions.

                                       35

<PAGE>

                                                                         Defined
                                                                            in
     Term                                                                Section
     ----                                                               --------
     "Affiliate Transaction" ..............................................4.11
     "Asset Sale Offer" ...................................................3.09
     "Authentication Order" ...............................................2.02
     "Calculation Agent" ..................................................2.03
     "Change of Control Offer" ............................................4.15
     "Change of Control Payment" ..........................................4.15
     "Change of Control Payment Date" .....................................4.15
     "Covenant Defeasance" ................................................8.03
     "Event of Default" ...................................................6.01
     "Excess Proceeds" ....................................................4.10
     "incur" ..............................................................4.09
     "Legal Defeasance" ...................................................8.02
     "Offer Amount" .......................................................3.09
     "Offer Period" .......................................................3.09
     "Paying Agent" .......................................................2.03
     "Permitted Debt" .....................................................4.09
     "Permitted Illinova Subsidiary Contracts" ............................4.07
     "Purchase Date" ......................................................3.09
     "Registrar" ..........................................................2.03
     "Restricted Payments" ................................................4.07

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 Note Guarantees means the Company and the
Guarantors, respectively, and any successor obligor upon the Notes and the Note
Guarantees, respectively.

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

Section 1.04  Rules of Construction.

     Unless the context otherwise requires:

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

                                       36

<PAGE>

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

          (3)  "or" is not exclusive;

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

          (5)  "will" shall be interpreted to express a command;

          (6)  the "date of this Indenture" or "date hereof" means the date of
     original issuance of the Initial Notes;

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

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

                                   ARTICLE 2.
                                    THE NOTES

Section 2.01  Form and Dating.

     (a)  General. The Series A Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A1 hereto. The
Series B Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A2 hereto. The Series C Notes and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A3 hereto. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or usage. Each Note shall be dated the date
of its authentication. The Notes shall be in denominations of $1,000 and
integral multiples thereof.

     The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company, 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.

     (b)  Global Notes. Notes issued in global form shall be substantially in
the form of Exhibits A1, A2 or A3, as applicable, 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 Exhibits A1, A2 or A3, as applicable, 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 thereon and
each shall provide that it represents the aggregate principal amount of
outstanding 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 appropriate, 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.

                                       37

<PAGE>

     (c)  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 Global Notes that are held by
Participants through Euroclear or Clearstream.

Section 2.02  Execution and Authentication.

     At least one Officer must sign the Notes for the Company 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 valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.

     The Trustee shall, upon receipt of a written order of the Company signed by
two Officers (an "Authentication Order"), authenticate Notes for original issue
in unlimited aggregate principal amount, subject to the provisions of this
Indenture, including without limitation Section 4.09 hereof. Each such
Authentication Order shall specify the series of Notes being issued, the amount
of Notes to be authenticated, the date on which the Notes are to be
authenticated and, in the case of Additional Notes, the issue price of the
Notes.

     The Trustee may appoint an authenticating agent acceptable to the Company
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, the Company or an Affiliate of the
Company.

Section 2.03  Registrar, Paying Agent and Calculation Agent.

     The Company 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 and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company shall notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.

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

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

     In addition, the Company may delegate the responsibility for determining
the Applicable Eurodollar Rate with respect to the Series A Notes to the Trustee
as calculation agent (the "Calculation Agent"), on such terms and conditions as
are reasonably acceptable to the Trustee; provided that under all

                                       38

<PAGE>

circumstances the Calculation Agent shall determine the Applicable Eurodollar
Rate pursuant to the formulation set forth in the definition thereof in Section
1.01 hereof.

     The Calculation Agent will, upon the request of the Holder of any Series A
Note, provide the interest rate then in effect with respect to the Series A
Notes. All calculations made by the Calculation Agent in the absence of manifest
error shall be conclusive for all purposes and binding on the Company and the
Holders of Series A Notes.

Section 2.04  Paying Agent to Hold Money in Trust.

     The Company shall require each Paying Agent other than the Trustee to agree
in writing that subject to Articles 8 and 13, 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 shall notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may upon written request
to a Paying Agent require such Paying Agent to pay all money held by it to the
Trustee and account for any amounts paid. The Company at any time may require
such Paying Agent to pay all money held by it to the Trustee. Upon payment over
to the Trustee, the Paying Agent (if other than the Company or a Subsidiary)
shall have no further liability for the money. If the Company 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 Company, 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 TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).

Section 2.06  Transfer and Exchange.

     (a)  Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes shall be exchanged
by the Company for Definitive Notes if:

          (1)  the Company delivers to the Trustee notice from the Depositary
     that it is unwilling or unable to continue to act as Depositary or that it
     is no longer a clearing agency registered under the Exchange Act and, in
     either case, a successor Depositary is not appointed by the Company within
     120 days after the date of such notice from the Depositary; or

          (2)  the Company in its sole discretion determines that the Global
     Notes (in whole but not in part) should be exchanged for Definitive Notes
     and delivers a written notice to such effect to the Trustee.

In addition, Holders of any series of Notes may request the Trustee to exchange
Global Notes of such series for Definitive Notes if there has occurred and is
continuing a Default or Event of Default with

                                       39

<PAGE>

respect to such series of Notes. Upon the occurrence of any of the events in (1)
or (2) above or the preceding sentence, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee. 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. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), 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 hereof to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:

          (1)  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 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)(1).

          (2)  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)(1) above, the transferor
     of such beneficial interest must deliver to the Registrar either:

               (A)  both:

                    (i)  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
               pursuant to Section 2.06(b)(3) or (4) hereof in an amount equal
               to the beneficial interest to be transferred or exchanged; and

                    (ii) instructions given in accordance with the Applicable
               Procedures containing information regarding the Participant
               account to be credited with such increase; or

               (B)  both:

                    (i)  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 pursuant to Section 2.06(c) hereof in an
               amount equal to the beneficial interest to be transferred or
               exchanged; and

                                       40

<PAGE>

                    (ii) 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 (i) above.

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

          (3)  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)(2)(A) above and the
     Registrar receives the following:

               (A)  if the transferee shall 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;

               (B)  if the transferee shall 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; and

               (C)  if the transferee shall take delivery in the form of a
          beneficial interest in the IAI Global Note, then the transferor must
          deliver a certificate in the form of Exhibit B hereto, including the
          certifications and certificates required by item (3) thereof, if
          applicable.

          (4)  Transfer and Exchange of Beneficial Interests in a Restricted
     Global Note for Beneficial Interests in an Unrestricted Global Note. A
     beneficial interest in any Restricted Global Note may be exchanged by any
     holder thereof for a beneficial interest in an Unrestricted Global Note or
     transferred to a Person who takes delivery thereof in the form of a
     beneficial interest in an Unrestricted Global Note if the exchange or
     transfer complies with the requirements of Section 2.06(b)(2)(A) above and
     the Registrar receives the following:

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

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

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

                                       41

<PAGE>

     If any such transfer is effected above at a time when an Unrestricted
Global Note has not yet been issued, the Company shall issue and, upon receipt
of an Authentication Order in accordance with Section 2.02 hereof, the Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial interests
transferred pursuant to this Section 2.06(b)(4).

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

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

          (1)  Beneficial Interests in Restricted Global Notes to Restricted
     Definitive Notes. If, pursuant to Section 2.06(b)(2)(B) hereof, 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 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 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 to the effect set forth in
          Exhibit B hereto, including the certifications in item (1) thereof;

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

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

               (E)  if such beneficial interest is being transferred to an
          Institutional Accredited Investor in reliance on an exemption from the
          registration requirements of the Securities Act other than those
          listed in subparagraphs (B) through (D) above, a certificate to the
          effect set forth in Exhibit B hereto, including the certifications and
          certificates required by item (3) thereof, if applicable; or

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

the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
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 the holder of such beneficial interest shall instruct the
Registrar

                                       42

<PAGE>

through instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall deliver 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)(1) shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained thereof.

          (2)  Beneficial Interests in Restricted Global Notes to Unrestricted
     Definitive Notes. Pursuant to Section 2.06(b)(2)(B) hereof, a holder of a
     beneficial interest in a Restricted Global Note may exchange such
     beneficial interest for an Unrestricted Definitive Note or may transfer
     such beneficial interest to a Person who takes delivery thereof in the form
     of an Unrestricted Definitive Note only if the Registrar receives the
     following:

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

                    (ii) if the holder of such beneficial interest in a
               Restricted Global Note proposes to transfer such beneficial
               interest to a Person who shall take delivery thereof in the form
               of a Definitive Note that does not bear the Private Placement
               Legend, a certificate from such holder in the form of Exhibit B
               hereto, including the certifications in item (4) thereof;

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

          (3)  Beneficial Interests in Unrestricted Global Notes to Unrestricted
     Definitive Notes. If, pursuant to Section 2.06(b)(2)(B) hereof, 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 satisfaction of the conditions set forth in
     Section 2.06(b)(2) hereof, the Trustee shall cause the aggregate principal
     amount of the applicable Global Note to be reduced accordingly pursuant to
     Section 2.06(h) hereof, and the Company shall execute and the Trustee shall
     authenticate and deliver to the Person designated in the instructions a
     Definitive Note in the appropriate principal amount. Any Definitive Note
     issued in exchange for a beneficial interest pursuant to this Section
     2.06(c)(3) shall be registered in such name or names and in such authorized
     denomination or denominations as the holder of such beneficial interest
     requests through instructions to the Registrar from or through the
     Depositary and the Participant or Indirect Participant. The Trustee shall
     deliver 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)(3) shall not bear the Private
     Placement Legend.

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

          (1)  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 Notes to a Person who takes

                                       43

<PAGE>

     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 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 to the effect set
          forth in Exhibit B hereto, including the certifications in item (1)
          thereof;

               (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 to the effect set forth in 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 to the
          effect set forth in Exhibit B hereto, including the certifications in
          item (3)(a) thereof;

               (E)  if such Restricted Definitive Note is being transferred to
          an Institutional Accredited Investor in reliance on an exemption from
          the registration requirements of the Securities Act other than those
          listed in subparagraphs (B) through (D) above, a certificate to the
          effect set forth in Exhibit B hereto, including the certifications and
          certificates required by item (3) thereof, if applicable; or

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

          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 appropriate Restricted Global Note, in the
          case of clause (B) above, the 144A Global Note, in the case of clause
          (C) above, the Regulation S Global Note, and in all other cases, the
          IAI Global Note.

          (2)  Restricted Definitive Notes to Beneficial Interests in
     Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
     exchange such Note for a beneficial interest in an Unrestricted Global Note
     or transfer such Restricted Definitive Note to a Person who takes delivery
     thereof in the form of a beneficial interest in an Unrestricted Global Note
     only if the Registrar receives the following:

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

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

                                       44

<PAGE>

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

          Upon satisfaction of the conditions of any of the subparagraphs in
     this Section 2.06(d)(2), the Trustee shall cancel the Definitive Notes and
     increase or cause to be increased the aggregate principal amount of the
     Unrestricted Global Note.

          (3)  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.

          If any such exchange or transfer from a Definitive Note to a
     beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(D) or
     (3) above at a time when an Unrestricted Global Note has not yet been
     issued, the Company shall issue and, upon receipt of an Authentication
     Order in accordance with Section 2.02 hereof, the Trustee shall
     authenticate one or more Unrestricted Global Notes in an aggregate
     principal amount equal to the principal amount of Definitive Notes so
     transferred.

     (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 must 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
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).

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

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

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

                                       45

<PAGE>

          (2)  Restricted Definitive Notes to Unrestricted Definitive Notes. Any
     Restricted Definitive Note may be exchanged by the Holder thereof for an
     Unrestricted Definitive Note or transferred to a Person or Persons who take
     delivery thereof in the form of an Unrestricted Definitive Note if the
     Registrar receives the following:

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

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

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

          (3)  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.

     Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.

     (f)  [Reserved].

     (g)  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.

          (1)  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 NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, RESOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS NOTIFIED THAT THE SELLER OF THIS NOTE
MAY BE RELYING ON THE EXEMPTION FROM THE

                                       46

<PAGE>

PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF DYNEGY HOLDINGS INC. THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)
INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 904
UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 (IF AVAILABLE), (IV) IN THE UNITED
STATES TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT), IN A MINIMUM PRINCIPAL AMOUNT OF NOT
LESS THAN $100,000, THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF IN VIOLATION OF THE SECURITIES ACT AND THAT, PRIOR TO SUCH
TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO
THE TRUSTEE A SIGNED LETTER IN THE FORM SET FORTH ON THE REVERSE HEREOF
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO RESTRICTIONS ON
TRANSFER OF THIS SECURITY (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, OR (VI) TO THE ISSUER, ITS SUBSIDIARIES OR ITS DIRECT
OR INDIRECT PARENT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."

               (B)  Notwithstanding the foregoing, any Global Note or Definitive
          Note issued pursuant to subparagraphs (b)(4), (c)(2), (c)(3), (d)(2),
          (d)(3), (e)(2) or (e)(3) of this Section 2.06 (and all Notes issued in
          exchange therefor or substitution thereof) shall not bear the Private
          Placement Legend.

          (2)  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 (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) 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 COMPANY.

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

                                       47

<PAGE>

DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREOF."

     (h)  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 shall 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 shall 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.

     (i)  General Provisions Relating to Transfers and Exchanges.

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

          (2)  No service charge shall be made to a Holder of a Global Note or
     to a Holder of a Definitive Note for any registration of transfer or
     exchange, but the Company may require payment of a sum sufficient to cover
     any transfer tax or similar governmental charge payable in connection
     therewith (other than any such transfer taxes or similar governmental
     charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06,
     3.09, 4.10, 4.15 and 9.05 hereof).

          (3)  The Registrar shall not 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.

          (4)  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 Company, 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.

          (5)  Neither the Company 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

                                      48

<PAGE>

          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 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.

          (6)  Prior to due presentment for the registration of a transfer of
     any Note, the Trustee, any Agent and the Company 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 interest on
     such Notes and for all other purposes, and none of the Trustee, any Agent
     or the Company shall be affected by notice to the contrary.

          (7)  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.

Section 2.07  Replacement Notes.

     If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the requirements
of Section 8-405 of the Uniform Commercial Code of the State of New York (or any
successor statute thereto) are met, such that the Holder (a) satisfies the
Company or the Trustee within a reasonable time after such Holder has notice of
such loss, destruction or theft and the Registrar does not register a transfer
prior to receiving such notification, (b) makes such request to the Company or
the Trustee prior to the Note being acquired by a protected purchaser as defined
in Section 8-303 of the Uniform Commercial Code (or any successor statute
thereto) and (c) satisfies any other reasonable requirements of the Trustee. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note, including fees and expenses of
counsel and of the Trustee.

     Every replacement Note is an additional obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other 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 as
not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note; however, Notes held by the Company or a Subsidiary of the Company
shall not be deemed to be outstanding for purposes of Section 3.07(a)(1),
3.07(b)(1) or 3.07(c)(1) hereof.

     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 protected purchaser.

                                       49

<PAGE>

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

Section 2.10  Temporary Notes.

     Until certificates representing Notes are ready for delivery, the Company
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 Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes. Until such
exchange, Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.

Section 2.11  Cancellation.

     The Company 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 prior written direction of the Trustee, the Registrar or
Paying Agent) and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall destroy canceled Notes (subject to the record retention requirement of the
Exchange Act). Certification of the destruction of all canceled Notes shall be
delivered to the Company. The Company 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 Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company 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. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.

Section 2.13  CUSIP Numbers.

                                       50

<PAGE>

     The Company in issuing the Notes may use a CUSIP number, and if so, the
Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to the Holders; provided, however, that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.

                                   ARTICLE 3.
                            REDEMPTION AND PREPAYMENT

Section 3.01  Notices to Trustee.

     If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:

          (1)  the clause of this Indenture pursuant to which the redemption
     shall occur;

          (2)  the redemption date;

          (3)  the principal amount and applicable series of Notes to be
     redeemed; and

          (4)  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 Notes for redemption or
purchase as follows:

          (1)  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

          (2)  if the Notes are not listed on any national securities exchange,
     on a pro rata basis, by lot or by such 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 hereof,
not less than 30 nor more than 60 days prior to the redemption or purchase date
by the Trustee from the outstanding Notes not previously called for redemption
or purchase.

     The Trustee shall promptly notify the Company 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 amounts of $1,000 or
whole multiples of $1,000; 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 a multiple of $1,000, 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.

Section 3.03  Notice of Redemption.

                                       51

<PAGE>

     Except as provided in Section 3.09 hereof, at least 30 days but not more
than 60 days before a redemption date, the Company shall mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose Notes
are to be redeemed at its registered address, except that redemption notices may
be mailed more than 60 days prior to a redemption date if the notice is issued
in connection with a defeasance of the Notes or a satisfaction and discharge of
this Indenture pursuant to Articles 8 or 13 of this Indenture.

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

          (1)  the redemption date;

          (2)  the redemption price;

          (3)  if any Note is being redeemed in part, the portion of the
     principal amount of such Note 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 shall be issued upon cancellation of the
     original Note;

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

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

          (6)  that, unless the Company defaults in making such redemption
     payment, interest on Notes called for redemption ceases to accrue on and
     after the redemption date and the only remaining right of Holders of such
     Notes is to receive payment of the redemption price upon surrender to the
     Paying Agent of the Notes redeemed;

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

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

     At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
has delivered to the Trustee, at least 45 days prior to the redemption date
(unless a shorter notice period has been agreed to by the Trustee in writing),
an Officers' 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. A notice of redemption may not be conditional.

Section 3.05  Deposit of Redemption or Purchase Price.

     On or before 10:00 a.m., New York City time on the redemption or purchase
price date, the Company shall deposit with the Trustee or with the Paying Agent
money sufficient to pay the redemption or purchase price of and accrued interest
on all Notes to be redeemed or purchased on that date. The

                                       52

<PAGE>

Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption or purchase price of, and accrued
interest on, all Notes to be redeemed or purchased.

     If the Company complies with the provisions of the preceding paragraph, on
and after the redemption or purchase date, interest shall cease to accrue on the
Notes or the portions of Notes called for redemption or purchase. If a Note is
redeemed or purchased on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is
not so paid upon surrender for redemption or purchase because of the failure of
the Company 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 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 Note that is redeemed or purchased in part, the Company
shall issue and, upon receipt of an Authentication Order, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note
surrendered.

Section 3.07  Optional Redemption.

     (a)  Series A Notes.

          (1)  At any time prior to July 15, 2006, the Company may on any one or
     more occasions redeem up to 35% of the aggregate principal amount of the
     Series A Notes issued hereunder at a redemption price equal to par plus the
     Applicable Eurodollar Rate then in effect, plus accrued and unpaid interest
     to the redemption date, with a contribution to the Company's common equity
     capital made with the net cash proceeds of a concurrent sale of common
     stock of Dynegy; provided that:

               (A)  at least 65% of the aggregate principal amount of the Series
          A Notes issued hereunder (excluding Notes held by the Company or any
          of its Affiliates) remains outstanding immediately after the
          occurrence of such redemption; and

               (B)  the redemption occurs within 75 days of the date of the
          closing of such sale of common stock.

          (2)  At any time prior to July 15, 2006, the Company may redeem all
     but not less than all of the Series A Notes upon the occurrence of a Change
     of Control, upon not less than 30 nor more than 60 days prior notice (but
     in any event no earlier than the date of consummation of such Change of
     Control and no later than 90 days after the occurrence of such Change of
     Control) at a redemption price equal to the principal amount of the Series
     A Notes redeemed plus the Applicable Premium for Series A Notes as of, and
     accrued and unpaid interest, if any, to the date of redemption, subject to
     the rights of Holders on the relevant record date to receive interest on
     the relevant interest payment date. This optional redemption by the Company
     is separate from and in addition to the rights of Holders as set forth in
     Section 4.15 hereof.

                                       53

<PAGE>

          (3)  On or after July 15, 2006, the Company may redeem all or a part
     of the Series A 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 Series A Notes
     redeemed, to the applicable redemption date, if redeemed during the
     twelve-month period beginning on July 15 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
     ----                                                        ----------
     2006 ....................................................      103.000%
     2007 ....................................................      101.000%
     2008 ....................................................      100.000%

     (b)  Series B Notes.

          (1)  At any time prior to July 15, 2006, the Company may on any one or
     more occasions redeem up to 35% of the aggregate principal amount of the
     Series B Notes issued hereunder at a redemption price of 109.875% of the
     principal amount, plus accrued and unpaid interest to the redemption date,
     with a contribution to the Company's common equity capital made with the
     net cash proceeds of a concurrent sale of common stock of Dynegy; provided
     that:

               (A)  at least 65% of the aggregate principal amount of the Series
          B Notes issued hereunder (excluding Notes held by the Company or any
          of its Affiliates) remains outstanding immediately after the
          occurrence of such redemption; and

               (B)  the redemption occurs within 75 days of the date of the
          closing of such sale of common stock.

          (2)  At any time prior to July 15, 2007, the Company may redeem all
     but not less than all of the Series B Notes upon the occurrence of a Change
     of Control, upon not less than 30 nor more than 60 days prior notice (but
     in any event no earlier than the date of consummation of such Change of
     Control and no later than 90 days after the occurrence of such Change of
     Control) at a redemption price equal to the principal amount of the Series
     B Notes redeemed plus the Applicable Premium for Series B Notes as of, and
     accrued and unpaid interest, if any, to the date of redemption, subject to
     the rights of Holders on the relevant record date to receive interest on
     the relevant interest payment date. This optional redemption by the Company
     is separate from and in addition to the rights of Holders as set forth in
     Section 4.15 described hereof.

          (3)  On or after July 15, 2007, the Company may redeem all or a part
     of the Series B 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 Series B Notes
     redeemed, to the applicable redemption date, if redeemed during the
     twelve-month period beginning on July 15 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
     ----                                                        ----------
     2007.....................................................      104.938%
     2008.....................................................      102.469%
     2009 and thereafter......................................      100.000%

     (c)  Series C Notes.

                                       54

<PAGE>

          (1)  At any time prior to July 15, 2006, the Company may on any one or
     more occasions redeem up to 35% of the aggregate principal amount of the
     Series C Notes issued hereunder at a redemption price of 110.125% of the
     principal amount, plus accrued and unpaid interest to the redemption date,
     with a contribution to the Company's common equity capital made with the
     net cash proceeds of a concurrent sale of common stock of Dynegy; provided
     that:

               (A)  at least 65% of the aggregate principal amount of the Series
          C Notes issued hereunder (excluding Notes held by the Company or any
          of its Affiliates) remains outstanding immediately after the
          occurrence of such redemption; and

               (B)  the redemption occurs within 75 days of the date of the
          closing of such sale of common stock.

          (2)  At any time prior to July 15, 2008, the Company may redeem all
     but not less than all of the Series C Notes upon the occurrence of a Change
     of Control, upon not less than 30 nor more than 60 days prior notice (but
     in any event no earlier than the date of consummation of such Change of
     Control and no later than 90 days after the occurrence of such Change of
     Control) at a redemption price equal to the principal amount of the Series
     C Notes redeemed plus the Applicable Premium for Series C Notes as of, and
     accrued and unpaid interest, if any, to the date of redemption, subject to
     the rights of Holders on the relevant record date to receive interest on
     the relevant interest payment date. This optional redemption by the Company
     is separate from and in addition to the rights of Holders as set forth in
     Section 4.15 described hereof.

          (3)  On or after July 15, 2008, the Company may redeem all or a part
     of the Series C 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 Series C Notes
     redeemed, to the applicable redemption date, if redeemed during the
     twelve-month period beginning on July 15 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
     ----                                                        ----------
     2008.....................................................      105.063%
     2009.....................................................      103.375%
     2010.....................................................      101.688%
     2011 and thereafter......................................      100.000%

     (d)  Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof. Unless the Company defaults
in the payment of the redemption price, interest shall cease to accrue on the
Notes or portions thereof called for redemption on the applicable redemption
date.

Section 3.08  Mandatory Redemption.

     The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.

Section 3.09  Offer to Purchase by Application of Excess Proceeds.

     In the event that, pursuant to Section 4.10 hereof, the Company is required
to commence an offer to all Holders to purchase Notes (an "Asset Sale Offer"),
it shall follow the procedures specified below.

                                       55

<PAGE>

     The Asset Sale Offer shall be made to all Holders and all holders of other
Indebtedness that is pari passu 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 and assets. The Asset Sale Offer shall remain open
for a period of at least 20 Business Days following its commencement and not
more than 30 Business Days, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than three Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Company shall apply all Excess Proceeds (the "Offer Amount") to the purchase of
Notes and such other pari passu Indebtedness (on a pro rata basis, if
applicable) or, if less than the Offer Amount has been tendered, all Notes and
other 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.

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

     Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and 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 notice, which shall govern the terms of the Asset Sale Offer, shall
state:

          (1)  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;

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

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

          (4)  that, unless the Company defaults in making such payment, any
     Note accepted for payment pursuant to the Asset Sale Offer shall cease to
     accrue interest after the Purchase Date and the only remaining right of the
     Holders of such Notes is to receive payment on the Purchase Date;

          (5)  that Holders electing to have a Note purchased pursuant to an
     Asset Sale Offer may elect to have Notes purchased in integral multiples of
     $1,000 only;

          (6)  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" on the reverse of the Note
     completed, or transfer by book-entry transfer, to the Company, a
     Depositary, if appointed by the Company, or a Paying Agent at the address
     specified in the notice at least three days before the Purchase Date;

          (7)  that Holders shall be entitled to withdraw their election if the
     Company, the Depositary or the Paying Agent, as the case may be, receives,
     not later than the expiration of the Offer Period, a telegram, telex,
     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;

          (8)  that, if the aggregate principal amount of Notes and other pari
     passu Indebtedness surrendered by Holders exceeds the Offer Amount, the
     Company shall select the Notes and other

                                       56

<PAGE>

     pari passu Indebtedness to be purchased on a pro rata basis based on the
     principal amount of Notes and such other pari passu Indebtedness
     surrendered (with such adjustments as may be deemed appropriate by the
     Company so that only Notes in denominations of $1,000, or integral
     multiples thereof, shall be purchased); and

          (9)  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).

     On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, shall promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company shall promptly issue a new Note, and the
Trustee, upon written request from the Company shall authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.

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

                                   ARTICLE 4.
                                    COVENANTS

Section 4.01  Payment of Notes.

     The Company 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 Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due.

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

Section 4.02  Maintenance of Office or Agency.

     The Company shall maintain in the City of Wilmington, Delaware (or if not
such location, in the Borough of Manhattan, the City of New York) an office or
agency (which may be an office of the Trustee or an affiliate of the Trustee,
Registrar or co-registrar) where Notes may be surrendered for registration of
transfer or for exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company shall give
prompt written notice to the Trustee of the

                                       57

<PAGE>

location, and any change in the location, of such office or agency. If at any
time the Company fails to maintain any such required office or agency or fails
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.

     The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the City of Wilmington,
Delaware (or if not such location, in the Borough of Manhattan, the City of New
York) for such purposes. The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.

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

Section 4.03  Reports.

     (a)  Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Holders, or
cause the Trustee to furnish to the Holders of Notes, within the time periods
specified in the SEC's rules and regulations:

          (1)  all quarterly and annual reports that would be required to be
     filed with the SEC on Forms 10-Q and 10-K if the Company were required to
     file such reports; and

          (2)  all current reports that would be required to be filed with the
     SEC on Form 8-K if the Company were required to file such reports.

     All such reports shall be prepared in all material respects in accordance
with all of the rules and regulations applicable to such reports. Each annual
report on Form 10-K will include a report on the Company's consolidated
financial statements by the Company's certified independent accountants. The
Company shall file a copy of each of the reports referred to in clauses (1) and
(2) above with the SEC for public availability within the time periods specified
in the rules and regulations applicable to such reports (unless the SEC will not
accept such a filing) and will post the reports on its website within those time
periods.

     (b)  If, at any time, the Company is no longer subject to the periodic
reporting requirements of the Exchange Act for any reason, the Company will
nevertheless continue filing the reports specified in Section 4.03(a) with the
SEC within the time periods specified in the SEC's rules and regulations unless
the SEC will not accept such a filing. The Company agrees that it will not take
any action for the purpose of causing the SEC not to accept any such filings.
If, notwithstanding the foregoing, the SEC will not accept the Company's filings
for any reason, the Company will post the reports referred to in Section 4.03(a)
on its website within the time periods that would apply if the Company were
required to file those reports with the SEC. The Company shall at all times
comply with TIA Section 314(a).

     (c)  For so long as any Notes remain outstanding, at any time the Company
and the Affiliate Guarantors are not required to file the reports required by
4.03(a) and 4.03(b) with the SEC, the Company and the Affiliate Guarantors shall
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.

                                       58

<PAGE>

Section 4.04  Compliance Certificate.

     (a)  The Company and each Guarantor (to the extent that such Guarantor is
so required under the TIA) shall deliver to the Trustee, within 120 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture and the Security Documents, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company or such Guarantor has kept, observed, performed
and fulfilled each and every covenant contained in this Indenture and the
Security Documents and no Default or Event of Default has occurred during such
year and at the date of such certificate there is no Default or Event of Default
(or, if a Default or Event of Default has occurred, describing all such Defaults
or Events of Default of which he or she may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and that to the best
of his or her knowledge no event has occurred and remains in existence by reason
of which payments on account of the principal of or interest, if any, on the
Notes is prohibited or if such event has occurred, a description of the event
and what action the Company is taking or proposes to take with respect thereto.

     (b)  So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof insofar as they relate to
accounting matters or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.

     (c)  So long as any of the Notes are outstanding, the Company shall deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto.

Section 4.05  Taxes.

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

Section 4.06  Stay, Extension and Usury Laws.

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

                                       59

<PAGE>

Section 4.07  Restricted Payments.

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

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

          (2)  purchase, redeem or otherwise acquire or retire for value
     (including, without limitation, in connection with any merger or
     consolidation involving the Company) any Equity Interests of the Company or
     any direct or indirect parent of the Company held by any Person (other than
     a Restricted Subsidiary of the Company);

          (3)  make any payment on or with respect to, or purchase, redeem,
     defease or otherwise acquire or retire for value any Indebtedness of the
     Company or any Restricted Subsidiary that is contractually subordinated to
     the Notes or any Note Guarantee (excluding any intercompany Indebtedness
     between or among the Company and any of its Restricted Subsidiaries and
     excluding the purchase, repurchase or other acquisition of any subordinated
     Indebtedness purchased in anticipation of satisfying a sinking fund
     obligation, principal installment or final maturity, in each case due
     within one year of the date of acquisition), 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"
     for purposes of this covenant), 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; and

          (2)  the Company would, at the time of such Restricted Payment and
     after giving pro forma effect thereto as if such Restricted Payment had
     been made at the beginning of the applicable four-quarter period, have been
     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) hereof;
     and

          (3)  such Restricted Payment, together with the aggregate amount of
     all other Restricted Payments made by the Company and its Restricted
     Subsidiaries since the date of this Indenture (excluding Restricted
     Payments permitted by clauses (2), (3), (5), (6), (7), (8), (9), (10), (11)
     and (12) of Section 4.07(b)), is less than the sum, without duplication,
     of:

               (A)  50% of the Consolidated Net Income of the Company for the
          period (taken as one accounting period) from July 1, 2003 to the end
          of the Company's most recently ended fiscal quarter for which internal
          financial statements are available at the time of such Restricted
          Payment (or, if such Consolidated Net Income for such period is a
          deficit, less 100% of such deficit), plus

                                       60

<PAGE>

               (B)  100% of the aggregate net cash proceeds received by the
          Company since the date of this Indenture as a contribution to its
          common equity capital from the concurrent issue or sale of (1) Dynegy
          Equity Interests (other than Disqualified Stock) or (2) convertible or
          exchangeable Disqualified Stock of Dynegy or convertible or
          exchangeable debt securities of Dynegy that have been converted into
          or exchanged for Equity Interests (other than Disqualified Stock) of
          Dynegy (other than Equity Interests (or Disqualified Stock or debt
          securities) sold to a Subsidiary of Dynegy), plus

               (C)  to the extent that any Restricted Investment that was made
          after the date of this Indenture is sold for cash or otherwise
          liquidated or repaid for cash, the lesser of (1) the cash return with
          respect to such Restricted Investment (less the cost of disposition,
          if any) and (2) the initial amount of such Restricted Investment, plus

               (D)  to the extent that any Unrestricted Subsidiary of the
          Company designated as such after the date of this Indenture is
          redesignated as a Restricted Subsidiary after the date of this
          Indenture, the Fair Market Value of the Company's Investment in such
          Subsidiary as of the date of such redesignation, plus

               (E)  50% of any dividends received by the Company or any of its
          Restricted Subsidiaries after the date of this Indenture from an
          Unrestricted Subsidiary of the Company, to the extent that such
          dividends were not otherwise included in Consolidated Net Income of
          the Company for such period.

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

          (1)  the payment of any dividend within 60 days after the date of
     declaration of the dividend, if at the date of declaration the dividend
     payment would have complied with the provisions of this Indenture;

          (2)  so long as no Default or Event of Default has occurred and is
     continuing or would be caused thereby, the making of any Restricted Payment
     in exchange for, or out of the net cash proceeds of the substantially
     concurrent sale (other than to a Subsidiary of the Company) of, Equity
     Interests of the Company (other than Disqualified Stock) or from the
     substantially concurrent contribution of common equity capital to the
     Company; provided that the amount of any such net cash proceeds that are
     utilized for any such Restricted Payment shall be excluded from clause
     (3)(b) of the Section 4.07(a);

          (3)  the defeasance, redemption, repurchase or other acquisition of
     Indebtedness of the Company or any of its Restricted Subsidiaries that is
     contractually subordinated to the Notes or to any Note Guarantee in
     exchange for or with the net cash proceeds from a substantially concurrent
     (a) incurrence of Permitted Refinancing Indebtedness or issuance of Equity
     Interests (other than Disqualified Stock) of the Company or (b)
     contribution to the capital of the Company or any of its Restricted
     Subsidiaries of proceeds from the incurrence of Indebtedness of Dynegy
     (excluding Indebtedness that is Guaranteed by the Company or any of its
     Restricted Subsidiaries) or issuance of Equity Interests of Dynegy;

          (4)  so long as no Default or Event of Default has occurred and is
     continuing or would be caused thereby, from time to time, the payment of
     dividends in cash to Dynegy to repurchase, redeem or otherwise acquire or
     retire for value, any Equity Interests of Dynegy or any Restricted
     Subsidiary of Dynegy held by any current or former officer, director or
     employee of Dynegy or any of its Restricted Subsidiaries pursuant to any
     equity subscription agreement, stock option

                                       61

<PAGE>

     agreement, shareholders' agreement, employee benefit plan or similar
     agreement; provided that the aggregate price paid for all such repurchased,
     redeemed, acquired or retired Equity Interests in any twelve-month period
     shall not exceed $1.0 million; provided further, that any amounts not used
     in any twelve-month period may be carried forward, in an amount not to
     exceed $1.0 million, to the following twelve-month period.

          (5)  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;

          (6)  so long as no Default or Event of Default has occurred and is
     continuing or would be caused thereby, the declaration and payment of
     regularly scheduled or accrued dividends to holders of any class or series
     of Disqualified Stock of the Company or any Restricted Subsidiary of the
     Company issued on or after the date of this Indenture in accordance with
     the Fixed Charge Coverage test set forth in Section 4.09(a) hereof;

          (7)  Permitted Payments to Parents;

          (8)  distributions to Dynegy in an aggregate amount not to exceed
     $225.0 million, which funds shall be used by Dynegy to make a cash payment
     to Chevron (or any of its Related Parties) upon consummation of the Series
     B Restructuring Transaction; provided that such payment shall occur within
     60 days of the date of this Indenture;

          (9)  so long as no Default or Event of Default has occurred and is
     continuing or would be caused thereby, distributions in cash to Dynegy
     equal to or less than regularly scheduled interest payments on the IP
     Intercompany Note as the same is in effect on the date of this Indenture;
     provided that the Company may fund pre-payments of up to twelve months of
     interest (but in no event shall more than twelve months of interest be
     pre-paid at any time);

          (10) so long as no Default or Event of Default has occurred and is
     continuing or would be caused thereby, distributions in cash to Dynegy (A)
     to fund payment or prepayment of principal on the IP Intercompany Note, (B)
     to fund, upon contemporaneous contribution by Dynegy, directly or
     indirectly, to Illinois Power, capital expenditures and operating expenses
     in the ordinary course of business of Illinois Power or (C) to fund
     payments of interest and principal on the Illinova Senior Notes; provided
     that (1) the aggregate amount of all such cash distributions does not
     exceed $450.0 million since the date of this Indenture or (2) the Fixed
     Charge Coverage Ratio for the Company's most recently ended four full
     fiscal quarters for which financial statements are publicly available
     immediately preceding the date on which such distribution is to be made
     would have been at least 2.0 to 1;

          (11) so long as no Default or Event of Default has occurred and is
     continuing or would be caused thereby, distributions in cash to Dynegy
     equal to or less than (A) regularly scheduled payments of interest and (B)
     any mandatory prepayments, in each case, then due on the DYN Notes;
     provided, however, that in the case of clause (A) above, at any time after
     the second anniversary of date of this Indenture, distributions under this
     clause (11)(A) shall be permitted only if the Fixed Charge Coverage Ratio
     for the Company's most recently ended four full fiscal quarters for which
     financial statements are publicly available immediately preceding the date
     on which such distribution is to be made would have been at least 2.0 to 1,
     determined on a pro forma basis giving effect to such distribution and
     including in Fixed Charges as Consolidated Interest Expense of the Company
     such distribution and all other distributions made pursuant to this clause
     (11)(A) during the relevant four-quarter period;

                                       62

<PAGE>

          (12) so long as no Default or Event of Default has occurred and is
     continuing or would be caused thereby, distributions in cash to Dynegy
     equal to or less than regularly scheduled dividend payments in respect of
     the DYN Preferred; provided, however, that at any time after the second
     anniversary of the date of this Indenture, distributions under this clause
     (12) shall be permitted only if the Fixed Charge Coverage Ratio for the
     Company's most recently ended four full fiscal quarters for which financial
     statements are publicly available immediately preceding the date on which
     such distribution is to be made would have been at least 2.0 to 1,
     determined on a pro forma basis giving effect to such distribution and
     including in Fixed Charges as Consolidated Interest Expense of the Company
     such distribution and all other distributions made pursuant to clause
     (11)(A) and this clause (12) during the relevant four-quarter period;

          (13) any purchase, redemption, defeasance or other acquisition or
     retirement for value of subordinated Indebtedness upon a Change of Control
     or an Asset Sale to the extent required by this Indenture or other
     agreements pursuant to which such subordinated Indebtedness was issued, but
     only if the Company (A) in the case of a Change of Control, has consummated
     a Change of Control Offer pursuant to Section 4.15 hereof or (B) in the
     case of an Asset Sale, has consummated an Asset Sale Offer pursuant to
     Section 4.10 hereof; and

          (14) so long as no Default or Event of Default has occurred and is
     continuing or would be caused thereby, other Restricted Payments in an
     aggregate amount not to exceed $50.0 million since the date of this
     Indenture.

     The amount of all Restricted Payments (other than cash) shall 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 Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. If the Fair
Market Value of any assets or securities that are required to be valued by this
covenant exceeds $50.0 million, then such Fair Market Value shall be determined
by the Board of Directors whose resolution with respect thereto shall be
delivered to the Trustee. For the avoidance of doubt, the Company or any of its
Restricted Subsidiaries may pay (either directly or indirectly by making
payments to Dynegy) interest on or principal at Stated Maturity of Indebtedness
of Dynegy, including the Convertible Debentures and any other convertible
subordinated debt securities of Dynegy, so long as the Company or its Restricted
Subsidiaries have Guaranteed such Indebtedness and the Guarantee was permitted
to be incurred pursuant to Section 4.09 hereof. Payments by the Company or any
of its Restricted Subsidiaries in respect of such Guaranteed Dynegy debt
securities shall not constitute Restricted Payments. Any loans, dividends or
advances from the Company or any of its Restricted Subsidiaries to Dynegy, for
purposes of this Section 4.07, shall be determined to be a "distribution."

     (c)  Restricted Payment to and from Illinova.

          (1)  To the extent that Illinova receives any distributions from
     Illinois Power, (i) Illinova shall distribute all such distributions
     received to Dynegy and (ii) except for Dynegy's express ability to retain
     Permitted Payments to Parents, Dynegy shall contemporaneously contribute
     all such distributions to the Company; provided that the obligation of
     Illinova to make any distributions pursuant to clause (i) above and the
     obligation of Dynegy to make any contributions pursuant to clause (ii)
     above, in each case, shall be limited in an aggregate principal amount to
     distributions made by the Company in reliance on Section 4.07(b)(10)
     hereof.

          (2)  Notwithstanding the foregoing:

               (A)  if Illinova distributes Net Proceeds from any Asset Sale to
          Dynegy, in lieu of Section 4.07(c)(1), Dynegy may first apply such Net
          Proceeds in accordance Section 4.10

                                       63

<PAGE>

          hereof; provided however, that to the extent the Company has made
          distributions to Dynegy in reliance on Section 4.07(b)(10) that have
          not been otherwise contributed by Dynegy to the Company pursuant to
          the immediately preceding paragraph and Dynegy elects to apply any Net
          Proceeds in accordance with Section 4.10(b)(5) hereof, such proceeds
          shall be invested to make capital expenditures at the Company or
          investments in Replacement Assets to be held by the Company;

               (B)  Illinova may make Permitted Payments to Parents and Dynegy
          shall not be required to contribute such amounts to the Company
          pursuant to clause (ii) of Section 4.07(c)(1); and

               (C)  Illinova shall not be required to make any distribution
          pursuant to clause (i) of Section 4.07(c)(1) and Dynegy shall not be
          required to make any contributions pursuant to clause (ii) of Section
          4.07(c)(1), in each case to the extent prohibited by law.

          (3)  None of Dynegy or any of its Subsidiaries (other than Illinova
     and its Subsidiaries) shall (1) enter into any contract, agreement, loan,
     advance, guarantee, lease, license or similar arrangement with or in favor
     of any Subsidiary of Illinova (other than such agreements (x) as are in
     effect as of the date of this Indenture and as the same may be amended,
     restated, renewed, replaced, supplemented or otherwise modified in the
     ordinary course of business and (y) as may be entered into after the date
     of this Indenture provided that they are made in the ordinary course of
     business consistent (in scope, character and amount) with past practice and
     are on terms no less favorable to Dynegy or the Company and its Restricted
     Subsidiaries, as applicable, that would have been obtained in an arm's
     length transaction with an unrelated Person (collectively, the "Permitted
     Illinova Subsidiary Contracts")) or (2) accept any payment or distribution
     of any kind from any Subsidiary of Illinova unless such distribution or
     payment is (a) paid or distributed to Dynegy, the Company or its Restricted
     Subsidiaries through Illinova or (b) made pursuant to the Permitted
     Illinova Subsidiary Contracts or (c) a Permitted Payment to Parents;
     provided, however, that this paragraph shall not restrict transactions
     between or among (i) Dynegy or the Company and its Restricted Subsidiaries
     on the one hand and Illinova (but not its Subsidiaries) on the other hand
     (subject to compliance with the other provisions of this Indenture
     including without limitation, Section 4.07(a)), (ii) Illinova and its
     Subsidiaries or (iii) any Subsidiaries of Illinova.

Section 4.08  Dividend and Other Payment Restrictions Affecting Subsidiaries.

     (a)  The Company shall not, and shall not permit any of its 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:

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

          (2)  make loans or advances to the Company or any of its Restricted
     Subsidiaries; or

          (3)  transfer any of its properties or assets to the Company or any of
     its Restricted Subsidiaries.

                                       64

<PAGE>

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

          (1)  agreements governing (a) Existing Indebtedness, (b)
     Proportionally Consolidated Interests, (c) Investments by the Company or
     its Restricted Subsidiaries in Affiliates and third parties, (d) or other
     agreements of a similar nature, in each case as in effect on the date of
     this Indenture 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 date of this Indenture;

          (2)  the Credit Facilities as in effect on the date of this Indenture
     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 date of this Indenture;

          (3)  this Indenture, the Notes, the Guarantees and the Security
     Documents;

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

          (5)  customary encumbrances and restrictions (including, without
     limitation, non-assignment provisions) in contracts, agreements, leases,
     permits and licenses entered into or issued in the ordinary course of
     business that are not materially more restrictive, taken as whole, than
     those existing on the date of this Indenture;

          (6)  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 (3)
     of Section 4.08(a);

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

          (8)  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 extended, refinanced, renewed, replaced, defeased or refunded;

          (9)  Liens permitted to be incurred under Section 4.12 hereof that
     limit the right of the debtor to dispose of the assets subject to such
     Liens;

          (10) provisions limiting or prohibiting the disposition or
     distribution of assets or property in joint venture agreements, asset sale
     agreements, sale-leaseback agreements, stock sale agreements and other
     similar agreements entered into in the ordinary course of business;
     provided that such limitation or prohibition is applicable only to the
     assets that are the subject of such agreement;

                                       65

<PAGE>

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

          (12) restrictions or conditions contained in any trading, netting,
     operating, construction, service, supply, purchase, sale or similar
     agreement to which the Company or any Restricted Subsidiary of the Company
     is a party entered into in the ordinary course of business; provided that
     such agreement limits the encumbrance of solely the property or assets of
     the Company 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 Company or such
     Restricted Subsidiary or the assets or property of any other Restricted
     Subsidiary;

          (13) Indebtedness of a Restricted Subsidiary of the Company existing
     at the time it became a Restricted Subsidiary if such restriction was not
     created in connection with or in anticipation of the transaction or series
     of transactions pursuant to which such Restricted Subsidiary became a
     Restricted Subsidiary or was acquired by the Company;

          (14) with respect to clause (3) of Section 4.08(a) only, restrictions
     encumbering property at the time such property was acquired by the Company
     or any of its 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;

          (15) an agreement governing Indebtedness permitted to be incurred
     pursuant to Section 4.09 hereof; provided that the provisions relating to
     such encumbrance or restriction contained in such Indebtedness, taken as a
     whole, are not materially more restrictive than those contained in this
     Indenture; and

          (16) customary net worth and restrictions on transfer, assignment or
     subletting provisions contained in leases and other agreements entered into
     by the Company or any Restricted Subsidiary in the ordinary course of
     business.

Section 4.09  Incurrence of Indebtedness and Issuance of Preferred Stock.

     (a)  The Company shall not, and shall not permit any of its 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 Company shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company may incur Indebtedness (including
Acquired Debt) or issue Disqualified Stock, and the Restricted Subsidiaries may
incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio
for the Company's most recently ended four full fiscal quarters for which
financial statements are publicly 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, 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) hereof shall not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):

          (1)  the incurrence by the Company or any of its Restricted
     Subsidiaries of additional Indebtedness and letters of credit under Credit
     Facilities in an aggregate principal amount at any

                                       66

<PAGE>

     one time outstanding under this clause (1) (with letters of credit being
     deemed to have a principal amount equal to the maximum potential liability
     of the Company and its Restricted Subsidiaries thereunder), not to exceed
     $2,078.0 million less the aggregate amount of all Net Proceeds of Asset
     Sales applied by the Company, any of its Restricted Subsidiaries or by any
     Affiliate Guarantor since the date of this Indenture to repay any term
     Indebtedness under a Credit Facility or to repay any revolving credit
     Indebtedness under a Credit Facility and effect a corresponding commitment
     reduction thereunder pursuant to clause (1) of Section 4.10(a) hereof;

          (2)  the incurrence by the Company and its Restricted Subsidiaries of
     the Existing Indebtedness;

          (3)  the incurrence by the Company and the Restricted Subsidiaries of
     Indebtedness represented by the Initial Notes and the Note Guarantees to be
     issued on the date of this Indenture;

          (4)  the incurrence by the Company of the Guarantee of the Convertible
     Debentures;

          (5)  the incurrence by the Company or any of its 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 in the business of the Company or any of its Restricted
     Subsidiaries, in an aggregate principal amount (or accreted value, as
     applicable), including all Permitted Refinancing Indebtedness incurred to
     refund, refinance, replace, defease or discharge any Indebtedness incurred
     pursuant to this clause (5), not to exceed $100.0 million at any time
     outstanding;

          (6)  the incurrence by the Company or any of its Restricted
     Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
     net proceeds of which are used to refund, refinance, replace, defease or
     discharge Indebtedness (other than intercompany Indebtedness) that was
     permitted by this Indenture to be incurred under Section 4.09(a) or clause
     (2), (3), (4), (5), (6), (15)(a), (16) or (19) of this Section 4.09(b);

          (7)  the incurrence by the Company or any of its Restricted
     Subsidiaries of intercompany Indebtedness between or among the Company and
     any of its Restricted Subsidiaries or between the Company or any of its
     Restricted Subsidiaries on the one hand and Dynegy on the other hand;
     provided, however, that:

               (A)  if the Company or any Guarantor is the obligor on such
          Indebtedness and the payee is not the Company 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 Company, or the Guarantee, in the case of a Guarantor;
          and

               (B)  (x) any subsequent issuance or transfer of Equity Interests
          that results in any such Indebtedness being held by a Person other
          than the Company, a Restricted Subsidiary of the Company or Dynegy and
          (y) any sale or other transfer of any such Indebtedness to a Person
          that is not the Company, a Restricted Subsidiary of the Company or
          Dynegy, shall be deemed, in each case, to constitute an incurrence of
          such Indebtedness by the Company or such Restricted Subsidiary, as the
          case may be, that was not permitted by this clause (7);

                                       67

<PAGE>

          (8)  the issuance by any of the Company's Restricted Subsidiaries to
     the Company 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
          the Company or a Restricted Subsidiary of the Company; and

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

     shall be deemed, in each case, to constitute an issuance of such preferred
     stock by such Restricted Subsidiary that was not permitted by this clause
     (8);

          (9)  the incurrence by the Company or any of its Restricted
     Subsidiaries of Hedging Obligations;

          (10) the Guarantee by the Company or any of its Restricted
     Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of
     the Company that was permitted to be incurred by another provision of this
     covenant; provided that if the Indebtedness being guaranteed is
     subordinated to or pari passu with the Notes, then the Guarantee shall be
     subordinated to the same extent as the Indebtedness guaranteed;

          (11) the incurrence by the Company or any of its Restricted
     Subsidiaries of Indebtedness in respect of workers' compensation claims,
     self-insurance obligations, bankers' acceptances, performance and surety
     bonds in the ordinary course of business;

          (12) the incurrence by the Company or any of its 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;

          (13) the incurrence of Indebtedness arising from agreements of the
     Company or a Restricted Subsidiary, providing for indemnification,
     adjustment of purchase price or similar obligations, in each case, incurred
     or assumed in connection with the disposition of any business, assets or
     Equity Interests of a Subsidiary; provided that the maximum aggregate
     liability in respect of all such Indebtedness shall at no time exceed the
     gross proceeds (including non-cash proceeds) actually received by the
     Company and/or such Restricted Subsidiary in connection with such
     disposition;

          (14) the incurrence by the Company or any of its Restricted
     Subsidiaries of Indebtedness in connection with the deferred purchase price
     of goods or services, or progress payments in connection with such goods
     and services, including turbines, transformers and similar equipment, so
     long as such obligations are incurred in the ordinary course of business;

          (15) the incurrence of Indebtedness by the Company or any of its
     Restricted Subsidiaries in connection with (a) Discontinued Business
     Operations (other than in respect of tolling agreements, Litigation and the
     wind-down, settlement or disposition of the customer risk management
     business) of the Company and its Restricted Subsidiaries in an aggregate
     principal amount (or accreted value, as applicable), including all
     Permitted Refinancing Indebtedness incurred to refund, refinance, replace,
     defease or discharge any Indebtedness incurred pursuant to this clause
     (15), not to exceed $30.0 million at any time outstanding (provided that
     any

                                       68

<PAGE>

     Indebtedness created or incurred as a result of set off, cancellation,
     assignment or similar transaction among or between Restricted Subsidiaries
     that engage in Discontinued Business Operations, or among or between such
     Restricted Subsidiaries and other Guarantors in connection with the
     wind-down of the Discontinued Business Operations, shall not be included
     when calculating the foregoing dollar limitation) and (b) Litigation;

          (16) the incurrence of Indebtedness by Dynegy Midwest Generation, Inc.
     or any other Restricted Subsidiary of the Company in satisfaction of the
     obligations of Illinois Power pursuant to the Tilton Lease, including the
     incurrence of any obligation to pay "Rent" or the "Purchase Amount" (each
     as defined in the Tilton Lease) in an aggregate principal amount, including
     all Permitted Refinancing Indebtedness incurred to refund, refinance,
     replace, defease or discharge any Indebtedness incurred pursuant to this
     clause (16), not to exceed at any time outstanding $81.0 million less any
     amounts invested pursuant to clause (17) of the definition of "Permitted
     Investments";

          (17) the incurrence of Indebtedness by the Company or any of its
     Restricted Subsidiaries owed to CoGen Lyondell, Inc. or DGPI Inc. to pay
     costs and expenses, so long as such Indebtedness is incurred in the
     ordinary course of business consistent with past practices;

          (18) the incurrence of Indebtedness by the Company or any of its
     Restricted Subsidiaries in the form of loans from an insurance company or
     insurance premium finance company to finance all or any portion of the
     premium of any insurance policy maintained by the Company or any of its
     Restricted Subsidiaries, so long as such insurance policy is written in the
     ordinary course of business and names Dynegy or any of its Restricted
     Subsidiaries as a named beneficiary thereunder; and

          (19) the incurrence by the Company or any of its Restricted
     Subsidiaries of additional Indebtedness in an aggregate principal amount
     (or accreted value, as applicable) at any time outstanding pursuant to this
     clause (19), including all Permitted Refinancing Indebtedness incurred to
     refund, refinance, replace, defease or discharge any Indebtedness incurred
     pursuant to this clause (19), not to exceed $100.0 million.

     (c)  The Company shall not incur, 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 Company or
such Guarantor unless such Indebtedness is also contractually subordinated in
right of payment to the Notes and the applicable Guarantee on substantially
identical terms; provided, however, that no Indebtedness shall be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the
Company solely by virtue of being unsecured or by virtue of being secured on a
parity or junior Lien 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 (19) above,
or is entitled to be incurred pursuant to Section 4.09(a), the Company shall be
permitted to classify such item of Indebtedness on the date of its incurrence,
or later reclassify all or a portion of such item of Indebtedness, in any manner
that complies with this Section 4.09. Indebtedness under the Credit Agreement
and the Subsidiary Facilities outstanding on the date on which Notes are first
issued and authenticated under this Indenture shall initially be deemed to have
been incurred on such date in reliance on the exception provided by clause (1)
of Section 4.09(b). Indebtedness permitted by this Section 4.09 need not be
permitted solely by reference to one provision permitting such Indebtedness but
may be permitted in part by one such provision and in part by one or more other
provisions of this covenant permitting such Indebtedness. Guarantees of, or
obligations in

                                       69

<PAGE>

respect of letters of credit relating to, Indebtedness which is otherwise
included in the determination of a particular amount of Indebtedness of the
Company or its Restricted Subsidiaries shall not be included. If Obligations in
respect of letters of credit are incurred pursuant to the Credit Agreement and
are being treated as incurred pursuant to clause (1) of Section 4.09(b) and such
letters of credit relate to other Indebtedness of the Company or its Restricted
Subsidiaries, then such other Indebtedness of the Company or its Restricted
Subsidiaries shall not be included. 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 in the form of additional shares of
the same class of Disqualified Stock shall not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this Section
4.09; provided, in each such case, that the amount thereof is included in Fixed
Charges of the Company as accrued. Indebtedness shall exclude other obligations
of the Company or any Restricted Subsidiary in existence on the date of this
Indenture that were not included as liabilities or Indebtedness on the
consolidated balance sheet of the Company at the time such obligation was
entered into and subsequently recast for accounting purposes. Notwithstanding
any other provision of this Section 4.09, the maximum amount of Indebtedness
that the Company or any Restricted Subsidiary 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.

     (e)  The amount of any Indebtedness outstanding as of any date shall be:

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

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

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

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

               (B)  the amount of the Indebtedness of the other Person.

Section 4.10  Asset Sales.

     (a)  Dynegy shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:

          (1)  Dynegy (or such Restricted Subsidiary, as the case may be)
     receives 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 (as reasonably determined by Dynegy or such
     Restricted Subsidiary); and

          (2)  at least 75% of the consideration received in the Asset Sale by
     Dynegy or such Restricted Subsidiary is in the form of:

               (A)  cash or Cash Equivalents; provided that for purposes of this
          provision, each of the following shall be deemed to be cash:

                    (i)   any liabilities, as shown on Dynegy's most recent
               consolidated balance sheet, of Dynegy or any Restricted
               Subsidiary (other than contingent liabilities and liabilities
               that are by their terms subordinated to the Notes or any

                                       70

<PAGE>

               Note Guarantee) that are assumed by the transferee of any such
               assets pursuant to a customary novation agreement that releases
               Dynegy or such Restricted Subsidiary from further liability; and

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

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

               and/or

               (B)  Replacement Assets; provided that:

                    (i)   the Fair Market Value of such Replacement Assets shall
               be at least equal to the Fair Market Value of the assets sold or
               otherwise disposed of and, in each case, the Fair Market Value
               shall be evidenced by a resolution of the applicable Board of
               Directors; and

                    (ii)  if the assets or Equity Interests sold in the relevant
               Asset Sale constituted part of the Collateral, then Dynegy or the
               applicable Restricted Subsidiary shall use all commercially
               reasonable efforts to grant as promptly as practicable a
               second-priority Lien (subject to Liens securing Priority Lien
               Debt and Permitted Liens) upon such Replacement Assets as
               security for the Notes.

     (b)  Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, Dynegy (or its Restricted Subsidiaries, as the case may be) may apply
those Net Proceeds:

          (1)  to repay Priority Lien Debt and, if the Priority Lien Debt repaid
     is revolving credit Indebtedness, to correspondingly reduce commitments
     with respect thereto;

          (2)  to repay Parity Lien Debt; provided that any offer to repay
     Parity Lien Debt is made to all Holders and all holders of other Parity
     Lien Debt on a pro rata basis;

          (3)  in the case of any Asset Sale that is not an Illinova Asset Sale,
     to distribute up to 25% of the first $200.0 million of net proceeds from
     such Asset Sale to Dynegy for use by Dynegy upon receipt thereof to repay
     or repurchase all or any portion of the DYN Notes or any Obligations
     thereunder; provided that this clause (3) shall cease to be available for
     application of Net Proceeds after the Termination Date;

          (4)  in the case of an Illinova Asset Sale, to distribute up to 75% of
     the Net Proceeds from such Asset Sale (but not to exceed the sum of (a)
     $225.0 million and (b) the aggregate principal amount then outstanding of
     DYN Notes issued since the date of this Indenture as payable-in-kind
     interest on the DYN Notes, and accrued and unpaid interest, if any, on the
     DYN Notes) to Dynegy for use by Dynegy upon receipt thereof to repay or
     repurchase all or any portion of the DYN Notes or any Obligations
     thereunder; provided that this clause (4) shall cease to be available for
     application of Net Proceeds after the Termination Date; or

                                       71

<PAGE>

          (5)  to either (a) make a capital expenditure or (b) otherwise invest
     in or acquire Replacement Assets; provided that if the assets or Equity
     Interests sold in the relevant Asset Sale constituted part of the
     Collateral, then Dynegy or the applicable Restricted Subsidiary shall use
     all commercially reasonable efforts to promptly as practicable grant a
     second-priority Lien (subject to Liens securing Priority Lien Debt and
     Permitted Liens) upon such Replacement Assets as security for the Notes.

     Pending the final application of any Net Proceeds, the Company shall
deposit the Net Proceeds into the Cash Collateral Account as part of the
Collateral to the extent required by the Security Documents. To the extent that
the Security Documents do not require the Net Proceeds to be so deposited, the
Company may temporarily reduce revolving credit borrowings under the Credit
Agreement.

     (c)  Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph shall constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $50.0 million or at such earlier
time as the Company may elect, the Company shall make an Asset Sale Offer to all
Holders and all holders of other Indebtedness that is pari passu 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
the maximum principal amount of Notes and such other pari passu Indebtedness
that may be purchased out of the Excess Proceeds to the extent required by the
indentures governing other Indebtedness. The offer price in any Asset Sale Offer
shall be equal to 100% of principal amount plus accrued and unpaid interest to
the date of purchase, and shall be payable in cash. If any Excess Proceeds
remain after consummation of an Asset Sale Offer, such Excess Proceeds shall be
released from the Cash Collateral Account and the Company 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 Trustee
shall 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 shall be reset at zero.

     (d)  The Company 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 Section 3.09 or
this Section 4.10, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
Section 3.09 or this Section 4.10 by virtue of such conflict.

Section 4.11  Transactions with Affiliates.

     (a)  The Company shall not, and shall not permit any of its 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 Company (each, an "Affiliate Transaction"), unless:

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

          (2)  the Company delivers to the Trustee:

                                       72

<PAGE>

               (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 the Board of Directors set
          forth in an Officers' Certificate certifying that such Affiliate
          Transaction complies with this covenant and that such Affiliate
          Transaction has been approved by a majority of the disinterested
          members of the Board of Directors; and

               (B)  with respect to any Affiliate Transaction or series of
          related Affiliate Transactions involving aggregate consideration in
          excess of $100.0 million, an opinion as to the fairness to the Company
          or such 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 shall not be deemed to be Affiliate Transactions
and, therefore, shall not be subject to the provisions of Section 4.11(a):

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

          (2)  transactions between or among the Company and any of its
     Restricted Subsidiaries or between Restricted Subsidiaries;

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

          (4)  payment of reasonable directors' fees to Persons who are not
     otherwise Affiliates of the Company;

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

          (6)  Restricted Payments and Permitted Investments that do not violate
     Section 4.07 hereof;

          (7)  Permitted Payments to Parents;

          (8)  commercial transactions in the ordinary course of business
     between or among the Company and/or its Restricted Subsidiaries on the one
     hand and Illinova and/or its Subsidiaries on the other hand;

          (9)  commercial transactions in the ordinary course of business
     between or among the Company and/or its Restricted Subsidiaries on the one
     hand and Chevron and its Related Parties on the other hand;

          (10) loans or advances to executive officers and directors in the
     ordinary course of business not to exceed $1.0 million in the aggregate
     outstanding at any one time; and

          (11) any agreement, instrument or arrangement as in effect as of the
     date of this Indenture or any amendment thereto or any transaction
     contemplated thereby (including pursuant

                                       73

<PAGE>

     to any amendment thereto) or in any replacement agreement thereto so long
     as any such amendment or replacement agreement is not more disadvantageous
     to the Holders in any material respect than the original agreement as in
     effect on the date of this Indenture as determined by the Company.

Section 4.12  Liens.

     Dynegy shall not, and shall not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind on any asset now owned or hereafter acquired, except Permitted Liens.

Section 4.13  Business Activities.

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

Section 4.14  Corporate Existence.

     Except as otherwise permitted by Article 5 or Section 10.04 hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect:

          (1)  its corporate existence, and the corporate, partnership or other
     existence of each of its Restricted Subsidiaries, in accordance with the
     respective organizational documents (as the same may be amended from time
     to time) of the Company or any such Restricted Subsidiary; and

          (2)  the rights (charter and statutory), licenses and franchises of
     the Company and its Restricted Subsidiaries;

     provided, however, that the Company shall not be required to preserve any
such right, license or franchise, or the corporate, partnership or other
existence of any of its Restricted Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Restricted Subsidiaries, taken as a whole,
and that the loss thereof is not adverse in any material respect to the Holders
of the Notes.

Section 4.15  Offer to Repurchase Upon Change of Control.

     (a)  If a Change of Control occurs, and unless the Company has exercised
its right to redeem the Notes pursuant to Section 3.07 hereof, the Company shall
make an offer (the "Change of Control Offer") to repurchase all or any part
(equal to $1,000 or an integral multiple of $1,000) of that Holder's Notes for a
payment in cash equal to 101% of the aggregate principal amount of Notes
repurchased plus accrued and unpaid interest, if any, on the Notes repurchased,
to the date of purchase, subject to the rights of Holders on the relevant record
date to receive interest due on the relevant interest payment date (the "Change
of Control Payment"). Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Notes on the Change of Control Payment Date specified in the notice, which date
shall be no earlier than 30 days and no later than 60 days from the date such
notice is mailed, stating,

          (1)  that the Change of Control Offer is being made pursuant to this
     Section 4.15 and that all Notes tendered will be accepted for payment;

                                       74

<PAGE>

          (2)  the purchase price and the purchase date, which shall be no
     earlier than 30 days and no later than 60 days from the date such notice is
     mailed (the "Change of Control Payment Date");

          (3)  that any Note not tendered will continue to accrue interest;

          (4)  that, unless the Company defaults in the payment of the Change of
     Control Payment, all Notes accepted for payment pursuant to the Change of
     Control Offer will cease to accrue interest after the Change of Control
     Payment Date;

          (5)  that Holders electing to have any Notes purchased pursuant to a
     Change of Control Offer will be required to surrender the Notes, with the
     form entitled "Option of Holder to Elect Purchase" on the reverse of the
     Notes completed, to the Paying Agent at the address specified in the notice
     prior to the close of business on the third Business Day preceding the
     Change of Control Payment Date;

          (6)  that Holders will be entitled to withdraw their election if the
     Paying Agent receives, not later than the close of business on the second
     Business Day preceding the Change of Control Payment Date, a telegram,
     telex, facsimile transmission or letter setting forth the name of the
     Holder, the principal amount of Notes delivered for purchase, and a
     statement that such Holder is withdrawing his election to have the Notes
     purchased; and

          (7)  that Holders whose Notes are being purchased only in part will be
     issued new Notes equal in principal amount to the unpurchased portion of
     the Notes surrendered, which unpurchased portion must be equal to $1,000 in
     principal amount or an integral multiple thereof.

     The Company 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 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
provisions of this Section 4.15 of this Indenture, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.15 by virtue of such compliance.

     (b)  On the Change of Control Payment Date, the Company shall, 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 Officers' Certificate stating the
     aggregate principal amount of Notes or portions of Notes being purchased by
     the Company.

     The Paying Agent shall promptly mail to each Holder properly tendered the
Change of Control Payment for such Notes, and the Trustee shall 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 shall be in a principal amount
of $1,000 or an integral multiple of $1,000. The Company shall publicly announce
the results of the Change of Control Offer on or as soon as practicable after
the Change of Control Payment Date.

                                       75

<PAGE>

     (c)  Notwithstanding anything to the contrary in this Section 4.15, the
Company shall 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
Section 4.15 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 hereof unless and until there is a default in payment of the
applicable redemption price.

Section 4.16  Limitation on Sale and Leaseback Transactions.

     The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction; provided that
the Company or any Restricted Subsidiary may enter into a Sale and Leaseback
Transaction if:

          (1)  the Company or that Restricted Subsidiary, as applicable, could
     have (a) incurred Indebtedness in an amount equal to the Attributable Debt
     relating to such Sale and Leaseback Transaction under the Fixed Charge
     Coverage Ratio test set forth in Section 4.09(a) hereof and (b) incurred a
     Lien to secure such Indebtedness pursuant to Section 4.12 hereof;

          (2)  the gross cash proceeds of that Sale and Leaseback Transaction
     are at least equal to the Fair Market Value, as determined in good faith by
     the Board of Directors 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 Company applies the proceeds of such transaction in compliance
     with, Section 4.10 hereof.

Section 4.17  Additional Note Guarantees.

     If after the date of this Indenture, the Company or any of its Restricted
Subsidiaries acquires or creates another Domestic Subsidiary that is required to
become a guarantor of any borrowings under the Credit Facilities, then after the
date of this Indenture, that newly acquired or created Domestic Subsidiary will
become a Subsidiary Guarantor and execute a supplemental indenture and deliver
an opinion of counsel satisfactory to the Trustee within 60 days of the date on
which it was acquired or created; provided, that any Domestic Subsidiary that
constitutes an Immaterial Subsidiary need not become a Guarantor until such time
as it ceases to be an Immaterial Subsidiary.

Section 4.18  Designation of Restricted and Unrestricted Subsidiaries.

     The Board of Directors 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 Company and its
Restricted Subsidiaries in the Subsidiary designated as Unrestricted shall be
deemed to be an Investment made as of the time of the designation and shall
reduce the amount available for Restricted Payments under Section 4.07(a) or
under one or more clauses of the definition of Permitted Investments, as
determined by the Company. That designation shall 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 may redesignate any Unrestricted Subsidiary to be a Restricted
Subsidiary if that redesignation would not cause a Default.

Section 4.19  No Amendment to Subordination Provisions.

                                       76

<PAGE>

     Without the consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding, the Company shall not amend,
modify or alter the Subordinated Debenture Indenture in any way to:

          (1)  increase the rate of or accelerate the time for payment of
     interest on any Subordinated Debentures;

          (2)  increase the principal of, advance the final maturity date of or
     shorten the Weighted Average Life to Maturity of any Subordinated
     Debentures;

          (3)  alter the redemption provisions or the price or terms at which
     the Company is required to offer to purchase any Subordinated Debentures;
     or

          (4)  amend the subordination provisions of the Subordinated Debenture
     Indenture.

Section 4.20  Payments for Consent.

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

Section 4.21  Changes in Covenants when Notes Rated Investment Grade.

     (a)  If on any date following the date of this Indenture:

          (1)  the applicable series of Notes are rated Baa3 or better by
     Moody's and BBB- or better by S&P (or, if either such entity ceases to rate
     such Notes for reasons outside of the control of the Company, the
     equivalent investment grade credit rating from any other "nationally
     recognized statistical rating organization" within the meaning of Rule
     15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a
     replacement agency (a "Replacement Agency")); and

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

          then, beginning on that day (the "Rating Event Date") and subject to
     the reinstatement provisions described below, the following provisions of
     this Indenture shall be suspended with respect to such series of Notes:
     Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.15, 4.18, clauses 1(a) and 3
     of Section 4.16 and clause 4 of Section 5.01(a).

     (b)  Following the Rating Event Date and so long as any of the Notes are
outstanding and no Downgrade Date subsequently has occurred and is continuing,
the Company shall not pledge, mortgage, hypothecate or permit to exist any
mortgage, pledge or other Lien upon any property or assets at any time directly
owned by the Company to secure any Indebtedness without making effective
provisions whereby the Notes shall be equally and ratably secured with any and
all such Indebtedness and with any other Indebtedness similarly entitled to be
equally and ratably secured; provided, however, that this restriction shall not
apply to or prevent the creation or existence of: (a) Liens existing on the
Rating Event Date, (b) purchase money Liens which do not exceed the cost or
value of the purchased property or assets, and (c) other Liens which, taken
together with the Liens described in the preceding clauses (a) and (b) of this

                                       77

<PAGE>

sentence, have an aggregate principal amount that does not, on the date of
incurrence, exceed 15% of the Company's Consolidated Net Assets.

     (c)  Notwithstanding Sections 4.21(a) and (b) hereof, if on any date after
the Rating Event Date the ratings assigned by Moody's and S&P should decline to
below Baa3 and BBB-, respectively (or, if either such entity ceases to rate such
Notes for reasons outside the control of the Company, the Replacement Agency's
assigned rating should decline to below the equivalent of such Moody's or S&P
rating), then all of the foregoing suspended provisions described in Section
4.21(a) shall be reinstated as of and from such date of rating decline (the
"Downgrade Date"). Upon the occurrence of a Downgrade Date, the following shall
occur:

          (1)  calculations under Section 4.07 will be made as if that Section
     4.07 had been in effect since the date of this Indenture except that no
     Default will be deemed to have occurred solely by reason of a Restricted
     Payment made while Section 4.07 was suspended;

          (2)  if Note Guarantees were released during the period between the
     Rating Event Date and Downgrade Date pursuant to Section 10.05 then the
     Company shall use all commercially reasonable efforts to cause each of the
     Persons who were Guarantors before the Rating Event Date to execute new
     Note Guarantees and to execute one or more supplemental indentures and
     deliver one or more Opinions of Counsel satisfactory to the Trustee within
     60 days of the Downgrade Date; provided that any such Person that
     constitutes an Immaterial Subsidiary on such Downgrade Date shall not be
     required to become a Guarantor until such time as it may cease to be an
     Immaterial Subsidiary;

          (3)  no Default shall be deemed to have occurred to the extent that
     Liens were released in accordance with the terms of this Indenture during
     the period following the Rating Event Date and the Downgrade Date; and

          (4)  if Liens on Equity Interests securing the Notes were released
     during the period between the Rating Event Date and Downgrade Date, then
     the Company and the Guarantors shall use all commercially reasonable
     efforts to pledge, as security for the Notes following the Downgrade Date,
     the Equity Interests that had been subject to Liens securing the Notes
     before the Rating Event Date and to execute one or more supplemental
     indentures and/or supplements to the Security Documents and to deliver one
     or more Opinions of Counsel, in each case satisfactory to the Trustee,
     within 60 days of the Downgrade Date; provided that no Default shall be
     deemed to have occurred solely by reason of the new pledge of such Equity
     Interests to secure the Notes if such new Liens would cause the Company and
     the Guarantors to exceed the limit on Parity Liens and other Liens imposed
     pursuant to the definition of Permitted Liens.

     No intervening acts or events occurring while such covenants set forth in
Section 4.21(a) hereof were suspended which would constitute a default if such
covenants had been in effect shall give rise to any default after the
reinstatement of such covenants.

Section 4.22  Further Assurances; Collateral Inspections and Reports; Costs and
Indemnification.

     (a)  Upon the reasonable request of the Collateral Trustee at any time and
from time to time, the Company shall, and shall cause each of its Restricted
Subsidiaries to, promptly execute, acknowledge and deliver such Security
Documents, instruments, certificates, notices and other documents and take such
other actions as the Collateral Trustee may reasonably require or request to
create, perfect, protect, assure or, subject to Article 10, enforce the Liens
and benefits intended to be conferred as contemplated by this Indenture for the
benefit of the holders of Note Obligations. If the Company or such Restricted

                                       78

<PAGE>

Subsidiary fails to do so, the Collateral Trustee is hereby irrevocably
authorized and empowered, with full power of substitution, to execute,
acknowledge and deliver such Security Documents, instruments, certificates,
notices and other documents and, subject to Article 10, take such other actions
in the name, place and stead of the Company or such Restricted Subsidiary, but
the Collateral Trustee shall have no obligation to do so and no liability for
any action taken or omitted by it in good faith in connection therewith.

     (b)  Upon request of the Collateral Trustee at any time and from time to
time, the Company shall, and shall cause its Restricted Subsidiaries to, (i)
permit the Collateral Trustee or any advisor, auditor, consultant, attorney or
representative acting for the Collateral Trustee, upon reasonable notice to the
Company and during normal business hours (provided that no notice requirement or
restriction on hours shall apply if an Event of Default is continuing), to visit
and inspect any of the property of the Company and its Restricted Subsidiaries,
to review, make extracts from and copy the books and records of the Company and
its Restricted Subsidiaries relating to any such property, and to discuss any
matter pertaining to any such property with the officers and employees of the
Company and its Restricted Subsidiaries, and (ii) deliver to the Collateral
Trustee such reports, including valuations, relating to any such property or any
Lien thereon as the Collateral Trustee may reasonably request.

     (c)  The Company shall bear and pay all legal expenses, collateral audit
and valuation costs, filing fees, insurance premiums and other costs associated
with the performance of the obligations of the Company and its Restricted
Subsidiaries set forth in this Section 4.19 and also shall pay, or promptly
reimburse the Trustee and Collateral Trustee for, all costs and expenses
incurred by the Trustee or Collateral Trustee in connection therewith, including
all reasonable fees and charges of any advisors, auditors, consultants,
attorneys or representatives acting for the Trustee or for the Collateral
Trustee.

     (d)  The Company shall pay, reimburse the Trustee, the Collateral Trustee
and the Holders of Notes for, and, to the fullest extent lawful, defend and
indemnify each of them against, all claims, liabilities, taxes, costs and
expenses of every type and nature (including, without limitation, the reasonable
fees and charges of attorneys, advisors, auditors and consultants acting for any
of them) incurred by any of them as a result of or in connection with the
creation, perfection, protection or enforcement of the Note Liens or the
exercise or enforcement of any right or remedy under the Security Documents or
to prove, preserve, protect or enforce any Note Lien or any claim based upon the
Note Liens in any legal proceeding, including any Insolvency or Liquidation
Proceeding.

                                   ARTICLE 5.
                                   SUCCESSORS

Section 5.01  Merger, Consolidation, or Sale of Assets.

     (a)  The Company may not, directly or indirectly, consolidate or merge with
or into another Person (whether or not the Company is the surviving
corporation), or sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to another
Person; unless:

          (1)  either: (A) the Company is the surviving corporation; or (B) the
     Person formed by or surviving any such consolidation or merger (if other
     than the Company) 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) is a partnership or limited
     liability company organized or existing under the laws of the United
     States, any state thereof 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

                                       79

<PAGE>

     States, any state thereof or the District of Columbia which corporation
     becomes a co-issuer of the Notes pursuant to agreements duly and validly
     executed by the Trustee;

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

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

          (4)  the Company or the Person formed by or surviving any such
     consolidation or merger (if other than the Company), or to which such sale,
     assignment, transfer, conveyance or other disposition has been made:

               (A)  shall have Consolidated Net Assets immediately after the
          transaction equal to or greater than the Consolidated Net Assets of
          the Company immediately preceding the transaction; and

               (B)  shall, on the date of such transaction after giving pro
          forma effect thereto and any related financing transactions as if the
          same had occurred at the beginning of the applicable four-quarter
          period have a pro forma Fixed Charge Coverage Ratio that is at least
          equal to the actual Fixed Charge Coverage Ratio of the Company as of
          such date.

     The Company shall not, directly or indirectly, lease all or substantially
all of its properties or assets, in one or more related transactions, to any
other Person.

     (b)  Section 5.01(a) shall not apply to:

          (1)  a merger of the Company with an Affiliate solely for the purpose
     of reincorporating the Company in another jurisdiction; and

          (2)  any sale, transfer, assignment, conveyance, lease or other
     disposition of assets between or among the Company and its Restricted
     Subsidiaries.

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 the
Company in a transaction that is subject to, and that complies with the
provisions of, Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company 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 the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale or other
disposition of all or substantially all of the properties or assets of the
Company and its Restricted Subsidiaries taken as a whole in a transaction that
is subject to, and that complies with the provisions of, Section 5.01 hereof.

                                       80

<PAGE>

                                   ARTICLE 6.
                              DEFAULTS AND REMEDIES

Section 6.01  Events of Default.

     Each of the following is an Event of Default for each series of Notes:

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

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

          (3)  failure by Dynegy or any of its Restricted Subsidiaries to comply
     with the provisions of Sections 4.07, 4.09, 4.10, 4.15 or 5.01 hereof for
     30 days after written notice from the Trustee or the Holders of at least
     25% in aggregate principal amount of the affected series of Notes then
     outstanding to comply with such provisions;

          (4)  failure by Dynegy or any of its Restricted Subsidiaries for 60
     days after written notice from the Trustee or the Holders of at least 25%
     in aggregate principal amount of the applicable series of 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 Dynegy or any of its Restricted
     Subsidiaries (or the payment of which is guaranteed by Dynegy or any of its
     Restricted Subsidiaries) whether such Indebtedness or guarantee now exists,
     or is created after the date of this Indenture, if that default:

               (A)  is caused by a failure to pay principal of, or interest or
          premium, if any, on such Indebtedness prior to 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,

and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$50.0 million or more; provided that, if such default shall be remedied or cured
by Dynegy or such Restricted Subsidiary or waived by the holder of such
Indebtedness, in each case before acceleration of the Notes, then the Event of
Default under the indenture caused by reason thereof shall be deemed likewise to
have been remedied, cured or waived without further action on the part of the
Trustee, any Holder of Notes or any other Person;

          (6)  failure by Dynegy or any of its 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)  breach by Dynegy or any of its Restricted Subsidiaries of any
     representation or warranty or agreement in the Security Documents, the
     repudiation by Dynegy or any of its Restricted Subsidiaries of any of its
     obligations under the Security Documents or the

                                       81

<PAGE>

     unenforceability of the Security Documents against Dynegy or any of its
     Restricted Subsidiaries for any reason;

          (8)  except as permitted by this Indenture, the Note Guarantee by
     Dynegy, Illinova or any Significant Subsidiary of the Company 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 Dynegy, Illinova or any
     Subsidiary Guarantor that is a Significant Subsidiary of the Company, or
     any Person acting on behalf of any such Guarantor, shall deny or disaffirm
     its obligations under its Guarantee;

          (9)  the Company or any of its Significant Subsidiaries or any group
     of Subsidiaries that, taken as a whole, would constitute a Significant
     Subsidiary pursuant to or within the meaning of Bankruptcy Law:

               (A)  commences a voluntary case,

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

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

               (D)  makes a general assignment for the benefit of its creditors,
          or

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

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

               (A)  is for relief against the Company or any of its Significant
          Subsidiaries or any group of Subsidiaries that, taken as a whole,
          would constitute a Significant Subsidiary in an involuntary case;

               (B)  appoints a custodian of the Company or any of its
          Significant Subsidiaries or any group of Subsidiaries that, taken as a
          whole, would constitute a Significant Subsidiary or for all or
          substantially all of the property of the Company or any of its
          Significant Subsidiaries or any group of Subsidiaries that, taken as a
          whole, would constitute a Significant Subsidiary; or

               (C)  orders the liquidation of the Company or any of its
          Significant Subsidiaries or any group of Subsidiaries that, taken as a
          whole, would constitute a Significant Subsidiary;

          and the order or decree remains unstayed and in effect for 60
          consecutive days.

Section 6.02  Acceleration.

     In the case of an Event of Default specified in clause (9) or (10) of
Section 6.01 hereof, with respect to Dynegy, any Restricted Subsidiary that is a
Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary, all outstanding Notes shall
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 applicable

                                       82

<PAGE>

series of Notes then outstanding may declare all the Notes of such series to be
due and payable immediately.

Section 6.03  Other Remedies.

     If an Event of Default occurs and is continuing, the Trustee may 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.

     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 of any Series by notice to the Trustee may on behalf of
the Holders of all of the Notes of such series waive an 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, the Notes (including in connection with an offer to purchase);
provided, however, that the Holders of a majority in aggregate principal amount
of the then outstanding Notes of any series may rescind an acceleration and its
consequences with respect to such series of Notes, 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 outstanding Notes of
any series may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or
power conferred on it with respect to such series of Notes. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
that the Trustee determines may be unduly prejudicial to the rights of other
Holders of Notes of such series or that may involve the Trustee in personal
liability.

Section 6.06  Limitation on Suits.

     A Holder of any series of Notes may pursue a remedy with respect to this
Indenture or such series of Notes only if:

          (1)  the Holder of such series of Note gives to the Trustee written
     notice of a continuing Event of Default;

          (2)  the Holders of at least 25% in principal amount of the then
     outstanding Notes of such series make a written request to the Trustee to
     pursue the remedy;

          (3)  such Holders of Notes of such series offer and, if requested,
     provide to the Trustee reasonable security or indemnity satisfactory to the
     Trustee against any loss, liability or expense;

                                       83

<PAGE>

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

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

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

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 of any series 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 offer to purchase), 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; provided that a
Holder shall not have the right to institute any such suit for the enforcement
of payment if and to the extent that the institution or prosecution thereof or
the entry of judgment thereof would, under applicable law, result in the
surrender, impairment, waiver or loss of the Lien of this Indenture upon any
property subject to such Lien.

Section 6.08  Collection Suit by Trustee.

     If an Event of Default specified in Section 6.01(1) or (2) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
Trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the 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  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 Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the 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.

                                       84

<PAGE>

Section 6.10  Priorities.

     If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:

          First: to the Trustee and the Collateral Trustee, their agents and
     attorneys for amounts due under Section 7.07 and Section 12.06 hereof,
     including payment of all compensation, expense and liabilities incurred,
     and all advances made, by the Trustee and the Collateral Trustee and the
     costs and expenses of collection;

          Second: to 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

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

     The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10. If a record date is fixed, the
Trustee shall mail, by first class mail, to such Holders of record of the series
of Notes affected a notice at least 30 days but not more than 60 days before the
payment date. Such notice shall state: (1) that a payment is being made pursuant
to this Section 6.10, (2) the relevant Default or Event of Default and the
circumstances giving rise to the collection of money pursuant to this Section
6.10, (3) the payment date and (4) the amount of such payment per $1,000 of
Notes of such series. Notwithstanding the foregoing, if the payment pursuant to
this Section 6.10 is in respect of principal on any series of Notes, then such
principal payment will be conducted in accordance with the redemption provisions
set forth in Sections 3.02, 3.03, 3.04 and 3.06 hereof as if such payment were a
redemption by the Company.

Section 6.11  Undertaking for Costs.

     In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as 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 6.11
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 of any series.

                                   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
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:

                                       85

<PAGE>

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

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

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

          (1)  this paragraph does not limit the effect of paragraph (b) of this
     Section 7.01;

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

          (3)  the Trustee shall not be liable with respect to any action it
     takes or omits to take in good faith in accordance with a direction
     received by it pursuant to Section 6.05 hereof.

     (d)  Whether or not thereof 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)  No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.

     (f)  The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held 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.

     (b)  Before the Trustee acts or refrains from acting, it may require an
Officers' 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 Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.

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

                                       86

<PAGE>

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

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

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

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 Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
trustee (if this Indenture has been qualified under the TIA) 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 Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital hereof 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 or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.

Section 7.06 Reports by Trustee to Holders of the Notes.

     (a)  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 TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).

     (b)  A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed by the Trustee to the Company and filed by the Trustee
with the SEC and each stock exchange on which the

                                       87

<PAGE>

Notes are listed, if any such listing should ever occur, in accordance with TIA
Section 313(d). The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange.

     (c)  Within 30 days after the date of this Indenture and within 30 days
after each January 15, April 15, July 15 and October 15 following the date of
this Indenture, for so long as any Series A Notes remain outstanding, the
Trustee shall mail to the Holders of Series A Notes a brief report dated as of
such reporting date of the Applicable Eurodollar Rate then in effect with
respect to the Series A Notes as the same has been notified by the Company to
the Trustee pursuant to the terms of this Indenture.

Section 7.07  Compensation and Indemnity.

     (a)  The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all 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.

     (b)  The Company and the Guarantor shall indemnify the Trustee against any
and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company, the Guarantors or any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee shall notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company or any of the Guarantors of their obligations hereunder. The
Company or such Guarantor shall defend the claim and the Trustee shall cooperate
in the defense. The Trustee may have separate counsel and the Company shall pay
the reasonable fees and expenses of such counsel. Neither the Company nor any
Guarantor need pay for any settlement made without its consent, which consent
shall not be unreasonably withheld.

     (c)  The obligations of the Company and the Guarantors under this Section
7.07 shall survive the satisfaction and discharge of this Indenture.

     (d)  To secure the Company's payment obligations 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.

     (e)  When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(9) or (10) 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.

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

Section 7.08  Replacement of Trustee.

     (a)  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.

                                       88

<PAGE>

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

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

          (2)  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;

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

          (4)  the Trustee becomes incapable of acting.

     (c)  If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes of all series
hereunder, voting as a single class, may appoint a successor Trustee to replace
the successor Trustee appointed by the Company.

     (d)  If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes of
all series hereunder, voting as a single class, may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

     (e)  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, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

     (f)  A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. 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 Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring 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 $100 million
as set forth in its most recent published annual report of condition.

                                       89

<PAGE>

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

Section 7.11  Preferential Collection of Claims Against Company.

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

                                   ARTICLE 8.
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01  Option to Effect Legal Defeasance or Covenant Defeasance.

     The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes of any
series upon compliance with the conditions set forth below in this Article 8.

Section 8.02  Legal Defeasance and Discharge.

     Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02 with respect to any series of Notes, the Company
and each of the Guarantors 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 all outstanding Notes of such series (including the
Note Guarantees) on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company and the Guarantors shall be deemed to have paid and discharged the
entire Indebtedness represented by the outstanding Notes of such series
(including the Note Guarantees), 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 clauses (1) and (2) below, with
respect for such series and to have satisfied all their other obligations under
such series of Notes, the Note Guarantees with respect to such series and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder:

          (1)  the rights of Holders of outstanding Notes of such series to
     receive payments in respect of the principal of, or interest or premium, if
     any, on such series of Notes when such payments are due from the trust
     referred to in Section 8.04 hereof;

          (2)  the Company's obligations with respect to such series of Notes
     under Article 2 and Section 4.02 hereof;

          (3)  the rights, powers, trusts, duties and immunities of the Trustee
     hereunder and the Company's and the Guarantors' obligations in connection
     therewith; and

          (4)  this Article 8.

     Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.

                                       90

<PAGE>

Section 8.03  Covenant Defeasance.

     Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 with respect to any series of Notes, the Company
and the Guarantors shall, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, be released from each of their obligations under
the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13,
4.15, 4.16, 4.17, 4.18, 4.19, 4.21, 4.22 and 10.03 hereof and clause (4) of
Section 5.01(a) hereof with respect to the outstanding Notes of such series on
and after the date the conditions set forth in Section 8.04 hereof are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes of such series 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
series of Notes shall not be deemed outstanding for accounting purposes). For
this purpose, Covenant Defeasance means that, with respect to the outstanding
Notes and Note Guarantees of the relevant series, the Company and the Guarantors
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 hereof to any such covenant or
by reason of any reference in any such covenant to any other provision hereof 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 with respect to such series of
Notes, but, except as specified above, the remainder of this Indenture and such
Notes and Note Guarantees of such series shall be unaffected thereby and this
Indenture in its entirety and other series of Notes and the Note Guarantees also
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(3) through 6.01(6) hereof shall not constitute Events of Default.

Section 8.04  Conditions to Legal or Covenant Defeasance.

     In order to exercise either Legal Defeasance or Covenant Defeasance under
either Section 8.02 or 8.03 hereof:

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

          (2)  in the case of an election under Section 8.02 hereof, the Company
     has delivered to the Trustee an Opinion of Counsel reasonably acceptable to
     the Trustee confirming that:

               (A)  the Company has received from, or there has been published
          by, the Internal Revenue Service a ruling; or

               (B)  since the date of this Indenture, there has been a change in
          the applicable federal income tax law,

          in either case to the effect that, and based thereon such Opinion of
          Counsel shall confirm that, the Holders of the outstanding Notes of
          the series being defeased will not recognize income, gain or loss for
          federal income tax purposes as a result of such Legal Defeasance

                                       91

<PAGE>

          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;

          (3)  in the case of an election under Section 8.03 hereof, the Company
     must deliver 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 shall have occurred and be
     continuing on the date of such deposit (other than a Default or Event of
     Default resulting from the borrowing of funds to be applied to such
     deposit);

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

          (6)  the Company must deliver to the Trustee an Officers' Certificate
     stating that the deposit was not made by the Company with the intent of
     preferring the Holders of Notes of such series over the other creditors of
     the Company with the intent of defeating, hindering, delaying or defrauding
     any other creditors of the Company or others; and

          (7)  the Company must deliver to the Trustee an Officers' Certificate
     and an Opinion of Counsel, each stating that all conditions precedent
     provided for or relating to the Legal Defeasance or the Covenant Defeasance
     have been complied with.

     Notwithstanding the foregoing, the Opinion of Counsel required by clause
(2) above need not be delivered if all Notes of this series being defeased not
theretofore delivered to the Trustee for cancellation (1) have become due and
payable or (2) will become due and payable on the maturity date 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 Company.

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 non-callable 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
of the series being defeased 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 Company
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, if any,
and interest, but such money need not be segregated from other funds except to
the extent required by law.

     The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 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.

                                       92

<PAGE>

     Notwithstanding anything in this Article 8 to the contrary, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized
investment bank, appraisal firm or 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(1) 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 the Company.

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

Section 8.07  Reinstatement.

     If the Trustee or Paying Agent is unable to apply any United States dollars
or non-callable Government Securities in accordance with Section 8.02 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 Company's and the Guarantors' obligations under this
Indenture and the Notes and the Note Guarantees 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,
however, that, if the Company makes any payment of principal of, if any, or
interest on any Note following the reinstatement of its obligations, the Company
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 of this Indenture, the Company, the
Guarantors, the Trustee and the Collateral Trustee may amend or supplement this
Indenture, the Notes, the Note Guarantees or the Security Documents without the
consent of any Holder of a Note:

          (1)  to cure any ambiguity, defect or inconsistency;

                                       93

<PAGE>

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

          (3)  to provide for the assumption of the Company's or a Guarantor's
     obligations to the Holders of the Notes by a successor to the Company
     pursuant to Article 5 or Article 10 hereof;

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

          (5)  to comply with requirements of the SEC in order to effect or
     maintain the qualification of this Indenture under the TIA;

          (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 Note Guarantee with respect to the Notes;

          (8)  to make, complete or confirm any grant of Collateral permitted or
     required by this Indenture or any release of Collateral that becomes
     effective as set forth in this Indenture;

          (9)  to reflect any waiver or termination of any right arising under
     Article 11 that otherwise would be enforceable by any holder of a Parity
     Lien Obligation or Parity Lien, if such waiver or termination is set forth
     or provided in the indenture or agreement governing or giving rise to such
     Parity Lien Obligation or Parity Lien; provided, that no such waiver or
     amendment pursuant to this clause (9) shall adversely affect the rights of
     Holders of Notes; or

          (10) to conform the text of this Indenture, the Notes, the Note
     Guarantees or the Security Documents to any provision that was contained in
     the Offering Circular, dated as of August 1, 2003, that was used by the
     Initial Purchasers in connection with the distribution of the Initial Notes
     to the extent that such document contained a description of any provision
     of this Indenture, the Notes, the Note Guarantees or the Security Documents
     that was intended to be a verbatim recitation of such provision.

     Upon the request of the Company 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 and the Collateral Trustee shall join with the Company
and the Guarantors 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 thereof contained, but
neither the Trustee nor the Collateral Trustee shall be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.

Section 9.02  With Consent of Holders of Notes.

     Except as provided below in this Section 9.02, the Company, the Trustee and
the Collateral Trustee may amend or supplement this Indenture (including,
without limitation, Section 3.09, 4.10 and 4.15 hereof), the Notes and the Note
Guarantees with respect to a particular series of Notes with the consent of the
Holders of at least a majority in principal amount of such series of Notes
(including,
                                       94

<PAGE>

without limitation, Additional Notes of such series, if any), as the case may
be, then outstanding (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, if any, or interest on any series of Notes, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture, the Notes or the Note
Guarantees may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes of such series (including
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes). Section 2.08 hereof shall determine which Notes are
considered to be "outstanding" for purposes of this Section 9.02.

     Upon the request of the Company accompanied by a resolution of its 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 and
the Collateral Trustee shall join with the Company in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
directly affects the Trustee or the Collateral Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee or the
Collateral Trustee may in its discretion, but shall not be obligated to, enter
into such amended or supplemental Indenture. The Collateral Trustee shall sign
any amendment to the Security Documents pursuant to this Article 9 if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Collateral Trustee.

     It is 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 is sufficient if such consent approves the substance thereof.

     After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect thereof, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes of any series then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes of such series. However, with
respect to each series of Notes without the consent of each Holder of such
series affected, 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
     of such series or alter or waive any of the provisions with respect to the
     redemption of such series of Notes (other than Sections 4.10 and 4.15
     hereof);

          (3)  reduce the rate of or change the time for payment of interest,
     including default interest, on any Note of such series;

          (4)  waive a Default or Event of Default in the payment of principal
     of or premium, if any, or interest on such series of Notes (except a
     rescission of acceleration of such Notes by the Holders of at least a
     majority in aggregate principal amount of the then outstanding Notes of
     such series and a waiver of the payment default that resulted from such
     acceleration);

                                       95

<PAGE>

          (5)  make any Note payable in money other than that stated in such
     Notes;

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

          (7)  waive a redemption payment with respect to any such Note (other
     than a payment required pursuant to Section 4.10 or 4.15 hereof);

          (8)  release any Guarantor from any of its obligations under its Note
     Guarantee or this Indenture, except in accordance with the terms of this
     Indenture.

          (9)  release any Collateral from the Liens created by the Security
     Documents except as specifically provided in this Indenture and the
     Security Documents; or

          (10) make any change in Section 6.04 or 6.07 hereof or in the
     foregoing amendment and waiver provisions.

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.

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 Company 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 which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, those Persons who
were Holders at such record date (or their duly designated proxies), and only
those Persons shall be entitled 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 90 days after such record
date. The Company shall inform the Trustee in writing of the fixed record date,
if applicable.

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 Company 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.

                                       96

<PAGE>

Section 9.06   Trustee to Sign Amendments, etc.

     The Trustee and the Collateral Trustee shall sign any amended or
supplemental Indenture authorized pursuant to this Article 9 if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee or the Collateral Trustee. The Collateral Trustee
shall sign any amended or supplemental Indenture authorized pursuant to this
Article and any amendment to the Security Documents pursuant to this Article 9
if the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Collateral Trustee. Except in the case of a supplemental
Indenture required to be delivered pursuant to Section 4.17 hereof, the Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee and
the Collateral 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 12.04 hereof, an Officers' Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental Indenture is
authorized or permitted by this Indenture.

                                   ARTICLE 10.
                                 NOTE GUARANTEES

Section 10.01  Guarantee.

     (a) Subject to this Article 10, each of the Guarantors 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 Company hereunder or thereunder, that:

          (1) the principal of, premium, if any, and interest 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
     Company 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

          (2) 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 will 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.

     (b) The Guarantors hereby agree that their obligations hereunder are
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 the Company, 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 the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.

                                       97

<PAGE>

     (c) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, will be reinstated in full
force and effect.

     (d) Each Guarantor agrees that it will 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. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors for
the purpose of this Note Guarantee. The Guarantors will 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 Note Guarantee.

Section 10.02  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 Note 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
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will be limited to the maximum amount that 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 10, result in the obligations of such Guarantor
under its Note Guarantee not constituting a fraudulent transfer or conveyance.

Section 10.03  Execution and Delivery of Note Guarantee.

     To evidence its Note Guarantee set forth in Section 10.01, each Guarantor
hereby agrees that a notation of such Note Guarantee substantially in the form
attached as Exhibit E hereto will be endorsed by an Officer of such Guarantor on
each Note authenticated and delivered by the Trustee and that this Indenture
will be executed on behalf of such Guarantor by one of its officers. Upon such
execution, the new Guarantor(s) shall be added to Schedule I hereto.

     Each Guarantor hereby agrees that its Note Guarantee set forth in Section
10.01 will remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Note Guarantee.

     If an Officer whose signature is on this Indenture or on the Note Guarantee
no longer holds that office at the time the Trustee authenticates the Note on
which a Note Guarantee is endorsed, the Note Guarantee will be valid
nevertheless.

     The delivery of any Note by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Note Guarantee set forth in this
Indenture on behalf of the Guarantors.

                                       98

<PAGE>

     In the event that the Company creates or acquires any Domestic Subsidiary
after the date of this Indenture, if required by Section 4.17 hereof, the
Company will cause such Domestic Subsidiary to comply with the provisions of
Section 4.17 hereof and this Article 10, to the extent applicable.

Section 10.04  Guarantors May Consolidate, etc., on Certain Terms.

     (a) Except as otherwise provided in Section 10.05, 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 Company or another Guarantor,
unless:

          (1) immediately after giving effect to such transaction, no Default
     or Event of Default exists; and

          (2) either:

               (A) subject to Section 10.05 hereof, the Person acquiring the
          property in any such sale or disposition or the Person formed by or
          surviving any such consolidation or merger (if not such Guarantor)
          unconditionally assumes all the obligations of that Guarantor,
          pursuant to a supplemental indenture in form and substance reasonably
          satisfactory to the Trustee and the Collateral Trustee, under this
          Indenture, the Note Guarantee and the Security Documents on the terms
          set forth herein or therein; or

               (B) the Net Proceeds of such sale or other disposition are
          applied in accordance with the applicable provisions of this
          Indenture, including without limitation, Section 4.10 hereof and the
          Intercreditor Agreement.

     (b) 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 Note
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 will 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 Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note
Guarantees so issued will in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.

     (c) 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
Company 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 the
Company or another Guarantor.

Section 10.05  Releases of Guarantees.

     (a) In the event of any sale or other disposition of all or substantially
all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the Capital Stock of any
Guarantor, in each case to a Person that is not (either before or after giving
effect to such transactions) Dynegy or any of its Restricted Subsidiaries, then
such Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or

                                       99

<PAGE>

substantially all of the assets of such Guarantor) will be released and relieved
of any obligations under its Note Guarantee and this Indenture; provided that
the Net Proceeds of such sale or other disposition are applied in accordance
with the applicable provisions of this Indenture, including without limitation
Section 4.10 hereof. Upon delivery by the Company to the Trustee and the
Collateral Trustee of an Officers' Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Company in accordance
with the provisions of this Indenture, including without limitation Section 4.10
hereof, the Trustee and the Collateral Trustee will execute any documents
reasonably required in order to evidence the release of such Guarantor from its
obligations under its Note Guarantee, this Indenture (including removal from
Schedule I hereto) and the Security Documents.

     (b) The Note Guarantee of a Guarantor also shall be released upon:

          (1) the designation by the Company of any of its Restricted
     Subsidiaries that is a Guarantor as an Unrestricted Subsidiary pursuant to
     Section 4.18 hereof;

          (2) with respect to any series of Notes, upon legal defeasance of
     such Notes pursuant to Section 8.02 hereof or satisfaction and discharge of
     such Notes pursuant to Article 13 hereof; or

          (3) with respect to any series of Notes, at any time upon:

               (A) the prior consent of Holders of at least two-thirds in
          aggregate principal amount of Notes of such series then outstanding;

               (B) the consent of the Credit Agreement Agent to the release of
          such Guarantor's Guarantee of all Obligations under the Credit
          Agreement; and

               (C) the contemporaneous release of such Guarantor's Guarantee of
          all Obligations under the Credit Agreement.

     (c) Any Guarantor not released from its obligations under its Note
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 10.

                                   ARTICLE 11.
                              RANKING OF NOTE LIENS

Section 11.01  Agreement for the Benefit of Holders of Priority and Parity
               Liens.

     The Trustee and the Collateral Trustee agree, and each Holder of Notes by
accepting a Note agrees, that:

          (1) the Note Liens (and, to the extent the Trustee, the Collateral
     Trustee or any Holder of Notes has an interest thereof, the Parity Liens)
     upon any and all Collateral are, to the extent and in the manner provided
     in this Article 11 and the Intercreditor Agreement, subordinate in ranking
     to all present and future Priority Liens; and

          (2) the Note Liens upon any and all Collateral shall be of equal
     ranking with all present and future Parity Liens subject, as to the NGL
     Assets, to Section 11.05, and any proceeds of any realization by the
     Collateral Trustee on this Collateral shall be distributed equally and
     ratably on account of the Priority Lien Obligations,

                                      100

<PAGE>

and that such agreements as to the ranking of the Note Liens:

               (A) are enforceable by the holders of Priority Liens, for the
          benefit of the holders of Priority Lien Obligations secured thereby,
          and enforceable by the holders of Parity Liens, for the benefit of the
          holders of Parity Lien Obligations secured thereby;

               (B) shall remain enforceable by the holders of Priority Liens
          until the payment in full of all Priority Lien Obligations and
          termination of all commitments to advance credit thereunder;

               (C) shall remain enforceable by the holders of Parity Liens
          until the Discharge of Parity Lien Debt; and

               (D) shall apply notwithstanding (1) the time of incurrence
          of any such Indebtedness, (2) the order or method of attachment or
          perfection of any Liens securing any such Indebtedness, (3) 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, (4) the time of taking possession or control over any
          Collateral, (5) the rules for determining priority under any law
          governing relative priorities of Liens, or (6) any provision of the
          Security Documents to the contrary.

Section 11.02  Lien Sharing with Parity Liens.

     If the Company at any time delivers to the Trustee and the Collateral
Trustee:

          (1) an Officers' Certificate requesting that the Trustee direct the
     Collateral Trustee to transfer the Note Liens to a proposed Joint
     Collateral Agent pursuant to a proposed Note Lien Assignment delivered to
     the Trustee and Collateral Trustee therewith and stating that:

               (A) the Company intends to incur, on a date stated thereof,
          Indebtedness that shall constitute Parity Lien Debt;

               (B) no Default or Event of Default exists on the date of such
          Officers' Certificate or shall exist after giving effect to the
          incurrence of such Indebtedness;

               (C) the Company has appointed such proposed Joint Collateral
          Agent pursuant to a proposed Joint Collateral Agent Undertaking
          executed and delivered by the Company and such proposed Joint
          Collateral Agent and delivered to the Trustee and Collateral Trustee
          therewith;

               (D) the Company shall, on the date of such incurrence, grant
          Liens to such proposed Joint Collateral Agent, for the benefit of the
          holders of Note Obligations and Parity Lien Obligations and as
          security for all present and future Note Obligations and Parity Lien
          Obligations, upon all or substantially all of the Collateral that, on
          such date, is subject to the Note Liens, pursuant to proposed
          additional Security Documents delivered to the Trustee and Collateral
          Trustee therewith that are substantially the same as the Security
          Documents in effect on such date;

               (E) the Liens granted by such proposed additional Security
          Documents shall not be subject or subordinate to any Lien securing
          Indebtedness other than Priority Liens and Permitted Liens; and

                                      101

<PAGE>

               (F) the Company and its Restricted Subsidiaries shall, on such
          date, enter into all amendments to the Security Documents then in
          effect that are necessary to add Parity Lien Obligations to the
          obligations secured thereby, pursuant to amendments delivered to the
          Trustee and the Collateral Trustee therewith, to be executed on such
          date by the proposed Joint Collateral Agent and the Company or the
          Restricted Subsidiary party to such Security Documents;

     and

          (2) an Opinion of Counsel confirming on customary terms:

               (A) the existence, good standing, powers and authority of the
          proposed Joint Collateral Agent;

               (B) the validity and enforceability of the proposed Joint
          Collateral Agent Undertaking, Note Lien Assignment and all additional
          and amended Security Documents delivered to the Trustee;

               (C) the validity, enforceability and perfection of the Liens
          granted by such Security Documents; and

               (D) the continued perfection of the Note Liens, without loss of
          priority as against any Lien other than Parity Liens, upon giving
          effect to such Note Lien Assignment and any such amendment of the
          Security Documents,

then, the Trustee shall direct the Collateral Trustee to execute and deliver,
and upon such direction the Collateral Trustee shall be irrevocably and
unconditionally authorized and directed to execute and deliver, the proposed
Note Lien Assignment to such Joint Collateral Agent against delivery to the
Trustee and Collateral Trustee of (x) written confirmation from such Joint
Collateral Agent that it accepts such Note Lien Assignment and shall hold the
Note Liens and all such Security Documents and the Liens granted thereby for the
benefit of the holders of the Note Obligations and Parity Lien Obligations on
the terms of such Joint Collateral Agent Undertaking and (y) a further Officers'
Certificate stating that such Indebtedness has been incurred in conformity with
Section 4.09 and constitutes Parity Lien Debt and that such Security Documents
have been duly executed and delivered by the parties thereto.

     Following the initial incurrence of Parity Lien Debt, any additional Parity
Lien Debt incurred thereafter shall be included in the obligations secured under
the Security Documents if the Company delivers to the Trustee, the Collateral
Trustee and the Joint Collateral Agent:

          (1) an Officer's Certificate stating that

               (A) the Company intends to incur, on a date stated thereof,
          indebtedness that shall constitute Parity Lien Debt;

               (B) no Default or Event of Default exists on the date of such
          Officers Certificate or shall exist after giving effect to the
          incurrence of such Indebtedness;

               (C) the Company and its Restricted Subsidiaries shall, on such
          date, enter into any amendments to the Security Documents then in
          effect that are necessary to add such additional Parity Lien
          Obligations to the obligations secured thereby, pursuant to amendments
          delivered to the Trustee and the Collateral Trustee therewith, to be
          executed

                                      102

<PAGE>

          on such date by the Joint Collateral Agent and the Company or the
          Restricted Subsidiary party to such Security Documents;

and

          (2) an Opinion of Counsel confirming on customary terms the validity
     and enforceability of any additional and amended Security Documents
     delivered to the Trustee.

     Upon delivery of such certificate and opinion, the Trustee shall direct the
Collateral Trustee and/or the Joint Collateral Agent, as applicable, to enter
into any amendments of Security Documents as may be required to add such
additional Parity Lien Obligations as obligations secured under such Security
Documents.

Section 11.03  Amendment; Waiver.

     (a) No amendment or supplement to the provisions of Article 11 hereof will
be effective without the written consent of the Company and, if any Parity Lien
Debt is then outstanding, the holders of at least a majority in principal amount
of all Parity Lien Debt then outstanding voting as a single class, except that
any such amendment which increases the obligations or adversely affects the
rights of the holders of Parity Lien Debt will be effective only with the
consent of the holders of at least 66-2/3% in principal amount of all Parity
Lien Debt then outstanding, voting as a single class.

Any such amendment or supplement that:

               (A) imposes any obligation upon the Company or adversely affects
          the rights of the Company under Section 11.02 hereof will become
          effective only with the consent of the Company; or

               (B) imposes any obligation upon the Collateral Trustee or
          adversely affects the rights of the Collateral Trustee in its
          individual capacity at any time when the Trustee is not the Collateral
          Trustee will become effective only with the consent of the Collateral
          Trustee.

     (b) No waiver of any of the provisions of this Article 11 will in any
event be effective unless set forth in a writing signed and consented to, as
required for an amendment under Section 11.03 hereof, by the Company, Trustee,
and Collateral Trustee and Holders of Notes as required pursuant to Section
11.03.

Section 11.04  Notes, Note Guarantees and other Note Obligations not
               Subordinated.

     The provisions of this Article 11 and the Intercreditor Agreement are
intended solely to set forth the relative ranking, as Liens, of (1) the Note
Liens (and, to the extent the Trustee, the Collateral Trustee or any Holder of
Notes has an interest thereof, the Parity Liens) as against the Priority Liens
and (2) the Note Liens as against the Parity Liens. The Notes and Note
Guarantees are senior non-subordinated obligations of the Company and
Guarantors. Except as expressly set forth in the Intercreditor Agreement or
Section 11.05 hereof, neither the Notes, the Note Guarantees and other Note
Obligations nor the exercise or enforcement of any right or remedy for the
payment or collection thereof are intended to be, or shall ever be by reason of
the provisions of this Article 11, in any respect subordinated, deferred,
postponed, restricted or prejudiced.

Section 11.05  NGL Assets.

                                      103

<PAGE>

     Notwithstanding anything to the contrary set forth in this Indenture or any
Security Documents, any Collateral that constitutes NGL Assets shall secure any
Parity Lien Obligations in an aggregate amount not to exceed (i) the maximum
amount permitted to be secured by the NGL Assets under the 1996 Indenture on the
date of incurrence of such Parity Lien Obligations (without taking into account
any First Priority Secured Obligations and Parity Lien Obligations secured by
the NGL Assets prior to the date of such incurrence) less (ii) the amount of all
First Priority Secured Obligations and previously incurred Parity Lien
Obligations secured by NGL Assets on such date, as such amount shall be set
forth in an officers certificate of the Company demonstrating the calculation
thereof in reasonable detail. If Parity Lien Obligations are incurred on more
than one occasion, such Parity Lien Obligations shall be treated as separate
tranches each independently secured by the maximum amount permitted under this
clause (b) and each tranche shall share proceeds from any realization on any
such collateral on a ratable basis and the Security Documents securing such
obligations shall expressly provide for such sharing.

                                   ARTICLE 12.
                             COLLATERAL AND SECURITY

Section 12.01  Security Documents.

     (a) The payment of the principal of and interest and premium, if any, on
the Notes when due, whether on an interest payment date, at maturity, by
acceleration, repurchase, redemption or otherwise and whether by the Company
pursuant to the Notes or by any Guarantor pursuant to the Note Guarantees, the
payment of all other Note Obligations and the performance of all other
obligations of the Company and its Restricted Subsidiaries under the Note
Documents are secured as provided in the Security Documents which the Company
and the Guarantors have entered into simultaneously with the execution of this
Indenture and shall be secured by all Security Documents hereafter delivered as
required or permitted by this Indenture.

     (b) The Company shall, and shall cause each of its Restricted Subsidiaries
to, 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 of
Note Obligations or, if the Collateral Trustee is a Joint Collateral Agent, for
the benefit of the holders of Note Obligations and Parity Lien Obligations, duly
created, enforceable and perfected Liens upon the Collateral as contemplated by
this Indenture and the Security Documents, so as to render the same available
for the security and benefit of this Indenture and of the Notes, Note Guarantees
and all other Note Obligations, according to the intent and purposes hereof
expressed subject in each case to any express provisions of any Security
Documents and the Intercreditor Agreement.

Section 12.02  Collateral Trustee.

     (a) Wells Fargo Bank Minnesota, N.A., shall act as Collateral Trustee
until such time, if any, as the Note Liens are transferred to the Joint
Collateral Agent.

     (b) The Collateral Trustee is authorized and empowered to appoint one or
more co-Collateral Trustees as it deems necessary or appropriate.

     (c) Neither the Trustee nor the Collateral Trustee nor any of their
respective officers, directors, employees, attorneys or agents shall be
responsible or liable for the existence, genuineness, value or protection of any
Collateral, for the legality, enforceability, effectiveness or sufficiency of
the Security Documents, for the creation, perfection, priority, sufficiency or
protection of any Note Lien, or for any defect or deficiency as to any such
matters, or for any failure to demand, collect, foreclose or realize upon or
otherwise enforce any of the Note Liens or Security Documents or any delay in
doing so.

                                      104

<PAGE>

     (d) The Collateral Trustee shall be subject to such directions as may be
given it by the Trustee from time to time as required or permitted by this
Indenture. Except as set forth in the Intercreditor Agreement or directed by the
Trustee as required or permitted by this Indenture or any Joint Collateral Agent
Undertaking, the Collateral Trustee shall not be obligated:

          (1) to act upon directions purported to be delivered to it by any
     other Person;

          (2) to foreclose upon or otherwise enforce any Note Lien; or

          (3) to take any other action whatsoever with regard to any or all of
     the Note Liens, Security Documents or Collateral.

     (e) The Collateral Trustee shall be accountable only for amounts that it
actually receives as a result of the enforcement of the Note Liens or Security
Documents.

     (f) In acting as Collateral Trustee or Co-Collateral Trustee, the
Collateral Trustee and each Co-Collateral Trustee may rely upon and enforce each
and all of the rights, powers, immunities, indemnities and benefits of the
Trustee under Article 7.

     (g) For as long as the Trustee is the Collateral Trustee, each successor
Trustee shall become the successor Collateral Trustee as and when the successor
Trustee becomes the Trustee.

     (h) At all times when the Trustee is not itself the Collateral
Trustee, the Company shall deliver to the Trustee copies of all Security
Documents delivered to the Collateral Trustee and copies of all documents
delivered to the Collateral Trustee pursuant to the Security Documents.

     (i) The Collateral 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
from the Trustee pursuant to Article 12 hereof.

Section 12.03  Authorization of Actions to Be Taken.

     (a) Each Holder of Notes, by its acceptance thereof, consents and
agrees to the terms of each Security Document and Intercreditor Agreement, as
originally in effect and as amended, supplemented or replaced from time to time
in accordance with its terms or the terms of this Indenture, authorizes and
empowers the Trustee to direct the Collateral Trustee to enter into, and the
Collateral Trustee to execute and deliver, each Intercreditor Agreement and
Security Document, and authorizes and empowers the Trustee and the Collateral
Trustee to bind the Holders of Notes and other holders of Note Obligations as
set forth in the Security Documents and the Intercreditor Agreement and the
Security Documents and to perform its obligations and exercise its rights and
powers thereunder.

     (b) The Collateral Trustee and the Trustee are authorized and empowered to
receive for the benefit of the Holders of Notes any funds collected or
distributed under the Security Documents and to make further distributions of
such funds to the Holders of Notes according to the provisions of this
Indenture, the Security Documents and the Intercreditor Agreement.

     (c) Subject to the provisions of the Intercreditor Agreement and Section
7.01 and 7.02 and Article 12, the Trustee may, in its sole discretion and
without the consent of the Holders of Notes, direct, on behalf of the Holders of
Notes, the Collateral Trustee to take all actions it deems necessary or
appropriate in order to:

          (1) foreclose upon or otherwise enforce any or all of the Note Liens;

                                      105

<PAGE>

          (2) enforce any of the terms of the Security Documents; or

          (3) collect and receive payment of any and all Note Obligations.

Subject to the Intercreditor Agreement, the Trustee is authorized and empowered
to institute and maintain, or direct the Collateral Trustee to institute and
maintain, such suits and proceedings as it may deem expedient to protect or
enforce the Note Liens or the Security Documents or to prevent any impairment of
Collateral by any acts that may be unlawful or in violation of the Security
Documents or this Indenture, and such suits and proceedings as the Trustee or
the Collateral Trustee may deem expedient to preserve or protect its interests
and the interests of the Holders of Notes in the Collateral, including power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the security
interest hereunder or be prejudicial to the interests of Holders of Notes, the
Trustee or the Collateral Trustee.

Section 12.04  Release of Note Liens.

     (a) The Note Liens shall be released:

          (1) in whole, upon payment in full of the principal of, accrued and
     unpaid interest and premium, if any, on the Notes and payment in full of
     all other Note Obligations that are due and payable at or prior to the time
     such principal, accrued and unpaid interest and premium, if any, are paid;

          (2) in whole, upon satisfaction and discharge of this Indenture
     pursuant to Section 13.01;

          (3) in whole, upon a legal defeasance or covenant defeasance pursuant
     to Article 8;

          (4) in part, as to any property constituting Collateral that (a) is
     sold or otherwise disposed of by the Company or one of its Subsidiaries in
     a transaction permitted by this Indenture, at the time of such sale or
     disposition, to the extent of the interest sold or disposed of, or (b) is
     owned or at any time acquired by a Subsidiary that has been released from
     its Note Guarantee, concurrently with the release of such Note Guarantee;
     or

          (5) if, after the occurrence and during the continuance of an
     event of default under any Priority Collateral Document, as provided in the
     Intercreditor Agreement.

          (6) otherwise with respect to any Liens on assets other than Equity
     Interests, as provided in the Intercreditor Agreement; or

          (7) otherwise with respect to any Liens including Equity Interests,
     upon either:

               (A) the prior consent of holders of at least two-thirds in
          aggregate principal amount of each series of notes then outstanding;
          or

               (B) the terms set forth in the Intercreditor Agreement:

     (b) Upon delivery to the Trustee of an Officers' Certificate requesting
release of the Note Liens pursuant to Section 12.04(a), accompanied by:

                                      106

<PAGE>

          (1) an Opinion of Counsel confirming that such release is required by
     Section 12.04(a);

          (2) all instruments requested by the Company to effectuate or confirm
     such release; and

          (3) such other certificates and documents as the Trustee, Collateral
     Trustee or the Joint Collateral Agent, as applicable, may reasonably
     request to confirm the matters set forth in Section 12.04(a),

the Trustee shall, instruct the Collateral Trustee or the Joint Collateral
Agent, as applicable, to execute and deliver, and the Collateral Trustee or the
Joint Collateral Agent, as applicable, shall promptly execute and deliver, such
instruments.

     (c) All instruments effectuating or confirming any release of any Note
Liens shall have the effect solely of releasing such Note Liens as to the
Collateral described thereof, on customary terms and without any recourse,
representation, warranty or liability whatsoever.

     (d) The Trustee, Collateral Trustee and the Joint Collateral Agent are not
required to serve, file, register or record any instrument releasing Collateral.

     (e) The Company shall bear and pay all costs and expenses associated with
any release of Note Liens pursuant to Section 12.04, including all reasonable
fees and disbursements of any attorneys or representatives acting for the
Trustee, the Collateral Trustee and the Joint Collateral Agent.

Section 12.05  Filing, Recording and Opinions.

     (a) The Company shall furnish to the Trustee and the Collateral Trustee on
May 15 in each year, beginning with May 15, 2004, an Opinion of Counsel, dated
as of such date, either:

          (1) stating that, in the opinion of such counsel, (A) action has been
     taken with respect to the recording, registering, filing, re-recording,
     re-registering and re-filing of all supplemental indentures, financing
     statements, continuation statements or notices, recordations or instruments
     of further assurance as is necessary to maintain and perfect the Liens
     intended to be created by the Security Documents and reciting the details
     of such action or referring to prior Opinions of Counsel in which such
     details are given, and (B) based on relevant laws as in effect on the date
     of such Opinion of Counsel, all financing statements and continuation
     statements have been executed and filed that are necessary as of such date
     and during the succeeding 13 months to perfect the Note Liens, to the
     extent the Note Liens can be perfected by the filing of a financing
     statement; or

          (2) stating that, in the opinion of such counsel, no such action is
     necessary to maintain such Liens as effective and perfected.

     (b) The Company shall otherwise comply with the provisions of TIA
Section 314(b).

     (c) To the extent applicable, the Company shall cause TIA Section 313(b),
relating to reports, and TIA Section 314(d), relating to the release of property
or securities from Note Liens 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 Section 314(d) may
be made by an Officer of the Company except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent Person,
which Person shall be an independent engineer, appraiser or other expert
selected or reasonably satisfactory to the Trustee and the Collateral Trustee.

                                      107

<PAGE>

     (d) To the extent applicable, the Company shall furnish to the Trustee and
the Collateral Trustee, prior to each proposed release of Collateral pursuant to
the Security Documents:

          (1) all documents required by TIA Section 314(d); and

          (2) an Opinion of Counsel to the effect that such accompanying
     documents constitute all documents required by TIA Section 314(d).

The Trustee may, to the extent permitted by Sections 7.01 and 7.02 hereof,
accept as conclusive evidence of compliance with the foregoing provisions the
appropriate statements contained in such documents and Opinion of Counsel.

     Notwithstanding the foregoing, if this Indenture has not been qualified
under the TIA and is not required to be qualified under the TIA at the time of
any release of Collateral, then the Company shall not be required to furnish the
documents and Opinions of Counsel required by this Section 12.05(d) if such
release of Collateral is effected pursuant to Section 12.04(a)(6) or Section
12.04(a)(7)(B) hereof.

     (e) If any Collateral is released in accordance with this Indenture, the
Intercreditor Agreement or any Security Document at a time when the Trustee is
not itself also the Collateral Trustee and if the Company has delivered the
certificates and documents required by the Security Documents and this Sections
14.02, the Trustee shall determine whether it has received all documentation
required by TIA Section 314(d) in connection with such release and, based on
such determination and the Opinion of Counsel delivered pursuant to Section
14.02, shall deliver a certificate to the Collateral Trustee setting forth such
determination.

Section 12.06  Compensation and Indemnity.

     (b) The Company shall pay to the Collateral Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder and under the Security Documents. The Collateral Trustee's
compensation shall not be limited by any law on compensation of a Collateral
Trustee of an express trust. The Company shall reimburse the Collateral 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 Collateral Trustee's agents and counsel.

     (c) The Company and the Guarantors shall indemnify the Collateral Trustee
against any and all losses, liabilities or expenses incurred by it arising out
of or in connection with the acceptance or administration of its duties under
this Indenture, the Intercreditor Agreement and the Security Documents,
including the costs and expenses of enforcing this Indenture, the Intercreditor
Agreement or the Security Documents against the Company and the Guarantors
(including this Section 12.06) and defending itself against any claim (whether
asserted by the Company, the Guarantors or any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, or under the Intercreditor Agreement and the Security
Documents except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Collateral Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. Failure by
the Collateral Trustee to so notify the Company shall not relieve the Company or
any of the Guarantors of their obligations hereunder. The Company or such
Guarantor shall defend the claim and the Collateral Trustee shall cooperate in
the defense. The Collateral Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. Neither the Company
nor any Guarantor need pay for any settlement made without its consent, which
consent shall not be unreasonably withheld.

                                      108

<PAGE>

     (d) The obligations of the Company and the Guarantors under this Section
12.06 shall survive the satisfaction and discharge of this Indenture.

     (e) To secure the Company's payment obligations in this Section 12.06, the
Collateral Trustee shall have a Lien prior to the Notes and pari passu with the
Lien created pursuant to Section 7.07 hereof 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.

     (f) When the Collateral Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.01(9) or (10) 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.

                                   ARTICLE 13.
                           SATISFACTION AND DISCHARGE

Section 13.01  Satisfaction and Discharge.

     This Indenture shall be discharged and shall cease to be of further effect
as to all Notes of a particular series issued hereunder, when:

          (1) either:

               (A) all Notes of such series that have been authenticated
          (except lost, stolen or destroyed Notes that have been replaced or
          paid and Notes for whose payment money has theretofore been deposited
          in trust and thereafter repaid to the Company) have been delivered to
          the Trustee for cancellation; or

               (B) all Notes of such series that have not been delivered to the
          Trustee for cancellation have become due and payable by reason of the
          making of a notice of redemption or otherwise or shall become due and
          payable within one year and the Company 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
          thereof, in such amounts as shall 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, if any, 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 such deposit (other than a Default or an Event of Default
     resulting from the borrowing of funds to be applied to such deposit) and
     such deposit shall not result in a breach or violation of, or constitute a
     default under, any other instrument to which the Company or any Guarantor
     is a party or by which the Company or any Guarantor is bound;

          (3) the Company or any Guarantor has paid or caused to be paid all
     sums payable by it under this Indenture; and

          (4) the Company has delivered irrevocable instructions to the Trustee
     under this Indenture to apply the deposited money toward the payment of the
     Notes of such series at maturity or the redemption date, as the case may
     be.

                                      109

<PAGE>

In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.

     Notwithstanding the satisfaction and discharge of this Indenture, if money
has been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the provisions of Section 13.02 and Section 8.06 shall survive. In
addition, nothing in this Section 13.01 shall be deemed to discharge those
provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.

Section 13.02  Application of Trust Money.

     Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 13.01 shall be held in trust and applied by it, in
accordance with the provisions of such series of Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as its 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 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 Company's
and any Guarantor's obligations under this Indenture and the relevant series of
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 13.01; provided that if the Company has made any payment of principal
of, premium, if any, or interest on any Notes because of the reinstatement of
its obligations, the Company 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 TIA Section 318(c), the imposed duties shall control.

Section 14.02  Notices.

     Any notice or communication by the Company, 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), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:

     If to the Company and/or any Guarantor:

     Dynegy Holdings Inc.
     1000 Louisiana St., Suite 5800
     Houston, TX  77002
     Fax No.: (713) 507-6808
     Attn:  Carol Graebner

                                      110

<PAGE>

     With a copy to:

     O'Melveny & Myers LLP
     30 Rockefeller Plaza
     New York, NY  10122
     Fax No.: (212) 408-2420
     Attn:  Rosa Testani

     If to the Trustee:

     Wilmington Trust Company
     1100 North Market Street
     Wilmington, DE 19890-1615
     Phone No.: (302) 636-6056
     Fax No.: (302) 636-4143
     Attn: Corporate Capital Markets

     If to the Collateral Trustee:

     Wells Fargo Bank Minnesota, N.A.
     Sixth and Marquette
     MAC N9303-120
     Minneapolis, MN 55479
     Phone No.: (612) 667-0337
     Fax No.: (612) 667-9825
     Attn: Jeffery T. Rose

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

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

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

     If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.

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

Section 14.03  Communication by Holders of Notes with Other Holders of Notes.

                                      111

<PAGE>

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

Section 14.04  Certificate and Opinion as to Conditions Precedent.

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

          (1)  an Officers' Certificate in form and substance reasonably
     satisfactory to the Trustee (which must 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

          (2)  an Opinion of Counsel in form and substance reasonably
     satisfactory to the Trustee (which must 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 TIA Section 314(a)(4)) must comply with the provisions of TIA
Section 314(e) and must include:

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

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

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

          (4)  a statement as to whether or not, in the opinion of such Person,
     such condition or covenant has been satisfied; provided, however, that with
     respect to matters of fact, an Opinion of Counsel may rely on an Officers'
     Certificate or certificates of public officials.

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 past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or the Guarantors under this Indenture, the
Notes, the Note 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

                                      112

<PAGE>

issuance of the Notes. The waiver may not be effective to waive liabilities
under the federal securities laws.

Section 14.08  Governing Law.

     THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE SECURITY DOCUMENTS, THE NOTES, AND THE NOTE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

Section 14.09  No Adverse Interpretation of Other Agreements.

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

Section 14.10  Successors.

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

Section 14.11  Severability.

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

Section 14.12  Counterpart Originals.

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

Section 14.13  Table of Contents, Headings, etc.

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

                         [Signatures on following page]

                                      113

<PAGE>

                                   SIGNATURES

Dated as of August 11, 2003

                                        Dynegy Holdings inc.

                                        By: /s/ Charles Cook
                                            ------------------------------------
                                            Title:  Assistant Treasurer

                                        Dynegy Inc.

                                        BG Holdings, Inc.

                                        Illinova Corporation

                                        Illinova Energy Partners, Inc.

                                        Illinova Generating Company

                                        Igc Grimes County, Inc.

                                        Igc Grimes Frontier, Inc.

                                        Ipg Ferndale, Inc.

                                        Ipg Paris, Inc.

                                        Charter Oak (Paris), Inc.

                                        By: /s/ Robert T. Ray
                                            ------------------------------------
                                            Title: Sr. Vice President and
                                                   Treasurer

                                        [continued]

                                      114

<PAGE>

Dynegy Power Corp.                      DPC II inc.

Dynegy Services, Inc.                   Dynegy Power Management Services, L.P.,

                                        By: Dynegy Services, Inc., its general
                                        partner

Dynegy Engineering, Inc.                Calcasieu Power, Inc.

Dynegy Operating Company                Dynegy Parts And Technical Services,
                                        Inc.

Dynegy Power Management Services, Inc.  Hep Cogen, Inc.

Northway Cogen, Inc.                    Dynegy Power Investments, Inc.

Dynegy Power Services, Inc.             Dynegy Power Nevada, Inc.

Michigan Cogen, Inc.                    Michigan Power, Inc.

Michigan Power Holdings, Inc.           OCG Cogen, Inc.

Oyster Creek Cogen, Inc.                RRP Company

DPC Colombia - Opon Power Resources     Termo Santander Holding, LLC
Company

Riverside Generation, Inc.              Riverside Generating Company, L.L.C.

Rolling Hills Generation, Inc.          Dynegy Renaissance Power, Inc.

Dynegy Northeast Generation, Inc.       Hudson Power, L.L.C.

Dynegy Midstream GP, Inc.               DYNEGY LIQUIDS G.P., L.L.C.

                                        By: Dynegy Midstream Service, Limited
                                        Partnership, its sole member

                                        By: Dynegy Midstream G.P., Inc. its
                                        general partner

On behalf of each of the entities       On behalf of each of the entities
listed above:                           listed above:

By: /s/ Robert T. Ray                   By: /s/ Robert T. Ray
    ---------------------------------      -------------------------------------
    Title: Sr. Vice President and           Title: Sr. Vice President and
           Treasurer                               Treasurer

                                      115

<PAGE>

Dynegy Midstream Services, Limited      Dynegy Liquids Marketing And Trade
Partnership

By: Dynegy Midstream G.P., Inc.,
    its general partner

Dynegy OPI, LLC                         Dynegy NGL Pipeline Company, LLC

Dynegy Intrastate Pipeline, LLC         Dynegy Energy Pipeline Company LLC

Dynegy Upper Holdings, L.L.C.           Dmg Enterprises, Inc.

Havana Dock Enterprises, LLC            Dmt Holdings, Inc.

DMT G.P., L.L.C.                        Dmt Holdings, L.P.
                                        By:  DMT G.P.,
                                        L.L.C., its general partner

Dynegy Coal Trading & Transportation,   Ngc Storage, Inc.
L.L.C.

Black Thunder Member, Inc.              Parish Power, Inc.

Calcasieu Power, L.L.C.                 Delta Cogen, Inc.

Cogen Power, Inc.                       Cogen Power, L.P.
                                        By:  CoGen Power,
                                        Inc., its general partner

Dynegy Power Holdings, Inc.             Midstream Barge Company, L.L.C.

Dynegy Regulated Holdings, LLC          Black Mountain Cogen, Inc.

Bluegrass Generation, Inc.              Bluegrass Generation Company, L.L.C.

Dynegy Cabrillo II LLC                  Dynegy Holding Company, L.L.C.

On behalf of each of the entities       On behalf of each of the entities listed
listed above:                           above:

By: /s/ Robert T. Ray                   By: /s/ Robert T. Ray
    ----------------------------------      ------------------------------------
    Title: Sr. Vice President and           Title: Sr. Vice President and
           Treasurer                               Treasurer

                                      116

<PAGE>

Blue Ridge Generation Inc.              Blue Ridge Generation Llc

Chickahominy Generating Company         Chickahominy Power, Llc

Florida Mercantile Power, Inc.          Palmetto Power, L.L.C.

Gasification Services, Inc.             Georgia Mercantile Power, Inc.

Heard County Power, L.L.C.              Hart County IPP, Inc.

Hartwell INDEPENDENT POWER PARTNERS,    Hartwell Power Company
INC.

Dynegy Roseton, L.L.C.                  Dynegy Hudson Power Retail, L.L.C.

Dynegy Global Energy, Inc.              Dynegy Broadband Marketing And Trade

Dynegy GP INC.                          Dynegy Marketing And Trade

                                        By:  Dynegy GP, Inc.
                                        its general partner

Dynegy Technology Capital Corp.         Dynegy Strategic Investments GP, L.L.C.
Dynegy Strategic Investments, L.P.      Renaissance Power, L.L.C.

By:  Dynegy Strategic Investments GP,
     L.L.C., its general partner

Rolling Hills Generating, L.L.C.        Dynegy Power Marketing, Inc.

Dynegy Energy Services, Inc.            Illinois Power Energy, Inc.

   Des Northeast, Inc.

On behalf of each of the entities       On behalf of each of the entities listed
listed  above:                          above:

By: /s/ Robert T. Ray                   By:  /s/ Robert T. Ray
    -----------------------------------      -----------------------------------
    Title: Sr. Vice President and            Title: Sr. Vice President  and
           Treasurer                                Treasurer

                                      117

<PAGE>

Dem GP, LLC                             Dynegy Energy Marketing, Lp

                                        By: DEM GP, LLC, its
                                        general partner

Dynegy Administrative Services Company  NIPC, Inc.

DFS L.P., LLC                           Dynegy Catlin Member, Inc.

Dfs General Partner, LLC                Dynegy Financial Services, Limited
                                        Partnership

                                        By: DFS General Partner, LLC,
                                        its general partner

Dynegy Midwest Generation , Inc.        Dynegy I.T., Inc.

Chesapeake Power, Inc.                  James River Energy Corp.

DPC Power Resources Holding Company     Dry Creek Power, Inc.

Rockingham Power, L.L.C.                Dynegy Power Development Company

On behalf of each of the entities       On behalf of each of the entities listed
listed  above:                          above:

By: /s/ Robert T. Ray                   By: /s/ Robert T. Ray
    ----------------------------------      -----------------------------------
    Title: Sr. Vice President and           Title: Sr. Vice President and
           Treasurer                               Treasurer

                                        Dynegy Danskammer, L.L.C.

                                        By: /s/ Charles Cook
                                            ------------------------------------
                                            Title: Assistant Treasurer

                                        Dynegy Management, Inc.

                                        DMS LP, Inc.

                                        DMT L.P., L.L.C.

                                        Dynegy Strategic Investments LP, Inc.

                                        DEM LP, LLC

                                        By: /s/ J. Kevin Blodgett
                                            ------------------------------------
                                            Title:  Assistant Secretary

                                      118

<PAGE>

                                        Wilmington Trust Company
                                         as Trustee

                                        By: /s/ James J. McGinley
                                            ------------------------------------
                                            Title: Authorized Signatory

                                        Wells Fargo Bank Minnesota, N.A.
                                          as Collateral Trustee

                                        By: /s/ Jeffery Rose
                                            ------------------------------------
                                            Title: Corporate Trust Officer

                                      119

<PAGE>

                                   Schedule I
                                   Guarantors

Dynegy Inc.
Dynegy Power Corp.
Dynegy Midstream Services, Limited Partnership
Blue Ridge Generation Inc.
BG Holdings, Inc.
Dynegy Services, Inc.
Dynegy OPI, LLC
Chickahominy Generating Company
Illinova Corporation
Dynegy Engineering, Inc.
Dynegy Intrastate Pipeline, LLC
Florida Mercantile Power, Inc.
Illinova Energy Partners, Inc.
Dynegy Operating Company
Dynegy Upper Holdings, L.L.C.
Gasification Services, Inc.
Illinova Generating Company
Dynegy Power Management Services, Inc.
Havana Dock Enterprises, LLC
Heard County Power, L.L.C.
IGC Grimes County, Inc.
Northway Cogen, Inc.
DMT G.P., L.L.C.
Hartwell Independent Power Partners, Inc.
IGC Grimes Frontier, Inc.
Dynegy Power Services, Inc.
Dynegy Coal Trading & Transportation, L.L.C.
Dynegy Roseton, L.L.C.
IPG Ferndale, Inc.
Michigan Cogen, Inc.
Black Thunder Member, Inc.
Dynegy Global Energy, Inc.
IPG Paris, Inc.
Michigan Power Holdings, Inc.
Calcasieu Power, L.L.C.
Dynegy GP Inc
Charter Oak (Paris), Inc.
Oyster Creek Cogen, Inc.
Cogen Power, Inc.
Dynegy Technology Capital Corp.
DPC II Inc.
DPC Colombia - Opon Power Resources Company
Dynegy Power Holdings, Inc.
Dynegy Strategic Investments, L.P.
Dynegy Power Management Services, L.P.,
Riverside Generation, Inc.
Dynegy Regulated Holdings, LLC

                                       I-1

<PAGE>

Rolling Hills Generating, L.L.C.
Calcasieu Power, Inc.
Rolling Hills Generation, Inc.
Bluegrass Generation, Inc.
Dynegy Energy Services, Inc.
Dynegy Parts and Technical Services, Inc.
Dynegy Northeast Generation, Inc.
Dynegy Cabrillo II LLC
Des Northeast, Inc.
HEP Cogen, Inc.
Dynegy Midstream GP, Inc.
Dynegy Liquids Marketing And Trade
Dem GP, LLC
Dynegy Power Investments, Inc.
Blue Ridge Generation LLC
Dynegy NGL Pipeline Company, LLC
Dynegy Administrative Services Company
Dynegy Power Nevada, Inc.
Chickahominy Power, LLC
Dynegy Energy Pipeline Company LLC
DFS L.P., LLC
Michigan Power, Inc.
Palmetto Power, L.L.C.
DMG Enterprises, Inc.
DFS General Partner, LLC
OCG Cogen, Inc.
Georgia Mercantile Power, Inc.
DMT Holdings, Inc.
Dynegy Midwest Generation , Inc.
RRP Company
Hart County IPP, Inc.
DMT Holdings, L.P.
Chesapeake Power, Inc.
Termo Santander Holding, LLC
Hartwell Power Company
NGC Storage, Inc.
DPC Power Resources Holding Company
Riverside Generating Company, L.L.C.
Dynegy Hudson Power Retail, L.L.C.
Parish Power, Inc.
Rockingham Power, L.L.C.
Dynegy Renaissance Power, Inc.
Dynegy Broadband Marketing And Trade
Delta Cogen, Inc.
Dynegy Energy Marketing, LP
Hudson Power, L.L.C.
Dynegy Marketing And Trade
Cogen Power, L.P.
NIPC, Inc.
Dynegy Liquids G.P., L.L.C.
Dynegy Strategic Investments GP, L.L.C.

                                       I-2

<PAGE>

Midstream Barge Company, L.L.C.
Dynegy Catlin Member, Inc.
Dynegy Danskammer, L.L.C.
Renaissance Power, L.L.C.
Black Mountain Cogen, Inc.
Dynegy Financial Services, Limited Partnership
Dynegy Management, Inc.
Dynegy Power Marketing, Inc.
Bluegrass Generation Company, L.L.C.
Dynegy I.T., Inc.
DMS LP, Inc.
Illinois Power Energy, Inc.
Dynegy Holding Company, L.L.C.
James River Energy Corp.
DEM LP, LLC
Dynegy Strategic Investments LP, Inc.
DMT L.P., L.L.C.
Dry Creek Power, Inc.
Dynegy Power Development Company

                                       I-3

<PAGE>

                                                                      EXHIBIT A1

                                 [Face of Note]
================================================================================
                                                         CUSIP/CINS ____________

           Second Priority Senior Secured Floating Rate Notes due 2008

No. ___                                                            $____________

                              DYNEGY HOLDINGS INC.

promises to pay to _____________________________________________________________

or registered assigns,

the principal sum of ___________________________________________________________

Dollars on July 15, 2008.

Interest Payment Dates: January 15 and July 15

Record Dates: January 1 and July 1

Dated:  _______________, 200_

                                        DYNEGY HOLDINGS INC.

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                                            (SEAL)
This is one of the Series A Notes referred
to in the within-mentioned Indenture:

WILMINGTON TRUST COMPANY
as Trustee

By:
    ---------------------------------------
             Authorized Signatory

================================================================================

                                      A1-1

<PAGE>

                                 [Back of Note]
           Second Priority Senior Secured Floating Rate Notes due 2008

[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]

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

          (1)  Interest. Dynegy Holdings Inc., a Delaware corporation (the
     "Company"), promises to pay interest on the principal amount of this Note
     at a rate per annum equal to the Applicable Eurodollar Rate, as defined in
     the Indenture, in effect during each quarterly period commencing January
     15, April 15, July 15 and October 15 of each year from August 11, 2003
     until maturity. The interest rate on the Series A Notes will in no event be
     higher than the maximum rate permitted by New York law as the same may be
     modified by U.S. law of general application. Under current New York law,
     the maximum rate of interest is 25% per annum on a simple interest basis.
     This limit may not apply to Series A Notes in which $2,500,000 or more has
     been invested. The Company shall pay interest semi-annually in arrears on
     January 15 and July 15 of each year, or if any such day is not a Business
     Day, on the next succeeding Business Day (each, an "Interest Payment
     Date"). Interest on the Notes shall accrue from the most recent date to
     which interest has been paid or, if no interest has been paid, from the
     date of issuance; provided that if there is no existing Default in the
     payment of interest, and if this Note is authenticated between a record
     date referred to on the face hereof and the next succeeding Interest
     Payment Date, interest shall accrue from such next succeeding Interest
     Payment Date; provided, further, that the first Interest Payment Date shall
     be January 15, 2004. The Company shall pay interest (including
     post-petition interest in any proceeding under any Bankruptcy Law) on
     overdue principal and premium, if any, from time to time on demand at a
     rate that is 1% per annum in excess of the rate then in effect; it shall
     pay interest (including post-petition interest in any proceeding under any
     Bankruptcy Law) on overdue installments of interest (without regard to any
     applicable grace periods) from time to time on demand at the same rate to
     the extent lawful. Interest shall be computed on the basis of a 360-day
     year of twelve 30-day months. All percentages resulting from any of the
     calculations in this paragraph (1) will be rounded, if necessary, to the
     nearest one hundred-thousandth of a percentage point, with five
     one-millionths of a percentage point rounded upwards and all dollar amounts
     used in or resulting from such calculations will be rounded to the nearest
     cent with one-half cent being rounded upwards. For example, 9.876545% or
     .09876545 will be rounded to 9.87655% or .0987655.

          (2)  Method of Payment. The Company shall pay interest on the Notes
     (except defaulted interest) to the Persons who are registered Holders of
     Notes at the close of business on the January 1 or July 1 next preceding
     the 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. The
     Notes shall be payable as to principal, premium, if any, and interest at
     the office or agency of the Company maintained for such purpose within or
     without the City and State of New York, or, at the option of the Company,
     payment of interest may be made by check mailed to the Holders at their
     addresses set forth in the register of Holders; provided that payment by
     wire transfer of immediately available funds shall be required with respect
     to principal of and interest, premium on, all Global Notes and all other
     Notes the Holders of which shall have provided wire transfer instructions
     reasonably in advance to the Company or the Paying Agent. Such payment
     shall be in such coin or currency of the

                                      A1-2

<PAGE>

     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, shall act as Paying Agent and Registrar.
     The Company may change any Paying Agent or Registrar without notice to any
     Holder. The Company or any of its Subsidiaries may act in any such
     capacity.

          (4)  Indenture. The Company issued the Notes under an Indenture dated
     as of August 11, 2003 (the "Indenture") among the Company, the Guarantors,
     the Trustee and Wells Fargo Bank Minnesota, N.A., as collateral trustee.
     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 (15 U.S. Code Sections 77aaa-77bbbb). 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. The Notes are secured
     obligations of the Company initially issued in $225 million in aggregate
     principal amount, and the Company may issue an unlimited amount of
     additional Notes of this series under the Indenture, subject to compliance
     with Section 4.09 of the Indenture. The Notes are secured by the Indenture
     and the Security Documents.

          (5)  Guarantees. The Notes are guaranteed by Dynegy Inc., the parent
     of the Company, certain other Affiliates of the Company and by all of the
     Company's wholly-owned Domestic Subsidiaries that guarantee borrowings
     under the Company's Credit Agreement as of August 11, 2003. The Note
     Guarantees are the full and unconditional and joint and several general
     obligations of the Guarantors. The Note Guarantees are secured, on a second
     priority basis, by substantially all of the same assets that secure the
     guarantees by the Guarantors of the Company's obligations under the Credit
     Agreement.

          (6)  Optional Redemption.

     At any time prior to July 15, 2006, the Company may on any one or more
     occasions redeem up to 35% of the aggregate principal amount of the Series
     A Notes issued hereunder at a redemption price equal to par plus the
     Applicable Eurodollar Rate then in effect, plus accrued and unpaid interest
     to the redemption date, with a contribution to the Company's common equity
     capital made with the net cash proceeds of a concurrent sale of common
     stock of Dynegy; provided that:

               (A)  at least 65% of the aggregate principal amount of the
               Series A Notes issued under the Indenture (excluding Notes held
               by the Company or any of its Affiliates) remains outstanding
               immediately after the occurrence of such redemption; and

               (B)  the redemption occurs within 75 days of the date of the
               closing of such sale of common stock.

     At any time prior to July 15, 2006, the Company may redeem all but not less
     than all of the Series A Notes upon the occurrence of a Change of Control,
     upon not less than 30 nor more than 60 days prior notice (but in any event
     no earlier than the date of consummation of such Change of Control and no
     later than 90 days after the occurrence of such Change of Control) at a
     redemption price equal to the principal amount of the Series A Notes
     redeemed plus the Applicable Premium for Series A Notes as of, and accrued
     and unpaid interest, if any, to the date of redemption,

                                       A1-3

<PAGE>

     subject to the rights of Holders on the relevant record date to receive
     interest on the relevant interest payment date. This optional redemption by
     the Company is separate from and in addition to the rights of Holders as
     set forth in Section 4.15 of the Indenture.

     On or after July 15, 2006, the Company may redeem all or a part of the
     Series A 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 Series A Notes redeemed, to
     the applicable redemption date, if redeemed during the twelve-month period
     beginning on July 15 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
     ----                                        ----------
     2006 ...................................      103.000%
     2007 ...................................      101.000%
     2008 ...................................      100.000%

     Unless the Company defaults in the payment of the redemption price,
     interest shall cease to accrue on the Notes or portions thereof called for
     redemption on the applicable redemption date.

          (7)  Mandatory Redemption. The Company is not required to make
     mandatory redemption or sinking fund payments with respect to the Notes.

          (8)  Repurchase At Option Of Holder.

          If there is a Change of Control, the Company shall be required to make
     an offer (a "Change of Control Offer") to repurchase all or any part (equal
     to $1,000 or an integral multiple thereof) of each Holder's Notes at a
     purchase price equal to 101% of the aggregate principal amount thereof plus
     accrued and unpaid thereon, if any, to the date of purchase subject to the
     rights of Holders on the relevant record date to receive interest due on
     the relevant interest payment date. Within 30 days following any Change of
     Control, the Company shall mail a notice to each holder describing the
     transaction or transactions that constitute the Change of Control and
     offering to repurchase Notes on the Change of Control Payment Date
     specified in the notice, which date shall 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 the Indenture and described in such notice.

          If Dynegy or any of its Restricted Subsidiaries consummate any Asset
     Sales, when the aggregate amount of Excess Proceeds exceeds $50.0 million
     or at such earlier time as the Company may elect, the Company shall make an
     Asset Sale Offer to all Holders of Notes and all holders of other
     Indebtedness that is pari passu with the Notes containing provisions
     similar to those set forth in the Indenture with respect to offers to
     purchase or redeem with the proceeds of sales of assets (an "Asset Sale
     Offer") pursuant to Section 3.09 of the Indenture 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 to
     the extent required by the indentures governing other Indebtedness. The
     offer price in any Asset Sale Offer shall be equal to 100% of principal
     amount plus accrued and unpaid interest to the date of purchase, and shall
     be payable in cash. If any Excess Proceeds remain after consummation of an
     Asset Sale Offer, such Excess Proceeds shall be released from the Cash
     Collateral Account and the Company may use those Excess Proceeds for any
     purpose not otherwise prohibited by the 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 Trustee
     shall select the Notes and such other pari passu Indebtedness to be
     purchased on a pro rata basis. Holders of Notes that are the

                                      A1-4

<PAGE>

     subject of an offer to purchase will receive an Asset Sale Offer from the
     Company 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" on the reverse of the Notes.

          (9)  Notice of Redemption. Notice of redemption will be mailed by
     first class mail at least 30 days but not more than 60 days before a
     redemption date to each Holder whose Notes are to be redeemed at its
     registered address, except that a redemption notice may be mailed more than
     60 days prior to a redemption date if the notice is issued in connection
     with a defeasance of the Notes or a satisfaction and discharge of the
     Indenture. Notes in denominations larger than $1,000 may be redeemed in
     part but only in whole multiples of $1,000, 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.

          (10) Denominations, Transfer, Exchange. The Notes are in registered
     form without coupons in denominations of $1,000 and integral multiples of
     $1,000. 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 Company may require a Holder to pay any taxes
     and fees required by law or permitted by the Indenture. The Company need
     not exchange or register the transfer of any Note or portion of a Note
     selected for redemption, except for the unredeemed portion of any Note
     being redeemed in part. Also, the Company need not exchange or register the
     transfer of any Notes for a period of 15 days before a selection of Notes
     to be redeemed or during the period between a record date and the
     corresponding Interest Payment Date.

          (11) Persons Deemed Owners. The registered Holder of a Note may be
     treated as its owner for all purposes.

          (12) Amendment, Supplement and Waiver. Subject to certain exceptions,
     the Indenture, the Note Guarantees or the Notes may be amended or
     supplemented with the consent of the Holders of at least a majority in
     principal amount of the then outstanding Series A Notes voting as a single
     class, and any existing default or compliance with any provision of the
     Indenture, the Notes or the Note Guarantees may be waived with the consent
     of the Holders of a majority in principal amount of the then outstanding
     Series A Notes voting as a single class. Without the consent of any Holder
     of a Note, the Indenture, the Notes or the Note Guarantees may be amended
     or supplemented to cure any ambiguity, defect or inconsistency, to provide
     for uncertificated Notes in addition to or in place of certificated Notes,
     to provide for the assumption of the Company's or any Guarantor's
     obligations to Holders of the Notes in case of a merger or consolidation,
     to make any change that would provide any additional rights or benefits to
     the Holders of the Notes or that does not adversely affect the legal rights
     under the Indenture of any such Holder, to comply with the requirements of
     the SEC in order to effect or maintain the qualification of the Indenture
     under the Trust Indenture Act, to provide for the Issuance of Additional
     Notes in accordance with the limitations set forth in the Indenture, to
     allow any Guarantor to execute a supplemental indenture to the Indenture
     and/or a Note Guarantee with respect to the Notes, to make, complete or
     confirm any grant of Collateral permitted or required by the Indenture or
     any release of Collateral that becomes effective as set forth in the
     Indenture, to reflect any waiver or termination of any right arising under
     Article 11 of the Indenture that otherwise would be enforceable by any
     holder of a Parity Lien Obligation or Parity Lien, if such waiver or
     termination is set forth or provided in the Indenture or agreement
     governing or giving rise to such Parity Lien Obligation or Parity Lien
     (provided, that no such waiver or amendment pursuant to clause (9) of
     Section 9.01 of the Indenture shall adversely affect the rights of the
     Holders), or to conform the text of the Indenture, the Notes, the Note
     Guarantees or the Security

                                      A1-5

<PAGE>

     Documents to any provision that was contained in the Offering Circular,
     dated as of August 1, 2003, that was used by the Initial Purchasers in
     connection with the distribution of the Initial Notes to the extent that
     such document contained a description of any provision of the Indenture,
     the Notes, the Note Guarantees or the Security Documents that was intended
     to be a verbatim recitation of such provision.

          (13) Defaults and Remedies. Each of the following is an Event of
     Default for the Series A Notes: (i) default for 30 days in the payment when
     due of interest on any Series A Notes; (ii) default in payment when due of
     the principal of, or premium, if any, on any Series A Notes; (iii) failure
     by Dynegy or any of its Restricted Subsidiaries to comply with the
     provisions described in Sections 4.07, 4.09, 4.10, 4.15 or 5.01 of the
     Indenture for 30 days after written notice from the Trustee or the holders
     of at least 25% in aggregate principal amount of the Series A Notes then
     outstanding to comply with such provisions; (iv) failure by Dynegy or any
     of its Restricted Subsidiaries for 60 days after written notice from the
     Trustee or the holders of at least 25% in aggregate principal amount of the
     Series A Notes then outstanding to comply with any of the other agreements
     in the Indenture or the Security Documents; (v) 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 Dynegy
     or any of its Restricted Subsidiaries (or the payment of which is
     guaranteed by Dynegy or any of its Restricted Subsidiaries) whether such
     Indebtedness or guarantee now exists, or is created after the date of the
     Indenture, if that default: (x) is caused by a failure to pay principal of,
     or interest or premium, if any, on such Indebtedness prior to the
     expiration of the grace period provided in such Indebtedness on the date of
     such default (a "Payment Default") or (y) results in the acceleration of
     such Indebtedness prior to its express maturity, and, in each case, the
     principal amount of any such Indebtedness, together with the principal
     amount of any other such Indebtedness under which there has been a Payment
     Default or the maturity of which has been so accelerated, aggregates $50.0
     million or more; provided that, if such default shall be remedied or cured
     by Dynegy or such Restricted Subsidiary or waived by the holder of such
     Indebtedness, in each case before acceleration of the Notes, then the Event
     of Default under the Indenture caused by reason thereof shall be deemed
     likewise to have been remedied, cured or waived without further action on
     the part of the Trustee, any holder of Notes or any other Person; (vi)
     failure by Dynegy or any of its 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; (vii)
     breach by Dynegy or any of its Restricted Subsidiaries of any
     representation or warranty or agreement in the Security Documents, the
     repudiation by Dynegy or any of its Restricted Subsidiaries of any of its
     obligations under the Security Documents or the unenforceability of the
     Security Documents against Dynegy or any of its Restricted Subsidiaries for
     any reason; (viii) except as permitted by the Indenture, the Guarantee of
     the Notes by Dynegy, Illinova or any Significant Subsidiary of the Company
     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 Dynegy,
     Illinova or any Subsidiary Guarantor that is a Significant Subsidiary of
     the Company, or any Person acting on behalf of any such Guarantor, shall
     deny or disaffirm its obligations under its Guarantee; and (ix) certain
     events of bankruptcy or insolvency described in the indenture with respect
     to Dynegy or any of its Restricted Subsidiaries that is a Significant
     Subsidiary or any group of Restricted Subsidiaries that, taken together,
     would constitute a Significant Subsidiary. 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 Series A Notes may declare all such Notes to
     be due and payable. Notwithstanding the foregoing, in the case of an Event
     of Default arising from certain events of bankruptcy or insolvency, all
     outstanding Series A Notes will become due and payable without further
     action or notice. Holders may not enforce the Indenture or the Series A
     Notes except as provided in the Indenture. Subject to certain limitations,
     Holders of a majority in

                                       A1-6

<PAGE>

     principal amount of the then outstanding Series A Notes may direct the
     Trustee in its exercise of any trust or power. The Trustee may withhold
     from Holders of the Series A Notes notice of any continuing Default or
     Event of Default (except a Default or Event of Default relating to the
     payment of principal or interest) if it determines that withholding notice
     is in their interest. The Holders of a majority in aggregate principal
     amount of the Series A Notes then outstanding by notice to the Trustee may
     on behalf of the Holders of all of the Series A Notes waive any existing
     Default or Event of Default and its consequences under the Indenture except
     a continuing Default or Event of Default in the payment of interest on, or
     the principal of, the Series A Notes. The Company is required to deliver to
     the Trustee annually a statement regarding compliance with the Indenture,
     and the Company is required upon becoming aware of any Default or Event of
     Default, to deliver to the Trustee a statement specifying such Default or
     Event of Default.

          (14) Lien Subordination And Sharing. The Notes, the Note Guarantees
     and the other Note Obligations are secured by Note Liens upon the
     Collateral pursuant to the Security Documents. The Note Liens are
     subordinate in ranking to all current and future Priority Liens and of
     equal ranking with all current and future Parity Liens as set forth in
     Article 10 of the Indenture. The Notes, the Note Guarantees and the other
     Note Obligations are secured by Note Liens upon the Collateral pursuant to
     the Security Documents. The Note Liens are subordinate in ranking to all
     current and future Priority Liens and of equal ranking with all current and
     future Parity Liens as set forth in Article 11 of the Indenture.

          (15) Trustee Dealings with Company. The Trustee, in its individual or
     any other capacity, may make loans to, accept deposits from, and perform
     services for the Company or its Affiliates, and may otherwise deal with the
     Company or its Affiliates, as if it were not the Trustee.

          (16) No Recourse Against Others. A director, officer, employee,
     incorporator or stockholder, of the Company or any of the Guarantors, as
     such, shall not have any liability for any obligations of the Company or
     such Guarantor under the Notes, the Note Guarantees, the Indenture or the
     Security Documents or for any claim based on, in respect of, or by reason
     of, such obligations or their creation. Each Holder by accepting a Note
     waives and releases all such liability. The waiver and release are part of
     the consideration for the issuance of the Notes.

          (17) Authentication. This Note shall not be valid until authenticated
     by the manual signature of the Trustee or an authenticating agent.

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

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

     The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:

                                      A1-7

<PAGE>

Attention:  Dynegy Holdings Inc.
            1000 Louisiana, Suite 5800
            Houston, Texas 77002
            Attention:  Investor Relations
            (713) 507-6400

                                      A1-8

<PAGE>

                                                                      EXHIBIT A2

                                 [Face of Note]
================================================================================
                                                         CUSIP/CINS_____________

              9.875% Second Priority Senior Secured Notes due 2010

No.____                                                            $____________

                              DYNEGY HOLDINGS INC.

promises to pay to _____________________________________________________________

or registered assigns,

the principal sum of ___________________________________________________________

Dollars on July 15, 2010

Interest Payment Dates:  January 15 and July 15

Record Dates:  January 1 and July 1

Dated: _______________, 200_

                                        DYNEGY HOLDINGS INC.

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                                         (SEAL)
This is one of the Series B Notes
referred to in the within-mentioned
Indenture:

WILMINGTON TRUST COMPANY
as Trustee

By:
   -------------------------------------
           Authorized Signatory
================================================================================

                                      A2-1

<PAGE>

                                 [Back of Note]
              9.875% Second Priority Senior Secured Notes due 2010

[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]

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

          (1)  Interest. Dynegy Holdings Inc., a Delaware corporation (the
     "Company"), promises to pay interest on the principal amount of this Note
     at the rate of 9.875% per annum. The Company shall pay interest
     semi-annually in arrears on January 15 and July 15 of each year, or if any
     such day is not a Business Day, on the next succeeding Business Day (each,
     an "Interest Payment Date"). Interest on the Notes shall accrue from the
     most recent date to which interest has been paid or, if no interest has
     been paid, from the date of issuance; provided that if there is no existing
     Default in the payment of interest, and if this Note is authenticated
     between a record date referred to on the face hereof and the next
     succeeding Interest Payment Date, interest shall accrue from such next
     succeeding Interest Payment Date; provided, further, that the first
     Interest Payment Date shall be January 15, 2004. The Company shall pay
     interest (including post-petition interest in any proceeding under any
     Bankruptcy Law) on overdue principal and premium, if any, from time to time
     on demand at a rate that is 1% per annum in excess of the rate then in
     effect; it shall pay interest (including post-petition interest in any
     proceeding under any Bankruptcy Law) on overdue installments of interest
     (without regard to any applicable grace periods) from time to time on
     demand at the same rate to the extent lawful. Interest shall be computed on
     the basis of a 360-day year of twelve 30-day months.

          (2)  Method of Payment. The Company shall pay interest on the Notes
     (except defaulted interest) to the Persons who are registered Holders of
     Notes at the close of business on the January 1 or July 1 next preceding
     the 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. The
     Notes shall be payable as to principal, premium, if any, and interest at
     the office or agency of the Company maintained for such purpose within or
     without the City and State of New York, or, at the option of the Company,
     payment of interest may be made by check mailed to the Holders at their
     addresses set forth in the register of Holders; provided that payment by
     wire transfer of immediately available funds shall be required with respect
     to principal of and interest, premium on, all Global Notes and all other
     Notes the Holders of which shall have provided wire transfer instructions
     reasonably in advance to the Company or the Paying Agent. 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, shall act as Paying Agent and Registrar.
     The Company may change any Paying Agent or Registrar without notice to any
     Holder. The Company or any of its Subsidiaries may act in any such
     capacity.

          (4)  Indenture. The Company issued the Notes under an Indenture dated
     as of August 11, 2003 (the "Indenture") among the Company, the Guarantors,
     the Trustee and Wells Fargo Bank Minnesota, N.A., as collateral trustee.
     The terms of the Notes include those stated in the

                                      A2-2

<PAGE>

     Indenture and those made part of the Indenture by reference to the Trust
     Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). 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.
     The Notes are secured obligations of the Company initially issued in $525
     million in aggregate principal amount, and the Company may issue an
     unlimited amount of additional Notes of this series under the Indenture,
     subject to compliance with Section 4.09 of the Indenture. The Notes are
     secured by the Indenture and the Security Documents.

          (5)  Guarantees. The Notes are guaranteed by Dynegy Inc., the parent
     of the Company, certain other Affiliates of the Company and by all of the
     Company's wholly-owned Domestic Subsidiaries that guarantee borrowings
     under the Company's Credit Agreement as of August 11, 2003. The Note
     Guarantees are the full and unconditional and joint and several general
     obligations of the Guarantors. The Note Guarantees are secured, on a second
     priority basis, by substantially all of the same assets that secure the
     guarantees by the Guarantors of the Company's obligations under the Credit
     Agreement.

          (6)  Optional Redemption.

     At any time prior to July 15, 2006, the Company may on any one or more
     occasions redeem up to 35% of the aggregate principal amount of the Series
     B Notes issued hereunder at a redemption price of 109.875% of the principal
     amount, plus accrued and unpaid interest to the redemption date, with a
     contribution to the Company's common equity capital made with the net cash
     proceeds of a concurrent sale of common stock of Dynegy; provided that:

               (A) at least 65% of the aggregate principal amount of the Series
               B Notes issued under the Indenture (excluding Notes held by the
               Company or any of its Affiliates) remains outstanding immediately
               after the occurrence of such redemption; and

               (B) the redemption occurs within 75 days of the date of the
               closing of such sale of common stock.

     At any time prior to July 15, 2007, the Company may redeem all but not less
     than all of the Series B Notes upon the occurrence of a Change of Control,
     upon not less than 30 nor more than 60 days prior notice (but in any event
     no earlier than the date of consummation of such Change of Control and no
     later than 90 days after the occurrence of such Change of Control) at a
     redemption price equal to the principal amount of the Series B Notes
     redeemed plus the Applicable Premium for Series B Notes as of, and accrued
     and unpaid interest, if any, to the date of redemption, subject to the
     rights of Holders on the relevant record date to receive interest on the
     relevant interest payment date. This optional redemption by the Company is
     separate from and in addition to the rights of Holders as set forth in
     Section 4.15 of the Indenture.

     On or after July 15, 2007, the Company may redeem all or a part of the
     Series B 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 Series B Notes redeemed, to
     the applicable redemption date, if redeemed during the twelve-month period
     beginning on July 15 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:

                                      A2-3

<PAGE>

Year                                          Percentage
----                                          ----------
2007........................................     104.938%
2008........................................     102.469%
2009 and thereafter.........................     100.000%

     Unless the Company defaults in the payment of the redemption price,
     interest shall cease to accrue on the Notes or portions thereof called for
     redemption on the applicable redemption date.

          (7)  Mandatory Redemption. The Company is not required to make
     mandatory redemption or sinking fund payments with respect to the Notes.

          (8)  Repurchase At Option of Holder.

          If there is a Change of Control, the Company shall be required to make
     an offer (a "Change of Control Offer") to repurchase all or any part (equal
     to $1,000 or an integral multiple thereof) of each Holder's Notes at a
     purchase price equal to 101% of the aggregate principal amount thereof plus
     accrued and unpaid thereon, if any, to the date of purchase subject to the
     rights of Holders on the relevant record date to receive interest due on
     the relevant interest payment date. Within 30 days following any Change of
     Control, the Company shall mail a notice to each holder describing the
     transaction or transactions that constitute the Change of Control and
     offering to repurchase Notes on the Change of Control Payment Date
     specified in the notice, which date shall 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 the Indenture and described in such notice.

          If Dynegy or any of its Restricted Subsidiaries consummate any Asset
     Sales, when the aggregate amount of Excess Proceeds exceeds $50.0 million
     or at such earlier time as the Company may elect, the Company shall make an
     Asset Sale Offer to all Holders of Notes and all holders of other
     Indebtedness that is pari passu with the Notes containing provisions
     similar to those set forth in the Indenture with respect to offers to
     purchase or redeem with the proceeds of sales of assets (an "Asset Sale
     Offer") pursuant to Section 3.09 of the Indenture 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 to
     the extent required by the indentures governing other Indebtedness. The
     offer price in any Asset Sale Offer shall be equal to 100% of principal
     amount plus accrued and unpaid interest to the date of purchase, and shall
     be payable in cash. If any Excess Proceeds remain after consummation of an
     Asset Sale Offer, such Excess Proceeds shall be released from the Cash
     Collateral Account and the Company may use those Excess Proceeds for any
     purpose not otherwise prohibited by the 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 Trustee
     shall select the Notes and such other pari passu Indebtedness to be
     purchased on a pro rata basis. Holders of Notes that are the subject of an
     offer to purchase will receive an Asset Sale Offer from the Company 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" on the
     reverse of the Notes.

          (9)  Notice Of Redemption. Notice of redemption will be mailed by
     first class mail at least 30 days but not more than 60 days before a
     redemption date to each Holder whose Notes are to be redeemed at its
     registered address, except that a redemption notice may be mailed more than
     60 days prior to a redemption date if the notice is issued in connection
     with a defeasance of the Notes or a satisfaction and discharge of the
     Indenture. Notes in denominations larger than $1,000 may be redeemed in
     part but only in whole multiples of $1,000, unless all of the Notes held by
     a

                                      A2-4

<PAGE>

     Holder are to be redeemed. On and after the redemption date interest ceases
     to accrue on Notes or portions thereof called for redemption.

          (10) Denominations, Transfer, Exchange. The Notes are in registered
     form without coupons in denominations of $1,000 and integral multiples of
     $1,000. 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 Company may require a Holder to pay any taxes
     and fees required by law or permitted by the Indenture. The Company need
     not exchange or register the transfer of any Note or portion of a Note
     selected for redemption, except for the unredeemed portion of any Note
     being redeemed in part. Also, the Company need not exchange or register the
     transfer of any Notes for a period of 15 days before a selection of Notes
     to be redeemed or during the period between a record date and the
     corresponding Interest Payment Date.

          (11) Persons Deemed Owners. The registered Holder of a Note may be
     treated as its owner for all purposes.

          (12) Amendment, Supplement and Waiver. Subject to certain exceptions,
     the Indenture, the Note Guarantees or the Notes may be amended or
     supplemented with the consent of the Holders of at least a majority in
     principal amount of the then outstanding Series B Notes voting as a single
     class, and any existing default or compliance with any provision of the
     Indenture, the Notes or the Note Guarantees may be waived with the consent
     of the Holders of a majority in principal amount of the then outstanding
     Series B Notes voting as a single class. Without the consent of any Holder
     of a Note, the Indenture, the Notes or the Note Guarantees may be amended
     or supplemented to cure any ambiguity, defect or inconsistency, to provide
     for uncertificated Notes in addition to or in place of certificated Notes,
     to provide for the assumption of the Company's or any Guarantor's
     obligations to Holders of the Notes in case of a merger or consolidation,
     to make any change that would provide any additional rights or benefits to
     the Holders of the Notes or that does not adversely affect the legal rights
     under the Indenture of any such Holder, to comply with the requirements of
     the SEC in order to effect or maintain the qualification of the Indenture
     under the Trust Indenture Act, to provide for the Issuance of Additional
     Notes in accordance with the limitations set forth in the Indenture, or to
     allow any Guarantor to execute a supplemental indenture to the Indenture
     and/or a Note Guarantee with respect to the Notes, to make, complete or
     confirm any grant of Collateral permitted or required by the Indenture or
     any release of Collateral that becomes effective as set forth in the
     Indenture, to reflect any waiver or termination of any right arising under
     Article 11 of the Indenture that otherwise would be enforceable by any
     holder of a Parity Lien Obligation or Parity Lien, if such waiver or
     termination is set forth or provided in the Indenture or agreement
     governing or giving rise to such Parity Lien Obligation or Parity Lien
     (provided, that no such waiver or amendment pursuant to clause (9) of
     Section 9.01 of the Indenture shall adversely affect the rights of the
     Holders), or to conform the text of the Indenture, the Notes, the Note
     Guarantees or the Security Documents to any provision that was contained in
     the Offering Circular, dated as of August 1, 2003, that was used by the
     Initial Purchasers in connection with the distribution of the Initial Notes
     to the extent that such document contained a description of any provision
     of the Indenture, the Notes, the Note Guarantees or the Security Documents
     that was intended to be a verbatim recitation of such provision.

          (13) Defaults and Remedies. Each of the following is an Event of
     Default for the Series B Notes: (i) default for 30 days in the payment when
     due of interest on any Series B Notes; (ii) default in payment when due of
     the principal of, or premium, if any, on any Series B Notes; (iii) failure
     by Dynegy or any of its Restricted Subsidiaries to comply with the
     provisions

                                      A2-5

<PAGE>

     described in Sections 4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture for
     30 days after written notice from the Trustee or the holders of at least
     25% in aggregate principal amount of the Series B Notes then outstanding to
     comply with such provisions; (iv) failure by Dynegy or any of its
     Restricted Subsidiaries for 60 days after written notice from the Trustee
     or the holders of at least 25% in aggregate principal amount of the Series
     B Notes then outstanding to comply with any of the other agreements in the
     Indenture or the Security Documents; (v) 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 Dynegy
     or any of its Restricted Subsidiaries (or the payment of which is
     guaranteed by Dynegy or any of its Restricted Subsidiaries) whether such
     Indebtedness or guarantee now exists, or is created after the date of the
     Indenture, if that default: (x) is caused by a failure to pay principal of,
     or interest or premium, if any, on such Indebtedness prior to the
     expiration of the grace period provided in such Indebtedness on the date of
     such default (a "Payment Default") or (y) results in the acceleration of
     such Indebtedness prior to its express maturity, and, in each case, the
     principal amount of any such Indebtedness, together with the principal
     amount of any other such Indebtedness under which there has been a Payment
     Default or the maturity of which has been so accelerated, aggregates $50.0
     million or more; provided that, if such default shall be remedied or cured
     by Dynegy or such Restricted Subsidiary or waived by the holder of such
     Indebtedness, in each case before acceleration of the Notes, then the Event
     of Default under the Indenture caused by reason thereof shall be deemed
     likewise to have been remedied, cured or waived without further action on
     the part of the Trustee, any holder of Notes or any other Person; (vi)
     failure by Dynegy or any of its 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; (vii)
     breach by Dynegy or any of its Restricted Subsidiaries of any
     representation or warranty or agreement in the Security Documents, the
     repudiation by Dynegy or any of its Restricted Subsidiaries of any of its
     obligations under the Security Documents or the unenforceability of the
     Security Documents against Dynegy or any of its Restricted Subsidiaries for
     any reason; (viii) except as permitted by the Indenture, the Guarantee of
     the Notes by Dynegy, Illinova or any Significant Subsidiary of the Company
     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 Dynegy,
     Illinova or any Subsidiary Guarantor that is a Significant Subsidiary of
     the Company, or any Person acting on behalf of any such Guarantor, shall
     deny or disaffirm its obligations under its Guarantee; and (ix) certain
     events of bankruptcy or insolvency described in the indenture with respect
     to Dynegy or any of its Restricted Subsidiaries that is a Significant
     Subsidiary or any group of Restricted Subsidiaries that, taken together,
     would constitute a Significant Subsidiary. 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 Series B Notes may declare all such Notes to
     be due and payable. Notwithstanding the foregoing, in the case of an Event
     of Default arising from certain events of bankruptcy or insolvency, all
     outstanding Notes will become due and payable without further action or
     notice. Holders may not enforce the Indenture or the Series B Notes except
     as provided in the Indenture. Subject to certain limitations, Holders of a
     majority in principal amount of the then outstanding Series B 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 or
     Event of Default (except a Default or Event of Default relating to the
     payment of principal or interest) if it determines that withholding notice
     is in their interest. The Holders of a majority in aggregate principal
     amount of the Series B Notes then outstanding by notice to the Trustee may
     on behalf of the Holders of all of the Series B Notes waive any existing
     Default or Event of Default and its consequences under the Indenture except
     a continuing Default or Event of Default in the payment of interest on, or
     the principal of, the Series B Notes. The Company is required to deliver to
     the Trustee annually a statement regarding compliance with the Indenture,
     and the

                                      A2-6

<PAGE>

     Company is required upon becoming aware of any Default or Event of Default,
     to deliver to the Trustee a statement specifying such Default or Event of
     Default.

          (14) Lien Subordination And Sharing. The Notes, the Note Guarantees
     and the other Note Obligations are secured by Note Liens upon the
     Collateral pursuant to the Security Documents. The Note Liens are
     subordinate in ranking to all current and future Priority Liens and of
     equal ranking with all current and future Parity Liens as set forth in
     Article 10 of the Indenture. The Notes, the Note Guarantees and the other
     Note Obligations are secured by Note Liens upon the Collateral pursuant to
     the Security Documents. The Note Liens are subordinate in ranking to all
     current and future Priority Liens and of equal ranking with all current and
     future Parity Liens as set forth in Article 11 of the Indenture.

          (15) Trustee Dealings with Company. The Trustee, in its individual or
     any other capacity, may make loans to, accept deposits from, and perform
     services for the Company or its Affiliates, and may otherwise deal with the
     Company or its Affiliates, as if it were not the Trustee.

          (16) No Recourse Against Others. A director, officer, employee,
     incorporator or stockholder, of the Company or any of the Guarantors, as
     such, shall not have any liability for any obligations of the Company or
     such Guarantor under the Notes, the Note Guarantees, the Indenture or the
     Security Documents or for any claim based on, in respect of, or by reason
     of, such obligations or their creation. Each Holder by accepting a Note
     waives and releases all such liability. The waiver and release are part of
     the consideration for the issuance of the Notes.

          (17) Authentication. This Note shall not be valid until authenticated
     by the manual signature of the Trustee or an authenticating agent.

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

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

     The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:

Attention:   Dynegy Holdings Inc.
             1000 Louisiana, Suite 5800
             Houston, Texas 77002
             Attention:  Investor Relations
             (713) 507-6400

                                      A2-7

<PAGE>

                                                                      EXHIBIT A3
                                 [Face of Note]
================================================================================
                                                         CUSIP/CINS ____________

              10.125% Second Priority Senior Secured Notes due 2013

No. ___                                                            $____________
                              DYNEGY HOLDINGS INC.

promises to pay to______________________________________________________________

or registered assigns,

the principal sum of____________________________________________________________

Dollars on July 15, 2013

Interest Payment Dates:  January 15 and July 15

Record Dates:  January 1 and July 1

Dated:_______________, 200_

                                         DYNEGY HOLDINGS INC.

                                         By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                                          (SEAL)
This is one of the Series C Notes
referred to in the within-mentioned
Indenture:

WILMINGTON TRUST COMPANY
as Trustee

By:
   ------------------------------------
          Authorized Signatory

================================================================================

                                      A3-1

<PAGE>

                                 [Back of Note]
              10.125% Second Priority Senior Secured Notes due 2013

[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]

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

          (1)  Interest. Dynegy Holdings Inc., a Delaware corporation (the
     "Company"), promises to pay interest on the principal amount of this Note
     at the rate of 10.125% per annum. The Company shall pay interest
     semi-annually in arrears on January 15 and July 15 of each year, or if any
     such day is not a Business Day, on the next succeeding Business Day (each,
     an "Interest Payment Date"). Interest on the Notes shall accrue from the
     most recent date to which interest has been paid or, if no interest has
     been paid, from the date of issuance; provided that if there is no existing
     Default in the payment of interest, and if this Note is authenticated
     between a record date referred to on the face hereof and the next
     succeeding Interest Payment Date, interest shall accrue from such next
     succeeding Interest Payment Date; provided, further, that the first
     Interest Payment Date shall be January 15, 2004. The Company shall pay
     interest (including post-petition interest in any proceeding under any
     Bankruptcy Law) on overdue principal and premium, if any, from time to time
     on demand at a rate that is 1% per annum in excess of the rate then in
     effect; it shall pay interest (including post-petition interest in any
     proceeding under any Bankruptcy Law) on overdue installments of interest
     (without regard to any applicable grace periods) from time to time on
     demand at the same rate to the extent lawful. Interest shall be computed on
     the basis of a 360-day year of twelve 30-day months.

          (2)  Method of Payment. The Company shall pay interest on the Notes
     (except defaulted interest) to the Persons who are registered Holders of
     Notes at the close of business on the January 1 or July 1 next preceding
     the 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. The
     Notes shall be payable as to principal, premium, if any, and interest at
     the office or agency of the Company maintained for such purpose within or
     without the City and State of New York, or, at the option of the Company,
     payment of interest may be made by check mailed to the Holders at their
     addresses set forth in the register of Holders; provided that payment by
     wire transfer of immediately available funds shall be required with respect
     to principal of and interest, premium on, all Global Notes and all other
     Notes the Holders of which shall have provided wire transfer instructions
     reasonably in advance to the Company or the Paying Agent. 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, shall act as Paying Agent and Registrar.
     The Company may change any Paying Agent or Registrar without notice to any
     Holder. The Company or any of its Subsidiaries may act in any such
     capacity.

          (4)  Indenture. The Company issued the Notes under an Indenture dated
     as of August 11, 2003 (the "Indenture") among the Company, the Guarantors,
     the Trustee and Wells Fargo Bank Minnesota, N.A., as collateral trustee.
     The terms of the Notes include those stated in the

                                      A3-2

<PAGE>

     Indenture and those made part of the Indenture by reference to the Trust
     Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). 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.
     The Notes are secured obligations of the Company initially issued in $700
     million in aggregate principal amount, and the Company may issue an
     unlimited amount of additional Notes of this series under the Indenture,
     subject to compliance with Section 4.09 of the Indenture. The Notes are
     secured by the Indenture and the Security Documents.

          (5)  Guarantees. The Notes are guaranteed by Dynegy Inc., the parent
     of the Company, certain other Affiliates of the Company and by all of the
     Company's wholly-owned Domestic Subsidiaries that guarantee borrowings
     under the Company's Credit Agreement as of August 11, 2003. The Note
     Guarantees are the full and unconditional and joint and several general
     obligations of the Guarantors. The Note Guarantees are secured, on a second
     priority basis, by substantially all of the same assets that secure the
     guarantees by the Guarantors of the Company's obligations under the Credit
     Agreement.

          (6)  Optional Redemption.

     At any time prior to July 15, 2006, the Company may on any one or more
     occasions redeem up to 35% of the aggregate principal amount of the Series
     C Notes issued hereunder at a redemption price of 110.125% of the principal
     amount, plus accrued and unpaid interest to the redemption date, with a
     contribution to the Company's common equity capital made with the net cash
     proceeds of a concurrent sale of common stock of Dynegy; provided that:

               (A)  at least 65% of the aggregate principal amount of the Series
               C Notes issued under the Indenture (excluding Notes held by the
               Company or any of its Affiliates) remains outstanding immediately
               after the occurrence of such redemption; and

               (B)  the redemption occurs within 75 days of the date of the
               closing of such sale of common stock.

     At any time prior to July 15, 2008, the Company may redeem all but not less
     than all of the Series C Notes upon the occurrence of a Change of Control,
     upon not less than 30 nor more than 60 days prior notice (but in any event
     no earlier than the date of consummation of such Change of Control and no
     later than 90 days after the occurrence of such Change of Control) at a
     redemption price equal to the principal amount of the Series C Notes
     redeemed plus the Applicable Premium for Series C Notes as of, and accrued
     and unpaid interest, if any, to the date of redemption, subject to the
     rights of Holders on the relevant record date to receive interest on the
     relevant interest payment date. This optional redemption by the Company is
     separate from and in addition to the rights of Holders as set forth in
     Section 4.15 of the Indenture.

     On or after July 15, 2008, the Company may redeem all or a part of the
     Series C 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 Series C Notes redeemed, to
     the applicable redemption date, if redeemed during the twelve-month period
     beginning on July 15 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:

                                      A3-3

<PAGE>

Year                               Percentage
----                               ----------
2008 ...........................      105.063%
2009 ...........................      103.375%
2010 ...........................      101.688%
2011 and thereafter.............      100.000%

     Unless the Company defaults in the payment of the redemption price,
     interest shall cease to accrue on the Notes or portions thereof called for
     redemption on the applicable redemption date.

          (7)  Mandatory Redemption. The Company is not required to make
     mandatory redemption or sinking fund payments with respect to the Notes.

          (8)  Repurchase At Option of Holder.

          If there is a Change of Control, the Company shall be required to make
     an offer (a "Change of Control Offer") to repurchase all or any part (equal
     to $1,000 or an integral multiple thereof) of each Holder's Notes at a
     purchase price equal to 101% of the aggregate principal amount thereof plus
     accrued and unpaid thereon, if any, to the date of purchase subject to the
     rights of Holders on the relevant record date to receive interest due on
     the relevant interest payment date. Within 30 days following any Change of
     Control, the Company shall mail a notice to each holder describing the
     transaction or transactions that constitute the Change of Control and
     offering to repurchase Notes on the Change of Control Payment Date
     specified in the notice, which date shall 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 the Indenture and described in such notice.

          If Dynegy or any of its Restricted Subsidiaries consummate any Asset
     Sales, when the aggregate amount of Excess Proceeds exceeds $50.0 million
     or at such earlier time as the Company may elect, the Company shall make an
     Asset Sale Offer to all Holders of Notes and all holders of other
     Indebtedness that is pari passu with the Notes containing provisions
     similar to those set forth in the Indenture with respect to offers to
     purchase or redeem with the proceeds of sales of assets (an "Asset Sale
     Offer") pursuant to Section 3.09 of the Indenture 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 to
     the extent required by the indentures governing other Indebtedness. The
     offer price in any Asset Sale Offer shall be equal to 100% of principal
     amount plus accrued and unpaid interest to the date of purchase, and shall
     be payable in cash. If any Excess Proceeds remain after consummation of an
     Asset Sale Offer, such Excess Proceeds shall be released from the Cash
     Collateral Account and the Company may use those Excess Proceeds for any
     purpose not otherwise prohibited by the 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 Trustee
     shall select the Notes and such other pari passu Indebtedness to be
     purchased on a pro rata basis. Holders of Notes that are the subject of an
     offer to purchase will receive an Asset Sale Offer from the Company 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" on the
     reverse of the Notes.

          (9)  Notice of Redemption. Notice of redemption will be mailed by
     first class mail at least 30 days but not more than 60 days before a
     redemption date to each Holder whose Notes are to be redeemed at its
     registered address, except that a redemption notice may be mailed more than
     60 days prior to a redemption date if the notice is issued in connection
     with a defeasance of the Notes or a satisfaction and discharge of the
     Indenture. Notes in denominations larger than $1,000 may be redeemed in
     part but only in whole multiples of $1,000, unless all of the Notes held by
     a

                                      A3-4

<PAGE>

     Holder are to be redeemed. On and after the redemption date interest ceases
     to accrue on Notes or portions thereof called for redemption.

          (10) Denominations, Transfer, Exchange. The Notes are in registered
     form without coupons in denominations of $1,000 and integral multiples of
     $1,000. 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 Company may require a Holder to pay any taxes
     and fees required by law or permitted by the Indenture. The Company need
     not exchange or register the transfer of any Note or portion of a Note
     selected for redemption, except for the unredeemed portion of any Note
     being redeemed in part. Also, the Company need not exchange or register the
     transfer of any Notes for a period of 15 days before a selection of Notes
     to be redeemed or during the period between a record date and the
     corresponding Interest Payment Date.

          (11) Persons Deemed Owners. The registered Holder of a Note may be
     treated as its owner for all purposes.

          (12) Amendment, Supplement and Waiver. Subject to certain exceptions,
     the Indenture, the Note Guarantees or the Notes may be amended or
     supplemented with the consent of the Holders of at least a majority in
     principal amount of the then outstanding Series C Notes voting as a single
     class, and any existing default or compliance with any provision of the
     Indenture, the Notes or the Note Guarantees may be waived with the consent
     of the Holders of a majority in principal amount of the then outstanding
     Series C Notes voting as a single class. Without the consent of any Holder
     of a Note, the Indenture, the Notes or the Note Guarantees may be amended
     or supplemented to cure any ambiguity, defect or inconsistency, to provide
     for uncertificated Notes in addition to or in place of certificated Notes,
     to provide for the assumption of the Company's or any Guarantor's
     obligations to Holders of the Notes in case of a merger or consolidation,
     to make any change that would provide any additional rights or benefits to
     the Holders of the Notes or that does not adversely affect the legal rights
     under the Indenture of any such Holder, to comply with the requirements of
     the SEC in order to effect or maintain the qualification of the Indenture
     under the Trust Indenture Act, to provide for the Issuance of Additional
     Notes in accordance with the limitations set forth in the Indenture, or to
     allow any Guarantor to execute a supplemental indenture to the Indenture
     and/or a Note Guarantee with respect to the Notes, to make, complete or
     confirm any grant of Collateral permitted or required by the Indenture or
     any release of Collateral that becomes effective as set forth in the
     Indenture, to reflect any waiver or termination of any right arising under
     Article 11 of the Indenture that otherwise would be enforceable by any
     holder of a Parity Lien Obligation or Parity Lien, if such waiver or
     termination is set forth or provided in the Indenture or agreement
     governing or giving rise to such Parity Lien Obligation or Parity Lien
     (provided, that no such waiver or amendment pursuant to clause (9) of
     Section 9.01 of the Indenture shall adversely affect the rights of the
     Holders), or to conform the text of the Indenture, the Notes, the Note
     Guarantees or the Security Documents to any provision that was contained in
     the Offering Circular, dated as of August 1, 2003, that was used by the
     Initial Purchasers in connection with the distribution of the Initial Notes
     to the extent that such document contained a description of any provision
     of the Indenture, the Notes, the Note Guarantees or the Security Documents
     that was intended to be a verbatim recitation of such provision.

          (13) Defaults and Remedies. Each of the following is an Event of
     Default for the Series C Notes: (i) default for 30 days in the payment when
     due of interest on any Series C Notes; (ii) default in payment when due of
     the principal of, or premium, if any, on any Series C Notes; (iii) failure
     by Dynegy or any of its Restricted Subsidiaries to comply with the
     provisions

                                      A3-5

<PAGE>

     described in Sections 4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture for
     30 days after written notice from the Trustee or the holders of at least
     25% in aggregate principal amount of the Series C Notes then outstanding to
     comply with such provisions; (iv) failure by Dynegy or any of its
     Restricted Subsidiaries for 60 days after written notice from the Trustee
     or the holders of at least 25% in aggregate principal amount of the Series
     C Notes then outstanding to comply with any of the other agreements in the
     Indenture or the Security Documents; (v) 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 Dynegy
     or any of its Restricted Subsidiaries (or the payment of which is
     guaranteed by Dynegy or any of its Restricted Subsidiaries) whether such
     Indebtedness or guarantee now exists, or is created after the date of the
     Indenture, if that default: (x) is caused by a failure to pay principal of,
     or interest or premium, if any, on such Indebtedness prior to the
     expiration of the grace period provided in such Indebtedness on the date of
     such default (a "Payment Default") or (y) results in the acceleration of
     such Indebtedness prior to its express maturity, and, in each case, the
     principal amount of any such Indebtedness, together with the principal
     amount of any other such Indebtedness under which there has been a Payment
     Default or the maturity of which has been so accelerated, aggregates $50.0
     million or more; provided that, if such default shall be remedied or cured
     by Dynegy or such Restricted Subsidiary or waived by the holder of such
     Indebtedness, in each case before acceleration of the Notes, then the Event
     of Default under the Indenture caused by reason thereof shall be deemed
     likewise to have been remedied, cured or waived without further action on
     the part of the Trustee, any holder of Notes or any other Person; (vi)
     failure by Dynegy or any of its 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; (vii)
     breach by Dynegy or any of its Restricted Subsidiaries of any
     representation or warranty or agreement in the Security Documents, the
     repudiation by Dynegy or any of its Restricted Subsidiaries of any of its
     obligations under the Security Documents or the unenforceability of the
     Security Documents against Dynegy or any of its Restricted Subsidiaries for
     any reason; (viii) except as permitted by the Indenture, the Guarantee of
     the Notes by Dynegy, Illinova or any Significant Subsidiary of the Company
     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 Dynegy,
     Illinova or any Subsidiary Guarantor that is a Significant Subsidiary of
     the Company, or any Person acting on behalf of any such Guarantor, shall
     deny or disaffirm its obligations under its Guarantee; and (ix) certain
     events of bankruptcy or insolvency described in the indenture with respect
     to Dynegy or any of its Restricted Subsidiaries that is a Significant
     Subsidiary or any group of Restricted Subsidiaries that, taken together,
     would constitute a Significant Subsidiary. 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 Series C Notes may declare all such Notes to
     be due and payable. Notwithstanding the foregoing, in the case of an Event
     of Default arising from certain events of bankruptcy or insolvency, all
     outstanding Series C Notes will become due and payable without further
     action or notice. Holders may not enforce the Indenture or the Series C
     Notes except as provided in the Indenture. Subject to certain limitations,
     Holders of a majority in principal amount of the then outstanding Series C
     Notes may direct the Trustee in its exercise of any trust or power. The
     Trustee may withhold from Holders of the Series C Notes notice of any
     continuing Default or Event of Default (except a Default or Event of
     Default relating to the payment of principal or interest) if it determines
     that withholding notice is in their interest. The Holders of a majority in
     aggregate principal amount of the Series C Notes then outstanding by notice
     to the Trustee may on behalf of the Holders of all of the Series C Notes
     waive any existing Default or Event of Default and its consequences under
     the Indenture except a continuing Default or Event of Default in the
     payment of interest on, or the principal of, the Series C Notes. The
     Company is required to deliver to the Trustee annually a statement
     regarding compliance with the

                                      A3-6

<PAGE>

     Indenture, and the Company is required upon becoming aware of any Default
     or Event of Default, to deliver to the Trustee a statement specifying such
     Default or Event of Default.

          (14) Lien Subordination AND Sharing. The Notes, the Note Guarantees
     and the other Note Obligations are secured by Note Liens upon the
     Collateral pursuant to the Security Documents. The Note Liens are
     subordinate in ranking to all current and future Priority Liens and of
     equal ranking with all current and future Parity Liens as set forth in
     Article 10 of the Indenture. The Notes, the Note Guarantees and the other
     Note Obligations are secured by Note Liens upon the Collateral pursuant to
     the Security Documents. The Note Liens are subordinate in ranking to all
     current and future Priority Liens and of equal ranking with all current and
     future Parity Liens as set forth in Article 11 of the Indenture.

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

          (16) No Recourse Against Others. A director, officer, employee,
     incorporator or stockholder, of the Company or any of the Guarantors, as
     such, shall not have any liability for any obligations of the Company or
     such Guarantor under the Notes, the Note Guarantees, the Indenture or the
     Security Documents or for any claim based on, in respect of, or by reason
     of, such obligations or their creation. Each Holder by accepting a Note
     waives and releases all such liability. The waiver and release are part of
     the consideration for the issuance of the Notes.

          (17) Authentication. This Note shall not be valid until authenticated
     by the manual signature of the Trustee or an authenticating agent.

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

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

     The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:

Attention:   Dynegy Holdings Inc.
             1000 Louisiana, Suite 5800
             Houston, Texas 77002
             Attention:  Investor Relations
             (713) 507-6400

                                      A3-7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]